83426 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Part 430 

[EERE–2021–BT–STD–0031] 

RIN 1904–AF19 

Energy Conservation Program: Energy 

Conservation Standards for Oil, 

Electric, and Weatherized Gas 

Consumer Furnaces 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notification of proposed 

determination and request for comment. 

SUMMARY: The Energy Policy and 

Conservation Act, as amended 

(‘‘EPCA’’), prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including non-weatherized oil-fired 

furnaces (‘‘NWOFs’’), mobile home oilfired furnaces (‘‘MHOFs’’), weatherized 

gas furnaces (‘‘WGFs’’), weatherized oilfired furnaces (‘‘WOFs’’), and electric 

furnaces (‘‘EFs’’). EPCA also requires the 

U.S. Department of Energy (‘‘DOE’’) to 

periodically review its existing 

standards to determine whether morestringent, amended standards would be 

technologically feasible and 

economically justified, and would result 

in significant energy savings. In this 

notification of proposed determination 

(‘‘NOPD’’), DOE has initially determined 

that amended energy conservation 

standards for EFs, NWOFs, MHOFs, 

WOFs, and WGFs do not need to be 

amended. DOE requests comment on 

this proposed determination and the 

associated analyses and results. 

DATES: 

Meeting: DOE will hold a public 

meeting webinar upon request. Please 

request a public meeting webinar no 

later than December 13, 2023. See 

section VI, ‘‘Public Participation,’’ for 

webinar registration information, 

participant instructions, and 

information about the capabilities 

available to webinar participants. 

Comments: Written comments and 

information are requested and will be 

accepted on or before January 29, 2024. 

ADDRESSES: Interested persons are 

encouraged to submit comments using 

the Federal eRulemaking Portal at 

www.regulations.gov under docket 

number EERE–2021–BT–STD–0031. 

Follow the instructions for submitting 

comments. 

Alternatively, interested persons may 

submit comments, identified by docket 

number EERE–2021–BT–STD–0031 

and/or RIN 1904–AF19, by any of the 

following methods: 

Email: 

OEWGFurnaces2021STD0031@

ee.doe.gov. Include the docket number 

EERE–2021–BT–STD–0031 and/or RIN 

1904–AF19 in the subject line of the 

message. 

Postal Mail: Appliance and 

Equipment Standards Program, U.S. 

Department of Energy, Building 

Technologies Office, Mailstop EE–5B, 

1000 Independence Avenue SW, 

Washington, DC 20585–0121. 

Telephone: (202) 287–1445. If possible, 

please submit all items on a compact 

disc (‘‘CD’’), in which case it is not 

necessary to include printed copies. 

Hand Delivery/Courier: Appliance 

and Equipment Standards Program, U.S. 

Department of Energy, Building 

Technologies Office, 950 L’Enfant Plaza 

SW, 6th Floor, Washington, DC 20024. 

Telephone: (202) 287–1445. If possible, 

please submit all items on a CD, in 

which case it is not necessary to include 

printed copies. 

No telefacsimiles (‘‘faxes’’) will be 

accepted. For detailed instructions on 

submitting comments and additional 

information on this process, see section 

VII of this document (Public 

Participation). 

Docket: The docket, which includes 

Federal Register notices, public meeting 

attendee lists and transcripts, 

comments, and other supporting 

documents/materials, is available for 

review at www.regulations.gov. All 

documents in the docket are listed in 

the www.regulations.gov index. 

However, not all documents listed in 

the index may be publicly available, 

such as information that is exempt from 

public disclosure. 

The docket web page can be found at 

www.regulations.gov/docket/EERE2021-BT-STD-0031. The docket web 

page contains instructions on how to 

access all documents, including public 

comments, in the docket. See section 

VII, ‘‘Public Participation,’’ for further 

information on how to submit 

comments through 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Ms. Julia Hegarty, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Office, EE–5B, 1000 

Independence Avenue SW, Washington, 

DC 20585–0121. Telephone: (240) 597– 

6737. Email: 

ApplianceStandardsQuestions@

ee.doe.gov. 

Mr. Eric Stas, U.S. Department of 

Energy, Office of the General Counsel, 

GC–33, 1000 Independence Avenue SW, 

Washington, DC 20585–0121. 

Telephone: (202) 586–5827. Email: 

Eric.Stas@hq.doe.gov. 

For further information on how to 

submit a comment or review other 

public comments and the docket contact 

the Appliance and Equipment 

Standards Program staff at (202) 287– 

1445 or by email: 

ApplianceStandardsQuestions@

ee.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Synopsis of the Proposed Determination 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemakings for 

Consumer Furnaces 

C. Deviation From Appendix A 

III. General Discussion and Rationale 

A. General Comments 

1. Comments Supporting Amended 

Standards 

2. Comments Opposing Amended 

Standards 

3. Standby Mode and Off Mode 

B. Scope of Coverage and Product Classes 

C. Test Procedure 

D. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

E. Cost-Effectiveness 

F. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

G. Additional Considerations 

IV. Methodology and Discussion of Related 

Comments 

A. Market and Technology Assessment 

1. Scope of Coverage 

a. Electric Furnaces 

b. Weatherized Oil-Fired Furnaces 

c. Fuel-Fired Heat Pumps 

2. Technology Options 

3. Screening Analysis 

a. Screened-Out Technologies 

b. Remaining Technologies 

4. Product Classes 

B. Engineering Analysis 

1. Efficiency Analysis 

a. Baseline Efficiency 

b. Intermediate Efficiency Levels 

c. Maximum Technology (‘‘Max-Tech’’) 

Efficiency Levels 

d. Summary of Efficiency Levels Analyzed 

2. Cost Analysis 

a. Teardown Analysis 

b. Cost Estimation Method 

3. Cost-Efficiency Results 

C. Markups Analysis 

D. Energy Use Analysis 

E. Life-Cycle Cost and Payback Period 

Analysis 

1. Product Cost 

2. Installation Cost 

3. Annual Energy Consumption 

4. Energy Prices 

5. Maintenance and Repair Costs 

6. Product Lifetime 

7. Discount Rates 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83427 

1All references to EPCA in this document refer 

to the statute as amended through the Energy Act 

of 2020, Public Law 116–260 (Dec. 27, 2020), which 

reflect the last statutory amendments that impact 

Parts A and A–1 of EPCA. 

2For editorial reasons, upon codification in the 

U.S. Code, Part B was redesignated Part A. 

8. Energy Efficiency Distribution in the NoNew-Standards Case 

9. Payback Period Analysis 

F. Shipments Analysis 

G. National Impact Analysis 

1. Product Efficiency Trends 

2. National Energy Savings 

3. Net Present Value Analysis 

V. Analytical Results and Conclusions 

A. Economic Impacts on Individual 

Consumers 

B. National Impact Analysis 

1. Significance of Energy Savings 

2. Net Present Value of Consumer Costs 

and Benefits 

C. Proposed Determination 

1. Technological Feasibility 

2. Cost-Effectiveness 

3. Significant Conservation of Energy 

4. Further Considerations 

5. Summary 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866, 

13563, and 14094 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act of 1995 

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 

VII. Public Participation 

A. Participation in the Public Meeting 

Webinar 

B. Submission of Comments 

C. Issues on Which DOE Seeks Comment 

VIII. Approval of the Office of the Secretary 

I. Synopsis of the Proposed 

Determination 

The Energy Policy and Conservation 

Act, Public Law 94–163, as amended 

(‘‘EPCA’’),1 among other things, 

authorizes DOE to regulate the energy 

efficiency of a number of consumer 

products and certain industrial 

equipment. (42 U.S.C. 6291–6317, as 

codified) Title III, Part B of EPCA 2

established the Energy Conservation 

Program for Consumer Products Other 

Than Automobiles. (42 U.S.C. 6291– 

6309) These products include oil, 

electric, and weatherized gas consumer 

furnaces, the subject of this NOPD. (42 

U.S.C. 6292(a)(5)) 

Pursuant to EPCA, DOE is required to 

review the existing energy conservation 

standards for covered consumer 

products, at a minimum, every six years 

after issuance of any final rule 

establishing or amending a standard (42 

U.S.C. 6295(m)(1)). DOE is conducting 

this review of the energy conservation 

standards for oil, electric, and 

weatherized gas consumer furnaces 

under EPCA’s six-year-lookback 

authority. (Id.) Pursuant to that statutory 

provision, DOE must publish either a 

notification of determination that 

standards for the product do not need to 

be amended, or a notice of proposed 

rulemaking (‘‘NOPR’’) including new 

proposed energy conservation standards 

(proceeding to a final rule, as 

appropriate). (Id.) For the reasons 

explained in the paragraphs that follow 

and elsewhere in this document, DOE 

has tentatively determined it 

appropriate to issue this NOPD for the 

consumer furnaces subject to this 

rulemaking. 

For this proposed determination, DOE 

analyzed oil, electric, and weatherized 

gas consumer furnaces subject to energy 

conservation standards specified in 10 

CFR 430.32(e)(1). 

DOE first analyzed the technological 

feasibility of more energy-efficient oil, 

electric, and weatherized gas furnaces 

and determined that amended standards 

for electric furnaces are not 

technologically feasible. For those oil 

and weatherized gas furnaces for which 

DOE determined higher standards to be 

technologically feasible, DOE evaluated 

whether higher standards would be 

cost-effective by conducting life-cycle 

cost (‘‘LCC’’) and payback period 

(‘‘PBP’’) analyses. In addition, DOE 

estimated energy savings that would 

result from potential energy 

conservation standards by conducting a 

national impacts analysis (‘‘NIA’’), in 

which it estimated the net present value 

(‘‘NPV’’) of the total costs and benefits 

experienced by consumers. 

Based on the results of the analyses, 

including the consideration of impacts 

on manufacturers and product 

availability as summarized in section V 

of this document, DOE has tentatively 

determined that current standards for 

oil, electric, and weatherized gas 

furnaces do not need to be amended. 

II. Introduction 

The following section briefly 

discusses the statutory authority 

underlying this proposed determination, 

as well as some of the historical 

background relevant to the 

establishment of energy conservation 

standards for oil, electric, and 

weatherized gas furnaces. 

A. Authority 

Among other things, EPCA, Public 

Law 94–163 (42 U.S.C. 6291–6317, as 

codified) authorizes DOE to regulate the 

energy efficiency of a number of 

consumer products and certain 

industrial equipment. Title III, Part B of 

EPCA established the Energy 

Conservation Program for Consumer 

Products Other Than Automobiles. 

These products include consumer 

furnaces, the subject of this document. 

(42 U.S.C. 6292(a)(5)) EPCA prescribed 

the initial energy conservation 

standards for these products (42 U.S.C. 

6295(f)(1)–(2)), and directs DOE to 

conduct future rulemakings to 

determine whether to amend these 

standards. (42 U.S.C. 6295(f)(4) and 42 

U.S.C. 6295(m)(1)) 

The energy conservation program 

under EPCA consists essentially of four 

parts: (1) testing, (2) labeling, (3) the 

establishment of Federal energy 

conservation standards, and (4) 

certification and enforcement 

procedures. Relevant provisions of 

EPCA specifically include definitions 

(42 U.S.C. 6291), test procedures (42 

U.S.C. 6293), labeling provisions (42 

U.S.C. 6294), energy conservation 

standards (42 U.S.C. 6295), and the 

authority to require information and 

reports from manufacturers (42 U.S.C. 

6296). 

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. 6295(o)(3)(A) and 42 

U.S.C. 6295(r)) 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 42 

U.S.C. 6295(s)) Similarly, DOE must use 

these test procedures to determine 

whether the products comply with 

standards adopted pursuant to EPCA. 

(42 U.S.C. 6295(s)) The DOE test 

procedures for consumer furnaces 

appear at title 10 of the Code of Federal 

Regulations (‘‘CFR’’) part 430, subpart B, 

appendix N. 

Federal energy conservation 

requirements for covered products 

established under EPCA generally 

supersede state laws and regulations 

concerning energy conservation testing, 

labeling, and standards. (42 U.S.C. 

6297(a)–(c)) DOE may, however, grant 

waivers of federal preemption in limited 


ddrumheller on DSK120RN23PROD with PROPOSALS2
83428 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

3This rulemaking was undertaken pursuant to the 

voluntary remand in State of New York, et al. v. 

Department of Energy, et al., 08–311–ag(L); 08–312– 

ag(con) (2d Cir. Filed Jan. 17, 2008). 

4 DOE confirmed the standards and compliance 

dates promulgated in the June 2011 DFR in a notice 

of effective date and compliance dates published in 

the Federal Register on October 31, 2011 (‘‘October 

2011 notice’’). 76 FR 67037. After publication of the 

October 2011 notice, the American Public Gas 

Association (‘‘APGA’’) sued DOE to invalidate the 

rule as it pertained to NWGFs and MHGFs. Petition 

for Review, American Public Gas Association, et al. 

v. Department of Energy, et al., No. 11–1485 (D.C. 

Cir. filed Dec. 23, 2011). On April 24, 2014, the 

Court granted a motion that approved a settlement 

agreement that was reached between DOE, APGA, 

and the various intervenors in the case, in which 

DOE agreed to a remand of the non-weatherized gas 

furnace and mobile home gas furnace portions of 

the June 2011 DFR in order to conduct further 

notice-and-comment rulemaking. Accordingly, the 

Court’s order vacated the June 2011 DFR in part 

(i.e., those portions relating to non-weatherized gas 

furnaces and mobile home gas furnaces) and 

remanded to the agency for further rulemaking. 

NWGFs and MHGFs are being addressed in a 

separate rulemaking proceeding (see Docket No. 

EERE–2014–BT–STD–0031). 

circumstances for particular state laws 

or regulations, in accordance with the 

procedures and other provisions set 

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

Pursuant to the amendments to EPCA 

contained in the Energy Independence 

and Security Act of 2007 (EISA 2007), 

Public Law 110–140, any final rule for 

new or amended energy conservation 

standards promulgated after July 1, 

2010, is required to address standby 

mode and off mode energy use. (42 

U.S.C. 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 a single 

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)) DOE’s current test 

procedures for oil, electric, and 

weatherized gas furnaces address 

standby mode and off mode energy use. 

DOE’s energy conservation standards 

address standby mode and off mode 

energy use only for non-weatherized oilfired furnaces (including mobile home 

furnaces) and electric furnaces. 10 CFR 

430.32(e)(1)(iii). In this analysis, DOE 

considers such energy use in its 

determination of whether energy 

conservation standards need to be 

amended. 

EPCA also requires that DOE must 

periodically review its already 

established energy conservation 

standards for a covered product no later 

than six years from the issuance of a 

final rule establishing or amending a 

standard for a covered product. (42 

U.S.C. 6295(m)) This six-year-lookback 

provision requires that DOE publish 

either a notice of determination that 

standards do not need to be amended or 

a NOPR, including new proposed 

standards (proceeding to a final rule, as 

appropriate). (42 U.S.C. 6295(m)(1)) 

EPCA further provides that, not later 

than 3 years after the issuance of a final 

determination not to amend standards, 

DOE must publish either a notification 

of determination that standards for the 

product do not need to be amended, or 

a NOPR including new proposed energy 

conservation standards (proceeding to a 

final rule, as appropriate). (42 U.S.C. 

6295(m)(3)(B)) DOE must make the 

analysis on which a determination is 

based publicly available and provide an 

opportunity for written comment. (42 

U.S.C. 6295(m)(2)) 

A determination that amended 

standards are not needed must be based 

on consideration of whether amended 

standards will result in significant 

conservation of energy, are 

technologically feasible, and are costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) Additionally, any 

new or amended energy conservation 

standard prescribed by the Secretary for 

any type (or class) of covered product 

shall be designed to achieve the 

maximum improvement in energy 

efficiency which the Secretary 

determines is technologically feasible 

and economically justified. (42 U.S.C. 

6295(o)(2)(A)) Among the factors DOE 

considers in evaluating whether a 

proposed standard level is economically 

justified includes whether the proposed 

standard at that level is cost-effective, as 

defined under 42 U.S.C. 

6295(o)(2)(B)(i)(II). Under 42 U.S.C. 

6295(o)(2)(B)(i)(II), an evaluation of 

cost-effectiveness requires DOE to 

consider 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 standard. 

(42 U.S.C. 6295(n)(2) and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) DOE is publishing 

this NOPD in satisfaction of the sixyear-lookback review requirement in 

EPCA. 

B. Background 

1. Current Standards 

DOE most recently completed a 

review of its consumer furnace 

standards in a direct final rule (‘‘DFR’’) 

published in the Federal Register on 

June 27, 2011 (‘‘June 2011 DFR’’), 

through which DOE amended the 

existing energy conservation standards 

for non-weatherized gas furnaces 

(‘‘NWGFs’’), mobile home gas furnaces 

(‘‘MHGFs’’), weatherized gas furnaces 

(‘‘WGFs’’), NWOF, MHOFs, and 

weatherized oil furnaces (‘‘WOFs’’).3 76 

FR 37408. The June 2011 DFR amended 

the existing energy conservation 

standards for NWGFs, MHGFs, and 

NWOFs (which are specified in terms of 

annual fuel utilization efficiency 

‘‘AFUE’’), and amended the compliance 

date (but left the existing standards in 

place) for WGFs. The June 2011 DFR 

also established electrical standby mode 

and off mode standards for NWGFs, 

MHGFs, NWOFs, MHOFs, and electric 

furnaces. As a result of a settlement 

agreement approved by the Court of 

Appeals for the D.C. Circuit, the 

standards established by the June 2011 

DFR for NWGFs and MHGFs did not go 

into effect.4 However, the court order 

left in place the standards for WGFs, 

NWOFs, MHOFs, WOFs, and electric 

furnaces, which are the subject of this 

NOPD. 

The AFUE standards currently 

applicable to all consumer furnaces, 

including the product classes for which 

DOE is conducting analyses in this 

NOPD, are set forth in DOE’s regulations 

at 10 CFR 430.32(e)(1)(ii). Table II.1 

presents the currently applicable 

standards for oil, electric, and 

weatherized gas furnaces and the date 

on which compliance with each such 

standard was required. 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83429 

5The November 2007 Final Rule adopted 

amended standards for ‘‘oil-fired furnaces’’ 

generally. However, on July 28, 2008, DOE 

published a technical amendment final rule in the 

Federal Register that clarified that the amended 

standards adopted in the November 2007 Final Rule 

for oil-fired furnaces did not apply to mobile home 

oil-fired furnaces and weatherized oil-fired 

furnaces; rather they were only applicable for nonweatherized oil-fired furnaces. 73 FR 43611, 43613 

(July 28, 2008). 

TABLE II.1—FEDERAL AFUE STANDARDS FOR OIL, ELECTRIC, AND WEATHERIZED GAS FURNACES

Product class AFUE 

(percent) Compliance date 

Non-weatherized oil-fired furnaces (not including mobile home furnaces) ................................................ 83 May 1, 2013. 

Mobile home oil-fired furnaces ................................................................................................................... 75 September 1, 1990. 

Weatherized gas furnaces .......................................................................................................................... 81 January 1, 2015. 

Weatherized oil-fired furnaces .................................................................................................................... 78 January 1, 1992. 

Electric furnaces ......................................................................................................................................... 78 January 1, 1992. 

TABLE II.2—FEDERAL STANDBY MODE AND OFF MODE STANDARDS FOR OIL AND ELECTRIC FURNACES

Product class 

Maximum 

standby mode 

electrical 

power 

consumption, 

PW,SB

(watts) 

Maximum 

off mode 

electrical 

power 

consumption, 

PW,OFF

(watts) 

Compliance 

date 

Non-weatherized oil-fired furnaces (including mobile home furnaces) ......................................... 11 11 May 1, 2013. 

Electric furnaces ............................................................................................................................. 10 10 May 1, 2013. 

2. History of Standards Rulemakings for 

Consumer Furnaces 

Amendments to EPCA in the National 

Appliance Energy Conservation Act of 

1987 (‘‘NAECA’’; Pub. L. 100–12) 

established EPCA’s original energy 

conservation standards for furnaces, 

consisting of the minimum AFUE levels 

for mobile home furnaces and for all 

other furnaces except ‘‘small’’ gas 

furnaces. (42 U.S.C. 6295(f)(1)–(2)) The 

original standards established a 

minimum AFUE of 75 percent for 

mobile home furnaces and 78 percent 

for all other furnaces. Pursuant to 

authority conferred under 42 U.S.C. 

6295(f)(1)(B), DOE subsequently 

adopted a mandatory minimum AFUE 

level for ‘‘small’’ furnaces through a 

final rule published in the Federal 

Register on November 17, 1989 (‘‘the 

November 1989 Final Rule’’). 54 FR 

47916. The standards established by 

NAECA and the November 1989 Final 

Rule for ‘‘small’’ gas furnaces are still in 

effect for MHOFs, WOFs, and EFs. 

Pursuant to EPCA, DOE was required 

to conduct two rounds of rulemaking to 

consider amended energy conservation 

standards for all consumer furnaces, and 

an additional round of rulemaking for 

mobile home furnaces. (42 U.S.C. 

6295(f)(4)(A), (B), and (C)) In 

satisfaction of the first round of 

amended standards rulemaking under 

42 U.S.C. 6295(f)(4)(B), on November 

19, 2007, DOE published in the Federal 

Register a final rule (‘‘November 2007 

Final Rule’’) that revised the standards 

for most furnaces but left them in place 

for two product classes (i.e., MHOFs and 

WOFs).5 The standards amended in the 

November 2007 Final Rule were to 

apply to furnaces manufactured or 

imported on and after November 19, 

2015. 72 FR 65136 (Nov. 19, 2007). The 

energy conservation standards in the 

November 2007 Final Rule consist of a 

minimum AFUE level for each of the six 

classes of furnaces. Id. at 72 FR 65169. 

Based on the market analysis for the 

November 2007 Final Rule and the 

standards established under that rule, 

the November 2007 Final Rule 

eliminated the distinction between 

furnaces based on their certified input 

capacity, (i.e., the standards applicable 

to ‘‘small’’ furnaces were established at 

the same level and as part of their 

appropriate class of furnace generally). 

Id. 

Following DOE’s adoption of the 

November 2007 Final Rule, several 

parties jointly sued DOE in the United 

States Court of Appeals for the Second 

Circuit (‘‘Second Circuit’’) to invalidate 

the rule. Petition for Review, State of 

New York, et al. v. Department of 

Energy, et al., Nos. 08–0311–ag(L); 08– 

0312–ag(con) (2d Cir. filed Jan. 17, 

2008). The petitioners asserted that the 

standards for furnaces promulgated in 

the November 2007 Final Rule did not 

reflect the ‘‘maximum improvement in 

energy efficiency’’ that ‘‘is 

technologically feasible and 

economically justified’’ under 42 U.S.C. 

6295(o)(2)(A). On April 16, 2009, DOE 

filed with the Court a motion for 

voluntary remand that the petitioners 

did not oppose. The motion did not 

state that the November 2007 Final Rule 

would be vacated, but it indicated that 

DOE would revisit its initial 

conclusions outlined in the November 

2007 Final Rule in a subsequent 

rulemaking action. DOE also agreed that 

the final rule in that subsequent 

rulemaking action would address both 

regional standards for furnaces and the 

effects of alternate standards on natural 

gas prices. The Second Circuit granted 

DOE’s motion on April 21, 2009. DOE 

notes that the Second Circuit’s order did 

not vacate the energy conservation 

standards set forth in the November 

2007 Final Rule, and during the remand, 

the standards went into effect as 

originally scheduled. 

On June 27, 2011, DOE published a 

direct final rule (‘‘DFR’’) in the Federal 

Register (‘‘June 2011 DFR’’) revising the 

energy conservation standards for 

residential furnaces pursuant to the 

voluntary remand in State of New York, 

et al. v. Department of Energy, et al. 76 

FR 37408. In the June 2011 DFR, DOE 

considered the amendment of the same 

six product classes considered in the 

November 2007 Final Rule analysis plus 

electric furnaces. As discussed 

previously, the June 2011 DFR amended 

the existing AFUE energy conservation 

standards for NWGFs, MHGFs, and 

NWOFs and amended the compliance 

date (but left the existing standards in 

place) for WGFs. The June 2011 DFR 

also established electrical standby mode 

and off mode energy conservation 

standards for NWGFs, MHGFs, NWOFs, 

MHOFs, and EFs. DOE confirmed the 

standards and compliance dates 

promulgated in the June 2011 DFR in a 

notice of effective date and compliance 


ddrumheller on DSK120RN23PROD with PROPOSALS2
83430 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

6For NWGFs and MHGFs, the standards were 

amended to a level of 80-percent AFUE nationally 

with a more-stringent 90-percent AFUE requirement 

in the Northern Region. For NWOF furnaces, the 

standard was amended to 83-percent AFUE 

nationally. 76 FR 37408, 37410 (June 27, 2011). 

7 DOE divides consumer furnaces into seven 

classes for the purpose of setting energy 

conservation standards: (1) NWGFs, (2) MHGFs, (3) 

WGFs, (4) NWOFs, (5) MHOFs, (6) WOFs, and (7) 

electric furnaces. 10 CFR 430.32(e)(1)(ii). As noted 

previously, DOE has been analyzing amended 

standards for NWGFs and MHGFs as part of a 

separate, ongoing rulemaking (see Docket No. 

EERE–2014–BT–STD–0031). 

dates published in the Federal Register 

on October 31, 2011 (‘‘October 2011 

Notice’’). 76 FR 67037. The November 

2007 Final Rule and the June 2011 DFR 

represented the first and the second 

rounds, respectively, of the two 

rulemakings required under 42 U.S.C. 

6295(f)(4)(B)–(C) to consider amending 

the energy conservation standards for 

consumer furnaces. 

The June 2011 DFR and October 2011 

Notice of effective date and compliance 

dates amended, in relevant part, the 

AFUE energy conservation standards 

and compliance dates for three product 

classes of consumer furnaces (i.e., 

NWGFs, MHGFs, and NWOFs).6 The 

existing AFUE standards were left in 

place for three classes of consumer 

furnaces (i.e., WOFs, MHOFs, and EFs). 

For WGFs, the existing standard was left 

in place, but the compliance date was 

amended. Electrical standby mode and 

off mode energy consumption standards 

were established for non-weatherized 

gas and oil-fired furnaces (including 

mobile home furnaces) and EFs. 

