31918 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

DEPARTMENT OF ENERGY 

10 CFR Parts 429 and 430 

[Docket Number EERE–2011–BT–STD– 

0060] 

RIN 1904–AC64 

Energy Conservation Program: Energy 

Conservation Standards for 

Residential Dishwashers 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Direct final rule. 

SUMMARY: The Energy Policy and 

Conservation Act of 1975 (EPCA), as 

amended, prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including residential dishwashers. 

EPCA also requires the U.S. Department 

of Energy (DOE) to determine whether 

amended standards would be 

technologically feasible and 

economically justified, and would save 

a significant amount of energy. In this 

direct final rule, DOE is adopting 

amended energy conservation standards 

for residential dishwashers. DOE has 

determined that the amended energy 

conservation standards for these 

products would result in significant 

conservation of energy, and are 

technologically feasible and 

economically justified. A notice of 

proposed rulemaking that proposes 

identical energy efficiency standards is 

published elsewhere in today’s Federal 

Register. If DOE receives adverse 

comment and determines that such 

comment may provide a reasonable 

basis for withdrawing the direct final 

rule, this final rule will be withdrawn 

and DOE will proceed with the 

proposed rule. 

DATES: The effective date of this rule is 

September 27, 2012 unless adverse 

comment is received by September 17, 

2012. If adverse comments are received 

that DOE determines may provide a 

reasonable basis for withdrawal of the 

final rule, a timely withdrawal of this 

rule will be published in the Federal 

Register. If no such adverse comments 

are received, compliance with the 

amended standards established for 

residential dishwashers in today’s final 

rule will be required on May 30, 2013. 

ADDRESSES: The docket for this 

rulemaking is available for review at 

www.regulations.gov, including Federal 

Register notices, comments, and other 

supporting documents/materials. All 

documents in the docket are listed in 

the regulations.gov index. Not all 

documents listed in the index may be 

publicly available, however, such as 

information that is exempt from public 

disclosure. 

A link to the docket Web page can be 

found at: http://www.regulations.gov/#

!docketDetail;D=EERE-2011-BT-STD0060. The regulations.gov Web page 

contains instructions on how to access 

all documents, including public 

comments, in the docket. 

For further information on how to 

review the docket, contact Ms. Brenda 

Edwards at (202) 586–2945 or by email: 

Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Witkowski, U.S. Department 

of Energy, Office of Energy Efficiency 

and Renewable Energy, Building 

Technologies Program, EE–2J, 1000 

Independence Avenue SW., 

Washington, DC 20585–0121. 

Telephone: (202) 586–7463. Email: 

Stephen.Witkowski@ee.doe.gov. 

Elizabeth Kohl, U.S. Department of 

Energy, Office of the General Counsel, 

GC–71, 1000 Independence Avenue 

SW., Washington, DC 20585–0121. 

Telephone: (202) 586–7796. Email: 

Elizabeth.Kohl@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Direct Final Rule and Its 

Benefits 

A. Benefits and Costs to Consumers 

B. Impact on Manufacturers 

C. National Benefits 

D. Conclusion 

II. Introduction 

A. Authority 

B. Background 

1. EISA 2007 Standards 

2. History of Standards Rulemaking for 

Residential Dishwashers 

3. Issues on Which DOE Seeks Comment 

4. Test Procedure History 

III. General Discussion 

A. Product Classes and Scope of Coverage 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

C. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

D. Economic Justification 

1. Specific Criteria 

2. Rebuttable Presumption 

IV. Methodology and Discussion 

A. Market and Technology Assessment 

1. General 

2. Products Included in This Rulemaking 

3. Product Classes 

4. Non-Regulatory Programs 

5. Technology Options 

B. Screening Analysis 

C. Engineering Analysis 

1. Baseline Efficiency Levels 

2. Higher Efficiency Levels 

3. Proprietary Designs 

4. Reverse Engineering 

D. Markups Analysis 

E. Energy and Water Use Analysis 

F. Life-Cycle Cost and Payback Period 

Analysis 

1. Product Cost 

2. Installation Cost 

3. Annual Energy Consumption 

4. Energy Prices 

5. Energy Price Projections 

6. Water and Wastewater Prices 

7. Maintenance and Repair Costs 

8. Product Lifetime 

9. Discount Rates 

10. Compliance Date of Amended 

Standards 

11. Base-Case Efficiency Distribution 

12. Inputs to Payback Period Analysis 

13. Rebuttable-Presumption Payback 

Period 

G. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

1. Shipments 

2. Forecasted Efficiency in the Base Case 

and Standards Cases 

3. Total Installed Cost per Unit 

4. National Energy and Water Savings 

5. Net Present Value of Consumer Benefit 

H. Consumer Subgroup Analysis 

I. Manufacturer Impact Analysis 

1. Overview 

2. GRIM Analysis 

3. Manufacturer Interviews 

J. Employment Impact Analysis 

K. Utility Impact Analysis 

L. Emissions Analysis 

M. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

1. Social Cost of Carbon 

2. Valuation of Other Emissions 

Reductions 

V. Analytical Results 

A. Trial Standard Levels 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Individual 

Consumers 

2. Economic Impacts on Manufacturers 

3. National Impact Analysis 

4. Impact on Utility or Performance of 

Products 

5. Impact of Any Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Other Factors 

C. Conclusion 

1. Benefits and Burdens of TSLs 

Considered for Residential Dishwashers 

2. Summary of Benefits and Costs 

(Annualized) of the Standards 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

and Executive Order 13563 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act 

D. Review Under the National 

Environmental Policy Act of 1969 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under Executive Order 12630 

J. Review Under the Treasury and General 

Government Appropriations Act, 2001 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31919 

1For editorial reasons, upon codification in the 

U.S. Code, Part B was redesignated Part A. 

2 DOE Docket No. EERE–2011–BT–STD–0060, 

Comment 1. 

K. Review Under Executive Order 13211 

L. Review Under the Information Quality 

Bulletin for Peer Review 

M. Congressional Notification 

VII. Approval of the Office of the Secretary 

The Secretary of Energy has approved 

publication of today’s direct final rule. 

I. Summary of the Direct Final Rule 

and Its Benefits 

Title III, Part B1 of the Energy Policy 

and Conservation Act of 1975 (EPCA or 

the Act), Public Law 94–163 (42 U.S.C. 

6291–6309, as codified), established the 

Energy Conservation Program for 

Consumer Products Other Than 

Automobiles. Pursuant to EPCA, any 

new or amended energy conservation 

standard that DOE prescribes for certain 

products, such as residential 

dishwashers, shall be designed to 

achieve the maximum improvement in 

energy efficiency that is technologically 

feasible and economically justified. (42 

U.S.C. 6295(o)(2)(A)) Furthermore, the 

new or amended standard must result in 

significant conservation of energy. (42 

U.S.C. 6295(o)(3)(B)) In accordance with 

these and other statutory provisions 

discussed in this notice, DOE is 

adopting amended energy conservation 

standards for residential dishwashers. 

The amended standards, which are 

established in terms of maximum 

annual energy use and maximum percycle water consumption, are shown in 

Table I.1. These amended standards 

apply to all products listed in Table I.1 

and manufactured in, or imported into, 

the United States on or after May 30, 

2013. 

TABLE I.1—AMENDED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL DISHWASHERS

Product class 

Compliance date: May 30, 2013 

Maximum annual energy use * Maximum per-cycle water consumption 

1. Standard (≥8 place settings plus 6 serving pieces) .. 307 kWh/year ............................................. 5.0 gallons/cycle. 

2. Compact (<8 place settings plus 6 serving pieces) .. 222 kWh/year ............................................. 3.5 gallons/cycle. 

* Annual energy use, expressed in kilowatt-hours (kWh) per year, is calculated as: The sum of the annual standby electrical energy in kWh and 

the product of (1) the representative average dishwasher use cycles per year and (2) the sum of machine electrical energy consumption per 

cycle in kWh, the total water energy consumption per cycle in kWh, and, for dishwashers having a truncated normal cycle, the drying energy 

consumption divided by 2 in kWh. A truncated normal cycle is defined as the normal cycle interrupted to eliminate the power-dry feature after the 

termination of the last rinse option. 

These standard levels were submitted 

jointly to DOE by groups representing 

manufacturers, energy and 

environmental advocates, and consumer 

groups. This collective set of comments, 

titled ‘‘Agreement on Minimum Federal 

Efficiency Standards, Smart Appliances, 

Federal Incentives and Related Matters 

for Specified Appliances’’ (the ‘‘Joint 

Petition’’ 2), recommends specific 

energy conservation standards for 

residential dishwashers that, in the 

commenters’ view, would satisfy the 

EPCA requirements in 42 U.S.C. 

6295(o). 

A. Benefits and Costs to Consumers 

Table I.2 presents DOE’s evaluation of 

the economic impacts of today’s 

standards on consumers of residential 

dishwashers, as measured by the 

average life-cycle cost (LCC) savings and 

the median payback period. 

TABLE I.2—IMPACTS OF TODAY’S STANDARDS ON CONSUMERS OF RESIDENTIAL DISHWASHERS

Product class 

Average LCC 

savings 

(2010$) 

Median payback period 

(years) 

Standard .................................................................................................................................................................. 3 11.8 

Compact ................................................................................................................................................................... 12 0.3 

B. Impact on Manufacturers 

The industry net present value (INPV) 

is the sum of the discounted cash flows 

to the industry from the base year 

through the end of the analysis period 

(2012 through 2047). Using a real 

discount rate of 8.5 percent, DOE 

estimates that the INPV for 

manufacturers of dishwashers is $637.5 

million in 2010$. Under today’s 

standards, DOE expects that 

manufacturers may lose up to 13.3 

percent of their INPV, which is 

approximately $84.6 million. 

Additionally, based on DOE’s 

interviews with the manufacturers of 

dishwashers, DOE does not expect any 

plant closings or significant loss of 

employment as a result of today’s 

standards. 

C. National Benefits 

DOE’s analyses indicate that today’s 

standards would save a significant 

amount of energy and water in 2013– 

2047—an estimated 0.07 quads of 

cumulative energy, and 0.14 trillion 

gallons of water. 

The cumulative national net present 

value (NPV) of total consumer costs and 

savings of today’s standards in 2010$ 

ranges from $0.08 billion (at a 7-percent 

discount rate) to $0.46 billion (at a 

3-percent discount rate). This NPV 

expresses the estimated total value of 

future operating-cost savings minus the 

estimated increased product costs for 

products purchased in 2013–2047, 

discounted to 2012. 


srobinson on DSK4SPTVN1PROD with RULES2
31920 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

3 DOE calculates emissions reductions relative to 

the most recent version of the Annual Energy 

Outlook (AEO) Reference case forecast. As noted in 

TSD chapter 15, this forecast accounts for 

regulatory emissions reductions from in-place 

regulations at the time of preparation of the AEO, 

including the Clean Air Interstate Rule (CAIR, 70 

FR 25162 (May 12, 2005)), but not the Clean Air 

Mercury Rule (CAMR, 70 FR 28606 (May 18, 2005)). 

Subsequent regulations, including the recently 

finalized CAIR replacement rule, the Cross-State Air 

Pollution rule issued on July 6, 2011, will appear 

in the forecast for future rulemakings. 

4Results for NOX and Hg are presented in short 

tons. One short ton equals 2000 lbs. 

5 DOE is aware of multiple agency efforts to 

determine the appropriate range of values to use in 

evaluating the potential economic benefits of 

reduced Hg emissions. DOE has decided to await 

further guidance regarding consistent valuation and 

reporting of Hg emissions before it monetizes Hg 

emissions reductions in its rulemakings. 

6 DOE used a two-step calculation process to 

convert the time-series of costs and benefits into 

annualized values. First, DOE calculated a present 

value in 2012, the year used for discounting the 

NPV of total consumer costs and savings, for the 

In addition, today’s standards would 

have significant environmental benefits. 

The energy savings would result in 

cumulative greenhouse gas emission 

reductions of approximately 4.06 

million metric tons (Mt) of carbon 

dioxide (CO2) from 2013 through 2047. 

During this period, the standards would 

also result in emissions reductions 3 of 

approximately 3.54 thousand tons of 

nitrogen oxides (NOX) and zero tons of 

mercury (Hg).4

The value of the CO2 reductions is 

calculated using a range of values per 

metric ton of CO2 (otherwise known as 

the Social Cost of Carbon, or SCC) 

developed by a recent interagency 

process. The derivation of the SCC 

values is discussed in section IV.M. 

DOE estimates that the present 

monetary value of the CO2 emissions 

reductions is between $16 and $242 

million, expressed in 2010$ and 

discounted to 2012. DOE also estimates 

that the present monetary value of the 

NOX emissions reductions, expressed in 

2010$ and discounted to 2012, is $2.8 

million at a 7-percent discount rate, and 

$5.2 million at a 3-percent discount 

rate.5

Table I.3 summarizes the national 

economic costs and benefits expected to 

result from today’s standards for 

residential dishwashers. 

TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF RESIDENTIAL DISHWASHER ENERGY

CONSERVATION STANDARDS

Category Present value 

Million 2010$ 

Discount rate 

% 

Benefits 

Operating Cost Savings ................................................................................................................................... 600 7 

1341 3 

CO2 Reduction Monetized Value (at $4.9/t) * .................................................................................................. 16.09 5 

CO2 Reduction Monetized Value (at $22.3/t) * ................................................................................................ 79.49 3 

CO2 Reduction Monetized Value (at $36.5/t) * ................................................................................................ 133.5 2.5 

CO2 Reduction Monetized Value (at $67.6/t) * ................................................................................................ 242.5 3 

NOX Reduction Monetized Value (at $2,537/ton) ** ........................................................................................ 2.76 7 

5.24 3 

Total Benefits † ......................................................................................................................................... 683 7 

1426 3 

Costs 

Incremental Installed Costs ............................................................................................................................. 522 7 

881 3 

Net Benefits 

Including CO2 and NOX† ................................................................................................................................. 161 7 

545 3 

* The CO2 values represent global monetized values of the SCC in 2010 under several scenarios. The values of $4.9, $22.3, and $36.5 per 

metric ton (t) are the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.6/t represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. 

** The value represents the average of the low and high NOX values used in DOE’s analysis. 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount rate. 

The benefits and costs of today’s 

standards, for products sold in 2013– 

2047, can also be expressed in terms of 

annualized values. The annualized 

monetary values are the sum of (1) the 

annualized national economic value, 

expressed in 2010$, of the benefits from 

operating the product (consisting 

primarily of operating cost savings from 

using less energy, minus increases in 

equipment purchase and installation 

costs, which is another way of 

representing consumer NPV, plus (2) the 

annualized monetary value of the 

benefits of emission reductions, 

including CO2 emission reductions.6


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31921 

time-series of costs and benefits using discount 

rates of 3 and 7 percent for all costs and benefits 

except for the value of CO2 reductions. For the 

latter, DOE used a range of discount rates, as shown 

in Table I.3.From the present value, DOE then 

calculated the fixed annual payment over a 30-year 

period, starting in 2013, that yields the same 

present value. This payment includes benefits to 

consumers which accrue after 2047 from the 

dishwashers purchased from 2013 to 2047. Costs 

incurred by manufacturers, some of which may be 

incurred prior to 2013 in preparation for the rule, 

are indirectly included as part of incremental 

equipment costs. The extent of these costs and 

benefits depends on the projected price trends of 

dishwashers because consumer demand of 

dishwashers is a function of dishwasher prices. The 

fixed annual payment is the annualized value. 

Although DOE calculated annualized values, this 

does not imply that the time-series of cost and 

benefits from which the annualized values were 

determined is a steady stream of payments. 

Although adding the value of 

consumer savings to the values of 

emission reductions provides a valuable 

perspective, two issues should be 

considered. First, the national operating 

cost savings are domestic U.S. consumer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use quite different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

residential dishwashers shipped in 

2013–2047. The SCC values, on the 

other hand, reflect the present value of 

future climate-related impacts resulting 

from the emission of one metric ton of 

carbon dioxide in each year. These 

impacts continue well beyond 2100. 

Estimates of annualized benefits and 

costs of today’s standards are shown in 

Table I.4. (All monetary values below 

are expressed in 2010$.) The results 

under the primary estimate are as 

follows. Using a 7-percent discount rate 

for benefits and costs other than CO2

reduction, for which DOE used a 

3-percent discount rate along with the 

SCC series corresponding to a value of 

$22.3/ton in 2010, the cost of the 

standards for dishwashers in today’s 

rule is $46 million per year in increased 

equipment costs, while the benefits are 

$53 million per year in reduced 

equipment operating costs, $3.9 million 

in CO2 reductions, and $0.24 million in 

reduced NOX emissions. In this case, the 

net benefit amounts to $11 million per 

year. Using a 3-percent discount rate for 

all benefits and costs and the SCC series 

corresponding to a value of $22.3/ton in 

2010, the cost of the standards for 

dishwashers in today’s rule is $44 

million per year in increased equipment 

costs, while the benefits are $66 million 

per year in reduced operating costs, $3.9 

million in CO2 reductions, and $0.26 

million in reduced NOX emissions. In 

this case, the net benefit amounts to $27 

million per year. 

TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF AMENDED STANDARDS FOR RESIDENTIAL DISHWASHERS SOLD IN

2013–2047 * 

Discount rate 

Monetized 

(million 2010$/year) 

Primary estimate * Low net benefits 

estimate * 

High net benefits 

estimate * 

Benefits 

Operating Cost Savings ................. 7% .................................. 53 ................................... 48 ................................... 59. 

3% .................................. 66 ................................... 59 ................................... 75. 

CO2 Reduction at $4.9/t ** ............. 5% .................................. 1.1 .................................. 1.0 .................................. 1.3. 

CO2 Reduction at $22.3/t ** ........... 3% .................................. 3.9 .................................. 3.5 .................................. 4.7. 

CO2 Reduction at $36.5/t ** ........... 2.5% ............................... 6.1 .................................. 5.4 .................................. 7.2. 

CO2 Reduction at $67.6/t ** ........... 3% .................................. 12.0 ................................ 10.8 ................................ 14.2. 

NOX Reduction at $2,537/ton ** ..... 7% .................................. 0.24 ................................ 0.23 ................................ 0.27. 

3% .................................. 0.26 ................................ 0.24 ................................ 0.30. 

Total † ............................................. 7% plus CO2 range ........ 54 to 65 .......................... 49 to 59 .......................... 60 to 73. 

7% .................................. 57 ................................... 52 ................................... 64. 

3% plus CO2 range ........ 68 to 78 .......................... 60 to 70 .......................... 76 to 89. 

3% .................................. 70 ................................... 63 ................................... 80. 

Costs 

Incremental Product Costs ............ 7% .................................. 46 ................................... 44 ................................... 43. 

3% .................................. 44 ................................... 41 ................................... 40. 

Total Net Benefits 

Total † ............................................. 7% plus CO2 range ........ 8 to 19 ............................ 6 to 16 ............................ 17 to 30. 

7% .................................. 11 ................................... 8 ..................................... 20. 

3% plus CO2 range ........ 24 to 35 .......................... 19 to 29 .......................... 37 to 49. 

3% .................................. 27 ................................... 22 ................................... 40. 

* The results include benefits to consumers which accrue after 2047 from the dishwashers purchased from 2013 through 2047. Costs incurred 

by manufacturers, some of which may be incurred prior to 2013 in preparation for the rule, are indirectly included as part of incremental equipment costs. The extent of the costs and benefits will depend on the projected price trends of dishwashers, because the consumer demand for 

dishwashers is a function of dishwasher prices. The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of energy prices and 

housing starts from the AEO2011 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental product costs reflect a 

medium decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected product price trends in the Low 

Benefits Estimate, and a high decline rate for projected product price trends in the High Benefits Estimate. The methods used to derive projected 

price trends are explained in section IV.G.3. 

** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, 

$22.3, and $36.5 per ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.6 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for 

NOX (in 2010$) is the average of the low and high values used in DOE’s analysis. 


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31922 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

7For editorial reasons, upon codification in the 

U.S. Code, Part B was redesignated Part A. 

† Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is 

$22.3/t in 2010 (in 2010$). In the rows labeled as ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added to the full range of CO2 values. 

D. Conclusion 

Based on the analyses culminating in 

this final rule, DOE found the benefits 

to the nation of the standards (energy 

savings, water savings, favorable 

consumer LCC savings and payback 

period, positive NPV of consumer 

benefit, and emission reductions) 

outweigh the burdens (profit margin 

impacts that could result in a reduction 

in INPV and increased operational risk 

for manufacturers). DOE has concluded 

that the standards in today’s final rule 

represent the maximum improvement in 

energy efficiency that is technologically 

feasible and economically justified, and 

would result in significant conservation 

of energy. DOE further notes that 

residential dishwashers achieving these 

standard levels are already 

commercially available. 

II. Introduction 

The following section briefly 

discusses the statutory authority 

underlying today’s final rule, as well as 

some of the relevant historical 

background related to the establishment 

of standards for residential dishwashers. 

A. Authority 

Title III, Part B of the Energy Policy 

and Conservation Act of 1975 (EPCA or 

the Act), Public Law 94–163 (42 U.S.C. 

6291–6309, as codified) established the 

Energy Conservation Program for 

Consumer Products Other Than 

Automobiles,7 a program covering most 

major household appliances 

(collectively referred to as ‘‘covered 

products’’), which includes the 

residential dishwashers that are the 

subject of this rulemaking. (42 U.S.C. 

6292(a)(6)) EPCA prescribed energy 

conservation standards for these 

products (42 U.S.C. 6295(g)(1)), and 

directed DOE to conduct two cycles of 

rulemakings to determine whether to 

amend these standards. (42 U.S.C. 

6295(g)(4)) DOE also notes that under 42 

U.S.C. 6295(m), DOE must periodically 

review its energy conservation 

standards for covered products. 

Pursuant to EPCA, DOE’s energy 

conservation program for covered 

products consists essentially of four 

parts: (1) Testing; (2) labeling; (3) the 

establishment of Federal energy 

conservation standards; and (4) 

certification and enforcement 

procedures. The Federal Trade 

Commission (FTC) is primarily 

responsible for labeling, and DOE 

implements the remainder of the 

program. Subject to certain criteria and 

conditions, DOE is required to develop 

test procedures to measure the energy 

efficiency, energy use, or estimated 

annual operating cost of each covered 

product. (42 U.S.C. 6293) Manufacturers 

of covered products must use the 

prescribed DOE test procedure as the 

basis for certifying to DOE that their 

products comply with the applicable 

energy conservation standards adopted 

under EPCA and when making 

representations to the public regarding 

the energy use or efficiency of those 

products. (42 U.S.C. 6293(c) and 

6295(s)) Similarly, DOE must use these 

test procedures to determine whether 

the products comply with standards 

adopted pursuant to EPCA. Id. The DOE 

test procedure for residential 

dishwashers currently appear at title 10 

of the Code of Federal Regulations (CFR) 

part 430, subpart B, appendix C. 

DOE must follow specific statutory 

criteria for prescribing amended 

standards for covered products. As 

indicated above, any amended standard 

for a covered product must be designed 

to achieve the maximum improvement 

in energy efficiency that is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A)) Furthermore, DOE may 

not adopt any standard that would not 

result in the significant conservation of 

energy. (42 U.S.C. 6295(o)(3)) In 

deciding whether an amended standard 

is economically justified, DOE must 

determine whether the benefits of the 

standard exceed its burdens. (42 U.S.C. 

6295(o)(2)(B)(i)) DOE must make this 

determination after receiving comments 

on the proposed standard and 

considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the products subject to the 

standard; 

2. The savings in operating costs 

throughout the estimated average life of 

the covered products in the type (or 

class) compared to any increase in the 

price, initial charges, or maintenance 

expenses for the covered products that 

are likely to result from the imposition 

of the standard; 

3. The total projected amount of 

energy, or as applicable, water, savings 

likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the 

performance of the covered products 

likely to result from the imposition of 

the standard; 

5. The impact of any lessening of 

competition, as determined in writing 

by the Attorney General, that is likely to 

result from the imposition of the 

standard; 

6. The need for national energy and 

water conservation; and 

7. Other factors the Secretary of 

Energy (Secretary) considers relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) 

EPCA allows DOE to issue a final rule 

(hereinafter referred to as a ‘‘direct final 

rule’’) establishing an energy 

conservation standard on receipt of a 

statement submitted jointly by 

interested persons that are fairly 

representative of relevant points of view 

(including representatives of 

manufacturers of covered products, 

States, and efficiency advocates) as 

determined by the Secretary, that 

contains recommendations with respect 

to an energy conservation standard that 

are in accordance with the provisions of 

42 U.S.C. 6295(o). A notice of proposed 

rulemaking (NOPR) that proposes an 

identical energy efficiency standard 

must be published simultaneously with 

the final rule, and DOE must provide a 

public comment period of at least 110 

days. 42 U.S.C. 6295(p)(4). Not later 

than 120 days after issuance of the 

direct final rule, if one or more adverse 

comments or an alternative joint 

recommendation are received relating to 

the direct final rule, the Secretary must 

determine whether the comments or 

alternative recommendation may 

provide a reasonable basis for 

withdrawal under 42 U.S.C. 6295(o) or 

other applicable law. If the Secretary 

makes such a determination, DOE must 

withdraw the direct final rule and 

proceed with the simultaneously 

published notice of proposed 

rulemaking. DOE must publish in the 

Federal Register the reason why the 

direct final rule was withdrawn. Id. 

Furthermore, EPCA, contains what is 

known as an ‘‘anti-backsliding’’ 

provision, which prevents the Secretary 

from prescribing any amended standard 

that either increases the maximum 

allowable energy use or decreases the 

minimum required energy efficiency of 

a covered product. (42 U.S.C. 

6295(o)(1)) Also, the Secretary may not 

prescribe an amended or new standard 

if interested persons have established by 

a preponderance of the evidence that 


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the standard is likely to result in the 

unavailability in the United States of 

any covered product type (or class) of 

performance characteristics (including 

reliability), features, sizes, capacities, 

and volumes that are substantially the 

same as those generally available in the 

United States. (42 U.S.C. 6295(o)(4)) 

EPCA also establishes a rebuttable 

presumption that a standard is 

economically justified if the Secretary 

finds that the additional cost to the 

consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three 

times the value of the energy savings 

during the first year that the consumer 

will receive as a result of the standard, 

as calculated under the applicable test 

procedure. See 42 U.S.C. 

6295(o)(2)(B)(iii). 

Additionally, 42 U.S.C. 6295(q)(1) 

specifies requirements when 

promulgating a standard for a type or 

class of covered product that has two or 

more subcategories. DOE must specify a 

different standard level than that which 

applies generally to such type or class 

of products for any group of covered 

products that have the same function or 

intended use, if products within such 

group—(A) Consume a different kind of 

energy from that consumed by other 

covered products within such type (or 

class); or (B) have a capacity or other 

performance-related feature which other 

products within such type (or class) do 

not have and such feature justifies a 

higher or lower standard than applies or 

will apply to the other products within 

that type or class. Id. In determining 

whether a performance-related feature 

justifies a different standard for a group 

of products, DOE must consider such 

factors as the utility to the consumer of 

such a feature and other factors DOE 

deems appropriate. Id. Any rule 

prescribing such a standard must 

include an explanation of the basis on 

which such higher or lower level was 

established. (42 U.S.C. 6295(q)(2)) 

Federal energy conservation 

requirements generally supersede State 

laws or regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6297(a)–(c)) DOE 

may, however, grant waivers of Federal 

preemption for particular State laws or 

regulations, in accordance with the 

procedures and other provisions set 

forth under 42 U.S.C. 6297(d)). 

Any final rule for new or amended 

energy conservation standards 

promulgated after July 1, 2010, must 

address standby mode and off mode 

energy use. (42 U.S.C. 6295(gg)(3)) 

Specifically, when DOE adopts a 

standard for a covered product after that 

date, it must, if justified by the criteria 

for adoption of standards under EPCA 

(42 U.S.C. 6295(o)), incorporate standby 

mode and off mode energy use into the 

standard, or, if that is not feasible, adopt 

a separate standard for such energy use 

for that product. (42 U.S.C. 

6295(gg)(3)(A)–(B)) The standards 

established in today’s direct final rule 

address standby and off mode energy 

use. 

DOE notes that it is also required to 

amend its test procedures to integrate 

measures of standby mode and off mode 

energy consumption into the overall 

energy efficiency, energy consumption, 

or other energy descriptor for each 

covered product unless the current test 

procedure already fully accounts for and 

incorporates standby and off mode 

energy consumption or such integration 

is technically infeasible. (42 U.S.C. 

6295(gg)(2)) DOE is currently 

considering amendments to the test 

procedure at appendix C to incorporate 

measures of off mode energy 

consumption in addition to the existing 

measures of standby mode energy use. 

75 FR 75290 (Dec. 2, 2010); 76 FR 58346 

Sept. 20, 2011) 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011 (76 FR 3281, 

Jan. 21, 2011). Executive Order 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 emphasizes as well that 

Executive Order 13563 requires agencies 

to use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, the Office of 

Information and Regulatory Affairs has 

emphasized that such techniques may 

include identifying changing future 

compliance costs that might result from 

technological innovation or anticipated 

behavioral changes. For the reasons 

stated in the preamble, DOE believes 

that today’s direct final rule is 

consistent with these principles, 

including that, to the extent permitted 

by law, agencies adopt a regulation only 

upon a reasoned determination that its 

benefits justify its costs and select, in 

choosing among alternative regulatory 

approaches, those approaches that 

maximize net benefits. 

Consistent with EO 13563, and the 

range of impacts analyzed in this 

rulemaking, the energy conservation 

standards adopted herein by DOE 

achieve maximum net benefits. 

B. Background 

1. EISA 2007 Standards 

EPCA, as amended by EISA 2007, 

prescribed energy conservation 

standards for residential dishwashers 

manufactured on or after January 1, 

2010. 42 U.S.C. 6295(g)(10) These 

standards are set forth in Table II.1. 

TABLE II.1—ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL DISHWASHERS ESTABLISHED BY EISA 2007 

Product class 

Annual energy 

use 

(kWh/year) 

Per-cycle water 

consumption 

(gallons/cycle) 

Standard .......................................................................................................................................................... 355 6.5 

Compact ........................................................................................................................................................... 260 4.5 


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31924 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

8A notation in the form ‘‘Earthjustice, No. 2 at p. 

1’’ identifies a written comment that DOE has 

received and has included in the docket of the 

standards rulemaking for residential dishwashers 

(Docket No. EERE–2011–BT–STD–0060). This 

particular notation refers to a comment (1) 

submitted by Earthjustice, (2) in document number 

2 in the docket of that rulemaking, and (3) 

appearing on page 1 of document number 2. 

The EPCA amendments in EISA 2007 

also require DOE to publish a final rule 

no later than January 1, 2015 

determining whether to amend the 

standards in effect for dishwashers 

manufactured on or after January 1, 

2018. (42 U.S.C. 6295(g)(10)(B)(i)) 

Today’s final rule fulfills this statutory 

requirement. 

