DepartmentofEnergyEnergyEfficiency&RenewableEnergyHearthHeatingProd2014STD0036@ee.doe.govNoticeofProposedRulemakingPublicMeetingonEnergyConservationStandardsforHearthProducts2Welcome•Introductions(aroundtheroom)•RoleoftheFacilitator•GroundRules–Speakoneatatime.–Sayyournamefortherecord– therewillbeacompletetranscriptofthismeeting.–Beconcise– sharethe‘air‐time’.–Keepthefocushere– cellphonesonsilent;limitsidebarconversations.–Webinarparticipantsturnphoneonmute;“raiseyourhand”toberecognizedtospeak.•HousekeepingItems•AgendaReview•OpeningRemarks3Agenda9:00– 9:15amWelcome;Introductions;andAgendaReviewDougBrookman9:15– 10:00amPurposeofPublicMeeting;OpeningStatements;CommentSubmissionInstructions;andRegulatoryAuthorityandRulemakingOverviewJohnCymbalsky10:00– 10:15amMarket&TechnologyAssessmentJustinElszasz10:15– 10:30amBreak10:30– 11:15amEngineeringAnalysisJustinElszasz11:15– 12:30pmMarkups;EnergyUseCharacterization;andLifecycleCostandPaybackPeriod AnalysisDavidSiap12:30– 1:30pmLunch(onyourown)4Agenda1:30– 2:15pmShipmentsandNationalImpactAnalysis;RegulatoryImpactAnalysisDavidSiap2:15– 2:45pmManufacturerImpactAnalysisJessicaLewis2:45– 3:00pmBreak3:00– 3:30pmUtilityImpactAnalysis;EnvironmentalImpactAnalysis;and IndirectEmploymentAnalysisDavidSiap3:30– 4:00pmClosingRemarksfromInterestedPartiesJohnCymbalsky4:00pmAdjourn5ParticipatingViatheWebcast•TheDepartmentisbroadcastingthismeetingliveovertheInternet.•DOEisprovidingthewebcasttoaccommodatestakeholdersthatareunabletoattendthepublicmeetinginperson.•Thewebbroadcastallowsstakeholderstolistenin,viewtheslides,andparticipatedirectly.•Allstakeholdersareencouragedtosubmitwrittencommentsafterthepublicmeeting.6PurposeofthePublicMeeting•Presenttheproceduralandanalyticalapproachestoevaluatepotentialenergyconservationstandardsforresidentialhearthproducts.•Invitecommentontheenergyconservationstandardsnoticeofproposedrulemaking(NOPR)andtechnicalsupportdocument(TSD),includingDOE’sproposedstandardlevels.•Inviteparticipantstoprovidesummarycommentsorstatementsandraiseadditionalissuesfordiscussion.7IssuesforDiscussionThedeadlineforsubmittingcommentsisApril10,2015.Issue Box:DOE welcomes comments, data, and informationconcerning its proposed standards for residential hearthproducts. Whether invited by an issue box or not, comments arewelcome on any part of DOE’s analysis.8OpeningRemarksMeetingparticipantsareinvitedtoprovideopeningremarksorstatementsatthistime.9PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments10RegulatoryAuthorityEnergyPolicyandConservationAct(EPCA)of1975(P.L. 94‐163)•EstablishedtheEnergyConservationProgramforConsumerProductsOtherThanAutomobiles.•GrantedDOEauthoritytoclassifyadditionaltypesofconsumerproductsascoveredproducts(42U.S.C.6292(a)(20)and(b))andtoprescribeenergyconservationstandardsforthoseproductsifcertainstatutorycriteriaaremet(42U.S.C.6295(l)(1)(A)‐(D)).EnergyIndependenceandSecurityActof2007(EISA2007)(P.L.110‐140)•Requiredthatanyfinalruleestablishingorrevisinganenergyconservationstandardforacoveredproductmustincorporatestandbymodeandoffmodeenergyuseintoasingleamendedornewstandard,pursuantto42U.S.C.6295(o),iffeasible.(42U.S.C.6295(gg)(3))11•OnDecember31,2013,DOEpublishedaproposeddeterminationofcoverageforhearthproducts.78FR79683.•DOEusedthedefinitionfor“HearthProduct”asproposedinDOE’sNoticeofProposedDeterminationtodefinethescopefortheNOPR.78FR79638,79640(Dec.31,2013).•Therearecurrentlynoenergyconservationstandardsortestproceduresforhearthproducts.RegulatoryHistory &TestProcedure12CriteriaforSelectingStandardLevelsTheEnergyPolicyandConservationAct(EPCA)directsDOEtoconsider,tothegreatestextentpracticable,thefollowing sevenfactorswhendeterminingwhetherpotential energyconservationstandards areeconomicallyjustified.EPCAFactor DOEAnalysis1.EconomicimpactonconsumersandmanufacturersLife‐cyclecostanalysisManufacturerimpactanalysis2.Lifetimeoperatingcostsavings Life‐cyclecostanalysis3.Totalprojectedenergysavings Nationalimpactanalysis4.ImpactonutilityorperformanceScreeninganalysisEngineeringanalysis5.Impactofanylesseningofcompetition Manufacturerimpactanalysis6.Needfornationalenergyconservation Nationalimpactanalysis7.OtherfactorstheSecretaryconsidersrelevantEnvironmentalassessmentUtilityimpactanalysisEmploymentimpactanalysis13ProposedDefinitionProposedDOEDefinitionof"HearthProduct"“Agas‐firedappliancethatsimulatesasolid‐fueledfireplaceorpresentsaflamepattern(foraestheticsorotherpurpose)andthatmayprovidespaceheatingdirectlytothespaceinwhichitisinstalled.”78FR79638,79640 (Dec.31,2013).Issue1:DOEseekscommentontheproposeddefinitionfor“hearthproduct”foundintheDecember2013NOPD(78FR79638)andtherangeofproductsthatwouldbecoveredbytheproposedruleifthisdefinitionwereappliedinthefinalrule.14HearthProductExamplesVentedFireplace,Insert,StoveUnventedFireplace,Insert,StoveVentedGasLogSetsUnventedGasLogSetsOutdoorProductsNote: Analysis groups do not constitute DOE product classes.15RegulatoryApproachDOEconsideredtwooptionsforenergyconservationstandardsforhearthproducts:1. Performance‐basedstandards(efficiencyormaximumenergyuse)2. Design(prescriptive)standardPursuanttothedefinitionof“energyconservationstandard”at42U.S.C.6291(6),DOEmayestablisheitheraperformancestandardoradesignstandardfortheseproducts,butnotboth.Toassesstheseoptions,DOE:•Reviewedavailabletechnologyoptionsforperformance‐basedstandardsanddesignstandards.