U.S. Department of EnergyEnergy Conservation Program for Consumer Productsand Commercial and Industrial EquipmentFramework Document Public Meeting onEnergy Conservation Standards forResidential Clothes WashersSeptember 21, 2009Washington, DChttp://www.eere.energy.gov/buildings/appliance_standards/residential/clothes_washers.html2Welcome and Introduction• Introductions• Role of the Facilitator• Ground Rules (norms)– Listen as an ally– Use short, succinct statements/keep to the point– Hold sidebar conversations outside the room– Focus on issues, not personalities– One person speak at a time (raise hand to be recognized; stateyour name for the record)– Set cell phones to silent/vibrate• Housekeeping Items• Agenda Review• Opening Remarks39:00 – 9:05 am Welcome9:05 – 9:15 am Opening remarks, introductions, and agenda reviewStephen Witkowski9:15 – 9:30 am Rulemaking and analytical methodology overviewStephen Witkowski9:30 – 10:30 am Market and Technology AssessmentJudith Reich10:30 – 10:45 am Break10:45 – 11:30 am Screening Analysis and Engineering AnalysisJudith Reich11:30 – 12:00 pm Preliminary Manufacturer Impact AnalysisJudith Reich12:00 – 1:00 pm Break for lunchMorning Agenda4Afternoon Agenda1:00 – 2:00 pmMarkups for Equipment Price Determination; EnergyUse Determination; and Life-Cycle Cost and PaybackPeriod AnalysisIsaac Turiel2:00 – 2:45 pm Shipments Analysis,National Impact Analysis, andLCC Subgroup AnalysisGregory Rosenquist2:45 – 3:00 pm Break3:00 – 3:15 pm Manufacturer Impact AnalysisJudith Reich3:15 – 3:45 pm Utility Impact Analysis, Employment Impact Analysis,Environmental Assessment,and Regulatory ImpactAnalysisGregory Rosenquist3:45 – 4:30 pm Other issues and comments; closing remarks5Stakeholder Opening Statements• Stakeholders who contacted DOE to request an opportunity to issuean opening statement should speak now.6Public Meeting Agenda23NOPR Analyses14Rulemaking OverviewIntroductionFinal Rule56Closing Remarks23Pre-NOPR AnalysesEnergy Conservation Standards4Test ProceduresNOPR Analyses5Closing Remarks67IntroductionPurpose of the Framework Document Public Meeting• Present the procedural and analytical approaches to evaluateenergy conservation standards for residential clothes washers• Provide a forum for public discussion of rulemaking issues• Encourage stakeholders to submitdata, information, and writtencomments8Requests for CommentIssue BoxIn the Rulemaking Framework Document forResidential Clothes Washers, DOE welcomes comment.Throughout this presentation specific issues will be brought up fordiscussion on slides such as this,with identifying numberscorresponding to those in the Framework Document.Nonetheless, comments concerning any part of the document orpresentation are welcome.Introduction9In all correspondence, please refer to the Residential Clothes Washerrulemaking by:– Framework Document for Residential Clothes Washers– Docket Number EERE-2008-BT-STD-0019, and– Regulatory Identification Number (RIN) 1904-AB90Email:RCW-2008-STD-0019@ee.doe.govFeedback Is RequestedEspecially on Items Identified in Framework DocumentIntroductionPostal Mail:Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program,Mailstop EE-2J1000 Independence Avenue, SWWashington, DC 20585-0121Telephone: (202) 586-2945Comment period closes September 28, 2009Courier:Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program,6thFloor950 L’Enfant Plaza, SWWashington, DC 20024Telephone: (202) 586-294510BackgroundIntroduction•Energy Policy and Conservation Act (EPCA) of 1975established an energy conservation program for majorhousehold appliances (42 USC 6291 et seq.)•Amendments to EPCA in the National Appliance EnergyConservation Act of 1987 (NAECA) (42 USC 6295 (g))– Established prescriptive energy conservation standards forresidential clothes washers– Directed DOE to conduct two cycles of rulemakings to determineif more stringent standards are justified.11Previous RulemakingsIntroduction– Final Rule published May 14, 1991 set performance standardseffective May 14, 1994. (56 FR 22279)– Second standards rulemaking initiated by publication of ANOPR onNovember 14, 1994. (59 FR 56423)– Rulemaking activities suspended inFY 1996. During this time, DOErevised the standard-setting process and published a final rule,Procedures for Considerationof New or Revised EnergyConservation Standards for Consumer Products.(61 FR 36974; 10 CFR part 430, subpart C, Appendix A)– Second standards rulemaking re-initiated by publication ofANOPR on November 19, 1998– Second Final Rule published January 12, 2001 set performancestandards effective in two phases: January 1, 2004 and January 1,2007. (66 FR 3314)12Previous Rulemakings, cont.Introduction– Energy Independence and Security Act (EISA) of 2007(P.L. 110-140) revised energyconservation standards forresidential clothes washers, effective January 1, 2011.(42 USC 6295(g)(9))– EISA 2007 directed DOE to publish a final rule no later thanDecember 31, 2011 determining whether to amend thestandards manufactured on or after January 1, 2015.– EISA 2007 also directed DOE toconsider standby mode and offmode energy consumption in future amendments to energyefficiency standards13IntroductionCurrent Rulemaking forResidential Clothes Washers• In order to meet the EISA 2007 deadline, DOE initiated the currentrulemaking on Residential Clothes Washers.• Today’s public meeting is about the Framework Document.• Test Procedure revisions concurrent with the Pre-NOPR:– TP NOPR for standby and off-mode energy consumption– TP NOPR for energy efficiencyEISA 2007NOPR1FinalRuleResidential Clothes WasherTest Procedures(TP Standby and TP Efficiency)FrameworkDocumentPre-NOPR1Energy ConservationStandards forResidential ClothesWashersNOPR1FinalRule1Pre-NOPR: Preliminary Notice of Proposed Rulemaking NOPR: Notice of Proposed Rulemaking1423NOPR Analyses14Test ProceduresIntroduction3Pre-NOPR AnalysesEnergy Conservation Standards4IntroductionFinal Rule5NOPR Analyses6Closing RemarksPublic Meeting Agenda15Test Procedure – Residential Clothes WashersTest Procedures• DOE published a Final Rule for the clothes washer test procedureon August 27, 1997, effective on January 1, 2004. (62 FR 45484)• DOE amended the test procedure in the 2001 rulemaking,incorporating changes to the energytest cloth, remaining moisturecontent (RMC), and extractor testing. (66 FR 3330)• DOE amended the test procedure again in 2003 (68 FR 62198):– Replaced lowest spin cycle of 50 gravitation (g) force with a spincycle of 100 g for testing the cloth used in the extraction phase– Specified the use of additional statistical analysis to qualify theinteractive effect between differentlots of the test cloth and spinspeeds to improve consistency with the baseline data16• EISA 2007 directed DOE to amendtest procedures to includemeasurement of standby modeand off mode energy consumption.• Definition of active mode, off mode, standby mode as defined by EISA:– Active mode: The condition in which an energy-using product(1) is connected to a main power source(2) has been activated; and(3) provides one or more main functions– Off mode: The condition in which an energy-using product(1) is connected to amain power source; and(2) is not providing any standbyor active mode function– Standby mode: The condition in which an energy-using product(1) is connected to amain power source; and(2) offers one or more of the followinguser-oriented or protective functions:(a) To facilitate the activation or deactivation of other functions (including activemode) by remote switch (including remotecontrol), internal sensor, or timer.