environment are, both singly and in combination. unique both in nature and

magnitude. CEC Petition. No. I at 5-15. For example: California is the largest state in the nation .... California's total water . . . Vvithdrawals exceed all other states . . . . [9[] [T]he median [population] growth rate for all states is expected to be approximately 20 percent through 2025, well Colder California's projected growth rate. [9[] . . . California . . . generated one-eighth of the total nationwide [agricultural] receipts and more than the combined receipts from Texas and Iowa, which are the second and third largest agricultural producers in the U.S..... California has the largest proportion of irrigated land to total farmed acreage ... as well as the highest amount of irrigated farm land of any state in the country . . . . [(J[] California's water supply situation is unique in scope and scale compared to other states or even the world. . . . . C9[] Five years of record-breaking drought along the Colorado River ... have resulted in flows among the lowest in the past 500 years ... . Even if the Colorado River returns to its full flows, California is legally required to reduce the amount it takes from the River .... [9[] ... [F]or more than a decade California's State Water Project has delivered only half its contract volumes . . . . All of the state's major river systems ... are over-appropriated, and groundwater basins face severe overdrafts. . . [9[] California's water rates substantially exceed the national average. . . . . [W]ater saved in California is worth even more ... than water saved in the United States ... [T]he gap between the water rates in California and in the rest of the country is likely to increase .... [91] California is where "the highest concentrations of MTBE [in groundwater] are reported ... ." . . California's water supplies have one of the highest embodied energycosts in the nation. "California's water systems are uniquely energyintensive, relative to national averages ...." CEC Petition, No. I at 5, 7, 9, 11, 12, 13-14. This and a large amount of evidence elsewhere in the record, submitted by both supporters and opponents of the waiver, overwhelmingly demonstrates that California's water and energy interests are "different" in both "nature" and "magnitude" from those in the U.S. generally. See, e.g., California Municipal Utilities Association (representing the vast majority of California's publicly-owned water utilities and energy utilities), No. 7 at I ("California's water systems are unique[] . .. due to pumping requirements to deliver ... water long distances ... over mountain ranges") (emphasis added); California Water Association (representing investor-owned water utilities), No. 51 at I ("[a]s the nation's largest water user . . . California has a series of water systems that are 

### 17 

### 0000 02 2uatigirelA energy intensive") (emphasis added); San Diego County Water Authority.

No. 19 at 1 ('`The State Water Project [is] the nation's largest state-built water conveyance system [with] reservoirs, lakes. power plants. pump stations, canals. tunnels and a 444 mule-long aqueduct") (emphasis added); Association of California State Water Agencies, No. 40 at 2-3 ("California has the most extensive water importation and distribution system in the nation. Significant water supplies are located more than 300 miles from the urban areas .... Much of the water supply system is vulnerable to catastrophic effects of earthquakes and/or levee failures") (emphasis added); Pacific Gas and Electric Company, No. 44 at 3 ("The totality of the challenges for both water and energy supply, the environmental impacts, the connection of these factors with the California economy, and in fact, the sheer size of the California population ensure that the California situation can only reasonably be describecl as unique and compelling. Recently increased concerns ... such as the deteriorating condition of California's water delivery system (i.e., inadequate levees), add more urgency to the California situation") (emphasis added); Marin Municipal Water District, No. 5 ("The extensive importation and distribution of water supplies not only increases costs; it greatly increases security risks. Much of California's water supply travels through the Sacramento Delta, contained and channeled to Southern California through a myriad of levees. Now, these aging levees are susceptible to failure. The liability has become so great that the Governor of California has recently requested that the Delta levees be granted National Emergency status. Seawater intrusion threatens groundwater sources where over-pumping has become necessary; further surface water interruptions could cause irreparable damage. No other state is so susceptible to the catastrophic effects of natural or intentional interruptions in water supply") (emphasis added); see also Air-Conditioning and Refrigeration Institute (opponent of waiver), No. 35 at 3; Sierra Nevada Alliance, No. 4; North Marin Water District, No. 6; Three Valleys MWD, No. 12; Foothill MWD, No. 16; Santa Fe Irrigation Dist., No. 20; West Basin MWD, No. 24; City of Roseville, No. 32; Crescenta Valley WD, No. 42; Los Angeles Dept. Water and Power, No. 46; Irvine Ranch WD, No. 48; City of Napa, No. 56; City of Del Mar, No. 72; Cucamonga WD, No. 13; San Diego County Water District, No. 29; NRDC, No. 41: California Urban Water Conservation Council, No. 61; Long Beach Water Department, No. 22; Olivenhain Water District, No. 58; Channel Islands Beach CSI ). No. 26; Municipal Water District of Orange County, No. 70.



### 18 0000023B. The California Standards are "needed."'

Because DOE (erroneously) concluded that California did not show that it has "unique and compelling" water or energy interests, the agency found it unnecessary to determine whether the record shows that the State's clothes washer Standards are "needed," 42 U.S.C. § 6297(d)(1)(B), to meet such interests. 78 Fed. Reg. at 78164. The record is more than adequate to address the issue, and on reconsideration DOE should find that the Standards are in fact "needed." First, DOE should recognize that "needed" does not mean absolutely indispensable (no State standard could meet such a criterion except in an "emergency" situation, see 42 U.S.C. § 6297(d)(5)(B), but rather "`[n]eeded' should be reasonabl[y] interpreted as `[a] condition or situation in which something is required or waited." CEC Rebuttal, No. 79 at 5 (emphasis in original) (footnote omitted). Second, DOE should conclude that no matter how one interprets the word "needed," the evidence overwhelmingly demonstrates that the Standards are in fact "needed," because the people responsible for meeting California's water and energy needs - the State's water and energy utilities - unanimously and strongly said that they are. For example, the California Municipal Utilities Association, which represents the vast majority of California's publicly-owned water utilities and energy utilities, stated that the Standards are "critical to the State's economy and quality of life of populations that will make California their home for generations to come." CMUA, No. 7 at 2 (emphasis added). Representing investor-owned utilities, the California Water Association stated that "[i]t is crucial that California carry out these... standards and responsibly reduce its dependence on overly tapped and energyintensive regional and imported water supplies." CWA, No. 51 at 2 (emphasis added). Similarly, the Association of California Water Agencies informed DOE that "[m]aximum practicable water use efficiency is essential to minimize the severe negative impact of major interruptions in California's unique and precarious water supply network. .... [9[] Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part." ACWA, No. 40 at 2 (emphasis added). Focusing on energy needs, Pacific Gas and Electric Company, the nation's largest combined electric and natural gas utility, urged DOE to recognize that "[a]ll cost-effective tools are desperately needed to meet [California's] manifold water and energy challenges. .... Resources that are now being less efficiently

The material in this section is also relevant to the "alternatives" discussion in Part 1.B.2., at pp. 9-13 sup ra. 

### 19 0000024spent on residential washer efficiency programs (relative to the cost efficiency of the

preempted California standards) must be freed up to allow the State to develop new programs ...." PG&E, No. 44 at 3 (emphasis added); see also, e.g., California Urban Water Conservation Council, No. 61; Alameda County Water District, No. 57; City of Downey, No. 60.

III. The Preponderance of the Evidence Demonstrates That the California Standards Will Not Significantly Burden the Clothes Washer Industry on a National Basis.
DOE stated that:
. . . DOE has not made a determination as to whether the California regulation would significantly burden the manufacturing, marketing, distribution, sale or servicing of residential clothes washers on a national basis. . . . . [9[] . . . . Manufacturers did not provide detailed cost estimates and AHAM's analysis did not provide justification for its underlying assumptions. Therefore, the interested parties opposed to the California Petition did not satisfy their burden of providing sufficient information to allow DOE to determine that, if the California Petition were granted, the proposed California regulation would significantly burden manufacturing, marketing, distribution, sale or servicing of the residential clothes washers on a national basis. (42 U.S.C. 6297(d)(3)) 71 Fed. Reg. at 78164, 78167; see also id. at 78164-67. DOE was correct in rejecting as inadequate the manufacturers' evidence on the ground that "[m]anufacturers did not provide cost estimates for redesigning their products to meet the WF levels of the California regulation," id. at 78166; see also id, at 78164-67 - in other words, manufacturer "analyses" of the potential impacts on the clothes washer industry from the California Standards are not actually related to the Standards and are therefore irrelevant. DOE was also correct in rejecting AHAM's analyses, because "[e]verything that [ARAM] said on this matter flows from a ... study that is based primarily on `interviews' with manufacturers," CEC Rebuttal, No. 79 at 8, and therefore could not be adequately assessed. (By contrast, the methodology and data used in the Energy Corrunission's analyses were open and available. See pp. 5-9 supra and evidence cited therein.) Moreover, the record demonstrates that "the [AHAM] estimates of manufacturer costs - and therefore the predictions about all other industry burdens -



### 20 0000025are substantially exaggerated ." CEC Rebuttal, No. 79 at 8; see also id. at 8-1 3 and

evidence cited therein. Not only was the evidence presented by waiver opponents inadequate to meet their burden of showing adverse impacts on the industry, but also, and even more important, the record affirmatively demonstrates that there would be no such impacts from the Standards. E.g., CEC Rebuttal, No. 79 at 8-17 and evidence cited therein; PG&E, No. 44 at 5-8 ("the implications for manufacturing, marketing, distribution, sale and servicing of covered products on a national basis is clear: minimal impact").

IV. If a Waiver Petition Is Granted, DOE Must Immediately Adopt a Rule Specifying the Effective Date of the State Standards, without Conducting Another Rulemaking. When DOE published California's Petition and announced this rulemaking proceeding , it indicated that it would follow the procedures established in EPCA: After the period for written comments, the Department will consider the information and views submitted, and make a decision on whether to prescribe a waiver from Federal preemption for California with regard to water use standards for residential clothes washers. 71 Fed. Reg. at 6025 (emphasis added). Yet four months later, when DOE extended the deadline for its decision, the agency indicated that it would take a far different approach: [S]hould the Department decide to grant a petition, section [6306(a)(1)] requires that DOE afford interested persons the opportunity to present written and oral data, views, and arguments with respect to any proposed rules prescribed under section [6297]. (42 U.S.C. 6306( a)(1)) ..... [(j[] In this notice, the Department extends the period for evaluation of the California Petition to December 23, 2006 . . . . At such point, the Department will either provide notice of cc proposed rule on which it ivill seek written and oral cominent, or [deny] the California Petition. 71 Fed. Reg. 35419, 35420 (June 20, 2006). Thus DOE now seems to believe that if it denies a waiver petition, the matter is closed, but if grants a waiver petition, then everyone begins anew and discusses the same issues all over again. If that is indeed DOE's belief, it is wrong.

21 

### 000002In the many provisions on state waivers in 42 U.S.C. section 6297(d), EPCA

makes perfectly clear that when DOE grants a petition, the agency is then and there "prescribing a final rule" - not proposing a final rule. or prescribing a proposed rule - that Grants a waiver with a specific effective date: Any State ... may file a petition with [DOE] requesting a rule that [its] State regulation become effective . . . . [(j[] ... DOE shall, within the [six-month or one-year] period described in paragraph (2) and after consideration of the petition and the comments of interested persons, prescribe such rule if the Secretary finds . . . that the State has established by a preponderance of the evidence that such State regulation is needed to meet unusual and compelling State or local energy or water interests. [9[] .... [DOE] shall ... deny such petition or prescribe the requested rule . L9[] [DOE] may not prescribe a rule under this subsection if [DOE] finds [significant industry burdens].... [9[] [DOE] may not prescribe a rule under this subsection if [DOE] finds [unavailability of features] .... 19[] No final rule prescribed by [DOE] under this subsection may . . . [9[] permit any State regulation to become effective with respect to any covered product manufactured within three years after such rule is published in the Federal Register or within five years if the Secretary finds that such additional time is necessary .... [9[] ... a State is issued a rule under paragraph (1) with respect to a covered product .... 42 U.S.C. § 6297( d) (emphasis added). DOE cites another provision of EPCA, 42 U.S.C. section 6306(a)(1), in the apparent belief that the latter section requires DOE to begin again with another proceeding. 71 Fed. Reg. at 35420. DOE is wrong. That provision simply states: (a) Procedure for prescription of rules (1) In addition to the requirements of section 553 of Title 5, rules prescribed under section 6293, 6294, 6295, 6297, or 6298 . . . shall afford interested persons an opportunity to present written and oral data, views, and arguments with respect to any proposed rule. 42 U.S.C. § 6306(a)(1). The "addition[al] requirements" of "section 553 of Title 5," which is in the federal Administrative Procedure Act, add little to section 6306(a)(1)'s "[p]rocedure." In relevant part, section 553 states:



### 22 

### 000 002 7General notice of proposed rule making shall be published in the Federal

Registerr .... The notice shall include- (1) a statement of the time; place, and nature of public rule making proceedings; (2) reference to the legal authority under which the rule is proposed; and (3) either the terms or substance of the proposed rule or a description of the subjects and issues involved. ... . After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose. 5 U.S.C. § 553. In its proceeding on the California Petition, DOE has complied with these provisions, as well as with the provisions of 42 U.S.C. section 6306(a)(1). As a result, DOE has met all of the statutory "requirements [for] rules prescribed under section ... 6297 ...." Therefore, if DOE grants the Petition, which it should, it must (and thereby does) simultaneously give final approval to a rule waiving preemption and specifying an effective date for the California standards without any further administrative proceedings.

