### Yederal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules 56423

Office of Energy Efficiency and Renewable Energy

10 CfR Part 430
{Cocket No. EE-RM-94-403]

RIN 1904-AA67
Energy Conservation Program for Consumer Products: Energy Conservation Standards for Three Cleaning Products

. AGENCY: 

### Office ofEnergy Efficiency and Renewable Energy. Department of Energy.
ACTlON: 

### Advance notice ofproposed rulemaking.

SUMMARY: 

### The Energy Policy and Conservation Act. as amended by the National Energy Conservation Policy Act. the National Appliance Energy Conservation Act. the National .'\ppliance Energy Conservation Amendments of 1988 and the Energy Policy Act of 1992. prescribes energy conservation standards for certain major household appliances and requires the Department ofEnergy (Department) to administer an energy conservation program for these products. Among other things. the Energy Policy and Conservation Act. as amended. requires the Department to consider amending the energy conservation standards for dishwashers. clothes washers and clothes dryers.

The purpose ofthis Advance Notice ofProposed Rulemaking is to: Present for comment the product classes that the Department is planning to analyze; present a detailed discussion ofthe analytical methodology and analytical models that the Department expects to

use in performing analyses in connection with the proposed rule; and facilitate the gathering ofinformation and comments prior to publishing a subsequent notice ofproposed rulemaking.

DATES: 

### Written comments must be 

### received by January 30. 1995.

ADDRESSES: 

### Written comments are to be submitted to: U.S. Department of Energy. Office ofEnergy Efficiency and Renewable Energy. "Energy Efficiency Standards for Consumer Products," (Docket No. EE·RM-94-403). Room 5E066. Forrestal Building. 1000 Independence Avenue. SW. Washington. DC 20585. (202) 586-7140.

Copies ofthe public comments received mav be 

### read at the Department's Freedom ofInformation Reading Room. U.S. Department of Energy, Forrestal Building. Room lE190.1000 Independence Avenue. SW. Washington. DC 20585. (202) 586-6020 between the hours of9:00 a.m. and 4:00
p.m.• Monday through Friday. except Federal holidays.

Formore information concerning public participation in this rulemaking proceeding. see section IV, "Public Comment Procedures." ofthis notice.
FOR FURTHER INFORMATION CONTACT: 

### P. Marc LaFrance. U.S. Department of

Energy. Office ofEnergy Efficiency and Renewable Energy. Forrestal Building. Mail Station EE-431. 1000 Independence Avenue. SW

.. Washington. DC 20585. (202) 586- 7140 Eugene Margolis. Esq.• U.S. Department

ofEnergy. Office ofGeneral Counsel. Forrestal Building. Mail Station Ge

### 72.1000 Independence Avenue. SW.• Washington. DC 20585. (202) 586- 9507
SUPPLEMENTARY INFORMATION:

I. Introduction

a. Authority b. Background II. Methodology Ill. Models. Data. and Assumptions

a. Engineering Performance Models and

Costing Analysis
1. Appliance classes 2. Baseline units 3

..Design options 4. Maximum technologically feasible

designs 5. Performance models 6. Costing analysis 7. Price-efficiency relationships 6. Data sources 9. Outputs from the Engineering Analysis b. Residential Energy Models
1. Lawrence Berkeley Laboratory

Residential Energy Model 2. Residential**~nd-Use** Energy Planning

Svstem (REEPS 2.12)

c. Manufacturer Impact Models
1. Conceptual approach 2. Measures ofimpact 3. Lawrence Berkeley Laboratory

Manufacturer Impact Model 4. Government Regulatory Impact Model 5. Cash-flow analysis ofcosts due to

standards 6. Data sources d. Utility Impact Model

e. Sensitivitv Analvses IV. Public CommentProcedures

a. Participation in Rulemaking b. Written Comment Procedures

c. Issues for Public Comment V. Review under Executive Order 12866

I. 

### Introduction



### a. Authority

Part B ofTitle III ofthe Energy Policy and Conservation Act. Public Law 94- 163. as amended by the National Energy Conservation Policy Act. Public Law 95-619. the National Appliance Energy Conservation Act. Public Law 100-12. the National Appliance Energy Conservation Amendments of 1988. Public Law 100-357. and the Energy Policy**A~** 

### of 1992. Public Law 102- 486. 1 

### created the Energy Conservation Program for various ConsumerProducts other than Automobiles (Program).

Three cleaning products

. (dishwashers. clothes washers. and clothes dryers) are the subject ofthis Advance Notice ofProposed Rulemaking. The National Appliance Energy Conservation Act of 1987 amended the Act (section 325(g)) to impose prescriptive standards (design feature requirements) for the three cleaning products as part ofthe energy conservation program for consumer products. These design feature requirements were effective for appHances manufactured on or after January 1. 1988. and were as follows: dishwashers shall be equipped with an option to dry without heat. clothes washers shall have an unheated rinse option. and gas clothes dryers shall not be 

### equipped with a constant burning pilot. The Act required the Department
to conduct a rulemaking by January 1. 1990. to determine ifthe above mentioned standards should be amended. The Act provided that any amendment to the standards would apply to products manufactured three
years after the rulemaking. The final rule (56 FR 22279) was issued May 14. 1991. and is effective for products manufactured on or after May 14. 1994 (hereafter referred to as the May 1991 final rule). The Act also requires the -Department to conduct a subsequent rulemaking no later than five years after the date ofpublication ofthe previous final rule. This second round of rulemaking is the purpose oftoday's notice.

Any new or amended standard is required to be designed so as to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified (section 325(1)(2)(A)).

Section 325(1)(2)(B)(0 ofthe Act prOVides that before the Department determines whether an energy conservation standard is economically justified. it must first solicit comments

on the proposed standard. After reviewing comments on the proposal.

1 Part B ofTitle ill ofthe Energy**P~licy** and Conservation Act. as amended bv the National Energy Conservation Policy Act:the National Appliance Energy Conservation Act. the National Appliance Energy Conservation Amendments of 1988. and the Energy· Policy Act of 1992. is referred
to in this Advance Notice ofProposed Rulemaking

as the "Act:' Part B ofTitle m is codified at42 U.S.c. 6291 et seq. Part B ofTitle m ofthe Energy Policy and Conservation Act. as amended by the National Energy Conservation Policy Act only. is referred to as the National Energy Conservation Policy Act. 

### Yederal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules 56423

Office of Energy Efficiency and Renewable Energy

10 CfR Part430
{Cocket No. EE-RM-94-403]

RIN 1904-AA67
Energy Conservation Program for Consumer Products: Energy Conservation StandardsforThree Cleaning Products

.AGENCY: 

### Office ofEnergy Efficiency and Renewable Energy. Department of Energy.
ACTlON: 

### Advance notice ofproposed rulemaking.

SUMMARY: 

### The Energy Policy and Conservation Act. as amendedby the National Energy Conservation Policy Act. the National ApplianceEnergy Conservation Act. theNational .'\ppliance Energy Conservation Amendments of 1988 and the Energy Policy Act of 1992. prescribes energy conservation standards for certain major household appliances andrequires the Department ofEnergy (Department) to administeran energy conservation program for these products. Among otherthings. the Energy Policy and Conservation Act. as amended. requires the Departmentto consider amending the energy conservation standards for dishwashers. clothes washers and clothes dryers.

The purpose ofthis Advance Notice ofProposed Rulemaking is to: Present for comment the productclasses that the Department is planning to analyze; present a detailed discussion ofthe analytical methodology and analytical models that the Department expects to

use in performing analyses in connection with the proposed rule; and facilitate the gathering ofinformation and comments priorto publishing a subsequent notice ofproposed rulemaking.

DATES: 

### Written comments must be 

### received by January 30. 1995.

ADDRESSES: 

### Written comments are to be submitted to: U.S. Department of Energy. Office ofEnergy Efficiency and Renewable Energy. "EnergyEfficiency Standards for ConsumerProducts." (Docket No. EE-RM-94-403). Room 5E066. Forrestal Building. 1000 Independence Avenue. SW. Washington. DC 20585. (202) 586-7140.

Copies ofthe public comments received mav be 

### read at the Department's Freedom ofInformation Reading Room. U.S. Department of Energy. Forrestal Building. Room lE190.1000 IndependenceAvenue. SW. Washington. DC 20585. (202) 586-6020 between the hours of9:00 a.m. and4:00
p.m.• Monday through Friday. except Federal holidays.

Formore information concerning publicparticipation inthis rulemaking proceeding. see section IV. "Public Comment Procedures." ofthis notice.
FOR FURTHER INFORMATION CONTACT: 

### P. Marc LaFrance. U.S. Department of

Energy. Office ofEnergy Efficiency and Renewable Energy. Forrestal Building.Mail Station EE-431. 1000 Independence Avenue. SW

.. Washington. DC 20585. (202) 586- 7140 Eugene Margolis. Esq.• U.S. Department

ofEnergy. Office ofGeneral Counsel. Forrestal Building. Mail Station Ge

### 72.1000 Independence Avenue. SW.• Washington. DC 20585. (202) 586- 9507
SUPPLEMENTARY INFORMATION:

I. Introduction

a. Authority b. Background II. Methodology III. Models. Data. and Assumptions

a. Engineering Performance Models and

Costing Analysis
1. Appliance classes 2. Baseline units 3

..Design options 4. Maximum technologically feasible

deSigns 5. Performance models 6. Costing analysis 7. Price-efficiency relationships 6. Data sources 9. Outputs from the Engineering Analysis b. Residential Energy Models
1. Lawrence Berkeley Laboratory

Residential Energy Model 2. Residential**~nd-Use** Energy Planning

System (REEPS 2.12)

c. Manufacturer Impact Models
1. Conceptual approach 2. Measures ofimpact 3. Lawrence Berkeley Laboratory

Manufacturer Impact Model 4. Government Regulatory Impact Model 5. Cash-flow analysis ofcosts due to

standards 6. Data sources d. Utility Impact Model

e. Sensitivitv Analvses IV. Public CommentProcedures

a. Participation in Rulemaking b. Written Comment Procedures

c. Issues for PublicComment V. Review underExecutive Order 12866

I.

### Introduction



### a. Authority

Part BofTitle III ofthe Energy Policy and Conservation Act. Public Law94- 163. as amendedby the National Energy Conservation PolicyAct. Public Law 95-619. the National Appliance Energy Conservation Act. Public Law 100-12. the National Appliance Energy Conservation Amendments of 1988. Public Law 100-357. and the Energy Policy**A~** 

### of 1992. PublicLaw 102- 486. 1 

### created theEnergy Conservation Program for various ConsumerProducts otherthan Automobiles (Program).

Threecleaning products

. (dishwashers. clothes washers. and clothes dryers) arethe subject ofthis Advance Notice ofProposed Rulemaking. The National Appliance Energy ConservationAct of 1987 amended the Act (section 325(g)) to impose prescriptive standards (deSign feature requirements) for thethree cleaning products as part ofthe energy conservation program for consumer products. These design feature requirements were effective for appHances manufactured on orafter January 1. 1988. and were as follows: dishwashers shall be equipped with an option to dry without heat. clothes washers shall have an unheatedrinse option. and gas clothes dryers shall not be 

### equipped with a constant burning pilot. The Act required the Department
to conduct a rulemaking by January 1. 1990. to determine ifthe above mentioned standards shouldbe amended. TheAct provided that any amendment to the standards would applyto productsmanufactured three
years after the rulemaking. The final rule (56 FR 22279) was issued May 14. 1991. andis effective for products manufactured on or after May 14. 1994 (hereafter referred to as the May 1991 final rule). TheAct also requires the 'Department to conduct a subsequent rulemaking no later than five years after the date ofpublication ofthe previous final rule. This second round of rulemaking is the purpose oftoday's notice.

Any new or amended standard is required to be designed so as to achieve the maximum improvement in energy efficiency that is technologically feasible and economicallyjustified (section 325(l)(2j(A)).

Section 325(1)(2)(B)(i) ofthe Act prOVides thatbefore the Department determines whether an energy conservation standard is economically justified. it must first solicit comments

onthe proposed standard. After reviewing comments on the proposal.

1Part B ofTitle illofthe Energy**P~IiCY** and Conservation Act. as amended bv the National Energy Conservation Policy Act:the National Appliance Energy Conservation Act. the National Appliance Energy Conservation Amendments of 1988. and the Energy· Policy Act of 1992. is referred
to in this Advance Notice ofProposed Rulemaking

asthe "Act." Part BofTitle m is codified at42 U.S.c. 6291 et seq. Part B ofTitle m ofthe Energy Policy and ConservationAct. as amended bythe National Energy Conservation Policy Act only. is referred to as the National Energy Conservation Policy Act. 

### Yederal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules 56423

Office of Energy Efficiency and Renewable Energy

10 CfR Part430
{Cocket No. EE-RM-94-403]

RIN 1904-AA67
Energy Conservation Program for Consumer Products: Energy Conservation StandardsforThree Cleaning Products

.AGENCY: 

### Office ofEnergy Efficiency and Renewable Energy. Department of Energy.
ACTlON: 

### Advance notice ofproposed rulemaking.

SUMMARY: 

### The Energy Policy and Conservation Act. as amendedby the National Energy Conservation Policy Act. the National ApplianceEnergy Conservation Act. theNational .'\ppliance Energy Conservation Amendments of 1988 and the Energy Policy Act of 1992. prescribes energy conservation standards for certain major household appliances andrequires the Department ofEnergy (Department) to administeran energy conservation program for these products. Among otherthings. the Energy Policy and Conservation Act. as amended. requires the Departmentto consider amending the energy conservation standards for dishwashers. clothes washers and clothes dryers.

The purpose ofthis Advance Notice ofProposed Rulemaking is to: Present for comment the productclasses that the Department is planning to analyze; present a detailed discussion ofthe analytical methodology and analytical models that the Department expects to

use in performing analyses in connection with the proposed rule; and facilitate the gathering ofinformation and comments priorto publishing a subsequent notice ofproposed rulemaking.

DATES: 

### Written comments must be 

### received by January 30. 1995.

ADDRESSES: 

### Written comments are to be submitted to: U.S. Department of Energy. Office ofEnergy Efficiency and Renewable Energy. "EnergyEfficiency Standards for ConsumerProducts." (Docket No. EE-RM-94-403). Room 5E066. Forrestal Building. 1000 Independence Avenue. SW. Washington. DC 20585. (202) 586-7140.

Copies ofthe public comments received mav be 

### read at the Department's Freedom ofInformation Reading Room. U.S. Department of Energy. Forrestal Building. Room lE190.1000 IndependenceAvenue. SW. Washington. DC 20585. (202) 586-6020 between the hours of9:00 a.m. and4:00
p.m.• Monday through Friday. except Federal holidays.

Formore information concerning publicparticipation inthis rulemaking proceeding. see section IV. "Public Comment Procedures." ofthis notice.
FOR FURTHER INFORMATION CONTACT: 

### P. Marc LaFrance. U.S. Department of

Energy. Office ofEnergy Efficiency and Renewable Energy. Forrestal Building.Mail Station EE-431. 1000 Independence Avenue. SW

.. Washington. DC 20585. (202) 586- 7140 Eugene Margolis. Esq.• U.S. Department

ofEnergy. Office ofGeneral Counsel. Forrestal Building. Mail Station Ge

### 72.1000 Independence Avenue. SW.• Washington. DC 20585. (202) 586- 9507
SUPPLEMENTARY INFORMATION:

I. Introduction

a. Authority b. Background II. Methodology III. Models. Data. and Assumptions

a. Engineering Performance Models and

Costing Analysis
1. Appliance classes 2. Baseline units 3

..Design options 4. Maximum technologically feasible

deSigns 5. Performance models 6. Costing analysis 7. Price-efficiency relationships 6. Data sources 9. Outputs from the Engineering Analysis b. Residential Energy Models
1. Lawrence Berkeley Laboratory

Residential Energy Model 2. Residential**~nd-Use** Energy Planning

System (REEPS 2.12)

c. Manufacturer Impact Models
1. Conceptual approach 2. Measures ofimpact 3. Lawrence Berkeley Laboratory

Manufacturer Impact Model 4. Government Regulatory Impact Model 5. Cash-flow analysis ofcosts due to

standards 6. Data sources d. Utility Impact Model

e. Sensitivitv Analvses IV. Public CommentProcedures

a. Participation in Rulemaking b. Written Comment Procedures

c. Issues for PublicComment V. Review underExecutive Order 12866

I.

### Introduction



### a. Authority

Part BofTitle III ofthe Energy Policy and Conservation Act. Public Law94- 163. as amendedby the National Energy Conservation PolicyAct. Public Law 95-619. the National Appliance Energy Conservation Act. Public Law 100-12. the National Appliance Energy Conservation Amendments of 1988. Public Law 100-357. and the Energy Policy**A~** 

### of 1992. PublicLaw 102- 486. 1 

### created theEnergy Conservation Program for various ConsumerProducts otherthan Automobiles (Program).

Threecleaning products

. (dishwashers. clothes washers. and clothes dryers) arethe subject ofthis Advance Notice ofProposed Rulemaking. The National Appliance Energy ConservationAct of 1987 amended the Act (section 325(g)) to impose prescriptive standards (deSign feature requirements) for thethree cleaning products as part ofthe energy conservation program for consumer products. These design feature requirements were effective for appHances manufactured on orafter January 1. 1988. and were as follows: dishwashers shall be equipped with an option to dry without heat. clothes washers shall have an unheatedrinse option. and gas clothes dryers shall not be 

### equipped with a constant burning pilot. The Act required the Department
to conduct a rulemaking by January 1. 1990. to determine ifthe above mentioned standards shouldbe amended. TheAct provided that any amendment to the standards would applyto productsmanufactured three
years after the rulemaking. The final rule (56 FR 22279) was issued May 14. 1991. andis effective for products manufactured on or after May 14. 1994 (hereafter referred to as the May 1991 final rule). TheAct also requires the 'Department to conduct a subsequent rulemaking no later than five years after the date ofpublication ofthe previous final rule. This second round of rulemaking is the purpose oftoday's notice.

Any new or amended standard is required to be designed so as to achieve the maximum improvement in energy efficiency that is technologically feasible and economicallyjustified (section 325(l)(2j(A)).

Section 325(1)(2)(B)(i) ofthe Act prOVides thatbefore the Department determines whether an energy conservation standard is economically justified. it must first solicit comments

onthe proposed standard. After reviewing comments on the proposal.

1Part B ofTitle illofthe Energy**P~IiCY** and Conservation Act. as amended bv the National Energy Conservation Policy Act:the National Appliance Energy Conservation Act. the National Appliance Energy Conservation Amendments of 1988. and the Energy· Policy Act of 1992. is referred
to in this Advance Notice ofProposed Rulemaking

asthe "Act." Part BofTitle m is codified at42 U.S.c. 6291 et seq. Part B ofTitle m ofthe Energy Policy and ConservationAct. as amended bythe National Energy Conservation Policy Act only. is referred to as the National Energy Conservation Policy Act.

### 56424 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14. 

### 1994 I 

### Proposed**Rul~s ~--~-----** 



### the Department must then detennine that the benefits ofthe standard exceed its burdens. based to the greatest extent practicable. on a weighing ofthe following seven factors:

(1) 

### The economic impact ofthe standard on the manufacturers and on the consumers ofthe products subject to such standard;

(2) The savings in operating costs throughout the estimated average life of' the covered product in the type (or class) compared to any increase in the price. initial charges. or maintenahce
expenses for the covered products that

are likely to result directly from the imposition ofthe standard;

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

(4) 

### Any lessening ofthe utility or the performance ofthe covered products likelv to result from the imposition of the standard;

(5) The impact ofany lessening of competition. as detennined in writing by the Attorney General. that is likely to result from the imposition ofthe 

### standard;

(6) The need for national energy conservation; and

(7) Other factors the Secretary considers relevant.

b. Background



### The Department conducted the first rulemaking to detennine ifthe standards (design feature requirements) imposed by the Act should be amended. The Department published an Advance Notice ofProposed Rulemaking (53 FR 17712. Mav 18. 1988). a Notice of Proposed Rulemaking (54 FR 32744. i).ugust 9.1989). and the May 1991 final rule, The May 1991 final rule imposed
energy conservation standards for the cleaning products which are based on perfonnance. The standards specify a minimum energy factor for both classes ofdishwashers (Standard and Compact). Two ofthe five classes ofclothes washers (Top-loading Standard and Top-luading Compact) and four ofthe five classes ofclothes dryers (Electric Standard. Electric Compact (120v), Electric Compact (240v). and Gas Standard) are subject to a minimum
energy factor while the remaining classes are sabject to design feature requirements. The May 1991 final rule
energy conservation standards are effective for products manufactured on

or after May 14, 1994.

'In 

### the Mav 1991 final rule. the Deoartment'announced that it \\'as accelerating the second review ofenergy efficiencv standards for clothes washers because 

### it became aware ofa design option (horizontal-axis wash tub in a top-loading washer) in use in Europe that was not included in the proposed rule and upon which no comment was received. The Department did not considerestablishing a standard based

on the top-loadinghorizontal-axis design option because this infonnation

came to the attention ofthe Department after the close ofthe comment period on the proposed rule and thus was not subject to public debate. The Department published an Advance Notice ofProposed Rulemaking (55 FR 39624. September 28. 1990. "nine product rulemaking") which announCed the acceleration ofthe second review of energy efficiency standards for clothes washers. In 

### response to that notice. a number ofenergy efficiency advocates and appliance manufacturers requested that the Department delay the second review until 1995-1996. The additional time was requested in orderto allow manufacturers time to implement the standards imposed by the May 1991 final rule and to fully evaluate new.

more energy efficient technologies such

as top-loading horizontal-axis clothes washers. This additional time, manufacturers contended. would enable them to provide more meaningful and relevant comments on the next. legislativelyrequired rolemaking. The Department considered the request. and by letter. dated February 26, 1992. notified the parties requesting the delay that the Department had determined that it would conduct the rulemaking on the later schedule, as requested.

Today's Advance Notice ofProposed Rulemaking includes clothes washers. Comments previously received for the September 28.1990. Advance Notice of Proposed Rulemaking relative to clothes washers will be considered and addressed in the Department's Notice of Proposed Rulemaking. Those who submitted previous comments have the

.option ofmaintaining their previously submitted comments. amending previous comments. or withdrawing their previous comments and submitting

new comments. The Department will address all applicable comments in the Notice ofProposed Rulemaking.

Presently. the Department also is conducting a rulemaking on 

### three types ofconsumer products (central air conditioners and central air conditioning heat pumps; furnaces; and refrigerators. refrigerator-freezers. and freezers) which was initiated by the publication ofa Advance Notice of Proposed Rulemaking. (58 FR 47326. Sept. 8.1993) (hereafter refen-ed to as the Three Product Advance Notice). The Three Product Advance Notice has a detailed discussion on numerous crosscutting policy and methodological issues. These issues include discount
rates. environmental externalities. manufacturer impact analysis, incremental analvsis and infonnation on any identifiable groups or consumers who may be disproportionally affected by any proposed national energy efficiency standard levels. The Department proposeslo US8'

### the same analytical methods in all efficiency standard rulemakings and. therefore. the decisions on many ofthese cross-cutting issues tPat emerge from other rulemaking processes. such as the Three Product Advance Notice. are likely to be reflected in the proposed standards that will follow this Advance Notice. '

The Department is developing a general test procedure revision which will address previously granted waivers. add 

## future testing criteria and provide
test procedure clarity. This planned revision will not change the energy consumption reporting ofany product models and will be 

### promulgated prior to the effective date ofanv new standards from this rulemaking.

. II. Methodology

This section provides a brief description ofthe analyses to be used to determine the impacts ofthe standards. It 

### offers an overview ofthe analytic methodology and discusses the major components ofthe analyses: the Engineering Analysis, the Manufacturer Analysis. the Consumer Analysis. and the Utility Analysis.

This section also discusses the interrelationships among the components that ensure consistencv throughout the analyses.

.

