### APPENDIX 13A. MANUFACTURER IMPA CT ANALYSIS IN TERVIEW GUIDES
TABLE OF CONTENTS

13A.1 CONVENTI ONAL COOKING PRODUCTS...................................................... 13A-1 13A.2 MICROWAVE OVENS (ENERGY FACTORY STANDARDS) ....................... 13A-9

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### APPENDIX 13A. MANUFACTURER IMPACT ANALYSIS INTERVIEW GUIDES

13A.1 CONVENTIONAL COOKI NG PRODUCTS 

# Cooking Products Rulemaking Manufacturer Impact Anal ysis Interview Guide:

Electric and Gas Cookto ps, Ovens, and Ranges

March 4, 2008

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### 1 Section 6313(a)(6)(A) of 42 U.S.C. requires the U.S. Department of Energy (DOE) to set forth energy conservation standards that are technologically f easible, economically justified, and that would result in significant additional energy c onservation. This interview guide allows the opportunity for manufacturers to provide valuab le information that will assist DOE in its decisions for the cooking products rulemaking. For the advance notice of proposed rulemaking (ANOPR) for cooking products, DOE based its analyses on the 1996 Technical Support Document fo r Residential Cooking Products (1996 TSD). The costs found in the 1996 TSD were conve rted to 2007 dollars us ing the producer price index (PPI). The information found in the 1996 TSD was also supplemented with currently researched data and information provided by the Association of Home Ap pliance Manufacturers (AHAM). For the notice of proposed rulemaking (NOPR) analyses, Navigant Consulting Inc. (NCI) developed a “strawman” model of the cooking pro ducts industry financial performance called the Government Regulatory Impact Model (GRIM). The GRIM uses publicly available data ( e.g. , U.S. Securities and Exchange Commission (SEC ) 10-K Forms) and 1996 TSD figures that were adjusted by shipment volumes and the PPI. These interviews will serve to review and supplement the strawman GRIM inputs and prov ide an opportunity to discuss the possible impacts of different efficiency levels on such issues as manufacturing costs, equipment prices, product sales, direct employment, capita l assets, and industry competitiveness.

KEY ISSUES DOE is currently reviewing a set of efficiency le vels for Electric Coil Cooktops, Electric Smooth Cooktops, Gas Cooktops, Electric Standard Oven, El ectric Self-Clean Oven, Gas Standard Oven, Gas Self-Clean Oven, and Electric and Gas Ranges rulemaking analyses. The efficiency levels are presented below as they apply to the va rious product classes. In responding to this questionnaire, please refer to the energy factor (EF) values described below.

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### Table 1.1 Efficiency Levels Product

Class Baseline Efficiency Level 1, 1a* Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 Efficiency Level 5 Efficiency Level 6 Electric

Coil Cooktops 0.737 0.769

- - - - -
Electric Smooth Cooktops 0.742 0.753

- - - - -
Gas Cooktops 0.156 0.399 0.420

- - - - Electric Standard

Oven 0.1066 0.1113 0.1163 0.1181 0.1206 0.1209

-
Electric Self-Clean Oven 0.1099 0.1102 0.1123

- - - -
Gas Standard

Oven 0.0298 0.0536 0.0583* 0.0566 0.0572 0.0593 0.0596 0.060

Gas SelfClean Oven 0.0540 0.0625 0.0627 0.0632

- - - 

### * Baseline + Electronic Spark Ignition: Cooking efficiency decrease = 0.09 (absolute percentage points), added electricity consumption = 0.0 Wh. Efficiency levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the technologies for each de sign are different. Efficiency level 1 is a hot surface ignition device while standard level 1a is a spark ignition device


### 1.1 What are the key issues for your company regarding cooking products related to energy conservation standards and this rulemaking? 1.2 For the issues identified, how significant are they for each efficiency level? 1.3 How can we most effectively incorporate these issues in the Manufacturer Impact Analysis (MIA)?

2 FINANCIAL PARAMETERS As stated above, NCI has developed a “straw man” model of the cooking products industry financial performance called the GRIM, using publicly available data ( e.g. , SEC 10-K Forms) on cooking products manufacturers. This secti on attempts to understand how your company’s financial situation differs from our industry aggregate picture.

2.1 Please compare your financial parameters to the GRIM parameters tabulated below.

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### Table 2.1 Financial Parameters fo r Cooking Products Manufacturers GRIM Input Definition Cooking Products GRIM Estimated

Value Your Actual (if significantly different from our estimate) Income Tax Rate Corporate (average) effective income tax paid (percentage of

earnings before interest and taxes, EBIT) 33.1%

Discount Rate Weighted average cost of capital (inflation-adjusted weighted average of corporate cost of debt and return on equity) 6.6%
Working Capital Current assets less current liabilities (percentage of revenues) 3.3%

SG&A Selling, general, and administrative expenses (percentage of revenues) 13.0%

R&D Research and development expenses (percentage of revenues) 2.3% Depreciation Amortization of fixed assets (percentage of revenues) 3.4% Capital Expenditures Outlay of cash to acquire or improve capital assets (percentage of revenues, not including acquisition or sale of business units) 3.5%



### 3 PRODUCTION COST BREAKDWON Using information from the 1996 TSD, DOE es timated the industry average percentage breakdown of each manufacturing co st in the full production cost.