(b) Continuous functions, including information displays (including clocks) or ssensor-based functions.EISA 2007 Standby and Off-Mode ConsiderationsTest Procedures17Clothes Washer Test Procedure Rulemaking• DOE must take into consideration the current versions of InternationalElectrotechnical Commission (IEC) Standard 62301 – “Householdelectrical appliances – Measurement of standby power”• DOE is aware that IEC 62301 is currently under revision, with a newrevision expected to be published mid-2010.• Based on stakeholder comments ontest procedure rulemakings forother household appliances, DOEhas determined to considerdefinitions under the expected revision of IEC 62301.• DOE has delayed the clothes washer test procedure rulemaking pastthe EISA deadline of June 30, 2009 inorder to allow consideration fornew IEC 62301 language.Test Procedures18Request for CommentTest ProceduresItem 1-1DOE requests input from interested parties on the merits ofrevising its test procedures for residential clothes washers andseeks input (including supporting data) regarding how theseprocedures can be improved.1923NOPR Analyses1Energy Conservation Standards4Rulemaking OverviewIntroduction2Pre-NOPR AnalysesTest Procedure4IntroductionFinal Rule5NOPR Analyses6Closing RemarksPublic Meeting Agenda20Energy Conservation Standards42 U.S.C. 6295(o)(2)(B)(i) directs DOEto take into consideration sevenfactors when setting energy conservation standards for ResidentialClothes WashersEPCA FactorsDOE Analysis1. Economic impact on consumers andmanufacturersLife-Cycle Cost AnalysisManufacturer Impact Analysis2. Lifetime operating cost savingscompared to increased cost for theproductLife-Cycle Cost Analysis3. Total projected energy savingsNational Impact Analysis4. Impact on utility or performance Engineering AnalysisScreening Analysis5. Impact of any lessening of competition Manufacturer Impact Analysis6. Need for national energy conservation National Impact Analysis7. Other factors the Secretary considersrelevantEnvironmental AssessmentUtility Impact AnalysisEmployment Impact Analysis21Stages for the Energy Conservation StandardRulemaking Process

Fr a m e w o r k D o c u m e n tFrameworkDocumentPublicMeetingFrameworkDocumentPublicMeetingPoints of Stakeholder ParticipationPoints of Stakeholder ParticipationMilestones for DOEMilestones for DOEPre-NOPRPublicMeetingPre-NOPRPublicMeetingNOPRPublicMeetingNOPRPublicMeetingEnergy Conservation Standards

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J a n . 1 , 2 0 1 5201120102012200920142013201522Framework DocumentFrameworkDocumentPre-NOPRNOPRFinalRuleToday• Today’s public meeting covers the Framework Document for this rulemaking.•Federal Register Notice of PublicMeeting – (74 FR 44306, August 28, 2009)– Gives notice of thepublic meeting and availabilityof the Framework Document beingdiscussed today•Encourages interested parties to submit comments•Framework Document– Provides an overview of the rulemaking process and encouragesearly stakeholderparticipation– Invites comments on proposed approach and issues– The Framework Document is available online:http://www1.eere.energy.gov/buildings/appliance_standards/residential/clothes_washers_framework.htmlEnergy Conservation Standards23FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy & WaterUseDeterminationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisEnergy Conservation Standards24Analyses for the Pre-NOPREnergy Conservation StandardsApproachesKey InputsAnalysesKey OutputsMarket and TechnologyAssessmentScreening AnalysisEngineering AnalysisProduct PriceDeterminationLife-Cycle Cost andPayback PeriodAnalysesNational ImpactAnalysisEnergy UseShipmentsAnalysis• Product Classes• Technology Options• Product Designs• Life-Cycle Costs• Payback Periods• National Energy Savings• Net Present Values• Characterize Industry• Market Segmentation• Non-Regulatory ProgramsFramework Document• Efficiency-Level Approach• Design Option Approach• Energy Prices• Installation Costs• Maintenance & Repair Costs•Accounting Approach• Backcast and Forecast• Market Saturation• Identify Firms/Products• Historical Shipments•Retail Price Collection andAnalysisDesign OptionsProduct ClassesRetailPricesDesign Energy/ UseAdvance Notice of Proposed Rulemaking (ANO)• Efficiency/Performance• Commercial ProductsCandidateStandardLevels•Analysis of Energy UseDataTechnology Options• Design Options• Energy Price Forecasts• Site-to-Source Factors• Energy-Efficiency Levels•Analysis of Market Data•Analysis of Product Data• InstallationCosts• MaintCosts• Repair Costs• UEC• Energy PricesAnnual Energy Use (UEC)PreliminaryManufacturer ImpactAnalysis• Manufacturer Prices•Average Costs• Conversion Capital Expenditures• Direct Employment Impacts• Product PrototypesEnergy-EfficiencyLevelsProduct DesignsMarket and TechnologyAssessmentScreening AnalysisEngineering AnalysisProduct PriceDeterminationLife-Cycle Cost andPayback PeriodAnalysesNational ImpactAnalysisEnergy UseShipmentsAnalysis• Product Classes• Technology Options• Product Designs• Life-Cycle Costs• Payback Periods• National Energy Savings• Net Present Values• Characterize Industry• Market Segmentation• Non-Regulatory ProgramsFramework Document• Efficiency-Level Approach• Design Option Approach• Energy Prices• Installation Costs• Maintenance & Repair Costs•Accounting Approach• Backcast and Forecast• Market Saturation• Identify Firms/Products• Historical Shipments•Retail Price Collection andAnalysisDesign OptionsProduct ClassesRetailPricesDesign Energy/ UsePublication of Pre-Rulemaking Analyses• Efficiency/Performance• Commercial ProductsCandidateStandardLevels•Analysis of Energy UseDataTechnology Options• Design Options• Energy Price Forecasts• Site-to-Source Factors• Energy-Efficiency Levels•Analysis of Market Data•Analysis of Product Data• InstallationCosts• MaintCosts• Repair Costs• UEC• Energy PricesAnnual Energy Use (UEC)PreliminaryManufacturer ImpactAnalysis• Manufacturer Prices•Average Costs• Conversion Capital Expenditures• Direct Employment Impacts• Product PrototypesEnergy-EfficiencyLevelsProduct Designs25Purpose of the Pre-NOPR Public Meeting• To present methodologies for the Pre-NOPR analyses, andcharacterize results• To discuss specific issues related to the Pre-NOPR analysis• To seek input from attendeeson methodologies, assumptions,data sources• To describe upcoming analyses andnext steps, and seek furtherinputEnergy Conservation Standards26FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisEnergy Conservation Standards27Analyses for the NOPR and Final RuleEnergy Conservation StandardsUtility ImpactAnalysisNotice of Proposed Rulemaking (NOPR)Final RuleRevise Pre-NOPRAnalysesLife-Cycle CostSub-Group AnalysisManufacturer ImpactAnalysisEmployment ImpactAnalysisRevise Analyses• Industry Cash Flow• Sub-Group Cash-Flow• Direct Employment Impacts• Competitive Impacts• Cumulative Regulatory Burden• National Employment Impacts• Revised Results• Stakeholder Comments• Demographics• Manufacturer Interviews• GRIM Analysis• Emission Rates• National Energy Savings• Stakeholder Comments• Manufacturer Prices•Average Costs• Manufacturer Financial DataAdvance Notice of Proposed Rulemaking (ANO)EnvironmentalAssessmentRegulatory ImpactAnalysis• Emission Estimates• Utility Load Factors• National Energy Savings• Non-RegulatoryAlternatives• NEMS-BT• ImSET• NEMS-BTDirect EmploymentImpacts• National Energy Savings• National Product Costs• National Operating Costs• Utility Impacts• Life-Cycle Costs• Payback Periods• National Energy Savings• Net Present Values• Trial Standard Levels (TSLs)TSLs• Department of Justice ReviewUtility ImpactAnalysisNotice of Proposed Rulemaking (NOPR)Final RuleAnalysesLife-Cycle CostSub-Group AnalysisManufacturer ImpactAnalysisEmployment ImpactAnalysisRevise Analyses• Industry Cash Flow• Sub-Group Cash-Flow• Direct Employment Impacts• Competitive Impacts• Cumulative Regulatory