Compliance with the energy 

conservation standards promulgated in 

the June 2011 DFR was to be required 

on May 1, 2013, for non-weatherized gas 

furnaces, mobile home gas furnaces, and 

non-weatherized oil furnaces, and on 

January 1, 2015, for weatherized 

furnaces. 76 FR 37408, 37547–37548 

(June 27, 2011); 76 FR 67037, 67051 

(Oct. 31, 2011). The amended energy 

conservation standards and compliance 

dates in the June 2011 DFR superseded 

those standards and compliance dates 

promulgated by the November 2007 

Final Rule for NWGFs, MHGFs, and 

NWOFs. Similarly, the amended 

compliance date for WGFs in the June 

2011 DFR superseded the compliance 

date in the November 2007 Final Rule. 

Following DOE’s adoption of the June 

2011 DFR, the American Public Gas 

Association (‘‘APGA’’) filed a petition 

for review with the United States Court 

of Appeals for the District of Columbia 

Circuit (‘‘D.C. Circuit’’) to invalidate the 

DOE rule as it pertained to NWGFs and 

MHGFs. Petition for Review, American 

Public Gas Association, et al. v. 

Department of Energy, et al., No. 11– 

1485 (D.C. Cir. filed Dec. 23, 2011). The 

parties to the litigation engaged in 

settlement negotiations, which 

ultimately led to filing of an unopposed 

motion on March 11, 2014, seeking to 

vacate DOE’s rule in part and to remand 

to the agency for further rulemaking. 

On April 24, 2014, the Court granted 

the motion and ordered that the 

standards established for NWGFs and 

MHGFs be vacated and remanded to 

DOE for further rulemaking. As a result, 

the standards established by the June 

2011 DFR for NWGFs and MHGFs did 

not go into effect, and, thus, required 

compliance with the standards 

established in the November 2007 Final 

Rule for these products began on 

November 19, 2015. As stated 

previously, the AFUE standards for 

WOFs, MHOFs, and EFs were 

unchanged, and as such, the original 

standards for those product classes 

remain in effect. Further, the amended 

standard for NWOFs was not subject to 

the Court order and went into effect as 

specified in the June 2011 DFR. The 

AFUE standards currently applicable to 

all residential furnaces,7 including the 

five product classes for which DOE is 

analyzing amended standards in this 

NOPD, are set forth in DOE’s regulations 

at 10 CFR 430.32(e)(1)(ii) and (iii). 

On January 28, 2022, DOE published 

in the Federal Register a request for 

information (‘‘January 2022 RFI’’) to 

initiate a review to determine whether 

any new or amended standards would 

satisfy the relevant requirements of 

EPCA for a new or amended energy 

conservation standard for oil, electric, 

and weatherized gas consumer furnaces. 

87 FR 4513. On November 29, 2022, 

DOE published in the Federal Register 

a notice of availability of a preliminary 

technical support document (‘‘TSD’’) 

(‘‘the November 2022 Preliminary 

Analysis’’) that presented initial 

technical analyses in the following 

areas: (1) market and technology; (2) 

screening; (3) engineering; (4) markups 

to determine product price; (5) energy 

use; (6) life-cycle cost (‘‘LCC’’) and 

payback period (‘‘PBP’’); and (7) 

national impacts. 87 FR 73259. DOE 

held a public meeting webinar on 

December 19, 2022 in order to receive 

public input and information related to 

the November 2022 Preliminary 

Analysis for the subject furnaces. 

DOE received comments in response 

to the November 2022 Preliminary 

Analysis from the interested parties 

listed in Table II.3. 

TABLE II.3—NOVEMBER 2022 PRELIMINARY ANALYSIS PUBLIC COMMENTS

Commenter(s) Reference in this NOPD Comment No. 

in the docket Commenter type 

Air-Conditioning, Heating, & Refrigeration Institute .................. AHRI ....................................... 23 Manufacturer Trade Association. 

American Gas Association ........................................................ AGA ........................................ * 28 Utility Trade Association. 

American Gas Association, American Public Gas Association, 

National Propane Gas Association, Spire Inc., Spire Missouri Inc.

Joint Commenters ................... 24 Utilities and Utility Trade Associations. 

Appliance Standards Awareness Project, American Council 

for an Energy-Efficiency Economy, Consumer Federation of 

America, Natural Resources Defense Council.

Joint Advocates ...................... 22 Efficiency Advocacy Organizations. 

Johnson Controls International ................................................. JCI ........................................... 25 Manufacturer. 

Lennox International ................................................................. Lennox .................................... 26 Manufacturer. 

New York State Energy Research and Development Authority NYSERDA ............................... 19 State Agency. 

Northwest Energy Efficiency Alliance ....................................... NEEA ...................................... 21 Efficiency Advocacy Organization. 

* Comment No. 28 corresponds to the transcript for the webinar held on December 19, 2022. These commenters made oral comments during 

the public meeting that are summarized and discussed in this document. 


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8The parenthetical reference provides a reference 

for information located in the docket. (Docket No. 

EERE–2021–BT–STD–0031, which is maintained at 

www.regulations.gov). The references are arranged 

as follows: (commenter name, comment docket ID 

number, page of that document). 

9The preliminary technical support document is 

available at www.regulations.gov/document/EERE2021-BT-STD-0031-0011. 

10U.S. Department of Energy Compliance 

Certification Database. (Available at: 

www.regulations.doe.gov/certification-data/) (Last 

accessed Sept. 1, 2023). 

11The comment from Adams Manufacturing, Co. 

in response to the January 2022 RFI can be found 

at: www.regulations.gov/comment/EERE-2021-BTSTD-0031-0010. 

Any oral comments provided during 

the webinar that are not substantively 

the same as those presented in written 

comments are summarized and cited 

separately. throughout this NOPD. A 

parenthetical reference at the end of a 

comment quotation or paraphrase 

provides the location of the item in the 

public record.8

C. Deviation From Appendix A 

In accordance with section 3(a) of 10 

CFR part 430, subpart C, appendix A 

(‘‘appendix A’’), DOE notes that it is 

deviating from the provision in 

appendix A regarding the pre-NOPR and 

NOPR stages for an energy conservation 

standards rulemaking. 

Section 6(a)(2) of the Process Rule 

states that if DOE determines it is 

appropriate to proceed with a 

rulemaking, for the preliminary stages of 

a rulemaking to issue or amend an 

energy conservation standard, DOE will 

undertake a framework document and 

preliminary analysis, or an advance 

notice of proposed rulemaking. While 

DOE published a preliminary analysis 

for this rulemaking (see 87 FR 73529 

(Nov. 29, 2022)), DOE did not publish 

a framework document in conjunction 

with the preliminary analysis. DOE 

notes, however, that chapter 2 of the 

preliminary technical support document 

that accompanied the preliminary 

analysis—titled Analytical Framework, 

Comments from Interested Parties, and 

DOE Responses—describes the general 

analytical framework that DOE uses in 

evaluating and developing potential 

amended energy conservation 

standards.9 Further, DOE provided an 

overview of the analysis it would use to 

evaluate new or amended energy 

conservation standards in the January 

2022 RFI (see 87 FR 4513 (Jan. 28, 

2022)). As such, publication of a 

separate Framework Document would 

be largely redundant of previously 

published documents. 

III. General Discussion and Rationale 

DOE developed this proposed 

determination after a review of the 

market for the subject furnaces, 

including product listings in the DOE 

Compliance Certification Database 

(‘‘CCD’’) database.10 DOE also 

considered comments, data, and 

information from interested parties that 

represent a variety of interests. This 

NOPD addresses issues raised by these 

commenters. 

A. General Comments 

1. Comments Supporting Amended 

Standards 

In response to the November 2022 

Preliminary Analysis, several 

commenters expressed their support of 

amended energy conservation standards 

for oil, electric, and weatherized gas 

consumer furnaces. 

The Joint Advocates stated that DOE’s 

preliminary analysis demonstrates that 

condensing-level standards for NWOFs 

are technologically feasible and could 

result in significant consumer savings. 

The Joint Advocates further commented 

that fuel regulations in many northern 

States have helped to reduce the sulfur 

content in heating oil, adding that this 

results in condensing NWOFs becoming 

technologically feasible and 

commercially available. (Joint 

Advocates, No. 22 at p. 1) The Joint 

Advocates pointed out that Adams 

Manufacturing commented on the 

January 2022 RFI in support of a 95- 

percent AFUE standard for NWOFs.11

(Joint Advocates, No. 22 at p. 2) 

NYSERDA stated support for DOE 

increasing the furnace standards, 

particularly for oil furnaces and for 

standby and off modes. NYSERDA 

argued that there are cost-effective and 

beneficial energy and associated 

greenhouse gas savings available 

through improvements to electric, 

weatherized gas, and particularly oil 

furnaces. (NYSERDA, No. 19 at p. 1) 

As part of the rulemaking process, 

DOE carefully considers the benefits 

and burdens of amended energy 

conservation standards to determine 

whether such standards are the 

maximum standard levels that are 

technologically feasible and 

economically justified and would 

conserve a significant amount of energy, 

as required by EPCA (see 42 U.S.C. 

6295(o)(2)–(3)). Section IV of this 

document outlines DOE’s approach to 

analyzing various potential amended 

energy conservation standard levels, 

and section V of this document provides 

the results of those analyses, as well as 

a detailed explanation of DOE’s 

weighing of the benefits and burdens. 

Based upon its analysis and 

consideration of the relevant statutory 

criteria, DOE is proposing not to amend 

the existing standards for oil, electric, 

and weatherized gas furnaces at this 

time. The rationale for DOE’s proposed 

determination is discussed in detail in 

section V of this document. 

2. Comments Opposing Amended 

Standards 

In response to the November 2022 

Preliminary Analysis, several 

commenters expressed opposition to 

amended energy conservation standards 

for oil, electric, and weatherized gas 

consumer furnaces. 

The Joint Commenters stated that they 

are guided by the congressional 

mandate that appliance efficiency 

standards should not impose unjustified 

costs on consumers or deprive 

consumers of gas products that are 

suitable for their needs. The Joint 

Commenters stated that such standards 

are not authorized by statute and would 

be harmful to fuel gas providers and the 

consumers they serve. (Joint 

Commenters, No. 24 at p. 2) AHRI 

commented that DOE should adopt a 

no-new-standards determination for 

mobile home oil-fired and nonweatherized oil-fired furnaces, given the 

burden placed on manufacturers to meet 

more-stringent standards that will 

provide insubstantial energy savings. 

(AHRI, No. 23 at pp. 3–4) 

AHRI also commented that DOE 

should adopt a no-new-standards 

determination for weatherized gas-fired 

furnaces. The commenter argued that 

DOE should adopt the same 

determination for consumer 

weatherized gas furnaces as was done 

for commercial warm air furnaces, given 

that they are technologically similar. 

AHRI and Lennox commented that a 

move to an AFUE greater than 90 

percent for weatherized gas furnaces is 

unjustified, adding that EL 1 showed a 

9.1-year payback period and 45.8 

percent of consumers experiencing a net 

cost. (AHRI, No. 23 at p. 3; Lennox, No. 

26 at p. 2) 

Lennox urged DOE to consider the 

cumulative regulatory burden of all 

ongoing rulemakings on furnace 

manufacturers. (Lennox, No. 26 at p. 9) 

The commenter also stated that 

weatherized gas, non-weatherized oil, 

and electric furnaces are niche products 

and total less than 10 percent of the 

consumer furnace market. More 

specifically, Lennox stated that 

weatherized gas furnaces comprise 

approximately 7 percent of the market, 

and non-weatherized oil and electric 

furnaces each account for less than 1 

percent of the market. (Lennox, No. 26 

at p. 1) Lennox acknowledged that 


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technologies exist that could advance 

the efficiency of gas and oil furnaces 

included in the preliminary TSD. 

However, Lennox stated that consumer 

cost and utility issues render morestringent standards unjustified for the 

subject oil and gas furnaces. In 

particular, for weatherized gas products, 

Lennox recommended that DOE find 

that a no-new-standards determination 

is warranted for these product 

categories. (Id. at p. 6) 

Lennox stated that the market 

adoption of condensing weatherized 

furnaces has been minimal. Lennox 

estimated that condensing weatherized 

furnaces are at less than 0.12 percent of 

the weatherized gas market and that 

there is no indication of growth in the 

market. Therefore, Lennox surmised 

that condensing efficiency levels would 

not be appropriate for DOE to consider 

as a basis for a national efficiency 

standard for weatherized gas furnaces 

and that DOE should not seek to 

mandate WGF condensing technology. 

(Lennox, No. 26 at p. 7) 

Lennox stated that many consumers 

have been adversely impacted by the 

ongoing COVID pandemic and high 

inflation, particularly consumers who 

might already be struggling to afford 

new furnace equipment. Accordingly, 

Lennox argued that DOE increasing 

furnace equipment costs with new 

efficiency standards is not economically 

justified at this juncture. (Lennox, No. 

26 at p. 2) 

In response, as discussed in section 

II.A of this document, DOE must 

periodically review its already 

established energy conservation 

standards for consumer furnaces no 

later than six years from the issuance of 

a final rule establishing or amending a 

standard for consumer furnaces. This 

six-year-lookback provision requires 

that DOE publish either a determination 

that standards do not need to be 

amended or a NOPR, including new 

proposed standards (proceeding to a 

final rule, as appropriate). (42 U.S.C. 

6295(m)(1)) As part of the rulemaking 

process, DOE carefully considers the 

benefits and burdens of amended 

standards to determine whether the 

amended standards are the maximum 

standard levels that are technologically 

feasible and economically justified and 

would conserve a significant amount of 

energy, as required by EPCA (see 42 

U.S.C. 6295(o)(2)–(3)). Section IV of this 

document outlines DOE’s approach to 

analyzing various potential amended 

standard levels, and section V of this 

document provides the results of those 

analyses. Section V also provides a 

detailed explanation of DOE’s weighing 

of the benefits and burdens and the 

rationale for proposing not to amend 

standards for oil, electric, and 

weatherized gas furnaces at this time. 

Regarding DOE’s consideration of 

cumulative regulatory burden, DOE is 

not proposing to amend the energy 

conservation standards for oil, electric, 

and weatherized gas furnaces, so, 

therefore, the Department does not 

expect this rulemaking to contribute to 

the cumulative regulatory burden of 

manufactures. 

3. Standby Mode and Off Mode 

As discussed in section II.A of this 

document, EPCA requires any final rule 

for new or amended energy 

conservation standards promulgated 

after July 1, 2010 to address standby 

mode and off mode energy use. (42 

U.S.C. 6295(gg)(3)) 

‘‘Standby mode’’ and ‘‘off mode’’ 

energy use are defined in the DOE test 

procedure for residential furnaces and 

boilers (i.e., ‘‘Uniform Test Method for 

Measuring the Energy Consumption of 

Consumer Furnaces Other Than 

Boilers,’’ 10 CFR part 430, subpart B, 

appendix N; ‘‘appendix N’’). In that test 

procedure, DOE defines ‘‘standby 

mode’’ as any mode in which the 

furnace is connected to a mains power 

source and offers one or more of the 

following space heating functions that 

may persist: (a) To facilitate the 

activation of other modes (including 

activation or deactivation of active 

mode) by remote switch (including 

thermostat or remote control), internal 

or external sensors, and/or timer; and 

(b) Continuous functions, including 

information or status displays or sensor 

based functions. 10 CFR part 430, 

subpart B, appendix N, section 2. ‘‘Off 

mode’’ for consumer furnaces is defined 

as a mode in which the furnace is 

connected to a mains power source and 

is not providing any active mode or 

standby mode function, and where the 

mode may persist for an indefinite time. 

The existence of an off switch in off 

position (a disconnected circuit) is 

included within the classification of off 

mode. 10 CFR part 430, subpart B, 

appendix N, section 2. An ‘‘off switch’’ 

is defined as the switch on the furnace 

that, when activated, results in a 

measurable change in energy 

consumption between the standby and 

off modes. 10 CFR part 430, subpart B, 

appendix N, section 2. Currently, the 

standby mode and off mode energy 

conservation standards for NWOFs and 

EFs are outlined in 10 CFR 430.32 

(e)(1)(iii) and are shown in Table II.2 of 

this document. Compliance with the 

Federal standards for standby mode and 

off mode electricity consumption for 

NWOFs, MHOFs, and EFs, as measured 

by standby power consumption in watts 

(‘‘PW,SB’’) and off mode power 

consumption in watts (‘‘PW,OFF’’), was 

required on May 1, 2013. 

In the November 2022 Preliminary 

Analysis, DOE analyzed amended 

standby/off mode standards for NWOFs, 

MHOFs and EFs. DOE did not consider 

amended standby mode and off mode 

standards for WGFs and WOFs, because 

DOE has previously concluded in a 

direct final rule published in the 

Federal Register on June 27, 2011 that 

these products are packaged with either 

an air conditioner or heat pump and 

that the standards for those products, 

specified in terms of power 

consumption in watts and Seasonal 

Energy Efficiency Ratio (‘‘SEER’’), 

already account for the standby mode 

and off mode energy consumption for 

these classes of furnaces. 76 FR 37408, 

37433. Based on market analysis 

conducted for the November 2022 

Preliminary Analysis, DOE tentatively 

concludes that WGFs and WOFs 

continue to be packaged with an air 

conditioner or heat pump. 

In the analysis for the November 2022 

Preliminary Analysis, DOE established 

the baseline for NWOFs, MHOFs, and 

EFs as the current Federal standby mode 

and off mode standards (see Table II.2). 

DOE also defined and identified 

baseline components as those that 

consumed the most electricity during 

standby mode and off mode operation. 

For intermediate efficiency levels, DOE 

utilized a design-option approach to 

identify design options that could be 

applied to the baseline design to reduce 

standby mode and off mode energy 

consumption. Above the baseline 

efficiency level, DOE implemented 

design options in the order of 

incremental energy savings relative to 

baseline until all available design 

options were employed (i.e., at a maxtech level). DOE identified two design 

options between the baseline and maxtech design that were used as the basis 

for intermediate standby mode and off 

mode design options. Specifically, DOE 

replaced the linear transformer found in 

models at the baseline with a low-loss 

transformer (‘‘LL–LTX’’) for the first 

intermediate efficiency level and 

replaced the linear power supply found 

in baseline models with a switching 

mode power supply (‘‘SMPS’’) for the 

second intermediate efficiency level. 

The max-tech standby mode and off 

mode efficiency level in the November 

2022 Preliminary Analysis was based on 

a combination of the two design options 

that were analyzed for the intermediate 

efficiency levels. To reach max-tech, 

DOE analyzed using an LL–LTX in 

combination with an SMPS to reach the 


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minimum standby mode or off mode 

power consumption (without 

eliminating other consumer- or 

performance-related electronic features). 

For this design option, a transformer is 

only needed to step down the voltage 

for the thermostat because the SMPS is 

able to step down the voltage for the 

other components of the furnace. As 

such, a smaller, lower-cost LL–LTX is 

used at the max-tech level, as compared 

to the LL–LTX used at EL 1 (i.e., the first 

intermediate efficiency level). 

In response to the November 2022 

Preliminary Analysis, Lennox 

commented that it is not aware of new 

or improved technology options 

regarding standby mode and off mode 

energy use beyond those previously 

identified that significantly impact the 

range of efficiencies for the product 

covered in this rulemaking. (Lennox, 

No. 26 at p. 4) However, Lennox also 

pointed out that consumers, utilities, 

third-party aggregators, and regulators 

through programs such as EPA ENERGY 

STAR are looking to further deploy 

features that enable installation 

verification, ongoing monitoring, 

diagnostics, and prognostic features that 

can save significantly more energy than 

de minimis standby power limits 

achieve. (Id.) 

AHRI and Lennox stated that the 

following functions and components 

utilize the furnace’s power supply in the 

on, standby, and off modes: indoor and 

outdoor air conditioner (‘‘AC’’)/heat 

pump (‘‘HP’’) Motors (‘‘ECM’’); AC/HP 

outdoor control board; heat pump 

defrost control; indoor and outdoor 

electronic expansion valve; heat pump 

reversing valve; zoning systems; UV 

germicidal light; humidifier; 

communicating controls that aid in 

proper commissioning, system 

performance monitoring and reporting, 

identification of faults, and consumer 

interface; temperature sensors; air 

pressure sensors; refrigerant pressure 

sensors; gas pressure sensors; and 

proprietary diagnostic-prognostic 

sensors. (AHRI, No. 23, at p. 2; Lennox, 

No. 26 at p. 5) Lennox further added 

that thermostats utilize the furnace’s 

power supply in the on, standby, and off 

modes. (Lennox, No. 26 at p. 5) AHRI 

added that integrated furnace controls, 

gas valves, and combustion air inducers 

utilize the furnace power in on, standby, 

and off modes. (AHRI, No. 23, at p. 2) 

AHRI and Lennox commented that 

additional safety-related sensors are 

being considered for furnaces that could 

further render more-stringent standby 

power limits impractical, including 

refrigerant leak detection mitigation 

sensors and CO sensors. (Lennox, No. 26 

at p. 5; AHRI, No. 23, at p. 2) Lennox 

also added CO2 sensors to the list of 

potential future diagnostic features and 

stated that this list is likely to grow over 

time. (Lennox, No. 26 at p. 5) 

Lennox commented that increased 

stringency in standards for standby 

power levels would inhibit other 

innovations that save energy and benefit 

consumers. Lennox further stated that 

increased stringency would also inhibit 

implementation of additional safety 

features. (Lennox, No. 26 at p. 2) In 

addition, Lennox stated that the energy 

savings for standby mode and off mode 

standards for all of the products 

considered in this rulemaking do not 

meet the DOE criteria of significant 

energy savings. (Id.) AHRI commented 

that DOE should consider the standby 

mode and off mode requirements of 

higher technology features when 

evaluating the standby mode and off 

mode efficiency levels. (AHRI, No. 23 at 

p. 3) AHRI and Lennox commented that 

overly stringent standby mode and off 

mode standards would inhibit the 

integration of smart communicating 

controls, installation and diagnostic 

features, and zoning that can enable 

much larger energy savings than the 

minor savings achieved by the standby 

power limit itself. Lennox stated that 

these advanced features have entered 

the market for fully featured 

communicating products and require 

more standby mode and off mode 

energy than the baseline products. 

(Lennox, No. 26 at p. 4; AHRI, No. 23 

at p. 3) 

Lennox and AHRI agreed that standby 

mode and off mode power consumption 

for WGFs that are part of a singlepackage air conditioner or heat pump 

are captured in the PW,OFF and SEER 

metrics for these products. (Lennox, No. 

26 at p. 3; AHRI, No. 23 at p. 4) Lennox 

stated that the current DOE metrics 

capture the standby energy regardless of 

the mode of operation. (Lennox, No. 26 

at p. 3) Lennox commented that it is not 

aware of seasonal differences in standby 

mode and off mode energy 

consumption. Further, Lennox 

commented that a condensing standard 

for WGF may force additional factory- or 

field-installed components to prevent 

freezing (i.e., heat tape or other) of the 

condensate system, which may increase 

standby energy consumption in heating 

mode. (Lennox, No. 26 at p. 3) 

AHRI commented that an 8.5 W 

maximum standard for standby mode 

and off mode power does not allow for 

the addition of the aforementioned 

communication, diagnostic, and safety 

features. (AHRI, No. 23 at p. 2) AHRI 

recommended that DOE re-evaluate the 

necessary power draw for 

communication and safety-related 

features and the max-tech level based 

upon the use of a 20 VA LL–LTX 

transformer and SMPS to meet these 

utilities. (Id. at p. 3) AHRI commented 

that a 20 VA transformer cannot supply 

the needs of all interconnected controls 

for all types of systems. AHRI added 

that if the transformer cannot power the 

necessary internal functions, then DOE 

must reconsider the proposed 8.5-watt 

standby power limit and whether the 

11-watt baseline is sufficient. AHRI 

further commented that if DOE must go 

higher than 11 watts, DOE may need to 

make allowance in future test 

procedures so that the effects of safety 

and other control measures do not count 

against the proposed 11-watt limit. (Id.) 

AHRI commented that an incorrectly 

set minimum standard will drive 

connected products such as thermostats, 

WIFI controls, etc. to use add-on power 

supplies and cause an additional 

economic burden on consumers, 

asserting that this would defeat the 

purpose of the proposed maximum 

watts limit. AHRI commented that there 

are already auxiliary power supplies on 

the market for thermostats and other 

devices. (Id. at p. 3) 

NYSERDA commented that the 

technology options for standby mode 

that rely on switching mode power 

supply with a low-loss linear 

transformer have been considered by 

DOE for several years and are 

anticipated to be transferable across 

furnace types, including the oil and 

electric furnaces addressed in this 

rulemaking. NYSERDA explained that 

as switch-mode power supply and lowloss linear transformers become the 

standard for much of the furnace 

market, it becomes more feasible for 

those technologies to apply to oil and 

electric furnaces as well. (NYSERDA, 

No. 19 at p. 2) 

NYSERDA recommended that DOE 

propose the max-tech levels for standby 

mode and off mode at the NOPR stage. 

NYSERDA explained that, as this 

rulemaking is finalized, the broader 

furnace manufacturing industry is 

anticipated to evolve toward technology 

for standby mode that relies on 

switching mode power supply with a 

low-loss linear transformer. (NYSERDA, 

No. 19 at p. 2) 

After considering this feedback, DOE 

understands that typical and baseline 

levels of power consumption of 

consumer furnaces in standby mode or 

off mode are likely to increase in the 

future as manufacturers continue to 

build increasingly complex controls into 

consumer furnaces, and that many of 

the likely changes are related to features 

such as safety sensors or to other 

improvements in functionality that 


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83434 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

12On March 13, 2023, DOE published in the 

Federal Register a test procedure final rule for 

consumer boilers, which are a type of furnace under 

EPCA (see 42 U.S.C. 6291(23)) but are not included 

within the scope of this rulemaking (see section 

IV.A.1 of this document). 88 FR 15510. This test 

procedure final rule separated the test method for 

consumer boilers from the test method for other 

types of furnaces and moved the boilers test method 

to a new appendix EE to 10 CFR part 430, subpart 

B. Accordingly, it amended appendix N so as to 

remove provisions applicable only to boilers, but it 

did not materially change the test method for the 

oil, electric, and weatherized gas furnaces that are 

the subject of this rulemaking. 

would provide utility for the consumer. 

