DEPARTMENT OF ENERGY Office of Energy Efficiency and Renewable Energy

Energy Conservation Program for Consumer Products; Denial of the Application for Interim Waiver and Publishing of the Petition for Waiver from Clothes Dryer Test Procedure of Miele Appliance Inc. (Miele ), (Case No. CD-001)

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy

SUMMARY: Today's notice publishes a letter denying an Interim Waiver to Miele from the existing Department of Energy (DOE or Department) clothes dryer test procedure for its clothes dryer, models T1515A, T1520, T1565CA, and T1570C, with a reverse tumble feature which Miele contends allows them to use a smaller capacity drum for a larger clothes dryer load. The existing clothes dryer test procedure does not have any recognition of the reverse tumble design feature.

Today's notice also publishes a "Petition for Waiver" from Miele. Miele's Petition for Waiver requests DOE to grant relief from the DOE clothes dryer test procedure relating to its clothes dryer, models T1515A, T1520, T1565CA, and T1570C.

Miele seeks to revise the definitions of compact and standard size clothes dryers in the test procedure. DOE is soliciting comments and information regarding the Petition for Waiver. Specifically, the Department is seeking technical information/data on how the reverse tumble feature affects test load

N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 -1- August 3, 1994 DEPARTMENT OF ENERGY , Office ofEnergy Efficiency and Renewable Energy
Energy Conservation Program for Consumer Products; Denial ofthe Application for InterimWaiver and Publishing ofthe Petition for Waiver from Clothes Dryer Test Procedure ofMiele Appliance Inc. (Miele), (Case No. CD-001)

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy

SUMMARY: Today1s notice publishes a letterdenying an InterimWaiver to Miele from the existing Department of Energy (DOE or Department) clothes dryer test procedure for its clothes dryer, models T1515A, T1520, T1565CA, and T1570C, with a reverse tumble feature which Miele contends allows them to use a smaller capacity drum for a largerclothes dryer load. The existing clothes dryer test procedure does not have any recognition ofthe reverse tumble design feature.
Today1s notice also publishes a "Petition for Waiver" from Miele. Miele1s Petition for Waiver requests DOE to grant relieffrom the DOE clothes dryer test procedure relating to its clothes dryer, models T1515A, T1520, T1565CA, and T1570C.

Miele seeks to revise the definitions ofcompact and standard sizeclothes dryers in the test procedure. DOE is soliciting comments and information regarding the Petition for Waiver. Specifically, the Department is seeking technical information/data on how the reverse tumble feature affects test load

-1- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994capacity.

DATES: DOE will accept-comments, data, and information not later than (30 days from publication).

ADDRESSES: Written comments and statements shall be sent to: Department of Energy, Office of Energy Efficiency and Renewable Energy, Case No. CD-001, Mail Stop EE-431, Room 5E-066, Forrestal Building, 1000 Independence Avenue, .SW, Washington, DC, 20585 (202) 586-7140.

FOR FURTHER INFORMATION CONTACT:

P. Marc LaFrance U.S. Department of Energy Appliance Standards Division Office of Codes and Standards Office of Building Technologies Office of Energy Efficiency and Renewable Energy Mail Stop EE-431 Forrestal Building 1000
.Independence Avenue, SW Washington, DC 20585 (202) 586-8423 Eugene Margolis, Esq U.S. Department of Energy Office of General Counsel Mail Stop GC-72 Forrestal Building 1000 Independence Avenue, SW Washington, DC 20585 (202) 586-9507

SUPPLEMENTARY INFORMATION:

The Energy Conservation Program for Consumer Program Products (other than

N:\CE-40\CE

-43\43C0MM0N\LAFRANCE\MIELEdis.002 -2- August 3, 1994 capacity.

DATES: DOE will accept-comments, data, and information not later than (30 days from publication).

ADDRESSES: Written comments and statements shall be sent to: Department of Energy, Office of Energy Efficiency and Renewable Energy, Case No. CD-001, Mail Stop EE-431, Room 5E-066, Forrestal Building, 1000 Independence Avenue, SW, Washington, DC, 20585 (202) 586-7140.

