Friday, 

January 8, 2010 

Part II 

Department of 

Energy 

10 CFR Part 431 

Energy Conservation Program: Energy 

Conservation Standards for Certain 

Consumer Products (Dishwashers, 

Dehumidifiers, Microwave Ovens, and 

Electric and Gas Kitchen Ranges and 

Ovens) and for Certain Commercial and 

Industrial Equipment (Commercial 

Clothes Washers); Final Rule 


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1122 Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket Number EERE–2006–STD–0127] 

RIN 1904–AB93 

Energy Conservation Program: Energy 

Conservation Standards for Certain 

Consumer Products (Dishwashers, 

Dehumidifiers, Microwave Ovens, and 

Electric and Gas Kitchen Ranges and 

Ovens) and for Certain Commercial 

and Industrial Equipment (Commercial 

Clothes Washers) 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final rule. 

SUMMARY: The U.S. Department of 

Energy (DOE) is adopting amended 

energy conservation standards for 

commercial clothes washers (CCWs). 

DOE has determined that amended 

energy conservation standards for these 

types of equipment would result in 

significant conservation of energy, and 

are technologically feasible and 

economically justified. 

DATES: The effective date of this rule is 

March 9, 2010. The standards 

established in today’s final rule will be 

applicable starting January 8, 2013. 

ADDRESSES: For access to the docket to 

read background documents, the 

technical support document, transcripts 

of the public meetings in this 

proceeding, or comments received, visit 

the U.S. Department of Energy, Resource 

Room of the Building Technologies 

Program, 950 L’Enfant Plaza, SW., 6th 

Floor, Washington, DC 20024, (202) 

586–2945, between 9 a.m. and 4 p.m., 

Monday through Friday, except Federal 

holidays. Please call Brenda Edwards at 

the above telephone number for 

additional information regarding 

visiting the Resource Room. (Note: 

DOE’s Freedom of Information Reading 

Room no longer houses rulemaking 

materials.) You may also obtain copies 

of certain previous rulemaking 

documents in this proceeding (i.e., 

framework document, advance notice of 

proposed rulemaking, notice of 

proposed rulemaking, supplemental 

notice of proposed rulemaking), draft 

analyses, public meeting materials, and 

related test procedure documents from 

the Office of Energy Efficiency and 

Renewable Energy’s Web site at http:// 

www1.eere.energy.gov/buildings/ 

appliance_standards/commercial/ 

clothes_washers.html. 

FOR FURTHER INFORMATION CONTACT: 

Stephen Witkowski, U.S. Department of 

Energy, Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, EE–2J, 1000 

Independence Avenue, SW., 

Washington, DC 20585 Telephone: (202) 

586–7463. E-mail: 

Stephen.Witkowski@ee.doe.gov. 

Francine Pinto, Esq. or Betsy Kohl, 

Esq., U.S. Department of Energy, Office 

of General Counsel, GC–71/72, 1000 

Independence Avenue, SW., 

Washington, DC 20585. Telephone: 

(202) 586–7432, (202) 586–7796. E-mail: 

Francine.Pinto@hq.doe.gov, 

Elizabeth.Kohl@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Final Rule and Its Benefits 

A. The Standard Levels 

B. Current Federal Standards for 

Commercial Clothes Washers 

C. Benefits to Consumers of Commercial 

Clothes Washers 

D. Impact on Manufacturers 

E. National Benefits 

F. Conclusion 

II. Introduction 

A. Consumer Overview 

B. Authority 

C. Background 

1. Current Standards 

2. History of Standards Rulemaking 

III. General Discussion 

A. Test Procedures 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

C. Energy Savings 

D. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Commercial 

Consumers and Manufacturers 

b. Life-Cycle Costs 

c. Energy Savings 

d. Lessening of Utility or Performance of 

Equipment 

e. Impact of Any Lessening of Competition 

f. Need of the Nation To Conserve Energy 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion of 

Comments on Methodology 

A. Equipment Classes 

B. Technology Assessment 

C. Engineering Analysis 

1. Efficiency Levels 

2. Manufacturing Costs 

D. Life-Cycle Cost and Payback Period 

Analysis 

1. Equipment Prices 

2. Installation Cost 

3. Annual Energy Consumption 

4. Energy and Water Prices 

a. Energy Prices 

b. Water and Wastewater Prices 

5. Repair and Maintenance Costs 

6. Equipment Lifetime 

7. Discount Rates 

8. Effective Date of the Amended Standards 

9. Equipment Energy Efficiency in the Base 

Case 

10. Split Incentive Between CCW 

Consumers and Users 

11. Rebound Effect 

12. Inputs to Payback Period Analysis 

13. Rebuttable-Presumption Payback 

Period 

E. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

1. General 

2. Shipments 

a. New Construction Shipments 

b. Replacements and Non-replacements 

c. Impacts of Standards on Shipments 

3. Other Inputs 

a. Base-Case Forecasted Efficiencies 

b. Standards-Case Forecasted Efficiencies 

c. Annual Energy Consumption 

d. Site-to-Source Conversion 

e. Energy Used in Water and Wastewater 

Treatment and Delivery 

f. Total Installed Costs and Operating Costs 

g. Discount Rates 

h. Effects of Standards on Energy Prices 

F. Consumer Subgroup Analysis 

G. Manufacturer Impact Analysis 

H. Employment Impact Analysis 

I. Utility Impact Analysis 

J. Environmental Assessment 

K. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

V. Discussion of Other Comments 

A. Proposed Trial Standard Levels (TSLs) 

for Commercial Clothes Washers 

B. Proposed Standards for Commercial 

Clothes Washers 

VI. Analytical Results and Conclusions 

A. Trial Standard Levels 

B. Significance of Energy Savings 

C. Economic Justification 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

b. Commercial Consumer Subgroup 

Analysis 

c. Rebuttable-Presumption Payback 

2. Economic Impacts on Manufacturers 

a. Industry Cash-Flow Analysis Results 

b. Cumulative Regulatory Burden 

c. Impacts on Employment 

d. Impacts on Manufacturing Capacity 

e. Impacts on Subgroups of Manufacturers 

3. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

b. Net Present Value of Customer Costs and 

Benefits 

c. Impacts on Employment 

4. Impact on Utility or Performance of 

Equipment 

5. Impact of Any Lessening of Competition 

6. Need of the Nation To Conserve Energy 

7. Other Factors 

D. Conclusion 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act 

D. Review Under the National 

Environmental Policy Act 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 


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1 42 U.S.C. 6291 et seq. 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under Executive Order 12630 

J. Review Under the Treasury and General 

Government Appropriations Act, 2001 

K. Review Under Executive Order 13211 

L. Review Under the Information Quality 

Bulletin for Peer Review 

M. Congressional Notification 

VIII. Approval of the Office of the Secretary 

I. Summary of the Final Rule and Its 

Benefits 

A. The Standard Levels 

The Energy Policy and Conservation 

Act 1 (EPCA), as amended (42 U.S.C. 

6291 et seq.; EPCA), directs the 

Department of Energy (DOE) to consider 

amended mandatory energy 

conservation standards for CCWs. (42 

U.S.C. 6313(e)(2)(A)) Any such 

amended energy conservation standard 

must be designed to ‘‘achieve the 

maximum improvement in energy 

efficiency * * * which the Secretary 

determines is technologically feasible 

and economically justified.’’ (42 U.S.C. 

6295(o)(2)(A) and 6316(a)) Furthermore, 

any new or amended standard must 

‘‘result in significant conservation of 

energy.’’ (42 U.S.C. 6295(o)(3)(B) and 

6316(a)) The standards in today’s final 

rule, which apply to all CCWs, satisfy 

these and other statutory criteria 

discussed in this notice. 

Table I.1 shows the amended standard 

levels that DOE is adopting today. These 

standards will apply to all CCWs 

manufactured for sale in the United 

States, or imported to the United States, 

on or after January 8, 2013. 

TABLE I.1—AMENDED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL CLOTHES WASHERS

Equipment class 

Amended energy 

conservation 

standards 

Top-loading commercial clothes washers.1.60 Modified Energy 

Factor/8.5 Water 

Factor. 

Front-loading commercial clothes 

washers.

2.00 Modified Energy 

Factor/5.5 Water 

Factor. 

B. Current Federal Standards for 

Commercial Clothes Washers 

EPCA, as amended by the Energy 

Policy Act of 2005 (EPACT 2005), 

prescribes standards for CCWs 

manufactured on or after January 1, 

2007. (42 U.S.C. 6313(e)) These 

standards require that CCWs have a 

modified energy factor (MEF) of at least 

1.26 and a water factor (WF) of not more 

than 9.5. (Id.; 10 CFR 431.156) 

C. Benefits to Consumers of Commercial 

Clothes Washers 

Table I.2 indicates the impacts on 

commercial consumers of today’s 

amended standards. The economic 

impacts of the amended CCW standards 

on commercial consumers as measured 

by the average life-cycle cost (LCC) 

savings are positive, even though the 

standards may increase some initial 

costs. For example, typical top-loading 

CCWs—the most common type 

currently being sold—have an average 

installed price of $760 and average 

lifetime operating costs (discounted) of 

$3,286. To meet the amended standards, 

DOE estimates that the average installed 

price of such equipment will increase 

by $214, which will be more than offset 

by savings of $394 in average lifetime 

operating costs (discounted). 

TABLE I.2—IMPLICATIONS OF AMENDED STANDARDS FOR COMMERCIAL CONSUMERS

Equipment class Energy conservation standard 

Average installed 

price * 

$ 

Average installed price 

increase 

$ 

Average 

life-cycle 

cost savings 

$ 

Median payback period 

years 

Top-loading CCWs ............. 1.60 Modified Energy Factor/8.5 Water Factor .............. 974 214 180 4.3 

Front-loading CCWs ........... 2.00 Modified Energy Factor/5.5 Water Factor .............. 1,365 23 ** 20 ** 0.4 

* For a baseline model. 

** DOE estimates that 96 percent of front-loading CCW consumers would purchase a model at the standard level even without amended 

standards. The values refer to average impacts for the 4 percent of consumers who would be affected by the standard. 

D. Impact on Manufacturers 

Using a real corporate discount rate of 

7.2 percent, DOE estimates the industry 

net present value (INPV) of the CCW 

industry to be approximately $62 

million in 2008$. DOE expects the 

impact of today’s standards on the INPV 

of manufacturers of CCWs to be a loss 

of between 7.8 percent and 11.4 percent 

of the INPV, which is approximately $5 

to $7 million. Based on DOE’s 

interviews with the manufacturers of 

CCWs, DOE expects possible loss of 

employment for one manufacturer as a 

result of the standards. 

E. National Benefits 

DOE estimates that the energy 

conservation standards will save a 

significant amount of energy—an 

estimated 0.10 quadrillion British 

thermal units (Btu), or quads, of 

cumulative energy over 30 years (2013– 

2043). This amount is equivalent to 2 

days of U.S. gasoline use. In addition, 

DOE estimates the standards for CCWs 

will save over 143 billion gallons of 

cumulative water consumption over 30 

years (2013–2043). 

The national net present value (NPV) 

of CCW consumer benefit resulting from 

the standards, considering the impacts 

of equipment sold in 2013–2043, is $0.4 

billion using a 7-percent discount rate 

and $0.9 billion using a 3-percent 

discount rate, in 2008$. This is the 

estimated total value of future operating 

cost savings minus the estimated 

increased equipment costs, discounted 

to 2009. The NPV for consumers (at the 

7-percent discount rate) would exceed 

industry losses, discussed above, due to 

energy efficiency standards by at least 

80 times. 

By 2043, DOE expects the energy 

savings from the standards to eliminate 

the need for approximately 18 MW of 

electricity generating capacity. The 

energy savings will result in cumulative 

greenhouse gas emissions reductions in 

2013–2043 of approximately 5.1 million 

tons (Mt) of carbon dioxide (CO2), or an 

amount equal to that produced by 

approximately 5.1 million new cars in a 

year. Additionally, the standards will 

help alleviate air pollution by resulting 

in approximately 3.0 kilotons (kt) of 

cumulative nitrogen oxide (NOX) 

emission reductions and 0.0003 tons of 

cumulative mercury (Hg) emission 

reductions. The estimated net present 

monetary values of these emissions 

reductions at a 7-percent discount rate 

(discounted to 2009 and expressed in 

2008$) are between $13 and $140 

million for CO2, between $0.4 and $4.2 


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million for NOX, and between $0.0 and 

$0.6 million for Hg. At a 3-percent 

discount rate, the estimated net present 

values of these emissions reductions 

(discounted to 2009 and expressed in 

2008$) are between $28 and $303 

million for CO2, between $0.8 million 

and $8.4 million for NOX, and between 

$0.0 and $0.6 million for Hg. 

The benefits and costs of today’s final 

rule can also be expressed in terms of 

annualized values. Estimates of 

annualized values for three economic 

growth cases are shown in Table I.3. 

The annualized monetary values are the 

sum of the annualized national 

economic value of operating savings 

benefits (energy, maintenance and 

repair), plus the monetary values of the 

benefits of carbon dioxide emission 

reductions, monetized using a value of 

$20 per metric ton of carbon dioxide. 

The $20 value is a central interim value 

from a recent interagency process, as 

discussed in section VI.C.6. Although 

summing the value of operating savings 

to the values of CO2 reductions provides 

a valuable perspective, please note the 

following. The national operating 

savings are domestic U.S. consumer 

monetary savings found in market 

transactions while the CO2 value is 

based on a range of estimates of imputed 

marginal social cost of carbon, which 

are meant to reflect the global benefits 

of CO2 reductions. Furthermore, the 

assessments of operating savings and 

CO2 savings are performed with 

different computer models, leading to 

different time frames for analysis. The 

present value of national operating 

savings considers the impacts of 

equipment sold in 2013–2043. The 

value of CO2, on the other hand is meant 

to reflect the present value of all future 

climate-related impacts, which go well 

beyond the lifetime of the equipment 

sold in the forecast period. 

Using a 7-percent discount rate for the 

annualized cost analysis, the cost of the 

standards established in today’s final 

rule for CCWs is $23.4 million per year 

in increased equipment and installation 

costs, while the annualized benefits are 

$60.6 million per year in reduced 

equipment operating costs and $5.1 

million in CO2 reductions, for a net 

benefit of $42.2 million per year. Using 

a 3-percent discount rate, the cost of the 

standards established in today’s final 

rule is $22.7 million per year in 

increased equipment and installation 

costs, while the benefits of today’s 

standards are $72.8 million per year in 

reduced operating costs and $5.9 

million in CO2 reductions, for a net 

benefit of $56.0 million per year. 

TABLE I.3—ANNUALIZED BENEFITS AND COSTS OF AMENDED STANDARDS FOR COMMERCIAL CLOTHES WASHERS (TSL 3) 

Category Unit 

Primary estimate 

(AEO reference case) 

Low estimate 

(AEO low-growth case) 

High estimate 

(AEO high-growth case) 

7% 3% 7% 3% 7% 3% 

Benefits 

Monetized Operating Cost Savings Million 2008$ ...... 60.6 72.8 54.9 65.3 66.6 80.4 

Quantified Emissions Reductions ... CO2 (Mt) ............. 0.14 0.16 0.14 0.16 0.14 0.16 

NOX (kt) ............. 0.087 0.194 0.087 0.194 0.087 0.194 

Hg (t) .................. 0.0002 0.0001 0.0002 0.0001 0.0002 0.0001 

Monetized Avoided Emissions Reductions (Million 2008$).CO2 .................... 5.1 5.9 5.1 5.9 5.1 5.9 

NOX .................... 0.2 0.3 0.2 0.3 0.2 0.3 

Hg ....................... 0.0 0.0 0.0 0.0 0.0 0.0 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ...... 23.4 22.7 21.9 20.9 24.6 23.9 

Net Benefits 

Monetized Value ............................. Million 2008$ ...... 42.5 56.3 38.3 50.6 47.3 62.7 

* For CO2, benefits reflect value of $20/t, which is in the middle of the values considered by DOE for valuing the potential global benefits resulting from reduced CO2 emissions. For NOX and Hg, the benefits reflect values of $2,491/t and $17 million/t, respectively. These values are the 

midpoint of the range considered by DOE. 

F. Conclusion 

The benefits (energy savings, LCC 

savings for CCW consumers, positive 

national NPV, and emissions 

reductions) to the Nation of the 

standards outweigh their costs (loss of 

manufacturer INPV and LCC increases 

for some CCW consumers). Today’s 

standards also represent the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified, and will result 

in significant energy savings. At present, 

CCWs that meet the amended standard 

levels are commercially available. 

II. Introduction 

A. Consumer Overview 

DOE is amending in today’s final rule 

energy conservation standard levels for 

CCWs as shown in Table I.1. These 

standards apply to equipment 

manufactured or imported on or after 

January 8, 2013. 

DOE research suggests that 

commercial consumers will see benefits 

from today’s standards even though 

DOE expects the purchase price of the 

high efficiency CCWs to increase (by 2 

to 28 percent) from the average price of 

this equipment today. However, the 

energy efficiency gains are expected to 

result in lower energy and water costs, 

saving consumers $53 to $103 per year 

on their energy and water bills, again 

depending on the equipment class. 

When these savings are summed over 

the lifetime of the equipment, 

consumers are expected to save an 

average of $20 to $190, depending on 

the equipment class, utility costs, and 

other factors. DOE estimates that the 

payback period (PBP) for the more 

efficient, higher-priced equipment will 

range from 0.2 to 5.6 years, depending 

on the equipment class. 


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2Under the statute, a CCW must have an MEF of 

at least 1.26 and a WF of not more than 9.5. 

3The EPCA provisions discussed in the 

remainder of this subsection directly apply to 

covered products, and also apply to certain covered 

equipment, such as CCWs, by virtue of 42 U.S.C. 

6316(a). Note that the term ‘‘product’’ is used 

generally to refer to consumer appliances, while 

‘‘equipment’’ is used generally to refer to 

commercial units. 

B. Authority 

Title III of EPCA sets forth a variety 

of provisions designed to improve 

energy efficiency. Part A–1 of Title III 

(42 U.S.C. 6311–6317) establishes an 

energy conservation program for 

‘‘Certain Industrial Equipment,’’ which 

deals with a variety of commercial and 

industrial equipment (referred to 

hereafter as ‘‘covered equipment’’) 

including CCWs, the subject of this 

rulemaking. (42 U.S.C. 6312; 6313(e)) 

DOE publishes today’s final rule 

pursuant to Part A–1 of Title III, which 

provides for test procedures, labeling, 

and energy conservation standards for 

CCWs and certain other equipment, and 

authorizes DOE to require information 

and reports from manufacturers. The 

test procedures for CCWs appear at 10 

CFR part 430, subpart B, appendix J1 

(pursuant to 10 CFR 431.154). 

Section 136(a) and (e) of the Energy 

Policy Act of 2005 (EPACT 2005; Pub. 

L. 109–058) added CCWs as equipment 

covered under EPCA and established 

standards for such equipment that is 

manufactured on or after January 1, 

2007.2 (42 U.S.C. 6311(1) and 6313(e)) 

These amendments to EPCA also require 

that DOE issue a final rule by January 

1, 2010, to determine whether these 

standards should be amended. (EPACT 

2005, section 136(e); 42 U.S.C. 6313(e)) 

If amended standards are justified, they 

would become effective no later than 

January 1, 2013. (Id.) 

EPCA provides criteria for prescribing 

amended standards for covered 

products and equipment.3 As indicated 

above, any amended standard for this 

equipment must be designed to achieve 

the maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified. (42 

U.S.C. 6295(o)(2)(A) and 6316(a)) 

Additionally, EPCA provides specific 

prohibitions on prescribing such 

standards. DOE may not prescribe an 

amended or new standard for any 

equipment for which DOE has not 

established a test procedure. (42 U.S.C. 

6295(o)(3)(A) and 6316(a)). Further, 

DOE may not prescribe an amended 

standard if DOE determines by rule that 

such standard would not result in 

‘‘significant conservation of energy’’ or 

‘‘is not technologically feasible or 

economically justified.’’ (42 U.S.C. 

6295(o)(3)(B) and 6316(a)) 

EPCA also provides that, in deciding 

whether such a standard is 

economically justified for equipment 

such as CCWs, DOE must, after 

receiving comments on the proposed 

standard, determine whether the 

benefits of the standard exceed its 

burdens by considering, to the greatest 

extent practicable, the following seven 

factors: 

(1) The economic impact of the 

standard on manufacturers and 

consumers of the products or equipment 

subject to the standard; 

(2) The savings in operating costs 

throughout the estimated average life of 

the covered products or equipment in 

the type (or class) compared to any 

increase in the price, initial charges, or 

maintenance expenses for the covered 

products that are likely to result from 

the imposition of the standard; 

(3) The total projected amount of 

energy (or, as applicable, water) savings 

likely to result directly from the 

imposition of the standard; 

(4) Any lessening of the utility or the 

performance of the covered products or 

equipment likely to result from the 

imposition of the standard; 

(5) The impact of any lessening of 

competition, as determined in writing 

by the Attorney General, that is likely to 

result from the imposition of the 

standard; 

(6) The need for national energy and 

water conservation; and 

(7) Other factors the Secretary 

considers relevant. (42 U.S.C. 

6295(o)(2)(B)(i) and 6316(a)) 

In addition, EPCA, as amended (42 

U.S.C. 6295(o)(2)(B)(iii) and 6316(a)), 

establishes a rebuttable presumption 

that any standard for covered products 

is economically justified if the Secretary 

finds that ‘‘the additional cost to the 

consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three 

times the value of the energy (and as 

applicable, water) savings during the 

first year that the consumer will receive 

as a result of the standard, as calculated 

under the test procedure * * *’’ in place 

for that standard. See section III.D.2. 

Furthermore, EPCA contains what is 

commonly known as an ‘‘antibacksliding’’ provision. (42 U.S.C. 

6295(o)(1) and 6316(a)) This provision 

prohibits the Secretary from prescribing 

any amended standard that either 

increases the maximum allowable 

energy use or decreases the minimum 

required energy efficiency of a covered 

product or equipment. EPCA further 

provides that the Secretary may not 

prescribe an amended standard if 

interested persons have established by a 

preponderance of the evidence that the 

standard is ‘‘likely to result in the 

unavailability in the United States of 

any product type (or class)’’ with 

performance characteristics, features, 

sizes, capacities, and volumes that are 

substantially the same as those generally 

available in the United States at the time 

of the Secretary’s finding. (42 U.S.C. 

6295(o)(4) and 6316(a)) 

Section 325(q)(1) of EPCA is 

applicable to promulgating standards for 

most types or classes of equipment, 

including CCWs, that have two or more 

subcategories. (42 U.S.C. 6295(q)(1) and 

42 U.S.C. 6316(a)) Under this provision, 

DOE must specify a different standard 

level than that which applies generally 

to such type or class of products or 

equipment ‘‘for any group of covered 

products which have the same function 

or intended use, if * * * covered 

products within such group—(A) 

consume a different kind of energy from 

that consumed by other covered 

products within such type (or class); or 

(B) have a capacity or other 

performance-related feature which other 

products within such type (or class) do 

not have and such feature justifies a 

higher or lower standard’’ than applies 

or will apply to the other products. (42 

U.S.C. 6295(q)(1)(A) and (B)) In 

determining whether a performancerelated feature justifies such a different 

standard for a group of equipment, DOE 

must consider ‘‘such factors as the 

utility to the consumer of such a 

feature’’ and other factors DOE deems 

appropriate. (42 U.S.C. 6295(q)(1)) Any 

rule prescribing such a standard must 

include an explanation of the basis on 

which DOE established such higher or 

lower level. (See 42 U.S.C. 6295(q)(2)) 

Federal energy conservation 

requirements for commercial 

equipment, including CCWs, generally 

supersede State laws or regulations 

concerning energy conservation testing, 

labeling, and standards. (42 U.S.C. 

6297(a)–(c); 42 U.S.C. 6316(a)) DOE can, 

however, grant waivers of Federal 

preemption for particular State laws or 

regulations, in accordance with the 

procedures and other provisions of 

EPCA found in 42 U.S.C. 6297(d). 

Specifically, States that regulate an 

energy conservation standard for a type 

of covered product for which there is a 

Federal energy conservation standard 

may petition the Secretary for a DOE 

rule that allows the State regulation to 

become effective with respect to such 

covered product. (42 U.S.C. 

6297(d)(1)(A); 42 U.S.C. 6316(a)) DOE 

must prescribe a rule granting the 

petition if the Secretary finds that the 


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4This document is available on the DOE Web site 

at: http://www1.eere.energy.gov/buildings/ 

appliance_standards/commercial/ 

clothes_washers.html. 

State has established by a 

preponderance of the evidence that its 

regulation is needed to meet ‘‘unusual 

and compelling State or local energy 

* * * interests.’’ (42 U.S.C. 

6297(d)(1)(B); 42 U.S.C. 6316(a)) 

C. Background 

1. Current Standards 

EPCA, as amended by EPACT 2005, 

prescribes energy conservation 

standards for CCWs manufactured on or 

after January 1, 2007. (42 U.S.C. 6313(e)) 

These standards require that CCWs have 

an MEF of at least 1.26 cubic feet of 

capacity (ft3) per kilowatt-hour (kWh) 

and a WF of not more than 9.5 gallons 

of water (gal) per ft3. (Id.; 10 CFR 

431.156) 

2. History of Standards Rulemaking 

As discussed in the supplemental 

notice of proposed rulemaking 

(SNOPR), 74 FR 57738 (Nov. 9, 2009) 

(the November 2009 SNOPR), the 

EPACT 2005 amendments to EPCA 

require that DOE issue a final rule by 

January 1, 2010, to determine whether 

standards for CCWs should be amended. 

(EPACT 2005, section 136(e); 42 U.S.C. 

6313(e)) If amended standards are 

justified, they would become effective 

no later than January 1, 2013. (Id.) 

To initiate the current rulemaking to 

consider energy conservation standards, 

on March 15, 2006, DOE published on 

its Web site a document titled, 

Rulemaking Framework for Commercial 

Clothes Washers and Residential 

Dishwashers, Dehumidifiers, and 

Cooking Products (Framework 

Document).4 71 FR 15059 (March 27, 

2006). The Framework Document 

described the procedural and analytical 

approaches that DOE anticipated using 

to evaluate energy conservation 

standards for these products, and 

identified various issues to be resolved 

in conducting the rulemaking. DOE held 

a public meeting on April 27, 2006, to 

present the Framework Document, to 

describe the analyses it planned to 

conduct during the rulemaking, to 

receive comments from interested 

parties, and to inform and facilitate 

interested parties’ involvement in the 

rulemaking. DOE received 11 written 

comments in response to the Framework 

Document after the public meeting. 

DOE published the advance notice of 

proposed rulemaking (ANOPR) for this 

rulemaking on November 15, 2007 

(November 2007 ANOPR) (72 FR 

64432), and held a public meeting on 

December 13, 2007, to present and seek 

comment on the November 2007 

ANOPR analytical methodology and 

results. The November 2007 ANOPR 

included background information on the 

history and conduct of this rulemaking. 

72 FR 64432, 64438–39 (Nov. 15, 2007) 

In the November 2007 ANOPR, DOE 

described and sought further comment 

on the analytical framework, models, 

and tools (e.g., LCC and NIA 

spreadsheets) it was using to analyze the 

impacts of energy conservation 

standards for these products. In 

conjunction with the November 2007 

ANOPR, DOE also posted on its Web 

site the complete November 2007 

ANOPR technical support document 

(TSD). The TSD included the results of 

a number of DOE’s preliminary analyses 

in this rulemaking. In the November 

2007 ANOPR and at the public meeting, 

DOE invited comment in particular on 

the following issues concerning CCWs: 

(1) Product classes; (2) horizontal-axis 

designs; (3) technologies unable to be 

analyzed and exempted product classes, 

including potential limitations of 

existing test procedures; (4) per-cycle 

energy consumption; (5) consumer 

prices; (6) repair and maintenance costs; 

(7) efficiency distributions in the base 

case; (8) shipments forecasts; (9) basecase and standards-case forecasted 

efficiencies; and (10) TSLs. 72 FR 

64432, 64512–14 (Nov. 15, 2007). 

On October 17, 2008, DOE published 

a NOPR (October 2008 NOPR) in the 

Federal Register, in which it proposed 

amended energy conservation standards 

for certain products and equipment, 

including CCWs. 73 FR 62034. The 

energy conservation standards proposed 

in the October 2008 NOPR for CCWs are 

shown in Table II.1. 

TABLE II.1—COMMERCIAL CLOTHES WASHER ENERGY CONSERVATION STANDARDS PROPOSED IN THE OCTOBER 2008 

NOPR 

Equipment 

Modified energy 

factor 

ft3/kWh 

Water factor 

gal/ft3

Top-loading CCWs ...................................................................................................................................... 1.76 8.3 

Front-loading CCWs .................................................................................................................................... 2.00 5.5 

In the October 2008 NOPR, DOE 

described and sought further comment 

on the analytical framework, models, 

and tools (e.g., LCC and NIA 

spreadsheets) it was using to analyze the 

impacts of energy conservation 

standards for this equipment. In 

conjunction with the October 2008 

NOPR, DOE also posted on its Web site 

the complete TSD, which along with the 

October 2008 NOPR, is available at 

http://www1.eere.energy.gov/buildings/ 

appliance_standards/. The TSD 

included the results of a number of 

DOE’s analyses. In the October 2008 

NOPR and at the public meeting held on 

November 13, 2008 (referred to as the 

‘‘November 2008 public meeting’’), DOE 

invited comment in particular on the 

following issues concerning CCWs: (1) 

The efficiency levels; (2) DOE’s 

determination of the maximum 

technologically feasible (max-tech) 

efficiency levels for top-loading and 

front-loading CCWs; (3) the magnitude 

of possible equipment class shifting to 

front-loading CCWs; (4) the analysis and 

data relevant to the price elasticity of 

demand for calculating the anticipated 

energy and water savings at different 

TSLs; (5) the analysis of consumer 

knowledge of the Federal ENERGY 

STAR program and its potential as a 

resource for increasing knowledge of the 

availability and benefits of energy 

efficient appliances in the home 

appliance consumer market; (6) 

discount rates other than 7 percent and 

3 percent real to discount future 

emissions reductions; (7) data that 

might enable DOE to test for market 

failures or other specific problems for 

CCWs; and (8) the determination of 

anticipated environmental impacts of 

the standards proposed in the October 

2008 NOPR, particularly with respect to 

the methods for valuing the expected 

CO2 and NOX emissions savings. 73 FR 

62034, 62133 (Oct. 17, 2008). 

The October 2008 NOPR also 

included background information, in 


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5CCWs are typically used more frequently and 

filled with a larger load than RCWs. 

6A notation in the form ‘‘ASAP, Public Meeting 

Transcript, No. 67.4 at pp. 13–16’’ identifies an oral 

comment that DOE received during the November 

16, 2009, SNOPR public meeting and which was 

recorded in the public meeting transcript in the 

docket for this rulemaking (Docket No. EE–2006– 

STD–0127), maintained in the Resource Room of 

the Building Technologies Program. This particular 

notation refers to a comment (1) made by the 

Appliance Standards Awareness Project (ASAP) 

during the public meeting, (2) recorded in 

document number 67.4, which is the public 

meeting transcript that is filed in the docket of this 

rulemaking, and (3) which appears on pages 13–16 

of document number 67.4. 

addition to that set forth above, on the 

history and conduct of this rulemaking. 

73 FR 62034, 62040–62041 (Oct. 17, 

2008). DOE presented the 

methodologies and results for the 

October 2008 NOPR analyses at the 

November 2008 public meeting. 

Comments presented by interested 

parties during this meeting and 

submitted in response to the October 

2008 NOPR concerning the accuracy of 

the stated max-tech CCW efficiency 

level led to a thorough investigation of 

CCW efficiencies and the November 

2009 SNOPR. DOE subsequently tested 

the max-tech unit at an independent test 

facility, revised the max-tech level, 

updated the analysis, and published the 

November 2008 SNOPR to allow 

interested parties to comment on the 

revised efficiency level proposals. 74 FR 

57738 (Nov. 9, 2009). 

In the November 2009 SNOPR, DOE 

revised the proposed energy 

conservation standards for CCWs. 74 FR 

57738 (Nov. 9, 2009). In conjunction 

with the November 2009 SNOPR, DOE 

also published on its Web site the 

complete TSD for the proposed rule, 

which incorporated the final analyses 

that DOE conducted, and contained 

technical documentation for each step 

of the analysis. The TSD included the 

engineering analysis spreadsheets, the 

LCC spreadsheet, and the national 

impact analysis spreadsheet. The 

revised energy conservation standards 

proposed in the November 2009 SNOPR 

for CCWs are shown in Table II.2. 

TABLE II.2—COMMERCIAL CLOTHES WASHER ENERGY CONSERVATION STANDARDS PROPOSED IN THE NOVEMBER 2009 

SNOPR 

Equipment 

Modified energy 

factor 

ft3/kWh 

Water factor 

gal/ft3

Top-loading CCWs ...................................................................................................................................... 1.60 8.5 

Front-loading CCWs .................................................................................................................................... 2.00 5.5 

In the November 2009 SNOPR, DOE 

identified issues on which it was 

particularly interested in receiving 

comments and views of interested 

parties. These included the following: 

(1) Whether the method of ‘‘loading’’ 

clothes washers, or any other 

characteristic commonly associated 

with traditional ‘‘top-loading’’ or ‘‘frontloading’’ clothes washers, are ‘‘features’’ 

within the meaning of 42 U.S.C. 

6295(o)(4) in EPCA and whether the 

availability of such feature(s) would 

likely be affected by eliminating the 

separate classes for these equipment 

types previously established by DOE; (2) 

the revised efficiency levels, including 

the revised max-tech level for toploading CCWs; (3) technological 

feasibility of the proposed max-tech 

CCW, including washing and rinsing 

performance measures for CCWs and 

population data for water heating CCWs; 

(4) the determination of manufacturer 

impacts, including the effects of 

manufacturer tax credits and 

competitive concerns; (5) the 

determination of environmental 

impacts; and (6) the newly proposed 

energy conservation standards. 74 FR 

57738, 57800 (Nov. 9, 2009) After the 

publication of the November 2009 

SNOPR, DOE also held a public meeting 

in Washington, DC, on November 16, 

2009 (referred to as the ‘‘November 2009 

public meeting’’), to hear oral comments 

on and solicit information relevant to 

the revised proposed rule. The 

November 2009 SNOPR included 

additional background information on 

the history of this rulemaking. 74 FR 

57738, 57742–43 (Nov. 9, 2009). 

Comments presented by interested 

parties during the November 2009 

public meeting and submitted in 

response to the November 2009 NOPR 

concerning the sensitivity of the 

analyses to the estimated market share 

split of CCW shipments among 

laundromats, multi-family housing, and 

on-premises laundry applications led 

DOE to conduct a sensitivity analysis for 

today’s final rule. See appendix 11C of 

the TSD. 

III. General Discussion 

A. Test Procedures 

EPCA directs DOE to use the same test 

procedures for CCWs as those 

established by DOE for residential 

clothes washers (RCWs). (42 U.S.C. 

6314(a)(8)) 73 FR 62034, 62043–44 (Oct. 

17, 2008). While DOE believes 

commercial laundry practices likely 

differ from residential practices,5 DOE 

concluded in the October 2008 NOPR 

that the existing clothes washer test 

procedure (at 10 CFR part 430, subpart 

B, appendix J1) adequately accounts for 

the efficiency rating of CCWs, and that 

DOE’s methods for characterizing 

energy and water use in the October 

2008 NOPR analyses adequately 

accounted for the consumer usage 

patterns specific to CCWs. In response 

to the October 2008 NOPR, interested 

parties agreed with DOE’s conclusion 

that the DOE clothes washer test 

procedure is adequate for rating CCWs. 

DOE did not receive any comments 

objecting to the use of the DOE clothes 

washer test procedure for CCWs. 

Therefore, for the November 2009 

SNOPR, DOE continued to consider the 

existing DOE test procedure adequate to 

measure energy and water consumption 

of CCWs. 74 FR 57738, 57743 (Nov. 9, 

2009). 

The Appliance Standards Awareness 

Project (ASAP) commented that DOE is 

currently reviewing its clothes washer 

test procedure, and noted that there may 

be revisions as a result of that 

rulemaking. ASAP asked whether, 

under EPACT 2005, those potential 

changes in the test procedure would 

apply to the determinations of 

compliance with this standard that is 

currently proposed for CCWs. (ASAP, 

Public Meeting Transcript, No. 67.4 at 

pp. 13–16 6) EPCA states that ‘‘[w]ith 

respect to commercial clothes washers, 

the test procedures shall be the same as 

the test procedures established by the 

Secretary for RCWs under section 

6295(g) of this title.’’ (42 U.S.C. 

6314(a)(8)) Therefore, CCWs will be 

required to be tested to the DOE clothes 

washer test procedure that is effective at 

the time the testing is conducted. 

B. Technological Feasibility 

1. General 

As stated above, any standards that 

DOE establishes for CCWs must be 

technologically feasible. (42 U.S.C. 


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6295(o)(2)(A) and (o)(3)(B); 42 U.S.C. 

6316(a)) DOE considers a design option 

to be technologically feasible if it is in 

use by the respective industry or if 

research has progressed to the 

development of a working prototype. 

‘‘Technologies incorporated in 

commercial products or in working 

prototypes will be considered 

technologically feasible.’’ 10 CFR part 

430, subpart C, appendix A, section 

4(a)(4)(i). Therefore, in each standards 

rulemaking, DOE conducts a screening 

analysis, based on information it has 

gathered regarding existing technology 

options and prototype designs. In 

consultation with manufacturers, design 

engineers, and other interested parties, 

DOE develops a list of design options 

for consideration in the rulemaking. 

Once DOE has determined that a 

particular design option is 

technologically feasible, it further 

evaluates each design option in light of 

the following three additional criteria: 

(a) Practicability to manufacture, install, 

and service; (b) adverse impacts on 

product utility or availability; or (c) 

adverse impacts on health or safety. 10 

CFR part 430, subpart C, appendix A, 

section 4(a)(3) and (4). All design 

options that pass these screening criteria 

are candidates for further assessment in 

the engineering and subsequent 

analyses in the NOPR (or SNOPR) stage. 

DOE published a list of evaluated 

CCW technologies in the November 

2007 ANOPR. 72 FR 64432, 64458 (Nov. 

15, 2007). For the reasons described in 

the November 2007 ANOPR and in 

chapter 4 of the TSD, DOE is not 

considering the following design 

options, as they do not meet one or 

more of the screening criteria: Bubble 

action, electrolytic disassociation of 

water, ozonated laundering, reduced 

thermal mass, suds-saving, and 

ultrasonic washing. In the November 

2009 SNOPR, DOE did not screen out 

any additional technology options that 

were retained in the October 2008 

NOPR analyses. No comments were 

received objecting to the technology 

options which were screened out in the 

October 2008 NOPR. 73 FR 62034, 

62052 (Oct. 17, 2008). Therefore, DOE 

considered the same design options in 

the November 2009 SNOPR as those 

evaluated in the October 2008 NOPR. 74 

FR 57738, 57743–44 (Nov. 9, 2009). 

This final rule considers the same 

design options as those evaluated in the 

November 2009 SNOPR. All the 

evaluated technologies have been used 

(or are being used) in commercially 

available equipment or working 

prototypes. DOE also has determined 

that there is equipment either in the 

market or in working prototypes at all 

of the efficiency levels analyzed in this 

notice. Therefore, DOE has determined 

that all of the efficiency levels evaluated 

in this final rule, which are based upon 

the retained design options, are 

technologically feasible. For more detail 

on DOE’s method for developing CCW 

technology options and the process for 

screening these options, refer to the 

chapters 3 and 4 of the TSD. 

2. Maximum Technologically Feasible 

Levels 

When DOE considers an amended 

standard for a type (or class) of 

equipment such as front-loading or toploading CCWs, it must ‘‘determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible’’ for such equipment. (42 U.S.C. 

6295(p)(2) and 6316(a)) For the October 

2008 NOPR, DOE determined the maxtech efficiency levels for front-loading 

and top-loading CCWs in the 

engineering analysis, based on 

published MEF and WF values of 

commercially available equipment. (See 

chapter 5 in the NOPR TSD.) For the 

October 2008 NOPR, DOE proposed the 

max-tech levels shown in Table III.1. 73 

FR 62034, 62036 (Oct. 17, 2008). 

TABLE III.1—COMMERCIAL CLOTHES WASHER MAX-TECH EFFICIENCY LEVELS PROPOSED IN THE OCTOBER 2008 NOPR 

Equipment class 

Max-tech level 

MEF, ft 3/kW WF, gal/ft3

Top-Loading CCWs ..................................................................................................................................... 1.76 8.3 

Front-Loading CCWs ................................................................................................................................... 2.35 4.4 

DOE received comments in response 

to the October 2008 NOPR questioning 

the max-tech top-loading CCW 

efficiency rating presented in the 

November 2009 SNOPR. DOE examined 

the max-tech efficiency level for toploading CCWs, contracting an 

independent testing laboratory to verify 

the performance ratings for the max-tech 

top-loading CCW model. The laboratory 

results (based on a 3-unit sample) 

suggested that the max-tech model 

achieves 1.63 MEF/8.4 WF. Based on 

this information, DOE revised the maxtech top-loading CCW level in the 

November 2009 SNOPR downward to 

1.60 MEF/8.5 WF, a level proposed in 

the October 2008 NOPR as a ‘‘gap-fill’’ 

level and one which DOE concluded in 

the November 2009 SNOPR is attainable 

by the max-tech CCW model. For the 

November 2009 SNOPR, the proposed 

front-loading max-tech level was the 

same as in the October 2008 NOPR, 

whereas the proposed top-loading maxtech level was revised to 1.60 MEF/8.5 

WF based on the independent test 

results. 74 FR 57738, 57744 (Nov. 9, 

2009). 

DOE received comments in response 

to the November 2009 SNOPR that 

objected to the max-tech efficiency level 

for top-loading CCWs based on lack of 

wash performance and consumer 

acceptance of the max-tech top-loading 

CCW model in a commercial laundry 

setting. DOE agrees that inherent in a 

determination of technological 

feasibility is performance related to the 

equipment’s primary function (i.e., 

cleaning clothes), but DOE considers as 

evidence of sufficient performance and 

consumer acceptance of the highest 

efficiency top-loading CCWs the 

presence on the market of two such 

models at or near the max-tech level 

proposed in the November 2009 

SNOPR. Therefore, for today’s final rule, 

the max-tech levels for both classes are 

the max-tech levels identified in the 

November 2009 SNOPR. These levels 

are shown in Table III.2 below. For more 

details on this selection of max-tech 

levels, see section IV.C.1.a of today’s 

final rule. 


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TABLE III.2—COMMERCIAL CLOTHES WASHER MAX-TECH EFFICIENCY LEVELS

Equipment class 

Max-tech level 

MEF, ft3/kW WF, gal/ft3

Top-Loading CCWs ..................................................................................................................................... 1.60 8.5 

Front-Loading CCWs ................................................................................................................................... 2.35 4.4 

C. Energy Savings 

DOE forecasted energy savings in its 

national energy savings (NES) analysis 

through the use of an NES spreadsheet 

tool, as discussed in the November 2009 

SNOPR. 74 FR 57738, 57744 (Nov. 9, 

2009). 