2. History of Standards Rulemaking for 

Residential Dishwashers 

The National Appliance Energy 

Conservation Act of 1987 (NAECA), 

Public Law 100–12 (March 17, 1989), 

amended EPCA and required that 

dishwashers be equipped with an 

option to dry without heat. NAECA 

further required that DOE conduct two 

cycles of rulemakings to determine if 

amended standards are justified. (42 

U.S.C. 6295(g)(1) and (4)) 

On May 14, 1991, DOE issued a final 

rule establishing performance standards 

for dishwashers to complete the first 

required rulemaking cycle (56 FR 

22250). Compliance with the new 

standards, codified at 10 CFR 430.32(f), 

was required on May 14, 1994. 

DOE then conducted a second 

standards rulemaking for dishwashers. 

DOE issued an advance notice of 

proposed rulemaking (ANOPR) on 

November 14, 1994 to consider 

amending the energy conservation 

standards for clothes washers, 

dishwashers, and clothes dryers. 59 FR 

56423. Subsequently, DOE published a 

Notice of Availability of the Rulemaking 

Framework for Commercial Clothes 

Washers and Residential Dishwashers, 

Dehumidifiers, and Cooking Products. 

71 FR 15059 (Mar. 27, 2006). On 

November 15, 2007, DOE published a 

second ANOPR (hereafter, the 

November 2007 ANOPR) addressing 

energy conservation standards for these 

products. 72 FR 64432. On December 

19, 2007, Congress enacted EISA 2007, 

which, among other things, established 

maximum energy and water use levels 

for residential dishwashers 

manufactured on or after January 1, 

2010. (42 U.S.C. 6295(g)(10)) DOE 

codified the statutory standards for 

these products in a final rule published 

March 23, 2009. 74 FR 12058. 

EPCA, as amended by EISA 2007, 

further requires that DOE publish a final 

rule no later than January 1, 2015, to 

determine whether to amend the 

standards in effect for dishwashers 

manufactured on or after January 1, 

2018. (42 U.S.C. 6295(g)(10)(B)(i)) This 

rulemaking fulfills this statutory 

requirement. 

On July 30, 2010, DOE received the 

Joint Petition, a comment submitted by 

groups representing manufacturers (the 

Association of Home Appliance 

Manufacturers (AHAM), Whirlpool 

Corporation (Whirlpool), General 

Electric Company (GE), Electrolux, LG 

Electronics, Inc. (LG), BSH Home 

Appliances (BSH), Alliance Laundry 

Systems (ALS), Viking Range, Sub-Zero 

Wolf, Friedrich A/C, U-Line, Samsung, 

Sharp Electronics, Miele, Heat 

Controller, AGA Marvel, Brown Stove, 

Haier, Fagor America, Airwell Group, 

Arcelik, Fisher & Paykel, Scotsman Ice, 

Indesit, Kuppersbusch, Kelon, and 

DeLonghi); energy and environmental 

advocates (American Council for an 

Energy Efficient Economy (ACEEE), 

Appliance Standards Awareness Project 

(ASAP), Natural Resources Defense 

Council (NRDC), Alliance to Save 

Energy (ASE), Alliance for Water 

Efficiency (AWE), Northwest Power and 

Conservation Council (NPCC), and 

Northeast Energy Efficiency 

Partnerships (NEEP)); and consumer 

groups (Consumer Federation of 

America (CFA) and the National 

Consumer Law Center (NCLC)) 

(collectively, the ‘‘Joint Petitioners’’). 

The Joint Petitioners recommended 

specific energy conservation standards 

for residential dishwashers that, in their 

view, would satisfy the EPCA 

requirements in 42 U.S.C. 6295(o). 

Earthjustice submitted a comment 

affirming its support for the Joint 

Petition. (Earthjustice, No. 2 at p. 1) 8

After careful consideration of the Joint 

Petition containing a consensus 

recommendation for amended energy 

conservation standards for residential 

dishwashers, the Secretary has 

determined that this ‘‘Consensus 

Agreement’’ has been submitted by 

interested persons who are fairly 

representative of relevant points of view 

on this matter. Congress provided some 

guidance within the statute itself by 

specifying that representatives of 

manufacturers of covered products, 

States, and efficiency advocates are 

relevant parties to any consensus 

recommendation. (42 U.S.C. 

6295(p)(4)(A)) As delineated above, the 

Consensus Agreement was signed and 

submitted by a broad cross-section of 

the manufacturers who produce the 

subject products, their trade 

associations, and environmental, energy 

efficiency and consumer advocacy 

organizations. Although States were not 

signatories to the Consensus Agreement, 

they did not express any opposition to 

it. Moreover, DOE does not read the 

statute as requiring absolute agreement 

among all interested parties before the 

Department may proceed with issuance 

of a direct final rule. By explicit 

language of the statute, the Secretary has 

discretion to determine when a joint 

recommendation for an energy or water 

conservation standard has met the 

requirement for representativeness (i.e., 

‘‘as determined by the Secretary’’). 

Accordingly, DOE will consider each 

consensus recommendation on a caseby-case basis to determine whether the 

submission has been made by interested 

persons fairly representative of relevant 

points of view. 

Pursuant to 42 U.S.C. 6295(p)(4), the 

Secretary must also determine whether 

a jointly-submitted recommendation for 

an energy or water conservation 

standard is in accordance with 42 U.S.C. 

6295(o) or 42 U.S.C. 6313(a)(6)(B), as 

applicable. This determination is 

exactly the type of analysis that DOE 

conducts whenever it considers 

potential energy conservation standards 

pursuant to EPCA. DOE applies the 

same principles to any consensus 

recommendations it may receive to 

satisfy its statutory obligation to ensure 

that any energy conservation standard 

that it adopts achieves the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified and will result in 

significant conservation of energy. Upon 

review, the Secretary determined that 

the Consensus Agreement submitted in 

the instant rulemaking comports with 

the standard-setting criteria set forth 

under 42 U.S.C. 6295(o). Accordingly, 

the consensus agreement levels were 

included as trial standard level (TSL) 2 

in today’s rule for residential 

dishwashers, the details of which are 

discussed at relevant places throughout 

this document. The definition of the 

TSLs considered in this direct final rule 

is discussed in section V.A. 

In sum, as the relevant criteria under 

42 U.S.C. 6295(p)(4) have been satisfied, 

the Secretary has determined that it is 

appropriate to adopt amended energy 

conservation standards for residential 

dishwashers through this direct final 

rule. 

As required by the same statutory 

provision, DOE is also simultaneously 

publishing a NOPR which proposes the 

identical standard levels contained in 

this direct final rule and is providing for 

a 110-day public comment period. DOE 

will consider whether any comment 

received during this comment period is 

sufficiently ‘‘adverse’’ as to provide a 

reasonable basis for withdrawal of the 


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9The rulemaking Web site for residential 

dishwashers is located at www1.eere.energy.gov/ 

buildings/appliance_standards/residential/ 

dishwashers.html. 

direct final rule and continuation of this 

rulemaking under the NOPR. Typical of 

other rulemakings, it is the substance, 

rather than the quantity, of comments 

that will ultimately determine whether 

a direct final rule will be withdrawn. To 

this end, the substance of any adverse 

comment(s) received will be weighed 

against the anticipated benefits of the 

Consensus Agreement and the 

likelihood that further consideration of 

the comment(s) would change the 

results of the rulemaking. DOE notes 

that to the extent an adverse comment 

had been previously raised and 

addressed in the rulemaking 

proceeding, such a submission will not 

typically provide a basis for withdrawal 

of a direct final rule. 

3. Issues on Which DOE Seeks Comment 

As stated previously, in promulgating 

today’s direct final rule pursuant to 

42 U.S.C. 6295(p)(4), DOE carefully 

considered the Joint Petition submitted 

to DOE, which contained a consensus 

recommendation for amended energy 

conservation standards for residential 

dishwashers. For the reasons stated in 

this direct final rule, the Secretary 

determined that the ‘‘Consensus 

Agreement’’ was submitted by 

interested persons who are fairly 

representative of relevant points of view 

on this matter. The Secretary also 

determined, for the reasons set forth in 

this direct final rule, that the standards 

contained in the Consensus Agreement 

comport with the standard-setting 

criteria set forth under 42 U.S.C. 

6295(o). Therefore, the Secretary 

promulgates this direct final rule 

establishing the amended energy 

conservation standards for residential 

dishwashers. 

As required by EPCA, DOE is also 

simultaneously publishing a NOPR and 

providing for a 110-day public comment 

period. 42 U.S.C. 4295(p)(4). Should 

DOE determine to proceed with the 

NOPR, or to gather additional data for 

future energy conservation standards 

activities for residential dishwashers, 

DOE will consider any comments and 

data received on the direct final 

standards. Although comments are 

welcome on all aspects of this 

rulemaking, DOE is particularly 

interested in comments on the 

following: 

(1) Impacts of the standards that may 

lessen or improve the utility or 

performance of the covered products. 

These impacts may include increased 

cycle times to wash dishware, ability to 

achieve good wash performance (e.g., 

cleaning, rinsing) and drying 

performance, increase in noise, and 

other potential impacts. As discussed in 

section IV.I.3, manufacturers noted in 

interviews that any potential utility 

impacts may be more significant at 

efficiency levels above those adopted in 

today’s direct final rule. DOE also seeks 

information on utility impacts at higher 

efficiency levels and will consider such 

information in any future rulemaking 

for dishwashers. 

(2) The 2013 compliance date for the 

proposed standards and whether this 

compliance date adequately considers 

the typical dishwasher model design 

cycle for manufacturers. 

(3) Whether repair costs for 

residential dishwashers would increase 

at the efficiency levels indicated in 

today’s rule due to any changes in the 

design and materials and components 

used in order to comply with the new 

efficiency standards. 

(4) Where there would be any 

anticipated changes in the consumption 

of complementary goods (e.g., 

dishwasher detergent, rinse aid) that 

may result from the proposed standards. 

(5) The 215 cycles per year estimate 

of consumer usage for residential 

dishwashers, as well as the estimated 

1-hour cycle time, which includes all 

cycles available on the unit. 

(6) The product lifetime for 

dishwashers assumed in the analysis 

and the method used to derive the mean 

age of 15 years. 

DOE has prepared a technical support 

document (TSD) in support of this 

direct final rule. The TSD, which is 

available at the rulemaking Web site,9

provides an overview of the activities 

DOE undertook in developing standards 

for residential dishwashers. It presents 

and describes in detail each analysis 

DOE performed, including descriptions 

of inputs, sources, methodologies, and 

results. These analyses are as follows: 

(1) A market and technology 

assessment addresses the scope of this 

rulemaking, identifies the dishwasher 

product classes, characterizes the 

markets for the products, and reviews 

techniques and approaches for 

improving their efficiency. 

(2) A screening analysis reviews 

technology options to improve the 

efficiency of residential dishwashers 

and weighs those options against DOE’s 

four prescribed screening criteria. 

(3) An engineering analysis develops 

the relationship between increased 

manufacturer price and increased 

efficiency. 

(4) A markups analysis establishes 

markups for converting manufacturer 

prices to customer product costs. 

(5) An energy use analysis generates 

energy-use estimates for residential 

dishwashers as a function of efficiency 

levels. 

(6) A life-cycle cost analysis calculates 

the effects of standards on individual 

customers and compares the life-cycle 

costs (LCC) and payback period (PBP) of 

products with and without higher 

efficiency standards. 

(7) A shipments analysis forecasts 

shipments with and without higher 

efficiency standards. 

(8) A national impact analysis 

forecasts the national energy savings 

(NES), and the national net present 

value of total consumer costs and 

savings, expected to result from specific, 

potential energy conservation standards 

for residential dishwashers. 

(9) A consumer subgroup analysis 

discusses the effects of standards on 

different subgroups of consumers. 

(10) A manufacturer impact analysis 

discusses the effects of standards on the 

finances and profitability of product 

manufacturers. 

(11) An employment impact analysis 

discusses the indirect effects of 

standards on national employment. 

(12) A utility impact analysis 

discusses the effects of standards on 

electric and gas utilities. 

(13) An emissions analysis discusses 

the effects of standards on three 

pollutants—sulfur dioxide (SO2), 

nitrogen oxides (NOX), and mercury—as 

well as carbon dioxide emissions. 

(14) A regulatory impact analysis 

discusses the impact of non-regulatory 

alternatives to efficiency standards. 

4. Test Procedure History 

As discussed in section II. A, the DOE 

test procedure for residential 

dishwashers is found at Title 10 of the 

CFR, part 430, subpart B, appendix C. 

DOE originally established its test 

procedure for dishwashers in 1977. 42 

FR 39964 (Aug. 8, 1977). In 1983, DOE 

amended the test procedure to revise the 

representative average-use cycles to 

more accurately reflect consumer use 

and to address dishwashers that use 

120 degrees Fahrenheit (°F) inlet water. 

48 FR 9202 (March 3, 1983). DOE 

amended the test procedure again in 

1984 to redefine the term ‘‘water heating 

dishwasher.’’ 49 FR 46533 (Nov. 27, 

1984). In 1987, DOE amended the test 

procedure to address models that use 

50 °F inlet water. 52 FR 47549 (Dec. 15, 

1987). In 2001, DOE revised the test 

procedure’s testing specifications to 

improve testing repeatability, changed 

the definitions of ‘‘compact 

dishwasher’’ and ‘‘standard 

dishwasher,’’ and reduced the average 

number of use cycles per year from 322 


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31926 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

10The NIA spreadsheet model is described in 

section IV.G of this notice. 

to 264. 66 FR 65091, 65095–97 (Dec. 18, 

2001). In 2003, DOE again revised the 

test procedure to more accurately 

measure dishwasher efficiency, energy 

use, and water use. The 2003 

dishwasher test procedure amendments 

included the following revisions: 

(1) The addition of a method to rate the 

efficiency of soil-sensing products; 

(2) the addition of a method to measure 

standby power; and (3) a reduction in 

the average-use cycles per year from 264 

to 215. 68 FR 51887, 51899–903 (August 

29, 2003). The current version of the test 

procedure includes provisions for 

determining estimated annual energy 

use (EAEU), estimated annual operating 

cost (EAOC), energy factor (EF) 

expressed in cycles per kilowatt-hour 

(kWh), and water consumption 

expressed in gallons per cycle. 10 CFR 

430.23(c). As discussed in section II. A, 

DOE is currently considering 

amendments the test procedure to 

incorporate measures of off mode energy 

consumption in addition to the existing 

measures of standby mode energy use. 

III. General Discussion 

A. Product Classes and Scope of 

Coverage 

When evaluating and establishing 

energy conservation standards, DOE 

divides covered products into product 

classes by the type of energy used or by 

capacity or other performance-related 

features that justifies a different 

standard. In making a determination 

whether a performance-related feature 

justifies a different standard, DOE must 

consider such factors as the utility to the 

consumer of the feature and other 

factors DOE determines are appropriate. 

(42 U.S.C. 6295(q)) 

Existing energy conservation 

standards divide residential 

dishwashers into two product classes 

based on the capacity, i.e., the number 

of place settings and serving pieces that 

can be loaded in the product. 

• Standard (capacity equal to or 

greater than eight place settings plus six 

serving pieces) 

• Compact (capacity less than eight 

place settings plus six serving pieces) 

The Joint Petition proposes energy 

conservation standard levels for 

standard and compact product classes 

based on the same capacity definitions. 

(Joint Petition, No. 1 at p. 11) In this 

final rule, DOE maintains the existing 

standard and compact product classes 

for residential dishwashers. Based on a 

survey of products available on the 

market, DOE determined that compact 

dishwasher provide unique utility in 

their countertop or drawer 

configurations. 

B. Technological Feasibility 

1. General 

In each standards rulemaking, DOE 

conducts a screening analysis based on 

information gathered on all current 

technology options and prototype 

designs that could improve the 

efficiency of the products or equipment 

that are the subject of the rulemaking. 

As the first step in such an analysis, 

DOE develops a list of technology 

options for consideration in 

consultation with manufacturers, design 

engineers, and other interested parties. 

DOE then determines which of those 

means for improving efficiency are 

technologically feasible. DOE considers 

technologies incorporated in 

commercially available products or in 

working prototypes to be 

technologically feasible. 10 CFR part 

430, subpart C, appendix A, section 

4(a)(4)(i). 

After DOE has determined that 

particular technology options are 

technologically feasible, it further 

evaluates each technology option in 

light of the following additional 

screening criteria: (1) Practicability to 

manufacture, install, or service; (2) 

adverse impacts on product utility or 

availability; and (3) adverse impacts on 

health or safety. Section IV. B of this 

rule discusses the results of the 

screening analysis for residential 

dishwashers, particularly the designs 

DOE considered, those it screened out, 

and those that are the basis for the TSLs 

in this rulemaking. For further details 

on the screening analysis for this 

rulemaking, see chapter 4 of the direct 

final rule TSD. 

2. Maximum Technologically Feasible 

Levels 

When DOE proposes to adopt an 

amended standard for a type or class of 

covered product, it must determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for such product. (42 U.S.C. 

6295(p)(1)) Accordingly, in the 

engineering analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for residential dishwashers, 

using the design parameters for the most 

efficient products available on the 

market or in working prototypes. (See 

chapter 5 of the direct final rule TSD.) 

The max-tech levels that DOE 

determined for this rulemaking are 

described in section IV.C.2 of this final 

rule. 

C. Energy Savings 

1. Determination of Savings 

DOE used its national impact analysis 

(NIA) spreadsheet model to estimate 

energy savings from amended standards 

for the products that are the subject of 

this rulemaking.10 For each TSL, DOE 

forecasted energy savings beginning in 

the year that manufacturers would be 

required to comply with amended 

standards, and ending in 2047. DOE 

quantified the energy savings 

attributable to each TSL as the 

difference in energy consumption 

between the standards case and the base 

case. The base case represents the 

forecast of energy consumption in the 

absence of amended mandatory 

efficiency standards, and considers 

market demand for more efficient 

products. 

The NIA spreadsheet model calculates 

the electricity savings in site energy 

expressed in kilowatt-hours (kWh). Site 

energy is the energy directly consumed 

by appliances at the locations where 

they are used. DOE reports national 

energy savings on an annual basis in 

terms of the aggregated source (primary) 

energy savings, which is the savings in 

the energy that is used to generate and 

transmit the site energy. (See chapter 10 

of the direct final rule TSD). To convert 

site energy to source energy, DOE 

derived annual conversion factors from 

the model used to prepare the Energy 

Information Administration’s (EIA) 

Annual Energy Outlook 2011 

(AEO2011). 

2. Significance of Savings 

As noted above, 42 U.S.C. 

6295(o)(3)(B) prevents DOE from 

adopting a standard for a covered 

product unless such standard would 

result in ‘‘significant’’ energy savings. 

Although the term ‘‘significant’’ is not 

defined in the Act, the U.S. Court of 

Appeals, in Natural Resources Defense 

Council v. Herrington, 768 F.2d 1355, 

1373 (D.C. Cir. 1985), indicated that 

Congress intended ‘‘significant’’ energy 

savings in this context to be savings that 

were not ‘‘genuinely trivial.’’ The energy 

savings for all of the TSLs considered in 

this rulemaking (presented in section 

V.3.a) are nontrivial, and, therefore, 

DOE considers them ‘‘significant’’ 

within the meaning of section 325 of 

EPCA. 

D. Economic Justification 

1. Specific Criteria 

As noted in section II.A, EPCA 

provides seven factors to be evaluated in 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31927 

determining whether a potential energy 

conservation standard is economically 

justified. (42 U.S.C. 6295(o)(2)(B)(i)) The 

following sections discuss how DOE has 

addressed each of those seven factors in 

this rulemaking. 

a. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of an 

amended standard on manufacturers, 

DOE first uses an annual cash-flow 

approach to determine the quantitative 

impacts. This step includes both a shortterm assessment—based on the cost and 

capital requirements during the period 

between when a regulation is issued and 

when entities must comply with the 

regulation—and a long-term assessment 

over a 30-year analysis period. The 

industry-wide impacts analyzed include 

industry net present value (INPV), 

which values the industry on the basis 

of expected future cash flows; cash 

flows by year; changes in revenue and 

income; and other measures of impact, 

as appropriate. Second, DOE analyzes 

and reports the impacts on different 

types of manufacturers, including 

impacts on small manufacturers. Third, 

DOE considers the impact of standards 

on domestic manufacturer employment 

and manufacturing capacity, as well as 

the potential for standards to result in 

plant closures and loss of capital 

investment. Finally, DOE takes into 

account cumulative impacts of various 

DOE regulations and other regulatory 

requirements on manufacturers. 

For individual consumers, measures 

of economic impact include the changes 

in life-cycle cost (LCC) and payback 

period (PBP) associated with new or 

amended standards. The LCC, which is 

specified separately in EPCA as one of 

the seven factors to be considered in 

determining the economic justification 

for a new or amended standard, 42 

U.S.C. 6295(o)(2)(B)(i)(II), is discussed 

in the following section. For consumers 

in the aggregate, DOE also calculates the 

national net present value of the 

economic impacts throughout the 

forecast period applicable to a particular 

rulemaking. 

b. Life-Cycle Costs 

The LCC is the sum of the purchase 

price of a product (including its 

installation) and the operating expense 

(including energy, maintenance, and 

repair expenditures) discounted over 

the lifetime of the product. The LCC 

savings for the considered efficiency 

levels are calculated relative to a base 

case that reflects likely market trends in 

the absence of amended standards. The 

LCC analysis requires a variety of 

inputs, such as product prices, product 

energy consumption, energy prices, 

maintenance and repair costs, product 

lifetime, and consumer discount rates. 

In its analysis, DOE assumed that 

consumers will purchase the considered 

products in the first year of compliance 

with amended standards. 

To account for uncertainty and 

variability in specific inputs, such as 

product lifetime and discount rate, DOE 

uses a distribution of values, with 

probabilities attached to each value. 

Using this approach, DOE identifies the 

percentage of consumers estimated to 

receive LCC savings or experience an 

LCC increase, in addition to the average 

LCC savings associated with a particular 

standard level. In addition to identifying 

ranges of impacts, DOE evaluates the 

LCC impacts of potential standards on 

identifiable subgroups of consumers 

that may be affected disproportionately 

by a national standard. 

c. Energy Savings 

Although significant conservation of 

energy is a separate statutory 

requirement for imposing an energy 

conservation standard, EPCA requires 

DOE, in determining the economic 

justification of a standard, to consider 

the total projected energy savings that 

are expected to result directly from the 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) 

DOE uses the NIA spreadsheet results in 

its consideration of total projected 

energy savings. 

d. Lessening of Utility or Performance of 

Products 

In establishing classes of products, 

and in evaluating design options and 

the impact of potential standard levels, 

DOE developed standards for residential 

dishwashers that would not lessen the 

utility or performance of those products. 

(42 U.S.C. 6295(o)(2)(B)(i)(IV)) The TSL 

adopted in today’s direct final rule will 

not reduce the utility or performance of 

the dishwashers under consideration in 

this rulemaking. 

e. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider any 

lessening of competition that is likely to 

result from standards. It also directs the 

Attorney General of the United States 

(Attorney General) to determine the 

impact, if any, of any lessening of 

competition likely to result from a 

proposed standard and to transmit such 

determination to the Secretary within 60 

days of the publication of a direct final 

rule and simultaneously published 

proposed rule, together with an analysis 

of the nature and extent of the impact. 

(42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) 

DOE published the proposed rule 

containing energy conservation 

standards identical to those set forth in 

today’s direct final rule and transmitted 

a copy of today’s direct final rule and 

the accompanying TSD to the Attorney 

General, requesting that the Department 

of Justice (DOJ) provide its 

determination on this issue. DOE will 

consider DOJ’s comments on the rule in 

determining whether to proceed with 

the direct final rule. DOE will also 

publish and respond to DOJ’s comments 

in the Federal Register in a separate 

notice. 

f. Need for National Energy 

Conservation 

The energy savings from new or 

amended standards are likely to provide 

improvements to the security and 

reliability of the nation’s energy system. 

Reductions in the demand for electricity 

also may result in reduced costs for 

maintaining the reliability of the 

nation’s electricity system. DOE 

conducts a utility impact analysis to 

estimate how standards may affect the 

nation’s needed power generation 

capacity. 

Energy savings from today’s standards 

also are likely to result in environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with energy 

production. DOE reports the 

environmental effects from today’s 

standards, and from each TSL it 

considered, in the emissions analysis 

contained in chapter 15 in the direct 

final rule TSD and in section V.B.6 of 

this notice. DOE also reports estimates 

of the economic value of emissions 

reductions resulting from the 

considered TSLs. 

g. Other Factors 

EPCA allows the Secretary of Energy, 

in determining whether a standard is 

economically justified, to consider any 

other factors that the Secretary deems to 

be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII)) In developing this 

direct final rule, DOE has also 

considered the submission of the Joint 

Petition, which DOE believes sets forth 

a statement by interested persons that 

are fairly representative of relevant 

points of view (including 

representatives of manufacturers of 

covered products, and efficiency 

advocates) and contains 

recommendations with respect to an 

energy conservation standard that are in 

accordance with 42 U.S.C. 6295(o). 

(Although States were not signatories to 

the Consensus Agreement, they did not 

express any opposition to it.) DOE has 

encouraged the submission of consensus 

agreements as a way to bring diverse 


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31928 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

11EIA approves the use of the name ‘‘NEMS’’ to 

describe only an AEO version of the model without 

any modification to code or data. Because the 

present analysis entails some minor code 

modifications and runs the model under various 

policy scenarios that deviate from AEO 

assumptions, the name ‘‘NEMS–BT’’ refers to the 

model as used here. (BT stands for DOE’s Building 

Technologies Program.) 

12For more information, please visit 

www.energystar.gov. 

13For more information, please visit 

www.cee1.org. 

interested parties together, to develop 

an independent and probative analysis 

useful in DOE standard setting, and to 

expedite the rulemaking process. DOE 

also believes that standard levels 

recommended in the Consensus 

Agreement may increase the likelihood 

for regulatory compliance, while 

decreasing the risk of litigation. 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 

6295(o)(2)(B)(iii), EPCA creates a 

rebuttable presumption that an energy 

conservation standard is economically 

justified if the additional cost to the 

consumer of a product that meets the 

standard is less than three times the 

value of the first year’s energy savings 

resulting from the standard, as 

calculated under the applicable DOE 

test procedure. DOE’s LCC and PBP 

analyses generate values used to 

calculate the effect potential amended 

energy conservation standards would 

have on the payback period for 

consumers. These analyses include, but 

are not limited to, the 3-year payback 

period contemplated under the 

rebuttable-presumption test. In addition, 

DOE routinely conducts an economic 

analysis that considers the full range of 

impacts to consumers, manufacturers, 

the nation, and the environment, as 

required under 42 U.S.C. 

6295(o)(2)(B)(i). The results of this 

analysis serve as the basis for DOE’s 

evaluation of the economic justification 

for a potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). The rebuttable 

presumption payback calculation is 

discussed in section IV.F.11 of this 

direct final rule and chapter 8 of the 

direct final rule TSD. 

IV. Methodology and Discussion 

DOE used two spreadsheet tools to 

estimate the impact of today’s direct 

final rule. The first spreadsheet 

calculates LCCs and PBPs of potential 

new energy conservation standards. The 

second provides shipments forecasts 

and then calculates impacts of potential 

energy conservation standards on 

national energy savings and net present 

value. The two spreadsheets are 

available online at: http:// 

www1.eere.energy.gov/buildings/ 

appliance_standards/residential/ 

dishwashers.html. The Department also 

assessed manufacturer impacts, largely 

through use of the Government 

Regulatory Impact Model (GRIM). 

Additionally, DOE estimated the 

impacts on utilities and the 

environment of energy conservation 

standards for residential dishwashers. 

DOE used a version of EIA’s National 

Energy Modeling System (NEMS) for the 

utility and environmental analyses. The 

NEMS model simulates the energy 

sector of the U.S. economy. EIA uses 

NEMS to prepare its Annual Energy 

Outlook, a widely known baseline 

energy forecast for the United States. 

For more information on NEMS, refer to 

The National Energy Modeling System: 

An Overview, DOE/EIA–0581 (98) 

(Feb.1998), available at: http:// 

tonto.eia.doe.gov/FTPROOT/ 

forecasting/058198.pdf. 

The version of NEMS used for 

appliance standards analysis, which 

makes minor modifications to the AEO 

version, is called NEMS–BT.11 NEMS– 

BT offers a sophisticated picture of the 

effect of standards, because it accounts 

for the interactions among the various 

energy supply and demand sectors and 

the economy as a whole. 

A. Market and Technology Assessment 

1. General 

When beginning an energy 

conservation standards rulemaking, 

DOE develops information that provides 

an overall picture of the market for the 

products concerned, including the 

purpose of the products, the industry 

structure, and market characteristics. 

This activity includes both quantitative 

and qualitative assessments based 

primarily on publicly available 

information. The subjects addressed in 

the market and technology assessment 

for this rulemaking include products 

covered by the rulemaking, quantities 

and types of products sold and offered 

for sale, retail market trends, product 

classes and manufacturers, regulatory 

and non-regulatory programs, and 

technology options that could improve 

the energy efficiency of the product(s) 

under examination. See chapter 3 of the 

direct final rule TSD for further 

discussion of the market and technology 

assessment. 

2. Products Included in This 

Rulemaking 

DOE defines ‘‘dishwasher’’ under 

EPCA as ‘‘a cabinet-like appliance 

which with the aid of water and 

detergent, washes, rinses, and dries 

(when a drying process is included) 

dishware, glassware, eating utensils, 

and most cooking utensils by chemical, 

mechanical and/or electrical means and 

discharges to the plumbing drainage 

system.’’ (10 CFR 430.2) DOE considers 

this definition to encompass built-in, 

portable, and countertop dishwashers. 

3. Product Classes 

Existing energy conservation 

standards divide residential 

dishwashers into two product classes 

based on capacity: (1) Standard; and (2) 

compact. As mentioned previously in 

section III.A, DOE is maintaining these 

product classes for this rulemaking. 

4. Non-Regulatory Programs 

As part of the market and technology 

assessment, DOE reviews non-regulatory 

programs promoting energy efficient 

residential appliances in the United 

States. Non-regulatory programs that 

DOE considers in its market and 

technology assessment include ENERGY 

STAR and the Consortium for Energy 

Efficiency (CEE) Super-Efficient Home 

Appliance Initiative (SEHA). 

ENERGY STAR is a voluntary labeling 

program administered jointly by the 

U.S. Environmental Protection Agency 

(EPA) and DOE. ENERGY STAR 

identifies energy efficient products 

through a qualification process.12 To 

qualify, a product must exceed Federal 

minimum standards by a specified 

amount, or if no Federal standard exists, 

a product must exhibit select energysaving features. ENERGY STAR 

specifications currently exist for 

residential dishwashers. 

The CEE SEHA program develops 

initiatives for its North American 

members to promote the manufacture 

and purchase of energy efficient 

products and services.13 The program 

establishes efficiency tiers beyond the 

DOE energy conservation standards and 

the ENERGY STAR specifications. 

Currently, CEE has set two efficiency 

tiers above the ENERGY STAR 

specification for standard dishwashers, 

and one efficiency tier above the 

ENERGY STAR specification for 

compact dishwashers. 

5. Technology Options 

As part of the market and technology 

assessment, DOE developed a list of 

technologies to consider for improving 

the efficiency of residential 

dishwashers, as shown in Table IV.1. 