FOR FURTHER INFORMATION CONTACT: P. Marc LaFrance U.S. Department of Energy Appliance Standards Division Office ofCodes and Standards Office of Building Technologies Office of Energy Efficiency and Renewable Energy Mail Stop EE-431 Forrestal Building 1000.Independence Avenue, SW Washington, DC 20585 (202) 586-8423 Eugene Margolis, Esq U.S. Department of Energy Office ofGeneral Counsel Mail Stop GC-72 Forrestal Building 1000 Independence Avenue, SW Washington, DC 20585 (202') 586-9507

SUPPLEMENTARY INFORMATION:

The Energy Conservation Program for Consumer Program Products (other than

-2- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994automobiles) was established pursuant to the Energy Policy and Conservation

Act (EPCA), Public Law 94-163, 89 Stat. 917, as amended by the National Energy Conservation Act (NECPA), Public Law 95-619, 92 Stat. 3266, the National Appliance Energy Conservation Act of 1987 (NAECA), Public Law 100-12, the National Appliance Energy Conservation Amendments of 1988 (NAECA 1988), Public Law 100-357, and the Energy Policy Act of 1992, Public Law 102-486, 106 Stat. 2776, which requires DOE to prescribe standardized test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of covered consumer products, including clothes dryers. The clothes dryer test' procedure, among other things, provides a means of calculating an energy factor, a measure of energy efficiency, which is used to determine if a product is compliant with the minimum energy conservation standards. The Department imposed amended energy conservation standards requiring minimum energy factors for four of the five classes of clothes dryers in a final rule (56 FR 22279) issued May 14, 1991, and which is effective for products manufactured on or after May 14, 1994. These test procedures appear at 10 CFR Part 430, Subpart D.

DOE amended the prescribed test procedure by adding 10 CFR 430.27 on September 26, 1980, creating the waiver process (45 FR 64108). Thereafter, DOE further amended the appliance test procedure waiver process to allow the Assistant Secretary for Energy Efficiency and Renewable Energy (Assistant Secretary) to grant an Interim Waiver from test procedure requirements to manufacturers that have petitioned DOE for a waiver of such prescribed test procedures (51 FR 42823, November 26, 1986).

N:\CE-40\CE-43\43C0NP10N\LAFRANCE\MIELEdis.002 -3- August 3, 1994 automobiles) was established pursuant to the Energy Policy and Conservation Act (EPCA), Public Law 94-163, 89 Stat. 917, as amended by the National Energy Conservation Act (NECPA), Public Law 95-619, 92 Stat. 3266, the National Appliance Energy Conservation Act of 1987 (NAECA), Public Law 100-12, the National Appliance Energy Conservation Amendments of 1988 (NAECA 1988), Public Law 100-357, and the Energy Policy Act of 1992, Public Law 102-486, 106 Stat. 2776, which requires DOE to prescribe standardized test procedures tomeasure the energy efficiency, energy use, or estimated annual operating cost of covered consumer products, including clothes dryers. The clothes dryer test' procedure, among otherthings, provides ameans ofcalculating an energy factor, ameasure ofenergy efficiency. which is used to determine ifa product is compliant with the minimum energy conservation standards. The Department imposed amended energy conservation standards requiring minimum energy factors for four ofthe five classes ofclothes dryers in a final rule (56 FR 22279) issued May 14, 1991, and which is effective f.or products manufactured on or afterMay 14, 1994. These test procedures appear at 10 CFR Part 430, Subpart D.

DOE amended the prescribed test procedure by adding 10 CFR 430.27 on September 26, 1980, creating thewaiver.process (45 FR 64108). Thereafter, DOE further amended the appliance test procedure waiver process to allow the Assistant Secretary for Energy Efficiency and Renewable Energy (Assistant Secretary) to grant an InterimWaiver from test procedure requirements to manufacturers that have petitioned DOE for awaiver of such prescribed test procedures (51 FR 42823, November 26, 1986).

-3- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3. 1994The waiver process allows the Assistant Secretary to temporarily waive the

test procedures for a particular basic model when a petitioner shows that the basic model contains one or more design characteristics which prevent testing according to the prescribed test procedures or when the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption as to provide materially inaccurate comparative data. Waivers generally remain in effect until final test procedure amendments become effective, resolving the problem that is the subject of the waiver.

The Interim Waiver provisions, added by the 1986 amendment, allow the Assistant Secretary to grant an Interim Waiver when it is determined that the applicant will experience economic hardship if the Application for Interim Waiver is denied, if it appears likely that the Petition for Waiver will be granted, and/or the Assistant Secretary determines that it would be desirable for public policy reasons to grant immediate relief pending a determination on the Petition for Waiver. An Interim Waiver remains in effect for a period of 180 days or until DOE issues its determination on the Petition for Waiver, whichever is sooner, and may be extended for an additional 180 days, if
necessary.