Based on these comments, DOE has 

found that there is some degree of 

uncertainty that exists with respect to 

the appropriateness of the standby 

mode/off mode efficiency levels 

analyzed in the November 2022 

Preliminary Analysis—particularly for 

products that are in development but 

also possibly in some products already 

on the market. There is also uncertainty 

related to the potential impacts that 

standby mode and off mode power 

consumption standards could have on 

overall system energy consumption and 

consumer utility. Consequently, DOE 

has determined that it lacks the 

necessary information to amend the 

standby mode and off mode standards at 

this time. Particularly, since some of the 

functionalities at issue could have 

significant safety or energy-savings 

benefits, DOE does not wish to stymie 

such developments through wellintentioned but ultimately 

counterproductive standby mode/off 

mode standards. Instead, DOE needs to 

have a better understanding of the 

legitimate power consumption needs of 

the subject furnaces when operating in 

standby mode and off mode. Although 

DOE remains cognizant of the relevant 

requirements of 42 U.S.C. 6295(gg)(3), 

DOE has concluded that it does not 

currently have the requisite evidence to 

support amended standby mode and off 

mode standards under the applicable 

statutory criteria in EPCA. Therefore, 

DOE is not proposing to amend the 

standby mode/off mode power 

standards for NWOFs, MHOFs, and EFs 

this time, but instead, DOE will 

continue to investigate these issues and 

may consider such standards in a future 

rulemaking. 

B. Scope of Coverage and Product 

Classes 

This proposed determination covers 

certain product classes of consumer 

furnaces (i.e., ones for oil, electric, and 

weatherized gas furnaces). A consumer 

‘‘furnace’’ is defined as a product which 

utilizes only single-phase electric 

current, or single-phase electric current 

or DC current in conjunction with 

natural gas, propane, or home heating 

oil, and which— 

(A) Is designed to be the principal 

heating source for the living space of a 

residence; 

(B) Is not contained within the same 

cabinet with a central air conditioner 

whose rated cooling capacity is above 

65,000 Btu per hour; 

(C) Is an electric central furnace, 

electric boiler, forced-air central 

furnace, gravity central furnace, or lowpressure steam or hot water boiler; and 

(D) Has a heat input rate of less than 

300,000 Btu per hour for electric boilers 

and low-pressure steam or hot water 

boilers and less than 225,000 Btu per 

hour for forced-air central furnaces, 

gravity central furnaces, and electric 

central furnaces. 

10 CFR 430.2. The scope of coverage is 

discussed in further detail in section 

IV.A.1 of this document. 

When evaluating and establishing/ 

amending 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 

justify differing standards. In making a 

determination whether a performancerelated feature justifies a different 

standard, DOE must consider such 

factors as the utility of the feature to the 

consumer and other factors DOE 

determines are appropriate. (42 U.S.C. 

6295(q)) The product classes for this 

proposed determination are discussed 

in further detail in section IV.A.4 of this 

document. 

C. Test Procedure 

EPCA sets forth generally applicable 

criteria and procedures for DOE’s 

adoption and amendment of test 

procedures. (42 U.S.C. 6293) 

Manufacturers of covered products must 

use these test procedures to quantify the 

efficiency of their product and as the 

basis for certifying to DOE that their 

product complies with energy 

conservation standards and when 

making representations to the public 

regarding the energy use or efficiency of 

the product. (42 U.S.C. 6295(s) and 42 

U.S.C. 6293(c)) Similarly, DOE must use 

these test procedures to determine 

whether the product complies with 

standards adopted pursuant to EPCA. 

(42 U.S.C. 6295(s)) DOE’s current energy 

conservation standards for consumer 

furnaces are expressed in terms of AFUE 

for all furnace product classes (i.e., 

active mode) and, for NWOFs, MHOFs, 

and electric furnace product classes, 

also in terms of PW,SB and PW,OFF (i.e., 

standby mode and off mode). (See 10 

CFR 430.32(e)(1)) 

The test procedure for determining 

AFUE, PW,SB, and PW,OFF is established 

at 10 CFR part 430, subpart B, appendix 

N. AFUE is an annualized fuel 

efficiency metric that accounts for fossil 

fuel consumption in active, standby, 

and off modes. PW,SB and PW,OFF are 

measurements of the standby mode and 

off mode electrical power consumption, 

respectively, in watts. The test 

procedure for consumer furnaces was 

last amended by a final rule published 

in the Federal Register on January 15, 

2016 (‘‘January 2016 TP Final Rule’’). 81 

FR 2628.12

The revisions to the consumer 

furnaces test procedure in the January 

2016 TP Final Rule included: 

• Clarification of the electrical power 

term ‘‘PE’’; 

• Adoption of a smoke stick test for 

determining use of minimum default 

draft factors; 

• Allowance for the measurement of 

condensate under steady-state 

conditions; 

• Reference to manufacturer’s 

installation and operation manual and 

clarifications for when that manual does 

not specify test set-up; 

• Specification of duct-work 

requirements for units that are installed 

without a return duct; 

• Specification of testing 

requirements for units with multiposition configurations; and 

• Revision of the requirements 

regarding AFUE reporting precision. 

81 FR 2628, 2629–2630 (Jan. 15, 2016). 

The changes in the January 2016 TP 

Final Rule were mandatory for 

representations of furnace efficiency 

made on or after July 13, 2016. As such, 

the most current version of the test 

procedure (published in January 2016) 

has now been in place for several years. 

D. Technological Feasibility 

1. General 

In evaluating potential amendments 

to energy conservation standards, 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 determination. 

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 


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13The FFC metric is discussed in DOE’s 

statement of policy and notice of policy 

amendment. 76 FR 51281 (August 18, 2011), as 

amended at 77 FR 49701 (August 17, 2012). 

14The numeric threshold for determining the 

significance of energy savings established in a final 

rule published in the Federal Register on February 

14, 2020 (85 FR 8626, 8670–8672) was subsequently 

rescinded through a final rule published in the 

Federal Register on December 13, 2021 (86 FR 

70892, 70901–70906). 

technologically feasible. 10 CFR part 

430, subpart C, appendix A, sections 

6(b)(3)(i) and 7(b)(1). 

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, and service; (2) 

adverse impacts on product utility or 

availability; (3) adverse impacts on 

health or safety; and (4) unique-pathway 

proprietary technologies. 10 CFR part 

430, subpart C, appendix A, sections 

6(b)(3)(ii)–(v) and 7(b)(2)–(5). Section 

IV.A.3 of this document discusses the 

results of the screening analysis for oil, 

electric, and weatherized gas furnaces, 

particularly the design options DOE 

considered, those it screened out, and 

those that are the basis for the potential 

standards considered in this proposed 

determination. 

2. Maximum Technologically Feasible 

Levels 

As when DOE proposes to adopt a 

new or amended standard for a type or 

class of covered product, in this NOPD 

analysis, DOE must determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for the product under 

consideration. (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 

oil, electric, and weatherized gas 

furnaces, using the design parameters 

for the most efficient products available 

on the market or in working prototypes. 

The max-tech levels that DOE 

determined for this analysis are 

described in section IV.B.1.c of this 

proposed determination. 

E. Cost-Effectiveness 

In making a determination of whether 

amended energy conservation standards 

are needed, EPCA requires DOE to 

consider the cost-effectiveness of 

amended standards in the context of the 

savings in operating costs throughout 

the estimated average life of the covered 

product compared to any increase in the 

price of, or in the initial charges for, or 

maintenance expenses of, the covered 

product that are likely to result from a 

standard. (42 U.S.C. 6295(m)(1)(A); 42 

U.S.C. 6295(n)(2)(C); 42 U.S.C. 

6295(o)(2)(B)(i)(II)) 

In determining cost-effectiveness of 

potential amended standards for oil, 

electric, and weatherized gas furnaces, 

DOE conducted LCC and PBP analyses 

that estimate the costs and benefits to 

users from those potential standards. To 

further inform DOE’s consideration of 

the cost-effectiveness of potential 

amended standards, DOE considered the 

NPV of total costs and benefits 

estimated as part of the NIA. The inputs 

for determining the NPV of the total 

costs and benefits experienced by 

consumers are: (1) total annual installed 

cost, (2) total annual operating costs 

(energy costs and repair and 

maintenance costs), and (3) a discount 

factor to calculate the present value of 

costs and savings. The results of this 

analysis are discussed in section V.C.2 

of this NOPD. 

F. Energy Savings 

1. Determination of Savings 

For each efficiency level (‘‘EL’’) 

evaluated, DOE projected anticipated 

energy savings from application of the 

EL to the oil, electric, and weatherized 

gas furnace purchased in the 30-year 

period that begins in the assumed year 

of compliance with the potential 

standards (2030–2059). The savings are 

measured over the entire lifetime of the 

oil, electric, and weatherized gas 

furnaces purchased in the previous 30- 

year period. DOE quantified the energy 

savings attributable to each EL as the 

difference in energy consumption 

between each standards case and the nonew-standards case. The no-newstandards case represents a projection of 

energy consumption that reflects how 

the market for a product would likely 

evolve in the absence of amended 

energy conservation standards. DOE 

used its NIA spreadsheet model to 

estimate national energy savings 

(‘‘NES’’) from potential amended or new 

standards for oil, electric, and 

weatherized gas furnaces. The NIA 

spreadsheet model (described in section 

IV.G of this document) calculates energy 

savings in terms of site energy, which is 

the energy directly consumed by 

products at the locations where they are 

used. For electricity, DOE reports NES 

in terms of primary energy savings, 

which is the savings in the energy that 

is used to generate and transmit the site 

electricity. DOE also calculates NES in 

terms of full-fuel-cycle (‘‘FFC’’) energy 

savings. The FFC metric includes the 

energy consumed in extracting, 

processing, and transporting primary 

fuels (i.e., coal, natural gas, petroleum 

fuels), and, thus, presents a more 

complete picture of the impacts of 

energy conservation standards.13 DOE’s 

approach is based on the calculation of 

an FFC multiplier for each of the energy 

types used by covered products or 

equipment. For more information on 

FFC energy savings, see section IV.G of 

this document. 

2. Significance of Savings 

In determining whether amended 

standards are needed, DOE must 

consider whether such standards will 

result in significant conservation of 

energy. (42 U.S.C. 6295(m)(1)(A)) The 

significance of energy savings offered by 

a new or amended energy conservation 

standard cannot be determined without 

knowledge of the specific circumstances 

surrounding a given rulemaking.14 For 

example, some covered products and 

equipment have most of their energy 

consumption occur during periods of 

peak energy demand. The impacts of 

these products on the energy 

infrastructure can be more pronounced 

than products with relatively constant 

demand. Accordingly, DOE evaluates 

the significance of energy savings on a 

case-by-case basis. The significance of 

energy savings is further discussed in 

section V.B.1 of this NOPD. 

G. Additional Considerations 

Pursuant to EPCA, absent DOE 

publishing a notification of 

determination that energy conservation 

standards for the subject furnaces do not 

need to be amended, DOE must issue a 

NOPR that includes new proposed 

standards. (42 U.S.C. 6295(m)(1)(B)) The 

new proposed standards in any such 

NOPR must be based on the criteria 

established under 42 U.S.C. 6295(o) and 

follow the procedures established under 

42 U.S.C. 6295(p). (42 U.S.C. 

6295(m)(1)(B)) The criteria in 42 U.S.C. 

6295(o) require that standards be 

designed to achieve the maximum 

improvement in energy efficiency, 

which the Secretary determines is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A)) In deciding whether a 

proposed 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 by considering, to the 

greatest extent practicable, the following 

seven statutory factors: 

(1) The economic impact of the 

standard on manufacturers and 


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15See Docket No. EERE–2014–BT–STD–0031 

which can be accessed at www.regulations.gov. 

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 for, or maintenance 

expenses of the covered products that 

are likely to result from the standard; 

(3) The total projected amount of 

energy (or as applicable, water) savings 

likely to result directly from the 

standard; 

(4) Any lessening of the utility or the 

performance of the covered products 

likely to result from 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 standard; 

(6) The need for national energy and 

water conservation; and 

(7) Other factors the Secretary 

considers relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) 

IV. Methodology and Discussion of 

Related Comments 

This section addresses the analyses 

DOE has performed for this proposed 

determination with regard to oil, 

electric, and weatherized gas furnaces. 

Separate subsections address each 

component of DOE’s analyses. DOE 

used several analytical tools to estimate 

the impact of potential energy 

conservation standards. The first tool is 

a spreadsheet that calculates the LCC 

savings and PBP of potential energy 

conservation standards. The NIA uses a 

second spreadsheet set that provides 

shipments projections and calculates 

NES and net present value of total 

consumer costs and savings expected to 

result from potential energy 

conservation standards. These 

spreadsheet tools are available on the 

website: www.regulations.gov/docket/ 

EERE-2021-BT-STD-0031. 

The Joint Commenters stressed the 

importance of implementing the 

recommendations of the recent National 

Academies of Sciences, Engineering, 

and Medicine (‘‘NAS’’) report into all 

appliance rulemakings. Specifically, the 

Joint Commenters highlighted three 

recommendations from the report that 

they argued should be implemented in 

rulemakings impacting WGFs: (1) DOE 

should pay greater attention to the 

justification for the standards, adding 

that DOE should attempt to find 

significant failures of private markets or 

irrational behavior by consumers in the 

no-new-standards case to conclude that 

the standards are economically justified; 

(2) DOE should place greater emphasis 

on providing an argument for the 

plausibility and magnitude of any 

market failure related to the energy 

efficiency gap in DOE’s analysis; and (3) 

DOE should give greater attention to a 

broader set of potential market failures 

on the supply side, further commenting 

that this would include not just how 

standards might reduce the number of 

competing firms but also how they 

might impact price discrimination, 

technological diffusion, and collusion. 

The Joint Commenters suggested DOE 

should address these recommendations 

before analyzing whether new efficiency 

standards are warranted. (Joint 

Commenters, No. 24 at pp. 2–3) 

In response, DOE is addressing the 

recommendations of the NAS report in 

a separate rulemaking in parallel with 

other ongoing rulemakings, including 

this oil, electric, and weatherized gas 

furnace NOPD. As discussed in section 

V.C of this document, DOE is tentatively 

proposing that standards do not need to 

be amended, and the Department has 

made this tentative determination 

consistent with EPCA’s requirements, 

including evaluation of economic 

justification of standards, and 

applicable Executive orders. 

A. Market and Technology Assessment 

DOE develops information in the 

market and technology assessment that 

provides an overall picture of the 

market for the products concerned, 

including the purpose of the products, 

the industry structure, manufacturers, 

market characteristics, and technologies 

used in the products. This activity 

includes both quantitative and 

qualitative assessments, based primarily 

on publicly-available information. The 

subjects addressed in the market and 

technology assessment for this proposed 

determination include: (1) a 

determination of the scope and product 

classes, (2) manufacturers and industry 

structure, (3) existing efficiency 

programs, (4) shipments information, (5) 

market and industry trends, and (6) 

technologies or design options that 

could improve the energy efficiency of 

consumer furnaces. The key findings of 

DOE’s market assessment are 

summarized in the following sections. 

1. Scope of Coverage 

In this analysis, DOE relied on the 

definition of a furnace in 10 CFR 430.2, 

which defines a consumer ‘‘furnace’’ as 

a product which utilizes only singlephase electric current, or single-phase 

electric current or DC current in 

conjunction with natural gas, propane, 

or home heating oil, and which— 

(A) Is designed to be the principal 

heating source for the living space of a 

residence; 

(B) Is not contained within the same 

cabinet with a central air conditioner 

whose rated cooling capacity is above 

65,000 Btu per hour; 

(C) Is an electric central furnace, 

electric boiler, forced-air central 

furnace, gravity central furnace, or lowpressure steam or hot water boiler; and 

(D) Has a heat input rate of less than 

300,000 Btu per hour for electric boilers 

and low-pressure steam or hot water 

boilers and less than 225,000 Btu per 

hour for forced-air central furnaces, 

gravity central furnaces, and electric 

central furnaces. 

Any product meeting the definition of 

a ‘‘furnace’’ is included in DOE’s scope 

of coverage. In the analysis for this 

NOPD, DOE focused only on oil, 

electric, and weatherized gas furnaces. 

Non-weatherized gas furnaces and 

mobile home gas furnaces are 

considered in a separate rulemaking.15

a. Electric Furnaces 

A basic electric furnace comprises an 

electric resistance heating element and 

blower assembly. (Additionally, there 

are products that include electricallypowered heat pumps, but these are 

separately covered products not 

addressed here.) The electric resistance 

heating elements of electric furnaces are 

highly efficient, and the efficiency of 

these units already approaches 100 

percent. DOE is unaware of any 

technology options that can improve the 

efficiency of electric furnaces, so DOE 

has tentatively determined that morestringent standards for electric furnaces 

would not be technologically feasible. 

Therefore, DOE anticipates that the 

energy savings potential from amended 

standards for EFs would be minimal. 

Consequently, DOE did not consider 

amended AFUE standards for electric 

furnaces in the current analysis. 

b. Weatherized Oil-Fired Furnaces 

DOE is not aware of any WOFs on the 

market, and, therefore, DOE did not 

analyze amended standards for that 

product class. DOE has tentatively 

determined that because there are no 

WOFs on the market, there would be no 

potential energy savings from amended 

standards. 

c. Fuel-Fired Heat Pumps 

NEEA commented that DOE should 

consider fuel-fired heat pumps within 

the broader WGF product category by 

updating the definition of ‘‘central 

forced-air furnace’’ in the Code of 

Federal Regulations. (NEEA, No. 21 at p. 

1) NEEA argued that fuel-fired heat 


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16The case study, titled ‘‘Pre-Commercial ScaleUp of a Gas-Fired Absorption Heat Pump’’ is 

available at www.osti.gov/biblio/1726247 (Last 

accessed June 14, 2023). 

17The Purdue report, titled ‘‘Pathways to 

Decarbonization of Residential Heating,’’ is 

available at docs.lib.purdue.edu/ihpbc/354/ (Last 

accessed June 14, 2023). 

18For this NOPD, DOE will not publish a 

Technical Support Document (TSD) because no 

amended standard is proposed. The methodology 

for the analyses conducted for the NOPD is largely 

the same as in the Preliminary Analysis, and, thus, 

DOE references the Preliminary Analysis TSD 

throughout this document. 

19 JCI’s comments stated that WGFs are 7 percent 

of the WGF market, but DOE interprets this 

comment to mean that WGFs are 7 percent of the 

overall furnace market. 

pumps with a heat input rate of less 

than 225,000 Btu per hour meet all the 

criteria in the EPCA definition for a 

residential ‘‘furnace’’ with the exception 

that the terms, ‘‘electric central furnace, 

electric boiler, forced-air central 

furnace, gravity central furnace, or lowpressure steam or hot water boiler’’ do 

not currently cover fuel-fired heat 

pumps. NEEA commented that DOE has 

the authority to change those definitions 

and stated that redefining ‘‘forced-air 

central furnace’’ would allow fuel-fired 

heat pumps to be regulated under the 

energy conservation standards for oil, 

electric, and weatherized gas consumer 

furnaces. (Id. at p. 2) Specifically, NEEA 

suggested that DOE should change the 

definition of ‘‘forced air central furnace’’ 

to a gas or oil burning furnace designed 

to supply heat through a system of ducts 

with air as the heating medium. The 

combustion of gas or oil generates heat 

that is either transferred to the air 

within a casing by conduction through 

heat exchange surfaces or utilized to run 

a refrigeration cycle that transfers heat 

to the air and is circulated through the 

duct system by means of a fan or 

blower. NEEA commented that this 

definition covers the two main fuel-fired 

heat pump technologies: fuel-fired 

absorption heat pumps and enginedriven heat pumps. (Id.) NEEA also 

commented that weatherized fuel-fired 

heat pumps should be considered as 

another technology option within the 

WGF product category. NEEA requested 

that DOE consider all possible 

technology options for gas-fired 

furnaces to be on an even playing field. 

(Id. at p. 3) 

NEEA argued that fuel-fired heat 

pumps are designed to replace existing 

furnaces and boilers without the need to 

update existing infrastructure and to 

provide flexibility for decarbonized 

fuels. However, NEEA stated that fuelfired heat pumps are not direct 

replacements for heat pumps, since the 

primary fuel sources are different. 

(NEEA, No. 21 at p. 3) NEEA 

commented that a 2020 case study 16 of 

a pre-commercial residential fuel-fired 

heat pump prepared for DOE showed 

that the system can achieve over 140- 

percent AFUE, and field demonstrations 

show 36–43 percent fuel savings 

compared to a condensing furnace and 

46–50 percent fuel savings compared to 

a non-condensing furnace. (Id.) NEEA 

further commented that the 2020 case 

study showed that there is significant 

potential in the residential market for a 

reasonably priced, gas-fired absorption 

heat pump product. (Id.) 

NEEA encouraged DOE to consider 

the building energy simulation and 

comparison to field-derived results for 

fuel-fired heat pumps, published by 

Purdue University in 2021.17 NEEA 

commented that this report 

demonstrates that fuel-fired heat pumps 

provided the lowest operating cost and 

highest carbon emissions savings 

compared to furnaces, boilers, electric 

heat pumps, and various water heating 

options. NEEA commented that fuelfired heat pumps provide the same 

primary heating function as 

conventional fuel-to-air furnaces with 

the potential for significant energy 

savings. (Id.) 

In response to the comments by 

NEEA, DOE notes that fuel-fired heat 

pumps do not meet the current 

definition of ‘‘furnace,’’ as they do not 

meet criteria (C) in the definition 

outlined in section IV.A of this 

document. As such, they were not 

considered in the scope of this analysis. 

Further, the current test procedure for 

consumer furnaces, as outlined in 

appendix N, does not include 

provisions for testing fuel-fired heat 

pumps. Therefore, DOE is not 

considering amending the consumer 

‘‘furnace’’ definition to include these 

products at this time. However, DOE 

will continue to investigate fuel-fired 

heat pumps and may evaluate test 

procedure provisions for related to fuelfired heat pumps in a future rulemaking. 

2. Technology Options 

DOE has identified the following 

components as technology options that 

have the potential to improve the AFUE 

rating of oil and weatherized gas 

furnaces: 

• Condensing secondary heat exchanger 

• Heat exchanger improvements 

Æ Increased heat exchanger surface 

area 

Æ Heat exchanger surface features 

Æ Heat exchanger baffles and 

turbulators 

• Two-stage and modulating 

combustion 

• Pulse combustion 

• Premix burners 

• Burner derating 

• Insulation improvements 

Æ Increased jacket insulations 

Æ Advanced forms of insulation 

• Off-cycle dampers 

Æ Electromechanical flue damper 

Æ Electromechanical burner inlet 

damper 

• Direct venting 

• Concentric venting 

• Low-pressure, air-atomized oil burner 

• High-static oil burner 

• Delayed-action oil pump solendoid 

valve 

These technology options are 

described in more detail of chapter 3 of 

the November 2022 Preliminary 

Analysis TSD.18 As discussed in section 

IV.A.1.a of this document, DOE did not 

identify any technology options that 

would improve the AFUE of electric 

furnaces. 

In response to the November 2022 

Preliminary Analysis, AHRI, Lennox, 

and JCI commented that WGF accounts 

for a relatively small share of the overall 

furnace market (∼7 percent). (AHRI, No. 

23 at p. 5; Lennox, No. 26 at p. 1; JCI, 

No. 25 at p. 2) 19 AHRI and JCI stated 

that the maximum feasible AFUE for 

WGF is 81 percent. (AHRI, No. 23 at p. 

5; JCI, No. 25 at p. 2) 

JCI commented that further 

improvements in systems efficiency of 

WGFs would require the product class 

use of condensing technology. JCI 

commented that this change in the 

product offering is not practical and, 

based on observed market share, not 

justified due to system design and 

application constraints. (JCI, No. 25 at p. 

2) JCI argued that the practical 

application of condensing WGFs creates 

condensation in the heat exchangers 

within the unit, which is not readily 

drained. JCI added that the retained 

condensate will freeze in the off cycle, 

preventing further operation of the 

furnace. (Id.) 

Lennox stated that applicable furnace 

technology has not significantly 

improved to overcome barriers to 

deploying higher-efficiency 

noncondensing and condensing 

technologies that would justify morestringent AFUE standards for WGFs. 

(Lennox, No. 26 at p. 4) 

In response to comments regarding 

condensing WGFs, DOE notes that it has 

identified WGFs available on the market 

that use condensing technology to 

achieve AFUE ratings up to 95 percent. 

Because these types of products are 

available on the market, DOE finds them 

to be technologically feasible and 


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considers condensing secondary heat 

exchangers to be an appropriate 

technology option to analyze for these 

products. Additionally, in response to 

JCI, when evaluating the cost of 

implementing technologies such as 

condensing heat exchangers, DOE aims 

to include the additional costs of other 

components that may be associated with 

installing a unit with such technology, 

such as a condensate pump and drain 

hoses. The analyses of these costs are 

discussed in subsequent sections of this 

document (e.g., the LCC and PBP 

analyses and the NIA (see sections IV.E 

and IV.G of this document, 

respectively)). 

During the public meeting webinar, 

AGA requested clarification on how 

vent dampers were applied in the 

analysis for weatherized gas furnaces 

and noted that the test procedure would 

not give credit for a vent damper on an 

outdoor weatherized gas furnace. (AGA, 

Public Meeting Transcript, No. 28 at pp. 

20–22) In response, dampers were not 

considered for WGFs and are not part of 

the design pathway for improving AFUE 

for those products. (See section IV.B.1.d 

of this document for the efficiency 

levels and associated technology 

options for WGFs.) DOE notes that 

Tables ES.3.2, ES.3.3, ES.3.19, and 7.4.1 

in the November 2022 Preliminary 

Analysis TSD indicated that vent 

dampers were included for NWOFs and 

MHOFs; however, this was a 

typographical error. DOE clarifies that 

vent dampers also were not part of the 

design pathway considered for 

improving AFUE of NWOFs and 

MHOFs for the preliminary analysis 

(nor are they for this NOPD analysis). 

In chapter 3 of the November 2022 

Preliminary Analysis TSD, DOE also 

considered three technology options 

that could potentially reduce the 

standby mode and off mode energy 

consumption of NWOFs, MHOFs, and 

EFs. However, for the reasons explained 

in section III.A.3 of this document, DOE 

has tentatively determined that it cannot 

establish standby mode and off mode 

standards that meet the criteria of EPCA 

at this time, so such technologies and 

standards are not considered further. 

3. Screening Analysis 

DOE uses the following five screening 

criteria to determine which technology 

options are suitable for further 

consideration in an energy conservation 

standards rulemaking: 

(1) Technological feasibility. 

Technologies that are not incorporated 

in commercial products or in 

commercially-viable, existing 

prototypes will not be considered 

further. 

(2) Practicability to manufacture, 

install, and service. If it is determined 

that mass production of a technology in 

commercial products and reliable 

installation and servicing of the 

technology could not be achieved on the 

scale necessary to serve the relevant 

market at the time of the projected 

compliance date of the standard, then 

that technology will not be considered 

further. 