These technologies encompass all those 

DOE believes would improve energy 

efficiency and are technologically 

feasible, most of which were identified 

for the November 2007 ANOPR. 72 FR 


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64432, 64451 (Nov. 15, 2007). In 

addition to those technology options 

identified in the November 2007 

ANOPR, DOE also considered the use of 

control strategies to decrease energy and 

water consumption. This technology 

option is a change in the product’s 

operation. For instance, a manufacturer 

may lower the temperature of a wash or 

rinse cycle to decrease the amount of 

internal water heating required. Often, 

decreases in water temperatures or 

water use are combined with longer 

cycles to limit the impact on wash 

performance. 

TABLE IV.1—INITIAL TECHNOLOGY OPTIONS FOR RESIDENTIAL DISHWASHERS

1. Condenser drying. 

2. Control Strategies. 

3. Fan/jet drying. 

4. Flow-through heating. 

5. Improved fill control. 

6. Improved food filter. 

7. Improved motor efficiency. 

8. Improved spray-arm geometry. 

9. Increased insulation. 

10. Low-standby-loss electronic controls. 

11. Microprocessor controls and fuzzy logic, 

including adaptive or soil-sensing controls. 

12. Modified sump geometry, with and without dual pumps. 

13. Reduced inlet-water temperature. 

14. Supercritical carbon dioxide washing. 

15. Ultrasonic washing. 

16. Variable washing pressures and flow 

rates. 

B. Screening Analysis 

DOE uses the following four screening 

criteria to determine which technology 

options are suitable for further 

consideration. 

(1) Technological feasibility. DOE will 

consider technologies incorporated in 

commercial products or in working 

prototypes to be technologically 

feasible. (The technological feasibility of 

options was discussed in the preceding 

section as part of the market and 

technology assessment.) 

(2) Practicability to manufacture, 

install, and service. If mass production 

and reliable installation and servicing of 

a technology in commercial products 

could be achieved on the scale 

necessary to serve the relevant market at 

the time the standard comes into effect, 

then DOE will consider that technology 

practicable to manufacture, install, and 

service. 

(3) Adverse impacts on product utility 

or product availability. If DOE 

determines a technology would have 

significant adverse impact on the utility 

of the product to significant subgroups 

of consumers, or would result in the 

unavailability of any covered product 

type with performance characteristics 

(including reliability), features, sizes, 

capacities, and volumes that are 

substantially the same as products 

generally available in the United States 

at the time, it will not consider this 

technology further. 

(4) Adverse impacts on health or 

safety. If DOE determines that a 

technology will have significant adverse 

impacts on health or safety, it will not 

consider this technology further. 

(10 CFR part 430, subpart C, appendix 

A, (4)(a)(4) and (5)(b)). 

Technologies that pass through the 

screening analysis are referred to as 

‘‘design options’’ in the engineering 

analysis. Details of the screening 

analysis are provided in chapter 4 of the 

direct final rule TSD. 

Based on the preliminary 

determinations made in the November 

2007 ANOPR (72 FR 64432, 64454–55 

(Nov. 15, 2007)), and further analysis of 

the initial technology options, DOE 

retained the design options shown in 

Table IV.2 for its subsequent analyses. 

These remaining design options met all 

of the screening criteria listed above. 

TABLE IV.2—DESIGN OPTIONS

RETAINED FOR ENGINEERING ANALYSIS

1. Condenser drying. 

2. Control Strategies. 

3. Fan/jet drying. 

4. Flow-through heating. 

5. Improved fill control. 

6. Improved food filter. 

7. Improved motor efficiency. 

8. Improved spray-arm geometry. 

9. Increased insulation. 

10. Low-standby-loss electronic controls. 

11. Microprocessor controls and fuzzy logic, 

including adaptive or soil-sensing controls. 

12. Modified sump geometry, with and without dual pumps. 

13. Variable washing pressures and flow 

rates. 

C. Engineering Analysis 

In the engineering analysis, DOE 

evaluates a range of product efficiency 

levels and their associated 

manufacturing costs. The purpose of the 

analysis is to estimate the incremental 

manufacturer production costs (MPCs) 

associated with increasing efficiency 

levels above that of the baseline model 

in each product class. The engineering 

analysis considers technologies not 

eliminated in the screening analysis, 

designated as design options, in 

developing cost-efficiency curves, 

which subsequently are used for the 

LCC and PBP analyses. 

DOE has identified the following 

three methodologies for generating the 

manufacturing costs needed for the 

engineering analysis: (1) The designoption approach, which provides the 

incremental costs of adding to a baseline 

model design options that will improve 

its efficiency; (2) the efficiency-level 

approach, which provides the relative 

costs of achieving increases in energy 

efficiency levels, without regard to the 

particular design options used to 

achieve such increases; and (3) the costassessment (or reverse-engineering) 

approach, which provides ‘‘bottom-up’’ 

manufacturing cost assessments for 

achieving various levels of increased 

efficiency, based on detailed data 

regarding costs for parts and material, 

labor, shipping/packaging, and 

investment for models that operate at 

particular efficiency levels. 

DOE conducted the engineering 

analyses for the standard product class 

in this rulemaking using the efficiencylevel approach, combined with the costassessment approach, to develop a 

manufacturing cost for each efficiency 

level. DOE chose this approach because 

the efficiency levels considered in the 

engineering analysis are attainable using 

technologies currently available on the 

market for residential dishwashers. This 

approach involved physically 

disassembling commercially available 

products, consulting with outside 

experts, reviewing publicly available 

cost and performance information, and 

modeling equipment costs. 

Given the data available for the 

compact product class, DOE used the 

design-option approach to develop the 

cost-efficiency relationship. There are 

very few, disparate platforms (i.e., 

countertop units and dishdrawers) 

available on the market for this product 

class. Therefore, DOE developed the 

cost-efficiency relationship by 

estimating the incremental costs of 

adding specific design options to a 

baseline model that would provide 

sufficient improvement in efficiency to 

achieve the higher efficiency levels 

considered for the analysis. DOE 

weighted the costs at each efficiency 

level by market share of each platform. 

To provide interested parties with 

additional information about DOE’s 

assumptions and results and the ability 

to perform independent analyses for 

verification, DOE associated each 

efficiency level with specific 

technologies that manufacturers might 

use. Chapter 5 of the direct final rule 

TSD describes the methodology and 

results of the efficiency level analysis 

used to derive the cost-efficiency 

relationships. 

1. Baseline Efficiency Levels 

The baseline efficiency levels for both 

the standard and compact product 

classes are based on the current DOE 


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31930 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

energy conservation standards for 

annual energy use and per-cycle water 

consumption. These standards took 

effect for residential dishwashers 

manufactured on or after January 1, 

2010. (42 U.S.C. 6295 (g)(10)) Table IV.3 

below shows the baseline efficiency 

level for each residential dishwasher 

product class. 

TABLE IV.3—BASELINE EFFICIENCY LEVELS FOR RESIDENTIAL DISHWASHER ANALYSIS

Product class 

Annual energy 

use 

(kWh/year) 

Per-cycle water 

consumption 

(gallons/cycle) 

Standard .......................................................................................................................................................... 355 6.5 

Compact ........................................................................................................................................................... 260 4.5 

2. Higher Efficiency Levels 

DOE considered efficiency levels 

higher than baseline levels based on 

specifications prescribed by ENERGY 

STAR and CEE’s Super-Efficient HomeAppliances Initiative. The highest 

efficiency levels were defined by the 

maximum available technology that 

DOE could identify on the market. (DOE 

did not identify any working prototypes 

that were more efficient than the 

maximum available technology on the 

market.) Where the increments between 

adjacent efficiency levels were large, 

DOE proposed to add an intermediate 

‘‘gap-fill’’ level. Efficiency Level 2 for 

standard dishwashers and Efficiency 

Level 1 for compact dishwashers 

correspond to the efficiency levels 

proposed in the Consensus Agreement 

discussed in section II.B.2. Table IV.4 

and Table IV.5 show the efficiency 

levels analyzed in today’s direct final 

rule, based on annual energy use and 

per-cycle water consumption. 

TABLE IV.4—EFFICIENCY LEVELS FOR STANDARD RESIDENTIAL DISHWASHER ANALYSIS

Level Efficiency level reference source 

Efficiency level 

Annual energy 

use (kWh/year) 

Per-cycle water 

consumption 

(gal/cycle) 

Baseline ............ DOE Standard ................................................................................................................ 355 6 .5 

EL 1 .................. ENERGY STAR (effective August 11, 2009) ................................................................. 324 5 .8 

EL 2 .................. CEE Tier 1/Consensus Agreement ................................................................................ 307 5 .0 

EL 3 .................. CEE Tier 2/Upcoming ENERGY STAR (effective January 20, 2012) ........................... 295 4 .25 

EL 4 .................. Gap Fill * ......................................................................................................................... 234 3 .8 

EL 5 .................. Maximum Available * ...................................................................................................... 180 1 .6 

* Source: ENERGY STAR-qualified dishwashers as of January 30, 2011. 

TABLE IV.5—EFFICIENCY LEVELS FOR COMPACT RESIDENTIAL DISHWASHER ANALYSIS

Level Efficiency level description Annual energy 

use * (kWh/year) 

Per-cycle water 

consumption 

(gal/cycle) 

Baseline ............ DOE Standard .................................................................................................................. 260 4.5 

EL 1 .................. Consensus Agreement/Upcoming ENERGY STAR (effective January 20, 2012) .......... 222 3.5 

EL 2 .................. Maximum Available * ......................................................................................................... 154 2.1 

* Source: ENERGY STAR-qualified dishwashers as of January 30, 2011. 

3. Proprietary Designs 

In its engineering and economic 

analyses DOE considers all design 

options that are commercially available 

or present in a working prototype, 

including proprietary designs and 

technologies. DOE will consider a 

proprietary design in the subsequent 

analyses only if the achieved efficiency 

level can also be reached using other 

nonproprietary design options. If the 

proprietary design is the only approach 

available to achieve a given efficiency 

level, then DOE will reject that 

efficiency level to avoid impacts on 

competition that would likely result. 

DOE solicited comment on any 

proprietary design options during its 

manufacturer interviews, and although 

manufacturers mentioned several 

technologies that are currently in 

development, these technologies are not 

required to meet the efficiency levels 

considered in this analysis. Therefore, 

DOE believes that all efficiency levels in 

today’s direct final rule can be achieved 

without the use of proprietary designs. 

4. Reverse Engineering 

Based on product teardowns and cost 

modeling, DOE developed overall costefficiency relationships for the standard 

and compact product classes. Table IV.6 

and Table IV.7 show DOE’s estimates of 

incremental manufacturing costs for 

improvement of dishwasher efficiency 

above the baseline. Chapter 5 of the 

direct final rule TSD provides details on 

DOE’s engineering analysis and 

development of the cost-efficiency 

curves. 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31931 

14U.S. Census, 2002 Business Expenditure 

Survey (BES), Electronics and Appliance Stores 

sectors. 

15The water heater temperature rise of 70 °F 

assumes an average water heater inlet temperature 

of 50 °F, as specified as the national average in the 

dishwasher test procedure. 

16The recovery efficiency indicates how efficient 

a water heater is at heating water. The DOE test 

procedure for dishwashers specifies a recovery 

efficiency of 0.75 for gas-fired water heating, which 

is representative of gas water heaters currently in 

the housing stock. 

17The one-hour cycle time is an estimate of the 

typical cycle time for a dishwasher. Actual cycle 

times vary based on wash selection, load, and 

model of dishwasher. 

TABLE IV.6—COST-EFFICIENCY RELATIONSHIP FOR STANDARD RESIDENTIAL DISHWASHERS

Efficiency level 

Annual energy 

use 

(kWh/year) 

Per-cycle water 

consumption 

(gal/cycle) 

Incremental manufacturing cost 

(2010$) ($/kWh/yr) ($/gal/cycle) 

Baseline ......................................................... 355 6 .5 

EL 1 ................................................................ 324 5 .8 18.27 0.59 26.10 

EL 2 ................................................................ 307 5 .0 31.82 0.66 21.21 

EL 3 ................................................................ 295 4 .25 69.23 1.15 30.77 

EL 4 ................................................................ 234 3 .8 75.18 0.62 27.85 

EL 5 ................................................................ 180 1 .6 82.95 0.47 16.93 

TABLE IV.7—COST-EFFICIENCY RELATIONSHIP FOR COMPACT RESIDENTIAL DISHWASHERS

Efficiency level 

Annual energy 

use 

(kWh/year) 

Per-cycle water 

consumption 

(gal/cycle) 

Incremental manufacturing cost 

(2010$) ($/kWh/yr) ($/gal/cycle) 

Baseline ........................................................... 260 4.5 

EL 1 .................................................................. 222 3.5 1.00 0.03 1.00 

EL 2 .................................................................. 154 2.1 12.11 0.11 5.05 

D. Markups Analysis 

The markups analysis develops 

appropriate markups in the distribution 

chain to convert the estimates of 

manufacturer cost derived in the 

engineering analysis to consumer prices. 

At each step in the distribution channel, 

companies mark up the price of the 

product to cover business costs and 

profit margin. For dishwashers, the 

main parties in the distribution chain 

are manufacturers and retailers. 

DOE developed an average 

manufacturer markup by examining the 

annual Securities and Exchange 

Commission (SEC) 10–K reports filed by 

publicly traded manufacturers primarily 

engaged in appliance manufacturing 

and whose combined product range 

includes residential dishwashers. 

For retailers, DOE developed separate 

markups for baseline products (baseline 

markups) and for the incremental cost of 

more efficient products (incremental 

markups). Incremental markups are 

coefficients that relate the change in the 

manufacturer sales price of higherefficiency models to the change in the 

retailer sales price. DOE relied on 

economic data from the U.S. Census 

Bureau to estimate average baseline and 

incremental markups.14

Chapter 6 of the direct final rule TSD 

provides details on DOE’s development 

of markups for dishwashers. 

E. Energy and Water Use Analysis 

DOE’s energy and water use analysis 

estimated the range of energy and water 

use of dishwashers in the field, i.e., as 

they are actually used by consumers. 

The energy and water use analysis 

provided the basis for other analyses 

DOE performed, particularly 

assessments of the energy and water 

savings and the savings in consumer 

operating costs that could result from 

DOE’s adoption of amended standards. 

DOE determined a range of annual 

energy and per-cycle water 

consumption of dishwashers by 

multiplying the per-cycle energy use 

and per-cycle water use of each 

considered design by the number of 

cycles per year in a representative 

sample of U.S. households. 

DOE estimated the per-cycle energy 

use by subtracting the annual energy use 

associated with standby power from the 

total annual energy use and dividing the 

result by the national average number of 

dishwasher cycles per year. DOE used 

data provided by AHAM on the total 

annual dishwasher energy use and the 

standby power use for each considered 

efficiency level. 

DOE analyzed per-cycle energy 

consumption based on two components: 

(1) Water-heating energy, and (2) 

machine (motor) and drying energy. The 

largest component of dishwasher energy 

consumption is water-heating energy 

use, which is the energy required to heat 

the inlet water to the temperature for 

dishwashing. The machine energy 

consists of the motor energy (for water 

pumping and food disposal) and drying 

energy consists of energy to dry cleaned 

dishes. 

DOE estimated the per-cycle waterheating energy consumption based on 

DOE’s dishwasher test procedure 

(which refers to this quantity as ‘‘water 

energy consumption’’). DOE estimated 

this energy consumption for 

dishwashers that operate with a 

nominal inlet water temperature of 120 

°F, the most common situation in U.S. 

homes. For a dishwasher using 

electrically heated water, the water 

energy consumption, expressed in kWh 

per cycle, is equal to the water 

consumption per cycle times a nominal 

water heater temperature rise of 70 °F 

times the specific heat of water (0.0024 

kWh per gallon per °F).15 For a 

dishwasher using gas-heated or oilheated water, the calculation is the 

same, but also incorporates a nominal 

water heater recovery efficiency of 

0.75.16

The per-cycle machine and drying 

energy was determined by subtracting 

the per-cycle water-heating energy 

consumption from the per-cycle total 

energy consumption. 

DOE determined the standby annual 

energy consumption by multiplying the 

energy use in standby mode per hour by 

the hours the dishwasher is in standby 

mode, which is the difference between 

the number of hours in a year and the 

active hours, which is equal to the 

number of dishwasher cycles per year 

multiplied by cycle time, which is 

estimated to be one hour.17

DOE estimated the per-cycle water 

use by efficiency level in its engineering 

analysis, as described in chapter 5 of the 

direct final rule TSD. 


srobinson on DSK4SPTVN1PROD with RULES2
31932 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

18For information on RECS, see www.eia.doe.gov/ 

emeu/recs/. 

19Available at: http://www1.eere.energy.gov/ 

buildings/appliance_standards/residential/pdfs/ 

survey_data.pdf. 

20 68 FR 51887 (August 29, 2003). The 215 value 

was based on the review’s recommendation that the 

number of average-use cycles per year be reduced 

into the range of 200 to 233 cycles. 

To estimate the number of cycles per 

year in a representative sample of U.S. 

households, DOE analyzed data from 

the Energy Information Administration 

(EIA)’s 2005 Residential Energy 

Consumption Survey (RECS), which 

was the most recent such survey 

available at the time of DOE’s analysis.18

RECS is a national sample survey of 

housing units that collects statistical 

information on the consumption of and 

expenditures for energy in housing units 

along with data on energy-related 

characteristics of the housing units and 

occupants. Of the more than 4,800 

households in RECS, almost 2,500 have 

dishwashers. For each household using 

a dishwasher, RECS provides data on 

the number of dishwasher cycles in the 

following bins: (1) Less than once per 

week, (2) once per week, (3) 2–3 times 

per week, (4) 4–6 times per week, (5) at 

least once per day. DOE converted the 

above to annual values and created a 

triangular or uniform distribution for 

each bin. DOE randomly assigned a 

specific numerical value from within 

the appropriate bin to each household 

in the dishwasher sample. The average 

number of cycles per year derived from 

the RECS 2005 data is 174. 

DOE also analyzed a review of survey 

data 19 to estimate the average number of 

dishwasher cycles per year. In the 

review, survey data on consumers’ 

dishwasher usage habits were collected 

from a number of sources including 

several dishwasher manufacturers, 

detergent manufacturers, energy and 

consumer interest groups, independent 

researchers, and government agencies. 

These data were also used to develop 

the 2003 dishwasher test procedure 

amendments, which included a 

reduction in the average cycles per year 

from 264 to 215.20 Because the survey 

data are more comprehensive than the 

RECS data, for today’s rule DOE chose 

an average usage of 215 cycles per year 

as the most representative value for 

average dishwasher use. 

To estimate the annual number of 

cycles for each RECS household in the 

dishwasher sample, DOE multiplied the 

specific value derived from RECS by the 

ratio of 215 cycles to 174 cycles (the 

RECS average). The resulting range of 

values used in the LCC analysis is 

consistent with the average use in the 

DOE dishwasher test procedure. 

Table IV.8 shows the estimated 

average annual energy and water use for 

each efficiency level analyzed for 

standard dishwashers. 

TABLE IV.8—STANDARD DISHWASHERS: AVERAGE ANNUAL ENERGY AND WATER USE BY EFFICIENCY LEVEL

Efficiency level 

Annual energy use Annual water use 

Water heating * Machine + drying Standby † Total 

gal/year 

kWh/year kWh/year kWh/year kWh/year 

Baseline ........................................................... 234.8 120.2 0.0 355 1,398 

1 ....................................................................... 209.5 94.8 19.7 324 1,247 

2 ....................................................................... 180.6 111.9 14.5 307 1,075 

3 ....................................................................... 153.5 127.0 14.5 295 914 

4 ....................................................................... 137.3 82.2 14.5 234 817 

5 ....................................................................... 57.8 107.7 14.5 180 344 

* Shown for the case of electrically heated water. 

† Standby annual energy use based on a dishwasher cycle length of one hour. 

Standby hours = 8,760 hours ¥ (215 cycles × 1 hour) = 8,545 hours. 

TABLE IV.9—COMPACT DISHWASHERS: AVERAGE ANNUAL ENERGY AND WATER USE BY EFFICIENCY LEVEL

Efficiency level 

Annual energy use Annual water use 

Water heating * Machine + drying Standby † Total 

gal/year 

kWh/year kWh/year kWh/year kWh/year 

Baseline ........................................................... 162.5 77.8 19.7 260 968 

1 ....................................................................... 126.4 75.9 19.7 222 753 

2 ....................................................................... 75.9 63.6 14.5 154 452 

* Shown for the case of electrically heated water. 

† Standby annual energy use based on a dishwasher cycle length of one hour. 

Standby hours = 8,760 hours ¥ (215 cycles × 1 hour) = 8,545 hours. 

Chapter 7 of the direct final rule TSD 

provides details on DOE’s energy and 

water use analysis for dishwashers. 

F. Life-Cycle Cost and Payback Period 

Analysis 

DOE conducted LCC and PBP 

analyses to evaluate the economic 

impacts on individual consumers of 

potential energy conservation standards 

for dishwashers. The LCC is the total 

consumer expense over the life of a 

product, consisting of purchase and 

installation costs plus operating costs 

(expenses for energy use, maintenance, 

and repair). To compute the operating 

costs, DOE discounts future operating 

costs to the time of purchase and sums 

them over the lifetime of the product. 

The PBP is the estimated amount of 

time (in years) it takes consumers to 

recover the increased purchase cost 

(including installation) of a more 

efficient product through lower 

operating costs. DOE calculates the PBP 

by dividing the change in purchase cost 

(normally higher) due to a more 

stringent standard by the change in 

average annual operating cost (normally 

lower) that results from the standard. 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31933 

21Newell, R.G., 2000. Incorporation of 

Technological Learning into NEMS Buildings 

Modules. U.S. Department of Energy, Energy 

Information Administration, Washington, DC. 

For any given efficiency level, DOE 

measures the PBP and the change in 

LCC relative to an estimate of the basecase appliance efficiency levels. The 

base-case estimate reflects the market in 

the absence of new or amended energy 

conservation standards, including the 

market for products that exceed the 

current energy conservation standards. 

For each considered efficiency level 

in each product class, DOE calculated 

the LCC and PBP for a nationally 

representative set of housing units. For 

the analysis for today’s rule, DOE 

developed household samples from the 

2005 RECS. For each sample household, 

DOE determined the energy 

consumption for the dishwasher and the 

appropriate electricity price. By 

developing a representative sample of 

households, the analysis captured the 

variability in energy consumption and 

energy prices associated with the use of 

residential dishwashers. 

Inputs to the calculation of total 

installed cost include the cost of the 

product—which includes manufacturer 

costs, manufacturer markups, retailer 

and distributor markups, and sales 

taxes—and installation costs. Inputs to 

the calculation of operating expenses 

include annual energy consumption, 

energy and water prices and price 

projections, repair and maintenance 

costs, product lifetimes, discount rates, 

and the year that compliance with 

standards is required. DOE created 

distributions of values for product 

lifetime, discount rates, and sales taxes, 

with probabilities attached to each 

value, to account for their uncertainty 

and variability. 

The computer model DOE uses to 

calculate the LCC and PBP, which 

incorporates Crystal Ball (a 

commercially available software 

program), relies on a Monte Carlo 

simulation to incorporate uncertainty 

and variability into the analysis. The 

Monte Carlo simulations randomly 

sample input values from the 

probability distributions and 

dishwasher user samples. The model 

calculated the LCC and PBP for 

products at each efficiency level for 

10,000 housing units per simulation 

run. 

Table IV.10 summarizes the approach 

and data DOE used to derive inputs to 

the LCC and PBP calculations. The 

subsections that follow provide further 

discussion. Details of the spreadsheet 

model, and of all the inputs to the LCC 

and PBP analyses, are contained in 

chapter 8 and its appendices of the 

direct final rule TSD (see Table 8.1.1 for 

a summary of inputs). 

TABLE IV.10—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS * 

Inputs Source/method 

Product Cost ....................................................... Derived by multiplying manufacturer cost by manufacturer and retailer markups and sales tax, 

as appropriate. Used historical data to derive a price scaling index to forecast product costs. 

Installation Costs ................................................ Baseline installation cost determined with data from RS Means. Assumed no change with efficiency level. 

Annual Energy and Water Use ........................... The sum of the total per-cycle annual energy and water use multiplied by the number of cycles 

per year and the standby annual energy use. Average number of cycles based on ADL field 

data. 

Variability: Based on the 2005 RECS normalized to the average number of cycles. 

Energy and Water Prices ................................... Electricity: Based on EIA’s Form 861 data for 2010. 

Variability: Regional energy prices determined for 13 regions. 

Water: Based on 2010 AWWA/Raftelis Survey. 

Variability: By census region. 

Energy and Water Price Trends ......................... Energy: Forecasted using Annual Energy Outlook 2011 (AEO2011) price forecasts. 

Water: Forecasted using BLS historic water price index information. 

Repair and Maintenance Costs .......................... Assumed no change with efficiency level. 

Product Lifetime .................................................. Estimated using survey results from RECS (1990, 1993, 1997, 2001, 2005) and the U.S. Census American Housing Survey (2005, 2007), along with historic data on appliance shipments. 

Variability: Characterized using Weibull probability distributions. 

Discount Rates ................................................... Approach involves identifying all possible debt or asset classes that might be used to purchase the considered appliances, or might be affected indirectly. Primary data source was 

the Federal Reserve Board’s SCF ** for 1989, 1992, 1995, 1998, 2001, 2004 and 2007. 

Compliance Date ................................................ 2018.† 

* References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the direct final rule 

TSD. 

** Survey of Consumer Finances. 

† For TSL 2, DOE used 2013 as the compliance date. 

1. Product Cost 

To calculate consumer product costs, 

DOE multiplied the manufacturer 

selling prices developed in the 

engineering analysis by the supplychain markups described above (along 

with sales taxes). DOE used different 

markups for baseline products and 

higher-efficiency products, because DOE 

applies an incremental markup to the 

increase in MSP associated with higherefficiency products. 

Examination of historical price data 

for a number of appliances that have 

been subject to energy conservation 

standards indicates that an assumption 

of constant real prices and costs may 

overestimate long-term trends in 

appliance prices. Economic literature 

and historical data suggest that the real 

costs of these products may in fact trend 

downward over time according to 

‘‘learning’’ or ‘‘experience’’ curves. 

Experience curve analysis focuses on 

entire industries (often operating 

globally) and aggregates over many 

causal factors that may not be well 

characterized. Experience curve analysis 

implicitly includes factors such as 

efficiencies in labor, capital investment, 

automation, materials prices, 

distribution, and economies of scale at 

an industry-wide level.21 Since market 

competition is very effective, learning in 

one plant or firm rapidly diffuses to 

other firms as well, leading to industrywide effects. 


srobinson on DSK4SPTVN1PROD with RULES2
31934 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

22Available at: www.eia.doe.gov/cneaf/electricity/ 

page/eia861.html. 

23Available at: http://www.eia.gov/oil_gas/ 

natural_gas/data_publications/ 

natural_gas_monthly/ngm.html. 

24U.S. Energy Information Administration. 

Annual Energy Outlook 2011. Washington, DC. 

April 2011. 

On February 22, 2011, DOE published 

a Notice of Data Availability (NODA, 76 

FR 9696) stating that DOE may consider 

improving regulatory analysis by 

addressing equipment price trends. In 

the NODA, DOE proposed that when 

sufficiently long-term data are available 

on the cost or price trends for a given 

product, it would analyze the available 

data to forecast future trends. 

Many commenters were supportive of 

DOE moving from an assumption-based 

equipment price trend forecasting 

method to a data-driven methodology 

for forecasting price trends. Other 

commenters were skeptical that DOE 

could accurately forecast price trends 

given the many variables and factors 

that can complicate both the estimation 

and the interpretation of the numerical 

price trend results and the relationship 

between price and cost. DOE evaluated 

the concerns expressed about its 

proposed approach for incorporating 

experience in its forecasts of product 

prices and determined that retaining an 

assumption-based approach of a 

constant real price trend was not 

consistent with the historical data for 

residential dishwashers. Therefore, DOE 

developed a range of potential price 

trends that was consistent with the 

available data. 

For the default price trend for this 

final rule, DOE estimated an experience 

rate for residential dishwashers based 

on an analysis of long-term historical 

data. DOE derived a dishwasher price 

index from 1988 to 2010 using Producer 

Price Index (PPI) data for miscellaneous 

household appliances from the Bureau 

of Labor Statistics’ (BLS). (PPI data 

specific to residential dishwashers were 

not available.) An inflation-adjusted 

price index was calculated using the 

GDP price deflator for the same years. 

This proxy for historic price data was 

then regressed on the quantity of 

dishwashers produced, based on a 

corresponding series for total shipments 

of dishwashers. 

To calculate an experience rate, a 

least-squares power-law fit was 

performed on the dishwasher price 

index versus cumulative shipments 

(including imports). DOE then derived a 

price factor index, with the price in 

2010 equal to 1, to forecast prices in the 

year of compliance for amended energy 

conservation standards in the LCC and 

PBP analysis, and for the NIA, for each 

subsequent year through 2047. The 

index value in each year is a function 

of the experience rate and the 

cumulative production through that 

year. To derive the latter, DOE used 

projected shipments from the base case 

projections made for the NIA (see 

section IV.G.1 of this notice). The 

average annual rate of price decline in 

the default case is 1.27 percent. By 

2047, which is the end date of the 

forecast period, the price is forecasted to 

drop 38 percent relative to 2010. For the 

baseline model, the average price 

decreases from $630 in 2010 to $392 in 

2047 (values given in 2010$). DOE’s 

forecast of product prices for 

dishwashers is described in further 

detail in appendix 8–E of the direct final 

rule TSD. 

For the NIA, DOE also considered 

several alternative price trends as 

sensitivity cases (see section IV.G.3 for 

a description). In recognition of the 

uncertainty regarding estimation of 

future product price trends, DOE will 

continue to review the relevant 

literature and seek to continually 

improve and refine its methodology 

through research, enhancements to its 

models and by seeking public input. 

DOE will also work to ensure the 

robustness of its data sets as a means to 

ensure the reliability of its projections. 

2. Installation Cost 

Installation cost includes labor, 

overhead, and any miscellaneous 

materials and parts needed to install the 

product. DOE used data from the 2010 

RS Means Plumbing Cost data book to 

estimate the baseline installation cost. 

DOE found no evidence that installation 

costs would be impacted with increased 

efficiency levels. 

3. Annual Energy Consumption 

For each sampled household, DOE 

determined the energy consumption for 

a dishwasher at different efficiency 

levels using the approach described 

above in section IV.E. 

4. Energy Prices 

DOE derived average annual energy 

prices for 13 geographic areas consisting 

of the nine U.S. Census divisions, with 

four large states (New York, Florida, 

Texas, and California) treated 

separately. For Census divisions 

containing one of those large states, 

DOE calculated the regional average 

excluding the data for the large state. 

DOE calculated average residential 

electricity prices for each of the 13 

geographic areas using data from EIA’s 

Form EIA–861 database (based on 

‘‘Annual Electric Power Industry 

Report’’).22 DOE calculated an average 

annual regional residential price by: (1) 

Estimating an average residential price 

for each utility (by dividing the 

residential revenues by residential 

sales); and (2) weighting each utility by 

the number of residential consumers it 

served in that region. The final rule 

analysis used the data for 2009, the most 

recent data available. 

