84028 Federal Register / Vol. 89, No. 202 / Friday, October 18, 2024 / Rules and Regulations 

1All references to EPCA in this document refer 

to the statute as amended through the Energy Act 

of 2020, Public Law 116–260 (Dec. 27, 2020), which 

reflects the last statutory amendments that impact 

Parts A and A–1 of EPCA. 

DEPARTMENT OF ENERGY 

10 CFR Part 430 

[EERE–2021–BT–STD–0031] 

RIN 1904–AF19 

Energy Conservation Program: Energy 

Conservation Standards for Oil, 

Electric, and Weatherized Gas 

Consumer Furnaces 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final determination. 

SUMMARY: The Energy Policy and 

Conservation Act, as amended 

(‘‘EPCA’’), prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including non-weatherized oil-fired 

furnaces (‘‘NWOFs’’), mobile home oilfired furnaces (‘‘MHOFs’’), weatherized 

gas furnaces (‘‘WGFs’’), weatherized oilfired furnaces (‘‘WOFs’’), and electric 

furnaces (‘‘EFs’’). EPCA also requires the 

U.S. Department of Energy (‘‘DOE’’) to 

periodically review its existing 

standards to determine whether morestringent, amended standards would be 

technologically feasible and 

economically justified, and would result 

in significant energy savings. In this 

final determination, DOE has 

determined that the energy conservation 

standards for EFs, NWOFs, MHOFs, 

WOFs, and WGFs do not need to be 

amended. 

DATES: The effective date of this final 

determination is November 18, 2024. 

ADDRESSES: The docket for this activity, 

which includes Federal Register 

notices, public meeting attendee lists 

and transcripts, comments, and other 

supporting documents/materials, is 

available for review at 

www.regulations.gov. All documents in 

the docket are listed in the 

www.regulations.gov index. However, 

not all documents listed in the index 

may be publicly available, such as 

information that is exempt from public 

disclosure. 

The docket web page can be found at 

www.regulations.gov/docket/EERE2021-BT-STD-0031. The docket web 

page contains instructions on how to 

access all documents, including public 

comments, in the docket. 

FOR FURTHER INFORMATION CONTACT: 

Ms. Julia Hegarty, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Office, EE–5B, 1000 

Independence Avenue SW, Washington, 

DC 20585–0121. Telephone: (240) 597– 

6737. Email: ApplianceStandards 

Questions@ee.doe.gov. 

Mr. Eric Stas, U.S. Department of 

Energy, Office of the General Counsel, 

GC–33, 1000 Independence Avenue SW, 

Washington, DC 20585–0121. 

Telephone: (202) 586–4798. Email: 

Eric.Stas@hq.doe.gov. 

For further information on how to 

review the docket, contact the 

Appliance and Equipment Standards 

Program staff at (202) 287–1445 or by 

email: ApplianceStandardsQuestions@

ee.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Synopsis of the Final Determination 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. Current Rulemaking History 

III. General Discussion and Rationale 

A. General Comments 

1. Comments Supporting Proposed 

Determination 

2. Comments Opposing Proposed 

Determination 

3. Other Topics 

B. Scope of Coverage and Product Classes 

C. Test Procedure 

D. Standby Mode and Off Mode 

E. Technological Feasibility 

1. General Considerations 

2. Maximum Technologically Feasible 

Levels 

F. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

G. Cost-Effectiveness 

H. Further Considerations 

1. Economic Impact on Manufacturers and 

Consumers 

2. Savings in Operating Costs Compared To 

Increase in Price 

3. Energy Savings 

4. Lessening of Utility or Performance of 

Products 

5. Impact of Any Lessening of Competition 

6. Need for National Energy Conservation 

7. Other Factors 

IV. Methodology and Discussion of Related 

Comments 

A. Market and Technology Assessment 

1. Scope of Coverage 

a. Electric Furnaces 

b. Weatherized Oil-Fired Furnaces 

2. Product Classes 

3. Technology Options 

4. Screening Analysis 

a. Screened-Out Technologies 

b. Remaining Technologies 

5. Impact From Other Rulemakings 

B. Engineering and Cost Analysis 

1. Efficiency Analysis 

a. Baseline Efficiency 

b. Intermediate Efficiency Levels 

c. Maximum Technology (‘‘Max-Tech’’) 

Efficiency Levels 

d. Summary of Efficiency Levels Analyzed 

2. Cost Analysis 

a. Teardown Analysis 

b. Cost Estimation Method 

3. Cost-Efficiency Results 

C. Markups Analysis 

D. Energy Use Analysis 

E. Life-Cycle Cost and Payback Period 

Analysis 

1. Product Cost 

2. Installation Cost 

3. Annual Energy Consumption 

4. Energy Prices 

5. Maintenance and Repair Costs 

6. Product Lifetime 

7. Discount Rates 

8. Energy Efficiency Distribution in the NoNew-Standards Case 

9. Payback Period Analysis 

F. Shipments Analysis 

G. National Impact Analysis 

1. Product Efficiency Trends 

2. National Energy Savings 

3. Net Present Value Analysis 

V. Analytical Results and Conclusions 

A. Economic Impacts on Individual 

Consumers 

B. National Impact Analysis 

1. National Energy Savings 

2. Net Present Value of Consumer Costs 

and Benefits 

C. Final Determination 

1. Technological Feasibility 

2. Cost-Effectiveness 

3. Significant Conservation of Energy 

4. Further Considerations 

a. Oil Furnaces 

b. Weatherized Gas Furnaces 

5. Summary 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866, 

13563, and 14094 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act of 1995 

D. Review Under the National 

Environmental Policy Act of 1969 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under Executive Order 12630 

J. Review Under the Treasury and General 

Government Appropriations Act, 2001 

K. Review Under Executive Order 13211 

L. Review Under the Information Quality 

Bulletin for Peer Review 

M. Congressional Notification 

VII. Approval of the Office of the Secretary 

I. Synopsis of the Final Determination 

The Energy Policy and Conservation 

Act, Public Law 94–163, as amended 

(‘‘EPCA’’),1 authorizes DOE to regulate 

the energy efficiency of a number of 

consumer products and certain 

industrial equipment. (42 U.S.C. 6291– 

6317, as codified) Title III, Part B of 


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2For editorial reasons, upon codification in the 

U.S. Code, Part B was redesignated Part A. 

3As noted previously, for editorial reasons, upon 

codification in the U.S. Code, Part B was 

redesignated Part A. 

EPCA 2 established the Energy 

Conservation Program for Consumer 

Products Other Than Automobiles. (42 

U.S.C. 6291–6309) These products 

include oil, electric, and weatherized 

gas consumer furnaces, the subject of 

this final determination. (42 U.S.C. 

6292(a)(5)) 

Pursuant to EPCA, DOE is required to 

review its existing energy conservation 

standards for covered consumer 

products no later than six years after 

issuance of any final rule establishing or 

amending a standard. (42 U.S.C. 

6295(m)(1)) Pursuant to that statutory 

provision, DOE must publish either a 

notification of determination that 

standards for the product do not need to 

be amended, or a notice of proposed 

rulemaking (‘‘NOPR’’) including new 

proposed energy conservation standards 

(proceeding to a final rule, as 

appropriate). (Id.) DOE has conducted 

this review of the energy conservation 

standards for oil, electric, and 

weatherized gas consumer furnaces 

under EPCA’s six-year-lookback 

authority described herein. 

For this final determination, DOE 

analyzed oil, electric, and weatherized 

gas consumer furnaces subject to energy 

conservation standards specified in the 

Code of Federal Regulations (‘‘CFR’’) at 

10 CFR 430.32(e)(1). DOE first analyzed 

the technological feasibility of more 

energy-efficient oil, electric, and 

weatherized gas furnaces and 

determined that amended standards for 

electric furnaces are not technologically 

feasible. For those oil and weatherized 

gas furnaces for which DOE determined 

higher standards to be technologically 

feasible, DOE evaluated whether higher 

standards would be cost-effective by 

conducting life-cycle cost (‘‘LCC’’) and 

payback period (‘‘PBP’’) analyses. In 

addition, DOE estimated energy savings 

that would result from potential energy 

conservation standards by conducting a 

national impacts analysis (‘‘NIA’’), in 

which it estimated the net present value 

(‘‘NPV’’) of the total costs and benefits 

experienced by consumers. 

Based on the results of the analyses, 

summarized in section V of this 

document, DOE has determined that the 

current standards for oil, electric, and 

weatherized gas furnaces do not need to 

be amended and is issuing this final 

determination accordingly. 

II. Introduction 

The following sections briefly discuss 

the statutory authority underlying this 

final determination, as well as some of 

the historical background relevant to the 

establishment of energy conservation 

standards for oil, electric, and 

weatherized gas furnaces. 

A. Authority 

Among other things, EPCA authorizes 

DOE to regulate the energy efficiency of 

a number of consumer products and 

certain industrial equipment. (42 U.S.C. 

6291–6317, as codified) Title III, Part B 

of EPCA 3 established the Energy 

Conservation Program for Consumer 

Products Other Than Automobiles. 

These products include consumer 

furnaces, the subject of this document. 

(42 U.S.C. 6292(a)(5)) 

The energy conservation program 

under EPCA consists essentially of four 

parts: (1) testing, (2) labeling, (3) the 

establishment of Federal energy 

conservation standards, and (4) 

certification and enforcement 

procedures. Relevant provisions of 

EPCA specifically include definitions 

(42 U.S.C. 6291), test procedures (42 

U.S.C. 6293), labeling provisions (42 

U.S.C. 6294), energy conservation 

standards (42 U.S.C. 6295), and the 

authority to require information and 

reports from manufacturers (42 U.S.C. 

6296). 

Federal energy efficiency 

requirements for covered products 

established under EPCA generally 

supersede State laws and regulations 

concerning energy conservation testing, 

labeling, and standards. (42 U.S.C. 

6297(a)–(c)) DOE may, however, grant 

waivers of Federal preemption in 

limited circumstances for particular 

State laws or regulations, in accordance 

with the procedures and other 

provisions set forth under EPCA. (42 

U.S.C. 6297(d)) 

Subject to certain criteria and 

conditions, DOE is required to develop 

test procedures to measure the energy 

efficiency, energy use, or estimated 

annual operating cost of each covered 

product. (42 U.S.C. 6295(o)(3)(A) and 42 

U.S.C. 6295(r)) Manufacturers of 

covered products must use the 

prescribed DOE test procedure as the 

basis for certifying to DOE that their 

product complies with the applicable 

energy conservation standards and as 

the basis for any representations 

regarding the energy use or energy 

efficiency of the product. (42 U.S.C. 

6293(c) and 42 U.S.C. 6295(s)) 

Similarly, DOE must use these test 

procedures to evaluate whether a basic 

model complies with the applicable 

energy conservation standard(s). (42 

U.S.C. 6295(s)) The DOE test procedures 

for consumer furnaces appear at title 10 

of the Code of Federal Regulations 

(‘‘CFR’’) part 430, subpart B, appendix 

N. 

EPCA prescribed energy conservation 

standards for consumer furnaces (42 

U.S.C. 6295(f)(1)–(2)) and directed DOE 

to conduct future rulemakings to 

determine whether to amend these 

standards. (42 U.S.C. 6295(f)(4) and 42 

U.S.C. 6295(m)(1)) As explained in 

section II.B of this document, DOE has 

completed its rulemaking obligations 

pursuant to EPCA under 42 U.S.C. 

6295(f)(4) for the subject consumer 

furnaces. However, DOE has ongoing 

rulemaking obligations under 42 U.S.C. 

6295(m)(1) (i.e., the six-year-lookback 

review requirement). More specifically, 

and as noted previously, not later than 

six years after the issuance of any final 

rule establishing or amending a 

standard, DOE must publish either a 

notice of proposed determination 

(‘‘NOPD’’) that standards for the product 

do not need to be amended, or a NOPR 

including new proposed energy 

conservation standards (proceeding to a 

final rule, as appropriate). (42 U.S.C. 

6295(m)(1) and (3)) DOE must make the 

analysis on which a NOPD or NOPR is 

based publicly available and provide an 

opportunity for written comment. (42 

U.S.C. 6295(m)(2)) 

A determination that amended 

standards are not needed must be based 

on consideration of whether amended 

standards will result in significant 

conservation of energy, are 

technologically feasible, and are costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) Additionally, any 

new or amended energy conservation 

standard prescribed by the Secretary for 

any type (or class) of covered product 

shall be designed to achieve the 

maximum improvement in energy 

efficiency which the Secretary 

determines is technologically feasible 

and economically justified. (42 U.S.C. 

6295(o)(2)(A)) Among the factors DOE 

considers in evaluating whether a 

proposed standard level is economically 

justified includes whether the proposed 

standard at that level is cost-effective, as 

defined under 42 U.S.C. 

6295(o)(2)(B)(i)(II). Under 42 U.S.C. 

6295(o)(2)(B)(i)(II), an evaluation of 

cost-effectiveness requires DOE to 

consider savings in operating costs 

throughout the estimated average life of 

the covered products in the type (or 

class) compared to any increase in the 

price, initial charges, or maintenance 

expenses for the covered products that 

are likely to result from the standard. 

(42 U.S.C. 6295(n)(2) and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) 


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4This rulemaking was undertaken pursuant to the 

voluntary remand in State of New York, et al. v. 

Department of Energy, et al., 08–311–ag(L); 08–312– 

ag(con) (2d Cir. filed Jan. 17, 2008). 

5 DOE confirmed the standards and compliance 

dates promulgated in the June 2011 DFR in a notice 

of effective date and compliance dates published in 

the Federal Register on October 31, 2011 (‘‘October 

2011 notice’’). 76 FR 67037. After publication of the 

October 2011 notice, the American Public Gas 

Association (‘‘APGA’’) sued DOE to invalidate the 

rule as it pertained to NWGFs and MHGFs. Petition 

for Review, American Public Gas Association, et al. 

v. Department of Energy, et al., No. 11–1485 (D.C. 

Cir. filed Dec. 23, 2011). On April 24, 2014, the 

Court granted a motion that approved a settlement 

agreement that was reached between DOE, APGA, 

and the various intervenors in the case, in which 

DOE agreed to a remand of the NWGF and MHGF 

portions of the June 2011 DFR in order to conduct 

further notice-and-comment rulemaking. 

Accordingly, the Court’s order vacated the June 

2011 DFR in part (i.e., those portions relating to 

NWGFs and MHGFs) and remanded to the agency 

for further rulemaking. DOE addressed NWGFs and 

MHGFs in a separate rulemaking proceeding (see 

Docket No. EERE–2014–BT–STD–0031). DOE 

published a final rule in the Federal Register on 

December 18, 2023 amending the energy 

conservation standards for NWGFs and MHGFs. 88 

FR 87502. 

Finally, pursuant to the amendments 

to EPCA contained in the Energy 

Independence and Security Act of 2007 

(‘‘EISA 2007’’), Public Law 110–140, 

any final rule for new or amended 

energy conservation standards 

promulgated after July 1, 2010, is 

required to address standby mode and 

off mode energy use. (42 U.S.C. 

6295(gg)(3)) Specifically, when DOE 

adopts a standard for a covered product 

after that date, it must, if justified by the 

criteria for adoption of standards under 

EPCA (42 U.S.C. 6295(o)), incorporate 

standby mode and off mode energy use 

into a single standard, or, if that is not 

feasible, adopt a separate standard for 

such energy use for that product. (42 

U.S.C. 6295(gg)(3)(A)–(B)) DOE’s current 

test procedures and standards for oil, 

electric, and weatherized gas furnaces 

address standby mode and off mode 

energy use. DOE’s energy conservation 

standards address standby mode and off 

mode energy use only for nonweatherized oil-fired furnaces 

(‘‘NWOFs’’) (including mobile home 

furnaces) and electric furnaces (‘‘EFs’’). 

10 CFR 430.32(e)(1)(iv). In this analysis, 

DOE considers such energy use in its 

determination of whether energy 

conservation standards need to be 

amended. 

DOE is publishing this final 

determination pursuant to the six-yearlookback review requirement in EPCA. 

B. Background 

1. Current Standards 

DOE most recently completed a 

review of the subject consumer furnace 

standards in a direct final rule (‘‘DFR’’) 

published in the Federal Register on 

June 27, 2011 (‘‘June 2011 DFR’’), 

through which DOE prescribed 

amended energy conservation standards 

for non-weatherized gas furnaces 

(‘‘NWGFs’’), mobile home gas furnaces 

(‘‘MHGFs’’), weatherized gas furnaces 

(‘‘WGFs’’), non-weatherized oil-fired 

furnaces (‘‘NWOFs’’), mobile home oil 

furnaces (‘‘MHOFs’’), and weatherized 

oil furnaces (‘‘WOFs’’).4 76 FR 37408. 

The June 2011 DFR amended the 

existing energy conservation standards 

for NWGFs, MHGFs, and NWOFs 

(which are specified in terms of annual 

fuel utilization efficiency (‘‘AFUE’’)) 

and amended the compliance date (but 

left the existing standards in place) for 

WGFs. The June 2011 DFR also 

established electrical standby mode and 

off mode standards for NWGFs, MHGFs, 

NWOFs, MHOFs, and electric furnaces. 

As a result of a settlement agreement 

approved by the Court of Appeals for 

the District of Columbia (‘‘D.C.’’) 

Circuit, the standards established by the 

June 2011 DFR for NWGFs and MHGFs 

did not go into effect.5 However, the 

court order left in place the standards 

for WGFs, NWOFs, MHOFs, WOFs, and 

EFs, which are the subject of this final 

determination. These standards are set 

forth in DOE’s regulations at 10 CFR 

430.32(e)(1)(ii) and (e)(1)(iv) and are 

shown in Table II.1 and Table II.2. 

TABLE II.1—FEDERAL AFUE ENERGY CONSERVATION STANDARDS FOR OIL, ELECTRIC, AND WEATHERIZED GAS

FURNACES

Product class AFUE 

(percent) Compliance date 

Non-weatherized oil-fired furnaces (not including mobile home furnaces) ................................................. 83 May 1, 2013. 

Mobile home oil-fired furnaces .................................................................................................................... 75 September 1, 1990. 

Weatherized gas furnaces ........................................................................................................................... 81 January 1, 2015. 

Weatherized oil-fired furnaces ..................................................................................................................... 78 January 1, 1992. 

Electric furnaces .......................................................................................................................................... 78 January 1, 1992. 

TABLE II.2—FEDERAL STANDBY MODE AND OFF MODE ENERGY CONSERVATION STANDARDS FOR OIL AND ELECTRIC

FURNACES

Product class 

Maximum standby 

mode electrical 

power 

consumption, 

PW, SB

(watts) 

Maximum off 

mode electrical 

power 

consumption, 

PW, OFF

(watts) 

Compliance date 

Non-weatherized oil-fired furnaces (including mobile home furnaces) ........................ 11 11 May 1, 2013. 

Electric furnaces ........................................................................................................... 10 10 May 1, 2013. 

2. Current Rulemaking History 

Amendments to EPCA in the National 

Appliance Energy Conservation Act of 

1987 (‘‘NAECA’’; Pub. L. 100–12) 

established EPCA’s original energy 

conservation standards for furnaces, 

consisting of the minimum AFUE levels 

for mobile home furnaces and for all 

other furnaces except ‘‘small’’ gas 

furnaces. (42 U.S.C. 6295(f)(1)–(2)) The 

original standards established a 

minimum AFUE of 75 percent for 

mobile home furnaces and 78 percent 

for all other furnaces. Pursuant to 

authority conferred under 42 U.S.C. 

6295(f)(1)(B), DOE subsequently 

adopted a mandatory minimum AFUE 

level for ‘‘small’’ furnaces through a 

final rule published in the Federal 

Register on November 17, 1989 (‘‘the 


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6The November 2007 Final Rule adopted 

amended standards for ‘‘oil-fired furnaces’’ 

generally. However, on July 28, 2008, DOE 

published a technical amendment final rule in the 

Federal Register that clarified that the amended 

standards adopted in the November 2007 Final Rule 

for oil-fired furnaces did not apply to MHOFs and 

WOFs; rather, they were only applicable for 

NWOFs. 73 FR 43611, 43613 (July 28, 2008). 

7For NWGFs and MHGFs, the standards were 

amended to a level of 80-percent AFUE nationally 

with a more-stringent 90-percent AFUE requirement 

in the Northern Region. For NWOFs, the standard 

was amended to 83-percent AFUE nationally. 76 FR 

37408, 37410 (June 27, 2011). 

8 DOE divides consumer furnaces into seven 

classes for the purpose of setting energy 

conservation standards: (1) NWGFs, (2) MHGFs, (3) 

WGFs, (4) NWOFs, (5) MHOFs, (6) WOFs, and (7) 

EFs. 10 CFR 430.32(e)(1)(ii). As noted previously, 

DOE analyzed amended standards for NWGFs and 

Continued 

November 1989 Final Rule’’). 54 FR 

47916. The standards established by 

NAECA and the November 1989 Final 

Rule for ‘‘small’’ gas furnaces are still in 

effect for MHOFs, WOFs, and EFs. 

Pursuant to EPCA, DOE was required 

to conduct two rounds of rulemaking to 

consider amended energy conservation 

standards for all consumer furnaces, and 

an additional round of rulemaking for 

mobile home furnaces. (42 U.S.C. 

6295(f)(4)(A), (B), and (C)) In 

satisfaction of the first round of 

amended standards rulemaking under 

42 U.S.C. 6295(f)(4)(B), on November 

19, 2007, DOE published in the Federal 

Register a final rule (‘‘November 2007 

Final Rule’’) that revised the standards 

for most furnaces but left them in place 

for two product classes (i.e., MHOFs and 

WOFs).6 The standards amended in the 

November 2007 Final Rule were to 

apply to furnaces manufactured or 

imported on and after November 19, 

2015. 72 FR 65136 (Nov. 19, 2007). The 

energy conservation standards in the 

November 2007 Final Rule consist of a 

minimum AFUE level for each of the six 

classes of furnaces. Id. at 72 FR 65169. 

Based on the market analysis for the 

November 2007 Final Rule and the 

standards established under that rule, 

the November 2007 Final Rule 

eliminated the distinction between 

furnaces based on their certified input 

capacity (i.e., the standards applicable 

to ‘‘small’’ furnaces were established at 

the same level and as part of their 

appropriate class of furnace generally). 

Id. 

Following DOE’s adoption of the 

November 2007 Final Rule, several 

parties jointly sued DOE in the United 

States Court of Appeals for the Second 

Circuit (‘‘Second Circuit’’) to invalidate 

the rule. Petition for Review, State of 

New York, et al. v. Department of 

Energy, et al., Nos. 08–0311-ag(L); 08– 

0312-ag(con) (2d Cir. filed Jan. 17, 

2008). The petitioners asserted that the 

standards for furnaces promulgated in 

the November 2007 Final Rule did not 

reflect the ‘‘maximum improvement in 

energy efficiency’’ that ‘‘is 

technologically feasible and 

economically justified’’ under 42 U.S.C. 

6295(o)(2)(A). On April 16, 2009, DOE 

filed with the Court a motion for 

voluntary remand that the petitioners 

did not oppose. The motion did not 

state that the November 2007 Final Rule 

would be vacated, but it indicated that 

DOE would revisit its initial 

conclusions outlined in the November 

2007 Final Rule in a subsequent 

rulemaking action. DOE also agreed that 

the final rule in that subsequent 

rulemaking action would address both 

regional standards for furnaces and the 

effects of alternate standards on natural 

gas prices. The Second Circuit granted 

DOE’s motion on April 21, 2009. DOE 

notes that the Second Circuit’s order did 

not vacate the energy conservation 

standards set forth in the November 

2007 Final Rule, and during the remand, 

the standards went into effect as 

originally scheduled. 

On June 27, 2011, DOE published a 

direct final rule (‘‘DFR’’) in the Federal 

Register (‘‘June 2011 DFR’’) revising the 

energy conservation standards for 

residential furnaces pursuant to the 

voluntary remand in State of New York, 

et al. v. Department of Energy, et al. 76 

FR 37408. In the June 2011 DFR, DOE 

considered the amendment of the same 

six product classes considered in the 

November 2007 Final Rule analysis plus 

electric furnaces. As discussed 

previously, the June 2011 DFR amended 

the existing AFUE energy conservation 

standards for NWGFs, MHGFs, and 

NWOFs and amended the compliance 

date (but left the existing standards in 

place) for WGFs. The June 2011 DFR 

also established electrical standby mode 

and off mode energy conservation 

standards for NWGFs, MHGFs, NWOFs, 

MHOFs, and EFs. DOE confirmed the 

standards and compliance dates 

promulgated in the June 2011 DFR in a 

notice of effective date and compliance 

dates published in the Federal Register 

on October 31, 2011 (‘‘October 2011 

Notice’’). 76 FR 67037. The November 

2007 Final Rule and the June 2011 DFR 

represented the first and the second 

rounds, respectively, of the two 

rulemakings required under 42 U.S.C. 

6295(f)(4)(B)–(C) to consider amending 

the energy conservation standards for 

consumer furnaces. 

The June 2011 DFR and October 2011 

Notice amended, in relevant part, the 

AFUE energy conservation standards 

and compliance dates for three product 

classes of consumer furnaces (i.e., 

NWGFs, MHGFs, and NWOFs).7 The 

existing AFUE standards were left in 

place for three classes of consumer 

furnaces (i.e., WOFs, MHOFs, and EFs). 

For WGFs, the existing standard was left 

in place, but the compliance date was 

amended. Electrical standby mode and 

off mode energy consumption standards 

were established for non-weatherized 

gas and oil-fired furnaces (including 

mobile home furnaces) and EFs. 

Compliance with the energy 

conservation standards promulgated in 

the June 2011 DFR was to be required 

on May 1, 2013 for NWGFs, MHGFs, 

and NWOFs, and on January 1, 2015, for 

weatherized furnaces. 76 FR 37408, 

37547–37548 (June 27, 2011); 76 FR 

67037, 67051 (Oct. 31, 2011). The 

amended energy conservation standards 

and compliance dates in the June 2011 

DFR superseded those standards and 

compliance dates promulgated by the 

November 2007 Final Rule for NWGFs, 

MHGFs, and NWOFs. Similarly, the 

amended compliance date for WGFs in 

the June 2011 DFR superseded the 

compliance date in the November 2007 

Final Rule. 

