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Tuesday 

. May 14, 1991 

Part III 

Department of 

Energy 

Office of' Conservation and Renewable 

Energy 

10 CFR Part 430 

Energy Conservation Program for 

Consumer Products: Energy Conservation 

Standards for Three Types of Consumer 

. Products; Final Rule 

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Federal· Registu I Vol. 56. No. 93 I Tuesday. May 14. 1991 I Rules and Regulations 

DEPARTMENT OF ENERGY , 

OffIce of Conservation and 

Renewable Energy 

10 CFR Part 430 

(DocIe.t No. CE-R1I-88-101 ) 

, , 

Energy ConMrvatton Program 1M 

Conaumer Productl: Final Rule 

ReQardlng Energy Conservation 

Standards for Three Type. of 

Conaumer Products 

AGENCr. Office of Conservation and 

Renewable Energy. DOE. 

ACTION: Final rule. 

SUMMARr. The Energy Policy and 

Conservation Act (EPCA). as amended 

by the National Energy Conservation 

Policy Act (NECPA). the National 

Appliance Energy Conservation Act 

(NAECA). and the National Appliance 

Energy Conservation Amendments of 

1988 (NAECA 1988). prescribes energy 

conservation standards for certain 

major household appliances. and 

requires the Department of Energy (DOE 

or Department) to administer an energy 

conservation program for these 

products. Among other things. the 

NAECA amendments to EPCA require 

DOE to consider amending the energy 

conservation standards for dishwashers. 

clothes washers. and clothes dryers. 

DOE has determined that revised 

energy conservation standards for 

clothes washers. clothes dryers and 

dishwashers would result in a, 

significant conservation of energy and 

would be economically justified. 

Therefore. the Department is today 

amending Title 10. part 430 of the Code 

of Federal Regulations to add new 

standards for these products. More 

stringent standards. including the 

maximum technologically feasible 

levels. were considered by the 

Department. but rejected based upon 

consideration of the economic. analvses. 

These standard levels are to take effect 

May 14. 1994. ' 

EFFECTIVE DATE! May 14. 1994. 

ADDRESSES: A copy of the Technical 

Support Document may be read at the 

DOE Freedom of Information Reading 

Room. U.S. Department of Energy. 

Forrestal Building. room 1E-190. 1000 

Independence Avenue. SW .• 

Washington. DC. 20585. (202) 586-6020. 

between the hours of 9 a.m. and 4 p.rn .. 

Monday through Friday. except Federal 

holidays. Copies of the Technical ' 

Support Document may be obtained 

f::>m: u.s. Department of Energy. Office 

ot Conservation and Renewable Energy. 

forrestal Building. Mail Station CE-43. 

1000 Indepeodence Avenue. SW .. Washington. DC 20585. '(202) S86-91%7~ 

FOR FURTHER INFORMAnON CONT~ 

Michael J. McCabe. U.S. Department of 

Energy. Office of Conservation and 

Renewable Energy. Forrestal Building. 

Mail Station'CE-43. 1000 

Independence Avenue. SW .. Washington. DC 20585. (20%) 586-8121. 

Eugene Margolis. Esq .• U.S. DepartmeDt 

of Energy. Office of General CounseL 

Forresta! Building. Mail Station GC41.1000 Independence Avenue. SW .. Washington. DC 20585. (202) 58&-9507. 

U.S. Department of Energy. CE-l3.1. 

Docket No. CE-RM-88-101; Forrestal 

Building. room 68-025. 1000 

Independence Avenue. SW .• Washington. DC 20585. (202) 586-9320. 

SUPPLEMENTARY INFORMAnON: 

I. Introduction 

a. AuthOrity 

b. Background 

n. General Discussion 

a. MaximUm Technologically Feasible 

Levels 

b. Energy Savings 

1. Determination of Savings 

2. Significance of SlIvings 

c. Rebuttable Presumption 

d. Economic Justification 

1. Economic Impact on Manufacturers and 

Consumers 

2. Ufe-cycle Costs 

3. Energy Savings 

4. Lessening of Utility of Performance of 

Products 

s. Impact of Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Other Factors 

m. Discussion of Comments 

a. gen,tral Analytical Comments 

b.,Proguct Specific Comments 

1. Clothes Washers 

2. Clothes Dryers 

3. Dishwashers 

IV. Product·Soecific Discussion 

a. Clothes Washers 

1. Efficiency Levels Analyzed 

2. Payback Periods 

3. Significance of Energy Savings 

4. Economic Justification 

A. Economic Impact on Manufacturers and 

Consumers 

B. Ufe-cycle Cost and Net Present Value 

C. Energy Savings 

D. Lessening of Utility or Performance of 

Products 

E. Impact of Lessening of Competition 

F. Need of the Nation to Save Energy 

G. Other Factors 

5. Conclusion 

b. Clothes Dryers 

1. Efficiency Levels Analyzed 

2. Payback Periods 

3. Significance of Energy Savings 

4. Economic Justification 

A. Economic Impact on Manufacturers and 

Consumers 

B. Life-cycle Cost and Net Present Value 

C. Energy Sa vingg 

D. Lessening oi Utility or Perfonr.ance of 

Products 

L Impact of Lellening of Competition 

F. Need of the Nation to Save Enef87 

G. Other Facton 

5. Conclusion 

c. Dishwashers 

L Efficiency Levels Analyzed 

2. Payback Periods 

3.Slgnificance of Energy Savings 

4. Economic Justification 

A. Economic Impact on Manufacturen and o--mera 

B.1Jfe-cycle Cost and Net Present Value 

C. Energy Savings 

D. Leuening of Utility or Performance of 

Products 

E.lmpact of Lessening of Competition 

F. Need of the Nation to Save Energy 

C. Other Factors 

S. Cou.ciusion 

V. Environmental. Regulatory Impact. 

Federalism and Regulatory Flexibility 

Reviews 

a. Environmental Review 

b. Regulatory impact Review 

c. Federalism Review 

d. Regulatory Flexibility Review 

L Introduction 

Q. Authority 

Part B of Title Ul of the EPCA. Public 

Law 94-163. as amended by NECPA. 

Public Law 9!HJ19. by NAECA. Public, 

Law 100-12. and by NAECA 1988. Public 

Law 100-357. 1 created the Energy 

Conservation Program for Consumer 

Products other than Automobiles. The 

consumer products subject to this 

program (often referred to hereafter as" 

"covered products") are: Refrigerators. ' 

refrigerator-freezers and freezers: 

dishwashers: clothes dryers: water 

heaters: central air conditioners and 

central air conditioning heat pumps: 

fumaces: direct heating equipment: 

'eievision sets: kitchen ranges and 

jvens: clothes washers: room air 

:onditioners: fluorescent lamp ballasts: 

md pool heaters: as well as any other 

';ons\llDer product classified by the ' 

Secretary of Energy. Section 322. To 

date. the Secretary has not so classified 

any additional products.' 

Under the Act. the program consists 

essentially of three parts: Testing. 

labeling. and Federal energy , 

conservation standards. DOE. in 

consultation with the National Institute 

of Standards and Technology (NIST). is 

required to amend or establish new test 

procedures as appropriate for each of 

the covered products. Section 323. The 

purpose of the test procedures is to 

produce test results that measure the 

energy efficiency. energy use. or 

• Part B of Title III of EPCA. aa amended by 

NECPA. NAECA. and NAECA 1988.11 referTed to in 

this notice 88 the Act, Part B of Title III is cociilied 

al42 U.s.c. 6291 et seq, Part B of Title III of EPCA. 

D ~ by NECPA o:tly. i. referred to in thi. 

notice 88 NECPA. 
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t!sUmat~d~'vpei __ t:emdll 

t:overed product duriDB a representative 

Jurcage IWI qda.Ar,petiod of uaaawi 

lIhatinatbe....,~eto 

I:onduct. Sectlon 323{b1{3). A lest 

~1l'Goeciure '" Htlf ........ if DOE 

1leterwiDesb.J nde ~ tme r:mmot be 

I!eveloped. Section.323(dltll. 'Teal 

procedures appear at.1O ax pad 41Q. 

lIubpartB; 

'The ¥ederai Trade CunnnissiDJ11FTC1 

is required by the Act to prescribe rules 

I!overning the labeling of covered . 

1~ forwfttch teet ~ haft 

been prellCr'ibM by roE. Section 324( aJ. 

These rules are to require that each 

particubrr model cif 11 mvered product 

bearll a labcl.that lndlca.tes its annual 

operating cost and the ra. d 

I!'Bt!mated _l.,~ costs for 

uther mudels 'Of tlmt product. Section 

ilZ4{c1{11. Disclosure of estimated 

operating cost Is not required under 

!;ection 324 if the FI'C determines that 

!:m::b discloswe is 1mt tikety 'to 1mrist 

c:onSWDm'S in ma:king purchasq 

decisions. or is not economically 

feasible. In such a case. FI'C must 

reqWre a difIereat..w meaawe of 

energy consumption. Section 324(c). At 

the present time there Me Fl'C rules 

tequiring IIl'be1s 'for the follOwing 

products: Room air conditioners. 

furnaces. clothes washers. dishwashers. 

\~ hesters. fr.eezers. l'efrigera tarland 

refrigemtar-fraeam. iCI!lUI:al.air 

c:onditianenl.aDd·D!IlUml air conditioning 

heat pumps. and iWaresc.eut·lamp 

baUm:ts. '" F.R8M15. NOW!IBber 19. 

197!,;52 FR 46888. December 10.19.87. 

llM 54 FR 28031. July .s. 1989. 

For each of 12 of the covered 

products. the Act prescribes an initial 

F~era:l energy 'Conservation' 'Stundard. 

Section s25{bHhJ. TIre Act establishes 

dates of applicability:klr th.e staDd.ards 

in 1988. 1990. 1992 or 1993. depending ·on . 

the product. and specifies that ths 

sta.!ldards are to be reviewed by the 

Department within 3 to U) years. also 

c:epending on the product. Section 

325(bHh.). After the.apecified period. 

(IDE.may promulgate :new standards for 

each :product: howevsr. ·tim .Secretary 

may not pl'eScribe 1m)' amended 

standard which increasell .the maximum 

a.tlowable energy use. or decreases the 

mwmum requir&t eAerfW eff&cienc¥ ~f a 

c:overed product. Section 325(l){1). 'The 

Department's current review of 

standards is for disRwa&hers. clothes 

washers. and dothes dryst3. Section 

325(gJ(4J(A). 

. Ally newer amended IM'ndmi ill 

required to be l1eaigned iIO as to achieve 

the maximum improvement in energy 

efficiency that is technologically 

fea.ible and economica11y j~stified. 

Sedicm 3.25{.Q(2l{A}. 

SectioA ~(~H2HB}(~} proridea that 

befOTl! DOE deteluWles wliether 11 

ataadard Is economically justified. 11 

malt.first solicit comments on a 

~.aiaDdarli After l'SvWwlDg 

comments on the proposal. DOE must 

then determine that the henefits of the 

standard exceed its burdens. based. to 

the greatest extent practicable. on .. 

weighing of the following seven factors: 

(IJThe economic impact of the 

standard on .the maDW'acturaa .and .on 

~ ~olisunlers 'Of the products subjeet to 

such standard: 

(2) The savings in operating costs 

.throughout .the estimated average li.fe llf 

the covered product in the type (or 

dassl'compared to any inC1'ease in the . 

price of. or in the initial charges for. or 

maintenance expenses of the cova-eIi 

prod acts which are tikeIy'to 1"eS1rlt 

directiy from the lmposition of the 

at8ndard: 

{3J The tota-l projected amount of 

energy savings 'likely to result directly 

from the imposition of tbe standard: 

(4) Any lessening of the utility or the 

performance of the covered products 

likely to result from the imposition of .the 

standard: 

(S~ The impact of any lessening.of 

competition. determined in writing by 

the Attorney General. that is likely to 

result from the imposition of the 

standard: 

. (6YI'he need for national energy 

conservation: and 

(7) Other factors the Secretary 

considel'll relevant. 

In additiDn. &ection 325l1}{%)(B){iii) 

establishes a rebuttable -presumption of 

ecoriomic justification in instances 

where the Secretary determines 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 vahre of the 

energy savings during the first year that 

the 1:onstmler will receive 8S a result of 

the 'Standard. as calculated tmderthe 

applicable test procedure • • .... 

Section 327 of the Act addreSS1ls the 

effect of Federal rules concerning 

testing. labeling. and standards on State 

laws orregniations concerning such 

matters. Generally. all such State iaws 

or regulations are superseded by the 

Act. Section 327(aHc). Exemptions to 

thia pII!Nl nne lnduds: (1) State 

standards presC1'ibed or enacted before 

January 8.1987. and applicable to 

appliances produced before January 3. 

't9881section '3%7(bmn: 1~ ~ 

pl*l1SlII'!Bellt slmldal"dll wkida .are mum 

iltdDgeut than llIe ~ Fedeal 

ftmdaTd (section SZ1lbJrS) erl OO(t~ 

14n: t31 State regulations bgpninR 

constant burning pilot 1ighIam poGl 

heaters fs.edioD 3.27fbl{ 4l1: .and f 4l Slate 

standards for television seta effective on 

or after January 1. 1992, may remain In 

effect In the absence of a Federal 

standard for such product (section 

3Z1ibHii) and SZ7{~). 

b. BCtCkgtcmtd 

The.purpose of this m '*ins is to 

t'e'riew the ~1'BY <:eUldi'Vdtien 

standards for clothes washel'8. cla1hes 

dryers and disbwashers. . 

As directed by the Act. DOE 

published an advance notice of 

proposed rulemaking. with a 6O-day 

comment period that ended lu1y 18, 1988. 

:53 Fa 27712..May ta. 19&8. (He£eafter 

referred to as the advance .DGtice). The 

advance notice .prellEilll8d lJae pr4d.uc:t 

clasae. that DOE plmned to aBBlyze 

afld provided a detailed di8cnsion of 

'the mudytical methodolas7 and 

analytical models that the Department 

expected to use in performing the 

analysis to support this rulemaking. The 

Department invited .comments and data 

on the acx:unacy and feallibUUy of the 

planned methodology &ad aJCD&Il'aged 

interested PersonJtoft,g!lHlmeod 

impruvements or aitemlUiwesto DOE'. 

approach. ..' 

Ou August 9. 1989. DOE published a 

notice of proposed rulemaking 

concemin8 d~ waaber.a. clotlws 

dryers. and dishwashers. (Hereafter 

referred to as the proposed nJle.J 54 FR 

32144. August 9. 1989. For clothes 

washers. the Deparment did not 

propose a specific lItandard level: rather. 

DOE solicited comments and . 

information within a range of standard 

levels. This range of standard levels 

considered is llhown in Tabh! 1-1. 

below. For clothes -dryers. the 

Department proposed 'a prescriptive 

standani thtlt wooid l'equire dothes 

dryers to be equipped with BB evtomatic 

l«mination device. either.a moistme . 

termination or temperatru'e ltermination 

devke. For dishwasbers. :the 

Department proposed:a lI'iUlAiBftJ' :ri'mliWl_ eneqn' 

efficiency lItandard. These proposed 

standards.are -shown in Table 1-1 

below. 
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! 'Feci~' RegiSter r Vol. 56, No. 93 I Tuesday, May 14, 1991 I Rules and Re8U1atlons 

TABLE 1-1.-PROPOSED STANDARD LEVELS FOR CLOTHES WASHERS, CLOTHES DRYERS, AND DISHWASHERS 

[Qo1hes waherI) 

Product dasI Energy facIor (eu. ItIkWh/cycleHanulry 1. 1993 

1. Top Loading. Compact (US It I C8PIICitY Of less) .. _ .. _ .... ______ Must have an unheated rinIe option 10 1.02 eu.1t/kWh/cyde. 

2. Top·Lo8ding. StancWd 1.61 10 2.741t1 c:apecgy Of greater)_ _.- Must haW an unMated rms. option 10 1.32 eu. it/kWh/cycle. 

3. Top u.ding, I.aIve (2.75 It I capeci1y Of greater) ... _. MUll 111M an unIIeated rinse option 10 1.21 eu. it/kWh/cycle. 

4. T.op \.oadinIJ, Semi-AutomaUc . .... _- MUll haW an unt.atIId rinse option. 

5. FnInt L08ding ....... - MUll haW an unt.ated rinIe option. 8. Suds SIMI' _ .. _ -_._ ... _. __ ._--- MUll have an Unheated rinse option. 

(aothel dryersl 

R8qliW8II1III1t-JMuIr 1. 11183 

. 1. Electric. Standard ....... :. ._ ••••• _ ....... _ ....... ___ ..... ......... Shall have moIs1unt Of ternpernn tanninalion. . 2. EIect7ic. Compact (120V) ...... ___ ........ _ ..................... _ ......................... __ • ____ ..... __ .. _ .. __ ._ ...... Shall have moiIWre tx t8fllPllRllft termination. 

3. Electric. Compact (24OV).... _ .. _ ... Shall have moIs1unt tx ~ termmation. 

4. Electric Heat Pump. .... (Reserved). 

5. GIla. Standard.... .. ............. _ .. _............. _....... Shall have moisture tx temperatura termination. 

8. Gas. COmpact ...... _ ........................... _ .. _ .. ____ ...... Shall have moisture tx temperatura termination. 

[DishwashenI) 

Energy Factor (loadslkWh)-January 1. 1993 

1. Compact Dishwasher (115V) ..... ... ... __ ._.... ... ...... 0.58. 

2. Stanclard Dishwasher (115V) .. _ .... _ .... ___ ......... ___ .. __ ._ ....... ____ .. _. _ .......... 0.41. 

3. Water Haating OishwaIner. Compact (115V) . __ ....... _ ......... _ .... _ .... ______ .. ______ ........... Must be equipped wi1h option 10 dry without heal 

4. Water Heating O~. Standard (115V) ...... _ .................................. _. __ • __ ...... _____ .. _ .... __ .......... 0.44. 

5. Water Heeling OIshwuher. Compect (220Vl .. _ ...... _ ................... ____ • __ .... MUll be equipped with option 10 dry without heat. 

8. Wat. Heating Oishwasher. Standard (22OV) ... __ ... _ .. _ .. _ ......... _ ... ______ .. • __ ..... Must be equipped with option 10 dry without heat. 

During the 6O-day comment period 

ending October 10, 1989, DOE received 

40 written comments. and testimony 

from 12 participants at the public 

hearing held in Washington. DC. on 

September 20. 1989. The issues raised 

are addressed in Section ill of this 

notice. 

On ·September 28, 1990. DOE 

published an Advance Notice of 

Proposed Rulemaking in the Federal . 

Register regarding energy conservation 

'ilandards for nine types of consumer 

products. including clothes washers. (55 

FR 39624). Clothes washers were 

included in this advance notice because . 

subsequent to the close of the comment 

period in this rulemaking. DOE became 

aware of a clothes washer design option 

currently'in use in Europe which was 

not included in the proposed rule and 

upon which no comment was received. 

This design option (horizontal wash tub 

axil!l in top-loading washers) appears to 

have the potential for saving significant 

amounts of energy. Due to the absence 

of any comment. the horizontal axis 

design option was not considered for 

Inclusion in this Final Rule as discussed 

below. 

n. General Discussion 

a. Maximum TechnologicalJy Feasible 

Levels' 

The Act requires that in considering 

any new or amended standards. 'the 

Departfuent must consider those that 

"shall be designee to achieve the 

maximum improvement in energy 

efficiency which the Secretary 

detennines is technologically feasible 

and economically justified." (Section 325 

(1)(2)(A)). Accordingly. for each class of 

product under consideration in this 

rulemaking. a maximum technologically 

feasible (max tech) design option was 

identified. The max tech level is one that 

can be carried out by the addition of 

design options. both commercially 

feasible and prototypes. to the baseline 

units. DOE believes that the max tech 

feasible level must be capable of being 

assembled. but not necessarily 

manufactured. by the effective date of 

the amended standards. 

The max tech levels were derived by 

adding energy-conserving engineering 

design options to the respective classes 

in order of decreasing consumer 

paybacks. For example. the max tech 

level for clothes dryers includes heat 

pum·ps. an expensive design that pays 

back the 810west of all designs. A 

complete discussion of each max tech 

level. and the design options included in 

each. is found in the Engineering 

Analysis. See Technical Support 

Document. chapter 3. . Table 2-1 presents the Department's 

max tech levels for clothes washer. 

clothes dryer. and dishwasher classes: 

TABLE 2-1.-MAXtMUM 

TECHNOLOGICALLY FEASIBLE levELS 

Products " product classeS 

Clothes Washers: 

Unit.-gy 

COfISUI1II)1Jon 

Top Loading. Compact 1 .......... _ ... 189 kWh/yr. 

Top Loading. Standard Capac.. 339 kWh/yr. ity I. . 

Clothes OIyera: 

Compact. EIec1r1c. 120V· ..... _ ...... 140 kWh/yr. 

Compact. Electric. 240V I .... __ .. 151 kWh/yr. 

Standard. EIec1r1c .... ___ 338 kWh/yr. 

Standard Gas • ........ _.___ 3.5/MBtulyr. 

DishwasherS: 

Compact, 115V ............. __ .. _ .. 510 kWh/yr. 

Standard. 115V ...... _ ......... __ • 888 kWh/yr. 

kWh/yr ... kilowatt hows per year 

MBIu/yr. = thousand British IIlerm8I units per 

year. 1 Capacity equals 1.45 It. 

• C8pacity equals 2.4 II.' • C8pacity equalS 3.45 II.' • Capacity equals 5.9 It' 

The Department believes that these 

are the max tech levels from an 

engineering analysis standpoint. Each of 

the levels was evaluated in accordance 

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:,_;~ .• '="~-~.;.~~~I~~;~i~i~'=~:;;~~-i~''1I;~I~~.;;58.~ltl;;:~'Q~'~~/~T~USI;.';;~~V';;'M;a;;·Y~·14;.;199t;"'~1~.~;··;es; . .ud;;;;.lte;8IJ;la;;Uons;;;~~,,;;2;ZZ;;S3 ,~. ~:;"A-nic .... tjfice'ion iaaCll'tl 

IIp-2fled ill abe AGt 10 determine 

l~miC justification. . The Departmeat.evalueted each max 

Itech level to delermie if it would be 

'iICOnomical1y juetitied at the time the 

:itandards would become effective. DOE 

Irejectec1 ~ conservation 8umdards 

Ithat had unacceptable impacts on 

I=OI181lItl2rB or manufacturetS. e.g .• Imuauany long payback periodll and 

:mbstautia'!ly.adverse impacts on 

manufactnrers' r.elW:na DQ equity {ROE). 

In that cou'ld resutt in a tesseningof the 

Iltility of the product. 

b. EnergF'~' 

1. Determinatirm of Savings. Th£ 

lJ.epartment forecasted energy 

c:onsumpticm through dle ulle of the 

I.awrence Berk2ley Labor.atory 

l~esidential.Energy Model (LBL-REM), 

which forecaAed enerw conswnption 

over the :period of analYliis for caDCliidate 

!itandarda and the base calle. a The 

Depa:r1mI!nt qaantified the energy 

BaviDga that would be attr.ihzrtabie to a. 

!itandard as th2 diffemlce in.energy 

\:cliisuwpllicm between _ candidate 

lltandard'a case .• the baSI! case. The LBL-R£M is an improvement of 

the OakRidge National Laboratory 

Residential Energy Enci Use Model 

(ORNLModel). wmch was used by DOE 

in previous standards rulemakings. The 

I.BL-REM is explained in the TSD. 

Appendix B to that document addres5es 

the J..BL-REM in detail. The LBL-REM 

c:ontains algarit1uns w project average 

E!fficiencics. usage behavior. and market 

!:harell Lor each product. 

The market share calculatio.ns for the 

(Ushw.asheJ:. clothe. w.asher • .and dothes 

dryer analyses contaia the following 

~:teps: Potential purchasers may 

purChase any compet~ technology 

within. an end-use. or none. For 

dishwasbers. the decision .to purchase {)l' 

not is modeled. and the fraction of the 

total that chooses each class. e.g .• 

t,tandard 115V. lS :apeclf12dexogenously. 

Long-term market share elasticities have 

been assumed with respect to equipment 

price. operating expense. and income. 

:rhe effects of standards are expected to 

be lower operating expense and 

increased equipment pri£:e. The 

percentage chaDgeS in these quantities 

are used. together with the elasticities. 

to determine changes in sales volumes 

resulting from standards, Higher 

E~pment prit:es w;H decrease sales 

volumes. wiule lower operating 

expenses willincrealle them. The net 

result depen(is'on the standard le\'el 

2 The base case for these Ihree products 

. ":->'""enLQ :l:AECA's 1985 slanaarus. wmdl utc 

..!~Slgn slandards oniy. 

selecteci. &ad 4l.ociated equipment 

prices and oper.aq expenses. 

TOe ISI-RE)4 ill used to pr.oject 

reaideDtial.eDeJ'8Y use over the relevant 

time period. for these three produca 

with and without .amended standards. 

By comparing the energy ~umpt.ion 

projectioD al.a1temanv.e 81aDdarri levels 

with NAECA's 1988a.taudards. the 

Departlll'e1lt eatima\ed the a.mout of 

eaergy projected 10 be uv.ed during the 

period 1993-Z015.~ The energy saved ill 

expraueci ja Q~ Le .• quadrima- of 

Btu'.&. WUl1 reapeoct to electricity the 

sa.-.ings .are quads of source or primary 

energy. whic.b is the energy necessary to 

generate aDd transmit electricity. The 

Act defioes "ene~ 'Use" as the quantity 

of energy directly consumed by a 

CQAs!\mer product at point of nse. this ~II 

geoer~U¥ called "site" energy. as 

opposed to "SOIJllCe" energy. There are 

major diHereuces between tlu!se types 

of energy. In 1987. the amGWltof 

electrical energy con&umed at the siie 

. was ielltl tbaa on.e-third of the amount of 

source energy that was .required to 

generate.and tr.ansmit the aite electrical 

energy.· Theref.elre. it 1s import8Ct to 

identify whether the -electricity involved 

is site or source energy. 

The. LBlrREM projections are 

dependent on many asswnptioris. 

Among the most.important are 

responsiveaess Gf hOl1sehold appliance 

purchases to changes in energy priceS 

and consumer -income. future energy 

prices. future levels of housing 

construction. and options that exist for 

improving the energy efficiency of 

appliances. As is the case with any 

Gomplicated computer model simulation. 

the v alidityof till! -outputs is critically 

dependent on the inputs. 

2. Sigruficance of Savings. Under 

sectian.325{l}{3)(B) of the Act. the 

Department is prohibited from adopting a standard for a product if that standard 

would not result in "signiftcant" energy 

savings. While the term "significant" 

has never been defined in the Act. the 

u.s. Court of Appeals. in NRDC v. 

