CAS-RM-78-110 COMMENT 09

Friday

April 2, 1982

Part V

Department of

Energy

Office of Conservation and Renewable

Energy

Energy Conservation Program for

Consumer Products
 CAS-RM-78-110 COMMENT 09

14424 Federal Register I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules

DEPARTMENT OF ENERGY ..-

Office of Conservation and Renewable

Energy

10CFR Pm 430

Energy of Conaervation Program for

Conaumer Products; ProPOaed

RuJemaklng and Public Hearings

Regarding Energy Efficiency

Standards for Refrigerators and

Refrlgerator..freezers. Freezers,

C1oth.. Dryers. Water Heaters. Room

Air Condition..... Kitchen Rang..and

aven., centra' Air Condltfoners, and

Fumace..

AGIHC;Y: Office of Conservation and

Renewable Energy. DOE.

ACT1ON: Notice of proposed rulemaking

and public hearings.

SUMMARY: The Energy Policy and

Conservation Act. as amended by the

National Energy Conservation Policy

Act. as a general matter requires that

the Department of Energy prescnbe an

energy efficiency standard for each of

certain major household appliances.

unless it determines. by rule. that a

standard will not result in significant

conservation of energy, is not

technologically feasible, or is not

economically justified.

The Department of Energy is

proposing to determine that an energy

efficiency standard for refrigerators and

refrigerator-freezers, freezers. clothes

dryers. water heaters. room air

conditioners. kitchen ranges and ovens.

central air conditioners, or furnaces

would not result in a significant

conservation of energy or be

economically justified. Therefore, the

Department is today proposing to amend

Title 10. Part 430 of the Code of Federal

Regulations to include a determination

of no standard for the above-mentioned

covered products.

The proposed rule would also add

amendments regarding petitions that

may be made by States or

manufacturers with regard to Federal

preemption of State and local efficiency

standards.

The purpose of this notice of proposed

rulemaking is to provide interested

persons an opportunity to comment on

the proposed rule. and to invite

interested persons to participate in the

rulemaking process.

DATES: Written comments on this

proposed rule must be received by the

DeparbnentbyJune 16.1982. Foran

additional 45 days thereafter. DOE will

accept comments regarding oral and

written comments submitted to DOE

prior to June 16, 1982.

Oral views. data. and arguments may

be presented at either one or both of the

following public hearings:

Public Hearing. Washington. D.C. A

public hearing will be held in

Washington. D.C.. on May 18-21. 1982:

requests to speak must be received by

the Department no later than 4 p.m..

April 27. 1982: speakers will be notified

by 4 p.m.. May 4. 1982: speakers lists

will be available by 4 p.m.• May 50 1982:

fifteen copies of the statement of the

speaker must be received by the

Department no later than 4 p.m.. May 11.

1982-

Public Hearing. Chicago. Illinois. A

public hearing will be held in Chicago.

lllinois. on May 11-12, 1982: requests to

speak must be received by the

Department no later than 4 p.m.. April

20. 1982: speakers will be notified by 4

p.m.• April 27, 1982: speakers list will be

available by 4 p.m.• April 28, 1982;

statements of the speakers must be

received by the Department no later

than 4 p.m.. May 4, 1982.

The length of each presentation is

limited to 20 minutes.

ADDAUSE8: Written comments.

statements. requests to speak at the

hearing. requests for speakers lists. and

requests for copies of the technical

support documents are to be submitted

to: U.S. Department of Energy. Office of

Conservation and Renewable Energy.

Office of Hearings and Dockets, Energy

Efficiency Program for Consumer

Products.DocketNo.~RM-78-11~

Mall Station 68-025. ROQm 5F-078,

Forrestal Building. 1000 Independence

Avenue. S.W•• Washington. D.C. 20585.

(202) 252-9319.

The two hearings are to be held at the

Auditorium (GE-086). Forrestal Building,

1000 Independence Avenue. S.W.•

Washington. D.C.• on May 18-21. 1982.

at lJ.a.m•• and Room 204A, Everett

McKinley Dirksen Federal Building. 219

South Dearborn Street. Chicago. lllinois.

on May 11-12, 1982. at 9 a.m.

Copies of technical support

documents. transcripts of public

hearings. and public comments received

may be read in the DOE Freedom of

Information Reading Room:

U.S. Department of Energy. Freedom of

Information. Public Reading Room.

Forrestal Building. Room lE-l90. 1000

Independence Avenue. S.W.•

Washington. D.C. 20585. •

FOR FURTHER INFORMAnON CONTACT:

Michael J. McCabe. U.S. Department of

Energy. Office of Conservation and

Renewable Energy. Office of Building

Energy Research and Development.

Test and Evaluation Branch. Mall

Station CE-113. Room GH-oos,

Forrest8.l Building. 1000 Independence

Avenue. S.W.• Washington. D.C.

20585. (202) 252-9127

Lana Feldman. Acting Assistant General

Counsel for Conservation and

Renewable Energy, U.S. Department

of Energy. Mall Station GC-33. Room

68-194. Forrestal Building. 1000

Independence Avenue. S.W.•

Washington. D.C. 20585, (202) 252-

9507. or

Eugene Margolis. Esq., U.S. Deparbnent

of Energy, Office of General Counsel.

Mail Station GC-33. Room 6B-128.

Forrestal Building. 1000 Independence

Avenue. S.W.• Washington. D.C.

20585. (202) 252--9510

SUMMARY:

L Introduction.

a. Authority.

b. Background.

n. General Discussion.

a. Test Procedures.

b. Technological Feasibility.

c. Energy Savings.

1. Determination of Savings.

2. Significance of Savings.

A. Oil and Gas Savings.

B. Electricity Savings.

C. 20 Percent Savings.

d. Economic Justification.

1. Economic Impact on Manufacturers

and Consumers.

2. Lile Cycle Cost and Net Present

Value.

3. Energy Savings.

4. Lessening of Utility or Performance

of Products.

5. Impact of Lessening Competition.

6. Need of the Nation to Conserve

Energy.

7. Other Factors.

A. Regulatory Flexibility.

B. Request for Comments.

8. Weighing of Factors.

m. Product-Specific Discussion.

a. Refrigerators and Refrigerator·

Freezers.

b. Freezers.

Co Clothes Dryers.

d. Water Heaters.

e. Room Air Conditioners.

f. Home Heating Equipment, Not

Including Furnaces.

g. Kitchen Ranges and Ovens.

h. Central Air Conditioners.

i. Furnaces.

IV. Preemption of State Regulations.

V. Environmental. Regulatory Impact.

and Regulatory Flexibility Reviews.

a. Environmental Review.

b. Regulatory Impact Review.

Co Regulatory Flexibility Review.

VI. Public Comment Procedures.

a. Participation in Rulemaking.

b. Written Comment Procedures.

c. Public Hearings.
 CAS-RM-78-110 COMMENT 09

Federal Register I VoL 47. No. 64 I Friday. April 2, 1982 I Proposed Rules 14425

•

I. Introduction

a. Authority. Part B of TItle.m01 the

Energy Policy and Conservation Act

(EPCA) (Pub. L. 94-183), as amended by

the National Energy CODllervtltion Policy

Act (NECPA) (Pub. L. 95-619}, 1 C1'1!&tes

the Energy Program for Consumer

Proclucts Other Than Automobiles. '1'b8 consumer products subject to this

program (often referred to hereafter as

"coV'1m!d products'1 sre: refrigerators

and ref:rigerator freezers:: freez~

dishwasherr. clothes dryers; water

heaters: room air conditionen; home

heating'equipment. not fnduding

furnaces: television sets: kitchen ranges

and ovens; clothes washerr..lnmtidifiers

and delmnidifiers; central all

cO'Oditioners; and furnaces. as we~ as any other consumer product classIfied

by the Secretary of Energy, if the

product uses a specified minimum

amount of energy. See section 322. The

Secretary bas notso danified any

additional products. , UDder the Act the program COIlRats

essentially of three parts: ~s~

labeling. and mandatat'1 m.uumtml

energy efficiency standards. The

Department of E.aetgy. in CQIlSll.\tation

with the National Bureau of Standards.

is required to estab¥sh test procedures

for eacll of the covered products..

Section 323(a)(2). The purpose 01 the mat

procedures ia \0 provide for \.est reawts

that reflect the energy e~,energy

use or estimated 8.IlIWal opuati.IIg costs

of e'ach ofthe covued products. Section

323(b)(1). AD test procedures were

required to be adopted not latE!!' than

May 1. 1978. SectioD 323(a) (4) and (61. A

.test procedure was not required ifDOE

determined by rule that one could not be

developed. Section 3%3(a}{6}(B). One ,

hundred and eighty days after a test

procedure for a product is adopted. no

manufacturer may represent the energy

consumption of or the oost af energy

consumed by the procluc:t excepta.

reflec:ted in a test cond:acted Kcording

to the DOE procedure. Section 323(c).

Test proced\1l'eS have heeD prescribed

.relating to all products. bl1~ on the basis

of continuq review. eertaiJl cLasses of

products do not haw cammtJy

applicable telIt pmcedm"U.

The Federal Trade CoI'AllJiacion (FTC)

is required bJ the Ad to praaibe rales

goverDiDcJ tb& labeling of the covered

produda. Section 324(a). These ntle. are

to require that each particular model of

a covered product heal a lAbel that

indicat" its annual operating COlt and

the range of estimated amIual operating

costs for odler models of that pl:oclw:t.

I P8rt Bof TIdlI m..EPCA. ..-..ded '" tile

NECPA. iii oft•• Nloer7eoII to lit !ilia nollw ••lb

"Act."

Section 324(c}{l). A rule la Dot required

under section 3Z4 if the Secretary of

Ene1'8Y determines that dilIclcaure of

estimated costa oa a

label is not tecbDolo@ically leesilile or if

the FTC determines tilat .1IICh disclosure

la not likely to anist C1DUume:r1 in

making puchaainc deciaiolla or .. not

economically fea.»ble. Section 3Z4{c).

No labeling ru1e can be made with

resped to a product fur which then i.

no DOE te.tintJ procedure. Section

324(b)(3). At the present time thet'e is an

FTC rule requirlni Iabela under the Act

for the fo1lowi.nc pl:oducts: Room air

conditioDen. furnaces. clothes washers.

dishwashers. watl!r heaters. freezers.

and refrigerators and. reCl'.igeratorfreezers.·

For each oI the covered proc1ud.s,

DOE is required to establish maadatory

energy efficiency sta.ndarcl.s that are .

designed to achieve the m~um ,

improvement in energy effic.ency that 1$

tecl:uullogically f.eaa.ible and

economi.cal1y justified. Section 325{a){l)

and (c). The Act provides. however. that

no standard for a product is to be

established if'there is not test procedme

for the product. or ifDOE determines by

rule either that a standard would not

result in significant conservation of

energy or that a standard Is not

technologically feasible or economically

justified. Section 3%5(b). In determining

whether a Itlmdard is economically .

justified. the Department br directed to

detemliD.e whether the benefits atthe

standard exceed ttl burdens by

weighing six IpeCffic factgr.r, as: weD a.

anyvther fa1:tors DOE considers

rehmmt. Section :s2S(d). The factOl'll' are;

(1) Th9 econamic impact of the

standard an the manufacturer's and on

the COtI:S'QJDefll atthe prod'ad subject to

sucil standard:

(2).The savingS' i:Q operating costs

throughoat the amated average .I:ife of

the covered product in the type (or

clasS']. compared to my increase in the

price of: or in tt1e inttial ch8l"gM lor. or maintenance expeDftll' of the CO"t'"et'ed

product. which are Ukely to result from

the impo.ition of the standard;

(3) The total projected lIl1IOUftt of

energy AViDsa likely to renft directly

from the impoaitioo of the- IrilUldant:

(4) A:D:1 lneeniJIg otthe- utility or the

performance of the cO'Y'el'ed products

likely to resah fiolII the- imposition of the

standard;

fS) The impact ofmy fessenins' of

competitiOl1, determined in mtting by

the Attorney GeueraL that is likely to

result from the imposition of the •

standard; aDd

(8) The need of the Nation to conserve

energy.

A rule estabOshiug an energy

efficiency standard for II product may

set different levels of efficiencies for

different elaue. J of that product if they

use a different kind of energy or have

different capacity or performance

related features that justify different

levels of efficii!DCies. Sec. 325{f). When a

standard kas been established. DOE

may exempt a manufacturer ,whose ,

gross revenues in the precedIng year did

not exceed sa million from the effect of

the standard for up to two years. if DOE

determines, after obtaining the views of

the Attorney General. that failure to

grant the exemption would likely result

in a lessening to competioon. Section'

325(e).

The Act specifies the priorities and

procedures to be followed in adopting

efficiency standards. Nine of the 13

covered products are given priority

under the Act. Section 325(g). These nine

products are: refrigerators and

refrigerator·freezers, freezers. clothes

dryers, water healers. room air

conditioners, home beating equipment

(other than furnaces), kitchen ranges

and ovens, central air cond1tioners. and

furnaces. These products are the subject

of this rulemaking.•

The procedures include a requirement

for an advance notice of pruposed

rulemaking upon which interested

persona may make written comments.

Section 32S{i)(1). Thereafter. there is to

be a notice oI propoled rulemaking,

upon which interested persons may

make written and oral comments.

including an opportrunity to question

those who make such comments with

respect to disputed issues of material

fact. Section 325(i)(3) and section

336(a)(1).

Section 327 of the Act addresses the

eff.ect of Federal rules concerning

testing. labeli:ag. and standards on State

laws or regulations concerning such

matters. Generally. all such State laws

or regulations are superseded by the

Federal rule. Section 327(a). A rule by

DOE that an efficiency standard is not

technologically feasible. economically

justified. or likely to Mve .ignulCant

amounts oI enel'lY is a rule that

supersedes any State standard. See

section 325(b}.1f. beeause there is no

federal rule.. • &aut efficiency standard

'Each c:ownd JII"Il!Itd ClItorpry _, be made up

of .everal cla_ Sal itJ{."Q.. .

'No rule i. propoaed today for home heatlng

equipment (other than furnace.). electric heat

JIUIIIP' (a eta.. of llMr prodlllCt anrlI'aI .ir

condltivnenJ. MId .Iectric heal pmnp weIer heale,.".

ThJ. Ie explained in !be product-apecific diacus.ion.

infra·
 CAS-RM-78-110 COMMENT 09

14426 Federal Register I Vol. 47, No., 64 I Friday. April 2. 1982 I Proposed Rules

• AI Uled In thla preamble. "product" refers to Ihe

llenaric product of ucla type Mted In .eclion 322{a)

of EPCA (e.." fumace 01' freezer). ..Cl..... meaDi e

product .ub.et wblch bo Ibe aame primary en8'1!Y

1OW'Cll (I.e.• lla.. oU or electricity) and the same

capacity or performance-related feelure which

affecII Ibe eDlI'llY efficiency of the unit (e.a.• che.l

freezer. uprlahl freezw with manual dell·o.t and

upriahl freezer wilb aUlomatic defrosl).

product.' With respect to each product.

various specific design options currently

available on existing equipment were,

analyzed. This procell is fully deScribed

In the Engineering Analysis Document.

See Chapters B. C. and D. Computer

models were used to predict

improvements in efficiency of products

and the costs associated with the

improvements. From this data, cost/

efficiency curves were derived which

present the relationship between

increases In efficiency and the costs

necessary to achieve these Increases.

The possible standards to be analyzed were chosen from points on these

curves. witlt- the highest standard to be

analyzed generally corresponding to the

most efficient combination of the design

options analyzed. Lower standards - levels were chosen from points on the curve to provide a spectrum of analysis.

The performance standards chosen for

review were generally lower than those

proposed in the June 30 proposal. This was due to changes In the engineering

analysis largely as a result of public

comments on the June 30 proposal.

These changes are addressed in the

Engineering Analysis Document.

a. Test Procedures. WhUe there are existing test procedures for most

covered products. for certain classes of

product there ere no test procedures.

These are Identified in the productspecific discussion.

b. Technological Feasibility. For all

products and classes of products. DOE

believes the efficienq levels analyzed are technologically feasible. In three cases. however, DOE hu det.rlDined

that Increases In efficiency are not

technologically feasible: electric cooking

topS; electric furnaces. and microwave ovens. They are Identified In the

product-specific discussion.

c. Energy Savings.

1. Determination ofSavings. DOE

quantified the energy savings that would

be attributable to a standard imposed at

each of the analyzed levels of efficiency

for each product. This was done through

use of the Oak Ridge National

Laboratory Residential Energy End Use

Model (ORNL Model). The ORNL Model

ia fully explained In the Economic

Analysis Document. see especially

Appendix E. This computer model is

used to project residential energy use by

efficiency standarda. The June 30

propo.al was based upon five technical

support documenta which were made

available for public review.

In order to encourage public

participation In the rulemaklng process

the DOE held a series of public meetings

and hearinp. starting In July 1980.

Public hearings were conducted In

Chicago and Washington In August

1980. AI a result of these hea.rinp and

the solicitation of written comments, over 1800 commenta were received on

the June 30 proposal These comments

addressed all aspects of the rulemaklng

proposallncluding the establishment of

classes in each covered product type,

the feasibility of the standards selected

for each covered product. the validity of

the assumptions made In the technical

support documents. the procedure for

seeking exemptions for State regula:tlons

from preemption by the Federal

standard, the effective date of a final

regulation. the propriety of standards for

small businesses. whether alternatives

to regulations were practical. and the

proposal for certification and

enforcement procedures.

~'" On December 11. 1980. the

Department notified the Congress of its

inability to make a final determination on the imposition of energy efficiency

standards on the nine covered products

by the deadline ofJanuary z. 1981. On

FebrulUJ %3, 1981. DOE published a notice of ita Intent not to iaaue any

eD.eI."gf efficiency standard until it fully

studied the comments received on the

June 30 proposal and made a thorough

reasseument of the data supporting the

proposal 46 FR 13517. AI stated In the

February 23, 1981. notice, DOE has

conducted a full reevaluation of the June

30 proposal and both the ''Engineering

Analysis Document" and ''Economic

Analysis Document". As more fully set

forth herein. DOE has reviewed all of its

prior a8lumptions and conclusions In

order to reflect the justified concerns of

many of the comments.

n. GeaeraJ Diac:ussioD

AI indicated In the Authority section

abova. the Act prohibits DOE from

promulgatin8 a standard for a product if

(1) there is no test procedure for the

product. (2) a .tandard ia not

technologically feasible. (3) DOE finds a

standard would not result In a significant conservation of energy, or (4)

DOE finds a standard would not be

,economically justified. To measure possible savings and economic

justification. DOE analyzed three (and

In some cases. four) different possible

standards for each product or class of

Is not superseded, penons subject to It

may petition DOE to have it superseded

on the basis that there is no significant

State or local interest sufficient to justify

the regulation and such regulation

unduly burdens interstate commerce. Section 327(b)(1). A State whose energy

efficiency standard i. superseded may

petition the Department for a rule that it

not be superseded. on the ba.is that

there ia a significant State or local

interest to justify the standard and the

State standard ia a stricter standard.

However, DOE cannot issue the

requested rule if the State standard

would unduly burden interstate commerce. Section 327(b)(3).

b. Background.The DOE published its

first advance notice of proposed

rulemaking pursuant to section 325(1)(1)

for the nine first priority products on

January 2. 1979. 44 FR 29. On December

13. 1979. the DOE published an advance

notice of proposed rulemaking for

dishwashers, television sets. clothes

washers, and humidifiers and

dehumidifiers. 44 FR 72276. An advance

notice for central air conditioners (beat

pumps) was published on January 23,

1980. 45 FR 5502. These advance notices were designed to present a full

discussion of the Department's views

concerning the standards program and

the process for its implementation. DOE

also set forth Its views concerning the

criteria for selecting classes in each

product type and the maximum

technologically feasible efficiency

standard for each class of product. DOB

specifically requested comments on all

matters presented In the advance

notices. Meetings were held throughout

1979 and 1980 to solicit the views of all

concerned plirties.

After receiving comments on the

advance notices, on June 30. 1980, the

DOE set forth its first proposed

rulemaking for the nine products. 45 FR

43976. (Hereafter referred to as the June

30 proposal). The June 30 proposal set

forth the DOE's proposal concerning

energy efficiency standards for these

covered products. I It also proposed

procedures for processing petitions by

states that sought exemption for

regulations subject to the general . preemption requirements ofsection

327{a) of the Act. The June 30 proposal

considered comments received In

response to the advance notice on these

nine products and made changes In the

DOE's initial determinations concerning

classes for each covered product and

the methods for determining energy

•DOE II today proPO'i1IB to adopt levera! of Ibe

definltlona let forth In Ibe June 30 propouJ. Theae

deflDitioll.l. at 430.2, aenerally relterala Ibe

dellnilioDi let forth In aec:lioDi 3 and 3%1 of Ibe Ad.
 CAS-RM-78-110 COMMENT 09

. Federal Register I Vol. 47, No. 64 I Friday, April 2. 1982 I Proposed Rules 14427

"

a product with and without .tandard.

for the period 1987-2005.' By comparing

the energy used without a standard

during the period 1987-2005 to the

energy used with a particular .tandard

during the .ame period, DOE estimated

the amount of energy saved during that

period due to that standard. The energy

saved is expressed In Quads

(quadrillion BTUs). With respect to

electricity the savings are Quads of

source or primary energy: that is, the

energy that is necessary to generate and

transmit electricity. "Energy use" is

defined In the Act as the quantity of

energy directly consumed by a -

consumer product at point of use. This is

sometimes referred to as "site" energy,

as opposed to source energy. The

amount of electrical energy at the site is

approximately 29 percent I of the

amount of source energy required to

generate and transmit that site electrical

energy. Thus, it is always important to

Identify whether the amount of energy

Identified as electricity is source or site

energy.

DOE used the llame computer model

In its June 30 proposal. However. based

on comments to that proposal, further

analysis, and more recent data. some

Inputs to the model were changed from

thpse used for the June 30 proposaL

These changes are all fully described In

the Economic Analysis Document. see especially 12.4 and Appendix E.

The ORNL projections are dependent

on many assumptions. Among the most

important are responsiveness of

household purchases to changes In

-energy prices and consumer Income;

future energy prices; future levels of

housing construction; and options for

improving the energy efficiencY'>f

products. As is the case with any

complicated computer model simulation.

the validity of the outputs is critically

dependent on the inputs. Several of the

Inputs (e.g., energy prices and equipment

costs) were tested in sensitivity .

analyses to determine the effects of

varying certain assumptions on the

results of the analysis. By such

sensitivity analyse. one can determine

those Inputs where change. including

, 'This model we. prosralllll'Hld to analyze I lll:ls1e

ltendard 1nwI. or no .tendard. over the entire

period. That Ie. the fact that I ltendard might be

reviled or .1lmlJuIled efter intervall of five yean.

_ aectloa 325(h)(1). wu not coDilderad by the

ModeL DOE believel It I. Dol po'llble to predict

wbat reIU1tauch five year revlewa might h.ve. md

therefore it would be too epecnI.live to model my

perl1cu1ar "'lulL

''This figure La denved from the fraction of the

Qu.ds of energy that go into generllion of

electnclty ",pre.entad by the Quads of energy

CODlUlJled by end-UMri I' ",fleeted in The Nltlonal

Energy Policy Plan. 00£/8-0008. luly 1981

(hereafter referred 10 81 "NEPP In."1

possible error, Is mean.ingful to the

model'. output and those inputs where it

Is not. See Economic Analysis

Document, Chapter 5. Moreover. there

are certain product-specific questions or

limitations In the ORNL model. These

are disCU4sed In the product-specific

analysis.

The savings attributable to standards

are Identified for each product in the

product-specific analysis. Generally, the

level ofsavings attributable to

standards Is lower than predicted In the

June 30 proposal. This Is the result of the

changes to the engineering analysis and

ORNL Model mentioned above and

1iescribed at length In the Engineering

Analysis Document and Economic

Analysis Document.

While no specific analyses have been

conducted In this area, DOE believes

that the changes that had the greatest

impact were probably the lowering of

possible standard levels In light of

comments received In the June 30

proposal and the use of the most recent

. energy price forecasts, i.e•• use of the

NEPP ill fuel price projections. The first

of these two changes makes the possible

standard levels more feasible.

Numerous comments were received with

respect to virtually every product

Indicating problems with the means by

which DOE derived the standard levels or problems that would be caused by the

standard levels. Changes to design

options or creation of new product

classes were often the appropriate

answers. but they reduced potential

.avings. In the absence of these

changes, while projected savings might

be higher. the costs and burdens of

possible standards would be much

greater.

The use In the ORNL Model of the

most recent data (e.g.. product

efficiencies, usage and market

penetration) and energy price

projections results In the model better

approxlDiating what would happen In

the marketplace In the absence of

standards. ThIs Is important because It

Is only In the last several years that the

efficiency of many products Increased

signJ..ficantly In terms of shipment

weighted efficiency.t See Economic

Analy.is Document, Table 3-12. Before

1973, the real price of energy generally

declined. Consequently, It Is not

surprising that manufacturers and

consumers did not focus great attention

on the energy efficiency of appliances.

The Increase In the cost of energy In the

'The ahlpmenl weightld efficiency Ill. product

equall the IUID of the energy flctor for each basic

model limes the volume of.hJpmenli for each

mod.1, all divided by the total IhJpmenta of the

product.

last ten years, however. has created

- substantial Incentives for manufacturers

to make. and consumers to buy. more

energy efficient appliances. These

incentives to a certain extent have been

restrained by regulation of the price of

oil and natural gas, which subsidized

consumption and discouraged

conservation. Nevertheless. many of the

covered products have shown

significant improvements In shipment

weighted energy efficiency in the last

eight years. In the years ahead.

moreover, with the deregulation of oil

and the .cheduled deregulation of most

natural gas in 1985. market forces are

expected to play an increasingly

dominant role In the pricing of all

energy. Therefore DOE expects that the

appliance market will respond swiftly in

the level of energy efficiency provided in

new appliances. In short. ifstandards

are not adopted. the appliance market

can be expected. over the period 1987-

2005, to increase the level of shipmen I·

weighted energy efficiency of the

average new appliance to levels

generally comparable to those thai

might be required by mandatory

standards. See Economic Analysis

Document, Table 3-12. Thus, we would

expect the energy savings attributable

to standards to be correspondingly

small.

By the year 2005, the ORNL Model

predicts that In the absence of standards

the average efficiency of new models of

six of the most energy consumptive

appliance. will improve 32 percent, on

the average, compared to 1978. With

standards, the average efficiency of the

same new appliances In 2005 will have

improved 37 percent. See Economic

Analysis Document, Table 3-12. 10Thus.

DOE predicts that with respect to these

products most of the improvement in

efficiency by the year 2005 possible with

standards would be achieved without

standards. During the period 1987-2005.

the ORNL'Model predicts that, in the

absence ofstandards, improvements in

appliance efficiencies will result In

savings of 27.8 Quads. compared with

what would have been used if appliance

efficiencies had been frozen at 1978

levels. lOll Ifstandards were adopted for

all the appliances suject to this

rulemaking, the ORNL Model predicts

savings during the same period of 32.8

"Th... ~nlase'lI1'8 derived by a simple

average of the ~ntagelmprovement.of each or

the produeta reflected in Table 3-12. These products

an: aU md gal furnace.. room air conditioners.

central el.r conditlonel'l, electnc and gal water

heatere. refrlgerator-freezerl. and freezers.

.. See Letter from J. Dexter Peach 10

Congreaaman RIchard 1. OtliDger. December 23.

1981. at EnciOlure I. p. 11.
 CAS-RM-78-110 COMMENT 09

14428 Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

quads. Thus. 84~ of the total possible

savings from potential appliance

efficiency improvementa 8l'8 projected

to occur in the bue ca.e. without

standards. Thi. mean. that only 16

percent of the po88ible savings would be

attributable to rtandards.

Since the projectiona of the ORNL

Mode1-<lr a.ny model forecutins energy

use over twmty years--ve to a

signifiCllDt degree un<:e:rtain. !!Ven this

relativelJ small energy ..'ring attribul.edto sta.nd8.l1k moat be viewed with lOme

skepticiam.

Some of the energy savings. \he ORNL

Model attributes to the sta.ndarda may

partially be the result of market

imperfections. 11 Such imperfections

could include the difficulty in obtaining

a.nd the complexity in understanding

information concerning the relative

efficiencies between models of

applianc.ea. the difficulty of comparison

shopping on a basi. other than initial

cost. and third party purchase of .ome

appliances. U How much of the

difference between the 1BvU1gs in the

no-standards and the standards cases

might be attributable to auch market

failure is unknown.

There is a tendency to assume that if

a sta.ndard were set at the point that

would produce the minlmll:m life cycle

cost (in the Economic Analysis

Document such a lta.ndard level is

denominated the."nominal level"), then

any difference between savings

achieved at such a standard level and a

no-sta.ndard level would have to be

attributable to market failure. There are

at least two major naW!l with such an

assumption. First. a unifonn. national

standard set at the national average life

cycle cost minimum may well constitute

a standard that for large numbers of

unon-average" persons is too efficient;

that is, a le.ss efficient model would

have a lower life cycli! cost to them.

Such a standard would be punitive for

such people. This concept is addressed

in more detail infra. but here it suffices

to note that the 18 percent additional

savings that the ORNL Model attributes

to standard8 I. likely partially at the

cost of IUch "non-flverage" perlOns.

Second, nen the national, average life

II Thil 1.._ tblIt tIw IUJIdudlI i:IDpa.d would

be the epliDloM llaJIdardfrola a We c:rde cae! new.

See irJfra.

.. Some applluCel are purchued and InIta1led

by the builder befo", a bome l.t fInllOld. nUll lc!nd

of third Jl'If17 pom:haa ill DOll.--0,f'88&l'ded .. market fllil_ linea c:ompclIlCta ofb_and

other__durablel .,.-ny dniped to

conlo... to _ ,...1_. HOwlmtr, lOUIe

evidence IUllllnta thet tile.- lhlnl Jl'If17 )NI'Ch.... !lave hiltoric:ally been aIower 10 Iftpond to

conlumer aware... and _I'Dkr bJsb- prien

for eneraY thaD wiMnI tIM pwdl.uc Ie actlIalIJ !be

penon who will pay the fuel blI.la.

cycle cost of a product as used in the

economic analysis is a projection. not a

demonstrable fact. There are many

assumptions, including usage rate•. fuel

prices. equipment prices. and the

appropriate diacowrt rates. The

88sumptiOlH made byDOE are its best

estimates and judgments, but if persons

In the marketplace have different

estimates and judgments, !!Ven in an

Inttrltive fashion. this does not mean

they are wrong and DOE is right.

thereby demonstrating market failure.

To the contrarr, they may wen be right.

or, perhap8 more likely, have a much

better appreciation of their particular

circumstancea md needs, such that the

additionalsninglt pnldicted by the

ORNL Model to be attributable to

standards might in pert reflect forcing

standards on penons whose free

choices would have been their most

economic choiee••

Whatever the degree of maritet failure

that may have been experienced in the

past with respect to these appliances,

however, DOE expects to diminish

greatly as a result of increased _

consumer lIW'IU'eneu and concern over

higher energy prices in combination

with the Federal Trade Commission's

(Fl'C's) appliance labeling program.

Neither FI'C nor DOE have evaluated

this program to determine its impact.

However, the FI'C expects to conduct a

study of the impacts on consumer

purchase decisions of labeling for

refrigerators and refrigerator-freezers

and clothes washers this year.

Moreover, a final rule for labels for·

central air-conditionen (including heat

pumps) has not yet been issued, but is

expected in 1982. DOE believes that this

program. together with higher energy

prices. will.ubstantially reduce any

imperfections in the appliance market.