Following DOE’s adoption of the June 

2011 DFR, APGA filed a petition for 

review with the United States Court of 

Appeals for the District of Columbia 

Circuit (‘‘D.C. Circuit’’) to invalidate the 

DOE rule as it pertained to NWGFs and 

MHGFs. Petition for Review, American 

Public Gas Association, et al. v. 

Department of Energy, et al., No. 11– 

1485 (D.C. Cir. filed Dec. 23, 2011). The 

parties to the litigation engaged in 

settlement negotiations, which 

ultimately led to filing of an unopposed 

motion on March 11, 2014, seeking to 

vacate DOE’s rule in part and to remand 

to the agency for further rulemaking. 

On April 24, 2014, the Court granted 

the motion and ordered that the 

standards established for NWGFs and 

MHGFs be vacated and remanded to 

DOE for further rulemaking. As a result, 

the standards established by the June 

2011 DFR for NWGFs and MHGFs did 

not go into effect, and, thus, required 

compliance with the standards 

established in the November 2007 Final 

Rule for these products began on 

November 19, 2015. As stated 

previously, the AFUE standards for 

WOFs, MHOFs, and EFs were 

unchanged, and as such, the original 

standards for those product classes 

remain in effect. Further, the amended 

standard for NWOFs was not subject to 

the Court order and went into effect as 

specified in the June 2011 DFR. The 

AFUE standards currently applicable to 

all residential furnaces,8 including the 


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MHGFs as part of a separate rulemaking (see Docket 

No. EERE–2014–BT–STD–0031). DOE published a 

final rule in the Federal Register on December 18, 

2023 amending the energy conservation standards 

for NWGFs and MHGFs. 88 FR 87502. 

9No stakeholders requested that a public meeting 

webinar be held in response to the November 2023 

NOPD, and, therefore, DOE did not elect to host a 

webinar for this NOPD. 

10The parenthetical reference provides a 

reference for information located in the docket. 

(Docket No. EERE–2021–BT–STD–0031, which is 

maintained at www.regulations.gov). The references 

are arranged as follows: (commenter name, 

comment docket ID number, page of that 

document). 

five product classes for which DOE is 

analyzing amended standards leading to 

this final determination, are set forth in 

DOE’s regulations at 10 CFR 

430.32(e)(1)(ii). 

On January 28, 2022, DOE published 

in the Federal Register a request for 

information (‘‘January 2022 RFI’’) to 

initiate a review to determine whether 

any new or amended standards would 

satisfy the relevant requirements of 

EPCA for a new or amended energy 

conservation standard for oil, electric, 

and weatherized gas consumer furnaces. 

87 FR 4513. On November 29, 2022, 

DOE published in the Federal Register 

a notice of availability of a preliminary 

technical support document (‘‘TSD’’) 

(‘‘the November 2022 Preliminary 

Analysis’’) and the accompanying 

preliminary TSD (‘‘the November 2022 

Preliminary Analysis TSD’’) that 

presented initial technical analyses in 

the following areas: (1) market and 

technology; (2) screening; (3) 

engineering; (4) markups to determine 

product price; (5) energy use; (6) LCC 

and PBP, and (7) national impacts. 87 

FR 73259. DOE held a public meeting 

webinar on December 19, 2022, in order 

to receive public input and information 

related to the November 2022 

Preliminary Analysis for the subject 

furnaces. On November 29, 2023, DOE 

published a NOPD (‘‘the November 2023 

NOPD’’) in the Federal Register, which 

tentatively determined that current 

standards for oil, electric, and 

weatherized gas furnaces do not need to 

be amended.9 88 FR 83426. 

DOE received comments in response 

to the November 2023 NOPD from the 

interested parties listed in Table II.3. 

TABLE II.3—LIST OF COMMENTERS WITH WRITTEN SUBMISSIONS IN RESPONSE TO THE NOVEMBER 2023 NOPD 

Commenter(s) Abbreviation Comment No. 

in the docket Commenter type 

Air-Conditioning, Heating, and Refrigeration Institute ......................... AHRI .................................. 36 Trade Association. 

American Gas Association, American Public Gas Association, National Propane Gas Association.Joint Commenters ............. 33 Trade Association. 

Andrew Chiafullo .................................................................................. Chiafullo ............................ 31 Individual. 

Appliance Standards Awareness Project, American Council for an 

Energy-Efficient Economy, Natural Resources Defense Council, 

New York State Energy Research and Development Authority, 

Northwest Energy Efficiency Alliance.

Joint Advocates ................. 34 Efficiency Organization. 

Daikin Comfort Technologies North America, Inc. .............................. Daikin ................................ 35 Manufacturer. 

Lennox International ............................................................................ Lennox ............................... 32 Manufacturer. 

Michael Ravnitzky ................................................................................ Ravnitzky ........................... 30 Individual. 

A parenthetical reference at the end of 

a comment quotation or paraphrase 

provides the location of the item in the 

public record.10

III. General Discussion and Rationale 

DOE developed this final 

determination after a review of the 

market for the subject oil, electric, and 

weatherized gas consumer furnaces. 

DOE also considered comments, data, 

and information from interested parties 

that represent a variety of interests. This 

final determination addresses issues 

raised by these commenters. 

A. General Comments 

This section summarizes general 

comments received from interested 

parties. 

1. Comments Supporting Proposed 

Determination 

Daikin supported DOE’s conclusion in 

the November 2023 NOPD that the 

current standards for oil, electric, and 

weatherized gas consumer furnaces do 

not need to be amended based on the 

results of the analyses that assessed 

impacts on manufacturers and product 

availability. (Daikin, No. 35 at p. 1) 

AHRI supported DOE’s determination 

not to amend energy conservation 

standards for oil and weatherized gas 

consumer furnaces due to the small 

markets for these products, the minimal 

energy savings potential at the 

efficiency levels analyzed, and the 

problems consumers would face from 

lack of product availability. In addition, 

AHRI agreed with DOE’s conclusion 

that amended energy standards for 

electric furnaces are not technologically 

feasible. (AHRI, No. 36 at p. 1) 

Ravnitzky supported DOE’s conclusion 

regarding energy conservation standards 

for oil, electric, and weatherized gas 

consumer furnaces due to DOE’s 

analysis of the technological feasibility, 

economic justification, and potential for 

significant energy savings. (Ravnitzky, 

No. 30 at p. 1) 

Lennox supported DOE’s conclusion 

that no new standards are appropriate 

for oil and weatherized gas consumer 

furnaces. (Lennox, No. 32 at pp. 1–2) 

The commenter agreed with DOE’s 

conclusion that oil-fired and 

weatherized gas furnaces are niche 

products with flat or declining sales; 

Lennox added that consumer cost and 

utility issues for weatherized gas 

products—including costs and physical 

challenges regarding condensate 

management that would be required if 

standards were tightened—provide 

additional support to DOE’s conclusion 

that more-stringent standards for 

weatherized gas products are not 

justified. (Id. at p. 3) Lennox further 

agreed with DOE’s conclusion that 

more-stringent energy conservation 

standards for electric furnaces are not 

technologically feasible for the niche 

electric furnace market. (Id. at p. 2) 

Lennox recommended that DOE 

continue to refrain from increasing 

furnace equipment costs by imposing 

new efficiency standards because they 

cannot be justified due to impacts 

resulting from the COVID–19 pandemic 

and the rise of inflation. (Id. at pp. 2, 4) 

The Joint Commenters supported 

DOE’s proposed determination that 

amended standards for weatherized gas 

consumer furnaces are not statutorily 

justified at this time because they are 

not economically justified and because 

they have relatively small or declining 


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11For more information, see www.energy.gov/ 

eere/funding/eere-prizes-and-competitions. 

markets. (Joint Commenters, No. 33 at p. 

2) 

2. Comments Opposing Proposed 

Determination 

The Joint Advocates recommended 

that DOE reconsider its proposed 

determination that amended AFUE 

standards for oil and weatherized gas 

consumer furnaces are not needed 

despite their technological feasibility. 

The Joint Advocates commented that 

DOE did not complete a manufacturer 

impact analysis (‘‘MIA’’) for the 

November 2023 NOPD, despite claiming 

that amended standards would not be 

economically justified due to potential 

manufacturer challenges that may 

impact the market for those products. 

These commenters stated that, 

according to DOE’s data, strengthening 

standards for these products would 

result in considerable cost savings for 

consumers, as outlined in the LCC and 

NIA results presented in the November 

2023 NOPD. The Joint Advocates 

commented that amending the 

standards for NWOFs in particular 

could provide significant benefits for 

consumers. (Joint Advocates, No. 34 at 

pp. 1–2) 

In response, as discussed in section 

II.A of this document, DOE is directed 

by EPCA to conduct periodic 

rulemakings to determine whether to 

amend the current energy conservation 

standards for various products, 

including consumer furnaces. (42 U.S.C. 

6295(m)(1)) In determining whether a 

potential more-stringent standard is 

economically justified, DOE must 

determine whether the benefits of the 

standard exceed its burdens. (42 U.S.C. 

6295(o)(2)(B)(i)) DOE must make this 

determination after receiving comments 

on the proposed standard, and by 

considering, to the greatest extent 

practicable, the seven statutory factors, 

which include the economic impacts to 

both consumers and manufacturers. (42 

U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) Section 

IV of this document outlines DOE’s 

approach to analyzing various potential 

amended standard levels, including a 

discussion of market trends and 

qualitative market impacts in section 

IV.F of this document. Section V of this 

document provides a qualitative 

discussion of the potential impacts to 

manufacturers, as well as a detailed 

explanation of DOE’s weighing of the 

benefits and burdens (including 

consumer cost savings as noted by the 

Joint Advocates) and the rationale for 

not amending the existing standards for 

oil, electric, and weatherized gas 

furnaces. 

DOE assessed in the November 2023 

NOPD the market size and manufacturer 

landscape for NWOFs and MHOFs and 

concluded that these products make up 

less than one percent of the U.S. 

residential furnace market. With this 

small market size and expected 

diminishing sales, cost recovery could 

be challenging for manufacturers. In the 

case of WGFs, manufacturers would 

need to redesign 99 percent of products 

on the market today to meet a standard 

set at EL 1 for those products, and all 

but one OEM would need to design new 

condensing products. Given the 

dynamics of both the oil and 

weatherized gas furnace market, 

amending standards may result in shifts 

in market competition impacting 

availability of products that cover the 

full range of capacities. With this 

understanding of the manufacturer and 

market landscape, DOE is unable to 

conclude that any of the efficiency 

levels analyzed for these categories of 

furnaces would meet the statutory 

criteria required to amend energy 

conservation standards. 

3. Other Topics 

Ravnitzky recommended that DOE 

consider establishing a series of 

incentives and challenges designed to 

encourage technological advancements 

in furnace designs that improve both the 

function and energy efficiency of 

consumer furnaces. (Ravnitzky, No. 30 

at pp. 1–2) The commenter stated that 

incentivizing innovation offers a way to 

develop better and more affordable 

high-efficiency furnaces and suggested 

that prize contests have resulted in 

technological advancement while 

simultaneously fostering energy 

conservation and affordability. 

Ravnitzky commented that such a 

program could spur participants to 

surpass energy efficiency benchmarks 

(e.g., AFUE ratings), innovate in the area 

of emissions reduction, develop 

materials that enhance heat transfer 

efficiency and durability, and lead to 

furnace designs that are both innovative 

and cost-effective. Ravnitzky argued that 

an added benefit to an approach 

incentivizing advancements would be 

the resulting likelihood of contributing 

to national energy independence and 

forming new business opportunities and 

job creation in the energy sector. (Id.) 

Ravnitzky further commented that 

incentives and challenges could foster 

collaboration and competition among 

manufacturers, universities, 

independent investors, and other 

stakeholders. Finally, the commenter 

recommended that the program be 

administered by DOE offices, including 

the Advanced Research Projects 

Agency—Energy, and structured to 

reward innovations in design, 

manufacturing processes, or materials 

that make high-efficiency furnaces more 

cost-effective and accessible to 

consumers. (Id.) 

In response, DOE notes that its 

authority to regulate the energy 

efficiency of consumer products 

(including consumer furnaces) is 

outlined in EPCA, as discussed in 

section II.A of this document. Any 

incentive programs or prize contests are 

outside of the scope of that authority 

and this rulemaking. However, DOE 

further notes that there are voluntary 

energy efficiency appliance programs 

for consumer products, including 

furnaces, such as the ENERGY STAR®

Program administered by the U.S. 

Environmental Protection Agency 

(‘‘EPA’’) or other DOE-funded initiatives 

such as the American-Made Challenges 

program.11

The Joint Commenters encouraged 

DOE to implement the 

recommendations from the National 

Academy of Sciences’ (‘‘NAS’s’’) 

December 2021 report (‘‘the NAS 

Report’’) into its appliance rulemakings, 

including for WGFs. These commenters 

stated that the NAS Report identified 

several suggestions to improve DOE’s 

rulemaking process, including ones 

related to economic modeling and 

providing data for public review to 

ensure transparency. (Joint Commenters, 

No. 33 at p. 2) The Joint Commenters 

recommended that DOE should ensure 

the public has sufficient notice and 

comment opportunity in the separate 

rulemaking proceeding mentioned in 

the November 2023 NOPD so as to 

confirm that the NAS Report’s 

recommendations are appropriately 

implemented in all future appliance 

rulemakings, including this oil, electric, 

and weatherized gas furnace 

rulemaking. (Id. at p. 3) 

The Joint Commenters reiterated the 

earlier comments of the American Gas 

Association, et al. in response to DOE’s 

request for information regarding energy 

conservation standards for consumer 

boilers in May 2021, particularly 

regarding concerns about the following: 

(1) DOE’s reliance on flawed projections 

of natural gas price trends and marginal 

residential natural gas prices, and (2) 

systemic problems with the agency’s 

economic analysis of standards. The 

Joint Commenters stated that, like the 

recommendations in the NAS Report, 

these earlier comments highlight flaws 

in DOE’s process that must be addressed 

to better model consumer purchasing 

decisions, future fuel prices, and more. 

(Id.) 


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12On March 13, 2023, DOE published in the 

Federal Register a test procedure final rule for 

consumer boilers, which are a type of furnace under 

EPCA (see 42 U.S.C. 6291(23)) but are not included 

within the scope of this rulemaking (see section 

IV.A.1 of this document). 88 FR 15510. This test 

procedure final rule separated the test method for 

consumer boilers from the test method for other 

types of furnaces and moved the boilers test method 

to a new appendix EE to 10 CFR part 430, subpart 

B. Accordingly, it amended appendix N so as to 

remove provisions applicable only to boilers, but it 

did not materially change the test method for the 

oil, electric, and weatherized gas furnaces that are 

the subject of this rulemaking. 

In response, DOE notes that the 

rulemaking evaluating DOE’s analytical 

methodologies and whether any 

modifications are warranted in relation 

to the NAS Report will be handled 

separately from individual product 

rulemakings, as stated in section VI.L of 

this document. As discussed in section 

V.C of this document, DOE is not 

amending the current energy 

conservation standards for the subject 

oil, electric, and weatherized gas 

consumer furnaces, and DOE has made 

this determination consistent with 

EPCA’s requirements, including 

evaluation of economic justification of 

standards, and applicable executive 

orders. 

B. Scope of Coverage and Product 

Classes 

This final determination covers 

certain product classes of consumer 

furnaces (i.e., ones for oil, electric, and 

weatherized gas furnaces) that meet the 

following definition of consumer 

‘‘furnace’’ as codified at 10 CFR 430.2: 

A ‘‘furnace’’ is defined as a product which 

utilizes only single-phase electric current, or 

single-phase electric current or DC current in 

conjunction with natural gas, propane, or 

home heating oil, and which— 

(A) Is designed to be the principal heating 

source for the living space of a residence; 

(B) Is not contained within the same 

cabinet with a central air conditioner whose 

rated cooling capacity is above 65,000 Btu 

per hour; 

(C) Is an electric central furnace, electric 

boiler, forced-air central furnace, gravity 

central furnace, or low-pressure steam or hot 

water boiler; and 

(D) Has a heat input rate of less than 

300,000 Btu per hour for electric boilers and 

low-pressure steam or hot water boilers and 

less than 225,000 Btu per hour for forced-air 

central furnaces, gravity central furnaces, and 

electric central furnaces. 

10 CFR 430.2. As noted previously, this 

final determination applies only to oil, 

electric, and weatherized gas consumer 

furnaces. The scope of coverage is 

discussed in further detail in section 

IV.A.1 of this document. 

When evaluating and establishing/ 

amending energy conservation 

standards, DOE divides covered 

products into product classes by the 

type of energy used or by capacity or 

other performance-related features that 

justify differing standards. In making a 

determination on whether a 

performance-related feature justifies a 

different standard, DOE must consider 

such factors as the utility of the feature 

to the consumer and other factors DOE 

determines are appropriate. (42 U.S.C. 

6295(q)) The product classes for this 

final determination are discussed in 

further detail in section IV.A.2 of this 

document. 

C. Test Procedure 

EPCA sets forth generally applicable 

criteria and procedures for DOE’s 

adoption and amendment of test 

procedures. (42 U.S.C. 6293) 

Manufacturers of covered products must 

use these test procedures to quantify the 

efficiency of their product and as the 

basis for certifying to DOE that their 

product complies with the applicable 

energy conservation standards and as 

the basis for any representations 

regarding the energy use or energy 

efficiency of the product. (42 U.S.C. 

6295(s) and 42 U.S.C. 6293(c)). 

Similarly, DOE must use these test 

procedures to evaluate whether a basic 

model complies with the applicable 

energy conservation standard(s) adopted 

pursuant to EPCA. (42 U.S.C. 6295(s); 10 

CFR 429.110(e)) 

The test procedure for determining 

AFUE, PW, SB, and PW, OFF is established 

at 10 CFR part 430, subpart B, appendix 

N. AFUE is an annualized fuel 

efficiency metric that accounts for fossil 

fuel consumption in active, standby, 

and off modes. PW, SB and PW, OFF are 

measurements of the standby mode and 

off mode electrical power consumption, 

respectively, in watts. The test 

procedure for consumer furnaces was 

last amended by a final rule published 

in the Federal Register on January 15, 

2016 (‘‘January 2016 TP Final Rule’’). 81 

FR 2628.12

The revisions to the consumer 

furnaces test procedure in the January 

2016 TP Final Rule included: 

• Clarification of the electrical power 

term ‘‘PE’’; 

• Adoption of a smoke stick test for 

determining use of minimum default 

draft factors; 

• Allowance for the measurement of 

condensate under steady-state 

conditions; 

• Reference to manufacturer’s 

installation and operation manual and 

clarifications for when that manual does 

not specify test set-up; 

• Specification of duct-work 

requirements for units that are installed 

without a return duct; 

• Specification of testing 

requirements for units with multiposition configurations; and 

• Revision of the requirements 

regarding AFUE reporting precision. 

81 FR 2628, 2629–2630 (Jan. 15, 2016). 

The changes in the January 2016 TP 

Final Rule were mandatory for 

representations of furnace efficiency 

made on or after July 13, 2016. As such, 

the most current version of the test 

procedure (published in January 2016) 

has now been in place for several years. 

D. Standby Mode and Off Mode 

As discussed in section II.A of this 

document, EPCA requires any final rule 

for new or amended energy 

conservation standards promulgated 

after July 1, 2010, to address standby 

mode and off mode energy use. (42 

U.S.C. 6295(gg)(3)) 

‘‘Standby mode’’ and ‘‘off mode’’ 

energy use are defined in the DOE test 

procedure for residential furnaces (i.e., 

‘‘Uniform Test Method for Measuring 

the Energy Consumption of Consumer 

Furnaces Other Than Boilers,’’ 10 CFR 

part 430, subpart B, appendix N; 

‘‘appendix N’’). In that test procedure, 

DOE defines ‘‘standby mode’’ as any 

mode in which the furnace is connected 

to a main power source and offers one 

or more of the following space heating 

functions that may persist: (a) to 

facilitate the activation of other modes 

(including activation or deactivation of 

active mode) by remote switch 

(including thermostat or remote 

control), internal or external sensors, 

and/or timer; and (b) continuous 

functions, including information or 

status displays or sensor-based 

functions. 10 CFR part 430, subpart B, 

appendix N, section 2. ‘‘Off mode’’ for 

consumer furnaces is defined as a mode 

in which the furnace is connected to a 

main power source and is not providing 

any active mode or standby mode 

function, and where the mode may 

persist for an indefinite time. The 

existence of an off switch in off position 

(a disconnected circuit) is included 

within the classification of off mode. 10 

CFR part 430, subpart B, appendix N, 

section 2. An ‘‘off switch’’ is defined as 

the switch on the furnace that, when 

activated, results in a measurable 

change in energy consumption between 

the standby and off modes. 10 CFR part 

430, subpart B, appendix N, section 2. 

Currently, the standby mode and off 

mode energy conservation standards for 

NWOFs and EFs are outlined in 10 CFR 

430.32(e)(1)(iv) and are shown in Table 

II.2 of this document. Compliance with 


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the Federal standards for standby mode 

and off mode electricity consumption 

for NWOFs, MHOFs, and EFs, as 

measured by standby power 

consumption in watts (‘‘PW, SB’’) and off 

mode power consumption in watts 

(‘‘PW, OFF’’), was required on May 1, 

2013. 

In the November 2022 Preliminary 

Analysis, DOE analyzed amended 

standby/off mode standards for NWOFs, 

MHOFs, and EFs. DOE did not consider 

amended standby mode and off mode 

standards for WGFs and WOFs, because 

DOE has previously concluded in a DFR 

published in the Federal Register on 

June 27, 2011 that these products are 

packaged with either an air conditioner 

or a heat pump and that the standards 

for those products, specified in terms of 

power consumption in watts and 

seasonal energy efficiency ratio 

(‘‘SEER’’), already account for the 

standby mode and off mode energy 

consumption for these classes of 

furnaces. 76 FR 37408, 37433. Based on 

market analysis conducted for the 

November 2022 Preliminary Analysis 

and updated for this final 

determination, DOE concludes that 

WGFs and WOFs continue to be 

packaged with an air conditioner or heat 

pump. 

In the analysis for the November 2022 

Preliminary Analysis, DOE established 

the baseline for NWOFs, MHOFs, and 

EFs as the current Federal standby mode 

and off mode standards (see Table II.2). 

DOE also defined and identified 

baseline components as those that 

consumed the most electricity during 

standby mode and off mode operation. 

For intermediate efficiency levels, DOE 

utilized a design-option approach to 

identify design options that could be 

applied to the baseline design to reduce 

standby mode and off mode energy 

consumption. Above the baseline 

efficiency level, DOE implemented 

design options in the order of 

incremental energy savings relative to 

baseline until all available design 

options were employed (i.e., at a maxtech level). DOE identified two design 

options between the baseline and maxtech designs that were used as the basis 

for intermediate standby mode and off 

mode design options. Specifically, DOE 

replaced the linear transformer found in 

models at the baseline with a low-loss 

transformer (‘‘LL–LTX’’) for the first 

intermediate efficiency level and 

replaced the linear power supply found 

in baseline models with a switching 

mode power supply (‘‘SMPS’’) for the 

second intermediate efficiency level. 

The max-tech standby mode and off 

mode efficiency level in the November 

2022 Preliminary Analysis was based on 

a combination of the two design options 

that were analyzed for the intermediate 

efficiency levels. To reach max-tech, 

DOE analyzed using an LL–LTX in 

combination with an SMPS to reach the 

minimum standby mode or off mode 

power consumption (without 

eliminating other consumer- or 

performance-related electronic features). 

For this design option, a transformer is 

only needed to step down the voltage 

for the thermostat because the SMPS is 

able to step down the voltage for the 

other components of the furnace. As 

such, a smaller, lower-cost LL–LTX is 

used at the max-tech level, as compared 

to the LL–LTX used at EL 1 (i.e., the first 

intermediate efficiency level). Since the 

November 2022 Preliminary Analysis, 

DOE has not identified any additional 

design options that could reduce 

standby mode and off mode energy 

consumption. 

In the November 2023 NOPD, DOE 

found that there was some degree of 

uncertainty with respect to the 

appropriateness of the standby mode/off 

mode efficiency levels analyzed in the 

November 2022 Preliminary Analysis— 

particularly for products that are in 

development but also possibly in some 

products already on the market. There 

was also uncertainty related to the 

potential impacts that standby mode 

and off mode power consumption 

standards could have on overall system 

energy consumption, taking into 

account the power needs for features 

such as safety sensors or other 

improvements to functionality that 

would benefit the consumer. 

Consequently, DOE determined that it 

lacked the necessary information and 

requisite evidence to amend the standby 

mode and off mode standards and did 

not propose to amend the standby 

mode/off mode power standards for 

NWOFs, MHOFs, and EFs. 88 FR 83426, 

83433–83434 (Nov. 29, 2023). This 

assessment has not materially changed 

since the time of the November 2023 

NOPD. 

Lennox agreed with DOE’s conclusion 

that no new standards for standby mode 

and off mode are appropriate. The 

commenter stated that increasing the 

stringency of standby power levels 

would inhibit innovations that benefit 

consumers, save more significant 

amounts of energy, and implement 

additional safety features. (Lennox, No. 

32 at pp. 1–3) Lennox also agreed with 

DOE’s conclusion that separate standby 

mode and off mode power standards are 

not appropriate for weatherized gas 

furnace products, as these products are 

packaged with air conditioners or heat 

pumps that account for standby mode 

and off mode energy use in the 

respective energy conservation 

standards for those products. (Id. at p. 

3) 

In this final determination, for reasons 

similar to those explained in the 

November 2023 NOPD, DOE concludes 

that amended standby mode/off mode 

standards for NWOFs, MHOFs, and EFs 

are not justified at this time. 

