[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Rules and Regulations]
[Pages 79802-79821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26321]


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DEPARTMENT OF ENERGY

10 CFR Parts 430 and 431

[EERE-2019-BT-NOA-0011]
RIN 1904-AE24


Test Procedure Interim Waiver Process

AGENCY: Office of Energy Efficiency and Renewable Energy, U.S. 
Department of Energy.

ACTION: Final rule.

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SUMMARY: In this final rule, the U.S. Department of Energy (``DOE'') 
has adopted a streamlined approach to its test procedure waiver 
decision-making process that requires the Department to notify, in 
writing, an applicant for an interim waiver of the disposition of the 
request within 45 business days of receipt of the application. An 
interim waiver will remain in effect until a final waiver decision is 
published in the Federal Register or until DOE publishes a new or 
amended test procedure that addresses the issues presented in the 
application, whichever is earlier. DOE's regulations continue to 
specify that DOE will take either of these actions within 1 year of 
issuance of an interim waiver. This final rule addresses delays in 
DOE's current process for considering requests for interim waivers and 
waivers from the DOE test method, which in turn can result in 
significant delays for manufacturers in bringing new and innovative 
products to market. This final rule requires the Department to process 
interim waiver requests within the 45 business day window and clarifies 
the process by which interested stakeholders provide input into the 
development of an appropriate test procedure waiver.

DATES: The effective date of this rule is January 11, 2021.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at http://www.regulations.gov. All documents in the docket are listed in the 
http://www.regulations.gov index. However, some documents listed in the 
index, such as those containing information that is exempt from public 
disclosure, may not be publicly available.
    A link to the docket web page can be found at: http://www.regulations.gov/docket?D=EERE-2019-BT-NOA-0011. The http://www.regulations.gov web page contains instructions on how to access all 
documents, including public comments, in the docket.

FOR FURTHER INFORMATION CONTACT: Ms. Francine Pinto, U.S. Department of 
Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue 
SW, Washington, DC 20585-0121. Telephone: (202) 287-7432. Email: 
<a href="/cdn-cgi/l/email-protection#1c5a6e7d727f757279324c757268735c746d32787379327b736a"><span class="__cf_email__" data-cfemail="2c6a5e4d424f454249027c454258436c445d02484349024b435a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:
I. Legal Authority and Background
    A. Legal Authority
    B. Background
II. Discussion of Amendments
III. Response to Comments Received
IV. Procedural Requirements
    A. Review Under Executive Order 12866 and 13563
    B. Review Under Executive Orders 13771 and 13777
    i. National Cost Savings and Forgone Benefits
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act
    E. Review Under the National Environmental Policy Act
    F. Review Under Executive Order 12988
    G. Review Under Executive Order 13132
    H. Review Under Executive Order 13175
    I. Review Under the Unfunded Mandates Reform Act of 1995
    J. Review Under Executive Order 13211
    K. Review Under the Treasury and General Government 
Appropriations Act, 1999
    L. Review Under the Treasury and General Government 
Appropriations Act, 2001
    M. Congressional Notification
V. Approval of the Office of the Secretary

I. Legal Authority and Background

A. Legal Authority

    The Energy Policy and Conservation Act (``EPCA'' or ``the 
Act''),\1\ Public Law 94-163 (42 U.S.C. 6291-6317) authorizes the 
United States Department of Energy (DOE or, in context, the Department) 
to regulate the energy efficiency of a number of consumer products and 
industrial equipment types. Title III, Part B \2\ of EPCA established 
the Energy Conservation Program for Consumer Products Other Than 
Automobiles. Title III, Part C \3\ of EPCA established the Energy 
Conservation Program for Certain Industrial Equipment. Under EPCA, 
DOE's energy conservation program consists essentially of four parts: 
(1) Testing, (2) labeling, (3) Federal energy conservation standards, 
and (4) certification and enforcement procedures.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the America's Water Infrastructure Act of 2018, 
Public Law 115-270 (October 23, 2018).
    \2\ For editorial reasons, Part B was redesignated as Part A 
upon codification in the U.S. Code.
    \3\ For editorial reasons, Part C was redesignated as Part A-1 
upon codification in the U.S. Code.
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    The Federal testing requirements consist of test procedures that 
manufacturers of covered products and equipment must use as the basis 
for: (1) Certifying to DOE that their products or equipment complies 
with the applicable energy conservation standards adopted pursuant to 
EPCA (42 U.S.C. 6295(s); 42 U.S.C. 6316(a)), and (2) making 
representations about the efficiency of those products or equipment (42 
U.S.C. 6293(c); 42 U.S.C. 6314(d)). Similarly, DOE must use these test 
procedures to determine whether the product or equipment complies with 
relevant standards promulgated under EPCA. (42 U.S.C. 6295(s); 42 
U.S.C. 6316 (a))
    Under 42 U.S.C. 6293 and 42 U.S.C. 6314, EPCA sets forth the 
criteria and procedures DOE is required to follow when prescribing or 
amending test procedures for covered products and equipment. 
Specifically, test procedures must be reasonably designed to produce

[[Page 79803]]

test results that reflect energy efficiency, energy use or estimated 
annual operating cost of a covered product or covered equipment during 
a representative average use cycle or period of use, and must not be 
unduly burdensome to conduct (42 U.S.C. 6293(b)(3); 42 U.S.C. 
6314(a)(2)). As a waiver is the issuance of a test procedure applicable 
to certain products, these same requirements are applicable to any 
alternate test procedure that DOE may specify in an interim waiver or 
waiver. Subsequent to issuance of an interim waiver or waiver, DOE 
conducts a rulemaking to amend the generally applicable test procedure 
to address the issue that gave rise to the creation of a new test 
procedure for the requesting party.
    DOE's regulations provide that upon receipt of a petition, DOE will 
grant a waiver from the test procedure requirements if DOE determines 
either that the basic model for which the waiver was requested contains 
a design characteristic that prevents testing of the basic model 
according to the prescribed test procedures, or that the prescribed 
test procedure evaluates the basic model in a manner so 
unrepresentative of its true energy consumption characteristics as to 
provide materially inaccurate comparative data. 10 CFR 430.27(a)(1) and 
10 CFR 431.401(f)(2). DOE may grant the waiver subject to conditions, 
including adherence to alternate test procedures. DOE regulations also 
provide that in addition to the full waiver (``decision and order'') 
described previously, the waiver process permits parties to also file 
an application for interim waiver from the applicable test procedure 
requirements. 10 CFR 430.27(a) and 10 CFR 431.401(a). DOE will grant an 
interim waiver if it appears likely that the petition for waiver will 
be granted or if DOE determines that it would be desirable for public 
policy reasons to grant immediate relief pending a decision on the 
petition for waiver. 10 CFR 430.27(e)(2) and 10 CFR 431.401(e)(2).

B. Background

    In May of 2019, DOE proposed to streamline its existing interim 
waiver process by amending its regulations to require that the 
Department would make a determination on an interim waiver request 
within 30 business days of receipt. Under that proposal, should DOE 
fail to notify the applicant in writing of the determination within 30 
business days, the request for interim waiver would be granted based on 
the criteria set forth in DOE regulations. 84 FR 18414 (May 1, 2019). 
The petitioner would be authorized to use the alternate test procedure 
specified in the request for interim waiver. Id.
    DOE specified in the 2019 notice of proposed rulemaking (``NOPR'') 
that an interim waiver would remain in effect until a waiver decision 
is published or until DOE publishes a new or amended test procedure 
that addresses the issues presented in the application, whichever is 
earlier. If the alternate test procedure ultimately required by DOE 
differed from what was specified in the interim waiver, manufacturers 
would then have a 180-day grace period to begin using the alternate 
test procedure specified in the decision and order. If DOE denied the 
waiver request, the 180-day grace period would apply to the use of the 
test procedure specified in DOE's regulations. The proposal was 
intended to address delays in DOE's current process for considering 
requests for interim waivers from the DOE test method that ultimately 
imposed costs on manufacturers because they could not certify and 
distribute their products while awaiting a response to their petitions. 
84 FR 18414 (May 1, 2019). The NOPR provided for the submissions of 
comments by July 1, 2019.
    During the comment period, DOE received several requests to hold a 
public meeting and to extend the NOPR's comment period after the 
meeting so that the public could engage in the rulemaking process. 84 
FR 30047, 30047 (June 26, 2019). To address these requests, the 
Department held a webinar on July 11, 2019, and extended the comment 
period until July 15, 2019.\4\
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    \4\ Transcript of the webinar is available on the docket, 
https://www.regulations.gov/document?D=EERE-2019-BT-NOA-0011-0031.
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    DOE held the webinar to discuss the proposal and answer questions 
regarding the changes proposed to the existing process. (July 2019 
Webinar, No. 31 at p. 5) DOE explained that the proposal was intended 
to improve public participation and decrease uncertainty in a long 
standing process, which provided manufactures of new and innovative 
products an alternative means of testing those products while the 
Department made a final adjudication on the waiver petition. (Id. at 
pp. 5-8) DOE continued that the proposal would streamline this process 
by removing the language ``if administratively feasible'' from the 
Department's regulations and thereby require the Department to issue 
decisions on interim waiver applications within 30-business days that 
would remain in effect until the waiver decision and order was 
published, or until DOE published a new or amended test procedure. (Id. 
at pp. 9-10) If a petition was ultimately denied or granted with a 
different alternative test procedure than specified in the interim 
waiver, then the manufacturer would have 180-days to begin using that 
new test procedure. DOE stated that its intent in issuing the proposal 
was to improve the waiver process for regulated entities by making it 
more transparent and participatory as well as addressing the financial 
burden manufacturers have experienced in the past. The proposal was 
intended to shift the burden of any delays in the review process onto 
the Department, rather than the requester. (Id. at p. 11; 23) Following 
the webinar, DOE received additional requests to extend the comment 
period, which DOE granted and extended the comment period until August 
6, 2019. 84 FR 35040 (July 22, 2019).

II. Discussion of Amendments

    In this final rule, DOE is amending its regulations to address 
stakeholder concerns regarding lengthy waiting times following 
submission of interim waiver and waiver applications, and the burden 
that lengthy processing time imposes on manufacturers, who are unable 
sell their products or equipment absent an interim waiver or waiver 
from DOE.\5\ Specifically, this rule amends Parts 430 and 431 of 
Chapter II, Subchapter D, of Title 10 of the Code of Federal 
Regulations as set forth at the end of this document in a way that is 
intended to provide the public and industry with greater clarity and 
transparency to the existing waiver process, and to address specific 
administrative delays that have prevented innovative and new products 
from reaching the market.
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    \5\ See, e.g., https://energy.gov/sites/prod/files/2018/01/f46/NAFEM%20Regulatory%20Reform%20Roundtable%20Meeting%20Notes%20-%2010.31.17.pdf.
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    In this final rule, DOE has amended the current regulations to 
require that the Department make a determination on an interim waiver 
request within 45 business days of receiving a complete petition. DOE 
extended this time period from the 30 business days specified in the 
NOPR in response to comments suggesting that the Department may need 
additional time to review the interim waiver prior to issuing its 
decision. The Department believes that 45 business days provides the 
Department sufficient time to review an interim waiver request and make 
a determination on the interim waiver based on the regulatory criteria 
applicable at that step of the process, i.e., that the petition for 
waiver is likely

[[Page 79804]]