•Comparedoptionsforreducingactivemodeandstandbymodeenergyconsumption.•Consideredtheseforallhearthproductsmeetingproposeddefinition.16RegulatoryApproachDOEconcludedthataprescriptivedesignrequirementwouldbemoreeffectivethanaperformance‐basedrequirementforthefollowingreasons:•Lessburdenonmanufacturersbecausetestingnotrequired;•Singlerequirementwouldapplytoallproductsmeetingthe“hearthproduct”proposeddefinition;and•Productclassesareunnecessarybecausestandingpilotfunctionality,components,andenergyusearesimilaracrossallhearthproducts.•DOEnotesthatitdidgroupdifferentcategoriesofhearthproductscommonlyfoundonthemarketforuseinitsanalysisofpotentialperformancestandards.17NOPRFinalRuleEffectiveDateRulemakingOverviewMarkupsforEquipmentPriceDeterminationLife‐CycleCost&PaybackPeriodAnalysisEngineeringAnalysisEnergyUse&EndUseLoadCharacterizationMarket&TechnologyScreeningAnalysisManufacturerImpactAnalysisShipmentsAnalysisNationalImpactAnalysisEnvironmentalImpactAnalysisUtilityImpactAnalysisRegulatoryImpactAnalysisEmploymentImpactAnalysis18PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments19Purpose:Developqualitativeandquantitativecharacterizationofthehearthindustry.Methodology:•Analyzepublicly‐availabledataandinformation, aswellasinformationfrommanufacturersandotherinterestedparties.•Developlistoftechnologiesthatcanbeusedtoimprovehearthproductefficiencyorreduceoverallfuelconsumption.MarketAssessment20MarketAssessment•Vented– pipescarryproductsofcombustionsoutsidebuilding•Fireplacesinstalledintowallsorotherframingstructures•Insertsinstalledintoexistingsolid‐fuelburningfireplaces•Stoveisfree‐standing,notinstalledintosurroundingstructureVentedFireplace,Insert,Stove21MarketAssessment•Unvented– productsofcombustionremaininbuilding•Similarvarietiesasventedgroup– gasfireplaces,insertsforexistingsolid‐fuelfireplaces,free‐standingstoves•RequireOxygenDepletionSensor(ODS)(ANSIZ21.11.2‐2013)UnventedFireplace,Insert,Stove22MarketAssessment•Installedinexistingmasonryfireplaces•Requireuseofexistingchimneyforventingbyproductsofcombustion•Donotincludeenclosure•Installedinexistingmasonryfireplaces•Byproductsofcombustionremaininbuilding•Donotincludeenclosure•RequireOxygenDepletionSensor(ODS)(ANSIZ21.11.2‐2013)VentedGasLogSetsUnventedGasLogSets23MarketAssessment•Varietyofforms•Outdoorfireplace•Firepitorburner•Patioheater(pyramidorradiant)OutdoorProducts24MarketAssessmentVentedFireplace,Insert,StoveUnventedFireplace,Insert,StoveVentedGasLogSetsUnventedGasLogSetsOutdoorProductsNote: Analysis groups do not constitute DOE product classes.56.2%4.4%6.1% 18.3% 15.0%EstimatedSharesofOverall HearthProductsMarketBasedonHPBAData (2005‐2013)25DOEfoundthreegeneraltypesofignitionsystemsinthehearthproductsmarket.1. Matchlit– requireusertouseamatchorlightertoignitemainburner•Nostandbymodegasconsumption2. Constantburning(standing)pilot•Consumegaswhilemainburneroffunlessuserextinguishespilotflame3. Electronicignition•NostandbymodegasconsumptionMarketAssessment26MarketAssessmentNote: Analysis groups do not constitute DOE product classes.HearthProductGroupEstimatedMarketShare(%)Match LitStandingPilotElectronicIgnitionVentedFireplace,Insert,Stove 5 40 55UnventedFireplace,Insert,Stove 0 88 12VentedGasLogSets 50 44 6UnventedGasLogSets 0 94 6Outdoor 50 26 2427PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments28Purpose:Determinethedifference inmanufacturerproductioncost(MPC)forhearthproductsresultingfrompotentialstandard.Methodology:•DesignOptionApproach:Determineincrementalcostofaddingspecifictechnologydesignoptions.•ReverseEngineeringApproach:Costassessmentbasedondetailedbillofmaterialsderivedfromphysicalteardowns.Assumptions:•Standingpilotsystemswouldconverttoelectronicignition•Noeffectonmatchlitsystems•IntermittentPilotIgnition(IPI)arepredominantinhearthmarketEngineeringAnalysis29AnnualStandbyEnergyConsumptionManufacturerProductionCostBaseline(StandingPilot)“Max‐Tech”(ElectronicIgnition)EngineeringAnalysisIncrementalMPC30EngineeringAnalysisHearthProductGroupRepresentativeStandingPilotType(BaselineMPC)RepresentativeElectronicIgnitionTypeVentedFireplace,Insert,Stove Millivolt GasValve IPI*UnventedFireplace,Insert,Stove Millivolt GasValve IPIVentedGasLogSets Manual GasValve IPIUnventedGasLogSets Manual GasValve IPIOutdoor Manual GasValve IPI,HWI***IPI=IntermittentPilotIgnition**HWI=IntermittentPilotwithHotWireIgniter31EngineeringAnalysisHearthProductGroupRepresentativeShipmentVolume*BaselineMPC($)IncrementalMPC($)**VentedFireplace,Insert,Stove 10,000 322 28UnventedFireplace,Insert,Stove 2,000 281 32VentedGasLogSets 2,000 190 70UnventedGasLogSets 5,000 208 56Outdoor 3,000 210 55*Representativeshipment volumesapproximatedusingshipmenttotalsbygroupandnumberofmanufacturersproducingeachproductgroup.