## Wednesday August 9, 1989



# W 

# Part



# Depart m 

# ent Energy

Office of Conservation and Renewable Energy

10 CFR Part 430 Energy Conservation Program for Consumer Products; Proposed Rule and
Notice

### a„ 744 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1909 / Proposed Rules

DEPARTMENT OF ENERGY



### Office of Conservation and Renewable Energy

10 CFR Part 430

[Docket No

. CE-RN -88-loll The purpose of this notice of proposed rulemaking is to provide interested persons an opportunity to comment on the proposed rule, and to invite interested persons to participate in the appliance energy conservation standards rulemaking process.

DATES : Written comments on the Energy Conservation Program for proposed rule must be received by the Consumer Products : Proposed Department by October 10, 1989. Rulemaking and Public Hearing oral views, data, and arguments may Regarding Energy Conservation be presented at the public hearing to be Standards for Three Types of held in Washington, DC, on September Consumer Produ cts 20, 1939 . Requests to speak at the

AGENCY : Office of Conservation and hearing must be received by the Renewable Energy, DOE. Department no later than 4:00 p.m.,

P,CTION: Proposed rule and public September 18, 1989. hearing. The hearing will begin at 9:30 a.m., on September 20, 1989.

SUMMAnY: The Energy Policy and The length of each presentation is
Conservation Act (EPCA), as amended limited'to 20 minutes. by the National Energy Conservation ADDRESSE S: Written comments, oral Policy Act (NECPA), the National statements, requests to speak at the Appliance Energy Conservation Act hearing and requests for speaker lists (NAECA) and the National Appliance are to be submitted to U.S. Department Energy Conservation Amendments of of Energy, Office of Conservation and 1988 (NAECA 1988), prescribes energy Renewable Energy, CE-43.1. conservation standards for certain Hearings and Dockets, Energy major household appliances, and Conservation Program for Consumer requires the Department of Energy Products, Docket No. CE-RM-88-101, (DOE) to administer an energy Room 6B-025, Forrestal Building, 1000 conservation program for these Independence Avenue, SW., products. Among other things, NAECA Washington, DC 20585, (202) 586-9320. requires DOE to consider amending the The h earing will be held at the U.S. energy conservation standards for Department of Energy, Forrestal dishwashers, clothes washers, and Building, Room 1E-245,1000 clothes dryers. Independence Avenue, SW., EPCA, as amended, prescribed Washington, DC. standards for dishwashers, clothes Copies of the transcript of the public washers and clothes dryers, effective hearing and public comments received January 1, 1988. In accordance with may be read at the DOE Freedom of NAECA, the Department has reviewed Information Reading Room, U.S. amendments to the prescribed Department of Energy, Forrestal standards. As a result of its review, Building, Room 1E-190, 1000 DOE proposes that revised standards for Independence Avenue, SW., dishwashers, clothes washers and Washington, DC 20585, (202) 586-6020, clothes dryers would result in a significant conservation of energy and would be economically justified. For clothes washers, the Department is not proposing a specific level within the range considered ; rather, DOE is soliciting comments and information from the public to be considered in promulgating the final rule , which will specify a specific level for clothes washers; the level selected could include no change to the standard level prescribed by NAECA. For dishwashers

, the Department is proposing a minimum energy efficiency
standard. For clothes dryers, the Department is proposing a prescriptive standard that would require clothes dryers to be Washington, DC 20585, (202) 586-9507. equipped with an automatic termination U.S. Department of Energy, CE-43.1, device, either a moisture termination or Docket No. CE-RM-88-101, Forrestal temperature termination device. Building, Room 6B-025, 1000 between the hours of 8:00 a.m. and 4:00 p.m., Monday through Friday, except Federal holidays. For more information concerning public participation in this rulemaking proceeding, see section V, "Public Comment Procedures," of this notice.
FOR FURTHER INFORtSATtOFN CONTACT: Michael J. McCabe, U.S. Department of Energy, Office of Conservation and Renewable Energy, Forrestal Building, Mail Station CE-132, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-9127. Eugene Margolis, Esq., U.S. Department 

### of Energy, Office of General Counsel,Forrestal Building, Mail Station GC12, 1000 Independence Avenue, SW., Independence Avenue, SW., Washington, DC 20585, (202) 586-9320.

SUPPLEMENTARY INFORMATiON:

1. Introduction
a. Authority b. Background

II. General Discussion

a. Test Procedures b. Technological Feasibility
1. General 2. Maximum Technologically Feasible Levels c. Energy Savings 1. Determination of Savings 2. Significance of Savings d. Rebuttable Presumption
e. Economic justification 1. Economic Impact on Manufacturers and
Consumers 2. Life-Cycle Costs 3. Energy Savings 4. Lessening of Utility of Performance of
Products 5. Impact of Lessening of Competition 6. Need of The Nation to Conserve Energy
7. Other Factors

III. Product-Specific Discussion

a. Dishwashers 1. Classes 2. Design Options
3. Comments on the Advance Notice of Proposed Rulemaking 4. Efficiency Levels Analyzed
b. Clothes Washers 1. Classes 2. Designs Options 3. Comments on the Advance Notice of Proposed Rulemaking 4. Efficiency Levels Analyzed c. Clothes Dryers 1. Classes 2. Design Options 3. Comments on the Advance Notice of Proposed Rulemaking 4. Efficiency Levels Analyzed

IV. Environmental, Regulatory Impact, Takings Assessment

, Federalism and Regulatory Flexibility Reviews

a. Environmental Review b. Regulatory Impact Review c. "Takings" Assessment Review
d. Federalism Review e. Regulatory Flexibility Review

V. Public Comment Procedures
a. Participation in Rulemaking
b. Written Comment Procedures c. Public Hearing d. Issues Requested for Comment

1. Introduction
a. Authority
Part B of Title III of the Energy Policy and Conservation Act (EPCA), Pub. L. 94-163, as amended by the National Energy Conservation Policy Act (`ECPA), Pub. L. 95-619, by the National Appliance Energy Conservation Act (NAECA), Pub. L. 100-12, and by the National Appliance Energy

### Federal Register / Vol. 54, No. 152 / Wednesday, Augus 9, 1989 / Proposed Rules 32745

Conservation Amendments of 1988 (N AECA 1988), Pub. L.10C 357,1 created the Energy Conservation program for Consumer Products other than Automobiles. The consumer products subject to this program (often referred to hereafter as "covered products") are: refrigerators, refrigerator-freezers and freezers; dishwashers; clothes dryers; water heaters; central air conditioners and central air conditioning heat pumps; furnaces; direct heating equipment; television sets; kitchen ranges and ovens; clothes washers; room air conditioners; fluorescent lamp ballasts; and pool heaters; as well as any other consumer product classified by the Secretary of Energy. Section 322. To date, the Secretary has not so classified any additional products. Under the Act, the program consists essentially of three parts: testing, labeling, and mandatory energy conservation standards, The Department of Energy (DOE or Department), it consultation with the
National Institute of Standards and Technology (NIST), is required to amend or establish new test procedures as appropriate for each of the covered products. Section 323. The purpose of the test procedures is to provide for test results that reflect the energy efficiency, energy use, or estimated annual operating costs of ea h of the covered products. Section 323(b)(3). A test procedure is not required if DOE determines by rule that one cannot be developed. Section 323(d)(1). One hundred and eighty days after a test procedure for a product is adopted, no manufacturer may represent the energy consumption of, or the cost of energy consumed by the product except as reflected in a test conducted according to the DOE test procedure. Section 323(c)(2), The Federal Trade Commission (FTC) is required by the Act to prescribe rules governing the labeling of covered products for which test procedures have been prescribed by DOE . Section 324(a). These rules are to require that each particular model of a covered product
bear a label that indicates its annual operating cost and the range of estimated annual operating coats for other models of that product. Section 324(c)(1). Disclosure of estimated operating cost is not required under
section 324 if the FTC determines that such disclosure is not likely to a_s,i.s't

i Part B of Title M of EPCA, as amended by NEC: A, TLS CA. and NAECA 1958, is referred to in
this notice as the "Act." Part B of Title Li is codified at 42 U.S.C. 8281 at seq. Part B of Title Ill of EPCA, as amended by NECPA only, is referred to in this
notice as NECPA. consumers in making purchasing decisions or is riot economically feasible. In such a case, FTC must require a different useful measure of energy consumption. Section 324(c). At the present time there are FTC rules requiring labels for the following products: room air conditioners, furnaces, clothes washers, dishwashers, water heaters, freezers, refrigerators and refrigerator-freezers, and central air conditioners. 44 FR 6345, November 19, 1919, and 52 FR 46888, December 10,
1987.

For each of 12 of the covered products, the Act prescribes an initial Federal energy conservation standard. Section 325 (b)-(h). The Act establishes effective dates for the standards in 1988, 1990,1992 or 1993, depending on the product, and specifies that the standards are to be reviewed by the Department within three to ter: years, also depending on the product. Section 325 (b)-(h). After the specified three- to ten-year period, DOE may promulgate new standards for each product; however, the Secretary may not prescribe any amended standard which increases the maximum allowable energy use, or decreases the minimum required energy efficiency, of a covered product. Section 325(1)(1). The Department's current review of standards is for dishwashers, clothes washers, and clothes dryers. Any new or amended standard is required to be designed so as to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. Section 325(1)(2)(A). Section 325(1)(2)(;3)(i) provides that before DOE determines whether a standard is economically justified, it must first solicit comments on a proposed standard. After reviewing comments on the proposal, DOE must then determine that the benefits of the standard exceed its burdens, based, to the greatest extent practicable, on a weighing of the following seven factors: 

### (1) The economic impact of the standard on the manufacturers and on the consumers of the products subject to such standard; (2) The savings in operating costs throughout the estimated average life of the covered product in the type for class) compared to any increase in the price of, ct its the initial charges for, or maintenance expenses of the covered products which are likely to result directly from the imposition of the
standard: (3) The total projected amount of energy savings likely to result directly from the imposition of the standard; (4) Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard; (5) The impact of any lessening of competition, determined in writing by the Attorney General, that is likely to result from the imposition of the standard; 

### (6) The need for national energy conservation; and (7) Other factors the Secretary considers relevant. In addition, the Act specifies criteria for petitions to DOE in regard to amendments to standards. Section 325(k). Under the Act, any person may petition the Department to conduct a rulemaking to amend a Federal energy conservation standard for any covered product. Section 325(k)(1). The Department must grant such a petition if it determines that an amended standard will result in significant conservation of energy, is technologically feasible and is cost-effective. Section 325(k)(2). Sections 325(k)(3) (A) and (E) stipulate that in no case may an amended standard apply to products manufactured within three years or five years, depending or. the product, after publication of the final rule establishing
a standard. Prior to proposing a new or amended standard, DOE is required to publish an advance notice of proposed rulemaking which specifies the type (or class) of covered product to which the rule may apply and which provides a 60-day period during which interested persons may submit written comments. Section 325[-)(1) (A) and (B). Section 326 of the Act authorizes the Secretary to require manufacturers to submit information or reports to assure that each covered product to which a standard applies meets the required energy efficiency level. The Act also specifies that in determining information requirements, DOE consider existing sources of information, including nationally recognized trade association certification programs. Section 326(d). Enforcement-related provisions of the Act provide for: (1) DOE to prescribe rules requiring manufacturers to allow the Department to observe testing and inspect results of testing conducted by the manufacturer (section 326(b)(5)); (21 manufacturers to supply to DOE a reasonable number of products for testing purposes (section 326(b)(3)); (3) manufacturers to submit information or reports necessary to ensure compliance (section 326(d)); and (4) injunctive relief against any prohibited act, including distribution of noncomplying products (section 334).

### 32746 Federal Register / Vol. 54, No. 152 / Wednesday , August 9, 1989 / Proposed Rules

b. Background
NECPA required DOE to establish mandatory energy efficiency standards
for each of 13 covered nroducts.2 These standards were to be designed to achieve the maximum improvement in energy efficiency that was technologically feasible and economically justified. NECPA provided, however, that no standard for a product be established if there were no test procedure for the product, or if DOE determined by rule either that a standard would not result in significant conservation of energy, or
that a standard was not technologically feasible or economically justified. In determining whether a standard was economically justified, the Department
was directed to determine whether the benefits of the standard exceeded its burdens by weighing the seven factors
discussed above. NECPA specified the priorities and procedures to be followed in adopting efficiency standards . Nine of the 13 covered products were given priority.
These nine products were: refrigerators and refrigerator-freezers; freezers; clothes dryers; water heaters; room air conditioners; home heating equipment not including furnaces; kitchen ranges and ovens; central air conditioners; and furnaces. The Depart m ent published an advance notice of proposed ru.lernaking for the nine priority products on January 2, 1979. 44 FR 20. On December 13, 1979, DOE published an advance notice of proposed rulemaking for dishwashers; television sets ; clothes washers; and humidifiers and dehumidifiers. 44 FR
72276. An advance notice for central air conditioners (heat pumps) was published on January 23, 1980. 45 FR 5602. After receiving comments on the January 2, 1979, advance notice, DOE published, on June 30, 1980, its first proposed rulemaking for the nine products. 45 FR 43976. (Hereafter referred to as the June 1980 proposal.) This NOPR set forth DOE's proposal concerning energy efficiency standards for the covered products. It also proposed comprehensive requirements for certification and enforcement of the standards , procedures for processing petitions by States that sought exemption for regulations subject to the

2 The consumer products covered by NECPA include; refrigerators and refrigerator-freezers; freezers; dishwashers; clothes dryers; water heaters;
room air conditioners ; home heating equipment not including furnaces ; television sets ; kitchen ranges and ovens; clothes washers; humidifiers and dehumidifiers; central air conditioners; and furnaces. general preemption requirements of NECPA, and small business exemptions. On April 2, 1982, DOE issued a further notice of proposed rulemaking with respect to the nine priority products. 47 FR 14424. (Hereafter referred to as the April 1982 proposal), With respect to eight of the products, DOE proposed to make a determination that a standard would not result in significant conservation of energy and would not be economically justified.3 The April 1982 proposal also proposed rules governing petitions to DOE both by States to obtain exemption from preemption of State or local energy efficiency standards, as well as by manufacturers to obtain preemption of State or local standards. - On December 22,1982, DOE published a final rule in which the Department determined that efficiency standards were not warranted for clothes dryers and kitchen ranges and ovens. 47 FR 57198. (Hereafter referred to as the December 1982 final rule.) At that time, DOE also adopted final procedures by which States might obtain exemption for State or local efficiency standards from Federal preemption, and by which. manufacturers might obtain preemption of a State or local standard not otherwise preempted. On August 30, 1983, DOE published a final rule with respect to the remaining six covered products: refrigerators and refrigerator-freezers, freezers, water heaters, furnaces, room air conditioners and central air conditioners. 48 FR 39376. (Hereafter referred to as the August 1983 final rule.) For each of the six products covered by the August 1983 final rule, except central air conditioners, DOE determined that an energy efficiency standard would not result in significant conservation of energy and would not be economically justified. With respect to central air conditioners, DOE found that an energy efficiency standard would result hi significant conservation of energy, but would not be economically justified. On April 1, 1985, DOE published a proposed rule with respect to four covered products: dishwashers, television sets, clothes washers and humidifiers and dehumidifiers. 50 FR 12966. (Hereafter referred to as the April 1985 proposal). For each of th.e four products covered by the April 1985 proposal, DOE proposed that an energy efficiency standard would not be

2 The April 1982 proposal did not propose any rule with respect to the product type "home heating equipment, not including furnaces," or with respect to that class of the product water heaters made up of heat pump water heaters, or with respect to those
classes of the product central air conditioners that are heat pumps. economically justified and would not result in a significant conservation of

energy. During 1983, DOE's December 1982 .and August 1983 final rules were challenged in a lawsuit brought by the
Natural Resources Defense Council (NRDC) and others against the Department. On July 16,1985, the U.S. -Court of Appeals set aside DOE's December 1982 and August 1983 final
rules. NPDC v. Herringion, 768 F.2d 1355 (1).C. Cir. 1985). Consequently, on March 5, 1986, DOE published notices in the Federal Register removing the December 1982 and August 1983 final n ales and withdrawing the April 1985 proposal. 51 FR 7549 and 51 FR 7582. The National Appliance Energy Conservation Act, which became law on March 17, 1987, amended EPCA in part by: redefining "covered products"(specifically, refrigerators, refrigeratorfreezers, and freezers were combined into one product type from two;
humidifiers and dehumidifiers were deleted; and pool heaters were added); establishing Federal energy conservation standards for 11 of the 12 Covered products; and creating a schedule, according to which each standard is to be reviewed to determine if an amended standard is required. The National Appliance Energy Conservation Amendments of 1988, which became law on June 28, 1988, established Federal energy conservation standards for fluorescent lamp ballasts.
These amendments also created a review schedule for DOE to determine if
an amended standard for fluorescent lamp ballasts is required. As directed by the Act, DOE published an advance notice of proposed rulemaking, with a 60-day comment period that ended July 18, 1988. 53 FR 17712, May 18, 1988. (Hereafter referred to as the advance notice). The advance notice presented the product classes that DOE planned to analyze, and provided a detailed discussion of the analytical methodology and analytical models that the Department expected to use in performing the analysis to support this rulemaking. The Department invited comments and data on the accuracy and feasibility of the planned methodology and encouraged interested persons to recommend improvements or alternatives to DOE's approach. The comments in response to
the advance notice are addressed in sections II and III of this notice.