Herrington. 768F.2d 1355 (DC Cir.19851. 

concluded that Congressional intent in 

using the word "significant" was to 

• LBL-REM __ ~lIIJDIId to .analyze a lingle 

allmdani ·level or a~ate .Iandard *evela 1M!!' the 

entiI2 ~riocI. Tha.t ia. the £act that.a.a.t1Uldlwl might 

be revUed during subsequent rulemakinga W8t not 

considered by ·the medel. The DepllTtment believes 

that oil i • .not puaible SO 'Predict -w.hat·retult .ud! 

revte_1IIay ha .... and therefont;\ woald be 

speaaialive 1D.mcdeI.any parlicwaueauiL 

ThBEefore. for purposes of this rulemaking. Bach 

911rndard level that Will IInaly-zed wall'rojected to 

have been in place from the time of implemenlation 

to the year 2015. 

• Ene!!!)' Information Administration. Electric 

Puwtlr Annuul !!JS7. T dbles 25 and II:!. DO£;::lAO:l4ill 81). 19B1 

mean "nOlWriviaJ." Id. at 1m. ThUs. fDr 

!be nal.eula:kins DOE believes that neil 

staDdaM Jevel ~oDIIidered teIIII1ta in 

sigDificant energv saviRga. 

Co B.eintttob1e P'l'esamption 

NAECA establiahe.d new criteria for 

determining whether a standard level is 

economically justified .. Section 

3ZSltlt%l{B){iiiJ states: 

"If Out Sec:reWy &cis !&bill .. additional 

coat ~ the consumer of pun:hniDg a product 

comp1ylus with aa Bneqy ccmaervatillll . 

ataDdan11eve1 will beJa. than three times 

the value of the enl!l1JY .aviJzp during the 

fitat year that the consumer will receift a. a rewk of the 9t8Rdertt •• calmiatt!d under-the 

applicable &eat procedale. there .ball be • 

rebuttable -presumptitm that udl.taDdani 

level iseconolllicaJJy justffieli A 

detenniDatian by the Secreswy that lUcia 

criterion.il not met ahaU not be taken into 

CODIIideration in the Secretary'. 

determination of whetber a atandard.is 

economicaUy justified." 

If the increase in initial ptice -of an 

appBlUWe due to a caDServ.aUoa 

standard woWd repay Wtelf to the 

COJHlllDlel' of energy s8viDBsiD leu than 

three yean!. then it is pretMiB1ed that 

such &tandaNi is economically jU$tifNld.~ 

. This p:'esumption of economic 

jusufication can be rebutted upon a 

proper showing. 

d. Ec.."1lomic JastificatioR 

As noted earlier. section 325{1}{2J(BJ(i) 

of the Act provides seven factors to be 

evaluated in determining whether a 

conservation standard is eco~micany 

justified. 

1. Economic Impact 0:lI Manufacturers 

and Consumers. The engineering . 

analysis identified improvements in 

efficiency along with the associated 

costs to manufacturers for .each class of 

product. For each design option. these 

costs constitute the increased per unit 

cost to manufacturers to achieve the 

indicated energy efficiency levels. 

Manufacturer. wholesaler. and retailer 

markups will result in a consumer 

purchase price higher than the 

manufacturer cost. 

To assess the l1'kely impacts of 

standards 011 manufacturers. .and to . detennine the effects of standards on 

different-sized rums. the Department 

used a computer model that simulated 

hypothetical firma in the three industries 

under consideration. This modeL the 

• For Uris c:e.k:ulll1ion. the Depllrtftletlt calculated 

colt.of-operation bued on \be DOE WI procedures. 

Therefore. the consumer is a .. umed 10 be an 

"aver&8fl" consumer as defined by the DOE lest 

proc:edureL ConalllDeni ~.&IIMI the ilroQ\IQIa le .. 

tIuua.&he test proceciure a_ wilt experienoe Jl 

lo~er payback while those thaI lUe them morethao 

. ~he test p:'Uced~re a,;sumes WIll ha"'e 8 sDor:cr 

payback. 
. .~' 

.. 

. ,-" . 

Lawrence Berkeley Laboratory 

Manufacturer Impact Model (LBL-MIM). 

is explained in the TSD. See Technical 

support Document. appendix C. LBLMIM provides a broad array of outputs. 

including shipments. price. revenue. net 

income. and ROE. An "Output Table" 

lists values for all these outputs in the . 

base case and in each of the standards 

cases under consideration. It also gives 

a range for each of these estimates. A 

"Sensitivity Chart" shows how ROE 

would be affected by a change in any 

one of the model's nine control 

variables. 

For consumers. measures of economic 

impact are the changes in purchase price 

and annual energy expense. The 

purchase price and annual energy 

expense. i.e .. life-cycle cost (LCC). of 

each standard level are presented in 

chapter 6 of the TSD. Under section 325 

of the Act, LCC analysis is a separate 

factor. to be considered in determining 

economic justification. 

z. Life-cycle Costs. One measure of 

the effect of proposed standards on 

consumers is the change in operating 

expense as compared to the change in 

purchase price. both resulting from 

standards. This is quantified by the 

difference in LCC between the base and 

standards cases for the appliance 

classes analyzed. The LCC is ·the sum of 

the purchase price and the operating 

expense. including maintenance 

expenditures. discounted over the 

lifetime of the appliance. 

The LCC was calculated for the range 

of efficiencies in the Engineering 

Analysis for each class in the year 

standards are imposed using consumer 

discount rates of Z. 7. and 15 percent. 

The purchase price is based on the 

factory costs in the Engineering 

Analysis and includes a factory markup 

plus a distributor and retailer markup. 

Energy price forecasts are inputs that 

are taken from the 1989 Annual Energy 

Outlook of the Energy Information 

Administration (DOE/EIA-G383(89)). 

Appliance usage inputs are taken from 

the relevant test procedures and recent 

Procter and Gamble data. (Procter and 

Gamble (P8:G) No. 27. at 2-3. s 

The differences in LCC between the 

base case and various levels of . 

standards for dishwashers. clothes 

washers. and clothes dryel'! are 

presented in chapter 6 of the TSD. These 

LCC's are calculated at a 7 percent 

discount rate: a higher rate. e.g .• 15 

percent. gives a smaller difference. 

• Comments on the proposed rule have been 

assigned docket numben and have been numbered 

consecutively. Statements that were presented at 

the September 20. 1969. public: hearing are identified as Testimony. 

;~' .. ';. 

: .. .#" . :.-::--

while a lower rate. e.g., 2 percent. 

produces a greater difference. This 

results because the consumer benefits. 

i.e., reduced operating expenses. accrue 

over the life of the appliance, and are 

discounted back to some base year. 

Therefore, the lower the discount rate. 

the greater the resulting consumer 

benefits after discounting. In addition. 

aa can be seen in the various LCC 

curves. the use of a higher discount rate 

results in a flatter curve. . 

When the LCC numbers are plotted 

graphically (on the Y axis) against unit 

energy consumption (on the X axis). the 

data generally produce a curve that is 

concave from above in shape. This 

means that at first the LCC curve will 

decline as efficiency improvements are 

made. will reach a minimum (which may 

or may not be discrete). and then rise. 

This indicates that the f1r8t efficiency 

improvements will produce energy 

savings. the value of which will more 

than pay for the deSign change. As 

additional efficiency improvements are 

made. it becomes increasingly costly to 

save more energy, and, eventually. the 

value of the energy savings will not 

cover the expenditures for the design 

improvements. 

The minimum of the LCC curve was of 

particular interest in the analysis. The 

minimum of the curve represents that 

level of efficiency improvements that 

maximizes the difference between the 

value of energy saved and the additional 

consumer expenditures for the relevant 

efficiency improvements. Therefore. 

design options that corresponded to the 

minimum point were considered as 

standaNllevels for each class .. The Department conducted a net 

present value (NPV) analysis to assess 

the differential economic impacts on 

consumers that would occur from the 

adoption of amended standards for 

these three products compared to a base 

case with no change in the NAECAimposed 1988 standards. See Technical 

Support Document. ·chapter 5. The LBLREM calculates the total expenditure for 

each product (discounted total value of 

energy consumption from 1993 through 

the last year of use for those products 

purchased through the year 2015). plus 

the total discounted expenses for 

equipment purchased from 1993 through 

2015. with more stringent standards and 

with NAECA 1988 standards. The NPV 

analysis is similar to the LCC analysis. 

in that the greatest NPV should occur at 

the standard level that corresponds to 

the LCC minimum for the product.? The 

1 The NPV of a standard. per appliance. is 

calculated for all affected appliances that are 

purchased in the projection period. while the LeC is 

calc:ulated only for the lifetime of an appliance that 

NPV for each product at the different 

standard levels is identified in section 

IV of this notice. . 

3. Energy Savings. While the 

significant conservation of energy is a 

separate statutory requirement for 

imposing an energy conservation 

standard. the Act requirea DOE. in 

determining the economic justification 

of a standard. to consider the total 

projected savings that are expected to 

result directly from revised standards. 

DOE used the LBL-REM results. 

discussed earlier. in ita consideration of 

total projected savings. The savings for 

the three products are provided in 

section IV of this notice. 

4. Lessening of Utility or Performance 

of Products. This factor cannot be 

quantified. In establishing classes of 

products and design options. the 

Department tried to eliminate any 

degradation of utility or performance in 

the three products under consideration 

in this rulemaking. That is. to the extent . that comments. or DOE's own research. 

indicated that a product included a 

utility or performance-related feature 

that affected energy efficiency. a 

separate class with a different efficiency 

standard was created for that product. 

In this way. the Department attempted 

to minimize the impact of this factor as a 

result of the standards that were 

analyzed. 

5. Impact of Lessening of Competition. 

The determination of this factor is to be 

made by the Attorney General. This 

determination is presented for each 

product in section IV of today's notice. 

In addition, a copy of the Attorney 

General's letter containing the findings 

is published below. 

Dear Mr. Davis: By letter dated October 24. 

1989. the Department of Energy ("DOE'" 

transmitted to the Attorney General a notice 

of proposed rulemaking (54 FR 32744) 

addressing energy standards for three classes 

of household appliances. Section 325 of the 

Energy Policy and Conservation Act as 

amended in 1987 (42 U.S.C. 62951. requires the 

. Attorney General.to detennine the impact. if 

any. of any lessening of competition likely to 

result from the proposed standards. 

Competitive impact is one of seven criteria to 

ba considered by DOE in evaluating proposed 

standards. This letter contains the 

competitive impact determination of the . 

Department of Justice ("Department"). 

Summary 

The evidence available to the Depa~tment does not indicate that any significant 

lessening of competition is likely to result 

from the imposition of the proposed 

standards for dishwashers and clothes dryers 

is purchased in the first year of the relevant 

standard. Therefore. NPV and LeC estimates. per 

appliance. may not c:orrelate exactly. 
" -I " • ..",.' I ..... ; t", 

:.:/;j. ..• : . .<:!'. \,:,~,:':~~~~':~;.~. . ", ... '-';;:". 

contained in DOE'a Notice of Proposed 

RuJemaking. Par dishwaahera. it is the 

Department" Judgment based on the 

BvaUable evidence. that no aignificant 

Bdvene competitive Impact is likely; but. 

'mder certain limited conditionl described 

below. an unquantifiabJe advene competitive 

impact would be p08lible. For clothes dryen. 

the evidence effirmatively Ill88eata that. no 

,advene competitive Impact is likely. The 

I!vtdence available to the Department 

:indicates that a significant lessening of 

I:ompetition may reauJt from the Imposition of 

Ithe proposed atandarda for clothe. washen 

Imder certain conditions. 

The Notice of Proposed Rulemaking 

discusses 80me standard levels higher than 

the levela proposed but state. that DOE 

c:oncluded that theae higher atandards are not 

IlconomicaUy justified. Accordingly, the 

Department's competitive Impact 

detennination cOnliden onJy the atandards 

IIctually proposed and does not cover higher 

IItandards discussed but not proposed in the 

Notice of Proposed Rulemaldng. 

J)1acuuion 

In appraising the competitive effect of the 

proposed standarda In the context of this 

I,tatute. the Department haa examined the 

relevant marketa within which the standards 

will operate. The Department baa then 

(:onaidered whether adoption of the 

standards would be likely to contribute to 

i:ncreased concentration levels and other 

relevant market conditiona that would 

fllcilitate either oligopollstlc pricing or actual 

price fixing. The Department haa also 

considered whether, independent of or in 

conjunction with any increaae in . 

concentration. the standards would be likely 

tl) facilitate oligopolistic pricing or price 

fixing by increasing product homogeneity. 

In this instance. the Department has 

utilized the ffiiI computatlona. commonJy 

employed in. market analyais and described 

in the Department's Merger Guidelines 

("Guidelines"). as an initial "screen." At 

h!vels of concentration below 1.000. the . 

number of competiton ordinarily la aufficient 

to make competitive pricing likely and to 

defeat oligopolistic pricing. Even if the 

standards resulted in increased costs and 

mduced the number of competitors. or 

increased product homogeneity in some 

measure. the Department generally would 

e:(pect that markets with that level of 

CI)ncentration wouid continue to enjoy a 

substantial measure of competition. 

The enaiysls of dishwashen. clothea 

washen. and clothea dryen II not completed 

by applying thia acreen because the risk of an 

adverse competitive Impact is not diminished 

b:V the existing market structure as reflected 

i~1 the HHl figures. Based on data contained 

i~1 the technical support documel\t, 

di:shwashers. clothes washen. and clothes 

dJ:yers have ffiiI figures of about 3.000. 3.100. 

and 3.300. respectively. These figures reflect . 

high levels of concentration (according to the 

Guidelines. marketa with ffiillevels above 

1.800 are highly concentrated). It Is thus 

pJ'udent to examine more closely the 

possibility that the standards could increase 

concentration within a market. increase 

pl'Oduct homogeneity. or both. 

The possibility that concentration might 

increaae depends primarily on whether 

compliance with the standarda both (1) 

increases costs Significantly and (2) resulta in 

such increased costs being felt more severely 

by some fll1Jla than othen. Although 

increased costa may reduce demand. that 

alone would not necessarily affect market 

structure. However. concentration could 

increase if the cost increases are both 

significant and affect smaller firms mol'& 

severely than large ones: costs that vary with 

output (e,g" adding an automatic tennination 

devtce)lhouid not disadvanlage smaller 

firma while fixed costa or costa independent 

of output (e,g., redeaign of a dishwasher) 

might disadvantage a Imaller firm with a 

leller number of units acrosa which to spread 

the lame fixed costs. 

Nevertheless. before such asymmetrical 

cost increases could affect competition 

adversely, the irtcrease. would have to be 

sufficiently severe and asymmetrical that 

they would force from the market one or 

more of the amaller significant competiton or 

substantially decrease their market share. In 

addition. levels of concentration would have 

to rise aubstantially because of this effect. 

Unlike a merger, where the acquiring firm is 

likely to become lubstantially larger and the 

other firma would remain the lame aUs. the 

common result of a firm exiting the market 

would be that each of the remaining 

significant competiton is likely to increase its 

market share to a limited extent. Finally, 

other market conditions (e.g .• entry barriers) 

would have to be conducive to ollgopolistic 

pricing or price fixing. 

The available evidence in this instance 

does not demonstrate that such a lessening of 

competition would be likely to occur if DOE 

adopts the proposed standards for 

dishwashers. This evaluation is based on 

Information concemiDg the Identity and size 

of ,the principal competitors and other market 

cGlndiLtons. However. for this clasa of 

products. the evidence does not wholly 

foreclose the poseibility of an anticompetitive 

impact. For example. some evidence 

indicatea that increases in fixed costs may 

occur and affect Bome smaller competiton 

much more lIeverely than some larger ones, U 

the lmaller fU'l1ls thereby lose market share 

to their larger rivals. then the HHI for 

dishwal!hen could increase Significantly 

(according to the Guidelines. a 50 point 

increase in the HHI in a highly concentrated 

market is significant). Other evidence. 

however. indicates that the market Ihare of 

the largeat competitor aillo may be 

significantly decreased. thus decreasing 

market concentration. If DOE concludes that 

its standards for dishwashen will alter 

significantly the atructure of the market by 

subetantlally decreasing the relative aize of 

the smallest significant competitors without a 

sufficiently large, compensating decrease in 

the largest flfl!l'lI size. then a further review 

of the competitive impact would be 

waffanteti 

For clothes dryen. the evidence 

affirmatively suggests that no adverse 

competitive impact Is likely. The evidence 

indicates that adding automatic termination 

devices will achieve the desired result and 

that the fixed costa associated with the 

,.," . 

addition will ba minilital and will Qat 

disproportionately affect amalier competitors. 

For clothes washers. the available 

evid\lnce indicates that a lignificant 

le8l8ning of competition may occur under 

certain conditioDl. The Notice of Proposed 

RuJemaking indicete. that proposed standard 

levels 1 and Z can be met by eliminating the 

warm rinse option and ilddina thermostatic 

IIlixin8 valves. The available evidence 

Indicatell that 80me manufacturen may not 

be able to comply with the proposed 

standards by makiDs jUil thele design 

changel and may need to undertake more 

substantial redesign or retoollng that would 

impose substantial fixed costa. U all 

compeUton can meet the proposed standards 

by making the suggelted design changes. then 

a lignificant lenenlng of competition is not 

llkely. U. however. al the available evidence 

Indicates. some competitors, lIuch as Speed 

Queen. will have to engage in more 

substantial redesign or retooling to meet the 

proposed Itandards. then .ubstantial 

increasel in fixed costa will occur. These 

increased fixed costa are likely to affect 

smaller eompetiton much more severely than 

larger oneil. U DOE concludes that Its 

standards for clothes wasbers will drive the 

smalleat significant competitor. Speed Queen. 

out of the maricet or lignificantly decrease its 

market sbare. then a further review of the 

competitive impact would be warranted. 

The available evidence does not indicate a substantial threat that the standerds for 

dishwashers. c10thell waahers. and clothes 

dryers would threaten competition by 

increasing product homogeneity. The 

dishwasher and clothes washer standards 

are performance rather than design 

standards. so that they can be met by 

different eombinatioDl of features. The 

clothes dryer standard is a prescriptive 

standard requiring all dryers to have an 

automatic termination device. The standard. 

however. allowa manufacturen to choose 

between a moisture or temperature 

termination device. In addition. the energyusin8 characteristics of dishwashers and 

clothell washen. all well as the automatic 

termination device required for clothes 

dryers. represent onJy one aspect of these 

products. and existing variation in many 

other features would be expected to continue. 

In making its determination. the 

Department bas relied on the facts set forth 

in DOE's technical support document. as well 

as other information that could be collected 

by the Department in the time allowed and 

without the benefit of compulsory process. 

Sincerely. 

James F. Rill. 

Assistant Attomey General. 

6. Need of the Nation to Consen'e 

Energy. The results of the environmental 

effects from each standard level for 

each product will be reported under this 

factor in the product specific discussion 

(section IV) of this notice. 

7. Other Factors. This provision 

allows the Secretary of Energy. in 

determining whether a standw:cI is 

economically justified. to conslder any 

l.~,. 

~ - ',. -:-. ,", 
;':;::(f' . . ';"'.'.);;~,:~:~;~ ~";,, ,,,,",,.' -" ~ , ~' - ; 

-,. ' '. '.--- ~"' .. , .. -. 

. t:, ..... ,~tar,/. V'OL sa.: No.:·93· /',TuesdaYirMay,l4,r.t991 ,.Rules.ad ·Regul~tiaD. 

other factors that the Secretary deems to 

be relevant. One such factor is the 

estimated water sayjup &om more 

efficient dishwashers and clothes' . 

washers. 

m. Di.scuuion of CoIlUD8llIa 

. . The Department received 40 written 

commenta in reepoIIIIe to the August 

1989, proposed rule, and received 

testlmolly from 12 persODS at the 

September 20, 1989, public hearing. 

These commentl addres.ed all aspecta 

of the aDalyaiJ. In this .ectlon. the 

Department will pre.ent discuuions of 

the general8lUllyticallsaue. raised by 

the comments. followed by diacussicma 

of the product-epecific issues. 

o. General Analytical Comments 

Markup 

The Natural Resources Defense 

Council (NRDC). the Ohio Offk:e of 

CODSmll8l'S' Counsel (Ohio) and General 

Electric Appliances (GU) commented 

un lIJ8DUfacturer markup. used in the 

analysis. (NRDC. No.5 at 20 and No. 16 

at 51: Ohio. No. 22 at 8; and GEA. No. 21 

at26). 

NRDC commented that the record 

does not support the markup assumption 

between factory and retail of 

approximately 1.5. (NRDC. No. 16 at 51). 

The markups used in the analysis 

have been derived from manufacturer 

data over the history of this program. 

Including the earlier 1980 rulemaking. 

Moreover, NRDC is mistaken regarding 

the markup used in the analysis. The 

totai markup from manufacturer cost to 

retail price used is approximately 2.00. 

with the actual amount p.ositively 

related to the unit's efficiency. The 

markup from manufacturer cost to 

manufacturer selling price. and from 

manufacturer selling price to retail price 

were considered separately. 11te markup 

to manufacturing selling price is 

approximately 1.31. while that to retail 

price is approximately 1.46. A complete 

discussion of the markup is found in the 

TSD. See Technical Support Document,' 

appendix C. DOE haa reviewed NRDC's 

comment and finds no basis for 

changing the m~p. 

In the analysis for the proposed rule, 

marginal variable costs to 

manufacturers were assumed to be 

passed on with a markup. The NRDC 

took exception to this, claiming that 

marginal variable costs cannot be 

marked up. only passed on. (NRDc, No. 

16 at 51). 

In response. the Department notes 

that the NRDC's contention is valid only 

in Instances of perfect competition. 

Perfect competition is an economic 

model of a market with the following 

characteristics: Each economic agent. 

l,e .. buyer and seller. is so sm,all relative 

to the market that it cannot influence 

price: the products of each seller are 

homogeneous, i.e .. perfect substitutes; 

there is free mobility of all resources. 

Including free and easy business entry 

into. and exit out of an industry; and all 

economic agents tn the market have 

complete and perfect knowledge of the 

future. 

Obviously. with these restrictiDg 

requirement&, DO market has been or can 

be perfectly competitive. 

One identifying characteristic of a 

perfectly competitive market is that 

firms are all producing at their optimal 

levels and thus no firm wishes to 

increase sales. Clearly, perfect or pure 

competition is npt present here. Under 

conditions of imperfect competition, i,e .. 

aU forms of market structure except for 

perfect competition, marginal costs, l,e .. 

the variable costs associated with the 

last unit of output, are paaaed OD with a 

markup. and it is the ability to do 80 

which is evidence of market power. 

Therefore. based on the consideration of 

the above. the Department haa included 

fl markup for all variable costs in the 

final rule. 

In commentiDg on the impact cif design 

options' costs and efficiencies on 

manufacturers' ROE. the Association of 

Home Appliance Manufacturers 

(AllAM) stated that the DOE analysis 

underestimated the negative impact of 

standards on manufacturers' 

profitabilitiea. or ROE's. In some cases, 

the analysis even suggested that return . 

OD equity would be increased by the 

impo§ition of standards. AHAM stated 

nirther that it appeared to be the 

relatively high costIlow efficiency 

design options that were the likely 

prospects for increasing ROE for the 

manufacturers. AHAM stated, ''These 

conclusions not only defy common 

sense. but they contradict real world 

experience' documented in the TSD," 

(AllAM. No. 29 at 2). 

In response. the Department notes 

that AHAM is incorrect in believing that 

the TSD shows relatively high cost/low 

{incremental} efficiency design options 

'are the likely prospects for higher ROE. 

In fact, there IS no such correlation. In 

the case of standards. ROE may 

increase because of the manufactarers' 

ability to mark up marginal costs to 

buyers. It depends little on the energy 

efficiency nature of a design option. 

Therefore. ·this unsupported assertion 

that DOE's economic analysis selects 

high cost and less appropriate energy 

efficiency standards i8 wrong. 

In the manufacturer analysis for the 

proposed rule. the Department noted 

that appliance prices had risen more 

slowly than consumer and producer 

price indexes. despite increased energy 

and compon.ent prices during the last 

two decade •• 

From ita statements. AHAM 

concluded that the Department 

"rec:ognized that even though appliance 

lIWlufacturerl experillDC8d lDcreaaiJ18 COlts 

ror campaaenta. lIWlufac:tunn went unable 

to completely puah these COlts through to the 

CODIUIDer in the form ofhisher priceL" 

(AHAN. No. %9 at 8). 

The Department believe. that . 

AHAM's conclusion is tncorrectiy 

drawn. Saying that appliance prices 

have risen more slowly thaD standard 

inflation indices and that energy and 

component prices for appliance 

manufacturers have also risen implies 

nothing about whether or not 

manufacturers can completely pass 

coata through to the consumer. If energy 

and component prices haw not risen as 

fast as inflation indices, manufacturers 

could pass through costa and the overaU 

rise in the level of appliance prices 

would still be less than that of the 

ConSumer Price Index. What'. relevant 

is how appliance prices have risen 

relative to the increased costl of 

manufacturer inputs. not relative to 

inflation Indices. 

AHAM and Whirlpool suggested that 

the modeling of manufacturers' impacts 

was simplistic in that it aaaumed 

. manufacturers' customers are individual 

end-users of the product purchased and. 

as such. have little power to control the· 

prices they pay. These comments 

suggested that manufacturers face large 

retailers and buying groups who have 

monopsony power. ie .. who can put 

pressure on the manufacturers' selling 

prices. (AllAM. Testimony at 6 and No. 

Z9 at 3-4; Whirlpool, No. 20 at 2). 

On this point. both AHAM and 

Whirlpool are mistaken: the ~MIM 

does account for monopsony power. i.e .. 

powerful purcltasing groups. in the 

market for these products. The model 

does not simply assume that 

manufacturers face "individual end 

users," In fact. the LBL-MIM projects 

results of 32. 33. and 24 firma for the 

dishwasher. clothes washer. and clothes 

dryer industries. respectively. This is 

clearly higher than observed industrial 

concentration. since the four largest 

fl11DS in each industry control over 90 

percent of market share. The number of 

finns is estimated from data on 

revenues. costa. and ROE. 11te 

Department attributes this result of 

"greater than observed"· competition to 

the monopsony power of these large 

buyers in the market. and it is part of the 

model. A "simplistic model" where 

. profitability was estimated from the 

... 
r

.-

: 

. 

o bserved number of firms would result 

ilu much higher degree of profitability. 

In its comment. Whirlpool appears to 

try to point out that the retailers are 

gaining even more power. This may well 

be true, but Whirlpool does not suggest 

that appliance standards willln any 

¥lay contribute to this increase in 

monopsony power. DOE's task is to 

analyze how the position of 

manufacturers will differ from what it 

would have been without standards. not 

from what it is today. 