Miele filed a Petition for Waiver and an Application for Interim Waiver on April 5, 1994 which was amended on April 20, 1994 and April 22, 1994, regarding its clothes dryers, models T1515A, T1520, T1565CA, and T1570C, with a reverse tumble feature. Miele states, "The specific design characteristics of the Miele clothes dryer make the classification of the product as "compact" totally unrepresentative of the products' true energy consumption

N:\CE-40\CE-43\43COt410N\LAFRANCE\MIELEdis.002 -4- August 3, 1994 The waiver process allows the Assistant Secretary to temporarily waive the test procedures for aparticularbasic model when apetitioner shows that the basic model contains one ormore design characteristics which prevent testing according to the prescribed test procedures or when the prescribed test procedures may evaluate the basic model in amanner so unrepresentative of its true energy consumption as to provide materially inaccurate comparative data. Waivers generally remain in effect until final test procedure amendments become effective, resolving the problem that is the subject ofthe waiver.

The InterimWaiver provisions, added by the 1986 amendment, allow the Assistant Secretary to grant an InterimWaiver when it is determined that the applicant will experience economic hardship ifthe Application for Interim Waiver is denied, if it appears likely that the Petition forWaiver will be granted, and/or the Assistant Secretary determines that itwould be desirable for public policy reasons to grant immediate reliefpending a determination on the Petition for Waiver. An InterimWaiver remains in effect for a period of 180 days or until DOE issues its determination on the Petition forWaiver. whichever is sooner, and may be extended for an additional 180 days, if necessary.

Miele filed a Petition forWaiver and an Application for InterimWaiver on April 5, 1994 which was amended on April 20, 1994 and April 22, 1994, regarding its clothes dryers, models T1515A, T1520, T1565CA, and T1570C, with
a reverse tumble feature. Miele states, liThe specific design characteristics ofthe Mie,le clothes dryermake the classification of the product as "compact" totally unrepresentative ofthe products' true energy consumption

-4- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994characteristics and provides materially inaccurate comparative data.". The

existing clothes dryer test procedure does not have any recognition of the reverse tumble design feature in determining dryer size or class.

On April 27, 1994, the Department received a letter dated April 22, 1994, from the Whirlpool Corporation (Whirlpool) opposed to Miele's Petition for Waiver and Application for Interim Waiver. On April 29, 1994, the Department received a letter from the General Electric Company (GE) also opposed to Miele's Petition for Waiver and Application for Interim Waiver. Miele was provided with copies of both Whirlpool's and GE's letters on April 29, 1994. On May 13, 1994, Miele provided rebuttal comments to the Whirlpool and GE letters. On May 13, 1994, the Department received a letter dated May 5, 1994, from the Speed Queen Company (Speed Queen) opposed to Miele's Petition for Waiver.

On May 20, 1994, Miele also provided additional information on the impact of reverse tumble action on drying large loads. The Department has reviewed all the comments and believes that the majority of these comments relate to technical issues which should be fully debated during the Petition for Waiver comment period. The Department is interested in the maximum load capability of compact clothes dryers and any data regarding energy consumption with larger loads.

Relative to showing economic hardship, GE points out that Miele is a U.S. subsidiary of a large European multinational appliance manufacturer. Miele stated that neither Whirlpool nor GE challenged Miele's submission in regards

N:\CE-40\CE-43\43C0MMON\LAFRANCE\MIELEdis.002 - 5- August 3. 1994 characteristics and provides materially inaccurate comparative data.". The existing clothes dryer test procedure does not have any recognition ofthe
reverse tumble design feature in determining dryer sizeor class.

On April 27, 1994, the Department received a letterdated April 22, 1994, from the Whirlpool Corporation (Whirlpool) opposed to Miele's Petition forWaiver and Application for InterimWaiver. On April 29, 1994, the Department received a letter from the General Electric Company (GE) also opposed to Miele's Petition forWaiver and Application for InterimWaiver. Miele was provided with copies ofboth Whirlpool IS and GEls letters on April 29,**1994~** On May 13, 1994, Miele provided rebuttal comments to the Whirlpool and GE letters. On May 13, 1994, the Department received a letterdated May 5, 1994, from the Speed Queen Company (Speed Queen) opposed to Miele's Petition for Waiver.

On May 20, 1994, Miele also provided additional information on the impact of
reverse tumble action on drying large loads. The Department has reviewed all the comments and believes that themajority ofthese comments relateto technical issues which should be fully debated during the Petition for Waiver comment period. The Department is interested in themaximum load capability ofcompact clothes dryers and any data regarding energy consumption with larger loads.

Relative to showing economic hardship, GE points out that Miele is aU.S. subsidiary ofalarge European multinational appliance manufacturer. Miele stated that neitherWhirlpool nor GE challenged Miele's submission in regards

-5- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994to Miele experiencing economic hardship if the Application for Interim Waiver

is denied.