II. General Discussion
As stated above, NAECA requires DOE to determine if the legislated

### Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32747

standards for dishwashers, clothes washers, and clothes dryers should be amended. Tlie Act prohibits DOE from promulgating a standard for a product if: (1) There is no test procedure for the product (except in the case of clothes washers, clothes dryers, dishwashers, and kitchen ranges and ovens), (2) a standard is not technologically feasible, (3) DOE determines that a standard would not be economically justified, (4) if a standard would not result in a significant conservation of energy or (5) if the Secretary has made a finding that such a standard will likely result in the unavailability of currently available performance characteristics. To measure possible energy savings and economic justification, DOE analyzed several possible standard levels for each product type. Furthermore, the Act stipulates that any adjustment of a standard may only be toward more stringent levels. With respect to each appliance, DOE analyzed various specific design options, including prototypes. A prototype can be either an individual component, e.g., an improved food filter, or a complete assembly with the design option installed, e.g., heat pump clothes dryers. While a prototype design may be technologically feasible as an individual component or as part of a bread-board 4 assembly, it does not necessarily follow that techniques have been developed for mass production of the prototype design.



### a. Test Procedures
For each product discussed in today's proposed rulemaking there is an applicable DOE test procedure to evaluate its energy efficiency. 

### b; Technological Feasibility

1. General. For those products and classes of products discussed in today's notice, DOE believes that the efficiency levels analyzed, while not necessarily in production, are technologically possible,. The technological feasibility of the design options is addressed in the product specific discussion. DOE's criteria for evaluating design options for technological feasibility are that the design options are already in use by the respective industry or that research has progressed to the likely development of a prototype. 

### One comment on the advance notice addressed the subject of technological feasibility. Whirlpool Corporation (Whirlpool) contended that a design option is not technologically feasible unless it is acceptable to the consumer and commercially workable. (Whirlpool, No. T, at 17).5 DOE considers a design option to be technologically feasible, if, based on the Department' s analysis, DOE believes it is capable of being carried out.

2. Maximum Technologically Feasible Levels. The Act requires that in considering any new or amended standards, the Department must consider those that "shall be designed to achieve the maximum improvement in energy efficiency which the Secretary determines is technologically feasible and economically justified." (Section 325 (1)(2)(A)). Accordingly, for each class of product under consideration in this rulemaking

, a maximum technologically feasible design option was identified.
This is the most efficient model of a class for which at least a prototype exists. In comments on the advance notice , Whirlpool and the Association of Home Appliance Manufacturers (AHAM) stated that any determination
of maximum technological feasibility include only those options that are

"commercially workable." (AHAM, No. 5 at 7; Whirlpool , No. 1, at 17). While the Department will consider the commercial workability " of a maximum technologically feasible " design in the economic justification analysis, such a consideration is not relevant in determining the maximum technologically feasible design , which is largely an engineering determination. DOE considers a design option to be technologically feasible, if

, based err the Department' s analysis

, DOE believes it is capable of being carried out. A complete discussion of each maximum technologically feasible level, and the design options included in each, is found in the Engineering Analysis. See Technical Support Document, Chapter 3

, specifically sections 3.2.5, 3.3.5, and 3.4

. 5. These are presented in Table 2-1, below.

TABLE 2-1-MAXIM UM TECHNOLOGICALLY

FEASIBLE LEVELS

Products and product classes

Dishwashers: Compact, 115V ............................. Standard, 115V

............................ Standard water heating . 115V... Clothes washers: Top loading

, compact r

.............. Top loading

, standard capacity 2. Top loading, large capacity'..... Unit energy consumption

525 kWh/yr. 742 kWh/yr. 704-5 kWh/yr.

576 kWh' lyr. 743 kWh/yr.

1,010 kWh/yr.

4 A bread-board unit is an experimental 5 Comments on the advance notice have been arrangement of the design made to test its assigned docket numbers and have been numbered feasibility. consecutively. TABLE 2-1-MAXIMUM TECHNOLOGICALLY

FEASIBLE LEVELS-Continued

Products and product classes

Clothes dryers: Compact, electric, 11 OV 4............ Compact, electric, 240V 4............
Standard electric 6 ........................ Electric heat pump 6 ....................

Gas 5 .............................................. Unit energy consumption

347 kWh/yr. 324 kWh/yr. 859 kWhlyr. 336 kWh/yr. Standard 3.27iMMBtu/yr.

kWh/yr.=kilowatt hours per year MMBtu/yr._million British thermal units per year.

' Capacity equals 1.45 1 1.3 2 Capacity equals 2.4 ft.' ' Capacity equals 3.0 ft.' 4 Capacity equals 3.45 ft.' 5 Capacity equals 5.9 ft.'

DOE proposes that the maximum technologically feasible level is one that can be carried out by the addition of design options, both commercially feasible and prototypes, to the baseline units without affecting the product's utility. DOE believes that there are no products available with the same utility and capacity that are more efficient than the maximum technological level. Each maximum technologically
feasible level was evaluated to determine if it would be economically justified at the time of the effective date of the standard. Standards that have unacceptable impacts on consumers or manufacturers or result in the changing of the utility of the product were rejected. DOE provided lists of design options for the engineering analysis in the advance notice. The comments on these design options resulted in more detailed design options for DOE review. DOE has considered these suggestions and has addressed them in the product specific
discussions in this notice. The analysis process is described fully in the Technical Support Document. Computer models and
manufacturers' data were used to predict improvements in product efficiencies and the costs associated with these improvements. The Engineering Analysis addresses two statutory requirements, The first requirement is the Department's evaluation of the maximum improvements in energy efficiency that are technologically feasible. The second requirement relates to the lessening of utility to the consumer of any of the covered products due to the imposition of standards, The Engineering Analysis also provides information on efficiencies and manufacturing costs to other sections of the overall analysis. The product specific sections of this notice

### 32748 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

include the method of analysis for each, product.

c. Energy So ving3 1. Determination of Savings. The Department forecasts energy consumption through the use of the Lawrence Berkeley Laboratory Residential Energy Model (LBL-REM). The LBL-REAM forecasts energy consumption over the period of analysis
for candidate standards and the base case.6 The Department quantified the energy savings that would be attributable to a standard as the difference in energy consumption
between the candidate standard's case and the base case. The LBL-REM is an improve {ent of the Oak Ridge National Laboratory Residential Energy End Use Model (OReNL Model), which was used by DOE in previous standards rulemakings. The. LBL-REM is fully explained in the Technical Support Document. AppendixB to that document addresses the LBLREM in detail. The LBL-REM contains algorithms to project average efficiencies, usage behavior, and market shares for each product. The market share calculations contains the following steps: potential purchasers may purchase any competing technology within an end-use, or none. For clothes washers and dishwashers, the decision. to purchase or not is modeled, and the fraction of the total that chooses each class, e.g., standard 115V, standard water heating 115V, etc., is specified exogenousiy. For clothes dryers, the decision to purchase or not and the choice of fuel is modeled, and the fraction of the total that chooses each class is'specificd exogenously. Long-term market share elasticities have been assumed wits respect to equipment price, operating expense, and income. The effects of standards are expected to be lower operating expense and higher equipment price. The percentage changes in these quantities are used, together with the elasticities, to determine changes in market share resulting from standards. Higher equipment prices will decrease market shares, while lower operating expenses will increase market shares. The net result depends on the standard level selected, and associated equipment prices and operating expenses. The LBL -RE'M is used to project residential energy use over the relevant time periods for these three products with and without amended standards. By comparing the energy consumption

6 The base case for these three products represents NAECA's 1988 standards

, which are design standards only. projection at alternative standard levels, or NAECA's 1983 standards, the Department estimated the amount of energy projected to be saved during the period 1993--20155.7 The energy saved is expressed in Quads, i.e., quadrillion Btu's. With respect to electricity, the savings are quads of source or primary energy, which is the energy necessary to generate and transmit electricity. The Act defines "energy use" as the quantity of energy directly consumed by a consumer product at point of use. This is generally called "site" energy, as opposed to "source" energy. There are major differences between these types of energy. In 1987, the amount of electrical energy consumed at the site
was less than one-third of the amount of source energy that was required to generate and transmit the site electrical energy-11 Therefore, It is important to identify whether the electricity involved is site or source energy. The LBL-REM projections are dependent on many assumptions. Among the most important are responsiveness of household appliance purchases to changes in energy prices and consumer income, future energy prices, future levels of housing construction, and options that exist for improving the energy efficiency of appliances. As is the case with any complicated computer model simulation, the validity of the outputs is critically dependent on the inputs. Comments that DOE received questioned several of the assumptions that were described in the advance notice. These included the following:

Rebound Effect
In the analysis, the Department assumed that greater efficiency in these three product types would not cause them to be used more intensively because of the efficiency improvements. Therefore, in estimating energy savings from different standard levels for dishwashers, clothes washers, and clothes dryers, the Department did not use a rebound effect. The Department has no data indicating that changes in either energy prices or efficiency will

LBL-REM was programmed to analyze a single standard level or alternative levels, over the entire period. That is, the fact that a standard might be revised during subsequent rulemakhigs was not considered by the model. The Department believes that it is not possible to predict what result such reviews may have, and therefore it would be speculative to model any particular result. Therefore, for purposes of this rulemaking, each standard level that was analyzed was projected to have been in place from the time of implementation to the year 2015. "Energy Info_•matitn Administration, Electric Power Annual 1937, Tables 25 and 32, DOE, 1131A0348(87).1987, 

### cause consumers to use these products any differently.

Discount Rate

The Natural Resources Defense Council (NRDC) questioned the Department's use of consumer discount rates for calculating the cost of conserved energFT and suggested, instead, that DOE use a discount rate
that is based on "real financial markets." (NRDC, No, 3, at 9). The Department agrees, and notes that the
discount rate that was used in this and earlier rulemakings (seven percent) is based on "real financial markets." 9

Since a dollar in the future is worth less than a dollar today, that future
dollar must be discounted to deter: amine its value today. If the discount rate chosen is too high, the present-value of future dollars will be understated, Thus, higher discount rates tend to preclude more capital-intensive candidate standard levels. Nevertheless, the Department does not believe that the seven percent rate that was used in the analysis is artificially high. From the business perspective, a reasonable discount rate would be one that represented the private opportunity cost of capital used to meet any appliance conservation standard. A gauge of the private opportunity cost of capital is the most profitable alternative use of that capital: One measure of that cost could be the prime rate, that is, the interest rate that is offered by lending institutions to their most credit-worthy customers. in early March 1989, the prime rate was 11.5 percent, If such a
business secured a loan at one of those rates of interest, and repaid it in the 1990-1995 time period, the real rate of interest would be 6.5 percent. This results because the expected annual rate of price increases in that time period is approximately five percent. Most businesses, however, are not eligible for loans at the prime rate of interest, so the estimated real rate of interest for these firms would probably be slightly higher. Similarly, from the consumer perspective, one approach to selecting an appropriate discount rate is to look at the interest payable on a consumer loan and depreciate that interest by the inflation rate. if a consumer secures a loan at 12 percent interest, and repays it in the 1990-1995 time period, the real rate of interest will be seven percent. Thus. DOE believes that from both the business and consumer perspectives, a

o DOE in'ihe calculation of life-cycle cost and net present value, discounted the value of energy; the Department did not discount other measures, e.g.. energy and emissions.

### Federal Register / Vol. 54, No, 152 / Wednesday, August 9, 1989 / Proposed Rules 32749

seven percent discount rate is reasonable. On the other hand, it may not be reasonable to require consumers to
make an investment where there are inherent risks. For example, if consumers perceive a risk because of the uncertainty of energy prices and reliability and longevity of the equipment, they would require a greater return on their investment, i.e., a higher discount rate. It has been argued that the discount rate should be as high as 15 percent. Dubin and McFadden, "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica March 1984, pp. 345-361. DOE requests comments on the approach taken to select an appropriate discount rate, alternative approaches, and the consumer and business risks to be considered. Several of the inputs, e.g., energy and equipment prices, were tested in sensitivity analyses to determine the effects of varying certain assumptions on the results of the analysis. By such sensitivity analyses, it is possible to determine those inputs where changes, including possible errors, are meaningful to the model's output, and those inputs for which changes are not meaningful. See Technical Support Document, § § 4.3 and 5.4. The savings attributable to the different standard levels are identified for each product in section III of this notice.