The next section. Models. Data and Assumptions. describes the computer models used in the analyses. The models predict the anticipated response ofconsumers, manufacturers. and utilities to future changes in the
economy. including the imposition of energy conservation standards. Quantitative estimates ofthe impacts of standards will be calculated from the outputs from the models. The models that will be utilized in the analvses are:

• EngineeringPerfonnance Models.

• Consumer Impact Models.

• ManufacturerImpact Models. and

• Utility Impact Model. The function. data sources. assumptions and validity ofthe results for each model are discussed below.

The overall impact ofappliance conservation standards on energy use.

consumers. manufacturers. and other· factors will be detennined by**comparin~** 

### projections under the base case 2 

### with

'The base ca5e assumes implementation oft!:P. conservation standards that were E.et bv Ine Department ofE::crgy in the May 1991 final n;'". 

### 56424 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14, 

### 1994 I 

### Proposed**Rul~s**



### the Department must then detennine that the benefits ofthe standardexceed itsburdens.based tothe greatest extent practicable. on a weighing ofthe following seven factors:

(1) 

### The economicimpact ofthe standard on the manufacturers and on the consumers ofthe products subject to such standard;

(2) The savings in operating costs throughout the estimated average life of' the covered product in the type 

### (or class) compared toany increase inthe price. initial charges. or maintenahce
expenses for the covered productsthat

are likely to result directly from the imposition ofthe standard;

(3) Thetotal projected amount of
energy savings likely to result directly from the impositionofthe standard;

(4) Any lessening ofthe utility or the performance ofthe covered products likelv to result from the imposition of the standard;

(5) The impact ofany lessening of competition. as detennined in writing by the Attorney General. that is likely to result from the imposition ofthe 

### standard;

(6) The need for national energy conservation; and

(7) Other factors the Secretary considers relevant.
b, Background



### The Department conducted the first rulemaking to detennine ifthe standards (design feature requirements) imposed by the Act shouldbe amended. The Department published an Advance Notice ofProposed Ruiemaking (53 FR 17712. Mav 18. 1988). a Notice of Proposed Rulemaking (54 FR 32744. l).ugust 9.1989). and the May 1991 final ruie, The May 1991 final rule imposed
energy conservation standards for the cleaning products which are based on perfonnance. The standards specify a minimum energy factor for both classes ofdishwashers (Standard and Compact). Two ofthe five classes ofclothes washers (Top-loading Standard and Top-luading Compact) and four ofthe five classes ofclothesdryers (Electric Standard. Electric Compact (120v). Electric Compact (240v), and Gas Standard) are subjectto a minimum
energy factor while the remaining classes are sabject to design feature requirements. The May 1991 final rule
energy conservation standards are effective for products manufactured on

or after May 14, 1994.

'In 

### the Mav 1991 final rule. the Deoanment'announced that it \\'as accelerating the second review ofenergy efficiencv standards for clothes washers because 

### it became aware ofa design option (horizontal-axis wash tub in a top-loading washer) inuse inEurope that was not includedinthe proposed rule and upon which no comment was received. TheDepartment did not considerestablishing a standardbased

on thetop-loadinghorizontal-axis design optionbecause this infonnation

came to theattention ofthe Department after the close ofthecommentperiod on the proposedrule andthus was not subject to public debate. The Department publishedanAdvance Notice ofProposed Rulemaking (55 FR 39624. September28, 1990. "nine productrulemaking") which announCed the acceleration ofthe secondreview of
energy efficiency standardsfor clothes washers. In

### responsetothatnotice, a numberofenergy efficiencyadvocates and appliancemanufacturers requested that the Department delay the second review until 1995-1996. Theadditional time was requested in orderto allow manufacturers time to implement the standards imposed by the May 1991 final rule and to fully evaluate new.

more energy efficienttechnologies such

as top-loading horizontal-axis clothes washers. This additional time, manufacturers contended. would enable them to provide more meaningful and relevant comments onthenext, legislativelyrequiredrulemaking. The Department considered the request. and by letter. dated February 26, 1992. notified the parties requesting the delay thatthe Department had determined that itwould conducttherulemaking on the later schedule, asrequested.

Today's Advance Notice ofProposed Rulemaking includes clothes washers. Comments previouslyreceived for the September 28.1990, Advance Notice of Proposed Rulemaking relative to clothes washers will be considered and addressed in theDepartment'sNotice of Proposed Rulemaking. Those who submitted previous commentshave the

.option ofmaintaining their previously submitted comments. amending previous comments. or withdrawing their previous comments and submitting

new comments. The DepartInent will address all applicable commentsinthe Notice ofProposed Rulemaking.

Presently. the Departmentalso is conducting a rulemaking on three 

### types ofconsumerproducts (central air conditioners and central air conditioning heatpumps; furnaces; and refrigerators, refrigerator-freezers. and freezers) which was initiatedbythe publication ofa Advance Notice of Proposed Rulemaking. (58 FR 47326. Sept. 8.1993) (hereafterrefen-ed to as theThree Product Advance Notice). The Three Product Advance Notice has a detailed discussion on numerous crosscutting policy and methodological issues. These issues includediscount rates, environmentalexternalities. manufacturerimpact analysis. incremental analvsis and infonnation on any identifiablegroups orconsumers who may be disproportionally affected by any proposed national energy efficiency standard levels. The Department proposes.lo US8'the same analytical methods in allefficiency standard rulemakings and, therefore. the decisions on many ofthese cross-cutting issues tj:lat emerge from other rulemaking processes, such as theThree ProductAdvance Notice. are likely to be reflected in the proposed standards that will follow this Advance Notice. '

The Department is developing a general test procedurerevision which will address previously granted waivers. add

## future testing criteria and provide
test procedureclarity. This planned revision will not changethe energy consumption reporting ofany product models and will be

### promulgated priorto the effective date ofanv new standards from this rulemaking.

- II. Methodology

This section provides a brief description ofthe analysesto be used to determine the impacts ofthe standards. It

### offers an overview oftheanalytic methodology and discusses the major components ofthe analyses: the Engineering Analysis, the Manufacturer Analysis. the ConsumerAnalysis. and the Utility Analysis.

This section also discusses the interrelationships among the components that ensure consistencv throughout the analyses. "

The next section. Models, Data and Assumptions. describes the computer models used in the analyses. The models predict the anticipated response ofconsumers. manufacturers. and utilities to future changes in the
economy, including the imposition of
energy conservation standards. Quantitative estimates ofthe impacts of standards will be calculated from the outputs from the models. The models that will be utilized in the analvses are:

• EngineeringPerfonnance Models,

• ConsumerImpact Models.

• ManufacturerImpact Models. and

• Utility Impact Model. The function. data sources, assumptions and validity ofthe results for each model are discussed below.

The overall impact ofappliance conservation standards on energy use.

consumers. manufacturers. and other· factors will be detennined by**comparin~** 

### projections under the base case 2 

### with

'Thebase ca5e assumes implementation of 1!:P. conservation standards that were E.et bv tne Department oiE::crgy in the May 1991final n;I

... 

### 56424 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14, 

### 1994 I 

### Proposed**Rul~s**



### the Department must then detennine that the benefits ofthe standardexceed itsburdens.based tothe greatest extent practicable. on a weighing ofthe following seven factors:

(1) 

### The economicimpact ofthe standard on the manufacturers and on the consumers ofthe products subject to such standard;

(2) The savings in operating costs throughout the estimated average life of' the covered product in the type 

### (or class) compared toany increase inthe price. initial charges. or maintenahce
expenses for the covered productsthat

are likely to result directly from the imposition ofthe standard;

(3) Thetotal projected amount of
energy savings likely to result directly from the impositionofthe standard;

(4) Any lessening ofthe utility or the performance ofthe covered products likelv to result from the imposition of the standard;

(5) The impact ofany lessening of competition. as detennined in writing by the Attorney General. that is likely to result from the imposition ofthe 

### standard;

(6) The need for national energy conservation; and

(7) Other factors the Secretary considers relevant.
b, Background



### The Department conducted the first rulemaking to detennine ifthe standards (design feature requirements) imposed by the Act shouldbe amended. The Department published an Advance Notice ofProposed Ruiemaking (53 FR 17712. Mav 18. 1988). a Notice of Proposed Rulemaking (54 FR 32744. l).ugust 9.1989). and the May 1991 final ruie, The May 1991 final rule imposed
energy conservation standards for the cleaning products which are based on perfonnance. The standards specify a minimum energy factor for both classes ofdishwashers (Standard and Compact). Two ofthe five classes ofclothes washers (Top-loading Standard and Top-luading Compact) and four ofthe five classes ofclothesdryers (Electric Standard. Electric Compact (120v). Electric Compact (240v), and Gas Standard) are subjectto a minimum
energy factor while the remaining classes are sabject to design feature requirements. The May 1991 final rule
energy conservation standards are effective for products manufactured on

or after May 14, 1994.

'In 

### the Mav 1991 final rule. the Deoanment'announced that it \\'as accelerating the second review ofenergy efficiencv standards for clothes washers because 

### it became aware ofa design option (horizontal-axis wash tub in a top-loading washer) inuse inEurope that was not includedinthe proposed rule and upon which no comment was received. TheDepartment did not considerestablishing a standardbased

on thetop-loadinghorizontal-axis design optionbecause this infonnation

came to theattention ofthe Department after the close ofthecommentperiod on the proposedrule andthus was not subject to public debate. The Department publishedanAdvance Notice ofProposed Rulemaking (55 FR 39624. September28, 1990. "nine productrulemaking") which announCed the acceleration ofthe secondreview of
energy efficiency standardsfor clothes washers. In

### responsetothatnotice, a numberofenergy efficiencyadvocates and appliancemanufacturers requested that the Department delay the second review until 1995-1996. Theadditional time was requested in orderto allow manufacturers time to implement the standards imposed by the May 1991 final rule and to fully evaluate new.

more energy efficienttechnologies such

as top-loading horizontal-axis clothes washers. This additional time, manufacturers contended. would enable them to provide more meaningful and relevant comments onthenext, legislativelyrequiredrulemaking. The Department considered the request. and by letter. dated February 26, 1992. notified the parties requesting the delay thatthe Department had determined that itwould conducttherulemaking on the later schedule, asrequested.

Today's Advance Notice ofProposed Rulemaking includes clothes washers. Comments previouslyreceived for the September 28.1990, Advance Notice of Proposed Rulemaking relative to clothes washers will be considered and addressed in theDepartment'sNotice of Proposed Rulemaking. Those who submitted previous commentshave the

.option ofmaintaining their previously submitted comments. amending previous comments. or withdrawing their previous comments and submitting

new comments. The DepartInent will address all applicable commentsinthe Notice ofProposed Rulemaking.

Presently. the Departmentalso is conducting a rulemaking on three 

### types ofconsumerproducts (central air conditioners and central air conditioning heatpumps; furnaces; and refrigerators, refrigerator-freezers. and freezers) which was initiatedbythe publication ofa Advance Notice of Proposed Rulemaking. (58 FR 47326. Sept. 8.1993) (hereafterrefen-ed to as theThree Product Advance Notice). The Three Product Advance Notice has a detailed discussion on numerous crosscutting policy and methodological issues. These issues includediscount rates, environmentalexternalities. manufacturerimpact analysis. incremental analvsis and infonnation on any identifiablegroups orconsumers who may be disproportionally affected by any proposed national energy efficiency standard levels. The Department proposes.lo US8'the same analytical methods in allefficiency standard rulemakings and, therefore. the decisions on many ofthese cross-cutting issues tj:lat emerge from other rulemaking processes, such as theThree ProductAdvance Notice. are likely to be reflected in the proposed standards that will follow this Advance Notice. '

The Department is developing a general test procedurerevision which will address previously granted waivers. add

## future testing criteria and provide
test procedureclarity. This planned revision will not changethe energy consumption reporting ofany product models and will be

### promulgated priorto the effective date ofanv new standards from this rulemaking.

- II. Methodology

This section provides a brief description ofthe analysesto be used to determine the impacts ofthe standards. It

### offers an overview oftheanalytic methodology and discusses the major components ofthe analyses: the Engineering Analysis, the Manufacturer Analysis. the ConsumerAnalysis. and the Utility Analysis.

This section also discusses the interrelationships among the components that ensure consistencv throughout the analyses. "

The next section. Models, Data and Assumptions. describes the computer models used in the analyses. The models predict the anticipated response ofconsumers. manufacturers. and utilities to future changes in the
economy, including the imposition of
energy conservation standards. Quantitative estimates ofthe impacts of standards will be calculated from the outputs from the models. The models that will be utilized in the analvses are:

• EngineeringPerfonnance Models,

• ConsumerImpact Models.

• ManufacturerImpact Models. and

• Utility Impact Model. The function. data sources, assumptions and validity ofthe results for each model are discussed below.

The overall impact ofappliance conservation standards on energy use.

consumers. manufacturers. and other· factors will be detennined by**comparin~** 

### projections under the base case 2 

### with

'Thebase ca5e assumes implementation of 1!:P. conservation standards that were E.et bv tne Department oiE::crgy in the May 1991final n;I

...

### f'ederal Register / Vol. 59. No. 218'/ 

### Monday. November 14. 

### 1994 I 

### Proposed Rules 56425

the projections u

....lder the proposed standards and. perhaps. by comparing the projections ofvarious proposed standards. The possible comparison of different standard cases was one ofthe issues raised in t.'1.e Three Product Advance Notice. The analysis method chosen. based on the review ofpublic
comments on this earlier notice. as weH

as. comments received in response to today's notice. will be used in the

. development ofthe proposed standards for the products addressed by this Advance Notice.

The analysis that will be performed is made up ofthe follO\I.'ing items:

• An Engineering Analysis that establishes the technical feasibility and product attributes. mcluding costs of design options. to improve appliance efficiency.

• A Manufacturer Analysis that pro\'ides an estimate ofmanufacturers'
responses to the proposed standards. Their responses are quantified by changes in several financial performance measures. such as pricing. output and profitability etc.

• A Consumer Analysis that forecasts appliance sales. efficiencies. energy use.

consumer expenditures. and the national net benefits and costs and a separate Life Cycle Cost Analysis to evaluate the purchaser's savings in operating expenses relath'e to increases in purchase price.

• A Utility Analysis that measures the projected impacts ofthe altered energ.yconsumption patterns on electric and
gas utilities.

.

Each analysis area will be performed for each ofthe three products under consideration. The results ofthe Engineering Analysis will be reviewed by t.'1.e Department to determine whether standards for each product could yield measurable energy savings. If standards would not yield energy savings. then the analysis will be terminated. Ifenergy sa\ings are possible. then a detailed analysis is performed.

There is interaction among the Engineering. Consumer. Utility, and Manufacturer Analvses. The Engineering Analysis examines appliance designs and related attributes such as efficiency and costs. Based on the relationships between the prices and efficiencies ofdesign options. the Consumer Analysis forecasts sales and efficiencies ofnew and replacement appliances. These data are used as inputs to the Manufacturer Analysis to determine the financial impacts on prototypical firms within the industry. The Consumer Analvsis forecasts national aggregme energy savings and

consumer expenditures associated with the purchase and operation ofthe appliances. Consumer expenditures (both purchase and operation) are employed in the Life-Cycle Cost Analysis to determine consumer impacts. Changes in sales. revenues. investments. and marginal costs of utilities are calculated from the energy savings in the Utility Analysis.

Three periods oftime are used in the analyses. First. the Engineering Analysis examines the technical feasibility of improving the.efficiency ofthe covered products by analyzing design options available today to improve product efficiency. whether they are ' commercially available or prototypes. Second. the Manufacturer Analvsis is performed for a typical year after the standards are assumed to have heen imposed. Typically. the fifth year is selected. so all major impacts ofa standard would have occurred. Third. the Consumer Analysis examines impacts o'.er a time period at least as long as the average lifetimes ofthe products.

III. Models. Data. and Assumptions



### a. Engineering Performance Models and Costing Analysis

The Engineering Analysis addresses
two statutory requirements. The first requirement is that the Department consider only improvements in energy efficiency that are technologically feasible. The second is that the Department consider any lessening of utility to the consumer due to the imposition ofstandards. In addition. the Engineering Analysis provides information on efficiencies, energy consumption. manufacturing costs. and maintenance and installation costs for

use in the other analyses.

The Engineering Analysis develops
cost and efficiency data for a set of design options withm each appliance class. These data are the output ofthe engineering performance models and costing analysis discussed in subsections 5-9. below.

1. Appliance Classes

The first step in the Engineering Analysis is to segregate product types into separate classes to which different
energy conservation standards apply. Classes are differentiated by the type of
energy use (oil. natural gas. or electricity) or capacity or performancerelated features that provide utility to the consumer and affect efficiency. Classes are differentiated in order to

ensure that consumer products having different capacities or other performance-related features affecting efficiency and utility remain available to

consumers. For each ofthe three appliances. the follOWing are the classes that the Department proposes to consider. The Department welcomes comments on the proposed classes.
(i) Dishwashers Compact Dishwasher (less than 22

. inches in exterior width) Standard Dishwasher (equal to or

greater than 22 inches in eXlerior \\'idth)
(ii) Clothes Washers Compact (less than 1.6 ft 3 capacity) Standard (1.6 ft 3 or greater capacity)

(iii) Clothes Dryers

Electric. Standard (4.4 ft 3 or greater

capacity) Electric. Compact. 120\' (less than 4.4

ft 3 capacity) Electric. Compact. 240v (less than 4.4

ft 3 capacity) Gas. Standard (4.4 ft 3 or greater

capacity)

. Gas. Compact (less than 4.4 ft 3 capacityl

In the case ofclothes washers. the Department is proposing to eliminate certain previously defined classifications (Semi-Automatic TopLoading. Front-Loading and Suds Saving) because they do notoffer any added utility which is inherently less
energy efficient and therefore would require protection from the energy conservation standards. In the May 1991 final rule. these classes were not subject
to a minimum energy conservation standard imposed because they represented a small portion ofthe market. and due to a lack ofadequate information the Department did not analyze them. However. the 1988 standard requiring an unheated rinse option is still applicable to these classes. The Department has further reviewed this topic and believes that these products should be subject to the minimum energy conservation standards applicable to either compact

or standard clothes washers. The Department welcomes comments on this issue.

2. Baseline Units

For the purpose ofgenerating a cost! efficiency relationship, the Engineenng Analysis needs to define a starting point

or baseline. The assumed baseline unit is to represent a typical model within an appliance class sold during the initial
year ofthe analysis. e.g

.. a unit that minimally exceeds the existing standard. Once identified. each baseline

J The energy factor is a n:easurement ofenergy efficiency derh'ed from the DepanmE'n! ofEnerg, lest procedure for that product. 

### F'ederal Register I 

### Vol. 59. No. 218', 

### Monday. November 14. 

### 1994

, Proposed Rules 56425

the projections uIlderthe proposed standards and. perhaps.bycomparing the projections ofvarious proposed standards. The possible comparison of different standard cases was one ofthe issues raised in t.'1.e Three Product Advance Notice. Theanalysis method chosen. based on the review ofpublic
comments on this earliernotice. as weH



### as. commentsreceh'ed inresponse to today's notice. willbe used inthe

. development ofthe proposed standards for the products addressedbythis Advance Notice.

The analysisthatwill be performed is made up ofthe foUO\\,'ing items:

• An Engineering Analysis that establishes the technical feasibility and product attributes. mcludingcosts of design options. to improve appliance efficiency.

• A ManufacturerAnaiysis that pro\'ides an estimate ofmanufacturers'
responses to the proposed standards. Their responses are quantified by changes in several financial performance measures. such as pricing. output and profitability etc.

• A Consumer AnalYsis that forecasts appliance sales. efficiencies. energy use.

consumerexpenditures. and the national net benefits andcosts and a separate Life Cycle Cost Ana1ysis to evaluate thepurchaser's savings in operating expenses relath'e to increases in purchase price.

• A Utility Analysis that measures the projected impacts ofthe altered energ.yconsumption patterns on electric and
gas utilities.

.

Each analysis area wiil be performed for each ofthe three productsunder consideration. The results ofthe Engineering Analysis will be reviewed by tb.e Department to determine whether standards for each product could yield measurable energy savings. Ifstandards would not yield energy savings. then the analysis will be terminated. Ifenergy sa\ings are possible. then a detailed analysis is performed.

There is interaction among the Engineering. Consumer. Utility. and ManufacturerAnalyses. The Engineering Analysis examines appliance designs and related attributes such as efficiency and costs. Based on the relationships between the prices and efficiencies ofdesign options. the Consumer Analysis forecasts sales and efficiencies ofnew and replacement appliances. These data are used as inputs to the ManufacturerAnalysis to determine the financial impacts on prototypical firms within the industry. The ConsumerAnalvsis forecasts national aggregate energy savings and

consumerexpenditures associated with the purchase and operation ofthe appliances. Consumerexpenditures (both purchaseand operation) are employed inthe Life-Cycle Cost Analysisto determine consumer impacts. Changes in sales. revenues. investments. and marginal costs of utilities are calculated from the energy savings in the Utility Analysis.

Three periodsoftime are used in the analyses. First. the Engineering Analysis examinesthetechnical feasibility of improving the.efficiency ofthe covered productsby analyzing design options available today to improve product efficiency. whetherthey are

. commerciallyavailable or prototypes. Second. the ManufacturerAnalvsis is performed for a typical year afterthe standards are assumed to havebeen imposed. Typically. the fifth yearis selected. so all majorimpacts ofa standard would have occurred. Third. theConsumer Analysis examines impacts o'.er a time period at least as long as the average lifetimes ofthe products.

III. Models. Data. and Assumptions



### a. Engineering Performance Models and CostingAnalysis

The Engineering Anairsis addresses
two statutoryrequirements. The first requirement is that the Department consideronly improvements in energy efficiency that are technologically feasible. The second is thatthe Department considerany lessening of utilityto theconsumerdue to the imposition ofstandards. In addition. the Engineering Analysis provides information onefficiencies, energy consumption. manufacturing costs. and maintenance and installation costs for

use in the other analyses.

The Engineering Analysis develops
cost and efficiency data for a set of design options withm each appliance class. These data are the output ofthe engineering performance models and costing analysis discussed in subsections 5-9.below.

1. Appliance Classes

The first step in the Engineering Analysisisto segregate product types into separate classes to which different
energy conservation standards apply. Classes are differentiatedbythetypeof
energy use (oil. naturalgas. or electricity) orcapacity or performancerelated features that provideutility to the consumerand affect efficiency. Classes are differentiated in orderto

ensure that consumer products having different capacities or other performance-related features affecting efficiency and utility remain available to

consumers. Foreachofthe three appliances. the follOWing arethe classesthat the Department proposesto consider. The Department welcomes comments on the proposed classes.
(i) Dishwashers Compact Dishwasher (less than 22

. inchesin exteriorwidth) StandardDishwasher (equal to or

greaterthan 22 inches in exterior \\'idth)
(ii) Clothes Washers Compact (less than 1.6 

### ft 3 capacity) Standard (1.6 

### ft 3 orgreater capacity)
(iii) Clothes Dryers

Electric. Standard (4.4 ft 1 orgreater

capacity) Electric. Compact. 120\' (less than 4.4



### ft 3 capacity) Electric. Compact. 240v (less than 4.4



### ft 3 capacity) Gas. Standard (4.4 

### ft 3 or greater

capacity)

. Gas, Compact (less than 4.4 ft 3 capacityl

In thecase ofclothes washers, the Departmentis proposing to eliminate certain previously defined classifications (Semi-AutomaticTopLoading. Front-Loading and Suds Saving) because they do not offer any added utility which is inherently less
energy efficient and therefore would require protection from the energy conservation standards. In the May 1991 final rule. theseclasses were not subject
to a minimum energy conservation standard imposed because they represented a small portion ofthe market. and due to a lack ofadequate information the Department did not anaivze them. However. the 1988 standard requiring an unheated rinse option is still applicable to these classes. The Department has further reviewed this topic and believes that these products shouldbe subject to the minimum energy conservation standards applicable to eithercompact

or standard clothes washers. The Department welcomes comments on this issue.

