PM2.5 and Other Emission Reductions for NSPS Options Analyzed 

– Annual Average Reductions for 2014-2022 Timeframe

1

 Under Proposed Option, PM2.5 reductions are about 

4,700 tons; for Alternative Option, reductions are 

about 4,800 tons

 VOC reductions are about 3,200 tons under each 

option; CO reductions are about 33,000 tons

 We show impacts in the RIA for the 2014-2022 

timeframe because of the difference in the 

compliance times for options and differences in year 

to year impacts
Total Annualized Costs (millions of 2010 $, annual 

average for 2014-2022)*

Affected Source Proposed 

Option

Alternative 

Option

Wood Stoves $4.2 $8.1 

Single-Burn-Rate Stoves 0.9 1.5 

Pellet Stoves 3.5 6.2

Forced Air Furnaces 2.3 3.8 

Hydronic Heaters 4.5 8.3

Masonry Heaters 0.3 0.3

Total $15.7 $28.3

Cost-effectiveness for PM2.5 

Reductions

$3,300 $5,900

*All estimates based on R&D costs of 6 

years, not the full model life
Economic Impacts - Annual Cost to Sales Across All 

Firms for Each Option(percentage)

Affected Source Proposed 

Option (%)

Alternative 

Option(%)

Wood Stoves 4.3 8.3

Single-Burn-Rate Stoves 6.4 10.7 

Pellet Stoves 2.3 4.1

Forced Air Furnaces 2.4 4.0 

Hydronic Heaters 3.3 6.1

Masonry Heaters 4.8 4.8

Average Cost/Sales 3.9 6.3
Cost/Price/Economic Perspectives

4

 Almost all potentially affected manufacturers are small businesses and many are very 

small. There are a relatively large number of manufacturers and a relatively small 

number of unit sales over which to spread the compliance costs.

 Sales have been down >30% from 2008 to 2009 and are forecast to not return to 2008 

levels until 2017.

 Wood stove sales prices are very competitive at the consumer level and are correlated 

with looks and size more often than emissions and energy efficiency; often marketed “like 

furniture and how it looks in the room”.

 There are large differences in baseline costs within most subcategories and categories, 

regardless of emission performance.

 There is much uncertainty in the cost impact estimates. A great majority (more than 

90%) of the costs of the proposal are for R&D of new model lines. We have had to 

depend on manufacturers’ estimates, e.g., $340,000 per new model line every 6 years.

 With consolidation in the industries affected by this proposal, average firm size could 

eventually increase and so will revenues. The result of this could be that firm-level 

impacts as a result of this rule may be smaller to the extent this is a trend. 
Small Business Impacts

5

 Potential impacts to small businesses are generally considered significant (for a substantial 

number affected) if cost as a percentage of sales is above the 1-3% range – from EPA’s 

SBREFA guidance and 

 More than 90% of the more than 600 businesses affected by this NSPS are defined as small 

under SBA’s size standard definition – clearly, a substantial number affected

 Potential cost as a percentage of sales is > 1% for more than 80% of affected small entities 

under the Proposed Option, and more than 99% for the Alternative Option.

 The potential average cost as a percentage of sales for small entities is 6% for the 

Proposed Option, and about 10% for the Alternative Option. The cost/sales for some 

very small entities exceeds 100% under each option. 

 Based on this information, we conclude that a SISNOSE (Significant Economic Impact to a 

Substantial Number of Small Entities) would potentially result from implementing 

requirements under either option

 A cost to sales ratio reflects an estimate of direct impact to affected firms with no cost 

passthrough to consumers – no change in appliance price

 Thus, these ratios are an overestimate of cost impacts to manufacturers 

 The analysis approach is consistent with that used for other rules

 SBREFA panel was held in 2010 – recommended flexibilities from Panel report included in 

the proposal package. 
Summary of Impacts for the Proposal

6

 Net benefits are quite large under each option, but the 

potential economic and small business impacts are also 

large under each option

 Benefits are far larger than costs ($1.8 to $4.2 billion in benefits 

compared to $16 million in costs for the proposal – a ratio of $115 –

270 to $1 in costs)

 For the Alternative option, the ratio is $70- 150 to $1 in costs

 Economic impacts as measured by annual cost to sales are 2-

6% across all firms for the Proposed option, and 4-11% for the 

Alternative option

 Small business impacts as measured by annual cost to sales 

average 6% for the Proposed option and 10% for the 

Alternative Option. Under each option, some very small 

businesses have potential cost to sales > 100% (very small 

revenue estimate per firm for some industries).