Modeling
Several comments offered suggestions on the LBL-REM modeling efforts. NYSEO critiqued the use of "old data" in LBL-REM in developing the baseline units for analysis, and contended that use of such old data could underestimate the impact that increased efficiency standards could have on saving energy. (NYSEO, No. 2 at 3). While historical data were used as a starting point for the analysis of these three product types, all of the data bases were updated to reflect current prices and levels of efficiency in the marketplace. These data were then used to calculate annual energy consumption for the LBL-REM and life-cycle cost (LCC) analyses. For example, in the LCC analysis, DOE used both the cycles of operation and the more recent, 1986, Proctor and Gamble (Part 5) data to calculate the life-cycle cost. This
calculation does not account for variability in consumer usage patterns, nor does it reflect any changes in typical consumer usage behavior since the test procedures were developed. While the adoption of out-of-date usage values may affect the results of the LBL-REM and LCC analysis, DOE is not certain to what extent the results would be affected since, for example, the energy savings and net present value calculation of the LBL-REM would use the dated usage values in both the base
case and standards case. It is important to note out the
difference between "baseline unit" and "base case." In the engineering analysis, the baseline unit for each product class under consideration is identified. These are units that are representative of units that are expected to be offered for sale in the beginning year of the analysis, 10 Baseline refers only to the engineering analysis and is the first point identified in each cost-efficiency curve. It is the product to which design options are
added to create more efficient units. On the other hand, "base case" refers to the economic analysis forecast with only those standards mandated by the Act. Two comments raised issues about the Department's modeling of utility impacts. First, NYSEO suggested that utility impacts be analyzed for smaller areas in order to capture better the differences among individual power pools. (NYSEO, No. 2, at 9). While the Department agrees with this point in principle, data limitations prevent the implementation of this suggestion. NYSEO also stated that inclusion of all planned generating facilities as available capacity is inappropriate. (NYSEO, No. 2, at 9-10). The Department notes that the National Electricity Reliability Council (NERC) forecast assumed that certain Dower plants, e.g., Shoreham and Seabrook, will operate, even though these plants may be delayed, cancelled, or shut down. The Department's estimate of capacity benefits is conservative, because cancelling these plants would increase the reliability benefits of the appliance standards. On another point, NYSEO contended that the Department underestimates reliability benefits when adequate reserve margins have been forecasted. (NYSEO, No. 2, at 10). The Department believes that such benefits could be estimated for individual utilities, but is unable to do so for larger regions. NSPC also contended that use of a combustion turbine, which is typically a peak-load generator, in estimating the capacity impact measures of baseload

10 The baseline units are those with estimated average shipment-weighted energy factors (SWEF's) in 1967. The baseline clothes dryer efficiencies are estimated from very limited data , while the efficiencies for dishwashers and clothes dryers are
estimated from more extensive data which was available because these products are covered by the FTC labeling program. appliances undervalues the cost of new generating capacity. (NSPC, Id.). While there are several alternative methods for valuing capacity impacts, the Department's utility analysis is one that has been adopted by many utilities. For more detailed explanations of, and justification for, the valuation of capacity impacts, see Technical Support Document, chapter 8 and Appendix D. 2. Significance of Savings. Under section 325(1)(3)(B) of the Act, the Department is prohibited from adopting a standard for a product if that standard would not result in significant energy savings. While the term "significant" has never been defined precisely in the Act, the Department believes that a standard level option need not meet a threshold level of energy savings to be considered a significant saver of energy, The U.S. Court of Appeals, NRDC v. Herrington, supra, concluded that Congressional intent in using the word "significant" was to mean "non-trivial." Id, at 30. Thus, DOE believes that each candidate standard considered results in significant energy savings.

at Rebuttable Presumption

NAECA established new criteria for determining whether a standard level is economically justified. Section 325(1)(2)(B)(iii) states:

If the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation
standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure, there shall be a rebuttable presumption that such standard level is economically justified. A determination by the Secretary that such
criterion is not met shall not be taken into consideration in the Secretary's
determination of whether a stamdard is economically justified.
DOE believes this provision means that if the added price of an appliance, caused by a conservation standard, would repay itself to the consumer in energy savings in less than three years, then it can be presumed that such standard is economically justified.1 This presumption of economic justification can be rebutted by the seven factors of economic justification.

11 For this calculation

, the Department calculated
cost

-of-operation based on the DOE test procedures. Therefore , the consumer is assumed to be an "average" consumer as defined by the DOE test procedures

. Consumers that use the products less than the test procedure assumes will experience a longer payback while those that use them more than the test procedure assumes will have a shorter payback.

### 32750 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules



### e. Economic Justification

As noted earlier

, section 325(1 )(2)(B)(i) of the Act provides seven factors to be evaluated in determining whether a conservation standard is economically justified. The Association of Home Appliance Manufacturers (Ai-LAM) proposed a methodology that the Department could use in evaluating candidate standard amendments. (Al-LAM, No. 5, at 11-12). Except for its proposal that the maximum technologically feasible design options be chosen only from those that are "commercially workable," the Department's planned methodology is consistent with the A HAM's proposal. NRDC suggested that the Department rank design options in ascending order of cost of conserved energy. (NRDC, No. 3, at 9). The Department , with one exception, clothes dry automatic termination, has ranked the design options in ascending order of incremental payback period; this is equivalent to NRDC's suggestion. NRDC also suggested that any water savings that could result from amendedstandards be included in the costeffectiveness, environmental, and economic impact analyses . (NRDC, No. 3, at 8). The Department has included estimates not only of the potential w ater savings for amended standards

, but also of the foregone water disposal expenses that such water savings would cause. 1. Economic Impact on Manufacturers and Consumers. The engineering analysis identified improvements in efficiency along with the associated costs, o manufacturers for each class of product. For each design option, these costs constitute the increased per unit cost to manufacturers to achieve the indicated energy efficiency levels. Manufacturer, wholesaler, and retailer markups will result in a consumer purchase price higher than the
manufacturer cost. To assess the likely impacts of standards on manufacturers, the Department used a computer model that simulated hypothetical firms in the three
industries under consideration. This model, the Lawrence Berkeley Laboratory Manufacturer Impact :Model (I.BL-MIM), is explained fully in the Technical Support Document. LBi,-MIM provides a broad array of outputs, including shipments, price, revenue, net income, and return-on-equity (ROE). An "Output Table" lists values for all these outputs in the base case and in each of
the standards cases under consideration. It also gives a range for each of these estimates. A "Sensitivity Chart" shows how ROE would be - 

### affected by a change in any one of the model's nine control variables. For consumers

, a measure of economic impact is the life

-cycle cost of a product

, because it accounts for the increased first price

, any increased maintenance expenses , and the reduced fuel expenses resulting from the product's greater efficiency. Under section 325 of the Act, life-cycle cost analysis is a separate factor to be considered in determining economic justification. 2. Life-Cycle Costs (LCC). One measure of the effect of proposed standards on consumers is the change in operating expense as compared to the change in purchase price, both resulting from standards. This is quantified by the difference in life-cycle cost (LCC) between the base and standards case for the appliance classes analyzed. The LCC is the sum of the purchase price and the operating expense, including maintenance expenditures, discounted over the lifetime of the appliance.
The LCC is calculated at the estimated average efficiency for each class in the year standards are imposed using consumer discount rates of five, seven, and 10 percent . The purchase price is based on the factory costs in the Engineering Analysis and includes a factory markup plus a distributor and retailer markup. Energy price forecasts are inputs that are taken from the 1987 Annual Energy Outlook of the Energy Information Administration. Appliance usage inputs are taken from the relevant -test procedures and recent P and G data. The Department seeks comments on the input to the LCC analysis, including the discount rate and energy price forecasts. The differences in life-cycle costs between the base case and various levels of standards for dishwashers, clothes washers, and clothes dryers are presented in Tables 6

. 1--6.3 of the Technical Support Document. These LCC's are calculated at a seven percent discount rate; a higher rate, e.g., 10 percent, gives a smaller difference, while a lower rate, e .g., five percent, produces a greater difference. As discussed above, it has been argued that discount rates as high as 15 percent should be used. The Department did not use 15 percent in the LCC analysis; however, as can be seen in the various LCC curves, the use of a higher discount rate would result in a flatter curve with the minimum life-cycle cost dropping, i.e., approaching the baseline unit. If a higher discount rate were used, e.g., 15 percent, and energy prices were lower than average, the minimum life-cycle cost point could be less efficient than
the baseline units. When the LCC numbers are plotted graphically (on the Y axis) against unit energy consumption (on the X axis), the data generally produce a curve that is concave from above in shape. This means that at first the LCC curve will decline as efficiency improvements are made, will reach a minimum (which may or may not be discrete ), and then rise. This indicates that the first efficiency improvements will produce energy savings, the value of which will more than pay for the design change. As efficiency improvements are made,; t becomes increasingly costly to save

more energy, and, eventually , the value of the energy savings will not cover the expenditures for the design improvements. See Technical Support
Document, section 3.5.

The minimum of the LCC curve was of particular interest in the analysis. The minimum of the curve represents that level of efficiency improvements that maximizes the difference between the value of energy saved and the additional consumer expenditures for the relevant efficiency improvements. Therefore, design options that corresponded to the minimum point were of special
consideration in establishing standard levels. Efficiency levels exceeding the LCC minima were generally rejected as standards as not being economically justified, At efficiency levels beyond the
LCC minima, the incremental first cost of the product exceeds the value of the energy savings such that the average
consumer does not realize an incremental benefit from the investment beyond the LCC minimum. The Department conducted a net present value (NPV) analysis to assess the differential economic impacts on consumers that world occur from the adoption of amended standards for
these three products compared to a base
case with no change in the NAECAimposed 1988 standards. See TechnicalSupport Document, Chapter 5. The LBLRFSvi: calculates the total expenditure for each product (discounted total value of energy consumption from 1993 through the last year of use for those products purchased through the year 21015), pins the total discounted expenses for equipment purchased from 1993 through
2915 , with more stringent standards and with ii4ECA 1988 standards. The NPPB% analysis is similar to the LCC analysis, in that the greatest NPV should occur at the standard level that corresponds to the LCC minimum for the product. 12 The

+= The net present value (NPV) of

. a standard, per appliance , is calculated for all affected appliances that are purchased in the projection period. while

ConScuedFederal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32751

NPV for each product at the different
standard levels is identified in section III of this notice. The NPV calculation, is based on average efficiency from P and G and usage values.13 This analysis
does not take into account variations in appliance usage rates , local energy prices and consumer energy efficiency choices. Instead, the model assumes that nationwide average appliance usage rates, energy prices and efficiency apply
to all consumers in all areas of the nation. In other words, it assumes that. consumers who face high energy prices or expect to make extensive use of their appliances, will, on average, purchase the same distribution of appliance efficiencies as consumers facing low

energy prices or low appliance usage rates. To the extent that individual consumer decisions are influenced by local (rather than national average) energy prices or by their individual (rather than national average) usage rates, the model could yield inaccurate results. if, as DOE believes, consumers who face below-average energy prices are more likely to purchase less-efficient appliances, then the analysis is likely to understate the energy savings resulting from standards for these consumers. Likewise, for those consumers who would purchase more-efficient appliances, the analysis would overstate the energy savings resulting from standards. If the consumers who live in low- and high-energy cost areas wouldpurchase less-efficient and moreefficient appliances, respectively, then valuing all energy savings at the national average energy price could overstate the value of energy savings to the former by more than it understates the value of energy savings to the latter, Thus, under these circumstances, the net effect of assuming a national average energy price would be to overestimate the total value of energy saved. Similarly, if consumers who live in low- and high-energy usage areas wouldpurchase less-efficient and moreefficient appliances, respectively, then using the national average energy usage rate could overstate the energy savings to the former by more than it understates the energy savings to the latter. Thus, under these circumstances, the net effect of assuming a national average energy usage rates could be to

the life-cycle cost (LCC) is calculated only for the lifetime of an appliance that is purchased in the first year of the relevant standard. Therefore. NPV and LCC estimates, per appliance, may not correlate exactly.
19 The NPV usage values are taken from recent Proctor and Gamble data, while the LCC usage values were taken from both the DOE test procedures and the Proctor and Gamble data. overestimate the total amount of energy
saved. In either case, to the extent that the model inaccurately predicts the value and/or quantity of energy savings, then
it could lead to an inaccurate estimate of life-cycle cost savings and a standard that is different from the optimal
standards. DOE does not have the data to determine if, or to what extent, the NPV calculations are affected by using average energy prices, usage rates and efficiency. DOE requests comments on this issue, Specifically, DOE requests data on the effects of energy prices and usage rates on consumer energy efficiency choice.
Such data could include manufacturer warranty and/or registration data that includes appliance efficiency and purchase location. Similarly, DOE also requests data on the effect of energy efficiency on usage rates . DOE also solicits comments on the likely improvements to the analysis that would result from the incorporation of such data and, in the absence of relevant data, alternative analytic approaches to capture the effect of these variations. 3. Energy Savings. While the significant conservation of energy is a separate statutory requirement for imposing an energy conservation standard, the Act requires DOE, in determining the economic justification of a standard, to consider the total projected savings that are expected to result directly from revised standards. DOE used the LBL-REM results,
discussed earlier , in its consideration of total projected savings. The savings for the three products are provided in
section III of this notice. 4. Lessening of Utility or Performance of Products. This factor cannnot be quantified. Whirlpool and AHAM both urged that the Department not establish any amended standards that could lessen the utility of the affected product to the consumer. (Whirlpool, No. 1, at 16; AHAM, No. 5, at 8). The'Department believes that it has met this concern by a careful selection of product classes, as discussed below. 

### In establishing classes of products and design options, the Department tried to eliminate any degradation of utility or performance in the three products under consideration in this rulemaking. That is, to the extent that comments or DOE's own research indicated that a product included a utility or performance-related feature that affected energy efficiency, a separate class with a different efficiency standard was created for that product. In this way the Department attempted to minimize the impact of this factor as a result of the standards that were analyzed. 5. Impact of Lessening of Competition. It is important to note that this factor has two parts; on' he one hand, it
assumes that there could be some lessening of competition as a result of standards; and, on the other hand, it directs the Attorney General to gauge the impact, if any, of that effect. In order to assist the Attorney General in making such a determination, the Department studied the affected appliance industries to determine their existing concentrations, levels of competitiveness, and financial performances. This information will be sent to the Attorney General. See Technical Support Document, Chapter 7. The Department has also provided the Attorney General with copies of this notice and the Technical Support Document for his review. 6. Need of the Nation to Conserve Energy. One measure of the need of the Nation to conserve energy is the country's reliance on energy in the form of oil, especially imported oil. This was documented in 1987 in a DOE report (Energy Security.-A Report to The President of The United States, Washington, D.C.: U.S. Department of Energy, March 1987). In that report, U.S. energy security essentially was
considered to be a function of free oil markets. The three products being considered in this rulemaking (dishwashers, clothes washers, and clothes dryers) are all fueled by energy forms other than oil, specifically electricity for all three and natural gas for some clothes dryers. While some oil is used to generate the electricity on which these products operate, that is a very small part of our national energy picture. Specifically, only 4.6 percent of net electricity was generated by petroleum in 1987. DOE requests
comments on this issue.
7. Other Factors. This provision allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that he deems to be relevant. To date, the Department has not identified any such factors with regard to these three products.

III. Product-Specific Discussion

a. Dishwashers



### 1. Classes
In the advance notice, the Department discussed its methodology for reviewing the energy conservation standards for dishwashers that were established by the Act, to determine if the standards should be amended. NAECA currently

### 32752 Federal Register Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

prescribes a design standard for dishwashers; units manufactured after January 1, 1988, are required to have an option to dry without heat. The following are the classes of
dishwashers that have been identified: (A) Compact Dishwasher (115V) (B) Standard Dishwasher (115V) (C) Water Heating Dishwasher, Compact (115V) (D) Water Heating Dishwasher, Standard (115V) (E) Water Heating Dishwasher, Compact (230V) 

### (F) Water Heating Dishwasher, Standard (230V)

2. Design Options

The following is a list of design options that were examined: (A) Improved Food Filters (B) Improved Fill Control (C) Improved Motor Efficiency

3. Comments on the Advance Notice of Proposed Rulemaking

Whirlpool commented that after reviewing all of the design options for
dishwashers included in the advance notice, it found that-not one could be utilized to improve the energy efficiency of those machines. Whirlpool claimed that many of the possible configurations of design options identified by DOE have already been developed and have achieved the maximum energy efficiency possible; in other cases, the design improvements are so costly that the' extra expense would outweigh any conservation benefits. (Whirlpool, No. 1, at 3-7). After reviewing the potential energy conservation improvements of the design options for dishwashers, the Department has found that several, i.e., improved food filters, motors, and water fill controls, do exhibit the potential to save energy above what Whirlpool claims is possible.
NRDC stated that DOE should consider the "broadest possible range of measures." For dishwashers, NVRDC suggested the Ecotech I prototype; heat pumps for water heating dishwashers; and the range of designs currently available. (NRDC, No. 3, at 4-6). The Department analyzed the Ecotech I, and performed literature reviews on new designs. In addition, data were sought from manufacturers on current and proposed designs. Heat pump dishwashers have not been analyzed because the Department could not determine if design is technologically
feasible since no data have been presented and no prototypes exist. 

