1 | Energy Efficiency and Renewable Energy 

Energy Conservation Standards:

Notice of Proposed Rulemaking for

Commercial Clothes Washers

April 21, 2014

John CymbDepartment of EnBuilding Technolo

EERE‐2012‐STD‐0

CommClothesWash

0020@ee.doe.gov
2

Welcome• Introductions (around the room)

• Role of the Facilitator• Ground Rules

– Speak one at a time.

– Say your name for the record – there will be a complete tra

this meeting.

– Be concise – share the ‘air‐time’.

– Keep the focus here – cell phones on silent; limit sidebar

conversations.

– Webinar participants turn phone on mute; “raise your hand

recognized to speak.

• Housekeeping Items• Agenda Review
3

Agenda

9:00 – 9:05 am Welcome, Introductions, Agenda Review

9:05 – 9:15 am Opening Remarks

9:15 – 9:30 am Regulatory History, Rulemaking Process O

9:30 – 10:30 am Market and Technology Assessment, Scre

Analysis, Engineering Analysis

10:30 – 10:45 am Markups for Equipment Price Determinat

Energy & Water Use Analysis

10:45 – 11:00 am Break

11:00 – 11:30 am Life‐Cycle Cost and Payback Period Analy

11:30 – 11:50 am Shipments Analysis, National Impact Ana

11:50 – 12:20 pm Manufacturer Impact Analysis
4

Agenda

12:20 – 12:35 pm Consumer Subgroup Analysis, Emissions 

Utility Impact Analysis, Employment Imp

Analysis, Regulatory Impact Analysis

12:35 – 12:50 pm Discussion of Other Issues

12:50 – 1:00 pm Next Steps and Closing Remarks

1:00 pm Adjourn
5

Listening Via the Webcast• The Department is broadcasting this meeting live ov

Internet.

• DOE is providing the webcast to accommodate stake

that are unable to attend the public meeting in perso

• The web broadcast allows stakeholders to listen in an

the slides.

• All stakeholders are encouraged to submit written co

after the public meeting.
6

Purpose of the Public Meeting• Present the procedural and analytical approaches to 

energy conservation standards for commercial clothe

washers (CCW), as published in the notice of proposerulemaking (NOPR):http://www.regulations.gov/#!documentDetail;D=EE

2012‐BT‐STD‐0020‐0021.

• Invite participants to provide summary comments or

statements and raise additional issues for discussion.

• Discuss next steps in the rulemaking.
7

Issues for Discussion• Issue “boxes” correspond to the list of issues for whi

Department seeks comments.

• Issue box numbers in this presentation correspond t

numbers presented in the NOPR.

Issue Box: DOE welcomes comments, data, and informconcerning its proposed standards for CCWs. Issues thacorrespond to those raised in DOE’s published material numbered in accordance with that material. Whether invan issue box or not, comments are welcome on any parDOE’s analysis.
8

How to Submit Written Comments

In all correspondence, please refer to the CCW rulemaking by:

– Standards for Commercial Clothes Washers

– Docket Number EERE‐2012‐STD‐0020

– Regulation Identification Number (RIN) 1904‐AC77

Email: CommClothesWashers‐2012‐STD‐0020@ee.doe.gov

Postal: CourierMs. Brenda Edwards Ms. Brenda Edwards

U.S. Department of Energy U.S. Department of Energy

Building Technologies Program, Building Technologies Prog

Mailstop EE‐5B 950 L’Enfant Plaza, SW

1000 Independence Avenue, SW Washington, DC 20024

Washington, DC 20585‐0121 Tel: 202 586‐2945

Comment period closes May 5, 2014, 11:59 PM 
9

Opening Remarks

Meeting participants are invited to provide open

remarks or statements at this time.
10

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
11

Regulatory History• Energy Policy and Conservation Act of 1975 (EPCA) 

– Amended by National Energy Conservation Policy Act of 19

619, to establish the “Energy Conservation Program for Cer

Equipment.”

• Energy Policy Act of 2005 (EPACT) P.L. 109‐58

– Further amended EPCA to add coverage for commercial clo

– Established definitions, test procedures, and energy efficie

– Required DOE to complete two rulemaking cycles to determ

to further amend CCW standards:

• First final rule required by January 1, 2010; issued Dec. 18, 20

(75 FR 1122, Jan. 8, 2010)

• Second final rule required by January 1, 2015

Current rulemaking
12

Definition of Covered Products• EPACT defines commercial clothes washers as follow

The term “commercial clothes washer” means a soft‐mount fro

loading or soft‐mount top‐loading clothes washer that—

(A) has a clothes container compartment that—

(i) for horizontal‐axis clothes washers, is not more than

3.5 cubic feet; and(ii) for vertical‐axis clothes washers, is not more than

4.0 cubic feet; and

(B) is designed for use in—

(i) applications in which the occupants of more than on

household will be using the clothes washer, such as mu

family housing common areas and coin laundries; or

(ii) other commercial applications. (42 U.S.C. 6311(21))
13

Energy Conservation Standards History• EPACT established the following standards for CCWs, 

January 1, 2007:

• The first DOE rulemaking cycle amended these stand

according to product class, effective January 8, 2013

Metric Standard

Modified Energy Factor (MEF) [ft3/kwh/cycle] 1.26 (minimum)

Water Factor (WF) [gal/cycle/ft3] 9.5 (maximum)

Product Class MEF (minimum) WF (maximum)

Top‐Loading 1.60 8.5

Front‐Loading 2.00 5.5
14

CCW Standards Rulemaking Timeline

2012 2015 2013 2014 2016 2017 

Milestone 

Notice of Proposed Rulemaking (NOPR) Publication Mar

NOPR Public Meeting Apr

Comment Period Ends Ma

Final Rule Issuance (projected) Janu
15

Rulemaking Process Overview• New or amended standards must be designed to ach

maximum improvement in energy or water efficienc

technologically feasible and economically justified.

