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Questions below are regarding the spreadsheet EERE-2014-BT-STD-0031-002 unless otherwise noted.

1) The 2011 LCC spreadsheet predicted lower LCC savings, especially for replacements in the south 

region and for the highest efficiency (98%) condensing furnace cases, compared to the 2014 LCC 

spreadsheet even though the 2011 LCC spreadsheet did not include the potential of fuel switching. 

a) What are the major reasons for the significant changes in LCC savings?

b) Why do consumer impacts for replacements in the south not sum to 100% in the 2014 LCC 

spreadsheet?

c) The 2014 LCC spreadsheet predicts first year operations cost savings averaging between $54 

and $88 depending on the mandated efficiency level while the fuel switching impact analysis 

model provided by AGA and dated 7/11/2104 predicts a first year cost increase of $62 even 

though both consider fuel switching impacts. What are potential reasons for this significant 

discrepancy in top level results?
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ME1 19138030v.1

efficiency

2011 

Baseline 

LCC and 

Average 

LCC savings 

2013$

2011 % LCC 

savings

2014 

Baseline 

LCC and 

Average 

LCC 

savings

2014 % LCC 

savings

2011 Net 

Consumer 

Cost

2011 No 

Consumer 

Impact

2011 Net 

Consumer 

Benefit

2014 Net 

Consumer 

Cost

2014 No 

Consumer 

Impact

2014 Net 

Consumer 

Benefit

80% AFUE 12,310 $12,560

90% AFUE 94 0.8% $231 1.8% 25.2% 52.4% 22.4% 100% 21% 47% 32% 100%

92% AFUE 148 1.2% $301 2.4% 26.0% 41.8% 32.2% 100% 19% 41% 39% 100%

95% AFUE 223 1.8% $379 3.0% 36.2% 16.9% 46.9% 100% 24% 23% 52% 100%

98% AFUE 50 0.4% $424 3.4% 64.2% 0.5% 35.4% 100% 41% 0% 59% 100%

 -

80% AFUE 14,609 $15,379

90% AFUE 168 1.2% $209 1.4% 10.0% 71.4% 18.6% 100% 11% 67% 22% 100%

92% AFUE 233 1.6% $281 1.8% 10.9% 56.5% 32.6% 100% 10% 60% 30% 100%

95% AFUE 351 2.4% $374 2.4% 22.8% 22.9% 54.3% 100% 14% 40% 46% 100%

98% AFUE 215 1.5% $456 3.0% 58.7% 0.6% 40.7% 100% 38% 1% 61% 100%

 -

80% AFUE 8,882 $9,383

90% AFUE (14) -0.2% $256 2.7% 47.9% 24.1% 28.0% 100% 33% 24% 43% 100%

92% AFUE 21 0.2% $323 3.4% 48.4% 19.9% 31.7% 100% 30% 20% 50% 100%

95% AFUE 30 0.3% $384 4.1% 56.1% 8.0% 35.9% 100% 35% 5% 60% 100%

98% AFUE (197) -2.2% $389 4.1% 72.3% 0.2% 27.4% 100% 44% 0% 56% 100%

 -

80% AFUE 11,978 $12,059

90% AFUE (12) -0.1% $109 0.9% 31.3% 52.1% 16.6% 100% 28% 46% 19% 92%

92% AFUE 43 0.4% $176 1.5% 31.6% 41.6% 26.8% 100% 25% 41% 26% 92%

95% AFUE 121 1.0% $253 2.1% 41.2% 16.8% 42.0% 100% 28% 26% 39% 93%

98% AFUE (29) -0.2% $302 2.5% 67.1% 0.4% 32.5% 100% 45% 0% 59% 104%

 -

80% AFUE 14,308 $14,924

90% AFUE 98 0.7% $111 0.7% 12.6% 71.8% 15.6% 100% 14% 67% 19% 100%

92% AFUE 164 1.1% $179 1.2% 13.2% 57.0% 29.8% 100% 12% 62% 26% 100%

95% AFUE 285 2.0% $260 1.7% 25.0% 22.8% 52.2% 100% 15% 46% 39% 100%

98% AFUE 172 1.2% $351 2.4% 60.0% 0.5% 39.4% 100% 40% 1% 59% 100%

 -

80% AFUE 8,561 $8,931

90% AFUE (173) -2.0% $106 1.2% 58.8% 23.2% 18.0% 100% 42% 22% 19% 83%

92% AFUE (135) -1.6% $172 1.9% 58.7% 19.0% 22.3% 100% 38% 19% 26% 83%

95% AFUE (120) -1.4% $246 2.8% 65.0% 7.9% 27.1% 100% 41% 5% 39% 86%

98% AFUE (323) -3.8% $249 2.8% 77.5% 0.2% 22.3% 100% 50% 0% 59% 109%

 -

80% AFUE 13,311 $13,405

90% AFUE 416 3.1% $589 4.4% 6.9% 53.3% 39.8% 100% 3% 49% 48% 100%

92% AFUE 466 3.5% $657 4.9% 8.9% 42.4% 48.7% 100% 3% 42% 55% 100%

95% AFUE 529 4.0% $727 5.4% 20.9% 17.4% 61.7% 100% 14% 15% 71% 100%

98% AFUE 287 2.2% $744 5.6% 55.3% 0.7% 44.0% 100% 29% 0% 71% 100%

 -

80% AFUE 15,493 $15,882

90% AFUE 372 2.4% $486 3.1% 2.4% 70.2% 27.5% 100% 2% 65% 33% 100%

92% AFUE 438 2.8% $557 3.5% 4.2% 55.0% 40.8% 100% 2% 56% 42% 100%

95% AFUE 545 3.5% $662 4.2% 16.2% 23.2% 60.6% 100% 12% 24% 63% 100%

98% AFUE 342 2.2% $685 4.3% 54.8% 0.9% 44.4% 100% 33% 1% 67% 100%

 -

80% AFUE 9,891 $10,479

90% AFUE 484 4.9% $709 6.8% 13.9% 26.9% 59.2% 100% 5% 30% 65% 100%

92% AFUE 510 5.2% $776 7.4% 16.3% 22.8% 60.9% 100% 5% 24% 71% 100%

95% AFUE 503 5.1% $804 7.7% 28.2% 8.4% 63.4% 100% 15% 4% 81% 100%

