Water Heater Standards

Rulemaking Workshop

U.S. Department of Energy

June 24,1997

EE-RM-97-900 COMMENT 01D
Topics

* Proposed rulemaking schedule

* Rulemaking framework report

* Issues for analysis

* Analytical methods and tools

* Data requirements and data collection methods

* Industry characterization

* Identification of experts and other interested parties

* Identification of contractor qualifications

* Other issues

* Next steps

Reference No

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Proposed Rulemaking Schedule

The Department Is Committed to Publishing the Final Rule by

July 1999.

* Is this date realistic?

* What can be done to elevate this schedule (i.e., negotiated rulemaking)?

* Is an effective date of July 2002 acceptable?

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Proposed Water Heater Rulemakings Schedule

Feb Mr Apr Ma Jn Jly Aug Sep Oct Nov Dec Jn Feb Mr Apr Ma J Jy Aug Sep Oc Nov Dec Jan Feb Mr Apr Ma Jn Jy

9'97 '97 '97 '97 '97 97 '97 '97 '97 '97 '97 '98 '9 '98 98 9 '9989898 '98'9 '98 98 '99 '99 '99 '99 '99 '99

Test Procedures

Draft Final Rule

Approve Final Rule

Publish Final Rule --

Standards_

Process Workshop <

Review Screening Document |

Data Colection _

Revise EngineeringAnalysis

Peer Review Eng. Anal....

Comment Period

Select Candidate Sids. Lvl.

Prel. National Forecasting

Noice of Avilability - - -

Consume Subgroup Anal. -- - - - - - - -

Manufacturer Impact Anal.

Utility/Environmental Anal _

Notice of Availability

Draft Revised NOPR

DOJ & OMB Review* -- - -- - - - - - -

Approval of NOPR

Reissue NOPR

Conment Period &Hearing ...

Rev. Cmnts & Revise Anal. _ -

Stakeholder Review -- - -

Final RuleD Approval - - - - -

OMB Review & Approval .---- __ ... 

Publish Final Rule

* DOJ consultalion and OMB review and approval.

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Rulemaking Framework

The Department Seeks Your Feedback on the Rulemaking Framework

Report and the New Process.

* The goal is to address your issues and concerns about the report and

the new process.

* Is the analytical framework in Figure 1 of the rulemaking framework

document appropriate for water heaters?

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Rulemaking Framework

1.0 Technology and Market Assessment

1.1 Market Assessment

-What information should be in the market assessment?

-Should this information be distributed for comment?

-What are the existing non-regulatory efficiency improvement initiatives?

1.2 Technology Assessment

-Are there additional design options that should be considered in

Appendix B?

1.3 Preliminary Baseline Shipment Forecast

-What existing market-based initiatives (i.e., DSM programs, etc.) should

DOE consider?

-What approaches could be used to establish the base case shipment

forecast?

-What information sources show past shipment data by efficiency level?

-Are the data request forms in Appendix A appropriate?

Reference No 5

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Rulemaking Framework

2.0 Screening Analysis

2.1 Product Classes

-Do you agree with the product classes specified?

2.2 Baseline Units

-Are the descriptions for the water heaters appropriate?

-Are the values for EF and RE sound?

-Will the baseline change for gas-fired storage water heaters due to

requirements from the Consumer Product Safety Commission

(CPSC)?

2.3 Design Options

-Who should perform the peer review?

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Rulemaking Framework

3.0 Engineering Analysis

* Should the manufacturing cost and energy-use data be updated?

* How should uncertainty in the above variables be considered?

* What data collection approach should be used, design option or

efficiency level (see Appendix C)?

* What engineering models (i.e., WATSIM, TANK, etc.) should be used?

* What are the relevant contractor qualifications?

Reference No 7

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Rulemaking Framework

4.0 Manufacturing Costs

-Is the data collection time frame reasonable?

-Can individual manufacturers submit data (individual data are required

for GRIM analysis)?

-Should a third party contractor be used to collect data?

4.1 Characterizing Uncertainty

-Are there alternative approaches to characterizing uncertainty in

average manufacturing costs?

4.2 Variability in Costs Between Manufacturers

-How can GRIM analysis be used and still allow for manufacturer

confidentiality and appropriate stakeholder review.

Reference No 8

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Rulemaking Framework

4.0 Manufacturing Costs (cont.)

4.3 Costing Approach/Engineering Analysis

-Should new data be collected to perform an efficiency level approach?

-Can manufacturer impact analysis be performed using the GRIM

model if the design option approach is used?

4.4 Propriety Designs

-The Department will consider propriety designs in the engineering and

economic analyses.

-Which propriety designs should DOE consider?

-What stage of development are they in?

-How should DOE collect and report cost data for these designs?

Reference No 9

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Rulemaking Framework

5.0 Life-Cycle Cost and Payback Analysis

* Are the following variables appropriate to consider? What data sources

are available?