Conclusion and Options for DOE Action Although there is only one action fully consistent with the law and the facts, several options would be available to DOE if, upon reconsideration, the agency changed its mind on some of the issues discussed above but (erroneously) affirmed its original determination on others. The following scenarios, which do not exhaust the possibilities, combine: the 30-day deadline for DOE to act after the January 29 filing of this Request > February 28, 2007;
an assumed additional 30 days for publication in the Federal Register > March 30, 2007;



### 23 0000028application of EPCA's three-years-after-publication rule >

March 30, 2010; and the addition of two days, in order to provide record-keeping clarity and efficiency by putting the effective date at the beginning of a month > to arrive at Thursday, April 1, 2010 as the effective date of the California standards. (If EPCA's five-years-after-publication rule were applied, the same process (plus adding one more day to start on a weekday) would lead to Monday, April 2,2012 as the effective date.) 1. 6.0 WF Standards Take Effect on Thursday, April 1, 2010. As we demonstrated above, the preponderance of the evidence shows that the California 8.5 and 6.0 WF Standards are needed to meet unusual and compelling State and local water and energy interests, will not significantly burden the clothes washer industry on a national basis, and are not likely to result in the unavailability of any product characteristics, features, and the like. See 42 U.S.C. § 6297(d). Therefore., all the Standards should receive a waiver and take effect three years after DOE's action. However, the 8.5 Standards would be meaningless while the 6.0 WF Standards were also in place. As a result, the 8.5 WF Standards should receive a waiver, but their taking effect should be conditioned upon the 6.0 Standards not taking effect because of a future, external, controlling event (e.g., being completely overturned in court). 2. 6.0 WF Standards Take Effect (but Enforcement is Limited to Models Above 6.3 WF for Top-Loaders) on Thursday, April 1, 2010. If DOE were to determine that the appropriate showings had been made on all of the Standards, except (erroneously) that no top-loader below a 6.3 WF will likely be available in California in 2010, then based on those determinations there should be a waiver that allows enforcement of California's 6.0 WF Standard for top-loaders only against those models above a 6.3 WF and that allows full enforcement of the 6.0 WF Standard for front-loaders, both to take effect in 2010. 3. 8.5 WF Standards Take Effect on Thursday, April 1, 2010; 6.0 Standards Take Effect on Monday. April 2, 2012. If DOE were to determine that the appropriate showings had been made on all of the Standards, but also determined (erroneously) that the record shows that an additional two-year delay for the 6.0 WF Standards is necessary to accommodate retooling, redesign, or distribution needs, see 42 U.S.C. § 6297(d)(5)(A), then the 8.5 WF Standards should take effect in three years and the 6.0 WF Standards in five years.

24 

### 0000029Respectfully submitted,

William M. Chamberlain, Chief Counsel Jonathan Blees, Assistant Chief Counsel William Staack, Senior Staff Counsel Michael Doughton, Senior Staff Counsel



### 25 O OG OO Q'J OCase Name: California Energy Commission Petition for Exemption from Federal Preemption of California's Water Conservation Standards for Residential Clothes Washers 

### DOE Docket Number: EE-RM-PET-100 PROOF OF SERVICE
1 am a citizen of the United States, over the age of 18 years, and not a party to or interested in the within entitled cause. My business address is 1516 9th Street, Sacramento, California 95814. On this date, I served the following document:



### CALIFORNIA'S REQUEST FOR RECONSIDERATION X by U.S. Mail - by placing a original thereof enclosed in a sealed

envelope with postage thereon fully prepaid, in the United States Post Office mail at Sacramento, California addressed as set forth below: X by Courier Service - a true copy thereof to the office(s) of the

addressees:
Ms. Brenda Edwards-Jones U.S. Department of Energy Building Technologies Program Mail Stop EE-2J, Room I J-018 1000 Independence Avenue, SW Washington, DC 20585-0121

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on January 29, 2007, at Sacramento, California.



### CHESTER HONG Print Name

G6C900 

## 31STATE OF CALIFORNIA - THE RESOURCES AGENCY ARNOLD SCHWARZENEGGER, Governor CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET SACRAMENTO

. CA 95814-5512 

### May 15, 2006

Ms. Brenda Edwards-Jones U.S. Department of Energy, Building Technologies Program Mailstop EE-2J, Room 1 J-018 1000 Independence Avenue, SW Washington, DC 20585-0121

California Energy Commission Petition for Exemption from Federal Pree mption of California 's Water Conservation Standards for Residential Clothes Washers

DOE Docket Number EE- -PET-100 Dear Ms. Edwards-Jones, I enclose the original and one copy of the Rebuttal Comments of the California Energy Commission. Per Bryan Berringer's e-mail to me of May 3, 2006 (4:17:39 a.m. PDT), on which you were cc'd, the comments are due today, May 15. I have also e-mailed a copy of this letter and the Rebuttal Comments to California.Petition@ee.doe.gov as well as to Messrs. Berringer, DePriest, andMcCabe. Please return the copy, file-stamped, in the enclosed stamped, selfaddressed envelope. Thank you for your assistance.

Sincerely,
/s/
Jonathan Blees Assistant Chief Counsel
cc: California.Petition@ee.doe.gov Bryan.Berringer@ee.doe.gov Thomas.DePriest@hq.doe.gov Michael.McCabe@ee.doe.gov CEC Appliance Group (via e-mail) 

## 000 0 032UNITED STATES DEPARTMENT OF ENERGY California Energy Commission Petition for Exemption from Federal Preemption of California's Water Conservation Standards for Residential Clothes Washers

DOE Docket Number EE-RM-PET-l 00

REBUTTAL COMMENTS OF CALIFO RNIA ENERGY COMMISSION

May 15, 2006

Maximizing energy efficiency and renewable energy IS the domestic epicenter in the War on Terror and it is imperative that we maximize the partnerships between the public and private sectors in new and creative ways with a sense of seriousness, national purpose and the urgency the situation merits. I am asking you today ... to rise above the conventional and insist on making a real difference in the way things are done. Keynote Address by Hon. Alexander Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy, United States Department of Energy, to the Power-Gen Renewable Energy and Fuels Conference, April 11, 2006.'

Introduction and Summary The comments opposing California's clothes washer petition2 are a patchwork of factual mischaracterizations, legal mis-statements, and analytic errors. They provide no valid reason for DOE to deny the Petition.

I www.eere.gov/news/news.-detail.cfm/news_id=9921. 2 California Energy Commission ("CEC"), Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers (Sept. 2005) ("California Petition" or "Petition"). 

### 1 

### 0000033The opposing comments fall into two basic categories

. First, they suggest that

California really doesn ' t need its residential clothes washer ("RCW") standards. We believe that in assessing California ' s needs , DOE should rely on the supporting comments made on behalf of hundreds of California water districts , California gas and electric utilities , and California businesses , and on the express directive from California'

s Legislature and Governor that the standards be enacted - rather than on assertions from manufacturers and trade associations located in places such as Wisconsin , the District of Columbia, and New Zealand. Second, the manufacturers conjure up - in this obscure legal proceeding known primarily to a few lawyers and engineers - an ominous specter of businesses failing and consumers rebelling, all because of a potential shift to front-loading clothes washers. Yet on their websites, which are marketed to the millions of consumers about whose welfare the appliance industry appears so solicitous, these very same manufacturers are singing the economic, environmental, and performance praises of .... front-loading clothes washers. Whirlpool, for example, touts the "capacity, cleaning, and energy advantages offered by" front-loaders.3 Bosch notes that its front-loaders provide "more gentle fabric care, superior cleaning results and quieter operation"4 and will "add[] up to hundreds of dollars in savings per year."5 And major retailers selling clothes washers agree: thus a consumer reading Sears' "Washer and Dryer Guide" will learn that "most high efficiency washers clean better than their conventional counterparts" and that the higher first cost of front-load washers "can be recouped in about 8 to 10 years."6

3 www.whirlpool.com/catalog/buying_guide.jsp?sectionId=286 (last visited May 10, 2006) (emphasis added). 4 www.boschappliances.com/category.cfm?cat-id=115&menulevel=0102 (last visited May 9, 2006)(emphasis added). www.boschappliances.com/category.cfm?cat-id=115&menulevel=0103 (last visited May 9, 2006) (emphasis added). 6 www.sears.com/sr/javasr/dpp.do?vertical=Buying%20Guides&cat=- Laundry&BV-UseBV Cookie=Yes&splash=true&nstate=http://www.live.bguides.-webcollage.net/wc/laundry 2.html---G!079078702827!XRHzYAguDplSwH5C ---- @http://guides.sears.com/server/sears/bguides-laundry-showcase4TopLoad%20vs.%2OFront-Load (last visited May 9, 2006). Another major retailer, 

### 2 

### 0000034We agree. The California clothes washers standards will benefit consumers,

without imposing any significant burden on the industry. DOE should approve the Petition. In this document, the CEC responds in detail to the opposing comments. The comments and responses are grouped under headings corresponding to the statutory criteria applicable to waiver petitions in 42 U.S.C. § 6297(d)(1)(B)-(C), (d)(3)-(4). Citations to the comments are in the form "#X, p. Y"; the number refers to the comment number assigned by DOE.' Because the most extensive opposing comments were filed by the Association of Home Appliance Manufacturers ("AHAM," #52), and because the substance of most comments made by other opponents also appears in AHAM's comments, in general we cite only to AHAM. Nevertheless, our responses thereto should be understood as applying to all similar comments. Where an opposing comment deals with an issue not raised by AHAM, we of course separately deal with and cite to it. (To the same end, where there is more than one comment supporting a particular aspect of the California Petition, we generally cite only to one of the comments.)

1. Unusual and Compelling Water and Energy Interests. A. "Substantially Different in Nature and Magnitude than Those Prevailing in the United States Generally."
1. Regional v. National Comparison. The Federal Register notice soliciting on the California Petition asks whether, in determining whether a State's interests are "substantially different," DOE should "include [a] comparison to regions as well as national averages?" 71 Fed. Reg. 6022, 6025 (Feb. 6, 2006). The answer is "no"; comments to the contrary, #52, pp. 17 - 20, are in error. The governing statute clearly states that "unusual and compelling State . .. energy or water interests" means those that are "substantially different in nature or magnitude than those prevailing in the United States generally," 42 U.S.C. § 6297(d)(1)(C)(i) (emphasis added). Therefore, a regional comparison is Love's, is currently broadcasting a television commercial about laundry that features a front-loading washing machine.
' See www.eere.energy.govibuildings/appliance_standards/state petitions.html (last visited May 14, 2006). 

### 3 

### 0000035inappropriate, and a comparison to a few isolated, individual states or cities is even

less relevant. See, e.g., # 17, p. 4. Moreover, although individual rates for water and energy may be comparable in selected areas across the country, the combined water and energy rates found across the entire state are unique in the U.S. Pointing out a few locations such as Seattle and Boston does not negate the unique water and energy costs experienced by the whole State of California. As confirmed by the hundreds of California water agencies and utilities supporting the Petition, the situation in California is both unique and critical. E.g., # 61, pp. 2 - 4.
Moreover, even if a regional comparison were appropriate , a State ' s interests need be substantially different only in "nature or magnitude ." 42 U.S.C. § 6297(d)(1)(C)(i) ( emphasis added). Therefore (to continue the hypothetical), if California ' s water interests were not substantially different in "nature" from those in other regions (actually , they are), the RCW standards would still meet the criterion in section 6297 (d)(1)(C)(i), because the State ' s interests are substantially different in magnitude than those of any other region. See Petition , pp. 5 - 7, 14 - 15.

