CHAPTER 10: NATIONAL IMPACT ANALYSIS 


TABLE OF CONTENTS
 

10.1 INTRODUCTION ......................................................................................................... 10-1 


10.2 FORECASTED ENERGY EFFICIENCIES ................................................................. 10-2 


10.2.1 Room Air Conditioners.................................................................................................. 10-2 


10.2.2 Clothes Dryers ............................................................................................................... 10-4 


10.3 NATIONAL ENERGY SAVINGS ............................................................................... 10-6 


10.3.1 Definition of National Energy Savings .......................................................................... 10-6 


10.3.2 Inputs to National Energy Savings ................................................................................ 10-7 


10.3.2.1 Annual Energy Consumption per Unit ........................................................ 10-7 


10.3.2.2 Shipments and Equipment Stock ............................................................... 10-10 


10.3.2.3 National Annual Energy Consumption...................................................... 10-11 


10.3.2.4 Site-to-Source Energy Conversion Factors................................................ 10-11 


10.4 NET PRESENT VALUE............................................................................................. 10-13 


10.4.1 Definition of Net Present Value................................................................................... 10-13 


10.4.2 Inputs to Calculation of Net Present Value.................................................................. 10-14 


10.4.2.1 Total Installed Cost per Unit ...................................................................... 10-15 


10.4.2.2 Annual Operating Cost Savings per Unit................................................... 10-17 


10.4.2.3 Total Increases in Annual Installed Cost ................................................... 10-17 


10.4.2.4 Total Savings in Annual Operating Cost ................................................... 10-17 


10.4.2.5 Discount Factors ........................................................................................ 10-18 


10.4.2.6 Present Value of Costs ............................................................................... 10-18 


10.4.2.7 Present Value of Savings ........................................................................... 10-18 


10.5 NES AND NPV RESULTS......................................................................................... 10-19 


10.5.2 National Energy Savings Results ................................................................................. 10-19 


10.5.2.1 Room Air Conditioners.............................................................................. 10-20 


10.5.2.2 Clothes Dryers ........................................................................................... 10-21 


10.5.3 Annual Costs and Savings ........................................................................................... 10-22 


10.5.4 Consumer Net Present Value Results .......................................................................... 10-23 


10.5.4.1 Room Air Conditioners.............................................................................. 10-24 


10.5.4.2 Clothes Dryers ........................................................................................... 10-24 


10.6 	 IMPACT OF STANDARDS ON NATURAL GAS PRICES AND 


ASSOCIATED NATIONAL BENEFITS ................................................................... 10-25 


10.6.1 Impact on Natural Gas Prices ...................................................................................... 10-25 


10.6.2 Impact of Changes in Natural Gas Price on Gas Users ............................................... 10-27 


LIST OF TABLES 

Table 10.2.1 Room Air Conditioners, Without Reverse Cycle and With Louvers, Less 


than 6,000 Btu/h: Energy Efficiency Distributions in 2014 .............................. 10-3 


Table 10.2.2 Room Air Conditioners, Without Reverse Cycle and With Louvers, 8,000–
 

13,999 Btu/h: Energy Efficiency Distributions in 2014 .................................... 10-3 


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Table 10.2.3 Room Air Conditioners, Without Reverse Cycle and With Louvers, 20,000 

Btu/h or more: Energy Efficiency Distributions in 2014 ................................... 10-3 


Table 10.2.4 Room Air Conditioners, Without Reverse Cycle and Without Louvers, 


8,000–13,999 Btu/h: Energy Efficiency Distributions in 2014 ......................... 10-4 


Table 10.2.5 Vented Dryer, Electric, Standard: Energy Efficiency Distributions in 2014 ..... 10-4 


Table 10.2.6 Vented Dryer, Electric, Compact 120V: Energy Efficiency Distributions in 


2014.................................................................................................................... 10-5 


Table 10.2.7 Vented Dryer, Electric, Compact 240V: Energy Efficiency Distributions in 


2014.................................................................................................................... 10-5 


Table 10.2.8 Vented Dryer, Gas: Energy Efficiency Distributions in 2014 ........................... 10-5 


Table 10.2.9 Vent-less Dryer, Electric, Compact 240V: Energy Efficiency Distributions 


in 2014 ............................................................................................................... 10-6 


Table 10.2.10 Vent-less Dryer, Electric, Combination Washer/Dryer: Energy Efficiency
 

Distributions in 2014.......................................................................................... 10-6 


Table 10.3.1 Room Air Conditioners: Shipments-Weighted Average per-Unit Annual 


Energy Consumption in 2014, Residential Sector ............................................. 10-8 


Table 10.3.2 Room Air Conditioners: Shipments-Weighted Average per-Unit Annual 


Energy Consumption in 2014, Commercial Sector ........................................... 10-9 


Table 10.3.3 Clothes Dryers: Shipments-Weighted Average per-Unit Annual Energy
 

Consumption .................................................................................................... 10-10 


Table 10.4.1 Room Air Conditioners: Shipments-Weighted Average per-Unit Total 


Installed Cost in 2014 ...................................................................................... 10-15 


Table 10.4.2 Clothes Dryers: Shipments-Weighted Average per-Unit Total Installed 


Costs ................................................................................................................. 10-16 


Table 10.5.1 Inputs to National Energy Savings and Net Present Value.............................. 10-19 


Table 10.5.2 Room Air Conditioners: Cumulative National Energy Savings in Quads....... 10-20 


Table 10.5.3 Room Air Conditioners: Cumulative National Energy Savings in Quads, 


Discounted at 3 Percent ................................................................................... 10-20 


Table 10.5.4 Room Air Conditioners: Cumulative National Energy Savings in Quads, 


Discounted at 7 Percent ................................................................................... 10-21 


Table 10.5.5 Clothes Dryers: Cumulative National Energy Savings in Quads .................... 10-21 


Table 10.5.6 Clothes Dryers: Cumulative National Energy Savings in Quads, 


Discounted at 3 Percent ................................................................................... 10-21 


Table 10.5.7 Clothes Dryers: Cumulative National Energy Savings in Quads, 


Discounted at 7 Percent ................................................................................... 10-22 


Table 10.5.8 Room Air Conditioners: Cumulative Consumer Net Present Value,
 

Discounted at 3 Percent ................................................................................... 10-24 


Table 10.5.9 Room Air Conditioners: Cumulative Consumer Net Present Value,
 

Discounted at 7 Percent ................................................................................... 10-24 


Table 10.5.10 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 3 


Percent.............................................................................................................. 10-25 


Table 10.5.11 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 7 


Percent.............................................................................................................. 10-25 


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EERE-2007-BT-STD-0010 COMMENT 20.3
Table 10.6.1 Cumulative NPV of the Economy-Wide Savings in Natural Gas 


Expenditures Due to the Projected Decline in Natural Gas Prices Resulting 


from Amended Standards for Room Air Conditioners and Clothes Dryers .... 10-28 


LIST OF FIGURES 

Figure 10.3.1 Site-to-Source Conversion Factors for Electricity – Room Air 

Conditioners..................................................................................................... 10-12 


Figure 10.3.2 Site-to-Source Conversion Factors for Electricity – Clothes Dryers............... 10-13 


Figure 10.5.2 Non-Discounted Changes in Annual Installed Cost and Operating Cost for 


Room Air Conditioner Product Class Group 3 at CSL 1................................. 10-23 


Figure 10.6.1 Change in U.S. Natural Gas Consumption Associated with Scenarios for 


Room Air Conditioner and Clothes Dryer Standards ...................................... 10-26 


Figure 10.6.2 Effects of Standards Scenarios on Average Wellhead Natural Gas Prices...... 10-27 


10-iii 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

CHAPTER 10. NATIONAL IMPACT ANALYSIS
 

10.1 INTRODUCTION
 

This chapter describes the U.S. Department of Energy’s (DOE’s) estimation of certain 

national impacts that may result from potential energy conservation standards for room air 

conditioners and clothes dryers. Results described here include: (1) national energy savings 

(NES) from considered efficiency levels, (2) the monetary value of the energy savings and 

changes in other operating costs, (3) increased total installed costs of the considered appliances 

that are attributable to the considered efficiency levels, and (4) the net present value (NPV) of 

the difference between the value of operating cost savings and the total installed costs. 