One criterion that governs DOE’s 

adoption of standards for CCWs is the 

standard must result in ‘‘significant’’ 

energy savings. (42 U.S.C. 6295(o)(3)(B) 

and 42 U.S.C. 6316(a)) While EPCA does 

not define the term ‘‘significant,’’ the 

U.S. Court of Appeals for the District of 

Columbia, in Natural Resources Defense 

Council v. Herrington, 768 F.2d 1355, 

1373 (D.C. Cir. 1985), indicated that 

Congress intended ‘‘significant’’ energy 

savings in this context to be savings that 

were not ‘‘genuinely trivial.’’ DOE’s 

estimates of the energy savings for the 

energy conservation standards adopted 

in today’s final rule are nontrivial. 

Therefore, DOE considers them 

‘‘significant’’ within the meaning of 

section 325 of EPCA. 

D. Economic Justification 

1. Specific Criteria 

As noted earlier, EPCA provides 

seven factors to be evaluated in 

determining whether an energy 

conservation standard is economically 

justified. (42 U.S.C. 6295(o)(2)(B) and 42 

U.S.C. 6316(a)) The following sections 

discuss how DOE has addressed each of 

those seven factors in this rulemaking. 

a. Economic Impact on Commercial 

Consumers and Manufacturers 

DOE considered the economic impact 

of the amended CCW standards on 

commercial consumers and 

manufacturers. For consumers, DOE 

measured the economic impact as the 

change in installed cost and life-cycle 

operating costs, i.e., the LCC. (See 

sections IV.D and IV.E and chapter 8 of 

the TSD.) DOE investigated the impacts 

on manufacturers through the 

manufacturer impact analysis (MIA). 

(See sections IV.G and VI.C.2, and 

chapter 13 of the TSD.) The economic 

impact on commercial consumers and 

manufacturers is discussed in detail in 

the November 2009 SNOPR. 74 FR 

57738, 57751–55, 57761–65, 57769–77 

(Nov. 9, 2009). 

b. Life-Cycle Costs 

DOE considered life-cycle costs of 

CCWs, as discussed in the November 

2009 SNOPR. 74 FR 57738, 57751–55 

(Nov. 9, 2009). DOE calculated the sum 

of the purchase price and the operating 

expense—discounted over the lifetime 

of the equipment—to estimate the range 

in LCC benefits that commercial 

consumers would expect to achieve due 

to the standards. 

c. Energy Savings 

Although significant conservation of 

energy is a separate statutory 

requirement for imposing an energy 

conservation standard, EPCA also 

requires DOE, in determining the 

economic justification of a proposed 

standard, to consider the total projected 

energy savings that are expected to 

result directly from the standard (42 

U.S.C. 6295(o)(2)(B)(i)(III) and 42 U.S.C. 

6316(a)). As in the November 2009 

SNOPR (74 FR 57738, 57755–61 (Nov. 9, 

2009)), for today’s final rule, DOE used 

the NIA spreadsheet results in its 

consideration of total projected savings 

that are directly attributable to the 

standard levels DOE considered. 

d. Lessening of Utility or Performance of 

Equipment 

In selecting today’s standard levels, 

DOE sought to avoid new standards for 

CCWs that would lessen the utility or 

performance of that equipment (42 

U.S.C. 6295(o)(2)(B)(i)(IV) and 42 U.S.C. 

6316(a)). As with the November 2009 

SNOPR (74 FR 57738, 57745 (Nov. 9, 

2009)), today’s standards do not involve 

changes in equipment design or unusual 

installation requirements that would 

reduce the utility or performance of 

CCWs. 

e. Impact of Any Lessening of 

Competition 

DOE considers any lessening of 

competition likely to result from 

standards. Accordingly, as discussed in 

the November 2009 SNOPR (74 FR 

57738, 57745, 57762–63 (Nov. 9, 2009)), 

DOE requested that the Attorney 

General transmit to the Secretary a 

written determination of the impact, if 

any, of lessening of competition likely 

to result from the proposed standards, 

together with an analysis of the nature 

and extent of such impact (42 U.S.C. 

6295(o)(2)(B)(i)(V) and (B)(ii) and 42 

U.S.C. 6316(a)). 

To assist the Attorney General in 

making such a determination, DOE 

provided the U.S. Department of Justice 

(DOJ) with copies of the November 2009 

proposed rule and the TSD for review. 

The Attorney General’s response is 

discussed in section VI.C.5 below, and 

is reprinted at the end of this rule. 

Impacts on manufacturers are also 

discussed in section IV.G below. 

f. Need of the Nation to Conserve Energy 

In considering standards for CCWs, 

the Secretary must consider the need of 

the Nation to conserve energy (42 U.S.C. 

6295(o)(2)(B)(i)(VI) and 42 U.S.C. 

6316(a)). The Secretary recognizes that 

energy conservation benefits the Nation 

in several important ways. The nonmonetary benefits of the standards are 

likely to be reflected in improvements to 

the security and reliability of the 

Nation’s energy system. Today’s 

standards will also result in 

environmental benefits. As discussed in 

the November 2009 SNOPR, DOE has 

considered these factors in adopting 

today’s standards. 74 FR 57738, 57765– 

67 (Nov. 9, 2009). 

g. Other Factors 

In determining whether a standard is 

economically justified, EPCA directs the 

Secretary to consider any other factors 

deemed relevant (42 U.S.C. 

6295(o)(2)(B)(i)(VII) and 42 U.S.C. 

6316(a)). In adopting today’s amended 

standards, the Secretary found no 

relevant factors other than those 

identified elsewhere in today’s final 

rule. 

2. Rebuttable Presumption 

Section 325(o)(2)(B)(iii) of EPCA 

states that there is a rebuttable 

presumption that an energy 

conservation standard is economically 

justified if the additional cost to the 

consumer that meets the standard level 

is less than three times the value of the 

first-year energy savings resulting from 

the standard (and water savings in the 

case of a water efficiency standard), as 

calculated under the applicable DOE 

test procedure (42 U.S.C. 

6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a)). 


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7 In its December 9, 2009, letter, GE states that it 

‘‘adopt[s] by reference the comments on the SNOPR 

that [it] understand[s] will be submitted by the 

Association of Home Appliance Manufacturers 

(AHAM) * * * ’’ Therefore, comments submitted by 

AHAM, designated by comment number 67.12 in 

the docket for this rulemaking, should be 

interpreted as representing GE’s and well as 

AHAM’s views. 

8A notation in the form ‘‘AHAM, No. 67.12 at p. 

2’’ identifies a written comment (1) made by the 

Association of Home Appliance Manufacturers 

(AHAM), (2) recorded in document number 67.12 

that is filed in the docket of this rulemaking (Docket 

No. EE–2006–STD–0127), maintained in the 

Resource Room of the Building Technologies 

Program, and (3) which appears on page 2 of 

document number 67.12. 

DOE’s LCC and PBP analyses generate 

values that calculate the PBP for 

consumers of equipment meeting 

potential energy conservation standards, 

which includes, but is not limited to, 

the 3-year PBP contemplated under the 

rebuttable presumption test discussed 

above. (See chapter 8 of the TSD.) 

However, DOE routinely conducts a full 

economic analysis that considers the 

full range of impacts, including those to 

the consumer, manufacturer, Nation, 

and environment, as required under 42 

U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 

6316(a). The results of this analysis 

serve as the basis for DOE to definitively 

evaluate the economic justification for a 

potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). 

IV. Methodology and Discussion of 

Comments on Methodology 

DOE used several previously 

developed analytical tools in setting 

today’s standard. Each was adapted for 

this rule. One of these analytical tools 

is a spreadsheet that calculates LCC and 

PBP. Another calculates national energy 

savings and national NPV. A third tool 

is the Government Regulatory Impact 

Model (GRIM), the results of which are 

the basis for the MIA, among other 

methods. In addition, DOE developed 

an approach using the National Energy 

Modeling System (NEMS) to estimate 

impacts of energy efficiency standards 

for CCWs on electric utilities and the 

environment. The TSD appendices 

discuss each of these analytical tools in 

detail. 

As a basis for this final rule, DOE has 

continued to use the spreadsheets and 

approaches explained in the November 

2009 SNOPR. DOE used the same 

general methodology but has revised 

some of the assumptions and inputs for 

this final rule in response to comments 

from interested parties. The following 

paragraphs discuss these revisions. 

A. Equipment Classes 

In the October 2008 NOPR, DOE 

proposed separate equipment classes 

and accompanying standards for toploading and front-loading CCWs with 

separate standards for each class. 73 FR 

62034, 62036 (Oct. 17, 2008). DOE 

determined in the October 2008 NOPR 

that two equipment classes were 

warranted because the method of 

‘‘loading’’ had been previously 

determined, under DOE rulemakings for 

residential clothes washers, to be a 

‘‘feature,’’ as defined by EPCA, and 

because an amended standard for a 

single equipment class might set the 

MEF for all CCWs at a level significantly 

higher than what the max-tech for toploading machines can attain today, and 

effectively eliminate top-loading CCWs 

from the market. 73 FR 62034, 62049– 

50 (Oct. 17, 2008). This determination 

remained unchanged in the November 

2009 SNOPR, 74 FR 57738, 57746–47, 

although DOE sought comment as to (1) 

whether the method of ‘‘loading’’ clothes 

washers, or any other characteristic 

commonly associated with traditional 

‘‘top-loading’’ or ‘‘front-loading’’ clothes 

washers, such as presence or absence of 

agitators, ability to interrupt cycles, and 

possibly others, are ‘‘features’’ within the 

meaning of 42 U.S.C. 6295(o)(4) in 

EPCA; and (2) whether the availability 

of such feature(s) would likely be 

affected by eliminating the separate 

classes for these equipment types 

previously established by DOE. DOE 

received comments in response to the 

November 2009 SNOPR both in support 

of and opposed to establishing two 

equipment classes for CCWs. These 

comments are described in more detail 

in the following paragraphs. 

The Association of Home Appliance 

Manufacturers (AHAM), GE Consumer & 

Industrial (GE),7 Whirlpool Corporation 

(Whirlpool), and Alliance Laundry 

Systems (Alliance) stated that they 

support the definition of separate 

equipment classes for top-loading and 

front-loading CCWs. (AHAM, Public 

Meeting Transcript, No. 67.4 at p. 33; 

AHAM, No. 67.12 at p. 2;8; GE, Public 

Meeting Transcript, No. 67.4 at p. 44; 

GE, No. 67.9 at p. 1) Whirlpool, Public 

Meeting Transcript, No. 67.4 at p. 45; 

Whirlpool, No. 67.11 at p. 1; Alliance, 

Public Meeting Transcript, No. 67.4 at p. 

46. AHAM stated that EPACT 2005 

allows DOE to establish different 

classes, directing DOE to create ‘‘classes 

of products, depending on their energy 

use or performance characteristics.’’ 

AHAM noted that there is a bimodal 

distribution of efficiencies between toploading and front-loading CCWs. 

According to AHAM, the standards 

proposed for the front-load equipment 

class in terms of MEF and WF are 

beyond the capability of a traditional, or 

even a non-traditional, top-load CCW. 

(AHAM, Public Meeting Transcript, No. 

67.4 at pp. 39–40; AHAM, No. 67.12 at 

pp. 2–3) GE, Whirlpool, and Alliance 

agree that DOE has the ability to define 

two CCW equipment classes. (GE, 

Public Meeting Transcript, No. 67.4 at p. 

44; Whirlpool, Public Meeting 

Transcript, No. 67.4 at p. 45; Alliance, 

Public Meeting Transcript, No. 67.4 at p. 

46). AHAM further stated that if DOE 

moves forward with a single equipment 

class, top-loading CCWs would not be 

able to meet a standard that would be 

fairly easy for front-loaders to achieve. 

With two equipment classes, energy and 

water savings could be achieved by both 

top-loaders and front-loaders, albeit at a 

different level. According to AHAM, 

this reduces the possibility that 

consumers would repair older, less 

efficient top-loading CCWs, because 

new high efficiency top-loaders would 

be available. (AHAM, Public Meeting 

Transcript, No. 67.4 at pp. 40–41; 

AHAM, No. 67.12 at p. 2.) 

Alliance commented that ‘‘ ‘toploading’ is a ‘feature’ within the 

meaning of 42 U.S.C. 6295, because it 

provides consumers the opportunity to 

purchase lower cost CCWs.’’ Alliance 

stated that purchase cost is a primary 

reason why top-loading clothes washers 

hold an approximate 65-percent market 

share, since consumers can choose the 

lower-cost design option of a toploading door for a vertical-axis machine 

versus the higher-cost front-loading 

door design for a horizontal-axis 

machine. Alliance noted that there is 

one unique horizontal-axis design that 

incorporates a loading door on top that 

essentially opens a door on the side of 

the horizontally rotatable spin tub, but 

described this design as ‘‘unpopular.’’ 

Alliance commented that, although the 

cost difference between vertical-axis 

and horizontal-axis models has 

decreased, a comparably featured 

standard capacity top-loader remains far 

less costly than a standard capacity 

front-loader due to the inherent 

differences in components. Alliance 

listed variable speed motors, 

sophisticated motor electronic controls, 

heavy mass weights, and door assembly 

costs as the key components 

contributing to the cost of front-loading 

designs. More specifically, Alliance 

stated that a front-loader door must 

incorporate high-temperature impactresistant glass, a door/tub boot seal, a 

very sophisticated lock system, and a 

heavy-duty hinge system to withstand 

the abuse in a commercial environment. 

In contrast, Alliance described a toploader door as a simple metal stamping 


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9A notation in the form ‘‘Alliance, No. 66.4 Letter 

at pp. 1–2’’ identifies pages 1–2 of a written 

comment submitted by Alliance entitled ‘‘Is TopLoading a Feature Within the Meaning of EPCA?’’ 

This letter was entered as comment number 66.4 in 

the docket for this rulemaking, along with a written 

comment submitted by Alliance entitled ‘‘Response 

to DOE Commercial Clothes Washer SNOPR.’’ 

10Route operators supply laundry equipment and 

maintain facilities in exchange for a percentage of 

the laundry revenue. 

with a low-cost hinge and a fairly 

simple micro-switch to remove power 

from the basket drive mechanism during 

spin. Additionally, Alliance stated that 

front-loaders require a ‘‘pedestal’’ to 

raise the loading door in response to 

consumer objections to stooping so far 

down. Alliance estimated the retail 

price of such a pedestal as $250, which 

along with an estimated $250 retail 

price difference between a baseline 

efficiency top-loader and a comparably 

featured front-loader, would result in a 

top-loader costing consumers at least 

$500 less than a front-loader. Therefore, 

Alliance concluded that top-loading is 

‘‘undeniably’’ a feature for consumers 

because of its low cost. (Alliance, Public 

Meeting Transcript, No. 67.4 at pp. 46– 

48; Alliance, No. 66.4 Letter at pp. 1– 

2,9 Alliance, No. 67.8 at p. 2.) Whirlpool 

described a top-loading horizontal-axis 

RCW as a rare configuration that is not 

produced or sold domestically by any 

major manufacturers of laundry 

equipment, and one that does not 

effectively meet the needs of either toploading or front-loading RCW 

consumers. According to Whirlpool, the 

openings of such units are small and 

prone to snagging of clothes. Further, 

Whirlpool stated that this configuration 

is not available in CCWs. (Whirlpool, 

No. 67.11 at p. 4.) 

Alliance also stated that top-loading is 

a ‘‘feature’’ because of its convenience to 

the user. A user is not required to stoop 

or bend to load a top-loader, and 

according to Alliance most consumers 

prefer this convenience, though no 

supporting data was provided. Alliance 

stated that another convenience is the 

ability to add a garment to a clothes load 

in a washer which has already initiated 

a wash cycle. For top-loaders, such 

action only requires lifting the lid to 

drop the item in. Alliance commented 

that most front-loaders require time to 

unlock the door and possibly drain the 

wash water, then require the user to 

stoop or bend to add the garment to the 

washer. (Alliance, Public Meeting 

Transcript, No. 67.4 at pp. 48–49; 

Alliance, No. 66.4 Letter at p. 2; 

Alliance, No. 67.8 at p. 2) Finally, 

Alliance commented that convenient 

cycle times, as defined by typical toploading washers, are important to users. 

According to Alliance, front-loading 

washers have longer cycle times because 

there is less mechanical action in 

tumbling in a front-loading design than 

the vigorous mechanical action 

imparted by an agitator in a top-loading 

design. Alliance cited the February 2009 

edition of Consumer Reports magazine 

as stating that ‘‘front-loader cycle times 

are getting longer; many take more than 

90 minutes per load,’’ and that the 

article shows that front-loader cycle 

times are 70–115 minutes compared to 

top-loader cycle times of 30–85 minutes. 

Alliance noted that all front-loaders in 

the Consumer Reports article with cycle 

times less than 85 minutes scored 

poorly in Consumer Union’s ‘‘wash 

rating’’ compared to front-loaders with 

cycle times of 85 minutes or longer, 

while top-loaders with cycle times of 55 

minutes achieved wash ratings of ‘‘good’’ 

to ‘‘very good.’’ Alliance concludes that 

top-loader door location is associated 

with providing consumers with their 

expected good washing performance at 

a convenient washing cycle time of 

around 55 minutes. (Alliance, Public 

Meeting Transcript, No. 67.4 at p. 49; 

Alliance, No. 66.4 Letter at p. 2; 

Alliance, No. 67.8 at p. 3) GE agreed that 

cycle time and cost to the consumer are 

very important differentiators between 

top-loading and front-loading CCWs 

which, along with consumer preference, 

counsel in favor of maintaining the two 

separate equipment classes. (GE, Public 

Meeting Transcript, No. 67.4 at pp. 44– 

45) AHAM provided a similar consumer 

utility rationale in support of two 

equipment classes, specifying level of 

vibration, ergonomic factors (bending), 

history, and experience of use, cycle 

interruption, and preference as 

consumer utilities and functions. 

(AHAM, No. 67.12 at p. 3) Whirlpool 

agreed that vibration, ergonomics, cycle 

time, and familiarity are factors which 

consumers use in selecting top-loading 

CCWs, and added configuration, noise, 

value proposition, and sour smell. 

(Whirlpool, No. 67.11 at p. 1) Whirlpool 

also commented that it does not believe 

high efficiency top-loaders are viable in 

the commercial market because clothes 

rollover necessary for effective washing 

and rinsing is not possible in an 

overloaded machine. Whirlpool states 

that overloading is a common practice 

by CCW users because they are paying 

by the load. (Whirlpool, No. 67.11 at p. 

4) Alliance also commented that, for the 

September 21, 2009, RCW Framework 

public meeting, Whirlpool had stated 

that one-fifth of consumers who bought 

a front-loading washer have gone back 

to a top-loading washer. (Alliance, No. 

66.4 Letter at p. 2) 

Whirlpool commented that, in 

addition to the impact on the user of a 

standard applicable to a single 

equipment class, there is also an impact 

on the route operators 10 and multihousing complexes, most of which have 

specialized in either top-loading or 

front-loading CCWs. According to 

Whirlpool, a major reinvestment in 

terms of technical training and parts 

inventories would be required for those 

companies that have invested in toploading CCWs if a standard resulted in 

the phaseout of such machines. 

Whirlpool also stated that CCWs are 

often refurbished and moved downmarket, possibly multiple times during 

a particular unit’s lifetime, making 

CCWs available to many socioeconomic 

classes. (Whirlpool, Public Meeting 

Transcript, No. 67.4 at p. 45; Whirlpool, 

No. 67.11 at p. 1; see also AHAM, No. 

67.12 at p. 3) AHAM stated that route 

operators have accumulated expertise 

on either the top-loading or frontloading platform. (AHAM, No. 67.12 at 

p. 3) 

Whirlpool also commented that 

separate equipment classes would be 

consistent with energy conservation 

standards for refrigeration, which have 

separate classes for side-by-side, top 

freezer, and bottom freezer refrigerators, 

and room air conditioners, since the 

product classes reflect home 

configuration, consumer choice, and 

consumer utility. (Whirlpool, Public 

Meeting Transcript, No. 67.4 at p. 46; 

Whirlpool, No. 67.11 at pp. 1–2) 

Earthjustice (EJ) stated that the 

separation in EPCA of refrigerator by 

method of access was codified by 

Congress as two distinct standards. 

According to EJ, because Congress 

enacted a single standard for all CCWs, 

what it chose to do for refrigerators is 

not entirely applicable to the CCW 

rulemaking. (EJ, Public Meeting 

Transcript, No. 67.4 at pp. 49–50) 

EJ stated that Congress has provided 

several examples of the product 

attributes that it anticipated as 

constituting ‘‘features’’ under EPCA: 

‘‘automatic defrost, through the door ice, 

size of room air conditioners, and noise 

levels.’’ H. Rep. 100–11, at 23 (1987). EJ 

commented that this demonstrates that 

Congress indicated that the fact of 

access is a feature (for example, through 

the door ice), but did not suggest that 

the method of access is also a feature 

(for example, side-by-side versus 

stacked configuration refrigerators) 

within the meaning of 42 U.S.C. 

6295(o)(4). (EJ, No. 67.5 at p. 5) 

EJ commented that subparagraph (B) 

of 42 U.S.C. 6295(q)(1) is permissive, 

and provides that DOE ‘‘shall’’ create 


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11EJ stated that the method of loading a CCW is 

not a feature because: (1) DOE research on the 

public’s valuation of clothes washer characteristics, 

presented in a December 2000 Technical Support 

Document, shows that door placement was not 

among the top ten most important attributes, and 

the value of this attribute is likely even lower now 

given the increased prevalence of front-loaders; (2) 

the FTC eliminated the distinction between toploading and front-loading machines in its labeling 

requirements (65 FR 16134 (March 27, 2000)); and 

(3) the legislative history supports the conclusion 

that door placement is not a feature because 

examples cited suggest that while access itself may 

be a feature, the method of access is not. (EJ No. 

67.5 at 4) 

12California Energy Commission versus DOE, 

Case No. 07–71576 (October 28, 2009). 

separate classes for products based on 

the presence of ‘‘a capacity or other 

performance-related feature’’ only if 

‘‘such feature justifies a [different] 

standard.’’ According to EJ, EPCA then 

sets out very expansive criteria for DOE 

to apply in determining whether a given 

feature justifies a unique standard. EJ 

stated that, although DOE must consider 

the utility of the feature, DOE is free to 

supplement this consideration with any 

other factors it deems appropriate. (EJ, 

No. 67.5 at p. 3) 

EJ stated that 42 U.S.C. 6295(o)(4) 

provides that DOE may separate covered 

equipment into distinct classes when 

necessary to prohibit the adoption of 

standards that eliminate certain product 

attributes. EJ further stated that DOE’s 

authority to adopt standards that group 

all varieties of the given covered 

equipment into a single class is only 

barred when such a standard is likely to 

result in the unavailability of features 

that are substantially the same as those 

currently available; i.e., EPCA only 

mandates the creation of multiple 

equipment classes when the failure to 

do so would eliminate certain truly 

unique equipment attributes from the 

market. According to EJ, this statutory 

scheme forecloses an interpretation that 

EPCA mandates the designation of 

distinct equipment classes for toploading and front-loading CCWs. (EJ, 

No. 67.5 at pp. 3–4) EJ provided four 

separate reasons why it believes 42 

U.S.C. 6295(o)(4) prohibits DOE from 

adopting standards that would treat all 

CCWs as a single equipment class: (1) 

The method of loading a CCW is not a 

‘‘feature’’ within the meaning of 42 

U.S.C. 6295(o)(4) 11; (2) the ability to 

load a CCW from the front is 

substantially the same as the ability to 

load from the top; (3) maintaining a 

single CCW category is not likely to lead 

to the unavailability of top-loaders; and 

(4) top-loading CCWs possess no other 

attributes requiring protection under 42 

U.S.C. 6295(o)(4). (EJ, No. 67.5 at pp. 4– 

8) 

EJ commented that if, for the sake of 

argument, the method provided to 

access a CCW is a ‘‘feature’’ within the 

meaning of 42 U.S.C. 6295(o)(4), it did 

not follow that EPCA would require 

separate equipment classes. EJ stated 

that, in enacting the EPCA language, 

Congress was ‘‘careful to note’’ that the 

‘‘prohibition against grouping all 

varieties of a covered product into a 

single product class was a narrow one.’’ 

(EJ, No. 67.5 at p. 6) 

A valid standard may entail some minor 

loss of characteristics, features, sizes, etc.; for 

this reason, the Act requires that 

‘‘substantially the same,’’ though not 

necessarily identical, characteristics or 

features should continue to be available. [42 

U.S.C. 6295(o)(4)] also does not apply to 

trivial effects in which a standard might 

result. 

H. Rep. 100–11, at 23 (1987). 

According to EJ, the inclusion of this 

‘‘substantially the same’’ language shows 

that Congress did not intend the 

resulting unavailability of any and every 

feature to be a barrier to the imposition 

of strong efficiency standards, but rather 

a standard would be barred only if it 

would have a substantial impact on 

product utility. EJ stated that the ability 

to access the CCW from the top is 

‘‘substantially the same’’ as the ability to 

access the unit from the front because 

either delivers the same basic 

functionality of accessing the unit for 

loading and unloading. Thus EJ states 

that DOE is not barred from maintaining 

a single set of efficiency standards for 

all CCWs, even assuming that those 

standards would have the consequence 

of eliminating all top-loading CCWs 

from the market. (EJ, No. 67.5 at p. 6) 

EJ also did not agree with AHAM’s 

statement that a distinction in energy 

use between two types of CCWs would 

justify a separate equipment class. 

According to EJ, that would be at odds 

with the intent of EPCA. EJ stated that 

whenever two examples of equipment 

use different amounts of energy, the 

intent is for a standard to eliminate the 

one that uses too much energy. (EJ, 

Public Meeting Transcript, No. 67.4 at 

pp. 41–42) 

EJ also commented that it is sensible 

to adopt a strong unitary standard that 

applies to both top-loading and frontloading CCWs. EJ stated that it had 

already made the case that the method 

of loading is not a feature under 42 

U.S.C. 6295(o)(4), but even if DOE did 

determine that the method of loading is 

a feature, a strong standard would not 

eliminate top-loading CCWs from the 

market. (EJ, Public Meeting Transcript, 

No. 67.4 at pp. 42–43) EJ also 

commented on the recent Ninth Circuit 

decision reversing DOE’s denial of the 

California Energy Commission’s (CEC) 

petition for exemption from existing 

energy efficiency standards for RCWs 

and remanding the petition for further 

review.12 EJ stated that the court, while 

not directly addressing the ‘‘features’’ 

issue, indicated that DOE can’t just look 

at the market today, but must assess 

what the market will be when the 

standard takes effect. EJ stated that DOE 

would have to find by preponderance of 

the evidence that a strong standard 

would eliminate top-loaders from the 

market in 2013. EJ noted that it did not 

believe that top-loaders would be 

eliminated at that time, based on the 

existence of very efficient top-loading 

RCWs currently in the market. (EJ, 

Public Meeting Transcript, No. 67.4 at p. 

43; EJ, No. 67.5 at pp. 6–7) 

EJ further commented that no other 

attributes of CCWs which DOE 

identified in the November 2009 SNOPR 

as possibly providing consumer utility, 

such as the presence or absence of 

agitators and the ability to interrupt 

cycles, require protection under 42 

U.S.C. 6295(o)(4). EJ stated that DOE has 

neither explained why the presence or 

absence of agitators would provide any 

consumer utility, nor considered that 

high efficiency CCWs may still be 

equipped with an agitator. EJ also stated 

that horizontal-axis CCWs available 

today are often able to be interrupted 

mid-cycle. In addition, EJ commented 

that, although Alliance cited an article 

which discussed cycle times for toploaders and front-loaders, Alliance did 

not contend that the variation in cycle 

time is an issue for CCWs. EJ stated that 

the range of cycle times for top-loaders 

and front-loaders broadly overlap, and 

because front-loaders typically have a 

lower ending remaining moisture 

content (RMC) than top-loaders, the 

total washing and drying times required 

for top-loading and front-loading CCWs 

are likely to be equivalent. (EJ, No. 67.5 

at p. 8) 

The Pacific Gas and Electric 

Company, Southern California Gas 

Company, and San Diego Gas Company 

(the California Utilities) also supported 

a single equipment class, arguing for 

reasons similar to those articulated by EJ 

that the method of loading and other 

characteristics commonly associated 

with the method of loading are not 

features, and that a single class would 

not likely result in the unavailability of 

top-loading CCWs. (California Utilities, 

No. 67.10 at pp. 2–3) Further, the 

California Utilities stated that, although 

CCWs and RCWs are similar in 

technologies, design, and operating 

characteristics, a ‘‘feature’’ of RCWs is 

not necessarily a ‘‘feature’’ of CCWs. 

(California Utilities, No. 67.10 at p. 3) 


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The California Utilities also asserted 

that the LCC savings of a single 

equipment class with standards at 

various front-loading TSLs could 

increase as much at $304 as compared 

to the LCC savings estimated for the 

standards proposed in the November 

2009 SNOPR. According to the 

California Utilities and ASAP, American 

Council for an Energy-Efficiency 

Economy, American Rivers, National 

Consumer Law Center, Natural 

Resources Defense Council, Northeast 

Energy Efficiency Partnerships, and 

Seattle Public Utilities (the Joint 

Comment), cost-effectiveness of 

standards based on a single equipment 

class best serves long-term public 

interest. (California Utilities, No. 67.10 

at p. 4; Joint Comment, No. 67.6 at p. 3) 

The Joint Comment commented that 

DOE is concerned that at the highest 

TSL, significant numbers of potential 

consumers of front-loading CCWs would 

choose to purchase a less efficient toploading CCW instead. (Joint Comment, 

No. 67.6 at p. 2) According to ASAP and 

the Joint Comment, this underscores the 

interchangeability between top-loading 

and front-loading CCWs in a 

commercial setting and that this 

interchangeability could be so broad 

and substantial that it would facilitate 

potential recapture of market share by 

less efficient but less expensive toploaders. ASAP stated that the real 

distinction between top-loaders and 

front-loaders is price point rather than 

any specific consumer utility. Therefore, 

ASAP and the Joint Comment 

recommended a single equipment class 

for CCWs. ASAP also stated that route 

operators are operating in a one 

equipment class environment today, 

and managing the issues that Whirlpool 

identified. (ASAP, Public Meeting 

Transcript, No. 67.4 at pp. 46, 99–102; 

Joint Comment, No. 67.6 at pp. 2–3) 

ASAP and the Joint Comment stated 

that the standard proposed for frontloaders is already met by almost 97 

percent of the front-loaders on the 

market, and since DOE has seldom, if 

ever, proposed a standard that has such 

a low impact on the marketplace, ASAP 

suggests there are some difficulties in 

going forward with two equipment 

classes. (ASAP, Public Meeting 

Transcript, No. 67.4 at pp. 53–54; Joint 

Comment, No. 67.6 at p. 2) The 

California Utilities estimated that a 

single equipment class with standards 

set at 2.35 MEF/4.4 WF would achieve 

50 percent more energy savings and 

over 200 percent more water savings 

over the next 30 years than the 

standards proposed in the November 

2009 SNOPR, and that additional energy 

and water savings would be captured in 

future CCW rulemakings. (California 

Utilities, No. 67.10 at pp. 3–4) 

Regarding impacts to competition as 

these impacts relate to the equipment 

class issue, EJ stated that it would not 

agree with DOE if the Department 

determines that a single standard cannot 

be adopted because of impacts to the 

manufacturers and impacts on 

competition. EJ and the Joint Comment 

believe those impacts are overstated. (EJ, 

Public Meeting Transcript, No. 67.4 at 

pp. 30–31; Joint Comment, No. 67.6 at 

pp. 4–5; see also California Utilities, No. 

67.10 at pp. 4–5) EJ asserted that it is 

not only the lessening in competition, 

but rather the effects of such lessening, 

that DOE must consider. EJ stated that 

the DOJ, in its letter to DOE on this 

rulemaking, failed to consider low 

barriers to entry into the CCW market in 

its analysis of the impacts to 

competition, and that consequently, it 

would be irrational for DOE to conclude 

that a single standard would result in 

any significant impact on competition 

in the CCW market. (EJ, No. 67.5 at p. 

9) EJ, ASAP, and the Joint Comment 

also asserted that DOE must consider 

adopting a tiered standard, or granting 

Alliance a temporary waiver, as ways to 

minimize any impacts on competition 

that may result from imposition of a 

single standard. (EJ, No. 67.5 at 9–10; 

ASAP, Public Meeting Transcript, No. 

67.4 at pp. 166–167; Joint Comment, No. 

67.6 at p. 6; see also California Utilities, 

No. 67.10 at pp. 4–5) 

In response to the above comments, 

DOE notes that EPCA provides the 

criteria under which DOE may define 

classes for covered equipment: 

A rule prescribing an energy conservation 

standard for a type (or class) of covered 

products shall specify a level of energy use 

or efficiency higher or lower than that which 

applies (or would apply) for such type (or 

class) for any group of covered products 

which have the same function or intended 

use, if the Secretary determines that covered 

products within such group— 

• Consume a different kind of energy from 

that consumed by other covered products 

within such type (or class); or 

• Have a capacity or other performancerelated feature which other products within 

such type (or class) do not have and such 

feature justifies a higher or lower standard 

from that which applies (or will apply) to 

other products within such type (or class). 

In making a determination under this 

paragraph concerning whether a 

performance-related feature justifies the 

establishment of a higher or lower standard, 

the Secretary shall consider such factors as 

the utility to the consumer of such a feature, 

and such other factors as the Secretary deems 

appropriate. 

42 U.S.C. 6295(q); see also 6316(a). 

As stated above, DOE concluded 

preliminarily in the October 2008 NOPR 

and the November 2009 SNOPR that 

separate equipment classes for toploading and front-loading CCWs were 

warranted because the method of 

loading had been previously determined 

to be a ‘‘feature’’ under rulemakings for 

RCWs and a single standard would 

eliminate top-loading CCWs from the 

market. DOE analysis for this final rule, 

including evaluation of comments 

submitted by interested parties, has 

identified at least one consumer utility 

related to the method of loading clothes, 

specifically for CCWs, which represents 

a ‘‘feature’’ for purposes of 42 U.S.C. 

6295(o)(4). Consequently, DOE has 

retained two equipment classes for 

CCWs for this standard. 

Specifically, DOE believes that the 

longer cycle times of front-loading 

CCWs versus cycle times for top-loaders 

are likely to significantly impact 

consumer utility. In commercial and 

multi-housing settings, it is beneficial to 

consumers with multiple, sequential 

laundry loads to approximately match 

CCW cycle times to those of the dryers 

to maximize throughput and minimize 

wait times, and wash times of 70–115 

minutes would be longer than most 

drying cycles. Because the longer wash 

cycle times for front-loaders arise from 

the reduced mechanical action of 

agitation as compared to top-loaders, 

DOE believes such longer cycles may be 

required to achieve the necessary 

cleaning, and thereby constitute a 

performance-related utility of frontloading CCWs versus top-loading CCWs 

under the meaning of 42 U.S.C. 6295(q). 

DOE notes that access without 

stooping is not a consumer utility that 

would warrant the definition of separate 

equipment classes. DOE agrees that toploaders eliminate the need for stooping, 

while front-loaders, in the absence of a 

pedestal, require such action. DOE 

further notes, however, that commercial 

clothes dryers are front-loading as well, 

so it believes that those consumers that 

dry their clothing loads are already 

accustomed to stooping. In addition, 

DOE observes that many laundromat 

and multi-housing applications have 

installed the CCWs on a platform to 

effect the same elevation as a 

manufacturer-supplied pedestal would, 

and that the cost of installing such a 

platform in the event that the owner/ 

operator decides that preventing 

stooping is important is likely to be 

minimal. 

DOE is aware that a top-loading, 

horizontal-axis CCW had been available 

previously. Due to the inherently higher 

efficiency of a horizontal-axis platform, 

it is likely that such a design could 

achieve a higher MEF and lower WF 

than the max-tech top-loading CCW 


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13A suds-saving feature allows water from one 

wash cycle to be reused in the next wash cycle. 

After agitation, sudsy wash water is pumped into 

a separate storage tub, remaining there until the 

next wash cycle. While the water is stored, soil 

settles to the bottom of the tub. During the next 

wash cycle, all but an inch of the water is pumped 

back into the washer tub for use again. Clothes 

washers with the suds-saving feature must be larger 

than typical clothes washers in order to 

accommodate the additional storage tub. 

14Typically, vertical-axis clothes washers are 

accessed from the top (also known as ‘‘top-loaders’’), 

while horizontal-axis clothes washers are accessed 

from the front (also known as ‘‘front-loaders’’). 

However, a limited number of residential 

horizontal-axis clothes washers which are 

accessible from the top (using a hatch in the wash 

basket) are currently available, although DOE is 

unaware of any such CCWs on the market. For the 

purposes of this analysis, the terms ‘‘vertical-axis’’ 

and ‘‘top-loading’’ will be used interchangeably, as 

will the terms ‘‘horizontal-axis’’ and ‘‘front-loading.’’ 

Additionally, clothes washers that have a wash 

basket whose axis of rotation is tilted from 

horizontal are considered to be horizontal-axis 

machines. 

efficiency level assumed for this 

analysis. DOE research determined, 

however, that this particular washer 

platform was withdrawn from the 

market based on a lack of suitability for 

commercial settings. However, even if a 

top-loading, horizontal-axis CCW was 

again marketed, it is likely that such 

washers would have cycle times similar 

to those of other horizontal-axis 

machines and, therefore, would not 

likely provide substantially the same 

consumer utility as top-loading, 

vertical-axis machines. 

DOE also does not consider first cost 

a ‘‘feature’’ that provides consumer 

utility for purposes of EPCA. DOE 

acknowledges that price is an important 

consideration to consumers, but DOE 

accounts for such consumer impacts in 

the LCC and PBP analyses conducted in 

support of this rulemaking. 

Given the above discussion on cycle 

times, DOE concludes, consistent with 

its preliminary conclusion in the 

October 2007 NOPR and November 

2008 SNOPR, that top-loading involves 

consumer utilities that, in the context of 

CCWs, are a feature for purposes of 42 

U.S.C. 6295(o)(4). For the reasons stated 

in section VI.D of the preamble, DOE 

believes that the standards established 

for top-loading and front-loading CCWs 

achieve the maximum improvements in 

energy efficiency that are 

technologically feasible and 

economically justified. DOE further 

believes that the top-loading standard, 

set at the max-tech efficiency level, can 

be achieved by all manufacturers by the 

time compliance with the standards is 

required. Therefore, DOE concludes that 

top-loading CCWs would not be 

eliminated from the market by the 

amended energy conservation 

standards. 

In response to the comments related 

to impacts on competition, DOE 

believes its analysis accurately describes 

the impacts of the various TSLs, 

including the standards established 

today, on the low-volume manufacturer 

(LVM). See section VI.C.2 of the 

preamble for further discussion of these 

impacts. In addition, EPCA does not 

permit DOE to establish a tiered 

standard for CCWs. 42 U.S.C. 

6313(e)(2)(A)(ii) states that an amended 

standard for CCWs ‘‘shall apply to 

products manufactured 3 years after the 

date on which the final amended 

standard is published.’’ DOE interprets 

this provision to mean that the amended 

standard must apply to all CCWs 

manufactured 3 years after the date of 

publication of this final rule, and that 

imposing some intermediate standard at 

that time (i.e., 2013) and the final 

amended standard at some future date 

(i.e., 2015) is not authorized. In contrast, 

42 U.S.C. 6295(g)(4)(C) states in relevant 

part that amendments to the standards 

‘‘shall apply to products manufactured 

after a date which is five years after’’ the 

effective date of the previous 

amendment. DOE believes that the 

phrase ‘‘after a date which is 5 years 

after’’ (emphasis added) may allow more 

flexibility for a tiered standard. DOE 

also believes that the provisions of 42 

U.S.C. 7194 that allow for the grant of 

an exemption from an energy 

conservation standard promulgated by 

DOE are not an appropriate justification 

for the promulgation of a particular 

efficiency standard in the first instance. 

B. Technology Assessment 

For the technology assessment in the 

November 2009 NOPR analyses, DOE 

considered all RCW and CCW 

technology options that it was aware 

have been incorporated into working 

prototypes or commercially available 

clothes washers at the time of the 

analysis. DOE noted in the November 

2009 SNOPR that it considered as 

design options many technologies that 

are found in both RCWs and CCWs. Of 

the technology options screened out, 

only suds-saving 13 has appeared 

previously as a feature in commercially 

available RCWs. DOE concluded in the 

November 2009 SNOPR that sudssavings was an RCW feature that was 

appropriately screened out for the CCW 

analysis. 74 FR 57738, 57747 (Nov. 9, 

2009). 

For the November 2009 SNOPR, DOE 

also gathered and analyzed data 

published by CEC, CEE, and the 

ENERGY STAR Program to provide an 

overview of the energy efficiency levels 

achieved in CCWs and RCWs. DOE 

found that all front-loading CCWs on 

the market at that time were more 

efficient than top-loading CCW models. 

No top-loading CCW listed in these 

databases had an MEF greater than 1.76, 

whereas the majority of front-loading 

CCWs were listed as having MEFs 

greater than 2.0. Similarly, no toploading CCWs were rated as having a 

WF below 8.0, whereas the majority of 

front-loading CCWs had rated WFs 

below 7.0. In contrast, DOE research 

suggested that the most efficient 

vertical-axis RCWs achieved efficiency 

levels comparable to some horizontalaxis CCWs.14 High efficiency, verticalaxis platforms that do not employ an 

agitator have been sold into the RCW 

market for several years, but have yet to 

be released in a CCW form. DOE noted 

in the November 2009 SNOPR that it 

expected manufacturers would continue 

to introduce new features first in the 

higher-volume residential markets 

before transitioning them to commercial 

applications. However, DOE noted that 

it is not aware of such technologies 

being incorporated in either 

commercially available CCWs or 

working CCW prototypes, and therefore 

did not consider them in the SNOPR 

analyses. DOE concluded in the 

November 2009 SNOPR that it believed 

it had adequately considered RCW 

technologies that may be applicable to 

CCWs in its technology assessment. 74 

FR 57738, 57747–48 (Nov. 9, 2009). 

Because DOE did not receive any 

comments on the technology options 

analyzed in the November 2009 SNOPR, 

DOE continues to conclude in today’s 

final rule that it has adequately 

considered RCW technologies that may 

be applicable to CCWs in its technology 

assessment. 

C. Engineering Analysis 

The purpose of the engineering 

analysis is to characterize the 

relationship between the incremental 

manufacturing cost and efficiency 

improvements of CCWs. DOE used this 

cost-efficiency relationship as input to 

the PBP, LCC, and NES analyses. As 

discussed in the November 2009 

SNOPR, DOE conducted the engineering 

analysis for this rulemaking using the 

efficiency-level approach, which 

provides the incremental costs of 

moving to higher energy efficiency 

levels, without regard to the particular 

design option(s) used to achieve such 

increases. For this analysis, DOE relied 

upon efficiency data published in 

multiple databases, including those 

published by CEC, CEE, and ENERGY 

STAR, which were supplemented with 

limited laboratory testing, data gained 

through engineering analysis, and 


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primary and secondary research. 74 FR 

57738, 57748–51 (Nov. 9, 2009). Chapter 

5 of the TSD contains a detailed 

discussion of the engineering analysis 

methodology. 