to be granted, or it is desirable for public policy to grant immediate 
relief pending a decision on the waiver petition. 10 CFR 430.27(e)(2) 
and 10 CFR 431.401(e)(2). Extending the Department's review time will 
still reduce manufacturers' burdens relative to the baseline and 
retains the certainty for manufacturers that DOE will reach a decision 
on the interim waiver within a specified time period. DOE emphasizes 
that the grant or denial of an interim waiver is an intermediate step 
in DOE's consideration of the waiver petition, and that DOE will 
continue to provide, as it does now under the current regulations, 
opportunity for public input and further consideration by the 
Department prior to issuance of a decision and order on the waiver 
petition.
    10 CFR 430.27 and 10 CFR 431.401 are amended by revising paragraph 
(e), which now requires the Department to post online a petition for an 
interim waiver within five business days of receiving an application 
and, as discussed in the preceding paragraph, will provide a decision 
on that petition for an interim waiver within 45 business days of 
receipt. 10 CFR 430.27(e)(1) and 10 CFR 431.401(e)(1). DOE added the 
requirement for posting the interim waiver in response to comments 
expressing concern that interested parties will be unaware that the 
Department received a petition for interim waiver. While DOE currently 
posts waiver and interim waiver requests on its website at https://www.energy.gov/eere/buildings/current-test-procedure-waivers, posting 
upon receipt is now specified in DOE's regulations to enhance public 
awareness of when DOE receives a request for interim waiver for 
processing pursuant to these amended regulations.
    The Department may reach a decision on the petition at any point 
during the 45 business day window. The regulations also specify that 
the Department will post on its website a notice of the determination 
regarding a petition for interim waiver within five business days and 
will publish a notice of the decision in the Federal Register as soon 
as possible thereafter. 10 CFR 430.27(e)(1)(ii) and 10 CFR 
431.401(e)(1)(ii). The Department updated these notification provisions 
from the NOPR for the same reasons of increased transparency and notice 
that it added the posting requirement for receipt of an interim waiver.
    For purposes of determining the start of the 45 business day 
window, DOE considers a waiver and interim test procedure waiver 
petition received when the application request is accepted in the email 
box for receipt of waiver petition or if delivered by mail, on the date 
the petition is stamped as received by the Department. 10 CFR 
430.27(e)(1)(iii) and 10 CFR 431.401(e)(1)(iii). DOE updated the NOPR 
to specify that failure to satisfy the criteria set forth in 10 CFR 
430.27(b)(2) and 10 CFR 431.401(b)(2) would result in denial of the 
interim waiver. (See 10 CFR 430.27(e)(1)(ii) and 10 CFR 
430.401(e)(1)(ii) of this final rule.) This change is consistent with 
the current regulatory requirements for submission of an interim waiver 
(identification of related petition and basic models, as well as 
information on the likely success of the petition and information on 
the economic hardship or competitive disadvantage that is likely to 
result absent a favorable determination and an authorized signature). 
This change is also consistent with the criteria for grant of an 
interim waiver, which require the applicant to show that the petition 
for waiver will likely be granted and/or that it is desirable for 
public policy reasons to grant immediate relief pending a decision on 
the petition for waiver. 10 CFR 430.27(e)(2) and 10 CFR 430.401(e)(2). 
DOE also considers this change consistent with the provision in its 
regulations, which remains unchanged by these amendments, specifying 
that a petitioner must submit an alternative test procedure to the 
extent that one is known with the waiver petition. 10 CFR 
430.27(b)(1)(iii) and 10 CFR 431.401(b)(1)(iii). While DOE will not 
grant an interim waiver absent an alternate test procedure specified by 
the petitioner, and the information required by 10 CFR 430.27(b)(2) and 
10 CFR 431.401(b)(2), DOE will continue to process the waiver request 
and work with the petitioner to develop an appropriate alternate test 
procedure and provide additional information as necessary to process 
the waiver.
    Revised paragraph (h) clarifies the duration of interim waivers by 
stating that an interim waiver remains in effect until the Department 
publishes a decision and order on the petition for waiver in the 
Federal Register or, publishes in the Federal Register a new or amended 
test procedure that addresses the issue(s) covered in the waiver, 
whichever is earlier. 10 CFR 430.27(h)(1) and 10 CFR 431.401(h)(1). In 
response to comments on the NOPR, DOE retains the requirement that DOE 
will complete either of these actions within one year of the issuance 
of an interim waiver. 10 CFR 430.27(h)(2) and 10 CFR 431.401(h)(2). DOE 
did not amend the current regulatory requirement that a waiver or 
interim waiver will automatically terminate on the date by which use of 
an amended test procedure that addresses the issue presented in the 
waiver is required to demonstrate compliance. 10 CFR 430.27(h)(3) and 
10 CFR 431.401(h)(3).
    The Department also revised 10 CFR 430.27(i)(1) and 10 CFR 
431.401(i)(1) to provide manufacturers with a 180-day grace period for 
compliance with a specified test procedure in this final rule. In the 
event DOE ultimately denies the petition for waiver or the alternate 
test procedure specified in the interim waiver differs from the 
alternate test procedure specified by DOE in a subsequent decision and 
order granting the petition, the affected manufacturers will have 180-
days to come into compliance. The duration of this grace period mirrors 
the amount of time the Department provides manufactures to come into 
compliance when a new test procedure is prescribed under 42 U.S.C. 
6293(e). This provision was specified in the 2019 NOPR regulatory text 
as 10 CFR 430.27(e)(1)(iii) and 10 CFR 431.401(e)(1)(iii), but has been 
relocated to 10 CFR 430.27(i)(1) and 10 CFR 431.401(i)(1) in response 
to comments that 10 CFR 430.27(i) and 10 CFR 431.401(i) already 
specified the outcome if DOE denies a waiver petition after granting an 
interim waiver, or specifies an alternate test procedure in the waiver 
decision than in the interim waiver, and so the addition of the 
originally included 10 CFR 430.27(e)(1)(iii) and 10 CFR 
431.401(e)(1)(iii) in the NOPR was confusing.

III. Response to Comments Received

------------------------------------------------------------------------
                                                           Acronym,
           Commenters                 Affiliation         identifier
------------------------------------------------------------------------
A.O. Smith Corporation..........  Manufacturer......  A.O. Smith.
Acuity Brands...................  Manufacturer......  Acuity.
Air-Conditioning, Heating, and    Manufacturer Trade  AHRI.
 Refrigeration Institute.          Group.
Alliance to Save Energy.........  Advocacy Group....  ASE.
American Council for an Energy    Advocacy Group....  ACEEE.
 Efficient Economy.

[[Page 79805]]

 
American Lighting Association...  Manufacturer......  ALA.
American Lighting Association     Manufacturer......  Joint Industry
 (ALA), the Association of Home                        Commenters.
 Appliance Manufacturers (AHAM),
 the National Automatic
 Merchandising Association
 (NAMA), and Plumbing
 Manufacturers International
 (PMI).
Anonymous Anonymous.............  Member of the       Anonymous 1.
                                   Public.
Anonymous Anonymous.............  Member of the       Anonymous 2.
                                   Public.
Appliance Standards Awareness     Advocacy Group....  ASAP, et al.
 Project with American Council
 for an Energy-Efficient
 Economy, Consumer Federation of
 America, National Consumer Law
 Center on behalf of its low-
 income clients, Northeast
 Energy Efficiency Partnerships,
 and Northwest Energy Efficiency
 Alliance.
Appliance Standards Awareness     Advocacy Group and  ASAP, et al. 2.
 Project, Alliance to Save         Utilities.
 Energy, American Council for an
 Energy-Efficient Economy,
 California Energy Commission,
 Consumer Federation of America,
 National Consumer Law Center,
 Natural Resources Defense
 Council, Northeast Energy
 Efficiency Partnerships,
 Northwest Energy Efficiency
 Alliance, Pacific Gas and
 Electric.
Association of Home Appliance     Manufacturer......  AHAM.
 Manufacturers.
Attorneys General of California,  State, Local        AG Joint
 Colorado, Connecticut,            Governments.        Commenters.
 Illinois, Maine, Maryland,
 Michigan, Minnesota, New York,
 North Carolina, Oregon,
 Vermont, Washington, the
 Commonwealth of Massachusetts,
 the District of Columbia, and
 the City of New York..
Better Climate Research and       Advocacy Group....  Better Climate
 Policy Analysis.                                      Research and
                                                       Policy Analysis.
BSH Home Appliances Corporation.  Manufacturer......  BSH.
California Energy Commission....  State.............  CEC.
Carrier Corporation.............  Industry..........  Carrier.
Connecticut Department of Energy  State.............  DEEP.
 and Environmental Protection.
Consumer Federation of America..  Advocacy Group....  CFA.
Consumer Federation of America    Advocacy Group....  Consumer Groups.
 and National Consumer Law
 Center.
Earthjustice....................  Advocacy Group....  Earthjustice.
Felix Storch, Inc...............  Manufacturer......  FSI.
Franke, Rebecca.................  Member of the       Franke.
                                   Public.
Goodman Manufacturing Company...  Manufacturer......  Goodman.
Gould, Kyle.....................  Member of the       Gould.
                                   Public.
Hamdi, Ahmed....................  Member of the       Hamdi.
                                   Public.
Hardin-Levine, Carolyn..........  Member of the       Hardin-Levine.
                                   Public.
Information Technology Industry   Industry..........  ITI.
 Council.
Ingersoll Rand..................  Manufacturer......  Ingersoll Rand.
Lennox International Inc........  Manufacturer......  Lennox.
Lutron..........................  Manufacturer......  Lutron.
National Association of State     State.............  NASEO.
 Energy Officials.
National Automatic Merchandising  Manufacturer......  NAMA.
 Association.
National Consumer Law Center....  Advocacy Group....  NCLC.
National Electrical               Manufacturer......  NEMA.
 Manufacturers Association.
Natural Resources Defense         Advocacy Group....  NRDC.
 Council.
Nortek Global HVAC..............  ..................  Nortek.
North American Association of     Manufacturer Trade  NAFEM.
 Food Equipment Manufacturers.     Group.
Northeast Energy Efficiency       Advocacy Group....  NEEP.
 Partnerships.
Northwest Energy Efficiency       Advocacy Group....  NEEA.
 Alliance.
Northwest Power and Conservation  Interstate Compact  NPCC.
 Council.
Pacific Gas and Electric........  Utility...........  PG&E.
Pacific Gas and Electric          Utilities.........  CA IOUs.
 Company, San Diego Gas and
 Electric, and Southern
 California Edison.
Plumbing Manufacturers            Manufacturer......  PMI.
 International.
Regal Beloit Corporation........  Advocacy Group....  RBC.
Sachs, Harvey...................  Member of the       Sachs.
                                   Public.
San Diego Gas and Electric......  Utility...........  SDG&E.
Sierra Club.....................  Advocacy Group....  Sierra Club.
Sierra Club & Earthjustice......  Advocacy Group....  Earthjustice.
Small Business Association--      Industry..........  SBA.
 Office of Advocacy.
Southern California Edison......  Utility...........  SCE.
Stewart, Jim....................  Member of the       Stewart.
                                   Public.
Traulsen, A Division of ITW Food  Industry..........  Traulsen.
 Equipment Group, LLC.
State of Washington Department    State.............  WA State Energy
 of Commerce, Washington State                         Office.
 Energy Office.
Weikel, Wendy...................  Member of the       Weikel.
                                   Public.
Whirlpool Corporation...........  Manufacturer......  Whirlpool.
------------------------------------------------------------------------


[[Page 79806]]

    The 2019 NOPR proposed that ``an application for interim waiver 
would be deemed granted, thereby permitting use of the alternate test 
procedure suggested by the applicant in its application, if DOE fails 
to notify the applicant in writing of the disposition of an application 
within 30 business days of receipt of the application.'' 85 FR 18414, 
18415 (May 1, 2019). During the comment period several stakeholders 
supported DOE's proposed approach. FSI believed that the current delays 
in the interim waiver process lead to substantial direct and indirect 
costs to both businesses and to consumers by not allowing innovative 
and energy saving appliances to come to market in a timely manner. 
(FSI, No. 16 at p. 1) This commenter further stated that it is an 
unfair economic penalty to all manufacturers, but especially burdensome 
to smaller manufacturers, where the investment of time and development 
is held in limbo. (Id. at p. 2) FSI asserted that the proposal creates 
a reasonable incentive for DOE to respond to petitions and that the 
requirement for a speedy waiver process is not the equivalent of self-
regulation as some commenters claimed. In addition, FSI stated that the 
current regulations already contained language protecting against 
manufacturers abusing the process, with penalties provided for doing 
so. (Id. at p. 2) Also, one commenter stated general agreement with 
DOE's proposal. (Hamdi, No. 34, at p. 1)
    ITI agreed that DOE's proposal met the goal of addressing delays in 
DOE's current process for considering requests for interim waivers, 
which can result in significant delays for manufacturers in bringing 
new and innovative products to market. (ITI, No. 20 at p. 1).
    In DOE's request for comments concerning the Department's 
prioritization of rulemakings, 85 FR 20886 (April 15, 2020) rulemaking, 
AHAM commented in support of amending the existing test procedure 
interim waiver process and prioritizing this action. AHAM agreed that 
the Department's efforts to streamline the waiver process would 
mitigate the burden for manufacturers associated with waiting for DOE 
to respond to interim waiver requests and allow DOE to instead focus 
its attention on the merits of granting a final test waiver. Based on 
the Fall 2019 Unified Agenda of Regulatory and Deregulatory Actions, 
AHAM anticipated that the finalization of the rule would not require 
the expenditure of significant resources and urged DOE to finalize the 
rule immediately. (AHAM, EERE-2020-BT-STD-0004, No. 10 at p. 3)
    NAFEM fully supported the initial 30-day review deadline before 
petitions for interim waivers were deemed granted. This commenter 
stated that the proposal would greatly reduce the uncertainty and risk 
associated with the waiver process. (NAFEM, No. 26 at p. 3) The Joint 
Industry Commenters also agreed with DOE's determination that it is 
desirable for public policy reasons, including burden reduction on 
regulated parties and administrative efficiency, to grant immediate 
relief on each petition for interim waiver if DOE does not notify 
petitioner of its interim waiver decision within the 30 business days. 
(No. 52 at p. 2) This commenter stated that DOE's proposal will lead to 
the following benefits: (1) It will allow manufacturers to more swiftly 
provide innovative, energy saving products to consumers; (2) It will 
provide certainty to regulated entities; (3) It creates a compliance 
pathway for innovative products being introduced on the market for 
which the current test procedures do not apply; and (4) DOE's proposal 
provides a clear, transparent process so that regulated parties and 
other stakeholders know how DOE will operate. (Id. at pp. 2-5) While 
supporting the DOE proposal, the Joint Industry Commenters also 
recommended that DOE add to the final rule a provision indicating that, 
in cases where interim test procedures are deemed granted by the 
passage of time, DOE will publish the interim test procedure waiver 
(and the petition for test procedure waiver) in the Federal Register 
immediately. It stated that this would be consistent with DOE's current 
practice to publish its decisions on interim waivers together with the 
notice and request for comment on the test procedure waiver petition. 
(Id. at p. 4) This commenter expects that if DOE receives a petition 
that is incomplete, it will notify the petitioner and that such a 
petition could not be considered granted by the passage of time because 
it is not complete. (Id.)
    Moreover, while NEMA stated its support for DOE's ``deemed 
granted'' approach, it would modify the proposal to provide for some 
action by DOE before an interim waiver is granted. NEMA suggested that 
the final rule provide that DOE will publish the interim test procedure 
application after the application is deemed complete by the Department. 
Then, it suggested a short comment period of 10 days to provide 
stakeholders the opportunity to raise red flags. If stakeholders and 
DOE do not identify any significant substantive problems with the 
petition for waiver, then 30 days after the interim test procedure 
application is published in the Federal Register the application should 
be deemed granted, unless DOE informs the manufacturer otherwise in 
writing. NEMA also believed that if significant and substantive 
concerns with the interim waiver are raised during the comment period 
or discovered by DOE in its preliminary review of the petition, DOE 
should be able to take another 30 days to review the petition before 
determining if the interim waiver is granted as-is, granted with 
modifications, or denied. (No. 55 at pp. 4-5) NEMA stated that these 
modifications will address the possibility of competitive gamesmanship 
and increase transparency.
    The Office of Advocacy for the Small Business Association (SBA) 
fully supported DOE's proposal to streamline the test procedure interim 
waiver process so that small manufacturers have more regulatory 
certainty in the interim waiver process. According to the SBA, the 
delays have a significant impact on small businesses that sell product 
at much lower volumes and that are unable to sell their product for a 
significant amount of time, thus reducing their income flow. Therefore, 
these delays have the potential to put some small manufacturers out of 
business. (SBA, No. 23 at p. 1, 3, 4) It stated that abuse of the 
process is not a concern because the proposal only eliminates a 
bottleneck in the process by requiring DOE to meet the 30-day decision-
making requirement. Even if the interim waiver is granted, the 
application is still required to go through a full review as the 
process remains unchanged. (SBA, No. 23 at p. 4)
    On the other hand, many other commenters' objected to DOE's 
``deemed granted'' approach. For example, Earthjustice argued that the 
proposal would weaken the energy conservation standards program by 
allowing manufacturers to abuse the process by placing noncompliant 
products in the market given the 30-day ``deemed granted'' requirement 
and the grace period after DOE revoked such waivers. This result could 
occur without any notice to either competitors or stakeholders and with 
no opportunity to object. (Earthjustice, No. 49 at p. 1 See also 
Hardin-Levine, No. 2 at p. 1; Stewart, No. 7, at p. 1; Lennox, No. 11 
at p. 1; RBC, No. 12 at 1; Gould, No. 13 at p. 1; Anonymous 1, No. 17 
at p. 1; NPCC, No. 21 at p. 1; WA State Energy Office, No. 22 at p. 1; 
Better Climate Research and Policy Analysis, No. 24 at p. 1; Traulsen, 
No. 25 at pp. 2-3; Sachs,

