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CHAPTER 2. ANALYTICAL FRAMEWORK

TABLE OF CONTENTS

2.1 INTRODUCTION ........................................................................................................... 2-1

2.2 MARKET AND TECHNOLOGY ASSESSMENT........................................................ 2-5

2.2.1 Market Assessment .......................................................................................................... 2-5

2.2.2 Technology Assessment................................................................................................... 2-5

2.3 SCREENING ANALYSIS .............................................................................................. 2-5

2.4 ENGINEERING ANALYSIS.......................................................................................... 2-6

2.5 MARKUPS ANALYSIS ................................................................................................. 2-7

2.6 ENERGY AND WATER USE ANALYSIS ................................................................... 2-7

2.7 LIFE-CYCLE COST AND PAYBACK PERIOD ANALSYIS ..................................... 2-8

2.8 SHIPMENTS ANALYSIS .............................................................................................. 2-8

2.9 NATIONAL IMPACT ANALYSIS................................................................................ 2-9

2.9.1 National Energy and Water Savings................................................................................ 2-9

2.9.2 Net Present Value of Consumer Benefit........................................................................ 2-10

2.10 CONSUMER SUBGROUP ANALYSIS ...................................................................... 2-10

2.11 MANUFACTURER IMPACT ANALYSIS.................................................................. 2-10

2.12 EMPLOYMENT IMPACT ANALYSIS....................................................................... 2-11

2.13 UTILITY IMPACT ANALYSIS................................................................................... 2-11

2.14 ENVIRONMENTAL ASSESSMENT .......................................................................... 2-12

2.14.1 Carbon Dioxide.............................................................................................................. 2-12

2.14.2 Sulfur Dioxide................................................................................................................ 2-12

2.14.3 Nitrogen Oxides............................................................................................................. 2-13

2.14.4 Mercury.......................................................................................................................... 2-13

2.14.5 Particulate Matter........................................................................................................... 2-13

2.15 MONETIZATION OF EMISSIONS REDUCTION BENEFITS ................................. 2-14

2.16 REGULATORY IMPACT ANALYSIS ....................................................................... 2-15

LIST OF FIGURES

Figure 2.1.1 Flow Diagram of Analyses for the Rulemaking Process..................................... 2-2
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CHAPTER 2. ANALYTICAL FRAMEWORK

2.1 INTRODUCTION

Section 6295(o)(2)(A) of the Energy Policy and Conservation Act (EPCA), Pub. L. 94-

163, 42 U.S.C. 6291 et seq. requires the U.S. Department of Energy (DOE) to set forth energy 

conservation standards that achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. This chapter describes the general analytical 

framework that DOE uses in developing such standards, and in particular, amended energy 

conservation standards for residential dishwashers. The analytical framework is a description of 

the methodology, the analytical tools, and the relationships among the various analyses that are 

part of this rulemaking.

Figure 2.1.1 summarizes the analytical components of the standards-setting process. The 

focus of this figure is the center column, identified as “Analyses.” The columns labeled “Key 

Inputs” and “Key Outputs” show how the analyses fit into the rulemaking process, and how the 

analyses relate to each other. Key inputs are the types of data and information that the analyses

require. Some key inputs exist in public databases; DOE collects other inputs from interested 

parties or other knowledgeable experts within the field. Key outputs are analytical results that 

feed directly into the standards-setting process. Dotted lines connecting analyses show types of 

information that feed from one analysis to another.
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Figure 2.1.1 Flow Diagram of Analyses for the Rulemaking Process

Utility Impact

Analysis 

Notice of Proposed Rulemaking (NOPR)

Final Rule

Approaches Key Inputs Analyses Key Outputs

Market and Technology

Assessment

Screening Analysis

Engineering Analysis

Product Price

Determination Life-Cycle Cost and 

Payback Period 

Analyses

National Impact

Analysis

Energy Use

Revise Preliminary

Analyses

Life-Cycle Cost 

Sub-Group Analysis

Manufacturer Impact 

Analysis

Shipments

Analysis

Employment Impact

Analysis 

Revise Analyses

• Product Classes

• Technology Options

• Industry Cash Flow

• Sub-Group Cash-Flow

• Direct Employment Impacts

• Competitive Impacts

• Cumulative Regulatory Burden

• Product Designs

• Life-Cycle Costs

• Payback Periods

• National Energy Savings

• Net Present Values

• National Employment Impacts

• Revised Results

• Characterize Industry

• Market Segmentation

• Non-Regulatory Programs

Framework Document

• Efficiency-Level Approach

• Design Option Approach

• Energy Prices

• Installation Costs

• Maintenance & Repair Costs

• Accounting Approach

• Backcast and Forecast

• Market Saturation

• Stakeholder Comments

• Demographics

• Manufacturer Interviews

• GRIM Analysis

• Emission Rates

• National Energy Savings

• Stakeholder Comments

• Identify Firms/Products 

• Historical Shipments

•Retail Price Collection and

Analysis

• Manufacturer Prices

• Average Costs

• Manufacturer Financial Data

Design Options

Product Classes

Retail 

Prices

Design Energy/ Use

Advance Notice of Proposed Rulemaking (ANO)