E. Technological Feasibility 

1. General Considerations 

As discussed, a determination that 

amended energy conservation standards 

are not needed must be based on 

consideration of whether amended 

standards would result in significant 

conservation of energy, are 

technologically feasible, and are costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) 

To determine whether potential 

amended standards would be 

technologically feasible, DOE first 

develops a list of all known 

technologies and design options that 

could improve the efficiency of the 

products that are the subject of the 

determination. DOE considers 

technologies incorporated in 

commercially-available products or in 

working prototypes to be 

‘‘technologically feasible.’’ 10 CFR part 

430, subpart C, appendix A, sections 

6(b)(3)(i) and 7(b)(1). Section IV.A.3 of 

this document discusses the technology 

options identified and considered by 

DOE for this analysis for oil, electric, 

and weatherized gas furnaces. 

After DOE has determined which, if 

any, technologies and design options are 

technologically feasible, it further 

evaluates each technology and design 

option in light of the following 

additional screening criteria: (1) 

practicability to manufacture, install, 

and service; (2) adverse impacts on 

product utility or availability; (3) 

adverse impacts on health or safety; and 

(4) unique-pathway proprietary 

technologies. 10 CFR part 430, subpart 

C, appendix A, sections 6(b)(3)(ii)–(v) 

and 7(b)(2)–(5). Those technology 

options that are ‘‘screened out’’ based 

on these criteria are not considered 

further. Those technology and design 

options that are not screened out are 

considered as the basis for higher 

efficiency levels that DOE could 

consider for potential amended 

standards. Section IV.A.4 of this 

document discusses the results of this 

screening analysis conducted for this 

final determination. 


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13 In applying these design options, DOE would 

only include those that are compatible with each 

other that when combined, would represent the 

theoretical maximum possible efficiency. 

14 DOE also presents a sensitivity analysis that 

considers impacts for products shipped in a nineyear period. 

15The FFC metric is discussed in DOE’s 

statement of policy and notice of policy 

amendment. 76 FR 51281 (August 18, 2011), as 

amended at 77 FR 49701 (August 17, 2012). 16The numeric threshold for determining the 

significance of energy savings established in a final 

rule published on February 14, 2020 (85 FR 8626, 

8670) was subsequently eliminated in a final rule 

published on December 13, 2021 (86 FR 70892). 

2. Maximum Technologically Feasible 

Levels 

EPCA requires that for any proposed 

rule that prescribes an amended or new 

energy conservation standard or 

prescribes no amendment or no new 

standard for a type (or class) of covered 

product, DOE must determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for each type (or class) of 

covered products. (42 U.S.C. 6295(p)(1)) 

Accordingly, in the engineering 

analysis, DOE identifies the maximum 

technologically feasible efficiency level 

currently available on the market for oil, 

electric, and weatherized gas furnaces. 

DOE also defines such ‘‘max-tech’’ 

efficiency level, representing the 

maximum theoretical efficiency that can 

be achieved through the application of 

all available technology options retained 

from the screening analysis.13 In many 

cases, the max-tech efficiency level is 

not commercially available because it is 

not currently economically feasible. The 

max-tech levels that DOE determined 

for this analysis are described in section 

IV.B.1.c of this final determination. 

F. Energy Savings 

1. Determination of Savings 

For each efficiency level (‘‘EL’’) 

evaluated, DOE projects anticipated 

energy savings from application of the 

EL to the oil, electric, and weatherized 

gas furnace products purchased during 

the 30-year period that begins in the 

assumed year of compliance with 

potential amended standards (2030– 

2059).14 The savings are measured over 

the entire lifetime of products 

purchased during the 30-year analysis 

period. DOE quantifies the energy 

savings attributable to each EL as the 

difference in energy consumption 

between each standards case and the nonew-standards case. The no-newstandards case represents a projection of 

energy consumption that reflects how 

the market for such products would 

likely evolve in the absence of amended 

energy conservation standards. 

DOE uses its NIA spreadsheet models 

to estimate national energy savings from 

potential amended standards for the 

products analyzed. The NIA spreadsheet 

model (described in section IV.G of this 

document) calculates energy savings in 

terms of site energy, which is the energy 

directly consumed by the products at 

the locations where they are used. For 

electricity, DOE reports national energy 

savings in terms of primary energy 

savings, which is the savings in the 

energy that is used to generate and 

transmit the site electricity. For natural 

gas, the primary energy savings are 

considered to be equal to the site energy 

savings. DOE also calculates national 

energy savings (‘‘NES’’) in terms of fullfuel-cycle (‘‘FFC’’) energy savings. The 

FFC metric includes the energy 

consumed in extracting, processing, and 

transporting primary fuels (i.e., coal, 

natural gas, petroleum fuels), and, thus, 

presents a more complete picture of the 

impacts of energy conservation 

standards.15 DOE’s approach is based on 

the calculation of an FFC multiplier for 

each of the energy types used by 

covered products. Section IV.G of this 

document provides more information on 

FFC energy savings. 

2. Significance of Savings 

As discussed, a determination that 

amended standards are not needed must 

be based on consideration of whether 

amended standards will result in 

significant conservation of energy, 

among other factors. (42 U.S.C. 

6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) 

The significance of energy savings 

offered by a new or amended energy 

conservation standard cannot be 

determined without knowledge of the 

specific circumstances surrounding a 

given rulemaking.16 For example, for 

some covered products, most of the 

energy consumption occurs during 

periods of peak energy demand. The 

impacts of these products on the energy 

infrastructure can be more pronounced 

than the impacts of products with 

relatively constant demand. 

Accordingly, DOE evaluates the 

significance of energy savings on a caseby-case basis. The significance of energy 

savings is further discussed in section 

V.B.1 of this final determination. 

G. Cost-Effectiveness 

As discussed, a determination that 

amended standards are not needed must 

be based on consideration of whether 

amended standards would be costeffective, among other factors. (42 U.S.C. 

6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) 

In evaluating cost-effectiveness, EPCA 

requires DOE to consider savings in 

operating costs throughout the 

estimated average life of the covered 

product in the type (or class) compared 

to any increase in the price, initial 

charges, or maintenance expenses for 

the covered product that are likely to 

result from the standard. (42 U.S.C. 

6295(n)(2)(c) and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) Cost-effectiveness is 

also one of the factors that DOE 

considers under 42 U.S.C. 6295(o)(2)(B) 

in determining whether new or 

amended standards are economically 

justified. (42 U.S.C. 6295(o)(2)(B)(i)(II)) 

In determining cost-effectiveness of 

potential amended standards for 

covered products, DOE generally 

conducts LCC and PBP analyses that 

estimate the costs and benefits to users 

from potential standards. Section IV.E of 

this document provides more 

information on the LCC and PBP 

analyses conducted for this final 

determination. To further inform DOE’s 

consideration of the cost-effectiveness of 

potential amended standards, DOE 

considered the NPV of total costs and 

benefits estimated as part of the NIA. 

The inputs for determining the NPV of 

the total costs and benefits experienced 

by consumers are: (1) total annual 

installed cost, (2) total annual operating 

costs (energy costs and repair and 

maintenance costs), and (3) a discount 

factor to calculate the present value of 

costs and savings. The results of this 

analysis are discussed in section V.C.2 

of this document. 

H. Further Considerations 

In determining whether a potential, 

more-stringent standard is economically 

justified, DOE must determine whether 

the benefits of the standard exceed its 

burdens. (42 U.S.C. 6295(o)(2)(B)(i)). 

DOE must make this determination after 

receiving comments on the proposed 

standard, and by considering, to the 

greatest extent practicable, the following 

seven statutory factors: 

(1) The economic impact of the standard 

on manufacturers and consumers of the 

product subject to the standard; 

(2) The savings in operating costs 

throughout the estimated average life of the 

covered product in the type (or class) 

compared to any increase in the price, initial 

charges for, or maintenance expenses of the 

covered product that are likely to result from 

the standard; 

(3) The total projected amount of energy (or 

as applicable, water) savings likely to result 

from the standard; 

(4) Any lessening of the utility or the 

performance of the covered product likely to 

result from the standard; 

(5) The impact of any lessening of 

competition, as determined in writing by the 

Attorney General, that is likely to result from 

the standard; 


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(6) The need for national energy and water 

conservation; and 

(7) Other factors the Secretary considers 

relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) 

The following sections discuss how 

DOE has addressed each of these seven 

factors in this final determination. 

1. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of a 

potential new or amended standard on 

manufacturers, DOE conducts an MIA. 

DOE first uses an annual cash-flow 

approach to determine the quantitative 

impacts. This step includes both a shortterm assessment—based on the cost and 

capital requirements during the period 

between when a regulation is issued and 

when entities must comply with the 

regulation—and a long-term assessment 

over a 30-year period. The industrywide impacts analyzed include: (1) 

industry net present value, which 

values the industry on the basis of 

expected future cash flows; (2) cash 

flows by year; (3) changes in revenue 

and income; and (4) other measures of 

impact, as appropriate. Since DOE has 

determined not to amend standards for 

oil, electric, and weatherized gas 

furnaces, this final determination will 

have no cash-flow impacts on 

manufacturers. Accordingly, DOE did 

not conduct an MIA for this final 

determination. 

For individual consumers, measures 

of economic impact include the changes 

in LCC and PBP associated with new or 

amended standards. These measures are 

discussed further in the following 

section. For consumers in the aggregate, 

DOE also calculates the national NPV of 

the consumer costs and benefits 

expected to result from particular 

standards. DOE also evaluates the 

impacts of potential standards on 

identifiable subgroups of consumers 

that may be affected disproportionately 

by a standard. Since DOE has 

determined not to amend standards for 

oil, electric, and weatherized gas 

furnaces, this final determination will 

have no disproportionate impact on 

identifiable subgroups of consumers. 

Accordingly, DOE did not conduct a 

subgroup analysis for this final 

determination. 

2. Savings in Operating Costs Compared 

To Increase in Price 

EPCA requires DOE to consider the 

savings in operating costs throughout 

the estimated average life of the covered 

product in the type (or class) compared 

to any increase in the price of, or in the 

initial charges for, or maintenance 

expenses of, the covered product that 

are likely to result from a standard. (42 

U.S.C. 6295(m)(1); 42 U.S.C. 6295(n)(2), 

and 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE 

conducts this comparison in its LCC and 

PBP analyses. 

For its LCC and PBP analyses, DOE 

assumes that consumers will purchase 

the covered product in the first year of 

compliance with new or amended 

standards. The LCC savings for the 

considered efficiency levels are 

calculated relative to the case that 

reflects projected market trends in the 

absence of new or amended standards. 

DOE’s LCC and PBP analyses are 

discussed in further detail in section 

IV.E of this document. 

3. Energy Savings 

EPCA requires DOE, in determining 

the economic justification of an 

amended standard, to consider the total 

projected energy savings that are 

expected to result directly from the 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) 

As discussed in section IV.G of this 

document, DOE uses the NIA 

spreadsheet models to project national 

energy savings that are expected to 

result directly from an amended 

standard. 

4. Lessening of Utility or Performance of 

Products 

In establishing product classes and in 

evaluating design options and the 

impact of potential standard levels, DOE 

evaluates potential standards that would 

not lessen the utility or performance of 

the considered product. (42 U.S.C. 

6295(o)(2)(B)(i)(IV)) Since DOE has 

determined not to amend standards for 

oil, electric, and weatherized gas 

furnaces, this final determination will 

not impact the utility of such products. 

5. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider the 

impact of any lessening of competition, 

as determined in writing by the 

Attorney General, that is likely to result 

from a standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V)) Since DOE has 

determined not to amend standards for 

oil, electric, and weatherized gas 

furnaces, DOE did not transmit a copy 

of its determination to the Attorney 

General for anti-competitive review. 

6. Need for National Energy 

Conservation 

DOE also considers the need for 

national energy conservation in 

determining whether a new or amended 

standard is economically justified. (42 

U.S.C. 6295(o)(2)(B)(i)(VI)) The energy 

savings from the standards are likely to 

provide improvements to the security 

and reliability of the Nation’s energy 

system. Reductions in the demand for 

electricity also may result in reduced 

costs for maintaining the reliability of 

the Nation’s electricity system. DOE 

generally conducts a utility impact 

analysis to estimate how standards may 

affect the Nation’s needed power 

generation capacity. However, since 

DOE has determined not to amend 

standards for oil, electric, and 

weatherized gas furnaces, DOE did not 

conduct this analysis. 

DOE maintains that environmental 

and public health benefits associated 

with the more efficient use of energy are 

important to take into account when 

considering the need for national energy 

conservation. Amended standards are 

likely to result in environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with energy 

production and use. DOE generally 

conducts an emissions analysis to 

estimate how amended standards may 

affect these emissions. DOE also 

generally estimates the economic value 

of emissions reductions resulting from 

an amended standard. However, since 

DOE has determined not to amend 

standards for oil, electric, and 

weatherized gas furnaces, DOE did not 

conduct this analysis. 

7. Other Factors 

In determining whether an energy 

conservation standard is economically 

justified, DOE may consider any other 

factors that the Secretary deems to be 

relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 

To the extent DOE identifies any 

relevant information regarding 

economic justification that does not fit 

into the other categories described 

previously, DOE could consider such 

information under ‘‘other factors.’’ 

IV. Methodology and Discussion of 

Related Comments 

The following sections of this 

document address each key component 

of the analyses DOE has performed for 

this final determination with respect to 

oil, electric, and weatherized gas 

furnaces. Comments received from 

interested parties are addressed in each 

relevant section. 

A. Market and Technology Assessment 

DOE develops information in the 

market and technology assessment that 

provides an overall picture of the 

market for the products concerned, 

including the purpose of the products, 

the industry structure, manufacturers, 

market characteristics, and technologies 

used in the products. This activity 

includes both quantitative and 


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17See Docket No. EERE–2014–BT–STD–0031, 

which can be accessed at www.regulations.gov. 18See Docket No. EERE–2014–BT–STD–0031. 

qualitative assessments, based primarily 

on publicly-available information. The 

subjects addressed in the market and 

technology assessment for this final 

determination include: (1) a 

determination of the scope and 

identification of product classes, (2) 

manufacturers and industry structure, 

(3) existing efficiency programs, (4) 

shipments information, (5) market and 

industry trends, and (6) technologies or 

design options for improving efficiency. 

The key findings of DOE’s market 

assessment are summarized in the 

following sections. 

1. Scope of Coverage 

As mentioned in section III.B of this 

document, in assessing the scope of this 

rulemaking, DOE relied on the 

definition of ‘‘furnace’’ in 10 CFR 430.2. 

Any product meeting the definition of a 

‘‘furnace’’ that is also an oil, electric, 

and weatherized gas furnace was 

included in the scope of DOE’s analysis 

for this final determination. Nonweatherized gas furnaces and mobile 

home gas furnaces were considered in a 

separate rulemaking.17

a. Electric Furnaces 

A basic EF is composed of an electric 

resistance heating element and blower 

assembly. (Additionally, there are 

products that include electrically 

powered heat pumps, but these are 

separately covered products not 

addressed here.) The electric resistance 

heating elements of EFs are highly 

efficient, and the efficiency of these 

units already approaches 100 percent. 

DOE is unaware of any technology 

options that can improve the efficiency 

of electric furnaces, so DOE has 

determined that more-stringent 

standards for EFs would not be 

technologically feasible. Therefore, DOE 

concludes that the energy savings 

potential from amended standards for 

EFs would be minimal. Consequently, 

DOE did not consider amended AFUE 

standards for EFs in this rulemaking. 

b. Weatherized Oil-Fired Furnaces 

DOE is not aware of any WOFs on the 

market, and, therefore, DOE did not 

analyze amended standards for that 

product class. DOE has concluded that 

because there are no WOFs on the 

market, there would be no potential 

energy savings from amended standards. 

2. Product Classes 

When evaluating and establishing or 

amending energy conservation 

standards, DOE may establish separate 

standards for a group of covered 

products (i.e., establish a separate 

product class) if DOE determines that 

separate standards are justified based on 

the type of energy used, or if DOE 

determines that the product’s capacity 

or other performance-related feature 

justifies a different standard. (42 U.S.C. 

6295(q)) In making a determination 

whether a performance-related feature 

justifies a different standard, DOE 

considers such factors as the utility of 

the feature to the consumer and other 

factors DOE determines are appropriate. 

(Id.) 

In this case, DOE divides furnaces 

into seven product classes based on fuel 

type (gas, oil, or electric), whether the 

furnace is weatherized or not, and 

whether the furnace is designed for use 

only in mobile homes or not. The 

current product classes for furnaces are 

(1) NWGFs, (2) MHGFs, (3) NWOFs, (4) 

MHOFs, (5) WGFs, (6) WOFs, and (7) 

EFs. 10 CFR 430.32(e)(1)(ii). As noted 

previously, NWGFs and MHGFs are 

being addressed in a separate 

rulemaking process.18 Therefore, the 

product classes that DOE considered for 

this final determination are NWOFs, 

MHOFs, WGFs, WOFs, and EFs. 

However, for the reasons discussed in 

sections IV.A.1.a and IV.A.1.b of this 

document, amended energy 

conservation standards were not 

analyzed for EFs or WOFs. 

In summary, DOE assessed amended 

energy conservation standards in terms 

of AFUE for the NWOF, MHOF, and 

WGF product classes in this final 

determination. Again, for the reasons 

discussed in section III.D of this 

document, DOE did not analyze new or 

amended standby mode/off mode power 

standards for any product classes this 

time. 

This final determination maintains 

the product classes currently 

established for oil, electric, and 

weatherized gas furnaces. 

3. Technology Options 

DOE develops information in the 

technology assessment that 

characterizes the technologies and 

design options that manufacturers may 

use to attain higher-efficiency 

performance. 

In the November 2023 NOPD, DOE 

identified several technology options 

that would be expected to improve the 

efficiency of oil and weatherized gas 

furnaces in terms of AFUE, as measured 

by the DOE test procedure. To develop 

a list of technology options, DOE 

examined the efficiency-improving 

technologies used in consumer furnaces 

today. These technology options 

provide insight into the technological 

improvements typically used to increase 

the energy efficiency of consumer 

furnaces. 

For this final determination, DOE has 

reviewed the consumer furnaces market 

and confirmed that the technology 

options identified in the November 2023 

NOPD continue to reflect the market. 

The identified technology options are 

shown in Table IV.1. 


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TABLE IV.1—LIST OF TECHNOLOGY OPTIONS CONSIDERED FOR THIS FINAL DETERMINATION

Technology option Description 

Condensing Secondary Heat Exchanger ........... The secondary heat exchanger allows more heat to be extracted from the flue gases before 

the products of combustion exit through the flue to the vent system by condensing any 

water vapor and releasing the resulting latent heat. 

Heat Exchanger Improvements .......................... Improvements to the heat exchanger can be achieved by modifying baseline designs of standard furnaces to incorporate any combination of: (1) increased heat exchanger surface area, 

(2) heat exchanger surface features, and/or (3) heat exchanger baffles and turbulators. Improving the heat exchanger for fossil fuel-fired furnaces can increase the rate of heat transfer from the hot combustion gases to the circulation air that is distributed to the heated 

space. This improved heat transfer increases thermal efficiency and AFUE. 

Two-Stage and Modulating Combustion ............ Two-stage and modulating combustion allow furnaces to meet heating load requirements more 

precisely. When low heating load conditions exist, a two-stage or modulating furnace can 

operate at a reduced input rate for an extended period of burner on-time to meet the reduced heating load. This improves comfort by reducing large fluctuations in room temperature. Because burner on-time increases, however, fuel use does not drastically decrease, so 

efficiency gains are typically small. 

Pulse Combustion ............................................... Pulse combustion burners operate on self-sustaining resonating pressure waves that alternately rarefy the combustion chamber (drawing a fresh fuel-air mixture into the chamber) 

and pressurize it (causing ignition by compression heating of the mixture to its flash point). 

Pulse combustion systems feature high heat transfer rates, can self-vent, and can operate 

as isolated combustion systems. Because the pulse combustion process is highly efficient, 

the burners are generally used with condensing appliances. 

Premix Burners ................................................... Premix burners completely premix the primary air and fuel prior to combustion, thereby eliminating the need for secondary air. These burners allow for more precise control over the airfuel ratio, so that the level of excess air can be set for optimal performance. Premix burners 

are often utilized to control production of emissions, in particular NOX. The premix burners 

used in consumer furnaces on the market today are capable of achieving ‘‘ultra-low NOX’’ 

levels. 

Burner Derating .................................................. Burner derating (i.e., reducing burner firing rate while keeping heat exchanger geometry and 

surface area the same) will increase the ratio of heat transfer surface area to energy input, 

thereby increasing the AFUE. 

Insulation Improvements ..................................... If the jacket loss test is performed, insulation improvements would reduce jacket losses and increase AFUE. Insulation can be improved by modifying the baseline furnace design through 

the use of increased jacket insulation or advanced forms of insulation. 

Off-Cycle Dampers ............................................. Off-cycle (which refers to the burner off-cycle) dampers restrict the intake and exhaust airflow 

through the venting system during standby mode by closing when the burner is not operating, thereby trapping residual heat in the heat exchanger. During the burner off-cycle, a 

furnace can lose heat by natural convection and conduction through the combustion air inlet 

and flue. Installing a damper at these points can prevent heat from escaping and minimize 

off-cycle heat losses. Dampers have no effect on the steady-state performance of the furnace; however, they can reduce standby losses. The AFUE metric captures both steadystate and standby performance of the furnace, and thus any heated air that is retained in 

the system during the standby mode improves the furnace’s AFUE. 

Off-cycle dampers include: (1) electro-mechanical flue dampers, which are installed downstream of the heat exchanger, are activated by an external source of electricity, and open 

and close immediately when combustion starts and stops, (2) electro-mechanical burner 

inlet dampers, which are installed at the combustion-air inlet to the burner box and are designed to automatically close off the air passage and restrict the airflow through the heat exchanger when the burner is off. 

Direct Venting ..................................................... A direct venting system consists of a pipe that provides the burner with a direct connection to 

a combustion air source on the exterior of the building. This external connection allows the 

furnace to utilize outdoor air for combustion, which could result in an improvement in AFUE. 

Concentric Venting ............................................. Concentric venting is accomplished by running the inlet and exhaust vents concentrically. The 

flue gases are exhausted through a central vent pipe, and the intake combustion air passes 

through a concentric duct surrounding it. This arrangement creates a counter-flow heat exchanger that recovers some heat from the flue gases to preheat the combustion air. It provides an efficiency advantage compared to non-concentric venting systems, as the concentric vent essentially serves as a shell-in-tube heat exchanger to recover heat. 

Low-Pressure, Air-Atomized Oil Burner ............. To overcome the low input limitations of conventional oil burners, Brookhaven National Laboratory developed a low-pressure, air-atomized oil burner that can operate at firing rates as 

low as 0.25 gallons of oil per hour (10 kW). In addition, it can operate with low levels of excess combustion air (less than 10 percent) for lean-burning, ultra-clean combustion. A lower 

level of excess air generally improves AFUE rating. This single-stage burner design is also 

capable of firing fuel at high and low input rates, which are manually actuated by a switch, 

allowing it to closely match the smaller heating loads of well-insulated modern homes. The 

ability to derate the flame also greatly enhances the effectiveness of the heat exchanger, 

which improves steady-state efficiency. 


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TABLE IV.1—LIST OF TECHNOLOGY OPTIONS CONSIDERED FOR THIS FINAL DETERMINATION—Continued 

Technology option Description 

High-Static Oil Burner ......................................... A modification of the conventional flame retention head burner is the high-static pressure 

flame retention head oil burner. These burners employ an air guide to direct air onto the optimal point on the blower wheel and a scroll insert to create high static pressure in the combustion chamber while maintaining consistent airflow. This higher pressure enables the furnace to overcome restrictive flow passages in compact, more efficient heat exchangers. 

These types of burners are also able to operate at lower levels of excess air, giving them a 

nearly five-percent AFUE advantage over flame retention head burners. 

Delayed-Action Oil Pump Solenoid Valve .......... A delayed-action oil pump solenoid valve is installed between the oil pump and the burner 

nozzle to supplement the fuel pump regulator by delaying the fuel release by 3 to 6 seconds 

after the igniter and burner blower start until the oil pressure reaches the level required to 

fully discharge the oil into the combustion chamber without dripping. This ensures that the 

oil burns more completely. Testing at Brookhaven National Laboratory indicates that the typical efficiency benefit of delayed-action solenoid valves is expected to be less than one-percent AFUE. 

As detailed in section IV.A.5 of this 

document, for each technology option 

identified, DOE applies screening 

criteria before considering it further in 

the analysis. 

4. Screening Analysis 

As discussed, DOE conducts a 

screening analysis to evaluate whether 

to further consider each identified 

technology and design option. DOE uses 

the following five screening criteria to 

determine which technology options are 

suitable for further consideration in an 

energy conservation standards 

rulemaking: 

(1) Technological feasibility. 

Technologies that are not incorporated 

in commercially-available products or 

in commercially-viable, existing 

prototypes will not be considered 

further. 

(2) Practicability to manufacture, 

install, and service. If it is determined 

that mass production of a technology in 

commercially-available products and 

reliable installation and servicing of the 

technology could not be achieved on the 

scale necessary to serve the relevant 

market at the time of the projected 

compliance date of the standard, then 

that technology will not be considered 

further. 

(3) Impacts on product utility. If a 

technology is determined to have a 

significant adverse impact on the utility 

of the product to subgroups of 

consumers, or result in the 

unavailability of any covered product 

type with performance characteristics 

(including reliability), features, sizes, 

capacities, and volumes that are 

substantially the same as products 

generally available in the United States 

at the time, it will not be considered 

further. 

(4) Safety of technologies. If it is 

determined that a technology would 

have significant adverse impacts on 

health or safety, it will not be 

considered further. 

(5) Unique-pathway proprietary 

technologies. If a technology has 

proprietary protection and represents a 

unique pathway to achieving a given 

efficiency level, it will not be 

considered further, due to the potential 

for monopolistic concerns. 

See 10 CFR part 430, subpart C, 

appendix A, sections 6(b)(3) and 7(b). 