In the manufacturer impact analysis. 

the Department concluded that there 

would be real increases in the pricing of 

appliances in the future. Whirlpool took 

e.x:ception to this conclusion: 

"M we look to the future. sales of 

al!)pliances will decllne into 1990 and then 

gl'ow for the next several yeal'l, however. this 

gl'Owth will be markedly slower than recent 

yl!ar.. In fact growth in sale. of the core PI~ucts should averege about 1.2 percent for 

t~le 1989 to 1994 time frame versus 1.9 percent r~lr the previous ten years. which included a . 

dl!ep recession. During the strong growth 

yuars. prices of appliance. have risen only 1.4 

purcent (since 1982) while inflation as 

measured by the Consumer Price Index has 

ri:.eD almost 29 percent. To remain profitable 

in this scenario. the industry has continued to 

IDlprove costs and productivity. however. 

CCtsts have risen more rapidly than 

ploductivity improvements in recent years. 

111erefore. most manufacturers were forced to 

raise prices in late 1988 and mid-19S9. But. as 

industry volumes are declining. many 

manufacturers are searching for ways to 

increase their own sales levels to support 

plant fixed costs and capacity. The easy 

ar18wer has been price discounting. With this 

approach. profit margins faU and smaller 

companies are likely to be impacted more 

sil!Jlificantly since they do not have the' 

economies of scale. The DOE asawnes real 

gains in pricing in future years which would 

nClt 8eem appropriate based on these facts." 

(Whirlpool. No. 20 at 1-2) 

Whirlpool's assertion is that DOE 

a~;sumes "real gains in pricing in future 

y(!ars which would not seem appropriate 

bused on these facts." Whirlpool. 

however. provided only two comments 

about industry price setting, and both 

supported DOE's analysis. 

Whirlpool's fU'St point is that "costs 

hs,ve risen more rapidly than 

productivity improvements in recent 

years. Therefore most manufacturers 

wlue forced to raise prices' * •. " This 

is exactly the situation described by the 

lOlClg run part of MIM: standards will 

cause cost increases much greater than 

productivity improvements, which will 

force most manufacturers to raise prices. 

Whirlpool's second point is ~hat "as 

industry volumes are declining, many 

manufacturers are searching for ways to 

inl:rease their own sales levels .• 

nle eRSY answer has been price 

discounting." Whirlpool is saying that 

volumes are declining despite whitt Wit" 

just said about volumes increas~ at 

the rate of 1.9 percent over the last ten 

years. Whirlpool must therefore be 

referring to a short run phenomenon. 

The Department recognizes this shortrun phenomenon which occurs regularly 

during downturns in the business cycle. 

DOE has run regressions to estimate the 

amount of price decline that is caused 

by the shortfall in sales during a slump. 

and then assumed that a shortfall In 

sales due to standards would cause the 

same short-run response in price. This 

analysis has been incorporated in the 

LBL-MIM's short-run analysis and the 

results are reported in chapter 7 of the 

TSD. . AHAM and Whirlpool were critical of 

the Department's conclusion that 

standardS-induced. higher-priced 

appliances will lead to increased sales, 

profits, ROE. and competitiveness for 

the appliance industry. (Whirlpool. No. 

20 at 3: AHAM. No. 29 at 6). 

These comments are essentially 

critical of the LB~MIM's operating 

expense elasticity. It Is the operating 

expense elasticity that results In greater 

sales under standards. Whirlpool 

commented that the analysis uses too 

large an operating expense elasticity. 

and AHAM argues that a smaller 

operating expense elasticity would 

prevent the estimated price increases. 

AHAM stated that consumers' appliance 

purchase decisions are not usually 

influenced by energy efficiency factors. 

but. rather. by quality. price, and brand. , The Department's estimates of 

operating expense elasticity come from 

econometric work done by Oak Ridge 

National Laboratory (ORNL). which is 

cited in the TSD. Unfortunately, the 

comments do not provide. an adequate 

basis for imprOving or replacing those 

estimates. DOE agrees that energy 

efficiency is probably not as important 

as the three factors cited by AHAM. It is 

not clear. however. that the comments 

contradict ORNL's estimated elasticities 

of -0.125. -0.055. and -0.257 for 

dishwashers. clothes washers. and 

clothes dryers, respectively. The 

Department agrees that operating 

expense elasticities may warrant further 

research. However, the commentators 

supply no quantitative information to 

justify any revisions. 

The LB~MIM is capable of predicting 

either an increase.or decrease in ROE in 

the short run. While there may be a 

positive increase in shipments at some 

standard levels. an examination of the 

other standard levels illustrates the case 

of decreased shipments. In'the short run. 

the model often predicts price will 

decline. with a loss in profit. In the long 

run. however, (in the· Department's 

analysis. about eight ye~) the change 

in shipments will be compensated for by 

changes in the industry's capacity which 

will eliminate the short-run decreases in 

firma' ROE·s. 

Whirlpool stated that a long-run result . of energy conservation standards would 

be to lower profit margins. As a 

cODsequence, this could force remaining 

smaller manufacturers out of business or 

into consolidation with larger firms. 

thereby hurting competition. (Whirlpool, 

No. 20 at 3). 

In response, the Department notes 

that because of the increasing industry 

flXed costs from investments in 

automation and productivity 

improvements. there has been an 

historic trend to increasing industrial 

concentration in the industries involved. 

Energy conservation standards have 

played no role in this trend and. given 

the size and direction of the predicted 

changes in ROE. they are unlikely to 

influence concentration to an 

appreciable degree. 

LBL Residential Energy Model 

The Environmental Defense Fund 

(EDF) commented that there is no basis 

for the LB~REM's assumption that 

consumers respond to Lee when 

purchasing appliances. and that the 

opposite appears true. (EDF, No. 19. at 

4). 

The LB~REM is used to project 

residential energy use during the 

relevant time periods. The model's 

projections are dependent on many 

assumptions: among the most important 

are responsiveness of household 

appliance purchases to changes in 

energy prices and consumer income. 

future energy prices, future levels of 

housing construction. and options that 

exist for improving the energy efficiency 

of appliances. As is the case with any 

complicated computer model simulation. 

the validity of the outputs is dependent 

on the inputs. While it may be argued 

that there is or is not a direct link 

between appliance purchase decisions 

and LeC. the Department's appliance 

standards analyses have shown that 

appliance efficiency, in general. has 

improved over the last 20 years. The~ 

may be certain appliance types or 

classes whose efficiencies have not 

increased or increased very littie. but 

overall ap'pliance efficiency has 

increased. This is supported by 

numerous filings to the Department on 

the appliance standards rulemakings 

and other information available to the 

Department. including sub~ittals to the 

FTC for the appliance labeling program .. 

See Technical Support Document . 
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2ZZ58 -. . .. Feei .. i R .. I Vol. sa. No •. 93 ,. TUesday, ~y 14; 1991 I RUles and RegubtiODS . 

Energy Conservation Stanc;larda for 

Consumer Products: Refrigerators. and 

Furnaces, DOE/CE-0277, (November. 

1989) and Supplement to March 1982 

CoD8WDer Producta Efficiency 

Standards Engineering Analysis and 

Economic Analysis Documents. DOEI 

CE-0045 (July, 1983). The Department 

utJlJzea aU available information on 

appliance choice to calibrate the energy 

use forecasts of the LB~ and 

while there may be questions 

conceming a particular algorithm. the 

Department believes that the LBL-REM 

provides reasonable forecaste. 

DOE does not believe that most 

consumers actually calculate LCC: 

rather. that purchase decisions can be 

characterized as if an implicit tradeoff is 

being made between equipment price 

and operating expense. LBL-REM 

characterizes that implicit tradeoff in an 

LCC framework by using observed 

purchase behavior in order to project 

; o..Iture efficiency choices that are a 

f·.mction of both equipment.price and 

,,'perating expense. 

To calculate energy savings that can 

result from standards. EDF proposed an 

alternative methodology. which 

consisted of freezing efficiencies at 

current levels for the base case. and 

calculating energy savings against the 

fixed levels. DOE believes that if energy 

prices became sufficiently different from 

current values. appliance consumers 

would make a different choice of 

·efficiency from what they are doing 

now. Thus, there is no basis for freezing 

the efficiency. Therefore, DOE rejects 

EDFs proposal. 

Energy Prices 

The Environmental Protection Agency 

(EPA), State of Oregon Department of 

Energy (OnOE) and the New York State 

Energy Office (NYSEO) commented on 

the appropriate values of energy prices -

for use in the analysis. (EPA, No. 36 at 3: 

ODOE. No. 15 at 3: and NYSEO, No. 32 

at 11). EPA and ODOE aigned that DOE 

should use marginal costs of energy and 

that by not using marginal cests. DOE 

underestimated the savings to' society. 

NYSEO, on the other hand, agreed with 

the Department that it is "most 

appropriate for DOE to use national 

average energy prices and usage rates." 

DOE has reviewed EPA's and ODOE's 

comments and disagrees. The purpose of 

the analysis is to estimate the impacts of 

standards on the Nation. including 

consumers and manufacturers. In 

analyzing the impacts of the standards 

en consumers, DOE perfonns LCC 

analysis as required by section 3Z5(1) of 

the Act. Furthennore. DOE analyzes the 

payback of each standard level as 

required by section 3Z5(l)(2)(B)(iii) of the 

Act. In each analysis, the Department is 

required to consider the expense to the 

consumer. The consumer, as EPA 

recognized in its comment. pays the 

average cost. not the marginal cost. 

Similarly, in evaluating the effect of the 

standard on the Nation. DOE uses the 

LBL-REM to forecast energy savings 

and NPV. DOE believes that this 

calculation captare9 the effect of the 

standard on the Nation. whereas the 

marginal cost would overestimate the 

impacts, since not aU energy used is at 

the marginal rate, and the marginal rate 

is typicaUy the highest cost energy to 

produce. Therefore, after considering the 

above. DOE rejects the proposal to use 

marginal energy prices.· 

Payback 

In aCC01'dance with section 

325{l)(2)(B)(iii) of the Act. DOE is 

required to calculate the payback of 

each standard in the first year of the 

standard. In order to calculate this 

payback. DOE uses the forecast of 

efficiency from the LBL-REM and 

compares the increase in price of the 

appliance at each standard level to this 

level and the energy savings during the 

rll'8t year. AHAM commented that DOE 

should consider i."l.cremental payback. 

i.e., the individual payback of each 

design option, rather than the combined 

payback as presented in the August 1989 

proposal. (Gants, Testimony at 7; 

AHAM, No. 29 at 4-6). The EDF. 

however, urged DOE tei use the 

cumulative payback. (EDF. No.3 at 3-4). 

DOE has reviewed AHAM's proposal 

and disagrees: the Act clearly requires 

L'le Dep~rtment to consider the 

cwriulafive impact of the standard in 

calculating payback in accordance with 

section 325(1)(2)(B)(iii). The Department. 

however, does consider individual 

paybacka when ordering the design 

options in the engineering analysis. and 

it considers incremental paybacks when 

evaluating the economic impact of 

standards. Therefore. in consideration of 

the above, the Department continues to 

calculate cumulative paybacks. 

Whirlpool raised the issue of the 

difference in savings that exists for 

dishwashers and clothes washers, 

depending on whether the unit fs 

connected to an electric or gas water 

heater. (Whirlpool. No. 20. at 8). 

In reporting the paybacks and LCC 

results in the proposed rule. DOE 

presented only those for units connected 

to electric water heaters. DOE did not 

. report the values for products connected 

to either gas or oU water heaters. 

products which represent over 50 

percent of the market. The energy use 

analysis and NPV calculation in the 

LBL-REM. however. did include a 

consideration of electric. gas and oil 

water heaters. After considering the 

issue, the Department decided to present 

payback and LCC results for 

dishwashers and clothes washers 

connected to either electric water 

heaters or gas water heaters. DOE is not 

presenting results for oil water heaters 

. because the annual cost-of-operation of 

oil water heaters is nearly equal to that 

of gas water heaters: therefore the 

results for dishwashers and clothes 

washers connected to gas water heaters 

is representative of those. connected to 

oil water heaters. 

Rebuttable Presumption 

Congresswoman Claudine Schneider 

(Schneider), ODOE. NRDC. NYSEO. 

EPA. Congressman John DingeU 

(DingeU), and Public Citizen argued that 

DOE has failed to prove why level 3 for 

dishwashers and clothes dryers and 

level 4 for clothes washers are not 

economically justified. (Schneider, No. 

10 at 2 and Schneider et oj •• No. 31 at 2: 

ODOE. No. 15 at 2: NRDC. No. 16 at 22-

25: NYSEO, No. 32 at 4: EPA. No. 36 at 1; 

Dingell. No. 35 at 1-3: and Public 

Citizen. No. 34 at 1). ODOE argued that 

DOE had not adequately rebutted 

standards with paybacks less than three 

years. and that DOE should accept aU 

measures with paybacks less than three 

years. 

DOE has reviewed these comments. 

Today's Final Rule reflects the 

Department's consideration of these 

comments and includes more detailed 

discussion of the basis of the fmal rule. 

Life-cyde Cost 

NRDC claimed that higher standard 

.levels were rejected in the p~posed rule 

because the Department had suggested 

that "usage of an appliance, and 

therefore savings. may be a function of 

utility costs." NRDC stated that the 

Department made this assertion despite 

any empirical infonnation to support it. 

Furthermore. NRDC charged that the 

proposed rule then stated. again wiihout 

any empirical infonnation to support the 

assertion. that consumers in areas with 

higher utility rates may already be 

purchasing the higher levels of 

efficiency in existing products. NRDC 

noted that the Department claimed t.hat. 

iC this were true. average savings could 

be lower than those that had been 

reported in the TSD (DOE/CE-0267. July 

1989) that had been prepared for the 

proposed rule. 

NRDC then stated that the 

Department's assertion is not only 

unsupported. "it is actually contradicted 

by the only regional data that has. ever 

been submitted to DOE records 
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F~R~ I Vol. 56, No. 93 / Tuesday, May 14. '1991 / Rales and.Regulation' -~~~~~~~~~~~~~~~~~~~~~ 

conl::emiDg appliance efficiency as a 

func:tion of utility costs." NRDC cited 

the '1983 appliance proceedings. wherein 

the Carrier Corporation had submitted 

daul showing that the areas of the 

COWltry with the highest air conditioning 

exp!nses. i.e .• New York (high rates) 

and Florida (high usage). had air 

conditioner efficiencies that were the 

same as the naUonal average air 

conditioner efficiencies. Therefore. 

NRIlC concluded: "Unless the 

assllmptions of regional price- or usageindlJlced variation in appliance 

efficiency for these products are valid. 

DOll's whole rationale for reducing the 

level of proposed standards vanishes." 

(NRDC. No. 16 at 16-17). 

NlIDC is correct in stating that the 

Department did not present any 

empirical infonnation to support its 

assertion that consumers in areas that 

haVE! high energy expense. would tend 

to purchase appliance. with efficiencies 

higner than the national average; NRDC 

is Do't correct. however. in concluding 

that if the assertion is invalid. the 

rationale for reducing the level of 

proposed standards vanishes. That is 

because there are seven factors of 

economic justification that the 

Depllrtment considered in arriving at its 

conclusions. 

NYSEO charged that the Department 

was incorrect in raising the issue of 

regional impacts solely from the 

viewpoint of consumers who'live in high 

ene1'lrY price areas buying more efficient 

appliances than the national average, 

thereby leading to an overestimation of 

energy savings from standards. There is 

just liS much reason to assert. according 

to NVSEO. that consumers who live in 

low (\nergy price areas buy lesa efficient 

appliances than the national average. 

thereby leading to an underestimation of 

ene1'll}' savings from standards. Without 

empi.rical information on the foregoing 

and to the extent to which either of 

these effects might be greater. the 

Department's use of national average 

energy prices and usage rates is no more 

likely to overstate the energy savings 

from standards than it is likely to 

unde:rstate the energy savings. (NYSEO. 

No. 32 at 10-11). 

Thl! Department is unaware of any 

data source that provides regional 

variation in uSage. e.g .• cycles per ~'ear 

by re:gi.on. for dishw8B.hers. clothes 

washers. and clothes dryers. However. 

because differences in regional energy 

price II are available. the Department 

conducted a sensitivity analysis of the 

li£e-c:rcle cost by design option for each 

class. \.!~ilizing regional reeiriential 

energy p~ces for the lowest and highest 

priced census regions. The results of 

these sensitivities are reported iii 

chapter 6 of the TSD accompanying this 

rulemaking. 

The Northwest Power Planning 

Council (NPPC). ODOE. NRDC. EDF. 

and NYSEO argued that DOE should 

adopt standards beyond the LCC 

minima and suggested that DOE should 

not place undue weight on the LCC 

component of the analysis. (NPPC. No. 

13 at 2: ODOE. No. 15 at 1: NRDC. No. 16 

at 9-14: EDF. No. 19 at 9; and NYSEO. 

No. 32 at 1,. and 21). NRDC maintained 

further that DOE is violating the 

requirement of the Act by comparing 

one standard level with another 

standar!! level of lower efficiency. 

NRDC 8lpcd that "if ~ongress had 

intended DOE to set standards at the 

level that maxiniizes economic benefits. 

or at 11 conservatively low level that 

minimizes risk considering economic 

benefits. it would have said so." (NRDc. 

No. 16 at 11). Additionally. NRDC stated 

that "coincidence with minimum life 

cycle cost point is not a criterion set 

forth in the statute. If [a trial standards 

level) Is 'technologically feasible'· • • 

and had economic benefits· • • it must 

at least be considered for the fmal rule 

as being the level achieving the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified." 

(NRDC. No. 16 at 12). Additionally. 

NYSEO stated that DOE cannot. 

consistent with the Act. reject a 

standard level as not economically 

justified just because it is not the 

optimum standard from an LCC 

persp'ect~'ve. 

DOE agrees. No standard is rejected 

because it is not the optimum standard 

from an LCC perspective. However. 

DOE disagrees with the contention that 

the Department cannot consider that a 

standard level beyond the minimum 

LCC point is a burden. since it could 

preclude consumers from being able to 

buy the most cost·units. The Department 

believes that factor is consistent with 

the Act and can be considered under 

'either section 325(l)(2)(B){i) [I) or [VTI). 

Need of the Nation To Save Energy 

Several comments took issue with the 

Department's failure to consider a 

number of societal benefits in the 

proposed rule. including environmental 

impacts and reduced dependence on 

foreign oil. (Schneider. Nos. 10 and 31. at 

2; ODOE. No; 15 at 3; NRDC. No. 16 at 3-

6: Ohio. No. 22 at 3: Washington State 

Energy Office {Washington}. No. 33 at 2: 

and Public Citizen. No. 34 at 2). Public 

Citizen pointed out that in the proposed 

rule the Department limited 

consideration of "the need for national 

energy conservation" to the need for the 

U.s. to reduce consumption of imported 

au. PUblic Citizen argued that the 

Department failed to consider global 

warming. acid rain. and radioactive 

waste. In addition. Public Citizen 

pointed out that imports of aU reached 

7.712 million barrels per day in 1988. the 

highest level since 1979. and that this 

poses an increased risk tp national ' 

security and worsena the U.s. trade 

imbalance. Also. NRDC argued that 

standards improve electric utilities' 

demand. projections and reduce the 

uncertainity over the need to construct 

electrical generating plants. 

The Department agrees with these 

comments. and to the extent DOE had 

data. included these factors in the 

consideration of the Need of the Nation 

To Conserve Energy. Currently. the 

Department is not able to project the 

impact standards will have on 

radioactive waste; therefore. this 

concem was not considered. . 

Michael Sbepard of the Rocky 

Mountain Institute (RMI) 8U88ested that 

the DepartmeJ;lt should attempt to 

estimate the effects of standard. on lowincome people. who. it was stated. 

would be most affected by the price 

increases caused by standards. In 

particular. RMI urged the Department to 

consider the impacts of standards on the 

prices of used appliances. {RMI. No. 12 

at 2}. 

The Department notes that insufficient 

data were provided in comments to 

analyze this issue. LBL-REM does not 

presently distinguish among income 

levels. Nevertheless. because the 

Department is sensitive to this issue. it 

is a valid area for future research. 

. Citing several studies. Paul Centolella 

of the Ohio Office of the Consumers' 

Counsel (OOCC) stated that energy. 

conservation can create social benefits: 

"By redirecting consumer purchases 

from energy to appliances and personel 

(sic) consumption. aggressive 

conservation can significantly increase 

employment and economic growth." 

(OOCe. No.2 at 5). 

The Department agrees that appliance 

standards can produce social benefits 

beyond the benefits that accrue to the 

. purchasers of the more energyconservirig appliances. In fact. the 

environmental effects that are expected 

from each standard are examples of 

such social benefits: these have not only 

been quantified. but have also been 

considered in the development of the 

selected'standard levels. 

Utility Ana.lysis 

The NRDC raised several issues 

regarding the Department'. analysis of 

the impact of standards on utilities. 

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Firat. NRDC pointed to a risk factor not 

considered by the Department that 

llJ'8UeI in favor of more stringent 

standards. Specifically, NRDC suggested 

that more stringent standards reduce the 

risk of utilities' overbuilding or 

underbuilding capacity. NRDC charged 

that in the utility analysis. the 

Department assumed that utilities will 

not conaider the impact of appliance 

conservation Itandards in their energy 

demand forecasts. NRDC commented 

that this premise formed a basis for the 

analysis that showed reduced utility 

revenue from standards. and it Is 

unfounded. (NRDC No. 16 at 16 and 58). 

The Department agrees that standards 

reduce the uncertainty in forecasting 

electricity or gas sales faced by utilities. 

and that this is a benefiLHowever. the 

Department believes that quantifying , this effeCt is not feasible. U:ncertainty in 

utilities' forecasts for residential , elec:tricity or gal salel ill caused by 

several factors. including projections of 

population. household formations and 

locationa. and the agel and efficiencies ' 

of the household appliances. By 

establishing minimum efficiency 

standards on new appliances. the range 

of efficiencies in the marketplace is 

narrowed. and this should enable 

utilitiell to reduce somewhat the 

uncertainty in their forecasts. Given the 

number of vanables on which such 

forecasts depend. the extent to which 

the forecast uncertainty is reduced by . minimum appliance efficiency standards 

would likely be quite small. In addition. 

it would be extraordinarily difficult to 

estimate. This effect is discussed in the 

TSD.butnotquantified. 

NRDC also commented that the 

Department's model of utility 

ratemaking seems flawed. The 

Department performed calculations of 

the economic impacts of standards in 

terms of real dollars: in additiom DOE 

evaluated future power costs for 

electrical supply in real dollars. Public 

utility ~ommissions. however. compute 

electric utility rates in terms of nominal 

dollars. As a result, NRDC suggested 

that there would be no revenue loss as a 

result of appliance standards: instead. . there would be rate decreases. (NRDC, 

No. 16 at 60-61). . 

In response. the Department does not 

believe that the use of real dollars to 

evaluate utility impacts is misleading. 

The reader can convert to nominal 

dollars by assuming an inflation rate. 

and applying it to the annual impacts 

reported in the 1'8D. 

Secondly, there is no easy translation 

of the impacts of standards into rate 

changes. Rates are determined as a 

function of th'e specific fmancial 

circumstances of each utility. The 

Department believes that the effects on 

utility rates of the energy savings in this 

rulemaking are 110 small as not to justify 

the enormous effort required to quantify 

them. As a result, the Department is not 

changing its utility analysis. .. 

Environmental Analysis 

EnvironmentDJ Impact StDtement. A 

large number of comments discussed the 

environmental effects of appliance 

standards. Virtually all of the comments 

on this subject stated that the proposed 

rule would have a Significant 

environmental impact on air pollution. 

including significant effects on acid rain 

and global warming. As a result, the 

comments concluded that the 

Department's Environmental 

Assessment was insufficient, and that 

the Department should have prepared a 

complete Environmental Impact 

Statement (EIS). (Schneider. Testimony 

at z: Goldstein. Testimony at Z3: Miller, 

Testimony at 6-7: Osaon. Testimony at 

2: Schneider. No. 10 at 2; Alexander. No. 

14 at 3; NRDC, No. 16 at 62; EDF, No. 19 

at 9; OOCe. No. 22 at 6: Schneider et ai, 

No. 31 at 2; and Public Citizen. No. 34 at 

3). 

In addition. the EDF argued that DOE 

underestimated the economic benefit of 

the potential reductions in S(h 

emissions due to standards. (EDF. No. 19 

at 3-4). £OF argued that the correct 

approach to estimating potential 

benefits is to multiply the average cost 

of emission reductions by the total 

emissions reductions over the entire 

period. rather than the marginal cost by ~ annual savings in a particular year. ~DOE agrees with EDF and added that . calculation to the Final Rule. The results 

of this calculation are shown under the 

Need of the Nation To Conserve Energy 

and in the environmental analysis as 

presented in section V of today's fmal 

rule. 

The National Wildlife Federation 

(NWF), NRDC. and Public Citizen 

argued that if DOE had performed a 

complete EIS. the Department would 

have been able to calculate more of the 

impacts of the standards. including the 

impacts of more stringent standards 

such 8S those requiring heat pump 

clothes dryers and the impact of 

standards on the water consumption of 

clothes washers and dishwasher!!. 

(Osann. Testimony at 2; NRDC. No. 16 at 

67-68; Public Citizen. No. 34 at 3-4). 

Alexander argued that by failing to 

recognize the full potential that strong 

appliance efficiency standards can 

achieve. the rule will allow more 

pollution of the environment. 

(Alexander. No. 14 at 3). 

DOE disagrees with the comments 

that a full EIS should have been 

performed. None of the comments took 

issue with the Department's calculation 

of S(h, Co.. or NO. reductions: rather. . they argued that more stringent 

standards would have saved more 

energy and resulted in fewer emissions. 

DOE agrees with this claim and notes 

that the proposed rule's EA presented 

the reductiona in emissions at each . 

standard level: these reductions were 

found not to be significant. With respect 

to comments that more stringent 

standards. e.g., requiring heat pump 

clothes dryers, would have beneficial 

environmental impacts. the Department 

has added this dellign option to the 

analysis, and the results are presented 

below. 

Furthermore, the Department has 

added to the consideration of the Need 

of the Nation to Conserve Energy the 

en~nmental impacts of the standards. 

both for the total period analyzed and 

for a representative year. By so doing, 

the Department is ensuring that those 

environmental effects resulting from the . different standard levels were 

considered In the economic justification 

criteria. . 

