CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT

...................................................................................... 1-1

1.2 SUMMARY OF NATIONAL BENEFITS

......................................................................... 1-1

1.3 OVERVIEW OF STANDARDS FOR RESIDENTIAL CLOTHES DRYERS

AND ROOM AIR CONDITIONERS

................................................................................. 1-6

1.4 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

..................... 1-8

1.5 STRUCTURE OF THE DOCUMENT

............................................................................. 1-11

LIST OF TABLES

Table 1.2.1 Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers for 2014

– 2043 Period

................................................................................... 1-4

Table 1.2.2 Annualized Benefits and Costs of Amended Standards (TSL 4) for Room

Air Conditioners for 2014

– 2043 Period

.................................................................. 1-5

Table 1.4.1 Analyses Under the Process Rule*

....................................................................... 1-10

1-iCHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUMENT

This technical support document (TSD) is a stand-alone report that provides the technical analyses and results supporting the information presented in the direct final rule (DFR) for residential clothes dryers and room air conditioners. This TSD reports on the activities and analyses conducted in support of the DFR.

1.2 SUMMARY OF NATIONAL BENEFITS

DOE’s analyses indicate that the standards for residential clothes dryers and room air conditioners would save a significant amount of energy over 30 years (2014

– 20 43)―an estimated 0.39 quads of cumulative energy for clothes dryers and 0.31 quads of cumulative energy for room air conditioners. The combined total, 0.70 quads, is equivalent to three-fourths of the estimated amount of energy used in 2008 to dry clothes in all U.S. homes. In addition, DOE expects the energy savings from today’s standards to eliminate the need for approximately

0.98 gigawatts (GW) of generating capacity by 2043.

The cumulative national net present value (NPV) of total consumer costs and savings of today’s standards in 2009$ ranges from $ 1.08 billion (at a 7-percent discount rate) to $3.01 billion (at a 3-percent discount rate) for clothes dryers, and from $0.57 billion (at a 7-percent discount rate) to $1.47 billion (at a 3-percent discount rate) for room air conditioners. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for products purchased in 2014

– 2043, discounted to 2011.

In addition, the standards would have significant environmental benefits. The energy savings would result in cumulative greenhouse gas emission reductions of approximately 36.1 million metric tons (Mt) of carbon dioxide (CO2) from 2014 to 2043. During this period, the standards would also result in emissions reductions of approximately 29.3 thousand tons of nitrogen oxides (NOX) and 0.073 ton of mercury (Hg). DOE estimates that the net present monetary value of the CO2 emissions reductions is between $170 and $2,654 million, expressed in 2009$ and discounted to 2011. DOE also estimates that the net present monetary value of the NOX emissions reductions, expresse d in 2009$ and discounted to 2011, is $4.3 to $43.8 million at a 7-percent discount rate, and $8.9 to $91.7 million at a 3-percent discount rate.

The benefits and costs of the standards can also be expressed in terms of annualized

values over the 2014

– 2043 period. The annualized monetary values are the sum of (1) the annualized national economic value, expressed in 2009$, of the benefits from operating the product (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase costs, which is another way of representing consumer NPV), plus (2) the

1-1monetary value of the benefits of emission reductions, including CO 2 emission reductions. a The

value of the CO 2 reductions is otherwise known as the Social Cost of Carbon (SCC), and is calculated using a range of values per metric ton of CO 2 developed by a recent interagency process. The monetary benefits of cumulative emissions reductions are reported in 2009$ so that they can be compared with the other costs and benefits in the same dollar units. The derivation of the SCC values is discussed in chapter 16.

Although adding the value of consumer savings to the values of emission reductions provides a valuable perspective, two issues should be considered. First, the national operating cost savings are domestic U.S. consumer monetary savings that occur as a result of market
transactions, while the value of CO 2 reductions is based on a global value. Second, the assessments of operating cost savings and CO 2 savings are performed with different methods that use quite different time frames for analysis. The national operating cost savings is measured for the lifetime of products shipped in 2014

– 2043. The SCC values, on the other hand, reflect the present value of future climate-related impacts resulting from the emission of one ton of carbon dioxide in each year. These impacts go well beyond 2100.

