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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 \ 

## I**-~** 

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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 Standardsfor 

### Three Type. of 

### Conaumer Products

AGENCr. 

### Office ofConservation 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 ofEnergy (DOE

orDepartment) 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. part430 of the Code ofFederal Regulations to add new standards for theseproducts. 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 ofInformation Reading Room. U.S. Department ofEnergy. Forrestal Building. room 1E-190. 1000 Independence Avenue. SW.• Washington. DC. 20585. (202) 586-6020. between the hours of9 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 ofEnergy. 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

ofEnergy. Office of General CounseL Forresta! Building. Mail Station GC41.1000 Independence Avenue. SW

.. 

### Washington. DC 20585. (202) 58&-9507. U.S. Department ofEnergy. 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 ofSavings 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 ofUtility of Performance of

Products 

### s. Impact ofLessening ofCompetition 6. Need ofthe Nation to Conserve Energy 7. Other Factors 

## m. Discussion ofComments



### 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 ofLessening ofCompetition 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 Savingg D. Lessening oi Utility or Perfonr.ance of

Products L Impact ofLelleningofCompetition F. Need ofthe Nation to Save Enef87 G. OtherFacton 5. Conclusion



### c. Dishwashers L Efficiency Levels Analyzed 2.Payback Periods 3.Slgnificance ofEnergy Savings 4.Economic Justification A. Economic Impact onManufacturen and

o--mera B.1Jfe-cycle Cost and Net Present Value C. Energy Savings D. Leueningof Utility orPerformance 

### of

Products E.lmpact ofLessening ofCompetition 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 

### ofTitle Ul 

### ofthe 

### 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 ofStandards 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 ofTitle III ofEPCA. aa amended by NECPA. NAECA. and NAECA 1988.11 referTed to in this notice 88 the Act, Part B ofTitle III is cociilied al42 U.s.c. 6291 et seq, Part B ofTitle III of EPCA.

D**~** by NECPA o:tly. i. referred to in thi. notice 88 NECPA.

### ., ,

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.**~~~;;~~~~==~,~·v~~~·~~·~~~a~·/~~;;~:g~t~M~~~14;.~1;~;dI~R~U~~~.~R;;d~R~e~~:~~8~·~·~;&C5;;g1· t!sUmat~d~'vpei** __

### t:emdll t:overed product

### duriDB a representative 

### Jurcage IWI

### qda.Ar,petiod

### ofuaaawi**lIhatinatbe....,~eto** I:onduct. Sectlon

### 323{b1{3). 

### A lest

### ~1l'Goeciure '"Htlf

........

### ifDOE 1leterwiDesb.Jnde**~**tme r:mmot 

### be I!eveloped.Section.323(dltll.'Teal procedures appearat.1O

## axpad41Q. lIubpartB;



### 'The

### ¥ederai

### TradeCunnnissiDJ11FTC1 is required by the Act to prescribe rules I!overning the labeling ofcovered

.**1~** forwfttch teet**~** 

### haft been

### prellCr'ibMby

### roE.Section 324(aJ. These rules are to require that each particubrr

### model cif 11 mveredproduct bearll a labcl.thatlndlca.tesits annual operating cost and the ra.

### d I!'Bt!mated**_l.,~**costs for uthermudels

### 'Oftlmtproduct. Section ilZ4{c1{11.Disclosure ofestimated operating cost Is not required under !;ection 324 

### if the FI'C determines that 

### !:m::b discloswe is1mttikety'to 1mrist c:onSWDm'S in

### ma:kingpurchasq decisions. oris not economically feasible. In such a case. FI'C must reqWre a

### difIereat..wmeaawe of
energy consumption. Section 324(c). At thepresenttime

### there Me

### Fl'C rules tequiring IIl'be1s 'for the follOwing products: Room air conditioners. furnaces. clothes washers. dishwashers.**\~**

### hesters. fr.eezers. l'efrigeratarland refrigemtar-fraeam.

### iCI!lUI:al.air c:onditianenl.aDd·D!IlUml 

### airconditioning heat pumps. and iWaresc.eut·lamp 

### baUm:ts. '"F.R8M15.

### NOW!IBber 19. 197!,;52FR 46888.December 10.19.87. llM 54 FR28031.July

# .s. 1989.

For each of 12 ofthe covered products. the Act prescribes an initial**F~era:l** energy'Conservation''Stundard. Section s25{bHhJ. 

### TIre Act establishes dates ofapplicability:klrth.e staDd.ards in 1988. 1990. 1992or 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 maynot pl'eScribe 1m)' amended standard which increasell 

### .the maximum a.tlowable energy use. ordecreases the

mwmumrequir&teAerfW 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

### neweramended IM'ndmiill required to 

### bel1eaigned iIO as to achieve 

### the maximum improvement in energy efficiency that is technologically fea.ible and economica11y**j~stified.** Sedicm3.25{.Q(2l{A}.



### SectioA**~(~H2HB}(~}** prorideathat 

### befOTl! 

### DOE deteluWles 

### wliether 11 ataadard Is economicallyjustified. 

### 11 malt.firstsolicit 

### comments on a**~.aiaDdarli** 

### Afterl'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 ofthefollowing seven

### factors:

(IJThe economic impact ofthe standardon 

### .the maDW'acturaa 

### .and

### .on**~ ~olisunlers** 

### 'Ofthe products subjeetto 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 anyinC1'ease in the

. price of. or in the initial charges for. or maintenance expenses of the cova-eIi prod

### acts which

### aretikeIy'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 impositionof.the standard:**(S~** 

### The impact ofany

### 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-presumptionof ecoriomic justification ininstances where the Secretary determines 

### that "the additional cost to the consumer of purchasing a product complying 

### withan energy conservation standard level 

### will be less 

### than three times the vahreofthe energy savings during the 

### first year that the 1:onstmler will receive 8S a result of the 'Standard. as calculated tmderthe applicable testprocedure • •

....

Section 327 of the Act addreSS1ls the effect ofFederal rules concerning testing. labeling. and standards on State laws orregniations concerning such
matters. Generally. all such State

### iaws

orregulations 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 constantburningpilot1ighIampoGl 

### heaters

## fs.edioD 3.27fbl{

## 4l1: .and

### f

## 4l Slate standards for television seta effective on

orafter January 1. 1992, may remain In effect In the absence ofa Federal standard for such product (section 

### 3Z1ibHii) and**SZ7{~).** 

### b. BCtCkgtcmtd



### The.purpose of

### this

## m '*ins isto t'e'riew the**~1'BY** <:eUldi'Vdtien standardsfor clotheswashel'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 endedlu1y 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 

### toaBBlyze afldprovided a detaileddi8cnsionof 'the mudytical methodolas7and analytical models that

### the Department expected to use in performing the analysis to support this rulemaking. The Department invited .commentsand data


### on the

### acx:unacy and

### feallibUUy of

### the planned methodology

### &ad

### aJCD&Il'aged interested PersonJtoft,g!lHlmeod impruvements oraitemlUiwesto

### DOE'. approach. ..'

OuAugust 9. 1989.DOEpublished a notice ofproposed rulemaking concemin8**d~** 

### waaber.a. clotlws dryers. and dishwashers. 

### (Hereafter referred to as the proposed nJle.J 54FR 32144. August 9. 1989. Forclothes washers. the Deparment did not propose a specificlItandard level: rather. DOE solicited comments and

. informationwithin a range of standard levels. This range ofstandardlevels consideredisllhown in Tabh! 1-1. below. For clothes -dryers. the Department proposed 'a prescriptive standanithtlt wooid

### l'equiredothes dryers to be equipped with BBevtomatic l«mination device. either.a moistme

. terminationor 

### temperatru'e ltermination devke.For dishwasbers. :the Department proposed:a lI'iUlAiBftJ' :ri'mliWl_eneqn' efficiencylItandard. 

### These proposed standards.are

### -shown in Table 1-1 

### below., . .**~' ...:~** .., ..,-'.

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### ........ .'.

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### 'Feci~' 

### RegiSter 

# rVol. 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 ItI 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.

(aotheldryersl

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 

### ofthis notice.

On·September 28, 

### 1990. DOE published anAdvance Notice of Proposed Rulemaking in

### the Federal

. Register regarding energy conservation 'ilandards for nine types ofconsumer products. including clothes washers. (55 FR 

### 39624). Clothes washers were included in this advance notice because

. subsequent to the close ofthe comment period in this rulemaking. DOE became

aware ofa 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 ofenergy. Due to the absence ofany comment. the horizontal axis design option was not considered for Inclusion in this Final Rule as discussed below. 

## n. General Discussion



### a. Maximum TechnologicalJyFeasible 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 ofdecreasing 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 ofeach 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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. ...., ....

## .~' .. 

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## ~.::;('!i~~;.~"~**:~';::'~~':/.:~..;:.>.~,** 

# ,

# :,_;~ .•

# '="~-~.;.~~~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'ioniaaCll'tl IIp-2fled ill

### abe AGt 10 determine**l~miC** justification.

. TheDepartmeat.evalueted each max Itech level to delermie 

### ifitwouldbe 'iICOnomical1yjuetitied at the time the :itandards wouldbecome effective. DOE Irejectec1**~** conservation 8umdards Ithathadunacceptable impacts on
I=OI181lItl2rB ormanufacturetS. e.g.• 

### Imuauany longpaybackperiodll and :mbstautia'!ly.adverse impacts on manufactnrers' r.elW:na DQ equity {ROE). 

### In that

### cou'ld resutt in 

### a tesseningofthe Iltility ofthe product.

b.**EnergF'~'**



### 1. Determinatirm 

### of Savings. 

### Th£ lJ.epartment forecasted energy c:onsumpticm through 

### dle ulle ofthe I.awrenceBerk2leyLabor.atory**l~esidential.Energy** Model (LBL-REM), whichforecaAed enerwconswnption

over

### the :period ofanalYliis for caDCliidate !itandarda 

### and 

### the base calle.a The Depa:r1mI!nt qaantified 

### the energy BaviDgathat

### wouldbe attr.ihzrtabie to a. !itandardas th2 diffemlcein.energy \:cliisuwpllicm between

_ 

### candidate lltandard'a case .• 

### the 

### baSI! case. The

### LBL-R£M isanimprovement of 

### the OakRidge National Laboratory Residential EnergyEnci Use Model (ORNLModel). 

### wmch was used by DOE in previous standards rulemakings. The 

### I.BL-REM is explained in the TSD. Appendix B to thatdocument 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.

Themarket sharecalculatio.ns for the 

### (Ushw.asheJ:. 

### clothe. w.asher •.and dothes dryer analyses contaiathe following**~:teps:** Potential purchasers may purChase any**compet~** technology within.an end-use. ornone. For dishwasbers. thedecision .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 ofstandards are expected to be loweroperating expenseand increased equipmentpri£: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** slandardsoniy. selecteci. 