There are indications. for example, that

home builders are conscious of the sales

advantages of a.n energy efficient home,

and such cooscioumess is likely to

mitigate third part)' eff:ects. Private

.ector groups (including trade

a.sociations, consumer groups, and the

media) could play an important role in

publicizing the labeling program and

actively dill8eminating facts concerning

the relative efficienci1!s of competing

appliances. especially those that are sold more frequently through

contracton. where comparison shopping

may be more difficult.

One example of the available

information concerning the relative

efficiencies of appliances is the.

publication of certification dinctories

by appliance manufacturer U80Cialiona.

At the present. directories are publiahed

by the Association of Home Appliance

Manufacturers (AHAM) for . refrigerators. fn!ezers. and room all'-

conditioners, and by the AirConditioning and Refrigeration institu~e

(ARl) for central air-eonditioners (usea

extensively by contractors and

installers). The Gas Appliance

Manufacturers Association (GAMA)

will soon begin publishing a directory

for gas and aU furnaces and gas and

electric water heaters. In addition. the

California Energy Commission publishes

directories for refrigerators and freezers.

room and central air-conditioners. and

water heaters. Increasingly.

manufacturers themselves are

advertising the efficiency of their

products.

The ORNL Model characterizes all of

the factors influencing the market

response to higher energy prices as an

implicit discount rate. Moreover, the

model i. programmed to decrease the

implicit discount rate (or market

imperfections) as energy prices rise. In

this way the model roughly simulates

.how the market operates. There is a

paucity of studies of changes in implicit

discount rates generally, and none

analyzing the effect of a combination of

higher energy prices and a public

education program over a number of

years. U How fast the implicit discount

rate decreases i. a matter of judgment in

the context of this analysis. DOE

believes that its method for decreasing

the implicit discount rate is reasonable

in Ught of all factora. Indeed. while the

ORNL Model is a respected computer

model and DOE has made a number of

improvements to it since the June 30

proposal. DOE believes that it is likely

that the market will respond more

quickly arid more completely to higher

energy prices a.nd increased consumer

awareness than the model projects,

because the model was not specifically

programmed to take account of the

FTC's labeling program or innovative

private sector activities, some of which

are already underway. Consequently.

DOE believes that there is a significant

probability that the energy savmgs

attributable to standards would be less

than those projected by the ORm

Model.

An example of increased incentives

for efficiency resulting from market

forces is the offer by several utilities to

provide cash rebates to consumers (and,

in one case. to contractors) who install

appliances meeting specified minimum

"'The IIIOSl clOft!y relmd atudy, one examinin8

Invellmenta In thermal Integrity for new homel.

Involved circumltuce. sufficiently dillimilar to

reDdet' Ita resultl Inconc:lulive In the eppliance

context. SH gerreraJly Economic AnalYlil

Document et I 5.3.%.a.
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday, April 2. 1982 I Proposed Rules

- 14429

levels of energy efficiency. For instance.

the Dallas Power and Light Company

(like other subsidiaries of the Texas

Utilities Company) offers such rebates

to consumers for replacement and new

construction installations of efficient airconditioners; Northern States Power

Company in Minneapolis offers similar

rebates for refrigerators. freezers, room and central air-conditioners, and water

heaters; and Florida Power Corporation

offers rebates to consumers and bonuses

to contractors and dealers for

replacement of air-conditioners with

more efficient units. These actions allow

the utilities to gain more control over

energy demand duri.ng periods of peak

use. thus reducing the need for

construction of new generating capacity;

they also allow consumers to reap the

benefits oflower energy costs without

paying the full increase in the first cost

of more efficient appliances.

2. SignIficance ofSavings. Under

section 325(b) ofEPCA. as amended.

DOE is prohibited from adopting Ii

standard for a product if that standard

would not result in "significant" energy

savings. The statute. however, does not

define the term "significant." Such a

term is not readily susceptible to precise

definition, and DOE believes that

Congress used such a term with the

intent that DOE would. in the exercise

of its informed judgment, determine

what level of savings is significant and

under what circumstance••

In exercising i~ judgment, DOE is

proposing to consider the significance of

energy savings in three different

·contexts. using three different measures.

They are: whether savings of oil and gas are large enough to decrease

meaningfully this Nation's reliance on

foreign sources of energy; whether

savings of electricity are large enough

either to reduce significantly new

generation requirements or to affect

significantly the environment: and.

whether a standard would result in a

product using 20 percent less energy

than it would absent a standard. 1£ the

savings attributable to a standard are

significant under anyone of these tests.

DOE is proposing to deem the savings

significant under section 325(b).14

HID lbe faDe 30 p.ropoN1 DOE prvpoaed thai

lUIDw.i:. enerv NviJI&a for a product of 0.ll02867

Quacla. or 0.ll64 Quade over Dlneteen yean. would

be deemed IlgnlficanL TbJI epecifIc BTU Nvtngl ...al inlended to repreeeni a 20 percenl laVinp of

the miDlmum _011111 of Ille merv a product mUll

use before It can be col1lldered for lteadarda under

oection 325(a)(2). Commf!l1lefll\l8Psled that thls

level of Hvtnge wal 100 low 10 be deemed

IlgnlficanL DOE qreee. Such a Ieve1 of Hvinp Is

A. Oi} and Gas Savings. The first measure for determining significance is

the amount of oU and natural gas that

would be saved as a result of a standard. DOE believes it is appropriate

to focus on savings of these fuels

because Congress in enacting NECPA.

which amended EPCA to create the

existing appliance program, focused on

these fuels. The findings enumerated in

NECPA are instructive:

(a) FlNDINCS.-The Congress finds

that-

(1) The United State. faces an energy

shortage arising from Increaaing demand for

energy, particularly for oil and natural gas,

and Insufficient domestic supplies of oil and

natural gal to satilfy that demand;

(2) Unless effective measures are promptly

taken by the Federel Government and other

Ulers of energy to reduce the rate of growth

cl demand for energy, the United States will

become Increasingly dependent on the world

oil market. Increasingly vulnereble to

Interruptiona of foreign oil supplies, and

unable to provide the energy 10 meel future

needs: and .

(3) All sectors of our Nation's economy

mUit begin immediately to significantly

reduce the demand for nonrenewable energy resource. such u oil and oa tura.l gas by .

Implementing and maintaining effective

C011IervatioD measure. for the efficient Ule of

these and other energy .ources.

B8sed upon this language. DOE

believes a level of conservation of oU or

g8S would be significant ifit made a

significant contribution to reducing this

Nation's energy dependence on foreign

Dations. DOE is tentatively proposing to

establish 10.000 barrels-peMay as the

oU (or gas) savings that would be

deemed significant if a standard for a

particular product would result in such

savings. but requests comments from the

public OD whether a different figure is

appropriate. and Ifso. what it should be.

This tentative figure is a rough

approximation of the per-product oU

savings estimated by the Administration

that proposed the NECPA amendments

to EPCA that would result from

adoption of standards. 11 Such a figure

for each standard would over all

thirteen standards also result in

program-wide savings of oU that would

be in the same range as other major

programs proposed by the

Adminiatration that proposed the

10 -U.a to be nOl1-lue.urable in national

rsporta. Moreover. tbia _ounl ill Ie.. thlUl 20

peJ'CllD1 of the lite enerv eavinga th.1 would have

been achieved in a COIIHrvalion contingeDC)' plan

rsfacted by bothh_of CoI18J'UI because II

Hved an 1naipifIClUII _00111 of energy. See infra.

"'The Ill. eaVinp projected wers of the l8Dte

IDqIlilude.

mandatory appliance standards. is A

figure smaller than this would mean

savings so small as to be difficult to

discern in national reports. for 10.000

barrels-per-day is already less than 1('0

of 1 percent of national oil use and less

than 0/10 of 1 percent of petroleum

imports.

Support for this general range of

savings of oil as being "significant" can

be found in the history of Congress'

rejection of an energy conservation

contingency plan for advertising lighting

restrictions. That plan was estimated to

be able to save only approximately 4.400

barrels of oU per day as a result of

reduced electricity usage. See S. Rep.

No. 9&-98, 96th Cong.• 1st Sess. 10-11.

(1979); H.R. Rep. No. 96-122. 96th Cong..

1st Sess. 4 (1979). This amount of

savings was considered by DOE to be

small, with little impact on the Nation or

on electric utilities. The principal value

of the plan was deemed to be its

promotion of public awareness. [d. Both

the Senate Committee on Energy and

Natural Resources and the House

Committee on Interstate and Foreign

Commerce reported unfavorably on the

plan because of its fallure to provide for

significant savings, and the plan was

never approved. Several commenters.

objecting to the BTU level of savings

DOE proposed to deem significant in the

June 30 proposal. suggested use of this

4.400 barrel-per-day level. DOE believes

that this history is instructive in

demonstrating that DOE and the

Congress deemed 4,400 barrels-per-day

insignificant. However. nothing in the

record suggests that 8avings should be

considered significant merely because

they exceed 4.400 barrels-per-day.

OU and ga8 are used directly to power

certain covered products or classes of

products and are used indirectly. to a

greater or lesser degree, through the

generation of electricity, as an energy

SGurce for most of the products under

consideration in this rulemaking. The

following table illustrates the current

direct and indirect oU and gas usage for

each of the products subject to this

rulemaldng and each product's

percentage of the Nation's total oil or gas usage.

..Prelidenl Carter'1 proposed Mandatory

Weekend Clo'1n&1 of gasoUne ltalionl wal

IItlmated to be able to lave 120.000-270.000 barrelsper-der. enlorcemllllt of the 55 mph speed limtt was

eaJd to be able to Hve ZllO.ooo barrsle-per-dar. snd

Praeldenl Carter', oU Import fee 10 reduce ga,olme

consumptiOll, oyertumed. both by the courts and

Congress. waa lupposed to .ave 100.llQO.-Z!iO.000

barrels.per-day.
 CAS-RM-78-110 COMMENT 09

14430 Federal RePter I VoL 1fJ, No. 64 / Friday, April Z. 1982 I Proposed Rules

11180 01\,. AHO GAS USIIOE

t~"lltul

0i1lCt -.ct' "--<JI1IllIIl

~' .-0-'

01 .. 01 eo. 01 Get

c.nnI...-__ 1.82 .. .14 41 14.4

--- .20 ..J4 .If .- .. .u Nt_

Room --- .08 ,O!.I .3

.ac ZI .. 1.1 w__

.12 .85 .22 .1' ..a 5.3 .18 .17 ..5 .8

"-. .IR .08 .2 .3

Rarooe .31 .08 .08 2 2.0 c:a.er... ..,.. .07 .07 .08 2 .1

T_ 2.14 4.51 1211 1.05 ..1 2...

an extraordinary level in order to save

the requiaite oil gas.or eLectricity.

Another way to measure the

significance of ellergy savings

attriblltabw! to a standard for a given

product over • period of time is in

relatiOD to the energy that would have

peeD used by that product in the

abnDce of a ItanOard over that period

of time. Thus. if a &tandard for a

particular product resulted in a

s:ignifk:a:nt amount of energy being

saved in relation to what would have

been _ed by that product in the

absence of the standard, the standard

could be deemed to have resulted in a

significant conservation of energy. Such

a measurement of significance would

not be biased in favor of the products

that are the relatively la.rge energy

users. because the energy savings

attributable to a standard for the

product would be roeaured only against

the energy that otherwise would have

been ueed by that product.

Because the other measurements of

sigDificance are biased in favor of large

energy users. this measurement would

moet likely result in a determination of

significance with respect to a standard

for a small energy user. Consequently.

DOE beDeyes it is appropriate to

establish a level of significance at a

percentage level that would be

meaningful even if the product used

relatively smaQ amounts of energy. DOE

is proposing, tbenfore. that the energy

saved as a result of a standard, 81

meuured by the OR.""lL Model. be 20

percent of the energy that would be used

by the product in the no-standard base

caJe in order for the savi.ngs to be

deemed significant.

DOE finds support for a 20 percent

level in the fonner section 325 of the

Act. Prior of the NECPA amendments.

section 325 required voluntary energy

efficiency targets for ten products that

would. if followed. result in an aggregate

increase in energy efficiency of 20

perceot. Only if one of these targets

were not met would DOE be required to

establish an efficiency standard for the

product. The 20 percent increase in

eneTBY efficiency is not the same as a 20

percent energy savings as a result of a

standard. and the legislative history of

the present section 325 does not discuss

any relationship between this prior

prorision's use of 20 percent and the

present section's use of the term

"significant" conservation of energy.

Nevertheless, DOE believes that .

Congres.'s use of a ZO percent level as a

minumim level in relation to standards

suggest that such a percentage level of

savings is a reasonable basis for

deeming a level of conservation

l!IecIrIc """-t ...,......,. _in "'-

- ~. .---

R.-. Cenni__ol:>- '-'-. cue 3.8 I.. U Nt~ ua 1.5

Nt CcIoodibw -'nl 1.041 53 w_~ 1.- 5.4

\.\1 4.7

~~ 0A4 1.1

Ct..54 2.1

Ooawa.r,. .... ,..

new generatinS capacity. whidl at the

utility level fs dfstinguishabiefrom other

factors.

The table be.low shows electricity use

for each of the products subject to thia

rulemaking and its percentage of

natioaal electric:ity 1LS8ge.

1980 Eu:c'n1lClTY lJMGE

- In each prodact-speciflc anl!Jysia, the

electridty sninp are identified and

. discussed.

C. 20 Percent Sarings. The above

meaS'lIreS ofthe significance of

particular enetgy savings related the

sa:rings to their impact at the national

level. This is probably the most na:tu1'al

meaauremeat of the significance of a

proposed or p01S'ibIe national program.

becasue, if the program is national in

scope and chUllcter. its impact would

nonnaDy be judged by its effect on the

Nation. Nevertheless. such a

measurement is not the oaly possible

test of significance. Moreover, such a

measurement has a built-in bias toward

products that use a great deal of energy

in the first 1rIataDce. That is, a relatively

small improvement in energy efficiency

attributable to a lJtandard in a product

that uses a great deal of energy could

meet the above testa of significance.

while a product that uses relatively little

energy (e.g., clothes dryers) would have

to show an improvement in efficiency of

Each product-specific anl!lysls

identifies the direct and ind:i:rect oil and

gn savings and assesae1l their

significance.

B. Eleclricfty Savfrws. The

sigriificance of energy savings, however.

probsbly should not be meuured solely

in terms of .avings of oil and gu. or

even :aon-reuewable fuel..

notwitkatanding the t':iDdmgI of NECPA.

There are positive soda! benefits from

saviDg electricity, besides savi.ng oil and

gas. Por example, saviDs electricity can

redw:e both enviromnental problema

aDd the need for additional generatin3

capacity. thereby freeing scarce capital

for other productive usee. Therefore,

DOE believe1l that. "significanf'

conservation of eDeliY would include

electricity AvingI that would have a

significant impact 011 the avironment Ol"

significantly reduce tDe aeed for

additional generatiDg capacity.

DOE cannot identify a specific

nwnber of kilowatia or Quads of savings

that would have sua impacts.

Nevertheless. in ita Environmental

Assessment of the June 30 proposal

DOE concluded that the standards

proposed there, taken together. would

not have a significant effect on the

environment. Because the standards

proposed in the June 30 proposal were

predicted to create greater energy

savings than the standards analyzed in

this proposal DOE believes that no

single standard considered in tcx:lay's

proposal could have a significant effect

on the environment. That environmental

.saessIll'8lrt did not specifically address

the tasUII ofthe effect of standa.rda on

DeW generating capacity. BecaUM the

rvlative Deed for DeW capacity di.ffera

substantiany among different regions of

the Nation. DOE beIleves a national

savmgs of electricity would at Jeaat . have to exceed 1 percent of national

usage over the period of analysis in

order to have an effect on the need for
 CAS-RM-78-110 COMMENT 09

Federal R.egister I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules 14431

significant and thereby meeting the

present Section 325" criterion.

D. Economic fUlltificatiotL Section

325(b} abo in effect prohibita an

appli8J1ce effidenc:y standard, 11 that

standard is not economically ju.tified.

Sectioo 32S{d} .tates that a standard can

be economically jutified only if OOE

determines that the benefit. of the

standard. exceed its burdens. In other

worda, rnn if a standard Baved

"significant" amounts of energy, if the

benefits of that standard did not

outweigh ill burden.. the ltandard

would not be "economically jUltified."

In determiJiing whether a particular

standard's benefits exceed the burdens,

to the greatest extent practicable DOE is

to weigh six specific factors as well as

any other factors DOE deems

appropriate. See section 325{d)(1H7).

These factors are separately addresaed

below.

Certain of these factors can be

quantified, albeit through projections

and computer models; others are not

quantifiable. Congress recognized this

and indicated iliat greater weight should

not be given to a factor merely because

it was. quantifiable. See H.R. Rep. No.

95-1751, 95th Cong.. %d Sess. 116 (1978).

1. Economic Impact on Manufacturers

and Consumers (Sec. 325{d)(l»). The

engineering analysis identified

improvements in efficiency and the

associated costs for each class of

product to large and medium-sized

manufacturers. These cOlts would

constitute the increased per unit cost to

manufacturers to achieve energy

efficiency levels equivalent to those

achieved in the design options.

Consumer prices will increase further as

a result of mark-ups in the distribution

chain. The average price of current

models in the class is derived from

.industry data. as shown in the

Engineering Analysis Document. These

costs are identified in the productspecific discussion. These increased

costs to manIacturers and consumers,

however. cannot be said necessanly to

be the result of standards. That is. to the

extentthat manufacturers choose

voluntarily to make appliance efficiency

improvements, their costs and the

purchase cOlts to consumers would

increase by roughly the same amoant as

they would if the same improvements

were made 8S a result of standards

(except for that portion of the cost that

is attributable to the certification and

enforcement expense. unique to

standards. see Engiaeering Analysis

Document at C-7).

To assess certain other impaction

manufacturers that would result from

standards, DOE used a computer model

that simulated hypothetical firma in the

appliance industry to determine the

effects of .tandard. on different-sized

firm.L This model. the F'mancial Impacts

Model (FIM), it fully explained in the

Economic Analysi. Document. See

espedally Appendix A. In general. the

FIM compared the projected finandal

records of prototypical £inns of different

sizet over a twelve year period-l980-

1991-under a !)ase case and two

standana easet (levels 2 and 3). The

FlM then provides four outputs: the

increased risk to a prototYPical firm of

not making a profit in the manufacture

and sale of a given product subject to a

given .tandard compared to the "base

case," and the· relative profitability,

debt!equity and "quick" 11 ratios of

prototypical firma in the "base case"

and with standards. l'See § 4.5,

Economic Analysis Document. The

product-spedfic analysis identifies these

outputs for prototypical small. medium.

and large firma making that product.

With respect to increased business

risk, the F1M projects an increased

business risk to small or medium firms

for all products analyzed (except

furnaces) at almost all standards levels

analyzed. See Economic Analysis

Document. Table 4-28. 11 Similarly, the

"The quick ratio Ia a mea.ure of a firm', ability

to with.tand .hort·tenn downtuma in bu.inesa

activity. AIao called the acid tett ratio. it ill defined

aa:

Qui.L Ra ' ClImmt Aaaet.-hmmlary .... tiel - Can'ant Liabilities

IIFor the period analyzed IlI1der the base cue. level. of inve.tment by the lInD lU'll derivecl from

biatorical iJml.tmellt Ienli. Under the two

ltandarda ca_. the ba.. case level. of inwatment

lU'll ill_ted by the amount of InvntmeDt

neC8&Ml'Y topraduce the product to the required

efficiency level (u lJldIcated in the engineerintl

analy.la). ThIs methodology would accurately

meUtlft the Impectl anociated with those

inveltment and efficieDcy levela If the awmfactunlr

had,not already made inveltmenlll in energy

efficiency Improvemenlll by that time. If the

manufac1Ul'er had made .ome of the nece••ary

inve.tmellta to Improve appliance efficiency a. part

of bia hi.toricallevel of investment, however. to add

tha full amount indicated in the ens:inall1'in8 lUlaly.1a

would be InaCCW1lte. becau.e .ome of that

neces.ary investment W'OllId already ha" been

mad..Beca_ the ORNL Model predict.a that

appliance eCfIcieDcy lmprovementa will be _de by

the marbt without atandarda IUld that lOme

Improvemenlll relative to WI will ba made by tha

ume .tandarda would be Imposed. It Ie realOl18ble

to axpect that ID&IIJ. If DOt most, firma will beve

made atleut __ iDnatmenlII in appliance

efficieacy lmpronmeal. prior 10 the time any

.tandard would be Imposed. ThUll. tha financial

Impact of a standard would be Inl for the•• firma

thea for the firm that had made DO such iD""atment,

III the product·apeciflc dlacualon. DOE ..limates.

00 the buIa althe increaM iD efficiency of the

pfoduct between 1978 and 1987. the order of

ma\lDitude by which the Impaeta predicted by the

FIM may be ove...tata<l for the a..raga Jirm. ttDOE llODdllcta<l a aenailivlty analysl. of the risk

analy. uf the FIM to determlnAi: how chansiD3

certain variabl.a would affect the outpuL It was

determined that changing the level of producta

ahlpped bad a lllbatantialimpact on the moder.

level of profitability for small and

medium firma diminishes for all

products analyud at almost all

standard levels analyzed. /d., Table 4-

%9. Generally. the debt/equity ratio of

firms deteriorates; in two instances the

level of debt becomes greater than the

value of all anets. rendering the net

worth negative.-/d.. Table 4-030.

Generally, aD firms become less liquid

with standards. /d.. Table 4-31. The

conclusion suggested by these data is

that .tandards generally would have a

negative impact on the financial health

of appliance firm.. with specific and

significant harm suffered by small- or

medium-sized firma making certain

appliances. These impacts are

addressed in the product-specific

discussion where applicable. DOE

believes that the combination of

increased business risk, reduced

profitability. and the need for greater

investment to comply with standards

increases the likelihood that small and

medium firms would leave the particular

appliance market through withdrawal or

failure. or would merge with another

firm in the appliance industry. DOE

believes that the withdrawal or failure

of large firms" because of their greater

finandal strength generally and their

diversification. would be much less

dependent on the existence of

standards.

For consumers, another measure of

economic impact is the life cycle cost of

a product. because it takes account of

both the increased first cost, any

increased maintenance costs. and the

reduced fuel costs resulting from the

product's greater efficiency, Under

section 325, such an analysis is a

separate factor. see infra.

While the above are the quantifiable

impacts of standards. which are

identified in each product-specific

analysis, there are a number of less

quantifiable impacts (not addressed in

any of the computer models) on both

manufacturers and consumers resulting

from increased manufacturing costs and

purchase prices. For manufacturers. for

example. any money spent on energy

efficiency improvements to appliances is

money not invested in ot.~er areas. Thus.

to the extent that expenditures by

manufacturers on energy efficiency

improvements to appliances are dictated

by standards rather than economics.

more appropriate investments may be

output of increased rI.k. Because of the Importance

of thia variable and lllllmpact on the reawts. where

appropriate. It ia addre.sed in the product specific

analy.1.t.

-The two instances occur atleyel 3 for lW!dium-

·.I:e manufacturel'll of r~rrigeralDr·free%"1'lland

.mall manufacture" of freezeMl_
 CAS-RM-78-110 COMMENT 09

14432 Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

foregone. DOE believes that this could

result in reduced productivity. reduced

energy efficiency in the manufacturing

sector. or the forgoing of possible new

utility or performance features in a

product.Jhis is nothing more than a

result of the inherent diseconomies of

governmental regulatory interference in

the marketplace, for a regulation of

general applicabillty-even if crafted to

m.inim.i.Ze unnecessary costenecessarily cannot.take account of all

particular clrcumstances. DOE solicits

comments on this subject. especially

from potentially affected manufacturen.

Increased first costs to consumen

resulting from standards can affect

different consumen in different ways.

The various computer models utilized by

DOE do not distinguish between

different consumer purchasing patterns.

Rather. they assume an average

consumer. DOE believes, and several

commenton on the June 30 proposal

stated. that for lower income consumen

increases in first costs for a particular

product can have the effect of

precluding the purchase of a new model

of that product. Aa a result, some

consumen may retain products past

their useful life or purchase older used

appliances. These older products are

generally less efficient than newer

models to begin with. and DOE believes

that for some appliances initial

efficiencies are likely to deteriorate if

they are retained beyond their useful

life. Thus, these consumen might,

because of standards. be forced to live

with less efficient products and thus use

. more energy. However, if no standards

were adopted. consumen of all income

levels would be able to choose from a

range of products with varying energy

efficiencies and prices, and it would be

possible for a lower income penon to

purchase a new product with a higher

efficiency than the model It was

replacing. albeit at an efficiency less

than would be required under standards.

but also at a purchase price less than .:

would be available under standards.

DOE believes that this Impact of

standards on lower income penons is

Important even if the number of such

penons disadvantaged is relatively

small compared to the total number of

penons affected by standards. This is so

because lower income penons are the

least able to endure economic

disadvantage resulting from

governmental regulatory action.

2. Life Cycle Cost andNet Present

Value (Sec. 325{d)(2)). The lite cycle COlt

(LCC) analysis, see Economic Analysis

Docum"ent, calculates the total cost of

ownenhip for consumen for each class

of product. Comparil~n of the life-qcle

cost of 1978 baseline models with

models at each of the standards levels

analyzed allows DOE to determine the

changes in total COlt of ownenhip.

If the life cycle cost at a particular

standard level is greater than the life

cycle cost of the 1978 model, this

demonstrates that it is not economically

beneficial for the average consumer to

purchase a product built to the analyzed

standard level compared to current

"average" models. That is, the increased

first costs of obtaining a particular

efficiency are not offset by fuel savings

over the life of the product.

DOE has placed substantial weight on

the failure of a possible standard to

achieve an Improved life cycle cost.

Moreover. if a particular standard level,

while s~owing a decreased life cycle

cost from the 1978 shipment weighted

efficiency. would have the effect of

banning from the market an existing

product with a lower life cycle cost.

DOE also considen this a substantial

burden. In both cases, the effects of

selecting that particular standard level

would be to penalize consumers, by

requiring them to pay greater life cycle

costs than necessary and to take actions

that would be contrary to their own selfinterest.

The life cycle cost analysis, therefore,

is useful in identifying those energy

efficiency levels that correspond to life

cycle cost minima, see especially

Economic Analysis Document.

Appendix G, for it is at these levels of

energy efficiency that the average

consumer's economic benefits are

.maximized and his burdens minimized.

Moreover, where these LeC minima do

not correspond to the moat energy

efficient level, the more energy efficient

level (with higher life cycle costs)·

generally saves only very marginal

incn!,ased amounts of energy.

While the life cycle cost analysis

indicate. for moat products at most

standard levels a decrease in life cycle

costs compared to those of 1978

ahipmenta. this decrease should not be

totally attributed to the adoption of

standards. In the previous section it was

noted that increased first costs to

manufacturers and consumers resulting

from appliance efficiency Improvements

could not neceuarily be attributed to

the effect ofstandards, because marketinduced efficiency Improvements would

result in similar per-unit first cost

increases. So also here, market-induced

efficiency Improvements between 1978

and 1987 will result in similar decreases

in life cycle costs. Data provided in

Appendix G of the Economic Analysis .

Document leads DOE to believe that the

decreases in life cycle costs identified

for the appliances at issue here,

determined by comparing cert.ain levels

of efficiency to actual 1978 average

efficiencies. would largely be enjoyed

even in the absence of standards. as a

result of market improvements in

appliance efficiency. In other words. the

life cycle cost analysis conducted by

DOE merely compared the relative life

cycle costs of products at different

levels of efficiencies; DOE did not

compare, predict, or project differences

in life cycle costs of products under

standards as opposed to a base case

without standards.

In order to assess the differential

economic impacts on consumers that

would occur generally from the adoption

of standards, compared to a base case

with no standards but with marketinduced efficiency Improvements, DOE

conducted a net present value (NPY)

analysis. see Economic Analysis

Document. § 4.2. The ORNL Model

calculates the total cost for each product

(discounted total value of energy

consumption from 1987 through the last

year of use for those products purchased

through the year 2005. plus the total

discounted equipment costs for

equipment purchased from 1987 through

20(5) with and without standards. The

difference between these two is the NPV

attributable to standards. A positive

NPV for a product at a given standard

level indicates that, if that standard

were adopted. consumen of that

product as a whole would save that

much more money in fuel costs,

discounted to the present, than they

would pay in increased first cost for

more efficient products, discounted to

the present, compared to the situation

where no standard ia adopted. 11 A

positive NPV does not mean that the

economy as whole benefits (as opposed

to consumers of that product). The NPV

analysis only compares consumer fuel

cost savings against increases in

product prices to consumers. For

example, the government costs in

maintaining and enforcing a particular

product standard are not subtracted

from the net present value. The NPV

analysis is similar to the LCC analysis,

and the greatest NPV generally should

occur at the standard level set at the

LeC minimum for the product.:: The

NPV for each product at the different

a All NPV'. In the 1ID41yt1. ovel'ltale the benefit

of .tandardt to tome detlree beceule the bate cate

anaJyti. did Dot tubtrac:t lIW1ufao:turer compliance

COItJ, I.g., certlftc:atloa and te.q from the bue cate produc:t pric:et. Thia oventatlmeat. however. Is

minor.

a Becauet the NPV anaIytl. Is done using the

ORNL Model and the LCC anaIytls it done through

IIlI own model. thla dlreo:t com!latioa may nol exitt

betweea the two modale' data.
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules 14433

standard levels is identified in the

product-specific analysis.

Several commenters on the lune 30

proposal identified a potential problem

in the use of averages. such as average

usage rates and average fuel prices. to

determine life cycle costs and net

present values. The life cycle cost

analysis was used to determine life

cy~e cost minima. which for the

"average" consumer should be the

optimal efficiency leveL Where a

consumer is not average. however. that

level is not necessarily optimal. If the

consumer has higher than average fuel

prices or higher than average usage

rates, there may be a more optimal

efficiency level for that consumer. but

the consumer is not penalized because

the market is able to provide such a

model. If. however. the consumer has

lower than average fuel prices or lower

than average usage rates; the consumer

may be penalized by having to purchase

a product whose efficiency level was

required by a Federal standard that

assumed higher prices or higher usage

than is truefor that consumer.

Because of these comments. and

especially those of the Regulatory

Analysis Review Group (RARG) of the

former Administration. which

questioned the premise of setting

standards at the average consumer's

LCC minimum. DOE undertook several

sensitivity studies of the LeC analysis to

determine whether the potential.

theoretical problem. mentioned above.

in fact. would occur ifstandards at LeC

minima were adopted. With the

exception of certain classes of central

and room air conditioners. the

sensitivity analysis indicated that

generally the level of efficiency that had

the lowest LeC for the average

consumer was the LCC minimum for a

consumer with less than average usage

or fuel prices. See Economi<: Analysis

Document. I 5.4. The sensitivity

analysis. however. i. subject to several

Umitationa. First. It only considered

reductions of leu than 5 percent from

the average fuel price. This is a critical

limitation, because some States' average

electricity prices are as much as 80

percent less than the national average

electricity price. Second, the reductions

in usage measured were only those that

would be normally expected, not

extreme reductions that still might be

representative ofsome people. Third,

the sensitivity ana1yBis did not test any

combination of below aver. usage

and below average fuel prices.. Fourth, it

did not COIlIider the effect of reduced

usage for a number of products (dryers,

freezers, and ranges and ovena). some of

which may be more sensitive to

reductions in llsage. Nevertheless. while

the LeC sensitivity analysis cannot rule

out the problems or burdens identified

by commenters and the RARG. with the

exception of air conditioners It suggests

that only in the more extreme cases

might persons suffer those burdens.

DOE requests that interested persons

comment on the LCC analysis and

sensitivity study.