### 4. Efficiency, Levels Analyzed
DOE Examined a range of standard levels, including the 1988 NAECA standard. As discussed above, the impacts of any revised standards were compared to the 1988 NAECA standard; therefore, the impacts of the base case are generally not presented because they are calculated to be zero. Table 3-1 presents the efficiency levels, other than the base case, selected for analysis for 1993. Alternate levels were selected to generate a range of impacts for analysis. Initially, the levels were selected for the class of standard dishwasher (115 volt). Level 3 corresponds to the highest efficiency level identified in the engineering analysis. Levels 2 and 1 correspond to lower efficiencies than that of level 3. Each level was analyzed discretely in the engineering analysis. Standard levels for the other class of dishwashers were based on the combination of design options for the standard dishwasher (115 volt). The Department did not analyze compact and standard-sized water heating dishwashers (115 volt) separately. Nevertheless, the impacts for those classes are expected to be similar since the design options that would be adopted would be the same. Because of the small. amount ofempirical data on compact waterheating dishwashers (115V and 230V) and on standard water-heating dishwashers (230V), the Department was unable to analyze these classes. As a result, the Department is not proposing any amended standard for them. Nevertheless, the standards that require
dishwashers of all classes to have an option today without heat will remain in
effect for these three classes.

TABLE 3-1-ALTERNATIVE EFFICIENCY

LEVELS FOR 1993 FOR DISHWASHERS

[Energy Factor=LoadslkWVh/Yr.J

Product class

Compact dishwashers (11511) ......... Standard dishwasher ( 115V) ...........Standard water heating dishwasher (1161) ............................... Level analyzed

2

0.58
.41

.44 3

0.660 0.61 .42 .43

.451 .46

Payback Period Table 3-2 presents the payback period for the efficiency levels analyzed for the most prevalent class of product (standard water heating dishwasher (115 volt)). Standard level 1
involves efficiencies achievable with an improved food filter, level 2 involves additional efficiencies achievable with an improved motor, and level 3 adds an improved water fill control. All three standard levels meet the rebuttable presumption test in that the payback is less than three years. Standard level 3 is also the maximum technologically feasible design option identified in the analysis. See Technical Support Document, Table'5.5.

TABLE 3-2-PAYBACK PERIODS (YEARS)
STANDARD WATER HEATING DISHWASHER (115 VOLTS)

Payback period

Standard level: 1 ........................................................ 0.9 2 ........................................................ 1.3 3 ........................................................ . 2.1

Significance of Energy Savings. By the year 2000, the weighted average energy consumption of new dishwashers sold in the absence of revised standards is not projected to change compared to the year 1993. The weighted average energy consumption is projected to decline between the year 2000 and 2015. Overall, the average energy consumption is projected to decrease slightly from 1993 to 2015. See Technical Support Document, Table 5.2. This is because residential electricity rates are projected to decline from 1984 to 1995, then increase, reaching 1985 levels by 2015 (in real terms). See Technical Support Document, Table 4.5 and DOE/ EIA-0383(37) Annual Energy Outlook 198..", Table A.3. Without upward pressure on operating expenses, the LBL--REM projects that there will be no major energy consumption improvements. The LBL-REM projects, for the period 1993-2015,"the following energy savings would result from the
increased standards: Level 1-0.39 Quads Level 2-0.52 Quads Level 3--0.65 Quads

See Technical Support Document,
Table 5.3 On the basis of the above, DOE believes that the increased standard levels considered for dishwashers would result in a significant conservation of energy. However, DOE believes that the LBL-REM base case projections of no improvement in the efficiency of dishwashers compared to the year 2000 is unlikely. Between 1972 and 1983, the average efficiency of dishwashers increased nearly 55 percent. During this time, the nation experienced both declining and increasing real energy prices. DOE believes there is no reason to conclude that the average efficiency of dishwashers will not increase. Changes

### Federal Register Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32753

in shipment weighted energy factor (SWEF) can be brought about by a number of factors including heightened consumer awareness. DOE requests comments on this issue particularly the
LBL-REM's forecast of dishwasher efficiency. Economic Justification- A. Economic impact on Manufacturers and
Consumers. The per unit increased cost
to manufacturers to meet the level 1 efficiency (improved food filter) is $7.50, while the addition of improved motor efficiency in standard level 2 costs an additional $4.00. Standard level 3 provides efficiencies obtained with an improved fill control, which adds another $8.00. See Technical Support Document, Tables 3.3 and 3.4. For consumers, standard level 1 would cause a price increase of $10.75 for a standard dishwasher; standard level 2 would add an additional $6.21, while level 3 would be $12.57 more. The price increases caused by standard levels for water-heating dishwashers are the

same. See Technical Support Document, Tables 3.18 and 3.19. The Lawrence Berkeley LaboratoryManufacturers Impact Model'(LBLMIIvI), in the base case, projects manufacturers' long-run return-on-equity (ROE) to be 6.80 percent for dishwashers. At level 1, the LBL-MiM predicts that a prototypical dishwasher manufacturer would have an ROE of 6.64 percent, a loss of 2.4 percent. At level 2, the manufacturer's ROE is expected to be 6.72 percent, a 1.2 percent decline. At level 3, however, the LBL-MIM projects that the prototypical dishwasher manufacturer's ROE would be 6.97 percent, an increase of 2.5 percent over the base case. See Technical Support Document, Table 7.9. This industry has displayed continuing consolidation for several decades, especially during periods of low earnings. By increasing profitability, as DOE projects at standard level 3, standards could lead to a reduction in the rate of such consolidations, thereby possibly contributing to more robust competitiveness than is likely in the base case. The Department's characterization of the prototypical manufacturer in the base case assumes that manufacturers' typical dishwasher designs are based on the combination of options presented in the Engineering Analysis for the baseline unit. If manufacturers use a different combination of design options to produce dishwashers that minimally comply with the 1993 standard, the Department may have inappropriately characterized the financial position of the prototypical manufacturer in the LBL-MIM. Furthermore, since financial data of the type needed to characterize the prototypical manufacturer are generally not available, DOE had to make a number of assumptions based on the limited data publicly available, e.g., Securities and Exchange Commission 10K reports and company annual reports. Because of the significant impact that these assumptions could have on the results of the analysis, DOE requests comments on these issues, particularly from small manufacturers. The sensitivity analysis, however, indicates that the dishwasher industry is sensitive to price and operating expense elasticities. For example, the high price and low operating cost scenario indicates that the effects of standards would be to decrease return-on-equity for dishwasher manufacturers by 2.5 percent. See Technical Support Document, Table 7.13. While these` scenarios are theoretically possible, the Department expects that the original analysis will be the likely outcome. B. Life Cycle Cost and Net Present
Value. The LCC analysis indicates that for each possible standard level the increase in purchase price would be offset by savings in operating expenses. Standard level 3 corresponds to the minima of the life-cycle cost curves. See Technical Support Document, Figures 3.17 and 3.18. This indicates that the standard level would not cause any economic burden on the average consumer. For consumers, standardlevel 1 would cause a reduction in lifecycle cost of $98.56 for a standard dishwasher; standard level 2 would reduce life-cycle cost an additional $5.45, while level 3 would result in a further decrease of $ 96 compared to level 2. For standard water heating dishwashers standard level 1 would cause a reduction in life-cycle cost of $92.09; standard level 2 would reduce life-cycle cost an additional $5.45, while
level 3 would result in an increase of $.02 compared to level 2. See Technical Support Document, Table 6.3. While DOE examined the effect of different discount rates, five, seven, and 10 percent, on the LCC curves and generally found little impact, the Department did not consider higher discount rates. Similarly, DOE did not consider different energy prices, including regional prices, in the LCC analysis. However, DOE did examine the effect of a usage rate that was different from the 322 cycles per year set by the DOE test procedure: Recent Procter and Gamble data appear to indicate that national average dishwasher annual usage rate is 260 cycles per year, nearly 20 percent less than the test procedure representative average use cycle. The lower usage numbers tend to result in lower lifecycle cost estimates, with the purchase price carrying greater weight in the calculations. For standard dishwashers, at the lower usage rate, standard level 2 becomes the minimum life-cycle cost point. Standard level I would cause a reduction of $69.23 for a standard dishwasher; standard level 2 would reduce life-cycle cost an additional $3.21, while level 3 would result in an increase of $1.42 compared to level 2.
See Technical Support Document, Table 6.3. As can be seen, not only does the minimum life-cycle cost point change but the overall reduction in life-cycle costs would be reduced by approximately 10 percent. The Department requests comments on the effects of usage rates. Another way to compare the costs and benefits that would be associated with any standard level is to estimate the net impact on life-cycle cost. Such a comparison for each standard level is shown below. The incremental consumer price for each standard level for all equipment purchased in the first year after the standard goes into effect; the total operating expense savings calculated at a 5, 7 and 10 percent discount rates; and the net difference in discounted savings and incremental prices paid are presented. The results show that, for each standard level, there is a positive net reduction in life-cycle cost; which indicates that, using national average values, the benefits of each candidate standard level exceed the increase in price paid for the appliance by the affected consumers.

DISHWASHER NET PRESENT VALUES

Gn millions of dollars, 19671

Standard level Rice

in. operating expense

savings LCc

differcrease _

5% 7% 10, % antes

1 ....._ ...................... 25.79 266.61 240.42 205.90 210.64
2_ ........ ................. 51.05 304 .65 272 .67 233

. 51 221.62
3 ......................„..... 95.27 346.47 310.13 265.57 214.86

The LBL-REM employs national average energy prices and usage rates. The appropriateness of this approach depends on the relationship between energy prices and consumer choice of efficiency levels and the relationship between consumers' expected usage and choice of energy efficiency level. If those consumers who face higher energy prices and/or expect to use their dishwashers more intensively, are on average, more likely to buy higher efficiency dishwashers, then a.modeling approach that assumes that national average energy prices and usage rates apply to all consumers will yield results

### 327 a4

ZMINB^ 

### Federal Regiter / Vol. 54; No. 152 / Wednesday, August 9, 1989 / Proposed Rules

that overstate the net benefits that could be expected

. As discussed above, recent Procter and Gamble data have shown, declines in usage rates for dishwashers. The Department requests comments and data on the effects of energy prices and expected usage rates on the consumer's choice of efficiency level. The NPV analysis indicates that if a stand were adopted at level 1, there
would be a net present value of $710 million from energy savings over the period 1993-2015

. At levels 2 and 3, the corresponding NPV's would be $811
million and $609 million

, respectively.
See Technical Support Document, Table
5.6. C. Energy Savings. As discussed above, DOE proposes that standards, at each candidate standard level, would result in a significant saving of energy. The Department conducted several sensitivity cases, one of which was to assume that after 1993, the market would produce dishwashers of an efficiency that increases more than the standards would otherwise require.
The base case projects that there will be only slight increases in the SWEF of dishwashers after 1993, i.e., that the private sector will not continue to improve the efficiency of these appliances much beyond the mandated levels. The sensitivity case assumes that after the 1993 standards are in place, the base case efficiency o owth will increase from 0

. 5 percent annually to 2.0 percent. The Department believes that the maximum improvement in market- .induced dishwasher energy efficiency after 1993 would be the historical improvement rate

, 3.1'percent annually. The Department does not have any reason to assume that energy efficiency would improve at a greater than historical rate. The Department believes that the range of market-induced efficiencies that would occur after 1993 in the absence of additional Federal standards
would be from a low of no improvement to a high of an historical average growth rate. If SWEF increases

, the energy savings due to standards would be less
than calculated. D. Lessening of Utility or Performance of Products. As indicated above, DOE established classes of products in order to assure that the standards analyzed would not lessen the existing utility or performance of dishwashers

. However, there is no assurance that future utility or performance of dishwashers wouldnot be lessened as a result of standardsinduced disincentives to investments in energy-using new features. In addition

, the Department believes adoption of any of the design options considered will not affect utility or performance. E. Impact of Lessening Competition. The determination of this factor must be made by the Attorney General. F. Need to Save Energy. Dishwashers use electricity as a primary energy source, both for operation of the motors
and for the electric coils that are used in the drying cycle. In addition, that portion of water heater electricity consumption that provides hot water to the dishwasher is considered to be indirect dishwasher electricity consumption. Similarly, since some of the hot water that is supplied to dishwashers comes from gas water heaters, dishwashers are responsible for indirect gas consumption, too. In 1987, source electricity generation in the United States totaled 27.6 quadrillion Btu's, and gas consumption totaled 17.18 quadrillion Btu's. Dishwashers accounted for.8 percent (or .22 Quads) of the electricity generation and .4 percent (or .069 Quads) of the gas consumption: over six percent of that dishwasher energy consumption would be saved by standard level 1, and over eight percent of that consumption would be saved at level 2. Furthermore, standard level 3 would save over 10 percent of the 1987 dishwasher energy consumption. The sensitivity analysis on the LBL-REM indicates that if market improvements and consumer awareness of appliance efficiencies continue at their historical rates, then the projected savings at level 3 would be.17 Quads as compared to.65 Quads. - Conclusion. After careful consideration of the analysis, the Department is proposing a revision of the dishwasher standard to standard level 1. The Department proposes that standard level 1 for dishwashers saves a significant amount of energy, and is economically justified. As discussed above, DOE's analysis indicates that there would be a significant energy savings at each candidate standard level. For standard level 1, during the period 1993-2015, this savings would be .39 Quad of primary electricity compared to the base case. This represents five percent of the expected dishwasher energy consumption over that period. 