DOE calculated average residential 

natural gas prices for each of the 13 

geographic areas using data from EIA’s 

‘‘Natural Gas Monthly.’’ 23 DOE 

calculated average annual regional 

residential prices by: (1) Estimating an 

average residential price for each State; 

and (2) weighting each State by the 

number of residential consumers. The 

direct final rule analysis used the data 

for 2010. 

5. Energy Price Projections 

To estimate energy prices in future 

years, DOE multiplied the average 

regional energy prices discussed in the 

preceding section by the forecast of 

annual average residential energy price 

changes in the Reference case from 

AEO2011, which has an end year of 

2035.24 To estimate price trends after 

2035, DOE used the average annual rate 

of change in prices from 2020 to 2035. 

6. Water and Wastewater Prices 

For today’s direct final rule, DOE 

obtained data on water and wastewater 

prices for 2010 from the Water and 

Wastewater Rate Survey conducted by 

Raftelis Financial Consultants and the 

water utility association, AWWA. The 

survey, which analyzes each industry 

separately, covers approximately 308 

water utilities and 228 wastewater 

utilities. The water survey includes, for 

each utility, the cost to consumers of 

purchasing a given volume of water or 

treating a given volume of wastewater. 

The data provide a division of the total 

consumer cost into fixed and volumetric 

charges. DOE’s calculations use only the 

volumetric charge to calculate water and 

wastewater prices, because only this 

charge is affected by a change in water 

use. Average water and wastewater 

prices were estimated for each of four 

census regions. Each RECS household 

was assigned a water and wastewater 

price depending on its census region 

location. 

DOE also used price information for 

households that use well water and a 

septic tank from the National Ground 

Water Association, as well as national 

cost data on residential septic systems 

from the National Onsite Wastewater 

Recycling Association (NOWRA). 

Chapter 8 of the direct final rule TSD 

provides more detail about DOE’s 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31935 

25NPD Group, Inc. offers marketing research 

services, industry tracking, data collection, and 

analysis. For more information, please visit: 

www.npdgroup.com. 

approach to developing water and 

wastewater prices. 

7. Maintenance and Repair Costs 

Repair costs are associated with 

repairing or replacing components that 

have failed in an appliance; 

maintenance costs are associated with 

maintaining the operation of the 

product. Typically, small incremental 

increases in product efficiency produce 

no, or only minor, changes in repair and 

maintenance costs compared to baseline 

efficiency products. 

DOE requested information from 

manufacturers during interviews as to 

whether maintenance and repair costs 

are a function of efficiency level and 

product class. Manufacturers responded 

that these costs would not increase with 

efficiency. Therefore, DOE did not 

assume that more efficient dishwashers 

would have greater repair or 

maintenance costs. 

8. Product Lifetime 

Because the lifetime of appliances 

varies depending on utilization and 

other factors, DOE develops a 

distribution of lifetimes from which 

specific values are assigned to the 

appliances in the samples. DOE 

conducted an analysis of residential 

dishwasher lifetimes in the field based 

on a combination of shipments data and 

RECS 2005 data on the ages of the 

dishwashers reported in the household 

stock. As described in chapter 8 of the 

direct final rue TSD, the analysis 

yielded an estimate of mean age for 

residential dishwashers of 

approximately 15 years. It also yielded 

a survival function that DOE 

incorporated as a probability 

distribution in its LCC analysis. See 

chapter 8 of the direct final rule TSD for 

further details on the method and 

sources DOE used to develop product 

lifetimes. 

9. Discount Rates 

In the calculation of LCC, DOE 

applies discount rates appropriate to 

households to estimate the present 

value of future operating costs. DOE 

estimated a distribution of residential 

discount rates for dishwashers based on 

consumer financing costs and 

opportunity cost of any uses of their 

funds, including investments in moreefficient appliances. 

To establish residential discount rates 

for the LCC analysis, DOE identified all 

debt or asset classes that might be used 

to purchase dishwashers, including 

household assets that might be affected 

indirectly. It estimated the average 

percentage shares of the various debt or 

asset classes for the average U.S. 

household using data from the Federal 

Reserve Board’s Survey of Consumer 

Finances (SCF) for 1989, 1992, 1995, 

1998, 2001, 2004, and 2007. Using the 

SCF and other sources, DOE then 

developed a distribution of rates for 

each type of debt and asset to represent 

the rates that may apply in the year in 

which amended standards would take 

effect. DOE assigned each sample 

household a specific discount rate 

drawn from one of the distributions. 

The average rate across all types of 

household debt and equity, weighted by 

the shares of each class, is 5.1 percent. 

DOE used the same approach for today’s 

direct final rule. See chapter 8 in the 

direct final rule TSD for further details 

on the development of consumer 

discount rates. 

10. Compliance Date of Amended 

Standards 

In the context of EPCA, the 

compliance date is the future date when 

parties subject to the requirements of a 

new or amended standard must comply. 

EPCA, as amended by EISA 2007, 

requires that DOE publish a final rule no 

later than January 1, 2015, to determine 

whether to amend the standards in 

effect for dishwashers manufactured on 

or after January 1, 2018. (42 U.S.C. 

6295(g)(10)(B)) Where appropriate, DOE 

calculated the LCC and PBP for 

dishwashers as if consumers would 

purchase new products in 2018. As 

discussed in section II.B.2, TSL 2, 

which corresponds to the Consensus 

Agreement level for standard 

dishwashers, has a compliance date of 

2013. Thus, for TSL 2, DOE used 2013 

as the compliance year. 

11. Base-Case Efficiency Distribution 

To accurately estimate the share of 

consumers that would be affected by a 

standard at a particular efficiency level, 

DOE’s LCC analysis considered the 

projected distribution of product 

efficiencies that consumers purchase 

under the base case (i.e., the case 

without new energy efficiency 

standards). DOE refers to this 

distribution of product of efficiencies as 

a base-case efficiency distribution. 

To estimate the base-case efficiency 

distribution of standard-sized 

dishwashers for 2013 and 2018, DOE 

relied on data submitted by AHAM for 

the current rulemaking. These data 

provide shares of shipments by 

efficiency level for 2002–2005 and 

2008–2010. These data show significant 

increase in the share of ENERGY STAR 

products in both periods. To predict the 

market shares for each efficiency level 

in 2013 and 2018, DOE considered the 

shares and market trends present in the 

AHAM data and assumed these trends 

would continue in a manner consistent 

with the decline in average energy use. 

For compact dishwashers, AHAM 

data for efficiency distributions were 

not available. Thus, DOE first 

considered 2010 market data from the 

NPD Group, Inc.25 These data show that 

nearly all shipments for both standard 

and compact dishwashers are at the 

baseline efficiency level. For the 

compact class base-case distribution, 

however, there were only two types of 

compact dishwashers in the NPD data 

set: ‘‘countertop’’ and ‘‘portable.’’ DOE 

is not aware of any portable 

dishwashers currently on the market in 

the United States that would be 

classified as compact size based on the 

number of place settings. Further, there 

are no compact dishdrawer platforms 

included in the NPD dataset, which 

DOE believes represent a sizeable 

fraction of compact dishwasher 

shipments. As a result, DOE estimated 

compact base-case efficiencies from its 

research on the number of models 

available at each efficiency level. Of the 

eight compact dishwashers listed in the 

FTC database for manufacturer 

certifications in 2010, four are 

dishdrawer models with similar 

performance. Therefore, DOE allocated 

half of shipments to the dishdrawer 

platform that meets candidate standard 

level (CSL) 2. DOE further estimated, 

based on the number of countertop 

models and underlying platforms 

contained within the CEC and FTC 

databases, that half of remaining 

shipments (25 percent of total compact 

dishwasher shipments) would meet CSL 

1, while the remaining 25 percent of 

compact shipments are at the baseline. 

The estimated shares for the base-case 

efficiency distribution for dishwashers 

are shown in Table IV.11. See chapter 

8 of the direct final rule TSD for further 

information on the derivation of the 

base-case efficiency distributions. For 

standard-sized dishwashers, DOE also 

considered an alternative base-case 

efficiency distribution that uses a 

different set of historical data. This 

distribution is described in appendix 8– 

F of the direct final rule TSD. 


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31936 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

26For the NIA, DOE adjusts the installed cost data 

from the LCC analysis to exclude sales tax, which 

is a transfer. 

27For TSL 2, which assumes a compliance date 

in 2013, DOE forecasted the impacts for products 

sold from 2013 through 2047. 

TABLE IV.11—DISHWASHER BASE-CASE EFFICIENCY DISTRIBUTION BY PRODUCT CLASS IN 2013 

CSL Efficiency level 

(kWh) 

Standard 

(% of shipments) 

Compact 

(% of shipments) 

Baseline ..................................................................................................................... 355 3.8 25.0 

1 ................................................................................................................................. 324 32.3 25.0 

2 ................................................................................................................................. 307 28.0 50.0 

3 ................................................................................................................................. 295 16.4 ..............................

4 ................................................................................................................................. 234 13.8 ..............................

5 ................................................................................................................................. 180 5.6 ..............................

12. Inputs to Payback Period Analysis 

The payback period is the amount of 

time it takes the consumer to recover the 

additional installed cost of more 

efficient products, compared to baseline 

products, through energy cost savings. 

Payback periods are expressed in years. 

Payback periods that exceed the life of 

the product mean that the increased 

total installed cost is not recovered in 

reduced operating expenses. 

The inputs to the PBP calculation are 

the total installed cost of the product to 

the customer for each efficiency level 

and the average annual operating 

expenditures for each efficiency level. 

The PBP calculation uses the same 

inputs as the LCC analysis, except that 

discount rates are not needed. 

13. Rebuttable-Presumption Payback 

Period 

As noted above, EPCA, as amended, 

establishes a rebuttable presumption 

that a standard is economically justified 

if the Secretary finds that the additional 

cost to the consumer of purchasing a 

product complying with an energy 

conservation standard level will be less 

than three times the value of the energy 

(and, as applicable, water) savings 

during the first year that the consumer 

will receive as a result of the standard, 

as calculated under the test procedure 

in place for that standard. (42 U.S.C. 

6295(o)(2)(B)(iii)) For each considered 

efficiency level, DOE determined the 

value of the first year’s energy and water 

savings by calculating the quantity of 

those savings in accordance with the 

applicable DOE test procedure, and 

multiplying that amount by the average 

energy and water price forecast for the 

year in which compliance with the 

amended standard would be required. 

The results of the rebuttable payback 

period analysis are summarized in 

section V.B.1.c of this notice. 

G. National Impact Analysis–National 

Energy Savings and Net Present Value 

Analysis 

The national impact analysis (NIA) 

assesses the national energy savings 

(NES) and the national net present value 

(NPV) of total consumer costs and 

savings that would be expected to result 

from new or amended standards at 

specific efficiency levels. (‘‘Consumer’’ 

in this context refers to consumers of 

the product being regulated.) DOE 

calculates the NES and NPV based on 

projections of annual appliance 

shipments, along with the annual 

energy consumption and total installed 

cost data from the energy use and LCC 

analyses.26 For the present analysis, 

DOE forecasted the energy savings, 

operating cost savings, product costs, 

and NPV of consumer benefits for 

products sold from 2018 through 

2047.27

DOE evaluates the impacts of new and 

amended standards by comparing basecase projections with standards-case 

projections. The base-case projections 

characterize energy use and consumer 

costs for each product class in the 

absence of new or amended energy 

conservation standards. DOE compares 

these projections with projections 

characterizing the market for each 

product class if DOE adopted new or 

amended standards at specific energy 

efficiency levels (i.e., the TSLs or 

standards cases) for that class. For the 

base-case forecast, DOE considers 

historical trends in efficiency and 

various forces that are likely to affect the 

mix of efficiencies over time. For the 

standards cases, DOE also considers 

how a given standard would likely 

affect the market shares of efficiencies 

greater than the standard. 

DOE uses an MS Excel spreadsheet 

model to calculate the energy savings 

and the national consumer costs and 

savings from each TSL. The TSD and 

other documentation that DOE provides 

during the rulemaking help explain the 

models and how to use them, and 

interested parties can review DOE’s 

analyses by changing various input 

quantities within the spreadsheet. The 

NIA spreadsheet model uses typical 

values (as opposed to probability 

distributions) as inputs. 

For the results presented in today’s 

notice, DOE used projections of energy 

prices and housing starts from the 

AEO2011 Reference case. As part of the 

NIA, DOE analyzed scenarios that used 

inputs from the AEO2011 Low 

Economic Growth and High Economic 

Growth cases. Those cases have higher 

and lower energy price trends compared 

to the Reference case, as well as higher 

and lower housing starts, which result 

in higher and lower appliance 

shipments to new homes. NIA results 

based on these cases are presented in 

appendix 10–C of the direct final rule 

TSD. 

Table IV.12 summarizes the inputs 

and methods DOE used for the NIA 

analysis for the direct final rule. 

Discussion of these inputs and methods 

follows the table. See chapter 10 of the 

direct final rule TSD for further details. 

TABLE IV.12—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS

Inputs Method 

Shipments ........................................................... Annual shipments from shipments model. 

Compliance Date of Standard ............................ 2018.* 

Base-Case Forecasted Efficiencies .................... Efficiency distributions are forecasted based on historical efficiency data. 

Standards-Case Forecasted Efficiencies ........... Used a ‘‘roll-up’’ scenario. 

Annual Energy Consumption per Unit ................ Annual weighted-average values are a function of energy use at each CSL. 


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28S. Hymans. Consumer Durable Spending: 

Explanation and Prediction, Brookings Papers on 

Economic Activity, 1971. Vol. 1971, No. 1, pp. 234– 

239. 

TABLE IV.12—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS—Continued 

Inputs Method 

Total Installed Cost per Unit ............................... Annual weighted-average values are a function of cost at each CSL. Incorporates forecast of 

future product prices based on historical data. 

Annual Energy Cost per Unit .............................. Annual weighted-average values as a function of the annual energy consumption per unit and 

energy prices. 

Repair and Maintenance Cost per Unit .............. Annual values do not change with efficiency level. 

Energy Prices ..................................................... AEO2011 forecasts (to 2035) and extrapolation through 2047. 

Energy Site-to-Source Conversion Factor .......... Varies yearly and is generated by NEMS–BT. 

Discount Rate ..................................................... Three and seven percent real. 

Present Year ....................................................... Future expenses discounted to 2012, when the final rule will be published. 

* For TSL 2, the compliance date is 2013. 

1. Shipments 

Forecasts of product shipments are 

needed to calculate the national impacts 

of standards on energy and water use, 

NPV, and future manufacturer cash 

flows. DOE develops shipment forecasts 

based on an analysis of key market 

drivers for residential dishwashers. In 

DOE’s shipments model, shipments of 

products are driven by new construction 

and stock replacements. The shipments 

model takes an accounting approach, 

tracking market shares of each product 

class and the vintage of units in the 

existing stock. Stock accounting uses 

product shipments as inputs to estimate 

the age distribution of in-service 

product stocks for all years. The age 

distribution of in-service product stocks 

is a key input to calculations of both the 

NES and NPV, because operating costs 

for any year depend on the age 

distribution of the stock. DOE also 

considers the impacts on shipments 

from changes in product purchase price 

and operating cost associated with 

higher energy efficiency levels. 

New housing forecasts and market 

saturation data comprised the two 

primary inputs for DOE’s estimates of 

new construction shipments. ‘‘New 

housing’’ includes newly-constructed 

single-family and multi-family units 

(referred to as ‘‘new housing 

completions’’) and mobile home 

placements. For new housing 

completions and mobile home 

placements, DOE used actual data 

through 2008, and adopted the 

projections from AEO2011 for later 

years. 

DOE calibrated the shipments model 

against historical dishwasher 

shipments. In general, DOE estimated 

replacements using a product retirement 

function developed from product 

lifetime. DOE based the retirement 

function on a probability distribution 

for the product lifetime that was 

developed in the LCC analysis. The 

shipments model assumes that no units 

are retired below a minimum product 

lifetime and that all units are retired 

before exceeding a maximum product 

lifetime. 

DOE applied a price elasticity 

parameter to estimate the effect of 

standards on dishwasher shipments. 

DOE estimated the price elasticity 

parameter from a regression analysis 

that used purchase price and efficiency 

data specific to residential clothes 

washers, refrigerators and dishwashers 

during 1980–2002. The estimated 

‘‘relative price elasticity’’ incorporates 

the impacts from purchase price, 

operating cost, and household income. 

Based on evidence that the price 

elasticity of demand is significantly 

different over the short run and long run 

for other consumer goods (i.e., 

automobiles),28 DOE assumed that the 

relative price elasticity declines over 

time. DOE estimated shipments in each 

standards case using the relative price 

elasticity along with the change in the 

relative price between a standards case 

and the base case. 

For details on the shipments analysis, 

see chapter 9 of the direct final rule 

TSD. 

2. Forecasted Efficiency in the Base Case 

and Standards Cases 

A key component of the NIA is the 

trend in energy efficiency forecasted for 

the base case (without new or amended 

standards) and each of the standards 

cases. Section IV.F.11 describes how 

DOE developed a base-case energy 

efficiency distribution (which yields a 

shipment-weighted average efficiency) 

for each of the considered product 

classes for the first year of the forecast 

period. To project the trend in efficiency 

for standard-sized dishwashers over the 

entire forecast period, DOE utilized the 

historical trend in shipment-weighted 

average efficiency from 2002 to 2010 as 

provided by AHAM and considered the 

potential effect of programs such as 

ENERGY STAR. The historical trend 

demonstrates that the shipmentweighted average annual energy use 

decreased by almost 90 kWh from 2002 

to 2010, reaching 309 kWh. DOE fit an 

exponential function to the 2002 to 2010 

data that indicated that the base-case 

shipment-weighted average annual 

energy use will asymptotically approach 

a value of 290 kWh by 2025 and remain 

at that level. For standard-sized 

dishwashers, DOE also considered an 

alternative base-case efficiency trend 

that was estimated using a different set 

of historical data. This trend is 

described in appendix 10–D of the 

direct final rule TSD. 

The historical record suggests that the 

likely market response to new or 

amended standards is that lower 

efficiency baseline models will roll up 

to the standard efficiency level, and 

some products will exceed the 

minimum requirements. To estimate 

efficiency trends in the standards cases, 

DOE has used ‘‘roll-up’’ and/or ‘‘shift’’ 

scenarios in its standards rulemakings. 

Under the ‘‘roll-up’’ scenario, DOE 

assumes: (1) Product efficiencies in the 

base case that do not meet the standard 

level under consideration would ‘‘rollup’’ to meet the new standard level; and 

(2) product efficiencies above the 

standard level under consideration 

would not be affected. Under the ‘‘shift’’ 

scenario, DOE re-orients the distribution 

above the new minimum energy 

conservation standard. 

DOE determined that a roll-up 

scenario is most appropriate to establish 

the distribution of efficiencies for the 

year that compliance with revised 

dishwasher standards would be 

required. For subsequent years, DOE 

assumed that efficiency would continue 

to improve in each standards case at the 

same rate as estimated for the base case, 

until the max-tech efficiency level is 

reached. The details of DOE’s approach 

to forecast efficiency trends are 

described in chapter 10 of the direct 

final rule TSD. 


srobinson on DSK4SPTVN1PROD with RULES2
31938 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

29OMB Circular A–4 (Sept. 17, 2003), section E, 

‘‘Identifying and Measuring Benefits and Costs. 

Available at: www.whitehouse.gov/omb/ 

memoranda/m03-21.html. 

3. Total Installed Cost per Unit 

As discussed in section IV. F. 1, DOE 

developed a dishwasher price trend 

based on an experience rate for 

miscellaneous household appliances. It 

used this trend to forecast the prices of 

dishwashers sold in each year in the 

forecast period. DOE applied the same 

values to forecast prices for each 

product class at each considered 

efficiency level. 

To evaluate the effect of uncertainty 

regarding the price trend estimates, DOE 

investigated the impact of different 

product price forecasts on the consumer 

net present value for the considered 

TSLs for residential dishwashers. In 

addition to the default price trend, DOE 

considered two product price sensitivity 

cases: (1) A high price decline case 

based on an exponential fit using PPI 

data for 1991 to 2010; (2) a low price 

decline case based on an experience rate 

derived using PPI and shipments data 

for 1991 to 2000. The derivation of these 

price trends and the results of these 

sensitivity cases are described in 

appendix 10–B of the direct final rule 

TSD. In the high price decline case, the 

NPV is significantly higher than in the 

default case. In the low price decline 

case, the NPV is slightly lower than in 

the default case. The rank order of the 

TSLs is the same in all of the cases. 

4. National Energy and Water Savings 

For each year in the forecast period, 

DOE calculates the national energy and 

water savings for each standard level by 

multiplying the stock of products 

affected by the energy conservation 

standards by the per-unit annual energy 

savings. Cumulative energy and water 

savings are the sum of the NES for each 

year. 

To estimate the national energy 

savings expected from appliance 

standards, DOE uses a multiplicative 

factor to convert site energy 

consumption (at the home) into primary 

or source energy consumption (the 

energy required to convert and deliver 

the site energy). These conversion 

factors account for the energy used at 

power plants to generate electricity and 

losses in transmission and distribution. 

The conversion factors vary over time 

because of projected changes in 

generation sources (i.e., the power plant 

types projected to provide electricity to 

the country). The factors that DOE 

developed are marginal values, which 

represent the response of the system to 

an incremental decrease in consumption 

associated with appliance standards. 

For today’s rule, DOE used annual siteto-source conversion factors based on 

the version of NEMS that corresponds to 

AEO2011, which provides energy 

forecasts through 2035. For 2036–2047, 

DOE used conversion factors that 

remain constant at the 2035 values. 

Section 1802 of the Energy Policy Act 

of 2005 (EPACT 2005) directed DOE to 

contract a study with the National 

Academy of Science (NAS) to examine 

whether the goals of energy efficiency 

standards are best served by measuring 

energy consumed, and efficiency 

improvements, at the actual point of use 

or through the use of the full-fuel-cycle, 

beginning at the source of energy 

production. (Pub. L. No. 109–58 (August 

8, 2005)). NAS appointed a committee 

on ‘‘Point-of-Use and Full-Fuel-Cycle 

Measurement Approaches to Energy 

Efficiency Standards’’ to conduct the 

study, which was completed in May 

2009. The NAS committee defined fullfuel-cycle energy consumption as 

including, in addition to site energy use: 

Energy consumed in the extraction, 

processing, and transport of primary 

fuels such as coal, oil, and natural gas; 

energy losses in thermal combustion in 

power generation plants; and energy 

losses in transmission and distribution 

to homes and commercial buildings. 

In evaluating the merits of using 

point-of-use and full-fuel-cycle (FFC) 

measures, the NAS committee noted 

that DOE uses what the committee 

referred to as ‘‘extended site’’ energy 

consumption to assess the impact of 

energy use on the economy, energy 

security, and environmental quality. 

The extended site measure of energy 

consumption includes the energy 

consumed during the generation, 

transmission, and distribution of 

electricity but, unlike the full-fuel-cycle 

measure, does not include the energy 

consumed in extracting, processing, and 

transporting primary fuels. A majority of 

the NAS committee concluded that 

extended site energy consumption 

understates the total energy consumed 

to make an appliance operational at the 

site. As a result, the NAS committee 

recommended that DOE consider 

shifting its analytical approach over 

time to use a full-fuel-cycle measure of 

energy consumption when assessing 

national and environmental impacts, 

especially with respect to the 

calculation of greenhouse gas (GHG) 

emissions. The NAS committee also 

recommended that DOE provide more 

comprehensive information to the 

public through labels and other means, 

such as an enhanced Web site. For those 

appliances that use multiple fuels (e.g., 

water heaters), the NAS committee 

indicated that measuring full-fuel-cycle 

energy consumption would provide a 

more complete picture of energy 

consumed and permit comparisons 

across many different appliances, as 

well as an improved assessment of 

impacts. 

In response to the NAS committee 

recommendations, DOE issued a notice 

of proposed policy for incorporating a 

full-fuel cycle analysis into the methods 

it uses to estimate the likely impacts of 

energy conservation standards on 

energy use and emissions. 75 FR 51423 

(Aug. 20, 2010). In its final Statement of 

Policy, DOE stated that it intends to 

calculate FFC energy and emission 

impacts by applying conversion factors 

generated by the GREET model to the 

NEMS-based results currently used by 

DOE. 76 FR 51282 (Aug. 18, 2011). 

Additionally, DOE will review 

alternative approaches to estimating 

these factors and may decide to use a 

model other than GREET to estimate the 

FFC energy and emission impacts in any 

particular future appliance efficiency 

standards rulemaking. 

5. Net Present Value of Consumer 

Benefit 

The inputs for determining the net 

present value (NPV) of the total costs 

and benefits experienced by consumers 

of considered appliances are: (1) Total 

annual installed cost, (2) total annual 

savings in operating costs, and (3) a 

discount factor. DOE calculates net 

savings each year as the difference 

between the base case and each 

standards case in total savings in 

operating costs and total increases in 

installed costs. DOE calculates operating 

cost savings over the life of each 

product shipped during the forecast 

period. 

In calculating the NPV, DOE 

multiplies the net savings in future 

years by a discount factor to determine 

their present value. For today’s direct 

final rule, DOE estimated the NPV of 

appliance consumer benefits using both 

a 3-percent and a 7-percent real 

discount rate. DOE uses these discount 

rates in accordance with guidance 

provided by the Office of Management 

and Budget (OMB) to Federal agencies 

on the development of regulatory 

analysis.29 The discount rates for the 

determination of NPV are in contrast to 

the discount rates used in the LCC 

analysis, which are designed to reflect a 

consumer’s perspective. The 7-percent 

real value is an estimate of the average 

before-tax rate of return to private 

capital in the U.S. economy. The 

3-percent real value represents the 

‘‘social rate of time preference,’’ which 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31939 

30Available online at www.sec.gov. 

31Available online at 

www2.standardandpoors.com. 

is the rate at which society discounts 

future consumption flows to their 

present value. 

H. Consumer Subgroup Analysis 

In analyzing the potential impact of 

new or amended standards on 

consumers, DOE evaluates the impact 

on identifiable subgroups of consumers 

(e.g., low-income households) that may 

be disproportionately affected by a 

national standard. DOE evaluates 

impacts on particular subgroups of 

consumers primarily by analyzing the 

LCC impacts and PBP for those 

particular consumers from alternative 

standard levels. Chapter 11 in the direct 

final rule TSD describes the consumer 

subgroup analysis. For this rule, DOE 

analyzed the impacts of the considered 

standard levels on low-income 

households and senior-only households. 

I. Manufacturer Impact Analysis 

The following sections address the 

various steps taken to analyze the 

impacts of the amended standards on 

manufacturers. These steps include 

conducting a series of analyses, 

interviewing manufacturers, and 

evaluating the information received 

from interested parties during this 

rulemaking. 

1. Overview 

In determining whether an amended 

energy conservation standard for 

residential dishwashers subject to this 

rulemaking is economically justified, 

DOE is required to consider ‘‘the 

economic impact of the standard on the 

manufacturers and on the consumers of 

the products subject to such standard.’’ 

(42 U.S.C. 6295(o)(2)(B)(i)(I)) The statute 

also calls for an assessment of the 

impact of any lessening of competition 

as determined by the Attorney General 

that is likely to result from the adoption 

of a standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V)) DOE conducted the 

MIA to estimate the financial impact of 

amended energy conservation standards 

on manufacturers, and to assess the 

impacts of such standards on 

employment and manufacturing 

capacity. 

The MIA is both a quantitative and 

qualitative analysis. The quantitative 

part of the MIA relies on the 

Government Regulatory Impact Model 

(GRIM), an industry cash-flow model 

customized for the residential 

dishwashers covered in this rulemaking. 

See section IV.I.2 below, for details on 

the GRIM analysis. The qualitative part 

of the MIA addresses factors such as 

product characteristics, characteristics 

of particular firms, and market trends. 

The complete MIA is discussed in 

chapter 12 of the direct final rule TSD. 

DOE conducted the MIA in the three 

phases described below. 

a. Phase 1, Industry Profile 

In Phase 1 of the MIA, DOE prepared 

a profile of the residential dishwasher 

industry based on the market and 

technology assessment prepared for this 

rulemaking. Before initiating the 

detailed impact studies, DOE collected 

information on the present and past 

market structure and characteristics of 

the industry, tracking trends in market 

share data, product attributes, product 

shipments, manufacturer markups, and 

the cost structure for various 

manufacturers. 

The profile also included an analysis 

of manufacturers in the industry using 

Security and Exchange Commission 

10–K filings,30 Standard & Poor’s stock 

reports,31 and corporate annual reports 

released by both public and privately 

held companies. DOE used this and 

other publicly available information to 

derive preliminary financial inputs for 

the GRIM including industry revenues, 

cost of goods sold, and depreciation, as 

well as selling, general, and 

administrative (SG&A), and research 

and development (R&D) expenses. 

b. Phase 2, Industry Cash Flow Analysis 

Phase 2 focused on the financial 

impacts of potential amended energy 

conservation standards on the industry 

as a whole. Amended energy 

conservation standards can affect 

manufacturer cash flows in three 

distinct ways: (1) By creating a need for 

increased investment, (2) by raising 

production costs per unit, and (3) by 

altering revenue due to higher per-unit 

prices and/or possible changes in sales 

volumes. DOE used the GRIM to model 

these effects in a cash-flow analysis of 

the residential dishwasher industry. In 

performing this analysis, DOE used the 

financial values derived during Phase 1 

and the shipment assumptions from the 

NIA. 

c. Phase 3, Sub-Group Impact Analysis 

Using average cost assumptions to 

develop an industry-cash-flow estimate 

may not adequately assess differential 

impacts of amended energy 

conservation standards among 

manufacturer subgroups. For example, 

small businesses, manufacturers of 

niche products, or companies exhibiting 

a cost structure that differs significantly 

from the industry average could be more 

negatively affected. During the 

manufacturer interviews, DOE 

discussed financial topics specific to 

each manufacturer and obtained each 

manufacturer’s view of the industry as 

a whole. DOE reports the MIA impacts 

of amended energy conservation 

standards by grouping together the 

impacts on manufacturers of certain 

product classes. While DOE did not 

identify any other subgroup of 

manufacturers of residential 

dishwashers that would warrant a 

separate analysis, DOE specifically 

investigated impacts on small business 

manufacturers. See section VI.B for 

more information. 

The MIA also addresses the direct 

employment impacts in manufacturing 

of dishwashers. DOE uses census data 

and information gained through 

manufacturer interviews in conjunction 

with the GRIM to estimate the domestic 

labor expenditures and number of 

domestic production workers in the 

base case and at each TSL from 2012 to 

2047. 