3. Energy Savings (Sec. 32S(d)(3)).

While the significant conservation of

energy is a separate statutory

requirement for imposing an energy

efficiency standard, the total projected

savings directly resulting from

standards is also one factor to be

considered in weighing the burdens and

benefits under section 3Z5(d). The ORNL

Model results. discussed above. were

uti.l.ized for this factor. In each productspecific analysis the savings are

specified.

4. Lessening 01 Utility or Performance

01Products (Sec. 32S(d)(4)). This factor

cannot be quantified. In establishing

classes of products and design options.

DOE attempted to eliminate any

degradation of utility or performance in

existing covered products. That is. to the

extent that comments or our own

research indicated that a product

included a utility or performance-related

feature that affected energy efficiency. a

class was created for the product with a

lower standard. In this way DOE

attempted to minimi2:e the impact of this

factor as a result of the standards

analY'Z!!d DOE solicits comments on whether its attempts have been

successful.

However. even were DOE able to

eliminata any lessening of utility or

performance In existing products as a

result of .tandards, DOE believes it is

not possible to eliminate all impacts of

standards that might lessen the utility or

performance of future products. This is

true for two reasons. First, as indicated

above with respect to impacts on

manufacturers. DOE believes that the

effect of requiring investments on the

basis of regulations rather than

fundamental business considerations

may result in manufacturers forgoing

some investments that would have been

made in the absence of the regulatory

requirements. These investments might

be in improvementa in utility or

performance of a product.

Second, while separate classes of

products have been established for this

rulemakins in light of their different

performance features. there is no

specific mechanism in the statute for

recognizing new performance features

after a final rule is adopted. That is.

were a final rule adopted with specific

standards for different classes of

products. it would have the effect of

freezing those classes in the regulation.

A manufacturer would be prohibited

from distributing in commerce any

covered product with a new

performance feature. if that feature

would have the effect of reducing the

product's energy efficiency below the

standard level as measured by an

applicable DOE test procedure, unless

and until the rule were amended to

create a new class or a new standard in

light of such a new performance feature.

The delay and uncertainty associated

with this process could create a

disincentive to manufacturers from

developing the feature in the first

instance.

While this possible disincentive to the

development of more energy intensive

performance features canriot be

quantified. it could create a risk that

some performance features that might

otherwise be developed would not be.

Given the importance of many past

performance features that reduce the

energy efficiency of a product. such as

self·cleaning ovens and automatic

defrosting refrigerator-freezers. which. if

standards had been imposed before

their development. may have resulted in

the new product failing the standard.

DOE believes that any risk created by

such a disincentive constitutes a burden

to be considered in weighing the

burdens and benefits of possible

standards. DOE requests comments on

this issue.

5. Impact ofLessening Competition

(Sec. 32S(d)(5)). Under Section 325, the

determination of the impact of lessened

competition likely to result from

standards is to be made in writing by

the Attorney General. In order to

provide sufficient information to the

Attorney General that he may make

such a determination. DOE conducted a

study of the affected appliance industry

to determine its existing concentration.

level of competitiveness. and financial

performance. See § 3.4. Economic

Analysis Document.

Moreover. the FIM was discussed

above as providing information

concerning certain impacts of standards

on manufacturers. While the FIM does

not relate directly to competition. its

suggested Impacts of standards can be

used to aid in the assessment of whether

standards will lessen competition in the

appliance Industry.

DOE has requsted that the Justice

Department review the economic

analysis and determine the impact of

standards on competition.

6. Need ofthe Nation to Conserve

Energy (Sec. 325(d)(6)). Although the
 CAS-RM-78-110 COMMENT 09

14434

I

Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

Nation's need to conserve energy must

be balanced against other factors to

determine the net burdens or benefits of

an efficiency standard. Congress did not

define what the Nation's need to

conserve energy was.

The statute itself, however, provides

clear evidence that Congress did not

consider the need to save energy to be

absolute. F'U'St. in defining'''energy use."

aection 321(a)(4) measures the quantity

of energy consumed at the point of use,

- thereby avoiding the calculation of

inefficiencies of generating and

transmitting electricity. The effect of this

definition is to forgo any appliance

standard that would be based on the

source energy efficiency of the

appliance. Thus, under the appliance

program, an electric furnace is more

efficient than an oil furnace. even

though the electric furnace required

more BTUs to generate its electricity

than are used by the oil furnace's oil,

effectively limiting the possible energy

savings that might be achievable.

Second, section 325(f) authoriZes DOE to

establish higher or lower standards for

classes of product in the same product

type-that use different sources of energy.

Thus, for example, DOE could set a

lower standard for oil furnaces than

electic furnaces, again effectively

limiting possible energy savings. Third,

section 325(f) also authorizes DOE to

establish higher or lower standards for

different classes of product in the same

product type if they have different utility

or performance-related features. Thus.

an automatic-defrost refrigeratorfreezer, which inherently uses more

-energy than a manually defrosting

refrigerator-freezer, can have a lower

standard; or a larger capacity

refrigerator-freezer could have a

different standard than a smaller

capacity refrigerator-freezer. Because

each of these effects of the law reduces

the potential savings that could be

obtained from standards. each

recognizes that saving energy must be

balanced with other considerations. By

including these provisions, Congress

recognized that a standard that might

save the greatest amount of energy

could effectively ban appliances using

certain types of fuel (because of their

relative inefficiency compared to the

same product using a different source of

energy) or having useful performance

features. The statute is clear, DOE

believes, in providing that such a result

should not be the consequence of

standards. These provisions indicate

that the statute itself recognizes that the

importance ofsaving energy is relative.

not absolute.

As discussed in a previous section,

NECPA's findings and purposes singled

out oil and gas as the two energy sources of particular concern and for

which the greatest need to save could be

inferred. Yet. since the passage of

NECPA. this Nation'. Imports of crude

oil have declined over zo percent.u

To the extent that a source of energy

other than oil and gas is involved, DOE

believes the relative need to conserve

energy is less. Electrical ~eneration

capacity is generally adeql1at!l- After a

number of years of large growth in new demand, the industry is now seeing new

demand increase at only 1 percent per

year. Problems with the supply of

electricity at the present time and for the

foreseeable future are localized in

nature. depending on specific

circumstances. Such problems are

generally better dealt with in light of the

specific circumstances, not by means of

a Federal. nationwide solution.

The above discussion is not intended

to indicate that DOE does not value

highly the benefits of conservation in the

use of all energy. Rather, it is intended

merely to recognize that the degree of

the Nation's need to save energy

depends on the fuel involved and can change over time. To the extent that the

market and government initiatives to

remove regulatory disincentives to

conservation and energy production

result in a healthier national energy

situation, the need for additional.

Federally-mandated conservation of

energy is decreased. Because of the

across-tha-board Improvements in the

na tional energy picture of the past few

years and its projected continuation into

the future "-without regard to the

appliance program-the need of the

Nation to conserve marginal increased

amounts of energy through a particular

appliance efficiency standard is

diminished. The ORNL Model's

predictions of energy usage with and

without standards Illustrate this

situation. As noted earlier, compared to

1978 appliance energy usage, DOE

believes that efficiency Improvements as

a result of market activity would

account for 84 percent of the total

possible energy savings that would

occur in the time period if all standards

were adopted. Only the marginal 16

percent would be attributable to

standards. and it is only the need for

this marginal 16 percent that could be

uaed in calculating the economic

justification for standards.

In addition to the electrical energy

requirements of covered products. the

IIMonthly BnefllY Review. OeQember 19l11, DOEI

EIA-003a (81/12), at .. 14.

..See pneralJy NEPP IIL

timing of the demand ~lso may be

Important. particularly with respect to

room and central air conditioners. Both

products demand electricity during

summerperlods. contnbutlng to the summer peak demand for electricity. To

meet this summer peak demand lltilities

install peaking power plants, 55'percent

of which currently use aU or natural

gas. 211 As a result. an increase in the

efficiency of air conditioners might

produce greater savings of oil and

natural gas today than increases in the

efficiencies of other products.

_DOE expects this relationship

between the efficiency of air

conditioners and the use of oil and

natural gas to be less significant in the

future for a number of reasons. The

nation's utilities forecast that the growth

in peak demand. which occurred at an

average annual rate of 4.1 percent from

1976 to 1980, will decline to a 3.5 percent

annual increase during the 1981-1990

period. The percentage of peak demand

met by power plants using oil and

natural gas also is expected to decline.

In any case. where utilities or regions

experience difficulty meeting peak

demands, the remedies could be more effectively met through State and local

actions than through a national program.

7. Other Factors. Section 3Z5(d)(7)

requires DOE to include in the process

of weighing the burdens and benefits of a standard any other factors the .-

Secretary considers relevant.

A. Regulatory Flexibility. The

Regulatory Flexibility Act requires

agencies. when proposing a rule that is

likely to have a significant economic

impact on a substantial number of small

entities. to prepare an initial regulatory

flexibility analysis. Because the rule

proposed today-that is, a

determination that no standard should

be adopted for the eight covered

products-would not likely have a

significant economic impact, if adopted.

the Regulatory Flexibility Act's _

requirement for a regulatory flexibility

analysis technically does not apply.

Nevertheless. DOE has considered the

potential impacts of standards on small

businesses in the weighing of the

burdens and benefits of standards, and.

because these impacts are almost

uniformly negative and potentially

severe, DOE has given substantial

weight to this factor in weighing these

benefits and burdens.

As previously mentioned in the

context of economic Impacts on

manufacturers. the Financiallmpacts

Model (FIM) presents four outputs.

-Collt and Quality 01 hel. for Eleclric Utility

P1anta. 1980 IJIIIWl1. DOE/ElA~81(80).
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday, April 2. 1982 I Proposed Rules 14435

bearing on firms' business risk,

profitability, debt/equity ratios, and

"quick" ratios. DOE concluded that

standards. by increasing business risk.

reducing profitability, increasing the

volume of debt. and decreasing liquidity,

would increase the-likelihood that small

and medium-sized firms would leave the

market place. DOE believes, however,

that these negative impacts on small

business may be understated in the FIM

relative to the impacts projected for

large and medium-size prototypical

manufacturers.

First. the FIM uses as the input for the

increased cost to a manufacturer the

result of the engineering analfsis. See

Economic Analysis Document. I 2.3.4.

However, the engineering analysis did

not simulate or derive the increased cost

to a small manufacturer, see Engineering

Analysis Document. Chapter C. DOE

believes that in most cases small

manufacturers would incur greater

increased per unit costs in order to

comply with standards than their large

or medium-sized competitors. This

would be the result of numerous factors.

including smaller economies of scale

and higher per-unit increased fixed

costs, such as certification and testing

for compliance. Because the FIM utilized

the likely lower cost figures of mediumsized firms for small firms, DOE believes

thast the FIM may understate the

negative impact on small firms relative

to other size firm,.

Second. the FIM relled upon publicly

available financial reports of firms, see Economic Analysis Document, I %.3.4.

These reports are required for firma

whose shares are publicly traded, firms

that are likely to be larger than privately

held firms. Thus, to the extent that the

FIM's "prototypical" small firm is

limited to the prototypical. publicly-held

small firm. its outputs are not

necessarily valid for the privately-held

firms. U these latter firms are smaller

and less capitalized than the publiclyheld firms. they would probably suffer

greater impacts.

Congress, in enacting the Regulatory

Flexibility Act, intended to reduce

burdens on small business, so that small

business would suffer relatively less

negative impacts from regulations than

larger f:1rmI. Agencies are to attempt to

mitigate regulatory burdens on small

busineues consistent with the

underlying statutory regulatory

requirements. Under section 325 there are two possible ways that small

businesses could be given special

treatment. 'First, certification. reportiDg.

and record-keeping requirements could

be lessened. This technique is

specifically mentioned in the Regulatory

F1exibillty Act. Second, section 3Z5(e)

provides that firms whose gross

revenues are less than $8 million may

receive a Z-year deferral from the effect

.of standards. ifthe Attorney General

makes a written finding that the failure

to grant such deferral would likely result

in a lessening of competition. There are

several difficulties with this provision.

The level of gross revenues is very low; a Z-year deferral is of marginal benefit;

and it may be nearly impossible for the

Attorney General to make a finding that

failure to grant deferral would "likely"

result in lessening competition. Even if it

could be said with certainty that all

these small firms would be forced out of

the market. that by itself would not

establish a lessening of competition.

Consequently, were standards

established there is little under the

terms of section 325 that DOE could do

to reduce the negative impact on small

businesses, and DOE believes the likely

result ofstandards would be the

opposite result of what Congress desired

in the Regulatory F1exibility Act,

because there might be a

disproportionate impact on small

business.

Because of the inability to give

meaningful effect to the goals and

purposes of the Regulatory Flexibility

Act if standards were adopted. DOE

believes it is appropriate to consider the

infiexibiUty of section 3Z5 with respect

to small businessee and the negative

impact of standards on small businesses

as substantial burdens in the weighing

process required by section S25(d).

B. Request for Comments. The

DepartmeQt requeets comments from

interested persons as to what other

factors. not hitherto considered. should

be considered relevant in weighing the

burdens and benefits of standards.

$.. Weighing ofFactors. The above

discussioQ of the factors to be weighed

in determining the burdens and benefits

of pos8ible standards Is intended to

identify the factors and explain their

bases. Some of the burdens discussed .above are not dependent on a particular

product-specific standard, but on the

existence of any standard at all The

existence of these generic burdens does

not. in itself, disqualify a particular

standard or standards. It is not possible

to make Ii general determination

whether standards in the aggregate are beneficial. much les8 whether, in the

aggregate, they meet the statutory

criteria. Each product's potential

standard must be judged on its own merits and demerits. weighing the

burdens and benefits arising from it.

m. Product-Specific Discussion

a. Refrigerators and Refrigerator.

Freezers.-l. Selection ofClasses. As

defmed in the DOE test procedures.

refrigerators are refrigeration products

with a compartment for refrigerated

storage of food at temperatures above

32'F, which may have a compartment

for the frozen storage of food at

temperatures below 3Z'F and above SOF.

Refrigerator-freezers are refrigeration

products with compartments for

refrigerated storage of food at

temperatures above 3Z'F and a

compartment for frozen food storage at

temperatures below a·F. Since frozen

food can be stored for longer periods of

time at temperatures below SOF than at

temperatures above S'F, DOE concluded

that lower freezer compartment

temperature provides utility to the

consumer, but lowering the freezer

temperature increases heat leakage to

the freezer and increases the energy

consumption of the refrigeration system.

Consequently. DOE made classes for

refrigerators separate from classes of

refrigerator·freezers.

Refrigerator-freezers that do not

require any consumer action to

accomplish defrosting of the freezer

provide utility to the consumer..since

automatic·defrost products consume

additional energy to melt the frost when

performing a defrost cycle. and to

remove the defrost heat from the cabinet

in order to maintain compartment

temperatures, DOE established separate

classes for automatic-defrost products.

Automatic-defrost refrigerator-freezer

configurations have been further

segregated according to the location of

the freezer compartment. DOE

determined that products with bottom·

mount or side-mounted freezers provide

utility to consumers because the more

frequently used fresh-food section is

more accessible since it is located at eye

level. Automatic-defrost refrigerator

freezers with side-mounted freezers

provide utility to consumers because of

the opportunity for users to more

conveniently locate items placed in both

the fresh-food and freezer

compartments. Units with bottom·

mounted freezers characteristically have

the highest energy consumption. and

units with side-mounted freezers

characteristically have higher energy

consumption than top-mounts. Because

each of these features provide utility to

the consumer. DOE proposed separate

classes for automatic-defrost

refrigerator-freezers with boltommounted. side-mounted. and topmounted freezers.
 CAS-RM-78-110 COMMENT 09

14436 Federal Register I Vol. 47. No. 64 I Friday, April 2. 1982 I Proposed Rules

In addition. certain models of topmounted and side-mounted refrigeratorfreezers incorporate dispensing services

which provide chilled liquids, water and

ice without opening the door. The

models with through-tha-door service

characteristically consume more energy

than the other models. OOE determined

tha't the convenience associated with

such dispenser designs constitutes a distinct utility to the consumer, and

separate cla.sse1l bave been established

for refrigerator-freezer design

configurations that provide these

services.

DOE received comments that the

standard levels proposed June 30, 1980

were likely to result in the elimination of

compact refrigerators. They stated that

compact units (9 cubic feet or less) have

a different utility than standard size

units and that the 1987 proposed final

levels are not attainable without a

resulting loss of utility. DOE has

reviewed these comments.

Consequently. DOE has established a

new class for compact refrigerators.

DOE does not have sufficient data on

these units to perform the engineering

and economic analyses for the class.

The separate classes specified by

DOE for refrigerators and refrigeratorfreezers are listed at Table 3-1. infro.

2. Design Options Evaluated. The

specific design options analyzed were:

(1) Foam Insulation Substitution in

Doors. Fil::ierglass insulation is replaced

with polyurethane foam insulation.

(2) Increased Door Insulation

Thickness. Foam door insulation is

increased to a nominal thickness of 2

inches.

(3) High Efficumcy Compressor

Substitution. A high efficiency

compressor replaced a conventional

design.

(4) Double Door Gasket. An additional

inner door seal gasket is added. '

(5) Anti-Sweat Heater Switch. A

switch is installed to pennit"in a dry

environment, shutting off the cabinet

heaters. which prevent condensation on

the cabinet exterior in high hamidity.

(6) Increoud CAbinet Insulation

Thickness. Foam cabinet inBulation is

increased to a nominal of 2 inches.

(7J Reduced Heat U:N1d of Throughthe-DoorFeature. Improved iDsulation

can be used to decrease the heat leak

and additional power consumption

attributable to the through-the-door

service featllre (ice. water, etc.).

(8) Increase Evaporator Surface Area.

Increased heat exchanger IW'face area

in the evaporator provide. for more

efficient operation of the refrigeration

system.

The design options and public

comment thereon are more fully

discussed in the Engineering Analysis

Document. Chapters 0-1 and B-1.

3. Efficiency Levela Analyzed. Table

3-1 presents thee£ficiency levels

selected for analysis for 1987. Alternate

levels were selected to generate a range

of impacts for analysis. The initial level

selected. level 3. corresponds to the

highest efficiency level considered in the

engineering analysis. It was felt that

manufacturers could produce products

at this efficiency. and these products

would not have any safety or reliability

problems. Levels 1 and 2 correspond to

efficiencies lower than that of level 3.

While these leVels were not discretely

analyzed in the engin81!ring..analysis.

DOE believes the coats are proportional

to the efficiency levels considered.

The levels considered in today's

analysis are generally lower than those

considered for standards in the June 30

proposal. This reflects changes made in

the engineering analysis.

TABLE 3-1.-AL.1V4NATlVE EFFlCl£NCY I.EvELS

FOR 1987 FOR REFRIGERATORS AND REFRIGEAATOR-FREE2£RS (ENERGY FACTOR. EF.

FT'/KWH/2~ HRS)

\I0Io IIWIy:nId Product_ u"'"' (ft·) 1 2 3

1._1. Elec1nc______........... ..__. 13 92 10.2 11.3

2- E_ 1ftigIonrlDr....... manual ____

,~ 1." a.~ i.~

3. EleeIIic ~-lreenr.

..-..c

--.... !alP

---------- 17 1.1 7.1 1.1 4. EleeIIic ~---. fr_~--- ....- 22 U 7.2 7.9 5. EIooclrlc ~.-. -""""'*-- frHZ" 1$ &A 7.~ a.~

6- EI9ctric ~·IrMzw.

a_be

--- 1Iitn ... frMz«_~

iCe or 1I<nlCe.__...... 20 5.8 8.8 7.8 7. EleeIIic "'.-.:3I.,C8i. IIJlIlInlllIc

-IIiltl

iCe

--~ or iquicI - Z2 5.0 5.5 '.0 a. Corn!>llct NioigonItar_ (') (') (.) (')

Significance atEnergy Savings

By the year 2006 the weighted average

efficiency of new refrigerators and

refrigerator-freeurs developed in the

absence of staDdards ia projected to be

over gg percent of the efficiency of new

refrigerators and refrigerator-free2:ers

developed with standarda. See

Economic Analysis Document, Table 3-

12. This would represent an 86 percent

improvement in the efficiency of new

models without standards since 1978. Jd.

Were an efficiencY standard imposed,

the ORNL Model predicts that over the

entire period 1987-2005 the foUowing

additional savinss would be attributable

to the standard:

Level1-o QUads

Level 2-0 QtJads

Level 3-0.16 Quads.

Moreover. iI consumer awareness or and

concern with appliance efficiency

increases more than predicted in the

ORNL Model. the Model projects tha t

the market would achieve all the

savings predicted for standards and

more. See Economic Analysis

Document. i 5.3.3.

Oil and Gas Savings

A savings of 0.16 Quads of electri.city

would save approximately 0.004 Quads

of oil and 0.01 Quads of natural gas over

the 19 year period." At most. this

averages to less than 8 percent of the

4400 barrels per day of oil savings that

the Congress found to be an

insignificant level of savings in rejecting .

an emergency conservation plan.:r7 See

supra.

Electricity Savings

The maximum savings attributable to

standards would constitute a mere .0::

percent of the electricity used in the

Nation over the 19-year period.:I& DOE

believes this additional .02 percent is so

small as to have no measurable effect

on the environment or the need for new

generating capacity.

20 Percent Sarings

Over the period 1987-2005 the highest

level of savings attributable to

standards would constitute less than 1

percent of the energy that would have

been consumed by refrigerators and

refrigerator-freezers over that period in

the absence of standards. See Economic

Analysis Document. Table 3-18.

Conclusion

On the basIs of the above, DOE

believes that standards for refrigerators

and refrigerator-freezers would not

result in a significant conservation of

energy."

liThia a_that oil COIIStitutetl Z,65 percent

and gea 6.15 pet"CllU1t of the eJle1'lIY Wled to Il'!nera le

electricity over thia time period. TheM percentage.

an the average ol the projected proportion. for the

years 1990 and 1995. In the abaence of specific da ta

for each of the yean 1981-2005. DOE uaed these

yean. which It beUevetl ia a COllMrY1I\i'IIe choice.

See 19l11ADnual Report to Coognrs.. Volume 3:

Foreeaata. OOE/EIA 0173(81J/3. Febnlary 198Z,

or FOUl thOU84Ild. four hundred bamlll of oil per

day equal .IS Q\ladJo over 19 yean.

"Electricity 11&&8'" over the period 11187-2005 ia

etltimaled to be about 7llO Qwlda. Thie nwnber is

derived from NEPP flL

• Although DOE created a aeparate claaa of

products for com~ ntfrigeraton that baa not been

apectfically COGJIidered III the engiDee"ring analyai••

Ufe Cycle Caet llD4ly... CIt FlM malysi... the class

of compact "'quaton ia included in the product

type nlfripMiton and ",qerator·l":reesen for

pU1'pOBea of th. ORNL Model. which determined

energy 9aving!l. A.ccordintJy. DOE believes that the

IAatiDQed
 CAS-RM-78-110 COMMENT 09

Federal Register / Vol. 47, No. 64 / Friday, April 2, 1982 I Proposed Rules 14437

Economic Justification

a. Economic Impact on Manufacturers

and Consumers. The per unit increased

cost to manufacturers to meet the level 3

efficiency ranges from $8.21 for an automatic-defrost refrigerator-freezer

with a side freezer made by a large

manufacturer to $21.09 for a manualdefrost refrigerator made by a small

manufacturer. The cost for the most

prevalent class of product (automaticdefrost refrigerator-freezer with top

mounted freezer) increases less than $10 or 5 percent. See Engineering Analysis

Document. Table 1.15 and Table 1.16.

The increased price to the consumer

ranges from $19.10 for an automaticdefrost refrigerator-freezer with a side

freezer to $31.20 for a manual-defrost

refrigerator. The price to the consumer increases less than $Z5 or 5 percent for

the most prevalent class of product. 30

While the increased price to consumers

is generally modest. it should be noted

that the greatest absolute price

increases are in the lowest priced

classes of products. see Engineering

Analysis Document. Table 1.16, reaching

almost as high as a 10 percent increase

in price. Thus. DOE believes that this

increase in first cost could make it

substantially more difficult for some

lower income consumers to purchase

new refrigerators.

The FIM predicts that a prototypical

medium-sized manufactured would

suffer a 10 percent increase in business

risk at the only efficiency level that

would save energy as a result of

standards. See Economic Analysis

Document. Table A-4-1. The sensitivity

analysis. however, indicates that

business risk is highly sensitive to

unanticipated revenue reductions. For

example. ifshipments decrease 15

percent from the anticipated level. the

effects of standards would be to

increase business risk to Z5 percent for a

prototypical large firm, to 50 percent for

a prototypical medium-sized firm, and to

30 percent for a prototypical small firm.

See Id.• Table 5-14. By 1991 (the last

year of analysis) the FIM predicts that

the prototypical medium-sized

manufacturer will have been losing

cooclWlion that a .tandard would not result in a

.igDiIica.at coDlerVation of energy can be applied to

the entlre product type.

-Th_ prices to coDiumeri are the prices

reflected in the engineering analysis only for

produell made by1at'lle manuIacturen. The

engineering anaIy.i. indica tel higher prius for the

producta made by medium-size manuIacturers.

because of thell higher cost.. The economic

anaIy.!.. however. indicate. that the large

manufacturert are the price leadert in the industry.

Therefore. medium-sble manuIacturert wiU not be

able to obtain the higher price reflected for their

product. but inttead wiU bave to fol'lJO the

difference.

increasing amountJ of money each year

for three years: the small manufacturer

will have a 12 percent decrease in profitab~ty,See Id.• Table A-4-2. At

the only standard le\'el that would save energy. the prototypical medium-sized

firm's net worth becomes negative. and

the small firm's debt/equity ratio

deteriorates by almost 40 percent. See

Id, Table A-4-9. 31

In addition to the above mentioned

quantified impacts on manufacturers. an effect of a standard, as indicated in the

General Discussion section. would be to

require certain investments to be made

that might not otherwise have been

made. These requlred investments

would likely result in the forgoing of

certain other investments which would

be more beneficial to the manufacturer.

b. Life Cycle Cost and Net Present

Value. The LCC analysis indicates1hat

the possible standard level with the

lowest life cycle cost is the only

standard level that the ORNL Model

projects would save energy compared to

the base case. See Economic Analysis

Document. Tables 4-1-4-3. This

indicates that the standard level would

not cause any economic burden on the

"average" consumer.

The NPV analysis indicates that if a

standard were adopted at the level that

would save 0.16 Quads. there would be

a net present value of $Z50 million

dollars from energy savings over the

period 1987-2OZ4. If the net present

value of this standard were spread

across the Nation. the resulting benefits

would come to less than 10 cents a year

per household.

Co Energy Savings. As indicated

above. the maximum savings

IIAI. indicated in the General Discusaion section.

theM Impaell 81'e fully accurate only to the extent

that the prototypical firm did not make investments

in impt0Y'in8 applianca afficiency .s part of ita

bi.ttorlcaUy indicated inveltmenta. Otharwise. nOI

all of the investment indicated by the engineering

analysi. would be requlred to be made in order to

produce appliance. to meet the required standard

level OOE bemet that a measurement of the

lncreaaed thlpment weighted efficiency of a product

between 1978-1987 wiI1 bear an orlier of magnitude

relation to the deereated iDvntment required of an

averqe firm to meet a standard level Moreover.

DOE believel that the decreased investment

requlrement would likely bave a aimilar order of

magnitude effect on the FIM'. projected imptcta

attributable to standarda.ln the cate of refrigerators

and refrigerator-freaen. the aRm Model indicates

thet the .hlpment weighted efficiency will increase

about 7fI percent between197S and 1987 in the

abtellce of any standard. CoDlBquently. DOE

believe. that the negative impacts actually

attributable to atandardt for refrigerators and

refrlserator-frenert may only be one quarter of

those projected by the FIM. Thi. conclusion.

bowever, appUn only to the "average" (in tenn. of

the ahlpment weighted efficiency of illl product!.

prototypical firm. The negative impacta Buffered by

a firm that had made limited or no investment. in

improved product efficiency would atill approach or

be thoae reflected by the FlM.

attributable to standards would be 0.16

Quads of electricity. If however. consumer awareness of and concern

with appliance effiCiency increases

greater than has been projected. the

ORNL Model projects no savings

attributable to standards. See supra.

d. Lessening of Utility or Performance

ofProducts. As indicated above. DOE

established new classes of products in

order to assure that the standards

analyzed would not lessen the existing

utility or performance of refrigerators

and refrigerator-freezers. As indicated

in the General Discussion section.

however. there is no assurance that

future utility or performance of

refrigerators and refrigerator-freezers

would not be lessened as a result of

disincentives caused by standards to

investments in energy-using new

features.

e. Impact of Lessening Competition.

The determination of this factor must be

made by the Attorney General.

f. Need to Save Energy. Refrigerators

and refrigerator-freezers use electricity

exclusively as their energy source.

While almost five percent of the

Nation's electricity powers refrigerators

and refrigerator-freezers. less than one

percent of that five percent would be

saved by standards for this product. In

balancing the benefits of a standard

against its burdens. no weight need be

given to savings of electricity that are so small.

g. Other Factors. Above, under

Impacts on manufacturers. the Impacts

projected by the FIM on the prototypical

small manufacturer of refrigera tors and

refrigerator-freezers were presented. In

the General Discussion section,

however. it was explained that DOE

believes the FIM understates the

negative Impact of standards on small

businesses relative to other size

businesses. Thus, DOE believes that the

negative Impacts shown in the FIM for

the prototypical small manufacturer of

refrigerators and refrigerator-freezers

are likewise understated. DOE solicits

comments on this. especially from small

manufacturers of refrigerators and

refrigerator-freezers.

Conclusion

The benefits of a level 3 standard are.

compared to the base case of no

standards. that It would save energy and

have a positive net present value. The

benefits at best. however, are minimal in

amount.

The burdens of a level 3 standard are

that: (1) It would adversely affect the

financial well-being of small and

medium-sized firms making refrigerators

and refrigerator-freezers, in some cases
 CAS-RM-78-110 COMMENT 09

14438 Federal R.~8ter I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules

causing a significant threat to their

continued existence; (2) it could

adversely affect lower inc:ome consumers by incretl&ing pu.rchase

prices of DeW model.s; (3) it could lessen

the utility or performance of this product

in the future by c:zoeaq a disincentive .

to the development of energy-using new

features; aDd (4) it could caDSe

investment.resources by manufacturera

of these productl to be allocated in a

manner that is DOt the moat beneficial to

the manufacturer.

The need of the Nation to save this

marginal increment of electricity is not

sufficient to ju&tlly any of the above

burdens.

In light of all the factors discussed

here and in the general discussion. on

balance. DOE believes that the burdens

of an efficiency standard for the product

refrigerators and refrigerator-freezers

outweigh the benefits. sa

f. Freezers. L Selection ofClasses. As

defined in the DOE test procedures.

"freezer" means a cabinet designed as a

unit for the storage of food at

temperatures of O· F or below, having

the ability to free:l:e food and having a

source of refrigeration requiring an

electrical energy input only.

Utility and performance

considerations dictate five separate

products classes. Three of these result

from:

Type of freezer defrost system

(manual or automatic)

Configuration (chest orupright)1ivo

result from the inherent inefficiency of

compact units.

The configuration of the unit (i.e.•

chest or upright) provides utility which

affects efficiency. Upright freezers offer

greater accessibility to the freezer

contents and more efficient use of floor

space than chest freezers. Consequently.

DOE has grouped ~e products into

separate classes.

Another performance-related feature

that affects utility and efficiency is the

type of defrost system. which

determines the extent of consumer

action needed to accomplish defrosting.