GE also indicated that Miele waited until the last moment to submit their Petition for Waiver and Application for Interim Waiver. The Department realizes that Miele only submitted their Petition for Waiver and Application for Interim Waiver a little over a month prior to the effective date of the new standards, however, the Department does not believe, that by itself, this would be grounds for denial.

Whirlpool indicated that they redesigned their compact dryer to meet the new energy conservation standards, instead of asking for such a waiver. Whirlpool also indicated that they could meet the "standard" capacity minimum energy conservation standard (7 pound performance rating) with their dryer of capacity less than 4.4 cubic feet. Whirlpool further states that their competitive advantage would be eroded if they allowed a competitor to be granted a waiver. The Department does not believe that "competitive advantage" is pertinent nor a reason to deny Miele an Interim Waiver. Miele states in its initial submission to the Department, that "Miele Appliance, Inc. is a small company with under 50 employees and will suffer great and irreparable economic hardship if it cannot sell its line of clothes dryers as standard". Miele further states that since their clothes dryer is intended to be sold with their standard size front loading clothes washer, that "an inability to sell the clothes dryer as standard will cripple sales of washing machine as well". Miele also states that "since the revenue from the sale of laundry products is essential to the financial well being of the

N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 - 6- August 3, 1994 to Miele experiencing economic hardship ifthe Application for InterimWaiver is denied.

GE also indicated thatMiele waited until the lastmoment to submit their Petition for Waiver and Application for InterimWaiver. The Department realizes that Miele only submitted their Petition for Waiver and Application for InterimWaiver a littleover amonth priorto the effective date ofthe
new standards, however, the Department does not believe, that by itself, this would be grounds for denial.
Whirlpool indicated that they redesigned theircompact dryer to meet the new energy conservation standards, instead of asking for such awaiver. Whirlpool also indicated that they could meet the IIstandardll capacityminimum energy conservation standard (7 pound performance rating) with theirdryer of capacity less than 4.4 cubic feet. Whirlpool further states that their competitive advantage would be eroded ifthey allowed acompetitor to be granted awaiver. The Department does not believe that IIcompetitive advantageII is pertinent nor a reason to deny Miele an InterimWaiver. Miele states in its initial submission to the Department, that IIMiele Appliance, Inc. is a small company with under 50 employees and will suffer great and irreparableeconomic hardship ifit cannot sell its lineofclothes dryers as standardll • Miele further states that since theirclothes dryer is intended to be sold with their standard size front loading clothes washer, that lIan inabilityto sell the clothes dryer as standard will cripple sales of washing machine as well il • Miele also states that IIsince the revenue from the
sa1 e of 1 aundry products is essentialto the financia 1well being ofthe
-6- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994company, the regulatory prohibition of sales of the clothes dryers as standard

will jeopardize the company and result in loss of employment".

In order for the Department to be able to grant Miele an Interim Waiver, one of the three criteria stated above must be met. First, in regards to "economic hardship", Miele has indicated that failure to sell their clothes dryers as "standard size" will impact the sale of their laundry products and result in loss in employment. However, Miele did not specify any historical nor future anticipated revenue from these particular models in question. Furthermore, Miele did not provide any financial data relative to their company nor the financial affiliation of their parent company. The Department agrees that the loss of sales of any product will financially affect a company, however the Department does not believe that Miele has demonstrated that it would cause economic hardship.

Second, in regards to "it appears likely that the Petition for Waiver will be granted", the Department has concerns about the validity of the Petition for Waiver. This concern is primarily raised by the appearance that Miele is actually submitting the Petition for Waiver to allow its products to meet the minimum energy conservation standard versus the test procedure providing results which are materially unrepresentative. On the other hand, the Department is aware that the reverse tumble feature improves efficiency and reduces drying times for some types of drying loads, although these types of loads are not tested by the test procedure. Therefore, the likelihood of a Waiver being granted is unknown at this point in time and that is why the Department is requesting additional information relative the reverse tumble

N:\CE-40\CE-43\43COMM0N\LAFRANCE\MIELEdis.002 -7- August 3, 1994 company, the regulatory prohibition of sales ofthe clothes dryers as standard will jeopardize the company and result in loss ofemploymentll•