### &ad4l.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 

### 81aDdarrilevels withNAECA's 1988a.taudards. the Departlll'e1lt eatima\ed the

### a.mout

### of
eaergyprojected 10

### beuv.ed during the period**1993-Z015.~** The energy saved ill exprauecija**Q~** 

### Le.• quadrima- of Btu'.&. WUl1 

### reapeoct toelectricity 

### the sa.-.ings .are quads of source orprimary energy.

### whic.b 

### is the energy necessary to generateaDd transmit electricity. The Act defioes**"ene~** 'Use" as thequantity ofenergy directly consumed by a
CQAs!\mer product at pointof nse. this**~II geoer~U¥**  called "site" energy. as opposed to "SOIJllCe" energy. There 

### are major diHereuces between tlu!se types ofenergy. In 1987. the amGWltof electricalenergy con&umed at

### the siie

. was ielltl 

### tbaaon.e-third 

### ofthe amount of

source energy 

### that was.required to generate.and tr.ansmit the aiteelectrical
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 ofhousing construction. and options that exist for improving the energy efficiency of appliances.As isthecase with any Gomplicated computermodel simulation. the validityof

### 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" hasnever been defined in the Act. the 

## u.s. Court of Appeals. in 

### NRDC v. 

### Herrington. 768F.2d 1355 (DC Cir.19851. concluded thatCongressional intent in using the 

### word "significant" was to

• LBL-REM

__**~lIIJDIId** to .analyzea 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 W8tnot considered by·themedel. The DepllTtment believes thatoil i• .not puaibleSO 'Predict-w.hat·retult .ud! revte_1IIay ha

....andtherefont;\ woaldbe 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. Tdbles 25 and II:!. DO£;::lAO:l4ill81). 19B1 mean "nOlWriviaJ." 

### Id. at 

### 1m.ThUs. fDr !be

## nal.eula:kins DOEbelieves thatneil 

### staDdaMJevel**~oDIIidered** 

### teIIII1ta in sigDificant energv saviRga.

Co 

### B.eintttob1e P'l'esamption



### NAECA establiahe.d new criteria 

### for determining whether

### a standardlevel 

### is economicallyjustified

..Section 

### 3ZSltlt%l{B){iiiJ states:

"IfOutSec:reWy&cis!&bill

..additional
coat**~** the consumerof pun:hniDg a product comp1ylus with aa Bneqy ccmaervatillll

. ataDdan11eve1 willbeJa.than three times the value ofthe enl!l1JY .aviJzp during the fitat year that the consumer will receift a. a rewk ofthe9t8Rdertt•• calmiatt!d under-the applicable &eat procedale. there .ballbe• rebuttable -presumptitm thatudl.taDdani level iseconolllicaJJyjustffieli A detenniDatian by the Secreswy that lUcia criterion.ilnotmetahaU not be takeninto CODIIideration in the Secretary'. determination ofwhetber a atandard.is economicaUyjustified."



### Ifthe increase in initialptice

### -ofan appBlUWe 

### due to a caDServ.aUoa standard 

### woWd repay 

### Wtelf to the

COJHlllDlel' of energy s8viDBsiD leuthan 

### three yean!. then it is pretMiB1ed that such 

### &tandaNi iseconomically**jU$tifNld.~**

. This p:'esumption of economic jusufication can be rebutted upon 

### a propershowing.


### d. Ec.."1lomic JastificatioR

As noted earlier. section 325{1}{2J(BJ(i) of the Act provides sevenfactors to be evaluated in determining whether a conservation standard is**eco~micany** justified.



### 1. EconomicImpact 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 effectsof standards on

different-sized rums. the Department used a computer model that simulated hypothetical firma in the three industries under consideration. 

### This modeL 

### the

• ForUris c:e.k:ulll1ion. theDepllrtftletlt 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\IQIale

.. tIuua.&he test proceciure a_wiltexperienoeJl**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 ManufacturerImpact Model (LBL-MIM). is explained in the TSD. See Technical support Document. appendix C. 

### LBLMIM provides a broad array ofoutputs. including shipments. price. revenue. net income. and ROE. An "Output Table" lists values for all these outputs in the

. base case and in each ofthe standards

cases underconsideration. It also gives

a range for each ofthese estimates. A "Sensitivity Chart" shows how ROE would be affected by a change in any

one ofthe model's nine control variables.

For consumers. measures ofeconomic 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 

### ofthe TSD. Under section 325 ofthe Act, LCC analysis is a separate factor.to be considered in determining economicjustification.



## z. Life-cycle Costs. 

### One measure of the effect ofproposed 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 ofthe appliance.

The LCC was calculated for the range ofefficiencies in the Engineering Analysis for each class in the year standards are imposed using consumer discount rates ofZ. 

### 7. and 15 

### percent. The purchase price is 

### based on the factory costs in the Engineering Analysis andincludes a factory markup plus a distributor and retailer markup. Energy price forecasts are inputs that

are taken from the 1989AnnualEnergy Outlook 

### ofthe 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 

### ofthe 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

asTestimony.

# ;~' 

# .. ';. :

.. .#"

. :.-::-- 

### while a lowerrate. e.g., 2 percent. produces a greater difference. This results because the consumer benefits. i.e., reduced operating expenses. accrue
over the life ofthe appliance, and are discounted back to some base year. Therefore, the lowerthe discount rate. the greater the resulting consumer benefits after discounting. In

### addition.

aa can be seen in the various LCC

curves. the use ofa higher discount rate results in a flatter curve.

.

When the LCC numbers are plotted graphically (on the Yaxis) 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
ormay not be discrete). and then rise. This indicates that the f1r8t efficiency improvements 

### will produce energy savings. the value ofwhich 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 ofthe energy savings will not

cover the expenditures for the design improvements.

The minimum ofthe LCC curve was of particular interest in the analysis. The minimum ofthe curve represents that level ofefficiency improvements that maximizes the difference between the value ofenergy 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 differentialeconomic impacts on
consumers that would occur from the adoption ofamended 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 eachproduct (discounted total value of energy consumption from 1993 through the last year ofuse 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 ofa 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 ofan appliance that 

### NPV for eachproduct at the different standardlevels is identified in section IV ofthis notice.

.

3. EnergySavings. 

### While the significant conservation ofenergy is a separate statutoryrequirement for imposing an energy conservation standard. the Actrequirea DOE. in determining the economicjustification ofa standard. to considerthe total projected savings that areexpected 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 areprovided in section IV ofthis notice.

4. LesseningofUtility orPerformance of

Products. 

### This factor cannot be quantified. In 

### establishing classes of products and design options. the Department tried to eliminate any degradation ofutility orperformance in the three products under consideration in this rulemaking. That is. to the extent

. that comments. orDOE's own research.

indicated that a product included a utility orperformance-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 ofthis factor as a result ofthe standards that were analyzed.

5. 

### Impact of Lessening ofCompetition. 

### The determination ofthis factor is to be made by the Attorney General. This determination is presented for each product in section IV 

### oftoday's notice. In 

### addition, a copy ofthe Attorney General's lettercontaining the findings is published below.

DearMr. Davis: By letter dated October 24. 1989. the Department ofEnergy ("DOE'" transmitted to the Attorney General a notice ofproposed rulemaking (54 FR 32744) addressing energy standards for three classes ofhousehold 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. ofany lessening ofcompetition likely to result from the proposed standards. Competitive impact is one of seven criteria to ba considered by DOE in evaluating proposed standards. This lettercontains the competitive impact determination of the

. Department ofJustice ("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 ofthe 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 ofProposed RuJemaking. Pardishwaahera. 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 bep08lible. 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 forclothe. washen Imder certain conditions.

The Notice ofProposed 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 notproposed in the Notice ofProposed Rulemaldng.
J)1acuuion

In appraising the competitive effect of the proposed standarda In the context ofthis I,tatute. the Departmenthaa examined the relevant marketa withinwhich the standards will operate. The Departmentbaa 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 eitheroligopollstlc pricing or actual price fixing. The Department haa also considered whether, independent of orin conjunction with any increaae in

. concentration. the standards would be likely tl) facilitate oligopolistic pricing or price fixing by increasing producthomogeneity.

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 ofconcentration below 1.000. the

. number of competiton ordinarily la aufficient to make competitive pricing likely and to defeat oligopolistic pricing. Even ifthe standards resulted in increased costs and mduced the number ofcompetitors. 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 ofcompetition.

The enaiysls ofdishwashen. clothea washen. and clothea dryen II not completed by applying thia acreen because the risk ofan adverse competitive Impact is not diminished b:Vthe 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 ofabout 3.000. 3.100. and 3.300. respectively. These figures reflect

. high levels ofconcentration (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 thatconcentration 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 notnecessarily affect market
structure. However. concentration could increase if the cost increases are both significant and affect smallerfirms mol'& severely than large ones: costs thatvary with output (e,g" adding an automatic tennination devtce)lhouid not disadvanlage smaller firma while fixed costa orcosta independent ofoutput (e,g., redeaign of a dishwasher) might disadvantage a Imaller firm with a lellernumberofunits acrosa which to spread the lame fixed costs.

Nevertheless. before suchasymmetrical
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 ofthe amaller significant competiton or substantially decrease theirmarket 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 otherfirma would remain the lame aUs. the

commonresultofa firm exiting the market would be that each ofthe 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 ifDOE adopts the proposed standards for dishwashers. This evaluation is based on Information concemiDg the Identity and size of,the principal competitors and othermarket cGlndiLtons. However. for this clasa of products. the evidence does notwholly foreclose the poseibility ofan 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. IfDOEconcludes that its standards for dishwashen will alter significantly the atructure ofthe 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

Forclothes 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 amaliercompetitors.

For clothes washers. the available evid\lnce indicates that a lignificant le8l8ning ofcompetitionmay occur under certain conditioDl. The Notice ofProposed RuJemaking indicete. that proposed standard levels 1 and Z canbe met byeliminating the

warmrinse 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 jUilthele design changel and mayneed to undertake more substantial redesign orretoollng that would impose substantial fixed costa. Uall compeUton can meettheproposed standards by making the suggelted design changes. then

a lignificant lenenlng ofcompetition 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 costawill

### occur. These increased fixed costa 

### are likely to affect smallereompetiton much more severely than larger oneil. UDOE concludes that Its standards for clotheswasberswill drive the smalleat significant competitor. Speed Queen.
out ofthe maricet orlignificantlydecrease 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 bemet by different eombinatioDl offeatures. 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 inmany 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 ofcompulsory process. Sincerely.
James F. Rill. AssistantAttomeyGeneral.



### 6. NeedoftheNation to Consen'e Energy. The results ofthe 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. OtherFactors. This provision allows the Secretary ofEnergy. in 

### determining whether a standw:cI is economicallyjustified. to conslder any**l.~,. ~**  - ',. -:-. ,",

### ;':;::(f'

. .

## ';"'.'.);;~,:~:~;~**~";,,** ,,,,",,.'

-"**~** ,**~'** - ;

-,. ' '. '.---

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



# .t:,

.....**,~tar,/.** V'OL 

# sa.: No.:·93· /',TuesdaYirMay,l4,r.t991 

# ,.Rules.ad**·Regul~tiaD.**

otherfactors that the Secretarydeemsto berelevant. One suchfactoris the estimatedwater

### sayjup&om

### more efficient dishwashers 

### and clothes'

. washers.