Table 1.2.1 shows the annualized values for the clothes dryer standards. Using a 7­ percent discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the standards for clothes dryers in today’s rule is $52.3 m illion per year in increased equipment costs, while the annualized benefits are $139.1 million per year in reduced equipment operating costs, $25.0 million in CO2 reductions, and $0.9 m illion in reduced NOX emissions. In this case,

the net benefit amounts to $112.7 m illion per year. Using a 3-percent discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the standards for c lothes dryers in today’s rule is $55.4 million per year in increased equipment costs, while the benefits are $209.1 m illion per year in reduced operating costs, $25.0 million in CO2 reductions, and $1.4 million in reduced
NOX emissions. In this case, the net bene fit amounts to $180.1 million per year.

Table 1.2.2 shows the annualized values for the room air conditioner standards. Using a 7-percent discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the

standards for room air condi tioners in today’s rule is $107.7 million per year in increased equipment costs, while the annualized benefits are $153.7 million per year in reduced equipment operating costs, $19.5 million in CO2 reductions, and $0.999 million in reduced NOX emissions. In this case, the net benefit amounts to $66.4 m illion per year. Using a 3-percent discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the standards for room air conditioners in today’s rule is $111.0 m illion per year in increased e quipment costs, while the benefits are $186.2 million per year in reduced operating costs, $19.5 million in CO2 reductions,

a DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value for the time-series of costs and benefits using a discount rate of either three or seven percent. From the present value, DOE then calculated the fixed annual payment over the analysis time period (2014 through 2043) that yielded the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined is a steady stream of payments.

1-2and $1.20 million in reduced NOX emissions. In this case, the net benefit amounts to $95.9 million per year.

1-3Table 1.2.1 Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers for 2014

– 2043 Period

Discount Rate Primary

Estimate * Low

Estimate* High

Estimate*

Monetized (million 2009$/year )

Benefits

Operating Cost Savings 7% 139.1 120.6 158.3

3% 209.1 177.4 241.3

CO 2 Reduction at $4.9/t ** 5% 6.0 6.0 6.0

CO 2 Reduction at $22.1/t ** 3% 25.0 25.0 25.0

CO 2 Reduction at $36.3/t ** 2.5% 39.8 39.8 39.8

CO 2 Reduction at $67.1/t ** 3% 76.0 76.0 76.0

NO X Reduction at $2,519/ton ** 7% 0.9 0.9 0.9

3% 1.4 1.4 1.4

Total † 7% plus CO 2 range 146.1 to 216.1 127.6 to 197.6 165.3 to 235.3

7% 165.0 146.5 184.3

3% 235.4 203.7 267.6

3% plus CO 2 range 216.5 to 286.5 184.8 to 254.8 248.7 to 318.7

Costs

Incremental Product Costs 7% 52.3 48.8 55.9

3% 55.4 51.2 59.6

Net Benefits

Total † 7% plus CO 2 range 93.7 to 163.7 78.7 to 148.7 109.4 to 179.4

7% 112.7 97.7 128.3

3% 180.1 152.5 208.1

3% plus CO 2 range 161.1 to 231.1 133.6 to 203.6 189.1 to 259.1

* The Primary, Low, and High Estimates utilize for ecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case, and Low Economic Growth case, respectively.

** The CO 2 values represent global values (in 2009$) of the social cost of CO 2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and $36.3per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.1 per ton represents the 95 th

percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NO X (in 2009$) is the average of the low and high values used in DOE’s analysis. † Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is $22.1/ton in 2010 (in 2007$). In t he rows labeled as “7% plus CO 2 range” and “3% plus CO 2
range, ” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values.