The Department conttDues to present 

the results for the y~ar 2015 because by 

that time nearly the full impact of the 

standards would have occurred. In 

earlier years. e.g., 1995. which is two 

years after the standards go into effect. 

the standards would have had only 

limited effect on the marketplace. In 

later years. when more of the products 

in the marketplace have been subject to 

standards. the standards will have a 

greater impact on energy consumption 

and the environment. 

Finally, NRDC argued that the courts 

require the Agency to consider: 

"(1) whether the sgency took a hard look at 

the problem: (2) whether the agency 

identified the relevant areas of environmental 

concern: 131 as to the problems studied and 

identified. whether the agency made a 

convincing case that the impact was 

insignificant: and (4) If there was an impact 

of true significance. whether the agency 

convincingly established that changes in the 

project sufficiently reduced it to a minimum:' 

(NRDe. No. 16 at 63). 

The DepliltDlent has analyzed the 

environmental impacts of the standards 

as shown in th~ EA accompanying 

today's fmal rule. The EA considers the 

impacts of all the candidate standards. 

including the maximum technologically 

feasible levels and other levels rejected 

for economic considerations. In 

addition. as Doted above. the 

environmental impacts were considered 

as part of the Department's economic 

analysis for each candidate stan ... atd 
leV1el as shown in section IV of today's 

finul rule. . Ilil analyzing the environmental impact 

of !Itandards. the Department considers 

the Impacts to be in three areas: Energy 

consumption. power plant emissions 

and water consumption. These 

considerations are discussed elsewhere 

in this rule. Additional areas of potential 

impact are power plant construction and 

nu(:iear waste disposal. The Department 

is unable to measure if standards will 

ha1re any effect on nuclear waste. 

However. the Department generally 

believes that the standards will not have 

an3' effect on nuclear waste because no new nuclear power plants that are not 

currently under construction or already 

scheduled for construction will come on 

Iim~ during the period of analysis. The 

DeJ)artment believes that today's final 

rull! will not affect utilities' decisions 

with respect to nuclear power plant 

construction. While it Is possible to 

estimate the number of potential power 

plant savings. as if there were one 

national electric utility determining U.S. 

power plant construction. each 

individual utility makes ita own 

dedsions as to the number. size and 

type of generating units. subject to 

governmental review. Such decisions are usually made at a "local" level. The 

staiildards. however. are national 

standards and thus it is impossible 10 

estimate to what extent. if any. 

-slal[1dards would affect power plant 

COlllstruCtiOn. 

The NWF commented that the EA for 

the proposed rule did not discuss the 

e£ftlcts of the various options on water 

cOlllsumption. (NWF. No. 11 at 2). 

III the analysis for the fmal rule. the 

Del)artment did make specific 

cal'Mations of the impacts on water 

CO[lsumption of the different candidate 

standard levels. See Technical Support 

DOI:ument. sections 5.1.6. and 5.2.6. As 

noled sbove. these water savings 

est.imates were considered in the 

standards' selection decisions under 

Other Factors. 

Discount Rate 

Eleven comments addressed L'te 

discount rate used in the analysis. 

(Schneider. No. 10. at 2 and No: 31 at 3; 

RMl. No. 12 at Z; NPPC. No. 13 at 1: 

NRDC. No. 16 at 44-51; Whirlpool. No. 

20 ilt 3: Ohio. No. Z2 at B: AHAM. No. 29 

at :'; New York. No. 32 at 7: Washington .. 

No. 33 at 1: and Public Citizen. No. 34 at 2~ . 

The proposed rule used a discount 

ratl~ of seven percent both for the 

calculation of LCC and. in the LBL-REM. 

for calculating energy use and NPV. The 

,-"se' of tr.2 discount rate in the projection 

of energy use is significant because the 

LBL-REM projects marketplace demand 

for m'Jre efficient appliances based on the LC~. The LBL-REM assumes that as 

the price of energy increases. the LCC 

will increase. This results because the 

value of the energy savings resulting 

from more efficient equipment is greater. 

which. in turn. causes the marketplace 

to demand more efficient appliances. 

Whirlpool. AHAM. and NYSEO 

commented that the use of a seven 

percent discount rate was reasonable. 

NYSEO commented that the use of the seven percent rate was the "most 

reasonable." while Whirlpool stated 

that the seven percent value is plausible 

and provides 8 calculation. with market 

assumptions. that results in 6.5 percent 

as an "average" consumer discount rate. 

(NYSEO. No. 32 at 7; and Whirlpool. No. 

20 at 3). The Whirlpool calculation 

provided values for the fraction of 

appliance purchases being fmancPd by 

various means: however. Whirlp' 01 did 

not provide any basis for the values. nor did Whirlpool state from wherp or how 

these values were derived. 

The approach Whirlpool proposed is 

similar to that put forward by the 

Department in the November 1969 Final 

Rule for refrigerators. rcfrigeratorfreezer. freezers. and small gas furnaces. 

(54 FR 47916.-November 17.1989). In that 

Final Rule. DOE selected a seven percent discount rate based C';l a 

methodology derived from the Court 

decision. NRDC v. Herrington. supra at 

110. As DOE discussed in the November 

17.1989. Final Rule. the applicability of 

the Court decision changed' somewhat 

with the passage of the Tax Refonn Act 

of 1986 {Pub. 1.. 99-514); The Tax Reform 

Act'will have phased out the tax 

deductibility of interest paid on 

consumer loans by the time amended 

standards will be applicable. Based on the revised methodology. DOE 

calculated a range of real. after-tax. 

finance rates that consumers could 

incur; this range is from less than 1 

percent to slightly more than 15 percent 

As explained in the November 17. 1989. 

. final rule. DOE selected seven percent 

for the analysis because it was near the 

mid-point of the potential consumer . fmance rates. In addition. DOE found 

that this approach has another 

advantage: It has a reasoned theoretical 

basis in that it is related to the ' 

opportunity cost of money for 

purchasing consumer durables: as such. 

it is justified in tenns of the alternate consumer investment opportunities that 

are foregone in order to finance the 

purchases of appliances. 

Some comments urged a discount rate 

of less the seven percent. based on the 

rates associated with appliance 

purchases. These included Schneider. 

The American Cou.i1cil for an EnergyEfficient Economy ACEEE). and Public 

Cltlzen. (Schneider. No. 10 at 2. and 

Schneider. et. aL. No. 31 at 3; ACEEE. 

Testimony at 4-5; and Public Citizen. 

No. 34 at 2). 

None of these comments urging a 

lower consumer rate. based on real. 

after-tax rates aaaociated with consumer purchases of appliances 

offered any empirical basis for the 

recommendation of a rate below seven 

percenL Ideally. if DOE could obtain 

empirical data on the methods that 

consumers use to pay for their appliance 

purchases. the Department could use a weighted average. real. after-tax. 

finance rate for a consumer discount 

rate in the analysis. Therefore. unless 

and until any broad-based empirical . data can be developed on the methods 

consumers use to flIUlnce purchases of 

appliances. the Department will 

continue to use seven percent. for the reasons mentioned above. 

Nevertheless. because the range of 

real. after-taX rates of fiDance is 10 

broad. the Department haa expanded ita 

sensitivity runs from using 5 and 10 

percent.rates to using 2 and 15 percent 

rates. It is believed that this broader 

range of sensitivities will better reflect 

the wide vari'ation in actual consumer 

financing rates. and. therefore. better 

capture the significance of any 

differences resulting from the range of 

rates. 

Water Savings 

EPA commented that the Department 

should calculate the value of water 

savings based on the marginal costs. not 

the average cost. and that the savings . 

should be considered in the decisionmaking process. (EPA. No. 36 at 5). 

The Department disagrees with EPA 

regarding the cost of water used in the 

analysis. As discussed above. the 

analysis is intended to provide an estimate of the impact ofstandards on consumers and the Nation. Individual 

consumers do not pay the marginal cost 

of water. as they do not pay the 

marginal cost of energy. Therefore. the 

analysis continues to use the average 

cost of water. However. the Department 

agrees with EPA regarding the 

consideration of water savings in the 

decision-making process. and. as noted 

above. included water savings in the 

economic analysis under Other Factors. 

Test Procedures 

NRDC commented that the existing 

test procedures should be used to the 

extent practical. and that the 

Department should propose . modification wherever the analYSIS 

.. .. 
".-'" : r '. : /:-. 

-:.' " ,{ 

FedarU'Regfster f'·Vol. 56!·'No. 93" r Tuesday; May ·14.199t·'/Rdles and'R~ationi 

suggests that changes are warranted. In 

those cases where the existing test 

procedure does not evaluate the 

performance of a design. DOE should 

evaluate the energy savings using an 

assumed test procedure. (NRDC. No. 16. 

at 24-ZS). 

DOE Interpret. NRDC's comment to 

endorse setting standards based on a 

prospective test procedure rulemaking. 

This option. in DOE's opinion. is not an 

alternative in setting standards. For 

1I10st products. moreover. the Act 

requires only that the test procedure be 

in place before a standard can be 

prescribed. Section 321(a)(6}. 

Furthermore. as DOE's test procedure 

rulemaking history shows. most test 

procedures that have been adopted. 

including amendments to existing test 

procedures, include numerous changes 

from what was published in the 

proposed rule. These changes often 

affect the measure of a product's energy 

use. Therefore. if a standard could be 

adopted based on a prospective test 

procedure. DOE would question such a 

process because. in alllikeUhood. the 

final test procedure will be different 

from that proposed. 

A number of other comments were 

raised regarding this issue. particularly 

with respect to automatic termination 

for clothes dryers and higher spin 

speeds for clothes washers. These 

comments will be addressed in detail in 

the product-specific discussion of 

today's fmal rule. However. with respect 

to the general issue of how the 

Department. is to analyze the impacts of 

standards. section 325(1J(2)(B}(iii) of the 

Act requires the Department to base the 

payback calculation on the applicable 

DOE test procedure. Therefore. for th'e 

purpose of determining whether a 

standard level meets the rebuttable 

presumption test under section 

325(1J(2)(BJ(iii). the Department used the 

existing test procedure. including the 

test procedure's annual cycles of 

operation .. 

Based on information provided in 

comments on the proposed rule. and 

discussed below. the Department 

believes that the usage information in 

the test procedure for certain 

appliances. e.g. dishwashers. clothes 

washers and clothes dryers, does not 

reflect current usage practices. 

Additionally. the Department believes 

that use of the test procedure usage 

information in the LBL-REM and the 

LCC will result in incorrect estimates on 

the impact of standards on the Nation 

and consumers. since current usages are 

generally lower than test procedure 

assumptions. Therefore. for the purpose 

of calculating LCC. energy savings and 

NPV, DOE used usage values which it 

considers to be reflective of current 

consumer usage patterns of the 

particular appliances. This approach is 

similar to what was done in the 

November 17. 1969. Final Rule for 

refrigerators. refrigerator-freezers. and 

freezers and small gas furnaces. Also. in 

the LCC analysis. the Department 

performed a sensitivity analysis which 

included the calculation of LCC using 

the test procedure values. The results of 

that analysis are shown in the TSD. See 

Technical Support Document. chapter 6. 

Baseline Unit 

Whirlpool. GEA. Nyle Corporation 

(Nyle). AHAM. and NRDC provided 

comments about the baseline unit used 

in the analysis for the proposed rule. 

(Whirlpool. No. 20 at 12. 13. and 32; 

GEA.No. 21 at 1, 10. and 20; Nyle. No. 24 

at 4: AHAM. No. 29 at 1 and 2: and 

NRDC. No. 16 at 40-42). NRDC . 

commented that the baseline unit should 

be the average efficiency, i.e., the 

shipment weighted energy factor 

(SWEF): Conversely, Whirlpool. GEA 

and AHAM each commented that the 

baseline unit was not representative of 

typical clothes washers. clothes dryers. 

and dishwashers. 

The baseline unit is not the SWEF. but 

is a construction of the engineering 

analysis. It is used to t::stimate the cost 

and efficiency of a range of energyconserving design options. including 

those in the max tech level. This 

information is used in the economic 

analysis, both in the LBL-REM and lEI.- ~.~The Department did use the 

SWEi, however. for the purpose of 

projecting energy consumption. r-.rpV. 

pay backs under the rebuttable 

presumption test. and impacts on 

manufacturers. In that way, the impacts 

on manufacturers. consumers and the 

Nation are calculated by comparing 

what would happen under different 

standard levels to what is expected to 

occur without any changes to the extant 

standards. . 

In the November 17.1989. final rule for 

refrigerators. refrigerator-freezers. and 

freezers. and small gas furnaces. the 

Department used the maximum 

allowable energy use set by the Act as 

. the baseline for refrigerators. 

refrigerator-freezers. and freezers for 

1990. However. for the purposes of this 

analysis. the Department did not have 

similar guidance from the Act. The Act 

prescribes only design standards for 

clothes washers. clothes dryers. and 

dishwashers; products meeting this 

standard have a range of efficiencies. 

Therefore. for the Final Rule. the 

Department reviewed available data. 

including comments on the proposed 

rule and manufacturers' submittals to 

the FI'C for the appliance labeling 

program. to identify the range of 

efficiencies available in each class for 

. each product type. A model with an 

efficiency slightly higher than the least 

efficient unit was then used as the 

baseline unit for the engineering 

analysis. Data and information from 

comments submitted in response to the 

August 9. 1989. proposed rule were then 

used as input to the economic analysis 

for the purpose of calculating impacts of 

standards. 

Finally, Nyle commented that the 

baseline energy factor for clothes dryers 

was unrealistic. (Nyle. No. 24 at 4). Nyle 

went further to say that it had never 

seen a residential clothes dryer near this 

efficiency. 

DOE does not understand this 

comment. since the efficiency estimates 

used in the engineering analysis 

included the results of testing reported 

to DOE. Furthermore. Nyle's comment is 

the only one that takes issue with the 

measure of efficiency. Therefore. DOE 

believes that Nyle must have 

misinterpreted the test procedure. The 

Department has not made any changes 

to the analysis in response to this 

comment. 

Appliance Usage Data 

paG and AHAM provided information 

in their comments regarding clothes 

washer and dishwasher annual cycles of 

operation and clothes washer· 

temperature use factors. (P&G. No. 27 at 

2. and AHAM. No. 29 at 10-12). The P&G 

data show that the number of clothes . 

washer cycles per year is declining: 

based on 1989-89 survey data. it is now 

380 cycles per year. down from the test 

procedure value of 416. Similarly. the 

paG data show that the number of 

dishwasher cycles per year is lower 

than the test procedure value. 286 cycles 

per year versus 322: however. the P&G 

. data show that 198&-89 usage was 

higher than 1986-87. 286 versus 260. 

These new data are used in the 

economic analysis in the calculation of 

LCC. energy savings and NPV. as 

described above. 

AHAM also arg-Jed that if the new 

usage data are not used. the energy 

savings potential will be overestimated 

and the payback period understated for 

each standard level. (AHAM, No. 29 at . 

10). 

AHAM is correct with respect to the 

payback period: however. as explained 

above in the discussion of payback 

period. the Department is required by 

section 325(1)(2)(B)(iii) of the Act to use 

the "applicable test procedure." which 

the DeparL-nent interprets as the extant 
.1'., 

t:.t 

.' 

·1 

tnst procedure. Therefore. DOE rejects 

AHAM's comment with respect to 

payback period. With respect to energy 

Silvings. as discussed above. DOE used 

the new usage data in the LBL-REM to 

cidculate energy savings. 

Maintenance Expenses 

AHAM proposed that maintenance 

e:(penditures should be included in the 

aJllalysis and that they should equal S11)'JL of the price of the applirunce. (Gants. 

Testimony at 1). This estimate was 

bilSed on what typicaUy is charged to 

consumers for extended warranties. 

ACEEE and the EDF disagreed with an 

aJ'bitrary maintenance expense figure. 

Maintenance expenditures should be 

included to the extent that increases (or 

dl!creases) in them can be documented: 

to add an arbitrary "fudge-factor" Is not 

a fipropria teo 

DOE agrees with ACEEE and EDF and 

hEIS not adopted AHAM's 

recommendation. The only maintenance 

ell:penses to be used in the analysis are 

the incremental changes. positive or 

negative. from the baseline unit. 

Maximum Technological Feasibility 

DOE received six comments that it did 

no.t consider aU commerciaUy available 

tel:hnologies. (Schneider. No. 10 at 1; 

Schneider et. al., No. 31 at 1. NWF. No. 

11 at 2. NRDC. No. 16 at 9. EDF. No. 19 

at 1. and EPA. No. 36 at 4). Schneider 

and EDF argued that DOE had not 

ev,aluated all commercially feasible 

options identified in the proposed rule's 

TSD. NWF and EPA went beyond these 

comments to Identify specific 

tec:hnologies for each product type for 

thEI Department to consider in the final 

rule. NRDC made the general argument 

thelt the Department had failed to 

propose standards that were at the max 

tech level and economically justified. 

The Department has considered these 

dellign options and others. where data al'E~ available. in the Final Rule. The 

de:lign options considered are discussed 

in more detail in the product specific 

, discussion below and in the TSD. See 

Tet:hnical Support Document. chapter 3 

anei appendix A. 

b. Product-Specific Comments 

1. Clothes Washers. 

Cla.sses 

The Department had proposed six 

daues of clothes washers: top loading 

compact. standard. and large: top 

loading semi-automatic: front loading: 

and suds saving. Speed Queen 

commented that it was opposed to the 

creation of a large capacity. top-loading 

clothes washer class. It recommended 

thalt the classes be compact and 

standard sizes. (Speed Queen. No. 28 at 

I, 2). The company further commented 

that the .standrurds as proposed. i.e. 

having a lower standard for large 

capacity machines than for stmdrurd 

capacity ones. would encourage 

manufacturers to build large units. Since 

the DOE test procedure rates capacity 

by measuring the total volume of the 

tub. companies could be subject to the 

lower energy factor by increasing the 

volume of the washer that is above the 

water fill and not need to incorporate , design options which affect energy use. 

In response to Speed Queen's 

comment. EDP and ACEEE stated that 

DOE should evaluate the relationship 

between energy use and'volume. (EDF, 

No. 19 at 8. and ACEEE. No. 18 at 2). 

Whirlpool commented that the energy 

factor for clothes washers could be 

redefined to be equal to maximum 

basket volume divided by energy 

consumption. (Whirlpool. No. 20 at 22). 

DOE has reviewed these comments 

and agrees that separate classes for 

standard and large size top loading 

clothes washers may res~t in ' 

manufacturers' redesigning products in 

order to meet the lower standard. as 

Speed Queen suggested, and that this 

could result in reduced energy savings. 

In addition, DOE investigated the 

relationship between energy use and 

capacity and found very poor statistical 

correlation (of R 1=0.65) between 

energy use and volume. This malysis 

was based on 1989 manufacturers' data, 

supplied to the FTC as part of the 

appliance labeling program. In 

consideration of the above, DOE estab~shed three classes of top loading 

clothes washers for the final rule, . standard (greater thrun 1.6 ft a capacity). 

compact (1.6 ft 1 capacity or less), and 

semi-automatic. 

NWF commented that front-loading 

clothes washers should not have been 

placed into a separate class as DOE 

proposed. (Osann. Testimony at 3). 

NWF suggested. however. that if front 

loaders are a separate product class, 

then design options should be ' 

considered to make them more efficient. 

AHAM commented that front loaders 

can use less water. but because of 

configuration and size. they do not 

represent a large consumer market. and 

as a result. DOE had rightfully 

designated them as a separate product 

class. (AHAM. No; 29 at 21). 

DOE reviewed the comments of NWF 

and AHAM and found they both have 

some merit. DOE agrees with AHAM 

that each type of machine. top- and 

front-loading. has a distinct consumer 

utility. and that typically there is a 

difference in energy efficiency between 

the two. However. DOE has found that 

there are now horizontal-axis. toploading clothes washers mrunufactured 

in Europe; this indicates that the 

difference in efficiency is not dependent 

on door placement. I.e •• the utility 

related feature does not necessarily 

determine the product's performance. 

DOE believes that the horizontal 

rotation design of front loaders. which 

uses less water and therefore energy. 

can now be incorporated into top 

loaders as weU. The Department has 

therefore added the horizontal axis 

design option to the top loading clothes 

washer engineering malyals. while 

retaining front loading as a separate , claaa. See Technical Support Document. 

chapter 3. and appendix A. ' 

Elimination of Warm Water Rinses 

AHAM. Whirlpool and Maytag 

commented that the elimination of warm 

water rinses should not be considered 

as a design option because it would 

reduce consumer utility. (Whirlpool. No. 

20 at 14, AHAM. No. 29 at 18 rund 19. and 

May tag. No. 17 at 2, rund No. 40 at 6). 

Each commented that warm rinse haa 

utility for arthritic people rund those 

living in cold regions of the U.S. Also. 

Whirlpool testified that some woolen ' 

articles caU for warm wash and rinse to 

prevent shrinkage. (Whirlpool. 

Testimony at 5). Furthermore. AHAM 

and May tag commented that in order to 

avoid reaction to laundry chemicals. 

some consumers flOd it necessary to use 

a warm rinse. (AHAM. No. 29 at 19, and 

May tag. No. 40 at 6): In addition. AHAM 

and May tag commented that dryer 

energy would be increased three percent 

with a cold rinse. 

NRDC. on the other hrund. argued that 

there is no evidence that warm rinse 

provides significant utility to consumers. 

(NRDC. No. 16 at 42-44). NRDC further 

stated that not having a warm rinse has 

become acceptable to the market since 

45 percent of Whirlpool's clothes 

washers do not have this option. Also. 

PlI:G commented that it "supports the 

use of cold water rinsing in clothes 

washers in general, and flOds no 

performance reasons negating this 

move." (PlI:G. No. 21 at 4). 

The Department notes that there are 

presently clothes washer models being 

sold that do not provide warm rinse 

'choices. The energy savings from 

elimination of warm rinse are 

substantial (26 percent with 1915 P&G 

data used in the DOE test procedure and 

19 percent with 1986-87 P&G data). It is 

a low cost. high energy savings CipllOn. 

,The Department reviewed the.comments 

and determined there is no eVIdence 

that a warm rinse is necessary in the 

washing process. especially in light of 
, 

". 

r 

.f!. 

" 

••..• ,4, 

,. . 

\he large number of clothes wasDers 

sold without iL Therefore. DOE included 

he 'elimination of warm riILIe aa a 

ielign option in the engineering 

analysil. 

Whirlpool proposed that if the 

Department were to adopt a standard 

based on the elimination of warm rinse. 

the ltaudard .hould be a preacriptive 

standard allowing the use of a warm 

water rinse that would have to be 

,elected each time it was desired. Le .. a 

::old rioae deIault aettiq. (Whirlpool. 

No. 20 at 14.). 

The standard considered was baaed 

on the elimination of warm water tinae. 

However. being a performance 

standard. it could also be met by a 

machine with a warm water rinse if 

other design optiona to improve 

efficiency were included. The 

Department notes that there are already 

models on the market with warm water 

rinse that could meet this standard. 

Higher Spin Speeds 

RML Public Citizen. NRDC. and EDP 

commented that the removai of water by 

increased clothes washer dram spin 

speeds could significantly reduce 

clothes dryer energy consumption and 

should be considered as a design option 

in the clothes washer analysis. (RMI. 

No. 12 at 6. Public Citizen. No. 34 at 1. 

NRDC,'No.16 at 35-36. and EDF. No .. 19 

at 1 and 3). NRDC and EDF recognized 

that the present DOE test procedure 

cannot evaluate this option. but that the 

TSD gives a feasjble method of 

evaluating such a change. and that DOE 

should evaluate this option based on a 

revised test procedure. (NRDC. No. 16 at 

35. and EDF. No. 19 at 1). 

DOE rejects this proposal. As 

discussed above. the Act requires 

stilndards to be based on the applicable, 

teat procedure. Since the test procedure 

does not provide for this deaign. it 

cannot be included as a candidate for 

standaros. 

Thermostatically Controlled Mixing 

Valves 

In the proposed rule. the Department 

calculated energy savings for this design 

option based on the assumption that the 

valves would control the hot water 

wash temperature to 120 ·F. 

In testimony at the public hearing. 

Whirlpool and Speed Queen contended 

that 120 OF is too Iowa wash 

temperature far washing clothes stained 

with grease and oiL (Schornhorst. 

Testimony at &-8: Coates. Testimony at 

4-5). These views were supported in 

comments offered by PaG and AHAM. 

(P8:G. No. 27 at 3: AHAM No. 29 at 19-' 

20). These companies believe that 

clothes washers' performance would 

,;,_ "; t.: . . .. i'~' .,. ';"'J: 

", 

decrease at the lower temperature of 120 

·F. 

an the other hand. ACEEE stated that 

only a small segment of the population 

reqWl'es a hot waah temperature for 

clothes washing; for them. ACEEE 

argued that manufacturers could provide 

washing machines that would use 130· 

water for their hot water washes. while 

achieving the necessary energy savings 

elsewhere. 

PAG. however. contended that 

virtually an purchasers of washing 

machines would have need of an 

oCC8sional130 OF hot water wash. 

Therefore. P&G strongly aupported an 

, 130 0p or better inlet water temperature 

be considered far all clothes washers in 

order to remove greasy soils. 

Given PAG's extensive work in 

researching the solubility and the 

effectiveness of different laundering 

agents. the Department pata great 

credibility in its comments. As a result. 

for the F'mal Rule. the Department 

calculated enertn' savings for the . 

thermostatically controlled mixing 

valves based on the assumption that the 

valves would control the hot water 

wash temperature to 130 OF. This 

reduced the estimated energy saving 

potential of that design option from that 

proposed. 

Plastic Tub 

May tag. Whirlpool and AHAM all 

commented on the plastic tub design 

option. (Maytag. No. 17 at 2. Whirlpool. 

No. ZO at 19. and AHAM. No. 29 at 21). 

AHAM said that the design was 

technically feasible. but that 

incorporating it would require a major 

capital investment since plastic is not a 

direct substitute for steel. Whirlpool 

agreed that the effect of reducing 

thermal mass would be to improve 

efficiency, but stated that the savings 

are not achievable without sophisticated 

and expensive temperature controls. 

Maytag ,stated. however. that one of the 

means it used to reach proposed level1. 

a 1.13 energy factor. was plastic tubs. 

May tag did support AHAM's comment 

that the materials are not 

interchangeable. Maytag stated that 

when a plastic tub is used. greater 

clearances must be allowed to prevent 

any contact with the spinning wash 

basket. 

After reViewing these comments. DOE 

believes that reduced thermal mass by 

the use of a plastic tub has energyconserving potential and is. therefore. a 

viable design option. Accordingly, the 

Department included this design in the 

analysis for this rnlemaking. 