## m. Di.scuuion ofCoIlUD8llIa



### . .TheDepartmentreceived 40

### written
commentainreepoIIIIeto theAugust 1989, proposedrule, andreceived testlmollyfrom 12persODS atthe September 20, 1989, public hearing. These commentl addres.ed 

### all aspecta of

### the aDalyaiJ. 

### In

### this .ectlon. the Department

### will pre.entdiscuuions of 

### the general8lUllyticallsaue.raised by the comments.followed 

### by diacussicma oftheproduct-epecific 

### issues.



### o. General

### AnalyticalComments Markup

The Natural Resources Defense 

### Council (NRDC). 

### the Ohio

### Offk:e of

CODSmll8l'S' Counsel (Ohio) and General 

### ElectricAppliances 

### (GU) commented

un lIJ8DUfacturer markup. used in the analysis. (NRDC. No.5 at20 and No. 16 at 

### 51: Ohio. No. 22 at 8; and

### GEA. No. 21 at26).

NRDCcommented that 

### the record does not support the markup assumption betweenfactory andretailof approximately 1.5. (NRDC. No. 16 at 51).

The markups used in the analysis have been derived from manufacturer data overthe history ofthisprogram. Including the earlier 1980 rulemaking. Moreover, NRDC is mistaken regarding the markup used in the analysis. The totai markup 

### from manufacturercost to retail price used is approximately 

### 2.00. with the actual amountp.ositively related to the unit's efficiency. The markup from manufacturercost to manufacturerselling price. andfrom manufacturerselling price to retail price

were considered separately. 11te markup
to manufacturing sellingprice is approximately 1.31. while that to retail price is approximately 1.46. A complete discussion ofthe markup 

### is found in the TSD. SeeTechnical SupportDocument,' appendix 

### C. DOE haa reviewed NRDC's
comment and finds no basis 

### for changing the**m~p.**



### Inthe analysis for the proposedrule, 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 contentionis valid only in Instances ofperfect competition. Perfect competition is an economic model ofa market with the following 

### characteristics: Each economic agent. l,e

.. buyerand seller. 

### is so sm,all relative
to 

### the market

### that it cannot

### influence price: the products ofeach seller 

### are homogeneous,

### i.e

.. perfect substitutes; there is free mobility of

### allresources. Including free and easy business entry into. andexitout ofan industry; and all economic agents

### tn the markethave complete 

### andperfectknowledge ofthe future.

Obviously. with these restrictiDg requirement&, DO markethas been

### or can beperfectly competitive.



### One identifying characteristic 

### ofa perfectly competitive market is that firms 

### are all producing at theiroptimal levels and thus no 

### firm wishes to increase sales. Clearly, perfect orpure competition is npt presenthere. Under conditions ofimperfect competition, i,e

.. 

### aU forms ofmarket structure except for perfectcompetition, marginal costs, l,e

.. the variable costs associated with the last unit ofoutput, 

### are paaaed OD with a markup. and itis the ability to do 80 which is evidence ofmarketpower. 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 cifdesign options' costs and efficiencies on manufacturers' ROE. the Association of Home Appliance Manufacturers (AllAM) stated that the DOEanalysis underestimated the negative impact of standards on manufacturers' profitabilitiea. orROE's. In some cases, 

### the analysis even suggested thatreturn

. OD equitywould 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 thelikely prospects for higherROE. Infact, there

### IS no such correlation. 

### In the case ofstandards. ROE may increase because ofthe manufactarers' ability to mark up marginal costs to buyers. It depends little on the energy efficiency nature ofa 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 consumerandproducer price indexes. despite increasedenergy 

### and compon.ent

### prices 

### during the last two decade •• 

### From ita statements.

### AHAM 

### concluded thatthe Department

"rec:ognized thateven though appliance
lIWlufacturerl experillDC8d 

### lDcreaaiJ18 COlts


### ror campaaenta. lIWlufac:tunn went

### unable
to completelypuah 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 

### risenmore slowly

### thaD standard inflationindices and that energy and component prices for appliance manufacturers have also risen implies nothing about whether 

### ornot manufacturers 

### can completelypass coata through to the consumer. 

### Ifenergy and componentprices haw notrisen as fast as inflation indices, manufacturers could pass 

### through costa 

### and the overaU rise in the level ofappliance prices would still 

### be less than that ofthe 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 ofmanufacturers' impacts

was simplistic in that 

### itaaaumed

.manufacturers' customers 

### are individual end-users of the product purchased and.

as such. have little powerto 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. bothAHAM and Whirlpool aremistaken: the**~MIM** does account for monopsony power. i.e

.. powerful purcltasinggroups. 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 of32. 33. and24 

### firma for the dishwasher. clothes washer. and clothes dryerindustries. respectively. This is clearly higher than observed industrial concentration. since the four largest

fl11DS in each industry control over90 percent ofmarket share. The number of finns is estimated from data on

revenues. costa. and ROE. 11te Department attributes this result of "greaterthan observed"·competition to the monopsonypowerofthese large buyers in the market. and it is part of the model. A "simplistic model" where

.profitability was estimated from the 

# ...

# r :

.-



# .

observed number of

### firms would result ilu

### much higher 

### degree ofprofitability.



### 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 severalyeal'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 ofappliance. 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 inrecent years. 111erefore. most manufacturers were forced to raise prices in late 1988 andmid-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 ofMIM: 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 short

### run phenomenon which 

### occurs regularly during downturns in 

### the business cycle. DOE has run 

### regressions to estimate the
amount ofprice 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 

### ofthe 

## 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 ofthe**LB~MIM's** 

### operating expense elasticity. It

### Is the operating expense elasticity thatresults 

### 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 elasticitywould 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 OakRidge National Laboratory (ORNL). which is cited in the TSD. Unfortunately, the comments do not provide. an adequate basis for imprOving orreplacing 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 ofpredicting 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 ofthe other standard levels illustrates the case ofdecreased 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

. ofenergy conservation standards would be to lower profit margins. As 

### a cODsequence, this 

### could forceremaining smallermanufacturers out ofbusiness or into consolidation with largerfirms. thereby hurting competition. (Whirlpool, No. 20 

### at 3).



### In 

### response, the Department notes that because ofthe 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 ofthe 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 ofhousehold 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 ofappliances. As is the case with any complicated computer model simulation. the validity ofthe 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 increasedvery 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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## ~y 14; 1991 

# I RUles and RegubtiODS

.



### Energy Conservation 

### Stanc;larda for Consumer Products: Refrigerators. and Furnaces, DOE/CE-0277, (November. 1989) and Supplementto March 1982 CoD8WDer ProductaEfficiency StandardsEngineering Analysis and Economic Analysis Documents. DOEI 

### CE-0045 (July, 

### 1983).The Department utJlJzea aU available information on appliance choice tocalibratethe energy 

### use forecasts of

### the**LB~** and while there may 

### be questions conceming

### a particularalgorithm. the Department believes thatthe

### LBL-REM provides reasonable forecaste.

DOEdoes not believe thatmost

consumers actuallycalculate 

### LCC: rather. that purchase decisions can be characterized as 

### ifan implicit tradeoffis being made betweenequipment price and operating expense. 

### LBL-REM characterizes that implicit tradeoffin an LCC framework by using observed purchase behaviorinorder to project
;o..Iture efficiency choices that 

### are a f·.mction ofboth equipment.price and ,,'perating expense.

To calculate energy savings that 

### can result from standards. 

### EDF proposed an alternative methodology. which consisted offreezing efficiencies at current levels for the base case. and calculating energy savings against the fixed levels. DOEbelieves that ifenergy prices became sufficiently different from
currentvalues. 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 ofOregon Department of Energy (OnOE) andthe New York State Energy Office (NYSEO) commented on the appropriate values ofenergyprices

- 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 ofenergy 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 andusage rates."

DOE has reviewedEPA'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 ofthe standards

en consumers, DOE perfonns LCC analysis as required by section 3Z5(1) of the Act. Furthennore. DOE analyzes the payback ofeach standard level as required by section 3Z5(l)(2)(B)(iii) of the Act. 

### In each analysis, the Departmentis required to consider the expense to the

consumer. The consumer, as EPA recognized 

### initscomment.pays the
average cost. not the marginal cost. Similarly, inevaluatingthe effect ofthe standard on the Nation. DOE uses the 

### LBL-REM to forecast energysavings and 

### NPV. DOE believes that this calculationcaptare9 the effect ofthe standard on the Nation. whereas the marginal costwould 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 consideringthe above. DOE rejects the proposal to use marginal energy prices.· Payback



### In aCC01'dance with section 325{l)(2)(B)(iii) ofthe Act. DOE is required to calculate the payback of each standardin the first yearofthe standard. Inorder to calculate 

### this payback. DOE uses the forecast of efficiency from the 

### LBL-REM and compares the increase inpriceofthe appliance at each standard level to this level and the energy savings during the rll'8t year. 

### AHAM commented that DOE should consideri."l.cremental payback. i.e., the individual payback ofeach design option, rather thanthe combined payback as presented in the August 1989 proposal. (Gants, Testimony at7; 

### AHAM, No. 29 at4-6). The EDF. however, urged DOE 

### tei use the cumulative payback. 

### (EDF. No.3 at 3-4).

DOE has reviewedAHAM's proposal and disagrees: the Act clearlyrequires L'le**Dep~rtment** to consider the cwriulafive impact ofthe standard in calculating paybackin accordance with section 325(1)(2)(B)(iii). The Department. however, does considerindividual 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 ofthe difference in savings that exists for dishwashers and clothes washers, depending on whetherthe unit fs connected to an electric orgas water heater. (Whirlpool. No. 20. at 8).

In reporting the paybacks and LCC results in the proposedrule. 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 ofthe market. The energy use analysis and NPV calculation in the LBL-REM. however. did include a consideration ofelectric. gas and oil
water heaters. Afterconsidering the issue, the Departmentdecided to present payback and

### LCC results for dishwashers and clothes washers connected to either electricwater heaters orgas waterheaters. DOE is not presentingresultsfor oil water heaters

. because 

### the annual cost-of-operation of

oil water heaters 

### isnearly equalto that ofgas waterheaters: therefore the results for dishwashers andclothes washers connected to gas waterheaters is representative ofthose.connectedto oil waterheaters.

Rebuttable Presumption

CongresswomanClaudine 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 economicallyjustified. (Schneider, No. 10at 2 and Schneider et oj •• No. 31

# at 2: ODOE. No. 15 at 2: NRDC. No. 16 at 22- 25: NYSEO, No. 32 at4:

### EPA. No. 36 at 1; Dingell. No. 35 at 1-3: andPublic 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 ofthese
comments and includes more detailed discussion ofthe basis ofthe 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 ofan 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 higherlevels 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**~.** t.. '.' ••

### :~'~':'\~J~-':" ,of ':

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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 ofutility costs." NRDC cited the '1983 applianceproceedings. wherein the CarrierCorporation had submitted daul showing that the areas ofthe COWltry with the highest airconditioning 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 ofregional price- or usageindlJlced variation in appliance efficiency for these products are valid. DOll's whole rationale for reducing the level ofproposed 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. withefficiencies higner than the national average; 

### NRDC is Do't correct. however. inconcluding that 

### ifthe 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 ofconsumers 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 ofnational average energy prices andusage rates is no more likely to overstate the energy savings from standards than itis likely to unde:rstate the energy savings. (NYSEO. No. 32 at 10-11).