1. Efficiency Levels 

In the November 2009 SNOPR, DOE 

proposed the following efficiency levels 

for CCWs, shown in Table IV.1, in 

which the max-tech top-loading level 

was designated at efficiency level 2 

(1.60 MEF/8.5 WF). The top-loading 

max-tech efficiency level representated 

a change from the max-tech level 

proposed in the October 2008 NOPR, 

based on DOE testing and analysis of the 

max-tech top-loading CCW model. No 

changes were made to the efficiency 

levels proposed in the October 2008 

NOPR for front-loading CCWs in the 

November 2009 SNOPR. 

TABLE IV.1—COMMERCIAL CLOTHES WASHER EFFICIENCY LEVELS PROPOSED FOR THE NOVEMBER 2009 SNOPR 

Efficiency level 

Modified energy factor, ft3/kWh/water 

factor, gal/ft3

Top-loading Front-loading 

Baseline ....................................................................................................................................................... 1.26/9.5 1.72/8.0 

1 ................................................................................................................................................................... 1.42/9.5 1.80/7.5 

2 ................................................................................................................................................................... 1.60/8.5 2.00/5.5 

3 ................................................................................................................................................................... N/A 2.20/5.1 

4 ................................................................................................................................................................... N/A 2.35/4.4 

DOE noted in the November 2009 

SNOPR that the max-tech top-loading 

CCW is currently marketed only to onpremise laundry facilities and is not yet 

offered with a coin-box or smart card 

reader option for laundromat or multihousing laundry use. DOE research 

indicated that the max-tech CCW is 

based on a standard vertical-axis RCW 

platform (i.e., one with an agitator) with 

similar construction and components as 

the CCW models marketed by that 

manufacturer to commercial 

laundromats. No proprietary 

technologies were observed, and, thus, 

DOE stated in the November 2009 

SNOPR that it believes that all CCW 

manufacturers could market verticalaxis clothes washers with similar 

performance in time for the compliance 

date of the proposed rule. 74 FR 57738, 

57749–50 (Nov. 9, 2009). 

DOE research, conducted as part of 

the November 2009 SNOPR, also 

suggested that commercial acceptance 

depends on wash performance. DOE 

recognized that any amended energy 

conservation standard could result in a 

lessening of certain equipment utility 

and hence interviewed interested 

parties for the November 2009 SNOPR 

to better understand the potential 

impacts of energy efficiency strategies 

that manufacturers might employ in 

their equipment. Although interested 

parties suggested that the max-tech 

model does not provide acceptable 

washing and rinsing performance 

targets, especially when overloaded, 

they did not submit evidence of such 

performance degradation. 74 FR 57738, 

57750 (Nov. 9, 2009). 

EJ commented that, if top-loading 

CCWs are required to be retained in the 

commercial market under amended 

standards, DOE must consider a third 

standard level based on the performance 

of Alliance’s best-performing top-loader. 

Alliance stated that, while no 

industry standard performance test 

procedure exists for CCWs, it believes 

wash and rinse performance would be 

affected at the top-loading max-tech 

level, because the max-tech model does 

not allow true hot or warm water, unlike 

existing traditional CCWs which offer 

site-supplied hot water typically of 120 

degrees Fahrenheit (°F) and above and 

user-acceptable 90 °F to 110 °F warm 

water. Alliance stated that the max-tech 

top-loading model only provides 108 °F 

to 112 °F water when the hot setting is 

selected, which Alliance considers to be 

warm water. Similarly, Alliance stated 

that when the user selects a warm 

setting on the max-tech top-loader, the 

unit only provides 71 °F to 73 °F wash 

water, which Alliance considers to be 

cold water. Alliance believes that CCW 

users that pay for hot water should 

receive hot water. Otherwise, CCW 

users could not clean clothes as well as 

consumers with access to RCWs. 

Further, Alliance commented that 

rinsing is minimal for the max-tech toploader, unlike typical complete 

submersion of the clothes load that 

would allow sand, heavy sediment, or 

suds trapped between the layers to be 

properly removed. Alliance stated that 

the max-tech top-loading model has 

received almost no acceptance by the 

industry, based on comments it received 

from its top 20 multi-housing 

customers, and that DOE has not tested 

its ability to clean clothes. Therefore, 

Alliance believes that max-tech toploader model is not appropriate for the 

commercial laundry market. (Alliance, 

Public Meeting Transcript, No. 67.4 at 

pp. 22–23, 29); Alliance, No. 66.4 at pp. 

4, 7, 9; Alliance, No. 67.8 at p. 3). 

Alliance stated that the front-loading 

max-tech efficiency level should have a 

WF of 5.0 rather than 4.4. Alliance 

stated that it tested a competitive frontloading CCW model that had a WF of 

4.5 and found that it did not wet the 

center of the clothes load during the 

wash tumble portion of the cycle. 

Therefore, Alliance stated that 

consumer utility would be negatively 

affected. (Alliance, Public Meeting 

Transcript, No. 67.4 at pp. 139–140; 

Alliance, No. 67.8 at p. 3). Alliance 

further stated that consumer utility in a 

CCW must go beyond just getting 

clothes wetted, applying some 

mechanical action and then extraction 

of the moisture. Alliance commented 

that DOE did not assess if the proposed 

max-tech CCW cleans clothes to user 

expectations. According to Alliance, the 

ability of a CCW to clean clothes 

sufficiently is a central issue in this 

rulemaking, and stated that ‘‘A 

rulemaking will be overturned as 

arbitrary and capricious if ‘the [agency] 

has failed to respond to specific 

challenges that are sufficiently central to 

its decision.’ ’’ Horsehead Resource Dev. 

Co. v. Browner, 16 F.3d 1246, 1263 (DC 

Cir 1994) (citations omitted). (Alliance, 

No. 66.4 at pp. 6–7). 

GE commented that, while it supports 

the standards proposed in the November 

2009 SNOPR for top-loading and frontloading CCWs, it is concerned that the 

max-tech top-loading CCW model is 

designed for on-premises laundry, 

which is a relatively limited segment of 

the commercial market. GE stated that 

the max-tech model has not been shown 

to be viable in the harsher laundromat 

environment where CCWs are subject to 

tougher conditions such as overloading. 

GE also requested DOE’s test data on the 

max-tech top-loader model. (GE, Public 


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15The Multiple Route Operators’ letters were 

attached to the Alliance letter, comment number 

67.8, in response to the November 2009 SNOPR. A 

notation in the form ‘‘Multiple Route Operators, No. 

67.8 at pp. 1–3’’ identifies a written comment (1) 

made by some or all of the Multiple Route 

Operators, (2) recorded in document number 67.8 

that is filed in the docket of this rulemaking (Docket 

No. EE–2006–STD–0127), maintained in the 

Resource Room of the Building Technologies 

Program, and (3) which appears on pages 1–3 of 

each of the letters submitted by the Multiple Route 

Operators. 

Meeting Transcript, No. 67.4 at p. 58; 

GE, No. 67.9 at pp. 1–2). 

Whirlpool stated that a top-loading 

CCW max-tech level of 1.76 MEF/8.3 

WF can be attained with sufficient 

investment of financial and human 

capital. However, Whirlpool considers 

this level a considerable stretch target 

that it has not achieved even in a 

prototype platform. Whirlpool believes 

that the front-loading CCW max-tech 

level could be slightly higher, since the 

CEE database lists a model at 2.23 MEF/ 

4.3 WF. Whirlpool believes this level is 

at or near the capabilities of known 

technologies that are viable in the 

commercial environment. (Whirlpool, 

No. 67.11 at p. 2). Northwest Power and 

Conservation Council (NPCC) asked 

whether, because the max-tech toploading CCW model did not meet its 

rated MEF and WF, DOE would 

consider testing units at other levels, 

particularly high-efficiency models, to 

make sure the performance is as 

advertised. (NPCC, Public Meeting 

Transcript, No. 67.4 at pp. 57–59). 

In response, DOE notes that, in the 

absence of an accepted, standardized 

test procedure for CCW wash and rinse 

performance, it cannot evaluate the 

cleaning capabilities of various 

considered max-tech models. DOE 

agrees that proper wetting and 

distribution of the detergent and rinse 

water in the machine is critical for 

cleaning performance. However, DOE 

did not receive any evidence that the 

max-tech top-loading model does not 

achieve such action, only the inference 

that, because the unit employs spray 

rinse, that it would not exhibit 

acceptable rinse performance. DOE 

further notes that it did not receive any 

evidence that somewhat reduced water 

temperatures at hot and cold settings 

would preclude acceptable cleaning 

performance. DOE notes the existence of 

multiple wash and rinse performance 

standards such as AHAM HLW–1, but 

the industry has yet to come to a 

consensus regarding the minimum wash 

and rinse performance that an RCW or 

CCW should achieve. In the interim, 

DOE relies on manufacturers to market 

and sell only those products that they 

feel perform adequately. 

DOE concluded for the November 

2009 SNOPR that the performance of the 

top-loading CCW model was 1.63 MEF/ 

8.4 MEF instead of the rated value of 

1.76 MEF/8.3 WF on which the maxtech level for the October 2008 NOPR 

was based. DOE does not have evidence 

to suggest that any other CCWs 

currently on the market can achieve 

1.76 MEF/8.3 WF, nor that technology 

exists to do so without significantly 

impacting cleaning performance. DOE 

based the selection of the top-loading 

max-tech level at efficiency level 2 on 

test results for the max-tech model and 

its belief that 1.60 MEF/8.5 WF 

represented the maximum CCW 

performance achievable by all 

manufacturers without material harm. 

At the time of the analysis, Alliance’s 

highest efficiency top-loading CCW was 

rated at 1.55 MEF/8.6 WF. DOE believes 

that Alliance’s model and the max-tech 

model incorporate similar technologies, 

and that the energy and water usage of 

the two models are not sufficiently 

different as to warrant the inclusion of 

an additional efficiency level slightly 

below the max-tech level. Given the 

constraints of the rulemaking schedule, 

DOE cannot evaluate an undetermined 

number of CCW models in order to 

confirm that no other unit which is 

rated at lower efficiencies than the 

proposed max-tech model could in 

actuality achieve higher performance, 

nor does DOE have any evidence, 

particularly regarding durability, to 

demonstrate that the max-tech toploading CCW model, while designed for 

on-premises laundry applications, 

cannot be utilized successfully in other 

commercial laundry facilities such as 

laundromats or multi-family housing 

settings. Therefore, DOE has retained 

the max-tech top-loader efficiency level 

for today’s final rule based on the maxtech top-loading CCW model proposed 

in the November 2009 SNOPR. 

ASAP suggested that DOE should not 

limit consideration of max-tech models 

to CCWs, but that DOE should also 

consider clothes washer products from 

the residential market. According to 

ASAP, the distinctive nature of the CCW 

market has been characterized by the 

need for durability and resistance to 

overloading and misuse, which is 

typical of laundromats and multihousing laundry rooms. But CCWs for 

on-premises laundry facilities are also 

being considered in this rulemaking, 

and they typically are subject to less 

harsh conditions than models destined 

for laundromats and multi-family 

housing, Thus, ASAP questioned why 

RCWs would not be considered for the 

max-tech levels if CCWs designed for 

on-premises laundry are. (ASAP, Public 

Meeting Transcript, No. 67.4 at pp. 61– 

62, 64–65) Southern California Gas 

Company (SCG) commented that DOE 

should consider durability as well as 

efficiency in selecting the max-tech 

models. (SCG, Public Meeting 

Transcript, No. 67.4 at p. 63) Additional 

comments regarding the applicability of 

RCWs in CCW application were 

received (along with other comments) 

from 20 route operators: All Valley 

Washer Services, Inc; Angel Coin 

Service, Inc.; Automatic Industries; 

Automatic Laundry Services Co., Inc.; 

B&H Coin Laundry Service; Caldwell 

and Gregory, LLC; CALECO; Cincinnati 

Coin Laundry, Inc.; Coin Meter 

Company; Commercial Laundries, Inc.; 

Continental Laundry Systems 

Incorporated; Excalibur Laundries, Inc.; 

F&B Coin Laundry Route; Family Pride 

Laundries; FMB Laundry, Inc.; Jetz 

Service Co., Inc.; Launderama, LLC; 

Laundry Equipment Corp.; National 

Coin Washer and Service Company, 

Inc.; and San Diego Laundry Equipment 

Co. (the Multiple Route Operators). 

These comments were originally sent to 

DOJ in response to the October 2008 

NOPR, and were resubmitted by 

Alliance along with its own comments 

in response to the November 2009 

SNOPR. Ninety-five percent of all route 

operators who commented on the 

November 2009 SNOPR stated that they 

did not consider RCWs suitable for CCW 

applications. The principal reasons 

given were the lack of durability, lack of 

resistance to vandalism, and other 

specified and unspecified performance 

issues. Most of the Multiple Route 

Operators expressed reluctance to try 

high efficiency top-loading clothes 

washers due to perceived wash 

performance issues. Additionally, 

several of the Multiple Route Operators 

stated that had tried out such washers 

and replaced them with regular toploading clothes washers due to 

consumer complaints regarding wash 

performance and other issues. (Multiple 

Route Operators, No. 67.8, pp. 1–3 15) 

DOE notes that multiple 

manufacturers stated during interviews 

that high efficiency RCWs utilize 

technologies that are not suitable in 

harsher commercial settings such as 

laundromats and multi-family housing 

due to environmental factors such as 

overloading and abuse. Among these 

manufacturers were suppliers of high 

efficiency top-loading RCWs, i.e., 

manufacturers that would face the 

lowest conversion costs in the industry 

to modify a given RCW model for CCW 

use. Additionally, DOE considered the 

comments submitted by the Multiple 

Route Operators with experience 


rmajette on DSK29S0YB1PROD with RULES2
Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 1137 

16SEC documents pertaining to the LVM are 

available online at http://sec.gov/. 

17PPI data is maintained by the Bureau of Labor 

Statistics and is available at http://www.bls.gov/ppi/ 

utilizing high efficiency top-loading 

clothes washers in a commercial setting. 

Lastly, DOE received no evidence that 

all the technologies used in a max-tech 

top-loading RCW can be expected to be 

ready for inclusion in CCWs by the 

compliance date of today’s final rule 

while offering similar or better wash 

performance, given the very different 

operational environments (short wash 

cycles, among other factors). Hence, 

DOE concludes that high efficiency toploading RCW models should not be 

considered representative of the 

efficiency levels that top-loading CCWs 

can achieve until the technologies 

required to achieve such efficiency 

levels have been successfully 

demonstrated in CCWs. 

For front-loaders, DOE observes that 

multiple models from several 

manufacturers, including Alliance, are 

rated with a WF of 4.5 or lower. DOE 

believes that the presence of these CCW 

models on the commercial market 

suggests that sufficient cleaning 

performance is able to be achieved at 

such WF levels. Further, DOE did not 

receive any evidence that the max-tech 

model, rated at a 4.4 WF, could not 

demonstrate wash performance on par 

with consumer utility requirements, nor 

if, in fact, it did not, that a WF of 5.0 

would provide wash performance that 

would be deemed suitable, DOE notes 

that the max-tech level proposed in the 

November 2009 SNOPR had 

approximately 5 percent higher MEF 

and 2 percent higher WF than the model 

that Whirlpool suggests. While the 

proposed max-tech level therefore was 

slightly less stringent in terms of water 

consumption than the level Whirlpool 

suggested, DOE believes that the higher 

energy consumption of the proposed 

level is the primary factor to consider in 

defining a max-tech level. Therefore, 

DOE concluded that the max-tech levels 

proposed in the November 2009 SNOPR 

are technologically feasible, and it has 

retained the efficiency levels shown in 

Table IV.1 for today’s final rule. 

DOE received comments in response 

to the October 2008 NOPR that frontloading CCWs with electric heaters have 

an MEF of 1.96, which would not meet 

the proposed front-loading standards. 

According to these comments, 

consumers in some parts of the northern 

United States need such heaters to 

supplement their hot water supply in 

order to maintain proper wash 

temperatures despite very cold water 

supply temperatures. DOE indicated in 

the November 2009 SNOPR that it had 

received no data on the extent or size of 

this impact or of the affected 

population. DOE sought comment, 

including population and efficiency 

impact data, to describe this issue. 74 

FR 57738, 57750 (Nov. 9, 2009) 

Alliance and NPCC discussed 

whether a water heating CCW would be 

measured as having higher water 

heating energy consumption under the 

DOE clothes washer test procedure than 

a non-water heating CCW, given the 

inlet water temperature requirements. 

Alliance stated that the test procedure 

would require measurement of energy 

consumption with the heater on. 

(Alliance, Public Meeting Transcript, 

No. 67.4 at pp. 66–72) 

Whirlpool stated that it does not 

produce any water heating CCWs and 

does not believe this is a significant 

segment of the market. In the absence of 

further data on the affected population 

or efficiency impacts, DOE is adopting 

energy conservation standards for frontloading CCWs both with and without 

electric heaters for the reasons 

discussed in section VI.D. 

DOE did not receive further 

information regarding the market share 

or efficiency impact of water heating 

CCWs, but agrees that it likely does not 

represent a significant segment of the 

CCW market. In the absence of 

additional data, DOE determined that it 

will retain the max-tech front-loading 

CCW level that was proposed in the 

November 2009 SNOPR. 

2. Manufacturing Costs 

In the October 2008 NOPR, DOE 

presented manufacturing cost estimates 

based on the November 2007 ANOPR 

analysis, revised in response to detailed 

CCW manufacturer feedback obtained at 

the NOPR stage for equipment at each 

efficiency level. 73 FR 62034, 62055–56 

(Oct. 17, 2008). These manufacturing 

costs were the basis of inputs for a 

number of other analyses in this 

rulemaking, including the LCC, national 

impact, and GRIM analyses. 

As described in the October 2008 

NOPR, DOE found that an LVM operates 

in both the residential and CCW 

markets. DOE considers this 

manufacturer to be low-volume because 

its annual shipments in the combined 

RCW and CCW market are significantly 

lower than those of its larger 

competitors. However, unlike its larger 

rivals, most of the LVM’s unit 

shipments are in the CCW market, 

where the LVM has significant market 

share. Also unlike its diversified 

competitors, this company exclusively 

manufactures laundry equipment. A 

review of the Securities and Exchange 

Commission (SEC) 10–K documents 

filed by the LVM revealed that, as of 

2005, this company derived 22 percent 

of its total revenue from the sale of 

front- and top-loading clothes washers 

and 87 percent of that income was from 

the commercial market.16 As a result, 

the LVM could be affected 

disproportionately by any rulemaking 

concerning CCWs compared to its 

competitors, for whom CCWs represent 

less than 2 percent of total clothes 

washer sales. Alliance stated in 

response to the October 2008 NOPR that 

it is the LVM and that it has neither the 

purchasing power nor the funding to 

support wide-ranging research and 

development programs like those of its 

larger, more diverse rivals. As a result, 

the manufacturing costs for Alliance are 

inherently higher compared to those of 

its rivals. Alliance believes that the cost 

of compliance with the top-loading 

CCW standard proposed in the October 

2008 NOPR would be especially high if 

Alliance were required to introduce 

non-traditional agitator designs to meet 

it. 74 FR 57738, 57762 (Nov. 9, 2009). 

DOE research, conducted as part of 

the November 2009 SNOPR, suggests 

that the proposed efficiency level for 

vertical-axis clothes washers can be met 

with conventional, non-proprietary 

technology that is on the market today. 

Since the October 17, 2008 NOPR 

meeting, DOE received no further 

comments on the manufacturing cost 

curves. For the November 2009 SNOPR, 

DOE retained all cost estimates 

presented in the October 2008 NOPR at 

the retained efficiency levels, though 

each value was scaled by the Producer 

Price Index (PPI) multiplier for the 

commercial laundry equipment industry 

(NAICS 333312) between 2007 and 2008 

to update the costs in the October 2008 

NOPR to 2008$.17 These are shown in 

Table IV.2. 


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1138 Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 

TABLE IV.2—COMMERCIAL CLOTHES WASHER INCREMENTAL MANUFACTURING COSTS PROPOSED IN NOVEMBER 2009 

SNOPR 

Efficiency level 

Modified energy factor ft3/kWh/ 

water factor gal/ft3

Incremental cost $ 

Top-loading Front-loading Top-loading Front-loading 

Baseline ................................................................................................... 1.26/9.5 1.72/8.0 0.00 0.00 

1 ............................................................................................................... 1.42/9.5 1.80/7.5 77.60 0.00 

2 ............................................................................................................... 1.60/8.5 2.00/5.5 134.99 14.21 

3 ............................................................................................................... N/A 2.20/5.1 N/A 39.34 

4 ............................................................................................................... N/A 2.35/4.4 N/A 66.16 

Because DOE did not receive any new 

information on the manufacturing cost 

curves, DOE retained all the incremental 

manufacturing costs presented in the 

November 2009 SNOPR at the retained 

efficiency levels for today’s final rule. 

Table IV.3 shows these costs. 

TABLE IV.3—COMMERCIAL CLOTHES WASHER INCREMENTAL MANUFACTURING COSTS

Efficiency level 

Modified energy factor ft3/kWh/ 

water factor gal/ft3

Incremental cost $ 

Top-loading Front-loading Top-loading Front-loading 

Baseline ................................................................................................... 1.26/9.5 1.72/8.0 0.00 0.00 

1 ............................................................................................................... 1.42/9.5 1.80/7.5 77.60 0.00 

2 ............................................................................................................... 1.60/8.5 2.00/5.5 134.99 14.21 

3 ............................................................................................................... N/A 2.20/5.1 N/A 39.34 

4 ............................................................................................................... N/A 2.35/4.4 N/A 66.16 

D. Life-Cycle Cost and Payback Period 

Analysis 

In response to the requirements of 

section 325(o)(2)(B)(i) of the Act, DOE 

conducted LCC and PBP analyses to 

evaluate the economic impacts of 

possible amended energy conservation 

standards on CCW consumers. This 

section of the notice describes these 

analyses. DOE conducted the analysis 

using a spreadsheet model developed in 

Microsoft (MS) Excel for Windows 2007. 

The LCC is the total consumer 

expense over the life of the equipment, 

including purchase and installation 

expense and operating costs (energy and 

water expenditures, repair costs, and 

maintenance costs). The PBP is the 

number of years it would take for the 

consumer to recover the increased costs 

of a higher-efficiency equipment 

through energy savings. To calculate the 

LCC, DOE discounted future operating 

costs to the time of purchase and 

summed them over the lifetime of the 

equipment. DOE measured the change 

in LCC and the change in PBP 

associated with a given efficiency level 

relative to a base case forecast of 

equipment efficiency. The base case 

forecast reflects the market in the 

absence of amended mandatory energy 

conservation standards. As part of the 

LCC and PBP analyses, DOE developed 

data that it used to establish equipment 

prices, installation costs, annual energy 

consumption, energy and water prices, 

maintenance and repair costs, 

equipment lifetime, and discount rates. 

Commenting on DOE’s use of LCC and 

PBP results to evaluate the economic 

impacts of possible amended energy 

conservation standards on CCW 

consumers, Mr. Gayer stated that if the 

private benefits to consumers of a more 

efficient CCW outweigh the private 

costs of a more efficient CCW, then 

there will be a market for high efficiency 

CCWs and regulation would not be 

necessary. He added that if consumers 

are unwilling to purchase a high 

efficiency CCW without the regulation, 

then this suggests they are not willing 

to pay the higher CCW price in order to 

accrue lower future energy costs. (Gayer, 

No. 67.7 at p. 1) 

DOE agrees with the observation that 

many CCW purchasers are unwilling to 

pay the higher cost of a more efficient 

CCW in the face of potential operating 

savings benefits. DOE disagrees that this 

implies that it is using the wrong cost 

of capital in its analysis. DOE does not 

in general assume in its analysis that 

unregulated markets will equilibrate to 

a state where consumer decisions are 

perfectly aligned with private benefits 

and costs. DOE estimated the cost of 

capital based on information regarding 

the cost of borrowing and the 

opportunity cost of investment for CCW 

owners. Based on this cost of capital, 

DOE found that the operating cost 

benefits for many CCWs exceed the 

burden of increased initial costs for 

more efficient CCWs for many 

consumers who are currently using lowcost, low-efficiency CCWs. There are 

several possible reasons for the disparity 

between observed consumer behavior 

and the results of DOE’s consumer 

financial analysis which may include: 

(1) Limited consumer information and 

information processing capabilities and 

(2) the high transaction costs of fully 

evaluating LCC and other characteristics 

of available CCWs prior to purchase or 

lease. In addition, there remain a 

number of environmental externalities 

that are not currently reflected in energy 

and water prices, which cannot be 

considered by consumers and which are 

not included in DOE’s LCC and PBP 

analyses.. DOE did not receive or obtain 

sufficient information to provide a 

detailed explanation of why CCW 

purchasers tend to minimize first costs 

in the face of financially feasible gains 

that are likely to accrue from increased 

energy efficiency. DOE believes that its 

use of LCC and PBP results to evaluate 

the economic impacts of possible 

amended energy conservation standards 

on CCW consumers is appropriate given 

the information that is available. 

DOE was unable to develop a surveybased consumer sample for CCWs 

because the U.S. Energy Information 

Administration’s (EIA) Commercial 

Building Energy Consumption Survey 

(CBECS) does not provide the necessary 


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18Available online at: http://www.eia.doe.gov/ 

emeu/cbecs/. 

data to develop one.18 Instead, DOE 

established the variability and 

uncertainty in energy and water use by 

defining the uncertainty and variability 

in the use (cycles per day) of the 

equipment. The variability in energy 

and water pricing was characterized by 

regional differences in energy and water 

prices. DOE calculated the LCC 

associated with a baseline CCW. To 

calculate the LCC savings and PBP 

associated with equipment meeting 

higher efficiency standards, DOE 

substituted the baseline unit with a 

more efficient design. 

Table IV.4 summarizes the 

approaches and data DOE used to derive 

the inputs to the LCC and PBP 

calculations for the November 2009 

SNOPR. For today’s final rule, DOE did 

not introduce changes to either the LCC 

and PBP analyses methodology 

described in the November 2009 SNOPR 

or the inputs to the analysis. Chapter 8 

of the TSD contains detailed discussion 

of the methodology utilized for the LCC 

and PBP analyses as well as the inputs 

developed for the analyses. 

TABLE IV.4—SUMMARY OF INPUTS AND KEY ASSUMPTIONS IN THE LCC AND PBP ANALYSES

Inputs November 2009 SNOPR Changes for 

the final rule 

Affecting Installed Costs 

Equipment Price ........................................ Derived by multiplying manufacturer cost by manufacturer, distributor markups, and 

sales tax.

No change. 

Installation Cost ......................................... Baseline cost updated with RS Means Mechanical Cost Data, 2008 .......................... No change 

Affecting Operating Costs 

Annual Energy and Water Use ................. Per-cycle energy and water use based on MEF and WF levels. Disaggregated into 

per-cycle machine, dryer, and water heating energy using data from DOE’s 2000 

TSD for residential clothes washers. Annual energy and water use determined 

from the annual usage (number of use cycles). Usage based on several studies 

including research sponsored by MLA19 and the Coin Laundry Association20

(CLA). Different use cycles determined for multi-family and laundromat equipment 

applications.

No change. 

Energy and Water/Wastewater Prices ...... Electricity: Updated using EIA’s 2007 Form 861 data .................................................. No change. 

Natural Gas: Updated using EIA’s 2007 Natural Gas Monthly. 

Water/Wastewater: Updated using RFC/AWWA’s 2006 Water and Wastewater Survey.

Variability: Regional energy prices determined for 13 regions; regional water/wastewater price determined for four regions.

Energy and Water/Wastewater Prices 

Trends.

Energy: Reference Case forecast updated with EIA’s AEO 2009 April Release. 

High-Growth and Low-Growth forecasts updated with EIA’s AEO 2009 March Release.

No change. 

Water/Wastewater: Linear extrapolation of 1970–2008 historical trends in national 

water price index. For the four years after 2008, fixed the annual price to the 

value in 2008 to prevent a dip in the forecasted prices.

Repair and Maintenance Costs ................. Estimated annualized repair costs for each efficiency level based on half the equipment lifetime divided by the equipment lifetime.No change. 

Affecting Present Value of Annual Operating Cost Savings 

Equipment Lifetime .................................... Based on data from various sources including the CLA. Different lifetimes established for multi-family and laundromat equipment applications. Variability and uncertainty characterized with Weibull probability distributions.No change. 

Discount Rates .......................................... Approach based on cost of capital of publicly traded firms in the sectors that purchase CCWs. Primary data source is Damodaran Online.21No change. 

Affecting Installed and Operating Costs 

Effective Date of New Standard ................ 2013 .............................................................................................................................. No change. 

Base-Case Efficiency Distributions ........... Analyzed as two equipment classes: top-loading and front-loading. Distributions for 

both classes based on the number of available models at the efficiency levels.

No change. 

Top-Loading: 64.8% at 1.26 MEF/9.5 WF; 33.8% at 1.42 MEF/9.5 WF; 1.4% at 1.60 

MEF/8.5 WF.

Front-Loading: 3.5% at 1.72 MEF/8.0 WF; 0.0% at 1.80 MEF/7.5 WF; 73.7% at 2.00 

MEF/5.5 WF; 22.8% at 2.20 MEF/5.1 WF; 0.0% at 2.35 MEF/4.4 WF.

19Please see the following Web site for further information: http://www.mla-online.com/. 20Please see the following Web site for further information: http://www.coinlaundry.org/. 21Please see the following Web site for further information: http://pages.stern.nyu.edu/∼adamodar/. 

1. Equipment Prices 

To calculate the equipment prices 

faced by CCW purchasers, DOE 

multiplied the manufacturing costs 

developed from the engineering analysis 

by the supply chain markups it 

developed (along with sales taxes). DOE 

used the same supply chain markups for 

today’s final rule that were developed 


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22Available online at: http://www.rsmeans.com/ 

bookstore/. 

23Available online at: http://www.eia.doe.gov/ 

cneaf/electricity/page/eia861.html. 

24Available online at: http://www.eia.doe.gov/ 

oil_gas/natural_gas/data_publications/ 

natural_gas_monthly/ngm.html. 

25All AEO publications are available online at: 

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

26Raftelis Financial Consultants, Inc., 2006 RFC/ 

AWWA Water and Wastewater Rate Survey, 2006, 

(2006). This document is available at: http:// 

www.raftelis.com/ratessurvey.html. 

27U.S. Department of Energy, Technical Support 

Document: Energy Efficiency Standards for 

Consumer Products: Residential Central Air 

Conditioners and Heat Pumps (May 2002) chapter 

5. This document is available at: http:// 

www.eere.energy.gov/buildings/ 

appliance_standards/residential/ 

ac_central_1000_r.html. 

for the November 2009 SNOPR. See 

chapter 7 of the TSD for additional 

information. To calculate the final 

installed prices, DOE added installation 

cost to the equipment prices. 

2. Installation Cost 

Installation costs include labor, 

overhead, and any miscellaneous 

materials and parts. For the November 

2009 SNOPR and today’s final rule, DOE 

used data from the RS Means 

Mechanical Cost Data, 2008 on labor 

requirements to estimate installation 

costs for CCWs.22 DOE estimates that 

installation costs do not increase with 

equipment efficiency. 

3. Annual Energy Consumption 

DOE determined the annual energy 

and water consumption of CCWs by 

multiplying the per-cycle energy and 

water use by the estimated number of 

cycles per year. In the November 2009 

SNOPR, DOE concluded that the use of 

the existing RCW test procedure 

provides a representative basis for rating 

and estimating the per-cycle energy use 

of CCWs. For today’s final rule, DOE 

maintained the same approach. 

4. Energy and Water Prices 

a. Energy Prices 

DOE derived average electricity and 

natural gas prices for 13 geographic 

areas consisting of the nine U.S. Census 

divisions, with four large States (New 

York, Florida, Texas, and California) 

treated separately. 

For the November 2009 SNOPR and 

today’s final rule, DOE estimated 

commercial electricity prices for each of 

the 13 geographic areas based on 2007 

data from EIA Form 861, Annual 

Electric Power Industry Report.23 DOE 

calculated an average commercial 

electricity price by first estimating an 

average commercial price for each 

utility, and then calculated a regional 

average price by weighting each utility 

with consumers in a region by the 

number of commercial consumers 

served in that region. 

For the November 2009 SNOPR and 

today’s final rule, DOE estimated 

average commercial natural gas prices in 

each of the 13 geographic areas based on 

2007 data from the EIA publication 

Natural Gas Monthly. 24 DOE calculated 

an average natural gas price for each 

area by first calculating the average 

prices for each State, and then 

calculating a regional price by weighting 

each State in a region by its population. 

To estimate the trends in electricity 

and natural gas prices for the November 

2009 SNOPR and today’s final rule, DOE 

used the price forecasts in the AEO 2009 

April Release.25 To arrive at prices in 

future years, DOE multiplied the 

average prices described above by the 

forecast of annual average price 

changes. Because the AEO forecasts 

prices only to 2030, DOE followed past 

guidelines provided to the Federal 

Energy Management Program by EIA 

and used the average rate of change 

during 2020–2030 to estimate the price 

trends beyond 2030. 

The spreadsheet tools used to conduct 

the LCC and PBP analysis allow users to 

select either the AEO’s high-growth case 

or low-growth case price forecasts to 

estimate the sensitivity of the LCC and 

PBP to different energy price forecasts. 

The AEO 2009 April Release provides 

only forecasts for the Reference Case. 

Therefore, for the November 2009 

SNOPR and today’s final rule, DOE used 

the AEO 2009 March Release highgrowth case or low-growth forecasts to 

estimate high-growth and low-growth 

price trends. 

b. Water and Wastewater Prices 

DOE obtained commercial water and 

wastewater price data from the Water 

and Wastewater Rate Survey conducted 

by Raftelis Financial Consultants (RFC) 

and the American Water Works 

Association (AWWA). For the 

November 2009 SNOPR and today’s 

final rule, DOE used the 2006 Water and 

Wastewater Rate Survey.26 The survey 

covers approximately 300 water utilities 

and 200 wastewater utilities, with each 

industry analyzed separately. DOE 

calculated values at the Census region 

level (Northeast, South, Midwest, and 

West). Edison Electric Institute (EEI) 

questioned why water and wastewater 

prices were not developed at the Census 

division level. (EEI, Public Meeting 

Transcript, No. 40.5, p. 103 and p. 178) 

The samples that DOE obtained of 200– 

300 utilities are not large enough to 

calculate regional prices for all U.S. 

Census divisions and large States. 

Hence, DOE was only able to capture 

the variability of water and wastewater 

prices at the Census region level. 

To estimate the future trend for water 

and wastewater prices, DOE used data 

on the historic trend in the national 

water price index (U.S. city average) 

provided by the Bureau of Labor 

Statistics (BLS). For the October 2008 

NOPR, DOE extrapolated a future trend 

based on the linear growth from 1970 to 

2007. For the SNOPR, DOE continued to 

use the BLS historical data, which now 

provides data for the year 2008, and 

extrapolated the future trend based on 

the linear growth from 1970 to 2008. But 

rather than use the extrapolated trend to 

forecast the prices for the four years 

after 2008, DOE pinned the annual price 

to the value in 2008. Otherwise, 

forecasted prices for this 4-year time 

period would have been up to 8 percent 

lower than the price in 2008. Estimating 

prices in this manner is appropriate 

because it is consistent with the 

historical trend that demonstrates that 

prices do not decrease over time. 

Beyond the 4-year time period, DOE 

used the extrapolated trend to forecast 

prices out to the year 2043. DOE 

continued to use the above approach for 

today’s final rule. 

5. Repair and Maintenance Costs 

Repair costs are associated with 

repairing or replacing components that 

have failed in the appliance, whereas 

maintenance costs are associated with 

maintaining the operation of the 

equipment. DOE was unable to gather 

any empirical data specific to CCWs to 

estimate repair and maintenance cost. 

For the October 2008 NOPR and the 

November 2009 SNOPR, DOE included 

increased repair costs based on an 

algorithm developed by DOE for central 

air conditioners and heat pumps and 

which was also used for residential 

furnaces and boilers.27 This algorithm 

calculates annualized repair costs by 

dividing half of the equipment retail 

price over the equipment lifetime. In the 

absence of better data, DOE retained its 

approach from the November 2009 

SNOPR for today’s final rule. 

6. Equipment Lifetime 

For the November 2009 SNOPR and 

today’s final rule, DOE used a variety of 

sources to establish low, average, and 

high estimates for equipment lifetime. 

The average CCW lifetime was 11.3 

years for multi-family applications, and 

7.1 years in laundromat applications. 

DOE characterized CCW lifetimes with 

Weibull probability distributions. 


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28L.A. Greening, D.L. Greene, and C. Difiglio. 

‘‘Energy efficiency and consumption—the rebound 

effect—a survey.’’ Energy Policy 28 (2000) 389–401. 

Available for purchase at http://www.elsevier.com/ 

locate/enpol. 

7. Discount Rates 

To establish discount rates for CCWs 

for the November 2009 SNOPR and 

today’s final rule, DOE estimated the 

cost of capital of publicly traded firms 

in the sectors that purchase CCWs as the 

weighted average of the cost of equity 

financing and the cost of debt financing. 

DOE identified the following sectors 

purchasing CCWs: (1) Educational 

services; (2) hotels; (3) real estate 

investment trusts; and (4) personal 

services. DOE estimated the weightedaverage cost of capital (WACC) using the 

respective shares of equity and debt 

financing for each sector that purchases 

CCWs. It calculated the real WACC by 

adjusting the cost of capital by the 

expected rate of inflation. To obtain an 

average discount rate value, DOE used 

additional data on the number of CCWs 

in use in various sectors. DOE estimated 

the average discount rate for companies 

that purchase CCWs at 5.7 percent. 

8. Effective Date of the Amended 

Standards 

The compliance date is the future date 

when parties subject to the requirements 

of a new standard must begin 

compliance. For the November 2009 

SNOPR, DOE expected that the final 

rule will be published by January 1, 

2010, as required by EPACT 2005, with 

compliance with new standards 

required by January 1, 2013. For today’s 

final rule, DOE used the same date for 

compliance. DOE calculated the LCC for 

CCW consumers as if they would 

purchase new equipment in the year 

after the standard takes effect. 

9. Equipment Energy Efficiency in the 

Base Case 

For the LCC and PBP analysis, DOE 

analyzes higher efficiency levels relative 

to a baseline efficiency level. However, 

some consumers may already purchase 

equipment with efficiencies greater than 

the baseline equipment levels. Thus, to 

accurately estimate the percentage of 

consumers that would be affected by a 

particular standard level, DOE estimates 

the distribution of equipment 

efficiencies that consumers are expected 

to purchase under the base case (i.e., the 

case without new energy efficiency 

standards). DOE refers to this 

distribution of equipment energy 

efficiencies as a base-case efficiency 

distribution. As discussed previously in 

section IV.A, DOE decided to analyze 

CCWs with two equipment classes—toploading CCWs and front-loading CCWs. 

For the November 2009 SNOPR and 

today’s final rule, DOE used the number 

of available models within each 

equipment class to establish the basecase efficiency distributions. Table IV.5 

presents the market shares of the 

efficiency levels in the base case for 

CCWs. See chapter 8 of the TSD for 

further details on the development of 

CCW base-case market shares. 

TABLE IV.5—COMMERCIAL CLOTHES WASHERS: BASE CASE MARKET SHARES

Top-loading Front-loading 

Standard level MEF WF Market share 

% Standard level MEF WF Market share % 

Baseline ................ 1.26 9.50 64.8 Baseline ................ 1.72 8.00 3.5 

1 ............................ 1.42 9.50 33.8 1 ............................ 1.80 7.50 0.0 

2 ............................ 1.60 8.50 1.4 2 ............................ 2.00 5.50 73.7 

3 ............................ 2.20 5.10 22.8 

4 ............................ 2.34 4.40 0.0 

10. Split Incentive Between CCW 

Consumers and Users 

Under a split incentive situation, the 

party purchasing more efficient and 

presumably more expensive equipment 

(referred to as ‘‘consumers’’ in this 

notice) may not realize the operating 

cost savings from that equipment, 

because another party may pay the 

utility bill. Such a situation exists in 

segments of the CCW market. In 

comments on the October 2008 NOPR, 

Whirlpool and Alliance stated that those 

who own CCWs (usually route 

operators) often do not incur the 

operating costs as do, generally, 

laundromats and owners of multi-family 

dwellings. 73 FR 62067 (Oct. 17, 2008). 

Recognizing this, DOE evaluated the 

ability of CCW consumers to pass on the 

higher purchase costs of more expensive 

CCWs and concluded that few route 

operators would allow themselves to be 

held to a lease agreement that would 

prevent them from recovering the cost of 

more efficient CCW equipment. That is, 

DOE believes that these CCW consumers 

would be able to realize a significant 

share of the operating cost savings from 

more-efficient equipment. The Joint 

Comment stated that contracts between 

route operators and multi-housing 

property owners are subject to revision 

and renewal, and that the division of 

coin-box revenue may be renegotiated to 

allow for the savings achieved by moreefficient CCWs to be equitably shared 

between the purchasers/owners of the 

machines (route operators) and the 

parties responsible for paying electric, 

gas, water, and sewer bills (property 

owners). (Joint Comment, No. 67.6 at p. 

3) DOE agrees with the above comment, 

and continues to conclude that CCW 

consumers would be able to realize a 

significant share of the operating cost 

savings from more-efficient equipment. 

11. Rebound Effect 

The rebound effect occurs when a 

piece of equipment, made more efficient 

and used more intensively, does not 

yield the expected energy savings from 

the efficiency improvement. In the case 

of more efficient clothes washers, 

limited research indicates that there is 

no rebound effect for RCWs, although 

the consumer may choose to purchase 

larger models with more features that 

would result in higher energy use.28

DOE did not receive any comments from 

interested parties on the issue of the 

rebound effect for CCWs. Based on the 

limited research showing no rebound 

effect for RCWs, DOE did not include a 

rebound effect in its analysis of CCW 

standards. 

12. Inputs to Payback Period Analysis 

The PBP is the amount of time 

(expressed in years) it takes the 

consumer to recover the additional 

installed cost of more efficient 

equipment through operating cost 

savings, compared to baseline 

equipment. The simple PBP does not 

account for changes in operating 

expense over time or the time value of 

money. The inputs to the PBP 

calculation are the total installed cost of 

the equipment to the consumer for each 

efficiency level and the annual (firstVerDate Nov<24>2008 12:56 Jan 08, 2010 Jkt 220001 PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 E:\FR\FM\08JAR2.SGM 08JAR2

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year) operating expenditures for each 

efficiency level. For the November 2009 

SNOPR and today’s final rule, the PBP 

calculation uses the same inputs as the 

LCC analysis, except that energy price 

trends and discount rates are not 

needed. 

13. Rebuttable-Presumption Payback 

Period 

As noted above, EPCA, as amended 

(42 U.S.C. 6295(o)(2)(B)(iii) and 

6316(a)), establishes a rebuttable 

presumption that a standard is 

economically justified if the Secretary 

finds that ‘‘the additional cost to the 

consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three 

times the value of the energy (and as 

applicable, water) savings during the 

first year that the consumer will receive 

as a result of the standard,’’ as calculated 

under the test procedure in place for 

that standard. For each TSL, DOE 

determined the value of the first year’s 

energy savings by calculating the 

quantity of those savings in accordance 

with DOE’s test procedure, and 

multiplying that amount by the average 

energy price forecast for the year in 

which a new standard would be first 

effective—in this case, 2013. 

E. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

1. General 

DOE’s NIA assesses the national 

energy savings, as well as the national 

NPV of total consumer costs and 

savings, expected to result from new 

standards at specific efficiency levels. 

DOE applied the NIA spreadsheet to 

perform calculations of energy savings 

and NPV, using the annual energy 

consumption and total installed cost 

data from the LCC analysis. DOE 

forecasted the energy savings, energy 

cost savings, equipment costs, and NPV 

for each equipment class from 2013 to 

2043. The forecasts provide annual and 

cumulative values for all four 

parameters. In addition, DOE 

incorporated into its NIA spreadsheet 

the capability to analyze sensitivity of 

the results to forecasted energy prices 

and equipment efficiency trends. Table 

IV.6 summarizes the approach and data 

DOE used to derive the inputs to the 

NES and NPV analyses for the 

November 2009 SNOPR. DOE made no 

changes to the analyses for today’s final 

rule. (See chapter 11 of the final rule 

TSD for further details.) 

TABLE IV.6—APPROACH AND DATA USED TO DERIVE THE INPUTS TO THE NATIONAL ENERGY SAVINGS AND NPV 

ANALYSES

Inputs 2009 SNOPR Description Changes for the 

final rule 

Shipments ........................................... Annual shipments from Shipments Model ...................................................................... No change. 

Effective Date of Standard ................. 2013 ................................................................................................................................. No change. 

Base-Case Forecasted Efficiencies ... Shipment-weighted efficiency (SWEF) determined in the year 2005. SWEF held constant over forecast period.No change. 

Standards-Case Forecasted Efficiencies.Analyzed as two equipment classes. For each equipment class, roll-up scenario used 

for determining SWEF in the year that standards become effective for each standards case. SWEF held constant over forecast period.

No change. 

Annual Energy Consumption per Unit Annual weighted-average values as a function of SWEF .............................................. No change. 

Total Installed Cost per Unit ............... Annual weighted-average values as a function of SWEF .............................................. No change. 

Energy and Water Cost per Unit ........ Annual weighted-average values as a function of the annual energy consumption per 

unit and energy (and water) prices.

No change. 

Repair Cost and Maintenance Cost 

per Unit.

Incorporated changes in repair costs as a function of efficiency ................................... No change. 

Escalation of Energy and Water/ 

Wastewater Prices.

Energy Prices: Updated to AEO 2009 April Release forecasts for the Reference 

Case. AEO 2009 April Release does not provide High-Growth and Low-Growth 

forecasts; used AEO 2009 March Release High-Growth and Low-Growth forecasts 

to estimate high- and low-growth price trends.

Water/Wastewater Prices: Linear extrapolation of 1970–2008 historical trends in national water price index. For the four years following 2013, fixed the annual price to 

the value in 2008 to prevent a dip in the forecasted prices.

No change. 

Energy Site-to-Source Conversion ..... Conversion varies yearly and is generated by DOE/EIA’s NEMS program (a time-series conversion factor; includes electric generation, transmission, and distribution 

losses).

No change. 

Effect of Standards on Energy Prices Determined but found not to be significant ..................................................................... No change. 

Discount Rate ..................................... 3% and 7% real ............................................................................................................... No change. 

Present Year ....................................... Future expenses discounted to year 2009 ..................................................................... No change. 

2. Shipments 

The shipments portion of the NIA 

Spreadsheet is a Shipments Model that 

uses historical data as a basis for 

projecting future shipments of the 

equipment that are the subject of this 

rulemaking. In projecting CCW 

shipments, DOE accounted for three 

market segments: (1) New construction; 

(2) existing buildings (i.e., replacing 

failed equipment); and (3) retired units 

not replaced. DOE used the nonreplacement market segment to calibrate 

the Shipments Model to historical 

shipments data. For purposes of 

estimating the impacts of prospective 

standards on equipment shipments (i.e., 

forecasting standards-case shipments) 

DOE considered the combined effects of 

changes in purchase price, annual 

operating cost, and household income 

on the magnitude of shipments. 

Table IV.7 summarizes the approach 

and data DOE used to derive the inputs 

to the shipments analysis for the 

November 2009 SNOPR, and the 

changes it made for today’s final rule. 

The general approach for forecasting 

CCW shipments for today’s final rule 

remains unchanged from the November 

2009 SNOPR. That is, all CCW 

shipments (for both equipment classes) 

were estimated for the new 

construction, replacement, and nonreplacement markets. DOE then 

allocated shipments to each of the two 

equipment classes based on the market 

share of each class. For the November 

2009 SNOPR, DOE estimated that toploading washers comprise 70 percent of 

the market while front-loading washers 


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comprise 30 percent. DOE estimated 

that the equipment class market shares 

would remain unchanged over the time 

period 2005–2043. 

TABLE IV.7—APPROACH AND DATA USED TO DERIVE THE INPUTS TO THE SHIPMENTS ANALYSIS

Inputs 2009 SNOPR description Changes for the 

final rule 

Number of Equipment 

Classes.

Two: top-loading washers and front-loading washers. Shipments forecasts established for all 

CCWs and then disaggregated into the two equipment classes based on the market share 

of top- and front-loading washers. Updated market share data based on SEC 10K report 

of the LVM and tax credits claimed by the LVM for producing high-efficiency CCWs. Market share determined to be 70% top-loading and 30% front-loading. Equipment class market shares held constant over forecast period.

No change. 

New Construction Shipments.Determined by multiplying multi-housing forecasts by forecasted saturation of CCWs for new 

multi-housing. Multi-housing forecasts with AEO 2009 April Release forecasts for the Reference Case. Verified frozen saturations with data from the U.S. Census Bureau’s American Housing Survey (AHS) for 1997–2005.

No change. 

Replacements ............... Determined by tracking total equipment stock by vintage and establishing the failure of the 

stock using retirement functions from the LCC and PBP analysis. Retirement functions revised to be based on Weibull lifetime distributions.

No change. 

Retired Units not Replaced (i.e., non-replacements).Used to calibrate Shipments Model to historical shipments data. Froze the percentage of 

non-replacements at 15 percent for the period 2007ƒ2043 to account for the increased 

saturation rate of in-unit washers in the multi-family stock between 1997 and 2005 timeframe shown by the AHS.

No change. 

Historical Shipments ..... Data sources include AHAM data submittal, Appliance Magazine, and U.S. Bureau of Economic Analysis’ quantity index data for commercial laundry. Relative market shares of the 

two equipment applications, common-area laundry facilities in multi-family housing and 

laundromats, estimated to be over time at 85 and 15 percent, respectively.

Conducted a sensitivity 

analysis based on 

relative market 

shares of 66 percent 

for multi-family housing and a 34-percent 

share for laundromats. 

Purchase Price, Operating Cost, and 

Household Income 

Impacts due to efficiency standards.

Developed the ‘‘relative price’’ elasticity which accounts for the purchase price and the 

present value of operating cost savings divided by household income. Used purchase 

price and efficiency data specific to residential refrigerators, clothes washers, and dishwashers between 1980 and 2002 to determine a ‘‘relative price’’ elasticity of demand, of 

¥0.34.

No change. 

Fuel Switching ............... Not applicable ............................................................................................................................. No change. 

DOE based its Shipments Model for 

CCWs on the following three 

assumptions: (1) All equipment 

shipments for new construction are 

driven by the new multi-family housing 

market, (2) the relative market shares of 

the two equipment applications, 

common-area laundry facilities in multifamily housing and laundromats, are 

constant over time at 85 and 15 percent, 

respectively, and (3) the U.S. Census 

Bureau’s quantity index data can be 

used to validate the shipments trend 

observed in the historical data. 

The Joint Comment stated that DOE’s 

assumed 85 percent to 15 percent split 

between sales for multi-family 

applications and sales for laundromat 

applications is not based on robust or 

current data, and understates the 

energy, water, and dollar savings that 

would be achieved by all of the standard 

levels under consideration. It cited 

information from Alliance’s Form 10–K 

for 2008, which, the Joint Comment 

asserted, suggested that the ratio of 

multi-family to laundromat shipments is 

about 40 percent to 60 percent. It noted 

that because some laundromats 

purchase a limited number of larger 

capacity washers not found in multifamily settings, the commenters believe 

a split of roughly 45 percent for multifamily venues and 55 percent for 

laundromats is reasonable, and should 

be evaluated by DOE for the final rule. 

(Joint Comment, No. 67.6 at p. 3) 

Whirlpool commented that it believes 

the industry mix is not nearly as heavily 

weighted toward the multi-family 

channel as DOE assumed. (Whirlpool, 

No. 67.11 at p. 4). In contrast, Alliance 

stated that it believes that the split of 

the distribution channels of laundromat 

versus multi-family housing commonarea laundry rooms of 15 percent and 85 

percent respectively is generally 

representative of the industry. (Alliance, 

No. 67.8 at p. 2) 

In response, DOE believes that the 

interpretation by the Joint Comment of 

information from Alliance’s Form 10–K 

for 2008 understates the importance of 

equipment other than CCWs. The total 

2008 revenues from Alliance’s sales to 

the commercial laundry industry are 

$338 million, and sales to laundromats 

and multi-family housing amount to 

$240 million. However, based on data 

gathered for its MIA, DOE estimated that 

the total sales of CCWs by Alliance 

amount to only $73 million. Therefore, 

it seems evident that a large fraction of 

the sales to laundromats and multifamily housing are accounted for by 

equipment other than CCWs. This 

unaccounted-for equipment would 

include clothes dryers in addition to 

washer-extractors and tumblers, which 

are large-capacity, higher-performance 

washing machines, and matching largecapacity dryers, respectively. 

Laundromats account for much more of 

the larger equipment than multi-family 

housing, and this type of equipment is 

more expensive than CCWs. Therefore, 

the laundromat share of sales to the 

North American commercial laundry 

industry by Alliance is as high as it is 

primarily due to sales of larger 

equipment. Thus, the revenue share 

between the multi-family and 

laundromat markets is not a good 

indicator of the share of laundromats in 

sales of CCWs. 

The CCW unit shipment shares of 85 

percent for multi-family housing and 15 

percent for laundromats used in the 

SNOPR were based upon the input of 

industry experts consulted in a 

comprehensive study conducted by the 

Consortium for Energy Efficiency in 


rmajette on DSK29S0YB1PROD with RULES2
1144 Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 

29Consortium for Energy Efficiency, Commercial 

Family-Sized Washers: An Initiative Description of 

the Consortium for Energy Efficiency (1998). This 

document is available at: http://www.cee1.org/com/ 

cwsh/cwsh-main.php3. 

1998.29 Although the report was 

conducted over 10 years ago, it was the 

most reliable data source for developing 

a market split for CCW shipments that 

was available. DOE notes that Alliance 

believes that this split is generally 

representative of the industry. However, 

because the assumed shares of 

laundromats and multi-family housing 

in shipments have a significant effect on 

the NIA results, DOE conducted a 

sensitivity analysis in which it used the 

data in Alliance’s 2008 10K report, 

coupled with a number of assumptions 

and input from Whirlpool, to estimate 

the shares of laundromats and multifamily housing in shipments of CCWs in 

2008. The analysis, which is described 

in appendix 11C of the final rule TSD, 

yields an estimate of a 66 percent share 

for multi-family housing and a 34 

percent share for laundromats. Using 

these shares increases national energy 

savings by approximately 9 percent 

(compared to the savings when using 

the 15 percent and 85 percent shares), 

and increases the NPV of consumer 

benefit by approximately 12 percent 

under TSLs 3, 4, and 5. 

a. New Construction Shipments 

To determine new construction 

shipments, DOE used a forecast of new 

housing coupled with equipment 

market saturation data for new housing. 

For new housing completions and 

mobile home placements, DOE adopted 

the projections from EIA’s AEO 2009 

April Release Reference Case through 

2030 for the November 2009 SNOPR 

and today’s final rule. For CCWs, DOE 

relied on new construction market 

saturation data from the abovementioned CEE report. 

b. Replacements and Non-Replacements 

DOE estimated replacements using 

equipment retirement functions 

developed from equipment lifetimes. 

For the November 2009 SNOPR and 

today’s final rule, DOE used retirement 

functions based on Weibull 

distributions. DOE determined that the 

growth of in-unit washer saturations in 

the multi-family stock over the last 10 

years was likely caused by conversions 

of rental property to condominiums, 

resulting in the gradual phase-out or 

non-replacement of failed CCWs in 

common-area laundry facilities. As a 

result, DOE used the average percent of 

non-replacements over the period 

between 1999 and 2005 (18 percent) and 

maintained it over the entire forecast 

period. The effect of maintaining nonreplacements at 18 percent results in 

forecasted CCW shipments staying 

relatively flat during the forecast period. 

c. Impacts of Standards on Shipments 

To estimate the combined effects on 

CCW shipments from increases in 

equipment purchase price and decreases 

in equipment operating costs due to 

amended efficiency standards, DOE 

relied on a literature review and a 

statistical analysis that it has conducted 

on a limited set of appliance price, 

efficiency, and shipments data. DOE 

used purchase price and efficiency data 

specific to residential refrigerators, 

clothes washers, and dishwashers 

between 1980 and 2002 to conduct 

regression analyses. DOE’s analysis 

suggests that the ‘‘relative’’ short-run 

price elasticity of demand, averaged 

over the three appliances, is ¥0.34. 

Because DOE’s forecast of shipments 

and impacts due to standards spans over 

30 years, DOE also considered how the 

relative price elasticity is affected once 

a new standard takes effect. After the 

purchase price change, price elasticity 

becomes more inelastic over the years 

until it reaches a terminal value. DOE 

incorporated a change in relative price 

elasticity change that resulted in a 

terminal value of approximately onethird of the short-run elasticity. In other 

words, DOE determined that consumer 

purchase decisions, in time, become less 

sensitive to the initial change in the 

equipment’s relative price. 

NPCC suggested that it might be 

useful for DOE to compare the relative 

price elasticity approach used for CCWs 

with the shipments model that was used 

in the previous rulemaking for RCWs. 

(NPCC, Public Meeting Transcript, No. 

67.4 at pp. 97–98) The approach that 

was used in the previous rulemaking for 

RCWs modeled consumer purchase 

decisions in terms of probabilities that 

typically depend on the type of stock, 

the age of the clothes washer, the 

incremental cost of the decision, and 

market conditions. The dependence of 

decision probabilities on price and 

market conditions was given by a 

standard econometric logic equation. In 

the present rulemaking for CCWs, DOE 

did not use such an approach, in part 

because it requires detailed information 

on consumer decision making, which is 

not available in the case of CCWs. 

For its November 2009 SNOPR as well 

as today’s final rule, DOE estimated that 

price increases due to standards would 

lead to reductions in unit shipments for 

both top-loading and front-loading 

CCWs. DOE analyzed the impacts of 

increased purchase prices for each 

equipment class independently of the 

other. Because the price impacts for 

more efficient top-loaders are higher 

than those for more efficient frontloaders, DOE estimated that sales would 

decrease more for top-loading CCWs 

than for front-loaders. 

DOE did not explicitly model 

potential switching between top-loaders 

and front-loaders due to lack of 

information on the appropriate crossprice elasticity. Whirlpool commented 

that there are considerable betweenclass switching costs which would act 

against class switching by purchasers of 

commercial clothes washers. 

(Whirlpool, No. 67.11 at p. 2) DOE notes 

the comment by Whirlpool but it 

believes that there is uncertainty 

regarding the extent of switching that 

could result from changes in the price 

differential between top-loaders and 

front-loaders. 

3. Other Inputs 

a. Base-Case Forecasted Efficiencies 

A key input to the calculations of NES 

and NPV are the energy efficiencies that 

DOE forecasts for the base case (without 

new standards). The forecasted 

efficiencies represent the annual 

shipment-weighted energy efficiency 

(SWEF) of the equipment under 

consideration over the forecast period 

(i.e., from the estimated effective date of 

a new standard to 30 years after that 

date). 

For the November 2009 SNOPR, DOE 

first determined the distribution of 

equipment efficiencies currently in the 

marketplace to develop a SWEF for each 

equipment class for 2005. Using the 

SWEF as a starting point, DOE 

developed base-case efficiencies based 

on estimates of future efficiency 

increase. From 2005 to 2013 (2013 being 

the estimated effective date of a new 

standard), DOE estimated that there 

would be no change in the SWEF (i.e., 

no change in the distribution of 

equipment efficiencies). Because there 

are no historical data to indicate how 

equipment efficiencies have changed 

over time, DOE estimated that 

forecasted efficiencies would remain at 

the 2013 level until the end of the 

forecast period. DOE recognizes the 

possibility that equipment efficiencies 

may change over time (e.g., due to 

voluntary efficiency programs such as 

ENERGY STAR). But without historical 

information, DOE had no basis for 

estimating how much the equipment 

efficiencies may change. For today’s 

final rule, DOE maintained its estimate 

that the SWEF would remain constant 

from 2005 through the end of the 

forecast period. 


rmajette on DSK29S0YB1PROD with RULES2
Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 1145 

30The National Academies, Board on Energy and 

Environmental Systems, Letter to Dr. John Mizroch, 

Acting Assistant Secretary, U.S. DOE, Office of 

EERE from James W. Dally, Chair, Committee on 

Point-of-Use and Full-Fuel-Cycle Measurement 

Approaches to Energy Efficiency Standards, May 

15, 2009. 

b. Standards-Case Forecasted 

Efficiencies 

For its determination of each of the 

cases with alternative standard levels 

(‘‘standards cases’’), DOE used a ‘‘rollup’’ scenario in the November 2009 

SNOPR to establish the SWEF for 2013. 

In a roll-up scenario, equipment 

efficiencies in the base case which do 

not meet the standard level under 

consideration are projected to roll-up to 

meet the new standard level. Further, all 

equipment efficiencies in the base case 

that are above the standard level under 

consideration are not affected by the 

standard. The same scenario is used for 

the forecasted standards-case 

efficiencies as for the base-case 

efficiencies, namely, that forecasted 

efficiencies remained at the 2013 

efficiency level until the end of the 

forecast period, as DOE has no data to 

reasonably estimate how such efficiency 

levels might change over the next 30 

years. By maintaining the same rate of 

increase for forecasted efficiencies in 

the standards case as in the base case 

(i.e., no change), DOE retained a 

constant efficiency difference between 

the two cases over the forecast period. 

Although the no-change trends may not 

reflect what would happen to base-case 

and standards-case equipment 

efficiencies in the future, DOE believes 

that maintaining a constant efficiency 

difference between the base case and 

standards case provides a reasonable 

estimate of the impact that standards 

have on equipment efficiency. It is more 

important to accurately estimate the 

efficiency difference between the 

standards case and base case, than to 

accurately estimate the actual 

equipment efficiencies in the standards 

and base cases. DOE retained the 

approach used in the November 2009 

SNOPR for today’s final rule. 

c. Annual Energy Consumption 

The annual energy consumption per 

unit depends directly on equipment 

efficiency. For the November 2009 

SNOPR and today’s final rule, DOE used 

the SWEFs associated with the base case 

and each standards case, in combination 

with the annual energy data, to estimate 

the shipment-weighted average annual 

per-unit energy consumption under the 

base case and standards cases. The 

national energy consumption is the 

product of the annual energy 

consumption per unit and the number 

of units of each vintage, which depends 

on shipments. 

As noted above in section IV.D, DOE 

used a relative price elasticity to 

estimate standards-case shipments for 

CCWs. As a result, shipments forecasted 

under the standards cases are lower 

than under the base case. To avoid the 

inclusion of energy savings from 

reduced shipments, DOE used the 

standards-case shipments projection 

and the standards-case stock to calculate 

the annual energy consumption in the 

base case. For CCWs, any drop in 

shipments caused by standards is 

estimated to result in the purchase of 

used machines. As a result, the 

standards-case forecast explicitly 

accounted for the energy and water 

consumption of new standardcompliant CCWs and also used 

machines coming into the market due to 

the drop in new equipment shipments. 

DOE retained the use of the base-case 

shipments to determine the annual 

energy consumption in the base case 

and the approach used in the November 

2009 SNOPR for today’s final rule. 

d. Site-to-Source Conversion 

To estimate the national energy 

savings expected from appliance 

standards, DOE uses a multiplicative 

factor to convert site energy 

consumption (energy use at the location 

where the appliance is operated) into 

primary or source energy consumption 

(the energy required to deliver the site 

energy). For the November 2009 SNOPR 

and today’s final rule, DOE used annual 

site-to-source conversion factors based 

on the version of NEMS that 

corresponds to the AEO 2009 March 

Release version. These conversion 

factors account for natural gas losses 

from pipeline leakage and natural gas 

used for pumping energy and 

transportation fuel. For electricity, the 

conversion factors vary over time due to 

projected changes in generation sources 

(i.e., the power plant types projected to 

provide electricity to the country). Since 

the AEO does not provide energy 

forecasts that go beyond 2030, DOE used 

conversion factors that remain constant 

at the 2030 values throughout the 

remainder of the forecast. 

In response to a request from the DOE, 

Office of Energy Efficiency and 

Renewable Energy (EERE), the National 

Research Council (NRC) appointed a 

committee on ‘‘Point-of-Use and FullFuel-Cycle Measurement Approaches to 

Energy Efficiency Standards’’ to conduct 

a study called for in section 1802 of 

EPACT 2005.30 The fundamental task 

before the committee was to evaluate 

the methodology used for setting energy 

efficiency standards and to comment on 

whether site (point-of-use) or source 

(full-fuel-cycle) measures of energy 

efficiency better support rulemaking to 

achieve energy conservation goals. The 

NRC committee defined site (point-ofuse) energy consumption as reflecting 

the use of electricity, natural gas, 

propane, and/or fuel oil by an appliance 

at the site where the appliance is 

operated, based on specified test 

procedures. Full-fuel-cycle energy 

consumption was defined as including, 

in addition to site energy use, the energy 

consumed in the extraction, processing, 

and transport of primary fuels such as 

coal, oil, and natural gas; energy losses 

in thermal combustion in powergeneration plants; and energy losses in 

transmission and distribution to homes 

and commercial buildings. 

In evaluating the merits of using 

point-of-use and full-fuel-cycle 

measures, the NRC committee noted 

that DOE uses what the committee 

referred to as ‘‘extended site’’ energy 

consumption to assess the impact of 

energy use on the economy, energy 

security, and environmental quality. 

The extended site measure of energy 

consumption includes the generation, 

transmission, and distribution but, 

unlike the full-fuel-cycle measure, does 

not include the energy consumed in 

extracting, processing, and transporting 

primary fuels. A majority of members on 

the NRC committee believe that 

extended site energy consumption 

understates the total energy consumed 

to make an appliance operational at the 

site. As a result, the NRC committee’s 

primary general recommendation is for 

DOE to consider moving over time to 

use of a full-fuel-cycle measure of 

energy consumption for assessment of 

national and environmental impacts, 

especially levels of greenhouse gas 

emissions, and to providing more 

comprehensive information to the 

public through labels and other means, 

such as an enhanced Web site. For those 

appliances that use multiple fuels (e.g., 

water heaters), the NRC committee 

believes that measuring full-fuel-cycle 

energy consumption would provide a 

more complete picture of energy used, 

allowing comparison across many 

different appliances as well as an 

improved assessment of impacts. The 

NRC committee also acknowledged the 

complexities inherent in developing a 

full-fuel-cycle measure of energy use 

and stated that a majority of the 

committee recommended a gradual 

transition to that expanded measure and 

eventual replacement of the currently 

used extended site measure. To improve 

consumers’ understanding, the 


rmajette on DSK29S0YB1PROD with RULES2
1146 Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 

31An analytical tool equivalent to EIA’s NEMS 

would be needed to properly account for embedded 

energy impacts on a national scale, including the 

embedded energy due to water and wastewater 

savings. This new version of NEMS would need to 

analyze spending and energy use in dozens, if not 

hundreds, of economic sectors. This version of 

NEMS also would need to account for shifts in 

spending in these various sectors to account for the 

marginal embedded energy differences among these 

sectors. 72 FR 64432, 64498–99 (Nov. 15, 2007). 

DOE does not have access to such a tool or other 

means to accurately estimate the source energy 

savings impacts of decreased water or wastewater 

consumption and expenditures. 

committee recommended that DOE and 

the Federal Trade Commission could 

evaluate potential indices of energy use 

and its impacts and could explore 

various options for label design and 

content using established consumer 

research methods. 

DOE acknowledges that its site-tosource conversion factors do not capture 

the energy consumed in extracting, 

processing, and transporting primary 

fuels. DOE also agrees with the NRC 

committee’s conclusion that developing 

site-to-source conversion factors that 

capture the energy associated with the 

extraction, processing, and 

transportation of primary fuels is 

inherently complex and difficult. As a 

result, DOE will evaluate whether 

moving to a full-fuel-cycle measure will 

enhance its ability to set energyefficiency standards. 

DOE also notes that the NRC 

committee’s recommendation to use a 

full-fuel-cycle measure was especially 

focused on appliances using multiple 

fuels. For single-fuel appliances, the 

committee recommended that the 

current practice of basing energy 

efficiency requirements on the site 

measure of energy consumption should 

be retained. Although CCWs utilize 

heated water from both electric and 

natural gas water heaters and are 

credited with improved performance by 

reducing the energy used in electric and 

gas clothes dryers, the energy efficiency 

metric with which they are regulated, 

the MEF, is expressed in terms of 

electrical energy usage (cubic feet per 

kWh). As a result, for labeling and 

enforcement purposes, CCWs are a 

single-fuel appliance. Therefore, 

although a full-fuel-cycle measure may 

provide a better assessment of national 

and environmental impacts, it is not 

necessary for providing energy use 

comparisons among CCW models. 

e. Energy Used in Water and Wastewater 

Treatment and Delivery 

In the October 2008 NOPR and the 

November 2009 SNOPR, DOE did not 

include the energy required for water 

treatment and delivery in its analysis. It 

stated that EPCA defines ‘‘energy use’’ to 

be ‘‘the quantity of energy directly 

consumed by a consumer product at 

point of use, determined in accordance 

with test procedures under section 6293 

of [42 U.S.C.].’’ (42 U.S.C. 6291(4)) 

Based on the definition of ‘‘energy use,’’ 

DOE concluded that it does not have the 

authority to consider embedded energy 

(i.e., the energy required for water 

treatment and delivery) in the analysis. 

It added that, even if DOE had the 

authority, it does not believe adequate 

analytical tools exist to conduct such an 

evaluation.31

In response, the California Utilities 

stated that DOE should account for 

energy savings associated with energy 

embedded in water. (California Utilities, 

No. 67.10 at p. 5) For the reason stated 

above, DOE did not include the energy 

required for water treatment and 

delivery in its analysis of energy savings 

from amended CCW standards. 

EJ commented that two of the 

additional rationales provided by DOE 

for not including the energy required for 

water treatment and delivery in its 

analysis were not convincing. In 

reference to DOE’s statement that 

‘‘Inclusion of the embedded energy 

associated with water and wastewater 

service, would, for completeness, also 

require inclusion of the energy 

associated with all other aspects of the 

installation and operation of the 

equipment, e.g. the manufacture, 

distribution, and installation of the 

equipment;’’ EJ stated that DOE has 

offered no explanation for why 

consideration of the energy embedded 

in the water used in equipment’s 

operation would mandate this much 

wider expansion of the Department’s 

analysis. Regarding DOE’s contention 

that its analysis already reflects the cost 

of the energy embedded in water 

because the cost of the energy used in 

treating and delivering water is a 

component of the cost of water for 

clothes washer consumers, EJ stated that 

the outcome of the life-cycle cost 

analysis is not the only factor DOE must 

consider in determining whether a 

standard level is economically justified, 

and DOE must consider, to the 

maximum extent practicable, ‘‘the total 

projected amount of energy * * * 

savings likely to result directly from the 

imposition of the standard.’’ 42 U.S.C. 

6295(o)(2)(B)(i)(III). (EJ, No. 67.5 at p. 

12) 

In response, DOE notes that neither of 

the additional rationales on which EJ 

commented is central to its conclusion 

that it does not have the authority to 

consider the energy required for water 

treatment and delivery in the analysis. 

In the first instance, DOE was simply 

pointing out that it is difficult to select 

what should be included once one 

deviates from the aforementioned EPCA 

definition of ‘‘energy use.’’ In the second 

instance, DOE was noting that its 

analysis does include some aspects of 

the energy embedded in water delivered 

to CCWs. DOE agrees that the outcome 

of the life-cycle cost analysis is not the 

only factor DOE must consider in 

determining whether a standard level is 

economically justified; however, it 

believes that in considering the energy 

savings likely to result directly from the 

imposition of the standard, the 

appropriate course is to follow the 

EPCA definition of ‘‘energy use.’’ 

f. Total Installed Costs and Operating 

Costs 

The increase in total annual installed 

cost is equal to the difference in the perunit total installed cost between the 

base case and standards case, multiplied 

by the shipments forecasted in the 

standards case. The annual operating 

cost savings per unit includes changes 

in energy, water, repair, and 

maintenance costs. For the November 

2009 SNOPR and today’s final rule, DOE 

forecasted energy prices using data from 

AEO 2009 April Release. For today’s 

final rule, DOE maintained the approach 

it used to develop repair and 

maintenance costs for more efficient 

CCWs in the November 2009 SNOPR. 

Commenting on valuation of energy 

savings, the California Utilities urged 

DOE to assess the energy impacts from 

the proposed standard such that the 

analysis captures the value of energy 

over time. It noted that California has 

developed an energy costing analysis for 

standards, called Time-Dependent 

Valuation of savings (TDV), which 

places a high value on energy savings 

that occur during high-cost times of the 

day and year. It added that water and 

wastewater can also have timedependent values, which should be 

accounted for in DOE’s analysis. 

(California Utilities, No. 67.10 at p. 6) In 

response, DOE acknowledges that the 

approach suggested by the California 

Utilities has merits, but it believes that 

the amount of effort and time required 

to develop time-dependent values of 

energy savings (as well as water and 

wastewater savings) at a diversity of 

locations across the nation would it 

make it impossible to implement this 

approach within the context of the 

present rulemaking. 

g. Discount Rates 

DOE multiplies monetary values in 

future years by the discount factor to 

determine the present value. DOE 

estimated national impacts using both a 


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Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 1147 

32OMB circulars are available online at: http:// 

www.whitehouse.gov/omb/circulars/. 

3-percent and a 7-percent real discount 

rate, in accordance with guidance 

provided by the Office of Management 

and Budget (OMB) to Federal agencies 

on the development of regulatory 

analysis (OMB Circular A–4 (Sept.17, 

2003), section E, ‘‘Identifying and 

Measuring Benefits and Costs’’).32

The California Utilities stated that 

DOE should give primary weight to 

calculations based on the 3-percent 

discount rate for its national impact 

analysis. (California Utilities, No. 67.10 

at p. 6) In response, DOE notes that 

OMB Circular A–4 references an earlier 

Circular A–94, which states that a real 

discount rate of 7 percent should be 

used as a base case for regulatory 

analysis. The 7-percent rate is an 

estimate of the average before-tax rate of 

return to private capital in the U.S. 

economy. It approximates the 

opportunity cost of capital, and, 

according to Circular A–94, it is the 

appropriate discount rate whenever the 

main effect of a regulation is to displace 

or alter the use of capital in the private 

sector. OMB later found that the average 

rate of return to capital remains near the 

7-percent rate estimated in 1992. 

Circular A–4 also states that when 

regulation primarily and directly affects 

private consumption, a lower discount 

rate is appropriate: ‘‘The alternative 

most often used is sometimes called the 

social rate of time preference * * * the 

rate at which ‘‘society’’ discounts future 

consumption flows to their present 

value.’’ It suggests that the real rate of 

return on long-term government debt 

may provide a fair approximation of the 

social rate of time preference, and states 

that over the last 30 years, this rate has 

averaged around 3 percent in real terms 

on a pre-tax basis. Circular A–4 

concludes that ‘‘for regulatory analysis, 

[agencies] should provide estimates of 

net benefits using both 3 percent and 7 

percent.’’ Consistent with OMB’s 

guidance, DOE did not give primary 

weight to results derived using a 3- 

percent discount rate. 

h. Effects of Standards on Energy Prices 

For the October 2008 NOPR, DOE 

conducted an analysis of the impact of 

reduced energy demand associated with 

possible standards on CCWs on prices of 

natural gas and electricity. The analysis 

found that gas and electric demand 

reductions resulting from max-tech 

standards for CCWs would have no 

detectable change on the U.S. average 

wellhead natural gas price or the 

average user price of electricity. 

Therefore, DOE concluded that CCW 

standards will not provide additional 

economic benefits resulting from lower 

energy prices. For today’s final rule, 

DOE has made no change to its 

conclusions about the effects of CCW 

standards on energy prices. 

F. Consumer Subgroup Analysis 

For the November 2009 SNOPR and 

today’s final rule, DOE analyzed the 

potential effects of CCW standards on 

two subgroups: (1) Consumers not 

served by municipal water and sewer 

providers, and (2) small businesses. For 

consumers not served by water and 

sewer, DOE analyzed the potential 

impacts of standards by conducting the 

analysis with well and septic system 

prices, rather than water and wastewater 

prices based on RFC/AWWA data. For 

small businesses, DOE analyzed the 

potential impacts of standards by 

conducting the analysis with different 

discount rates, because small businesses 

do not have the same access to capital 

as larger businesses. DOE estimated that 

for businesses purchasing CCWs, the 

average discount rate for small 

companies is 3.5 percent higher than the 

industry average. Due to the higher costs 

of conducting business, as evidenced by 

their higher discount rates, the benefits 

of CCW standards for small businesses 

will be lower than for the general 

population of CCW owners. 

More details on the consumer 

subgroup analysis can be found in 

chapter 12 of the final rule TSD. 

G. Manufacturer Impact Analysis 

DOE performed an MIA to estimate 

the financial impact of amended energy 

conservation standards on CCW 

manufacturers, and to calculate the 

impact of such standards on domestic 

manufacturing employment and 

capacity. The MIA has both quantitative 

and qualitative aspects. The quantitative 

part of the MIA primarily relies on the 

GRIM—an industry-cash-flow model 

customized for this rulemaking. The 

GRIM inputs are data characterizing the 

industry cost structure, shipments, and 

revenues. The key output is the INPV. 

Different sets of assumptions (scenarios) 

will produce different results. The 

qualitative part of the MIA addresses 

factors such as equipment 

characteristics, characteristics of 

particular firms, and market and 

equipment trends, and it also includes 

an assessment of the impacts of 

standards on subgroups of 

manufacturers. DOE outlined its 

methodology for the MIA in the October 

2008 NOPR. 73 FR 62034, 62075–81 

(Oct. 17, 2008). The complete MIA for 

the October 2008 NOPR is presented in 

chapter 13 of the NOPR TSD. 

For the November 2009 SNOPR, DOE 

updated the MIA results based on 

several changes to other analyses that 

impact the MIA. The total shipments 

and efficiency distributions were 

updated using the new estimates 

outlined in the SNOPR NIA. The 

SNOPR MIA also used the same analysis 

period as in the NIA (2013–2043) and 

updated the base year to 2009. DOE also 

updated the manufacturer production 

costs and the capital and equipment 

conversion costs to 2008$ using the 

producer price index for commercial 

laundry equipment manufacturing 

(NAICS 333312). Additionally, DOE 

updated the GRIM to allow the 

inclusion of Federal production tax 

credits. 74 FR 57738, 57762 (Nov. 9, 

2009). 

For today’s final rule, DOE continued 

to use the GRIM and revised the MIA 

results from the November 2009 

SNOPR. For details of the MIA, see 

chapter 13 of the TSD. The following 

sections describe the revisions made to 

the MIA for today’s final rule. 

For the November 2009 SNOPR, DOE 

used publicly available information, 

recent SEC filings, and the information 

published in chapter 13 and appendix 

13A of the October 2008 NOPR to 

estimate the likely Federal production 

tax credits for which the CCW industry 

would be eligible. 74 FR 57738, 57764 

(Nov. 9, 2009). For today’s final rule, 

DOE used tax and earnings information 

published in SEC filings for the LVM 

and the same methodology described in 

appendix 13C to revise the estimated 

Federal production tax credits for 2009 

and 2010. For details on the Federal 

production tax credits, see appendix 

13C of the TSD. 

For the November 2009 SNOPR, DOE 

received a number of comments from 

interested parties in response to the 

distribution and usage patterns for 

commercial laundry, which affect the 

shipment analysis. In response, DOE 

modeled a sensitivity analysis to 

account for the slightly different 

shipment results. Shipments affect MIA 

results because they directly influence 

the value of the INPV estimated in the 

GRIM. For today’s final rule, the GRIM 

was revised to include an alternative 

shipment scenario based on the 

sensitivity analysis. See appendix 11C 

for details on the sensitivity analysis, 

including the INPV results from the 

analysis. 

DOE received a number of comments 

from interested parties in response to 

the MIA analysis presented in the 

November 2009 SNOPR. At the SNOPR 

public meeting and in its written 

comments, Alliance stated that DOE’s 

belief that all manufacturers can achieve 


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33A notation in the form ‘‘Alliance, No. 66.4 at 

p. 5’’ identifies page 5 of a written comment 

submitted by Alliance entitled ‘‘Response to DOE 

Commercial Clothes Washer SNOPR.’’ This 

document was entered as comment number 66.4 in 

the docket for this rulemaking, along with a letter 

submitted by Alliance entitled ‘‘Is Top-Loading a 

Feature Within the Meaning of EPCA?’’ 

a top-loading standard greater than or 

equal to 1.60 MEF and a water factor 

less than or equal to 8.5 is flawed. 

(Alliance, No. 66.4 at p. 5 33; Alliance, 

Public Meeting Transcript, No. 67.4 at 

pp. 24, 57) SCG also inquired if 

manufacturers can comply with the 

revised standard proposed in the 

November 2009 SNOPR. (SCG, Public 

Meeting Transcript, No. 67.4 at p. 57) 

Alliance stated that while it currently 

markets a top-loading CCW that is close 

to meeting the proposed top-loading 

standard in the November 2009 SNOPR, 

that model was developed to allow 

some customers to earn an ENERGY 

STAR rating and a CEE rebate. Alliance 

stated that this model is not accepted by 

all customers, as some reject the watersaving features required to achieve its 

rated efficiency level. Since all CCWs 

currently marketed at or near the 

proposed top-loading energy 

conservation standard use similar watersaving techniques, Alliance stated that it 

would not be appropriate to set a 

minimum efficiency standard at the 

level proposed in the November 2009 

SNOPR and proposed setting the 

standard at 1.42 MEF/9.5 WF for toploading CCWs instead. (Alliance, Public 

Meeting Transcript, No. 67.4 at p. 139; 

Alliance, No. 66.4 at p. 9) Whirlpool 

and GE stated that they are supportive 

of all standard levels proposed for 

CCWs in the November 2009 SNOPR. 

However, Whirlpool also stated that 

energy and water consumption levels 

more restrictive than 1.60 MEF/8.5 WF 

for top-loading CCWs and 2.20 MEF/5.5 

WF for front-loading CCWs would likely 

lead to poor wash performance, poor 

rinse performance, or both. GE noted 

that its max-tech top-loading CCW 

(which meets the proposed top-loading 

standard) was designed for the onpremise laundry market, a relatively 

small sub-segment of the CCW market 

and said that model has not yet 

demonstrated viability in laundromats. 

(Whirlpool, No. 67.11 at p. 3 and GE, 

No. 67.9 at p. 1) Many of the Multiple 

Route Operators stated opposition to 

any efficiency level above the baseline 

for CCWs on the basis of poor wash 

performance. Additionally, most of the 

Multiple Route Operators stated that 

they had experimented with high 

efficiency top-loading CCWs (i.e., 

agitator-less models) and encountered 

sufficient operational and wash 

performance issues to abandon such 

models and replace them with 

traditional top-loading CCWs. 

Additionally, most of the Multiple 

Route Operators stated that they would 

be reluctant to utilize high efficiency 

top-loading CCWs based on reports of 

consumer dissatisfaction with such 

units. Lastly, the Multiple Route 

Operators strongly oppose the toploading standard level proposed in the 

October 2008 NOPR (i.e., 1.76 MEF/8.3 

WF) (Multiple Route Operators, No. 67.8 

at pp. 1–3). 

DOE proposed a 1.60 MEF/8.5 WF 

standard for top-loading CCWs in the 

November 2009 SNOPR in response to 

these and other concerns voiced by 

interested parties. For the November 

2009 SNOPR, DOE stated it believed the 

proposed top-loading level could be met 

by all competitors because the unit 

would be based on a standard toploading platform that uses a traditional 

agitator and no proprietary technology. 

74 FR 57738, 57762–63 (Nov. 9, 2009). 

The model that the LVM references in 

its comment meets a 1.55 MEF/8.6 WF, 

and DOE research suggests that this 

model could be modified to meet the 

amended energy conversation standard. 

DOE notes that the LVM has not refuted 

that this model could be modified to 

meet the amended energy conservation 

standard, and while a manufacturer may 

develop higher efficiency models in 

order to qualify for energy star, tax 

credits, and similar rebates, DOE 

believes it is unlikely that a 

manufacturer would purposely risk its 

reputation and release a non-functional 

product onto the market. DOE has noted 

throughout the rulemaking that the 

heavy concentration of earnings from 

CCWs relative to its total clothes washer 

business, its overall focus on 

commercial laundry, and its relatively 

low revenue base compared to its 

principal CCW competitors would lead 

to the LVM being impacted 

disproportionately by any amended 

efficiency standard for CCWs. DOE also 

notes that TSL 3 avoids requiring 

manufacturers, including the LVM, to 

make concurrent, substantial 

investments in both top-loading and 

front-loading platforms. DOE continues 

to believe that the benefits of the 

amended energy conservation standard 

outweigh the burdens, including the 

negative impacts on manufacturers (see 

section VI.D). 

Alliance stated that its most recent 

SEC 10–Q for the quarter ending 

September 30, 2009, shows that its longterm debt bank covenants limit 

additional borrowing to $19.2 million, 

that its current credit facility must be 

refinanced before January 27, 2011, and 

that it expects tighter credit terms. 

Alliance estimates that an $18.4 million 

investment would be required to modify 

its facilities to manufacture top-loading 

CCWs at the max-tech efficiency level, 

double the total annual capital 

expenditures for the entire company. 

Alliance stated that, even if the funds 

were available for a dramatic redesign of 

its top-loading CCWs, it would not be 

approved for funding by its investors 

regardless of the method used to 

calculate the financial payback because 

the equipment does not meet customers’ 

minimum requirements. (Alliance, No. 

