6450 01-P
 

DEPARTMENT OF ENERGY
 

10 CFR Parts 429 and 430
 

[Docket Number EERE–2011–BT–STD–0060]
 

RIN: 1904-AC64
 

Energy Conservation Program: Energy Conservation Standards for Residential 

Dishwashers 

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. 

ACTION: Direct final rule. 

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as amended, 

prescribes energy conservation standards for various consumer products and certain 

commercial and industrial equipment, including residential dishwashers. EPCA also 

requires the U.S. Department of Energy (DOE) to determine whether amended standards 

would be technologically feasible and economically justified, and would save a 

significant amount of energy. In this direct final rule, DOE is adopting amended energy 

conservation standards for residential dishwashers. DOE has determined that the 

amended energy conservation standards for these products would result in significant 

conservation of energy, and are technologically feasible and economically justified. A 

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notice of proposed rulemaking that proposes identical energy efficiency standards is 

published elsewhere in today’s Federal Register. If DOE receives adverse comment and 

determines that such comment may provide a reasonable basis for withdrawing the direct 

final rule, this final rule will be withdrawn and DOE will proceed with the proposed rule. 

DATES: The effective date of this rule is [INSERT DATE 120 DAYS AFTER DATE 

OF PUBLICATION IN THE FEDERAL REGISTER] unless adverse comment is 

received by [INSERT DATE 110 DAYS AFTER DATE OF PUBLICATION IN 

THE FEDERAL REGISTER]. If adverse comments are received that DOE determines 

may provide a reasonable basis for withdrawal of the final rule, a timely withdrawal of 

this rule will be published in the Federal Register. If no such adverse comments are 

received, compliance with the amended standards established for residential dishwashers 

in today’s final rule will be required on January 1, 2013.[INSERT DATE 1 YEAR 

AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. 

ADDRESSES: The docket for this rulemaking is available for review at 

www.regulations.gov, including Federal Register notices, framework documents, public 

meeting attendee lists and transcripts, comments, and other supporting materials. All 

documents in the docket are listed in the regulations.gov index. The online docket 

contains all public documents associated with this proceeding, including all previous 

Federal Register notices and supporting documents. Not all documents listed in the index 

may be publicly available, however, such as information that is exempt from public 

disclosure. 

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A link to the docket web page can be found at: [INSERT WEB PAGE LINK 

(THIS WEB PAGE WILL CONTAIN A LINK TO THE DOCKET FOR THIS NOTICE 

ON THE REGULATIONS.GOV SITE)]. The regulations.gov web page contains 

instructions on how to access all documents, including public comments, in the docket. 

For further information on how to review the docket, contact Ms. Brenda Edwards 

at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: 

Stephen L. Witkowski, U.S. Department of Energy, Office of Energy Efficiency 

and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence 

Avenue, SW., Washington, DC, 20585-0121. Telephone: (202) 586-7463. E-mail: 

Stephen.Witkowski@ee.doe.gov. 

Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, GC71, 1000 Independence Avenue, SW., Washington, DC, 20585-0121. Telephone: (202) 

586-7796. E-mail: Elizabeth.Kohl@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Direct Final Rule and Its Benefits 

A. Benefits and Costs to Consumers 

B. Impact on Manufacturers 

C. National Benefits 

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D. Conclusion 

II. Introduction 

A. Authority 

B. Background 

1. EISA 2007 Standards 

2. History of Standards Rulemaking for Residential Dishwashers 

3. Issues on which DOE seeks Comment 

4. Test Procedure History 

III. General Discussion 

A. Product Classes and Scope of Coverage 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible Levels 

C. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

D. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Manufacturers and Consumers 

b. Life-Cycle Costs 

c. Energy Savings 

d. Lessening of Utility or Performance of Products 

e. Impact of Any Lessening of Competition 

f. Need for National Energy Conservation 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion 

A. Market and Technology Assessment 

1. General 

2. Products Included in this Rulemaking 

3. Product Classes 

4. Non-Regulatory Programs 

5. Technology Options 

B. Screening Analysis 

C. Engineering Analysis 

1. Baseline Efficiency Levels 

2. Higher Efficiency Levels 

3. Proprietary Designs 

4. Reverse Engineering 

D. Markups Analysis 

E. Energy and Water Use Analysis 

F. Life-Cycle Cost and Payback Period Analysis 

1. Product Cost 

2. Installation Cost 

3. Annual Energy Consumption 

4. Energy Prices 

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5. Energy Price Projections 

6. Water and Wastewater Prices 

7. Maintenance and Repair Costs 

8. Product Lifetime 

9. Discount Rates 

10. Compliance Date of Amended Standards 

11. Base-Case Efficiency Distribution 

12. Inputs to Payback Period Analysis 

13. Rebuttable-Presumption Payback Period 

G. National Impact Analysis–National Energy Savings and Net Present Value 

Analysis 

1. Shipments 

2. Forecasted Efficiency in the Base Case and Standards Cases 

3. Total Installed Cost per Unit 

4. National Energy and Water Savings 

5. Net Present Value of Consumer Benefit 

H. Consumer Subgroup Analysis 

I. Manufacturer Impact Analysis 

1. Overview 

a. Phase 1, Industry Profile 

b. Phase 2, Industry Cash Flow Analysis 

c. Phase 3, Sub-Group Impact Analysis 

2. GRIM Analysis 

a. GRIM Key Inputs 

b. GRIM Scenarios 

3. Manufacturer Interviews 

J. Employment Impact Analysis 

K. Utility Impact Analysis 

L. Emissions Analysis 

M. Monetizing Carbon Dioxide and Other Emissions Impacts 

1. Social Cost of Carbon 

a. Monetizing Carbon Dioxide Emissions 

b. Social Cost of Carbon Values Used in Past Regulatory Analyses 

c. Current Approach and Key Assumptions 

2. Valuation of Other Emissions Reductions 

V. Analytical Results 

A. Trial Standard Levels 

B. Economic Justification and Energy Savings 

1. Economic Impacts on Individual Consumers 

a. Life-Cycle Cost and Payback Period 

b. Consumer Subgroup Analysis 

c. Rebuttable Presumption Payback 

2. Economic Impacts on Manufacturers 

a. Industry Cash Flow Analysis Results 

b. Impacts on Employment 

c. Impacts on Manufacturing Capacity 

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d. Impacts on Sub-Groups of Manufacturers 

e. Cumulative Regulatory Burden 

3. National Impact Analysis 

a. Significance of Energy Savings 

b. Net Present Value of Consumer Costs and Benefits 

c. Impacts on Employment 

4. Impact on Utility or Performance of Products 

5. Impact of Any Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Other Factors 

C. Conclusion 

1. Benefits and Burdens of TSLs Considered for Residential Dishwashers 

2. Summary of Benefits and Costs (Annualized) of the Standards 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 and Executive Order 13563 

B. Review Under the Regulatory Flexibility Act 

C. Review Under the Paperwork Reduction Act 

D. Review Under the National Environmental Policy Act of 1969 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates Reform Act of 1995 

H. Review Under the Treasury and General Government Appropriations Act, 1999 

I. Review Under Executive Order 12630 

J. Review Under the Treasury and General Government Appropriations Act, 2001 

K. Review Under Executive Order 13211 

L. Review Under the Information Quality Bulletin for Peer Review 

M. Congressional Notification 

VII. Approval of the Office of the Secretary 

I. Summary of the Direct Final Rule and Its Benefits 

Title III, Part B1 of the Energy Policy and Conservation Act of 1975 (EPCA or the 

Act), Pub. L. 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy 

Conservation Program for Consumer Products Other Than Automobiles. Pursuant to 

EPCA, any new or amended energy conservation standard that DOE prescribes for 

certain products, such as residential dishwashers, shall be designed to achieve the 

maximum improvement in energy efficiency that is technologically feasible and 

1 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. 

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economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended 

standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In 

accordance with these and other statutory provisions discussed in this notice, DOE is 

adopting amended energy conservation standards for residential dishwashers. The 

amended standards, which are established in terms of maximum annual energy use and 

maximum per-cycle water consumption, are shown in Table I.1. These amended 

standards apply to all products listed in Table I.1 and manufactured in, or imported into, 

the United States on or after January 1, 2013.[INSERT DATE 1 YEAR AFTER DATE 

OF PUBLICATION IN THE FEDERAL REGISTER]. 

Table I.1 Amended Energy Conservation Standards for Residential Dishwashers 

(Compliance Starting 2013) 

Product Class 

Compliance Date: 

January[INSERT DATE 1, 2013 YEAR AFTER 

DATE OF PUBLICATION IN THE FEDERAL 

REGISTER] 

Maximum Annual 

Energy Use* 

Maximum Per-Cycle 

Water Consumption 

1. Standard (≥8 place settings 

plus 6 serving pieces) 307 kWh/year 5.0 gallons/cycle 

2. Compact (<8 place settings 

plus 6 serving pieces) 222 kWh/year 3.5 gallons/cycle 

*Annual energy use, expressed in kilowatt-hours (kWh) per year, is calculated as: the sum of the annual 

standby electrical energy in kWh and the product of (1) the representative average dishwasher use cycles 

per year and (2) the sum of machine electrical energy consumption per cycle in kWh, the total water energy 

consumption per cycle in kWh, and, for dishwashers having a truncated normal cycle, the drying energy 

consumption divided by 2 in kWh. A truncated normal cycle is defined as the normal cycle interrupted to 

eliminate the power-dry feature after the termination of the last rinse option. 

These standard levels were submitted jointly to DOE by groups representing 

manufacturers, energy and environmental advocates, and consumer groups. This 

collective set of comments, titled “Agreement on Minimum Federal Efficiency Standards, 

Smart Appliances, Federal Incentives and Related Matters for Specified Appliances” (the

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“Joint Petition”2), 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). 

A. Benefits and Costs to Consumers 

Table I.2Table I.2 presents DOE’s evaluation of the economic impacts of today’s 

standards on consumers of residential dishwashers, as measured by the average life-cycle 

cost (LCC) savings and the median payback period. 

Table I.2 Impacts of Today’s Standards on Consumers of Residential Dishwashers 

Product Class Average LCC Savings 

(2010$) 

Median Payback Period 

(years) 

Standard $3 11.8 

Compact $12 0.3 

B. Impact on Manufacturers 

The industry net present value (INPV) is the sum of the discounted cash flows to 

the industry from the base year through the end of the analysis period (2012 through 

2047). Using a real discount rate of 8.5 percent, DOE estimates that the INPV for 

manufacturers of dishwashers is $637.5 million in 2010$. Under today’s standards, DOE 

expects that manufacturers may lose up to 13.3 percent of their INPV, which is 

approximately $84.6 million. Additionally, based on DOE’s interviews with the

manufacturers of dishwashers, DOE does not expect any plant closings or significant loss 

of employment as a result of today’s standards. 

2 DOE Docket No. EERE–2011–BT–STD–0060, Comment 1. 

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C. National Benefits 

DOE’s analyses indicate that today’s standards would save a significant amount 

of energy and water in 2013–2047 ―an estimated 0.07 quads of cumulative energy, and 

0.14 trillion gallons of water. In addition, DOE expects the energy savings from today’s

standards to eliminate the need for approximately 0.001 gigawatts (GW) of generating 

capacity by 2047. Comment [A1]: Change recommended by OIRA. 

The cumulative national net present value (NPV) of total consumer costs and 

savings of today’s standards in 2010$ ranges from $0.08 billion (at a 7-percent discount 

rate) to $0.46 billion (at a 3-percent discount rate). This NPV expresses the estimated 

total value of future operating-cost savings minus the estimated increased product costs 

for products purchased in 2013–2047, discounted to 20112012. 

In addition, today’s standards would have significant environmental benefits. The 

energy savings would result in cumulative greenhouse gas emission reductions of 

approximately 4.06 million metric tons (Mt) of carbon dioxide (CO2) from 2013 through 

2047. During this period, the standards would also result in emissions reductions3 of 

approximately 3.54 thousand tons of nitrogen oxides (NOX) and zero tons of mercury 

(Hg).4 

3 DOE calculates emissions reductions relative to the most recent version of the Annual Energy Outlook 

(AEO) Reference case forecast. As noted in TSD chapter 15, this forecast accounts for regulatory emissions 

reductions from in-place regulations at the time of preparation of the AEO, including the Clean Air 

Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), but not the Clean Air Mercury Rule (CAMR, 70 FR 

28606 (May 18, 2005)). Subsequent regulations, including the recently finalized CAIR replacement rule, 

the Cross-State Air Pollution rule issued on July 6, 2011, will appear in the forecast for future rulemakings. 

4 Results for NOX and Hg are presented in short tons. One short ton equals 2000 lbs. 

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The value of the CO2 reductions is calculated using a range of values per metric 

ton of CO2 (otherwise known as the Social Cost of Carbon, or SCC) developed by a 

recent interagency process. The derivation of the SCC values is discussed in section 

IV.M. DOE estimates that the net present monetary value of the CO2 emissions 

reductions is between $16 and $242 million, expressed in 2010$ and discounted to 

20112012. DOE also estimates that the net present monetary value of the NOX emissions 

reductions, expressed in 2010$ and discounted to 20112012, is $0.5 to $5.02.8 million at 

a 7-percent discount rate, and $0.9 to $9.5.2 million at a 3-percent discount rate.5 Comment [A2]: Changes recommended by 

OIRA. 

Table I.3 summarizes the national economic costs and benefits expected to result 

from today’s standards for residential dishwashers. 

5 DOE is aware of multiple agency efforts to determine the appropriate range of values to use 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 monetizes Hg emissions reductions 

in its rulemakings. 

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Table I.3. Summary of National Economic Benefits and Costs of Residential 

Dishwasher Energy Conservation Standards 

Category Present Value 

Million 2010$ 

Discount 

Rate 

Benefits 

Operating Cost Savings 600 7% 

1341 3% 

CO2 Reduction Monetized Value 

(at $4.9/t)* 16.09 5% 

CO2 Reduction Monetized Value 

(at $22.3/t)* 79.49 3% 

CO2 Reduction Monetized Value 

(at $36.5/t)* 133.5 2.5% 

CO2 Reduction Monetized Value 

(at $67.6/t)* 242.5 3% 

NOX Reduction Monetized Value 

(at $4502,537/ton)*)** 

0.492.76 7% 

0.935.24 3% 

NOX Reduction Monetized Value 

(at $4,623/ton)* 

5.03 7% 

9.54 3% 

Total Benefits† 683 7% 

1426 3% 

Costs 

Incremental Installed Costs 522 7% 

881 3% 

Net Benefits 

Including CO2 and NOX† 161 7% 

545 3% 

* The CO2 values represent global monetized values of the SCC in 2010 under several scenarios. The 

values of $4.9, $22.3, and $36.5 per metric ton (t) are the averages of SCC distributions calculated using 

5%, 3%, and 2.5% discount rates, respectively. The value of $67.6/t represents the 95th percentile of the 

SCC distribution calculated using a 3% discount rate. 

Comment [A3]: Change recommended by OIRA. 

Comment [A4]: Change recommended by OIRA. 

Comment [A5]: Change recommended by OIRA. 

Comment [A6]: Change recommended by OIRA. 

** The range of results for incremental product costs reflects the range of product price forecasts discussed 

in section IV.G.3. 

** The value represents the average of the low and high NOX values used in DOE’s analysis. Comment [A7]: Change recommended by OIRA. 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount 

rate, and the average of the low and high NOX values used in DOE’s analysis.. 

The benefits and costs of today’s standards, for products sold in 2013–2047, can 

also be expressed in terms of annualized values. The annualized monetary values are the 

Comment [A8]: Change recommended by OIRA. 

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sum of (1) the annualized national economic value, expressed in 2010$, of the benefits 

from operating the product (consisting primarily of operating cost savings from using less 

energy, minus increases in equipment purchase and installation costs, which is another 

way of representing consumer NPV, plus (2) the annualized monetary value of the 

benefits of emission reductions, including CO2 emission reductions.6 

Although adding the value of consumer savings to the values of emission 

reductions provides a valuable perspective, two issues should be considered. First, the 

national operating cost savings are domestic U.S. consumer monetary savings that occur 

as a result of market transactions, while the value of CO2 reductions is based on a global 

value. Second, the assessments of operating cost savings and CO2 savings are performed 

with different methods that use quite different time frames for analysis. The national 

operating cost savings is measured for the lifetime of residential dishwashers shipped in 

2013–2047. The SCC values, on the other hand, reflect the present value of future 

climate-related impacts resulting from the emission of one metric ton of carbon dioxide 

in each year. These impacts continue well beyond 2100. 

6 DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized 

values. First, DOE calculated a present value in 20112012, the year used for discounting the NPV of total 

consumer costs and savings, for the time-series of costs and benefits using discount rates of 3 and 7 percent 

for all costs and benefits except for the value of CO2 reductions. For the latter, DOE used a range of 

discount rates, as shown in Table I.3.From the present value, DOE then calculated the fixed annual 

payment over a 30-year period, starting in 2013, that yields the same present value. This payment includes 

benefits to consumers which accrue after 2047 from the dishwashers purchased from 2013 to 2047. Costs 

incurred by manufacturers, some of which may be incurred prior to 2013 in preparation for the rule, are 

indirectly included as part of incremental equipment costs. The extent of these costs and benefits depends 

on the projected price trends of dishwashers because consumer demand of dishwashers is a function of 

dishwasher prices. The fixed annual payment is the annualized value. Although DOE calculated annualized 

values, this does not imply that the time-series of cost and benefits from which the annualized values were 

determined is a steady stream of payments. 

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Estimates of annualized benefits and costs of today’s standards are shown in 

Table I.4. (All monetary values below are expressed in 2010$.) The results under the 

primary estimate are as follows. Using a 7-percent discount rate for benefits and costs 

other than CO2 reduction, for which DOE used a 3-percent discount rate along with the 

SCC series corresponding to a value of $22.3/ton in 2010, the cost of the standards for 

dishwashers in today’s rule is $46 million per year in increased equipment costs, while 

the benefits are $53 million per year in reduced equipment operating costs, $3.9 million 

in CO2 reductions, and $0.24 million in reduced NOX emissions. In this case, the net 

benefit amounts to $11 million per year. Using a 3-percent discount rate for all benefits 

and costs and the SCC series corresponding to a value of $22.3/ton in 2010, the cost of 

the standards for dishwashers in today’s rule is $44 million per year in increased 

equipment costs, while the benefits are $66 million per year in reduced operating costs, 

$3.9 million in CO2 reductions, and $0.26 million in reduced NOX emissions. In this case, 

the net benefit amounts to $27 million per year. 

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Table I.4. Annualized Benefits and Costs of Amended Standards for Residential 

Dishwashers Sold in 2013–2047* 

Discount Rate 

Primary 

Estimate* 

Low Net 

Benefits 

Estimate* 

High Net 

Benefits 

Estimate* 

Monetized (million 2010$/year) 

Benefits 

Operating Cost Savings 

7% 53 48 59 

3% 66 59 75 

CO2 Reduction at $4.9/t** 5% 1.1 1.0 1.3 

CO2 Reduction at $22.3/t** 3% 3.9 3.5 4.7 

CO2 Reduction at $36.5/t** 2.5% 6.1 5.4 7.2 

CO2 Reduction at $67.6/t** 3% 12.0 10.8 14.2 

NOX Reduction at 

$2,537/ton** 

7% 0.24 0.23 0.27 

3% 0.26 0.24 0.30 

Total†

7% plus CO2 

range 

54 to 65 49 to 59 60 to 73 

7% 57 52 64 

3% plus CO2 

range 

68 to 78 60 to 70 76 to 89 

3% 70 63 80 

Costs 

Incremental Product Costs 

7% 46 44 43 

3% 44 41 40 

Total Net Benefits 

Total†

7% plus CO2 

range 

8 to 19 6 to 16 17 to 30 

7% 11 8 20 

3% plus CO2 

range 

24 to 35 19 to 29 37 to 49 

3% 27 22 40 

* The results include benefits to consumers which accrue after 2047 from the dishwashers purchased from 

2013 through 2047. Costs incurred by manufacturers, some of which may be incurred prior to 2013 in 

preparation for the rule, are indirectly included as part of incremental equipment costs. The extent of the 

costs and benefits will depend on the projected price trends of dishwashers, because the consumer demand 

for dishwashers is a function of dishwasher prices. The Primary, Low Benefits, and High Benefits 

Estimates utilize forecasts of energy prices and housing starts from the AEO2011 Reference case, Low 

Estimate, and High Estimate, respectively. In addition, incremental product costs reflect a medium decline 

rate for projected product price trends in the Primary Estimate, a low decline rate for projected product 

price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the 

High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.G.3. 

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** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under 

several scenarios. The values of $4.9, $22.3, and $36.5 per ton are the averages of SCC distributions 

calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.6 per 

ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The 

value for NOX (in 2010$) is the average of the low and high values used in DOE’s analysis. 

† Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 

3-percent discount rate, which is $22.3/t in 2010 (in 2010$). In the rows labeled as “7% plus CO2 range”

and “3% plus CO2 range,” the operating cost and NOX benefits are calculated using the labeled discount 

rate, and those values are added to the full range of CO2 values. 

D. Conclusion 

Based on the analyses culminating in this final rule, DOE found the benefits to the 

nation of the standards (energy savings, water savings, favorable consumer LCC savings 

and payback period, positive NPV of consumer benefit, and emission reductions) 

outweigh the burdens (profit margin impacts that could result in a reduction in INPV and 

increased operational risk for manufacturers). DOE has concluded that the standards in 

today’s final rule represent the maximum improvement in energy efficiency that is

technologically feasible and economically justified, and would result in significant 

conservation of energy. DOE further notes that residential dishwashers achieving these 

standard levels are already commercially available. 

II. Introduction 

The following section briefly discusses the statutory authority underlying today’s 

final rule, as well as some of the relevant historical background related to the 

establishment of standards for residential dishwashers. 

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A. Authority 

Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the 

Act), Pub. L. 94-163 (42 U.S.C. 6291-6309, as codified) established the Energy 

Conservation Program for Consumer Products Other Than Automobiles,7 a program 

covering most major household appliances (collectively referred to as “covered 

products”), which includes the residential dishwashers that are the subject of this 

rulemaking. (42 U.S.C. 6292(a)(6)) EPCA prescribed energy conservation standards for 

these products (42 U.S.C. 6295(g)(1)), and directed DOE to conduct two cycles of 

rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(g)(4)) DOE 

also notes that under 42 U.S.C. 6295(m), DOE must periodically review its energy 

conservation standards for covered products. 

Pursuant to EPCA, DOE’s energy conservation program for covered products 

consists essentially of four parts: (1) testing; (2) labeling; (3) the establishment of Federal 

energy conservation standards; and (4) certification and enforcement procedures. The 

Federal Trade Commission (FTC) is primarily responsible for labeling, and DOE 

implements the remainder of the program. Subject to certain criteria and conditions, DOE 

is required to develop test procedures to measure the energy efficiency, energy use, or 

estimated annual operating cost of each covered product. (42 U.S.C. 6293) Manufacturers 

of covered products must use the prescribed DOE test procedure as the basis for 

certifying to DOE that their products comply with the applicable energy conservation 

standards adopted under EPCA and when making representations to the public regarding 

the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, 

7 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. 

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DOE must use these test procedures to determine whether the products comply with 

standards adopted pursuant to EPCA. Id. The DOE test procedure for residential 

dishwashers currently appear at title 10 of the Code of Federal Regulations (CFR) part 

430, subpart B, appendix C. 

DOE must follow specific statutory criteria for prescribing amended standards for 

covered products. As indicated above, any amended standard for a covered product must 

be designed to achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 

Furthermore, DOE may not adopt any standard that would not result in the significant 

conservation of energy. (42 U.S.C. 6295(o)(3)) In deciding whether an amended standard 

is economically justified, DOE must determine whether the benefits of the standard 

exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after 

receiving comments on the proposed standard and considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the standard on manufacturers and consumers of the 

products subject to the standard; 

2. The savings in operating costs throughout the estimated average life of the 

covered products in the type (or class) compared to any increase in the price, initial 

charges, or maintenance expenses for the covered products that are likely to result from 

the imposition of the standard; 

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3. The total projected amount of energy, or as applicable, water, savings likely to 

result directly from the imposition of the standard; 

4. Any lessening of the utility or the performance of the covered products likely to 

result from the imposition of the standard; 

5. The impact of any lessening of competition, as determined in writing by the 

Attorney General, that is likely to result from the imposition of the standard; 

6. The need for national energy and water conservation; and 

7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(I)–(VII)) 

EPCA allows DOE to issue a final rule (hereinafter referred to as a “direct final

rule”) establishing an energy conservation standard on receipt of a statement submitted 

jointly by interested persons that are fairly representative of relevant points of view 

(including representatives of manufacturers of covered products, States, and efficiency 

advocates) as determined by the Secretary, that contains recommendations with respect to 

an energy conservation standard that are in accordance with the provisions of 42 U.S.C. 

6295(o). A notice of proposed rulemaking (NOPR) that proposes an identical energy 

efficiency standard must be published simultaneously with the final rule, and DOE must 

provide a public comment period of at least 110 days. 42 U.S.C. 6295(p)(4). Not later 

than 120 days after issuance of the direct final rule, if one or more adverse comments or 

an alternative joint recommendation are received relating to the direct final rule, the 

Secretary must determine whether the comments or alternative recommendation may 

provide a reasonable basis for withdrawal under 42 U.S.C. 6295(o) or other applicable 

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law. If the Secretary makes such a determination, DOE must withdraw the direct final 

rule and proceed with the simultaneously published notice of proposed rulemaking. DOE 

must publish in the Federal Register the reason why the direct final rule was withdrawn. 

Id. 

Furthermore, EPCA, contains what is known as an “anti-backsliding” provision,

which prevents the Secretary from prescribing any amended standard that either increases 

the maximum allowable energy use or decreases the minimum required energy efficiency 

of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an 

amended or new standard if interested persons have established by a preponderance of 

the evidence that the standard is likely to result in the unavailability in the United States 

of any covered product type (or class) of performance characteristics (including 

reliability), features, sizes, capacities, and volumes that are substantially the same as 

those generally available in the United States. (42 U.S.C. 6295(o)(4)) 

EPCA also establishes a rebuttable presumption that a standard is economically 

justified if the Secretary finds that the additional cost to the consumer of purchasing a 

product complying with an energy conservation standard level will be less than three 

times the value of the energy savings during the first year that the consumer will receive 

as a result of the standard, as calculated under the applicable test procedure. See 42 

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

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Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when promulgating a 

standard for a type or class of covered product that has two or more subcategories. DOE 

must specify a different standard level than that which applies generally to such type or 

class of products for any group of covered products that have the same function or 

intended use, if products within such group – (A) consume a different kind of energy 

from that consumed by other covered products within such type (or class); or (B) have a 

capacity or other performance-related feature which other products within such type (or 

class) do not have and such feature justifies a higher or lower standard than applies or 

will apply to the other products within that type or class. Id. In determining whether a 

performance-related feature justifies a different standard for a group of products, DOE 

must consider such factors as the utility to the consumer of such a feature and other 

factors DOE deems appropriate. Id. Any rule prescribing such a standard must include an 

explanation of the basis on which such higher or lower level was established. (42 U.S.C. 

6295(q)(2)) 

Federal energy conservation requirements generally supersede State laws or 

regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 

6297(a)–(c)) DOE may, however, grant waivers of Federal preemption for particular 

State laws or regulations, in accordance with the procedures and other provisions set forth 

under 42 U.S.C. 6297(d)). 

Any final rule for new or amended energy conservation standards promulgated 

after July 1, 2010, must address standby mode and off mode energy use. (42 U.S.C. 

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6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that 

date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 

6295(o)), incorporate standby mode and off mode energy use into the standard, or, if that 

is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 

6295(gg)(3)(A)-(B)) The standards established in today’s direct final rule address standby 

and off mode energy use. 

DOE notes that it is also required to amend its test procedures to integrate 

measures of standby mode and off mode energy consumption into the overall energy 

efficiency, energy consumption, or other energy descriptor for each covered product 

unless the current test procedure already fully accounts for and incorporates standby and 

off mode energy consumption or such integration is technically infeasible. (42 U.S.C. 

6295(gg)(2)) DOE is currently considering amendments to the test procedure at appendix 

C to incorporate measures of off mode energy consumption in addition to the existing 

measures of standby mode energy use. 75 FR 75290 (Dec. 2, 2010); 76 FR 58346 Sept. 

20, 2011) 

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued 

on January 18, 2011 (76 FR 3281, Jan. 21, 2011). Executive Order 13563 is supplemental 

to and explicitly reaffirms the principles, structures, and definitions governing regulatory 

review established in Executive Order 12866. To the extent permitted by law, agencies 

are required by Executive Order 13563 to: (1) propose or adopt a regulation only upon a 

reasoned determination that its benefits justify its costs (recognizing that some benefits 

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and costs are difficult to quantify); (2) tailor regulations to impose the least burden on 

society, consistent with obtaining regulatory objectives, taking into account, among other 

things, and to the extent practicable, the costs of cumulative regulations; (3) select, in 

choosing among alternative regulatory approaches, those approaches that maximize net 

benefits (including potential economic, environmental, public health and safety, and other 

advantages; distributive impacts; and equity); (4) to the extent feasible, specify 

performance objectives, rather than specifying the behavior or manner of compliance that 

regulated entities must adopt; and (5) identify and assess available alternatives to direct 

regulation, including providing economic incentives to encourage the desired behavior, 

such as user fees or marketable permits, or providing information upon which choices can 

be made by the public. 

DOE emphasizes as well that Executive Order 13563 requires agencies to use the 

best available techniques to quantify anticipated present and future benefits and costs as 

accurately as possible. In its guidance, the Office of Information and Regulatory Affairs 

has emphasized that such techniques may include identifying changing future compliance 

costs that might result from technological innovation or anticipated behavioral changes. 

For the reasons stated in the preamble, DOE believes that today’s direct final rule is 

consistent with these principles, including that, to the extent permitted by law, agencies 

adopt a regulation only upon a reasoned determination that its benefits justify its costs 

and select, in choosing among alternative regulatory approaches, those approaches that 

maximize net benefits. 

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Consistent with EO 13563, and the range of impacts analyzed in this rulemaking, 

the energy conservation standards adopted herein by DOE achieve maximum net 

benefits. 

