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,November 25, 1997 

DOE Meeting with AHAM · 

.Clothes Washer Standards 

2:30 - 4:00 p.m: 

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DOE Attendees: Deborah Miller, Michael McCabe, Carl Adams, Eugene Margolis, Mark 

Fredrichs, Bryan Berringer, Qonnie Laughlin . ·· 

AHAM Attendees: Charles Samuel, Wayne Morris 

Other Attendees: Mi~hael Rivest (ADL). 

Mr. Charles Samuel met with Mr. Reicher on November 19, 1997, to discuss the clothes washer • I • ' 

standards rulemaking and delivered a letter concerning outstanding issues pertaining to analyses 

. to be conducted as part of the rulemaking. (Attached is the AHAM letter.) The subject of the · 

· ·meeting was the tWelve points raised in the letter and the responses prepared by the Department. 

Below is a brief djscussion of each of the twelve points. 

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1 & 2. Electricity ·prices and future enem prices. DOE's initial analysis will use the EIA AEO 

1998 energy price forecast. Furthermore, we expect to modify the forecast to· remove the fixed 

charges as discussed by the forecasting subcommittee and apply the trend in average price from 

the AEO 1998. In addition, DOE will, as part of its scenario and sensitivity analyses; use other 

. energy prices forecasts that may be available,.e.g., GRI. With regard to fixed charges, DOE can 

agree to the concept but exactly how it will be done. is not known yet. IfDOE had the AHAM. 

data we can do the analysis, use different assumptions, e."g. removal of fixed charges, AEO 98 

trends, etc., and provide explanations. · 

3. Water rates and projecflon of future water rates. Unless DOE is able to ·locate data on water 

rates and projections, the Department intends on using the 1995 A WW A data. DOE will be. 

fooking at other sources because A WW A doesri 't make futUre projections. DOE will also use the 

most current data available. · · 

4. Electric and gas water heater market share .. EIA, in its RECS database includes detailed 

infolll)atiori on market share of gas and electric water heaters in homes. Furthermore, these data 

also includes market share information on water heaiers in homes with clothes washers. DOE will 

be using the latest RECS data for the hi_storical satu_ration and REM for the forecasted analysis. 

, s: Market divi~ion o{eldctric and gas dryers. ~CS also· includ~s data on clothes dryers. DOE 

intends on using these ·data as well .. DOE will be using the latest RE;CS data for the historical 

saturation and REM for t~e forecasted analysis,_ · · 

For.questions 4 and 5, AHAM.currently has shipment data for 2o·years but they don't have it 

ma~ched up by combination' of washer and type of dryer and type of water heater. The most 

current RECS data is 1993 and we should do some. sanity checks on the data. Since RECS does 

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not make future projections, DOE ~11 be makitig these projections, subject to stakeholder 

comments. 

6. · Future clothes washer shipments. The alternative shipment forecasts.presented at the last 

. clothes washer workshop provide,. DOE believes, a reasonable bound of the likely future 

shipments. DOE will continue to check with EIA and others. for recent data regarding ownership 

of clothes washers, including.clothes washers in multi-family housing and manufactured homes. 

DOE will contim~e to forecast using historical data including such factors as saturation data and 

average lif~time. · 

7. LCC analvsis spreadsheet: The LCC analysis spreadsheet has not been revised. DOE and 

LBNL haye requested comments but none have been provided .. As new data such as equipment. 

cost and energy prices become available the spreadsheet will be updated and distributed. 

• AHAM wanted the spreadsheet to be updated to incorporate the efficiency level vs. design option . 

approach. This will nqt take long to do· but would be easier to do with the data rather than in · 

some generic way. DOE will get the LCC spreadsheet to people as soon as it is updated but 

·there will a number of items to incorporate, e.g. price forecasts, Advisory Committee . 

recommendations, and RECS number. AHAM should work with DOE contractor on the 

revisions. A template is needed for putting in ranges of numbers. Crystal ball has already been 

combined with the LCC spread sheet. Even if LBNL makes all the changes discussed today, there 

is still the problem of generating future prices. We.will have to.use a comfortable range for 

current prices as a first cut and refine as we go along. 

8. Discount rates. Discount rates do not represent a distribution of values; rather alternative 

assumptions. The Department will.conduct separate LCC analyses using discount rates of2, 6- , 

and 15 percent, net of inflation. All of the results will be· considered without any specific · · 

weighting factor. Special analyses, e.g. the impact on subset of the population, can be conducted 

alw. · · · . · 

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9. Cost of changes at different e(ficiencv levels. The cost data provided by AHAM, marked up 

to price, will be used. DOE expects AHAM to provide the full distribution of costs for the · 

industry. This distribution includes the range and a weighing of costs for each: efficiency level 

developed by Mike Rivest of ADL and Wayne Morris of AHAM. DOE will use the full 

distribution but. if it looks strai:ige, then it needs to be evaluated and discussed .. AHAM needs to 

work with DOE in capturing all the data . 

. 10. Start year for the analysis. Based on the current schedule, the earliest effective date would 

be October2002, three years after the expected issuance of the final rule. The Department will 

consider ot~~r effective dates. in weighti":g the impacts of possible standards. We expect energy 

savings to be calculated to the year 2030. ' · · · · · 

11. The manufacturer and retail mark-up. At present, the mark-up assumptions being 

considered for the LCCanalysis are: retail - fixed at 1.4; taxes - fixed at 1.052; manufacturer -

variable between I and 1.35 (note: the mark-up over costs for the baseline unit= 1.35). 

Variability in manufacturer mark-up is to reflect different cost pass through assumptions. Thus, 
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total mark-up ranges froni appro*1tately l.45 to 2.0, with a nlidpoint of approxi_mately 1.75. The 

mark-ups are based on a draft discussion paper on retail prices and mark-ups, which is currently 

under review. This paper will be distributed to st3keholders in the near future. . ' 

12. Baseline retail price. In the year 1994, for which retail price information is available.from 

three sources (Census-Consumer Expenditure Survey, Dealerscope and Elrick & Lavidge's 

ELCAP), the average price of clothes washers w~s $400.25. Currently the Department only has 

ELCAP _prices- for 1996 and part of 1997. From this data it. appears the price trend is flat. Hence, 

the Department intends to use $400.25 as the baseline cost:-As additional data becomes available, 

the Department will consider it. . 

_ AHA!vI indicated that they would be talking to manufacturers on December 1 and that they would 

-be recommending that the data be sent to DOE. DOE Will try to get the ccystal ball template 

done as soon as possible after the Advisory Committee meeting. - . ' 

In addition to the issues raised above, there was a short discussion on the clothes washer test 

-procedures and an extension of the effective date. for representation purposes. DOE indicated 

that they were likely to grant the petition for extension according to the appropriate section in 

EPCA. 

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