**IncrementalMPCiscostdifferencebetweenstandingpilot(baseline)andelectronicignitionsystem.32Issue 2:DOErequestscommentonitsassumptionthatignitioncomponentcostsforventedfireplaces,inserts,andstovesareequivalent.RequestforCommentEngineeringAnalysis33•DOEappliesamanufacturermarkuptothecalculatedMPC’stodeterminemanufacturersellingprices(MSP)•DOEestimatesanaveragemarkupof1.45basedoninputfromconfidentialmanufacturerinterviewsManufacturerMarkupൌ ݌ݑ݇ݎܽܯ	ݎ݁ݎݑݐ݂ܽܿݑܽ݊ܯݐ݂݅݋ݎܲ	ݏݏ݋ݎܩሻܵܩܱܥሺ	݈݀݋ܵ	ݏ݀݋݋ܩ	݂݋	ݐݏ݋ܥܵܩܱܥ െ	 ݁ݑ݁݊ݒܴ݁ ൌ ݐ݂݅݋ݎܲ	ݏݏ݋ݎܩIssue 3:DOErequestscommentonthederivedmanufacturerproductioncostsandmarkups.34PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments35MarkupsAnalysisPurpose•Determineconsumerpricebasedonmanufacturer’ssellingprice(MSP)forbaselineandhigher‐efficiencyproducts.•Characterizedistributionchannelsforhearthproducts.Methodology•Analyzefinancialdatafromeachmarketparticipanttodeterminemarkup.•Markupsforhearthproductsapplytoignitioncomponent.Replacements NewConstructionWholesalerConsumerManufacturerMechanicalContractorWholesalerConsumerManufacturerMechanicalContractorGeneralContractorMarkups DataSourcesManufacturerMarkup Basedoninputfrommanufacturers(seeengineeringanalysis).WholesalerMarkup* FirmincomestatementsfromtheHARDI2013ProfitReport.MechanicalContractorMarkup* ACCA2005FinancialAnalysisHVACRreport.GeneralContractorMarkup* US CensusBureau,2007EconomicCensus:ResidentialBuildingConstructionsector.SalesTax* 2013SalesTaxClearinghouseData.*Markupsdevelopedforeachgeographicarea36MarkupsAnalysisBaselineMarkups:•RelateMSP ofbaselineproductstoconsumerpurchaseprice.•BaselinemarkupisappliedtothebaselineMSP todeterminethebaselineconsumerpurchasepriceIncrementalMarkups:•RelatethechangeintheMSPofhigher‐efficiencyproducts(theincrementalcostincrease)tothechangeintheconsumerpurchaseprice.•CoversonlyexpensesthatvarywithMSP(e.g.,operatingexpensesandprofit).•Fixedcostssuchasoverheadandlabordonotscalewithincreasedefficiency.•IncrementalmarkupisappliedtotheMSPdifferenceofhigher‐efficiencyandbaselineproducts.37MarkupsAnalysisAverageMarkupsforMarketParticipantsRequestforCommentIssue4:DOEinvitescommentsonanyaspectrelatingtotheMarkupsAnalysis.MarketParticipantReplacement NewConstructionBaseline Incr. Baseline Incr.Manufacturer1.45 1.45Wholesaler1.36 1.10 1.36 1.11MechanicalContractor1.53 1.23 1.42 1.14GeneralContractor‐1.46 1.33SalesTax1.07‐OverallMarkup3.23 2.10 3.99 2.40BaselineMarkup IncrementalMarkupHearthProducts 3.43 2.17AverageOverallMarkups38EnergyUseCharacterizationPurpose•Determineannualenergyconsumptionofthehearthproductignitionsystem.•AnnualenergycostsareinputstoLife‐CycleCostandPaybackPeriodAnalysis.Methodology•Ignitionsystempower(QP):Standingpilot(SP)orintermittentpilot(IPI)ignitionsystempower,determinedintheengineeringanalysis.–SP:Fuelinputconsumedbythestandingpilot,Btu/hr.–IPI:Electricalpowerconsumedbytheintermittentpilotignitionsystem,W.•IgnitionSystemOperatingHours(OHP): On‐timeoftheSPorIPIignitionsystem.–SP:DeterminedusingfieldstudiesandRECS2009householddata.–IPI:Determinedbasedonhearthproductmainburneroperation.•ImpactonSpaceHeatingorCoolingEnergyUse(SecondaryEffects):Impactofignitionoperationonhouseholdspaceconditioningsystemenergyuse.–HeatingSeason:SPheatiscountedasbeneficialheatandreducesfurnaceoperatinghours.–Non‐HeatingSeason:SPheatiscountedasanadditionalcoolingloadandincreasesair‐conditioningoperatinghours.ࢋ࢙ࢁ࢟ࢍ࢘ࢋ࢔ࡱ࢒ࢇ࢚࢕ࢀࡽ ൌࡼࡴࡻ	 ൈࡼ࢙࢚ࢉࢋࢌࢌࡱ࢟࢘ࢇࢊ࢔࢕ࢉࢋࡿ	൅39EnergyUseCharacterizationBuildingSampleProductClass Count#ofHouseholds,(million)RECS2009VentedSample 541 4.67Ventless Sample 171 1.83VentedHearthProductVentlessHearthProductOutofSample Has FlueYes FluelessUsesNGorLPGNoRECS2009SampleOutofSampleNoVentingUsesaFireplaceforSpaceHeating?Yes40EnergyUseCharacterizationIgnitionSystemRepresentativePowerHearthProductTypeStandingPilot(Btu/h)IntermittentPilotIgnition(W)MainBurner(Btu/h)VentedFireplace,Insert,Stove 1,000 50 35,000UnventedFireplace,Insert,Stove 1,200 50 30,000VentedGasLogSets 700 50 35,000UnventedGasLogSets 800 50 25,000Outdoor 1,000 50 50,000ࢋ࢙ࢁ࢟ࢍ࢘ࢋ࢔ࡱ࢒ࢇ࢚࢕ࢀൌࡽࡼࡴࡻ	 ൈࡼ࢙࢚ࢉࢋࢌࢌࡱ࢟࢘ࢇࢊ࢔࢕ࢉࢋࡿ	൅41EnergyUseCharacterizationStandingPilotOperatingHoursMethodology•Propaneusersareexpectedtobehaveasinmode2,andconstituted25%ofhearthproductsusers(basedonRECS2009).•Frequencychartshowsthefractionofuserswiththoseoperatinghours•SPoperatinghours(average):3708•DOEidentifiedthreebehaviormodesforgas‐firedhearthproducts,fromafieldstudy1:1. 40%ofusersleavetheirSPon“allyear.”2. 20%ofusersturnofftheirSP dailywheninuse.3. Highvariationamongremaining40%ofusers,withmanyturningtheirSPoffattheendoftheheatingseason.•Foreachmode,DOEassumedadistributionofoperatinghoursbasedonthatmodeandhouseholdcharacteristics,includingheatingseasonlengthandmainburneruse.