Automatic-defrost units do not requne

any consumer action to accomplish

defrosting. and thus proTid1! the

consumer with utility not provided by

"A.Ithoutlk DOE. _led a tepaJ'lIhi claM of

producll r... !bat bM _ been

CUlIIidend Ia the &D&Iyai&,

LIfe CJde Colt ... fD4 a.aal71ia. DOE

believllll thall!le amount of elMll'lD' thai could be

HVee! by • It1l1ICWd for this cia. II IlXtmDely

amaD. _ .upru. CoDMqumlly, DOE beUeY.. that

.udI aavtap, Cllll!Ij)U1Id to the likely bwdeDa that

would _ult from • alADdud impcted Oil '*1 ODe

cia.. of a produc:t. and lb.t c1... _ of !be tmaller

III Dumberw olllnlla. dolIart of aa.Ie.. 01' ......". -.:i.

IDdicalll thaI the burdna of. tlaadoMd fcIr tb.i.I dau

ovtwe.ilJ.b ita baleti1I.

manual-defro.t units. Since there are no

chest freezen that offer the automaticdefrost feature. a seperate class wu

established only for automatic defrost

upript freezers.

In light of manufactm'erll' comments

noting the inherent inefficiency of

compact freezers as wen a. their trtility.

DOE has designated separate cla.ses for

compact chest and upright freezers.

.The aepalate cla.saes specified by

DOE for free2:ers are listed in Table 3-2.

mira·

2. Design Opt:.i0ll8 Evaluated. The

specific design optiona analyzed were:

(1) Foam Insulation &bstitution in

Cabinet. Fiberglass cabinet insulation is

. replaced with polyurethane foam.

(2) Foam Insulation Substitution in

Door. Fiberglass insulation in the freezer

door is replaced with polyurethane foam

insulation.

(3) Increase Cabinet In8ulation

Thickness. Foam cabinet insulation is

increased to a oominal2.tna inches (chest

freezers only).

(.) Inc.reas.e Doorlntmlation

Thickness. Foam door insulation is

increased to a nominal thickness of 2

inches (chest freezen only).

(5) High Efficiency Compressor

- Substitution. A high efficiency

compressor replaces a conventional

design. .

The design options and pubHc

comment thereon are more fully

discussed in the Engineering Analysis

Document.

3. Efficiency Levels Analyzed. Table

3-2 presents thi! efficiency levels

selected for analysis for 1987. Alternate

levels were selected to generate a range

of impact for analysis. The initial-level

selected. level 3, COlTetpondt to the

highest efficiency level considered in the

.engineering analysis. It was felt that

manufacturen could produce products

at this efficiency. and these products

would not have any safety or reliability

problema. Levels 1 and 2 correspond to

efficiencies lower than that oflevel 3.

While these levell were not discreetly

analyud in the eoginee.ring analysis.

DOE believes the coats are proportional

to the efficiency levela considered.

The levell coaaidered in today's

analysis are seuerally lower than those

considered for standards in the June 30

proposal These reflect changes made in

the engineering ana1yris.

DOE does not have sufficient data on

compact chest and upright freezers to

perform the engineering and economic

analyses for these classes.

TABLE 3-2.-ALTERNAnvE EFFIClENC'Y lEVELS

FOR 1987 FClfI FREEZERS (ENERGY FACTOR.

EF, FT'/tfN./H/24)

v.... InI/y4ed PIorlud_ -

C'Il"l I 2 3

I. cr-l_. ____ 1$ 13.1 15.7 17.7

2.lJl>!i\1lI-. flosl_.._______ --. 141 '2.4 '3.9 15.4 3. UpngN _.__ •

fr"s\.. I' 7.3 U 10.3 4. a-_. "","-=,__ PI (I) 1') (') I. UpngnI_. .._ PI I'l (I) (.)

I _ lIIlIIyzecL

Significance ofEnergy Savinss

By the year 2005 the shipment

weighted efficiency of new freezers

developed in the absence of efficiency

standards is projected to be over 92

percent of the efficiency of new freezers

developed with a mandatory standard.

See Economic Analysis Document.

Table 3-12. This would represent a 46

percent improvement in the efficiency of new models without standards since

1978.Id. Were an efficiency standard

imposed. the ORNL Model predicts that

over the entire period 1987-2005 the

fonowing additional savings would be

attributable to the standard:

Level 1-0.05 Quads

Level 2-<l.16 Quads

Level ~.33 Quads

Moreover. if consumer awareness of

and concern with appliance efficiency

brings more efficient products into the

market than predicted in the ORNL

Model. the model projects that the

market response would achieve all the

savings predicted for standards. See

Economic Analysis Document, I 5.3.3.

Oil and Ca6 Savings

A savings of 0.33 Quads of electricity

would save approximately 0.009 Quads

of oil and 0.02 Quads of natural gas over

the 19-year period. 31 At most. this

averages to less than 17 percent of the

4400 barrels per day of oil savings that

CongreSI considered insignificantin

rejecting an emergency conservation

plan.... See supra.

Electricity Savings

The maximum savings attrIbutable to

standards would constitute less than .05

percent of the electricity used in the

Nation over the 19-year period. 16 This

percentage is 80 small as to have no

-Thia U8U1J1oa lbal oa coaatilul.. 2.llll pm:enl

and sa, ILU perce.ot 01 !be anergy u.aed lD seDerale

electricity over lb.l. lime paiod. TheM perceDlasea

ant lbe average of the projecUld proportiODl the

yeal'l 1990 aod 1M. Saaupra.

..Four thouaa.ad, loar hundred !lalTe» or oil per

day equal .1S Quada OYer 111 ye....

• E1eclri<:ity ....se over the period 1887-2006 is

estimaled 10 be 700 Quad•. See NEPP Ul.
 CAS-RM-78-110 COMMENT 09

Federal Register I VoL 47, No. 64 I Friday, April 2. 1982 I Proposed Rules 14439

measurable effect on the environment or

the need for new generating Clq)acity.

20 Percent Scrrings

Over the period 1lil81-2005 the highest

level of savings attnbutable to

standards would constitute less than 4

percent of the energy that would have

been consumed by freezen in the

absence of standards. See Economie

Analysis Document. Table 3-18.

Conclusion

On the basis of the above. DOE

believes that atandards for freezers

would not result in a sign.ficant

conservation of energy. 30

Economic fustifiCDtion

a. EfXJnomic impact on Manufacturers

and Consumers. The per unit increased

cost to manufactuers to meet the level 3

efficiency ranges from $9.05 for a chest

free:w-, manual defrost. made by a large

manufacturer to $23.85 for an upright

auto defrost freezer made by a mediumsized manufacturer. At level 2, the

increased per unit cost ranges from $5.79

for the chut freezer made by a large

firm to $20.84 for a manual defrost .

upright made by a medium-size

manufacturer. The cost increases for

manual defrost chest freezers. the most

prevalent class of product. range

between $9 and $12 (about 7 percent) at

level 3, from $5.79 to $7.f17 (about 4

percent) at level 2, and from $2.10 to

$3.03 (about 2 percent) at level 1. See

Engineering Analysis Document. TabI.e

2.11 and Table 2.12.

The increased price to the consumer if a standard were set at level 3 ranges

from $21 (7 percent) for the most

prevalent class of product (chest freezer)

to $36 (8 percent) for an upright

automatic-rlefrost freezer. The iAcrea.aed

price at this level for an upright manualdefrost freezer, which constitutes ove

31 percent of the market. is $35 (over 10

percent). At level 2 the price increasu

for the two most prevalent classes

would be approximately $13.50 (4

percent) and $29.70 (9 percent),

respectively.IT See Engineering

Analysis Document. Table 2.12.

Whila these price increases are

relatively modest. DOE believes they

would result in some low income

persons foregoing purchase. of freezers.

especially because consumer response

to price increases in freeurs is more

price elastic than for most appliance..

See Economic Analysis Document.

Table 3-.Z4.

The FIM predicts that a prototypical

medium-sized manufacturer would

.uffer a 10 percent increase in business

risk and a .mall manufacturer a 65

percent increase in busine81 risk at the

efficiency levels that would save the

two highest amounts of energy as a

result of standards (levels 2 and 3). See

Economic Analysis Document. Table A4-1. IIshipmentl decrease 15 percent

from anticipated levels, the effects of a

level 3 standard on a small firm would

be to impose an increased business risk

of 75 percent. See Id., Table 5-14. By

1991 (the last year of analysis) the FIM

predicts that the prototypical smallsized manufacturer will have been

losing increasing amounts of money five

out of the laat six years at level 3 and for

the last three years at level 2. At level 3

the prototypical medium-size finn's

profitability decreases over 25 percent

in the year. following imposition of a

standard. See Id., Table A-4-3. At the

standard level that would .ave the most

energy, the prototypical small sized

firm's net worth become. negative. The

medium firm's debt/equity ratio

deteriorates by almost 200 percent at

level 3 and 100 percent at level 2. See

Id.• Table A-4-9. At both levels 2 and 3

the "quick" ratio of the prototypical

small manufacturer of freezers

deteriorates almost SO percent. See Id.,

Table 4-31."

_ bec::au.we of their higher com. The econamlc

analysis. 1laMrrv. iAdlcatel that the large

m.eu.f.acturera lU'lt the price leaden ia the iDdumy.

Therefol"ll. medium-lise manufactul"lln will not be

abla to obtain the higher pric:a rallectad for their

product. but iDatnd will have to forgo tha

differeac::e.

IIN indicated ill the Gm-.l DlKu8im teetioa.

theae iDrpae:ta UlI fully a-.Ie oa.ly to 1M Blellt

that the pNtotyplca1 firm did Dot make Inveatmenta

In Improvtnc appliance .meleney al part of Ita

hlatorically Indicated 1n....lmetllL 0therwIaa. DO(

all of the Invfttraant iIIlIctic:ated b1 the

analy. would be I'8CIWled to be IIIo1Ide In ortW to

produce appUaDcea to mael the required atandard

lavel DOE betleY" that a IDeuuremeDt of the

\lu;reued ahipmat W1IlPIIId efBcieacy 01 a prod1aCt

between l.,.,...llll11 will bear lUI ordolr of m&8Dltuda

ntlalion to the d-.edIII1vutmeDt required of an

average firm to meet a atandard leval Moreover.

DOl! belltrrea that the decrened bm!ttment

ntq~would 1lIutly lu.... a almlIar ardtrr of

mqnitude effect 011 tha FlM'I projec:IIId lmp8cU

attributable to at&nda.rda.1n the cue of &eesan. the

ORNL Modallndlcataa that the Ihlpment weighted

efflelency wiIllnCl'l!aae about Z1 percent between ws and lll181ln the abeence at uy atmdard.

ConaeqllillltJy. DOE belleYea that the IU!8ltive

Impaeta aetually attributable to ,tandazda would

In addition to the above mentioned

quantified impacts on manufacturers. an

effect of a standard. as indicated in the

General Dt8CU8sion section. would be to

require certain investments to be made

that ~t not otherwise have been

made. 'These required investments woud

likely result in the foregoing of certain

other investments which would be more

beneficial to the manufacturer.

b. Life Cycle Cost and Net Present

Value. The LCC analysis indicates that

the possible standard level with the

lowest life cyle cost is the standard level

that the ORNL Model projects would

save the most energy compared to the

base case. See Economic Analysis

Document. Tables 4-1-4-3. This

indicates that the standard level would

not cause any economic burden on the

"average" consumer.

The NPV analysis indicates that if a

standard were adopted at the level that

would save 0.33 Quads. there would be

a net present value of $720 million from

energy savings over the period 1987-

2026. If the net present value of this

standard were spread across the Nation.

the resulting benefits would come to less

than 23 cents a year per household.

c. Energy Savings. As indicated

above. the maximum savings

attributable to standards would be 0.33

Quads of electricity.

d. Lessening of Utility or Performance

ofProducts. As indicated above. DOE

established new classes of products in

order to assure that the standards

analyzed would not lessen the existing

utility or performance of freezers. As

indicated in the General Discussion

section. however, there is no assurance

that future utility or performance of

freezers would not be lessened as a

result of disincentives caused by

standards to investments in energyusing new features.

e. Impact of Lessening Competition.

The determination of this factor must be

made by the Attorney General.

f. Need to Save Energy. Freezers use

electricity exclusively as their energy

source. While almost two percent of the

Nation's electricity powers freezers. less

than four percent of that two percent

would be saved by standards for this

product. In balancing the benefits of a

standard against its burdens. no weight

'need be given to savings of electricity

that are so small.

g. Other Factors. The negative

Impacts on small businesses of a

likely be about four-flftm of thoae projected by the

FlM. ThJa CXlDC!lWOQ, boweveT. appUea ouly to the

"average:' prototypical firm. The negative Impacta

lUffered by a firm that bad made limited or no

!nveltmenta In Improved product efficiency would

,till approach or be those reflected by the FIM.
 CAS-RM-78-110 COMMENT 09

14440 Federal Rsgister I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

standard for this product have been

described above. The analysis shows

that imPOSitiOD of standards would

significantly increase the probability·

that small firms would not make a profit

in the manufacture of new equipment.

They would lose increasing amounts of

money. and their Det worth would

become negative. In the General

Discussion section. DOE's beUef that the

FIM understates the negative Impact of

standards aD small business relative to

other size firms was explained. Thus,

DOE beUeves that the negative Impacts

shown in the FIM for the prototypical

small manufacturer of freezers is

likewise understated. DOE soUcits

comments on this subject.

Conclusion

The benefits of a standard are. compard to the base case of no .

standards. that it would save energy and

have a positive net present value. These

benefits, however. are mlnimalin

amount.

The burdens of a standard are that: (1)

It would adversely affect the financial

well-being of small and medium-size

firms making freezers, in the case of .small manufacturers causing a

significant threat to their continued

existence; (2) it could lessen the utility

or performance of this product in the

future by creating a disincentive 'to the

development of energy-using new

features: (3) it could cause less than

optimal allocation of investment

resources by manufacturers of these

products; and (4) it could preclude some

lower income persons from purchasing

new freezers.

The need of the Nation to save this . marginal increment of electicity is not

sufficient to justify any of the above

burdens.

In Ught of all the factors discussed

here and in the general discussion. on

balance. DOE believes that the burdens

of an efficiency standard for freezers

outweigh the benefits.sa

Co Clothes Dryers. 1. Selection of

Classes. A clothes dryer is defined as a

cabinet-like appUance designed to dry

fabrics in a tumble-type drum with

forced-air circulation. The heat source

• A1thouch ooB erNted aeparate cia.... 01

prodllCta lor _pac:t c:hnt and uprishl fnezert thai

baY' DOl beeD tpedflcalJy OODIidered In th.

.ngiDeertq LIle (;yd. Coet &Dalyti.t. or FIM e.naIytil, ooB beUIIYe. that th. IIIlOIIDt of

I!llftllY th.1 coald be laved by .~for thea.

cia.... i. extreIllIy amaIl. IHIUPra. CoJJ.equently.

DOE beUev.. thalauch lavingl. oompard 10 the

l:ikely bardelll that would reaull from .tandards

beina impoee<! OD two cia.... of • product. end

tbne cia.... beina nWler iD Dumbere olllDlta.

dollarl olll8le.. or energy oaed. Indlc:ate thai tha

burd.1II of .taDdarda lor tbne cluaet outw.!Ih

tbelr beueflta.

. may either be electric or gas. Compact

clothes dryers have a drum capacity of

less than 4.4 cu. ft., and standard

clothers dryers have a capacity of 4.4 cu.

ft. or greater.

Four classes of cothes dryers are

specified by DOE. ~ese product classes

are distinguished by different energy

sources and by performance-related

features. Go and electricity are the

energy sources. Performance-related

features are drum capacity and

application voltage.

Standard electric dryers use 240 volts.

DOE does not know of any standard

electric dryer that works on 120 volts.

Because compact dryers provide added

utility by being suitable for placing in

small spaces, while being less energy

efficient, a "perate class is established

for compact electric dryers. Further.

separate product classes are established

for compact electric dryer based on

. appliance voltage. The 120-volt dryers

tends to dry clothes at lower

temperatures and for longer time periods

than the 240-volt dryer. The 240-volt

compact electric dryer provides added

utility to some consumers but is less

energy efficient. Two product classes for

compact electric dryers are accordingly

established. The four product classes for

clothes dryers established by DOE are Usted in Table 3-3, infra.

2. Design Options Evaluated. Three

design options were evaluated for

improving the efficiency of clothes

dryers. These were:

(1) Automatic termination by moisture

sensing. Reduces the energy used by

ensuring that a dryer is turned off as

soon as the moisture is removed from

the clothes.

(2) Automatic termination by

temperature sensing. Reduces energy

consumption by ensuring that a dryer is

turned off as soon as the temperature of

the exis'ling air reaches a predetermined

temperature.

(3} Insulation. During the drying cycle,

some areas of the dryer cabinet are at

temperatures above room temperature.

This results in standby 10lles, which

can be reduced by the use of insulation.

The design options and public

comment thereon are more fully

discussed in the Engineering Analysis

Document. Chapter D-5 and E-S.

3. Efficiency Lsvels Analyzed. Table

3-3 presants the efficiency levels

selected for analysis for 1987. Alternate

levels were selected to generate a range

of Impacts for analysis. Level. for gas

and standard electric clothes dryers and

level 3 for compact electric clothes

dryers correspond to the highest

efficiency levels considered in the

engineering analysis. It was felt that

manufacturers could produce products

at this efficiency. and these products

would not have any safety or reliability

problems. Lower efficiency levels were

not discreetly analyzed in the

engineering analysis, but DOE believes

the costs are proportional to the

efficiency levels considered.

The levels considered in today's

analysis are generally lower than those

considered for standards in the June 30

proposal. This renects changes made in

the engineering analysis.

TABLE 3-3.-EF'FlClENCY Uvas FOR 1987

FOR Cl.OTHES DRYERS (ENERGY FACTOR,

EF, La/KWH)

Vd- IAWf _lyZed

PIoduct '*- ..... - (II) 1 2 S .. 1. EIeclriC standaIll1iZ._ 8.5 2.7 2.S 2.9 3.0 2. EIoIclrIC, --'.... 120 Volts SA 2.7 2.85 3.0 ..... S. EIoIclrIC, COIlll*l .... 240

Volts U U 2.5 2.6 ... Gou_ e..s u 2.5 2.8 2.7

Significance ofEnergy Savings

Were an efficiency standard Imposed,

the ORNL Model predicts that over the

entire period 1987-2005 the following

savings would be attributable to the

imposition of a stand8.rd:

Electric

.Level 1-0 Quads

Levelz-o Quads

Level 3-0.04 Quads

Level ~.19 Quads

Gas

Level 1-0 Quads

Levelz-o Quads

Level 3-0 Quads

Level ~.02 Quads

Oil and-Gas Savings

At level 4, the savings consist of 0.19

Quads of electricity and 0.02 Quads of

gas. Economic Analysis Document,

Table 4-22. The 0.19 Quads savings of

electricity would save 0.005 Quads of oil

and 0.01 Quads of gas over the period

1987-2005...Thus, at most, standards

would save 0.005 Quads of oil and 0.03

Quads of gas. The gas savings are less

than 18 percent of the 4400. barrels per

day of oU that Congress found

insignificant. and the oil savings are less

than 3 percenLU

"'Thi. __thai oil colMlitute. 2.85 percetlt

and gu 6.15 percenl 01 the enel'llY u.ed to generate

electridty over thilIlime period. The.. percentages

ant the avera", of tha projected proportion. for the

, ..... lllllO and 1985. SH .upra.

..Four thousand, Four hundred bun!!. of oil per

day equal .18 Quads over 19 yeara.
 CAS-RM-78-110 COMMENT 09

Federal Register I VoL 41, No. I Friday, April 2, 1982 I Proposed Rules 14441

against its burdens. no weight need be

given to savings of energy that are so

small.

g. Other Factors. Because the FlM was

not used to assess the impacts on drier

manufacturers. DOE is unable to

estimate the impact of a standard for

dryers on small manufacturers of dryers.

DOE solicits comments from such

manufacturers on the likely impact of a

standard.

Conclusion

The benefits of a standard are.

compared to the base case of no

standards. that it would save energy and

have a positive net present value. The.

benefits. however. are minuscule in

amount.

The burdens of a standard are that; (1)

Life cycle costs to the average consumer

would increase for over 90 percent of

the dryers purchased: (2) increased first

costs for the most prevalent dryer are

high enough to preclude new dryer

purchases by some lower income

persons; (3) the future utility or

performance of dryers might be

lessened: and (4) manufacturers of

_ dryers might forgo investments that are

more beneficial to them.

The need of the Nation to save this

marginal increment of gas or electricity

is not sufficient to justify any of the

above burdens.

In light of all the factors discussed

here and in the general discussion. on

balance. DOE believes that the burdens

of an efficiency standard for clothes

dryers outweigh the benefits.

d. Water Heaters. 1. Selection of

classes. Included in this product type

are all residential water heaters

operating at a temperature of less than

180°F which have the following

characteristics:

Electric water heaters with a storage

volume of not less than 20 gallonll nor more than 120 gallons. with 8J1 input rating of 12

KW or leas at a voltage no greater than 250

volta; gas water heaters with a storage

volume of not less th8J1 ZO gallons nor more than 100 gallons. with 8J1 input rating of

75.000 BTU/HR or less; oil water heaters with a storase capacity of 50 gallons or less and an input rating of 103.875 BTUfHR or less.

Five classes of water heaters are

specified by DOE. Four of these product

classes are distinguished by different

energy sources (electric. electric heat

pump. gas. and oil).

Several manufacturers felt that

electric table top water heaters are

significantly different from other electric

water heaters and proposed a separate

product class. A main reason for the

separate classification was that these

table-top water heaters provide a unique

through the F1M model. AJj indicated in

the General Discussion section. an effect

of a standard would be to require

certain Investments to be made that

might not otherwise have been made.

These required investments would likely

result in the forgoing of certain other

Investments which would be more

beneficial to the manufacturer.

b. Life Cycle Cost and Net Present

Value. At either of the levels of

efficiency that would save energy

(levels 3 and 4). the life cycle cost

increases for the two classes of dryers

that together make up over 93 percent of

all dryer sales. compared to the life

cycle coat in 1978. Thus. whatever

energy would be saved as a result of

standards would be as a direct result of

penalizing the average consumer by

requiring him to purchase a dryer with a

higher life cycle cost than is now

available. Of course. below average

users and those with below average fuel

prices would likely be harmed even .

more.

The NPV analysis Indicates that if a

standard were adapted at level 3. there

would be a net present value of $70

million from energy aaV'iDgs over the

period 1961-2024. If the net present

value of this standard were spread

across the Nation. the resulting benefits

would come to about 3 cents a year per

house hold. At the higher efficiency

level. the NPV would be only $60

million. $70 million from electric dryers

offset by a negative $10 million

occuni.ng in gas dryers.

c. Energy Savings. AJj indicated

above. the maximum savings

attributable to standards would be 0.21

Quads.

d. Lessening of Utility or Performance

ofProducts. The classes established by

DOE assure that the standards analyzed

would not lessen the existing utility or

performance of clothes dryers. As

indicated in the General Discussion

section. however. there is no assurance

that future uti1ny or performance of

clothes dryers would not be lessened as

a result of disincentives caused by

atandards to investments in energyusing new features.

e. Impact ofLessening Competition.

The determination of this factor must be

made by the Attorney General.

f. Need to Save Energy. In the absence

of standards. in 1990 only 0.06 Quads of

gas annually will be directly used for

clothes drying. and In 2005 half that

amount. Economic Analysis Document.

Table 3-16. While dryers use almost two

percent of the electric1ty in the Nation

the highest standard would save less

than two percent of that two percent. In

balancing the benefits of a standard

-Electricity uaqe over the period 1987-2005 II

e.ttlmated to be about 100 Quada. Sft 6apra.

..Tbese priaa to COlmllDefl are the prices

reflected iD the englneerill8 lIlI41yal. only for

prodUCUI made by Iarp IIWlWId:IIrera. The

englneeriDlllll41y.1I indicate. higher prices for the

prodw:tl mada by medllllll-aise 1DlLllIILleturen. becaUH of their bigber COIlL Tha economic

analyala. bowever. indicates that the la.rge

manufacturerl are the price leaden in the induatry..

Therefore. medlum-.ise manufllcturen will not be

able to obtain the bighar price reflected far their

product butlDatead will bave to WQlO the

difference.

Electricity Savings

The cwnuJative electricity savings

attributable to the highest standard level

would constitute le88 than .03 percent of

the electricity used in the Nation during

the period 1987-2005. uThese savings

are 80 small as to have no m.easurable

effect OIl the environment or the need

for new generating capacity.

ZO Percent Savings

During the period 1987-2005 the

maximum energy savings attributable to

standards for clothes dryen would

constitute less than 2 percent of the

energy used for clothes dryers during

that period without standards. See

Economic Analysis Document. Table 3-

18.

Conclusion

On the basis of the above. DOE

believes that standards for clothes

dryers would not result in a significant

conservation of energy.

Economic Justification

a. Economic Impact on Manufacturers

and Consumers. The per unit increased

cost to manufacturers to meet the

highest level of efficiency ranges from

$3.72 for a large manufacturer of a 240

volt compact dryer to $14.88 for a small

manufacturer of a standard electric

dryer. Engineering Analysi& Document,

Table 5.10. The increased price to the

consumer at this level ~ea from over

$34 for the standard electric dryer to

less than $9 for a 240 volt compact

dryer. Id., Table 5.11. This incree,.se in

price of the standard electric dryer is

.over 15 percent. and this class

constitutes over 70 percent of all clothes

dryer sales. 4J Id. and Table C--i. A 15

percent increase in price would likely

have the result of precluding some lower

income persons from purchasing a dryer.

especially since consumer response to

price increases in dryers is more price

elastic than for most other appliances.

See Economic Analyais Document.

Table 3-24-

Because of the minimal energy

savings attributable to standards for

clothes dryers. DOE did not analyz:e the

impacts on manufacturers of dryers
 CAS-RM-78-110 COMMENT 09

14442 Federal Register I Vol. 47, No. 64 I Friday, April 2. 1982 I Proposed Rules

utility for consumers by being used as countertops in kitchens where space is

at a premium but because of their size are less efficient. Therefore. a separate

class., electric table-top water heaters.

has been proposed.

The separate classes of water heaters

specified by DOE are listed at Table 3-4.

infra.

2. Design Options Evaluated The

major design options analyzed were: (1) Impraved Insulation. Improved

insulation involves using thicker . fiberglass insulation. denser fiberglass

insulation. or substituting polyurethane

foam insulation for fiberglass.

(2) Increase Flue Heat Transfer and

Reduce Main Burner Rate. These two

design options are coupled since

increasing the flue heat transfer requires

reducing the main burner firing rate in

order to maintain acceptable pressure

drops through the system.

(3) Retoollacket Top. Jackets in some models are attached to the top of the

tank. resulting in heat loss due to a fin

effect and limiting the insulation

thickness on the top. This design option

calls for retooling the jacket top and

holding it on by attaching it to the jacket

side. .

(4) Heat Traps. Heat traps are used on the water inlet and outlet pipes to

reduce natural convection losses.

The design options and public

comment thereon are more fully

discussed in the Engineering Analysis

Document. Chapters D-3 and B-3.

3. Efficiency Levels Analyzed. Table

3-4 presents the efficiency levels

selected for analysis for 1981. Alternate

levels were selected to generate a range

of impacts for analysis. Level 3

corresponds to.the highest efficiency

level considered in the engineering

analysis which is technologically

feasible based on the design options

considered. It was felt that

manufacturers could produce products

at this efficiency. and these products

would not have any safety or reliability

problems. Levels 1 and 2 correspond to

efficiencies lower than that oflevel 3.

While these levels were not. discreetly

analyzed in the engineering analysis,

DOE believes the costs are proportional

to the efficiency levels considered.

The levels considered in today's

analysis are generally lower than those

considered for standards in the June 30

proposal This reflects changes made In

the engineering analysis.

DOE does not have sufficient data on electric table-top units to perform the

engineering and economic analyses for

the class. No levels were analyzed for

oil water heaters because of the smell

quantities being produced and their

replacement by gas or electric water

heaters. DOE determined that the water

heater test procedure is not valid for

heat pump water heaters. Section 325(b)

of the Act states that no standard shall

be prescribed if no test procedure has

been prescribed with respect to the

class.

TA8l.E 3-4.-A1.TalNATlVE EFFICIENCY LEvELS

FOR 1987 FOR WATER HEAT11:RS (ENERGY

FACTOR. EF) 1

v.. ena/y:Nd flrooU:l d.- ume

lPfI 1 2 3

1. Gas___•_____ M.9 M.1 60.1 2. e-.___.___ 52 85.6 88.9 92.1 s. EIec1IiC _ lqI _ (a) (a) (a) (a) •• Oil ___ (a) (a) (a) (a) 5. ______' ____

(a) (a) (a) (")

SignIficance ofEnergy Savings

By the year 2005 the average

efficiency of new water heaters that

would be developed in the absence of

standards is projected to be over 91

percent of the efficiency of new water

heaters developed with standards.

Economic Analysis Document. Table 3-

12. This would constitute a 23 percent

increase in the efficiency of new model

gas water heaters since 1918 without

standards and an 11 percent Increase for new model electric water heaters. id.

Were an efficiency standard imposed.

the ORNL Model predicts that over the

entire period 1981-2005 the following

additional savings would be attributable

to the standard: '.

. EIec1IiC Gas

~, 0.28 0I.tIds___ 0.004 au-. ~2 Ul5 0I.tIds_ O.oeau-. ~3 2.01 0I.tIds___ 0.08 au-.

There is a particular variable in the

ORNL Model whose value is peculiar in

the case of water heaters such that DOE

believes that the savings projected may

be overstated. The implicit discount rate

calculated for water heaters for the base

year (1918). using manufacturers 1918

shipment data. is much higher than it is

for other appliances with similar

characteristica. for instance. m,nances

and central air conditioners. It ranges

from 3 to 21 times greater than that used

for these products. For water heaters.

the analysis shows an implicit discount

rate of 163 pe~nt for electric and 451

percent for gas. For furnances and

central air conditioners. the rate does

not exceed 54 percent. Economic

Analysis Document. Table 3-6. Despite

tome effort. DOE has been unable to

explain this anomalously high implicit

discount rate for water heaters. and

DOE requests comments from interested

persons on this issue. The effect of a

high implicit discount rate in the ORNL

Model is to lessen the responsiveness of

the market to demand more efficient

appliances as a result of higher energy

prices. See generally Economic Analysis

Document. I 3.2. Decreasing the implicit

discount rate of water heaters to that of

gas furnances decreases the energy

savings to zera for the nominal

standards case. i.e.• level 3 for electric

water heaters and level 2 for gas water

heaters. See Economic Analysis

Document. Table 5-2. Thus. if the

implicit discount rate used for water

heaters is too high, the savings·

attributable to standards may be vastly

overstated.

Oil and Gas Savings

The maximum savings over the 19

year period of 2.07 Quads of electricity

amounts to 0.05 Quads of oil and 0.13

Quads of gas." Thus. the maximum oil

and gas savings would be 0.05 Quads of

oil and 0.21 Quads of gas. While the gas

savings exceed the 4.400 barrels per day

level that the Congress found to be an

insignificant level of savings in rejecting an emergency conservation plan. 45 there

is no indication that any excess over

4.400 barrels per day should be

considered significant.setsupra.

Indeed. they only slightly exceed onehalf of the 10.000 barrels per day level

DOE believes would be significant.

Electricity Savings

The maximum savings attributable to

standards over the period 1987-2005

would constitute less than .3 percent of

the electricity used in the Nation over

that period."

20 Percent Savings

Over the period 1981-2005 the highest

level of savings attributable to

standards would constitute less than 3

percent of the energy that would have

been consumed by water heaters in the

absence of standards. See Economic

Analysis Document. Table 3-18.

Conclusion

On the basis of the above. DOE

believes that standards forwater

..Thia a ..umea that oU COMtitutes :2.85 percent

and a" lI.15 percent 01 the energy uled to aenerale

electricity over thl. time period. Thele pereentaaes

are the average of the projec1ed proportionl for the

yeare 1990 and 11195. See .upra.

