1

- i CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUM ENT

................................ ................................ ................. 1

- 1

1.2 OVERVIEW OF STANDARD S FOR COMMERCIAL CLO THES WASHERS

......... 1

- 1

1.3 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

................... 1

- 1

1.4 STRUCTURE OF THE DOC UMENT

................................ ................................ ............ 1

- 5

LIST OF TABLES

Table 1.3.1 Analyses Under the Process Rule

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- 31-1 CHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUM ENT

This technical support document (TSD) is a stand

- alone report that provides the technical analyses and results supporting the information presented in the final rule for commercial clothes

washers

.

1.2 OVERVIEW OF STANDARD S FOR COMMERCIAL CLO THES WASHERS

Titl e III of the Energy Policy and Conservation Act of 1975 (42 U.S.C.6291, et seq; “EPCA”), Pub. L. 94

- 163, sets forth a variety of provisions designed to improve energy efficiency. a Part C of title III, which for editorial reasons was re

- designated as Part A

- 1 upon incorporation into the U.S. Code (42 U.S.C. 6311

– 6317, as codified), establishes the "Energy Conservation Program for Certain Industrial Equipment." These include commercial clothes washers, the subject of this rulemaking . (42 U.S.C. 6311(1)(H))

.

The Energy Policy Act of 2005 (EPACT) established the first energy conservation standards for commercial clothes washers. (42 U

. S

. C

. 6313(e)(1)) EPACT directed DOE to conduct two rulemakings to determine whether the established standards should be amended

. DOE published its first final rule amending commercial clothes washer standards on January 8,

2010 , which apply to commercial clothes washers manufactured on or after January 8, 2013. EPACT require d the second final rule to be published by January 1, 201 5, which will apply to

commercial clothes washers manufactured three years after the date on which the final amended standard is published. (42 U

. S

. C

. 6313(e)(2)(B)) This current rulemaking satisfies the requirement to publish the second final rule by January 1, 2015.

1.3 P ROCESS FOR S ETTING ENERGY C ON S ERVATION S TANDARDS

Under EPCA, when DOE is analyzing whether to establish new or amended standards, it must consider, to the greatest extent practicable, the following seven factors (42 U.S.C. 6295 (o)(2)(B) (i) and 6316(a) ):

1) the economic impact of the standard on the manufacturers and consumers of the affected products;

a All references to EPCA refer to the statute as amended through the American Energy Manufacturing Te chnical

Corrections Act

, Pub. L. 112

- 210 (Dec. 18, 2012).1-2

2) the savings in operating costs throughout the estimated average life of the product compared to any increases in the initial cost or maintenance expense;

3) the total projected amount of energy savings likely to result directly from the imposition

of the st andard;

4) any lessening of the utility or the performance of the products likely to result from the imposition of the standard;

5) the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from th e imposition of the standard;

6) the need for national energy conservation; and

7) other factors the Secretary considers relevant.

Other statutory requirements are set forth in 42 U.S.C. 6295 (o)(1)

– (2)(A), (2)(B)(ii)

– (iii), and (3)

– (4) and 42 U.S.C. 6316(e ).

DOE considers st akeholder participation to be an important part of the process for setting energy conservation standards. Through formal public notifications ( i.e.

, Federal Register notices) , DOE actively encourages the participation and interaction o f all stakeholders during the comment period in each stage of the rulemaking. Beginning with the framework document and during subsequent comment periods, interactions among stakeholders provide a balanced discussion of the information that is required for the standards rulemaking.

Before DOE determines whether or not to adopt a proposed energy conservation standard, it must first solicit comments on the proposed standard. ( 42 U.S.C. 6295(m)(2)(B); 6295(p)(2) ; and 6316(a) ) Any new or amended standard must be designed to achieve significant additional conservation of energy and be technologically feasible and economically justified. (42

U.S.C. 6295(o)(2)(A) and 6316(a) ) To determine whether economic justification exists, DOE must review comments on the prop osal and determine that the benefits of the proposed standard exceed its burdens to the greatest extent practicable, weighing the seven factors listed above. (42 U.S.C. 6295 (o)(2)(B)(i) and 6316(a) )

After the publication of the framework document, the energy conservation standards rulemaking process involves three additional, formal public notices, which DOE publishes in the Federal Register . The first of the rulemaking notices is a notice of public m eeting ( NOPM )

, which is designed to publicly vet the models and tools used during the rulemaking and to facilitate public participation before the next stage. The second notice is the notice of proposed rulemaking ( NOPR ) , which presents a discussion of com ments received in response to the

NOPM , the results of the analyses performed, and the proposed energy conservation standards

for the product. The third notice is the final rule, which presents a discussion of the comments received in response to the NOPR; the revised analyses; DOE’s weighting of these impacts; the1-3

amended energy conservation standards DOE is adopting for the product; and the compliance dates of the amended energy conservation standards.