ࢋ࢙ࢁ࢟ࢍ࢘ࢋ࢔ࡱ࢒ࢇ࢚࢕ࢀࡽ ൌࡼൈࡴࡻࡼ࢙࢚ࢉࢋࢌࢌࡱ࢟࢘ࢇࢊ࢔࢕ࢉࢋࡿ	൅1:Hayden,CANMETEnergyTechnologyCentre(CETC),199742EnergyUseCharacterizationIPI OperatingHoursAssumptions•AverageMainBurnercycletime=20minutes1•MainBurnerCyclesperhour=3•IPIOperationperCycle=30secondsResults•IPIoperatinghours(average)= 3.9hours/yearൌ ݏݎݑ݋ܪ	݅݊݃ݐܽݎ݁݌ܱ	ܫܲܫܫܲܫሺ ∗ ݏݎݑ݋ܪ	݅݊݃ݐܽݎ݁݌ܱ	ݎ݊݁ݎݑܤ	ܽ݅݊ܯܱ݊െܶ݅݉݁ݎ݁݌ݎݑ݋ܪሻܫܲܫܱ݊െܶ݅݉݁ݎ݁݌ݎݑ݋ܪ݈ܿ݁ݕܥ	ݎ݁݌	݊݋݅ݐܽݎ݁݌ܱ	ܫܲܫ ∗ ݎݑ݋݄	ݎ݁݌	ݏ݈ܿ݁ݕܥ	ݎ݊݁ݎݑܤ	ܽ݅݊ܯ ൌࢋ࢙ࢁ࢟ࢍ࢘ࢋ࢔ࡱ࢒ࢇ࢚࢕ࢀࡽ ൌࡼൈࡴࡻࡼ࢙࢚ࢉࢋࢌࢌࡱ࢟࢘ࢇࢊ࢔࢕ࢉࢋࡿ	൅1:DOETestProcedureforVentedHomeHeatingEquipment,10CFRPart430,SubpartB,AppendixO.43EnergyUseCharacterizationMainBurnerOperatingHoursܪܱ௥௡௘௥ ௨௔௜௡	஻ெൌݏݎ݋ݐܽܿܨ݆݀ܣ ൈ ݁ݏܷ	ݕ݃ݎ݊݁ܧ	ݐܿݑ݀݋ݎܲ	݄ݐݎ݁ܽܪݕݐܽܿ݅݌ܽܥ	ݐݑ݌݊ܫ	ݎ݊݁ݎݑܤ	ܽ݅݊ܯ•HearthProductEnergyUse:energyusedbythehearthproduct.–DeterminedfromhearthproductenergyuseaslistedinRECS2009•MainBurnerInputCapacity: determinedinengineeringanalysis.•Adjustmentfactors(AdjFactor):–Adjustheating/coolingloadtoprojected2021valuetoaccountingforbuildingshellefficiency(basedonAEO2014)andaverageclimateconditions(basedon10‐yearNOAAclimatedata)44EnergyUseCharacterizationImpactonSpaceHeatingorCoolingEnergyUse•s(index)=season(heatingorcoolingseason)•QP=powerconsumptionofthepilot•OHP,S=pilotoperatinghoursinthatseason•EUSE,pilot=energyconsumedbythepilot•ߟܲ=fractionofusefulheatfromthepilot–Distributionbasedonfieldstudy1–Assumedhalffordecorativeunits–Assumeddoubleforunventedunits•ߟs=efficiencyofthemainheatingorcoolingappliance2(ܵ݁ܿ݋݊݀ܽݕݎ	ܧ݂݂݁ܿݏݐሻݏൌா௎ௌா,௣௜௟௢௧∗ఎ௉ఎ 

# sܧܧܷܵ,ݐ݋݈݅݌ܳ ൌ௉ܪܱ ∗ௌ,௉1:ηࡼderivedfromfieldstudy;includesfurnacecoincidencefactor,infiltration,aswellasheattransfer(Armstrong etal,CanadianCentreforHousingTechnology(CCHT),2010)2:AEO2014ࢋ࢙ࢁ࢟ࢍ࢘ࢋ࢔ࡱ࢒ࢇ࢚࢕ࢀࡽ ൌࡼࡴࡻ	 ൈࡼ൅࢙࢚ࢉࢋࢌࢌࡱ࢟࢘ࢇࢊ࢔࢕ࢉࢋࡿ45EnergyUseCharacterizationSummaryofSPResults**NofuelusebyIPI.***TotalimpactofIPIarecalculatedusingthemarket‐share‐weightedaverageofeachproducttype.†ReflectsimpactsoflackofstandingpilotheatHearthProductTypeTotalFuelUse*(MMBtu/yr)VentedFireplace,Insert,Stove 3.99UnventedFireplace,Insert,Stove 3.52VentedGasLogSets 3.13UnventedGasLogSets 2.29Outdoor 3.91AllSP HearthProducts 3.58HearthProductTypeElectricityUse**(kWh/yr)SpaceHeatingFuel Impact†(MMBtu/yr)SpaceHeatingElectricity Impact†(kWh/yr)SpaceCoolingElectricity Impact†(kWh/yr)VentedFireplace,Insert, Stove 0.19 0.50 25.2‐12.8UnventedFireplace,Insert,Stove 0.18 1.30 155‐49.5VentedGasLogSets 0.30 0.29 15.5‐7.0UnventedGasLogSets 0.22 0.92 102‐49.5Outdoor 0.18 0.00 0.00 0.00AllIPI HearthProducts***0.20 0.58 45.5‐21.1SummaryofIPI Results*NoelectricityusebySP46EnergyUseCharacterizationRequestforCommentIssue6:DOEinvitescommentonanyaspectrelatingtotheEnergyUseCharacterization.Issue5:DOErequestscommentonthepilotusagemethodology,specificallythepercentagesofconsumerswhooperatetheirhearthproductstandingpilotsyearround,foronlytheheatingseason,onlywhenoperatingtheunit,andtheconsiderationofheatinputintothespace.47PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments48Life‐CycleCostandPaybackPeriodAnalysisPurpose•Provideaneconomicevaluationfromtheconsumer’sperspective.•Life‐CycleCost(LCC)isthetotalconsumercostoverthelifeoftheproduct.•PaybackPeriod(PBP)isthetimerequiredtorecovertheincreasedpurchasepriceofmoreenergy‐efficientproductsthroughreducedoperatingcosts.Method•Useconsumersamplesdevelopedintheenergyuseanalysis.•AnalysismodelstheuncertaintyandvariabilityofinputsusingMonteCarloapproachandprobabilitydistributionsusingExcel® withCrystalBall.®ൌ ܲܤܲݐݏ݋ܥ	݈݈ܽ݁݀ݐݏ݊ܫ	݈ܽݐ݋ܶ∆ݐݏ݋ܥ	݅݊݃ݐܽݎ݁݌ܱ	ݎܻ݁ܽ	ݐݏݎ݅ܨ∆ݐݏ݋ܥ	݅݊݃ݐܽݎ݁݌ܱ	݅݉݁ݐ݂݅݁ܮ ൅ ݐݏ݋ܥ	݈݈ܽ݁݀ݐݏ݊ܫ	݈ܽݐ݋ܶ ൌ ܥܥܮܥܥܮ ൌ ݏ݅݊݃ݒܵܽ	ܥܥܮௌ௧ௗܥܥܮ െ௘௦஻௔49Life‐CycleCostandPaybackPeriod AnalysisLCC&PaybackPeriodAnalysisFlowchartEngineeringAnalysisMarkupstoDetermineProductPriceEnergyUseCharacterizationBaselineManufacturerCostStandard‐LevelManufacturerCostManufacturerMarkupDistributer&ContractorMarkupsSalesTaxBaselineEnergyConsumptionStandard‐LevelEnergyConsumptionConsumerPriceInstallationCostTotalInstalledCostAnnualEnergyCostRepairCostMaintenanceCostAnnualOperatingExpenseLifetimeDiscountRateEnergyPriceTrendLifetimeOperatingExpensePaybackPeriodLife‐CycleCostMarginalEnergyPrices50Life‐CycleCostandPaybackPeriodAnalysisConsumerPriceݏ݌ݑ݇ݎܽܯ ൈ ݐݏ݋ܥ	݅݊݃ݎݑݐ݂ܽܿݑܽ݊ܯ ൌ ݅ܿ݁ݎܲ	ݎ݉݁ݑݏ݊݋ܥ•Manufacturingproductioncostsderivedfromengineeringanalysis.•Markupsandsalestaxesdeterminedfromthemarkupsanalysis.•Consumerpricesdeterminedforbothignitionsystems.•Pricetrendassumedconstant.Ignition Type AverageConsumer Price(2013$)StandingPilot 165.21Intermittent Pilot 247.2951LCCandPaybackPeriodAnalysisInstallationCostsPurpose•Representthelaborandmaterialcostsnecessarytoinstallthehearthproductignitionsystem.