1-4Table 1.2.2 Annualized Benefits and Costs of Amended Standards (TSL 4) for Room

Air Conditioners for 2014

– 2043 Period

Discount Rate Primary

Estimate * Low

Estimate* High

Estimate*

Monetized (million 2009$/year )

Benefits

Operating Cost Savings 7% 153.7 145.1 161.9

3% 186.2 174.2 197.3

CO 2 Reduction at $4.9/t ** 5% 5.0 5.0 5.0

CO 2 Reduction at $22.1/t ** 3% 19.5 19.5 19.5

CO 2 Reduction at $36.3/t ** 2.5% 30.7 30.7 30.7

CO 2 Reduction at $67.1/t ** 3% 59.4 59.4 59.4

NO X Reduction at $2,519/ton ** 7% 0.999 0.999 0.999

3% 1.197 1.197 1.197

Total † 7% plus CO 2 range 159.6 to 214.0 151.1 to 205.5 167.9 to 222.3

7% 174.1 165.5 182.4

3% 206.8 194.9 218.0

3% plus CO 2 range 192.3 to 246.7 180.4 to 234.8 203.5 to 257.9

Costs

Incremental Product Costs 7% 107.7 107.7 107.7

3% 111.0 111.0 111.0

Net Benefits

Total † 7% plus CO 2 range 51.9 to 106.3 43.4 to 97.8 60.2 to 114.6

7% 66.4 57.8 74.7

3% 95.9 83.9 107.0

3% plus CO 2 range 81.4 to 135.8 69.4 to 123.8 92.5 to 146.9

* The Primary, Low, and High Estimates utilize for ecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case, and Low Economic Growth case, respectively.

** The CO 2 values represent global values (in 2009$) of the social cost of CO 2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and $36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.1 per ton represents the 95 th

percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NO X (in 2009$) is the average of the low and high values used in DOE’s analysis. † Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is $22.1/ton in 2010 (in 2009$). In t he rows labeled as “7% plus CO 2 range” and “3% plus CO 2
range, ” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values.

1-51.3 OVERVIEW OF STANDARDS FOR RESIDENTIAL CLOTHES DRYERS

AND ROOM AIR CONDITIONERS

The Energy Policy and Conservation Act (EPCA) of 1975, Pub. L. 94-163 (42 United States Code (U.S.C.) 6291

– 6309), established an energy conservation program for major household appliances. The National Energy Conservation Policy Act of 1978 (NECPA), Pub. L.
95-619, amended EPCA to add Part C b of Title III (42 U.S.C. 6311

– 6317), which established an energy conservation program for certain industrial equipment. Additional amendments to EPCA give DOE the authority to regulate the energy efficiency of several products, including residential clothes dryers and room air conditioners

— the products that are the focus of this document. The amendments to EPCA in the National Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 100-12, established energy conservation standards for room air conditioners, as well as requirements for determining whether these standards should be amended. (42 U.S.C. 6295(c) and (g))

DOE published draft data sheets containing energy-savings potentials for all covered products in October 2005 as part of its fiscal year 2006 schedule-setting process. These data sheets summarized the following in table format: (1) the potential energy savings from regulatory action in cumulative quads from 2010 to 2035, (2) the potential economic benefits or burdens, (3) the potential environmental or energy security benefits, (4) the status of required changes to test procedures, (5) other regulatory actions, (6) recommendations by interested parties, (7) evidence of market-driven or voluntary efficiency improvements, (8) regulatory issues, and (9) the 2005 priority. However, DOE had completed the calculations for residential clothes dryers and room air conditioners in previous years. Therefore, the following sections cite the appropriate fiscal year’s priority -setting activities for which DOE completed the energy savings calculations for each product.