(3) Impacts on product utility. If a 

technology is determined to have a 

significant adverse impact on the utility 

of the product to subgroups of 

consumers, or 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 be considered 

further. 

(4) Safety of technologies. If it is 

determined that a technology would 

have significant adverse impacts on 

health or safety, it will not be 

considered further. 

(5) Unique-pathway proprietary 

technologies. If a technology has 

proprietary protection and represents a 

unique pathway to achieving a given 

efficiency level, it will not be 

considered further, due to the potential 

for monopolistic concerns. 

10 CFR part 430, subpart C, appendix A, 

sections 6(b)(3) and 7(b). 

In summary, if DOE determines that a 

technology, or a combination of 

technologies, fails to meet one or more 

of the listed five criteria, it will be 

excluded from further consideration in 

the engineering analysis. 

a. Screened-Out Technologies 

DOE eliminated the technologies 

listed in Table IV.1 from further 

consideration as options to improve the 

AFUE (as measured by the DOE test 

procedure) of NWOFs, MHOFs, and 

WGFs. The reasons for exclusion 

associated with each technology are 

marked with an X. Additional details 

about the reasons for exclusion are 

discussed in this section. 

TABLE IV.1—SCREENED-OUT TECHNOLOGIES

Excluded technology 

options 

Applicable product 

class(es) 

Reasons for exclusion 

Technological 

feasibility 

Practicability 

to 

manufacture, 

install, and 

service 

Adverse 

impacts on 

product utility 

Adverse 

impacts on 

health or 

safety 

Uniquepathway 

proprietary 

technology 

Pulse combustion ................ WGF ................................... ........................ ........................ ........................ X ........................

Burner derating ................... WGF, NWOF, MHOF ......... ........................ ........................ X ........................ ........................

Low-pressure, air-atomized 

oil burner.

NWOF, MHOF .................... X ........................ ........................ ........................ ........................

Pulse Combustion 

Pulse combustion burners operate on 

self-sustaining resonating pressure 

waves that alternately rarefy the 

combustion chamber (drawing a fresh 

fuel–air mixture into the chamber) and 

pressurize it (causing ignition by 

compression heating of the mixture to 

its flash point). Pulse combustion 

systems are capable of direct venting 

without the assistance of mechanical 

draft. Because the pulse combustion 

process is very efficient, pulse 

combustion is generally used in 

condensing appliances. 

In contrast to natural draft and 

induced draft furnaces, pulse 

combustion furnaces generate positive 

pressure in the heat exchanger. 

Although these products are generally 

safe, this could create a potential safety 

problem if the heat exchanger breeches, 

because combustion products can 

contaminate the circulation air stream. 

Pulse combustion gas furnaces were 

available in the United States for more 

than two decades. However, they were 

withdrawn from the market within the 

past 20 years because manufacturers 

found that competing technologies, such 

as condensing secondary heat 

exchangers, cost significantly less to 


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20See Docket No. EERE–2014–BT–STD–0031. 

manufacture and operate. In light of the 

ability of furnace manufacturers to costeffectively achieve high efficiencies 

without the use of pulse combustion, 

the technology’s risks do not outweigh 

its benefits for consumer furnace 

applications. Accordingly, DOE did not 

further analyze this technology option 

as part of this NOPD. 

Burner Derating 

Decreasing the burner size to increase 

the ratio of heat transfer area to fuel 

input, or burner derating, can increase 

the AFUE rating of furnaces. However, 

because heat output rate is directly 

related to burner size, derating also 

reduces the amount of heated air 

available to the consumer. This 

reduction in heat output adversely 

affects the utility to consumers. 

Therefore, DOE did not consider this 

technology option. 

Low-Pressure, Air-Atomized Oil Burner 

To overcome the low input 

limitations of conventional oil burners, 

Brookhaven National Laboratory 

developed a low-pressure, air-atomized 

oil burner that can operate at firing rates 

as low as 0.25 gallons of oil per hour (10 

kW). In addition, it can operate with 

low levels of excess combustion air (less 

than 10 percent) for lean-burning, ultraclean combustion. A lower level of 

excess air generally improves AFUE 

rating. This burner design is also 

capable of firing fuel at a high or low 

input rate, which is manually actuated 

by a switch, allowing the burner to 

closely match the smaller heating loads 

of well-insulated modern homes. 

While tests performed at the 

Brookhaven National Laboratory seem 

to have successfully demonstrated 

enhanced oil boiler AFUE performance 

per the DOE test procedure for furnaces 

and boilers, the prototype was never 

tested on a furnace. Therefore, the 

technological feasibility of the burner 

prototype for incorporation into a 

residential oil-fired furnace remains 

unknown, so DOE does not consider 

low-pressure, air-atomized oil burners 

to be a viable technology for efficiency 

improvement at this time. 

b. Remaining Technologies 

After reviewing each technology, DOE 

did not screen out the following 

technology options and considers them 

as design options in the engineering 

analysis: 

• Condensing secondary heat exchanger 

• Heat exchanger improvements 

Æ Increased heat exchanger surface 

area 

Æ Heat exchanger surface features 

Æ Heat exchanger baffles and 

turbulators 

• Two-stage and modulating 

combustion 

• Premix burners 

• Insulation improvements 

Æ Increased jacket insulations 

Æ Advanced forms of insulation 

• Off-cycle dampers 

Æ Electromechanical flue damper 

Æ Electromechanical burner inlet 

damper 

• Direct venting 

• Concentric venting 

• High-static oil burner 

• Delayed-action oil pump solendoid 

valve 

DOE determined that these 

technology options are technologically 

feasible because they are being used or 

have previously been used in 

commercially-available products or 

working prototypes. DOE also finds that 

all of the remaining technology options 

meet the other screening criteria (i.e., 

practicable to manufacture/install/ 

service, do not result in adverse impacts 

on consumer utility, product 

availability, health, or safety, and do not 

utilize unique-pathway proprietary 

technologies). 

In response to the November 2022 

Preliminary Analysis, Lennox 

commented that DOE has adequately 

captured most of the technology options 

and screened appropriately for gas and 

oil products. (Lennox, No. 26 at p. 4) 

However, Lennox stated that the 

alternatives for insulation improvement 

generally have not been demonstrated in 

furnace applications and may not be 

suitable for use in high-temperature 

applications near combustion surfaces. 

The commenter stated that insulation 

used in furnace applications must meet 

temperature, flame spread, and smoke 

requirements per the applicable safety 

standards, and that toxicity and offgassing must also be considered. Lennox 

argued that just because an insulation 

material has better insulating 

characteristics does not mean that it is 

suitable for high-temperature furnace 

applications. (Lennox, No. 26 at p. 6) 

In response, DOE notes that insulation 

improvements may be achieved with 

thicker layers of existing insulation 

materials as opposed to necessarily 

requiring new insulating materials. 

Therefore, DOE is not screening out 

insulation improvements in this NOPD. 

Additionally, as outlined in section 

IV.B.1 of this document, insulation 

improvements are not required to meet 

any of the efficiency levels analyzed in 

this NOPD. 

4. Product Classes 

In general, when evaluating and 

establishing energy conservation 

standards for a type (or class) of covered 

product, DOE divides the covered 

product into classes by: (1) the type of 

energy used; (2) the capacity of the 

product, or (3) any other performancerelated feature which other products 

within such type (or class) do not have 

that affects energy efficiency and 

justifies different standard levels, 

considering factors such as consumer 

utility and any other factors the 

Secretary deems appropriate. (42 U.S.C. 

6295(q)) 

In this case, DOE divides furnaces 

into seven product classes based on fuel 

type (gas, oil, or electric), whether the 

furnace is weatherized or not, and 

whether the furnace is designed for use 

only in mobile homes or not. The 

current product classes for furnaces are 

(1) non-weatherized gas furnaces, (2) 

mobile home gas furnaces, (3) nonweatherized oil-fired furnaces, (4) 

mobile home oil-fired furnaces, (5) 

weatherized gas furnaces, (6) 

weatherized oil-fired furnaces, and (7) 

electric furnaces. 10 CFR 

430.32(e)(1)(ii). As noted previously, 

non-weatherized gas furnaces and 

mobile home gas furnaces are being 

addressed in a separate rulemaking 

process.20 Therefore, the product classes 

that DOE considered for this NOPD are 

NWOFs, MHOFs, WGFs, WOFs, and 

EFs. However, for the reasons discussed 

in sections IV.A.1.a and IV.A.1.b of this 

document, potential amended energy 

conservation standards were not 

analyzed for EFs or WOFs. 

In summary, DOE assessed potential 

amended energy conservation standards 

in terms of AFUE for the NWOF, MHOF, 

and WGF product classes in this NOPD. 

Again, for the reasons discussed in 

section III.A.3 of this document, DOE 

did not analyze new or amended 

standby mode/off mode power 

standards for any product classes this 

time. 

B. Engineering Analysis 

The purpose of the engineering 

analysis is to establish the relationship 

between the efficiency and cost of 

NWOFs, MHOFs, and WGFs. There are 

two elements to consider in the 

engineering analysis: (1) the selection of 

efficiency levels to analyze (i.e., the 

‘‘efficiency analysis’’) and (2) the 

determination of product cost at each 

efficiency level (i.e., the ‘‘cost 

analysis’’). In determining the 

performance of higher-efficiency 

products, DOE considers technologies 

and design option combinations not 

eliminated by the screening analysis. 

For each product class, DOE estimates 


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the baseline cost, as well as the 

incremental cost for the product at 

efficiency levels above the baseline 

efficiency. The output of the 

engineering analysis is a set of costefficiency ‘‘curves’’ that are used in 

downstream analyses (i.e., the LCC and 

PBP analyses and the NIA). 

1. Efficiency Analysis 

DOE typically uses one of two 

approaches to develop energy efficiency 

levels for the engineering analysis: (1) 

relying on observed efficiency levels in 

the market (i.e., the efficiency-level 

approach), or (2) determining the 

incremental efficiency improvements 

associated with incorporating specific 

design options to a baseline model (i.e., 

the design-option approach). Using the 

efficiency-level approach, the efficiency 

levels established for the analysis are 

determined based on the market 

distribution of existing products (in 

other words, based on the range of 

efficiencies and efficiency level 

‘‘clusters’’ that already exist on the 

market). Using the design option 

approach, the efficiency levels 

established for the analysis are 

determined through detailed 

engineering calculations and/or 

computer simulations of the efficiency 

improvements from implementing 

specific design options that have been 

identified in the technology assessment. 

DOE may also rely on a combination of 

these two approaches. For example, the 

efficiency-level approach (based on 

actual products on the market) may be 

extended using the design option 

approach to interpolate to define ‘‘gap 

fill’’ levels (i.e., to bridge large gaps 

between other identified efficiency 

levels) and/or to extrapolate to the 

‘‘max-tech’’ level (particularly in cases 

where the ‘‘max-tech’’ level exceeds the 

maximum efficiency level currently 

available on the market). 

For the current analysis, DOE 

generally employed an efficiency-level 

approach. 

a. Baseline Efficiency 

For each product class, DOE generally 

selects a baseline model as a reference 

point for each class, and measures 

anticipated changes to the product 

resulting from potential energy 

conservation standards against the 

baseline model. The baseline model in 

each product class represents the 

characteristics of a product typical of 

that class (e.g., capacity, physical size). 

Generally, a baseline model is one that 

just meets current energy conservation 

standards, or, if no standards are in 

place, the baseline is typically the most 

common or least-efficient unit on the 

market. 

A basic consumer gas furnace 

comprises a hot surface or direct spark 

ignition system, tubular in-shot burners, 

noncondensing heat exchanger, blower 

assembly (including motor and forwardswept fan blade), mechanical draft 

combustion fan assembly, and 

automatic controls. A basic consumer 

oil-fired furnace comprises an 

interrupted spark ignition system, 

power burner, noncondensing heat 

exchanger, and blower assembly. Details 

and descriptions of each of these 

components can be found in chapter 3 

of the November 2022 Preliminary 

Analysis TSD. 

The identification of baseline units 

requires establishing the baseline 

efficiency level. In cases where there is 

an existing standard, DOE typically 

defines baseline units as units with 

efficiencies equal to the current Federal 

energy conservation standards. 

However, for MHOFs, DOE did not 

identify any currently available units at 

the minimum standard level (75-percent 

AFUE), and, therefore, DOE analyzed 

80-percent AFUE as the baseline level 

for MHOFs, as it was the lowest 

efficiency available on the market. The 

baseline AFUE levels analyzed for the 

subject NWOFs, MHOFs, and WGFs, as 

measured by AFUE, along with the 

typical characteristics of a baseline unit, 

are shown in Table IV.2. 

TABLE IV.2—BASELINE AFUE LEVELS ANALYZED

Product class 

Baseline 

AFUE level 

(%) 

Typical characteristics 

NWOF ....................................................... 83 —Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel heat exchanger. 

—Indoor blower fan including PSC motor * and forward-curved blower impeller 

blade. 

MHOF ....................................................... 80 —Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel heat exchanger. 

—Indoor blower fan including PSC motor * and forward-curved blower impeller 

blade. 

—Direct venting system. 

—Built-in evaporator coil cabinet. 

WGF .......................................................... 81 —Draft inducer. 

—Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel tubular heat exchanger. 

—Indoor blower fan including BPM * motor and forward-curved blower impeller 

blade. 

* Residential furnace fans incorporated into NWOFs, MHOFs, and WGFs manufactured on and after July 3, 2019 must meet fan energy rating 

(‘‘FER’’) standards specified in 10 CFR 430.32(y). The blower fan motor (among other factors) can affect FER. Brushless permanent magnet 

(‘‘BPM’’) motors have become the predominant motor type at the baseline AFUE levels for WGFs, and permanent split capacitor (‘‘PSC’’) motors, 

which are less efficient than BPM motors, are common for NWOFs and MHOFs. 

Typically, baseline units are 

representative of the minimum 

technology and lowest-cost product that 

manufacturers can produce. 

Accordingly, in the teardown analysis, 

DOE examined a variety of baseline 

units that incorporate the various 

baseline design options for furnace 

components. 

b. Intermediate Efficiency Levels 

DOE also analyzed intermediate 

efficiency levels for NWOFs and 

MHOFs. However, for WGFs, DOE has 


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21AHRI’s Directory of Certified Product 

Performance (Available at: www.ahridirectory.org/ 

Search/SearchHome) (Last accessed Sept. 1, 2023). 

22California Energy Commission’s MAEDbs 

(Available at: cacertappliances.energy.ca.gov/ 

Pages/ApplianceSearch.aspx) (Last accessed Sept. 

1, 2023). 

not found any models on the market 

between the baseline (81-percent AFUE) 

and max-tech level (95-percent AFUE) 

and has, therefore, not analyzed any 

intermediate efficiency levels for this 

product class. The intermediate 

efficiency levels analyzed for NWOFs 

are 85-percent and 87-percent AFUE, 

and the intermediate efficiency levels 

analyzed for MHOFs are 83-percent and 

85-percent AFUE. To improve efficiency 

from the baseline to these intermediate 

efficiency levels, manufacturers 

generally increase the surface area of the 

heat exchanger, which increases the 

heat transfer area and, thus, allows 

manufacturers to achieve higher 

efficiencies. The intermediate efficiency 

levels analyzed are representative of 

common efficiency levels available on 

the market. DOE reviewed its own 

Compliance Certification Database 

(‘‘CCD’’), as well as AHRI’s product 

certification directories,21 California 

Energy Commission’s (‘‘CEC’s’’) 

database,22 manufacturer catalogs, and 

other publicly-available literature to 

inform its selection of intermediate 

efficiency levels. 

In response to the November 2022 

Preliminary Analysis, NYSERDA 

encouraged DOE to consider an 

additional efficiency level (EL) between 

87-percent and 96-percent AFUE for oilfired furnaces. NYSERDA stated it 

anticipates that an AFUE above 90 

percent may maximize savings for 

consumers. NYSERDA added that based 

on its review of the preliminary TSD 

material, the DOE Compliance 

Certification Management System, and 

AHRI’s database, NYSERDA has seen 

availability of oil furnaces above DOE’s 

proposed EL 2. (NYSERDA, No. 19 at p. 

2) 

The Joint Advocates similarly 

encouraged DOE to evaluate an 

intermediate condensing EL for NWOFs. 

The Joint Advocates commented that 

they strongly support DOE’s decision to 

include a max-tech EL at 96-percent 

AFUE and that DOE should also 

consider an EL between EL 2 (i.e., 87- 

percent AFUE) and EL 3 (i.e., 96-percent 

AFUE). The Joint Advocates further 

commented that the CCD shows 

condensing models suggesting that an 

intermediate EL with condensing 

technology is feasible for condensing 

NWOFs. (Joint Advocates, No. 22 at pp. 

2–3) 

As discussed previously, DOE’s 

choice of intermediate efficiency levels 

was informed by publicly-available 

databases and manufacturer literature, 

and the chosen efficiency levels were 

intended to be representative of 

common efficiency levels available on 

the market. In contrast, as discussed in 

section III.D.2 of this document, DOE is 

statutorily obligated to analyze the 

efficiency level that corresponds to the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for each product class. (42 

U.S.C. 6295(p)(1)) However, because 

there are very few condensing-level 

NWOFs on the market, efficiency levels 

between 87-percent and 96-percent 

AFUE would not be representative of 

typical efficiency levels. Therefore, DOE 

is not analyzing an EL between 87- 

percent and 96-percent AFUE for 

NWOFs in this NOPD. 

c. Maximum Technology (‘‘Max-Tech’’) 

Efficiency Levels 

As part of DOE’s analysis, the 

maximum available efficiency level is 

the highest efficiency unit currently 

available on the market. DOE also 

defines a ‘‘max-tech’’ efficiency level to 

represent the maximum possible 

efficiency for a given product. 

DOE conducted an analysis of the 

market and a technology assessment and 

researched current product offerings to 

determine the max-tech efficiency 

levels. The max-tech level identified in 

each product class corresponds to the 

highest-AFUE furnace available on the 

market, which DOE tentatively 

concludes corresponds to the maximum 

technologically feasible levels at this 

time. For NWOFs, DOE identified a 

design that achieves a max-tech 

efficiency level of 96-percent AFUE. For 

MHOFs, the maximum efficiency level 

that DOE identified was 87-percent 

AFUE. For WGFs, DOE identified a 

max-tech efficiency level design that 

achieves 95-percent AFUE. For WGFs 

and NWOFs, the max-tech efficiency 

level is currently achieved by use of a 

condensing secondary heat exchanger. 

A constant-airflow BPM indoor blower 

motor was also implemented as the 

motor design option for the max-tech 

efficiency level for NWOFs because the 

only NWOF model on the market 

available at this level includes a 

constant-airflow BPM motor, and it is 

unclear if this level is achievable 

without a constant-airflow fan. For 

MHOFs, the max-tech efficiency level is 

currently achieved by use of a heat 

exchanger with increased surface area. 

Lennox stated that the DOE 

weatherized gas furnace standard of 81- 

percent AFUE is at the maximum 

practical level that is economically 

justified and provides reliable 

performance. (Lennox, No. 26 at p. 6) 

Lennox stated that, as the AFUE of 

weatherized gas furnace products is 

increased, heat exchanger and flue 

temperatures are reduced, which 

increases the risk of condensing 

operation and corrosion to the heat 

exchanger. (Id.) Lennox stated that 

while condensing weatherized gas 

furnaces are feasible, they require 

secondary heat exchangers that increase 

static pressure in the airstream and 

pressure drop within the heat 

exchanger. Further, Lennox stated that 

the additional resistance must be 

overcome with increased electrical 

power at all operating conditions, 

including cooling and ventilation mode. 

(Id. at pp. 6–7) Lennox stated that the 

measures to prevent freezing of 

condensate in weatherized gas furnaces 

and condensate disposal add cost and 

consume additional energy. (Id. at p. 7) 

Lennox commented that these methods 

include maintaining the temperature of 

the condensate system above freezing by 

either conditioning the condensate 

system using electric heat tape or 

routing the condensate disposal system 

through conditioned space. The 

commenter stated that the use of heat 

tape consumes additional energy. 

Lennox stated that routing the 

condensate disposal system through 

conditioned space is not technically 

feasible or economically viable for a 

weatherized product that is contained 

outdoors. (Id.) Lennox further 

commented that another method to 

prevent freezing in weatherized gas 

furnaces is to install a pit or trench 

condensate drainage system that 

extends below the frostline and also 

neutralizes the acidic condensate 

created during combustion. Lennox 

stated that the frost line in the United 

States varies greatly by region from 5′′ in 

Georgia to 80′′ in Minnesota. Lennox 

stated that the method of installing a pit 

or trench condensate drainage system 

that extends below the frostline and 

neutralizes the acidic condensate 

created during condensing combustion 

may work in some mild climates at a 

reasonable cost but would be expensive 

to install and maintain in colder 

climates. (Id.) 

In response, the Department notes the 

fact that condensing weatherized gas 

furnaces currently exist on the market 

demonstrates that they are 

technologically feasible. DOE accounts 

for costs that may be associated with the 

installation of condensing systems, 

including additional costs of heat tape 


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and/or a condensate pump suitable to 

meet the need of an unconditioned 

space, which is discussed further in 

section IV.E of this document. The 

financial feasibility of higher efficiency 

levels is discussed further in section V 

of this document. 

JCI commented it is unaware of any 

condensing MHOFs commercially 

available today. (JCI, No. 25 at p. 2) 

AHRI also commented that it is unaware 

of any commercially-available 

condensing MHOFs. (AHRI, No. 23 at p. 

5) AHRI commented that the feasibility 

of moving to a condensing heat 

exchanger for MHOFs is low. AHRI 

added that there are challenges with 

maintaining airflow options and 

footprint size to allow for an easy 

replacement. (Id.) 

In response, DOE agrees that there are 

currently no condensing MHOFs on the 

market, and the Department has not 

considered an efficiency level for 

MHOFs that requires a condensing heat 

exchanger as there are no data to 

indicate that it would be feasible for use 

in MHOFs. 

d. Summary of Efficiency Levels 

Analyzed 

DOE presents AFUE efficiency levels 

analyzed along with the technologies 

that are expected to be used to increase 

energy efficiency above the baseline 

efficiency level for NWOFs, MHOFs, 

and WGFs in Table IV.3, Table IV.4 and 

Table IV.5, respectively. 

TABLE IV.3—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

NWOFS

Efficiency level AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 83 See Table IV.2 for baseline features. 

1 ................................................................ 85 Baseline EL + Increased heat exchanger area. 

2 ................................................................ 87 EL 1 + Increased heat exchanger area. 

3—Max-tech .............................................. 96 EL 2 + Addition of condensing secondary heat exchanger (and associated components, sensors, etc.) + Constant-airflow BPM motor. 

TABLE IV.4—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

MHOFS

Efficiency level AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 80 See Table IV.2 for baseline features. 

1 ................................................................ 83 Baseline EL + Increased heat exchanger area. 

2 ................................................................ 85 EL 1 + Increased heat exchanger area. 

3—Max-tech .............................................. 87 EL 2 + Increased heat exchanger area. 

TABLE IV.5—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

WGFS

EL AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 81 See Table IV.2 for baseline features. 

1—Max-tech .............................................. 95 Baseline EL + Addition of condensing secondary heat exchanger (and associated 

components, sensors, etc.). 

2. Cost Analysis 

The cost analysis portion of the 

Engineering Analysis is conducted 

using one or a combination of cost 

approaches. The selection of cost 

approach depends on a suite of factors, 

including the availability and reliability 

of public information, characteristics of 

the regulated product, and the 

availability and timeliness of 

purchasing the product on the market. 

The cost approaches are summarized as 

follows: 

b Physical teardowns: Under this 

approach, DOE physically dismantles a 

commercially-available product, 

component-by-component, to develop a 

detailed bill of materials for the product. 

b Catalog teardowns: In lieu of 

physically deconstructing a product, 

DOE identifies each component using 

parts diagrams (available from 

manufacturer websites or appliance 

repair websites, for example) to develop 

the bill of materials for the product. 

b Price surveys: If neither a physical 

nor catalog teardown is feasible (e.g., for 

tightly integrated products such as 

fluorescent lamps, which are infeasible 

to disassemble and for which parts 

diagrams are unavailable), costprohibitive, or otherwise impractical 

(e.g., large commercial boilers), DOE 

conducts price surveys using publiclyavailable pricing data published on 

major online retailer websites and/or by 

soliciting prices from distributors and 

other commercial channels. 

In the present case, DOE conducted 

the analysis using a combination of 

physical and catalog teardowns. DOE 

estimated the manufacturer production 

cost (‘‘MPC’’) associated with each 

efficiency level to characterize the costefficiency relationship of improving 

consumer furnace performance, in terms 

of AFUE. 

The units selected for the teardown 

analysis spanned a range of 

manufacturers and efficiencies for 

commercially-available products that 

are the subject of this rulemaking. 

Products were selected that have 

characteristics of typical products on 

the market at a representative input 

capacity. WGFs selected for physical 

teardown generally had input capacities 

of approximately 80 thousand British 

thermal units per hour (‘‘kBtu/h’’), 

while oil units selected for physical 

teardown generally had input capacities 

of approximately 105 kBtu/h. These 

capacities were determined to be a 


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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83443 

23For more information on MEPS Intl, please 

visit: www.meps.co.uk/ (Last accessed Sept. 5, 

2023). 

24For more information on PolymerUpdate, 

please visit: www.polymerupdate.com (Last 

accessed Sept. 5, 2023). 

25For more information on the USGS metal price 

statistics, please visit www.usgs.gov/centers/nmic/ 

commodity-statistics-and-information (Last 

accessed Sept. 5, 2023). 

26For more information on the BLS producer 

price indices, please visit: www.bls.gov/ppi/ (Last 

accessed Sept. 5, 2023). 

representative input capacity for WGFs 

and for NWOFs and MHOFs, 

respectively, based on information 

gathered as part of the market and 

technology assessment (see section IV.A 

of this document), as well as 

discussions with manufacturers. Where 

needed, catalog teardowns were also 

conducted to supplement the physical 

teardowns. DOE estimated the 

manufacturing cost for each furnace 

selected for teardown by disassembling 

the furnace and developing a bill of 

materials (‘‘BOM’’). The resulting BOM 

provides the basis for the MPC estimates 

for products at various efficiency levels 

spanning the full range of efficiencies 

from the baseline to max-tech. 

To account for manufacturers’ nonproduction costs and profit margin, DOE 

applies a non-production cost multiplier 

(the manufacturer markup) to the MPC. 