Thl! Department is unaware ofany 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 priceII 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 chapter6 ofthe 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 ofthe analysis. (NPPC. No. 13 at 2: ODOE. No. 15 at 1: 

### NRDC. No. 16
at

### 9-14: EDF. No. 

### 19 at

### 9; andNYSEO. 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 oflower 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· • • itmust 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 justifiedjust 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 ofsocietal 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 ofimported



### au. PUblic Citizen argued that 

### the Department failed to considerglobal warming. acid rain. and radioactive
waste. In addition. Public Citizen pointedout that imports of

### aU reached 7.712 millionbarrels per

### day in 1988. the highest level since 1979. and 

### that this poses anincreased risk tp national ' security and worsena the 

## U.s. trade imbalance. Also. 

### NRDC arguedthat standards 

### improve electric utilities' demand. projections and reduce 

### the uncertainityover the need to construct electrical generatingplants.

The Department agrees with these
comments. and to the extent DOE had data. included these factors in the consideration of the

### Needof theNation 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 attemptto estimate the effects ofstandard. on lowincome people. who. it was stated. wouldbe most affectedby the price increases caused by standards. In particular. 

### RMI urged the Department to consider the impacts ofstandards on the prices of used appliances. {RMI. No. 12
at 2}.

The Department notes thatinsufficient 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 

### ofthe 

### Ohio Office ofthe Consumers' Counsel (OOCC) stated that energy. conservation can create social benefits: "By redirecting consumerpurchases from energyto 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 ofstandards onutilities.

-
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Firat. NRDC pointed to a risk factor not considered bythe Department that 

### llJ'8UeI in favor ofmore stringent standards. Specifically, NRDC suggested that more stringent standards reduce the risk ofutilities' overbuilding or underbuilding capacity. NRDC charged that in the utility analysis. the Department assumed thatutilities will not conaider the impact ofappliance 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 orgal salel ill caused by

several factors. including projections of population. household formations and locationa. and the agel and efficiencies ' ofthe household appliances. 

### By establishing minimum efficiency standards on new appliances. the range ofefficiencies in the marketplace is narrowed. and this should enable utilitiell to reduce somewhat the uncertainty in their forecasts. Given the number ofvanables 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. itwouldbeextraordinarily difficult to estimate. This effect is discussed in 

### the TSD.butnotquantified.

NRDC also commented thatthe Department's model ofutility ratemaking seems flawed. The Department performed calculations of the economic impacts ofstandards in terms ofreal dollars: in 

### additiom DOE evaluated future power costs for electrical supply in real dollars. Public utility**~ommissions.** 

### however. compute electric utility rates in terms ofnominal dollars. As a result, NRDC suggested that there would be no revenue loss as a result ofappliance standards: instead.

. there would be rate decreases. (NRDC, 

### No. 16 

### at 60-61).

.



### In

### response. the Department does not believe that the use ofreal 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 ofthe impacts ofstandards into rate changes. Rates are determined as a function ofth'e specific fmancial circumstances ofeach utility. The Department believes thatthe effects on utility rates ofthe 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 ofcomments discussed the environmental effects ofappliance standards. Virtually all ofthe comments

on this 

### subject stated that the proposed rule would have a Significant environmental impact on airpollution. including significant effects on acidrain 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: 

### Schneideretai, 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 ofemission reductions by the total emissions reductions over the entire period. ratherthan the marginal costby**~** 

### annual savings in 

### a particularyear.**~DOE** 

### agrees with 

### EDF and added that

. calculation to the Final 

### Rule. The results ofthis calculation are shown under the Need of theNation To ConserveEnergy and in

### the environmental analysis as presented in section V oftoday'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 ofthe impacts ofthe standards. including the impacts ofmore stringent standards such 8S 

### those requiring heatpump clothes dryers and the impact of standards on the water consumption of clothes washers anddishwasher!!. (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 ofthe environment. (Alexander. No. 14 

### at 3).



### DOE disagrees with the comments that a full EIS 

### should have been performed. None ofthe comments took issue with the Department's calculation of

### S(h, Co.. orNO. reductions: rather.

. they argued that more stringent

standards would have saved more energy andresulted in

### fewer emissions.

DOE agrees with this claim and notes that the proposed rule's EA

### presented the reductiona in

### emissions ateach

. standardlevel: these reductions were found not to be significant. With respect to comments thatmore 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 ofthe Need of theNation to Conserve Energy the**en~nmental** 

### impacts ofthe 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 standardlevels were considered In

### the economicjustification criteria.

.

The Department conttDues to present the results for the**y~ar** 2015 

### because by that time nearly the 

### full impact ofthe 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 lateryears. when more ofthe 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) whetherthe 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) Ifthere was an impact oftrue significance. whether the agency convincingly established that changes in the project sufficiently reduced 

### it to a minimum:' (NRDe. No. 16 at63).



### The DepliltDlent has analyzed the environmental impacts ofthe 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 otherlevels rejected for economic considerations. In 

### addition. as Doted above. the environmental impacts were considered

as part ofthe Department's economic analysis for each candidate stan

...atd

### leV1el as shown in 

### section IV

### oftoday's finul rule.

.



### Ilil analyzing the environmental impact of !Itandards. the Department considers the Impacts to be in three areas: Energy consumption. powerplant emissions and water consumption. These considerations are discussed elsewhere in this rule. Additional areas ofpotential impact are powerplant construction and nu(:iear waste disposal. The Department is unable to measure 

### ifstandards 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 nuclearpowerplantsthat are not currently under construction or already scheduled for construction will come on**Iim~** 

### during the period ofanalysis. The DeJ)artment believes that today's final rull! will not affect utilities' decisions with respect to nuclearpower plant construction. While it 

### Is possible to estimate the number ofpotential 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 ofgenerating 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 thatthe EA for the proposed rule did not discuss the e£ftlcts ofthe various options on water cOlllsumption. (NWF. No. 11 at2).

III 

### the analysis for the fmal rule. the Del)artment did make specific cal'Mations of the impacts on water CO[lsumption ofthe different candidate standard levels. SeeTechnical 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 andNo: 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~** 

### ofseven percent both for the calculation ofLCC 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. andNYSEO commented 

### that the use ofa seven percent discount rate was reasonable. NYSEO commented that the use ofthe

seven percent rate was the "most reasonable." while Whirlpool stated that the seven percent value is plausible and provides 8 

### calculation. with market assumptions. thatresults 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 approachWhirlpool proposed is similar to thatputforward 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. NRDCv. 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 ofthe Tax Refonn Act of 1986 {Pub. 

### 1.. 99-514); The Tax Reform Act'will have phased out the tax deductibility ofinterest paid on

consumer loans by the time amended standards will be applicable. Based on the revised methodology. DOE calculated a range ofreal. 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 ofthe 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 ofthe alternate

consumer investment opportunities that

are foregone in order to finance the purchases of appliances.

Some comments urged a discount rate ofless the sevenpercent. based on the rates associated with appliance purchases. These included Schneider. The American Cou.i1cil for an Energy

### Efficient Economy ACEEE). andPublic Cltlzen. (Schneider. No. 10 

### at 2. 

### and Schneider. et. aL. No. 31 

### at 3; ACEEE. 

### Testimony at 4-5; 

### andPublic Citizen. No. 34 

### at 2).

None ofthese comments urging 

### a lower consumer rate. basedonreal. after-taxrates aaaociated

### with

consumer purchases ofappliances offered any 

### empiricalbasisfor 

### the recommendation ofa rate below seven percenL Ideally. 

### ifDOE couldobtain empirical data on

### the methods that

consumers use to pay for 

### their appliance purchases. the Departmentcould use a weighted average. real. after-tax. finance rate for a consumer discount
rate in the analysis. Therefore. unless and until any broad-basedempirical

.data can be developed on the methods

consumers use to flIUlnce purchases of appliances. the Department will 

### continue to use sevenpercent. for the

reasons mentioned above.

Nevertheless. because the range of real. after-taX rates offiDance is 10 

### broad. the Departmenthaaexpanded ita 

### sensitivity runs from using 5 

### and 10 percent.rates to using 2 and 15 percent rates. Itis 

### believed that this broader range ofsensitivities will betterreflect the wide vari'ation in actual consumer financing rates. and. therefore. better capture the significance ofany differences resulting from 

### the range of
rates.
Water Savings

EPA commented that the Department should calculate the value ofwater 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 ofwater 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 ofwater. as they do not pay the marginal cost ofenergy. Therefore. the analysis continues to use the average cost ofwater. However. the Department agrees with EPA regarding the consideration ofwater savings in 

### the decision-making process. and. as noted above. included water savings in the economic analysis under OtherFactors.

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" 

# rTuesday;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 ofa 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 testprocedurerulemaking. This option. inDOE'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 ofa product's energy

use. Therefore. 

### ifa 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 ofother 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 ofhow 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 ofdetermining 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 ofcurrent

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 ofLCC 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. Itis used to t::stimate the cost and efficiency ofa range ofenergyconserving 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.
paybacks 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

occurwithout 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 

### inresponse to the August 9. 1989. proposed rule were then used as input to the economic analysis forthe purpose ofcalculating impacts of standards.

Finally, Nyle commented that the baseline energy factor for clothes dryers

was unrealistic. (Nyle. No. 24 at4). 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 oftesting reported
to DOE. Furthermore. Nyle's comment is the only one that takes issue with the

measure ofefficiency. Therefore. DOE believes thatNyle 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 ofclothes

. washer cycles peryearis declining: based on 1989-89 survey data. it is now 380 cycles per year. down from the test procedure value of416. 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 ofpayback period. the Departmentis required by section 325(1)(2)(B)(iii) ofthe 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 paybackperiod. 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 thatmaintenance e:(penditures should be included in the aJllalysis and that they should equal S11)'JL 

### ofthe price ofthe 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



### afipropriateo

DOE agrees with 

### ACEEE and EDF and hEIS not adopted AHAM's recommendation. The only maintenance ell:penses to be usedin 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 

### at4). 

### 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 hadfailed to propose standards that were at the max tech level and economicallyjustified. 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 hadproposed six daues ofclothes 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 ofa 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 testprocedure rates capacity by measuring the total volume ofthe tub. companies could be subject to the lower energy factor by increasing the volume ofthe washer that is above the water 

### fill andnot

### 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 ofthe appliance labeling program. In 

### consideration ofthe 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 orless), 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 iffront 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 consumermarket. 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 ofmachine. 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 notdependent

on door placement. I.e•• the utility related feature does not necessarily determine the product's performance. DOE believes that the horizontal rotation design offront 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 ofWarm Water Rinses



### AHAM. Whirlpool and Maytag commented that the elimination ofwarm waterrinses 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 Maytag. No. 17 

### at 2, 

### rund No. 40 

### at 6). 

### Each commented that 

### warmrinse haa utility for arthritic people rund those living 

### in cold regions ofthe 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 Maytag commented that inorder to avoid reaction to laundry chemicals.

some consumers flOd it 

### necessary to use
a warm rinse. (AHAM. 

### No. 29 

### at 19, 

### and Maytag. No. 40 

### at 6): 

### Inaddition. AHAM 

### and Maytag commented thatdryer 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 ofWhirlpool's clothes washers do not have this option. Also. PlI:G commented that it 

### "supports the

use ofcold water rinsing in clothes washers in general, and flOds no performance reasons negating this move." (PlI:G. No. 21 at4).