• Efficiency/Performance

• Commercial Products

Candidate

Standard 

Levels

• Analysis of Energy Use 

Data

Environmental

Assessment

Regulatory Impact

Analysis

Technology Options

• Emission Estimates

• Utility Load Factors

• National Energy Savings

• Non-Regulatory

Alternatives

• NEMS-BT

• ImSET

• NEMS-BT

• Design Options

• Energy Price Forecasts

• Site-to-Source Factors

• Energy-Efficiency Levels

Direct Employment 

Impacts

• National Energy Savings

• National Product Costs

• National Operating Costs

• Utility Impacts

• Analysis of Market Data

• Analysis of Product Data

• Life-Cycle Costs

• Payback Periods

• Installation

Costs

• Maint Costs

• Repair Costs

• UEC

• Energy Prices

Annual Energy Use (UEC)

Preliminary 

Manufacturer Impact 

Analysis

• Manufacturer Prices

• Average Costs

• Conversion Capital Expenditures

• Direct Employment Impacts

• National Energy Savings

• Net Present Values

• Trial Standard Levels (TSLs)

TSLs

• Product Prototypes

Energy-Efficiency 

Levels

• Department of Justice Review

Product Designs

Utility Impact

Analysis 

Notice of Proposed Rulemaking (NOPR)

Final Rule

Approaches Key Inputs Analyses Key Outputs

Market and Technology

Assessment

Screening Analysis

Engineering Analysis

Product Price

Determination Life-Cycle Cost and 

Payback Period 

Analyses

National Impact

Analysis

Energy Use

Analyses

Life-Cycle Cost 

Sub-Group Analysis

Manufacturer Impact 

Analysis

Shipments

Analysis

Employment Impact

Analysis 

Revise Analyses

• Product Classes

• Technology Options

• Industry Cash Flow

• Sub-Group Cash-Flow

• Direct Employment Impacts

• Competitive Impacts

• Cumulative Regulatory Burden

• Product Designs

• Life-Cycle Costs

• Payback Periods

• National Energy Savings

• Net Present Values

• National Employment Impacts

• Revised Results

• Characterize Industry

• Market Segmentation

• Non-Regulatory Programs

Framework Document

• Efficiency-Level Approach

• Design Option Approach

• Energy Prices

• Installation Costs

• Maintenance & Repair Costs

• Accounting Approach

• Backcast and Forecast

• Market Saturation

• Stakeholder Comments

• Demographics

• Manufacturer Interviews

• GRIM Analysis

• Emission Rates

• National Energy Savings

• Stakeholder Comments

• Identify Firms/Products 

• Historical Shipments

•Retail Price Collection and

Analysis

• Manufacturer Prices

• Average Costs

• Manufacturer Financial Data

Design Options

Product Classes

Retail 

Prices

Design Energy/ Use

Publication of Preliminary Analyses

• Efficiency/Performance

• Commercial Products

Candidate

Standard 

Levels

• Analysis of Energy Use 

Data

Environmental

Assessment

Regulatory Impact

Analysis

Technology Options

• Emission Estimates

• Utility Load Factors

• National Energy Savings

• Non-Regulatory

Alternatives

• NEMS-BT

• ImSET

• NEMS-BT

• Design Options

• Energy Price Forecasts

• Site-to-Source Factors

• Energy-Efficiency Levels

Direct Employment 

Impacts

• National Energy Savings

• National Product Costs

• National Operating Costs

• Utility Impacts

• Analysis of Market Data

• Analysis of Product Data

• Life-Cycle Costs

• Payback Periods

• Installation

Costs

• Maint Costs

• Repair Costs

• UEC

• Energy Prices

Annual Energy Use (UEC)

Preliminary 

Manufacturer Impact 

Analysis

• Manufacturer Prices

• Average Costs

• Conversion Capital Expenditures

• Direct Employment Impacts

• National Energy Savings

• Net Present Values

• Trial Standard Levels (TSLs)

TSLs

• Product Prototypes

Energy-Efficiency 

Levels

• Department of Justice Review

Product Designs
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The analyses performed for this direct final rule and reported in this technical support 

document (TSD) are listed below.

• A market and technology assessment to characterize the relevant product markets and 

existing technology options, including prototype designs.

• A screening analysis to review each technology option to decide whether it is 

technologically feasible; is practical to manufacture, install, and service; would adversely 

affect product utility or product availability; or would have adverse effects on health and 

safety.