98% AFUE 200 2.0% $814 7.8% 56.2% 0.4% 43.4% 100% 24% 0% 76% 100%

North - New 

Construction

South - New 

Construction

National - All 

Installations

North - All 

Installations

South - All 

Installations

National - 

Replacements

North - 

Replacements

South - 

Replacements

National - 

New 

Construction
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ME1 19138030v.1

 (500)

 (300)

 (100)

 100

 300

 500

 700

 900 National - All Installations North - All Installations South - All Installations National - Replacements North - Replacements South - Replacements National - New Construction North - New Construction South - New Construction LCC savings (2013 $)

2011 Average LCC savings

2014 Average LCC savings

all groups in order:

90% AFUE

92% AFUE

95% AFUE

98% AFUE

-5%

-3%

-1%

1%

3%

5%

7%

9% National - All Installations North - All Installations South - All Installations National - Replacements North - Replacements South - Replacements National - New Construction North - New Construction South - New Construction LCC savings (% relative to 80% AFUE)

2011 % LCC savings

2014 % LCC savings

all groups in order:

90% AFUE

92% AFUE

95% AFUE

98% AFUE
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2) 2014 LCC analysis Sheet: Statistics and 2011 LCC Sheet: Forecast Cells

a) The annual heating load in the 2014 LCC analysis using the RECS 2009 database is significantly 

higher, especially in the southern region, than the 2011 LCC analysis (based on the RECS 2005). 

What is the underlying rationale for the significant increase in heating loads, especially in the 

South region?

b) The LCC spreadsheet contains over 100 Crystal Ball Monte Carlo simulation-controlled 

variables. It also contains parametric assumptions that are not evident in the spreadsheet, for 

example:

The approximate percentage of total heating load in the southern region of the total national 

heating load for buildings selected for analysis can be estimated by multiplying buildings’ LBNL 

modified weighting factors by their annual heating NG consumption provided in the RECS 2005 

database. In the 2011 LCC spreadsheet that numbers is 8.6%. It is relatively close to the 9.5%

calculated for the same buildings with the RECS 2005 original weighing factors before they were 

modified by LBNL. This suggests that the ratio of building heating loads in the southern region to 

the rest of the country in the LBNL sample is similar to RECS 2005 weighting factors. 

A similar calculation in the 2014 LCC spreadsheet shows that this number is 17%, or almost 

double that of the 2011 version. It is also much larger than the 12.2% calculated with the RECS 

2009 original weighing factors demonstrating more aggressive modification of weighting factors 

in the southern region by LBNL in favor of increasing these loads. The processed/static weighting 

factor numbers in the 2014 LCC spreadsheet (in contrast to the 2011 version where factors are 

calculated in the spreadsheet) makes it impossible to evaluate the methodology used.

What is the methodology that was used to adjust these weighting factors and what is the 

justification for adjusting them?

3) DOE 2011 Furnace LCC Sheet “Forecast Cells” Installed Price (H8 to H12), 2009 Installed Price

DOE 2014 Furnace LCC Sheet “Labels” (M36 to M40)

DOE 2014 Furnace LCC Sheet “Forecast Cells” sum of non-switching retail price (O3123 to O3127) 

and installation cost (O3163 to O3167), 2013 Installed Price; 

What is the basis of the large differential increase in the installed cost of a baseline 80% NWGF 

vs. the installed cost increase of condensing NWGFs in the 2014 LCC when compared with the 

2011 LCC (in switching or non-switching configuration)? 

DOE 2014 DOE 2014 DOE 2011 DOE 2011 2014/2011

(MMBtu/year) # Buildings (MMBtu/year) # Buildings MMBtu % 

Heating Load - NWGF - National 35.296 10,000 31.301 10,000 113%

Heating Load - NWGF - North 44.730 5,299 39.170 5,986 114%

Heating Load - NWGF - South 24.661 4,701 19.565 4,014 126%
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ME1 19138030v.1