–Incrementalcostsofignitionsystemonly–ElectricConnection,consideredforhousesbuiltpriorto1990–ElectricalGrounding,consideredforhousesbuiltpriorto1960Sources•2013RSMeans(MechanicalandLaborCostData)•ManufacturerliteratureIssue7:DOErequestscommentoninstallationandretrofitassumptionsregardingelectricalconnectionsandgrounding.Description AverageCost(2013$) PercentofHouseholds AffectedElectricalConnection 141 13.3%ElectricalGrounding 32 2.6%52EnergyPricesLCCandPaybackPeriodAnalysisPurpose•Developaveragemarginalmonthlypricesbygeographicalarea.Methodology•Multipliedmostcurrentaverageannualenergypricesbymonthlypricefactorsandmarginalpricefactors.−2012averageannualenergypricesbygeographicalareabasedon:•ElectricityPrices:EIA’s2012Form826data•NaturalGas:EIA’s2012NaturalGasNavigatormonthlydata•Oil:EIA’s2012StateEnergyConsumption,Price,andExpendituresEstimates(SEDS)−Monthlyenergypricefactorsbygeographicalareabasedon:•ElectricityPrices:EIA’s1990‐2012Form826monthlydata•NaturalGas:EIA’s1989‐2012NaturalGasNavigatormonthlydata•OilandLPG:EIA’s2009Short‐TermEnergyOutlook,1995‐2009historicaldata−Marginalenergypricefactorsforelectricityandnaturalgasby30geographicareasbasedonEIAmonthlydatafrom2003‐2012.53Methodology•2012averagemonthlymarginalenergypricesbygeographicalareamultipliedbytheprojectedannualenergypricetrendsforthecorrespondingCensusDivision−2021‐2040 trendsbasedonEIA’sAEO2014byCensusDivision−After2040 trendsbasedonFederalEnergyManagementProgram(FEMP)guidelines•Marginalenergypricescalculatedfromcurrentenergypricesandmarginalpricefactorsbygeographicalarea.EnergyPriceTrendsNational Projected Residential Energy PricesLife‐CycleCostandPaybackPeriodAnalysis54LCCandPaybackPeriodAnalysisRepairandMaintenance•MaintenanceCosts:Laborandmaterialrequiredtoensureongoingproductoperation.DOEdidnotidentifyspecificmaintenancerequirementsforeitherhearthproductignitionsystem,andassumednomaintenancecost.•RepairCosts:Costofreplacingorrepairingfailedcomponents.Becausetheignitionsystemisacomponentofthehearthproduct,DOEassumedrepairandreplacecostarethesame.–Frequency:Determinedbasedonwarrantyinfoandhearthproductlifetime.–Cost:Equaltothecomponentcostofthemodule.•Sources–Materialcost:Engineeringanalysis–Laborcost:2013RSMeansFacilitiesRepairandMaintenanceData–ManufacturerliteratureandinterviewsIssue8:DOErequestscommentonignitionmodulerepair.Description AverageValueIgnitionRepairYear 9.6yearsStandingPilotRepairCost $248IntermittentPilotRepairCost $32255LifetimeLCCandPaybackPeriodAnalysis•Definition:Agewhenthehearthproductisretiredfromservice.•Methodology:Thedistributionoflifetimesisbasedonwarrantyinformationfrommanufacturerliterature,publishedstudiesonthelifetimedistribution1,andsimilarproducts2fortheaveragelifetime.•Results:Medianlifetimeof15.0years.Issue9:DOErequestscommentonlifetimeassumptions.1:Lutz,etal,Usingnationalsurveydatatoestimatelifetimesofresidentialappliances,20112:DHE:10CFR430ID:EERE‐2006‐STD‐0129‐017056Discount RatesLCC and Payback Period Analysis•Purpose:Usedtodeterminethepresentvalueoflifetimeoperatingexpenseswhenaproductisretiredfromservice.•Methodology:Useddataoninterestorreturnratesforvarioustypesofdebtandequitytocalculatearealeffectivediscountrateforeachhousehold.Toaccountforvariationamonghouseholdsinratesforeachofthetypesofdebtandequity,DOEsampledadiscountrateforeachhouseholdfromadistributionofdiscountratesforeachofsixincomegroups.•Primarydatasources:TheFederalReserveBoard’sSurveyofConsumerFinancesin1995,1998,2001,2004,2007,and2010•Results:Averagediscountrate:4.2%DistributionofReal DiscountRatesbyIncomeGroup57Base‐CaseEfficiencyDistributionLCCandPaybackPeriodAnalysisPurpose:Reflectstheprojectedmarketshareofproductsatdifferentefficiencylevelsinthebasecase(intheabsenceofastandard)in2021.•Notallconsumerspurchaseproductsatcurrentminimumstandard.•Consumersalreadypurchasingproductsatefficienciesgreaterthanorequaltotheprospectivestandardlevelarenotimpactedbythestandard.Methodology:Usedhistoricalmodeldata.Assumedconstantdistributionovertime.Issue10:DOErequestscommentontheestimatedbase‐caseefficiencydistribution.HearthProductType FractionofAllHearthProductsSP IPIVentedFireplace, Insert,Stove 61% 42% 58%UnventedFireplace,Insert,Stove 5% 88% 12%VentedGasLogSets 4% 88% 12%UnventedGasLog Sets 21% 94% 6%Outdoor 9% 52% 48%WeightedAverageof allHearthProducts 58% 42%*Includesfireplaces,inserts,andstoves.58Parameter ValueorSourceComplianceYear2021DollarYear2013$BuildingSampleRECS2009LaborCosts2013RSMeansInstallationCostsAverage$20increaseincostRepairEqualtomaterialcostmultipliedbyrepairmarkupEnergyPricesElectricity:EIA’sForm826dataNaturalgas:EIA’sNaturalGasNavigatorLPG:EIA’s2012StateEnergyConsumption,Price,andExpendituresEstimates(SEDS)EnergyPriceTrendsEIA’sAEO2014DiscountRates1995‐2010FederalReserveBoard’sSurveyofConsumerFinancesdataLifetime•Averageignitionsystemrepairyear:9.6years•Averagehearthproductlifetime:15yearsBase‐CaseEfficiencyDistribution•SPMarketShare: 58%•IPIMarketShare: 42%ProductSwitchingAssumednoproductswitchinginthestandardcaseLife‐CycleCostandPaybackPeriodAnalysisSummaryofNOPRLCCInputsWeightedaverageofallhearthproductstypes59Life‐CycleCostandPaybackPeriodAnalysisLCCandPBPAnalysisResultsTSL