,-~ 

',. , 

Motor Efficiency 

Maytag. WhIrlpool. and AHAM 

discussed the feasibility of increasing 

motor efficiency. (Maytag. No. 17 at 13-

14. Whirlpool. No. 20 at l81lJld 11. and 

AHAM. No. 29 at 20). Maytag stated that 

ita motor suppliers were not capable of 

manufacturing a permanent ~ 

capacitor (p.S.c.) motor that would meet 

ita torque requirements. Similarly. 

AllAM commented that motor 

efficiency can be inereslad. but that 

such motors do not provide adequate 

starting torque. 

On the other hand. Whirlpool 

commented that ita motor efficiency 

could be increased to the level 

calculated in the TSD but that the 

additional motor price would be $14.60 

instead of $4.00, as estimated in the 

TSD. Additionally. Whirlpool steted that 

the improved motor would weigh more. 

requiring a change to the washer 

suspension system which would add an 

additional $.50 to $1.00 to each machine 

and cost 5 million doUara for retooling. 

In Whirlpool's opiniOD. tIUs would not 

beeconoaticallyjustified. 

In light of the comments received. 

DOE re-evaluated the motor cost data 

discussed in the TSD. including , 

Whirlpool's. and has revised the 

estimated cost increase for the improved 

motor from S4.00 to $7.50. DOE 

recognizes that in some instances a 

heavier motor could exceed the capacity 

of the suspension system. requiring 

redesign and retooling. but DOE did not 

consider any retooling cost for this 

design option. The entire $7.50 

incremental cost for this design was 

treated as a variable cost. 

Other Design Options 

Comments were received concerning 

the possibility of including the 

additional design options of manual fill 

control. partial fin control and 

adjustable speed drives. (NRDC. No. 16 

at 11. EPA. No. 36 at 4. RMI. No. 12 at 3. 

NWF. No. 11 at 3. and Public Citizen. 

'No. 34 at 1). 

With respect to improved fill control. 

AHAM commented that in 1987.98.5 

percent of clothes washers were 

equipped with manual water level 

switches. (AHAM. No. 29 at 22). Based 

on the comments submitted by AHAM. 

DOE concluded that the design options 

of manual fill control and pertial fill 

control were adequately considered by , 

the proposed baseline which 

incorporated manual water level 

controls. 

With respect to adjustable speed 

motors. the Department notes they ha Je 

the potential to save energy in spact' 
. . f, '!, .. 

: ·F."nl, Rep.tar- J. Volse. No~ 93.'., Tuesday. May 14. 1991 ., Rille'land Regulations : :22285 

heating and cooling equipment. as 

mentioned in the RMI comment when 

. the load varies over time. (RMI. No. 12 

at 3). However. in the case of clothes 

washing where the load is more 

constant. DOE does not believe that 

adjustable speed motors are applicable 

for energy saving purposes. 

2. Clothes Dryers. 

HeatPwnps 

RMI. NPPc, NRDC, May tag. . 

Whirlpool. Ohio. Nyle Corporation 

(Nyle). AHAM. Washington State 

Energy Office (WSEO). and Public 

Citizen all discussed whether heat pump 

clothes dryers were technologically 

feasible. and/or whether they should be 

a separate class or design option for 

I~lectric clothes dryers. (RMI. No. 12 at 7. 

NPPC. No. 13 at 2. NRDC. No. 16 at 28-

:13. May tag. No. 17 at 9 and No. 40 at 3. 

'Nhirlpool. No. 20 at 58, Ohio. No. 22,' at 

;'. Nyle. No. 24. at 1 and 2. AllAM. No. 

;:9 at 26. WSEO. No. 33 at 2. Public 

Citizen. No. 34. at 1). 

RMI. NPPC. NRDC, Ohio. Nyle. 

WSEO. and Public Citizen all argued 

that heat pump clothes dryers are 

technologically feasible and should be 

considered as a design option. not a separate class. . 

Nyle reported its success in 

manufacturing commercial heat pump 

dryers or closed cycle dehumidification 

dryers. Nyle has manufactured and 

installed hundreds of systems in 

clommercial applications utilizing heat 

pumps for drying leather. wood. food. 

paper. and pharmaceuticals. (Nyle. No. 

24 at 3). Nyle argued that this technology can be applied to clothes drying. and . 

stated that the company is working with 

a commercial dryer manufacturer to 

offer a commercial1ine of heat pump 

clothes dryers. Nyle believes that this 

technology can also be extended to 

re'sidential clothes dryers. 

May tag and Whirlpool both 

commented that two problem with heat 

pump clothes dryers are lint and water 

build-up. which would affect the 

pEdormance and. possibly. the safety of 

the unit. (May tag. No. 17 at 9 and No. 40 

at 3. and Whirlpool. No. 20 at 58). 

May tag cited its experiences with closed 

cycle condenser dryers and combination 

wusher/dryers in which lint 

accumulation was a major problem. 

which contributed to Maytas's 

eliminating them from th.e marketplace .. Whirlpool also commented that a heat 

pump clothes dryer would require at 

le~lst eight inches additional depth 

compared to a conventional electric 

w,rer. (Whirlpool. No. 20 at 57). This 

WB.S based on its assumption that the 

w,rer would require 8 heat pump with a 

capacity of 10.000 Btu/hour and would 

have a volume of more than 8.000 cubic 

inches. Whirlpool contended that in 

order to add the heat pump system to a 

drYer and maintain the same width (29") 

and height (35"). the additional depth for 

the system would be at least 8". Nyle. on 

the other band. argued that the system 

fits into cabinets that are the same size 

as. and similar in appearance to. 

conventional dryers. (Nyle. No. 24 at 1). 

Based primarily on Nyle's comments 

and experience. DOE Is convinced that 

heat pump clothes dryers are technically 

feasible. DOE recognizes that lint buildup may be a problem. but also notes that 

Whirlpool implies that lint Is a 

continuing problem in aU clothes dryers. 

While Nyle did not address lint per set 

DOE presumes that it is coping with the . 

lint problem in its commercial models. 

DOE Is not convinced that lint build-up 

is such a large problem as to preclude 

the technology. DOE is also convinced. 

based on Nyle's experience. that heat 

pump clothes dryers can be made to fit 

the same size space as conventional 

dryers by extending the back of the . 

cabinet as far as the vent pipe extends 

in a conventional dryer and moving the 

control panel forward. Based on the 

comments. DOE has concluded that heat 

pump clothes dryers do not provide 

distinct utility to the consumer. and has 

included heat pumps (or closed cycle 

dehumidification systems) as a design 

option in the analysis for today's rmitl 

rule. 

Microwave Clothes Dryers 

,m.{t. Rudy Pesci (Pesci). and NRDC 

supported the incorporation of 

microwave drying in clothes dryers. 

while May tag and Whirlpool opposed 

the adoption of this technology as ~ 

design option in the analysis. (RMI. No. 

12 at 7. Pesci. No. 30 at 1. NRDC. No 37 

at 2. May tag. No. 40 at 3. and Whirlpool. 

No. 39 at 3. 5. and 6). RMI suggested that 

.such a technology be considered in 

future proceedings. while Pesei and 

NRDC supported its consideration in 

this rulemaldng. Pesci provided copies 

of patents issued for microwave clothes 

dryers. and technical and cost 

information concerning the technology, 

including limited test data on an operating prototype. NRDC commented 

that the only drawback is its inability to 

dry fabrics with metal threads. 

On the other hand. May tag and 

Wl!.irlpool stated that saJety problems 

exist with the unit. with Whirlpool even putting sample garments in a microwave 

oven set to full power to demonstrate some of the potential safety problems. 

(May tag. No. 40 at 3. and Whirlpool. No. 

39 at 3. 5, and 6). 

DOE reviewed WhIrlpool's comments 

and concluded that ill experience of 

putting clothing in a microwave oven is 

not applicable to the prototype . microwave dryer experience. DOE 

believes. based on the Pesciand the 

NRDC statements. that although some 

limitations exist with microwave clothes 

dryers. microwave clothes drying'is a 

technically feasible design option. The 

Department. therefore. included it as a 

.design option in the analysis for today's 

final rule. . 

Finally. NRDC provided information 

with respect to the cost and efficiency of 

microwave avena and magnetrons. 

(NRDC, No. 37 at 2). NROC atated that 

the prototype microwave clothes dryer 

made by Mahan Micro. Ltd.. bas a 

magnetron (the microwave generator) 

with an efficiency of 55 percent and that 

more efficient magnetrons are available. 

units with efficiencies as high as 75 

percent. As part of an upcoming 

ruiemaking on kitchen ranges and 

ovens. DOE has been gathering data 

resarding microwave ovena and 

magnetrons. Based on those data. DOE 

is unaware of magnetrons with 

efficiencies less than 75 percent. 

Apparently. the industry standard is a 

75 percent efficient magnetron: the 

effiCiency of the device is reduced when 

installed. The installed efficiency is 

generally in the 55 to 60 percent range. 

Based on the information available to 

the Department. DOE believes that the 

microwave clothes dryer that Mahan 

Micro. Ltd. manufactured actually has a 

magnetron of 75 percent efficiency. 

Therefore. the analysis is based on a 75 

percent efficient magnetron. and DOE 

knows of no higher magnetrOn 

efficiencies at this time. With respect to 

the retail price of microwave clothes 

dryers. NRDC suggested a retail price of 

$325 to $625. or a $25 to $325 increase 

over the baseline unit. DOE used a price 

increase of $395 and believes that the 

higher figure is more reasonable. 

particularly in light of the added 

features required. including humidity 

sensing and the magnetron. 

Exhaust Heat Recovery .' 

Public Citizen commented that DOE 

did not adequately examine the recycle 

exhaust heat design opti,?n. (Public 

CItizen. No. 34 at 1). 

DOE disagrees: this design option was 

included in the proposed rule as standard level 4. In addition. it was included in the analysis for today's Final 

Rule. See Technical Support Document. 

appendix A. 

EDF commented that DOE did not . give a basis for not considering inlet aat 

preheat. (EDF. No. 19 at 3). DOB did 

-. 
.,.-- -, . > ' 

'. ," -." _ .- ,~:;1t_ ': ... - -~ t". :..... " .~. 

• , - J t".. ·i·. _ . , 

, Fechai a.p.ter / Vol. 56. .No. 93 / Tuesday. May 14. 1991 '/ R1I.Iu and Regulatfmm 

coaaider inJet m.,.eeu. as dWcuIsed 

in the TSD. but dili aot expWa wa, it 

wal DOt cho8en as •• taDdard level. 

DOE identified three medJods of 

recoverin3 heat that is Seneraily loat 

from clothes ~rs; they are recycled 

exhaust beat. DOD<IJI1deasias inlet air 

preheat. 8JId ClOIldeuiDg inlet air 

preheaL DOE beliewel the three 

methods of exbauat heat reawery are 

m1ltualiy exclusive. 'I1Iat is. only one 

CaD be u.ed OIl a dJyer. Afls exam.iaiag 

the three different approaches. DOE 

found that the metboda are 

approximately equal in their 

contribution to clothes dryer energy 

consumption. but that the option of 

recycle exhanst beat had a lower 

manufacturer cost aDd. therefore. was 

chosen as the design option for exhaust 

heat recovery. 

In additioo. Whirlpool aDd AHAM 

commented that each design hal 

technical problems. (Whirlpool. No. 20 

at 52; and AHAM. No. Z9 at 25 and 26). 

Recycle exhaust best hal safety 

problelDl due to the poteDtial of larger 

pieces of lint breaking off and being 

ignited by the electric resistance 

element or by the flame in a gas clothes 

dryer. Both inlet air preheat options 

have performance problems caused by 

the buildup of lint in the heat exchanger. 

DOE agrees with AHAM·. and 

Whirlpool's comments concerning the 

technical problems with each design; 

hoWever. as stated previously, the' 

Department believes that lint is a 

problem in aU dryers. These 

technologies may exacerbate the 

problem. but the Department is not 

coavinced that the problem is 10 large 

as to render the technologies infeasible. 

Therefore. the Depanmem has included. 

exhaust heat recovery al a design 

option based on recycle exhaust heat 

becauc!'! of its lower coaL ' 

NRDC. E:.JF. Nyie. arid Whirlpool each 

. questioned the Department's estimate of 

the energy savings potential of this 

design option oC this in clothes dJyers. 

(NRDC. No. 16 at 37-39; EDF. No. 19 at 3; 

Whirlpool. No. 20 at 34: and Nyle, No. 24 

at 4 and 5). NRDC. £OF, and Nyle 

argued that DOE had underestimated 

the savings. £OF estimated that 80 

percent of the heat is exhausted. not 20 

percent as estimated by DOF. NRDC 

cited a report by D. Hekmat and W.J. 

Fi1Jk.improving the Energy Efficiency of 

Residential Clothes Dryers, to support 

its argumeDt that the energy savings 

potential was underestimated. 

Whirlpool. however, referred to an 

analysis submitted to the Federal 

Energy Administration in 1976 which 

claimed that "ahoot 92% oC the 

theoretical maximum energy utilization 

. in the dryer drum il already beiDg 

attaiDed. .. (Whidpooi, No. aJ at 34, 

DOE :reviewed these conflicting 

comments, bllt was not convinced that 

8111 changel should be made to the 

aoalysilJ regarding the heat 10sI. i.e .. 

eaergy couservation potentiaL of clothes 

dryera. 

Automatic Termination 

DOE received a number of comments 

regarding the method of automatic 

termination. moi1lture 01" temperature. 

and the energy savings for each. ODOE 

recommended that moisture sensors 

should be the required option. while 

Dingell urged that DOE resolve the 

question oC whether moisture lJensing 

devices really save more ene1gy than 

temperature sensing devices. (ODOF. 

No. 15 at 5; and Dingell. No. 35 at 3). 

NYSEO and NRDC both argued that the 

rationale used in the proposed rule (the 

test procedure gives both forms of 

a,utomatic termination the 981D8 energy 

saVings credit) is not sufficient to 

support a standard that would allow 

either option since the standard is a 

design standard. not an efficienq 

standard. (NRDC. No. 15 at 33; and 

NYSEO. No. 32 at 28). AHAM . 

commented that manufacturers have 

found little difference between the two 

technologies. (AHAM. No. 29 at 25). 

Whirlpool provided results from a three 

year field test that measured a 13.0 

percent savings for temperature sensors 

and a 13.6 percent savings for moisture 

sensors. (Whirlpool. No. 20 at 33). 

Based on the Whirlpool data. DOE 

concluded that the credit given by the 

test probedure is justified and therefore 

based consideration of teday's rlIlal 

Rule on the credit given by the test 

procedure. 

Timed Dry . . 

May tag. ACEEE. £OF. Vi~ir!pool. 

GEA. and AHAM all commented that 

t'.med dry was required in certain 

instances. For example. Maytag 

commented that automatic termination 

. is .not effective when drying items on a 

stationary rack inside the dryer. In 

addition. Maytag commented that timed 

dry is necessary for those occasional 

loads that are not sensed properly by 

automatic controls or for partial drying 

prior to ironing. (Maytag. No. 17 at 'l and 

8). Whirlpool agreed with May tag and 

provided an extensive discussion of the 

situations where timed dry would be 

necessary; (Whirlpool. No. 20. at 37-47). 

. ACEEE and EDF commented that the 

elimination of timed dry would decrease 

utility. and that it should be allowed. if 

the maximum setting were no longer 

than 30 minutes. (ACEEE. No. 18 at 2; 

and EDF. No. 19 at 'l). 

Maytag. Whirlpool and GEA alated 

that they wuaid support a 1I1aadud that 

wonld allow timers in conjunctian with. 

but not oYerridden by. Bntmnatjc 

controls. (Maytag. No. 17 at 10: 

Whirlpooi. No. 20 at 47; and GEA. No. 21 

at22J. GEA fmther stated that there 

should not be a limit on the Jettmg for 

timed dry. 

After reviewing the comments. DOE 

concluded that this feature. timed dry, is 

of benefit to 4:OD1lumt!!'S and aboald . 

remain as a manually lelected option. 

DOE is DOt able to determine if there is 

a basis for a limit on the timed dey; 

therefore. one·is not specified. 

. Reduced Air Flow 

RMI commented that reduced air flow 

could save energy. but that it would 

reduce consumer utility. (RML No. 12 at 

7). DOE agrees. and therefore did not 

iDclllde it in the FinaJ Rule. 

3. Dishwashers. 

General 

Whirlpool cammented that the 

proposed standard level 1 il tedmically 

feasible and cost justified. wDile Maytag 

commented that an energy Cactor of 0.37 

for standard sized dishwashers is 

achievable. (Whirlpool. No. 20 at 6; and 

May tag. No. 17 at 61. 

DOE determined that standard levels 

more stringent than these are technically 

feasible and cost justified. as discussed . 

below. 

Water Temperature 

P&G stated that its studies show that 

130 OF water is needed for satisfactory 

fatty and greasy soil removal in 

dishwashers. (P&G. No. 27 at 3). P&G 

states that the wash temperature may 

not reach 130 OF until the third water filL 

P&G's data indicate that the average tap . 

temperature is 132.5 OF. PciG said that 

the water heater temperature should 

stay at 140 OF and that the dishwasber 

inlet temperature should be left . 

unchanged. In addition. AHAM 

referenced a P&G report that shows "the 

need Cor 13D-140 OF v:ater in 

dishwaters." (AHAM • .No. 29 at 17). 

Also. GEA stated that reduced inlet 

water temperature can be accomplished 

only through use of water heating 

dishwashers. (GEA. No. 21 at 4!-

On the other hand. ACEEE and NRDC 

both commented that the Department 

had not presented evidence that loads 

containing animal fata would be 

insufficiently cleaned by lower water 

temperatures. (ACEEE. No. 10 at 6; and 

NRDC. No. 16 at 34). 

DOE reviewed the P8cG study and 

found that P&G studied four kinds of fa t 

at three teJD1ler8tures (90 OF. 120 OF. and 
..... 

Federal R~ I Vol: ,56. No. 93 I Tuesday. May 14. '1991 I Rules and Regulatio~ 22Z87 --~~~~~~~~~~~~~~~~~~~~~ 

140 'F), 120 of water appeared to remove 

most of the fata after one use and wash. 

However. on a seventh use and wesb, 

the removal of one of the fats (pork) was 

inadequate. 

Tllie Department notes that there was 

no discuaaion of what took place 

between tha first and aeventh uses and 

washes to cause the problem. 

Additionally. there wu no discussion of 

the Illse of alternative detergents. 

Furthermore. the. comDlImta do Dot 

address dishwashers with booster 

heatlll'8 IUch as ,water heating 

dishwa shera. 

NFtDC. Portland General Electric 

(PGE), and ACEEE commented that 

booster heaters should be considered as 

a de!lign option. not as a separate class. 

(NRIIC. No, 16 at 34-35; PGE. No. 23 at 2; 

and ACEEE. No. 18 at 4). 

After reviewing the commerits. the 

Department has concluded that a water 

heating dishwashe.r. which is essentially 

the s.me as a standard dishwasher with 

a bO(Ister heater. does not offer a 

distinct utility to the consumer. 

Accordingly. the Department dropped 

from consideration wate.r heating 

dishwashe.rs. both 115 and 220 volta. as 

sepal'ate classes. and added. as a design 

option for standard dishwashers. 

booster heate.rs, which allow a 120 OF 

wate!: heater set point while providing 

for the use of higher wash water templ~rature when neceaaary. 

Improved Food Filter 

GEA commented that reduced water 

consumption with an improved food 

nIter would result in units with 

unacc:eptable washing performance. 

GEA further commented that its 

experience indicates that the addition of 

food filters saves 0.67 gallons of water 

per cycle. not the 2.2-2.3 gallons used in 

the proposed rule. (CEA. No. 21 at 3. 4. 

and 8). Whirlpoolltsted that an 

improved food filter allows the 

reduction of water use by 20 percent (5 

to 4 fills). (Whirlpool. No. io at 6). 

Aftl~r consideration of the above. DOE 

has rE!tained the improved food filter as 

a possible design option to reduce bot 

water usage. as was done in the 

proposed rule. The intent of this design 

option is to reduce water usage from the 

12 gallons used by the baseline model to 

9.5 gallons used by two of the top rated 

dishwashe.rs in the Consumer Report 

test submitted by NWF. The magnitude 

of this water reduction is compatible 

with Whirlpool's experience of 

Improving the food filter. While there 

are other ways to reduce water usage •. 

DOE used the iinproved food filter as 

being representative of this concept. 

ThreeFiU 

NWF. NRDC and ACEEE commented 

that a three-fill option for dishwashers 

should be fully analyzed. (NWF. No. 11 

at 3; NRDC. No. 16 at 34; and ACEEE. 

No. 18 at 4). NRDC stated that DOE 

must analyze whether these models 

provide utility comparable to the foUl'-

fill models. AHAM commented that 

three-fill units have been manufactured 

but have shown poor performance. 

(AHAM. No • .zg at 16). Whirlpool stated 

that it is the manufacturer that produced 

the three-fill model referred to in the 

TSD. and that it no longer manufactures 

the model because of consumer 

complaints about performance. 

(Whirlpool. No. 20 at 13). Maytag 

commented that it had made a three-fill 

dishwasher that Consumer Reports 

criticized for poor washability; it could 

clean "prerinsed" dishes but not those 

that were not rinsed. Maytag 

discontinued the model because. it could 

not p,rovide comparable utility to fourfill models. (Maytag. No. 40 at 5 and 6). 

DOE reviewed the comments and 

concluded that three-fill models do not 

provide the performance required of ' 

dishwashers. The Department, therefore. 

did not include this option in the 

analysis for today's final rule. 

FiU Control 

NRDC commented that the 

Department should have considered an 

.improved fill control as a design option. 

(NRDC. No. 16 at 34). AHAM and 

Maytag commented that improved fill 

controls do not work properly. if th~ unit 

is not level. and that tolerances are 

manufactured into the unit to allow for 

this. (Maytag. No. 17 at 5: and AHAM. 

No. 29 at 15). 

DOE agrees with Maytag and AHAM 

that outoOf-level installation can sHeet 

diahwasher performance. 

oem finds. however. that an improved 

fill control is technolOgically feasible in 

that dishwashers can be installed level: 

therefore. DOE included it as a design 

option. 

IV. Product-Specific Diac:uaaion 

a. Clothes Washers 

1. Efficiency Levels Analyzed. DOE 

examined a range of standard levels. 

including the 1988 NAECA standards for 

two classes of clothes washers. AA 

discussed in the proposed rule. the 

Department did not consider standards 

for top loading semi-automatic. front 

loading and suds saving clothes 

waaherL Today's final rule retaina the 

1988 NAECA standard for these three 

classes. The impacts of any revised 

standards for the two classes 

considered were compared to the 1988 

NAECA standards. The impacts of the 

base case are generally not presented 

because they are calculated to be zero. 

Table 4-1 presents the efficiency 

levels that had been selected for 

analysiS. Alternate levels were selected 

to generate a range of impacts for 

analysiS. These efficiency estimates are 

for standard and compact capacity, toploading clothes washers. Standard level 

1 corresponds to efficiencies achieved 

by elimination of all warm rinses; level 2 

corresponds to efficiencies achieved-by 

adding a more efficient motor; level 3 

adds thermostatic mixing valvel and a 

plastic tub; level 4 adds. to level 1. a 

horizontal·axis tub rotation: and level 5 

adds. to level 4. thermostatic mixing 

valves and a plastic tub. 

TABLE 4-1.-5TANOAAD lEvELs ANALYZED FOR TOP-lOADING CLOTHES WASHERS 

CoInpai:t ... ___ • __________________ _ 0.87 

O.SIS Standald .... ,_ .. __________ ....... ____ • ________ -1 

• Capacity less 1tIan 1.S fll •• t;apacrty equal 10 or greater than 1.S ft. I 

2. Payback Period. Table 4-2 presents 

the payback period for the efficiency 

levels analyzed for the most prevalent 

class of product (standard clothes 

washers). For standard capacity. toploading clothes washers connected to an 

en.gy IIIc:tor (eu. fl/kWh) 

2 3 .. 5 

0.90 

1.1a 

0.92 

1.19 

0.98 

1.24 

." , ... 

. ... ~~ .. electric water heater •• taadUcl ..... ! 

&aU-lies the rebuttable 

1,8 .. the .cJditlcJne! 

'0 
·r· - ..... ' • .... -., ~.: : t '-

Federal Register I VoL 56. No. 93 I Tuesday. May 14. 1991 I Rules and Regulations 

"-

product will be less than three times the 

value of the energy savings that the 

consumer will receive during the first 

year. In addition. for standard capacity. 

top-loading clothes washers connected 

to a gas water heater. standard levels 1 

and 2 satisfy the rebuttable presumption 

teat. 

TABLE 4-2.-PAYBACK PERIODS OF DESIGN OPTIONS (yEARS) FOR STANDARD 

SIZE, TOP-lOADING CLoTHES WASHERS 

PeybKIl period 

Standard IeveJ WIttI gsa WIttI 

eIedric water water heater heater 

1 ... ____ ._. __ 0 0 

2 2.2 O.S 3._ •. _ •. _____ . 7.2 2_7 4. ___ 5.8 2.8 5. ________ 8.8 3.2 

3. Significance of Enel'8Y Savings. To 

estimate the base case ene1'8Y savings 

by the year 2015 due to revised 

standards. the energy consumption of 

new clothes washers sold under the 

NAECA standards. i.e .. the base case. is 

compared to the enel'8Y consumption of 

those sold under the candidate standard 

levels. For the candidate ene1'8Y 

conservation standards. the LBL-REM 

projects that cover the period 1993-2015. 

the following energy savings could 

result for each: 

Levell-{1.57 Quad. 

Level 2-{1.68 Quad. 

Level 3-{I.81 Quad. 

Level 4-5.69 Quads. 

Level 5-5.92 Quads. 

4. Economic Justification 

A. Economic Impact on 

Manufacturers and Consumers. The per 

unit Increased cost to manufacturers to 

meet the level 1 efficiency is $1: to meet 

levels 2-5. the manufacturers' 

incremental cost increases are $7.50. 

519. $83.50. and $19. respectively. for a 

standard. top-loadins clothes washer. 

See Technical Support Document. table 

3.16. 

At those levels of efficiency. the 

incremental consumer price increases 

are $0. $11.50. $30.30. $129.10. and $30.20 

for standard levels 1-5. respectively. See 

Technical Support Document. table 6.7. 

The per unit reduction in annual cost 

of operation (energy expense) at level 1 

is $25.70 and $11.40 for a top-loading 

standard-sized clothes washer 

connected to an electric water heater 

and a gas water heater. respectively; 

standard level 2 would reduce energy 

expenses by an additional $1.10 and 

$1.10; standard level 3 by $0.60 and 

$0.20; standard level 4 by $43.80 and 

.~:,'~~~ .. 

$23.80: and standard level 5 by $0.20 and 

SO.10. respectively. See Technical 

Support Document. Table 6.7. 

