Vol. 79 Tuesday, 

No. 42 March 4, 2014 

Part III 

Department of Energy 

10 CFR Part 431 

Energy Conservation Program: Energy Conservation Standards for 

Commercial Clothes Washers; Proposed Rule 

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12302 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EERE–2012–STD–0020] 

RIN 1904–AC77 

Energy Conservation Program: Energy 

Conservation Standards for 

Commercial Clothes Washers 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of proposed rulemaking 

(NOPR) and public meeting. 

SUMMARY: The Energy Policy and 

Conservation Act of 1975 (EPCA), as 

amended, prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including commercial clothes washers. 

EPCA also requires the U.S. Department 

of Energy (DOE) to determine whether 

amended standards would be 

technologically feasible and 

economically justified, and would save 

a significant amount of energy. In this 

notice, DOE proposes to amend the 

energy conservation standards for 

commercial clothes washers. The notice 

also announces a public meeting to 

receive comment on these proposed 

standards and associated analyses and 

results. 

DATES: DOE will hold a public meeting 

on Monday, April 21, 2014 from 9 a.m. 

to 4 p.m., in Washington, DC. The 

meeting will also be broadcast as a 

webinar. See section VII Public 

Participation for webinar registration 

information, participant instructions, 

and information about the capabilities 

available to webinar participants. 

DOE will accept comments, data, and 

information regarding this notice of 

proposed rulemaking (NOPR) before and 

after the public meeting, but no later 

than May 5, 2014. See section VII Public 

Participation for details. 

ADDRESSES: The public meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 8E–086, 1000 

Independence Avenue SW., 

Washington, DC 20585. To attend, 

please notify Ms. Brenda Edwards at 

(202) 586–2945. Please note that foreign 

nationals visiting DOE Headquarters are 

subject to advance security screening 

procedures. Any foreign national 

wishing to participate in the meeting 

should advise DOE as soon as possible 

by contacting Ms. Edwards to initiate 

the necessary procedures. Please also 

note that those wishing to bring laptops 

into the Forrestal Building will be 

required to obtain a property pass. 

Visitors should avoid bringing laptops, 

or allow an extra 45 minutes. Persons 

can attend the public meeting via 

webinar. For more information, refer to 

the Public Participation section near the 

end of this notice. 

Any comments submitted must 

identify the NOPR for Energy 

Conservation Standards for commercial 

clothes washers, and provide docket 

number EERE–2012–STD–0020 and/or 

regulatory information number (RIN) 

number 1904–AC77. Comments may be 

submitted using any of the following 

methods: 

1. Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting comments. 

2. Email: CommClothesWashers-2012- 

STD-0020@ee.doe.gov. Include the 

docket number and/or RIN in the 

subject line of the message. 

3. Mail: Ms. Brenda Edwards, U.S. 

Department of Energy, Building 

Technologies Office, Mailstop EE–5B, 

1000 Independence Avenue SW., 

Washington, DC 20585–0121. If 

possible, please submit all items on a 

CD. It is not necessary to include 

printed copies. 

4. Hand Delivery/Courier: Ms. Brenda 

Edwards, U.S. Department of Energy, 

Building Technologies Office, 950 

L’Enfant Plaza SW., Suite 600, 

Washington, DC 20024. Telephone: 

(202) 586–2945. If possible, please 

submit all items on a CD, in which case 

it is not necessary to include printed 

copies. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this proposed 

rule may be submitted to Office of 

Energy Efficiency and Renewable 

Energy through the methods listed 

above and by email to Chad_S_

Whiteman@omb.eop.gov. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see section VII of this document (Public 

Participation). 

Docket: The docket, which includes 

Federal Register notices, public meeting 

attendee lists and transcripts, 

comments, and other supporting 

documents/materials, is available for 

review at regulations.gov. The docket 

for this rulemaking can be accessed by 

searching for the docket at http://

www.regulations.gov/#!docketDetail;D=

EERE-2012-BT-STD-0020 and/or Docket 

No. EERE–2012–BT–STD–0020 at the 

regulations.gov Web site. All documents 

in the docket are listed in the 

regulations.gov index. However, some 

documents listed in the index, such as 

those containing information that is 

exempt from public disclosure, may not 

be publicly available. The 

regulations.gov Web page contains 

simple instructions on how to access all 

documents, including public comments, 

in the docket. 

For further information on how to 

submit a comment, review other public 

comments and the docket, or participate 

in the public meeting, contact Ms. 

Brenda Edwards at (202) 586–2945 or by 

email: Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: 

Mr. John Cymbalsky, 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: (202)–586–2192. Email: 

commercial_clothes_washers@

ee.doe.gov. 

Ms. Elizabeth Kohl, U.S. Department of 

Energy, Office of the General Counsel, 

Mailstop GC–71, 1000 Independence 

Avenue SW., Washington, DC 20585– 

0121. Telephone: (202) 586–7796. 

Email: Elizabeth.Kohl@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Proposed Rule 

A. Benefits and Costs to Consumers 

B. Impact on Manufacturers 

C. National Benefits 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemaking for 

Commercial Clothes Washers 

III. General Discussion 

A. General Rulemaking Issues 

B. Product Classes and Scope of Coverage 

1. Product Classes 

C. Test Procedures 

1. Appendix J2 

2. Energy Metric 

3. Water Metric 

D. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

E. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

F. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Manufacturers and 

Consumers 

b. Savings in Operating Costs Compared to 

Increase in Price 

c. Energy Savings 

d. Lessening of Utility of Products 

e. Impact of Any Lessening of Competition 

f. Need for National Energy Conservation 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion of Related 

Comments 

A. Market and Technology Assessment 

1. Market Assessment 

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1 DOE proposes to use the ‘‘MEFJ2’’ metric to 

distinguish these new standards from the MEF 

metric on which the current energy conservation 

standards are based. MEF is calculated according to 

the test procedures at 10 CFR part 430, subpart B, 

appendix J1; whereas MEFJ2 is defined in 10 CFR 

431.154(b)(1) and is equivalent to the MEF 

calculation in 10 CFR part 430, subpart B, appendix 

J2. See Section III.C for a comparison of the current 

standards, measured using appendix J1, with these 

proposed standards measured using the same 

appendix. The proposed standards comply with 42 

U.S.C. 6295(o)(1). 

2. Technology Assessment 

B. Screening Analysis 

C. Engineering Analysis 

1. General Approach 

2. Appendix J2 Efficiency Level 

Translations 

3. Baseline Efficiency Levels 

4. Front-Loading Higher Efficiency Levels 

5. Top-Loading Higher Efficiency Levels 

6. Impacts on Cleaning Performance 

D. Markups Analysis 

E. Energy and Water Use Analysis 

F. Life-Cycle Cost and Payback Period 

Analysis 

1. Equipment Costs 

2. Installation Costs 

3. Unit Energy Consumption 

4. Energy and Water Prices 

5. Repair and Maintenance Costs 

6. Lifetime 

7. Discount Rate 

8. Base Case Efficiency Distribution 

9. Compliance Date 

10. Payback Period Inputs 

11. Rebuttable-Presumption Payback 

Period 

G. Shipments Analysis 

1. Shipments by Market Segment 

H. National Impact Analysis 

1. Efficiency Trends 

2. National Energy and Water Savings 

3. Net Present Value of Customer Benefit 

a. Total Annual Installed Cost 

b. Total Annual Operating Cost Savings 

I. Customer Subgroup Analysis 

J. Manufacturer Impact Analysis 

1. Overview 

2. Government Regulatory Impact Model 

a. Government Regulatory Impact Model 

Key Inputs 

b. Government Regulatory Impact Model 

Scenarios 

3. Discussion of Comments 

4. Manufacturer Interviews 

a. Impacts to Cleaning Performance 

b. Consumer Behavior 

c. Disproportionate Impacts 

d. Market Model Challenges 

K. Emissions Analysis 

L. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

1. Social Cost of Carbon 

2. Valuation of Other Emissions 

Reductions 

M. Utility Impact Analysis 

N. Employment Impact Analysis 

V. Analytical Results 

A. Trial Standard Levels 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Individual 

Customers 

a. Life-Cycle Cost and Payback Period 

b. Customer Subgroup Analysis 

c. Rebuttable Presumption Payback 

2. Economic Impacts on Manufacturers 

a. Industry Cash-Flow Analysis Results 

b. Impacts on Direct Employment 

c. Impacts on Manufacturing Capacity 

d. Impacts on Subgroups of Manufacturers 

e. Cumulative Regulatory Burden 

3. National Impact Analysis 

a. Significance of Energy Savings 

b. Net Present Value of Customer Costs and 

Benefits 

c. Indirect Impacts on Employment 

4. Impact on Utility 

5. Impact of Any Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Summary of National Economic Impacts 

8. Other Factors 

C. Proposed Standards 

1. Benefits and Burdens of Trial Standard 

Levels Considered for Front-Loading and 

Top-Loading Commercial Clothes 

Washers 

2. Summary of Benefits and Costs 

(Annualized) of the Proposed Standards 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866 

and 13563 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act 

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 

VII. Public Participation 

A. Attendance at the Public Meeting 

B. Procedure for Submitting Prepared 

General Statements For Distribution 

C. Conduct of the Public Meeting 

D. Submission of Comments 

E. Issues on Which DOE Seeks Comment 

VIII. Approval of the Office of the Secretary 

I. Summary of the Proposed Rule 

Title III of the Energy Policy and 

Conservation Act of 1975 (42 U.S.C. 

6291, et seq; ‘‘EPCA’’), Public Law 94– 

163, sets forth a variety of provisions 

designed to improve energy efficiency. 

(All references to EPCA refer to the 

statute as amended through the 

American Energy Manufacturing 

Technical Corrections Act (AEMTCA), 

Public Law 112–210 (Dec. 18, 2012)). 

Part C of title III, which for editorial 

reasons was re-designated as Part A–1 

upon incorporation into the U.S. Code 

(42 U.S.C. 6311–6317, as codified), 

establishes the ‘‘Energy Conservation 

Program for Certain Industrial 

Equipment.’’ These include commercial 

clothes washers (CCW), the subject of 

today’s notice. (42 U.S.C. 6311(1)(H)). 

Pursuant to EPCA, any new or 

amended energy conservation standard 

must be designed to achieve the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified. (42 

U.S.C. 6295(o)(2)(A) and 6316(a)). 

Furthermore, the new or amended 

standard must result in a significant 

conservation of energy. (42 U.S.C. 

6295(o)(3)(B) and 6316(a)). In 

accordance with these and other 

statutory provisions discussed in this 

notice, DOE proposes amended energy 

conservation standards for commercial 

clothes washers. The proposed 

standards, which are expressed for each 

product class in terms of a minimum 

modified energy factor (MEFJ2) 1 and a 

maximum integrated water factor (IWF), 

are shown in Table I.1. These proposed 

standards, if adopted, would apply to all 

products listed in Table I.1 and 

manufactured in, or imported into, the 

United States on or after the date three 

years after the publication of the final 

rule for this rulemaking. 

TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL CLOTHES WASHERS

Product class 

Minimum 

MEFJ2* 

Maximum 

IWF†

Top-Loading .................. 1.35 8.8 

Front-Loading ............... 2.00 4.1 

* MEFJ2 (appendix J2 modified energy factor) is calculated as the clothes container capacity in cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) the 

total weighted per-cycle hot water energy consumption; (2) the total weighted per-cycle machine electrical energy consumption; and (3) 

the per-cycle energy consumption for removing moisture from a test load. † IWF (integrated water factor) is calculated 

as the sum, expressed in gallons per cycle, of 

the total weighted per-cycle water consumption for all wash cycles divided by the clothes 

container capacity in cubic feet. 

A. Benefits and Costs to Consumers 

Table I.2 presents DOE’s evaluation of 

the economic impacts of the proposed 

standards on consumers of commercial 

clothes washers, as measured by the 

average life-cycle cost (LCC) savings and 

the median payback period. The average 

LCC savings are positive for all product 

classes for which consumers are 

impacted by the proposed standards. 

The PBPs reflect the very small 

incremental cost necessary to achieve 

the proposed standards. 

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2All monetary values in this section are 

expressed in 2012 dollars and are discounted to 

2013. 

3A metric ton is equivalent to 1.1 short tons. 

Results for NOX and Hg are presented in short tons. 

4 DOE calculated emissions reductions relative to 

the Annual Energy Outlook (AEO) 2013 Reference 

case, which generally represents current legislation 

and environmental regulations for which 

implementing regulations were available as of 

December 31, 2012. 

5 DOE is currently investigating valuation of 

avoided Hg and SO2 emissions. 

TABLE I.2—IMPACTS OF PROPOSED

STANDARDS ON CONSUMERS OF

COMMERCIAL CLOTHES WASHERS: 

MULTI-FAMILY APPLICATION

Product class 

Average 

LCC 

savings 

(2012$) 

Median payback period 

(years) 

Front-Loading ... $285 0.02 

Top-Loading ...... $259 0.00 

TABLE I.3—IMPACTS OF PROPOSED

STANDARDS ON CONSUMERS OF

COMMERCIAL CLOTHES WASHERS: 

LAUNDROMAT APPLICATION

Product class 

Average 

LCC 

savings 

(2012$) 

Median payback period 

(years) 

Front-Loading ... $235 0.01 

Top-Loading ...... $145 0.00 

B. Impact on Manufacturers 

The industry net present value (INPV) 

is the sum of the discounted cash flows 

to the industry from the base year 

through the end of the analysis period 

(2014 to 2047). Using a real discount 

rate of 8.6 percent, DOE estimates that 

the industry net present value (INPV) 

for manufacturers of commercial clothes 

washers is $124.2 million in 2012$. 

Under the proposed standards, DOE 

expects that manufacturers may lose up 

to 4.9 percent of their INPV, which is 

approximately $6.0 million in 2012$. 

Additionally, based on DOE’s 

interviews with the manufacturers of 

commercial clothes washers, DOE does 

not expect any plant closings or 

significant loss of employment as a 

result of today’s standards. 

C. National Benefits 2

DOE’s analyses indicate that the 

proposed standards would save a 

significant amount of energy. The 

lifetime savings for front-loading and 

top-loading commercial clothes washers 

purchased in the 30-year period that 

begins in the year of compliance with 

amended standards (2018–2047) amount 

to 0.11 quads. This is equivalent to 

0.6% percent of total U.S. commercial 

energy use in 2012. 

The cumulative net present value 

(NPV) of total consumer costs and 

savings of the proposed standards for 

front-loading and top-loading 

commercial clothes washers ranges from 

$405 million (at a 7-percent discount 

rate) to $938 million (at a 3-percent 

discount rate). This NPV expresses the 

estimated total value of future 

operating-cost savings minus the 

estimated increased product costs for 

products purchased in 2018–2047. 

In addition, the proposed standards 

would have significant environmental 

benefits. The energy savings would 

result in cumulative emission 

reductions of 5.9 million metric tons 

(Mt)3 of carbon dioxide (CO2), 50.1 

thousand tons of methane, 4.4 thousand 

tons of sulfur dioxide (SO2), 9.1 

thousand tons of nitrogen oxides (NOX) 

and 0.01 tons of mercury (Hg).4

The value of the CO2 reductions is 

calculated using a range of values per 

metric ton of CO2 (otherwise known as 

the Social Cost of Carbon, or SCC) 

developed by an interagency process. 

The derivation of the SCC values is 

discussed in section IV.M. Using 

discount rates appropriate for each set 

of SCC values, DOE estimates the 

present monetary value of the CO2

emissions reduction is between $0.04 

billion and $0.56 billion. DOE also 

estimates the present monetary value of 

the NOX emissions reduction, is $4.9 

million at a 7-percent discount rate and 

$11.4 million at a 3-percent discount 

rate.5

Table I.4 summarizes the national 

economic costs and benefits expected to 

result from the proposed standards for 

commercial clothes washers. 

TABLE I.4—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION

STANDARDS FOR FRONT-LOADING AND TOP-LOADING CCW * 

Category Present value 

billion 2012$ 

Discount rate 

(percent) 

Benefits 

Operating Cost Savings ............................................................................................................................... 0.405 7 

0.938 3 

CO2 Reduction Monetized Value ($11.8/t case) ** ...................................................................................... 0.04 5 

CO2 Reduction Monetized Value ($39.7/t case) ** ...................................................................................... 0.18 3 

CO2 Reduction Monetized Value ($61.2/t case) ** ...................................................................................... 0.29 2.5 

CO2 Reduction Monetized Value ($117/t case) ** ....................................................................................... 0.56 3 

NOX Reduction Monetized Value (at $2,639/ton) ** .................................................................................... 0.0049 7 

0.0114 3 

Total benefits † ..................................................................................................................................... 0.59 7 

1.13 3 

Costs 

Incremental Installed Costs ......................................................................................................................... 0.0 7 

0.0 3 

Total Net Benefits 

Including Emissions Reduction Monetized Value† ..................................................................................... 0.59 7 

1.13 3 

* This table presents the costs and benefits associated with front-loading and top-loading CCW units shipped in 2018–2047. These results include benefits to consumers which accrue after 2047 from the products purchased in 2018–2047. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. 

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6 DOE used a two-step calculation process to 

convert the time-series of costs and benefits into 

annualized values. First, DOE calculated a present 

value in 2013, the year used for discounting the 

NPV of total consumer costs and savings, for the 

time-series of costs and benefits using discount 

rates of three and seven percent for all costs and 

benefits except for the value of CO2 reductions. For 

the latter, DOE used a range of discount rates, as 

shown in Table I.4. From the present value, DOE 

then calculated the fixed annual payment over a 30- 

year period (2018 through 2047) that yields the 

same present value. The fixed annual payment is 

the annualized value. Although DOE calculated 

annualized values, this does not imply that the 

time-series of cost and benefits from which the 

annualized values were determined is a steady 

stream of payments. 

** The CO2 values represent global monetized values of the SCC, in 2012$, in 2018 under several scenarios of the updated SCC values. The 

first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NOX is the average of the low and high values used in DOE’s analysis. 

† Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate. 

The benefits and costs of today’s 

proposed standards, for products sold in 

2018–2047, can also be expressed in 

terms of annualized values. The 

annualized monetary values are the sum 

of (1) the annualized national economic 

value of the benefits from consumer 

operation of products that meet the 

proposed standards (consisting 

primarily of operating cost savings from 

using less energy, minus increases in 

equipment purchase and installation 

costs, which is another way of 

representing consumer NPV), and (2) 

the annualized monetary value of the 

benefits of emission reductions, 

including CO2 emission reductions.6

Although combining the values of 

operating savings and CO2 emission 

reductions provides a useful 

perspective, two issues should be 

considered. First, the national operating 

savings are domestic U.S. consumer 

monetary savings that occur as a result 

of market transactions while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

commercial clothes washers shipped in 

2018–2047. The SCC values, on the 

other hand, reflect the present value of 

some future climate-related impacts 

resulting from the emission of one ton 

of carbon dioxide in each year. These 

impacts continue well beyond 2100. 

Estimates of annualized benefits and 

costs of the proposed standards are 

shown in Table I.5. The results under 

the primary estimate are as follows. 

Using a 7-percent discount rate for 

benefits and costs other than CO2

reduction, for which DOE used a 3- 

percent discount rate along with the 

average SCC series that uses a 3-percent 

discount rate, the cost of the standards 

proposed in today’s rule is $0.02 million 

per year in increased equipment costs, 

while the benefits are $31 million per 

year in reduced equipment operating 

costs, $9 million in CO2 reductions, and 

$0.37 million in reduced NOX

emissions. In this case, the net benefit 

amounts to $40 million per year. Using 

a 3-percent discount rate for all benefits 

and costs and the average SCC series, 

the cost of the standards proposed in 

today’s rule is $0.02 million per year in 

increased equipment costs, while the 

benefits are $46 million per year in 

reduced operating costs, $9 million in 

CO2 reductions, and $0.57 million in 

reduced NOX emissions. In this case, the 

net benefit amounts to $56 million per 

year. 

TABLE I.5—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL

CLOTHES WASHERS

Discount rate Primary 

estimate * 

Low net benefits 

estimate * 

High net benefits 

estimate * 

million 2012$/year 

Benefits 

Operating Cost Savings ...................................................................... 7% ..................... 31 ...................... 27 ...................... 38. 

3% ..................... 46 ...................... 40 ...................... 60. 

CO2 Reduction Monetized Value ($11.8/t case)* ............................... 5% ..................... 2 ........................ 2 ........................ 3. 

CO2 Reduction Monetized Value ($39.7/t case)* ............................... 3% ..................... 9 ........................ 8 ........................ 11. 

CO2 Reduction Monetized Value ($61.2/t case) * .............................. 2.5% .................. 13 ...................... 12 ...................... 17. 

CO2 Reduction Monetized Value ($117/t case) * ............................... 3% ..................... 28 ...................... 25 ...................... 34. 

NOX Reduction Monetized Value (at $2,639/ton) ** ........................... 7% ..................... 0.37 ................... 0.33 ................... 0.45. 

3% ..................... 0.57 ................... 0.51 ................... 0.70. 

Total Benefits † ................................................................................... 7% plus CO2

range.

33 to 58 ............ 29 to 52 ............ 42 to 73. 

7% ..................... 40 ...................... 35 ...................... 50. 

3% plus CO2

range.

49 to 75 ............ 43 to 66 ............ 64 to 95. 

3% ..................... 56 ...................... 49 ...................... 72. 

Costs 

Incremental Product Costs ................................................................. 7% ..................... 0.02 ................... 0.02 ................... 0.02 

3% ..................... 0.02 ................... 0.03 ................... 0.02 

Net Benefits 

Total† .................................................................................................. 7% plus CO2

range.

33 to 58 ............ 29 to 52 ............ 42 to 73. 