• PoW' thouuncia. fOur bW'ldred barrel of oU per

day equal .1S Quacia over 19 yean.

..E1ectricityuaage over the period 1987-2005 ill

atimated (0 1M about 700 Quacia. Set! .upra.
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday. April 2. 1982 I Proposed Rules 14443

heaters would not result in a significant

conservation of energy. U

Economic Justification

a. Costs to Manufacturers and

Consumers. The per unit increased cost

to manufacturers to meet the level 3

efficiency for water heaters ranges from

$13.65 for a gas water heater made by a

large manufacturer to $14.65 for an

electric water heater made by a

medium-size manufacturer. See

Engineering Analysis Document. Table ~lL .

The increased price to the consumer

for a water heater meeting a level 3

standard ranges from $31.30. or a 19

percent increase. for an electric water

heater to $29.90. or a 15 percent

increase. for a gas water heater. The

price to the consumer of a level 2 gas

water heater increases about $18. or 9

percent. and the price of a level 2

electric water heater increases about

$20. or 12 percent...• At level 1. price

increases are minimal. See Engineering

Analysis Document. Table 3.12. DOE

believes that the price increase at the

higher levels of efficiency would likely

preclude some lower income persons

from purchasing new water heaters.

The FlM predicts that a prototypical

medium-size manufacturer would suffer

a 15 percent increase in business risk at

all standard levels analp;ed. and that

prototypical large and small flrm.s would

incur a 10 percent ineree..se at level 3,

with large flrm.s incurring a 15 percent

increase in busine8fJ risk at level 2. See

Economic Analysis Documeot. Table 4-

28. If shipments decrease 15 percent

from manufacturers' anticipated levels.

the effects of a level 3 standard for

.. DOE created aeparale c1asael of prodUetlI for

electric table top. au lI.Ild heat pump water heaters

that were not lpecifically a.naIysed in leveral of the

analysel. The leles volume of electric table top

water heaterl, however. la very amall. 8tH

Englneerinll AnalYlia Document. Table e-.1. and l'>e

energy un by 011 water heaters. Imall to begin with.

decreasel rapidly durlnll the period 1987-2005 In the

absence of ltandards. lett Economic Analysia

Document. Table 3-18. ConNCluently. DOE believes

that the deterlllination that a ltandard for water

heaten would not result in a lignificant

c:on.aervation of energy applies to these two product

c1a_ al well Becauae heat pump watar heaten

are very new. becaule there ia no test procedure for

them. and beca.... they have a potential for

I!gnificant markat penetration. DOE II relervlng I

determination u to the lign.ificance of savinsl of

beat pump water heaters. •• TheM pricea to COMumera &l'I! the pricea

rel1ected In the engineerlD& a.naIYlia only for

produetllllL1lde by larie manufacturel'll. The

ensJneerinl anaIYlia lndlcalel higher pricel for the

prodUetlI IIL1Ide by medJum-aize manufacturers.

bees.... of their hlPer coata. The economic

analYlia. however. indlcalal that the Iatse

manufacturers era the price leaden in the induatry.

Therefore. medlum-alze manufacturel'll will not be

able to obtain the higher price reflected for their

product. butlnalead will have to fot'JO the

difference.

electric water heaters and a level 2

standard for gas water heaters would be

to increase business risk to 20 percent

for large firms. to 30 percent for mediumsize firms. and to 20 percent for small

firms. See Economic Analysis

Document. Table 5-14. By 1991 (the last

year of analysis) the FlM predicts that

the prototypical large-size manufacturer

will have been losing increasing

amounts of money the last two years at

level 3 and the last three years at level

2. For the four years following the year

that standards would be imposed.

medium manufacturers would average a 27 percent decrease in profitability at

level 2 and a 23 percent decrease at

leval For small firms the comparable

figures are a 12 percent decrease and a

19 percent decrease. See Economic

Analysis Document. Table A-4-9.'"

In addition to the .abovementioned

quantified impacts on manufacturers. an

effect of a standard. as indicated in the

General Discussion section. would be to

require certain investments to be made

that might not otherwise have been

made. These required investments

would likely result in the forgoing of

certain other investments which would

be more beneficial to the manufacturer.

b. Life Cycle Cost and Net Present

Value. An anly.sis of the life cycle cost

results shQws that for water heaters, the

II106t efficient model studied had the

lowest life cycle cost. The reaults of the

sensitivity analysis regardins llB889

rates show that the minimum LeC fan6

at the most efficient model studied. The

minimum LeC Is always at a p:eater

•• M Indicated in the Gen«a.l Di8cuaaion section.

u well al the other prodUct-Ipect.fiC cn-.utons.

the.. Impecll are fu1I¥ accurate on1}' to the lD($ent

that the prototypicellirm did nol make Investments

in improvins appliance efficiency al part of Ita

hi.atorlcally indicated inveatJnenta. Improvements In

efficiency projected between 1975 and 1967.

however. likely reflect IUch hiltoricalinvaltmenlll

and Ihould reflect an order of magnitude decrease

in the impaetll projected by the FIM. Gas water

beaten inerea.. in efficiency 70 percent batween

1978 and 1987. whila electric wate heatets increase

In efficiency only 20 percent. lndicating more

hi.atorlcelinveltmentin gal than electric water

heater efficiency Improvementa. Because most firml

maldnt water heaten make both gal and electric .

watar heatara. however. the.. percentages do not

neceuarlly reflect the deere..e in PJM impactl for a

prototypical finn. Becauae it i.I projected that gal

water beater Mlel will decrea.. from a majority of

all water heater lala in 1978 to just a quarter aE

sales in ll19O. DOE believes a ltandard for water

bealen will have ita greateetlmpect on the

tDallufacture of electric weter heatara. where the

lealt investments were made. Thla leads DOE to

believe that the projected FIM impacta on the

M average" lia terms 01. shipment weighted efficiency

of Ita productal. prototypicallirm would be

decre.sed by a percentage closer to 20 percent than

70 percent. Of COW'M. to the extent that a firm wal not "average.M but had inveated little or no money

in efficiency impronment.a S;rlor to a ltandard beinll

impoIed. the PJM projecliooa would remain accurate.

efficiency than the analyzed levels. See

Economic Analysis Document. Table s10.

The net present value for each of the

effiCiency levels studied is:

L8YeI 1...__._ 5490 mllIion ,..,._,... S40 m,lI;an,

lJr,Iej 2 __•.• 1.15 billlon., 1ll mollan,

L8YeI 3 2,65 billion 180 ""Ilion.

If the level 3 net present value was

spread across the Nation. the benefits

would amount to about $1.10 per year

per household.

As noted above. DOE has doubts

concerning the base year (1978) implicit

discount rate for water heaters. Above it

was demonstrated how a change in that

implicit discount rate to a level

representative of products purchased in

similar situations would eliminate all

savings of gas and electricity

attributable to a standard. A similarly

dramatic result occurs to the net present

value if the base year implicit discotmt

rate for water heaters is reduced to that

of gas furnaces. For gas water heaters.

the NPV becomes zero. while for electric

water heaters the NPV becomes a

negative $40 million. Economic Anal}'sis

Document. Table 5-3.

Co Energy Savings. As indicated

above. the maximum savings

attributable to standards would be 2.15

Quads during the period 1987-2005.

d. Lessening of Utility or Performance

ofProducts. As indicated above. DOE

established a new class of products in

order to assure that the standards

analp;ed would not lessen the existing

utility or performance of water heaters.

As indicated in the general discussion.

however. there is no assurance that

future utility or performance of water

heaters would not be lessened by

standards.

e. Impact of Lessening Competition.

The determination of this factor must be

made by the Attorney General.

f. Need to Save·Energy. More energy

is used to power electric water heaters

, than gas water heaters. The maximu."Tl

amount of electricity that would be

saved by standards for water heaters

amounts to less than .3 percent of the

electricity used in the Nation during this

time period. Similarly, the maximum gas

savings attributable to standards for

water heaters would account for about

.06 percent of natural gas use during the

same period. eo In balancing the benefiIs

of a standard against its burdens. no

"Naturalsaa UI. durl1lg the period 1987-2005

it estimated to be about 380 Quads. This flgUr& is

derived from NEPP W.
 CAS-RM-78-110 COMMENT 09

14444 Federal Register / Vol. 47, No. 64 / Friday. April 2, 1982 / Proposed Rules

weight need be given to sav:ings of

energy that are so small

g. Other Factors. Above, under

impactl on manufactarera. the impactl

projected by the FIM em the prototypical

small manufacturer of water heaters

were presented. The negative impacts

on small manufacturers were projected

to be less than the negative impacts on

large and medium manufacturers. In the

General Discussion leCtion, however. It

was explained that DOE believes the

FIM understales the negative impact of

stand.an:UJ on small businesses relatiTe

to other size firms. Thus, DOE believes

that the negative impacts shown in the

FIM for the prototypical small

manufacturer of water beaten are

likewise understated.. DOE solicits

comments on this, especially from small

manufacturers of water beaten.

Conclusion

The benefits of a standard for water

heaters are that. compared to the base

case of no standard.&. it might save

energy and might have a positive net

present value. The seDaitivity analysis

indicates. however. that if the

anomalous base year implicit discount

rate for water heaters is too high. the

benefits attributable to standards could

be entirely elimina led.

The burdens of a standard are that (1)

It would adversely affect the financial

well-being of all firms making water

heaters. with potentially .erious impacta

on some size firms at certain levels; (2) It

could result in some lower iDcome

persons being precl¥ded from

purchasing new water heaters. if a

standard were .et at one of the higher

levels: (3) it could IMaen the utility or

performance of this product in the future

by creating a disincentive to the

development of energy-uaing new

features; and (4) manufacturers of water

heaters might forgo iDvestments that are

more beneficial to them.

The need of the Nation to save this

margin.al increment of electricity or

natural gal is not .ufficient to justify

any of the above burdens. . , In light of all the factors discussed

here and in the general discussion. on

balance. DOE believes that the burdens

of an efficiency standard for water

heatera outweigh the benefits.'I e. Room Air Conditioners.-1.

Selection q[Classes. "Room air

., At DOtlld aboTe. DOE crealed Mp&l'llte cJa58el1

of prod8cu for eIoIc:tric: tabietop, oiL and beet pump water bHllIn tbat DOt ~J' COIWdenrd

In aevaral at the maIy.... For the _ i.Ddi.c.atad

above. DOE UI reM1"rillg a detenninatloll .. to the

ecoDomic to-tlflcatlon for a ltarldanl for heal pump

Willer h.aten, AlJIo for lba reillOJIlI indicaled abo_

hOWft8r. DO£ bel:ieYea thet itI.UIdarda for the other two cLuau. whiclI _ IIDalllUllOQSlla

of fuel, woWd nol be ecooomic&lly justi5ed.

conditioner'" means a consumer product

which is powered by a single phase

electric current, which is an encased

assembly designed 81 a unit for

mounting in a window or through the

wall for the purpose of providing

delivery of conditioned air to an

enclosed .pace. which is not a

'"packaged terminal.air conditioner." ult

include. a prime .ource of refrigeration

and may Include a means for ventilating

and heating.

DOE w reviewed the comments

regarding reverse cycle unitt and agrees

that thele unitt have a distinct utility by

having the capability of providing heat.

The efficiency of a reverse cycle room

air conditioner it decreased because of

losses in efficiency llS30ciated with the

reversing valve. Therefore. DOE is

establishing a leperste clas. for these

units.

DOE has reviewed the comments

regarding units 8,fXX) Btu/hr and lesa

and agrees that certain units, such as

casement type room air conditioners..

bave a diltinct utility due to their

dimensions. Alao. 8,000 Bw/hr room air

conditioners are typically used in

bedrooma aa are 8,fXX) Btu/hr and less

units. Therefore, the upper limit of the

MOO Btu/hr and le58 clasa us been

raised to 8,000 Btu/br.

DOE has established two new classes

for those units with outdoor side louvers

and capacity greater than 8,fXX) Btu/hr

but leu than 2:O,fXX) Btu/hr. This revision

wu based upon DOE's review of

comments regarding the appropriateness

of using a single bueline unit to

represent the entire capacity range of

units greater than a.ooo Btu/br but less

than 20.000 Btu/hr. Since DOE has

revised the analysis to use the largest

capacity unit in each class u the

baseline unit. the potential

improvements in efficiency of the

smaller capacity units would be

underestimated if a single clan were

ut.ed for this capacity range. Therefore,

the two new clall88tl for room air

conditionera with outdoor side louvers

are those with a capacity greater than

8,fXX) Btu/br but leu than 14.fXX) Btu/br

and thOle with a capacity of 14.000 Bta/

hr or greater but less than 2:0.000 Bta/hr.

DOE haa established two separate

claISe. for thOle room air conditionera

without outdoor aide louvers. those with

a capacity of 8.000 Bta/br or less and

those with a capacity greater than 8,000

.. "P1Ic:I<apc:Ilar.IDI.lwll air c:aDdI1:1aaer" meeJII a

wall .1....... and a Mp4Z'8la UI>l!De&aed builder

JPldfied combinatlOll at bMliDs and coolln3

a_bG8a Intended for IIIOUIIliDs t.brousb the waI1.

It lncluda a prime IIOCQ of l'tItfrigeratlOIl. M'p&I'8b1e

oatdoor loorva:ra. forced ...ntilatlon. GId halial

availability b7 bllilden cboice of weter••team

or electricity.

Btu/hr. These claues were based upon

DOE's analysis of comments in which

DOE determined that. as in the case of

those room air conditioners with

outdoor side louvers. 8,000 Btr/hr or less

unit. are usually used in bedrooms and

that improvements in efficiency are

limited by cabinet sizes.

The product classes for the room air

conditione""category are listed in Table

3-5. infra.

2. Design Options Evaluated. Design

options employed in the analysis of the

room air conditioner consisted of

increased heat-transfer surface area.

sometimes accompanied by a decreased

compressor size. and fan motor

improvement or replacement where\'er

possible.

The heat exchanger surface area is

generally increased. In come cases. an

increase in the heat exchanger depth

increases the efficiency slightly;

however. this is partially offset by

increased air system losses. As the heattransfer surface Is increased the

compressor displacement must be

reduced to maintain the desired unit

capacity.

Along with the change in pump

displacement the manufacturer would

change the compressor motor as well.

Often, the reduced capacity compressor

for the highest efficiency design is

already available as the next logical

increment a compressor manufacturer

offers.

The design options and public

comment thereon are more fully

discussed in the Engineering Analysis

Document. Chapten and E-9.

3. Efficiency Levels Analyzed. Table

3-5 presents the efficiency levels

selected for analysis for 1987. Alternate

leveu were selected to generete 8 range

of impacts for analysis. With the

exception of class 1. level 4 corresponds

to the highest efficiency analyzed in the

engineering analysis. Levels 1. Z. and 3

C1:lrrespond to efficiencies lower than

that of level 4. While not all of these

levels were discreetly analyzed in the

engineering analysis. DOE ~lieves the

costs are proportional to the efficiency

levels considered.

The highest potential standard level

analysed for class 1 (small room air

conditioners with outdoor side louvers)

was less than the highest efficiency

attainable in the engineering analysis

because It would not be pouible to

achieve the highest efficiency for that

class within the existing appliances _

case. The cost reflected in the

engineering analysis to achieve the

highest efficiency would not necessarily

be accurate because the engineering

analysis assumed a metal cabinet.
 CAS-RM-78-110 COMMENT 09

Federal Relister I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules 14445

which would cost lesl to modify than

the plastic cabinet that many models in

this class han.

The levels considered in today's

analysis are senerally lower than those

considered for standards in the June 30

proposal. This reflects changes made in

the engineering analysis.

DOE doss not have sufficient data on the reverse cycle units to perform the

engineer:lng and economic analyses for

the class.

TABU! 3-5.-ALTERNATlVli EFF1cIeNcY l.EV£LS

FOA 1987 FOR ROOM AlA CoNDIT1ONEI'lS

(ENERGY EFFIcIENCY RATlO, EER. BnJI

WATT-HR)

l.ewla~ """""".... 1 2 3 • 1. Wtln QUIdocl< _ IouW<S;

capec:rty

_ 01 8.000 B1u/l.- or....._-----_._- 7•• 7.6 7.9 8.7

2- WI1h outdcOt _ 1olMIl'S;

C8Il8CitY grMlllt lhan 8.000 Btu/l.- buI _ lhan 1••000 ElIutl.- .___••____ 8.8 8.9 9.1 10.2 3. Wtln QUIdocl< _ 1OIMIrS;

c.pecilr 01 1•.000 etutl.- bUt

_lhan 20.000 B1u/l.-._ 7.8 7.a 8.1 9.7

4. Willi outdoor _ Io<Ne<a;

capacity 01 20.000 Blutl.- or

grea1eI'-.--._._-- 8.0 8.2 8.. 8.4 5. No outdoor _ Iowe<1; eapoo:;ty 01 8.000 etu!llr or lest 7.5 8.1 8.7 9.6 6. No outdcOt _ IcluWrI; eapec:rty 17M\« lhan 8,000

B1u/l.- 7.0 7.3 7.5 7.8

7. FI..,.. cyde (1) (1) P) P)

1 Not anafy.zlld.

Significance 01 Energy Savings

By the year 2005 the average

efficiency of new room air conditioners

developed in the absence of standards is

projected to be 95 percent of the

efficiency of new room air conditioners

developed with standards. See

Economic Analysis Document. Table 3-

12. this would represent a 13 percent

improveinent since 1978 in the efficiency

in new models without standards. Were

an efficiency standard imposed. the

ORNL Model predicts that over the

entire period 1987-2005 the following

additional savings would be attributable

to the standard: Levell~.24 Quads

Level 2-0.30 Quads

Level ~.34 Quads

Level 4-0.64 Quads.

Oil and Gas Savings

As indicated in the product-specific

dlscu..ion of central air conditioners.

air conditioners are more likely to be

found and to be heavily used in the

southern parts of the Nation. Air

conditioners are also more heavily used

in the summer than at other times of the

year. As is also discussed later.

however. differences in the source fuel

for generating electricity among ~egions

are generally not great enough to make

national average proportions

inappropriate figures to aS8ess the order

of magnitude impact on oil or electricity

savings attributable to standards for air

condition8l'll.u This is even more true of

room air conditioners than central air

conditioners, because room air

conditioners use only 20 percent of the

energy used by central air conditioners. see Economic Analysis Document. Table

3-15. and the maximum energy that

could be saved as a result of standards

for room air conditioners is less than 15

percent of the energy that might be

saved by standards for central air

conditioners.

Using the national average

proportions of oil and gas used to

generate electricity. the maximum

savings of oil and gas attributable to

standards would be 0.013 Quads of oil

and 0.046 Quads of gas over the period

1987-2005. 506 The larger figure is only

about 25 percent of the 4.400 barrels of

oil per day savings that the Congress

found to be an insignificant level of

savings.50 See supra.

Electricity Savings

The maximum savings attributable to

standards would constitute les8 than .1

percent of the electricity used in the

Nation.IIThis additional percent is so

small as to have no measurable effect

on the environment or the need for new generating capacity.

20 Percent Savings

Over the period 1987-2005 the highest

level of savings attributable to

standards would constitute only 8

percent of the energy that would have

been consumed by room air conditioners

in the absence of standards. See

Economic Analysis Document. Table 3-

18.

11M t. ~dunder cenlral air conditionei'll.

there are reasonl to believe that national average

proportiona of gaa used to generate electricity might

be more lnaccurate. Because DOE doel not have

any balll for projectiO'lll of future proportion.

except on • nal10Gai beau.. bQW1lver, a national

average t. uaed for Pi aa walL Becaue available

data lndicatel gaa ia • blaher proportion of the

aDt!rgy uaed to generate electriaty In the lummer

and oili••Iowa' p_tage. DOE baa lncreaaed

the projected 8IlIII1a1 natiOGai .verage proportion by

17 percent for gu aad dec:reaaed tha proje<:ted

proportion for oil by 18 percentln .Iaeuing 18v!.ng.

for ltandarda on air conditionen. See in/ro.

'"TId. aaaumes thet 011 con.al1lUtel U5 percent . and ga. 7.% percent of the energy uaed to generate

electricity onr thi1I time period. The oil percentage

II the average of the projected proportiona for the

yean 1990 and 1995, decreaaed by 19 percenL The

sa' percentage t. the average of the projected

proportionl for the yeara1990 and 1995. increased

by 17 pen:enL See supra.

..Four thousand and four bundred banels of oil

per day equal .18 Quade over 19 years. IIElectricity uaqe over the period 1987-2005 il

estimated to be about 700 Quads. See supra.

Conclusion

On the basis of the above. DOE

believes that standards for room air

conditioners would not result in a

significant conservation of energy. 51

Economic Justification

a. Economic Impact on Manufacturers

and Consumers. The per unit increased

cost to a manufacturer to meet the level

4 efficiency for the most prevalent class

of room air conditioner-the below 8000

Btu/hr with outdoor side louvers. with

44 percent of the market-is a mere

$6.13. or less than 5 percent. However.

all the rest of the classes of room air

conditioners, making up 56 percent of

the market. have significant increased

first costs. ranging from 15 to 50 percent

increases. Also. it is noteworthy that

medium-sized manufacturers have

increased costs 15 to 20 percent higher

than the large firms. Engineering

Analysis Document. Table 9.16 and

Table 9.17.

The Increased price to the consumer

at a level 4 standard reflects the same

trend. with the most prevalent class of

room air conditioner increasing in price

only $18. The price increases of all the

other classes. however. are significant.

with the next two most prevalent

classes (8-14 and 14-20 thousand Btu!

hr. with outdoor side louvers) having

price increases of 25 percent. and the

currently least expensive class having

the largest percent increase. over 45

percent.5& See Engineering Analysis

Document. Table 9.17.

At lower standard levels the

increased first costs and prices are

substantially reduced. For example. at

level 3 the price increases for the second

and third most prevalent classes and the

least expensiv.e class are all less than 10

percent Id. DOE believes that these

increased prices will result in some

..Although DOE created a separate class of

producta for revel'lle cycle room air conditionei'll

that haa not been specifically considered in the

angineering analysis. Life Cycle Cost analysis. or

FIM Bnalysil. the class of reverse cycle room air

conditionera il lncluded In the product type room

ait conditionera For purposes of the ORNL Model.

which determined energy savings. Accordingly.

DOE believes that the conclusion that a standard

would not result In a significant conservation of

energy can be applied to the entire product type.

..Tl!ese prices to conaumers are the prices

reflected In the engineering analysis only for

products made by large manufacturel'll. The

engineering analysis lndicates higher prices for the

producta made by mediwn-size manufacturers.

because of their bigber costs. The economic

analysis. bowavat'. lndicatel that the large

manufacturera are the price leadel'llin the lndustry.

Therefore. medium-size manufacturera will not be

able to obtain the higher price reflected For their

producL buriN,tead will have to Forgo the

difference.
 CAS-RM-78-110 COMMENT 09

14446 Federal R.~t8r I Vol. 47. No. 64 I Friday. April 2, 1982 I Proposed Rules

lower income households forgoing room

air conditioner purchases.

The FIM predicts that at level 4 a

prototypical medimn-lized manufacturer

of room air conditioners would have a

Z5 percent increased business risk and a

large manufacturer would have • 10

percent increased business risk

compared to the hese case without

standards. At level 3 the medium-sized

manufac:turer has a 10 percent increased

businell riJJk. EcoDomic Analyais

Document. Table A-4-1. The sensitivity

analysis indicates that buainesa risk is

highly leDSitive to manticipated

revenue reductions. For example. if

shipments decrease 15 percent from the

anticipated level. the effects of a level 3

standard (the only level tested in the

sell.llitivity analysis) would be to

increase business riak to 4.5 percent for

the medium-size manufacturer and to 35

percent for the large manufacturer.

Economic Analysis Document. Table 5-

14.

The FIM also indicates that by the

year 1991 (the last year of analysis)

profitability deteriorates for all sizes of

fums at all standards levels analyzed.

For example. at level 4, the mediurn-size

fum has a 47 percent decrease in

profitability compared to the base case

with no standards. and a small fum has

a 27 percent decrease. Economic

Analysis Document. Table A-4-7. At all

standards levels, the debt/equity ratio

of all sizes of firms deteriorates. For the

meciium-.ize fum the deterioration is

extreme. Economic Analysis Document.

Table A-4-&.II

b. Life Cycle Cost andNet Present

Value. A standard set at level 4 would

require efficiencies for four of the six

product classes at a level higher than

the average consumer's Lee minimum.

II iIIdlc.ated i:D the GeDeral DiIc:uHioa IIIC1loD.

these Impactl are fully accurata oalJ to the ex1eDt

that the prototypica11itm did not make investmenta

in improvins appUanoe eftldenc:y a. pa.rt of ita

historically indicated investmenta. 0therwiM. not

all of the inveslmeDt iIIdlca1ed by the en8ineeriDg

analyaia would be required to be tMde ill order to

produceappliancaa to llleet the required .tancIard

level. DOE beJi,evu llIat a me.a.ltrllDlCIt 01 the

incre....d abiplDCnt weighted efflc:ieDq of a product

between 1117ll-1ll87 will bes.r an order of mqnltud4J

relation to tha deauHd invatmal:lt required 01 an

average Iitm to _t a .1aIId.ard leva!. MOI'lIOVer.

DOE beIlavu that the de<:.reued lDwetmeDt

requiremal1twould Ulr.e1y baY. a limiIar ClI'dlll' of

magnitude affed on the FIM'. pl'OjeeWd iIIlp.<:ll

attributabla to a&aDdarda. lD the _ oll'DOlD alr

conditiOllln. the ORNL Wodal iIldlI:a... that the

ahipment weltbllld d!ldaacy will iIICN_ about 22

plIrcaI1t betw_ 1m and Ul87 in the a.Dee 01

any standard. CoaMqu4tlti)'. DOE t.IIave. that the

nega live lmpacta actu.aIly attrib.l.lbla to IW>darda

would be aimoat fov-fiftha 01 tboIe projeded by !be

FIM. 'l'his oonc1wllou. however. appliea only to tha

"average." prototypical firm. TIle nepttve impecta

.uffered by a Iitm that had made limillld or I\lO

Investment. in Imp.roved prod1Id efficieI>I:y WO<I1d

.tiIl approach or be thOle reflected by !be rn.L

One would be 10 high as to result in an

increase in life cycle cost compared to

the 1978 average model of that class.

Level 4 for one clan-tbe largest

capacity room air conditioner with

outdoor side louvers-is set at the LeC

minimum for that class. For the most

prevalent class of room air conditioner,

level 4 it slightly below the LeC

minimum.

At level 3. four of the classes are at

their LCC minimmn. and two are below

it. Moreover. for one of the classes at

level 3 that is below the average

consumer's LCC minimum. the level is

the LeC minimum for consumers wh01le

usage is that likely to be found in the

northern parts of the Nation. III At levels

2 and 1 all standarda would be set well

below the Lee minima for all classes.

The net present value of standards for

room air conditioners increases with the

stringency of the standard, from $420

million to $730 million over the period

1987-2020. Spread over the Nation's 80

million households, this would equate to

at most less than 27 cents per household

per year.

c. Energy Savings. AI indicated

above, the maximum savings

attributable to standards would be 0.64

Quads of electricity.

d. Lessening of Utility or Performance

ofProducts. AB indicated above. DOE

established new classes of products in

order to assure that the standards

analyzed would not lessen the existing

utility or performance of room air

conditioners. A.lindicated in the

General Diacua.ion section. however,

there is no assurance that future utility

or performance of room air conditioners

would not be les.ened aa a result of

disincentives caused by standards to

investments in energy-using new

features.

e. Impact ofLessening Competition.

The determination of this factor must be

made by the Attomey General.

f. Need To Save Energy. As is also

indicated in the product-specific

discuaaion of central air-oonditioners.

the greater part of the additional energy

saved by standarda on air conditioners

will be concentrated in certain parts of

the Nation and will be concentrated

during sununer peak load periods for

utilities. AI. is al.o indicated in the

discussion of central air conditioners.

while peak load saving. are more

valuable to utilities than normal load

savings. the nature of the peak load and

its relative cost are highly regional in

'"Thi.I cla._l4-20 thouaand 8t:II/IIr 1rith outdoor

.ide Ioun~tha cmIy clue 01I'0OIII air

conditioner whOM LCC IlIiIIimIDD ia dtffaroeDt at

lower t.baD average -all. s.tIl!.caDota.ic A.IWIly.is

Document. Table 5-41.

character. Thus. although savings of

electricity associated ·with air

conditioners are potentially more

valuable than other forms of electricity

savings. the need for those savings is

more regionally specific than is the case

for other electricity savings.

g. Other Factors. Above, under

impacts on manufacturers. the impacts

projected by the FIM on the prototypical

small manufacturer of room air

conditioners were presented. Except

with respect to reduced profitability

with standards. the impacts were not

significant. In the General Discussion

section, however, it was explained that

DOE believes the FIM understates the

negative impact of standards on small

businesses relative to other size

businesses. Thus, DOE believes that the

negative impacts shown in the FIM for

the prototypical small manufacturer of

room air conditioners are understa ted

relative to the impacts reflected for

medium-size fums. DOE solicits

comments on this. especially from small

manufacturers of room air conditioners.

Conclusion

The benefits of a standard for room

air conditioners are, compared to the

baae case of no .tandards. that it would

save energy and have a positive net

present value. These benefits. however,

are small in amount even at the strictest

standard level. The benefits become less

!It 10wer.1evels of mandated efficiency.

The burdell.ll of any standard for room

air conditioners are: (1) It will likely

preclude some lower income persons

from purchasing new room air

conditioners; (2) It will have a negative

impact on manufacturers' profitability

and d~bt/equity ratio. especially

harmful to medium-.ize manufacturers.

but DOE believes the negative impact on

small businesses is understated relative

to other size firms; (3) it might lessen the

utility or performance of future room air

conditioners; and (4) it may require

manufacturers to forgo more beneficial

investments.

At level 3. and especially at level 4. all

of the above burdell.ll are increased. In

addition. at level 4: The efficiency

required for four of the six classes of

room air conditioner is higher than the

average consumer's LeC minimum;

medium-size and large manufacturers

suffer an Increase in businen risk of Z5

and 10 percent. te8pectively; and the

costs to manufacturers and the prices to

consumers of five of the six classes of

product increase from 15 to 50 percent.

At level 3: The Increased business risk

for a medium-size fum attributable to

the standard would be 10 percent. which
 CAS-RM-78-110 COMMENT 09

Federal Registef I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules 14447

would increase to 45 percent if

shipmentJ decreased by 15 percent.

The need to laYe the e'D81'8Y that

would be saved by a natiema1 stalIdard

far room air CODditiaDerl is man!

regional than national in nature.

In light of all the facton di.scuased

here and iJl the Gae.ra.I DiM:useion

sec&n. 0.11 ba1aDce. DOE believe. that

the bW'dena of an efficiency ltandard for

room air c:cnditioners outweigh the

benefits."

f. Home Heating Equipment (Nat

Including Furnaces). The Department of

Energy is not proposing a rule with

respect to the prodnct home heating

equipment (not including furnaces)

(hereafter referred to as "home heating

equipment"). At the present time, there

is no test procedure applicable to

unvented oil or gas home heating

equipment. Thus, a standard would be

precluded for this clau, even though it

probably is the largut growi.ng class in

the product type. Moreover, it does not

appear likely that it would be

technologically feasible to improve the

efficiency of electric resistance bome

heating equipment for the same reasons

described with respect to electric

furnaces, see infra. Finally. DOE intends

to propose modifications to the existing

test procedures relating to vented home

heating equipment in light of their

burden on manufacturers as weD as

concerns raised With respe<;t to the

failure of the existing procedure to

measure the effects of thermal stack

dampen on energy efficiency.