If DOE determines that a technology 

fails to meet one or more of these listed 

criteria, it is excluded from further 

consideration in the engineering 

analysis. The following sections include 

DOE’s evaluation of each technology 

option against the screening analysis 

criteria. 

a. Screened-Out Technologies 

Based on DOE’s research, DOE 

screened out the technology options on 

the basis of each screening criteria 

shown in Table IV.2 from further 

consideration as options to improve the 

AFUE (as measured by the DOE test 

procedure) of NWOFs, MHOFs, and 

WGFs. The reasons for exclusion 

associated with each technology are 

marked in the table with an X. 

Additional details about the reasons for 

exclusion are discussed in this section. 

TABLE IV.2—TECHNOLOGY OPTIONS SCREENED OUT

Excluded technology option Applicable product class(es) 

Screening criteria 

(X = basis for screening out) 

Technological 

feasibility 

Practicability 

to install, 

manufacture, 

and service 

Impacts on 

product utility 

or product 

availability 

Adverse 

impacts on 

health or 

safety 

Uniquepathway 

proprietary 

technologies 

Pulse combustion ....................................... WGF ............................................. ........................ ........................ ........................ X ........................

Burner derating ........................................... WGF, NWOF, MHOF ................... ........................ ........................ X ........................ ........................

Low-pressure, air-atomized oil burner ........ NWOF, MHOF ............................. X ........................ ........................ ........................ ........................

Pulse Combustion 

In contrast to natural draft and 

induced draft furnaces, pulse 

combustion furnaces generate positive 

pressure in the heat exchanger. 

Although these products are generally 

safe, this could create a potential safety 

problem if the heat exchanger breaches, 

because combustion products can 

contaminate the circulation airstream. 

Pulse combustion gas furnaces were 

available in the United States for more 

than two decades. However, they were 

withdrawn from the market within the 

past 20 years because manufacturers 

found that competing technologies, such 

as condensing secondary heat 

exchangers, cost significantly less to 

manufacture and operate. In light of the 

ability of furnace manufacturers to costeffectively achieve high efficiencies 

without the use of pulse combustion, 

the technology’s risks do not outweigh 

its benefits for consumer furnace 

applications. Accordingly, DOE did not 


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further analyze this technology option 

as part of this final determination. 

Burner Derating 

Because heat output rate is directly 

related to burner size, burner derating 

reduces the amount of heated air 

available to the consumer. This 

reduction in heat output rate adversely 

affects the utility to consumers. 

Therefore, DOE did not consider this 

technology option. 

Low-Pressure, Air-Atomized Oil Burner 

While tests performed at the 

Brookhaven National Laboratory seem 

to have successfully demonstrated 

enhanced AFUE performance under the 

DOE test procedure in oil boilers that 

employed prototype low-pressure airatomized burners, the prototype burner 

was never tested on a furnace. 

Therefore, the technological feasibility 

of the burner prototype for 

incorporation into a residential oil-fired 

furnace remains unknown, so DOE did 

not consider low-pressure, air-atomized 

oil burners to be a viable technology for 

efficiency improvement for this final 

determination. 

b. Remaining Technologies 

After a thorough review of each 

technology, DOE concludes that all of 

the remaining identified technologies 

not ‘‘screened out’’ meet all of the 

screening criteria. In summary, DOE 

retained (i.e., did not screen out) the 

technology options listed below: 

• Condensing secondary heat exchanger 

• Heat exchanger improvements 

• Two-stage and modulating 

combustion 

• Premix burners 

• Insulation improvements 

• Off-cycle dampers 

• Direct venting 

• Concentric venting 

• High-static oil burner 

• Delayed-action oil pump solenoid 

valve 

DOE determined that these 

technology options are technologically 

feasible because they are being used or 

have previously been used in 

commercially-available products or 

working prototypes. DOE also finds that 

all of the remaining technology options 

meet the other screening criteria (i.e., 

practicable to manufacture/install/ 

service; do not result in adverse impacts 

on product utility, product availability, 

health, or safety; and do not utilize 

unique-pathway proprietary 

technologies). DOE considers these 

remaining technology options as the 

basis for higher efficiency levels that 

DOE could consider for potential 

amended standards. 

5. Impact From Other Rulemakings 

Lennox commented that 

manufacturers are facing unprecedented 

regulatory change elsewhere and 

significant cumulative regulatory 

burdens, which further supports DOE’s 

determination not to increase the AFUE 

efficiency standards and not to increase 

standby and off mode standards for oil, 

electric, and weatherized gas consumer 

furnaces. (Lennox, No. 32 at pp. 3–4) 

Lennox stated that the related 

rulemakings include the EPA 

phasedown to lower-global warming 

potential (‘‘GWP’’) refrigerants, the 

energy conservation standards final rule 

for NWGFs/MHGFs, the National and 

Regional Cold Climate Heat Pump 

Specifications, the DOE energy 

conservation standards for air-cooled, 

three-phase air conditioners and heat 

pumps below 65,000 Btu/h and aircooled, three-phase, variable refrigerant 

flow (‘‘VRF’’) air conditioners and heat 

pumps below 65,000 Btu/h, the DOE 

test procedure for VRF systems, and the 

EPA ENERGY STAR 4.0 for Light 

Commercial Heating, Ventilation, and 

Air Conditioning (‘‘HVAC’’). (Id. at p. 4) 

AHRI commented that most of the 

consumer furnace market (i.e., NWGFs) 

is obligated to increase efficiency to 95- 

percent AFUE by December 2028, which 

is one step below max-tech and which 

is expected to place a significant 

economic burden on the industry. 

(AHRI, No. 36 at p. 2) 

In response, DOE notes that the 

Department is not amending the energy 

conservation standards for oil, electric, 

and weatherized gas consumer furnaces, 

and, therefore, it does not expect this 

rulemaking to contribute to the 

cumulative regulatory burden on 

manufacturers. 

B. Engineering and Cost Analysis 

The purpose of the engineering 

analysis is to establish the relationship 

between the efficiency and 

manufacturer production cost (‘‘MPC’’) 

of the subject products (i.e., NWOFs, 

MHOFs, and WGFs). There are two 

elements to consider in the engineering 

analysis: (1) the selection of efficiency 

levels to analyze (i.e., the ‘‘efficiency 

analysis’’), and (2) the determination of 

product cost at each efficiency level 

(i.e., the ‘‘cost analysis’’). In determining 

the performance of higher-efficiency 

products, DOE considers those 

technologies and design option 

combinations not eliminated by the 

screening analysis. For each product 

class, DOE estimates the baseline cost, 

as well as the incremental cost for the 

product at efficiency levels above the 

baseline. The output of the engineering 

analysis is a set of cost-efficiency 

‘‘curves’’ that are used in downstream 

analyses (i.e., the LCC and PBP analyses 

and the NIA). 

DOE recently conducted an 

engineering analysis to determine the 

cost-efficiency relationship for oil and 

weatherized gas consumer furnaced for 

the November 2023 NOPD. 88 FR 83426, 

83439–83446 (Nov. 29, 2023). For this 

final determination, DOE analyzed cost 

trends across the consumer oil and 

weatherized gas furnace market as part 

of the market and technology 

assessment (see section IV.A of this 

document) and found that oil and 

weatherized gas consumer furnace 

efficiencies have not changed 

substantially since the NOPD analysis. 

Thus, as discussed in section IV.B.1 of 

this document, DOE maintained the 

efficiency levels from the November 

2023 NOPD in the final determination 

analysis. Additionally, DOE examined 

its most recent inputs to its 

manufacturing cost analysis (e.g., raw 

material prices, component prices, labor 

rates) and found that, although MPC 

values for each efficiency level may 

have increased, the incremental MPCs 

would not significantly change from 

those in the November 2023 NOPD. 

Therefore, DOE concludes that an 

updated cost analysis would not impact 

the results of this final determination, so 

the Department is using the same 

methodology and analytical results as 

those described in the November 2023 

NOPD engineering and cost analysis. 

Further information on this analytical 

methodology used in the November 

2023 NOPD is presented in the 

following subsections. 

1. Efficiency Analysis 

DOE typically uses one of two 

approaches to develop energy efficiency 

levels for the engineering analysis: (1) 

relying on observed efficiency levels in 

the market (i.e., the efficiency-level 

approach), or (2) determining the 

incremental efficiency improvements 

associated with incorporating specific 

design options to a baseline model (i.e., 

the design-option approach). Using the 

efficiency-level approach, the efficiency 

levels established for the analysis are 

determined based on the market 

distribution of existing products (in 

other words, based on the range of 

efficiencies and efficiency level 

‘‘clusters’’ that already exist on the 

market). Using the design-option 

approach, the efficiency levels 

established for the analysis are 

determined through detailed 

engineering calculations and/or 

computer simulations of the efficiency 

improvements from implementing 


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specific design options that have been 

identified in the technology assessment. 

DOE may also rely on a combination of 

these two approaches. For example, the 

efficiency-level approach (based on 

actual products on the market) may be 

extended using the design-option 

approach to interpolate to define ‘‘gap 

fill’’ levels (to bridge large gaps between 

other identified efficiency levels) and/or 

to extrapolate to the ‘‘max-tech’’ level 

(particularly in cases where the ‘‘maxtech’’ level exceeds the maximum 

efficiency level currently available on 

the market). For this final determination 

analysis, DOE used the efficiency-level 

approach. 

a. Baseline Efficiency 

For each product class, DOE generally 

selects a baseline model as a reference 

point for each class, and measures 

anticipated changes to the product 

resulting from potential energy 

conservation standards against the 

baseline model. The baseline model in 

each product class represents the 

characteristics of products typical of 

that class (e.g., capacity, physical size). 

Generally, a baseline model is one that 

just meets current energy conservation 

standards, or, if no standards are in 

place, the baseline is typically the most 

common or least-efficient unit on the 

market. 

A basic consumer gas furnace 

comprises a hot surface or direct spark 

ignition system, tubular in-shot burners, 

a noncondensing heat exchanger, a 

blower assembly (including motor and 

forward-swept fan blade), a mechanical 

draft combustion fan assembly, and 

automatic controls. A basic consumer 

oil-fired furnace comprises an 

interrupted spark ignition system, 

power burner, noncondensing heat 

exchanger, and blower assembly. Details 

and descriptions of each of these 

components can be found in chapter 3 

of the November 2022 Preliminary 

Analysis TSD. 

The identification of baseline units 

requires establishing the baseline 

efficiency level. In cases where there is 

an existing standard, DOE typically 

defines ‘‘baseline units’’ as units with 

efficiencies equal to the current Federal 

energy conservation standards. 

However, for the MHOF product class, 

DOE did not identify any currently 

available units at the minimum standard 

level (75-percent AFUE), and, therefore, 

DOE analyzed 80-percent AFUE as the 

baseline level for MHOFs, as it was the 

lowest efficiency available on the 

market. 

In the November 2023 NOPD, DOE 

used the baseline levels presented in 

Table IV.3 as the baseline efficiency 

AFUE levels for oil, electric, and 

weatherized gas furnaces, along with the 

typical characteristics of a baseline unit. 

TABLE IV.3—BASELINE EFFICIENCY LEVELS

Product class 

Baseline 

AFUE level 

(%) 

Typical characteristics 

NWOF ....................................................... 83 —Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel heat exchanger. 

—Indoor blower fan including PSC motor * and forward-curved blower impeller 

blade. 

MHOF ....................................................... 80 —Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel heat exchanger. 

—Indoor blower fan including PSC motor * and forward-curved blower impeller 

blade. 

—Direct venting system. 

—Built-in evaporator coil cabinet. 

WGF .......................................................... 81 —Draft inducer. 

—Single-stage burner. 

—Electronic ignition. 

—Aluminized-steel tubular heat exchanger. 

—Indoor blower fan including BPM * motor and forward-curved blower impeller 

blade. 

* Consumer furnace fans incorporated into NWOFs, MHOFs, and WGFs manufactured on and after July 3, 2019 must meet fan energy rating 

(‘‘FER’’) standards specified in 10 CFR 430.32(y). The blower fan motor (among other factors) can affect FER. Brushless permanent magnet 

(‘‘BPM’’) motors have become the predominant motor type at the baseline AFUE levels for WGFs, and permanent split capacitor (‘‘PSC’’) motors, 

which are less efficient than BPM motors, are common for NWOFs and MHOFs. 

Typically, baseline units are 

representative of the minimum 

technology and lowest-cost product that 

manufacturers can produce. 

Accordingly, in the teardown analysis, 

DOE examined a variety of baseline 

units that incorporate the various 

baseline design options for furnace 

components. 

As stated previously, for this final 

determination, DOE used the baseline 

efficiency levels as presented in the 

November 2023 NOPD. 

b. Intermediate Efficiency Levels 

In the November 2023 NOPD, DOE 

also analyzed intermediate efficiency 

levels for NWOFs and MHOFs. 88 FR 

83426, 83440–83441 (Nov. 29, 2023). 

However, for WGFs, DOE did not find 

any models on the market between the 

baseline (81-percent AFUE) and maxtech level (95-percent AFUE) and, 

therefore, did not analyze any 

intermediate efficiency levels for this 

product class. The intermediate 

efficiency levels analyzed for NWOFs 

were 85-percent and 87-percent AFUE, 

and the intermediate efficiency levels 

analyzed for MHOFs were 83-percent 

and 85-percent AFUE. To improve 

efficiency from the baseline to these 

intermediate efficiency levels, 

manufacturers generally increase the 

surface area of the heat exchanger, 

which increases the heat transfer area 

and, thus, allows manufacturers to 

achieve higher efficiencies. The 

intermediate efficiency levels analyzed 

were representative of common 

efficiency levels available on the 

market. DOE reviewed its own 

Compliance Certification Database 

(‘‘CCD’’), as well as AHRI’s product 


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19AHRI’s Directory of Certified Product 

Performance (Available at: www.ahridirectory.org/ 

Search/SearchHome) (last accessed May 6, 2024). 

20California Energy Commission’s MAEDbs 

(Available at: cacertappliances.energy.ca.gov/ 

Pages/Search/AdvancedSearch.aspx) (last accessed 

May 6, 2024). 

certification directories,19 California 

Energy Commission’s database,20

manufacturer catalogs, and other 

publicly-available literature to inform 

its selection of intermediate efficiency 

levels. 

As stated previously, for this final 

determination, DOE used the 

intermediate efficiency levels as 

presented in the November 2023 NOPD. 

c. Maximum Technology (‘‘Max-Tech’’) 

Efficiency Levels 

As noted, EPCA requires that any new 

or amended energy conservation 

standard be designed to achieve the 

maximum improvement in energy 

efficiency that is technologically 

feasible. (42 U.S.C. 6295(o)(2)(A)) As 

part of its analysis, DOE identifies the 

‘‘maximum available’’ efficiency level, 

representing the highest efficiency unit 

currently available on the market. DOE 

also defines a ‘‘max-tech’’ efficiency 

level, representing the maximum 

theoretical efficiency that can be 

achieved through the application of all 

available technology options retained 

from the screening analysis. In many 

cases, the max-tech efficiency level is 

not commercially available because it is 

not currently economically feasible. 

In the November 2023 NOPD, DOE 

conducted an analysis of the market and 

a technology assessment and researched 

current product offerings to determine 

the max-tech efficiency levels. 88 FR 

83426, 83441 (Nov. 29, 2023). The maxtech level identified in each product 

class corresponded to the highest-AFUE 

furnace available on the market, which 

DOE found to correspond to the 

maximum technologically feasible 

levels at this time. For NWOFs, DOE 

identified a design that achieves a maxtech efficiency level of 96-percent 

AFUE. For MHOFs, the maximum 

efficiency level that DOE identified was 

87-percent AFUE. For WGFs, DOE 

identified a max-tech efficiency level 

design that achieves 95-percent AFUE. 

For WGFs and NWOFs, the max-tech 

efficiency level is currently achieved by 

use of a condensing secondary heat 

exchanger. A constant-airflow BPM 

(‘‘CA–BPM’’) indoor blower motor was 

also implemented as the motor design 

option for the max-tech efficiency level 

for NWOFs, because the only NWOF 

model on the market available at this 

level includes a CA–BPM motor, and it 

was unclear if this level is achievable 

without using a CA–BPM fan motor. For 

MHOFs, the max-tech efficiency level is 

currently achieved by use of a heat 

exchanger with increased surface area. 

As stated previously, for this final 

determination, DOE used the max-tech 

efficiency levels as presented in the 

November 2023 NOPD. 

d. Summary of Efficiency Levels 

Analyzed 

The AFUE efficiency levels analyzed 

along with the technologies that are 

expected to be used to increase energy 

efficiency above the baseline efficiency 

level for NWOFs, MHOFs, and WGFs 

are presented in Table IV.4, Table IV.5, 

and Table IV.6, respectively. 

TABLE IV.4—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

NWOFS

Efficiency level AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 83 See Table IV.3 for baseline features. 

1 ................................................................ 85 Baseline EL + Increased heat exchanger area. 

2 ................................................................ 87 EL 1 + Increased heat exchanger area. 

3—Max-tech .............................................. 96 EL 2 + Addition of condensing secondary heat exchanger (and associated components, sensors, etc.) + CA–BPM motor. 

TABLE IV.5—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

MHOFS

Efficiency level AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 80 See Table IV.3 for baseline features. 

1 ................................................................ 83 Baseline EL + Increased heat exchanger area. 

2 ................................................................ 85 EL 1 + Increased heat exchanger area. 

3—Max-tech .............................................. 87 EL 2 + Increased heat exchanger area. 

TABLE IV.6—AFUE EFFICIENCY LEVELS AND TECHNOLOGIES USED AT EACH EFFICIENCY LEVEL ABOVE BASELINE FOR

WGFS

Efficiency level AFUE 

(%) Description of technologies typically incorporated 

0—Baseline ............................................... 81 See Table IV.3 for baseline features. 

1—Max-tech .............................................. 95 Baseline EL + Addition of condensing secondary heat exchanger (and associated 

components, sensors, etc.). 

2. Cost Analysis 

The cost analysis portion of the 

engineering analysis is conducted using 

one or a combination of cost 

approaches. The selection of cost 

approach depends on a suite of factors, 

including the availability and reliability 

of public information, characteristics of 

the regulated product, and the 

availability and timeliness of 

purchasing the product on the market. 


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The cost approaches generally used by 

DOE are summarized as follows: 

b Physical teardowns: Under this 

approach, DOE physically dismantles 

commercially-available products, 

component-by-component, to develop a 

detailed bill of materials for the 

products. 

b Catalog teardowns: In lieu of 

physically deconstructing products, 

DOE identifies each component using 

parts diagrams (available from 

manufacturer websites or appliance 

repair websites, for example) to develop 

the bill of materials for the product. 

b Price surveys: If neither a physical 

nor a catalog teardown is feasible (e.g., 

for tightly integrated products such as 

fluorescent lamps, which are infeasible 

to disassemble and for which parts 

diagrams are unavailable), costprohibitive, or otherwise impractical 

(e.g., large commercial boilers), DOE 

conducts price surveys using publiclyavailable pricing data published on 

major online retailer websites and/or by 

soliciting prices from distributors and 

other commercial channels. 

In the November 2023 NOPD, DOE 

conducted the cost analysis using a 

combination of physical and catalog 

teardowns. 88 FR 83426, 83443 (Nov. 

29, 2023). DOE estimated the MPC 

associated with each efficiency level to 

characterize the cost-efficiency 

relationship of improving consumer 

furnace performance, in terms of AFUE. 

The units selected for the teardown 

analysis for the November 2023 NOPD 

and used in this final determination 

spanned a range of manufacturers and 

efficiencies for commercially-available 

products that are the subject of this 

rulemaking. Products were selected that 

have characteristics of typical products 

on the market at a representative input 

capacity. Based on information gathered 

as part of the market and technology 

assessment (see section IV.A of this 

document), as well as discussions with 

manufacturers, DOE determined that 80 

kBtu/h and 105 kBtu/h were 

representative input capacities for 

WGFs and oil furnaces, respectively. 

Where possible, DOE selected 

teardowns at those representative 

capacities. Where needed, catalog 

teardowns were also conducted to 

supplement the physical teardowns. 

DOE estimated the manufacturing cost 

for each furnace selected for teardown 

by disassembling the furnace and 

developing a bill of materials (‘‘BOM’’). 

The resulting BOM provides the basis 

for the MPC estimates for products at 

various efficiency levels spanning the 

full range of efficiencies from the 

baseline to max-tech. 

To account for manufacturers’ nonproduction costs and profit margin, DOE 

applies a non-production cost multiplier 

(the manufacturer markup) to the MPC. 

The resulting manufacturer selling price 

(‘‘MSP’’) is the price at which the 

manufacturer distributes a unit into 

commerce. DOE developed an average 

manufacturer markup by examining the 

annual Securities and Exchange 

Commission (‘‘SEC’’) 10–K reports filed 

by publicly-traded manufacturers 

primarily engaged in HVAC 

manufacturing whose combined product 

range includes oil and weatherized gas 

furnaces. The manufacturer markup 

estimates are consistent with the 

manufacturer markups developed for a 

final rule for furnace fan energy 

conservation standards published in the 

Federal Register on July 3, 2014. 79 FR 

38130. Specifically, DOE estimates the 

industry average manufacturer markup 

to be 1.35 for NWOFs, 1.29 for MHOFs, 

and 1.27 for WGFs. 

In this final determination, DOE used 

the same cost analysis as in the 

November 2023 NOPD. 

a. Teardown Analysis 

For the November 2023 NOPD 

teardown analysis, DOE used a total of 

31 teardowns of consumer furnaces as 

the basis for calculating industry MPCs. 

The units DOE selected for teardown are 

manufactured in considerable volume, 

are commonly available, and have 

features that DOE believes are 

representative of the most common 

characteristics (i.e., input capacity, 

configuration, and heat exchanger type) 

of each product class. As discussed 

previously, most physical teardown 

units had input capacities of 

approximately 80 kBtu/h for WGFs or 

105 kBtu/h for NWOFs and MHOFs, 

which DOE considers to be 

representative of those furnace product 

classes. For units that were not at the 

representative capacity, an adjustment 

was developed to normalize all units to 

the representative capacity. To the 

extent possible, all major efficiency 

levels and technologies were captured 

in the selection of models for the 

teardown analysis. WGF and oil furnace 

teardowns were considered separately. 

Whenever possible, DOE examined 

multiple models from a given 

manufacturer that capture different 

design options and used them as direct 

points of comparison. The teardown 

selections also minimized the 

incorporation of non-efficiency-related 

premium features, which otherwise 

could inflate the incremental 

manufacturing cost of achieving higher 

efficiency levels. 

For the November 2023 NOPD, DOE 

examined products with a variety of 

indoor blower motor technologies and 

combustion systems (i.e., single-stage, 

two-stage, or modulating). DOE also 

examined products with PSC, constanttorque BPM (‘‘CT–BPM’’), and CA–BPM 

indoor blower motors. As further 

discussed in section IV.B.2.b of this 

document, DOE determined the cost of 

including these technologies and 

applied the costs in the downstream 

analyses to estimate the manufacturing 

cost of going from one technology to 

another with higher efficiency (e.g., 

using a CA–BPM instead of a CT–BPM, 

or two-stage combustion instead of 

single-stage combustion). Although such 

changes are not necessarily required due 

to changes in the AFUE level, DOE 

included these costs to better reflect the 

products available on the market such 

that it represents the products expected 

to be available in a scenario where the 

standard were set at that level. 

Due to the similarity observed in 

NWOF and MHOF designs available in 

the market, DOE has found that the 

costs associated with increasing the 

energy efficiency of MHOFs are 

equivalent to the costs for NWOFs. A 

MHOF teardown was used to examine 

key differences between NWOFs and 

MHOFs and confirmed that the MPCs of 

MHOFs could be estimated based on the 

NWOF teardowns. Therefore, in the 

November 2023 NOPD, DOE based MPC 

estimates for MHOFs at each efficiency 

level analyzed largely on teardowns of 

NWOFs at that efficiency level by 

determining the differences between the 

NWOF and MHOF product classes and 

estimating the costs associated with 

those differences. 

b. Cost Estimation Method 

In the November 2023 NOPD, DOE 

assigned costs of labor, materials, and 

overhead to each part, whether 

purchased or produced in-house. DOE 

then aggregated single-part costs into 

major assemblies (e.g., packaging, 

cabinet assembly, heat exchanger, 

burner system/gas train, exhaust 

subassembly, fan system, controls) and 

summarized these costs in a spreadsheet 

BOM. DOE repeated this same process 

for every physical and catalog teardown 

in the engineering analysis. 

Analytical inputs related to 

manufacturer practices and cost 

structure play an important role in 

estimating the final cost of a product. 

DOE used inputs regarding the 

manufacturing process parameters (e.g., 

equipment use, labor rates, tooling 

depreciation, and cost of purchased raw 

materials) to determine the value for 

each furnace component. DOE collected 


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21For more information on MEPS International, 

please visit www.meps.co.uk/ (last accessed April 

15, 2024). 

22For more information on PolymerUpdate, 

please visit www.polymerupdate.com (last accessed 

May 9, 2024). 

23For more information on the USGS metal price 

statistics, please visit www.usgs.gov/centers/nmic/ 

commodity-statistics-and-information (last accessed 

May 9, 2024). 

24For more information on the BLS producer 

price indices, please visit www.bls.gov/ppi/ (last 

accessed May 9, 2024). 

information on labor rates, tooling costs, 

raw material prices, and other factors to 

use as inputs into the cost estimates. 

DOE determined values for these 

parameters using internal expertise and 

confidential information available to its 

contractors, some of which was 

obtained via confidential interviews 

with manufacturers. For purchased 

parts, DOE estimated the purchase price 

based on volume-variable price 

quotations and detailed discussions 

with manufacturers and component 

suppliers. DOE then summed the values 

of the furnace components into 

assembly costs and, finally, the total 

MPC for the entire furnace. 

The MPC includes material, labor, 

and depreciation costs, as well as the 

overhead costs associated with the 

manufacturing facility. Material costs 

include both raw materials and 

purchased-part costs. Labor costs 

include fabrication, assembly, and 

indirect and overhead (burdened) labor 

rates. Depreciation costs include 

production equipment depreciation, 

tooling depreciation, and building 

depreciation. The overhead costs 

associated with the manufacturing 

facility include indirect process costs, 

utilities, equipment and building 

maintenance, and reworking of 

defective parts/units. 