7% ..................... 40 ...................... 35 ...................... 50. 

3% plus CO2

range.

49 to 75 ............ 43 to 66 ............ 64 to 95. 

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12306 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

7Additional details regarding the commercial 

clothes washer test procedure NOPR are available 

at DOE’s rulemaking Web page: http://

www1.eere.energy.gov/buildings/appliance_

standards/rulemaking.aspx?ruleid=86. All 

rulemaking documents are also available at 

www.regulations.gov, under Docket # EERE–2013– 

BT–TP–0002. 

TABLE I.5—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL

CLOTHES WASHERS—Continued 

Discount rate Primary 

estimate * 

Low net benefits 

estimate * 

High net benefits 

estimate * 

3% ..................... 56 ...................... 49 ...................... 72. 

* This table presents the annualized costs and benefits associated with commercial clothes washer equipment shipped in 2018–2047. These 

results include benefits to consumers which accrue after 2047 from the products purchased in 2018–2047. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The 

Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the AEO2013 Reference case, Low Estimate, and 

High Estimate, respectively. In addition, incremental product costs reflect a flat rate for projected product price trends in the Primary Estimate, a 

low decline rate for projected product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the 

High Benefits Estimate. The methods used to derive projected price trends are explained in section IV. 

** The CO2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the updated SCC values. The 

first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NOX is the average of the low and high values used in DOE’s analysis. 

† Total Ben efits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount rate. In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added to the full range of CO2 values. 

DOE has tentatively concluded that 

the proposed standards represent the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified, and 

would result in the significant 

conservation of energy. DOE further 

notes that products achieving these 

standard levels are already 

commercially available for the product 

classes covered by today’s proposal. 

Based on the analyses described above, 

DOE has tentatively concluded that the 

benefits of the proposed standards to the 

nation (energy savings, positive NPV of 

consumer benefits, consumer LCC 

savings, and emission reductions) 

would outweigh the burdens (loss of 

INPV for manufacturers and LCC 

increases for some consumers). 

DOE also considered higher energy 

efficiency levels as a trial standard level, 

and is still considering them in this 

rulemaking. However, DOE has 

tentatively concluded that the potential 

burdens of the higher energy efficiency 

levels would outweigh the projected 

benefits. Based on consideration of the 

public comments DOE receives in 

response to this notice and related 

information collected and analyzed 

during the course of this rulemaking 

effort, DOE may adopt energy efficiency 

levels presented in this notice that are 

either higher or lower than the proposed 

standards, or some combination of 

level(s) that incorporate the proposed 

standards in part. 

II. Introduction 

The following section discusses the 

statutory authority underlying today’s 

proposal, as well as some of the relevant 

historical background related to the 

establishment of standards for 

commercial clothes washers. 

A. Authority 

As noted in section I, Title III of EPCA 

establishes the ‘‘Energy Conservation 

Program for Certain Industrial 

Equipment.’’ This equipment includes 

commercial clothes washers, the subject 

of this rulemaking. (42 U.S.C. 

6311(1)(H)). 

EPCA established energy conservation 

standards for commercial clothes 

washers and directed DOE to conduct 

two rulemakings to determine whether 

the established standards should be 

amended. (42 U.S.C. 6313(e)) DOE 

published its first final rule amending 

commercial clothes washer standards on 

January 8, 2010 (‘‘January 2010 final 

rule’’), which apply to commercial 

clothes washers manufactured on or 

after January 8, 2013. The second final 

rule determining whether standards 

should be amended must be published 

by January 1, 2015. Any amended 

standards would apply to commercial 

clothes washers manufactured three 

years after the date on which the final 

amended standard is published. (42 

U.S.C. 6313(e)(2)(B)) This current 

rulemaking will satisfy the requirement 

to publish the second final rule by 

January 1, 2015. 

Pursuant to EPCA, DOE’s energy 

conservation program for covered 

products consists essentially of four 

parts: (1) Testing; (2) labeling; (3) the 

establishment of Federal energy 

conservation standards; and (4) 

certification and enforcement 

procedures. 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. 6314(a)(2)) 

Manufacturers of covered products must 

use the prescribed DOE test procedure 

as the basis for certifying to DOE that 

their products comply with the 

applicable energy conservation 

standards adopted under EPCA and 

when making representations to the 

public regarding the energy use or 

efficiency of those products. (42 U.S.C. 

6314(d)) Similarly, DOE must use these 

test procedures to determine whether 

the products comply with standards 

adopted pursuant to EPCA. 

The DOE test procedures for 

commercial clothes washers is codified 

at title 10 of the Code of Federal 

Regulations (CFR) part 430, subpart B, 

appendix J1 (hereafter, ‘‘appendix J1’’). 

On March 7, 2012, DOE published a 

final rule amending its test procedures 

for clothes washers (‘‘March 2012 final 

rule’’). (77 FR 13888) The March 2012 

final rule included minor amendments 

to appendix J1 and also established a 

new test procedure at appendix J2 

(hereafter, ‘‘appendix J2’’). Beginning 

March 7, 2015, manufacturers of 

commercial clothes washers may use 

either appendix J1 or appendix J2 to 

demonstrate compliance with the 

current standards established by the 

January 2010 final rule. Manufacturers 

using appendix J2 would be required to 

use conversion equations to translate 

the measured efficiency metrics into 

equivalent appendix J1 values, as 

proposed in a separate commercial 

clothes washer test procedure NOPR 

published February 11, 2014. (79 FR 

8112) 7 The use of appendix J2 would be 

required to demonstrate compliance 

with any amended energy conservation 

standards established as a result of this 

rulemaking, and the conversion 

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equations would no longer be used at 

that time. 

DOE must follow specific statutory 

criteria for prescribing amended 

standards for covered products. As 

indicated above, any amended standard 

for a covered product must be designed 

to achieve the maximum improvement 

in energy efficiency that is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A) and 6316(a)) Furthermore, 

DOE may not adopt any standard that 

would not result in the significant 

conservation of energy. (42 U.S.C. 

6295(o)(3) and 6316(a)) Moreover, DOE 

may not prescribe a standard: (1) for 

certain products, including commercial 

clothes washers, if no test procedure has 

been established for the product, or (2) 

if DOE determines by rule that the 

proposed standard is not 

technologically feasible or economically 

justified. (42 U.S.C. 6295(o)(3)(A)–(B) 

and 6316(a)) In deciding whether a 

proposed 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) and 

6316(a)) DOE must make this 

determination after receiving comments 

on the proposed standard, and by 

considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the products subject to the 

standard; 

2. The 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 imposition 

of the standard; 

3. The total projected amount of 

energy, or as applicable, water, savings 

likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the 

performance of the covered products 

likely to result from the imposition of 

the standard; 

5. The impact of any lessening of 

competition, as determined in writing 

by the Attorney General, that is likely to 

result from the imposition of the 

standard; 

6. The need for national energy and 

water conservation; and 

7. Other factors the Secretary of 

Energy (Secretary) considers relevant. 

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

6316(a)) 

EPCA, as codified, also contains what 

is known as an ‘‘anti-backsliding’’ 

provision, which prevents the Secretary 

from prescribing any amended standard 

that either increases the maximum 

allowable energy use or decreases the 

minimum required energy efficiency of 

a covered product. (42 U.S.C. 6295(o)(1) 

and 6316(a)) Also, the Secretary may not 

prescribe an amended or new standard 

if interested persons have established by 

a preponderance of the evidence that 

the standard is likely to result in the 

unavailability in the United States of 

any covered product type (or class) of 

performance characteristics (including 

reliability), features, sizes, capacities, 

and volumes that are substantially the 

same as those generally available in the 

United States. (42 U.S.C. 6295(o)(4) and 

6316(a)) 

Further, EPCA, as codified, 

establishes a rebuttable presumption 

that a standard is economically justified 

if the Secretary finds that the additional 

cost to the consumer of purchasing a 

product complying with an energy 

conservation standard level will be less 

than three times the value of the energy 

savings during the first year that the 

consumer will receive as a result of the 

standard, as calculated under the 

applicable test procedure. (42 U.S.C. 

6295(o)(2)(B)(iii) and 6316(a)). DOE 

conducts the analysis required by 

6295(o) to determine economic 

justification and confirm the results of 

the rebuttable presumption analysis. 

Additionally, EPCA specifies 

requirements when promulgating a 

standard for a type or class of covered 

product that has two or more 

subcategories. DOE must specify a 

different standard level than that which 

applies generally to such type or class 

of products for any group of covered 

products that have the same function or 

intended use if DOE determines that 

products within such group (A) 

consume a different kind of energy from 

that consumed by other covered 

products within such type (or class); or 

(B) have a capacity or other 

performance-related feature which other 

products within such type (or class) do 

not have and such feature justifies a 

higher or lower standard. (42 U.S.C. 

6295(q)(1) and 6316(a)). In determining 

whether a performance-related feature 

justifies a different standard for a group 

of products, DOE must consider such 

factors as the utility to the consumer of 

the feature and other factors DOE deems 

appropriate. Any rule prescribing such 

a standard must include an explanation 

of the basis on which such higher or 

lower level was established. (42 U.S.C. 

6295(q)(2) and 6316(a)). 

Federal energy conservation 

requirements generally supersede State 

laws or regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6297(a)–(c) and 

6316(a)) DOE may, however, grant 

waivers of Federal preemption for 

particular State laws or regulations, in 

accordance with the procedures and 

other provisions set forth under 42 

U.S.C. 6297(d) and 6316(a)). 

B. Background 

1. Current Standards 

In a final rule published on January 8, 

2010 (‘‘January 2010 final rule’’), DOE 

prescribed the current energy 

conservation standards for commercial 

clothes washers manufactured on or 

after January 8, 2013. The current 

standards are set forth in Table II.1. 

TABLE II.1—CURRENT FEDERAL ENERGY EFFICIENCY STANDARDS FOR

COMMERCIAL CLOTHES WASHERS

Product class 

Minimum 

MEF* 

cu.ft/

kWh/

cycle 

Maximum 

WF †

gal/

cu.ft./

cycle 

Top-Loading .................. 1.60 8.5 

Front-Loading ............... 2.00 5.5 

*MEF (appendix J1 modified energy factor) 

is calculated as the clothes container capacity 

in cubic feet divided by the sum, expressed in 

kilowatt-hours (kWh), of: (1) The total weighted per-cycle hot water energy consumption; 

(2) the total weighted per-cycle machine electrical energy consumption; and (3) the percycle energy consumption for removing moisture from a test load. †WF (water factor) is calculated as the 

weighted per-cycle water consumption for the 

cold wash/cold rinse cycle, expressed in gallons per cycle, divided by the clothes container capacity in cubic feet. 

2. History of Standards Rulemaking for 

Commercial Clothes Washers 

As described in Section II.A, EPCA 

established energy conservation 

standards for commercial clothes 

washers and directed DOE to conduct 

two rulemakings to determine whether 

the established standards should be 

amended. (42 U.S.C. 6313(e)) DOE 

published its first final rule amending 

commercial clothes washer standards on 

January 8, 2010 (‘‘January 2010 final 

rule’’). 

This current rulemaking will satisfy 

the requirement to publish the second 

final rule determining whether the 

standards should be amended by 

January 1, 2015. DOE published a notice 

of public meeting and availability of the 

framework document for this 

rulemaking, available at http://

www.regulations.gov/

#!documentDetail;D=EERE-2012-BTSTD-0020-0001 (‘‘August 2012 notice’’). 

DOE also requested public comment on 

the document. 77 FR 48108 (August 13, 

2012). The framework document is 

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8A notation in this form provides a reference for 

information that is in the docket for DOE’s 

rulemaking to develop energy conservation 

standards for commercial clothes washers (Docket 

No. EERE–2012–BT–STD–0020), which is 

maintained at www.regulations.gov. This notation 

indicates that AHAM’s statement preceding the 

reference can be found in document number 6 in 

the docket, and appears at pages 1–3 of that 

document. 

9Whirlpool Corporation submitted a written 

comment stating that it worked closely with AHAM 

in the development of AHAM’s submitted 

comments, and that Whirlpool supports and echoes 

the positions taken by AHAM. Throughout this 

NOPR, reference to AHAM’s written comments 

(document number 6 in the docket) should be 

considered reflective of Whirlpool’s position as 

well. 

available at http://www.regulations.gov/ 

#!documentDetail;D=EERE-2012-BTSTD-0020-0002. The framework 

document described the procedural and 

analytical approaches that DOE 

anticipated using to evaluate energy 

conservation standards for commercial 

clothes washers and identified various 

issues to resolve during the rulemaking. 

On September 24, 2012, DOE held the 

framework document public meeting 

and discussed the issues detailed in the 

framework document. DOE also 

described the analyses that it planned to 

conduct during the rulemaking. 

Through the public meeting, DOE 

sought feedback from interested parties 

on these subjects and provided 

information regarding the rulemaking 

process that DOE would follow. 

Interested parties discussed the 

following major issues at the public 

meeting: Rulemaking schedule; test 

procedure revisions; product classes; 

technology options; efficiency levels; 

and approaches for each of the analyses 

performed by DOE as part of the 

rulemaking process. DOE considered the 

comments received since publication of 

the August 2012 notice, including those 

received at the September 2012 

framework public meeting, in 

developing today’s proposed standards 

for commercial clothes washers. 

Following the framework meeting, 

DOE gathered additional information, 

held discussions with manufacturers, 

performed product testing and 

teardowns, and performed the various 

analyses described in the framework 

document, including the engineering, 

life-cycle cost, payback period, 

manufacturer impact, and national 

impact analyses. The results of these 

analyses are presented in this NOPR. 

III. General Discussion 

A. General Rulemaking Issues 

In the framework document and 

framework public meeting, DOE 

discussed using the analyses performed 

during the previous commercial clothes 

washer rulemaking in the development 

of the proposed rule. 

The Association of Home Appliances 

Manufacturers (AHAM) commented that 

the publishing of the framework 

document on August 13, 2012 was 

premature given that the amended 

standards from the January 2010 final 

rule would not become mandatory until 

January 8, 2013. AHAM stated that 

neither DOE nor stakeholders know 

what the market will look like once 

compliance with the new standards is 

required. AHAM further commented 

that DOE should issue an advance 

notice of proposed rulemaking (ANOPR) 

to seek comments after the new 

standards effective date of January 8, 

2013. AHAM believes doing so would 

allow stakeholders to meaningfully 

comment on DOE’s proposed analysis 

prior to the notice of proposed 

rulemaking. AHAM does not feel it is 

appropriate for DOE to streamline the 

rulemaking process by not publishing 

an ANOPR in this case. (AHAM, No. 6 

at pp. 1–3; Whirlpool, No. 7 at p. 1) 8 9

Alliance Laundry Systems (ALS) 

commented that it understands the 

EPCA statutory requirements for the 

timeframe that DOE must follow for this 

rulemaking, but that this rulemaking is 

premature in asking for information 

regarding the market assessment before 

the January 8, 2013 standards take 

effect. (ALS, No. 16 at p. 2; ALS, Public 

Meeting Transcript, No. 12 at p. 41) The 

National Resources Defense Council and 

Appliance Standards Awareness Project 

(NRDC and ASAP) commented that DOE 

should specify the portions of the 2010 

rulemaking analysis that will be reused 

in the current rulemaking, and to what 

extent data and methodology will be 

updated. (NRDC and ASAP, No. 11 at 

p. 2) 

DOE conducted the market and 

technology assessment, engineering 

analysis, and manufacturer impact 

analysis for today’s proposal subsequent 

to the January 8, 2013 effective date of 

the current commercial clothes washer 

standards. The information DOE has 

gathered through product testing, 

teardowns, and confidential 

manufacturer interviews since the 

framework meeting accurately reflect 

the state of the commercial clothes 

washer market following the January 

2013 product transitions. 

B. Product Classes and Scope of 

Coverage 

1. Product Classes 

EPCA defines a ‘‘commercial clothes 

washer’’ as a soft-mount front-loading or 

soft-mount top-loading clothes washer 

that: 

(A) Has a clothes container 

compartment that: 

(i) for horizontal-axis clothes washers, 

is not more than 3.5 cubic feet; and 

(ii) for vertical-axis clothes washers, is 

not more than 4.0 cubic feet; and 

(B) is designed for use in: 

(i) applications in which the 

occupants of more than one household 

will be using the clothes washer, such 

as multi-family housing common areas 

and coin laundries; or 

(ii) other commercial applications. 

(42 U.S.C. 6311(21)) 

When evaluating and establishing 

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 justifies a different 

standard. In making a determination 

whether a performance-related feature 

justifies a different standard, DOE must 

consider such factors as the utility to the 

consumer of the feature and other 

factors DOE determines are appropriate. 

(42 U.S.C. 6295(q) and 6316(a)). 

Existing energy conservation 

standards divide commercial clothes 

washers into two product classes based 

on the axis of loading: Top-loading and 

front-loading. For the reasons explained 

below, DOE maintained these product 

class distinctions in the framework 

document and today’s proposal. 

AHAM commented that it supports 

DOE’s proposal to retain the two 

product classes based on the location of 

access. AHAM agrees that the longer 

cycle times of front-loading commercial 

clothes washers versus cycle times for 

top-loading commercial clothes washers 

significantly impact consumer utility. 

(AHAM, No. 6 at p. 4; AHAM, Public 

Meeting Transcript, No. 12 at p. 46) ALS 

commented that it also supports 

continuing with two separate product 

classes, top-loading and front-loading. 

(ALS, No. 16 at p. 2) 

Pacific Gas and Electric Company, 

Southern California Gas Company, and 

San Diego Gas and Electric Company 

(collectively, the ‘‘California Utilities’’) 

commented that DOE should establish 

one standard that applies to both toploading and front-loading commercial 

clothes washers. The California Utilities 

believe that the method of loading no 

longer provides unique utility, and thus 

should not continue to be treated as a 

unique ‘‘feature’’ warranting separate 

product classes. Specifically, the 

California Utilities stated that frontloading clothes washers are now 

available with cycle times equivalent to 

top-loading clothes washers, and 

provided a table listing example cycle 

times for a selection of top-loading and 

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10This excludes one outlier top-loading model 

with a cycle time of 50 minutes. 

front-loading residential clothes washer 

models. In addition, the California 

Utilities believe that even with a single 

standard, top-loading commercial 

clothes washers would still be able to 

meet such a standard using 

technologically feasible design 

considerations. The submitted comment 

includes a table comparing the toploading efficiency levels considered by 

DOE during the most recent energy 

conservation standards rulemaking for 

residential clothes washers to the frontloading efficiency levels proposed for 

consideration in this rulemaking. 

Furthermore, the California Utilities 

believe that the technologies, design, 

and operating characteristics of the 

residential clothes washer market are 

transferrable to the commercial clothes 

washer market. They believe that the 

split incentive between the purchaser of 

the equipment (e.g., route operator) and 

those paying the utility bill (e.g., coinoperated laundry owner) creates a split 

incentive that has created a barrier for 

motivating the manufacture and sale of 

higher-efficiency top-loaders, and that a 

single standard would correct this 

market inefficiency. (California Utilities, 

No. 8 at pp. 2–3) 

NEEA commented that DOE should 

reconsider defining a single product 

class for commercial clothes washers. 

NEEA stated that in the current market, 

cycle times are similar for both toploading and front-loading clothes 

washers, and as a result, cycle time is 

no longer a unique utility associated 

with one method of loading. NEEA also 

stated that technology to improve the 

efficiency of top-loading clothes 

washers has advanced. (NEEA, No. 10 

p. 1) 

NRDC and ASAP commented that 

DOE should reconsider the division of 

commercial clothes washers into 

separate product classes for top-loading 

and front-loading machines. NRDC 

stated that the prior determination of 

cycle times was based largely on a 

Consumer Reports article on residential 

clothes washers that contrasted cycle 

times of 50 to 115 minutes for frontloading clothes washers to 30–85 

minutes for top-loading clothes washers. 

NRDC and ASAP stated that commercial 

clothes washer manufacturers now offer 

cycle times on front-loading machines 

comparable to cycle times on toploading machines, and provided 

examples from multiple commercial 

clothes washer manufacturers. NRDC 

and ASAP believe that the similarity in 

cycle times obviates the need for 

separate product classes. (NRDC and 

ASAP, No. 11 at pp. 2–3; NRDC, Public 

Meeting Transcript, No. 12 at pp. 44– 

46). 

In response to these comments, DOE 

notes that in prior rulemakings for 

residential clothes washers, DOE has 

concluded that the axis of loading 

represents a distinct consumer utilityrelated feature, and, consequently, 

established separate product classes for 

top-loading and front-loading 

residential clothes washers. 56 FR 

22263 (May 14, 1991) and 77 FR 32319 

(May 31, 2012). DOE has concluded that 

the same justification applies to 

commercial clothes washers. 

As noted by commenters, DOE also 

determined during the previous energy 

conservation standards rulemaking for 

commercial clothes washers that the 

longer cycle times of front-loading 

commercial clothes washers versus toploading clothes washers was likely to 

significantly impact consumer utility 

and thereby constituted a performancerelated utility under the meaning of 42 

U.S.C. 6295(q), which warranted 

separate product classes. 75 FR 1122, 

1130–34. As part of the engineering 

analysis conducted for the current 

rulemaking, DOE measured total cycle 

times on a representative sample of toploading and front-loading commercial 

clothes washers during appendix J2 

testing, as described fully in chapter 5 

of the TSD. Top-loading cycle times for 

the maximum load size ranged from 29– 

31 minutes, with an average of 30 

minutes.10 Front-loading cycle times for 

the maximum load size ranged from 30– 

37 minutes, with an average of 34 

minutes. The longer average cycle time 

of front-loading machines results in 

fewer possible ‘‘turns’’ per day 

compared to top-loading machines, 

which is more significant in a 

laundromat or multi-family laundry 

setting for consumers waiting on the 

machine to finish its cycle, as well as 

laundromat owners and multi-family 

laundry route operators looking to 

maximize daily laundry throughput. 