Burden• National Employment Impacts• Revised Results• Stakeholder Comments• Demographics• Manufacturer Interviews• GRIM Analysis• Emission Rates• National Energy Savings• Stakeholder Comments• Manufacturer Prices•Average Costs• Manufacturer Financial DataPublication of Pre-Rulemaking AnalysesEnvironmentalAssessmentRegulatory ImpactAnalysis• Emission Estimates• Utility Load Factors• National Energy Savings• Non-RegulatoryAlternatives• NEMS-BT• ImSET• NEMS-BTDirect EmploymentImpacts• National Energy Savings• National Product Costs• National Operating Costs• Utility Impacts• Life-Cycle Costs• Payback Periods• National Energy Savings• Net Present Values• Trial Standard Levels (TSLs)TSLs• Department of Justice Review28Purpose of the NOPR Public Meeting• To hear the views of stakeholders on DOE’s proposed standardlevel• To obtain input on any remaining issues relating to the Notice ofProposed RulemakingDOE will consider all verbal and written input inpreparing its Final Rule.Energy Conservation Standards29FrameworkDocumentNOPRFinalRuleNOPRPre-NOPRAnalyses for Final RuleFinalEnergy Conservation StandardsRevise NOPRAnalyses3023Pre-NOPR Analyses14Rulemaking OverviewIntroduction2Energy Conservation StandardsTest Procedure3IntroductionFinal Rule5NOPR Analyses6Closing RemarksPublic Meeting Agenda31FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy & WaterUseDeterminationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPR Analysis32Market and Technology Assessment• Purpose:– Characterize the market, the residential clothes washer industry, andthe measures to improve efficiency• Method:– Identify and characterize manufacturers of residential clotheswashers– Estimate shipments and trends in the market;– Identify technologies that could improve efficiency; and– Identify regulatory and non-regulatoryinitiatives intended to improvethe efficiency of the products covered under this rulemaking.Market and Technology Assessment33Relationship of Market and Technology Assessmentto other AnalysesMarket andTechnologyAssessmentProduct ClassesTechnology Options to improve efficiencyScreening AnalysisDesign Options to improve efficiencyEngineering AnalysisMarket and Technology Assessment34Request for CommentItem 3-1DOE requests information that would contribute to the marketassessment for the residential clothes washers covered in this rulemaking(e.g., current product features and efficiencies, product feature andefficiency trends, and historical product shipments and prices).Market and Technology Assessment35Definitions• Under EPCA, DOE provides definitions of clothes washers(10 CFR 430.2):•Clothes washermeans a consumer product designed to clean clothes,utilizing a water solution of soap and/or detergent and mechanicalagitation or other movement, and must be one of the following classes:automatic clothes washers, semi-automatic clothes washers, and otherclothes washers.Market and Technology Assessment36Definitions (cont.)•Automatic clothes washermeans a class of clothes washer which has acontrol system which is capable ofscheduling a preselected combinationof operations, such as regulation of water temperature, regulation of thewater fill level, and performance of wash, rinse, drain, and spin functionswithout the need for user interventionsubsequent to the initiation ofmachine operation. Some models may require user intervention to initiatethese different segments of the cycle after the machine has begunoperation, but they do not require the user to intervene to regulate thewater temperature by adjusting the external water faucet valves.•Semi-automatic clothes washermeans a class of clothes washer that isthe same as an automatic clothes washer except that user intervention isrequired to regulate the water temperature by adjusting the external waterfaucet valves.•Other clothes washermeans a class of clothes washer which is not anautomatic or semi-automatic clothes washer.Market and Technology Assessment37• DOE will formulate a separateenergy conservation standard foreach product class.• In general, DOE divides covered equipment into classes by:– Type of energy used– Capacity of the equipment– Other performance-related features such as those thatprovide utility to the consumer, or others deemed appropriateby the Secretary that justify different standard levels(42 USC 6295(q))Market and Technology AssessmentEquipment Product Classes38Market and Technology AssessmentProposed Residential Clothes Washer Product ClassesResidential Clothes Washers1. Top-loading, compact (less than 1.6 cubic feet capacity)2. Top-loading, standard (1.6 cubic feet or greater capacity)3. Top-loading, semiautomatic *4. Front-loading5. Suds-saving ** DOE is unaware of any top-loading semiautomatic or suds-savingclothes washers onthe market. DOE proposes to eliminatethese product classes for this reason, andbecause it believes they donot offer any added utility thatis inherently less energyefficient that would require protectionfrom the energy conservation standards.39Market and Technology AssessmentItem 3-2DOE requests input from interested parties on the proposedproduct classes and the criteria used for creating these productclasses. What other factors, ifany, should DOE consider beyond thoseidentified above as a basis for developing product classes? Whenanswering, please explain in detail and cite specific examples to theextent possible.Item 3-3DOE seeks comment on the merits of retaining or eliminatingthe top-loading semiautomatic and suds-saving clothes washerproduct classes.Item 3-4DOE seeks comment as to whether the method of “loading”clothes washers or any other consumer utility generally associatedwith the method of loading are “features” within the meaning of 42U.S.C. 6295(o)(4) in EPCA and whetherthe availability of suchfeature(s) would likely be affected by eliminating the separate classesfor these product types previously established by DOE.Request for Comment40Initial Technology Options for Clothes WashersMarket and Technology Assessment1. Adaptive fill controls2. Added insulation3. Advanced agitation concepts for top-loading machines4. Automatic fill control5. Bubble action6. Direct-drive motor7. Electrolytic disassociation of water8. Horizontal-axis design9. Hot water circulation loop10. Front-loading design with recirculation11. Improved fill control12. Improved front-loading washer drum design41Initial Technology Options for Clothes Washers(cont.)Market and Technology Assessment13. Improved water extraction to lower remaining moisture content14. Increased motor efficiency15. Low-standby-power design16. Ozonated laundering17. Plastic particle cleaning18. Reduced thermal mass19. Spray rinse or similarwater-reducing rinse technology20. Steam washing21. Thermostatically controlled mixing valves22. Tighter tub tolerance23. Ultrasonic washing42Request for CommentItem 4-1Are there any technologies listed in the above table that DOEshould not consider because of their impacts on safety, performance, orconsumer utility of the product? If so, why?Item 4-2Are there other technologies that DOE should consider astechnology options, and what, if any,impacts would the technology optionsbe expected to have on safety, performance, and consumer utility? Why?Market and Technology Assessment43FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPR AnalysisEnergy & WaterUseDetermination44Screening AnalysisScreening AnalysisImpacts on health or safetyImpacts on product utility or availability to consumersPracticability to manufacture, install and serviceTechnological feasibility• Purpose– Screen out technology options that DOE will not consider in theengineering analysis for residential clothes washers• Method:– DOE will evaluate each technology option based on the following criteria:45FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPR AnalysisEnergy UseDetermination46Downstream RulemakingAnalyses•Life-Cycle Cost andPayback Period•Manufacturer ImpactAnalysis•National ImpactsManufacturer Cost –Efficiency Relationship