DOE determined the NES and NPV for all the standard levels considered for the two 

products under consideration (room air conditioners and clothes dryers). All calculations for each 

of the considered products were performed using a Microsoft Excel spreadsheet model, which is 

accessible on the Internet (www.eere.energy.gov/buildings/appliance_standards/). Each 

product’s spreadsheet model, referred to as a national impact analysis (NIA) model, incorporates 

the calculations for determining the NES and NPV as well as inputs from the associated 

shipments model. Details and instructions for using the NIA models are provided in appendix 9­

A, User Instructions for Shipments and National Energy Savings Spreadsheet Model. Chapter 9, 

Shipments Analysis, describes the shipments models that DOE used to forecast future purchases 

of the considered products. 

For room air conditioners, DOE has analyzed four representative product classes in 

detail. For the NIA, DOE assigned each of the sixteen product classes included in this 

rulemaking to one of four product class groups, each of which is based on the analyses for the 

four representative product classes. To estimate the national impacts of amended standards for all 

the product classes considered in this rulemaking, DOE allocated the product cost and annual 

energy consumption of each representative product class to all product classes within its group. 

The following list indicates which product classes are associated with each product class group: 

•	 Group 1 consists of product class 1: Less than 6,000 Btu/h, Without Reverse Cycle 

and With Louvers 

•	 Group 2 consists of product classes 2, 3, 4, 11, 16 and is based on Product class 3: 

8,000–13,999 Btu/h, Without Reverse Cycle and With Louvers 

•	 Group 3 consists of product classes 5 and 12 and is based on product class 12: 

>20,000 Btu/h, Without Reverse Cycle and With Louvers 

•	 Group 4 consists of product classes 6, 7, 8, 9, 10, 13,14,15 and is based on product 

class 8: 8,000–13,999 Btu/h, Without Reverse Cycle and Without Louvers 

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10.2 FORECASTED ENERGY EFFICIENCIES 

A key component of DOE’s estimates of NES and NPV for each of the two products is 

the energy efficiencies forecasted for the base case (without amended energy conservation 

standards) and each of the standards cases (with amended energy conservation standards). The 

forecasted energy efficiency represents the annual shipments-weighted energy efficiency of the 

product under consideration during the forecast period (that is, from the assumed effective date 

of an amended standard to 30 years after that date). 

For calculating the NES, per-unit average annual energy consumption is a direct function 

of product energy efficiency. For the NPV, the per-unit total installed cost is a direct function of 

energy efficiency; the per-unit annual operating cost, because it is a function of per-unit annual 

energy consumption, is indirectly dependent on product energy efficiency. The above NES and 

NPV inputs, as well as all other inputs to the calculation of NES and NPV, are discussed further 

in sections 10.3 and 10.4. 

To forecast the base-case energy efficiency for each product class, DOE used as a starting 

point the shipments-weighted energy efficiency for 2014. To represent the distribution of product 

energy efficiencies in 2014, DOE used the same market shares as in the base case for the lifecycle cost (LCC) analysis (see chapter 8). Based on recent trends, DOE assumed no 

improvement of energy efficiency in the base case. 

For its forecast of standards-case energy efficiencies, DOE used a “roll-up” scenario to 

establish the shipments-weighted average energy efficiency for the year that energy conservation 

standards are assumed to become effective (2014). In this approach, product energy efficiencies 

in the base case that do not meet the standard level under consideration would “roll up” to meet 

the new standard level. Product energy efficiencies in the base case that exceeded the standard 

level under consideration would not be affected. 

The following sections detail the energy efficiency forecasts that DOE developed for the 

two products. 

10.2.1 Room Air Conditioners 

Tables 10.2.1 through 10.2.4 show the distributions for base- and standards-case product 

energy efficiency in 2014 that DOE used in its NIA for room air conditioners, as well as the 

shipments-weighted energy efficiency ratio (SWEER) for each considered candidate standard 

level (CSL). DOE assumed that energy efficiencies for all room air conditioner product classes 

remains constant throughout the forecast period in the absence of standard. 

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Table 10.2.1 Room Air Conditioners, Without Reverse Cycle and With Louvers, Less than 

6,000 Btu/h: Energy Efficiency Distributions in 2014 

Energy Efficiency 

Level 

 Market Shares 

IEER Base 

Case 

Candidate Standard Level 

1 2 3 4 5 

Baseline 9.5 96% 

1 10.1 0% 96% 

2 10.6 4% 4% 100% 

3 11.1 0% 0% 0% 100% 

4 11.6 0% 0% 0% 0% 100% 

5 12.0 0% 0% 0% 0% 0% 100% 

SWEER 9.57 10.12 10.60 11.10 11.60 12.00 

Table 10.2.2 Room Air Conditioners, Without Reverse Cycle and With Louvers, 

8,000–13,999 Btu/h: Energy Efficiency Distributions in 2014 

Energy Efficiency 

Level 

 Market Shares 

IEER Base 

Case 

Candidate Standard Level 

1 2 3 4 

Baseline 9.7 51% 

1 10.3 2% 53% 

2 10.8 44% 44% 97% 

3 11.3 2% 2% 2% 99% 

4 11.5 1% 1% 1% 1% 100% 

SWEER 10.24 10.55 10.82 11.30 11.50 

Table 10.2.3 Room Air Conditioners, Without Reverse Cycle and With Louvers, 

20,000 Btu/h or more: Energy Efficiency Distributions in 2014 

Energy Efficiency 

Level 

 Market Shares 

IEER Base 

Case 

Candidate Standard Level 

1 2 3 4 

Baseline 8.5 37% 

1 9.0 6% 43% 

2 9.4 56% 56% 99% 

3 9.8 1% 1% 1% 100% 

4 10.0 0% 0% 0% 0% 100% 

SWEER 9.03 9.23 9.40 9.80 10.00 

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Table 10.2.4 Room Air Conditioners, Without Reverse Cycle and Without Louvers, 

8,000–13,999 Btu/h: Energy Efficiency Distributions in 2014 

Energy Efficiency 

Level 

 Market Shares 

IEER Base 

Case 

Candidate Standard Level 

1 2 3 

Baseline 8.4 39% 

1 8.9 0% 39% 

2 9.3 61% 61% 100% 

3 9.8 0% 0% 0% 100% 

SWEER 8.95 9.14 9.30 9.80 

10.2.2 Clothes Dryers 

Tables 10.2.5 through 10.2.10 show the distributions for base- and standards-case product 

energy efficiency in 2014 that DOE used in its NIA for clothes dryers. Also included in the 

tables are the shipments-weighted energy efficiencies associated with the base case and each 

considered standard level. DOE assumed that energy efficiencies for all product classes of 

clothes dryers remain constant at 2014 levels. 