Therefore, although the magnitude of 

the difference in cycle times for CCWs 

is smaller than for residential clothes 

washers, DOE has determined that the 

longer average cycle time of frontloading machines warrants 

consideration of separate product 

classes. 

In addition, DOE research indicates 

that the technologies, designs, and 

operating characteristics of the 

maximum efficiency top-loading 

residential clothes washers are not 

transferrable to commercial clothes 

washers. The standard level proposed 

for front-loading commercial clothes 

washers in this NOPR corresponds 

closely to the max-tech top-loading level 

considered by DOE during the 

residential clothes washer rulemaking. 

Achieving that level of efficiency in a 

top-loading machine requires design 

features such as extra-large capacity, a 

non-agitator ‘‘impeller’’ wash plate, spin 

speed greater than 1,000 rpm, and water 

recirculation. With regards to capacity, 

DOE notes that a larger clothes 

container capacity is considered a 

detriment to commercial clothes washer 

buyers because a larger capacity tub 

may result in fewer wash cycles 

performed by the end-user customer. In 

competitive markets, coin-operated 

laundries may not be able to sustain 

higher vend fares to compensate for the 

lower number of ‘‘turns’’ per day. In 

addition, based on discussions with 

manufacturers, larger tub capacities 

encourage the over-loading of machines 

by end-user customers. Regarding the 

use of non-agitator impeller wash plates, 

DOE research indicates that this feature 

also encourages machine overloading in 

a coin laundry environment, and that 

this technology is more susceptible to 

producing poorer wash performance 

when overloaded compared to a 

traditional agitator design. Spin speeds 

greater than 1,000 rpm and water 

recirculation are also not features that 

currently exist in the commercial 

clothes washer market, and DOE 

research indicates that these features are 

unlikely to be suitable for commercial 

clothes washers because of concerns 

regarding potential impacts on machine 

reliability as a result of machine 

overloading or other extreme usage 

scenarios experienced in a coinoperated laundry environment. Chapter 

3 and 4 of the TSD provide a detailed 

discussion of design options considered 

for this rulemaking. 

For these reasons, DOE concludes that 

separate product classes are justified for 

top-loading and front-loading 

commercial clothes washers based on 

the criteria established in EPCA. (42 

U.S.C. 6295(o)(4) and (q)(1), 6316(a)). 

Today’s proposal thus maintains 

separate standards for top-loading and 

front-loading product classes. 

C. Test Procedures 

1. Appendix J2 

The amended standards proposed in 

this rulemaking are based on energy and 

water metrics as measured using 

appendix J2 of 10 CFR part 430. DOE 

published a test procedure NOPR on 

February 11, 2014 (‘‘February 2014 TP 

NOPR’’) proposing to amend its test 

procedures for commercial clothes 

washers to add equations for translating 

MEF and water factor (WF) values as 

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measured using appendix J2 into their 

equivalent values as measured using 

appendix J1. 79 FR 8112. These 

translation equations would be codified 

at 10 CFR 429.46 and would be used 

when using the appendix J2 test 

procedure to demonstrate compliance 

with the current commercial clothes 

washer standards established by the 

January 2010 final rule, which were 

based on MEF and WF as measured 

using Appendix J1. These crosswalk 

equations would not be used to 

demonstrate compliance with the 

proposed amended standards in today’s 

NOPR because the proposed amended 

standard levels are based metrics as 

measured using the appendix J2 test 

procedure. 

Table III.1 shows the equivalent 

appendix J1 and appendix J2 values for 

the current energy conservation 

standards for commercial clothes as set 

forth at 10 CFR 431.156, and the 

proposed amended energy conservation 

standards. As required by section 

6295(o) of EPCA, the proposed 

standards do not increase the maximum 

allowable energy or water use, or 

decrease the minimum required energy 

efficiency, of commercial clothes 

washers. 

TABLE III.1—CURRENT AND PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL CLOTHES WASHERS, 

EQUIVALENT APPENDIX J1 AND J2 VALUES

Product class 

Minimum energy standards Maximum water standards 

Appendix J1 Appendix J2 Appendix J1 Appendix J2 

Current 

MEF * 

Proposed 

MEF * 

Current 

MEF J2* 

Proposed 

MEF J2* 

Current 

WF †

Proposed 

WF †

Current 

IWF ‡

Proposed 

IWF ‡

Top-Loading ..................................................... 1.60 1.70 1.15 1.35 8.5 8.4 8.9 8.8 

Front-Loading ................................................... 2.00 2.40 1.65 2.00 5.5 4.0 5.2 4.1 

* MEF (appendix J1 modified energy factor) and MEFJ2 (appendix J2 modified energy factor) are calculated as the clothes container capacity in 

cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) the total weighted per-cycle hot water energy consumption; (2) the total 

weighted per-cycle machine electrical energy consumption; and (3) the per-cycle energy consumption for removing moisture from a test load. †WF (water factor) is calculated as the weighted per-cycle water consumption for the cold wash/cold rinse cycle, expressed in gallons per 

cycle, divided by the clothes container capacity in cubic feet. ‡ IWF (integrated water factor) is calculated as the weighted per-cycle water consumption for all wash cycles, expressed in gallons per cycle, 

divided by the clothes container capacity in cubic feet. 

During the framework meeting and 

through subsequent written comments, 

interested parties submitted comments 

regarding these crosswalk equations and 

other issues including: 

• Dryer energy calculations 

• Water heating calculations 

• Load size usage factors 

• Temperature usage factors 

DOE has addressed these comments 

related to the test procedure in the 

February 2014 TP NOPR. (79 FR 8112) 

2. Energy Metric 

The amended energy efficiency 

standards proposed in this rulemaking 

are based on the MEFJ2 metric. In the 

framework document, DOE stated it 

would consider establishing amended 

energy efficiency standards for 

commercial clothes washers on the 

IMEF metric, which would incorporate 

standby and off mode power. 

AHAM and ALS commented that they 

do not oppose new standards for 

commercial clothes washers based on 

IMEF; however, DOE should not use the 

same analysis it used for standby and off 

mode for residential clothes washers. 

AHAM and ALS stated that residential 

and commercial clothes washers have 

different use patterns, and encouraged 

DOE to conduct studies on consumer 

usage to determine the appropriate 

usage patterns for commercial clothes 

washers, such as time spent in active 

mode versus standby mode. AHAM and 

ALS added that commercial clothes 

washers are used on a more continuous 

basis than residential clothes washers, 

and thus, spend more time in active 

mode and less time in standby mode 

compared to residential clothes 

washers. In addition, AHAM stated that 

the displays on commercial clothes 

washers must remain activated longer 

than residential clothes washer displays 

so that users know that the commercial 

machine is available for use. Finally, 

AHAM suggested that the definition of 

standby mode should be different for 

commercial clothes washers than for 

residential clothes washers. (AHAM, 

No. 6, at p. 3; AHAM, Public Meeting 

Transcript, No. 12 at pp. 29–30; ALS, 

No. 16 at p. 1) 

The California Utilities support DOE’s 

proposal to develop new standards that 

take into account standby and off-mode 

power, stating that they believe such 

standards would more accurately reflect 

the total energy consumed by 

commercial clothes washers. (California 

Utilities, No. 8 at p. 2) NRDC and ASAP 

also support establishing new efficiency 

standards based on the IMEF metric to 

capture standby and off-mode power. 

(NRDC and ASAP, No. 11 at p. 2) 

As part of its market assessment and 

engineering analysis for this 

rulemaking, DOE evaluated the standby 

and off mode power characteristics of a 

representative sample of commercial 

clothes washer spanning a wide range of 

display types, payment systems, and 

communication features. Although 

interested parties generally supported 

establishing new energy standards based 

on the IMEF metric, DOE is not 

proposing amended standards for 

commercial clothes washers based on an 

integrated energy metric in today’s rule. 

3. Water Metric 

The amended water efficiency 

standards proposed in this rulemaking 

are based on the IWF metric contained 

in appendix J2. In the framework 

document, DOE stated it would consider 

establishing amended water efficiency 

standards for commercial clothes 

washers based on the IWF metric, which 

incorporates water consumption from 

all the temperature cycles included as 

part of the energy test cycle in appendix 

J2. DOE believes that the IWF metric 

provides a more representative measure 

of water consumption than the WF 

metric. 

AHAM and ALS stated that they do 

not oppose DOE’s proposal to establish 

amended water standards based on the 

IWF metric. ALS added that they 

already record all the water used by a 

commercial clothes washer during their 

DOE tests. (AHAM, No. 6 at p. 3; ALS, 

No. 16 at p. 1) 

The Northwest Energy Efficiency 

Alliance (NEEA) and NRDC and ASAP 

support establishing new water 

efficiency standards based on the IWF 

metric to capture water consumption 

from all temperature cycles to reflect 

typical usage patterns by consumers. 

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11 In previous rulemakings, DOE presented energy 

savings results for only the 30-year period that 

begins in the year of compliance. In the calculation 

of economic impacts, however, DOE considered 

operating cost savings measured over the entire 

lifetime of products purchased in the 30-year 

period. DOE has modified its presentation of 

national energy savings consistent with the 

approach used for its national economic analysis. 

(NEEA, No. 10 at p. 2; NRDC and ASAP, 

No. 11 at p. 2) 

DOE received no comments objecting 

to the use of the IWF metric. Therefore, 

for the reasons stated above, the 

amended water efficiency standards 

proposed in this rulemaking are based 

on the IWF metric. 

D. Technological Feasibility 

1. General 

In each standards rulemaking, DOE 

conducts a screening analysis based on 

information gathered on all current 

technology options and prototype 

designs that could improve the 

efficiency of the products or equipment 

that are the subject of the rulemaking. 

As the first step in such an analysis, 

DOE develops a list of technology 

options for consideration in 

consultation with manufacturers, design 

engineers, and other interested parties. 

DOE then determines which of those 

means for improving efficiency are 

technologically feasible. DOE considers 

technologies incorporated in 

commercially available products or in 

working prototypes to be 

technologically feasible. 10 CFR 430, 

subpart C, appendix A, section 4(a)(4)(i). 

For further details on the technology 

options DOE considered for this 

rulemaking, see chapter 3 of the NOPR 

TSD. 

After DOE has determined that 

particular technology options are 

technologically feasible, it further 

evaluates each technology option in 

light of the following additional 

screening criteria: (1) Practicability to 

manufacture, install, or service; (2) 

adverse impacts on product utility or 

availability; and (3) adverse impacts on 

health or safety. Section IV of this notice 

summarizes the results of DOE’s 

screening analysis, particularly the 

designs DOE considered, those it 

screened out, and those that are the 

basis for the TSLs in this rulemaking. 

For further details on the screening 

analysis for this rulemaking, see chapter 

4 of the NOPR TSD. 

2. Maximum Technologically Feasible 

Levels 

When DOE proposes to adopt an 

amended standard for a type or class of 

covered product, it must determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for such product. (42 U.S.C. 

6295(p)(1)) Accordingly, in the 

engineering analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for commercial clothes 

washers using the design parameters for 

the most efficient products available on 

the market. The max-tech levels that 

DOE determined for this rulemaking are 

described in section IV.C.4 and IV.C.5 of 

this proposed rule. For further details 

on the engineering analysis for this 

rulemaking, see chapter 5 of the NOPR 

TSD. 

E. Energy Savings 

1. Determination of Savings 

For each TSL, DOE projected energy 

savings from the products that are the 

subject of this rulemaking purchased in 

the 30-year period that begins in the 

year of compliance with amended 

standards (2018–2047). The savings are 

measured over the entire lifetime of 

products purchased in the 30-year 

period.11 DOE quantified the energy 

savings attributable to each TSL as the 

difference in energy consumption 

between each standards case and the 

base case. The base case represents a 

projection of energy consumption in the 

absence of amended efficiency 

standards, and considers market forces 

and policies that affect demand for more 

efficient products. 

DOE used its national impact analysis 

(NIA) spreadsheet model to estimate 

energy savings from amended standards 

for the products that are the subject of 

this rulemaking. The NIA spreadsheet 

model (described in section IV of this 

notice) calculates energy savings in site 

energy, which is the energy directly 

consumed by products at the locations 

where they are used. For electricity, 

DOE reports national energy savings in 

terms of the savings in the energy that 

is used to generate and transmit the site 

electricity. To calculate this quantity, 

DOE derives annual conversion factors 

from the model used to prepare the 

Energy Information Administration’s 

(EIA) Annual Energy Outlook (AEO). 

DOE also estimates full-fuel-cycle 

energy savings in its energy 

conservation standards rulemakings. 76 

FR 51282 (Aug. 18, 2011), as amended 

at 77 FR 49701 (August 17, 2012). The 

full-fuel-cycle (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 efficiency standards. DOE’s 

approach is based on calculation of an 

FFC multiplier for each of the energy 

types used by covered products. For 

more information on FFC energy 

savings, see section IV.H.2. 

2. Significance of Savings 

As noted above, 42 U.S.C. 

6295(o)(3)(B) prevents DOE from 

adopting a standard for a covered 

product unless such standard would 

result in ‘‘significant’’ energy savings. 

Although the term ‘‘significant’’ is not 

defined in the Act, the U.S. Court of 

Appeals, in Natural Resources Defense 

Council v. Herrington, 768 F.2d 1355, 

1373 (D.C. Cir. 1985), indicated that 

Congress intended ‘‘significant’’ energy 

savings in this context to be savings that 

were not ‘‘genuinely trivial.’’ The energy 

savings for all of the TSLs considered in 

this rulemaking (presented in section 

V.C) are nontrivial, and, therefore, DOE 

considers them ‘‘significant’’ within the 

meaning of section 325 of EPCA. 

F. Economic Justification 

1. Specific Criteria 

EPCA provides seven factors to be 

evaluated in determining whether a 

potential energy conservation standard 

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

6295(o)(2)(B)(i) and 6316(a)) The 

following sections discuss how DOE has 

addressed each of those seven factors in 

this rulemaking. 

a. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of an 

amended energy conservation standard 

on manufacturers, DOE first uses an 

annual cash-flow approach to determine 

the quantitative impacts. This step 

includes both a short-term 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 industry 

net present value (INPV), which values 

the industry on the basis of expected 

future cash flows; cash flows by year; 

changes in revenue and income; and 

other measures of impact, as 

appropriate. Second, DOE analyzes and 

reports the impacts on different types of 

manufacturers, including impacts on 

small manufacturers. Third, DOE 

considers the impact of standards on 

domestic manufacturer employment and 

manufacturing capacity, as well as the 

potential for standards to result in plant 

closures and loss of capital investment. 

Finally, DOE takes into account 

cumulative impacts of various DOE 

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12312 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

regulations and other regulatory 

requirements on manufacturers. 

For individual consumers, measures 

of economic impact include the changes 

in LCC and payback period (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 net 

present value of the economic impacts 

applicable to a particular rulemaking. 

DOE also evaluates the LCC impacts of 

potential standards on identifiable 

subgroups of consumers that may be 

affected disproportionately by a national 

standard. 

b. 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 compared to any increase in the 

price of the covered product that are 

likely to result from the imposition of 

the standard. (42 U.S.C. 

6295(o)(2)(B)(i)(II) and 6316(a)) DOE 

conducts this comparison in its LCC and 

PBP analysis. The LCC is the sum of the 

purchase price of a product (including 

its installation) and the operating 

expense (including energy, 

maintenance, and repair expenditures) 

discounted over the lifetime of the 

product. To account for uncertainty and 

variability in specific inputs, such as 

product lifetime and discount rate, DOE 

uses a distribution of values, with 

probabilities attached to each value. For 

its analysis, DOE assumes that 

consumers will purchase the covered 

products in the first year of compliance 

with amended standards. 

The LCC savings and the PBP for the 

considered efficiency levels are 

calculated relative to a base case that 

reflects projected market trends in the 

absence of amended standards. DOE 

identifies the percentage of consumers 

estimated to receive LCC savings or 

experience an LCC increase, in addition 

to the average LCC savings associated 

with a particular standard level. 

c. Energy Savings 

Although significant conservation of 

energy is a separate statutory 

requirement for imposing an energy 

conservation standard, EPCA requires 

DOE, in determining the economic 

justification of a 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) 

and 6316(a)) As discussed in section IV, 

DOE uses the NIA spreadsheet to project 

national energy savings. 

d. Lessening of Utility of Products 

In establishing classes of products, 

and in evaluating design options and 

the impact of potential standard levels, 

DOE evaluates standards that would not 

lessen the utility of the considered 

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

and 6316(a)) The standards proposed in 

today’s notice will not reduce the utility 

of the products under consideration in 

this rulemaking. 

e. 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, which is likely to 

result from the imposition of a standard. 

(42 U.S.C. 6295(o)(2)(B)(i)(V) It also 

directs the Attorney General to 

determine the impact, if any, of any 

lessening of competition likely to result 

from a proposed standard and to 

transmit such determination to the 

Secretary within 60 days of the 

publication of a proposed rule, together 

with an analysis of the nature and 

extent of the impact. (42 U.S.C. 

6295(o)(2)(B)(ii)) DOE will transmit a 

copy of today’s proposed rule to the 

Attorney General with a request that the 

Department of Justice (DOJ) provide its 

determination on this issue. DOE will 

address the Attorney General’s 

determination in the final rule. 

f. Need for National Energy 

Conservation 

The energy savings from the proposed 

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 

conducts a utility impact analysis to 

estimate how standards may affect the 

nation’s needed power generation 

capacity. 

The proposed standards also are 

likely to result in environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases associated with energy 

production. DOE reports the emissions 

impacts from today’s standards, and 

from each TSL it considered, in section 

V of this notice. DOE also reports 

estimates of the economic value of 

emissions reductions resulting from the 

considered TSLs. 

g. Other Factors 

EPCA allows the Secretary of Energy, 

in determining whether a standard is 

economically justified, to consider any 

other factors that the Secretary deems to 

be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII)) DOE did not 

consider any other factors for today’s 

NOPR. 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 

6295(o)(2)(B)(iii) and 6316(a), EPCA 

creates a rebuttable presumption that an 

energy conservation standard is 

economically justified if the additional 

cost to the consumer of a product that 

meets the standard is less than three 

times the value of the first year’s energy 

savings resulting from the standard, as 

calculated under the applicable DOE 

test procedure. DOE’s LCC and PBP 

analyses generate values used to 

calculate the effects that proposed 

energy conservation standards would 

have on the payback period for 

consumers. These analyses include, but 

are not limited to, the 3-year payback 

period contemplated under the 

rebuttable-presumption test. In addition, 

DOE routinely conducts an economic 

analysis that considers the full range of 

impacts to consumers, manufacturers, 

the nation, and the environment, as 

required under 42 U.S.C. 

6295(o)(2)(B)(i). The results of this 

analysis serve as the basis for DOE’s 

evaluation of the economic justification 

for a potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). The rebuttable 

presumption payback calculation is 

discussed in section IV of this NOPR. 

IV. Methodology and Discussion of 

Related Comments 

DOE used four analytical tools to 

estimate the impact of today’s proposed 

standards. The first tool is a spreadsheet 

that calculates LCCs and PBPs of 

potential new energy conservation 

standards. The second tool includes a 

model that provides shipments 

forecasts, and a framework in a 

spreadsheet that calculates national 

energy savings and net present value 

resulting from potential amended 

energy conservation standards. DOE 

uses the third spreadsheet tool, the 

Government Regulatory Impact Model 

(GRIM), to assess manufacturer impacts. 

Additionally, DOE estimated the 

impacts of energy conservation 

standards for CCW on utilities and the 

environment. DOE used a version of 

EIA’s National Energy Modeling System 

(NEMS) for the utility and 

environmental analyses. The NEMS 

model simulates the energy sector of the 

U.S. economy. EIA uses NEMS to 

prepare its Annual Energy Outlook 

(AEO), a widely known energy forecast 

for the United States. The version of 

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12BT stands for DOE’s Building Technologies 

Program. 

13The EIA allows the use of the name ‘‘NEMS’’ 

to describe only an AEO version of the model 

without any modification to code or data. Because 

the present analysis entails some minor code 

modifications and runs the model under various 

policy scenarios that deviate from AEO 

assumptions, the name ‘‘NEMS–BT’’ refers to the 

model as used here. For more information on 

NEMS, refer to The National Energy Modeling 

System: An Overview, DOE/EIA–0581 (98) 

(Feb.1998), available at: http://tonto.eia.doe.gov/

FTPROOT/forecasting/058198.pdf. 

NEMS used for appliance standards 

analysis is called NEMS–BT12 and is 

based on the AEO version with minor 

modifications.13 The NEMS–BT model 

accounts for the interactions between 

the various energy supply and demand 

sectors and the economy as a whole. 

A. Market and Technology Assessment 

1. Market Assessment 

In the framework document, DOE 

requested information that would 

contribute to the market assessment for 

the commercial clothes washers covered 

in this rulemaking (e.g., current product 

features and efficiencies, product 

feature and efficiency trends, and 

historical product shipments and 

prices). 

AHAM provided commercial clothes 

washer shipment data and shipmentweighted average efficiency data for 

2010 and 2011, disaggregated by 

product class. AHAM also provided 

market share efficiency data for 2010 

and 2011, disaggregated by product 

class. (AHAM, No. 13 at pp. 2–4) AHAM 

commented that the timing of its data 

submittal was too early to be able to 

provide shipment data for products 

complying with the new standards that 

became effective January 8, 2013. 

(AHAM, No. 8 at pp. 3–4). 

DOE requests information on 

historical product shipments and 

market share efficiency data, 

disaggregated by product class, for 2012 

and 2013 as those data become 

available. 