### Although standard level 1 would cause an increase in the initial price to the consumer of $10.75, the standard is estimated to reduce the typical consumer's life-cycle cost by $99. In addition, with a payback of 0.9 years, the candidate standard level satisfies the rebuttable presumption test, i.e., it has a value of energy savings that repaid the initial purchase price increase 

### to the average consumer in less than three years. The technologies that may be necessary to meet the standard are available now in the form of improved food filters used by some manufacturers. For manufacturers

, the standard is expected to result in long

-run returns on equity of 6.64 percent. The results of the analysis discussed above, could change if a different discount rate were used, energy prices drop, or if the uses of national average energy prices and national appliance usage rates have introduced an uncertainty into the analysis.
Standard levels 2 and 3 were both found to save a significant amount of energy but the Department proposes that neither is economically justified. Standard levels 2 and 3 result in marginal benefits compared to standard level 1. The life-cycle cost savings compared to standard level 1 are calculated to be $5.45 and $6.41 respectively

. While the energy savings are projected to be 0.52 and 0.65 Quads. The payback period for standard levels 2 and 3 are less than 3 years; however, the bulk of the consumer benefits are due to standard level 1 benefits.
Furthermore

, if energy prices were to drop from the projected or usage rates were lower than assumed

, standard
level 1 could become the minimum lifecycle cost point. If this were to occur, DOE is concerned that consumers would be precluded from purchasing the most cost-effective unit.
Level 3 standards

, the maximum technologically feasible level, involves technologies that the Department believes are generally available, i.e., improved food filter, improved motor and improved fill control . However, the Department finds that the price of the improved fill control, $12.57, results in a $13.53 reduction in lifetime operating cost which yields the life-cycle operating cost savings of $.96, or less than $.10 per year over the average
dishwasher lifetime. While the benefits
of standards

, on a life-cycle cost basis,
are calculated to exceed the cost to

consumers , the Department believes the
risks of standards at this level exceed the possible benefits . As can be seen in Figure 3. 15 of the Technical Support
Document , the life-cycle cost curve for standard dishwashers is relatively flat between standard levels 1 and 3; DOEbelieves that the differences in the lifecycle costs between points 1, 2, and 3 are probably less significant than the possible inaccuracy of the analysis. For example, if usage is lower than that assumed, or if energy prices are lower than those used in the analysis,

### Federal Regist / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32755

incremental increases in price to meet standard level 3

, as compared to standard level 2, would likely not be met by the value of the energy saved. Furthermore, the analysis predicts energy savings of .65 Quads, or .13 Quads over standard level 2. The Department believes that the marginal energy saving benefits of level 3, as compared to the uncertain nature of the analysis as discussed

, particularly with respect to the LBL-REM ' s forecast of relatively small improvements in SWEF over the period of analysis and the questions surrounding dishwasher usage and appropriate discount rates do not justify standards at this level. Therefore, the Department concludes for the reasons discussed above, that revised
dishwasher standards at standard level 3 are not economically justified. Level 2 standards involve technologies that the Department believes are widely available, i.e., improved food filter and improved motor. However, the Department finds that the price of the improved motor, $6.21, results in a $11

.66 reduction in lifetime operating ' cost or a life-cycle cost savings of $5.45; approximately $.50 per year over the average dishwasher lifetime. As discussed above, the Department does not believe that these marginal savings justify standards at this level, because of the associated risks at this level. Therefore, the Department concludes that revised dishwasher standards at standard level 2 are not economically justified. In weighing the costs and benefits of standards

, the Department gave considerable weight to the impacts on consumers as measured in the life-cycle cost analysis

. The major impact of standards on life-cycle cost occurs at standard level 1. Because of the uncertainty of the analysis, i.e., energy price forecasts and usage rates, consumers may not receive the marginal benefits in life-cycle costs projected at levels 2 and 3. Furthermore, DOE believes that standard levels 2 and 3 could be beyond the minimum life-cycle

cost . point, precluding consumers from purchasing the most cost

-effective unit. Therefore, DOE is proposing standard level 1. The Department request comments on the above, including DOE's weighing of the factors.

b. Clothes T4rrashers

1. Classes
In the advance notice, the Department discussed its methodology for reviewing. the energy conservation standards for
clothes washers that were established by the Act, to determine if the standards should be amended. NAECA prescribed a design standard for clothes washers; units manufactured after January 1, 1988, are required to have an option for a cold
water rinse. 

### The following are the classes of clothes washers that have been identified: Top Loading, Compact (1.6 ft.3 capacity or less) Top Loading, Standard (1.61 to 2.74 ft.3 capacity) Top Leading, Large (2.75 ft.3 capacity or greater) Top Loading, Semi-Automatic Front Loading Suds Savers A review of the characteristics and data regarding fully automatic top loading washers indicates that class distinction by capacity may be appropriate

. Compact washers offer the utility of small cabinet size allowing them to be placed in size-restricted spaces. Larger washers offer the utility of time savings for users that have large laundry loads

. However, the energy use characteristics of existing machines indicates that energy use is not a linear function of capacity as might be expected . This seems to preclude having one standard for all capacities

. From the data collected to date, the Department is unable to discern exactly why energy usage varies disproportionately with capacity

, but suspects that different -mixes of temperature control functions may play a major role. If this is the case, temperature control function may be a better criteria than capacity by which to distinguish classes. The Department seeks comments on this subject. Furthermore, since the last three of these classes collectively represent less than 5 percent of total industry shipments, the Department did not analyze them and is therefore not proposing amended standards for these classes; however

, the existing standard requiring a cold water rinse option is proposed to remain in effect.
2. Design Options
The following is a list of design options that were examined:

Warm Rinse Elimination Improved Fill Control
Reduced Thermal Mass
Increased Mo tor Efficiency Thermostatically Controlled Mixing Valves Employed

3. Comments on the Advance Notice of Proposed Rulemaking For clothes washers, NRDC suggested that the Department consider: (a) Reduced wash cycle temperatures; (b) insulation of the drum, (c) a combination of (a) and (b); and (d) the wide range of currently available designs for energy efficiency in clothes washers. (NRDC, No. 3, at 6). In its analysis, the Department did consider each of these energy conserving options. Reduced wash cycle temperatures were
dismissed since studies have shown that such lowered water temperatures affect performance. Otherwise the Department did examine all energy

-concerning designs in clothes washers that could be found through literature searches, discussions with industry personnel and
researchers

, both domestically and
abroad. NRDC suggested that the "suds savings" feature of certain clothes washers be considered a conservation measure, rather than a separate class. (NRDC, No. 3, at 3). The Department believes that "suds savings" provides a unique utility to the

consumer, both as a feature in itself, and as a water and detergent saver. Furthermore, because of the fact that "suds savings" requires a nearby sink or other storage device, its applicability as a conservation measure could not be universally employed. Therefore, the Department has concluded that "suds savings" clothes washers should be a separate class. The Speed Queen Company (Speed Queen) suggested that the large capacity
clothes washer not be considered as a separate class, but rather it should remain in the class as standard
machines so as to reflect their higher actual energy usage. (Speed Queen, No. 4, at 1-2). The Department agrees with Speed Queen that large capacity washers use more energy. The Department, however, is proposing to retain large capacity washers as a separate class because of their utility as discussed above. If large washers were to be grouped together With standard size washers and required to meet a single standard

, the large washers would likely have more difficulty in meeting that standard because energy
use is a function of volume.

4. Efficiency Levels Analyzed

Table 3-3 presents the efficiency levels that have been selected for analysis for 1993. These efficiency estimates are for a standard capacity. top-loading clothes washer. Alternate
levels w ere selected to generate a range of impacts for analysis. As noted earlier, standard level 1 corresponds to efficiencies achieved by elimination of a warm water rinse; level 2 corresponds to efficiencies achieved by thermostatic mixing valves ; level 3 adds a more
efficient motor; and, level 4 substitutes a plastic tub.

### 32756 Federal Register '/ Vol. 54, No. 152 / Wednesday , Augu st 9, 1989 / Proposed Rules

TABLE 3-3--STANDARD LEVELS ANALYZED FOR TOP-LOADING CLOTHES

WASHERS



### Size

Compact ^ ...:............ 0.761 0.96 Standard z............ .96 123 Large' ...................... 90 1.13 ,ergy Factor (cu. ft. Base" E c kWh) line. I , 11 2 3 4

1 Capacity less than 1.6 ft.' 2 Capacity 1.6 ft.3 to 2.75 ft.3 3 Capacity greater than 2.75 ft.' 1.02
1.32
1.21 1.04

# 1 1.05 1.34 1.35 1.23 1.24

Payback Period. Table 3-4 presents the payback period for the efficiency levels analyzed. Standard level 1
involves efficiencies achievable with eliminating warm water rinse altogether,
level 2 involves additional efficiencies achievable with thermostatic mixing values, level 3 adds an improved motor, and level 4 replaces the metal_ tab with aplastic one. For standard capacity, toploading clothes washers, each standard
level satisfies the rebuttable presumption test, i.e., the additional cost of purchasing a product at each efficiency level will be less than three times the value of the energy savings that the consumer will receive during the first year. See Technical Support
Document Table 6.5.

TABLE 3-4.-PAYBACK PERIODS OF DESIGN

OPTIONS (YEARS) FOR STANDARD SIZE,

TOP-LOADING CLOTHES WASHERS

Payback Period

Standard Level: 2 ....................................................... 0 2 ....................................................... 0.9 3 ....................................................... 1.2 4 ....................................................... 1.6

Significance of Energy Savings. By the year 2015, the weighted average energy consumption of new clothes washers sold in the absence of amended standards is projected to be 923 kilowatt hours per year (kWh/yr) a decline from 1152 kWh/yr in 1937. See Technical Support Document, Table 5.9. At standard levels 1 through 4, the average consumption is expected to be 895, 867, 860, and 858 kWh/yr, respectively. See Technical Support Document, Table 5.10. The LBL-REM projects, for the period 1993-2015, the following energy savings would result from the increased
standards:

Level 1-0.70 Quad Level 2-1.21. Quads Level 3-1.38 Quads Level 4-1.50 Quads

Economic Justification.-.r'r. Economic impact on Manufacturers and
Consumers. The per unit increased cost
to manufacturers to meet the level I efficiency is $0; to meet Ievels 2- 4, the manufacturers' cost increases, as compared to the base case, are $13, $17, and $23, respectively, for a standard, top loading clothes washer. See Technical Support Document, Table 3.8. At those levels of efficiency, the incremental consumer price increases are $0, $19, $25.30, and $33.80 for standard levels 1-4, respectively. See Technical Support Document, Table
3.16. The LBL-IMUM results for clothes
washers show that standard level 1
would cause manufacturers to have a decline in ROE from 6.64 percent in the base case to 6.45 percent (a decline of 2.9 percent). Standard levels 2-4, however, are projected to improve manufacturers' ROE's by 3.5 percent, 6.3 percent, and 8.4 percent, respectively.
See Technical Support Document, Table 7.17. This industry has displayed continuing consolidation for several decades, especially during periods of low earnings. By increasing profitability, as DOE projects at standards levels 2, 3, and 4, standards could lead to a
reduction in the rate of such consolidations, thereby possibly contributing to more robust competitiveness than is likely in the
base case. The Department's characterization of the prototypical manufacturer in the base case assumes that manufacturers' typical clothes washer designs are based on the combination of options presented in the Engineering Analysis for the baseline unit. If manufacturers use a different combination of design options to produce clothes washers that minimally comply with the 1993 standard, the Department may have inappropriately characterized the financial position of the prototypical manufacturer in the LBL-MiM. Furthermore, since financial data of the type needed to characterize the prototypical manufacturer are generally not available, DOE had to make a number of assumptions based on the limited data publicly available, e.g., Securities and Exchange Commission 1OK reports and company annual reports. Because of the significant impact that these assumptions could have on the results of the analysis, DOE requests comments on these issues, particularly from small manufacturers. B. Life Cycle Cost and Net Present Value. The LCC analysis indicates that at each possible standard level the increase in purchase price would be offset by savings in operating expenses. See Technical Support Document, Tables 3.16 and 3.17. Also, of the four candidate standard levels, level 3 had the lowest consumer life-cycle cost. This
indicates that the standard level would not cause any economic burden on the average consumer because of the decreasing life-cycle costs.

Standard level 1 would cause a reduction in life-cycle cost of $147 for a top loading standard-sized clothes washer; standard level 2 would reduce life-cycle cost an additional $19, standard level 3, the minimum life-cycle cost point, an additional $4, while
standard level 4 would result in an increase of $7 compared to standard
level 3. While DOE examined the effect of different discount rates, 5, 7, and 10 percent, on the LCC curves and generally found little impact, the Department did not consider higher discount rates. Similarly, DOE did not consider different energy prices, including regional prices, in the LCC analysis. However, DOE did examine the effect of a usage rate different from the 416 cycles per year set by the DOE test procedure. Recent Procter and Gamble data appear to indicate that the national average clothes washer annual usage rate is 406 cycles per year, approximately 3 percent less than the test procedure representative average use cycle. The slightly lower usage
numbers tend to result in lower lifecycle cost estimates, with the initial purchase price increase carrying greater weight in the calculations. See Technical Support Document, Tables 3.16 and 3.17. Another way to compare the costs
and benefits that would be associated with any standard level is to estimate the net impact on life-cycle cost. Such a comparison for each standard level is
shown. below. The incremental consumer price for each standard level for all equipment purchased in the first year after the standard goes into effect; the total operating expense savings calculated at a 5, 7 and 10 percent discount rates; and the net difference in discounted savings and incremental prices paid are presented. The results show that, for each standard level, there is a positive net reduction in life-cycle cost; which indicates that, using national average values, the benefits of
each candidate standard level exceed the increase in price paid for the appliance by the affected consumers.

### Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32757

CLOTHES WASHER NET PRESENT VALUES

[in millions of dollars, 19871

Operating expense

Price savings LCC Standard level in.

crease 5 7 10 differences per

- per- per. cent cent cant

............................. 29.27 461.70 407.12 342.03 377.85
2 ..........................._i 64.39 726. 58 640