Table 10.2.5 Vented Dryer, Electric, Standard: Energy Efficiency Distributions in 2014 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 6 

Baseline 2.96 29% 

1 3.04 50% 79% 

2 3.10 21% 21% 100% 

3 3.33 0% 0% 0% 100% 

4 3.35 0% 0% 0% 0% 100% 

5 3.40 0% 0% 0% 0% 0% 100% 

6 4.52 0% 0% 0% 0% 0% 0% 100% 

SWEF 3.03 3.06 3.10 3.33 3.35 3.40 4.52 

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Table 10.2.6 Vented Dryer, Electric, Compact 120V: Energy Efficiency Distributions in 

2014 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 6 

Baseline 3.00 100% 

1 3.08 0% 100% 

2 3.15 0% 0% 100% 

3 3.37 0% 0% 0% 100% 

4 3.41 0% 0% 0% 0% 100% 

5 3.53 0% 0% 0% 0% 0% 100% 

6 4.69 0% 0% 0% 0% 0% 0% 100% 

SWEF 3.00 3.08 3.15 3.37 3.41 3.53 4.69 

Table 10.2.7 Vented Dryer, Electric, Compact 240V: Energy Efficiency Distributions in 

2014 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 6 

Baseline 2.79 39% 

1 2.86 39% 78% 

2 2.96 0% 0% 78% 

3 3.06 22% 22% 22% 100% 

4 3.10 0% 0% 0% 0% 100% 

5 3.19 0% 0% 0% 0% 0% 100% 

6 4.34 0% 0% 0% 0% 0% 0% 100% 

SWEF 2.88 2.91 2.99 3.06 3.10 3.19 4.34 

Table 10.2.8 Vented Dryer, Gas: Energy Efficiency Distributions in 2014
 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 

Baseline 2.63 27% 

1 2.71 43% 70% 

2 2.81 29% 29% 99% 

3 2.97 1% 1% 1% 100% 

4 2.98 0% 0% 0% 0% 100% 

5 3.02 0% 0% 0% 0% 0% 100% 

SWEF 2.72 2.74 2.80 2.97 2.98 3.02 

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EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

 

 

 

 

Table 10.2.9 Vent-less Dryer, Electric, Compact 240V: Energy Efficiency Distributions in 

2014 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 

Baseline 2.29 100% 

1 2.31 0% 100% 

2 2.37 0% 0% 100% 

3 2.39 0% 0% 0% 100% 

4 2.59 0% 0% 0% 0% 100% 

5 3.54 0% 0% 0% 0% 0% 100% 

SWEF 2.29 2.31 2.37 2.39 2.59 3.54 

Table 10.2.10 Vent-less Dryer, Electric, Combination Washer/Dryer: Energy Efficiency 

Distributions in 2014 

Energy 

Efficiency 

Level 

IEF 

(lb/kWh) 

Market Share 

Base Case Candidate Standard Level 

1 2 3 4 5 

Baseline 1.90 100% 

1 2.15 0% 100% 

2 2.34 0% 0% 100% 

3 2.36 0% 0% 0% 100% 

4 2.42 0% 0% 0% 0% 100% 

5 3.31 0% 0% 0% 0% 0% 100% 

SWEF 1.90 2.15 2.34 2.36 2.42 3.31 

10.3 NATIONAL ENERGY SAVINGS 

The following sections discuss the definition of NES and the inputs to the calculation of 

NES. 

10.3.1 Definition of National Energy Savings 

DOE calculates NES for each year as the difference between energy consumption of the 

product stock using the average unit energy consumption (UEC) of the stock in the base case 

(without new standards) or in a case given new standards. 

( )class = AffStock ( ) y class × UEC( y)base ,class −UEC( y)std ,class NES y ( )

 Where: 

AffStock(y)class = the stock of products sold after the year of the standard that is still 

in operation in year y (affected stock), 

UEC(y)base class = the unit energy consumption in the base case in year y, and 

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UEC(y)std. class = the unit energy consumption in the standard case in year y. 

The affected stock in year y is given by: 

y 

AffStock ( ) y = LS i( ) × Surv(y − i) class class class 

i=stdyr 

The quantity of stock in year y is dependent on the number of shipments S(y)class in past 

years, multiplied by the survival function Surv(v), which is the fraction of shipments that survive 

until age v (vintage). Only those shipments made after the year standards are enacted (stdyr) are 

considered in calculating NES, because shipments before that date are unaffected by the 

standard, and thus will produce no energy savings. The variables UECbase,class and UECstd,class are 

the average unit energy consumption of products sold in either the base or standards case. DOE 

doesn’t assume any increase in usage, and since energy efficiency remains constant in the base 

case, UECbase,class remains constant throughout the forecast period. 

Cumulative energy savings are the sum of annual NES during the forecast period, which 

is 2014–2044. 

2044 

NES = LNES( ) y cum 

y=stdyr 

The stock of products is dependent on annual shipments and the lifetime of the products. 

10.3.2 Inputs to National Energy Savings 

The inputs for determining NES are: 

• annual energy consumption per unit (UEC) 

• shipments 

• product stock (STOCKV) 

• national annual energy consumption (AEC) 

• site- to-source conversion factor (src_conv) 

10.3.2.1 Annual Energy Consumption per Unit 

DOE developed per-unit annual energy consumption as a function of product energy 

efficiency for each of the considered products (chapter 7, Energy Use Characterization, and 

chapter 8, Life-Cycle Cost and Payback Period Analyses). Because per-unit annual energy 

consumption is directly dependent on energy efficiency, DOE used the shipments-weighted 

energy efficiencies for the base and standards cases (presented in section 10.2), along with the 

annual energy use data presented in chapter 8, to estimate the shipments-weighted average 

annual per-unit energy consumption under the base and standards cases. 

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EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

 

 

 Room Air Conditioners. Using the relationship between EER and annual energy 

consumption described in chapter 8, DOE calculated the per-unit annual energy consumption 

based on the shipments-weighted average energy efficiencies that correspond to the base case 

and each considered standard case for each room air conditioner product class. Tables 10.3.1 and 

10.3.2 show the values used for shipments to the residential and commercial sector, respectively. 

Table 10.3.1	 Room Air Conditioners: Shipments-Weighted Average per-Unit Annual 

Energy Consumption in 2014, Residential Sector 

Product Class Base 

Case 

Candidate Standard Level 

1 2 3 4 5 

Less than 6,000 

Btu/h, with Louvers 

IEER 9.5 10.1 10.6 11.1 11.6 12.0 

Annual 

Energy 

Use (kWh) 688 654 628 605 583 567 

8,000–13,999 Btu/h, 

with Louvers 

IEER 9.7 10.3 10.8 11.3 11.5 

Annual 

Energy 

Use (kWh) 688 654 628 605 583 

20,000 Btu/h or 

more, with Louvers 

IEER 8.5 9.0 9.4 9.8 10.0 

Annual 

Energy 

Use (kWh) 1118 1062 1024 989 972 

8,000–13,999 Btu/h, 

without Louvers 

IEER 8.4 8.9 9.3 9.8 

Annual 

Energy 

Use (kWh) 712 679 654 626 

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Table 10.3.2 Room Air Conditioners: Shipments-Weighted Average per-Unit Annual 

Energy Consumption in 2014, Commercial Sector 

Product 

Class 

Base 

Case 

Candidate Standard Level 

1 2 3 4 5 

Less than 

6,000 Btu/h, 

with Louvers 

IEER 9.7 10.2 10.7 11.2 11.6 12.0 

Annual Energy 

Use (kWh) 640 609 585 563 543 528 

8,000–13,999 

Btu/h, with 

Louvers 

IEER 9.8 10.3 10.8 11.3 11.8 

Annual Energy 

Use (kWh) 1,181 1,121 1,077 1,037 1,022 

20,000 Btu/h 

or more, with 

Louvers 

IEER 8.5 9.0 9.4 9.8 10.2 

Annual Energy 

Use (kWh) 3,343 3,176 3,062 2,957 2,908 

8,000–13,999 

Btu/h, 

without 

Louvers 

IEER 9.8 10.3 10.8 11.3 

Annual Energy 

Use (kWh) 1,359 1,296 1,249 1,196 

As noted in section 10.2, DOE assumed that forecasted energy efficiencies in the base 

and standards cases remain constant at 2014 levels. Because per-unit annual energy consumption 

is a function of energy efficiency, DOE held the values shown in Tables 10.3.1 and 10.3.2 

constant throughout the forecast period. 