2. Energy or Water Emergencies. ARI asserts that a State can obtain a waiver for an energy or water standard only if its interest rise to the level of an "energy or water emergency situation." #35, p. 3. That is absurd. Nothing in the statute or its legislative history, or in DOE's regulations, remotely suggests such a requirement. Clearly, the statute requires only that the State's interests be "substantially different in nature or magnitude than those prevailing in the United States generally" (and that the State's standard is preferable to alternatives). 42 U.S.C. § 6295(d)(1)(B)-(C). ARI has confused the statutory provision governing the effective date of a state preemption waiver with the provision governing the substantive criteria that DOE must assess

. See #35, p. 3; compare 42 U.S.C. § 6297( d)(1)(C) (defining "unusual and compelling State ... interests " and not mentioning emergencies) with id. § 6297(d)(5)(B) (governing effective date of state waivers and mentioning emergencies). Moreover, the latter provision , upon which ARI relies, was applicable to clothes washer waivers only until 1993 . 42 U.S.C. §§ 6295(g)(2), (g(4)(A), 6297( d)(5)(B).8

8 ARI also misquotes the statute - for example, including the word "energy" but omitting the word "water" - in several instances. Compare # 35, pp. 2 - 4, with 42 U.S.C. § 6297(d)(1)(C). 

### 4 

### 00000 36Indeed, ARI appears to concede that California has unusual and compelling

water and energy interests. ARI states that "everyone can agree" that:

1. California is the largest state, 2. California's population is increasing, 3. California will remain the largest state for the foreseeable future, 4. California has large water and energy needs because it has a large population, and 5. Portions of California have suffered a drought or excess water at differing times over the last decade. #35, p. 3.9 Self-evidently, California's energy and water interests are "substantially different in ... magnitude," 42 U.S.C. § 6295(d)(1)(C)(i) (emphasis added), than those prevailing in the U.S. generally. That is all that is required. (And, of course, our Petition, and the supporting comments, discuss many more factors demonstrating that California's interests are different in both nature and magnitude than those in the U.S. generally.) We also note that several supporting commenters find that the California Petition is overly conservative in estimating the magnitude of the State's water and energy interests. E.g., #44, pp. 4 - 5; #61, p. 4.

3. Need for the Standards. Opponents suggest that a State's standards are not "needed" unless they are capable, standing alone, of completely meeting the State's "unusual and compelling. .. energy or water interests." #52, pp. 10 - 12; see 42 U.S.C. § 6297(d)(1)(B). This extreme interpretation would obviously make it impossible for any waiver petition ever to be granted. No one efficiency measure or supply source is capable of meeting a State's needs. "Needed" should be reasonable interpreted as "[a] condition or situation in which something is required or wanted."10

9 One commenter asks California to explain why some water uses in the State increase during times of shortages. #31, p. 3. During drought, agricultural, landscaping, and similar water uses increase because higher temperatures and drier air mean that plants require more water; increased evaporation also requires increased consumption to replace the evaporated water. to http://dictionary.reference.com/search?q=needed (last visited May 12, 2006) (emphasis added). 

### 5 

### 000037B. Alternatives to the Standards. 1. The State's Water and Energy Plans. Opponents claim that the Petition is somehow invalid because the California Water Plan does not expressly discuss the State's RCW standards. #52, p. 6. But the statute does not require such a discussion. What is required -it is not clear whether this is required only of DOE, or of both the State and DOE - is that alternatives be evaluated "within the context" of the State's water (or energy, as the case may be) plan. 42 U.S.C. § 6297(d)(1)(C). The Petition does so - indeed, the Petition is the State's attempt to free the RCW standards from federal preemption, so that the standards can go into effect and their effects taken account of in the next Water Plan.
The criticism that the Petition did not refer to the final California Water Plan is equally unavailing. The Petition was submitted in September 2005, several months before the final Plan was adopted in December."

2. The Availability of Alternatives. Opponents suggest that DOE should deny the Petition because other efficiency measures, or supply sources such as desalination, might be capable of providing more water than the California standards. #52, pp. 10 - 12; #38, pp. 2 - 3. This is essentially the same assertion as the erroneous one discussed at p. 5 above: that a State's standard is not needed unless it can, by itself, completely meet the State's interests. If the existence of any alternative (no matter how- costly or environmentally damaging), can prevent DOE from granting a waiver, then there no petition can ever be successful. Obviously, Congress did not intend such a result. The opponents also fail to present any evidence that their suggested alternatives - tax credits, water markets, desalination - are preferable to the California Standards; there are no estimates of the costs or savings potential of such programs. See, e.g., #52, pp. 10 - 12; #31, p. 6. The Petition, however, demonstrates that financial incentives are expensive and cannot cover the entire market, that water markets are difficult to implement because water savings are not necessarily fungible, and that desalination is expensive and energy-intensive. Petition, pp. 11 - 12, 27 - 34; see also #61, pp. 1 - 2; #29, pp. 5 - 7. In any event, the essential point here is that all reasonably-priced water supply sources, and 11 The final Plan, which is hereby incorporated by reference, is available at www.waterplan.water.ca.gov/cwpu2005/index.cfmdf (last visited May 10, 2006). 

### 6 

## 0000038efficiency measures , must be pursued if California is to have any hope of meeting its

water needs: There are many innovative measures to improve water efficiency, and California water agencies are already implementing those that are locally cost effective. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part. Improving the efficiency of clothes washers will not supplant other cost effective water conservation efforts, such as rebate and voucher programs, improved leak detection, increased public education programs, local landscape and water use ordinances, water transfers, new local storage reservoirs and groundwater conjunctive use projects, increased reclamation of stormwater and treated wastewater, and salt and brackish water desalination. It is clear that there is no one "silver bullet" to secure California's water future, but ACWA [the Association of California Water Agencies, representing the almost 450 water agencies that deliver over 90 percent of California's water] supports the efforts of its water agencies to implement those that will make significant incremental contributions using water more efficiently. ACWA, #40, pp. 1 - 2 see also # 61 , pp. 1 - 2.

3. Reliance on the Market Alone. The clothes washer industry appears schizophrenic here. On the one hand, some commenters assert that the market is working just fine, and that there is no need for the California standards. The Edison Electric Institute is perhaps the most optimistic, predicting that according to DOE and AHAM data, "the typical clothes washer in 2007... will have a.water factor of 6.92...." # 31, pp. 4 - 5. On the other hand, manufacturers predict dire consequences if the 8.5 WF standard takes effect in 2007 and the 6.0 WF standard takes effect in 2010. E.g., #50, p. 1; #56, p. 3. They cannot have it both ways. If the market really is going to work as well as some commenters suggest, then the standards will not cause any significant burden to the industry to produce high-efficiency washers. On the other hand, if it will be a substantial burden to the industry to comply with the standards, then that must be because the market is not working and sales of high-efficiency washers are low. California is taking a sensible dual approach. Utilities in the State have already spent hundreds of millions of dollars in an effort to spur sales of high-efficiency washers. (Thus the improvements in California RCW energy and water efficiency 

### 7 

### 0000039are not " market

- driven ," 42 U.S.C. § 6297(d)(l)(C)(ii); rather, they are the result of

the non

-market forces of costly rebates and other incentives . #44, pp. 3 - 4.) Obviously, we would be pleased if those efforts resulted in a 100 percent conversion of the market

. But on the reasonable assumption that they will not be that successful, the State has adopted standards as well. California ' s water suppliers want to be able to use both methods , and DOE should allow them to do so.
II. Potential Effects on the Appliance Industry. The industry makes dire predictions about the fate of clothes washer manufacturers if the preemption waiver is granted . #52, pp. 37 - 44 . Everything that is said on this matter flows from a GRIM study that is based primarily on "interviews " with manufacturers , #52, p. 46 ), so that the analysis is hard to penetrate. Yet even the limited assessment that is possible , demonstrates that the estimates of manufacturer costs

- and therefore the predictions about all other industry burdens - are substantially exaggerated. (The errors also affect the industry ' s predictions of consumer impacts. ) Moreover, taking the industry ' s estimates at face value actually indicates that the costs of the standards will be quite reasonable

- indeed, on the order predicted by the Petition. A. Manufacturing and Distribution Costs, Including Redesign and Production Needs.Manufacturers' assertions of harm are based entirely on the premise that toploading washers will be eliminated from the California market if the State's RCW standards take effect. This is an unreasonable assumption, see p. 13 below, and it leads to the further unreasonable assumptions that total washer sales in California would decline dramatically. 12 From these untenable foundations the industry 12 Indeed, it is unrealistic to believe that changes in the California market could affect the nationwide industry at all. California represents approximately 10 percent of thenational market (taking into account the current California sales of standardscompliant RCW, the share of the national market affected by the standards would be closer to 7 percent), which is probably within the normal band of error for marketing and investment decisions. Another unrealistic assumption is that the industry's effective tax rate is 43 percent. In 2005, the effective tax rate for Whirlpool, which now accounts for 70 percent of the domestic clothes washer market, was 28.6 percent(33.9 percent in 2004 and 35.0 percent in 2003). http://media.corporateir.net/media_files/irol/97/97140/-WHR_-AR05/WHR05-FinSum.pdf (last visited May 14, 2006). 

### 8 0000040concludes that it would have to invest around $150 million in new production

capacity and incur around $100 million in other expenses ("SG&A"), which would lead to a decline in the value of the entire industry of 16 percent. # 52, pp. 38, 41, 46 - 49. Not only are these numbers based on highly unreasonable assumptions, but they also differ substantially from other numbers presented in the industry comments. The estimate of $150 million in capital costs is based on the assumption that a production line with a capacity of 500,000 units costs $50 million, and that there will be three companies making such investments. #52, p 46. But such an investment would provide new capacity of 1.5 million units, which is much more than would be needed for the industry's estimate that around 800,000 new California units would be required (roughly 1 million total shipments per year, minus around 200,000 that are already standards-compliant). #52, p. 45. In addition, there appears to be no corresponding sale or write-down of the existing production lines that $150 million in new capacity would replace. That must mean that the existing lines are already fully depreciated and therefore of limited value - in other words, ready for replacement whether or not California imposed standards. Let us assume, however, that the $150 million figure for capital costs, as wellas the $100 million in other costs, are correct, for a total of $250 million in industrywide costs caused by the California standards. (There might also be additional component costs, but no such costs are explicitly identified in the GRIM tables.) The industry estimates that total California sales will average roughly 1 million units per year in the 14-year period between 2007 and 2020 (extrapolating for the last two years), for a total of around 14 million units during that time. #52, p. 45. Spreading $250 million in costs over 14 million units results in a per-unit increase due to the California standards of less than $20. Even "rounding up" to $20, then doubling that figure three times (20 > 40 > 80 > 160) to account for manufacturer, distributor, and retail markup (the actual markups would be significantly lower) results in a per-unit consumer cost increase of $160 resulting from the California standards. This number is much less than the industry's other estimates of $280 (8.5 WF) and $380 (6.0 WF), #52, p. 29, and is in fact quite consistent with the Petition's estimate of$130 for the 6.0 WF standards, Petition p. 21. (The 6.0 WF standard would be costeffective at an incremental cost of up to $242. Petition, p. 21.) The industry's numbers also indicate that $250 million in costs should be very easily recovered. The industry appears to assume a gross margin of approximately $100 on each front-load unit. #52, pp. 35, 45, 48, which, when applied to sales of around a. million units per year, id. p. 45, would produce an annual gross margin of around $100 million. That kind of a cash flow should certainly be adequate to recover an investment of $250 million. 