The resulting manufacturer selling price 

(‘‘MSP’’) is the price at which the 

manufacturer distributes a unit into 

commerce. 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 heating, 

ventilation, and air conditioning 

(‘‘HVAC’’) manufacturing whose 

combined product range includes oil 

and weatherized gas furnaces. The 

manufacturer markup estimates are 

consistent with the manufacturer 

markups developed for a final rule for 

furnace fan energy conservation 

standards published in the Federal 

Register on July 3, 2014. 79 FR 38130. 

Specifically, DOE estimates the industry 

average manufacturer markup to be 1.35 

for NWOFs, 1.29 for MHOFs, and 1.27 

for WGFs. 

a. Teardown Analysis 

For the teardown analysis, DOE used 

a total of 31 teardowns of consumer 

furnaces as the basis for calculating 

industry MPCs. The units DOE selected 

for teardown are manufactured in 

considerable volume, are commonly 

available, and have features that DOE 

believes are representative of the most 

common characteristics (i.e., input 

capacity, configuration, and heat 

exchanger type) of each product class. 

As discussed previously, most physical 

teardown units had input capacities of 

approximately 80 kBtu/h for WGFs or 

105 kBtu/h for NWOFs and MHOFs, 

which DOE considers to be 

representative of those furnace product 

classes. To the extent possible, all major 

efficiency levels and technologies were 

captured in the selection of models for 

the teardown analysis. WGF and NWOF 

teardowns were considered separately. 

Due to the similarity observed in 

NWOF and MHOF designs available in 

the market, DOE tentatively concluded 

that the costs associated with increasing 

the energy efficiency of MHOFs are 

equivalent to the costs for NWOFs. A 

MHOF teardown was used to examine 

key differences between NWOFs and 

MHOFs and confirmed that the MPCs of 

MHOFs could be estimated based on the 

NWOF teardowns. Therefore, DOE 

based MPC estimates for MHOFs at each 

efficiency level analyzed largely on 

teardowns of NWOFs at that efficiency 

level. 

Whenever possible, DOE examined 

multiple models from a given 

manufacturer that capture different 

design options and used them as direct 

points of comparison. The teardown 

selections also minimized the 

incorporation of non-efficiency-related 

premium features, which otherwise 

could inflate the incremental 

manufacturing cost of achieving higher 

efficiency levels. 

DOE examined products with a 

variety of indoor blower motor 

technologies and combustion systems 

(i.e., single-stage, two-stage, or 

modulating). DOE also examined 

products with PSC, constant-torque 

BPM, and constant-airflow BPM indoor 

blower motors. As further discussed in 

section IV.B.2.b of this document, cost 

adders were developed for these 

technologies and applied in the 

downstream analyses to estimate the 

manufacturing cost of going from one 

technology to another with higher 

efficiency (e.g., using a constant-airflow 

BPM instead of a constant-torque BPM, 

or two-stage combustion instead of 

single-stage combustion). 

b. Cost Estimation Method 

DOE assigned costs of labor, 

materials, and overhead to each part, 

whether purchased or produced inhouse. DOE then aggregated single-part 

costs into major assemblies (e.g., 

packaging, cabinet assembly, heat 

exchanger, burner system/gas train, 

exhaust subassembly, fan system, 

controls) and summarized these costs in 

a spreadsheet BOM. DOE repeated this 

same process for every physical and 

catalog teardown in the engineering 

analysis. 

Analytical inputs related to 

manufacturer practices and cost 

structure play an important role in 

estimating the final cost of a product. 

DOE used inputs regarding the 

manufacturing process parameters (e.g., 

equipment use, labor rates, tooling 

depreciation, and cost of purchased raw 

materials) to determine the value for 

each furnace component. DOE collected 

information on labor rates, tooling costs, 

raw material prices, and other factors to 

use as inputs into the cost estimates. 

DOE determined values for these 

parameters using internal expertise and 

confidential information available to its 

contractors, some of which was 

obtained via confidential interviews 

with manufacturers. For purchased 

parts, DOE estimates the purchase price 

based on volume-variable price 

quotations and detailed discussions 

with manufacturers and component 

suppliers. DOE then summed the values 

of the furnace components into 

assembly costs and, finally, the total 

MPC for the entire furnace. 

The MPC includes material, labor, 

and depreciation costs, as well as the 

overhead costs associated with the 

manufacturing facility. Material costs 

include both raw materials and 

purchased-part costs. Labor costs 

include fabrication, assembly, and 

indirect and overhead (burdened) labor 

rates. Depreciation costs include 

production equipment depreciation, 

tooling depreciation, and building 

depreciation. The overhead costs 

associated with the manufacturing 

facility include indirect process costs, 

utilities, equipment and building 

maintenance, and reworking defective 

parts/units. 

DOE determined the costs of raw 

materials based on manufacturer 

interviews, quotes from suppliers, and 

secondary research. Past results are 

updated periodically and/or inflated to 

present-day prices using indices from 

resources such as MEPS Intl.,23

PolymerUpdate,24 the U.S. Geologic 

Survey (‘‘USGS’’),25 and the Bureau of 

Labor Statistics (‘‘BLS’’).26 Metal raw 

material prices, such as stainless steel 

and other sheet metals, are estimated on 

the basis of five-year averages to smooth 

out spikes in demand. Other ‘‘raw’’ 

materials such as plastic resins, 

insulation materials, etc. are estimated 

on a current-market basis. For non-metal 

raw material prices, DOE used prices 

based on current market data (as of 

December 2022), rather than a 5-year 

average, because non-metal raw 

materials have not experienced the same 


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83444 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

level of price volatility in recent years 

as metal raw materials. 

DOE characterized parts based on 

whether manufacturers fabricated them 

in-house or purchased them from 

outside suppliers. For fabricated parts, 

DOE estimated the price of intermediate 

materials (e.g., tube, sheet metal) and 

the cost of forming them into finished 

parts. For purchased parts, DOE 

estimated the purchase prices paid to 

the original equipment manufacturers 

(‘‘OEMs’’) of these parts, based on 

discussions with manufacturers during 

confidential interviews. Whenever 

possible, DOE obtained price quotes 

directly from the component suppliers 

used by furnace manufacturers whose 

products were examined in the 

engineering analysis. DOE determined 

that the components in Table IV.6 are 

generally purchased from outside 

suppliers. 

TABLE IV.6—PURCHASED FURNACE

COMPONENTS

Assembly Purchased sub-assemblies 

Burner/Exhaust.Gas valve. 

Spark igniter. 

Draft inducer assembly. 

Blower .......... Indoor blower fan blade. 

Indoor blower fan motor. 

Controls ........ Control boards. 

Capacitors, transformers, 

contactors, switches, etc. 

Certain factory parameters, such as 

fabrication rates, labor rates, and wages, 

also affect the cost of each unit 

produced. DOE factory parameter 

assumptions were based on internal 

expertise and manufacturer feedback. 

Table IV.7 lists the factory parameter 

assumptions used in the analysis. For 

the engineering analysis, these factory 

parameters, including production 

volume, are the same at every efficiency 

level. The production volume used at 

each efficiency level corresponds with 

the average production volume, per 

manufacturer, if 100 percent of all units 

manufactured were at that efficiency 

level. This production volume was 

estimated based on historical 

shipments. These assumptions are 

generalized to represent typical 

production and are not intended to 

model a specific factory. 

TABLE IV.7—FACTORY PARAMETER ASSUMPTIONS

Parameter Oil furnace 

estimate WGF estimate 

Actual Annual Production Volume (units/year) .......................................................................................... 5,000 units/year ... 500,000 units/year. 

Purchased Parts Volume ............................................................................................................................ 5,000 units/year ... 100,000 units/year. 

Workdays Per Year (days) ......................................................................................................................... 250 ....................... 250. 

Assembly Shifts Per Day (shifts) ................................................................................................................ 1 ........................... 2. 

Fabrication Shifts Per Day (shifts) ............................................................................................................. 2 ........................... 2. 

Fabrication Labor Wages ($/h) ................................................................................................................... 16 ......................... 16. 

Assembly Labor Wages ($/h) ..................................................................................................................... 16 ......................... 16. 

Length of Shift (hrs) .................................................................................................................................... 8 ........................... 8. 

Average Equipment Installation Cost (% of purchase price) ..................................................................... 10% ...................... 10%. 

Fringe Benefits Ratio .................................................................................................................................. 50% ...................... 50%. 

Indirect to Direct Labor Ratio ..................................................................................................................... 33% ...................... 33%. 

Average Scrap Recovery Value ................................................................................................................. 30% ...................... 30%. 

Worker Downtime ....................................................................................................................................... 10% ...................... 10%. 

Burdened Assembly Labor Wage ($/h) ...................................................................................................... 24 ......................... 24. 

Burdened Fabrication Labor Wage ($/h) .................................................................................................... 24 ......................... 24. 

Supervisor Span (workers/supervisor) ....................................................................................................... 25/1 ...................... 25/1. 

Supervisor Wage Premium (over fabrication and assembly wage) ........................................................... 30% ...................... 30%. 

Indoor Blower Motor Costs 

As discussed in section IV.B.1.a of 

this document, the baseline design for 

WGFs includes a BPM motor. DOE 

research suggests that the predominant 

BPM indoor blower motors sold on the 

market today are either a constanttorque (‘‘CT–BPM’’) or a constantairflow (‘‘CA–BPM’’) design. Both types 

of motors rely on electronic variablespeed motor systems that are typically 

mounted in an external chassis to the 

back of the motor. CA–BPM motors 

utilize feedback control to adjust torque 

based on ESP in order to maintain a 

desired airflow. This differentiates them 

from CT–BPM motors, which will 

maintain torque and likely decrease 

airflow output in environments with 

high ESPs. CT–BPMs are capable of 

achieving airflows similar to CA–BPMs 

but are generally less expensive. 

Therefore, DOE considered the baseline 

design to include a CT–BPM motor for 

the WGF product class and determined 

the incremental cost of a CA–BPM 

motor. 

DOE’s review of the market showed 

that PSC motors are still being used in 

some NWOFs and MHOFs, so the final 

MPC results are presented based on a 

PSC motor at the baseline through 87- 

percent AFUE. To account for the 

variety of motor technologies available 

on the market, DOE determined the 

incremental cost associated with use of 

various types of more-efficient BPM fan 

motors as compared to baseline PSC 

motors for NWOFs and MHOFs. 

Additionally, for NWOFs, a constantairflow BPM indoor blower motor was 

implemented as the motor design option 

for the max-tech efficiency level because 

the only NWOF model on the market 

available at this level includes a 

constant-airflow BPM motor, and it is 

unclear if this level is achievable 

without a constant-airflow fan. For the 

NWOF efficiency levels below max-tech 

and for all MHOF efficiency levels, DOE 

calculated the additional cost to switch 

from a PSC blower motor to either a 

constant-torque or a constant-airflow 

BPM motor. As discussed in Chapter 8 

of the November 2022 Preliminary 

Analysis TSD, these costs are applied in 

the LCC and PBP analyses to determine 

the MPC of a furnace with each motor 

technology in order to better represent 

typical costs to consumers for NWOFs 

and MHOFs. Constant-airflow BPM 

blower motors are sometimes used as a 

utility-enhancing feature on units below 

the max-tech efficiency level. The 

adders are outlined in Table IV.8. 


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27Rule 1111 of the South Coast Air Quality 

Management District (‘‘SCAQMD’’) of southern 

California currently requires that all NWGF and 

MHGF not exceed a 14 ng/J restriction on NOX

emissions. For more information on Rule 1111, see 

www.aqmd.gov/docs/default-source/rule-book/regxi/rule-1111.pdf?sfvrsn=4 (Last accessed Sept. 5, 

2023). 

28U.S. Environmental Protection Agency. Natural 

Gas Combustion (Available at: www3.epa.gov/ 

ttnchie1/ap42/ch01/final/c01s04.pdf) (Last 

accessed June 28, 2023). 

29U.S. Department of Labor, Bureau of Labor 

Statistics, Producer Price Indices (Available at: 

data.bls.gov/timeseries/WPU057303?data_

tool=XGtable) (Last accessed Feb. 17, 2022). 

TABLE IV.8—COST ADDERS FOR BPM BLOWER MOTORS

Product class 

Input 

capacity 

(kBtu/h) 

Incremental 

cost increase 

for BPM–CT 

(2022$) 

Incremental 

cost increase 

for BPM–CA 

(2022$) 

NWOF, MHOF ............................................................................................................................. 105 $30.65 $80.48 

WGF ............................................................................................................................................. 80 37.94 59.92 

Multistage Furnaces 

The market for WGFs contains a 

significant number of two-stage furnaces 

that are rated at the same efficiency as 

single-stage furnaces. DOE believes 

consumers sometimes choose to 

purchase two-stage products for the 

additional thermal comfort offered by 

furnaces with multiple stages of heating 

output. DOE determined that oil units 

with multi-staging were rare and, thus, 

not representative of the market, so 

adders were not developed for the 

NWOF and MHOF product classes. 

Where applicable, the additional cost to 

change to a two-stage furnace includes 

the added cost of a two-stage gas valve, 

a two-speed inducer assembly, an 

additional pressure switch, and 

additional controls and wiring. The 

additional cost to change to a 

modulating furnace includes the added 

cost of a modulating gas valve, an 

inducer assembly, an upgraded pressure 

switch, and additional controls and 

wiring. The incremental costs to 

implement multi-staging in WGFs are 

outlined in Table IV.9. 

TABLE IV.9—MULTI-STAGING

INCREMENTAL COST INCREASE

Adder 

Incremental cost 

increase for 

multi-staging 

(2022$) 

Two-Stage ...................... $21.07 

Modulating ...................... 75.36 

Low-NOX and Ultralow-NOX Furnaces 

Some furnaces are marketed as ‘‘lowNOX,’’ which indicates that their NOX

emissions are less than 40 nanograms of 

NOX per joule of useful heat energy 

(‘‘ng/J’’). Certain local jurisdictions 

require natural gas furnaces to comply 

with NOX emissions restrictions as low 

as 14 ng/J,27 which is referred to as 

‘‘ultralow-NOX.’’ A common method of 

reducing furnace NOX emissions is to 

slightly delay the natural gas 

combustion process, which in turn 

produces a cooler flame and results in 

suppressed formation of NOX.28 DOE 

has observed during its teardown 

analysis that to achieve low-NOX

operation, manufacturers implement 

low-NOX baffles. For ultralow-NOX

operation, DOE used NWGF teardowns 

to approximate the cost to implement 

this technology option in WGFs, as DOE 

understands that the methodology 

would be the same for both product 

classes. Through these teardowns of 

NWGFs, DOE has observed that in order 

to achieve ultralow-NOX operation, the 

in-shot burners typically used in 

residential furnaces were replaced with 

a mesh premix burner. In addition, the 

model used a variable-speed BPM 

inducer fan motor. DOE identified an 

ultralow-NOX WGF on the market and 

compared the burner construction for 

the torn-down NWGF and the ultralowNOX WGF. DOE found that the 

approach used for achieving ultralowNOX in WGFs is similar to that used in 

NWGFs. DOE also determined that oil 

units with ultralow-NOX operation were 

rare and, thus, not representative of the 

market, so adders were not developed 

for the NWOF and MHOF product 

classes. 

Using raw material price data, 

teardown data from NWGFs, and 

manufacturing expertise DOE estimated 

the manufacturing cost difference 

between standard NOX burners and lowNOX and ultralow-NOX burners. For 

low-NOX, MPC cost values were 

developed for the implementation of 

low-NOX baffles in WGFs at the 

representative input capacity of 80 

kBtu/h. For ultralow-NOX, MPC values 

were developed for the implementation 

of a mesh premix burner and variablespeed BPM inducer fan (along with 

other related components necessary). 

The resulting MPC estimates to achieve 

low-NOX and ultralow-NOX operation 

are shown in Table IV.10. 

In the LCC and PBP analysis (see 

section IV.E of this document), DOE 

estimated the fractions of furnaces that 

are installed in jurisdictions that require 

low-NOX or ultralow-NOX compliance 

and applied these cost adders to those 

fractions of furnace installations 

accordingly. The application of these 

adders is discussed in more detail in 

Chapter 8 of the November 2022 

Preliminary Analysis TSD. 

TABLE IV.10—ADDITIONAL MPCS FOR

LOW-NOX AND ULTRALOW-NOX WGFS

Adder Value 

(2022$) 

Low-NOX ............................... $3.10 

Ultralow-NOX ........................ 113.68 

Shipping Costs 

Freight is not a manufacturing cost, 

but because it is a substantial cost 

incurred by the manufacturer, DOE 

accounts for shipping costs separately 

from other costs. DOE calculated 

shipping costs based on a typical 53-foot 

straight-frame trailer with a storage 

volume of 4,240 cubic feet. 

DOE first calculated the cost per cubic 

foot of space on a trailer based on a cost 

of $3,643 per shipping load and the 

standard dimensions of a 53-foot trailer. 

This cost was determined based on a 

combination of full truck load (‘‘FTL’’) 

freight quotations, manufacturer 

feedback, and BLS producer price 

indices for the ‘‘fuels and related 

products and power’’ grouping.29 Then, 

DOE examined the average sizes of 

products in each product class at each 

efficiency and capacity combination 

analyzed. DOE estimated the shipping 

costs by multiplying the product 

volume by the cost per cubic foot of 

space on the trailer. Furnace dimensions 

typically do not change as a result of 

increases in efficiency, and accordingly, 

DOE’s shipping costs show no change 

across efficiency levels. In determining 

volumetric shipping costs, DOE also 

used manufacturer feedback regarding 

product mix on each trailer, packing 

efficiency, and methods and equipment 

used to load the trailers to revise the 

shipping costs. Table IV.11 shows the 


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83446 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

30 DOE estimates that five percent of WGFs and 

three percent of NWOFs are installed in commercial 

buildings. 

31New owners are new furnace installations in 

buildings that did not previously have a NWOF, 

MHOF, or WGF, or existing owners that are 

installing an additional consumer furnace. These 

primarily consist of households that add or switch 

to these furnaces during a major remodel. 

32 In the residential sector, DOE estimates that 

this distribution channel is applicable to 90 percent 

of the shipments for NWOFs and MHOFs, and 80 

percent for WGFs; in commercial sector, it is 

applied to 75 percent of NWOF and 70 percent of 

WGF distributions. 33 In the residential sector, DOE estimates that 

these two distribution channels combined are 

applicable to 5 percent of the shipments for NWOFs 

and MHOFs, and 15 percent for WGFs (in mobile 

home applications, 10 percent of the WGFs 

distributed to mobile homes is assumed to go 

through these channels); in the commercial sector, 

they are applied to 10 percent of NWOF and 15 

percent of WGF distributions. 

34 DOE estimates that 5 percent of MHOFs and 10 

percent of WGFs that go to mobile homes are 

distributed through this channel. 35The national accounts channel where the buyer 

is the same as the consumer is mostly applicable 

shipping costs for the products analyzed 

in this rulemaking. 

TABLE IV.11—SHIPPING COSTS PER UNIT

Product class 

Representative 

capacity 

(kBtu/h) 

Per-unit 

shipping cost 

(2022$) 

WGF ..................................................................................................................................................................... 80 55.69 

NWOF .................................................................................................................................................................. 105 19.92 

MHOF .................................................................................................................................................................. 105 19.92 

3. Cost-Efficiency Results 

Using the MPCs for individual 

teardowns and adders described in 

section IV.B.2.b of this document, DOE 

develops aggregated MPCs for each 

product class. The final results of the 

AFUE engineering analysis are the 

MPCs for WGFs, NWOFs, and MHOFs at 

each efficiency level. The cost-efficiency 

results are shown in tabular form in 

Table IV.12 through Table IV.14 as 

efficiency versus MPC and MSP. These 

results include the furnace fan and 

combustion system staging incorporated 

into most furnace designs. 

TABLE IV.12—COST-EFFICIENCY DATA

FOR WGFS WITH A CONSTANTTORQUE BPM INDOOR BLOWER

MOTOR AND A SINGLE-STAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

81 ...................... $1,412.32 $1,793.65 

95 ...................... 1,505.40 1,911.85 

TABLE IV.13—COST-EFFICIENCY DATA

FOR NWOFS WITH A PSC INDOOR

BLOWER MOTOR AND A SINGLESTAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

83 ...................... $700.73 $945.98 

85 ...................... 730.94 986.77 

87 ...................... 761.16 1,027.57 

96 ...................... 1,334.85 1,802.05 

TABLE IV.14—COST-EFFICIENCY DATA

FOR MHOFS WITH A PSC INDOOR

BLOWER MOTOR AND A SINGLESTAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

80 ...................... $664.47 $857.16 

83 ...................... 709.79 915.63 

85 ...................... 740.01 954.61 

87 ...................... 770.23 993.59 

C. Markups Analysis 

The markups analysis develops 

appropriate markups (e.g., retailer 

markups, distributor markups, 

contractor markups) in the distribution 

chain and sales taxes to convert the 

MSP estimates derived in the 

engineering analysis to consumer prices, 

which are then used in the LCC and PBP 

analysis. At each step in the distribution 

channel, companies mark up the price 

of the product to cover business costs 

and profit margin. Before developing 

markups, DOE defines key market 

participants and identifies distribution 

channels. 

For the subject consumer furnaces, 

the main parties in the distribution 

chains are: (1) manufacturers; (2) 

wholesalers or distributors; (3) retailers; 

(4) mechanical contractors; (5) builders; 

(6) manufactured home manufacturers, 

and (7) manufactured home dealers/ 

retailers. For this NOPD, DOE 

maintained the same approach as in the 

preliminary analysis. DOE characterized 

two distribution channel market 

segments to describe how NWOFs, 

MHOFs, and WGFs pass from the 

manufacturer to residential and 

commercial consumers: 30 (1) 

replacements and new owners 31 and (2) 

new construction. 

In replacement and new owner 

market, the primary distribution 

channel for NWOFs, MHOFs, and WGFs 

is characterized as follow: 

Manufacturer → Wholesaler → 

Mechanical Contractor → Consumer 

DOE estimates that the above 

distribution channel applies to a 

majority of the shipment of the subject 

consumer furnaces.32 However, the 

retail distribution channel (including 

internet sales) has grown significantly in 

the last five years (previously it was 

negligible), and some consumers 

purchase the appliance directly and 

then have contractors install it. 

Accordingly, DOE considered the 

following additional distribution 

channels: 33

Manufacturer → Retailer → Consumer 

Manufacturer → Retailer → Mechanical 

Contractor → Consumer 

For mobile home applications, there 

is another distribution channel 

considered on top of the 

aforementioned, where the MHOF or 

WGF is purchased via a mobile home 

specialty retailer or dealer: 34

Manufacturer → Mobile Home Specialty 

Retailer/Dealer → Consumer 

In the new construction market, DOE 

identified three primary distribution 

channels that involve builders, or 

manufactured home builders when 

considering mobile home applications: 

Manufacturer → Wholesaler → 

Mechanical Contractor → Builder 

→ Consumer 

Manufacturer → Wholesaler → Builder 

→ Consumer 

Manufacturer → Mobile Home 

Manufacturer → Mobile Home 

Dealer → Consumer 

For both the replacements and new 

owners and the new construction 

markets, DOE additionally considered 

the national accounts or direct-frommanufacturer distribution channel, 

where the manufacturer through a 

wholesaler sells directly to 

consumers.35


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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83447 

to NWOFs and WGFs installed in small to mid-size 

commercial buildings, where on-site contractors 

purchase equipment directly from wholesalers at 

lower prices due to the large volume of equipment 

purchased, and perform the installation themselves. 

DOE’s analysis assumes that approximately 5 and 

15 percent of NWOFs and WGFs installed in the 

residential and commercial sector, respectively, use 

national accounts distribution channel for 

replacements. For new construction, DOE assumes 

10 percent of the subject furnaces installed in 

residential sector and 20 percent installed in 

commercial are distributed through national 

accounts. 

36Because the projected price of standardscompliant products is typically higher than the 

price of baseline products, using the same markup 

for the incremental cost and the baseline cost would 

result in higher per-unit operating profit. While 

such an outcome is possible, DOE maintains that in 

markets that are reasonably competitive, it is 

unlikely that standards would lead to a sustainable 

increase in profitability in the long run. 

37 In this NOPD, DOE is referencing the November 

2022 Preliminary TSD for general methodology; 

note that some inputs have been updated for this 

NOPD. 38Energy Information Administration (EIA), 2015 

Residential Energy Consumption Survey (RECS). 

(Available at: www.eia.gov/consumption/ 

residential/) (Last accessed August 1, 2023). 39Energy Information Administration (EIA), 2012 

Commercial Buildings Energy Consumption Survey 

(CBECS). (Available at: www.eia.gov/consumption/ 

commercial/) (Last accessed August 1, 2023). 

40At the time DOE performed the analyses 

underlying this proposed determination, the RECS 

2015 and CBECS 2012 were the latest available full 

data releases. 

Manufacturer → Wholesaler (National 

Account) → Buyer → Consumer 

DOE developed baseline and 

incremental markups for each 

participant in the distribution chain to 

ultimately determine the consumer 

purchase cost. Baseline markups are 

applied to the price of products with 

baseline efficiency, while incremental 

markups are applied to the difference in 

price between baseline and higherefficiency models (the incremental cost 

increase). The incremental markup is 

typically less than the baseline markup 

and is designed to maintain similar perunit operating profit before and after 

new or amended standards.36

Lennox stated that the application of 

lower incremental markups for 

increased consumer furnace standard 

levels considered in the TSD should be 

reviewed. Lennox stated that a 

significantly discounted incremental 

markup for high EL levels from baseline 

markup is not logical or aligned with 

business practices. (Lennox, No. 26 at p. 

8) Lennox added that the assumption of 

reduced incremental markups for higher 

efficiency standards is contrary to 

normal industry practice and the 

expectations of its shareholders. 

(Lennox, No. 26 at p. 8) 

In response, DOE’s incremental 

markup approach assumes that an 

increase in profitability, which is 

implied by keeping a fixed markup 

when the product price goes up, is 

unlikely to be viable over time in 

reasonably competitive markets. DOE 

recognizes that actors in the distribution 

chains are likely to seek to maintain the 

same markup on appliances in response 

to changes in manufacturer sales prices 

after an amendment to energy 

conservation standards. However, DOE 

believes that retail pricing is likely to 

adjust over time as those actors are 

forced to readjust their markups to reach 

a medium-term equilibrium in which 

per-unit profit is relatively unchanged 

before and after standards are 

implemented. 