When calculating energy consumption at each considered efficiency level for room air 

conditioner, DOE applied a rebound effect of 15 percent. When the rebound effect is 

incorporated, calculated energy savings are lower than if no rebound effect were considered

 Clothes Dryers. Using the relationship between the EF of clothes dryers and the annual 

energy consumption described in chapter 8, DOE calculated the per-unit annual energy 

consumption of clothes dryers. The calculation was based on the shipments-weighted energy 

efficiencies that correspond to the base case and each standards case for each clothes dryer 

product class (Table 10.3.3). 

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Table 10.3.3 Clothes Dryers: Shipments-Weighted Average per-Unit Annual Energy 

Consumption 

Product Class Base 

Case 

Candidate Standard Level 

1 2 3 4 5 6 

Vented Electric 

Standard 

IEF (lbs/kWh) 2.96 3.04 3.10 3.33 3.35 3.40 4.52 

Annual Energy 

Use (kWh/yr) 519 504 495 461 457 445 335 

Vented Electric 

Compact 120V 

IEF (lbs/kWh) 3.00 3.08 3.15 3.37 3.42 3.53 4.69 

Annual Energy 

Use (kWh/yr) 270 263 258 241 237 225 169 

Vented Electric 

Compact 240V 

IEF (lbs/kWh) 2.79 2.86 2.96 3.06 3.10 3.19 4.34 

Annual Energy 

Use (kWh/yr) 290 283 274 265 260 248 183 

Vented Gas 

IEF (lbs/kWh) 2.63 2.71 2.80 2.97 2.98 3.02 

Annual Gas 

Use 

(MMBtu/yr) 1.65 1.60 1.53 1.45 1.45 1.45 

Annual Elec. 

Use (kWh/yr) 71 71 71 68 64 52 

Vent-less 

Electric 

Compact 240V 

IEF (lbs/kWh) 2.29 2.31 2.37 2.39 2.59 3.54 

Annual Energy 

Use (kWh/yr) 351 347 335 332 307 224 

Vent-less 

Electric 

Combination 

Washer/Dryer 

IEF (lbs/kWh) 1.90 2.15 2.34 2.36 2.42 3.31 

Annual Energy 

Use (kWh/yr) 423 375 344 340 328 239 

As noted in section 10.2, DOE assumed that forecasted energy efficiencies in the base 

and standards cases remain constant at 2014 levels. Because per-unit annual energy consumption 

is a function of energy efficiency, DOE held the values shown in Table 10.3.3 constant 

throughout the forecast period. 

10.3.2.2 Shipments and Equipment Stock 

The methodology for conducting and generating shipments forecasts for each considered 

product is described in detail in chapter 9. The product stock in a given year is the number of 

products shipped from earlier years that survive in the given year. The NIA models keep track of 

the number of units shipped each year. DOE assumes that the products have an increasing 

probability of retiring as they age. The survival function represents the probability of survival as 

a function of years since purchase. The sections in chapter 9 that concern with specific products 

present further details on the survival functions that DOE used in its analyses. 

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EERE-2007-BT-STD-0010 COMMENT 20.3
10.3.2.3 National Annual Energy Consumption 

The national annual energy consumption (AEC), which is calculated for the base case 

only, is the product of the annual energy consumption per unit and the number of units of each 

vintage. 

AEC ( ) y = UEC × Stock ( ) y class base ,class class 

 Where: 

UECbase class = the unit energy consumption in the base case, and
 

Stock(y)class = the stock of equipment in year y.
 

10.3.2.4 Site-to-Source Energy Conversion Factors 

In determining annual NES, DOE initially considered the annual energy consumption at a 

residence (for electricity, the energy in kWh consumed by the household). DOE then calculated 

primary (source) energy savings from site energy consumption by applying a conversion factor 

to account for losses associated with the generation, transmission, and distribution of electricity 

and natural gas. The site-to-source conversion factor is a multiplicative factor used for 

converting site energy consumption into primary or source energy consumption, expressed in 

quadrillion Btu (quads). 

DOE used annual site-to-source conversion factors based on the version of the national 

energy modeling system (NEMS) that corresponds to the DOE Energy Information 

Administration’s (EIA’s) Annual Energy Outlook 2009 (AEO2009).1 The factors are marginal 

values, which represent the response of the system to an incremental decrease in consumption. 

For electricity, the conversion factors change over time in response to projected changes in 

generation sources (i.e., the types of power plant projected to provide electricity). Figure 10.3.1 

shows the site-to-source conversion factors for electricity between 2005 and 2030 for room air 

conditioners, which were generated by NEMS based on the load shape for room air conditioners. 

NEMS outputs stop in 2030; DOE assumed that conversion factors remain constant at 2030 

values throughout the rest of the forecast. 

10-11 

EERE-2007-BT-STD-0010 COMMENT 20.3
0 

2000 

4000 

6000 

8000 

10000 

12000 

14000 

2005 2010 2015 2020 2025 2030 

Btu/kWh 

Residential 

Commercial 

Figure 10.3.1	 Site-to-Source Conversion Factors for Electricity – 

Room Air Conditioners 

Figure 10.3.2 shows the site-to-source conversion factors for electricity between 2005 


and 2030 for clothes dryers. NEMS does not have a load shape for clothes dryers, so DOE used 


the refrigerator load shape as a proxy.
 

10-12 


EERE-2007-BT-STD-0010 COMMENT 20.3
Figure 10.3.2	 Site-to-Source Conversion Factors for Electricity – 

Clothes Dryers 

10.4 NET PRESENT VALUE 

The following sections provide the definition of NPV and inputs to the calculation of 

NPV. 

10.4.1 Definition of Net Present Value 

The NPV is the value in the present of a combination of costs and savings. The NPV is 

described by the equation: 

NPV = L(S( y) − C( y))× DF( y) 

y 

 Where: 

S(y) = value of operating cost savings (including energy, repair, and maintenance 

costs) in year y, 

C(y) = value of increased total installed costs (including products and installation), and 

DF(y)= discount factor in each year. 

10-13 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

DOE calculated the total annual savings in operating costs by multiplying the number or 

stock of a given product (by vintage) by its per-unit savings on operating costs (also by vintage). 

DOE calculated the total annual increases in installed costs by multiplying the number or stock 

of the given product (by vintage) by its per-unit total increase in installed costs (also by vintage). 

The calculation of the annual savings in operating costs and total annual increases in installed 

cost is represented by the following equations. 