• DOE performs the following analyses to determine

technological feasibility:

EPCA Requirement Corresponding DOE Ana

Technological Feasibility

 Market and Technology Ass

 Screening Analysis

 Engineering Analysis
16

Rulemaking Process Overview• DOE must consider seven factors to determine whet

amended standards are economically justified:

EPCA Factor DOE Analysis

1. Economic impact on consumers and

manufacturers

• Life‐cycle cost analysis• Manufacturer impact analy

2. Lifetime operating cost savings • Life‐cycle cost analysis

3. Total projected energy savings • National impact analysis

4. Impact on utility or performance

• Engineering analysis• Screening analysis

5. Impact of any lessening of competition • Manufacturer impact analy

6. Need for national energy conservation • National impact analysis

7. Other factors the Secretary considers

relevant

• Environmental assessment• Utility impact analysis• Employment impact analys
17

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
18

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
19

Market and Technology Assessment

Purpose

• Define product classes

• Characterize the CCW industry and market

• Gather historical shipments and other releva

• Identify technology options for improving eff
20

Product Classes• The proposed standards maintain two product classe

location of access:

Top‐Loading Front‐Loading
21

Manufacturers and Market Share• DOE estimates that two major manufacturers hold o

the market share of CCWs covered by DOE standards

Major Manufacturers Other Manufac

Alliance Laundry Systems AB Electrolux

Whirlpool Continental Girbau

General ElectricLG

90%

10%
22

Distribution Channels

Manufacturer

Route

Operator

Distributor

Building

Manager

Laundromat

• Leases laundry room• Owns and operates machines

• Maintains facility• Takes share of revenue

• Sells machines to

laundromats andsome building owners

• Leases space to route o• Pays utility bills• Takes share of revenue• Some may purchase ma

directly from a distribut

• Purchases machines

• Pays utility bills
23

Sales Breakdown• DOE estimates that multi‐family housing represents 

annual sales; the remaining 15% are sold to coin‐opelaundries.

85%

15% Multi‐Fam

Coin‐Operated

Laundries

Image sources:

http://www.mcmakens.com/laundromat/Laundromat.JPG

http://www.baymontinns.com/common/images/branded/BU/images/19385_b5.jpg

Annual Sales Breakdown
24

Shipments and Housing Starts• Historically, trends in annual CCW shipments have cl

tracked trends in new multi‐family housing construct

*Buildings with 5 units or more

050100150200250300350400

0

50

100150200250

2000 2002 2004 2006 2008 2010 2012 2014

Multi‐Family Housing Starts*

(thousands)

Annual Shipments (thousands)

Year
25

Request for Comment

Issue 1: DOE requests information on historical producshipments and market share efficiency data, disaggregaproduct class, for 2012 and 2013 as those data become available.
26

Energy Efficiency Trends• Shipment‐weighted efficiency has increased modest

past decade.

1.01.21.41.61.82.02.22.42.6

2002 2004 2006 2008 2010 2012

Weighted MEF

Year

Shipment‐Weighted Efficiency

TotaTopFron
27

Efficiency Distribution• DOE observes no overlap in efficiency levels betwee

top‐loading and front‐loading CCWs.

0123456

1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Available Models

MEF

Efficiency Distribution by MEF

ToFr
28

Technology Assessment• DOE identified following initial technology options th

used to improve energy efficiency in CCWs:

Initial Technology Options for CCWs

• Adaptive water fill • Ozonated laundering• Advanced agitation concepts for top‐

loading machines

• Polymer bead cleaning

• Capacity increase

• Spray rinse or similar wate

rinse technology

• Direct‐drive motor

• Temperature‐differentiate

controls

• Higher spin speeds to reduce

remaining moisture content

• Thermostatically controlle

valves

• Motor efficiency improvements • Water recirculation loop
29

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
30

Screening Analysis

Purpose

• Identify any technologies to be eliminated fro

further consideration
31

Screening Analysis• DOE screened out ozonated laundering and polymer bead clea

basis of technological feasibility and practicability to manufactu

and service.

• DOE also screened out temperature‐differentiated pricing con

the potential energy savings of such controls would depend on 

consumer behavior after the point of manufacture. DOE has no 

consumer behavior would change accordingly.

Final Technology Options for CCWs

• Adaptive water fill • Motor efficiency improvemen

• Advanced agitation concepts for

top‐loading machines

• Spray rinse or similar water‐re

technology

• Capacity increase • Thermostatically controlled m

• Direct‐drive motor • Water recirculation loop

• Higher spin speeds to reduce

remaining moisture content
32

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
33

Engineering Analysis

Purpose

• Evaluate design options that improve efficiency• Characterize manufacturer production cost (MPC) ve

efficiency for higher‐efficiency CCWs.

Downstream Ana

• Life‐Cycle Cost an

Payback Period A

• National Impact A

• Manufacturer Im

Analysis

Manufacturer Production Cost–

Efficiency Relationship

Manufacturer

Production Cost

Efficiency Level
34

New Appendix J2 Metrics• The proposed standards are based on the MEFJ2 and 

metrics in Appendix J2.

• Products on the market are currently rated according 

MEF and WF ratings in Appendix J1.

Note “J2” no

Modified Energy Factor (MEFJ2): incorporates revised capacity measu

top‐loaders; revised drying energy calculation for all washers.

Integrated Water Factor (IWF): incorporates water consumption from 

temperatures in the energy test cycle, rather than only the cold wash/cycle.
35

Engineering Analysis Process• The engineering analysis process for CCWs was cond

follows:

Develop

Appendix J1

Efficiency

Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix

J1 and J2

Testing

Perfor

to 

Cos

Re

Translate

J1 to J2

Efficiency

Levels
36

Test Sample Units

• DOE selected five representative units for 

product class.

• Selected units spanned the entire range of

efficiencies available on the market.

02468

10

1.4 1.6 1.8 2.0 2.2 2.4 

WF

MEF

Rated MEF and WF Values for Tested Units (J1 Ra

TF

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels
37

Appendix J1 Efficiency Levels

• DOE defined the following efficiency levels 

analysis, based initially on Appendix J1 rati

• Top‐Loading:• Front‐Loading:

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

Efficiency Level Description MEF 

Baseline DOE Standard 1.60 

Level 1 Gap Fill 1.70 Level 2 Maximum Available 1.85 

Efficiency Level Description MEF 

Baseline DOE Standard 2.00 

Level 1 Former CEE Tier 2 2.20 

Level 2 Former CEE Tier 3 2.40 

Level 3 Maximum Available 2.60 
38

Appendix J1 and J2 Test Results

• DOE tested each unit using both Appendix 

(MEF/WF) and Appendix J2 (MEFJ2/IWF).

• DOE determined equivalent Appendix J2 v

each efficiency level based on the J1/J2 tra

• Note: The following slides highlight the M

translations only. DOE used the same metfor the WF/IWF translations, as described 5 of the Technical Support Document.