NAECA established prescriptive standards for residential clothes dryers, requiring gas clothes dryers not to be equipped with constant burning pilots, and further required that DOE conduct two cycles of rulemakings to determine if more stringent standards are justified. c (42

U.S.C. 6295 (g)(3) and (4)) On May 14, 1991, DOE published a final rule in the Federal
Register (FR) establishing the first set of performance standards for residential clothes dryers; the new standards became effective on May 14, 1994. 56 FR 22250. DOE in itiated a second standards rulemaking for residential clothes dryers by publishing an advance notice of proposed rulemaking (ANOPR) in the Federal Register on November 14, 1994. 59 FR 56423. However, pursuant to the priority-setting process outlined in the July 15, 1996, “ Procedures, Interpretations and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer

b Part C has been redesignated Part A-1 in the United States Code for editorial reasons.

c DOE defines “electric clothes dryer” under EPCA as “a cabinet -like appliance designed to dry fabrics in a tumbletype drum with forced air circulation. The heat source is electricity and the drum and blower(s) are driven by an electric motor(s).” 10 CFR 4 30.2. Gas clothes dryers would have a simila r definition, but the heat source would be

gas.

1-6Products ” d (the “Process Rule”), DOE classified the standards rul emaking for residential clothes dryers as a low priority for its fiscal year 1998 priority-setting process. As a result, DOE suspended the standards rulemaking activities for them.

As reported, DOE’s draft data sheets for the fiscal year 2006 schedule -setting process included an updated analysis suggesting that amended standards for residential clothes dryers would have an energy savings potential ranging from 1.6 to 4.8 quadrillion British thermal units (Btu), or “quads,” for electric clothes dryers and an energy savings potential of 0.06 quads for gas clothes dryers. e DOE based the low- and high-potential energy savings estimates for electric clothes dryers on the use of microwave and heat pump technologies, respectively. DOE is unaware of any commercially available microwave dryers that are currently for sale in any country. There are at least four manufacturers of heat pump dryers in Europe and Japan f , but DOE is unaware of any such models on the market in the United States.

NAECA established performance standards for room air conditioners that became effective on January 1, 1990, and directed DOE to conduct two cycles of rulemakings to determine if more stringent standards are justified. g (42 U.S.C. 6295 (c)(1) and (2)) On March 4, 1994, DOE published in the Federal Register a notice of proposed rulemaking (NOPR) for several products, including room air conditioners. 59 FR 10464. As a result of the Process Rule, DOE suspended activities to finalize standards for room air conditioners. DOE subsequently resumed rulemaking activities related to room air conditioners, and, on September 24, 1997, DOE published a final rule establishing an updated set of performance standards, with an
effective date of October 1, 2000. 62 FR 50122.

As reported in DOE’s draft data sheets for the fiscal year 2006 schedule-setting process, amended standards for room air conditioners would be expected to have an energy savings potential ranging from 0.8 to 1.5 quads. h The low- and high-potential energy savings estimates corresponded to efficiency increases of 10 and 20 percent, respectively.

d 61 FR 36974 (July 15, 1996) (establishing 10 CFR part 430, subpart C, appendix A).

e DOE based these estimates on the 2003 prioritization analysis, with a small adjustment for the 2010

– 2035

timeframe.

f Paul Roggema, “Sustainability in Home Appliances,” Appliance Magazine European Edition , May 2007, p. 5.

Available online at: http://www.appliancemagazine.com/editorial.php?article=1747&zone=208&first=1

.

g DOE defines “room air conditioner” under EPCA as a “consumer product, other than a ‘packaged terminal air conditioner,’ which is powered by a single phase electric current and which is an encased assembly designed as a unit for mounting in a window or through the wall for the purpose of providing delivery of conditioned air to an enclosed space. It includes a prime source of refrigeration and may include a means for ven tilating and heating.” 10

CFR 430.2.

h DOE based these energy savings estimates on an updated analysis of room air conditioners it conducted for its 2005 priority setting. The spreadsheet is available from the DOE Building Technologies Program, Appliances and Commercial Equipment Standards website at: www.eere.energy.gov/buildings/appliance_standar ds/docs/2006_schedule_setting_spreadsheets.zip

1-71.4 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

Under EPCA, when DOE studies new or amended standards, it must consider, to the greatest extent practicable, the following seven factors (42 U.S.C. 6295 (o)(2 )(B)(i)):

1) the economic impact of the standard on the manufacturers and consumers of the affected products;

2) the savings in operating costs throughout the estimated average life of the product compared to any increases in the initial cost or maintenance expense;

3) the total projected amount of energy savings likely to result directly from the imposition
of the standard;

4) any lessening of the utility or the performance of the products likely to result from the imposition of the standard;

5) the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;

6) the need for national energy conservation; and

7) other factors the Secretary considers relevant.