No Sw itching No Sw itching No Sw itching

South DOE 2014 DOE 2011 DOE 2011 2014/2011

2013 $ 2009 $ 2013 $ % Change

Retail Price

NWGF 80% $1,147.0 $831.2 $902.6 127.1%

NWGF 90% $1,305.1 $1,035.0 $1,123.8 116.1%

NWGF 92% $1,321.5 $1,096.6 $1,190.8 111.0%

NWGF 95% $1,449.6 $1,237.4 $1,343.7 107.9%

NWGF 98% $1,644.9 $1,502.1 $1,631.0 100.9%

Inst. Cost

NWGF 80% $847.0 $782.8 $850.1 99.6%

NWGF 90% $1,038.1 $1,147.1 $1,245.5 83.3%

NWGF 92% $1,038.1 $1,147.1 $1,245.5 83.3%

NWGF 95% $1,038.1 $1,147.1 $1,245.5 83.3%

NWGF 98% $1,038.1 $1,159.3 $1,258.8 82.5%

Total Installed

NWGF 80% $1,994.0 $1,614.1 $1,752.7 113.8%

NWGF 90% $2,343.2 $2,182.0 $2,369.4 98.9%

NWGF 92% $2,359.5 $2,243.7 $2,436.3 96.8%

NWGF 95% $2,487.6 $2,384.5 $2,589.2 96.1%

NWGF 98% $2,683.0 $2,661.3 $2,889.8 92.8%
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ME1 19138030v.1

No Sw itching No Sw itching No Sw itching

National DOE 2014 DOE 2011 DOE 2011 2014/2011

2013 $ 2009 $ 2013 $ % Change

Retail Price

NWGF 80% $1,163.4 $858.3 $932.0 124.8%

NWGF 90% $1,326.6 $1,063.8 $1,155.1 114.8%

NWGF 92% $1,342.6 $1,125.8 $1,222.5 109.8%

NWGF 95% $1,476.9 $1,271.3 $1,380.5 107.0%

NWGF 98% $1,669.2 $1,523.3 $1,654.1 100.9%

Inst. Cost

NWGF 80% $1,049.8 $927.4 $1,007.0 104.2%

NWGF 90% $1,369.0 $1,292.9 $1,403.9 97.5%

NWGF 92% $1,369.0 $1,292.9 $1,403.9 97.5%

NWGF 95% $1,369.0 $1,292.9 $1,403.9 97.5%

NWGF 98% $1,369.0 $1,306.5 $1,418.7 96.5%

Total Installed

NWGF 80% $2,213.2 $1,785.7 $1,939.1 114.1%

NWGF 90% $2,695.6 $2,356.7 $2,559.1 105.3%

NWGF 92% $2,711.6 $2,418.8 $2,626.4 103.2%

NWGF 95% $2,845.9 $2,564.3 $2,784.4 102.2%

NWGF 98% $3,038.2 $2,829.8 $3,072.8 98.9%

Sw iching No Sw itching No Sw itching

South DOE 2014 DOE 2011 DOE 2011 2014/2011

2013 $ 2009 $ 2013 $ % Change

Retail Price

NWGF 80% $1,147.0 $831.2 $902.6 127.1%

NWGF 90% $1,242.3 $1,035.0 $1,123.8 110.5%

NWGF 92% $1,256.9 $1,096.6 $1,190.8 105.6%

NWGF 95% $1,359.2 $1,237.4 $1,343.7 101.2%

NWGF 98% $1,493.2 $1,502.1 $1,631.0 91.5%

Inst. Cost

NWGF 80% $847.0 $782.8 $850.1 99.6%

NWGF 90% $1,032.9 $1,147.1 $1,245.5 82.9%

NWGF 92% $1,033.0 $1,147.1 $1,245.5 82.9%

NWGF 95% $1,034.5 $1,147.1 $1,245.5 83.1%

NWGF 98% $1,039.9 $1,159.3 $1,258.8 82.6%

Total Installed

NWGF 80% $1,994.0 $1,614.1 $1,752.7 113.8%

NWGF 90% $2,275.2 $2,182.0 $2,369.4 96.0%

NWGF 92% $2,289.9 $2,243.7 $2,436.3 94.0%

NWGF 95% $2,393.7 $2,384.5 $2,589.2 92.4%

NWGF 98% $2,533.1 $2,661.3 $2,889.8 87.7%
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ME1 19138030v.1

Sw iching No Sw itching No Sw itching

National DOE 2014 DOE 2011 DOE 2011 2014/2011

2013 $ 2009 $ 2013 $ % Change

Retail Price

NWGF 80% $1,163.4 $858.3 $932.0 124.8%

NWGF 90% $1,286.2 $1,063.8 $1,155.1 111.3%

NWGF 92% $1,301.4 $1,125.8 $1,222.5 106.5%

NWGF 95% $1,418.7 $1,271.3 $1,380.5 102.8%

NWGF 98% $1,574.6 $1,523.3 $1,654.1 95.2%

Inst. Cost

NWGF 80% $1,049.8 $927.4 $1,007.0 104.2%

NWGF 90% $1,366.2 $1,292.9 $1,403.9 97.3%

NWGF 92% $1,366.4 $1,292.9 $1,403.9 97.3%

NWGF 95% $1,367.6 $1,292.9 $1,403.9 97.4%

NWGF 98% $1,371.7 $1,306.5 $1,418.7 96.7%

Total Installed

NWGF 80% $2,213.2 $1,785.7 $1,939.1 114.1%

NWGF 90% $2,652.4 $2,356.7 $2,559.1 103.6%

NWGF 92% $2,667.8 $2,418.8 $2,626.4 101.6%

NWGF 95% $2,786.3 $2,564.3 $2,784.4 100.1%

NWGF 98% $2,946.3 $2,829.8 $3,072.8 95.9%
10/28/2014

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10/28/2014 10

ME1 19138030v.1

4) Sheet: Forecast Cells. Rows 3143-3152 and 3183-3192

The installation and retail cost of electric water heating equipment predicted by the model is 

