### DEPARTMENT OF JUSTICE AntitrustDivision


### DEBORAH A. GARZA Acting Assistant Attorney General

Main Justice Building 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530-0001 (202) 514-2401 / (202) 616-2645 (Fax) E-mail: antitrust@usdoj.gov Web site: http://www.usdoj.gov/atr

December 16, 2008

Warren Belmar, Esq. Deputy General Counsel for EnergyPolicy Department ofEnergy Washington, DC 20585

DearDeputy General Counsel Belmar:

I am responding to your October 1, 2008, letter seeking the views ofthe Attorney General about the potential impact on competition ofproposed amended energy conservation standards for residential kitchen ranges and ovens, microwave ovens, and commercial clothes washers (CCWs). Yourrequest was submitted under Section 325(0)(2)(B)(i)(V) ofthe EnergyPolicy and Conservation Act, as amended, ("ECPA"), 42 U.S.C. § 6295(0)(B)(i)(V), which requires the Attorney General to make a determination ofthe impact ofany lessening ofcompetition that is likelyto result from the imposition ofproposed energy conservation standards. The Attorney General's responsibility for responding to requests from other departments about the effect ofa program on competition has been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR § 0.40(g).

In conducting its analysis the Antitrust Division examines whether aproposed standard may lessen competition, for example, by substantially limiting consumer choice, leaving
consumers with fewer competitive alternatives, placing certainmanufacturers ofaproduct at an unjustified competitive disadvantage compared to othermanufacturers, orby inducing avoidable inefficiencies in production or distribution ofparticularproducts.

We have reviewed the proposed standards contained in the Notice ofProposed Rulemaking (73 Fed. Reg. 62034, October 17, 2008) and supplementary information submitted to the Attorney General. We also attended the November 13 public meeting on the proposed standards and conducted interviews with industrymembers. Based on this review, we have determined that legitimate issues arise as to whether the proposed standards adversely effect competition and consumer choice with respect to (1) gas cooking products with standing pilot lights and (2) top loading CCWs.
The proposed standards would extend the ban on constantburning pilot lights, currently applicable to cooking appliances equipped with electrical supply cords, to appliances that are notWarren Belmar, Esq. December 16, 2008 Page 2

equipped with electrical supply cords. As the notice regarding the proposed standards recognizes, certain consumers, including those with religious and cultural practices that prohibit the use ofline electricity, those without'access to line electricity, and those whose kitchens do not have appropriate electrical outlets, rely on gas cooking appliances with standing pilots in lieu of electrical ignition devices. Forthese consumers, gas cooking appliances with electronic ignition
are not areasonable substitute. The notice states that gas cooking appliances may become available with technological options such as battery-powered ignition to replace a standing pilot light. However, it is unclearwhether suchbattery-powered devices have been tested for indoor
use and whetherthey are in compliance with safety standards for such use. Ifthese options prove not to be feasible, then the proposed standard could substantially limit consumerchoice by eliminating the cooking appliance that most closelymeets these consumers' needs.

As to top loading CCWs, it appears that meeting the proposed standards may require substantial investment in the development ofnew technology that some suppliers oftop loading CCWs may not find it economical to make. CCWs are usedprimarily in multi-housing laundries, with top loading machines accounting for approximately 80 percent ofmachines in these locations. The remaining 20 percent are front loading machines, which are more energy efficientbut significantlymore expensive than top loading models. There are only three manufacturers oftop loading CCWs selling in the United States. It appears that there is areal risk that one ormore ofthese manufacturers cannot meet the proposed standard. In such a case, CCW purchasers would have fewer competitive alternatives for top loading machines, potentially resulting in purchasers facing higherprices from the remaining top loading manufacturer or manufacturers. Although the Department ofJustice is not in aposition tojudge whethermanufacturers will be able to meet the proposed standards, we urge the Department ofEnergyto take into account these possible impacts on competition and the availability ofoptions to consumers in determining its final energy efficiency standard for CCWs and residential gas cooking appliances with constant burning pilots. To maintain competition, the Department ofEnergy should considerkeeping the existing standard inplace for top loading CCWs. The Department of Energymay wish to consider setting a "no standard" standard for residential gas cooking products with constantburning pilots to address the potential for certain customers to be stranded without an economical product alternative.
The Department ofJustice does not believe that the proposed standards for otherproducts listed in the NOPR would likely lead to an adverse effect on competition.

Sincerely,

# 7J1'()~h 

# 6,yDeborah A. Garza