B. Background 

1. EISA 2007 Standards 

EPCA, as amended by EISA 2007, prescribed energy conservation standards for 

residential dishwashers manufactured on or after January 1, 2010. 42 U.S.C. 6295(g)(10) 

These standards are set forth in Table II.1. 

Table II.1 Energy Conservation Standards for Residential Dishwashers Established 

by EISA 2007 

Product Class Annual Energy Use 

(kWh/year) 

Per-Cycle Water 

Consumption(gallons/cycle) 

Standard 355 6.5 

Compact 260 4.5 

The EPCA amendments in EISA 2007 also require DOE to publish a final rule no 

later than January 1, 2015 determining whether to amend the standards in effect for 

dishwashers manufactured on or after January 1, 2018. (42 U.S.C. 6295(g)(10)(B)(i)) 

Today’s final rule fulfills this statutory requirement.

2. History of Standards Rulemaking for Residential Dishwashers 

The National Appliance Energy Conservation Act of 1987 (NAECA), Pub. L. 

100-12 (March 17, 1989), amended EPCA and required that dishwashers be equipped 

with an option to dry without heat. NAECA further required that DOE conduct two 

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cycles of rulemakings to determine if amended standards are justified. (42 U.S.C. 

6295(g)(1) and (4)) 

On May 14, 1991, DOE issued a final rule establishing performance standards for 

dishwashers to complete the first required rulemaking cycle (56 FR 22250). Compliance 

with the new standards, codified at 10 CFR 430.32(f), was required on May 14, 1994. 

DOE then conducted a second standards rulemaking for dishwashers. DOE issued 

an advance notice of proposed rulemaking (ANOPR) on November 14, 1994 to consider 

amending the energy conservation standards for clothes washers, dishwashers, and 

clothes dryers. 59 FR 56423. Subsequently, DOE published a Notice of Availability of 

the Rulemaking Framework for Commercial Clothes Washers and Residential 

Dishwashers, Dehumidifiers, and Cooking Products. 71 FR 15059 (Mar. 27, 2006). On 

November 15, 2007, DOE published a second ANOPR (hereafter, the November 2007 

ANOPR) addressing energy conservation standards for these products. 72 FR 64432. On 

December 19, 2007, Congress enacted EISA 2007, which, among other things, 

established maximum energy and water use levels for residential dishwashers 

manufactured on or after January 1, 2010. (42 U.S.C. 6295(g)(10)) DOE codified the 

statutory standards for these products in a final rule published March 23, 2009. 74 FR 

12058. 

EPCA, as amended by EISA 2007, further requires that DOE publish a final rule 

no later than January 1, 2015, to determine whether to amend the standards in effect for 

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dishwashers manufactured on or after January 1, 2018. (42 U.S.C. 6295(g)(10)(B)(i)) 

This rulemaking fulfills this statutory requirement. 

On July 30, 2010, DOE received the Joint Petition, a comment submitted by 

groups representing manufacturers (the Association of Home Appliance Manufacturers 

(AHAM), Whirlpool Corporation (Whirlpool), General Electric Company (GE), 

Electrolux, LG Electronics, Inc. (LG), BSH Home Appliances (BSH), Alliance Laundry 

Systems (ALS), Viking Range, Sub-Zero Wolf, Friedrich A/C, U-Line, Samsung, Sharp 

Electronics, Miele, Heat Controller, AGA Marvel, Brown Stove, Haier, Fagor America, 

Airwell Group, Arcelik, Fisher & Paykel, Scotsman Ice, Indesit, Kuppersbusch, Kelon, 

and DeLonghi); energy and environmental advocates (American Council for an Energy 

Efficient Economy (ACEEE), Appliance Standards Awareness Project (ASAP), Natural 

Resources Defense Council (NRDC), Alliance to Save Energy (ASE), Alliance for Water 

Efficiency (AWE), Northwest Power and Conservation Council (NPCC), and Northeast 

Energy Efficiency Partnerships (NEEP)); and consumer groups (Consumer Federation of 

America (CFA) and the National Consumer Law Center (NCLC)) (collectively, the “Joint

Petitioners”). The Joint Petitioners recommended specific energy conservation standards 

for residential dishwashers that, in their view, would satisfy the EPCA requirements in 42 

U.S.C. 6295(o). Earthjustice submitted a comment affirming its support for the Joint 

Petition. (Earthjustice, No. 2 at p. 1)8 

8 A notation in the form “Earthjustice, No. 2 at p. 1” identifies a written comment that DOE has received

and has included in the docket of the standards rulemaking for residential dishwashers (Docket No. EERE2011-BT-STD-0060). This particular notation refers to a comment (1) submitted by Earthjustice, (2) in 

document number 2 in the docket of that rulemaking, and (3) appearing on page 1 of document number 2. 

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After careful consideration of the Joint Petition containing a consensus 

recommendation for amended energy conservation standards for residential dishwashers, 

the Secretary has determined that this “Consensus Agreement” has been submitted by 

interested persons who are fairly representative of relevant points of view on this matter. 

Congress provided some guidance within the statute itself by specifying that 

representatives of manufacturers of covered products, States, and efficiency advocates are 

relevant parties to any consensus recommendation. (42 U.S.C. 6295(p)(4)(A)) As 

delineated above, the Consensus Agreement was signed and submitted by a broad crosssection of the manufacturers who produce the subject products, their trade associations, 

and environmental, energy efficiency and consumer advocacy organizations. Although 

States were not signatories to the Consensus Agreement, they did not express any 

opposition to it. Moreover, DOE does not read the statute as requiring absolute agreement 

among all interested parties before the Department may proceed with issuance of a direct 

final rule. By explicit language of the statute, the Secretary has discretion to determine 

when a joint recommendation for an energy or water conservation standard has met the 

requirement for representativeness (i.e., “as determined by the Secretary”). Accordingly, 

DOE will consider each consensus recommendation on a case-by-case basis to determine 

whether the submission has been made by interested persons fairly representative of 

relevant points of view. 

Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also determine whether a 

jointly-submitted recommendation for an energy or water conservation standard is in 

accordance with 42 U.S.C. 6295(o) or 42 U.S.C. 6313(a)(6)(B), as applicable. This 

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determination is exactly the type of analysis that DOE conducts whenever it considers 

potential energy conservation standards pursuant to EPCA. DOE applies the same 

principles to any consensus recommendations it may receive to satisfy its statutory 

obligation to ensure that any energy conservation standard that it adopts achieves the 

maximum improvement in energy efficiency that is technologically feasible and 

economically justified and will result in significant conservation of energy. Upon review, 

the Secretary determined that the Consensus Agreement submitted in the instant 

rulemaking comports with the standard-setting criteria set forth under 42 U.S.C. 6295(o). 

Accordingly, the consensus agreement levels were included as trial standard level (TSL) 

2 in today’s rule for residential dishwashers, the details of which are discussed at relevant 

places throughout this document. The definition of the TSLs considered in this direct 

final rule is discussed in section V.A. 

In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have been satisfied, the 

Secretary has determined that it is appropriate to adopt amended energy conservation 

standards for residential dishwashers through this direct final rule. 

As required by the same statutory provision, DOE is also simultaneously 

publishing a NOPR which proposes the identical standard levels contained in this direct 

final rule and is providing for a 110-day public comment period. DOE will consider 

whether any comment received during this comment period is sufficiently “adverse” as to 

provide a reasonable basis for withdrawal of the direct final rule and continuation of this 

rulemaking under the NOPR. Typical of other rulemakings, it is the substance, rather than 

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the quantity, of comments that will ultimately determine whether a direct final rule will 

be withdrawn. To this end, the substance of any adverse comment(s) received will be 

weighed against the anticipated benefits of the Consensus Agreement and the likelihood 

that further consideration of the comment(s) would change the results of the rulemaking. 

DOE notes that to the extent an adverse comment had been previously raised and 

addressed in the rulemaking proceeding, such a submission will not typically provide a 

basis for withdrawal of a direct final rule. 

3. Issues on which DOE seeks Comment 

As stated previously, in promulgating today’s direct final rule pursuant to 42 

U.S.C. 6295(p)(4), DOE carefully considered the Joint Petition submitted to DOE, which 

contained a consensus recommendation for amended energy conservation standards for 

residential dishwashers. For the reasons stated in this direct final rule, the Secretary 

determined that the “Consensus Agreement” was submitted by interested persons who are

fairly representative of relevant points of view on this matter. The Secretary also 

determined, for the reasons set forth in this direct final rule, that the standards contained 

in the Consensus Agreement comport with the standard-setting criteria set forth under 42 

U.S.C. 6295(o). Therefore, the Secretary promulgates this direct final rule establishing 

the amended energy conservation standards for residential dishwashers. 

As required by EPCA, DOE is also simultaneously publishing a NOPR and 

providing for a 110-day public comment period. 42 U.S.C. 4295(p)(4). Should DOE 

determine to proceed with the NOPR, or to gather additional data for future energy 

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conservation standards activities for residential dishwashers, DOE will consider any 

comments and data received on the direct final standards. Although comments are 

welcome on all aspects of this rulemaking, DOE is particularly interested in comments on 

the following: 

(1) Impacts of the standards that may lessen or improve the utility or performance 

of the covered products. These impacts may include increased cycle times to 

wash dishware, ability to achieve good wash performance (e.g., cleaning, 

rinsing) and drying performance, increase in noise, and other potential 

impacts. As discussed in section IV.I.3, manufacturers noted in interviews 

that any potential utility impacts may be more significant at efficiency levels 

above those adopted in today’s direct final rule. DOE also seeks information 

on utility impacts at higher efficiency levels and will consider such 

information in any future rulemaking for dishwashers. 

(2) The 2013 compliance date for the proposed standards and whether this 

compliance date adequately considers the typical dishwasher model design 

cycle for manufacturers. 

(3) Whether repair costs for residential dishwashers would increase at the 

efficiency levels indicated in today’s rule due to any changes in the design and 

materials and components used in order to comply with the new efficiency 

standards. 

(4) Where there would be any anticipated changes in the consumption of 

complementary goods (e.g., dishwasher detergent, rinse aid) that may result 

from the proposed standards. 

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(5) The 215 cycles per year estimate of consumer usage for residential 

dishwashers, as well as the estimated 1-hour cycle time, which includes all 

cycles available on the unit. 

(6) The product lifetime for dishwashers assumed in the analysis and the method 

used to derive the mean age of 15 years. 

DOE has prepared a technical support document (TSD) in support of this direct 

final rule. The TSD, which is available at the rulemaking website,9 provides an overview 

of the activities DOE undertook in developing standards for residential dishwashers. It 

presents and describes in detail each analysis DOE performed, including descriptions of 

inputs, sources, methodologies, and results. These analyses are as follows: 

	 A market and technology assessment addresses the scope of this rulemaking, 

identifies the dishwasher product classes, characterizes the markets for the 

products, and reviews techniques and approaches for improving their efficiency. 

	 A screening analysis reviews technology options to improve the efficiency of 

residential dishwashers and weighs those options against DOE’s four prescribed 

screening criteria. 

 An engineering analysis develops the relationship between increased 

manufacturer price and increased efficiency. 

 A markups analysis establishes markups for converting manufacturer prices to 

customer product costs. 

9 The rulemaking website for residential dishwashers is located at 

www1.eere.energy.gov/buildings/appliance_standards/residential/dishwashers.html 

Comment [A9]: Changes recommended by 

OIRA. 

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	 An energy use analysis generates energy-use estimates for residential 

dishwashers as a function of efficiency levels. 

	 A life-cycle cost analysis calculates the effects of standards on individual 

customers and compares the life-cycle costs (LCC) and payback period (PBP) of 

products with and without higher efficiency standards. 

	 A shipments analysis forecasts shipments with and without higher efficiency 

standards. 

	 A national impact analysis forecasts the national energy savings (NES), and the 

national net present value of total consumer costs and savings, expected to result 

from specific, potential energy conservation standards for residential 

dishwashers. 

	 A consumer subgroup analysis discusses the effects of standards on different 

subgroups of consumers. 

	 A manufacturer impact analysis discusses the effects of standards on the finances 

and profitability of product manufacturers. 

	 An employment impact analysis discusses the indirect effects of standards on 

national employment. 

	 A utility impact analysis discusses the effects of standards on electric and gas 

utilities. 

	 An environmental assessmentAn emissions analysis discusses the effects of 

standards on three pollutants—sulfur dioxide (SO2), nitrogen oxides (NOx), and 

mercury—as well as carbon dioxide emissions. Comment [A10]: Change recommended by 

OIRA. 

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	 A regulatory impact analysis discusses the impact of non-regulatory alternatives 

to efficiency standards. 

3.4. Test Procedure History 

As discussed in section II.A, the DOE test procedure for residential dishwashers is 

found at Title 10 of the CFR, part 430, subpart B, appendix C. DOE originally 

established its test procedure for dishwashers in 1977. 42 FR 39964 (Aug. 8, 1977). In 

1983, DOE amended the test procedure to revise the representative average-use cycles to 

more accurately reflect consumer use and to address dishwashers that use 120 degrees 

Fahrenheit (°F) inlet water. 48 FR 9202 (March 3, 1983). DOE amended the test 

procedure again in 1984 to redefine the term “water heating dishwasher.” 49 FR 46533 

(Nov. 27, 1984). In 1987, DOE amended the test procedure to address models that use 50 

°F inlet water. 52 FR 47549 (Dec. 15, 1987). In 2001, DOE revised the test procedure’s 

testing specifications to improve testing repeatability, changed the definitions of 

“compact dishwasher” and “standard dishwasher,” and reduced the average number of

use cycles per year from 322 to 264. 66 FR 65091, 65095–97 (Dec. 18, 2001). In 2003, 

DOE again revised the test procedure to more accurately measure dishwasher efficiency, 

energy use, and water use. The 2003 dishwasher test procedure amendments included the 

following revisions: (1) the addition of a method to rate the efficiency of soil-sensing 

products; (2) the addition of a method to measure standby power; and (3) a reduction in 

the average-use cycles per year from 264 to 215. 68 FR 51887, 51899–903 (August 29, 

2003). The current version of the test procedure includes provisions for determining 

estimated annual energy use (EAEU), estimated annual operating cost (EAOC), energy 

32 
 

 

 

 

 

 

 

 

 

 

 

factor (EF) expressed in cycles per kilowatt-hour (kWh), and water consumption 

expressed in gallons per cycle. 10 CFR 430.23(c). As discussed in section II.A, DOE is 

currently considering amendments the test procedure to incorporate measures of off mode 

energy consumption in addition to the existing measures of standby mode energy use. 

III. General Discussion 

A. Product Classes and Scope of Coverage 

When evaluating and establishing energy conservation standards, DOE divides 

covered products into product classes by the type of energy used or by capacity or other 

performance-related features that justifies a different standard. In making a determination 

whether a performance-related feature justifies a different standard, DOE must consider 

such factors as the utility to the consumer of the feature and other factors DOE 

determines are appropriate. (42 U.S.C. 6295(q)) 

Existing energy conservation standards divide residential dishwashers into two 

product classes based on the capacity, i.e., the number of place settings and serving 

pieces that can be loaded in the product. 

 Standard (capacity equal to or greater than eight place settings plus six 

serving pieces) 

 Compact (capacity less than eight place settings plus six serving pieces) 

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The Joint Petition proposes energy conservation standard levels for standard and 

compact product classes based on the same capacity definitions. (Joint Petition, No. 1 at 

p. 11) In this final rule, DOE maintains the existing standard and compact product classes 

for residential dishwashers. Based on a survey of products available on the market, DOE 

determined that compact dishwasher provide unique utility in their countertop or drawer 

configurations. 

B. Technological Feasibility 

1. General 

In each standards rulemaking, DOE conducts a screening analysis based on 

information gathered on all current technology options and prototype designs that could 

improve the efficiency of the products or equipment that are the subject of the 

rulemaking. As the first step in such an analysis, DOE develops a list of technology 

options for consideration in consultation with manufacturers, design engineers, and other 

interested parties. DOE then determines which of those means for improving efficiency 

are technologically feasible. DOE considers technologies incorporated in commercially 

available products or in working prototypes to be technologically feasible. 10 CFR 430, 

subpart C, appendix A, section 4(a)(4)(i). 

After DOE has determined that particular technology options are technologically 

feasible, it further evaluates each technology option in light of the following additional 

screening criteria: (1) practicability to manufacture, install, or service; (2) adverse 

impacts on product utility or availability; and (3) adverse impacts on health or safety. 

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Section IV.B of this notice discusses the results of the screening analysis for residential 

dishwashers, particularly the designs DOE considered, those it screened out, and those 

that are the basis for the TSLs in this rulemaking. For further details on the screening 

analysis for this rulemaking, see chapter 4 of the direct final rule TSD. 

2. Maximum Technologically Feasible Levels 

When DOE proposes to adopt an amended standard for a type or class of covered 

product, it must determine the maximum improvement in energy efficiency or maximum 

reduction in energy use that is technologically feasible for such product. (42 U.S.C. 

6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum 

technologically feasible (“max-tech”) improvements in energy efficiency for residential 

dishwashers, using the design parameters for the most efficient products available on the 

market or in working prototypes. (See chapter 5 of the direct final rule TSD.) The maxtech levels that DOE determined for this rulemaking are described in section IV.C.2 of 

this final rule. 

C. Energy Savings 

1. Determination of Savings 

DOE used its national impact analysis (NIA) spreadsheet model to estimate 

energy savings from amended standards for the products that are the subject of this 

rulemaking.10 For each TSL, DOE forecasted energy savings beginning in the year that 

manufacturers would be required to comply with amended standards, and ending in 2047. 

DOE quantified the energy savings attributable to each TSL as the difference in energy 

10 The NIA spreadsheet model is described in section IV.G of this notice. 

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consumption between the standards case and the base case. The base case represents the 

forecast of energy consumption in the absence of amended mandatory efficiency 

standards, and considers market demand for more efficient products. 

The NIA spreadsheet model calculates the electricity savings in site energy 

expressed in kilowatt-hours (kWh). Site energy is the energy directly consumed by 

appliances at the locations where they are used. DOE reports national energy savings on 

an annual basis in terms of the aggregated source (primary) energy savings, which is the 

savings in the energy that is used to generate and transmit the site energy. (See chapter 10 

of the direct final rule TSD). To convert site energy to source energy, DOE derived 

annual conversion factors from the model used to prepare the Energy Information 

Administration’s (EIA) Annual Energy Outlook 2011 (AEO2011). 

2. Significance of Savings 

As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting a standard 

for a covered product unless such standard would result in “significant” energy savings.

Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, in 

Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), 

indicated that Congress intended “significant” energy savings in this context to be

savings that were not “genuinely trivial.” The energy savings for all of the TSLs

considered in this rulemaking (presented in section V.3.a) are nontrivial, and, therefore, 

DOE considers them “significant” within the meaning of section 325 of EPCA.

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D. Economic Justification 

1. Specific Criteria 

As noted in section II.A, EPCA provides seven factors to be evaluated in 

determining whether a potential energy conservation standard is economically justified. 

(42 U.S.C. 6295(o)(2)(B)(i)) The following sections discuss how DOE has addressed 

each of those seven factors in this rulemaking. 

a. Economic Impact on Manufacturers and Consumers 

In determining the impacts of an amended standard on manufacturers, DOE first 

uses an annual cash-flow approach to determine the quantitative impacts. This step 

includes both a short-term assessment—based on the cost and capital requirements during 

the period between when a regulation is issued and when entities must comply with the 

regulation—and a long-term assessment over a 30-year analysis period. The industrywide impacts analyzed include industry net present value (INPV), which values the 

industry on the basis of expected future cash flows; cash flows by year; changes in 

revenue and income; and other measures of impact, as appropriate. Second, DOE 

analyzes and reports the impacts on different types of manufacturers, including impacts 

on small manufacturers. Third, DOE considers the impact of standards on domestic 

manufacturer employment and manufacturing capacity, as well as the potential for 

standards to result in plant closures and loss of capital investment. Finally, DOE takes 

into account cumulative impacts of various DOE regulations and other regulatory 

requirements on manufacturers. 

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For individual consumers, measures of economic impact include the changes in 

life-cycle cost (LCC) and payback period (PBP) associated with new or amended 

standards. The LCC, which is specified separately in EPCA as one of the seven factors to 

be considered in determining the economic justification for a new or amended standard, 

42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the following section. For consumers in 

the aggregate, DOE also calculates the national net present value of the economic impacts 

throughout the forecast period applicable to a particular rulemaking. 

b. Life-Cycle Costs 

The LCC is the sum of the purchase price of a product (including its installation) 

and the operating expense (including energy, maintenance, and repair expenditures) 

discounted over the lifetime of the product. The LCC savings for the considered 

efficiency levels are calculated relative to a base case that reflects likely market trends in 

the absence of amended standards. The LCC analysis requires a variety of inputs, such as 

product prices, product energy consumption, energy prices, maintenance and repair costs, 

product lifetime, and consumer discount rates. In its analysis, DOE assumed that 

consumers will purchase the considered products in the first year of compliance with 

amended standards. 

To account for uncertainty and variability in specific inputs, such as product 

lifetime and discount rate, DOE uses a distribution of values, with probabilities attached 

to each value. Using this approach, DOE identifies the percentage of consumers 

estimated to receive LCC savings or experience an LCC increase, in addition to the 

38 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

average LCC savings associated with a particular standard level. In addition to 

identifying ranges of impacts, DOE evaluates the LCC impacts of potential standards on 

identifiable subgroups of consumers that may be affected disproportionately by a national 

standard. 

c. Energy Savings 

Although significant conservation of energy is a separate statutory requirement 

for imposing an energy conservation standard, EPCA requires DOE, in determining the 

economic justification of a standard, to consider the total projected energy savings that 

are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE 

uses the NIA spreadsheet results in its consideration of total projected energy savings. 

d. Lessening of Utility or Performance of Products 

In establishing classes of products, and in evaluating design options and the 

impact of potential standard levels, DOE developed standards for residential dishwashers 

that would not lessen the utility or performance of those products. (42 U.S.C. 

6295(o)(2)(B)(i)(IV)) The TSL adopted in today’s direct final rule will not reduce the 

utility or performance of the dishwashers under consideration in this rulemaking. 

e. Impact of Any Lessening of Competition 

EPCA directs DOE to consider any lessening of competition that is likely to result 

from standards. It also directs the Attorney General of the United States (Attorney 

General) to determine the impact, if any, of any lessening of competition likely to result 

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from a proposed standard and to transmit such determination to the Secretary within 60 

days of the publication of a direct final rule and simultaneously published proposed rule, 

together with an analysis of the nature and extent of the impact. (42 U.S.C. 

6295(o)(2)(B)(i)(V) and (B)(ii)) DOE published the proposed rule containing energy 

conservation standards identical to those set forth in today’s direct final rule and

transmitted a copy of today’s direct final rule and the accompanying TSD to the Attorney 

General, requesting that the Department of Justice (DOJ) provide its determination on 

this issue. DOE will consider DOJ’s comments on the rule in determining whether to 

proceed with the direct final rule. DOE will also publish and respond to DOJ’s comments 

in the Federal Register in a separate notice. 

f. Need for National Energy Conservation 

The energy savings from new or amended standards are likely to provide 

improvements to the security and reliability of the nation’s energy system. Reductions in 

the demand for electricity also may result in reduced costs for maintaining the reliability 

of the nation’s electricity system. DOE conducts a utility impact analysis to estimate how 

standards may affect the nation’s needed power generation capacity. 

Energy savings from today’s standards also are likely to result in environmental 

benefits in the form of reduced emissions of air pollutants and greenhouse gases 

associated with energy production. DOE reports the environmental effects from today’s 

standards, and from each TSL it considered, in the environmental assessmentemissions 

analysis contained in chapter 15 in the direct final rule TSD and in section V.B.6 of this 

40 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

notice. DOE also reports estimates of the economic value of emissions reductions 

resulting from the considered TSLs. 

g. Other Factors 

EPCA allows the Secretary of Energy, in determining whether a standard is 

economically justified, to consider any other factors that the Secretary deems to be 

relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In developing this direct final rule, DOE has 

also considered the submission of the Joint Petition, which DOE believes sets forth a 

statement by interested persons that are fairly representative of relevant points of view 

(including representatives of manufacturers of covered products, States, and efficiency 

advocates) and contains recommendations with respect to an energy conservation 

standard that are in accordance with 42 U.S.C. 6295(o). (Although States were not 

signatories to the Consensus Agreement, they did not express any opposition to it.) DOE Comment [A11]: Changes recommended by 

OIRA. 

has encouraged the submission of consensus agreements as a way to bring diverse 

interested parties together, to develop an independent and probative analysis useful in 

DOE standard setting, and to expedite the rulemaking process. DOE also believes that 

standard levels recommended in the Consensus Agreement may increase the likelihood 

for regulatory compliance, while decreasing the risk of litigation. 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable 

presumption that an energy conservation standard is economically justified if the 

additional cost to the consumer of a product that meets the standard is less than three 

41 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

times the value of the first year’s energy savings resulting from the standard, as 

calculated under the applicable DOE test procedure. DOE’s LCC and PBP analyses

generate values used to calculate the effect potential amended energy conservation 

standards would have on the payback period for consumers. These analyses include, but 

are not limited to, the 3-year payback period contemplated under the rebuttablepresumption test. In addition, DOE routinely conducts an economic analysis that 

considers the full range of impacts to consumers, manufacturers, the nation, and the 

environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis 

serve as the basis for DOE’s evaluation of the economic justification for a potential 

standard level (thereby supporting or rebutting the results of any preliminary 

determination of economic justification). The rebuttable presumption payback calculation 

is discussed in section IV.F.11 of this direct final rule and chapter 8 of the direct final 

rule TSD. 

IV. Methodology and Discussion 

DOE used two spreadsheet tools to estimate the impact of today’s direct final rule. 

The first spreadsheet calculates LCCs and PBPs of potential new energy conservation 

standards. The second provides shipments forecasts and then calculates impacts of 

potential energy conservation standards on national energy savings and net present value. 

The two spreadsheets are available online at: [INSERT URL]. The Department also 

assessed manufacturer impacts, largely through use of the Government Regulatory 

Impact Model (GRIM). 

42 
 

 

 

 

 

 

 

 

 

 

 

 

Additionally, DOE estimated the impacts on utilities and the environment of 

energy conservation standards for residential dishwashers. DOE used a version of EIA’s 

National Energy Modeling System (NEMS) for the utility and environmental analyses. 

The NEMS model simulates the energy sector of the U.S. economy. EIA uses NEMS to 

prepare its Annual Energy Outlook, a widely known baseline energy forecast for the 

United States. For more information on NEMS, refer to The National Energy Modeling 

System: An Overview, DOE/EIA–0581 (98) (Feb.1998), available at: 

http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf. 

The version of NEMS used for appliance standards analysis, which makes minor 

modifications to the AEO version, is called NEMS-BT.11 NEMS-BT offers a 

sophisticated picture of the effect of standards, because it accounts for the interactions 

among the various energy supply and demand sectors and the economy as a whole. 

A. Market and Technology Assessment 

1. General 

When beginning an energy conservation standards rulemaking, DOE develops 

information that provides an overall picture of the market for the products concerned, 

including the purpose of the products, the industry structure, and market characteristics. 

This activity includes both quantitative and qualitative assessments based primarily on 

publicly available information. The subjects addressed in the market and technology 

11 EIA approves the use of the name “NEMS” to describe only an AEO version of the model without any 

modification to code or data. Because the present analysis entails some minor code modifications and runs 

the model under various policy scenarios that deviate from AEO assumptions, the name “NEMS-BT” refers 

to the model as used here. (BT stands for DOE’s Building Technologies Program.)

43 
 

 

 

 

 

 

 

 

 

 

 

 

assessment for this rulemaking include products covered by the rulemaking, quantities 

and types of products sold and offered for sale, retail market trends, product classes and 

manufacturers, regulatory and non-regulatory programs, and technology options that 

could improve the energy efficiency of the product(s) under examination. See chapter 3 

of the direct final rule TSD for further discussion of the market and technology 

assessment. 

2. Products Included in this Rulemaking 

DOE defines “dishwasher” under EPCA as “a cabinet-like appliance which with 

the aid of water and detergent, washes, rinses, and dries (when a drying process is 

included) dishware, glassware, eating utensils, and most cooking utensils by chemical, 

mechanical and/or electrical means and discharges to the plumbing drainage system.” 

(10 CFR 430.2) DOE considers this definition to encompass built-in, portable, and 

countertop dishwashers. 

3. Product Classes 

Existing energy conservation standards divide residential dishwashers into two 

product classes based on capacity: (1) standard; and (2) compact. As mentioned 

previously in section III.A, DOE is maintaining these product classes for this rulemaking. 

4. Non-Regulatory Programs 

As part of the market and technology assessment, DOE reviews non-regulatory 

programs promoting energy efficient residential appliances in the United States. Non44 
 

 

 

 

 

 

 

 

 

 

 

 

 

regulatory programs that DOE considers in its market and technology assessment include 

ENERGY STAR and the Consortium for Energy Efficiency (CEE) Super-Efficient Home 

Appliance Initiative (SEHA). 

ENERGY STAR is a voluntary labeling program administered jointly by the U.S. 

Environmental Protection Agency (EPA) and DOE. ENERGY STAR identifies energy 

efficient products through a qualification process.12 To qualify, a product must exceed 

Federal minimum standards by a specified amount, or if no Federal standard exists, a 

product must exhibit select energy-saving features. ENERGY STAR specifications 

currently exist for residential dishwashers. 

The CEE SEHA program develops initiatives for its North American members to 

promote the manufacture and purchase of energy efficient products and services.13 The 

program establishes efficiency tiers beyond the DOE energy conservation standards and 

the ENERGY STAR specifications. Currently, CEE has set two efficiency tiers above the 

ENERGY STAR specification for standard dishwashers, and one efficiency tier above the 

ENERGY STAR specification for compact dishwashers. 

5. Technology Options 

As part of the market and technology assessment, DOE developed a list of 

technologies to consider for improving the efficiency of residential dishwashers, as 

shown in Table IV.1Table IV.1. These technologies encompass all those DOE believes 

12 For more information, please visit www.energystar.gov. 13 For more information, please visit www.cee1.org. 

45 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

would improve energy efficiency and are technologically feasible, most of which were 

identified for the November 2007 ANOPR. 72 FR 64432, 64451 (Nov. 15, 2007). In 

addition to those technology options identified in the November 2007 ANOPR, DOE also 

considered the use of control strategies to decrease energy and water consumption. This 

technology option is a change in the product’s operation. For instance, a manufacturer

may lower the temperature of a wash or rinse cycle to decrease the amount of internal 

water heating required. Often, decreases in water temperatures or water use are combined 

with longer cycles to limit the impact on wash performance. 