. 75 538

.09 576.36
3 ............................. 99.11 783

. 79 691

. 19 580

.67 592.08
4- ........................... 153.77 803.95 709.01 595.63 555.23

The LBL-REM employs national average energy prices and usage rates. The appropriateness of this approach depends on the relationship between energy prices and consumer choice of efficiency levels and the relationship between consumers' expected usage and choice of energy efficiency level. If those consumers who face higher energy prices and/or expect to use their dishwashers more intensively, are, on average, more likely to buy higher efficiency dishwashers, then a modeling approach that assumes that national average energy prices and usage rates apply to all consumers will yield results that may overstate the net benefits that could be expected. As discussed above,
recent Procter and Gamble data have shown declines in usage rates for clothes washers. The Department requests comments and data on the effects of energy prices and expected usage rates on consumer's choice of efficiency level, The NPV analysis indicates that standard level 1 would produce a net present value of $1.45 billion to consumers. The corresponding NPV numbers for levels 2-4 are $2.47 billion, $2.62 billion, and $2.47 billion; respectively. See Technical Support Document, Table 5.14. C. Energy Savings. As indicated above, standards will result in savings of electricity consumption for clothes washers. If, however, the marketplace continues to demand changes in efficiency at the same rate as historically, the LBL-REM projects that energy savings from standards over the 1993-2015 period will be reduced by .43 Quads. D. Lessening of Performance of
Products. As indicated above, DOE
established classes of products in order to assure that the standards analyzed would not lessen the existing utility or performance of clothes washers. Standard level 1 involves an efficiency level that was attained by eliminating the warm water rinse option. It could be argued that if manufacturers
chose to achieve the standard's efficiency levels by eliminating that option, the utility of the clothes washer could be lessened. DOE appreciates that concern, but considers the utility of a clothes washer is its ability to clean clothes. The Department welcomes comments about the utility of a warm water rinse option in a clothes washer. E. Impact of Lessening Competition. The determination of this factor must be made by the Attorney General. F. Need to Save Energy. Like dishwashers, clothes washers use electricity directly, and are responsible for the water heater energy consumption that is necessary to supply the heated water to the clothes washer. That water heater energy consumption is primarily either electricity or natural gas, depending upon how the water heater is fueled. Consequently, clothes washers are responsible for both gas and electricity consumption. In 1987, 1.6 percent of source electricity (or,.442 Quads) and 1.4 percent of natural gas consumption (or, .241 Quads) were consumed by clothes washers. Standard level 1 would save nearly five percent of the .683 Quads that clothes washers consumed in 1987. Standard levels 2 through 4 would save 8.1 percent, 9.2 percent, and 10.0 percent, respectively.The sensitivity analysis on the LBLREM indicates, however, that if consumer awareness of, and concern with, appliance efficiencies were to continue at their historic averages, the projected savings from standard level 3 would be 1.07 Quads over the 1993-2015 period. Conclusion. After careful consideration of the analysis, the Department is proposing a revision of the clothes washer standard to include a range of standards that includes continuing the 1988 NAECA standards to standard level 2. The Department proposes that each candidate standard
level for clothes washers saves a significant amount of energy and that
standard levels 1 and 2 are economically justified. However, because of the analytical issues discussed above, the Department is not proposing specific standard levels within the above range. Rather, DOE is presenting the results of the analysis and is soliciting additional comment and
information to be considered in promulgating the final rule. The final rule will specify a specific level for clothes washers; the level selected could include no change to the 1988 NAECA
standards. As discussed above, DOE's analysis
indicates that there would be a significant energy savings at each candidate standard level of efficiency. During the period 1993-2015, the cumulative energy savings would be .7 Quads of primary electricity for level 1, and 1.2 Quads for level 2. For standard level 1 these estimated savings can be achieved by eliminating warm water rinse options; if so, the
standard would cause no extra costs to
manufacturers and zero consumer financial expenditure. In fact, if the savings are attained by this change in feature, the standard is estimated to reduce the typical consumer's life-cycle costs by $144, from $3,870 to $3,726, with a zero payback period (since there are no additional expenses that are possible to pay back). For standard level 2 these savings would be achieved by adding thermostatic mixing values resulting in an increase in consumer expenditure of $19 with a corresponding reduction in life-cycle costs of $19. Although these standards were assumed to eliminate warm water rinse, some consumers may continue to want
clothes washers with a warm water rinse. If some manufacturers responded to these consumer demands by continuing to provide that feature, then those producers would have to meet the' energy conservation standard by some other efficiency improvement. In doing that, there would be some additional manufacturing costs and higher consumer prices, the amounts of which would depend on the energy conservation improvement made. In addition, while the same amount of energy would conceivably be saved, there would be some positive payback period for the consumer, the length of which would also depend on the extra expense of the other efficiency improvement. DOE believes the technologies that may be necessary to meet each standard level will be commercially available by 1993. The technologies to meet standard levels 1-3 are considered to be presently widely available or capable of being carried out. For manufacturers, level I standards are expected to produce
increases in their return-on-equity of 6.45 percent, a decline of nearly 3 percent from the baseline. Standard level 2 will result in a return-on-equity of 6.87 percent. DOE considers the decline in ROE for level 1 to be an anomaly of the LBL-MIM which is caused by the no additional manufacturer cost of the eliminate warm rinse design option.
In the base case (1988 NAECA standards), DOE believes the analysis may not accurately estimate the impacts
of amended standards. As discussed above, the Department believes that the LBL-REM overestimates energy consumption in the base case by forecasting moderate increases in

### 32758 Federal Register / Vol. 54, No. 1 52 -/ Wednesday, Augus t 9, 1989 / Proposed Rules

clothes washer efficiency. Furthermore, characterization of the prototypical firm
in the LBL-MIM does not account for
manufacturers electing to continue to provide a warm water rinse option, and adding other, presumably more costly design options. For standard level 1, the Department proposes that there would be a significant conservation of energy and that the standards are projected to have little economic impact on manufacturers. In addition, the standards would likely not cause an increase in price to consumers. However, standards at this level, eliminating warm water rinse, may be viewed as negatively affecting the utility of the product. Also, the analysis may underestimate the economic impacts on consumers and manufacturers as discussed above, if manufacturers elect to retain the warm water rinse option and incorporate other design options. For standard level 2, the Department proposes that there would be significant conservation of energy and that the standards are projected to have little economic impact on manufacturers. Standards at this level would likely be met with existing technology and would reduce consumer life-cycle costs. More stringent standard levels were examined and rejected for the following reasons: First, the level 4 standard, the maximum technologically feasible level, is beyond the minimum life-cycle cost point; this would preclude the average consumer from purchasing the most cost-effective product; i.e., the minimum life-cycle cost unit. In addition, the results of the analysis could change if different annual cycles of operation were used, thereby reducing benefits of standards. While standard level 4 would save additional amounts of energy, 1.5 Quads as compared to 0.7 Quads, level 1, and would appear to have positiveeconomic impacts on manufacturersstandards are forecast to cause anincrease in manufacturers' return-onequity-DOE does not consider thesebenefits to outweigh the consumer lifecycle cost impacts.Level 3 standards, the minimum lifecycle cost point, involves technologies the Department believes to be widely available, i.e., warm rinse elimination, ,and use of thermostatic mixing valves and improved motors. However, the Department believes that the additional price of the improved motor, $5.30, and the corresponding decrease in life-cycle costs, $4 or approximately $.30 per year over the average clothes washer lifetime, do not justify standards at this level. DOE believes the risks of standards at this level exceed the possible benefits. As can be seen in Figure 3.17 of the Technical Support . Document, the life-cycle cost curve for top-loading standard size clothes
washers is relatively flat between
standard levels 2 and 4; DOE believes that the differences in the life-cycle costs between these levels are likely less significant than the uncertainty of the analysis. For example, for consumers whose usage is lower than assumed by the test procedures or whose energy prices are lower than those used in the analysis, the incremental price increase to meet
standard level 3 , compared to standard level 2, would likely not be met by the value of the energy saved. In addition, the analysis predicts energy savings of 1.38 Quads, or.17 Quads over standard level 2. Finally, the impact of this standard on manufacturers is likely to
increase manufactarers'return-onequity. The Department believes that the marginal benefits as compared to the uncertainty in the analysis as discussed above, do not economically justify standards at this level. Therefore, the Department concludes that revised
clothes washer standards at standard level 3 are not economically justified.

c. Clothes Dryers

1. Classes

In the advance notice, the Department discussed its methodology for reviewing energy conservation standards for clothes dryers that were established by the Act, to determine if the standards should be amended. NAECA prescribed a design standard for gas clothes dryers; standing pilot lights are prohibited on units manufactured after January 1, 1988. The following classes of clothes dryers
have been identified:

Electric, Standard Electric, Compact (120x) Electric, Compact (24OV ) Electric Heat Pump Gas, Standard Gas, Compact
Compact gas clothes dryers and heat pump clothes dryers were not analyzed for this rulemaking. In these instances the product classes represent 'a very small segment of the market and manufacturer or industry cost and performance data were not available, Therefore, cost and performance
estimates were not performed. Compact

, gas clothes dryers will retain the ban on standing pilot lights and heat pump clothes dryers will have no standards imposed in this rulemaking. Both of
these classes will be addressed in the next rulemaking cycle. 

### 2. Design Options

The following is a list of design options that were examined:
Automatic Termination by Temperature Sensing Automatic Termination by Moisture Sensing
Added Insulation Recycle Heat Exchanger Used



### 3. Comments on the Advance Notice of Proposed Rulemaking
The Department received one comment concerning clothes dryers. In its comments , NRDC suggested consideration of both condensing and non-condensing heat exchangers, a variety of efficiencies of heat pump and microwave dryers, as well as spinassisted drying. (I'NRDC, No. 3, at 7-8). The Department has analyzed both condensing and non-condensing heat exchangers. In addition, DOE identified and analyzed one prototype heat pump dryer, which the Department believes largely captures the likely energy savings possible. The Department has placed heat pump clothes dryers in a
separate class because such units are likely to be relatively larger than conventional dryers, relatively slower in drying time, and would probably need a drain (thereby preventing their universal applicability, and, as a consequence, affecting their utility).

DOE does not believe that a microwave dryer is technologically feasible. DOE requested data on microwave dryers in the advance notice,
no information has been submitted. Therefore, this design option has not
been evaluated. Standard levels I and 2 represent efficiencies achieved by two different forms of automatic termination,temperature-sensing and moisturesensing, respectively. The test procedure gives both moisture-sensing and temperature-sensing 'termination the same energy savings credit. In theanalysis the Department gave moisturesensing approximately 78 percent more credit than temperature- sensing termination. Nevertheless, in evaluating the results, the Department treated them as having the same energy savings impact. The Department requests comments about the relative energy
efficiencies of these two forms of automatic termination in clothes dryers,

4. Efficiency Levels Analyzed

Tables 3-5 and 3-6 present the efficiency levels that have been selected for analysis for 1993.

### Federal Register / Vol. 5A, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32759

TABLE 3-5.-STANDARD LEVELS ANALYZED FOR STANDARD CAPACITY ELECTRIC AND GAS CLOTHES DRYERS

Standard level Energy factor lib/ k7'Stt) Energy

Baseline .

.......... ................^
1 ................................

3 ................................
4 ................................ factor (lb/ kWh)

2.75 2. 95 2.49

2226 . 

### ,. The LEI---REM projects. for the 

### period

ai2 2.82 

### 199,3-2015the following energy saving

3.19 233 

### would result from the increased 3.39 .3.04 standards:

TABLE 3-6. -STANoARD LEVELS MALYZED FOR COMPACT CLOTHES DRYERS

Compact 11r3Y Goncact,

24'd
Standard' level energy energy factor (lbl kWta) factor (%P/

kWh)

aline ...._ ............._._..^ 2.91 263 t .............................. 3.13 2.82

.... . . ... 2.---

- 3.31 2.99

.. .. . -- .. .... 3 .......................... 2.30 3.05 4 ..................... _......... 1 3.60 3.25



### Payback Period. Table 3-7 presants the payback periods for the efficiency levels analyzed. Fbr standard-size electric clothes dryers, only standard level 4 does not satisfy the rebuttable presumption test; levels 1-3 all will result in paybacks to the consumer in less than 3 years.
For standard gas clothes dryers, however, there is no standard level whose efficiency improvement will repay itself to the consumer in less than 3 years.

TABLE 3-7-PAYBACK PERIODS OF €)ESIGN OPTIONS (YEARS) FOR STANDARD

ELECTRIC AND GAS CLOTHES DRYERS

Payback

Standard level: 1 ............... ............. _.. Electric

2.0 1.9
2.5 4.7 periods

Gas

7.2 6.5 8.8 16.5
See Technical Support Document, Table 6.4.

Significance of &&terg Savings. By the year 2015, the weighted average energy consumption of new electric and gas clothes dryers sold in the absence of amended standards is projected to be 933 kWh/yr and 3.52 million Btu's f year, respectively. See Technical Support Document, Tables 5.15 and 5.16. The majority of the savings due tostandards is electricity, since the LBLREM projects that between 1993 and 1996 gas clothes dryer average energy consumption;-in the base case, will decrease by over 10 percent (the base case electric clothes dryer energy consumption is not expected to change until after 2005). This is because residential electricity rates are projected to decline from 1984 to 1995, then increase, reaching 1985 levels by 2015

' 

### t er

### m -)

Electr icity Cos

Le;=e. i.... ... .... 0

. 50 Q lad ... ................. 0
Level 2.

.... ......... 0.67 Q-uad ...

................. 0
Level 3.

........ _.... 1.08 Quads .................. 0.02 Quarts
Lvel 4 ............... 1

. 70 Quads

.................. 0.08 Quads

On the basis of the above, DOE
believes that the standard levels -. considered for clothes dryers would result in a significant conservation of energy (iotal gas and electricity). Economic j ustifzcat on-A. Economic impact on Manufacturers and
Consumers. The per unit increased cost
to manufacturers to meet the level 1 efficiency is $8 for a standard electric or gas unit. To meet levels 2-4, the incremental cost increases are $5, $6.60, and $30, respectively. See Technical Support Document, Tables 3.12 and 3.13. At those levels of efficiency, the incremental consumer price increases for an electric or gas dryer are $11.60, $7.10, $10.00, and $46.90, respectively.
See Technical Support Document, tables 3.14 and 3.15.
The LBL-hIM results for clothes dryers estimate that standard level I would cause manufacturers to have an increase in ROE from 6.6 percent in the base case to 8.1 percent (a gain of 23 percent). At standard level 2 through 4, the percentage changes in ROE (compared to the base case ROE) are 42, 14, and minus 145 percent, respectively. See Technical Support Document, Table 7.25. The reason for the striking decline in
ROE under standard level 4 is thought to be the industry' s price elasticity of demand. standard level 4 causes such a large price increase that a significant decline in the quantity of dryers demanded occurs. In LBL-MIM, this fall in unit sales causes a greater reduction in revenue than in variable costs and, as a result, profit and ROE decline. This industry has displayed continuing consolidation for several decades, especially during periods of low earnings . By increasing profitability, as DOE projects at standard levels-1, 2
and 3 standards could lead to a reduction in the rate of such - consolidations, thereby possibly contributing to more robust competitiveness than is likely in the base case. The Department's characterization of the prototypical manufacturer in the
base case assumes that manufacturers' typical clothes dryer designs are based on the combination of options presented in the Engineering Analysis for the
baseline unit. If manufacturers use a different combination of design options to produce clothes dryers that minimally comply with the 1993 standard, the Department 'may have inappropriately characterized the financial position of the prototypical manufacturer in the LI3L-1t31M. Furthermore, since financial data of the type needed to characterize the prototypical manufacturer are generally not available, DOE had to make a number of assumptions based on the limited data publicly available, e.g.,
Securities and Exchange Commission 10K reports and company annual reports. Because of the significant impact that these assumptions could have on the results of the analysis, DOE requests comments on these issues, particularly from small manufacturers. B. L fe Cycle Cast and Net Present Value. For clothes dryers, the LCC analysis indicates that at each possible standard level, except level 4 for gas clothes dryers, the increase in purchase price would be offset by savings in operating expenses . See Technical Support Document , Tables 3.18 and 3.19. Also, of the four candidate standard levels, standard Ievel3 for electric clothes dryers and standard level 2 for gas clothes dryers had the lowest lifecycle cost. This indicates at these levels the standard would not cause any economic burden on the average
consumer because of the decreasing lifecycle costs. Standard level I would cause a reduction in life-cycle costs of $45.62 for electric standard clothes dryers and $7.68 for gas standard clothes dryers;
standard level 2 would reduce life-cycle cost an additional $37.22 and $7.88 respectively ; standard level 3 would result in a $5.28 reduction and $5.03 increase for standard electric and gas clothes dryers, respectively ; standard level 4 would result in an increase of $ 1.59 and $30.84 respectively.
While DOE examined the effect of different discount rates, 5, 7, and 10 percent, on the LCC curves and generally found little impact, the Department did not consider higher discount rates. Similarly, DOE did not consider different energy prices, including regional prices , in the LCC analysis. However, DOE did examine

### 32760 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 j Proposed Rules

the effect of a usage rate different from the 416 cycles per year set by the DOE test procedure. Recent Procter and Gamble clothes washer data, when applied to clothes dryers, appear to indicate that the national average clothes dryer annual usage rate is 406 cycles per year, approximately 3 percent less than the test procedure representative average use cycle. The slightly lower usage numbers tend to result in lower life-cycle cost estimates, with the initial purchase price increase carrying slightly greater weight in the calculations. See Technical Support Document, Tables 3.18 and 3.19. Another way to compare the costs and benefits that would be associated with any standard level is to estimate the net impact on life-cycle cost. Such a comparison for each standard level is shown below. The incremental consumer price for each standard level for all equipment purchased in the first year after the standard goes into effect; the total operating expense savings calculated at a 5 , 7 and 10 percent discount rates; and the net difference in discounted savings and incremental prices paid are presented. The results show that, for each standard level, there is a positive net reduction in life-cycle cost; which indicates that, using national average values, the benefits of
each candidate standard level exceed the increase in price paid for the appliance by the affected consumers.