2. GRIM Analysis 

DOE uses the GRIM to quantify the 

changes in cash flow that result in a 

higher or lower industry value. The 

GRIM analysis is a standard, annual 

cash-flow analysis that incorporates 

manufacturer costs, markups, 

shipments, and industry financial 

information as inputs, and models 

changes in costs, distribution of 

shipments, investments, and 

manufacturer margins that could result 

from amended energy conservation 

standards. The GRIM spreadsheet uses 

the inputs to arrive at a series of annual 

cash flows, beginning with the base year 

of the analysis, 2012 (which accounts 

for the investments needed to bring 

products into compliance), and 

continuing to 2047. DOE uses the 

industry average weighted average cost 

of capital (WACC) of 8.5 percent, as this 

represents the minimum rate of return 

necessary to cover the debt and equity 

obligations manufacturers use to finance 

operations. 

DOE used the GRIM to compare INPV 

in the base case with INPV at various 

TSLs (the standards cases). The 

difference in INPV between the base and 

standards cases represents the financial 

impact of the amended standard on 

manufacturers. DOE collected this 

information from a number of sources, 

including publicly available data and 

interviews with a number of 

manufacturers. Additional details about 

the GRIM can be found in chapter 12 of 

the direct final rule TSD. 


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31940 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

a. GRIM Key Inputs 

Manufacturer Production Costs 

Changes in the manufacturer 

production costs (MPCs) of residential 

dishwashers can affect revenues, gross 

margins, and cash flow of the industry, 

making these product cost data key 

GRIM inputs for DOE’s analysis. DOE 

created separate cost curves for standard 

and compact product classes using data 

from tear-downs to develop both the 

baseline MPCs and the incremental 

costs that correspond to the proposed 

design options. The cost model also 

disaggregated the MPCs into material, 

labor, overhead, and depreciation. Later, 

in Phase 3 of the MIA, manufacturers 

validated these estimates and 

assumptions during interviews. DOE 

used the resulting MPCs and cost 

breakdowns as described in section IV.C 

above, and further detailed in chapter 5 

of the direct final rule TSD, for each 

efficiency level analyzed in the GRIM 

analysis. 

Base-Case Shipments Forecast 

The GRIM estimates manufacturer 

revenues based on total unit shipment 

forecasts and the distribution of these 

values by efficiency level and product 

class. Changes in the efficiency mix at 

each standard level affect manufacturer 

finances. For this analysis, the GRIM 

uses the NIA shipments forecasts from 

2012 to 2047, the end of the analysis 

period. 

To calculate shipments, DOE 

developed a single shipment model for 

all dishwashers based on an analysis of 

key market drivers for residential 

dishwashers. For greater detail on the 

shipments analysis, see section IV.G.1 

above or chapter 9 of the direct final 

rule TSD. 

Product and Capital Conversion Costs 

Amended energy conservation 

standards will cause manufacturers to 

incur conversion costs to bring their 

production facilities and product 

designs into compliance. For the MIA, 

DOE classified these costs into two 

major groups: (1) Product conversion 

costs and (2) capital conversion costs. 

Product conversion costs are 

investments in research, development, 

testing, marketing, and other noncapitalized costs focused on making 

product designs comply with the 

amended energy conservation standard. 

Capital conversion costs are investments 

in property, plant, and equipment to 

adapt or change existing production 

facilities so that new product designs 

can be fabricated and assembled. 

DOE based its estimates of both the 

product and capital conversion costs 

that would be required to meet each 

TSL on information obtained from 

manufacturer interviews, the design 

pathways considered in the engineering 

analysis, and market information about 

the number of platform and product 

families for each manufacturer. DOE’s 

estimates of the product and capital 

conversion costs for the dishwashers 

addressed in this rulemaking can be 

found in section V.B.2 of today’s final 

rule and in chapter 12 of the final rule 

TSD. 

b. GRIM Scenarios 

Standards-Case Shipment Forecasts 

The MIA results presented in section 

V.B.2 all use shipments from the 

reference NIA scenario in the GRIM. To 

determine efficiency distributions in the 

standards case for the reference NIA 

scenario, DOE analyzed the roll-up 

scenario. In this scenario, DOE assumed 

that base case shipments of products 

that did not meet the new standard 

would roll up to meet the standard in 

the compliance year. See section IV.G.2 

for a description of the standards case 

efficiency distribution. DOE also used a 

relative price elasticity that considers 

the possibility of higher first costs 

lowering total shipments in the 

standards case. 

The reference NIA scenario used 

historical data to derive a price scaling 

index to forecast product costs. The 

MPCs and MSPs in the GRIM use the 

default price forecast for all scenarios. 

See section IV.G.4 for a discussion of 

DOE’s price forecasting methodology. 

Markup Scenarios 

MSP is equal to MPC times a 

manufacturer markup. The MSP 

includes direct manufacturing 

production costs (i.e., labor, material, 

and overhead estimated in DOE’s MPCs) 

and all non-production costs (i.e., 

SG&A, R&D, and interest), along with 

profit. 

To calculate the baseline 

manufacturer markup, DOE evaluated 

publicly available financial information 

for manufacturers of major household 

appliances whose product offerings 

include residential dishwashers. During 

manufacturer interviews, DOE received 

feedback supporting the calculated 1.24 

baseline manufacturer markup. DOE 

used the baseline manufacturer markup 

for all products when modeling the base 

case in the GRIM. 

For the standards case in the GRIM, 

DOE modeled two markup scenarios to 

represent the uncertainty regarding the 

potential impacts on prices and 

profitability for manufacturers following 

the implementation of amended energy 

conservation standards. For both GRIM 

markup scenarios, DOE placed no 

premium on higher efficiency products. 

This assumption is informed by a 

market structure in which over 96 

percent of products currently adhere to 

ENERGY STAR standards, leaving little 

to no room for differentiation by 

efficiency level alone, and was further 

supported by manufacturer interviews. 

The two standards case markup 

scenarios are (1) a flat markup scenario, 

and (2) a preservation of operating profit 

markup scenario. Modifying these 

markups from the base case to the 

standards cases yields different sets of 

impacts on manufacturers’ changing 

industry revenue and cash flow. 

The flat markup scenario assumes that 

the baseline markup of 1.24 is 

maintained for all products in the 

standards case. This scenario represents 

the upper bound of industry 

profitability as manufacturers are able to 

fully pass through additional costs due 

to standards to their customers under 

this scenario. 

The preservation of operating profit 

markup scenario is similar to the flat 

markup scenario with the exception that 

in the standards case, minimally 

compliant products lose a fraction of the 

baseline markup. This scenario is the 

lower bound profitability scenario and 

represents a more substantial impact to 

the dishwasher industry as 

manufacturers attempt to maintain the 

lowest possible prices for entry level 

products while securing the same level 

of operating profit they saw prior to 

amended standards. 

3. Manufacturer Interviews 

DOE interviewed manufacturers 

representing more than 80 percent of 

residential dishwasher sales. These 

interviews were in addition to those 

DOE conducted as part of the 

engineering analysis. DOE used these 

interviews to tailor the GRIM to 

incorporate unique financial 

characteristics of the industry. All 

interviews provided information that 

DOE used to evaluate the impacts of 

potential amended energy conservation 

standards on manufacturer cash flows, 

manufacturing capacities, and 

employment levels. See appendix 12–A 

of the direct final rule TSD for 

additional information on the MIA 

interviews. The following sections 

describe the most significant issues 

identified by manufacturers. 

a. Dishwasher Performance 

All manufacturers interviewed 

expressed concerns about the potential 

impacts of amended standards on 

product performance, citing several 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31941 

32 Data on industry employment, hours, labor 

compensation, value of production, and the implicit 

price deflator for output for these industries are 

available upon request by calling the Division of 

Industry Productivity Studies (202–691–5618) or by 

sending a request by email to dipsweb@bls.gov. 

Available at: www.bls.gov/news.release/ 

prin1.nr0.htm. 

adverse and possibly severe 

consequences of standards above those 

agreed upon in the Joint Petition. For 

higher efficiency standards, the 

performance metrics manufacturers 

expect to be most severely impacted 

include wash performance, drying 

performance, cycle time, and the noise 

levels reached in operation. In 

considering these metrics, 

manufacturers anticipate negative 

reactions ranging from small but 

meaningful changes in consumer 

behavior to higher rates of service calls 

and returns. For efficiency standards 

well above those proposed in the Joint 

Petition, manufacturers foresee blanket 

rejection of poorly performing products 

in the market. In considering impacts to 

wash performance, manufacturers cited 

an increase in unnecessary rinsing or 

washing of dishes prior to loading the 

dishwasher, switching to a more 

aggressive cycle, and running multiple 

cycles when dishes are not adequately 

cleaned in a single cycle as the most 

likely changes in consumer behavior. 

Manufacturers went on to suggest that 

any of these changes would result in an 

increase in both energy and water 

consumption over that used by a 

dishwasher of satisfactory performance. 

To mitigate the impact of future 

standards on product performance, 

several manufacturers recommended the 

adoption of a performance metric into 

the test procedure and standard. 

While all manufacturers suggested 

that the efficiency level specified in the 

Joint Petition would not likely have a 

substantial negative impact on wash 

performance, some manufacturers noted 

that standards above this level would 

result in a decrease in performance 

unless substantially higher-cost 

technology changes were implemented. 

The comments did not indicate the 

specific technology changes that would 

be required. Even without such 

technology changes, however, several 

manufacturers already sell products at 

efficiency levels above those specified 

by the Joint Petition, including the maxtech efficiency level. Accordingly, DOE 

evaluated these efficiency levels as part 

of this rulemaking. 

b. Test Procedures 

Manufacturers raised concerns over 

the current DOE dishwasher test 

procedure and the multitude of 

additional dishwasher test procedures 

in the field today. Several 

manufacturers suggested that the 

current DOE test procedure does not 

accurately capture the energy used by 

dishwashers in the field. These 

manufacturers cite the single cycle 

specification and lack of performance 

metrics in the test procedure as 

providing an easy avenue for 

circumvention of the standards. In the 

scenario described, manufacturers may 

optimize a particular cycle to perform 

well on the DOE test procedure with the 

implicit understanding that this cycle 

will not meet customer expectations and 

thus will not be used in the field as 

customers opt for a different, more 

energy-intensive cycle. 

In contrast, other manufacturers 

raised concerns over expanding the test 

procedure to cover multiple cycles 

citing the additional testing burden this 

would generate. Similarly, some 

manufacturers raised concerns over how 

DOE would implement a performance 

test, noting that there already exist 

numerous performance tests in the 

industry including those developed by 

AHAM, IEC, and Consumer Reports and 

that each performance test procedure 

favors a different machine cycle 

algorithm. 

As discussed in sections II.A and 

II.B.4, the DOE test procedure for 

residential dishwashers is found at Title 

10 of the CFR part 430, subpart B, 

appendix C. DOE is considering 

amendments to the test procedure to 

incorporate measures of standby mode 

and off mode energy consumption in 

accordance with statutory requirements. 

DOE will consider concerns regarding 

active mode testing provisions, 

including those discussed above, in the 

test procedure rulemaking. 

c. Increased Competition 

Manufacturers of both baseline and 

high efficiency products anticipate an 

increase in competition in industry 

stemming from amended standards. 

Manufacturers whose market share is 

largely attributed to products currently 

below amended standards expect to see 

either the removal of features from 

higher efficiency units as a means to cut 

costs to maintain a low-cost minimallycompliant product, or the disappearance 

of entry level models as they are forced 

to add other features and cost in line 

with current higher efficiency products. 

If the latter approach prevails, 

manufacturers of higher efficiency 

products expect to see increased 

competition as manufacturers which 

previously focused on low efficiency 

products move into their target segment 

of the market. As noted in section 

III.D.1.d, the Attorney General provides 

DOE with a determination and analysis 

of the impact of any lessening of 

competition that is likely to result from 

the imposition of the standard. (42 

U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) 

d. Cumulative Regulatory Burden 

Several manufacturers noted that 

dishwashers are but one of a suite of 

appliances they produce and that the 

cumulative burden of research and 

development to meet standards, capital 

expenditure and retraining of staff to 

produce products at the new standards, 

and product testing to certify 

compliance of new products represent a 

significant burden when taken in 

combination across their various 

product lines. Manufacturers suggest 

that the ability to establish standards in 

a coordinated fashion by such vehicles 

as a joint petition and receiving 

adequate notice of DOE’s plans for 

amended standards are both necessary 

elements in mitigating the cumulative 

burden and aligning changes in 

efficiency regulations with the product 

development cycle. Cumulative 

regulatory burden is discussed further 

in section V.B.2.e of today’s direct final 

rule and chapter 12 of the direct final 

rule TSD. 

J. Employment Impact Analysis 

DOE considers employment impacts 

in the domestic economy as one factor 

in selecting a proposed standard. 

Employment impacts include direct and 

indirect impacts. Direct employment 

impacts are any changes in the number 

of employees of manufacturers of the 

products subject to standards, their 

suppliers, and related service firms. The 

MIA addresses those impacts. Indirect 

employment impacts from standards 

consist of the net jobs created or 

eliminated in the national economy, 

other than in the manufacturing sector 

being regulated, caused by: 

(1) Reduced spending by end users on 

energy; 

(2) Reduced spending on new energy 

supply by the utility industry; 

(3) Increased spending on new 

products to which the new standards 

apply; and 

(4) The effects of those three factors 

throughout the economy. 

One method for assessing the possible 

effects on the demand for labor of such 

shifts in economic activity is to compare 

sector employment statistics developed 

by the Labor Department’s Bureau of 

Labor Statistics (BLS).32 The BLS 

regularly publishes its estimates of the 

number of jobs per million dollars of 

economic activity in different sectors of 


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33See Bureau of Economic Analysis, Regional 

Multipliers: A User Handbook for the Regional 

Input-Output Modeling System (RIMS II). 

Washington, DC. U.S. Department of Commerce, 

1992. 

34 J. M. Roop, M. J. Scott, and R. W. Schultz, 

ImSET 3.1: Impact of Sector Energy Technologies, 

PNNL-18412, Pacific Northwest National 

Laboratory, 2009. Available at: www.pnl.gov/main/ 

publications/external/technical_reports/PNNL18412.pdf. 

the economy, as well as the jobs created 

elsewhere in the economy by this same 

economic activity. Data from BLS 

indicate that expenditures in the utility 

sector generally create fewer jobs (both 

directly and indirectly) than 

expenditures in other sectors of the 

economy.33 There are many reasons for 

these differences, including wage 

differences and the fact that the utility 

sector is more capital-intensive and less 

labor-intensive than other sectors. 

Energy conservation standards have the 

effect of reducing consumer utility bills. 

Because reduced consumer 

expenditures for energy likely lead to 

increased expenditures in other sectors 

of the economy, the general effect of 

efficiency standards is to shift economic 

activity from a less labor-intensive 

sector (i.e., the utility sector) to more 

labor-intensive sectors (e.g., the retail 

and service sectors). Thus, based on the 

BLS data alone, DOE believes net 

national employment will increase due 

to shifts in economic activity resulting 

from amended standards for 

dishwashers. 

For the standard levels considered in 

today’s direct final rule, DOE estimated 

indirect national employment impacts 

using an input/output model of the U.S. 

economy called Impact of Sector Energy 

Technologies version 3.1.1 (ImSET).34

ImSET is a special-purpose version of 

the ‘‘U.S. Benchmark National InputOutput’’ (I–O) model, which was 

designed to estimate the national 

employment and income effects of 

energy-saving technologies. The ImSET 

software includes a computer-based I–O 

model having structural coefficients that 

characterize economic flows among 187 

sectors most relevant to industrial, 

commercial, and residential building 

energy use. 

DOE notes that ImSET is not a general 

equilibrium forecasting model, and 

understands the uncertainties involved 

in projecting employment impacts, 

especially changes in the later years of 

the analysis. Because ImSET does not 

incorporate price changes, the 

employment effects predicted by ImSET 

may over-estimate actual job impacts 

over the long run for this rule. Because 

ImSET predicts small job impacts 

resulting from this rule, regardless of 

these uncertainties, the actual job 

impacts are likely to be negligible in the 

overall economy. DOE may consider the 

use of other modeling approaches for 

examining long run employment 

impacts. DOE also notes that the 

employment impacts estimated with 

ImSET for the entire economy differ 

from the employment impacts in the 

dishwasher manufacturing sector 

estimated using the GRIM in the MIA. 

The methodologies used and the sectors 

analyzed in the ImSET and GRIM 

models are different. For more details 

on the employment impact analysis, see 

chapter 13 of the direct final rule TSD. 

K. Utility Impact Analysis 

The utility impact analysis estimates 

several important effects on the utility 

industry of the adoption of new or 

amended standards. For this analysis, 

DOE used the NEMS–BT model to 

generate forecasts of electricity 

consumption, electricity generation by 

plant type, and electric generating 

capacity by plant type, that would result 

from each TSL. DOE obtained the 

energy savings inputs associated with 

efficiency improvements to considered 

products from the NIA. DOE conducts 

the utility impact analysis as a scenario 

that departs from the latest AEO 

Reference case. In the analysis for 

today’s rule, the estimated impacts of 

standards are the differences between 

values forecasted by NEMS–BT and the 

values in the AEO2011 Reference case. 

For more details on the utility impact 

analysis, see chapter 14 of the direct 

final rule TSD. 

L. Emissions Analysis 

In the emissions analysis, DOE 

estimated the reduction in power sector 

emissions of CO2, NOX, and Hg from 

amended energy conservation standards 

for distribution transformers. DOE used 

the NEMS–BT computer model, which 

is run similarly to the AEO NEMS, 

except that distribution transformer 

energy use is reduced by the amount of 

energy saved (by fuel type) due to each 

TSL. The inputs of national energy 

savings come from the NIA spreadsheet 

model, while the output is the 

forecasted physical emissions. The net 

benefit of each TSL is the difference 

between the forecasted emissions 

estimated by NEMS–BT at each TSL and 

the AEO Reference Case. NEMS–BT 

tracks CO2 emissions using a detailed 

module that provides results with broad 

coverage of all sectors and inclusion of 

interactive effects. For today’s rule, DOE 

used the version of NEMS–BT based on 

AEO2011, which incorporated projected 

effects of all emissions regulations 

promulgated as of January 31, 2011. 

SO2 emissions from affected electric 

generating units (EGUs) are subject to 

nationwide and regional emissions cap 

and trading programs, and DOE has 

determined that these programs create 

uncertainty about the standards’ impact 

on SO2 emissions. Title IV of the Clean 

Air Act sets an annual emissions cap on 

SO2 for affected EGUs in the 48 

contiguous States and the District of 

Columbia (DC). SO2 emissions from 28 

eastern States and DC are also limited 

under the Clean Air Interstate Rule 

(CAIR, 70 Fed. Reg. 25162 (May 12, 

2005)), which created an allowancebased trading program that would 

gradually replaced the Title IV program 

in those States and DC. Although CAIR 

has been remanded to EPA by the U.S. 

Court of Appeals for the District of 

Columbia Circuit (D.C. Circuit), see 

North Carolina v. EPA, 550 F.3d 1176 

(D.C. Cir. 2008), it remained in effect 

temporarily, consistent with the D.C. 

Circuit’s earlier opinion in North 

Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008). On July 6, 2010, EPA issued the 

Transport Rule proposal, a replacement 

for CAIR. 75 FR 45210 (Aug. 2, 2010). 

On July 6, 2011, EPA issued the final 

Transport Rule, titled the Cross-State 

Air Pollution Rule. 76 FR 48208 (August 

8, 2011). (See http://www.epa.gov/ 

crossstaterule/). On December 30, 2011, 

however, the D.C. Circuit stayed the 

new rules while a panel of judges 

reviews them, and told EPA to continue 

enforcing CAIR (see EME Homer City 

Generation v. EPA, No. 11–1302, Order 

at *2 (D.C. Cir. Dec. 30, 2011)). The AEO 

2011 NEMS–BT used for today’s direct 

final rule assumes the implementation 

of CAIR. 

The attainment of emissions caps 

typically is flexible among EGUs and is 

enforced through the use of emissions 

allowances and tradable permits. Under 

existing EPA regulations, any excess 

SO2 emissions allowances resulting 

from the lower electricity demand 

caused by the imposition of an 

efficiency standard could be used to 

permit offsetting increases in SO2

emissions by any regulated EGU. 

However, if the standard resulted in a 

permanent increase in the quantity of 

unused emissions allowances, there 

would be an overall reduction in SO2

emissions from the standards. While 

there remains some uncertainty about 

the ultimate effects of efficiency 

standards on SO2 emissions covered by 

the existing cap-and-trade system, the 

NEMS–BT modeling system that DOE 

uses to forecast emissions reductions 

currently indicates that no physical 

reductions in power sector emissions 

would occur for SO2. DOE 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31943 

35National Research Council. Hidden Costs of 

Energy: Unpriced Consequences of Energy 

Production and Use. National Academies Press: 

Washington, DC. 2009. 

acknowledges, however, that even 

though there is a cap on SO2 emissions 

and uncertainty whether efficiency 

standards would reduce SO2 emissions, 

it is possible that standards could 

reduce the compliance cost by reducing 

demand for SO2 allowances. 

As discussed above, the AEO 2011 

NEMS used for today’s direct final rule 

assumes the implementation of CAIR, 

which established a cap on NOX

emissions in 28 eastern States and the 

District of Columbia. With CAIR in 

effect, energy conservation standards are 

expected to have little or no physical 

effect on NOX emissions in the States 

covered by CAIR, for the same reasons 

that they may have little effect on SO2

emissions. However, the standards 

would be expected to reduce NOX

emissions in the 22 States not affected 

by the CAIR. For these 22 states, DOE 

used NEMS–BT to forecast NOX

emission reductions from the standards 

that are considered in today’s direct 

final rule. 

On February 16, 2012, EPA issued 

national emissions standards for 

hazardous air pollutants (NESHAPs) for 

mercury and certain other pollutants 

emitted from coal and oil-fired EGUs. 77 

FR 9304. The NESHAPs do not include 

emissions caps and, as such, DOE’s 

energy conservation standards would 

likely reduce Hg emissions. For the 

emissions analysis for this rulemaking, 

DOE estimated mercury emissions 

reductions using NEMS–BT based on 

AEO2011, which does not incorporate 

the NESHAPs. DOE expects that future 

versions of the NEMS–BT model will 

reflect the implementation of the 

NESHAPs. 

M. Monetizing Carbon Dioxide and 

Other Emissions Impacts 

As part of the development of this 

direct final rule, DOE considered the 

estimated monetary benefits likely to 

result from the reduced emissions of 

CO2 and NOX that are expected to result 

from each of the considered TSLs. In 

order to make this calculation similar to 

the calculation of the NPV of consumer 

benefit, DOE considered the reduced 

emissions expected to result over the 

lifetime of products shipped in the 

forecast period for each TSL. This 

section summarizes the basis for the 

monetary values used for each of these 

emissions and presents the benefits 

estimates considered. 

For today’s direct final rule, DOE is 

relying on a set of values for the social 

cost of carbon (SCC) that was developed 

by an interagency process. A summary 

of the basis for these values is provided 

below, and a more detailed description 

of the methodologies used is provided 

in appendix 15–A of the direct final rule 

TSD. 

1. Social Cost of Carbon 

Under Executive Order 12866, 

agencies must, to the extent permitted 

by law, ‘‘assess both the costs and the 

benefits of the intended regulation and, 

recognizing that some costs and benefits 

are difficult to quantify, propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs.’’ 

The purpose of the SCC estimates 

presented here is to allow agencies to 

incorporate the monetized social 

benefits of reducing CO2 emissions into 

cost-benefit analyses of regulatory 

actions that have small, or ‘‘marginal,’’ 

impacts on cumulative global emissions. 

The estimates are presented with an 

acknowledgement of the many 

uncertainties involved and with a clear 

understanding that they should be 

updated over time to reflect increasing 

knowledge of the science and 

economics of climate impacts. 

As part of the interagency process that 

developed these SCC estimates, 

technical experts from numerous 

agencies met on a regular basis to 

consider public comments, explore the 

technical literature in relevant fields, 

and discuss key model inputs and 

assumptions. The main objective of this 

process was to develop a range of SCC 

values using a defensible set of input 

assumptions grounded in the existing 

scientific and economic literatures. In 

this way, key uncertainties and model 

differences transparently and 

consistently inform the range of SCC 

estimates used in the rulemaking 

process. 

a. Monetizing Carbon Dioxide Emissions 

The SCC is an estimate of the 

monetized damages associated with an 

incremental increase in carbon 

emissions in a given year. It is intended 

to include (but is not limited to) changes 

in net agricultural productivity, human 

health, property damages from 

increased flood risk, and the value of 

ecosystem services. Estimates of the 

SCC are provided in dollars per metric 

ton of carbon dioxide. 

When attempting to assess the 

incremental economic impacts of carbon 

dioxide emissions, the analyst faces a 

number of serious challenges. A recent 

report from the National Research 

Council 35 points out that any 

assessment will suffer from uncertainty, 

speculation, and lack of information 

about (1) future emissions of greenhouse 

gases, (2) the effects of past and future 

emissions on the climate system, (3) the 

impact of changes in climate on the 

physical and biological environment, 

and (4) the translation of these 

environmental impacts into economic 

damages. As a result, any effort to 

quantify and monetize the harms 

associated with climate change will 

raise serious questions of science, 

economics, and ethics and should be 

viewed as provisional. 

Despite the serious limits of both 

quantification and monetization, SCC 

estimates can be useful in estimating the 

social benefits of reducing carbon 

dioxide emissions. Consistent with the 

directive quoted above, the purpose of 

the SCC estimates presented here is to 

make it possible for agencies to 

incorporate the social benefits from 

reducing carbon dioxide emissions into 

cost-benefit analyses of regulatory 

actions that have small, or ‘‘marginal,’’ 

impacts on cumulative global emissions. 

Most Federal regulatory actions can be 

expected to have marginal impacts on 

global emissions. 

For such policies, the agency can 

estimate the benefits from reduced (or 

costs from increased) emissions in any 

future year by multiplying the change in 

emissions in that year by the SCC value 

appropriate for that year. The net 

present value of the benefits can then be 

calculated by multiplying each of these 

future benefits by an appropriate 

discount factor and summing across all 

affected years. This approach assumes 

that the marginal damages from 

increased emissions are constant for 

small departures from the baseline 

emissions path, an approximation that 

is reasonable for policies that have 

effects on emissions that are small 

relative to cumulative global carbon 

dioxide emissions. For policies that 

have a large (non-marginal) impact on 

global cumulative emissions, there is a 

separate question of whether the SCC is 

an appropriate tool for calculating the 

benefits of reduced emissions. This 

concern is not applicable to this notice, 

and DOE does not attempt to answer 

that question here. 

At the time of the preparation of this 

notice, the most recent interagency 

estimates of the potential global benefits 

resulting from reduced CO2 emissions in 

2010, expressed in 2010$, were $4.9, 

$22.3, $36.5, and $67.6 per metric ton 

avoided. For emission reductions that 

occur in later years, these values grow 

in real terms over time. Additionally, 

the interagency group determined that a 

range of values from 7 percent to 23 

percent should be used to adjust the 

global SCC to calculate domestic 


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36 It is recognized that this calculation for 

domestic values is approximate, provisional, and 

highly speculative. There is no a priori reason why 

domestic benefits should be a constant fraction of 

net global damages over time. 37Throughout this section, references to tons of 

CO2 refer to metric tons. 

38The models are described in appendix 15–A of 

the direct final rule TSD. 

effects,36 although preference is given to 

consideration of the global benefits of 

reducing CO2 emissions. 

It is important to emphasize that the 

interagency process is committed to 

updating these estimates as the science 

and economic understanding of climate 

change and its impacts on society 

improves over time. Specifically, the 

interagency group has set a preliminary 

goal of revisiting the SCC values within 

2 years or at such time as substantially 

updated models become available, and 

to continue to support research in this 

area. In the meantime, the interagency 

group will continue to explore the 

issues raised by this analysis and 

consider public comments as part of the 

ongoing interagency process. 

b. Social Cost of Carbon Values Used in 

Past Regulatory Analyses 

To date, economic analyses for 

Federal regulations have used a wide 

range of values to estimate the benefits 

associated with reducing carbon dioxide 

emissions. In the final model year 2011 

CAFE rule, the U.S. Department of 

Transportation (DOT) used both a 

‘‘domestic’’ SCC value of $2 per ton of 

CO2 and a ‘‘global’’ SCC value of $33 per 

ton of CO2 for 2007 emission reductions 

(in 2007$), increasing both values at 2.4 

percent per year.37 DOT also included a 

sensitivity analysis at $80 per ton of 

CO2. See Average Fuel Economy 

Standards Passenger Cars and Light 

Trucks Model Year 2011, 74 FR 14196 

(March 30, 2009) (Final Rule); Final 

Environmental Impact Statement 

Corporate Average Fuel Economy 

Standards, Passenger Cars and Light 

Trucks, Model Years 2011–2015 at 3–90 

(Oct. 2008) (Available at: 

www.nhtsa.gov/fuel-economy). A 

domestic SCC value is meant to reflect 

the value of damages in the United 

States resulting from a unit change in 

carbon dioxide emissions, while a 

global SCC value is meant to reflect the 

value of damages worldwide. 

A 2008 regulation proposed by DOT 

assumed a domestic SCC value of $7 per 

ton of CO2 (in 2006$) for 2011 emission 

reductions (with a range of $0–$14 for 

sensitivity analysis), also increasing at 

2.4 percent per year. See Average Fuel 

Economy Standards, Passenger Cars 

and Light Trucks, Model Years 2011– 

2015, 73 FR 24352 (May 2, 2008) 

(Proposed Rule); Draft Environmental 

Impact Statement Corporate Average 

Fuel Economy Standards, Passenger 

Cars and Light Trucks, Model Years 

2011–2015 at 3–58 (June 2008) 

(Available at: www.nhtsa.gov/fueleconomy). A regulation for packaged 

terminal air conditioners and packaged 

terminal heat pumps finalized by DOE 

in October of 2008 used a domestic SCC 

range of $0 to $20 per ton CO2 for 2007 

emission reductions (in 2007$). 73 FR 

58772, 58814 (Oct. 7, 2008) In addition, 

EPA’s 2008 Advance Notice of Proposed 

Rulemaking for Greenhouse Gases 

identified what it described as ‘‘very 

preliminary’’ SCC estimates subject to 

revision. See Regulating Greenhouse 

Gas Emissions Under the Clean Air Act, 

73 FR 44354 (July 30, 2008). EPA’s 

global mean values were $68 and $40 

per ton CO2 for discount rates of 

approximately 2 percent and 3 percent, 

respectively (in 2006$ for 2007 

emissions). 

In 2009, an interagency process was 

initiated to offer a preliminary 

assessment of how best to quantify the 

benefits from reducing carbon dioxide 

emissions. To ensure consistency in 

how benefits are evaluated across 

agencies, the Administration sought to 

develop a transparent and defensible 

method, specifically designed for the 

rulemaking process, to quantify avoided 

climate change damages from reduced 

CO2 emissions. The interagency group 

did not undertake any original analysis. 