Other statutory requirements are set forth in 42 U.S.C. 6295 (o)(1)

– (2)(A), (2)(B)(ii)

– (iii), and (3)

– (4) and 42 U.S.C. 6316(e).

DOE considers stakeholder participation to be a very important part of the process for setting energy conservation standards. Through formal public notifications ( i.e.

, Federal Register notices), DOE actively encourages the participation and interaction of all stakeholders during the comment period in each stage of the rulemaking. Beginning with the framework document and during subsequent comment periods, interactions among stakeholders provide a balanced discussion of the information that is required for the standards rulemaking.

Before DOE determines whether or not to adopt a proposed energy conservation standard, it must first solicit comments on the proposed standard. (42 U.S.C. 6313(a)(6 )(B)(i)) Any new or amended standard must be designed to achieve significant additional conservation of energy and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)) To determine whether economic justification exists, DOE must review comments on the proposal and determine that the benefits of the proposed standard exceed its burdens to the greatest extent practicable, weighing the seven factors listed above. (42 U.S.C. 6295 (o)(2)( B)(i))

After the publication of the framework document, the energy conservation standards rulemaking process involves three additional, formal public notices, which DOE publishes in the

1-8Federal Register . The first of the rulemaking notices is a notice of public meeting (NOPM), which is designed to publicly vet the models and tools used in the preliminary rulemaking and to facilitate public participation before the NOPR stage. The second notice is the notice of proposed rulemaking (NOPR), which presents a discussion of comments received in response to the NOPM and the preliminary analyses and analytical tools; analyses of the impacts of potential amended energy conservation standards on consumers, manufacturers, and the Nation; DOE’s weighting of these impacts of amended energy conservation standards; and the proposed energy conservation standards for each product. The third notice is the final rule, which presents a discussion of the comments received in response to the NOPR; the revised analyses; DOE’s weighting of these impacts; the amended energy conservation standards DOE is adopting for each product; and the effective dates of the amended energy conservation standards.

In October 2007, DOE published a NOPM and announced the availability of the framework document. 10 CFR 430 (October 9, 2007) The framework document, Rulemaking Framework Document for Residential Clothes Dryers and Room Air Conditioners , describes the procedural and analytical approaches DOE anticipated using to evaluate the establishment of amended energy conservation standards for these products. This document is available at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/dryer_roomac_fra mework.pdf

.

Subsequently, DOE held a public meeting on October 24, 2007 (“October 2007 public meeting”) to discuss procedural and analytical approaches to the rulemaking. In addition, DOE used the public meeting to inform and facilitate involvement of interested parties in the rulemaking process. The analytical framework presented at the public meeting described the different analyses, such as the engineering analysis and the consumer economic analyses ( i.e.

, the life-cycle cost (LCC) and payback period (PBB) analyses), the methods pr oposed for conducting them, and the relationships among the various analyses.

During the October 2007 public meeting, interested parties commented about numerous issues relating to each one of the analyses listed in Table 1.4.1. Comments from interested parties submitted during the framework document comment period elaborated on the issues raised during the public meeting. DOE attempted to address these issues during its preliminary analyses

and sum marized the comments and DOE’s responses in chapter 2 of the preliminary TSD.

1-9Table 1.4.1 Analyses Under the Process Rule*

Preliminary Analyses NOPR Final Rule

Market and technology assessment Revised preliminary analyses Revised NOPR analyses

Screening analysis Life-cycle cost sub-group analysis

Engineering analysis Manufacturer impact analysis

Energy use determination Utility impact analysis

Markups for equipment price

determination

Life-cycle cost and payback period analysis Employment impact analysis Environmental assessment

Shipments analysis Regulatory impact analysis

National impact analysis

Preliminary manufacturer impact analysis

* In the current rulemaking DOE conducted the analyses listed under NOPR as part of the final rule analysis.