DOE determined the costs of raw 

materials based on manufacturer 

interviews, quotes from suppliers, and 

secondary research. Past results are 

updated periodically and/or inflated to 

present-day prices using indices from 

resources such as MEPS International,21

PolymerUpdate,22 the U.S. Geologic 

Survey (‘‘USGS’’),23 and the U.S. Bureau 

of Labor Statistics (‘‘BLS’’).24 Raw 

material prices for metals, such as those 

of stainless steel and other sheet metals, 

are estimated on the basis of five-year 

averages to smooth out spikes in 

demand. For other ‘‘raw’’ materials such 

as plastic resins, insulation materials, 

etc., DOE used prices based on current 

market data (as of December 2022) 

rather than a five-year average, because 

non-metal raw materials have not 

experienced the same level of price 

volatility in recent years as metal raw 

materials. 

DOE characterized parts based on 

whether manufacturers fabricated them 

in-house or purchased them from 

outside suppliers. For fabricated parts, 

DOE estimated the price of intermediate 

materials (e.g., tube, sheet metal) and 

the cost of forming them into finished 

parts. For purchased parts, DOE 

estimated the purchase prices paid to 

the original equipment manufacturers 

(‘‘OEMs’’) of these parts, based on 

discussions with manufacturers during 

confidential interviews. Whenever 

possible, DOE obtained price quotes 

directly from the component suppliers 

used by furnace manufacturers whose 

products were examined in the 

engineering analysis. DOE determined 

that the components in Table IV.7 are 

generally purchased from outside 

suppliers. 

TABLE IV.7—PURCHASED FURNACE

COMPONENTS

Assembly Purchased subassemblies 

Burner/Exhaust ..... Gas valve. 

Spark igniter. 

Draft inducer assembly. 

Blower ................... Indoor blower fan blade. 

Indoor blower fan motor. 

Controls ................ Control boards. 

Capacitors, transformers, 

contactors, switches, etc. 

Certain factory parameters, such as 

fabrication rates, labor rates, and wages, 

also affect the cost of each unit 

produced. DOE factory parameter 

assumptions were based on internal 

expertise and manufacturer feedback. 

Table IV.8 lists the factory parameter 

assumptions used in the analysis. For 

the engineering analysis, these factory 

parameters, including production 

volume, are the same at every efficiency 

level. The production volume used at 

each efficiency level corresponds with 

the average production volume, per 

manufacturer, if 100 percent of all units 

manufactured were at that efficiency 

level. This production volume was 

estimated based on historical 

shipments. These assumptions are 

generalized to represent typical 

production and are not intended to 

model a specific factory. 

TABLE IV.8—FACTORY PARAMETER ASSUMPTIONS

Parameter Oil furnace estimate WGF estimate 

Actual Annual Production Volume (units/year) ............................................................................ 5,000 units/year .......... 500,000 units/year. 

Purchased Parts Volume .............................................................................................................. 5,000 units/year .......... 100,000 units/year. 

Workdays Per Year (days) ........................................................................................................... 250 .............................. 250. 

Assembly Shifts Per Day (shifts) .................................................................................................. 1 .................................. 2. 

Fabrication Shifts Per Day (shifts) ................................................................................................ 2 .................................. 2. 

Fabrication Labor Wages ($/h) ..................................................................................................... 16 ................................ 16. 

Assembly Labor Wages ($/h) ....................................................................................................... 16 ................................ 16. 

Length of Shift (h) ......................................................................................................................... 8 .................................. 8. 

Average Equipment Installation Cost (% of purchase price) ....................................................... 10% ............................. 10%. 

Fringe Benefits Ratio .................................................................................................................... 50% ............................. 50%. 

Indirect to Direct Labor Ratio ....................................................................................................... 33% ............................. 33%. 

Average Scrap Recovery Value ................................................................................................... 30% ............................. 30%. 

Worker Downtime ......................................................................................................................... 10% ............................. 10%. 

Burdened Assembly Labor Wage ($/h) ........................................................................................ 24 ................................ 24. 

Burdened Fabrication Labor Wage ($/h) ...................................................................................... 24 ................................ 24. 

Supervisor Span (workers/supervisor) ......................................................................................... 25/1 ............................. 25/1. 

Supervisor Wage Premium (over fabrication and assembly wage) ............................................. 30% ............................. 30%. 


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25Rule 1111 of the South Coast Air Quality 

Management District of Southern California 

currently requires that all NWGFs and MHGFs not 

exceed a 14 ng/J restriction on NOX emissions. For 

more information on Rule 1111, see 

www.aqmd.gov/docs/default-source/rule-book/regxi/rule-1111.pdf?sfvrsn=4 (last accessed June 28, 

2024). 

26U.S. Environmental Protection Agency, Natural 

Gas Combustion (available at www3.epa.gov/ 

ttnchie1/ap42/ch01/final/c01s04.pdf) (last accessed 

June 28, 2024). 

Indoor Blower Motor Costs 

As discussed in section IV.B.1.a of 

this document, the baseline design for 

WGFs includes a BPM motor. DOE 

research suggests that the predominant 

BPM indoor blower motors sold on the 

market today are either a CT–BPM or a 

CA–BPM design. Both types of motors 

rely on electronic variable-speed motor 

systems that are typically mounted in an 

external chassis to the back of the 

motor. CA–BPM motors utilize feedback 

control to adjust torque based on 

external static pressure (‘‘ESP’’) in order 

to maintain a desired airflow. This 

differentiates them from CT–BPM 

motors, which will maintain torque and 

likely decrease airflow output in 

environments with high ESPs. CT– 

BPMs are capable of achieving airflows 

similar to CA–BPMs but are generally 

less expensive. Therefore, for the 

November 2023 NOPD, DOE considered 

the baseline design to include a CT– 

BPM motor for the WGF product class 

and determined the incremental cost of 

a CA–BPM motor. 

DOE’s review of the market for the 

November 2023 NOPD showed that PSC 

motors are still being used in some 

NWOFs and MHOFs, so the final MPC 

results are presented based on a PSC 

motor at the baseline through 87-percent 

AFUE. To account for the variety of 

motor technologies available on the 

market, DOE determined the 

incremental cost associated with use of 

various types of more-efficient BPM fan 

motors as compared to baseline PSC 

motors for NWOFs and MHOFs. 

Additionally, for NWOFs, a CA–BPM 

indoor blower motor was implemented 

as the motor design option for the maxtech efficiency level because the only 

NWOF model on the market available at 

this level includes a CA–BPM motor, 

and it is unclear if this level is 

achievable without a constant-airflow 

fan. For the NWOF efficiency levels 

below max-tech and for all MHOF 

efficiency levels, DOE calculated the 

additional cost to switch from a PSC 

blower motor to either a CT–BPM motor 

or a CA–BPM motor. As discussed in 

Chapter 8 of the November 2022 

Preliminary Analysis TSD, these costs 

are applied in the LCC and PBP analyses 

to determine the MPC of a furnace with 

each motor technology in order to better 

represent typical costs to consumers for 

NWOFs and MHOFs. CA–BPM blower 

motors are sometimes used as a utilityenhancing feature on units below the 

max-tech efficiency level. The 

incremental cost increases for using CT– 

BPM or CA–BPM motors, as compared 

to PSC motors, are outlined in Table 

IV.9. 

TABLE IV.9—COST INCREASES FOR BPM BLOWER MOTORS AS COMPARED TO PSC MOTORS

Product class Input capacity 

(kBtu/h) 

Incremental cost 

increase for 

CT–BPM 

(2022$) 

Incremental cost 

increase for 

CA–BPM 

(2022$) 

NWOF, MHOF ............................................................................................................. 105 $30.65 $80.48 

WGF ............................................................................................................................. 80 37.94 59.92 

Multi-Stage Furnaces 

As explained in the November 2023 

NOPD (see 88 FR 83426, 83445 (Nov. 

29, 2023)), the market for WGFs 

contains a significant number of twostage furnaces that are rated at the same 

efficiency as single-stage furnaces. DOE 

believes consumers sometimes choose 

to purchase two-stage products for the 

additional thermal comfort offered by 

furnaces with multiple stages of heating 

output. As such, in order to better 

represent typical costs to consumers, 

DOE analyzed the cost of multiple 

burner stages for WGFs. DOE 

determined that oil units with multistaging were rare and, thus, not 

representative of the market, so DOE did 

not analyze the cost of multiple stages 

for the NWOF and MHOF product 

classes. Where applicable, the 

additional cost to change to a two-stage 

furnace includes the added cost of a 

two-stage gas valve, a two-speed inducer 

assembly, an additional pressure switch, 

and additional controls and wiring. The 

additional cost to change to a 

modulating furnace includes the added 

cost of a modulating gas valve, an 

inducer assembly, an upgraded pressure 

switch, and additional controls and 

wiring. The incremental costs to 

implement multi-staging in WGFs are 

outlined in Table IV.10 

TABLE IV.10—MULTI-STAGE BURNER

INCREMENTAL COST INCREASE AS

COMPARED TO SINGLE-STAGE

BURNER

Adder 

Incremental cost 

increase for 

multi-stage 

burners 

(2022$) 

Two-Stage .................... $21.07 

Modulating .................... 75.36 

Low-NOX and Ultralow-NOX Furnaces 

Some furnaces are marketed as ‘‘lowNOX,’’ which indicates that their NOX

emissions are less than 40 nanograms of 

NOX per joule of useful heat energy 

(‘‘ng/J’’). Certain local jurisdictions 

require natural gas furnaces to comply 

with NOX emissions restrictions as low 

as 14 ng/J,25 which is referred to as 

‘‘ultralow-NOX.’’ A common method of 

reducing furnace NOX emissions is to 

slightly delay the natural gas 

combustion process, which in turn 

produces a cooler flame and results in 

suppressed formation of NOX.26 DOE 

has observed during its teardown 

analysis that to achieve low-NOX

operation, manufacturers implement 

low-NOX baffles. For ultralow-NOX

operation, DOE used NWGF teardowns 

to approximate the cost to implement 

this technology option in WGFs, as DOE 

understands that the methodology 

would be the same for both product 

classes. Through these teardowns of 

NWGFs, DOE has observed that in order 

to achieve ultralow-NOX operation, the 

in-shot burners typically used in 

residential furnaces were replaced with 

a mesh premix burner. In addition, the 

model used a variable-speed BPM 

inducer fan motor. DOE identified an 

ultralow-NOX WGF on the market and 

compared the burner construction for 

the torn-down NWGF and the ultralowNOX WGF. DOE found that the 

approach used for achieving ultralowNOX in WGFs is similar to that used in 

NWGFs. DOE also determined that oil 

units with ultralow-NOX operation were 

rare and, thus, not representative of the 

market, so the Department did not 


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27U.S. Department of Labor, Bureau of Labor 

Statistics, Producer Price Indices (available at: 

data.bls.gov/timeseries/WPU057303?data_

tool=XGtable) (last accessed June 28, 2024). 

analyze the cost of ultralow-NOX for the 

NWOF and MHOF product classes. 

Using raw material price data, 

teardown data from NWGFs, and 

manufacturing expertise, DOE estimated 

the manufacturing cost difference 

between standard NOX burners and lowNOX and ultralow-NOX burners. For 

low-NOX, MPC cost values were 

developed for the implementation of 

low-NOX baffles in WGFs at the 

representative input capacity of 80 

kBtu/h. For ultralow-NOX, MPC values 

were developed for the implementation 

of a mesh premix burner and variablespeed BPM inducer fan (along with 

other related components necessary). 

The resulting MPC estimates to achieve 

low-NOX and ultralow-NOX operation 

are shown in Table IV.11. 

In the LCC and PBP analyses (see 

section IV.E of this document), DOE 

estimated the fractions of furnaces that 

are installed in jurisdictions that require 

low-NOX or ultralow-NOX compliance 

and applied these cost adders to those 

fractions of furnace installations 

accordingly. The application of these 

adders is discussed in more detail in 

Chapter 8 of the November 2022 

Preliminary Analysis TSD. 

TABLE IV.11—INCREASE IN MPCS FOR

LOW-NOX AND ULTRALOW-NOX WGFS

Adder Value 

(2022$) 

Low-NOX ............................... $3.10 

Ultralow-NOX ........................ 113.68 

Shipping Cost 

Freight is not a manufacturing cost, 

but because it is a substantial cost 

incurred by the manufacturer, DOE 

accounts for shipping costs separately 

from other costs. For the November 

2023 NOPD, DOE calculated shipping 

costs based on a typical 53-foot straightframe trailer with a storage volume of 

4,240 cubic feet. 

DOE first calculated the cost per cubic 

foot of space on a trailer based on a cost 

of $3,643 per shipping load and the 

standard dimensions of a 53-foot trailer. 

This cost was determined based on a 

combination of full truck load freight 

quotations, manufacturer feedback, and 

BLS producer price indices for the 

‘‘fuels and related products and power’’ 

grouping.27 Then, DOE examined the 

average sizes of products in each 

product class at each efficiency and 

capacity combination analyzed. DOE 

estimated the shipping costs by 

multiplying the product volume by the 

cost per cubic foot of space on the 

trailer. Furnace dimensions typically do 

not change as a result of increases in 

efficiency, and accordingly, DOE’s 

shipping costs show no change across 

efficiency levels. In determining 

volumetric shipping costs, DOE also 

used manufacturer feedback regarding 

product mix on each trailer, packing 

efficiency, and methods and equipment 

used to load the trailers to revise the 

shipping costs. Table IV.12 shows the 

shipping costs for the products analyzed 

in this rulemaking. 

TABLE IV.12—SHIPPING COSTS PER UNIT

Product class 

Representative 

capacity 

(kBtu/h) 

Per-unit 

shipping cost 

(2022$) 

WGF ................................................................................................................................................................. 80 $55.69 

NWOF .............................................................................................................................................................. 105 19.92 

MHOF .............................................................................................................................................................. 105 19.92 

3. Cost-Efficiency Results 

The results of the engineering analysis 

are reported as cost-efficiency 

relationships (or ‘‘curves’’) in the form 

of aggregated MPCs for each product 

class. The final results of the AFUE 

engineering analysis are the MPCs for 

WGFs, NWOFs, and MHOFs at each 

efficiency level. The cost-efficiency 

results are shown in tabular form in 

Table IV.13 through Table IV.15 as 

efficiency versus MPC and MSP. These 

results include the furnace fan and 

combustion system staging incorporated 

into most furnace designs. 

TABLE IV.13—COST-EFFICIENCY DATA

FOR WGFS WITH A CONSTANTTORQUE BPM INDOOR BLOWER

MOTOR AND A SINGLE-STAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

81 .............. $1,412.32 $1,793.65 

95 .............. 1,505.40 1,911.85 

TABLE IV.14—COST-EFFICIENCY DATA

FOR NWOFS WITH A PSC INDOOR

BLOWER MOTOR AND A SINGLESTAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

83 .............. $700.73 $945.98 

85 .............. 730.94 986.77 

87 .............. 761.16 1,027.57 

96 .............. 1,334.85 1,802.05 

TABLE IV.15—COST-EFFICIENCY DATA

FOR MHOFS WITH A PSC INDOOR

BLOWER MOTOR AND A SINGLESTAGE BURNER

AFUE MPC 

(2022$) 

MSP 

(2022$) 

80 .............. $664.47 $857.16 

83 .............. 709.79 915.63 

85 .............. 740.01 954.61 

87 .............. 770.23 993.59 

DOE did not receive comments in 

response to the engineering and cost 

analysis methodology in the November 

2023 NOPD and maintains the same 

methodology for the final 

determination. 

C. Markups Analysis 

The markups analysis develops 

appropriate markups (e.g., distributor 

markups, retailer markups, contractor 

markups) in the distribution chain and 

sales taxes to convert the MSP estimates 

derived in the engineering analysis to 

consumer prices, which are then used in 

the LCC and PBP analyses. At each step 

in the distribution channel, companies 

mark up the price of the product to 

cover business costs and profit margin. 

As part of the analysis, DOE identifies 

key market participants and distribution 

channels. For the subject consumer 

furnaces, the main parties in the 

distribution chains are: (1) 

manufacturers; (2) wholesalers or 

distributors; (3) retailers; (4) mechanical 

contractors; (5) builders; (6) 

manufactured home manufacturers, and 

(7) manufactured home dealers/retailers. 

For this final determination, DOE 


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28 DOE estimates that five percent of WGFs and 

three percent of NWOFs are installed in commercial 

buildings. 

29New owners are new furnace installations in 

buildings that did not previously have a NWOF, 

MHOF, or WGF, or existing owners that are adding 

an additional consumer furnace. They primarily 

consist of households that add or switch to these 

furnaces during a major remodel. 

30 In the residential sector, DOE estimates that 

this distribution channel is applicable to 90 percent 

of the shipments for NWOFs and MHOFs and 80 

percent for WGFs; in the commercial sector, it is 

applied to 75 percent of NWOF and 70 percent of 

WGF distributions. 

31 In the residential sector, DOE estimates that 

these two distribution channels combined are 

applicable to five percent of the shipments for 

NWOFs and MHOFs, and 15 percent for WGFs (in 

mobile home applications, 10 percent of WGFs 

distributed to mobile homes is assumed to go 

through these channels); in the commercial sector, 

they are applied to 10 percent of NWOF and 15 

percent of WGF distributions. 

32 DOE estimates that five percent of MHOFs and 

10 percent of WGFs that go to mobile homes are 

distributed through this channel. 

33The national accounts channel where the buyer 

is the same as the consumer is mostly applicable 

to NWOFs and WGFs installed in small to mid-size 

commercial buildings, where on-site contractors 

purchase equipment directly from wholesalers at 

lower prices due to the large volume of equipment 

purchased and perform the installation themselves. 

DOE’s analysis assumes that approximately 5 and 

15 percent of NWOFs and WGFs installed in the 

residential and commercial sector, respectively, use 

the national accounts distribution channel for 

replacements. For new construction, DOE assumes 

10 percent of the subject furnaces installed in the 

residential sector and 20 percent installed in the 

commercial sector are distributed through national 

accounts. 

34Because the projected price of standardscompliant products is typically higher than the 

price of baseline products, using the same markup 

for the incremental cost and the baseline cost would 

result in higher per-unit operating profit. While 

such an outcome is possible, DOE maintains that in 

markets that are reasonably competitive, it is 

unlikely that standards would lead to a sustainable 

increase in profitability in the long run. 

35Energy Information Administration (‘‘EIA’’), 

2015 Residential Energy Consumption Survey 

(RECS) (available at: www.eia.gov/consumption/ 

residential/data/2015) (last accessed June 28, 2024). 

36EIA, 2012 Commercial Buildings Energy 

Consumption Survey (CBECS) (available at: 

www.eia.gov/consumption/commercial/) (last 

accessed June 28, 2024). 

maintained the same approach as in the 

NOPD. DOE characterized two 

distribution channel market segments to 

describe how NWOFs, MHOFs, and 

WGFs pass from the manufacturer to 

residential and commercial 

consumers: 28 (1) replacements and new 

owners 29 and (2) new construction. 

In the replacement and new owner 

market, the primary distribution 

channel for NWOFs, MHOFs, and WGFs 

is characterized as follow: 

Manufacturer ‰ Wholesaler ‰ 

Mechanical Contractor ‰ Consumer 

DOE estimates that the above 

distribution channel applies to the 

majority of the shipments of the subject 

consumer furnaces.30 As retail, 

including internet sales, grew 

significantly in the last five years 

(previously it was negligible) and some 

consumers purchase the appliance 

directly and then have contractors 

install it, DOE considered additional 

distribution channels as follows: 31

Manufacturer ‰ Retailer ‰ Consumer 

Manufacturer ‰ Retailer ‰ Mechanical 

Contractor ‰ Consumer 

For mobile home applications, there 

is another distribution channel 

considered on top of the aforementioned 

channels, where the MHOF or WGF is 

purchased via a mobile home specialty 

retailer or dealer: 32

Manufacturer ‰ Mobile Home Specialty 

Retailer/Dealer ‰ Consumer 

In the new construction market, DOE 

identified three primary distribution 

channels that involve builders, or 

manufactured home builders when 

considering mobile home applications: 

Manufacturer ‰ Wholesaler ‰ 

Mechanical Contractor ‰ Builder 

→ Consumer 

Manufacturer ‰ Wholesaler ‰ Builder 

‰ Consumer 

Manufacturer ‰ Mobile Home 

Manufacturer ‰ Mobile Home 

Dealer → Consumer 

For both the replacements and new 

owners/new construction markets, DOE 

additionally considered the national 

accounts or direct-from-manufacturer 

distribution channel, where the 

manufacturer through a wholesaler sells 

directly consumers.33

Manufacturer ‰ Wholesaler (National 

Account) ‰ Buyer ‰ Consumer 

DOE developed baseline and 

incremental markups for each actor in 

the distribution chain to ultimately 

determine the consumer purchase cost. 

Baseline markups are applied to the 

price of products with baseline 

efficiency, while incremental markups 

are applied to the difference in price 

between baseline and higher-efficiency 

models (i.e., the incremental cost 

increase). The incremental markup is 

typically less than the baseline markup 

and is designed to maintain similar perunit operating profit before and after 

new or amended standards.34

DOE did not receive comments in 

response to the markups methodology 

in the November 2023 NOPD and 

maintains the same methodology for 

this final determination. 

D. Energy Use Analysis 

The purpose of the energy use 

analysis is to determine the annual 

energy consumption of oil and 

weatherized gas consumer furnaces at 

different efficiencies in representative 

U.S. homes and commercial buildings, 

and to assess the energy savings 

potential of increased oil and 

weatherized gas consumer furnace 

efficiency. The energy use analysis 

estimates the range of energy use of the 

subject products in the field (i.e., as the 

products are actually used by 

consumers). The energy use analysis 

provides the basis for other analyses 

DOE performed, particularly 

assessments of the potential energy 

savings and the savings in consumer 

operating costs that could result from 

adoption of amended or new standards. 

DOE estimated the annual energy 

consumption of oil and weatherized gas 

consumer furnaces at specific energy 

efficiency levels across a range of 

climate zones, building characteristics, 

and space heating needs. The annual 

energy consumption includes the 

natural gas, liquid petroleum gas 

(‘‘LPG’’), oil, and electricity, as 

applicable, used by the furnace. 

For the November 2023 NOPD, DOE 

developed a building sample based on 

the Energy Information Administration’s 

(‘‘EIA’s’’) 2015 Residential Energy 

Consumption Survey (‘‘RECS 2015’’) 35

and 2012 Commercial Building Energy 

Consumption Survey (‘‘CBECS 2012’’).36

DOE used RECS 2015-reported or 

CBECS 2012-reported heating energy 

consumption (based on the existing 

heating system) to calculate the heating 

load of each household or building. The 

heating load represents the amount of 

heating required to keep a housing unit 

or building comfortable throughout an 

average year. DOE assigned the energy 

efficiency of existing systems based on 

the design of the distribution systems, a 

historical distribution of energy 

efficiencies for NWOFs, MHOFs, and 

WGFs, and data about the age of the 

existing furnace. The estimation of 

heating loads also required calculating 

the electricity consumption of the 

blower, because heat from the operation 

of the blower contributes to space 

heating. In addition, DOE made 

adjustments based on historical weather 

data, projections of building shell 

efficiency, and building square footage, 

as well as for homes that had secondary 

heating equipment that used the same 

fuel as the furnace. To complete the 

analysis, DOE calculated the anticipated 

energy consumption of alternative (more 

energy-efficient) products if they were 

to replace existing systems in each 

housing unit or commercial building. 

In the November 2023 NOPD, DOE 

also included the electricity use of 

auxiliary equipment, such as 

condensate pumps and heat tape, which 


khammond on DSKJM1Z7X2PROD with RULES4
Federal Register / Vol. 89, No. 202 / Friday, October 18, 2024 / Rules and Regulations 84049 

37EIA, 2020 Residential Energy Consumption 

Survey (RECS) (available at: www.eia.gov/ 

consumption/residential/data/2020/index.php/) 

(last accessed June 11, 2024). 

38Crystal BallTM is a commercially-available 

software tool to facilitate the creation of these types 

of models by generating probability distributions 

and summarizing results within Excel (available at: 

www.oracle.com/middleware/technologies/ 

crystalball.html) (last accessed June 11, 2024). 

are sometimes installed with higherefficiency products. The electricity 

consumption of the auxiliary equipment 

is added to the total electricity 

consumption. 

EIA recently published the microdata 

for the 2020 edition of RECS.37 To 

assess the impact of using RECS 2020, 

DOE compared the LCC consumer 

sample in the July 2022 Consumer 

Furnace NOPR, which used RECS 2015, 

(see 87 FR 40590, 40624 (July 7, 2022)) 

to the consumer sample used in the 

December 2023 Consumer Furnace final 

rule consumer sample, which used 

RECS 2020 (see 88 FR 87502, 87547 

(Dec. 18, 2023)). DOE assumed that 

changes in annual energy heating use 

between the two RECS editions for those 

consumer furnaces (i.e., NWGFs and 

MHGFs) serve as a reasonable proxy for 

the relative change in oil and 

weatherized gas furnace energy use. As 

can be seen by comparing Table 7.4.1 of 

the TSDs for that NOPR and final rule, 

the reported estimated annual heating 

energy consumption by region and 

efficiency level is similar between the 

two versions of RECS for households 

with furnaces, with RECS 2020 showing 

a slightly lower energy consumption. 

Given in the space-heating end use for 

NWGFs compared with NWOFs, 

MHOFs, WOFs, WGFs, and EFs, and 

given that the estimated furnace energy 

use declines when updating to RECS 

2020 for consumer furnaces, DOE has 

concluded that updating the consumer 

sample to RECS 2020 would not alter 

but only strengthen the conclusions of 

this final determination. Therefore, DOE 

continued to use RECS 2015 as the basis 

for its consumer sample, as was done in 

the November 2023 NOPD. 