higher than the cost of gas equipment. This is an unexpected result. For example, RSMeans 

costs for electric water heaters are lower than for comparable gas water heaters, as expected. 

What is the rationale for higher electric water heater costs?

The source of equipment cost data in the 2014 LCC spreadsheet is “CAC and HP - 2011 Direct Final Rule; 

EWH and GWH 2010 Heating Products Final Rule” (see “Equip Price” sheet Table located at Y27 and 

listed below).

Numbers from this table are first multiplied by local Total Distr./Const. Markup and Sales Tax than by 

Learning Curve Coeff. and by GDP Deflator. (See “Equip Price” sheet AD8 to 12 and listed below)

Mean Median Min Max

LCC&PB Calcs

R 4

0 Retail Price (switching) - Gas Water Heater EL 0 'LCC&PB Calcs'!$R$40 ($) Retail Price (switching) Gas Water Heater 0 40 18 6838 8319 680.0 616.6 48.6 3309.5

LCC&PB Calcs

R 4

1 Retail Price (switching) - Gas Water Heater EL 1 'LCC&PB Calcs'!$R$41 ($) Retail Price (switching) Gas Water Heater 1 41 18 6839 8140 675.3 615.6 48.6 3309.5

LCC&PB Calcs

R 4

2 Retail Price (switching) - Gas Water Heater EL 2 'LCC&PB Calcs'!$R$42 ($) Retail Price (switching) Gas Water Heater 2 42 18 6840 8138 674.8 615.2 48.6 3309.5

LCC&PB Calcs

R 4

3 Retail Price (switching) - Gas Water Heater EL 3 'LCC&PB Calcs'!$R$43 ($) Retail Price (switching) Gas Water Heater 3 43 18 6841 8125 674.8 615.6 48.6 3309.5

LCC&PB Calcs

R 4

4 Retail Price (switching) - Gas Water Heater EL 4 'LCC&PB Calcs'!$R$44 ($) Retail Price (switching) Gas Water Heater 4 44 18 6842 8079 674.3 615.2 48.6 3309.5

LCC&PB Calcs

R 4

5 Retail Price (switching) - Electric Water Heater EL 0 'LCC&PB Calcs'!$R$45 ($) Retail Price (switching) Electric Water Heater 0 45 18 6833 0 --- --- --- ---

LCC&PB Calcs

R 4

6 Retail Price (switching) - Electric Water Heater EL 1 'LCC&PB Calcs'!$R$46 ($) Retail Price (switching) Electric Water Heater 1 46 18 6834 179 844.8 696.7 459.6 3092.6

LCC&PB Calcs

R 4

7 Retail Price (switching) - Electric Water Heater EL 2 'LCC&PB Calcs'!$R$47 ($) Retail Price (switching) Electric Water Heater 2 47 18 6835 181 871.3 696.7 459.6 3092.6

LCC&PB Calcs

R 4

8 Retail Price (switching) - Electric Water Heater EL 3 'LCC&PB Calcs'!$R$48 ($) Retail Price (switching) Electric Water Heater 3 48 18 6836 194 884.8 696.7 459.6 3092.6

LCC&PB Calcs

R 4

9 Retail Price (switching) - Electric Water Heater EL 4 'LCC&PB Calcs'!$R$49 ($) Retail Price (switching) Electric Water Heater 4 49 18 6837 240 907.1 692.2 459.6 3092.6

LCC&PB Calcs

S4

0 Installation Cost (switching) - Gas Water Heater EL 0 'LCC&PB Calcs'!$S$40 ($) Installation Cost (switching)Gas Water Heater 0 40 19 6456 8319 592.4 589.1 245.4 1155.2

LCC&PB Calcs

S4

1 Installation Cost (switching) - Gas Water Heater EL 1 'LCC&PB Calcs'!$S$41 ($) Installation Cost (switching)Gas Water Heater 1 41 19 6457 8140 592.6 589.1 245.4 1155.2

LCC&PB Calcs

S4

2 Installation Cost (switching) - Gas Water Heater EL 2 'LCC&PB Calcs'!$S$42 ($) Installation Cost (switching)Gas Water Heater 2 42 19 6458 8138 592.5 589.1 245.4 1155.2

LCC&PB Calcs

S4

3 Installation Cost (switching) - Gas Water Heater EL 3 'LCC&PB Calcs'!$S$43 ($) Installation Cost (switching)Gas Water Heater 3 43 19 6459 8125 592.4 589.1 245.4 1155.2