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels
39

• The following plot shows the J1/J2 test res

top‐loading CCWs:

Appendix J1 and J2 Test Results: Top‐Loading

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

1.01.11.21.31.41.51.61.7

1.5 1.6 1.7 1.8 1.9 2.0

Equivalent MEF (Appendix J2)

Rated MEF (Appendix J1)

Top‐Loading

Appendix J2 vs. Appendix J1

ManuAdapLevel Level Basel
40

Appendix J1 to J2 Translation: Top‐Loading

• DOE defined the Appendix J2 efficiency le

top‐loading CCWs as follows:

*An individual model’s Efficiency Level

under Appendix J1 may not correspond

to same the Efficiency Level under

Appendix J2.

Efficiency

Level*

Description Appendix J1 App

MEF WF MEF

Baseline DOE Standard 1.60 8.5 1.1

Level 1 Gap Fill 1.70 8.4 1.3Level 2 Max. Available 1.85 6.9 1.5

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

1.01.11.21.31.41.51.61.7

1.5 1.6 1.7 

Equivalent MEF (Appendix J2)

Rated ME

Top

Appendix J
41

Appendix J1 and J2 Test Results: Front

‐Loading

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

1.41.61.82.02.22.4

1.8 2.0 2.2 2.4 2.6 2.8

Equivalent MEF (Appendix J2)

Rated MEF (Appendix J1)

Front

‐Loading

Appendix J2 vs. Appendix J1

VirtAdaLevLevLevBas

• The following plot shows the J1/J2 test res

front

‐loading CCWs:
42

Appendix J1 to J2 Translation: Front‐Loading

• DOE defined the Appendix J2 efficiency le

front‐loading CCWs as follows:

Efficiency

Level

Description Appendix J1 A

MEF WF M

Baseline DOE Standard 2.00 5.5 1Level 1 Former CEE Tier 2 2.20 4.5 1

Level 2 Former CEE Tier 3 2.40 4.0 2

Level 3 Max. Available 2.60 3.7 2

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

1.41.61.82.02.22.4

1.8 2.0 2.2 2.4 2.6 2.8

Equivalent MEF (Appendix J2)

Rated MEF (Appendix J1)

Front‐Loading

Appendix J2 vs. Appendix J1
43

Cost‐Efficiency Relationships

• DOE calculated manufacturer production c

by disassembling CCWs from multiple manand creating bills of materials (BOMs).

• BOMs describe the product components in 

include estimates of materials, labor, capit

equipment, and overhead costs.

• Chapter 5 of the TSD provides additional d

DOE’s teardown and cost model methodol

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels
44

Cost‐Efficiency Relationships

• DOE created cost‐efficiency curves for eac

manufacturer

• DOE combined manufacturer curves based 

estimated market share to develop a weighaverage cost‐efficiency curve for each prod

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

Weight

$MPC

Effi

Manufacturer Curves

$MPC

Efficiency Level

Manuf. #1Manuf. #2Manuf. #3
45

Cost‐Efficiency Relationships: Top‐Loading

• Cost‐efficiency results for top‐loading CCW

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

Appendix J2

Efficiency

Level

Incremental

Cost (2012$) Cost‐Efficiency 

Baseline• 1.15 MEFJ2

• 8.9 IWF

‐‐

Level 1• 1.35 MEFJ2

• 8.8 IWF

$0.00

Level 2

• 1.55 MEFJ2

• 6.9 IWF

$38.89

$0

$10$20$30$40$50

1.1 1.2 1.3 1

Incremental Cost (2012$)

MEF
46

Cost‐Efficiency Relationships: Top‐Loading

Top‐Loading Highlights:

• $0 incremental cost at Efficiency Level (EL) 

DOE testing confirmed that manufacturers 

software‐related control strategies to achie

• Large jump to $38.89 at EL 2.

Major platform overhaul

required to achieve thisefficiency level.

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

$0

$10$20$30$40$50

1.1 1.2 

Incremental Cost (2012$)
47

Cost

‐Efficiency Relationships: Front

‐Loading

• Cost

‐efficiency results for front

‐loading CC

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

Appendix J2

Efficiency

Level

Incremental

Cost (2012$) Cost

‐Efficiency 

Baseline• 1.65 MEFJ2

• 5.2 IWF

‐‐

Level

1

• 1.80 MEFJ2

• 4.5 IWF

$0.00

Level

2

• 2.00 MEFJ2

• 4.1 IWF

$0.31

Level

3

• 2.20 MEFJ2

• 3.9 IWF

$19.55

$0$5

$10$15$20$25

1.6 1.8 2 

Incremental Cost (2012$)

ME
48

Cost‐Efficiency Relationships: Front‐Loading

Front‐Loading Highlights:

• $0 incremental cost at Efficiency Level (EL) 

Baseline Level models available on the ma

represents effective baseline on the marke

• $0.31 cost to achieve EL 2.

Mostly software‐relatedchanges.

• $19.55 cost for EL 3. More

significant platform changes

including motor upgradeand larger tub size.

Develop

Appendix J1

Efficiency Levels

Choose

Representative

Units for

Analysis

Conduct

Appendix J1

and J2 Testing

Perform

Teardowns

to Determine

Cost‐Efficiency

Relationships

Translate J1 to

J2 Efficiency

Levels

$0$5

$10$15$20$25

1.6 1.8 

Incremental Cost (2012$)
49

Request for Comment

Issue 9: DOE requests comment on the assumptions ain the engineering analysis regarding the baseline efficielevels and technology cost assessment.Specifically, for the top-loading product class, DOE used baseline level on the 1.60 MEF and the 8.5 WF requiremspecified by current Federal energy conservation standawhich became effective for commercial clothes washers manufactured on or after January 8, 2013.For the front-loading product class, DOE established the baseline level based on the 2.00 MEF and 5.5 WF requirements specified by current Federal energy consestandards.
50

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
51

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups Analysis

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
52

Markups Analysis

Distribution Channels, Inputs and Result

• According to data from the Consortium for Energy Efficiency, the over

majority of equipment is sold through distributors or route operators.

− Laundromats generally purchase equipment through distributors.− Multi‐family housing and large institutions generally lease equipment throu

operators

• Based markup calculations only on the distribution channel involving 

− Assumed resulting equipment prices would be representative of prices paid 

acquiring equipment from route operators.

• DOE used a national average markup for sales tax of 1.07• Overall baseline markup = 1.96; overall incremental markup = 1.62

− Baseline markups relate price to cost prior to a change in efficiency; 

distributor’s expense plus profit

− Incremental markups cover only expenses that increase due to an in

equipment efficiency.