In light of the above. roE believes it

would be prematufe to propo.e any rule

at the present time with regard to home

heating equipment.

g./Citc.heD Il.tulgu and OYens.-1.

Selection ofCiotJse& This product type

includes cosiswner products that are

used u the major household cooking

appliance. They are designed to cook or

to heat different types of food using gas

or electricity. Electricity may be used for

resistance or microwave heating. The

product type includes ho:ri.ztl!1tal cooking

surfaces and either conventional or

microwave ovena or' combinations of

these product clanes"

Nine clallS" of kitchen ranges and oven. ,are specified by DOE. These

product classes are distinguished by: (1)

The kind of ene1'8Y uaed for cooldng, (2)

tile functioll. (3) the types of oven

cleaning system and (oil tJtility features.

Product classification. are established

for applianca that use different energy

soarces. These energy aources are gas '

and electric. Tb.ree product classes are baaed on the function of the appliance.

Ovel1l have a different inteud.ed

hmctian than cooJc::iDg tapl. The diffenmt

method ued in transferring beat to the

food results in the c:.ooldng top being

inherently more efficient; thus. separate

product classes are established. A

separate product class is provided for

microwave ovens because these ovens

provide a particular utility to coa.sumers

and are inherently more efficient than

conventional electric oven&.

The type of oven cleaning system is a

performance-related feature that affects

utility. The three types of oven cleaning

systems are the standard. the

continUOWl cleaning. and the selfcleaning system. The standard. or noncleaning. system requires CODlRID1er

effort for cleaning the own and uses no

electricity. The continuoWJ cleaning

system is a catalytic process where

grease ilJ soaked upon to the oven

surface coated with an oxidizing

catalyst. The self-cleaning system is a

pyrolytic process where grease is

oxidized during a spedal aeU'-c!esning

cycle. These ovena have added

insulation becaWle they operate at

higher temperatures d.urins the cleaning

cycle than fOf cookin3. Even though the

coDiinuous cleaning oven hal greater

utility than the standard 0YeD. one

product clus is established for both

continuous cleaning and standard ovens

because both types of ovens tend to use

the same amounts of energy. Many

consumers prefer the self-cleaning oven.

As the self-cleaning oven uses

ele?ridty during the cl..eaning cycle and

is better insulated. its energy

consumption iI difl'erent from the

standard and continuous clea.ni.Bg

ovens. Since the self-cleaning oven

provides a utility to the consumer, a

separate product claas for this oven is

'establiahed.

Gas ranges and ovens with pUot lights

provide unique utility since they can be

used in homes without the need to

provide electric: service to the range and

oven. HOW1!"n!!', ranges and anns with

pilot lights are 1,,88 energy efficient than . identical products with electronic:

ignition. DOE recognUed the utility of

pUot lighta in situations where an

electric outlet ia not located near the

l'8J1IIL As a result, gas ranges aDd ovens

have been partitioned into da.ses with

and without electric power supplied.

The nine prod~ct c1allles for kitchen

ranges and ovens established by DOE are listed at Table 3-7. infra.

2. Design Options Evaluated. The

s~ific design options analyzed were:

(1) Impraved 1:D.sulation. Denser

fiberglasa insulation is used to reduce

lOsses. Increased insulation thickness

wal not considered a viable option as it

requires a reduction in cavity size and a

corresponding reduction in consumer

utility.

(2) Reduced Vent Size. Vent rate in

standard ovena is reduced to the rate of

self-cleaning ovens by eitlHlr reducing

the vent tube size or adding a baffle.

(3) Reduced Conduction Losses.

Standard oven suspension has been

upgraded to the level of self-cleaning

ovens. This includes modifications at

the door including additional thermal

brea.k. an improved gasket and a

modified inner panel.

(4) Improved Contact Conductance.

This applies to sheath-type electrical

resistance cooking tops. Their efficiency

is improved by designing them to

maintain better thermal contact with

cooking utensils.

The design options and public

comment thereto are more fully

discussed in the Engin.ee.riIlg Analysis

Document. Chapters ~7 and E-7.

DOE has determined t:lu\t it is not

technologically feasible to establish an

energy efficiency standard for

microwave ovens and electric cook tops.

3. Efficiency Levels Analyzed. Table

3-7 presents the efficiency levels

selected for analysis for 1987. Alternate

levels were selected to generate a range

of impacts for anallo'llis. The initial level

selected for gas and electric ovens. level

4, corresponds to the highest efficiency

level considered in the engineering

analysis. It was felt that manufacturers

could produce products at this

efficiency, 8.nd these products would not

have any safety or reliability problems.

Levels 1, 2 and 3 corresPQnd to

efficiencies lower than that of level 4.

Whlle these levela were not all

discreetly analyzed in the engineering

analysis, DOE believes the costs are

proportional to the efficiency levels

considered. The initial level selected for

gu cook tops. level 3, corresPQnds to

the efficiency of the engineering

analysis's buelioe unit. Engineering

Analysis Document. Table 7.1. Thus, the

highest level analyzed as a possible

standard for gas cook topa would not

involve any "improvements." The levels

considered in today's analysis are

generally lower than those considered

for standards in the June 30 proposal.

This reflects changes made in the

engineering analysis.
 CAS-RM-78-110 COMMENT 09

14448 Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

TABLE 3-7.-ALTERNAl'IVe EFFICIENCY Uv£1.S

FOR 1987 FOR KITCHEN RANGES AND OvENs

(ENERGY FActOR, EF, PERCENT)

Significance ofEnergy Savings

Were an energy efficiency standard

imposed. the ORNLModel projects that over the entire periods 1987-2005 the

savings attributable to a standard would

be:

-N.turaI ... uuse _ the period 1987-2005 i.

eltlmated to be .bout 380 Quade. SH ,upro.

"Wh.U. th... IIvlDp exceed the 4.400 btmll per

d.y level thet baa ben CODlidered inlllgnlfu:an1. ,tit!

• upra. .1 noted in the Ccneral Dilcuaalon ..etlon

there it DO indication that.any excel' of 40400

blU'Tell per dAly .bauld be conlidenld .Ignlflcant.

The.. l.vlDp are well below the 10.000 ba:rellper

day level that DOE bellave. may be 'ignlflcant.

b. Life Cycle Cost and Net Present

Value. At the only two levels of

efficiency that would save electricity,

the standard would be set higher than .

the average consumer's LCC minimum.

Therefore, a standard at this level would

penalize the average and below average

consumers by banning their optimal

oven from the market. The net present

value attributable to standards for

electric ranges and ovens is zero.

At the two levels of efficiency that

would save gas (levels 3 and 4), the

.standards for gas ovens would be set

higher than the average consumer's Lee

minimum. Therefore, a standard at these

levels would penalize the average and

below average consumers by banning

their optimal oven from the market. For

some classes of.oven. the life cycle cost

is increased by standards from the 1978

average. The net present value

attributable to a standard for gas ranges

and ovens a(either level 3 of 4 is

negative. This demonstrates that

consumers as a whole would suffer

economically from imposition of a

standard.

Co Energy Savings. As indicated

above, the maximum electricity savings

over the period 1987-2005 attributable to

a standard for ranges and ovens is 0.04

Quads, and the maximum gas savings

over that time is 0.28 Quads.

d. Lessening ofUtility or Performance

ofPrrxiucts. The classes established by

DOE were intended to assure that the

stand'ards analyzed would not lessen

the existing utility or performance of

ranges and ovens. As indicated in the

General Discussion section, however,

there is no assurance that future utility

or performance of ranges an~ ovens

would not be lessened as a result of

disincentives caused by standards to

investments in energy-using new

features.

e. Impact of Lessening Competition.

The determination of this factor must be

made by the Attorney General.

f. Need to Save Energy. The electricity

that might be saved by standards for

ranges and ovens is minimal. The gas

that might be saved is less than .08

percent of the natural gas used during

the period 1987-2005. In balancing the

benefits of a standard against its

burdens, no weight need be given to

savings of energy that are so small.

g. Other Factors. Beca.use no FIM

analysis was made with respect to

ranges and ovens, DOE is unable to

assess the impact of possible standards

for ranges and ovens on small

manufacturers.

..E1ect:rIdty 1Wl8I dUring the period 1961-200S is

.Itimetad to be .bout 100 QuadL See BUpro.

IITheae prien to COI1BlIIDfIn are the price.

rellected In the eqineeli.lli ana.lY'~ only for

producta madAI by !arlJe DWlufacturers. The

tmgiJleerins an.IYlit Indlcata. higher price. for the

producta madAI by medlWll-BiJ:e manufacturers.

because of their hlsher co.ta. The. economic

analy.i.. however. IDdlcalel that the large

manuf.ctw'ln'I are the price leaders in tha IDduatry.

Tharefore. medlll!ll-liu DWluf.cturers will not be

able to obtain the hlsher price reflected for their .

produet, but iDltead will bave to fOJ'110 the

dlIference.

percent of the electricity used during the

period of the savings.M

Co 2D Percent Savings. Over the period

1987-2005 the greatest savings of

electricity attributable to standards for

electric ranges and ovens is less than one percent of the electricity used for

ranges and ovens during that period.

Savings of gas attributable to standards

for gas ranges and ovens are less than

10 percent atlhe gas used in gas ranges/

and ovens during the same period. See

Economic Analysis Document. Table 3-

18. -

Conclusion

On the basis of the above, DOE

believes that energy efficiency

standards for ranges and ovens would

not save significant amounts of energy.

Economic Justification

a. Impacts on Manufacturers and

Consumers. The per unit increased cost

to a manufacturer to meet a standard at

the highest efficiency level ranges from a high of $12.31 for a medium-sized

manufacturer of gas ranges without a power cord to a low of $3.71 for a large

manufacturer ofself-cleaning electric ovens. Engineering Analysis Document.

Table 7.14. The increased price to the consumer ranges from $26.1:10 for a gas oven without a power cord to $8.80 for a self-cleaning electric oven. Engineering

Analysis Document. Table 7.15. The

price of the most prevalent productstandard electric ovens-increases 11.5

percent. The price of the most prevalent

gas oven increases less than 5 percent.61

Because ORNL Model trial runs indicated little or no energy savings

associated with ranges and ovens. DOE

did not perform an FIM analysis for this

product.

In addition to the above mentioned

quantified impacts on manufacturers, an effect of a standard as indicated in the

General Discussion section would be to

require certain investments to be made

that might not otherwise have been

made. These required investments

would likel}' result in the forgoing of

certain other investments which would

be more beneficial to the manufacturer.

o

o 0..22

0.2S

P!ocalCt _ t.-. anatyzed

1 2 3 • 1. ~_.._._____. , • • • 2. ElIlctnc llOCll<in9 lDP____ • l l .l 3. Elec1nc _ ...______ 12.1 13.0 13.3 13.8 .. e-....... MII-";.__. 11.1 12.0 12.3 12.8 50 G.- -.0 .. _ -.;c

_ClIO'" 22 S. -- G.- COGIOnl/ 1IlP. ..., -.;c _ ccn1...-___._. "5 50 56.5 t-- 1. G.- -.. __ WIlhoul ...,. lric_CIIO"'-____. 3.1 U 3.1 3.8 .. G.- -..-a. _ -.;c _ carel.-

4.1 5.0 5.3 5.S t. Gd ....... MII-";___ 4.ll U 5.2 5.3

1-ll.02 . .

~2-ll.04

L_ 3-(0.24) ...- ~.33) • • .•__

As may be seen. the projected effect of a standard for electric ovens at levels 3 or .4 would be to decrease energy savings

from what they would have been in the

absence of standards. a. Oil and Gas Savings. The maximum

gas savings attributable to a standard0.28 Quada-over the period 1987-2005

equals 6884 barrels per day of oil. This

represents less than .08 percent of the

national use of natural gas over the same period of time. a At level 3 the

savings attributable to a standard-o.2Z

Quada-over the period 1987-2005

equals 5409 barrels per day of oil.U This

represents less than .06 percent of the

national use of natural gas over the same period. At levels 1 and 2 the

savings are only of electricity, and they are so small that the amounts of oil and

gas that would be indirectly saved

would be minuscule.

b. Electricity Savings. At levels 3 and

4 no electricity is saved by a standard.

The maximum electricity that could be

saved by a standard would be 0.04

Quada at level 2. This is less than .006
 CAS-RM-78-110 COMMENT 09

FecJ..al RePter I Vol. 47, No. M , Friday, April 2. 1S8Z I Proposed Rules 14449

Conclusilm

The benefita of a standard are.

compared tc the base case of'no

standards, that it would save energy.

The dttctrfcllll!ftef'lT sawd, l1oweYef',

would be miniaeuJe. The gse ..Ted _

would be • -aII1DO'lIIrt.

The burdens of a .tandard aN thaf: (1)

Tha uet pI'1IlIeDt 'ftl1ua ia eitblr %C'O OC'

JIe8llti....; (2) ill--to save ftWIY the

standU'da W'OI:Id almDst alw:ay1 haw to

be Nt WsI-rthan 1tl. life, c:yde c:wt

miDimUDI .for the a'ftfqB camurae:o; (3)

for s~ c::lu8es of poodud. the life

cycle cost of an appliance meeting the

standard would actually increase from

the 1978 average life cycle coR for that

clasa; (4) the futwe utility 01'

performance ofrange. cmd 0Ye.J!;& might

be lB••e:ued: ad (5) mauufac:turel:s of

ranges and ovens might forgo

investmentll that are Dlonl beJwfici&J to

them. _

The need of the Natioa to aave thia

marginal increment of gu or e.1edricity

is not sufficient to jastify any of the

above burdena. /

In light of all the factors discus8ed

here and in the General D:iac:ussion

sectiem. em. balal'lC8, DOE beliews that

the burdena of an effi.cUmq standard for

range. and emma octweigh the benefit&.

h. Central Air ConditiOl'len..-1.

Selection ofClasses. A central air

conditioDe!' ia a coaaumer pn:x:hu:t that

la powered b,- amp pha.e electric

current. baa a capadty under 65.000 Btu/

hr and is DOt C'OIItaiDed ill a fm'nace'

whose rated c:aplldtJ is above 25O,.OClO

Btu/hr. Eilht cla.ae. have been establ:.i.shed

for central iUr ccoditiollers. These

classes are cliatiDguished by different

performance featurn IlDd capac:ities

which affect bath efliciAmcy and utility.

Central air CODditimIen are divided

between lIDitI which provide only·

cooling and units which may also

provide heating (heat pumps).

From a utility ltaDdpoint. fOO1' product

cluses for cooliDg cm.1r were identified.

They are:

(1) Split ayI~only39.000 Btu/hr and below.

(2) Single packaged units-<:ooling

only-39.0r0Bta/br md below.

(3) Split oaJ,-

aboft 39,000 BtsJhr.

(4) Single packaged unita--<:ooling

anly--abo.... 39,AlOO Dba/hr. _

A separate dan wall established

because ofreatrldiona In desip caused

by havi:Ds the fu.ma,ce liD the lI&IXle

eDdOAl:'e:

(5) SinPt pecIcqe. aD ;rear with pI

furnace.

Tha da.1eI for tboM UDita which may

also provide heAItiag are:

(I) Air '0III'ClI. a:p1It qPem. hat

Air llGUl:'Ca...plIchp...at ' pump.

(8) Air aoan:e. apCiI..,.tea -tiDI

onlJ beat pump. . 2. Desip C>pti«16B~lJesiIn

opticml empkJred iD the of

central air coaditioDerlt CG&1SiIrt gf the

fonowin&:

f1}lDcreanD Conda6er aDI1

Evapora/1:N' HetJtExchontierSurfot;4

A.recr. Both the CODduael' ad

evapcntor are assumed to be c:gpper

tube and ahtmiDum c:ornapted fi.n.. The

frontal area of tbe beat UChanger and

ita depth (row.) are i:Dcreued. lncreaaed

fan power to maiDt&iJl the proper air

velocity through the heat uc1lanler was

included.lDcreaaed heat exchanger size

also reqll.iml m1arged chusia and

cabinet construetiou. Evaporator s:Ue

was limited by available apace within

the home. Evaporator coil &ret for unitll

below 39,000 Btu/br wu limited to five

square feet. Units above 39.000 Btu/hr

had a maximum evaporator fa<:e area of

.even square feet. In addition. the

overall evaporator heat transfer c0-

efficient was limited 10 as to proYide

adequate late1It capacity.

(2} Comp.restU1r Size. In

caojunction with number (t) aboTe, the

compre.sor ai:ze must be redtIa!d in

order to maintain the bueJine unit rated

capacity. This was accompHahed by

reducing tIwt piatoa. .

(3) Change Faa/Motor. Aa the fan

power requi:remmt:a change with

pressure and fiowrate, the. faD motor was cl:l.a!IgIed. .

(4) 1.Dcr«1HdFanlMoIDr EffJCiertcy.

60-81 percent pes:maneDt aplit capacitor

IDOton W1lrl rep1aA:ed with 70perceat

pe1'tJS&Dllllt IpIit capac::i:tor .otors.

The design options and pv.bllc

comment thereon are more fully

discussed in !:be F.JI@h..mtg Anal:ysia

Document. Chapters D-a and E-8. , 3. Efficiency LevebJ AnaJyz.ed. Table

3-8 pre.entll the efficienq lefta

.elected for lI.JUl1yl:Ls far 19&1. Alternate

leTeI. were .elected to geurate a range

of impacts for ~.The izsitiallnel

selected. level 4. corresponds to the

highest eftidency level coalidered in the .

engiDeeriag malyIi.. II wu felt that

JIW1ufactarenJ coald produce procmc:ta

at this efficiency, and these products

would not have any safety or reliability

)II"O!Xem.I. La."d. 1, 2, and $ correspond

to effictencie. lower thaD that oflnel4.

While not aD ofthelle leve1a were

dilcreetly IIDa1y&ed iD the

aDalylill, DOE beti.,..,. the c:osts an

proportioaaJ to tha effideacy levels

couf.dered.

The l.evea coaaidered. ill today',

analysis are senera1ly lower than those

considered for .tandards in the June 30

proposal. ThiI reflects cha:l:18es made in

the engiDeel':lDf a::s.alym.

DOE~ DOt line au:ffi'deDt data on

heat pa:rpc UId pechge central

air cmlditiOQ&l1l. all year with ps

furnace. to perl'orm the e~ngand

ecooomil: lID&1yMS for theM c~

TAAE ~T'ENlATM Emc:lecY

FCIA 1117 Rlft CSC'nw. NA COfClI'T'l()NERS

($£A.SOHAL &eMrr ER:1clec'f RATIO,

ST1!ER. 8'f'U!WATT-HouR1

~......,...

I"!'oduCI cIaa 1 2 3 " l lhu/IW' Split fYlI*lI, _ b8Icw-.0I'i¥. 39,OQO

'.1 '.5 U 10.4

2- Single .......... oNr. • .IIOCl ...... _b8Icw __ Il3 U Hl.4 11.2

3. Split -.. .... CP'* 39.000 8Wnw____.__. 9.1 '.5 U 10.2

...==:"'-..~~ .. 9.1 La ~.4 1U

5. fI.nW:e Sln\lIe ~...__•____ II ,.. - gu•__. Pl (.) P) PI e. Nt -. opIll .,-. -. _._-------_._- I') I') I') (.)

7. Nt-.lingle pecIoIQe.

pump--_. (') I') 1') ") .. ,.. ......... _ ..... -.ne

0lYy - ------ P) P) PI r)

Signi[i&atlC8 cifEnergy Saving3

By the year ZOOS the weighted average

efficiency of new central air

conditioners that would be developed

without standards is projected to be

over 90 percent of the efficiency of new

central air conditioners developed with

standards. Economic ADalysis

Document. Table 3-12. Thla would

repreaent an increase in the efficiency of

central air conditioners of over 20

percent since 1978 without standards. ld.

Were an efficiency standard imposed at

one of the following levela, the ORNL

Model projectll that over the entire

period 1987-2005 the following savings

would be attributable to a standard:

Level 1-2.13 Quads.

Level 2-2.90 Quads.

Level 3-3.66 Quads.

Level 4-4.52 Quads.

There are. however. certain aspects of

the ORNL ModeL which are pecn.liar to

or have their greatest impact on central

air conditioners. that DOE beliens may

result ill theM savings being overstated.

First, the ORNL Model estimates real

income growth at %.4 percent annually,

which is higher thaD the recent past and

80me forecuts. Since the purchase or

central.if conditioners is more sensitive

to income estimates than the purchase

of other ccm!lJ'ed products, an

overestimate of real income would

produce an crrerestlmate of new sales

and. thaa. an overntimate of energy

savings.
 CAS-RM-78-110 COMMENT 09

14450 Federal Register I Vol. 47. No. 64 / Friday. April 2. 1982 / Proposed Rules

Second. the oRNL Model does not

distinguish between central air .

conditioners and heat pumps that . provide central cooling in ita.analysis.

By counting and calculating these heat

pumps as cental air conditioners that

could be subject to the standard levels

analyzed. whereas in fact they would

not be. the model likely overestimates

the savings for central air conditioners

that would be attributable to standards.

The amount of overestimation would

depend on the share of tl!e central

cooling market that heat pumps would

occupy during the period 1987-2005.

DOE does not currently have that

information. As of 1978, heat pumps

appeared to have approximately 13

percent of the central cooling market.

Third. the ORNL Model overestimates

the saturation level of central air

conditioners in the multi·family hou!ling

market. That is. the estimated saturation

level for multi.family homes includes

central heating or cooling systems that

are not specific to. a household unit but

service the entire building. See

Economic Analysis Doc:u.rrient. Table E17. In many. if not most. of these cases

the central air cooling system would not

be a "consumer product" as defined in

section 321(a)(1) of the Act. Including

such systems in the ORNL analysis

would result in the savings attributable

to standard. being overestimated.

Again. however. DOE does not have

data to determine the magnitude of this

overestimatio~ . Because DOE does not have data or a

quantitative basis to determine the

amount of overestimation that may

exist. for purposes of this proposed

rulemaldng the analysis has proceeded

based upon the savings projected by the

ORNL Model. DOE solicits comments

that would provide a basis for

determining the amount of

overestimation that the.ORNL Model

may make with respect to energy

savings attributable to standards for

central air conditioners.

Oil and Gas Savings

It may be presumed that central air

conditioners are more likely found and

more heavily used in the southern parts

of the United States. It may also be

presumed that central air conditioners

are used more heavily in the. summer than at other time.s of the year.

The oil and gas proportions of the sources for the generation of electricity

differ substantially among states. and to

a lesser degree depending on the season

of year. In the sun belt. however. with

the exception of California and Florida,

the states generally use less than the

national average proportion of oll to

generate electricity. Thus. there is not a

clear regional bias. Moreover. DOE does

not have specific information relating to

future years upon which DOE could

reasonably rely in order to find a

substitute for a national average.

Consequently. DOE believes a national

average proportion is an appropriate measure of the oil that would be saved

as a result of electricity savings

attributable to a standard for air

conditioners. Seasonally. however. there

is a clear decrease both absolutely and

proportionally in the use of oil for the

generation of electricity in the summer

compared to the winter or the average

for the entire year. See generally

Electric Power Monthly. In 1981 summer

use of oil was 81 percent of the yearly

average use. [d. Therefore. DOE is

de.ereasing the otherwise projected

national average use by 19 percent in

order to determine the oil savings that

might result from electricity savings

attributable to a standard for air:.

conditioners. With these assumptions

and limitations. at each of the levels. the

oil savings over the period 1987-2005

would be:

Level1-Q.05 Quads or 1226 Bpd.

Level 2-0.06 Quadfl or 1471 Bpd.

Level 3-0.08 Quads or 1961 Bpd.

Level ~.10 Quads or 2451 Bpd. ill

The situation with respect to natural

gas is somewhat·different. Use of gas as a source for generating electricity in the

summer increases hoth absolutely and

in its proportion of total ele<:trical

generation. This increase would appear

to be primarily the result of air

conditioning load. Of course, only a

portion of this air conditioning load is

caused by residential central or room air

conditioners. Most of this increase in

gas use. however. is concentrated in four

states-Texaa. Oklahoma. Louisiana.

and California. Lacking more specific

information for future years. however.

DOE is forced to use national average

proportions of gas as a source of

electrical generation to assess possible

indirect gas savings from electricity

lIavlngs. To take account of the apparent

increased proportion of gas used for air

conditioning load. however. DOE is

increasing by 17 percent the otherwise

projected gas proportion. S1 With these

assumptions and limitations. the gas

savings over the period 1987-2005 would

be: .

-In theM computationa. DOE use. U5 pereant aI

the utional aV1!l'8llII proportion. whicb iI S1 percent

of the averap of 1990 and 1995'. projected

propol'tlou. Si!tl.upra. .

"In thne cromputationa. DOE UMa 7..z percent aa

the utioa.a1 average proportion which il1-17 timea

the lWerage or 1990 and 1l195·. projected

proportiona. Si!tlIUpra. The 17 percent inere..e ia

derived &om the percent increased ute of natural

gal for the s-ration of electricity in the aummer of

1961 compared to the year', averap.

Level1-Q.15 Quads or 3677 Bpd

(equivalent).

Level 2-0.21 Quads or 5148 Bpd

(equivalent).

Level 3-0.26 Quads or 6373 Bpd

(equivalent).

Level ~.33 Quads or 8089 Bpd

(equivalent).

Based upon the above information.

DOE believes that the savings of oil and

gas that would be attributable to a

standard for central air conditioners

would not be sufficient to constitute a significant conservation of energy. 68

Electricity Savings

The saving attributable to standards

for central air conditioners predicted by

the ORNL Model are savings in

electricity. The highest level of savings.

however. is less than .7 percent of

national electricity usuage over the

period 1987-2005.&II Even if the southern

portions of the nation benefited

disproportionately from this savings

because of greater central air

conditioner use there. such a level of

savings is not sufficiently large when

spread over almost half the nation and

its utilities to have a significant impact

on the environment or measurably affect

the need for new generating capacity.

20 Percent Savings

Over the period 1987-2005 the highest

level of savings attributable to

standards would constitute about 11

percent of the energy that would be

consumed by central air conditioners

over that period without standards. See

Economic Analysis Document. Table a18. Thus. even at the strictest standard

analyzed. a standard for central air

conditioners would not result in a

savings of 20 percent of the energy that

would be used by central air

conditioners without standards.

Conclusion

On the basis of the above. DOE

believes that a standard for central air

conditioners would not result in a

significant conservation of energy.

Economic Justification

a. Cost to Manufacturers and

Consumers.The per unit increased cost

to manufacturers to meet the highest

"While the ga. aavi.np at level. 2. 3. and 4 would

exceed the 4.400 barrela per day level that bas been

con.aidered insignificant. at noted in the general

diacuaaion the" iI no .UllIltlation that any excess over 4.400 barrela per day ill .lgnificanL The

maximum figure of 8Oll9 barreLt per day II Ie.. than

..z percent of petroleum Imporll and i. Ie.. than the

10.000 balTlll. per day that DOE would deem

.ignilicanL

-Electricity uaap over the period 1967-2005 la

estimated to be about 7tlO Quada. See supra.
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday. April 2. 1982 I Proposed Rules 14451

level of efficiency ranges from a low of

$261 for a large manufacturer making a large split system to a high of S400 for a

small manufacturer making a small

package system. Most classes of the

product have cost increases in excess of

$300 or over 50 percent to achieve the

highest level of efficiency. See

Engineering Analysis Document, Table

8.14 and Table 8.15.

The increased price to the consumer if a standard were set at the highest level

ranges from $716 for the large split

system to $989 for the small package

system. Most classes of product have

price increases in excess of $850 or 75

percent. The lowest percent increase in

price is 36 percent, for the most

expensive class. while the largest

absolute increase in price-$989-is for

the previously least expensive class. a 97 percent increase In price. 70 A

standard set at level 3 also would result

in substantial price increases. ranging

from $411 for a large split system to $524

for a large package system. The price

Increase for the lU!'!..all split system, with

62 percent of the market, is over S400 or

37 percent. At levels 2 and 1. the price

increases decline only slightly. See

Engineering Analysis Document. Table

8.15.

While lower income persons are the

least likely to purchase central air

conditioners today, a standard requiring

first cost increases of such a magnitude

would likely'price not only lower

income persons but many middle

income persons out of the market for

central air conditionerll.

Despite the large Increases in

manufacturers' costs the FlM predicts

only moderate impacts on central air

conditioner manufacturers. see Economic Analysis Document, § 4.5. A

prototypical medium-sized manufacturer

faces a 10 percent increased business

risk. See id.• Table 4-28. Profitability for

the prototypical large firm improves

very slightly: profitability for the

medium-size firm is reduced 10 percent.

with the prototypical small firm

suffering 10-15 percent declines In

profitability as the strigency of the

efficiency level increases. Id.• Table 4-

29.

The sensitivity analysis, however.

Indicates that business risk is extremely

.eMitive to unanticipated reductions in

-Thne prICl1l1 lu the CODIUIIIe1' ue only the

priCllll ndJected In the eIliiD"rlDi analyaia for

central air COlldillOllera made by large

The analyaia lDdlcalBll hisher prlcea

for produClImade by medlum-aile IIW1waeturen.

re1lectlntl thalr bJPer coata. 11Ie lICODOlIIic analyllia,

bowever. Indicatea thatlatge IIW1wac:turen ue ,nce leaden lu the Indultry; therefore. medium-aile

IIW1wac:turen will not be able to obtain the pricea

reflected for their produc:ta. but lDatead will have to

foJ:80 the difference.

revenues. For example. alii-percent

reduction in shipments from anticipated

levels escalates the increased business

risk attributable to a standard at level 3

(the only level tested in the sensitivity

analysis) for the prototypical large firm

from a to 30 percent, for the prototypical

medium-size firm from 10 to 60 percent,

and for the prototypical small firm from

5 to 20 percent. 71 See Economic Analysis

Document. Table 5-14.

Because of the substantial Investment

by manufacturers necessary to meet

standards. DOE believes there is a

substantiallikeV:hood that other

Investments by central air conditioner

manufacturers will be forgone,

Investments that might be more

beneficial to the manufacturer. DOE

solicits comments on this possible

impact of standards on manufacturers of

central air conditioners.

b. LJfe Cycle Cost and Net Present

Value. A standard let at level 4 would

require a level of efficiency that would

be too high from an LCC perspective.

Rather than being set at the LeC

minimum. level 4 is let at B higher

efficiency. ranging from 104-112 percent

of the LCC minimum level. For two of

the classes this results in an increase in

life cycle costs from the 1978 average

efficiency. Such a standard would

penalize the "average" central air

conditioner cons,umer for all classes by

banning his optimally efficient air . conditioner from the market, forcing him

to Incur unnecessarily high life cycle

costi!.

A standard .et at level 3 would equal

the LCC minimum for three of the four

classes of central air conditioners. The .fourth class would still be too efficient.

TJ ,.. indicated In the General D1l1ClUU1ion aectlon.

these impac:te ue fully ac:curete only to the extent

that the prototypic:alllzm-dld not malta Inveatmenta

In improYini appllance effldency aa part of ita

hlatorlc:ally Indicated lDvestmeDta. Otherwise. not

all Qf the Investment Indicated by the englDeerlD&

anaIyal8 would be required to be made lu order to produce appllancea to meet the required atandard

leveL DOE bell...es.that a measuremeIlt of the

luCreesed ablpment wel&bted effldllJlCy of a product

between 1978-1887 will bear an order of magnitude

relatloll to the dec:reesed IIrnatmlll1t required of &II

averll3tlfirm to meet a atandard level. Moreover.