NRDC and ASAP commented that 

DOE should confirm the split between 

the coin laundry and multi-family 

housing sectors of the market, noting 

that the different operating 

characteristics of these sub-sectors have 

significant influence on the life-cycle 

costs and payback period analysis. 

(NRDC and ASAP, No. 11 at p. 2) 

DOE has incorporated the shipments 

data from AHAM throughout the NOPR 

analysis. DOE confirmed through 

discussions with manufacturers that the 

split between coin laundry and multifamily housing used for the last 

rulemaking (15 percent and 85 percent, 

respectively) remains valid for this 

rulemaking. The NOPR analysis reflects 

this breakdown. 

2. Technology Assessment 

In the framework document, DOE 

presented a table of design options it 

believes represent the most viable 

options for commercial clothes washers 

to achieve higher efficiencies. DOE 

requested comment on whether any of 

the technologies should be removed 

from consideration, or whether any 

other technologies not listed in the table 

should be considered as technology 

options. 

ALS recommended that DOE remove 

‘‘ozonated laundering’’ from 

consideration, because testing ALS has 

performed on ozone laundering 

indicates it does not replace the need for 

heated water and detergent to clean 

clothes. Therefore, ALS believes 

ozonated laundry does not improve 

energy efficiency. (ALS, No. 16 at p. 2) 

As described in greater detail in Chapter 

3 and chapter 4 of the TSD, DOE 

retained ozonated laundering as a 

design option because it may improve 

energy efficiency, but eliminated it from 

consideration as a result of the 

screening analysis. 

The California Utilities recommended 

that DOE consider all of the design 

options evaluated in the most recent 

residential clothes washer standards 

rulemaking. The commenters believe 

that all such design options are likely to 

be applicable and transferrable to 

commercial clothes washers. (California 

Utilities, No. 8 at p. 4) As described in 

the framework document, DOE 

eliminated from consideration those 

design options from the prior 

commercial clothes washer and 

residential clothes washer rulemakings 

that DOE has determined would provide 

negligible, if any, energy savings. DOE 

also eliminated technologies that it 

determined were not relevant to the 

commercial clothes washer market. 

Chapter 3 and chapter 4 of the TSD 

provide detailed information regarding 

DOE’s analysis of each design option. 

NRDC and ASAP suggested that DOE 

add temperature-differentiated pricing 

controls to the list of technology options 

that manufacturers can use to reduce 

energy consumption in machine 

operation. The commenters noted that 

this feature is already being offered by 

Whirlpool and Alliance Laundry 

Systems. NRDC and ASAP stated that 

temperature-differentiated pricing offers 

launderers the incentive to opt for lower 

temperature settings than they might 

otherwise select under undifferentiated 

pricing. Such controls would allow a 

machine’s owner to pass through a share 

of the resulting hot water energy savings 

to the end user, thus incentivizing 

energy savings. NRDC and ASAP 

suggested that the test procedure for 

commercial clothes washers could allow 

credit for inclusion of such a feature 

without altering the mechanics of the 

test procedure itself. (NRDC, Public 

Meeting Transcript, No. 12 at p. 47–48; 

NRDC and ASAP, No. 11 at p. 3) 

Temperature-differentiated pricing 

offers the potential to incentive energy 

savings by providing favorable vend 

pricing for lower-temperature settings. 

DOE’s market analysis confirmed the 

availability of this feature on multiple 

clothes washer models from multiple 

manufacturers. DOE has therefore added 

temperature-differentiated pricing 

controls to the list of technology options 

for consideration. DOE does not have 

any information, however, regarding the 

degree to which this feature changes the 

temperature selection frequencies of end 

users. Therefore, as described in further 

detail in Chapter 5 of the TSD, DOE was 

not able to consider this technology for 

further evaluation in its engineering 

analysis. 

B. Screening Analysis 

Following the development of the 

initial list of design options, DOE 

conducts a screening analysis of each 

design option based on the following 

factors: (1) Technological feasibility; (2) 

practicability to manufacture, install 

and service; (3) adverse impacts on 

product utility or product availability; 

and (4) adverse impacts on health or 

safety. (10 CFR part 430, subpart C, 

appendix A, section 4(a)(3) and (4).) 

DOE did not receive any comments 

objecting to the proposed design options 

based on these screening criteria. DOE 

did, however, receive general comments 

regarding the impacts of higher 

efficiency levels on product utility, 

which DOE addressed as part of its 

engineering analysis. 

C. Engineering Analysis 

1. General Approach 

The purpose of the engineering 

analysis is to characterize the 

relationship between the incremental 

manufacturing cost and efficiency 

improvements of commercial clothes 

washers. DOE used this cost-efficiency 

relationship as input to the PBP, LCC, 

and NES analyses. As proposed in the 

framework document, DOE conducted 

the engineering analysis for this 

rulemaking using the efficiency-level 

approach supplemented with a designoption approach. Using the efficiencylevel approach, DOE examined the 

aggregated incremental increases in 

manufacturer selling price at each of the 

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efficiency levels analyzed. DOE also 

conducted a reverse-engineering 

analysis, including testing and 

teardowns of models at each efficiency 

level, to identify the incremental cost 

and efficiency improvement associated 

with each design option or design 

option combination, supplementing the 

efficiency-level approach with a designoption approach as needed. Chapter 5 of 

the TSD contains a detailed discussion 

of the engineering analysis 

methodology. 

ALS commented that it supports 

DOE’s proposal to use an efficiency 

level approach supplemented by a 

design option approach as needed. 

(ALS, No. 16 at p. 4) 

AHAM commented that it believes 

DOE erroneously stated in the 

framework document that it would 

measure the energy and water 

consumption of representative units at 

each efficiency level under 

consideration using DOE’s test 

procedure at appendix J1. (AHAM, No. 

6 at p. 6; AHAM, Public Meeting 

Transcript, No. 12 at p. 52) DOE 

intended to reference both appendix J1 

and appendix J2 in this instance. DOE 

performed energy and water 

consumption testing using both test 

procedures, which enabled DOE to 

translate the appendix J1-based 

efficiency levels into equivalent levels 

based on appendix J2. DOE used the 

appendix J2 energy and water 

consumption data for its engineering 

analysis and all ‘‘downstream’’ analyses, 

including the LCC, PBP, and NES. 

2. Appendix J2 Efficiency Level 

Translations 

In the framework document, DOE 

proposed baseline and higher efficiency 

levels based on the current metrics MEF 

and WF, which are determined 

according to the appendix J1 test 

procedure. As discussed in prior 

sections, DOE has proposed amended 

standards for commercial clothes 

washers in terms of MEFJ2 and IWF as 

measured using appendix J2. DOE 

performed testing on a representative 

sample of commercial clothes washer 

models to determine, for each baseline 

and higher efficiency level considered 

in the analysis, the equivalent appendix 

J2 efficiency levels corresponding to 

each appendix J1 efficiency level. 

Chapter 5 of the TSD describes the 

methodology DOE used to perform the 

translations between appendix J1 MEF/ 

WF values and appendix J2 MEF/IWF 

values. 

3. Baseline Efficiency Levels 

DOE proposed in the framework 

document to use the amended energy 

conservation standards effective January 

8, 2013 to characterize the baseline 

models for both the top-loading and 

front-loading product classes. 

ALS commented that it supports 

using the 2013 minimum efficiency 

levels as the baseline levels for this 

rulemaking. (ALS, No. 16 at p. 2) DOE 

did not receive any comments objecting 

to the proposed baseline efficiency 

levels. Therefore, as proposed, DOE 

used the January 8, 2013 amended 

energy conservation standards as the 

baseline efficiency levels for this 

rulemaking. 

4. Front-Loading Higher Efficiency 

Levels 

In the framework document, DOE 

proposed analyzing the higher 

efficiency levels shown in Table IV.1 for 

the front-loading product class. The 

efficiency levels presented in the 

framework document were based on 

MEF and WF as measured using 

appendix J1. Table IV.1 also provides 

the equivalent levels based on MEFJ2

and IWF as measured using appendix J2 

test procedure. DOE invited comment 

on the appropriateness of these frontloading efficiency levels. 

TABLE IV.1—FRONT-LOADING EFFICIENCY LEVELS

Level Efficiency level source 

Appendix J1 metrics Appendix J2 metrics 

MEF WF MEFJ2 IWF 

Baseline ............................................ DOE Standard .................................. 2.00 5.5 1.65 5.2 

1 ........................................................ CEE Tier 2 ....................................... 2.20 4.5 1.80 4.5 

2 ........................................................ CEE Tier 3 ....................................... 2.40 4.0 2.00 4.1 

3 ........................................................ Maximum Available .......................... 2.60 3.7 2.20 3.9 

AHAM commented that rinsing 

performance could become a concern at 

some of the levels DOE has proposed, 

noting that every manufacturer would 

have its own opinion at which level, if 

any, this would occur. AHAM stated 

that measuring the impact of the 

proposed levels on cleaning and rinsing 

performance may be difficult because 

currently no test procedures are 

available to link cleaning and rinsing 

performance with the energy 

performance measured in DOE’s test 

procedure. (AHAM, No. 6 at pp. 4–5) 

ALS commented that it strongly 

opposes any consideration of higher 

efficiency levels for front-loading 

commercial clothes washers. ALS stated 

that its tests on competitive frontloading products with more stringent 

efficiency levels have shown that with 

large load sizes, the clothing in the 

center of the load does not get wetted by 

water during the wash portion of the 

cycle. ALS believes it would not be 

appropriate for DOE to propose stricter 

standards that would create this kind of 

result in a front-loading commercial 

clothes washer. (ALS, No. 16 at p. 3) 

The California Utilities suggested that 

DOE include two additional frontloading efficiency levels corresponding 

to the top two efficiency levels 

considered during the most recent 

residential clothes washer rulemaking: 

2.60 MEF/3.8 WF and 2.89 MEF/3.7 WF, 

as measured using appendix J1. 

NRDC commented that while DOE 

proposed the ‘‘maximum available’’ 

efficiency level in the framework 

document, DOE did not indicate the 

maximum efficiency level that is 

technologically feasible (i.e., the ‘‘max 

tech’’ level). (NRDC, Public Meeting 

Transcript, No. 12 at p. 55) 

DOE notes that it developed its list of 

front-loading efficiency levels based on 

a review of commercial clothes washer 

products currently on the market. DOE 

confirmed through its market 

assessment that products are available 

for purchase at each of the identified 

efficiency levels. DOE performed 

appendix J1 and appendix J2 testing on 

a representative sample of commercial 

clothes washer models at each proposed 

efficiency level. To investigate concerns 

regarding potential impacts on cleaning 

performance, rinsing performance, and 

solid particle removal, DOE performed 

additional testing on each model using 

AHAM’s HLW–1–2010 test method: 

Performance Evaluation Procedures for 

Household Clothes Washers (hereafter, 

‘‘AHAM HLW–1–2010’’). Specifically, 

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DOE performed the soil/stain removal, 

rinsing effectiveness, and sand removal 

tests provided in HLW–1–2010. DOE’s 

testing indicated that front-loading 

commercial clothes washers are 

available on the market at the proposed 

amended standard level that provide 

equivalent washing, rinsing, and solid 

particle removal as current baseline 

units. Chapter 5 of the TSD describes 

these test results in greater detail. 

Regarding the higher efficiency levels 

considered in the residential clothes 

washer rulemaking, DOE notes that the 

2.60 MEF/3.8 WF efficiency level 

suggested by the commenter 

corresponds closely with the maximum 

level proposed by DOE, 2.60 MEF/3.7 

WF. DOE does not believe that the more 

stringent level of 2.89 MEF/3.7 WF 

would be appropriate for consideration 

in this commercial clothes washer 

rulemaking. First, no commercial 

clothes washer models are currently 

available on the market at that efficiency 

level. Second, some of the design 

options that would be required to 

achieve that efficiency level could 

negatively wash basket size and cycle 

time. Most notably, achieving the 

highest efficiency levels in the frontloading residential clothes washer 

market requires large-capacity wash 

baskets greater than 3.9 cubic feet and 

cycle times of 50 minutes or longer. 

DOE notes that EPCA’s product 

coverage definition of a front-loading 

commercial clothes washer specifies a 

maximum capacity of 3.5 cubic feet, so 

machines with the larger capacity wash 

baskets would not be considered 

covered equipment subject to DOE’s 

energy conservation standards. (42 

U.S.C. 6311(21)) In addition, as noted 

previously, a larger clothes container 

capacity is considered a detriment to 

commercial clothes washer owners 

because a larger capacity wash tub may 

result in fewer wash cycles performed 

by the end-user customer. In 

competitive markets, coin-operated 

laundries may not be able to sustain 

higher vend fares to compensate for the 

lower number of turns per day. 

Furthermore, cycle times of 50 minutes 

would constitute a substantial increase 

over the current 34 minute average cycle 

time as measured by DOE. Longer cycle 

times decrease the number of possible 

turns per day on a given clothes washer, 

which is more significant in a 

laundromat or multi-family laundry 

setting for consumers waiting on the 

machine to finish its cycle, as well as 

laundromat owners and multi-family 

laundry route operators looking to 

maximize daily laundry throughput. 

Based on the results of its market and 

technology assessment and engineering 

analysis, DOE has tentatively 

determined that the maximum available 

efficiency level identified in the 

framework document represents the 

maximum efficiency level that is 

technologically feasible for front-loading 

commercial clothes washers. 

5. Top-Loading Higher Efficiency Levels 

In the framework document, DOE 

stated that it was unaware at the time of 

any top-loading commercial clothes 

washers that exceeded the January 8, 

2013 baseline efficiency level of 1.60 

MEF/8.5 WF. Therefore, DOE did not 

specify any higher efficiency levels for 

top-loading commercial clothes washers 

in the framework document. DOE also 

stated, however, that should 

manufacturers develop models above 

the baseline efficiency level, or should 

working prototypes above the baseline 

efficiency level become available, DOE 

would consider incorporating additional 

efficiency levels in its analysis. 

Since the publishing of the framework 

document, DOE has become aware of 

multiple top-loading clothes washers on 

the market, from multiple 

manufacturers, at higher efficiency 

levels than the baseline level 

represented by the January 8, 2013 

amended standards. Accordingly, DOE 

analyzed the higher efficiency levels 

shown in Table IV.2 for the top-loading 

product class. Table IV.2 shows the 

efficiency levels in terms of MEF and 

WF as measured using appendix J1, as 

well as MEFJ2 and IWF as measured 

using appendix J2. 

TABLE IV.2—TOP-LOADING EFFICIENCY LEVELS

Level Efficiency level source 

Appendix J1 metrics Appendix J2 metrics 

MEF WF MEFJ2 IWF 

Baseline ............................................ DOE Standard .................................. 1.60 8.5 1.15 8.9 

1 ........................................................ Gap Fill ............................................. 1.70 8.4 1.35 8.8

3 ........................................................ Maximum Available .......................... 1.85 6.9 1.55 6.9 

AHAM commented that more efficient 

standard levels for top-loading 

commercial clothes washers are not 

justified, believing that standards more 

stringent than the current level could 

create performance concerns. AHAM 

stated that as hot water and water levels 

are reduced, cleaning and rinse 

performance will suffer and may no 

longer meet consumer expectations at 

standard levels beyond the January 2013 

levels. AHAM also expressed concern 

that amended standards could require 

changes in the spin speed, heavier lids, 

and door locks, and that such changes 

could negatively impact consumer and 

end-user utility. AHAM noted, for 

example, that consumers may find it 

more difficult to use a clothes washer 

with a heavier lid or may not be able to 

add clothing mid-cycle due to door 

locking. (AHAM, No. 6 at pp. 4–5) 

ALS opposes any consideration of 

higher efficiency levels for top-loading 

commercial clothes washers. At the time 

of its comment submittal, ALS was not 

aware of any top-loading products that 

exceed the January 2013 standard level. 

ALS stated that not enough time has 

elapsed to evaluate consumer response 

or acceptability resulting from 

deploying new top-loading models at 

the January 2013 standard level. 

Accordingly, ALS believes the 

appropriate max-tech level for toploading commercial clothes washers is 

the 2013 DOE minimum standard. ALS 

stated that it had opposed DOE’s 

decision during the prior rulemaking to 

establish the amended standard level at 

the max-tech level, and that it had 

commented that removing hot water 

from the wash cycle to achieve the 

proposed max-tech level would reduce 

cleaning performance and negatively 

impact utility. ALS further commented 

that ‘‘hot’’ water is commonly 

recognized as 120 degrees Fahrenheit 

and above; yet, according to ALS, the 

max-tech model from the prior 

rulemaking provides 112 degrees wash 

water, which is commonly recognized 

as ‘‘warm’’. ALS believes that further 

increasing the top-loading standard 

level would further decrease consumer 

utility. (ALS, No. 16 at pp. 3–4) 

The California Utilities suggested that 

DOE analyze higher efficiency levels for 

top-loading commercial clothes washers 

corresponding to the higher efficiency 

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levels that DOE had analyzed during the 

most recent residential clothes washer 

rulemaking. The California Utilities 

recommended levels ranging from 

1.72MEF/8.0WF to 2.47MEF/3.6WF at 

the max-tech level, as measured using 

appendix J1. (California Utilities, No. 8 

at p. 4) 

NEEA commented that top-loading 

clothes washer technology has 

advanced, but that it is not clear that the 

marketplace has incorporated the 

newest technologies. NEEA 

recommended that DOE review the maxtech level for top-loading commercial 

clothes washers. (NEEA, No. 10 at p. 2) 

NRDC and ASAP commented that the 

absence of products on the market at a 

particular efficiency level above the 

baseline level does not necessarily mean 

that efficiency levels above the baseline 

are not technologically feasible. NRDC 

and ASAP added that should DOE 

retain separate product classes for toploading and front-loading commercial 

clothes washers, DOE must identify a 

max-tech level for the top-loading 

product class, noting that technology 

options may exist for improving 

efficiency that have not yet been 

incorporated into current products. 

(NRDC and ASAP, No. 11 at p. 4) 

DOE developed its list of top-loading 

efficiency levels based on a review of 

commercial clothes washer products 

currently on the market. DOE gathered 

information through product testing and 

teardowns since the framework meeting 

that reflect the state of the commercial 

clothes washer market following the 

January 2013 product transitions. 

DOE confirmed through its market 

assessment that products are available 

for purchase at each of the identified 

efficiency levels. DOE performed 

appendix J1 and appendix J2 testing on 

a representative sample of top-loading 

commercial clothes washer models at 

each proposed efficiency level. To 

investigate concerns regarding potential 

impacts on cleaning performance, 

rinsing performance, and solid particle 

removal, DOE performed additional 

testing on each model using AHAM’s 

HLW–1–2010 test method. DOE testing 

indicated that top-loading commercial 

clothes washers are available on the 

market at the proposed amended 

standard level that provide equivalent 

washing performance, rinsing 

performance, and solid particle removal 

as current baseline units. Chapter 5 of 

the TSD describes these test results in 

greater detail. Regarding potential 

consumer utility impacts associated 

with door locks, DOE’s market analysis 

indicates that top-loading models 

without door locks are currently 

available on the market at the proposed 

amended standard level. 

Regarding the higher efficiency levels 

considered in the residential clothes 

washer rulemaking, DOE does not 

believe that the more stringent levels 

above the identified maximum available 

level would be appropriate for 

consideration in this commercial 

clothes washer rulemaking, for many of 

the same reasons described previously 

for the front-loading efficiency levels. 

First, no commercial clothes washer 

models are currently available on the 

market above 1.85MEF/6.9WF, as 

measured using appendix J1. Second, 

some of the design options that would 

be required to achieve those higher 

efficiency levels could be perceived by 

the machine owners and/or end users as 

negatively impacting wash basket size. 

Most notably, achieving the highest 

efficiency levels in the residential 

clothes washer market requires 

implementing large-capacity wash 

baskets greater than 4.3 cubic feet. DOE 

notes that EPCA’s product coverage 

definition of a top-loading commercial 

clothes washer specifies a maximum 

capacity of 4.0 cubic feet, so units with 

the larger-capacity wash baskets would 

not be covered equipment subject to 

DOE’s energy conservation standards. 

(42 U.S.C. 6311(21)) In addition, as 

noted previously, a larger clothes 

container capacity is considered a 

detriment to commercial clothes washer 

owners because a larger-capacity tub 

may result in fewer wash cycles 

performed by the end-user customer. 

Furthermore, the max-tech residential 

clothes washers lack an agitator and 

instead use a circular wash plate that 

requires different loading instructions 

than clothes washers with traditional 

agitators. Manufacturers typically 

instruct users not to load garments 

directly over the center of the wash 

plate, so that the center of the wash 

plate remains visible when loaded. It is 

unlikely that such specialized loading 

instructions would be implementable in 

a commercial laundry environment such 

that the wash performance of the unit 

would be maintained. 

Based on the results of its market and 

technology assessment and engineering 

analysis, DOE has determined that the 

maximum available efficiency level 

identified in Table IV.2 represents the 

maximum efficiency level that is 

technologically feasible for top-loading 

commercial clothes washers. 

6. Impacts on Cleaning Performance 

As mentioned in the discussion of 

front-loading and top-loading higher 

efficiency levels, DOE conducted 

performance testing to quantitatively 

evaluate potential impacts on cleaning 

performance, rinsing performance, and 

solid particle removal as a result of 

higher standard levels. As described in 

greater detail in Chapter 5 of the TSD, 

DOE tested a representative sample of 

commercial clothes washers at each 

efficiency level using AHAM’s HLW–1– 

2010 test procedure. For each clothes 

washer, DOE tested the maximum load 

size specified in appendix J2, rounded 

to the nearest pound, using the warm 

wash/cold rinse cycle. Manufacturers 

indicated that the maximum load size is 

particularly relevant to commercial 

clothes washer owners and operators 

because end-users often overload the 

machines in order to limit their total 

laundry cost. DOE notes that the warm 

wash/cold rinse temperature selection 

has the highest usage factor in appendix 

J2. The test results indicate that units 

meeting the proposed new standard 

levels are capable of providing washing 

performance, rinsing performance, and 

solid particle removal results equivalent 

to current baseline products. 