Manufacturer

Distributor Laundromat

Route Operator Multi‐Family Housing
53

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy & Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
54

Energy and Water Use Characterization

Approach

• DOE developed average energy and water use values• Test procedure utilizes single value based on residen• DOE establish appropriate range of usage specific to 

field for two applications

– Multi‐family buildings

– Laundromats

• Based on per‐cycle energy and water use multiplied 

cycles per year

• Number of cycles per day based on various studies

– Multi‐family: Average = 3.0; Range = 1.5 to 4.3

– Laundromats: Average = 4.1; Range = 2.8 to 6.0
55

Energy and Water Use Characterization

Annual Usage

per Application Type

(cycles/year)

x

Machine, 

Water Heater

& Dryer 

Fuel Types 

Consumption

Per Cycle

Annual Energy Use by 

Efficiency Level and 

Application Type
56

Request for Comment

Issue 2: DOE requests comments, information and data characterizing CCW usage for establishing the energy consumption of CCWs. Specifically, whether there are adata for on-premise laundry usage that could improve thusage characterization. 
57

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
58

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
59

Life‐Cycle Cost and Payback Period Analyses• Purpose:

– Assess the net life‐cycle cost (LCC) impacts of differing efficiency l

consumer.

• Method:

– LCC equals consumer price plus the sum of annual operating cost

repair and maintenance costs) discounted to a particular base yea

– Economic evaluation is from the consumer perspective.

– Analysis implemented is in an Excel® spreadsheet.

– Results are expressed as LCC difference (baseline minus standard 

– Payback Period (PBP) is also calculated and reported in this analys

– Simple payback equals the incremental first cost divided by the o

savings for 1 year.

Consumer Life‐

Cycle Cost

(Baseline and

Standards Cases)

LCC Imp

(Difference b

Operating Cost Baseline and 

(Sum & Discount to

Present Value)

First Cost

(Consumer price &

Installation)
60

Life‐Cycle Cost and Payback Period Analyses

Approach

• Monte Carlo simulation analysis to be used

– Characterize the variability and uncertainty associated with the in

probability distributions.

– Studies were used to characterize the variability in washer usage 

and Laundromat applications.

– Probability distributions were used to characterize the uncertaint

operating cost inputs (e.g., discount rates, equipment lifetimes) a

manufacturing costs.

• One LCC and PBP analysis result per product class

– Analysis conducted for each proposed product class to be analyze

the Engineering Analysis.

• Develop base case efficiency distributions to avoid overstatin

from increasing product efficiency.

– Market share data (or base case efficiency distributions) show the 

consumers already purchasing efficient products.

– DOE developed efficiency distributions based on historical data.
61

Life‐Cycle Cost and Payback Period Analyses

Energy and Water Prices

• Electricity Prices

– Based on the Energy Information Administration (EIA) Form 861 Data.

– Developed for 27 States and Group of States (consistent with 2009 RECS)

• Natural Gas Prices

– Based on data from EIA’s Natural Gas Monthly.

– Developed for 27 States and Group of States (consistent with 2009 RECS).

• Water and Wastewater Prices

– Based on data from Raftelis Consultants and American Water Works Asso

– Developed for 4 Census Regions due to data limitations.

• Energy Price Forecasts

– Based on 2013 Annual Energy Outlook.

• Water and Wastewater Price Forecasts

– Projections from 1970‐2012 based on CPI national water price index (U.S. – Price projections to 2047 based on average growth rate from 1970‐2012.
62

Life‐Cycle Cost and Payback Period Analyses

Installation, Repair and Maintenance Costs

Discount Rates and Equipment Lifetime

• Installation Cost

– Base cost = $223 based on RS Means

• Repair and Maintenance Cost

– Annualized cost a function of 1⁄2 consumer equipment price divided by equ

• Discount Rates

– Based on the finance cost of raising funds to purchase appliances.

• Financial cost of any debt incurred to purchase equipment.

• Opportunity cost of any equity used to purchase equipment.

– Calculated from the weighted‐average cost of capital to the firm (WACC) t

and debt financing.

– Weighted‐average real value = 5.7%.

• Equipment Lifetime

– Based on various sources including Appliance magazine and past DOE TSD

• Minimum = 7 (Multi‐Family), 5 (Laundromat)

• Average = 11.3 (Multi‐Family), 7.1 (Laundromat)

• Maximum = 15.5 (Multi‐Family), 9.3 (Laundromat)

– All equipment lifetimes characterized with Weibull distribution.
63

Life‐Cycle Cost and Payback Period Analyses

Equipment Assignment in the Base Ca

• Avoids overstating the benefits from increasing equi

efficiency by showing the percentage of consumers a

purchasing efficient equipment.

Top‐Loading Front‐Loading

Level MEFJ2 IWF Market Share* Level MEFJ2 IWF M

Baseline 1.15 8.90 99.5% Baseline 1.65 5.20 

1 1.35 8.80 0.3% 1 1.80 4.50 2 1.55 6.90 0.3% 2 2.00 4.10 

3 2.20 3.90 

* Based on AHAM Data
64

LCC‐PBP Analysis: Results – TL: EL1; FL: EL2 (TS

LCC and PBP analysis results for each CCW Equipme

Equipment Class Avg. LCC 2012$ Avg. LCC Savings 2012$ Net Cost % No Impact % Net Benefit % 

Multi‐Family TL 5,450 259 0 1 99 

Multi‐Family FL 4,335 285 4 39 61 

Laundromat TL 4,900 145 5 1 99 

Laundromat FL 4,030 235 0 39 61 
65

Request for Comment

Issue 3: DOE requests comments, information and data the equipment lifetimes developed for multi-family and laundromat applications for both front-loading and top-loCCW. DOE welcomes further input on the multi-family, commeclothes washer lifetimes of 11.25 years on average, a 15year maximum, and a 7.0 year minimum. DOE also welcomes further input on the laundromat avelifetime assumption of 7.125 years on average, a 9.3 yeamaximum, and a 5.0 year minimum.
66

Request for Comment

Issue 5: DOE requests comments, information, and datthe repair and maintenance costs for front-loading and toloading CCW equipment classes. Specifically, whether rcosts for CCW equipment would increase at the efficienclevels indicated in today’s proposed rule due to any chanthe design, materials, and components used in order to with the new efficiency standards.
67

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
68

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
69

Shipments Analysis

Purpose

• Shipments Analysis

– To estimate commercial clothes washer shipments over time.

• National Impact Analysis

– To estimate the National Energy Savings (NES) from comme

washer energy conservation standards at different efficienc

– To estimate the national economic impact on the nation (o

Present Value (NPV)) from commercial clothes washer ene

conservation standards at different efficiency levels.
70

Shipments Analysis

Approach

• Estimate base‐case shipments forecasts (2018–2047)

– Develop a shipments model that accounts for shipments to:

• New construction: New housing construction forecasts multiplied by 

equipment ownership.