### 9 

### 0000041Finally, the assertion that the California standards will result in a decline in

industry value of $100 million, "or about 16% of total industry value," #52, pp. 38 - 39, is clearly way off base. If the entire industry - the clothes washing divisions of Whirlpool, GE, Bosch, et al. - is actually worth only $600 million ($100 million is about 16 percent of $600 million), we'd be happy to buy it. (Whirlpool purchased Maytag for $1.7 billion.) B. Employment Impacts. Although employment impacts are not one of the statutory criteria DOE uses in assessing preemption waivers, see 42 U.S.C. § (d)(1)(B)-(C ), (3)-(4), the two leading members of the clothes washer industry expressed concern about the potential impacts on their employees if the California standards take effect

. Maytag stated: We recognize that California has little regard for where manufacturers produce clothes washers. As long as the units meet the CEC's excessively oppressive water standards, California regulators don't care that many Midwestern-based employees (in our case, Herrin, Illinois and Newton, Iowa) would likely lose their well-paid jobs. #53, p. 2. This apparently would aggravate the current situation, for, as Whirlpool notes, "the Midwest has already been particularly hard hit with job losses." #17, p. 2. We believe, however, that this concern, while understandable and laudable, is not likely to become manifest, because the industry's views about sales losses appear so untenable. See p. 13 below; #44, p. 5 - 6, 8 - 9. We also suggest that DOE might want to view Maytag's and Whirlpool's concern with a slight bit of skepticism:13 Whirlpool To Cut 4,500 Jobs BENTON HARBOR, Mich., May 10, 2006 (CBS/AP) Whirlpool Corp. said Wednesday that it will cut 4,500 jobs and close three plants as it consolidates operations as part of its acquisition of rival appliance maker Maytag Corp. The former Maytag plants being closed are in Iowa, Illinois and Arkansas, Whirlpool spokesman Dan Verakis said. Whirlpool said it will also close the former Maytag corporate headquarters.in Newton, Iowa.
13 www cbsnews

. com/stories/2006/05/10/business/mainl604988 .shtml?CMP=ILCSearchStories (last visited May 11, 2006). 

### 10 

## 0000042As part of the consolidation, Whirlpool said it will create 1,500 positions

at other unspecified locations, for a net loss of about 3,000 jobs. "We are taking these actions to rapidly restore the competitiveness of the Maytag brands," Jeff M. Fettig, Whirlpool chairman and chief executive, said in a statement. "This is an important step in our integration process that will allow us to drive continuing performance improvements and will better align our brands, products and operations with the markets we serve domestically and globally." "The loss of jobs in this community will not be easy to swallow, which is why we must begin acting right now to support this community and its workers during their difficult transition period," Iowa Gov. Tom Vilsack said in a statement. Web Exclusive: Herrin, Illinois, mayor Vic Ritter tells CBS Radio News' Mara Rubin that the Whirlpool plant closing will hurt his city. "There's a lot of good people out there. I just now got done talking to a lady who's been out there 10 years, and we kind of had a little cry together," Herrin, Illinois, mayor Vic Ritter told CBS News. "We're going to continue talking to them, trying to get them to reconsider. If we can't do any good there, we're going to pull ourselves up by the bootstraps and we're going to go on." But Ritter said Whirlpool left a bad taste in his mouth. "I haven't been contacted by any people that we were negotiating with, so my disappointment has turned a little bit to anger, that they would think so little of the people of Herrin to not even contact their mayor," he said, although he did get a call from a lower-level manager.
C. Effects on Competition. The Whirlpool-Maytag merger has created a single company that accounts for more than 70 percent of the U.S. clothes washer market. The Justice Department nevertheless found that "this transaction is not likely to harm consumer welfare." 14 In
14 www. cbsnews

. com/stories/2006/05/10/business/mainl604989 .shtml?CMP=ILCSearchStories (last visited May 11, 2006). 

### 11 

### 0000043light of that finding , it is inconceivable that the California standards would have a

substantial effect on competition. It is also unlikely that the standards would affect small businesses more than large businesses

. If smaller retailer sales actually declined as a result of increased repairs , see #53 , p. 5, any lost sales revenue would be made up by gains in repair revenue . Moreover, any such circumstances would be short-lived. The specter of consumers traveling out-of-state to buy noncompliant washers, see #53, p. 5, is completely unrealistic. Since 1976 California has adopted efficiency standards for dozens of appliances, and there is no evidence whatsoever that any of them have hurt California sales in favor of sales in other States.
D. Effect on Models and Sales Volumes in California and the United States. Please see page 13 below and Comment #44 , pp. 5 - 6, 8 - 9. E. Potential Standards in Other States. California ' s Petition is the very first one filed since the enactment of NAECA in 1987

. Granting it is scarcely going to dismantle the national clothes washer market or upset the national standards scheme , even if other states were to follow in California ' s footsteps and adopt the State ' s RCW standards as their own. Indeed, manufacturers would be helped , not hurt, if other states did so: there would be more sales of energy

-efficient washers over which to spread the (minimal ) additional costs of producing them, and if the standards were regional, any increases in distribution costs would also be moderated. In the past few years ,. States other than California have begun adopting appliance efficiency standards , but the vast majority of those standards have been the same as California ' s standards for the respective appliances. Thus even if other States do adopt RCW standards , the situation Congress wanted to prevent

- a "patchwork ofdiffering State regulations," S. Rep. No. 100-6, at 4 (1987), reprinted in 1987 U.S.C.C.A.N. 52, 54-55 - is very unlikely to occur . And DOE, of course, is in the ideal position to prevent such a result , because any additional State standards would also have to seek a waiver from the Department.

III. Consumer Impacts : the Potential Absence of Top-Loading Machines. Opponents predict The End of the Laundry World as We Know It if DOE grants a waiver to California ' s RCW standards . #52, pp

. 7, 25 - 34. Their assertions are premised entirely on the dubious proposition that the California 6.0 WF 

### 12 

### 0000044standard, which is not scheduled to take effect until 2010, will eliminate every single

top-loading washing machine. That is extremely unlikely. As we explained in thePetition, many top-loading washers using a horizontal-axis (or other high-waterefficiency platforms such as paddles rather than an agitator) are already on the market, and the design is common overseas. Petition, p. 46. It is unrealistic toassume that such designs will not be able to achieve a 6.0 WF in the next three-and-ahalf years. Moreover, door location is not important to the vast majority of consumers. DOE's own consumer research - from six years ago, when front-loaders were much less well known than they are today - shows that consumers view price, energy and water efficiency, and capacity as the most important features; door location was listed as a "top five" attribute by only 13.5 percent of the survey participants. Petition, p. 46. Many European countries have essentially no top-loaders. One manufacturer claims that top-loaders are necessary for the elderly and disabled. #50, p. 4. Yet the elderly and disabled are apparently not troubled by the absence of top-loading dryers from the entire national market. Indeed, it can be more difficult to reach down into a top-loader than into a front-loader, especially if the front-loader is on an inexpensive, universally-available stand, or is stacked with a dryer. Other manufacturers assert that low-income consumers will be hurt if toploaders were to become unavailable in California. #55, p. 6. Yet the largest supplier of multi-family services in the State believes that the California standards are "essential" to avoid "disproportionately impacting low-income households." # 62, pp. I - 2.
Still others believe that consumers will not be able to add clothes'after a wash cycle starts or to use fabric softeners. #52, pp. 23, 26. They apparently are unaware of recent design advances that have modified front-loaders to allow the addition of clothes after the cycle starts, and to add detergent, softener, and bleach at the correct times. See p. 16 below. In the end, though, we cannot describe the "performance characteristics[,] features, sizes , capacities, and volumes," 42 U.S.C. § 6297(d)(4), of front-loading residential washing machines - which "t[ook] the nation by storm in 1998" 15 - any

15 www.aham.org/ht/a/GetDocumentAction/i/1407 (last visited May 9, 2006).



### 13 

### 0000045better than do retailers and manufacturers themselves. For example, Sears explains to

consumers:16 Newer front-load washers have gained popularity in recent years with their innovative technologies .... Both [front-loaders and top-loaders] will do an effective job of cleaning your laundry .... [Front-loaders] clean 12 to 20 pounds of laundry per load ... [and] [c]an clean fabrics that could potentially be damaged in a traditional top-loading washer, such as silk and wool . . . . H[igh] E[fficiency]detergents can be purchased at most places you already shop. .... [M]ost high efficiency washers clean better than their conventional counterparts. One manufacturer, which manufactures only front-loaders, is especially enthusiastic about the technology:'7 Bosch has been advancing and improving this design over a 5O year history , when we first introduced our front

- loading models in Europe. Today , our machines are so advanced they use 60 % less water and almost 68% less electricity than conventional models , with more gentle fabric care , superior cleaning results and quieter operation. This powerful combination of efficiency, performance, value and engineering is what makes Bosch washer and dryers the best you'll ever own. Bosch also notes that the combined energy and water savings of one of its series of models (including reduced dryer time as a result of reduced moisture content) will provide consumers with "hundreds of dollars in savings per year.s18

16 www sears.com/sr/javasr/dpp.do?vertical=Buying%20Guides&cat=Laundry&- B V_UseBVCookie=Yes&splash=true&nstate=http://www.live.bguides.webcollage.n et/ wc/laundry_2.html- G! 079078702827!XRHzYAguDp1SwH5C-- --@http://guides.sears.com/server/sears/bguides-laundry-showcase#Top-Load%20vs.%20FrontLoad (last visited May 10, 2006) (emphasis added). 17 www.boschappliances.com/category.cfm?cat_id=115&menulevel=0102 (last visited May 9, 2006) (emphasis added). 18 www.boschappliances.com/category.cfm?cat id=115&menulevel=0102 > "AxxiSTM Washers" (last visited May 9, 2006). We acknowledge that savings of hundreds of dollars per year are unlikely. But savings of "hundreds" of dollars over the 14 year lifetime of a clothes washer are more than sufficient to make the 

### 14 

### 00000GE has a similar attitude:19

Why choose a GE frontload washer? Use your ecomagination. ecomagination ( ekomaj enashen) n. A goal, a methodology, a brand and a philosophy that expresses GE's commitment to imagine and build innovative solutions for the benefit of our customers and society at large. Water savings If every U .S. household currently using a non -ENERGY STAR® washer replaced it with a GE frontload washer:
® Consumers would save a combined annual total of more than $3 billion in water bills. ® Nearly 9 trillion gallons of water would be saved over 12 years , enough water to sustain every person on the planet for three days. Energy savings ® The washer '

s total energy and water savings can pay for the initial cost of the washer over its life.' -Based on an average cost of water, energy and sewer over 12 years using 10 loads/week compared to typical topload washer, WWSE5240D. Bosch and GE have relatively small shares of the clothes washer market, but their views are not unusual. Whirlpool's recent merger with Maytag created a company that produces more than 70 percent of the clothes washers and dryers in the U.S.; it too believes that front-loaders provide substantial benefits to consumers:20 California RCW standards very cost-effective for the consumer. See Petition, pp. 21 , 23. 19 www.geappliances.com/products/introductions/frontload/downloads/lFrontload_- Brochure.pdf (last visited May 9, 2006) (emphasis added). 20 www.whirlpool.com/catalog/buying_guide.jsp?sectionld=288 (last visited May 10, 2006). 15 

### 000004'Front-loading washers deliver excellent performance overall. . . . .

Because they clean by tumbling and not agitation, front-loaders are usually gentler on fabrics and cause less wear and tear on washables than conventional top-load washers. You may even find you can wash fabrics - like washable silk and wool - that could be damaged in a traditional top-loading washer. .... [F] ront-loaders use less water and energy per load. And because they often have a faster spin speed, most front-loading washers remove more water from clothing, which reduces drying time. Most front-loading washers can hold 12 to 20 pounds of laundry per load .... [Earlier on this webpage, Whirlpool notes "[s]tandard capacity for a top-loading washing machine is 12 to 16 pounds per load."] They require a special, low-sudsing detergent [that is] available in most stores, including grocery stores and mass retailers, under many brand names ... Most front-loading washers have 3 to 4 detergent dispensers that allow you to add your detergent, fabric softener and bleach at the beginning of the cycle. The machine adds each product at the correct time during the wash cycle to ensure optimal results. Whirlpool is especially interested in informing potential buyers about the savings in money and time that consumers will gain from the larger tub capacities available in high-efficiency washers:21 Capacity is a key consideration when shopping for a washer. The more you are able to wash in a single load, the less time and money you'll spend doing your laundry. For greater capacity, or to accommodate large and bulky items, consider a front-loading washer or a model with a wash plate instead of an agitator to free up space in the tub.

21 www.whirlpool.com/catalog/buying_guide.jsp?sectionId=2890 (last visited May 10, 2006). Whirlpool's concern - in this proceeding - that consumers might be "confused" because some nationally-advertised brands would not be available in California is misplaced. #17, p. 3. No one - manufacturers, retailers, or consumers - has complained to the Energy Commission that any of its standards, whether for consumer products, commercial and industrial equipment, or non-federally regulated appliances, are causing such confusion.