As part of the information gathering and sharing process, DOE organized and held interviews with manufacturers of the residential clothes dryers and room air conditioners considered in this rulemaking. DOE selected companies that represented production of all types of products, ranging from small to large manufacturers, and included the Association of Home Appliance Manufacturers (AHAM) member companies. DOE had four objectives for these interviews: (1) solicit manufacturer feedback on the draft inputs to the engineering analysis; (2) solicit feedback on topics related to the preliminary manufacturer impact analysis; (3) provide an opportunity, early in the rulemaking process, to express manufacturers’ concerns to DOE; and (4) foster cooperation between manufacturers and DOE.

DOE incorporated the information gathered during the engineering interviews with manufacturers into its engineering analysis (chapter 5) and the preliminary manufacturer impact analysis (chapter 12).

DOE developed spreadsheets for the engineering, LCC, PBP, and national impact analyses for each product. For each product, DOE developed an LCC spreadsheet that calculates the LCC and PBP at various energy efficiency levels. DOE also developed a national impact analysis spreadsheet that calculates the national energy savings (NES) and national net present values (NPVs) at various energy efficiency levels. This spreadsheet includes a model that forecasts the impacts of amended energy conservation standards at various levels on product shipments. All of these spreadsheets are available on the DOE website for residential clothes dryers and the DOE website for room air conditioners: ( http://www1.eere.energy.gov/buildings/appliance_standards/residential/clothes_dryers.html

, http://www1.eere.energy.gov/buildings/appliance_standards/residential/room_ac.html ).

1-10On February 23, 2010, DOE published the NOPM and availability of the preliminary TSD. 75 FR 7987. The preliminary TSD provides technical analyses and results that support the information presented in the preliminary NOPM and the executive summary for residential clothes dryers and room air conditioners. The preliminary TSD also provides a detailed description of all of the analyses discussed in the paragraphs above. The preliminary TSD is

available on DOE’s website at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/preliminary_analysis_ts

d.html

.

Following publication of the NOPM and the preliminary TSD, DOE held a public meeting on March 16, 2010 to facilitate discussion about the preliminary analyses that were performed for the NOPM and described in the preliminary TSD. In addition to the public meeting, a written comment period was open until April 26, 2010 to allow interested parties to provide new comments or elaborate on any comments made at the public meeting.

On September 27, 2010, AHAM and the American Council for an Energy-Efficient Economy (ACEEE) jointly submitted on behalf of themselves and 26 manufacturers and 8 energy efficiency advocates the “Joint Petition to Adopt Joint Stakeholder Agreement as it Relates to the Rulemaking on Energy Conservation Standards for Residential Clothes Dryers and
Room Air Conditioners,” which included recommendations for amended energy conservation standards for residential clothes dryers and room air conditioners. After receiving this Petition as well as comments on the preliminary analysis, DOE determined it would consider the clothes dryer and room air conditioner energy conservation standards provided in the Petition as part of a direct final rule that updated the preliminary analyses based on inputs from these interested parties. DOE organized and held a second round of interviews with manufacturers to gather additional feedback on the analyses and to provide input to the manufacturer impact analysis that

was conducted for the final rule.

In addition to revising the various preliminary analyses, DOE also performed an LCC subgroup analysis, manufacturer impact analysis, utility impact analysis, employment impact analysis, and regulatory impact analysis for the final rule.

1.5 STRUCTURE OF THE DOCUMENT

This TSD outlines the analytical approaches used in this rulemaking. The TSD consists of 17 chapters and associated appendices.

Chapter 1	 Introduction: provides an overview of the appliance standards program and how it applies to this rulemaking, and outlines the structure of the

document.

1-11Chapter 2 Analytical Framework: describes the rulemaking process.

Chapter 3 Market and Technology Assessment: characterizes the market for the considered products and the technologies available for increasing product efficiency.