Table IV.1 Initial Technology Options for Residential Dishwashers 

1. Condenser drying 

2. Control Strategies 

3. Fan/jet drying 

4. Flow-through heating 

5. Improved fill control 

6. Improved food filter 

7. Improved motor efficiency 

8. Improved spray-arm geometry 

9. Increased insulation 

10. Low-standby-loss electronic controls 

11. Microprocessor controls and fuzzy logic, including adaptive or soil-sensing controls 

12. Modified sump geometry, with and without dual pumps 

13. Reduced inlet-water temperature 

14. Supercritical carbon dioxide washing 

15. Ultrasonic washing 

16. Variable washing pressures and flow rates 

B. Screening Analysis 

DOE uses the following four screening criteria to determine which technology 

options are suitable for further consideration. 

46 
 

 

 

 

 

 

 

 

 

 

 

 

1)	 Technological feasibility. DOE will consider technologies incorporated in 

commercial products or in working prototypes to be technologically feasible. 

(The technological feasibility of options was discussed in the preceding 

section as part of the market and technology assessment.) 

2)	 Practicability to manufacture, install, and service. If mass production and 

reliable installation and servicing of a technology in commercial products 

could be achieved on the scale necessary to serve the relevant market at the 

time the standard comes into effect, then DOE will consider that technology 

practicable to manufacture, install, and service. 

3)	 Adverse impacts on product utility or product availability. If DOE determines 

a technology would have significant adverse impact on the utility of the 

product to significant subgroups of consumers, or would result in the 

unavailability of any covered product type with performance characteristics 

(including reliability), features, sizes, capacities, and volumes that are 

substantially the same as products generally available in the United States at 

the time, it will not consider this technology further. 

4)	 Adverse impacts on health or safety. If DOE determines that a technology will 

have significant adverse impacts on health or safety, it will not consider this 

technology further. 

(10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b)). 

47 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technologies that pass through the screening analysis are referred to as “design 

options” in the engineering analysis. Details of the screening analysis are provided in 

chapter 4 of the direct final rule TSD. 

Based on the preliminary determinations made in the November 2007 ANOPR 

(72 FR 64432, 64454–55 (Nov. 15, 2007)), and further analysis of the initial technology 

options, DOE retained the design options shown in Table IV.2Table IV.2 for its 

subsequent analyses. These remaining design options met all of the screening criteria 

listed above. 

Table IV.2 Design Options Retained for Engineering Analysis 

1. Condenser drying 

2. Control Strategies 

3. Fan/jet drying 

4. Flow-through heating 

5. Improved fill control 

6. Improved food filter 

7. Improved motor efficiency 

8. Improved spray-arm geometry 

9. Increased insulation 

10. Low-standby-loss electronic controls 

11. Microprocessor controls and fuzzy logic, including adaptive or soilsensing controls 

12. Modified sump geometry, with and without dual pumps 

13. Variable washing pressures and flow rates 

C. Engineering Analysis 

In the engineering analysis, DOE evaluates a range of product efficiency levels 

and their associated manufacturing costs. The purpose of the analysis is to estimate the 

incremental manufacturer production costs (MPCs) associated with increasing efficiency 

48 
 

 

 

 

 

 

 

 

 

 

 

 

 

levels above that of the baseline model in each product class. The engineering analysis 

considers technologies not eliminated in the screening analysis, designated as design 

options, in developing cost-efficiency curves, which subsequently are used for the LCC 

and PBP analyses. 

DOE has identified the following three methodologies for generating the 

manufacturing costs needed for the engineering analysis: (1) the design-option approach, 

which provides the incremental costs of adding to a baseline model design options that 

will improve its efficiency; (2) the efficiency-level approach, which provides the relative 

costs of achieving increases in energy efficiency levels, without regard to the particular 

design options used to achieve such increases; and (3) the cost-assessment (or reverseengineering) approach, which provides “bottom-up” manufacturing cost assessments for

achieving various levels of increased efficiency, based on detailed data regarding costs 

for parts and material, labor, shipping/packaging, and investment for models that operate 

at particular efficiency levels. 

DOE conducted the engineering analyses for the standard product class in this 

rulemaking using the efficiency-level approach, combined with the cost-assessment 

approach, to develop a manufacturing cost for each efficiency level. DOE chose this 

approach because the efficiency levels considered in the engineering analysis are 

attainable using technologies currently available on the market for residential 

dishwashers. This approach involved physically disassembling commercially available 

49 
 

 

 

 

 

 

 

 

 

 

 

 

 

products, consulting with outside experts, reviewing publicly available cost and 

performance information, and modeling equipment costs. 

Given the data available for the compact product class, DOE used the designoption approach to develop the cost-efficiency relationship. There are very few, disparate 

platforms (i.e., countertop units and dishdrawers) available on the market for this product 

class. Therefore, DOE developed the cost-efficiency relationship by estimating the 

incremental costs of adding specific design options to a baseline model that would 

provide sufficient improvement in efficiency to achieve the higher efficiency levels 

considered for the analysis. DOE weighted the costs at each efficiency level by market 

share of each platform. 

To provide interested parties with additional information about DOE’s 

assumptions and results and the ability to perform independent analyses for verification, 

DOE associated each efficiency level with specific technologies that manufacturers might 

use. Chapter 5 of the direct final rule TSD describes the methodology and results of the 

efficiency level analysis used to derive the cost-efficiency relationships. 

1. Baseline Efficiency Levels 

The baseline efficiency levels for both the standard and compact product classes 

are based on the current DOE energy conservation standards for annual energy use and 

per-cycle water consumption. These standards took effect for residential dishwashers 

50 
 

 

 

 

 

 

 

 

 

 

 

 

 

manufactured on or after January 1, 2010. (42 U.S.C. 6295 (g)(10)) Table IV.3Table IV.3 

below shows the baseline efficiency level for each residential dishwasher product class. 

Table IV.3 Baseline Efficiency Levels for Residential Dishwasher Analysis 

Product Class Annual Energy Use 

(kWh/year) 

Per-Cycle Water 

Consumption 

(gallons/cycle) 

Standard 355 6.5 

Compact 260 4.5 

2. Higher Efficiency Levels 

DOE considered efficiency levels higher than baseline levels based on 

specifications prescribed by ENERGY STAR and CEE’s Super-Efficient HomeAppliances Initiative. The highest efficiency levels were defined by the maximum 

available technology that DOE could identify on the market. (DOE did not identify any 

working prototypes that were more efficient than the maximum available technology on 

the market.) Where the increments between adjacent efficiency levels were large, DOE 

proposed to add an intermediate “gap-fill” level. Efficiency Level 2 for standard 

dishwashers and Efficiency Level 1 for compact dishwashers correspond to the efficiency 

levels proposed in the Consensus Agreement discussed in section II.B.2. Table IV.4Table 

IV.4 and Table IV.5Table IV.5 show the efficiency levels analyzed in today’s direct final 

rule, based on annual energy use and per-cycle water consumption. 

51 
 

 

 

 

 

 

 

Table IV.4 Efficiency Levels for Standard Residential Dishwasher Analysis 

Level Efficiency Level Reference 

Source 

Efficiency Level 

Annual Energy 

Use (kWh/year) 

Per-Cycle Water 

Consumption 

(gal/cycle) 

Baseline DOE Standard 355 6.5 

EL 1 ENERGY STAR (effective 

August 11, 2009) 324 5.8 

EL 2 CEE Tier 1/Consensus 

Agreement 307 5.0 

EL 3 

CEE Tier 2/Upcoming ENERGY 

STAR (effective January 20, 

2012) 

295 4.25 

EL 4 Gap Fill* 234 3.8 

EL 5 Maximum Available* 180 1.6 

*Source: ENERGY STAR-qualified dishwashers as of January 30, 2011. 

Table IV.5 Efficiency Levels for Compact Residential Dishwasher Analysis 

Level Efficiency Level Description 

Annual 

Energy Use* 

(kWh/year) 

Per-Cycle 

Water 

Consumption 

(gal/cycle) 

Baseline DOE Standard 260 4.5 

EL 1 Consensus Agreement/Upcoming ENERGY 

STAR (effective January 20, 2012) 222 3.5 

EL 2 Maximum Available * 154 2.1 

*Source: ENERGY STAR-qualified dishwashers as of January 30, 2011. 

3. Proprietary Designs 

In its engineering and economic analyses DOE considers all design options that 

are commercially available or present in a working prototype, including proprietary 

designs and technologies. DOE will consider a proprietary design in the subsequent 

analyses only if the achieved efficiency level can also be reached using other 

nonproprietary design options. If the proprietary design is the only approach available to 

achieve a given efficiency level, then DOE will reject that efficiency level to avoid 

impacts on competition that would likely result. DOE solicited comment on any 

52 
 

 

 

 

 

 

 

 

 

 

proprietary design options during its manufacturer interviews, and although 

manufacturers mentioned several technologies that are currently in development, these 

technologies are not required to meet the efficiency levels considered in this analysis. 

Therefore, DOE believes that all efficiency levels in today’s direct final rule can be Comment [A12]: Change recommended by 

OIRA. 

achieved without the use of proprietary designs. 

4. Reverse Engineering 

Based on product teardowns and cost modeling, DOE developed overall costefficiency relationships for the standard and compact product classes. Table IV.6Table 

IV.6 and Table IV.7Table IV.7 show DOE’s estimates of incremental manufacturing 

costs for improvement of dishwasher efficiency above the baseline. Chapter 5 of the 

direct final rule TSD provides details on DOE’s engineering analysis and development of 

the cost-efficiency curves. 

Table IV.6 Cost-Efficiency Relationship for Standard Residential Dishwashers 

Efficiency 

Level 

Annual 

Energy 

Use 

(kWh/year) 

Per-Cycle 

Water 

Consumption 

(gal/cycle) 

Incremental Manufacturing Cost 

(2010$) 

(2010$) ($/kWh/yr) ($/gal/cycle) 

Baseline 355 6.5 - - -

EL 1 324 5.8 $19.8718.27 $0.59 $26.10 

EL 2 307 5.0 $31.82 $0.66 $21.21 

EL 3 295 4.25 $69.23 $1.15 $30.77 

EL 4 234 3.8 $75.18 $0.62 $27.85 

EL 5 180 1.6 $82.95 $0.47 $16.93 

Comment [A13]: Column additions 

recommended by OIRA. 

Inserted Cells 

Inserted Cells 

53 
 

 

 

 

 

 

 

 

 

Table IV.7 Cost-Efficiency Relationship for Compact Residential Dishwashers 

Efficiency 

Level 

Annual 

Energy 

Use 

(kWh/year) 

Per-Cycle 

Water 

Consumption 

(gal/cycle) 

Incremental Manufacturing Cost 

(2010$) 

(2010$) ($/kWh/yr) ($/gal/cycle) 

Baseline 260 4.5 - - -

EL 1 222 3.5 $1.00 $0.03 $1.00 

EL 2 154 2.1 $12.11 $0.11 $5.05 

Comment [A14]: Column additions 

recommended by OIRA. 

Inserted Cells 

Inserted Cells 

D. Markups Analysis 

The markups analysis develops appropriate markups in the distribution chain to 

convert the estimates of manufacturer cost derived in the engineering analysis to 

consumer prices. At each step in the distribution channel, companies mark up the price of 

the product to cover business costs and profit margin. For dishwashers, the main parties 

in the distribution chain are manufacturers and retailers. 

DOE developed an average manufacturer markup by examining the annual 

Securities and Exchange Commission (SEC) 10-K reports filed by publicly traded 

manufacturers primarily engaged in appliance manufacturing and whose combined 

product range includes residential dishwashers. 

For retailers, DOE developed separate markups for baseline products (baseline 

markups) and for the incremental cost of more efficient products (incremental markups). 

Incremental markups are coefficients that relate the change in the manufacturer sales 

price of higher-efficiency models to the change in the retailer sales price. DOE relied on 

54 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

economic data from the U.S. Census Bureau to estimate average baseline and incremental 

markups.14 

Chapter 6 of the direct final rule TSD provides details on DOE’s development of 

markups for dishwashers. 

E. Energy and Water Use Analysis 

DOE’s energy and water use analysis estimated the range of energy and water use

of dishwashers in the field, i.e., as they are actually used by consumers. The energy and 

water use analysis provided the basis for other analyses DOE performed, particularly 

assessments of the energy and water savings and the savings in consumer operating costs 

that could result from DOE’s adoption of amended standards. 

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. 

14 U.S. Census, 2002 Business Expenditure Survey (BES), Electronics and Appliance Stores sectors 

55 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

water-heating energy, and (2) machine (motor) and drying energy. The largest component 

of dishwasher energy consumption is water-heating energy use, which is the energy 

required to heat the inlet water to the temperature for dishwashing. The machine energy 

consists of the motor energy (for water pumping and food disposal) and drying energy 

consists of energy to dry cleaned dishes. 

DOE estimated the per-cycle water-heating energy consumption based on DOE’s

dishwasher test procedure (which refers to this quantity as “water energy consumption”). 

DOE estimated this energy consumption for dishwashers that operate with a nominal inlet 

water temperature of 120 oF, the most common situation in U.S. homes. For a dishwasher 

using electrically heated water, the water energy consumption, expressed in kWh per 

cycle, is equal to the water consumption per cycle times a nominal water heater 

temperature rise of 70 oF times the specific heat of water (0.0024 kWh per gallon per 

oF).15 For a dishwasher using gas-heated or oil-heated water, the calculation is the same, 

but also incorporates a nominal water heater recovery efficiency of 0.75.16 

The per-cycle machine and drying energy was determined by subtracting the percycle water-heating energy consumption from the per-cycle total energy consumption. 

15 The nominal water heater temperature rise of 70 oF assumes an average water heater inlet temperature of 

50 oF, which was believed to beas specified as the national average whenin the dishwasher test procedure 

was specified... 16 The recovery efficiency indicates how efficient a water heater is at heating water. The DOE test 

procedure for dishwashers specifies a recovery efficiency of 0.75 for gas-fired water heating, which is 

representative of gas water heaters currently in the housing stock. 

Comment [A15]: Footnote changes 

recommended by OIRA. 

Comment [A16]: Footnote recommended by 

OIRA. 

56 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOE determined the standby annual energy consumption by multiplying the 

energy use in standby mode per hour by the hours the dishwasher is in standby mode, 

which is the difference between the number of hours in a year and the active hours, which 

is equal to the number of dishwasher cycles per year where amultiplied by cycle time, 

which is estimated to be one hour.17 Comment [A17]: Changes recommended by 

OIRA. 

Comment [A18]: Footnote changes 

recommended by OIRA. 

DOE estimated the per-cycle water use by efficiency level in its engineering 

analysis, as described in chapter 5 of the direct final rule TSD. 

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.18 RECS is a national sample survey of 

housing units that collects statistical information on the consumption of and expenditures 

for energy in housing units along with data on energy-related characteristics of the 

housing units and occupants. Of the more than 4,800 households in RECS, almost 2,500 

have dishwashers. For each household using a dishwasher, RECS provides data on the 

number of dishwasher cycles in the following bins: (1) less than once per week, (2) once 

per week, (3) 2–3 times per week, (4) 4-6 times per week, (5) at least once per day. DOE 

converted the above to annual values and created a triangular or uniform distribution for 

17 The one-hour cycle time is an estimate of the typical cycle time for a dishwasher. Actual cycle times 

vary based on test measurements conducted for the November 2007 ANOPRwash selection, load, and
 

model of dishwasher. .
 18 For information on RECS, see www.eia.doe.gov/emeu/recs/.
 

57 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

each bin. DOE randomly assigned a specific numerical value from within the appropriate 

bin to each household in the dishwasher sample. The average number of cycles per year 

derived from the RECS 2005 data is 174. 

DOE also analyzed a review of survey data, available at ,19 to estimate the average 

number of dishwasher cycles per year for today’s rule. This . In the review, survey data 

wason consumers’ dishwasher usage habits were collected from a number of sources 

including several dishwasher manufacturers, detergent manufacturers, energy and 

consumer interest groups, independent researchers, and government agencies. These data 

were also used to develop the 2003 dishwasher test procedure amendments, which 

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

year. 20 . 

21 Because the survey isdata are more comprehensive than the RECS data, for 

today’s rule DOE chose an average usage of 215 cycles per year as the most 

representative value for average dishwasher use. 

To estimate the annual number of cycles for each RECS household in the 

dishwasher sample, DOE multiplied the assigned specific numerical value derived from 

RECS by the ratio of 215 cycles to 174 cycles. (the RECS average). The resulting range 

of values used in the LCC analysis is consistent with the average use in the DOE 

dishwasher test procedure. 

19 Available at:
 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/survey_data.pdf
 20 68 FR 51887 (August 29, 2003).
 21 68 FR 51887 (August 29, 2003). The 215 value was based on the review’s recommendation that the 

number of average-use cycles per year be reduced into the range of 200 to 233 cycles.
 

Comment [A19]: Changes recommended by 

OIRA. 

58 
 

 

 

 

 

 

 

 

 

Table IV.8Table IV.8 shows the estimated average annual energy and water use 

for each efficiency level analyzed for standard dishwashers. 

Table IV.8 Standard Dishwashers: Average Annual Energy and Water Use by 

Efficiency Level 

Efficiency 

Level 

Annual Energy Use Annual 

Water 

Water Heating* Machine + Drying Use Standby† Total 

kWh/year kWh/year kWh/year kWh/year gal/year 

Baseline 234.8 120.2 0.0 355 1398 

1 209.5 94.8 19.7 324 1247 

2 180.6 111.9 14.5 307 1075 

3 153.5 127.0 14.5 295 914 

4 137.3 82.2 14.5 234 817 

5 57.8 107.7 14.5 180 344 

* Shown for the case of electrically heated water. † Standby annual energy use based on a dishwasher cycle length of one hour. 

Standby hours = 87668760 hours – (215 cycles x 1 hour = 8551) = 8545 hours. 

Table IV.9 Compact Dishwashers: Average Annual Energy and Water Use by 

Efficiency Level 

Efficiency 

Annual Energy Use Annual 

Water 

Water Heating* Machine + Drying Use Standby† Total 

Level kWh/year kWh/year kWh/year kWh/year gal/year 

Baseline 162.5 77.8 19.7 260 968 

1 126.4 75.9 19.7 222 753 

2 75.9 63.6 14.5 154 452 

* Shown for the case of electrically heated water. 

† Standby annual energy use based on a dishwasher cycle length of one hour. 

Standby hours = 8760 hours – (215 cycles x 1 hour) = 8545 hours. 

Chapter 7 of the direct final rule TSD provides details on DOE’s energy and water

use analysis for dishwashers. 

59 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F. Life-Cycle Cost and Payback Period Analysis 

DOE conducted LCC and PBP analyses to evaluate the economic impacts on 

individual consumers of potential energy conservation standards for dishwashers. The 

LCC is the total consumer expense over the life of a product, consisting of purchase and 

installation costs plus operating costs (expenses for energy use, maintenance, and repair). 

To compute the operating costs, DOE discounts future operating costs to the time of 

purchase and sums them over the lifetime of the product. The PBP is the estimated 

amount of time (in years) it takes consumers to recover the increased purchase cost 

(including installation) of a more efficient product through lower operating costs. DOE 

calculates the PBP by dividing the change in purchase cost (normally higher) due to a 

more stringent standard by the change in average annual operating cost (normally lower) 

that results from the standard. 

For any given efficiency level, DOE measures the PBP and the change in LCC 

relative to an estimate of the base-case appliance efficiency levels. The base-case 

estimate reflects the market in the absence of new or amended energy conservation 

standards, including the market for products that exceed the current energy conservation 

standards. 

For each considered efficiency level in each product class, DOE calculated the 

LCC and PBP for a nationally representative set of housing units. For the analysis for 

today’s rule, DOE developed household samples from the 2005 RECS. For each sample

household, DOE determined the energy consumption for the dishwasher and the 

60 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

appropriate electricity price. By developing a representative sample of households, the 

analysis captured the variability in energy consumption and energy prices associated with 

the use of residential dishwashers. 

Inputs to the calculation of total installed cost include the cost of the product—

which includes manufacturer costs, manufacturer markups, retailer and distributor 

markups, and sales taxes—and installation costs. Inputs to the calculation of operating 

expenses include annual energy consumption, energy and water prices and price 

projections, repair and maintenance costs, product lifetimes, discount rates, and the year 

that compliance with standards is required. DOE created distributions of values for 

product lifetime, discount rates, and sales taxes, with probabilities attached to each value, 

to account for their uncertainty and variability. 

The computer model DOE uses to calculate the LCC and PBP, which incorporates 

Crystal Ball (a commercially available software program), relies on a Monte Carlo 

simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo 

simulations randomly sample input values from the probability distributions and 

dishwasher user samples. The model calculated the LCC and PBP for products at each 

efficiency level for 10,000 housing units per simulation run. 

Table IV.10 summarizes the approach and data DOE used to derive inputs to the 

LCC and PBP calculations. The subsections that follow provide further discussion. 

Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are 

61 
 

 

contained in chapter 8 and its appendices of the direct final rule TSD (see Table 8.1.1 for 

a summary of inputs). 

62
 
 

 

 

 

 

 

 

 

Table IV.10 Summary of Inputs and Methods for the LCC and PBP Analysis* 

Inputs Source/Method 

Product Cost Derived by multiplying manufacturer 

cost by manufacturer and retailer 

markups and sales tax, as appropriate. 

Used historical data to derive a price 

scaling index to forecast product costs. 

Installation Costs Baseline installation cost determined 

with data from RS Means. Assumed no 

change with efficiency level. 

Annual Energy and 

Water Use 

The sum of the total per-cycle annual 

energy and water use multiplied by the 

number of cycles per year and the 

standby annual energy use. Average 

number of cycles based on ADL field 

data. 

Variability: Based on the 2005 RECS 

normalized to the average number of 

cycles. 

Energy and Water 

Prices 

Electricity: Based on EIA’s Form 861

data for 2010. 

Variability: Regional energy prices 

determined for 13 regions. 

Water: Based on 2010 AWWA/Raftelis 

Survey. 

Variability: By census region. 

Energy and Water Energy: Forecasted using Annual Energy 

Price Trends Outlook 2011 (AEO2011) price 

forecasts. 

Water: Forecasted using BLS historic 

water price index information. 

Repair and 

Maintenance Costs 

Assumed no change with efficiency 

level. 

Product Lifetime Estimated using survey results from 

RECS (1990, 1993, 1997, 2001, 2005) 

and the U.S. Census American Housing 

Survey (2005, 2007), along with historic 

data on appliance shipments. 

Variability: Characterized using Weibull 

probability distributions. 

Discount Rates Approach involves identifying all 

possible debt or asset classes that might 

be used to purchase the considered 

appliances, or might be affected 

indirectly. Primary data source was the 

Federal Reserve Board’s SCF** for 

1989, 1992, 1995, 1998, 2001, 2004 and 

2007. 

Compliance Date 2018†

63 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* References for the data sources mentioned in this table are provided in the sections following the table or
 

in chapter 8 of the direct final rule TSD.
 

** Survey of Consumer Finances.
 

† For TSL 2, DOE used 2013 as the compliance date.
 

1. Product Cost 

To calculate consumer product costs, DOE multiplied the manufacturer selling 

prices developed in the engineering analysis by the supply-chain markups described 

above (along with sales taxes). DOE used different markups for baseline products and 

higher-efficiency products, because DOE applies an incremental markup to the increase 

in MSP associated with higher-efficiency products. 

Examination of historical price data for a number of appliances that have been 

subject to energy conservation standards indicates that an assumption of constant real 

prices and costs may overestimate long-term trends in appliance prices. Economic 

literature and historical data suggest that the real costs of these products may in fact trend 

downward over time according to “learning” or “experience” curves. Experience curve 

analysis focuses on entire industries (often operating globally) and aggregates over many 

causal factors that may not be well characterized. Experience curve analysis implicitly 

includes factors such as efficiencies in labor, capital investment, automation, materials 

prices, distribution, and economies of scale at an industry-wide level.22 Since market 

competition is very effective, learning in one plant or firm rapidly diffuses to other firms 

as well, leading to industry-wide effects. Comment [A20]: Changes recommended by 

OIRA. 

22 Newell, R.G., 2000. Incorporation of Technological Learning into NEMS Buildings Modules. U.S. 

Department of Energy, Energy Information Administration, Washington, DC. 

64 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On February 22, 2011, DOE published a Notice of Data Availability (NODA, 76 

FR 9696) stating that DOE may consider improving regulatory analysis by addressing 

equipment price trends. In the NODA, DOE proposed that when sufficiently long-term 

data are available on the cost or price trends for a given product, it would analyze the 

available data to forecast future trends. 

Many commenters were supportive of DOE moving from an assumption-based 

equipment price trend forecasting method to a data-driven methodology for forecasting 

price trends. Other commenters were skeptical that DOE could accurately forecast price 

trends given the many variables and factors that can complicate both the estimation and 

the interpretation of the numerical price trend results and the relationship between price 

and cost. DOE evaluated the concerns expressed about its proposed approach for 

incorporating experience in its forecasts of product prices and determined that retaining 

an assumption-based approach of a constant real price trend was not consistent with the 

historical data for residential dishwashers. Therefore, DOE developed a range of potential 

price trends that was consistent with the available data. 

For the default price trend for this final rule, DOE estimated an experience rate 

for residential dishwashers based on an analysis of long-term historical data. DOE 

derived a dishwasher price index from 1988 to 2010 using Producer Price Index (PPI) 

data for miscellaneous household appliances from the Bureau of Labor Statistics’ (BLS). 

(PPI data specific to residential dishwashers were not available.) An inflation-adjusted 

price index was calculated using the GDP price deflator for the same years. This proxy 

65 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for historic price data was then regressed on the quantity of dishwashers produced, based 

on a corresponding series for total shipments of dishwashers. 

To calculate an experience rate, a least-squares power-law fit was performed on 

the dishwasher price index versus cumulative shipments. (including imports). DOE then 

derived a price factor index, with the price in 2010 equal to 1, to forecast prices in the 

year of compliance for amended energy conservation standards in the LCC and PBP 

analysis, and for the NIA, for each subsequent year through 2047. The index value in 

each year is a function of the experience rate and the cumulative production through that 

year. To derive the latter, DOE used projected shipments from the base case projections 

made for the NIA (see section IV.G.1 of this notice). The average annual rate of price 

Comment [A21]: Change recommended by 

OIRA. 

decline in the default case is 1.27 percent. By 2047, which is the end date of the forecast 

period, the price is forecasted to drop 38 percent relative to 2010. For the baseline 

model, the average price decreases from $630 in 2010 to $392 in 2047 (values given in 

2010$). DOE’s forecast of product prices for dishwashers is described in further detail in 

appendix 8-E of the direct final rule TSD. 

For the NIA, DOE also considered several alternative price trends as sensitivity 

cases (see section IV.G.3 for a description). In recognition of the uncertainty regarding 

estimation of future product price trends, DOE will continue to review the relevant 

literature and seek to continually improve and refine its methodology through research, 

enhancements to its models and by seeking public input. DOE will also work to ensure 

the robustness of its data sets as a means to ensure the reliability of its projections. 

Comment [A22]: Change recommended by 

OIRA. 

66 
 

 

 

 

 

 

 

 

 

 

 

 

 

2. Installation Cost 

Installation cost includes labor, overhead, and any miscellaneous materials and 

parts needed to install the product. DOE used data from the 2010 RS Means Plumbing 

Cost data book to estimate the baseline installation cost. DOE found no evidence that 

installation costs would be impacted with increased efficiency levels. 

3. Annual Energy Consumption 

For each sampled household, DOE determined the energy consumption for a 

dishwasher at different efficiency levels using the approach described above in section 

IV.E. 

4. Energy Prices 

DOE derived average annual energy prices for 13 geographic areas consisting of 

the nine U.S. Census divisions, with four large states (New York, Florida, Texas, and 

California) treated separately. For Census divisions containing one of those large states, 

DOE calculated the regional average excluding the data for the large state. 

DOE calculated average residential electricity prices for each of the 13 

geographic areas using data from EIA’s Form EIA-861 database (based on “Annual 

Electric Power Industry Report”).23 DOE calculated an average annual regional 

residential price by: (1) estimating an average residential price for each utility (by 

dividing the residential revenues by residential sales); and (2) weighting each utility by 

23 Available at: www.eia.doe.gov/cneaf/electricity/page/eia861.html 

67 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

the number of residential consumers it served in that region. The final rule analysis used 

the data for 2009, the most recent data available. 

DOE calculated average residential natural gas prices for each of the 13 

geographic areas using data from EIA’s “Natural Gas Monthly.”24 DOE calculated 

average annual regional residential prices by: (1) estimating an average residential price 

for each State; and (2) weighting each State by the number of residential consumers. The 

direct final rule analysis used the data for 2010. 

5. Energy Price Projections 

To estimate energy prices in future years, DOE multiplied the average regional 

energy prices discussed in the preceding section by the forecast of annual average 

residential energy price changes in the Reference case from AEO2011, which has an end 

year of 2035.25 To estimate price trends after 2035, DOE used the average annual rate of 

change in prices from 2020 to 2035. 

6. Water and Wastewater Prices 

For today’s direct final rule, DOE obtained data on water and wastewater prices 

for 2010 from the Water and Wastewater Rate Survey conducted by Raftelis Financial 

Consultants and the water utility association, AWWA. The survey, which analyzes each 

industry separately, covers approximately 308 water utilities and 228 wastewater utilities. 

The water survey includes, for each utility, the cost to consumers of purchasing a given 

24 Available at: http://www.eia.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.html. 25 U.S. Energy Information Administration. Annual Energy Outlook 2011. Washington, DC. April 2011. 

68 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

volume of water or treating a given volume of wastewater. The data provide a division of 

the total consumer cost into fixed and volumetric charges. DOE’s calculations use only 

the volumetric charge to calculate water and wastewater prices, because only this charge 

is affected by a change in water use. Average water and wastewater prices were estimated 

for each of four census regions. Each RECS household was assigned a water and 

wastewater price depending on its census region location. 