16Larger washer capacity not only allows you to wash more items in a

single load, but also gives you the flexibility to wash a broader range of things like pillows, comforters and rugs. Being able to wash these bulky items at home will ultimately save you visits to the local Laundromat or the dry cleaners as well as the associated expense. For high-volume laundry households, maximizing your washer capacity is key, but smaller households should also consider the flexibility of a larger washing machine. Most washers, starting at the mid-price range for top-loaders and the majority of the front-loaders, have either a manual or automatic feature that adjusts water levels according to the load size. In sum, although we disagree strongly with what the opposing commenters have said in this proceeding about the consumer effects of front-loading washers, we agree just as strongly with what they are actually telling consumers.22 22 AHAM lists seven clothes washer manufacturers on its website, www.aham.org/- consumer/index.php?display=Brands&products=Y&prodcat_id=610 (last visited May 14, 2006). Statements about front-loaders from the websites of three of those manufacturers are set forth above. The websites of the other four manufacturers say little or nothing (and certainly nothing negative) about front-loaders, although they are featured prominently visually. Electrolux does not list clothes washers on its website. www.electroluxusa.com/nodel38.asp?CategoryID=4168 (last visited May 9, 2006). Fisher and Paykel appears not to make front-loaders for the U.S. market. See http://usa.fisherpaykel.com/laundry/washers/-models.cfn (last visited May 9, 2006). The home page of the Haier Group features pictures of eight appliances, including one clothes washer - a front-loader. www.haieramerica.com (last visited May 10, 2006). The sole picture on Haier's "Laundry Products" page is of a stacking washer-dryer set; again, the washer is a front-loader. www.haieramerica.com/- laundry.php (last visited May 10, 2006). Similarly, the homepage of LG Electronics U.S. features two pictures each of four different appliance types (Mobile Phones; TV Audio Video; Home Appliances; and Computer Products); both Home Appliances pictures show a front-loading clothes washer. http://us.Ige.com/index.jhtml (last visited May 10, 2006). On LG U.S.'s "Home Appliance" page, the picture in the "Laundry" category is a front-loader. http://us.lge.com/products/category/listhome%- 20appliances.jhtml (last visited May 10, 2006). The "Washers" page shows only front-loaders. http:us.leg.com/products/category/list/home%20appliances_- laundry_washers jhtml (last visited May 10, 2006).



### 17 

### 0000049Conclusion

The California Petition, and the many comments submitted in support thereof by California water districts, utilities, and businesses, amply demonstrate that the State's RCW standards will serve "unusual and compelling" economic, environmental, and water and energy security interests. Moreover, they will serve those interests at a lower cost and with greater reliability than any available alternative that is not already being implemented. Finally, the standards will neither significantly burden the appliance industry nor result in the unavailability of any substantial clothes washer attributes or performance characteristics. DOE should grant to the RCW standards an exemption from preemption.



### 8 %t' 1 6STATE OF CALIFORNIA-THE RESOURCES AGENCY CALIFORNIA ENERGY COMMISSION 1616 NINTH STREET SACRAMENTO

. CA 95814-5512


### March 27, 2006
By U.S. Mail:
Ms. Brenda Edwards-Jones United States Department of Energy Building Technologies Program Mailstop EE-2J, Room IJ-018 1000 Independence Avenue, SW Washington, D.C. 20585-0121 By e-mail : California .petition@ ee.doe.gov ARNOLD SCHWARZENEGGER, Governor

Co m ment on: United States Department of Energy Docket Number EE- -PET-100:

Petition to Exempt from Preemption California ' s Water Conservation Standards for Residential Clothes Washers: Dear Ms. Edwards- Jones, 42 U.S.C. section 6297(d)(2) states that DOE must provide an opportunity for "written comments, including rebuttal comments," on petitions for waivers from preemption. Therefore, the California Energy Commission (1) believes that DOE is obligated to provide an opportunity for rebuttal comments after the close of the initial comment period in this proceeding, and (2) requests that DOE clarify its intentions in this regard as soon as possible. Thank you for your assistance. Sincerely,

Jonathan Blees Assistant Chief Counsel cc: (see next page)



### 0060051Douglas L. Faulkner

Acting Assistant Secretary Energy Efficiency and Renewable Energy United States Department of Energy Section 327 Petitions, Appliance Efficiency Standards Forrestal Building 1000 Independence Avenue, SW Washington, D.C. 20585-0121 Mr. Bryan Berringer United States Department of Energy Office of Energy Efficiency and Renewable Energy Building Technologies Program, EE-2J 1000 Independence Avenue, SW Washington, D.C. 20585-0121
Mr. Thomas DePriest United States Department of Energy Office of General Counsel, GC-72 1000 Independence Avenue, SW Washington, D.C. 20585-0121 Bryan.Berringer@ee.doe.gov Thomas.DePriest@hq.doe.gov 

### Charles A. Samuels General Counsel, Association of Home Appliance Manufacturers Mintz, Levin, Cohn, Ferris , Lovsky, and Popeo, PC Suite 900 701 Pennsylvania Avenue Washington , DC 20004
CEC: Valerie Hall Melinda Merritt G. William Pennington William Staack



## 0 6GOOS2STATE OF CALIFORNIA

- THE RESOURCES AGENCY CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET SACRAMENTO

. CA 95814-5512
December 5, 2005

Douglas L. Faulkner Acting Assistant Secretary Energy Efficiency and Renewable Energy United States Department of Energy Section 327 Petitions , Appliance Efficiency Standards Forrestal Building 1000 Independence Avenue, SW Washington, D.C. 20585 ARNOLD SCHWARZENEGGER , Governor

Petition to Exempt from Preemption California ' s Water Conservation Standards for Residential Clothes Washers: Your Letter of November 18, 2005
Dear Mr

. Faulkner, On September 16, 2005, DOE received the California Energy Commission's (CEC) petition for exemption from federal preemption of California ' s water conservation standards for residential clothes washers

. As you are aware, DOE's regulations state:

(1) Within fifteen ( 15) days of the receipt of a petition, the Secretary will either accept it for filing or reject it , and the petitioner will be so notified in writing

. The Secretary will serve a copy of this notification on each other party served by the petitioner

. Only such petitions which conform to the requirements of [DOE ' s regulations] and which contain sufficient information for the purposes of a substantive decision will be accepted for filing. Petitions which do not so conform will be rejected and an explanation provided to petitioner in writing. (2) For purposes of [federal statutory law and DOE's regulations ], a petition is deemed to be filed on the date it is accepted for filing. 10 C.F.R. § 430.42(f).



### 1 0000053Despite the 15-day deadline, the CEC received no notification in writing

until November 18, when you sent me a letter concerning the petition. (For reasons unknown to me, the letter was not received in my office until November 28.) In your November 18 letter, you stated: DOE has reviewed the petition, and determined that the regulatory requirements have not been met. The statement required by 10 C.F.R. 430.42(c), on whether "[to the best knowledge of that petitioner] the same or related issue , act or transaction has been or presently is being considered or investigated by any State agency, department, or instrumentality," was not included in the petition. Please supply DOE with information in writing sufficient to satisfy this filing requirement and DOE will complete its review of your petition and provide you with the notice required under 10 C.F.R. 430.42(f). The CEC hereby states that to its best knowledge, the same or related issue, act, or transaction has not been and is not presently being considered or investigated by any State agency, department, or instrumentality, other than the CEC's adoption of the standards described in the petition, and the filing of the petition itself. In providing "an explanation ... in writing" of the nonconformity of the CEC's petition to regulatory and information requirements (10 C.F.R. § 430.42(f)(1)), your November 18 letter listed no "regulatory requirements" that were not met, other than the lack of the statement required by 10 C.F.R. section 430.42(c). Nor did your letter describe any lack of "sufficient information for the purposes of a substantive decision" (10 C.F.R. § 430.42(f)(1)). Therefore, with the provision of the section 430.42(c) statement above, all requirements for a petition have been met, and the CEC anticipates DOE's very rapid acceptance of the petition for filing and docketing, pursuant to 10 C.F.R. section 430.42(f)-(g). 

### Thank you for your assistance. Sincerely, 4AVJ NO-L--- Jonathan Blees Assistant Chief Counsel cc: see next page

2 

## uuvO O S 4

### cc: CEC:

Valerie Hall G. William Pennington William Staack 

### Charles A. Samuels General Counsel, Association of Home Appliance Manufacturers Mintz, Levin, Cohn, Ferris, Lovsky, and Popeo, PC 

### Suite 900 701 Pennsylvania Avenue Washington, DC 20004



### 3 0000055STATE OF CALIFORNIA - THE RESOURCES AGENCY ARNOLD SCHWARZENEGGER, Governor CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET SACRAMENTO

. CA 95614-5512 

### September 13, 2005

Douglas Faulkner Acting Assistant Secretary for Energy Efficiency and Renewable Energy United States Department of Energy Section 327 Petitions, Appliance Efficiency Standards Forrestal Building 1000 Independence Avenue, SW Washington, D.C. 20585

Petition to Exempt from Preemption California ' s Water Conservation Standards for Residential Clothes Washers Dear Mr. Faulkner, Pursuant to 42 U.S.C. section 6297(d) and 10 C.F.R. Part 430, Subpart D, the California Energy Commission submits the enclosed petition for exemption from federal preemption of California's water conservation standards for residential clothes washers. An original and four copies of the Petition areenclosed, along with one copy of California's water plan. Please return one filestamped copy of the Petition in the enclosed stamped, self-addressed envelope. Thank you for your assistance.

Sincerely,
/s/ Jonathan Blees Assistant Chief Counsel

cc: Charles A. Samuels General Counsel, Association of Home Appliance Manufacturers Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, PC 

### Suite 900 701 Pennsylvania Avenue Washington, DC 20004 

### 0000056

### UNIT ED STATES DEPARTMENT OF ENERGY

PETITION TO EXEM PT F ROM PREE MPTION CALIFNIA' WATER EFFICIENCY STAN DA FOR RE SID ENTIAL CLOT H ES WASHERS

C



### Califo rni a Energy C o mmissio n

September 2005



### 0040057

### Table of Contents Page 1. Introduction and Summary ................................................................................... 1 II. Material Required by 10 C.F.R. Sections 43 0.41 (a)(1)(i)-(iv) ............................ 2 III. California's "Unusual and Compelling" Water and Energy Interests .....:........... 4 A. California 's Water Interests ....................................................................... 5
1. Water Use ........................................................................................ 5 2. Water Supplies ..... .......................................................................... 11 3. Water Costs ....................................................................................13 4. The High Energy Intensity and Energy Costs of California's Water Supplies ..... .......................................................................... 14 B. California' s Water and Energy Policies : Efficiency Is Crucial .............. 15 C. The Water, Energy, Environmental, and Economic Benefits of the California Standards ................................................................................. 19 

### Alternatives to the Standards ................................................................... 26 1. Rebates ...................... ..................................................................... 27 2. Other Non-Regulatory Programs ................................................... 32 3. "Reasonably predictable market-induced improvements in efficiency " ................................................................................. 34 IV. Potential Burdens on Industry ............................................................................ 37 A. Manufacturing and Distribution Costs ..................................................... 38 B. Effects on Smaller Manufacturers , Distributors , and Dealers, and on Sales Competition in California .......................................................... 40


### 0 0 0 0 058

### C. Reductions in Available Models, or Sales , in the U.S. and

in California ............................................................................................. 41 D. Proliferation of State Standards ............................................................... 41 V. Potential Effects on Consumer Utility ............................................................... 42 A. Performance Characteristics .................................................................... 42 B. Consumer Features .................................................................................. 43 C. Sizes, Capacities , and Volumes ........... .................................................... 48 VI. Conclusion .......................................................................................................... 49

11 

## 00000 59

### List of Tables
Page

Table 1: California Water Budget with Existing Facilities



### and Programs (maf) .................................................................................... 8 Table 2: California Water Budget with Options Likely To Be

Implemented (maf) ..................................................................................... 8 Table 3: Savings for the Individual California Consumer:

6.0 WF Standards (Effective 2010) ......................................................... 21 Table 4: Statewide Savings: 6.0 WF Standards (Effective 2010) ......................... 22 Table 5: Savings for the Individual California Consumer:

8.5 WF Standards (Effective 2007) ......................................................... 23 Table 6: Statewide Savings: 8.5 WF Standards (Effective 2010) ......................... 24 Table 7: Costs of Rebate Programs for Consumers and Utilities .......................... 31 Table 8: Savings from Other Non-Regulatory Programs ...................................... 33 Table 9: Washer Attributes Listed as Important in DOE's

Consumer Analysis .................................................................................. 45



### iii OOO OOGO

### List of Figures Page

Figure 1: Population Growth in the Fastest

-Growing States ........ ............................. 7 Figure 2: Energy Star Washer Market Share: U.S. and California ........................ 28 Figure 3: Correlation Between MEF and WF ..