• An engineering analysis to develop cost-efficiency relationships, which indicate the 

manufacturer’s cost of achieving increased efficiency.

• A markups analysis to develop distribution channel markups that relate the manufacturer 

production cost (MPC) to the cost to the consumer.

• An analysis of the annual energy and water use of the considered products.

• Life-cycle cost (LCC) and payback period (PBP) analyses to calculate, at the consumer 

level, the discounted savings in operating costs (minus maintenance and repair costs) 

throughout the estimated average lifetime of the covered products, compared to any 

increase in purchase and installation cost likely to result directly from imposition of a 

given standard.

• A shipments analysis to forecast shipments of residential dishwashers, which are then 

used to calculate the national impacts of standards on energy, net present value (NPV), 

and future manufacturer cash flows.

• A national impact analysis (NIA) to assess aggregate impacts at the national level of 

potential energy conservation standards for the considered products, as measured by the 

NPV of total consumer economic impacts and the national energy savings (NES).

• A manufacturer impact analysis to assess the potential impacts of energy conservation 

standards on manufacturers’ capital conversion expenditures, marketing costs, shipments, 

and research and development costs.

In this direct final rule, DOE presents the results of the above analyses, incorporating 

revisions to the analyses based on comments and new information received. DOE also presents

results of the following additional analyses in the direct final rule:
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• An LCC subgroup analysis to evaluate variations in consumer characteristics that might 

cause a standard to affect particular consumer subpopulations, such as low-income 

households, differently than the overall population.

• A manufacturer impact analysis to estimate the financial impact of standards on 

manufacturers and to calculate impacts on competition, employment, and manufacturing 

capacity.

• A utility impact analysis to estimate the effects of proposed standards on electric, gas, or 

oil utilities.

• An employment impact analysis to assess the aggregate impacts on national employment.

• An environmental impact analysis to estimate the effects of amended standards on 

emissions of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxides (NOx), and 

mercury (Hg).

• A regulatory impact analysis to examine major alternatives to proposed amended energy 

conservation standards that potentially could achieve substantially the same regulatory 

goal.

DOE developed these analyses in response to the “Agreement on Minimum Federal 

Efficiency Standards, Smart Appliances, Federal Incentives and Related Matters for Specified 

Appliances” (the “Joint Petition”), a comment submitted on July 30, 2010, by groups 

representing manufacturers, energy and environmental advocates, and consumer groups

(collectively, the “Joint Petitioners”). This collective set of comments, which DOE refers to in 

this notice as the “Joint Petition”1 recommends specific energy conservation standards for 

residential dishwashers that, in the commenters’ view, would satisfy the EPCA requirements in 

42 U.S.C. 6295(o).

 

1 DOE Docket No. EERE–2011–BT–STD–0060, Comment 1.
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2.2 MARKET AND TECHNOLOGY ASSESSMENT

The market and technology assessment characterizes the relevant product markets and 

existing technology options, including prototype designs, for the considered products.

2.2.1 Market Assessment

When DOE begins an energy conservation standards rulemaking, it develops information 

that provides an overall picture of the market for the products considered, including the nature of 

the products, the industry structure, and market characteristics for the products. This activity 

consists of both quantitative and qualitative efforts based primarily on publicly available 

information. The subjects addressed in the market assessment for residential dishwashers 

included manufacturers, trade associations, and the quantities and types of products sold and 

offered for sale. DOE examined both large and small and foreign and domestic residential 

dishwasher manufacturers. DOE also examined publicly available data from the key trade 

association for this product category, the Association of Home Appliance Manufacturers 

(AHAM). DOE reviewed shipment data collected by AHAM and Appliance magazine to 

evaluate annual shipment trends. Finally, DOE reviewed other energy efficiency programs from 

utilities, individual States, and other organizations. Chapter 3 of the final rule TSD provides 

additional details on the market and technology assessment.

2.2.2 Technology Assessment

DOE typically uses information relating to existing and past technology options and 

prototype designs as inputs to determine what technologies manufacturers use to attain higher 

performance levels. In consultation with interested parties, DOE develops a list of technologies 

for consideration. Initially, these technologies encompass all those it believes are technologically 

feasible.

DOE developed its list of technologically feasible design options for residential 

dishwashers through consultation with manufacturers of components and systems, and from 

trade publications and technical papers. Since many options for improving product efficiency are 

available in existing units, product literature and direct examination provided additional 

information.

Chapter 3 of the final rule TSD includes the detailed list of all technology options 

identified for residential dishwashers.

2.3 SCREENING ANALYSIS

The screening analysis examines various technologies as to whether they: (1) are 

technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an 

adverse impact on product utility or availability; and (4) have adverse impacts on health and 

safety. DOE developed an initial list of efficiency-enhancement options from the technologies 
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identified as technologically feasible in the technology assessment. Then DOE reviewed the list 

to determine if these options are practicable to manufacture, install, and service, would adversely 

affect product utility or availability, or would have adverse impacts on health and safety. In the 

engineering analysis, DOE further considered efficiency enhancement options that it did not 

screen out in the screening analysis. Chapter 4 of the final rule TSD contains details on the 

screening analysis for residential dishwashers.