3.1 Please compare your full production cost per centages to the GRIM full production cost percentages tabulated below. Are the different percentages of each cost representative of your company or the cooking products industr y? Please explain any differences. Table 3.1 Breakdown by Percentage of Fu ll Production Costs for Baseline Cooking Products Components of Full Production Costs Estimated % of Full Production Cost Your Actual (if significantly different from our estimate) Materials 66.19 %

Labor 12.98 % Overhead 16.55 % Depreciation 4.28 %



### 4 SHIPMENT PROJECTION AND MARKET SHARE
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### 4.1 Would you expect your market share to change once standards become effective? Does your outlook change with higher efficiency levels? 4.2 How would you expect shipments to change fo r the industry as a whole as a function of standards and why?

5 CONVERSION COSTS An increase in energy conserva tion standards may cause your company to incur one-time capital and product conversion costs a 

### . DOE calls these conversion cost s because they are the costs of changing your business to comply with new energy conservation standards.

5.1 What level of conversion costs do you anticipat e incurring under the different efficiency levels? Refer to the tables below to provi de your company’s estimates for the industry. Please compare your conversion costs with th e GRIM conversion costs for the industry tabulated below. Please provide additional qualitative information to help us understand the nature of your investments. Table 5.1 Electric Coil Cooktops Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantly different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.737) $0 $0

Level 1 (0.769) $0 $13



### Table 5.2 Electric Smooth Cooktops Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantly different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.742) $0 $0

Level 1 (0.753) $104.4 $13


### Table 5.3 Gas Cooktops Conversion Costs ($ Millions)

a Capital and product conversion costs include capital conversion expenditures, product conversion expenditures and stranded assets. Capital Conversion Expenditures – One time investments in plant, property, and equipment (PPE) necessitated by an energy conservation standard. These ma y be completely incremental to existing PPE or they could involve replacement of existing PPE . Product Conversion Expenditures – One-time expenses in research, product development, testing, and marketing necessitated by an appliance energy conservation standard. Stranded Assets – Investments such as equipment or tooling that become obsolete as a result of new regulation. 13A-5Standard Level GRIM Estimated Total Industry Your Estimate (if significantl y different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.156) $0 $0

Level 1 (0.399) $4.4 $13

Level 2 (0.420) $4.4 $26



### Table 5.4 Electric Standard Oven Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantl y different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.1066) $0 $0

Level 1 (0.1113) $0.9 $13

Level 2 (0.1163) $1.5 $26

Level 3 (0.1181) $103.3 $39

Level 4 (0.1206) $167.7 $52

Level 5 (0.1209) $179.8 $65



### Table 5.5 Electric Self-Clean Oven Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantl y different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.1099) $0 $0

Level 1 (0.1102) $28.8 $13

Level 2 (0.1123) $109.6 $26

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### Table 5.6 Gas Standard Oven Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantl y different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.0298) $0 $0
Level 1,1a

(0.0536) (0.0583) $2.9 $3.6 $13

Level 2 (0.0566) $3.9 $26

Level 3 (0.0572) $8.4 $39

Level 4 (0.0593) $57.3 $52

Level 5 (0.0596) $58.4 $65

Level 6 (0.060) $74.5 $78



### Table 5.7 Gas Self-Clean Oven Conversion Costs ($ Millions) Standard

Level GRIM Estimated Total Industry Your Estimate (if significantl y different from our estimate Total Industry Conversion

Capital Expenditures Product Conversion

Expenses Conversion Capital Expenditures Product Conversion

Expenses Stranded Assets

Baseline (0.540) $0 $0

Level 1 (0.0625) $6.8 $13

Level 2 (0.0627) $15.6 $26

Level 3 (0.0632) $17.4 $39



### 6 PROFITABILITY AND MANUFACTURING CAPACITY One of the primary objectives of the MIA is to as sess the impact of efficiency levels on industry profitability and changes in manufacturing capacity.

6.1 Do profit levels vary by efficiency le vel? Please explain why or why not? 6.2 Do you expect any changes in your estimated profitability following the new energy conservation standard? If so, please explain why. 6.3 How would the imposition of new energy conservation standards affect your manufacturing capacity at your production facilities? Would any facilities be closed, downsized, added, or upgraded?

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### 7 CUMULATIVE REGULATORY BURDEN Cumulative regulatory burden refers to the burden that industry faces from overlapping effects of new or revised DOE standards and/or other regul atory actions affecting the same products or industry

7.1 Are there other recent or impending regulati ons that cooking products manufacturers face (from DOE or otherwise)? What level of investment are you e xpecting to incur as a result of these regulations? 7.2 Under what circumstances would you be able to coordinate any e xpenditures related to other regulations thereby lessening the cumulative burden?
8 DIRECT EMPLOYMENT IMPACT ASSESSMENT The impact of new energy conservation standards on employment is an important consideration in the rulemaking process. This section of the interview guide seek s to explore current trends in cooking products production employment a nd solicit manufacturer views on how domestic employment patterns might be affected by new energy conservation standards.