A similar comparison of commercial 

installations of oil and weather gas 

furnaces found similar energy use 

between CBECS 2012 used in the July 

2022 Consumer Furnace NOPR (see 87 

FR 40590, 40624 (July 7, 2022)) and 

CBECS 2018 used in the December 2023 

Consumer Furnace final rule (see 88 FR 

87502, 87547 (Dec. 18, 2023)). DOE also 

notes that commercial installations of 

oil and weatherized gas furnaces 

account for approximately five percent 

or less of total installations, as show in 

Table 6.2.1 of the Preliminary Analysis 

TSD. Given the relatively small number 

of installations in the commercial sector 

relative to the residential sector, DOE 

has concluded that changes between 

CBECS 2012 and 2018 would not 

significantly impact overall analytical 

conclusions. Therefore, for this final 

determination, DOE continued to use 

CBECS 2012 as the basis of its 

commercial consumer sample, as was 

done in the November 2023 NOPD. 

Chapter 7 of the November 2022 

Preliminary Analysis TSD provides 

details on DOE’s energy use analysis for 

oil and weatherized gas furnaces. DOE 

did not receive comments on its energy 

use analysis methodology in response to 

the November 2023 NOPD. 

E. Life-Cycle Cost and Payback Period 

Analysis 

DOE conducts LCC and PBP analyses 

to evaluate the economic impacts on 

individual consumers of potential 

amended energy conservation standards 

for oil and weatherized gas furnaces. 

The effect of new or amended energy 

conservation standards on individual 

consumers usually involves a reduction 

in operating cost and an increase in 

purchase cost. DOE typically uses the 

following two metrics to measure 

consumer impacts: 

b Life-Cycle Cost (LCC) is the total 

consumer expense of operating the 

product over the lifetime of that 

product, consisting of total installed 

cost (which includes manufacturer 

selling price, distribution chain 

markups, sales tax, and installation 

costs) plus operating costs (e.g., 

expenses for energy use, maintenance, 

and repair). To compute the operating 

costs, DOE discounts future operating 

costs to the time of purchase and sums 

them over the lifetime of the product. 

b Payback Period (PBP) is the 

estimated amount of time (in years) it 

takes consumers to recover the 

increased purchase cost (including 

installation) of a more-efficient product 

through lower operating costs. DOE 

calculates the PBP by dividing the 

change in purchase cost at higher 

efficiency levels by the change in 

annual operating cost for the year that 

amended or new standards are assumed 

to take effect. 

For any given efficiency level, DOE 

measures the change in LCC relative to 

the LCC in the no-new-standards case, 

which reflects the estimated efficiency 

distribution of the product in the 

absence of new or amended energy 

conservation standards. In contrast, the 

PBP for a given efficiency level is 

measured relative to the baseline 

product. 

For each considered efficiency level 

in each product class, DOE calculated 

the LCC and PBP for a nationally 

representative set of housing units and, 

where appropriate, commercial 

buildings. As stated previously, DOE 

developed household and commercial 

building samples from the from RECS 

2015 and CBECS 2012. For each sample 

household or commercial building, DOE 

determined the energy consumption for 

the oil and weatherized gas furnaces 

and the appropriate energy price. By 

developing a representative sample of 

households and commercial buildings, 

the analysis captured the variability in 

energy consumption and energy prices 

associated with the use of oil and 

weatherized gas furnaces. 

Inputs to the LCC calculation include 

the installed cost to the consumer, 

operating expenses, the lifetime of the 

product, and a discount rate. Inputs to 

the calculation of total installed cost 

include the cost of the product—which 

includes MPCs, manufacturer markups, 

retailer and distributor markups, and 

sales taxes (where applicable)—and 

installation costs. Inputs to the 

calculation of operating expenses 

include annual energy consumption, 

energy prices and price projections, 

repair and maintenance costs, product 

lifetimes, and discount rates. Inputs to 

the PBP calculation include the 

installed cost to the consumer and firstyear operating expenses. DOE created 

distributions of values for installation 

cost, repair and maintenance, product 

lifetime, discount rates, and sales taxes, 

with probabilities attached to each 

value, to account for their uncertainty 

and variability. 

The computer model DOE uses to 

calculate the LCC relies on a Monte 

Carlo simulation to incorporate 

uncertainty and variability into the 

analysis. The Monte Carlo simulations 

randomly sample input values from the 

probability distributions and product 

user samples. For this proceeding, the 

Monte Carlo approach is implemented 

in MS Excel together with the Crystal 

BallTM add-on.38 The model calculated 

the LCC for products at each efficiency 

level for 10,000 housing units or 

commercial buildings per simulation 

run. The analytical results include a 

distribution of 10,000 data points 

showing the range of LCC savings for a 

given efficiency level relative to the nonew-standards case efficiency 

distribution. In performing an iteration 

of the Monte Carlo simulation for a 

given consumer, product efficiency is 

chosen based on its probability. If the 

chosen product efficiency is greater than 

or equal to the efficiency of the standard 

level under consideration, the LCC 

calculation reveals that a consumer is 


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84050 Federal Register / Vol. 89, No. 202 / Friday, October 18, 2024 / Rules and Regulations 

39U.S. Department of Labor, Bureau of Labor 

Statistics, Produce Price Indices Series ID 

PCU333415333415C (available at: www.bls.gov/ppi/ 

) (last accessed June 28, 2024). 

40RSMeans Company Inc., RSMeans Cost Data, 

Kingston, MA (2023) (available at: 

www.rsmeans.com/products/online/) (last accessed 

June 11, 2024). 

not impacted by the standard level. By 

accounting for consumers who are 

already projected to purchase moreefficient products than the baseline 

product in a given case, DOE avoids 

overstating the potential benefits from 

increasing product efficiency. 

DOE calculated the LCC and PBP for 

consumers of oil and weatherized gas 

furnaces as if each were to purchase a 

new product in the expected first year 

of required compliance with new or 

amended standards. Any amended 

standards would apply to oil and 

weatherized gas furnaces manufactured 

five years after the date on which any 

new or amended standard is published 

in the Federal Register. (42 U.S.C. 

6295(m)(4)(A)(ii)) Therefore, DOE used 

2030 as the first year of compliance with 

any amended standards. 

Table IV.16 summarizes the approach 

and data DOE used to derive inputs to 

the LCC and PBP analyses. The 

subsections that follow provide further 

discussion. Details of the spreadsheet 

model, and how all inputs to the LCC 

and PBP analyses are applied, are 

contained in chapter 8 of the November 

2022 Preliminary Analysis TSD and its 

appendices. 

TABLE IV.16—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSES * 

Inputs Source/method 

Product Cost ................................... Derived by multiplying MPCs by manufacturer and distribution chain markups and sales tax, as appropriate. Used historical data to derive a price-scaling index to project product costs. 

Installation Costs ............................. Baseline installation cost determined with data from RS Means 2023, manufacturer literature, and expert 

consultant. DOE assumed increased installation costs for condensing furnaces. 

Annual Energy Use ......................... The annual energy consumption per unit at each efficiency level (see section IV.D of this document). 

Variability: Based on RECS 2015 and CBECS 2012. 

Energy Prices .................................. Natural Gas: Based on EIA’s Natural Gas Navigator data for 2022 and RECS 2015 and CBECS 2012 billing data. 

Propane and Fuel Oil: Based on EIA’s State Energy Data System (‘‘SEDS’’) for 2021. 

Electricity: Based on EIA’s Form 861 data for 2022 and RECS 2015 and CBECS 2012 billing data. 

Variability: State energy prices determined for residential and commercial applications. 

Marginal prices used for natural gas, propane, and electricity prices. 

Energy Price Trends ....................... Residential and commercial prices were escalated by using EIA’s 2023 Annual Energy Outlook (AEO 

2023) forecasts to estimate future energy prices. Escalation was performed at the Census Division level. 

Repair and Maintenance Costs ...... Baseline installation cost determined with data from RSMeans 2023, manufacturer literature, and expert 

consultant. DOE assumed increased repair and maintenance costs for condensing furnaces. 

Product Lifetime .............................. Based on shipments data, multi-year RECS, American Housing Survey, American Home Comfort Survey 

data. Average: 20.2–22.5 years. 

Discount Rates ................................ For residential end users, approach involves identifying all possible debt or asset classes that might be 

used to purchase the considered appliances or might be affected indirectly. Primary data source was the 

Federal Reserve Board’s Survey of Consumer Finances. For commercial end users, DOE calculates 

commercial discount rates as the weighted-average cost of capital using various financial data. 

Compliance Date ............................ 2030. 

* References for the data sources mentioned in this table are provided in the sections following the table or in chapter 8 of the November 2022 

Preliminary Analysis TSD. Energy price trends, product lifetimes, and discount rates are not used for the PBP calculation. 

1. Product Cost 

To calculate consumer product costs, 

DOE multiplied the MPCs developed in 

the engineering analysis by the markups 

described previously (along with sales 

taxes). DOE used different markups for 

baseline products and higher-efficiency 

products, because DOE applies an 

incremental markup to the increase in 

MSP associated with higher-efficiency 

products. 

For the November 2023 NOPD, DOE 

estimated product prices in the year of 

compliance by using a least-squares 

power-law fit on the inflation-adjusted, 

unified price index (historical Producer 

Price Index (‘‘PPI’’) data) for warm-air 

furnaces from BLS spanning the time 

period 1990–2018 versus cumulative 

shipments.39 DOE did not receive 

comments on its price learning 

methodology in response to the 

November 2023 NOPD and maintains 

this methodology for this final 

determination. 

2. Installation Cost 

The installation cost is the expense to 

the consumer of installing the furnace, 

in addition to the cost of the furnace 

itself. Installation cost includes all 

labor, overhead, and any miscellaneous 

materials and parts needed that are 

associated with the replacement of an 

existing furnace or the installation of a 

furnace in a new home, as well as 

delivery of the new furnace, removal of 

the existing furnace, and any applicable 

permit fees. Higher-efficiency furnaces 

may require a consumer to incur 

additional installation costs. 

For the November 2023 NOPD, DOE 

used data from RSMeans,40

manufacturer literature, and expert 

consultants to estimate the installation 

cost, including labor costs, for oil and 

weatherized gas furnaces. DOE’s 

analysis of installation costs accounted 

for regional differences in labor costs by 

aggregating city-level labor rates from 

RSMeans into the 50 distinct States plus 

Washington, DC to match RECS 2015 

and CBECS 2012 data. The installation 

cost methodology accounts for all 

potential installation cases, including 

when a noncondensing furnace is 

replaced with a condensing furnace, 

with particular attention to venting 

issues in replacement applications (see 

descriptions that follow). The 

installation cost also depends on the 

furnace installation location, which 

DOE determined using information from 

RECS 2015 and CBECS 2012. 

For NWOF replacement installations, 

DOE included a number of additional 

costs (‘‘adders’’) for a fraction of the 

sample households that have particular 

features. For noncondensing furnaces, 

these additional costs included 

updating flue vent connectors, vent 

resizing, and chimney relining. For 

condensing furnaces, these additional 

costs included adding a new flue vent 

(polyvinyl chloride (‘‘PVC’’)), adding 


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41EIA, Form EIA–861M (formerly EIA–826) 

detailed data (2022) (available at: www.eia.gov/ 

electricity/data/eia861m/) (last accessed June 1, 

2024). 

42EIA, Natural Gas Navigator (2022) (available at: 

www.eia.gov/naturalgas/data.php) (last accessed 

June 1, 2024). 

43EIA, 2021 State Energy Data System (2021) 

(available at: www.eia.gov/state/seds/) (last 

accessed June 1, 2024). 

44EIA, Annual Energy Outlook 2023 with 

Projections to 2050 (available at: www.eia.gov/ 

forecasts/aeo/) (last accessed June 1, 2024). 

45RSMeans Company Inc., RSMeans Facilities 

Maintenance & Repair Cost Data (2023) (available 

at: www.rsmeans.com/) (last accessed June 11, 

2024). 

combustion air vents for direct vent 

installations (PVC), adding concealing 

vent pipes for indoor installations, 

addressing an orphaned water heater (by 

updating flue vent connectors, vent 

resizing, or chimney relining), and 

removing condensate, all based on 

manufacturer installation manuals and 

expert consultant input. Freeze 

protection (heat tape) is accounted for in 

the cost of condensate removal for a 

fraction of NWOFs installed in 

unconditioned attics. 

For WGF installations, DOE included 

additional cost adders for condensing 

WGFs to dispose of the condensate 

created and to prevent freezing of the 

condensate, as the entire product is 

outdoors based on manufacturer 

installation manuals, field study reports, 

and expert consultant input. DOE also 

accounted for a fraction of installations 

in colder climates that could require 

freeze protection (heat tape), a 

condensate line being buried below the 

frost line, or a condensate pump. 

DOE did not receive comments 

regarding its installation cost analysis in 

response to the November 2023 NOPD. 

Accordingly, DOE has maintained the 

same approach for this final 

determination. 

For further information on the 

derivation of installation costs, see 

chapter 7 of the November 2022 

Preliminary Analysis TSD. 

3. Annual Energy Consumption 

For each sampled household or 

commercial building, DOE determined 

the energy consumption for oil and 

weatherized gas furnaces at different 

efficiency levels using the approach 

described previously in section IV.D of 

this document. 

4. Energy Prices 

Energy bills to consumers typically 

include fixed costs (i.e., costs that do 

not depend on consumption) and costs 

that depend on the level of 

consumption. To estimate the impact of 

standards on consumer operating costs, 

DOE calculated average energy prices, 

which represent the typical cost for a 

consumer to use energy, including fixed 

costs, and marginal energy prices, 

which represent the energy price 

consumers would pay for reduced 

consumption. Because marginal energy 

price more accurately captures the 

incremental savings associated with a 

change in energy use from higher 

efficiency, it provides a better 

representation of incremental change in 

consumer costs than average electricity 

prices. DOE applied average energy 

prices for the energy use of the product 

purchased in the no-new-standards 

case, and marginal electricity prices for 

the incremental change in energy use 

associated with the other efficiency 

levels considered. 

For the November 2023 NOPD, DOE 

derived 2022 annual residential and 

commercial electricity prices by State 

from EIA Form 861M data.41 DOE 

obtained 2022 annual residential and 

commercial natural gas prices by State 

from EIA’s Natural Gas Navigator.42

DOE collected 2021 average LPG and 

fuel oil prices by State from EIA’s 2021 

State Energy Consumption, Price, and 

Expenditures Estimates and scaled to 

2022 prices using AEO 2023 data.43 To 

determine monthly prices for use in the 

analysis, DOE developed monthly 

energy price factors for each fuel based 

on long-term monthly price data. 

Monthly electricity and natural gas 

prices were adjusted using seasonal 

marginal price factors to determine 

monthly marginal electricity and natural 

gas prices. These marginal energy prices 

were used to determine the cost to the 

consumer of the change in energy 

consumed. Because marginal price data 

is only available for residential 

electricity and natural gas, DOE only 

developed marginal monthly prices for 

these fuels. For LPG and fuel oil, DOE 

used average monthly prices. 

To estimate energy prices in future 

years, DOE multiplied the 2022 energy 

prices by the projection of annual 

average price changes for each State 

from the Reference case in AEO 2023, 

which has an end year of 2050.44 To 

estimate price trends after 2050, DOE 

used the average annual rate of change 

in prices from 2046 through 2050. See 

chapter 8 of the November 2022 

Preliminary Analysis TSD for details. 

To assess the impact of updated 

energy price estimates, DOE compared 

the energy price estimates in 2030 from 

the November 2023 NOPD to the 

projected estimates using updated EIA 

energy price data from 2023. The results 

of this comparison are presented in 

Table IV.17. 

TABLE IV.17—SUMMARY OF ENERGY

PRICE COMPARISON OF 2023 EIA 

DATA RELATIVE TO NOVEMBER 2023 

NOPD 

Energy type 

Percent 

change in 

2030 energy 

price 

Electricity .............................. ¥20 

Natural Gas .......................... +1 

LPG ....................................... +1 

Fuel Oil ................................. ¥16 

Based upon this review, DOE has 

determined that energy prices have 

either not changed significantly, as in 

the case of natural gas and LPG, or have 

decreased, as in the case of electricity 

and fuel oil, relative to the energy prices 

used in the November 2023 NOPD. 

Consequently, updating energy prices 

would either have no impact on 

analytical results or decrease operating 

cost savings, thereby further justifying 

DOE’s decision to not amend the 

existing energy conservation standards 

for oil and weatherized gas furnaces. 

DOE did not receive comments 

regarding energy prices in response to 

the November 2023 NOPD. As a result, 

DOE has continued to use the energy 

prices from the November 2023 NOPD 

in this determination. 

5. Maintenance and Repair Costs 

Repair costs are associated with 

repairing or replacing product 

components that have failed in an 

appliance, whereas maintenance costs 

are associated with maintaining the 

operation of the product. The 

maintenance and repair costs (including 

labor hours, component costs, and 

frequency) at each considered efficiency 

level are derived based on 2023 

RSMeans Facilities Maintenance and 

Repair Data,45 manufacturer literature, 

consultant input, and industry reports. 

DOE also accounted for regional 

differences in labor costs based on these 

2023 RSMeans data. 

DOE assumes that condensing 

furnaces have a higher maintenance cost 

than noncondensing furnaces, but that 

this maintenance cost is the same at all 

noncondensing or condensing efficiency 

levels within each product class. The 

additional maintenance cost for 

condensing furnaces includes 

maintenance tasks related to the 

condensate withdrawal system (such as 

condensate pump or condensate 

neutralizer filter) and additional 


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84052 Federal Register / Vol. 89, No. 202 / Friday, October 18, 2024 / Rules and Regulations 

46Lutz, J., et al., ‘‘Using National Survey Data to 

Estimate Lifetimes of Residential Appliances,’’ 

HVAC&R Research (2011) 17(5): p. 28 (available at: 

www.tandfonline.com/doi/abs/10.1080/ 

10789669.2011.558166) (last accessed June 1, 2024). 

47EIA, Residential Energy Consumption Survey 

(‘‘RECS’’), Multiple Years (1990, 1993, 1997, 2001, 

2005, 2009, and 2015) (available at: www.eia.gov/ 

consumption/residential/) (last accessed June 1, 

2024). 

48U.S. Census Bureau: Housing and Household 

Economic Statistics Division, American Housing 

Survey, Multiple Years (1974, 1975, 1976, 1977, 

1978, 1979, 1980, 1981, 1983, 1985, 1987, 1989, 

1991, 1993, 1995, 1997, 1999, 2001, 2003, 2005, 

2007, 2009, 2011, 2013, 2015, 2017, 2019, and 2021) 

(available at: www.census.gov/programs-surveys/ 

ahs/) (last accessed June 1, 2024). 

49The implicit discount rate is inferred from a 

consumer purchase decision between two otherwise 

identical goods with different first cost and 

operating cost. It is the interest rate that equates the 

increment of first cost to the difference in net 

present value of lifetime operating cost, 

incorporating the influence of several factors: 

transaction costs, risk premiums and response to 

uncertainty, time preferences, and interest rates at 

which a consumer is able to borrow or lend. The 

implicit discount rate is not appropriate for the LCC 

analysis because it reflects a range of factors that 

influence consumer purchase decisions, rather than 

the opportunity cost of the funds that are used in 

purchases. 

50The Federal Reserve Board, Survey of 

Consumer Finances (1995, 1998, 2001, 2004, 2007, 

2010, 2013, 2016, and 2019) (available at: 

www.federalreserve.gov/econres/scfindex.htm) (last 

accessed June 11, 2024). 

51Heating, Air-conditioning and Refrigeration 

Distributors International (HARDI), DRIVE portal 

(HARDI Visualization Tool managed by D+R 

International until 2022), proprietary Gas Furnace 

Shipments Data from 2013–2022 provided to 

Lawrence Berkeley National Laboratory (LBNL). 

52BRG Building Solutions. The North American 

Heating & Cooling Product Markets (2022 Edition) 

(Available at: www.brgbuildingsolutions.com/ 

reports-insights) (last accessed June 28, 2024). 

maintenance related to the cleaning or 

checking of the heat exchanger (in 

particular, for condensing oil-fired 

furnaces using high-sulfur fuel oil). 

DOE also assumes that condensing 

furnaces have a higher repair cost than 

noncondensing furnaces, but the repair 

cost is the same at all noncondensing or 

condensing efficiency levels within 

each product class. 

DOE did not receive comments on its 

maintenance and repair cost 

methodology in response to the 

November 2023 NOPD, and accordingly, 

the Department has maintained the 

same methodology for this final 

determination. 

For more details on DOE’s 

methodology for calculating 

maintenance and repair costs, including 

all online resources reviewed, see 

appendix 8E of the November 2022 

Preliminary Analysis TSD. 

6. Product Lifetime 

Product lifetime is the age at which an 

appliance is retired from service. DOE 

conducted an analysis of furnace 

lifetimes based on the methodology 

described in a journal paper.46 For the 

November 2023 NOPD, DOE relied on 

RECS 1990, 1993, 2001, 2005, 2009, and 

2015.47 DOE also used the U.S. Census’s 

biennial American Housing Survey 

(‘‘AHS’’) from 1974 to 2021, which 

surveys all housing, noting the presence 

of a range of appliances.48 DOE used the 

appliance age data from these surveys, 

as well as the historical furnace 

shipments, to generate an estimate of 

the survival function. The survival 

function provides a lifetime range from 

minimum to maximum, as well as an 

average lifetime. For oil and 

weatherized gas furnaces, DOE 

developed Weibull distributions 

resulting in an average lifetime of 20.2 

to 22.5 years (based on region). 

DOE did not receive any comments on 

the lifetime distributions used in the 

November 2023 NOPD. As oil and 

weatherized gas furnaces have not 

changed significantly since the 

November 2023 NOPD, DOE maintains 

the same lifetime distribution in this 

final determination. 

Appendix 8F of the November 2022 

Preliminary Analysis TSD provides 

further details on the methodology and 

sources DOE used to develop the subject 

furnace lifetimes. 

7. Discount Rates 

In the calculation of LCC, DOE 

applies discount rates appropriate to 

estimate the present value of future 

expenditures and savings. DOE 

estimated a distribution of discount 

rates for oil and weatherized gas 

furnaces based on the opportunity cost 

of funds. DOE estimates discount rates 

separately for residential and 

commercial end users. 

For residential end users, DOE applies 

weighted-average discount rates 

calculated from consumer debt and 

asset data, rather than marginal or 

implicit discount rates.49 The LCC 

analysis estimates net present value 

over the lifetime of the product, so the 

appropriate discount rate will reflect the 

general opportunity cost of household 

funds, taking this timescale into 

account. Given the long time horizon 

modeled in the LCC analysis, the 

application of a marginal interest rate 

associated with an initial source of 

funds is inaccurate. Regardless of the 

method of purchase, consumers are 

expected to continue to rebalance their 

debt and asset holdings over the LCC 

analysis period, based on the 

restrictions consumers face in their debt 

payment requirements and the relative 

size of the interest rates available on 

debts and assets. 

To establish residential discount rates 

for the LCC analysis, DOE identified all 

relevant household debt or asset classes 

in order to approximate a consumer’s 

opportunity cost of funds related to 

appliance energy cost savings. It 

estimated the average percentage shares 

of the various types of debt and equity 

by household income group using data 

from the Federal Reserve Board’s 

triennial Survey of Consumer 

Finances 50 (‘‘SCF’’). Using the SCF and 

other sources, DOE developed a 

distribution of rates for each type of 

debt and asset by income group to 

represent the rates that may apply in the 

year in which amended standards 

would take effect. DOE assigned each 

sample household a specific discount 

rate drawn from one of the distributions. 

For commercial end users, DOE 

estimated the weighted-average cost of 

capital using data from various financial 

sources. The weighted-average cost of 

capital is commonly used to estimate 

the present value of cash flows to be 

derived from a typical company project 

or investment. Most companies use both 

debt and equity capital to fund 

investments, so their cost of capital is 

the weighted average of the cost to the 

firm of equity and debt financing. 

DOE did not receive comments on its 

discount rate distribution methodology 

in response to the November 2023 

NOPD, and accordingly, the Department 

has maintained the same methodology 

for this final determination. 

See appendix 8G of the November 

2022 Preliminary Analysis TSD for 

further details on the development of 

discount rates. 

8. Energy Efficiency Distribution in the 

No-New-Standards Case 

To accurately estimate the share of 

consumers that would be affected by a 

potential energy conservation standard 

at a particular efficiency level, DOE’s 

LCC analysis considered the projected 

distribution (i.e., market shares) of 

product efficiencies under the no-newstandards case (i.e., the case without 

amended or new energy conservation 

standards) in the compliance year 

(2030). This approach reflects the fact 

that some consumers may purchase 

products with efficiencies greater than 

the baseline levels, even in the absence 

of new or amended standards. 

For consumer furnaces, DOE had 

limited historical-shipments data by 

efficiency level. For NWOFs/MHOFs, 

DOE reviewed market shares from 

HARDI 2013–2022 data and BRG 2007– 

2022 data.51 52 The shipments data are 

not disaggregated between NWOFs and 


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53U.S. Department of Energy Compliance 

Certification Database (‘‘CCD’’) (Available at: 

www.regulations.doe.gov/certification-data/) (last 

accessed June 28, 2024). 

54 DOE uses data on manufacturer shipments as 

a proxy for national sales, as aggregate data on sales 

are lacking. In general, one would expect a close 

correspondence between shipments and sales. 

MHOFs, but DOE assigned all 

shipments data below 83-percent AFUE 

to MHOFs. For WGFs, DOE had 

insufficient historical shipments data by 

efficiency level to develop a reliable 

efficiency distribution. To cover the lack 

of available shipments data, DOE 

referred to CCD 53 for furnaces to 

develop efficiency distributions based 

on available models for WGFs. 

DOE did not receive additional data 

or comments on estimated market 

shares in the no-new-standard case in 

response to the November 2023 NOPD. 

Accordingly, DOE used estimates from 

the November 2023 NOPD for this final 

determination. 

The estimated market shares for the 

no-new-standards case for oil and 

weatherized gas furnaces are shown in 

Table IV.18 of this document. See 

chapter 8 of the November 2022 

Preliminary Analysis TSD for further 

information on the derivation of the 

efficiency distributions. 