2.4 ENGINEERING ANALYSIS

The engineering analysis (chapter 5 of the final rule TSD) establishes the relationship 

between the MPC and the efficiency for each class of residential dishwashers. The purpose of the 

analysis is to estimate the incremental MPCs for a product that would result from increasing 

efficiency levels above the level of the baseline model in each product class. This relationship 

serves as the basis for cost/benefit calculations in terms of individual consumers, manufacturers, 

and the nation. Chapter 5 discusses the product classes DOE analyzed, the representative 

baseline units, the incremental efficiency levels, the methodology DOE used to develop the 

manufacturing production costs, the cost-efficiency curves, and the impact of efficiency 

improvements on the considered products. The engineering analysis considered technologies not 

eliminated in the screening analysis, designated as design options, in developing the costefficiency curves.

DOE typically structures its engineering analysis around one of three methodologies: (1) 

the design-option approach, which calculates the incremental costs of adding specific design 

options to a baseline model; (2) the efficiency-level approach, which calculates the relative costs 

of achieving increases in energy efficiency levels without regard to the particular design options 

used to achieve such increases; and/or (3) the reverse-engineering or cost-assessment approach, 

which involves a “bottom-up” manufacturing cost assessment based on a detailed bill of 

materials derived from tear-downs of the product being analyzed.

DOE proposed used the efficiency-level approach for residential dishwashers, combined 

with the cost-assessment approach to develop a cost for each efficiency level. This approach 

involved physically disassembling commercially available products, consulting with outside 

experts, reviewing publicly available cost and performance information, and modeling 

equipment cost. The efficiency levels that DOE considered in the engineering analysis are 

attainable using technologies currently available on the market in residential dishwashers. In 

addition, DOE associated each efficiency level with specific technologies that manufacturers 

might use to provide interested parties with additional transparency of assumptions and results 

and the ability to perform independent analyses for verification. Chapter 5 of the final rule TSD 

describes the methodology and results of the efficiency level analysis used to derive the costefficiency relationships.
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2.5 MARKUPS ANALYSIS

DOE performed a markup analysis to convert the manufacturer costs estimated in the 

engineering analysis to consumer prices, which then were used in the LCC and PBP and 

manufacturer impact analyses. DOE calculated markups for baseline products (baseline 

markups) and for more efficient products (incremental markups). The incremental markup relates 

the change in the manufacturer sales price of higher efficiency models (the incremental cost 

increase) to the change in the retailer or distributor sales price.

To develop markups, DOE identified how the products are distributed from the 

manufacturer to the consumer. After establishing appropriate distribution channels, DOE relied

on economic data from the U.S. Census Bureau and other sources to determine how prices are 

marked up as the products pass from the manufacturer to the consumer. Chapter 6 of the final 

rule TSD provides details on DOE’s development of markups for residential dishwashers.

2.6 ENERGY AND WATER USE ANALYSIS

DOE performed an energy and water use analysis to assess the energy and water savings 

potential from higher efficiency levels, providing the basis for the energy and water savings 

values used in the LCC and subsequent analyses. The goal of the energy and water use 

characterization is to generate a range of energy and water use values that reflects actual product 

use in American homes. Chapter 7 of the final rule TSD provides more detail about DOE’s 

approach for characterizing energy and water use of residential dishwashers.

DOE determined a range of annual energy and per-cycle water consumption of 

dishwashers by multiplying the per-cycle energy use and per-cycle water use of each considered 

design by the number of cycles per year in a representative sample of U.S. households.

DOE estimated the per-cycle energy use by subtracting the annual energy use associated 

with standby power from the total annual energy use and dividing the result by the national 

average number of dishwasher cycles per year. DOE used data provided by AHAM on the total 

annual dishwasher energy use and the standby power use for each considered efficiency level. 

DOE analyzed per-cycle energy consumption based on two components: (1) water-heating 

energy, and (2) machine (motor) and drying energy.

To estimate the number of cycles per year in a representative sample of U.S. households, 

DOE analyzed data from the Energy Information Administration (EIA)’s 2005 Residential 

Energy Consumption Survey (RECS), which was the most recent such survey available at the 

time of DOE’s analysis. DOE also analyzed a review of survey data to estimate the number of 

cycles per year. This data was also used to develop the 2003 dishwasher amendments, which 

included a reduction in the average use cycles per year, from 264 to 215 cycles per year. 

Because the survey is more comprehensive than the RECS data, DOE chose an average usage of 

215 cycles per year as the most representative value for average dishwasher use. To estimate the 
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annual number of cycles for each RECS household in the dishwasher sample, DOE multiplied 

the assigned specific numerical value by the ratio of 215 cycles to 174 cycles.