CLOTHES DRYER NET PRESENT VALUES

(In millions of 1987 dollars]

Price Operating expense

savings LCC Standard level In. 5 7 10 differcrease per- per- per- .noes

cent cent cent

t ............................. 50.07 213

.24 184 .00 150. 43 193.93

2- * ........... . .......... 80.77 378.45 326.59 266. 96 245.82

3 ............................. 124.17 435.39 375.71 307. 11 251.54 4 ............................. 322

. 83 600

.60 518 .26 423. 66 195.43

The LBL-REM employs national average energy prices and usage rates. The appropriateness of this approach depends on the relationship between energy prices and consumer choice of efficiency levels and the relationship between consumers' expected usage and choice of energy efficiency level. If those consumers who face higher energy prices and/or expect to use their dishwashers more intensively, are, on average, more likely to buy higher efficiency dishwashers, then a modeling approach that assumes that national average energy prices and usage rates apply to all consumers will yield results that overstate the net benefits that could be expected. As discussed above, recent Procter and Gamble data, when applied to clothes dryers, would appear to show a decline in usage rates for clothes dryers. The Department requests
comments and data on the effects of energy prices and expected usage rates on consumer's choice of efficiency level. The NPV analysis indicates that standard level 1 would produce a net present value of $856 million over the forecast period (all of the $856 million
would be attributed to the standard on electric dryers). At standard level 2, the NPV would be $1,646 million, of which $1,625 would come from the standard on electric dryers. Standard level 3 would produce an electric dryer NPV of $1,711 million and a gas dryer NPV of minus $21 million, for a total NPV for the standard of $1,690 million. Lastly, standard level 4 produces the same $1,711 million NPV for electric dryers, but, under this standard level, the NPV for gas dryers is a negative $229 million, leaving the standard's NPV at $1,482
million. See Technical Support Document, Table 5.21. C. Energy Savings. As indicated above, standards will result in savings of energy consumption by clothes dryers. The cumulative energy savings over the 1993-2015 period would range from 0.5 Quads at standard level 1 to 1.78 Quads at standard level 4. B. Lessening of Utility or Performance of Products. As indicated above, DOE established classes of products in order to assure that the standards analyzed would not lessen the existing utility or performance of clothes dryers. E. Impact of Lessening Competition. The determination of this factor must be made by the Attorney General. F. Need to Save Energy. Clothes dryers use electricity and natural gas as their energy sources. Approximately 1.8 percent of the nation's 1987 source electricity generation, and 0.3 percent of that year's natural gas consumption were used to operate clothes dryers. This represented a total of .55 Quads of energy, of which standard level 1 would save 4.1 percent. Standard levels 2 through 4 would save 7.2 percent, 9.0 percent, and 14.8 percent, respectively. The LBL-REM sensitivity analysis indicates, however, that if consumer awareness of, and concern with, appliance efficiency were to continue at its historical rate, the projected savings at standard level 2 would be .09 Quads over the 1993-2015 period. Conclusion. After careful consideration of the analysis, the Department is proposing a revision of the clothes dryers standard to require all clothes dryers manufactured after January 1, 1993, to be equipped with an automatic termination device, either a temperature or moisture sensing termination control. The Department proposes that this prescriptive standard saves a significant amount of energy and is economically justified. As discussed above, DOE's analysis
indicates that there would be a significant energy savings at the candidate standard levels of efficiency. During the period 1993-2015, the cumulative energy saving is expected to be between.50 Quads (level 1) and.87 Quads (level 2) of primary electricity. This represents three to six percent of the expected clothes dryer electricity consumption over that period. DOE's analysis indicates that there would not be any gas saved due to the imposition of the proposed standard. However,
DOE believes this is due to the LBLREM forecast that between 1993 and 1996 the average energy consumption of new gas clothes dryers is to decrease which the Department believes is due to the incorporation of automatic
termination devices. Therefore, DOE believes that for gas clothes dryers the marketplace forces
will demand automatic termination devices. While the analysis would appear to indicate that level 2, moisture termination, would save more energy, and do so at lower consumer life-cycle costs than level 1, temperature termination, the Department's clothes dryer test procedures treats both as having the same energy conservation potential. DOE's analysis of the available data indicates that either the two technologies have the same energy conservation potential or that the test procedure gives too much credit to temperature termination. There are presently no data available to DOE to indicate that the test procedure should give moisture termination a larger energy conservation credit. Finally, as indicated above, the data are not conclusive that the test procedure should be revised. Therefore, DOE is proposing a prescriptive standard that
would allow manufacturers to choose either type of automatic termination
device. Although a prescriptive standard for electric clothes dryers would cause an increase in the initial price to the consumer of $11.57 and $18.67 fortemperature-termination and moisturetermination, respectively, the standard is calculated to reduce the typical consumer's life-cycle costs of $38.80 and $69 for temperature-termination and moisture-termination, respectively. For gas clothes dryers, a prescriptive standard would cause an increase in the initial purchase price to the consumer by the same amount as electric clothes

### Federal Register / Val. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules 32761

dryers and with a corresponding decrease in life-cycle cost of $7.68 and $15.56 for temperature-termination and moisture-termination, respectively. The technologies that may be necessary to meet the standard are
available now in the form oftemperature-sensing and moisturesensing termination controls that are presently installed in many electric clothes dryers. For manufacturers, the standard is expected to result in an increase in long-run returns-on-equity from 6.60 percent to between 8.10 percent and 9.40 percent. As discussed above, there. is uncertainty about the forecasting effort; for example, the results of the analysis could have been different if energy prices changed differently from the energy price forecasts or if use of national energy prices and appliance usage rates introduced a bias. The Department examined more stringent standard levels and rejected them for the following reasons: First the level 4 standard, the maximum technologically feasible level, is beyond the minimum life-cycle cost point for both gas and electric clothes dryers; this would preclude the average consumer from purchasing the most cost-effective .product, i.e., the minimum life-cycle cost unit. Furthermore, the analysis indicates that the standard would cause an increase in the initial price to the consumer of nearly $46.00 for both electric and gas clothes dryers. This increase in price is expected to preclude many consumers from purchasing clothes dryers and would also cause the negative return-on-equity projected by the LBl --MIM. While standard level 4 would save additional amounts of energy (1.78 Quads as compared to 0.5 Quads, level 1); the Department believes standards at this level would have negative impacts on manufacturers and consumers as discussed above. Level 3 standards involve technologies the Department believes to be generally available, i.e., automatic termination devices and 1 inch insulation. However, for gas clothes dryers the standard is beyond the minimum life-cycle cost point, which would prevent some consumers from being able to purchase the cost-effective units for them. For electric clothes dryers, the Department believes that the additional price of the insulation, $10.02, and the corresponding minimal decrease in life-cycle costs, $5.03 or less than $.50 per year over the average clothes dryer lifetime, do not justify standards at this level. DOE believes the risks of standards at this level exceed the possible benefits. As can be seen in Figure 3.19 of the Technical Support. Document, the life-cycle cost curve for standard electric clothes dryers is relatively flat between standard levels 2 and 3; DOE believes that the difference in the life-cycle costs between these levels are likely less significant than the accuracy of the analysis. For example, for consumers whose usage is lower than assumed by the test procedures or whose energy prices are lower than used in the analysis, the incremental price increase to meet standard level 3, as compared to standard level 2, would likely not be met by the value of the energy saved. In addition, the analysis predicts electricity savings of 1.06 Quads, or.19 Quads over standard level 2. Finally, the impact of the standards on
manufacturers is to reduce their returnon-equity from 9.4 percent at level 2 to 7.5 percent. The Department believes .that the marginal benefits as compared to the burdens of the standards and the questionable nature of the analysis as discussed above do not justify standards at this level. Therefore, the Department concludes that revised clothes dryer standards at the standard level 3 are not economically justified.

IV. Environmental

, Regulatory Impact, Takings Assessment

, Federalsla and Regulatory Flexibility Reviews
The Department has reviewed today's proposed action in accordance with the Department's obligations under: '• The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 at seq.), the Council on Environmental Quality regulations implementing the procedural provisions of NEPA regulations (40 CFR Part 1500 et seq.), and the Department's own NEPA regulations (10 CFR Part 1021); • Executive Order 12291 (46 FR 13193, February 19,1981) which pertains to agency review of the impact of Federal regulations; • Executive Order 12630 (53 FR 8859, March 18, 1988) which pertains to agency consideration of Federal actions that interfere with constitutionally protected property rights; • Executive Order 12612 (52 FR 41685, October 30,1987) which pertains to agency consideration of federal actions that would have a substantial direct effect on States, on the relationship between the National Government and the States, and on the distribution of power and responsibilities among the various levels of government; and • The Regulatory Flexibility Act (5 U.S.C. 601 et. seq.) which requires, in part, that an agency prepare an initial regulatory flexibility analysis for any proposed rule unless it determines that the rule will not have a "significant economic impact on a substantial number of small entities." In the event that such an analysis is not required for a particular rule, the agency must publish a certification and explanation
of that determination in the Federal Register.



### a. Environmental Review

DOE prepared-an Environmental Assessment (EA) on the proposed standards pursuant to the National. Environmental Policy Act of 1969, as amended, Pub. L. 91-190,40 U.S.C. 4221 et seq., and the implementing regulations of the Council on Environmental Quality (40 CFR Parts 1500 through 1808). The EA addresses the possible incremental environmental effects attributable to the application of the proposed standards to the design of three types of covered products: dishwashers, clothes washers, and clothes dryers. A Finding of No Significant Impact (FONSI) is published in today's Federal Register. The FONSI concludes that the proposed standards would result in no significant environmental impacts and that an environmental impact statement is not required. The EA is part of the Technical Support Document and is available at the DOE Freedom of Information Reading Room at the address provided at the beginning of this notice.

b. Regulatory Impact Review

Executive Order 12291 (46 FR 13193, February 19, 1981) directs that, in proposing a major rule,' 4. an agency perform a regulatory analysis. Such an analysis presents major alternatives to the regulation that could substantially achieve the same regulatory goal at lower cost, as well as a description of the costs and benefits (including potential net benefits) of the proposed
rule.
DOE has determined that this proposed rule is a "major rule." Accordingly, a Draft Regulatory Impact Review has been prepared. The Regulatory Analysis is summarized below. This summary focuses on the major alternatives considered in arriving at the proposed approach to improving the energy efficiency of consumer products. The

" "Major rule" means any regulation that is likely to result in. (1) An annual effect on the economy of $100 million or more: (2) A major -
increase in costs or prices for consumers, individual industries, Federal, State, or focal government agencies , or geographic regions; or (3) Significant
adverse effects on competition , employment,
investment , productivity, innovation , or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.

### 32762 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

reader is referred to the complete draft "Regulatory Impact Analysis," which is contained in the Technical Support Document, available as indicated at the beginning of this notice. It consists of: (1) A statement of the problem addressed by this regulation, and the mandate for government action; (2) a description and analysis of the feasible policy alternatives to this regulation; (3) a quantitative comparison of the impacts of the alternatives; and (4) the economic impact of the proposed
standard. It should be noted at the outset that
none of the alternatives that were examined for these three products saved as much energy as the proposed rule. Also, most of the alternatives would require that enabling legislation be enacted, since authority to carry out those alternatives does not presently
exist.

Alternatives for Achieving Consumer Product Energy Conservation
Six major alternatives were identified by DOE as representing feasible policy alternatives for achieving consumer product energy efficiency. These alternatives include: • No New Regulatory Action • Informational Action -Product labeling -Consumer education • Prescriptive Standards • Financial Incentives

-Tax credits -Rebates • Voluntary Energy Efficiency Targets • The Proposed Approach 

### (Performance Standards)
Each alternative has been evaluated in terms of its ability to achieve significant energy savings at reasonable costs, and has been compared to the effectiveness of the proposed regulation. If no new regulatory action were taken, then no new standards would be implemented for dishwashers, clothes washers, and clothes dryers. This is essentially the "base case" for each appliance. In this case, between the years 1993 and 2015 there would be expected energy use of 40.54 Quads of primary energy, with no energy savings and a zero net present value. Several alternatives to the base case can be grouped under the heading of informational action. They include consumer product labeling and DOE's public education and information program. Both of these alternatives are mandated by the Act. One base case alternative would be to estimate the energy conservation potential of enhancing these programs. To model this possibility, the Department assumed that market discount rates would be lowered by five percent for purchasers of these three products. This resulted in energy savings equal to 2.32 Quads, with expected consumption equal to 38.22 Quads. The net present value is estimated to be $3.05 billion. Another method of setting standards would entail requiring that certain design options be used on each product, i.e., prescriptive standards. For these three products, this involved assuming level 1 standards, i.e., improved food filters for dishwashers, elimination of warm rinse options for clothes washers, and temperature termination for clothes dryers. This resulted in energy consumption, between 1993 and 2015, of 38.95 Quads, and savings of 1.59 Quads. The net present value, in 1987 dollars, was $3.02 billion. Various financial incentive alternatives were tested. These included tax credits and rebates to consumers, as well as tax credits to manufacturers.
The tax credits to consumers were assumed to be 15 percent of the increased cost of higher energy efficiency features of these appliances, while the rebates were assumed to be 15 percent of the increase in equipment prices. The tax credits to consumers showed a sizable change from the base

case, i.e., this alternative would save 2.30 Quads with a net present value of $3.22 billion. Consumer rebates also showed sizable changes; they would save 2.29 Quads with a net present value of $3.42 billion. Another financial incentive that was considered was tax credits to manufacturers for the production of energy-efficient dishwashers, clothes washers, and clothes dryers. In this scenario, an investment tax credit (ITC) of 20 percent was assumed. The tax credits to manufacturers had almost no effect, since the energy consumption estimates are 39.99 Quads with savings equal to .55 Quad, and a net present value equal to $52 million. The impact of this scenario is so small because the ITC was applicable only to the tooling and machinery costs of the firms, i.e., the firms' fixed costs, and most of the design improvements that would likely be adopted to manufacture more efficient versions of these products would involve purchased parts. Expenses for purchased parts would not be eligible for an ITC. Two scenarios of voluntary energy efficiency targets were examined; in the first one, the proposed energy conservation standards were assumed to be voluntarily adopted by all the relevant manufacturers in five years, and, in the second scenario, the proposed standards were assumed to be adopted in 10 years. In these scenarios. the five year delay would result in energy consumption by these appliances of 39.19 Quads, energy savings of 1.35 Quads, and a net present value of $2.22 billion; the 10 year delay would result in 40.04 Quads of energy being consumed, .50 Quad being saved, and a net present value of $940 million. 

### These scenarios assume that there would be universal voluntary adoption of the energy conservation standards by these appliance manufacturers, an assumption for which there is no reasonable assurance. Lastly, all of these alternatives must be gauged against the performance standards that are being proposed in this notice. Such performance standards would result in energy consumption of dishwashers, clothes washers, and clothes dryers to total an estimated 38.07 Quads of primary energy over the 1993-2015 time period. Savings would be 2.47 Quads, and the net present value would be an expected $4.83 billion. 