OCS( y) = IUOCS( y) × AffStock ( y) 

TIC ( y) = IUTIC ( y)xS( y) 

Where: 

OCS = total annual savings in operating costs each year summed over vintages of 

the product stock considered, AffStock(y), 

TIC = total annual increase in installed cost each year summed over vintages of 

the product stock considered, AffStock(y), 

S(y) = stock of product (millions of units) of vintage V that survive in the year for 

which DOE calculated annual energy consumption, 


UOCS(y) = annual savings in operating cost per unit in year y, 


UTIC(y) = annual increase in total installed cost per unit in year y, and
 

y = year in forecast.
 

DOE calculated a discount factor from the discount rate and the number of years between 

the present (i.e., the year to which the sum is being discounted) and the year in which the costs 

and savings occur. The NPV is the sum over time of the discounted net savings. 

10.4.2 Inputs to Calculation of Net Present Value 

The inputs to calculations of NPV are: 

• total installed cost per unit, 

• annual savings in operating cost per unit, 

• total annual increases in installed cost, 

• total annual operating costs, 

• discount factor, 

• present value of costs, and 

• present value of savings. 

The increase in total annual installed cost is equal to the annual change in the per-unit 

total installed cost (difference between base case and standards cases) multiplied by the 

shipments forecasted for the standards case. As when calculating the NES, DOE did not use base 

case shipments to calculate total annual installed costs for all of the products. 

10-14 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

 

 

 

 

The total annual savings in operating costs are equal to the change in annual operating 

costs (difference between base case and standards case) per unit multiplied by the shipments 

forecasted in the standards case. The annual operating cost includes energy, repair, and 

maintenance costs, as described in chapter 8, Life-Cycle Cost and Payback Period Analyses. 

10.4.2.1 Total Installed Cost per Unit 

The per-unit total installed cost of each considered product is described in chapter 8 as a 

function of product energy efficiency. Because the per-unit total annual installed cost is directly 

dependent on energy efficiency, DOE used the shipments-weighted energy efficiencies of the 

base and standards cases described in section 10.2, in combination with the total installed costs 

developed in chapter 8, to estimate the shipments-weighted average annual per-unit total 

installed cost under the base and standards cases. 

 Room Air Conditioners. DOE based average room air conditioner consumer product 

costs on average manufacturer costs plus average overall markup values. Using the relationship 

between room air conditioner EER and total installed cost presented in chapter 8, DOE derived 

the per-unit total installed cost based on the shipments-weighted energy efficiencies that 

correspond to the base case and each standards case for the representative room air conditioner 

product classes (Table 10.4.1). 

Table 10.4.1	 Room Air Conditioners: Shipments-Weighted Average per-Unit Total 

Installed Cost in 2014 

Product Class Base 

Case 

Candidate Standard Level 

1 2 3 4 5 

Less than 6,000 

Btu/h, with 

Louvers 

IEER 9.52 10.10 10.60 11.10 11.60 12.00 

Total 

Installed Cost 

(2008$) $329 $337 $347 $362 $379 $389 

8,000–13,999 

Btu/h, with 

Louvers 

IEER 9.69 10.30 10.80 11.30 11.50 

Total 

Installed Cost 

(2008$) $489 $503 $517 $543 $602 

20,000 Btu/h or 

more, with 

Louvers 

IEER 8.47 9.00 9.40 9.80 10.00 

Total 

Installed Cost 

(2008$) $860 $884 $913 $951 $996 

8,000–13,999 

Btu/h, without 

Louvers 

IEER 8.41 8.90 9.30 9.80 

Total 

Installed Cost 

(2008$) $557 $562 $569 $590 

As noted in section 10.2, DOE assumed that forecasted energy efficiencies in the base 

and standards cases remain frozen at the levels existing in the effective year of the standard. 

10-15 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

 

 

 

 

Because per-unit total installed costs are a function of energy efficiency, DOE maintained the 

values shown in Table 10.4.1 constant throughout the forecast period. 

Clothes Dryers. Total installed cost for clothes dryers includes costs for both the product 

and the installation. DOE based average consumer product costs on average manufacturer costs 

multiplied by average overall markup values. Using the relationship between the Energy Factor 

(EF) for clothes dryers and total installed cost presented in chapter 8, DOE calculated the perunit total installed cost for clothes dryers, based on the shipments-weighted energy efficiencies 

that correspond to the base case and each standards case (Table 10.4.2). 

Table 10.4.2 Clothes Dryers: Shipments-Weighted Average per-Unit Total Installed Costs 

Product 

Class 

Base 

Case 

Candidate Standard Level 

1 2 3 4 5 6 

Vented 

Electric 

Standard 

EF 

(lb/kWh) 2.96 3.04 3.10 3.33 3.35 3.40 4.52 

Total 

Installed Cost 

(2008$) 552 571 651 703 705 704 953 

Vented 

Electric 

Compact 

120V 

EF 

(lb/kWh) 3.00 3.08 3.15 3.37 3.41 3.53 4.69 

Total 

Installed Cost 

(2008$) 553 570 651 702 704 703 934 

Vented 

Electric 

Compact 

240V 

EF 

(lb/kWh) 2.79 2.86 2.96 3.06 3.10 3.19 4.34 

Total 

Installed Cost 

(2008$) 553 570 651 702 704 703 934 

Vented Gas 

EF 

(lb/kWh) 2.63 2.71 2.80 2.97 2.98 3.02 

Total 

Installed Cost 

(2008$) 661 684 762 903 905 904 

Vent-less 

Electric 

Compact 

240V 

EF 

(lb/kWh) 2.29 2.31 2.37 2.39 2.59 3.54 

Total 

Installed Cost 

(2008$) 1,240 1,242 1,241 1,260 1,347 1,575 

Vent-less 

Electric 

Combination 

Washer/Dryer 

EF 

(lb/kWh) 1.90 2.15 2.34 2.36 2.42 3.31 

Total 

Installed Cost 

(2008$) 1,582 1,583 1,665 1,667 1,666 1,939 

As noted in section 10.2, DOE assumed that forecasted energy efficiencies in the base 

and standards cases remain constant at 2014 levels. Because per-unit total installed cost is a 

10-16 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

function of energy efficiency, DOE held the values shown in Table 10.4.2 constant throughout 

the forecast period. 

10.4.2.2 Annual Operating Cost Savings per Unit 

Per-unit annual operating cost represents the annual cost for energy. DOE determined the 

savings in per-unit annual energy cost for each product by multiplying the savings in per-unit 

annual energy consumption by the appropriate energy price. 

Estimates of per-unit annual energy consumption for the base case and each standards 

case were presented in section 10.3.2.1. DOE forecasted energy prices based on EIA’s AEO2009. 

The energy prices and price trends are described in chapter 8. 

10.4.2.3 Total Increases in Annual Installed Cost 

The increase in total annual installed cost for any given standards case is the product of 

the total installed cost increase per unit due to the standard and the number of units of each 

vintage. This approach accounts for differences in total installed cost from year to year. DOE 

used the following equation (also presented in section 10.4.1) to determine the increase in total 

annual installed cost for a given standards case. 

TIC ( y) = IUTIC ( y) × S( y) 

10.4.2.4 Total Savings in Annual Operating Cost 

The total savings in annual operating cost for any given standards case is the product of 

the annual operating cost savings per unit due to the standard and the number of units of each 

vintage. This approach accounts for differences in savings in annual operating cost from year to 

year. DOE used the following equation (also presented in section 10.4.1) to determine the total 

savings in annual operating cost for a given standards case. 