DOE initiated the current rulemaking on August 13, 2012 by publishing a notice announcing the availability of the framework document, the Energy Conservation Standards Rulemaking Framework Document for Commercial Clothes Washers . In this notice, DOE also announced a public meeting and requested comment on the matters raised in the framework

document. 77 FR 48108 ( August 13, 2012)

. The framework document described the procedural and analytical approaches that DOE anticipated using to evaluate energy conservation standards

for commercial clothes washers and i dentified various issues to resolve during the rulemaking.

The NOPM is available at http://www.regulations.gov/#!documentDetail;D=EERE

- 2012

- BT

STD

- 0020

- 0002 and t he framework document is available at http://www.regulations.gov/#!documentDetail;D=EERE

- 2012

- BT

- STD

- 0020

- 0001

.

On September 24, 2012 , DOE held the framework document public meeting and discussed the issues detailed in the framework document. DOE also described the analyses that it planned to conduct during the rulemaking , listed in Table 1.3

. 1 . Through the public meeting, DOE sought feedb ack from interested parties on these subjects and provided information regarding the rulemaking process that DOE would follow. DOE received comments from interested stakeholders regarding the August 2012 notice, including those received at the September 20 12 framework public meeting

.

Table 1.3

. 1 Analyses Under the Process Rule

Preliminary Analyses 1 NOPR Final Rule

Market and technology assessment Revised preliminary analyses Revised NOPR analyses

Screening analysis Life

- cycle cost sub

- group analysis

Engineering analysis Manufacturer impact analysis

Energy use analysis U tility impact analysis

Markups for equipment price

determination Emissions analysis

Life

- cycle cost and payback period analysis Employment impact analysis

Shipments analysis Regulatory impact analysis

National impact analysis

Preliminary manufacturer impact analysis

1. In the current rulemaking, DOE conducted the analyses listed under Preliminary Analyses as part of the NOPR analysis.1-4

Following the framework meeting, DOE gathered additional information, held discussions with manufacturers, performed product testing and teardowns, and performed the various analyses described in the framework document, including the engineeri ng, life

- cycle cost, payback period, manufacturer impact, and national impact analyses. On March 4, 2014, DOE published a NOPR (“the March 2014 NOPR”) and notice of public meeting. 79 FR 12301. In the March 2014 NOPR, DOE presented the results of its initi al analyses, addressed comments received in response to the framework document and public meeting, and proposed amended standards for commercial clothes washers. DOE also published an accompanying technical support document (TSD) that described the results of each analysis in greater detail.

On April 21, 2014, DOE held the NOPR public meeting and discuss ed the issues detailed in the NOPR. Interested parties commented on various aspects of the proposed rule and submitted supplemental written comments. Following the public meeting, DOE gathered additional information and performed additional analysis to supplement the analyses presented in the NOPR, including the engineering, life

- cycle cost, payback period, manufacturer impact, and national impact analy ses. The results of these analyses are detailed in this TSD. DOE considered

t he comments received since publication of the March 2014 NOPR , including those received at

the NOPR public meeting , in developing the amended standards for commercial clothes wash ers.

As part of the information gathering and sharing process, DOE organized and held

interviews with manufacturers of the commercial clothes washers considered in this rulemaking as part of the engineering analysis. DOE selected companies that represent ed production of all types of products on the market , ranging from small to large manufacturers, and included the Association of Home Appliance Manufacturers (AHAM) member companies. DOE had four objectives for these interviews: (1) solicit manufacturer fe edback on the draft inputs to the engineering analysis; (2) solicit feedback on topics related to the manufacturer impact analysis; (3) provide an opportunity, early in the rulemaking process, to express manufacturers’ concerns to DOE; and (4) foster coope ration between manufacturers and DOE. DOE incorporated the information gathered during the engineering interviews with manufacturers into its engineering analysis ( chapter 5) and the manufacturer impact analysis ( chapter 12).