Manufacturer CostEfficiency LevelEngineering Analysis• Purpose:– To characterize the relationship between manufacturer cost andenergy efficiency.Engineering Analysis47ÕDetermine characteristics of common or typical models whichwill serve as reference points to assess changes due toenergy conservation standards. Baseline models typically justmeet existing minimum energy conservation standards.ÕPerform detailed product disassembly to determinetechnologies and design features associated with eachefficiency level, and the manufacturing costs associated withthem. A “green-field” model of the subject unit and factory canbe aggregated to produce industry-wide estimates.ÕCollect manufacturer cost data on efficient clothes dryer androom air conditioner designs. Conduct interviews withmanufacturers to enhance understanding of efficiencyimprovements and associated costs.ÕDetermine manufacturing cost-efficiency curves based onreverse-engineering and industry-supplied cost data. Qualifycost-efficiency relationships with interview information andpublicly available data.DefineBaselineModelsDefineBaselineModelsDataCollection, &InterviewsDevelopEngineeringAnalysisCurvesEngineering Analysis MethodologyEngineering AnalysisReverseEngineering48Baseline unit efficienciesare defined.123BASELINEDevelopment of Cost-Efficiency CurvesEngineering AnalysisEfficiency

Incremental Manufacturing CostEfficiencyEfficiency

Incremental Manufacturing Cost Incremental Manufacturing CostReverse-engineeringdefines incrementalmanufacturing costsassociated with raisingefficiency toeach levelabove the baseline.DOE reviews &qualifiesmanufacturing costdata with additionalmanufacturersupplied data pointsand publiclyavailable data.49Engineering AnalysisResidential Clothes Washer Baseline ModelsResidential Clothes WashersModified EnergyFactor (MEF)(ft3/kWh)Water Factor (WF)(gal/ft3)1. Top-loading, compact(less than 1.6 cubic feet capacity)0.6518.402. Top-loading, standard(1.6 cubic feet or greater capacity)1.269.503. Top-loading, semiautomatic ***4. Front-loading1.728.005. Suds-saving **** DOE is unaware of any information on baseline performance of top-loading semiautomatic orsuds-saving clothes washers50Engineering AnalysisItem 5-1DOE seeks input from interested parties on whether theabove energy efficiency levels are appropriate for characterizing theperformance of baseline units.Item 5-2DOE seeks input on baseline efficiency levels for toploading semiautomatic and suds-savings clothes washers.Item 5-3DOE seeks information on the specific technologicalcharacteristics of the baseline model for each product class,including the technologies described in the Market and Technologysection. Examples of the types of information DOE seeks include thetype of wash basket drive motor and the typical input wattage, aswell as the type of fill control system.Request for Comment51Engineering AnalysisEfficiency-Level Approach for Residential Clothes Washers• DOE proposes to use an efficiency-level approach forresidential clothes washers because data indicates a significantrange of efficiencies for most of the product classes.• Reverse-engineering will be usedto identify cost and efficiencyimpacts at efficiency levels including, at minimum, baseline andEnergy Star standard levels.• Limited testing will establish the link between specifictechnologies and efficiency levels.• DOE will seek incremental costdata from manufacturers foreach efficiency level, supplemented with stakeholder interviewsand publicly available data.• Cost-efficiency curves will be generated from incremental costsfor each efficiency level.52Reverse-Engineering MethodologyEngineering AnalysisRawMaterialsFinishedMaterialsPurchasedPartsSelectionof UnitsPhysicalTeardownBill ofMaterialsAssemblyProcessesManufacturingCostFabricationProcesses53Engineering Analysis• Direct material• Direct labor• Factory overhead• Depreciation• Sales & marketing• Research &development• Building• Tooling/EquipmentFullProductionCostConversionCosts(Non-Production Costs)ManufacturerCost Data+ =Industry Cost Submittal• Costs will be provided on a shipment-weighted, industryaggregated basis.• Data will not be provided for product classes and/or efficiencylevels representing fewer than three manufacturers.• DOE will request information about the depreciation methodmanufacturers use to expense conversion capital.54Item 5-4DOE requests feedback on the use of an efficiency-levelapproach to determine the relationship between manufacturer costand energy efficiency for residential clothes washers, supplemented,as needed, by a design-option approach.Item 5-5DOE requests input on the selection of appropriate productclasses for reverse-engineering analysis, and any product classesfor which it is appropriate to extend these results analytically.Engineering AnalysisRequest for Comment55Engineering AnalysisEfficiency Levels• DOE will conduct the engineering analysis (and LCC and PBPanalyses) on all product classes for which it suggests efficiencylevels.• DOE is required to analyze maximum technologically feasible(“max tech”) efficiency levels– In some cases, DOE defines the highest efficiency level based onmaximum available efficiency currently on the market.– “Max available” may not correspond to “max tech” if, for example,some design options are not yet commercially available.– DOE will seek stakeholder input to resolve this potential discrepancy.56Engineering AnalysisEfficiency Levels for Top-Loading Standard-SizeResidential Clothes WashersLevelEfficiency LevelSourceEfficiency LevelMEFWFBaseline DOE Standard1.269.501Gap Fill1.409.502ENERGY STAR1.728.003CEE Tier 11.807.504CEE Tier 22.006.005Max Available*2.264.48* DOE estimated these valuesbased on data contained withinthe CEC (or other) residentialclothes washer database.57Engineering AnalysisEfficiency Levels for Top-Loading Compact-SizeResidential Clothes WashersLevelEfficiency LevelSourceEfficiency LevelMEFWFBaseline DOE Standard0.6518.401Max Available*0.7813.90* DOE estimated these valuesbased on data contained withinthe CEC (or other) residentialclothes washer database.58Engineering AnalysisEfficiency Levels for Front-Loading ResidentialClothes WashersLevelEfficiency LevelSourceEfficiency LevelMEFWFBaseline ENERGY STAR*1.728.001CEE Tier 11.807.502CEE Tier 22.006.003CEE Tier 32.204.504Gap Fill2.404.205Max Available**2.893.36* DOE determined there areno current front-loadingresidential clothes washers below this level.** DOE estimated these values based on data contained withinthe CEC (or other) residentialclothes washer database.59Item 5-6DOE seeks input from interested parties about theadequacy of the proposed efficiency levels for requestingincremental cost data from manufacturers. DOE also seeks inputfrom interested parties on appropriate maximum technologicallyfeasible efficiency levels and the basis for why those levels shouldbe selected.Engineering AnalysisRequest for Comment60Engineering AnalysisProprietary Designs• DOE will evaluate all designoptions that are commerciallyavailable or present in a workingprototype, including proprietarydesigns and technologies.• Proprietary designs will only beconsidered if they do not presenta unique path to a given efficiency level.• The confidentiality of manufacturers will be maintained.61Item 5-7Are there proprietary designs or technologies forresidential clothes washers of which DOE should be aware in thisrulemaking? If so, what are these designs and how should DOEacquire the cost data necessary for evaluating them?Engineering AnalysisRequest for Comment62Engineering AnalysisOutside Regulatory Changes• Consider the effects on manufacturers of other regulatorychanges outside of the standards rulemaking process.