2.7 LIFE-CYCLE COST AND PAYBACK PERIOD ANALSYIS

New energy conservation standards usually decrease a product’s operating expenses, and 

usually increase its price. DOE analyzes the net effect of amended standards on consumers by 

evaluating the net life cycle cost (LCC). To evaluate the net LCC, DOE uses the cost-efficiency 

relationship derived in the engineering analysis and the energy and water costs derived from the 

energy and water use analysis. Inputs to the LCC calculation include the installed cost of a 

product to the consumer (consumer purchase price plus installation cost), operating expenses 

(energy expenses and maintenance costs), the lifetime of the unit, and a discount rate.

Because the installed cost of a product typically increases while operating costs typically 

decrease under new standards, there is a time in the life of products having higher-than-baseline 

efficiency when the net operating-cost benefit (in dollars) since the time of purchase is equal to 

the incremental first cost of purchasing the product. The time required for products to reach this 

cost-equivalence point is known as the payback period (PBP).

Recognizing that several inputs to determining consumer LCC and PBP are either 

variable or uncertain, DOE uses Monte Carlo simulation and probability distributions to model 

both the uncertainty and variability in inputs. DOE uses Microsoft Excel combined with Crystal 

Ball (a commercially available add-in program) to develop LCC and PBP spreadsheet models 

that incorporate both Monte Carlo simulation and probability distributions.

Chapter 8 of the final rule TSD describes the results from the LCC and PBP analyses.

2.8 SHIPMENTS ANALYSIS

Forecasts of product shipments are needed to calculate the national impacts of standards 

on energy use, NPV, and future manufacturer cash flows. DOE developed shipment forecasts 

based on an analysis of key market drivers for residential dishwashers. In DOE’s shipments 

model, shipments of products are driven by new construction, stock replacements, and other 

types of purchases.

The shipments models take an accounting approach, tracking market shares of each 

product class and the vintage of units in the existing stock. Stock accounting uses product 

shipments as inputs to estimate the age distribution of in-service product stocks for all years. The 

age distribution of in-service product stocks is a key input to calculations of both the NES and 

NPV, because operating costs for any year depend on the age distribution of the stock. 
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DOE also considers the impacts on shipments from changes in product purchase price 

and operating cost associated with higher energy efficiency levels. Chapter 9 of the final rule 

TSD provides additional details on the shipments analysis.

2.9 NATIONAL IMPACT ANALYSIS

The national impact analysis (NIA) assesses the net present value (NPV), to the nation, of 

total consumer life-cycle cost (LCC) and net energy savings (NES). DOE determined both the 

NPV and NES for the efficiency levels considered for the product classes analyzed. To make the 

analysis more accessible and transparent to all interested parties, DOE prepared a Microsoft 

Excel spreadsheet model to forecast NES and the national consumer economic costs and savings 

resulting from new standards. The spreadsheet model uses as inputs typical values (as opposed to 

probability distributions). To assess the effect of input uncertainty on NES and NPV results, 

DOE may conduct sensitivity analyses by running scenarios on specific input variables. Chapter 

10 of the final rule TSD provides additional details regarding the national impact analysis.

Several of the inputs for determining NES and NPV depend on the forecast trends in 

product energy efficiency. For the base case, DOE uses the efficiency distributions developed for 

the LCC analysis, and assumes some rate of change over the forecast period. In this analysis, 

DOE has used a roll-up scenario in developing its forecasts of efficiency trends after standards 

take effect. Under a roll-up scenario, all products that perform at levels below a prospective 

standard are moved, or rolled-up, to the minimum performance level allowed under the standard. 

Product efficiencies above the standard level under consideration would remain the same as 

before the revised standard takes effect.

2.9.1 National Energy and Water Savings 

The inputs for determining the national energy and water savings for each product class 

are: (1) annual energy and water consumption per unit, (2) shipments, (3) product stock, (4) 

national energy and water consumption, and (5) site-to-source conversion factors for energy. 

DOE calculated national energy and water consumption by multiplying the number of units, or 

stock, of each product class (by vintage, or age) by the unit energy and water consumption (also 

by vintage). DOE calculated annual NES based on the difference in national energy and water 

consumption for the base case (without new efficiency standards) and for each efficiency 

standard being considered. DOE estimated energy consumption and savings based on site energy 

consumption, which it then converted to source energy. DOE estimated water consumption and 

savings based on site water use. DOE did not use a conversion factor for water because no such 

factor has been developed. Cumulative energy and water savings are the sum of the NES for 

each year.
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2.9.2 Net Present Value of Consumer Benefit

The inputs for determining NPV of the total costs and benefits experienced by consumers

are: (1) total annual installed cost, (2) total annual savings in operating costs, (3) a discount 

factor, (4) present value of costs, and (5) present value of savings. DOE calculated net savings 

each year as the difference in total savings in operating costs and total increases in installed costs 

between the base case and each standards case. DOE calculated savings over the life of each 

product class, accounting for differences in yearly energy rates. DOE calculated NPV as the 

difference between the present value of operating cost savings and the present value of total 

installed costs. DOE used a discount factor based on real discount rates of 3 percent and 7 

percent to discount future costs and savings to present values.

