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REGULATORY IMPACT ANALYSIS FOR RESIDENTIAL FURNACES AND BOILERS
TABLE OF CO NTENTS
1.0 INTRODUCTI ON

.................................................. RIA-1 2.0 METHODOLOGY

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LIST OF TABLE S Table 1.1 Non-regulatory Alternatives to Standards

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1.0 INTRODUC TION Under the Process Rule policies, the Department is committed to continuallyexplore nonregula tory alterna tives to sta

ndards. T

he Depa rtment wil l prepar

e a draf t regul atory

analy sis pursuant to E.O. 12866, “Regulatory Planning and Review,” which will be subject to review under the Ex ecutive Order b y the Office of Information an d Regulatory Affairs (OIRA). 5 8 FR 51735 October 4, 1993. The Department identified six major alternatives to standards as repres enting f

easible policy options to a

chieve c ustomer product e

nergy efficie ncy . It will evaluat e each a lternati ve in ter ms of its ab ility

to achie ve signi ficant e

nergy savings at a reasonable cost, and will compare the eff ectiveness of each one to the effe ctiveness of the rule. The Depa rtment wil l conduct

this analy

sis during the Notic e of Propo sed Rulema king (N OPR) stage o f this rulem aking. The non-regulatory

means of achieving energ y savings tha

t DOE proposes to analy

ze are listed in Ta

ble 1.1. T

he Tech nical Supp ort Docu

ment (TSD ) in suppor

t of DOE’ s NOPR will include a complete quantita tive ana lys is of eac

h alternative, th e methodo logy for whic h is discussed in brief below.
Table 1.1 Non-Reg ulatory A lternat ives to St andards -No new regulatory

action -Consumer

tax credit s -Manufa cturer tax credit s -Performance standards -Rebates -Volunta ry energ y e fficien cy targe ts -Early r eplacement -Mass government purchases

2.0 METHODOL OGY The Depa rtment wil l use the national e nergy savings (NES) Spr

eadshee t Model to calculate the national energy savings NES and the net present value (NPV) cor responding to each alternative to the proposed standards. To compare e ach alternative quantitatively to the proposed conservation standards, it will be necessary to quantify the eff

ect of each alternative on the purchas e and use

of ener gy-effic ient cons

umer pro ducts. On

ce eac h alternative is pr

operly quantified, DOE will make the appropriate revisions to the inputs in the NES Spreadsheet Model. The key measure s of the imp act of e ach alte rnative will be:RIA -2

C National

Energ y Sa vings: Cu

mulative national e

nergy use from the base case forecast projection less the alternative policy case projection.

C Net Present Value: The value of future oper ating cost savings from furnace s and boilers bought in the period from the effective date of the new standard to the y ear 2030. The Department calculates the NPV as the differ ence between the present value of equipment and operating expenditures (including ener gy) in the base case forecast, and the pr esent value of expenditures in each alternative policy case. The Department discounts future ope rat in g an d eq ui pm ent ex pen di tu res to 200 1 us in g a s eve n pe rce nt rea l d is cou nt rat e. It calcula tes oper ating expenses (i

ncluding energ y)for the li fe of the

equipmen

t.