ALS commented that no industry test 

method currently exists for measuring 

the cleaning performance of commercial 

clothes washers, nor has the industry 

agreed upon an acceptable range of 

performance characteristics. ALS 

acknowledged AHAM’s HLW–1 

Performance Evaluation Procedures for 

Household Clothes Washers, but stated 

that it may not be fully appropriate for 

measuring the performance of 

commercial clothes washers. (ALS, No. 

16 at p. 4) 

DOE consulted with a number of 

manufacturers who indicated that 

AHAM HLW–1–2010 would be the most 

appropriate test method to determine 

relative cleaning performance across 

different commercial clothes washer 

models. DOE recognizes that AHAM 

HLW–1–2010 is typically used to 

measure the performance of residential 

clothes washers, but given the 

similarities in physical construction, 

DOE believes the test procedure is 

appropriate for commercial clothes 

washers. DOE also acknowledges that 

the commercial clothes washer industry 

has not agreed upon acceptable ranges 

of performance characteristics; 

therefore, DOE’s test results should be 

used for relative comparison purposes 

only. 

D. Markups Analysis 

The markups analysis develops 

appropriate markups in the distribution 

chain to convert the estimates of 

manufacturer selling price derived in 

the engineering analysis to customer 

prices. (‘‘Customer’’ refers to purchasers 

of the equipment being regulated.) DOE 

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14U.S. Census Bureau, Economic Census, 

Business Expenses Survey, Wholesale Trade, 

Machinery, Equipment and Supplies Merchant 

Wholesalers, 2007. (Last accessed February, 2013.) 

15 DOE did not rely on the Commercial Building 

Energy Consumption Survey (CBECS) conducted by 

DOE’s Energy Information Administration (EIA) 

because energy and water consumption is not 

specified for buildings identified with laundry 

facilities in the CBECS dataset. 

calculates overall baseline and 

incremental markups based on the 

equipment markups at each step in the 

distribution chain. The incremental 

markup relates the change in the 

manufacturer sales price of higher 

efficiency models (the incremental cost 

increase) to the change in the customer 

price. 

For the three key CCW market 

segments—laundromats, private multifamily housing, and large institutions— 

data indicate that an overwhelming 

majority of commercial clothes washers 

are sold through either distributors or 

route operators. For today’s NOPR, DOE 

used two distribution channels used in 

the 2010 Final Rule—manufacturer to 

distributor to owner/lessee, and 

manufacturer to route operator to 

owner/lessee. For purposes of 

developing the markups for commercial 

clothes washers, DOE estimated that the 

markups and the resulting consumer 

equipment prices determined for the 

distribution channel involving 

distributors would be representative of 

the prices paid by customers acquiring 

their equipment from route operators. 

DOE based the distributor markups 

for commercial clothes washers on 

financial data for the sector Machinery, 

Equipment and Supplies Merchant 

Wholesalers from the 2007 U.S. Census 

Business Expenses Survey (BES), which 

is the most recent available survey.14

This sector includes the subsector 

Laundry Machinery, Equipment, and 

Supplies, Commercial, Merchant 

Wholesalers, which specifically sells 

commercial clothes washers. DOE 

calculated overall baseline and 

incremental markups based on the 

equipment markups at the intermediate 

step in the distribution chain. The 

incremental markup relates the change 

in the manufacturer sales price of higher 

efficiency models (the incremental cost 

increase) to the change in the customer 

price. Chapter 6 of the NOPR TSD 

provides further detail on the estimation 

of markups. 

E. Energy and Water Use Analysis 

The energy and water use analysis 

provides estimates of the annual energy 

and water consumption of commercial 

clothes washer units at the considered 

efficiency levels. DOE uses these values 

in the LCC and PBP analyses and in the 

NIA. DOE developed energy and water 

consumption estimates for all 

equipment classes analyzed in the 

engineering analysis. The analysis seeks 

to capture the range of CCW use in the 

field. 

The framework document outlined 

DOE’s intention to base the energy and 

water use analysis on the energy and 

water use per cycle and the number of 

cycles per year. 

The test procedure uses a single value 

for number of cycles, which is based on 

residential use. For the energy and 

water use analysis, DOE established an 

appropriate range of usage specific to 

CCW in the field. Because the 

predominant applications of CCWs are 

in multi-family buildings and 

laundromats, DOE focused on these two 

building applications to determine 

appropriate values for number of CCW 

cycles per year. 

NRDC and ASAP commented that 

DOE should include all major product 

categories in its analysis for this 

rulemaking. The commenters noted that 

‘‘other commercial applications’’ in the 

statutory definition of commercial 

clothes washers include washers used 

for on-premise laundry. Further, the 

commenters stated that the on-premise 

laundry category (such as in the 

hospitality industry) was largely ignored 

in the technical analysis for the January 

2010 final rule. The commenters added 

that while the total unit count may be 

smaller than coin laundries and multihousing laundry, this subgroup may 

have distinctive usage factors that will 

influence total energy and water use for 

covered commercial clothes washers. 

(NRDC and ASAP, No. 11 at p. 1) 

DOE acknowledges that the ‘‘other 

commercial applications’’ category in 

the statutory definition would include 

applications other than coin-operated 

laundry and multi-family housing 

laundry. However, DOE is not aware of 

any data indicating the prevalence of 

covered products in other applications 

such on-premise laundries or the 

hospitality industry. Furthermore, DOE 

is not aware of any data indicating how 

the usage patterns of such products 

would compare to the usage patterns of 

coin-operated and multi-housing 

laundries. Therefore, DOE has no 

information on which to base a separate 

analysis for on-premise laundry usage. 

Further, discussions with manufacturers 

have supported DOE’s understanding 

that applications other than coinoperated laundries and multi-family 

housing laundries constitute a small 

minority of installations of covered 

commercial clothes washers. For these 

reasons, DOE’s analysis for this NOPR 

focuses on the coin-operated laundry 

and multi-housing laundry applications, 

which represent the large majority of 

commercial clothes washer usage. 

ALS suggested that DOE seek 

stakeholder input on new sources for 

data that can assist in characterizing the 

cycles per year for CCWs. (ALS, No. 97 

at p. 5) DOE included all available 

studies on CCW usage to establish 

representative usage. DOE welcomes 

information on data sources other than 

those mentioned in today’s NOPR. 

For the NOPR analysis, DOE relied on 

several research studies to arrive at a 

range of annual use cycles. The average 

values are 1,074 and 1,483 for multifamily and laundromat applications, 

respectively. The data sources that 

informed these usage numbers include 

Multi-Housing Laundry Association 

(MLA) and the Coin Laundry 

Association (CLA), Southern California 

Edison, and San Diego Gas and Electric, 

as well as research sponsored by the 

MLA and the CLA. Chapter 7 of the 

NOPR TSD describes these sources in 

detail.15

To calculate the energy and water use 

per cycle, DOE used the new Appendix 

J2 test procedure, as described in the 

paragraphs that follow. (77 FR 13888, 

Mar. 7, 2012). Based on the known 

MEFJ2, IWF, and remaining moisture 

content (RMC) of the washer, the test 

procedure provides algorithms to derive 

energy and water use per cycle. The 

energy use analysis for today’s NOPR 

consists of three related parts—the 

machine energy use, the dryer energy 

use and the water heating energy use. 

DOE determined the per-cycle 

machine energy use from the tests 

results of the considered models, 

performed using the current DOE test 

procedure (77 FR 13888, Mar. 7, 2012). 

DOE determined the per-cycle clothes 

drying energy use by using remaining 

moisture content (RMC) values 

contained in the cost/efficiency data set 

developed in the engineering analysis. 

The energy required to remove moisture 

from clothes, i.e., the dryer energy, is a 

significant component of total clothes 

washer energy consumption. The 

equation used to determine this energy 

component is as described in the 

current DOE test procedure. 

DOE determined the per-cycle waterheating energy use by first determining 

the total per-cycle energy use (the 

clothes container volume divided by the 

MEFJ2) and then subtracting from it the 

per-cycle clothes-drying and machine 

energy. 

Southern Company noted the 

importance of water heating energy and 

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16The Monte Carlo process statistically captures 

input variability and distribution without testing all 

possible input combinations. Therefore, while some 

atypical situations may not be captured in the 

analysis, DOE believes the analysis captures an 

adequate range of situations in which small, large, 

and very large air-cooled commercial package air 

conditioning and heating equipment operate. 

17 2012–04 Direct Final Rule Technical Support 

Document—Appendix 8–E. Estimation of 

Equipment Price Trends for Residential Clothes 

Washers. http://www.regulations.gov/

#!documentDetail;D=EERE-2008-BT-STD-0019- 

0047. 

dryer energy in the consideration of 

CCW energy use, and raised concerns 

about the validity of the parameters 

specified in the test procedure. 

Regarding water heating energy, 

Southern Company stated that the 

assumed efficiency in the 2010 final 

rule DOE of 100% for electric water 

heaters and 75% for gas water heaters 

was reasonable, but the values should 

be updated as the weighted average 

efficiency of installed water heaters 

changes over time. (Southern, No. 9 at 

p. 1) DOE research indicates that the 

efficiency of the stock of commercial 

water heaters is changing very slowly, 

so for today’s NOPR it used the same 

efficiencies as in the 2010 final rule. 

Regarding dryer energy, Southern 

Company stated that energy use for 

drying clothes is highly dependent on 

consumer behavior, and noted that 

commercial dryers are usually equipped 

with a timer and do not have moisture 

sensors. Southern also questioned the 

value used for variable DEF, the 

nominal energy required for a clothes 

dryer to remove moisture from clothes. 

It stated that the currently used DEF of 

0.5 kWh per pound appears to assume 

perfect operation and efficiency of 

drying. They recommend DOE consider 

adjustments to the assumed benefits of 

reduced clothing moisture for dryer 

operation. (Southern, No. 9 at p. 2) 

DOE’s current approach for 

quantifying reduction in dryer energy 

use from an increase in CCW efficiency 

is based on the existing test procedure 

for residential clothes washers. DOE 

acknowledges that operating conditions 

for commercial dryers may differ from 

the conditions of residential dryers, but 

DOE did not find any data to support 

changing the dryer energy use 

calculation. However, in response to 

comments received, DOE considered a 

sensitivity in the LCC and PBP analysis 

in which the reduction in dryer energy 

use is half of what is assumed in the test 

procedure. 

Southern Company also stated that it 

is aware of a small soon-to-becompleted study conducted by the 

Electric Power Research Institute that 

found no measurable savings for high 

efficiency equipment for direct energy 

use by residential washers and dryers. 

(Southern, No. 9 at p. 2) DOE attempted 

to obtain the study on observed energy 

savings from washers in the field, but 

EPRI indicated that the study was 

available only to EPRI members. Thus, 

DOE was not able to evaluate the 

findings. In addition, DOE has concerns 

regarding both the sample size and the 

applicability of a study of residential 

equipment to the commercial 

equipment that is the subject of this 

analysis. 

F. Life-Cycle Cost and Payback Period 

Analysis 

The purpose of the LCC and PBP 

analysis is to analyze the effects of 

potential amended energy conservation 

standards on customers of commercial 

clothes washers by determining how a 

potential amended standard affects their 

operating expenses (usually decreased) 

and their total installed costs (usually 

increased). 

The LCC is the total customer expense 

over the life of the equipment, 

consisting of equipment and installation 

costs plus operating costs over the 

lifetime of the equipment (expenses for 

energy use, maintenance, and repair). 

DOE discounts future operating costs to 

the time of purchase using customer 

discount rates. The PBP is the estimated 

amount of time (in years) it takes 

customers to recover the increased total 

installed cost (including equipment and 

installation costs) of a more efficient 

type of equipment through lower 

operating costs. DOE calculates the PBP 

by dividing the change in total installed 

cost (normally higher) due to a standard 

by the change in annual operating cost 

(normally lower) that results from the 

standard. 

For any given efficiency level, DOE 

measures the PBP and the change in 

LCC relative to an estimate of the basecase efficiency distribution. The basecase estimate reflects the market in the 

absence of amended energy 

conservation standards, including the 

market for equipment that exceeds the 

current energy conservation standards. 

DOE typically develops a consumer 

sample for determining PBPs and LCC 

impacts. Because EIA’s Commercial 

Building Energy Consumption Survey 

(CBECS) does not provide the necessary 

data to develop one for CCWs, DOE 

established the variability and 

uncertainty in energy and water use by 

defining the uncertainty and variability 

in the use (cycles per day) of the 

equipment. The variability in energy 

and water pricing was characterized by 

regional differences in energy and water 

prices. 

DOE expresses the LCC and PBP 

results as the number of units 

experiencing economic impacts of 

different magnitudes. DOE models both 

the uncertainty and the variability in the 

inputs to the LCC and PBP analysis 

using Monte Carlo simulation and 

probability distributions.16 As a result, 

the LCC and PBP results are displayed 

as distributions of impacts compared to 

the base case conditions. 

DOE conducted LCC and PBP analysis 

separately for two applications in each 

of the equipment classes: Laundromats 

and multi-family buildings. These 

applications have different usage 

characteristics. 

Inputs to the LCC and PBP analysis 

are categorized as: (1) Inputs for 

establishing the total installed cost and 

(2) inputs for calculating the operating 

expense. The following sections contain 

brief discussions of comments on the 

inputs and key assumptions of DOE’s 

LCC and PBP analysis and explain how 

DOE took these comments into 

consideration. 

1. Equipment Costs 

To calculate the equipment prices 

faced by CCW purchasers, DOE 

multiplied the manufacturing costs 

developed from the engineering analysis 

by the supply chain markups it 

developed (along with sales taxes). 

For projecting future CCW prices, 

AHAM stated that DOE should not rely 

on experience curves for the same 

reasons that it expressed in comments 

for the microwave oven rulemaking. 

(AHAM, No. 19 at p. 5) To develop an 

equipment price trend for the NOPR, 

DOE examined the commercial laundry 

and dry-cleaning machinery PPI for the 

period 1993–2012. This index, adjusted 

for inflation, shows a rising trend. 

However, the inflation adjusted trend 

for household laundry equipment 

(which more closely matches CCW units 

because the considered products in this 

rulemaking are mostly residential-style 

units and exclude the larger commercial 

laundry equipment) shows a long-term 

declining trend.17 Given the 

uncertainty, DOE decided to use a 

constant price for the default case for 

CCW units. For the NIA, DOE also 

analyzed the sensitivity of results to 

alternative price forecasts. (See section 

IV.X) 

In the previous CCW rulemaking, 

DOE based the LCC analysis on the 

assumption that any increase in the cost 

of a more efficient unit that is leased 

gets passed on to the building owners 

through the contracting arrangements 

between route operators and building 

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18http://www.eia.gov/electricity/data/eia861/. 

19http://www.eia.gov/naturalgas/monthly/. 

20Raftelis Financial Consultants, Inc. 2012 RFC/ 

AWWA Water and Wastewater Rate Survey. 2013. 

Charlotte, NC, Kansas City, MO, and Pasadena, CA. 

www.raftelis.com/ratessurvey.html. 

owners. NRDC recommended that DOE 

seek information on contracting 

arrangements between route operators 

and building owners. (NRDC, No. 12 at 

p. 81) DOE was unable to obtain 

information about contracting 

arrangements between route operators 

and building owners. The assumption 

that any increase in the cost of a more 

efficient unit that is leased gets passed 

on is consistent with what one would 

expect in a competitive business 

environment. To the extent that costs 

are not passed on, the LCC savings for 

building owners from higher-efficiency 

CCWs would be larger than indicated in 

today’s NOPR. 

2. Installation Costs 

Installation costs include labor, 

overhead, and any miscellaneous 

materials and parts. For today’s NOPR, 

DOE used data from the RS Means 

Mechanical Cost Data, 2013 on labor 

requirements to estimate installation 

costs for CCWs. DOE estimates that 

installation costs do not increase with 

equipment efficiency. 

3. Unit Energy Consumption 

The calculation of annual per-unit 

energy consumption at each considered 

efficiency level is described above in 

section IV.E. 

4. Energy and Water Prices 

DOE used commercial sector energy 

and water prices for both multi-family 

and laundromat applications. DOE 

assumes that common area laundry 

facilities are mainly found in large 

multi-family buildings that receive 

commercial energy and water rates. 

a. Energy Prices 

DOE derived average electricity and 

natural gas prices for 27 geographic 

areas. DOE estimated commercial 

electricity prices for each of the 27 

states and group of states based on 2012 

data from EIA Form 861, Annual 

Electric Power Industry Report.18 DOE 

first estimated an average commercial 

price for each utility, and then 

calculated an average price for each area 

by weighting each utility with 

customers in an area by the number of 

commercial customers served in that 

area. 

DOE estimated average commercial 

natural gas prices in each of the 27 

geographic areas based on 2012 data 

from the EIA publication Natural Gas 

Monthly.19 DOE calculated an average 

natural gas price for each area by first 

calculating the average prices for each 

state, and then calculating a regional 

price by weighting each state in a region 

by its population. 

To estimate the trends in electricity 

and natural gas prices, DOE used the 

price forecasts in AEO 2013. To arrive 

at prices in future years, DOE multiplied 

the average prices described above by 

the forecast of annual average changes 

in national-average commercial 

electricity and natural gas prices. 

Because the AEO forecasts prices only 

to 2040, DOE used the average rate of 

change during 2025–2040 to estimate 

the price trends beyond 2040. 

The spreadsheet tools used to conduct 

the LCC and PBP analysis allow users to 

select either the AEO’s high-growth case 

or low-growth case price forecasts to 

estimate the sensitivity of the LCC and 

PBP to different energy price forecasts. 

b. Water and Wastewater Prices 

DOE obtained commercial water and 

wastewater price data from the Water 

and Wastewater Rate Survey conducted 

by Raftelis Financial Consultants (RFC) 

and the American Water Works 

Association (AWWA).20 NRDC and 

ASAP suggested that DOE use the most 

recent AWWA/Raftelis survey for 

calculating water and wastewater prices. 

(NRDC, No. 11 at p. 4) DOE obtained the 

water and wastewater price data from 

the 2012 Water and Wastewater Rate 

Survey, the most recent survey 

conducted by RFC and AWWA. The 

survey covers approximately 290 water 

utilities and 214 wastewater utilities 

from 44 states and the District of 

Columbia, with water and wastewater 

utilities analyzed separately. The 

samples that DOE obtained of the water 

and waste water utilities are not large 

enough to calculate regional prices for 

all 27 states and group of states. Hence, 

DOE calculated average values at the 

Census region level (Northeast, South, 

Midwest, and West) by weighting each 

state in a region by its population. 

To estimate the future trend for water 

and wastewater prices, DOE used data 

on the historic trend in the national 

water price index (U.S. city average) 

provided by the Bureau of Labor 

Statistics (BLS), adjusted for inflation. 

Generally, DOE extrapolated a future 

trend based on the linear growth from 

1970 to 2012. However, using the linear 

fit would have resulted in a price 

decline in the near-term, which does not 

seem plausible because historically, 

water prices have not declined in the 

country. Therefore, rather than use the 

extrapolated trend to forecast the nearterm trend after 2012, DOE pinned the 

annual price to the value in 2012 until 

2020. Beyond 2020, DOE used the 

extrapolated trend to forecast prices out 

to 2047. 

5. Repair and Maintenance Costs 

Repair costs are associated with 

repairing or replacing components that 

have failed in the appliance; 

maintenance costs are associated with 

maintaining the operation of the 

equipment. For the January 2010 Final 

Rule, DOE included increased repair 

costs for higher efficiency CCWs based 

on an algorithm developed by DOE for 

central air conditioners and heat. This 

algorithm calculates annualized repair 

and maintenance costs by dividing half 

of the equipment retail price over the 

equipment lifetime. DOE requested 

industry input to estimate changes in 

repair and maintenance costs with an 

increase in efficiency of CCW units. 

AHAM stated that higher efficiency 

levels could impact the maintenance 

and repair costs for CCW units. (AHAM, 

No. 6 at p. 5) Since DOE did not receive 

any new inputs from manufacturers or 

national route operators specific to 

repair and maintenance costs, it 

continued with the approach used in 

the January 2010 Final Rule for today’s 

NOPR. This approach does show rising 

maintenance and repair costs as 

efficiency increases. 

6. Lifetime 

Equipment lifetime is the age at 

which the equipment is retired from 

service. For the 2010 Final Rule, DOE 

used a variety of sources to establish 

low, average, and high estimates for 

equipment lifetime in years. DOE 

characterized CCW lifetime with a 

Weibull probability distribution. ALS 

suggested that DOE should expand its 

sources (including route operators) for 

determining the average lifetime of CCW 

units for multi-family and laundry 

applications. (ALS, No. 12 at p. 2) DOE 

utilized the contact list submitted 

during the 2010 Final Rule to reach out 

to national route operators to seek 

information on various inputs to the 

analysis, including lifetime of the units, 

but was unable to obtain information 

from them. For this NOPR, DOE 

updated its data sources (as described in 

chapter 8 of the NOPR TSD), and found 

the same average CCW lifetimes (11.3 

years for multi-family building 

applications and 7.1 years for 

laundromat applications) as used in the 

2010 Final Rule. DOE used the same 

lifetime for each equipment class. 