### The Department notes that there are presently clothes washermodels being sold that do not provide warm rinse 'choices. The energy savings from elimination ofwarm 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. 

### ,TheDepartmentreviewed the.comments and determined there is no eVIdence that a warm rinse is necessary in the washing process. especially inlight of

# ,

".

r

.f!.

" ••..• ,4,



# ,. 

# .

\he 

### large numberofclothes wasDers sold without iL 

### Therefore. 

### DOE included 

### he'elimination

### ofwarmriILIe aa 

### a ielignoption in the engineering analysil.

Whirlpool proposed 

### that if

### the Department were to adopt a standard based on 

### the 

### elimination ofwarmrinse. 

### the ltaudard 

### .hould be 

### a preacriptive 

### standard allowing the

### use of

### a warm water rinse that would have to be ,elected each time itwas desired. Le

.. a ::oldrioae deIault 

### aettiq. (Whirlpool. No. 20 at 14.).



### The standard considered was baaed

on the elimination of

# warm watertinae. However. being a performance standard. it could also be met by a machine with a warmwater rinse 

### if otherdesign 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 theremovai ofwater 

### by increased clothes washerdram spin speeds could significantlyreduce 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 sucha 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 Actrequires stilndards to 

### be based on 

### the applicable,
teat 

### procedure. Sincethe test procedure does not provide for this deaign. it
cannot be included as a candidate for standaros. Thermostatically Controlled Mixing Valves

In the proposedrule. 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 publichearing. 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 

### byPaG 

### 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 lowertemperatureof 120 

### ·F.



# an the 

### other

### hand. ACEEE stated that only a small segment ofthe population reqWl'es 

### a hot waah temperature for clothes washing; for them. 

### ACEEE argued that manufacturers couldprovide washing machines that would use 130·
water

### for theirhot

### waterwashes. while achieving the necessary energy savings elsewhere.

PAG. however. contended that virtually 

## an purchasers ofwashing machines wouldhave need of

### an oCC8sional130 

### OF hot waterwash. Therefore. P&G strongly aupported an

, 130 

### 0p or betterinlet water temperature be 

### consideredfar 

### all clothes washers 

### in order to removegreasy soils.

Given PAG's extensive work 

### in researching the solubility and the effectiveness ofdifferent 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 controlledmixing 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

Maytag. 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 plasticis not 

### a direct substitute for steel. Whirlpool agreed that the effectofreducing 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 

### arenot interchangeable. Maytag stated that when a plastictub 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 ofa plastic tub has energyconserving potential and is. therefore. a viable design option. Accordingly, the Department included this design in the analysis for this rnlemaking.**,-~** ',.

,

MotorEfficiency

Maytag. WhIrlpool. and

### AHAM discussed the feasibility ofincreasing
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 thatmotor efficiency 

### can beinereslad.

### but that 

### such motors donotprovideadequate starting torque.

On the otherhand. 

### Whirlpool commented that ita motorefficiency 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 wouldweigh 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. InWhirlpool's opiniOD. 

### tIUs would not beeconoaticallyjustified.



### In light of the comments received. DOE re-evaluated the motorcost data discussed in theTSD. 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 motorcouldexceed the capacity ofthe 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 receivedconcerning the possibility ofincluding 

### the additional design options 

### ofmanual 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 ofclothes washers were equipped with manual water level switches. (AHAM. No. 29 at 22). Based

on the comments submittedby AHAM. DOEconcluded that the design options ofmanual 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 Departmentnotes they haJe 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 ofclothes 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, Maytag.

. 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 ordesign option for**I~lectric** 

### clothes dryers. (RMI. No. 12 

### at 7. 

### NPPC. No. 13 at 2. 

### NRDC. No. 16 at 28- :13. Maytag. No. 17 

### at 9 andNo. 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 ofsystems 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 ofheat pump clothes dryers. Nyle believes that this technology can also be extended to re'sidential clothes dryers.

Maytag 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. (Maytag. No. 17

### at 9 and No. 40
at 3. and Whirlpool. No. 20 at 58). Maytag 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/hourand would have a volume ofmore 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).



### Basedprimarily 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

### perset DOE presumes that it 

### is coping with the

. lint problem in its commercial models. DOE Is not convinced that lint build-up is sucha 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 ofthe

. 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 Maytag and Whirlpool opposed the adoption ofthis technology as**~** 

### design option in the analysis. (RMI. 

### No. 12 

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

### 2. Maytag. 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 ofpatents 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 otherhand. Maytag 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 ofthe potential safety problems. (Maytag. No. 40 at 3. and Whirlpool. No. 39 at 3. 

### 5, and 6). 

### DOE reviewed WhIrlpool's comments and concluded thatill

### experience of putting clothing in a microwave oven is
not applicable to the prototype

.microwave dryer experience. DOE believes. based on the Pesciandthe NRDC 

### statements. thatalthough some limitations existwithmicrowave clothes dryers. microwave clothes drying'is a technically feasible design option. The Department. therefore. included it as a .design option inthe 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 byMahan Micro. 

### Ltd.. bas a magnetron (the microwave generator) with an efficiency of55 percent and that

more efficient magnetrons are available. units 

### with efficiencies as high 

### as 75 percent. As 

### part ofan upcoming ruiemaking on kitchen ranges and

ovens. DOE has been gathering data resarding 

### microwave ovena and magnetrons. Based on those data. DOE is unaware ofmagnetrons with efficiencies less than 75 percent. Apparently. the industry standard is a 75 percent efficient magnetron: the effiCiency ofthe 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 thatMahan Micro. Ltd. manufactured actually has a magnetron of75 percent efficiency. Therefore. the analysis is based on a 75 percent efficient magnetron. and DOE knows ofno higher magnetrOn efficiencies at this time. With respect to the retail price ofmicrowave 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 ofthe 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

### diliaotexpWa

# wa, it wal DOt 

### cho8en as •• 

### taDdard level. DOE identified

### three medJods of recoverin3 heat thatisSeneraily 

### loat from 

### clothes**~rs;** 

### they 

### arerecycled exhaust

### beat.

## DOD<IJI1deasias inlet air 

### preheat. 

### 8JIdClOIldeuiDginletair preheaL 

### DOE

### beliewel the three 

### methods of

### exbauatheat reawery

### are m1ltualiy exclusive. 

### 'I1Iat is. only one CaD 

### beu.ed OIl a dJyer. 

### Aflsexam.iaiag the three different approaches. DOE found thatthemetboda are approximately equal intheir contribution to clothes

### dryer energy consumption. butthat 

### the option of recycle exhanst beat had a lower manufacturercost

### aDd. therefore. was chosen as the design option for exhaust heatrecovery.

In additioo. Whirlpool aDd AHAM commented that eachdesign hal technical problems. (Whirlpool. No. 20
at 52; and

### AHAM. No. Z9 at 25 and 26). Recycle exhaust

### besthal safety problelDl due to thepoteDtialoflarger pieces oflint breaking offand being ignited by the electricresistance element or by the flame in a gas clothes dryer. Both inlet air preheat options have performance problems caused by 

### the buildup oflint in 

### the heat exchanger. DOE agrees with

# AHAM·. and Whirlpool's comments concerning 

### the technical problems with each design; hoWever. as statedpreviously, the' Department believes that lint is a problem in aU dryers. These technologies mayexacerbate the problem. but the Departmentis 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 onrecycle exhaust heat becauc!'! ofits lowercoaL '

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, andNyle argued that DOE had underestimated the savings. £OF estimated

### that 80 percent ofthe heat is 

### exhausted. not 20 percent as estimated byDOF.NRDC cited a report by D. Hekmatand W.J. Fi1Jk.improving the

### EnergyEfficiency 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 "ahoot92% 

### oC 

### the theoretical maximumenergy utilization 

# .

in the

### dryer drum ilalready 

### 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 

### ofclothes dryera.

Automatic Termination

DOE received 

### a number ofcomments regarding the method ofautomatic termination. moi1lture 01" temperature. and the energy savings for each. ODOE recommended that moisture sensors shouldbe the required option. while Dingell urged thatDOE resolve the question oC whether moisture lJensing devices really save moreene1gy than temperature sensing devices. (ODOF. No. 15 at 5; and Dingell. No. 35 at 3). NYSEO andNRDC both argued that the rationale used 

### in the proposed rule (the
testprocedure gives both forms 

### of a,utomaticterminationthe 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 thatmeasured 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
testprobedure is justified and therefore based consideration of teday's rlIlal Rule on the credit given by the test procedure.

TimedDry

. .

Maytag. ACEEE. £OF.**Vi~ir!pool.** GEA. 

### andAHAM 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 stationaryrackinside the dryer. In addition.Maytag commented that timed dry is necessary for those occasional loads that are not sensed properly by automatic controls orfor partial drying prior to ironing. (Maytag. No. 17 at 'l and 8). Whirlpool agreed with May tag and provided an extensive discussion ofthe situations where timed drywould be necessary; (Whirlpool. No. 20. at 37-47).

.ACEEE and EDF commented that the elimination oftimed 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 thatthey

### wuaid support 

### a 1I1aadud that wonld 

### allow

### timers in

### conjunctian with. butnot oYerridden by. Bntmnatjc controls. (Maytag. No. 17 

### at 10: Whirlpooi. No. 20 

### at47; and 

### GEA. No. 21 at22J. GEAfmther

### statedthat there should not be a limit on the Jettmgfor timed dry.

After reviewing the comments. DOE concluded that this feature. timed

### dry, is ofbenefit 

### to 4:OD1lumt!!'S and aboald

. remainasa manually lelected option. DOE isDOt 

### able to determine 

### ifthere 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). DOEagrees. and therefore did not iDclllde it in 

### the FinaJ Rule.



### 3. Dishwashers.

General

Whirlpool cammented 

### thatthe proposed standardlevel 1 iltedmically feasible and costjustified. wDile Maytag commented that an energy Cactor of 0.37 for standard sized dishwashers is achievable. (Whirlpool. No. 20at 6; and May tag. No. 17 at

## 61.
DOE determined that standard levels

more stringent than these are technically feasible and costjustified. 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 thatthe 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 thatreduced inlet
water temperature can be accomplished only through use ofwaterheating dishwashers. (GEA. No. 21 

### at 4!-

On the other hand. ACEEE andNRDC both commented 

### that the Department had not presented evidence 

### that loads containing animalfata would be insufficiently cleaned by lowerwater temperatures. (ACEEE. No. 10 at 6; and NRDC. No. 16 at 34).