Chapter 4 Screening Analysis: identifies all the design options that improve efficiency of the considered products, and determines which technology options are viable for consideration in the engineering analysis.

Chapter 5 Engineering Analysis: discusses the methods used for developing the relationship between increased manufacturer price and increased efficiency.

Chapter 6 Markups Analysis: discusses the methods used for establishing markups for converting manufacturer costs to customer retail prices.

Chapter 7 Energy Use Analysis: discusses the process used for generating energyuse estimates for the considered products as a function of standard

levels.

Chapter 8 Life-Cycle Cost and Payback Period Analysis: discusses the effects of standards on individual customers and users of the products and compares the LCC and PBP of products with and without higher efficiency standards.

Chapter 9 Shipments Analysis: discusses the methods used for forecasting shipments with and without higher efficiency standards, including how product purchase decisions are economically influenced and how DOE models this relationship with econometric equations.

Chapter 10 National Impact Analysis: Discusses the methods used for forecasting national energy consumption and national economic impacts based on annual product shipments and estimates of future product energy efficiency distributions in the absence and presence of amended energy

conservation standards.

Chapter 11 Life-Cycle Cost Subgroup Analysis: discusses the effects of standards on different subgroups of consumers and compares the LCC and PBP of products with and without higher efficiency standards for these

consumers.

Chapter 12 Manufacturer Impact Analysis: discusses the effects of standards on the finances and profitability of product manufacturers.

1-12Chapter 13 Utility Impact Analysis: discusses the effects of standards on electric and gas utilities.

Chapter 14 Employment Impact Analysis: discusses the effects of standards on national employment.

Chapter 15 Environmental Assessment: discusses the effects of standards on emissions of carbon dioxide (CO 2 ), nitrogen oxides (NO

x ), and mercury.

Chapter 16 Monetization of Emission Reductions Benefits: discusses the basis for the estimated monetary values used for the reduced emissions of CO 2 and other pollutants that are expected to result from each of the TSLs

considered.

Chapter 17 Regulatory Impact Analysis: discusses the impact of non-regulatory alternatives to efficiency standards.

Appendix 5A AHAM Data Request Sheets

Appendix 5B Data Submissions

Appendix 5C Engineering Questionnaires

Appendix 5D Room Air Conditioner Engineering Data

Appendix 7A RECS 2005 Variables and Values

Appendix 7B CBECS 2003 Variables and Values

Appendix 7C LCC Energy Use Calculations

Appendix 7D Weather and Temperature Parameters

Appendix 8A User Instructions for LCC and PBP Spreadsheets

Appendix 8B Uncertainty and Variability

Appendix 8C Lifetime Distributions

Appendix 8D Distributions Used for Discount Rates

Appendix 8E Technical Aspects of the Tariff-Based Approach for Room Air Conditioner Energy Prices

1-13Appendix 8F Development of Monthly Allocation Factors for Residential Baseline
Energy Use

Appendix 8G Rebuttable Payback Analysis Results

Appendix 8H Determination of Base-Case Efficiency Distributions

Appendix 8I Life-Cycle Cost Analysis Using Alternative Energy Price Scenarios

Appendix 8J Estimation of Equipment Price Trends for Residential Clothes Dryers

and Room Air Conditioners

Appendix 10A User Instructions for Shipments and National Energy Savings Spreadsheet Model

Appendix 10B National Energy Savings and Net Present Value Using Alternative Energy Price Scenarios

Appendix 10C National Net Present Value of Consumer Benefits and Emissions Reductions Using Alternative Learning Curves

Appendix 12A Manufacturer Impact Analysis Interview Guides

Appendix 12B Government Regulatory Impact Model (GRIM) Overview

Appendix 15A Emissions Factors for Fuel Combustion from Natural Gas, LPG, and Oil-Fired Residential Appliances

Appendix 16A Social Cost of Carbon for Regulatory Impact Analysis Under Executive

Order 12866

Appendix 17A Regulatory Impact Analysis: Supporting Materials

1-14