[[Page 79807]]

No. 29 at p. 2; Consumer Groups, No. 33 at p. 2; DEEP, No. 35 at p. 1; 
Carrier, No. 36 at p. 2; CA IOUs, No. 37 at p. 1; Nortek, No. 38 at p. 
3; Ingersoll Rand, No. 39 at p. 1; CEC, No. 40 at p. 1; AHRI, No. 42 at 
p. 2; ASE. No. 43 at p. 3; A.O. Smith, No. 44 at p. 1-2; NASEO, No. 45 
at p. 1; ASAP et al., No. 46, at pp. 1, 8; NRDC, No. 47, at p. 1-2, 5-
6; Lennox, No. 48 at p. 1, 4; AG Joint Commenters, No. 51 at p. 2, 5; 
and Goodman, No. 54 at p. 1)
    Many commenters, while ultimately objecting to the proposed 
automatic approval as noted in the preceding paragraph, commented that 
DOE should nonetheless be held to a timeline when processing interim 
waiver requests. Various commenters proposed alternative scenarios, 
such as maintaining the status quo, the 30-business day time limit 
proposed by DOE, and increasing the time limit to 120 days, with 
specific milestones along the way. (Franke, No. 8 at p. 1 for 
maintaining 30 days; BSH, No. 41 at 5, for maintaining 30 days, with 
notice and comment if application is deemed granted; Acuity, No. 14 at 
p. 2, for maintaining the 30 days but not more than 90; Lutron, No. 53 
at p. 2, with providing stakeholders a brief opportunity for comment 
during the 30 business day window; FSI, No. 16 at p. 2, for maintaining 
30 days; Anonymous 1, No. 17 at p. 1, if the proposal is finalized, use 
60 to 90 days before granting; NAFEM, No. 26 at p. 2, supporting 30-day 
review process; Traulsen, No. 25 at p. 3, supporting a 60 business day 
review process; Carrier, No. 36 at p. 2, suggesting a review process 
that is not more than 120 days to conduct a review of the interim 
waiver application, public comment period, review of comments received, 
and additional communication with the petitioner; AHRI, No. 42 at pp. 
2-3, supports a maximum of 120 days to review and process an interim 
waiver application; Sachs, No. 29 at p. 2, recommends creating time 
limits for each step of the process; CA IOUs, No. 37 at p. 2-3, 
suggesting a 6-month review process; Nortek, No. 38 at pp. 2-3, 
suggesting a maximum of 120 days; CEC, No. 40 at p. 9-10, suggesting an 
additional step for completion check and comment period and providing 
an automatic grant only if no adverse comments are received; ASE, No. 
43, at p. 4, stating that a comment period is needed; A.O. Smith, No. 
44 at p. 4-5, recommending an alternative process allowing 135 days, 
including stakeholder comment and a full technical review; ASAP et al., 
No. 46 at pp. 7-8, providing for a 90-day review period, including 
notice and comment but not replacing comment period after publication 
of interim waiver; Lennox, No. 48 at pp. 2-3, suggests setting a 
reasonable deadline with an expedited comment period of 30 days; and 
Goodman, No. 54 at pp. 1-2, 4, suggesting 90-day time period with 
opportunity for comment)
    In response to these arguments, DOE's reiterates that these changes 
are being adopted in response to concerns that the current system for 
processing interim waiver petitions is not working as it should. In 
DOE's view, manufacturers should not be constrained from selling their 
products for significant periods of time while DOE undertakes a lengthy 
review of a temporary measure (the interim waiver) or applies its 
limited resources to other priorities, such as rulemakings subject to a 
statutory deadline. DOE also does not believe that manufacturers should 
be limited in their ability to sell their products while DOE works 
extensively, and without the benefit of public comment, to determine 
what the alternate test procedure should be in response to the interim 
waiver request.
    As DOE explained in its modernized Process Rule, DOE should be held 
accountable for complying with its own procedures so that the public 
will have confidence in the transparency, predictability, clarity, and 
fairness of DOE's regulatory process. Procedures for Use in New or 
Revised Energy Conservation Standards and Test Procedures for Consumer 
Products and Commercial/Industrial Equipment (``Process Rule''), 85 FR 
8626, 8632, 8634 (February 14, 2020). Under the procedures adopted in 
this final rule, DOE places the burden of delay on DOE rather than the 
manufacturer. If DOE does not notify the applicant in writing of the 
disposition of the interim waiver within 45 business days, the 
manufacturer would be authorized to test subject products under an 
interim waiver using the alternate test procedure submitted by the 
manufacturer while DOE processes the waiver request, including 
obtaining the benefit of comment from other manufacturers and 
stakeholders.
    In consideration of the comments received suggesting a longer 
review period, however, DOE has determined that a 45 business day 
period will provide the Department with a small amount of additional 
time to review the interim waiver request while still providing 
certainty to the manufacturer that if DOE does not act within the 
prescribed time period, the interim waiver will be granted pursuant to 
DOE's existing regulatory criteria for the grant of interim waiver 
requests at 10 CFR 430.27(e)(2) and 10 CFR 431.401(e)(2).
    Accordingly, after taking all comments into account concerning the 
adequacy of the 30 business day time period for consideration of 
interim waiver petitions, DOE is modifying this requirement to provide 
the Department 45 business days to review completed interim waiver 
petitions based on the criteria in its current regulations, 10 CFR 
430.27(e)(2) or 10 CFR 431.401(e)(2). These are the same criteria that 
have been applied to every interim waiver petition acted upon by DOE 
and are not changed by this final rule. Because an interim waiver is 
meant to be a temporary measure to hold a requester harmless while a 
final decision on a waiver is processed, the criteria for granting an 
interim waiver are straightforward and intended to facilitate a quick 
review process. For example, if DOE has seen a particular technological 
issue in prior waivers that have been granted, it should quickly become 
apparent that it is likely that the petitions for waiver based on the 
same technological issue would be granted. In addition, the criterion 
that it is desirable for public policy reasons to grant ``immediate 
relief pending a determination on the petition for waiver'' in 
particular indicates that DOE's decision for interim waiver is intended 
to be a quick process to grant ``immediate'' relief rather than serve 
as the culmination of DOE's decision-making process on the petition for 
waiver. As a result, it is not intended to encompass a detailed review 
to determine all of the complex particulars of the alternate test 
procedure that may ultimately be granted as part of the decision and 
order on the waiver petition. DOE emphasizes that, as in the current 
regulations, it remains required to affirmatively make a decision as to 
whether to grant or deny the interim waiver petition. If DOE denies the 
interim waiver petition, it is required to notify the petitioner within 
the 45 business day time period and post the notice on the website as 
well as publish its determination in the Federal Register as soon as 
possible after such notification. Moreover, in DOE's past experience, 
the majority of interim waiver petitions were granted.\6\ As a

[[Page 79808]]

result, this final rule also states that if petitioner has not received 
notification of the disposition of the petition for interim waiver 
within 45 business days, the interim waiver petition is granted based 
on the criteria in DOE's regulations at 10 CFR 430.27(e)(2) and 10 CFR 
431.401(e)(2)--specifically, that it is desirable for public policy 
reasons to grant immediate relief pending a determination on the 
petition for waiver or, such as in cases where DOE has granted waivers 
to other manufacturers for the same technology using the same or a 
similar alternate test procedure, that it is likely that the petition 
for waiver will be granted. The manufacturer may test and certify its 
products using the alternative test procedure included in the petition, 
and compliant products may be distributed in commerce. DOE will publish 
the grant or denial of the interim waiver in the Federal Register after 
its determination is made and posted online. 10 CFR 430.27(e)(1)(ii) 
and 10 CFR 431.401(e)(1)(ii).
---------------------------------------------------------------------------

    \6\ Of the 21 concluded interim waiver petitions that DOE had 
granted as of issuance of DOE's NOPR, the Department had granted 18 
in full and granted the remaining 3 with modifications such as one 
was granted in part, one with minor modifications, and one with a 
different test procedure than proposed. 84 FR 18414, 18419 (May 1, 
2019).
---------------------------------------------------------------------------

    In response to comments suggesting that DOE provide for a 
``completeness check'' or ``full technical review'', it is DOE's intent 
to review the interim waiver request within the 45 business day time 
period. DOE notes the new provision in the final rule that for an 
interim waiver to be granted, the petitioner must submit an alternate 
test procedure. DOE reiterates that unless it acts to grant or deny the 
interim waiver within the 45 day period, the interim waiver will be 
granted at the end of the 45 days according to the criteria in DOE's 
regulations at 10 CFR 430.27(e)(2) and 10 CFR 431.401(e)(2), and DOE 
will then publish the grant of interim waiver and alternate procedure 
for public comment. During this time, DOE will conduct any necessary 
technical review, working with the manufacturer as necessary--and with 
the benefit of input from the public, including other manufacturers--to 
ensure that the alternate test procedure ultimately adopted upon the 
grant of any petition for waiver is appropriate. The benefit to the new 
process is that when DOE publishes a decision on the interim waiver and 
request for comment, DOE does not expect to have made significant 
changes to the alternate test procedure submitted with the interim 
waiver. If there are significant ``red flags'', as indicated in NEMA's 
comment, DOE would deny the request for interim waiver and continue to 
process the petition for waiver. As a result, interested stakeholders 
will be able to provide input on the alternate test procedure as it was 
submitted by the petitioner, rather than an alternate test procedure to 
which DOE may have made substantial changes without the benefit of 
public input. DOE intends for the changes finalized in this rule to 
increase transparency and the use of stakeholder input in the waiver 
process. This approach is also intended to facilitate the introduction 
of innovative products to market and ensure that the burden to act 
promptly is on DOE.
    NEMA recommended that the final rule should include a short comment 
period of 10 days to provide stakeholders the opportunity to raise red 
flags if necessary before DOE finalized a petition for interim waiver 
and DOE agrees the process needs greater transparency. (NEMA, No. 55 at 
p. 4) Current regulations lack the transparency to provide 
manufacturers and concerned stakeholders notice of DOE activities when 
making changes to waivers petitions submitted by a manufacturer and an 
opportunity to engage in the process. This final rule seeks to increase 
transparency and provide a means of including stakeholder input in the 
Department's review process. The final rule provides that members of 
the public will receive notice of interim waiver petitions through 
posting on the DOE website and publication of its decision in the 
Federal Register, 10 CFR 430.27(e)(1) and 10 CFR 431.401(e)(1). 
Stakeholders and other manufacturers will be made aware of the 
Department's ongoing review and decision through these amendments to 
the existing regulation and can raise concerns during the processing of 
the interim waiver.
    DOE believes that this final rule directly addresses the concern 
expressed by commenters that the ``deemed granted'' language included 
in the proposal would result in situations where DOE did not exercise 
its statutory responsibility to apply the regulatory requirements to 
all interim waiver petitions in an affirmative manner. (CA IOUs, No. 37 
at p. 7) Some commenters argued that DOE's proposed approach results in 
an abdication of the Department's decision-making authority and does 
not meet DOE's obligation to consumers nor does it promote a fair and 
level playing field among manufacturers. (A.O. Smith, No. 44 at p. 1-3, 
concerned that the automatic granting of an interim waiver is an 
abdication of responsibility; NRDC, No. 47 at p. 2-3, the Department 
must affirmatively review the request and decide that it is technically 
and procedurally appropriate to grant the interim waiver; Lennox, No. 
48 at p. 4, pp. 5-6; and AG Joint Commenters, No. 51 at p. 5, EPCA 
requires that DOE must make an affirmative determination)
    In response, DOE maintains that the language included in this final 
rule continues to require that DOE engage in a decision-making process 
for each interim waiver petition and provide notice of that decision to 
petitioners and the public. DOE will continue to fulfill its statutory 
obligations with respect to all waiver petitions it receives. Interim 
waivers to which DOE does not respond within the 45 business day period 
are granted pursuant to the criteria in DOE regulations at 10 CFR 
430.27(e)(2) and 10 CFR 431.401(e)(2)--specifically, that it is within 
the public interest to grant immediate relief pending a determination 
on the petition for waiver. The grant of an interim waiver ensures that 
the manufacturer subject to the interim waiver (and to any subsequent 
waiver) is testing and certifying its products pursuant to a DOE test 
procedure, as required by EPCA. DOE will then continue to review the 
petition for waiver and issue a decision and order on that petition 
after any further technical review and consideration of public input. 
By finalizing this rulemaking, DOE does not cede its authority to 
review interim waiver petitions or otherwise abdicate its decision-
making responsibilities with regard to requests for waiver from the 
test procedure set forth in DOE's regulations.
    In addition, as a result of the ``deemed granted'' language, 
commenters proposed revised notice and comment scenarios for 
consideration as part of the interim waiver process. Those commenters 
asserted that the proposal fails to require notice of a waiver be given 
to consumers and competitors, that consumers will lack the information 
needed to make informed decisions about appliances, and that the 
Department should provide prompt notice of approved petitions. 
(Anonymous 1, No. 17 at p. 1; Consumer Groups, No. 33 at p. 3; and 
DEEP, No. 35 at p. 2) Supporting the proposal, BSH recommended adding 
in the final rule a provision regarding interim test procedure waivers 
deemed granted by the passage of time that the Department shall publish 
the waiver in the Federal Register immediately to ensure adequate 
notice to the public is provided. (No. 41 at p. 4) Additionally, 
Goodman notes that the existing process under 10 CFR 430.27(c)(1), 
which requires that notification of an interim test procedure waiver is 
only given to competitors in the same product class and after 
publication in the Federal Register, should be expanded. This commenter 
suggests that other manufacturers of the same product class