• Example: Some manufacturers in the residential clothes washerindustry are subsidiaries of larger parent companies thatmanufacture other products subject to Federal regulations– Phase-out of chlorofluorocarbon(CFC) and hydrochlorofluorocarbon(HCFC) refrigerants mandated by U.S. Environmental ProtectionAgency– DOE standards for residential clothes dryers and room airconditioners enacted since 1990– Reduction of Hazardous Substances (RoHS) EU directive63Item 5-8Are there additional outside regulatory issues that DOEshould consider in its analysis of residential clothes washers? If so,identify what they are and how DOE should consider them forpurposes of its analysis.Engineering AnalysisRequest for Comment64FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy & WaterUseDetermination65Preliminary Manufacturer Impact AnalysisLegislative Requirements• The Manufacturer Impact Analysis(MIA) fulfills a legislativerequirement to determine if aproposed standard is economicallyjustified.– EPCA provides 7 factors to evaluate in determining whether anefficiency standard is justified. Two factors are addressed in the MIA:• Economic impact of standards on manufacturers• Impacts of any lessening of competition in the industry– MIA format changes described in the 2006 report to Congress, at:http://www.eere.energy.gov/buildings/appliance_standards/2006_schedule_setting.html• DOE will collect, evaluate, and report preliminary MIA data in thePre-NOPR, if manufacturers can supply the requisite information• Preliminary data include: anticipated conversion capitalexpenditures by efficiency level and anticipated direct employmentimpacts66Preliminary Manufacturer Impact AnalysisMethodology• The MIA consists of three mainphases. In the Pre-NOPR, thepreliminary MIA focuses on Phase 1IndustryprofilePhase 2* Government RegulatoryImpact Model (GRIM)Phase 3Phase 1Pre-NOPRNOPRPreliminaryMIAInterviewsDevelopstraw-manGRIM*DevelopinterviewguideInterviews& industrywide /subgroupanalysesAssess directemployment,competition,cumulativeburden67Preliminary Manufacturer Impact Analysis• Purpose:– Provide initial discussion on any potential impacts of energyconservation standards on manufacturers of residential clothesdryers and room air conditioners.– Provide an opportunity to verify DOE market information andengineering design options.Preliminary Manufacturer Impact Analysis68Preliminary Manufacturer Impact AnalysisMethodology: Phase 1• Consists of the industry profile and preliminary manufacturerimpact analysis interviewsIndustry ProfileIndustry Profile»Evaluate current and past industrystructure and market characteristics»Produce an industry profile reportwith aggregated findings andcharacteristics»Identify critical issues that requirespecial consideration in the MIA, forexample:»Types or groups of manufacturers»Access to technology»Potential regulatory scenarios»Evaluate current and past industrystructure and market characteristics»Produce an industry profile reportwith aggregated findings andcharacteristics»Identify critical issues that requirespecial consideration in the MIA, forexample:»Types or groups of manufacturers»Access to technology»Potential regulatory scenariosPreliminary MIA InterviewsPreliminary MIA Interviews»Occurs during the engineeringanalysis»Topics include:»Shipment projections»Conversion costs»Product mix and profitability»Market shares and industryconsolidation»Cumulative regulatory burden»Occurs during the engineeringanalysis»Topics include:»Shipment projections»Conversion costs»Product mix and profitability»Market shares and industryconsolidation»Cumulative regulatory burden69LCC and PBP Analysis Inputs70FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy & WaterUseDetermination71Markups for Equipment Price DeterminationMarkups for Equipment Price Determination• DOE uses markups to convert manufacturer costs from theengineering analysis intoconsumer retail prices.• DOE needs retail prices for the life-cycle cost and payback periodanalysis.• DOE must characterize distribution channels for each product.– DOE understands that over 93% percent of consumer products aredistributed from manufacturers directly to retailers.• DOE develops markups for each party involved in productdistribution.• SEC 10-K reports provide data for calculating manufacturer markups.• U.S. Census Business Expenditure Survey provides data forcalculating retailer markups.• DOE will collect retail price data for validation purposes.• DOE will investigate the variability of retail prices.72Markups for Equipment Price Determination(Item 7-1)DOE welcomes comments on its proposed approach fordeveloping estimates of future retail prices.Request for Comment73FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy andWater UseDetermination•Purpose:– Develop annual energy and water use data for the life-cycle cost andpayback period analyses to calculate annual operating costs.•Method:– Develop household samples from DOE-EIA’s Residential EnergyConsumption Survey (RECS) for the three product class to be analyzed indetail in the Engineering Analysis.• Front-loading, standard size washers• Top-loading standard size washers• Top-loading compact washers– Use RECS data along with Engineering Analysis data to develop annualenergy and water use on a per-household basis.Energy and Water Use DeterminationEnergy Use Determination7475Energy and Water Use Determination ApproachEnergy and Water Use DeterminationAnnual Usageper household(cycles/year)+Water Heater& DryerFuel Typesper householdAnnual Energy andWater Use byefficiency levelPer householdMEF & WF byefficiency levelfrom EngineeringAnalysis+Energy and Water Use DeterminationWasher Usage and Capacity• Usage has been decreasing while capacity has been increasing.• Is larger washer capacity a cause of lower washer usage?• Does the test procedure capture the field energy and water use impact oflarger washer capacity?76•Purpose:– DOE will consider the “rebound effect” in its determination of annualenergy consumption•Assumptions:– Rebound effect occurs when a more efficient appliance or equipmentis used more intensively so the expected savings may not fullymaterialize– No rebound effect for home appliances according to existingliterature, although consumers may choose to purchase largermodels with more features resulting in increased energy useRebound EffectEnergy Use Analysis7778Item 6-1DOE seeks input from interested parties on the approachespresented for estimating both the typical values and variability in theannual energy and water consumptionof residential clothes washers.Item 6-2DOE seeks comments on the rebound effect associatedwith more efficient residential clothes washers. In other words, DOEseeks input on what portion of the energy savings resulting from moreefficient equipment may be lost due to increased usage or consumerspurchasing larger or more feature-laden clothes washers. DOE isinterested in receiving any data that may support these comments.Energy Use DeterminationRequest for Comment79FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy & WaterUseDetermination80•Method:– LCC equals consumer price plusthe sum of annual operating costs(including repair and maintenance costs)discounted to a particular baseyear.– Economic evaluation from the consumer perspective.– Analysis implemented in an Excel®spreadsheet.– Results are expressed as LCC difference (baseline minus standard level).