DOE also used price information for households that use well water and a septic 

tank from the National Ground Water Association, as well as national cost data on 

residential septic systems from the National Onsite Wastewater Recycling Association 

(NOWRA). 

Chapter 8 of the direct final rule TSD provides more detail about DOE’s approach

to developing water and wastewater prices. 

7. Maintenance and Repair Costs 

Repair costs are associated with repairing or replacing components that have 

failed in an appliance; maintenance costs are associated with maintaining the operation of 

the product. Typically, small incremental increases in product efficiency produce no, or 

only minor, changes in repair and maintenance costs compared to baseline efficiency 

products. 

69 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOE does not have any data indicating increases inrequested information from 

manufacturers during interviews as to whether maintenance and repair costs associated 

with the are a function of efficiency levels within each of thelevel and product classes 

considered in its analysisclass. Manufacturers responded that these costs would not 

increase with efficiency. Therefore, DOE did not assume that more efficient dishwashers 

would have greater repair or maintenance costs. 

8. Product Lifetime 

Because the lifetime of appliances varies depending on utilization and other 

factors, DOE develops a distribution of lifetimes from which specific values are assigned 

to the appliances in the samples. DOE conducted an analysis of residential dishwasher 

lifetimes in the field based on a combination of shipments data and RECS 2005 data on 

the ages of the dishwashers reported in the household stock. As described in chapter 8 of 

the direct final rue TSD, the analysis yielded an estimate of mean age for residential 

dishwashers of approximately 15 years. It also yielded a survival function that DOE 

incorporated as a probability distribution in its LCC analysis. See chapter 8 of the direct 

final rule TSD for further details on the method and sources DOE used to develop 

product lifetimes. 

9. Discount Rates 

In the calculation of LCC, DOE applies discount rates appropriate to households 

to estimate the present value of future operating costs. DOE estimated a distribution of 

residential discount rates for dishwashers. based on consumer financing costs and 

Comment [A23]: Changes recommended by 

OIRA. 

70 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

opportunity cost of any uses of their funds, including investments in more-efficient 

appliances. Comment [A24]: Changes recommended by 

OIRA. 

To establish residential discount rates for the LCC analysis, DOE identified all 

debt or asset classes that might be used to purchase dishwashers, including household 

assets that might be affected indirectly. It estimated the average percentage shares of the 

various debt or asset classes for the average U.S. household using data from the Federal 

Reserve Board’s Survey of Consumer Finances (SCF) for 1989, 1992, 1995, 1998, 2001, 

2004, and 2007. Using the SCF and other sources, DOE then developed a distribution of 

rates for each type of debt and asset to represent the rates that may apply in the year in 

which amended standards would take effect. DOE assigned each sample household a 

specific discount rate drawn from one of the distributions. The average rate across all 

types of household debt and equity, weighted by the shares of each class, is 5.1 percent. 

DOE used the same approach for today’s direct final rule. See chapter 8 in the direct final 

rule TSD for further details on the development of consumer discount rates. 

10. Compliance Date of Amended Standards 

In the context of EPCA, the compliance date is the future date when parties 

subject to the requirements of a new or amended standard must comply. EPCA, as 

amended by EISA 2007, requires that DOE publish a final rule no later than January 1, 

2015, to determine whether to amend the standards in effect for dishwashers 

manufactured on or after January 1, 2018. (42 U.S.C. 6295(g)(10)(B)) Where 

appropriate, DOE calculated the LCC and PBP for dishwashers as if consumers would 

71 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

purchase new products in 2018. As discussed in section II.B.2, TSL 2, which corresponds 

to the Consensus Agreement level for standard dishwashers, has a compliance date of 

Jan. 1, 2013. Thus, for TSL 2, DOE used 2013 as the compliance year. 

11. Base-Case Efficiency Distribution 

To accurately estimate the share of consumers that would be affected by a 

standard at a particular efficiency level, DOE’s LCC analysis considered the projected 

distribution of product efficiencies that consumers purchase under the base case (i.e., the 

case without new energy efficiency standards). DOE refers to this distribution of product 

of efficiencies as a base-case efficiency distribution. DOE relied on data submitted by 

AHAM to estimate the base-case efficiency distributions for dishwashers in the LCC and 

PBP analysis. These data provide shares of shipments by efficiency level for 2002–2005 

and 2008–2010. For standard dishwashers, the data from AHAM show significant 

increase in the share of ENERGY STAR products in both periods. To project the 

efficiency distributions in the compliance year, DOE considered these trends and the 

potential effect of the new ENERGY STAR level as of July 2011. 

To estimate the base-case efficiency distribution of standard-sized dishwashers 

for 2013 and 2018, DOE relied on data submitted by AHAM for the current rulemaking. 

These data provide shares of shipments by efficiency level for 2002–2005 and 2008–

2010. These data show significant increase in the share of ENERGY STAR products in 

both periods. To predict the market shares for each efficiency level in 2013 and 2018, 

DOE considered the shares and market trends present in the AHAM data and assumed 

72 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

these trends would continue in a manner consistent with the decline in average energy 

use. 

For compact dishwashers, AHAM data for efficiency distributions were not 

available. Thus, DOE first considered 2010 market data from the NPD Group, Inc.26 

These data show that nearly all shipments for both standard and compact dishwashers are 

at the baseline efficiency level. For the compact class base-case distribution, however, 

there were only two types of compact dishwashers in the NPD data set: “countertop” and 

“portable.” DOE is not aware of any portable dishwashers currently on the market in the

United States that would be classified as compact size based on the number of place 

settings. Further, there are no compact dishdrawer platforms included in the NPD dataset, 

which DOE believes represent a sizeable fraction of compact dishwasher shipments. As a 

result, DOE estimated compact base-case efficiencies from its research on the number of 

models available at each efficiency level. Of the eight compact dishwashers listed in the 

FTC database for manufacturer certifications in 2010, four are dishdrawer models with 

similar performance. Therefore, DOE allocated half of shipments to the dishdrawer 

platform that meets candidate standard level (CSL) 2. DOE further estimated, based on 

the number of countertop models and underlying platforms contained within the CEC and 

FTC databases, that half of remaining shipments (25 percent of total compact dishwasher 

shipments) would meet CSL 1, while the remaining 25 percent of compact shipments are 

at the baseline. 

26 NPD Group, Inc. offers marketing research services, industry tracking, data collection, and analysis. For 

more information, please visit: www.npdgroup.com. 

Comment [A25]: Change recommended by 

OIRA. 

73 
 

 

 

 

 

 

 

 

 

 

 

 

The estimated shares for the base-case efficiency distribution for dishwashers are 

shown in Table IV.11Table IV.11. See chapter 8 of the direct final rule TSD for further 

information on the derivation of the base-case efficiency distributions. For standard-sized 

dishwashers, DOE also considered an alternative base-case efficiency distribution that 

uses a different set of historical data. This distribution is described in appendix 8-F of the 

direct final rule TSD. Comment [A26]: Change recommended by 

OIRA. 

Table IV.11 Dishwasher Base-Case Efficiency Distribution by Product Class in 2013 

CSL Efficiency Level 

(kWh) 

Standard 

(% of shipments) 

Compact 

(% of shipments) 

Baseline 355 3.8 25.0 

1 324 32.3 25.0 

2 307 28.0 50.0 

3 295 16.4 

4 234 13.8 

5 180 5.6 

12. Inputs to Payback Period Analysis 

The payback period is the amount of time it takes the consumer to recover the 

additional installed cost of more efficient products, compared to baseline products, 

through energy cost savings. Payback periods are expressed in years. Payback periods 

that exceed the life of the product mean that the increased total installed cost is not 

recovered in reduced operating expenses. 

The inputs to the PBP calculation are the total installed cost of the product to the 

customer for each efficiency level and the average annual operating expenditures for each 

74 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

efficiency level. The PBP calculation uses the same inputs as the LCC analysis, except 

that discount rates are not needed. 

13. Rebuttable-Presumption Payback Period 

As noted above, EPCA, as amended, establishes a rebuttable presumption that a 

standard is economically justified if the Secretary finds that the additional cost to the 

consumer of purchasing a product complying with an energy conservation standard level 

will be less than three times the value of the energy (and, as applicable, water) savings 

during the first year that the consumer will receive as a result of the standard, as 

calculated under the test procedure in place for that standard. (42 U.S.C. 

6295(o)(2)(B)(iii)) For each considered efficiency level, DOE determined the value of the 

first year’s energy and water savings by calculating the quantity of those savings in 

accordance with the applicable DOE test procedure, and multiplying that amount by the 

average energy and water price forecast for the year in which compliance with the 

amended standard would be required. The results of the rebuttable payback period 

analysis are summarized in section V.B.1.c of this notice. 

G. National Impact Analysis–National Energy Savings and Net Present Value Analysis 

The national impact analysis (NIA) assesses the national energy savings (NES) 

and the national net present value (NPV) of total consumer costs and savings that would 

be expected to result from new or amended standards at specific efficiency levels. 

(“Consumer” in this context refers to consumers of the product being regulated.) DOE 

calculates the NES and NPV based on projections of annual appliance shipments, along 

75 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

with the annual energy consumption and total installed cost data from the energy use and 

LCC analyses.27 For the present analysis, DOE forecasted the energy savings, operating 

cost savings, product costs, and NPV of consumer benefits for products sold from 2018 

through 2047.28 

DOE evaluates the impacts of new and amended standards by comparing basecase projections with standards-case projections. The base-case projections characterize 

energy use and consumer costs for each product class in the absence of new or amended 

energy conservation standards. DOE compares these projections with projections 

characterizing the market for each product class if DOE adopted new or amended 

standards at specific energy efficiency levels (i.e., the TSLs or standards cases) for that 

class. For the base-case forecast, DOE considers historical trends in efficiency and 

various forces that are likely to affect the mix of efficiencies over time. For the standards 

cases, DOE also considers how a given standard would likely affect the market shares of 

efficiencies greater than the standard. 

DOE uses an MS Excel spreadsheet model to calculate the energy savings and the 

national consumer costs and savings from each TSL. The TSD and other documentation 

that DOE provides during the rulemaking help explain the models and how to use them, 

and interested parties can review DOE’s analyses by changing various input quantities 

27 For the NIA, DOE adjusts the installed cost data from the LCC analysis to exclude sales tax, which is a 

transfer. 

28 For TSL 2, which assumes a compliance date in 2013, DOE forecasted the impacts for products sold 

from 2013 through 2047. 

Comment [A27]: Footnote recommended by 

OIRA. 

76 
 

 

 

 

 

 

 

 

 

 

 

 

within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to 

probability distributions) as inputs. 

For the results presented in today’s notice, DOE used projections of energy prices 

and housing starts from the AEO2011 Reference case. As part of the NIA, DOE analyzed 

scenarios that used inputs from the AEO2011 Low Economic Growth and High 

Economic Growth cases. Those cases have higher and lower energy price trends 

compared to the Reference case, as well as higher and lower housing starts, which result 

in higher and lower appliance shipments to new homes. NIA results based on these cases 

are presented in appendix 10-C of the direct final rule TSD. 

Table IV.12 summarizes the inputs and methods DOE used for the NIA analysis 

for the direct final rule. Discussion of these inputs and methods follows the table. See 

chapter 10 of the direct final rule TSD for further details. 

77 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table IV.12 Summary of Inputs and Methods for the National Impact Analysis 

Inputs Method 

Shipments Annual shipments from shipments 

model. 

Compliance Date 

of Standard 

2018.* 

Base-Case 

Forecasted 

Efficiencies 

Efficiency distributions are 

forecasted based on historical 

efficiency data. 

Standards-Case 

Forecasted 

Efficiencies 

Used a “roll-up” scenario. 

Annual Energy 

Consumption per 

Unit 

Annual weighted-average values 

are a function of energy use at each 

CSL. 

Total Installed 

Cost per Unit 

Annual weighted-average values 

are a function of cost at each CSL. 

Incorporates forecast of future 

product prices based on historical 

data. 

Annual Energy 

Cost per Unit 

Annual weighted-average values as 

a function of the annual energy 

consumption per unit and energy 

prices. 

Repair and 

Maintenance 

Cost per Unit 

Annual values do not change with 

efficiency level. 

Energy Prices AEO2011 forecasts (to 2035) and 

extrapolation through 2047. 

Energy Site-toSource 

Conversion 

Factor 

Varies yearly and is generated by 

NEMS-BT. 

Discount Rate Three and seven percent real. 

Present Year Future expenses discounted to 

20112012, when the final rule will 

be published. 

* For TSL 2, the compliance date is 2013. 

78 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Shipments 

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

standards on energy and water use, NPV, and future manufacturer cash flows. DOE 

develops 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 and stock replacements. The shipments model takes 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 inservice 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. DOE also considers the impacts on shipments 

from changes in product purchase price and operating cost associated with higher energy 

efficiency levels. 

New housing forecasts and market saturation data comprised the two primary 

inputs for DOE’s estimates of new construction shipments. “New housing” includes

newly-constructed single-family and multi-family units (referred to as “new housing 

completions”) and mobile home placements. For new housing completions and mobile 

home placements, DOE used actual data through 2008, and adopted the projections from 

AEO2011 for later years. 

DOE calibrated the shipments model against historical dishwasher shipments. In 

general, DOE estimated replacements using a product retirement function developed 

79 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from product lifetime. DOE based the retirement function on a uniform probability 

distribution for the product lifetime that was developed in the LCC analysis. The 

shipments model assumes that no units are retired below a minimum product lifetime and 

that all units are retired before exceeding a maximum product lifetime. 

DOE applied a price elasticity parameter to estimate the effect of standards on 

dishwasher shipments. DOE estimated the price elasticity parameter from a regression 

analysis that used purchase price and efficiency data specific to residential clothes 

washers, refrigerators and dishwashers during 1980–2002. The estimated “relative price 

elasticity” incorporates the impacts from purchase price, operating cost, and household 

Comment [A28]: Changes recommended by 

OIRA. 

income, and it also. Based on evidence that the price elasticity of demand is significantly 

different over the short run and long run for other consumer goods (i.e., automobiles),29 

DOE assumed that the relative price elasticity declines over time. DOE estimated Comment [A29]: Changes recommended by 

OIRA. 

shipments in each standards case using the relative price elasticity along with the change 

in the relative price between a standards case and the base case. 

For details on the shipments analysis, see chapter 9 of the direct final rule TSD. 

2. Forecasted Efficiency in the Base Case and Standards Cases 

A key component of the NIA is the trend in energy efficiency forecasted for the 

base case (without new or amended standards) and each of the standards cases. Section 

IV.F.11 describes how DOE developed a base-case energy efficiency distribution (which 

29 S. Hymans. Consumer Durable Spending: Explanation and Prediction, Brookings Papers on Economic 

Activity, 1971. Vol. 1971, No. 1, pp. 234-239. 

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yields a shipment-weighted average efficiency) for each of the considered product classes 

for the first year of the forecast period. To project the trend in efficiency for standardsized dishwashers over the entire forecast period, DOE utilized the historical trend in 

shipment-weighted average efficiency from 2002 to 2010 as provided by AHAM and 

considered the potential effect of programs such as ENERGY STAR. The historical trend 

demonstrates that the shipment-weighted average annual energy use decreased by almost 

90 kWh from 2002 to 2010, reaching 309 kWh. DOE fit an exponential function to the 

2002 to 2010 data that indicated that the base-case shipment-weighted average annual 

energy use will asymptotically approach a value of 290 kWh by 2025 and remain at that 

level. For standard-sized dishwashers, DOE also considered an alternative base-case 

efficiency trend that was estimated using a different set of historical data. This trend is 

described in appendix 10-D of the direct final rule TSD. 

The historical record suggests that the likely market response to new or amended 

standards is that lower efficiency baseline models will roll up to the standard efficiency 

level, and some products will exceed the minimum requirements. To estimate efficiency 

trends in the standards cases, DOE has used “roll-up” and/or “shift” scenarios in its 

standards rulemakings. Under the “roll-up” scenario, DOE assumes: (1) product

efficiencies in the base case that do not meet the standard level under consideration 

would “roll-up” to meet the new standard level; and (2) product efficiencies above the

standard level under consideration would not be affected. Under the “shift” scenario, 

DOE re-orients the distribution above the new minimum energy conservation standard. 

Comment [A30]: Change recommended by 

OIRA. 

81 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOE determined that a roll-up scenario is most appropriate to establish the 

distribution of efficiencies for the year that compliance with revised dishwasher standards 

would be required and. For subsequent years. Similar, DOE assumed that efficiency 

would continue to improve in each standards case at the same rate as estimated for the 

base case, the shipment-weighted average annual energy use remains at the 2025until the 

max-tech efficiency level for the remainder of the forecast period. 

is reached. The details of DOE’s approach to forecast efficiency trends are described in 

chapter 10 of the direct final rule TSD. 

3. Total Installed Cost per Unit 

As discussed in section IV.F.1, DOE developed a dishwasher price trend based on 

an experience rate for miscellaneous household appliances. It used this trend to forecast 

the prices of dishwashers sold in each year in the forecast period. DOE applied the same 

values to forecast prices for each product class at each considered efficiency level. 

To evaluate the effect of uncertainty regarding the price trend estimates, DOE 

investigated the impact of different product price forecasts on the consumer net present 

value for the considered TSLs for residential dishwashers. In addition to the default price 

trend, DOE considered two product price sensitivity cases: (1) a high price decline case 

based on an exponential fit using PPI data for 1991 to 2010; (2) a low price decline case 

based on an experience rate derived using PPI and shipments data for 1991 to 2000. The 

derivation of these price trends and the results of these sensitivity cases are described in 

Comment [A31]: Changes recommended by 

OIRA. 

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appendix 10-D of the direct final rule TSDB of the direct final rule TSD. In the high price 

decline case, the NPV is significantly higher than in the default case. In the low price 

decline case, the NPV is slightly lower than in the default case. The rank order of the 

TSLs is the same in all of the cases. Comment [A32]: Change recommended by 

OIRA. 

4. National Energy and Water Savings 

For each year in the forecast period, DOE calculates the national energy and water 

savings for each standard level by multiplying the stock of products affected by the 

energy conservation standards by the per-unit annual energy savings. Cumulative energy 

and water savings are the sum of the NES for each year. 

To estimate the national energy savings expected from appliance standards, DOE 

uses a multiplicative factor to convert site energy consumption (at the home) into primary 

or source energy consumption (the energy required to convert and deliver the site 

energy). These conversion factors account for the energy used at power plants to generate 

electricity and losses in transmission and distribution. The conversion factors vary over 

time because of projected changes in generation sources (i.e., the power plant types 

projected to provide electricity to the country). The factors that DOE developed are 

marginal values, which represent the response of the system to an incremental decrease in 

consumption associated with appliance standards. For today’s rule, DOE used annual

site-to-source conversion factors based on the version of NEMS that corresponds to 

AEO2011, which provides energy forecasts through 2035. For 2036–2047, DOE used 

conversion factors that remain constant at the 2035 values. 

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Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed DOE to 

contract a study with the National Academy of Science (NAS) to examine whether the 

goals of energy efficiency standards are best served by measuring energy consumed, and 

efficiency improvements, at the actual point of use or through the use of the full-fuelcycle, beginning at the source of energy production. (Pub. L. No. 109-58 (August 8, 

2005)). NAS appointed a committee on “Point-of-Use and Full-Fuel-Cycle Measurement 

Approaches to Energy Efficiency Standards” to conduct the study, which was completed 

in May 2009. The NAS committee defined full-fuel-cycle energy consumption as 

including, in addition to site energy use: energy consumed in the extraction, processing, 

and transport of primary fuels such as coal, oil, and natural gas; energy losses in thermal 

combustion in power generation plants; and energy losses in transmission and 

distribution to homes and commercial buildings. 

In evaluating the merits of using point-of-use and full-fuel-cycle (FFC) measures, 

the NAS committee noted that DOE uses what the committee referred to as “extended 

site” energy consumption to assess the impact of energy use on the economy, energy 

security, and environmental quality. The extended site measure of energy consumption 

includes the energy consumed during the generation, transmission, and distribution of 

electricity but, unlike the full-fuel-cycle measure, does not include the energy consumed 

in extracting, processing, and transporting primary fuels. A majority of the NAS 

committee concluded that extended site energy consumption understates the total energy 

consumed to make an appliance operational at the site. As a result, the NAS committee 

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recommended that DOE consider shifting its analytical approach over time to use a fullfuel-cycle measure of energy consumption when assessing national and environmental 

impacts, especially with respect to the calculation of greenhouse gas (GHG) emissions. 

The NAS committee also recommended that DOE provide more comprehensive 

information to the public through labels and other means, such as an enhanced website. 

For those appliances that use multiple fuels (e.g., water heaters), the NAS committee 

indicated that measuring full-fuel-cycle energy consumption would provide a more 

complete picture of energy consumed and permit comparisons across many different 

appliances, as well as an improved assessment of impacts. 

In response to the NAS committee recommendations, DOE issued a notice of 

proposed policy for incorporating a full-fuel cycle analysis into the methods it uses to 

estimate the likely impacts of energy conservation standards on energy use and 

emissions. 75 FR 51423 (Aug. 20, 2010). After consideration of the comments received 

onIn its proposed final Statement of Policy, DOE has decided to use FFC measures of 

energy use and GHG and other emissions in the national impact analyses and 

environmental assessments included in future energy conservation standards 

rulemakings. 76 FR 51282 (Aug. 18, 2011). DOE will continue to rely upon NEMSbased estimates of primary stated that it intends to calculate FFC energy and emission 

impacts, but intends to use by applying conversion factors generated by the DOE 

Argonne National Laboratory (ANL) Greenhouse Gases, Regulated Emissions, and 

Energy Use in Transportation (GREET) model to convertthe NEMS-based results 

currently used by DOE. 76 FR 51282 (Aug. 18, 2011). Additionally, DOE will review 

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alternative approaches to estimating these estimates into estimates of factors and may 

decide to use a model other than GREET to estimate the FFC energy and emission 

impacts in any particular future appliance efficiency standards rulemaking. 

5. Net Present Value of Consumer Benefit 

The inputs for determining the net present value (NPV) of the total costs and 

benefits experienced by consumers of considered appliances are: (1) total annual installed 

cost, (2) total annual savings in operating costs, and (3) a discount factor. DOE calculates 

net savings each year as the difference between the base case and each standards case in 

total savings in operating costs and total increases in installed costs. DOE calculates 

operating cost savings over the life of each product shipped during the forecast period. 

In calculating the NPV, DOE multiplies the net savings in future years by a 

discount factor to determine their present value. For today’s direct final rule, DOE

estimated the NPV of appliance consumer benefits using both a 3-percent and a 7-percent 

real discount rate. DOE uses these discount rates in accordance with guidance provided 

by the Office of Management and Budget (OMB) to Federal agencies on the development 

of regulatory analysis.30 The discount rates for the determination of NPV are in contrast 

to the discount rates used in the LCC analysis, which are designed to reflect a consumer’s 

perspective. The 7-percent real value is an estimate of the average before-tax rate of 

return to private capital in the U.S. economy. The 3-percent real value represents the 

30 OMB Circular A-4 (Sept. 17, 2003), section E, “Identifying and Measuring Benefits and Costs. Available 

at: www.whitehouse.gov/omb/memoranda/m03-21.html. 

Comment [A33]: Changes recommended by 

OIRA. 

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“social rate of time preference,” which is the rate at which society discounts future 

consumption flows to their present value. 

H. Consumer Subgroup Analysis 

In analyzing the potential impact of new or amended standards on consumers, 

DOE evaluates the impact on identifiable subgroups of consumers (e.g., low-income 

households) that may be disproportionately affected by a national standard. DOE 

evaluates impacts on particular subgroups of consumers primarily by analyzing the LCC 

impacts and PBP for those particular consumers from alternative standard levels. Chapter 

11 in the direct final rule TSD describes the consumer subgroup analysis. For this rule, 

DOE analyzed the impacts of the considered standard levels on low-income households 

and senior-only households. 

I. Manufacturer Impact Analysis 

The following sections address the various steps taken to analyze the impacts of 

the amended standards on manufacturers. These steps include conducting a series of 

analyses, interviewing manufacturers, and evaluating the information received from 

interested parties during this rulemaking. 

1. Overview 

In determining whether an amended energy conservation standard for residential 

dishwashers subject to this rulemaking is economically justified, DOE is required to 

consider “the economic impact of the standard on the manufacturers and on the 

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consumers of the products subject to such standard.” (42 U.S.C. 6295(o)(2)(B)(i)(I)) The 

statute also calls for an assessment of the impact of any lessening of competition as 

determined by the Attorney General that is likely to result from the adoption of a 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) DOE conducted the MIA to estimate the 

financial impact of amended energy conservation standards on manufacturers, and to 

assess the impacts of such standards on employment and manufacturing capacity. 

The MIA is both a quantitative and qualitative analysis. The quantitative part of 

the MIA relies on the Government Regulatory Impact Model (GRIM), an industry cashflow model customized for the residential dishwashers covered in this rulemaking. See 

section IV.I.2 below, for details on the GRIM analysis. The qualitative part of the MIA 

addresses factors such as product characteristics, characteristics of particular firms, and 

market trends. The complete MIA is discussed in chapter 12 of the direct final rule TSD. 

DOE conducted the MIA in the three phases described below. 

a. Phase 1, Industry Profile 

In Phase 1 of the MIA, DOE prepared a profile of the residential dishwasher 

industry based on the market and technology assessment prepared for this rulemaking. 

Before initiating the detailed impact studies, DOE collected information on the present 

and past market structure and characteristics of the industry, tracking trends in market 

share data, product attributes, product shipments, manufacturer markups, and the cost 

structure for various manufacturers. 

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The profile also included an analysis of manufacturers in the industry using 

31 32 Security and Exchange Commission 10–K filings, Standard & Poor’s stock reports,

and corporate annual reports released by both public and privately held companies. DOE 

used this and other publicly available information to derive preliminary financial inputs 

for the GRIM including industry revenues, cost of goods sold, and depreciation, as well 

as selling, general, and administrative (SG&A), and research and development (R&D) 

expenses. 

b. Phase 2, Industry Cash Flow Analysis 

Phase 2 focused on the financial impacts of potential amended energy 

conservation standards on the industry as a whole. Amended energy conservation 

standards can affect manufacturer cash flows in three distinct ways: (1) by creating a 

need for increased investment, (2) by raising production costs per unit, and (3) by altering 

revenue due to higher per-unit prices and/or possible changes in sales volumes. DOE 

used the GRIM to model these effects in a cash-flow analysis of the residential 

dishwasher industry. In performing this analysis, DOE used the financial values derived 

during Phase 1 and the shipment assumptions from the NIA. 

c. Phase 3, Sub-Group Impact Analysis 

Using average cost assumptions to develop an industry-cash-flow estimate may 

not adequately assess differential impacts of amended energy conservation standards 

among manufacturer subgroups. For example, small businesses, manufacturers of niche 

31 Available online at www.sec.gov.
 32 Available online at www2.standardandpoors.com.
 

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products, or companies exhibiting a cost structure that differs significantly from the 

industry average could be more negatively affected. During the manufacturer interviews, 

DOE discussed financial topics specific to each manufacturer and obtained each 

manufacturer’s view of the industry as a whole. DOE reports the MIA impacts of

amended energy conservation standards by grouping together the impacts on 

manufacturers of certain product classes. While DOE did not identify any other subgroup 

of manufacturers of residential dishwashers that would warrant a separate analysis, DOE 

specifically investigated impacts on small business manufacturers. See section VI.B for 

more information. 

The MIA also addresses the direct employment impacts in manufacturing of 

dishwashers. DOE uses census data and information gained through manufacturer 

interviews in conjunction with the GRIM to estimate the domestic labor expenditures and 

number of domestic production workers in the base case and at each TSL from 2012 to 

2047. 

2. GRIM Analysis 

DOE uses the GRIM to quantify the changes in cash flow that result in a higher or 

lower industry value. The GRIM analysis is a standard, annual cash-flow analysis that 

incorporates manufacturer costs, markups, shipments, and industry financial information 

as inputs, and models changes in costs, distribution of shipments, investments, and 

manufacturer margins that could result from amended energy conservation standards. The 

GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning 

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with the base year of the analysis, 2012 (which accounts for the investments needed to 

bring products into compliance), and continuing to 2047. DOE uses the industry average 

weighted average cost of capital (WACC) of 8.5 percent, as this represents the minimum 

rate of return necessary to cover the debt and equity obligations manufacturers use to 

finance operations. 

DOE used the GRIM to compare INPV in the base case with INPV at various 

TSLs (the standards cases). The difference in INPV between the base and standards cases 

represents the financial impact of the amended standard on manufacturers. DOE collected 

this information from a number of sources, including publicly available data and 

interviews with a number of manufacturers. Additional details about the GRIM can be 

found in chapter 12 of the direct final rule TSD. 

a. GRIM Key Inputs 

Manufacturer Production Costs 

Changes in the manufacturer production costs (MPCs) of residential dishwashers 

can affect revenues, gross margins, and cash flow of the industry, making these product 

cost data key GRIM inputs for DOE’s analysis. DOE created separate cost curves for 

standard and compact product classes using data from tear-downs to develop both the 

baseline MPCs and the incremental costs that correspond to the proposed design options. 

The cost model also disaggregated the MPCs into material, labor, overhead, and 

depreciation. Later, in Phase 3 of the MIA, manufacturers validated these estimates and 

assumptions during interviews. DOE used the resulting MPCs and cost breakdowns as 

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described in section IV.C above, and further detailed in chapter 5 of the direct final rule 

TSD, for each efficiency level analyzed in the GRIM analysis. 

Base-Case Shipments Forecast 

The GRIM estimates manufacturer revenues based on total unit shipment 

forecasts and the distribution of these values by efficiency level and product class. 

Changes in the efficiency mix at each standard level affect manufacturer finances. For 

this analysis, the GRIM uses the NIA shipments forecasts from 2012 to 2047, the end of 

the analysis period. 

To calculate shipments, DOE developed a single shipment model for all 

dishwashers based on an analysis of key market drivers for residential dishwashers. For 

greater detail on the shipments analysis, see section IV.G.1 above or chapter 9 of the 

direct final rule TSD. 