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7. Discount Rate 

The discount rate is the rate at which 

future expenditures are discounted to 

estimate their present value. The 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 the cost of capital is the 

weighted-average cost to the firm of 

equity and debt financing. DOE uses the 

capital asset pricing model (CAPM) to 

calculate the equity capital component, 

and financial data sources to calculate 

the cost of debt financing. 

For the 2010 Final Rule, DOE 

estimated the weighted-average cost of 

capital of publicly traded firms in the 

key sectors that purchase CCWs (i.e., 

personal services, educational services, 

hotels, and R.E.I.T—building and 

apartment complex owners). For the 

current rulemaking, DOE updated its 

data sources for calculating this cost. 

More details regarding DOE’s estimates 

of customer discount rates are provided 

in chapter 8 of the NOPR TSD. 

8. Base Case Efficiency Distribution 

For the LCC and PBP analysis, DOE 

analyzes higher efficiency levels relative 

to a baseline efficiency level. Some 

consumers, however, may already 

purchase equipment with efficiencies 

greater than the baseline equipment 

levels. To accurately estimate the 

percentage of consumers that would be 

affected by a particular standard level, 

DOE estimates the distribution of 

equipment efficiencies that consumers 

are expected to purchase under the base 

case (i.e., the case without amended 

energy efficiency standards). DOE refers 

to this distribution of equipment energy 

efficiencies as a base-case efficiency 

distribution. 

For today’s NOPR, DOE utilized the 

shipment weighted efficiency 

distributions for 2010–2011 submitted 

by AHAM to establish the base-case 

efficiency distributions. Because the 

data are not sufficient to capture any 

definite trend in efficiency, DOE used 

the 2011 distribution to represent the 

market in the compliance year (2018). 

NRDC and ASAP stated that Energy Star 

unit shipment data should be used in 

considering efficiency trends. (NRDC, 

No. 11 at p. 4) DOE found that the 

Energy Star shipments data matched 

closely with the data submitted by 

AHAM. Table IV.3 presents the market 

shares of the efficiency levels in the 

base case for CCWs. See chapter 8 of the 

TSD for further details on the 

development of CCW base-case market 

shares. 

TABLE IV.3—COMMERCIAL CLOTHES WASHERS: BASE CASE EFFICIENCY DISTRIBUTION

Standard level 

Top-loading Front-loading 

MEFJ2 IWF Market share 

(percent) Standard level MEFJ2 IWF Market share 

(percent) 

Baseline ................ 1.15 8.9 99.5 Baseline ................ 1.65 5.2 28 

1 ............................ 1.35 8.8 0.3 1 ............................ 1.80 4.5 34 

2 ............................ 1.55 6.9 0.3 2 ............................ 2.00 4.1 38 

3 ............................ 2.20 3.9 0 

9. Compliance Date 

DOE calculated the LCC and PBP for 

all customers as if each were to 

purchase new equipment in the year 

that compliance with amended 

standards is required. EPCA, as 

amended, directs DOE to publish a final 

rule amending the standard for the 

products covered by today’s NOPR by 

January 1, 2015. Any amended 

standards would apply to commercial 

clothes washers manufactured three 

years after the date on which the final 

amended standard is published. (42 

U.S.C. 6313(e)(2)(B)) Therefore, for 

purposes of its analysis, DOE used 2018 

as the first year of compliance with 

amended standards. 

10. Payback Period Inputs 

The payback period is the amount of 

time it takes the consumer to recover the 

additional installed cost of more 

efficient equipment, compared to 

baseline equipment, through energy cost 

savings. Payback periods are expressed 

in years. 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 are 

the total installed cost of the product to 

the customer for each efficiency level 

and the average annual operating 

expenditures for each efficiency level. 

The PBP calculation uses the same 

inputs as the LCC analysis, except that 

discount rates are not needed. 

11. Rebuttable-Presumption Payback 

Period 

EPCA establishes a rebuttable 

presumption that a standard is 

economically justified if the Secretary 

finds that the additional cost to the 

consumer of purchasing a product 

complying with an energy conservation 

standard level will be less than three 

times the value of the energy (and, as 

applicable, water) savings during the 

first year that the consumer will receive 

as a result of the standard, as calculated 

under the test procedure in place for 

that standard. For each considered 

efficiency level, DOE determines the 

value of the first year’s energy savings 

by calculating the quantity of those 

savings in accordance with the 

applicable DOE test procedure, and 

multiplying that amount by the average 

energy price forecast for the year in 

which compliance with the amended 

standards would be required. 

G. Shipments Analysis 

DOE uses projections of product 

shipments to calculate the national 

impacts of standards on energy use, 

NPV, and future manufacturer cash 

flows. DOE develops shipment 

projections based on historical data and 

an analysis of key market drivers for 

each product. Historical shipments data 

are used to build up an equipment stock 

and also to calibrate the shipments 

model. 

In projecting CCW shipments, DOE 

accounted for three market segments: (1) 

New construction; (2) existing buildings 

(i.e., replacing failed equipment); and 

(3) retired units not replaced. DOE used 

the non-replacement market segment to 

calibrate the shipments model to 

historical shipments data. 

Based on historical CCW price and 

shipments data, DOE determined that 

the considered standards would be 

unlikely to affect CCW shipments. 

Table IV.4 summarizes the approach 

and data DOE used to derive the inputs 

to the shipments analysis for today’s 

NOPR. DOE projected CCW shipments 

(for both equipment classes) for the new 

construction and replacement markets, 

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21See chapter 9 in Direct Final Rule Technical 

Support Document. http://www.regulations.gov/#

!documentDetail;D=EERE-2008-BT-STD-0019-0047. 

22 Data from the American Housing Survey as 

well as RECS indicate that there has been growth 

of in-unit washer saturation in the multi-family 

housing stock over the last 10–15 years. See chapter 

9 of the NOPR TSD for further discussion. 

23 DOE’s use of MS Excel as the basis for the 

spreadsheet models provides interested parties with 

access to the models within a familiar context. In 

addition, the TSD and other documentation that 

DOE provides during the rulemaking help explain 

the models and how to use them, and interested 

parties can review DOE’s analyses by changing 

various input quantities within the spreadsheet. 

and also accounted for non-replacement 

of retired units. DOE then allocated 

shipments to each of the two equipment 

classes based on the current market 

share of each class. Based on data 

submitted by AHAM, DOE estimated 

that top-loading washers comprise 64 

percent of the market while frontloading washers comprise 36 percent. 

DOE implemented change in the market 

share for the projection period based on 

the historical trend that shows a gradual 

market shift towards front-loading units, 

with the market stabilizing at 52 percent 

and 48 percent for top-loading and 

front-loading by 2047. 

TABLE IV.4—APPROACH AND DATA USED TO DERIVE THE INPUTS TO THE SHIPMENTS ANALYSIS

Inputs Approach 

Number of Equipment Classes ........................... Two: top-loading washers and front-loading washers. Shipments forecasts established for all 

CCWs and then disaggregated into the two equipment classes based on the market share 

of top- and front-loading washers. 

New Construction Shipments ............................. Determined by multiplying multi-housing forecasts by forecasted saturation of CCWs for new 

multi-housing. Multi-housing forecasts with AEO 2013. Verified frozen saturations with data 

from the U.S. Census Bureau’s American Housing Survey (AHS) for 1997–2011. 

Replacements ..................................................... Determined by tracking total equipment stock by vintage and establishing the failure of the 

stock using retirement functions from the LCC and PBP analysis. Retirement functions revised to be based on Weibull lifetime distributions. 

Retired Units not Replaced (i.e., non-replacements).Used to calibrate shipments model to historical shipments data. Froze the percentage of nonreplacements at 31.6 percent for the period 2012–2047 to account for the increased saturation rate of in-unit washers in the multi-family stock between 2000 and 2011 timeframe 

shown by the AHS. 

Historical Shipments ........................................... Data sources include AHAM data submittal, Appliance Magazine, and U.S. Bureau of Economic Analysis’ quantity index data for commercial laundry. Relative market shares of the 

two equipment applications, common-area laundry facilities in multi-family housing and laundromats, estimated to be 85 and 15 percent, respectively. 

DOE implemented a cross-price 

elasticity to capture the response to a 

change in price of one equipment class 

on the demand of the other equipment 

class. Due to insufficient data on CCW 

units, DOE was not able to estimate 

cross-price impacts on the market share 

of top-loading and front-loading 

commercial clothes washers and instead 

relied on its analysis performed for the 

2012 residential clothes washers 

rulemaking.21 The regression results 

suggest that a 10% increase in the price 

of front-loading washers would lead to 

a 10.7% decrease in top-loading 

washers’ market share, holding other 

variables constant and measured as 

changes from the reference case using 

average values for each variable. In this 

case, the front-loading cross-price 

impact (percent change in top-loading 

market share over percent change in 

front-loading price) is 1.07. The results 

indicate that a 20% price increase for 

top-loading washers would yield a 21.49 

percent increase in front-loading market 

share. Thus, in this example, the toploading washer cross-price impact is 

also 1.07. For further details on this 

estimation, please refer to chapter 9 of 

the NOPR TSD. 

1. Shipments by Market Segment 

For the new construction market, DOE 

assumed shipments are driven solely by 

multi-family construction starts. 

Implicit in this assumption is the fact 

that a certain percentage of multi-family 

residents will need to wash their 

laundry in either a common-area 

laundry facility (within the multi-family 

building) or a laundromat. 

For existing buildings replacing 

broken equipment, the shipments model 

uses a stock accounting framework. 

Given the equipment entering the stock 

in each year and a retirement function 

based on the lifetime distribution 

developed in the LCC analysis, the 

model predicts how many units reach 

the end of their lifetime in each year. 

DOE typically refers to new shipments 

intended to replace retired units as 

‘‘replacement’’ shipments. Such 

shipments are usually the largest part of 

total shipments. 

Historical data show a rise in 

shipments in the 2nd half of the 1990s 

followed by a significant drop in 1999– 

2002, and a slower decline since then. 

DOE believes that a large part of the 

decline was due to growth of in-unit 

washers in multi-family housing 

(possibly due to conversions of rental 

property to condominiums), leading to 

non-replacement of failed commercial 

clothes washers in common-area 

laundry facilities.22 To account for the 

decline and to reconcile the historical 

shipments with the accounting model, 

DOE assumed that every retired unit is 

not replaced. Starting in 1999 and 

extending to 2011, DOE estimated the 

share of retired units that were not 

replaced (as discussed in chapter 9 of 

the NOPR TSD). 

H. National Impact Analysis 

The NIA assesses the national energy 

savings (NES) and the national NPV of 

total customer costs and savings that 

would be expected to result from 

amended standards at specific efficiency 

levels. 

DOE used an MS Excel spreadsheet 

model to calculate the energy savings 

and the national customer costs and 

savings from each TSL.23 The NIA 

calculations are based on the annual 

energy consumption and total installed 

cost data from the energy use analysis 

and the LCC analysis. DOE projected the 

lifetime energy savings, energy cost 

savings, equipment costs, and NPV of 

customer benefits for each equipment 

class for equipment sold from 2018 

through 2047. 

DOE evaluated the impacts of 

potential amended standards for frontloading and top-loading CCW by 

comparing base-case projections with 

standards-case projections. The basecase projections characterize energy use 

and customer costs for each equipment 

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class in the absence of amended energy 

conservation standards. 

Table IV.5 briefly describes the key 

inputs for the NIA. The sections 

following provide further details, as 

does chapter 10 of the NOPR TSD. 

TABLE IV.5—INPUTS FOR THE NATIONAL IMPACT ANALYSIS

Input Description 

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

Compliance date ....................................................................................... January 1, 2018. 

Base case efficiency ................................................................................. Based on the current market distribution of efficiencies, with the option 

of a frozen, 1%, and 2% growth in efficiency. 

Standards case efficiency ........................................................................ Based on a ‘‘Roll up’’ scenario to establish a 2018 shipment weighted 

efficiency. 

Annual energy and water consumption per unit ...................................... Calculated for each efficiency level and equipment class based on inputs from the energy and water use analysis. 

Total installed cost per unit ...................................................................... Calculated equipment prices by efficiency level using manufacturer 

selling prices and weighted-average overall markup values. Installation costs vary in direct proportion to the weight of the equipment. 

Electricity and water expense per unit ..................................................... Annual energy use for each equipment class is multiplied by the corresponding average energy and water and wastewater price. 

Escalation of electricity and water prices ................................................. AEO 2013 forecasts (to 2040) and extrapolation beyond 2040 for electricity and gas prices. BLS’s historical Consumer Price Index for 

water for projecting the prices beyond 2020. 

Electricity site-to-primary energy conversion ........................................... A time series conversion factor; includes electric generation, transmission, and distribution losses. 

Discount rates ........................................................................................... 3% and 7% real. 

Present year ............................................................................................. 2013. 

1. Efficiency Trends 

A key component of DOE’s estimates 

of NES and NPV is the equipment 

energy and water efficiencies forecasted 

over time for the base case and for each 

of the standards cases. For the base case, 

DOE considered the lack of change in 

the historical trends and assumed that 

efficiency would remain constant at the 

2018 levels derived in the LCC and PBP 

analysis. DOE provides a 1% and 2% 

efficiency growth rates as options for 

sensitivities. 

To estimate the impact that standards 

would have in the year compliance 

becomes required, DOE used a ‘‘roll-up’’ 

scenario, which assumes that equipment 

efficiencies in the base case that do not 

meet the standard level under 

consideration would ‘‘roll up’’ to meet 

the new standard level and equipment 

shipments at efficiencies above the 

standard level under consideration are 

not affected. In each standards case, the 

efficiency distributions remain constant 

at the 2018 levels for the remainder of 

the shipments forecast period. 

2. National Energy and Water Savings 

For each year in the forecast period, 

DOE calculates the national energy and 

water savings for each standard level by 

multiplying the shipments of frontloading and top-loading by the per-unit 

annual energy and water savings. 

Cumulative energy and water savings 

are the sum of the annual energy and 

water savings over the lifetime of all 

equipment shipped during 2018–2047. 

The annual energy consumption per 

unit depends directly on equipment 

efficiency. DOE used the shipmentweighted energy and water efficiencies 

associated with the base case and each 

standards case, in combination with the 

annual energy and water use data, to 

estimate the shipment-weighted average 

annual per-unit energy and water 

consumption under the base case and 

standards cases. The national energy 

consumption is the product of the 

annual energy consumption per unit 

and the number of units of each vintage, 

which depends on shipments. DOE 

calculates the total annual site energy 

savings for a given standards case by 

subtracting total energy use in the 

standards case from total energy use in 

the base case. Note that shipments are 

the same in the standards cases as in the 

base case. 

DOE converted the site electricity 

consumption and savings to primary 

energy (power sector energy 

consumption) using annual conversion 

factors derived from the AEO 2013 

version of the NEMS. Cumulative 

primary energy and water savings are 

the sum of the national energy and 

water savings for each year in which 

equipment shipped during 2018–2047 

continue to operate. 

DOE has historically presented 

national energy savings in terms of 

primary energy savings. 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 Science, DOE 

announced its intention to use full-fuelcycle (FFC) measures of energy use and 

greenhouse gas and other emissions in 

the national impact analyses and 

emissions analyses included in future 

energy conservation standards 

rulemakings. 76 FR 51281 (August 18, 

2011). While DOE stated in that notice 

that it intended to use the Greenhouse 

Gases, Regulated Emissions, and Energy 

Use in Transportation (GREET) model to 

conduct the analysis, it also said it 

would review alternative methods, 

including the use of EIA’s National 

Energy Modeling System (NEMS). After 

evaluating both models and the 

approaches discussed in the August 18, 

2011 notice, DOE published a statement 

of amended policy in the Federal 

Register in which DOE explained its 

determination that NEMS is a more 

appropriate tool for this specific use. 77 

FR 49701 (August 17, 2012). Therefore, 

DOE is using NEMS to conduct FFC 

analyses. The approach used for today’s 

NOPR, and the FFC multipliers that 

were applied, are described in appendix 

10–A of the NOPR TSD. 

3. Net Present Value of Customer 

Benefit 

The inputs for determining the NPV 

of the total costs and benefits 

experienced by customers of the 

considered equipment are: (1) Total 

annual installed cost; (2) total annual 

savings in operating costs; and (3) a 

discount factor. DOE calculates the 

lifetime net savings for equipment 

shipped each year as the difference 

between the base case and each 

standards case in total savings in 

lifetime operating costs and total 

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24OMB Circular A–4, section E (Sept. 17, 2003). 

Available at: http://www.whitehouse.gov/omb/

circulars_a004_a-4. 

increases in installed costs. DOE 

calculates lifetime operating cost 

savings over the life of each frontloading and top-loading CCW unit 

shipped during the forecast period. 

a. Total Annual Installed Cost 

The total installed cost includes both 

the equipment price and the installation 

cost. For each equipment class, DOE 

calculated equipment prices by 

efficiency level using manufacturer 

selling prices and weighted-average 

overall markup values (weights based 

on shares of the distribution channels 

used). Because DOE calculated the total 

installed cost as a function of equipment 

efficiency, it was able to determine 

annual total installed costs based on the 

annual shipment-weighted efficiency 

levels determined in the shipments 

model. 

As noted in section IV.F.1, DOE 

assumed no change in front-loading and 

top-loading CCW equipment prices over 

the analysis period. However, DOE 

conducted sensitivity analyses using 

alternative price trends: one in which 

prices decline after 2013, and one in 

which prices rise. These price trends, 

and the NPV results from the associated 

sensitivity cases, are described in 

appendix 10–B of the NOPR TSD. 

b. Total Annual Operating Cost Savings 

The per-unit energy and water savings 

were derived as described in section 

IV.H.2. To calculate future electricity 

and natural gas prices, DOE applied the 

projected trend in national-average 

commercial electricity and natural gas 

price from the AEO 2013 Reference 

case, which extends to 2040, to the 

prices derived in the LCC and PBP 

analysis. DOE used the trend from 2025 

to 2040 to extrapolate beyond 2040. To 

calculate future water prices, DOE 

applied the historical price trend based 

on the consumer price index of water, 

published by the Bureau of Labor 

Statistics. 

In addition, DOE analyzed scenarios 

that used the energy price projections in 

the AEO 2013 Low Economic Growth 

and High Economic Growth cases. 

These cases have higher and lower 

energy price trends compared to the 

Reference case. These price trends, and 

the NPV results from the associated 

cases, are described in appendix 10–C of 

the NOPR TSD. 

DOE estimated that annual 

maintenance costs (including minor 

repairs) do not vary with efficiency 

within each equipment class, so they do 

not figure into the annual operating cost 

savings for a given standards case. In 

addition, as noted previously, DOE 

developed annualized repair costs using 

the approach described in Section 

IV.F.5. 

In calculating the NPV, DOE 

multiplies the net dollar savings in 

future years by a discount factor to 

determine their present value. DOE 

estimates the NPV using both a 3- 

percent and a 7-percent real discount 

rate, in accordance with guidance 

provided by the Office of Management 

and Budget (OMB) to Federal agencies 

on the development of regulatory 

analysis.24 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. 

I. Customer Subgroup Analysis 

In analyzing the potential impacts of 

new or amended standards, DOE 

evaluates impacts on identifiable groups 

(i.e., subgroups) of customers that may 

be disproportionately affected by a 

national standard. For the NOPR, DOE 

evaluated impacts on a small business 

subgroup using the LCC spreadsheet 

model. The customer subgroup analysis 

is discussed in detail in chapter 11 of 

the NOPR TSD. 

J. Manufacturer Impact Analysis 

1. Overview 

DOE performed an MIA to estimate 

the impacts of amended energy 

conservation standards on 

manufacturers of commercial clothes 

washers. The MIA has both quantitative 

and qualitative aspects and includes 

analyses of forecasted industry cash 

flows, the INPV, investments in research 

and development (R&D) and 

manufacturing capital, and domestic 

manufacturing employment. 

Additionally, the MIA seeks to 

determine how amended energy 

conservation standards might affect 

manufacturing capacity, and 

competition, as well as how standards 

contribute to overall regulatory burden. 

Finally, the MIA serves to identify any 

disproportionate impacts on 

manufacturer subgroups. 

The quantitative part of the MIA relies 

primarily on the Government Regulatory 

Impact Model (GRIM), an industry cash 

flow model with inputs specific to this 

rulemaking. The key GRIM inputs 

include data on the industry cost 

structure, unit production costs, product 

shipments, manufacturer markups, and 

investments in R&D and manufacturing 

capital required to produce compliant 

products. The key GRIM outputs are the 

INPV, which is the sum of industry 

annual cash flows over the analysis 

period, discounted using the industry 

weighted average cost of capital, and the 

impact to domestic manufacturing 

employment. The model estimates the 

impacts of amended energy 

conservation standards on a given 

industry by comparing changes in INPV 

and domestic manufacturing 

employment between a base case and 

the various TSLs in the standards case. 

To capture the uncertainty relating to 

manufacturer pricing strategy following 

amended standards, the GRIM estimates 

a range of possible impacts under 

different markup scenarios. 

The qualitative part of the MIA 

addresses manufacturer characteristics 

and market trends. Specifically, the MIA 

considers such factors as manufacturing 

capacity, competition within the 

industry, the cumulative impact of other 

regulations, and impacts on 

manufacturer subgroups. The complete 

MIA is outlined in chapter 12 of the 

NOPR TSD. 

DOE conducted the MIA for this 

rulemaking in three phases. In Phase 1 

of the MIA, DOE prepared a profile of 

the commercial clothes washer 

manufacturing industry. DOE used 

public sources of information to derive 

preliminary financial inputs for the 

GRIM (e.g., revenues; materials, labor, 

overhead, and depreciation expenses; 

selling, general, and administrative 

expenses (SG&A); and R&D expenses). 