DesignAverageCosts2013$PBPyearsInstalledCostFirstYear’sOperatingCostLifetimeOperatingCostLCC0 SP $166 $50 $602 $769‐1 IPI $268 $15 $174 $442 2.9TSL DesignLCCSavings(2013$)ConsumerswithNetCost(%)1 IPI 165 2360Life‐CycleCostandPaybackPeriodAnalysisIssue11:DOErequestscommentontheconstantpricetrendappliedtothehearthproductMSP.RequestforCommentIssue12:DOEinvitescommentonanyaspectrelatingtotheLife‐CycleCostandPaybackPeriodAnalysis.61PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments62Purpose•Forecastthehearthproductsthatwouldbeexpectedtobeshippedbetween2021and2050withandwithoutanenergyconservationstandard.Methodology•ShipmentProjections:Estimatethenumberofhearthproductsshippedannuallyintheabsenceofnewstandards(basecase)andstandardscasebetween2021and2050.– Historicalhearthproductshipmentsarehighlycorrelatedwithhousingstarts.1,2– Estimatedhearthproductshipmentsfrom2021to2050basedonhousingstartprojections.3•PriceElasticity:Accountsfortheimpactofincreasedpricesduetoastandardonshipments.ShipmentsAnalysis1:Congruentwithindustryanalysts.SeeHouck,JamesE."GasHeartoftheHearth."Hearth&HomeSept.2014:58.2:Correlationfactorr=0.983:EIA’sAEO201463HistoricalProjectedShipments AnalysisHistoricalandProjectedShipmentsforHearthProducts(Normalized)AEO2014HousingStartsProjectionsPriceElasticityEffectsinstandardyear(2021)CorrelationCoefficient=0.9864HistoricalProjectedShipments AnalysisHistoricalandProjectedShipmentsforHearthProducts(Normalized)AEO2014HousingStartsProjections65HistoricalProjectedShipments AnalysisHistoricalandProjectedShipmentsforHearthProducts(Normalized)AEO2014HousingStartsProjections66HistoricalProjectedShipments AnalysisHistoricalandProjectedShipmentsforHearthProducts(Normalized)PriceElasticityEffectsinstandardyear(2021)67ShipmentsAnalysisIssue13:DOErequestscommentonDOE’smethodologytocorrelatehousingstartswithhearthproductsshipments.RequestforCommentIssue14:DOEinvitescommentonanyaspectrelatingtotheShipmentsAnalysis68NationalImpactAnalysisPurpose•Estimatenationalimpactsofanenergyconservationstandardoverthelifetimeofhearthproductsshippedbetween2021and2050.•NationalEnergySavings(NES):Differenceinthelifetimeenergyconsumptionofhearthproductsforthebasecasecomparedtothestandardcase.•NetPresentValue(NPV):Differencebetweenthepresentvalueofinstalledcostandthepresentvalueofoperatingcostsovertheanalysisperiod(2021‐2050).Methodology•Foreachproducttypeinthestandardcase:1. Determineper‐unitcostincreaseandper‐unitenergysavingsduetothestandard.2. Determinenumberofunits(stock)basedonshipmentsintheanalysisperiodandthelifetime.3. DetermineNESbymultiplyingtheannualenergysavingsforeachcasebytheprojectedhearthproductshipmentsforeachyear,summingoverthelifetimeofunitsshippedintheanalysisperiod.4. Determinenetcostsavingsastheaggregatedifferenceeachyearbetweentheoperatingcostsavingsandincreasedinstalledcosts.5. Applyadiscountfactortodeterminepresentvalueofsavingsandcosts.6. DeterminethenationalNPVbysummingthepresentvalueofallshipmentsintheanalysisperiod.69NationalImpactAnalysis*Overlifetimeofproductsshippedfrom2021‐2050.NationalEnergySavingsStandard‐CaseCumulativeEnergyUse*Base‐CaseAnnualEnergyConsumptionShipmentsAnalysisBase‐CaseCumulativeEnergyUse*NationalEnergySavingsSite‐to‐SourceEnergyConversionStandard‐CaseAnnualEnergyConsumptionStandard‐CaseProjectionBase‐CaseProjection70NationalImpactAnalysisNetPresentValueStandard‐CaseProjectionBase‐CaseProjectionCumulativeTotalConsumerCostIncrease*EnergyCostNetPresentValueDiscountRateCumulativeOperatingCostSavings*ShipmentsAnalysisMaintenanceandRepairCostProductCostEnergyCostMaintenanceandRepairCostProductCost*Overlifetimeofproductsshippedfrom2021‐2050.71Input MethodologyAnnualUnitEnergyConsumption(UEC)DeterminedfromLCCanalysisresults.ShipmentsProjectedshipmentsforeachproducttypeunderthebasecaseandstandardcase.SeeTSDchapter9.ProductStockDeterminedusingannualshipmentsandlifetimesforeachproducttype.Base‐CaseEfficienciesDevelopedadistributionofefficienciesinthebasecasefor2021(seeTSDchapter8).Ineachstandardcase,“roll‐up”scenarioisusedtoestablishtheefficiencydistribution.Site‐to‐PowerPlantandFull‐Fuel‐Cycle(FFC)EnergyFactorsConvertssiteelectricityintoprimary(powerplant)energyconsumption.Inaddition,FFCaccountsfortheenergyusedforresourceextractionanddistributionlosses.TotalInstalledCostperUnitDeterminedfromLCCanalysisresults.TotalOperatingCostperUnitIncludescostsforenergy,maintenance,andrepairdeterminedforeachproducttypebasedonLCCanalysis.DiscountFactorUsedtodeterminepresentvalueoffuturemonetaryvaluesbasedondiscountrate(seeappendix8D).NationalImpactAnalysisNationalImpactAnalysis(NIA)Inputs72Input ValueComplianceYear2021DollarYear2013$DiscountFactors3%and7%inaccordancewiththeOfficeofManagementandBudget’sguidance.LCCOutputResultstoNIADisaggregatedbyproducttype.EnergyPriceTrendsEIA’sAEO2014.BaseCaseIgnitionSystemDistributionSPMarketShare:58%IPIMarketShare:42%StandardCaseIgnitionSystemDistributionSPMarketShare:0%IPI MarketShare:100%Site‐to‐PowerPlantandFull‐Fuel‐Cycle(FFC)EnergyUseFactorsBasedonEIA’sAEO2014.NationalImpactAnalysisInputValues73•Productsbelowstandardwill“roll‐up”tocomplywithastandard.Productsatorabovethestandardwillnotbeaffected.