-Retail Prices

-Annual Hot Water Use

-Energy Prices

-Lifetime

-Discount Rate

-Maintenance, Service, and Installation Costs

* Are there additional variables to consider?

Reference No. 10

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Rulemaking Framework Report

6.0 Prices

6.1 Retail Prices: Life-Cycle Cost Analysis

-Are the proposed processes for generating retail prices sound?

-Would interested parties be willing to provide estimates of future

prices?

-How should DOE consider the different mark-up structures relative to

distribution channels?

6.2 Manufacturer Prices: Industry Cashflow

-What approaches could be used to determine manufacturers prices?

-Would manufacturers be willing to provide estimates of future

manufacturer prices?

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Rulemaking Framework

7.0 Shipments

* What approaches could be used to determine shipment forecasts?

-Simple Spreadsheet

-Larger Models, e.g., Residential Energy Model (REM)

-Expert Judgment and Historical Trends

* How will interested parties provide forecasts for various efficiency levels?

Reference No. 12

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Rulemaking Framework

8.0 Preliminary National Benefits Analysis

8.1 Inputs to Forecasts

8.2 Calculation of Energy.Savings

-Should the Department use the Residential Energy Model (REM) and/or simple spreadsheet models?

8.3 Consumer Net Present Value and Payback

8.4 Employment Impacts

-Are there any methods or models which can be used to assess

indirect employment impacts?

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Rulemaking Framework

9.0 Revised Pre-ANOPR Analyses

* For water heaters, a workshop will be conducted to review and comment

on the analysis sections normally conducted in the pre-ANPOR stage as

specified in the new process.

*Since a NOPR has already been issued for water heaters, a revised

NOPR will be issued.

Reference No 14

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Rulemaking Framework

10.0 Consumer Impacts

10.1 Consumer Sub-group Analysis

-How many households are not better off with standards and by how

much?

* Variations in Energy Prices

-Are there data sources that could be used to answer the above

questions?

-Are there appropriate market segmentation and analysis methods

which can be used?

-What additional variables should be considered?

* Variations in Energy Use

-Are there data which reflect variations in consumers' water heater

operation?

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Rulemaking Framework

10.0 Consumer Impacts (cont.)

First Cost Increases

-What are the potential impacts of a large first cost increase on

consumer (affordability, financing, etc.)?

-What methods and data can be used in conducting this analysis?

-What information exists on consumer decision-making to switch to

other product classes?

10.2 Consumer Participation

-Are there any demonstration projects that should be investigated?

-What consumer groups or other organizations should be contacted?

-Are there other means of obtaining increased consumer input to the

rulemaking process?

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Rulemaking Framework

11.0 Industry Cash Flow

* Are the financial values proposed in Appendix D reasonable?

* What ranges of values are appropriate?

* Who should collect and maintain any confidential information?

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Rulemaking Framework

12.0 Manufacturer Sub-group Analysis

-What are the required contractor qualifications?

12.1 Manufacturer Sub-groups

-Which manufacturers should be actively solicited for interviews?

-When should interviews be conducted?

-Is there any value in grouping water heater manufacturers into subgroups or should individual GRIM analysis be conducted for each?

-What would a well executed sub-group analysis entail?

12.2 Competitive Impacts Assessment

-The Department will begin consulting with the Department of Justice in

the early stages of rulemaking.

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Rulemaking Framework

12.0 Manufacturer Sub-group Analysis (cont.)

12.3 Cumulative Regulatory Burden

-The Department is working with the Consumer Product Safety

Commission (CPSC) to coordinate any requirements that may arise

from the flammable vapor ignition issue for gas water heaters.

-Are there suggestions on how to resolve the issues that may arise

from a DOE and CPSC rulemaking?

-Is the Environmental Protection Agency's (EPA) phase out of CFCs a

factor for water heaters?

-Are there other regulations that would cause a cumulative burden with

this rulemaking?

Reference No 19

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Rulemaking Framework

13.0 Utility Impacts

* Is the Appliance Standards Environmental and Utility Model (ASEUM)

, appropriate?

* Do you have any recommendations regarding how a gas utility impact

analysis should be conducted?

* What elements should the Department consider to assess the likelihood

and impacts of fuel switching?

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Rulemaking Framework

14.0 Environmental Analysis

* Is the Appliance Standards Environmental and Utility Model (ASEUM) appropriate?

* Are there any additional factors the Department should consider? If so, how?

-Sulfur Oxides (SOx)

-Nitrous Oxides (NOx)

-Carbon Dioxide (CO2)

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Other Issues

Are there any other issues that need to be addressed?

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Next Steps

* Data collection for revised engineering analysis, if necessary.

* Schedule plant visits and interviews.

* Revise engineering analysis, if necessary.

* Selection of peer reviewers.

* Select date for engineering analysis workshop.

Reference No. 23

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