OCS( y) = IUOCS( y) × AffStock ( y) 

As discussed in chapter 8, the take-back in energy consumption associated with the 

rebound effect provides increased value to consumers (e.g., a more comfortable indoor 

environment). The net impact is the sum of the change in the cost of owning the product (that is, 

national consumer expenditures for total installed and operating costs) and the increased value of 

the enhanced service from the product. DOE believes that, if the increased national value (to 

consumers) produced by the rebound effect could be monetized, it would be similar to the 

monetary value of the foregone energy savings. For this analysis, DOE estimated that this 

increased value to consumers is equivalent to the monetary value of the energy savings that 

would have occurred without the rebound effect. The national economic impacts on consumers 

with or without the rebound effect, as measured by the NPV analysis, therefore are the same. 

10-17 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

10.4.2.5 Discount Factors 

DOE multiplies monetary values in future years by a discount factor to determine present 

values. The discount factor (DF) is described by the equation: 

1 DF = ( y y p ) (1+ r) _ 

 Where: 

r = discount rate, 


y = year of the monetary value, and 


yP = year in which the present value is being determined. 


DOE used both a 3-percent and a 7-percent real discount rate when estimating national 

impacts. These discount rates were applied in accordance with the Office of Management and 

Budget (OMB)’s guidance to Federal agencies on developing regulatory analyses (OMB Circular 

A-4, September 17, 2003, and section E., “Identifying and Measuring Benefits and Costs,” 

therein). 

DOE defines the present year as 2011, which is when it expects the final rule for this 

rulemaking to be published. 

10.4.2.6 Present Value of Costs 

The present value of increased installed costs is the annual increase in installed cost for 

each year (i.e., the difference between the standards case and base case), discounted to the 

present and summed over the period for which DOE is considering the installed products (from 

the effective date of energy conservation standards through 30 years later). 

The increase in total installed cost refers to both product and installation costs associated 

with the higher energy efficiency of products purchased in the standards case compared to the 

base case. DOE calculated annual increases in installed cost as the difference in total cost of new 

products installed each year, multiplied by the shipments in the standards case. 

10.4.2.7 Present Value of Savings 

The present value of savings in operating cost is the annual savings in operating cost (i.e., 

the difference between the base case and standards case), discounted to the present and summed 

over the period that begins with the effective date of standards and ends when the last installed 

unit is retired from service. 

Savings represent decreases in operating cost (including costs for energy, repair, and 

maintenance) associated with the higher energy efficiency of products purchased in a standards 

case compared to the base case. Total annual savings in operating cost are the savings per unit 

multiplied by the number of units of each vintage that survive in a particular year. Because 

10-18 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

equipment consumes energy throughout its lifetime, the energy consumption for units installed in 

the past year includes energy consumed until the unit is retired from service. 

10.5 NES AND NPV RESULTS 

The NIA model provides estimates of the NES and NPV that would result from standards 

at various efficiency levels. The inputs to the NIA model were discussed in sections 10.3.2 (NES 

Inputs) and 10.4.2 (NPV Inputs). DOE generated the NES and NPV results using a Microsoft 

Excel spreadsheet, which is accessible on the Internet 

(www.eere.energy.gov/buildings/appliance_standards/). Details and instructions for using the 

spreadsheet are provided in appendix 9-A, User Instructions for Shipments and National Energy 

Savings Spreadsheet Model, in the section titled, “NES and NPV Input Summary.” 

Table 10.5.1 summarizes inputs to the NIA model. 

Table 10.5.1 Inputs to National Energy Savings and Net Present Value 

Input Data Description 

Shipments Annual shipments from shipments model (see chapter 9). 

Effective Date of Standard 2014. 

Energy Efficiency in Base Case Shipments-weighted unit energy consumption (UEC) 

determined for each year. 

Energy Efficiency in Standards Cases “Roll-up” scenario assumed for determining shipmentsweighted UEC for each standards case (see section 10.2.). 

Annual Energy Consumption per Unit Annual weighted-average values are a function of shipmentsweighted UEC. 

Total Installed Cost per Unit Annual weighted-average values are a function of efficiency 

level. 

Energy Cost per Unit Annual weighted-average values are a function of the annual 

UEC and energy prices (see chapter 8 for energy prices). 

Repair Cost and Maintenance Cost per 

Unit 

Annual values are a function of efficiency level (see chapter 8). 

Escalation of Energy Prices Based on EIA AEO2009 forecasts (to 2030) and on 

extrapolation after 2030 (see chapter 8). 

Energy Site-to-Source Conversion 

Factor 

Conversion, which differs yearly, is generated by DOE/EIA’s 

NEMS program (a time-series conversion factor that includes 

electric generation, transmission, and distribution losses). 

Discount Rate 3 percent and 7 percent real. 

Present Year 2011. 

10.5.2 National Energy Savings Results 

The following sections provide results of calculating NES for the two products in the 

standards cases. NES results, which are cumulative to 2044, are shown as primary energy 

savings. Because DOE based the inputs to the NIA model on weighted-average values, results 

10-19 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

 

are discrete point values, rather than a distribution of values as produced by the LCC and PBP 

analyses. DOE reports both undiscounted and discounted values of energy savings. Discounted 

energy savings represent a policy perspective where energy savings farther in the future are less 

significant than energy savings closer to the present 

10.5.2.1 Room Air Conditioners 

Tables 10.5.2 through 10.5.4 show the NES results for the CSLs analyzed for each room 

air conditioner product class group. See section 10.1 for description of the product classes 

contained in each group. 

Table 10.5.2 Room Air Conditioners: Cumulative National Energy Savings in Quads 

Product Class 

Candidate Standard Level 

1 2 3 4 5 

Group 1 - based on Less than 6,000 

Btu/h, with Louvers 

0.15 0.26 0.37 0.46 0.52 

Group 2 - based on 8,000–13,999 

Btu/h, with Louvers 

0.16 0.29 0.49 0.64 

Group 3 - based on 20,000 Btu/h or 

more, with Louvers 

0.01 0.02 0.04 0.05 

Group 4 - based on 8,000–13,999 

Btu/h, with Louvers 

0.02 0.03 0.07 

Table 10.5.3 Room Air Conditioners: Cumulative National Energy Savings in Quads, 

Discounted at 3 Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 

Group 1 - based on Less than 6,000 

Btu/h, with Louvers 

0.09 0.15 0.21 0.27 0.30 

Group 2 - based on 8,000–13,999 

Btu/h, with Louvers 

0.09 0.17 0.29 0.37 

Group 3 - based on 20,000 Btu/h or 

more, with Louvers 

0.01 0.01 0.02 0.03 

Group 4 - based on 8,000–13,999 

Btu/h, with Louvers 

0.01 0.02 0.04 

10-20 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

Table 10.5.4 Room Air Conditioners: Cumulative National Energy Savings in Quads, 

Discounted at 7 Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 

Group 1 - based on Less than 6,000 

Btu/h, with Louvers 

0.05 0.08 0.11 0.14 0.16 

Group 2 - based on 8,000–13,999 

Btu/h, with Louvers 

0.05 0.09 0.15 0.20 

Group 3 - based on 20,000 Btu/h or 

more, with Louvers 

0.00 0.01 0.01 0.01 

Group 4 - based on 8,000–13,999 

Btu/h, with Louvers 

0.01 0.01 0.02 

10.5.2.2 Clothes Dryers 

Tables 10.5.5 through 10.5.7 show the results of calculating NES for the CSLs analyzed 

for clothes dryers. 