[[Page 79809]]

should also receive notification and an opportunity to comment. Such 
action would provide manufacturers of a given product class greater 
certainty of notice and opportunity to respond before a product is 
introduced into commerce. (Goodman, No. 54 at p. 2-4).
    In response to these comments, DOE agrees that public input is 
critical to DOE's consideration of petitions for waiver of the DOE test 
procedure. DOE values input from stakeholders because such comments 
contribute to a better work product and help to resolve complicated 
technical issues. In this final rule, DOE has provided that all 
determinations made in response to interim waiver petitions will be 
published in the Federal Register after such decisions are made, taking 
into account the 45 business day deadline. In addition, to promote 
transparency, the regulations will require DOE to continue its current 
practice of posting waiver petitions online when they are received, so 
that the public and other manufacturers are aware that a petition for 
waiver and interim waiver has been submitted. The regulations also add 
a requirement for DOE to post decisions on interim waivers when those 
decisions are made. Posting of both receipt of a petition for interim 
waiver and DOE's decision on an interim waiver will be made within 5 
business days. 10 CFR 430.27(e)(1)(ii) and 10 CFR 431.401(e)(1)(ii).
    DOE emphasizes that under the current regulatory requirements, the 
stakeholder comment period is triggered by DOE's granting of an interim 
waiver. 10 CFR 430.27(c) and (d) and 10 CFR 431.401(c) and (d). This 
final rule does not change those requirements. Accordingly, DOE is not 
taking away any previous opportunity stakeholders had for comment prior 
to the grant of an interim waiver. To the contrary, DOE is facilitating 
additional transparency through issuance of this final rule. 
Previously, DOE in many cases conducted significant discussions with 
the manufacturer and made changes to the alternate test procedure 
submitted by the manufacturer without the benefit of input from the 
public, including other manufacturers and stakeholders in the process, 
as well as any other interested parties. Under this final rule, all of 
these interested groups will be afforded input at the very beginning of 
DOE's process of considering an alternate test procedure.
    This rule is intended to expedite the review process and increase 
the transparency of the Department's review of interim test procedure 
waivers. Under the amended requirements of this final rule, 
stakeholders will have the opportunity for comment on the waiver 
process as under the current regulations, with the added benefit of 
earlier engagement with the Department as it considers an alternate 
test procedure. DOE will leave in place its current comment procedure, 
seeking comment upon the grant or denial of any interim waiver request. 
DOE will continue to invite a robust discussion of technical and other 
issues during that comment period.
    Some commenters questioned whether the Department can meet the 
proposed ``deemed granted'' 30 business day deadline given that DOE's 
data indicate that it has only met the 30-day deadline on one occasion. 
(NPCC, No. 21 at p. 2) Comments submitted by NRDC note that such a 
timeframe is unwarranted given that the Department has failed to 
respond to interim waiver requests in that timeline in the past. 
Further, commenters contend that it is unlikely DOE will meet this 
deadline because the NOPR does not include a rational explanation for 
meeting the proposed 30 business day time period. (NRDC, No. 47 at p. 
4-5).
    Upon further review of the proposed timeframe, DOE has decided to 
extend the internal review period from the 30 business days referenced 
in the NOPR to 45 business days in this final rule. DOE notes that its 
dataset includes an additional three interim waivers were granted 
during this 45-business day timeframe as opposed to the 30-business day 
timeline, further supporting that DOE is able to consider interim 
waivers during the 45-business day time period adopted in this final 
rule. As with the modernized Process Rule referred to above, DOE views 
its examination of the interim test procedure waiver process as an 
opportunity to improve how the Department administers its programs. As 
was mentioned earlier in this document, much of DOE's delay in 
responding to a request for an interim waiver involved lengthy, private 
technical discussions with the requester attempting to re-design an 
alternate test procedure before seeking public input. Under this final 
rule, DOE will ensure that it acts expeditiously on requests for 
interim waiver and that any in-depth technical review will take place 
with the benefit of public comment, during DOE's decision-making 
process on the petition for waiver. This final rule will increase the 
transparency of the process and ensure that the manufacturer can 
distribute its products in commerce under an interim waiver while DOE 
processes the waiver request.
    Many commenters expressed their concern that if DOE codified its 
original proposal, the system for interim waivers would 
institutionalize a process that would allow for abuse. Commenters who 
took this position believe that the ``deemed granted'' language would 
allow manufacturers with ill-intent to abuse the process by submitting 
waiver applications with faulty alternate test procedures or perhaps no 
alternate test procedures at all and nevertheless have their interim 
waivers granted within the proposed 30-business day period. These 
commenters stated that manufacturers who play by the rules and are 
producing compliant products or equipment would be harmed. In addition, 
they argued that foreign importers would receive a competitive 
advantage to the detriment of American manufacturers. (Hardin-Levine, 
No. 2 at p. 1; Stewart, No. 7 at p. 1; Franke, No. 8 at p. 1; Gould, 
No. 13 at p. 1; Anonymous 1, No. 17 at p. 1-2; NPCC, No. 21 at pp. 1-2; 
Traulsen No. 25, at p. 3; Sachs, No. 29 at p. 2; Consumer Groups, No. 
33 at p. 2; Carrier, No. 36 at p. 2; CA IOUs, No. 37 at pp. 1-2; 
Nortek, No. 38 at p. 3; CEC, No. 40 at p. 4; AHRI, No. 42 at p. 2; ASE 
No. 43 at p. 3; A.O. Smith, No. 44 at pp. 1-3, 5; NASEO, No. 45 at p. 
1; ASAP et al., No. 46 at pg. 3, 5; Lennox, No. 48 at pp. 3-4; 
Earthjustice, No. 49 at p. 1, 4; and AG Joint Commenters, No. 51 at p. 
2, 8). Commenters voiced their concerns that the proposal ``[c]ould 
open the floodgates for a deluge of substandard foreign products to 
enter U.S. markets to the detriment of U.S. manufacturers,'' therefore 
DOE should not finalize a ``deemed granted'' interim waiver approach if 
the Department does not act in 30 days. (Lennox, No. 48 at p. 3-4)
    Other commenters did not believe that the proposed process would 
allow for abuse. Acuity disagreed with these arguments and counted that 
through stakeholder engagement conducted throughout the test procedure 
rulemaking process that interim waivers are likely to be used 
infrequently and will not become a general opt out mechanism. (No. 14 
at p. 3) Some commenters argued against these concerns by highlighting 
that there is language in the proposal that protects against an abuse 
of the process and that there are penalties if a manufacturer breaks 
the law also in place. (FSI, No. 16 at p. 2) The SBA also commented 
that the concern regarding possible abuse of the process was unfounded 
because the proposal only eliminated a bottleneck in the review process 
by requiring DOE to meet a time limit and even if an interim waiver is 
automatically granted that the application for the full waiver will 
still undergo a review by the Department.

[[Page 79810]]

(No. 23 at p. 4) Lastly, some commenters noted that even if abuse were 
to happen, DOE's regulation already includes a remedy and nothing in 
the proposal removes this authority. Commenters cited 10 CFR 430.27(k), 
which provides DOE the authority to rescind or modify a waiver or 
interim waiver at any time if DOE determines that the underlying 
factual basis is incorrect or determines that the results from an 
alternative test procedure are unrepresentative of the true energy 
consumption. (Joint Industry Commenters, No. 52, at p. 5)
    DOE emphasizes that if DOE has not notified the petitioner of the 
disposition of an interim waiver within the 45 business day period, 
that interim waiver is granted according to the existing criteria in 10 
CFR 430.27(e)(2) and 10 CFR 431.401(e)(2)--specifically, that it is 
desirable for public policy reasons to grant immediate relief pending a 
determination on the petition for waiver or, such as in cases where DOE 
has granted waivers to other manufacturers for the same technology 
using the same or a similar alternate test procedure, that it is likely 
that the petition for waiver will be granted. DOE therefore no longer 
uses the term ``deemed granted'' in this rulemaking. DOE again notes a 
change to its regulatory text in response to these comments--
specifically, if no alternate test procedure is submitted, DOE will not 
grant an interim waiver but will publish the denial of interim waiver 
and request for comment on the petition for public comment, so that it 
can process the waiver petition with the benefit of public comment on 
what the alternate test procedure should be.
    DOE is not persuaded by commenters' concern regarding the 
likelihood of abuse of process by U.S. and foreign manufacturers. DOE 
finds the fear of speculative abuse unlikely as there is no evidence of 
such abuse and little reason to expect that the proposal would open the 
door to abuse by manufactures. (Joint Industry Commenters, No. 52 at p. 
4) In DOE's experience over many years, the Department has not seen the 
waiver process abused as some commenters suggest. DOE believes that it 
is highly unlikely that a manufacturer would spend the time, effort, 
and funds to submit a faulty application on the hope that it might slip 
through and the risk that the requester might be alerting DOE to non-
compliant products. As many commenters pointed out, manufacturers are 
incentivized to get their interim test procedure waivers right the 
first time. Commenters identified the following reasons as 
justification for why it is in the best interest of petitioners to 
ensure that the alternate test procedure is correct the first time 
around are as follows: Brand reputation, competitors will highlight any 
unfair procedures engaged in by others, the creation of significant 
marketing costs, and the fact that there are significant costs to 
conducting test procedures so manufacturers prefer not to retest if it 
can be avoided. (BSH, No. 41 at p. 4; and NEMA, No. 55 at p. 6) 
Commenters' concern overlooks the reality that DOE continues to review 
interim waiver petitions and waiver petitions and would find these 
abuses if they did exist.
    Moreover, several commenters stated, and common sense suggests, 
that it is highly unlikely that stakeholders want to attract negative 
attention and incur the risk of DOE enforcement. While it is always 
possible that some stakeholder on some occasion will attempt to abuse 
any process, DOE believes this is a rare situation, if it were to 
happen at all. DOE agrees with the Joint Industry Commenters who 
reasonably point out that it would be ``odd that a manufacturer intent 
on abusing the system would notify DOE and the public by petitioning 
for a test procedure waiver'' using a faulty or fraudulent test 
procedure. (No. 52 at p. 4) Similarly, Lutron noted that the Department 
should not let the ``fear of a bad actor'' prevent this regulatory 
process from working for everyone else. (No. 53 at p. 3)
    The Department does not base its decision-making process upon 
speculative behavior of alleged manufacturers who might act in bad 
faith. Further, DOE believes that if a manufacturer engaged in this 
behavior, it would likely be (as noted by commenters) detrimental to 
the reputation of the manufacturer. In addition, DOE's existing 
regulations already provide a remedy for abuse of the test procedure 
interim waiver and waiver process. 10 CFR 430.27(k) provides DOE with 
the authority to ``rescind or modify a waiver or interim waiver at any 
time upon DOE's determination that the factual basis underlying the 
petition for waiver or interim waiver incorrect, or upon a 
determination that the results from an alternative test procedure are 
unrepresentative of the basic model(s) true energy consumption 
characteristics.'' Nothing in this final rule removes this authority 
from the Department.
    In their challenge to the NOPR as allowing for the sale of non-
compliant products to enter the market, ASAP et al. remarked that 
incomplete interim waivers petitions would be ``deemed granted'' after 
30 days. A manufacturer could circumvent the energy conservation 
standard by submitting a petition lacking an alternative test 
procedure, they argued, and therefore be able to sell a product without 
conducting any testing. (ASAP. et al., No. 46 at p. 3) Other commenters 
also expressed their concern about what DOE would do when an 
alternative test procedure is not included in the submission. (Lennox, 
No. 48 at pp. 4-5) Commenters suggested that DOE should reject all 
incomplete interim waiver and waiver applications, including those 
without a valid test method included, so that applicants can then 
revise and resubmit the petition. (A.O. Smith, No. 44 at p. 3)
    In response to these questions concerning an interim test procedure 
petition submitted without the required alternate test procedure, DOE 
wants to make very clear that, in reality, this scenario does not 
happen. That is, petitions for interim waiver and waiver submitted to 
the Department do include an alternative test procedure. However, in 
the exceedingly rare case that a requestor may not include an alternate 
test procedure, DOE has added language to the regulatory text stating 
that, if a petition is submitted without an alternative test procedure, 
DOE will deny the petition for an interim waiver and move to 
consideration of the waiver request. Commenters agree that 
manufacturers must have a viable way to test a covered product in the 
situation where the current DOE test procedure is inadequate to 
properly test specific basic models with specific design 
characteristics. Because the denial of interim waiver is published for 
public comment, the alternate test procedure ultimately developed as 
part of any grant of a waiver petition will benefit from input from 
other manufacturers, stakeholders, and interested parties.
    DOE received comments arguing that DOE had not taken the impact on 
consumers from this proposal into consideration. Commenters asserted 
that the Department's ``deemed granted'' approach would allow 
noncompliant products into the marketplace for an indefinite period of 
time thereby harming consumers who would unknowingly purchase a product 
that does not meet DOE energy conservation standards, thereby resulting 
in higher energy costs to consumers. (Stewart, No. 7 at p. 1; Anonymous 
1, No. 17 at p. 1-2; NPCC, No. 21 at p. 2; WA State Energy Office, No. 
22 at p. 1; Better Research Climate and Policy Analysis, No. 24 at pp. 
1-2; Consumer Groups, No. 33 at p. 2-3; CA IOUs, No. 37 at p. 1; 
Ingersoll Rand, No. 39 at p. 2; CEC, No. 40 at p. 4-6, 8; ASE, No. 43 
at pp. 2-3; A.O. Smith, No. 44 at p. 1, pp. 2-

[[Page 79811]]