The LBL-MIM results for clothes 

washers show that standard level 1 

would cause manufacturers to have a 

decrease in ROE from 6.05 percent in the 

base case to 5.88 percent (a decline of 

3.1 percent). Standard levels 2. 4. and 5. 

are projected to reduce a prototypical 

manufacturer's ROE by 0.1 percent. 77.2 

percent. and 80.8 percent. respectively. 

while standard level 3 Is projected to 

raise it by 4.30 percent. See Technical 

Support Document. Table 7.17. This 

industry has displayed continuing 

consolidation for several decades. 

especially during periods of low 

earnings. By decreasing profitability. 

especially as DOE projects at standard 

levels 4 and 5. standards could lead to 

an increase in the financial burden on 

the industry. thereby possibly 

contributilig to 'greater consolidation 

and less competitiveness than is likely 

in the base case. See Technical Support 

Document. Section 7.4. 

The Department assumed for the 

Engineering Analysis that 

manufacturers would elect to eliminate 

the warm/warm setting and warm water 

rinse option before adding other design 

options. because these actions would 

result in minimal increases in . 

manufacturer costs. i.e .• $0.50 per design 

option. All of the other design options 

considered in the analysis. e.g .• 

Improved motor. plastic tub. would 

cause a significant increase in 

m~ufafturer costs in comparison to the 

f1l8t twQ options. Unlike all other design 

options considered in this analysis (for 

clothes washers. clothes dryers. and 

dishwashers alike) the elimination of the 

warm/warm setting and warm water 

rinse option is perceivable by the 

consumer. Other design options. 

Improved motors for example. are 

design features that would not be 

apparent to the consumer. In the event 

some consumers demand that the 

warm/warm setting and warm water 

rinse option be retained. manufacturers 

may retain these features and use design 

options which would have additional 

greater fixed and variable costs than 

estimated in order to meet the standard. 

This was given great weight in today's 

final rule as discussed below. 

Furthermore. since fmancial data of 

the type needed to characterize the 

prototypical manufacturer are generally 

not available. DOE had to make a 

number of assumptions based on the 

limited data publicly available. e.g .• 

Securities and Exchange Commission 

10K reports and company annual 

reports.' 

This approach was originally 

diacusied in the Advance Notice of 

Proposed Rulemaking (53 FR 17712. May 

18, 1988). and the Department did not· 

receive any comments that indicated a 

change in approach was warranted. 

B. Life-cycJe Cost and Net Present 

Value. Compared to the base case. the 

LCC analysis indicates that at each 

possible standard leveL the increase in 

purchase price would be offset by 

savings in operating expenses. See 

Technical Support Document. Figure 6.7. 

The lower life-cycle costs indicate that 

no standard level would cause any 

economic burden on the average 

consumer. Of the five candidate 

standard levels. level 4 had the lowest 

consumer life-cycle cosL Of the levels 

considered without horizontal axis. level 

1 had the lowest consumer life-cycle 

cost. 

Compared to the base case. standard 

level 1 would cause reductions in lifecycle costs of $106.30 and $43.00 for a 

top loadins standard-sized clothes 

washer connected to an electric water 

heater and a gas water heater. 

respectively; standard level 2 would 

reduce liIe-cycle costs by $89.10 and 

$34.80; standard level 3. by $52.80 and 

$2.30; standard level 4 would reduce life 

cycle costs by $287.10 and $81.50: while 

standard level 5 would result in 

decreases of $225.60 and $42.60. 

respectively. compared to the base case. 

See Technical Support Document. Table 

6.2. 

Compared to the minimum LeC point 

(standard level 1). standard level 2 

would cause an increase in life-cycle 

costs of $2.00 for a top-loading standardsized clothes washer connected to either 

an electric or gas water heater: standard 

level 3 would increase life-cycle costs 

by an additional $25.00 and $28.00: while 

standard level 4 would cause reductions 

in lifeoi:ycle costs of $228.00 and $136.00 

compared to level 1: and standard le\'el 

5 would result in an increa.se in lifecycle cost. compared to level 4. of $28.00 

and $30.00. respectively. See Technicai 

Support Document. Section 6.1.3. 

While DOE examined the effect of 

different discount rates (2. 7. and 15 

percent) on the LCC curves and 

generally found little Impact. the 

Department did not consider highe. 

discount rates. since such rates would 

be beyond the range of real. after-tax 

rates that consumers would likely face 

in fmancing the purchase of clothes 

washers. Similarly. DOE did not 

consider different energy prices. 

including regional prices.· in the LCC 

analysis. Since any standard is to be a 

national standard. DOE believed that 

national average energy prices were 

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Federal Regisl8r I Val. 5&. 'No. 93 '/ Tueeday. May i4. 1991 / Rules and Re8uIatiODl .' ',' 22269 -.~~~~~~~~~~~~~~~~~~~~~~ 

appropriate. However. DO& did 

eXllmine the effect of a usase rate 

diflrerent from the 416 cycles per year set 

by the DOE test procedure. Recent 

Prclcter and Gamble data appear to 

indicate that the national average 

clothes washer annual uaage rate is 406 

cye:les per year. more thaD ~ percent Ie .. 

than the test procedure representative 

a v.lrage use cycllt. The .li8htly lower 

uSIi:ge numbers re.ult in the lower lifecyde cost estimates that were pre.ented 

abClve. See Teclmica1 Support 

Doc:ument. SectiOll6.1.1.. 

The NPV analysis. a me .. ure of the 

net .avings to .ociety. indicates that 

stalldard level 1 would produce a NPV 

of S:S28 million to conaumera .. The 

cOl'l:esponding NPV numbers for levels 

2-5 are S508 million. minus $135 million. 

$1.294 billion. and $196 million. 

resllectively. See Technical Support 

Doe:wnent. Table 5.13. The negative NPV 

at standard level3lndicatea that at this 

standard level. society would .pend 

mor~ to purchase and operate washing' 

ma(:hines, as measured in 1981 dollars. 

than under the bue C881t. 

C, Energy Saving .. & lndicated 

above. standards will result in 

significant savings of electricity 

conllumption for clothes washers. 

D.Lessening of UtJ1ity or Performance 

of Products; As indicated above. DOE 

established claases of products in order 

to 8IJsura that the standarda analyzed 

would not lessen the existing utility or 

performance of clothea washers. 

& Impact of Lessening Competition. 

The determination of this factor was 

made by the Attorney General. In its revic~w of the proposed standards for 

clothes washers. the Department of 

Justice (DO)) concluded 'that "a 

sigDlificant lessening of competition may occu.r under certain conditiou." such aa the need for the smaller competitors to 

undmialce substantial redesign or 

retooling. (DOJ. NO. 3& at ')~ 

In the Notice of Proposed Rulemaking. 

standard level 1 and 2 were met by 

elimtnating the warm rinse option and 

addi:ng thermostatic mixing valves. DOf 

fOUlllci that "some manufactureramay 

not be able to comply with the proposed 

standards by making these design 

changes and may need to undertake more: substantial redesign or retooling 

that would impose substantial fixed 

cost!I." If. as DOE believes. lome 

manufacturers may elect to retain the 

warm/warm setting and warm water 

rinse in response to marketplace 

demunds. then manufactUrers will bave 

greater costs than estimated thus far,' 

and these increased costs are likely to 

affect smaller competitors more severely 

than larger ones. 

F. Need ta SawEnsrgy; Clothe. are expected to be-.01 • .Q9. and.06 

washers use electricity directly and are pen:ent for SOs. NOs and Co.. 

responsible for the water heater energy respectively in 2015. 

consumption that is necessary to lupply For SOs. NOs. and Co. emiasiona in 

the heated water to the clothes washer. 2015. the respective reductiona under 

Water heater energy consumption is standard level 2 aM.08. .os. and.05 

either in electricity or natural gas. percent; for standard level 1. the 

depending upon the water heater. respective emissiona reductions would 

ConaequentIy, clothes wa.hers are be .os, .00. and .04 percent. . 

. reaponaible for- both gaa and electricity G. Other Facton. After the closing . consumption.m 1987, 1.6 percent of . date of the record for the proposed rule. 

source electricity (or •• 44Z Quad) and 1.4 i DOB became aware of a new type of 

percent of naturalgu consumption (or. i washing machine now available in 

.z41 Quad) were accounted for on a i Europe. DOE believe. that this new national basia by clothe. washers. ' de.ign. top-loading with horizontal-axis 

in addition. decreasing future rotation. has great energy savings 

electricity demand as a result of potential. However. since DOE did not 

standards will decrease air pollution. propose any standards based on this 

See Technical Support Document, , design and theM is no information on AppendixD I. The greatest decreases in ! this technology in the record. DOE does, 

air pollution will occur for sulfur oxides 1\ not believe that it could establish a (listed in equivalent weight of sulfur standard based on this design in today's 

dioxide. or So.). For standard level S. in final rule. Baaed OD the limited data 

the year 2015. the estimated So. acquired to date. DOE hal analyzed 

reduction would be 89,418 tona. This design options based on thit technology. 

reduction repMsents o.ss percent of the The reaults aM presented below; 

United States SOs emissions that are however. DOE notes that all aspects of 

expected to be emitted by power plants these analyses are snbtect to change as 

In that year. more· data become available. Standard level 5 would also result in a decrease in nitrogen dioxide (NO.1 Based on the great energy savings 

emissions for the ye81' 2015 of 74,997 potential of tpis design. DOB Is 

tona. This decrease repMsents 0.7 evaluating this technology as soon as 

P

ercent of the total NO. emissions possible and has included clothes 

washers in the Advance Notice of 

expected to be emitted by power plants· Proposed Rulemaking for Nine Products. 

in that year. ' 55 FR 39624. September 28. 1990. In light Another consequence of the standards of this. DOE consideMd whether to issue 

will be the reduction of carbon dioxide a final rule for clotheswashera today or (COJ) emissions. Standard lewl5 is 

estimated to reduce United States Co. whether to repropose a new rule emissi~s by about 0.43 percent for the inatead. Because of the time involved In 

yeat 2DaS. in 2015. standard level 4 Is reproposing and the energy savings thus 

expected to reduce So,. NO. and Co. lost. DOE decided to i8lue a final rule 

emissions by .53. .67. and.41 percent. today for clothes washers to achieve 

respectively. Standard level 3 reductions energy savings now but giving great 

• Aa I renit of proYIlfOlJll In the recently ftUlcted 

CIea Air Act AmeadmeDta of 1990 (Pub. L 101-MlI. 

Novcober 15, 1990). the Clh:aJated redUctioDi of 

so. and NO. have beeD o_timated. 

For so.. auy emiNiou'reducl!cnw cauaed by 

appliance .tandanla prior to thl year 2000, will be 

pan of much greeteJ: So. reductiOM that ant 

required by the DeW ameDdmenta. Aftar the yeu 

2000. So. reduCtloM Icbieved through eppllance .taudania or any other __ by thole emitlinll so. CUI be eemed .. c:redltl. Th_ are credlt. 10 amil 

an 8IIIOuni of So. equiYaleftt to the amOllJlt of the 

so. reduc:tl0D that _1M the creditao The new 

amendment. aUow thou MnIiD8 th6 credit. either 

10 aell thlllD to othen or to "bank" thlllD lor future 

UI& Therefore. efter the yeu 2000. to the extant that 

appllauc:e .tandud8 rnuit In so. credib being 

euaed. and to the extent tball1lC.b .tazIdanb. ' 

Induced credit. .... told BDd \lied by otileft. the 

Nallona! so. reductiona will Dot occur. . 

The new law eiso requirel thai utility boilers emit 

la_level. of NO.. AI a renit. the expected 

emiutoDi of NO. will be leu thaD wa. U8\IIIIed ill 

the Department'. eetimatioD of the NO.. eaVingl 

acbievlbla through the praml applllllOll .tanduda 

revi.iona. The actual No..reductions resulting from 

today" atandard reYI.icma will be leu thaD tho .. 

praautedb-. 

consideration to minimizing retoo~ 

COlts for manufacturers. Minimizing 

retooling costs was given great weight in 

today's Final Rule because DOE Is . reconsidering clothes washer standards 

presently. If this reconsideration results 

In standards based on a top-loading 

horizontal axis rotation design. major 

redesign and retooling would be 

necessary. DOE does not believe it 

would be economically justified to 

impose a major retooliDg at this time. 

,5. Conclusion. Section 325(I)(Z)(A) of 

the Act specifies that th~ Department 

must consider. for amended standards. 

those standards that "achieve the 

maximum improvement in energy 

efficiency which the Secretary 

detennines is technologically feasible 

and economically justified." 

Accordingly. the Department fU'8t 

considered the max tech level of 

efficiency. i.e .• standard levelS. for 

amended clothes washer standards. 
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f 

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Federal Re8isfer I Vol. 56. No. 93 I Tuesday. May 14. 1991 I Rules and Regulations 

Of the stanuard levels analyzed. level 

5 will save the most energy (5,92 quads 

between 1993 and 2015), In order to meet 

this standard. the Department assumes 

that all clothes washel'll will be toploading. horizontal-axia machines. Such 

machines are presently available in 

Europe. 

In addition to the top-loading. 

horizontal-axis. technology. standard 

levelS would involve changes that can 

presently be incorporated. namely. the 

elimination of warm rinses. an improved 

motor. thermostatic mixing valves. and a 

plastic tub. 

M mentioned above. the principal 

technology on which this standard level 

is based. top-loading. horizontal-axis 

rotation. was brought to the attention of 

the Department after.the close of the 

comment period on the proposed rule. 

Since no one has had a chance to 

comment on it. and since no comments 

on it were volunteered during the 

comment period. the Department 

believes that it cannot issue a final rule 

based on this technology. Furthermore. 

the results of the analysis are not 

considered to be finn and are subject to 

possible change follOWing public 

comment and ~her analy~is in a separate proceeding. Based on the 

above and because the top-loading. 

horizontal-axis rotation design 

represents the predominant energy 

saving feature in standard level 5. 

standard level 5 was not considered for 

this Final Rule. 

Standard level 4. also; is based 

prinCipally on the same horizontal axis 

technology as standard level 5. For the 

reasons mentioned above. therefore. the 

Department believes that it cannot 

consider it for this final rule. 

The next most stringent standard level 

is standard level 3. This standard level 

Is projected to save 0.81 quad of energy 

between 1993 and 2015. Among the 

level's other positive impacts are the 

projections of lower Lce's than those 

for the baseline (by $52.80 and $2.30 for 

clothes washers connected to electric 

water heaters and gas water heaters. 

respectively), In addition. for 

households with electric water heaters. 

the payback for standard level 3 is 

projected to be only 2.7 years. 

Furthermore. the LB~MIM projects that 

the ROE of a prototypical manufacturer 

would be 6.31 percent. which would 

. exceed the base case projection of 6.05 

percent. However. this standard would 

preclude the purchase of the most costeffective unit; it would cause an 

Increase in Lee (compared to the 

minimum Lee point) of$25.00 and 

$28.00 for a top-loading standard-sized 

clothes washer connected to an electric 

water heater and a g8S water heater. 

respectively. 

On the other hand. the payback to 

consumers with gas water heaters 

would be 7.2 years. half that of the 

appliance's 14.1 years average lifetime. 

In addition. this standard level would 

raise the purchase price to consumers 

by 11 percent. resulting in a decline in 

shipments of nearly tWo million units 

between 1993 and 2015. As a 

consequence. the NPV of this standard 

would be a negative.$135 million. the 

lowest of any standard level. The 

negative NPV and increase in LCe 

(compared to the minimum LCC point) 

of this standard level are troubling to 

the Department. for they indicate that at 

this standard level. society would spend 

more to purchase and operate washing 

machines than under the base case. 

Additionally, standard level 3 could 

involve substantial increased costa to 

manufacturers. As noted above. the 

improved motor design option used to 

achieve the energy savings of this 

standard level added $7.50 to the per 

unit cost of manufacturing clothes 

washers. Analytically, the Department 

treated this cost as a variable cost as it. 

assumed that all parts would be 

purchased. Earlier. however. it was 

noted that Whirlpool had commented 

that because an improved motor would 

require an improved suspension system. 

the company would have to undertake . 

$5 million in tooling costs for the 

improved suspension system. While the 

Department did not treat any of the 

costa in its analysis for this standard 

level a.'fixed costs. it recognizes that 

fIxed costs could be substantial for 

some other manufacturers. as well. 

While not treated as such in the 

analytical output. DOE believes that 

retooling costa for standard level 3· could 

be Significant. Since DOE has decided to 

consider the horizontal axis technology 

with its associated fixed costs as soon 

as possible. the Department issues a 

final rule today that imposes minimal 

impacts on manufacturers' retooling 

costs. 

The Department. therefore. concludes 

that the burdens of standard level 3 for 

clothes washers outweigh the benefits, 

and rejects the standard level. 

Standard level Z would save 0.68 quad 

of energy between 1993 and 2015. and 

would repay itself to the consumer in 0.8 

years (for electric water heat). and 2.2 

years (for gas water heat). thereby 

passing the rebuttable presumption test 

far both water heating fuels. Among the 

level's other positive impacts are the 

projections of lower LCC's than those of 

the baseline (by $89.10 and $34.80 for 

clothes washers connected to electric 

water heaters and gas water heaters. 

respectively). 

However. compared to the minimum 

LCC point. this standard level would 

cause an increase in life-cycle cost of 

$z.oo for top-loading standard-sized 

clothes washers connected to either an 

electric water heater or a gas water 

heater. This standard level could . 

involve substantial increased costs to 

manufacturers. As noted above. the 

improved motor design option used to 

achieve the energy savings of this 

standard level added $7.50 to the per 

unit cost of manufacturing clothes 

washers. Analytically. the Department 

treated this cost as a variable cost as it 

assumed that all parts would be 

purchased. Earlier. howe"er. it was 

noted that Whirlpool had commented 

that because an improved motor would 

require an improved suspension system. 

the company would have to undertake 

$5 million in tooling costs for the 

improved suspension system. While the 

Department did not treat any of the 

. costs in its analysis for this standard 

level as fixed costs. it recogniZaa that 

flXed costs could be substantial for 

some other manufacturers. as well. 

While not treated as such in the 

analytical output. DOE believes that 

retooling costs for standard level 2 could 

be significant. Since DOE has decided to 

consider the horizontal axis technology 

with its associated flXed costs as soon 

as possible, the Department issues a 

final rule today that imposes minimal 

impacts on manufacturers' retooling 

costs. 

In addition. as discussed above. DOE 

believes that some manufacturers may 

elect to continue to offer the warml 

warm setting and warm water rinse 

option. If this were to occur. a standard 

at this level could result in 

manufacturers needing to undertake 

more substantial redesign or retooling 

which would impose substantial fixed 

costs and which would likely affect 

smaller competitors more severely than 

larger ones. 

Therefore. the Department concludes 

that the burdens of standard level 2 for 

clothes washers outweigh the benefits. 

and rejects the standard level as not 

being economically justified. 

After carefully considering the 

analysis. the Department is amending 

the NAECA-imposed 1988 standard for 

clothes washers with standard level 1 

for clothes washers. The Department 

concludes that standard level 1 for 

clothes washers saves a significant 

amount of energy and is technologically 

feasible and economically justified. 

There would be Significant energy 

savings at this level of efficiency. During 
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Federal RegiSter I Vol. 56~ No. 93 I Tuesday. May 14. 1991 I Rules and Regul~tion8:': < :. ':,.'.22271-·" 

• 

the period 1993-2015. these savings are 

calculated to be 0.51 quad of primary 

ellergy. Such savings would total more than 4.7 percent of base case energy use. 

In addition. the standard could have a p,)sitive' effect on the environment by 

I't!ducing the emissions of NO. and So. 

b:y as muCh as 0.02 and 0.01 percent. 

I't!spectively. by the year 2015. However. 

a:J discussed above. to the extent that 

SO. credits will be used. the So. 

I't!ductiona will not occur. Furthermore. 

tlite standard will reduce emissions of Co. by 11.683 million tons. or 0.01 

purcent. over the forecast period. 

The standard Is also expected to 

reduce waler use by six billion gallons 

over the forecast period. 

The technologies that are necessary to 

meet this standard are presently 

a,railable. The Department finds the 

level to be economically justified. The 

cClnsumer payback of this standard level 

is immediate since the small cost of 

clitanging the controls to eliminate any 

w·llrm rinse settings is not expected to 

bE! added to the retail price of a clothes 

willsher. This standard has the lowest 

LGC and is expected to result in a reduction in LCC of approximately 

$106.30 and $43,00 for clothes washers 

connected to electric water heaters and 

gas water heaters. respectively. 

Additionally. the standard is expected 

to have only a moderate lmpact on the 

pllototypical manufacturer's ROE. 

causing a 0.19 percentage point decline. 

Sililce this standard does not involve 

substantial redesign or retooling. the 

DE!partment expects that it will not have 

negative impacts on smaller 

competitors. 

b. Clothes Dryers 

1. Efficiency Levels Analyzed. 

Standard level1 corresponds to 

efficiencies achieved by the addition of 

moisture- or temperature-termination: 

le"el 2 corresponds to efficiencies 

achieved by adding insulation: level 3 

adds exhaust heat recycling efficiencies: 

level 4 adds. to level 3 electric dryers. . microwave clothes drying efficiencies: . 

and level 5 adds. to level 3 for electric 

w.,ers. efficiencies achievable with heat 

pump clothes drying. These standard 

le,'els are presented in Tables 4-3 and 

4-<&. 

TABLE 4-3.-STANDARD levELS ANAI~YZED FOR STANDARD CAPACITY ELECTRIC AND GAS CLoTHES DRYERS 

Baleline. . ...• -.----1 1 ..........• _. ______ ... 

~::: I'· lib/Kwh) electric gas 

2.30 

2.61 

TABLE 4-3.-STANDARD . lEVELS ANALYZED FOR STANDARD CAPACrTY ELECTRIC AND GAS CLOTHES DRYERS-Continued 

Standard levet 

2 .. __ ......... _. ___ •• ,_ .•• _ •• ~ ... 3. ____ . __ ., __ .... _ 

4 .... __ ••. _._ .. __ ._. __ 

5 ... _._._ .......... _. __ ... _._._ 

Energy 

factor 

etectric 

3.01 

3.21 

4.07 

8.81 

lib/Kwh) 

gas 

2.87 

2.84 

TABLE 4-4.-STANDARD LEVELS ANALYZED FOR CoMPACT ELECTRIC 

CLoTHES DRYERS 

Energy Factor (1b/KWh) 

Compact, I Compact, 120V 240V 

Standard level baseline . 1 .••• _____ _ 

2,_._. ____ . 3_ ..... ____ _ 

4._ ..... ___ ._ 

5._ ..... ___ .... _. 

2.70 

3.07 

3.13 

3.33 

4.23 

8.95 

2.50 

2.84 

2.90 

3.08 

3.92 

S.28 

2. Payback Period. Table 4-5 presents 

the payback perioda for the efficiency 

levels analyzed for the most prevalent 

classes of product (standard electric and 

gas). For standard-size' electric clothes 

dryers. only standard levels 1 and 2 . satisfy the rebuttable presumption test: 

these levels result in paybacks to the 

consumer in less than 3 years. 

For standard gas clothes dryers. 

however. there is no standard level 

whose efficiency improvement will 

repay]tself to the consumer in less than 

3 yeaia. 

TABLE 4-5.-PAYBACK PERIODS OF DESIGN OPTIONS (yEARS) FOR STANDARD 

ELECTRIC AND GAS CLOTHES DRYERS 

Standard levet 

Electric i Gas 

. . I i==:===§ 3 ____ ._ ......... _ ...... _ 4 •••• ____ ._ .... _. __ _ 

5 __ ",, __ , ___ , 

,.21 4.4 

2.51 9.3 

::~ ...... , ... :~.~ 6.9 .. _ .... _ 

3. Significance of Energy Sa~·jngs. The 

Department estimated the energy 

savings that are expected to result by 

the year 2015 from the energy 

consumption of new electric and gas 

clothes dryers sold in the absence of 

amended standards and compared it to 

the energy consumption of new electric 

and gas clothes dryers sold' under 

amended standards. When energy 

conservation standards are imposed. the 

LBL-REM projects that over the period 

1993-2015. the follOwing energy savings· 

from clothes dryers would occur: 

Electricity Gas 

Levell............ .58 Quad ...... _.. ,03 Quad. 

Level 2 _.. .76 Quad .. _. .os Quad. 

Level 3 1.4 Quadl_ .12 Quad. 

Level 4 .. 3.63 Quads ..... .en Quad. Level 5 .... ___ 6.61 Quads .2Z Quad. 

The negative gas savings at levels 4 

and 5 are a result of those standards 

imposing such a large price increase on 

electric clothes dryers .that a substantial 

switch to gas dryers occurs. This switch 

is so great that aggregate gas . 

consumption exceeds that of the base case. i.e .• there are negative savings of 

gas at those standard levels: See 

Technical Support Document. Table 

5.18. 

4. Economic Justification. A. 

Economic Impact on Manufacturers and 

Consumers. The per unit increased cost 

to manufacturers to' meet the level 1 

efficiency is $8 for a atandard electric or 

gas unit. To meet levels 2-5. the 

additional cost increases, comp~d to 

the baseline. are $14.60. $44.60. $102.10 

and $164.60. respectively, for electric 

dryers: for gas dryers. the additional per 

unit cost. compared to the baseline. to 

meet standard levels 2 and 3 are $14.60 

and $44.60. respectively. See Technical 

Support Document. Tables 3.22 and 3.25 • 

At these levels of efficiency. the 

incremental consumer price increases. 

compared to the baseline. for electric 

clothes dryers are $13. $23.70. $72.30. 

$167.50. and $395.30. For·gas dryers. the consumer price increases at levels 1-3 

are $13.00. $23.70. and $72.30. 

respectively. See Technical Support 

Document Tables 6.9 and 6.10. 

The per unit reduction in annual cost 

of operation (energy expense) of 

standard electric clothes dryers at level 

lis $9.20. standard level 2 would reduce 

energy expenses by an additional $1.30: 

standard level 3 by $4.00: standard level 

4 by an additional $13.10; and standard' 

level 5 by an additional $25.70. For gas 

dryers. the annual cost of operation at 

level 1 is reduced by $2.60: standard 

level 2 would reduce energy expenses 

by an additional $0.40; and standard 

level 3 by $1.10. See Technical Support 

Document. Table 6.9. . 