Table 10.5.5 Clothes Dryers: Cumulative National Energy Savings in Quads 

Product Class Candidate Standard Level 

1 2 3 4 5 6 

Vented Electric Standard 0.08 0.20 0.77 0.84 1.04 2.45 

Vented Electric Compact 120V 0.00 0.00 0.00 0.00 0.00 0.00 

Vented Electric Compact 240V 0.00 0.00 0.00 0.00 0.01 0.01 

Vented Gas 0.01 0.05 0.12 0.14 0.19 

Vent-less Electric Compact 240V 0.00 0.00 0.00 0.01 0.01 

Vent-less Electric Combination Washer/Dryer 0.01 0.01 0.01 0.01 0.02 

Table 10.5.6 Clothes Dryers: Cumulative National Energy Savings in Quads, Discounted 

at 3 Percent 

Product Class Candidate Standard Level 

1 2 3 4 5 6 

Vented Electric Standard 0.04 0.11 0.42 0.46 0.57 1.34 

Vented Electric Compact 120V 0.00 0.00 0.00 0.00 0.00 0.00 

Vented Electric Compact 240V 0.00 0.00 0.00 0.00 0.00 0.01 

Vented Gas 0.01 0.02 0.06 0.07 0.10 

Vent-less Electric Compact 240V 0.00 0.00 0.00 0.01 0.01 

Vent-less Electric Combination Washer/Dryer 0.00 0.00 0.00 0.01 0.01 

10-21 

EERE-2007-BT-STD-0010 COMMENT 20.3
Table 10.5.7 Clothes Dryers: Cumulative National Energy Savings in Quads, Discounted 

at 7 Percent 

Product Class Candidate Standard Level 

1 2 3 4 5 6 

Vented Electric Standard 0.02 0.06 0.21 0.23 0.28 0.67 

Vented Electric Compact 120V 0.00 0.00 0.00 0.00 0.00 0.00 

Vented Electric Compact 240V 0.00 0.00 0.00 0.00 0.00 0.00 

Vented Gas 0.00 0.01 0.03 0.04 0.05 

Vent-less Electric Compact 240V 0.00 0.00 0.00 0.00 0.00 

Vent-less Electric Combination Washer/Dryer 0.00 0.00 0.00 0.00 0.01 

10.5.3 Annual Costs and Savings 

Figure 10.5.1 illustrates the basic inputs to calculations of the NPV for the example of the 

non-discounted annual increases in installed cost and annual savings in operating cost for room 

air conditioner product class 3 under CSL 1. The figure also shows net savings, which is the 

difference between the savings and costs for each year. The annual product cost is the sum of the 

increase in the total installed cost for products purchased each year during the forecast period. 

The annual savings in operating cost is the savings for products operating in each year. The NPV 

is the difference between the cumulative annual discounted savings and the cumulative annual 

discounted costs. Figures similar to the one presented below could be created from analysis data 

for each of the considered products’ standard cases. 

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EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

-$0.04 

-$0.02 

$0.00 

$0.02 

$0.04 

$0.06 

$0.08 

$0.10 

$0.12 

$0.14 

$0.16 

2014 2024 2034 2044 

Billions of 2008 Dollars 

Commercial Operating Cost 

Savings 

Commercial Equipment Cost 

Residential Operating Cost Saving 

Residential Equipment Cost 

Figure 10.5.2 Non-Discounted Changes in Annual Installed Cost 

and Operating Cost for Room Air Conditioner 

Product Class Group 1 at CSL 1 

10.5.4 Consumer Net Present Value Results 

The following sections provide results from calculations of consumer NPV that would 

result from each of the CSLs considered for the product classes of room air conditioners and 

clothes dryers. Results, which are cumulative, are shown as the discounted value of the net 

savings in dollar terms. Because DOE based the inputs to the NIA model on weighted-average 

values, results are discrete point values, rather than a distribution of values as produced by the 

LCC and PBP analyses. 

The present value of total increased installed costs is the total annual increase in installed 

cost (i.e., the difference between the standards case and base case), discounted to the present and 

summed over the period for which DOE evaluates the impact of energy conservation standards. 

Savings are decreases in operating costs associated with the higher energy efficiency of products 

purchased in the standards cases compared to the base case. Total savings in operating cost are 

the savings per unit multiplied by the number of units of each vintage (year of manufacture) that 

survive in a particular year. For units purchased through the final year (2043), the operating cost 

includes energy consumed until the last unit is retired from service. 

10-23 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

 

 

 

 

10.5.4.1 Room Air Conditioners 

Tables 10.5.8 through 10.5.9 show the results of calculating the NPV for the CSLs 

analyzed for each room air conditioner product class group. See section 10.1 for description of 

the product classes contained in each group. A negative NPV indicates that the costs of a 

standard at a given efficiency level exceed the savings. 

Table 10.5.8	 Room Air Conditioners: Cumulative Consumer Net Present Value, 

Discounted at 3 Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 

Billion 2008$ 

Group 1 - based on Less than 

6,000 Btu/h, with Louvers 

1.54 2.52 3.09 3.47 3.83 

Group 2 - based on 8,000­

13,999 Btu/h, with Louvers 

1.43 2.37 2.60 -0.68 

Group 3 - based on 20,000 

Btu/h or more, with Louvers 

0.10 0.16 0.21 0.09 

Group 4 - based on 8,000­

13,999 Btu/h, with Louvers 

0.22 -0.78 -0.54 

Table 10.5.9 Room Air Conditioners: Cumulative Consumer Net Present Value, 

Discounted at 7 Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 

Billion 2008$ 

Group 1 - based on Less than 

6,000 Btu/h, with Louvers 

0.68 1.08 1.27 1.35 1.46 

Group 2 - based on 8,000­

13,999 Btu/h, with Louvers 

0.59 0.95 0.78 -1.37 

Group 3 - based on 20,000 

Btu/h or more, with Louvers 

0.04 0.06 0.06 -0.01 

Group 4 - based on 8,000­

13,999 Btu/h, with Louvers 

0.10 -0.38 -0.30 

10.5.4.2 Clothes Dryers 

Tables 10.5.10 and 10.5.11 show the consumer NPV results for the CSLs analyzed for 

each clothes dryer product class. A negative NPV indicates that the costs of a standard at a given 

efficiency level exceed the savings. 

10-24 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

Table 10.5.10 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 

3 Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 6 

Billion 2008$ 

Vented Electric Standard 0.21 -6.83 -6.40 -5.76 -3.09 -10.66 

Vented Electric Compact 120V 0.00 -0.02 -0.03 -0.03 -0.02 -0.05 

Vented Electric Compact 240V 0.00 -0.07 -0.11 -0.10 -0.07 -0.20 

Vented Gas -0.12 -1.85 -5.80 -5.62 -4.91 

Vent-less Electric Compact 240V 0.00 0.02 0.01 0.08 -0.10 

Vent-less Electric Combination Washer/Dryer 0.06 0.04 0.04 0.06 -0.05 

Table 10.5.11 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 7 

Percent 

Product Class 

Candidate Standard Level 

1 2 3 4 5 6 

Billion 2008$ 

Vented Electric Standard -0.03 -4.26 -5.06 -4.83 -3.69 -10.60 

Vented Electric Compact 120V 0.00 -0.01 -0.02 -0.02 -0.02 -0.03 

Vented Electric Compact 240V 0.00 -0.04 -0.07 -0.06 -0.05 -0.14 

Vented Gas -0.09 -1.13 -3.50 -3.43 -3.13 

Vent-less Electric Compact 240V 0.00 0.01 0.00 0.02 -0.08 

Vent-less Electric Combination Washer/Dryer 0.03 0.00 0.01 0.01 -0.06 

10.6	 IMPACT OF STANDARDS ON NATURAL GAS PRICES AND ASSOCIATED 

NATIONAL BENEFITS 

The NIA described in the preceding sections examines the potential impacts of alternative 

standard levels on consumers of the products being considered. To evaluate potentially important 

indirect effects of energy conservation standards on energy users in general, DOE analyzed the 

potential impact on natural gas prices resulting from amended standards on clothes dryers and 

room air conditioners, and the associated benefits for all natural gas consumers in all sectors of 

the economy. 