2. Baseline Units

Forthe purpose ofgenerating a cost! efficiency relationship, the Engineering Analysis needs to define a starting point

orbaseline. The assumedbaseline unit isto represent a typical model within an appliance class sold during the initial
yearofthe analysis. e.g

.. a unit that minimally exceedstheexisting standard. Once identified. each baseline

J Theenergy factor is a n:easurement ofenergy efficiency derh'ed from the DepanmE'n! ofEnerg,
test procedure for that product. 

### F'ederal Register I 

### Vol. 59. No. 218', 

### Monday. November 14. 

### 1994

, Proposed Rules 56425

the projections uIlderthe proposed standards and. perhaps.bycomparing the projections ofvarious proposed standards. The possible comparison of different standard cases was one ofthe issues raised in t.'1.e Three Product Advance Notice. Theanalysis method chosen. based on the review ofpublic
comments on this earliernotice. as weH



### as. commentsreceh'ed inresponse to today's notice. willbe used inthe

. development ofthe proposed standards for the products addressedbythis Advance Notice.

The analysisthatwill be performed is made up ofthe foUO\\,'ing items:

• An Engineering Analysis that establishes the technical feasibility and product attributes. mcludingcosts of design options. to improve appliance efficiency.

• A ManufacturerAnaiysis that pro\'ides an estimate ofmanufacturers'
responses to the proposed standards. Their responses are quantified by changes in several financial performance measures. such as pricing. output and profitability etc.

• A Consumer AnalYsis that forecasts appliance sales. efficiencies. energy use.

consumerexpenditures. and the national net benefits andcosts and a separate Life Cycle Cost Ana1ysis to evaluate thepurchaser's savings in operating expenses relath'e to increases in purchase price.

• A Utility Analysis that measures the projected impacts ofthe altered energ.yconsumption patterns on electric and
gas utilities.

.

Each analysis area wiil be performed for each ofthe three productsunder consideration. The results ofthe Engineering Analysis will be reviewed by tb.e Department to determine whether standards for each product could yield measurable energy savings. Ifstandards would not yield energy savings. then the analysis will be terminated. Ifenergy sa\ings are possible. then a detailed analysis is performed.

There is interaction among the Engineering. Consumer. Utility. and ManufacturerAnalyses. The Engineering Analysis examines appliance designs and related attributes such as efficiency and costs. Based on the relationships between the prices and efficiencies ofdesign options. the Consumer Analysis forecasts sales and efficiencies ofnew and replacement appliances. These data are used as inputs to the ManufacturerAnalysis to determine the financial impacts on prototypical firms within the industry. The ConsumerAnalvsis forecasts national aggregate energy savings and

consumerexpenditures associated with the purchase and operation ofthe appliances. Consumerexpenditures (both purchaseand operation) are employed inthe Life-Cycle Cost Analysisto determine consumer impacts. Changes in sales. revenues. investments. and marginal costs of utilities are calculated from the energy savings in the Utility Analysis.

Three periodsoftime are used in the analyses. First. the Engineering Analysis examinesthetechnical feasibility of improving the.efficiency ofthe covered productsby analyzing design options available today to improve product efficiency. whetherthey are

. commerciallyavailable or prototypes. Second. the ManufacturerAnalvsis is performed for a typical year afterthe standards are assumed to havebeen imposed. Typically. the fifth yearis selected. so all majorimpacts ofa standard would have occurred. Third. theConsumer Analysis examines impacts o'.er a time period at least as long as the average lifetimes ofthe products.

III. Models. Data. and Assumptions



### a. Engineering Performance Models and CostingAnalysis

The Engineering Anairsis addresses
two statutoryrequirements. The first requirement is that the Department consideronly improvements in energy efficiency that are technologically feasible. The second is thatthe Department considerany lessening of utilityto theconsumerdue to the imposition ofstandards. In addition. the Engineering Analysis provides information onefficiencies, energy consumption. manufacturing costs. and maintenance and installation costs for

use in the other analyses.

The Engineering Analysis develops
cost and efficiency data for a set of design options withm each appliance class. These data are the output ofthe engineering performance models and costing analysis discussed in subsections 5-9.below.

1. Appliance Classes

The first step in the Engineering Analysisisto segregate product types into separate classes to which different
energy conservation standards apply. Classes are differentiatedbythetypeof
energy use (oil. naturalgas. or electricity) orcapacity or performancerelated features that provideutility to the consumerand affect efficiency. Classes are differentiated in orderto

ensure that consumer products having different capacities or other performance-related features affecting efficiency and utility remain available to

consumers. Foreachofthe three appliances. the follOWing arethe classesthat the Department proposesto consider. The Department welcomes comments on the proposed classes.
(i) Dishwashers Compact Dishwasher (less than 22

. inchesin exteriorwidth) StandardDishwasher (equal to or

greaterthan 22 inches in exterior \\'idth)
(ii) Clothes Washers Compact (less than 1.6 

### ft 3 capacity) Standard (1.6 

### ft 3 orgreater capacity)
(iii) Clothes Dryers

Electric. Standard (4.4 ft 1 orgreater

capacity) Electric. Compact. 120\' (less than 4.4



### ft 3 capacity) Electric. Compact. 240v (less than 4.4



### ft 3 capacity) Gas. Standard (4.4 

### ft 3 or greater

capacity)

. Gas, Compact (less than 4.4 ft 3 capacityl

In thecase ofclothes washers, the Departmentis proposing to eliminate certain previously defined classifications (Semi-AutomaticTopLoading. Front-Loading and Suds Saving) because they do not offer any added utility which is inherently less
energy efficient and therefore would require protection from the energy conservation standards. In the May 1991 final rule. theseclasses were not subject
to a minimum energy conservation standard imposed because they represented a small portion ofthe market. and due to a lack ofadequate information the Department did not anaivze them. However. the 1988 standard requiring an unheated rinse option is still applicable to these classes. The Department has further reviewed this topic and believes that these products shouldbe subject to the minimum energy conservation standards applicable to eithercompact

or standard clothes washers. The Department welcomes comments on this issue.

2. Baseline Units

Forthe purpose ofgenerating a cost! efficiency relationship, the Engineering Analysis needs to define a starting point

orbaseline. The assumedbaseline unit isto represent a typical model within an appliance class sold during the initial
yearofthe analysis. e.g

.. a unit that minimally exceedstheexisting standard. Once identified. each baseline

J Theenergy factor is a n:easurement ofenergy efficiency derh'ed from the DepanmE'n! ofEnerg,
test procedure for that product.

### 56426 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday, November 14; 1994 I 

### Proposed Rules . I



### unit is characterized by its efficiencyrelated design options. The Engineering Analysis uses information gathered from trade organizations, manufacturers, and consultants with expertise in specific product types to determine the engineering characteristics ofthe baseline unit. The Department requests data on specific units and combinations ofdesign'options to be 

### considered as a baseline unit. In 

### addition, the Department requests comments on any other factors to be 

### considered in selecting baseline units.

3. Design Options

The Engineering Analysis will identify an individual design option or combinations ofdesign options with a potential for improving energy efficiency. Design options that are currently on the market, that are being developed, or that may be on the market bv the time standards are effective will 

# be considered. Furthermore. the Department requests comments on whether the existing test procedures are appropriate for measuring product
energy use and efficiency and whether the test procedure can evaluate a particular design option's contribution
to the product's energy consumption.

In addition to proposing a credit for

more efficient water extraction in the

. clothes washer test procedure, the Department may consider a two tier
energy conservation standard for clothes washers. One standard would be the

same as the existing performance standard for clothes washers and the second standard would require a minimum water extraction. The Department believes that mechanical
water extraction is much more cost cffective than thermal extraction. If

### the Department were to propose this two tier standard. then the analvsis for the clothes tiryer standard would consider the impact ofdrier clothes entering the clothes dryer. The Department welcomes comments on this 

### issue.

The Department requests comments

on both the design options listedbelow and the applicability ofthe extant or proposed test procedure. The following is a list ofdesign options that will be 

### examined: 

### (0 Dishwashers

Energy Savings Options for Water Reduction: (A) Improved food filter (B) Improved spray arm geometry (C) Improved fill control (D) Modified sump geometry with &



### without dual pumps (E) Microprocessor controls and fuzzy

logic (algorithm logic bllsed on sensor input) Other Energy Saving Options: (F) Reduce<t inlet water temperature (G) Improved motor efficiency (H) Increased insulation (I) 

### Flow-thru heating (J) 

### Ultrasonic washing

(ii) 

### Clothes Washers (A) Improved fill control

. (B) Configuration/tolerance ofinner and

outertubs to reduce water use (C) Reduce thermal mass (D) Added Insulation (E) Increasemotor efficiency (F) Thermostatically controiled mixing

valves (G) Electrolytic dissociation ofwater (H) Ultrasonic washing (I) 

### Higher spin speed (J) 

### Horizontal axis design (K) 

### Bubble action (L) Microprocessor controls and fuzzy

logic (algorithm logic based on sensor

. input) (M) Ozonated laundering (N) Suds saving (0) Direct drive motor
(iii) 

### Clothes Dryers (A) Automatic termination (B) Increased insulation (C) Recycle exhaust heat (D) Inlet air preheat (E) Inlet airpreheat. condensing mode (F) Modified operating conditions (G) Heat pump (H) Microwave (I) 

### Reverse tumble feature (J) 

### ?nproved rib design to reduce drying



### hme

4. 

### Maximum Technologically Feasible Designs

The Act requires that, in considering
any new or amended standards, the Department must consider those that "shall be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified" (section 325(l}(2)(A)). As a first step, the maximum technologically feasible level will be identified. The maximum technologically feasible level is one that

can be carried out by the addition of
energy efficient design improvements to the baseline units without affecting the product's utility. The Depa.'1ment

. believes that the design options comprising the maximum technologically feasible level must have been physically demonstrated in at least

a prototype form to be considered technologically feasible.

5. 

### Performance Models

In the Engineering Analysis. the Department's estimate ofthe efficiency ofvarious design options and combination ofdesign options will be 

### based on eithercalculation (e.g., computer simulation models) or experimental data based on the Department's test procedures. The Depart.TDent requests test data on the

. efficiency ofthe various design options and information on possible simulation models for use in this rulemaking.

6. Costing Analysis

Manufacturer cost data for baseline units and incremental costs for design improvements are requested. The cost data requested include, for each design option. incremental cost data disaggregated into labor. purchased parts. materials. shipping/packaging. and tooling. Also requested are any additional consumer installation or maintenance costs resulting from the design improvements.

7. 

### Price-Efficiency Relationships

The results ofthe Engineering Analysis are summarized in the costefficiency relationships that show the efficiency. unit energy consumption. and manufacturer cost ofeach design option and combination ofdesign options for each appliance class. Manufacturer and dealer markups obtained from the Manufacturer 1moact Analysis are applied to the • manufacturing costs to determine the purchase price ofthe appliance. The price-efficiency relationships are a . fundamental input to the Consumer Analysis.

8. Data Sources

Shipments data. costs ofpurchased materials and parts. and engineering and labor cost data will be based on available information, including information received in comments on this Advance Notice ofProposed Rulemaking and collected from industry

sources.
9. Outputs From the Engineering Analysis

For each combination of design options considered. the models and data provide:

• Energy efficiency (expressed as the Department's energy factor),3

• Annual energy consumption per unit (based on the Department's test procedures).

• Increased material. purchased parts. labor. and investment costs for medium -I 

### and large manufacturers bv product class,

-

• As was tne case with previo\l.S analpes. smail manufacturers will not be analyzed separately. No general manufacturing approach could be identified for these firms because ofthe wide \'ariabiJily in 

### 56426 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday, November 14; 1994 I 

### Proposed 

### Rules

unit is characterizedby itsefficiencyrelated design options. The Engineering Analysisuses information gathered from trade organizations, manufacturers, and consultants with expertisein specific product types to determine the engineering characteristics ofthe baseline unit. The Department requests data on specificunits and combinations ofdesign'optionsto 

### be considered as a baseline unit. Inaddition, the Department requests comments on any other factors to 

### be considered in selecting baseline units.

3. Design Options

The EngineeringAnalysis will identify an individual design option or combinations ofdesign options with a potential for improving energy efficiency. Design optionsthat are currently onthe market, that are being developed, orthat may be onthe market bv the time standards are effective will 

# be considered. Furthermore, the Department requests comments on whether the existing test procedures are appropriate for measuring product
energy use and efficiency andwhether the test procedure can evaluate a particular design option's contribution
to the product's energy consumption.

In addition to proposing a credit for

more efficient waterextraction in the

. clothes washertest procedure, the Department may considera two tier
energy conservation standard for clothes washers. One standard wouldbe the

same as the existing performance standard for clothes washers and the second standard would require a minimum waterextraction. The Department believes thatmechanical
water extraction is much more cost effective than thermal extraction. Ifthe Department were to propose this two tier standard. then the analvsis for the clothes uryer standard wouldconsider the impact ofdrierclothesentering the clothes dryer. The Department welcomes comments on this issue.

The Department requests comments

onboth the design options listedbelow and the applicability ofthe extant or proposed test procedure. The following is a list ofdesign options that will 

### be examined: 

### (0 Dishwashers

Energy Savings Options for Water Reduction: (A) Improved food filter (B) Improved spray arm geometry (C) Improved fill control (D) Modified sump geometry with &

without dual pumps (E) Microprocessor controls and fuzzy

Jogic (algorithm logic bllsed on sensor input) OtherEnergy Saving Options: (F) Reduce<t inletwater temperature (G) Improved motorefficiency (H) Increasedinsulation (I) Flow-thru heating (J) Ultrasonic washing

(ii) Clothes Washers (A) Improved fill control

. (B) Configuration/tolerance ofinnerand

outertubs toreduce wateruse (Cl Reduce thermal mass (D) Added Insulation (E) Increasemotorefficiency (F) Thermostatically controiled mixing

valves (G) Electrolytic dissociation ofwater (H) Ultrasonic washing (I) Higher spin speed (J) Horizontal axis design (K) Bubble action (L) Microprocessor controls and fuzzy

logic (algorithm logic based on sensor

. input) (M) Ozonated laundering (N) Suds saving (0) Direct drive motor
(iii) Clothes Dryers (A) Automatic termination (B) Increased insulation (C) Recycle exhaust heat (D) Inlet air preheat (E) Inlet airpreheat, condensingmode (F) Modified operating conditions (G) Heat pump (H) Microwave (I) Reverse tumble feature (J) ?nprovedrib design to reduce drying



### hme

4. Maximum Technologically Feasible Designs

The Act requires that. in considering
any new or amended standards, the Department must considerthose that "shallbe designed to achieve the maximum improvement in energy efficiency thatthe Secretary determines is technologically feasible and economicallyjustified" (section 325(l)(2)(A)). As a first step, the maximum technologically feasible level willbe identified. The maximum technologically feasible level is one that

canbe carried outbythe addition of
energy efficient design improvements to the baseline units without affecting the product's utility. The Depa.'1lllent

. believes that the design options comprising the maximum technologically feasible level must have been physically demonstrated in at least

a prototype form to be considered technologically feasible.

5. Performance Models

In the EngineeringAnalysis, the Department's estimate ofthe efficiency ofvarious design options and combination ofdesign options will 

### be based on eithercalculation (e.g., computersimulation models) or experimental data based on the Department's test procedures. The Depart.Tflent requests test data onthe

. efficiency ofthe various design options and information onpossible simulation models for use in this rulemaking.

6. Costing Analysis

Manufacturer cost data for baseline units and incremental costs for design improvements 

### are requested. The cost data requested include, for each design option. incremental cost data disaggregated into labor. purchased parts. materiais. shipping/packaging. and tooling. Also requested are any additional consumerinstallation or maintenance costsresulting from the design improvements.

7. Price-Efficiency Relationships

Theresults ofthe Engineering Analysis are summarized inthe costefficiency relationships that show the efficiency. unit energy consumption. andmanufacturercost ofeach design option and combination ofdesign options for each appliance class. Manufacturer and dealermarkups obtained from the Manufacturer 1moact Analysis 

### are applied to the ' manufacturing costs to determine the purchase price ofthe appliance. The price-efficiency relationships are a . fundamental input to the Consumer Analysis.

8. Data Sources

Shipments data. costs ofpurchased materials and parts, and engineering and labor cost data will be based on available information, including information received in comments on this Advance Notice ofProposed Rulemaking 

### and collected from industry

sources.

9. Outputs From the Engineering Analysis

For each combination of design options considered. the models and data provide:

• Energy efficiency (expressed as the Department's energy factor),3

• Annual energy consumption per unit (based on the Department'stest procedures),

• Increased material. purchased parts. Jabor. and investment costs for medium 0\ and large manufacturers bv product class.

-

• As was tile case with previou.s analpes. smail manufacturers will not be analyzed separately. No general manufacturing approach could be identified for these firms because ofthe wide \'ariability in 

# .. 56426 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday, November 14; 1994 I 

### Proposed 

### Rules

unit is characterizedby itsefficiencyrelated design options. The Engineering Analysisuses information gathered from trade organizations, manufacturers, and consultants with expertisein specific product types to determine the engineering characteristics ofthe baseline unit. The Department requests data on specificunits and combinations ofdesign'optionsto 

### be considered as a baseline unit. Inaddition, the Department requests comments on any other factors to 

### be considered in selecting baseline units.

3. Design Options

The EngineeringAnalysis will identify an individual design option or combinations ofdesign options with a potential for improving energy efficiency. Design optionsthat are currently onthe market, that are being developed, orthat may be onthe market bv the time standards are effective will 

# be considered. Furthermore, the Department requests comments on whether the existing test procedures are appropriate for measuring product
energy use and efficiency andwhether the test procedure can evaluate a particular design option's contribution
to the product's energy consumption.

In addition to proposing a credit for

more efficient waterextraction in the

. clothes washertest procedure, the Department may considera two tier
energy conservation standard for clothes washers. One standard wouldbe the

same as the existing performance standard for clothes washers and the second standard would require a minimum waterextraction. The Department believes thatmechanical
water extraction is much more cost effective than thermal extraction. Ifthe Department were to propose this two tier standard. then the analvsis for the clothes uryer standard wouldconsider the impact ofdrierclothesentering the clothes dryer. The Department welcomes comments on this issue.

The Department requests comments

onboth the design options listedbelow and the applicability ofthe extant or proposed test procedure. The following is a list ofdesign options that will 

### be examined: 

### (0 Dishwashers

Energy Savings Options for Water Reduction: (A) Improved food filter (B) Improved spray arm geometry (C) Improved fill control (D) Modified sump geometry with &

without dual pumps (E) Microprocessor controls and fuzzy

Jogic (algorithm logic bllsed on sensor input) OtherEnergy Saving Options: (F) Reduce<t inletwater temperature (G) Improved motorefficiency (H) Increasedinsulation (I) Flow-thru heating (J) Ultrasonic washing

(ii) Clothes Washers (A) Improved fill control

. (B) Configuration/tolerance ofinnerand

outertubs toreduce wateruse (Cl Reduce thermal mass (D) Added Insulation (E) Increasemotorefficiency (F) Thermostatically controiled mixing

valves (G) Electrolytic dissociation ofwater (H) Ultrasonic washing (I) Higher spin speed (J) Horizontal axis design (K) Bubble action (L) Microprocessor controls and fuzzy

logic (algorithm logic based on sensor

. input) (M) Ozonated laundering (N) Suds saving (0) Direct drive motor
(iii) Clothes Dryers (A) Automatic termination (B) Increased insulation (C) Recycle exhaust heat (D) Inlet air preheat (E) Inlet airpreheat, condensingmode (F) Modified operating conditions (G) Heat pump (H) Microwave (I) Reverse tumble feature (J) ?nprovedrib design to reduce drying



### hme

4. Maximum Technologically Feasible Designs

The Act requires that. in considering
any new or amended standards, the Department must considerthose that "shallbe designed to achieve the maximum improvement in energy efficiency thatthe Secretary determines is technologically feasible and economicallyjustified" (section 325(l)(2)(A)). As a first step, the maximum technologically feasible level willbe identified. The maximum technologically feasible level is one that

canbe carried outbythe addition of
energy efficient design improvements to the baseline units without affecting the product's utility. The Depa.'1lllent

. believes that the design options comprising the maximum technologically feasible level must have been physically demonstrated in at least

a prototype form to be considered technologically feasible.

5. Performance Models

In the EngineeringAnalysis, the Department's estimate ofthe efficiency ofvarious design options and combination ofdesign options will 

### be based on eithercalculation (e.g., computersimulation models) or experimental data based on the Department's test procedures. The Depart.Tflent requests test data onthe

. efficiency ofthe various design options and information onpossible simulation models for use in this rulemaking.

6. Costing Analysis

Manufacturer cost data for baseline units and incremental costs for design improvements 

### are requested. The cost data requested include, for each design option. incremental cost data disaggregated into labor. purchased parts. materiais. shipping/packaging. and tooling. Also requested are any additional consumerinstallation or maintenance costsresulting from the design improvements.

7. Price-Efficiency Relationships

Theresults ofthe Engineering Analysis are summarized inthe costefficiency relationships that show the efficiency. unit energy consumption. andmanufacturercost ofeach design option and combination ofdesign options for each appliance class. Manufacturer and dealermarkups obtained from the Manufacturer 1moact Analysis 

### are applied to the ' manufacturing costs to determine the purchase price ofthe appliance. The price-efficiency relationships are a . fundamental input to the Consumer Analysis.

8. Data Sources

Shipments data. costs ofpurchased materials and parts, and engineering and labor cost data will be based on available information, including information received in comments on this Advance Notice ofProposed Rulemaking 

### and collected from industry

sources.

9. Outputs From the Engineering Analysis

For each combination of design options considered. the models and data provide:

• Energy efficiency (expressed as the Department's energy factor),3

• Annual energy consumption per unit (based on the Department'stest procedures),

• Increased material. purchased parts. Jabor. and investment costs for medium 0\ and large manufacturers bv product class.

-

• As was tile case with previou.s analpes. smail manufacturers will not be analyzed separately. No general manufacturing approach could be identified for these firms because ofthe wide \'ariability in 

# ..

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. November 14. 1994 / Proposed Rules 56427

• The relationship between cost and efficiency level by product class. and

• Other information on product characteristics. such as lifetimes. maintenance costs and installation
costs.


### b. ResidentialEnergyModels

The Department has used the Lawrence Berkeley Laboratory Residential Energy Model (LBL-REM) in the analysis and reanalysis for

numerous Department rulemakings. The DeparL-nent has considered replacing the LBL-REM with the Electric Power Research Institute's REEPS model and is presently analyzing it for the Three Prociact Advance Notice ruleniaking. The Department expects to use the analvtical method chosen for that rulemaking in the analysis for this rulemaking. The Department welcomes
comments on this approach. Below is a description ofboth models.

1. Lawrence Berkelev Laboratorv Residential Energy Model

-

The LBL-REM forecasts the appliance purchase choices that households make

as well as their subsequent appliance
usage behavior and energy consumption. The model uses engineering estimates ofthe characteristics ofparticular designs of appliances and calculates the national impacts ofa technology-specific policy

on the populations ofappliances used in Ll-te households. Alternative designs

are characterized by price and efficiency. The output from the LBLRE.\1 provides estimates ofnational
energy savings and consumer economic impacts (including equipment and operating expenses).

Engineering. economic. and demographic data are used in the LBLREM. The engineering data for appliances include the price-eft1ciency relationships described above_ Additional data include information regarding alternative building shell constrnction measures and costs. unit
energy consumption and efficiency of existing appliances. age distribution of existing appliance stock. and retirement functions. Economic data include projected energy prices 5 and household income. models ofenergy investment. appliance purchase and usage behavior. including fuel and technology choice for each end use. Demographic data include

their approach to manufacturing. Therefore. small manufacturers' costs have been assumed to equal those ofmedium manufacturers. The Deparanent**p.ncoura~es** smail manufacturers to submit data.

• The"projections ofenergy prices will be taken !rom the most recent Annual Enerf{Y Outlook. a puolication ofthe Departrnp.nt's Energy Information ,\dminislration. number ofhouseholds by type• projected housing starts and demolitions. and initial aooliance holdings.