Product and Capital Conversion Costs 

Amended energy conservation standards will cause manufacturers to incur 

conversion costs to bring their production facilities and product designs into compliance. 

For the MIA, DOE classified these costs into two major groups: (1) product conversion 

costs and (2) capital conversion costs. Product conversion costs are investments in 

research, development, testing, marketing, and other non-capitalized costs focused on 

making product designs comply with the amended energy conservation standard. Capital 

conversion costs are investments in property, plant, and equipment to adapt or change 

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existing production facilities so that new product designs can be fabricated and 

assembled. 

DOE based its estimates of both the product and capital conversion costs that 

would be required to meet each TSL on information obtained from manufacturer 

interviews, the design pathways considered in the engineering analysis, and market 

information about the number of platform and product families for each manufacturer. 

DOE’s estimates of the product and capital conversion costs for the dishwashers

addressed in this rulemaking can be found in section V.B.2 of today’s final rule and in 

chapter 12 of the final rule TSD. 

b. GRIM Scenarios
 

Standards-Case Shipment Forecasts
 

The MIA results presented in section V.B.2 all use shipments from the reference 

NIA scenario in the GRIM. To determine efficiency distributions in the standards case for 

the reference NIA scenario, DOE analyzed the roll-up scenario. In this scenario, DOE 

assumed that base case shipments of products that did not meet the new standard would 

roll up to meet the standard in the compliance year. See section IV.G.2 for a description 

of the standards case efficiency distribution. DOE also used a relative price elasticity that 

considers the possibility of higher first costs lowering total shipments in the standards 

case. 

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The reference NIA scenario used historical data to derive a price scaling index to 

forecast product costs. The MPCs and MSPs in the GRIM use the default price forecast 

for all scenarios. See section IV.G.4 for a discussion of DOE’s price forecasting 

methodology. 

Markup Scenarios 

MSP is equal to MPC times a manufacturer markup. The MSP includes direct 

manufacturing production costs (i.e., labor, material, and overhead estimated in DOE’s 

MPCs) and all non-production costs (i.e., SG&A, R&D, and interest), along with profit. 

To calculate the baseline manufacturer markup, DOE evaluated publicly available 

financial information for manufacturers of major household appliances whose product 

offerings include residential dishwashers. During manufacturer interviews, DOE received 

feedback supporting the calculated 1.24 baseline manufacturer markup. DOE used the 

baseline manufacturer markup for all products when modeling the base case in the 

GRIM. 

For the standards-case in the GRIM, DOE modeled two markup scenarios to 

represent the uncertainty regarding the potential impacts on prices and profitability for 

manufacturers following the implementation of amended energy conservation standards. 

For both GRIM markup scenarios, DOE placed no premium on higher efficiency 

products. This assumption is informed by a market structure in which over 96 percent of 

products currently adhere to ENERGY STAR standards, leaving little to no room for 

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differentiation by efficiency level alone, and was further supported by manufacturer 

interviews. The two standards case markup scenarios are (1) a flat markup scenario, and 

(2) a preservation of operating profit markup scenario. Modifying these markups from the 

base case to the standards cases yields different sets of impacts on manufacturers’

changing industry revenue and cash flow. 

The flat markup scenario assumes that the baseline markup of 1.24 is maintained 

for all products in the standards case. This scenario represents the upper bound of 

industry profitability as manufacturers are able to fully pass through additional costs due 

to standards to their customers under this scenario. 

The preservation of operating profit markup scenario is similar to the flat markup 

scenario with the exception that in the standards case, minimally compliant products lose 

a fraction of the baseline markup. This scenario is the lower bound profitability scenario 

and represents a more substantial impact to the dishwasher industry as manufacturers 

attempt to maintain the lowest possible prices for entry level products while securing the 

same level of operating profit they saw prior to amended standards. 

3. Manufacturer Interviews 

DOE interviewed manufacturers representing more than 80 percent of residential 

dishwasher sales. These interviews were in addition to those DOE conducted as part of 

the engineering analysis. DOE used these interviews to tailor the GRIM to incorporate 

unique financial characteristics of the industry. All interviews provided information that 

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DOE used to evaluate the impacts of potential amended energy conservation standards on 

manufacturer cash flows, manufacturing capacities, and employment levels. See appendix 

12-A of the direct final rule TSD for additional information on the MIA interviews. The 

following sections describe the most significant issues identified by manufacturers. 

a. Dishwasher Performance 

All manufacturers interviewed expressed concerns about the potential impacts of 

amended standards on product performance, citing several adverse and possibly severe 

consequences of standards above those agreed upon in the Joint Petition. For higher 

efficiency standards, the performance metrics manufacturers expect to be most severely 

impacted include wash performance, drying performance, cycle time, and the noise levels 

reached in operation. In considering these metrics, manufacturers anticipate negative 

reactions ranging from small but meaningful changes in consumer behavior to higher 

rates of service calls and returns. For efficiency standards well above those proposed in 

the Joint Petition, manufacturers foresee blanket rejection of poorly performing products 

in the market. In considering impacts to wash performance, manufacturers cited an 

increase in unnecessary rinsing or washing of dishes prior to loading the dishwasher, 

switching to a more aggressive cycle, and running multiple cycles when dishes are not 

adequately cleaned in a single cycle as the most likely changes in consumer behavior. 

Manufacturers went on to suggest that any of these changes would result in an increase in 

both energy and water consumption over that used by a dishwasher of satisfactory 

performance. To mitigate the impact of future standards on product performance, several 

manufacturers recommended the adoption of a performance metric into the test procedure 

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and standard. 

While all manufacturers suggested that the efficiency level specified in the Joint 

Petition would not likely have a substantial negative impact on wash performance, some 

manufacturers noted that standards above this level would result in a decrease in 

performance unless substantially higher-cost technology changes were implemented. The 

comments did not indicate the specific technology changes that would be required. Even 

without such technology changes, however, several manufacturers already sell products 

at efficiency levels above those specified by the Joint Petition, including the max-tech 

efficiency level. Accordingly, DOE evaluated these efficiency levels as part of this 

rulemaking. 

b. Test Procedures 

Manufacturers raised concerns over the current DOE dishwasher test procedure 

and the multitude of additional dishwasher test procedures in the field today. Several 

manufacturers suggested that the current DOE test procedure does not accurately capture 

the energy used by dishwashers in the field. These manufacturers cite the single cycle 

specification and lack of performance metrics in the test procedure as providing an easy 

avenue for circumvention of the standards. In the scenario described, manufacturers may 

optimize a particular cycle to perform well on the DOE test procedure with the implicit 

understanding that this cycle will not meet customer expectations and thus will not be 

used in the field as customers opt for a different, more energy-intensive cycle. 

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In contrast, other manufacturers raised concerns over expanding the test 

procedure to cover multiple cycles citing the additional testing burden this would 

generate. Similarly, some manufacturers raised concerns over how DOE would 

implement a performance test, noting that there already exist numerous performance tests 

in the industry including those developed by AHAM, IEC, and Consumer Reports and 

that each performance test procedure favors a different machine cycle algorithm. 

As discussed in sections II.A and II.B.4II.B.3, the DOE test procedure for 

residential dishwashers is found at Title 10 of the CFR part 430, subpart B, appendix C. 

DOE is considering amendments to the test procedure to incorporate measures of standby 

mode and off mode energy consumption in accordance with statutory requirements. DOE 

will consider concerns regarding active mode testing provisions, including those 

discussed above, in the test procedure rulemaking. 

c. Increased Competition 

Manufacturers of both baseline and high efficiency products anticipate an increase 

in competition in industry stemming from amended standards. Manufacturers whose 

market share is largely attributed to products currently below amended standards expect 

to see either the removal of features from higher efficiency units as a means to cut costs 

to maintain a low-cost minimally-compliant product, or the disappearance of entry level 

models as they are forced to add other features and cost in line with current higher 

efficiency products. If the latter approach prevails, manufacturers of higher efficiency 

products expect to see increased competition as manufacturers which previously focused 

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on low efficiency products move into their target segment of the market. As noted in 

section III.D.1.d, the Attorney General provides DOE with a determination and analysis 

of the impact of any lessening of competition that is likely to result from the imposition 

of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) 

d. Cumulative Regulatory Burden 

Several manufacturers noted that dishwashers are but one of a suite of appliances 

they produce and that the cumulative burden of research and development to meet 

standards, capital expenditure and retraining of staff to produce products at the new 

standards, and product testing to certify compliance of new products represent a 

significant burden when taken in combination across their various product lines. 

Manufacturers suggest that the ability to establish standards in a coordinated fashion by 

such vehicles as a joint petition and receiving adequate notice of DOE’s plans for

amended standards are both necessary elements in mitigating the cumulative burden and 

aligning changes in efficiency regulations with the product development cycle. 

Cumulative regulatory burden is discussed further in section V.B.2.e of today’s direct

final rule and chapter 12 of the direct final rule TSD. 

J. Employment Impact Analysis 

DOE considers employment impacts in the domestic economy as one factor in 

selecting a proposed standard. Employment impacts consist ofinclude direct and indirect 

impacts. Direct employment impacts are any changes in the number of employees of 

manufacturers of the appliance products that are the subject of this rulemakingto 

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standards, their suppliers, and related service firms. Indirect employment impacts are 

changes in national employment that occur due to the shift in expenditures and capital 

investment caused by the purchase and operation of more efficient appliances. The MIA 

addresses the direct employment impacts in manufacturing of dishwashers. The 

employment impact analysis addresses the indirect employment impacts. 

those impacts. Indirect employment impacts from standards consist of the net jobs 

created or eliminated in the national economy, other than in the manufacturing sector 

being regulated, caused by: (1) reduced spending by end users on energy; (2) reduced 

spending on new energy supply by the utility industry; (3) increased spending on new 

products to which the new standards apply; and (4) the effects of those three factors 

throughout the economy. DOE expects the net monetary savings from standards to be Comment [A34]: Changes recommended by 

OIRA. 

redirected to other forms of economic activity. DOE also expects those shifts in spending 

and economic activity to affect the demand for labor in the short term, as explained 

below. Comment [A35]: Change recommended by 

OIRA. 

One method for assessing the possible effects on the demand for labor of such shifts in 

economic activity is to compare sector employment statistics developed by the Labor 

Department’s Bureau of Labor Statistics (BLS).33 The BLS regularly publishes its 

estimates of the number of jobs per million dollars of economic activity in different 

sectors of the economy, as well as the jobs created elsewhere in the economy by this 

33 Data on industry employment, hours, labor compensation, value of production, and the implicit price 

deflator for output for these industries are available upon request by calling the Division of Industry 

Productivity Studies (202-691-5618) or by sending a request by e-mail to dipsweb@bls.gov. Available at: 

www.bls.gov/news.release/prin1.nr0.htm. 

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same economic activity. Data from BLS indicate that expenditures in the utility sector 

generally create fewer jobs (both directly and indirectly) than expenditures in other 

sectors of the economy. 34 There are many reasons for these differences, including wage 

differences and the fact that the utility sector is more capital-intensive and less laborintensive than other sectors. 35 

Energy conservation standards have the effect of reducing consumer utility bills. 

Because reduced consumer expenditures for energy likely lead to increased expenditures 

in other sectors of the economy, the general effect of efficiency standards is to shift 

economic activity from a less labor-intensive sector (i.e., the utility sector) to more laborintensive sectors (e.g., the retail and service sectors). Thus, based on the BLS data alone, 

DOE believes net national employment will increase due to shifts in economic activity 

resulting from amended standards for dishwashers. 

For the standard levels considered in today’s direct final rule, DOE estimated 

indirect national employment impacts using an input/output model of the U.S. economy 

Comment [A36]: Changes recommended by 

OIRA. 

called Impact of Sector Energy Technologies (ImSET). ImSET is a spreadsheet model of 

the U.S. economy that focuses on 187 sectors most relevant to industrial, commercial, 

and residential building energy use.version 3.1.1 (ImSET).36 ImSET is a special-purpose 

version of the “U.S. Benchmark National Input-Output” (I–O) model, which was 

34 See Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional InputOutput Modeling System (RIMS II). Washington, DC. U.S. Department of Commerce, 1992. 

35 See Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional InputOutput Modeling System (RIMS II). Washington, DC. U.S. Department of Commerce, 1992. 36 J. M. Roop, M. J. Scott, and R. W. Schultz, ImSET 3.1: Impact of Sector Energy Technologies, PNNL18412, Pacific Northwest National Laboratory, 2009. Available at: 

www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf 

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designed to estimate the national employment and income effects of energy-saving 

technologies. The ImSET software includes a computer-based I–O model having 

structural coefficients that characterize economic flows among the 187 sectors. ImSET’s

national economic I–O structure is based on a 2002 U.S. benchmark table, specially 

aggregated most relevant to the 187 sectors. industrial, commercial, and residential 

building energy use. 

DOE estimated changes in expenditures using the NIA spreadsheet. Usingnotes 

that ImSET, DOE estimated the net national, indirect is not a general equilibrium 

forecasting model, and understands the uncertainties involved in projecting employment 

impacts, especially changes in the later years of the analysis. Because ImSET does not 

incorporate price changes, the employment effects predicted by ImSET may overestimate actual job impacts over the long run for this rule. Because ImSET predicts small 

job impacts resulting from this rule, regardless of these uncertainties, the actual job 

impacts are likely to be negligible in the overall economy. DOE may consider the use of 

other modeling approaches for examining long run employment impacts. DOE also notes 

that the employment impacts estimated with ImSET for the entire economy differ from 

the employment impacts in the dishwasher manufacturing sector of potential amended 

efficiency standards for dishwashersestimated using the GRIM in the MIA. The 

methodologies used and the sectors analyzed in the ImSET and GRIM models are 

different. For more details on the employment impact analysis, see chapter 13 of the 

direct final rule TSD. 

Comment [A37]: Changes recommended by 

OIRA. 

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K. Utility Impact Analysis 

The utility impact analysis estimates several important effects on the utility 

industry of the adoption of new or amended standards. For this analysis, DOE used the 

NEMS-BT model to generate forecasts of electricity consumption, electricity generation 

by plant type, and electric generating capacity by plant type, that would result from each 

TSL. DOE obtained the energy savings inputs associated with efficiency improvements 

to considered products from the NIA. DOE conducts the utility impact analysis as a 

scenario that departs from the latest AEO Reference case. In the analysis for today’s rule, 

the estimated impacts of standards are the differences between values forecasted by 

NEMS-BT and the values in the AEO2011 Reference case. For more details on the utility 

impact analysis, see chapter 14 of the direct final rule TSD. 

L. Environmental Assessment 

Pursuant to the National Environmental Policy Act and the requirements of 42 

U.S.C. 6295(o)(2)(B)(i)(VI), DOE has prepared an environmental assessment (EA) of the 

impacts of the standards for residential dishwashers in today’s direct final rule, which it

has included as chapter 15 of the direct final rule TSD. At the conclusion of the 110-day 

comment period, DOE will determine whether issuance of a Finding of no Significant 

Impact (FONSI) is appropriate. If DOE issues a FONSI, it will be published separately in 

the Federal Register. 

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L. Emissions Analysis 

In the EAemissions analysis, DOE estimated the reduction in power sector 

emissions of CO2, NOX, and Hg usingfrom amended energy conservation standards for 

distribution transformers. DOE used the NEMS–BT computer model. In the EA, NEMS–

BT , which is run similarly to the AEO NEMS, except that dishwasherdistribution 

transformer energy use is reduced by the amount of energy saved (by fuel type) due to 

each TSL. The inputs of national energy savings come from the NIA spreadsheet model, 

while the output is the forecasted physical emissions. The net benefit of today’s direct

final ruleeach TSL is the difference between the forecasted emissions estimated by 

NEMS–BT at each TSL 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. For today’s rule, DOE used the AEO2011 and the most 

current version of NEMS-BT based on AEO2011, which incorporated projected effects 

of all emissions regulations promulgated as of January 31, 2011. 

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 the 48 contiguous 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 that would gradually replaced the Title IV program in those States and D.C. 

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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 remained 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 August 2July 6, 2010, EPA 

publishedissued the Transport Rule proposal (, a replacement for CAIR. 75 FR 45210 

(Aug. 2, 2010), and). On July 6, 2011, EPA issued the final Transport Rule, entitledtitled 

the Cross-State Air Pollution Rule (. 76 FR 48208) (Aug. (August 8, 2011). Because(See 

http://www.epa.gov/crossstaterule/). On December 30, 2011, however, the D.C. Circuit 

stayed the new rules while a panel of judges reviews them, and told EPA to continue 

enforcing CAIR (see EME Homer City Generation v. EPA, No. 11-1302, Order at *2 

(D.C. Cir. Dec. 30, 2011)). The AEO 20102011 NEMS-BT used for today’s direct final 

rule assumes the implementation of CAIR, DOE has not been able to take into account 

the effects of the Transport Rule for this rulemaking.37. 

The attainment of emissions caps typically is 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 

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

issuance of the Transport Rule. 

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emissions covered by the existing cap-and-trade system, the NEMS-BT modeling system 

that DOE uses to forecast emissions reductions currently indicates that no physical 

reductions in power sector emissions would occur for SO2. DOE acknowledges, however, 

that even though there is a cap on SO2 emissions and uncertainty whether efficiency 

standards would reduce SO2 emissions, it is possible that standards could reduce the 

compliance cost by reducing demand for SO2 allowances. 

As discussed above, the AEO 20102011 NEMS used for today’s direct final rule

assumes the implementation of CAIR, which established a cap on NOx emissions in 28 

eastern States and the District of Columbia. With CAIR in effect, energy conservation 

standards mayare expected to have little or no physical effect on theseNOx emissions in 

the 28 eastern States and the D.C. covered by CAIR, for the same reasons that they may 

have little effect on SO2 emissions. Today’sHowever, the standards will, however,would 

be expected to reduce NOX emissions in the 22 States not affected by the CAIR. For these 

22 states, DOE used NEMS–BT to forecast NOx emission reductions from the standards 

that are considered in today’s direct final rule.

Comment [A38]: Change recommended by 

OIRA. 

Similar to emissions of SO2 and NOX, future emissions of Hg would have been 

subject to emissions caps. In May 2005, EPA issued the Clean Air Mercury Rule 

(CAMR). 70 FR 28606 (May 18, 2005). CAMR would have permanently capped 

emissions of mercury for new and existing coal-fired power plants in all States by 2010. 

However, on February 8, 2008, the D.C. Circuit issued a decision in New Jersey v. 

Environmental Protection Agency, in which it vacated CAMR. 517 F.3d 574 (D.C. Cir. 

106 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2008). EPA has decided to develop emissions standards for power plants under the Clean 

Air Act (Section 112), consistent with the D.C. Circuit’s opinion on CAMR. See . 

Pending EPA's forthcoming revisions to the rule, DOE is excluding CAMR from its 

environmental analysis. In the absence of CAMR, a DOE standard likely would reduce 

Hg emissions, and DOE used NEMS-BT to estimate those emission reductions. However, 

DOE continues to review the impact of rules that reduce energy consumption on Hg 

emissions, and may revise its assessment of Hg emission reductions in future 

rulemakings. 

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

pollutants (NESHAPs) for mercury and certain other pollutants emitted from coal and oilfired 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 NEMS-BT based on AEO2011, which does not incorporate the NESHAPs. DOE 

expects that future versions of the NEMS-BT model will reflect the implementation of 

the NESHAPs. 

M. Monetizing Carbon Dioxide and Other Emissions Impacts 

As part of the development of this direct final rule, 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 considered TSLs. In order to make this calculation 

similar to the calculation of the NPV of consumer benefit, DOE considered the reduced 

emissions expected to result over the lifetime of products shipped in the forecast period 

Comment [A39]: Changes recommended by 

OIRA. 

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for each TSL. This section summarizes the basis for the monetary values used for each of 

these emissions and presents the benefits estimates considered. 

For today’s direct final rule, DOE is relying on a set of values for the social cost

of carbon (SCC) that was developed by an interagency process. A summary of the basis 

for these values is provided below, and a more detailed description of the methodologies 

used is provided in appendix 15-A of the direct final rule TSD. 

1. Social Cost of Carbon 

Under Executive Order 12866, agencies must, to the extent permitted by law, 

“assess both the costs and the benefits of the intended regulation and, recognizing that

some costs and benefits are difficult to quantify, propose or adopt a regulation only upon 

a reasoned determination that the benefits of the intended regulation justify its costs.” The 

purpose of the SCC estimates presented here is to allow agencies to incorporate the 

monetized social benefits of reducing CO2 emissions into cost-benefit analyses of 

regulatory actions that have small, or “marginal,” impacts on cumulative global 

emissions. The estimates are presented with an acknowledgement of the many 

uncertainties involved and with a clear understanding that they should be updated over 

time to reflect increasing knowledge of the science and economics of climate impacts. 

As part of the interagency process that developed these SCC estimates, technical 

experts from numerous agencies met on a regular basis to consider public comments, 

explore the technical literature in relevant fields, and discuss key model inputs and 

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assumptions. The main objective of this process was to develop a range of SCC values 

using a defensible set of input assumptions grounded in the existing scientific and 

economic literatures. In this way, key uncertainties and model differences transparently 

and consistently inform the range of SCC estimates used in the rulemaking process. 

a. Monetizing Carbon Dioxide Emissions 

The SCC is an estimate of the monetized damages associated with an incremental 

increase in carbon emissions in a given year. It is intended to include (but is not limited 

to) changes in net agricultural productivity, human health, property damages from 

increased flood risk, and the value of ecosystem services. Estimates of the SCC are 

provided in dollars per metric ton of carbon dioxide. 

When attempting to assess the incremental economic impacts of carbon dioxide 

emissions, the analyst faces a number of serious challenges. A recent report from the 

National Research Council38 points out that any assessment will suffer from uncertainty, 

speculation, and lack of information about (1) future emissions of greenhouse gases, (2) 

the effects of past and future emissions on the climate system, (3) the impact of changes 

in climate on the physical and biological environment, and (4) the translation of these 

environmental impacts into economic damages. As a result, any effort to quantify and 

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

science, economics, and ethics and should be viewed as provisional. 

38 National Research Council. Hidden Costs of Energy: Unpriced Consequences of Energy Production and 

Use. National Academies Press: Washington, DC. 2009. 

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Despite the serious limits of both quantification and monetization, SCC estimates 

can be useful in estimating the social benefits of reducing carbon dioxide emissions. 

Consistent with the directive quoted above, the purpose of the SCC estimates presented 

here is to make it possible for agencies to incorporate the social benefits from reducing 

carbon dioxide emissions into cost-benefit analyses of regulatory actions that have small, 

or “marginal,” impacts on cumulative global emissions. Most Federal regulatory actions 

can be expected to have marginal impacts on global emissions. 

For such policies, the agency can estimate the benefits from reduced (or costs 

from increased) emissions in any future year by multiplying the change in emissions in 

that year by the SCC value appropriate for that year. The net present value of the benefits 

can then be calculated by multiplying each of these future benefits by an appropriate 

discount factor and summing across all affected years. This approach assumes that the 

marginal damages from increased emissions are constant for small departures from the 

baseline emissions path, an approximation that is reasonable for policies that have effects 

on emissions that are small relative to cumulative global carbon dioxide emissions. For 

policies that have a large (non-marginal) impact on global cumulative emissions, there is 

a separate question of whether the SCC is an appropriate tool for calculating the benefits 

of reduced emissions. This concern is not applicable to this notice, and DOE does not 

attempt to answer that question here. 

At the time of the preparation of this notice, the most recent interagency estimates 

of the potential global benefits resulting from reduced CO2 emissions in 2010, expressed 

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in 2010$, were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emission 

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,39 

although preference is given to consideration of the global benefits of reducing CO2 

emissions. 

It is important to emphasize that the interagency process is committed to updating 

these estimates as the science and economic understanding of climate change and its 

impacts on society improves over time. Specifically, the interagency group has set a 

preliminary goal of revisiting the SCC values within 2 years or at such time as 

substantially updated models become available, and to continue to support research in 

this area. In the meantime, the interagency group will continue to explore the issues 

raised by this analysis and consider public comments as part of the ongoing interagency 

process. 

b. Social Cost of Carbon Values Used in Past Regulatory Analyses 

To date, economic analyses for Federal regulations have used a wide range of 

values to estimate the benefits associated with reducing carbon dioxide emissions. In the 

final model year 2011 CAFE rule, the U.S. Department of Transportation (DOT) used 

both a “domestic” SCC value of $2 per ton of CO2 and a “global” SCC value of $33 per

ton of CO2 for 2007 emission reductions (in 2007$), increasing both values at 2.4 percent 

39 It is recognized that this calculation for domestic values is approximate, provisional, and highly 

speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global 

damages over time. 

111 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

per year. 40 DOT also included a sensitivity analysis at $80 per ton of CO2. See Average 

Fuel Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 FR 

14196 (March 30, 2009) (Final Rule); Final Environmental Impact Statement Corporate 

Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011­

2015 at 3-90 (Oct. 2008) (Available at: www.nhtsa.gov/fuel-economy). A domestic SCC 

value is meant to reflect the value of damages in the United States resulting from a unit 

change in carbon dioxide emissions, while a global SCC value is meant to reflect the 

value of damages worldwide. 

A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton 

of CO2 (in 2006$) for 2011 emission reductions (with a range of $0$14 for sensitivity 

analysis), also increasing at 2.4 percent per year. See Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 

(Proposed Rule); Draft Environmental Impact Statement Corporate Average Fuel 

Economy Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 3-58 

(June 2008) (Available at: www.nhtsa.gov/fuel-economy). A regulation for packaged 

terminal air conditioners and packaged terminal heat pumps finalized by DOE in October 

of 2008 used a domestic SCC range of $0 to $20 per ton CO2 for 2007 emission 

reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008) In addition, EPA’s 2008

Advance Notice of Proposed Rulemaking for Greenhouse Gases identified what it 

described as “very preliminary” SCC estimates subject to revision. See Regulating 

Greenhouse Gas Emissions Under the Clean Air Act, 73 FR 44354 (July 30, 2008). 

40 Throughout this section, references to tons of CO2 refer to metric tons. 

112 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPA’s global mean values were $68 and $40 per ton CO2 for discount rates of 

approximately 2 percent and 3 percent, respectively (in 2006$ for 2007 emissions). 

In 2009, an interagency process was initiated to offer a preliminary assessment of 

how best to quantify the benefits from reducing carbon dioxide emissions. To ensure 

consistency in how benefits are evaluated across agencies, the Administration sought to 

develop a transparent and defensible method, specifically designed for the rulemaking 

process, to quantify avoided climate change damages from reduced CO2 emissions. The 

interagency group did not undertake any original analysis. Instead, it combined SCC 

estimates from the existing literature to use as interim values until a more comprehensive 

analysis could be conducted. The outcome of the preliminary assessment by the 

interagency group was a set of five interim values: global SCC estimates for 2007 (in 

2006 dollars) of $55, $33, $19, $10, and $5 per ton of CO2. These interim values 

represent the first sustained interagency effort within the U.S. government to develop an 

SCC for use in regulatory analysis. The results of this preliminary effort were presented 

in several proposed and final rules and were offered for public comment in connection 

with proposed rules, including the joint EPA-DOT fuel economy and CO2 tailpipe 

emission proposed rules. 

c. Current Approach and Key Assumptions 

Since the release of the interim values, the interagency group reconvened on a 

regular basis to generate improved SCC estimates, which were used in this direct final 

rule. Specifically, the group considered public comments and further explored the 

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technical literature in relevant fields. The interagency group relied on three integrated 

assessment models (IAMs) commonly used to estimate the SCC: the FUND, DICE, and 

PAGE models.41 These models are frequently cited in the peer-reviewed literature and 

were used in the last assessment of the Intergovernmental Panel on Climate Change. Each 

model was given equal weight in the SCC values that were developed. 

Each model takes a slightly different approach to model how changes in 

emissions result in changes in economic damages. A key objective of the interagency 

process was to enable a consistent exploration of the three models while respecting the 

different approaches to quantifying damages taken by the key modelers in the field. An 

extensive review of the literature was conducted to select three sets of input parameters 

for these models: climate sensitivity, socio-economic and emissions trajectories, and 

discount rates. A probability distribution for climate sensitivity was specified as an input 

into all three models. In addition, the interagency group used a range of scenarios for the 

socio-economic parameters and a range of values for the discount rate. All other model 

features were left unchanged, relying on the model developers’ best estimates and

judgments. 

The interagency group selected four SCC values for use in regulatory analyses. 

Three values are based on the average SCC from three integrated assessment models, at 

discount rates of 2.5, 3, and 5 percent. The fourth value, which represents the 95th 

percentile SCC estimate across all three models at a 3-percent discount rate, is included 

41 The models are described in appendix 15-A of the direct final rule TSD. 

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to represent higher-than-expected impacts from temperature change further out in the 

tails of the SCC distribution. 

Table IV.13 Social Cost of CO2, 2010–2050 (in 2007 dollars per metric ton) 

Discount Rate 

5% 

Avg 

3% 2.5% 

Avg Avg 

3% 

95th 

2010 

2015 

2020 

2025 

2030 

2035 

2040 

2045 

2050 

4.7 

5.7 

6.8 

8.2 

9.7 

11.2 

12.7 

14.2 

15.7 

21.4 

23.8 

26.3 

29.6 

32.8 

36.0 

39.2 

42.1 

44.9 

35.1 

38.4 

41.7 

45.9 

50.0 

54.2 

58.4 

61.7 

65.0 

64.9 

72.8 

80.7 

90.4 

100.0 

109.7 

119.3 

127.8 

136.2 

It is important to recognize that a number of key uncertainties remain, and that 

current SCC estimates should be treated as provisional and revisable since they will 

evolve with improved scientific and economic understanding. The interagency group also 

recognizes that the existing models are imperfect and incomplete. The National Research 

Council report mentioned above points out that there is tension between the goal of 

producing quantified estimates of the economic damages from an incremental ton of 

carbon and the limits of existing efforts to model these effects. There are a number of 

concerns and problems that should be addressed by the research community, including 

research programs housed in many of the agencies participating in the interagency 

process to estimate the SCC. 

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DOE recognizes the uncertainties embedded in the estimates of the SCC used for 

cost-benefit analyses. As such, DOE and others in the U.S. Government intend to 

periodically review and reconsider those estimates to reflect increasing knowledge of the 

science and economics of climate impacts, as well as improvements in modeling. In this 

context, statements recognizing the limitations of the analysis and calling for further 

research take on exceptional significance. 