DOE developed spre adsheets for the engineering, Life

- Cycle Cost (LCC) Payback Period (PBP)

, and national impact analyses for each product. The LCC spreadsheet calculates the LCC and PBP at various energy efficiency levels. The national impact analysis spreadsheet calculates

th e nati onal energy savings and national ne t present values at various energy efficiency levels. This spreadsheet includes a model that forecasts the impacts of amended energy conservation standards at various levels on product shipments. All of these spreadsheets are available on the

DOE website for commercial clothes washers at : http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/46

.

DOE can also provide quantitative outputs from its analyses in machine

- readable format upon request. For example, outputs from trial runs of the LCC Monte Carlo simulations can be provided in such a format.1-5

1.4 STRUCTURE OF THE DOC UMENT

This TSD outlines the analytical approaches used in this rulemaking. The TSD consists of the following chapters and appendices:

Chapter 1 Introduction: provides an overview of the appliance standards program

and how it applies to this rulemaking, and outlines the structure o f the

document.

Chapter 2 Analytical Framework: describes the rulemaking process.

Chapter 3 Market and Technology Assessment: characterizes the market for the

considered products and the technologies available for increasing product efficiency.

Chapte r 4 Screening Analysis: identifies all the design options that improve

efficiency of the considered products, and determines which technology options are viable for consideration in the engineering analysis.

Chapter 5 Engineering Analysis: discusses the methods used for developing the

relationship between increased manufacturer price and increased efficiency.

Chapter 6 Markups for Equipment Price Determination : discusses the methods

used for establishing markups for converting manufacturer prices to

customer product costs

.

Chapter 7 Energy and Water Use Determination : discusses the process used for

generating energy

- use estimates for the considered products as a function of standard levels.

Chapter 8 Life

- Cycle Cost and Payback Period Analysis: discusses the effects of

standards on individual customers and users of the products and compares the LCC and PBP of products with and without higher efficiency stan dards.

Chapter 9 Shipments Analysis: estimates shipments of the products over the 30

-

year analysis period that is used in performing the national impact analysis (NIA).

Chapter 10 National Impact Analysis: assesses the national energy savings, and the

national net present value of total consumer costs and savings, expected to result from specific, potential energy conservation standards

.1-6

Chapter 11 Life

- Cycle Cost Subgroup Analysis: discusses the effects of standards

on different subgroups of consumer s.

Chapter 12 Manufacturer Impact Analysis: discusses the effects of standards on the

finances and profitability of product manufacturers.

Chapter 1 3 Emissions Analysis: discusses the effects of standards on three

pollutants

— sulfur dioxide (SO 2 ) , nitrogen oxides (NO x ), and mercury

— as well as carbon dioxide emissions.

Chapter 14 Monetization of Emission Reductions Benefits

Chapter 15 Utility Impact Analysis: discusses certain effects of the considered

standards on electric and gas utilities.

Chapter 16 Employment Impact Analysis: discusses the effects of standards on

national employment.

Chapter 17 Regulatory Impact Analysis: discusses the impact of non

- regulatory

alternatives to efficiency standards.

Appendix 5

- A AHAM Data Request

Appendix 6

- A Detailed Data for Markups

Appendix 7

- A Load Usage Factor in Commercial Laundry Applications

Appendix 8

- A User Instructions for Life

- Cycle Cost and Payback Period Spreadsheets

Appendix 8

- B Uncertainty and Variability

Appendix 8

- C Lifetim e Distributions

Appendix 9

- A Rela tive Price Elasticity of Demand for Clothes Washers

Appendix 10

- A Full

- Fuel

- Cycle Multipliers

Appendix 10

- B User Instructions for Shipments and National Impact Analysis

Spreadsheet s

Appendix 10

- C N ational Energy Savings and Net Present Value Using Alternative

Growth Scenarios1-7

Appendix 10

- D National Net Present Value of Consumer Benefits Using Alternative

Product Price Forecasts

Appendix 12

- A Manufacturer Interview Guide

Appendix 12

- B Government Regulatory Impac t Model

Appendix 14

- A Social Cost of Carbon for Regulatory Impact Analysis Under Executive

Order 12866

Appendix 14

- B Technical Update of Social Cost of Carbon for Regulatory Impact

Analysis Under Executive Order 12866

Appendix 17

- A Regulatory Impact Ana lysis: Supporting Materials