TABLE IV.18—NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTIONS IN 2030 FOR OIL AND WEATHERIZED GAS

FURNACES

Product class Efficiency level Distribution 

(%) 

NWOF ......................................................................................... Baseline ...................................................................................... 37.2 

1 .................................................................................................. 60.0 

2 .................................................................................................. 1.5 

3 .................................................................................................. 1.3 

MHOF ......................................................................................... Baseline ...................................................................................... 95 

1 .................................................................................................. 2 

2 .................................................................................................. 3 

3 .................................................................................................. 0 

WGF ........................................................................................... Baseline ...................................................................................... 96 

1 .................................................................................................. 4 

The LCC Monte Carlo simulations 

draw from the efficiency distributions 

and randomly assign an efficiency to the 

oil and weatherized gas furnaces 

purchased by each sample household 

and commercial business in the no-newstandards case. The resulting percent 

shares within the sample match the 

market shares in the efficiency 

distributions. 

9. Payback Period Analysis 

The payback period is the amount of 

time (expressed in years) it takes the 

consumer to recover the additional 

installed cost of more-efficient products, 

compared to baseline products, through 

energy cost savings. Payback periods 

that exceed the life of the product mean 

that the increased total installed cost is 

not recovered in reduced operating 

expenses. 

The inputs to the PBP calculation for 

each efficiency level are the change in 

total installed cost of the product and 

the change in the first-year annual 

operating expenditures relative to the 

baseline. DOE refers to this as a ‘‘simple 

PBP’’ because it does not consider 

changes over time in operating cost 

savings. The PBP calculation uses the 

same inputs as the LCC analysis when 

deriving first-year operating costs, 

except that discount rates are not 

needed. 

DOE did not receive comments on its 

PBP calculation in response to the 

November 2023 NOPD, and accordingly, 

the Department has maintained the 

same methodology for this final 

determination. 

F. Shipments Analysis 

DOE uses projections of annual 

product shipments to calculate the 

national impacts of potential amended 

or new energy conservation standards 

on energy use, NPV, and future 

manufacturer cash flows.54 The 

shipments model takes an accounting 

approach, tracking market shares of 

each product class and the vintage of 

units in the stock. Stock accounting uses 

product shipments as inputs to estimate 

the age distribution of in-service 

product stocks for all years. The age 

distribution of in-service product stocks 

is a key input to calculations of both the 

NES and NPV, because operating costs 

for any year depend on the age 

distribution of the stock. 

In response to the November 2023 

NOPD, Chiafullo suggested that DOE 

should avoid any regulation that would 

essentially require people who currently 

use natural gas in their homes to switch 

to electric energy. The commenter stated 

that, in the event of changes to the 

energy efficiency standards for 

consumer furnaces, consumers would 

be faced with the prohibitive cost of 

switching from gas-powered to electric 

appliances, coupled with the fact that 

owners of electric appliances would 

need generators when the electricity is 

out. (Chiafullo, No. 31 at p. 1) 

In response, DOE has determined that 

energy conservation standards for 

standards for oil, electric, and 

weatherized gas furnaces do not need to 

be amended and, hence, there will be no 

market impact associated with this final 

determination. 

DOE did not receive additional 

historical shipments data to update 

shipments projections in response to the 

November 2023 NOPD. DOE notes that 

although there may be additional 

historical data available for 2023, 

including an additional year of 

historical data would be expected to 

have a minimal impact on projected 

shipments over the shipments analysis 

period (2030–2059). Additionally, the 

November 2023 NOPD relied on AEO 

2023, which remains the most recent 

available edition for AEO for many key 

inputs related to future product 

demand. For these reasons, DOE 

continues to use shipments from the 

November 2023 NOPD for this final 

determination. 

As discussed in the November 2023 

NOPD, DOE estimates that the 

shipments of NWOFs and MHOFs have 

declined by more than 70 percent over 

the past 20 years. 88 FR 83426, 83459 

(Nov. 29, 2023). Shipments for oil 

furnaces have accounted for less than 1 

percent of the consumer furnaces 

market over the past 10 years, and 


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55The NIA accounts for impacts in the United 

States and U.S. territories. 

56For the NIA, DOE adjusts the installed cost data 

from the LCC analysis to exclude sales tax, which 

is a transfer. 

shipments for weatherized gas have 

accounted for seven percent of the 

consumer furnace market over the past 

20 years. Id. Additionally, DOE 

estimates shipments of both oil and 

weatherized gas consumer furnaces 

have been flat or declining over time. Id. 

These trends have been considered as a 

part of this final determination in 

section V.C.4 of this document. 

G. National Impact Analysis 

The NIA assesses the NES and the 

NPV from a national perspective of total 

consumer costs and savings that would 

be expected to result from new or 

amended energy conservation standards 

at specific efficiency levels.55

(‘‘Consumer’’ in this context refers to 

consumers of the product being 

regulated.) DOE calculates the NES and 

NPV for the potential standard levels 

considered based on projections of 

annual product shipments, along with 

the annual energy consumption and 

total installed cost data from the energy 

use and LCC analyses.56 For the present 

analysis, DOE projected the energy 

savings, operating cost savings, product 

costs, and NPV of consumer benefits 

over the lifetime of oil and weatherized 

gas furnaces sold from 2030 through 

2059. 

DOE evaluates the impacts of new or 

amended standards by comparing a case 

without such standards with standardscase projections. The no-new-standards 

case characterizes energy use and 

consumer costs for each product class in 

the absence of new or amended energy 

conservation standards. For this 

projection, DOE considers historical 

trends in efficiency and various forces 

that are likely to affect the mix of 

efficiencies over time. DOE compares 

the no-new-standards case with 

projections characterizing the market for 

each product class if DOE adopted new 

or amended standards at specific energy 

efficiency levels for that class. For the 

standards cases, DOE considers how a 

given standard would likely affect the 

market shares of products with 

efficiencies greater than the standard. 

DOE uses a spreadsheet model to 

calculate the energy savings and the 

national consumer costs and savings 

from each EL. Interested parties can 

review DOE’s analyses by changing 

various input quantities within the 

spreadsheet. The NIA spreadsheet 

model uses typical values (as opposed 

to probability distributions) as inputs. 

Table IV.19 summarizes the inputs 

and methods DOE used for the NIA for 

the final determination. Discussion of 

these inputs and methods follows the 

table. See chapter 10 of the November 

2022 Preliminary Analysis TSD for 

details. 

TABLE IV.19—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS

Inputs Method 

Shipments ....................................... Annual shipments from shipments model. 

Compliance Date of Standard ........ 2030. 

Efficiency Trends ............................ No-new-standards case: Based on historical data. 

Standards cases: Roll-up in the compliance year and then DOE-estimated growth in shipment-weighted efficiency in all the standards cases, except max-tech. 

Annual Energy Consumption per 

Unit.

Annual weighted-average values are a function of energy use at each EL. Incorporates projection of future 

energy use based on AEO 2023 projections for heating degree days (‘‘HDD’’), cooling degree days 

(‘‘CDD’’), and building shell efficiency index. 

Total Installed Cost per Unit ........... Annual weighted-average values are a function of cost at each EL. 

Incorporates projection of future product prices based on historical data. 

Annual Energy Cost per Unit .......... Annual weighted-average values as a function of the annual energy consumption per unit and energy 

prices. 

Repair and Maintenance Cost per 

Unit.

Annual weighted-average values increase for condensing levels. 

Energy Price Trends ....................... AEO 2023 projections (to 2050) and extrapolation after 2050. 

Energy Site-to-Primary and FFC 

Conversion.

A time-series conversion factor based on AEO 2023. 

Discount Rate ................................. 3% and 7%. 

Present Year ................................... 2023. 

1. Product Efficiency Trends 

A key component of the NIA is the 

trend in energy efficiency projected for 

the no-new-standards case and each of 

the standards cases. Section IV.E.8 of 

this document describes how DOE 

developed an energy efficiency 

distribution for the no-new-standards 

case (which yields a shipment-weighted 

average efficiency) for each of the 

considered product classes for the year 

of anticipated compliance with an 

amended or new standard (2030). 

For the standards cases, DOE used a 

‘‘roll-up’’ scenario to establish the 

shipment-weighted efficiency for the 

year that standards are assumed to 

become effective (2030). In this 

scenario, the market shares of products 

in the no-new-standards case that do not 

meet the standard under consideration 

would ‘‘roll up’’ to meet the new 

standard level, and the market share of 

products above the standard would 

remain unchanged. 

To develop standards case efficiency 

trends after 2030, DOE estimated growth 

in shipment-weighted efficiency in the 

standards cases, except in the max-tech 

standards case. 

2. National Energy Savings 

The NES analysis involves a 

comparison of national energy 

consumption of the considered products 

between each potential standards case 

and the case with no new or amended 

energy conservation standards. DOE 

calculated the national energy 

consumption by multiplying the 

number of units (i.e., stock) of each 

product (by vintage or age) by the unit 

energy consumption (also by vintage). 

DOE calculated annual NES based on 

the difference in national energy 

consumption for the no-new-standards 

case and for each higher-efficiency 

standards case. DOE estimated energy 

consumption and savings based on site 

energy and converted the electricity 

consumption and savings to primary 


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57For more information on NEMS, refer to The 

National Energy Modeling System: An Overview 

May 2023, DOE/EIA (May 2023) (Available at: 

www.eia.gov/outlooks/archive/0581(2023).pdf (last 

accessed July 22, 2024). 

58U.S. Office of Management and Budget, 

Circular A–4: Regulatory Analysis (Available at: 

www.whitehouse.gov/omb/information-foragencies/circulars) (last accessed June 11, 2024). 

DOE used the prior version of Circular A–4 

(September 17, 2003) in accordance with the 

effective date of the November 9, 2023 version 

(Available at: www.whitehouse.gov/wp-content/ 

uploads/legacy_drupal_files/omb/circulars/A4/a4.pdf) (last accessed June 11, 2024). 

energy (i.e., the energy consumed by 

power plants to generate site electricity) 

using annual conversion factors derived 

from AEO 2023. For natural gas and 

LPG, primary energy consumption is the 

same as site energy consumption. 

Cumulative energy savings are the sum 

of the NES for each year over the 

timeframe of the analysis. 

Use of higher-efficiency products is 

sometimes associated with a direct 

rebound effect, which refers to an 

increase in utilization of the product 

due to the increase in efficiency. In the 

November 2023 NOPD, DOE applied a 

rebound effect of 15 percent for 

residential applications by reducing the 

site energy savings (and the associated 

primary and FFC energy savings) for oil 

and weatherized gas furnaces. However, 

for commercial applications, DOE 

applied no rebound effect in order to be 

consistent with other recent standards 

rulemakings. 

DOE did not receive comments on 

rebound in response to the November 

2023 NOPD. Accordingly, DOE has 

maintained the same approach for this 

final determination. 

In 2011, in response to the 

recommendations of a committee on 

‘‘Point-of-Use and Full-Fuel-Cycle 

Measurement Approaches to Energy 

Efficiency Standards’’ appointed by the 

National Academy of Sciences, DOE 

announced its intention to use FFC 

measures of energy use and greenhouse 

gas and other emissions in the NIAs and 

emissions analyses included in future 

energy conservation standards 

rulemakings. 76 FR 51281 (August 18, 

2011). After evaluating the approaches 

discussed in the August 18, 2011 notice, 

DOE published a statement of amended 

policy in which DOE explained its 

determination that EIA’s National 

Energy Modeling System (‘‘NEMS’’) is 

the most appropriate tool for its FFC 

analysis and its intention to use NEMS 

for that purpose. 77 FR 49701 (August 

17, 2012). NEMS is a public domain, 

multi-sector, partial equilibrium model 

of the U.S. energy sector 57 that EIA uses 

to prepare its Annual Energy Outlook. 

The FFC factors incorporate losses in 

production and delivery in the case of 

natural gas (including fugitive 

emissions) and additional energy used 

to produce and deliver the various fuels 

used by power plants. The approach 

used for deriving FFC measures of 

energy use and emissions is described 

in appendix 10B of the November 2022 

Preliminary Analysis TSD. 

The Joint Advocates commented that 

because the annual operating costs for 

baseline NWOFs exceed $2,000 and 

NWOFs have an outsized impact on 

greenhouse gas emissions, improved 

standards for NWOFs are particularly 

important for improving energy 

affordability and contributing to 

decarbonization goals. (Joint Advocates, 

No. 34 at p. 2) 

In response, DOE notes that NWOF 

shipments have declined by more than 

70 percent over the past 20 years and 

are likely to continue to decrease over 

the analysis period. Given the projected 

declining market for NWOFs, their 

contribution to greenhouse gas 

emissions is likewise projected to 

decrease over the analysis period in the 

absence of standards. Furthermore, DOE 

notes that, given the small role of oil 

furnaces in the overall furnace market 

and their low sales volume relative to 

the consumer boiler and consumer 

water heater markets, manufacturers 

faced with amended standards may 

deprioritize updates for these product 

classes and instead choose to exit the 

market. Although the existing oil-fired 

furnace market currently has a diversity 

of competitors, the loss of a few 

manufacturers could lead to shifts in 

market competition and availability of 

products that cover the full range of 

capacities. Such scenario may impact 

consumer’s ability to obtain a suitable 

replacement for a failed NWOF. 

3. Net Present Value Analysis 

The inputs for determining the NPV 

of the total costs and benefits 

experienced by consumers are: (1) total 

annual installed cost; (2) total annual 

operating costs (which include energy 

costs and repair and maintenance costs), 

and (3) a discount factor to calculate the 

present value of costs and savings. DOE 

calculates net savings each year as the 

difference between the no-newstandards case and each standards case 

in terms of total savings in operating 

costs versus total increases in installed 

costs. DOE calculates operating cost 

savings over the lifetime of each product 

shipped during the projection period. 

As discussed in section IV.E.1 of this 

document, DOE developed oil and 

weatherized gas furnaces price trends 

based on historical PPI data and 

cumulative shipments. DOE applied the 

same trends to project prices for each 

product class at each considered 

efficiency level. By 2059, which is the 

end date of the projection period, the 

average oil and weatherized gas furnace 

price is projected to drop 17 percent 

relative to 2022. DOE’s projection of 

product prices is described further in 

chapter 10 of the November 2022 

Preliminary Analysis TSD. 

The operating cost savings are energy 

cost savings minus any repair and 

maintenance cost increases. Energy cost 

savings are calculated using the 

estimated energy savings in each year 

and the projected price of the 

appropriate form of energy. To estimate 

energy prices in future years, DOE 

multiplied the national-average energy 

prices by the projection of annual 

national-average residential (or 

commercial, as appropriate) energy 

price changes in the AEO 2023 

Reference case, which has an end year 

of 2050. To estimate price trends after 

2050, DOE used the average annual rate 

of change in prices from 2046 through 

2050. Repair and maintenance cost for 

each of the efficiency levels is 

calculated in the LCC, and repair and 

maintenance cost increases are 

calculated as the repair and 

maintenance cost differential between 

efficiency levels. 

In calculating the NPV, DOE 

multiplies the net savings in future 

years by a discount factor to determine 

their present value. For this final 

determination, DOE estimated the NPV 

of consumer benefits using both a 3- 

percent and a 7-percent real discount 

rate. DOE uses these discount rates in 

accordance with guidance provided by 

the Office of Management and Budget 

(‘‘OMB’’) to Federal agencies on the 

development of regulatory analysis.58

The discount rates for the determination 

of NPV are in contrast to the discount 

rates used in the LCC analysis, which 

are designed to reflect a consumer’s 

perspective. The 7-percent real value is 

an estimate of the average before-tax rate 

of return to private capital in the U.S. 

economy. The 3-percent real value 

represents the ‘‘social rate of time 

preference,’’ which is the rate at which 

society discounts future consumption 

flows to their present value. 

V. Analytical Results and Conclusions 

The following section addresses the 

results from DOE’s analyses with 

respect to the considered energy 

conservation standards for oil and 

weatherized gas furnaces. It addresses 

the efficiency levels (‘‘ELs’’) examined 

by DOE (see section IV.B.1 of this 


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document) and the projected impacts of 

each of these levels if adopted as energy 

conservation standards for the subject 

oil and weatherized gas furnaces. 

Additional details regarding DOE’s 

analyses are contained in the November 

2022 Preliminary Analysis TSD 

supporting this document. 

A. Economic Impacts on Individual 

Consumers 

DOE analyzed the economic impacts 

on oil and weatherized gas furnace 

consumers by looking at the effects that 

potential amended energy conservation 

standards at each EL would have on the 

LCC and PBP. This approach allowed 

DOE to assess the potential standards’ 

cost-effectiveness (i.e., the savings in 

operating costs throughout the 

estimated average life of oil and 

weatherized gas furnaces compared to 

any increase in the price of, or in the 

initial charges for, or maintenance 

expenses of, oil and weatherized gas 

furnaces which are likely to result from 

the imposition of a standard). These 

analyses are discussed in the following 

sections. 

In general, higher-efficiency products 

can affect consumers in two ways: (1) 

purchase price increases, and (2) annual 

operating costs decrease. Inputs used for 

calculating the LCC and PBP include 

total installed costs (i.e., product price 

plus installation costs), and operating 

costs (i.e., annual energy use, energy 

prices, energy price trends, repair costs, 

and maintenance costs). The LCC 

calculation also uses product lifetime 

and a discount rate. Chapter 8 of the 

November 2022 Preliminary Analysis 

TSD provides detailed information on 

the LCC and PBP analyses. 

Table V.1 through Table V.6 show the 

average LCC and PBP results for the ELs 

considered for each product class of oil 

and weatherized gas furnaces. In the 

first of each pair of tables, the simple 

payback is measured relative to the 

baseline level. In the second table, the 

impacts are measured relative to the 

efficiency distribution in the no-newstandards case in the compliance year. 

The LCC and PBP results for oil and 

weatherized gas furnaces include both 

residential and commercial users. 

Because some consumers purchase 

products with higher efficiency in the 

no-new-standards case, the average 

savings are less than the difference 

between the average LCC of the baseline 

product and the average LCC at each EL. 

The savings refer only to consumers 

who are affected by a standard at a given 

EL. Those who already purchase a 

product with efficiency at or above a 

given EL are not affected. Consumers for 

whom the LCC increases at a given EL 

experience a net cost. 

TABLE V.1—AVERAGE LCC AND PBP RESULTS FOR NWOFS

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 4,333 2,132 32,211 36,544 ........................ 22.2 

1 ............................................................... 4,392 2,086 31,528 35,920 1.3 22.2 

2 ............................................................... 4,451 2,043 30,876 35,327 1.3 22.2 

3 ............................................................... 5,898 1,920 29,212 35,110 7.4 22.2 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 

TABLE V.2—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR NWOFS

Efficiency level 

Life-cycle cost savings 

Average LCC savings * 

(2022$) 

Percentage of 

consumers that 

experience net cost 

(%) 

1 ............................................................................................................................................... 608 0.5 

2 ............................................................................................................................................... 820 1.4 

3 ............................................................................................................................................... 1015 37.0 

Note: The savings represent the average LCC for affected consumers. 

TABLE V.3—AVERAGE LCC AND PBP RESULTS FOR MHOFS

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime 

(years) Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 3,377 1,142 17,913 21,290 ........................ 22.6 

1 ............................................................... 3,465 1,107 17,371 20,836 2.5 22.6 

2 ............................................................... 3,523 1,085 17,030 20,553 2.5 22.6 

3 ............................................................... 3,581 1,063 16,705 20,286 2.6 22.6 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 


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TABLE V.4—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR MHOFS

Efficiency level 

Life-cycle cost savings 

Average LCC savings * 

(2022$) 

Percentage of 

consumers that 

experience net cost 

(%) 

1 ............................................................................................................................................... 452 0.8 

2 ............................................................................................................................................... 724 0.9 

3 ............................................................................................................................................... 971 1.0 

Note: The savings represent the average LCC for affected consumers. 

TABLE V.5—AVERAGE LCC AND PBP RESULTS FOR WGFS

Efficiency level 

Average costs 

(2022$) Simple 

payback 

(years) 

Average 

lifetime (years) 

Installed cost First year’s 

operating cost 

Lifetime 

operating cost LCC 

Baseline ................................................... 5,533 471 7,215 12,748 ........................ 20.6 

1 ............................................................... 5,822 433 6,698 12,519 7.5 20.6 

Note: The results for each EL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative 

to the baseline product. 

TABLE V.6—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR WGFS

Efficiency level 

Life-cycle cost savings 

Average LCC Savings * 

(2022$) 

Percentage of 

consumers that 

experience net cost 

(%) 

.................................................................................................................................................. ........................................

1 ............................................................................................................................................... 223 40.4 

Note: The savings represent the average LCC for affected consumers. 

In response to the November 2023 

NOPD, Lennox agreed with DOE’s 

conclusion that more-stringent 

efficiency levels would cause many 

consumers to have net costs. (Lennox, 

No. 32 at p. 3) Lennox stated that the 

long payback period and high 

percentage of consumers with net costs 

support the idea that amended 

standards are not justified for 

weatherized gas furnaces. (Id.) In 

contrast, the Joint Advocates 

commented that the potential utility bill 

savings resulting from updated 

standards would particularly benefit 

low-income households and that DOE’s 

proposed determination to refrain from 

updating the standards is potentially 

sacrificing millions of dollars in 

consumer savings. (Joint Advocates, No. 

34 at p. 2) 

As required by EPCA, DOE’s 

determination considers whether 

amended standards would result in 

significant conservation of energy, be 

technologically feasible, and be costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) Additionally, DOE 

can only propose an amended standard 

if it is, among other things, 

economically justified. (42 U.S.C. 

6295(m)(1)(B); 42 U.S.C. 6295(o)(2)(A)) 

For these product classes, DOE expects 

that manufacturers would need to make 

significant investments in developing 

new model lines for the subject furnaces 

in order to meet more-stringent, 

amended standards. Although this 

analysis finds positive LCC savings at 

the considered ELs, given the relatively 

small market for oil and weatherized gas 

furnaces and declining shipments, DOE 

expects that such savings are unlikely to 

be realized because manufacturers may 

exit the market in response to amended 

standards, thereby resulting in certain 

products or capacities becoming 

unavailable to consumers. 

Consequently, DOE has determined that 

it is unable to conclude that amended 

energy conservation standards for oilfired furnaces and weatherized gas 

furnaces would be economically 

justified. 

B. National Impact Analysis 

This section presents DOE’s estimates 

of the NES and the NPV of consumer 

benefits that would result from each of 

the ELs considered as potential 

amended standards. 

1. National Energy Savings 

To estimate the energy savings 

attributable to potential amended energy 

conservation standards for oil and 

weatherized gas furnaces, DOE 

compared their energy consumption 

under the no-new-standards case to 

their anticipated energy consumption 

under each EL. The savings are 

measured over the entire lifetime of 

products purchased during the 30-year 

period that begins in the year of 

anticipated compliance with amended 

standards (2030–2059). 

Table V.8 presents DOE’s projections 

of the national energy savings for each 

EL considered for the analysis. The 

savings were calculated using the 

approach described in section IV.G.2 of 

this document. 


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59U.S. Office of Management and Budget, 

Circular A–4: Regulatory Analysis (Available at: 

www.whitehouse.gov/omb/information-foragencies/circulars) (last accessed June 11, 2024). 

DOE used the prior version of Circular A–4 (Sept. 

17, 2003) in accordance with the effective date of 

the November 9, 2023 version (Available at: 

www.whitehouse.gov/wp-content/uploads/legacy_

drupal_files/omb/circulars/A4/a-4.pdf) (last 

accessed June 11, 2024). 

60EPCA requires DOE to review its standards at 

least once every six years, and requires, for certain 

products, a three-year period after any new 

standard is promulgated before compliance is 

required, except that in no case may any new 

standards be required within six years of the 

compliance date of the previous standards. (42 

U.S.C. 6295(m)) If DOE makes a determination that 

amended standards are not needed, it must conduct 

a subsequent review within three years following 

such a determination. As DOE is evaluating the 

need to amend the standards, the sensitivity 

analysis is based on the review timeframe 

associated with amended standards. While adding 

a six-year review to the three-year compliance 

period adds up to nine years, DOE notes that it may 

undertake reviews at any time within the six-year 

period and that the three-year compliance date may 

yield to the six-year backstop. A nine-year analysis 

period may not be appropriate given the variability 

that occurs in the timing of standards reviews and 

the fact that for some products, the compliance 

period is five years rather than three years. 

TABLE V.7—CUMULATIVE NATIONAL ENERGY SAVINGS FOR OIL AND WEATHERIZED GAS FURNACES; 30 YEARS OF

SHIPMENTS (2030–2059) 

Product class 

Efficiency level 

1 2 3 

FFC Energy Savings (quads) 

Non-Weatherized Oil Furnace ..................................................................................................... 0.004 0.01 0.05 

Mobile Home Non-Weatherized Oil Furnace .............................................................................. 0.0004 0.001 0.001 

Weatherized Gas Furnace ........................................................................................................... 0.66 ........................ ........................

OMB Circular A–4 59 requires 

agencies to present analytical results, 

including separate schedules of the 

monetized benefits and costs that show 

the type and timing of benefits and 

costs. Circular A–4 also directs agencies 

to consider the variability of key 

elements underlying the estimates of 

benefits and costs. For this final 

determination, DOE undertook a 

sensitivity analysis using nine years, 

rather than 30 years, of product 

shipments. The choice of a nine-year 

period is a proxy for the timeline in 

EPCA for the review of certain energy 

conservation standards and potential 

revision of and compliance with such 

revised standards.60 The review 

timeframe established in EPCA is 

generally not synchronized with the 

product lifetime, product manufacturing 

cycles, or other factors specific to oil 

and weatherized gas furnaces. Thus, 

such results are presented for 

informational purposes only and are not 

indicative of any change in DOE’s 

analytical methodology. The NES 

sensitivity analysis results based on a 

nine-year analytical period are 

presented in Table V.9. The impacts are 

counted over the lifetime of oil and 

weatherized gas furnace products 

purchased during the period of 2030– 

2038. 