In summary, in considering the potential global benefits resulting from reduced 

CO2 emissions, DOE used the most recent values identified by the interagency process, 

adjusted to 2010$ using the GDP price deflator. For each of the four cases specified, the 

values used for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton 

avoided (values expressed in 2010$).42 To monetize the CO2 emissions reductions 

expected to result from amended standards for dishwashers, DOE used the values 

identified in Table A1 of the “Social Cost of Carbon for Regulatory Impact Analysis 

Under Executive Order 12866,” which is reprinted in appendix 16-A of the direct final 

rule TSD, appropriately adjusted to 2010$. To calculate a present value of the stream of 

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

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

2. Valuation of Other Emissions Reductions 

DOE investigated the potential monetary benefit of reduced NOX emissions from 

the TSLs it considered. As noted above, amended energy conservation standards would 

42 Table A1 presents SCC values through 2050. For DOE’s calculation, it derived values after 2050 using 

the 3-percent per year escalation rate used by the interagency group. 

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reduce NOX emissions in those 22 States that are not affected by the CAIR, in addition to 

the reduction in site NOX emissions nationwide. DOE estimated the monetized value of 

NOX emissions reductions resulting from each of the TSLs considered for today’s direct

final rule based on environmental damage estimates from the literature. Available 

estimates suggest a very wide range of monetary values, ranging from $370 per ton to 

$3,800 per ton of NOX from stationary sources, measured in 2001$ (equivalent to a range 

of $450 to $4,623 per ton in 2010$).43 In accordance with OMB guidance, DOE 

conducted 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.44 

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 monetizes Hg in its rulemakings. 

V. Analytical Results 

The following section addresses the results from DOE’s analyses with respect to

potential energy conservation standards for residential dishwashers. It addresses the TSLs 

examined by DOE, the projected impacts of each of these levels if adopted as energy 

conservation standards for dishwashers, and the standards levels that DOE sets forth in 

43 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. 2006. Washington, DC. 44 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003). 

117 
 

 

 

 

 

 

 

 

 

 

 

today’s direct final rule. Additional details regarding DOE’s analyses are contained in the 

publicly available direct final rule TSD supporting this notice. 

A. Trial Standard Levels 

DOE analyzed the benefits and burdens of four TSLs for residential dishwashers. 

These TSLs were developed using combinations of efficiency levels for the standard and 

compact product classes analyzed by DOE. DOE presents the results for those TSLs in 

today’s final rule. DOE presents the results for all efficiency levels that it analyzed in the 

direct final rule TSD. Table V.1Table V.1 presents the TSLs and the corresponding 

efficiency levels for dishwashers. TSL 4 represents the maximum technologically 

feasible (“max-tech”) improvements in energy efficiency for residential dishwashers. 

TSL 3 consists of the next efficiency level below the max-tech level for standard 

dishwashers, and the max-tech level for compacts. The efficiency levels in TSL 2 

correspond to the recommended levels in the Joint Petition. TSL 1 consists of the first 

efficiency levels considered above the baseline. 

Table V.1 Trial Standard Levels for Residential Dishwashers 

TSL Standard Compact 

CSL 

Annual Energy 

Use (kWh) CSL 

Annual Energy 

Use (kWh) 

1 1 324 1 222 

2 2 307 1 222 

3 4 234 2 154 

4 5 180 2 154 

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B. Economic Justification and Energy Savings 

1. Economic Impacts on Individual Consumers 

a. Life-Cycle Cost and Payback Period 

Consumers affected by new or amended standards usually experience higher 

purchase prices and lower operating costs. Generally, the impacts on individual 

consumers are best captured by changes in LCC and by the PBP. Therefore, DOE 

calculated the LCC and PBP analyses for the potential standard levels considered in this 

rulemaking. DOE’s LCC and PBP analyses provided key outputs for each TSL, which 

are reported by dishwasher product class in Table V.2 and Table V.3. Each table 

includesThe LCC and its components refer to the average total LCC and values at each 

efficiency level. The average LCC savings, (averaged over all sample consumers), as 

well as the fraction of product consumers for which the LCC will decrease (net benefit), 

increase (net cost), or exhibit no change (no impact)), are relative to the base-case 

forecastefficiency distribution. The last column in the tables is the median PBP for the Comment [A40]: Changes recommended by 

OIRA. 

consumer purchasing a design that complies with the TSL. DOE presents the median PBP 

because it is the most statistically robust measure of the PBP. The results for each 

potential standard level are relative to the efficiency distribution in the base case (no 

amended standards). DOE based the LCC and PBP analyses on the range of energy 

consumption under conditions of actual product use. 

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Table V.2 LCC and PBP Results for Standard Dishwashers 

Payback 

Life-Cycle Cost (2010$) LCC Savings Period 

TSL 

Efficiency 

Level 

(kWh/yr) 

(years) 

Installed Discounted Average Percent of households that 

experience Median Cost Operating 

Cost 

LCC Savings 

(2010$) Net 

Cost 

No 

Impact 

Net 

Benefit 

1 324 $656 $445 $1,101 $1 2% 96% 2% 5.9 

2 307 $674 $411 $1,086 $3 19% 64% 17% 11.8 

3 234 $734 $318 $1,052 $41 30% 20% 50% 6.6 

4 180 $745 $232 $977 $108 23% 9% 68% 4.5 

Table V.3 LCC and PBP Results for Compact Dishwashers 

Payback 

Life-Cycle Cost (2010$) LCC Savings Period 

TSL 

Efficiency 

Level 

(kWh/yr) 

(years) 

Installed Discounted Average Percent of households that 

experience Median Cost Operating 

Cost 

LCC Savings 

2010$ Net 

Cost 

No 

Impact 

Net 

Benefit 

1, 2 222 $623 $297 $920 $12 7% 76% 18% 0.3 

3, 4 154 $638 $206 $844 $52 5% 50% 44% 2.1 

For standard-sized dishwashers, DOE also considered an alternative base-case 

efficiency distribution that uses a different set of historical data. LCC and PBP results 

using this distribution are described in appendix 8-F of the direct final rule TSD. Comment [A41]: Change recommended by 

OIRA. 

b. Consumer Subgroup Analysis 

As described in section IV.H, DOE determined the impact of the considered TSLs 

on low-income households and senior-only households.45 Table V.4 compares the 

average LCC savings at each efficiency level for the two consumer subgroups, along with 

the average LCC savings for the entire sample for each product class for dishwashers. For 

today’s standards, the average LCC savings for low-income households and senior-only 

45 DOE did not analyze subgroup impacts for compact dishwashers because the saturation of these products 

is extremely small. 

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households at the considered efficiency levels are not substantially different from the 

average for all households. At higher efficiency levels the average LCC savings for these 

subgroups are somewhat lower than the average for all households. Chapter 11 of the Comment [A42]: Change recommended by 

OIRA. 

direct final rule TSD presents the complete LCC and PBP results for the two subgroups. 

Table V.4 Standard Dishwashers: Comparison of Average LCC Savings for 

Consumer Subgroups and All Households 

TSL Low-income 

households 

Senior-only 

households 

All 

Households 

2010$ 

1 $0 $0 $1 

2 $3 $2 $3 

3 $26 $24 $41 

4 $84 $78 $108 

c. Rebuttable Presumption Payback 

As discussed above, EPCA provides a rebuttable presumption that an 

energy conservation standard is economically justified if the increased purchase cost for a 

product that meets the standard is less than three times the value of the first-year energy 

savings resulting from the standard. In calculating a rebuttable presumption payback 

period for the considered standard levels, DOE used discrete values rather than 

distributions for input values, and, as required by EPCA, based the energy use calculation 

on the DOE test procedures for residential dishwashers. As a result, DOE calculated a 

single rebuttable presumption payback value, and not a distribution of payback periods, 

for each efficiency level. 

Table V.5 presents the average rebuttable presumption payback periods for the 

considered TSLs. While DOE examined the rebuttable-presumption criterion, it 

121 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

considered whether the standard levels considered for today’s rule are economically 

justified through a more detailed analysis of the economic impacts of those levels 

pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The results of that analysis serve as the basis for 

DOE to evaluate the economic justification for a potential standard level (thereby 

supporting or rebutting the results of any preliminary determination of economic 

justification). 

Table V.5 Dishwashers: Rebuttable PBPs 

Trial Standard Level 

1 2 3 4 

Standard (years) 5.40 5.51 5.57 4.00 

Compact (years) 0.23 0.23 1.02 1.02 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate the impact of amended energy conservation 

standards on manufacturers of residential dishwashers. The section below describes the 

expected impacts on manufacturers at each TSL. Chapter 12 of the direct final rule TSD 

explains the analysis in further detail. 

a. Industry Cash Flow Analysis Results 

DOE modeled two scenarios using different markup assumptions. Each scenario 

results in a unique set of cash flows and corresponding industry value at each TSL. These 

assumptions correspond to the bounds of a range of market responses that DOE 

anticipates could occur in the standards case. The tables below depict the financial 

impacts on manufacturers (represented by changes in INPV) and the conversion costs 

DOE estimates manufacturers would incur at each TSL. The first table corresponds to the 

122 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

flat markup scenario and reflects the lower (less severe) bound of impacts whereas the 

second table corresponds to the preservation of operating profit scenario and reflects the 

upper bound of impacts. 

The INPV results refer to the difference in industry value between the base case 

and the standards case, which DOE calculated by summing the discounted industry cash 

flows from the base year (2012) through the end of the analysis period. The discussion 

also notes the difference in cash flow between the base case and the standards case in the 

year before the compliance date of potential amended energy conservation standards. 

This figure provides an estimate of the required conversion costs relative to the cash flow 

generated by the industry in the base case. 

Table V.6 Manufacturer Impact Analysis for Residential Dishwashers – 

Flat Markup Scenario 

Units Base Case Trial Standard Level 

1 2 3 4 

INPV (2010$ 

millions) 637.5 593.2 563.6 508.6 491.9 

Change in 

INPV 

(2010$ 

millions) - (44.3) (73.9) (128.9) (145.6) 

(%) - -7.0% -11.6% -20.2% -22.8% 

Product 

Conversion 

Costs 

(2010$ 

millions) - 27.8 34.9 66.5 76.7 

Capital 

Conversion 

Costs 

(2010$ 

millions) - 45.5 59.1 195.4 226.3 

Total 

Conversion 

Costs 

(2010$ 

millions) - 73.2 94.0 261.9 303.0 

123 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.7 Manufacturer Impact Analysis for Residential Dishwashers – Tiered 

Markup Scenario 

Units Base Case Trial Standard Level 

1 2 3 4 

INPV (2010$ 

millions) 637.5 592.2 552.9 463.1 434.8 

Change in 

INPV 

(2010$ 

millions) - (45.3) (84.6) (174.4) (202.7) 

(%) - -7.1% -13.3% -27.4% -31.8% 

Product 

Conversion 

Costs 

(2010$ 

millions) - 27.8 34.9 66.5 76.7 

Capital 

Conversion 

Costs 

(2010$ 

millions) - 45.5 59.1 195.4 226.3 

Total 

Conversion 

Costs 

(2010$ 

millions) - 73.2 94.0 261.9 303.0 

Because standard dishwashers represent over 99 percent of shipments in the year 

leading up to amended standards, changes to this product class contribute the majority of 

impacts to INPV across all TSLs analyzed in this rulemaking. 

At TSL 1, DOE estimates impacts on INPV to range from -$44.3 million to 

-$45.3 million, or a change in INPV of -7.0 percent to -7.1 percent. At this level, industry 

free cash flow is estimated to decrease by approximately 56.5 percent to $21.9 million, 

compared to the base-case value of $50.5 million in the year leading up to the amended 

energy conservation standards. As TSL 1 corresponds to current ENERGY STAR 

standards, and these products represent over 96 percent of shipments in the year leading 

up to amended standards, only a very small fraction of the market is affected at this 

efficiency level. In either markup scenario, the impact to INPV at TSL 1 stems from the 

conversion costs required to switch production lines from manufacturing baseline units to 

those meeting the standards set at EL 1 for both product classes. 

124 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a large fraction of the energy used in dishwashing is associated with heating 

the wash water, the design options proposed to meet this efficiency level relate primarily 

to minimizing the amount of wash water through spray-arm optimization and enabling 

greater control over the wash water temperature. Both of these practices are in common 

use in higher efficiency platforms across the industry and contribute to an MPC of 

$209.25 for standard dishwashers. Because the industry already produces a substantial 

number of products at this efficiency level, product and capital conversion costs are 

limited to 73.2 million, which accounts for switching production lines from baseline 

products to existing higher efficiency platforms. 

TSL 2 represents the efficiency level set forth in the Joint Petition, and establishes 

a compliance date of 2013 as compared the 2018 compliance date for the other TSLs. At 

TSL 2, DOE estimates impacts on INPV to range from -$73.9 million to -$84.6 million, 

or a change in INPV of -11.6 percent to -13.3 percent. At this level, industry free cash 

flow is estimated to decrease by approximately 192.2 percent to -$39.2 million, compared 

to the base-case value of $42.5 million in the year leading up to the amended energy 

conservation standards. As with TSL 1, the impact to INPV at TSL 2 stems from the 

conversion costs required to switch production lines from manufacturing baseline units to 

those meeting the standards set at EL 2 for both product classes. At TSL 2, these impacts 

grow as the number of products requiring changes grows from 3.8 percent of shipments 

in the year leading up to amended standards to 36.1 percent. 

125 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a large fraction of the energy used in dishwashing is associated with heating 

wash water, the design options proposed to meet this efficiency level relate primarily to 

minimizing the amount of wash water through additional optimization of the water lines 

as well as upgrades to higher efficiency pumps and electronic controls. Incorporating 

these design options leads to an estimated MPC of $222.80 for standard products. While 

a significant fraction of dishwashers currently employ these energy and water saving 

measures, the product and capital conversion costs rise to $94.0 million (as compared to 

$73.2 million for TSL 1), to account for the additional switching of production lines to 

higher efficiency platforms. 

At TSL 3, DOE estimates impacts on INPV to range from -$128.9 million to 

-$174.4 million, or a change in INPV of -20.2 percent to -27.4 percent. At this level, 

industry free cash flow is estimated to decrease by approximately 212.6 percent to -$56.8 

million, compared to the base-case value of $50.5 million in the year leading up to the 

amended energy conservation standards. While TSL 3 returns the compliance date to 

2018 (5 years after the compliance date for TSL 2) the impact to INPV is more severe 

than at TSLs 1 and 2 becauseas less than 20 percent of shipments in the year leading up 

to amended standards meet or exceed this efficiency level. As such, the capital and 

product conversion costs required to bring these products into compliance rise 

significantly to a total of $261.9 million, $167.9 million more than at TSL 2. These 

conversion costs stem from both the research programs needed to develop such optimized 

products and the capital investment required to change over the majority of production 

lines to produce these high efficiency products. 

Comment [A43]: Changes recommended by 

OIRA. 

126 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The design options proposed to meet efficiency standards at TSL 3 include 

exchanging a heated drying system for a condensation drying system, further optimizing 

the hydraulic system (extending to a redesign of both the sump and water lines), and 

incorporating a flow meter, temperature control, and a humidity sensor to finely tune 

water consumption, temperature, and the drying cycle. Beyond component exchanges 

alone, the design options proposed at TSL 3 extend to include control strategies that 

would reduce the wash and rinse water temperatures. The component changes required to 

enable these improvements contribute to an MPC of $266.16 for standard dishwashers, 

$43.37 above that at TSL 2. 

At TSL 4, DOE estimates impacts on INPV to range from -$145.6 million to 

-$202.7 million, or a change in INPV of -22.8 percent to -31.8 percent. At this level, 

industry free cash flow is estimated to decrease by approximately -246.0 percent to 

-$73.7 million, compared to the base-case value of $50.5 million in the year leading up to 

the amended energy conservation standards. TSL 4 represents the max-tech efficiency 

level for all dishwashers. The effects on INPV result from similar sources as TSL 3, but 

the fraction of products in the market that currently meet this standard is reduced to less 

than 9 percent in the year leading up to amended standards. As such, standards at TSL 4 

would affect nearly all platforms and will result in substantial capital conversion costs 

associated with improvements to nearly all production facilities. Because so few products 

exist at this level today, nearly all manufacturers would face complete redesigns for 

products to meet this standard. Accordingly, the product conversion costs increase to 

127 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reflect this substantial research effort. The total conversion cost required to meet 

standards at TSL 5 is approximately $303.0 million—a $41.1 million increase from TSL 

4. 

The design options proposed to meet the efficiency levels specified at TSL 4 start 

with those at TSL 3, but replace the in-line flow-through water heater with one that is 

integrated with the pump and eliminate the fan used to circulate air during drying. Where 

these design options have little impact on the product MPC, contributing to only a $7.77 

increase over that at TSL 3, they significantly impact INPV because of the large 

conversion costs associated with developing and producing these highly optimized 

products. 

b. Impacts on Employment 

DOE used the GRIM to estimate the domestic labor expenditures and number of 

domestic production workers in the base case and at each TSL from 2012 to 2047. DOE 

used the labor content of each product and the manufacturing production costs from the 

engineering analysis to estimate the total annual labor expenditures associated with 

residential dishwashers sold in the United States. Using statistical data from the most 

recent U.S. Census Bureau’s 2009 “Annual Survey of Manufactures,” the results of the 

engineering analysis,” and interviews with manufacturers to determine the inputs 

necessary, DOE estimates that 95 percent of residential dishwashers sold in the United 

States are manufactured domestically and hence that portion of total labor expenditures is 

attributable to calculate industry-wide labor expenditures and domestic employment 

128 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

levelslabor. Labor expenditures for the manufacture of a product are a function of the 

labor intensity of the product, the sales volume, and an assumption that wages in real 

terms remain constant. 

Comment [A44]: Changes recommended by 

OIRA. 

In the GRIM, DOE used the labor content of each product and the manufacturing 

production costs from the engineering analysis to estimate the annual labor expenditures 

in the residential dishwasher industry. DOE used Census data and interviews with 

manufacturers to estimate the portion of the total labor expenditures that is attributable to 

domestic labor. 

Using the GRIM, DOE forecasts the domestic labor expenditure for residential 

dishwasher production labor in 2018 will be approximately $248.7 million. Using the 

$27.03 hourly wage rate including fringe benefits and 2,003 production hours per year 

per employee found in the 2009 ASM, DOE estimates there will be approximately 4,593 

domestic production workers involved in manufacturing residential dishwashers in 2018, 

the year in which amended standards would go into effect for TSL 1, TSL 3, and TSL 4. 

In addition, DOE estimates that 1,120 non-production employees in the United States will 

support residential dishwasher production.46 The employment spreadsheet of the 

residential dishwasher GRIM shows the annual domestic employment impacts in further 

detail. Comment [A45]: Changes recommended by 

OIRA. 

129 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The production worker estimates in this section cover workers only up to the linesupervisor level who are directly involved in fabricating and assembling dishwashers 

within an Original Equipment Manufacturer (OEM) facility. Workers performing 

services that are closely associated with production operations, such as material handling 

with a forklift, are also included as production labor. 

The employment impacts shown in represent the potential production 

employment that could result following amended energy conservation standards. The 

upper end of the results in this table estimates the total potential increase in the number of 

production workers after amended energy conservation standards. To calculate the total 

potential increase, DOE assumed that manufacturers continue to produce the same scope 

of covered products in domestic production facilities and domestic production is not 

shifted to lower-labor-cost countries. Because there is a real risk of manufacturers 

evaluating sourcing decisions in response to amended energy conservation standards, the 

lower end of the range of employment results in includes the estimated total number of 

U.S. production workers in the industry who could lose their jobs if all existing 

production were moved outside of the United States. While the results present a range of 

employment impacts following the compliance date of amended energy conservation 

standards, the discussion below also includes a qualitative discussion of the likelihood of 

negative employment impacts at the various TSLs. FinallyAdditionally, the employment 

impacts shown are independent of the employment impacts from the broader U.S. 

economy, which are documented in chapter 13 of the direct final rule TSD. 

Comment [A46]: Changes recommended by 

OIRA. 

130 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.8 

Using the GRIM, DOE estimates depicts the potential levels of production 

employment that in the absence of could result following amended energy conservation 

standards, there would be 4,593 as calculated by the GRIM. The employment levels 

shown reflect the scenario in which manufacturers continue to produce the same scope of 

covered products in domestic production workers involved in manufacturing residential 

dishwashers in 2018, the compliance year for TSL 1, TSL 3,facilities and TSL 4. DOE 

estimates that the number of domestic production workers in 2013, the compliance year 

for TSL 2, would not change appreciably from this value. Using 2009 Census Bureau 

data and interviews with manufacturers, DOE estimates that approximately 95 percent of 

residential dishwashers sold in the United States are manufactured domestically. shows 

the range of the impacts of potential is not shifted to lower-labor-cost countries. If all 

existing production were moved outside of the United States, the expected impact to 

domestic manufacturing employment would be a loss of 4,593 jobs, the equivalent of the 

total base case employment. Because there is a risk of manufacturers evaluating sourcing 

decisions in response to amended energy conservation standards, the expected impact to 

domestic production employment falls between the potential increases as shown in Table 

V.8 on U.S. production workers in the , and the levels of job loss associated with all 

domestic dishwasher industrymanufacturing moving outside of the United States. The 

discussion below includes a qualitative evaluation of the likelihood of negative domestic 

production employment impacts at the various TSLs. 

131 

Comment [A47]: Changes recommended by 

OIRA. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.8 Potential Changes in the Total Number of Domestic Residential 

Dishwasher Production Workers in 2018* 

Trial Standard Level 

Base Case 1 2 3 4 

Total Number of 

Domestic Production 

Workers in 2018 

(without changes in 

production locations) 

4,593 4,601 4,679 4,658 4,799 

Potential Changes in 

Domestic Production 

Workers in 2018** 

- 8 ­

(4,593) 

86 ­

(4,593) 

65 ­

(4,593) 

206 ­

(4,593) 

*The compliance date for residential dishwashers at TSL 1, TSL 3, and TSL 4 is 2018. At TSL 2, the 

compliance date is 2013 as specified by the Joint Petition. 

**DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative 

numbers. 

All examined TSLs show relatively minor impacts on domestic employment 

levels relative to total industry employment. At all TSLs, most of the design options 

analyzed by DOE do not greatly alter the labor content of the final product. For example, 

longer or more complex wash cycles or improved sump designs involve one-time 

changes to the final product but do not significantly change the number of steps required 

for the final assembly of the dishwasher (which would add labor). Because many 

manufacturers have recently introduced high efficiency products in the United States that 

meet or exceed the standards in today’s final rule, it is unlikely today’s direct final rule

would greatly impact the sourcing decisions of these manufacturers. However, at higher 

TSLs, some of the design options analyzed greatly impact the ability of manufacturers to 

make product changes within existing platforms. The very large upfront capital costs at 

these levels could influence the decision of some manufacturers to relocate some or all of 

thetheir domestic production of these dishwashers to lower labor cost countries. 

Comment [A48]: Changes recommended by 

OIRA. 

Comment [A49]: Changes recommended by 

OIRA. 

132 
 

 

 

 

 

 

 

 

 

 

 

 

 

c. Impacts on Manufacturing Capacity 

Nearly 64 percent of shipments of residential dishwashers already comply with 

the amended energy conservation standards as agreed upon in the Joint Petition and 

established in this rulemaking. Every manufacturer that ships standard dishwashers offers 

products that meet these amended energy conservation standards. Because manufacturers 

would need to make only minor platform changes and/or increase the production of 

existing products by the 2013 compliance date, the experience of multiple manufacturers 

that already produce standards-compliant dishwashers would allow the industry to meet 

the amended energy conservation standards proposed in the Joint Petition without any 

significant impact to manufacturing capacity in the interim. 

d. Impacts on Sub-Groups of Manufacturers 

Using average cost assumptions to develop an industry cash-flow estimate may 

not be adequate for assessing differential impacts among manufacturer subgroups. Small 

manufacturers, niche equipment manufacturers, and manufacturers exhibiting a cost 

structure substantially different from the industry average could be affected 

disproportionately. DOE analyzed the impacts to small business, as discussed in section 

VI.B. DOE did not identify any other subgroups for residential dishwashers for this 

rulemaking. 

e. Cumulative Regulatory Burden 

While any one regulation may not impose a significant burden on manufacturers, 

the combined effects of several impending regulations may have serious consequences 

133 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for some manufacturers, groups of manufacturers, or an entire industry. Assessing the 

impact of a single regulation may overlook this cumulative regulatory burden. In addition 

to energy conservation standards, other regulations can significantly affect 

manufacturers’ financial operations. Multiple regulations affecting the same 

manufacturer can strain profits and can lead companies to abandon product lines or 

markets with lower expected future returns than competing products. For these reasons, 

DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings 

pertaining to appliance efficiency. 

Manufacturers provided comment on some of these regulations during interviews. 

DOE summarizes and addresses these comments in section IV.I.3. For the cumulative 

regulatory burden, DOE attempts to quantify or describe the impacts of other Federal 

regulations that have a compliance date within approximately 3 years of the compliance 

date of this rulemaking. Most of the major regulations identified by DOE that meet this 

criterion are other energy conservation standards for products and equipment made by 

manufacturers of residential dishwashers. See chapter 12 of the direct final rule TSD for 

the results of DOE’s analysis of the cumulative regulatory burden. 

3. National Impact Analysis 

a. Significance of Energy Savings 

To estimate the energy savings attributable to potential standards for dishwashers, 

DOE compared the energy consumption of those products under the base case to their 

anticipated energy consumption under each TSL. Table V.9 presents DOE’s projections 

134 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of the national energy savings and national water savings for each TSL considered for 

dishwashers.47 The savings were calculated using the approach described in section IV.G. 

Chapter48 For standard-sized dishwashers, DOE also considered an alternative base-case 

efficiency trend that was estimated using a different set of historical data. Results 

calculated using this trend are described in appendix 10-D of the direct final rule TSD 

presents tables that also show the magnitude of the energy savings if the savings are 

discounted at rates of 7 percent and 3 percent. Discounted energy savings represent a 

policy perspective in which energy savings realized farther in the future are less 

significant than energy savings realized in the nearer term. 

Table V.9 Dishwashers: Cumulative National Energy and Water Savings (2018-

2047)* 

Comment [A50]: Footnote recommended by 

OIRA. 

Comment [A51]: Changes recommended by 

OIRA. 

Trial Standard Level 

1 2 3 4 

Energy (quads) 0.02 0.07 0.94 1.59 

Water (trillion gallons) 0.01 0.14 0.56 1.71 

* For TSL 2, the impacts are counted for 2013–2047. 

b. Net Present Value of Consumer Costs and Benefits 

DOE estimated the cumulative NPV to the nation of the total costs and savings for 

consumers that would result from particular standard levels for dishwashers. In 

accordance with the OMB’s guidelines on regulatory analysis (OMB Circular A-4, 

47 National energy and water savings are cumulative over a 30-year period. Any savings for products 

entering the housing stock in this 30-year period which occur beyond the 30-year time limit are not 

reported in the national totals. 

48 Chapter 10 of the direct final rule TSD presents tables that also show the magnitude of the energy 

savings if the savings are discounted at rates of 7 percent and 3 percent. Discounted energy savings 

represent a policy perspective in which energy savings realized farther in the future are less significant than 

energy savings realized in the nearer term. 

135 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

section E, September 17, 2003), DOE calculated NPV using both a 7-percent and a 3­

percent real discount rate. The 7-percent rate is an estimate of the average before-tax rate 

of return to private capital in the U.S. economy, and reflects the returns to real estate and 

small business capital as well as corporate capital. DOE used this discount rate to 

approximate the opportunity cost of capital in the private sector, since recent OMB 

analysis has found the average rate of return to capital to be near this rate. In addition, 

DOE used the 3-percent rate to capture the potential effects of standards on private 

consumption (e.g., through higher prices for products and the purchase of reduced 

amounts of energy). This rate represents the rate at which society discounts future 

consumption flows to their present value. This rate can be approximated by the real rate 

of return on long-term government debt (i.e., yield on Treasury notes minus annual rate 

of change in the Consumer Price Index), which has averaged about 3 percent on a pre-tax 

basis for the last 30 years. 

Table V.10 shows the consumer NPV results for each TSL DOE considered for 

dishwashers, using a 3-percent and a 7-percent discount rate. The impacts are counted 

over the lifetime of products purchased in 2018–2047 for TSLs 1, 3 and 4, and in 2013–

2047 for TSL 2. 

Table V.10 Dishwashers: Cumulative Net Present Value of Consumer Benefits for 

Products Shipped in 2018–2047* 

Discount rate Trial Standard Level 

1 2 3 4 

Billion 2010$ 

3 percent 0.12 0.46 6.51 17.45 

7 percent 0.03 0.08 1.96 5.88 

* For TSL 2, the impacts are counted over the lifetime of products shipped in 2013–2047. 

136 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The NPV results presented in Table V.10 are based on the default product price 

trend. As discussed in section IV.G.3, DOE developed several sensitivity cases with 

alternative forecasts of future prices of dishwashers. The impact of these alternative 

forecasts on the NPV results is presented in appendix 10-C of the direct final rule TSD. 

For standard-sized dishwashers, DOE also considered an alternative base-case 

efficiency trend that was estimated using a different set of historical data. NPV results 

calculated using this trend are described in appendix 10-D of the direct final rule TSD. 

Circular A-4 requires agencies to present analytical results, including separate 

schedules of the monetized benefits and costs that show the type and timing of benefits 

and costs. Circular A-4 also directs agencies to consider the variability of key elements 

underlying the estimates of benefits and costs. DOE believes its standard 30-year 

analysis is fully compliant with Circular A-4. For this rulemaking, DOE undertook an 

additional sensitivity analysis of its standard 30-year analysis, in compliance with 

Circular A-4, using a 9-year analytical period. The choice of a 9-year period is a proxy 

for the timeline in EPCA for the review of the energy conservation standard established 

in this direct final rule and potential revision of and compliance with a new standard for 

dishwashers.49 The timeframe established in EPCA may not be statistically relevant with 

49 EPCA requires DOE to review its standards at least once every 6 years, and requires, for certain products 

including dishwashers, a 3 year period after any new standard is promulgated before compliance is 

required, except that in no case may any new standards be required within 6 years of the compliance date of 

the standards established in this direct final rule. While adding a 6-year review to the 3-year compliance 

period adds up to 9 years, DOE notes that it may undertake reviews at any time within the 6 year period 

and that the 3-year compliance date may yield to the 6-year backstop. A 9-year analysis period does not 

137 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

regard to the product lifetime, product manufacturing cycles or other factors specific to 

dishwashers. DOE notes that the review timeframe established in EPCA generally does 

not overlap with the product lifetime, product manufacturing cycles or other factors 

specific to dishwashers. Thus, this information is presented for informational purposes 

only and is not indicative of any change in DOE’s analytical methodology. 