3; NASEO, No. 45 at p. 1; ASAP et al., No. 46 at pg. 3, 5; Lennox, No. 
48 at pp. 3-4; Earthjustice, No. 49 at pp. 1-2; AG Joint Commenters, 
No. 51 at p. 2, 8; and Goodman, No. 54 at p. 2)
    This final rule requires DOE to make decisions on all interim 
waiver requests within 45 business days. Because DOE publishes the 
decision on the interim waiver (and, at the same time seeks comment on 
the waiver petition), during or as soon as possible after the 
conclusion of this time period, consumers will be situated in a better 
position under this final rule than under DOE's previous procedures. 
The alternate test procedure will be published for comment as part of 
the grant or denial of any interim waiver, and consumers will benefit 
from being able to see comments provided on the alternate test 
procedure, including those from other manufacturers, which will be 
publicly available on http://www.regulations.gov. Moreover, as stated 
previously, DOE reaffirms that it is extremely doubtful that a 
manufacturer would go to the time and expense of submitting a 
fraudulent waiver petition in the hope of getting a small period of 
time to sell noncompliant products that would cause adverse impacts to 
consumers. Instead, DOE maintains that consumers will likely benefit 
from this rulemaking as innovative products will be made available more 
quickly and expand consumer choice when selecting a product to best 
meets consumers' needs.
    In challenging the validity of the NOPR, several commenters argued 
that DOE lacks the statutory authority to create and amend the waiver 
process. Earthjustice argued specifically that EPCA does not explicitly 
authorize a waiver process pursuant to which manufacturers can avoid 
applying DOE's test procedures to their products, but provides only an 
authorization to DOE to amend a test procedure in response to petitions 
submitted by interested persons, under 42 U.S.C. 6293(b)(2). (No. 49 at 
p. 2) These commenters argue the NOPR has violated the APA's 
requirement to reference the legal authority under which a rule is 
proposed. (Earthjustice, No. 49, at p. 2 citing 5 U.S.C. 553(b)(2); see 
also AG Joint Commenters, No. 51 at p. 4-5; and Lennox, No. 48 at p. 5) 
Stakeholders also commented that it is DOE's responsibility to provide 
a path to compliance for all manufacturers that sell covered product 
because they are legally subject to DOE standards regulation. (Joint 
Industry Commenters, No. 52 at p. 1).
    Section 393 of EPCA (42 U.S.C. 6293) provides the Department with 
the authority to adopt new test procedures and to amend existing test 
procedures for covered products when such test procedures would more 
accurately or fully comply with the requirement that the test procedure 
be reasonably designed to produce results that measure energy 
efficiency, energy use, water use, or estimated annual operating costs 
of a representative average use cycle or period of use. DOE first 
adopted regulations implementing waiver procedures in 1980, and has 
updated the regulations three times in 1986, 1995, and most recently in 
2014 with no concerns raised. 45 FR 64109 (September 26, 1980); 51 FR 
42823 (November 26, 1986); 60 FR 15004 (March 21, 1995); and 79 FR 
26591 (May 9, 2014). DOE emphasizes that the alternate test procedure 
specified in a waiver or interim waiver is a DOE test procedure, 
adopted by the Department. Manufacturers are authorized to use this 
alternate DOE test procedure through the decision and order issued by 
DOE upon consideration of the waiver petition. DOE further notes that 
alternate test procedures authorized through DOE decision and orders 
are used by DOE in developing appropriate test procedure amendments 
pursuant to 42 U.S.C. 6293. As the Department has done for decades 
under the existing ``waiver'' rules, the Department is simply issuing a 
test procedure under EPCA applicable to certain technologies not 
considered in the existing codified test procedure.
    The waiver process, both interim and final, is the process codified 
in DOE's regulations by which DOE addresses new and emerging 
technologies as they come on the market between test procedure 
rulemakings. Without it, affected manufacturers would be excluded from 
the market and would have no recourse until DOE engages in future 
rulemaking. DOE does not read EPCA to prohibit manufacturers with new 
and innovative products from being able to test and certify their 
products for consumer use until DOE were to engage in a future 
rulemaking. DOE also does not believe that stakeholders are advocating 
for the elimination of the waiver process. There was overwhelming 
support for having such a process in place for those instances when 
products fall outside the scope of the applicable, codified test 
procedure requirements. Manufacturers, interested stakeholders, and 
consumers rely on DOE's ability to consider amendments to the test 
procedure to more fully or accurately comply with EPCA's requirement to 
measure the energy use of a representative average use cycle or period 
of use that authorizes the waiver process so that potential amendments 
to the test procedure can be considered in fact-specific circumstances. 
To read EPCA otherwise would likely place a barrier on the availability 
of future innovative and potentially energy conserving products.
    Several commenters argued that the economic analysis included in 
the NOPR is based on faulty assumptions and that many of those 
assumptions assessing the impact of the NOPR resulted in a significant 
overestimation of the costs of the interim waiver process on 
manufacturers. (Better Climate Research and Policy Analysis, No. 24 at 
pp. 1-2; CEC, No. 40 at pp. 7-9; ASE, No. 43 at pp 4-5; ASAP et al., 
No. 46 at p. 6-7; NRDC, No. 47 at p. 5; and Goodman, No. 54 at p. 5) 
Some commenters stated that DOE severely underestimated the costs of 
allowing non-compliant products onto the marketplace through the 
proposed ``deemed granted'' approach. The CA IOUs argued that many of 
these assumptions used to assess the impact of the NOPR resulted in a 
significant overestimation of the monetary impacts facing 
manufacturers, while understating impacts to customers, competitors and 
the environment, including the potential abuse from allowing the 
introduction of noncompliant and less efficient product into the market 
for a period of time. These and other commenters seek additional 
information from DOE on the economic and environmental costs and 
benefits of the proposed rule and a full assessment of negative impacts 
of the rulemaking. (CA IOU's, No. 37 at pp. 3-7; and AG Joint 
Commenters, No. 51 at p. 8).
    On the other hand, NAFEM commented that the proposal correctly 
identifies many of the real costs and impacts to companies from the 
current process that unreasonably delays decisions on interim waiver 
requests. The current process prohibits companies from bringing 
valuable products to the marketplace while waiver requests are reviewed 
and interim waiver decisions are delayed. Commenters assert that such 
delays are unreasonable, given the specificity of the regulatory 
requirements for grant of an interim waiver, and supported the changes 
proposed in the NOPR. (NAFEM, No. 26 at p. 3).
    As discussed in section III of the NOPR, DOE reviewed the time lags 
between the receipt of the waiver application and issuance of an 
interim waiver, and considered the anticipated cost savings that could 
result from waivers granted following the proposal's

[[Page 79812]]

deemed granted approach. DOE relied on the 40 waiver applications 
submitted between 2016 and 2018, 33 \7\ of which included interim 
waiver requests, to note that only one interim waiver request was 
granted within 30 business days of receipt of the application and one-
fifth of the requests were resolved in under 100 days. On average, the 
Department determined, interim waiver requests received in 2016 took 
162 days to resolve, those received in 2017 took 202 days, and those 
received in 2018 took 208 days. DOE's data illustrated that there was a 
need for issuance of a timely interim waiver while the full waiver was 
under review because the primary anticipated cost savings considered 
resulted by reducing the number of days by which a manufacturers 
revenues were delayed. 84 FR 18414, 18416-18417, 18418 (May 1, 2019). 
Setting mandatory timelines within the Department's review process will 
help prevent the financial impacts manufacturers currently experience 
as a result of delays in the processing of interim waiver requests.
---------------------------------------------------------------------------

    \7\ Of these, two waivers were withdrawn and one waiver was 
delayed pending ongoing litigation. 84 FR 18414, 18416 (May 1, 
2019).
---------------------------------------------------------------------------

    In response to these concerns about the economic analysis 
conducted, DOE does not believe that the rule will allow noncompliant 
products onto the market for an indefinite period of time. To the 
contrary, the regulations allow manufacturers to test their product 
according to a DOE test procedure under an interim waiver while DOE 
considers public comment and other information in determining whether 
changes are warranted to the test procedure ultimately specified in the 
decision and order on the waiver petition. At all times, manufacturers 
will test and certify according to a DOE test procedure and will 
distribute in commerce only products that are compliant with the DOE 
standard.
    Several commenters objected to DOE's proposal as unnecessary given 
that DOE already has an enforcement policy that addresses the 
underlying basis of the rule, that manufacturers with innovative 
products that cannot be tested under existing DOE test procedures will 
be harmed because delays in processing interim waivers prevent them 
from selling their product. These commenters point out that the current 
DOE enforcement policy addresses this issue. (ASAP et al., No. 46 at p. 
5; Lennox, No. 48 at p. 10; and Earthjustice, No. 49 at p. 5-6) These 
commenters argue that under DOE's enforcement policy, as long as a 
petition for waiver has been filed, such products can be sold without 
fear of enforcement action. Accordingly, they state that because of the 
enforcement policy there is no reason that the existing interim waiver 
process should result in any delays concerning the introduction of 
innovative products. Hence, the NOPR cannot result in cost savings 
based on such delays and is therefore is unnecessary. (ASAP et al., No. 
46 at p. 6; and A.O. Smith, No. 44 at p. 4) Some commenters noted that 
the Department's existing policy should remain the mechanism for 
dealing with the market introduction of truly innovative and ``first of 
its kind'' products while test procedure waiver applications are 
pending. (A.O. Smith, No. 44 at p. 4) Additionally, other commenters 
argued that DOE has failed to explain why its proposal is necessary 
given this non-enforcement policy. (AG Joint Commenters, No. 51 at p. 
7) One commenter called the proposal a practical status quo that is 
consistent with the Department's 2010 enforcement policy.
    NEMA supported the proposal because interim waivers provide a 
necessary pathway for manufactures to introduce innovative products 
into the market that would otherwise be barred as being noncompliant. 
NEMA continued that the Department's policy, in which DOE will not seek 
civil penalties for noncompliant products that have test procedure 
waiver application under review, reflects the realization that because 
waiver petitions require dedicated resources and significant time to 
evaluate that manufactures can be unfairly excluded from the market 
during delays. (No. 55 at pp. 3-4)
    In response to commenters opposed to the proposed rule because they 
believe it would allow non-compliant products on the market, DOE views 
the non-enforcement policy as creating the same extremely low risk. As 
a practical matter, based on its experience, DOE believes that the 
enforcement policy alone is insufficient to address manufacturer 
concerns with the ability to sell products that they cannot test and 
certify pursuant to a DOE test procedure. Manufacturers argued that 
their business is protected from the possibility of an adverse DOE 
action only if DOE has granted either an interim waiver or final waiver 
under which they can operate. As ASE pointed out, the interim waiver 
process is worthy of revision to provide manufacturers with greater 
predictability and improve transparency so that the public can have 
confidence in the energy efficiency of a given product. Further, due to 
the long delays in making a decision on an interim waiver and 
publishing for comment a petition for waiver, the current practice of 
non-enforcement pending a decision from the Department allows 
manufacturers an extended period to sell into the market without 
competitors, consumers, or other interested stakeholders being made 
aware of a pending waiver decision. (ASE, No. 43 at pp. 2-3) DOE 
stating a position that it will not take enforcement action while a 
waiver request is pending also does nothing to provide the manufacturer 
with a means to test a product to show compliance. A non-enforcement 
policy is of little value if the product cannot be sold due to a 
manufacturer's inability to demonstrate to its customer that the 
product is legally compliant with the applicable energy conservation 
standard. A more efficient interim waiver process, as set forth in this 
final rule, is the best means of providing a clear, transparent path 
for a manufacturer to achieve compliance while their final waiver is 
under review or while DOE completes a rulemaking for a new or amended 
test procedure to address the issues raised in the waiver.
    The NOPR included a provision providing that if DOE ultimately 
denies a petition for waiver or grants the petition with a different 
alternate test procedure than specified in the interim waiver, DOE 
would provide a grace period of 180-days for the manufacturer to use 
the test procedure specified in the DOE Decision and Order to make 
representations of energy efficiency. 84 FR 18414, 18416 (May 1, 2019). 
Comments identified several viewpoints on the Department's proposed 
revision. Some commenters voiced their support for the addition of the 
180 day grace period. (AHRI, No. 42 p. 4; and Joint Industry 
Commenters, No. 52 at p. 5) Some commenters noted that the grace period 
provides manufacturers certainty and permits time to retest and 
recertify equipment accordingly, and recommended that this timeline 
should be discretionary as well. (NEMA, No. 55 at pg. 6; and Nortek, 
No. 38 at p. 2) Commenters also noted that without the inclusion of a 
grace period manufacturers would be less likely to use the waiver 
process, which would ultimately result in less innovative products 
being introduced to the market. (Lutron, No. 53 at p. 3).
    Other commenters argued that the NOPR's proposed grace period was 
too long and should be reduced, from 30-60 days or capped at 60 days. 
(Anonymous 1, No. 17 at p. 1; and Carrier, No. 36, at p. 3) Reducing 
the compliance period to 60 days would limit the time a noncompliant 
product would be on the market. Some