DOE acknowledges that markup 

practices in response to amended 

standards are complex and vary with 

business conditions. However, DOE’s 

analysis necessarily only considers 

changes in appliance offerings that 

occur in response to amended 

standards. DOE continues to maintain 

that its assumption that standards do 

not facilitate a sustainable increase in 

profitability is reasonable. Chapter 6 of 

the November 2022 Preliminary 

Analysis TSD provides details on DOE’s 

development of markups for oil and 

weatherized gas furnaces.37

D. Energy Use Analysis 

The purpose of the energy use 

analysis is to determine the annual 

energy consumption of oil and 

weatherized gas furnaces at different 

efficiencies in representative U.S. 

residential buildings, commercial 

buildings, and residential mobile 

homes, and to assess the energy savings 

potential of increased oil and 

weatherized gas furnace efficiency. The 

energy use analysis estimates the range 

of energy use of oil and weatherized gas 

furnaces in the field (i.e., as they are 

actually used by consumers). The 

energy use analysis provides the basis 

for other analyses DOE performed, 

particularly assessments of the potential 

energy savings and the savings in 

consumer operating costs that could 

result from adoption of amended or new 

standards. 

DOE estimated the annual energy 

consumption of oil and weatherized gas 

consumer furnaces at specific energy 

efficiency levels across a range of 

climate zones, building characteristics, 

and space heating needs. The annual 

energy consumption includes the 

natural gas, liquid petroleum gas 

(‘‘LPG’’), oil, and electricity, as 

applicable, used by the furnace. 

To determine the field energy use of 

the subject furnaces, DOE developed a 

building sample based on the Energy 

Information Administration’s (‘‘EIA’’) 

2015 Residential Energy Consumption 

Survey (‘‘RECS 2015’’) 38 and 2012 

Commercial Building Energy 

Consumption Survey (‘‘CBECS 

2012’’).39 40 DOE used RECS 2015- 

reported or CBECS 2012-reported 

heating energy consumption (based on 

the existing heating system) to calculate 

the heating load of each household or 

building. The heating load represents 

the amount of heating required to keep 

a housing unit or building comfortable 

throughout an average year. DOE 

assigned the energy efficiency of 

existing systems based on the design of 

the distribution systems, a historical 

distribution of energy efficiencies for 

NWOFs, MHOFs, and WGFs, and data 

about the age of the existing furnace. 

The estimation of heating loads also 

required calculating the electricity 

consumption of the blower, because 

heat from the operation of the blower 

contributes to space heating. In 

addition, DOE made adjustments based 

on historical weather data, projections 

of building shell efficiency, and 

building square footage, as well as for 

homes that had secondary heating 

equipment that used the same fuel as 

the furnace. To complete the analysis, 

DOE calculated the anticipated energy 

consumption of alternative (more 

energy-efficient) products if they were 

to replace existing systems in each 

housing unit or commercial building. 

DOE also included the electricity use 

of auxiliary equipment, such as 

condensate pumps and heat tape, which 

are sometimes installed with higherefficiency products. The electricity 

consumption of the auxiliary equipment 

(‘‘ElecUseAux’’) is added to the total 

electricity consumption. 

Chapter 7 of the November 2022 

Preliminary Analysis TSD provides 

details on DOE’s energy use analysis for 

oil and weatherized gas furnaces. 

AHRI commented that standard heat 

tape has an average energy consumption 

of 9 W/ft, adding that this additional 

load would increase energy use and is 

not accounted for in DOE’s energy use 

analysis for these products. AHRI stated 

that there are additional challenges 

surrounding prevention of freezing 

condensate for WGF units, and although 

AHRI suggested that electric strip 

heating could be used to overcome this 

problem, such solution would add 

electrical losses. (AHRI, No. 23 at p. 5) 

In response, DOE accounted for heat 

tape use in cases when a WGF is 

installed in an outdoor environment 

that could face freezing conditions. DOE 

assumed that such installations would 

occur in locations facing freezing 

conditions based on the outdoor heating 


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41Crystal BallTM is a commercially-available 

software tool to facilitate the creation of these types 

of models by generating probability distributions 

and summarizing results within Excel (Available at: 

www.oracle.com/middleware/technologies/ 

crystalball.html) (Last accessed August1, 2023). 

design temperature (or the 99th 

percentile). For the WGF sample, which 

is largely in warmer parts of the 

country, DOE estimated that about 5 

percent of those installations would 

require heat tape, and DOE assumed 

that a larger fraction (around 50 percent) 

would deal with freeze protection 

through other methods, such as running 

the condensate lines through the ground 

or inside the WGF unit and into the 

building. For the energy use analysis, 

DOE used on average 45 watts (or 9 W/ 

ft times 5 feet) for the energy 

consumption of installations requiring 

heat tape. For another 5 percent of 

installations, DOE accounted for the use 

of a condensate pump with an average 

energy consumption of 60 watts. DOE 

notes that any additional installation 

costs would not change DOE’s tentative 

decision not to amend standards for the 

subject products. 

E. 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 oil and weatherized gas furnaces. 

The effect of new or amended energy 

conservation standards on individual 

consumers usually involves a reduction 

in operating cost and an increase in 

purchase cost. DOE used the following 

two metrics to measure consumer 

impacts: 

b Life-Cycle Cost (LCC) is the total 

consumer expense of an appliance or 

product over the life of that product, 

consisting of total installed cost 

(manufacturer selling price, distribution 

chain markups, sales tax, 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. 

b Payback Period (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 at higher 

efficiency levels by the change in 

annual operating cost for the year that 

amended or new standards are assumed 

to take effect. 

For any given efficiency level, DOE 

measures the change in LCC relative to 

the LCC in the no-new-standards case, 

which reflects the estimated efficiency 

distribution of oil and weatherized gas 

furnaces in the absence of new or 

amended energy conservation 

standards. In contrast, the PBP for a 

given efficiency level is measured 

relative to the baseline product. 

For each considered efficiency level 

in each product class, DOE calculated 

the LCC and PBP for a nationally 

representative set of housing units and, 

where appropriate, commercial 

buildings. As stated previously, DOE 

developed household and commercial 

building samples from RECS 2015 and 

CBECS 2012. For each sample 

household or commercial building, DOE 

determined the energy consumption for 

the oil and weatherized gas furnaces 

and the appropriate energy price. By 

developing a representative sample of 

households and commercial buildings, 

the analysis captured the variability in 

energy consumption and energy prices 

associated with the use of oil and 

weatherized gas furnaces. 

Inputs to the LCC calculation include 

the installed cost to the consumer, 

operating expenses, the lifetime of the 

product, and the discount rate that 

applies to projected expenses. Inputs to 

the calculation of total installed cost 

include the cost of the product—which 

includes MPCs, manufacturer markups, 

retailer and distributor markups, and 

sales taxes (where appropriate)—and 

installation costs. Inputs to the 

calculation of operating expenses 

include annual energy consumption, 

energy prices and price projections, 

repair and maintenance costs, product 

lifetimes, and discount rates. Inputs to 

the payback period calculation include 

the installed cost to the consumer and 

first year operating expenses. DOE 

created distributions of values for 

installation cost, repair and 

maintenance, product lifetime, and 

discount rates with probabilities 

attached to each value, to account for 

their uncertainty and variability. 

The computer model DOE uses to 

calculate the LCC and PBP 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 oil, 

electric, and weatherized gas furnace 

user samples. For this determination, 

the Monte Carlo approach is 

implemented in MS Excel together with 

the Crystal BallTM add-on.41 The model 

calculated the LCC and PBP for 

products at each efficiency level for 

10,000 furnace installations in housing 

units or commercial buildings per 

simulation run. The analytical results 

include a distribution of 10,000 data 

points showing the range of LCC savings 

for a given efficiency level relative to 

the no-new-standards case efficiency 

distribution. In performing an iteration 

of the Monte Carlo simulation for a 

given consumer, product efficiency is 

chosen based on its probability. If the 

chosen product efficiency is greater than 

or equal to the efficiency of the standard 

level under consideration, the LCC and 

PBP calculation reveals that a consumer 

is not impacted by the standard level. 

By accounting for consumers who are 

projected to purchase more-efficient 

furnaces than the baseline furnace in the 

simulation, DOE avoids overstating the 

potential benefits from increasing 

product efficiency. 

DOE calculated the LCC and PBP for 

all consumers of oil and weatherized gas 

furnaces as if each were to purchase a 

new product in the expected first year 

of required compliance with new or 

amended standards. Any amended 

standards would apply to oil and 

weatherized gas furnaces manufactured 

five years after the date on which any 

new or amended standard is published 

in the Federal Register. (42 U.S.C. 

6295(m)(4)(A)(ii)) For purposes of its 

analysis, DOE used 2030 as the first year 

of compliance with any amended 

standards for oil and weatherized gas 

furnaces. 

Table IV.15 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 how all inputs to the LCC 

and PBP analyses are applied, are 

contained in chapter 8 of the November 

2022 Preliminary Analysis TSD and its 

appendices. 


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42U.S. Department of Labor, Bureau of Labor 

Statistics, Produce Price Indices Series ID 

PCU333415333415C (Available at: www.bls.gov/ 

ppi/) (Last accessed August 1, 2023). 

43RSMeans Company Inc., RSMeans Cost Data. 

Kingston, MA (2023) (Available at: 

www.rsmeans.com/products/books/2023-cost-databooks) (Last accessed August 1, 2023). 

TABLE IV.15—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS * 

Input Source/method 

Product Cost ................................... Derived by multiplying MPCs by manufacturer and distribution chain markups and sales tax, as appropriate. Used historical data to derive a price-scaling index to project product costs. 

Installation Costs ............................. Baseline installation cost determined with data from RSMeans 2023, manufacturer literature, and expert 

consultant. DOE assumed increased installation costs for condensing furnaces. 

Annual Energy Use ......................... The annual energy consumption per unit at each efficiency level (see section IV.D of this document). Variability: Based on RECS 2015 and CBECS 2012. 

Energy Prices .................................. Natural Gas: Based on EIA’s Natural Gas Navigator data for 2022 and RECS 2015 and CBECS 2012 billing data. 

Propane and Fuel Oil: Based on EIA’s State Energy Data System (‘‘SEDS’’) for 2021. 

Electricity: Based on EIA’s Form 861 data for 2022 and RECS 2015 and CBECS 2012 billing data. 

Variability: State energy prices determined for residential and commercial applications. 

Marginal prices used for natural gas, propane, and electricity prices. 

Energy Price Trends ....................... Residential and commercial prices were escalated by using EIA’s 2023 Annual Energy Outlook (AEO 

2023) forecasts to estimate future energy prices. Escalation was performed at the Census Division level. 

Repair and Maintenance Costs ...... Baseline installation cost determined with data from RSMeans 2023, manufacturer literature, and expert 

consultant. DOE assumed increased repair and maintenance costs for condensing furnaces. 

Product Lifetime .............................. Based on shipments data, multi-year RECS, American Housing Survey, American Home Comfort Survey 

data. Average: 20.2–22.5 years 

Discount Rates ................................ For residential end users, 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 Survey of Consumer Finances. For commercial end users, DOE calculates 

commercial discount rates as the weighted average cost of capital using various financial data. 

Compliance Date ............................ 2030. 

* Note: References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the November 2022 Preliminary Analysis TSD. 

1. Product Cost 

To calculate consumer product costs, 

DOE multiplied the MPCs developed in 

the engineering analysis by the markups 

described previously (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. 

DOE estimated product prices in the 

year of compliance by using a leastsquares power-law fit on the inflationadjusted, unified price index (historical 

Producer Price Index (‘‘PPI’’) data for 

warm-air furnaces from the Bureau of 

Labor Statistics (‘‘BLS’’) spanning the 

time period 1990–2018 versus 

cumulative shipments.42

In order to improve real-world 

representativeness, NYSERDA 

recommended that DOE consider using 

piecewise power-law curves for 

different time intervals to estimate the 

learning rate parameter in the LCC 

analysis. NYSERDA provided data to 

explain that prices decreased until 2017 

and then started to increase. NYSERDA 

added that one possible explanation for 

this is that growing economies are 

consuming more raw materials that go 

into manufacturing furnaces, and such 

an increase in global aggregate demand 

for raw materials exerts upward 

pressure on product prices. The 

commenter explained that piecewise 

power-law curves are a common 

approach in cases where there is a 

reversal in directionality of trends and 

cited an example journal article. 

NYSERDA commented that using one 

power-law curve before 2017 and 

another after would more accurately 

capture the reduction in furnace prices 

in the future. (NYSERDA, No. 19 at pp. 

3–4) 

DOE reviewed NYSERDA’s suggestion 

for an alternative price learning 

approach; however, insufficient data are 

available to implement the approach for 

the products considered in this 

rulemaking. In addition, the 

recommendation to segment the curve 

before and after 2017 is similar to the 

alternative price scenarios that DOE 

typically explores when proposing or 

finalizing amended standards, but in 

this case, DOE has tentatively 

determined not to amend standards. For 

these reasons, DOE has not changed its 

methodology for this NOPD. 

2. Installation Cost 

The installation cost is the expense to 

the consumer of installing the furnace, 

in addition to the cost of the furnace 

itself. Installation cost includes all 

labor, overhead, and any miscellaneous 

materials and parts needed that are 

associated with the replacement of an 

existing furnace or the installation of a 

furnace in a new home, as well as 

delivery of the new furnace, removal of 

the existing furnace, and any applicable 

permit fees. Higher-efficiency furnaces 

may require a consumer to incur 

additional installation costs. DOE used 

data from RSMeans,43 manufacturer 

literature, and expert consultants to 

estimate the installation cost, including 

labor costs, for oil and weatherized gas 

furnaces. DOE’s analysis of installation 

costs accounted for regional differences 

in labor costs by aggregating city-level 

labor rates from RSMeans into the 50 

distinct State plus Washington DC to 

match RECS 2015 and CBECS 2012 data. 

The installation cost methodology 

accounts for all potential installation 

cases, including when a noncondensing 

furnace is replaced with a condensing 

furnace, with particular attention to 

venting issues in replacement 

applications (see descriptions which 

follow). The installation cost also 

depends on the furnace installation 

location, which DOE determined using 

information from RECS 2015 and 

CBECS 2012. 

For NWOF replacement installations, 

DOE included a number of additional 

costs (‘‘adders’’) for a fraction of the 

sample households that have particular 

features. For noncondensing furnaces, 

these additional costs included 

updating flue vent connectors, vent 

resizing, and chimney relining. For 

condensing furnaces, these additional 

costs included adding a new flue vent 


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83450 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

44U.S. Department of Energy-Energy Information 

Administration, Form EIA–861M (formerly EIA– 

826) detailed data (2022) (Available at: 

www.eia.gov/electricity/data/eia861m/) (Last 

accessed August 1, 2023). 

45U.S. Department of Energy-Energy Information 

Administration, Natural Gas Navigator (2022) 

(Available at: www.eia.gov/naturalgas/data.php) 

(Last accessed August 1, 2023). 

46U.S. Department of Energy-Energy Information 

Administration, 2021 State Energy Data System 

(SEDS) (2021) (Available at: www.eia.gov/state/ 

seds/) (Last accessed August 1, 2023). 

47EIA, Annual Energy Outlook 2023 with 

Projections to 2050 (Available at: www.eia.gov/ 

forecasts/aeo/) (Last accessed June 1, 2023). 

(PVC), adding combustion air vent for 

direct vent installations (PVC), adding 

concealing vent pipes for indoor 

installations, addressing an orphaned 

water heater (by updating flue vent 

connectors, vent resizing, or chimney 

relining), and removing condensate, all 

based on manufacturer installation 

manuals and expert consultant input. 

Freeze protection (heat tape) is 

accounted for in the cost of condensate 

removal for a fraction of NWOFs 

installed in unconditioned attics. 

For WGF installations, DOE included 

additional cost adders for condensing 

WGFs to dispose of the condensate 

created and to prevent freezing of the 

condensate, as the entire product is 

outdoors based on manufacturer 

installation manuals, field study reports, 

and expert consultant input. DOE also 

accounted for a fraction of installations 

in colder climates that could require 

freeze protection (heat tape), a 

condensate line being buried below the 

frost line, or a condensate pump. 

AHRI commented that for WGFs 

installed in rooftop applications, heated 

drain lines are needed for winter use to 

avoid building water damage. AHRI 

added that condensate lines running 

within the unit are difficult to access 

and could have the potential to trap 

condensate. (AHRI, No. 23 at p. 5) JCI 

stated that while DOE considered the 

use of heat tape, the practical 

application/maintenance of heat tape 

internal to installed systems poses an 

undue installation and maintenance 

burden. (JCI, No. 25 at p. 2) 

As explained in section IV.D of this 

document, DOE accounted for heat tape 

use in cases when a WGF is installed in 

an outdoor environment that could face 

freezing conditions. DOE assumed that 

the installation location would be facing 

freezing conditions based on the 

outdoor heating design temperature (or 

the 99th percentile). For the WGF 

sample, which is largely in warmer 

parts of the country, DOE estimated that 

about five percent would require heat 

tape. For another five percent of 

installations, DOE accounted for the use 

of a condensate pump. Furthermore, 

DOE accounts for other condensate costs 

such as adding condensate piping, 

running condensate lines through the 

ground or inside the WGF unit and into 

the building, using condensate 

neutralizer, adding an electrical outlet 

for heat tape or condensate pump, 

adding a drain pan, and adding a noncorrosive drain. On average, the 

installation cost adder across these 

scenarios is $110. 

For further information on the 

derivation of installation costs, see 

chapter 7 of the November 2022 

Preliminary Analysis TSD. 

3. Annual Energy Consumption 

For each sampled household or 

commercial building, DOE determined 

the energy consumption for oil and 

weatherized gas furnace at different 

efficiency levels using the approach 

described previously in section IV.D of 

this document. 

4. Energy Prices 

DOE derived 2022 annual residential 

and commercial electricity prices by 

state from EIA Form 861M data.44 DOE 

obtained 2022 annual residential and 

commercial natural gas prices by state 

from EIA’s Natural Gas Navigator.45

DOE collected 2021 average LPG and 

fuel oil prices by state from EIA’s 2021 

State Energy Consumption, Price, and 

Expenditures Estimates (‘‘SEDS’’) and 

scaled to 2022 prices using AEO2023 

data.46 To determine monthly prices for 

use in the analysis, DOE developed 

monthly energy price factors for each 

fuel based on long-term monthly price 

data. Monthly electricity and natural gas 

prices were adjusted using seasonal 

marginal price factors to determine 

monthly marginal electricity and natural 

gas prices. These marginal energy prices 

were used to determine the cost to the 

consumer of the change in energy 

consumed. Because marginal price data 

is only available for residential 

electricity and natural gas, DOE only 

developed marginal monthly prices for 

these fuels. For LPG and fuel oil, DOE 

used average monthly prices. 

To estimate energy prices in future 

years, DOE multiplied the 2022 energy 

prices by the projection of annual 

average price changes for each state 

from the Reference case in AEO2023, 

which has an end year of 2050.47 To 

estimate price trends after 2050, DOE 

used the average annual rate of change 

in prices from 2046 through 2050. See 

chapter 8 of the November 2022 

Preliminary Analysis TSD for details. 

NYSERDA recommended that DOE 

consider applying a correction factor to 

account for potential gaps between 

forecasted prices and actual prices for 

energy, particularly in oil and natural 

gas. NYSERDA provided data depicting 

the heating oil prices within New York 

over a 23-year period and noted that 

there is significant variation in the time 

series. The commenter encouraged DOE 

to assemble multiple AEO reports for 

historic forecasts to determine a 

correction factor based on the 

comparison of actual prices to 

forecasted prices. NYSERDA added that 

this correction factor could then be 

applied to future forecasted prices to 

produce a more accurate result while 

still using EIA’s price forecasts. 

(NYSERDA, No. 19 at pp. 4–5) 

In response to NYSERDA, DOE 

acknowledges that forecasted prices do 

not always accurately predict future 

prices. However, DOE does not agree 

that past discrepancies between the two 

can reliably be used to adjust EIA’s 

forecasts, as there is not a firm basis for 

assuming that historic factors will 

develop in the same way in the future. 

For this reason, DOE is maintaining its 

practice of relying on AEO’s energy 

price forecasts. 

The Joint Commenters reiterated their 

comments made in response to DOE’s 

2022 Request for Information pertaining 

to concerns with DOE’s reliance on 

allegedly incorrect projections of natural 

gas price trends, marginal residential 

natural gas prices, and systematic 

problems with DOE’s economic 

analysis. The Joint Commenters added 

that these earlier comments highlight 

flaws in DOE’s process and stated that 

these flaws must be addressed both in 

this and future rulemakings before 

proposing any new minimum efficiency 

standards for appliances. (Joint 

Commenters, No. 24 at p. 3) 

In response to the Joint Commenters, 

DOE acknowledges that past projections 

of natural gas prices have not matched 

actual prices in recent years, but DOE 

maintains that this is due to factors that 

were difficult to predict and not to any 

flaws in the model that is used to 

develop AEO energy price projections, 

or to biases with regard to assumptions. 

5. Maintenance and Repair Costs 

Repair costs are associated with 

repairing or replacing product 

components that have failed in an 

appliance; maintenance costs are 

associated with maintaining the 

operation of the product. The 

maintenance and repair costs (including 

labor hours, component costs, and 

frequency) at each considered efficiency 

level are derived based on 2023 

RSMeans Facilities Maintenance and 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83451 

48RSMeans Company Inc., RSMeans Facilities 

Maintenance & Repair Cost Data (2023) (Available 

at: www.rsmeans.com/) (Last accessed August 1, 

2023). 

49Lutz, J., A. Hopkins, V. Letschert, V. Franco, 

and A. Sturges, Using national survey data to 

estimate lifetimes of residential appliances, 

HVAC&R Research (2011) 17(5): p. 28. (Available 

at: www.tandfonline.com/doi/abs/10.1080/ 

10789669.2011.558166) (Last accessed August 1, 

2023). 

50U.S. Department of Energy: Energy Information 

Administration, Residential Energy Consumption 

Survey (‘‘RECS’’), Multiple Years (1990, 1993, 1997, 

2001, 2005, 2009, and 2015). (Available at: 

www.eia.gov/consumption/residential/) (Last 

accessed August 1, 2023). 

51U.S. Census Bureau: Housing and Household 

Economic Statistics Division, American Housing 

Survey, Multiple Years (1974, 1975, 1976, 1977, 

1978, 1979, 1980, 1981, 1983, 1985, 1987, 1989, 

1991, 1993, 1995, 1997, 1999, 2001, 2003, 2005, 

2007, 2009, 2011, 2013, 2015, 2017, 2019, and 

2021). (Available at: www.census.gov/programssurveys/ahs/) (Last accessed August 1, 2023). 

52Heating, Air-conditioning and Refrigeration 

Distributors International (HARDI), DRIVE portal 

(HARDI Visualization Tool managed by D+R 

International until 2022), proprietary Gas Furnace 

Shipments Data from 2013–2022 provided to 

Lawrence Berkeley National Laboratory (LBNL). 

53BRG Building Solutions. The North American 

Heating & Cooling Product Markets (2022 Edition) 

(Available at: www.brgbuildingsolutions.com/ 

reports-insights) (Last accessed August 1, 2023). 

54U.S. Department of Energy Compliance 

Certification Database (‘‘CCD’’) (Available at: 

www.regulations.doe.gov/certification-data/) (Last 

accessed August 1, 2023). 

Repair Data,48 manufacturer literature, 

consultant input, and industry reports. 

DOE also accounted for regional 

differences in labor costs based on these 

2023 RSMeans data. 

DOE assumes that condensing 

furnaces have a higher maintenance cost 

than noncondensing furnaces, but that 

this maintenance cost is the same at all 

noncondensing or condensing efficiency 

levels within each product class. The 

additional maintenance cost for 

condensing furnaces includes 

maintenance tasks related to the 

condensate withdrawal system (such as 

condensate pump or condensate 

neutralizer filter) and additional 

maintenance related to the cleaning or 

checking of the heat exchanger (in 

particular, for condensing oil-fired 

furnaces using high-sulfur fuel oil). 

DOE also assumes that condensing 

furnaces have a higher repair cost than 

noncondensing furnaces, but the repair 

cost is the same at all non-condensing 

or condensing efficiency levels within 

each product class. 

For more details on DOE’s 

methodology for calculating 

maintenance and repair costs, including 

all online resources reviewed, see 

appendix 8E of the November 2022 

Preliminary Analysis TSD. 

6. Product Lifetime 

Product lifetime is the age at which an 

appliance is retired from service. DOE 

conducted an analysis of furnace 

lifetimes based on the methodology 

described in a recent journal paper.49

For this analysis, DOE relied on RECS 

1990, 1993, 2001, 2005, 2009, and 

2015.50 DOE also used the U.S. Census’s 

biennial American Housing Survey 

(‘‘AHS’’), from 1974–2021, which 

surveys all housing, noting the presence 

of a range of appliances.51 DOE used the 

appliance age data from these surveys, 

as well as the historical furnace 

shipments, to generate an estimate of 

the survival function. The survival 

function provides a lifetime range from 

minimum to maximum, as well as an 

average lifetime. For oil and 

weatherized gas furnaces, DOE 

developed Weibull distributions 

resulting in an average lifetime of 20.2 

to 22.5 years (based on region). 

Appendix 8F of the November 2022 

Preliminary Analysis TSD provides 

further details on the methodology and 

sources DOE used to develop the subject 

furnace lifetimes. 

7. Discount Rates 

The discount rate is the rate at which 

future expenditures and savings are 

discounted to establish their present 

value. DOE estimates discount rates 

separately for residential and 

commercial end users. 

For residential end users, DOE applies 

weighted-average discount rates 

calculated from consumer debt and 

asset data, rather than marginal or 

implicit discount rates. DOE identified 

all relevant household debt or asset 

classes in order to approximate a 

consumer’s opportunity cost of funds 

related to appliance energy cost savings. 

It estimated the average percentage 

shares of the various types of debt and 

equity by household income group 

using data from the Federal Reserve 

Board’s Survey of Consumer Finances 

(‘‘SCF’’). Using the SCF and other 

sources, DOE developed a distribution 

of rates for each type of debt and asset 

by income group 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. 

For commercial end users, DOE 

estimated the weighted-average cost of 

capital using data from various financial 

sources. The weighted-average cost of 

capital is commonly used to estimate 

the present value of cash flows to be 

derived from a typical company project 

or investment. Most companies use both 

debt and equity capital to fund 

investments, so their cost of capital is 

the weighted average of the cost to the 

firm of equity and debt financing. 

See appendix 8G of the November 

2022 Preliminary Analysis TSD for 

further details on the development of 

discount rates. 