Instead, it combined SCC estimates from 

the existing literature to use as interim 

values until a more comprehensive 

analysis could be conducted. The 

outcome of the preliminary assessment 

by the interagency group was a set of 

five interim values: Global SCC 

estimates for 2007 (in 2006 dollars) of 

$55, $33, $19, $10, and $5 per ton of 

CO2. These interim values represent the 

first sustained interagency effort within 

the U.S. government to develop an SCC 

for use in regulatory analysis. The 

results of this preliminary effort were 

presented in several proposed and final 

rules and were offered for public 

comment in connection with proposed 

rules, including the joint EPA–DOT fuel 

economy and CO2 tailpipe emission 

proposed rules. 

c. Current Approach and Key 

Assumptions 

Since the release of the interim 

values, the interagency group 

reconvened on a regular basis to 

generate improved SCC estimates, 

which were used in this direct final 

rule. Specifically, the group considered 

public comments and further explored 

the technical literature in relevant 

fields. The interagency group relied on 

three integrated assessment models 

(IAMs) commonly used to estimate the 

SCC: The FUND, DICE, and PAGE 

models.38 These models are frequently 

cited in the peer-reviewed literature and 

were used in the last assessment of the 

Intergovernmental Panel on Climate 

Change. Each model was given equal 

weight in the SCC values that were 

developed. 

Each model takes a slightly different 

approach to model how changes in 

emissions result in changes in economic 

damages. A key objective of the 

interagency process was to enable a 

consistent exploration of the three 

models while respecting the different 

approaches to quantifying damages 

taken by the key modelers in the field. 

An extensive review of the literature 

was conducted to select three sets of 

input parameters for these models: 

Climate sensitivity, socio-economic and 

emissions trajectories, and discount 

rates. A probability distribution for 

climate sensitivity was specified as an 

input into all three models. In addition, 

the interagency group used a range of 

scenarios for the socio-economic 

parameters and a range of values for the 

discount rate. All other model features 

were left unchanged, relying on the 

model developers’ best estimates and 

judgments. 

The interagency group selected four 

SCC values for use in regulatory 

analyses. Three values are based on the 

average SCC from three integrated 

assessment models, at discount rates of 

2.5, 3, and 5 percent. The fourth value, 

which represents the 95th percentile 

SCC estimate across all three models at 

a 3-percent discount rate, is included to 

represent higher-than-expected impacts 

from temperature change further out in 

the tails of the SCC distribution. 


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39Table A1 presents SCC values through 2050. 

For DOE’s calculation, it derived values after 2050 

using the 3-percent per year escalation rate used by 

the interagency group. 

40For additional information, refer to U.S. Office 

of Management and Budget, Office of Information 

and Regulatory Affairs. 2006 Report to Congress on 

the Costs and Benefits of Federal Regulations and 

Unfunded Mandates on State, Local, and Tribal 

Entities. 2006. Washington, DC. 

41OMB, Circular A–4: Regulatory Analysis (Sept. 

17, 2003). 

TABLE IV.13—SOCIAL COST OF CO2, 2010–2050 

[In 2007 dollars per metric ton] 

Discount rate 

5% 

Avg 

3% 

Avg 

2.5% 

Avg 

3% 

95th 

2010 ................................................................................................................................. 4.7 21.4 35.1 64.9 

2015 ................................................................................................................................. 5.7 23.8 38.4 72.8 

2020 ................................................................................................................................. 6.8 26.3 41.7 80.7 

2025 ................................................................................................................................. 8.2 29.6 45.9 90.4 

2030 ................................................................................................................................. 9.7 32.8 50.0 100.0 

2035 ................................................................................................................................. 11.2 36.0 54.2 109.7 

2040 ................................................................................................................................. 12.7 39.2 58.4 119.3 

2045 ................................................................................................................................. 14.2 42.1 61.7 127.8 

2050 ................................................................................................................................. 15.7 44.9 65.0 136.2 

It is important to recognize that a 

number of key uncertainties remain, and 

that current SCC estimates should be 

treated as provisional and revisable 

since they will evolve with improved 

scientific and economic understanding. 

The interagency group also recognizes 

that the existing models are imperfect 

and incomplete. The National Research 

Council report mentioned above points 

out that there is tension between the 

goal of producing quantified estimates 

of the economic damages from an 

incremental ton of carbon and the limits 

of existing efforts to model these effects. 

There are a number of concerns and 

problems that should be addressed by 

the research community, including 

research programs housed in many of 

the agencies participating in the 

interagency process to estimate the SCC. 

DOE recognizes the uncertainties 

embedded in the estimates of the SCC 

used for cost-benefit analyses. As such, 

DOE and others in the U.S. Government 

intend to periodically review and 

reconsider those estimates to reflect 

increasing knowledge of the science and 

economics of climate impacts, as well as 

improvements in modeling. In this 

context, statements recognizing the 

limitations of the analysis and calling 

for further research take on exceptional 

significance. 

In summary, in considering the 

potential global benefits resulting from 

reduced CO2 emissions, DOE used the 

most recent values identified by the 

interagency process, adjusted to 2010$ 

using the GDP price deflator. For each 

of the four cases specified, the values 

used for emissions in 2010 were $4.9, 

$22.3, $36.5, and $67.6 per metric ton 

avoided (values expressed in 2010$).39

To monetize the CO2 emissions 

reductions expected to result from 

amended standards for dishwashers, 

DOE used the values identified in Table 

A1 of the ‘‘Social Cost of Carbon for 

Regulatory Impact Analysis Under 

Executive Order 12866,’’ which is 

reprinted in appendix 16–A of the direct 

final rule TSD, appropriately adjusted to 

2010$. To calculate a present value of 

the stream of monetary values, DOE 

discounted the values in each of the 

four cases using the specific discount 

rate that had been used to obtain the 

SCC values in each case. 

2. Valuation of Other Emissions 

Reductions 

DOE investigated the potential 

monetary benefit of reduced NOX

emissions from the TSLs it considered. 

As noted above, amended energy 

conservation standards would reduce 

NOX emissions in those 22 States that 

are not affected by the CAIR, in addition 

to the reduction in site NOX emissions 

nationwide. DOE estimated the 

monetized value of NOX emissions 

reductions resulting from each of the 

TSLs considered for today’s direct final 

rule based on environmental damage 

estimates from the literature. Available 

estimates suggest a very wide range of 

monetary values, ranging from $370 per 

ton to $3,800 per ton of NOX from 

stationary sources, measured in 2001$ 

(equivalent to a range of $450 to $4,623 

per ton in 2010$).40 In accordance with 

OMB guidance, DOE conducted two 

calculations of the monetary benefits 

derived using each of the economic 

values used for NOX, one using a real 

discount rate of 3 percent and another 

using a real discount rate of 7 percent.41

DOE is aware of multiple agency 

efforts to determine the appropriate 

range of values used in evaluating the 

potential economic benefits of reduced 

Hg emissions. DOE has decided to await 

further guidance regarding consistent 

valuation and reporting of Hg emissions 

before it monetizes Hg in its 

rulemakings. 

V. Analytical Results 

The following section addresses the 

results from DOE’s analyses with 

respect to potential energy conservation 

standards for residential dishwashers. It 

addresses the TSLs examined by DOE, 

the projected impacts of each of these 

levels if adopted as energy conservation 

standards for dishwashers, and the 

standards levels that DOE sets forth in 

today’s direct final rule. Additional 

details regarding DOE’s analyses are 

contained in the publicly available 

direct final rule TSD supporting this 

notice. 

A. Trial Standard Levels 

DOE analyzed the benefits and 

burdens of four TSLs for residential 

dishwashers. These TSLs were 

developed using combinations of 

efficiency levels for the standard and 

compact product classes analyzed by 

DOE. DOE presents the results for those 

TSLs in today’s final rule. DOE presents 

the results for all efficiency levels that 

it analyzed in the direct final rule TSD. 

Table V.1 presents the TSLs and the 

corresponding efficiency levels for 

dishwashers. TSL 4 represents the 

maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for residential dishwashers. 

TSL 3 consists of the next efficiency 

level below the max-tech level for 

standard dishwashers, and the max-tech 

level for compacts. The efficiency levels 

in TSL 2 correspond to the 

recommended levels in the Joint 

Petition. TSL 1 consists of the first 


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42 DOE did not analyze subgroup impacts for 

compact dishwashers because the saturation of 

these products is extremely small. 

efficiency levels considered above the 

baseline. 

TABLE V.1—TRIAL STANDARD LEVELS FOR RESIDENTIAL DISHWASHERS

TSL 

Standard Compact 

CSL Annual energy use 

(KwH) CSL Annual energy use (kWh) 

1 ............................................................................................... 1 324 1 222 

2 ............................................................................................... 2 307 1 222 

3 ............................................................................................... 4 234 2 154 

4 ............................................................................................... 5 180 2 154 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Individual 

Consumers 

a. Life-Cycle Cost and Payback Period 

Consumers affected by new or 

amended standards usually experience 

higher purchase prices and lower 

operating costs. Generally, the impacts 

on individual consumers are best 

captured by changes in LCC and by the 

PBP. Therefore, DOE calculated the LCC 

and PBP analyses for the potential 

standard levels considered in this 

rulemaking. DOE’s LCC and PBP 

analyses provided key outputs for each 

TSL, which are reported by dishwasher 

product class in Table V.2 and Table 

V.3. The LCC and its components refer 

to the average values at each efficiency 

level. The average LCC savings 

(averaged over all sample consumers), 

as well as the fraction of product 

consumers for which the LCC will 

decrease (net benefit), increase (net 

cost), or exhibit no change (no impact), 

are relative to the base-case efficiency 

distribution. The last column in the 

tables is the median PBP for the 

consumer purchasing a design that 

complies with the TSL. DOE presents 

the median PBP because it is the most 

statistically robust measure of the PBP. 

The results for each potential standard 

level are relative to the efficiency 

distribution in the base case (no 

amended standards). DOE based the 

LCC and PBP analyses on the range of 

energy consumption under conditions 

of actual product use. 

TABLE V.2—LCC AND PBP RESULTS FOR STANDARD DISHWASHERS

TSL 

Efficiency 

level 

(kWh/yr) 

Life-cycle cost (2010$) LCC savings Payback 

period 

(years) Installed 

cost 

Discounted 

operating 

cost 

LCC 

Average 

savings 

(2010$) 

Percent of households that experience 

Net cost No impact Net benefit Median 

1 ................................................ 324 $656 $445 $1,101 $1 2 96 2 5.9 

2 ................................................ 307 674 411 1,086 3 19 64 17 11.8 

3 ................................................ 234 734 318 1,052 41 30 20 50 6.6 

4 ................................................ 180 745 232 977 108 23 9 68 4.5 

TABLE V.3—LCC AND PBP RESULTS FOR COMPACT DISHWASHERS

TSL 

Efficiency 

level 

(kWh/yr) 

Life-cycle cost (2010$) LCC savings Payback 

period 

(years) Installed 

cost 

Discounted 

operating 

cost 

LCC 

Average 

savings 

(2010$) 

Percent of households that experience 

Net cost No impact Net benefit Median 

1, 2 ............................................ 222 $623 $297 $920 $12 7 76 18 0.3 

3, 4 ............................................ 154 638 206 844 52 5 50 44 2.1 

For standard-sized dishwashers, DOE 

also considered an alternative base-case 

efficiency distribution that uses a 

different set of historical data. LCC and 

PBP results using this distribution are 

described in appendix 8–F of the direct 

final rule TSD. 

b. Consumer Subgroup Analysis 

As described in section IV.H, DOE 

determined the impact of the considered 

TSLs on low-income households and 

senior-only households.42 Table V.4 

compares the average LCC savings at 

each efficiency level for the two 

consumer subgroups, along with the 

average LCC savings for the entire 

sample for each product class for 

dishwashers. For today’s standards, the 

average LCC savings for low-income 

households and senior-only households 

at the considered efficiency levels are 

not substantially different from the 

average for all households. At higher 

efficiency levels the average LCC 

savings for these subgroups are 

somewhat lower than the average for all 

households. Chapter 11 of the direct 

final rule TSD presents the complete 

LCC and PBP results for the two 

subgroups. 


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TABLE V.4—STANDARD DISHWASHERS: COMPARISON OF AVERAGE LCC SAVINGS FOR CONSUMER SUBGROUPS AND ALL

HOUSEHOLDS

TSL Low-income 

households 

Senior-only 

households All households 

2010$ 

1 ....................................................................................................................................... $0 $0 $1 

2 ....................................................................................................................................... 3 2 3 

3 ....................................................................................................................................... 26 24 41 

4 ....................................................................................................................................... 84 78 108 

c. Rebuttable Presumption Payback 

As discussed above, EPCA provides a 

rebuttable presumption that an energy 

conservation standard is economically 

justified if the increased purchase cost 

for a product that meets the standard is 

less than three times the value of the 

first-year energy savings resulting from 

the standard. In calculating a rebuttable 

presumption payback period for the 

considered standard levels, DOE used 

discrete values rather than distributions 

for input values, and, as required by 

EPCA, based the energy use calculation 

on the DOE test procedures for 

residential dishwashers. As a result, 

DOE calculated a single rebuttable 

presumption payback value, and not a 

distribution of payback periods, for each 

efficiency level. 

Table V.5 presents the average 

rebuttable presumption payback periods 

for the considered TSLs. While DOE 

examined the rebuttable-presumption 

criterion, it considered whether the 

standard levels considered for today’s 

rule are economically justified through 

a more detailed analysis of the 

economic impacts of those levels 

pursuant to 42 U.S.C. 6295(o)(2)(B)(i). 

The results of that analysis serve as the 

basis for DOE to evaluate the economic 

justification for a potential standard 

level (thereby supporting or rebutting 

the results of any preliminary 

determination of economic 

justification). 

TABLE V.5—DISHWASHERS: REBUTTABLE PBPS

Trial standard level 

1 2 3 4 

Standard (years) .............................................................................................................. 5.40 5.51 5.57 4.00 

Compact (years) .............................................................................................................. 0.23 0.23 1.02 1.02 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate 

the impact of amended energy 

conservation standards on 

manufacturers of residential 

dishwashers. The section below 

describes the expected impacts on 

manufacturers at each TSL. Chapter 12 

of the direct final rule TSD explains the 

analysis in further detail. 

a. Industry Cash Flow Analysis Results 

DOE modeled two scenarios using 

different markup assumptions. Each 

scenario results in a unique set of cash 

flows and corresponding industry value 

at each TSL. These assumptions 

correspond to the bounds of a range of 

market responses that DOE anticipates 

could occur in the standards case. The 

tables below depict the financial 

impacts on manufacturers (represented 

by changes in INPV) and the conversion 

costs DOE estimates manufacturers 

would incur at each TSL. The first table 

corresponds to the flat markup scenario 

and reflects the lower (less severe) 

bound of impacts whereas the second 

table corresponds to the preservation of 

operating profit scenario and reflects the 

upper bound of impacts. 

The INPV results refer to the 

difference in industry value between the 

base case and the standards case, which 

DOE calculated by summing the 

discounted industry cash flows from the 

base year (2012) through the end of the 

analysis period. The discussion also 

notes the difference in cash flow 

between the base case and the standards 

case in the year before the compliance 

date of potential amended energy 

conservation standards. This figure 

provides an estimate of the required 

conversion costs relative to the cash 

flow generated by the industry in the 

base case. 

TABLE V.6—MANUFACTURER IMPACT ANALYSIS FOR RESIDENTIAL DISHWASHERS—FLAT MARKUP SCENARIO

Units Base case 

Trial standard level 

1 2 3 4 

INPV ............................................. (2010$ millions) ............................ 637.5 593.2 563.6 508.6 491.9 

Change in INPV ............................ (2010$ millions) ............................ .................... (44.3) (73.9) (128.9) (145.6) 

(%) ................................................ .................... ¥7.0% ¥11.6% ¥20.2% ¥22.8% 

Product Conversion Costs ............ (2010$ millions) ............................ .................... 27.8 34.9 66.5 76.7 

Capital Conversion Costs ............. (2010$ millions) ............................ .................... 45.5 59.1 195.4 226.3 

Total Conversion Costs ......... (2010$ millions) ............................ .................... 73.2 94.0 261.9 303.0 


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TABLE V.7—MANUFACTURER IMPACT ANALYSIS FOR RESIDENTIAL DISHWASHERS—TIERED MARKUP SCENARIO

Units Base case 

Trial standard level 

1 2 3 4 

INPV ............................................. (2010$ millions) ............................ 637.5 592.2 552.9 463.1 434.8 

Change in INPV ............................ (2010$ millions) ............................ .................... (45.3) (84.6) (174.4) (202.7) 

(%) ................................................ .................... ¥7.1% ¥13.3% ¥27.4% ¥31.8% 

Product Conversion Costs ............ (2010$ millions) ............................ .................... 27.8 34.9 66.5 76.7 

Capital Conversion Costs ............. (2010$ millions) ............................ .................... 45.5 59.1 195.4 226.3 

Total Conversion Costs ......... (2010$ millions) ............................ .................... 73.2 94.0 261.9 303.0 

Because standard dishwashers 

represent over 99 percent of shipments 

in the year leading up to amended 

standards, changes to this product class 

contribute the majority of impacts to 

INPV across all TSLs analyzed in this 

rulemaking. 

At TSL 1, DOE estimates impacts on 

INPV to range from ¥$44.3 million to 

¥$45.3 million, or a change in INPV of 

¥7.0 percent to ¥7.1 percent. At this 

level, industry free cash flow is 

estimated to decrease by approximately 

56.5 percent to $21.9 million, compared 

to the base-case value of $50.5 million 

in the year leading up to the amended 

energy conservation standards. As TSL 

1 corresponds to current ENERGY STAR 

standards, and these products represent 

over 96 percent of shipments in the year 

leading up to amended standards, only 

a very small fraction of the market is 

affected at this efficiency level. In either 

markup scenario, the impact to INPV at 

TSL 1 stems from the conversion costs 

required to switch production lines 

from manufacturing baseline units to 

those meeting the standards set at EL 1 

for both product classes. 

As a large fraction of the energy used 

in dishwashing is associated with 

heating the wash water, the design 

options proposed to meet this efficiency 

level relate primarily to minimizing the 

amount of wash water through sprayarm optimization and enabling greater 

control over the wash water 

temperature. Both of these practices are 

in common use in higher efficiency 

platforms across the industry and 

contribute to an MPC of $209.25 for 

standard dishwashers. Because the 

industry already produces a substantial 

number of products at this efficiency 

level, product and capital conversion 

costs are limited to 73.2 million, which 

accounts for switching production lines 

from baseline products to existing 

higher efficiency platforms. 

TSL 2 represents the efficiency level 

set forth in the Joint Petition, and 

establishes a compliance date of 2013 as 

compared the 2018 compliance date for 

the other TSLs. At TSL 2, DOE estimates 

impacts on INPV to range from ¥$73.9 

million to ¥$84.6 million, or a change 

in INPV of ¥11.6 percent to ¥13.3 

percent. At this level, industry free cash 

flow is estimated to decrease by 

approximately 192.2 percent to ¥$39.2 

million, compared to the base-case 

value of $42.5 million in the year 

leading up to the amended energy 

conservation standards. As with TSL 1, 

the impact to INPV at TSL 2 stems from 

the conversion costs required to switch 

production lines from manufacturing 

baseline units to those meeting the 

standards set at EL 2 for both product 

classes. At TSL 2, these impacts grow as 

the number of products requiring 

changes grows from 3.8 percent of 

shipments in the year leading up to 

amended standards to 36.1 percent. 

As a large fraction of the energy used 

in dishwashing is associated with 

heating wash water, the design options 

proposed to meet this efficiency level 

relate primarily to minimizing the 

amount of wash water through 

additional optimization of the water 

lines as well as upgrades to higher 

efficiency pumps and electronic 

controls. Incorporating these design 

options leads to an estimated MPC of 

$222.80 for standard products. While a 

significant fraction of dishwashers 

currently employ these energy and 

water saving measures, the product and 

capital conversion costs rise to $94.0 

million (as compared to $73.2 million 

for TSL 1), to account for the additional 

switching of production lines to higher 

efficiency platforms. 

At TSL 3, DOE estimates impacts on 

INPV to range from ¥$128.9 million to 

¥$174.4 million, or a change in INPV 

of ¥20.2 percent to ¥27.4 percent. At 

this level, industry free cash flow is 

estimated to decrease by approximately 

212.6 percent to ¥$56.8 million, 

compared to the base-case value of 

$50.5 million in the year leading up to 

the amended energy conservation 

standards. While TSL 3 returns the 

compliance date to 2018 (5 years after 

the compliance date for TSL 2) the 

impact to INPV is more severe as less 

than 20 percent of shipments in the year 

leading up to amended standards meet 

or exceed this efficiency level. As such, 

the capital and product conversion costs 

required to bring these products into 

compliance rise significantly to a total 

of $261.9 million, $167.9 million more 

than at TSL 2. These conversion costs 

stem from both the research programs 

needed to develop such optimized 

products and the capital investment 

required to change over the majority of 

production lines to produce these high 

efficiency products. 

The design options proposed to meet 

efficiency standards at TSL 3 include 

exchanging a heated drying system for 

a condensation drying system, further 

optimizing the hydraulic system 

(extending to a redesign of both the 

sump and water lines), and 

incorporating a flow meter, temperature 

control, and a humidity sensor to finely 

tune water consumption, temperature, 

and the drying cycle. Beyond 

component exchanges alone, the design 

options proposed at TSL 3 extend to 

include control strategies that would 

reduce the wash and rinse water 

temperatures. The component changes 

required to enable these improvements 

contribute to an MPC of $266.16 for 

standard dishwashers, $43.37 above that 

at TSL 2. 

At TSL 4, DOE estimates impacts on 

INPV to range from ¥$145.6 million to 

¥$202.7 million, or a change in INPV 

of ¥22.8 percent to ¥31.8 percent. At 

this level, industry free cash flow is 

estimated to decrease by approximately 

¥246.0 percent to ¥$73.7 million, 

compared to the base-case value of 

$50.5 million in the year leading up to 

the amended energy conservation 

standards. TSL 4 represents the maxtech efficiency level for all dishwashers. 

The effects on INPV result from similar 

sources as TSL 3, but the fraction of 

products in the market that currently 

meet this standard is reduced to less 

than 9 percent in the year leading up to 

amended standards. As such, standards 

at TSL 4 would affect nearly all 

platforms and will result in substantial 


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capital conversion costs associated with 

improvements to nearly all production 

facilities. Because so few products exist 

at this level today, nearly all 

manufacturers would face complete 

redesigns for products to meet this 

standard. Accordingly, the product 

conversion costs increase to reflect this 

substantial research effort. The total 

conversion cost required to meet 

standards at TSL 5 is approximately 

$303.0 million—a $41.1 million 

increase from TSL 4. 

The design options proposed to meet 

the efficiency levels specified at TSL 4 

start with those at TSL 3, but replace the 

in-line flow-through water heater with 

one that is integrated with the pump 

and eliminate the fan used to circulate 

air during drying. Where these design 

options have little impact on the 

product MPC, contributing to only a 

$7.77 increase over that at TSL 3, they 

significantly impact INPV because of the 

large conversion costs associated with 

developing and producing these highly 

optimized products. 

b. Impacts on Employment 

DOE used the GRIM to estimate the 

domestic labor expenditures and 

number of domestic production workers 

in the base case and at each TSL from 

2012 to 2047. DOE used the labor 

content of each product and the 

manufacturing production costs from 

the engineering analysis to estimate the 

total annual labor expenditures 

associated with residential dishwashers 

sold in the United States. Using 

statistical data from the most recent U.S. 

Census Bureau’s 2009 ‘‘Annual Survey 

of Manufactures’’ and interviews with 

manufacturers, DOE estimates that 95 

percent of residential dishwashers sold 

in the United States are manufactured 

domestically and hence that portion of 

total labor expenditures is attributable 

to domestic labor. Labor expenditures 

for the manufacture of a product are a 

function of the labor intensity of the 

product, the sales volume, and an 

assumption that wages in real terms 

remain constant. 

Using the GRIM, DOE forecasts the 

domestic labor expenditure for 

residential dishwasher production labor 

in 2018 will be approximately $248.7 

million. Using the $27.03 hourly wage 

rate including fringe benefits and 2,003 

production hours per year per employee 

found in the 2009 ASM, DOE estimates 

there will be approximately 4,593 

domestic production workers involved 

in manufacturing residential 

dishwashers in 2018, the year in which 

amended standards would go into effect 

for TSL 1, TSL 3, and TSL 4. In 

addition, DOE estimates that 1,120 nonproduction employees in the United 

States will support residential 

dishwasher production.43 The 

employment spreadsheet of the 

residential dishwasher GRIM shows the 

annual domestic employment impacts 

in further detail. 

The production worker estimates in 

this section cover workers only up to 

the line-supervisor level who are 

directly involved in fabricating and 

assembling dishwashers within an 

Original Equipment Manufacturer 

(OEM) facility. Workers performing 

services that are closely associated with 

production operations, such as material 

handling with a forklift, are also 

included as production labor. 

Additionally, the employment impacts 

shown are independent of the 

employment impacts from the broader 

U.S. economy, which are documented 

in chapter 13 of the direct final rule 

TSD. 

Table V.8 depicts the potential levels 

of production employment that could 

result following amended energy 

conservation standards as calculated by 

the GRIM. The employment levels 

shown reflect the scenario in which 

manufacturers continue to produce the 

same scope of covered products in 

domestic facilities and domestic 

production is not shifted to lower-laborcost countries. If all existing production 

were moved outside of the United 

States, the expected impact to domestic 

manufacturing employment would be a 

loss of 4,593 jobs, the equivalent of the 

total base case employment. Because 

there is a risk of manufacturers 

evaluating sourcing decisions in 

response to amended energy 

conservation standards, the expected 

impact to domestic production 

employment falls between the potential 

increases as shown in Table V.8, and the 

levels of job loss associated with all 

domestic dishwasher manufacturing 

moving outside of the United States. 

The discussion below includes a 

qualitative evaluation of the likelihood 

of negative domestic production 

employment impacts at the various 

TSLs. 

TABLE V.8—TOTAL NUMBER OF DOMESTIC RESIDENTIAL DISHWASHER PRODUCTION WORKERS IN 2018 * 

Base case 

Trial standard level 

1 2 3 4 

Total Number of Domestic Production Workers in 2018 (without 

changes in production locations) ......................................................... 4,593 4,601 4,679 4,658 4,799 

* The compliance date for residential dishwashers at TSL 1, TSL 3, and TSL 4 is 2018. At TSL 2, the compliance date is 2013 as specified by 

the Joint Petition. 

All examined TSLs show relatively 

minor impacts on domestic employment 

levels relative to total industry 

employment. At all TSLs, most of the 

design options analyzed by DOE do not 

greatly alter the labor content of the 

final product. For example, longer or 

more complex wash cycles or improved 

sump designs involve one-time changes 

to the final product but do not 

significantly change the number of steps 

required for the final assembly of the 

dishwasher (which would add labor). 

Because many manufacturers have 

recently introduced high efficiency 

products in the United States that meet 

or exceed the standards in today’s final 

rule, it is unlikely today’s direct final 

rule would greatly impact the sourcing 

decisions of these manufacturers. 

However, at higher TSLs, some of the 

design options analyzed greatly impact 

the ability of manufacturers to make 

product changes within existing 

platforms. The very large upfront capital 

costs at these levels could influence the 

decision of some manufacturers to 

relocate some or all of their domestic 

production of dishwashers to lower 

labor cost countries. 

c. Impacts on Manufacturing Capacity 

Nearly 64 percent of shipments of 

residential dishwashers already comply 

with the amended energy conservation 

standards as agreed upon in the Joint 

Petition and established in this 

rulemaking. Every manufacturer that 

ships standard dishwashers offers 

products that meet these amended 

energy conservation standards. Because 

manufacturers would need to make only 

minor platform changes and/or increase 


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44National energy and water savings are 

cumulative over a 30-year period. Any savings for 

products entering the housing stock in this 30-year 

period which occur beyond the 30-year time limit 

are not reported in the national totals. 

45Chapter 10 of the direct final rule TSD presents 

tables that also show the magnitude of the energy 

savings if the savings are discounted at rates of 7 

percent and 3 percent. Discounted energy savings 

represent a policy perspective in which energy 

savings realized farther in the future are less 

significant than energy savings realized in the 

nearer term. 

the production of existing products by 

the 2013 compliance date, the 

experience of multiple manufacturers 

that already produce standardscompliant dishwashers would allow the 

industry to meet the amended energy 

conservation standards proposed in the 

Joint Petition without any significant 

impact to manufacturing capacity in the 

interim. 

d. Impacts on Sub-Groups of 

Manufacturers 

Using average cost assumptions to 

develop an industry cash-flow estimate 

may not be adequate for assessing 

differential impacts among 

manufacturer subgroups. Small 

manufacturers, niche equipment 

manufacturers, and manufacturers 

exhibiting a cost structure substantially 

different from the industry average 

could be affected disproportionately. 

DOE analyzed the impacts to small 

business, as discussed in section VI.B. 

DOE did not identify any other 

subgroups for residential dishwashers 

for this rulemaking. 

e. Cumulative Regulatory Burden 

While any one regulation may not 

impose a significant burden on 

manufacturers, the combined effects of 

several impending regulations may have 

serious consequences for some 

manufacturers, groups of manufacturers, 

or an entire industry. Assessing the 

impact of a single regulation may 

overlook this cumulative regulatory 

burden. In addition to energy 

conservation standards, other 

regulations can significantly affect 

manufacturers’ financial operations. 

Multiple regulations affecting the same 

manufacturer can strain profits and can 

lead companies to abandon product 

lines or markets with lower expected 

future returns than competing products. 

For these reasons, DOE conducts an 

analysis of cumulative regulatory 

burden as part of its rulemakings 

pertaining to appliance efficiency. 

Manufacturers provided comment on 

some of these regulations during 

interviews. DOE summarizes and 

addresses these comments in section 

IV.I.3. For the cumulative regulatory 

burden, DOE attempts to quantify or 

describe the impacts of other Federal 

regulations that have a compliance date 

within approximately 3 years of the 

compliance date of this rulemaking. 

Most of the major regulations identified 

by DOE that meet this criterion are other 

energy conservation standards for 

products and equipment made by 

manufacturers of residential 

dishwashers. See chapter 12 of the 

direct final rule TSD for the results of 

DOE’s analysis of the cumulative 

regulatory burden. 

3. National Impact Analysis 

a. Significance of Energy Savings 

To estimate the energy savings 

attributable to potential standards for 

dishwashers, DOE compared the energy 

consumption of those products under 

the base case to their anticipated energy 

consumption under each TSL. Table V.9 

presents DOE’s projections of the 

national energy savings and national 

water savings for each TSL considered 

for dishwashers.44 The savings were 

calculated using the approach described 

in section IV.G.45 For standard-sized 

dishwashers, DOE also considered an 

alternative base-case efficiency trend 

that was estimated using a different set 

of historical data. Results calculated 

using this trend are described in 

appendix 10–D of the direct final rule 

TSD. 