• Replacements: Equipment retirement functions (equipment lifetimes

equipment stock.

• Historical shipments used to calibrate shipments model.

– Non‐replacements (retired units not replaced).

• Estimate standards‐case shipments forecasts (2018–2047)

– Developed with same data as used to estimate base‐case forecast– Examined purchase price and operating cost changes due to stand

‘relative’ price elasticity of demand.

• No conclusive price impact on purchases.

• Cross price elasticity describing the interactions between top‐l

front‐loading washer purchases due to price increases were co

– Market share forecast included cross‐price forecast fashioned afte

washer data
71

Shipments Analysis

Product Class Market Shares: Clothes Washe

• DOE fit AHAM top‐loading and front‐loading historical market s

model based on shifts occurring as a result of cross‐price elasti

• The model shows an increasing market share for front‐loading 

loading product class decreases by the end of the analysis per

• Market Share Forecast by Equipment Class for

(TL: EL1; & FL: EL2 ) ‐ TSL 2
72

Shipments Analysis Results

Results

Top-Loading Washers Front-Loading Wa
73

National Impact Analysis

Approach

• National energy savings calculated from 2018‐2047.

• National NPV calculated for equipment shipments entering the building stock from 2018‐• Base case incorporates the penetration of higher efficiency equipment.

• Standards “roll up” inefficient equipment but do not affect efficient equipment.

• Once a standard is in place, old equipment goes out of the inventory according to the bas

mix. New equipment is sold to replace equipment according to the new efficiency mix.

• Use national average equipment prices, annual energy use, energy prices, annual repair a

expenditures from LCC analysis. Streams of energy use and total costs calculated over an

and costs discounted to the present.

Front‐Loading Washers

CSL TSL Efficiencies Market Shares Base Case Trial Standard Lev

MEFJ2 IWF 1 2 

Baseline ‐ 1.65 5.20 28.0% 0.0% 0.0% 

1 1 1.80 4.48 34.0% 62.0% 0.0% 2 2 2.00 4.13 38.0% 38.0% 100.0% 3 3 2.20 3.92 0.0% 0.0% 0.0% 

SWEF (MEFJ2)* 1.83 1.88 2.00 

SWEF (IWF) 4.55 4.35 4.13 

* Shipment-weighted efficiency (SWEF) , expressed in terms of MEFJ2
74

Request for Comment

Issue 4: DOE requests comments, information and data the base case efficiency distributions of CCWs. Given thmarket share efficiency data for 2010-2011 were used to develop estimated base case efficiency distributions in tcompliance year (2018), DOE seeks more historical marshare efficiency data which would be useful for projectinbase case and standards case efficiency distributions foanalysis period.
75

Request for Comment

Issue 10: DOE welcomes stakeholder input and estimathe effect of amended standards on future CCW equipmshipments. DOE also welcomes input and data on the celasticity estimates used in the analysis.Specifically, to estimate the impact on shipments of the pincrease for the considered efficiency levels, DOE used cross price elasticity approach to measure the change in market share of top-loaders caused by a change in the pfront loaders. 

Issue 7: DOE requests comment on any potential reboueffect with more efficient CCW equipment.
76

Trial Standard Levels

Selection of Trial Standard Levels

• Purpose

– To develop a list of standard levels from which impacts are weighed and a 

standard level is selected.

– Each trial standard level consists of a set of potential minimum efficiency 

equipment classes, and may vary between equipment classes; and

– NOPR analyses assess impacts for trial standard levels (not equipment cla

• Method

– Trial standard levels are assembled from the equipment classes identified 

– Each trial standard level consists of the standard levels from each equipm

meets a certain set of criteria.

• TSL 1: First standard level is taken from each equipment class representing leas

change.

• TSL 2: Standard levels for each equipment class is selected as an intermediate 

and TSL1 to represent the additional efficiency level that has been analyzed foequipment class

• TSL 3: Standard level represents the maximum technologically feasible (“max‐t

in energy efficiency for each equipment class.
77

Trial Standard Levels

Trial Standard Levels for the NOPR

Equipment Type

Efficiency Levels (MEFJ2/IWF)

Baseline TSL1 TSL2 

FL: EL0

TL: EL0

FL: EL1

TL:EL1

FL: EL2

TL:EL1

Front Loading CCW Units 1.65/5.5 1.80/4.5 2.00/4.0 2

Top Loading CCW Units 1.15/8.9 1.35/8.8 1
78

NIA Results

TSL 1 TSL 2 

National Full‐Fuel‐Cycle Energy Savings (quads)

30‐Year Shipments 0.10 0.11 

NPV of consumer benefits (billion 2012$)

7% Discount Rate (30‐Year Shipments) 0.31 0.41 3% Discount Rate (30‐Year Shipments) 0.72 0.94 

Cumulative Shipments (million units)

Front Loading (Base Case = 2.8 million) 2.8 2.8 Top Loading (Base Case = 3.5 million) 3.5 3.5 Total (Base Case = 6.3 million) 6.3 6.3 
79

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
80

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
81

• Purpose

– To assess the impacts of standards on manufacturers;

– To identify and estimate impacts on manufacturer subgroup

be more severely affected than the industry as a whole; and

– To examine the impacts on direct employment, product com

manufacturing capacity, and cumulative regulatory burdens 

industry.

• Methodology

– Analyze industry cash flow and industry net present value (I

through use of the Government Regulatory Impact Model (G

– Interview manufacturers to refine inputs to the GRIM, deve

subgroup analyses, and address qualitative issues.

MIA: Overview
82

• Phase 1

– DOE creates an industry profile to characterize the market a

important issues that require further investigation.

• Phase 2

– DOE prepares an industry cash flow model and an interview

questionnaire to guide subsequent discussions with manufa

• Phase 3

– DOE interviews manufacturers and assesses the impacts of s

both quantitatively (using the GRIM) and qualitatively (impa

employment, competition, manufacturing capacity, and regu

burden).

MIA: Methodology

Industry profile

Develop preliminary GRIM

Develop interview guide

Interviews& industrysubgroupanalyses

Assess employmcompeticapacityregulatoburdens

Phase 1 Phase 2 Phase 3
83

• Market Model Challenges

– Manufacturers emphasized that the profit structure of the co

clothes washer market, which emphasizes maximizing the nu

“turns per day,” may conflict with increased levels of product 

the efficiency increases lead to higher‐capacity tub volumes o

times—both of which would reduce the total number of turn

• Consumer Behavior

– Manufacturers expressed concern that energy efficiency effo

inherently less effective in the commercial clothes washer ma

markets for residential appliances, including residential cloth

• Customer Satisfaction Impacts

– Manufacturers stressed that future energy conservation stan

have an adverse impact on cleaning performance and reliabil

thus compromise consumer utility.