....................................................... 35 Figure 4: Projected U.S. (Unregulated) Water Efficiency Versus

Water Efficiency Under the California Standards ................................... 36 Figure 5: Correlation Between WF and Price ......................................................... 39 Figure 6 : Energy Star List as of 2/16/05 : MEF versus WF by Brand .................... 43



### iv 0000061

### I. Introduction and S ummary

The California State Energy Resources Conservation and Development Commission ("Energy Commission," "Commission," or "CEC") petitions the Secretary of the United States Department of Energy ("DOE") for a rule exempting from preemption California's water efficiency regulations for residential clothes washers ("the standards"). This Petition is submitted pursuant to 42 U.S.C. section 6297(d) and 10 C.F.R. Part 430, Subpart D. California has a persistent water crisis

. Water demand grows inexorably, as California ' s population is expected to increase by nearly 50 percent in the next three decades. At the same time , water supplies are dwindling : every major water supply source for the state

- from the Klamath and Trinity Rivers in the north, to the Sacramento

- San Joaquin Rivers and Delta in the Central Valley, to the Mono Lake and Owens River system in the Eastern Sierra, to the Colorado River, with its fiveyear record

-breaking drought , in the South

- are over-appropriated

. And the state's groundwater basins are severely overdrafted

. In every case, the state is currently developing ways to extract less from these systems to comply with legal requirements

. To make matters worse, most of the State ' s population lives long distances from major water supplies , which results in costs for water pumping and treatment that are double the rest of the country's. Thus there is a compelling need for cost-effective water conservation in California. In an effort to improve efficiency (of both water and energy use), reduce demand, stretch supplies, minimize costs, and ameliorate environmental impacts, state and local water agencies have for decades actively pursued water efficiency for residential, commercial, industrial, and agricultural customers. Indeed, conservation and efficiency are the cornerstones of California's water policy. Yet funds are limited, and most of the "low-hanging fruit" opportunities for savings have been achieved. As a key element in the state's efforts to promote water efficiency, the California Legislature has required the Commission to establish water efficiency standards for residential clothes washers. In so doing the Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the



### 1 00®0062

### state's limited water supply, and will conserve energy."1 The Commission has

responded by adopting the standards that are at issue in this Petition. The standards are in two tiers: Tier 1 is scheduled to go into effect in 2007, and Tier 2 in 2010. The Tier 2 standards will save each washing machine purchaser more than $100 in water and energy costs over the life of the appliance. For the entire State, once the Tier 2 standards are fully implemented, every year they will save almost as much water as is consumed annually in the City of San Diego (the second largest city in California and the seventh largest city in the country2). Thus, as this Petition demonstrates, the standards meet the criteria for an exemption (or "waiver") from preemption that are established in 42 U.S.C. section 6297(d)(1)(B)-(C): the state has "unusual and compelling" interests in seeing the standards take effect. In addition, although States do not need to address the matters set forth in 42 U.S.C. sections 6297(d)(3) and (4), on potential impacts to industry and consumers (because the burden of proof on those matters is on potential opponents of a waiver), the Petition presents a summary of those matters: the standards' great benefits will be achieved without any significant impacts on the clothes washer industry or on the consumer-usefulness of the appliances.
II. Material Required by 10 C .F.R. Sections 430.41(a)(1)(i)-(iv) (i) The name, address, and telephone number of the petitioner are: California Energy Commission attn: Jonathan Blees, Assistant Chief Counsel 1516 Ninth Street, Mail Station. 14 Sacramento, California 95814-5512

916-654-3953 

### JBIees@energy.state.ca.us (ii) The regulations for which an exemption from preemption is sought are contained in California Code of Regulations , title 20, section 1605.2(p)(1), and they read as follows:

' California Assembly Bill 1561 (Kelley), Chapter 421, Statutes of 2002, enacting California Public Resources Code section 25402(e)(1).
2 www. census . gov/statab/ccdb/citl02Or.txt. 

### 00 00OG3 2

### (1) Water Efficiency Standards for Residential Clothes Washers. The water factor of clothes washers that are consumer products shall be no greater than the applicable values shown in Table P-3.
Table P-3 Water Efficiency Standards for Clothes Washers
M axi m um Water Factor Appliance (Gallons /cubic foot) Effective January 1, 2007 Effective

January 1, 2010 Top-loading clothes washers 8.5 6.0 Front-loading clothes washers 8.5 6.0

Because top-loading and front-loading washers are quite similar, this Petitiongenerally treats the 2007 standards as a single standard (i.e., top-loading and frontloading together), and also treats the 2010 standards as a single standard.
(iii) A copy of the State's water plan is being filed simultaneously with this Petition.3

3 California's Department of Water Resources ("DWR") is responsible for adopting the State's Water Plan. (See California Water Code section 10004.) The statute refers to "Bulletins" Nos. 1, 2, 3 and "amendments, supplements , and additions " thereto . (California Water Code section 10004(a).) "In 1957, [DWR] published Bulletin 3, the California Water Plan. Bulletin 3 was followed by the Bulletin 160 series, published six times between 1966 and 1993, updating the California Water Plan. A 1991 amendment to the California Water Code [ in section 10004(b)(1)] directed [DWR] to update the plan every five years. Bulletin 160-98 [adopted in 1998] is the latest in the series." (DWR, The California Water Plan Update: Bulletin 160-98 ("1998 California Water Plan"), Executive Summary, p. ES1-1. There has not been an update since then. Pursuant to California Water Code section 10004(b)(3), DWR published its "preliminary draft" of the 2005 water plan update in April 2005. (DWR, California Water Plan Update Bulletin 160-05: Public 

### 3 -00 4k.

### (iv) The types or classes of covered product for which an exemption from

preemption is sought are: all types and classes of clothes washers that are covered products, including but not necessarily limited to - Compact and Standard; Top-Loading and Front-Loading; Automatic and Semi-Automatic; and Suds-Saving and Non-Suds-Saving. This Petition uses the term "residential clothes washers" or "RCW" to refer to all clothes washers that are "covered products" under the National Appliance Energy Conservation Act of 1987.

III. California ' s "Unusual and Compelling " Water and Energy Interests In order to obtain a waiver of preemption for an appliance efficiency regulation that is applicable to a federally-covered appliance, the state must establish that the standard "is needed to meet unusual and compelling State or local energy or water interests."4 Such interests are those that:

(i) are substantially different in nature or magnitude than those prevailing in the United States generally; and (ii) are such that the costs, benefits, burdens, and reliability of energy or water savings resulting from the State regulation make such regulation preferable or necessary when measured against the costs, benefits, burdens, and reliability of alternative approaches to energy or water savings or production, including reliance on reasonably

Review Draft (April 2005) ("2005 Draft California Water Plan"). The 2005 Draft California Water Plan constitutes DWR's formal proposals for adoption as the final 2005 California Water Plan. This Petition cites analyses from both the 1998 California Water Plan and the 2005 Draft California Water Plan, and a copy of each-is being filed with this Petition. Although the 2005 Draft Plan contains important revisions and updates to the material in the 1998 Plan, the fundamental message is the same: all reasonable forecasts show that California needs more water than the available and foreseeable supplies can provide, and conservation of water and efficient water use are vital parts of California's water policy.
4 42 U.S. C. section 6297(d)(1)($).



### 4 0®0006 i

### predictable market-induced improvements in efficiency of all products

subject to the State regulation.5 This part of the Petition demonstrates that all of these requirements are met. California's water interests (and associated energy interests) are different in both nature and magnitude than those prevailing in the United States generally, and are such that the clothes washer standards are distinctly preferable to alternative approaches to water savings and production.

A. California's Water Interests The confluence of a number of factors in California, including the largest state population in the country, rapid growth, dwindling water supplies, and the relatively long distances between supplies and population centers, creates a compelling need for highly efficacious and cost-effective water conservation strategies. All feasible and economic strategies must be pursued by the State to address its needs. In an effort to control water rates, delay capital-intensive investments in expanded infrastructure, minimize environmental impacts, and manage low water supplies during droughts, water agencies at the. local and state level have been actively pursing water efficiency in both urban and agricultural contexts for several decades. Water agencies have already been devoting millions of dollars each year to promotion of water-efficient clothes washers and along with energy utilities have helped to "condition" the market for high efficiency washers. Yet funds are limited, and additional strategies are needed.

1. Water Use . California is the largest state in the nation, and it will continue to grow rapidly. It is the fifth largest economy in the world.6 Not surprisingly, California's total water (fresh and saline) withdrawals exceed all other states at 51 billion gallons per year, despite a comparatively modest per capita water use of 1,500 gallons per day (for al l uses , including urban, agricultural, and industrial, and including saline withdrawals). The next highest state is Texas with 29.6 billion gallons per year (42 percent lower);

5 42 U.S.C. section 6297(d)(1)(C)(i)-(ii). 6 www.lao.ca.gov/2002/cal_facts/economy_demographics.pdf.



### 5 OOOO OG G

### the average state withdrawal is 8.1 billion gallons per year - less than one-sixth of

California's use.? California uses 13 percent of the nation's water supply.8 And the State's water use will continue to grow. With a current population of 36 million, California is expected to be home to more than 49 million people by 2025.9 The number of new people who will join the ranks of California's population each year - approximately 600,000 - is more than the entire population of Wyoming. Texas, the state with the second highest expected population growth during that time, is expected to add less than half of California's increased population; overall, the median growth rate for all states is expected to be approximately 20 percent through 2025, well under California's projected growth rate.10 By 2030, California's urban water demand alone could increase by almost 6 million acre feet per year' 1, compared to total usage of 43 million acre-feet per year in 2000,12 according to a resource-intensive water scenario evaluated by the State's Department of Water Resources.13 In addition, the State will need an additional 1 million to 2 million acre-feet per year of water by 2030 just to replace groundwater overdrafts.14

7 "Estimated Use of Water in the United States in 2000-Table 2," U.S. Geological Survey Circular 1268 (released March 2004, revised April 2004, May 2004, February 2005). s Ibid. 9 U.S. Census Bureau, Population Division , Population Projections Branch : States , 1995 - 2025, by Paul Campbell, P25-1131, issued May 1997, p. 1 (www.census . gov/population/www/projections/stproj.htinl). 10 U.S. Bureau of the Census, Population Division, PPL-47. 11 2005 Draft California Water Plan, Vol. 1, ch. 4, Fig. 4-3. 12 "Estimated Use of Water In the United States in 2000," U.S. Geological Survey Circular 1268," (released March 2004, revised April 2004, May 2004, February 2005. An acre-foot of water -- 325,900 gallons - supplies one to three average families per year. 13 2005 Draft California Water Plan, Vol. 1, ch. 4, p. 4-41 14 Id. at p. 4-14.