8. Energy Efficiency Distribution in the 

No-New-Standards Case 

To accurately estimate the share of 

consumers that would be affected by a 

potential energy conservation standard 

at a particular efficiency level, DOE’s 

LCC analysis considered the projected 

distribution (i.e., market shares) of 

product efficiencies under the no-newstandards case (i.e., the case without 

amended or new energy conservation 

standards) in the compliance year 

(2030). This approach reflects the fact 

that some consumers may purchase 

products with efficiencies greater than 

the baseline levels, such that even in a 

no-new-standards case, consumers will 

be purchasing higher-efficiency 

furnaces. 

For consumer furnaces, DOE had 

limited historical-shipments data by 

efficiency level. For NWOFs/MHOFs, 

DOE reviewed market shares from 

HARDI 2013–2022 data and BRG 2007– 

2022 data.52 53 The shipments data are 

not disaggregated between NWOFs and 

MHOFs, but DOE assigned all 

shipments data below 83-percent AFUE 

to MHOFs. For WGFs, DOE had 

insufficient historical shipments data by 

efficiency level to develop a reliable 

efficiency distribution. To cover the lack 

of available shipments data, DOE 

referred to the DOE’s Compliance 

Certification Database (‘‘CCD’’) 54 for 

furnaces to develop efficiency 

distributions based on available models 

for WGFs. 

The estimated market shares for the 

no-new-standards case for oil and 

weatherized gas furnaces are shown in 

Table IV.16. See chapter 8 of the 

November 2022 Preliminary Analysis 

TSD for further information on the 

derivation of the efficiency 

distributions. 


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83452 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

55 DOE uses data on manufacturer shipments as 

a proxy for national sales, as aggregate data on sales 

are lacking. In general, one would expect a close 

correspondence between shipments and sales. 

TABLE IV.16—NO-NEW-STANDARDS CASE ENERGY EFFICIENCY DISTRIBUTIONS IN 2030 FOR OIL AND WEATHERIZED GAS

FURNACES

Product class Efficiency level Distribution 

(%) 

NWOF ...................................................................................................................................................................... Baseline ......... 37.2 

1 ..................... 60.0 

2 ..................... 1.5 

3 ..................... 1.3 

MHOF ...................................................................................................................................................................... Baseline ......... 95 

1 ..................... 2 

2 ..................... 3 

3 ..................... 0 

WGF ........................................................................................................................................................................ Baseline ......... 96 

1 ..................... 4 

AHRI and Lennox stated that model 

counts from the public database do not 

reflect model or sales volume and that 

a high number of models at a specific 

efficiency level does not imply a large 

market share of those products. (AHRI, 

No. 23 at p. 4; Lennox, No. 26 at p. 3) 

Lennox stated that industry data for 

condensing weatherized gas furnaces 

indicate that the market adoption of 

these products has been de minimis. 

(Lennox, No. 26 at p. 8) NYSERDA 

commented that within New York’s 

relatively cold climate, new sales of 

electric and weatherized gas furnaces 

are minimal. However, NYSERDA noted 

that oil furnaces continue to be sold and 

installed throughout the State, with a 

2019 study suggesting that most oil 

furnaces being installed are of low 

efficiency. (NYSERDA, No. 19 at p. 1) 

In response to AHRI and Lennox, as 

stated previously, to develop an 

efficiency distribution in the no-newstandards case, DOE used available 

historical shipments data by efficiency 

for NWOFs/MHOFs and made 

assumptions to disaggregate between 

NWOFs and MHOFs by AFUE. Due to 

limited information for WGF, DOE 

referred to CCD to develop efficiency 

distributions. DOE projected that 

condensing WGFs will continue to 

account for a minimal share of the WGF 

market in the no-new-standards case, 

which aligns with Lennox’s 

characterization of the industry data for 

condensing weatherized gas furnaces. In 

response to NYSERDA, DOE’s estimates 

of efficiency distribution align with the 

findings that most oil furnaces being 

installed are of low efficiency. DOE 

received no other data with which to 

further refine the estimates of the 

efficiency distribution, and as such, 

DOE has not changed its existing 

methodology. 

9. Payback Period Analysis 

The payback period is the amount of 

time it takes the consumer to recover the 

additional installed cost of moreefficient 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 for 

each efficiency level are the change in 

total installed cost of the product and 

the change in the first-year annual 

operating expenditures relative to the 

baseline. The PBP calculation uses the 

same inputs as the LCC analysis, except 

that discount rates are not needed. 

EPCA 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 first year’s energy 

savings resulting from the standard, as 

calculated under the applicable test 

procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) 

For each considered efficiency level, 

DOE determined the value of the first 

year’s energy savings by calculating the 

energy savings in accordance with the 

applicable DOE test procedure, and 

multiplying those savings by the average 

energy price projection for the year in 

which compliance with the amended 

standards would be required. 

F. Shipments Analysis 

DOE uses projections of annual 

product shipments to calculate the 

national impacts of potential amended 

or new energy conservation standards 

on energy use, NPV, and future 

manufacturer cash flows.55 The 

shipments model takes an accounting 

approach in tracking market shares of 

each product class and the vintage of 

units in the stock. Stock accounting uses 

product shipments as inputs to estimate 

the age distribution of in-service 

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. 

Lennox commented that DOE likely 

overstates shipments for gas furnaces. 

Lennox commented that the NWGF 

rulemaking and this rulemaking may 

significantly reduce the market shares of 

these products. (Lennox, No. 26 at p. 2) 

Lennox commented that NWOFs and 

EFs are each less than one percent of the 

consumer furnace market. (Id. at p. 1) 

Lennox stated that DOE’s projections of 

a growing market for residential 

furnaces are inconsistent with federal 

and state policy efforts to electrify space 

heating in residences. (Lennox, No. 26 

at p. 2) Lennox commented that 

decarbonization efforts to electrify space 

heating will have impacts on both the 

total market for furnaces, as well as the 

categories thereof. (Id.) Lennox 

commented that States such as 

California and New York, which 

represent approximately 8 to 12 percent 

of the annual furnace shipments, are 

implementing plans to completely 

electrify space heating as soon as 2030. 

(Id.) In addition, Lennox stated that 

furnace costs are likely to increase, 

resulting in a reduction in the market. 

(Id. at p. 3) Lennox commented that the 

information presented in the 

preliminary TSD similarly indicates a 

growing market for furnaces, in contrast 

to federal, state, and local efforts to 

decarbonize space heating. Lennox 

commented that gas furnace shipments 

will decline in the time period 

associated with this rulemaking, and 

further DOE action should reflect a 

substantial reduction in the market for 

furnaces that consume fossil fuels. (Id. 

at p. 8) 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83453 

56The 2022 update includes heat pumps as a 

performance standard baseline for water heating or 

space heating in single-family homes, as well as 

space heating in multi-family homes. Under the 

California Code, builders will need to either include 

one high-efficiency heat pump in new constructions 

or subject those buildings to more-stringent energy 

efficiency standards. 

57See ww2.arb.ca.gov/resources/documents/ 

2022-state-strategy-state-implementation-plan2022-state-sip-strategy (Last accessed June 2, 2023). 

58Based on currently adopted policies and 

incentives, DOE estimated a lower saturation in the 

new construction market and a higher product 

switching rate for the replacement market for gas 

and oil furnaces for the NOPD shipments analysis. 

This change resulted in a decrease of 11 percent for 

WGFs, 62 percent for NWOF, and 68 percent for 

MHOF for the no-new-standards case projection of 

total shipments between 2030 and 2059 compared 

to the preliminary analysis. 

59The NIA accounts for impacts in the U.S. and 

U.S. territories. 

60For the NIA, DOE adjusts the installed cost data 

from the LCC analysis to exclude sales tax, which 

is a transfer. 

In response, DOE notes that 

assumptions made in the November 

2022 Preliminary Analysis regarding 

future policies encouraging 

electrification of households were 

speculative at that time, so such policies 

were not incorporated into the 

shipments projection. Consequently, 

DOE’s market share and shipments 

projections in the November 2022 

Preliminary Analysis reflected the best 

information available to DOE at that 

time. For the NOPD, DOE accounted for 

the 2022 update to Title 24 in 

California 56 and also the decision of the 

California Public Utilities Commission 

to eliminate ratepayer subsidies for the 

extension of new gas lines beginning in 

July 2023. Together, these policies are 

expected to lead to the eventual phaseout of gas furnaces in new single-family 

homes in California. The California Air 

Resources Board has adopted a 2022 

State Strategy for the State 

Implementation Plan that would 

effectively ban sales of new gas furnaces 

beginning in 2030.57 However, because 

a final decision on a rule would not 

happen until 2025, DOE did not include 

this latter policy in its analysis for this 

NOPD. 

DOE understands that ongoing 

electrification policies at the federal, 

State, and local levels are likely to 

encourage installation of heat pumps in 

some new homes and adoption of heat 

pumps in some homes that currently 

use gas or oil-fired furnaces. However, 

there are many uncertainties about the 

timing and effects of these policies that 

make it difficult to fully account for 

their likely impact on gas or oil furnaces 

market shares in the time frame for this 

analysis (i.e., 2030 through 2059). 

Nonetheless, DOE has modified some of 

its projections to attempt to account for 

impacts that are most likely in the 

relevant time frame.58 These changes 

result in a decrease of shipments in the 

no-new-standards case in 2030 

compared to the November 2022 

Preliminary Analysis, with a 

corresponding decrease in estimated 

energy savings resulting from the 

standards. DOE acknowledges that 

electrification policies may result in a 

larger decrease in shipments of gas 

furnaces than projected in this NOPD, 

especially if stronger policies are 

adopted in coming years. However, this 

would occur in the no-new amended 

standards case and, thus, would only 

reduce the energy savings estimated in 

this NOPD. 

G. National Impact Analysis 

The NIA assesses the NES and the 

NPV from a national perspective of total 

consumer costs and savings that would 

be expected to result from new or 

amended energy conservation standards 

at specific efficiency levels.59

(‘‘Consumer’’ in this context refers to 

consumers of the product being 

regulated.) DOE calculates the NES and 

NPV for the potential standard levels 

considered based on projections of 

annual product shipments, along with 

the annual energy consumption and 

total installed cost data from the energy 

use and LCC analyses.60 For the present 

analysis, DOE projected the energy 

savings, operating cost savings, product 

costs, and NPV of consumer benefits 

over the lifetime of oil and weatherized 

gas furnaces sold from 2030 through 

2059. 

DOE evaluates the effects of new or 

amended standards by comparing a case 

without such standards with standardscase projections. The no-new-standards 

case characterizes energy use and 

consumer costs for each product class in 

the absence of new or amended energy 

conservation standards. For this 

projection, DOE considers historical 

trends in efficiency and various forces 

that are likely to affect the mix of 

efficiencies over time. DOE compares 

the no-new-standards case with 

projections characterizing the market for 

each product class if DOE adopted new 

or amended standards at specific energy 

efficiency levels (i.e., the ELs or 

standards cases) for that class. For the 

standards cases, DOE considers how a 

given standard would likely affect the 

market shares of products with 

efficiencies greater than the standard. 

DOE uses a spreadsheet model to 

calculate the energy savings and the 

national consumer costs and savings 

from each EL. Interested parties can 

review DOE’s analyses by changing 

various input quantities within the 

spreadsheet. The NIA spreadsheet 

model uses typical values (as opposed 

to probability distributions) as inputs. 

Table IV.17 summarizes the inputs 

and methods DOE used for the NIA 

analysis for the NOPD. Discussion of 

these inputs and methods follows the 

table. See chapter 10 of the November 

2022 Preliminary Analysis TSD for 

details. 

TABLE IV.17—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS

Input Method 

Shipments ........................................................... Annual shipments from shipments model. 

Modeled Compliance Date of Standard ............. 2030. 

Efficiency Trends ................................................ No-new-standards case: Based on historical data. 

Standards cases: Roll-up in the compliance year and then DOE estimated growth in shipmentweighted efficiency in all the standards cases, except max-tech. 

Annual Energy Consumption per Unit ................ Annual weighted-average values are a function of energy use at each EL. Incorporates projection of future energy use based on AEO2023 projections for HDD/CDD and building shell efficiency index. 

Total Installed Cost per Unit ............................... Annual weighted-average values are a function of cost at each EL. 

Incorporates projection 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 weighted-average values increase for condensing levels. 

Energy Prices ..................................................... AEO2023 projections (to 2050) and extrapolation after 2050. 

Energy Site-to-Primary and FFC Conversion ..... A time-series conversion factor based on AEO2023. 


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83454 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

61For more information on NEMS, refer to The 

National Energy Modeling System: An Overview 

May 2023, DOE/EIA, May 2023 (Available at: 

www.eia.gov/analysis/pdfpages/ 

0581(2009)index.php) (Last accessed June 27, 

2023). 

TABLE IV.17—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS—Continued 

Input Method 

Discount Rate ..................................................... Three percent and seven percent. 

Present Year ....................................................... 2023. 

1. Product Efficiency Trends 

A key component of the NIA is the 

trend in energy efficiency projected for 

the no-new-standards case and each of 

the standards cases. Section IV.E.8 of 

this document describes how DOE 

developed an energy efficiency 

distribution for the no-new-standards 

case (which yields a shipment-weighted 

average efficiency) for each of the 

considered product classes for the year 

of anticipated compliance with an 

amended or new standard (2030). 

For the standards cases, DOE used a 

‘‘roll-up’’ scenario to establish the 

shipment-weighted efficiency for the 

year that standards are assumed to 

become effective (2030). In this 

scenario, the market shares of products 

in the no-new-standards case that do not 

meet the standard under consideration 

would ‘‘roll up’’ to meet the new 

standard level, and the market share of 

products above the standard would 

remain unchanged. 

To develop standards case efficiency 

trends after 2030, DOE estimated growth 

in shipment-weighted efficiency in the 

standards cases, except in the max-tech 

standards case. 

2. National Energy Savings 

The NES analysis involves a 

comparison of national energy 

consumption of the considered products 

between each potential standards case 

(EL) and the case with no new or 

amended energy conservation 

standards. DOE calculated the national 

energy consumption by multiplying the 

number of units (stock) of each product 

(by vintage or age) by the unit energy 

consumption (also by vintage). DOE 

calculated annual NES based on the 

difference in national energy 

consumption for the no-new-standards 

case and for each higher-efficiency 

standard case. DOE estimated energy 

consumption and savings based on site 

energy and converted the electricity 

consumption and savings to primary 

energy (i.e., the energy consumed by 

power plants to generate site electricity) 

using annual conversion factors derived 

from AEO2023. For natural gas and 

LPG, DOE assumed that site energy 

consumption is the same as primary 

energy consumption. Cumulative energy 

savings are the sum of the NES for each 

year over the timeframe of the analysis. 

Use of higher-efficiency products is 

sometimes associated with a direct 

rebound effect, which refers to an 

increase in utilization of the product 

due to the increase in efficiency. For oil 

and weatherized gas furnaces, DOE 

applied a rebound effect of 15 percent 

for residential applications by reducing 

the site energy savings (and the 

associated primary and FFC energy 

savings). However, for commercial 

applications, DOE applied no rebound 

effect in order to be consistent with 

other recent standards rulemakings. 

In 2011, in response to the 

recommendations of a committee on 

‘‘Point-of-Use and Full-Fuel-Cycle 

Measurement Approaches to Energy 

Efficiency Standards’’ appointed by the 

National Academy of Sciences, DOE 

announced its intention to use FFC 

measures of energy use and greenhouse 

gas and other emissions in the NIA and 

emissions analyses included in future 

energy conservation standards 

rulemakings. 76 FR 51281 (August 18, 

2011). After evaluating the approaches 

discussed in the August 18, 2011 notice, 

DOE published a statement of amended 

policy in which DOE explained its 

determination that EIA’s National 

Energy Modeling System (‘‘NEMS’’) is 

the most appropriate tool for its FFC 

analysis and its intention to use NEMS 

for that purpose. 77 FR 49701 (August 

17, 2012). NEMS is a public domain, 

multi-sector, partial equilibrium model 

of the U.S. energy sector 61 that EIA uses 

to prepare its Annual Energy Outlook. 

The FFC factors incorporate losses in 

production and delivery in the case of 

natural gas (including fugitive 

emissions) and additional energy used 

to produce and deliver the various fuels 

used by power plants. The general 

approach used for deriving FFC 

measures of energy use and emissions is 

described in appendix 10B of the 

November 2022 Preliminary Analysis 

TSD. 

3. Net Present Value Analysis 

The inputs for determining the NPV 

of the total costs and benefits 

experienced by consumers are: (1) total 

annual installed cost; (2) total annual 

operating costs (energy costs and repair 

and maintenance costs), and (3) a 

discount factor to calculate the present 

value of costs and savings. DOE 

calculates net savings each year as the 

difference between the no-newstandards case and each standards case 

in terms of total savings in operating 

costs versus total increases in installed 

costs. DOE calculates operating cost 

savings over the lifetime of each product 

shipped during the projection period. 

As discussed in section IV.E.1 of this 

document, DOE developed oil and 

weatherized gas furnace price trends 

based on historical PPI data and 

cumulative shipments. DOE applied the 

same trends to project prices for each 

product class at each considered 

efficiency level. By 2059, which is the 

end date of the projection period, the 

average oil and weatherized gas furnace 

price is projected to drop 17 percent 

relative to 2022. DOE’s projection of 

product prices is described further in 

chapter 10 of the November 2022 

Preliminary Analysis TSD. 

The operating cost savings are 

calculated as energy cost savings minus 

any repair and maintenance cost 

increases. Energy cost savings are 

calculated using the estimated energy 

savings in each year and the projected 

price of the appropriate form of energy. 

To estimate energy prices in future 

years, DOE multiplied the nationalaverage energy prices derived in the 

LCC analysis by the projection of annual 

national-average residential (or 

commercial, as appropriate) energy 

price changes in the Reference case from 

AEO2023, which has an end year of 

2050. To estimate price trends after 

2050, DOE used the average annual rate 

of change in prices from 2046 through 

2050. Repair and maintenance cost for 

each of the efficiency levels is 

calculated in the LCC, and repair and 

maintenance cost increases are 

calculated as the repair and 

maintenance cost differential between 

efficiency levels. 

In calculating the NPV, DOE 

multiplies the net savings in future 

years by a discount factor to determine 

their present value. For this NOPD, DOE 

estimated the NPV of consumer benefits 

using both a 3-percent and a 7-percent 

real discount rate. DOE uses these 

discount rates in accordance with 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83455 

62United States Office of Management and 

Budget, Circular A–4: Regulatory Analysis (Sept. 17, 

2003) Section E (Available at: www.whitehouse.gov/ omb/information-for-agencies/circulars/) (Last 

accessed June 28, 2023). 

guidance provided by the Office of 

Management and Budget (‘‘OMB’’) to 

federal agencies on the development of 

regulatory analysis.62 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 

‘‘social rate of time preference,’’ which 

is the rate at which society discounts 

future consumption flows to their 

present value. 

V. Analytical Results and Conclusions 

The following section addresses the 

results from DOE’s analyses with 

respect to the considered energy 

conservation standards for oil and 

weatherized gas furnaces. It addresses 

the ELs examined by DOE (see section 

IV.B.1 of this document) and the 

projected impacts of each of these levels 

if adopted as energy conservation 

standards for the subject furnaces. 

Additional details regarding DOE’s 

analyses are contained in the November 

2022 Preliminary Analysis TSD 

supporting this document. 

A. Economic Impacts on Individual 

Consumers 

DOE analyzed the cost-effectiveness 

(i.e., the savings in operating costs 

throughout the estimated average life of 

oil and weatherized gas furnaces 

compared to any increase in the price 

of, or in the initial charges for, or 

maintenance expenses of, oil and 

weatherized gas furnaces which are 

likely to result from the imposition of a 

standard) at an EL by considering the 

LCC and PBP at each EL. These analyses 

are discussed in the following sections. 

In general, higher-efficiency products 

can affect consumers in two ways: (1) 

purchase price increases and (2) annual 

operating costs decrease. Inputs used for 

calculating the LCC and PBP include 

total installed costs (i.e., product price 

plus installation costs), and operating 

costs (i.e., annual energy use, energy 

prices, energy price trends, repair costs, 

and maintenance costs). The LCC 

calculation also uses product lifetime 

and a discount rate. Chapter 8 of the 

November 2022 Preliminary Analysis 

TSD provides detailed information on 

the LCC and PBP analyses. 

Table V.1 to Table V.6 show the 

average LCC and PBP results for the ELs 

considered in this analysis for oil and 

weatherized gas furnaces, respectively. 

In the first of each pair of tables, the 

simple payback is measured relative to 

the baseline product. In the second 

table, the impacts are measured relative 

to the efficiency distribution in the in 

the no-new-standards case in the 

compliance year (see section IV.E.8 of 

this document). The LCC and PBP 

results for oil and weatherized gas 

furnaces include both residential and 

commercial users. Because some 

consumers purchase products with 

higher efficiency in the no-newstandards case, the average savings are 

less than the difference between the 

average LCC of the baseline product and 

the average LCC at each EL. The savings 

refer only to consumers who are affected 

by a standard at a given EL. Those who 

already purchase a product with 

efficiency at or above a given EL are not 

affected. Consumers for whom the LCC 

increases at a given EL experience a net 

cost. 

TABLE V.1—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR NWOF 

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 4,333 2,132 32,211 36,544 ........................ 22.2 

1 ............................................................... 4,392 2,086 31,528 35,920 1.3 22.2 

2 ............................................................... 4,451 2,043 30,876 35,327 1.3 22.2 

3 ............................................................... 5,898 1,920 29,212 35,110 7.4 22.2 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 

TABLE V.2—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR NWOF 

Efficiency level 

Life-cycle cost savings 

Average LCC 

savings * 

(2022$) 

Percentage of 

consumers 

that 

experience 

net cost 

(%) 

1 ............................................................................................................................................................................... 608 0.5 

2 ............................................................................................................................................................................... 820 1.4 

3 ............................................................................................................................................................................... 1,015 37.0 

Note: The savings represent the average LCC for affected consumers. 


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83456 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

TABLE V.3—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR MHOF 

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 3,377 1,142 17,913 21,290 ........................ 22.6 

1 ............................................................... 3,465 1,107 17,371 20,836 2.5 22.6 

2 ............................................................... 3,523 1,085 17,030 20,553 2.5 22.6 

3 ............................................................... 3,581 1,063 16,705 20,286 2.6 22.6 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 

TABLE V.4—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MHOF 

Efficiency level 

Life-cycle cost savings 

Average LCC 

savings *

(2022$) 

Percentage of 

consumers 

that 

experience 

net cost 

(%) 

1 ............................................................................................................................................................................... 452 0.8 

2 ............................................................................................................................................................................... 724 0.9 

3 ............................................................................................................................................................................... 971 1.0 

Note: The savings represent the average LCC for affected consumers. 

TABLE V.5—AVERAGE LCC AND PBP RESULTS BY EFFICIENCY LEVEL FOR WGF 

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 5,533 471 7,215 12,748 ........................ 20.6 

1 ............................................................... 5,822 433 6,698 12,519 7.5 20.6 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 

TABLE V.6—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR WGF 

Efficiency level 

Life-cycle cost savings 

Average LCC 

savings * 

(2022$) 

Percentage of 

consumers 

that 

experience 

net cost 

(%) 

1 ............................................................................................................................................................................... 223 40.4 

Note: The savings represent the average LCC for affected consumers. 

NYSERDA commented that DOE does 

not specifically mention the types of 

consumer subgroups to be included in 

the analysis of this rulemaking. 

NYSERDA recommended that DOE 

include low-income customers as one of 

the subgroups for this analysis and 

include the percentage of monthly 

income spent on energy bills. 

(NYSERDA, No. 19 at p. 2) NYSERDA 

mentioned that the NWGF/MHGF 

rulemaking analysis found that a morestringent standard was especially 

beneficial to low-income and senioronly households as compared to the 

overall population. The commenter 

argued that renters who pay their own 

energy bills will particularly benefit. 

NYSERDA encouraged DOE to continue 

such analysis for this rulemaking, as it 

anticipates a similar outcome to the 

NWGF/MHGF rulemaking. (Id. at pp. 

2–3) 

In response, because DOE has 

tentatively determined that amended 

standards for the products considered in 

this NOPD would not be economically 

justified, DOE has not conducted a 

consumer subgroup analysis. 


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63U.S. Office of Management and Budget, 

Circular A–4: Regulatory Analysis (Sept. 17, 2003) 

(Available at: https://www.whitehouse.gov/omb/ 

information-for-agencies/circulars/) (Last accessed 

June 1, 2023). 

64EPCA requires DOE to review its standards at 

least once every 6 years, and requires, for certain 

products, 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 

previous standards. (42 U.S.C. 6295(m)) If DOE 

makes a determination that amended standards are 

not needed, it must conduct a subsequent review 

within three years following such a determination. 

As DOE is evaluating the need to amend the 

standards, the sensitivity analysis is based on the 

review timeframe associated with amended 

standards. 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 may not be appropriate 

given the variability that occurs in the timing of 

standards reviews and the fact that for some 

products, the compliance period is 5 years rather 

than 3 years. 

NYSERDA encouraged DOE to report 

the fraction of customers who pay less 

than six percent of their monthly 

income in energy bills at each EL. The 

commenter asserted that such fraction 

would continue to increase at each EL 

with more-stringent standards, adding 

that this approach presents a more 

comprehensive framework to look at 

energy burdens reduced by appliance 

standards. NYSERDA recommended 

that this statistic should be a routine 

part of DOE’s LCC subgroups analysis, 

especially for appliances involving 

natural gas and oil. (NYSERDA, No. 19 

at p. 3) 

As noted previously, DOE is not 

conducting a consumer subgroup 

analysis for this NOPD, but the 

Department may consider NYSERDA’s 

recommendation as part of a future 

rulemaking. 

B. National Impact Analysis 

This section presents DOE’s estimates 

of the NES and the NPV of consumer 

benefits that would result from each of 

the ELs considered as potential 

amended standards. 

1. Significance of Energy Savings 

To estimate the energy savings 

attributable to potential amended 

standards for oil and weatherized gas 

furnaces, DOE compared their energy 

consumption under the no-newstandards case to their anticipated 

energy consumption under each EL. The 

savings are measured over the entire 

lifetime of products purchased in the 

30-year period that begins in the year of 

anticipated compliance with amended 

standards (2030–2059). Table V.7 

presents DOE’s projections of the NES 

for each EL considered for oil and 

weatherized gas furnaces. The savings 

were calculated using the approach 

described in section IV.G of this 

document. 