MIA: Key Issues (1 of 2)
84

• Technology Limits

– Some manufacturers emphasized that technology has not cha

the last commercial clothes washers standard came into effec

2013 and that products currently at the max tech are not trul

products.

• Competitive Impacts

– Manufacturers expressed concerns relating to the disproport

competitive impacts on manufacturer subgroups resulting fro

amended standard.

MIA: Key Issues (2 of 2)
85

• DOE modeled two markup scenarios.

– Preservation of Gross Margin Percentage– Preservation of Operating Profit

Manufacturer Impact Analysis: Markup Scenar

Lower Bound

Profitability Scenario

(Most Severe for Manufacturers)

Upper Bound

Profitability Scenar

(Least Severe for

Manufacturers)

Preservation of Operating

Profit Markup Scenario

Preservation of Gross M

Scenario
86

Manufacturer Impact Analysis: Industry INPV R

Summary of TSL 2:

• Expected INPV change of ‐4.9%

• Product conversion costs total $10.2M for the industry

• Because the design options associated with TSL 2 relate to co

and different cycle options, rather than material changes to t

itself, nearly all of the impacts on INPV at TSL 2 can be attribu

$10.2 million in product conversion costs.

Summary of Results

Units Base Case

Trial Standard Le

12

INPV 2012$ Millions 124.2 118.3 118.2 

Change in INPV

2012$ Millions ‐ (5.9) (6.0) 

(%) ‐ (4.7) (4.9) 

Total Conversion

Costs 2012$ Millions ‐ 9.9 10.2 
87

Manufacturer Impact Analysis: Industry INPV R

Issue 16: DOE requests comment on the estimated magnitude of capital and product conversion costs.
88

• The Small Business Administration (SBA) has set a size 

1,000 employees or less for the category “Other Comm

Service Industry Machinery Manufacturing.”

• DOE searched several publicly available databases to id

potential domestic small business manufacturers.

– These included the Small Business Administration (SBA), DOE

Certification Management System (CCMS), various trade asso

and Dun & Bradstreet.

• DOE identified no small business CCW manufacturers.

Manufacturer Impact Analysis: Small Business 
89

• Although not a small business per the SBA definition, one manufa

identified as having significant commercial clothes washer marke

much lower revenues than its diversified competitors. This manu

business is highly concentrated in the production of both comme

residential laundry products.

• DOE assigned this manufacturer its own sub‐category, the “Low‐V

Manufacturer” (LVM), to evaluate the disproportionate impacts o

standards for commercial clothes washers on this manufacturer.

• The LVM could experience disproportionate impacts relative to la

competitors due to:

– Lower total production volumes / Relative focus on commerc

market

– Ability to access capital

– Pricing for key components

Manufacturer Impact Analysis: LVM Impacts
90

Manufacturer Impact Analysis: Small Business and L

Issue 17: DOE seeks comment on the number of small manucommercial clothes washers; and on the potential impacts of astandards on those small businesses and on the LVM.
91

DOE analyzed the potential change in production workers resulting from an 

conservation standard.

– In the base case, DOE estimates the industry employs 334 productio

– Upper Bound: At TSLs 1 and 2, the vast majority of design options co

component swaps. Thus, DOE does not expect any changes in emplo

industry shipments remain stable. However, upper bound shows em

growth at TSL 3 due to increases in labor content of equipment.

– Lower bound: DOE models the worst case scenario of job loss due to 

foreign production. However, based on interviews, this does not app

likely scenario for most manufacturers at TSL2.

Manufacturer Impact Analysis: Direct Employment I

Issue 18: DOE requests comment on expected changes to direct em

the commercial clothes washers industry as a result of amended sta

TSL 1 TSL 2 TSL 3

Change in Direct

Employment

0 ‐

(334)

0 ‐

(334)

30 ‐

(334
92

Manufacturer Impact Analysis: Cumulative Regulato

Issue 14: DOE seeks input on the cumulative regulatory burdbe imposed on industry either from recently implemented rulethese products or other rulemakings that affect the same indu

• DOE conducted an analysis of cumulative regulatory b

impacting commercial clothes washer manufacturers i

looks at other significant product‐specific regulations t

take effect 3 years before or after the 2018 compliance the amended energy conservation standards for commclothes washers.

• DOE also notes that amended standards for CCWs bec

effective on January 8, 2013.

• Chapter 12 of the TSD provides a full description of cu

regulatory burdens.
93

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
94

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
95

Consumer Subgroup Analysis• Purpose

– To evaluate the economic impacts of standards on consum

who may be disproportionately impacted compared with t

user population.

• Method

– DOE identified small businesses that could be disproportio

affected, and examined the impact of proposed standards 

– DOE used the LCC spreadsheet model to determine the im

subgroups.

• Output

– LCC savings and simple payback period (in years) for the ide

customer subgroup.

– Determined that the subgroup was not disproportionately 

the standard.
96

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
97

Emissions Analysis• DOE estimates the cumulative emissions reductions 

from amended energy conservation standards. DOE 

full‐fuel‐cycle emissions. Thus, both power plant em

“upstream” emissions are included in the analysis.

– Includes fugitive methane emissions.

Cumulative Emissions Reduction for Potential Standards for CClothes Washers

Trial Standard Le

12 

CO2 (million metric tons) 4.94 5.87 

SO2 (thousand tons) 3.99 4.36 NOX (thousand tons) 7.26 9.10 Hg (tons) 0.00 0.01 N2O (thousand tons) 0.07 0.08 CH4 (thousand tons) 40.77 50.14 

Details of the Emissions Analysis can be found in chapter 15 of the TSD
98

Emissions Analysis: Monetization• DOE uses the most current Social Cost of Carbon (SC

developed by interagency process.

– SCC is intended to be a monetary measure of the incremen

resulting from greenhouse gas (GHG) emissions, including 

limited to agricultural productivity loss, human health effec

damage from rising sea level, and changes in the ecosystem

• The most recent (2013) U.S. government interagency 

of the SCC for emissions in 2015 are $11.8, $39.7, $6

$117.0 per metric ton avoided (2012 dollars).

– The SCC in constant dollars increases over time

• DOE also monetizes the NOx emissions reductions re

from amended standards. The medium estimate is $ton of NOx.