LCC&PB Calcs

S4

4 Installation Cost (switching) - Gas Water Heater EL 4 'LCC&PB Calcs'!$S$44 ($) Installation Cost (switching)Gas Water Heater 4 44 19 6460 8079 593.0 589.1 245.4 1155.2

LCC&PB Calcs

S4

5 Installation Cost (switching) - Electric Water Heater EL 0 'LCC&PB Calcs'!$S$45 ($) Installation Cost (switching)Electric Water Heater 0 45 19 6451 0 --- --- --- ---

LCC&PB Calcs

S4

6 Installation Cost (switching) - Electric Water Heater EL 1 'LCC&PB Calcs'!$S$46 ($) Installation Cost (switching)Electric Water Heater 1 46 19 6452 179 713.2 716.3 441.3 996.7

LCC&PB Calcs

S4

7 Installation Cost (switching) - Electric Water Heater EL 2 'LCC&PB Calcs'!$S$47 ($) Installation Cost (switching)Electric Water Heater 2 47 19 6453 181 716.3 719.6 441.3 996.7

LCC&PB Calcs

S4

8 Installation Cost (switching) - Electric Water Heater EL 3 'LCC&PB Calcs'!$S$48 ($) Installation Cost (switching)Electric Water Heater 3 48 19 6454 194 719.0 714.0 426.7 1260.8

LCC&PB Calcs

S4

9 Installation Cost (switching) - Electric Water Heater EL 4 'LCC&PB Calcs'!$S$49 ($) Installation Cost (switching)Electric Water Heater 4 49 19 6455 240 698.9 689.3 426.7 1260.8

Retail prices are 

row s 3143 - 3152

Installation costs 

are row s 3183 - 

3192
10/28/2014 11

ME1 19138030v.1

Implicit Price Deflators for Gross Domestic Product (Gross private domestic Investment 2013 vs. 2009) 

used is 1.04039. 

Source: http://www.bea.gov/national/pdf/dpga.pdf

5) Sheet: NWGF Switching. D48 and D49

a) What is the rationale for choosing a single payback (3.5 years) as the basis of fuel switching 

decisions?

b) Why is a single time period used for all buildings and owners rather than one dependent on 

discount rates, income, etc.? For example, there are discount rates in Sheet: Discount Rate. 

Rows 26-116 that could be used to create a distribution of payback periods for this decision.

6) Sheet: NWGF Switching. Column AG

a) What is the decision making criteria for choosing which non-NWGF option is selected when 

fuel switching occurs?

b) What happens when negative values occur (meaning the first year operations cost of the 

switching option is lower than the first year operations cost of the high efficiency NWGF)?

c) Why does fuel switching remain high even at extreme payback times whether negative values 

are excluded or not?

d) Pushing the “payback period” up (changing D48&49 to high values) does not eliminate fuel 

switching. Even at 15 years it remains around 10 %. In part this is because options that have a 

negative “payback period” will always allow switching and also because some fuel switching 

options make economic sense even when considering a long time horizon. This switching 

behavior is entirely rational. A significant fraction of these switching events would be expected 

to occur in the absence of a DOE rule. Are these rational fuel switching cases included in an 

estimate of LCC savings due to a DOE rule change?

e) The switching “payback period” is essentially the ratio of the first cost advantage of a 

switching option to the annual operation cost disadvantage of same option. Because this 

analysis is a Monte Carlo analysis this will tend to choose situations which are low operations 

cost disadvantage and/or high first cost advantage. This is likely to underestimate the true cost 

of fuel switching. How is this inherent aspect of the Monte Carlo methodology addressed 

equitably given the “irrational” consumer behavior predicted based on behavioral economics 

theory?

Engineering Analysis Data

Mnfr. Production Shipping Cost 

Cost (MPC)* Estimate

(2009$) (2009$)

2-Ton 3-Ton 5-Ton 2-Ton 3-Ton 5-Ton

13 SEER CAC $573.87 $642.12 $894.62 $16.02 $20.51 $28.42

14 SEER CAC $633.96 $705.76 $984.85 $20.30 $24.83 $29.50

14 SEER HP (HP, Indoor Unit) $900.47 $1,075.56 $1,352.70 $25.45 $30.54 $38.42

30 gal 40 gal 50 gal 66 gal 75/80 gal 119 gal 30 gal 40 gal 50 gal 66 gal 75/80 gal 119 gal

GWH - Default $172.00 $187.00 $200.00 $537.00 $565.00 $17.00 $20.00 $40.00 $56.00 $61.00

GWH - Ultra Low NOx $273.00 $290.00 $303.00 $631.00 $659.00 $20.00 $26.00 $54.00 $56.00 $61.00

EWH $142.00 $159.00 $170.00 $569.00 $592.00 $655.00 $21.00 $21.00 $56.00 $64.00 $67.00 $107.00

Source: CAC and HP - 2011 Direct Final Rule; EWH and GWH 2010 Heating Products Final Rule
10/28/2014 12

ME1 19138030v.1

Fuel switching at long times 

is reduced by about half

-40%

-20%

0%

20%

40%

60%

80%

100% 0 5 10 15 20 25 30 percentage of switching

payback period

Percentage of switching due to simultaneous first cost and first year operations savings -

replacement

All Gas to Not all Gas GWH to EWH Gas Heat to Electric Heat
10/28/2014 13

ME1 19138030v.1

7) Sheet: Overall Spreadsheet

How are the negatively and positively impacted homes segmented? This includes north/south, 

and new construction/replacement segments. Included in the segmentation would be 

replacement costs of different options in different home locations, sizes, and configurations, as 

well as other factors that would impact consumer classes differently. Averages do not show the 

marginal affected consumers.