66.4 at p. 5; Alliance, Public Meeting 

Transcript, No. 67.4 at pp. 24–25) 

Alliance also stated that it would need 

to redesign the inner and outer tubs to 

match the max-tech top-loading CCW’s 

larger capacity. These changes might not 

be possible to its existing tub fabrication 

cells while simultaneously meeting 

demand, and could require a new 

building due to lack of space to ‘‘shoehorn’’ fabrication and to avoid shutting 

down. Alliance stated that its customers 

do not want larger capacity washers 

because its tub size has been designed 

to match commercial laundry users’ 

needs and load sizes, as evidenced by 

decades of sales and customer 

experience. (Alliance, No. 67.8 at p. 4) 

DOE estimates that the total 

conversion costs for the industry to 

meet the top-loading amended energy 

conservation standard will be 

approximately $16.6 million. DOE 

research thus suggests that the LVM’s 

production facilities could be modified 

at a more modest cost than projected by 

the LVM to make a sufficient number of 

top-loading CCWs that would meet the 

amended energy conservation 

standards. DOE estimates that the 

majority of the conversion costs will 

consist of product development, 

engineering, testing, marketing, and 

other costs required to make equipment 

designs comply with energy 

conservation standards while 

addressing consumer acceptance issues 

raised by the LVM. As of December 31, 

2008, Alliance stated in its SEC filings 

that its principal line of credit was 

limited to an additional $16.2 million of 

borrowing and that a substantial portion 

of its long term debt is due concurrently 

with the compliance date of the final 

rule. DOE agrees with the LVM that the 

company’s current debt structure makes 

it more difficult to finance additional 

product development and capital 

expense. In response to these and other 

concerns voiced by the LVM, DOE 

revised the proposed top-loading CCW 

energy conservation standard to a level 

which a current top-loading LVM model 


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almost attains. Thus, the negative 

impacts on the LVM have been weighed 

in DOE’s consideration of the amended 

energy conservation standard. 

Alliance stated that the standards 

proposed in the November 2009 SNOPR 

place 292 union laborers in its Ripon, 

WI plant at risk of losing their jobs. Of 

these 292 laborers, 150 union laborers 

are attributed to CCW production and 

142 laborers are associated with 

companion commercial clothes dryers. 

The standards proposed in the 

November 2009 SNOPR could also 

eliminate an additional 40 nonproduction jobs. (Alliance, Public 

Meeting Transcript, No. 67.4 at p. 25; 

Alliance, No. 66.4 at p. 8) 

For the October 2008 NOPR, DOE 

calculated the direct employment 

impacts using the GRIM and 

information gathered from interviews 

with manufacturers. DOE estimated that 

there would be positive employment 

impacts among domestic CCW 

manufacturers for TSL 1 through TSL 5. 

Because the LVM had previously stated 

it could be eliminated from the 

commercial market, DOE also 

specifically investigated the LVM 

employment using its CCW revenues 

and additional employment estimates. 

DOE estimated that if the LVM ceased 

to produce soft-mount dryers and CCWs 

that this would lead to a loss of 292 

production jobs. DOE estimated that a 

complete closure of the Ripon, WI 

facility would result in the dismissal of 

approximately 600 factory employees. 

73 FR 60234, 62102–03 (Oct. 17, 2008). 

For the November 2009 SNOPR, DOE 

stated that it believes that the proposed 

energy conservation standard would 

allow the LVM to continue to produce 

top-loading CCWs, mitigating any 

potential closure of its domestic 

manufacturing facility. 74 FR 57738, 

57763 (Nov. 9, 2009). DOE did not 

receive any additional comments that 

suggest technical barriers would prevent 

manufacturers from meeting the energy 

conservation standards and notes that 

two competitors support the proposed 

amended energy conservation standards 

for top-loading CCWs. Thus, for today’s 

final rule, DOE estimates that the LVM 

would be able to continue to produce 

top-loading CCWs, and that significant 

impacts on LVM manufacturing 

employment due to today’s final rule are 

hence unlikely. Further discussion of 

the LVM and the potential impacts on 

direct employment for the CCW 

industry is presented in chapter 13 of 

the TSD. 

ASAP stated that much of the SNOPR 

analysis was driven by DOE’s concern 

for the precarious position of the LVM. 

ASAP stated that it remains somewhat 

unconvinced that the numbers are as 

stark as presented in the revised MIA. 

(ASAP, Public Meeting Transcript, No. 

67.4 at p. 33) ASAP and the Joint 

Comment questioned DOE’s estimates of 

the potential impacts on the LVM if the 

market were to shift entirely to frontloading CCWs. ASAP and the Joint 

Comment stated that the green-field 

assumption in this analysis was not 

valid, especially considering that the 

LVM is already making a substantial 

number of front-loading washers, and 

since new buildings are costly and 

depreciate over a much longer schedule 

than new equipment. The Joint 

Comment argues that these assumptions 

disproportionately increase the 

annualized financial cost of conversion. 

(ASAP, Public Meeting Transcript, No. 

67.4 at pp. 140–142; Joint Comment, No. 

67.6 at pp. 5–6) ASAP also inquired if 

a shift to only front-loading production 

would involve a green-field 

manufacturing facility even if toploading production is ceasing. (ASAP, 

Public Meeting Transcript, No. 67.4 at p. 

143) ASAP and the Joint Comment 

stated that a shift to only front-loading 

washer production would not force the 

LVM to completely redesign washers 

nor incur expenses such as research and 

development. Both ASAP and the Joint 

Comment argue that, because frontloading washers currently represent 25 

to 30 percent of the LVM’s unit 

shipments, the LVM will have the 

operating experience to gradually 

reduce production costs and improve 

production designs without a complete 

redesign. (ASAP, Public Meeting 

Transcript, No. 67.4 at p. 146; Joint 

Comment, No. 67.6 at p. 5) 

DOE research confirms that the LVM 

has been gradually increasing its 

production of front-loading CCWs. 

However, the LVM’s production of toploading CCWs still heavily outweighs its 

production of front-loading CCWs. DOE 

believes a complete shift to frontloading CCWs would represent a radical 

departure from the much more gradual 

market transition that has been 

occurring. As illustrated in chapter 13 of 

the TSD, such a market disruption 

would disproportionately impact the 

LVM since the LVM would have to 

increase front-loader manufacturing 

capacity by multiples, while its 

competitors would have to increase 

their overall front-loader manufacturing 

capacity by less than 5 percent to fully 

transition their CCW production to only 

front-loading washers. Since top-loaders 

and front-loaders share few parts and 

require separate assembly lines, subassembly stations, etc., DOE concluded 

that the LVM would have to build an 

annex to house the expanded frontloader fabrication and assembly lines as 

long as top-loading clothes washer 

production continues. For example, the 

LVM could continue to manufacture 

top-loading RCWs even after ceasing 

top-loading CCW production. While 

some equipment and space could 

potentially be re-purposed towards 

fabricating front-loader components 

(i.e., large presses, machining centers, 

etc.), DOE research suggests that much 

of the space currently occupied by hardtooled top-loading clothes washer 

assembly lines in the LVM facility will 

remain unavailable until the LVM 

ceases to produce top-loading clothes 

washers altogether. DOE expects the 

LVM to continue to produce top-loading 

clothes washers as long as it can to 

fulfill customer demand. Consequently, 

the space currently occupied by the toploading clothes washer lines will likely 

continue to be occupied on the 

compliance date of today’s final rule, 

necessitating an annex in which to 

house expanded front-loader assembly 

and fabrication. Alliance agreed that its 

existing facility could not accommodate 

the new equipment for front-loading 

production and continue to produce its 

current volumes of top-loading washers. 

(Alliance, Public Meeting Transcript, 

No. 67.4 at pp. 145–146) As illustrated 

in chapter 13 of the TSD, a complete 

transition to front-loading CCWs would 

likely lead to a market disruption since 

switching costs for customers would be 

minimized. Consequently, DOE research 

suggests that the LVM would be 

required to redesign its front-loader 

platform to become more costcompetitive. 

In appendix 13C of the SNOPR TSD, 

DOE estimated that the LVM would be 

eligible for about $4.1 million in Federal 

production tax credits between 2007 

and 2010. ASAP and the Joint Comment 

questioned DOE’s conclusion that 

additional tax credits in 2010 are 

unlikely. The Joint Comment estimated 

that additional credits in 2010 are likely 

as production of front-loaders ramps up 

further (ASAP, Public Meeting 

Transcript, No. 67.4 at pp. 126–129; 

Joint Comment, No. 67.6, at p. 6) ASAP 

questioned if DOE believed that the 

LVM was reaching a limit on the 

number of front-loading washers that it 

could sell or produce. (ASAP, Public 

Meeting Transcript, No. 67.4 at pp. 126– 

129) ASAP also asked if there was an 

analysis to support the estimate of the 

cap on machines that would qualify for 

the Federal production tax credit, and if 

such tax credits for 2007 were included 

in the analysis. (ASAP, Public Meeting 

Transcript, No. 67.4 at p. 129, 135) 


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34See http://www.comlaundry.com/investors/ 

relations/sec-filings.asp for a list of Alliance 

Laundry System’s SEC filings. 

Finally, the Joint Comment stated that, 

even though DOE’s analysis of the 

Federal production tax credits has 

relatively little impact on the industry 

as a whole, the Federal production tax 

credits will mitigate a significant 

portion of the conversion costs borne by 

the LVM to convert their entire 

production to front-loading washers. 

(Joint Comment, No. 67.6 at p. 6). 

Alliance stated, while it has earned tax 

credits for qualifying washers, these tax 

credits have not been used for a cash 

benefit. (Alliance, No. 67.8 at p. 4) 

For the November 2009 SNOPR, DOE 

accounted for the impacts of the Federal 

production tax credits updated by The 

Energy Improvement and Extension Act 

of 2008 (Pub. L. 110–343; EIEA 2008). 

Because only the LVM produces 

qualifying CCWs, DOE based its 

estimates of the potential benefits to the 

CCW industry by estimating the 

potential Federal production tax credits 

that the LVM could receive. Using 

publicly available information, recent 

SEC filings, and the information 

published in chapter 13 and appendix 

13A of the October 2008 NOPR, DOE 

estimated the LVM’s front-loading CCW 

shipment projections to 2010 and 

calculated the Federal production tax 

credits for qualifying shipments. In the 

November 2009 SNOPR, DOE estimated 

that the LVM would likely not qualify 

for any Federal production tax credits in 

2010. 74 FR 57738, 57763–64 (Nov. 9, 

2009) DOE’s estimate was not based on 

a cap on the number of qualifying 

washers the LVM could sell or produce; 

rather, it was based on statements in the 

LVM’s 10–Q filing for the quarter 

ending March 31, 2009. The 10–Q at 

that time suggested that the LVM’s 

front-loading production in 2010 would 

not increase significantly to qualify for 

additional Federal production tax 

credits. 

For today’s final rule, DOE updated 

its estimates using the most recent, 

publicly available information to 

calculate the likely benefit to the LVM 

from the tax credit provisions. DOE 

updated the assumptions for the 

estimated Federal production tax credit 

for 2009 and 2010 based on the LVM’s 

recent SEC filings. The LVM’s 10–Q 

filing for the quarter ending September 

30, 2009, reported higher tax benefits 

from the energy efficiency tax program 

compared to the 10–Q filing for the 

quarter ending March 31, 2009. DOE 

revised its figures for 2009 based on this 

new information and used the LVM’s 

most recent historical estimate for the 

growth rate of the commercial laundry 

industry to estimate LVM shipments for 

2010.34 The revised estimates suggest 

that the LVM will collect approximately 

$4.0 million in Federal production tax 

credits from 2008–2010 from the 

provisions updated by EIEA 2008 and a 

total of $5.3 million from the program 

from 2007–2010. The revised estimate 

for today’s final rule is approximately 

$1.2 million higher than the estimate 

published in the November 2009 

SNOPR. 

In the GRIM, DOE accounts for the 

Federal production tax credit as a direct 

cash benefit in the base and standards 

cases that directly increases INPV. 

Because 2009 is the base year to which 

industry cash flows are discounted, any 

Federal production tax credit from 2007 

and 2008 is not counted towards the 

INPV analysis because it falls outside 

the analysis period. However, any tax 

benefit in 2009 and 2010 falls within the 

analysis period and hence increases 

industry value (potentially decreasing 

the impacts on manufacturers due to 

energy conservation standards). DOE’s 

revised Federal production tax credit 

estimates for the LVM are 

approximately $1.2 million and $0.4 

million for 2009 and 2010, respectively. 

These revised figures do not 

significantly impact the INPV calculated 

by DOE nor do they come close to 

paying for a facility conversion to frontload only CCW production. DOE 

estimates that a wholesale conversion to 

only front-loading CCW production 

would cost the LVM approximately 12 

times the total Federal production tax 

credit benefit DOE expects the LVM to 

collect over the life of the program. (See 

chapter 13 of the TSD for further 

details.) While DOE research suggests 

that Federal production tax credits 

could help the LVM implement gradual 

changes to its production facilities, such 

tax credits would not substantially 

defray wholesale plant conversion costs. 

Whirlpool commented that the ability 

of a manufacturer to use an earned tax 

credit is a function of the earnings 

situation for that manufacturer and that 

many manufacturers cannot use earned 

tax credits in some years due to current 

economic conditions. (Whirlpool, No. 

67.11 at p. 3) Because the LVM reported 

earnings from the tax credit and stated 

that it expected to earn a benefit from 

the tax credits in 2009, DOE calculated 

the expected tax credits for the LVM in 

2009 and 2010 and assumed that the 

LVM would benefit in those years. 

Whirlpool agreed with DOE’s 

conclusion that the past tax credits have 

only offset a small fraction of the costs 

necessary to produce high efficiency 

equipment. Whirlpool also stated that if 

tax credits were offered in between the 

issuance of the final rule and the 

compliance date, they could have an 

impact on the ability of individual 

manufacturers to make the capital 

investment in new product platforms. 

(Whirlpool, No. 67.11 at p. 3) 

DOE agrees that tax credits that were 

effective between the issuance of the 

final rule and the compliance date of the 

amended standards could have an 

impact on the ability of manufacturers 

to fund capital investments. However, 

because most of the benefit from the 

EIEA 2008 takes place outside of the 

analysis period, DOE believes it is 

unlikely that manufacturers could use 

the credits to fund much of their capital 

conversion costs. 

EJ recommended that DOE review its 

Federal production tax credit 

projections for 2010 if it adopts a strong 

standard that applies to all CCWs. EJ 

added that such a standard would likely 

cause manufacturers to ramp up 

production of qualifying washers over 

time, not just beginning in 2013. (EJ, 

Public Meeting Transcript, No. 67.4 at 

pp. 137–138) 

For today’s final rule, DOE revised its 

Federal production tax credit 

projections for 2010 using the LVM’s 

most recent SEC filings. Based on the 

LVM’s 10–Q for the quarter ending 

September 30, 2009, DOE revised its 

estimates to include Federal production 

tax credits for 2010. DOE continues to 

believe that it is unlikely that 

manufacturers would shift their clothes 

washer production to exclusively 

manufacture front-loading washers in 

response to the Federal production tax 

credits or the energy conservation 

standards in today’s final rule. Thus, 

DOE relied on the forward-looking 

projections published by the LVM to 

estimate CCW sales that qualify for the 

production tax credits. 

Alliance and White & Case (W&C) 

cited DOJ’s letter in response to the 

October 2008 NOPR that stated there 

appeared to be a real risk that at least 

one manufacturer could not meet the 

proposed amended energy conservation 

standard for top-loading CCWs. Both 

Alliance and W&C stated that DOE’s 

response in the November 2009 SNOPR 

ignored DOJ’s conclusion that DOE 

should consider keeping the existing 

standard in place for top-loading CCWs 

to maintain competition. (Alliance, No. 

66.4 at p. 3; W&C, Public Meeting 

Transcript, No. 67.4 at pp. 26–27) 

Alliance stated that DOJ’s 

recommendation to keep the existing 

standard in place for top-loading CCWs 

was the appropriate course of action for 


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this rulemaking. (Alliance, No. 66.4 at p. 

9; Alliance, Public Meeting Transcript, 

No. 67.4 at pp. 29–30) In addition, 

Multiple Route Operators stated they 

were concerned that the standards 

proposed in the October 2008 NOPR 

could force Alliance to exit the 

manufacture of top-loading CCWs, 

which would cause them significant 

harm because they would pay more for 

washers. Multiple Route Operators 

urged DOE to adopt a standard that 

would enable Alliance to remain the 

lowest-cost CCW provider. (Multiple 

Route Operators, No. 67.8 at pp. 1–3) 

In the October 2008 NOPR, DOE 

proposed amended standards of 1.76 

MEF/8.3 WF for top-loading CCWs. 73 

FR 62034, 62036 (Oct. 17, 2008). In 

response, DOJ found that there was a 

real risk that one or more CCW 

manufacturers could not meet the 

proposed standard for top-loading 

CCWs. DOJ stated that it was concerned 

that meeting the proposed standards 

could require substantial investment in 

the development of new technology that 

some suppliers of top-loading CCWs 

might not find economically justifiable. 

74 FR 57738, 57802 (Nov. 9, 2009). In 

response to the concerns raised by DOJ 

and other concerns raised by interested 

parties, DOE proposed a top-loading 

CCW standard of 1.60 MEF/8.5 WF in 

the November 2009 SNOPR. 74 FR 

57738, 57763 (Nov. 9, 2009). In today’s 

final rule, DOE determined that 1.60 

MEF/8.5 WF is the maximum toploading CCW efficiency level that is 

economically justified and 

technologically feasible while being 

sensitive to concerns raised by DOJ and 

the LVM. 

EJ stated that DOE failed to consider 

the low barriers to entry in the CCW 

market in its analysis of the competition 

issue. While there are currently only 

three CCW manufacturers, if the 

departure of any of these manufacturers 

increases markups significantly, higher 

profits would allow RCW manufacturers 

or small players to expand into the 

commercial market. EJ asserted that, 

because these manufacturers would not 

have to design completely new 

equipment or construct a new 

manufacturing facility to begin selling 

CCWs, it would be ‘‘irrational’’ for DOE 

to contend that there would be any 

significant adverse impact on 

competition in the commercial market. 

EJ stated that DOE must explain why 

new entrants would be unable to gain a 

foothold in the CCW market by taking 

advantage of this disturbance in the 

status quo if one manufacturer exited 

the market. (EJ, No. 67.5 at. pp. 8–9; 

Public Meeting Transcript, No. 67.4 at p. 

138) Multiple Route Operators believe 

they would face higher prices if 

Alliance were eliminated from the 

market. (Multiple Route Operators, No. 

67.8 at pp. 1–3) 

In response to the October 2008 

NOPR, DOJ found that there was a real 

risk that one or more of the 

manufacturers could not meet the 

proposed standard for top-loading 

CCWs. 74 FR 57738, 57802 (Nov. 9, 

2009) DOE revised its proposed 

standards in part to ease these 

competitive concerns raised by the DOJ 

and other interested parties. 74 FR 

57738, 57763 (Nov. 9, 2009). 

In chapter 13 of the TSD, DOE offers 

multiple reasons why it believes the 

LVM has succeeded in the CCW market 

despite low overall production volumes: 

(1) Well-depreciated machinery and 

legacy design; (2) effective customer and 

service networks; (3) a large installed 

base of top-loading CCWs; and (4) stock 

of repair parts that ensures a large 

market for replacement machines. 

Multiple Route Operators confirmed 

many of these advantages, stating that 

they believe Alliance offers CCWs with 

the lowest total cost of ownership 

because its washers have the longest 

functional life. In addition, Multiple 

Route Operators stated that the quality, 

service, and unique products with CCW 

features separate Alliance from other 

manufacturers. (Multiple Route 

Operators, No. 67.8 at pp. 1–3) DOE 

believes that route operators’ and 

distributors’ large inventory of service 

parts and repair knowledge represent a 

significant switching cost, discouraging 

customers from adopting rival 

platforms. As long as the LVM can 

continue to produce replacement toploading CCWs, DOE does not believe the 

LVM will be placed at a substantial 

disadvantage relative to its larger 

competitors. However, due to the 

relatively small stock of front-loading 

clothes washers installed in the CCW 

market, DOE believes that a wholesale 

conversion of the CCW market to frontloading machines would eliminate most 

of the LVM’s advantages that have 

allowed it to remain competitive. 

DOE research suggests that, while the 

cost of entering the CCW market may be 

construed as low, statements by 

multiple manufacturers indicate that 

actual success in the CCW market 

depends on many factors. For example, 

DOE notes that a top-loading, 

horizontal-axis clothes washer used to 

be marketed into the CCW market but 

that it was withdrawn for a number of 

reasons. Additionally, converting 

residential platforms for commercial use 

is not as simple as adding a coin box; 

substantial investments are required to 

integrate a variety of payment systems. 

Custom user interfaces are required, 

both for compliance with the Americans 

with Disabilities Act, and to facilitate 

consumer education. Resultant 

conversion costs have to be amortized 

across a much lower production volume 

than is typically found in the residential 

market, and critical parts and service 

personnel have to be present in the 

territory of any route operator that is 

going to consider a rival. Hence, while 

entering the CCW market may not 

represent significant technical hurdles, 

the operational and financial challenges 

are sufficient to limit the market to a 

small number of competitors. 

DOE also received comment regarding 

its characterization of Alliance as an 

LVM. The Joint Comment argued that 

DOE’s characterization of Alliance as an 

LVM is a significant misnomer, as the 

LVM reported revenues equivalent to 

approximately half of the total CCW 

industry revenue and claims to be the 

leading manufacturer of stand-alone 

commercial laundry equipment in North 

America. (Joint Comment, No. 67.6 at p. 

5) 

For the October 2008 NOPR, DOE 

presented a separate analysis of the 

LVM. 73 FR 62034, 62103–04 (Oct. 17, 

2008). Although DOE continues to agree 

with the Joint Comment that the LVM 

has a significant share of the CCW 

industry based on reported revenues, 

DOE maintains that the LVM does not 

have the same overall clothes washer 

manufacturing scale as its competitors 

(for both residential products and 

commercial equipment) and should 

hence be characterized as an LVM in the 

context of this rulemaking. DOE notes 

that most CCWs on the market in the 

United States are based largely on RCW 

platforms that are upgraded selectively. 

Some investments (such as the 

controllers) are CCW-specific but only 

comprise part of the total unit cost. The 

majority of capital expenditures related 

to tooling, equipment, and other 

machinery in a plant can typically be 

applied to the residential as well as the 

commercial market. Thus, overall (both 

RCW and CCW) manufacturing scale has 

a significant impact on the costeffectiveness of potential platform 

upgrades. A manufacturer with a highvolume residential line can cost justify 

much more capital-intensive solutions if 

they are applicable in both markets, 

whereas an LVM could lack the scale 

and capital to make such investments. 

Thus, an LVM may be required to 

purchase upgrade options from thirdparty vendors instead of developing inhouse solutions that reduce costs at 

higher volumes. In the CCW market, the 

most direct competitor to the LVM has 

over 60 times the overall shipment 


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1152 Federal Register / Vol. 75, No. 5 / Friday, January 8, 2010 / Rules and Regulations 

35More information regarding ImSET is available 

online at: http://www.pnl.gov/main/publications/ 

external/technical_reports/PNNL-15273.pdf 

volumes of the LVM. This scale 

difference also affects purchasing power 

because a large, diversified appliance 

manufacturer can use its production 

scale to achieve better prices for raw 

materials and commonly purchased 

components such as controllers, motors, 

belts, switches, sensors, and wiring 

harnesses. Even if a large company 

purchases fewer items of a certain 

component, its overall revenue 

relationship with a supplier may still 

enable it to achieve better pricing than 

a smaller competitor, even if that 

competitor buys certain components in 

higher quantities. Lastly, high-volume 

manufacturers benefit from being able to 

source their components through 

sophisticated supply chains on a 

worldwide basis. Therefore, DOE 

concludes that an LVM is unlikely to be 

able to compete solely on manufacturing 

cost. 

H. Employment Impact Analysis 

DOE considers employment impacts 

in the domestic economy as one factor 

in selecting a proposed standard. 

Employment impacts include direct and 

indirect impacts. Direct employment 

impacts are changes in the number of 

employees for manufacturers of 

equipment subject to standards, their 

suppliers, and related service firms. The 

MIA addresses these impacts. 

Indirect employment impacts from 

standards consist of the net jobs created 

or eliminated in the national economy, 

other than in the manufacturing sector 

being regulated, due to: (1) Reduced 

spending by end users on energy 

(electricity, gas (including liquefied 

petroleum gas), and oil); (2) reduced 

spending on new energy supply by the 

utility industry; (3) increased spending 

on the purchase price of new 

equipment; and (4) the effects of those 

three factors throughout the economy. 

DOE expects the net monetary savings 

from standards to be redirected to other 

forms of economic activity. DOE also 

expects these shifts in spending and 

economic activity to affect the demand 

for labor in the short term, as explained 

below. 

One method for assessing the possible 

effects on the demand for labor of such 

shifts in economic activity is to compare 

sectoral employment statistics 

developed by the BLS. The BLS 

regularly publishes its estimates of the 

number of jobs per million dollars of 

economic activity in different sectors of 

the economy, as well as the jobs created 

elsewhere in the economy by this same 

economic activity. Data from BLS 

indicate that expenditures in the utility 

sector generally create fewer jobs (both 

directly and indirectly) than 

expenditures in other sectors of the 

economy. There are many reasons for 

these differences, including wage 

differences and the fact that the utility 

sector is more capital intensive and less 

labor intensive than other sectors. (See 

Bureau of Economic Analysis, Regional 

Multipliers: A User Handbook for the 

Regional Input-Output Modeling System 

(RIMS II), Washington, DC, U.S. 

Department of Commerce, 1992.) 

Efficiency standards have the effect of 

reducing consumer utility bills. Because 

reduced consumer expenditures for 

energy likely lead to increased 

expenditures in other sectors of the 

economy, the general effect of efficiency 

standards is to shift economic activity 

from a less labor-intensive sector (i.e., 

the utility sector) to more laborintensive sectors (e.g., the retail and 

manufacturing sectors). Thus, based on 

the BLS data alone, DOE believes net 

national employment will increase due 

to shifts in economic activity resulting 

from standards for CCWs. 

In developing the November 2009 

SNOPR, DOE estimated indirect 

national employment impacts using an 

input/output model of the U.S. economy 

called Impact of Sector Energy 

Technologies (ImSET).35 ImSET is a 

special-purpose version of the ‘‘U.S. 

Benchmark National Input-Output’’ (I– 

O) model designed to estimate the 

national employment and income 

effects of energy-saving technologies. 

The ImSET software includes a 

computer-based I–O model with 

structural coefficients to characterize 

economic flows among 188 sectors most 

relevant to industrial, commercial, and 

residential building energy use. The 

Joint Comment stated that DOE must 

consider its projections that an increase 

in employment will result from the 

adoption of standards in weighing the 

economic costs and benefits of strong 

efficiency standards. (Joint Comment, 

No. 44 at p. 13) As described in section 

VI.C.3 below, DOE takes into 

consideration the indirect employment 

impacts estimated using ImSET when 

evaluating alternative standard levels. 

Direct employment impacts on the 

manufacturers that produce CCWs are 

analyzed in the MIA, as discussed in 

section IV.G. For today’s final rule, DOE 

has made no change to its method for 

estimating employment impacts. For 

further details, see chapter 15 of the 

final rule TSD. 

I. Utility Impact Analysis 

The utility impact analysis estimates 

the change in the forecasted power 

generation capacity for the Nation that 

would be expected to result from 

adoption of new standards. For the 

November 2009 SNOPR and today’s 

final rule, DOE calculated this change 

using the NEMS–BT computer model. 

NEMS–BT models certain policy 

scenarios such as the effect of reduced 

energy consumption by fuel type. The 

analysis output provides a forecast for 

the needed generation capacities at each 

TSL. The estimated net benefit of the 

standard in today’s final rule is the 

difference between the forecasted 

generation capacities by NEMS–BT and 

the AEO 2009 April Release Reference 

Case. DOE obtained the energy savings 

inputs associated with efficiency 

improvement on CCW energy 

consumption electricity and natural gas 

from the NIA. These inputs reflect the 

effects of both fuel (natural gas) and 

electricity consumption savings. 

Chapter 14 of the final rule TSD 

presents results of the utility impact 

analysis. 

In its November 2009 SNOPR, DOE 

did not estimate impacts on water and 

wastewater utilities because the water 

and wastewater utility sector exhibits a 

high degree of geographic variability 

produced by a large diversity of water 

resource availability, institutional 

history, and regulatory context. 73 FR 

62034, 62082 (Oct. 17, 2008). EJ 

commented that given the water supply 

and water and wastewater infrastructure 

concerns that are affecting and will 

continue to affect many parts of the 

country, it would be arbitrary and 

capricious for the Department to fail to 

address the impact on water and 

wastewater utilities of reduced water 

consumption resulting from commercial 

clothes washer standards. (EJ, No. 67.5 

at p. 13) 

In response, DOE refers again to the 

diversity of the water and wastewater 

utility sector. Whereas in the case of the 

electric utility sector DOE has a tool and 

data set that allows estimation of 

impacts on infrastructure (in terms of 

installed generation capacity), DOE does 

not have (and is not aware of) a 

comparable tool and data set that would 

allow estimation of impacts on 

infrastructure in the water and 

wastewater utility sector resulting from 

commercial clothes washer standards. 

Therefore, for today’s final rule, DOE 

did not estimate impacts to the water 

and wastewater utility sector. 


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J. Environmental Assessment 

Pursuant to the National 

Environmental Policy Act of 1969 

(NEPA) (42 U.S.C. 4321 et seq.) 42 

U.S.C. 6295(o)(2)(B)(i)(VI), DOE 

prepared a draft environmental 

assessment (EA) of the potential impacts 

of the standards for CCWs in today’s 

final rule, which it has included as 

chapter 16 of the TSD. DOE found that 

the environmental effects associated 

with the standards for CCWs were not 

significant. Therefore, DOE is issuing a 

Finding of No Significant Impact 

(FONSI), pursuant to NEPA, the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and DOE’s regulations for 

compliance with NEPA (10 CFR part 

1021). The FONSI is available in the 

docket for this rulemaking. 

In the EA, DOE estimated the 

reduction in power sector emissions of 

CO2, NOX, and Hg using the NEMS–BT 

computer model. Because the on-site 

operation of CCWs requires use of fossil 

fuels and results in emissions of CO2

and NOX, DOE also accounted for the 

reduction in these emissions due to the 

standards. 

In the EA, NEMS–BT is run similarly 

to the AEO NEMS, except that CCW 

energy use is reduced by the amount of 

energy saved (by fuel type) due to the 

TSLs. The inputs of national energy 

savings come from the NIA analysis; the 

output is the forecasted physical 

emissions. The estimated net benefit of 

the standard in today’s final rule is the 

difference between the forecasted 

emissions by NEMS–BT at each TSL 

and the AEO 2009 April Release 

Reference Case. NEMS–BT tracks CO2

emissions using a detailed module that 

provides results with broad coverage of 

all sectors and inclusion of interactive 

effects. 

DOE has determined that sulfur 

dioxide (SO2) emissions from affected 

Electric Generating Units (EGUs) are 

subject to nationwide and regional 

emissions cap and trading programs that 

create uncertainty about the impact of 

energy conservation standards on SO2

emissions. Title IV of the Clean Air Act 

sets an annual emissions cap on SO2 for 

all affected EGUs. SO2 emissions from 

28 eastern States and the District of 

Columbia (D.C.) are also limited under 

the Clean Air Interstate Rule (CAIR, 

published in the Federal Register on 

May 12, 2005; 70 FR 25162 (May 12, 

2005), which creates an allowancebased trading program that will 

gradually replace the Title IV program 

in those States and D.C. (The recent 

legal history surrounding CAIR is 

discussed below.) The attainment of the 

emissions caps is flexible among EGUs 

and is enforced through the use of 

emissions allowances and tradable 

permits. Energy conservation standards 

could lead EGUs to trade allowances 

and increase SO2 emissions that offset 

some or all SO2 emissions reductions 

attributable to the standard. DOE is not 

certain that there will be reduced 

overall SO2 emissions from the 

standards. The NEMS–BT modeling 

system that DOE uses to forecast 

emissions reductions currently indicates 

that no physical reductions in power 

sector emissions would occur for SO2. 

The above considerations prevent DOE 

from estimating SO2 reductions from 

standards at this time. 

Even though DOE is not certain that 

there will be reduced overall emissions 

from the standard, there may be an 

economic benefit from reduced demand 

for SO2 emission allowances. Electricity 

savings from standards decrease the 

generation of SO2 emissions from power 

production, which can lessen the need 

to purchase emissions allowance 

credits, and thereby decrease the costs 

of complying with regulatory caps on 

emissions. 

Much like SO2 emissions, NOX

emissions from 28 eastern States and the 

District of Columbia (D.C.) are limited 

under the CAIR. Although CAIR has 

been remanded to EPA by the U.S. Court 

of Appeals for the District of Columbia 

Circuit (D.C. Circuit), it will remain in 

effect until it is replaced by a rule 

consistent with the Court’s July 11, 

2008, opinion in North Carolina v. EPA. 

531 F.3d 896 (D.C. Cir. 2008); see also 

North Carolina v. EPA, 550 F.3d 1176 

(D.C. Cir. 2008). These court positions 

were taken into account in the 

November 2009 SNOPR and in today’s 

final rule. Because all States covered by 

CAIR opted to reduce NOX emissions 

through participation in cap and trade 

programs for electric generating units, 

emissions from these sources are capped 

across the CAIR region. 

In the 28 eastern States and D.C. 

where CAIR is in effect, DOE’s forecasts 

indicate that no NOX emissions 

reductions will occur due to energy 

conservation standards because of the 

permanent cap. Energy conservation 

standards have the potential to produce 

an economic impact in the form of 

lower prices for NOX emissions 

allowances, if their impact on electricity 

demand is large enough. However, DOE 

has concluded that the standards in 

today’s final rule will not have such an 

effect because the estimated reduction 

in electricity demand in States covered 

by the CAIR cap would be too small to 

affect allowance prices for NOX under 

the CAIR. 

New or amended energy conservation 

standards would reduce NOX emissions 

in those 22 States that are not affected 

by the CAIR. DOE used the NEMS–BT 

to forecast emission reductions from the 

CCW standards in today’s final rule. 

Similar to emissions of SO2 and NOX, 

future emissions of Hg would have been 

subject to emissions caps. The Clean Air 

Mercury Rule (CAMR) would have 

permanently capped emissions of Hg 

from new and existing coal-fired plants 

in all States beginning in 2010 (70 FR 

28606). The CAMR was vacated by the 

D.C. Circuit in its decision in New Jersey 

v. Environmental Protection Agency 

prior to the publication of the October 

2008 NOPR. 517 F 3d 574 (D.C. Cir. 

2008). However, the NEMS–BT model 

DOE initially used to estimate the 

changes in emissions for the proposed 

rule assumed that Hg emissions would 

be subject to CAMR emission caps. 

Thus, after CAMR was vacated, DOE 

was unable to use the NEMS–BT model 

to estimate any changes in the physical 

quantity of Hg emissions that would 

result from standard levels it considered 

in the October 2008 NOPR. Instead, 

DOE used an Hg emission rate (in metric 

tons of Hg per energy produced) based 

on the AEO 2008. Because virtually all 

Hg emitted from electricity generation is 

from coal-fired power plants, DOE based 

the emission rate on the metric tons of 

Hg emitted per TWh of coal-generated 

electricity. To estimate the reduction in 

Hg emissions, DOE multiplied the 

emission rate by the reduction in coalgenerated electricity associated with the 

standard levels considered. DOE 

continued to use the above approach, 

updated for the AEO 2009 April Release, 

to estimate the Hg emission reductions 

due to standards for the SNOPR. For 

today’s final rule, however, DOE used 

the latest version of NEMS–BT, which 

reflects CAMR being vacated and does 

not incorporate CAMR emission caps, to 

estimate the reduction in Hg emissions. 

In addition to electricity generation, 

the operation of gas-fired CCWs results 

in emissions of CO2 and NOX at the sites 

where the appliances are used. NEMS– 

BT provides no means for estimating 

such emissions. Therefore, DOE 

calculated separate estimates of the 

effect of the potential standards on site 

emissions of CO2 and NOX based on 

emissions factors derived from the 

literature. Because natural gas 

combustion does not yield SO2

emissions, DOE did not report in either 

the November 2009 SNOPR or today’s 

final rule the effect of the proposed 

standards on site emissions of SO2. 

For its November 2009 SNOPR, DOE 

conducted a separate analysis of 

wastewater discharge impacts as part of 


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the environmental assessment for 

commercial clothes washers. 73 FR 

62034, 62112–13 (Oct. 17, 2008). For 

today’s final rule, DOE retained the 

same analysis method for estimating 

wastewater discharge impacts. 

EJ commented that given the water 

supply concerns that are affecting and 

will continue to affect many parts of the 

country, it would be arbitrary and 

capricious for the Department to fail to 

address the environmental benefits of 

reduced water consumption resulting 

from commercial clothes washer 

standards. (EJ, No. 67.5 at p. 13) In 

response, DOE notes that the 

environmental impacts of reduced water 

use are highly variable across the 

country. DOE has neither an analytical 

tool that could estimate such impacts 

nor sufficient information to draw 

definitive conclusions about such 

impacts. Therefore, it was not able to 

account for potential environmental 

benefits of reduced water consumption 

resulting from the commercial clothes 

washer standards considered for today’s 

final rule. 

K. Monetizing Carbon Dioxide and 

Other Emissions Impacts 

For the November 2009 SNOPR, DOE 

calculated the possible monetary benefit 

of CO2, NOX, and Hg reductions. 

Cumulative monetary benefits were 

determined using discount rates of 3 

and 7 percent. DOE monetized 

reductions in CO2 emissions due to 

standards based on a range of monetary 

values drawn from studies that attempt 

to estimate the present value of the 

marginal economic benefits (based on 

the avoided marginal social cost of 

carbon) likely to result from reducing 

greenhouse gas emissions. The marginal 

social cost of carbon is an estimate of 

the monetary value to society of the 

environmental damages of CO2

emissions. 

In the October 2008 NOPR, DOE used 

the range $0 to $20 per ton CO2 for 

reductions in the year 2007 in 2007$. 

These estimates were intended to 

represent the lower and upper bounds 

of the costs and benefits likely to be 

experienced in the United States. The 

lower bound was based on an 

assumption of no benefit and the upper 

bound was based on an estimate of the 

mean value of worldwide impacts due 

to climate change that was reported by 

the Intergovernmental Panel on Climate 

Change (IPCC) in its ‘‘Fourth Assessment 

Report.’’ For the November 2009 SNOPR 

and today’s final rule, DOE is relying on 

a new set of values recently developed 

by an interagency process that 

conducted a thorough review of existing 

estimates of the social cost of carbon 

(SCC). 

The SCC is intended to be a monetary 

measure of the incremental damage 

resulting from greenhouse gas (GHG) 

emissions, including, but not limited to, 

net agricultural productivity loss, 

human health effects, property damages 

from sea level rise, and changes in 

ecosystem services. Any effort to 

quantify and to monetize the harms 

associated with climate change will 

raise serious questions of science, 

economics, and ethics. But with full 

regard for the limits of both 

quantification and monetization, the 

SCC can be used to provide estimates of 

the social benefits of reductions in GHG 

emissions. 

For at least three reasons, any single 

estimate of the SCC will be contestable. 

First, scientific and economic 

knowledge about the impacts of climate 

change continues to grow. With new 

and better information about relevant 

questions, including the cost, burdens, 

and possibility of adaptation, current 

estimates will inevitably change over 

time. Second, some of the likely and 

potential damages from climate 

change—for example, the value society 

places on adverse impacts on 

endangered species—are not included 

in all of the existing economic analyses. 

These omissions may turn out to be 

significant in the sense that they may 

mean that the best current estimates are 

too low. Third, controversial ethical 

judgments, including those involving 

the treatment of future generations, play 

a role in judgments about the SCC (see 

in particular the discussion of the 

discount rate, below). 

To date, regulations have used a range 

of values for the SCC. For example, a 

regulation proposed by the U.S. 

Department of Transportation (DOT) in 

2008 assumed a value of $7 per ton CO2

(2006$) for 2011 emission reductions 

(with a range of $0–$14 for sensitivity 

analysis). Regulation finalized by DOE 

used a range of $0–$20 (2007$). Both of 

these ranges were designed to reflect the 

value of damages to the United States 

resulting from carbon emissions, or the 

‘‘domestic’’ SCC. In the final Model Year 

2011 Corporate Average Fuel Economy 

rule, DOT used both a domestic SCC 

value of $2/t CO2 and a global SCC 

value of $33/t CO2 (with sensitivity 

analysis at $80/t CO2), increasing at 2.4 

percent per year thereafter. 

In recent months, a variety of agencies 

have worked to develop an objective 

methodology for selecting a range of 

interim SCC estimates to use in 

regulatory analyses until improved SCC 

estimates are developed. The following 

summary reflects the initial results of 

these efforts and proposes ranges and 

values for interim social costs of carbon 

used in this rule. It should be 

emphasized that the analysis described 

below is preliminary. These complex 

issues are of course undergoing a 

process of continuing review. Relevant 

agencies will be evaluating and seeking 

comment on all of the scientific, 

economic, and ethical issues before 

establishing final estimates for use in 

future rulemakings. 

The interim judgments resulting from 

the recent interagency review process 

can be summarized as follows: (a) DOE 

and other Federal agencies should 

consider the global benefits associated 

with the reductions of CO2 emissions 

resulting from efficiency standards and 

other similar rulemakings, rather than 

continuing the previous focus on 

domestic benefits; (b) these global 

benefits should be based on SCC 

estimates (in 2007$) of $55, $33, $19, 

$10, and $5 per ton of CO2 equivalent 

emitted (or avoided) in 2007 (in 

calculating the benefits reported in this 

notice, DOE has escalated the 2007$ 

values to 2008$ for consistency with 

other dollar values presented in this 

notice); (c) the SCC value of emissions 

that occur (or are avoided) in future 

years should be escalated using an 

annual growth rate of 3 percent from the 

current values); and (d) domestic 

benefits are estimated to be 

approximately 6 percent of the global 

values. These interim judgments are 

based on the following considerations. 

1. Global and domestic estimates of 

SCC. Because of the distinctive nature of 

the climate change problem, estimates 

of both global and domestic SCC values 

should be considered, but the global 

measure should be ‘‘primary.’’ This 

approach represents a departure from 

past practices, which relied, for the 

most part, on measures of only domestic 

impacts. As a matter of law, both global 

and domestic values are permissible; the 

relevant statutory provisions are 

ambiguous and allow the agency to 

choose either measure. (It is true that 

Federal statutes are presumed not to 

have extraterritorial effect, in part to 

ensure that the laws of the United States 

respect the interests of foreign 

sovereigns. But use of a global measure 

for the SCC does not give extraterritorial 

effect to Federal law and hence does not 

intrude on such interests.) 

It is true that under OMB guidance, 

analysis from the domestic perspective 

is required, while analysis from the 

international perspective is optional. 

The domestic decisions of one nation 

are not typically based on a judgment 

about the effects of those decisions on 

other nations. But the climate change 


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problem is highly unusual in the sense 

that it involves (a) a global public good 

in which (b) the emissions of one nation 

may inflict significant damages on other 

nations and (c) the United States is 

actively engaged in promoting an 

international agreement to reduce 

worldwide emissions. 

In these circumstances, the global 

measure is preferred. Use of a global 

measure reflects the reality of the 

problem and is expected to contribute to 

the continuing efforts of the United 

States to ensure that emission 

reductions occur in many nations. 

Domestic SCC values are also 

presented. The development of a 

domestic SCC is greatly complicated by 

the relatively few region- or countryspecific estimates of the SCC in the 

literature. One potential estimate comes 

from the DICE (Dynamic Integrated 

Climate Economy, William Nordhaus) 

model. In an unpublished paper, 

Nordhaus (2007) produced 

disaggregated SCC estimates using a 

regional version of the DICE model. He 

reported a U.S. estimate of $1/t CO2

(2007 value, 2007$), which is roughly 

11 percent of the global value. 