[[Page 79813]]

commenters believed that manufacturers who are granted waivers with a 
modified test procedure should receive less than 180 days, based upon 
the magnitude of changes between the prescribed test procedure and the 
one originally proposed by the manufacturer, to comply with the order. 
Alternatively, one commenter suggested that the final rule should 
include a longer grace period because product design changes and supply 
chain re-certifications needed to meet regulatory approvals are a 
complicated and lengthy process, but did not specify a specific 
alternative duration. (ITI, No. 20 at p. 1-2).
    Still other commenters objected to the 180-day grace period and 
want it removed from the final rule. Generally, such commenters believe 
that manufacturers who are denied a waiver should be compelled to start 
testing immediately so they cannot sell non-compliant products for an 
extended period of time. (Sachs, No. 29 at p. 2; CA IOUs, No. 37 at p. 
3; CEC, No. 40. at pp. 4-5; and ASE, No. 43, at p. 4) Commenters 
suggested that in the event information submitted by an applicant was 
grossly or intentionally inaccurate, unrepresentative or misleading, 
the grace period should be eliminated. (Lennox, No. 48 at pp. 8-9) 
Others argued that if DOE grants a waiver based on an alternate test 
procedure that DOE modified from the one proposed by the manufacturer, 
the existing regulations at 10 CFR 430.27(i) already provide a 
sufficient grace period, relieving a manufacturer of the burden of re-
testing and re-rating when an alternate test procedure is directed by 
DOE in the final waiver. (CEC, No. 40 at p. 5).
    As DOE explained in the NOPR, the grace period offers manufacturers 
a safe harbor in the event that a waiver is denied or revisions to an 
interim waiver are required. The Department recognizes that 
manufacturers need time to comply with a new test procedure. The 180 
day duration was proposed because that time frame is consistent with 
the EPCA provision that provides manufacturers 180 days from issuance 
of a new or amended test procedure to begin using that test procedure 
for representation of energy efficiency. 84 FR 18414, 18416 (May 1, 
2019); See 42 U.S.C. 6293(c)(2). The Department understands that less 
than 180 days may be needed if any changes to the alternate test 
procedure specified in an interim waiver are minor and emphasizes that 
nothing in DOE's waiver regulations prohibits a manufacturer from 
commencing use of the new alternate test procedure in less than 180 
days. In the event that information submitted by the applicant was 
inaccurate or unrepresentative, DOE retains the ability under its 
regulations to rescind or modify a waiver at any time. After 
considering all of the many viewpoints on the 180 day grace period 
provision, the Department has decided that it is necessary to provide 
manufacturers time to comply before enforcement measures can be 
initiated. Because the waiver process concerns the issuance or 
amendment of a test procedure in light of the specific circumstances 
that gave rise to the need for a waiver, the waiver process is no 
different than the rulemaking process for the issuance or amendment of 
a test procedure. As a result, DOE maintains the 180 day grace period 
consistent with the time period provided in 42 U.S.C. 6293(c) and 42 
U.S.C. 6314(d) in this final rule.
    Additionally, in response to the comment indicating that the 
existing regulation already includes a grace period in 10 CFR 430.27(i) 
and 10 CFR 431.401(i) that makes the 2019 NOPR's inclusion of an grace 
period in the initially proposed 10 CFR 430.27(e)(1)(iii) and 10 CFR 
431.401(e)(1)(iii) duplicative, DOE has relocated the 180-day grace 
period to 10 CFR 430.27(i)(1) and 10 CFR 431.401(i)(1) in this final 
rule.
    Some commenters stated that finalizing this proposal could 
indirectly allow for backsliding of energy conservation standards. 
These commenters argued that if changes to the test procedure would 
impact measured efficiency, the efficiency standard must then be 
amended so that products minimally compliant under the original 
procedure will remain compliant under the new procedure. (NRDC, No. 47 
at p. 3-4 referencing 42 U.S.C. 323(e)) Commenters continued by stating 
that if DOE amends a test procedure and that test procedure changes the 
measured efficiency such that the efficiency standard must be amended, 
DOE cannot pick a new efficiency threshold that is lower than the old 
efficiency standard. This proposal enables DOE to indirectly do what 
EPCA clearly forbids under its anti-backsliding provision, 42 U.S.C. 
6295(o)(1). (NRDC, No. 47 at p. 4) Similarly, other commenters argued 
that the proposal amounted to a ``more tailored approach'' to rolling 
back test procedures and efficiency standards, which lead to the same 
loss of efficiency EPCA's anti-backsliding provision was intended to 
prevent. (AG Joint Commenters, No. 51 at p. 9).
    In response to these concerns, DOE notes that the commenters' 
concern appears equally applicable to a grant of interim waiver or 
waiver pursuant to DOE's waiver regulations generally, irrespective of 
this final rule. DOE maintains that the issuance of a waiver or interim 
waiver pursuant to DOE's waiver regulations, including the amendments 
in this final rule, will not violate EPCA's prohibition against 
backsliding at 42 U.S.C. 6295(o)(1). As explained above, a test 
procedure waiver (decision and order) and interim waiver are a test 
procedure prescribed by the Department. Under 42 U.S.C. 6293 and 42 
U.S.C. 6314, EPCA sets forth the criteria and procedures that DOE is 
required to follow when prescribing or amending test procedures. This 
final rule does not roll back energy conservation standards. This final 
rule provides clear direction on how manufacturers can test their 
product to determine compliance with energy conservation standards when 
they have manufactured a new and innovative product that cannot 
adequately be tested for compliance with the existing standard using 
the existing test procedure.
    DOE also received comments challenging the Department's position in 
the NOPR, at Footnote 5, stating that granting an interim waiver 
application is not a final agency action as contemplated by the APA, 
which defines an ``agency action'' as including ``the whole or a part 
of an agency rule, order, license, sanction, relief, or the equivalent 
or denial thereof, or failure to act.'' 84 FR 18414, 18416 (May 1, 
2019) referencing 5 U.S.C. 551(13). Commenters argued that the ``deemed 
granted'' interim waiver would constitute final agency action and that 
the Department's position overlooks the reality that an interim waiver 
application is a separate process that is distinct from the request for 
a decision and order granting a test procedure waiver. Commenters 
continued by stating that the finality of the interim waiver ensures 
that DOE cannot withhold judicial review indefinitely through prolonged 
inaction while an interim waiver is in effect; the separate process of 
issuing an interim waiver from the test procedure makes it a final 
decision. (Earthjustice, No. 49 at p. 7-8) Commenters continued that 
the finality of the interim waiver ensures that DOE cannot withhold 
judicial review indefinitely through prolonged inaction while an 
interim waiver is in effect and to find otherwise would lead to an 
absurd result. (AG Joint Commenters, No. 51 at p. 9).
    While DOE recognizes that courts are responsible for determining 
whether judicial review is available under the APA for a particular 
agency action, DOE reiterates that interim waivers do not

[[Page 79814]]

represent the consummation of the Department's decision-making process. 
As noted in the NOPR, the Supreme Court has explained to be ``final,'' 
an agency action must ``mark the consummation of the agency's decision-
making process, and must either determine rights or obligations or 
occasion legal consequences.'' Alaska Dep't of Envtl. Conservation v. 
EPA, 540 U.S. 461, 482 (2004) (quotation omitted); see Bennett v. 
Spear, 520 U.S. 154, 178 (1997). While manufacturers would be able to 
test and distribute their products or equipment in commerce if granted 
an interim waiver under the proposal, continued distribution is 
dependent upon DOE's decision on the petition for waiver. DOE 
regulations contemplate further process on the waiver request after 
issuance of an interim waiver decision, including publication of the 
interim waiver for comment, further indication that DOE's decision-
making process on the waiver is not complete. DOE will consider any 
comments received, as well as any additional information provided by 
the petitioner or developed by the Department, in issuing a final 
decision on the associated petition for waiver, or a final rule 
amending the test procedure. Either of these actions could have rights 
or obligations, or consequences, that differ from those provided 
temporarily under an interim waiver. 84 FR 18414, 18416 (May 1, 2019), 
footnote 5.
    Commenters argued that establishing a timeframe for final waiver 
determinations would encourage timely responses and communication 
during the process would ultimately provide certainty for the market. 
(Acuity, No. 14 at p. 2) Commenters also objected to the removal from 
the regulations in the proposal of the one year deadline for DOE to 
either grant or deny a waiver or, to complete a test procedure to 
address the issues raised by the waiver petition. (ITI, No. 20 at p. 1; 
Traulsen, No. 25 at 1; NAFEM, No. 26 at pp. 3-4; and Carrier, No. 36 at 
p. 2).
    Lennox stated that interim waivers must not be allowed to continue 
indefinitely, but argued that if DOE fails to act within one year of 
issuing an interim waiver, the interim waiver should continue to remain 
in effect until DOE takes action. These commenters condition this 
extension by clarifying that petitioners or other stakeholders should 
not be able to bring judicial action to compel DOE to render a final 
determination. (Lennox, No. 48 at p. 8) Other commenters took a similar 
stance in that they supported the notice that interim waivers were to 
remain in effect until a decision was published in the Federal Register 
on the waiver petition or, an amended test procedure was published. 
(NEMA, No. 55 at p. 6).
    In response, DOE understands the commenters' concerns about an 
interim waiver persisting indefinitely and retains the language at 10 
CFR 430.27 and 10 CFR 431.401 in this final rule that DOE will issue a 
decision and order or amend the test procedure to address the issue(s) 
presented in the waiver petition within 1 year of issuance of an 
interim waiver.
    DOE also received comments asserting that the Department's NOPR may 
not withstand the scrutiny of the APA because the Department has failed 
to provide satisfactory explanations for its proposed action and is 
proposing to forego independent judgment on this matter by deferring to 
private parties. The commenters suggest that if the Department will not 
withdraw the NOPR then it should consider issuing a Supplemental Notice 
of Proposed Rulemaking (SNOPR) to address the issues raised during the 
comment period. (CA IOUs, No. 37 at p. 8-9).
    In response, DOE notes that the comment period was extended on 
multiple occasions to allow commenters to provide additional feedback 
on the NOPR. In both the NOPR and this final rule, DOE has provided 
detailed explanations regarding its decision-making process. DOE has 
explained its reasons for undertaking this action and considered the 
comments received by members of the public and industry when making the 
decision to move forward with this final rule. DOE has also determined 
that the minor changes DOE is making from the NOPR (e.g., extending the 
time period from 30 to 45 business days) are the logical outgrowth of 
the issues raised in the proposed rule and the comments submitted by 
interested parties. As a result, DOE has determined that an SNOPR is 
unnecessary.
    Some commenters argued that DOE has unlawfully changed its 
interpretation of its test procedure waiver regulations by failing to 
provide a reasoned explanation for allowing an interim waiver to be 
``deemed granted'' if the Department fails to provide notice within 30-
business days of receipt of the petition. (Earthjustice, No. 49 at p. 4 
referencing FCC v. Fox Television Stations, 556 U.S. 502, 515-16 
(2009); AG Joint Commenters, No. 51 at p. 6) Commenters look to the 
Department's 2014 amendments to the test procedure waiver regulations, 
noting that DOE did not in that rulemaking allow manufacturers to 
extend previously granted waivers to additional models with the same 
technology or characteristics because DOE would be unable to fulfill 
its responsibility to ensure that an alternative test procedure was 
appropriate for the new basic models. (Earthjustice, No. 49 at p. 4 
referencing 79 FR 26591, 26593 (May 9, 2014)) These commenters argued 
that DOE failed to provide a reasoned explanation for why DOE proposed 
to allow manufacturers to ``write their own test procedures'' through 
the proposed ``deemed granted'' approach, thus removing the 
Department's oversight of the test procedure process.
    Other commenters argued DOE failed to provide any justification for 
dispensing of public notice as to when an interim waiver is granted. 
Commenters note that under the proposal DOE need never make a formal 
determination before an interim waiver request is ``deemed granted,'' 
therefore the public notice requirement may never be triggered. These 
commenters asserted that the Department must also provide a reasoned 
explanation for this disparity otherwise the rulemaking is arbitrary 
and capricious. (AG Joint Commenters, No. 51 at p. 6).
    Contrary to these commenters' assertions, this final rule does not 
change the Department's prior interpretation of its obligations under 
EPCA by offering manufacturers the possibility of writing their own 
test procedures absent DOE oversight. In the 2014 final rule, DOE 
responded to commenters suggesting that DOE allow manufacturers who had 
received a waiver for a particular basic model or group of basic models 
to extend that waiver to additional basic models without requesting a 
waiver extension from DOE. DOE determined in that case that DOE would 
need to make an independent waiver determination for those basic 
models. DOE is not changing this requirement in this final rule. This 
rule, as noted previously, affects DOE's process for a decision on an 
interim waiver, not a waiver petition. The rule specifies that if DOE 
does not notify a manufacturer within 45 business days of submitting an 
interim waiver, the interim waiver is granted and the manufacturer may 
test and certify its product while DOE processes the waiver petition. 
DOE also provides that DOE will not grant an interim waiver if the 
application does not include an alternative test procedure. Applicants 
will be made aware of the denial and can submit a petition including an 
alternate test procedure or work with DOE in a public process to 
develop an appropriate test procedure as DOE processes the petition for 
waiver.
    DOE has also not eliminated its prior responsibility to provide 
public notice of granted interim waivers. Prior to the

[[Page 79815]]