– Payback Period (PBP) is also calculated and reported in this analysis.Life-Cycle Cost and Payback Period Analysis•Purpose:– Assess the net life-cycle cost (LCC) impacts of differing efficiency levelson the consumer.Life-Cycle Cost and Payback Period AnalysisApproach•Monte Carlo simulation analysis to be used.– Characterize the variability and uncertainty associated with the inputsusing probability distributions.– RECS household samples will be used to characterize the variability inannual energy and water use and energy and water prices.– Probability distributions will be used to characterize the uncertainty inother operating cost inputs (e.g., discount rates, equipment lifetimes) andmanufacturing costs.•One LCC and PBP analysis result per product class.– Analysis to be conducted for each proposed product class to be analyzedin detail in the Engineering Analysis.•Develop base case efficiency distributions to avoid overstatingthe benefits from increasing product efficiency.Life-Cycle Cost and Payback Period Analysis8182Efficiency Distributions Example from LCC AnalysisLife-Cycle Cost and Payback Period Analysis83Base Case Efficiency Distributions•Avoids overstating the benefitsfrom increasing product efficiency.– Market share data (or base case efficiency distributions) show thepercentage of consumers already purchasing efficient products.– Requesting market share data for specific efficiency bins.Life-Cycle Cost and Payback Period AnalysisTop-Loading – CompactTop-Loading – StandardFront-LoadingEfficiency BinsMarket Share2005 or 2006Efficiency BinsMarket Share2005 or 2006Efficiency BinsMarket Share2005 or 2006(MEF)(WF)(Percent)(MEF)(WF)(Percent)(MEF)(WF)(Percent)0.65 18.401.26 9.501.72 8.000.78 13.901.40 9.501.80 7.501.72 8.002.00 6.001.80 7.502.20 4.502.00 6.002.40 4.202.25 4.452.89 3.3684Item 8-1DOE seeks input from interested parties on theplanned approach of usingMonte Carlo simulation andprobability distributions to conduct the LCC and PBP analysis.Item 8-2DOE requests data from interested parties tocharacterize the current mix of residential clothes washerefficiencies in the market.Request for CommentLife-Cycle Cost and Payback Period Analysis85Life-Cycle Cost and Payback Period AnalysisLCC and PBP Analysis InputsElectricity Prices• Electricity prices are used to convert energy use to energy costs.• DOE will develop electricity prices from DOE-Energy InformationAdministration (EIA) Form 861 data.• DOE will use the DOE-EIAAnnual Energy Outlook(AEO) forprojections of future average energy prices (reference, high, andlow scenarios).• DOE may evaluate other quantitativeprice projections provided bystakeholders as sensitivities.Life-Cycle Cost and Payback Period Analysis86Natural Gas and Oil Prices• Natural gas and oil prices are used to convert energy use toenergy costs.• DOE will develop natural gas and oil prices from “Natural GasMonthly” and “Petroleum Navigator.”• DOE will use the DOE-EIAAnnual Energy Outlook(AEO) forprojections of future average natural gas and oil prices (reference,high, and low scenarios).• DOE may evaluate other quantitativeprice projections provided bystakeholders as sensitivities.Life-Cycle Cost and Payback Period Analysis87Water Prices• Water prices are used to convert water use to water costs.• DOE will develop water pricesfrom AWWA and Raftelis FinancialConsultants (RFC).• DOE will use historical Bureau of Labor’s Consumer Price Indexfor Water and Sewerage for projections of future average waterprices and historical RFC data.• DOE may evaluate other quantitativeprice projections provided bystakeholders as sensitivities.Life-Cycle Cost and Payback Period Analysis88Wastewater Prices• Wastewater prices are used toconvert wastewater creation towastewater costs.• DOE will develop wastewater prices from AWWA and RaftelisFinancial Consultants (RFC).• DOE will use historical Bureau of Labor’s Consumer Price Indexfor Water and Sewerage and historical RFC data for projections offuture average wastewater prices.• DOE may evaluate other quantitativeprice projections provided bystakeholders as sensitivities.Life-Cycle Cost and Payback Period Analysis89Item 8-3DOE seeks input from interested parties on the plannedapproach for estimating current and forecasted energy, water, andwastewater prices.90Maintenance, Repair and Installation Costs• DOE does not currently have information indicating that routine repairand maintenance costs are different for more and less efficient clotheswashers.• Installation costs may change if more efficient products aresignificantly larger or heavier.Life-Cycle Cost and Payback Period AnalysisItem 8-4DOE seeks input from interested parties on whether it iscorrect to assume that changes in maintenance, repair, andinstallation costs will be negligible for more efficient residential clotheswashers. If this is incorrect, DOE is interested in the reasons why thisis so and specific ways to correct this assumption.91Product Lifetimes• DOE proposes to use an analysis where product lifetimes for the basecase and standards case are the same.• Past DOE analyses have used an average product lifetime of 14.1years for clothes washers.• DOE is investigating whetherRECS data can be used to provideanother source for clothes washer lifetime.Life-Cycle Cost and Payback Period AnalysisItem 8-5DOE seeks input from interested parties on appropriatelifetimes for the residential clothes washer product classes coveredin this rulemaking.92Discount Rate• Discount rates are used to convert streams of annual operatingexpenses to present value in the LCC analysis.• DOE will use similar approach asfor other residential productstandards rulemakings.– Derived from estimates of the “finance cost” to purchase residentialproducts.– Finance cost based on:• Financial cost of any debtincurred to purchase products (e.g., credit cards, homeequity loans)• Opportunity cost of any equity to purchase products (e.g., stocks, bonds, savingsaccounts)– Federal Reserve Board’sSurvey of Consumer Financesis a source ofmuch of the equity and debt data.Life-Cycle Cost and Payback Period AnalysisItem 8-6DOE seeks input from interested parties on the plannedapproach for estimating discount rates for residential consumers.93FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy & WaterUseDetermination94Shipments Analysis•Purpose:– Estimate future product shipments which are inputs to the NationalImpacts Analysis and Manufacturer Impact Analysis.Shipments Analysis•Method:– The shipments model will rely on a range of data sources.– The model will only consider shipments of covered products.95Shipments AnalysisBase-Case Shipments Forecast Approach• Depicts the situation wherenew standards are not adopted.• Shipments forecasts account for: (1) product sales to newconstruction and (2) replacements for failed units.• Historical forecasts (‘backcasts’) calibrated to historical shipments.– Calibration performed by accounting for product sales to existinghouseholds that do not already own the appliance.• Data requirements:– New construction product sales• New housing construction forecasts: EIA’sAnnual Energy Outlook.• Historical rates of product ownership(saturation rates): EIA’s RECS, CensusBureau’s AHS, and AHAM’sFact Book.– Replacements• Product lifetimes and retirementfunctions of LCC and PBP analysis.– Historical shipments96Shipments AnalysisRequest for CommentItem 9-1DOE seeks data on representative saturation rates forresidential clothes washers.97Shipments AnalysisResidential Clothes Washer Historical Shipments Data• DOE requests historical shipments data in order to calibrate itsbase-case shipments forecasts.YearShipments, Domestic + Imports(Thousands of Units)Top-LoadingFrontLoadingSuds-SavingCompactStandardSemi-automatic19931994199519961997199819992000200120022003200420062007200898Shipments AnalysisRequest for CommentItem 9-2DOE seeks historical shipments data broken down by productclass.99Shipments AnalysisStandards Impacts on Shipments• DOE develops Standards-Case Forecasts from the same data itused to develop the Base-Case Forecast.