Details of the Emissions Monetization Analysis can be found in chapter 16 of the TSD
99

Emissions Monetization Results: Present Value of CO2 Reduction 

TSL

SCC: $11.8 per

metric ton @ 5%

discount

rate,

Average

SCC: $39.7 per

metric ton @ 3%

discount

rate,

average

SCC: $61.2 per

metric ton @ 2.5%

discount

rate,

average

SCC

metr

d

1 32.7 152 242 2 38.7 180 287 3 58.8 272 434 

Note: For each of the four cases, the corresponding SCC value for emissions in 2015 is $11.8, $

and $117.0 per metric ton

Details of the Emissions Monetization Analysis can be found in chapter 16 of the TSD
100

Request for Comment

Issue 13: DOE seeks comment on the application of the nvalues used to determine the social benefits of CO2 emiss

reductions over the rulemaking analysis period.The rulemaking analysis period covers from 2018 to 2047 additional 50 years to account for the lifetime operation of equipment purchased in that period.In particular, DOE solicits comment on its derivation of SCafter 2050, where the agency applied the average annual grate of the SCC estimates in 2040−2050 associated with ethe four sets of values.
101

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
102

Utility Impact Analysis• Purpose

− To estimate the changes in electric installed capacity and g

result for each trial standard level (TSL).

• Method

− The NES is used to provide a stream of energy savings over 

period

− The Energy Information Administration’s National Energy M

System (NEMS) is modified to represent the impacts of DO

program (modified code is known as NEMS‐BT)

• Output

− Reductions in total electricity generation− Reductions in primary fuel (coal, natural gas etc.) consump− Changes to the mix of electricity generation by fuel type− Changes to total installed capacity

Details of the Utility Impact Analysis can be found in chapter 14 of the TSD
103

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
104

Employment Analysis• Purpose

− To estimate the net jobs created or eliminated nationally a

consequence of amended energy conservation standards. T

includes direct and indirect employment impacts.

• Method

− Uses the ImSET (Impact of Sector Energy Technologies) mo

evaluation of indirect employment impacts.

− The changes in equipment and energy expenditures are tak

the National Energy Savings Analysis.

− Direct employment impacts to the CCW industry are develo

the Manufacturer Impact Analysis (chapter 12).

• Output

− Change to commercial and energy sector employment as a

consequence of amended energy conservation standards

Details of the Employment Impact Analysis can be found in chapter 13 of the TSD
105

NOPR Rulemaking Stage

Market & Technology

ScreeningAnalysis

EngineeringAnalysis

Energy &Water UseCharacterization

ShipmentsAnalysis

NationalImpactAnalysis

Markups forEquipmentPriceDetermination

Life-CycleCost andPayback Period Analysis

Manufacturer Impact Analysis

NOPR Framework

Document

Final

Rule
106

Regulatory Impact Analysis• Purpose

– To investigate the national impacts due to non‐regulatory alterna

with mandatory energy conservation standards.

– The non‐regulatory alternatives that DOE analyzed include:

• No New Regulatory Action;• Consumer Rebates;

• Commercial Customer Tax Credits;

• Voluntary Energy‐Efficiency Targets—ENERGY STAR;

• Manufacturer Tax Credits;

• Early Replacement; and

• Bulk Government Purchases.

• Method

– Modify NIA spreadsheet model to consider the above scenarios a

effect on adoption of equipment at the proposed standard levels

• Output

– National Energy Savings and Net Present Value of the non‐regulat

alternatives.

Details of the Regulatory Impact Analysis can be found in chapter 17 of the TSD
107

Public Meeting Topics

1 History | Rulemaking Process Overview2 Market & Technology | Screening | Engineering3 Markups | Energy & Water Use4 Life‐Cycle Cost and Payback Period Analysis5 Shipments | National Impact Analysis6 Manufacturer Impact Analysis

7 Misc. NOPR Analyses8 Other Issues and Closing Remarks
108

Closing Remarks

Meeting participants are invited to provide comon any other issues pertaining to this rulemakin
109

How to Submit Written Comments

In all correspondence, please refer to the CCW rulemaking by:

– Standards for Commercial Clothes Washers

– Docket Number EERE‐2012‐STD‐0020

– Regulation Identification Number (RIN) 1904‐AC77

Email: CommClothesWashers‐2012‐STD‐0020@ee.doe.gov

Postal: CourierMs. Brenda Edwards Ms. Brenda Edwards

U.S. Department of Energy U.S. Department of Energy

Building Technologies Program, Building Technologies Prog

Mailstop EE‐5B 950 L’Enfant Plaza, SW

1000 Independence Avenue, SW Washington, DC 20024

Washington, DC 20585‐0121 Tel: 202 586‐2945

Comment period closes May 5, 2014, 11:59 PM 
110 

Backup Slides
111

Commercial Clothes Washers: Annual Energy and Water 

• Annual Energy & Water Use = Per‐Cycle Use x Cycles per year

• Per‐cycle energy use components

– Water‐heating

– Drying– Machine

• Drying energy use (RMC) and machine energy use are a function of MEF

– Based on residential clothes washer data

• Number of cycles per day

– Multi‐Family: Average = 3.0; Range = 1.5 to 4.3

– Laundromats: Average = 4.1; Range = 2.8 to 6.0

• Annual energy and water use of baseline top‐loading clothes washer (1.15 

IWF)

– Multi‐Family

• Energy use – Electric = 1681 kWh/year (143 kWh WH; 1217 kWh drying; 321 

• Energy use – Gas = 8.93 MMBtu/year (2 MMBtu WH; 6.98 MMBtu drying)

• Water use = 40 1000‐gallons/year

– Laundromats

• Energy use = 481 kWh/year (0 kWh WH; 0 kWh drying; 481 kWh machine)• Energy use – Gas = 21 MMBtu/year (4 MMBtu WH; 17 MMBtu drying)• Water use = 60 1000‐gallons/year

Energy Use and Water Use Characterization
112

NIA Results

TSL 1 TSL 2 

National Full‐Fuel‐Cycle Energy Savings (quads)

30‐Year Shipments 0.097 0.114 9‐Year Shipments 0.03 0.03 

NPV of consumer benefits (billion 2012$)

7% Discount Rate (30‐Year Shipments) 0.31 0.41 3% Discount Rate (30‐Year Shipments) 0.72 0.94 7% Discount Rate (9‐Year Shipments) 0.15 0.19 3% Discount Rate (9‐Year Shipments) 0.24 0.31 

Cumulative Shipments (million units)

Front Loading (Base Case = 2.8 million) 2.813 2.812 Top Loading (Base Case = 3.5 million) 3.465 3.466 Total (Base Case = 6.3 million) 6.278 6.278 

*For the preservation of gross margin percentage markup scenario
113

Baseline TSL 1 TSL 2 

Multi‐Family ApplicationTotal Installed Cost (2012$) 1853 1853 1854 Mean LCC Savings (2012$) ‐ 238 298 Median Payback Period (years) ‐ 0.0* 0.02 

% Consumers with Net Cost ‐ 0 0 

% Consumers with No Impact ‐ 73 39 

% Consumers with Net Benefit ‐ 27 61 

Laundromat ApplicationTotal Installed Cost (2012$) 1853 1853 1854 Mean LCC Savings (2012$) ‐ 204 245 Median Payback Period (years) ‐ 0.0* 0.01 

% Consumers with Net Cost ‐ 0 0 

% Consumers with No Impact ‐ 73 39 

% Consumers with Net Benefit ‐ 27 61 

*The median payback periods of 0.0 result from changes in software control strategies (water levels, water

temperatures, and cycle settings available to the end user) that do not affect product manufacturing cost.