### 6 000006"7

### Figure 1: Population Growth in the Fastest-Growing States

States with the largest projected net increase in population : 1995 to 2025

2 f'e1, { ri d `' f K; fif zi:; ® CA TX FL GA WA AZ NC VA NY NJ IL CO TN MD OR Source : U.S. Bureau of the Census, Population Division , PPL-47



### Of particular importance to California is its agricultural economy. Despite its dry summer climate, the State generated over $30 billion in total agricultural receipts in 2001, one-eighth of the total nationwide receipts and more than the combined receipts from Texas and Iowa, which are the second and third largest agricultural producers in the U.S. The State produces half the nation's fruits, nuts, and vegetables.15 California has the largest proportion of irrigated land to total farmed acreage (32 percent), as well as the highest amount of irrigated farm land of any state in the country - 8.7 million acres, which is 16 percent of the nation's.' 6 The . continued reliability of the California water supply is key to both the California economy and to feeding the nation. The 1998 California Water Plan contains the following forecasts of water demand and supplies, one with then-existing supplies and conservation actions, and another with additional supplies and conservation actions considered likely to be implemented): 17

15 USDA, National Agricultural Statistics Service (http://151.121.3.33:8080/Census/index.html). 16 Ibid. 17 1998 California Water Plan, Executive Summary, pp. ES5-2, ES5-1

7 

### 00 000 

### 6 8Table 1

California Water Budget with Existing Facilities and Programs (maf)1181

Average 1995 2020 Drought Average Drought Water Use Urban 8.8 9.0 12.0 12.4 Agricultural 33.8 34.5 31.5 32.3 Environmental 36.9 21.2 37.0 21.3 Total 79.5 64.7 80.5 66.0 Supplies Surface Water 65.1 43.5 65.0 43.4 Groundwater 12.5 15.8 12.7 16.0 Recycled and Desalted 0.3 0.3 0.4 0.4 Total 77.9 59.6 78.1 59.8 Shortage 1.6 5.1 2.4 6.2

Table 2 California Water Budget with O ptions Likely To Be Implemented (mat)

1995 2020 Average Drought Average Drought Water Use Urban 8.8 9.0 11.8 12.1 Agricultural 33.8 34.5 31.3 32.1 Environmental 36.9 21.2 37.0 21.3 Total 79.5 64.7 80.1 65.5 Supplies Surface Water 65.1 43.5 66.4 45.4 Groundwater 12.5 15.8 12.7 16.5 Recycled and Desalted 0.3 0.3 0.8 0.9 Total 77.9 59.6 79.9 62.8 Shorta ge 1.6 5 .1 0.2

18 "Maf' = million acre-feet = 325,900,000,000 gallons.

8 0 

### 00 00 

### OG9

### For purposes of this Petition, urban water use is the most important, because it is that

use that would be reduced by the California standards. The 2005 State Water Plan is a strategic planning document produced in a collaborative process in which the State's Department of Water Resources worked with a 65-member Advisory Committee, a 350-member extended review forum, and over 2,000 interested members of the public. It contains state and regional water portfolios that cover the entire hydrologic cycle and that consist of more than 80 categories of water use, supply, and management (as opposed to about 35 categories in previous water plans). Central to the 2005 Draft are three possible future water scenarios for the State, titled "Current Trends," "Less Resource Intensive, and "More Resource Intensive." All three scenarios describe potential water demands in 2030 "without additional demand management beyond current policies" (i.e., without the RCW standards).19 Although the three scenarios were developed in acknowledgment of the inherent uncertainties facing California in the next 25 years, all three agree on one fact of crucial significance for this Petition: annual urban water use will increase significantly in the next 25 years: by approximately 3,000,000 acre-feet in the "Current Trends" Scenario, approximately 1,800,000 acre-feet in the "Less Resource Intensive Scenario," and almost 6,000,000 acre-feet in the "More Resource Intensive" scenario.20 (These estimates are quite consistent with the forecasts in the 1998 California Water Plan, which shows annual increases in urban water use of 3.2 and 3.4 million acre-feet under normal and drought conditions in a scenario that could be characterized as business as usual, and 3.0 and 3.1 million acre-feet in a scenario in which reasonable additional supply and conservation options were achieved. (See Tables 1 and 2, at page 8 above.) Moreover, in all three scenarios, an additional 1 to 2 million acre-feet per year are needed to eliminate statewide groundwater overdraft.23 Moreover, regardless of which scenario turns out to be most accurate, additional conservation and efficiency measures are necessary. This is particularly important
19 2005 Draft California Water Plan, vol. 1, ch. 4, p. 4-16. 20 2005 Draft California Water Plan, vol. 1, ch. 4, p. 4-41. 21 Ibid .; see also id., Vol. 4-Reference Guide, Data and Analytical Tools, Quantified Scenarios of 2030 Water Demand (by David Groves, Pardee RAND Graduate School and Scott Matyac and Tom Hawkins, DWR).

9 0 0000 70

### because water supplies are often not fungible: it can be very difficult, for example,

to transfer savings in the agricultural sector to the urban sector. As the 2005 Draft Plan states: [A]vailable supplies in one part of the state cannot necessarily be used to meet rising demands in other parts. .... Moreover, the challenges of flood management, protecting water quality, and managing water systems to help restore the environment will all require California's water managers to develop strong water plans to go well beyond just meeting water demand increases in average years. [¶] If realized, the greater urban water demand predicted under all three plausible scenarios would present significant challenges to water planners. ... . Although there may be commensurate reductions in the agriculture sector, much of this demand reduction would occur in the Central Valley; whereas, much of the additional urban demand would be in the southern part of the state. The ability to transfer water from the Central Valley to Southern California could be constrained by existing conveyance facilities, area-of-origin issues, environmental impacts, and other third-party effects. This fact underscores the need for strong integrated regional water management plans supported by strong statewide water management systems.22 In sum, as the 1998 Water Plan states, "[t]he magnitude of potential shortages, especially drought year shortages, demonstrates the urgency of taking action."23 And what is the most important action that the State needs to take? The answer is clear: improved water efficiency. The 2005 Draft Water Plan shows that increased urban water use efficiency has the greatest potential of all eight major water resource management strategies available to California (see pp. 15-16 below).24

//

22 2005 Draft California Water Plan, vol. 1, ch. 4, pp. 4-15 - 4-16. 23 1998 California Water Plan, Executive Summary, p. ES5-13. 24 2005 Draft California Water Plan, vol. 1, ch. 1, p. 1-15.



### 10 0 000071

### 2. Water Supplies

California's water supply situation is unique in scope and scale compared to other states or even the world. Throughout California's development, extraordinarily large investments in water system infrastructure, supported by local, regional, state, and federal consumers and taxpayers, have produced an unprecedented array of reservoirs, levees, aqueducts, pumping stations and related transportation facilities. No other state compares. Tens of billions of dollars have been expended on this massive water network.25 Yet even this extraordinary expenditure is not enough: "Although these state, federal, and local projects now serve as the backbone of California water management, they cannot provide for our growing population, changing agricultural production patterns, and environmental needs."26 Potential new supplies will provide little additional water and are expensive, and even existing supplies are "drying up." Five years of record-breaking drought along the Colorado River, hardly dented by this year's wet winter, have resulted in flows among the lowest in the past 500 years and have drained Lake Powell of more than 60 percent of its water. Lake Mead, the biggest reservoir in North America and supplier of water.to Southern California, Arizona, and Las Vegas, is little more than half full. At Lake Mead's northern end, the foundations of St. Thomas, a little town demolished in the 1930s to make way for the reservoir, have reemerged. The 1,450- mile-long river that greens 3.5 million acres of farm and range land and helps feed the faucets of 25 million people may within a few years lack the water to quench the West's great thirst. Thus for the first time ever, the seven states that rely on the Colorado, especially California, are confronting the possibility of a serious shortage. Even if the Colorado River returns to its full flows, California is legally required to reduce the amount it takes from the River from 5.5 million acre feet per year to 4.4 million acre feet by the year 2015, under the terms of the Colorado River Agreement.27 This amount represents a 20 percent reduction in supply-roughly half of the surface water demand for Southern California.28 Moreover, the

25 Oral Interview, October 18, 2004, with Steve Macaulay, Retired Chief Deputy Director, Department of Water Resources. 26 2005 Draft California Water Plan, vol. 1, ch. 1, p. I-10. 27 Colorado River Water Delivery Agreement: Federal Quantification Settlement Agreement, October 20, 2003.
28 Ibid.


### 11 0000072

### protracted drought on the Colorado River basin will, if it continues, reduce future

deliveries even below that level. Similarly, for more than a decade California's State Water Project has delivered only half its contract volumes, and it is now able to deliver, on average, only 75 percent of the amount for which it is contractually obligated.29 Even this could well be an optimistic future scenario, given the severe environmental decline of the Bay-Delta area and the restrictions on pumping that have resulted from that decline. Indeed, supplies are constrained all over the state. All of the state's major river systems, such as the Klamath and the Trinity, the Sacramento and the San Joaquin, and the Owens, are over-appropriated, and groundwater basins face severe overdrafts. As a result, the state is currently developing ways to extract less from all of these systems. Moreover, California's water supplies face increased environmental challenges. Intrusion of salt water into coastal aquifers (due to over-pumping of the aquifers), increasing levels of pollution in the water table, and salinity in inland groundwater supplies due to irrigation, will all lead to increased treatment costs in the future. Any potential new water-storage sites that are part of the California Water Plan are relatively small storage projects. Thus water efficiency, recycling, and desalination are the key to averting a water crisis in California. Since recycling and desalination are expensive and energy intensive, water use efficiency emerges as the strongest economic and environmental option. Groundwater supplies are also a challenge. Some aquifers are currently being pumped at rates well in excess of recharge capability, which has led to land subsidence in some areas and intrusion of seawater along some coastal aquifers.30 And recent forecasts from the National Academy of Science show the impacts of global warming putting great pressure in the existing water system infrastructure

29 "The State Water Project Reliability Report," California Department of Water Resources, 2002, p. 13 (http://swpdelivery.water.ca.gov/SWP%20Delivery%20Reliability.final.2002.pdf). 30 See, e.g., 1998 California Water Plan, pp. 3-51 - 3-53, 3-62; USGS, Geohydrological Framework of Recharge and Seawater Intrusion in the Pajaro Valley, Santa Cruz and Monterey Counties, California (2003), pp. 53, 58, 59.

12 

### 000 0 

### 0 73

### over the next decades, with a potentially decreasing Sierra snowpack perhaps

expanding the forecasted shortfall."

3. Water Costs California's water rates substantially exceed the national average. This is not surprising, in light of the State's vast water transportation infrastructure and the high energy costs associated with pumping and treatment (see pages 14-15 below). DOE assessed national water and wastewater prices as part of its recent residential clothes washer rulemaking. Using 1998 survey data, DOE calculated that the average national water and wastewater rate was $2.48 per thousand gallons (in 1997 dollars, which is the equivalent of $2.88 in 2002 dollars).32 Based on a review of "California Water Charge Survey: 2001" and "California Wastewater Charge Survey: 2002" by Black and Veatch, both of which report rates for most service areas across the State, California's Pacific Gas and Electric Company (the largest combined electricity and natural gas utility in the country) recently concluded that the current California average water rate is approximately $3.15 (in 2002 dollars).33 Therefore, water saved in California is worth even more ($3.15 per thousand

31Wilkinson, Robert C., The Potential Consequences of Climate Variability and Change for California, The California Regional Assessment, Report of the California Regional Assessment Group for the U.S. Global Change Research Program, National Center for Geographic Information Analysis, and the National Center for Ecological Analysis and Synthesis, University of California, Santa Barbara (sponsored by the National Science Foundation) (2002); "Emissions pathways, climate change, and impacts on California," APPLIED PHYSICAL SCIENCES / ECOLOGY, Journal of the National Academy of the Sciences. Hayhoe, K. et. al. Published online before print August 16,2004, 10.1073/pnas.0404500101 PNAS I August 24, 2004 1 vol. 1011 no. 34 112422- 12427 OPEN ACCESS ARTICLE, http://www.pnas.org/cgi/gca?allch=&SEARCHID=1117829324567 6211 &FULLTEXT=Emissio ns+pathways%2C+climate+change%2C+and+impacts+on+California&JOURNALCODE=&FIRS TINDEX=O&hits=10&RESULTFORMAT=&gca=pnas%3B 101 %2F34%2F 12422&allchb=. 32 "Final Rule Technical Support Document (TSD): Energy Efficiency Standards for Consumer Products: Clothes Washers," U.S. Department of Energy, December 2000: Appendix F, p. F-10 (www.eere.energy.gov/buildings/appliance_standards/residential/elwash 0900 r.html). 33 Pacific Gas and Electric Company, 2003, "Codes and Standards Enhancement Initiative for PY2003: Title 20 Standards Development Draft Analysis of Standards options for Residential Clothes Washers" (CEC Docket No. 03-AAER-01 (RCW)). 