8.1 Would your domestic employment levels change under new energy conservation standards? If so, please expl ain how they would change. 8.2 Would the workforce skills necessary under new energy conservation standards require extensive retraining or replacement of employees?
9 CONSOLIDATION New energy conservation standards can alter the competitive dynamics of the market. This can include prompting companies to enter or exit th e market, or to merge. DOE and the Justice Department are both interested in any potential reduction in competition that would result from a new energy conservation standard.

9.1 In the absence of new standards, do you e xpect any industry cons olidation? Please describe your expectations. 9.2 How would new standards affect your ability to compete? 9.3 Could new standards disproportionately adva nce or harm the competitive positions of some firms ( e.g. , small businesses)?

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### 13A.2 MICROWAVE OVENS (ENERG Y FACTORY STANDARDS) 

# Cooking Products Rulemaking Manufacturer Impact Analysis In terview Guide: Microwave Ovens

March 3, 2008

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### 1 KEY ISSUES The Department of Energy (DOE) is currently revi ewing a set of efficiency levels for Microwave Ovens (MWO). The efficiency levels are presen ted below as they appl y to the single product class. In responding to this questionnaire, please refer to the energy factor (EF) values described below. Table 1.1 Efficiency Levels (EF %) Product

Class Baseline Efficiency Level 1 Efficiency Level 2 Efficiency Level 3 Efficiency Level 4 Microwave Ovens 55.70 58.60 58.80 59.70 60.20



### 1.1 What are the key issues for your company re garding MWO related to energy conservation standards and th is rulemaking? 1.2 For the issues identified, how significant are they for each efficiency level? 1.3 How can we most effectively incorporate these issues in the Manufacturer Impact Analysis (MIA)?
2 SHIPMENT PROJECTION AND MARKET SHARE

2.1 Would you expect your market share to change once standards become effective? Does your outlook change with higher efficiency levels? 2.2 How would you expect shipments to change fo r the industry as a whole as a function of standards and why?
3 CONVERSION COSTS An increase in energy conservation standard s may cause your company to incur one-time capital and product conversion costs. DOE calls these conversion costs because they are the costs of changing your business to comply with new energy conservation standards.

3.1 What level of conversion costs do you anticipat e incurring under the different efficiency levels? Refer to the tables below to provi de your company’s estimates. Please provide additional qualitative information to help us understand the nature of your investments.
Table 3.1 MWO Conversion Costs Standard Level Conversion Capital Expenditures Product Conversion Expenses Stranded Assets
Baseline (55.70) Level 1 (58.60) Level 2 (58.80) Level 3 (59.70) Level 4 (60.20)

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### 4 PROFITABILITY AND MANUFACTURING CAPACITY One of the primary objectives of the MIA is to as sess the impact of efficiency levels on industry profitability and changes in manufacturing capacity.

4.1 Does your company have any MWO manufacturi ng facilities located in the United States? How would you expect shipments to change fo r the industry as a whole as a function of standards and why? 4.2 Do you expect any changes in your estimated profitability following the new energy conservation standard? If so, please explain why. 4.3 How would the imposition of new energy conservation standards affect your manufacturing capacity at your production facilities? Would any facilities be closed, downsized, added, or upgraded?

5 CUMULATIVE REGULATORY BURDEN Cumulative regulatory burden refers to the burden that industry faces from overlapping effects of new or revised DOE standards and/or other regul atory actions affecting the same products or industry.

5.1 Are there other recent or impending regulati ons that MWO manufacturers face (from DOE or otherwise)? What level of investment ar e you expecting to incur as a result of these regulations? 5.2 Under what circumstances would you be able to coordinate any e xpenditures related to other regulations thereby lessening the cumulative burden?
6 DIRECT EMPLOYMENT IMPACT ASSESSMENT The impact of new energy conservation standards on employment is an important consideration in the rulemaking process. This section of the interview guide seek s to explore current trends in MWO production employment and solicit manufacturer views on how domestic employment patterns might be affected by new energy conservation standards.

6.1 Would your domestic employment levels change under new energy conservation standards? If so, please expl ain how they would change. 6.2 Would the workforce skills necessary under new energy conservation standards require extensive retraining or replacement of employees?

7 CONSOLIDATION New energy conservation standards can alter the competitive dynamics of the market. This can include prompting companies to enter or exit th e market, or to merge. DOE and the Justice Department are both interested in any potential reduction in competition that would result from a new energy conservation standard.

7.1 In the absence of new standards, do you e xpect any industry cons olidation? Please describe your expectations. 13A-11

### 7.2 How would new standards affect your ability to compete? 7.3 Could new standards disproportionately adva nce or harm the competitive positions of some firms ( e.g. , small businesses)?

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