In order for the Department to be able to grant Miele an interimWaiver, one ofthe three criteria stated above must be met. First, in regards to lIeconomic hardshipll, Miele has indicated that failure to sell theirclothes dryers as IIstandard s izell wi11 impact the sa1 eoftheir 1 aundry products and result in loss in employment•. However, Miele did not specify any historical
nor future anticipated revenue from these particularmodels in question. Furthermore, Miele did not provide any financial data relative to their company nor the financial affiliation oftheirparent company. The Department agrees that the loss of sales ofany product will financially affect a company, however the Department does not believe that Miele has demonstrated that itwould cause economic hardship.
Second, in regards to lIit appears likely that the Petition for Waiver will be grantedll
, the Department has concerns about the validityofthe Petition for Waiver. This concern is primarily raised by the appearance that Miele is actually submitting the Petition for Waiver to allow its products to meet the minimum energy conservation standard versus the test procedure providing results which are materially unrepresentative. On the other hand, the Department is aware that the reverse tumble feature improves efficiency and reduces drying times for some types ofdrying loads, although these types of loads are not tested by the testprocedure. Therefore, the likelihood ofa Waiver**being~granted** is unknown at this point in time and that is why the Department is requesting additional information relativethe reverse tumble

-7- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994feature in today's notice.

Third, in regards to "it would be desirable for public policy reasons", Miele has indicated that denial of the Waiver would be destructive to the company and anticompetitive. The Department does not believe that either conclusion was demonstrated by Miele. Furthermore, they indicated that denial of the Waiver blocks innovative, improved. designs. The Department believes that the validity of the innovative and/or improved designs relative to clothes dryer capacity will be fully discussed in response to comments from the Petition for Waiver. The Department does not believe this would be a concern for public policy. Rather, what it shows is that manufacturers can not wait until the "eleventh hour" to file a petition and make a point relative to public policy. Miele's submission also indicated that they made a significant investment for their products to comply with recognized U.S. safety testing standards. The Department is perplexed as to how a major european manufacturer who is certainly aware of numerous, multinational energy conservation programs, would not be aware of the U.S. mandated minimum energy conservation standards for clothes dryers. If Miele had known about the required U.S. minimum energy conservation. standards, then product development for safety standards could have been done concurrently with energy efficiency improvements.

Therefore, for the reasons stated above, the Department denies Miele's Application for Interim Waiver from the DOE test procedure for its clothes dryers, models T1515A, T1520, T1565CA, and T1570C. Pursuant to paragraph (e) of §430.27 of the Code of Federal Regulations Part 430, the following letter denying the Application for Interim Waiver to Miele was issued.

N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 -8- August 3, 1994 feature in today's notice.
Third, in regards to "itwould be desirable for public policy reasons", Miele has indicated that denial oftheWaiverwould be destructive to the company and**~nticompetitive.** The Department does not believe that eitherconclusion
was demonstrated by Miele. Furthermore, they indicated that denial ofthe Waiver blocks innovative, improved**~esigns.** The Department believes that the validity ofthe innovative and/or improved designs relativeto clothes dryer capacity will be fully discussed in response to comments from the Petition for Waiver. The Department does not believe thiswould be aconcern for public policy. Rather, what it shows is thatmanufacturers can not wait until the "eleventh hour" to file apetition and make apOint relativeto public policy. Miele's submission also indicated that they made a significant investment for theirproducts to comply with recognized U.S. safety testing standards. The Department is perplexed as to how amajor european manufacturerwho is certainly aware ofnumerous, multinational energy conservation programs, would not be aware ofthe U.S. mandated minimum energy conservation standards for clothes dryers. IfMiele had known about the required U.S. minimum energy conservation standards, then product development for safety standards could have been done concurrently with energy efficiency improvements.
Therefore, for the reasons stated above, the Department denies Miele's Application for InterimWaiver from the DOE test procedure for its clothes dryers, models T1515A, T1520, T1565CA, and T1570C. Pursuant to paragraph (e) of§430.27 ofthe Code of Federal Regulations Part 430, the following letter denying the Application for InterimWaiver to Miele was issued.

-8- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994Pursuant to paragraph (b) of 10 CFR Part 430.27, DOE is hereby publishing the

"Petition for Waiver" in its entirety. The petition contains no confidential -information. DOE would appreciate comments, data and, other information regarding the petition discussed above.

Issued in Washington, DC

Christine A. Ervin Assistant Secretary Energy Efficiency and Renewable Energy

N:\CE-40\CE

-43\43COMMON\LAFRANCE\MIELEdis.002 -9- August 3, 1994 Pursuant to paragraph (b) of 10 CFR Part 430.27, DOE is hereby pub1ishing the "Petition for Waiver" in its entirety. The petition contains no confidential

-infonnation. DOE would-appreciate conments, data and. other infonnation

regarding the petition discussed above.

Issued in Washington, DC

ChristineA. Ervin Assistant Secretary Energy Efficiency and Renewable Energy

-9- N:\CE-40\CE-43\43COMMON\LAFRANCE\MIELEdis.002 August 3, 1994