### Structure of the model. The LBL-REM segments annual energy consumption into house types. end uses. and fuel types. The house types are singlefamilv. multifamilv. and mobile homes. Calculations are performed separately for existing and new housing construction each year over the period 1980-2030. The end uses are space heating (including room and central). air conditioning (room. central conventional. and central heat pump).
water heating. refrigeration. cooking. clothes drying. lighting. clothes washing. dishwashing. pool heating. televisions and miscellaneous. Up to four fuels are considered. as appropriate
to each end use: electricity, natural gas. heating oil. and liquid petroleum gas. The model exists in two versions: national (one region) and regional (10 Federal regions). Since usage ofcleaning products is not likely to differ by geographic location. the national version will be utilized in this analvsis.

The model projects five types of

. activities: technology/fuel choice: building shell thermal integrity choice: appliance efficiency choice: usage behavior; and turnover ofbuildings and appliances.



### Housing stock submodel. This submodel generates data about housing stock projections for the LBL-REM. The number ofoccupied households. by type. is taken from the 1990 Census of Population and Housing. An exogenous projection for housing starts is obtained. and estimates ofprojected demolition
rates by house type are calculated. assuming an exponential function. The housing submodel determines the

. projected housing stock each year. .1981-2030. by subtracting demolitions from existing stock. then adding starts. The annual demolition rates bv house type will be calculated for single-family. multifamily. and mobile homes. respectively.



### Efficiency choice algorithm. Historical efficiency data are available primarily from trade associations for selected
years for each class ofappliance through
at least 1992. The Federal energy conservation standards for new units of these appliances are expected to be met by the effective date ofthe standard. After that date. future efficiency improvements are assumed to be a function ofdesigns available (according
to the engineering analysis) and of relevant energy prices. The forecasting algorithm is designed to allow annual
average efficiency or shipment-weighted efficiency factors to increase ifeither more efficient designs become a\'ailable
at lower prices or energy prices increase. Conversely. ifenergy prices decrease. the shipment-weighted efficiency factors may decline. but would have a lower bound at the existing standard level. i.e•• the 1991 standard preScribed by the Department. effective 1994. for dishwashers. clothes washers and dothesdryers.

.



### Thermal integrity. Toe-LBL-REM addresses thermal integrity as an input into the model for conducting analysis

on appliances which affect a dwelling's cooling or heating load. The Department believes that thermal integrity will not be a factor in the analysis for t.l-J.e three cleaning products. The Department welcomes comments on this assumption.

.



### Modeling efficiencystandards, The LBL-REM projects the average efficiency ofnew products; for example. clothes dryers purchased each year in the absence ofadditional Federal regulations. A distribution of efficiencies is constrncted around the a\l6rage based on efficiency distributions observed in the marketplace. This information includes information from industrv sources and published data from the industry trade associations. A new Federal standard level eliminates part ofthe distribution: therefore. a new distribution is constructed. The new shipmentweighted average efficiency then characterizes the efficiency ofne\\' units in that year. The same process is applied to all years after implementation ofthe standard. The model is then run again for the standards case6 with the adjusted
average efficiencies to calculate any changes in market shares or usage behavior that may occur as a result of standards and to calculate the net energy savings. 

### Turnover ojappliance stocks. The initial age distribution ofappliances in stock is based on industry data about historical annual shipments. The fraction ofeach product that retires each
year is based on the number of**y~ars** since purchase ofthe product. For each year's purchase. the model associates an average efficiency. so that when older appliances are retired. they are also recognized as less efficient. All appliance replacements are included in the retirement function. including those resulting for reasons other than product failure. However. the analysis does not explicitly consider the effect of increased purchase price on the
turnover rate. The Department requests

oThe standards case reiers to a time period when

a potenrial new standard has been implemen!pd. 

### Federal Register I 

### Vol. 59, No. 218 I 

### Monday. November 14. 1994 / Proposed Rules 56427

• Therelationship between cost and efficiency level by productclass, and

• Otherinformation on product characteristics. such as lifetimes, maintenance costs and installation
costs.


### b. ResidentialEnergyModels

The Department has used the Lawrence Berkeley Laboratory Residential Energy Model (LBL-REM) in the analysis andreanalysis for

numerous Department rulemakings. The DeparL-nent has considered replacing the LBL-REM with the Electric Power Research Institute's REEPS model and is presently analyzing it for theThree Prociact Advance Notice ruleniaking. The Departmentexpects to usethe analvtical method chosen for that rulemaking in the analysis for this rulemaking. The Department welcomes
comments on this approach. Below is a description ofboth models.

1. Lawrence Berkelev Laboratorv Residential Energy Model

.

The LBL-REM forecasts the appliance purchase choices that households make

as well as their subsequent appliance
usage behavior and energy consumption. The model uses engineering estimates ofthe characteristics ofparticulardesigns of appliances andcalculates the national impacts ofa technology-specific policy

on the populations ofappliances used in Ll-te households. Alternative designs

are characterized by price and efficiency. The output from the LBLRE.\1 provides estimates ofnational
energy savings and consumereconomic impacts (including equipment and operating expenses).

Engineering. economic. and demographic data are used in the LBLREM. The engineering data for appliances include the price-eftlciency relationships described above_ Additional data include information regarding alternative building shell construction measures and costs, unit
energy consumption and efficiency of existing appliances. age distribution of existing appliance stock. and retirement functions. Economic data include projected energy prices 5 and household income. models ofenergy investment. appliance purchase and usage behavior. including fuel and technology choice for each end use. Demographic data include

their approach to manufacturing. Therefore. small manufacturers' costs have been assumed to equal those ofmedium manufacturers. The Department**p.ncoura~es** smail manufacturers to submit data.

• The"projections ofenergy prices will be taken !rom the most recent Annual Energy Outlook. a puolication ofthe DepartmP.nt's Energy Information ,\dministration. number ofhouseholds by type

. projected housing starts and demolitions. and initial aooliance holdings.

Structure 

### of the mode/. The LBL-REM segments annual energy consumption into house types. enduses. and fuel types. The house types are singlefamilv. multifamilv. and mobile homes. Calculations are performed separately for existing and new housing construction each year overthe period 1980-2030. The end uses are space heating (including room and central). air conditioning (room. central conventional. and central heat pump).
water heating. refrigeration. cooking. clothes drying. lighting. clothes washing. dishwashing. pool heating. televisions and miscellaneous. Up to four fuels are considered. as appropriate
to each enduse: electricity, natural gas. heating oil. and liquid petroleum gas. The model exists in two versions: national (one region) andregional (10 Federal regions). Since usage ofcleaning products is not likelyto differ by geographic location. the national version will beutilized in this analvsis.

The model projects five types of

- activities: technology/fuel choice: building shell thermal integrity choice: applianceefficiency choice; usage behavior; and turnover ofbuildings and appliances.



### Housing stock submodeJ. This submodel generates data about housing stock projections for the LBL-REM. The number ofoccupied households, by type. is taken from the 1990 Census of Population and Housing. An exogenous projection for housing starts is obtained. and estimates ofprojected demolition
rates by house type are calculated. assuming an exponential function. The housing submodel determines the

,projected housing stock each year. ,1981-2030. by subtracting demolitions from existing stock. then adding starts. The annual demolition rates bv house type willbe calculated for single-family. multifamily. and mobile homes. respectively.



### Efficiencychoice algOrithm. Historical efficiency data are available primarily from trade associations for selected
years for each class ofappliance through
at least 1992. The Federal energy conservation standards for new units of these appliances are expected to be met by the effective date ofthe standard. After that date. future efficiency improvements are assumed to be a function ofdesigns available (according
to the engineering analysis) and of relevant energy prices. The forecasting algorithm is designed to allow annual
average efficiency orshipment-weighted efficiency factors to increase ifeither more efficient designsbecome a\'ailable
at lower prices orenergy prices increase. Conversely. ifenergy prices decrease. the shipment-weighted efficiency factors may decline. but would have a lowerbound at the existing standard level. i.e., the 1991 standard preScribedbythe Department. effective 1994. for dishwashers. clothes washers and clothes dryers.

.



### Thermal integrity. Tlie-LBL-REM addresses thermal integrity as an input into the model for conducting analysis

on appliances which affect a dwelling's cooling orheating load. The Department believes that thermalintegrity will not be a factor in the analysis for tIl.e three cleaning products. The Department welcomes comments on this assumption. '



### Modeling efficiencystandards, The LBL-REM projects the average efficiency ofnew products; for example. clothes dryers purchased each year in the absence ofadditional Federal regulations. A distribution of efficiencies is constructed around the a\l6rage based on efficiency distributions observed in the marketplace. This information includes information from industrv sources and published data from the industry trade associations. A new Federal standard level eliminates part ofthe distribution: therefore. a new distribution is constructed. The new shipmentweighted average efficiency then characterizesthe efficiency ofnew units in that year. The same process is applied to all years after implementation ofthe standard. The model is then run again for the standards case6 with the adjusted
average efficiencies to calculate any changes in market shares or usage behavior that may occur as a result of standards and to calculate the net energy savings. 

### Turnover ojappliance stocks. The initial age distribution ofappliances in stock is based on industry data about historical annual shipments. The fraction ofeachproduct thatretires each
year isbased on the number of**y~ars** since purchase ofthe product. For each year's purchase. the model associates an average efficiency, so that when older appliances are retired. they are also recognized as lessefficient. All appliance replacements are included in the retirement function. including those reSUlting for reasons otherthan product failure. However. the analysis does not explicitly considerthe effect of increased purchaseprice on the
turnover rate. The Department requests

oThe standards case reiers to a time period when

a potential new standard has been implemen!pd, 

### Federal Register I 

### Vol. 59, No. 218 I 

### Monday. November 14. 1994 / Proposed Rules 56427

• Therelationship between cost and efficiency level by productclass, and

• Otherinformation on product characteristics. such as lifetimes, maintenance costs and installation
costs.


### b. ResidentialEnergyModels

The Department has used the Lawrence Berkeley Laboratory Residential Energy Model (LBL-REM) in the analysis andreanalysis for

numerous Department rulemakings. The DeparL-nent has considered replacing the LBL-REM with the Electric Power Research Institute's REEPS model and is presently analyzing it for theThree Prociact Advance Notice ruleniaking. The Departmentexpects to usethe analvtical method chosen for that rulemaking in the analysis for this rulemaking. The Department welcomes
comments on this approach. Below is a description ofboth models.

1. Lawrence Berkelev Laboratorv Residential Energy Model

.

The LBL-REM forecasts the appliance purchase choices that households make

as well as their subsequent appliance
usage behavior and energy consumption. The model uses engineering estimates ofthe characteristics ofparticulardesigns of appliances andcalculates the national impacts ofa technology-specific policy

on the populations ofappliances used in Ll-te households. Alternative designs

are characterized by price and efficiency. The output from the LBLRE.\1 provides estimates ofnational
energy savings and consumereconomic impacts (including equipment and operating expenses).

Engineering. economic. and demographic data are used in the LBLREM. The engineering data for appliances include the price-eftlciency relationships described above_ Additional data include information regarding alternative building shell construction measures and costs, unit
energy consumption and efficiency of existing appliances. age distribution of existing appliance stock. and retirement functions. Economic data include projected energy prices 5 and household income. models ofenergy investment. appliance purchase and usage behavior. including fuel and technology choice for each end use. Demographic data include

their approach to manufacturing. Therefore. small manufacturers' costs have been assumed to equal those ofmedium manufacturers. The Department**p.ncoura~es** smail manufacturers to submit data.

• The"projections ofenergy prices will be taken !rom the most recent Annual Energy Outlook. a puolication ofthe DepartmP.nt's Energy Information ,\dministration. number ofhouseholds by type

. projected housing starts and demolitions. and initial aooliance holdings.

Structure 

### of the mode/. The LBL-REM segments annual energy consumption into house types. enduses. and fuel types. The house types are singlefamilv. multifamilv. and mobile homes. Calculations are performed separately for existing and new housing construction each year overthe period 1980-2030. The end uses are space heating (including room and central). air conditioning (room. central conventional. and central heat pump).
water heating. refrigeration. cooking. clothes drying. lighting. clothes washing. dishwashing. pool heating. televisions and miscellaneous. Up to four fuels are considered. as appropriate
to each enduse: electricity, natural gas. heating oil. and liquid petroleum gas. The model exists in two versions: national (one region) andregional (10 Federal regions). Since usage ofcleaning products is not likelyto differ by geographic location. the national version will beutilized in this analvsis.

The model projects five types of

- activities: technology/fuel choice: building shell thermal integrity choice: applianceefficiency choice; usage behavior; and turnover ofbuildings and appliances.



### Housing stock submodeJ. This submodel generates data about housing stock projections for the LBL-REM. The number ofoccupied households, by type. is taken from the 1990 Census of Population and Housing. An exogenous projection for housing starts is obtained. and estimates ofprojected demolition
rates by house type are calculated. assuming an exponential function. The housing submodel determines the

,projected housing stock each year. ,1981-2030. by subtracting demolitions from existing stock. then adding starts. The annual demolition rates bv house type willbe calculated for single-family. multifamily. and mobile homes. respectively.



### Efficiencychoice algOrithm. Historical efficiency data are available primarily from trade associations for selected
years for each class ofappliance through
at least 1992. The Federal energy conservation standards for new units of these appliances are expected to be met by the effective date ofthe standard. After that date. future efficiency improvements are assumed to be a function ofdesigns available (according
to the engineering analysis) and of relevant energy prices. The forecasting algorithm is designed to allow annual
average efficiency orshipment-weighted efficiency factors to increase ifeither more efficient designsbecome a\'ailable
at lower prices orenergy prices increase. Conversely. ifenergy prices decrease. the shipment-weighted efficiency factors may decline. but would have a lowerbound at the existing standard level. i.e., the 1991 standard preScribedbythe Department. effective 1994. for dishwashers. clothes washers and clothes dryers.

.



### Thermal integrity. Tlie-LBL-REM addresses thermal integrity as an input into the model for conducting analysis

on appliances which affect a dwelling's cooling orheating load. The Department believes that thermalintegrity will not be a factor in the analysis for tIl.e three cleaning products. The Department welcomes comments on this assumption. '



### Modeling efficiencystandards, The LBL-REM projects the average efficiency ofnew products; for example. clothes dryers purchased each year in the absence ofadditional Federal regulations. A distribution of efficiencies is constructed around the a\l6rage based on efficiency distributions observed in the marketplace. This information includes information from industrv sources and published data from the industry trade associations. A new Federal standard level eliminates part ofthe distribution: therefore. a new distribution is constructed. The new shipmentweighted average efficiency then characterizesthe efficiency ofnew units in that year. The same process is applied to all years after implementation ofthe standard. The model is then run again for the standards case6 with the adjusted
average efficiencies to calculate any changes in market shares or usage behavior that may occur as a result of standards and to calculate the net energy savings. 

### Turnover ojappliance stocks. The initial age distribution ofappliances in stock is based on industry data about historical annual shipments. The fraction ofeachproduct thatretires each
year isbased on the number of**y~ars** since purchase ofthe product. For each year's purchase. the model associates an average efficiency, so that when older appliances are retired. they are also recognized as lessefficient. All appliance replacements are included in the retirement function. including those reSUlting for reasons otherthan product failure. However. the analysis does not explicitly considerthe effect of increased purchaseprice on the
turnover rate. The Department requests

oThe standards case reiers to a time period when

a potential new standard has been implemen!pd,

### 56428 

### Federal Register I 

### VoL 59. !\io. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules

data and comments on how to consider this factor.

The number ofpotential purchasers of

an appliance in new homes is equal to the number ofnew bomes constructed each year. The number ofpotential purchasers ofappliances in exis!ing.

. houses is equal to the number ot retmng appliances plus (ifapplicable) a fraction ofthose households that did not previously own the product.



### Calculation of marketshares. Potential purchasers may purchase any competing technology within an end

use or none. For each end use. long-term market share elasticities are estimated with respect to equipment price. operating expense. and income. respectively. The effect of-standards is expected to be lower operating expense and increased equipment price. The percentage changes in these quantities

are used. together with market share elasticities. to determine changes in market share resulting from standards. The model assumes that higher equipment prices will decrease sales volumes while lower operating

. expenses will increase them. The net result (predicted market share) depends

on the standard level selected with its associated equipment prices and operating expenses. 

### Usage behavior. For some products changing the operating expense results in changes in usage behavior. These changes are modeled based on usage elasticities in operating expense and income. For dishwashers. clothes washers and clothes dryers we expect these elasticities to be at or near zero; usage behavior is not influencedby the
cost ofoperating the appliance. On the other hand. the popularity ofcertain "energy saving" features. such as air (in lieu ofheated) drying on dishwashers suggests that some consumers alter their behavior in response to operating costs. The Department requests comments on this assumption.



### Energy consumption calculations. The total energy consumption per hause for each end use and fuel by house type and vintage (existing or new) is the product ofthe unit energy consumption (accounting for efficiency and capacity changes) and usage factor. e.g.• relative hours offull-load use for dishwashers. The corresponding annual energy consumption for all households is the annual consumption per household. times the number ofhouseholds ofthat type and vintage. times the fraction of those households owning that appliance. I

., .

Aggregate energy consumption IS obtained by summing intermediate results. For example. national electricity consumption for residential

. dishwashing in a pa!1icular year is the

sum across house types and house vintages ofelectricity used by compact and standard dishwashers. National residential electricity consumption in that year is the sum ofall end uses of electricity consumption in the residential sector.



### Model outputs. The principal outputs from the LBL-REM for each year are:

• Energy consumption by end use and fuel.

• Total residential energy consumption by fuel.

• Per-unit equipment price and operating expense by product.

• Projected annual shipments of residential a?pliances. and

• Differences in these quantities between a base and a standards case.

These outputs are provided annually (or for selected years) and cumulatively

over a period oftime. e.g.• 1999-2030. Energy savings are provided annually from implementation ofstandards to the -end ofthe period. Net present value of standards is evaluated for each regulated product and for the end use(s) comprising the regulated and competing products.

Energy savings are calculated as the difference in energy consumption between the base case and standards

. case. Energy consumption in both the

base case and standards case includes changes in fuel choice or changes in
usage behavior. Therefore. the energy savings capture the net energy savings due to regulation. including the effects induced by shifts in market share or changes in usage behavior.

Net present value. on the other hand. excludes these types ofeffects. 7 Net present value is calculated from per-unit changes in equipment artd operating
expenses. multiplied by startdards case shipments. Ifthe net present value were calculated without normalizing \\'ith regard to shipments. erroneous results would be obtained. 

### Ifstandards caused decreased purchases ofa product. this would appear as an economic benefit; namely. less money spent on purchasing and using appliances.s If standards

7 Present nlue is the discounted total value of
energy consumption during the appliances' lifetimes. plus the discounted equipment costs for those appliances that are purchased during those periods at alternative standards levels. The difference between a standards case and a base case is the net present value attributable to amended standards. A pOSitive net present value for an appliance at a given standard level indicates that. Hthat standard were adopted. consumers ofthat appliance as a whole would save that much more money in fuel costs. discounted to the present. than they would pay in increased initial price for e more efficient appliance. discounted to the present. compared to the base case.

S Without nonnalization. the greatest economic benefit would be obtained by a standard level that resulted in increased purchases. this would be incorrectly counted as a cost when it reflects consumers' preference for the post-standards product.

Base case usage is assumed in calculating the net present value since

anv "rebound effect"g reflects the consumer's judgment that increased
usage is worth more than the direct
energy savings associated with keeping
usage constant. Therefore. deduction of
any foregone energy savings resulting from a possible "rebound effect," prior
to calculating the net present value. would result in an underestimate ofthe
true net present value associated with a given efficiency improvement.



### Otherimpacts. In determining economic justification. the Act directs the Department to consider a number of different factors. Among these factors

are requirements that the Department consider the economic impact ofthe standard on consumers. In this regard. the Act establishes a rebuttable presumption that a standard is economically justified 

### if the additional product costs attributable to the standard are less than three times the value ofthe first year energy cost savings. Also. the Department is required to consider changes in the lifecycle costs resulting from the standard.

Taking into consideration these various requirements. the Department calculates:

• The estimated simple payback of additional product costs (based on estimated changes in product purchase prices) by the energy cost savings projected to result from the proposed standard.

• The estimated changes in life-cycle
costs to the consumer likely to result from the proposed standard. and

• The net present value ofestimated savings to the Nation ofthe proposed standard.

The calculation ofboth consumer lifecycle costs and national netpresent costslbenefits require the use of appropriate discount rates. The discount
rate used in sucb calculations is intended to approximate the time-value ofmoney ofthose who would 

### bear the additional product prices resulting from.

resulted in no future purchases ofthe product. Then no money would be spent on purchasing the product or on operating expenses. and the value of the savings would equal the amount ofmoney that would have been spent without the standard. This would clearly be a misrepresentation ofthe net present value ofstandards.

"The "rebound effect" is the projected energy savings from an efficiency improvement that does
not occur. This results when purchasers ofmore energy efficient appliance use them more intensively. thereby saving less energy than the engineering estimates would have indicated. In

some instances. the rebound is zero. 

### 56428 

### Federal Register I 

### VoL 59. !\io. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules

data and comments on how to consider this factor.

The number ofpotential purchasers of

an appliance in new homes is equal to the number ofnew bomesconstructed each year. The number ofpotential purchasersofappliances inexis!ing.

. houses is equal to the number or retmng appliances plus (ifapplicable) a fraction ofthose households that did not previously own the product.



### Calculation of marketshares. Potential purchasers may purchase any competing technology within an end

use ornone. Foreach enduse. long-term market share elasticities are estimated with respect to equipment price. operating expense. and income. respectively. The effect of-standards is expected to be lower operatingexpense and increased equipment price. The percentage changes in these quantities

are used. together with market share elasticities. to determine changes in market share resulting from standards. The model assumes that higher equipment prices will decrease sales volumes while lower operating

. expenses will increase them. The net resuit (predicted market share) depends

on the standard level selected with its associated equipment prices and operatingexpenses. 

### Usage behavior. For some products changingthe operatingexpense results in changes inusage behavior. These changes are modeled based on usage

. elasticities in operating expense and income. For dishwashers. clothes washers andclothes dryers we expect these elasticities to be atornearzero; usage behavior is not influencedby the
cost ofoperatingthe appliance. On the other hand. the popularity ofcertain "energy saving" features. such as air (in lieu ofheated) drying on dishwashers suggests that some consumers alter their behaviorin response to operating costs. The Departmentrequests comments on this assumption.



### Energyconsumption calculations. The total energy consumption perhause for each end use and fuel by house type and vintage (existing or new) is the product ofthe unitenergy consumption (accounting for efficiency and capacity changes) and usage factor. e.g.• relative hours offull-load use for dishwashers. The corresponding annualenergy consumption for all households is the annual consumption perhousehold. times the number ofhouseholds ofthat type and vintage. times the fraction of those households owning that appliance. I

., .

Aggregate energy consumption IS obtained by summing intermediate results. For example. national electricity consumption for residential

. dishwashing ina pa.'1icular year is the

sumacross house types and house Vintages ofelectricity usedbycompact and standard dishwashers. National residential electricity consumption in that year isthe sum ofall enduses of electricityconsumption in the residential sector.



### Model outputs. The principal outputs from the LBL-REM for each yearare:

• Energy consumption byend use and fuel.

• Total residential energy consumption by fuel.

• Per-unit equipment priceand operating expense by product.

• Projected annual shipments of residential a?pliances. and

• Differences in these quantities between a base and a standards case.

These outputs are provided annually (or for selectedyears) and cumulatively

over a period oftime. e.g., 1999-2030. Energy savings are provided annually from implementation ofstandards to the -end ofthe period. Net presentvalue of standards is evaluated for each reguiated product and for theend use(s) comprising the regulated and competing products.

Energy savings are calculated as the difference in energy consumption between thebase case and standards

. case. Energy consumption inboth the

base case and standards case includes changes in fuel choice orchanges in
usage behavior. Therefore. the energy savings capturethe net energy savings dueto regulation. including theeffects inducedby shifts inmarket share or changes in usage behavior.