TABLE V.9—DISHWASHERS: CUMULATIVE NATIONAL ENERGY AND WATER SAVINGS (2018–2047) * 

Trial standard level 

1 2 3 4 

Energy (quads) ................................................................................................................ 0.02 0.07 0.94 1.59 

Water (trillion gallons) ...................................................................................................... 0.01 0.14 0.56 1.71 

* For TSL 2, the impacts are counted for 2013–2047. 

b. Net Present Value of Consumer Costs 

and Benefits 

DOE estimated the cumulative NPV to 

the nation of the total costs and savings 

for consumers that would result from 

particular standard levels for 

dishwashers. In accordance with the 

OMB’s guidelines on regulatory analysis 

(OMB Circular A–4, section E, 

September 17, 2003), DOE calculated 

NPV using both a 7-percent and a 3- 

percent real discount rate. The 7-percent 

rate is an estimate of the average beforetax rate of return to private capital in the 

U.S. economy, and reflects the returns 

to real estate and small business capital 

as well as corporate capital. DOE used 

this discount rate to approximate the 

opportunity cost of capital in the private 

sector, since recent OMB analysis has 

found the average rate of return to 

capital to be near this rate. In addition, 

DOE used the 3-percent rate to capture 

the potential effects of standards on 

private consumption (e.g., through 

higher prices for products and the 

purchase of reduced amounts of energy). 

This rate represents the rate at which 

society discounts future consumption 

flows to their present value. This rate 

can be approximated by the real rate of 

return on long-term government debt 

(i.e., yield on Treasury notes minus 

annual rate of change in the Consumer 

Price Index), which has averaged about 

3 percent on a pre-tax basis for the last 

30 years. 

Table V.10 shows the consumer NPV 

results for each TSL DOE considered for 

dishwashers, using a 3-percent and a 

7-percent discount rate. The impacts are 

counted over the lifetime of products 

purchased in 2018–2047 for TSLs 1, 3 

and 4, and in 2013–2047 for TSL 2. 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31951 

46EPCA requires DOE to review its standards at 

least once every 6 years, and requires, for certain 

products including dishwashers, a 3 year period 

after any new standard is promulgated before 

compliance is required, except that in no case may 

any new standards be required within 6 years of the 

compliance date of the standards established in this 

direct final rule. While adding a 6-year review to 

the 3-year compliance period adds up to 9 years, 

DOE notes that it may undertake reviews at any 

time within the 6 year period and that the 3-year 

compliance date may yield to the 6-year backstop. 

A 9-year analysis period does not reflect the 

variability that may occur in the timing of standards 

reviews and the fact that for some consumer 

products, the compliance period is 5 years rather 

than 3 years. 

47National energy and water savings are 

cumulative over the 9-year period. Any savings for 

products entering the housing stock in this 9-year 

period which occur beyond the 9-year time limit are 

not reported in the national totals. In contrast, the 

social benefit and cost estimates include the 

benefits and costs that are incurred over the lifetime 

of the dishwashers irrespective of when they are 

purchased. 

TABLE V.10—DISHWASHERS: CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR PRODUCTS SHIPPED IN

2018–2047 * 

Discount rate 

Trial standard level 

1 2 3 4 

Billion 2010$ 

3 percent .......................................................................................................................... 0.12 0.46 6.51 17.45 

7 percent .......................................................................................................................... 0.03 0.08 1.96 5.88 

* For TSL 2, the impacts are counted over the lifetime of products shipped in 2013–2047. 

The NPV results presented in Table 

V.10 are based on the default product 

price trend. As discussed in section 

IV.G.3, DOE developed several 

sensitivity cases with alternative 

forecasts of future prices of 

dishwashers. The impact of these 

alternative forecasts on the NPV results 

is presented in appendix 10–C of the 

direct final rule TSD. 

For standard-sized dishwashers, DOE 

also considered an alternative base-case 

efficiency trend that was estimated 

using a different set of historical data. 

NPV results calculated using this trend 

are described in appendix 10–D of the 

direct final rule TSD. 

Circular A–4 requires agencies to 

present analytical results, including 

separate schedules of the monetized 

benefits and costs that show the type 

and timing of benefits and costs. 

Circular A–4 also directs agencies to 

consider the variability of key elements 

underlying the estimates of benefits and 

costs. DOE believes its standard 30-year 

analysis is fully compliant with Circular 

A–4. For this rulemaking, DOE 

undertook an additional sensitivity 

analysis of its standard 30-year analysis, 

in compliance with Circular A–4, using 

a 9-year analytical period. The choice of 

a 9-year period is a proxy for the 

timeline in EPCA for the review of the 

energy conservation standard 

established in this direct final rule and 

potential revision of and compliance 

with a new standard for dishwashers.46

The timeframe established in EPCA may 

not be statistically relevant with regard 

to the product lifetime, product 

manufacturing cycles or other factors 

specific to dishwashers. DOE notes that 

the review timeframe established in 

EPCA generally does not overlap with 

the product lifetime, product 

manufacturing cycles or other factors 

specific to dishwashers. Thus, this 

information is presented for 

informational purposes only and is not 

indicative of any change in DOE’s 

analytical methodology. 

The sensitivity analysis results based 

on a 9-year analytical period are 

presented below. Table IV.11 presents 

DOE’s forecasts of the national energy 

savings and national water savings for 

each TSL for dishwashers.47 Table IV.12 

shows the consumer NPV results for 

each TSL DOE considered for 

dishwashers, using a 3-percent and a 7- 

percent discount rate. For determination 

of the NPV, the impacts are counted 

over the lifetime of products purchased 

in 2018–2026 for TSLs 1, 3 and 4, and 

in 2013–2021 for TSL 2 (note that the 

NPV estimate incorporates all of the 

operating cost savings of dishwashers 

purchased in the 9 year analytical 

period). 

TABLE V.11—DISHWASHERS: CUMULATIVE NATIONAL ENERGY AND WATER SAVINGS, NINE-YEAR ANALYSIS PERIOD

(2018–2026) * 

Trial standard level 

1 2 3 4 

Energy (quads) ................................................................................................................ 0.00 0.01 0.13 0.22 

Water (trillion gallons) ...................................................................................................... 0.00 0.02 0.08 0.24 

* For TSL 2, the impacts are counted for 2013–2021. 

TABLE V.12—DISHWASHERS: CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR PRODUCTS SHIPPED IN

2018–2026, NINE-YEAR ANALYSIS PERIOD * 

Discount rate 

Trial standard level 

1 2 3 4 

Billion 2010$ 

3 percent .......................................................................................................................... 0.04 0.07 2.15 6.01 

7 percent .......................................................................................................................... 0.02 0.00 0.93 2.89 

* For TSL 2, the impacts are counted over the lifetime of products shipped in 2013–2021. 


srobinson on DSK4SPTVN1PROD with RULES2
31952 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

48EPA issued the final Cross-State Air Pollution 

Rule on July 6, 2011 (www.epa.gov/crossstate 

rule/). The Cross-State Air Pollution Rule will 

replace CAIR. In the emissions analysis for today’s 

amended energy conservation standards, DOE’s 

discussion and conclusions about NOX emissions 

assume the implementation of CAIR. In future 

rulemakings, DOE will adjust its relevant models to 

assume the implementation of the Cross-State Air 

Pollution Rule. 

c. Impacts on Employment 

DOE develops estimates of the 

indirect employment impacts of 

potential standards on the economy in 

general. As discussed above, DOE 

expects energy conservation standards 

for dishwashers to reduce energy bills 

for consumers of those products, and 

the resulting net savings to be redirected 

to other forms of economic activity. 

These expected shifts in spending and 

economic activity could affect the 

demand for labor. As described in 

section IV.J, DOE used an input/output 

model of the U.S. economy to estimate 

indirect employment impacts of the 

TSLs that DOE considered in this 

rulemaking. DOE understands that there 

are uncertainties involved in projecting 

employment impacts, especially 

changes in the later years of the 

analysis. Therefore, DOE generated 

results for near-term timeframes, where 

these uncertainties are reduced. 

The results suggest that today’s 

standards are likely to have negligible 

impact on the net demand for labor in 

the economy. The net change in jobs is 

so small that it would be imperceptible 

in national labor statistics and might be 

offset by other, unanticipated effects on 

employment. Chapter 13 of the direct 

final rule TSD presents detailed results. 

4. Impact on Utility or Performance of 

Products 

As presented in section III.D.1.d of 

this notice, DOE concluded that the TSL 

adopted in this direct final rule would 

not reduce the utility or performance of 

the dishwashers under consideration in 

this rulemaking. Manufacturers of these 

products currently offer units that meet 

or exceed today’s standards. (42 U.S.C. 

6295(o)(2)(B)(i)(IV)) 

5. Impact of Any Lessening of 

Competition 

DOE has also considered any 

lessening of competition that is likely to 

result from amended standards. The 

Attorney General determines the 

impact, if any, of any lessening of 

competition likely to result from a 

proposed standard, and transmits such 

determination to DOE, together with an 

analysis of the nature and extent of such 

impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) 

and (B)(ii)) 

DOE published a NOPR containing 

energy conservation standards identical 

to those set forth in today’s direct final 

rule and transmitted a copy of today’s 

direct final rule and the accompanying 

TSD to the Attorney General, requesting 

that the DOJ provide its determination 

on this issue. DOE will consider DOJ’s 

comments on the rule in determining 

whether to proceed with the direct final 

rule. DOE will also publish and respond 

to DOJ’s comments in the Federal 

Register in a separate notice. 

6. Need of the Nation To Conserve 

Energy 

An improvement in the energy 

efficiency of the products subject to 

today’s rule is likely to improve the 

security of the nation’s energy system by 

reducing overall demand for energy. 

Reduced electricity demand may also 

improve the reliability of the electricity 

system. 

Energy savings from amended 

standards for residential dishwashers 

are expected to produce environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with 

electricity production. Table V.13 

provides DOE’s estimate of cumulative 

CO2, NOX, and Hg emissions reductions 

that would be expected to result from 

the TSLs considered in this rulemaking. 

In the environmental assessment 

(chapter 15 of the direct final rule TSD), 

DOE reports annual CO2, NOX, and Hg 

emissions reductions for each TSL. 

As discussed in section IV.L, DOE has 

not reported SO2 emissions reductions 

from power plants because the NEMS– 

BT modeling system that DOE uses to 

forecast emissions reductions currently 

indicates that no physical reductions in 

power sector emissions would occur for 

SO2. DOE also did not include NOX

emissions reduction from power plants 

in States subject to emissions caps 

because in such a case an energy 

conservation standard would likely not 

affect the overall level of NOX emissions 

in those States.48

TABLE V.13—EMISSIONS REDUCTION ESTIMATED FOR DISHWASHER TRIAL STANDARD LEVELS

[Cumulative in 2018–2047] * 

TSL 1 TSL 2 TSL 3 TSL 4 

CO2 (million metric tons) .................................................................. 1.15 4.06 65.02 98.62 

NOX (thousand tons) ....................................................................... 0.96 3.54 54.27 83.31 

Hg (tons) .......................................................................................... 0.004 0.000 0.274 0.304 

* For TSL 2, the impacts are counted for 2013–2047. 

DOE also estimated monetary benefits 

likely to result from the reduced 

emissions of CO2 and NOX that DOE 

estimated for each of the TSLs 

considered for dishwashers. As 

discussed in section IV.M, DOE used 

values for the SCC developed by an 

interagency process. The four values for 

CO2 emissions reductions in 2010 

resulting from that process (expressed in 

2010$) are $4.9/ton (the average value 

from a distribution that uses a 5-percent 

discount rate), $22.3/ton (the average 

value from a distribution that uses a 

3-percent discount rate), $36.5/ton (the 

average value from a distribution that 

uses a 2.5-percent discount rate), and 

$67.6/ton (the 95th-percentile value 

from a distribution that uses a 3-percent 

discount rate). The values for later years 

are higher due to increasing damages as 

the magnitude of climate change 

increases. For each of the four cases, 

DOE calculated a present value of the 

stream of annual values using the same 

discount rate as used in the studies 

upon which the dollar-per-ton values 

are based. Table V.14 presents the global 

values of CO2 emissions reductions at 

each TSL. DOE calculated domestic 

values as a range from 7 percent to 23 

percent of the global values. Those 

results are presented in Table V.15. 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31953 

TABLE V.14—ESTIMATES OF GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTIONS UNDER DISHWASHER TRIAL

STANDARD LEVELS

TSL 

Million 2010$ 

5% Discount 

rate, average * 

3% Discount 

rate, average * 

2.5% Discount 

rate, average * 

3% Discount 

rate, 95th 

percentile * 

1 ....................................................................................................... 4.88 25.9 44.2 78.9 

2 ....................................................................................................... 16.1 79.5 133 242 

3 ....................................................................................................... 278 1484 2534 4515 

4 ....................................................................................................... 427 2284 3904 6951 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the 

distribution. 

TABLE V.15—ESTIMATES OF DOMESTIC PRESENT VALUE OF CO2 EMISSIONS REDUCTIONS UNDER DISHWASHER TRIAL

STANDARD LEVELS

TSL 

Million 2010$ 

5% Discount rate, average * 3% Discount rate, average * 2.5% Discount rate, 

average * 

3% Discount rate, 95th 

percentile * 

1 ........................ 0 to 1 ..................................... 2 to 6 ..................................... 3 to 10 ................................... 6 to 18. 

2 ........................ 1 to 4 ..................................... 6 to 18 ................................... 9 to 31 ................................... 17 to 56. 

3 ........................ 19 to 64 ................................. 104 to 341 ............................. 177 to 583 ............................. 316 to 1039. 

4 ........................ 30 to 98 ................................. 160 to 525 ............................. 273 to 898 ............................. 487 to 1599. 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the 

distribution. 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other GHG 

emissions to changes in the future 

global climate and the potential 

resulting damages to the world economy 

continues to evolve rapidly. Thus, any 

value placed in this rulemaking on 

reducing CO2 emissions is subject to 

change. DOE, together with other 

Federal agencies, will continue to 

review various methodologies for 

estimating the social value of reductions 

in CO2 and other GHG emissions. This 

ongoing review will consider the 

comments on this subject that are part 

of the public record for this and other 

rulemakings, as well as other 

methodological assumptions and issues. 

However, consistent with DOE’s legal 

obligations, and taking into account the 

uncertainty involved with this 

particular issue, DOE has included in 

this final rule the most recent values 

and analyses resulting from the ongoing 

interagency review process. 

DOE also estimated a range for the 

cumulative monetary value of the 

economic benefits associated with NOX

emissions reductions anticipated to 

result from amended standards for 

residential dishwashers. The dollar-perton values that DOE used are discussed 

in section IV.M. Table V.16 presents the 

cumulative present values for each TSL 

calculated using 3-percent and 7- 

percent discount rates. 

TABLE V.16—ESTIMATES OF PRESENT

VALUE OF NOX EMISSIONS REDUCTIONS UNDER DISHWASHER TRIAL

STANDARD LEVELS

TSL 

3% Discount 

rate 

(million 2010$) 

7% Discount 

rate 

(million 2010$) 

1 .......... 0 to 3 ................ 0 to 1. 

2 .......... 1 to 10 .............. 0 to 5. 

3 .......... 14 to 148 .......... 6 to 59. 

4 .......... 22 to 230 .......... 9 to 91. 

The NPV of the monetized benefits 

associated with emissions reductions 

can be viewed as a complement to the 

NPV of the consumer savings calculated 

for each TSL considered in this 

rulemaking. Table V.17 and Table V.18 

present the NPV values that result from 

adding the estimates of the potential 

economic benefits resulting from 

reduced CO2 and NOX emissions in each 

of four valuation scenarios to the NPV 

of consumer savings calculated for each 

TSL considered in this rulemaking, at 

both a 7-percent and a 3-percent 

discount rate. The CO2 values used in 

the columns of each table correspond to 

the four scenarios for the valuation of 

CO2 emission reductions presented in 

section IV.M. 

TABLE V.17—RESULTS OF ADDING NET PRESENT VALUE OF CONSUMER SAVINGS (AT 7-PERCENT DISCOUNT RATE) TO

NET PRESENT VALUE OF MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS UNDER DISHWASHER

TRIAL STANDARD LEVELS

TSL 

Consumer NPV at 7% discount rate added with: 

SCC Value of 

$4.9/metric ton 

CO2 * and low 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$22.3/metric ton 

CO2 * and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$36.5/metric ton 

CO2 * and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$67.6/metric ton 

CO2 * and high 

value for NOX ** 

(billion 2010$) 

1 ............................................................................................... 0.04 0.06 0.08 0.11 


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31954 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

TABLE V.17—RESULTS OF ADDING NET PRESENT VALUE OF CONSUMER SAVINGS (AT 7-PERCENT DISCOUNT RATE) TO

NET PRESENT VALUE OF MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS UNDER DISHWASHER

TRIAL STANDARD LEVELS—Continued 

TSL 

Consumer NPV at 7% discount rate added with: 

SCC Value of 

$4.9/metric ton 

CO2 * and low 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$22.3/metric ton 

CO2 * and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$36.5/metric ton 

CO2 * and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$67.6/metric ton 

CO2 * and high 

value for NOX ** 

(billion 2010$) 

2 ............................................................................................... 0.10 0.16 0.21 0.33 

3 ............................................................................................... 2.24 3.48 4.53 6.53 

4 ............................................................................................... 6.31 8.21 9.83 12.92 

* These label values represent the global SCC of CO2 in 2010, in 2010$. Their present values have been calculated with scenario-consistent 

discount rates. 

** Low Value corresponds to $450 per ton of NOX emissions. Medium Value corresponds to $2,537 per ton of NOX emissions. High Value corresponds to $4,623 per ton of NOX emissions. 

TABLE V.18—RESULTS OF ADDING NET PRESENT VALUE OF CONSUMER SAVINGS (AT 3-PERCENT DISCOUNT RATE) TO

NET PRESENT VALUE OF MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS UNDER DISHWASHER

TRIAL STANDARD LEVELS

TSL 

Consumer NPV at 3% discount rate added with: 

SCC Value of 

$4.9/metric ton 

CO2 * and low 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$22.3/metric ton 

CO2 * and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$36.5/metric ton 

CO2* and medium 

value for NOX ** 

(billion 2010$) 

SCC Value of 

$67.6/metric ton 

CO2 * and high 

value for NOX ** 

(billion 2010$) 

1 ............................................................................................... 0.13 0.15 0.17 0.20 

2 ............................................................................................... 0.48 0.54 0.60 0.71 

3 ............................................................................................... 6.80 8.07 9.12 11.17 

4 ............................................................................................... 17.90 19.86 21.48 24.63 

* These label values represent the global SCC of CO2 in 2010, in 2010$. Their present values have been calculated with scenario-consistent 

discount rates. 

** Low Value corresponds to $450 per ton of NOX emissions. Medium Value corresponds to $2,537 per ton of NOX emissions. High Value corresponds to $4,623 per ton of NOX emissions. 

Although adding the value of 

consumer savings to the values of 

emission reductions provides a valuable 

perspective, two issues should be 

considered. First, the national operating 

cost savings are domestic U.S. consumer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use quite different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

products shipped in 2013–2047. The 

SCC values, on the other hand, reflect 

the present value of all future climaterelated impacts resulting from the 

emission of one ton of carbon dioxide in 

each year. These impacts continue well 

beyond 2100. 

7. Other Factors 

The Secretary of Energy, in 

determining whether a standard is 

economically justified, may consider 

any other factors that the Secretary 

deems to be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VI))) In developing the 

direct final rule, DOE has also 

considered the Joint Petition submitted 

to DOE. DOE recognizes the value of 

consensus agreements submitted by 

parties in accordance with 42 U.S.C. 

6295(p)(4) and has weighed the value of 

such consensus in establishing the 

standards set forth in today’s final rule. 

DOE has encouraged the submission of 

consensus agreements as a way to get 

diverse interested parties together, to 

develop an independent and probative 

analysis useful in DOE standard setting, 

and to expedite the rulemaking process. 

DOE also believes that standard levels 

recommended in the consensus 

agreement may increase the likelihood 

for regulatory compliance, while 

decreasing the risk of litigation. 

C. Conclusion 

When considering proposed 

standards, the new or amended energy 

conservation standard that DOE adopts 

for any type (or class) of covered 

product shall be designed to achieve the 

maximum improvement in energy 

efficiency that the Secretary determines 

is technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A)) In determining whether a 

standard is economically justified, the 

Secretary must determine whether the 

benefits of the standard exceed its 

burdens, considering to the greatest 

extent practicable the seven statutory 

factors discussed previously. (42 U.S.C. 

6295(o)(2)(B)(i)) The new or amended 

standard must also ‘‘result in significant 

conservation of energy.’’ (42 U.S.C. 

6295(o)(3)(B)) 

The Department considered the 

impacts of standards at each TSL, 

beginning with maximum 

technologically feasible level, to 

determine whether that level was 

economically justified. Where the maxtech level was not justified, DOE then 

considered the next most efficient level 

and undertook the same evaluation until 

it reached the highest efficiency level 

that is both technologically feasible and 

economically justified and saves a 

significant amount of energy. 

To aid the reader as DOE discusses 

the benefits and/or burdens of each trial 

standard level, tables present a 

summary of the results of DOE’s 

quantitative analysis for each TSL. In 

addition to the quantitative results 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31955 

49P.C. Reiss and M.W. White. Household 

Electricity Demand, Revisited. Review of Economic 

Studies (2005) 72, 853–883. 

50Alan Sanstad, Notes on the Economics of 

Household Energy Consumption and Technology 

Choice. Lawrence Berkeley National Laboratory. 

2010. Available online at: www1.eere.energy.gov/ 

buildings/appliance_standards/pdfs/ 

consumer_ee_theory.pdf 

presented in the tables, DOE also 

considers other burdens and benefits 

that affect economic justification. Those 

include the impacts on identifiable 

subgroups of consumers, such as lowincome households and seniors, who 

may be disproportionately affected by a 

national standard. Section V.B.1 

presents the estimated impacts of each 

TSL for these subgroups. 

DOE also notes that the economics 

literature provides a wide-ranging 

discussion of how consumers trade off 

upfront costs and energy savings in the 

absence of government intervention. 

Much of this literature attempts to 

explain why consumers appear to 

undervalue energy efficiency 

improvements. This undervaluation 

suggests that regulation that promotes 

energy efficiency can produce 

significant net private gains (as well as 

producing social gains by, for example, 

reducing pollution). There is evidence 

that consumers undervalue future 

energy savings as a result of (1) a lack 

of information; (2) a lack of sufficient 

salience of the long-term or aggregate 

benefits; (3) a lack of sufficient savings 

to warrant delaying or altering 

purchases (for example, an inefficient 

ventilation fan in a new building or the 

delayed replacement of a water pump); 

(4) excessive focus on the short term, in 

the form of inconsistent weighting of 

future energy cost savings relative to 

available returns on other investments; 

(5) computational or other difficulties 

associated with the evaluation of 

relevant tradeoffs; and (6) a divergence 

in incentives (that is, renter versus 

owner; builder versus purchaser). Other 

literature indicates that with less than 

perfect foresight and a high degree of 

uncertainty about the future, consumers 

may trade off these types of investments 

at a higher than expected rate between 

current consumption and uncertain 

future energy cost savings. 

In DOE’s current regulatory analysis, 

potential changes in the benefits and 

costs of a regulation due to changes in 

consumer purchase decisions are 

included in two ways: First, if 

consumers forego a purchase of a 

product in the standards case, this 

decreases sales for product 

manufacturers and the cost to 

manufacturers is included in the MIA. 

Second, DOE accounts for energy 

savings attributable only to products 

actually used by consumers in the 

standards case; if a regulatory option 

decreases the number of products used 

by consumers, this decreases the 

potential energy savings from an energy 

conservation standard. DOE provides 

detailed estimates of shipments and 

changes in the volume of product 

purchases in chapter 9 of the direct final 

rule TSD. However, DOE’s current 

analysis does not explicitly control for 

heterogeneity in consumer preferences, 

preferences across subcategories of 

products or specific features, or 

consumer price sensitivity variation 

according to household income (Reiss 

and White, 2005).49

While DOE is not prepared at present 

to provide a fuller quantifiable 

framework for estimating the benefits 

and costs of changes in consumer 

purchase decisions due to an energy 

conservation standard, DOE is 

committed to developing a framework 

that can support empirical quantitative 

tools for improved assessment of the 

consumer welfare impacts of appliance 

standards. DOE has posted a paper that 

discusses the issue of consumer welfare 

impacts of appliance energy efficiency 

standards, and potential enhancements 

to the methodology by which these 

impacts are defined and estimated in 

the regulatory process.50 DOE welcomes 

comments on how to more fully assess 

the potential impact of energy 

conservation standards on consumer 

choice and how to quantify this impact 

in its regulatory analysis in future 

rulemakings. 

1. Benefits and Burdens of TSLs 

Considered for Residential Dishwashers 

Table V.19 and Table V.20 summarize 

the quantitative impacts estimated for 

each TSL for residential dishwashers. 

The efficiency levels contained in each 

TSL are described in section V.A. 

TABLE V.19—SUMMARY OF RESULTS FOR RESIDENTIAL DISHWASHER TRIAL STANDARD LEVELS: NATIONAL IMPACTS

Category TSL 1 TSL 2 TSL 3 TSL 4 

National Energy Savings (quads) ........................................................ 0.02 .................. 0.07 .................. 0.94 .................. 1.59. 

National Water Savings (trillion gal.) ................................................... 0.01 .................. 0.14 .................. 0.56 .................. 1.71. 

Net Present Value (2010$ billion) 

3% discount rate .................................................................................. 0.12 .................. 0.46 .................. 0.51 .................. 17.45. 

7% discount rate .................................................................................. 0.03 .................. 0.08 .................. 1.96 .................. 5.88. 

Cumulative Emissions Reduction 

CO2 (million metric tons) ...................................................................... 1.15 .................. 4.06 .................. 65.02 ................ 98.62. 

NOX (thousand tons) ........................................................................... 0.96 .................. 3.54 .................. 54.27 ................ 83.31. 

Hg (tons) .............................................................................................. 0.004 ................ 0.000 ................ 0.274 ................ 0.304. 

Value of Emissions Reduction 

CO2 (2010$ million) * ........................................................................... 5 to 79 .............. 16 to 242 .......... 278 to 4515 ...... 427 to 6951. 

NOX—3% discount rate (2010$ million) .............................................. 0 to 3 ................ 1 to 10 .............. 14 to 148 .......... 22 to 230. 

NOX—7% discount rate (2010$ million) .............................................. 0 to 1 ................ 0 to 5 ................ 6 to 59 .............. 9 to 91. 

Parentheses indicate negative (¥) values. 

* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions. 

** Values are for 2047. 


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31956 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

TABLE V.20—SUMMARY OF RESULTS FOR RESIDENTIAL DISHWASHER TRIAL STANDARD LEVELS: CONSUMER AND

MANUFACTURER IMPACTS

Category TSL 1 TSL 2 TSL 3 TSL 4 

Manufacturer Impacts 

Impact to Industry NPV (2010$ million, 8.5% discount rate) .. (44.3)–(45.3) (73.9)–(84.6) (128.9)–(174.4) (145.6)–(202.7) 

Industry NPV (% change) ........................................................ (7.0)–(7.1) (11.6)–(13.3) (20.2)–(27.4) (22.8)–(31.8) 

Consumer Mean LCC Savings (2010$) 

Standard Dishwasher .............................................................. 1 3 41 108 

Compact Dishwasher ............................................................... 13 12 52 52 

Consumer Median PBP (Years) 

Standard Dishwasher .............................................................. 5.9 11.8 6.6 4.5 

Compact Dishwasher ............................................................... 0.3 0.3 2.1 2.1 

Distribution of Consumer LCC Impacts 

Standard Dishwasher: 

Net Cost (%) ..................................................................... 1.9 18.7 29.7 22.9 

No Impact (%) .................................................................. 96.3 64.1 20.0 9.0 

Net Benefit (%) ................................................................. 1.7 17.2 50.4 68.1 

Compact Dishwasher: 

Net Cost (%) ..................................................................... 6.4 6.5 5.4 5.4 

No Impact (%) .................................................................. 75.6 75.6 50.2 50.2 

Net Benefit (%) ................................................................. 18.0 17.9 44.4 44.4 

Parentheses indicate negative (¥) values. 

DOE first considered TSL 4, which 

represents the max-tech efficiency 

levels. TSL 4 would save 1.59 quads of 

energy and 1.71 trillion gallons of water, 

amounts DOE considers significant. 

Under TSL 4, the NPV of consumer 

benefit would be $5.88 billion, using a 

discount rate of 7 percent, and $17.45 

billion, using a discount rate of 3 

percent. 

The cumulative emissions reductions 

at TSL 4 are 99 Mt of CO2, 83 thousand 

tons of NOX, and 0.304 tons of Hg. The 

estimated monetary value of the CO2

emissions reductions at TSL 4 ranges 

from $427 million to $6,951 million. 

At TSL 4, the average LCC impact is 

a savings of $108 for standard 

dishwashers and a savings of $52 for 

compact dishwashers. The median 

payback period is 4.5 years for standard 

dishwashers and 2.1 years for compact 

dishwashers. The fraction of consumers 

experiencing an LCC benefit is 68.1 

percent for standard dishwashers and 

44.4 percent for compact dishwashers. 

However, 22.9 percent of standard 

dishwasher consumers and 5.4 percent 

of compact dishwasher consumers 

experience an LCC net cost. In addition, 

DOE is concerned that reducing energy 

and water use at TSL 4 without 

implementing significantly higher-cost 

technologies could result in the loss of 

certain consumer utility. Specifically, a 

substantially longer cycle time could be 

required to maintain cleaning 

performance. Therefore, DOE is 

concerned that TSL 4 may result in a 

loss of consumer utility. 

At TSL 4, the projected change in 

INPV ranges from a decrease of $145.6 

million to a decrease of $202.7 million, 

equivalent to 22.8 percent and 31.8 

percent, respectively. Products that 

meet the efficiency standards specified 

by this TSL are forecast to represent less 

than 9 percent of shipments in the year 

leading up to amended standards. As 

such, manufacturers would have to 

redesign nearly all products by the 2018 

compliance date to meet demand. 

Redesigning all units to meet the current 

max-tech efficiency levels would 

require considerable capital and product 

conversion expenditures. At TSL 4, the 

capital conversion costs total $226.3 

million, 2.2 times the industry annual 

capital expenditure in the year leading 

up to amended standards. DOE 

estimates that complete platform 

redesigns would cost the industry $76.7 

million in product conversion costs. 

These conversion costs largely relate to 

the research programs required to 

develop new products that meet the 

efficiency standards set forth by TSL 4. 

These costs are equivalent to 1.6 times 

the industry annual budget for research 

and development. As such, the 

conversion costs associated with the 

changes in products and manufacturing 

facilities required at TSL 4 would 

require significant use of manufacturers’ 

financial reserves (manufacturer capital 

pools), impacting other areas of business 

that compete for these resources and 

significantly reducing INPV. In 

addition, manufacturers could face a 

substantial impact on profitability at 

TSL 4. Because manufacturers are more 

likely to reduce their margins to 

maintain a price-competitive product at 

higher TSLs, DOE expects that TSL 4 

would yield impacts closer to the high 

end of the range of INPV impacts. If the 

high end of the range of impacts is 

reached, as DOE expects, TSL 4 could 

result in a net loss of 31.8 percent in 

INPV to dishwasher manufacturers. 

The Secretary concludes that at TSL 

4 for residential dishwashers, the 

benefits of energy savings, water 

savings, positive NPV of consumer 

benefits, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would be 

outweighed by the economic burden on 

some consumers, the potential burden 

on all consumers from loss of product 

utility, and the impacts on 

manufacturers, including the conversion 

costs and profit margin impacts that 

could result in a large reduction in 

INPV. Consequently, the Secretary has 

concluded that TSL 4 is not 

economically justified. 