DOE calculated the difference in total installed cost between the base case and each 

standards case (i.e., after standards take effect). Because the more efficient products bought in 

the standards case usually cost more than products bought in the base case, cost increases appear 

as negative values in the NPV.

DOE expressed savings in operating costs as decreases associated with the lower energy 

consumption of products bought in the standards case compared to the base efficiency case. 

Total savings in operating costs are the product of savings per unit and the number of units of 

each vintage that survive in a given year.

2.10 CONSUMER SUBGROUP ANALYSIS

The consumer subgroup analysis evaluates economic impacts on selected groups of 

consumers who might be adversely affected by a change in the national energy conservation 

standards for the considered products. DOE evaluates impacts on particular subgroups of 

consumers primarily by analyzing the LCC impacts and PBP for those particular consumers 

using the LCC spreadsheet model.

For this rulemaking, DOE analyzed as subgroups: (1) low-income households; (2)

households solely occupied by senior citizens. Chapter 11 of the final rule TSD describes the 

consumer subgroup analysis.

2.11 MANUFACTURER IMPACT ANALYSIS 

The manufacturer impact analysis (MIA) assesses the impacts of new energy 

conservation standards on manufacturers of the considered products. Potential impacts include 

financial effects, both quantitative and qualitative, that might lead to changes in the 

manufacturing practices for these products. DOE identified these potential impacts through 

interviews with manufacturers and other interested parties.
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DOE conducted the MIA in three phases, and further tailored the analytical framework 

based on interested parties’ comments. In Phase I, DOE created a dishwasher manufacturing

industry profile and analyzed publicly available financial information to derive preliminary 

inputs for the GRIM. In Phase II, an industry cash flow model and an interview questionnaire 

were prepared to guide subsequent discussions. In Phase III, manufacturers were interviewed, 

and the impacts of standards were assessed both quantitatively and qualitatively. Industry and 

subgroup cash flow and NPV were assessed through use of the Government Regulatory Impact 

Model (GRIM). Then impacts on competition, manufacturing capacity, employment, and 

cumulative regulatory burden were assessed based on manufacturer interview feedback and 

discussions. DOE discusses its findings from the MIA in chapter 12 of the final rule TSD.

2.12 EMPLOYMENT IMPACT ANALYSIS

New or amended energy conservation standards can impact employment both directly 

and indirectly. Direct employment impacts are changes in the number of employees at the plants 

that produce the covered products, and at the affiliated distribution and service companies, 

resulting from the adoption of new standards. DOE evaluated direct employment impacts in the 

MIA. Indirect employment impacts may result from expenditures shifting between goods (the 

substitution effect) and changes in income and overall expenditure levels (the income effect) that 

occur due to the adoption of standards. Chapter 13 of the final rule TSD describes the results of 

the employment impact analysis.

DOE investigated the combined direct and indirect employment impacts of standards 

using the Pacific Northwest National Laboratory (PNNL)’s “Impact of Sector Energy 

Technologies” (ImSET) model. The ImSET model, which was developed for DOE’s Office of 

Planning, Budget, and Analysis, estimates the employment and income effects energy-saving 

technologies produced in buildings, industry, and transportation. In comparison with simple 

economic multiplier approaches, ImSET allows for more complete and automated analysis of the 

economic impacts of energy conservation investments.

2.13 UTILITY IMPACT ANALYSIS

The utility impact analysis estimates the effects of amended energy conservation

standards on installed electricity generation capacity and electricity generation. For this analysis, 

DOE adapted NEMS, which is a large multi-sectoral, partial-equilibrium model of the U.S. 

energy sector that the EIA has developed throughout the past decade, primarily for preparing 

EIA’s Annual Energy Outlook (AEO). In previous rulemakings, a variant of NEMS (currently 

termed NEMS-BT, BT referring to DOE’s Building Technologies Program), was developed to 

better address the specific impacts of an energy conservation standard. NEMS, which is available 

in the public domain, produces a widely recognized baseline energy forecast for the United 

States. The typical NEMS outputs include forecasts of electricity and natural gas sales, prices, 

and electric generating capacity.
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DOE conducts the utility impact analysis as a scenario that departs from the latest AEO 

reference case. In other words, the energy savings impacts from amended energy conservation 

standards are modeled using NEMS-BT to generate forecasts that deviate from the AEO

reference case. Chapter 14 of the final rule TSD describes the results of the utility impact 

analysis.

