EE-2006-STD-0127 COMMENT 53

DEPARTMENT OF JUSTICE

Antitrust Division

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 Energy Policy

Department ofEnergy

Washington, DC 20585

Dear Deputy 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). Your request was submitted under Section 325(0)(2)(B)(i)(V) ofthe Energy Policy 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 of any lessening of competition that is

likely to result from the imposition of proposed energy conservation standards. The Attorney

General's responsibility for responding to requests from other departments about the effect of a

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 a proposed standard

may lessen competition, for example, by substantially limiting consumer choice, leaving

consumers with fewer competitive alternatives, placing certain manufacturers of a product at an

unjustified competitive disadvantage compared to other manufacturers, or by inducing avoidable

inefficiencies in production or distribution of particular products.

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 industry members. 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 constant burning pilot lights, currently

applicable to cooking appliances equipped with electrical supply cords, to appliances that are not
EE-2006-STD-0127 COMMENT 53

Warren 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. For these consumers, gas cooking appliances with electronic ignition

are not a reasonable 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 unclear whether such battery-powered devices have been tested for indoor

use and whether they are in compliance with safety standards for such use. Ifthese options prove

not to be feasible, then the proposed standard could substantially limit consumer choice by

eliminating the cooking appliance that most closely meets 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 used primarily 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

efficient but significantly more expensive than top loading models. There are only three

manufacturers oftop loading CCWs selling in the United States. It appears that there is a real

risk that one or more 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 higher prices from the remaining top loading manufacturer or

manufacturers.

Although the Department ofJustice is not in a position to judge whether manufacturers

will be able to meet the proposed standards, we urge the Department ofEnergy to take into

account these possible impacts on competition and the availability of options 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

consider keeping the existing standard in place for top loading CCWs. The Department of

Energy may wish to consider setting a "no standard" standard for residential gas cooking

products with constant burning 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 other products

listed in the NOPR would likely lead to an adverse effect on competition.

Sincerely,

7J1'()~h 6,yDeborah A. Garza