Net present value. on the otherhand. excludes thesetypes ofeffects.7 Net present value is calculated from per-unit changes in equipment and operating
expenses. multipliedby standardscase shipments. Ifthe net presentvaluewere calculated without normalizing \\'ith regard to shipments. erroneousresults would be obtained. 

### Ifstandardscaused decreased purchases ofa product. this would appear as an economicbenefit; namely. less money spent onpurchasing and using appliances.s Ifstandards

7 Present nlue is the discountedtotal value of
energy consumption during the appliances' lifetimes. plusthe discounted equipmentcosts for those appliances that are purchased during those periods at alternative standards levels. The difference betweena standards case and a base case is the net present value attributable to amended standards. A positive net present value for an appliance at a given standard level indicates that. Hthat standard were adopted. consumers ofthat applianceas a whole would save that much more money in fuel costs. discounted to the present. than they would pay in increased initial price for e more efficient appliance. discounted to the present. compared to thebase case.

SWithout nonnalization. the greatest economic benefit would be obtained by a standard le\'e! that resulted inincreased purchases. this would be incorrectly counted as a cost when it reflects consumers' preference for the post-standards product.

Base caseusage isassumed in calculating the net present value since

anv "reboundeffect"greflects the consumer'sjudgment that increased
usage is worth more than the direct
energy savingsassociated with keeping
usage constant. Therefore. deduction of
any foregone energy savings resulting from a possible "reboundeffect," prior
to calculating the netpresent value. would result in an underestimate ofthe
true net presentvalue associated with a given efficiencyimprovement.



### Otherimpacts. In determining economicjustification, the Act directs the Departmentto consider a number of different factors. Among these factors

are requirementsthat the Department considertheeconomic impact ofthe standard onconsumers. In this regard. the Act establishes a rebuttable presumption that a standard is economicallyjustified 

### ifthe additional productcosts attributable to the standard are less than three times the value ofthefirst yearenergy cost savings. Also. the Department is required to considerchanges in the lifecycle costsresulting from the standard.

Takingintoconsideration these variousrequirements. the Department calculates:

• The estimated simple payback of additional product costs (based on estimated changes in productpurchase prices) by the energy cost savings projected to result from the proposed standard.

• Theestimated changes in life-cycle
costs to the consumer likely to result from the proposed standard. and

• Thenet present value ofestimated savings to the Nation ofthe proposed standard.

The calculation ofboth consumerlifecycle costs and national net present costslbenefits require the useof appropriate discount rates. The discount
rate used in sucbcalculations is intended to approximate the time-value ofmoney ofthose who would 

### bear the additional product prices resulting from.

resulted in no future purchases ofthe product. Then no money would bespentonpurchasing the product or onoperating expenses. and the value of the savings would equal the amountofmoney that would have been spent without the standard. This would clearly be a misrepresentation ofthe net present value ofstandards.

"The "reboundeffect" isthe projected energr savings from an efficiency improvementthat does
not occur. This results when purchasers ofmore energy efficient appliance use them more intensively. thereby saving less energy than the engineering estimates would have indicated. In

some instances. the rebound is zero. 

### 56428 

### Federal Register I 

### VoL 59. !\io. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules

data and comments on how to consider this factor.

The number ofpotential purchasers of

an appliance in new homes is equal to the number ofnew bomesconstructed each year. The number ofpotential purchasersofappliances inexis!ing.

. houses is equal to the number or retmng appliances plus (ifapplicable) a fraction ofthose households that did not previously own the product.



### Calculation of marketshares. Potential purchasers may purchase any competing technology within an end

use ornone. Foreach enduse. long-term market share elasticities are estimated with respect to equipment price. operating expense. and income. respectively. The effect of-standards is expected to be lower operatingexpense and increased equipment price. The percentage changes in these quantities

are used. together with market share elasticities. to determine changes in market share resulting from standards. The model assumes that higher equipment prices will decrease sales volumes while lower operating

. expenses will increase them. The net resuit (predicted market share) depends

on the standard level selected with its associated equipment prices and operatingexpenses. 

### Usage behavior. For some products changingthe operatingexpense results in changes inusage behavior. These changes are modeled based on usage

. elasticities in operating expense and income. For dishwashers. clothes washers andclothes dryers we expect these elasticities to be atornearzero; usage behavior is not influencedby the
cost ofoperatingthe appliance. On the other hand. the popularity ofcertain "energy saving" features. such as air (in lieu ofheated) drying on dishwashers suggests that some consumers alter their behaviorin response to operating costs. The Departmentrequests comments on this assumption.



### Energyconsumption calculations. The total energy consumption perhause for each end use and fuel by house type and vintage (existing or new) is the product ofthe unitenergy consumption (accounting for efficiency and capacity changes) and usage factor. e.g.• relative hours offull-load use for dishwashers. The corresponding annualenergy consumption for all households is the annual consumption perhousehold. times the number ofhouseholds ofthat type and vintage. times the fraction of those households owning that appliance. I

., .

Aggregate energy consumption IS obtained by summing intermediate results. For example. national electricity consumption for residential

. dishwashing ina pa.'1icular year is the

sumacross house types and house Vintages ofelectricity usedbycompact and standard dishwashers. National residential electricity consumption in that year isthe sum ofall enduses of electricityconsumption in the residential sector.



### Model outputs. The principal outputs from the LBL-REM for each yearare:

• Energy consumption byend use and fuel.

• Total residential energy consumption by fuel.

• Per-unit equipment priceand operating expense by product.

• Projected annual shipments of residential a?pliances. and

• Differences in these quantities between a base and a standards case.

These outputs are provided annually (or for selectedyears) and cumulatively

over a period oftime. e.g., 1999-2030. Energy savings are provided annually from implementation ofstandards to the -end ofthe period. Net presentvalue of standards is evaluated for each reguiated product and for theend use(s) comprising the regulated and competing products.

Energy savings are calculated as the difference in energy consumption between thebase case and standards

. case. Energy consumption inboth the

base case and standards case includes changes in fuel choice orchanges in
usage behavior. Therefore. the energy savings capturethe net energy savings dueto regulation. including theeffects inducedby shifts inmarket share or changes in usage behavior.

Net present value. on the otherhand. excludes thesetypes ofeffects.7 Net present value is calculated from per-unit changes in equipment and operating
expenses. multipliedby standardscase shipments. Ifthe net presentvaluewere calculated without normalizing \\'ith regard to shipments. erroneousresults would be obtained. 

### Ifstandardscaused decreased purchases ofa product. this would appear as an economicbenefit; namely. less money spent onpurchasing and using appliances.s Ifstandards

7 Present nlue is the discountedtotal value of
energy consumption during the appliances' lifetimes. plusthe discounted equipmentcosts for those appliances that are purchased during those periods at alternative standards levels. The difference betweena standards case and a base case is the net present value attributable to amended standards. A positive net present value for an appliance at a given standard level indicates that. Hthat standard were adopted. consumers ofthat applianceas a whole would save that much more money in fuel costs. discounted to the present. than they would pay in increased initial price for e more efficient appliance. discounted to the present. compared to thebase case.

SWithout nonnalization. the greatest economic benefit would be obtained by a standard le\'e! that resulted inincreased purchases. this would be incorrectly counted as a cost when it reflects consumers' preference for the post-standards product.

Base caseusage isassumed in calculating the net present value since

anv "reboundeffect"greflects the consumer'sjudgment that increased
usage is worth more than the direct
energy savingsassociated with keeping
usage constant. Therefore. deduction of
any foregone energy savings resulting from a possible "reboundeffect," prior
to calculating the netpresent value. would result in an underestimate ofthe
true net presentvalue associated with a given efficiencyimprovement.



### Otherimpacts. In determining economicjustification, the Act directs the Departmentto consider a number of different factors. Among these factors

are requirementsthat the Department considertheeconomic impact ofthe standard onconsumers. In this regard. the Act establishes a rebuttable presumption that a standard is economicallyjustified 

### ifthe additional productcosts attributable to the standard are less than three times the value ofthefirst yearenergy cost savings. Also. the Department is required to considerchanges in the lifecycle costsresulting from the standard.

Takingintoconsideration these variousrequirements. the Department calculates:

• The estimated simple payback of additional product costs (based on estimated changes in productpurchase prices) by the energy cost savings projected to result from the proposed standard.

• Theestimated changes in life-cycle
costs to the consumer likely to result from the proposed standard. and

• Thenet present value ofestimated savings to the Nation ofthe proposed standard.

The calculation ofboth consumerlifecycle costs and national net present costslbenefits require the useof appropriate discount rates. The discount
rate used in sucbcalculations is intended to approximate the time-value ofmoney ofthose who would 

### bear the additional product prices resulting from.

resulted in no future purchases ofthe product. Then no money would bespentonpurchasing the product or onoperating expenses. and the value of the savings would equal the amountofmoney that would have been spent without the standard. This would clearly be a misrepresentation ofthe net present value ofstandards.

"The "reboundeffect" isthe projected energr savings from an efficiency improvementthat does
not occur. This results when purchasers ofmore energy efficient appliance use them more intensively. thereby saving less energy than the engineering estimates would have indicated. In

some instances. the rebound is zero.

## --------------

Federal Register I 

### Vol. 59. No. 218 I 

### Monday. NovemLer 14. 1994 I 

### Proposed Rules------ 

### -----

56429

a proposed standard and who would also. presumably. benefit from the resulting savings in energy expenses. Consequently. the most appropriate discount rate depends on the characteristics ofthe individual

consumers. businesses. or other persons effected by a proposed standard. The Department expects to use the same discount rates for this notice as are selected as a result ofthe Three Product**Advf~'1ce** Notice. The Department welcomes comments un this issue.

The Department recognizes that there

are external societal benefits (and possibly costs) that are**~enerated** from ilnniiance stnndards. These are**r:~{nc:ipally** the value ofreductions in oil imports and the reduction in projected emis>:ions ofSO:!. NO:! and CO2

. It has been suggested that the appliance standaros resulting from this n:lemekL;g will not create anv S02 or NO: Slivings beyond those that will be 1'30uired bv the Clean Air Act of 1990 (?L. 101-549. November 15. 1990). If [hat pzo\'es to be tme. then the c;r.lssions reductions from standa;:ds that de occur will accrue to those deriving the reductions (which are principally electric utilitiesj by displacing the measures iliat those firms \\-'ouid otherwise utilize to achieve their required reductions ofS02 and N02• In that case, the S02 and 1'102 reductions from standards would renresent a costf.-ae wav for those firms to achieve their savings: and. as such. would have some value to tnose firms realizing the redl.:ctions. The actual volue that will be realized from appliance standardsi:1duced reducdcns ofS02 will be the marKet-determined dollar value placed

on the noilution creciits that are earned. Such credits can be used bv the**fl~** realizing the credits, "banked" for future use. or sold for use or "banking"

tv ntners.

. In previous rulemakings, the Department identified benefits resulting from national energy savings and emissions reductions, but did not attach an\' monetary value to these benefits because ofthe considerable uncertaintv ofsuch estimates. However, in order

. more explicitly to consider such externalized benefits (or costs), the Department will attempt in this mlemaking to establish values for these benefits. ifa sound analytical basis can be found. The Department has recently published a Supplemental Advance Notice (59 FR 51140, October 7, 1994)
to the Three Product Advance Notice; this Supplemental Advance Notice presents considerations that would need

[0 be made in developing a sound 'lnalytic basis for monetizing externalities. The Department is concerned about the impact to any identifiable groups or

consumers who may be disproportionally affected by any proposed national energy efficiency standard levels. The Department requested comments on a methodolcgy for addressing this issue in the Three Product Advance Notice. The Department expects to follow the policy regarding the consideration ofsuch disproportionate impacts that emerges from the consideration cf comments on the Three Product Advance Notice in this rulemaking. The Department v,:elcomes commen\s on this issue.

2. Electric Power Research Institutes Residential End-Use Er:ergy Planning System (REEFS 2.12)

REEPS has been used since the early 1980s both as a tool for national

. residential policy analysis epd subsequently as an analyticd tool for electric utilities to forecast long-term residential ener"v derr.:md. The current version ofthe model, REEPS 2.12. simulates the energy consumption behavior of specific household segments.

REEPS 2.12 incorporates the basic features ofresidential end-use fcrecasting into a generalized modeling framework in which the user has considerable control over the algorithms and model stmctu."e. This framework provides greater flexibility over more traditional models which are "hardwired" for particular formulations cf residential sector energy use. This ' facilitates implementation ofa wide
range of scenarios and policies at va..-ying Je,'els ofdisaggregation without

ever changing the computer program itself.

Space conditioning and appliance modeling. REEPS 2.12 provides a separate modeling framework for space

. conditioning end-uses and another for household appliances. like refrigerators. clothes washers. etc. These frameworks

are referred to as the HVAC module and appliance modules. Exogenous variables include macroeconomic projections such as income and household size and other external r.arameters specified by the user. Fuel price projections are implemented as exogenous time series for each rolel and rate class used in the model. Household data allows the user to forecast changes to the housing stock based on se!larate decay rates for each housing type and vintage block.

H\'AC module/thermal shell. REEPS 2.12 has an HVAC module which deals with space conditioning equipment and the thermal shell. The module has various parameters such as fuel choice, system Capacity. efficiency levels. etc

.. The Department believes that these issues will not be a factor in the analvsis for the three cleaning products because these products do not impact the thermal characteristics ofthe dwelling. The Department welcomes cor::ments

on this assumption.

Appliance module. The REEFS 2.12 Appliance Model provides-a generalized
structure fer characterizing purchases and energy consumption ofappliances. This model 

### will be used to analvze the three cleaning products if the

- Department decides to adopt REEFS. Working within the R...1:'EPS framework.

users ofthe model configure economic and energy data on appliances and define functional relationships to model changes in energy consumption in future years. Demographic segmentation allows the user to define different segments of**L~e** appliance market based

on household characteristics such as income or household size and differentiate purchase decisions across these segments. These other mput selS precede**~the** specificanon of tl;e appliance models t...'1emselves because they define important elements of appliance model structure. such as the housing types specifiad in the Households module. Data from these input sets are used as drivers i:l. forecasting the size. characteristics. and
usage ofthe appliance stock.

The REEPS 2.12 Appliance Model is

a vintaged capital stock or stock Dowadjustment model that maintains**accoun~s** ofappliances by vintage year. REEPS 2.12 uses a state-based approach
to forecasting in which purchase decisions are exolicitlv modeled at the household level: The state-based approach differs from a saturation approacil to appliance modeling. in which the saturations or market**~hares** are modeled and the difference from the
current ownership patterns are attributed to appliance purchases. The "state" ofa given appliance model in a given year determines the energy consumption for that applia..'1ce by tracking five key variables throughout the course of the forecast: size. efficiency. usage. market share and the number ofhouseholds. Appliance size. efficiency and usage are defined by the

user in the units-and values appropriate for a given end-use and/or appliance.

Three general modeling steps are executed for each a!lpliance end-use: (1) Base-year calibration. (2) decisionmodel**c~libration,** and (3) forecast execution. In the base-vear calibr:ltion. the Appliance Model is compared \-\'ith the input housing stock and demographic characteristics to checkfor '.alues that are disaggregated by housip.g type and demographic segment.**Usa~e** is 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. NovemLer 14. 1994 I 

### Proposed Rules 56429

a proposed standard and who would also. presumably. benefit from the resulting savings inenergy expenses. Consequently. the most appropriate discount rate depends onthe characteristics ofthe individual

consumers. businesses. orother persons effected by a proposed standard. The Department expectsto use the same discount rates for thisnotice as are selected as a result ofthe Three Product**Advf~'1ce** Notice. The Department welcomes comments un this issue.

The Departmentrecognizes that there

are external societal benefits (and possibly costs) that are**~enerated** from 3nniia:1ce standards. These are**p~{nc:ipally** the value ofreductions in oil imports and the reduction in projected emis>:ions ofSO:!. NO:! and CO2• It has been suggested that the appliance standaros resulting from this n:lemekL:g will not create anv SOl or NO: Sli\lings beyond those that will be 1'30uired bv the Clean Air Act of 1990 (?L. 101-549. November 15. 1990). If [hat PZO\'E'S to be true. then the GGlssions reductions from standa;:ds that de occur will accrue to those deriving the reductions (which are principally electric utilitiesj by displacing the measures tnat those firms \v'ouid otherwise utilize to achieve their required reductions ofS02 and N02• In (bat case, the S02 and 1'102 reductions from standards would renresent a costf.-ae wav for those firms

# to achieve their savings: and. as such. would have some value to those firms realizing the recil.:ctions. The actual volue that will be realized from appliance standardsi:1duced reducticns ofS02 will be the marKet-determined dollarvalue placed

on the noilution creciits that are earned. Such credits 

### can be used bv the**fl~** realizing the credits. "banked" for future use. or sold for use or "banking·' tvntners.

. In previous rulemakings. the Department identified benefits resulting from national energy savings and emissions reductions. but did not attach

an

.... monetary value to iliese benefits because ofilie considerable uncertaintv ofsuch estimates. However. in order

-
more explicitlyto consider such externalizedbenefits (or costs). the Department will attempt in this rulemaking to establish values for these benefits. ifa sound analytical basis can be found. The Department has recently published a Supplemental Advance Notice (59 FR 51140. October 7. 1994)
to the Three Product Advance Notice: this Supplemental Advance Notice presents considerations that would need

[0 be made in developing a sound 'lnalytic basis for monetizing externalities. The Department is concerned about the impact to any identifiable groups or

consumers who mav be disproportionally affected by any proposed national energy efficiency standard levels. The Department requested comments on a methodolcgy for addressing this issue in the Three Product Advance Notice. The Department expectsto follow the policy regarding the consideration ofsuch disproportionate impacts that emerges from the consideration cfcomments on the Three Product Advance Notice in this rulemaking. The Departme:1t v,:elcomes commen\s on this issue.

2. Electric PowerResearch Institutes Residential End-Use Er:ergy Planning System (REEFS 2.12)

REEPS has been used since the early 1980s both as a tool for national

- residential policy analysis epa subsequently as an analyticd tool for electric utilities to forecast long-term residential**en8r~\'** derr.:md. The current version ofthe model. REEPS 2.12. simulates the energy consurnptio!1 behavior of specific household segments.

REEPS 2.12 incorporates the basic features ofresidential end-use fcrecasting into a generalized modeling framework in which the user has considerable control overthe algorithms and model structlli"e. This framework provides greater flexibility overmore traditional models which are "hardwired" for particular formulations cfresidential sector energy use. This ' facilitates implementation cfa wide
range of scenarios and policies at \·a.-ying Je\-els ofdis3Qgregation without

ever changing the computer program itself.

Space conditioning and appliance modeling. REEPS 2.12 provides a separate modeling framework for space

.conditioning end-uses and anotherfor household appliances. like refrigerators, clothes washers. etc. These frameworks

are referred to as the HVAC module and appliance modules. Exogenous variables include macroeconomic projections such as income and household size and other external r.arameters specified by the user. Fuel price projections are implemented as exogenous time series for each r.lel and rate class used in the model. Household data allows the user to forecast changes to the housing stock based on se!larate decay rates for each housing type and vintage block.

H\fACmodule/thermalshell. REEPS
2.12 has an HVAC module which deals with space ccnditioning equipment and the thermal shell. The module has various parameters such as fuel choice. system Capacity. effiCiency levels. etc

.. The Departmentbelieves that these issues will not be a factor in the analysis for the three cleaning products because these products do not impact the thermal characteristics ofthe dweiling. The Department welcomes cor::rnpnts

on this assumption.



### Appliancemodule. The REEFS 2.12 Appliance Model provides·a generalized
structure fer characterizing purchases and energy consumption ofappliances. This model will be usedto analne the three cleaning products ifthe

- Department decides to adopt REEFS. Working within the R...1:'EPS framework.

users ofthe model configure economic and energy data on appliances and define functional relationships to model changes in energy consumption in future years. Demographic segmentation allows the userto define different segments of**L~e** appliance market based

on household characteristics such as income or household size and differentiate purchase decisions across these segments. These other mput selS precede**~the** specificauon of

# t:,e appliance models t...'Iemselves because they define important elements of appliance model structure. such as the housing types specifiad in the Households module. Data from these input sets are used as drivers i:! forecasting the size. characteristics. and
usage ofthe appliance stock.

The REEPS 2.12 Appliance Model is

a vintaged capital stock or stock fiowadjustmer:t model that maintains**accoun~s** ofappliances by vintage year. REEPS 2.12 uses a state-based approach
to forecasti:1g in which purchase decisions are exolicitlv modeled at the household level: The siate-based approach differs from a saturation approacil to appliance modeling. in which the saturations ormarket**~hares** are modeled and the difference f!'om the
current ownership patterns are attributed to appliance purchases. The "state" ofa given appliance model in a given year determines the energy consumption for that app!ia..'lce by tracking five key variables throughout ilie course of the forecast: size. efficiency, usage. market share and the number ofhouseholds. Appliance size. efficiency and usage are defined by the

user in the units-and values appropriate for a given end-use and/or appliance.

Three general modeling steps are executed for each a!lpliance end-use: (1) Base-year calibration. (2) decisionmodel**c~libration.** and (3) forecast execution. In the base-year calibr:ltion, the Appliance Model

# is compared \\'ith the input housing stock and demographic characteristics to checkfor ';alues that are disaggregated by housing type and demographic segment.**Usa~e** is 

### Federal Register I 

### Vol. 59. No. 218 I 

### Monday. NovemLer 14. 1994 I 

### Proposed Rules 56429

a proposed standard and who would also. presumably. benefit from the resulting savings inenergy expenses. Consequently. the most appropriate discount rate depends onthe characteristics ofthe individual

consumers. businesses. orother persons effected by a proposed standard. The Department expectsto use the same discount rates for thisnotice as are selected as a result ofthe Three Product**Advf~'1ce** Notice. The Department welcomes comments un this issue.

The Departmentrecognizes that there

are external societal benefits (and possibly costs) that are**~enerated** from 3nniia:1ce standards. These are**p~{nc:ipally** the value ofreductions in oil imports and the reduction in projected emis>:ions ofSO:!. NO:! and CO2• It has been suggested that the appliance standaros resulting from this n:lemekL:g will not create anv SOl or NO: Sli\lings beyond those that will be 1'30uired bv the Clean Air Act of 1990 (?L. 101-549. November 15. 1990). If [hat PZO\'E'S to be true. then the GGlssions reductions from standa;:ds that de occur will accrue to those deriving the reductions (which are principally electric utilitiesj by displacing the measures tnat those firms \v'ouid otherwise utilize to achieve their required reductions ofS02 and N02• In (bat case, the S02 and 1'102 reductions from standards would renresent a costf.-ae wav for those firms

# to achieve their savings: and. as such. would have some value to those firms realizing the recil.:ctions. The actual volue that will be realized from appliance standardsi:1duced reducticns ofS02 will be the marKet-determined dollarvalue placed

on the noilution creciits that are earned. Such credits 

### can be used bv the**fl~** realizing the credits. "banked" for future use. or sold for use or "banking·' tvntners.

. In previous rulemakings. the Department identified benefits resulting from national energy savings and emissions reductions. but did not attach

an

.... monetary value to iliese benefits because ofilie considerable uncertaintv ofsuch estimates. However. in order

-
more explicitlyto consider such externalizedbenefits (or costs). the Department will attempt in this rulemaking to establish values for these benefits. ifa sound analytical basis can be found. The Department has recently published a Supplemental Advance Notice (59 FR 51140. October 7. 1994)
to the Three Product Advance Notice: this Supplemental Advance Notice presents considerations that would need

[0 be made in developing a sound 'lnalytic basis for monetizing externalities. The Department is concerned about the impact to any identifiable groups or

consumers who mav be disproportionally affected by any proposed national energy efficiency standard levels. The Department requested comments on a methodolcgy for addressing this issue in the Three Product Advance Notice. The Department expectsto follow the policy regarding the consideration ofsuch disproportionate impacts that emerges from the consideration cfcomments on the Three Product Advance Notice in this rulemaking. The Departme:1t v,:elcomes commen\s on this issue.