TABLE V.7—CUMULATIVE NATIONAL ENERGY SAVINGS FOR OIL AND WEATHERIZED GAS FURNACES; 30 YEARS OF

SHIPMENTS

[2030–2059] 

Product class 

Efficiency level 

1 2 3 

FFC Energy savings (quads) 

Non-Weatherized Oil Furnace ..................................................................................................... 0.004 0.01 0.05 

Mobile Home Non-Weatherized Oil Furnace .............................................................................. 0.0004 0.001 0.001 

Weatherized Gas Furnace ........................................................................................................... 0.66 ........................ ........................

OMB Circular A–4 63 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. For this proposed 

determination, DOE undertook a 

sensitivity analysis using nine years, 

rather than 30 years, of product 

shipments. The choice of a nine-year 

period is a proxy for the timeline in 

EPCA for the review of certain energy 

conservation standards and potential 

revision of and compliance with such 

revised standards.64 The review 

timeframe established in EPCA is 

generally not synchronized with the 

product lifetime, product manufacturing 

cycles, or other factors specific to oil 

and weatherized gas furnaces. Thus, 

such results are presented for 

informational purposes only and are not 

indicative of any change in DOE’s 

analytical methodology. The NES 

sensitivity analysis results based on a 

nine-year analytical period are 

presented in Table V.8. The impacts are 

counted over the lifetime of oil and 

weatherized gas furnaces purchased in 

2030–2038. 

TABLE V.8—CUMULATIVE NATIONAL ENERGY SAVINGS FOR OIL AND WEATHERIZED GAS FURNACES; 9 YEARS OF

SHIPMENTS

[2030–2038] 

Product class 

Efficiency level 

1 2 3 

FFC Energy savings (quads) 

Non-Weatherized Oil Furnace ..................................................................................................... 0.002 0.01 0.02 

Mobile Home Non-Weatherized Oil Furnace .............................................................................. 0.0002 0.0004 0.001 

Weatherized Gas Furnace ........................................................................................................... 0.20 ........................ ........................


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65U.S. Office of Management and Budget, 

Circular A–4: Regulatory Analysis (Sept. 17, 2003) 

(Available at: obamawhitehouse.archives.gov/omb/ 

circulars_a004_a-4/) (Last accessed June 1, 2023). 

2. Net Present Value of Consumer Costs 

and Benefits 

DOE estimated the cumulative NPV of 

the total costs and savings for 

consumers that would result from the 

ELs considered for oil and weatherized 

gas furnaces. In accordance with OMB’s 

guidelines on regulatory analysis,65

DOE calculated NPV using both a 7- 

percent and a 3-percent real discount 

rate. Table V.9 shows the consumer 

NPV results with impacts counted over 

the lifetime of products purchased in 

2030–2059. 

TABLE V.9—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR OIL AND WEATHERIZED GAS FURNACES; 30 

YEARS OF SHIPMENTS

[2030–2059] 

Discount rate Product class 

Efficiency level (EL) 

1 2 3 

Billion 2022$ 

3% .......................................... Non-Weatherized Oil Furnace ................................................ 0.06 0.20 0.20 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.01 0.01 0.01 

Weatherized Gas Furnace ...................................................... 1.88 ........................ ........................

7% .......................................... Non-Weatherized Oil Furnace ................................................ 0.02 0.08 0.03 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.002 0.003 0.005 

Weatherized Gas Furnace ...................................................... 0.45 ........................ ........................

The NPV results based on the 

aforementioned nine-year analytical 

period are presented in Table V.10. The 

impacts are counted over the lifetime of 

oil and weatherized gas furnaces 

purchased in 2030–2038. As mentioned 

previously, such results are presented 

for informational purposes only and are 

not indicative of any change in DOE’s 

analytical methodology or decision 

criteria. 

TABLE V.10—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR OIL AND WEATHERIZED GAS FURNACES; 9 

YEARS OF SHIPMENTS

[2030–2038] 

Discount 

rate Product class 

Efficiency level (EL) 

1 2 3 

Billion 2022$ 

3% .......................................... Non-Weatherized Oil Furnace ................................................ 0.03 0.11 0.12 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.003 0.01 0.01 

Weatherized Gas Furnace ...................................................... 0.67 ........................ ........................

7% .......................................... Non-Weatherized Oil Furnace ................................................ 0.02 0.05 0.02 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.002 0.003 0.004 

Weatherized Gas Furnace ...................................................... 0.22 ........................ ........................

C. Proposed Determination 

After carefully considering the 

comments on the November 2022 

Preliminary Analysis and the available 

data and information, DOE has 

tentatively determined that the energy 

conservation standards for oil, electric, 

and weatherized gas furnaces do not 

need to be amended, for the reasons 

explained in the paragraphs 

immediately following. DOE will 

consider all comments received on this 

proposed determination prior to issuing 

the next document in this rulemaking 

proceeding. 

As required by EPCA, this NOPD 

analyzes whether amended standards 

for oil, electric, and weatherized gas 

furnaces would result in significant 

conservation of energy, be 

technologically feasible, and be costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) DOE’s initial 

findings under the enumerated statutory 

criteria and the additional analysis are 

discussed in the paragraphs that 

follows. Because an analysis of potential 

cost-effectiveness and energy savings 

first requires an evaluation of the 

relevant technology, DOE first discusses 

the technological feasibility of amended 

standards. DOE then addresses the costeffectiveness and energy savings 

associated with potential amended 

standards for the subject furnaces. 

1. Technological Feasibility 

EPCA mandates that DOE consider 

whether amended energy conservation 

standards for oil, electric, and 

weatherized gas furnaces would be 

technologically feasible. (42 U.S.C. 

6295(m)(1)(A) and 42 U.S.C. 

6295(n)(2)(B)) DOE has tentatively 

determined that there are technology 

options that would improve the 

efficiency of oil and weatherized gas 

furnaces. These technology options are 

being used in commercially available oil 

and weatherized gas furnaces and, 

therefore, are technologically feasible. 

(See section IV.A.3 of this document for 

further information.) Hence, DOE has 

tentatively determined that amended 

energy conservation standards for oil 

and weatherized gas furnaces are 

technologically feasible. However, as 

discussed in section IV.A.1.a of this 

document, DOE is not aware of any 

technology options that would improve 

the efficiency of electric furnaces. 


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Therefore, DOE has tentatively 

determined that amended energy 

conservation standards for electric 

furnaces are not technologically 

feasible. 

2. Cost-Effectiveness 

EPCA requires DOE to consider 

whether energy conservation standards 

for oil and weatherized gas furnaces 

would be cost-effective through an 

evaluation of the savings in operating 

costs throughout the estimated average 

life of the covered product compared to 

any increase in the price of, or in the 

initial charges for, or maintenance 

expenses of, the covered products 

which are likely to result from the 

imposition of an amended standard. (42 

U.S.C. 6295(m)(1)(A), 42 U.S.C. 

6295(n)(2)(C), and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) DOE conducted an 

LCC analysis to estimate the net costs/ 

benefits to users from increased 

efficiency in the considered oil and 

weatherized gas furnace product classes. 

As shown in Table V.1 through Table 

V.6, for all product classes, all of the 

considered efficiency levels result in 

positive LCC savings, with the 

percentage of consumers experiencing 

net cost ranging from 0.5 percent at EL 

1 to 37 percent at max-tech for NWOF, 

approximately 1 percent at all ELs for 

MHOF, and 40 percent at the only 

considered efficiency level for WGF. 

DOE then aggregated the results from 

the LCC analysis to estimate the NPV of 

the total costs and benefits experienced 

by the Nation. (See results in Table V.9 

and Table V.10) As noted, the inputs for 

determining the NPV are: (1) total 

annual installed cost; (2) total annual 

operating costs (energy costs and repair 

and maintenance costs), and (3) a 

discount factor to calculate the present 

value of costs and savings. 

3. Significant Conservation of Energy 

EPCA also mandates that DOE 

consider whether amended energy 

conservation standards for oil and 

weatherized gas furnaces would result 

in significant conservation of energy. 

(42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 

6295(n)(2)(A)) 

To estimate the energy savings 

attributable to potential amended 

standards for oil and weatherized gas 

furnaces, DOE compared their energy 

consumption under the no-newstandards case to their anticipated 

energy consumption under each 

potential standard level. The savings are 

measured over the entire lifetime of 

products purchased in the 30-year 

period that begins in the year of 

anticipated compliance with amended 

standards (2030–2059). 

As shown in Table V.7, DOE estimates 

that amended standards would results 

in FFC energy savings of 0.004 quads at 

EL 1 to 0.05 quads at max-tech level for 

non-weatherized oil furnaces, 0.0004 

quads at EL 1 to 0.001 quads at maxtech level for mobile home nonweatherized oil furnaces, and 0.66 

quads at EL 1 (max-tech level) for 

weatherized gas furnaces, over a 30-year 

analysis period (2030–2059). 

4. Further Considerations 

Oil Furnaces 

DOE estimates that the shipments of 

NWOFs and MHOFs have declined by 

more than 70 percent over the past 20 

years and only accounted for less than 

one percent of the overall consumer 

furnace market in the past 10 years. 

DOE considered this declining trend 

and the small market share for oil 

furnaces in the furnace shipments 

model and projected that the shipments 

of NWOFs and MHOFs will continue to 

decline over the analysis period (i.e., 

2030–2059). DOE also considered that 

the shipments of NWOFs and MHOFs 

could decline faster than current 

projections, which may lead to further 

reductions in energy savings from 

potential amended standards. 

As the oil furnace market contracted, 

the industry has seen consolidation. 

DOE estimates there were 11 OEMs of 

NWOF selling into the U.S. market at 

the time of the June 2011 DFR that set 

current standard levels for oil furnaces. 

Since then, manufacturers have merged, 

been acquired, and left the market. 

Currently there are seven OEMs of 

NWOF selling into the U.S. market. 

DOE estimated the NWOF market to 

be approximately 36,000 units per year 

and the MHOF market to be 

approximately 2,000 units per year in 

2023. These products together are less 

than one percent of the overall U.S. 

residential furnace market, which is 

approximately 4.2 million shipments 

per year in 2023. The size of the market 

could make cost recovery challenging 

for manufacturers. With the small 

market size and continued trend of 

diminishing sales, the timeframe for 

recouping investments may be longer 

than acceptable for manufacturers. 

Given the small role of oil furnaces in 

the overall furnace market and the low 

sales relative to the consumer boiler and 

consumer water heater markets, 

manufacturers may de-prioritize 

updates for these product classes. The 

existing oil-fired furnace market 

currently has a diversity of competitors; 

however, the loss of a few 

manufacturers could lead to shifts in 

market competition. 

Weatherized Gas Furnaces 

DOE estimates that the shipments of 

WGFs have been approximately 0.35 

million per year for the past 10 years 

and accounted for approximately 7 

percent of the overall consumer furnace 

market over the past 20 years. DOE 

considered the small market share for 

WGFs in the furnace shipments model 

and projected that the shipments of 

WGFs will be approximately flat and 

account for less than 8 percent of the 

overall consumer furnace market over 

the analysis period (i.e., 2030–2059). 

DOE also considered that the shipments 

of WGFs could be less than current 

projections, which may lead to 

reductions in energy savings from 

potential amended standards. 

WGFs have the largest potential 

energy savings of the product classes in 

this rulemaking. However, DOE 

recognizes challenges for the industry at 

the max-tech level, which requires 

condensing furnace designs. DOE 

identified eight OEMs of weatherized 

gas furnaces. Only one OEM offers 

models that can meet the max-tech 

level. Models that meet the max-tech 

level account for 1 percent of all WGF 

listings. 

All other OEMs would need to invest 

in new WGF designs to meet a 

condensing efficiency level. DOE 

expects that developing a new 

condensing model lines would require 

significant investment. If manufacturers 

plan to continue offering the same 

diversity of models, they would need to 

redesign nearly 1,500 basic models, or 

99 percent of what is available on the 

market today. Designing condensing 

models would require the incorporation 

of a secondary heat exchanger and 

condensate management system. 

Manufacturers would likely need to 

reconfigure their existing heat 

exchanger to optimize airflow over the 

secondary heat exchanger, which could 

require investments in product redesign 

and retooling for hard-tooled portions of 

the heat exchanger. Manufacturers may 

also have to choose between adding the 

secondary heat exchanger within the 

physical limitations of the existing 

chassis dimension or adopting a new 

chassis size, which has the potential to 

be capital intensive. The added 

production of the secondary heat 

exchanger could necessitate additional 

floor space and increased assembly and 

fabrication times. 

DOE observed that the range of 

heating capacities offered at EL 1 do not 

cover the same range of capacities as 

non-condensing models. Condensing 

WGF models range from 60 to 96 kBtu/ 

h, whereas non-condensing WGF 


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models span capacities from 40 to 150 

kBtu/h. DOE is concerned that amended 

standards for WGFs may limit capacity 

availability for consumers. 

5. Summary 

As discussed previously, a 

determination that amended standards 

are not needed must be based on 

consideration of whether amended 

standards will result in significant 

conservation of energy, are 

technologically feasible, and are costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) Additionally, DOE 

can only propose an amended standard 

if it is, among other things, 

economically justified. (42 U.S.C. 

6295(m)(1)(B); 42 U.S.C. 6295(o)(2)(A)) 

As explained elsewhere in this 

document, DOE has tentatively 

determined that amended energy 

conservation standards for electric 

furnaces are not technologically 

feasible. Oil-fired furnaces and WGFs 

have relatively small markets and 

shipments of these products are 

expected to flatten or decline; 

manufacturers facing increased 

standards for these product categories 

may opt to focus on products with larger 

market shares, resulting in certain 

products or capacities becoming 

unavailable for consumers as well as 

further consolidation of the market. 

Consequently, DOE has tentatively 

determined that it is unable to conclude 

that amended standards for oil-fired 

furnaces and WGFs would be 

economically justified. For these 

reasons, as well as those discussed 

throughout this notice, DOE is unable to 

conclude that amended standards for 

furnaces at any of the efficiency levels 

analyzed would meet the applicable 

statutory criteria. Therefore, DOE has 

tentatively determined that energy 

conservation standards for oil, electric, 

and weatherized gas furnaces do not 

need to be amended at this time. 

DOE requests comments on its 

proposed determination that the 

existing energy conservation standards 

for oil, electric, and weatherized gas 

furnaces do not need to be amended. 

DOE will consider all comments 

received on this proposed determination 

before issuing the next document in this 

proceeding. 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866, 13563, and 14094 

Executive Order (‘‘E.O.’’) 12866, 

‘‘Regulatory Planning and Review,’’ 58 

FR 51735 (Oct. 4, 1993), as 

supplemented and reaffirmed by E.O. 

13563, ‘‘Improving Regulation and 

Regulatory Review,’’ 76 FR 3821 (Jan. 

21, 2011) and amended by E.O. 14094, 

‘‘Modernizing Regulatory Review,’’ 88 

FR 21879 (April 11, 2023), requires 

agencies, to the extent permitted by law, 

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 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 E.O. 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 

(‘‘OIRA’’) in the Office of Management 

and Budget (‘‘OMB’’) 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 this preamble, this proposed 

regulatory action is consistent with 

these principles. 

Section 6(a) of E.O. 12866 also 

requires agencies to submit ‘‘significant 

regulatory actions’’ to OIRA for review. 

OIRA has determined that this proposed 

regulatory action does not constitute a 

‘‘significant regulatory action’’ within 

the scope of section 3(f)(1) of E.O. 

12866, as amended by E.O. 14094. 

Accordingly, this action was not 

submitted to OIRA for review under 

E.O. 12866. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis (‘‘IRFA’’) and a final regulatory 

flexibility analysis (‘‘FRFA’’) 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 E.O. 13272, 

‘‘Proper Consideration of Small Entities 

in Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies in the Federal 

Register 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 procedures and 

policies available on the Office of the 

General Counsel’s website (energy.gov/ 

gc/office-general-counsel). 

DOE reviewed this proposed 

determination under the provisions of 

the Regulatory Flexibility Act and the 

policies and procedures published on 

February 19, 2003. Because DOE is 

proposing not to amend standards for 

oil, electric, and weatherized gas 

furnaces, if adopted, the determination 

would not amend any energy 

conservation standards. On the basis of 

the foregoing, DOE certifies that the 

proposed determination, if adopted, 

would not have a significant economic 

impact on a substantial number of small 

entities. Accordingly, DOE has not 

prepared an IRFA for this proposed 

determination. DOE will transmit this 

certification and supporting statement 

of factual basis to the Chief Counsel for 

Advocacy of the Small Business 

Administration for review under 5 

U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act of 1995 

This proposed determination, which 

proposes to determine that amended 

energy conservation standards for oil, 

electric, and weatherized gas furnaces 

are unneeded under the applicable 

statutory criteria, would impose no new 

informational or recordkeeping 

requirements. Accordingly, OMB 

clearance is not required under the 

Paperwork Reduction Act. (44 U.S.C. 

3501 et seq.) 

D. Review Under the National 

Environmental Policy Act of 1969 

DOE is analyzing this proposed action 

in accordance with the National 

Environmental Policy Act of 1969 

(‘‘NEPA’’) and DOE’s NEPA 

implementing regulations (10 CFR part 

1021). DOE’s regulations include a 

categorical exclusion for actions which 

are interpretations or rulings with 

respect to existing regulations. 10 CFR 

part 1021, subpart D, appendix A4. DOE 

anticipates that this action qualifies for 


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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83461 

categorical exclusion A4 because it is an 

interpretation or ruling in regard to an 

existing regulation and otherwise meets 

the requirements for application of a 

categorical exclusion. See 10 CFR 

1021.410. DOE will complete its NEPA 

review before issuing the final action. 

E. Review Under Executive Order 13132 

E.O. 13132, ‘‘Federalism,’’ 64 FR 

43255 (August 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. DOE has examined this proposed 

determination and has tentatively 

determined that it would not have a 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. EPCA governs and 

prescribes federal preemption of state 

regulations as to energy conservation for 

the products that are the subject of this 

proposed determination. 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) Therefore, no further action is 

required by E.O. 13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of E.O. 

12988, ‘‘Civil Justice Reform,’’ 61 FR 

4729 (Feb. 7, 1996), 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; (3) provide a clear legal 

standard for affected conduct rather 

than a general standard, and (4) promote 

simplification and burden reduction. 

Regarding the review required by 

section 3(a), section 3(b) of E.O. 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 proposed 

determination meets the relevant 

standards of E.O. 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 Tribal governments and the 

private sector. Public Law 104–4, sec. 

201 (codified at 2 U.S.C. 1531). For a 

proposed 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 proposed ‘‘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 them. 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 energy.gov/sites/prod/files/ 

gcprod/documents/umra_97.pdf. 

DOE examined this proposed 

determination according to UMRA and 

its statement of policy and determined 

that the proposed determination does 

not contain a federal intergovernmental 

mandate, nor is it expected to require 

expenditures of $100 million or more in 

any one year by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector. As a result, the analytical 

requirements of UMRA do not apply. 

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 

proposed determination 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 

Pursuant to E.O. 12630, 

‘‘Governmental Actions and Interference 

with Constitutionally Protected Property 

Rights,’’ 53 FR 8859 (March 18, 1988), 

DOE has determined that this proposed 

determination 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 information quality 

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). Pursuant to 

OMB Memorandum M–19–15, 

‘‘Improving Implementation of the 

Information Quality Act’’ (April 24, 

2019), DOE published updated 

guidelines which are available at: 

www.energy.gov/sites/prod/files/2019/ 

12/f70/DOE%20Final%

20Updated%20IQA%20Guidelines%20

Dec%202019.pdf. DOE has reviewed 

this NOPD under the OMB and DOE 

guidelines and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

K. Review Under Executive Order 13211 

E.O. 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 the Office of Information and 

Regulatory Affairs (‘‘OIRA’’) at OMB, a 


ddrumheller on DSK120RN23PROD with PROPOSALS2
83462 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 

66 ‘‘Energy Conservation Standards Rulemaking 

Peer Review Report’’ (2007) (Available at: 

energy.gov/eere/buildings/downloads/energyconservation-standards-rulemaking-peer-reviewreport-0) (Last accessed June 26, 2023). 

67The December 2021 NAS report is available at 

www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards (Last accessed June 26, 

2023). 

Statement of Energy Effects for any 

proposed 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 Executive 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 proposed 

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. 

This proposed determination, which 

does not propose to amend energy 

conservation standards for oil, electric, 

and weatherized gas furnaces, is not a 

significant regulatory action under 

Executive Order 12866. Moreover, it 

would not 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. 

Therefore, it is not a significant energy 

action, and accordingly, DOE has not 

prepared a Statement of Energy Effects. 

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.’’ Id. at 70 FR 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and the analyses 

that are typically used and has prepared 

a Peer Review report pertaining to the 

energy conservation standards 

rulemaking analyses.66 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. Because available data, 

models, and technological 

understanding have changed since 2007, 

DOE has engaged with the National 

Academy of Sciences (‘‘NAS’’) to review 

DOE’s analytical methodologies and 

ascertain whether modifications are 

needed to improve DOE’s analyses. DOE 

is in the process of evaluating the 

resulting December 2021 report.67

VII. Public Participation 

A. Participation in the Public Meeting 

Webinar 

DOE will hold a public meeting 

webinar upon receiving a request by the 

deadline identified in the DATES section 

at the beginning of this proposed 

determination. Interested persons may 

submit their request for the public 

meeting webinar to the Appliance and 

Equipment Standards Program at 

OEWGFurnaces2021STD0031@

ee.doe.gov. If a public meeting webinar 

is requested, DOE will release webinar 

registration information, participant 

instructions, and information about the 

capabilities available to webinar 

participants on DOE’s website at: 

www1.eere.energy.gov/buildings/ 

appliance_standards/ 

standards.aspx?productid=59. 

Participants are responsible for ensuring 

their systems are compatible with the 

webinar software. 

B. Submission of Comments 

DOE will accept comments, data, and 

information regarding this proposed 

determination no later than the date 

provided in the DATES section at the 

beginning of this proposed 

determination. Interested parties may 

submit comments, data, and other 

information using any of the methods 

described in the ADDRESSES section at 

the beginning of this document. 

Submitting comments via 

www.regulations.gov. The 

www.regulations.gov web page will 

require you to provide your name and 

contact information. Your contact 

information will be viewable to DOE 

Building Technologies staff only. Your 

contact information will not be publicly 

viewable except for your first and last 

names, organization name (if any), and 

submitter representative name (if any). 

If your comment is not processed 

properly because of technical 

difficulties, DOE will use this 

information to contact you. If DOE 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, DOE may not be 

able to consider your comment. 

However, your contact information 

will be publicly viewable if you include 

it in the comment itself or in any 

documents attached to your comment. 

Any information that you do not want 

to be publicly viewable should not be 

included in your comment, nor in any 

document attached to your comment. 

Otherwise, persons viewing comments 

will see only first and last names, 

organization names, correspondence 

containing comments, and any 

documents submitted with the 

comments. 

Do not submit to www.regulations.gov 

information for which disclosure is 

restricted by statute, such as trade 

secrets and commercial or financial 

information (hereinafter referred to as 

Confidential Business Information 

(‘‘CBI’’)). Comments submitted through 

www.regulations.gov cannot be claimed 

as CBI. Comments received through the 

website will waive any CBI claims for 

the information submitted. For 

information on submitting CBI, see the 

Confidential Business Information 

section. 

DOE processes submissions made 

through www.regulations.gov before 

posting. Normally, comments will be 

posted within a few days of being 

submitted. However, if large volumes of 

comments are being processed 

simultaneously, your comment may not 

be viewable for up to several weeks. 

Please keep the comment tracking 

number that www.regulations.gov 

provides after you have successfully 

uploaded your comment. 

Submitting comments via email, hand 

delivery/courier, or postal mail. 

Comments and documents submitted 

via email, hand delivery/courier, or 

postal mail also will be posted to 

www.regulations.gov. If you do not want 

your personal contact information to be 

publicly viewable, do not include it in 

your comment or any accompanying 

documents. Instead, provide your 

contact information in a cover letter. 

Include your first and last names, email 


ddrumheller on DSK120RN23PROD with PROPOSALS2
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Proposed Rules 83463 

address, telephone number, and 

optional mailing address. With this 

instruction followed, the cover letter 

will not be publicly viewable as long as 

it does not include any comments. 

Include contact information each time 

you submit comments, data, documents, 

and other information to DOE. If you 

submit via postal mail or hand delivery/ 

courier, please provide all items on a 

CD, if feasible, in which case it is not 

necessary to submit printed copies. No 

telefacsimiles (faxes) will be accepted. 

Comments, data, and other 

information submitted to DOE 

electronically should be provided in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format. Provide documents that are not 

secured, that are written in English, and 

that are free of any defects or viruses. 

Documents should not contain special 

characters or any form of encryption, 

and, if possible, they should carry the 

electronic signature of the author. 

Campaign form letters. Please submit 

campaign form letters by the originating 

organization in batches of between 50 to 

500 form letters per PDF or as one form 

letter with a list of supporters’ names 

compiled into one or more PDFs. This 

reduces comment processing and 

posting time. 

Confidential Business Information. 

Pursuant to 10 CFR 1004.11, any person 

submitting information that he or she 

believes to be confidential and exempt 

by law from public disclosure should 

submit via email two well-marked 

copies: one copy of the document 

marked ‘‘confidential’’ including all the 

information believed to be confidential, 

and one copy of the document marked 

‘‘non-confidential’’ with the information 

believed to be confidential deleted. DOE 

will make its own determination about 

the confidential status of the 

information and treat it according to its 

determination. 

It is DOE’s policy that all comments 

may be included in the public docket, 

without change and as received, 

including any personal information 

provided in the comments (except 

information deemed to be exempt from 

public disclosure). 

C. Issues on Which DOE Seeks 

Comment 

Although DOE has not identified any 

specific issues on which it seeks 

comment, DOE welcomes comments on 

any aspect of this proposed 

determination. 

VIII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this notification of 

proposed determination and request for 

comment. 

Signing Authority 

This document of the Department of 

Energy was signed on November 17, 

2023, by Jeffrey Marootian, Principal 

Deputy Assistant Secretary for Energy 

Efficiency and Renewable Energy, 

pursuant to delegated authority from the 

Secretary of Energy. That document 

with the original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

the Department of Energy. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Signed in Washington, DC, on November 

17, 2023. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energy. 

[FR Doc. 2023–25869 Filed 11–28–23; 8:45 am] 

BILLING CODE 6450–01–P 


ddrumheller on DSK120RN23PROD with PROPOSALS2