DOE then considered TSL 3. TSL 3 

would save 0.94 quads of energy and 

0.56 trillion gallons of water, amounts 

DOE considers significant. Under TSL 3, 


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the NPV of consumer benefit would be 

$1.96 billion, using a discount rate of 7 

percent, and $6.51 billion, using a 

discount rate of 3 percent. 

The cumulative emissions reductions 

at TSL 3 are 65 Mt of CO2, 54 thousand 

tons of NOX, and 0.274 ton of Hg. The 

estimated monetary value of the CO2

emissions reductions at TSL 3 ranges 

from $278 million to $4,515 million. 

At TSL 3, the average LCC impact is 

a savings of $41 for standard 

dishwashers and a savings of $52 for 

compact dishwashers. The median 

payback period is 6.6 years for standard 

dishwashers and 2.1 years for compact 

dishwashers. The fraction of consumers 

experiencing an LCC benefit is 50.4 

percent for standard dishwashers and 

44.4 percent for compact dishwashers. 

However, 29.7 percent of standard 

dishwasher consumers and 5.4 percent 

of compact dishwasher consumers 

experience an LCC net cost. In addition, 

DOE is concerned that reducing energy 

and water use at TSL 3 without 

implementing significantly higher-cost 

technologies could result in the loss of 

certain consumer utility. Specifically, a 

substantially longer cycle time could be 

required to maintain cleaning 

performance. Therefore, DOE is 

concerned that TSL 3 may result in 

significant loss of consumer utility. 

At TSL 3, the projected change in 

INPV ranges from a decrease of $128.9 

million to a decrease of $174.4 million, 

decreases of 20.2 percent and 27.4 

percent, respectively. Products that 

meet the efficiency standards specified 

by this TSL represent less than 20 

percent of shipments in the year leading 

up to amended standards. As such, 

manufacturers would have to overhaul a 

significant fraction of products by the 

2018 compliance date to meet demand. 

Redesigning significant component 

systems or developing entirely new 

platforms to meet the efficiency levels 

specified by this TSL would require 

considerable capital and product 

conversion expenditures. At TSL 3, the 

estimated capital conversion costs total 

$195.4 million, which is 1.9 times the 

industry annual capital expenditure in 

the year leading up to amended 

standards. DOE estimates that the 

redesigns necessary to meet these 

standards would cost the industry $66.5 

million in product conversion costs. 

These conversion costs largely relate to 

the research programs required to 

develop products that meet the 

efficiency standards set forth by TSL 3, 

and are 1.4 times the industry annual 

budget for research and development in 

the year leading up to amended 

standards. As such, the conversion costs 

associated with the changes in products 

and manufacturing facilities required at 

TSL 3 would require significant use of 

manufacturers’ financial reserves 

(manufacturer capital pools), impacting 

other areas of business that compete for 

these resources and significantly 

reducing INPV. Because manufacturers 

are more likely to reduce their margins 

to maintain a price-competitive product 

at higher TSLs, DOE expects that TSL 3 

would yield impacts closer to the high 

end of the range of INPV impacts as 

indicated by the preservation of 

operating profit markup scenario. If the 

high end of the range of impacts is 

reached, as DOE expects, TSL 3 could 

result in a net loss of 27.4 percent in 

INPV to dishwasher manufacturers. 

The Secretary concludes that at TSL 

3 for residential dishwashers, the 

benefits of energy savings, water 

savings, positive NPV of consumer 

benefits, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would be 

outweighed by the economic burden on 

some consumers, the potential burden 

on all consumers from loss of product 

utility, and the impacts on 

manufacturers, including the conversion 

costs and profit margin impacts that 

could result in a large reduction in 

INPV. Consequently, the Secretary has 

concluded that TSL 3 is not 

economically justified. 

DOE then considered TSL 2. TSL 2 

would save 0.07 quads of energy and 

0.14 trillion gallons of water, amounts 

DOE considers significant. Under TSL 2, 

the NPV of consumer benefit would be 

$0.08 billion, using a discount rate of 7 

percent, and $0.46 billion, using a 

discount rate of 3 percent. 

The cumulative emissions reductions 

at TSL 2 are 4.06 Mt of CO2, 3.54 

thousand tons of NOX, and 0.000 ton of 

Hg. The estimated monetary value of the 

CO2 emissions reductions at TSL 2 

ranges from $16 million to $242 million. 

At TSL 2, the average LCC impact is 

a savings of $3 for standard dishwashers 

and a savings of $12 for compact 

dishwashers. The median payback 

period is 11.8 years for standard 

dishwashers and 0.3 years for compact 

dishwashers. While some consumers 

experience an LCC increase, this 

increase is very small in most cases. 

At TSL 2, the projected change in 

INPV ranges from a decrease of $73.9 

million to a decrease of $84.6 million, 

decreases of 11.6 percent and 13.3 

percent, respectively. All dishwasher 

manufacturers currently produce 

products that meet the efficiency levels 

specified at TSL 2. As such, this level 

corresponds more to incremental 

product conversions rather than the 

platform redesigns expected for TSL 3 

and TSL 4. Products at or above the 

efficiency levels of TSL 2 represent 

nearly 64 percent of shipments in the 

year leading up to amended standards. 

As such, DOE believes that the scope of 

the redesigns necessary to meet TSL 2 

by the 2013 compliance date greatly 

mitigates concerns over manufacturers’ 

ability to redesign products and switch 

over the bulk of production in time to 

meet the amended standards by the 

compliance date (operational risk). DOE 

estimates that the improvements to 

manufacturing facilities necessary to 

meet these standards would cost the 

industry $59.1 million in capital 

conversion costs, over $130 million less 

than those incurred at TSL 3, and only 

56 percent of the industry budget for 

capital expenditure in the year leading 

up to amended standards. TSL 2 will 

require an estimated 34.9 million in 

product conversion costs primarily 

relating to the research and 

development programs needed to 

improve upon existing platforms to 

meet the specified efficiency levels. 

This represents 72 percent of the 

industry budget for research and 

development in the year leading up to 

amended standards. The substantial 

reduction in conversion costs over those 

incurred at higher TSLs, coupled with 

the fact that many products currently 

meet the efficiency standards set forth 

by TSL 2, greatly mitigate the 

operational risk and impact on INPV. 

The Secretary concludes that at TSL 

2 for residential dishwashers, the 

benefits of energy savings, water 

savings, positive NPV of consumer 

benefits, emission reductions, and the 

estimated monetary value of the CO2

emissions reductions would outweigh 

the impacts on manufacturers, including 

the conversion costs that could result in 

a reduction in INPV for manufacturers. 

In addition, the efficiency levels in 

TSL 2 correspond to the recommended 

levels in the Joint Petition, which DOE 

believes sets forth a statement by 

interested persons that are fairly 

representative of relevant points of view 

(including representatives of 

manufacturers of covered products, 

States, and efficiency advocates) and 

contains recommendations with respect 

to an energy conservation standard that 

are in accordance with 42 U.S.C. 

6295(o). Moreover, DOE has encouraged 

the submission of consensus agreements 

as a way for diverse interested parties to 

develop an independent and probative 

analysis useful in DOE standard setting 

and to expedite the rulemaking process. 

DOE also believes that the standard 

levels recommended in the consensus 

agreement may increase the likelihood 


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51 DOE used a two-step calculation process to 

convert the time-series of costs and benefits into 

annualized values. First, DOE calculated a present 

value in 2012, the year used for discounting the 

NPV of total consumer costs and savings, for the 

time-series of costs and benefits using discount 

rates of 3 and 7 percent for all costs and benefits 

except for the value of CO2 reductions. For the 

latter, DOE used a range of discount rates, as shown 

in Table V.22. From the present value, DOE then 

calculated the fixed annual payment over a 30-year 

period, starting in 2013, that yields the same 

present value. This payment includes benefits to 

consumers which accrue after 2047 from the 

dishwashers purchased from 2013 to 2047. Costs 

incurred by manufacturers, some of which may be 

incurred prior to 2013 in preparation for the rule, 

are indirectly included as part of incremental 

equipment costs. The extent of these costs and 

benefits depends on the projected price trends of 

dishwashers because consumer demand of 

dishwashers is a function of dishwasher prices. The 

fixed annual payment is the annualized value. 

Although DOE calculated annualized values, this 

does not imply that the time-series of cost and 

benefits from which the annualized values were 

determined is a steady stream of payments. 

for regulatory compliance, while 

decreasing the risk of litigation. 

After considering the analysis and the 

benefits and burdens of TSL 2, the 

Secretary concludes that this TSL will 

offer the maximum improvement in 

efficiency that is technologically 

feasible and economically justified, and 

will result in the significant 

conservation of energy. Therefore, DOE 

today adopts TSL 2 for residential 

dishwashers. The amended energy 

conservation standards for residential 

dishwashers, which are a maximum 

allowable annual energy use and 

maximum allowable per-cycle water 

consumption, are shown in Table V.21. 

TABLE V.21—AMENDED ENERGY CONSERVATION STANDARDS FOR RESIDENTIAL DISHWASHERS

Product class 

Compliance date: 

May 30, 2013 

Maximum annual 

energy use * 

Maximum per-cycle 

water consumption 

1. Standard (≥8 place settings plus 6 serving pieces) .................................................. 307 kWh/year ..................... 5.0 gallons/cycle. 

2. Compact (<8 place settings plus 6 serving pieces) .................................................. 222 kWh/year ..................... 3.5 gallons/cycle. 

*Annual energy use, expressed in kilowatt-hours (kWh) per year, is calculated as: the sum of the annual standby electrical energy in kWh and 

the product of (1) the representative average dishwasher use cycles per year and (2) the sum of machine electrical energy consumption per 

cycle in kWh, the total water energy consumption per cycle in kWh, and, for dishwashers having a truncated normal cycle, the drying energy 

consumption divided by 2 in kWh. A truncated normal cycle is defined as the normal cycle interrupted to eliminate the power-dry feature after the 

termination of the last rinse option. 

2. Summary of Benefits and Costs 

(Annualized) of the Standards 

The benefits and costs of today’s 

standards can also be expressed in terms 

of annualized values. The annualized 

monetary values are the sum of (1) the 

annualized national economic value, 

expressed in 2010$, of the benefits from 

operating products that meet the 

proposed standards (consisting 

primarily of operating cost savings from 

using less energy and water, minus 

increases in product purchase costs, 

which is another way of representing 

consumer NPV), and (2) the monetary 

value of the benefits of emission 

reductions, including CO2 emission 

reductions.51 The value of the CO2

reductions, otherwise known as the 

Social Cost of Carbon (SCC), is 

calculated using a range of values per 

metric ton of CO2 developed by a recent 

interagency process. 

Although combining the values of 

operating savings and CO2 reductions 

provides a useful perspective, two 

issues should be considered. First, the 

national operating savings are domestic 

U.S. consumer monetary savings that 

occur as a result of market transactions, 

while the value of CO2 reductions is 

based on a global value. Second, the 

assessments of operating cost savings 

and SCC are performed with different 

methods that use quite different time 

frames for analysis. The national 

operating cost savings is measured for 

the lifetime of products shipped in 

2013–2047. The SCC values, on the 

other hand, reflect the present value of 

all future climate-related impacts 

resulting from the emission of one ton 

of carbon dioxide in each year. These 

impacts continue well beyond 2100. 

Table V.22 shows the annualized 

values for residential dishwashers under 

TSL 2, expressed in 2010$. The results 

under the primary estimate are as 

follows. Using a 7-percent discount rate 

for benefits and costs other than CO2

reductions, for which DOE used a 3- 

percent discount rate along with the 

SCC series corresponding to a value of 

$22.3/ton in 2010 (in 2010$), the cost of 

the standards for dishwashers in today’s 

rule is $46 million per year in increased 

equipment costs, while the annualized 

benefits are $53 million per year in 

reduced equipment operating costs, $3.9 

million in CO2 reductions, and $0.24 

million in reduced NOX emissions. In 

this case, the net benefit amounts to $11 

million per year. Using a 3-percent 

discount rate for all benefits and costs 

and the SCC series corresponding to a 

value of $22.3/ton in 2010 (in 2010$), 

the cost of the standards for 

dishwashers in today’s rule is $44 

million per year in increased equipment 

costs, while the benefits are $66 million 

per year in reduced operating costs, $3.9 

million in CO2 reductions, and $0.26 

million in reduced NOX emissions. In 

this case, the net benefit amounts to $27 

million per year. 

TABLE V.22—ANNUALIZED BENEFITS AND COSTS OF AMENDED STANDARDS (TSL 2) FOR RESIDENTIAL DISHWASHERS

SOLD IN 2013–2047 

Discount rate 

% 

Monetized (million 2010$/year) 

Primary 

estimate * 

Low net benefits 

estimate * 

High net 

benefits 

estimate * 

Benefits 

Operating Cost Savings ......................................................... 7 ..................................... 53 ..................... 48 ..................... 59. 

3 ..................................... 66 ..................... 59 ..................... 75. 


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TABLE V.22—ANNUALIZED BENEFITS AND COSTS OF AMENDED STANDARDS (TSL 2) FOR RESIDENTIAL DISHWASHERS

SOLD IN 2013–2047—Continued 

Discount rate 

% 

Monetized (million 2010$/year) 

Primary 

estimate * 

Low net benefits 

estimate * 

High net 

benefits 

estimate * 

CO2 Reduction at $4.9/t ** ...................................................... 5 ..................................... 1.1 .................... 1.0 .................... 1.3. 

CO2 Reduction at $22.3/t ** .................................................... 3 ..................................... 3.9 .................... 3.5 .................... 4.7. 

CO2 Reduction at $36.5/t ** .................................................... 2.5 .................................. 6.1 .................... 5.4 .................... 7.2. 

CO2 Reduction at $67.6/t ** .................................................... 3 ..................................... 12.0 .................. 10.8 .................. 14.2. 

NOX Reduction at $2,537/t ** ................................................. 7 ..................................... 0.24 .................. 0.23 .................. 0.27. 

3 ..................................... 0.26 .................. 0.24 .................. 0.30. 

Total†7 .................................................................................... 7% plus CO2 range ........ 54 to 65 ............ 49 to 59 ............ 60 to 73. 

7% .................................. 57 ..................... 52 ..................... 64. 

3% plus CO2 range ........ 68 to 78 ............ 60 to 70 ............ 76 to 89. 

3 ..................................... 70 ..................... 63 ..................... 80. 

Costs 

Incremental Product Costs ..................................................... 7 ..................................... 46 ..................... 44 ..................... 43. 

3 ..................................... 44 ..................... 41 ..................... 40. 

Total Net Benefits 

Total † ..................................................................................... 7% plus CO2 range ........ 8 to 19 .............. 6 to 16 .............. 17 to 30. 

7 ..................................... 11 ..................... 8 ....................... 20. 

3% plus CO2 range ........ 24 to 35 ............ 19 to 29 ............ 37 to 49. 

3 ..................................... 27 ..................... 22 ..................... 40. 

* The results include benefits to consumers which accrue after 2047 from the dishwashers purchased from 2013 through 2047. Costs incurred 

by manufacturers, some of which may be incurred prior to 2013 in preparation for the rule, are not directly included, but are indirectly included as 

part of incremental equipment costs. The extent of the costs and benefits will depend on the projected price trends of dishwashers, as the consumer demand for dishwashers is a function of dishwasher prices. The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of 

energy prices and housing starts from the AEO2011 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental 

product costs reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected product 

price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the High Benefits Estimate. The methods 

used to derive projected price trends are explained in section IV.G.3. 

** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, 

$22.3, and $36.5 per ton are the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of 

$67.6 per ton represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The value for NOX (in 2010$) is the average of the low and high values used in DOE’s analysis. 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount rate, which is $22.3/ton in 2010 

(in 2010$). In the rows labeled as ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the 

labeled discount rate, and those values are added to the full range of CO2 values. 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Order 12866 

and Executive Order 13563 

Section 1(b)(1) of Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (Oct. 4, 1993), 

requires each agency to identify the 

problem that it intends to address, 

including, where applicable, the failures 

of private markets or public institutions 

that warrant new agency action, as well 

as to assess the significance of that 

problem. The problems that today’s 

standards address are as follows: 

(1) There is a lack of consumer 

information and/or information 

processing capability about energy 

efficiency opportunities in the home 

appliance market. 

(2) There is asymmetric information 

(one party to a transaction has more and 

better information than the other) and/ 

or high transactions costs (costs of 

gathering information and effecting 

exchanges of goods and services). 

(3) There are external benefits 

resulting from improved energy 

efficiency of residential dishwashers 

that are not captured by the users of 

such equipment. These benefits include 

externalities related to environmental 

protection and energy security that are 

not reflected in energy prices, such as 

reduced emissions of greenhouse gases. 

In addition, DOE has determined that 

today’s regulatory action is an 

‘‘economically significant regulatory 

action’’ under section 3(f)(1) of 

Executive Order 12866. Accordingly, 

section 6(a)(3) of the Executive Order 

requires that DOE prepare a regulatory 

impact analysis (RIA) on today’s rule 

and that the Office of Information and 

Regulatory Affairs (OIRA) in the Office 

of Management and Budget (OMB) 

review this rule. DOE presented to OIRA 

for review the draft rule and other 

documents prepared for this 

rulemaking, including the RIA, and 

included these documents in the 

rulemaking record. The assessments 

prepared pursuant to Executive Order 

12866 can be found in the technical 

support document for this rulemaking at 

http://www1.eere.energy.gov/buildings/ 

appliance_standards/residential/ 

dishwashers.html. 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011 (76 FR 3281, 

Jan. 21, 2011). EO 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 


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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 emphasizes as well that 

Executive Order 13563 requires agencies 

to use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, the Office of 

Information and Regulatory Affairs has 

emphasized that such techniques may 

include identifying changing future 

compliance costs that might result from 

technological innovation or anticipated 

behavioral changes. For the reasons 

stated in the preamble, DOE believes 

that today’s direct final rule is 

consistent with these principles, 

including the requirement that, to the 

extent permitted by law, benefits justify 

costs and that net benefits are 

maximized. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (RFA, 

5 U.S.C. 601 et seq.) requires 

preparation of an initial regulatory 

flexibility analysis (IRFA) for any rule 

that by law must be proposed for public 

comment, unless the agency certifies 

that the rule, if promulgated, will not 

have a significant economic impact on 

a substantial number of small entities. 

As required by Executive Order 13272, 

‘‘Proper Consideration of Small Entities 

in Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s Web site (www.gc.doe.gov). 

DOE reviewed today’s direct final rule 

and corresponding NOPR pursuant to 

the RFA and the policies and 

procedures discussed above. DOE 

certifies that the standards established 

in today’s direct final rule and proposed 

in the NOPR, published elsewhere in 

today’s Federal Register, will not have 

a significant impact on a substantial 

number of small entities. The factual 

basis for this certification is set forth 

below. DOE will consider any 

comments on the certification or 

economic impacts of the rule in 

determining whether to proceed with 

the direct final rule. 

For manufacturers of residential 

dishwashers, the Small Business 

Administration (SBA) has set a size 

threshold, which defines those entities 

classified as ‘‘small businesses’’ for the 

purposes of the statute. DOE used the 

SBA’s small business size standards to 

determine whether any small entities 

would be subject to the requirements of 

the rule. 65 FR 30836, 30848 (May 15, 

2000), as amended at 65 FR 53533, 

53544 (Sept. 5, 2000) and codified at 13 

CFR part 121.The size standards are 

listed by North American Industry 

Classification System (NAICS) code and 

industry description and are available 

at: www.sba.gov/sites/default/files/ 

Size_Standards_Table.pdf. Residential 

dishwasher manufacturing is classified 

under NAICS 335228, ‘‘Other Major 

Household Appliance Manufacturing.’’ 

The SBA sets a threshold of 500 

employees or less for an entity to be 

considered as a small business for this 

category. 

To estimate the number of small 

businesses which could be impacted by 

the amended energy conservation 

standards, DOE conducted a market 

survey using all available public 

information to identify potential small 

manufacturers. DOE’s research included 

the AHAM membership directory, 

product databases (CEE, CEC, and 

ENERGY STAR databases) and 

individual company Web sites to find 

potential small business manufacturers. 

DOE also asked interested parties and 

industry representatives if they were 

aware of any other small business 

manufacturers during manufacturer 

interviews and at previous DOE public 

meetings. DOE reviewed all publicly 

available data and contacted various 

companies, as necessary, to determine 

whether they met the SBA’s definition 

of a small business manufacturer of 

covered residential dishwashers. DOE 

screened out companies that did not 

offer products covered by this 

rulemaking, did not meet the definition 

of a ‘‘small business,’’ or are foreign 

owned and operated. 

Almost half of residential 

dishwashers are currently manufactured 

in the United States by one corporation 

that accounts for approximately 49 

percent of the total market. Together, 

this manufacturer and 3 other 

manufacturers that do not meet the 

definition of a small business 

manufacturer comprise 99 percent of the 

residential dishwasher market. The 

small portion of the remaining 

residential dishwasher market 

(approximately 57,000 shipments) is 

supplied by a combination of 

approximately 15 international and 

domestic companies, all of which have 

small market shares. These companies 

are either foreign owned and operated 

or exceed the SBA’s employment 

threshold for consideration as a small 

business under the appropriate NAICS 

code. Therefore, DOE did not identify 

any small business manufacturers of 

dishwashers. 

Based on the discussion above, DOE 

certifies that the standards for 

residential dishwashers set forth in 

today’s rule would not have a 

significant economic impact on a 

substantial number of small entities. 

Accordingly, DOE has not prepared a 

regulatory flexibility analysis for this 

rulemaking. DOE will transmit this 

certification to the SBA as required by 

5 U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act 

Manufacturers of residential 

dishwashers must certify to DOE that 

their products comply with any 

applicable energy conservation 

standards. In certifying compliance, 

manufacturers must test their products 

according to the DOE test procedures for 

dishwashers, 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, including 

residential dishwashers. (76 FR 12422 

(March 7, 2011)). The collection-ofinformation 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 by OMB under OMB control 

number 1910–1400. Public reporting 

burden for the certification is estimated 

to average 20 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 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31961 

that collection of information displays a 

currently valid OMB Control Number. 

D. Review Under the National 

Environmental Policy Act of 1969 

Pursuant to the National 

Environmental Policy Act (NEPA) of 

1969, DOE has determined that today’s 

rule fits within the category of actions 

included in Categorical Exclusion (CX) 

B5.1 and otherwise meets the 

requirements for application of a CX. 

See 10 CFR Part 1021, App. B, B5.1(b); 

1021.410(b) and Appendix B, B(1)–(5). 

The rule fits within the category of 

actions because it is a rulemaking that 

establishes energy conservation 

standards for consumer products or 

industrial equipment, and for which 

none of the exceptions identified in CX 

B5.1(b) apply. Therefore, DOE has made 

a CX determination for this rulemaking, 

and DOE does not need to prepare an 

Environmental Assessment or 

Environmental Impact Statement for 

this rule. DOE’s CX determination for 

this direct final rule is available at 

http://cxnepa.energy.gov. 

E. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism.’’ 

64 FR 43255 (Aug. 10, 1999) imposes 

certain requirements on Federal 

agencies formulating and implementing 

policies or regulations that preempt 

State law or that have Federalism 

implications. The Executive Order 

requires agencies to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and to carefully assess the 

necessity for such actions. The 

Executive Order also requires agencies 

to have an accountable process to 

ensure meaningful and timely input by 

State and local officials in the 

development of regulatory policies that 

have Federalism implications. On 

March 14, 2000, DOE published a 

statement of policy describing the 

intergovernmental consultation process 

it will follow in the development of 

such regulations. 65 FR 13735. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the products 

that are the subject of today’s direct 

final rule. States can petition DOE for 

exemption from such preemption to the 

extent, and based on criteria, set forth in 

EPCA. (42 U.S.C. 6297) No further 

action is required by Executive Order 

13132. 

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,’’ 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 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. 61 FR 4729 (Feb. 

7, 1996). Section 3(b) 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; (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; (5) adequately 

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 them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, this direct 

final rule meets the relevant standards 

of Executive Order 12988. 

G. 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 an 

amended regulatory action 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 small governments. On March 18, 

1997, DOE published a statement of 

policy on its process for 

intergovernmental consultation under 

UMRA. 62 FR 12820. DOE’s policy 

statement is also available at 

www.gc.doe.gov. 

DOE has concluded that this direct 

final rule would likely require 

expenditures of $100 million or more on 

the private sector. Such expenditures 

may include: (1) Investment in research 

and development and in capital 

expenditures by dishwasher 

manufacturers in the years between the 

direct final rule and the compliance 

date for the new standards, and (2) 

incremental additional expenditures by 

consumers to purchase higher-efficiency 

residential dishwashers, starting at the 

compliance date for the applicable 

standard. 

Section 202 of UMRA authorizes a 

Federal agency to respond to the content 

requirements of UMRA in any other 

statement or analysis that accompanies 

the final rule. 2 U.S.C. 1532(c). The 

content requirements of section 202(b) 

of UMRA relevant to a private sector 

mandate substantially overlap the 

economic analysis requirements that 

apply under section 325(o) of EPCA and 

Executive Order 12866. The 

SUPPLEMENTARY INFORMATION section of 

the notice of direct final rulemaking and 

the ‘‘Regulatory Impact Analysis’’ 

section of the TSD for this direct final 

rule respond to those requirements. 

Under section 205 of UMRA, the 

Department is obligated to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule for which a written 

statement under section 202 is required. 

(2 U.S.C. 1535(a)) DOE is required to 

select from those alternatives the most 

cost-effective and least burdensome 

alternative that achieves the objectives 

of the rule unless DOE publishes an 

explanation for doing otherwise, or the 

selection of such an alternative is 

inconsistent with law. As required by 42 

U.S.C. 6295(g)(1) and (10), and (o), 

today’s direct final rule would establish 

energy conservation standards for 

residential dishwashers that are 

designed to achieve the maximum 

improvement in energy efficiency that 

DOE has determined to be both 

technologically feasible and 

economically justified. A full discussion 

of the alternatives considered by DOE is 

presented in the ‘‘Regulatory Impact 

Analysis’’ section of the TSD for today’s 

direct final rule. 


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31962 Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 

H. 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 rule 

that may affect family well-being. This 

rule would 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. 

I. Review Under Executive Order 12630 

DOE has determined, under Executive 

Order 12630, ‘‘Governmental Actions 

and Interference with Constitutionally 

Protected Property Rights’’ 53 FR 8859 

(March 18, 1988), that this regulation 

would not result in any takings that 

might require compensation under the 

Fifth Amendment to the U.S. 

Constitution. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of 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 

today’s direct final rule under the OMB 

and DOE guidelines and has concluded 

that it is consistent with applicable 

policies in those guidelines. 

K. 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 at OMB, a 

Statement of Energy Effects for any 

significant energy action. A ‘‘significant 

energy action’’ is defined as any action 

by an agency that promulgates or is 

expected to lead to promulgation of a 

final rule, and that: (1) Is a significant 

regulatory action under Executive Order 

12866, or any successor order; and (2) 

is likely to have a significant adverse 

effect on the supply, distribution, or use 

of energy, or (3) is designated by the 

Administrator of OIRA as a significant 

energy action. For any 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. 

DOE has concluded that today’s 

regulatory action, which sets forth 

energy conservation standards for 

residential dishwashers, is not a 

significant energy action because the 

amended standards are not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy, 

nor has it been designated as such by 

the Administrator at OIRA. Accordingly, 

DOE has not prepared a Statement of 

Energy Effects on the direct final rule. 

L. Review Under the Information 

Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in 

consultation with the Office of Science 

and Technology Policy (OSTP), issued 

its Final Information Quality Bulletin 

for Peer Review (the Bulletin). 70 FR 

2664 (Jan. 14, 2005). The Bulletin 

establishes that certain scientific 

information shall be peer reviewed by 

qualified specialists before it is 

disseminated by the Federal 

Government, including influential 

scientific information related to agency 

regulatory actions. The purpose of the 

bulletin is to enhance the quality and 

credibility of the Government’s 

scientific information. Under the 

Bulletin, the energy conservation 

standards rulemaking analyses are 

‘‘influential scientific information,’’ 

which the Bulletin defines as scientific 

information the agency reasonably can 

determine will have, or does have, a 

clear and substantial impact on 

important public policies or private 

sector decisions. 70 FR 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal in-progress peer 

reviews of the energy conservation 

standards development process and 

analyses and has prepared a Peer 

Review Report pertaining to the energy 

conservation standards rulemaking 

analyses. Generation of this report 

involved a rigorous, formal, and 

documented evaluation using objective 

criteria and qualified and independent 

reviewers to make a judgment as to the 

technical/scientific/business merit, the 

actual or anticipated results, and the 

productivity and management 

effectiveness of programs and/or 

projects. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report’’ dated February 2007 has been 

disseminated and is available at the 

following Web site: 

www1.eere.energy.gov/buildings/ 

appliance_standards/peer_review.html. 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

report to Congress on the promulgation 

of this rule prior to 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). 

VII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s direct final rule. 

List of Subjects 

10 CFR Part 429 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Household appliances, and Reporting 

and recordkeeping requirements. 

10 CFR Part 430 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Household appliances, Imports, 

Intergovernmental relations, and Small 

businesses. 

Issued in Washington, DC, on May 11, 

2012. 

David Danielson, 

Assistant Secretary of Energy, Energy 

Efficiency and Renewable Energy. 

For the reasons set forth in the 

preamble, DOE amends parts 429 and 

430, of title 10 of the Code of Federal 

Regulations, to read as set forth below: 

PART 429—CERTIFICATION, 

COMPLIANCE, AND ENFORCEMENT 

FOR CONSUMER PRODUCTS AND 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 429 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. In § 429.19 revise paragraph (b)(2) 

to read as follows: 

§ 429.19 Dishwashers. 

* * * * * 

(b) * * * 

(2) Pursuant to § 429.12(b)(13), a 

certification report shall include the 

following public product-specific 

information: The estimated annual 

energy use in kilowatt hours per year 

(kWh/yr) and the water consumption in 

gallons per cycle. 

* * * * * 

PART 430—ENERGY CONSERVATION 

PROGRAM FOR CONSUMER 

PRODUCTS 

■ 3. The authority citation for part 430 

continues to read as follows: 


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Federal Register / Vol. 77, No. 104 / Wednesday, May 30, 2012 / Rules and Regulations 31963 

Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 

2461 note. 

■ 4. In § 430.32 add paragraph (f)(3) to 

read as follows: 

§ 430.32 Energy and water conservation 

standards and their effective dates. 

* * * * * 

(f) * * * 

(3) All dishwashers manufactured on 

or after May 30, 2013, shall meet the 

following standard— 

(i) Standard size dishwashers shall 

not exceed 307 kwh/year and 5.0 

gallons per cycle. 

(ii) Compact size dishwashers shall 

not exceed 222 kwh/year and 3.5 

gallons per cycle. 

* * * * * 

[FR Doc. 2012–12340 Filed 5–29–12; 8:45 am] 

BILLING CODE 6450–01–P 


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