2. Electric PowerResearch Institutes Residential End-Use Er:ergy Planning System (REEFS 2.12)

REEPS has been used since the early 1980s both as a tool for national

- residential policy analysis epa subsequently as an analyticd tool for electric utilities to forecast long-term residential**en8r~\'** derr.:md. The current version ofthe model. REEPS 2.12. simulates the energy consurnptio!1 behavior of specific household segments.

REEPS 2.12 incorporates the basic features ofresidential end-use fcrecasting into a generalized modeling framework in which the user has considerable control overthe algorithms and model structlli"e. This framework provides greater flexibility overmore traditional models which are "hardwired" for particular formulations cfresidential sector energy use. This ' facilitates implementation cfa wide
range of scenarios and policies at \·a.-ying Je\-els ofdis3Qgregation without

ever changing the computer program itself.

Space conditioning and appliance modeling. REEPS 2.12 provides a separate modeling framework for space

.conditioning end-uses and anotherfor household appliances. like refrigerators, clothes washers. etc. These frameworks

are referred to as the HVAC module and appliance modules. Exogenous variables include macroeconomic projections such as income and household size and other external r.arameters specified by the user. Fuel price projections are implemented as exogenous time series for each r.lel and rate class used in the model. Household data allows the user to forecast changes to the housing stock based on se!larate decay rates for each housing type and vintage block.

H\fACmodule/thermalshell. REEPS
2.12 has an HVAC module which deals with space ccnditioning equipment and the thermal shell. The module has various parameters such as fuel choice. system Capacity. effiCiency levels. etc

.. The Departmentbelieves that these issues will not be a factor in the analysis for the three cleaning products because these products do not impact the thermal characteristics ofthe dweiling. The Department welcomes cor::rnpnts

on this assumption.



### Appliancemodule. The REEFS 2.12 Appliance Model provides·a generalized
structure fer characterizing purchases and energy consumption ofappliances. This model will be usedto analne the three cleaning products ifthe

- Department decides to adopt REEFS. Working within the R...1:'EPS framework.

users ofthe model configure economic and energy data on appliances and define functional relationships to model changes in energy consumption in future years. Demographic segmentation allows the userto define different segments of**L~e** appliance market based

on household characteristics such as income or household size and differentiate purchase decisions across these segments. These other mput selS precede**~the** specificauon of

# t:,e appliance models t...'Iemselves because they define important elements of appliance model structure. such as the housing types specifiad in the Households module. Data from these input sets are used as drivers i:! forecasting the size. characteristics. and
usage ofthe appliance stock.

The REEPS 2.12 Appliance Model is

a vintaged capital stock or stock fiowadjustmer:t model that maintains**accoun~s** ofappliances by vintage year. REEPS 2.12 uses a state-based approach
to forecasti:1g in which purchase decisions are exolicitlv modeled at the household level: The siate-based approach differs from a saturation approacil to appliance modeling. in which the saturations ormarket**~hares** are modeled and the difference f!'om the
current ownership patterns are attributed to appliance purchases. The "state" ofa given appliance model in a given year determines the energy consumption for that app!ia..'lce by tracking five key variables throughout ilie course of the forecast: size. efficiency, usage. market share and the number ofhouseholds. Appliance size. efficiency and usage are defined by the

user in the units-and values appropriate for a given end-use and/or appliance.

Three general modeling steps are executed for each a!lpliance end-use: (1) Base-year calibration. (2) decisionmodel**c~libration.** and (3) forecast execution. In the base-year calibr:ltion, the Appliance Model

# is compared \\'ith the input housing stock and demographic characteristics to checkfor ';alues that are disaggregated by housing type and demographic segment.**Usa~e** is**5~430** UP. 

### Federal Register I 

### Vol. 59, No. 218 I 

### Monday, November 14, 1994 I 

### Proposed**R~lles**

edjusted to be consistent with stock Unit Energy Consumption values and vintage block information on vintage block shares, efficiencies and sizes. In the second step, decision-model calibration. the decision models are adjusted to fit the control values specified in the first forecast year. These con.trol values are referred to as

. "control-vear" data. and include the marginal'appliai1ce efficiencies and new purchase shares. Finally, in the forecast execution step. decision models are used to predict new appliance ownership shares and efficiency choices. The algorithmic procedures in each ofthese three steps are detailed in the technical documentation for the Appliance Model.



### Policy modeling. The flexibility of REEPS 2.1 allows the user to model a number ofpolicies through the judicious modification ofthe appropriate parameters. equations.
structure. and addition ofnew technologies. Government and utility policies have the potential to restrict appliance efficiency levels. energy prices. financial criteria for new equipment purchases. early retirement ofappliances. and rates oftechnical innovation. The policy choices in REEFS 2.12 include: Energy prices, functional forms and coefficients for choice equations. pre-failure replacement conversion decision algorithm. restrictions on legal or market availability ofspecific technologies. and modification of specific technologies. purchase prices or efficiencies.



### c. ManufacturerImpactModels

1. Conceptual Approach

The manufacturer impact analysis estimates the overall impact ofnew or amended standards on an industry's profitability and scale ofoperation.

2. Measures ofImpact

The analysis examines two types of long-run impact: profitability and growth. Consequently. five measures of impact are reported. They are: shipments. prices, revenues, net incomes and returns on equity. Return

on equity is the primary measure of profitability. assets and income provide the primary measures ofgrowth. At the requestj)fappliance manufacturers, a

new measure. net present value ofthe mdustry. will also be reported.

Two short-run impacts are also analyzed. First, the ability ofthe industry to provide the one-time investments required to meet the new standard is examined. Second, if standards result in decreased sales for !pe particular industry being analyzed. the analysis examines the possibility of price-cutting while the industry is adjusting to a lower sales volume.

3. Lawrence Berkeley Laboratory Manufacturer Impact Model

In order to estimate the impacts of
energy efficiency standards. a computer spreadsheet model. the Lawrence Berkeley Laboratory Manufacturer Impact Model (LBL-MIM), was developed.

The LBL-MIM was developed at Lawrence Berkeley Laboratory in 1988. Since its inception. it has evolved and has been used in the analysis and reanalysis for numerous Department rulemakings.

The LBL-MIM models the cumulative effects ofstandards on the future ofthe industry. and by means ofpresent value formulas presents the effects on an annualized basis.

Ideallv. a manufacturer analvsis should iook at the impact ofa proposed regulation on every firm that does business in the industry under question. However. because the industries being analyzed have many manufacturers making a particular product. a firm-byfirm analysis is not feasible. In addition. the engineering and financial data for
most manufacturing firms are proprietary and are not routinely available for public analysis. Because of these limitations on data and resources. the LBL-MIM models a prototypical firm. In many cases this firm represents

a division ofa larger firm. Therefore. a prototype firm is a hypothetical firm representative ofa portion ofthe industry. Prototypical firms are defined by parameters that are important for determining the impacts ofstandards and are consistent with data for the portion ofthe industry.they represent. Important parameters used in the .model include the cost structure ofthe firms. profitability ratios. relative costs of complying with the new standard, and marketing strategies.

Revenue is affected by both price and shipments. Price is determined by computing the markup over long-run marginal costs and then using the markup to determine an optimal price. Demand is determined by price and operating expense elasticities, coupled with the changes in price and operating
expenses resulting from the standards.

The LBL-MIM produces several outputs used in analyzing the impact of standards on manufacturers. A simplified pro forma income statement is prepared for each prototypical firm. In addition to the income statement, five main variables-shipments. prices.

revenues. net incomes, and returns on equity-are reported. The results are presented for the without-standards (or without amended standards) case and the with-standards (or with amended standards) case. and the relative differences between the two are also given.

4. Integration ofthe La\\TenCe Berkeley Laboratory Manufacturer Impact Model and the Government Regulatory Impact Model

As part ofits comments submitted to the Department for the rulemaking on nine consumer products (comments No. 610 and 61E dated July 1991 and September 9, 1991. respectively), the Association ofHome Appliance Manufacturers (AHAM) proposed an alternate approach to the LBL-MIM for the analysis ofmanufacturer impacts. The AHAM's approach was formalized

as a computer spreadsheet by the Arthur D. Little consulting firm. It was named the Government Regulatory Impact Model (GRIM) and was formallv proposed to DOE by representatives of the AHAM. the Air-Conditi9ning and Refrigeration Institute. the Gas Appliance Manufacturers Association. and Arthur D. Little on April 15. 1993.

.The primary functional differences between GRIM and LBL-MIM are GRIM's use ofan annual cash-flow analysis for manufacturer costs and restriction to cost predictions. DOE has analyzed the GRIM's cost approach and found that. given identical inputs, its results were similar enough to those of the cost section ofthe LBL-MIM that the LBL-MIM outputs are not significantly affected by the use ofthe GRIM. Because the cash-flow approach
to manufacturer costs is simpler and

more transparent to the industry. DOE intends to analvze the GRIM costanalysis methodology and may integrate the model into the LBL-MIM as a replacement for the cost 8J.'1alysis section ofthe LBL-MIM. The analysis ofthe GRIM and possible adoption will be determined in the Three Product Advance Notice rulemaking and 'the Department expects to use the same methodology in this rulemaking. The Department welcomes comments on this issue.

Ifthe GRIM is adopted. then the capabilities ofthe LBL-MIM necessary to the analysis but not found in the GRIM. such as price and shipments forecasting. will be retained. The GRIM's measure ofimpact and industry
net present value would be included as part ofthe LBL-MIM's primary

measures ofimpact.**5~430** 

### Federal Register I 

### Vol. 59, No. 218 I 

### Monday, November 14, 1994 I 

### Proposed**R~lles** u= 

### edjusted to be consistent with stock $eparticularindustry being analyzed. Unit Energy Consumption values and the analysis examines the possibility of vintage block information onvintage price-cutting while the industry is block shares. efficiencies andsizes. In 

### adjusting to a lower sales volume.
the second step. decision-model 3. Lawrence Berkeley Laboratory calibration. the decision models are Manufacturer Impact Model adjusted to fit the control values specified in the first forecast year. These In orderto estimate the impacts of control values are referred to as

. energy efficiency standards. a computer "control-vear" data. and include the spreadsheet model. the Lawrence marginal"appliai1ce efficiencies and new Berkeley Laboratory Manufacturer purchase shares. Finally. inthe forecast Impact Model (LBL-MIM), was execution step. decision models are developed. used to predict new appliance The LBL-MIM was developed at ownership shares and efficiency Lawrence Berkeley Laboratory in 1988. 

### choices. The algorithmic procedures in Since its inception. it 

### has evolved and each ofthese three steps are detailed in has been used in the analysis and the technical documentation for the reanalysis for numerous Department rulemakings. Appliance Model. The LBL-MIM models the cumulative

Policymodeling. 

### The flexibility of effects ofstandards on the future ofthe REEPS 2.1 

### allows the user to model a number ofpolicies through the industry. and by means ofpresentvalue formulas presents the effects on an judicious modification ofthe annualized basis. appropriate parameters, equations. Ideallv. a manufacturer analvsis
structure. and addition ofnew should iook at the impact ofa proposed technologies. Government and utility regulation on every firm that does policies have the potential to restrict business in the industry underquestion. appliance efficiency levels, energy However. because the industries being prices. financial criteria for new analyzed have many manufacturers equipment purchases, early retirement making a particular product, a firm-byofappliances, andrates oftechnical firm 

### analysis is not feasible. In addition. innovation. The policy choices in the engineering and financial data for REEFS 2.12 

### include: Energy prices. most manufacturing firms are functional forms and coefficients for proprietary and are not routinely choice equations. pre-failure available for public analysis. Because of replacement conversion decision these limitations on data andresources. algorithm, restrictions on legal or the LBL-MIM models a prototypical market**av~ilability** 

### of**speci~c** 

### firm. In

### many cases this firm represents tecru:ologles, and**~odlfication** 

### of. ' a division ofa larger firm. Therefore, a**spec~fic ~echnologles,**  

### purchase pnces or prototype firm is a hypothetical firm efficlencles. representative ofa portion ofthe

c. ManufacturerImpactModels 

### industry. Prototypical firms are defined by parameters that are important for 1. 

### Conceptual Approach determining the impacts ofstandards

The manufacturer impact analysis and are consistent with data for the estimates the overall impact ofnew or portion ofthe industry.they represent. amended standards on an industry's Important parameters used inthe.model profitability and scale ofoperation. include the cost structure ofthe firms.

2. Measures ofImpact

The analysis examines two types of long-run impact: profitability and growth. Consequently. five measures of impact are reported. They are: shipments. prices, revenues, net incomes and returns on equity. Return

on equity is the primary measure of profitability. assets and income provide the primary measures ofgrowth. At the requestj)fappliance manufacturers. a

new measure. net present value ofthe mdustry. will also be reported.

Two short-run impacts are also analyzed. First, the ability ofthe industry to provide the one-time investments required to meet the new standard is examined. Second. if standards result in decreased sales for profitability ratios. relative costs of complying with the new standard. and marketing strategies.

Revenue is affected by both price and shipments. Price is determined by computing the markup over long-run marginal costs and then using the markup to determine an optimal price. Demand is determined by price and operating expense elasticities, coupled with the changes in price and operating
expenses resulting from the standards.

The LBL-MIM produces several outputs used in analyzing the impact of standards on manufacturers. A simplified pro forma income statement is prepared for each prototypical firm. In

### addition to the income statement. five main variables-shipments. prices.

revenues. net incomes, andreturns on equity-arereported. The results are presented for the without-standards (or without amended standards) case and the with-standards (or with amended standards) case. and the relative differences between the two are also given.

4. Integration ofthe La\\TenCe Berkeley Laboratory Manufacturer Impact Model and the Government Regulatory Impact Model

As part ofits comments submitted to theDepartment for the rulemaking on nine consumer products (comments No.
610 

### and 61E 

### dated July 1991 

### and September 9, 1991,

### respectively). the Association ofHome Appliance Manufacturers (AHAM) proposed an alternate approach to the LBL-MIM for the analysis ofmanufacturer impacts. The AHAM's approach was formalized

as a computer spreadsheet by the Arthur D. Little consulting firm. It 

### was named the Government Regulatory Impact Model (GRIM) and was formaHv proposed to DOE by representatives of the AHAM, the Air-Conditi9ning and Refrigeration Institute, the Gas Appliance Manufacturers Association. and Arthur D. Little on April 15, 1993.



### .The primary functional differences between GRIM and LBL-MIM are GRIM's use ofan annual cash-flow analysis for manufacturer costs and restriction to cost predictions. DOE has analyzed the GRIM's cost approach and found that. given identical inputs, its results were similar enough to those of the cost section ofthe LBL-MIM that the LBL-MIM outputs are not significantly affected by the use ofthe GRIM. Because the cash-flow approach
to manufacturer costs is simpler and

more transparent to the industry. DOE intends to analvze the GRIM costanalysis methodology and may integrate the model into the LBL-MIM as a replacement for the cost 8.t"1alysis section ofthe LBL-MIM. The analysis ofthe GRIM and possible adoption will be determined in the Three Product Advance Notice rulemaking and'the Department expects to use the same methodology inthis rulemaking. The Department welcomes comments on this issue.

If

### the GRIM is adopted, then the capabilities ofthe LBL-MIM necessary to the analysis but not found in the GRIM, such as price and shipments forecasting, will be retained. The GRIM's measure ofimpact and industry
net present value would be included as part ofthe LBL-MIM's primary

measures ofimpact.

..**~ 5~430**  

### Federal Register I 

### Vol. 59, No. 218 I 

### Monday, November 14, 1994 I 

### Proposed**R~lles** u= 

### edjusted to be consistent with stock $eparticularindustry being analyzed. Unit Energy Consumption values and the analysis examines the possibility of vintage block information onvintage price-cutting while the industry is block shares. efficiencies andsizes. In 

### adjusting to a lower sales volume.
the second step. decision-model 3. Lawrence Berkeley Laboratory calibration. the decision models are Manufacturer Impact Model adjusted to fit the control values specified in the first forecast year. These In orderto estimate the impacts of control values are referred to as

. energy efficiency standards. a computer "control-vear" data. and include the spreadsheet model. the Lawrence marginal"appliai1ce efficiencies and new Berkeley Laboratory Manufacturer purchase shares. Finally. inthe forecast Impact Model (LBL-MIM), was execution step. decision models are developed. used to predict new appliance The LBL-MIM was developed at ownership shares and efficiency Lawrence Berkeley Laboratory in 1988. 

### choices. The algorithmic procedures in Since its inception. it 

### has evolved and each ofthese three steps are detailed in has been used in the analysis and the technical documentation for the reanalysis for numerous Department rulemakings. Appliance Model. The LBL-MIM models the cumulative

Policymodeling. 

### The flexibility of effects ofstandards on the future ofthe REEPS 2.1 

### allows the user to model a number ofpolicies through the industry. and by means ofpresentvalue formulas presents the effects on an judicious modification ofthe annualized basis. appropriate parameters, equations. Ideallv. a manufacturer analvsis
structure. and addition ofnew should iook at the impact ofa proposed technologies. Government and utility regulation on every firm that does policies have the potential to restrict business in the industry underquestion. appliance efficiency levels, energy However. because the industries being prices. financial criteria for new analyzed have many manufacturers equipment purchases, early retirement making a particular product, a firm-byofappliances, andrates oftechnical firm 

### analysis is not feasible. In addition. innovation. The policy choices in the engineering and financial data for REEFS 2.12 

### include: Energy prices. most manufacturing firms are functional forms and coefficients for proprietary and are not routinely choice equations. pre-failure available for public analysis. Because of replacement conversion decision these limitations on data andresources. algorithm, restrictions on legal or the LBL-MIM models a prototypical market**av~ilability** 

### of**speci~c** 

### firm. In

### many cases this firm represents tecru:ologles, and**~odlfication** 

### of. ' a division ofa larger firm. Therefore, a**spec~fic ~echnologles,**  

### purchase pnces or prototype firm is a hypothetical firm efficlencles. representative ofa portion ofthe

c. ManufacturerImpactModels 

### industry. Prototypical firms are defined by parameters that are important for 1. 

### Conceptual Approach determining the impacts ofstandards

The manufacturer impact analysis and are consistent with data for the estimates the overall impact ofnew or portion ofthe industry.they represent. amended standards on an industry's Important parameters used inthe.model profitability and scale ofoperation. include the cost structure ofthe firms.

2. Measures ofImpact

The analysis examines two types of long-run impact: profitability and growth. Consequently. five measures of impact are reported. They are: shipments. prices, revenues, net incomes and returns on equity. Return

on equity is the primary measure of profitability. assets and income provide the primary measures ofgrowth. At the requestj)fappliance manufacturers. a

new measure. net present value ofthe mdustry. will also be reported.

Two short-run impacts are also analyzed. First, the ability ofthe industry to provide the one-time investments required to meet the new standard is examined. Second. if standards result in decreased sales for profitability ratios. relative costs of complying with the new standard. and marketing strategies.

Revenue is affected by both price and shipments. Price is determined by computing the markup over long-run marginal costs and then using the markup to determine an optimal price. Demand is determined by price and operating expense elasticities, coupled with the changes in price and operating
expenses resulting from the standards.

The LBL-MIM produces several outputs used in analyzing the impact of standards on manufacturers. A simplified pro forma income statement is prepared for each prototypical firm. In

### addition to the income statement. five main variables-shipments. prices.

revenues. net incomes, andreturns on equity-arereported. The results are presented for the without-standards (or without amended standards) case and the with-standards (or with amended standards) case. and the relative differences between the two are also given.

4. Integration ofthe La\\TenCe Berkeley Laboratory Manufacturer Impact Model and the Government Regulatory Impact Model

As part ofits comments submitted to theDepartment for the rulemaking on nine consumer products (comments No.
610 

### and 61E 

### dated July 1991 

### and September 9, 1991,

### respectively). the Association ofHome Appliance Manufacturers (AHAM) proposed an alternate approach to the LBL-MIM for the analysis ofmanufacturer impacts. The AHAM's approach was formalized

as a computer spreadsheet by the Arthur D. Little consulting firm. It 

### was named the Government Regulatory Impact Model (GRIM) and was formaHv proposed to DOE by representatives of the AHAM, the Air-Conditi9ning and Refrigeration Institute, the Gas Appliance Manufacturers Association. and Arthur D. Little on April 15, 1993.



### .The primary functional differences between GRIM and LBL-MIM are GRIM's use ofan annual cash-flow analysis for manufacturer costs and restriction to cost predictions. DOE has analyzed the GRIM's cost approach and found that. given identical inputs, its results were similar enough to those of the cost section ofthe LBL-MIM that the LBL-MIM outputs are not significantly affected by the use ofthe GRIM. Because the cash-flow approach
to manufacturer costs is simpler and

more transparent to the industry. DOE intends to analvze the GRIM costanalysis methodology and may integrate the model into the LBL-MIM as a replacement for the cost 8.t"1alysis section ofthe LBL-MIM. The analysis ofthe GRIM and possible adoption will be determined in the Three Product Advance Notice rulemaking and'the Department expects to use the same methodology inthis rulemaking. The Department welcomes comments on this issue.

If

### the GRIM is adopted, then the capabilities ofthe LBL-MIM necessary to the analysis but not found in the GRIM, such as price and shipments forecasting, will be retained. The GRIM's measure ofimpact and industry
net present value would be included as part ofthe LBL-MIM's primary

measures ofimpact.

..**~**

### Feaeral Register I 

### Vol.' 59. No. 218 I 

### Monday. November 14. 1994 I 

### Proposed Rules 56431

5. Cash-Flow Analysis ofCosts Due to Standards

.

A change in standards affects the analvsis in three distinct ways. Increased levels ofstandards will require additional investment. will raise production costs. and will affect

revenue through higherprices and. possibly. lower quantities sold.

The integrated model using the GRIM
cost analysis uses a number offactorsannual expected revenues; manufacturer
costs such as costs ofsales. selling and general administration costs; taxes; and capital expenditures related to depreciation. new standards. and maintenance-to arrive at a series of annual cash flows beginning from before implementation ofstandards and continuing explicitly for five years after implementation.

The measure ofindustry net present values are calculated by discounting the annual cash flows from the period before implementation ofstandards to

some future point in time.

The revenues are supplied by the price and shipments forecasting algorithms from the LBL-MIM.

6. Data Sources

The models need data that charae<terize both a particular industry and prototypical firms within that industry. Estimates ofdata are based on information from five general sources: Lawrence Berkeley Laboratory business consultation groups; the Engineering Analvsis; the Consumer Analysis; public financial data; and industry profiles.

d. 

### Utility Impact Model

Electric utility impactmodel. The electric utility analysis serves three
purposes within the overall**assess~ent** 

### ofthe impact ofthe proposed stanC1ards. First. it contributes to quantifying the energy savings by determining the reduction in fossil fuels used for electricity generation. Second. the estimated reduction in fossil fuel consumption is an input to the Environmental Assessment. as required by the National Environmental Policy Act. And third. by calculating utility avoided costs. it provides marginal. electricity costs. Avoided cost is calculated by assessing the impacts on the electric utility industry in terms of changes in investment. revenue requirements. and residential load factors.

The electric utility analysis adopts the standard approach that the value of electricity savings. based on marginal
costs. can be broken down into energy savings and capacity savings. The energy component reflects the avoided
cost offuel not bumed at the powerplant by the reduced need to generate electricity. The capacity component measures the avoided cost of financing and building extra generating capacity. The analysis characterizes these avoided costs per KWh 'Ofheating. cooling. and baseload energy saved. The heating and cooling energy includes

. baseload and peak energy. These values

are used to calculate societal benefits from reduced electricity consumption.

The Electric Utility Impact Model calculates avoided energy costs based

on a disaggregation ofthe generation fuel mix to the National Electric Reliability Council regions and a simplified load duration curve for each region. First. the model allocates national electricity savings that are forecasted by the LBL-REM to National Electric Reliability Council regions in proportion to their current consumption ofheating. cooling. and baseload energy. The regional proportions are derived from data on regional appliance saturations. efficiencies. and hours of

use. The fraction ofthe electricity that would have to be generated at the margin from oil and gas is calculated from the total regional oil and gas fraction and the simplified load duration curve. Projected utility natural gas and coal prices. weighted by the oil and gas fraction and the non-oil and gas fraction. respectively. are used to calculate utility marginal costs over the forecast period.The marginal costs are adjusted to account for seasonal differences.