issuance of this final rule, other manufacturers, stakeholders and 
interested parties were given an opportunity to comment on the interim 
waiver when DOE published the grant or denial of interim waiver in the 
Federal Register. That comment opportunity is unchanged by this final 
rule. The amended 10 CFR 430.27(e)(1)(i) and 10 CFR 431.401(e)(1)(i) 
provide members of the public with two specific opportunities to 
receive notice of a potential interim waiver. First, the Department 
specifies in its regulations that it will post a petition for an 
interim test procedure waiver on its website within five business days 
of receipt. While DOE currently posts waiver requests on its website, 
posting is now codified in DOE regulations as a requirement, and the 
posting is required to be done expeditiously. DOE will also provide 
notice of a decision regarding an interim waiver petition by posting 
the decision to the DOE website no later than 5 business days after the 
end of the 45 business day review period. Determinations regarding 
petitions for interim waivers will also be submitted for publication in 
the Federal Register as soon as possible after the determination is 
made. With this final rule, DOE continues to ensure the public remains 
notified and informed of waiver requests and has the ability to comment 
on them. The public also continues to receive timely notification of 
DOE's decision on any particular waiver request.
    Commenters argued that by categorically excluding this proposed 
action from environmental review, the Department has violated the 
National Environmental Policy Act (NEPA), 42 U.S.C. 4321, et seq., for 
applying an inapplicable categorical exclusion. Commenters assert that 
the Department has failed to meet the burden of proof for this claim by 
failing to determine, as required by DOE regulations, whether 
extraordinary circumstances exist that could ``affect the significance 
of the environmental effects of the proposal''. Commenters continued 
that DOE cannot simply conclude that the rulemaking will have no impact 
on environmental factors without providing an analysis into such 
factors. (CA IOUs, No. 37 at p. 8).
    As stated in the NOPR, this rule amends existing regulations 
without changing the environmental effect of the regulations being 
amended. The Department reasonably asserted that the proposal was 
covered under the A5 Categorical Exclusion, 10 CFR part 1021, subpart 
D., and that neither an environmental assessment nor an environmental 
impact statement was required. 84 FR 18414, 18420 (May 1, 2019). DOE 
maintains that this final rule provides greater clarity and 
transparency throughout the interim test procedure waiver process. The 
rulemaking does not extend to setting energy conservation standards, 
but relates to the test procedures manufacturers may use to demonstrate 
compliance. DOE concludes in this final rule that the A5 categorical 
exclusion still applies. For these same reasons, because the rule only 
provides for manufacturers to use, on an interim basis, the test 
procedure specified in the interim waiver if DOE fails to act within a 
reasonable time period, no extraordinary circumstances exist that could 
affect the significance of the environmental effects of the proposal.
    Commenters have also asserted that DOE should devote more resources 
towards reviewing test procedure waivers using the existing regulatory 
framework. (Earthjustice, No. 49 at p. 1, 6; and ASAP et al., No. 46 at 
p. 7) Commenters noted that the current delays in the test procedure 
waiver process are problems of efficiency and could be improved through 
the additional allocation of resources. (CEC, No. 40 at p. 7).
    It is the Department's intent that by finalizing its test procedure 
waiver decision-making process in this rulemaking that it will increase 
response time and reduce manufacturers' burdens associated with the 
interim waiver application process, provide greater certainty and 
transparency it its administrative process, and reduce delays in 
manufacturers' availability to bring innovative product options to 
consumers. 84 FR 18414, 18415 (May 1, 2019).
    Some commenters disagreed with DOE's use of public policy reasons 
as a basis for granting interim waivers. (CEC, No. 40 at p. 10) These 
commenters call DOE's action contrary to the intent of EPCA because the 
statute establishes clear criteria for any test procedure authorized by 
the Department under 42 U.S.C. 6293(b)(3). DOE, therefore, cannot 
permit a manufacturer to use an alternative test procedure without 
first finding that the alternative satisfies these statutory criteria. 
(Earthjustice, No. 49 at pp. 4-5).
    In response, the Department is not changing the longstanding 
regulatory criteria for the grant of waiver that have existed since 
1980, 45 FR 64109 (September 26, 1980), and were retained and extended 
to include interim waivers in amendments to the procedures in 1986, 51 
FR 42823 (November 26, 1986). The Department's procedures were revised 
in 1995, 60 FR 15004 (March 21, 1995), and again in 2014, 79 FR 26591 
(May 9, 2014). Under this final rule, for an interim waiver and waiver 
application to be granted, applicants are required to provide an 
application that includes an alternative test procedure. The 
Department's review of the application includes a review of the 
proposed alternative test procedure, and as noted previously, DOE is 
well aware of the EPCA requirements for the issuance or amendment of a 
test procedure at 42 U.S.C. 6293 and 42 U.S.C. 6314. If DOE does not 
otherwise act to affirmatively grant or deny the interim waiver within 
45 business days, the waiver is granted based on the regulatory 
criterion that it is desirable for public policy reasons to grant 
immediate relief pending a determination on the petition for waiver. 10 
CFR 430.27(e)(2) and 10 CFR 431.401(e)(2). DOE continues to believe 
that it is desirable for public policy reasons to allow manufacturers 
to test and certify their products using to the test procedure 
specified in the waiver petition, pursuant to an interim waiver, while 
DOE receives comment on the petition for waiver and works with the 
petitioner, and with the benefit of public input, to determine whether 
any changes to that test procedure are warranted.
    Some commenters expressed confusion regarding what triggers the 30-
day clock for granting an interim waiver. (ASE, No. 43 at p. 4; and 
Acuity, No. 14 at p. 2) Other commenters argued that the clock for 
review should only start once DOE has received all of the necessary 
information. (Earthjustice, No. 49 at p. 7).
    DOE notes that the 30-day deadline of the proposed rule has been 
amended to 45 business days, which equates to approximately two months. 
To clarify when DOE considers a petition received and starts the clock, 
DOE notes that the 45 business day clock does not begin until an 
applicant submits a petition for an interim waiver that includes the 
information specified in 10 CFR 430.27(b)(2) or 10 CFR 431.401(b)(2) 
under 10 CFR 430.27(e)(1)(iii) and 10 CFR 431.401(e)(1)(iii) of this 
final rule. Inclusion of an alternate test procedure is necessary to 
allow DOE to consider the likelihood of success of the petition for 
waiver and is required for DOE to grant an interim waiver.
    As a means of further streamlining the interim waiver process, DOE 
received comments suggesting the use of group waiver applications from 
trade associations or similar industry groups if they produce like or 
similar products.

[[Page 79816]]

Commenters asserted that this grouped approach would conserve 
manufacturers' compliance resources and save the Department resources 
from having to review repetitive applications. (Acuity, No. 14 at pp. 
2-3)
    Because each waiver submission is dependent on the specifics of 
each product that is the subject of any particular waiver request, DOE 
does not plan to implement such a practice through this final rule. To 
conserve resources, the Department suggests that manufacturers look to 
existing test procedure waivers for similar products as a means of 
identifying relevant alternative test procedures that can be included 
in their own, individual petitions for a waiver, see https://www.energy.gov/eere/buildings/current-test-procedure-waivers.

IV. Procedural Requirements

A. Review Under Executive Order 12866 and 13563

    This regulatory action has been determined to be ``significant'' 
under Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735, October 4, 1993). Accordingly, this action was subject to review 
under that Executive Order by the Office of Information and Regulatory 
Affairs (OIRA) of the Office of Management and Budget (OMB).
    DOE has also reviewed this final regulation pursuant to Executive 
Order 13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). 
E.O. 13563 is supplemental to and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, agencies are 
required by Executive Order 13563 to: (1) Propose or adopt a regulation 
only upon a reasoned determination that its benefits justify its costs 
(recognizing that some benefits and costs are difficult to quantify); 
(2) tailor regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, taking into account, 
among other things, and to the extent practicable, the costs of 
cumulative regulations; (3) select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity); (4) to the 
extent feasible, specify performance objectives, rather than specifying 
the behavior or manner of compliance that regulated entities must 
adopt; and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE concludes 
that this final rule is consistent with these principles. The 
amendments to DOE's regulations are intended to expedite DOE's 
processing of test procedure interim waiver applications, thereby 
reducing financial and administrative burdens for all manufacturers; as 
such, the final rule satisfies the criteria in Executive Order 13563.

B. Review Under Executive Orders 13771 and 13777

    On January 30, 2017, the President issued Executive Order 13771, 
``Reducing Regulation and Controlling Regulatory Costs.'' That Order 
stated the policy of the executive branch is to be prudent and 
financially responsible in the expenditure of funds, from both public 
and private sources. The Order stated that it is essential to manage 
the costs associated with the governmental imposition of private 
expenditures required to comply with Federal regulations. DOE considers 
this final rule to be an E.O. 13771 deregulatory action, resulting in 
expected cost savings to manufacturers.
    Additionally, on February 24, 2017, the President issued Executive 
Order 13777, ``Enforcing the Regulatory Reform Agenda.'' The Order 
required the head of each agency designate an agency official as its 
Regulatory Reform Officer (RRO). Each RRO shall oversee the 
implementation of regulatory reform initiatives and policies to ensure 
that agencies effectively carry out regulatory reforms, consistent with 
applicable law. Further, E.O. 13777 requires the establishment of a 
regulatory task force at each agency. The regulatory task force will 
make recommendations to the agency head regarding the repeal, 
replacement, or modification of existing regulations, consistent with 
applicable law. At a minimum, each regulatory reform task force shall 
attempt to identify regulations that:
    (i) Eliminate jobs, or inhibit job creation;
    (ii) Are outdated, unnecessary, or ineffective;
    (iii) Impose costs that exceed benefits;
    (iv) Create a serious inconsistency or otherwise interfere with 
regulatory reform initiatives and policies;
    (v) Are inconsistent with the requirements of Information Quality 
Act, or the guidance issued pursuant to that Act, in particular those 
regulations that rely in whole or in part on data, information, or 
methods that are not publicly available or that are insufficiently 
transparent to meet the standard for reproducibility; or
    (vi) Derive from or implement Executive Orders or other 
Presidential directives that have been subsequently rescinded or 
substantially modified.
    As noted, this final rule is deregulatory, and is expected to 
reduce both financial and administrative burdens on regulated parties. 
Specifically, the amendments to DOE's regulations discussed in this 
final rule should improve upon current waiver regulations, which 
potentially are inhibiting job creation; are ineffective in creating 
certainty for manufacturers with respect to business decisions; and 
impose costs that exceed benefits. Specifically, the length of time 
manufacturers have previously waited for DOE to provide notification of 
the disposition of applications for interim waiver (or final decisions 
on waiver petitions), made possible by the open-ended nature of the 
current regulations, will be significantly shortened. The cost savings 
and other benefits manufacturers should realize by waiting no more than 
45 business days for an interim waiver determination should create cost 
savings, as manufacturers have a decision whether they could introduce 
their products and equipment into commerce in a timely fashion. These 
cost savings may lead to increased job creation, and create other 
potentially significant economic benefits.
i. National Cost Savings and Forgone Benefits
    The primary anticipated cost saving is from reducing the number of 
days by which manufacturer revenues are delayed for affected products. 
DOE monetized this value for the NOPR using the interest that a 
manufacturer might have earned on product revenue if an interim waiver 
were approved within 45 business days. Between the proposed rule and 
the final rule, DOE has adjusted this time period from 30 business days 
to 45 business days. There are three interim waivers in this dataset 
that were granted after more than 30 business days but in fewer than 45 
business days; however, those interim waivers did not cause any change 
in manufacturer revenues.\8\ On average, between 2016 and 2018, DOE 
concluded interim waivers after 185

[[Page 79817]]

days, or 118 days beyond the 45 business days specified in this final 
rule. Using a threshold of 45 business days rather than 30 business 
days changes the magnitude, though not the direction, of DOE's 
anticipated cost savings from this final rule. DOE uses 7% interest per 
the Office of Management and Budget's Circular A-4,\9\ and calculates 
the forgone interest that could have accrued for each affected product 
during the 118 day delay period.
---------------------------------------------------------------------------

    \8\ All three interim waivers were granted for more efficient 
models of external power supplies, which could already test and 
certify compliance in the absence of the grant of interim waiver. As 
a result, speeding the grant of these interim waivers would not 
increase manufacturer revenues in either the NOPR analysis or final 
rule analysis.
    \9\ ``The 7 percent rate is an estimate of the average before-
tax rate of return to private capital in the U.S. economy. It is a 
broad measure that reflects the returns to real estate and small 
business capital as well as corporate capital.'' https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

    DOE monetized the scope of delay using average prices for products 
in interim waiver petitions and the proportion of affected shipments, 
based on the proportion of basic models listed in interim waiver 
petitions relative to the total number of basic models within each 
product category. A full list of petitions for interim waiver can be 
accessed at https://www.energy.gov/eere/buildings/current-test-procedure-waivers. This list indicates how many interim waiver 
petitions were received for each product category. Each petition for 
interim waiver also lists the number of affected basic models, which 
DOE used to assess the proportion of shipments affected by each 
petition. Total numbers of basic models per product category are 
accessible via the DOE's Compliance Certification Database.\10\
---------------------------------------------------------------------------

    \10\ https://www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
---------------------------------------------------------------------------

    Between 2016 and 2018, 5,322 basic models of 12 residential and 
commercial products were affected by interim waiver delays, totaling 
1.31 million in estimated annual shipments and $1.76 billion in annual 
sales. The affected products are outlined in Table IV.B.1 below.\11\ 
While all affected shipments are represented in Table IV.B.1 below, DOE 
monetized the cost of delay only for those basic models for which 
manufacturers would be unable to test or certify absent an interim 
waiver. For one petition, the manufacturer was unable to test or 
certify half of the basic models requested absent a waiver; the 
estimated cost of delay is proportionate to those models. DOE 
calculated the interest that could have been earned on this revenue 
over the 118-day average delay period and multiplied the average cost 
of delay per petition by 11, the average number of interim waiver 
requests received per year, to reach an annual cost of delay. In 
undiscounted terms, DOE expects that this proposal will result in $14 
million in annual cost savings. DOE assumes that these sales are 
delayed rather than forgone.
---------------------------------------------------------------------------

    \11\ Walk-in Coolers and Freezers (WICF) are counted as a single 
affected product. However, Table IV.B.1. breaks out which petitions 
concerned which WICF components, as their annual shipments and 
prices vary accordingly.

       Table IV.B.1--Shipments and Average Prices of Products/Equipment Affected by Interim Waiver Delays
                                                   [2016-2018]
----------------------------------------------------------------------------------------------------------------
                                              Affected        Average price       Estimated
            Product/equipment                 shipments       (2016$) \12\      product sales     Cost of delay
----------------------------------------------------------------------------------------------------------------
Residential:
    Battery Chargers....................            74,694             $7.92          $591,738           $13,391
    Ceiling Fans........................            48,397            110.43         5,344,688           120,951
    Central Air Conditioners & Heat                481,200          3,086.07     1,371,615,829        31,039,854
     Pumps..............................
    Clothes Washers.....................            31,780            700.24        22,253,510           503,600
    Dishwashers.........................            24,912            301.92         7,521,486           170,212
    Refrigerators.......................            40,968            655.30        26,846,375           607,537
Commercial:
    Commercial Refrigeration Equipment..            22,036          3,902.71        85,998,189         1,946,151
    Walk-in Coolers & Freezers--Doors...           190,950            585.60       111,821,271         2,503,440
    Walk-in Coolers & Freezers--Systems.               700          2,681.82         1,876,011            42,454
                                         -----------------------------------------------------------------------
        Total...........................  ................  ................  ................        36,947,591
----------------------------------------------------------------------------------------------------------------
        Average Cost of Delay per Petition (29 petitions total)...............................         1,274,055
----------------------------------------------------------------------------------------------------------------
        Average Cost of Delay per Year (11 petitions/year)....................................        14,014,604
----------------------------------------------------------------------------------------------------------------
Note that totals may not add due to rounding.

Forgone Benefits
    To the extent that this policy would cause DOE to grant interim 
waiver requests that it would not have granted in the status quo, this 
proposal may result in forgone benefits to consumers or the 
environment. Based on historical data, these effects are anticipated to 
be relatively small. Of 21 concluded interim waiver petitions, DOE 
granted 18 in full and granted the remaining 3 with modifications. Of 
the modified interim waivers, one was granted in part, one was granted 
with minor modifications, and one was granted with a different 
alternative test measure than proposed. DOE estimated the forgone 
environmental benefits and energy savings of granting the petitions as 
received, rather than as modified by the Department.
---------------------------------------------------------------------------

    \12\ Average price is generally the base case average MSP of 
equipment from the life-cycle cost year in the most recently 
published technical support document. This represents a shipment-
weighted average across efficiency distribution and across all 
product classes.
---------------------------------------------------------------------------

    All forgone benefits and savings are annual, rather than one-time, 
and are projected in the table below using a perpetual time horizon and 
discounted to 2016. DOE expects these changes to result in $359 million 
or $163 million in total cost savings, discounted at 3% and 7%, 
respectively. In annualized terms, DOE expects $10.8 million in net 
cost savings, discounted at 3%, or $11.4 million in net cost savings 
discounted at 7%.