DOE believ.. that tha dec:reaaed Investmlll1t

requlrem8Ilt would likely haw a aimilar order of

JDqIlltude effect OIl the FJ),f. projected impacta

attrlbuteble to atllIldarda. !II the cue of c:entral air

c:ondillooen. the ORNL Modal iIldlcatea that the

ablPlllllllt wel&bted .ffldlll1C1 wiJllDcrease about 22

perc:eut betwnn 1m and 1887 lu tha abaeIlce of

any atandard. Couaequantly. DOE bellevea that the

nesallve impaeta ac:tual1y attrlbuteble to ataDdarda

would likely be about four-flflha of t1loM projected

by the FlM. nu. c:oDduaion, however. appllea only

to the "averap" (!II terlII8 of the ahipment weishted

ef:fIdllJlCy of ita product), prototypic:al ftrm. The

Delallve impaeta aufiered bJ a firm that had made

IlmJted or DO !IlvestmeIlta 1Ilimproved product .mdenc:y would atill approach or be tbote refla<:ted

by the FIM.

at 105 percent of the LCC minimum. and.

therefore. even "average" consumers of

this class of central air conditioners

would have their optimal central air

conditioner banned. The

sensitivityanalysis. however. indicates

that persons with low usage rates (rates

that in fact may be average in the

northern part of the Nation) have a

different LeC minimum from persons at

the national average usage rate for two

classes of central air conditioners. See

Economic Analysis Document. Table 5-

9. The result of a IItandard set at level 3.

therefore. would be to ban the central

air conditioner in two classes of that

product that would be most economic

for large portions of the Nation and

large numbers of persons. These areas

and persons would be penalized by

having to pay unnecessarily high life

cycle costs for efficiencies they do not

need in those classes of central air

conditioners. One of the two classes

constitutes over 60 percent of the entire

central air conditioner market.

A standard set at level 2 would be

below the average consumer's LCC

minimum. for all classes. but still would

be higher than the LCC minimum of

persons In the northern part of the

Nation for the same two classes of

central air conditioners. Thus. while this

level would lessen the number of people

disadvantaged and lessen the dollar

disadvantage of those who remain

disadvantaged, by reducing the na tional

mandatory efficiency level. this level

would continue to place an unnecessary

burden on large portions of the central

air conditioner consumer population.

Levell is still lower but exhibits the

same characteristics as level 2. That is.

the minimum allowed efficiency for two

classes of central air conditioners

exceeds the LCC minimum for usage at a

rate that is average for large portions of

the Nation.-

The net present value for each of the

levels of efficiencies is:

Levell-$l.Z3 billion

Level 2-$1.27 billion

Lavel 3-$1.00 billion

Level 4-$.10 billion

Unlike almost every other product

analyzed. the net present value does not

Increase 8S the standard becomes more

strict, and the barely positive NPV at

level 4 Indicates that large numbers of

persons would suffer negative net

present values. While the maximum

NPV is relatively large in absolute tenns

compared to other products (although

.hared among the 60 million households

over the period involved it is less than

85 cents per year. per household). it

should be noted that the ratio between

the NPV and energy saved is the lowest
 CAS-RM-78-110 COMMENT 09

14452 Federal Register I Vol. 47,No. 64 I Friday, April 2. 1982 I Proposed Rules

of all the products with a positive NPV.

This means that it costs consumers more

to save equivalent amounts of energy

through standards on central air

conditioners than through standards on any other product. FInally. as noted In

the General Discussion section. merely

because the NPV Is poeitive does not

mean that all consume1'l obtain a

positive benefit compared to the nostandards case. Rather. as i. indicated

by the renlts of the LCC sensitivity

analy.is. the positive NPV for central air

conditioners is what remains of the

positive present velues enjoyed by some

consume1'l as a result ofstandards. after

subtracting the negative present values

suffered by othen.

Much of the above discussion

highlights the problems created by a

single national standard level when

usage and the relative optimal

efficiencies are highly regional in

character. In the June 30 proposal. this

led some commenters to suggest that

DOE adopt regional. rather than

na tional. standards. After a thorough

review of the Act, DOE has concluded

that the Act does not permit the

adoption of regional standards.

Moreover. as other commenters to the

June 30 proposal noted. there are

substantial practical problema

assocIated with regionalstandarda that

create other types of burdens.

c. Energy Savings. As indicated

above. the cumulative energy savings

attributable to standards for central air

conditioners during the period 1987-2005

are projected to be:

Level 1-2.13 Quads

Level Z-2.90 Quads

Level 3-3.66 Quads

Level 4-4.52 Quads

As noted above. there are elements of

the ORNL Model that lead DOE to

believe that these savings are likely

overestimated.

d. Lessening of Utility or Performance

ofProducts. As indicated In the General

Discussion section. DOE established

new classes of products in order to

e1lmina te any lessening of the existing

utility or performance of central air

conditioners. As was also indicated In

the General DisCU8sion section.

however, there i. no assurance that as a

result ofstandards disincentivet to

investment in new performa.nce or utility

features that might reduce efficiency

would not lessen the utility or

performance of future products. This is

especially true where manufacturers

will have already been required to make

large investments merely to comply with

standards.

e. Impact ofLe68ening Competition.

The determination of this factor muat be

made by the Attorney CeDeraL

f. Need toSavtf Energy. N indicated

In the General Discussion. generally the

relative need to lave electricity is lesl

than the need to lave oil and gas.

Moreover. while standards for central

air conditioners are projected to be able

to save a greater amount of energy than

a astandard for any other product. the

amount of electricity saved I. less than t

percent of the electricity used in the .

Nation.

There are two pecuJiari~es with

respect to central air conditioners that

affect these general considerations.

First. the greater part ofJhe energy

saved by standards will be concentrated

In certain parts of the Nation. rather

than spread more or less equally over

the whole Nation.U Second. air

conditioner u.ae is generally associated

with summer peak load for utilities.

Generally. savings of peak load energy

is more valuable to utilities because the

cost of generating Incremental amounts

of electricity at peak load is higher than

average COlts. Thus. there a greater

economic utility in saving peak-load

electricity (i.e•• that often used by air

conditioners) than in saving average

load electricity (i.e.. that which is

char"teristic of what is used by most

other electric products). Nevertheless.

the nature of the peak load and its

relative cost are highly regional in

character. Thus. although savings of

electricity associated with air

conditioners are potentially more

valuable than other forma of electricity

savings. the need for those savings

saved as a result of standards for

central air conditioners is even more

regionally specific than is the case

generally for electricity savings.

g. Other Factors. Above it was

Indicated that the FIM's projected

negative impacts on small

manufacturers were modest, except

where there was an unanticipated

shorfall in revenues. As noted in the

General Discussion section. however.

DOE believes that the FIM understates

the impact of standards on small

businesses relative to other size firms.

ThUs. it 1.1 possible that small businesses

might suffer severe impacts as a result

of the large investments that Itandards

for central air conditionen would

require. DOE solicits comments on these

views from small manufacturers of

central air conditioners. especially in

terms of what impacts on their business

they would foresee as a result of the

TO While IDt1I.llmtI:y .- WOG1d expect the ..vtnp IlD be __trated Ia tIM South. thra may no! be 10

beca....d~OIl die local eledrk:ity price.

IlIduced el8aIen<:y ~tlI_y

be conCllDtra~In die bigb 11NlJ'll1"l\lloDa. and \!HI

urinlla lIttribatable IlD mndude would not lnc:Iude

lIavinga that result from Free-market sctivity.

costs reflected in the engineering

anaylsis.

Conclusion

The benefits of a standard for central

air conditioners are that it would save

energy and would provide a positive net

present value.

The burdens of a standard for central

air conditioners are that (1) It would

have a negative impact on small and

medium-size fimis; (2) It would increase

the price of central air conditioners to

such an extent that large numbers of

persol1B might not be able to afford

them; (3) because of the size of the

investment required of a manufacturer

to meet a standard. it is likely that other

Investments that might be more

beneficial to the manufacturer would be

foregone; (4) at all standards levels.

large numbers of persol1B are

disadvantaged by having a national.

Federal minimum efficiency level set at

a level higher than is most beneficial for

them. requiring these persOI1B to pay a

higher than necessary life cycle cost; (5)

it might create a disincentive to the

development of energy-using new

features; and (6) it might have a

significant negative impact on small

businesses.

The need to save the energy that

would be saved by a national standard

for central air conditioners is more

regional than national in nature. That is.

standards would benefit certain regions

at the expense of other regiol1B.

In light of all the factors discussed

here and in the General Discussion. on

balance. DOE believes that burdens of

an efficiency standard for central air

conditioners outweigh the benefits. n

i. Furnaces-t. Selection ofClasses. A

"furnace" is defined as a device

designed to be the principal heating

source for the living space of a

~sidence. having a heat input rate

(accord.in8 to the established DOE test

procedures) less than 300.000 Btu/hr for

electric boilers and low pressure steam

or hot water boilers. or 225.000 Btu/hr

for forced-air central furnaces. gravity

central furnaces and electric central

furnaces.

.. N Indicated earlier. heat pumps. which

constitute Hveral clas..s of the product central air

conditioner. are aot included in this rulemalting.

Hence. the Nle pro~ today with respect to

central air condltionen does not apply to heat

pumps. Single package ID'ltta with S88 fumaC88 bave

aot been analyzed. HOW'lmlr. this product c1au is

included in the product central air condilion8l' for

pUJ"PO'lM of the ORNL Model. Accordingly. DOE

believea that the conclualon that s alandard would

not lIaYe a 8!gnjflcant amount DC eoergy is valid for

tIWt cia... Mon>oVl!t'. bee4use oC Ita amall energy use

and aevtnga. DOE believes the burden oC s standard

as this class oC product would outweigh its benefita.
 CAS-RM-78-110 COMMENT 09

Federal Register I VoL 47. No. 64 I Friday. April 2, 1982 I Proposed Rules 14453

Within this product type. a distinction

is made between "furnaces", when! the

heating medium is air. and "boilers"

where the hearing medium is water or

steam. Furnaces and boilers can be

electrically powered. gas-fired or oilfired.

Eleven classes of furnaces are specified by DOE. These classes are distinguished either by the type of fuel

consumed or by performance-related

features. which affect utility and

efficiency.

Basic models of furnaces are segregated according to whether they use electricity, gas. or oil. The energy

efficiencies of electric. gas. or oil

furnaces are inherently diffen!nt.

Electricity is con~erted to heat with 100

percent efficiency in a furnace using

electrical resistance heating. Both gas

and oil furnaces have efficiencies less

than 100 percent because of their flue

losses. Failure to establish separate

classes according to the type of fuel

used may result in the elimination of

models using a certain type of fuel.

One performance-related feature

which affects utility is the method of

heat distribution to the household.

Included in this product type are furnaces which distribute heat by either

low-pressure steam (15 psig or less

steam pressure) or honV'ater. The heattransfer process from the hot

combustion products to air is inherently

different from heat transfer to water or steam, leading to lower fuel use efficiences for furnaces. Furnaces and

boilers are separated into different

classes because of their inherently

different efficiencies. -

Forced-air furnaces offer the utility of

being suitable for use with central air

conditioners. central humidifiers, and

central air cleaners. Hot water or steam

boilers offer the utility of having a

distribution system which requires less

space than air distribution system. I.e.,

pipell required less space than air ducts.

Gas furnaces use air circulation

systems driven either by buoyancy

(gravity) or by a blower (forced air).

Gravity-type systf:lms offer the utility of

operating without an electrical

connection. The efficiency of gravity gas

furnace tends to be lower than the

efficiency of forced-air gas furnaces, so a separate class has been established

for gravity gas furnaces. A class of oil

furnaces using gravity to circulate hot

air is not specified because DOE is not aware of any such units distributed in commerce.

Another distinct performance-related

feature which affects utility is whether

the furnace is installed indoors or

outdoors.

Another performance-related feature

which affects utility is the horizontal

configuration of outdoor forced-air gas

furnaces. This horizontal configuration

has the utility of being uniquely

adaptable to attics and crawl spaces.

Such spaces Is considered an outdoor

installation in the DOE test procedures

because It is not in a conditioned space.

Since they are installed indoors in

unheated spaces, they must be insulated

but need not be weatherized. A separate

class of gas, outdoor, nonweatherproof.

horizontal furnaces Is proposed to

'prevent the possible elimination of this

type of configuration. Outdoor units.

either vertical or horizontal. with

weatherproof cabinets. have fewer size

constraints than the nonweatherproof.

horizontal units discussed above.

However, no significant difference in

efficiency is evident for weatherized.

horizontal units when compared to any

other outdoor unit. DOE has determined

that there exists no utility associated

with horizontal units when Installed

indoors. Thus. only outdoor.

nonweatherproof. horizontal gas

furnaces are identified as those having

justifiable reduced performance.

The separate classes specified by

DOE for furnaces are listed at Table 3-9.

infra·

2. Design Options Evaluated. The'

specific design options evaluated were:

(1) Increased Heat Exchanger Surface

Area. This design option involves

increasing the size of the heat exchanger

to improve heat recovery. It can be

utilized in both gas fired and oil fired

furnaces and bojIers.

(2) Intermittent Ignition Device (lID).

Intermittent ignition devices are used in

gas fired furnaces in place of pilots. The

DD's require !llectricaJ hook-up.

(3) Stack Damper. Stack dampers are

used to reduce losses during the standby

period. The stack damper is electrically

P9werad and wired into the control

system so that It opens prior to the firing

of the furnace or boiler and closes after

the firing period Is terminated.

(4) Power Burner orPower Vent. This

design option applies to gas-fired tmits.

It involves using a power blower on the

inlet or exit side of the unit to promote

flow of the combustion products through

the heat exchanger. This option permits

higher combustion efficiency and

reduced standby losses.

(5) Increased Insulation. On outdoor

units, jacket losses are reduced by

adding insulation. This design option

replaces existing insulation with a denser fiberglass having the same thickness as the original insulation.

The design options and public

comment the~on are more fully

discussed in the Engineering Analysis

Document. Chapters D-4 and E-4.

3. Efficiency Levels Analyzed. Table

3-9 presents the efficiency levels

selected for analysis for 1987. Alternate

levels wen! selected to generate a range

of impacts for analysis. The initial level

selected. Level 3. corresponds to the

highest efficiency level considered in the

engineering analysis. It was felt that

manufacturers could produce products

at this efficiency, and these products

would not have any safety or reliability

problems. Levels 1 and 2 correspond to

efficiencies lower than that of level 3.

While these levels wen! not discreetly

analyzed in the engineering analysis.

DOE believes the costs are proportional

to the efficiency levels consl~ered.

The levels considered in today's

analysis are generally the same as those

considered for standards in the June 30

proposal.

No energy efficiency levels were analyzed for gas gravity, gas boiler,

outdoor. and oil boiler, outdoor. classes

of furnaces because of the small

quantities being produced. No analysis

was conducted for electric furnaces

because they operate near 100 percent .

efficiency since all the electric energy is

transfernJd into the conditioned space.

Losses due to inefficient motors and

improvements achieved by added

insulation are taken into account

because the test procedures assume that

all standby losses are usable heat for

the dwelling. Thus. DOE believes that it

is not technologically feasible to

propose energy efficiency standards for

this class of furnaces.

TABLE 3-9.-ALTERNATlVE EFFICIENCY LEVELS

FOR 1987 FOR FURNACES (ANNUAL FUEL

UTtUZATlON EFFICIENCY, AFUE, PERCENT

LeYel analyzed

2 3

1. EIec:1r1c .•_ (ll (ll Pl 2. GM gnMIy (') Pl (') 3. Gas, _ •• 1ncIoor.••.___.•..__.. 76 79 61 4. Gas, _ •• outdoor. -.lIl- ""'-'llII_______. 59 66 74

5.Gu.Ion:«l .... outdoor._ltIIIn IlOIMU1MIPlDOI.________•• 71 74 76 e.. Gas boiler. 1ncIoor______••. 75 n 79

7. Gas bclijer, outdoor (ll (l) (l) e.. Oil. 1on:«l •• IncIoor.___._... 75 76 80 t. Oil. _ .... outdoor ___.__.. 73 76 7S 10. Oil boiIer.IncIoor.__•____• 7S 61 61 11. Oil boiler. outdoor .______.. (II (I) 1')

• NaI ..wolYzed.

Significance ofEnergy Savings

The ORNL Model predicts that by

1990 in the absence of any standards the

average new gas and oil furnaces will be as efficient as what the strictest

standard would require. Economic

Analysis Document. Table 3-12. This
 CAS-RM-78-110 COMMENT 09

14454 Federal Register I Vol. 47. N". 64 I Friday, April Z. 1982 I Proposed Rules

would represent a Z8 percent

improvement for gas furnaces and a 14

percent improvement for oU furnaces

compared to their 1978 efficiency levels.

Id.

Were an efficiency standard imposed.

the ORNL Model predicts that there

would be no .avings during the period

1987-2005 attributable to the standard.

Oil and COlI SaV'inp

There would be no oU and gu savings

attributable to a standard.

Electricity Saving$

No electricity is saved by the

imposition of standards at any of the

levels analyzed.

20Percent Savings

Zero percent savings would be

attributable to standa.rds.

Conclusion

On the basis of the above. DOE

believes that standarda for furnaces

would not result in a significant

conservation of energy. 74

Economic Justification

a. Economic Impacts on

Manufacturers and Consumers. Of the

seven classes of furnaces analyzed. gas

forced-air indoor furnaces, the least

expensive class of furnace, constitute

two-thirds of the market. The increased .

per unit cost to meet the lowest

efficiency level for such furnaces is over

$60 and to meet the highest level

efficiency is over $100. See Engineering

Analysis Document. Table 4.19.

The price to the consumer to purchase

the gas forced-air indoor furnace that

meets the lowest standard increases

$136. or over 30 percent. while the price

of a furnace meeting the highest

standard increases S220, or over 50

percent. Consequently, DOE believes

that the imposition of an efficiency

standard for furnaces would create a

significant threat to the ability of low

income.person. to purchue new furnaces. 1'& See Engineering Analysis

Document. Table 4.20.

..Although OOE CI'lHlted teP«I'Ite cla_ of

prvducu for ... gravity. p. boiler. oatdoor. aDd oil

boUer, outdoor. furucea that bave 1104 been

lpeci.fical1y ccmaldered ill the engInMriD& aulyaia. ute Cycle Coat aulyala. or F1M aulyail. the..

cl..... of furucn lJ'IIillcluded ill the product IJpe

for purpoeel of the ORNL ModeL which determlDed

tnersY aavi.agl. Accordingly, DOE believes thet the

c:oacluaioa thet a .aadMd wvuld Dot remit In a lignificant coaaervatiOll of -fllY ClUJ be applied to

the entire product type.

"These prien10 CllMUlDe" _1IMt prien

nrilected ill the maJ)'lU ooIy lw

produCU made by Iarp llWluUct1IJ'en. The

engineering analYli. indica lal highar price. for the

produell made by medJu:m-lilte manufecturen.

becau.. of thei.r high.. ca.ta. TIle ~c

The PIM predicts that a prototypical

medium-sized manufacturer would

suffer a 5 percent increase in business

risk at efficiency level. 2 and 3.

Economic Analysis. Table 4-Z8. Such a

percent increase is not considered

statistically significant II shipments

decrease 15 percent from a

manufacturer's anticipated level.

however, the effects of standards would

be to increue business risk to 20

percent for large firms. to 55 percent for

medium-sized firma. and to 10 percent

for .mall firms. See Id.. Table 5-14. The

FIM predicts that standards would

increase the profitability of the

prototypical large firm while decreasing

the profitability of the prototypical small

and medium-size firm. At the lowest

level of .tandards analyzed. compared

to the base case of no standards. the

medium and small manufacturer have

the saine or reduced profitability in each

year begi.nn.ing with the imposition of

standards, with the prototypical

medium-size manufacturer avera.g:ing a

36 percent decrease and the ama.ll

manufacturer averaging a 13 percent

decrease in profitability in the years

1988-1991, compared to a nQ-standards

case. See Economic Analysis Document.

Table A-4-6. At the lowest level

analyzed. a medium-size manufacturer's

debt/equity ratio deteriorates by.35

percent and a small firm's by almoat 30

percent. See Id., Table A-4-9.,.

b. Life Cycle Cost andNet Preunt

Value. An analysis of the life cycle coat

results ahoWllthat for furnaces the most

atW:r1ia. bowenr, lDdlcata thai the large

JDa.11Ufactu.rera are the price leaden ill the iDdualry.

Tbare{0I'II. medlum-li.lte manufacturen will aol be

able to obtain the hlgher price renected for thelt

product, but IDIlnd will line In torso the

difference.

..AI. IDdIeatedill the GeIlillfll1 Discualon le<:tion,

these impacu are fully accurate only to tha extent

thet the p,mtot'yplcal firm did not make iDveatmentl

ill improvtns appU_ efticlency as pert of ill

hiatmcall~todicatedlDvntmenta. Otherwtae. DOt

all oi the illve.tment Iodieated by the enginMrinc

atWYlil would uvw 10 be made ill order to produce

appliances to meet the required efflct8l1cyleveL

DOE bell_ thet a meuurelll4lt11 of the Increaaed

ahlpment weighted efilde:ncy ola product

1915 lIIId 11181 will bear IJI order oi mqnitude

relation to the dec:reaaed iIIveatm8l1t requited of IJI

averqa llrm to meet a .aadard level ),{oreover.

DOS beu.re. thet the decreased tona1meat

requfred wvaJd IlbIy bew a IIimllar CII"der of

mqaitude effect OQ the FIM'I projected lm.pactl

attributable to ltandarda. In the caM of fumacu.

because the ORNL Model prvjecta that the ahlpment

weiPted efflcllIIICJ' ill tlIe abeenCII of any ItAlDdard

will l'Ilach the bicl-t ItUdard Ieni by 1lll11, there

should be 11IO Ileptlw Impact OD the ..n .....• (iD

terms of the IiI.lpmenl weighted affldency of III

product). prototyplca1llrm altrlb1ltable to ltaDdarda.

Of c:o_ If a pc1ic1I.I&l' llrm bad falIad to lDveat III

Improved prod1llct eficle:ncy, ncIl tbalill product'.

lbipment weighted efliciency bacI DDt 10 improved.

then that firm would Ilkely lufFer negatfYelmpaell

al luggeated In tIte FIM.

eficient model studied had the lowest

life cycle cost.

The NPV analysis indicates that if a standard were adopted for gas furnaces

at any level studied. there would be a

negative net present value to the Nation

ranging from S20 million to $30 million

over the period 1967-2028. At a level 3

standard for oU furnaces. the analysis

indicates that there would be a positive

net present value of $20 million. DOE

believes these figures are so small as to

be not statistically significant.

Co Energy Savings. Ar. indicated

above. there would be zero energy

savings resulting from standards.

d. Less.ening ofUtility or Performance

ofProducts. As indicated above. DOE

established classes of products in order

to assure that the standards analyzed

would not lessen the existing utility or

performance of furnaces. As indicated in

the general discussion. however, there is

no assurance that future utility or

performance of furnaces would not be

lessened by standards. .

e. Impact ofLessening Competition.

The determination of this factor must be

made by the Attomey General.

f. Need to Save Energy, There are no

savings of energy associated with

standards for furnaces.

g. Other Factors. As indicated In the

General Di8CU8sion section. DOE

believes the impacts on small

businesses are underestimated relative

to other size firms. Consequently, DOE

believes the negative impacts described

above with respect to small businesses

are understated relative to the impacts

described for other size firms.

Conclusion

There are no benefits resulting from a

standard being set at any of the levels

analyzed.

The burdens of a standard are that: (1)

It could adversely affect the financial

well-being of some medium and small

size furnace manufacturers; (2) it would

adversely affect lower income

consumers by increasing purchase

prices of new models; (3) it could lessen

the utility or performance of this product

in the future by creating a disincentive

to the development of energy-using new

features: and (4) manufacturers of

fumaces might forego investments that

are more beneficial to them.

In light of all the factors discussed

here and in the General Discussion

section. 011 balance. DOE believes that

the burdens of an efficiency standard for

furnaces outweigh the benefits. a

fa Althoqh DOE a'Nted separate cl"l" of

producll fot 881 gravity••al boiler. outdoor. and oil

boiler. outdoor. fumaeel that have not been

Continued
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules 14455

327{b)(3) of the Ad. a Slate government may

peUtIoD tile 5eI::nlter)' I'IIq'IIeItiftl a nde that a State

or local &OoI1'lD' effideacy I1aDda.rd GC' om.

reqw.r.-t with twpeet 10 ...." efficiency or energy _ of a co.,.....;1 product. not be superae<led

by the Federal rule. However, a loc:al sovemment

may not submit ncb a petition.

(2) any energy efficiency standa.rds or other

requirement with respect to energy efficiency

or energy uae of • covered product.

After a review of thia provision and

other portions of the Act the DOE has

concluded that the supersession of the

State regulation oCCUl'B on the effective

date of the Federal final rule, and DOE

haa so provided in proposed 1430.33.

The effective date of the rule for the

eight covered products is proposed to

occur generally 180 days after the date

of the final rule's publication 1n the

Federal Register. See section 325(i)(4) of

the Act. However, if a State government

petitions the DOE for a rulemaldng

under section 327(b)(3) of the Act, the

DOE proposes to delay the effective

date of the rule for that State for the

covered products involved in the

proceeding until the Secretary reaches a

final determination on the petition. See

proposed 1430.34. This will ensure that

addition. section 327(b)(1) of the Act.

permits any person subject to a State or

local efficiency standard, including

standards for products not covered in

this proceeding, to petition the

Department to ptellQ"ibe a rule that

supersed.. the State or local standard.

Previously DOE had established at 10

CFR Part 430, Subpart D, procedural

regulations for petitions by entities that

wished to have rul.. prescribed to

supersede a State or local appliance

efficiency standard. 42 FR S4264

(October 5, 1977). The DOE later

proposed to amend the rule to include a

State petition for a rule that a State or

local energy efficiency standard not be

preempted. 45 FR 43976, at 44026 Uune

30, 1980). The June 30 proposal included

burdensome requirements for

information. a discretionary hearing

procedure and a petition for

reconsideration process that was

mandatory for exhaustion of

administration remedies. As discussed

below, the rule proposed today

simplifies many of the provaions set

forth in the June 30 proposal.

As part of thia proposed rulemaking,

the DOE has reviewed the question of

the time of preemption of State or local

efficiency standards by the Federal rule.

Section 327(a)(2) of the Act provides

that:

'I'lu. part supersedes any State regulation

insofar as such State regulation may now or

hereafter provide forIV. Preemption of Stale R~tions

As part of today's proposal, DOE is

proposing to establish varying effective

dates for its proposed rule not to impose

any energy efficiency standards for the

eight covered products. DOE is also

settiD& forth regulations to implement

section 327(b){3) of the Act. and to

revise the regulations that currently

implement section 327(b)(1) of the ~t.

These proposed regulations are reqwred

to give both States (section 327(b)(3))

and other peI'llOns (section 327(b)(1)) an

opportunity to petition the agency for a

review of State or local efficiency

standards or o~er requirements with

respect to energy efficiency or energy

use of a covered product (the

standards). In the past. some State and

local governments have implemented

appliance energy efficiency standards. If

DOE adopts the rule proposed today not

to adopt energy efficiency standards

with regard to each of the eight

products, any State arid local appliance

efficiency standards that may cover

those products would be superseded

pursuant to section 327(a)(2) of the Act.

Any State or local appliance efficiency

standard with respect to these products

adopted after the effective date of this

rule also would be preempted. 111

State governments may, however,

peititon the Department pursuant to

section 327(b)(3) of the Act· either'to

maintain or to implement State or local

energy efficiency standards for

particular covered products.·o In

ipedllcally <lCImidered In the llll8!neerin8 analysia,

Life Cycle Cost lll.1ylIis. or FIM malylia. DOE

believes tbat t.be amount of mergy that could be

saved by a sta.udard for lheM cluaea La 8X1ame1y

sman. aft aupra. Couequeotly, DOE believes tbat

such saviIigs. compared to lhe llkely burdelUl lhat

would relult from a staDdard impoeed OIl but tbnIe

cI..... of a prodlICt. aDd those cia-. bein8

smaller in numbers of units. dollan of aa.les. or energy used. indicate that the burdeoa of a sllU1dard

for the.. cla...s outweigh their benefill.

Tilt Ie DOE"s opinion that the preemption of State

and local eoero tflideDcy ate.ndarda by oectioa

327(a)(2) of the Ad would !nchKIe t.be pnemptioa of

Stete or local sta.udarda tbat adopted appUan<:e

effidency requirllmentl inclnded In the AmericaD

Society of Heatins- Refrl3"n tlon. aDd AIr

Conditioning Engineers (ASHRAE) Standard flO.

Similarly. Metion 321(a)(2) oftba Ad would

fUPllrI8de a State or loca1all'ideacy sta.udard

reqnireiDg Intermlttentlpltion dPtcea on gsa buminC appU__It abould be DOted.lIowever.

that thia ..-.u ~ptlOD of State and local

energy efBciomc:y IIlanda.rda would occur even if

DOE adopted energy el!ideocy staDdarda ror

covered produc:tll, If lhe State and local nandardll were not tIM __ u \be Feden.l1Itandard. DOE

lnvita commeatII 011 the typet of Stete aDd loc:al

standa.rd. wh.Ic.b ID8Y be preempted by lDday's

propoeeci rule aDd the \mpecll 01 ncb preemption.

..Under aec:tIoIIll of the Ad. "'State" meana "a

Slate. !he Dlmct of CoIWDbia. Pucto R.Ico. GC' any

territory or ~iOll of the IJDIted Stetea."

Section 321{d) 01 tba Ad. defiDea the term "State

regulation" u "a IlIw or regulation of a State 01'

politiClllllUbd:mlriOll thereof." Thus. mder MCtloft

• • • .. ..

no State or local appliance efficiency

standards will be terminated until the

State has had a full opportunity to

present its case to the agency.

. The procedural rules set forth in Part

430, Subpart D. however, will be

effective 30 days after their publication

in final form in the Federal R~ster.

These procedural nLles, unlike the rules

proposed today that prescribe no

Federal energy standard for the eight

covered products. are not constrained

by the provisions of section 325(i)(4).

That provision prohibits rules

establishing energy efficiency standards

from taking effect less than 180 days

from their publication in the Federal

Register. Procedural rules, such as those

set forth in proposed Subpart D, must

only adhere to the provision set forth in

the Administrative Procedure Act, 5

U.S.c. 553(d).

The Department will review State

petitions to maintain existing or

implement new State regulations

pursuant to the three statutory

standards set forth in section 327(b)(3)

of the Act The Department must make

two findings: that there is a significant

State or local interest to justify the State

regulation; and that the State regulation

contains a more stringent energy

efficiency standard than the Federal

standard. However, no rule may be

prescribed if the Department finds that

the State regulation would unduly

burden interstate commerce. 11

The Department must. of course, treat

such petitions as requests for

rulemaking and must adhere to general

rulemaking procedures. The DOE must

conduct an environmental review

pursuant to the National Environmental

Policy Act of1969, 42 U.S.c. 4321, to

determine whether or not the adoption

of the proposed rule will be a major

Federal action having a significant

impact on the quality of the

environment. The DOE must also

consider the impact of the proposed

regulation on small busine8lles pursuant

to the Regulatory Flexibility Act, 5

U,S.c. 601 at seq. Finally, under

Executive Order 12291 (46 FR 1393,

February 19, 1981), the DOE would be

required to prepare a regulatory impact

analysis if DOE determines that the

propsed rule is a major rule, as that tenn

is defined in the Order. These reviews.

however. in most cases will likely result

in findings of no major impact.

n Similarly. In rapondlng to • manufacturer's

petition pu1"lIuaDt to section 327(b)(1) of the Act. th<!