8) Sheet: Summary Switching. Columns H and I

How were the GTI survey numbers processed?

=“payback for switching”

When you start bringing the good:bad

ratio down it is the overlapping tails of 

high first cost advantage and low 

operation cost disadvantage that will 

cross the threshold. 
10/28/2014 14

ME1 19138030v.1

Installation contractors

South North South

Pre Post Pre Post Pre Post Pre Post

Low -eff gas Gas 12.7% 0.0% 13.6% 0.0% 23.1% 0.0% 45.0% 0.0%

Hi-eff gas Gas 59.9% 61.7% 46.6% 59.2% 61.6% 78.0% 26.2% 58.0%

El HP Gas 0.3% 8.4% 9.4% 6.1% 3.6% 7.0% 3.5% 12.4%

El furnace Gas 0.0% 0.0% 0.6% 0.1% 0.9% 2.2% 1.5% 1.6%

Low -eff gas Elec 4.3% 0.0% 9.6% 0.0% 1.9% 0.0% 2.6% 0.0%

Hi-eff gas Elec 18.2% 24.8% 14.1% 26.9% 2.6% 4.0% 3.1% 6.5%

El HP Elec 1.8% 4.0% 5.4% 6.8% 3.5% 4.5% 8.7% 10.6%

El furnace Elec 2.5% 0.6% 0.4% 0.5% 0.9% 1.7% 1.7% 1.5%

Other 0.3% 0.5% 0.3% 0.4% 1.8% 2.6% 7.6% 9.3%

North

Builders DOE reported GTI results Builders Installation contractors

North South North South

Pre Post Pre Post Pre Post Pre Post

Low -eff gas Gas 16.3% 0.0% 13.7% 0.0% 25.1% 0.0% 39.6% 0.0%

Hi-eff gas Gas 65.8% 78.8% 54.7% 62.1% 58.0% 77.2% 30.3% 61.2%

El HP Gas 2.0% 3.2% 3.8% 9.8% 2.9% 6.6% 4.4% 10.9%

El furnace Gas 0.1% 0.1% 1.1% 0.4% 0.9% 1.7% 1.5% 1.8%

Low -eff gas Elec 1.6% 0.0% 5.7% 0.0% 2.2% 0.0% 2.7% 0.0%

Hi-eff gas Elec 9.1% 12.3% 7.9% 13.7% 2.9% 4.8% 3.7% 5.9%

El HP Elec 2.3% 3.5% 8.3% 9.2% 3.0% 4.0% 9.9% 11.7%

El furnace Elec 1.2% 0.4% 3.1% 2.7% 1.0% 1.4% 1.8% 1.7%

Other 1.6% 1.8% 1.7% 2.1% 4.0% 4.2% 6.1% 6.9%

GTI results
10/28/2014 15

ME1 19138030v.1

9) Sheet: Bldg Sample and general methodology

The buildings sampled are only those that use natural gas or LPG as a heat source and it is used 

as a primary or secondary source of heat. Are there any other criteria for selecting buildings to 

specifically select for buildings where an 80% NWGF would have been installed in the absence of 

a DOE rule mandating higher efficiencies?

If there is not does this seem reasonable? For example, is the probability of choosing a high 

efficiency furnace the same in the case of a high income owner with a large home and the case 

of a low income owner of a small home?

10) Sheet: Summary Switching

Switching statistics should be different for different efficiency levels; however, the spreadsheet 

shows only one set. Is it a composite, how it is calculated, and how do the statistics look in each 

group? It appears that this is supposed to be the content of M35 – R58 on the same sheet but 

these all contain #REF! rather than data.

11) Sheet: Summary Switching, National Summary tables Replacement AC18 and New Construction 

AC32

Why does the summary of national switching and no switching cases add to 11,129 cases when 

only 10,000 cases were analyzed?

12) Using the 2014 LCC spreadsheet and allowing fuel switching improves LCC savings compared to 

disallowing fuel switching if the ‘payback’ for switching decisions is long (15 years for sheet NWGF 

Switching cells D48 and D49 is shown below). The effect is even larger in the south. Does this 

mean that fuel switching should be expected to reduce costs to consumers (e.g., in the South) as a 

result of the new minimum efficiency level?