•IPImarketsharewillincreasefromthebaselineestimateof42%to100%in2021afterthestandardcomesintoeffect.TrialStandardLevel(TSL)SelectionCriteria:•TSL1:disallowstandingpilotlights.TSLMarketShareforHearthProductIPIBase case42%1100%Base‐CaseEfficiencyandTrialStandardLevelNationalImpactAnalysis74NationalImpactAnalysisDescription ValuePrimaryNationalEnergySavings(quads) 0.62Full‐Fuel‐CycleNationalEnergySavings(quads) 0.69NPVofConsumerBenefit,Discountedat3%(billion2013$) 3.12NPVofConsumerBenefit,Discountedat7%(billion2013$) 1.03SummaryofNIAResultsforHearthProducts75NationalImpactAnalysisRequestforCommentIssue15:DOEinvitescommentonanyaspectrelatingtotheNationalImpactAnalysis.76Purpose•Investigatenationalimpactsofnon‐regulatoryalternativestomandatoryamendedenergyconservationstandards.Methodology•UsedmodifiedNIAspreadsheettoevaluatenon‐regulatoryalternativestotheproposedstandard:Results•NESandNPVfornon‐regulatoryalternatives.•Noalternativewasfoundtobeasbeneficialastheproposedenergyconservationstandard.(Seechapter17oftheTSDformethodologyandresults.)RegulatoryImpactAnalysis•NoNewRegulatoryAction•ManufacturerTaxCredits•ConsumerRebates•VoluntaryEnergyEfficiencyTargets•ConsumerTaxCredits•BulkGovernmentPurchases77PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments78Purpose:•Toassesstheimpactsofstandardsonmanufacturers;•Toidentifyandestimateimpactsonmanufacturersubgroupsthatmaybemoreseverelyaffectedthantheindustryasawhole;and•Toexaminethedirectemployment,manufacturingcapacity,andcumulativeregulatoryimpactsontheindustry.Methodology:•Analyzeindustrycashflowandindustrynetpresentvalue(INPV)throughuseoftheGovernmentRegulatoryImpactModel(GRIM);and•InterviewmanufacturerstorefineinputstotheGRIM,developsubgroupanalyses,andaddressqualitativeissues.MIA:OverviewDetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD79•Phase1–DOEcreatesanindustryprofiletocharacterizethemarketandidentifyimportantissuesthatrequirefurtherinvestigation.•Phase2–DOEpreparesanindustrycash‐flowmodelandaninterviewquestionnairetoguidesubsequentdiscussionswithmanufacturers.•Phase3–DOEinterviewsmanufacturersandassessestheimpactsofstandardsbothquantitatively(usingtheGRIM)andqualitatively(impactsonemployment,competition,manufacturingcapacity,andregulatoryburden).MIA:MethodologyDetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD80MIA:Methodology•UpstreamInputs–MarketandTechnologyAssessment(MTA)IndustryProfile–EngineeringMPCs–Shipments•MIAInputs–MarkupScenarios–ConversionCostsDetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD81MIA:KeyIssues•ImpactsonManufacturerProfitability–Manufacturersindicatedcostincreasescouldreducesalesvolumesandprofits.•ImpactsonIndustryCompetition–Smallermanufacturersexpressedconcernregardingtheirabilitytocompeteagainstlargermanufacturers.•ImpactsonProductPerformance–Severalmanufacturersstatedthatelectronicignitionsystemsaremorecomplicatedandlessreliablethanstandingpilotlights.DetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD82•DOEmodeledtwomarkupscenariostocapturearangeofpotentialfinancialimpactsontheindustry:–PreservationofGrossMarginPercentageMarkupScenario•Representstheupperboundofprofitabilityimpacts.–PreservationofPer‐UnitOperatingProfitMarkupScenario•Representsthelowerboundofprofitabilityimpacts.MIA:MarkupScenariosDetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD83MIA:INPVResultsUnits BaseCase TSL1INPV2013$M 125.3 122.0to125.8ChangeinINPV2013$M‐(3.3)to0.5%Change‐(2.6)to0.4ProductConversionCosts2013$M‐7.8CapitalConversionCosts2013$M‐0.9Total ConversionCosts2013$M‐8.7Note:Parenthesesindicatenegativevalues.•SummaryofTSL1–ExpectedINPVchangeintherangeof‐2.6%to0.4%–Expectedconversioncoststotal$8.7millionfortheindustryDetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD84MIA:SmallBusinessImpacts•DOEidentified66domesticsmallbusinessmanufacturersofhearthproducts.–Smallbusinessesweredefinedashaving500employeesorfewerbasedonSBAsmallbusinesssizestandards.•Theproposedstandarddisallowinguseofstandingpilotlightscouldrequiremanufacturerstopurchasemoreexpensivecomponentsforelectronicignitionsystems.•Largemanufacturerstendtoproduceathighervolumesandmayenjoyacompetitiveadvantageduetotheirabilitytosourceelectronicignitioncomponentsatlowercost.DetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD85MIA:SubgroupofGasLogSetManufacturers•AddafewbulletsplustableofINPVimpacts•DOEidentified90manufacturersofhearthproducts,including23manufacturersofgaslogsets.•Duringinterviews,gaslogsetmanufacturersnoted:–Gaslogsetsrepresentadistinctmarketsegment,competingwithwoodandwaxlogsinpre‐existingfireplaces.–Electronicignitionsystems1takeupmorespacethanstandingpilotlights,maybedifficulttoconceal,andcouldimpactproductaestheticsandinstallationcosts.