• Standards-Case Forecasts alsouse purchase price increases andoperating cost savings to estimate shipments impacts.• It is difficult to obtain data showing sensitivity of shipments topurchase price and operating costs.– DOE may forecast Standards-Case shipments forecasts withscenarios (i.e., specific percentage drops in annual shipments forparticular efficiency levels).• DOE will consider impactsfrom market-pull programs.100Shipments AnalysisRequest for CommentItem 9-3As part of its preliminary manufacturer impact analysis, DOE seeksinput from manufacturers and other interested parties on the potential impactof new energy conservation standards on product shipments.Item 9-4DOE also requests input on any market-pull programs that promotethe adoption of more efficient residential clothes washer products.101FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateMarket &TechnologyScreeningAnalysisEngineeringAnalysisShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisSteps in the Standards Rulemaking: Pre-NOPRPreliminaryManufacturerImpactAnalysisPre-NOPREnergy & WaterUseDetermination102•Method:– Develop annual series of national energy, water, and wastewater andeconomic impacts.– Utilize the shipments model to estimate the total stock of appliancesin service each year.– Utilize the LCC to estimate cost and energy and water use per unit inany given year.– Aggregate the costs and energy and water use for all years in theanalysis period.– Report national energy savings (NES).– Report national water savings (NWS).– Report estimates for economic impact as change in consumerNational Net Present Value (NPV) (in constant year dollars).– Account for the time-value of money though defined discount rates.National Impact Analysis•Purpose:– Determine the projected national energy, water, and wastewatersavings and consumer national net present value.National Impact Analysis103Base CaseAnnual EnergyConsumption2045Base CaseAnnual EnergyConsumption2017Base CaseAnnual EnergyConsumption2016Base CaseAnnual Energy& WaterConsumption2015National Energy and Water Savings Flow DiagramNational Impact AnalysisShipmentsAnalysisStandards-Case ProjectionBase-CaseProjectionBase CaseAnnual EnergyConsumption2045Base CaseAnnual EnergyConsumption2017Base CaseAnnual EnergyConsumption2016Standards CaseAnnual Energy& WaterConsumption2015Base-CaseCumulativeEnergy& Water UseStandards-CaseCumulativeEnergy& Water UseSite to SourceEnergyConversionNational Energy& WaterSavings104National Consumer Net Present Value Flow DiagramNational Impact AnalysisShipmentsAnalysisStandards-Case ProjectionEnergy & WaterCost(2015 –2045)Base-CaseProjectionCumulativeOperating CostSavingsCumulativeTotal EquipmentCost IncreaseDiscountRateNet PresentValueMaint &Repair Cost(2015 –2045)EquipmentCost(2015 –2045)Energy& Water Cost(2015 –2045)Maint &Repair Cost(2015 –2045)EquipmentCost(2015 –2045)105National Impact AnalysisShipment-Weighted Efficiency andMarket Share Efficiency Data• Shipment-weighted efficiency data:– Key components of the national impact analysis are dependent onshipment-weighted efficiencies.• Per-unit annual energy and water consumption—needed to determine NES,NWS.• Retail price and per-unit annual operating costs—needed to determine NPV.– Historical trends in product efficiency help project future productefficiencies for the base-case.• Market share efficiency data– Historical market share efficiency data help estimate how standards willimpact base-case efficiencies.– Market share data (or base-case efficiency distributions) are requested inthe LCC and PBP analysis and will alsobe used in the national impactanalysis.• DOE has assumed a “roll up” scenario toforecast standards impacts in paststandards rulemakings.106National Impact AnalysisResidential Clothes Washer Historical Efficiency Data• DOE requests historical shipment-weighted average efficiency data byproduct class in order to calculate NES, NWS, and NPV.Shipment-Weighted Average EfficiencyYearTop-LoadingFront-LoadingSuds-SavingCompactStandardSemi-automatic(MEF or EF)(WF)(MEF or EF)(WF)(MEF or EF)(WF)(MEF or EF)(WF)(MEF or EF)(WF)199319941995199619971998199920002001200220032004200620072008107Item 10-1DOE seeks historical SWEF (EF or MEF and WF) data byproduct class. DOE also seeks historical market share data showingthe percentage of product shipmentsby efficiency level for as manyproduct classes as possible.Item 10-2DOE seeks input on its plan to develop NES spreadsheetmodels for estimating national impacts of amended energyconservation standards for residential clothes washers. For example,are spreadsheet models still the preferred approach for estimatingnational impacts?National Impact AnalysisRequest for Comment10823NOPR Analyses14Rulemaking OverviewIntroduction2Energy Conservation StandardsTest Procedure3IntroductionNOPR Analyses5Pre-NOPR Analyses46Closing RemarksPublic Meeting Agenda109FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis110FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis111Life-Cycle Cost Subgroup Analysis•Purpose:– Analyze the economic impacts of standards on consumers, includingsubgroups who may be disproportionately impacted compared withthe general user population.•Method:– Extend the LCC analysis to examine the impacts for definedsubgroups.Life-Cycle Cost Subgroup Analysis112Life-Cycle Cost Subgroup AnalysisItem 11-1DOE requests input as to which consumer subgroups, ifany, it should consider when devising standards for residentialclothes washers.Request for Comment113FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis114Manufacturer Impact AnalysisManufacturer Impact Analysis• Purpose:– Assess the impacts of standards on manufacturers.– Identify and estimate impacts on manufacturer subgroups that maybe more severely impacted than the industry as a whole.– Examine the impact of cumulative regulatory burden on the industry.• Method:– Analyze industry cash flow and net present value through use of theGovernment Regulatory Impact Model (GRIM).– Interview manufacturers to refine inputs to the GRIM, developsubgroup analyses, and address qualitative issues.115Manufacturer Impact AnalysisMethodology• In the NOPR phase, the MIA will consist of phases 2 and 3Phase 2Phase 3Phase 1Pre-NOPRNOPRIndustryprofile* Government RegulatoryImpact Model (GRIM)PreliminaryMIAInterviewsDevelopstraw-manGRIM*DevelopinterviewguideInterviews& industrywide /subgroupanalysesAssess directemployment,competition,cumulativeburden116Manufacturer Impact AnalysisMethodology: Phase 2• Consists of the strawman GRIM and interview guide preparationStrawman GRIMStrawman GRIM»Starting point for discussion ofimpacts»Inputs include:»Manufacturer prices»Shipment forecasts»Manufacturing cost estimates»Financial information»Starting point for discussion ofimpacts»Inputs include:»Manufacturer prices»Shipment forecasts»Manufacturing cost estimates»Financial informationInterview Guide PreparationInterview Guide Preparation»Interview topics include:»Engineering analysis»Shipments model»Cost structureand financialparameters»Conversion costs»Cumulative burden»Direct employment impacts»Import / Export issues»Consolidation / competitive impacts»Replacement parts or refurbishments»Impact of the standard’s effective date»Interview topics include:»Engineering analysis»Shipments model»Cost structureand financialparameters»Conversion costs»Cumulative burden»Direct employment impacts»Import / Export issues»Consolidation / competitive impacts»Replacement parts or refurbishments»Impact