An alternative source of estimates 

comes from a recent EPA modeling 

effort using the FUND (Climate 

Framework for Uncertainty, Negotiation 

and Distribution, Center for Integrated 

Study of the Human Dimensions of 

Global Change) model. The resulting 

estimates suggest that the ratio of 

domestic to global benefits varies with 

key parameter assumptions. With a 3- 

percent discount rate, for example, the 

U.S. benefit is about 6 percent of the 

global benefit for the ‘‘central’’ (mean) 

FUND results, while, for the 

corresponding ‘‘high’’ estimates 

associated with a higher climate 

sensitivity and lower global economic 

growth, the U.S. benefit is less than 4 

percent of the global benefit. With a 2- 

percent discount rate, the U.S. share is 

about 2 to5 percent of the global 

estimate. 

Based on this available evidence, a 

domestic SCC value equal to 6 percent 

of the global damages is used in this 

rulemaking. This figure is in the middle 

of the range of available estimates from 

the literature. It is recognized that the 6 

percent figure is approximate and 

highly speculative and alternative 

approaches will be explored before 

establishing final values for future 

rulemakings. 

2. Filtering existing analyses. There 

are numerous SCC estimates in the 

existing literature, and it is legitimate to 

make use of those estimates to produce 

a figure for current use. A reasonable 

starting point is provided by the metaanalysis in Richard S. J. Tol’s, ‘‘The 

Social Cost of Carbon: Trends, Outliers, 

and Catastrophes, Economics: The 

Open-Access, Open-Assessment EJournal,’’ Vol. 2, 2008-25. http:// 

www.economics-ejournal.org/ 

economics/journalarticles/2008–25 

(2008). With that starting point, it is 

proposed to ‘‘filter’’ existing SCC 

estimates by using those that (1) are 

derived from peer-reviewed studies; (2) 

do not weight the monetized damages to 

one country more than those in other 

countries; (3) use a ‘‘business as usual’’ 

climate scenario; and (4) are based on 

the most recent published version of 

each of the three major integrated 

assessment models (IAMs): FUND, DICE 

and PAGE (Policy Analysis of the 

Greenhouse Effect). 

Proposal (1) is based on the view that 

those studies that have been subject to 

peer review are more likely to be 

reliable than those that have not been. 

Proposal (2) is based on a principle of 

neutrality and simplicity; it does not 

treat the citizens of one nation 

differently on the basis of speculative or 

controversial considerations. Proposal 

(3) stems from the judgment that as a 

general rule, the proper way to assess a 

policy decision is by comparing the 

implementation of the policy against a 

counterfactual state where the policy is 

not implemented. A departure from this 

approach would be to consider a more 

dynamic setting in which other 

countries might implement policies to 

reduce GHG emissions at an unknown 

future date, and the United States could 

choose to implement such a policy now 

or in the future. 

Proposal (4) is based on three 

complementary judgments. First, the 

FUND, PAGE, and DICE models now 

stand as the most comprehensive and 

reliable efforts to measure the damages 

from climate change. Second, the latest 

versions of the three IAMs are likely to 

reflect the most recent evidence and 

learning, and hence they are presumed 

to be superior to those that preceded 

them. It is acknowledged that earlier 

versions may contain information that is 

missing from the latest versions. Third, 

any effort to choose among them, or to 

reject one in favor of the others, would 

be difficult to defend at this time. In the 

absence of a clear reason to choose 

among them, it is reasonable to base the 

SCC on all of them. 

The agency is keenly aware that the 

current IAMs fail to include all relevant 

information about the likely impacts 

from greenhouse gas emissions. For 

example, ecosystem impacts, including 

species loss, do not appear to be 

included in at least two of the models. 

Some human health impacts, including 

increases in food-borne illnesses and in 

the quantity and toxicity of airborne 

allergens, also appear to be excluded. In 

addition, there has been considerable 

recent discussion of the risk of 

catastrophe and of how best to account 

for worst-case scenarios. It is not clear 

whether the three IAMs take adequate 

account of these potential effects. 

3. Use a model-weighted average of 

the estimates at each discount rate. At 

this time, there appears to be no 

scientifically valid reason to prefer any 

of the three major IAMs (FUND, PAGE, 

and DICE). Consequently, the estimates 

are based on an equal weighting of 

estimates from each of the models. 

Among estimates that remain after 

applying the filter, the average of all 

estimates within a model is derived. 

The estimated SCC is then calculated as 

the average of the three model-specific 

averages. This approach ensures that the 

interim estimate is not biased towards 

specific models or more prolific authors. 

4. Apply a 3-percent annual growth 

rate to the chosen SCC values. SCC is 

assumed to increase over time, because 

future emissions are expected to 

produce larger incremental damages as 

physical and economic systems become 

more stressed as the magnitude of 

climate change increases. Indeed, an 

implied growth rate in the SCC is 

produced by most studies that estimate 

economic damages caused by increased 

GHG emissions in future years. But 

neither the rate itself nor the 

information necessary to derive its 

implied value is commonly reported. In 

light of the limited amount of debate 

thus far about the appropriate growth 

rate of the SCC, applying a rate of 3 

percent per year seems appropriate at 

this stage. This value is consistent with 

the range recommended by IPCC (2007) 

and close to the latest published 

estimate (Hope, 2008). 

For climate change, one of the most 

complex issues involves the appropriate 

discount rate. OMB’s current guidance 

offers a detailed discussion of the 

relevant issues and calls for discount 

rates of 3 percent and 7 percent. It also 

permits a sensitivity analysis with low 

rates for intergenerational problems. (‘‘If 

your rule will have important 

intergenerational benefits or costs you 

might consider a further sensitivity 

analysis using a lower but positive 

discount rate in addition to calculating 

net benefits using discount rates of 3 

and 7 percent.’’) The SCC is being 

developed within the general context of 

the current guidance. 

The choice of a discount rate, 

especially over long periods of time, 

raises highly contested and exceedingly 

difficult questions of science, 


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economics, philosophy, and law. See, 

e.g., William Nordhaus, ‘‘The Challenge 

of Global Warming (2008); Nicholas 

Stern, The Economics of Climate 

Change’’ (2007); ‘‘Discounting and 

Intergenerational Equity’’ (Paul Portney 

and John Weyant, eds., 1999). Under 

imaginable assumptions, decisions 

based on cost-benefit analysis with high 

discount rates might harm future 

generations—at least if investments are 

not made for the benefit of those 

generations. (See Robert Lind, ‘‘Analysis 

for Intergenerational Discounting,’’ id. at 

173, 176–177.) At the same time, use of 

low discount rates for particular projects 

might itself harm future generations, by 

ensuring that resources are not used in 

a way that would greatly benefit them. 

In the context of climate change, 

questions of intergenerational equity are 

especially important. 

Reasonable arguments support the use 

of a 3-percent discount rate. First, that 

rate is among the two figures suggested 

by OMB guidance, and hence it fits with 

existing National policy. Second, it is 

standard to base the discount rate on the 

compensation that people receive for 

delaying consumption, and the 3- 

percent rate is close to the risk-free rate 

of return, proxied by the return on long 

term inflation-adjusted U.S. Treasury 

Bonds. (In the context of climate 

change, it is possible to object to this 

standard method for deriving the 

discount rate.) Although these rates are 

currently closer to 2.5 percent, the use 

of 3 percent provides an adjustment for 

the liquidity premium that is reflected 

in these bonds’ returns. 

At the same time, other arguments 

support use of a 5-percent discount rate. 

First, that rate can also be justified by 

reference to the level of compensation 

for delaying consumption, because it fits 

with market behavior with respect to 

individuals’ willingness to trade off 

consumption across periods as 

measured by the estimated post-tax 

average real returns to private 

investment (e.g., the Standard & Poor’s 

500 Index). In the climate setting, the 5- 

percent discount rate may be preferable 

to the riskless rate because it is based on 

risky investments and the return to 

projects to mitigate climate change is 

also risky. In contrast, the 3-percent 

riskless rate may be a more appropriate 

discount rate for projects where the 

return is known with a high degree of 

confidence (e.g., highway guardrails). 

Second, 5 percent, and not 3 percent, 

is roughly consistent with estimates 

implied by reasonable inputs to the 

theoretically derived Ramsey equation, 

which specifies the optimal time path 

for consumption. That equation 

specifies the optimal discount rate as 

the sum of two components. The first 

reflects the fact that consumption in the 

future is likely to be higher than 

consumption today (even accounting for 

climate impacts), so diminishing 

marginal utility implies that the same 

monetary damage will cause a smaller 

reduction of utility in the future. 

Standard estimates of this term from the 

economics literature are in the range of 

3 to 5 percent. The second component 

reflects the possibility that a lower 

weight should be placed on utility in 

the future, to account for social 

impatience or extinction risk, which is 

specified by a pure rate of time 

preference (PRTP). A conventional 

estimate of the PRTP is 2 percent. (Some 

observers believe that a principle of 

intergenerational equity suggests that 

the PRTP should be close to zero.) It 

follows that a discount rate of 5 percent 

is within the range of values which are 

able to be derived from the Ramsey 

equation, albeit at the low end of the 

range of estimates usually associated 

with Ramsey discounting. 

It is recognized that the arguments 

above—for use of market behavior and 

the Ramsey equation—face objections in 

the context of climate change, and of 

course there are alternative approaches. 

In light of climate change, it is possible 

that consumption in the future will not 

be higher than consumption today, and 

if so, the Ramsey equation will suggest 

a lower figure. Some people have 

suggested that a very low discount rate, 

below 3 percent, is justified in light of 

the ethical considerations calling for a 

principle of intergenerational neutrality. 

See Nicholas Stern, ‘‘The Economics of 

Climate Change’’ (2007); for contrary 

views, see William Nordhaus, ‘‘A 

Question of Balance’’ (2008); Martin 

Weitzman, ‘‘Review of the Stern Review 

on the Economics of Climate Change,’’ 

Journal of Economic Literature, 45(3): 

703–724 (2007). Additionally, some 

analyses attempt to deal with 

uncertainty with respect to interest rates 

over time; a possible approach enabling 

the consideration of such uncertainties 

is discussed below. Richard Newell and 

William Pizer, ‘‘Discounting the Distant 

Future: How Much Do Uncertain Rates 

Increase Valuations?’’ J. Environ. Econ. 

Manage. 46 (2003) 52–71. 

The application of the methodology 

outlined above yields estimates of the 

SCC that are reported in Table IV.8. 

These estimates are reported separately 

using 3-percent and 5-percent discount 

rates. The cells are empty in rows 10 

and 11 because these studies did not 

report estimates of the SCC at a 3- 

percent discount rate. The modelweighted means are reported in the final 

or summary row; they are $33 per t CO2

at a 3-percent discount rate and $5 per 

t CO2 with a 5-percent discount rate. 

TABLE IV.8—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/t CO2 IN 2007 IN 2007$), BASED ON 3% AND 5% 

DISCOUNT RATES * 

Model Study Climate 

scenario 3% 5% 

1 ..................................... FUND ...................................... Anthoff et al. 2009 ................... FUND default .......................... 6 ¥1 

2 ..................................... FUND ...................................... Anthoff et al. 2009 ................... SRES A1b ............................... 1 ¥1 

3 ..................................... FUND ...................................... Anthoff et al. 2009 ................... SRES A2 ................................. 9 ¥1 

4 ..................................... FUND ...................................... Link and Tol 2004 ................... No THC ................................... 12 3 

5 ..................................... FUND ...................................... Link and Tol 2004 ................... THC continues ........................ 12 2 

6 ..................................... FUND ...................................... Guo et al. 2006 ....................... Constant PRTP ....................... 5 ¥1 

7 ..................................... FUND ...................................... Guo et al. 2006 ....................... Gollier discount 1 .................... 14 0 

8 ..................................... FUND ...................................... Guo et al. 2006 ....................... Gollier discount 2 .................... 7 ¥1 

FUND Mean ............................ 8.25 0 

9 ..................................... PAGE ...................................... Wahba & Hope 2006 .............. A2-scen ................................... 57 7 

10 ................................... PAGE ...................................... Hope 2006 ............................... .................................................. ............ 7 

11 ................................... DICE ........................................ Nordhaus 2008 ........................ .................................................. ............ 8 


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TABLE IV.8—GLOBAL SOCIAL COST OF CARBON (SCC) ESTIMATES ($/t CO2 IN 2007 IN 2007$), BASED ON 3% AND 5% 

DISCOUNT RATES *—Continued 

Model Study Climate 

scenario 3% 5% 

Summary Model-weighted mean ............. 33 5 

* The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et 

al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3-percent annual growth 

rate in the SCC, and adjusted for inflation using GDP deflator. 

DOE used the model-weighted mean 

values of $33 and $5 per ton (2007$), as 

these represent the estimates associated 

with the 3-percent and 5-percent 

discount rates, respectively. The 3- 

percent and 5-percent estimates have 

independent appeal and at this time a 

clear preference for one over the other 

is not warranted. These values were 

then escalated to 2008$ and rounded to 

$34 and $5. Thus, DOE has also 

included—and centered its current 

attention on—the average of the 

estimates associated with these discount 

rates, which is approximately $20 (in 

2008$). (Based on the $20 global value, 

the domestic value would be 

approximately $1 per ton of CO2

equivalent.) 

It is true that there is uncertainty 

about interest rates over long time 

horizons. Recognizing that point, 

Newell and Pizer have made a careful 

effort to adjust for that uncertainty. See 

Newell and Pizer, supra. This is a 

relatively recent contribution to the 

literature. 

There are several concerns with using 

this approach in this context. First, it 

would be a departure from current OMB 

guidance. Second, an approach that 

would average what emerges from 

discount rates of 3 percent and 5 

percent reflects uncertainty about the 

discount rate, but based on a different 

model of uncertainty. The Newell-Pizer 

approach models discount rate 

uncertainty as something that evolves 

over time; in contrast, one alternative 

approach would assume that there is a 

single discount rate with equal 

probability of 3 percent and 5 percent. 

Table IV.9 reports on the application 

of the Newell-Pizer adjustments. The 

precise numbers depend on the 

assumptions about the data generating 

process that governs interest rates. 

Columns (1a) and (1b) assume that 

‘‘random walk’’ model best describes the 

data and uses 3-percent and 5-percent 

discount rates, respectively. Columns 

(2a) and (2b) repeat this, except that it 

assumes a ‘‘mean-reverting’’ process. As 

Newell and Pizer report, there is 

stronger empirical support for the 

random walk model. 

TABLE IV.9—GLOBAL SOCIAL COST OF CARBON ESTIMATES ($/t CO2 IN 2007 IN 2007$),* USING NEWELL & PIZER

ADJUSTMENT FOR FUTURE DISCOUNT RATE UNCERTAINTY ** 

Model Study Climate scenario 

Randomwalk model Meanreverting 

model 

3% 5% 

3% 5% 

(1a) (1b) (2a) (2b) 

1 ............... FUND ................................... Anthoff et al. 2009 ............... FUND default ....................... 10 0 7 ¥1 

2 ............... FUND ................................... Anthoff et al. 2009 ............... SRES A1b ............................ 2 0 1 ¥1 

3 ............... FUND ................................... Anthoff et al. 2009 ............... SRES A2 .............................. 15 0 10 ¥1 

4 ............... FUND ................................... Link and Tol 2004 ................ No THC ................................ 20 6 13 4 

5 ............... FUND ................................... Link and Tol 2004 ................ THC continues ..................... 20 4 13 2 

6 ............... FUND ................................... Guo et al. 2006 .................... Constant PRTP .................... 9 0 6 ¥1 

7 ............... FUND ................................... Guo et al. 2006 .................... Gollier discount 1 ................. 14 0 14 0 

8 ............... FUND ................................... Guo et al. 2006 .................... Gollier discount 2 ................. 7 ¥1 7 ¥1 

FUND Mean ......................... 12 1 9 0 

9 ............... PAGE ................................... Wahba & Hope 2006 ........... A2-scen ................................ 97 13 63 8 

10 ............. PAGE ................................... Hope 2006 ........................... .............................................. ............ 13 ............ 8 

11 ............. DICE ..................................... Nordhaus 2008 .................... .............................................. ............ 15 ............ 9 

Summary Model-weighted mean .......... 55 10 36 6 

* The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et 

al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol (2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3-percent annual growth 

rate in the SCC, and adjusted for inflation using GDP deflator. 

** Assumes a starting discount rate of 3 percent. Newell and Pizer (2003) based adjustment factors are not applied to estimates from Guo et 

al. (2006) that use a different approach to account for discount rate uncertainty (rows 7–8). 

The resulting estimates of the social 

cost of carbon are necessarily greater. 

When the adjustments from the random 

walk model are applied, the estimates of 

the social cost of carbon are $10 and 

$55, with the 3-percent and 5-percent 

discount rates, respectively. The 

application of the mean-reverting 

adjustment yields estimates of $6 and 

$36 (2007$). Since the random walk 

model has greater support from the data, 

DOE also used the SCC values of $10 

and $55 (2007$). When escalated to 

2008$, these values are approximately 

$10 and $56. 


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36Trasande, L., et al., ‘‘Applying Cost Analyses to 

Drive Policy that Protects Children,’’ 1076 Ann. 

N.Y. Acad. Sci. 911 (2006). 

37Ted Gayer and Robert Hahn, ‘‘Designing 

Environmental Policy: Lessons from the Regulation 

of Mercury Emissions,’’ Regulatory Analysis 05–01, 

AEI-Brookings Joint Center for Regulatory Studies, 

Washington, DC (2004). A version of this paper was 

published in the Journal of Regulatory Economics 

in 2006. The estimate was derived by backcalculating the annual benefits per ton from the net 

present value of benefits reported in the study. 

In summary, in considering the 

potential global benefits resulting from 

reduced CO2 emissions, DOE used 

values based on a social cost of carbon 

of approximately $5, $10, $20, $34 and 

$56 per metric ton avoided in 2007 

(values expressed in 2008$). DOE also 

calculated the domestic benefits based 

on a value of approximately $1 per 

metric ton avoided in 2007. To value the 

CO2 emissions reductions expected to 

result from amended standards for 

CCWs in 2013–2043, DOE escalated the 

above values for 2007 using a 3-percent 

escalation rate. As indicated in the 

discussion above, estimates of SCC are 

assumed to increase over time since 

future emissions are expected to 

produce larger incremental damages as 

physical and economic systems become 

more stressed as the magnitude of 

climate change increases. Although 

most studies that estimate economic 

damages caused by increased GHG 

emissions in future years produce an 

implied growth rate in the SCC, neither 

the rate itself nor the information 

necessary to derive its implied value is 

commonly reported. However, applying 

a rate of 3 percent per year is consistent 

with the range recommended by IPCC 

(2007). 

DOE also investigated the potential 

monetary benefit of reduced NOX and 

Hg emissions from the TSLs it 

considered. As noted above, new or 

amended energy conservation standards 

would reduce NOX emissions in those 

22 States that are not affected by CAIR, 

in addition to the reduction in site NOX

emissions nationwide. DOE estimated 

the monetized value of NOX emissions 

reductions resulting from each of the 

TSLs considered for today’s final rule 

based on environmental damage 

estimates from the literature. Available 

estimates suggest a very wide range of 

monetary values for NOX emissions, 

ranging from $370 per ton to $3,800 per 

ton of NOX from stationary sources, 

measured in 2001$ (equivalent to a 

range of $442 to $4,540 per ton in 

2008$). Refer to the OMB, Office of 

Information and Regulatory Affairs, 

‘‘2006 Report to Congress on the Costs 

and Benefits of Federal Regulations and 

Unfunded Mandates on State, Local, 

and Tribal Entities,’’ Washington, DC, 

for additional information. 

For Hg emissions reductions, DOE 

estimated the national monetized values 

resulting from the TSLs considered for 

today’s rule based on environmental 

damage estimates from the literature. 

The impact of mercury emissions from 

power plants on humans is considered 

highly uncertain. However, DOE 

identified two estimates of the 

environmental damage of Hg based on 

estimates of the adverse impact of 

childhood exposure to methyl mercury 

on IQ for American children, and 

subsequent loss of lifetime economic 

productivity resulting from these IQ 

losses. The high-end estimate of $1.3 

billion per year in 2000$ (which works 

out to $33.3 million per ton emitted per 

year in 2008$) is based on an estimate 

of the current aggregate cost of the loss 

of IQ in American children that results 

from exposure to Hg of U.S. power plant 

origin.36 DOE’s low-end estimate of 

$0.66 million per ton emitted in 2004$ 

($0.745 million per ton in 2008$) was 

derived from an evaluation of mercury 

control that used different methods and 

assumptions from the first study, but 

was also based on the present value of 

the lifetime earnings of children 

exposed to Hg.37

As previously stated, DOE’s analysis 

assumed the presence of nationwide 

emission caps on SO2 and caps on NOX

emissions in the 28 States covered by 

CAIR. In the presence of these caps, the 

NEMS–BT modeling system that DOE 

used to forecast emissions reduction 

indicated that no physical reductions in 

power sector emissions would occur 

(although there remains uncertainty 

about whether physical reduction of 

SO2 will occur), but that the standards 

could put slight downward pressure on 

the prices of emissions allowances in 

cap-and-trade markets. Estimating this 

effect is very difficult because factors 

such as credit banking can change the 

trajectory of prices. From its modeling 

to date, DOE is unable to estimate a 

benefit from energy conservation 

standards on the prices of emissions 

allowances at this time. See the 

environmental assessment in the final 

rule TSD for further details. 

V. Discussion of Other Comments 

Since DOE opened the docket for this 

rulemaking, it has received more than 

44 written comments from a diverse set 

of parties, including manufacturers and 

their representatives, wholesalers and 

distributors, energy conservation 

advocates, State officials and agencies, 

and electric utilities. Section IV of this 

preamble discusses comments DOE 

received on the analytic methodologies 

it used. Additional comments DOE 

received in response to the November 

2009 SNOPR addressed the burdens and 

benefits associated with new energy 

efficiency standards, the information 

DOE used in its analyses, results of and 

inferences drawn from the analyses, 

impacts of standards, the merits of the 

different TSLs and standards options 

DOE considered, other issues affecting 

adoption of standards for CCWs, and the 

DOE rulemaking process. DOE 

addresses these comments in this 

section. 

A. Proposed Trial Standard Levels 

(TSLs) for Commercial Clothes Washers 

For the October 2008 NOPR, DOE 

based the TSLs on efficiency levels 

explored in the November 2007 ANOPR, 

and selected the TSLs on consideration 

of economic factors and current market 

conditions. ASAP suggested that DOE 

set TSLs based upon industry 

benchmarks such as current and 

forthcoming ENERGY STAR 

qualification levels and pending Federal 

tax incentive performance levels. 

(ASAP, Public Meeting Transcript, No. 

40.5 at p. 33 and pp. 148–149) EIEA 

2008 provided an Energy Efficient 

Appliance Credit to manufacturers for 

any RCW or CCW (front-loading or toploading) produced domestically through 

2010 with an efficiency level of at least 

2.0 MEF/6.0 WF, or a larger credit for 

one that achieves 2.2 MEF/4.5 WF. The 

legislation also provides a separate tax 

credit for any top-loading RCW that 

achieves an efficiency level of at least 

1.72 MEF/8.0 WF or a larger credit for 

one that exceeds 1.8 MEF/7.5 WF. DOE 

considered the impacts of these tax 

credits on the CCW industry in detail as 

part of the MIA. DOE accounts for the 

Federal tax credit as a direct cash 

benefit in the base and standards cases 

that increases the INPV. See section 

IV.G of today’s supplemental notice and 

appendix 13C of the SNOPR TSD for 

further discussion of this issue. 

B. Proposed Standards for Commercial 

Clothes Washers 

For the November 2009 SNOPR, DOE 

made the preliminary determination 

that the standards for top-loading and 

front-loading CCWs listed in Table II.1 

are technologically feasible and 

economically justified, and invited 

comment on these proposed standard 

levels. 

In response, Alliance stated that it 

opposes the standard proposed for toploading CCWs, noting that it is based on 

a ‘‘residential construction’’ product 

with almost no acceptance in the 

marketplace, instead of a true 

‘‘commercial construction’’ product 

meeting the needs of the U.S. 


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commercial clothes washer market 

segment. It stated that the proposed 

standard is inappropriate because 

equipment meeting the standard would 

not provide true hot water (120 °F or 

greater), true warm water (80 °F to 120 

°F), or adequate rinsing. Alliance 

commented that WEB Service Company, 

California’s largest multi-housing route 

operator, deployed an all-spray-rinse 

top-loading CCW in the late 1990’s and 

was forced to take back all deployed 

units because they didn’t meet the 

needs of the users. It stated that it could 

support a top-loading class standard of 

MEF ≥ 1.42/WF ≤ 9.5 (TSL 2), and that 

it supports the proposed standard for 

front-loading CCWs. (Alliance, No. 66.4 

at p. 4; Alliance, No. 67.8 at pp. 1, 4) 

Whirlpool commented that it supports 

both the top-loading and front-loading 

standards proposed in the November 

2009 SNOPR. It stated that energy and 

water consumption levels that are more 

restrictive than these will likely lead to 

poor wash performance, poor rinse 

performance, or both. (Whirlpool, No. 

67.11 at p. 3) AHAM and GE stated 

support for the proposed MEF and water 

factor levels that DOE proposed for 

front-loading CCWs. (AHAM, No. 67.12 

at p. 3; GE, No. 67.9 at p. 1) GE added 

that it supports DOE’s proposed MEF 

and WF requirements for front-load 

commercial clothes washers. In 

addition, GE expressed support for 

DOE’s proposed MEF and WF 

requirements for top-load commercial 

clothes washers, but stated its concern 

that the max-tech model on which this 

level is based is designed for a relatively 

limited segment of the market (the onpremises laundry commercial segment), 

and that this model has not yet been 

demonstrated as sustainable in the 

harsher environment of laundromats, 

where the units are subject to tougher 

conditions such as overloading. (GE, No. 

67.9 at p. 1) 

EJ and the California Utilities 

advocated adoption of a single set of 

energy and water efficiency standards 

for all commercial clothes washers, 

which will deliver greater energy and 

water savings than separate standards 

for top-loading and front-loading 

commercial washers. The California 

Utilities stated that its preliminary 

analysis suggests that over the next 30 

years, DOE could save as much as 50 

percent more in energy savings and over 

200 percent more in water savings with 

a single equipment class standard (set at 

levels of MEF 2.35/WF 4.4) than the 

standard that DOE has proposed in the 

SNOPR. (EJ, No. 67.5 at pp. 10–11; 

California Utilities, No. 67.10 at pp. 3– 

4) EJ stated that the proposed separate 

standards for front-loaders would 

increase the installed price differential 

between front-loaders and top-loaders, 

which could result in increased energy 

and water consumption to the extent 

that the increased installed price 

differential would encourage the market 

to shift from front-loaders to less 

efficient top-loaders. It noted that the 

modest energy and water savings that 

DOE has estimated for its proposed 

separate front-loader standards could be 

exceeded by that standard’s impact on 

the relative shipments of top-loading 

and front-loading washers. It added that 

if DOE’s standards were to necessitate 

design changes to top-loaders 

exclusively, the resulting increase in 

installed costs for top-loaders would 

foster the market’s transition to frontloaders, increasing the net energy and 

water savings produced by the standard. 

(EJ, No. 67.5 at pp. 10–11) 

EJ and the California Utilities also 

noted the availability of flexible 

regulatory approaches that would 

facilitate adoption of a strong, uniform 

set of standards for all commercial 

washers and also minimize any adverse 

impacts on competition. They stated 

that DOE could adopt a tiered approach 

to standards, maintaining a 2013 

compliance date for initial energy and 

water efficiency standards, while 

phasing in stronger requirements later. 

This approach, they said, would give 

the LVM (Alliance) and other 

manufacturers additional time to raise 

needed capital and to optimize product 

designs and manufacturing processes to 

meet strong standards at a lower cost. 

(EJ, No. 67.5 at pp. 9–10; California 

Utilities, No. 67.10 at pp. 4–5) EJ added 

that alternatively, DOE could 

accommodate Alliance’s key concerns 

by granting a temporary waiver from 

compliance with revised standards. This 

would enable DOE to adopt effective 

standards while giving Alliance an 

extended compliance period in which to 

raise needed capital and optimize its 

product designs and manufacturing 

processes. (EJ, No. 67.5 at p. 9–10) 

The Joint Comment stated that DOE’s 

proposed rule establishing two product 

classes for CCWs is not satisfactory for 

either of the proposed classes, as it 

would require manufacturers to make 

substantial investments to achieve 

modest improvements in the efficiency 

of a protected class of inherently lessefficient top-loaders, while establishing 

a standard for front-loaders that 97 

percent of the front-loading models on 

the market today already meet. It noted 

that a stronger standard for front-loaders 

would widen the price differential 

between front-loaders and top-loaders, 

which would encourage a portion of the 

market to shift from front-loaders back 

to less efficient top-loaders. The Joint 

Comment recommended that a standard 

be set for CCWs as a single product 

class, with performance levels that are 

readily achievable by today’s highefficiency front-loading washers. It 

stated that the highest standard level 

identified for front-loaders (MEF 2.35/ 

WF 4.4) maximizes energy and life-cycle 

cost savings when applied to all 

commercial washers, and thus should 

be the strongest candidate for adoption. 

Regarding the problems that the 

recommended standards could pose for 

the LVM (i.e., Alliance), the Joint 

Comment stated that the standard 

should take effect in stages, allowing 

most capital conversion costs to be 

deferred for an additional two years. It 

added that the manufacturer hardship 

waiver process in current law remains 

open to Alliance should unforeseen 

circumstances arise making compliance 

impossible. (Joint Comment, No. 67.6 at 

p. 1) 

In considering standards for today’s 

final rule, DOE first notes that it has 

retained separate equipment classes for 

top-loading and front-loading CCWs, for 

reasons discussed in section IV.A. DOE 

has retained the analyses of standards 

for both equipment classes that it 

conducted for the SNOPR, which are 

described in section IV. Section VI 

presents a discussion of DOE’s reasons 

for adopting the standard levels in 

today’s final rule. 

VI. Analytical Results and Conclusions 

A. Trial Standard Levels 

DOE analyzed the benefits and 

burdens of a number of TSLs for the 

CCWs that are the subject of today’s 

final rule. As discussed in section IV.A, 

for the October 2008 NOPR, DOE based 

the TSLs on efficiency levels explored 

in the November 2007 ANOPR, and 

selected the TSLs on consideration of 

economic factors and current market 

conditions. As also discussed in section 

IV.C.1.a, DOE eliminated the maximum 

technologically efficiency level of 1.76 

MEF/8.3 WF for the top-loading 

equipment class in the November 2009 

SNOPR. For today’s final rule, DOE 

considered the same TSLs it considered 

for the November 2009 SNOPR. 

Table VI.1 presents the TSLs analyzed 

for today’s final rule and the efficiency 

levels (consisting of a combination of 

MEF and WF) within each TSL for each 

class of equipment. In all, DOE has 

considered five TSLs. TSL 1 

corresponds to the first candidate 

standard level from each equipment 

class and represents the efficiency level 

for each class with the least significant 

design change. TSL 2 represents the 


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second candidate standard level for 

front-loading washers while keeping 

top-loading washers at its first candidate 

standard level. Over 96 percent of the 

front-loading CCW equipment Stock 

Keeping Units (SKUs) currently on the 

market either meet or exceed the second 

candidate standard level for frontloading washers. In the case of the 

second candidate standard level for toploading washers, a significant 

percentage of the market, over 35 

percent, also meets or exceeds this 

efficiency level. Therefore, TSL 2 

corresponds to the candidate standard 

levels for each equipment class that still 

represent a significant share of the 

market. TSL 3 represents the second 

candidate standard level for top-loading 

washers (the maximum efficiency level 

for this class), and keeps front-loading 

washers at the second candidate 

standard level. For TSL 3, front-loading 

washers were held to the second 

candidate standard level in order to 

minimize the equipment price 

difference between the two equipment 

classes. For TSL 4, top-loading washers 

are retained at their maximum 

efficiency level while front-loading 

washers are incremented to their third 

candidate standard level. Finally, TSL 5 

corresponds to the maximum 

technologically feasible level for each 

equipment class. In progressing from 

TSL 1 to TSL 5, the LCC savings, NES, 

and NPV all increase. TSL 5 represents 

the level with the minimum LCC and 

maximum NES and NPV. 

TABLE VI.1—TRIAL STANDARD LEVELS FOR COMMERCIAL CLOTHES WASHERS

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Top-Loading: 

MEF .................................................................... 1 .42 1 .42 1 .60 1 .60 1 .60 

WF ...................................................................... 9 .5 9 .5 8 .5 8 .5 8 .5 

Front-Loading: 

MEF .................................................................... 1 .80 2 .00 2 .00 2 .20 2 .35 

WF ...................................................................... 7 .5 5 .5 5 .5 5 .1 4 .4 

B. Significance of Energy Savings 

To estimate the energy savings 

through 2043 due to amended energy 

conservation standards, DOE compared 

the energy consumption of equipment 

under the base case to energy 

consumption of this equipment under 

each TSL that DOE considered for 

CCWs. Table VI.2 shows DOE’s NES 

estimates (and national water savings 

results) for each TSL. The table also 

shows the magnitude of the savings if 

they are discounted at 7-percent and 

3-percent discount rates. Discounted 

energy savings represent a policy 

perspective where energy savings 

further in the future are less significant 

than energy savings closer to the 

present. Each TSL considered in this 

rulemaking would result in significant 

energy savings, and the amount of 

savings increases with higher energy 

conservation standards (ranging from an 

estimated 0.04 quads to 0.12 quads, 

undiscounted, for TSLs 1 through 5). 

TABLE VI.2—SUMMARY OF CUMULATIVE NATIONAL ENERGY AND WATER SAVINGS FOR CCWS

[Savings for Units Sold from 2013 to 2043] 

Trial standard level 

Undiscounted 3% Discounted 7% Discounted 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

1 ............................................................... 0.04 0.00 0.02 0.00 0.01 0.00 

2 ............................................................... 0.04 0.01 0.02 0.00 0.01 0.00 

3 ............................................................... 0.10 0.14 0.06 0.08 0.03 0.04 

4 ............................................................... 0.11 0.16 0.06 0.09 0.03 0.04 

5 ............................................................... 0.12 0.21 0.07 0.11 0.03 0.06 

C. Economic Justification 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

To evaluate the net economic impact 

of standards on CCW customers, DOE 

conducted LCC and PBP analyses for 

each TSL. More efficient CCWs affect 

customers in two ways: (1) Purchase 

price is expected to increase; and (2) 

annual operating expense is expected to 

decrease. DOE analyzed the net effect by 

calculating the LCC. Inputs used for 

calculating the LCC include total 

installed costs, annual energy savings, 

average electricity prices, energy price 

trends, repair and maintenance costs, 

equipment lifetime, and discount rates. 

Table VI.3 and Table VI.4 show the 

LCC and PBP results for each CCW 

application for the top-loading 

equipment class, and Table VI.5 and 

Table VI.6 show the results for the frontloading equipment class. DOE’s LCC 

and PBP analyses provided five outputs 

for each considered TSL. The first three 

outputs are the percentages of standardcompliant machine purchases that 

would result in (1) a net LCC increase, 

(2) no impact, or (3) a net LCC savings 

for the customer. The fourth output is 

the average net LCC savings from 

standard-compliant equipment. The 

fifth output is the average PBP for the 

customer purchasing a design that 

complies with the TSL. 

For the top-loading equipment class, 

the highest average LCC savings and 

shortest PBP occur at TSLs 3, 4, and 5. 

At these TSLs, 85 percent of multifamily customers have a net benefit, and 

96 percent of laundromat customers 

have a net benefit. For the front-loading 

equipment class, the highest average 

LCC savings occur at TSL 5, and the 

PBP is lower than at TSL 4. TSLs 1 

through 3 have little impact because 

most of the market is already at or above 

this level in the base case. 


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TABLE VI.3—COMMERCIAL CLOTHES WASHERS, TOP-LOADING, MULTI-FAMILY APPLICATION: LIFE-CYCLE COST AND

PAYBACK PERIOD RESULTS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

$ 

Average 

LCC $ 

Average 

savings 

$ 

Customers with 

Net cost Median Average 

% 

No 

impact 

% 

Net 

benefit 

% 

Baseline ..................................................... 1.26/9.50 760 3,263 4,023 ................ ................ ................ ................ ................ ................

1, 2 ............................................................ 1.42/9.50 883 3,153 4,036 ¥8.1 43.3 35.3 21.5 11.7 17.3 

3, 4, 5 ........................................................ 1.60/8.50 974 2,873 3,847 178.6 13.8 1.2 85.0 4.6 5.6 

TABLE VI.4—COMMERCIAL CLOTHES WASHERS, TOP-LOADING, LAUNDROMAT APPLICATION: LIFE-CYCLE COST AND

PAYBACK PERIOD RESULTS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

$ 

Average 

LCC $ 

Average 

savings 

$ 

Customers with 

Net cost Median Average 

% 

No 

impact 

% 

Net 

benefit 

% 

Baseline ..................................................... 1.26/9.50 760 3,422 4,182 ................ ................ ................ ................ ................ ................

1, 2 ............................................................ 1.42/9.50 883 3,326 4,209 ¥17.7 51.4 35.3 13.3 7.9 9.1 

3, 4, 5 ........................................................ 1.60/8.50 974 3,025 3,999 190.0 2.9 1.2 95.9 2.8 3.0 

TABLE VI.5—COMMERCIAL CLOTHES WASHERS, FRONT-LOADING, MULTI-FAMILY APPLICATION: LIFE-CYCLE COST AND

PAYBACK PERIOD RESULTS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

$ 

Average 

LCC $ 

Average 

savings 

$ 

Customers with 

Net cost Median Average 

% 

No 

impact 

% 

Net 

benefit 

% 

Baseline ..................................................... 1.72/8.00 1,365 2,855 4,220 ................ ................ ................ ................ ................ ................

1 ................................................................ 1.80/7.50 1,365 2,855 4,091 4.7 0.0 96.3 3.7 0.0 0.0 

2, 3 ............................................................ 2.00/5.50 1,388 2,726 3,690 19.5 0.0 96.3 3.7 0.4 0.4 

4 ................................................................ 2.20/5.10 1,428 2,302 3,596 91.5 1.4 23.1 75.5 3.0 3.2 

5 ................................................................ 2.35/4.40 1,470 2,168 3,484 202.7 1.1 0.0 98.9 2.9 3.1 

TABLE VI.6—COMMERCIAL CLOTHES WASHERS, FRONT-LOADING, LAUNDROMAT APPLICATION: LIFE-CYCLE COST AND

PAYBACK PERIOD RESULTS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

$ 

Average 

LCC $ 

Average 

savings 

$ 

Customers with 

Net cost Median Average 

% 

No 

impact 

% 

Net 

benefit 

% 

Baseline ..................................................... 1.72/8.00 1,365 2,014 4,380 ................ ................ ................ ................ ................ ................

1 ................................................................ 1.80/7.50 1,365 3,014 4,240 5.2 0.0 96.3 3.7 0.0 0.0 

2, 3 ............................................................ 2.00/5.50 1,388 2,874 3,787 22.0 0.0 96.3 3.7 0.2 0.2 

4 ................................................................ 2.20/5.10 1,428 2,400 3,695 93.4 0.0 23.1 76.9 1.8 1.9 

5 ................................................................ 2.35/4.40 1,470 2,267 3,572 216.1 0.0 0.0 100.0 1.6 1.7 

b. Commercial Consumer Subgroup 

Analysis 

Using the LCC spreadsheet model, 

DOE estimated the impact of the 

considered TSLs on the following CCW 

customer subgroups: (1) Small business 

owners, and (2) customers without 

municipal water and sewer. 

For customers without municipal 

water and sewer, the LCC impacts and 

PBPs are similar to the LCC impacts and 

PBPs for the full sample of CCW 

customers. But for small business 

owners (small multi-family property 

owners and small laundromats), the 

LCC impacts and PBPs are different 

from those associated with the general 

population. 

For the top-loading equipment class, 

Table VI.7 shows the LCC impacts and 

PBPs for small multi-family property 

owners and small laundromats, while 

Table VI.8 shows the same for the frontloading equipment class. For all TSLs 

for both equipment classes, both sets of 

small business owners, on average, 

realize LCC savings similar to the 

general population. The difference 

between the small business population 

and the general population occurs in the 

percentage of each population that 

realizes LCC savings from standards. 

With the exception of TSL 1 for toploading washers, an overwhelming 

majority of the small business and 

general populations benefit from 

standards at each TSL. But for both 

equipment classes, a larger percentage 

of the general population benefits from 


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standards than do small business 

owners. This occurs because small 

businesses do not have the same access 

to capital as larger businesses. As a 

result, smaller businesses have a higher 

average discount rate than the industry 

average. Because of the higher discount 

rates, smaller businesses do not value 

future operating costs savings from more 

efficient CCWs as much as the general 

population. But to emphasize, in spite 

of the higher discount rates, a majority 

of small businesses still benefit from 

higher CCW standards at all TSLs, with 

the exception of TSL 1 for the toploading equipment class. 

TABLE VI.7—COMMERCIAL CLOTHES WASHERS, TOP-LOADING: LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR

SMALL BUSINESS OWNERS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

$ 

Average 

LCC 

$ 

Average 

savings 

$ 

Households with 

Net cost Median Average 

$ 

No 

impact 

% 

Net 

benefit 

% 

Multi-Family Application 

Baseline ..................................................... 1.26/9.50 760 2,659 3,419 ................ ................ ................ ................ ................ ................

1, 2 ............................................................ 1.42/9.50 883 2,569 3,452 (22.0) 50.7 35.6 13.7 11.7 17.7 

3, 4, 5 ........................................................ 1.60/8.50 974 2,341 3,315 112.6 21.2 1.5 77.4 4.5 5.6 

Laundromat Application 

Baseline ..................................................... 1.26/9.50 760 2,963 3,723 ................ ................ ................ ................ ................ ................

1, 2 ............................................................ 1.42/9.50 883 2,880 3,764 (26.1) 58.6 35.6 5.8 7.8 9.2 

3, 4, 5 ........................................................ 1.60/8.50 974 2,620 3,594 140.9 5.6 1.5 92.9 2.8 3.0 

Note: Numbers in parentheses indicate negative values. 

TABLE VI.8—COMMERCIAL CLOTHES WASHERS, FRONT-LOADING: LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR

SMALL BUSINESS OWNERS

TSL MEF/WF 

Life-cycle cost Life-cycle cost savings Payback period 

years 

Average 

installed 

price 

$ 

Average 

operating 

cost 

% 

Average 

LCC 

$ 

Average 

savings 

$ 

Households with 

Net cost Median Average 

% 

No 

impact 

% 

Net 

benefit 

% 

Multi-Family Application 

Baseline ..................................................... 1.72/8.00 1,365 2,327 3,693 ................ ................ ................ ................ ................ ................

1 ................................................................ 1.80/7.50 1,365 2,327 3,587 3.7 0.0 96.4 3.6 0.0 0.0 

2, 3 ............................................................ 2.00/5.50 1,388 2,222 3,265 14.9 0.0 96.4 3.6 0.4 0.5 

4 ................................................................ 2.20/5.10 1,428 1,877 3,196 69.1 4.1 22.2 73.7 3.0 3.2 

5 ................................................................ 2.35/4.40 1,470 1,768 3,113 151.7 4.2 0.0 95.8 2.9 3.1 

Laundromat Application 

Baseline ..................................................... 1.72/8.00 1,365 1,643 3,977 ................ ................ ................ ................ ................ ................