Fraction of Non-Condensing NWGF Sw itching Fraction of All NWGF Sw itching

All Gas GWH Gas Furn All Gas GWH Gas Furn

ace Configuration to to to to to to 

7 13 16 20 All Not All Gas EWH Elec Heat Not All Gas EWH Elec Heat

% 0% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

% 20% 100% 0% 4% 2.7% 2.0% 4.2% 2.7% 2.0% 1.4%

% 27% 73% 0% 8% 6.9% 2.0% 8.5% 6.9% 2.0% 2.5%

% 30% 50% 50% 22% 20.4% 5.6% 22.1% 20.4% 5.6% 6.5%

% 22% 42% 45% 21% 20.8% 0.3% 21.5% 20.8% 0.3% 11.5%

% 38% 67% 100% 29% 24.7% 2.5% 29.4% 24.7% 2.5% 16.3%

% 26% 74% 60% 15% 13.4% 2.0% 15.3% 13.4% 2.0% 14.6%

% 0% 75% 0% 7% 8.2% 2.0% 7.4% 8.2% 2.0% 4.4%

% 13% 100% 0% 36% 37.0% 5.4% 35.8% 37.0% 5.4% 27.5%

% 26% 58% 100% 19% 20.0% 5.2% 18.6% 20.0% 5.2% 14.7%

% 26% 58% 56% 17% 15.6% 2.8% 16.658% 15.6% 2.8% 9.0%

All Gas GWH Gas Furn

ace Configuration to to to 

7 13 16 20 All Not All Gas EWH Elec Furn

% 0% 0% 0% 0% 0.00% 0.00% 0.00%

% 33% 67% 0% 14% 9.72% 8.33% 13.79%

% 29% 100% 0% 17% 13.56% 5.93% 16.78%

% 8% 33% 0% 21% 25.00% 22.92% 21.31%

% 12% 52% 43% 14% 13.44% 1.61% 14.41%

% 8% 33% 25% 17% 17.91% 5.97% 16.67%

% 0% 50% 0% 6% 5.80% 2.23% 5.51%

% 0% 100% 0% 14% 12.05% 4.82% 13.83%

% 42% 100% 0% 59% 62.22% 22.22% 58.82%

% 67% 100% 0% 31% 33.85% 11.98% 31.22%

% 23% 71% 33% 20% 19.98% 7.68% 19.94%

% Switching

Fraction of Non-Condensing NWGF Sw itching Fraction of All NWGF Sw itching

Replacement All Gas GWH Gas Furn All Gas GWH Gas Furn

Gas Furnace Configuration to to to to to to 

Census Div 1 5 7 13 16 20 All Not All Gas EWH Elec Heat Not All Gas EWH Elec Heat

1 0% 0% 0% 0% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

2 2% 13% 2% 20% 100% 0% 4% 2.7% 2.0% 4.2% 2.7% 2.0% 1.4%

3 0% 5% 8% 27% 73% 0% 8% 6.9% 2.0% 8.5% 6.9% 2.0% 2.5%

4 0% 33% 21% 30% 50% 50% 22% 20.4% 5.6% 22.1% 20.4% 5.6% 6.5%

5 0% 0% 18% 22% 42% 45% 21% 20.8% 0.3% 21.5% 20.8% 0.3% 11.5%

6 0% 0% 24% 38% 67% 100% 29% 24.7% 2.5% 29.4% 24.7% 2.5% 16.3%

7 0% 0% 13% 26% 74% 60% 15% 13.4% 2.0% 15.3% 13.4% 2.0% 14.6%

8 4% 0% 8% 0% 75% 0% 7% 8.2% 2.0% 7.4% 8.2% 2.0% 4.4%

9 21% 50% 41% 13% 100% 0% 36% 37.0% 5.4% 35.8% 37.0% 5.4% 27.5%

10 9% 16% 27% 26% 58% 100% 19% 20.0% 5.2% 18.6% 20.0% 5.2% 14.7%

National 5% 12% 16% 26% 58% 56% 17% 15.6% 2.8% 16.658% 15.6% 2.8% 9.0%

New All Gas GWH Gas Furn

Gas Furnace Configuration to to to 

Census Div 1 5 7 13 16 20 All Not All Gas EWH Elec Furn

1 0% 0% 0% 0% 0% 0% 0% 0.00% 0.00% 0.00%

2 0% 0% 8% 33% 67% 0% 14% 9.72% 8.33% 13.79%

3 0% 0% 6% 29% 100% 0% 17% 13.56% 5.93% 16.78%

4 0% 0% 24% 8% 33% 0% 21% 25.00% 22.92% 21.31%

5 0% 33% 9% 12% 52% 43% 14% 13.44% 1.61% 14.41%

6 0% 0% 16% 8% 33% 25% 17% 17.91% 5.97% 16.67%

7 0% 0% 5% 0% 50% 0% 6% 5.80% 2.23% 5.51%

8 0% 27% 9% 0% 100% 0% 14% 12.05% 4.82% 13.83%

9 30% 0% 63% 42% 100% 0% 59% 62.22% 22.22% 58.82%

10 17% 10% 37% 67% 100% 0% 31% 33.85% 11.98% 31.22%

National 14% 18% 17% 23% 71% 33% 20% 19.98% 7.68% 19.94%

Overall fraction Switching

all gas to 

not all gas

gas water 

heater to 

electric 

water 

heater

gas heat to 

electric heat

Replacement 6.8% 1.3% 7.0%

New 5.8% 2.2% 4.4%

Fraction of affected homes switching

all gas to 

not all gas

gas water 

heater to 

electric 

water 

heater

gas heat to 

electric heat

Replacement 20.7% 3.9% 21.3%

New 27.4% 10.3% 21.0%

DOE GTI
10/28/2014 16

ME1 19138030v.1

13) Sheet: Statistics and Forecast Cells O3043 to O3052

Why is the national annual fuel usage per efficiency group in the ‘Statistics’ sheet different than 

the one listed in the ‘Forecast Cells’ sheet?