### 0000074 13

### gallons ) than water saved in the United States generally ($2.88 per thousand

gallons). Moreover, the gap between the water rates in California and in the rest of the country is likely to increase. In many areas of the State, surface water and groundwater are being impaired by natural and human-made contaminants that increase treatment costs and reduce the available supplies (thereby further exacerbating costs).34 The American Water Works Association "Mainstream" newsletter reports that, while not alone with the problem, California is where "the highest concentrations of MTBE are reported ...."35 One water utility severely impacted by MTBE-contaminated wells predicted customer rate increases of 50percent as mitigation measures were taken.36 Given the State's 600,000-person-peryear population growth, increasing health and environmental regulations, increasing costs for ground water and surface water pollution mitigation, expensive new supplies, and the aging water distribution infrastructure, water rate increases well in excess of inflation can be expected. All these factors suggest a future widening of the gap between California and national water rates.

4e The Hi gh Energy Intensity and Energy Costs of California's Water Supplies 

### California's water supplies have one of the highest embodied energy costs in the nation. "California's water systems are uniquely energy-intensive, relative to national averages, due to pumping requirements for major conveyance systems which move large volumes of water long distances and over thousands of feet in elevation lift. .. the State Water Project is the largest single user (3.7 billion kWh per year in 1995 for pumping and power plants) of electricity in the state."37 Similarly, while DOE has calculated that the typical rural household water well in

34 2005 Draft California Water Plan, vol. 1, ch. 3, pp. 3-3, 3-5. 35 AWWA MainStream, Vol. 48, No. 2, April 2004, page 3. 36 Ibid. 37 Wilkinson, Robert C., 2000. "Methodology For Analysis of The Energy Intensity of California'sWater Systems, and an Assessment of Multiple Potential Benefits Through Integrated WaterEnergy Efficiency Measures," Exploratory Research Project, Ernest Orlando Lawrence Berkeley Laboratory, California Institute for Energy Efficiency.

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### the U.S. requires 2.61 kWh per 1,000 gallons of delivered water,38 recent California

estimates range from 4.1 kWh39 to 6 kWh40 per 1,000 gallons. The amount of energy required is even higher in heavily-populated Southern California, where half of the water supply comes from hundreds of miles away across mountain ranges; there, average embodied energy is 8.4 kWh per 1,000 gallons.4t Furthermore, embodied energy in marginal water supplies are estimated at 11 kWh per 1,000 gallons.42 Efficient use of water will therefore contribute to a substantial reduction in energy use.

California ' s Water and Energy Policies : Efficiency Is Crucial Water efficiency is the most important tool available to California to meet its water needs. As the California Legislature declared in requiring the Energy Commission to adopt the RCW standards, "[wjater conservation is a proven tool that will make the most effective use of the state's limited water supply, and will conserve energy."43 Indeed, "[ijt is ... the policy of the state and the intent of the Legislature to promote all feasible means of. . . water conservation ....»44

38 "Final Rule Technical Support Document (TSD): Energy Efficiency Standards for Consumer Products: Clothes Washers" U.S. Department of Energy, Washington, DC 20585, December 2000, Appendix F, Water and Wastewater Prices, p. F-7. 39 Pacific Gas and Electric Company, 2003, "Codes and Standards Enhancement Initiative for PY2003: Title 20 Standards Development Draft Analysis of Standards options for Residential Clothes Washers" (CEC Docket No. 03-AAER-01 (RCW)). 40 "Comments of PG&E Regarding Proposed Residential Clothes Washer Water Factor Standards" December 2, 2003, p. 13 (CEC Docket No. 03-AAER-01 (RCW)). 41 Wilkinson, Robert C., 2000. "Methodology For Analysis of The Energy Intensity of California'sWater Systems, and an Assessment of Multiple Potential Benefits Through Integrated WaterEnergy Efficiency Measures," Exploratory Research Project, Ernest Orlando Lawrence Berkeley Laboratory, California Institute for Energy Efficiency. 42 Ibid. These figures have already accounted for hydro generation built into the water delivery system. 43 California Assembly Bill 1561 (Kelley), Chapter 421, Statutes of 2002, enacting California Public Resources Code section 25402( e)(1).
46 California Public Resources Code section 25008.

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### California's water planners are working hard to implement the Legislature's

directive that "all feasible means" of water efficiency be implemented. For example, the 2005 Draft California Water Plan states: To minimize the impacts of water management on California's natural environment and ensure that our state continues to have the water supplies it needs, Californians must use water efficiently to maximum utility from existing supplies. Californians are already leaders in water use efficiency measures . . . . Because competition for California's limited water resources is growing, we must continue these efforts and be innovative in our pursuit of efficiency. Water use efficiency will continue to be a primary way that we meet increased demand. .... [J] As California's population grows ... there is bound to be an effect on California's environment. By wringing every bit of utility from every drop of water, Californians can stretch water supplies and help ensure continued economic, social, and environmental health. .... [}] Water conservation has become a viable long-term supply option because it saves considerable capital and operating costs for utilities and consumers, avoids environmental degradation, and creates multiple benefits.45 The importance of these policies is based on the water opportunities available to California. In the 2005 Draft California Water Plan, urban water use efficiency (including high-efficiency clothes washers) provides more supply than any of the other seven "resource management choices" available to help meet water needs: around 2.4 million acre-feet per year ("mafy"), compared to less than 1.5 mafy from recycling of municipal water, about 1.0 mafy from surface storage, less than 1.0 mafy from agricultural water use efficiency, and about 0.5 mafy from desalination.46 California's water suppliers are acting on the knowledge that efficiency is the first choice. For example: Urban Co nservation MOU. Most urban water suppliers are signatories to the Memorandum of Understanding Regarding Water Conservation in California, 47 2005 Draft California Water Plan, vol. 1, ch. 1, pp. 1-7, 1-15 (emphasis in original).
46 2005 Draft California Water Plan, vol. 1, ch. 1, p. 1-15.



### 16 00000'7'7

### which obligates them to implement fourteen Best Management Practices ("BMPs")

for Water Efficiency .47 The BMPs are identical to the demand management options of the water management plans that virtually all California urban water suppliers must prepare and submit to the State ' s Department of Water Resources.48 The California Urban Water Conservation Council ("CUWCC"), which includes more than 140 water agencies , regularly revises the BMPs in order to meet changing conditions

. One of the BMPs is specifically for High Efficiency Clothes Washers. Combined, the BMPs are estimated to save approximately 770,000 acre

- feet of water annually by the year 2010.49California Bay Delta Authority. The BMPs are also required by California's BayDelta Program Plan, a joint state-federal effort to develop and implement a longterm comprehensive plan that will restore ecological health and improve water management for the Bay-Delta Estuary. Two-thirds of California's population (about 22 million people) drinks water that flows through the Estuary, more than 2.3 million acre-feet annually.50 The Bay-Delta Program Plan is a balanced, comprehensive approach to reduce conflicts over limited water supplies. It has eleven major program elements, one of which is water use efficiency. Urban water suppliers must be "certified" that they are incorporating all of the elements into their supply planning.51 In this context, the California RCW standards are critical. Clothes washers account for about 22 percent of the water use in the typical home.52 And, as we will discuss in more detail at pages 20-26 below, the California RCW standards alone will save 204,387 acre-feet per year when fully implemented -- more than 8 percent of the
47 See 2005 Draft California Water Plan, vol. 2, ch. 2, p. 22-1. 48 See California Water Code sections 10610 - 10657. 49 California Urban Water Conservation Council, Memorandum of Understanding Regarding Water Conservation in California (Dec. 11, 1991; revised March 10, 2004) (www.cuwcc.org/uploads/memorandum/MOU 04 03_10 with Section 4_Amendments.pdf). so "Rivers Run Through It: Facts about the Sacramento-San Joaquin Bay Delta", June 2000, California Bay-Delta Program and U.S. Bureau of Reclamation. 51 CALFED Record of Decision, California Bay-Delta Program, August 28, 2000. 52 AWWA, Residential End Uses of Water ( 1999); see also www.h2ouse.org/tour/laundry.cfm > "clothes washer" > "water use." 

### 000 078 17

### total potential urban water use efficiency savings noted in the 2005 Draft California

Water Plan and more than 25 percent of the savings expected from the Urban Conservation MOU (see previous page). The California RCW standards are also critical for carrying out the State's energy policies, which, like the state's water policies, focus on efficiency first. As the Legislature has stated: It is . . . the policy of the state and the intent of the Legislature to employ a range of measures to reduce wasteful, uneconomical, and unnecessary uses of energy, thereby reducing the rate of growth of energy consumption, prudently conserve energy resources, and assure statewide environmental, public safety, and land use goals. It is further the policy of the state and the intent of the Legislature to promote all feasible means of energy ... conservation ... 53 The state's energy agencies are vigorously carrying out these policies. For example, the Energy Commission is responsible for publishing, every two years, an Integrated Energy Policy Report ("IEPR") that, upon approval by the Governor, becomes the Governor's official statement of energy policy.54 The most recent IEPR emphasizes the critical need for additional energy efficiency in order to meet the state's electricity and natural gas needs, and it specifically recognizes the important connection between energy use and water delivery, treatment, and consumption.55 It states that "California's building and appliance standards are the most cost-effective means of achieving energy efficiency in the state," and notes that by 2013 the cumulative savings from the standards will be 79 billion dollars.56 Similarly , the State ' s Energy Action Plan, jointly adopted by the Energy Commission , the California Public Utilities Commission ("CPUC"), and the California Consumer Power Conservation and Financing Authority in 2003, establishes a "loading order" of energy resources "that will guide decisions made by

53 California Public Resources Code sections 25007 - 25008.
54 California Public Resources Code sections 25302 - 25307. 55 www.energy.ca.gov/reports/100-03-019F.PDF, pp. vii-viii, 2. 56 Id. p. 10.



### 18 000 0079

### the agencies jointly and singly." When new energy resources are needed, the State

should first "optimize all strategies for increasing conservation and energy efficiency to minimize increases in electricity and natural gas demand." Second in the loading order are renewable resources and distributed generation, with "clean, fossil fuel, central-station generation" third.57 The loading order was endorsed by Governor Schwarzenegger in an April 28, 2004 letter to the CPUC.58 In sum, water and energy efficiency are vital tools for meeting the needs of California's citizens and businesses. Thus for over a decade California water agencies have been committed to promoting high-water-efficiency clothes washers. In addition to the ratepayer-funded rebates that have been offered to consumers by energy and water utilities for purchase of high efficiency washing machines, the State itself has funded over 200,000 additional rebates. The very significant financial commitment by the water agencies and the State shows the importance of the clothes washer water savings to California's water supply. But despite those advances, additional efficiencies will be necessary. With California's populationexpected to grow by over 600,000 people per year, implementing all feasible, costeffective water and energy saving strategies such as the RCW standards are essential to maintaining a secure and sufficient water supply in California.

C. The Water, Energy, Environmental , and Eco nomic B enefits of the Califo rnia Standards 

### The following tables show the savings that will result from the California RCW standards, if DOE grants this Petition: gallons of water, kilowatt-hours of electricity, and therms of natural gas, as well as savings on utility bills. For individual consumers, the tables, show savings both annually and cumulatively over the expected 14-year lifetime of a washing machine. For the state as a whole, the tables show annual savings in the first year of the standards, and annual savings once the entire stock of washing machines complies with the standards., All of the economic assumptions and data inputs used in this analysis were vigorously tested in the Commission ' s public rulemaking process that led to the adoption of the standards

. Perhaps the most important driver of the economic analysis is the estimate of the increased first cost of washing machines that would

57 www

. energy. ca.gov/energy_action plan/2003-05-08_ACTION PLAN.doc. 58 www

. energy.ca.gov/reports/CEC-100-2004-006/CEC-100-2004-006CMF.PDF, p. 1.

19 O OOc`

### result from the standards. We estimate the incremental cost of the 8.5 WF standards

to be $66.44; for the 6.0 W' standards, the incremental cost is $130.18. These estimates are consistent with DOE's most recent estimate of $150 in the federal RCW rulemaking: In order to meet the 2007 standard, the Department estimates that the price of a washer will be $670, an increase of $249. This price increase will be offset by an annual savings of about $48. It should be noted that DOE based its estimate of the incremental retail cost for the 2007 standards on manufacturer cost estimates for horizontal-axis machines submitted to the Department in 1997. New cost information derived from vertical axis washers now in the market that meet the 2007 standards indicate that the incremental prices could be substantially less. Based on the Department's analysis, the incremental price of these high-efficiency vertical-axis washers would be approximately $150[assumes a $75 incremental manufacturer cost and a total mark-up of 1.99]. 59



### //

//

59 66 Federal Register 3315 (Jan. 12, 2001).

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