The avoided capacity costcalculation in the model is based on conservation 'load factors for the energy savings attributable to the standards as well as the capacity costs ofa combustion turbine. A conservation load factor is defined as the average hourly energy savings ofa conservation measure divided by its peak load savings. The conservation load factors are a way of characterizing the peak demand savings ofa conservation measure. They are used to convert the capacity value ofthe standards into the per-kWh values described above. The National Electric Reliability Council forecasts ofcapacity requirements for each region are used to account for regional variations in

reserve margin. If

### the National Electric Reliability Council forecasts an adequate reserve margin in a region for

a given year. no value is given to the capacity savings in the region.

The inputs needed for the Utility Impact Model are conservation load factors. state-level utility fuel prices. appliance saturations. efficiencies. and hours ofuse as well as electricity generation by fuel type and capacity need by National Electric Reliabilitv Council region. The outputs ofthe

. analysis are fuel savings. reduction in the need for new generating capacity. and avoided energy and capacity costs for heating. cooling. and baseload appliances per million Btu's ofresource energy.

Gas 

### utility modeling. Because the natural gas supply system does not consist ofvertically integrated suppliers. the gas utility modeling necessarily takes a different approach from the electric utility modeling. Nonetheless. the fundamental goal, to estimate the effect ofproposed standards on utilities and their
customers. is the same. The analysis on the gas side is greatly simplified by the fact that no energy conversion is involved. so that the amount ofnatural gas saved at the burner tip is not very different from the amount that can remain in the ground. The environmental impacts are similarly simple. relative to electricity supply. because most ofthe environmental consequences ofresidential natural gas

use occur at the burner tip. The focus of the gas analysis. therefore. sits squarely

on the cost impact ofproposed standards.

.

The gas utility cost modeling is in two parts. In the first. the effect ofthe standard on the general market for natural gas is estimated. For the purposes ofthis analysis. the result of interest is the city gate price ofnatural gas. That is. the price that local gas distribution companies pay for the gas they later distribute to customers. In general. the sales reductions predicted from residential appliance efficiency standards are not expected to be great enough. or near enough in the future to have a major impact on the North American gas market as a whole. However. to quantify any possible effect. the Department will use a national equilibrium gas supply and transmission model. This model will be

run under a base case that reflects
current EIA forecasts ofgas supply and demand. and policy cases that reflect Department forecasts ofthe effect ofthe proposed standard.

The second part ofthe analysis

concerns the gas market downstream of the city gate. The u.S. has numerous and diverse local natural gas distribution companies. and no individual modeling ofcompanies is feasible. The Department 

### will. therefore. rely on a general econometric model of industry cost structure. Company operating**cost~** 

### are represented in an historic data base covering about 50 

### major U.S. distribution companies. A 

### Feaeral Register 

### I 

### Vol.·59, 

### No. 218 

### I 

### Monday, November 14, 1994 

### I 

### Proposed Rules 56431

5. Cash-Flow Analvsis ofCosts Due to Standards

.

Achange in standards affects the analvsis inthree distinctways. Increased levels ofstandards will require additional investment, will raise production costs, and will affect

revenue through higherprices and. possibly. lowerquantities sold.

The integrated modelusing the GRIM
cost analysis uses a number offactorsannual expected revenues; manufacturer
costs suchas costs ofsales. selling and general administration costs; taxes; and capital expenditures related to depreciation. new standards. and maintenance-to arrive at a series of annual cash flows beginning from before implementation ofstandards and continuing explicitly for five years after implementation.

The measure ofindustry net present values are calculatedby discounting the annual cash flows from the period before implementation ofstandards to

some future point intime.

The revenues are suppliedby the price and shipments forecasting algorithms from the LBL-MIM.

6. Data Sources

The models need data that charae<terize both a particular industry and prototypical firms within that industry. Estimates ofdata are based on information from five general sources: Lawrence Berkeley Laboratory business consultation groups; the Engineering Analvsis; the ConsumerAnalysis; public financial data; and industry profiles.

d. 

### Utility Impact Model

Electric utilityimpactmodel. The electric utility analysis serves three
purposes within the overall**assess~ent** 

### ofthe impact ofthe proposed stanctards. First, it

### contributes to quantifying the
energy savings by determining the reduction in fossil fuels used for electricity generation. Second. the estimated reduction in fossil fuel consumption is an inputto the Environmental Assessment, as required bv the National Environmental Policy Act. And third, by calculatingutility avoided costs, it provides marginal. electricity costs. Avoided cost is calculated by assessing the impacts on the electric utility industry in terms of changes in investment, revenue requirements, andresidential load factors.

The electric utility analysis adopts the standard approach that the value of electricity savings, based on marginal costs, can be broken down into energy savings and capacity savings. The energy component reflects the avoided
cost offuel not burned atthe powerplantby the reduced need to generate electricity. The capacity componentmeasures the avoided cost of financing andbuilding extra generating capacity. The analysis characterizes these avoided costs perKWh "Ofheating. cooling. and baseload energy saved. The heating and cooling energy includes

. baseload and peak energy. These values

are used to calculate societalbenefits from reduced electricity consumption.

TheElectric Utility Impact Model calculates avoided energy costs based

on a disaggregation ofthe generation fuel mix to the National Electric Reliability Council regions and a simplified load duration curve for each region. First, the model allocates national electricity savingsthat are forecasted by the LBL-REM to National Electric Reliability Council regions in proportion to their current consumption ofheating. cooling, andbaseload energy. The regional proportions are derived from data on regional appliance saturations, efficiencies, and hours of

use. The fraction oftheelectricity that would have to be generated at the margin from oil and gas is calculated from the total regional oiland gas fraction and the Simplified load duration curve. Projected utility natural gas and coal prices. weightedbythe oil and gas fraction and the non-oil and gas fraction. respectively. are used to calculate utility marginal costs overthe forecast period. The marginal costs are adjusted to account for seasonal differences.

The avoided capacity castcalculation in the model is based on conservation 'load factors for the energy savings attributable to the standards as well as the capacity costs ofa combustion turbine. A conservation load factor is defined as the average hourly energy savings ofa conservation measure divided by itspeak load savings. The conservation load factors are a way of characterizing the peak demand savings ofa conservation measure. They are used to convertthe capacityvalue ofthe standards into theper-kWh values described above. The National Electric Reliability Council forecasts ofcapacity requirements for each region are usedto account for regional variations in

reserve margin. If

### the National Electric Reliability Council forecasts an adequate reserve margin in a region for

a given year. no value is given to the capacity savings in the region.

The inputs needed for the Utility Impact Model are conservation load factors. state-level utility fuel prices. appliance saturations, efficiencies. and hours ofuse as well as electricity generation by fuel type and capacity needby National Electric Reliabilitv Council region. The outputs ofthe

. analysis are fuel savings, reduction in the need for new generating capacity. and avoided energy and capacity costs for heating. cooling. andbaseload appliances permillion Btu's ofresource energy.

Gas 

### utilitymodeling. Because the natural gas supply system does not consist ofvertically integrated suppliers. the gas utility modeling necessarily takes a different approach from the electric utility modeling. Nonetheless. the fundamental goal. to estimate the effect ofproposed standards on utilities and their customers, is the same. The analysis on the gas side is greatly Simplified by the fact that no energy conversion is involved, so that the amount ofnatural gas saved at the burnertip is not very different from the amount that can remain inthe ground. The environmental impacts are Similarly simple. relative to electricity supply, because most ofthe environmental consequences ofresidential natural gas

use occur at the burnertip. The focus of the gas analysis. therefore, sits squarely

onthe cost impact ofproposed standards.

.

The gas utility cost modeling is in two parts. In the first. the effect ofthe standard on the general market for natural gas is estimated. For the purposes ofthis analysis, the result of interest is the city gate price ofnatural gas. That is. the price that local gas distribution companies pay for the gas they later distribute to customers. In general. the sales reductions predicted from residential appliance efficiency standards are not expected to be great enough. or near enough in the future to have a major impact on the North American gas market as a whole. However. to quantify any possible effect. the Department will use a national equilibrium gas supply and transmission model. This model will be

run under a base case that reflects
current EIA forecasts ofgas supply and demand. and policy cases that reflect Department forecasts ofthe effect ofthe proposed standard.

The second part ofthe analysis

concerns the gas market downstream of the city gate. The U.S. has numerous and diverse local natural gas distribution companies. and no individual modeling ofcompanies is feasible. The Department 

### will. therefore. rely on a general econometric model of industry cost structure. Company operating**cost~** 

### are represented in an historic data base covering about 50 

### major U.S. distribution companies. A 

### Feaeral Register 

### I 

### Vol.·59, 

### No. 218 

### I 

### Monday, November 14, 1994 

### I 

### Proposed Rules 56431

5. Cash-Flow Analvsis ofCosts Due to Standards

.

Achange in standards affects the analvsis inthree distinctways. Increased levels ofstandards will require additional investment, will raise production costs, and will affect

revenue through higherprices and. possibly. lowerquantities sold.

The integrated modelusing the GRIM
cost analysis uses a number offactorsannual expected revenues; manufacturer
costs suchas costs ofsales. selling and general administration costs; taxes; and capital expenditures related to depreciation. new standards. and maintenance-to arrive at a series of annual cash flows beginning from before implementation ofstandards and continuing explicitly for five years after implementation.

The measure ofindustry net present values are calculatedby discounting the annual cash flows from the period before implementation ofstandards to

some future point intime.

The revenues are suppliedby the price and shipments forecasting algorithms from the LBL-MIM.

6. Data Sources

The models need data that charae<terize both a particular industry and prototypical firms within that industry. Estimates ofdata are based on information from five general sources: Lawrence Berkeley Laboratory business consultation groups; the Engineering Analvsis; the ConsumerAnalysis; public financial data; and industry profiles.

d. 

### Utility Impact Model

Electric utilityimpactmodel. The electric utility analysis serves three
purposes within the overall**assess~ent** 

### ofthe impact ofthe proposed stanctards. First, it

### contributes to quantifying the
energy savings by determining the reduction in fossil fuels used for electricity generation. Second. the estimated reduction in fossil fuel consumption is an inputto the Environmental Assessment, as required bv the National Environmental Policy Act. And third, by calculatingutility avoided costs, it provides marginal. electricity costs. Avoided cost is calculated by assessing the impacts on the electric utility industry in terms of changes in investment, revenue requirements, andresidential load factors.

The electric utility analysis adopts the standard approach that the value of electricity savings, based on marginal costs, can be broken down into energy savings and capacity savings. The energy component reflects the avoided
cost offuel not burned atthe powerplantby the reduced need to generate electricity. The capacity componentmeasures the avoided cost of financing andbuilding extra generating capacity. The analysis characterizes these avoided costs perKWh "Ofheating. cooling. and baseload energy saved. The heating and cooling energy includes

. baseload and peak energy. These values

are used to calculate societalbenefits from reduced electricity consumption.

TheElectric Utility Impact Model calculates avoided energy costs based

on a disaggregation ofthe generation fuel mix to the National Electric Reliability Council regions and a simplified load duration curve for each region. First, the model allocates national electricity savingsthat are forecasted by the LBL-REM to National Electric Reliability Council regions in proportion to their current consumption ofheating. cooling, andbaseload energy. The regional proportions are derived from data on regional appliance saturations, efficiencies, and hours of

use. The fraction oftheelectricity that would have to be generated at the margin from oil and gas is calculated from the total regional oiland gas fraction and the Simplified load duration curve. Projected utility natural gas and coal prices. weightedbythe oil and gas fraction and the non-oil and gas fraction. respectively. are used to calculate utility marginal costs overthe forecast period. The marginal costs are adjusted to account for seasonal differences.

The avoided capacity castcalculation in the model is based on conservation 'load factors for the energy savings attributable to the standards as well as the capacity costs ofa combustion turbine. A conservation load factor is defined as the average hourly energy savings ofa conservation measure divided by itspeak load savings. The conservation load factors are a way of characterizing the peak demand savings ofa conservation measure. They are used to convertthe capacityvalue ofthe standards into theper-kWh values described above. The National Electric Reliability Council forecasts ofcapacity requirements for each region are usedto account for regional variations in

reserve margin. If

### the National Electric Reliability Council forecasts an adequate reserve margin in a region for

a given year. no value is given to the capacity savings in the region.

The inputs needed for the Utility Impact Model are conservation load factors. state-level utility fuel prices. appliance saturations, efficiencies. and hours ofuse as well as electricity generation by fuel type and capacity needby National Electric Reliabilitv Council region. The outputs ofthe

. analysis are fuel savings, reduction in the need for new generating capacity. and avoided energy and capacity costs for heating. cooling. andbaseload appliances permillion Btu's ofresource energy.

Gas 

### utilitymodeling. Because the natural gas supply system does not consist ofvertically integrated suppliers. the gas utility modeling necessarily takes a different approach from the electric utility modeling. Nonetheless. the fundamental goal. to estimate the effect ofproposed standards on utilities and their customers, is the same. The analysis on the gas side is greatly Simplified by the fact that no energy conversion is involved, so that the amount ofnatural gas saved at the burnertip is not very different from the amount that can remain inthe ground. The environmental impacts are Similarly simple. relative to electricity supply, because most ofthe environmental consequences ofresidential natural gas

use occur at the burnertip. The focus of the gas analysis. therefore, sits squarely

onthe cost impact ofproposed standards.

.

The gas utility cost modeling is in two parts. In the first. the effect ofthe standard on the general market for natural gas is estimated. For the purposes ofthis analysis, the result of interest is the city gate price ofnatural gas. That is. the price that local gas distribution companies pay for the gas they later distribute to customers. In general. the sales reductions predicted from residential appliance efficiency standards are not expected to be great enough. or near enough in the future to have a major impact on the North American gas market as a whole. However. to quantify any possible effect. the Department will use a national equilibrium gas supply and transmission model. This model will be

run under a base case that reflects
current EIA forecasts ofgas supply and demand. and policy cases that reflect Department forecasts ofthe effect ofthe proposed standard.

The second part ofthe analysis

concerns the gas market downstream of the city gate. The U.S. has numerous and diverse local natural gas distribution companies. and no individual modeling ofcompanies is feasible. The Department 

### will. therefore. rely on a general econometric model of industry cost structure. Company operating**cost~** 

### are represented in an historic data base covering about 50 

### major U.S. distribution companies. A

### 56432 Federal Register I 

### Vof. 59. No. 218 I 

### Monday. 

### November 1.4. 

### 1994 I 

### Proposed**Ru~es**

translog econometric cost function will be fitted to these data and then applied

as a forecasting tooL The inputs to this model are twofold; (1) the same base r.ase-and policy case demand forecasts. reduced to local company levels: and (2) the base and policy case city gate price forecasts derived from the market-wide analysis. The results ofthe econometric modeling will show the effects ofthe proposed standard on a typical local distribution company and its customers.

e. SensitivityAnal}'S8s

Sensitivity studies are perfonned to determine how changes in technical and operational parameters affect key engineering and economic indicators used in evaluation ofappliance standards.This makes it possible to place limits on the overall results ofthe analysis and to gain an understanding of which variables are most important in producing these results. Sensitivity analyses are developed in a series of distinct steps. Foreach component analysis in the overall analysis. critical input parameters are identified and reasonable ranges ofvariation determined. The sensitivity ofthe model to changes in the value ofeach important parameter is then estimated by running the model for both the base

case and the standards cases. The results ofthe sensitivity analyses are examined to determine the sensitivity of the forecasts to exogenous variables and assumptions and the sensitivity ofthe differences between the base and standards cases (impacts ofalternative standards).

The sensitivity analyses have been developed at the national level and no effort has been made to link them with
any specific population groups. The standards analvsis assumes that nationv.'ide average appliance usage rates. energy prices. and efficiency apply to all consumers in all areas ofthe nation. although the Department recognizes that there exist large**~'ariations** in each ofthese factors. The Department requested in the Three Product Advance Notice infonnation concerning the extent to which any proposed national efficiency standard is likely to affect identifiable groups of consumerS disproportionaily and how best to consider such impacts in the selection ofefficiencv standard levels. The Department also"requested additional data to help it better assess the disproportionate impacts on such
groups. The Department expects to use the same approach that emerges in the Three Product Advance Notice rulemaking in this rolemaking. The Dt:lpartment welcomes comments on this \ssue. IV. Public ColllIOOnt Procedures

a. Participation in Rulemaking

The Departmentencourages the maximum level ofpublic participation possible in this rolemaking. Individual

consumers. representatives ofconsumer groups. manufacturers. associations. States orothergovernmental entities. utilities. retailers. distributoxs. manufacturers. and others are urged to submit written statements on the proposal.

the Departmenthas established a period of75 days following publication ofthis notice for persons to comment on this proposal. All public comments received will be available for review in the Department's Freedom of Information Reading Room.

b. Written Comment

### Procedures

Interested persons are invited to participate in this proceeding by submitting written data. views, or arguments with respect to the subjects
set forth in this notice. Instructions for submitting written comments 

### are set forth at the beginning ofthis notice and below.

Comments should be labeled both on the envelope and on the documents. "Three Cleaning Products Rulemaking (Docket No. EE-RM-94-403)." and must be received by the date specified at the beginning ofthis notice. Ten copies are requested to be submitted. Additionally. the Department would appreciate an electronic copy ofthe comments to the
extent possible. The Department is currently using WordPerfectTM 5.1. All
comments and otherrelevant information received by the date specified at the beginning ofthis notice will be considered by the Department in the proposed role.

All written comments received on the Advance Notice ofProposed Ruiemaking will be available for public inspection at the Freedom of Information Reading Room. 

### as provided
at the beginning ofthis notice.

Pursuant to the provisions of 10 CFR 1004.11. any person submitting infonnation or data that is believed to be confidential and exempt by law from public disclosure should submit one complete copy ofthe document and ten (1.0) copies. ifpossible. from which the information believed to be confidential has been deleted. The Department will make its own determination with regard
to the confidential status ofthe information or data and treat it according to its determination.

Factors ofinterest to the Department. when evaluating requests to treat information as confidential. include: (1) A description ofthe item: (2) an indication as to whether and why such items ofinfonnation have been treated by the submiUing party as confidential. and whether and why such items are customarily treated as confidential. and whether and why such items are customarily treated as confidential \\dthin the industry; (3) whetherthe information is generally known or available from other**sources~** (4) whether the information has previously been available to others without obligation concerning its confidentiality: (5) an explanation ofthe competitive injury to the submitting
person that would result from public disclosure:{6) an indication as to when such infonnation might lose its confidential character due to the
passage oftime: and (7) whether disclosure ofthe information would be in the public interest.


### c.lssuesfor Public Comment

The Department is interested in receiving comments and data concerning the accuracy and workability ofthis methodology. Also. the Departmentwelcomes discussion on improvements or alternatives to this approach. In particular. the Department is interested in gathering data on the follOWing:

• Descriptive and performance characteristics for baseline models of each product class that are the subject ofthis rnlemaking; these baseline models should be those satisfying the appropriate standards;

• Proposed productclasses for products in this**rolemaking~**

• Costs ofbaseline models and incremental costs ofdesigns improving the energy efficiency ofthe products that are the subject ofthis rnlemaking:

• Appropriateness ofexisting and proposed. test procedures to the proposed design options: specifically. the Department would like comments

on whether 

### a clothes washer that

consumes more energy for a higher percentage ofwater extraction (thus. lower clothes dryer energy consumption) should be given a credit and if

### so. how much; and

• Data on lifetimes ofthe appliances. The Department requested information on the issues listed below in the Three Product Advance Notice .issued in September 1993. However. the Department encourages commenters to provide any additional infonnation on these issues which may not have been presented in response to the Department's Three Product Advance Notice. These issues are as follows:

• The relevance ofthe data inputs and outputs ofthe LBL-REM and LBLMIM models. whether these models 

### 56432 

### Federal Register I 

### Vof. 59. No. 218 t 

### Monday. November 1.4. 

### 1994 I 

### Proposed**Ru~es**

translogeconometriccost function will be fitted tothesedataand then applied

as a forecasting tooL The inputs to this model aretwofold; (1) the same base r.ase-and policycasedemand forecasts. reduced tolocalcompany levels: and (2) the baseand policy casecitygate price forecasts derived from themarket-wide analysis. The results ofthe econometric modeling willshowtheeffects ofthe proposed standardona typical local distributioncompanyand itscustomers..

e. 

### SensitivityAnal}"S8s

Sensitivitystudiesare perfonned to determine howchangesin technical and operational parametersaffect key engineeringandeconomicinrucators used inevaluationofappliance standards.This makes itpossible to place limits on theoverallresults ofthe analysis andto gain an understandingof which variables are most importantin producingthese results. Sensitivity analyses are developed in a series of distinct steps. Foreachcomponent analysis in the overall analysis. critical input parameters are identified and reasonableranges ofvariation determined. Thesensitivity ofthe model to changes in the value ofeach -important parameteris thenestimated byrunningthemodel for boththe base

case and the standards cases. The results ofthe sensitivity analyses are examined to determine the sensitivityof the forecasts to exogenous variables and assumptions andthesensitivity ofthe differences between thebase and standards cases (impacts ofalternative standards).

The sensitivity analyses have been developed at the national level andno effort has been madeto linkthem with
any specific population groups. The standardsanalvsisassumes that nationwide average appliance usage rates. energy prices. and efficiency apply to allconsumers inall areas ofthe nation. although theDepartment recognizes that there exist large**~'ariations** in eachofthese factors. The Department requested in the Three Product Advance Notice information concerningthe extent to which any proposed national efficiency standardis likely to affect identifiable groups of consumerS disproportionaUy andhow best to considersuchimpacts in the selection ofefficiencv standard levels. The Department also'requested additional data to belp it betterassess the disproportionate impacts on such
groups. The Department expects touse the sameapproach thatemerges in the Three Product Advance Notice rulemaking in this rulemaking. The Dt:lpartment welcomes commentson this \ssue. IV. PublicColllIOOnt Procedures

a. 

### Participation in 

### Rulemaking

TheDepartmentencourages the maximum level ofpublicparticipation possible inthisrulemaking. Individual

consumers. representatives ofconsumer groups. manufacturers. associations. Statesorothergovernmental entities. utilities. retailers.rustributoxs. manufacturers.andothers are urged to submit writtenstatements onthe

# P~partment has established

### a period of75 daysfollowing publication ofthis noticefor persons tocommenton this proposal. All publiccomments received willbeavailable for review in the Department's Freedom of Information Reading Room.



### b. Written CommentProcedures

Interested persons are invited to participatein this proceedingby submittingwritten data. views. or arguments with respect to the subjects
set forth in this notice. Instructions 

### for submitting written comments

### are set forth at thebeginningofthis notice 

### and below.

Comments shouldbe labeledboth on theenvelope and on the documents. "ThreeCleaning Products Rulemaking (DocketNo. EE-RM-94-403)," and must bereceivedby the date specifiedat the beginningofthisnotice. Ten copies are requested tobe submitted. Additionally. theDepartmentwould appreciatean electroniccopyofthecommentsto the
extent possible. TheDepartmentis currently using WordPerfectTM 5.1.All
comments andotherrelevant information receivedby the date specified atthebeginning ofthis notice will be considered by the Department in the proposed rule.

All writtencommentsreceived on the AdvanceNotice ofProposed Ruiemaking will be available for public inspection at the Freedom of Information Reading Room. 

### as provided
at the beginning ofthis notice.

Pursuantto the provisions of 10CFR 1004.11. any person submitting infonnation ordatathat is believed to be confidential and exemptby law from public disclosure should submit one completecopyofthedocument and ten (1.0) copies. ifpossible. from which the information believed to beconfidential hasbeen deleted. The Departmentwill makeitsown determination with regard
totheconfidentialstatus ofthe information ordataend treat it according to its determination.