The LBL-MIM results for clothes 

dryers estimate that standard level 1 

would cause manufacturers to have an 

increase in ROE from 6.6 percent in the 

base case to 9.6 percent. At standard 

levels 2 through 5. the ROE's (compared 

to the base case ROE) are 1.9. minus 2,3. 

minus 15.5 and minus 30.3 percent •. respectively. See Technical Support 

Document. Table 7.25. 
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F ....... ~ I VoL .56. No. 93 I Tuesday. May 14. 1991 I Rules and ReguJaticma 

The reasoa for the etriJdDg declines in 

ROE under atandud &net. s,..& I. . 

thought to be the iAcWatry's ptice 

elasticity of demaad: These standard 

levela cause such • large price increase 

that a .i8Difjc:mt dediDe in the qwmtity 

of dryers demanded occars..1n LBLMIM. this decrea1le iD anita demanded causes e greater reduction in revenue 

than in variable COlts and. as a result. a 

decrease in profit and ROE. 

Th1a industry baa displayed 

coaHmalng CDn8OIfclation fOl'several 

decades. eapecia1l, du:ring perioda of 

10. earnings. By increasing profitability, 

as DOE pro;ecu at ataDdard levela 1 and 

2. standards could lead to a reduction in 

the rate of aucll CODIIOiidatiODl, thereby 

possibly contributing to more robust 

competiliveaesa than is likely in the 

base case. 

The Department's characterization of 

the prototypical llUlDUiacturer in the 

base cue usumea that manufacturers' 

typical clothes dryer designs are baaed 

OD the combinatioa of options presented 

in the Engineerins Aaaiyais for the 

baseline uaiL H 'Dsm'lacturen U88 a 

different combmaticlll of design options 

to produce clothe. dryen that minimally 

comply with the 1994 standard. the 

Department may have inappropriately 

characterized the financial position of 

the prototypical manufacturer in the 

. LBL-MlM. Furthermore. since financial 

data of the type needed to characterize 

the prototypical manufacturer are 

generally not available. DOE had to 

make a number of assumptions based on 

the limited data that is publicly . 

available. e.g .. Seturities and Exchange 

Commission 10K reports and company 

annual reports. 

This a'PProach was originally 

discussed in the advance notice of 

proposed ruiemaking (53 FR 17712. May 

18. 1988). and the Department did not 

receive any commenta that indicated a 

change in approach was warranted. 

B. Life-Cycle Cost and Net Present 

Value. The Lee analysis indicates that 

at each possible standard level for 

standard electric dryers. but only at 

level 1 for gas dryers. the increase in 

purchase price would be offset by 

savings in operating expenses. See 

Technical Sllpport Document. Table 6.1. 

Aiso. of tire candidate standard levels. 

standard level 2 for standard electric 

clothes dryers and standard level 1 for 

gas clothes dryers had the lowest LCC. 

This indicates that at these levels the 

standard would not caase any economic 

burden on the aVe!'8ge consumer 

because of the decrealriDg LCC. 

&ned on 19158 Us6se patterns. 

compared to the base case. standard 

levelt would ea1!S8 a reduction in LCC 

of $76.80 for standard electric clothes 

dryers and $12.10 for standard gas 

clothes dryens: standard level Z would 

reduce LCC from the base case for an . 

electric dryer by $42.20. but raise that of 

a gas dryer by $1.50: standard level S 

would result in an LCe decrease from 

the base case of $32.30 for a standard 

electric dryer. but an increase of $39.30 

for a gal clothes dryer: standard level 4 

for a standard electric dryer would 

result in a decrease in LCe of $66.20. 

compared to the baae case: and 

standard ~ 5 would result in a $90.00 

decrease in LCe. compared to the base 

case. See Technical Support Document. 

TableS.1. 

While DOE examined the effect of 

different discount rates (2. 7, and 15 

percent) on the LCC curves and 

generaUy found little impact. the 

Department did not consider higher 

discount rates. Since such rates would 

be beyond the range of real. after-tax 

rates that CODSumers would likely face 

in financing the purchaaea of clothes 

washers. Similarly. DOE did not 

consider different energy prices. 

Including regional prices. in the LCe 

analysis. Since this is to be a national 

standard. DOE believed the National 

average energy prices were appropriate. 

However. DOE did examine the effect of 

a usage rate different from the 416 

cycles per year set by the DOE test 

procedure. Recent Procter and Gamble 

data appear to indicate that the national 

average clothes washer annual usage 

rate is 406 cycles per year. more than 2 

percent less than the test procedure 

repre8~tative average use cycle. The 

s1iglitly lower usage numbers result in 

the lower life-cycle cost estimates that 

were presented above. See Technical 

Support Document. section 6.1.1 

The NPV analysis indiates that 

standard levelt would produce an NPV 

of $1.263 billion over the forecast period 

(of which $1.212 billion would be 

attributed to the standard on electric. 

dryers). At standard level 2. the NPV 

would be $1.301 billion. of which $1.292 

billion would come from the standard on 

electric dryers. Standard level 3 would 

produce an electric dryer NPV of $1.009 

billion and a gas dryer NPV of minus 

$231 million. for a total NPV for the 

standard of $778 million. Standard level 

4 would produce a $1.811 billion NPV fOl' 

electric dryers. but. under this standard 

level. the NPV for gas dryers would be a 

negative SZM million. leaving the 

standard', NPV at $1..527 billion. Lastly, 

standard levelS would produce an NPV 

of$806 million (of which the standard 

would produce an NPV of $1.285 billion 

and minus $479 million on electric and 

gas dry1!rs. respectively). See Technical 

Support Document. Table 5.22. 

c. Energy Savings. AI indicated. 

above. .taodarda wiU relUlt in aavings 

of energy CDllBIDDption by clothes' 

dryers. The cumulative eJl8l'8Y savings 

over the 1993-201S period would range 

from 0.81 Quad at standard level 1 to 

6.39 Quada at standard level S. See 

Technical Support DOCWDI!Dt. Table' 

5.18. 

. D. Leuening of Utility 01' Perfo .. 2aJllCe 

of Products. AI indicated above. DOE 

e-bliahed cla.aea of pt'Oduct8 iD order 

to easure that the atandada aualyzed 

would not lessen the m.liDa utility Ol' 

performance of dothea dryers. 

E./mpact of Leuening CIJmpelition. 

Thede~tiODofthisfadorwaa 

. made by the Attorney GeneraL In ita . 

comments on the proposed rule. The 

Department of Justice concluded that the 

proposed standard was not likely to 

produce a competitive impact (DO,. NO. 

38 at 4). 

F. Need 10 $a(lf1 Energy. CIotbea 

dryers use electricity and natural gas a. 

their energy sources. Between 1993 and 

2015. without amended staDdarda. 

clothes dryers are expected to ccm8UJDe 

14.84 quads of energy. Standard levelt 

would save .61 quads. or 4.1 percent. of' 

that amount. while standard levels z-s 

would save 6.5. 10.2. 24.3. and 45.6. 

percent. respectively. The savings at 

standard levels 4 and S are due almost 

entirely to electric clothes dryers. 

in addition. as noted above for clothes 

washers. decreasing future electricity 

demand as a result of standards will 

decrease air pollution. See Technical 

Support Document. Appendix D.·The 

greatest decreases in air poUution 

caused by amended standards on 

clothes dryers will occur for sulfur 

oxides (listed in equivalent weight of 

sulfur dioxide. or SQ,). For standard 

level 5. in the year 2015. the estimated 

so. reduction would be 171.240 tons. 

This reduction represents 1.06 percent of 

the United States SOt emissions that are 

expected to be emitted by power plants 

in that year. 

Standard level 5 would also result in a 

decrease in nitrogen dioxide (NOt) 

emissions for the year 201S of 125.372 

toni. This decrease represents 1.18 

percent of the total NOt emissions 

expected to be emitted by power plants 

in that year. Standard level 5 is 

estimated to reduce United States eOt 

emissions by about 0.60 percent for the 

year 2015. 

In 2015. standard level 4 is expected 

to reduce SOt. NOt, and co. emissions 

by.52. .59 and .31 percent. respectively. 

Standard level 3 reductions are 

expected to be .20 .. 23 and .13 percent 

• Also _ rootnote number e. llboft. 
, 

., 

',f., ,} 

''I 

.' Federal Register I VoL 56. No. 93 I Tuesday. May 14. 1991 I Rules and Regulations 22273 

for SOt. NO. and Co.. respectively in 

2015. 

The reductions of SOt. NOt. and Co. 

fQr standard level 2 in .2015 are expected 

to be .11 •• 13, and .07 percent. 

respectively. while the respective . 

reductions at standard level 1 are .08. 

.10. and .05 percent. 

G. Other Factors. There were no additional factors affecting clothes 

dryers considered in thia review .. 5. Conclusion. Section 325{1}(2)(A) of 

the Act specifies that the Department 

must consider. for amended standards. 

those standards that "achieve the 

maximum improvement in energy 

efficiency which the Secretary 

determines is technologically feasible 

and economically justified." 

Accordingly. the Department fllst 

considered the max tech level of 

efficiency. i.e .. standard levelS. for 

amended electric clothes dryer 

standards. In this conclusion. discussion 

of standards for electric clothes dryers . 

will be presented first. followed by the 

discussion of standards for natural gas 

clothes dryers. 

A. Electric Clothes Dryers. Of the 

standard levels analyzed. level 5 will 

save the most energy (6.39 quads). The 

technologies that would be involved in 

meeting this standard level are 

temperature- or moisture-sensing 

automatic termination. insulation. and a 

heat pump. The Department is not 

aware of the existence of any 

residential-sized heat pump clothes 

dryers. 

The consumer payback of this 

standard is 6.9 years. less than one-half 

the estimated 17.1 years average lifetime 

. of clothes dryers. At $921. this standard 

level is at the LeC minimum. and is $127 

less than the LCC of the baseline unit. 

The standard. however. would increase 

the purchase price of electric clothes 

dryers by 132 percent ($395). thereby 

precluding many consumers from being 

able to purchase the product. Under this 

standard. shipments of electric clothes 

dryers are expected to decrease by 

nearly 19 percent, or 16.3 million units 

over the 1993-2015 period. The NPV is 

·estimated to be $1.285 billion. 

Because of the decline in shipments. 

J7esulting in large part from the great 

price increase. the standard would have 

11 devastating impact on the prototypical 

mariufacrurer's ROE. driving it down 

from a positive 6.8 percent in the base 

<:ase to a negative 30.3 percent (a 

decline of 546 percent). Such a loss 

situation would undoubtedly have 

sldverse competition impacts. The 

Department. therefore; concludes that 

llle burdens of this standard level 

outweight the benefits. and. 

consequently. rejects standard levelS. 

The next most stringent standard level 

for electric clothel dryers is standard 

level 4. This standard level would save 

the second greatest amount of energy 

(3.63 quads). 

The prinCipal energy-conserving 

technology in standard level 4 is 

microwave energy. Microwave clothes 

dryers have been built and undergone 

limited testing. . 

The conswner payback of this 

standard level in 6.0 years. It has the 

second lowelt LCC which. at $945. is 

$103 below the base case. At $467. Its 

price is nearly 56 percent more 

expensive that the baseline unit: this 

would preclude many consumers from 

being Ilble to purchase the product. 

Shipments would decrease by more than 

15 percent. or 13.1 million units over the 

1993-2015 period. The NPV is $1.811 

billion. the highest of any standard level. 

Because of the 15 percent decline in 

shipments under standard level 4. the 

prototypical manufacturer'l ROE would 

decline from a positive 6.8 percent in the 

base case to a negative 15.5 percent (a 

decline of nearly 328 percent). This 

would also likely have adverse 

competitive effects. The Department. 

therefore. concludes that burdens of 

standard level 4 outweigh the benefits. 

and rejects standard level 4 for electric 

clothes dryers. 

Standard level 3 for electric clothes . 

dryers. the next most stringent level. 

would save 1.4 quads of energy. 

This standard level would involve 

automatic tennination. insulation. and 

recycling of exhaust heat. all designs 

that can presently be found on clothes ·~rs. . 

. The consumer payback is 5.7 years . 

The LCC, at $979. is $69 below the 

baseline. The purchase price. $372, is 24 

percent more expensive that the 

baseline unit. which could preclude 

many consumers from being able to 

purchase the product. Shipments would 

decline by nearly 3 percent. or 2.4 

million units over the forecast period. 

The NPV is $1.009 billion. the lowest of 

any standard level. 

Because of the price increases and 

shipments decline. the impact on the 

prototypical manufacturer's ROE would 

be to drop from a positive 6.8 percent in 

the base case to a negative 2.3 percent 

(a decline of 134 percent-this result 

includes level 3 for gas dryers as well). 

This could lead to adverse impacts on competition. Accordingly. the 

Department believes the burdens of 

level 3 outweigh the benefits. and rejects 

this standard level. . 

The next most energy-conserving 

standard level is standard level 2. After 

carefully considering the analysis. the 

Department is amending the NAECA· 

imposed 1988 standard for electric 

clothes dryers with standard .level 2. The 

Department concludes that level Z 

standards for electric clothes dryers 

save a significant amount of energy. are 

technolOgically feasible and 

economically justified. 

As discussed above. there wiu be 

significant energy savings at this level of 

efficiency. During the period 1993-2015. 

these savings are calculated to be 0.76 

quad of primary energy. Such lavings 

would total more than 6 percent of base 

case energy use. In addition. the 

standards will have a positive effect on 

the environment. 

The technologies that are necessary to 

meet this standard are presently 

available. The Department finds the 

level to be economically justified. The 

consumer payback of this standard level 

is 2.5 years for electric clothes dryers. 

This standard also relults in a reduction 

In LeC of $79. In addition. the standard 

will result In an NPV to the nation of 

$1.292 billion. Additionally. the standard 

is expected to have a positive impact on 

the prototypical manufacturer's ROE. 

causing an increase from 6.8 percent in 

the base case to 7.9·percent under this 

standard. 

Lastly, by increasing profitability. this 

standard level could have positive 

competitive effects. 

B. Gas Clothes Dryers. Of the 

s~dard levels analyzed. level 3 will 

save the most energy (0.12 quad). The 

technologies that would be involved rn 

meeting this standard level are 

temperature or moisture termination. 

insulation. and recycling of exhaust 

heat. These technologies are all 

presently available. The consumer payback of this standard is 21.2 years. 

At $582. it is at the LCC maximum. and 

is $33 more expensive than the baseline 

unit. The standard would increase the 

purchase price of a gas clothes dryer by 

$72. or 21 percent. thereby precluding 

some consumers from being able to 

purchase the product. Shipments of gas 

clothes dryers are expected to decline 

1.1 million units (5.1 percent) during 

1993-2015. The net present value is a 

negative $231 million. 

The prototypical manufacturer's ROE 

at level 3 would. as noted above. decline 

from a positive 6.8 percent in the base 

case to a negative 2.3 percent (which 

includes the result at level 3 for electric 

clothes dryers). This could lead to 

negative competitive impacts. The 

Department believes that the burdens of 

this standard level outweigh the benefits 

and. therefore. rejects standard level 3 

for gas clothes dryers. . 

The next most energy-conserving 

standard level is standard level 2. After 

.~ 
J • 

" 

:' .. . :-; .-

Fedem1 RegUar' I Vol 56. No. 93 I Tueaday. May 14. 1991 I Rules and Regulations 

I<arefull, cmaderiDg the analysis. the 

Departmeut fa amending the NAECA. 

imposetll988 standard for gas clothes 

dryers ~th standard level 2.. The 

Department Conciudes that level 2 

standards for gu clodIet dryers save B 

significant amount of energy. are 

technoiogicaUy feuibAe aDd 

eammruailly~~aDdthatthe 

benefits of the stallda:rtB outweiP the 

burdeuL 

AS diecasaed above. there would be 

significant energy n"linss at thililevel of 

efficiency. During the period 1993-2015. 

these savingll are calculated to be O.OS 

quad of primary energy. Such savings 

would total 4.1 percent of base case, 

energy use. 

The tedmologies that are ueceS1lary to 

meet dUB ata:ndard are presendy 

avaiLable. The Department finds the 

level to be economically justified. The 

consumer payback of this standard level 

is 9.3 yean. In addition. the standard 

would result in an NPV to the nation of 

$9 million. The standard is expected to 

have a positive impact on the 

prototypical manufacturer', ROE. 

causing a 1.1 percentage pOint increase 

(this includes level Z results for electric 

dryer production. also). This standard 

results in a reduction in LCC of $S. The 

standard. however. is beyond the 

miDimum life-cycle cost point. thereby 

precluding consumers' from purchasing 

the most cost-efrective unit. 

c. Dishwashers 

L Efficiency Levels AnaJ}'Zed. Table 

4-3 presents the efficiency levels 

selected for analysis for 1993. Alternate 

levels were selected to generate a range 

of impacts for analysis. Initially, the 

levels were selected for the class of 

standard dishwasher (115 volt). Level 5 

corresponds to the highest efficiency 

level identified in the engineering 

analysis. Levels 4 through 1 correspond 

to successively lower efficiencies than 

that of levelS. Each level was analyzed 

discretely in the engineering analysis. 

Standard levels for the compact class of 

dishwashers were based on the 

combination of design options for the 

standard dishwasher (115 volt). 

TABlE 4~.-ALTE'RNAnve EFFIC1ENCY LEVELS FOR 1993 FOR DISHWASHERS (ENERGY FACTOR = lOAos/xWHI YA.) 

ProIU:t etas 

8 .... 

Compact Dishwashers (11SVl--. O.G 

S1andard 0IshwastIer (1 15V1._._. __ .......... ___ ...... 0.32 

2. Payback Period Standard level 1 

involves efficiencies achievable by 

reducing the use of hot water from 12..0 

to 9.5 gaUons per cycle. which was 

achieved with an improved food ruter. 

level 2 inYOlves additional efficiencies 

achievable with an improved motor: 

level 3 adds. to level 1. a booster heater 

that heats 20 percent of the incoming . 

water; level 4 adds. to level 3. an 

improved motor; llnd levelS adds. to 

level 4, an improved fill control. Table 

4-7 presents the payback period for the 

efficiency ieveis analyzed for the most 

prevaient clau of product (standard 

dishwasher {US volt)). For dishwashers 

connected to an electric water heater. 

all five standard levels meet the 

rebuttable presumption test in that the 

pay~ack is less than three years. For 

dishwashers connected to gas water 

heaters. however. only standard levels 1 

and 2 satisfy the rebuttable presumption 

test. 

TABL£ 4-7_-PAvSACK PERIODS (YEARS) 

STANOARO DISHWASHER (115 VOLTS) 

Wilt! gas i WlItI electric 

~tef WIlIer i heater --

1 ... _______ ~ I 1.9 0.7 2 __ . J 2.11 1.2 

3 .. _. _ ... _ .... ! 4.2 1.1 

4 ........ _._ •..•..••••• _ ..... __ .~ 4.3 1.4 

5 .......... -----l 5.8 I 2.0 

3. Sigmficance of Energy Savings. To 

estimate the energy savings by the year 

2015 due to amended standards, the 

energy consumption of new dishwashers 

sold in the absense of amended 

standards is compared to amended 

standards. When revised energy 

conservation standards are imposed. the 

LB~REM projects that over the period 

1993-2015. the following savings would 

be attributable to the increased 

standardS: 

Lev'el1~42 Quad. 

Level 2-{).46 Quad. 

Level ~.73 Quad. 

Level ~.87 Quad. 

Level 5-ruJ9 Quad. 

4. Economic /ustificotion. A 

Economic Impact on Manufacturers and 

Consumers. The per unit increased cost 

to manufacturers to meet the levell 

efficiency (improved food filter) is $7.50. 

.while the addition of improved motor 

efficiency in standard level 2 costs an 

additional $4_00. Standard level 3 

provides effu:ieDCies obtained by 

substitutlng for the improved motor a 

booster heater that heats 20 percent of 

the water passing through it: this adds 

another $6 in manufacturing costs. 

Standard level 4 ddds back an improved 

motor to standard level 3, adding $4 to 

manufactllriD8 costa. Lastly. standard 

level 5. the max tech level. achieves 

efficiencies obtained by adding an 

improved fill control to standard leve! .: 

this adds another $8 in manufacturing 

costs. See Tcchnical Support Document. 

Table 3.3. 

1 

LswI anatvzed 

2 3 • 5 

0.58 o.so D.62 Q.83 

0.38 0.38 0." OM 0.47 

Compared to the baseline. standard 

level 1 would cause a price increase of 

$10.80 for a standard dishwasher. 

Standard level 2 would have a $11.10 

higher price. while standard level 3's 

dishwasher would be $26 more 

expensive. Under standard level 4. a 

dishwasher would be $32.30 more 

expensive while levelS's price would 

exceed that of the baseline by $45. Sce 

Technical Support Document. Table 6.4. 

The per unit reductions in annual cost 

or-operation (energy expense) at levell 

are $12.00 and $5.50 for a standard-sized 

dishwasher CODDected to an electric 

water heater and a ga~ water heater. 

respectively: standard level 2 would 

reduce energy expenses ,by aD 

additional $1.00 and $1.00: standard 

level3·by $7.10 and $1.30: standard level 

4 by $1.00 and $1.00: and standard level 

5 by $1.20 and SO.60. respectively. See 

Technical Support Document. Table 6.4 . 

The LBL-MIM projects manufacturers' 

long-run ROE to be 6.77 percent for 

dishwashen; in the base case. At level 1. 

the LBL-MIM predicts that a 

prototypical dishwasher manufacturer 

would have an ROE of 6.65 percent. a 

decrease of 1_8 percent. At level 2. the 

manufacturer's ROE is expected to be 

6.59 percent. a 2.7 percent decline. At 

level 3, the LBI,-MIM projects that the 

prototypical dishwasher manufacturer's 

ROE would be 6.45 percent. a decrease 

of 4.1 perceDt from the base case. The 

expected ROE for the prototypical 

manufacturer at level 4 is 6.51 percenL a 

decline of 3.8 percent. while the 

: ..... 
-.~~._: •• JJ", 11;_ 1, : ',' r_'IIerIohor"1 VoL 68. No. 93 I Tueoday; May 14. 1991 I Rules and ROI!DiaU ... , 

-~~~~~~~~~~~~~~~~~~~~ 

2Z27S ' 

', .. 

expocted ROE at level & Is 6.74 percent. a decline of only 0.4 percent from the 

bastl case. See Technical Support 

Doomtent. Table 7.9. 

nle Department's characterization of 

the Jlrototypical manufacturer in the , basEl case assumes that manufacturers' 

typh:al dishwasher designs are based on 

the c:ombination of options presented in 

the Hngineering Analysis for the 

balE!line unit. If mamUacturers use a 

different combination of design options 

to pl'oduce dishwubera that minimally 

com!~ly with the 1993 .tandard. the 

Depllrtment may have inappropriately 

characterized the financial position of 

the prototypical manufacturer in the 

LBL-,MIM. Furthermore, since financial 

data of the type needed to characterize 

the p'rototypical manufacturer are 

gederally not available. DOE had to 

makl~ a number of assumptions based on the limited data publicly available. e.g .. 

Securities and Exchange Commission 

10K I'eports and company annual 

reports. 

This approach was originally 

disC1llSsed in the Advance Notice of 

Propl,sed RuJemalcing (53 FR 17712. May 

18,1£188). and the Department did not 

receive any comments that indicated a 

cha~~e in approach was w8lT8Dted. 

B.l..ife-Cycle Cost and Net Present 

VaJul~. The Lee analysis indicates that 

for ellch possible standard Jevel the 

incre,ase in purchase price would be 

offsel: by savings in operating expenses. 

Standard JeveJ 4 corresponds to the 

miniJ:aa of the LCC CUl'Yes. See 

Techllical Support Document. Table 6.3. 

This i.ndicates that the standard level 

would not cause any economic burden on thl!.average consumer. Compared to 

the bilse case. standard level 1 would 

CaUSE! reductions in LCC of S87.8O and 

$34.311 for a standard dishwasher 

connl!cted to electric and gas-fll'ed 

watel' heaters, respedively. atandard 

level 2 would reduce LCC by $59.40 and 

$Z4.30. respectively: level 3 would result 

in dec:reases of $94.50 and $22.00. 

respectively: standard level 4 would 

reduce LCC by $96.50 and $24.00 for 

dishwashers drawinlJ water from an electric- or gas-fired water heater. 

reapel:tively. Lastly. standard levelS. 

the max tech level. wouJdreduce Lee 

by S9:~10 and $15.50. respectively. 

While DOE examined the effect of 

diffet'l!Dt discount rates (2. 7. and 15 ,- percelnt) on the LCe curves and 

gener,ally found little impact. the 

Department did not consider higher 

discolmt rates. since such rates would 

be beyond the range of real. after-tax 

rates liliat consumers would likely face 

in fin~lncing the purchases of clothes 

washl!rs. Similarly. DOE did not , consider different energy prices. 

including regional prices, in the LCC 

analysis. Since this is to be a national 

standard. ,DOE believed the National 

average energy prices were appropriate. 

However, DOE did examine the effect of 

a usage rate different from the 32.2 

cycles per year set by the DOE test 

procedure. Recent Procter and Gamble 

data appear to indicate that the national 

average clothes washer annual usage 

rate is 286 cycles per year. more than 11 

percent less than the test procedure 

representative average use cycle. The 

slightly lower usage numbers result In , 

the lower life-cycle cost estimates that 

were presented above. See Technical 

Support Document. section 6.1.1. 

The NPV analysis indicates that if a 

standard were adopted at level 1. there 

would be an NPV of $300 million from 

energy savings over the period 1993-

Z015. At levels 2-5. the corresponding 

NPV's would be $327 million. $212 

million. $434 million. and $129 million. 

respectively. See Technical Support 

Document. Table 5.6-

C. Energy Savings. As discussed 

above. DOE concluded that standards. 

at each candidate standard level. 

resulted in a significant saving of 

energy. The cumulative energy savings 

over the 1993-Z015 period would r~e 

from 0.42 quad at standard level 1. to .99 

quad at standard levelS. See Technical 

Support Document. Table 5.3. 

0_ Lessening of Utility or Performance 

of Products. As indicated above, DOE 

established classes of products in order 

to assure that the standards analyzed 

would not lessen the existing utility or 

performance of dishwashers. However. 

there is{lo assurance that future utility 

or performance of dishwashers would 

not be lessened as a result of standardsinduced disincentives to investments in 

energy-using new features. In addition. 

the Department believes adoption of any 

of the design options considered will 

also not affect utility or performance. 

E.lmpact of Lessening Competition. 

The determination of this factor was 

made by the Attorney General in the 

.Justice Department's review of the 

proposed standards. In that review. 

which is presented above. DOl , concluded that the proposed standard 

level for dishwashers would not result 

in a lessening of competition. (DOJ, No. 

38 at 3). DO, did not. however. evaluate 

the competitive effects of more stringent 

standards. 

F. NeBd to Save Energy. Dishwashers use electricity as a primary energy 

source. both for operation of the motors 

and for the electric coils that are used in 

the drying cycle. In addition. that 

portion of water heater electricity 

consumption that provides hot water to 

the dishwasher is considered to be 

Indirect dishwasher electricity 

consumption. Similarly. since some of 

the hot water that is supplied to 

dishwashers comes from gas water 

heaters. dishwashers are responsible for 

indirect gas consumption. too. 