DOE reviewed the P8cG study and found thatP&G studied four kinds of fat 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 ofwater appeared 

### to remove most ofthe fata after

### one use and wash. However. on a seventh use and 

### wesb, the removal ofone ofthe fats (pork) was inadequate.

Tllie Department notes that 

### there was
no discuaaion ofwhattook place between tha first 

### and 

### aeventhuses and washes to cause the problem. Additionally. there wu

### nodiscussion of the Illse ofalternative detergents. Furthermore. the. comDlImta do Dot address dishwashers with 

### booster heatlll'8 IUch

### as ,waterheating dishwashera.

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 

### at4).



### After reviewing the commerits. the Department has concluded that a water heating dishwashe.r. whichis 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. boosterheate.rs, which allow a 120 OF wate!: heater set point while providing for the use ofhigher wash water**templ~rature** 

### when neceaaary. Improved Food Filter

GEA 

### commented that reduced water consumption with animproved food nIter would result in units with unacc:eptable washing performance. GEA further commented that its experience indicates thatthe addition of food filters saves 0.67 

### gallons ofwater 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 ofwater use by 20 percent (5 to 4fills). (Whirlpool. No. 

## io at 6).**Aftl~r** 

### consideration ofthe above. DOE has rE!tained the improved food filter as a possible design option to reduce bot waterusage. as wasdone in the proposed rule. The intent ofthis design option is to reduce water usage from the 12

### gallons used by the baseline model to 9.5 

### gallons used by two ofthe top rated dishwashe.rs in 

### theConsumer Report testsubmitted by NWF. The magnitude ofthis waterreduction is 

### compatible with

### Whirlpool's experience

### of Improving the food filter. While there

are other

### waysto reduce water

### usage •. DOEused theiinproved food filter as being representative ofthis concept.
ThreeFiU

NWF. NRDC andACEEE 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 buthave 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 ofconsumer 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 diahwasherperformance.



## oem finds. however. that animproved 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. 

### EfficiencyLevelsAnalyzed. 

### DOE examined a range of standard levels. including the 1988 

### NAECA standards for two classes ofclothes 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 standardfor these three classes. The impacts of any revised standards for the two classes considered were compared to 

### the 1988 NAECA standards. The impacts ofthe 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 ofimpacts for analysiS. These efficiency estimates 

### are for standard and compact capacity, toploading clothes washers. Standard level 1 corresponds to efficiencies achieved by 

### elimination ofall 

### 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. 

### PaybackPeriod. 

### Table 4-2 presents the payback period for the efficiency levels analyzed for the most prevalent class ofproduct (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 ofthe 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'8YSavings.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. EconomicJustification

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 ofefficiency. 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 ofoperation (energy expense) at level 1 is $25.70 and $11.40 for a top-loading standard-sized clothes washer connected to an electric waterheater 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 by0.1 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 oflow 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 

### perdesign option. All ofthe 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 ofthe 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 greaterfixed 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 CostandNetPresent 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 lowerlife-cycle costs indicate that

no standard level would cause any economic burden on the average
consumer. Ofthe five candidate standard levels. level 4 had the lowest

consumer life-cycle cosL Ofthe levels considered without horizontal axis. level 1had 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 waterheater. 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 ofreal. after-tax rates that consumers would likely face in fmancing the purchase ofclothes 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 "-,**------~-** --



### Federal Regisl8r 

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

### appropriate. However. DO& did eXllmine the effect ofa usaserate diflrerent from the 416 

### cycles peryear set by the DOE test procedure. Recent Prclcter and Gambledata appearto indicate that

### the national average clothes washerannual uaage rate is 406 cye:les per year. more 

### thaD**~** 

### percent Ie

.. than the testprocedurerepresentative

av.lrage usecycllt.

### The .li8htly lower uSIi:ge numbers re.ultinthelower

### lifecyde cost estimates that were pre.ented abClve. See Teclmica1 Support Doc:ument. SectiOll6.1.1..

The NPV analysis. a me

.. ure ofthe
net .avings to .ociety.indicates that stalldard level 1 

### would produce a NPV ofS: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 purchaseand operate washing' ma(:hines, as measured in 

### 1981 dollars. than under the bue C881t.



### C, EnergySaving

.. & lndicated above. standards

### willresult in significant savings ofelectricity conllumption for clothes washers.



### D.LesseningofUtJ1ityorPerformance of

Products; As indicated above. DOE established claases ofproducts in 

### order
to 8IJsura that the standarda analyzed would not lessen the existing 

### utility or performance ofclothea washers.

& 

### Impact of Lessening Competition. The determination ofthis factor was made by the Attorney General. In its**revic~w** 

### oftheproposed standards for clothes washers.the Department of Justice (DO)) concluded 'that 

### "a sigDlificant lessening ofcompetition may
occu.r under certainconditiou." such aa the need for the smallercompetitors to undmialce substantialredesign or retooling. (DOJ. NO. 3& 

### at**')~**



### In the Notice ofProposed Rulemaking. standard level 1 

### and 2 were met by elimtnating the warmrinse option and addi:ng thermostatic mixing 

### valves. DOf fOUlllci that "somemanufactureramay
not be able to comply with the proposed standards by making these design changes and may need toundertake

more: substantialredesign orretooling that would impose substantial fixed cost!I." If. as DOE believes. lome manufacturers may electto retain the warm/warm setting andwarm water rinse in response to marketplace demunds. then manufactUrers will bave greatercosts 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 

### expectedto be-.01• .Q9. 

### and.06 washers use electricity directly and 

### are pen:ent for SOs. NOs andCo.. responsible for the waterheaterenergy 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 heaterenergy consumption is standard level 2 aM.08. 

# .os. and.05 either in electricity ornatural gas. percent; for standard level 1. 

### the depending upon the waterheater. respective emissiona reductions would ConaequentIy, clothes wa.hers 

### are be

## .os, .00. 

### and .04 percent.

.

.reaponaible for- both gaaandelectricity G. 

### OtherFacton. Afterthe 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 awareofa newtype of percent ofnaturalgu consumption (or. 

### i washing machinenowavailable in .z41 

### Quad) were accounted for ona 

## i Europe. DOE believe.thatthis new national basia by clothe. washers. ' de.ign. top-loading with horizontal-axis

inaddition. decreasing

### future rotation. has great energysavings 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 SupportDocument,

, design and theM is no information on AppendixD I. 

### The greatest decreases in 

### ! this technology in the record. DOE does, air pollution 

### will occurfor 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 wouldbe 89,418 

### tona. This design options based on 

### thit technology. reduction repMsents

## o.ss percent ofthe Thereaults aM presented below; United States SOs emissions 

### that are however. DOEnotes 

### that

### all aspects of expected to be emittedbypowerplants these analyses are 

### snbtect tochange as 

### In thatyear. more·data become available.

Standard level 5 would also result ina decrease in nitrogen dioxide (NO.1 Based on the great energy savings emissions for the ye81' 2015 

### of74,997 potential oftpis 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 bypowerplants· Proposed Rulemaking for Nine Products. inthat year. ' 55 FR 39624. 

### September28. 1990. 

### Inlight

Another consequence ofthe standards ofthis. DOE consideMd whether to issue 

### will be the reduction ofcarbon dioxide a final rule for clotheswashera today or (COJ) 

### emissions. Standardlewl5 is estimated to reduce United States Co. whether to repropose a newrule

### emissi~s by about0.43 percent for the inatead. Because ofthe time involved In yeat2DaS. in2015. 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. Standardlevel 3 reductions energy savings now but giving great

• Aa I renit ofproYIlfOlJll In the recently ftUlcted CIea AirAct 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 .tandanlapriorto thl year 2000, will be
pan ofmuch greeteJ: So. reductiOM that ant required by the DeW ameDdmenta. Aftartheyeu 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 ofSo. equiYaleftt to the amOllJlt of the 

### so. reduc:tl0D that_1Mthe creditao Thenew amendment. aUow thouMnIiD8 th6 credit.either 10 aell thlllD to othen or to "bank" thlllD lorfuture

UI& Therefore. efterthe yeu2000. to the extantthat appllauc:e .tandud8 rnuit In

### so. credib being euaed. and to the extent tball1lC.b .tazIdanb. ' Induced credit.

.... told BDd \lied byotileft. the Nallona! 

### so. reductiona will Dot occur.

.

The new law eiso requirel thai utility boilers emit la_level. ofNO.. AI a renit. the expected emiutoDi ofNO. will be leu thaD wa. U8\IIIIed ill the Department'. eetimatioD ofthe NO.. eaVingl acbievlbla through the praml applllllOll .tanduda revi.iona. The actual No..reductions resulting from today" atandard reYI.icma will be leuthaD 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. Ifthis 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 economicallyjustified to impose a majorretooliDg 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 economicallyjustified." Accordingly. the DepartmentfU'8t considered the max tech level of efficiency. i.e.• standardlevelS. for amended clothes washerstandards.,I

. "



## f

i 

### '.

"-:'
.. ' ..**~** 

### ., 1,,'

.. .. 

### .**~** .... ",' '

. ;"**~.** . 

### ,

.**~-** 

### . 

### Federal 

# Re8isfer I Vol. 56. No. 93 

## I Tuesday. May 14. 1991 

## I Rules and Regulations

Ofthe 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 allclothes 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 ofwarm rinses. an improved
motor. thermostatic mixing 

### valves. and a plastic tub.

M mentioned above. the principal technology on which this standardlevel 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 ofthe 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 standardlevel 5. For the

reasons mentioned above. therefore. the Department believes that it cannot consider it 

### for this final rule.

The nextmost stringent standard level is standardlevel 3. This standard level Is projected to save 0.81 quad ofenergy between 1993 and 2015. Among the level's other positive impacts are the projections oflower 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 of6.05 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 washerconnected to an electric water heater and a g8S water heater. respectively.

On 

### the otherhand. 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 ofnearlytWo million units between 1993 and 2015. As a consequence. the NPV of this standard would be a negative.$135 million. the lowest ofany 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 ofthis standardlevel added $7.50 to the per unit cost ofmanufacturing 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 thatthe burdens of standard level 3 for clothes washers outweigh the benefits, andrejects the standard level.

Standard level Zwould save 0.68 quad of energy between 1993 and 2015. and would repay itself to the consumerin 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 otherpositive impacts are the projections oflower 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 waterheateror a gas water heater. This standard level could

. involve substantialincreased costs to manufacturers. 

### As noted above. the improved motor design option used to achieve the energy savings ofthis standard level added $7.50 

### to the per unit cost ofmanufacturing 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 ofthe

. 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. 

### Ifthis were to occur. a standard
at this level could result in manufacturers needing to undertake

more substantial redesign orretooling 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 standardlevel 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 ofenergy and is technologically feasible and economicallyjustified.

There would be Significant energy savings at this level ofefficiency. During" • •

. I

_.**~** 

### 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 be0.51 quad ofprimary ellergy. Such savings would total more than 4.7 

### percent ofbase case energy use. In addition. the standard could have a p,)sitive' effect on the environment by I't!ducing the emissions ofNO. 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 beused. the So. I't!ductiona will not occur. Furthermore. tlite standard 

### will reduce emissions of 

## Co. by 11.683 million tons. or0.01 purcent. over the forecast period.

The standard Is 

### also expected to reduce waleruse 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 economicallyjustified. The cClnsumerpayback ofthis 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 ofa clothes willsher. This standardhas the lowest 

### LGC and is expected to result in 

### a reduction in

### LCC ofapproximately $106.30 

### and $43,00 

### for clothes washers connected to electric water heaters and gas waterheaters. 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 orretooling. the DE!partment expects that it 

### will not have negative impacts on smaller competitors.

b. Clothes Dryers

1. 