The sensitivity analysis results based on a 9-year analytical period are presented 

below. Table IV.11Table IV.11 presents DOE’s forecasts of the national energy savings 

and national water savings for each TSL for dishwashers.50 Table IV.12 shows the 

consumer NPV results for each TSL DOE considered for dishwashers, using a 3-percent 

and a 7-percent discount rate. For determination of the NPV, the impacts are counted 

over the lifetime of products purchased in 2018–2026 for TSLs 1, 3 and 4, and in 2013–

2021 for TSL 2 (note that the NPV estimate incorporates all of the operating cost savings 

of dishwashers purchased in the 9 year analytical period). Comment [A52]: Changes recommended by 

OIRA. 

Table V.11 Dishwashers: Cumulative National Energy and Water Savings, NineYear Analysis Period (2018-2026)* 

Trial Standard Level 

1 2 3 4 

Energy (quads) 0.00 0.01 0.13 0.22 

Water (trillion gallons) 0.00 0.02 0.08 0.24 

* For TSL 2, the impacts are counted for 2013–2021. 

reflect the variability that may occur in the timing of standards reviews and the fact that for some consumer 

products, the compliance period is 5 years rather than 3 years. 

50 National energy and water savings are cumulative over the 9-year period. Any savings for products 

entering the housing stock in this 9-year period which occur beyond the 9-year time limit are not reported 

in the national totals. In contrast, the social benefit and cost estimates include the benefits and costs that 

are incurred over the lifetime of the dishwashers irrespective of when they are purchased. 

138 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.12 Dishwashers: Cumulative Net Present Value of Consumer Benefits for 

Products Shipped in 2018–2026, Nine-Year Analysis Period* 

Discount rate Trial Standard Level 

1 2 3 4 

Billion 2010$ 

3 percent 0.04 0.07 2.15 6.01 

7 percent 0.02 0.00 0.93 2.89 

* For TSL 2, the impacts are counted over the lifetime of products shipped in 2013–2021. 

c. Impacts on Employment 

DOE develops estimates of the indirect employment impacts of potential 

standards on the economy in general. As discussed above, DOE expects energy 

conservation standards for dishwashers to reduce energy bills for consumers of those 

products, and the resulting net savings to be redirected to other forms of economic 

activity. These expected shifts in spending and economic activity could affect the demand 

for labor. As described in section IV.J, to estimate these effects, DOE used an 

input/output model of the U.S. economy. The model indicates to estimate indirect 

employment impacts of the TSLs that theDOE considered TSLs would have a very small 

impact on employment in this rulemaking. DOE understands that there are uncertainties 

involved in projecting employment impacts, especially changes in the U.S. Chapter 

13later years of the direct final rue TSD presents detailedanalysis. Therefore, DOE 

generated results for near-term timeframes, where these uncertainties are reduced. 

The input/output model suggestsresults suggest that today’s standards are likely to 

slightly increasehave negligible impact on the net demand for labor in the economy. 

However, the projected gains are veryThe net change in jobs is so small relative to 

totalthat it would be imperceptible in national labor statistics and might be offset by 

Comment [A53]: Changes recommended by 

OIRA. 

139 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

other, unanticipated effects on employment (currently approximately 120 million). 

Moreover, neither the BLS data nor the input/output model DOE uses includes the quality 

or wage level. Chapter 13 of the jobsdirect final rule TSD presents detailed results. 

4. Impact on Utility or Performance of Products 

As presented in section III.D.1.d of this notice, DOE concluded that the TSL 

adopted in this direct final rule would not reduce the utility or performance of the 

dishwashers under consideration in this rulemaking. Manufacturers of these products 

currently offer units that meet or exceed today’s standards. (42 U.S.C. 

6295(o)(2)(B)(i)(IV)) 

5. Impact of Any Lessening of Competition 

DOE has also considered any lessening of competition that is likely to result from 

amended standards. The Attorney General determines the impact, if any, of any lessening 

of competition likely to result from a proposed standard, and transmits such 

determination to DOE, together with an analysis of the nature and extent of such impact. 

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

DOE published a NOPR containing energy conservation standards identical to 

those set forth in today’s direct final rule and transmitted a copy of today’s direct final 

rule and the accompanying TSD to the Attorney General, requesting that the DOJ provide 

its determination on this issue. DOE will consider DOJ’s comments on the rule in 

Comment [A54]: Changes recommended by 

OIRA. 

140 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

determining whether to proceed with the direct final rule. DOE will also publish and 

respond to DOJ’s comments in the Federal Register in a separate notice. 

6. Need of the Nation to Conserve Energy 

An improvement in the energy efficiency of the products subject to today’s rule is 

likely to improve the security of the nation’s energy system by reducing overall demand 

for energy. Reduced electricity demand may also improve the reliability of the electricity 

system. As a measure of this reduced demand, presents the estimated reduction in 

electricity generating capacity in 2047 for the TSLs that DOE considered in this 

rulemaking. 

Table . Reduction in Electric Generating Capacity in 2047 Under Trial Standard 

Levels for Dishwashers 

TSL 1 TSL 2 TSL 3 TSL 4 

Gigawatts 

Generation Capacity Reduction 0.011 0.001 0.719 0.8 

Energy savings from amended standards for residential dishwashers are expected 

to produce environmental benefits in the form of reduced emissions of air pollutants and 

greenhouse gases associated with electricity production. Table V.13 provides DOE’s 

estimate of cumulative CO2, NOX, and Hg emissions reductions that would be expected 

to result from the TSLs considered in this rulemaking. In the environmental assessment 

(chapter 15 of the direct final rule TSD), DOE reports annual CO2, NOX, and Hg 

emissions reductions for each TSL. 

Comment [A55]: Changes recommended by 

OIRA. 

141 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As discussed in section IV.L, DOE has not reported SO2 emissions reductions 

from power plants because the NEMS-BT modeling system that DOE uses to forecast 

emissions reductions currently indicates that no physical reductions in power sector 

emissions would occur for SO2. DOE also did not include NOX emissions reduction from 

power plants in States subject to emissions caps because in such a case an energy 

conservation standard would likely not affect the overall level of NOX emissions in those 

States.51 

Table V.13 Emissions Reduction Estimated for Dishwasher Trial Standard Levels 

(cumulative in 2018–2047)* 

TSL 1 TSL 2 TSL 3 TSL 4 

CO2 (million metric tons) 1.15 4.06 65.02 98.62 

NOX (thousand tons) 0.96 3.54 54.27 83.31 

Hg (tons) 0.004 0.000 0.274 0.304 

* For TSL 2, the impacts are counted for 2013–2047. 

DOE also estimated monetary benefits likely to result from the reduced emissions 

of CO2 and NOX that DOE estimated for each of the TSLs considered for dishwashers.

As discussed in section IV.M, DOE used values for the SCC developed by an interagency 

process. The four values for CO2 emissions reductions in 2010 resulting from that process 

(expressed in 2010$) are $4.9/ton (the average value from a distribution that uses a 5­

percent discount rate), $22.3/ton (the average value from a distribution that uses a 3­

percent discount rate), $36.5/ton (the average value from a distribution that uses a 2.5­

percent discount rate), and $67.6/ton (the 95th-percentile value from a distribution that 

51 EPA issued the final Cross-State Air Pollution Rule on July 6, 2011 (www.epa.gov/crossstaterule/, last 

visited July 15, 2011).). The Cross-State Air Pollution Rule will replace CAIR. In the Environmental 

Assessmentemissions analysis for thesetoday’s amended energy conservation standards, DOE’s discussion

and conclusions about NOx emissions assume the implementation of CAIR. In future rulemakings, DOE 

will adjust its relevant models to assume the implementation of the Cross-State Air Pollution Rule. 

142 
 

 

 

 

 

 

 

 

 

uses a 3-percent discount rate). The values for later years are higher due to increasing 

damages as the magnitude of climate change increases. For each of the four cases, DOE 

calculated a present value of the stream of annual values using the same discount rate as 

used in the studies upon which the dollar-per-ton values are based. Table V.14 presents 

the global values of CO2 emissions reductions at each TSL. DOE calculated domestic 

values as a range from 7 percent to 23 percent of the global values. Those results are 

presented in Table V.15. 

Table V.14 Estimates of Global Present Value of CO2 Emissions Reductions Under 

Dishwasher Trial Standard Levels 

TSL 

Million 2010$ 

5% discount 

rate, 

average* 

3% discount 

rate, 

average* 

2.5% discount 

rate, average* 

3% discount 

rate, 95th 

percentile* 

1 4.88 25.9 44.2 78.9 

2 16.1 79.5 133 242 

3 278 1484 2534 4515 

4 427 2284 3904 6951 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. 

Table V.15 Estimates of Domestic Present Value of CO2 Emissions Reductions 

Under Dishwasher Trial Standard Levels 

TSL 

Million 2010$ 

5% discount 

rate, average* 

3% discount 

rate, average* 

2.5% discount 

rate, average* 

3% discount rate, 

95th percentile* 

1 0 to 1 2 to 6 3 to 10 6 to 18 

2 1 to 4 6 to 18 9 to 31 17 to 56 

3 19 to 64 104 to 341 177 to 583 316 to 1039 

4 30 to 98 160 to 525 273 to 898 487 to 1599 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. 

143 
 

 

 

 

 

 

 

 

 

 

 

 

 

DOE is well aware that scientific and economic knowledge about the contribution 

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

resulting damages to the world economy continues to evolve rapidly. Thus, any value 

placed in this rulemaking on reducing CO2 emissions is subject to change. DOE, together 

with other Federal agencies, will continue to review various methodologies for estimating 

the monetarysocial value of reductions in CO2 and other GHG emissions. This ongoing 

review will consider the comments on this subject that are part of the public record for 

this and other rulemakings, as well as other methodological assumptions and issues. 

However, consistent with DOE’s legal obligations, and taking into account the

uncertainty involved with this particular issue, DOE has included in this final rule the 

most recent values and analyses resulting from the ongoing interagency review process. 

DOE also estimated a range for the cumulative monetary value of the economic 

benefits associated with NOX emissions reductions anticipated to result from amended 

standards for residential dishwashers. The dollar-per-ton values that DOE used are 

discussed in section IV.M. Table V.16 presents the cumulative present values for each 

TSL calculated using 3-percent and 7-percent discount rates. 

Table V.16 Estimates of Present Value of NOX Emissions Reductions Under 

Dishwasher Trial Standard Levels 

Comment [A56]: Change recommended by 

OIRA. 

TSL 3% discount rate 

(million 2010$) 

7% discount rate 

(million 2010$) 

1 0 to 3 0 to 1 

2 1 to 10 0 to 5 

3 14 to 148 6 to 59 

4 22 to 230 9 to 91 

144 
 

 

 

 

 

 

 

 

 

 

 

 

The NPV of the monetized benefits associated with emissions reductions can be 

viewed as a complement to the NPV of the consumer savings calculated for each TSL 

considered in this rulemaking. Table V.17 and Table V.18 present the NPV values that 

result from adding the estimates of the potential economic benefits resulting from 

reduced CO2 and NOX emissions in each of four valuation scenarios to the NPV of 

consumer savings calculated for each TSL considered in this rulemaking, at both a 7­

percent and a 3-percent discount rate. The CO2 values used in the columns of each table 

correspond to the four scenarios for the valuation of CO2 emission reductions presented 

in section IV.M. 

Table V.17 Results of Adding Net Present Value of Consumer Savings (at 7-Percent 

Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX 

Emissions Reductions Under Dishwasher Trial Standard Levels 

TSL 

Consumer NPV at 7% Discount Rate added with: 

SCC Value of 

$4.9/metric ton 

CO2* and Low 

Value for 

NOX ** 

(billion 2010$) 

SCC Value of 

$22.3/metric ton 

CO2* and Medium 

Value for NOX ** 

(billion 2010$) 

SCC Value of 

$36.5/metric ton 

CO2* and Medium 

Value for NOX ** 

(billion 2010$) 

SCC Value of 

$67.6/metric ton 

CO2* and High 

Value for NOX ** 

(billion 2010$) 

1 0.04 0.06 0.08 0.11 

2 0.10 0.16 0.21 0.33 

3 2.24 3.48 4.53 6.53 

4 6.31 8.21 9.83 12.92 

* These label values represent the global SCC of CO2 in 2010, in 2010$. Their present values have been
 

calculated with scenario-consistent discount rates. 

** Low Value corresponds to $450 per ton of NOX emissions. Medium Value corresponds to $2,537 per
 

ton of NOX emissions. High Value corresponds to $4,623 per ton of NOX emissions.
 

145 
 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.18 Results of Adding Net Present Value of Consumer Savings (at 3-Percent 

Discount Rate) to Net Present Value of Monetized Benefits from CO2 and NOX 

Emissions Reductions Under Dishwasher Trial Standard Levels 

TSL 

Consumer NPV at 3% Discount Rate added with: 

SCC Value of 

$4.9/metric ton 

CO2* and Low 

Value for 

NOX ** 

(billion 2010$) 

SCC Value of 

$22.3/metric ton 

CO2* and Medium 

Value for NOX ** 

(billion 2010$) 

SCC Value of 

$36.5/metric ton 

CO2* and Medium 

Value for NOX ** 

(billion 2010$) 

SCC Value of 

$67.6/metric ton 

CO2* and High 

Value for NOX ** 

(billion 2010$) 

1 0.13 0.15 0.17 0.20 

2 0.48 0.54 0.60 0.71 

3 6.80 8.07 9.12 11.17 

4 17.90 19.86 21.48 24.63 

* These label values represent the global SCC of CO2 in 2010, in 2010$. Their present values have been
 

calculated with scenario-consistent discount rates. 

** Low Value corresponds to $450 per ton of NOX emissions. Medium Value corresponds to $2,537 per
 

ton of NOX emissions. High Value corresponds to $4,623 per ton of NOX emissions.
 

Although adding the value of consumer savings to the values of emission 

reductions provides a valuable perspective, two issues should be considered. First, the 

national operating cost savings are domestic U.S. consumer monetary savings that occur 

as a result of market transactions, while the value of CO2 reductions is based on a global 

value. Second, the assessments of operating cost savings and CO2 savings are performed 

with different methods that use quite different time frames for analysis. The national 

operating cost savings is measured for the lifetime of products shipped in 2013–2047. 

The SCC values, on the other hand, reflect the present value of all future climate-related 

impacts resulting from the emission of one ton of carbon dioxide in each year. These 

impacts continue well beyond 2100. 

146 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

7. Other Factors 

The Secretary of Energy, in determining whether a standard is economically 

justified, may consider any other factors that the Secretary deems to be relevant. (42 

U.S.C. 6295(o)(2)(B)(i)(VI))) In developing the direct final rule, DOE has also 

considered the Joint Petition submitted to DOE. DOE recognizes the value of consensus 

agreements submitted by parties in accordance with 42 U.S.C. 6295(p)(4) and has 

weighed the value of such consensus in establishing the standards set forth in today’s

final rule. DOE has encouraged the submission of consensus agreements as a way to get 

diverse interested parties together, to develop an independent and probative analysis 

useful in DOE standard setting, and to expedite the rulemaking process. DOE also 

believes that standard levels recommended in the consensus agreement may increase the 

likelihood for regulatory compliance, while decreasing the risk of litigation. 

C. Conclusion 

When considering proposed standards, the new or amended energy conservation 

standard that DOE adopts for any type (or class) of covered product shall be designed to 

achieve the maximum improvement in energy efficiency that the Secretary determines is 

technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In 

determining whether a standard is economically justified, the Secretary must determine 

whether the benefits of the standard exceed its burdens, considering to the greatest extent 

practicable the seven statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) 

The new or amended standard must also “result in significant conservation of energy.” 

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

147 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department considered the impacts of standards at each TSL, beginning with 

maximum technologically feasible level, to determine whether that level was 

economically justified. Where the max-tech level was not justified, DOE then considered 

the next most efficient level and undertook the same evaluation until it reached the 

highest efficiency level that is both technologically feasible and economically justified 

and saves a significant amount of energy. 

To aid the reader as DOE discusses the benefits and/or burdens of each trial 

standard level, tables present a summary of the results of DOE’s quantitative analysis for 

each TSL. In addition to the quantitative results presented in the tables, DOE also 

considers other burdens and benefits that affect economic justification. Those include the 

impacts on identifiable subgroups of consumers, such as low-income households and 

seniors, who may be disproportionately affected by a national standard. Section V.B.1 

presents the estimated impacts of each TSL for these subgroups. 

DOE also notes that the economics literature provides a wide-ranging discussion 

of how consumers trade off upfront costs and energy savings in the absence of 

government intervention. Much of this literature attempts to explain why consumers 

appear to undervalue energy efficiency improvements. This undervaluation suggests that 

regulation that promotes energy efficiency can produce significant net private gains (as 

well as producing social gains by, for example, reducing pollution). There is evidence 

that consumers undervalue future energy savings as a result of (1) a lack of information; 

148 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of 

sufficient savings to warrant delaying or altering purchases (for example, an inefficient 

ventilation fan in a new building or the delayed replacement of a water pump); (4) 

excessive focus on the short term, in the form of inconsistent weighting of future energy 

cost savings relative to available returns on other investments; (5) computational or other 

difficulties associated with the evaluation of relevant tradeoffs; and (6) a divergence in 

incentives (that is, renter versus owner; builder versus purchaser). Other literature 

indicates that with less than perfect foresight and a high degree of uncertainty about the 

future, consumers may trade off these types of investments at a higher than expected rate 

between current consumption and uncertain future energy cost savings. 

In DOE’s current regulatory analysis, potential changes in the benefits and costs 

of a regulation due to changes in consumer purchase decisions are included in two ways: 

First, if consumers forego a purchase of a product in the standards case, this decreases 

sales for product manufacturers and the cost to manufacturers is included in the MIA. 

Second, DOE accounts for energy savings attributable only to products actually used by 

consumers in the standards case; if a regulatory option decreases the number of products 

used by consumers, this decreases the potential energy savings from an energy 

conservation standard. DOE provides detailed estimates of shipments and changes in the 

volume of product purchases in chapter 9 of the direct final rule TSD. However, DOE’s 

current analysis does not explicitly control for heterogeneity in consumer preferences, 

149 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

preferences across subcategories of products or specific features, or consumer price 

sensitivity variation according to household income. (Reiss and White, 2005).52 

While DOE is not prepared at present to provide a fuller quantifiable framework 

for estimating the benefits and costs of changes in consumer purchase decisions due to an 

energy conservation standard, DOE is committed to developing a framework that can 

support empirical quantitative tools for improved assessment of the consumer welfare 

impacts of appliance standards. DOE has posted a paper that discusses the issue of 

consumer welfare impacts of appliance energy efficiency standards, and potential 

enhancements to the methodology by which these impacts are defined and estimated in 

the regulatory process.53 DOE is committed to developing a framework that can support 

empirical quantitative tools for improved assessment of the consumer welfare impacts of 

appliance standards. DOE welcomes comments on how to more fully assess the potential Comment [A57]: Changes recommended by 

OIRA. 

impact of energy conservation standards on consumer choice and how to quantify this 

impact in its regulatory analysis in future rulemakings. 

1. Benefits and Burdens of TSLs Considered for Residential Dishwashers 

52 P.C. Reiss and M.W. White. Household Electricity Demand, Revisited. Review of Economic Studies 

(2005) 72, 853–883. 53 Alan Sanstad, Notes on the Economics of Household Energy Consumption and Technology Choice. 

Lawrence Berkeley National Laboratory. 2010. Available online at: 

www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf 

150 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.19Table V.19 and Table V.20 summarize the quantitative impacts 

estimated for each TSL for residential dishwashers. The efficiency levels contained in 

each TSL are described in section V.A. 

Table V.19 Summary of Results for Residential Dishwasher Trial Standard Levels: 

National Impacts 

Category TSL 1 TSL 2 TSL 3 TSL 4 

National Energy Savings (quads) 0.02 0.07 0.94 1.59 

National Water Savings (trillion gal.) 0.01 0.14 0.56 1.71 

Net Present Value (2010$ billion) 

3% discount rate 0.12 0.46 6.51 17.45 

7% discount rate 0.03 0.08 1.96 5.88 

Cumulative Emissions Reduction 

CO2 (million metric tons) 1.15 4.06 65.02 98.62 

NOX (thousand tons) 0.96 3.54 54.27 83.31 

Hg (tons) 0.004 0.000 0.274 0.304 

Value of Emissions Reduction 

CO2 (2010$ million)* 5 to 79 16 to 242 278 to 4515 427 to 

6951 

NOX – 3% discount rate (2010$ 

million) 0 to 3 1 to 10 14 to 148 22 to 230 

NOX – 7% discount rate (2010$ 

million) 0 to 1 0 to 5 6 to 59 9 to 91 

Generation Capacity Reduction 

(GW) ** 0.011 0.001 0.719 0.800 

Employment Impacts 

Total Potential ChangeIncrease in 

Domestic Production Workers in 

2018 (thousands) 

0.008 to 

(4.593) 

0.086 to 

(4.593) 

0.065 to 

(4.593) 

0.206 to 

(4.593) 

Indirect Domestic Jobs 

(thousands)** 0.04 0.05 2.72 4.08 

Parentheses indicate negative (-) values. 

* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced 

CO2 emissions. 

** Values are for 2047. 

Comment [A58]: Change recommended by 

OIRA. 

Comment [A59]: Change recommended by 

OIRA. 

Comment [A60]: Changes recommended by 

OIRA. 

Comment [A61]: Changes recommended by 

OIRA. 

151 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table V.20 Summary of Results for Residential Dishwasher Trial Standard Levels: 

Consumer and Manufacturer Impacts 

Category TSL 1 TSL 2 TSL 3 TSL 4 

Manufacturer Impacts 

Impact to Industry NPV 

(2010$ million, 8.5% 

discount rate) 

(44.3) –

(45.3) 

(73.9) –

(84.6) 

(128.9) –

(174.4) 

(145.6) –

(202.7) 

Industry NPV (% 

change) 

(7.0) –

(7.1) 

(11.6) –

(13.3) 

(20.2) –

(27.4) 

(22.8) –

(31.8) 

Consumer Mean LCC Savings (2010$) 

Standard Dishwasher 1 3 41 108 

Compact Dishwasher 13 12 52 52 

Consumer Median PBP (years) 

Standard Dishwasher 5.9 11.8 6.6 4.5 

Compact Dishwasher 0.3 0.3 2.1 2.1 

Distribution of Consumer LCC Impacts 

Standard Dishwasher 

Net Cost (%) 1.9 18.7 29.7 22.9 

No Impact (%) 96.3 64.1 20.0 9.0 

Net Benefit (%) 1.7 17.2 50.4 68.1 

Compact Dishwasher 

Net Cost (%) 6.4 6.5 5.4 5.4 

No Impact (%) 75.6 75.6 50.2 50.2 

Net Benefit (%) 18.0 17.9 44.4 44.4 

Comment [A62]: Change recommended by 

OIRA. 

Parentheses indicate negative (-) values. 

DOE first considered TSL 4, which represents the max-tech efficiency levels. 

TSL 4 would save 1.59 quads of energy and 1.71 trillion gallons of water, amounts DOE 

considers significant. Under TSL 4, the NPV of consumer benefit would be $5.88 billion, 

using a discount rate of 7 percent, and $17.45 billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 4 are 99 Mt of CO2, 83 thousand 

tons of NOX, and 0.304 tons of Hg. The estimated monetary value of the CO2 emissions 

reductions at TSL 4 ranges from $427 million to $6,951 million. Total generating 

capacity in 2047 is estimated to decrease by 0.800 GW under TSL 4. Comment [A63]: Change recommended by 

OIRA. 

152 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At TSL 4, the average LCC impact is a savings of $108 for standard dishwashers 

and a savings of $52 for compact dishwashers. The median payback period is 4.5 years 

for standard dishwashers and 2.1 years for compact dishwashers. The fraction of 

consumers experiencing an LCC benefit is 68.1 percent for standard dishwashers and 

44.4 percent for compact dishwashers. However, 22.9 percent of standard dishwasher 

consumers and 5.4 percent of compact dishwasher consumers experience an LCC net 

cost. In addition, DOE is concerned that reducing energy and water use at TSL 4 without 

implementing significantly higher-cost technologies could result in the loss of certain 

consumer utility. Specifically, a substantially longer cycle time could be required to 

maintain cleaning performance. Because it is uncertain how greatly consumers value 

short cycle timesTherefore, DOE is concerned that TSL 4 may result in significanta loss Comment [A64]: Changes recommended by 

OIRA. 

of consumer utility. 

At TSL 4, the projected change in INPV ranges from a decrease of $145.6 million 

to a decrease of $202.7 million, equivalent to 22.8 percent and 31.8 percent, respectively. 

Current Products that meet the efficiency standards specified by this TSL are forecast to 

represent less than 9 percent of shipments in the year leading up to amended standards; 

thus. As such, manufacturers would have to redesign nearly all products by the 2018 

compliance date to meet demand. Redesigning all units to meet the current max-tech 

efficiency levels would require considerable capital and product conversion expenditures. 

At TSL 4, the capital conversion costs total $226.3 million, 2.232 times the industry 

annual capital expenditure in the year leading up to amended standards. DOE estimates 

that complete platform redesigns would cost the industry $76.7 million in product 

153 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

conversion costs. These conversion costs largely relate to the research programs required 

to develop new products that meet the efficiency standards set forth by TSL 4, and 

represent 164.5 percent of. These costs are equivalent to 1.6 times the industry annual 

budget for research and development. As such, the conversion costs associated with the 

changes in products and manufacturing facilities required at TSL 4 would require 

significant use of manufacturers’ financial reserves (manufacturer capital pools), 

impacting other areas of business that compete for these resources and significantly 

reducing INPV. In addition, manufacturers could face a substantial impact on 

profitability at TSL 4. Because manufacturers earn a premium for ENERGY STAR 

products and additional profit for products that exceed the ENERGY STAR level, 

collapsing the market to one commodity product makes it unlikely that manufacturers 

could maintain their base-case profitability on these products after compliance with the 

standards is required. As a resultBecause manufacturers are more likely to reduce their 

margins to maintain a price-competitive product at higher TSLs, DOE expects that TSL 4 

would yield impacts closer to the high end of the range of INPV impacts. If the high end 

of the range of impacts is reached, as DOE expects, TSL 4 could result in a net loss of 

31.8 percent in INPV to dishwasher manufacturers. 

The Secretary concludes that at TSL 4 for residential dishwashers, the benefits of 

energy savings, water savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the CO2 emissions 

reductions would be outweighed by the economic burden on some consumers, the 

potential burden on all consumers from loss of product utility, and the impacts on 

154 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

manufacturers, including the conversion costs and profit margin impacts that could result 

in a large reduction in INPV. Consequently, the Secretary has concluded that TSL 4 is 

not economically justified. 

DOE then considered TSL 3. TSL 3 would save 0.94 quads of energy and 0.56 

trillion gallons of water, amounts DOE considers significant. Under TSL 3, the NPV of 

consumer benefit would be $1.96 billion, using a discount rate of 7 percent, and $6.51 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 3 are 65 Mt of CO2, 54 thousand 

tons of NOX, and 0.274 ton of Hg. The estimated monetary value of the CO2 emissions 

reductions at TSL 3 ranges from $278 million to $4,515 million. Total generating 

capacity in 2047 is estimated to decrease by 0.719 GW under TSL 3. 

At TSL 3, the average LCC impact is a savings of $41 for standard dishwashers 

and a savings of $52 for compact dishwashers. The median payback period is 6.6 years 

for standard dishwashers and 2.1 years for compact dishwashers. The fraction of 

consumers experiencing an LCC benefit is 50.4 percent for standard dishwashers and 

44.4 percent for compact dishwashers. However, 29.7 percent of standard dishwasher 

consumers and 5.4 percent of compact dishwasher consumers experience an LCC net 

cost. In addition, DOE is concerned that reducing energy and water use at TSL 3 without 

implementing significantly higher-cost technologies could result in the loss of certain 

consumer utility. Specifically, a substantially longer cycle time could be required to 

Comment [A65]: Changes recommended by 

OIRA. 

Comment [A66]: Change recommended by 

OIRA. 

155 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

maintain cleaning performance. Because it is uncertain how greatly consumers value this 

featureTherefore, DOE is concerned that TSL 3 may result in significant loss of 

consumer utility. 

At TSL 3, the projected change in INPV ranges from a decrease of $128.9 million 

to a decrease of $174.4 million, decreases of 20.2 percent and 27.4 percent, respectively. 

Current Products that meet the efficiency standards specified by this TSL represent less 

than 20 percent of shipments in the year leading up to amended standards; thus. As such, 

manufacturers would have to overhaul a significant fraction of products by the 2018 

compliance date to meet demand. Redesigning significant component systems or 

developing entirely new platforms entirely to meet the efficiency levels specified by this 

TSL would require considerable capital and product conversion expenditures. At TSL 3, 

the estimated capital conversion costs total $195.4 million, which is 1.939 times the 

industry annual capital expenditure in the year leading up to amended standards. DOE 

estimates that the redesigns necessary to meet these standards would cost the industry 

$66.5 million in product conversion costs. These conversion costs largely relate to the 

research programs required to develop products that meet the efficiency standards set 

forth by TSL 3, and represent 142.6 percent ofare 1.4 times the industry annual budget 

for research and development in the year leading up to amended standards. As such, the 

conversion costs associated with the changes in products and manufacturing facilities 

required at TSL 3 would require significant use of manufacturers’ financial reserves 

(manufacturer capital pools), impacting other areas of business that compete for these 

resources and significantly reducing INPV. In addition, manufacturers could face a 

156 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

substantial impact on profitability at TSL 3. Because manufacturers earn a premium for 

ENERGY STAR products and additional profit for products that exceed the ENERGY 

STAR level, collapsing the marketare more likely to one commodityreduce their margins 

to maintain a price-competitive product makes it unlikely that manufacturers could 

maintain their base-case profitability on these products after compliance with the 

standards is required. As a resultat higher TSLs, DOE expects that TSL 3 would yield 

impacts closer to the high end of the range of INPV impacts as indicated by the 

preservation of operating profit markup scenario. If the high end of the range of impacts 

is reached, as DOE expects, TSL 3 could result in a net loss of 27.4 percent in INPV to 

dishwasher manufacturers. 