of the standard’s effective date117Manufacturer Impact AnalysisMethodology: Phase 3• Consists of the manufacturer interviews, subgroup analyses, andassessment of industry impactsManufacturer InterviewsManufacturer Interviews»Confidential discussion of potentialimpacts resulting from standards,including:»Obsolescence of existingmanufacturing assets»Tooling»Investment»Confidential discussion of potentialimpacts resulting from standards,including:»Obsolescence of existingmanufacturing assets»Tooling»InvestmentAssessment of ImpactsAssessment of Impacts»Assess competitive impacts onsmaller, significant manufacturers»Assess cumulative regulatoryburden on manufacturers fromamended DOE standards and otherregulatory actions»Assess impacts on industryemployment levels»Assess impacts on manufacturersubgroups»Assess competitive impacts onsmaller, significant manufacturers»Assess cumulative regulatoryburden on manufacturers fromamended DOE standards and otherregulatory actions»Assess impacts on industryemployment levels»Assess impacts on manufacturersubgroups118Manufacturer Impact AnalysisCumulative Regulatory Burden• Regulations that could affectthe industries impacted by thisrulemaking include:– DOE standards for residential clothes washers (existing andupcoming)– EPA-mandated phase-out of HCFCs– Reduction of Hazardous Substances (RoHS) directive.119Manufacturer Impact AnalysisItem 12-1DOE seeks comment on appropriate manufacturersubgroups, if any, that DOE should consider in a manufacturersubgroup analysis for residential clothes washers.Request for CommentItem 12-2What other regulations or pending regulations should DOEconsider in its examination of cumulative regulatory burden?120FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis121Utility Impact Analysis•Purpose:– Assess the overall impacts on domestic energy supplies that wouldresult from the imposition of standards.•Method:– DOE proposes to use NEMS-BT, a variant of the NEMS (NationalEnergy Modeling System) developed and used by DOE/EIA for theirAnnual Energy Outlook (AEO) report, as the basis of the UtilityImpact Analysis.– Outputs of the utility impact analysisinclude forecasts of electricityand gas sales, price, and avoided capacity resulting from acomparison of base and standards cases.– DOE will model the energy savings impacts from amended energyconservation standards using NEMS-BT to generate forecasts thatdeviate from the AEO reference case.Utility Impact Analysis122Utility Impact AnalysisItem 13-1DOE seeks input from interested parties on its plans touse NEMS-BT to conduct the utility impact analysis. Is the NEMS-BTmodel appropriate for assessment of utility impacts of energyconservation standards? If not, why? What would be a moreappropriate model for DOE to use?Request for Comment123FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis124Employment Impact Analysis•Purpose:– Assess the overall impact on national employment from theimposition of efficiency standards at differing levels.– Include both direct and indirect employment impacts.• Direct employment impacts are estimated in the manufacturer impactanalysis.• Indirect employment impacts result from shifting consumer expendituresamong goods and services ( “substitution effect”) and changingequipment and energy costs (“income effect”).•Method:– DOE intends to use the ImSET(Impact of Sector EnergyTechnologies) model for the evaluation of indirect employmentimpacts.(Note: ImSET is anupdate of IMBUILD.)Employment Impact Analyses125Employment Impact AnalysisItem 14-1DOE welcomes feedback on its planned approach forassessing national employment impacts, both direct and indirect, andis interested in whether other tools or factors should be considered aspart of its analysis. If other tools or factors should be considered,please identify them and explain why, and how, they should beintegrated into DOE’s analysis.Request for Comment126FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR AnalysisEnvironmental Assessment•Purpose:– Estimate national environmental impactsfrom new energy efficiency standardsfor residential clothes washers covered under this rule•Method:– DOE intends to use the environmental impacts predicted from the NEMS-BTmodeling analysis used for the Utility Impacts Analysis. The following emissionsare assessed:• Carbon dioxide (CO2)– NEMS calculates quantitiesof U.S. emissions of CO2from power plants– DOE will consider the use of monetaryvalues to represent the value of CO2emissions• Sulfur dioxide (SO2)– Clean Air Act amendments of 1990 cap SO2emissions– Any measurable impact from NEMSin terms of the trading price of SO2in the utility sector• Nitrogen oxides (NOx)– Clean Air Interstate Rule(CAIR) permanently caps NOxemissions in 28 eastern States and DC– NEMS calculates quantitiesof U.S. emissions of NOxfrom power plants in 22 “non-capped” States– For the 28 “capped” States and DC, NEMS willdetermine any measurable impact in terms of thetrading price of NOxin the utility sector• Mercury (Hg)– Court actions vacated the Clean Air Mercury Rule(CAMR), which would have capped Hg emissions– DOE is considering approaches to address the issueof Hg emissions in light of the court’s decisionEnvironmental AssessmentItem 15-1DOE invites comments on how to estimate monetary values associatedwith CO2 emissions reductions or on anywidely accepted valuesthat might be usedin DOE’s analyses.Item 15-2DOE seeks input from interested parties on how it should address NOxemissions in this rulemaking consistentwith the current CAIR requirements.Item 15-3Because court actions have vacatedthe CAMR, DOE seeks input frominterested parties on how it should address Hg emissions inthis rulemaking.Item 15-4DOE seeks input from interested parties on its plans to use NEMS-BT toconduct the environmental impact analysison the equipment covered by thisrulemaking. DOE is particularly interestedin whether there are any other approachesto the environmental assessment thatit should considerand the advantages anddisadvantages of each of those approaches.Item 15-5Are there any other environmental factors DOE should consider in thisrulemaking? If so, what are they andwhy should they be considered?Request for CommentEnvironmental Assessment129FrameworkDocumentPre-NOPRNOPRFinalRuleEffectiveDateSteps in the Standards Rulemaking: NOPRManufacturerImpactAnalysisUtilityImpactAnalysisEmploymentImpactAnalysisLife-CycleCostSubgroupAnalysisRevisePre-NOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisNOPR Analysis130Regulatory Impact Analysis•Purpose:– Explore the potential for non-regulatory alternatives to new energyefficiency standards.•Method:– Base the assessment on the actual impacts of any such initiatives todate, but consider information presented regarding the impacts that anyexisting initiative might have in the future.Regulatory Impact Analysis13123NOPR Analyses14Rulemaking OverviewIntroduction2Energy Conservation StandardsTest Procedure3IntroductionFinal Rule5Pre-NOPR Analyses46Closing RemarksNOPR Analyses5Public Meeting Agenda132In all correspondence, please refer to the Residential Clothes Washerrulemaking by:– Framework Document for Residential Clothes Washers– Docket Number EERE-2008-BT-STD-0019, and– Regulatory Identification Number (RIN) 1904-AB90Email:RCW-2008-STD-0019@ee.doe.govFeedback Is RequestedEspecially on Items Identified in Framework DocumentClosing RemarksPostal Mail:Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program,Mailstop EE-2J1000 Independence Avenue, SWWashington, DC 20585-0121Telephone: (202) 586-2945Comment period closes September 28, 2009Courier:Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program,6thFloor950 L’Enfant Plaza, SWWashington, DC 20024Telephone: (202) 586-2945