Manufacturers confirmed that they would not make any hardware changes to achieve these efficiency levels.

Life‐Cycle Cost and Payback Period Results – Front‐Loadi
114

Baseline TSL 1 TSL 2 

Multi‐Family ApplicationTotal Installed Cost (2012$) 1251 1251 1251 Mean LCC Savings (2012$) ‐ 268 268 

Median Payback Period (years) ‐ 0.0* 0.0* 

% Consumers with Net Cost ‐ 00

% Consumers with No Impact ‐ 11

% Consumers with Net Benefit ‐ 99 99 Laundromat Application

Total Installed Cost (2012$) 1251 1251 1251 Mean LCC Savings (2012$) ‐ 158 158 

Median Payback Period (years) ‐ 0.0* 0.0* 

% Consumers with Net Cost ‐ 00

% Consumers with No Impact ‐ 11

% Consumers with Net Benefit ‐ 99 99 *The median payback periods of 0.0 result from changes in software control strategies (water levels, water

temperatures, and cycle settings available to the end user) that do not affect product manufacturing cost.

Manufacturers confirmed that they would not make any hardware changes to achieve these efficiency levels.

Life‐Cycle Cost and Payback Period Results – Top‐Loa
115

Life‐Cycle Cost and Payback Period – Summary Resu

Baseline TSL 1 TSL 2 

Total Installed Cost (2012$)Front‐loading CCW** $1,853 $1,853 $1,854 Top‐loading CCW** $1,251 $1,251 $1,251 Weighted‐Average $1,492 $1,492 $1,492 First Year’s Energy Cost (2012$)*

Front‐loading CCW** $151 $139 $127 

Top‐loading CCW** $245 $209 $209 

Weighted‐Average $207 $181 $176 Mean LCC Savings (2012$)*Front‐loading CCW** ‐ $233 $290 

Top‐loading CCW** ‐ $251 $251 

Weighted‐Average ‐ $244 $267 

Median Payback Period (years)

Front‐Loading CCW** ‐ 0.00 0.02 

Top‐loading CCW** ‐ 0.00 0.00 

Weighted‐Average ‐ 0.00 0.01 

% Consumers with Net Cost

Front‐loading CCW** ‐ 0% 0% 

Top‐loading CCW** ‐ 0% 0% 

Weighted‐Average ‐ 0% 0% 

% Consumers with No Impact

Front‐loading CCW** ‐ 73% 39% 

Top‐loading CCW** ‐ 1% 1% Weighted‐Average ‐ 30% 16% 

% Consumers with Net BenefitFront‐loading CCW** ‐ 27% 61% 

Top‐loading CCW** ‐ 99% 99% 

Weighted‐Average ‐ 70% 84% 

** Results for front‐loading and top‐loading are weighted for the two applications (i.e. multi‐family and laundromats)
116

Emissions Impacts

TSL 1 TSL 2 

Emissions Reduction through 2030 (Total FFC Emissions)

CO2 (million metric tons) 1.47 1.70 Cumulative Emissions Reduction (Total FFC Emissions)CO2 (million metric tons) 5.0 5.9 SO2 (thousand tons) 4.0 4.4 NOx (thousand tons) 7.3 9.1 Hg (tons) 0.00 0.01 N2O (thousand tons) 0.07 0.08 CH4 (thousand tons) 40.8 50.1 Value of Cumulative Emissions ReductionCO2 (million 2012$)* 32.9 to 469.1 38.7 to 555.8 58NOx ‐ 3% discount rate (million 2012$) 9.10 11.43 NOx ‐ 7% discount rate (million 2012$) 3.85 4.86 

* Range of the economic value of CO2 reductions is based on November 2013 estimates of the global benef

CO2 emissions.
117

* Range of the economic value of CO2 reductions is based on November 2013 estimates of the global benefit of 

reduced CO2 emissions.

Discount Rate TSL 1 TSL 2 

Benefits (2012$ million)

Operating Cost Savings

7% 23 31 

3% 35 46 

CO2 at 12.9 2012$/t* 5% 2 2 

CO2 at 40.8 2012$/t 3% 8 9 

CO2 at 62.2 2012$/t 2.5% 11 13 

CO2 at 117 2012$/t 3% 23 28 NOX at 2,639 2012$/t 7% 0.29 0.37 

3% 0.45 0.57 

Total

7% plus CO2 range 26 to 47 33 to 58 

7% 31 40 

3% plus CO2 range 38 to 59 49 to 75 

3% 43 56 

Costs (2012$ million)

Incremental ProductCosts

7% 0.00 0.02 

3% 0.00 0.02 

Net Benefits/Costs (2012$ million)Total

7% plus CO2 range 26 to 47 33 to 58 

7% 31 40 

3% plus CO2 range 38 to 59 49 to 75 

3% 43 56 

Annualized Benefits & Costs
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Emissions Monetization Results: Present Value of NOx Reduction Details of the Emissions Monetization Analysis can be found in chapter 16 of the TSD

TSL 3% discount

rate

7% discount

rate

1 9.10 3.852 11.4 4.863 13.7 5.63

Note: Based on medium estimate: $2639 per ton.
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Utility Impact Analyses: Results

Year

TSL

1 23

Installed Capacity Reduction (MW)

2020 2.25 2.43 4.84

2025 8.79 9.51 18.9

2030 19.6 21.3 42.4

2035 30.4 33.1 66.0

2040 50.7 55.5 111

Electricity Generation Reduction (GWh)

2020 61.7 66.6 133

2025 148 161 3202030 198 215 4292035 213 232 4632040 217 237 473

Details of the Utility Impact Analysis can be found in chapter 14 of the TSD