Department mal' pI'IMCrlbe a rule pl'ftlnpting in

wbole or in pert a Stelll regulation if it finds no

si3nificant 511111 or local interest sumcientto jl1.ltify

such e regulation and that the State regulation

unduly burdens intel'ltBIII commerce. See § 430.47.
 CAS-RM-78-110 COMMENT 09

14456 Federal Register I VoL 47, No. 64 I Friday, April 2, 1982 I Proposed Rules

In its petition for rulemaking, a State

must present information which would

appear on its face to show that the

State's regulation is more stringent than

the Federal standard and that there is a significant State o~ local interest in

issuance of the State's regulation. The

State is not required to provide

information concerni.l:lg the State

regulation's impact upon inteI'lltate

commerce. A peI'llon opposing the

State's petition should present . information which would,appear on its

face to show that the State's proposed

rule would place an undue burden on inteI'lltate commerce. Such a peI'llon may

also present information to rebut the

State', initial submission. Information

presented by both the State and

opposing peI'llons would be open for

comment and rebuttal

Similarly, in a petition submitted

under section 327(b)(1) of the Act, the

petitioner must provide information

which would appear on its face to show

that there is no State or local interest in

the contested regulation and that the

State's rule unduly burdens inteI'lltate commerce. This presentation would be

subject to comment and rebuttal by any

parties supporting or opposing the

petition.

In review petitions submitted under

sections 327(b)(1) and (b)(3) of the Act,

the DOE will evaluate and analyze all

factual and legal materials presented by

the petitioneI'll and all other interested or opposing parties. It is DOE's intention

in applying section 327 to determine

whether a State standard unduly

burdena inteI'lltate commerce by

balancing ths slgni.ficant State interest

in having a standard with the burden on

inteI'lltate commerce created by the

standard. In assessing the burdens of a

standard. DOE will be guided by the

principles of E.O. 12291 and the

Regulatory Flexibility Act.

Because of the requirement in section

327(b)(3) that DOE find a significant

State or local interest in a State effficent

standard before DOE can issue a rule

exempting the State standard

preemption. it does not appear possible

to issue a rule tht would make a blanket

deterination for all States with respect

. to the same efficiency standard.

It should be noted that the

Department has proposed to review only

Slate regulations that are appliance

efficiency standards. The Department is

proposing to not review State or local

regulations that have only a peripheral

effect on the energy efficiency of a

covered product. The statute at section

327(a)(2) clearly provides that only those

regulations which provide for "any

ene1'8Y standard or otherrequirement

with respect to energy efficiency or

energy use of a covered product" will be

supeI'lleded. (Emphasis added). Thus, a

rule that established the energy

efficiency of a particular appliance

would be supeI'lleded by the Federal rule

and would be subject to review upon the

petition of the State, A rule whose

purpose is other than energy efficiency

such as a law on fire safety, would not

appear to be preempted by the Federal

rule, even if it has a secondary and

incidental effect of improving the

efficiency of a covered product.

In addition to the specific proposed

provisions discussed above. Subpart d

includes the following provisions.

Proposed § 430.42 sets forth filing

requirements for petitions submitted

under section 327(b)(1) and (b)(3) of the

Act. This rule Includes the requirement

.as F 43O.42(b)9) that each Slate serve all

affected manufactureI'll of covered

products with its petition. Such a requirement, however, could be onerous

if many firms manufacture a particular

covered product. The DOE seeks

comments on whether such a

requirement is needed to assure that all

affected parties receive notice of a

State's petition. or whether the burden

of the requirement on the State would

outweigh its benefits to the affected

firms. The DOE proposes, as an

alternative to proposed § 43O.42(b)(2). to

deem service on affected manufacturers

to be accomplished by a notice of the

petition published in the Federal

Register. The DOE requests comments

from manufactureI'll concerning the

feasibility of such a proposal.

Proposed § 430.43 indicates the notice

requirements for each petition. Proposed

§ 430,44 includes the requirements for

both States and those subject to a State

regulation with respect to their

submission of petitions for supeI'llession.

As previously noted. these requirements

have been significantly reduced from the

June 30 proposal. Instead of the complex

economic analysis required by the June

30 proposal today's proposal requires

only information needed to satisfy the

statutory criteria set forth at section 327

of the Act. Hence. this proposed rule is

substantially easier for a petitioner to

utilize.

Sectin 430.45 proposes to allow DOE

to consolidate any or all matters at issue

In two or more proceedings pending

before the agency. Thus. for example.

petitions submitted by both a Slate

wishing to retain or make effective a

standard. and a manufacturer wishing to

have that standard supeI'lleded could be

considered in a single proceeding.

Section 430.46 requires the Secretary to

hold public hearings to afford interested

parties an opportunity to present their .

views as required by section 336{a)(1) of

the Act.

As discussed above. § 430.47 proposes

the criteria for evaluating petitions. as

set forth in section 327(b)(1) and

327(b)(3) of the Act.

Section 430.48 proposes procedures

for the disposition of petitions, similar to

those proposed on June 30. The DOE has

proposed at I 430.49 to make the

Secretary's decision on a petition final

agency action for purposes of judicial

review,

As this brief description indicates. the

procedural rules proposed today are

both simpler and much less burdensome

than those proposed on June 30, 1980.

V. Environmental. Regulatory Impact.

and Small Entity Impact Reviews

The Department bas reviewed today's

proposed action in accordance with the

Dep.artment's obUgations under:

• The National Environmental Policy

Act of 1969 (NEPA) (42 U.S.C. 4321 et

Beq.). the Council on Environmental

Quality'regulations implementing the

procedural provisions of NEPA (40 CFR

Part 1500 et seq.) and the Department's

own NEPA regulations (10 CPR Part

1021):

• Executive Order 12291 (46 FR 13193,

February 19. 1981) which pertains to

agency review of the impact of Federal

regulations: and

• The Regulatory Flexibility Act (5

U.S.C. 601 et Beq.) which requires. in

part. that an agency prepare an initial

regulatory flexibility analysis for any

proposed rule unless it determines that

the rule will not have a "significant

. economic impact on a substantial

number of small entities," In the event

that such an analysis is not required for

a particular rule. the agency must

publish a certification and explanation

of that determination in the Federal

Register.

The Department's proposed action

does not contemplate the imposition of

Federal energy efficiency standards on

any of the products which are the

subject of today's notice. The rule

would, moreover. supersede any

substantive State standards for these

products unless the Department, upon

State petition. issued a rule which

permitted a State to have an energy

efficiency standard or standards.

Therefore, the Department believes

that implementation of today's proposal

would result in few, if any, differential

impacts upon the environment or the

economy. Including the economic affairs

of "small entities" as that term is used in

the Regulatory Flexibility Act.

The Department, moreover, expects to

consider relevant environmental and
 CAS-RM-78-110 COMMENT 09

Federal Resister I Vol. 47. No. 64 I Friday. April 2, 1982 I Proposed Rules 14457

(

,

economic factors in taking action on

petition. to preserve or supersede State

standard. meier section 327{b) of the

Act. Conti.tent with this. the

Department today is propoliJIi that

petitioo8J'll provide relevant . environmental and economic

information. Interested personl would

also have an opportunity to provide

information on these matters and to

comment on petitioners' submil8ions, in

the context of the proposed rulema.kings

initiated by petitions.

A. Environmental Review

The Department proposes to establish no energy efficiency standards for 8

types of consumer products, pursuant to

its authority under section 325 of the act.

Further, by operation of the Act. all

State energy efficiency standards would

be preempted except those for which

States petition and receive from the

Department; a rule which exempts them

in accordance with section 327(b)(3) of

the Act. Thus, the proposed ac:tion

potentially haa three elements: (1) No

establishment of energy efficiency

standards In those States that do not now have standards in effect (2)

Federal approval of certain State

standards (i.e., exemption from Federal

preemption); and (3) Federal

"supersession" of certain existing State

standards.

The first element clearly would not be

environmentally significant since it is

simply a continuation of the status quo.

As for the second element. in all easel

where DOE Is requested to approve .•

State standards DOE will conduct an appropriate NEPA review on a ease-bycase basis. It il anticipated that the vast

majority of these easel will be

adequately covered by the

Environmental Assessment (EA) (DOE!

EA-o(13) and the Addendum to the EA

which the Department prepared and

issued on the impact of setting and

implemented energy efficiency

standards for all 13 type. of consumer

product. Identified in section 322(a)(1)-

(13) of the Act. A FIndiJliof No

Significant Impact and Notice of

Availability of that EA were published

with the June 30 proposed rule for

minimum energy efficiency .tandards

for eight of the productl (45 FR 44086).

Copi81 of that Environmental

AsseHment and addendum may be

obtained from the add.rea indicated at

the beginning of thiI notice.

It is j:Joaaib1e that a State with existing

standards will not leek exemption from

preemption or will be denied an

exemption from preemption. The

Department has reviewed this potential

third element of the proposal and

determined on the basi. of information

contained In the above-mentioned EA

that any impacts auociated with

preempting existing State standards

would not have signiflcant

environmental impactl.

The Department has accordingly

determiDed that the propoeed action

would not be • major Federal action

significantly effecting the quality of the

human environment and that an

Envi.r!Jnmental Impact Statement ia not

required under the NEPA.

B. RegulaJory Impact Review

In light of the foregoiJIi analysis of the

effect of the proposed action. DOE has

concluded that the rule is not a "majQr

rule" for p\1l1>Olea of Executive Order

12291 because it will not result In: (1) An

annual effect on the economy of $100

million or more; (2) a major increase in

costs or price. for consumers. individual

industries, Federal, State, or local

government agencies. or geographic

regions; or (3) significant adverse effects

on competition. employment.

investment. productivity, innovation. or

on the ability of United States-hased

enterprises to compete with foreignbased enterprises in domestic or export

marketl. Therefore. in accordance with

section 3(c)(3) of the Executive Order.

which applies to rules other than major

rules. the proposed rule was submitted

to OMB for review without. regulatory

impact analysis.

Although the proposed rule fa not a

"major rule" as defined In Executive

Order 12291. DOE has followed the

philosophy set forth in the Executive

Order. Thaa. regulatory alternatives were considered In the-process of

formulating the proposal and the

potential costl and benefitl of the

proposal were extensively analyzed.

Finally, as mentioned above. the

Department Intends to consider the

regulatory impacts. consistent with

Executive Order 12291, of all rules

propoaed in response to petitions to

preserve or supersede State standards

under aectioD 321{b) of the Act.

C Small Entity Impact Review

In light of the foregoing. the

Department has determined and hereby

certifies pum1&nt to section 605(b) of the

Regulatory Flexibility Act that the

proP/)sal. if promu.1gated will not have a

"significant economic impact on a substantial number ohman entities.H

Although the Department has

concluded that no formal regulatory

flexibility analyst. need be prepared.

the spirit of the Regulatory Flexibility

Act is fully evident in the extensive

cost-benefit analyses. examination of

altematives, and other work undertaken

. in preperation of the proposed

rulemaking. The impacts on small

businesses which are appliance

manufacturers were assessed very

closely together with other relevant

factors. Indeed. under section 325(d)(7).

the Department specifically added the

pOSlible impact on small businesses to

the factors considered in weighing the

benefits and burdens of possible

standards. For purposes of assessing

these impactl. the term "small business"

was defined in consultation with the

Small Business Administration.

In addition. as mentioned above. the

Department will consider, as

appropriate. any significant economic

impact on small entities in deciding

petitions to preserve or supersede Sia te

standards under section 327(b) of the

Act.

VI. Public Comment Procedures

a. Participation in Rulemaking. DOE

encourages the maximum level of public

participation possible in this rulemaking.

Following publication of the advance

notice of proposed rulemaking, DOE

held a total of seven public meetings to

acquaint the public with the issues

relating to this particular rulemak.ing

and invited public participation In the

rulemaking process; following

publication of the June 3Q, 1980. notice of

proposed rulemaking, DOE held five

public meetings and two public

hearings. There were also opportunities

for the public to submit written

comments on the advance notice and

the latter notice of proposed rulemaking.

The Department again encourages

interested persons to participate in this

rulemaking. Individual consumers.

representatives of consumer groups,

manafacturers' associations, States or

other governmental entities, utilities.

retailers, distributors, manufacturers.

and others are urged to submit written

statements on the proposaL The

Department alao encourages interested

persons to participate in the public

hearings to be held in Washington. D.C.,

and Chic:ago.1Jlinois. at the times and

places indicated at the beginning of this

notice.

Two technical support documents

have been prepared in connection with

this proposed ntle and are often

referenced above In the text of this

preamble. They are the Engineering

Analysi. Document and the Economic

Analysis Document. Copies of these

docwnentl may be found in the DOE

Freedom ofInformation Reading Room.

Intereeted persons may obtain copies of

either or both of these documents by

writing to the address specified at the

beginning of this notice.
 CAS-RM-78-110 COMMENT 09

14458 FeCleral Register I Vol. 47. No. 64 I Friday. April 2. 1982 I Proposed Rules

The DOE has established an initial

comment period of 75 days following

publication of this notice. for persons to

comment upon this proposal. Upon

completion of this 75-day comment

period. all comments including the

determinations made by the Attorney

General pursuant to section 325{d){5) of

the Act and transcripts of all hearings

will be available for review in the DOE

Freedom of Information Reading Room.

Comments on comments received will

be accepted during the following 45-day

period. The DOE believes that this

additional 45-day period will enable

interested parties an opportunity to

review other submissions and present

information relevant to them.

b. Written Comment Procedures.

Interested persons are invited to

participate in this proceeding by

submitting written data. views or

arguments With respect to the subjects

set forth in this notice. Instructions for

submitting written comments are set

forth at the beginning of this notice and

below. It is requested that, wherever

reasonably possible. comments for each

product type be addressed separately

and that comments regarding the generic

sections of the rule. such as petitions to

exeI;1pt State regulations from

supersession. be addressed separately

from the product specific comments.

Comments should be labeled both on

the envelope and on the'documents,

"Appliances (Docket No. CAS-RM-7&-

110)," and must be received by the date

specified at the beginning of this notice.

in order to insure full consideration.

Fifteen copies are requested to be

submitted. All comments received by

the date specified at the beginning of

, this notice and other relevant

information will be considered by DOE

before final action is talcen on the

proposed regulation. The initial

comment period will extend over a

period of 75 days. Comments on the

comments submitted to DOE during the

initial 75-day period will be accepted for

an additional 45 days following the

close of the initial comment period.

All written comments received on the

proposed'rule will be available for

public inspection at the Freedom of

Information Reading Robm as provided

at the beginning of this notice.

Pursuant to the provisions of 10 CFR

1004.11. any person submitting

information or data which is believed to

be confidential and exempt by law from

public disclosure. should submit one

complete copy of the document, and 15

copies. if possible. from which the

information believed to be confidential

has been deleted. DOE will make its

own determination with regard to the

confidential status of the information or

data and treat it according to its

determination.

Factors of interest to DOE, when

evaluating request. to treat as

confidential information that has been

submitted include: (1) A description of

the item; (2) an indication as to whether

and why such items of information have

been treated by the submitting party as

confidential. and whether and why such

items are customarily treated as confidential within the industry: (3)

whether the information is generally

known or avallable from other sources;

(4) whether the information has

previously been made available to '

others without obligation concerning its

confidentiality; (5) an explanation of the

competitive injury to the submitting

person which would result from public

disclosure; (6) an indication as to when

such information might lose its '

confidential character due to the

passage of time; and (7) whether

disclosure of the information would be

in the public interest.

Co Pl.JbJic Hearings.

1. Procedure for Submitting Requests

to Speak. In order to have the benefit of

a broad range of public viewpoints in

this rulemaking. DOE will hold two

public hearings. Usted at the beginning

of this notice are the dates. addresses.

and DOE contracts for these hearings.

Any person who has an interest in these

proceedings, or who is a representative

of a group or class of persons having an

interest, may make a written request for

an opportunity to make an oral

presentation at the public hearing. Such

requests should be labeled both on the

letter and the envelope, "Appliances

{Docket No. CAS-RM-7&-110)," and

should be sent to the address and must

be received by the time specified at the

beginning of this notice.

The person making the request should

briefly describe the interest concerned

and. if appropriate. state why he or she

is a proper representative of the group'

or class of persons that has such an

interest, and give a telephone number

where he or she may be contacted. Each

person requesting an opportunity to

speak should give a concise summary of

the proposed oral presentation. Each

person selected to be heard will be so

notified by DOE by the date specified at

the beginning of this nO,tice.

Each person selected to be heard is

requested to submit 15 copies of the

statement by the date given at the

beginning of this notice. In the event any

persons wishing to testify cannot meet

this requirement, alternative

arrangements can be made with the

Office of Hearings and Dockets in

advance by so indicating in the letter

requesting to make an oral presentation.

Lists of the persons. selected to be

heard at the hearings will be available

upon request from the Office of

Hearings and Dockets at the address

and after dates specified at the

beginning of this notice. The lists will

also be available for inspection in the

DOE Freedom of Information Reading

Room as specified at the beginning of

this notice.

2. Conduct ofHearing. DOE reserves

the right to select the persons to be

heard at this hearing, to schedule the

respective presentations. and to

establish the procedures governing the

conduct of the hearing. The length of

each presentation is limited to 20

minutes.

A DOE official will be designated to

preside at the hearing. The hearing will

not be a judicial or an evidentiary-type

hearing, but will be conducted in

accordance with 5 U.S.C. 553 and

section 336 of the. Act. At the conclusion

of all initial oral statements at each day

of the hearing, each person who has

made an oral statement will be given the

opportunity to make a rebuttal

statement, subject to time limitations.

The rebuttal statements will be given in

the order in which the initial statements

were made. The official conducting the

hearing will accept additional comments

or questions from those attending. as

time permits. Any interested person may

submit to the presiding official written

questions to be asked of any person

making a statement at the hearing. The

presiding official will determine whether

the question is relevant and whether

time limitations permit it to be presented

for answer.

Further questioning of speakers will

be permitted by DOE. The presiding

official will afford any interested person

an opportunity to question. with respect

to disputed issues of material fact, other

interested persons who have made oral

presentations, as well as Federal

employees who have made written or

oral presentations, relating to the

proposed rule. This opportunity will be

afforded after any rebuttal statements,

to the extent that the presiding official

determines that such questioning is

likely to result in a more timely and

effective resolution of disputed issues of

material fact. II the time provided is

sufficient or inconvenient, DOE will

consider affording an additional

opportunity for questioning at a

mutually convenient time. Persons

interested in making use of this

opportunity must submit their request to

the presiding official no later than

shortly after the completion of any

rebuttal statements and be prepared to

state specific justification. including
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47. No. 64 I Friday, April 2, 1982 / Proposed Rules 14459

why the issue is one of disputed fact and

how the proposed questions wquId

expedite their resolution.

Any further procedural rules regarding

proper conduct of the hearing will be

announced by the presiding official.

A transcript of each hearing will be

'made. and the entire record of this

rulemaking. including the transcripts.

will be retained by DOE and made ' available for inspection at the DOE

Freedom of Informatl'on Reading Room as provided at the beginIling of this '

notice. Any person may purchase a copy

of the transcript from the transcribing

reporter.

In consideration of the foregoing, it is

proposed to amend Part 430 of Chapter

II of Title 10. Code of Federal

Regulations. as set forth below.

ISSlled in Washington. D.C.• March 29.1982.

Joseph J. TrIbble.

Assistant Secretary. Conservation and

Renewable Energy.

List of Subjects in 10 CFR Part 430

Administrative practice and

procedure. Energy conservation.

Household appliances.

PART 43O-ENERGY CONSERVATION

PROGRAM FOR CONSUMER

PRODUCTS

1. Section 430.2 is revised to read as follows:

1430.2 DeflnltloM.

"Act" means the Energy Policy and

Conservation Act (Pub. L. 94-163). as . amended by the National Energy

Conservation Policy Act (Pub. L. 95-619).

"Consumer product" means any , article (other than an automobile. as .

defined in section 501(1) of the Motor

Vehicle Information and Cost Savings

Act) of a type:

(a) Which in operation consumes. or is

designed to consume. energy~ and

(b) Which, to any significant extent. is

distributed in commerce for personal

use or consumption by individuals;

without regard to whether such article of

such type is in fact distributed in commerce for personal use or

consumption by an individual.

"Covered product" means a consumer

product of a type specified in section 322

of the Act.

"Energy efficiency standard" means a

perfomiance standard: . (a) Which prescribes a minimum level

of energy efficiency for a covered

product. determined in accordance with

test procedures prescribed under section

323 of the Act, and

(b) Which includes any other

requirements which the.Secretary may

prescribe under section 325(c) of the

Act.

"Manufacturer" means any person

who manufactures a consumer product

"Person" includes any individual.

corporation. company. association. firm.

partnership, society, trust. joint venture

or joint stock company. the government

and any agency of the United States or

any state or political subdivision

thereof.

"Secretary" means the Secretary of

Energy. . "State" means a state, the District of

Columbia, Puerto Rico, or any territory

,or possession of the United States.

"State regulation" means a law or

regulation of a State or political

subdivision thereof.

Z. Subpart C of Part 430 is revised to

read as follows:

Subpart C-Energy Efficiency Standards

430.31 Purpose and scope.

430.32 Final energy efficiency standards.

430.33 Preemption of state regulations.

430.34 Effective date.

Authority: Energy Policy and Conservation

Act, Pub. 1.. 94-163. as amended by Pub. 1..

95-619, Federal Energy Administration Act of

1974. Pub. 1.. 93-275, as amended by Pub. 1..

94-385: Department of Energy Organization

Act. Pub. 1.. 95-91; E.O. 12009, 42 FR 46267.

Subpart C-Energy Efficiency

Standard.

1430.31 Pwpose and acope.

This subpart contains any energy

efficiency standards for classes of

covered products that are required to be

promulgated by the Department of

Energy pursuant to the energy

conservation program for consumer

products other than automobiles under

the Energy Policy and Conservation Act.

as amended (42 U.S.C. 6291 et seq.).

1430.32 FlnalllMfllY efflclenc:y lltan<Iards.

The final energy efficiency standards

for each class of covered products are: (a) Refrigerators and refrigeratorfreezers: No standard for all classes.

(b) Freezers: No standard for all

classes.

(c) Dishwashers: [Reserved].

(d) Clothes dryers: No standard for all

classes.

(e) Water heaters:

(1) For the clasaes gas. electric,

electric table top and oil: No standard;

(2) For the class heat pump water

heater: [Reserved],

'(f) Room air conditioners: No standard

for all classes.

(g) Home heating equipment, not

including furnaces: [Reserved].

(h) Tefevision sets: [Reserved].

(i) Kitchen ranges and ovens: No

standard for all classes.

mClothes washers: [Reserved].

(1<) Humidifiers and dehumidifiers:

[Reserved].

(1) Central air conditioners:

(1) For the classes which include all

split systems and single package units

which do not operate with a heat pump:

No standard.

(2) For the classes which operate with a heat pump: [Reserved].

(m) Furnaces: No standard for all

classes.

1430.33 P""imptlon of ltate regulations.

Any state regulation providing for any

energy efficiency standard. or other

requirement with respect to the energy

efficiency or energy use, of a covered

product that is not identical to a federal

standard (including a determination of

no standard) in effect under this subpart

is preempted by that standard.

§430.34 Effective date.

The effective date of a final energy

efficiency standard (including a

determination of no standard) in §430.32

shall be the later of:

(a) 180 days after publication of that

standard in the Federal Register; or

(b) With respect to a covered product

in a particular state for which that state

has filed a petition under section

327(b)(3) of the Act prior to the effective

date of a standard under §430.32. the

date upon which the Secretary issues or

denies a final rule concerning that

petition.

3. Subpart D or"Part 430 is revised to

read as follows:

Subpart D-G4tneral Procedural

RegUlations

Sec.

430.41 Petition for prescription of a rule.

430.42 Filing requirements.

430.43 Notice of petition.

430.44 Contents.

430.45 Consolidation of proceedings.

43O.116 Hearings and comments of interested

persons.

430.47 Evaluation of petition.

430.48 Disposition of petition.

430.49 Judicial review.

Authority: Energy Policy and Conservation

Act. Pub. 1.. 94-163 as amended by Pub. L. 95-

619, Federal Energy Administration Act of

1974. Pub. 1.. 93-275, as amended by Pub. 1..

94-385: Department of Energy Organization

Act. Pub. 1.. 95-91: E.O. 12009. 42 FR 48267.

Subpart D--General Procedural

Regulation

1430.41 PetItIon fOt pmlCf'lption of a rule.

(a) Pursuant to section 327(h)(1) of the

Act. any person subject to a state

regulation may petition the Secretary for

a rule to supersede in whole or in part

that state regulation prescribing an

energy efficiency standard or other

requirement respecting energy use or
 CAS-RM-78-110 COMMENT 09

14460 Federal Register I Vol 41, No. 64 f Friday, April 2, 1982 I Proposed Rules

energy efficiency of a typa (or clan) of

covered products.

(b) Pursuant to seeton 327(b}{3) of the

Act. any Itate may petition the

Secretary for a rule that a state

regulation preacribing an energy

efficiency standard or other requ.i.remeD.t

respecting energy use or energy

efficiency for a type (or class) of

covered products not be superseded.

§ 430.42 AlI119 ntqUInImentL _

{a) A petition for a r:ule under this

section shall be submitted in triplicate

to: U.s. Department of Energy, "Section

327 Petition-Energy Efficiency Program

for Consumer Products", 1000

Independence Avenue SW.• Washington. D.C. 2OS8S.

(b)(1) A petition for a rule to

supersede a state or local regulation and

all related submissions shall be served

upon each state agency. department. or

instrumentality whose l"e8Uiation the

petitioner seekB to supersede.-

(2) A petition for a nxle not to

supenJede a state or IGC41 regu.lation and

all related submissions shall be served

on each manufacturer of a covered

product who. to the best of the

petitioner's knowledge. would be

affected by the state regulation which

the petitioner seeks to sustain.

(3) All materials required to be served

under this Part shall be served

personally or by registered or certified

mail. Service upon a person's duly

authori2:ed representative shall

constitute service upon that penon.

Service by registered or certi.fiad mail w

complete upon mailing.

(c) Uthe DOE determines that there is

insufficient information upon which to

base a decision and if upon requelt the

necessary additional informationa DOt

submitted. the DOE may deny the

petition without prejudice. The

Seaetary shall publish notice of such a

denial in the Federal Register and the

reason for such a deniaL

(d) Ua petitioner or other party tei a

petition wishes to claim confidential

treatment pursuant to 5 U.S.C. 552 or 18

U.S.C. 1905, for any information

contained in the petition or other

document submitted prior to the

issuance of a final decision. that person

shall submit together with the original

document. a copy of the document in

triplicate. from which has been deleted

the information for which such person

wishes to claim confidential treatment.

The penon thall indicate in the original

document that it il CIOIlfidential or

containa confidential information and

shall file a ttateme.ut .pec.iI;yi.ns the

justificatioo for DOO-diec101ur8 of the . information for which coDfidential '

treatment is claimed. U the pel'8OJlltates

that the information comes within the

exception in 5 USC. 552(b)(4) for trade

secrets and commercial or financial

information. web penon shall Include a statement apec:i.fyi.ng why such

information il privileged or confidential.

Ii the penon filing • document does oot

submit a leCOod copy of the document

with the confidential information

deleted. the DOE may assume that there

is no objection to public disclosure of

the document in im entirety.1'he DOE

retains the right to make Its own

determination with regard to any claim

of confidentiality. Notice of the decision

by the DOE to deny such claim. in whole or in part. and an opportunity to respond

shall be given to a penon clai.ming

confidentiality of informaoon no less

than five daf1l prior to its public

disclosure.

§ 430.43 Nottce of petttlon.

Promptly after receipt of a petition.

notice ofsuch petition shall be

published In the Fed.ral Register. The

notice ahall set forth the availability for

public review of all data and

information available, and shall solicit

comments, data and information with

respect to the petitioo. Each notice lhall

contain a summary of the state or local

regulation at issue and either (1) the

petitioner's reuexa for.. rule to

supersede the state or local regulation.

or (2) the petitioner'. reasons for a rule

not to supersede the regulation. Except

as may otherwiH be specified. the

period for public comment shall be 60

days after the notice appears in the

Federal Register.

§ 430.44 Content&.

(a) A petition to supersede a state

regulation under section 327(b)(1) of the . Act ahall include:

(1) The name. addresses and

telephone number of the petitioner;

(2) A statement of the interest of the

petitioner for which a superseding rule

is sought; .

(3) A coP7 of the law or regulation for

whk:h supersession is sought;

(4) Specification of each type or class

of product for which a superseding rule

is sought; ..

(5) information which would thow

why such regulation unduly burdens

interstate commerce:

(6) Information which would show

that there il no li8nificant ltate or local

interest sufficient to justi.{y the state

regulation in islue;

(7) Any other informatioo that the

petitioner considers relevant 01' that the

Secretary may require.

(b) A petition from a state for a rule

for exemption from supersession of a

atate regulation under section 327(b)(3)

of the Act shall include:

(1) The name. address and telephone

number of the petitioner;

(2) A statement of the petitioner's

authority to represent the governmental

entity in thi.a preceeding;

(3) A copy of the law or regulation

which the state or local entity requests

not be superseded:

(4) Specification of each-type or class

of product covered by the regulation;

(5) A description of the significant

state or local interest justifying such

state regulation;

. (6) Any other information that the

petitioner considers relevant or that the

Secretary may require.

(c) All petitions and comments by

interested persons shall be made

available for public review.

§ 430.45 ConsolIdatIon of procMdlngs.

DOE may consolidate any or all

matters at issue in or more

proceedings docketed where there exist

common questions of fact and law, and

where such consolidation would

expedite or simplify consideration of the

is.uel. Coo.solidation shall not affect the

right of any party to raise issues that

could have been raised if consolidation

had not occurred.

§ 430.48 Hearlll9s and comments of

Interested persons.

(a) The Secretary shall hold a public

hearing to afford interested persons a

reasonable opportunity to present oral

data. vieW'll. and arguments with respect

to the proposed rule, and publish notice

in the Federal Register of the date and

location of the hearing.

(b) The Secretary shall accept written

comments from interested persons with

relpect to the proposed rule.

§430.47 Evaluation of petltlon.

(a) In evaluating a petition submitted

pursuant to section 327{b)(1) of the Act.

the Secretary .hall issue a requested

role only if the Secretary determines:

(1) There is no sisnificant state or local interest sufficient to justify such

regulation; or

(2) Such state or local regulation

unduly burdens interstate commerce.

(b) In evaluating a petition submitted

pursuant to section 327(b)(3) of the Act.

the Secretary shall issue the requested

rule only if the Secretary determines:

(1) There i. a significant state or local

interest to justify .uch regulation; and

(2) Such state or local regulation

contains a more It:ringent energy

efficiency standard that such federal

standard; except that the Secretary may

not prescribe such rule if he finds that
 CAS-RM-78-110 COMMENT 09

Federal Register I Vol. 47, No. 64 I Friday, April 2, 1982 I Proposed Rules 14461

such state or local regulation would

unduly burden interstate commerce.

§ 430.48 Dlapoaltlon of petition.

(a) The Secretary shall prescribe a final rule or deny the petition within 6

months after the date the petition is

filed. except that the Secretary may

publish a notice in the Federal Register

extending such period to a date certain.

Such notice shall include the reasons for

the delay.

(b) The final rule issued by the

Secretary or a determination to deny the

petition by the Secretary shall include a

written statement setting forth the

factual and legal basis for the decision.

A copy of the Secretary's decision shall

be sent to either (1) the petitioner and

the affected state or local agency if the

petition is for a rule to supersede a state

regulation, or (2) the petitioner and all

persons subject to the state regulation

who have submitted comments if the

petition is for a rule not to supersede a

state regulation. The Secretary shall

publish in the Federal Register a notice

of the final rule or a notice of the denial

of the petition and the factual and legal

basis for the decision.

§ 430.49 Judicial review.

The decision issued by the Secretary

concerning a petition filed under this

subpart shall be a final determination of

the DOE of which any adversely

affected person may seek judicial

review.

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