### EfficiencyLevelsAnalyzed. 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 ANA**I~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-Con

### tinued

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. PaybackPeriod. Table 4-5 

### presents the paybackperioda for the efficiency levels analyzed for the most prevalent classes ofproduct (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 year2015 from the energy consumption ofnew electric and gas clothes dryers sold in the absence of amended standards and compared it 

### to the energy consumption ofnew 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 ofthose 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. EconomicJustification. 

### 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 ofefficiency. the incremental consumerprice increases. compared to the baseline. for electric clothes dryers are $13. $23.70. $72.30. $167.50. 

### and $395.30. 

### For·gas dryers. the

consumerprice 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 perunit reduction in 

### annual cost ofoperation (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 ofoperation 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.'

# .

...**~--** 

### 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 ofdemaad: These standard levela cause such • largeprice increase that a .i8Difjc:mt dediDe in the qwmtity ofdryers demanded occars..1n 

### LBLMIM. thisdecrea1le iD 

### anita

### demanded

causes e greaterreduction inrevenue than invariable COlts and. as a result. a decrease

### inprofit 

### and ROE.



### Th1a industry baa displayed coaHmalng 

### CDn8OIfclation fOl'several 

### decades. eapecia1l, du:ring perioda of 

### 10.earnings. By increasing profitability,

as DOE pro;ecuatataDdard levela 1 and 2. standardscould lead 

### to a reduction in the rate ofaucll 

### 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 cueusumea that manufacturers' typical clothes dryerdesigns are baaed

OD the

### combinatioa ofoptions 

### presented in the Engineerins

### Aaaiyais for 

### the baseline uaiL H 'Dsm'lacturen U88 a different combmaticlll ofdesign options
to produce clothe. 

### dryen thatminimally comply with the 1994 standard. the Departmentmay have inappropriately characterized the financial position of the prototypical manufacturer 

### in the

.LBL-MlM. Furthermore. since financial data of the typeneeded to characterize the prototypicalmanufacturer are generally not available. DOEhad to make a number ofassumptions based on the limited data that is publicly

. available. e.g

.. Seturities andExchange 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 andNet 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 gasclothesdryers had

### the lowest LCC. This indicates that atthese levels the standard would

## not caaseany economic burdenon the aVe!'8ge consumer becauseof thedecrealriDg LCC.

&ned

### on19158

### Us6se patterns. compared to the basecase. standard leveltwould ea1!S8 a reduction in LCC of$76.80 for standard

### electric clothes dryers 

### and$12.10 for standard gas clothes dryens: standard levelZ 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 anincrease 

### 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 inLCe. 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 didnot consider higher discount rates. Since such rates would be beyond the range ofreal. after-tax
rates that CODSumers would likely face infinancing the purchaaea ofclothes washers. Similarly. DOEdidnot 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 peryear. more than 2 percentless 

### than the 

### testprocedure**repre8~tative** average use cycle. The s1iglitlylower 

### usage numbers 

### result in thelower 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 (ofwhich $1.212 billion would be attributed to the standard on electric. dryers). At standard level 2. the 

### NPV would be $1.301 billion. ofwhich $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 ofminus $231 million. for a total NPV for the standardof$778million. Standardlevel 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 (ofwhich the standard would produce an NPV of$1.285 billion and minus $479 million on electric and
gas dry1!rs. respectively). See Technical SupportDocument. Table 5.22. 

# c. EnergySavings. 

### AI

### indicated. above. 

### .taodardawiU relUlt 

### inaavings ofenergy CDllBIDDption 

### byclothes' 

### dryers. 

### The cumulative eJl8l'8Y savings

over

### the 1993-201S period wouldrange from 0.81 Quadat standard level 1 to 6.39 

### Quada atstandardlevel 

### S. See Technical SupportDOCWDI!Dt. Table' 5.18.

. D. Leuening

## ofUtility 01'Perfo

..



### 2aJllCe of

Products. 

### AI indicated

### above. DOE e-bliahed 

### cla.aea ofpt'Oduct8 

### iD order
to easure

### thatthe atandadaaualyzed would not lessen

### the 

### m.liDautility Ol' performance ofdothea dryers.



### E./mpactof Leuening CIJmpelition.**Thede~tiODofthisfadorwaa**

. made by the AttorneyGeneraL 

### In ita

.

comments on the proposed rule. 

### The DepartmentofJustice concluded that the proposed standard was not likely to produce a competitive impact (DO,. NO. 38at4).



### F. Need10 $a(lf1 Energy. 

### CIotbea dryers use electricity 

### and natural gas a. theirenergy sources. Between 1993and 2015. without amendedstaDdarda. clothes dryers areexpectedtoccm8UJDe 14.84 quads ofenergy. Standard levelt would save .61 quads. or4.1 percent. of' that amount. while standardlevels 

### z-s would save6.5. 10.2. 24.3. and45.6. percent. respectively. The savings at standard levels 4 and S are due almost entirely to electric clothesdryers.



### in addition. as noted above for clothes washers. decreasing future electricity demand as a result of standards will decrease airpollution. 

### SeeTechnical Support Document. AppendixD.·The greatest decreases in airpoUution 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 wouldbe 171.240 tons. This reduction represents 1.06 percent of the United States SOt emissions that are expected to 

### be emitted bypowerplants 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 percentofthe total NOt emissions expected to 

### be emitted by powerplants 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. OtherFactors. There were no additional factors affecting clothes dryers considered 

### inthia review

..



### 5. 

### Conclusion. Section 325{1}(2)(A) of the Act specifies that theDepartment must consider. for amended standards. those standards that "achieve the maximum improvement 

### in energy efficiency which the Secretary determines is technologically feasible and economicallyjustified." Accordingly. the Department fllst considered the max tech level of efficiency. i.e

.. standard levelS. for amended electric clothes dryer standards. Inthis conclusion. discussion of standards for electric clothes dryers

. will be presented 

### first. followed by the discussion ofstandards for natural gas clothes dryers.

A.

### Electric ClothesDryers. Ofthe 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- ormoisture-sensing automatic termination. insulation. and a heatpump. The Departmentis not

aware ofthe existence ofany residential-sized heat pump clothes dryers.

The consumerpayback of this standardis 6.9 years. less than one-half the estimated 17.1 years average lifetime

. ofclothes dryers. At$921. this standard level is at theLeC minimum. and is $127 less than the LCC ofthe baseline unit. The standard. however. would increase the purchase price ofelectric clothes dryers by 132 percent ($395). thereby precluding many consumers from being able to purchase the product. Under this standard. shipments ofelectric 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 ofthe 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 of546 percent). Such a loss situation would undoubtedly have sldverse competition impacts. The Department. therefore; concludes that llle burdens ofthis 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 ofthis 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 ofany standard level.

Because ofthe 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 ofnearly 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.

Standardlevel 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 ofexhaust heat. all designs that can presently be found on clothes**·~rs.** .

. The consumerpayback 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 ofthe 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 amountofenergy. are technolOgically feasible and economicallyjustified.

As discussed above. there wiube significant energy savings at this level of efficiency. During the period 1993-2015. these savings are calculated to be 0.76 quad ofprimary energy. Such lavings would total more than 

### 6 percent ofbase

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 economicallyjustified. 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 Inan 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 increasingprofitability. this standard level could have positive competitive effects.



### B. Gas Clothes Dryers. Ofthe**s~dard** levels analyzed. level 3 will

save 

### the most energy (0.12 quad). The technologies that would be involved rn meeting this standardlevel are temperature ormoisture 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 ofa gas clothes dryer by $72. or 21 percent. thereby precluding

some consumers from being able to purchase the product. Shipments ofgas 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
atlevel 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 •

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### ..

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### 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 level2.. The 

### Department

### Conciudes that level 2 standards for 

### guclodIet dryers save B significant amount ofenergy. are technoiogicaUy

### feuibAe aDd**eammruailly~~aDdthatthe** benefitsofthe 

### 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 ofprimary energy. Such savings would total 4.1 

### percent of base case, energy use. 

### Thetedmologies 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 Zresults for electric dryerproduction. 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 

### EfficiencyLevelsAnaJ}'Zed. Table 4-3presents the efficiency levels selected for analysis for 1993. Alternate levels were selected to generate a range ofimpacts 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 oflevelS.

### Eachlevel 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/xWHIYA.)

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 ofhot waterfrom 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 percentofthe 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 thepaybackperiod for the efficiencyieveis analyzed for the

# most prevaientclau ofproduct (standard dishwasher {US volt)). Fordishwashers connectedto an electric waterheater. 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 therebuttable presumption
test.

TABL£ 4-7_-PAvSACK PERIODS (YEARS)

STANOARO DISHWASHER (115 VOLTS)

Wilt! gas 

### i WlItI electric

WIlIer 

### i

--**~tef** heater 

## I 1

..._______**~** 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 ofnew dishwashers sold 

### in the absense ofamended 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. Standardlevel 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 $32.30more 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~** waterheater. 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 of6.65 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 dishwashermanufacturer'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 ofonly 0.4 percent from the bastl case. See

### Technical Support Doomtent. Table 7.9.

nleDepartment's characterization of the Jlrototypical manufacturer in the

, basEl case assumes that manufacturers' typh:al dishwasherdesigns are based on the c:ombination of options presented in the Hngineering Analysis for the balE!line unit. 

### IfmamUacturers use a different combination ofdesign 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 ofassumptions based on the limited data publicly available. e.g

.. Securities and Exchange Commission 10K I'eports and company annual reports.

This approachwasoriginally disC1llSsed in the Advance Notice of Propl,sed RuJemalcing (53 FR 17712. May 18,1£188). and the Department did not receive any comments thatindicated a**cha~~e** 

### in approach wasw8lT8Dted.

B.l..ife-Cycle Cost andNetPresent**VaJul~.** 

### The Leeanalysis indicates that for ellch possible standard Jevel the incre,ase in purchase price would be offsel: by savings in operating expenses. Standard JeveJ 4corresponds to the miniJ:aa ofthe LCC CUl'Yes. See Techllical SupportDocument. 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 ofS87.8O 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 

### waterfrom an electric- orgas-fired waterheater. 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 littleimpact. the Department did not considerhigher discolmt rates. since suchrates would be beyond the range ofreal. after-tax rates liliat consumers would likely face in**fin~lncing** 

### the purchases ofclothes 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 peryear set by the DOE test procedure. Recent Procter and Gamble data appear to indicate that the national average clothes washerannual usage rate is 286 cycles peryear. more than 11 percent less than the test procedure representative average usecycle. The slightly lowerusage 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 anNPV 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. SeeTechnical Support Document. Table 5.6-

C. EnergySavings. As 

### discussed above. DOE concluded that standards. at each candidate standardlevel. 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 

### ofUtility orPerformance of

Products. 

### As indicated above, DOE established classes ofproducts in order to assure that the standards analyzed would not lessen the existing utility or performance ofdishwashers. However. there is{lo assurance that future utility

orperformance ofdishwashers would
not be lessened as a result ofstandardsinduced disincentives to investments in energy-using new features. In 

### addition. the Department believes adoption ofany ofthe design options considered will also not affect utility orperformance.

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 ofcompetition. (DOJ, No. 38 at 3). DO, did not. however. evaluate the competitive effects ofmore stringent standards.