1 ................................................................ 1.80/7.50 1,365 2,611 3,855 4.2 0.0 96.4 3.6 0.0 0.0 

2, 3 ............................................................ 2.00/5.50 1,388 2,490 3,467 17.6 0.0 96.4 3.6 0.2 0.2 

4 ................................................................ 2.20/5.10 1,428 2,079 3,392 75.9 0.0 22.2 77.7 1.8 1.9 

5 ................................................................ 2.35/4.40 1,470 1,964 3,291 176.4 0.0 0.0 100.0 1.6 1.7 

c. Rebuttable-Presumption Payback 

As discussed above, EPCA establishes 

a rebuttable presumption that an energy 

conservation standard is economically 

justified if the increased purchase cost 

for equipment that meets the standard is 

less than three times the value of the 

first-year energy savings resulting from 

the standard. (42 U.S.C. 

6295(o)(2)(B)(iii)) DOE calculated a 

rebuttable-presumption PBP for each 

TSL to determine whether DOE could 

presume that a standard at that level is 

economically justified. Table VI.9 shows 

the rebuttable-presumption PBPs for 

CCWs. As required by EPCA, DOE based 

the calculation on the assumptions in 

the DOE test procedures for CCWs. (42 

U.S.C. 6295(o)(2)(B)(iii)) As a result, 

DOE calculated a single rebuttablepresumption payback value, and not a 

distribution of PBPs, for each TSL. 

TABLE VI.9—REBUTTABLE-PRESUMPTION PAYBACK PERIODS FOR COMMERCIAL CLOTHES WASHERS

TSL 

Payback period, years 

Top-loading Front-loading 

Multi-family 

application 

Lauundromat 

application 

Multi-family 

application 

Laundromat 

application 

1 ............................................................................................... >100 >100 0 0 

2 ............................................................................................... >100 >100 1.2 1.3 


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TABLE VI.9—REBUTTABLE-PRESUMPTION PAYBACK PERIODS FOR COMMERCIAL CLOTHES WASHERS—Continued 

TSL 

Payback period, years 

Top-loading Front-loading 

Multi-family 

application 

Lauundromat 

application 

Multi-family 

application 

Laundromat 

application 

3 ............................................................................................... 24.0 >100 1.2 1.3 

4 ............................................................................................... 24.0 >100 9.4 17.3 

5 ............................................................................................... 24.0 >100 10.0 17.6 

With the exception of TSLs 1 to 3 for 

front-loading CCWs, the TSLs in Table 

VI.9 do not have rebuttable-presumption 

PBPs of less than 3 years. As stated 

above, in addition to calculating the 

rebuttable-presumption PBP DOE 

routinely conducts a thorough economic 

analysis that considers the full range of 

impacts, including those to consumers, 

manufacturers, the Nation, and the 

environment, as required under 42 

U.S.C. 6295(o)(2)(B)(i). The results of 

this full analysis serve as the basis for 

DOE to definitively determine the 

economic justification for a potential 

standard level (thereby supporting or 

rebutting the results of any preliminary 

determination of economic 

justification.) Section IV.D provides a 

complete discussion of how DOE 

considered the range of impacts to select 

the standards in today’s final rule. 

2. Economic Impacts on Manufacturers 

For the November 2009 SNOPR, DOE 

used the INPV in the MIA to compare 

the financial impacts of different TSLs 

on CCW manufacturers. 74 FR 57738, 

57773–76 (Nov. 9, 2009). The INPV is 

the sum of all net cash flows discounted 

by the industry’s cost of capital 

(discount rate). DOE used the GRIM to 

compare the INPV of the base case (no 

new energy conservation standards) to 

that of each TSL for the CCW industry. 

To evaluate the range of cash-flow 

impacts on the CCW industry, DOE 

constructed different scenarios using 

different assumptions for shipments that 

correspond to the range of anticipated 

market responses. Each scenario results 

in a unique set of cash flows and 

corresponding industry value at each 

TSL. These steps allowed DOE to 

compare the potential impacts on the 

industry as a function of TSLs in the 

GRIM. The difference in INPV between 

the base case and the standards case is 

an estimate of the economic impacts 

that implementing that standard level 

would have on the entire industry. For 

today’s final rule notice, DOE continues 

to use the above methodology and 

presents the results in the subsequent 

sections. See chapter 13 of the TSD for 

additional information on MIA 

methodology and results. 

a. Industry Cash-Flow Analysis Results 

Using scenarios based on two 

shipment projections from the NIA, 

DOE estimated the impact of amended 

energy conservation standards for CCWs 

on the INPV of the CCW industry. The 

impact consists of the difference 

between INPV in the base case and 

INPV in the standards case. INPV is the 

primary metric used in the MIA, and 

represents one measure of the fair value 

of the industry in today’s dollars. DOE 

calculated the INPV by summing all of 

the net cash flows, discounted at the 

CCW industry’s cost of capital or 

discount rate. 

As discussed in section IV.G of 

today’s final rule, DOE also considered 

the impact of Federal production tax 

credits on the CCW industry. DOE does 

not include the benefit of these tax 

credits in its results shown below. DOE 

includes these results in appendix 13C 

of the TSD. DOE estimated that the total 

benefit of these Federal production tax 

credits to the CCW industry from 2007 

through 2010 would be approximately 

$5.3 million. Because DOE discounts 

the industry cash flows to the 2009 base 

year, DOE estimates that approximately 

$1.6 million of the total benefit from the 

tax credits will occur during the 

analysis period. In the scenario that 

considers the benefits of the tax credits, 

the base case INPV increases by 

approximately $1.6 million. As 

previously stated, although the basecase and standards-case INPV increase 

as a result of Federal production tax 

credits, the benefits do not significantly 

mitigate possible impacts due to 

standards. For additional information 

on the assumptions and calculations of 

Federal production tax credits for 

CCWs, see appendix 13C of the TSD. 

Also discussed in section IV.G of 

today’s final rule, DOE incorporated a 

sensitivity analysis from the NIA that 

impacts shipments in the MIA. The 

methodology and subsequent INPV 

results from the sensitivity analysis are 

found in appendix 11C of the TSD. 

To assess the lower end of the range 

of potential impacts for the CCW 

industry, DOE considered a scenario 

wherein unit shipments will not be 

impacted regardless of new energy 

conservation standards—this scenario is 

called the base-case shipments scenario. 

To assess the higher end of the range of 

potential impacts for the CCW industry, 

DOE considered a scenario in which 

total industry shipments would 

decrease due to the combined effects of 

increases in purchase price and 

decreases in operating costs due to new 

energy conservation standards—this 

scenario is called the price elasticity of 

demand scenario. In both scenarios, it is 

assumed that manufacturers will be able 

to maintain the same gross margins (as 

a percentage of revenues) that are 

currently obtained in the base case. 

Table VI.10 through Table VI.11 show 

the changes in INPV that DOE estimates 

would result from the TSLs DOE 

considered for this final rule. 

TABLE VI.10—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL CLOTHES WASHERS WITH BASE-CASE SHIPMENTS. 

NOT INCLUDING DOE’S ESTIMATES OF FEDERAL PRODUCTION TAX CREDITS

[Preservation of gross margin percentage markup with base-case shipments] 

Units Base 

case 

Trial standard level 

1 2 3 4 5 

INPV ................................................................ 2008$ millions ............ 62 65 63 57 54 41 

Change in INPV .............................................. 2008$ millions* ........... ................ 4 1 (5) (8) (20) 


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38The 2006 Annual Survey of Manufactures is 

available online at: http://www.census.gov/mcd/ 

asmhome.html. 

39The 2006 Current Industry Report is available 

online at: http://www.census.gov/cir/www/ 

alpha.html. 

TABLE VI.10—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL CLOTHES WASHERS WITH BASE-CASE SHIPMENTS. 

NOT INCLUDING DOE’S ESTIMATES OF FEDERAL PRODUCTION TAX CREDITS—Continued 

[Preservation of gross margin percentage markup with base-case shipments] 

Units Base 

case 

Trial standard level 

1 2 3 4 5 

% ................................ ................ 5.97 2.24 ¥7.81 ¥12.73 ¥33.09 

Amended Energy Conservation Standards 

Equipment Conversion Expenses.

2008$ millions ............ ................ 0.00 3.12 18.72 22.56 35.87 

Amended Energy Conservation Standards 

Capital Investments.

2008$ millions ............ ................ 0.00 0.62 1.66 2.44 5.09 

Total Investment Required .............................. 2008$ millions ............ ................ 0.0 3.7 20.4 25.0 41.0 

* Parentheses indicate negative (¥) values. 

TABLE VI.11—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL CLOTHES WASHERS WITH BASE-CASE SHIPMENTS. 

PRESERVATION OF GROSS MARGIN PERCENTAGE MARKUP WITH BASE-CASE SHIPMENTS

[Not including DOE’s estimates of Federal production tax credits] 

Units Base 

case 

Trial standard level 

1 2 3 4 5 

INPV ................................................................ 2008$ millions ............ 62 64 62 55 51 39 

Change in INPV .............................................. 2008$ millions* ........... ................ 2.8 0.5 (7.0) (10.2) (23.0) 

% ................................ ................ 4.50 0.76 ¥11.39 ¥16.57 ¥37.30 

Amended Energy Conservation Standards 

Equipment Conversion Expenses.

2008$ millions ............ ................ 0.00 3.12 18.72 22.56 35.87 

Amended Energy Conservation Standards 

Capital Investments.

2008$ millions ............ ................ 0.00 0.62 1.66 2.44 5.09 

Total Investment Required .............................. 2008$ millions ............ ................ 0.0 3.7 20.4 25.0 41.0 

* Parentheses indicate negative (¥) values. 

The November 2009 SNOPR discusses 

the estimated impact of amended CCW 

standards on INPV for each equipment 

class. 74 FR 57738, 57775–76 (Nov. 9, 

2009). See chapter 13 of the TSD for 

details. 

b. Cumulative Regulatory Burden 

While any one regulation may not 

impose a significant burden on 

manufacturers, the combined effects of 

several regulations may have serious 

consequences for some manufacturers, 

groups of manufacturers, or an entire 

industry. Assessing the impact of a 

single regulation may overlook this 

cumulative regulatory burden. 

DOE recognizes that each regulation 

can significantly affect manufacturers’ 

financial operations. Multiple 

regulations affecting the same 

manufacturer can reduce manufacturers’ 

profits and possibly cause 

manufacturers to exit from the market. 

DOE did not identify any additional 

DOE regulations that would affect the 

manufacturers of CCW apart from the 

ones discussed in the October 2008 

NOPR. 73 FR 62034, 62104 (Oct. 17, 

2008). These included other DOE 

regulations, State regulations, and 

international standards. For further 

information about the cumulative 

regulatory burden on the CCW industry, 

see chapter 13 of the TSD. 

c. Impacts on Employment 

To quantitatively assess the impacts 

of energy conservation standards on 

CCW manufacturing employment, DOE 

used the GRIM to estimate the domestic 

labor expenditures and number of 

employees in the base case and at each 

TSL from 2009 through 2043 for the 

CCW industry. DOE used statistical data 

from the U.S. Census Bureau’s 2006 

Annual Survey of Manufactures 38 (2006 

ASM) and 2006 Current Industry 

Report 39 (2006 CIR), the results of the 

engineering analysis, and interviews 

with manufacturers to estimate the 

inputs necessary to calculate industrywide labor expenditures and domestic 

employment levels. 

Using the GRIM, DOE calculates that 

there are 188 U.S. production workers 

in the CCW industry. Using the CIR 

data, DOE estimates that approximately 

81 percent of CCWs sold in the United 

States are manufactured domestically. 

Today’s final rule estimates the impacts 

on U.S. production workers in the CCW 

industry impacted by energy 

conservation standards as shown in 

Table VI.12. 

TABLE VI.12—CHANGE IN TOTAL NUMBER OF DOMESTIC PRODUCTION EMPLOYEES IN 2013 IN THE COMMERCIAL

CLOTHES WASHER INDUSTRY

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Total Number of Domestic Production Workers in 2013 ............................................. 188 204 204 222 224 228 

Change in Total Number of Domestic Production Workers in 2013 ........................... ................ 16 16 33 36 40 


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The November 2009 SNOPR 

discussed the estimated impacts of 

amended CCW standards on 

manufacturing employment. 74 FR 

57738, 57776–77 (Nov. 9, 2009). A 

further discussion of the potential 

impacts of amended energy 

conservation standards on 

manufacturing employment for the CCW 

industry at each TSLs are presented in 

chapter 13 of the TSD. 

d. Impacts on Manufacturing Capacity 

According to the majority of CCW 

manufacturers, amended energy 

conservation standards could 

potentially impact manufacturers’ 

production capacity depending on the 

efficiency level required. For today’s 

final rule, DOE continues to believe 

manufacturers will be able to maintain 

manufacturing capacity levels and 

continue to meet market demand under 

amended energy conservation standards 

as long as manufacturers can continue 

to offer top-loading and front-loading 

CCWs. 

As stated in the November 2009 

SNOPR, a very high efficiency standard 

for top-loading CCWs could potentially 

cause one or more manufacturer(s) to 

abandon further manufacture of toploading CCWs after the compliance date 

(due to concerns about wash quality, for 

example). Instead of manufacturing toploading CCWs, manufacturers could 

elect to switch their entire production 

over to front-loading CCWs. Since toploading and front-loading CCWs share 

few, if any parts, are built on completely 

separate assembly lines, and are built at 

very different production volumes, a 

manufacturer may not be able to make 

a platform switch from top-loading to 

front-loading CCWs without significant 

impacts on equipment development and 

capital expenses, along with capacity 

constraints. 74 FR 57738, 57777 (Nov. 9, 

2009). However, for today’s final rule, 

DOE estimates that the energy 

conservation standard in today’s final 

rule for top-loading CCWs mitigates that 

risk. 

As reported in the November 2009 

SNOPR, multiple manufacturers stated 

during interviews that front-loading 

CCWs represent a relatively small 

segment of their total production 

volumes. Depending on the 

manufacturer, front-loading production 

capacity may need to be substantially 

expanded to meet the demand that toploading production lines currently meet. 

This expansion could possibly affect 

capacity until new production lines 

come on-line to service demand. In 

addition, manufacturers stated that the 

higher prices of front-loading washers 

could lead to a decrease in shipments. 

This could lead to a permanently lower 

production capacity as machines are 

repaired and the equipment lifetime of 

existing washers is extended. 74 FR 

57738, 57777 (Nov. 9, 2009). DOE 

research continues to suggest that the 

energy conservation standards in 

today’s final rule can be achieved by all 

manufacturers using existing platforms 

and technologies; hence, there appears 

little reason for the market to wholly 

transition to front-loading CCWs. 

A further discussion of the potential 

impacts of amended energy 

conservation standards on 

manufacturing capacity for the CCW 

industry is presented in chapter 13 of 

the TSD. 

e. Impacts on Subgroups of 

Manufacturers 

As discussed in the November 2009 

SNOPR, 74 FR 57738, 57777 (Nov. 9, 

2009), DOE evaluated the impacts of 

amended energy conservation standards 

on subgroups of manufacturers. As 

outlined earlier, an LVM that 

concentrates on building laundry 

equipment will be affected 

disproportionately by any energy 

efficiency regulation regarding CCWs. 

The LVM’s business is focused mostly 

on the commercial laundry market 

segment and its total production volume 

is many times lower than its diversified 

competitors. Due to this combination of 

market concentration and size, the LVM 

is at greater risk of material harm to its 

business due to any regulation that 

affects commercial laundry products 

than its competitors, regardless of the 

TSL chosen. 

For today’s final rule, DOE 

reevaluated the CCW energy 

conservation standards proposed in the 

November 2009 SNOPR in response to 

comments received from interested 

parties. DOE continues to believe that 

the energy conservation standards 

adopted in today’s final rule greatly 

lessen the potential disadvantages faced 

by the LVM. Further details of the 

separate analysis of the impacts on the 

LVM are found in chapter 13 of the 

TSD. 

3. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

To estimate the energy savings 

through 2043 that would be expected to 

result from amended CCW energy 

conservation standards, DOE compared 

the projected energy consumption of 

CCWs under the base case to energy 

consumption of this equipment under 

each of the considered TSLs. The energy 

consumption calculated in the NIA 

takes into account energy losses in the 

generation and transmission of 

electricity as discussed in section VI.B. 

Table VI.13 and Table VI.14 show the 

forecasted national energy and water 

savings at each TSL for top-loading and 

front-loading CCWs, respectively. In 

addition to undiscounted savings, the 

tables show the magnitude of the 

estimated energy and water savings if 

the savings are discounted at 7-percent 

and 3-percent discount rates. Each TSL 

considered in this rulemaking would 

result in significant energy and water 

savings, and the amount of savings 

increases with higher energy 

conservation standards. See chapter 11 

of the TSD for details of the NIA. 

TABLE VI.13—SUMMARY OF CUMULATIVE NATIONAL ENERGY AND WATER SAVINGS FOR TOP-LOADING COMMERCIAL

CLOTHES WASHERS (2013 TO 2043) 

Trial standard level 

Undiscounted Discounted at 3% Discounted at 7% 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

1 ............................................................... 0.04 0.00 0.02 0.00 0.01 0.00 

2 ............................................................... 0.04 0.00 0.02 0.00 0.01 0.00 

3 ............................................................... 0.10 0.14 0.05 0.08 0.03 0.04 

4 ............................................................... 0.10 0.14 0.05 0.08 0.03 0.04 

5 ............................................................... 0.10 0.14 0.05 0.08 0.03 0.04 


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TABLE VI.14—CUMULATIVE NATIONAL ENERGY AND WATER SAVINGS FOR FRONT-LOADING COMMERCIAL CLOTHES

WASHERS (2013 TO 2043) 

Trial standard level 

Undiscounted 3% Discounted 7% Discounted 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

National energy savings, 

quads 

National water 

savings, trillion 

gallons 

1 ............................................................... 0.00 0.00 0.00 0.00 0.00 0.00 

2 ............................................................... 0.00 0.01 0.00 0.00 0.00 0.00 

3 ............................................................... 0.00 0.01 0.00 0.00 0.00 0.00 

4 ............................................................... 0.01 0.03 0.01 0.01 0.00 0.01 

5 ............................................................... 0.02 0.07 0.01 0.04 0.01 0.02 

b. Net Present Value of Customer Costs 

and Benefits 

The NPV of customer costs and 

benefits is a measure of the cumulative 

impact of energy conservation 

standards. In accordance with the 

OMB’s guidelines on regulatory analysis 

(OMB Circular A–4, section E, Sept. 17, 

2003), DOE calculated an estimated 

NPV using both a 7-percent and a 3- 

percent real discount rate. The 7-percent 

rate is an estimate of the average beforetax rate of return on private capital in 

the U.S. economy, and reflects the 

returns on real estate and small business 

capital as well as corporate capital. DOE 

used this discount rate to approximate 

the opportunity cost of capital in the 

private sector, since recent OMB 

analysis has found the average rate of 

return to capital to be near this rate. 

DOE also used the 3-percent rate to 

capture the potential effects of standards 

on private consumption (e.g., through 

higher prices for equipment and the 

purchase of reduced amounts of energy). 

This rate represents the rate at which 

society discounts future consumption 

flows to their present value. This rate 

can be approximated by the real rate of 

return on long-term government debt 

(i.e., yield on Treasury notes minus 

annual rate of change in the Consumer 

Price Index), which has averaged about 

3 percent on a pre-tax basis for the last 

30 years. 

Table VI.15 shows the forecasted NPV 

at each TSL for CCWs. At both 7-percent 

and 3-percent discount rates, TSLs 1 

through 5 show positive cumulative 

NPVs. The highest NPV is provided by 

TSL 5: $0.51 billion with 7-percent 

discount rate, and $1.25 billion with 3- 

percent discount rate. 

TABLE VI.15—SUMMARY OF CUMULATIVE NET PRESENT VALUE FOR COMMERCIAL CLOTHES WASHERS (IMPACTS FOR

UNITS SOLD FROM 2013 TO 2043) 

TSL 

NPV, billion 2008$ 

Top-loading Front-loading Total 

7% Discount 

rate 

3% Discount 

rate 

7% Discount 

rate 

3% Discount 

rate 

7% Discount 

rate 

3% Discount 

rate 

1 ............................................................... 0.01 0.07 0.00 0.01 0.01 0.08 

2 ............................................................... 0.01 0.07 0.01 0.03 0.02 0.10 

3 ............................................................... 0.34 0.86 0.01 0.03 0.36 0.89 

4 ............................................................... 0.34 0.86 0.07 0.17 0.41 1.03 

5 ............................................................... 0.34 0.86 0.17 0.39 0.51 1.25 

c. Impacts on Employment 

In addition to considering the direct 

employment impacts for the 

manufacturers of equipment covered by 

this rulemaking (discussed above,) DOE 

develops estimates of the indirect 

employment impacts of proposed 

standards in the economy in general. As 

noted previously, DOE expects energy 

conservation standards for CCWs to 

reduce energy bills for commercial 

customers, with the resulting net 

savings being redirected to other forms 

of economic activity. The impacts 

concern a variety of businesses not 

directly involved in the decision to 

make, operate, or pay the utility bills for 

CCWs. Thus, they are ‘‘indirect.’’ 

To estimate these indirect 

employment impacts, DOE used an 

input/output model of the U.S. economy 

using BLS data (described in section 

IV.H). In this input/output model, the 

spending of the money saved on utility 

bills when more efficient CCWs are 

deployed is centered in economic 

sectors that create more jobs than are 

lost in electric utilities when spending 

is shifted from electricity to other 

products and services. As Table VI.16 

shows, DOE estimates that net indirect 

employment impacts from the 

considered TSLs are likely to be very 

small. Furthermore, neither the BLS 

data nor the input/output model DOE 

uses include the quality or wage level of 

the jobs. 

TABLE VI.16—NET NATIONAL INDIRECT

EMPLOYMENT IMPACTS UNDER COMMERCIAL CLOTHES WASHER TSLS

TSL 

Net national 

change in jobs 

in 2043, thousands 

1 ............................................ 0.07 

2 ............................................ 0.08 

3 ............................................ 0.46 

4 ............................................ 0.52 

5 ............................................ 0.62 

4. Impact on Utility or Performance of 

Equipment 

As indicated in section II.G.1.d of the 

November 2009 SNOPR, the amended 

standards DOE is adopting today will 

not lessen the utility or performance of 

equipment under consideration in this 


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rulemaking. 74 FR 57738, 57745 (Nov. 

9, 2009). 

5. Impact of Any Lessening of 

Competition 

As discussed in the November 2009 

SNOPR, 74 FR 57738, 57779 (Nov. 9, 

2009), and in section III.D.1.e of this 

preamble, DOE considers any lessening 

of competition likely to result from 

standards. The Attorney General 

determines the impact, if any, of any 

lessening of competition. 

DOE carefully considered the 

determination received from DOJ in 

response to the October 2008 NOPR, 

and accordingly chose efficiency levels 

for the November 2009 SNOPR that 

appear achievable by all CCW 

manufacturers using existing equipment 

platforms and technologies. As such, 

DOE stated that there should be 

minimal impact on the CCW market and 

hence its manufacturers. To assist the 

Attorney General in making a 

determination for the November 2009 

SNOPR, DOE provided DOJ with copies 

of the supplemental notice and the TSD 

for review. The DOJ did not provide a 

response to the November 2009 SNOPR. 

Therefore, DOE considers the impact of 

any lessening of competition for today’s 

final rule based, in part, on the Attorney 

General’s earlier response, which is 

reprinted at the end of today’s 

rulemaking. 

6. Need of the Nation to Conserve 

Energy 

Improving the energy efficiency of 

CCWs, where economically justified, 

would likely improve the security of the 

Nation’s energy system by reducing 

overall demand for energy, potentially 

reducing the Nation’s reliance on 

foreign sources of energy. Reduced 

electricity demand would also likely 

improve the reliability of the electricity 

system, particularly during peak-load 

periods. As a measure of this reduced 

demand, DOE expects the energy 

savings from the adopted standards to 

eliminate the need for approximately 

0.010 gigawatts (GW) of generating 

capacity by 2043. 

The energy savings from the standards 

for CCWs also produce environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with energy 

production, and with use of fossil fuels 

at sites where CCWs are used. Table 

VI.17 provides DOE’s estimate of 

cumulative CO2, NOX, and Hg emissions 

reductions that would result from the 

TSLs considered in this rulemaking. In 

the environmental assessment (chapter 

16 of the TSD), DOE reports estimated 

annual changes in CO2, NOX, and Hg 

emissions attributable to each TSL. 

TABLE VI.17—CUMULATIVE EMISSIONS REDUCTIONS UNDER COMMERCIAL CLOTHES WASHER TSLS (IN 2013 TO 2043) 

Emissions 

TSL 

1 2 3 4 5 

CO2, Mt .................................................................................................... 2.36 2.39 5.07 5.66 6.11 

NOX, kt ..................................................................................................... 1.43 1.45 3.04 3.39 3.66 

Hg, t ......................................................................................................... 0.0002 0.0002 0.0003 0.0004 0.0004 

Mt = million metric tons. 

kt = thousand metric tons. 

t = metric tons. 

As discussed in section IV.J of this 

final rule, DOE does not report SO2

emissions reductions from power plants 

because there is uncertainty about the 

effect of energy conservation standards 

on the overall level of SO2 emissions in 

the United States due to SO2 emissions 

caps. DOE also did not include NOX

emissions reduction from power plants 

in States subject to CAIR because an 

energy conservation standard would 

likely not affect the overall level of NOX

emissions in those States due to the 

emissions caps mandated by CAIR. 

Table VI.18 presents the estimated 

wastewater discharge reductions due to 

the TSLs for CCWs. In chapter 16 of the 

TSD, DOE reports annual changes in 

wastewater discharge attributable to 

each TSL. 

TABLE VI.18—CUMULATIVE WASTEWATER DISCHARGE REDUCTIONS UNDER COMMERCIAL CLOTHES WASHER TRIAL

STANDARD LEVELS

[For 2013ƒ2043] 

TSL 

1 2 3 4 5 

Wastewater Discharge Reduction, trillion gallons ............... 0.00 0.01 0.14 0.16 0.21 

As discussed in section IV.J of this 

final rule, DOE estimated the 

cumulative monetary value of the 

economic benefits associated with CO2

emissions reductions expected to result 

from amended standards for CCWs. In 

considering the potential global benefits 

resulting from reduced CO2 emissions, 

DOE used values based on a social cost 

of carbon of approximately $5, $10, $20, 

$34 and $56 per metric ton avoided in 

2007 (values expressed in 2008$). DOE 

also calculated the domestic benefits 

based on a value of approximately $1 

per metric ton avoided in 2007. To 

value the CO2 emissions reductions 

expected to result from amended 

standards for CCWs in 2013–2043, DOE 

escalated the above values for 2007 

using a 3-percent escalation rate. Table 

VI.19 and Table VI.20 present the 

cumulative monetary value for each TSL 

using 7-percent and 3-percent discount 

rates, respectively. 


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TABLE VI.19—ESTIMATES OF VALUE OF CO2 EMISSIONS REDUCTIONS UNDER COMMERCIAL CLOTHES WASHER TRIAL

STANDARD LEVELS AT 7-PERCENT DISCOUNT RATE

TSL 

Estimated 

cumulative 

CO2 emission reductions, Mt 

Value of CO2 emission reductions, million 2008$ * 

Domestic Global 

CO2 Value 

$1/metric 

ton CO2

CO2 Value 

$5/metric 

ton CO2

CO2 Value 

$10/metric 

ton CO2

CO2 Value 

$20/metric 

ton CO2

CO2 Value 

$34/metric 

ton CO2

CO2 Value 

$56/metric 

ton CO2

1 ............................................................... 2.36 1 6 12 22 39 65 

2 ............................................................... 2.39 1 6 12 23 40 66 

3 ............................................................... 5.07 3 13 25 48 84 140 

4 ............................................................... 5.66 3 14 28 54 93 156 

5 ............................................................... 6.11 3 15 31 58 101 168 

* Unit values are approximate and are based on escalating 2007$ to 2008$ for consistency with other values presented in this notice. 

TABLE VI.20—ESTIMATES OF VALUE OF CO2 EMISSIONS REDUCTIONS UNDER COMMERCIAL CLOTHES WASHER TRIAL

STANDARD LEVELS AT 3-PERCENT DISCOUNT RATE

TSL 

Estimated 

cumulative 

CO2 emission reductions, Mt 

Value of CO2 emission reductions, million 2008$* 

Domestic Global 

CO2 Value 

$1/metric 

ton CO2

CO2 Value 

$5/metric 

ton CO2

CO2 Value 

$10/metric 

ton CO2

CO2 Value 

$20/metric 

ton CO2

CO2 Value 

$34/metric 

ton CO2

CO2 Value 

$56/metric 

ton CO2

1 ............................................................... 2.36 3 13 26 49 84 141 

2 ............................................................... 2.39 3 13 26 49 86 143 

3 ............................................................... 5.07 6 28 55 105 182 303 

4 ............................................................... 5.66 7 31 61 117 202 337 

5 ............................................................... 6.11 8 33 66 126 219 364 

* Unit values are approximate and are based on escalating 2007$ to 2008$ for consistency with other values presented in this notice. 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other GHG 

emissions to changes in the future 

global climate and the potential 

resulting damages to the world economy 

continues to evolve rapidly. Thus, any 

value placed in this rulemaking on 

reducing CO2 emissions is subject to 

change. DOE, together with other 

Federal agencies, will continue to 

review various methodologies for 

estimating the monetary value of 

reductions in CO2 and other GHG 

emissions. This ongoing review will 

consider the comments on this subject 

that are part of the public record for this 

and other rulemakings, as well as other 

methodological assumptions and issues. 

However, consistent with DOE’s legal 

obligations, and taking into account the 

uncertainty involved with this 

particular issue, DOE has included in 

this rule the most recent values and 

analyses resulting from the ongoing 

interagency review process. 

DOE also estimated a range for the 

cumulative monetary value of the 

economic benefits associated with NOX

and Hg emissions reductions 

anticipated to result from amended 

standards for CCWs. The dollar per ton 

values that DOE used are discussed in 

section IV.J of this final rule. Table 

VI.21 and Table VI.22 present the 

estimates calculated using 7-percent and 

3-percent discount rates, respectively. 

TABLE VI.21—ESTIMATES OF VALUE OF REDUCTIONS OF NOX AND HG EMISSIONS UNDER COMMERCIAL CLOTHES

WASHER TRIAL STANDARD LEVELS AT A 7-PERCENT DISCOUNT RATE

Commercial clothes washer TSL 

Cumulative NOX

emission reductions, kt 

Value of NOX emission reductions, 

million 2008$ 

Cumulative Hg 

emission reductions, t 

Value of Hg emission 

reductions, million 

2008$ 

1 .......................................................... 1.43 0.19 to 1.96 ........................................ 0.0002 0.00 to 0.03. 

2 .......................................................... 1.45 0.19 to 1.99 ........................................ 0.0002 0.00 to 0.03. 

3 .......................................................... 3.04 0.41 to 4.17 ........................................ 0.0003 0.00 to 0.06. 

4 .......................................................... 3.39 0.45 to 4.64 ........................................ 0.0004 0.00 to 0.07. 

5 .......................................................... 3.66 0.49 to 5.01 ........................................ 0.0004 0.00 to 0.08. 

TABLE VI.22—ESTIMATES OF VALUE OF REDUCTIONS OF NOX AND HG EMISSIONS UNDER COMMERCIAL CLOTHES

WASHER TRIAL STANDARD LEVELS AT A 3-PERCENT DISCOUNT RATE

Commercial clothes washer TSL 

Cumulative NOX

emission reductions, kt 

Value of NOX emission reductions, 

million 2008$ 

Cumulative Hg 

emission reductions, t 

Value of Hg emission 

reductions, million 

2008$ 

1 .......................................................... 1.43 0.38 to 3.92 ........................................ 0.0002 0.00 to 0.03. 


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TABLE VI.22—ESTIMATES OF VALUE OF REDUCTIONS OF NOX AND HG EMISSIONS UNDER COMMERCIAL CLOTHES

WASHER TRIAL STANDARD LEVELS AT A 3-PERCENT DISCOUNT RATE—Continued 

Commercial clothes washer TSL 

Cumulative NOX

emission reductions, kt 

Value of NOX emission reductions, 

million 2008$ 

Cumulative Hg 

emission reductions, t 

Value of Hg emission 

reductions, million 

2008$ 

2 .......................................................... 1.45 0.39 to 3.98 ........................................ 0.0002 0.00 to 0.03. 

3 .......................................................... 3.04 0.81 to 8.36 ........................................ 0.0003 0.00 to 0.06. 

4 .......................................................... 3.39 0.91 to 9.31 ........................................ 0.0004 0.00 to 0.07. 

5 .......................................................... 3.66 0.98 to 10.04 ...................................... 0.0004 0.00 to 0.07. 

The NPV of the monetized benefits 

associated with emissions reductions 

can be viewed as a complement to the 

NPV of the consumer savings calculated 

for each TSL considered in this 

rulemaking. Table VI.23 presents the 

NPV values for CCWs that would result 

if DOE were to add the low-end and 

high-end estimates of the potential 

benefits resulting from reduced CO2, 

NOX, and Hg emissions to the NPV of 

consumer savings calculated for each 

TSL considered in this rulemaking, at 

both a 7-percent and 3-percent discount 

rate. For CO2, only the low and high 

global benefit values are used for these 

tables ($5 and $56 in 2008$). 

Although adding the value of 

consumer savings to the values of 

emission reductions provides a valuable 

perspective, please note the following: 

(1) The national consumer savings are 

domestic U.S. consumer monetary 

savings found in market transactions, 

while the values of emissions 

reductions are based on ranges of 

estimates of imputed marginal social 

costs, which, in the case of CO2, are 

meant to reflect global benefits; and (2) 

the assessments of consumer savings 

and emission-related benefits are 

performed with different computer 

models, leading to different time frames 

for the analyses. For CCWs, the present 

value of national consumer savings is 

measured for the period in which units 

shipped from 2013 to 2043 continue to 

operate. However, the time frames of the 

benefits associated with the emission 

reductions differ. For example, the 

value of CO2 emissions reductions is 

meant to reflect the present value of all 

future climate-related impacts, even 

those beyond 2065. 

TABLE VI.23—ESTIMATES OF ADDING NPV OF CONSUMER SAVINGS TO NPV OF LOW- AND HIGH-END GLOBAL MONETIZED BENEFITS FROM CO2, NOX, AND HG EMISSIONS REDUCTIONS AT ALL TSLS FOR COMMERCIAL CLOTHES

WASHERS

TSL 

CO2 Value of 

$5/metric ton 

CO2 * and low 

values for NOX

and Hg ** billion 

2008$ 

CO2 Value of $56/metric ton CO2 * and high values 

for NOX and Hg *** billion 2008$ 

7-percent 

discount rate 

3-percent 

discount rate 

7-percent 

discount rate 

1 ............................................................................................................... 0.02 0.09 0.08 0.22 

2 ............................................................................................................... 0.03 0.11 0.09 0.25 

3 ............................................................................................................... 0.37 0.92 0.50 1.20 

4 ............................................................................................................... 0.42 1.06 0.57 1.38 

5 ............................................................................................................... 0.53 1.28 0.68 1.62 

* These values per ton represent the global negative externalities of CO2. 

** Low Values correspond to $442 per ton of NOX emissions and $0.745 million per ton of Hg emissions. 

*** High Values correspond to $4,540 per ton of NOX emissions and $33.3 million per ton of Hg emissions. 

7. Other Factors 

EPCA allows the Secretary of Energy, 

in determining whether a standard is 

economically justified, to consider any 

other factors that the Secretary deems to 

be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII) and 6316(a)) In 

adopting today’s amended standards, 

the Secretary found no relevant factors 

other than those identified elsewhere in 

today’s final rule. 

D. Conclusion 

EPCA contains criteria for prescribing 

new or amended energy conservation 

standards. It provides that any such 

standard for CCWs must be designed to 

achieve the maximum improvement in 

energy efficiency that the Secretary 

determines is technologically feasible 

and economically justified. (42 U.S.C. 

6295(o)(2)(A) and 42 U.S.C. 6316(a)) As 

stated above, in determining whether a 

standard is economically justified, the 

Secretary must determine whether the 

benefits of the standards exceed its 

burdens considering the seven factors 

discussed in section II.B. A 

determination of whether a standard 

level is economically justified is not 

made based on any one of these factors 

in isolation. The Secretary must weigh 

each of these seven factors in total in 

determining whether a standard is 

economically justified. Further, the 

Secretary may not establish an amended 

standard if such standard would not 

result in ‘‘significant conservation of 

energy,’’ or ‘‘is not technologically 

feasible or economically justified.’’ (42 

U.S.C. 6295(o)(3)(B) and 42 U.S.C. 

6316(a)) 

In selecting today’s energy 

conservation standards for CCWs, DOE 

started by examining the maximum 

technologically feasible levels, and 

determined whether those levels were 

economically justified. If DOE 

determined that the maximum 

technologically feasible level was not 

justified, DOE then analyzed the next 

lower TSL to determine whether that 

level was economically justified. DOE 

repeated this procedure until it 

identified an economically justified 

TSL. 

To aid the reader in understanding 

the benefits and/or burdens of each TSL, 

Table VI.24 summarizes the quantitative 

analytical results for each TSL, based on 

the assumptions and methodology 


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discussed above. These tables present 

the results—or, in some cases, a range 

of results—for each TSL. The range of 

values reported in these tables for 

industry impacts represents the results 

for the different markup scenarios that 

DOE used to estimate manufacturer 

impacts. 

In addition to the quantitative results, 

DOE also considers other burdens and 

benefits that affect economic 

justification. 

In sum, today’s standard levels for the 

equipment that is the subject of this 

rulemaking reflect DOE’s careful 

balancing of the relevant statutory 

factors under EPCA. 

TABLE VI.24—SUMMARY OF RESULTS FOR COMMERCIAL CLOTHES WASHERS

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Primary Energy Saved, quads ................................... 0.04 0.04 0.10 0.11 0.12 

7% Discount Rate ............................................... 0.01 0.01 0.03 0.03 0.03 

3% Discount Rate ............................................... 0.02 0.02 0.06 0.06 0.07 

Primary Water Saved, trillion gallons ........................ 0.00 0.01 0.14 0.16 0.21 

7% Discount Rate ............................................... 0.00 0.00 0.04 0.04 0.06 

3% Discount Rate ............................................... 0.00 0.00 0.08 0.09 0.11 

Generation Capacity Reduction, gigawatts ** ............ 0.005 0.005 0.010 0.011 0.012 

NPV of Customer Benefit, 2008$ billion: 

7% Discount Rate ............................................... 0.01 0.02 0.36 0.41 0.51 

3% Discount Rate ............................................... 0.08 0.10 0.89 1.03 1.25 

Industry Impacts: 

Industry NPV, 2008$ million ............................... 4–3 1–0 (5)–(7) (8)–(10) (20)–(23) 

Industry NPV, % change .................................... 6.0–4.5 2.2–0.8 (7.8)–(11.4) (12.7)–(16.6) (33.1)–(37.3) 

Emissions Impacts: † 

CO2, Mt ............................................................... 2.36 2.39 5.07 5.66 6.11 

NOX, kt ............................................................... 1.43 1.45 3.04 3.39 3.66 

Hg, t .................................................................... 0.0002 0.0002 0.0003 0.0004 0.0004 

Value of Emission Reductions: 

CO2, 2008$ million:†† 

7% Discount Rate ........................................ 6–65 6–66 13–140 14–156 15–168 

3% Discount Rate ........................................ 13–141 13–143 28–303 31–337 33–364 

NOX, 2008$ million: 

7% Discount Rate ........................................ 0.2–2.0 0.2–2.0 0.4–4.2 0.5–4.6 0.5–5.0 

3% Discount Rate ........................................ 0.4–3.9 0.4–4.0 0.8–8.4 0.9–9.3 1.0–10.0 

Hg, 2008$ million: 

7% Discount Rate ........................................ 0.00–0.03 0.00–0.03 0.00–0.06 0.00–0.07 0.00–0.08 

3% Discount Rate ........................................ 0.00–0.03 0.00–0.03 0.00–0.06 0.00–0.07 0.00–0.07 

Wastewater Discharge Impacts, trillion gallons ......... 0.00 0.01 0.14 0.16 0.21 

Mean LCC Savings,* 2008$: 

Top-Loading, Multi-Family .................................. (8.1) (8.1) 179 179 179 

Top-Loading, Laundromat .................................. (17.7) (17.7) 190 190 190 

Front-Loading, Multi-Family ................................ 4.7 19.5 19.5 91 203 

Front-Loading, Laundromat ................................ 5.2 22.0 22.0 93 216 

Median PBP, years: 

Top-Loading, Multi-Family .................................. 11.7 11.7 4.6 4.6 4.6 

Top-Loading, Laundromat .................................. 7.9 7.9 2.8 2.8 2.8 

Front-Loading, Multi-Family ................................ 0.0 0.4 0.4 3.0 2.9 

Front-Loading, Laundromat ................................ 0.0 0.2 0.2 1.8 1.6 

LCC Customer Impacts: 

Top-Loading: 

Multi-Family: 

Net Cost, % .......................................... 43.3 43.3 13.8 13.8 13.8 

No Impact, % ........................................ 35.3 35.3 1.2 1.2 1.2 

Net Benefit, % ...................................... 21.5 21.5 85.0 85.0 85.0 

Laundromat: 

Net Cost, % .......................................... 51.4 51.4 2.9 2.9 2.9 

No Impact, % ........................................ 35.3 35.3 1.2 1.2 1.2 

Net Benefit, % ...................................... 13.3 13.3 95.9 95.9 95.9 

Front-Loading: 

Multi-Family: 

Net Cost, % .......................................... 0.0 0.0 0.0 1.4 1.1 

No Impact, % ........................................ 96.3 96.3 96.3 23.1 0.0 

Net Benefit, % ...................................... 3.7 3.7 3.7 75.5 98.9 

Laundromat: 

Net Cost, % .......................................... 0.0 0.0 0.0 0.0 0.0 

No Impact, % ........................................ 96.3 96.3 96.3 23.1 0.0 

Net Benefit, % ...................................... 3.7 3.7 3.7 76.9 100.0 

* Parentheses indicate negative (¥) values. For LCCs, a negative value means an increase in LCC by the amount indicated. 

** Changes in installed generation capacity by 2043 based on AEO 2009 April Release Reference Case. 

† Emissions impacts include physical reductions at power plants and at buildings where the appliance is being used. 

†† Range of the economic value of CO2 reductions based on global estimates of the benefit of reduced CO2 emissions. 


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First, DOE considered TSL 5, the maxtech level. TSL 5 would likely save 0.12 

quads of energy and 0.21 trillion gallons 

of water through 2043, an amount DOE 

considers significant. DOE projects that 

TSL 5 would result in a net increase of 

$0.51 billion in NPV of customer 

benefits using a discount rate of 7 

percent, and of $1.25 billion using a 

discount rate of 3 percent. The 

emissions reductions at TSL 5 are 6.11 

Mt of CO2, 3.66 kt of NOX, and 0.0004 

t of Hg. At TSL 5, the estimated benefit 

of reducing CO2 emissions based on 

global estimates of the value of CO2

ranges from $15 million to $168 million 

at a 7-percent discount rate, and $33 

million to $364 million at a 3-percent 

discount rate. Total generating capacity 

in 2043 is estimated to decrease 

compared to the reference case by 0.012 

GW under TSL 5. 