The Secretary concludes that at TSL 3 for residential dishwashers, the benefits of 

energy savings, water savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the CO2 emissions 

reductions would be outweighed by the economic burden on some consumers, the 

potential burden on all consumers from loss of product utility, and the impacts on 

manufacturers, including the conversion costs and profit margin impacts that could result 

in a large reduction in INPV. Consequently, the Secretary has concluded that TSL 3 is 

not economically justified. 

DOE then considered TSL 2. TSL 2 would save 0.07 quads of energy and 0.14 

trillion gallons of water, amounts DOE considers significant. Under TSL 2, the NPV of 

Comment [A67]: Changes recommended by 

OIRA. 

157 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

consumer benefit would be $0.08 billion, using a discount rate of 7 percent, and $0.46 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 2 are 4.06 Mt of CO2, 3.54 thousand 

tons of NOX, and 0.000 ton of Hg. The estimated monetary value of the CO2 emissions 

reductions at TSL 2 ranges from $16 million to $242 million. Total generating capacity in 

2047 is estimated to decrease by 0.001 GW under TSL 2. Comment [A68]: Change recommended by 

OIRA. 

At TSL 2, the average LCC impact is a savings of $3 for standard dishwashers 

and a savings of $12 for compact dishwashers. The median payback period is 11.8 years 

for standard dishwashers and 0.3 years for compact dishwashers. While some consumers 

experience an LCC increase, this increase is very small in most cases. 

At TSL 2, the projected change in INPV ranges from a decrease of $73.9 million 

to a decrease of $84.6 million, decreases of 11.6 percent and 13.3 percent, respectively. 

All dishwasher manufacturers currently produce products that meet the efficiency levels 

specified at TSL 2. As such, this level corresponds more to incremental product 

conversions rather than the platform redesigns expected for TSL 3 and TSL 4. Products at 

or above the efficiency levels of TSL 2 represent over 63nearly 64 percent of shipments 

in the year leading up to amended standards. As such, DOE believes that the scope of the 

redesigns necessary to meet TSL 2 by the 2013 compliance date greatly mitigates 

concerns over manufacturers’ ability to redesign products and switch over the bulk of

production in time to meet the amended standards by the compliance date (operational 

158 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

risk). DOE estimates that the improvements to manufacturing facilities necessary to meet 

these standards would cost the industry $59.1 million in capital conversion costs, over 

$130 million less than those incurred at TSL 3, and only 55.756 percent of the industry 

budget for capital expenditure in the year leading up to amended standards. TSL 2 will 

require an estimated 34.9 million in product conversion costs primarily relating to the 

research and development programs needed to improve upon existing platforms to meet 

the specified efficiency levels. This represents 71.672 percent of the industry budget for 

research and development in the year leading up to amended standards. The substantial 

reduction in conversion costs over those incurred at higher TSLs, coupled with the fact 

that many products currently meet the efficiency standards set forth by TSL 2, greatly 

mitigate the operational risk and impact on INPV. 

The Secretary concludes that at TSL 2 for residential dishwashers, the benefits of 

energy savings, water savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the CO2 emissions 

reductions would outweigh the impacts on manufacturers, including the conversion costs 

that could result in a reduction in INPV for manufacturers. 

In addition, the efficiency levels in TSL 2 correspond to the recommended levels 

in the Joint Petition, which DOE believes sets forth a statement by interested persons that 

are fairly representative of relevant points of view (including representatives of 

manufacturers of covered products, States, and efficiency advocates) and contains 

recommendations with respect to an energy conservation standard that are in accordance 

Comment [A69]: Change recommended by 

OIRA. 

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with 42 U.S.C. 6295(o). Moreover, DOE has encouraged the submission of consensus 

agreements as a way for diverse interested parties to develop an independent and 

probative analysis useful in DOE standard setting and to expedite the rulemaking process. 

DOE also believes that the standard levels recommended in the consensus agreement may 

increase the likelihood for regulatory compliance, while decreasing the risk of litigation. 

After considering the analysis and the benefits and burdens of TSL 2, the 

Secretary concludes that this TSL will offer the maximum improvement in efficiency that 

is technologically feasible and economically justified, and will result in the significant 

conservation of energy. Therefore, DOE today adopts TSL 2 for residential dishwashers. 

The amended energy conservation standards for residential dishwashers, which are a 

maximum allowable annual energy use and maximum allowable per-cycle water 

consumption, are shown in Table V.21Table V.21. 

Table V.21 Amended Energy Conservation Standards for Residential Dishwashers 

Product Class 

Compliance Date: 

January[INSERT DATE 1, 2013 YEAR AFTER 

DATE OF PUBLICATION IN THE FEDERAL 

REGISTER] 

Maximum Annual 

Energy Use* 

Maximum Per-Cycle 

Water Consumption 

1. Standard (≥8 place settings 

plus 6 serving pieces) 307 kWh/year 5.0 gallons/cycle 

2. Compact (<8 place settings 

plus 6 serving pieces) 222 kWh/year 3.5 gallons/cycle 

*Annual energy use, expressed in kilowatt-hours (kWh) per year, is calculated as: the sum of the annual 

standby electrical energy in kWh and the product of (1) the representative average dishwasher use cycles 

per year and (2) the sum of machine electrical energy consumption per cycle in kWh, the total water energy 

consumption per cycle in kWh, and, for dishwashers having a truncated normal cycle, the drying energy 

consumption divided by 2 in kWh. A truncated normal cycle is defined as the normal cycle interrupted to 

eliminate the power-dry feature after the termination of the last rinse option, 

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2. Summary of Benefits and Costs (Annualized) of the Standards 

The benefits and costs of today’s standards can also be expressed in terms of

annualized values. The annualized monetary values are the sum of (1) the annualized 

national economic value, expressed in 2010$, of the benefits from operating products that 

meet the proposed standards (consisting primarily of operating cost savings from using 

less energy and water, minus increases in product purchase costs, which is another way of 

representing consumer NPV), and (2) the monetary value of the benefits of emission 

reductions, including CO2 emission reductions.54 The value of the CO2 reductions, 

otherwise known as the Social Cost of Carbon (SCC), is calculated using a range of 

values per metric ton of CO2 developed by a recent interagency process. 

Although combining the values of operating savings and CO2 reductions provides 

a useful perspective, two issues should be considered. First, the national operating 

savings are domestic U.S. consumer monetary savings that occur as a result of market 

transactions, while the value of CO2 reductions is based on a global value. Second, the 

assessments of operating cost savings and SCC are performed with different methods that 

use quite different time frames for analysis. The national operating cost savings is 

54 DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized 

values. First, DOE calculated a present value in 20112012, the year used for discounting the NPV of total 

consumer costs and savings, for the time-series of costs and benefits using discount rates of 3 and 7 percent 

for all costs and benefits except for the value of CO2 reductions. For the latter, DOE used a range of 

discount rates, as shown in Table V.22Table V.20. From the present value, DOE then calculated the fixed 

annual payment over a 30-year period, starting in 2013, that yields the same present value. This payment 

includes benefits to consumers which accrue after 2047 from the dishwashers purchased from 2013 to 

2047. Costs incurred by manufacturers, some of which may be incurred prior to 2013 in preparation for the 

rule, are indirectly included as part of incremental equipment costs. The extent of these costs and benefits 

depends on the projected price trends of dishwashers because consumer demand of dishwashers is a 

function of dishwasher prices. The fixed annual payment is the annualized value. Although DOE calculated 

annualized values, this does not imply that the time-series of cost and benefits from which the annualized 

values were determined is a steady stream of payments. 

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measured for the lifetime of products shipped in 2013–2047. The SCC values, on the 

other hand, reflect the present value of all future climate-related impacts resulting from 

the emission of one ton of carbon dioxide in each year. These impacts continue well 

beyond 2100. 

Table V.22 shows the annualized values for residential dishwashers under TSL 2, 

expressed in 2010$. The results under the primary estimate are as follows. Using a 7­

percent discount rate for benefits and costs other than CO2 reductions, for which DOE 

used a 3-percent discount rate along with the SCC series corresponding to a value of 

$22.3/ton in 2010 (in 2010$), the cost of the standards for dishwashers in today’s rule is 

$46 million per year in increased equipment costs, while the annualized benefits are $53 

million per year in reduced equipment operating costs, $3.9 million in CO2 reductions, 

and $0.24 million in reduced NOX emissions. In this case, the net benefit amounts to $11 

million per year. Using a 3-percent discount rate for all benefits and costs and the SCC 

series corresponding to a value of $22.3/ton in 2010 (in 2010$), the cost of the standards 

for dishwashers in today’s rule is $44 million per year in increased equipment costs, 

while the benefits are $66 million per year in reduced operating costs, $3.9 million in 

CO2 reductions, and $0.26 million in reduced NOX emissions. In this case, the net benefit 

amounts to $27 million per year. 

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Table V.22 Annualized Benefits and Costs of Amended Standards (TSL 2) for 

Residential Dishwashers Sold in 2013–2047 

Discount Rate 

Primary 

Estimate* 

Low Net 

Benefits 

Estimate* 

High Net 

Benefits 

Estimate* 

Monetized (million 2010$/year) 

Benefits 

Operating Cost Savings 

7% 53 48 59 

3% 66 59 75 

CO2 Reduction at $4.9/t** 5% 1.1 1.0 1.3 

CO2 Reduction at $22.3/t** 3% 3.9 3.5 4.7 

CO2 Reduction at $36.5/t** 2.5% 6.1 5.4 7.2 

CO2 Reduction at $67.6/t** 3% 12.0 10.8 14.2 

NOX Reduction at $2,537/t** 

7% 0.24 0.23 0.27 

3% 0.26 0.24 0.30 

Total†

7% plus CO2 range 54 to 65 49 to 59 60 to 73 

7% 57 52 64 

3% plus CO2 range 68 to 78 60 to 70 76 to 89 

3% 70 63 80 

Costs 

Incremental Product Costs 

7% 46 44 43 

3% 44 41 40 

Total Net Benefits 

Total†

7% plus CO2 range 8 to 19 6 to 16 17 to 30 

7% 11 8 20 

3% plus CO2 range 24 to 35 19 to 29 37 to 49 

3% 27 22 40 

* The results include benefits to consumers which accrue after 2047 from the dishwashers purchased from 

2013 through 2047. Costs incurred by manufacturers, some of which may be incurred prior to 2013 in 

preparation for the rule, are not directly included, but are indirectly included as part of incremental 

equipment costs. The extent of the costs and benefits will depend on the projected price trends of 

dishwashers, as the consumer demand for dishwashers is a function of dishwasher prices. The Primary, 

Low Benefits, and High Benefits Estimates utilize forecasts of energy prices and housing starts from the 

AEO2011 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental product 

costs reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline 

rate for projected product price trends in the Low Benefits Estimate, and a high decline rate for projected 

product price trends in the High Benefits Estimate. The methods used to derive projected price trends are 

explained in section IV.G.3. 

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** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under 

several scenarios. The values of $4.9, $22.3, and $36.5 per ton are the averages of SCC distributions 

calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.6 per ton represents the 

95th percentile of the SCC distribution calculated using a 3% discount rate. The value for NOX (in 2010$) is 

the average of the low and high values used in DOE’s analysis.

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount

rate, which is $22.3/ton in 2010 (in 2010$). In the rows labeled as “7% plus CO2 range” and “3% plus CO2 

range,” the operating cost and NOX benefits are calculated using the labeled discount rate, and those values 

are added to the full range of CO2 values. 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 and Executive Order 13563 

Section 1(b)(1) of Executive Order 12866, “Regulatory Planning and Review,” 58

FR 51735 (Oct. 4, 1993), requires each agency to identify the problem that it intends to 

address, including, where applicable, the failures of private markets or public institutions 

that warrant new agency action, as well as to assess the significance of that problem. The 

problems that today’s standards address are as follows: 

(1)	 There is a lack of consumer information and/or information processing capability 

about energy efficiency opportunities in the home appliance market. 

(2)	 There is asymmetric information (one party to a transaction has more and better 

information than the other) and/or high transactions costs (costs of gathering 

information and effecting exchanges of goods and services). 

(3)	 There are external benefits resulting from improved energy efficiency of 

residential dishwashers that are not captured by the users of such equipment. 

These benefits include externalities related to environmental protection and 

energy security that are not reflected in energy prices, such as reduced emissions 

of greenhouse gases. 

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In addition, DOE has determined that today’s regulatory action is an

“economically significant regulatory action” under section 3(f)(1) of Executive Order

12866. Accordingly, section 6(a)(3) of the Executive Order requires that DOE prepare a 

regulatory impact analysis (RIA) on today’s rule and that the Office of Information and 

Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) review this 

rule. DOE presented to OIRA for review the draft rule and other documents prepared for 

this rulemaking, including the RIA, and included these documents in the rulemaking 

record. The assessments prepared pursuant to Executive Order 12866 can be found in the 

technical support document for this rulemaking. [INSERT URL] 

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued 

on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563 is supplemental to and 

explicitly reaffirms the principles, structures, and definitions governing regulatory review 

established in Executive Order 12866. To the extent permitted by law, agencies are 

required by Executive Order 13563 to: (1) propose or adopt a regulation only upon a 

reasoned determination that its benefits justify its costs (recognizing that some benefits 

and costs are difficult to quantify); (2) tailor regulations to impose the least burden on 

society, consistent with obtaining regulatory objectives, taking into account, among other 

things, and to the extent practicable, the costs of cumulative regulations; (3) select, in 

choosing among alternative regulatory approaches, those approaches that maximize net 

benefits (including potential economic, environmental, public health and safety, and other 

advantages; distributive impacts; and equity); (4) to the extent feasible, specify 

performance objectives, rather than specifying the behavior or manner of compliance that 

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regulated entities must adopt; and (5) identify and assess available alternatives to direct 

regulation, including providing economic incentives to encourage the desired behavior, 

such as user fees or marketable permits, or providing information upon which choices can 

be made by the public. 

DOE emphasizes as well that Executive Order 13563 requires agencies to use the 

best available techniques to quantify anticipated present and future benefits and costs as 

accurately as possible. In its guidance, the Office of Information and Regulatory Affairs 

has emphasized that such techniques may include identifying changing future compliance 

costs that might result from technological innovation or anticipated behavioral changes. 

For the reasons stated in the preamble, DOE believes that today’s final rule is consistent 

with these principles, including the requirement that, to the extent permitted by law, 

benefits justify costs and that net benefits are maximized. 

B. Review Under the Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA, 5 U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility analysis (IRFA) for any rule that by law must be 

proposed for public comment, unless the agency certifies that the rule, if promulgated, 

will not have a significant economic impact on a substantial number of small entities. As 

required by Executive Order 13272, “Proper Consideration of Small Entities in Agency 

Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies 

on February 19, 2003, to ensure that the potential impacts of its rules on small entities are 

properly considered during the rulemaking process. 68 FR 7990. DOE has made its 

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procedures and policies available on the Office of the General Counsel’s website 

(www.gc.doe.gov ). 

DOE reviewed today’s direct final rule and corresponding NOPR pursuant to the 

RFA and the policies and procedures discussed above. DOE certifies that the standards 

established in today’s final rule and proposed in the NOPR, published elsewhere in 

today’s Federal Register, will not have a significant impact on a substantial number of 

small entities. The factual basis for this certification is set forth below. DOE will consider 

any comments on the certification or economic impacts of the rule in determining 

whether to proceed with the direct final rule. 

For manufacturers of residential dishwashers, the Small Business Administration 

(SBA) has set a size threshold, which defines those entities classified as “small

businesses” for the purposes of the statute. DOE used the SBA’s small business size 

standards to determine whether any small entities would be subject to the requirements of 

the rule. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (Sept. 

5, 2000) and codified at 13 CFR part 121.The size standards are listed by North 

American Industry Classification System (NAICS) code and industry description and are 

available at: www.sba.gov/sites/default/files/Size_Standards_Table.pdf. Residential 

dishwasher manufacturing is classified under NAICS 335228, “Other Major Household 

Appliance Manufacturing.” The SBA sets a threshold of 500 employees or less for an 

entity to be considered as a small business for this category. 

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To estimate the number of small businesses which could be impacted by the 

amended energy conservation standards, DOE conducted a market survey using all 

available public information to identify potential small manufacturers. DOE’s research 

included the AHAM membership directory, product databases (CEE, CEC, and 

ENERGY STAR databases) and individual company websites to find potential small 

business manufacturers. DOE also asked interested parties and industry representatives if 

they were aware of any other small business manufacturers during manufacturer 

interviews and at previous DOE public meetings. DOE reviewed all publicly available 

data and contacted various companies, as necessary, to determine whether they met the 

SBA’s definition of a small business manufacturer of covered residential dishwashers. 

DOE screened out companies that did not offer products covered by this rulemaking, did 

not meet the definition of a “small business,” or are foreign owned and operated.

Almost half of residential dishwashers are currently manufactured in the United 

States by one corporation that accounts for approximately 49 percent of the total market. 

Together, this manufacturer and 3 other manufacturers that do not meet the definition of a 

small business manufacturer comprise 99 percent of the residential dishwasher market. 

The small portion of the remaining residential dishwasher market (approximately 57,000 

shipments) is supplied by a combination of approximately 15 international and domestic 

companies, all of which have small market shares. These companies are either foreign 

owned and operated or exceed the SBA’s employment threshold for consideration as a

small business under the appropriate NAICS code. Therefore, DOE did not identify any 

small business manufacturers of dishwashers. 

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Based on the discussion above, DOE certifies that the standards for residential 

dishwashers set forth in today’s rule would not have a significant economic impact on a

substantial number of small entities. Accordingly, DOE has not prepared a regulatory 

flexibility analysis for this rulemaking. DOE will transmit this certification to the SBA as 

required by 5 U.S.C. 605(b). 

C. Review Under the Paperwork Reduction Act 

Manufacturers of residential dishwashers must certify to DOE that their products 

comply with any applicable energy conservation standards. In certifying compliance, 

manufacturers must test their products according to the DOE test procedures for 

dishwashers, including any amendments adopted for those test procedures. DOE has 

established regulations for the certification and recordkeeping requirements for all 

covered consumer products and commercial equipment, including residential 

dishwashers. (76 FR 12422 (March 7, 2011). The collection-of-information requirement 

for the certification and recordkeeping is subject to review and approval by OMB under 

the Paperwork Reduction Act (PRA). This requirement has been approved by OMB 

under OMB control number 1910-1400. Public reporting burden for the certification is 

estimated to average 20 hours per response, including the time for reviewing instructions, 

searching existing data sources, gathering and maintaining the data needed, and 

completing and reviewing the collection of information. 

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Notwithstanding any other provision of the law, no person is required to respond 

to, nor shall any person be subject to a penalty for failure to comply with, a collection of 

information subject to the requirements of the PRA, unless that collection of information 

displays a currently valid OMB Control Number. 

D. Review Under the National Environmental Policy Act of 1969 

Pursuant to the National Environmental Policy Act (NEPA) of 1969, DOE has 

determined that today’s rule fits within the category of actions included in Categorical 

Exclusion (CX) B5.1 and otherwise meets the requirements for application of a CX. See 

10 CFR Part 1021, App. B, B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The rule fits 

within the category of actions because it is a rulemaking that establishes energy 

conservation standards for consumer products or industrial equipment, and for which 

none of the exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX 

determination for this rulemaking, and DOE does not need to prepare an Environmental 

Assessment or Environmental Impact Statement for this rule. DOE’s CX determination 

for this direct final rule is available at http://cxnepa.energy.gov DOE has prepared an 

environmental assessment (EA) of the impacts of the amended rule pursuant to the 

National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of 

the Council on Environmental Quality (40 CFR parts 1500–1508), and DOE’s regulations 

for compliance with the National Environmental Policy Act of 1969 (10 CFR part 1021). 

This assessment includes an examination of the potential effects of emission reductions 

likely to result from the rule in the context of global climate change, as well as other 

types of environmental impacts. The EA has been incorporated into the direct final rule 

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TSD as chapter 15. At the conclusion of the 110-day comment period, DOE will 

determine whether issuance of a finding of no significant impact (FONSI) is 

appropriate. If DOE issues a FONSI, it will be published separately in the Federal 

Register. 

. 

E. Review Under Executive Order 13132 

Executive Order 13132, “Federalism.” 64 FR 43255 (Aug. 10, 1999) imposes 

certain requirements on Federal agencies formulating and implementing policies or 

regulations that preempt State law or that have Federalism implications. The Executive 

Order requires agencies to examine the constitutional and statutory authority supporting 

any action that would limit the policymaking discretion of the States and to carefully 

assess the necessity for such actions. The Executive Order also requires agencies to have 

an accountable process to ensure meaningful and timely input by State and local officials 

in the development of regulatory policies that have Federalism implications. On March 

14, 2000, DOE published a statement of policy describing the intergovernmental 

consultation process it will follow in the development of such regulations. 65 FR 13735. 

EPCA governs and prescribes Federal preemption of State regulations as to energy 

conservation for the products that are the subject of today’s direct final rule. States can 

petition DOE for exemption from such preemption to the extent, and based on criteria, set 

forth in EPCA. (42 U.S.C. 6297) No further action is required by Executive Order 13132. 

171 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F. Review Under Executive Order 12988 

With respect to the review of existing regulations and the promulgation of new 

regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” imposes on 

Federal agencies the general duty to adhere to the following requirements: (1) eliminate 

drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) 

provide a clear legal standard for affected conduct rather than a general standard and 

promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Section 3(b) of 

Executive Order 12988 specifically requires that Executive agencies make every 

reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, 

if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides 

a clear legal standard for affected conduct while promoting simplification and burden 

reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; 

and (6) addresses other important issues affecting clarity and general draftsmanship under 

any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 

requires Executive agencies to review regulations in light of applicable standards in 

section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to 

meet one or more of them. DOE has completed the required review and determined that, 

to the extent permitted by law, this direct final rule meets the relevant standards of 

Executive Order 12988. 

G. Review Under the Unfunded Mandates Reform Act of 1995 

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each 

Federal agency to assess the effects of Federal regulatory actions on State, local, and 

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Tribal governments and the private sector. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 

1531). For an amended regulatory action likely to result in a rule that may cause the 

expenditure by State, local, and Tribal governments, in the aggregate, or by the private 

sector of $100 million or more in any one year (adjusted annually for inflation), section 

202 of UMRA requires a Federal agency to publish a written statement that estimates the 

resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), 

(b)) The UMRA also requires a Federal agency to develop an effective process to permit 

timely input by elected officers of State, local, and Tribal governments on a “significant

intergovernmental mandate,” and requires an agency plan for giving notice and 

opportunity for timely input to potentially affected small governments before establishing 

any requirements that might significantly or uniquely affect small governments. On 

March 18, 1997, DOE published a statement of policy on its process for 

intergovernmental consultation under UMRA. 62 FR 12820. DOE’s policy statement is

also available at www.gc.doe.gov. 

DOE has concluded that this direct final rule would likely require expenditures of 

$100 million or more on the private sector. Such expenditures may include: (1) 

investment in research and development and in capital expenditures by dishwasher 

manufacturers in the years between the direct final rule and the compliance date for the 

new standards, and (2) incremental additional expenditures by consumers to purchase 

higher-efficiency residential dishwashers, starting at the compliance date for the 

applicable standard. 

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Section 202 of UMRA authorizes a Federal agency to respond to the content 

requirements of UMRA in any other statement or analysis that accompanies the final rule. 

2 U.S.C. 1532(c). The content requirements of section 202(b) of UMRA relevant to a 

private sector mandate substantially overlap the economic analysis requirements that 

apply under section 325(o) of EPCA and Executive Order 12866. The 

SUPPLEMENTARY INFORMATION section of the notice of direct final rulemaking 

and the “Regulatory Impact Analysis” section of the TSD for this direct final rule respond 

to those requirements. 

Under section 205 of UMRA, the Department is obligated to identify and consider 

a reasonable number of regulatory alternatives before promulgating a rule for which a 

written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to 

select from those alternatives the most cost-effective and least burdensome alternative 

that achieves the objectives of the rule unless DOE publishes an explanation for doing 

otherwise, or the selection of such an alternative is inconsistent with law. As required by 

42 U.S.C. 6295(g)(1) and (10), and (o), today’s direct final rule would establish energy 

conservation standards for residential dishwashers that are designed to achieve the 

maximum improvement in energy efficiency that DOE has determined to be both 

technologically feasible and economically justified. A full discussion of the alternatives 

considered by DOE is presented in the “Regulatory Impact Analysis” section of the TSD

for today’s direct final rule. 

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H. Review Under the Treasury and General Government Appropriations Act, 1999 

Section 654 of the Treasury and General Government Appropriations Act, 1999 

(Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment 

for any rule that may affect family well-being. This rule would not have any impact on 

the autonomy or integrity of the family as an institution. Accordingly, DOE has 

concluded that it is not necessary to prepare a Family Policymaking Assessment. 

I. Review Under Executive Order 12630 

DOE has determined, under Executive Order 12630, “Governmental Actions and

Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 

1988), that this regulation would not result in any takings that might require 

compensation under the Fifth Amendment to the U.S. Constitution. 

J. Review Under the Treasury and General Government Appropriations Act, 2001 

Section 515 of the Treasury and General Government Appropriations Act, 2001 

(44 U.S.C. 3516, note) provides for Federal agencies to review most disseminations of 

information to the public under guidelines established by each agency pursuant to general 

guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 

2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 

reviewed today’s direct final rule under the OMB and DOE guidelines and has concluded 

that it is consistent with applicable policies in those guidelines. 

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K. Review Under Executive Order 13211 

Executive Order 13211, “Actions Concerning Regulations That Significantly 

Affect Energy Supply, Distribution, or Use” 66 FR 28355 (May 22, 2001), requires 

Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects 

for any significant energy action. A “significant energy action” is defined as any action 

by an agency that promulgates or is expected to lead to promulgation of a final rule, and 

that: (1) is a significant regulatory action under Executive Order 12866, or any successor 

order; and (2) is likely to have a significant adverse effect on the supply, distribution, or 

use of energy, or (3) is designated by the Administrator of OIRA as a significant energy 

action. For any significant energy action, the agency must give a detailed statement of 

any adverse effects on energy supply, distribution, or use should the proposal be 

implemented, and of reasonable alternatives to the action and their expected benefits on 

energy supply, distribution, and use. 

DOE has concluded that today’s regulatory action, which sets forth energy 

conservation standards for residential dishwashers, is not a significant energy action 

because the amended standards are not likely to have a significant adverse effect on the 

supply, distribution, or use of energy, nor has it been designated as such by the 

Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy 

Effects on the direct final rule. 

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L. Review Under the Information Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in consultation with the Office of Science and 

Technology Policy (OSTP), issued its Final Information Quality Bulletin for Peer Review 

(the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific 

information shall be peer reviewed by qualified specialists before it is disseminated by 

the Federal Government, including influential scientific information related to agency 

regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of 

the Government’s scientific information. Under the Bulletin, the energy conservation 

standards rulemaking analyses are “influential scientific information,” which the Bulletin 

defines as scientific information the agency reasonably can determine will have, or does 

have, a clear and substantial impact on important public policies or private sector 

decisions. 70 FR 2667. 

In response to OMB’s Bulletin, DOE conducted formal in-progress peer reviews 

of the energy conservation standards development process and analyses and has prepared 

a Peer Review Report pertaining to the energy conservation standards rulemaking 

analyses. Generation of this report involved a rigorous, formal, and documented 

evaluation using objective criteria and qualified and independent reviewers to make a 

judgment as to the technical/scientific/business merit, the actual or anticipated results, 

and the productivity and management effectiveness of programs and/or projects. The 

“Energy Conservation Standards Rulemaking Peer Review Report” dated February 2007 

has been disseminated and is available at the following Web site: 

www1.eere.energy.gov/buildings/appliance_standards/peer_review.html. 

177 
 

 

 

 

 

 

 

 

 

 

 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of 

this rule prior to its effective date. The report will state that it has been determined that 

the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary 

The Secretary of Energy has approved publication of today’s direct final rule. 

List of Subjects 

10 CFR Part 429 

Administrative practice and procedure, Confidential business information, Energy 

conservation, Household appliances, and Reporting and recordkeeping requirements. 

10 CFR Part 430 

Administrative practice and procedure, Confidential business information, Energy 

conservation, Household appliances, Imports, Intergovernmental relations, and Small 

businesses. 

Issued in Washington, DC, on 

178 
________________________________ 

 

Henry Kelly 

Acting Assistant Secretary of Energy 

Energy Efficiency and Renewable Energy 

179 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the reasons set forth in the preamble, DOE amends parts 429 and 430, of title 

10 of the Code of Federal Regulations, to read as set forth below: 

PART 429 - CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR 

CONSUMER PRODUCTS AND COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

1. The authority citation for part 429 continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

2. In § 429.19 revise paragraph (b)(2) to read as follows: 

§ 429.19 Dishwashers. 

* * * * * 

(b) * * * 

(2) Pursuant to §429.12(b)(13), a certification report shall include the following 

public product-specific information: The estimated annual energy use in kilowatt hours 

per year (kWh/yr) and the water consumption in gallons per cycle. 

* * * * * 

PART 430 - ENERGY CONSERVATION PROGRAM FOR CONSUMER 

PRODUCTS 

3. The authority citation for part 430 continues to read as follows: 

Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note. 

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4. In §430.32 add paragraph (f)(3) to read as follows: 

§430.32 Energy and water conservation standards and their effective dates. 

* * * * * 

(f) * * * 

* * * 

(3) All dishwashers manufactured on or after January[INSERT DATE 1, 2013, YEAR 

AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], shall meet the 

following standard—

(i) Standard size dishwashers shall not exceed 307 kwh/year and 5.0 gallons per cycle. 

(ii) Compact size dishwashers shall not exceed 222 kwh/year and 3.5 gallons per cycle. 

* * * * * 

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