### As noted at the beginning of this section, none of the alternatives that were considered for these products would save as much energy as the proposed rule.

c, "Takings"Assessment Review

Executive Order 12630 (53 FR 8859. March 18, 1988) directs that, in proposing a regulation, an agency conduct a "takings" review. Such a review is intended to assist agencies in. avoiding unnecessary takings and help such agencies account for those takings that are necessitated by statutory
mandate. For purposes of the Order: "Policies that have takings implications" refers to Federal regulations, proposed Federal regulations, proposed Federal legislation, comments on proposed Federal legislation, or other Federal policy statements that, if implemented or enacted, could effect a taking, such as rules and regulations that propose or implement licensing, permitting, or other condition requirements or limitations on private property use, or that require
dedications or exactions from owners of private property.
It appears that there are three parts of the appliance standards program that conceivably could be viewed as having "takings implications." These are testing and certification requirements, the impacts of standard levels, and possible DOE testing of products for validation. With regard to the first.part, namely, testing and certification, the Department believes that such a requirement, implementing a long-established statutory mandate in a manner calculated to minimize adverse

### Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

economic impacts, does not constitute a "taking" of private property. 

### Similarly, the Department's possible validation testing does not constitute a "taking," within the limitations described above. Lastly, the impact of standards could be viewed by some as a "taking."
Nevertheless

, the Department believes that the fact that while an energy conservation standard may limit some manufacturers in the range of appliance efficiencies that they can produce, such narrowing of the energy efficiency range does not constitute a "taking" in the sense described above. In short, in none of the three parts of the appliance standards program does the Department believe that the provisions of &0

. 12630 pertain.



### d. Federalism Review
Executive Order 12612 (52 FR 41685, October 30, 1987) requires that regulations or rules be reviewed for any substantial direct effects on States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among various levels of government

. If there are sufficient substantial direct effects, then Executive Order 12612 requires preparation of a federalism assessment to be used in all decisions involved in promulgating and implementing a regulation or a rule. The Department believes that today's regulation

, when finalized

, would not have a substantial direct effect on State governments

. Firstly, State regulations that may have existed on these three products were preempted by the Federal standards established in NAECA; secondly, States could have petitioned the Department for exemption from such preemption

, and none has done that; lastly, today's regulation, when finalized

, amends (or, in one case reaffirms) the Federal standards from
NAECA.
e. Regulatory.FlexibilityReview
The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires an assessment of the impact of proposed regulations on small businesses

. Small businesses are defined as those firms within an industry that are privately owned and less dominant in the market. In this rulemaking, three different products and, hence, industries, are being addressed. Regulatory flexibility issues will be discussed for the dishwasher, clothes washer, and clothes dryer industries for which standards are being proposed. First, the energy conservation
standard of an improved food filter on those dishwasher manufacturers, who 

### could be considered small businesses, will-he discussed. -Dishwasher manufacturing firms may be divided into two groups: those that compete on large sales

-volume products and those that compete in small, 

### specialized markets. Small firms are generally forced to specialize in small market niches that o f

fer some protection from the cost advantage that large firms hold when they can produce in volume. This effect can even be observed among the major producers in the tendency of the smaller major producers to produce somewhat more specialized products. There are significant differences among the major firms. As learned from discussions with industry consultants, average cost decreases with firm size. Thus, the industry has economies of scale, and large firms (to the extent that
their facilities are up-to -date) have lower average costs than small firms. This fact, coupled with increasing competitiveness of the national and international markets, probably accounts for the continuing consolidation that has been occurring for several decades. The fact that the consolidation has been producing larger firms strongly corroborates the finding that large firms have a cost advantage. A principal implication of consolidation is that the smaller of the major firms will be, on average

, in more danger of failing or being bought out than will the large firms

. Because of the greater precariousness of smaller firms, any decrease in average profitability is more likely to damage seriously a smaller firm, and an increase in average profitability is more likely to mean the difference between success and failure for a smaller firm. From the point of view of competitiveness

, a decrease in average profitability could speed up the process of consolidation

, producing a less competitive industry

, while an increase in average profitability could help maintain the current levels of competition. Either effect might well be temporary

, because, in the long-run, the number of firms should be determined by the industry's cost structure and by the way a single firm's elasticity of demand relates to the number of competing firms. Although larger firms have a cost advantage due to economies of scale, the very small firms in the dishwasher manufacturing industry have found market niches in which to survive profitably. The small firms sell dishwashers primarily to the replacement and kitchen remodel markets, which tend to offer higher profit margins than does the builder market. As a result, it is possible, 

### 32763

according to industry consultants, that small firms would have an easier time passing through increased variable costs that result from the proposed standard, and thus may be affected more positively than the large firms. Therefore, the fact that this energy
conservation standard on dishwashers is not likely to "have a significant economic impact on a substantial number of small entities " suggests that the provisions of section 605.(b) of the Regulatory Flexibility Act pertain. These provisions state that neither an initial nor a final regulatory flexibility analysis need be performed for a proposed or final rule "if the head of the agency certifies that the rule will not, if promulgated

, have a significant economic impact on a substantial number of small entities." Secondly

, the proposed energy conservation standards on clothes washer manufacturers needs to be addressed. The proposed standard is an efficiency level that was achieved by the elimination of a warm rinse option.
For those manufacturers who choose to meet the standard by eliminating that option, there will be essentially a zero cost increase resulting from the
standard. Consequently

, since this standard may have no effect on any manufacturer

, large or small, the Department believes that in this industry

, too, the provisions of section 605.(b) of the Regulatory Flexibility Act pertain. Lastly, the proposed energy conservation standards on electric clothes dryer manufacturers need to be
addressed

. It is not at all clear that the prescriptive standard levels being proposed will "have a significant economic impact on a substantial number of small entities." The LBL-MIM indicates, through its prediction on an increase in typical ROE, that the proposed standards are likely to slow down the consolidation process temporarily

. This would lead to a temporary slowing down of the continuing decrease in this industry's competitiveness. However, this prediction would be tempered by the observation that if standards were technologically difficult to meet they could hurt some smaller firms the most, since smaller firms tend to have less sophisticated research and development capabilities

. This should not be a serious consideration for regulatory flexibility

, since the proposed standard levels on clothes dryers will not be technologically difficult to meet.
Therefore

, since the prescriptive standards that are being proposed are expected to increase the clothes dryer

### 32764 Federal Register / Vol. 54, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

manufacturers' ROE, and slow down the industry-'s consolidation, the Department believes that section 605.(b) of the Regulatory Flexibility Act pertains here, also. Thus, for each of these three industries, the Department is concluding that the proposed standard level will not "have a significant economic impact on
a substantial number of small entities," and that preparation of neither an initial nor a final regulatory flexibility analysis need be performed. DOE welcomes comments on this conclusion.

V. Public Comment Procedures

a. Participation in Rulemaking.
DOE encourages the maximum level of public participation possible in this rulemaking. Individual consumers, representatives of consumer groups, manufacturers, associations , States or other governmental entities, utilities, retailers, distributors, manufacturers, and others are urged to submit written statements on the proposal. The Department also encourages interested persons to participate in the public hearing to be, held in Washington, DC, at the time and place indicated at the beginning of this notice. The DOE has established a comment period of 60 days following publication of this notice for persons to comment on this proposal. All public comments received and the transcript of the public hearing will be available for review in the DOE Freedom of Information Reading Room.

b. Written Comment Procedures
Interested persons are invited to participate in this proceeding by submitting written data

, views or arguments with respect to the subjects set forth in this notice. Instructions for submitting written comments are set forth at the beginning of this notice and below, Comments should be labeled both on the envelope and on the documents, "Three Products Rulemaking (Docket No. CE-RM-.88-101)," and must be received by the date specified at the beginning of this notice

. Ten copies are requested to be submitted. All comments received by the date specified at the beginning of this notice and other relevant information will be considered by DOE before final action is taken on the proposed regulation. All written comments received on the proposed rule will be available for public inspection at the Freedom of Information Reading Room, as provided at the beginning of this notice.
Pursuant to the provisions of 10 CFR 1004.11, any person submitting information or data that is believed to be confidential and exempt by law from public disclosure should submit one complete copy of the document and 10 copies, if possible, from which the
information believed to be confidential
has been deleted. DOE will make its own determination with regard to the
confidential status of the information or data and treat it according to its
determination. Factors of interest to DOE, when evaluating requests to treat information as confidential include: (1) A description of the item; (2) an indication as to whether and why such items of information have been treated by the submitting party as confidential, and whether and why such items are customarily treated as confidential, and whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known or available from other sources; (4) whether the information has previously
been available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person that would result from public disclosure; (6)
an indication as to when such information might lose its confidential character due to the passage of time; and (7) whether disclosure of the information would be in the public interest.

c. Public Hearing

1. Procedure for Submitting Requests to Speak. The time and place of the public hearing are indicated at the beginning of this notice. DOE invites any person who has an interest in these proceedings

, or who is a representative of a group or class of persons having an interest

, to make a written request for an opportunity to make an oral presentation at the public hearing. Such requests should be labeled both on the letter and the envelope, "Three Products Rulemaking (Docket No. CE-RM-88- 101)," and should be sent to the address, and must be received by the time specified

, at the beginning of this notice. Requests may be hand-delivered or telephoned in to such address between the hours of 8:30 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. The person making.the request should briefly describe the interest concerned and, if appropriate

, state why he or she is a proper representative of the group or class of persons that has such an interest

, and give a telephone number where he or she may be contacted. Each person selected to be heard will be so 

### notified by DOE as to the time they will be speaking. Each person selected to be heard is requested to submit 10 copies of the statement at the beginning of the hearing. In the evert any persons wishing to testify cannot meet this requirement

, that person may make alternative arrangements with the Office of Hearings and Dockets in advance by so indicating in the letter requesting to make an oral presentation.
2. Conduct of Hearing. DOE reserves the right to select the persons to be
heard at the hearing, to schedule the respective presentations, and to establish the procedures governing the conduct of the hearing

. The length of each presentation is limited to 20 minutes.
A DOE official will be designated to preside at the hearing

. The hearing will not be a judicial or an evidentiary-type hearing, but will be conducted in
accordance with 5 U.S.C. 533 and section 336 of the Act. At the conclusion of all initial oral statements at each day of the hearing

, each person who has made an oral statement will be given the opportunity to make a rebuttal statement, subject to time limitations.
The rebuttal statement will be given in the order in which the initial statements
were made

. The official conducting the hearing will accept additional comments or questions from those attending, as time permits

. Any interested person may submit, to the presiding official, written questions to be asked of any person making a statement at the hearing. The presiding official will determine whether the question is relevant

, and whether time limitations permit it to be presented for answer. Further questioning of speakers will be permitted by DOE. The presiding official will afford any interested person an opportunity to question

, with respect to disputed issues of material fact, other interested persons who made oral presentations

, as well as employees of the United States Government who have made written or oral presentations, relating to the proposed rule. This opportunity will be afforded after any
rebuttal statements

, to the extent that the presiding official determines that such questioning is likely to result in a more timely and'effective resolution of disputed issues of material fact. If the time provided is insufficient or inconvenient

, DOE will consider affording an additional opportunity for questioning at a mutually convenient time. Persons interested in making use of this opportunity must submit their request to the presiding official no later than shortly after the completion of any

### Federal Register / Vol. 5, No. 152 / Wednesday, August 9, 1989 / Proposed Rules

rebuttal statements and be prepared to state specific justification, including why the issue is one of disputed fact and how the proposed questions would expedite their resolution. Any further procedural rules regarding proper conduct of the hearing will be announced by the presiding official. A transcript of the hearing will be made, and the entire record of this rulemaking, including the transcript, will be retained by DOE and made available for inspection at the DOE Freedom of Information Reading Room as provided at the beginning of this notice. Any person may purchase a copy of the transcript from the transcribing reporter.

d. Issues Requested for Cowmen t
As discussed above in today's notice, DOE has identified a number of issues where comments are requested. These issues include, but are not limited to the following: • The baseline units and the base

cases; • Market share elasticities; • Usage elasticities; 

### or changes' in usage of features such as no-heat dry options on dishwashers. In consideration of the foregoing, it is proposed to amend Part 430 of Chapter II of Title 10, Code of Federal Regulations, as set forth below.

Issued in Washington, DC, July 13, 1989.
John R. Berg, Assistant Secretary, Conservation and Renewable Energy.

List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Energy conservation, Household appliances. Product class

PART 430- EMERGY CONSERVATION
PROGRAM FOR CONSUMER
PRODUCTS

The authority citation for Part 430
continues to read as follows:

Authority: Energy Policy and Conservation Act, Title III, Part B, as amended by National Energy Conservation Policy Act, Title IV, Part 2, National Appliance Energy Conservation Act of 1987, and National Appliance Energy Conservation Amendments of 1988 (42 U.S.C. • Appropriate discount rates, 6291-6309). including. those for consumer analyses * * * * 

### (LCC and LBL-REM) and the use of a 2. Section 430.32 is amended by social discount rate (LBL-REM); revising paragraphs (f), (g), and (h) to • Energy price forecasts; • Th h i f l 

### read as follows:

e c aracter zation o prototypica firms for the manufacturer impact § 430.32 Energy conservation standards. analysis (LBL-MIM); The energy conservation standards • Efficiency forecasts for these three for the covered product classes are: products; * * * * • Any lessening of product utility, (f) Dishwashers. especially with respect to the elimination of warm water rinse in clothes washers; Product class Energy factor (loads/ kWh) effective January 

### • The effects on forecasts due to the 1,1993 use of national average energy prices and usage rates; 1. Compact Dishwasher 0.58.
• The effects of standards on (11 SV). 2. Standard Dishwasher 0.41. manufacturer's incentives to develop (115V). 

### innovative products and product 3. Water Heating Must be equipped with features; and Dishwasher, Compact option to dry without • Any uncertainties in modeling (116'.'). heat. especially product usage, e.g., changes 4. Water Heating Dishwasher, Standard 0.44. 

### in usage rates as shown by survey data (115V). 5. Water Heating Dishwasher

, Compact (220V). 6. Water Heating Dishwasher

, Standard (220V). 

### 32765

Energy factor (loads! kWh) effective January 1, 1983

Must be equipped with option to d ry without heat. Must be equipped with option to dry without heat.

(g) Clothes washers.

Product class Energy factor (cu. ft./ kWh/cycle) effective January 1, 1993

1. Top Loading, Compact (1.6 ft.' capacity or less). 2. Top Loading, Standard (1.61 to 2.74 ft.3 capacity or greater). 3. Top Loading, Large (2.75 ft.3 capacity or greater).4. Top Loading, SemiAutomatic. 5. Front Loading .................

6. Suds Saver ..................... Must have an unheated rinse option to 1.02 cu. ft./kWh/cycle.
Must have an unheated rinse option to 1.32 cu. ft./kWh/cycle.

Must have an unheated rinse option to 1.21 cu. ft./kWh/cycle.
Must have an unheated rinse option. Must have an unheated rinse option. Must have an unheated rinse option.

(h) Clothes dryers.

Product class

1. Electric, Standard

.......

2. Electric, Compact (120V). 3. Electric, Compact (240V). 4. Electric Heat Pump [Reserved]. 5. Gas, Standard ............

........... 6. Gas, Compact.. Requirement-January 1, 1993

Shall have moisture or temperature termination. Shall have moisture or temperature termination. Shall have moisture or temperature termination.

Shall have moisture or temperature termination.
Shall have moisture or temperature termination.

[FR Doc. 89-18537 Filed 8.8•-89; 8:45 am]

BILLING CODE 5450-O1-M