TABLE V.8—CUMULATIVE NATIONAL ENERGY SAVINGS FOR OIL AND WEATHERIZED GAS FURNACES; 9 YEARS OF

SHIPMENTS (2030–2038) 

Product class 

Efficiency level 

1 2 3 

FFC Energy Savings (quads) 

Non-Weatherized Oil Furnace ..................................................................................................... 0.002 0.01 0.02 

Mobile Home Non-Weatherized Oil Furnace .............................................................................. 0.0002 0.0004 0.001 

Weatherized Gas Furnace ........................................................................................................... 0.20 ........................ ........................

In response to the November 2023 

NOPD, Lennox commented that the 

energy savings for the furnace categories 

addressed by the NOPD would not be 

significant. (Lennox, No. 32 at p. 3) 

2. Net Present Value of Consumer Costs 

and Benefits 

DOE estimated the cumulative NPV of 

the total costs and savings for 

consumers that would result from the 

ELs considered for oil and weatherized 

gas furnaces. In accordance with OMB 

Circular A–4, DOE calculated NPV 

using both a 7-percent and a 3-percent 

real discount rate. Table V.10 shows the 

consumer NPV results with impacts 

counted over the lifetime of products 

purchased during the period of 2030– 

2059. 

TABLE V.9—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR OIL AND WEATHERIZED GAS FURNACES; 30 

YEARS OF SHIPMENTS (2030–2059) 

Discount rate Product class 

Efficiency level 

(EL) 

1 2 3 

billion 2022$ 

3% .......................................... Non-Weatherized Oil Furnace ................................................ 0.06 0.20 0.20 


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TABLE V.9—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR OIL AND WEATHERIZED GAS FURNACES; 30 

YEARS OF SHIPMENTS (2030–2059)—Continued 

Discount rate Product class 

Efficiency level 

(EL) 

1 2 3 

billion 2022$ 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.01 0.01 0.01 

Weatherized Gas Furnace ...................................................... 1.88 ........................ ........................

7% .......................................... Non-Weatherized Oil Furnace ................................................ 0.02 0.08 0.03 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.002 0.003 0.005 

Weatherized Gas Furnace ...................................................... 0.45 ........................ ........................

The NPV results based on the 

aforementioned nine-year analytical 

period are presented in Table V.11 of 

this document. The impacts are counted 

over the lifetime of oil and weatherized 

gas furnace products purchased during 

the period of 2030–2038. As mentioned 

previously, such results are presented 

for informational purposes only and are 

not indicative of any change in DOE’s 

analytical methodology or decision 

criteria. 

TABLE V.10—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR OIL AND WEATHERIZED GAS FURNACES; 9 

YEARS OF SHIPMENTS (2030–2038) 

Discount rate Product class 

Efficiency level 

(EL) 

1 2 3 

billion 2022$ 

3% .......................................... Non-Weatherized Oil Furnace ................................................ 0.03 0.11 0.12 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.003 0.01 0.01 

Weatherized Gas Furnace ...................................................... 0.67 ........................ ........................

7% .......................................... Non-Weatherized Oil Furnace ................................................ 0.02 0.05 0.02 

Mobile Home Non-Weatherized Oil Furnace .......................... 0.002 0.003 0.004 

Weatherized Gas Furnace ...................................................... 0.22 ........................ ........................

C. Final Determination 

As discussed previously, in order to 

make a final determination that the 

energy conservation standards for oil, 

electric, and weatherized gas furnaces 

do not need to be amended, EPCA 

requires that DOE analyze whether 

amended standards would result in 

significant conservation of energy, be 

technologically feasible, and be costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) An evaluation of 

cost-effectiveness requires DOE to 

consider savings in operating costs 

throughout the estimated average life of 

the covered product in the type (or 

class) compared to any increase in the 

price, initial charges, or maintenance 

expenses for the covered product that 

are likely to result from the standard. 

(42 U.S.C. 6295(n)(2) and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) The criteria 

considered under 42 U.S.C. 

6295(m)(1)(A) and the additional 

analysis relating to economic 

justification are discussed in the 

paragraphs that follow. 

1. Technological Feasibility 

EPCA requires that DOE consider 

whether amended energy conservation 

standards for oil, electric, and 

weatherized gas furnaces would be 

technologically feasible. (42 U.S.C. 

6295(m)(1)(A) and 42 U.S.C. 

6295(n)(2)(B)) DOE has determined that 

technology options are available that 

can improve the efficiency of oil and 

weatherized gas furnaces. These 

technology options are being used in 

commercially-available oil and 

weatherized gas furnaces and, therefore, 

are technologically feasible. (See section 

IV.A.4 of this document for further 

information.) Hence, DOE has 

determined that amended energy 

conservation standards for oil and 

weatherized gas furnaces would be 

technologically feasible. However, as 

discussed in section IV.A.3 of this 

document, DOE is not aware of any 

technology options that would improve 

the efficiency of electric furnaces. 

Therefore, DOE has determined that 

amended energy conservation standards 

for electric furnaces are not 

technologically feasible. 

2. Cost-Effectiveness 

EPCA requires DOE to consider 

whether amended energy conservation 

standards for the subject furnaces would 

be cost-effective through an evaluation 

of the savings in operating costs 

throughout the estimated average life of 

the covered product compared to any 

increase in the price of, or in the initial 

charges for, or maintenance expenses of, 

the covered product that are likely to 

result from an amended standard. (42 

U.S.C. 6295(m)(1)(A); 42 U.S.C. 

6295(n)(2)(C); and 42 U.S.C. 

6295(o)(2)(B)(i)(II)) DOE conducted an 

LCC analysis to estimate the net costs/ 

benefits to users from increased 

efficiency in the considered oil and 

weatherized gas furnace product classes. 

As shown in Table V.1 through Table 

V.6, for all product classes, all the 

considered efficiency levels result in 

positive LCC savings, with the 

percentage of consumers experiencing 

net cost ranging from 0.5 percent at EL 

1 to 37 percent at max-tech for NWOFs, 

approximately 1 percent at all ELs for 

MHOFs, and 40 percent at the only 

considered efficiency level for WGFs. 


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DOE then aggregated the results from 

the LCC analysis to estimate the NPV of 

the total costs and benefits experienced 

by the Nation. (See results in Table V.10 

and Table V.11 of this document) As 

noted, the inputs for determining the 

NPV are: (1) total annual installed cost; 

(2) total annual operating costs (energy 

costs and repair and maintenance costs), 

and (3) a discount factor to calculate the 

present value of costs and savings. 

3. Significant Conservation of Energy 

EPCA also requires that DOE consider 

whether amended energy conservation 

standards for the subject furnaces would 

result in significant conservation of 

energy. (42 U.S.C. 6295(m)(1)(A) and 42 

U.S.C. 6295(n)(2)(A)) 

To estimate the energy savings 

attributable to potential amended 

standards for oil and weatherized gas 

furnaces, DOE compared their energy 

consumption under the no-newstandards case to their anticipated 

energy consumption under each 

potential standard level. The savings are 

measured over the entire lifetime of 

products purchased in the 30-year 

period that begins in the year of 

anticipated compliance with amended 

standards (2030–2059). 

As shown in Table V.8, DOE estimates 

that amended standards would results 

in FFC energy savings of 0.004 quads at 

EL 1 to 0.05 quads at max-tech level for 

NWOFs, 0.0004 quads at EL 1 to 0.001 

quads at max-tech level for MHOFs, and 

0.66 quads at EL 1 (max-tech level) for 

WGFs, over a 30-year analysis period 

(2030–2059). 

4. Further Considerations 

a. Oil Furnaces 

As discussed in section IV.F of this 

document, DOE estimates that the 

shipments of NWOFs and MHOFs have 

declined by more than 70 percent over 

the past 20 years and only accounted for 

less than 1 percent of the overall 

consumer furnace market in the past 10 

years. DOE considered this declining 

trend and the small market share for oil 

furnaces in the furnace shipments 

model and projected that the shipments 

of NWOFs and MHOFs will continue to 

decline over the analysis period (i.e., 

2030–2059). DOE also considered that 

the shipments of NWOFs and MHOFs 

could decline faster than current 

projections, which may lead to further 

reductions in energy savings from 

potential amended standards. 

As the oil furnace market has 

contracted, the industry has seen 

consolidation. DOE estimates there were 

11 OEMs of NWOFs selling into the U.S. 

market at the time of the June 2011 DFR 

that set current standard levels for oil 

furnaces. Since then, manufacturers 

have merged, been acquired, and left the 

market. Currently there are seven OEMs 

of NWOFs selling into the U.S. market. 

DOE estimated the NWOF market to be 

approximately 36,000 units per year and 

the MHOF market to be approximately 

2,000 units per year in 2023. These 

products together are less than 1 percent 

of the overall U.S. residential furnace 

market, which is approximately 4.2 

million shipments per year in 2023. The 

size of the market could make cost 

recovery challenging for manufacturers. 

With the small market size and 

continued trend of diminishing sales, 

the timeframe for recouping investments 

may be longer than acceptable for 

manufacturers. Given the small role of 

oil furnaces in the overall furnace 

market and the low sales relative to the 

consumer boiler and consumer water 

heater markets, manufacturers may 

deprioritize updates for these product 

classes. The existing oil-fired furnace 

market currently has a diversity of 

competitors; however, the loss of a few 

manufacturers could lead to shifts in 

market competition. 

b. Weatherized Gas Furnaces 

DOE estimates that the shipments of 

WGFs have been approximately 0.35 

million per year for the past 10 years 

and accounted for approximately 7 

percent of the overall consumer furnace 

market over the past 20 years, as stated 

in section IV.F of this document. DOE 

considered the small market share for 

WGFs in the furnace shipments model 

and projected that the shipments of 

WGFs will be approximately flat and 

account for less than 8 percent of the 

overall consumer furnace market over 

the analysis period (i.e., 2030–2059). 

DOE also considered that the shipments 

of WGFs could be less than current 

projections, which may lead to 

reductions in energy savings from 

potential amended standards. 

WGFs have the largest potential 

energy savings of the product classes in 

this rulemaking. However, DOE 

recognizes challenges for the industry at 

the max-tech level, which requires 

condensing furnace designs. DOE 

identified eight OEMs of WGFs. Only 

one OEM offers models that can meet 

the max-tech level. Models that meet the 

max-tech level account for 1 percent of 

all WGF listings. 

All other OEMs would need to invest 

in new WGF designs to meet a 

condensing efficiency level. DOE 

expects that developing new condensing 

model lines would require significant 

investment. If manufacturers plan to 

continue offering the same diversity of 

models, they would need to redesign 

nearly 1,500 basic models, or 99 percent 

of what is available on the market today. 

Designing condensing models would 

require the incorporation of a secondary 

heat exchanger and condensate 

management system. Manufacturers 

would likely need to reconfigure their 

existing heat exchanger to optimize 

airflow over the secondary heat 

exchanger, which could require 

investments in product redesign and 

retooling for hard-tooled portions of the 

heat exchanger. Manufacturers may also 

have to choose between adding the 

secondary heat exchanger within the 

physical limitations of the existing 

chassis dimension or adopting a new 

chassis size, which has the potential to 

be capital-intensive. The added 

production of the secondary heat 

exchanger could necessitate additional 

floor space and increased assembly and 

fabrication times. 

DOE observed that the range of 

heating capacities offered at EL 1 do not 

cover the same range of capacities as 

noncondensing models. Condensing 

WGF models range from 60 to 96 kBtu/ 

h, whereas noncondensing WGF models 

span capacities from 40 to 150 kBtu/h. 

DOE is concerned that amended 

standards for WGFs may limit capacity 

availability for consumers. 

5. Summary 

Based on the reasons stated in the 

foregoing discussion, DOE has 

determined that the energy conservation 

standards for oil, electric, and 

weatherized gas furnaces do not need to 

be amended. 

As discussed previously, a 

determination that amended standards 

are not needed must be based on 

consideration of whether amended 

standards will result in significant 

conservation of energy, are 

technologically feasible, and are costeffective. (42 U.S.C. 6295(m)(1)(A) and 

42 U.S.C. 6295(n)(2)) Additionally, DOE 

can only propose an amended standard 

if it is, among other things, 

economically justified. (42 U.S.C. 

6295(m)(1)(B); 42 U.S.C. 6295(o)(2)(A)) 

As explained elsewhere in this 

document, DOE has determined that 

amended energy conservation standards 

for electric furnaces are not 

technologically feasible. Oil-fired 

furnaces and WGFs have relatively 

small markets, and shipments of these 

products are expected to flatten or 

decline; manufacturers facing increased 

standards for these product categories 

may opt to focus on products with larger 

market shares, resulting in certain 

products or capacities becoming 

unavailable for consumers, as well as 


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further consolidation of the market. 

Consequently, DOE has determined that 

it is unable to conclude that amended 

standards for oil-fired furnaces and 

WGFs would be economically justified. 

Therefore, for these reasons as well as 

those discussed throughout this 

document, DOE is unable to conclude 

that amended standards for furnaces at 

any of the efficiency levels analyzed 

would meet the applicable statutory 

criteria. 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866, 13563, and 14094 

Executive Order (‘‘E.O.’’) 12866, 

‘‘Regulatory Planning and Review,’’ 58 

FR 51735 (Oct. 4, 1993), as 

supplemented and reaffirmed by E.O. 

13563, ‘‘Improving Regulation and 

Regulatory Review,’’ 76 FR 3821 (Jan. 

21, 2011) and amended by E.O. 14094, 

‘‘Modernizing Regulatory Review,’’ 88 

FR 21879 (April 11, 2023), requires 

agencies, to the extent permitted by law, 

to: (1) propose or adopt a regulation 

only upon a reasoned determination 

that its benefits justify its costs 

(recognizing that some benefits and 

costs are difficult to quantify); (2) tailor 

regulations to impose the least burden 

on society, consistent with obtaining 

regulatory objectives, taking into 

account, among other things, and to the 

extent practicable, the costs of 

cumulative regulations; (3) select, in 

choosing among alternative regulatory 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive impacts; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. DOE emphasizes as 

well that E.O. 13563 requires agencies to 

use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, the Office of 

Information and Regulatory Affairs 

(‘‘OIRA’’) in OMB has emphasized that 

such techniques may include 

identifying changing future compliance 

costs that might result from 

technological innovation or anticipated 

behavioral changes. For the reasons 

stated in this preamble, this final 

regulatory action is consistent with 

these principles. 

Section 6(a) of E.O. 12866 also 

requires agencies to submit ‘‘significant 

regulatory actions’’ to OIRA for review. 

OIRA has determined that this final 

regulatory action does not constitute a 

‘‘significant regulatory action’’ under 

section 3(f) of E.O. 12866, as amended 

by E.O. 14094. Accordingly, this action 

was not submitted to OIRA for review 

under E.O. 12866. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis (‘‘IRFA’’) and a final regulatory 

flexibility analysis (‘‘FRFA’’) for any 

rule that by law must be proposed for 

public comment, unless the agency 

certifies that the rule, if promulgated, 

will not have a significant economic 

impact on a substantial number of small 

entities. As required by E.O. 13272, 

‘‘Proper Consideration of Small Entities 

in Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies in the Federal 

Register on February 19, 2003, to ensure 

that the potential impacts of its rules on 

small entities are properly considered 

during the rulemaking process. 68 FR 

7990. DOE has made its procedures and 

policies available on the Office of the 

General Counsel’s website 

(www.energy.gov/gc/office-generalcounsel). 

DOE reviewed this final 

determination under the provisions of 

the Regulatory Flexibility Act and the 

policies and procedures published on 

February 19, 2003. Because DOE is not 

amending standards for oil, electric, and 

weatherized gas furnaces, the 

determination will not amend any 

energy conservation standards. On the 

basis of the foregoing, DOE certifies that 

the final determination will have no 

significant economic impact on a 

substantial number of small entities. 

Accordingly, DOE has not prepared an 

FRFA for this final determination. DOE 

has transmitted this certification and 

supporting statement of factual basis to 

the Chief Counsel for Advocacy of the 

Small Business Administration for 

review under 5 U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act of 1995 

This final determination, which 

concludes that no amended energy 

conservation standards for oil, electric, 

and weatherized gas furnaces are 

needed, imposes no new informational 

or recordkeeping requirements. 

Accordingly, OMB clearance is not 

required under the Paperwork 

Reduction Act. (44 U.S.C. 3501 et seq.) 

D. Review Under the National 

Environmental Policy Act of 1969 

DOE has analyzed this final action in 

accordance with the National 

Environmental Policy Act of 1969 

(‘‘NEPA’’) and DOE’s NEPA 

implementing regulations (10 CFR part 

1021). DOE’s regulations include a 

categorical exclusion for actions which 

are interpretations or rulings with 

respect to existing regulations. 10 CFR 

part 1021, subpart D, appendix A4. DOE 

has determined that this rule qualifies 

for categorical exclusion A4 because it 

is an interpretation or ruling in regard 

to an existing regulation and otherwise 

meets the requirements for application 

of a categorical exclusion. See 10 CFR 

1021.410. Accordingly, neither an 

environmental assessment nor an 

environmental impact statement is 

required. 

E. Review Under Executive Order 13132 

E.O. 13132, ‘‘Federalism,’’ 64 FR 

43255 (August 10, 1999), imposes 

certain requirements on Federal 

agencies formulating and implementing 

policies or regulations that preempt 

State law or that have federalism 

implications. The Executive order 

requires agencies to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and to carefully assess the 

necessity for such actions. The 

Executive order also requires agencies to 

have an accountable process to ensure 

meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications. On March 14, 2000, DOE 

published a statement of policy 

describing the intergovernmental 

consultation process it will follow in the 

development of such regulations. 65 FR 

13735. DOE has examined this final 

determination and has determined that 

it would not have a substantial direct 

effect on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the products 

that are the subject of this final 

determination. States can petition DOE 

for exemption from such preemption to 

the extent, and based on criteria, set 

forth in EPCA. (42 U.S.C. 6297) 

Therefore, no further action is required 

by E.O. 13132. 


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F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of E.O. 

12988, ‘‘Civil Justice Reform,’’ 61 FR 

4729 (Feb. 7, 1996), imposes on Federal 

agencies the general duty to adhere to 

the following requirements: (1) 

eliminate drafting errors and ambiguity; 

(2) write regulations to minimize 

litigation; (3) provide a clear legal 

standard for affected conduct rather 

than a general standard, and (4) promote 

simplification and burden reduction. 

Regarding the review required by 

section 3(a), section 3(b) of E.O. 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms, and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of E.O. 12988 requires Executive 

agencies to review regulations in light of 

applicable standards in section 3(a) and 

section 3(b) to determine whether they 

are met or it is unreasonable to meet one 

or more of them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, this final 

determination meets the relevant 

standards of E.O. 12988. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (‘‘UMRA’’) requires 

each Federal agency to assess the effects 

of Federal regulatory actions on State, 

local, and Tribal governments and the 

private sector. Public Law 104–4, sec. 

201 (codified at 2 U.S.C. 1531). For a 

regulatory action likely to result in a 

rule that may cause the expenditure by 

State, local, and Tribal governments, in 

the aggregate, or by the private sector of 

$100 million or more in any one year 

(adjusted annually for inflation), section 

202 of UMRA requires a Federal agency 

to publish a written statement that 

estimates the resulting costs, benefits, 

and other effects on the national 

economy. (2 U.S.C. 1532(a), (b)) UMRA 

also requires a Federal agency to 

develop an effective process to permit 

timely input by elected officers of State, 

local, and Tribal governments on a 

proposed ‘‘significant intergovernmental 

mandate,’’ and requires an agency plan 

for giving notice and opportunity for 

timely input to potentially affected 

small governments before establishing 

any requirements that might 

significantly or uniquely affect them. On 

March 18, 1997, DOE published a 

statement of policy on its process for 

intergovernmental consultation under 

UMRA. 62 FR 12820. DOE’s policy 

statement is also available at: 

www.energy.gov/sites/prod/files/gcprod/ 

documents/umra_97.pdf. 

DOE examined this final 

determination according to UMRA and 

its statement of policy and determined 

that the final determination does not 

contain a Federal intergovernmental 

mandate, nor is it expected to require 

expenditures of $100 million or more in 

any one year by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector. As a result, the analytical 

requirements of UMRA do not apply. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule or policy that may affect 

family well-being. When developing a 

Family Policymaking Assessment, 

agencies must assess whether: (1) the 

action strengthens or erodes the stability 

or safety of the family and, particularly, 

the marital commitment; (2) the action 

strengthens or erodes the authority and 

rights of parents in the education, 

nurture, and supervision of their 

children; (3) the action helps the family 

perform its functions, or substitutes 

governmental activity for the function; 

(4) the action increases or decreases 

disposable income or poverty of families 

and children; (5) the proposed benefits 

of the action justify the financial impact 

on the family; (6) the action may be 

carried out by State or local government 

or by the family, and whether (7) the 

action establishes an implicit or explicit 

policy concerning the relationship 

between the behavior and personal 

responsibility of youth, and the norms 

of society. In evaluating the above 

factors, DOE has concluded that it is not 

necessary to prepare a Family 

Policymaking Assessment as none of the 

above factors are implicated. Further, 

this final determination would not have 

any financial impact on families nor any 

impact on the autonomy or integrity of 

the family as an institution. 

I. Review Under Executive Order 12630 

Pursuant to E.O. 12630, 

‘‘Governmental Actions and Interference 

with Constitutionally Protected Property 

Rights,’’ 53 FR 8859 (March 18, 1988), 

DOE has determined that this final 

determination would not result in any 

takings that might require compensation 

under the Fifth Amendment to the U.S. 

Constitution. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of the Treasury and 

General Government Appropriations 

Act, 2001 (44 U.S.C. 3516 note) provides 

for Federal agencies to review most 

disseminations of information to the 

public under information quality 

guidelines established by each agency 

pursuant to general guidelines issued by 

OMB. OMB’s guidelines were published 

at 67 FR 8452 (Feb. 22, 2002), and 

DOE’s guidelines were published at 67 

FR 62446 (Oct. 7, 2002). Pursuant to 

OMB Memorandum M–19–15, 

‘‘Improving Implementation of the 

Information Quality Act’’ (April 24, 

2019), DOE published updated 

guidelines, which are available at: 

www.energy.gov/sites/prod/files/2019/ 

12/f70/DOE%20Final%20

Updated%20IQA%20Guidelines

%20Dec%202019.pdf. DOE has 

reviewed this final determination under 

the OMB and DOE guidelines and has 

concluded that it is consistent with 

applicable policies in those guidelines. 

K. Review Under Executive Order 13211 

E.O. 13211, ‘‘Actions Concerning 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use,’’ 66 

FR 28355 (May 22, 2001), requires 

Federal agencies to prepare and submit 

to OIRA at OMB a Statement of Energy 

Effects for any proposed significant 

energy action. A ‘‘significant energy 

action’’ is defined as any action by an 

agency that promulgates or is expected 

to lead to promulgation of a final rule, 

and that: (1) is a significant regulatory 

action under Executive Order 12866, or 

any successor order, and is likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy; or 

(2) is designated by the Administrator of 

OIRA as a significant energy action. For 

any significant energy action, the agency 

must give a detailed statement of any 

adverse effects on energy supply, 

distribution, or use should the proposal 

be implemented, and of reasonable 

alternatives to the action and their 

expected benefits on energy supply, 

distribution, and use. 

This final determination, which does 

not amend energy conservation 

standards for oil, electric, and 

weatherized gas furnaces, is not a 

significant regulatory action under E.O. 


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61 ‘‘Energy Conservation Standards Rulemaking 

Peer Review Report’’ (2007) (Available at: 

www.energy.gov/eere/buildings/downloads/energyconservation-standards-rulemaking-peer-reviewreport-0) (last accessed June 28, 2024). 

62The December 2021 NAS report is available at 

www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards (Last accessed July 24, 

2024). 

12866. Moreover, it would not have a 

significant adverse effect on the supply, 

distribution, or use of energy, nor has it 

been designated as such by the 

Administrator at OIRA. Therefore, it is 

not a significant energy action, and 

accordingly, DOE has not prepared a 

Statement of Energy Effects. 

L. Review Under the Information 

Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in 

consultation with the Office of Science 

and Technology Policy (‘‘OSTP’’), 

issued its Final Information Quality 

Bulletin for Peer Review (‘‘the 

Bulletin’’). 70 FR 2664 (Jan. 14, 2005). 

The Bulletin establishes that certain 

scientific information shall be peer 

reviewed by qualified specialists before 

it is disseminated by the Federal 

Government, including influential 

scientific information related to agency 

regulatory actions. The purpose of the 

Bulletin is to enhance the quality and 

credibility of the government’s scientific 

information. Under the Bulletin, the 

energy conservation standards 

rulemaking analyses are ‘‘influential 

scientific information,’’ which the 

Bulletin defines as ‘‘scientific 

information the agency reasonably can 

determine will have, or does have, a 

clear and substantial impact on 

important public policies or private 

sector decisions.’’ Id. at 70 FR 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and the analyses 

that are typically used and has prepared 

a peer review report pertaining to the 

energy conservation standards 

rulemaking analyses.61 Generation of 

this report involved a rigorous, formal, 

and documented evaluation using 

objective criteria and qualified and 

independent reviewers to make a 

judgment as to the technical/scientific/ 

business merit, the actual or anticipated 

results, and the productivity and 

management effectiveness of programs 

and/or projects. Because available data, 

models, and technological 

understanding have changed since 2007, 

DOE has engaged with the National 

Academy of Sciences (‘‘NAS’’) to review 

DOE’s analytical methodologies to 

ascertain whether modifications are 

needed to improve DOE’s analyses. DOE 

is in the process of evaluating the 

resulting December 2021 report.62

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

report to Congress on the promulgation 

of this final determination prior to its 

effective date. The report will state that 

it has been determined that the final 

determination does not fall within the 

scope of 5 U.S.C. 804(2). 

VII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this final determination. 

Signing Authority 

This document of the Department of 

Energy was signed on October 10, 2024, 

by Jeffrey Marootian, Principal Deputy 

Assistant Secretary for Energy Efficiency 

and Renewable Energy, pursuant to 

delegated authority from the Secretary 

of Energy. That document with the 

original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

the Department of Energy. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Signed in Washington, DC, on October 10, 

2024. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energy. 

[FR Doc. 2024–23906 Filed 10–17–24; 8:45 am] 

BILLING CODE 6450–01–P 


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