Factors ofinterestto the Department. when evaluating requests to treat information asconfidential. include: (1) A description ofthe item: (2) an indicationasto whetherand why such items ofinfonnationhavebeen treated bythe submittingparty as confidential. and whetherandwhy suchitemsare customarilytreated asconfidential. and whether andwhy such items are customarilytreated as confidential \\dthin theindustry; (3) whetherthe information isgenerally known or available from other**sources~** (4) whetherthe information has previously been availableto others without obligation concerning its confidentiality; (5) an expianation ofthe competitiveinjurytothe submitting
person that would resuit from public rusclosure;{6) anindication as to when suchinfonnationmight lose its confidentialcharacterdueto the
passage oftime; and (7) whether disclosure oftheinfonnation would be inthe publicinterest.



### c.lssuesfor Public Comment

TheDepartment is interested in receivingcomments anddata concerning the accuracy and workability ofthis methodology. Also. theDepartmentwelcomes discussion on improvementsoralternatives tothis approach. In particular. theDepartment is interested in gathering data on the follOWing:

• Descriptive and perfonnance characteristics for baseline models of each productclass that are the subject ofthis rulemaking: these baseline models should be tbose satisfyingthe appropriate standards:

• Proposed productclasses for products in this rulemaking;

• Costs ofbaseline models and incremental costs ofdesigns improving the energy efficiency ofthe products tbat are the subject ofthis rulemaking:

• Appropriateness ofexisting and proposedtest procedures to the proposed design options: specifically. theDepartmentwould like comments

on whether

### a clotheswasherthat

consumes more energy for 

### a higher percentageofwaterextraction (thus. lowerclothes dryerenergy consumption) shouldbe given a credit and if

### so. how much: and

• Data on lifetimes ofthe appliances. TheDepartmentrequested information ontheissues listed below intheThree ProductAdvance Notice .issuedin September 1993. However. the Department encourages commentersto provide any additional infonnation on these issueswbich may not have been presented inresponse to the Department'sThree Product Advance Notice. These issues are as follows:

• The relevance ofthe data inputs andoutputs ofthe LBL-REM and LBLMIMmodels. whetherthese models 

### 56432 

### Federal Register I 

### Vof. 59. No. 218 t 

### Monday. November 1.4. 

### 1994 I 

### Proposed**Ru~es**

translogeconometriccost function will be fitted tothesedataand then applied

as a forecasting tooL The inputs to this model aretwofold; (1) the same base r.ase-and policycasedemand forecasts. reduced tolocalcompany levels: and (2) the baseand policy casecitygate price forecasts derived from themarket-wide analysis. The results ofthe econometric modeling willshowtheeffects ofthe proposed standardona typical local distributioncompanyand itscustomers..

e. 

### SensitivityAnal}"S8s

Sensitivitystudiesare perfonned to determine howchangesin technical and operational parametersaffect key engineeringandeconomicinrucators used inevaluationofappliance standards.This makes itpossible to place limits on theoverallresults ofthe analysis andto gain an understandingof which variables are most importantin producingthese results. Sensitivity analyses are developed in a series of distinct steps. Foreachcomponent analysis in the overall analysis. critical input parameters are identified and reasonableranges ofvariation determined. Thesensitivity ofthe model to changes in the value ofeach -important parameteris thenestimated byrunningthemodel for boththe base

case and the standards cases. The results ofthe sensitivity analyses are examined to determine the sensitivityof the forecasts to exogenous variables and assumptions andthesensitivity ofthe differences between thebase and standards cases (impacts ofalternative standards).

The sensitivity analyses have been developed at the national level andno effort has been madeto linkthem with
any specific population groups. The standardsanalvsisassumes that nationwide average appliance usage rates. energy prices. and efficiency apply to allconsumers inall areas ofthe nation. although theDepartment recognizes that there exist large**~'ariations** in eachofthese factors. The Department requested in the Three Product Advance Notice information concerningthe extent to which any proposed national efficiency standardis likely to affect identifiable groups of consumerS disproportionaUy andhow best to considersuchimpacts in the selection ofefficiencv standard levels. The Department also'requested additional data to belp it betterassess the disproportionate impacts on such
groups. The Department expects touse the sameapproach thatemerges in the Three Product Advance Notice rulemaking in this rulemaking. The Dt:lpartment welcomes commentson this \ssue. IV. PublicColllIOOnt Procedures

a. 

### Participation in 

### Rulemaking

TheDepartmentencourages the maximum level ofpublicparticipation possible inthisrulemaking. Individual

consumers. representatives ofconsumer groups. manufacturers. associations. Statesorothergovernmental entities. utilities. retailers.rustributoxs. manufacturers.andothers are urged to submit writtenstatements onthe

# P~partment has established

### a period of75 daysfollowing publication ofthis noticefor persons tocommenton this proposal. All publiccomments received willbeavailable for review in the Department's Freedom of Information Reading Room.



### b. Written CommentProcedures

Interested persons are invited to participatein this proceedingby submittingwritten data. views. or arguments with respect to the subjects
set forth in this notice. Instructions 

### for submitting written comments

### are set forth at thebeginningofthis notice 

### and below.

Comments shouldbe labeledboth on theenvelope and on the documents. "ThreeCleaning Products Rulemaking (DocketNo. EE-RM-94-403)," and must bereceivedby the date specifiedat the beginningofthisnotice. Ten copies are requested tobe submitted. Additionally. theDepartmentwould appreciatean electroniccopyofthecommentsto the
extent possible. TheDepartmentis currently using WordPerfectTM 5.1.All
comments andotherrelevant information receivedby the date specified atthebeginning ofthis notice will be considered by the Department in the proposed rule.

All writtencommentsreceived on the AdvanceNotice ofProposed Ruiemaking will be available for public inspection at the Freedom of Information Reading Room. 

### as provided
at the beginning ofthis notice.

Pursuantto the provisions of 10CFR 1004.11. any person submitting infonnation ordatathat is believed to be confidential and exemptby law from public disclosure should submit one completecopyofthedocument and ten (1.0) copies. ifpossible. from which the information believed to beconfidential hasbeen deleted. The Departmentwill makeitsown determination with regard
totheconfidentialstatus ofthe information ordataend treat it according to its determination.

Factors ofinterestto the Department. when evaluating requests to treat information asconfidential. include: (1) A description ofthe item: (2) an indicationasto whetherand why such items ofinfonnationhavebeen treated bythe submittingparty as confidential. and whetherandwhy suchitemsare customarilytreated asconfidential. and whether andwhy such items are customarilytreated as confidential \\dthin theindustry; (3) whetherthe information isgenerally known or available from other**sources~** (4) whetherthe information has previously been availableto others without obligation concerning its confidentiality; (5) an expianation ofthe competitiveinjurytothe submitting
person that would resuit from public rusclosure;{6) anindication as to when suchinfonnationmight lose its confidentialcharacterdueto the
passage oftime; and (7) whether disclosure oftheinfonnation would be inthe publicinterest.



### c.lssuesfor Public Comment

TheDepartment is interested in receivingcomments anddata concerning the accuracy and workability ofthis methodology. Also. theDepartmentwelcomes discussion on improvementsoralternatives tothis approach. In particular. theDepartment is interested in gathering data on the follOWing:

• Descriptive and perfonnance characteristics for baseline models of each productclass that are the subject ofthis rulemaking: these baseline models should be tbose satisfyingthe appropriate standards:

• Proposed productclasses for products in this rulemaking;

• Costs ofbaseline models and incremental costs ofdesigns improving the energy efficiency ofthe products tbat are the subject ofthis rulemaking:

• Appropriateness ofexisting and proposedtest procedures to the proposed design options: specifically. theDepartmentwould like comments

on whether

### a clotheswasherthat

consumes more energy for 

### a higher percentageofwaterextraction (thus. lowerclothes dryerenergy consumption) shouldbe given a credit and if

### so. how much: and

• Data on lifetimes ofthe appliances. TheDepartmentrequested information ontheissues listed below intheThree ProductAdvance Notice .issuedin September 1993. However. the Department encourages commentersto provide any additional infonnation on these issueswbich may not have been presented inresponse to the Department'sThree Product Advance Notice. These issues are as follows:

• The relevance ofthe data inputs andoutputs ofthe LBL-REM and LBLMIMmodels. whetherthese models__**~==~cco=** _



## ------------

Federal Register 

### I 

### Vol. 59, 

### No. 218 

### I 

### Monday, November 14. 1994 / 

### Proposed Rules 56433

could or should capture the cumulative effects ofFederal energy conservation standards on multi-product appliance manufacturers and whether or not there

are acceptable alternative models that could be used, such as REEFS or GRIM;

• Analytic bases and methods of calculating the dollar value ofreduced atmospheric emissions ofS02, N02

, and C02 from reduced energy consumption:

• Data on consumer financing of appliances useful for obtaining a weighted-average discount rate; and

• Data on the possible adverse affects ofstandards on identifiable groups of

consumers that experience belowaverage utility or usage rates.

The Department has been unable to identify the financial characteristics of small manufacturers. For purposes of this analysis, small manufacturers' costs

are assumed to equal those ofmedium manufacturers. The Department is especially interested in learning ofthe existence ofsmall manufacturers and in obtaining costing data from such manufacturers ofthe products under consideration.

Forthe Residential Energy Model analysis, the Department requests interested parties to provide historical data on shipments and average efficiencies by class for the products subject to the proposed rulemaking. Data on consumer prices and on the installation and maintenance expenses ofthese appliances are also requested.

The manufacturer analysis needs financial data from the product division level. All ofthese data are available at the firm level; but since firms are typically much larger than the relevant division. the firm data may give a misleading indication ofthe division's finances.

An income statement and balance sheet at the division level would be
most helpful. Ifthis is not available, then data on the following variables are considered most essential: Net income,

revenue. selling and general and administrative costs, engineering costs. costs ofgoods sold, interest. taxes, debtto-equity raao, net depreciable assets,
net assets, capital investment. and longterm debt.

The Department also welcomes
current data on unit sales and revenues for the industries as a whole.

V. Review Under Executive Order 12866

Today's regulatory action has been determined to be an "economically significant regulatory action" under Executive Order 12866, "Regulatory Planning and Review," (58 FR 51735, October 4.1993). Accordingly. today's action was subject to review under the Executive Orderby the Office of Information and Regulatory Affairs (OIRA).

There were no substantive changes
oetween the draft submitted to OIRA and today's action.

•The draft oftoday's action and any other documents submitted to OIRA for review have been made a part ofthe rulemaking record and 

### are available for public review in the Department's Freedom ofInformation Reading Room. 1000 Independence Avenue SW. Washington. DC 20585 between the hours of9:00 and 4:00. Monday through Friday. telephone (202) 586-6020.

Issued in Washington, DC. on November 2. 1994. Christine A. Ervin,
Assistant Secretary. EnergyEfficiencyand Renewable Energy. [FR Doc. 94-28044 Filed 11-10-94: 8:45 ami

61LUNG CODE 6450-01-P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39
[Docket No. 944.1M-141-AD]

Airworthiness Directives; Airbus Model A320 Series Airplanes

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice ofproposed rulemaking (NPRM).

SUMMARY: This document proposes the adoption ofa new airworthiness directi'.:e (AD) that is applicable to certain Airbus Model A320 series airplanes. This proposal would require replacement ofthe check valves ofthe thrust reverser with modified valves on certain airplane configurations and the replacement ofthe manual control valves ofthe thrust reverser with modified valves on certain other airplane configurations. This proposal is prompted by recent engineering analysis. which revealed that ifthe nonreturn valve installed on the hydraulic
return line ofthe thrust reverser were to jam in the closed position, it could

cause pressurization ofthe Hydraulic Control Unit (HCU). The actions specified by the proposed AD are intended to prevent possible pressurization ofthe HCU, due to jamming ofthe non-return valve in the hydraulic return line. and consequent deployment ofa thrust reverser during flight. which could affect the controllability ofthe-airplane.

OATES: Comments must be received by December 27,1994. ADDRESSES: Submit comments in triplicate to the Federal Aviation Administration (FAA), Transport Airplane Directorate, ANM-103, Attention: Rules Docket No. 94-NM141-AD, 1601 Lind Avenue. SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9:00 a.m. and 3:00
p.m., Monday through Friday, except Federal holidays.

The service information referenced in the proposed rule may be obtained from Airbus Industrie, 1 Rond Point Maurice Bellonte.31707 Blagnac Cedex, France. This information mav be examined at the FAA. Transport Airplane Directorate. 1601 Lind Avenue, S\V

.. Renton. Washington.

FOR FURTHER INFORMATION CONTACT: Stephen Slotte, Aerospace Engineer. Standardization Branch. ANM-113. FAA. Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton. Washington 98055-4056; telephone (206) 227-2797; fax (206) 227-1320.

SUPPLEMENTARY INFORMATION:
Comments Invited

Interested persons are invited to participate in the making ofthe proposed rule by submitting such written data. views. or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments. specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light ofthe comments receh'ed.

Comments are specifically invited on the overall regulatory. economic, environmental. and energy aspects of the proposed rule. All comments submitted will be available. both before and after the closing date for comments. in the Rules Docket for examination bv interested persons. A report

. summarizing each FAA-public contact concerned with the substance ofthis proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt oftheir comments submitted in response to this notice
must submit a self-addressed, stamped postcard on which the follOWing

- statement is made; "Comments to Do<::ket Number 94-NM-141-AD." The postcard will be date stamped and returned to the commenter. Availability ofNPRMs

Any person may obtain a copy or \'-·is NPRM by submitting a request to tIlt' 

### . Federal Register 

### I Vol. 

### 59, No. 

### 218 

### I Monday, November 14. 

### 1994 / Proposed Rules 

### 56433

could or should capture thecumulative effects ofFederal energy conservation standards on multi-product appliance manufacturers and whetherornot there

are acceptable alternative models that could beused, such as REEFS or GRIM;

• Analytic bases and methods of calculating the dollar value ofreduced atmospheric emissions ofS02, N02

, and C02 from reduced energy consumption;

• Data on consumer financing of appliances useful for obtaining a weighted-average discount rate; and

• Data on the possible adverse affects ofstandards onidentifiable groups of

consumers thatexperience belowaverage utility orusage rates.

The Department has been unable to identifythe financial characteristics of small manufacturers. For purposes of this analysis, small manufacturers' costs

are assumed to equal those ofmedium manufacturers. The Department is especially interested in learning ofthe existence ofsmall manufacturers and in obtaining costing data from such manufacturers ofthe products under consideration.

Forthe Residential Energy Model analysis, the Department requests interested parties to provide historical data on shipments and average efficiencies by class for the products subject to the proposed rulemaking. Data on consumer prices and on the installation and maintenance expenses ofthese appliances are also requested.

The manufacturer analysis needs financial data from the product division level. All ofthese data are available at the firm level; but since firms are typically much largerthan the relevant division, the firm data may give a misleading indication ofthe division's finances.

A.n income statement and balance sheet at the division level would be
most helpful. Ifthis is not available. then data on the following variables are considered most essential: Net income.

revenue. selling and general and administrative costs, engineering costs. costs ofgoods sold, interest, taxes. debtto-equity raao. net depreciable assets, net assets, capital investment, and longterm debt.

The Department also welcomes
current data on unit sales and revenues for the industries as a whole.

V. Review Under Executive Order 12866

Today's regulatory action has been determined to be an "economically significant regulatory action" under Executive Order 12866. "Regulatory Planning and Review," (58 FR 51735, October4,1993). Accordingly, today's action was subject to review under the Executive Orderby the Office of Information and Regulatory Affairs (OIRA).

There were no substantivechanges
oetween the draft submittedto OIRA and today's action.

•The draft oftoday's action and any other documents submitted to OIRA for review have been made a part ofthe rulemaking record and are available for public review in the Department's Freedom ofInformation Reading Room, 1000 Independence Avenue SW. Washington. DC 20585 between the hours of9:00 and 4:00, Monday through Friday, telephone (202) 586-6020.

Issued in Washington. DC, on November 2. 1994. Christine A. Ervin,
AssistantSecretary. EnergyEfficiencyand RenewableEnergy. [FR Doc. 94-28044 Filed 11-10-94: 8:45 ami

61LUNG CODE 6450-01-P

OEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39
[Docket No.**9~M-141-AD]** Airworthiness Oirectives; Airbus Model A320 Series Airplanes

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice ofproposed rulemaking (NPRM).

SUMMARY: This document proposes the adoption ofa new airworthiness directj'l,:e (AD) that is applicable to certain Airbus Model A320 series airplanes. This proposal would require replacement ofthe check valves ofthe thrust reverser with modified valves on certain airplane configurations and the replacement ofthe manual control valves ofthe thrust reverserwith modified valves on certain other airplane configurations. This proposal is prompted by recent engineering analysiS. which revealed that ifthe nonretum valve installed on the hydraulic
return line ofthethrust reverser were to jam in the closed position. it could

cause pressurization ofthe Hydraulic Control Unit (HCU). The actions specified bythe proposed AD are intended to prevent possible pressurization ofthe HCU, due to jamming ofthe non-return valve in the hydraulic return line, and consequent deployment ofa thrust reverser during flight. which could affect the controllability ofthe'airplane.

OATES: Comments must be received by December 27,1994. ADDRESSES: Submit comments in triplicate to the Federal Aviation Administration (FAA). Transport Airplane Directorate, ANM-103. Attention: Rules Docket No. 94-NM141-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9:00 a.m. and 3:00
p.m., Monday through Friday, except Federal holidays.

The service information referenced in the proposed rule may be obtained from Airbus Industrie. 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. This information mav be examined at the FAA. Transport Airplane Directorate, 1601 Lind Avenue, SW

.. Renton, Washington.

FOR FURTHER INFORMATION CONTACT: Stephen Siotte. Aerospace Engineer. Standardization Branch. ANM-113, FAA. Transport Airplane Directorate. 1601 Lind Avenue, SW., Renton. Washington 98055-4056; telephone (206) 227-2797; fax (206) 227-1320.

SUPPLEMENTARY INFORMATION:
Comments Invited

Interested persons are invited to participate in the making ofthe proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on orbefore the closing date for comments. specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light ofthe comments recei\'ed.

Comments are specifically invited on the overall regulatory. economic. environmental. and energy aspects of the proposed rule. All comments submitted willbe available, both before and after the closing date for comments. in the Rules Docket for examination bv interested persons. A report

. summarizing each FAA-public contact concerned with the substance ofthis proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt oftheir comments submitted in response to this notice
must submit a self-addressed, stamped postcard on which the follOWing

. statement is made: "Comments to Dm::ket Number 94-NM-141-AD." The postcard will be date stamped and returned to the commenter. Availability ofNPRMs

Any person may obtain a copy or \'··is NPRM by submitting a request to tIlt- 

### . Federal Register 

### I Vol. 

### 59, No. 

### 218 

### I Monday, November 14. 

### 1994 / Proposed Rules 

### 56433

could or should capture thecumulative effects ofFederal energy conservation standards on multi-product appliance manufacturers and whetherornot there

are acceptable alternative models that could beused, such as REEFS or GRIM;

• Analytic bases and methods of calculating the dollar value ofreduced atmospheric emissions ofS02, N02

, and C02 from reduced energy consumption;

• Data on consumer financing of appliances useful for obtaining a weighted-average discount rate; and

• Data on the possible adverse affects ofstandards onidentifiable groups of

consumers thatexperience belowaverage utility orusage rates.

The Department has been unable to identifythe financial characteristics of small manufacturers. For purposes of this analysis, small manufacturers' costs

are assumed to equal those ofmedium manufacturers. The Department is especially interested in learning ofthe existence ofsmall manufacturers and in obtaining costing data from such manufacturers ofthe products under consideration.

Forthe Residential Energy Model analysis, the Department requests interested parties to provide historical data on shipments and average efficiencies by class for the products subject to the proposed rulemaking. Data on consumer prices and on the installation and maintenance expenses ofthese appliances are also requested.

The manufacturer analysis needs financial data from the product division level. All ofthese data are available at the firm level; but since firms are typically much largerthan the relevant division, the firm data may give a misleading indication ofthe division's finances.

A.n income statement and balance sheet at the division level would be
most helpful. Ifthis is not available. then data on the following variables are considered most essential: Net income.

revenue. selling and general and administrative costs, engineering costs. costs ofgoods sold, interest, taxes. debtto-equity raao. net depreciable assets, net assets, capital investment, and longterm debt.

The Department also welcomes
current data on unit sales and revenues for the industries as a whole.

V. Review Under Executive Order 12866

Today's regulatory action has been determined to be an "economically significant regulatory action" under Executive Order 12866. "Regulatory Planning and Review," (58 FR 51735, October4,1993). Accordingly, today's action was subject to review under the Executive Orderby the Office of Information and Regulatory Affairs (OIRA).

There were no substantivechanges
oetween the draft submittedto OIRA and today's action.

•The draft oftoday's action and any other documents submitted to OIRA for review have been made a part ofthe rulemaking record and are available for public review in the Department's Freedom ofInformation Reading Room, 1000 Independence Avenue SW. Washington. DC 20585 between the hours of9:00 and 4:00, Monday through Friday, telephone (202) 586-6020.

Issued in Washington. DC, on November 2. 1994. Christine A. Ervin,
AssistantSecretary. EnergyEfficiencyand RenewableEnergy. [FR Doc. 94-28044 Filed 11-10-94: 8:45 ami

61LUNG CODE 6450-01-P

OEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39
[Docket No.**9~M-141-AD]** Airworthiness Oirectives; Airbus Model A320 Series Airplanes

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice ofproposed rulemaking (NPRM).

SUMMARY: This document proposes the adoption ofa new airworthiness directj'l,:e (AD) that is applicable to certain Airbus Model A320 series airplanes. This proposal would require replacement ofthe check valves ofthe thrust reverser with modified valves on certain airplane configurations and the replacement ofthe manual control valves ofthe thrust reverserwith modified valves on certain other airplane configurations. This proposal is prompted by recent engineering analysiS. which revealed that ifthe nonretum valve installed on the hydraulic
return line ofthethrust reverser were to jam in the closed position. it could

cause pressurization ofthe Hydraulic Control Unit (HCU). The actions specified bythe proposed AD are intended to prevent possible pressurization ofthe HCU, due to jamming ofthe non-return valve in the hydraulic return line, and consequent deployment ofa thrust reverser during flight. which could affect the controllability ofthe'airplane.

OATES: Comments must be received by December 27,1994. ADDRESSES: Submit comments in triplicate to the Federal Aviation Administration (FAA). Transport Airplane Directorate, ANM-103. Attention: Rules Docket No. 94-NM141-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056. Comments may be inspected at this location between 9:00 a.m. and 3:00
p.m., Monday through Friday, except Federal holidays.

The service information referenced in the proposed rule may be obtained from Airbus Industrie. 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. This information mav be examined at the FAA. Transport Airplane Directorate, 1601 Lind Avenue, SW

.. Renton, Washington.

FOR FURTHER INFORMATION CONTACT: Stephen Siotte. Aerospace Engineer. Standardization Branch. ANM-113, FAA. Transport Airplane Directorate. 1601 Lind Avenue, SW., Renton. Washington 98055-4056; telephone (206) 227-2797; fax (206) 227-1320.

SUPPLEMENTARY INFORMATION:
Comments Invited

Interested persons are invited to participate in the making ofthe proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on orbefore the closing date for comments. specified above, will be considered before taking action on the proposed rule. The proposals contained in this notice may be changed in light ofthe comments recei\'ed.

Comments are specifically invited on the overall regulatory. economic. environmental. and energy aspects of the proposed rule. All comments submitted willbe available, both before and after the closing date for comments. in the Rules Docket for examination bv interested persons. A report

. summarizing each FAA-public contact concerned with the substance ofthis proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt oftheir comments submitted in response to this notice
must submit a self-addressed, stamped postcard on which the follOWing

. statement is made: "Comments to Dm::ket Number 94-NM-141-AD." The postcard will be date stamped and returned to the commenter. Availability ofNPRMs

Any person may obtain a copy or \'··is NPRM by submitting a request to tIlt-