[[Page 79818]]



        Table IV.B.2--Cost Impact of Proposed Interim Waiver Rule
                                 [2016$]
------------------------------------------------------------------------
                                                            Costs or
                                          Costs or          (savings)
                                          (savings)         millions
------------------------------------------------------------------------
Annual Cost Savings of Reduced Delay     ($14,014,604)          ($14.01)
Annual Forgone Energy Savings.......           164,000              0.16
Annualized Carbon Emissions (SCC),           1,764,000              1.76
 3% [dagger]........................
Annualized Carbon Emissions (SCC),             827,000              0.83
 7% [dagger]........................
Net Present Value at 3%.............     (358,927,345)          (358.93)
Net Present Value at 7%.............     (163,068,216)          (163.07)
Annualized Costs or (Savings) at 3%.      (10,767,820)           (10.77)
Annualized Costs or (Savings) at 7%.      (11,414,775)           (11.41)
------------------------------------------------------------------------
[dagger] Undiscounted annual SCC values are not available for
  comparison.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires that a Federal agency prepare a final regulatory flexibility 
analysis (FRFA) for any final rule for which a general notice of 
proposed rulemaking is required, unless the agency certifies that the 
rule, if promulgated, will not have a significant economic impact on a 
substantial number of small entities (5 U.S.C. 605(b)).
    This final rule would impose a requirement on the Department that 
it must make a decision on interim waiver applications within 45 
business days after receipt of a petition. An interim waiver would 
remain in effect until a waiver decision is published or until DOE 
publishes a new or amended test procedure that addresses the issues 
presented in the waiver, whichever is earlier.
    The final rule does not impose any new requirements on any 
manufacturers, including small businesses. DOE's economic analysis, 
presented in section IV.B. of this final rule, analyzed interim waiver 
requests submitted by 21 different manufacturers. Assuming that all of 
these manufacturers were small entities, because the final rule does 
not impose any new requirements on any small entity, the economic 
impact on small entities will be zero. Therefore, there will be no 
significant economic impact to affected small entities. The final rule 
provides greater certainty to manufacturers applying for interim 
waivers that their petitions would be considered and adjudicated 
promptly, allowing them, upon DOE grant of an interim waiver, to 
distribute their products or equipment in commerce while the Department 
considered its final decision on the petition for waiver. This may be 
especially true of any small manufacturers who may only sell one or two 
specialty products and rely on this as their sole stream of revenue. 
This rulemaking would allow such manufacturers to continue selling 
their product while the Department considers a final decision on the 
petition for waiver. The potential benefits of the rule to 
manufacturers, including small manufacturers, are as discussed in 
Section IV. B. of this final rule. No additional requirements with 
respect to the waiver application process would be imposed. DOE did not 
receive comments on this certification, and no commenters provided 
information that the rule would impose any economic impacts on small 
entities.
    For these reasons, DOE certifies that this final rule will not have 
a significant economic impact on a substantial number of small 
entities, and therefore, no regulatory flexibility analysis has been 
prepared. DOE's certification and supporting statement of factual basis 
has been provided to the Chief Counsel of Advocacy of the SBA pursuant 
to 5 U.S.C. 605(b).

D. Review Under the Paperwork Reduction Act

    Manufacturers of covered products and equipment must certify to DOE 
that their products or equipment comply with any applicable energy 
conservation standards. In certifying compliance, manufacturers must 
test their products and equipment according to the DOE test procedures, 
including any amendments adopted for those test procedures. DOE has 
established regulations for the certification and recordkeeping 
requirements for all covered consumer products and commercial 
equipment. 76 FR 12422 (Mar. 7, 2011); 80 FR 5099 (Jan. 30, 2015). The 
collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). This requirement has been approved under 
OMB control number 1910-1400. Public reporting burden for the 
certification is estimated to average 35 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

E. Review Under the National Environmental Policy Act

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has analyzed this proposed action in accordance with NEPA and DOE's 
NEPA implementing regulations (10 CFR part 1021). DOE has determined 
that this rule qualifies for categorical exclusion under 10 CFR part 
1021, subpart D, Appendix A5 because it is an interruptive rulemaking 
that does not change the environmental effect of the rule and meets the 
requires for application of a categorical exclusion. See 10 CFR 
1021.410. Therefore, DOE has determined that the promulgation of this 
rule is not a major Federal action significantly affecting the quality 
of the human environment within the meaning of NEPA, and does not 
require an environmental assessment or an environmental impact 
statement.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' (61 FR 4729, February 7, 1996), imposes on 
Federal agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for

[[Page 79819]]

affected conduct rather than a general standard and promote 
simplification and burden reduction. Section 3(b)(2) of Executive Order 
12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any, to be given to the regulation; (2) 
clearly specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any, to be given to the regulation; (5) defines key terms; 
and (6) addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires Executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 3(b) to determine whether they are met or it is unreasonable to 
meet one or more of the standards. DOE has completed the required 
review and determined that, to the extent permitted by law, this final 
rule meets the relevant standards of Executive Order 12988.

G. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism'' (64 FR 43255, Aug. 10, 1999), 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined this final rule and has 
determined that it would not preempt State law and would not have a 
substantial direct effect on the States, the relationship between the 
national government and the States, or the distribution of power and 
responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

H. Review Under Executive Order 13175

    Under Executive Order 13175 (65 FR 67249, November 6, 2000) on 
``Consultation and Coordination with Indian Tribal Governments,'' DOE 
may not issue a discretionary rule that has ``tribal'' implications and 
imposes substantial direct compliance costs on Indian tribal 
governments. DOE has determined that the final rule would not have such 
effects and concluded that Executive Order 13175 does not apply to this 
final rule.

I. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For regulatory actions likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. (This policy is also available at http://energy.gov/gc/office-general-counsel.) DOE examined this final rule 
according to UMRA and its statement of policy and has tentatively 
determined that the rule contains neither an intergovernmental mandate, 
nor a mandate that may result in the expenditure by State, local, and 
Tribal government, in the aggregate, or by the private sector, of $100 
million or more in any year. Accordingly, no further assessment or 
analysis is required under UMRA.

J. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001) requires Federal agencies to prepare and submit to OIRA 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that: (1)(i) Is a significant regulatory action under 
Executive Order 12866, or any successor order, and (ii) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (2) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use. This regulatory 
action would not have a significant adverse effect on the supply, 
distribution, or use of energy, and it has not been designated by the 
Administrator of OIRA as a significant energy action; it therefore is 
not a significant energy action. Accordingly, DOE has not prepared a 
Statement of Energy Effects.

K. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any proposed rule that may affect family 
well-being. This rule will not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

L. Review Under the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516 note) provides for Federal agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB.
    OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and 
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 
reviewed this rule under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule before its effective date. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
rule.

[[Page 79820]]

List of Subjects

10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference, Intergovernmental relations, Small 
businesses.

10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Test procedures, Incorporation by reference, Reporting and 
recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on November 6, 
2020, by Daniel R. Simmons, Assistant Secretary for Energy Efficiency 
and Renewable Energy, pursuant to delegated authority from the 
Secretary of Energy. That document with the original signature and date 
is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on November 24, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, the Department of Energy 
is amending parts 430 and 431 of chapter II, subchapter D, of title 10 
of the Code of Federal Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Section 430.27 is amended by revising paragraphs (e)(1), (h), and 
(i)(1) to read as follows:


Sec.  430.27  Petitions for waiver and interim waiver.

* * * * *
    (e) Provisions specific to interim waiver--(1) Disposition of 
petition. (i) Within 5 business days of receipt of a petition for an 
interim waiver, DOE will post that petition for an interim waiver on 
its website.
    (ii) In those cases where DOE receives a petition for an interim 
waiver in conjunction with a petition for waiver, DOE will review the 
petition for interim waiver within 45 business days of receipt of the 
petition. Where the manufacturer does not specify any alternate test 
procedure, or otherwise fails to satisfy the other required criteria 
specified under paragraph (b)(2) of this section, DOE will deny the 
petition for interim waiver. In such case, DOE will notify the 
applicant of the denial within the 45-day review period and process the 
request for waiver in accordance with this section. If DOE does not 
notify the applicant of the disposition of the petition for interim 
waiver, in writing, within 45 business days of receipt of the petition, 
the interim waiver is granted utilizing the alternate test procedure 
requested in the petition. Notice of DOE's determination on the 
petition for interim waiver will be posted on the Department's website 
not later than 5 business days after the end of the review period. Such 
determination will also be submitted for publication in the Federal 
Register.
    (iii) A petition submitted under this paragraph (whether for an 
interim waiver or waiver) is considered ``received'' on the date it is 
received by the Department through the Department's established email 
box for receipt of waiver petitions or, if delivered by mail, on the 
date the waiver petition is stamped as received by the Department.
* * * * *
    (h) Duration. (1) Interim waivers remain in effect until the 
earlier of the following:
    (i) DOE publishes a decision and order on a petition for waiver in 
the Federal Register pursuant to paragraph (f) of this section; or
    (ii) DOE publishes in the Federal Register a new or amended test 
procedure that addresses the issue(s) presented in the waiver.
    (2) Within one year of a determination to grant an interim waiver, 
DOE will complete either paragraph (h)(1)(i) or (ii) of this section as 
specified in this section.
    (3) When DOE amends the test procedure to address the issues 
presented in a waiver, the waiver will automatically terminate on the 
date on which use of that test procedure is required to demonstrate 
compliance.
    (i) Compliance certification. (1) If the alternate test procedure 
specified in the interim waiver differs from the alternate test 
procedure specified by DOE in a subsequent decision and order granting 
the petition for waiver, a manufacturer who has already certified basic 
models using the procedure permitted in DOE's grant of an interim test 
procedure waiver is not required to re-test and re-rate those basic 
models so long as: The manufacturer used that alternative procedure to 
certify the compliance of the basic model after DOE granted the 
company's interim waiver request; changes have not been made to those 
basic models that would cause them to use more energy or otherwise be 
less energy efficient; and the manufacturer does not modify the 
certified rating. However, if DOE ultimately denies the petition of 
waiver or the alternate test procedure specified in the interim waiver 
differs from the alternate test procedure specified by DOE in a 
subsequent decision and order granting the petition for waiver, DOE 
will provide a period of 180 days before the manufacturer is required 
to use the DOE test procedure or the alternate test procedure specified 
in the decision and order to make representations of energy efficiency.
* * * * *

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
3. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
4. Section 431.401 is amended by revising paragraphs (e)(1), (h), and 
(i)(1) to read as follows:


Sec.  431.401   Petitions for waiver and interim waiver.

* * * * *
    (e) Provisions specific to interim waivers--(1) Disposition of 
petition. (i) Within 5 business days of receipt of a petition for an 
interim waiver, DOE will post that petition for an interim waiver on 
its website.
    (ii) In those cases where DOE receives a petition for an interim 
waiver in conjunction with a petition for waiver, DOE will review the 
petition for interim waiver within 45 business days of receipt of the 
petition. Where the manufacturer does not specify any alternate test 
procedure, or otherwise fails to satisfy any of the other required 
criteria specified under paragraph (b)(2) of this section, DOE will 
deny the petition for interim waiver. In such case, DOE will notify the 
applicant of the denial within the 45-day review period and process the 
request for waiver in

[[Page 79821]]

accordance with this section. If DOE does not notify the applicant of 
the disposition of the petition for interim waiver, in writing, within 
45 business days of receipt of the petition, the interim waiver is 
granted utilizing the alternate test procedure requested in the 
petition. Notice of DOE's determination on the petition for interim 
waiver will be posted on the Department's website not later than 5 
business days after the end of the review period. Such determination 
will also be submitted for publication in the Federal Register.
    (iii) A petition submitted under this paragraph (whether for an 
interim waiver or waiver) is considered ``received'' on the date it is 
received by the Department through the Department's established email 
box for receipt of waiver petitions or, if delivered by mail, on the 
date the waiver petition is stamped as received by the Department.
* * * * *
    (h) Duration. (1) Interim waivers remain in effect until the 
earlier of the following:
    (i) DOE publishes a decision and order on a petition for waiver 
pursuant to paragraph (f) of this section in the Federal Register; or
    (ii) DOE publishes in the Federal Register a new or amended test 
procedure that addresses the issues presented in the waiver.
    (2) Within one year of a determination to grant an interim waiver, 
DOE will complete either paragraph (h)(1)(i) or (ii) of this section as 
specified in this section.
    (3) When DOE amends the test procedure to address the issues 
presented in a waiver, the waiver will automatically terminate on the 
date on which use of that test procedure is required to demonstrate 
compliance.
    (i) Compliance certification. (1) If the alternate test procedure 
specified in the interim waiver differs from the alternate test 
procedure specified by DOE in a subsequent decision and order granting 
the petition for waiver, a manufacturer who has already certified basic 
models using the procedure permitted in DOE's grant of an interim test 
procedure waiver is not required to re-test and re-rate those basic 
models so long as: The manufacturer used that alternative procedure to 
certify the compliance of the basic model after DOE granted the 
company's interim waiver request; changes have not been made to those 
basic models that would cause them to use more energy or otherwise be 
less energy efficient; and the manufacturer does not modify the 
certified rating. However, if DOE ultimately denies the petition for 
waiver, or if the alternate test procedure specified in the interim 
waiver differs from the alternate test procedure specified by DOE in a 
subsequent decision and order, DOE will provide a period of 180 days 
before the manufacturer is required to use the DOE test procedure or 
the alternate test procedure specified in the decision and order to 
make representations of energy efficiency.
* * * * *
[FR Doc. 2020-26321 Filed 12-10-20; 8:45 am]
BILLING CODE 6450-01-P


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