F. NeBd to SaveEnergy. 

### Dishwashers

use electricity as a primary energy
source. both for operation ofthe motors and for the electric coils that are used in the drying cycle. In 

### addition. that portion ofwaterheater electricity consumption that provides hot water to the dishwasheris considered to be Indirect dishwasherelectricity consumption. Similarly. since some of the hot waterthat is supplied to dishwashers comes from gas water heaters. dishwashers areresponsible for indirect gas consumption. too.

As 

### with amended standards on the othertwo product types in this notice. 'decreasing future electricity demand as

a result ofstandards on dishwashers 

### will decrease airpollution. See Technical Support Document. Appendix 

### 0. 10

### The greatest decreases in air pollution will occurfor sulfur oxides (listed in equivalent weight ofsulfur dioxide. or

## so.). For standard levelS. In the year 2015, the estimated

## so. reduction would be 15.090 tona. This reduction represents .09 percent ofthe United States 

### SOt emissions that are expected to be emitted by powerplants in that year.

Standard level Swould also result in a decrease of 12.490 tons ofnitrogen dioxide (NO,) emissions for the year 2015. This decrease represents .12 percent ofthe total NO, emissions expected to be emitted by powerplants in that year. '

Standard levelS Is estimated to reduce United States 

### Co, emissions by about .07 percent for the year2015.



### 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. standardlevels 2 and 1 would eachreduce So, power plant emissions by .04 percent. NO, powerplant

. emissions by .05 percent. andU.s. Co,

emissions by .03 percent.
,

G. OtherFactors. 

### 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 

### orderto meet this standard. DOE

assumes that aU dishwashers would have booster heaters that allow the

consumer to reduce the thermostat setting on theirwaterheaters to 120 ·F. Ifthis occurs. the energy savings resulting from the standard are likely to be even greater since the analysis

'0 AJ.o

_ foolllote 8. above.·.' #' • - ,**'~** .



### 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 waterused 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 standardlevel had the largest positive impact on the environment due to reduced water use. and reduced emissions ofCo.. 

### 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 waterheater. The payback for dishwashers connected to gas water heaters is nearly halfofthe 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 waterheaters. respectively. The standards. however. areprojected to increase the purchase price of dishwashers approximately 15 percent. thereby precluding some consumers from being able to purchase the product. The sales ofdishwashers 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 ofany 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 ofthe 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 ofa tolerance. 

### Ifone or more ofthe 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 standardlevel 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 ofenergy. are technologically feasible and economicallyjustified.

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 ofprimary energy. Such savings would total more than 12percent of base case energy use. In 

### addition. the standard could have a positive effect on the environment by reducing the emissmns ofNOt and SOS as much as 0.10. and0.08 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, or0.06 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 ofapproximatelay $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 ofany 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 Departmenthas 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 onEnvironmental Quality regulations implementing the procedural provision ofNEPA 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 ofFederal regulations:

• Executive Order 12612 (52 FR 41685. October 30. 1987) which pertains to agency considerstion ofFederal actions that wouldhave a substantial direct effect on States. on the relationship betweenthe Federal Government and the States, and on the distribution of power and responsibilities among the various levels ofgovernment: 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 proposearule 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 particularrule. the agency must publish a certification and explanation of that determination in 

### the Federal Register.



### a. EnvironmentalReview

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 ofNo 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

### •



# ",''''P::'''
. ' 

# .



# . f**~ ~**  

### F'"

## ~ I VoL 56. No. 93 

## I Tuesday. May 14. 1991 

## I Rules and 

## ltquiation8

. 'IZZ17

### -~~~~~~~~~~~~~~~~~~~~~ rule. Nevertheless.

### moatofthe en'monmental 

### effects enaJyzed for the final rule fall within thel'8Jl8e ofImpacts thelt were described 

### in the

### EA thatwas pnipared for the

### proposedrule.

Forexample. in

### the year2010. the sauings ofsulfurdioxide (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 washerstaDdarda totalled up to 21.li98 tona. 15,815tona. and 1.677 million tona. respectively. Since the FONSI was issuedfor these larger savings. the 

### final rule'. amaller savings

can. the Departmentconcludes. also be considered not aignificant.

Similarly. inthe year2010. 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 reportedin

### the FONSL wherein the 

# So.. No.. and

## co. I8YiDga totalled
upto 38.230tons. 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 InitsFONSI. Nevertheless. they fall within the range ofinlpacts whichwerediscussed in the para,graphs above for clothes wasbers and clothes 

### dryers, 

### aDd forwhich FONSl's were issued.**S~[lce** all of the environmental effects expEtcted from 

### tbia fiDal rule fall within
ranges ofenvironmental impacts that haVE! been found not to be significant. the Ilepartmenthaaconcluded that thesl! environmental 

### effects also are not significant. Therefore. theDepartment has determined that anEnvironmental ImP<lct Statement (EIS) was not required. Nevertheless. as noted above. the environmental effects were considered

### in selectingthe final standards for these appliances. 

### b. RE·gulatoryImpactReview

Executive Order 1Z291 (46 FR 13193. Febl'lllary 19. 1981) 

### directs that. in propllSmg a major

### rule.n an agency

II "Malorrule" me8DJ anyregalatioD 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

... orpricea 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 ofUnited Stata-balfJd eDterpn_ to c:ompeteWith 

### foreisnbaaed ,enterprUa III**~** orapart mariceta. perform a regulatory 81181ysls. Such an analysil presents major alternatives to the regulation that could substantially achieve the sameregulatory 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 ''majorrule." Accordingly. B Pinal Regulatory Impact Review hal beenprepared and submitted to the Office ofManagement and Budget (OMB). OMB hal reviewed theRegulatory ADalyai8under Executive Order 12292.

The RegulatoryAnalysis i. summarized below. This summary focuses on the major altemativea considered 

### in arriving at the proposed approach to improving the energy efficiency ofconsumerproducts. The

. readeria referred to the complete draft "Regulatory Impact Analysis." which is contained 

### in theTSD. available as indicated at the beginning ofthia notice. It consists of: (1) A atatement ofthe problem addressed 

### by this regulation. and.the mandatefor sovemment action: (2) a deScription and analysis ofthe feasible policy alternatives to this regulation: (3) a quantitative comparison ofthe impacts of the alternatives: and (4) the economicimpact ofthe proposed standard.



### It should be noted at the outset that

none ofthe 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. -Taxcredits -Rebates

• Voluntary Energy Efficiency Targeta.

• The ProposedApproach (Performance Standards).

Each alternative has been evaluated in terms ofits ability to achieve significant energy savings at reasonable
costs. and has been compared to the effectiveness ofthe 

### final rule. 

### IfDO newregulatory action

### were taken. thennonew 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 therewould

### be expectedenergyuseof84.18 Quads of primaryenergy. with no enervsavings and a zeronetpresentvalue.



### Sneral alternatives 

### to the

### base case 

### can begnnrpedunderthe heading of informational action. 

### They include

consumerproduct labeling andDOlrs pubUceducation and information
program. Both ofthese alternatives are mandated

### bythe Act. One basecase alternative would be to estimate the
energy conservationpotential of

. eohancing these programs. To model 

### this possibility. the Department assumed thatmarket discountrateswouldbe lowered by five percentfor purchasers ofthese three products. 

### This resulted in
energy savings equal to .01 

### Quad. with expectedcooaumption equal to 34.18 Quads. The Det present value is ' estimated to be$10 miWon.

Anothermethod ofsetting standards would entailrequiring that 

### certain design optiooa be used on eachproduct. 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 ofclothes washers which are already at standard level 1.For example. prescriptive dishwasher

, standards are assumedto be at standard level 3 instead oflevel 4 as in the performance standards. The lower standards level entails slightly smaller expenditures for tooling andpurchased parts. Consequently. the economic implicts that are expectedbefore the implementation date shouldbe slightly smailt!r for prescriptive standards. This resulted in energy consumption.

. between 1993 and Z015, of3Z.14 Quads. and savings of2.04 Quads. Thenet 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 forhigherenergy efficiency features ofthese appliances. while the rebates were assumed to be 15 percent of the increase 

### in equipment ' prices. The tax credits to consumers showed a modest changefrom the base

case. saving .24 Quad with a net present value of$720 million. Consumerrebates showed more sizable changes: they

### , , 

### ,

, '11>

.

: :-.. ..: - .. - .' 

## .'

:

......' t**"_,,._~** -"_;'.**~~:'~(;:!J-:}'~'.:.: "':'~"** **:.~** .. .**~** ':,(



# . , ,



# . Federal Register 

## I Vol. 58, No. 93 

## I Tuesday. May 14. 1991 

## I Rules and Regulations

.would save 1.16 Quadswith 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. aninvestment taxcredit (ITe) of20 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 ofthis 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 ofthese products would involve purchased parts. Expenses for purchased parts would not be eligible for an 

## rrc.

Two scenarios ofvoluntary 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 yeardelay would result in 33.28 Quads ofenergy 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 ofthe energy conservation standards by these appliance manufacturers. an assumption for which there is no reasonable assurance.

Lastly. all ofthese 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** ofprimary 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 ofthis section. none ofthe 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. IIthere are sufficient substantial direct effects. then Executive Order 12612 requires preparation ofa 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 theforegoing. the Department finds that the preparation ofa 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. RegulatoryFlexibilityReview

The Regulatory Flexibility Act of 1980 (Pub. 

### L. 96-354) requires an assessment ofthe impact ofregulations 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. specializedmarkets. Smallfirms are generally forced to specialize in small market niches that offer some protection from the cost advantage that large firms hold when they canproduce 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 Departmentlearned 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 beenproducing 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 offailing or being bought out than will the large fll'JDs. Because ofthe greater precariousness ofsmaller 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 thepoint of view of competitiveness. a decrease in average profitability could speed up the process ofconsolidation. producing a less competitive industry. while anincrease 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 offirms 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 ofa 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 standardby eliminating that option. there 

### win be essentially a zero cost increase resulting from the standard.

Finally, the impact ofthe energy -conservation standards on clothes dryer :manufacturers needs to be addressed. The LBL-MIM Indicates. through its prediction ofan increase in typical ROE. that the proposed standards are likely to 11low down the consolidation process temporarily. This would lead to a temporary slowing downofthe (: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 smallerfirms the most. since smaller firms tend to have less sophisticated research and development capabilities. This is not a significant if!sue since the standardlevels 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) ofthe Regulatory FlexibilityAct that today's a.:tion will not have a "significant e(:onomic impact on a substantial number of small entities."



### Inconclusion. for eachofthese 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 smallentities." and it is not necessary to prepare a regulatory flexibility analysis.


### Lint ofSubjects 

### in 10 CFR 

### Part 430



### Administrative practice and pmcedure, Energy conservation. HClUsehold appliances. In

### consideration of the foregoing. part 430 

### ofchapter 11 

### ofTitle 10, 

### Code of Federal Regulations, is amended as set forth below.

Issued in Washington. DC. April25. 1991. 

### J. Michael Davis. AssistantSecretary, Conservation and RenewableEnergy.

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

orafterMay 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 equippedwith a constant burning pilot.

(2) 

### Clothes dryers manufactured on or afterMay 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



## .,