As with amended standards on the 

other two product types in this notice. 

'decreasing future electricity demand as 

a result of standards on dishwashers 

will decrease air pollution. See 

Technical Support Document. Appendix 

0.10 The greatest decreases in air 

pollution will occur for sulfur oxides 

(listed in equivalent weight of sulfur 

dioxide. or so.). For standard levelS. In 

the year 2015, the estimated so. 

reduction would be 15.090 tona. This 

reduction represents .09 percent of the 

United States SOt emissions that are expected to be emitted by power plants 

in that year. 

Standard level S would also result in a 

decrease of 12.490 tons of nitrogen 

dioxide (NO,) emissions for the year 

2015. This decrease represents .12 

percent of the total NO, emissions 

expected to be emitted by power plants 

in that year. ' 

Standard levelS Is estimated to 

reduce United States Co, emissions by 

about .07 percent for the year 2015. 

In 2015. standard level 4 Is expected 

to reduce So" NO, and COt emissions 

by.08. .10. and .06 percent, respectively. 

Standard level 3 reductions are 

expected to be .06. .08. and .os percent 

for So,. NO, and co,. respectively in 

Z01S, 

In 2015. standard levels 2 and 1 would 

each reduce So, power plant emissions 

by .04 percent. NO, power plant 

. emissions by .05 percent. and U.s. Co, 

emissions by .03 percent. , G. Other Factors. As noted above. one other factor considered in this 

rulemaking was the water savings that 

could result from more efficient 

dishwashers. 

5. Conclusion. As noted above. the 

Act requires that. in establishing 

standards. the Department look fU'St at 

that standard that maximizes energy 

savings. i.e .. the max tech level of 

efficiency. For dishwashers. the max 

tech level is standard level 5. 

or the standard levels analyzed. level 

5 saved the most energy (0.99 quad). In 

order to meet this standard. DOE 

assumes that aU dishwashers would 

have booster heaters that allow the consumer to reduce the thermostat 

setting on their water heaters to 120 ·F. 

If this occurs. the energy savings 

resulting from the standard are likely to 

be even greater since the analysis 

'0 AJ.o _ foolllote 8. above. 
·.' #' • 

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22278 Federal Register I Vol. 56. No. 93 I Tuesday. May 14. 199i. I Rules and Regulations 

accounts for only.the savings in reduced 

water heater energy consumption for 

that water used by the dishwasher. not 

the total household hot water 

consumption. The total amount of the 

savings. however. is unknown since 

some consumers may elect not to reduce 

their water heater thermostat setting. In 

addition. this standard level had the 

largest positive impact on the 

environment due to reduced water use. 

and reduced emissions of Co.. NOa. and 

SOt. 

The technologies required to meet this 

standard level are reduced water use. 

improved motor efficiency. booster 

heater and improved fill control. 

Although these technologies are 

available now in some dishwashers. the 

last item. improved fill control. requires 

that the unit be installed levelly to 

achieve its maximum energy savings. 

Current product designs allow for 

overfill in order to provide for units outof-level. 

The consumer payback of this 

standard ranges from 2 years for a dishwasher connected to an electric 

water heater to 5.9 years for one 

connected to a gas water heater. The 

payback for dishwashers connected to 

gas water heaters is nearly half of the 

product's 12.6 year average lifetime. 

While the LCC of level 5 is lower than 

that of the baseline unit. it is greater 

than the minimum LCC point. thereby 

possibly precluding consumers from 

purchasing the most cost-effective unit. 

The LCC would be approximately $138 

and $32 lower for dishwashers 

connected to electric water heaters and 

gas water heaters. respectively. The 

standards. however. are projected to 

increase the purchase price of 

dishwashers approximately 15 percent. 

thereby precluding some consumers 

from being able to purchase the product. 

The sales of dishwashers are expected 

to decrease by two percent due to 

standards. or over two million units over 

the period analyzed. As a result of the 

decreasing sales. and increase in LCC 

from the minimum. this standard is 

expected to have an NPV of $129 

million. the lowest of any standard level. 

The standard is expected to have 

minimal impact on the prototypical 

manufacturer. causing its ROE to 

decrease by 0.03 percentage points. 

As stated above. standard level 5 is 

the max tech level which. by definition. 

incorporates all of the design options 

identified to improve energy efficiency. 

In conducting the engineering analysis. 

DOE did not make any proviSions for 

tolerances on performance estimates. 

Given this fact. DOE is concerned about 

establishing the standard at the max 

tech level without consideration of a 

tolerance. If one or more of the design 

options. do not perform exactly as 

calculated. or if they do not perform as 

efficiently in concert together as 

expected. the manufacturers would have 

no other design options to which to tum. 

The max tech level therefore becomes a 

special case that the Department 

believes can be conSidered only with 

allowance for tolerances. Since the 

analysis did not considp.r tolerances. 

DOE believes it must reject level 5. but 

notes that level 4. which is being 

sel.ected. requires an energy factor 

improvement from the baseline which is 

only 7 percent leu than that required by 

level 5. Thus. level 4. as analyzed 

without any tolerance. is equivalent. on 

a performance basis. to level 5 with a 7 

percent tolerance. 

The next most energy-conserving 

standard level is standard level 4. After 

carefully considering the analysis. the 

Department is amending the NAECAimposed 1988 standard for dishwasters 

with standard level 4 for dishwashers. 

The Department concludes that level 4-

standards for dishwashers save a 

significant amount of energy. are 

technologically feasible and 

economically justified. 

As discussed above, there would be 

significant energy savings at this level.of 

efficiency. During the period 1993-2015. 

these savings are calculated to be 0.87 

quad of primary energy. Such savings 

would total more than 12 percent of 

base case energy use. In addition. the 

standard could have a positive effect on 

the environment by reducing the 

emissmns of NOt and SOS as much as 

0.10. and 0.08 percent. respectively. in 

the year 2015. However. as discussed 

above. to the extent that So. credits will 

be used, the SOt reductions will not 

occur. Furthermore. the standard will 

reduce emissions of cOa by 17.864 

million tons, or 0.06 percent, over the 

forecast period. 

The standard is also expected to 

reduce water use by more than 200 

. billion gallons over the forecast period. 

The technologies that are necessary to 

meet this standard are presently 

available. The Department fmds the 

level to be econOmically justified. The 

consumer payback of this standard level 

ranges from 1.4 years for dishwashers 

connected to electric water heaters to 

4.3 years for one connected to a gas 

water heater. This standard is also at 

the minimum of the LCC curve. resulting 

in a reduction in LCC of approximatelay 

$142 and $39 for dishwashers connected 

to electric water heaters and gas water 

he.aters. respectively. IIi addition. the 

standard would result in an NPV to the 

nation of $434 million. the largest of any 

standard level. Lastly. the standard is 

expected to have only a modest impact 

on the prototypical manufacturer's ROE, 

causing a 0.26 percentage point drop. 

V. EnvironmentaL Regulatory Impact. 

Federalism. and Regulatory Flexibility 

Reviews 

The Department has reviewed today's 

proposed action in accordance with the 

Department's obligations under: 

• ·The National Environmental Policy 

Act of 1969 (NEPA) (42 U.s.c. 4321 et 

seq.). the Council on Environmental 

Quality regulations implementing the 

procedural provision of NEPA 

regulations (40 CFR part 1500 et seq.). 

and the Department's own NEPA 

regulations (10 CFR part 1021): 

• Executive Order 12291(46 FR 13193. 

February 19. 1981) which pertains to 

agency review of the impact of Federal 

regulations: 

• Executive Order 12612 (52 FR 41685. 

October 30. 1987) which pertains to 

agency considerstion of Federal actions 

that would have a substantial direct 

effect on States. on the relationship 

between the Federal Government and 

the States, and on the distribution of 

power and responsibilities among the 

various levels of government: and 

• The Regulatory Flexibility Act (5 

U.S.C.601 el seq.) which requires. in 

part. that an agency prepare an initial 

regulatory flexibility analysis for any 

proposea rule unless it determines that 

the rule will not have a "significant 

economic impact on a substantial 

number of small entities." In the event 

that such an analysis is not required for 

a particular rule. the agency must 

publish a certification and explanation 

of that determination in the Federal 

Register. 

a. Environmental Review 

In issuing the proposed rule. the 

Department prepared an Environmental 

Assessment (EA) (DOE/EA-0386) that 

was published within the Technical 

Support Document (DOE/CE-0267. July 

1989). The environmental effects 

associated with various standard le\'els 

were found not to be significant. and a 

Finding of No Significant Impact 

(FONSl) was published along with the 

proposed rule.-(54 FR 32766. August-9. 

1989) 

In conducting the analysis for the final 

rule, the Department included and 

evaluated several design options 

suggested by comments on the proposed 

rule. As a result. the energy savings 

estimates and resulting environmental 

effects in the final rule differ slightly 

from those presented in the proposed 
• 

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F'" ~ I VoL 56. No. 93 I Tuesday. May 14. 1991 I Rules and ltquiation8 . 'IZZ17 -~~~~~~~~~~~~~~~~~~~~~ 

rule. Nevertheless. moat of the 

en'monmental effects enaJyzed for the 

final rule fall within thel'8Jl8e of Impacts 

thelt were described in the EA that was 

pnipared for the proposed rule. 

For example. in the year 2010. the 

sauings of sulfur dioxide (so.). nitrogen 

dioxide (NOt). and c:arbcm dioxide 

(C(l.) from the standard on clothes 

washers are expected to be 8,449 tons. 

6.5158 tons. and 730,000 tou. 

respectively. In the EA. aavinga of 

SO •• NO.. and ex>. bl2010 from the 

clothes washer staDdarda totalled up to 

21.li98 tona. 15,815 tona. and 1.677 

million tona. respectively. Since the 

FONSI was issued for these larger 

savings. the final rule'. amaller savings 

can. the Department concludes. also be 

considered not aignificant. 

Similarly. in the year 2010. the savings 

of S.o.. NO. and co. from the IItandard 

on .:lothes dryers are expected to be 

17.725 tons. 1%.200 toIUI. and 1.157 

million tons. respectively. These' 

expected savings are alliells than the 

am(lUDts reported in the FONSL wherein 

the So.. No.. and co. I8YiDga totalled 

up to 38.230 tons. 25.641 tons. and 2.398 

million tons. respectively. 

Tile So.. NO.. and co. savings from 

the dishwasher standard are expected to 

be 13.867 lona. lQ.366 tons and 1.102 

miUion tons. respectively. in 2010. These 

environmental effects fall outside the 

results reported In its FONSI. 

Nevertheless. they fall within the range 

of inlpacts which were discussed in the 

para,graphs above for clothes wasbers 

and clothes dryers, aDd for which 

FONSl's were issued. 

S~[lce all of the environmental effects 

expEtcted from tbia fiDal rule fall within 

ranges of environmental impacts that 

haVE! been found not to be significant. 

the Ilepartment haa concluded that 

thesl! environmental effects also are not 

significant. Therefore. the Department 

has determined that an Environmental 

ImP<lct Statement (EIS) was not 

required. Nevertheless. as noted above. 

the environmental effects were 

considered in selecting the final 

standards for these appliances. 

b. RE·gulatory Impact Review 

Executive Order 1Z291 (46 FR 13193. 

Febl'lllary 19. 1981) directs that. in 

propllSmg a major rule. n an agency 

II "Malor rule" me8DJ any regalatioD that Ia likely 

to 1'IIII~~t In: (I) An aDJI1I&i affect on the economy of 

$100 lIIillion or more: (21 A _jar Inc:reaae In co ... 

or pricea for CODIUlDen. IDdtYidaallnclulrles. 

Federsl. State. or loc:al101l_t agBl1(:ia. 01 

geographic regioaI: or (3) Significant advene effecta ' 

on CODlpetition. empioymmU. iDvlltmeslt. 

produc,tivily. iMovalion. or on the abiUty of United 

Stata-balfJd eDterpn_ to c:ompete With foreisnbaaed ,enterprUa III ~ or apart mariceta. 

perform a regulatory 81181ysls. Such an 

analysil presents major alternatives to 

the regulation that could substantially 

achieve the same regulatory goal ilt 

lower cost. as well as a description of 

the costa and benefita (including 

potential net benefits) of the proposed 

'rule. 

DOB has determined that thi. 

proposed rule is a ''major rule." 

Accordingly. B Pinal Regulatory Impact 

Review hal been prepared and 

submitted to the Office of Management 

and Budget (OMB). OMB hal reviewed 

the Regulatory ADalyai8under 

Executive Order 12292. 

The Regulatory Analysis i. 

summarized below. This summary 

focuses on the major altemativea 

considered in arriving at the proposed 

approach to improving the energy 

efficiency of consumer products. The . 

reader ia referred to the complete draft 

"Regulatory Impact Analysis." which is 

contained in the TSD. available as 

indicated at the beginning of thia notice. 

It consists of: (1) A atatement of the 

problem addressed by this regulation. 

and.the mandate for sovemment 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 economic impact of the proposed 

standard. 

It should be noted at the outset that 

none of the alternatives that were 

examined for these three products saved 

as much energy as the proposed rule. 

Also. most of the alternatives would 

require dlat enabling legislation be 

enacted!' since authority to carry out 

those alternatives does not presently 

exiat. 

Alternatives for Achieving Consumer 

Product Energy Conservation Six major 

alternatives were identified by DOE as 

representing feasible policy alternatives 

for achieving consumer product energy 

efficiency. These alternatives include: 

• No New Regulatory Action. 

• Informational Action. 

-Product labeling 

~onsumereducation 

• Prescriptive Standards. 

. • Financial Incentives. 

-Tax credits 

-Rebates 

• Voluntary Energy Efficiency 

Targeta. 

• The Proposed Approach 

(Performance Standards). 

Each alternative has been evaluated 

in terms of its ability to achieve 

significant energy savings at reasonable 

costs. and has been compared to the 

effectiveness of the final rule. 

If DO new regulatory action were 

taken. then no new ltandard. would be 

implemented for dishwashers. clothes 

washers. and clothes dryers. ThIs is 

essentially the "base case" for each 

appliance. In this case. between the 

years 1993 and 2015 there would be 

expected energy use of 84.18 Quads of 

primary energy. with no enerv savings 

and a zero net present value. 

Sneral alternatives to the base case 

can be gnnrped under the heading of 

informational action. They include 

consumer product labeling and DOlrs 

pubUc education and information 

program. Both of these alternatives are 

mandated by the Act. One base case 

alternative would be to estimate the 

energy conservation potential of . 

eohancing these programs. To model 

this possibility. the Department assumed 

that market discount rates would be 

lowered by five percent for purchasers 

of these three products. This resulted in 

energy savings equal to .01 Quad. with 

expected cooaumption equal to 34.18 

Quads. The Det present value is ' 

estimated to be $10 miWon. 

Another method of setting standards 

would entail requiring that certain 

design optiooa be used on each product. 

i.e .. prescriptive standards.' For these 

three products. prescriptive standards 

are assumed to be implemented as 

standards at one level below the 

performance standards. with the 

exception of clothes washers which are 

already at standard level 1. For 

example. prescriptive dishwasher , 

standards are assumed to be at standard 

level 3 instead of level 4 as in the 

performance standards. The lower 

standards level entails slightly smaller 

expenditures for tooling and purchased 

parts. Consequently. the economic 

implicts that are expected before the 

implementation date should be slightly 

smailt!r for prescriptive standards. This 

resulted in energy consumption. . 

between 1993 and Z015, of 3Z.14 Quads. 

and savings of 2.04 Quads. The net 

present value. in 1987 dollars. was $2.12 

billion. 

Various fmancial incentive 

alternatives were tested. These included 

tax credits and rebates to consumers. as 

well 8S tax credits to manufacturers. 

. The tax credits to consumers Were 

assumed to be 15 percent of the 

increased expense for higher energy 

efficiency features of these appliances. 

while the rebates were assumed to be 15 

percent of the increase in equipment ' 

prices. The tax credits to consumers 

showed a modest change from the base 

case. saving .24 Quad with a net present 

value of $720 million. Consumer rebates 

showed more sizable changes: they 
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. Federal Register I Vol. 58, No. 93 I Tuesday. May 14. 1991 I Rules and Regulations 

. would save 1.16 Quads with a net 

present value of $1.86 billion. 

Another financial incentive that was 

'considered was tax credits to 

. manufacturers for the production of 

energy-efficient dishwashers. clothes 

washers. and clothes dryers. In this 

scenario. an investment tax credit (ITe) 

of 20 percent was assumed. The tax 

credits to manufacturers had almost no 

effect: the energy consumption estimates 

are 34.19 Quads with savings equal to 

-.01 Quad. and a net present value 

equal to $220 million. 

The impact of this scenario Is so small 

because the rrc was applicable only to 

the tooling and machinery costs of the 

flims. I.e .• the firms' fixed costs. and 

most of the design improvements that 

would likely be adopted to manufacture 

more efficient versions of these products 

would involve purchased parts. 

Expenses for purchased parts would not 

be eligible for an rrc. 

Two scenarios of voluntary energy 

efficiency targets were examined: in the 

first one. the proposed energy 

conservation standards were assumed 

to be voluntarily adopted by all the 

relevant manufacturers in five years. 

and. in the second scenario. the 

proposed standards were assumed to be 

adopted in 10 years. In'these scenarios. 

the five year delay would result in 

energy consumption by these appliances 

of 32.62 Quads. energy savings of 1.56 

Quads. and a net present value of $860 . 

million: the 10 year delay would result in 

33.28 Quads of energy being consumed. 

0.90 Quad being saved. and a net 

present value of $530 million. 

These scenarios assume that there 

would be universal voluntary adoption 

of the energy conservation standards by 

these appliance manufacturers. an 

assumption for which there is no 

reasonable assurance. 

Lastly. all of these alternatives must 

be gauged against the performance 

standards that are being proposed in 

this notice. Such performance standards 

would result in energy consumption of 

dishwashers. clothes washers. and 

clothes dryers to total an estimated 

31.92 Qua~s of primary energy over the 

1993-2015 time period. Savings would be 

2.26 Quads. and the net present value 

would be an expected $2.26 billion. 

As noted at the beginning of this 

section. none of the alternatives that 

were considered for these products 

would save as much energy as the 

proposed rule. 

c. Federalism Review 

Executive Order 12612 (52 FR 41685. 

October 30. 1987) requires that 

regulations or rules be reviewed by any 

substantial direct effects on States. on 

the relationship between the Federal 

Government and the States. or on the 

distribution of power and 

responsibilities among various levels of 

government. II there are sufficient 

substantial direct effects. then Executive 

Order 12612 requires preparation of a 

federalism assessment to be used In all 

decisions involved in promulgating and 

implementing a regulation or a rule. 

The Department finds that today's 

final rule will not have a substantial 

direct effect on State governments. State 

regulations that may have existed on 

these three products were preempted by 

the Federal standards established in 

NAECA. States could petition the 

Department for exemption from such 

preemption. and none have done so. 

Today's final rule has no added effect 

on States. Thus. based on the foregoing. 

the Department finds that the 

preparation of a federalism assessment 

for this rulemaking is not warranted. 

The Act provides for subsequent State 

petitions for exemption from 

preemption. which necessarily means 

that the determination as to whether a 

State law prevails must be made on a 

case-by-case basis using criteria set 

forth in the Act. When DOE receives 

such a petition. it will be appropriate to 

consider preparing a federalism 

assessment consistent with the criteria 

in the Act. 

d. Regulatory Flexibility Review 

The Regulatory Flexibility Act of 1980 

(Pub. L. 96-354) requires an assessment 

of the impact of regulations on small 

businesses. Small businesses are 

definecfas those firms within an 

industry that are privately owned and 

less dominant in the market. 

In this rulemaking. three different 

products and. hence. industries are 

being addressed. Regulatory flexibility 

issues will be discussed for the 

dishwasher, clothes washer. and clothes 

dryer industries for which standards are 

being prescribed. 

First. the energy conservation 

standard on those dishwasher 

. manufacturers who could be considered 

small businesses will be discussed. 

'Dishwasher manufacturing firms can . 

be divided into two groups: Those that 

compete on large sales-volume products 

and those that compete in small. 

specialized markets. Small firms are 

generally forced to specialize in small 

market niches that offer some protection 

from the cost advantage that large firms 

hold when they can produce in volume. 

This effect can even be observed among 

the major producers in the tendency of 

the smailer major producers' to produce 

somewhat more specialized products. 

There are significant differences 

among the major fums.. As the 

Department learned from discussions 

with industry consuitants, average cost 

has an inverse relationship to firm size.' 

Thus. the industry has economies of 

scale. and large firms (to the extent that 

their facilities are up-tCHiate) bave 

lower average costs than small firms. 

This fact, coupled with increasing 

competitiveness of the national and 

international markets, probably 

accounts for the continuing 

consolidation that has been occurring 

for several decades. The fact that the 

consolidation has been producing larger 

firms strongly corroborates the fmding 

that large firms have a cost advantage. 

A principal implication of 

consolidation is that the smaller of the 

ftrms will be. on average. in more 

danger of failing or being bought out 

than will the large fll'JDs. Because of the 

greater precariousness of smaller firms. 

any decrease in average profitability is 

more likely to damage seriously a 

smaller firm. and an increase in average 

profitability is more likely to mean the 

difference between success and failure 

for a smaller firm. 

From the point of view of 

competitiveness. a decrease in average 

profitability could speed up the process 

of consolidation. producing a less 

competitive industry. while an increase 

in aver.age profitability could help 

maintain the current levels of 

competition. Either effect might well be 

temporary. because. in the long run, the 

number of firms should be determined 

by the industry's cost structure and by 

the way a single firm's elasticity of 

demand relates to the number of 

competing firms. . 

Although larger fll'JDS have a cost 

advantage due to economies of scale. 

the very small firms in the dishwasher 

manufacturing industry have found 

market niches in which to survive 

profitably. The small firms sell 

dishwashers primarily to the 

replacement and kitchen remodel 

markets. which tend to offer higher 

profit IIlargins than does the builder 

market. As a result. it is possible. 

according to industry consultants. that 

small firms would have ari easier time 

passing through increased variable costs 

that result from the standard. and thus 

may be affected more positively than 

the large firms. 

Second. the impact of the energy 

conservation standard on clothes 

washer manufacturers needs to be 

addressed. The standard is an efficiency 

level that was achieved by the 

elimination of a warm rinse option. For 

those manufacturers who choose to I 

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Federal Resister I Vol. 56. No. 93 I·Tuesday. May 14.1991 /Rules and Regulations 22219 

meet the standard by eliminating that 

option. there win be essentially a zero 

cost increase resulting from the 

standard. 

Finally, the impact of the energy 

-conservation standards on clothes dryer 

:manufacturers needs to be addressed. 

The LBL-MIM Indicates. through its 

prediction of an increase in typical ROE. 

that the proposed standards are likely to 

11low down the consolidation process 

temporarily. This would lead to a 

temporary slowing down of the 

(:ontinuing decrease in this industry's 

competitiveness. However. this 

prediction would be tempered by the 

(J,bservation that if standards were 

t,echnologically difficult to meet. they 

could hurt some smaller firms the most. 

since smaller firms tend to have less 

sophisticated research and development 

capabilities. This is not a significant 

if!sue since the standard levels on 

dothes dryers win not be 

tE~chnologically difficult to meet. 

In view of the foregoing. the 

Department has determined and hereby 

cnrtifies pursuant to section 605(b) of the 

Regulatory Flexibility Act that today's 

a.:tion will not have a "significant 

e(:onomic impact on a substantial 

number of small entities." 

In conclusion. for each of these three 

industries, the Department finds that the 

st,mdard levels prescribed in today's 

Final Rule will not "have a significant 

economic impact on a substantial 

number of small entities." and it is not 

necessary to prepare a regulatory 

flexibility analysis. 

Lint of Subjects in 10 CFR Part 430 

Administrative practice and 

pmcedure, Energy conservation. 

HClUsehold appliances. 

In consideration of the foregoing. part 

430 of chapter 11 of Title 10, Code of 

Federal Regulations, is amended as set 

forth below. 

Issued in Washington. DC. April25. 1991. 

J. Michael Davis. 

Assistant Secretary, Conservation and 

Renewable Energy. 

PART 43o-ENERGY CONSERVATION 

PROGRAM FOR CONSUMER 

PRODUCTS 

1. The authority citation for Part 430 is 

revised to read as follows: 

Authority: 42 U.S.c. 6291.~. 

Z. In section 430.32. paragraphs (£), (g) 

and (h) are revised to read as follows: . 

§ 430.32 Energy conservation standards 

and effective dateL 

{O Dishwashers. (1) Dishwashers 

manufactured between January.l, 1988. 

and May 14, 1994 shall be equipped with 

an option to dry without heat. 

(2) Dishwashers manufactured on or 

after May 14. 1994, shall have an energy 

factor no less than: 

Product class 

ft. • ft. 

Energy factor 

(cycles/KWh) 

0.62 

0.46 

'(g) bothes washers. (1) Clothes 

washers manufactured between January 

1, 1988. and May 14. 1994. shall include an unheated rinse water option. 

(2) Clothes washers manufactured on 

or after May 14. 1994, shall have an 

energy factor .no less than: 

Product class 

i. T~ lOading. Compact 

(lea than 1.6 It' ~ 

ity). 

ii. T~ Loading, Slandard 

(1.S Il" or gnJater capac. 

ity). 

iii. T~ Loading. Seml-AuIo-

!TIIIIIC. 

iv. Front Loading .. _ .. ___ _ 

v. Suds 1IWing .. __ • __ _ 

EnemY factor (eu. 

it/Kwh/cyCle) 

0.90. 

1.18. 

Not Applicable.' 

Not Applicable. ' 

Not Apptic8ble.' 

I These classes sl1a11 have an unheated rinse 

water optiOn. . 

(h) Clothes dryers. (1) Gas clothes 

dryers manufactured between January 1, 

1988. and May 14, 1994. shall not be 

equipped with a constant burning pilot. 

(2) Clothes dryers manufactured on or 

after May 14, 1994. shall have an energy 

factor no less than: . 

Energy 

Product class factor Ubs/ 

KWh) 

i. Electric. Standard (4.4 It· or greater 

capacny) ............ _ .......... _ ............. __ • 3.01 

ii. Electric. Compact (12Ov) (less than 

4.4 ft. capacny) ...................... ___ 3.13 

iii. Electric. Compact (24Ov) (lass than 

4.4 It • capac:ity) ........... _. 2.90 

iv. Gas .................................. _____ ... 2.67 

[FR Doc. 91-10285 Filed 5-13-91; 8:45 am) 

SlWNG CODE 1450-01-111 

.,