14) Sheet: Energy Price, Table Marginal Energy Prices

What is the source of the marginal electric and gas prices? Did the analysis incorporate any of 

the marginal gas price information provided by AGA based on its member survey? If so, how did 

it incorporate the AGA member survey results? If not, why not?

15) Sheet: Equip Price. AC50

What is the source of the factor of 1/3 that is multiplied by the cost differential (EF vs. NWGF)?

16) Sheet: Base Case AFUE

What is the source of the distributions of furnace efficiencies (new and replacement)?

17) Sheet: Bldg Sample, E67, E61

Why was a uniform distribution chosen for remaining lifetimes for cooling and water heating 

equipment?

18) Sheet: Installation Cost, Columns E and F

The source for the assumptions regarding venting options and conditioned vs. unconditioned 

space is given as “Consultant Report.” Is this report available? Simulation Results NATIONAL - 10000 samples Fuel Switching Allowed AEO 2014 - Reference Case

Average LCC Results Payback Results

Installed Lifetime First Year LCC Simple LCC Net No Net Simple

Level Description Price Oper. Cost* Oper. Cost LCC Savings Savings Cost Impact Benefit Average Median PBP

NWGF 0 NWGF 80% $2,209 $10,369 $644 $12,579 NA NA NA 100% NA

NWGF 1 NWGF 90% $2,644 $9,434 $590 $12,079 $227 $500 21% 48% 31% 16.6 10.6 8.1 

NWGF 2 NWGF 92% $2,660 $9,276 $580 $11,935 $292 $643 19% 42% 38% 13.0 8.0 7.1 

NWGF 3 NWGF 95% $2,779 $9,039 $566 $11,818 $367 $760 24% 24% 52% 12.6 8.9 7.4 

NWGF 4 NWGF 98% $2,943 $8,821 $555 $11,764 $421 $815 41% 0% 59% 16.9 12.2 8.2 

MHGF 0 MHGF 80% $1,551 $10,913 $700 $12,463 NA NA NA 100% NA

MHGF 1 MHGF 92% $1,722 $9,705 $622 $11,426 $695 $1,037 7% 26% 67% 5.4 1.9 2.2 

MHGF 2 MHGF 95% $1,865 $9,461 $607 $11,326 $774 $1,137 13% 14% 73% 8.5 4.4 3.4 

MHGF 3 MHGF 97% $1,980 $9,339 $599 $11,319 $782 $1,144 25% 0% 74% 12.5 6.7 4.2 

Simulation Results NATIONAL - 10000 samples Fuel Switching NOT Allowed AEO 2014 - Reference Case

Average LCC Results Payback Results

Installed Lifetime First Year LCC Simple LCC Net No Net Simple

Level Description Price Oper. Cost* Oper. Cost LCC Savings Savings Cost Impact Benefit Average Median PBP

NWGF 0 NWGF 80% $2,213 $10,347 $645 $12,560 NA NA NA 100% NA

NWGF 1 NWGF 90% $2,696 $9,437 $588 $12,133 $169 $427 22% 47% 31% 18.6 12.0 8.5 

NWGF 2 NWGF 92% $2,712 $9,271 $578 $11,982 $243 $578 20% 41% 39% 14.5 8.8 7.5 

NWGF 3 NWGF 95% $2,846 $9,028 $563 $11,874 $311 $687 25% 23% 52% 14.1 9.7 7.7 

NWGF 4 NWGF 98% $3,038 $8,822 $550 $11,860 $324 $700 42% 0% 57% 18.2 13.1 8.7 

MHGF 0 MHGF 80% $1,551 $10,885 $700 $12,436 NA NA NA 100% NA

MHGF 1 MHGF 92% $1,721 $9,679 $622 $11,399 $701 $1,037 7% 26% 67% 5.7 1.7 2.2 

MHGF 2 MHGF 95% $1,864 $9,435 $607 $11,299 $780 $1,137 13% 14% 73% 8.8 4.4 3.3 

MHGF 3 MHGF 97% $1,979 $9,313 $599 $11,292 $787 $1,144 25% 0% 75% 12.9 6.5 4.2 
10/28/2014 17

ME1 19138030v.1

19) Sheet NWGF Switching and LCC&PB Calcs

It appears that in NWGF Switching column AA, equipment age related discounting incorporates 

a present worth factor from columns AJ and AK. But the source of the cost numbers is 

generated in the LCC&PB Calcs sheet, where the same present worth factor is used to discount 

costs in cells D44 and D46. Is this double counting the present worth factor? 

20) Summary Sheet

a) Why are the National, North and South Region Installed Prices in “Summary” sheet (row K) 

different (smaller) than the calculated weighted average of Replacement and New values (rows 

AA and AP)?

b) 2014 LCC CB 10,000 cases default simulation run includes 9,717 residential and 283 

commercial buildings. Are the commercial buildings results included in the Simulation Results 

NATIONAL - 10000 samples tables in the “Summary” sheet? If so, what is the approach to 

dealing with that unique market segment?