2.14 ENVIRONMENTAL ASSESSMENT

Pursuant to the National Environmental Policy Act and the requirements of 42 U.S.C. 

6295(o)(2)(B)(i)(VI) and 6316(a), DOE prepared an environmental assessment of the impacts of 

amended energy conservation standards for residential dishwashers. The primary environmental 

effects of these standards would be reduced power plant emissions resulting from reduced 

consumption of electricity. DOE assessed these environmental effects by using NEMS-BT to 

provide key inputs to its analysis. The portion of the environmental assessment produced by 

NEMS-BT considers carbon dioxide (CO2), nitrogen oxides (NOx), and mercury (Hg). The 

environmental assessment also considers impacts on SO2 emissions and discusses particulate 

matter (PM) emissions. Chapter 15 of the final rule TSD describes the results of the 

environmental assessment.

2.14.1 Carbon Dioxide

In the absence of any Federal emissions control regulation of power plant emissions of 

CO2, a DOE standard is likely to result in reductions of these emissions. The CO2 emissions 

reductions likely to result from a standard are estimated using NEMS-BT and national energy 

savings estimates drawn from the NIA spreadsheet model. The net benefit of the standard is the 

difference between emissions estimated by NEMS-BT at each standard level considered and the 

AEO Reference Case. NEMS-BT tracks CO2 emissions using a detailed module that provides 

results with broad coverage of all sectors and inclusion of interactive effects.

2.14.2 Sulfur Dioxide

SO2 emissions from affected Electric Generating Units (EGUs) are subject to nationwide 

and regional emissions cap and trading programs, and DOE has preliminarily determined that 

these programs create uncertainty about the standards’ impact on SO2 emissions. Title IV of the 

Clean Air Act sets an annual emissions cap on SO2 for affected EGUs in all 50 states and the 

District of Columbia (D.C.). SO2 emissions from 28 eastern states and D.C. are also limited 

under the Clean Air Interstate Rule (CAIR, 70 Fed. Reg. 25162 (May 12, 2005)), which created 

an allowance-based trading program. Although CAIR has been remanded to EPA by the U.S. 

Court of Appeals for the District of Columbia Circuit (D.C. Circuit), see North Carolina v. EPA, 

550 F.3d 1176 (D.C. Cir. 2008), it remains in effect temporarily, consistent with the D.C. 

Circuit’s earlier opinion in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 

2010, EPA issued the Transport Rule proposal, a replacement for CAIR. 75 FR 45210 (Aug. 2, 

2010). EPA issued the final transport rule, entitled the Cross-State Air Pollution Rule, on July 6, 

2011. 76 FR 48208 (Aug. 8, 2011). Because the AEO 2011 NEMS that DOE is using for this 
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rulemaking assumes the implementation of CAIR, DOE has not been able to take into account 

the effects of the Transport Rule for this rulemaking.2

The attainment of emissions caps is typically flexible among EGUs and is enforced 

through the use of emissions allowances and tradable permits. Under existing EPA regulations, 

any excess SO2 emissions allowances resulting from the lower electricity demand caused by the 

imposition of an efficiency standard could be used to permit offsetting increases in SO2

emissions by any regulated EGU. However, if the standard resulted in a permanent increase in 

the quantity of unused emissions allowances, there would be an overall reduction in SO2

emissions from the standards. While there remains some uncertainty about the ultimate effects of 

efficiency standards on SO2 emissions covered by the existing cap and trade system, the NEMSBT modeling system that DOE uses to forecast emissions reductions currently indicates that no 

physical reductions in power sector emissions would occur for SO2.

2.14.3 Nitrogen Oxides

Under CAIR, there is a cap on NOx emissions in 28 eastern States and the District of 

Columbia (D.C.). All these States and the D.C. have elected to reduce their NOx emissions by 

participating in cap-and-trade programs for EGUs. Therefore, energy conservation standards 

may have little or no physical effect on these emissions in the 28 eastern States and the D.C. for 

the same reasons that they may have little or no physical effect on NOx emissions. DOE is using 

the NEMS-BT to estimate NOx emissions reductions from possible standards in the States where 

emissions are not capped.

2.14.4 Mercury

On February 16, 2012, EPA issued national emissions standards for hazardous air 

pollutants (NESHAPs) for mercury and certain other pollutants emitted from coal and oil-fired 

EGUs. 77 FR 9304. The NESHAPs do not include emissions caps and, as such, DOE’s energy 

conservation standards would likely reduce Hg emissions. For the emissions analysis for this 

rulemaking, DOE estimated mercury emissions reductions using a version of NEMS-BT that

does not incorporate the NESHAPs.

2.14.5 Particulate Matter

DOE acknowledges that particulate matter (PM) exposure can impact human health. 