For this analysis, DOE considered two scenarios for standards: one with efficiency levels 

at CSL 1 for each product class, and the other with max-tech efficiency levels. Tables 9.6.1 and 

9.6.2 in chapter 9 show the energy efficiency levels corresponding to CSL 1 and max-tech 

(which is the highest CSL for each product class). The scenarios bracket the range of impacts 

that could result from amended standards on clothes dryers and room air conditioners. 

10.6.1 Impact on Natural Gas Prices 

Figure 10.6.1 shows the annual change in U.S. natural gas consumption, relative to the 

base case with no new standards, for each considered scenario. Because the standards decrease 

10-25 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

electricity demand, and a significant percentage of electricity is generated using natural gas, the 

standards reduce natural gas consumption in the utility sector as well as the residential sector. 

Change in Gas Consumption 

-0.060 

-0.050 

-0.040 

-0.030 

-0.020 

-0.010 

0.000 

0.010 

0.020 

2015 2018 2021 2024 2027 2030 

quads 

EL1 

Max Tech 

Figure 10.6.1 Change in U.S. Natural Gas Consumption 

Associated with Scenarios for Room Air Conditioner 

and Clothes Dryer Standards 

As described in chapter 13, Utility Impact Analysis, using NEMS-BT to analyze impacts 

of relatively small annual changes in energy consumption typically involves using higherdecrement runs to isolate the impacts of the standards from numerical noise. After generating 

results using higher decrements to gas consumption, DOE utilized a regressed interpolation 

toward the origin to derive the price effects associated with the energy savings resulting from 

each considered scenario. 

Figure 10.6.2 shows the annual change in average U.S. wellhead price for natural gas, 

relative to the base case, for each considered standards scenario. The price reduction averages 

0.1 cents per MMBtu (in 2008$) under CSL 1 and 1.2 cents per MMBtu (in 2008$) under the 

max-tech scenario. 

10-26 

EERE-2007-BT-STD-0010 COMMENT 20.3
 

 

Change in Wellhead Prices 

-0.030 

-0.025 

-0.020 

-0.015 

-0.010 

-0.005 

0.000 

0.005 

0.010 

0.015 

2015 2018 2021 2024 2027 2030 

2007$/MMBtu

EL1 

Max Tech 

Figure 10.6.2	 Effects of Standards Scenarios on Average Wellhead 

Natural Gas Prices 

10.6.2 Impact of Changes in Natural Gas Price on Gas Users 

Although NEMS indicates that amended standards for clothes dryers and room air 

conditioners would reduce natural gas prices by only a small amount, the associated economywide savings in natural gas expenditures during the forecast period are substantial. DOE 

calculated the nominal savings in total natural gas expenditures in each year by multiplying the 

annual change in the average-user price for natural gas by the total annual U.S. natural gas 

consumption forecast by NEMS.a

 The amended standards would continue to reduce demand for 

natural gas after 2030 (which is the last year in the NEMS forecast). The estimate for 2031–2045 

(the period used to estimate the NPV of the national consumer benefits from amended standards) 

applies the average gas price reduction in 2015–2030 to estimated total annual gas consumption 

in 2031–2045.b

 DOE then discounted the stream of reduced expenditures to calculate a NPV. 

Table 10.6.3 shows the calculated NPV of the economy-wide savings in natural gas 

expenditures for each considered scenario at 3-percent and 7-percent discount rates. The need to 

extrapolate price effects and gas consumption beyond 2030 suggests that one should interpret the 

results as a rough indication of the benefits to natural gas users post-2030. 

a

 The average user includes electric utilities. Presumably the decrease in expenditures of natural gas that they 

experience would largely be passed on to electricity consumers. 

b

 The estimation of gas consumption after 2030 uses the average annual growth rate in 2026–2030 from the 

AEO2009 reference projection. 

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Table 10.6.1	 Cumulative NPV of the Economy-Wide Savings in Natural Gas 

Expenditures Due to the Projected Decline in Natural Gas Prices 

Resulting from Amended Standards for Room Air Conditioners and 

Clothes Dryers 

CSL 1 

(billion $2008) 

Max-Tech 

(billion $2008) 

2013–2030 

3 percent 0.297 2.51 

7 percent 0.157 1.35 

2013–2045 

3 percent 0.482 6.58 

7 percent 0.224 3.24 

In the short run, DOE’s preliminary analysis indicates that consumer savings from lower 

natural gas prices would be offset by declines in gas producer revenue. In the long run, the 

analyses indicate that the reduction in natural gas prices mainly results from changes in gas 

extraction costs. Since there is only a limited supply of low-cost, conventional natural gas 

sources, natural gas extraction costs rise over time as these low-cost sources are depleted. 

Reduced gas demand puts downward pressure on extraction costs and prices by delaying the 

depletion of the low-cost reserves and the shift toward higher-cost sources. 

DOE recognizes that there is uncertainty about the magnitude, distribution, and timing of 

the costs and benefits within the economy. While some benefit to gas users seems likely, DOE is 

uncertain of the effects of the drop in natural gas price on producers and distributors of natural 

gas. While their revenues and costs are expected to drop, it is uncertain whether they will drop in 

proportion over time. Gas producers will likely experience some revenue loss due to both the 

price changes and the reduction in gas sales that they will experience. However, DOE’s previous 

preliminary analysis suggests that a large part of the long-term decreases in wellhead prices 

forecasted by NEMS represents both a benefit to consumers of natural gas and a net benefit to 

society. 

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REFERENCES
 

1. 	Energy Information Administration, Updated Annual Energy Outlook 2009 Reference 

Case Service Report, 2009. Washington, DC. Report No. DOE/EIA-0383(2009). 

<http://www.eia.doe.gov/oiaf/aeo/> 

2. 	 Ryan Wiser, Mark Bolinger, and Matt St. Clair, Easing the Natural Gas Crisis: Reducing 

Natural Gas Prices through Increased Deployment of Renewable Energy and Energy 

Efficiency, January, 2005. Lawrence Berkeley National Laboratory. Report No. 56756. 

3. 	 Natural Gas, Fuel Diversity and North American Energy markets, September 2003. 

Energy Modeling Forum, Stanford University. Report No. EMF Report 20. 

4. 	 Balancing Natural Gas Policy - Fueling the Demands of a Growing Economy, Vol. I 

Summary of Findings and Recommendations, September 25, 2003. National Petroleum 

Council. 

5. 	 National Commission on Energy Policy, Increasing U.S. Natural Gas Supplies: A 

Discussion Paper and Recommendations from the National Commission on Energy 

Policy, October, 2003. <www.energycommission.org> 

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