Sources of data used in this initial 

characterization of the commercial 

clothes washer manufacturing industry 

included company filings of form 10–K 

from the Securities and Exchange 

Commission (SEC), corporate annual 

reports, the U.S. Census Bureau’s 

Economic Census, and reports from Dun 

& Bradstreet. 

In Phase 2 of the MIA, DOE prepared 

an industry cash flow analysis to 

quantify the impacts of new and 

amended energy conservation 

standards. The GRIM uses several 

factors to determine a series of annual 

cash flows starting with the 

announcement of the standard and 

extending over a 30-year period 

following the effective date of the 

standard. These factors include annual 

expected revenues, costs of sales, SG&A 

and R&D expenses, taxes, and capital 

expenditures. In general, energy 

conservation standards can affect 

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12324 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

manufacturer cash flow in three distinct 

ways: (1) Create a need for increased 

investment; (2) raise production costs 

per unit; and (3) alter revenue due to 

higher per-unit prices and changes in 

sales volumes. 

In Phase 3 of the MIA, DOE 

interviewed representative 

manufacturers. During these interviews, 

DOE discussed engineering, 

manufacturing, procurement, and 

financial topics to validate assumptions 

used in the GRIM and to identify key 

issues or concerns. See section IV.J.4 for 

a description of the key issues raised by 

manufacturers during the interviews. As 

part of Phase 3, DOE also evaluated 

subgroups of manufacturers that may be 

disproportionately impacted by 

amended standards or that may not be 

accurately represented by the average 

cost assumptions used to develop the 

industry cash flow analysis. In addition 

to small business manufacturers, such 

manufacturer subgroups may include 

low volume manufacturers (LVMs), 

niche players, and/or manufacturers 

exhibiting a cost structure that largely 

differs from the industry average. DOE 

identified two subgroups for which 

average cost assumptions may not hold: 

small businesses and LVMs. 

Based on the size standards published 

by the SBA and available at http://

www.sba.gov/content/table-smallbusiness-size-standards, to be 

categorized as a small business 

manufacturer of commercial clothes 

washers under North American Industry 

Classification System (NAICS) 333318, 

‘‘Other commercial and service industry 

machinery manufacturing,’’ a 

commercial laundry equipment 

manufacturer and its affiliates may 

employ a maximum of 1000 employees. 

The 1000-employee threshold includes 

all employees in a business’s parent 

company and any other subsidiaries. 

Using this classification in conjunction 

with a search of industry databases and 

the SBA member directory, DOE did not 

identify any manufacturers of 

commercial clothes washers that qualify 

as small businesses. 

Unlike small business manufacturers, 

there is no employment limit associated 

with LVMs. Instead, LVMs are 

characterized by their low overall 

production volumes relative to their 

competitors, often associated with 

specialization within a singular 

industry. In the industry 

characterization from Phase 1, DOE 

identified two manufacturers that 

represent over 90 percent of commercial 

clothes washer shipments.25 DOE 

categorized one of these manufacturers 

as a LVM because of the concentration 

of its business in commercial clothes 

washers relative to its competitors. In 

2012, the LVM derived 98 percent of its 

revenues from the sale of laundry 

equipment and service parts, while, for 

its main competitor, this percentage was 

30 percent. Within the washer segment, 

DOE estimates that the LVM derived 88 

percent of its washer equipment 

revenues from the sale of commercial 

clothes washers covered by this 

rulemaking. Because the commercial 

clothes washer industry itself is 

characterized by low total shipments, 

with less than 200,000 units sold 

annually in the U.S., the concentration 

of this manufacturer’s business in this 

industry qualifies them as an LVM. 

Where the LVM operates at a much 

smaller scale and does not manufacture 

products across a broad range of 

industries, this rulemaking could have 

disproportionate impacts on the LVM 

compared to its large, diversified 

competitors. Accordingly, DOE 

performed an in-depth analysis of the 

issues relating to the commercial clothes 

washer LVM. The manufacturer 

subgroup analysis is discussed in 

greater detail in Chapter 12 of the NOPR 

TSD and in section V.B.2.d of this 

notice. 

2. Government Regulatory Impact Model 

DOE uses the GRIM to quantify the 

changes in industry cash flows resulting 

from amended energy conservation 

standards. The GRIM uses manufacturer 

costs, markups, shipments, and industry 

financial information to arrive at a series 

of base-case annual cash flows absent 

new or amended standards, beginning 

with the present year, 2013, and 

continuing through 2047. The GRIM 

then models changes in costs, 

investments, shipments, and 

manufacturer margins that may result 

from new or amended energy 

conservation standards and compares 

these results against those in the basecase forecast of annual cash flows. The 

primary quantitative output of the GRIM 

is the INPV, which DOE calculates by 

summing the stream of annual 

discounted cash flows over the full 

analysis period. For manufacturers of 

commercial clothes washers, DOE used 

a real discount rate of 8.6 percent, the 

weighted average cost of capital derived 

from industry financials and modified 

based on feedback received during 

confidential interviews with 

manufacturers. 

The GRIM calculates cash flows using 

standard accounting principles and 

compares changes in INPV between the 

base case and the various TSLs. The 

difference in INPV between the base 

case and a standards case represents the 

financial impact of the amended 

standard on manufacturers at that 

particular TSL. As discussed previously, 

DOE collected the necessary 

information to develop key GRIM inputs 

from a number of sources, including 

publicly available data and interviews 

with manufacturers (described in the 

next section). The GRIM results are 

shown in section V.B.2.a. Additional 

details about the GRIM can be found in 

chapter 12 of the NOPR TSD. 

a. Government Regulatory Impact Model 

Key Inputs 

Manufacturer Production Costs 

Manufacturing a higher efficiency 

product is typically more expensive 

than manufacturing a baseline product 

due to the use of more complex and 

typically more costly components. The 

changes in the MPCs of the analyzed 

products can affect the revenues, gross 

margins, and cash flow of the industry, 

making product cost data key GRIM 

inputs for DOE’s analysis. For each 

efficiency level of each equipment class, 

DOE used the MPCs developed in the 

engineering analysis, as described in 

section IV.A.2 and further detailed in 

chapter 5 of the NOPR TSD. 

Additionally, DOE used information 

from its teardown analysis, described in 

section IV.C to disaggregate the MPCs 

into material and labor costs. These cost 

breakdowns and equipment markups 

were validated with manufacturers 

during manufacturer interviews. 

Base-Case Shipments Forecast 

The GRIM estimates manufacturer 

revenues based on total unit shipment 

forecasts and the distribution of 

shipments by efficiency level. Changes 

in sales volumes and efficiency mix 

over time can significantly affect 

manufacturer finances. For this analysis, 

the GRIM uses the NIA’s annual 

shipment forecasts derived from the 

shipments analysis from 2013, the base 

year, to 2047, the end of the analysis 

period. See chapter 9 of the NOPR TSD 

for additional details. 

Standards-Case Shipments Forecast 

For each standards case, the GRIM 

assumes that shipments of products 

below the projected minimum standard 

levels would roll up to the standard 

efficiency levels in response to an 

increase in energy conservation 

standards. The GRIM also assumes that 

demand for high-efficiency equipment 

is a function of price, and is 

independent of the standard level. 

Additionally, the standards case 

shipments forecast includes a partial 

shift of shipments from one equipment 

class to another depending on the 

standard level, reflecting positive crossmstockstill on DSK4VPTVN1PROD with PROPOSALS2

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26 ‘‘Gross margin’’ is defined as revenues minus 

cost of goods sold. On a unit basis, gross margin is 

selling price minus manufacturer production cost. 

In the GRIMs, markups determine the gross margin 

because various markups are applied to the 

manufacturer production costs to reach 

manufacturer selling price. 

price elasticity of demand, as one 

equipment class becomes relatively 

more expensive than the other to 

produce and for consumers to purchase. 

A decrease in shipments offsets the 

relative increase in costs to produce at 

a given TSL for a given equipment class. 

See Chapter 9 of the NOPR TSD for 

additional details. 

Product and Capital Conversion Costs 

Amended energy conservation 

standards may cause manufacturers to 

incur one-time conversion costs to bring 

their production facilities and product 

designs into compliance with the new 

standards. For the purpose of the MIA, 

DOE classified these one-time 

conversion costs into two major groups: 

(1) Product conversion and (2) capital 

conversion costs. Product conversion 

costs are investments in research, 

development, testing, and marketing, 

focused on making product designs 

comply with the new energy 

conservation standard. Capital 

conversion expenditures are 

investments in property, plant, and 

equipment to adapt or change existing 

production facilities so that new 

product designs can be fabricated and 

assembled. 

Stranded Assets 

If new or amended energy 

conservation standards require 

investment in new manufacturing 

capital, there also exists the possibility 

that they will render existing 

manufacturing capital obsolete. If this 

obsolete manufacturing capital is not 

fully depreciated at the time new or 

amended standards go into effect, this 

would result in the stranding of these 

assets, and would necessitate the 

expensing of the residual undepreciated value. 

DOE used multiple sources of data to 

evaluate the level of product and capital 

conversion costs and stranded assets 

manufacturers would likely face to 

comply with amended energy 

conservation standards. DOE used 

manufacturer interviews to gather data 

on the level of investment anticipated at 

each proposed efficiency level and 

validated these assumptions using 

estimates of capital requirements 

derived from the product teardown 

analysis and engineering model 

described in section IV.C. These 

estimates were then aggregated and 

scaled to derive total industry estimates 

of product and capital conversion costs 

and to protect confidential information. 

In general, DOE assumes that all 

conversion-related investments occur 

between the year the final rule is 

published and the year by which 

manufacturers must comply with the 

new or amended standards. The 

investment figures used in the GRIM 

can be found in section V.B.2 of this 

notice. For additional information on 

the estimated product conversion and 

capital conversion costs, see chapter 12 

of the NOPR TSD. 

b. Government Regulatory Impact Model 

Scenarios 

Markup Scenarios 

As discussed in section IV.D, MSPs 

include direct manufacturing 

production costs (i.e., labor, material, 

overhead, and depreciation estimated in 

DOE’s MPCs) and all non-production 

costs (i.e., SG&A, R&D, and interest), 

along with profit. To calculate the MSPs 

in the GRIM, DOE applied manufacturer 

markups to the MPCs estimated in the 

engineering analysis. Modifying these 

markups in the standards case yields 

different sets of impacts on 

manufacturers. For the MIA, DOE 

modeled two standards-case markup 

scenarios to represent the uncertainty 

regarding the potential impacts on 

prices and profitability for 

manufacturers following the 

implementation of amended energy 

conservation standards: (1) A 

preservation of gross margin 26

(percentage) scenario; and (2) a 

preservation of operating profits (in 

absolute dollars) scenario. These 

scenarios lead to different markups 

values that, when applied to the MPCs, 

result in varying revenue and cash flow 

impacts. 

Under the preservation of gross 

margin percentage scenario, DOE 

applied a single, uniform ‘‘gross margin 

percentage’’ markup across all efficiency 

levels. As production costs increase 

with efficiency, this scenario implies 

that the absolute dollar markup will 

increase as well. Based on publicly 

available financial information for 

manufacturers of commercial clothes 

washers and comments from 

manufacturer interviews, DOE assumed 

the industry average markup on 

production costs to be 1.285. Because 

this markup scenario assumes that 

manufacturers would be able to 

maintain their gross margin percentage 

as production costs increase in response 

to an amended energy conservation 

standard, it represents a lower bound of 

industry impacts (higher industry 

profitability) under an amended energy 

conservation standard. 

In the preservation of operating 

profits (in absolute dollars) scenario, 

manufacturer markups are calibrated so 

that operating profits (in absolute 

dollars) in the year after the compliance 

date of the amended energy 

conservation standard is the same as in 

the base case. Under this scenario, as 

the cost of production goes up, 

manufacturers are generally required to 

reduce the markups on their minimally 

compliant products to maintain a cost 

competitive offering. The implicit 

assumption behind this scenario is that 

the industry can only maintain 

operating profits after compliance with 

the amended standard is required. 

Therefore, gross margin (as a 

percentage) shrinks in the standards 

cases. This markup scenario represents 

an upper bound of industry impacts 

(lower profitability) under an amended 

energy conservation standard. 

3. Discussion of Comments 

At the Framework public meeting, 

AHAM commented that DOE should 

interview the customers of commercial 

clothes washer manufacturers, as 

customers will have valuable 

information on issues including the 

impact of higher efficiency standards on 

end user utility and whether standards 

will increase maintenance and repair 

costs (AHAM, No. 13 at pp. 5). Because 

commercial clothes washer customers 

have direct access to the end user, these 

customers may have information 

concerning consumer usage patterns 

and utility, as well as maintenance and 

repair costs. DOE attempted to contact, 

but did not receive any affirmative 

responses, from national route operators 

and trade groups representing multihousing laundry providers and coin 

laundry owners, all of whom purchase 

CCWs. DOE will continue to solicit 

feedback from route operators prior to 

publishing the final rule. 

4. Manufacturer Interviews 

To inform the MIA, DOE interviewed 

manufacturers with an estimated 

combined market share of 95 percent. 

The information gathered during these 

interviews enabled DOE to tailor the 

GRIM to reflect the unique financial 

characteristics of the commercial 

clothes washer industry. These 

interviews provided information that 

DOE used to evaluate the impacts of 

amended energy conservation standards 

on manufacturer cash flows, 

manufacturing capacities, and 

employment levels. 

During the interviews, DOE asked 

manufacturers to describe their major 

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12326 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

concerns about this rulemaking. The 

following sections describe the most 

significant issues identified by 

manufacturers. DOE also includes 

additional concerns in chapter 12 of the 

NOPR TSD. 

a. Impacts to Cleaning Performance 

All of the manufacturers interviewed 

expressed concerns that future energy 

conservation standards would have an 

adverse impact on cleaning performance 

and reliability. One manufacturer 

asserted that products currently 

considered to be at the max-tech 

efficiency level are not truly commercial 

products. Another manufacturer noted 

that reaching the max-tech level would 

require higher spin speeds, which could 

decrease the reliability of the product. 

Two manufacturers expressed concerns 

that the max-tech level for top loaders 

pushes the boundary of acceptable 

water level in terms of both cleaning 

performance and market acceptance. 

The lower water level of max-tech 

products would necessitate lighter loads 

in order to maintain cleaning 

performance. A lighter load size 

requirement would contradict consumer 

tendencies to overload machines. As 

discussed in section IV.C.6, and further 

in chapter 5 of the TSD, DOE has 

determined that the proposed standards 

would not negatively impact the 

cleaning performance of commercial 

clothes washers. 

b. Consumer Behavior 

All manufacturers noted that energy 

efficiency efforts are inherently less 

effective in the commercial clothes 

washer market than in markets for 

residential appliances, including 

residential clothes washers. They 

attributed this to the usage patterns of 

commercial clothes washer end users, 

reflecting the fact that end users: (1) Do 

not own the machines, and (2) pay by 

the load to use machines. Such usage 

patterns include tendencies to put too 

much detergent into machines (leading 

to ‘‘suds lock’’, a condition where the 

clothes washer is unable to achieve full 

spin speed due to the friction caused by 

detergent suds in gap between the inner 

wash basket and outer wash tub), 

overfilling machines with oversized 

loads, choosing to use hot water when 

it is unnecessary to do so, and washing 

clothes twice to counteract the effect of 

having used too much detergent. 

Platform changes and reduced water 

levels of higher efficiency products 

exacerbate these issues. One 

manufacturer noted that there is a steep 

learning curve for end users relating to 

adaptation to low-water machines. For 

instance, end users should be using high 

efficiency detergents in recommended 

quantities, yet are unlikely to do so. 

Concerns that machines are not 

functioning properly leads to increased 

service calls. Another manufacturer 

noted that end user dissatisfaction with 

high efficiency products may drive the 

need for selectable cycle modifiers, 

which would allow end users to choose 

less efficient settings to reach an 

acceptable level of cleaning 

performance to resolve the performance 

issues caused by incorrect use of the 

machines. Selectable modifiers would 

undermine the energy savings otherwise 

achievable with higher efficiency 

machines. 

As discussed in section IV.C.6, and 

further in chapter 5 of the TSD, DOE has 

determined that the proposed standards 

would not negatively impact the 

cleaning performance of commercial 

clothes washers. Furthermore, DOE has 

determined that the proposed standards 

would not require significant design 

(platform) changes to either top-loading 

or front-loading CCWs, and thus would 

not require changes in user operation 

compared to current baseline products. 

Therefore, the consumer behaviors 

noted by commenters would not be 

exacerbated by the proposed amended 

standards. In addition, DOE notes that 

since viable products are readily 

available at the proposed standard 

levels, the use of optional selectable 

cycle modifiers will not be necessary to 

achieve acceptable levels of cleaning 

performance. 

c. Disproportionate Impacts 

Several manufacturers expressed 

concerns relating to competitive impacts 

caused by future energy conservation 

standards. One manufacturer 

specifically noted that a genuine and 

comprehensive approach to redesigning 

products to meet DOE standards will 

result in a competitive disadvantage 

relative to other manufacturers. As this 

company’s revenue is so closely tied to 

commercial clothes washers, they 

predict that any increase in standards 

will impact their business 

disproportionately. For a detailed 

discussion of the manufacturer 

subgroup analysis, see chapter 12 of the 

NOPR TSD. 

d. Market Model Challenges 

The majority of the manufacturers 

interviewed emphasized that the profit 

structure of the commercial clothes 

washer market fundamentally opposes 

increased levels of product efficiency, 

and that an amended conservation 

standard would negatively impact the 

profits of manufacturers’ customers, in 

addition to their own. 

Commercial clothes washer 

manufacturers sell their products to 

either route-operators, distributors, or 

both. Route-operators lease the 

machines to multi-family housing unit 

owners under 5- to 15-year contract 

agreements, and typically provide a 1– 

2 day service guarantee on their 

machines. Distributors sell commercial 

clothes washers to owners of 

laundromats. 

The profits of both route-operators 

and laundromat owners are driven by 

throughput, which is maximized by 

small capacity machines with short 

cycle times (less than 35 minutes). In 

addition to maximizing throughput, one 

manufacturer noted that consistency of 

cycle times (at approximately 32 

minutes) is necessary for ensuring the 

correct number of washers and dryers in 

a given premise or laundromat. 

Thus, commercial clothes washer 

manufacturers are constrained by 

capacity and cycle time limits in any 

efforts to further increase the efficiency 

of their machines. Also, due to the 

length of route-operators lease contracts 

with their customers, if energy 

efficiency improvements necessitate an 

increase in manufacturing selling price, 

any required replacement of units before 

lease contracts are expired will likely 

squeeze route-operators’ profits, as they 

will not be able to pass-through 

increased unit costs to lessees. One 

manufacturer noted that in instances 

where route-operators and laundromat 

owners are able to pass-through the 

costs of energy efficiency 

improvements, this will negatively 

impact end users who are often the least 

able to bear increased costs, as users of 

commercial laundry machines tend to 

be from lower income consumer 

subgroups. 

Finally, several manufacturers 

asserted that higher efficiency machines 

require more complex designs and 

hence more time and money to repair. 

Additionally, efficiency changes, such 

as reduced water levels, are likely to be 

ill-received by end users and will lead 

to increases in service calls and failures. 

Both outcomes will again potentially cut 

into route-operator and laundromat 

owner profits. 

As discussed in section IV.C and 

chapter 5 of the TSD, DOE has 

determined that the proposed standard 

levels would not require any major 

changes in the design complexity of 

CCWs. Wash basket size and cycle time 

under the proposed standards will 

remain within the acceptable ranges 

described by manufacturers. Section 

IV.F.5. describes DOE’s approach for 

considering changes in repair and 

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27 DOE’s FFC was amended in 2012 for reasons 

unrelated to the inclusion of CH4 and N2O. 77 FR 

49701 (Aug. 17, 2012). 

28http://www.epa.gov/climateleadership/

guidance/ghg-emissions.html. 

29U.S. Environmental Protection Agency, 

Compilation of Air Pollutant Emission Factors, AP– 

42, Fifth Edition, Volume I: Stationary Point and 

Area Sources. 1998. http://www.epa.gov/ttn/chief/

ap42/index.html. 

30Forster, P., V. Ramaswamy, P. Artaxo, T. 

Berntsen, R. Betts, D.W. Fahey, J. Haywood, J. Lean, 

D.C. Lowe, G. Myhre, J. Nganga, R. Prinn,G. Raga, 

M. Schulz and R. Van Dorland. 2007: Changes in 

Atmospheric Constituents and in Radiative Forcing. 

In Climate Change 2007: The Physical Science 

Basis. Contribution of Working Group I to the 

Fourth Assessment Report of the Intergovernmental 

Panel on Climate Change. S. Solomon, D. Qin, M. 

Manning, Z. Chen, M. Marquis, K.B. Averyt, 

M.Tignor and H.L. Miller, Editors. 2007. Cambridge 

University Press, Cambridge, United Kingdom and 

New York, NY, USA. p. 212. 

maintenance costs as a result of 

amended standards. 

K. Emissions Analysis 

In the emissions analysis, DOE 

estimated the reduction in power sector 

emissions of carbon dioxide (CO2), 

nitrogen oxides (NOX), sulfur dioxide 

(SO2), and mercury (Hg) from potential 

energy conservation standards for 

commercial clothes washers. In 

addition, DOE estimates emissions 

impacts in production activities 

(extracting, processing, and transporting 

fuels) that provide the energy inputs to 

power plants. These are referred to as 

‘‘upstream’’ emissions. Together, these 

emissions account for the full-fuel-cycle 

(FFC). In accordance with DOE’s FFC 

Statement of Policy (76 FR 51282 (Aug. 

18, 2011)),27 the FFC analysis includes 

impacts on emissions of methane (CH4) 

and nitrous oxide (N2O), both of which 

are recognized as greenhouse gases. 