Power plant emissions can have either direct or indirect impacts on PM. A portion of the 

pollutants emitted by a power plant are in the form of particulates as they leave the smoke stack. 

These are direct, or primary, PM emissions. However, the great majority of PM emissions 

associated with power plants are in the form of secondary sulfates, which are produced at a 

significant distance from power plants by complex atmospheric chemical reactions that often 

involve the gaseous (non-particulate) emissions of power plants, mainly SO2 and NOx. The 

quantity of the secondary sulfates produced is determined by a very complex set of factors 

including the atmospheric quantities of SO2 and NOx, and other atmospheric constituents and 

 

2 DOE notes that future iterations of the NEMS-BT model will incorporate any changes necessitated by issuance of 

the Cross-State Air Pollution Rule.
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conditions. Because these highly complex chemical reactions produce PM comprised of different 

constituents from different sources, EPA does not distinguish direct PM emissions from power 

plants from the secondary sulfate particulates in its ambient air quality requirements, PM 

monitoring of ambient air quality, or PM emissions inventories. For these reasons, it is not 

currently possible to determine how the amended standard impacts either direct or indirect PM 

emissions. Therefore, DOE is not planning to assess the impact of these standards on PM 

emissions. Further, as described previously, it is uncertain whether efficiency standards will 

result in a net decrease in power plant emissions of SO2 and NOx, since those pollutants are now 

largely regulated by cap and trade systems.

2.15 MONETIZATION OF EMISSIONS REDUCTION BENEFITS

DOE considered the estimated monetary benefits likely to result from the reduced 

emissions of CO2 and NOx that are expected to result from each of the standard levels 

considered.

In order to estimate the monetary value of benefits resulting from reduced emissions of 

CO2 emissions, it is DOE’s intent to use in its analysis the most current Social Cost of Carbon 

(SCC) values developed and/or agreed to by interagency reviews. The SCC is intended to be a 

monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, 

including, but not limited to, net agricultural productivity loss, human health effects, property 

damage from sea level rise, and changes in ecosystem services. Any effort to quantify and to 

monetize the harms associated with climate change will raise serious questions of science, 

economics, and ethics. But with full regard for the limits of both quantification and monetization, 

the SCC can be used to provide estimates of the social benefits of reductions in GHG emissions. 

At the time of this notice, the most recent interagency estimates of the potential global 

benefits resulting from reduced CO2 emissions in 2010, expressed in 2010$, were $4.9, $22.3, 

$36.5, and $67.6 per metric ton avoided. For emissions (or emissions reductions) that occur in 

later years, these values grow in real terms over time. Additionally, the interagency group 

determined that a range of values from 7 percent to 23 percent should be used to adjust the global 

SCC to calculate domestic effects, although preference will be given to consideration of the 

global benefits of reducing CO2 emissions. To calculate a present value of the stream of 

monetary values, DOE discounted the values in each of the four cases using the discount rates 

that had been used to obtain the SCC values in each case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also intends to estimate the potential monetary benefit of reduced NOx emissions 

resulting from the standard levels it considers. For NOx emissions, available estimates suggest a 

very wide range of monetary values for NOx emissions, ranging from $450 to $4,623 per ton in 
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2010$).3 In accordance with U.S. Office of Management and Budget (OMB) guidance, DOE will 

conduct two calculations of the monetary benefits derived using each of the economic values 

used for NOx, one using a real discount rate of 3 percent and another using a real discount rate of 

7 percent.4

DOE does not plan to monetize estimates of Hg in this rulemaking. DOE is aware of 

multiple agency efforts to determine the appropriate range of values used in evaluating the 

potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance 

regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg 

in its rulemakings.

2.16 REGULATORY IMPACT ANALYSIS

DOE prepared a regulatory impact analysis (RIA) under Executive Order 12866, 

“Regulatory Planning and Review,” 58 FR 51735, October 4, 1993, which was subject to review 

under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) at the 

Office of Management and Budget. The RIA evaluated non-regulatory alternatives to standards, 

in terms of their ability to achieve significant energy savings in the considered products at a 

reasonable cost, and compared the effectiveness of each one to the effectiveness of the adopted 

standards. Chapter 17 of the final rule TSD describes the results of the regulatory impact 

analysis.

DOE recognizes that voluntary or other non-regulatory efforts by manufacturers, utilities, 

and other interested parties can result in substantial improvements to energy efficiency or 

reductions in energy consumption. DOE considered the likely effects of non-regulatory 

initiatives on product energy use, consumer utility, and LCC. DOE based its assessment on the 

actual impacts of any such initiatives to date, but also considered information presented 

regarding the impacts that any existing initiative might have in the future.

 

3 For additional information, refer to U.S. Office of Management and Budget, Office of Information and Regulatory 

Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on 

State, Local, and Tribal Entities, Washington, DC. 4 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).