At TSL 5, DOE projects that the 

average top-loading CCW customer 

would experience a decrease in LCC of 

$179 in multi-family applications and 

$190 in laundromats. DOE also 

estimates an LCC decrease for an 

overwhelming majority of customers 

that purchase top-loading CCWs—85 

percent of customers in multi-family 

applications and 96 percent of 

customers in laundromats. The median 

PBP of the average consumer at TSL 5 

in multi-family applications and in 

laundromats is projected to be 4.6 years 

and 2.8 years, respectively. 

At TSL 5, DOE projects that the 

average front-loading CCW consumer 

would experience a decrease in LCC of 

$203 in multi-family applications and 

$216 in laundromats. DOE also 

estimates an LCC decrease for an 

overwhelming majority of customers 

that purchase front-loading CCWs—99 

percent of customers in multi-family 

applications and 100 percent of 

customers in laundromats. The median 

PBP of the average consumer at TSL 5 

in multi-family applications and in 

laundromats is projected to be 2.9 years 

and 1.6 years, respectively. 

At TSL 5, DOE estimated the 

projected change in INPV ranges from a 

total decrease of $20.4 million for both 

equipment classes to a total decrease of 

$23.0 million. At TSL 5, DOE recognizes 

the risk of very large negative impacts 

if manufacturers’ expectations about 

reduced shipments are realized. TSL 5 

could result in a net loss as high as 37.3 

percent in INPV to CCW manufacturers. 

Also, DOE is especially sensitive to the 

potentially severe impacts to the LVM of 

CCWs. Because the LVM’s clothes 

washer revenue is so dependent on 

CCW sales, DOE is concerned that TSL 

5 will cause material harm to the LVM. 

Although DOE recognizes the 

increased economic benefits that could 

result from TSL 5, DOE has concluded 

that the benefits of a standard at TSL 5 

would be outweighed by the potential 

for disincentivizing customers from 

purchasing more efficient front-loading 

CCWs. At TSL 5, front-loading CCWs 

are highly efficient but have a purchase 

price estimated to be $497 more 

expensive than top-loading CCWs. With 

such a large price differential between 

the two types of CCWs, and with less 

than 2 percent of the front-loading 

market at TSL 5, DOE is concerned that 

significant numbers of potential 

customers of front-loading CCWs would 

choose to purchase a less efficient toploading unit. 

As described in section IV.E.2.c, DOE 

did analyze the impacts of increased 

purchase prices for each equipment 

class, but considered each 

independently of the other. Because the 

price impacts for more efficient toploaders are higher than those for more 

efficient front-loaders, DOE estimated 

that top-loading CCW sales would 

decrease slightly more rapidly than for 

front-loaders. But DOE did not have 

sufficient data to estimate the crossprice elasticity of demand between the 

two equipment classes to determine the 

extent to which customers of frontloadings CCWs would switch to less 

expensive top-loaders. 

If potential front-loading CCW 

customers did decide to switch to less 

expensive top-loading washers, the NES 

and NPV realized from TSL 5 would be 

diminished. DOE notes that in 

developing the energy savings and water 

savings estimates for TSL 5, it 

effectively held constant the ratio of 

front-loading to top-loading CCW 

shipments across the various TSLs. 

Particularly at TSL 3 to TSL 5, the 

differences in these estimates are small, 

especially at a 7-percent discount rate. 

DOE believes that the values in Table 

VI.24 represent the high end of the 

potential energy and water savings for 

these TSLs. Taking into account crossprice elasticity of demand could affect 

the anticipated energy and water 

savings of the various TSLs, and it could 

potentially result in a change in the TSL 

with the highest projected energy/water 

savings level. 

In addition, TSL 5 would adversely 

impact manufacturers’ INPV to a 

significant extent. Not only does the 

industry face a potential significant loss 

in industry INPV, but manufacturers 

would also need to make significant 

capital investments for both types of 

CCWs in order to produce both toploading and front-loading washers at the 

maximum technologically feasible 

levels. 

After carefully considering the 

analysis and weighing the benefits and 

burdens of TSL 5, the Secretary has 

reached the following conclusion: At 

TSL 5, the benefits of energy savings, 

economic benefit, and emissions 

reductions would be outweighed by the 

potential for giving customers less 

incentive to purchase high efficiency 

front-loading CCWs and the large capital 

conversion costs that could result in a 

substantial reduction in INPV for 

manufacturers. 

Next, DOE considered TSL 4. TSL 4 

would likely save 0.11 quads of energy 

and 0.16 trillion gallons of water 

through 2043, an amount DOE considers 

significant. DOE projects that TSL 4 

would result in a net increase of $0.41 

billion in NPV of customer benefits 

using a discount rate of 7 percent, and 

of $1.03 billion using a discount rate of 

3 percent. The emissions reductions at 

TSL 4 are 5.66 Mt of CO2, 3.39 kt of 

NOX, and 0.0004 t of Hg. At TSL 4, the 

estimated benefits of reducing CO2

emissions based on global estimates of 

the value of CO2 ranges from $14 

million to $156 million at a 7-percent 

discount rate and $31 million to $337 

million at a 3-percent discount rate. 

Total generating capacity in 2043 is 

estimated to decrease compared to the 

reference case by 0.011 GW under TSL 

4. 

At TSL 4, top-loading CCWs have the 

same efficiency as at TSL 5. Therefore, 

top-loading CCW customers will 

experience the same LCC impacts and 

PBPs as TSL 5. At TSL 4 for frontloading CCWs, DOE projects that the 

average front-loading CCW consumer 

would experience a decrease in LCC of 

$91 in multi-family applications and 

$93 in laundromats. DOE also estimates 

an LCC decrease for an overwhelming 

majority of customers that purchase 

front-loading CCWs—76 percent of 

customers in multi-family applications 

and 77 percent of customers in 

laundromats. The median PBP of the 

average consumer at TSL 4 in multifamily applications and in laundromats 

is projected to be 3.0 years and 1.8 

years, respectively. 

DOE estimated the projected change 

in INPV ranges from a decrease of $7.8 

million to a decrease of $10.2 million. 

At TSL 4, DOE recognizes the risk of 

very large negative impacts if 

manufacturers’ expectations about 

reduced shipments are realized. TSL 4 

could result in a net loss as high as 16.6 

percent in INPV to CCW manufacturers. 

Also, DOE is especially sensitive to the 

potentially severe impacts to the LVM. 

Since the LVM’s clothes washer revenue 


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is so dependent on CCW sales, DOE is 

concerned that TSL 4 will materially 

harm the LVM. 

Although DOE recognizes the 

increased economic benefits that could 

result from TSL 4, DOE has the same 

concerns regarding TSL 4 as for TSL 5. 

Namely, DOE has concerns as to the 

potential of TSL 4 to give customers less 

incentive to purchase more efficient 

front-loading washers. At TSL 4, frontloading CCWs are highly efficient but 

have a purchase price estimated to be 

$454 more expensive than top-loading 

washers. With such a price differential 

between the two types of CCWs, and 

with less than 4 percent of the frontloading market currently meeting TSL 4, 

DOE is concerned that a significant 

number of potential customers of frontloading CCWs would be more likely to 

purchase a top-loading CCW, which is 

less efficient. If potential front-loading 

CCW customers did decide to switch to 

top-loading models, the NES and NPV 

realized from TSL 4 would be 

diminished. 

In addition, TSL 4 would adversely 

impact manufacturers’ INPV to a 

significant extent. Not only does the 

industry face a potential loss in industry 

INPV, but manufacturers would also 

need to make significant capital 

investments for both types of CCWs in 

order to produce both top-loading 

washers at the maximum 

technologically feasible level and frontloading washers at a level which only 3 

percent of the market currently meets. 

After carefully considering the 

analysis and weighing the benefits and 

burdens of TSL 4, the Secretary has 

reached the following conclusion: At 

TSL 4, the benefits of energy savings, 

economic benefit, and emissions 

reductions would be outweighed by the 

potential for giving customers less 

incentive to purchase high efficiency 

front-loading CCWs and the large capital 

conversion costs that could result in a 

substantial reduction in INPV for 

manufacturers. 

Next, DOE considered TSL 3. TSL 3 

would likely save 0.10 quads of energy 

and 0.14 trillion gallons of water 

through 2043, an amount DOE considers 

significant. DOE projects that TSL 3 

would result in a net increase of $0.36 

billion in NPV of customer benefits 

using a discount rate of 7 percent, and 

of $0.89 billion using a discount rate of 

3 percent. The emissions reductions at 

TSL 3 are 5.07 Mt of CO2, 3.04 kt of 

NOX, and 0.0003 t of Hg. The estimated 

benefits of reducing CO2 emissions 

based on global estimates of the value of 

CO2 ranges from $13 million to $140 

million at a 7-percent discount rate, and 

$28 million to $303 million at a 3- 

percent discount rate. Total generating 

capacity in 2043 is estimated to 

decrease compared to the reference case 

by 0.010 GW under TSL 3. 

At TSL 3, top-loading CCWs have the 

same efficiency as at TSL 5. Therefore, 

top-loading CCW customers would 

experience the same LCC impacts and 

PBPs as TSL 5. At TSL 3 for frontloading CCWs, DOE projects that the 

average front-loading CCW consumer 

would experience a decrease in LCC of 

$19 in multi-family applications and 

$22 in laundromats. DOE also estimates 

an LCC decrease for all customers that 

do not already purchase front-loading 

CCWs with an efficiency meeting TSL 3. 

The median PBP of the average 

consumer at TSL 3 in multi-family 

applications and in laundromats is 

projected to be 0.4 years and 0.2 years, 

respectively. 

DOE estimated the projected change 

in INPV ranges from a decrease of $4.8 

million to a decrease of $7.0 million. At 

TSL 3, DOE recognizes the risk of very 

large negative impacts if manufacturers’ 

expectations about reduced shipments 

are realized. TSL 3 could result in a net 

loss as high as 11.4 percent in INPV to 

CCW manufacturers. Also, DOE is 

especially sensitive to the potential 

adverse impacts to the LVM. Since the 

LVM’s clothes washer revenue is so 

dependent on CCW sales, DOE is 

concerned that TSL 3 could 

disproportionately impact the LVM. 

DOE recognizes the increased 

economic benefits that could result from 

TSL 3. DOE still has concerns of the 

potential for giving customers less 

incentive to purchase more efficient 

front-loading washers, but at TSL 3, the 

price difference between front-loading 

and top-loading CCWs drops to $414. 

Given that DOE projects that the average 

front-loading CCW consumer would 

experience an LCC savings at TSL 3, 

DOE believes that most front-loading 

CCW customers not already purchasing 

washers at TSL 3 would likely continue 

to purchase a front-loading unit if 

standards are set at TSL 3. DOE notes 

that TSL 3 adversely impacts 

manufacturers’ INPV, but because such 

a large percentage of the front-loading 

market is already at TSL 3, 

manufacturers would likely not need to 

make significant capital investments for 

front-loading CCWs. Product 

development and conversion expenses 

and capital investments would only be 

required in order to produce higher 

efficiency top-loading washers at TSL 3. 

After considering the analysis and 

weighing the benefits and the burdens, 

DOE has concluded that the benefits of 

a TSL 3 standard outweigh the burdens. 

In particular, the Secretary has 

concluded that TSL 3 saves a significant 

amount of energy and is technologically 

feasible and economically justified. 

Further, benefits from carbon dioxide 

reductions (at a central value of $20) 

would increase NPV by $48 million 

(2008$) at a 7% discount rate and $105 

million at a 3% discount rate. These 

benefits from carbon dioxide emission 

reductions, when considered in 

conjunction with the consumer savings 

NPV and other factors described above 

support DOE’s conclusion that TSL 3 is 

economically justified. Therefore, DOE 

establishes TSL 3 as the energy 

conservation standards for CCWs in this 

final rule. Table VI.25 lists today’s 

energy conservation standards for 

CCWs. DOE’s amended energy 

conservation standards for CCWs at TSL 

3 reflect its conclusion that this 

standard level would minimize the 

potential adverse impacts on the LVM 

and, therefore, would also minimize the 

adverse impacts on CCW market 

competition. 

TABLE VI.25—AMENDED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL CLOTHES WASHERS

Equipment class Amended energy conservation standards 

Top-Loading ........................................................................................................................... 1.60 Modified Energy Factor/8.5 Water Factor. 

Front-Loading ......................................................................................................................... 2.00 Modified Energy Factor/5.5 Water Factor. 

DOE also calculated the annualized 

values for certain benefits and costs 

under the considered TSLs. The 

annualized values refer to consumer 

operating cost savings, consumer 

incremental product and installation 

costs, the quantity of emissions 

reductions for CO2, NOX, and Hg, and 

the monetary value of CO2 emissions 

reductions (using a value of $20/t CO2,

which is in the middle of the values 

considered by DOE for valuing the 


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potential global benefits resulting from 

reduced CO2 emissions). 

DOE used a two-step calculation 

process to convert the time-series of 

costs and benefits into annualized 

values. First, DOE calculated a present 

value for the time-series of costs and 

benefits using a discount rate of either 

3 or 7 percent. From the present value, 

DOE then calculated the fixed annual 

payment over the analysis time period 

(2013 to 2043) that yielded the same 

present value. The fixed annual 

payment is the annualized value. 

Although DOE calculated annualized 

values, this does not imply that the 

time-series of cost and benefits from 

which the annualized values were 

determined are a steady stream of 

payments. 

Table VI.26 presents the annualized 

values for each TSL considered for 

CCWs. The tables also present the 

annualized net benefit resulting from 

summing the two monetary benefits and 

subtracting the consumer incremental 

product and installation costs. Although 

summing the value of operating savings 

with the value of CO2 reductions 

provides a valuable perspective, please 

note the following. The operating cost 

savings are domestic U.S. consumer 

monetary savings found in market 

transactions while the CO2 value is 

based on an estimate of imputed 

marginal SCC, which is meant to reflect 

the global benefits of CO2 reductions. In 

addition, the SCC value considers a 

longer time frame than the period 

considered for operating cost savings. 

TABLE VI.26—ANNUALIZED BENEFITS AND COSTS FOR COMMERCIAL CLOTHES WASHERS BY TRIAL STANDARD LEVEL

TSL Category Unit 

Primary estimate 

(AEO reference 

case) 

Low estimate 

(AEO low 

growth case) 

High estimate 

(high 

growth case) 

7% 3% 7% 3% 7% 3% 

1 .......... Benefits 

Monetized Operating Cost Savings ... Million 2008$ .......... 12 .75 15 .32 11 .25 13 .46 14 .63 17 .70 

Quantified Emissions Reductions ...... CO2, Mt .................. 0 .07 0 .07 0 .07 0 .07 0 .07 0 .07 

NOX, kt .................. 0 .041 0 .044 0 .041 0 .044 0 .041 0 .044 

Hg, t ....................... 0 .000 0 .000 0 .000 0 .000 0 .000 0 .000 

Monetized Avoided CO2 Value (at 

$20/t).

Million 2008$ .......... 2 .35 2 .73 2 .35 2 .73 2 .35 2 .73 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ......... 11 .44 11 .06 10 .67 10 .19 12 .01 11 .65 

Net Benefits 

Monetized Value ................................ Million 2008$ .......... 3 .66 6 .99 2 .93 6 .01 4 .97 8 .79 

2 .......... Benefits 

Monetized Operating Cost Savings ... Million 2008$ .......... 13 .98 16 .79 12 .43 14 .86 15 .90 19 .23 

Quantified Emissions Reductions ...... CO2, Mt .................. 0 .07 0 .07 0 .07 0 .07 0 .07 0 .07 

NOX, kt .................. 0 .042 0 .045 0 .042 0 .045 0 .042 0 .045 

Hg, t ....................... 0 .000 0 .000 0 .000 0 .000 0 .000 0 .000 

Monetized Avoided CO2 Value (at 

$20/t).

Million 2008$ .......... 2 .38 2 .77 2 .38 2 .77 2 .38 2 .77 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ......... 11 .49 11 .11 10 .72 10 .23 12 .06 11 .70 

Net Benefits 

Monetized Value ................................ Million 2008$ .......... 4 .87 8 .45 4 .09 7 .40 6 .22 10 .30 

3 .......... Benefits 

Monetized Operating Cost Savings ... Million 2008$ .......... 60 .62 72 .82 54 .87 65 .33 66 .59 80 .43 

Quantified Emissions Reductions ...... CO2, Mt .................. 0 .14 0 .16 0 .14 0 .16 0 .14 0 .16 

NOX, kt .................. 0 .087 0 .094 0 .087 0 .094 0 .087 0 .094 

Hg, t ....................... 0 .001 0 .001 0 .001 0 .001 0 .001 0 .001 

Monetized Avoided CO2 Value (at 

$20/t).

Million 2008$ .......... 5 .05 5 .88 5 .05 5 .88 5 .05 5 .88 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ......... 23 .44 22 .67 21 .85 20 .87 24 .61 23 .87 

Net Benefits 


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TABLE VI.26—ANNUALIZED BENEFITS AND COSTS FOR COMMERCIAL CLOTHES WASHERS BY TRIAL STANDARD LEVEL— 

Continued 

TSL Category Unit 

Primary estimate 

(AEO reference 

case) 

Low estimate 

(AEO low 

growth case) 

High estimate 

(high 

growth case) 

7% 3% 7% 3% 7% 3% 

Monetized Value ................................ Million 2008$ .......... 42 .23 56 .04 38 .07 50 .34 47 .04 62 .44 

4 .......... Benefits 

Monetized Operating Cost Savings ... Million 2008$ .......... 68 .83 82 .66 62 .65 74 .62 75 .33 90 .94 

Quantified Emissions Reductions ...... CO2, Mt .................. 0 .16 0 .17 0 .16 0 .17 0 .16 0 .17 

NOX, kt .................. 0 .097 0 .105 0 .097 0 .105 0 .097 0 .105 

Hg, t ....................... 0 .001 0 .001 0 .001 0 .001 0 .001 0 .001 

Monetized Avoided CO2 Value (at 

$20/t).

Million 2008$ .......... 5 .63 6 .56 5 .63 6 .56 5 .63 6 .56 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ......... 25 .45 24 .62 23 .81 22 .75 26 .67 25 .87 

Net Benefits 

Monetized Value ................................ Million 2008$ .......... 49 .01 64 .60 44 .47 58 .43 54 .29 71 .63 

5 .......... Benefits 

Monetized Operating Cost Savings ... Million 2008$ .......... 81 .19 97 .52 74 .46 88 .77 88 .24 106 .51 

Quantified Emissions Reductions ...... CO2, Mt .................. 0 .17 0 .19 0 .17 0 .19 0 .17 0 .19 

NOX, kt .................. 0 .105 0 .113 0 .105 0 .113 0 .105 0 .113 

Hg, t ....................... 0 .001 0 .001 0 .001 0 .001 0 .001 0 .001 

Monetized Avoided CO2 Value (at 

$20/t).

Million 2008$ .......... 6 .08 7 .08 6 .08 7 .08 6 .08 7 .08 

Costs 

Monetized Incremental Product and 

Installation Costs.

Million 2008$ ......... 28 .19 27 .26 26 .47 25 .30 29 .47 28 .57 

Net Benefits 

Monetized Value ................................ Million 2008$ .......... 59 .08 77 .34 54 .08 70 .55 64 .86 85 .02 

VII. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Order 12866 

Executive Order 12866 requires that 

each agency identify in writing the 

problem the agency intends to address 

that warrants new agency action 

(including, where applicable, the 

failures of private markets or public 

institutions), as well as assess the 

significance of that problem to 

determine whether any new regulation 

is necessary. Executive Order 12866, 

section 1(b)(1). 

Because today’s regulatory action is a 

‘‘significant regulatory action’’ under 

section 3(f)(1) of Executive Order 12866, 

section 6(a)(3) of the Executive Order 

requires DOE to prepare and submit for 

review to the Office of Information and 

Regulatory Affairs (OIRA) in OMB an 

assessment of the costs and benefits of 

today’s rule. Accordingly, DOE 

presented to the Office of Information 

and Regulatory Affairs (OIRA) in the 

Office of Management and Budget for 

review the draft final rule and other 

documents prepared for this 

rulemaking, including a regulatory 

impact analysis (RIA). These documents 

are included in the rulemaking record 

and are available for public review in 

the Resource Room of the Building 

Technologies Program, 950 L’Enfant 

Plaza, SW., 6th Floor, Washington, DC, 

20024, (202) 586–2945, between 9 a.m. 

and 4 p.m. Monday through Friday, 

except Federal holidays. 

The Executive Order requires each 

agency to identify the problem the 

agency intends to address that warrants 

new agency action (including, where 

applicable, the failures of private 

markets or public institutions), as well 

as to assess the significance of that 

problem in evaluating whether any new 

regulation is warranted. E.O. 12866, 

section 1(b)(1). 

DOE believes that there is a lack of 

consumer information and/or 

information processing capability about 

energy efficiency opportunities in the 

CCW market. If this is the case, DOE 

would expect the energy efficiency for 

CCWs to be randomly distributed across 

key variables such as energy prices and 

usage levels. DOE is not able to correlate 

the consumer’s usage pattern and energy 

price with the efficiency of the 

purchased equipment, however. In the 

October 2008 NOPR, DOE sought data 

on the efficiency levels of existing 

CCWs by how often they are used and 

their associated energy prices (and/or 

geographic regions of the country). 73 

FR 62034, 62123 (Oct. 17, 2008). DOE 

received no such data from interested 

parties. Therefore, DOE was unable to 

test for today’s final rule the extent to 

which purchasers of CCWs behave as if 

they lack information about the costs 

associated with CCW energy 


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consumption and/or the benefits of 

more-efficient equipment. 

In addition, this rulemaking addresses 

the problem that certain external 

benefits resulting from improved energy 

efficiency of CCWs are not captured by 

the users of such equipment and thus 

may not play a role in their purchase 

decisions. These benefits include 

externalities related to environmental 

protection and energy security, such as 

reduced emissions of greenhouse gases. 

The TSLs that DOE evaluated resulted 

in CO2, NOX, and Hg emissions 

reductions. DOE also determined a 

range of possible monetary benefits 

associated with the emissions 

reductions. DOE considered both the 

emissions reductions and their possible 

monetary benefit in determining the 

economic feasibility of the TSLs. 

The November 2009 SNOPR 

contained a summary of the RIA, which 

evaluated the extent to which major 

alternatives to standards for CCWs 

could achieve significant energy savings 

at reasonable cost, as compared to the 

effectiveness of the proposed rule. The 

complete RIA (Regulatory Impact 

Analysis for Proposed Energy 

Conservation Standards for Commercial 

Clothes Washers) is contained in the 

TSD prepared for today’s rule. The RIA 

consists of (1) a statement of the 

problem addressed by this regulation, 

and the mandate for government action; 

(2) a description and analysis of the 

feasible policy alternatives to this 

regulation; (3) a quantitative comparison 

of the impacts of the alternatives; and 

(4) the national economic impacts of 

today’s standards. 

As shown in Table VII.1 below, DOE 

identified the following major policy 

alternatives for achieving increased 

energy efficiency in CCWs: 

(1) No new regulatory action; 

(2) Financial incentives; 

(3) Consumer rebates; 

(4) Consumer tax credits; 

(5) Manufacturer tax credits; 

(6) Voluntary energy efficiency 

targets; 

(7) Bulk government purchases; 

(8) Early replacement; and 

(9) Today’s approach (national 

performance standards). 

TABLE VII.1—NON-REGULATORY ALTERNATIVES TO COMMERCIAL CLOTHES WASHER STANDARDS

Policy alternatives 

Energy 

savings,* 

quads 

Water 

savings, 

trillion 

gallons 

Net present value**

billion 2008$ 

7% 

Discount 

rate 

3% 

Discount 

rate 

No New Regulatory Action .............................................................................................. 0 0 0 0 

Consumer Rebates .......................................................................................................... 0.06 0.07 0.18 0.47 

Consumer Tax Credits ..................................................................................................... 0.01 0.01 0.03 0.08 

Manufacturer Tax Credits ................................................................................................ 0.00 0.01 0.02 0.06 

Voluntary Energy Efficiency Targets *** .......................................................................... 0.02 0.02 0.06 0.15 

Early Replacement .......................................................................................................... 0.01 0.01 0.11 0.17 

Bulk Government Purchases *** ...................................................................................... 0.00 0.01 0.02 0.04 

Today’s Standards at TSL 3 ............................................................................................ 0.10 0.14 0.36 0.89 

* Energy savings are in source quads. 

** DOE determined the net present value for shipments in 2013–2043. ***Voluntary energy efficiency target and bulk government purchase alternatives are not considered for front-loading washers because the percentage of the market at TSL 3 is well over the market adoption target level that each alternative strives to attain. 

The net present value amounts shown 

in Table VII.1 refer to the NPV for CCW 

consumers. The costs to the government 

of each policy (such as rebates or tax 

credits) are not included in the costs for 

the NPV since, on balance, consumers 

would be both paying for (through 

taxes) and receiving the benefits of the 

payments. As explained in detail in 

section VI of the November 2009 

SNOPR, none of the alternatives DOE 

examined would save as much energy or 

have an NPV as high as the proposed 

standards. The same conclusion applies 

to the standards in today’s rule. Also, 

several of the alternatives would require 

new enabling legislation, because DOE 

does not have authority to implement 

those alternatives. Additional detail on 

the regulatory alternatives is found in 

the RIA chapter in the TSD. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis (IRFA) for any rule that by law 

must be proposed for public comment, 

and a final regulatory flexibility analysis 

(FRFA) for any such rule that an agency 

adopts as a final rule, unless the agency 

certifies that the rule, if promulgated, 

will not have a significant economic 

impact on a substantial number of small 

entities. A regulatory flexibility analysis 

examines the impact of the rule on 

small entities and considers alternative 

ways of reducing negative impacts. 

Also, as required by Executive Order 

13272, Proper Consideration of Small 

Entities in Agency Rulemaking, 67 FR 

53461 (Aug. 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of General 

Counsel’s Web site: http:// 

www.gc.doe.gov. 

For the manufacturers of equipment 

covered by this rulemaking, the SBA has 

set two size thresholds that define 

which entities are ‘‘small businesses’’ for 

the purposes of the statute. See http:// 

www.sba.gov/idc/groups/public/ 

documents/sba_homepage/ 

serv_sstd_tablepdf.pdf. Because all CCW 

manufacturers also produce RCWs, 

limits for both categories are presented 

in Table VII.2. DOE used these small 

business definitions to determine 

whether any small entities would be 

required to comply with the rule. (65 FR 

30836, 30848 (May 15, 2000), as 

amended at 65 FR 53533, 53544 

(September 5, 2000) and codified at 13 

CFR Part 121.) The size standards are 

listed by NAICS code and industry 

description. 


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TABLE VII.2—SBA AND NAICS CLASSIFICATION OF SMALL BUSINESSES POTENTIALLY AFFECTED BY THIS RULE

Industry description Revenue limit Employee limit NAICS 

Residential Laundry Equipment Manufacturing ............................................................ N/A ................................... 1,000 335224 

Commercial Laundry Equipment Manufacturing .......................................................... N/A ................................... 500 333312 

As explained in the November 2009 

SNOPR, the CCW industry consists of 

three principal competitors that make 

up almost 100 percent of the market 

share. Two of them are high-volume, 

diversified appliance manufacturers, 

while the third is a focused laundry 

equipment manufacturer. Before issuing 

November 2009 SNOPR, DOE 

interviewed all major CCW 

manufacturers. Because all CCW 

manufacturers also make RCWs, DOE 

also considered whether a CCW 

manufacturer could be considered a 

small business entity in that industry. 

None of the CCW manufacturers fall 

into any small business category. As a 

result, DOE certifies that today’s final 

rule will not have a significant impact 

on a substantial number of small entities 

and that a regulatory flexibility analysis 

is not required. 

C. Review Under the Paperwork 

Reduction Act 

DOE stated in the October 2008 NOPR 

that this rulemaking would impose no 

new information and recordkeeping 

requirements, and that OMB clearance 

is not required under the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.). 

73 FR 62034, 62130 (Oct. 17, 2008). 

DOE received no comments on this in 

response to the October 2008 NOPR or 

the November 2009 SNOPR, and, as 

with the proposed rule, today’s final 

rule imposes no information and 

recordkeeping requirements. Therefore, 

DOE has taken no further action in this 

rulemaking with respect to the 

Paperwork Reduction Act. 

D. Review Under the National 

Environmental Policy Act 

DOE prepared an environmental 

assessment of the impacts of today’s 

standards which it published as chapter 

16 within the TSD for the final rule. 

DOE found the environmental effects 

associated with today’s various standard 

levels for CCWs to be insignificant. 

Therefore, DOE is issuing a FONSI 

pursuant to NEPA (42 U.S.C. 4321 et 

seq.), the regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and DOE’s regulations for 

compliance with NEPA (10 CFR part 

1021). The FONSI is available in the 

docket for this rulemaking. 

E. Review Under Executive Order 13132 

DOE reviewed this rule pursuant to 

Executive Order 13132, ‘‘Federalism,’’ 64 

FR 43255 (Aug. 4, 1999), which imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have Federalism implications. In 

accordance with DOE’s statement of 

policy describing the intergovernmental 

consultation process it will follow in the 

development of regulations that have 

federalism implications, 65 FR 13735 

(March 14, 2000), DOE examined the 

November 2009 proposed rule and 

determined that it would not have a 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 74 FR 57738, 

57798 (Nov. 9, 2009). DOE received no 

comments on this issue in response to 

the November 2009 SNOPR, and its 

conclusions on this issue are the same 

for the final rule as they were for the 

proposed rule. Therefore, DOE has taken 

no further action in today’s final rule 

with respect to Executive Order 13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform’’ (61 FR 4729 (Feb. 7, 1996)) 

imposes on Federal agencies the general 

duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. Section 3(b) of 

Executive Order 12988 specifically 

requires that Executive agencies make 

every reasonable effort to ensure that the 

regulation: (1) Clearly specifies the 

preemptive effect, if any; (2) clearly 

specifies any effect on existing Federal 

law or regulation; (3) provides a clear 

legal standard for affected conduct 

while promoting simplification and 

burden reduction; (4) specifies the 

retroactive effect, if any; (5) adequately 

defines key terms; and (6) addresses 

other important issues affecting clarity 

and general draftsmanship under any 

guidelines issued by the Attorney 

General. Section 3(c) of Executive Order 

12988 requires Executive agencies to 

review regulations in light of applicable 

standards in section 3(a) and section 

3(b) to determine whether they are met 

or it is unreasonable to meet one or 

more of them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, today’s 

final regulations meet the relevant 

standards of Executive Order 12988. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

As indicated in the November 2009 

SNOPR, DOE reviewed the proposed 

rule under title II of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4) (UMRA), which imposes 

requirements on Federal agencies when 

their regulatory actions will have certain 

types of impacts on State, local and 

Tribal governments and the private 

sector. 74 FR 57738, 57798–99 (Nov. 9, 

2009). For a proposed regulatory action 

likely to result in a rule that may cause 

the expenditure by State, local, and 

Tribal governments, in the aggregate, or 

by the private sector of $100 million or 

more in any one year (adjusted for 

inflation), section 202 of UMRA requires 

an agency to publish a written statement 

assessing the costs, benefits, and other 

effects of the rule on the national 

economy. (2 U.S.C. 1532(a), (b)) The 

UMRA also requires a Federal agency to 

develop an effective process to permit 

timely input by elected officers of State, 

local, and Tribal governments on a 

proposed ‘‘significant intergovernmental 

mandate,’’ and requires an agency plan 

for giving notice and opportunity for 

timely input to potentially affected 

small governments before establishing 

any requirements that might 

significantly or uniquely affect small 

governments. On March 18, 1997, DOE 

published a statement of policy on its 

process for intergovernmental 

consultation under UMRA (62 FR 

12820) (also available at http:// 

www.gc.doe.gov). Although today’s final 

rule does not contain a Federal 

intergovernmental mandate, it may 

impose expenditures of $100 million or 

more on the private sector, although 

DOE believes such expenditures are 

likely to be less than $50 million. 

Section 202 of UMRA authorizes an 

agency to respond to the content 


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requirements of UMRA in any other 

statement or analysis that accompanies 

the supplemental notice. 2 U.S.C. 

1532(c). The content requirements of 

section 202(b) of UMRA relevant to a 

private sector mandate substantially 

overlap the economic analysis 

requirements that apply under section 

325(o) of EPCA and Executive Order 

12866. The Supplementary Information 

section of this supplemental notice and 

the ‘‘Regulatory Impact Analysis’’ 

section of the SNOPR TSD respond to 

those requirements. 

Under section 205 of UMRA, DOE is 

obligated to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating a rule 

for which a written statement under 

section 202 is required. DOE is required 

to select from those alternatives the 

most cost-effective and least 

burdensome alternative that achieves 

the objectives of the rule unless DOE 

publishes an explanation for doing 

otherwise or the selection of such an 

alternative is inconsistent with law. As 

required by 42 U.S.C. 6295(h) and (o), 

6313(e), and 6316(a), today’s final rule 

would establish energy conservation 

standards for CCWs that are designed to 

achieve the maximum improvement in 

energy efficiency that DOE has 

determined to be both technologically 

feasible and economically justified. A 

full discussion of the alternatives 

considered by DOE is presented in the 

‘‘Regulatory Impact Analysis’’ section of 

the TSD for today’s final rule. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

DOE determined that, for this 

rulemaking, it need not prepare a 

Family Policymaking Assessment under 

section 654 of the Treasury and General 

Government Appropriations Act, 1999 

(Pub. L. 105–277). Id. DOE received no 

comments concerning section 654 in 

response to the November 2009 SNOPR, 

and, therefore, takes no further action in 

today’s final rule with respect to this 

provision. 

I. Review Under Executive Order 12630 

DOE determined, under Executive 

Order 12630, ‘‘Governmental Actions 

and Interference with Constitutionally 

Protected Property Rights,’’ 53 FR 8859 

(March 18, 1988), that today’s rule 

would not result in any takings which 

might require compensation under the 

Fifth Amendment to the U.S. 

Constitution. 73 FR 62034, 62131 (Oct. 

17, 2008). DOE received no comments 

concerning Executive Order 12630 in 

response to the October 2008 NOPR or 

November 2009 SNOPR, and, therefore, 

has taken no further action in today’s 

final rule with respect to this Executive 

Order. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of the Treasury and 

General Government Appropriations 

Act, 2001 (44 U.S.C. 3516 note) provides 

for agencies to review most 

disseminations of information to the 

public under guidelines established by 

each agency pursuant to general 

guidelines issued by OMB. The OMB 

guidelines were published at 67 FR 

8452 (Feb. 22, 2002), and DOE’s 

guidelines were published at 67 FR 

62446 (Oct. 7, 2002). DOE has reviewed 

today’s final rule under the OMB and 

DOE guidelines and has concluded that 

it is consistent with applicable policies 

in those guidelines. 

K. Review Under Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001) requires Federal agencies to 

prepare and submit to the OIRA a 

Statement of Energy Effects for any 

significant energy action. For the 

October 2008 NOPR, DOE determined 

that the proposed rule, which set energy 

conservation standards for commercial 

clothes washers, was not a ‘‘significant 

energy action’’ within the meaning of 

Executive Order 13211. 73 FR 62034, 

62132 (Oct. 17, 2008). The rule was also 

not designated as such by OIRA. 

Accordingly, it did not prepare a 

Statement of Energy Effects on that 

proposed rule. DOE received no 

comments on this issue in response to 

the October 2008 NOPR. As with the 

October 2008 NOPR, DOE has 

concluded that today’s final rule is not 

a significant energy action within the 

meaning of Executive Order 13211, and 

OIRA has not designated the rule as 

such. As a result, DOE has not prepared 

a Statement of Energy Effects on the 

final rule. 

L. Review Under the Information 

Quality Bulletin for Peer Review 

On December 16, 2004, the OMB, in 

consultation with the Office of Science 

and Technology, issued its Final 

Information Quality Bulletin for Peer 

Review (the Bulletin). 70 FR 2664 (Jan. 

14, 2005). The purpose of the Bulletin 

is to enhance the quality and credibility 

of the Government’s scientific 

information. The Bulletin establishes 

that certain scientific information shall 

be peer reviewed by qualified specialists 

before it is disseminated by the Federal 

Government. As indicated in the 

November 2009 SNOPR, this includes 

influential scientific information related 

to agency regulatory actions, such as the 

analyses in this rulemaking. 74 FR 

57738, 57799 (Nov. 9, 2009). 

As more fully set forth in the 

November 2009 SNOPR, DOE held 

formal in-progress peer reviews of the 

types of analyses and processes that 

DOE has used to develop the energy 

conservation standards in today’s rule, 

and issued a report on these peer 

reviews. The report is available at 

http://www.eere.energy.gov/buildings/ 

appliance_standards/peer_review.html. 

Id. 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

submit to Congress a report regarding 

the issuance of today’s final rule prior 

to the effective date set forth at the 

outset of this notice. The report will 

state that it has been determined that 

the rule is a ‘‘major rule’’ as defined by 

5 U.S.C. 804(2). DOE also will submit 

the supporting analyses to the 

Comptroller General in the U.S. 

Government Accountability Office 

(GAO) and make them available to each 

House of Congress. 

VIII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s final rule. 

List of Subjects in 10 CFR Part 431 

Administrative practice and 

procedure, Energy conservation, 

Household appliances. 

Issued in Washington, DC, on December 

18, 2009. 

Cathy Zoi, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

■ For the reasons stated in the preamble, 

chapter II, subchapter D, of title 10 of 

the Code of Federal Regulations, part 

431 is amended to read as set forth 

below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Section 431.156 of subpart I is 

revised to read as follows: 

§ 431.156 Energy and water conservation 

standards and effective dates. 

Each CCW manufactured on or after 

January 8, 2013, shall have a modified 


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energy factor no less than and a water 

factor no greater than: 

Equipment class 

Modified energy 

factor, 

cu. ft./kWh/cycle 

Water factor, 

gal./cu. ft./cycle 

Top-Loading ..................................................................................................................................................... 1.60 8.5 

Front-Loading ................................................................................................................................................... 2.00 5.5 

Appendix 

[The following letter from the Department of 

Justice will not appear in the Code of Federal 

Regulations.] 

DEPARTMENT OF JUSTICE

Antitrust Division 

DEBORAH A. GARZA

Acting Assistant Attorney General 

Main Justice Building, 950 Pennsylvania 

Avenue, NW., Washington, DC 20530– 

0001, (202) 514–2401/(202) 616–2645 

(Fax), E-mail: antitrust@usdoj.gov, Web 

site: http://www.usdoj.gov/atr. 

December 16, 2008. 

Warren Belmar, Esq., Deputy General 

Counsel for Energy Policy, Department of 

Energy, Washington, DC 20585. 

Dear Deputy General Counsel Belmar: I am 

responding to your October 1, 2008, letter 

seeking the views of the Attorney General 

about the potential impact on competition of 

proposed amended energy conservation 

standards for residential kitchen ranges and 

ovens, microwave ovens, and commercial 

clothes washers (CCWs). Your request was 

submitted under Section 325(0)(2)(B)(i)(V) of 

the Energy Policy and Conservation Act, as 

amended, (‘‘ECPA’’), 42 U.S.C. 

§ 6295(0)(B)(i)(V), which requires the 

Attorney General to make a determination of 

the impact of any lessening of competition 

that is likely to result from the imposition of 

proposed energy conservation standards. The 

Attorney General’s responsibility for 

responding to requests from other 

departments about the effect of a program on 

competition has been delegated to the 

Assistant Attorney General for the Antitrust 

Division in 28 CFR § 0.40(g). 

In conducting its analysis the Antitrust 

Division examines whether a proposed 

standard may lessen competition, for 

example, by substantially limiting consumer 

choice, leaving consumers with fewer 

competitive alternatives, placing certain 

manufacturers of a product at an unjustified 

competitive disadvantage compared to other 

manufacturers, or by inducing avoidable 

inefficiencies in production or distribution of 

particular products. 

We have reviewed the proposed standards 

contained in the Notice of Proposed 

Rulemaking (73 Fed. Reg. 62034, October 17, 

2008) and supplementary information 

submitted to the Attorney General. We also 

attended the November 13 public meeting on 

the proposed standards and conducted 

interviews with industry members. Based on 

this review, we have determined that 

legitimate issues arise as to whether the 

proposed standards adversely effect 

competition and consumer choice with 

respect to (1) gas cooking products with 

standing pilot lights and (2) top-loading 

CCWs. 

The proposed standards would extend the 

ban on constant burning pilot lights, 

currently applicable to cooking appliances 

equipped with electrical supply cords, to 

appliances that are not equipped with 

electrical supply cords. As the notice 

regarding the proposed standards recognizes, 

certain consumers, including those with 

religious and cultural practices that prohibit 

the use of line electricity, those without 

access to line electricity, and those whose 

kitchens do not have appropriate electrical 

outlets, rely on gas cooking appliances with 

standing pilots in lieu of electrical ignition 

devices. For these consumers, gas cooking 

appliances with electronic ignition are not a 

reasonable substitute. The notice states that 

gas cooking appliances may become available 

with technological options such as batterypowered ignition to replace a standing pilot 

light. However, it is unclear whether such 

battery-powered devices have been tested for 

indoor use and whether they are in 

compliance with safety standards for such 

use. If these options prove not to be feasible, 

then the proposed standard could 

substantially limit consumer choice by 

eliminating the cooking appliance that most 

closely meets these consumers’ needs. 

As to top-loading CCWs, it appears that 

meeting the proposed standards may require 

substantial investment in the development of 

new technology that some suppliers of toploading CCWs may not find it economical to 

make. CCWs are used primarily in multihousing laundries, with top-loading 

machines accounting for approximately 80 

percent of machines in these locations. The 

remaining 20 percent are front-loading 

machines, which are more energy efficient 

but significantly more expensive than toploading models. There are only three 

manufacturers of top-loading CCWs selling in 

the United States. It appears that there is a 

real risk that one or more of these 

manufacturers cannot meet the proposed 

standard. In such a case, CCW purchasers 

would have fewer competitive alternatives 

for top-loading machines, potentially 

resulting in purchasers facing higher prices 

from the remaining top-loading manufacturer 

or manufacturers. 

Although the Department of Justice is not 

in a position to judge whether manufacturers 

will be able to meet the proposed standards, 

we urge the Department of Energy to take 

into account these possible impacts on 

competition and the availability of options to 

consumers in determining its final energy 

efficiency standard for CCWs and residential 

gas cooking appliances with constant burning 

pilots. To maintain competition, the 

Department of Energy should consider 

keeping the existing standard in place for 

top-loading CCWs. The Department of Energy 

may wish to consider setting a ‘‘no standard’’ 

standard for residential gas cooking products 

with constant burning pilots to address the 

potential for certain customers to be stranded 

without an economical product alternative. 

The Department of Justice does not believe 

that the proposed standards for other 

products listed in the NOPR would likely 

lead to an adverse effect on competition. 

Sincerely, 

Deborah A. Garza. 

[FR Doc. E9–30891 Filed 1–7–10; 8:45 am] 

BILLING CODE 6450–01–P 


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