–MPCsarerelativelylow,andashifttomoreexpensiveelectronicignitionsystemscouldhaveagreaterproportionalimpactonMPC.Product Group Baseline MPCMPC withElectronic Ignition% Increase inOverall MPCVentedFireplace/Insert/Stove$322 $350 9%UnventedFireplace/Insert/Stove$281 $313 11%Vented Gas Logs$190 $260 37%Unvented Gas Logs$208 $264 27%Outdoor$210 $265 26%1The vast majority of gas log sets areunvented units. Under ANSIZ21.11.2, which bans match-lit ignition for indoorvent-free units, these productswould not have the option of converting to match-litand would have to transition toelectronic ignition.DetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD86MIA:SmallBusinessImpactsIssue 16:DOE requests comment on the number ofsmall manufacturers of hearth products; on the potentialimpacts of an energy conservation standard on thosesmall manufacturers; and on the severity of thoseimpacts.DetailsoftheManufacturerImpactAnalysiscanbefoundinchapter12oftheTSD87PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments88EmissionsAnalysisPurpose•Estimateemissionreductionsresultingfromastandard.•Includesfull‐fuel‐cycle(FFC)emissions,whichaccountforpowerplantandupstreamemissions.•Includesfugitivemethaneemissions.Methodology•DOEassessedtheenvironmentalimpactsusingAEO2014toderiveemissionsfactors,whichareappliedtotheannualenergysavings.Results•EnergysavingsfromtheproposedstandardwouldbeexpectedtoreducecumulativeFFCemissionsby:– 37.0millionmetrictons(Mt)ofCO2– 125thousandtonsofNOX– 0.01thousandtonsofN2O– 486thousandtonsofCH4•Duetoincreasedelectricityuse,theproposedstandardwouldbeexpectedtoincreaseFFCcumulativeemissionsby:– 4.26tonsofSO2– 0.01tonsofHg89MonetizationofEmissionReductionsPurpose•Estimatethemonetarybenefitofreducedemissionsresultingfromtheproposedenergyconservationstandard.Methodology•UsedthemostcurrentSocialCostofCarbon(SCC)valuesdevelopedthroughinteragencyreviews.–SCCisintendedtobeamonetarymeasureoftheincrementaldamageresultingfromgreenhousegas(GHG)emissions,includingbutnotlimitedtoagriculturalproductivityloss,humanhealtheffects,damagefromrisingsealevels,andchangesintheecosystem.•Interagencyestimates1ofthepotentialglobalbenefitsresultingfromreducedCO2emissionsin2015are$12.0,$40.5,$62.4,and$119.0permetricton(2013$).•Foremissionreductionsthatoccurinlateryears,thesevaluesgrowbasedontherelevantgrowthratesfor2040‐2050inthe2013interagencyupdate.•DOEalsomonetizedNOxemissions2reductionsresultingfromanamendedstandard.– Estimatesofmonetaryvaluerangefrom$476to$4,893pershortton.– DOEcalculatedmonetarybenefitsusingamedianvalueof$2,684pershortton.Benefits ofEmissionsReductions(million2013$)CO2226to3405NOX3%discountrate 147.5NOX7%discountrate 57.91:InteragencyWorkingGroup,2010and20132:OMBreporttoCongress,200690Utility Impact AnalysisPurpose•Assessimpactsonelectricutilitysectorduetoadoptionoftheproposedstandard.Methodology•UseddatafromtheAEOreferencecaseandefficiency‐relatedsidecasestoestimatemarginalimpactfactors.– Themarginalimpactfactorsquantifythechangeingeneration,installedcapacity,andemissionsperunitofsiteelectricitydemandreduction.•TotalutilitysectorimpactsareequaltotheimpactfactorsmultipliedbytheNES.Results•Changesintotalelectricitygenerationbyfueltype.•Changesinprimaryfuelconsumption(e.g.,naturalgas,coal,andpetroleum‐basedfuels).•Changestototalinstalledcapacitybyfuelandtechnologytype.Forfurtherdetails,seechapter15oftheNOPRTSD.91IndirectEmploymentImpactAnalysisPurpose•Assesstheoverallimpactonindirect*nationalemploymentfromtheproposedenergyconservationstandardthatresultsfromshiftingconsumerexpendituresamonggoodsandservicesandchangingproductandenergycosts.Methodology•UsedtheImpactofSectorEnergyTechnologies(ImSET)modeltoevaluateindirectemploymentimpacts.•ChangesinnationalproductandenergyexpendituresfromtheNIAareenteredasinputsintoImSET.Results•Netlabormarketimpactswillbesmallovertimeduetothesmallmagnitudeoftheshort‐termeffects.(Seechapter16oftheTSD.)*DirectnationalemploymentimpactsarediscussedintheManufacturerImpactAnalysis(MIA).92PublicMeetingAgenda1Overview2Market & Technology Assessment3Engineering Analysis4Markups Analysis and Energy Use5Life-Cycle Cost and Payback Period Analysis6Shipments, National, Regulatory Impact Analyses7Manufacturer Impact Analysis8Environmental, Utility, Indirect Employment Impact Analyses9Closing Remarks and How to Submit Comments93HowtoSubmitComments•Inallcorrespondence,pleaseincludeallofthefollowing:oEnergyConservationStandardsforHearthProductsoDocketNumber:EERE‐2014‐BT‐STD‐0036oRegulatoryIdentificationNumber(RIN):1904‐AD35•ContactInformationEmail:HearthHeatingProd2014STD0036@ee.doe.govPostalMail:Ms.BrendaEdwardsU.S.DepartmentofEnergyBuildingTechnologiesOfficeMailstopEE‐5B1000IndependenceAvenue,S.W.Washington,DC20585‐0121Courier:Ms.BrendaEdwardsU.S.DepartmentofEnergyBuildingTechnologiesOfficeL’EnfantPlaza,S.W.,Suite600Washington,DC20024Telephone:(202)586‐2945•CommentperiodclosesApril10,2015at11:59PMEDT