DOE primarily conducted the 

emissions analysis using emissions 

factors for CO2 and most of the other 

gases derived from data in the Energy 

Information Agency’s (EIA’s) Annual 

Energy Outlook 2013 (AEO 2013). 

Combustion emissions of CH4 and N2O 

were estimated using emissions 

intensity factors published by the 

Environmental Protection Agency 

(EPA), GHG Emissions Factors Hub.28

Site emissions of CO2 and NOX (from 

gas water heaters) were estimated using 

emissions intensity factors from an EPA 

publication.29 DOE developed separate 

emissions factors for power sector 

emissions and upstream emissions. The 

method that DOE used to derive 

emissions factors is described in chapter 

13 of the NOPR TSD. 

For CH4 and N2O, DOE calculated 

emissions reduction in tons and also in 

terms of units of carbon dioxide 

equivalent (CO2eq). Gases are converted 

to CO2eq by multiplying the physical 

units by the gas’ global warming 

potential (GWP) over a 100-year time 

horizon. Based on the Fourth 

Assessment Report of the 

Intergovernmental Panel on Climate 

Change,30 DOE used GWP values of 25 

for CH4 and 298 for N2O. 

EIA prepares the Annual Energy 

Outlook using the National Energy 

Modeling System (NEMS). Each annual 

version of NEMS incorporates the 

projected impacts of existing air quality 

regulations on emissions. AEO 2013 

generally represents current legislation 

and environmental regulations, 

including recent government actions, for 

which implementing regulations were 

available as of December 31, 2012. 

SO2 emissions from affected electric 

generating units (EGUs) are subject to 

nationwide and regional emissions capand-trade programs. Title IV of the 

Clean Air Act sets an annual emissions 

cap on SO2 for affected EGUs in the 48 

contiguous states and the District of 

Columbia (DC). SO2 emissions from 28 

eastern states and D.C. were also limited 

under the Clean Air Interstate Rule 

(CAIR; 70 FR 25162 (May 12, 2005)), 

which created an allowance-based 

trading program that operates along 

with the Title IV program. CAIR was 

remanded to the U.S. Environmental 

Protection Agency (EPA) by the U.S. 

Court of Appeals for the District of 

Columbia Circuit but it remained in 

effect. See North Carolina v. EPA, 550 

F.3d 1176 (D.C. Cir. 2008); North 

Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008). On July 6, 2011 EPA issued a 

replacement for CAIR, the Cross-State 

Air Pollution Rule (CSAPR). 76 FR 

48208 (August 8, 2011). On August 21, 

2012, the D.C. Circuit issued a decision 

to vacate CSAPR. See EME Homer City 

Generation, LP v. EPA, No. 11–1302, 

2012 WL 3570721 at *24 (D.C. Cir. Aug. 

21, 2012). The court ordered EPA to 

continue administering CAIR. The AEO 

2013 emissions factors used for today’s 

NOPR assumes that CAIR remains a 

binding regulation through 2040. 

The attainment of emissions caps is 

typically flexible among EGUs and is 

enforced through the use of emissions 

allowances and tradable permits. Under 

existing EPA regulations, any excess 

SO2 emissions allowances resulting 

from the lower electricity demand 

caused by the adoption of an efficiency 

standard could be used to permit 

offsetting increases in SO2 emissions by 

any regulated EGU. In past rulemakings, 

DOE recognized that there was 

uncertainty about the effects of 

efficiency standards on SO2 emissions 

covered by the existing cap-and-trade 

system, but it concluded that negligible 

reductions in power sector SO2

emissions would occur as a result of 

standards. 

Beginning in 2015, however, SO2

emissions will fall as a result of the 

Mercury and Air Toxics Standards 

(MATS) for power plants, which were 

announced by EPA on December 21, 

2011. 77 FR 9304 (Feb. 16, 2012). In the 

final MATS rule, EPA established a 

standard for hydrogen chloride as a 

surrogate for acid gas hazardous air 

pollutants (HAP), and also established a 

standard for SO2 (a non-HAP acid gas) 

as an alternative equivalent surrogate 

standard for acid gas HAP. The same 

controls are used to reduce HAP and 

non-HAP acid gas; thus, SO2 emissions 

will be reduced as a result of the control 

technologies installed on coal-fired 

power plants to comply with the MATS 

requirements for acid gas. AEO 2013 

assumes that, in order to continue 

operating, coal plants must have either 

flue gas desulfurization or dry sorbent 

injection systems installed by 2015. 

Both technologies, which are used to 

reduce acid gas emissions, also reduce 

SO2 emissions. Under the MATS, NEMS 

shows a reduction in SO2 emissions 

when electricity demand decreases (e.g., 

as a result of energy efficiency 

standards). Emissions will be far below 

the cap established by CAIR, so it is 

unlikely that excess SO2 emissions 

allowances resulting from the lower 

electricity demand would be needed or 

used to permit offsetting increases in 

SO2 emissions by any regulated EGU. 

Therefore, DOE believes that efficiency 

standards will reduce SO2 emissions in 

2015 and beyond. 

CAIR established a cap on NOX

emissions in 28 eastern states and the 

District of Columbia. Energy 

conservation standards are expected to 

have little effect on NOX emissions in 

those states covered by CAIR because 

excess NOX emissions allowances 

resulting from the lower electricity 

demand could be used to permit 

offsetting increases in NOX emissions. 

However, standards would be expected 

to reduce NOX emissions in the states 

not affected by the caps, so DOE 

estimated NOX emissions reductions 

from the standards considered in 

today’s NOPR for these states. 

The MATS limit mercury emissions 

from power plants, but they do not 

include emissions caps and, as such, 

DOE’s energy conservation standards 

would likely reduce Hg emissions. DOE 

estimated mercury emissions reduction 

using emissions factors based on AEO 

2013, which incorporates the MATS. 

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31See Average Fuel Economy Standards 

Passenger Cars and Light Trucks Model Year 2011, 

74 FR 14196 (March 30, 2009) (Final Rule); Final 

Environmental Impact Statement Corporate Average 

Fuel Economy Standards, Passenger Cars and Light 

Trucks, Model Years 2011–2015 at 3–90 (Oct. 2008) 

(Available at: http://www.nhtsa.gov/fuel-economy) 

(Last accessed December 2012). 

32See Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015, 73 FR 24352 (May 2, 2008) (Proposed 

Rule); Draft Environmental Impact Statement 

Corporate Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015 at 3–58 (June 2008) (Available at: http:// 

www.nhtsa.gov/fuel-economy) (Last accessed 

December 2012). 

L. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

As part of the development of this 

proposed rule, DOE considered the 

estimated monetary benefits from the 

reduced emissions of CO2 and NOX that 

are expected to result from each of the 

TSLs considered. To make this 

calculation similar to the calculation of 

the NPV of consumer benefit, DOE 

considered the reduced emissions 

expected to result over the lifetime of 

equipment shipped in the forecast 

period for each TSL. This section 

summarizes the basis for the monetary 

values used for each of these emissions 

and presents the values considered in 

this rulemaking. 

For today’s NOPR, DOE is relying on 

a set of values for the social cost of 

carbon (SCC) that was developed by an 

interagency process. A summary of the 

basis for these values is provided below, 

and a more detailed description of the 

methodologies used is provided as an 

appendix to chapter 14 of the NOPR 

TSD. 

1. Social Cost of Carbon 

The SCC is an estimate of the 

monetized damages associated with an 

incremental increase in carbon 

emissions in a given year. It is intended 

to include (but is not limited to) changes 

in net agricultural productivity, human 

health, property damages from 

increased flood risk, and the value of 

ecosystem services. Estimates of the 

SCC are provided in dollars per metric 

ton of carbon dioxide. A domestic SCC 

value is meant to reflect the value of 

damages in the United States resulting 

from a unit change in carbon dioxide 

emissions, while a global SCC value is 

meant to reflect the value of damages 

worldwide. 

Under section 1(b)(6) of Executive 

Order 12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (Oct. 4, 1993), 

agencies must, to the extent permitted 

by law, assess both the costs and the 

benefits of the intended regulation and, 

recognizing that some costs and benefits 

are difficult to quantify, propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. The 

purpose of the SCC estimates presented 

here is to allow agencies to incorporate 

the monetized social benefits of 

reducing CO2 emissions into costbenefit analyses of regulatory actions 

that have small, or ‘‘marginal,’’ impacts 

on cumulative global emissions. The 

estimates are presented with an 

acknowledgement of the many 

uncertainties involved and with a clear 

understanding that they should be 

updated over time to reflect increasing 

knowledge of the science and 

economics of climate impacts. 

As part of the interagency process that 

developed the SCC estimates, technical 

experts from numerous agencies met on 

a regular basis to consider public 

comments, explore the technical 

literature in relevant fields, and discuss 

key model inputs and assumptions. The 

main objective of this process was to 

develop a range of SCC values using a 

defensible set of input assumptions 

grounded in the existing scientific and 

economic literatures. In this way, key 

uncertainties and model differences 

transparently and consistently inform 

the range of SCC estimates used in the 

rulemaking process. 

a. Monetizing Carbon Dioxide Emissions 

When attempting to assess the 

incremental economic impacts of carbon 

dioxide emissions, the analyst faces a 

number of serious challenges. A recent 

report from the National Research 

Council points out that any assessment 

will suffer from uncertainty, 

speculation, and lack of information 

about: (1) Future emissions of 

greenhouse gases; (2) the effects of past 

and future emissions on the climate 

system; (3) the impact of changes in 

climate on the physical and biological 

environment; and (4) the translation of 

these environmental impacts into 

economic damages. As a result, any 

effort to quantify and monetize the 

harms associated with climate change 

will raise serious questions of science, 

economics, and ethics and should be 

viewed as provisional. 

Despite the serious limits of both 

quantification and monetization, SCC 

estimates can be useful in estimating the 

social benefits of reducing carbon 

dioxide emissions. Most Federal 

regulatory actions can be expected to 

have marginal impacts on global 

emissions. For such policies, the agency 

can estimate the benefits from reduced 

emissions in any future year by 

multiplying the change in emissions in 

that year by the SCC value appropriate 

for that year. The net present value of 

the benefits can then be calculated by 

multiplying the future benefits by an 

appropriate discount factor and 

summing across all affected years. This 

approach assumes that the marginal 

damages from increased emissions are 

constant for small departures from the 

baseline emissions path, an 

approximation that is reasonable for 

policies that have effects on emissions 

that are small relative to cumulative 

global carbon dioxide emissions. For 

policies that have a large (non-marginal) 

impact on global cumulative emissions, 

there is a separate question of whether 

the SCC is an appropriate tool for 

calculating the benefits of reduced 

emissions. This concern is not 

applicable to this rulemaking, however. 

It is important to emphasize that the 

interagency process is committed to 

updating these estimates as the science 

and economic understanding of climate 

change and its impacts on society 

improves over time. In the meantime, 

the interagency group will continue to 

explore the issues raised by this analysis 

and consider public comments as part of 

the ongoing interagency process. 

b. Social Cost of Carbon Values Used in 

Past Regulatory Analyses 

Economic analyses for Federal 

regulations have used a wide range of 

values to estimate the benefits 

associated with reducing carbon dioxide 

emissions. In the final model year 2011 

CAFE rule, the U.S. Department of 

Transportation (DOT) used both a 

‘‘domestic’’ SCC value of $2 per metric 

ton of CO2 and a ‘‘global’’ SCC value of 

$33 per metric ton of CO2 for 2007 

emission reductions (in 2007$), 

increasing both values at 2.4 percent per 

year. DOT also included a sensitivity 

analysis at $80 per metric ton of CO2.31

A 2008 regulation proposed by DOT 

assumed a domestic SCC value of $7 per 

metric ton of CO2 (in 2006$) for 2011 

emission reductions (with a range of $0– 

$14 for sensitivity analysis), also 

increasing at 2.4 percent per year.32 A 

regulation for packaged terminal air 

conditioners and packaged terminal 

heat pumps finalized by DOE in October 

of 2008 used a domestic SCC range of 

$0 to $20 per metric ton CO2 for 2007 

emission reductions (in 2007$). 73 FR 

58772, 58814 (Oct. 7, 2008). In addition, 

EPA’s 2008 Advance Notice of Proposed 

Rulemaking on Regulating Greenhouse 

Gas Emissions Under the Clean Air Act 

identified what it described as ‘‘very 

preliminary’’ SCC estimates subject to 

revision. 73 FR 44354 (July 30, 2008). 

EPA’s global mean values were $68 and 

$40 per metric ton CO2 for discount 

rates of approximately 2 percent and 3 

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33Social Cost of Carbon for Regulatory Impact 

Analysis Under Executive Order 12866. Interagency 

Working Group on Social Cost of Carbon, United 

States Government, February 2010. http://

www.whitehouse.gov/sites/default/files/omb/

inforeg/for-agencies/Social-Cost-of-Carbon-forRIA.pdf. 

34Technical Update of the Social Cost of Carbon 

for Regulatory Impact Analysis Under Executive 

Order 12866. Interagency Working Group on Social 

Cost of Carbon, United States Government. May 

2013; revised November 2013. http://

www.whitehouse.gov/sites/default/files/omb/assets/

inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf. 

percent, respectively (in 2006$ for 2007 

emissions). 

In 2009, an interagency process was 

initiated to offer a preliminary 

assessment of how best to quantify the 

benefits from reducing carbon dioxide 

emissions. To ensure consistency in 

how benefits are evaluated across 

agencies, the Administration sought to 

develop a transparent and defensible 

method, specifically designed for the 

rulemaking process, to quantify avoided 

climate change damages from reduced 

CO2 emissions. The interagency group 

did not undertake any original analysis. 

Instead, it combined SCC estimates from 

the existing literature to use as interim 

values until a more comprehensive 

analysis could be conducted. The 

outcome of the preliminary assessment 

by the interagency group was a set of 

five interim values: global SCC 

estimates for 2007 (in 2006$) of $55, 

$33, $19, $10, and $5 per metric ton of 

CO2. These interim values represented 

the first sustained interagency effort 

within the U.S. government to develop 

an SCC for use in regulatory analysis. 

The results of this preliminary effort 

were presented in several proposed and 

final rules. 

c. Current Approach and Key 

Assumptions 

Since the release of the interim 

values, the interagency group 

reconvened on a regular basis to 

generate improved SCC estimates. 

Specifically, the group considered 

public comments and further explored 

the technical literature in relevant 

fields. The interagency group relied on 

three integrated assessment models 

commonly used to estimate the SCC: the 

FUND, DICE, and PAGE models. These 

models are frequently cited in the peerreviewed literature and were used in the 

last assessment of the Intergovernmental 

Panel on Climate Change. Each model 

was given equal weight in the SCC 

values that were developed. 

Each model takes a slightly different 

approach to model how changes in 

emissions result in changes in economic 

damages. A key objective of the 

interagency process was to enable a 

consistent exploration of the three 

models while respecting the different 

approaches to quantifying damages 

taken by the key modelers in the field. 

An extensive review of the literature 

was conducted to select three sets of 

input parameters for these models: 

climate sensitivity, socio-economic and 

emissions trajectories, and discount 

rates. A probability distribution for 

climate sensitivity was specified as an 

input into all three models. In addition, 

the interagency group used a range of 

scenarios for the socio-economic 

parameters and a range of values for the 

discount rate. All other model features 

were left unchanged, relying on the 

model developers’ best estimates and 

judgments. 

In 2010, the interagency group 

selected four sets of SCC values for use 

in regulatory analyses.33 Three sets of 

values are based on the average SCC 

from three integrated assessment 

models, at discount rates of 2.5 percent, 

3 percent, and 5 percent. The fourth set, 

which represents the 95th-percentile 

SCC estimate across all three models at 

a 3-percent discount rate, is included to 

represent higher-than-expected impacts 

from climate change further out in the 

tails of the SCC distribution. The values 

grow in real terms over time. 

Additionally, the interagency group 

determined that a range of values from 

7 percent to 23 percent should be used 

to adjust the global SCC to calculate 

domestic effects, although preference is 

given to consideration of the global 

benefits of reducing CO2 emissions. 

Table IV.6 presents the values in the 

2010 interagency group report, which is 

reproduced in appendix 14–A of the 

NOPR TSD. 

TABLE IV.6—ANNUAL SCC VALUES FROM 2010 INTERAGENCY REPORT, 2010–2050 

[In 2007 dollars per metric ton CO2] 

Year 

Discount rate % 

5 3 2.5 3 

Average Average Average 95th Percentile 

2010 ................................................................................................................. 4.7 21.4 35.1 64.9 

2015 ................................................................................................................. 5.7 23.8 38.4 72.8 

2020 ................................................................................................................. 6.8 26.3 41.7 80.7 

2025 ................................................................................................................. 8.2 29.6 45.9 90.4 

2030 ................................................................................................................. 9.7 32.8 50.0 100.0 

2035 ................................................................................................................. 11.2 36.0 54.2 109.7 

2040 ................................................................................................................. 12.7 39.2 58.4 119.3 

2045 ................................................................................................................. 14.2 42.1 61.7 127.8 

2050 ................................................................................................................. 15.7 44.9 65.0 136.2 

The SCC values used for today’s 

notice were generated using the most 

recent versions of the three integrated 

assessment models that have been 

published in the peer-reviewed 

literature.34 Table IV.7 shows the 

updated sets of SCC estimates from the 

2013 interagency update in five-year 

increments from 2010 to 2050. 

Appendix 14–B of the NOPR TSD 

provides the full set of values. The 

central value that emerges is the average 

SCC across models at 3-percent discount 

rate. However, for purposes of capturing 

the uncertainties involved in regulatory 

impact analysis, the interagency group 

emphasizes the importance of including 

all four sets of SCC values. 

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35U.S. Office of Management and Budget, Office 

of Information and Regulatory Affairs, 2006 Report 

to Congress on the Costs and Benefits of Federal 

Regulations and Unfunded Mandates on State, 

Local, and Tribal Entities, Washington, DC. 

36For more information on NEMS, refer to the 

U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary 

is National Energy Modeling System: An Overview 

2003, DOE/EIA–0581(2003) (March, 2003). 

37 DOE/EIA approves use of the name NEMS to 

describe only an official version of the model 

without any modification to code or data. Because 

this analysis entails some minor code modifications 

and the model is run under various policy scenarios 

that are variations on DOE/EIA assumptions, DOE 

refers to it by the name ‘‘NEMS–BT’’ (‘‘BT’’ is DOE’s 

Building Technologies Program, under whose aegis 

this work has been performed). 

TABLE IV.7—ANNUAL SCC VALUES FROM 2013 INTERAGENCY UPDATE, 2010–2050 

[In 2007 dollars per metric ton CO2] 

Year 

Discount rate % 

5 3 2.5 3 

Average Average Average 95th Percentile 

2010 ................................................................................................................. 11 32 51 89 

2015 ................................................................................................................. 11 37 57 109 

2020 ................................................................................................................. 12 43 64 128 

2025 ................................................................................................................. 14 47 69 143 

2030 ................................................................................................................. 16 52 75 159 

2035 ................................................................................................................. 19 56 80 175 

2040 ................................................................................................................. 21 61 86 191 

2045 ................................................................................................................. 24 66 92 206 

2050 ................................................................................................................. 26 71 97 220 

NRDC and ASAP indicated that DOE’s 

current approach to monetizing carbon 

underestimates the benefits. (NRDC and 

ASAP, No. 11 at p.5) The range of SCC 

estimates used by DOE has been closely 

reviewed by the interagency group and 

was updated in 2013. The range 

includes a set of values that represents 

the 95th-percentile SCC estimate across 

all three models at a 3-percent discount 

rate, which was included to represent 

higher-than-expected impacts from 

climate change further out in the tails of 

the SCC distribution. DOE 

acknowledges that the estimates will 

continue to evolve over time as the 

science and economic understanding of 

climate change and its impact on society 

improves. 

It is important to recognize that a 

number of key uncertainties remain, and 

that current SCC estimates should be 

treated as provisional and revisable 

since they will evolve with improved 

scientific and economic understanding. 

The interagency group also recognizes 

that the existing models are imperfect 

and incomplete. The National Research 

Council report mentioned above points 

out that there is tension between the 

goal of producing quantified estimates 

of the economic damages from an 

incremental ton of carbon and the limits 

of existing efforts to model these effects. 

There are a number of concerns and 

problems that should be addressed by 

the research community, including 

research programs housed in many of 

the Federal agencies participating in the 

interagency process to estimate the SCC. 

The interagency group intends to 

periodically review and reconsider 

those estimates to reflect increasing 

knowledge of the science and 

economics of climate impacts, as well as 

improvements in modeling. 

In summary, in considering the 

potential global benefits resulting from 

reduced CO2 emissions resulting from 

today’s rule, DOE used the values from 

the 2013 interagency report, adjusted to 

2012$ using the Gross Domestic Product 

price deflator. For each of the four SCC 

cases specified, the values used for 

emissions in 2015 were $11.8, $39.7, 

$61.2, and $117 per metric ton avoided 

(values expressed in 2012$). DOE 

derived values after 2050 using the 

relevant growth rates for the 2040–2050 

period in the interagency update. 

DOE multiplied the CO2 emissions 

reduction estimated for each year by the 

SCC value for that year in each of the 

four cases. To calculate a present value 

of the stream of monetary values, DOE 

discounted the values in each of the 

four cases using the specific discount 

rate that had been used to obtain the 

SCC values in each case. 

2. Valuation of Other Emissions 

Reductions 

As noted above, DOE has taken into 

account how new or amended energy 

conservation standards would reduce 

NOX emissions in those 22 states not 

affected by the CAIR. DOE estimated the 

monetized value of NOX emissions 

reductions resulting from each of the 

TSLs considered for today’s NOPR 

based on estimates found in the relevant 

scientific literature. Estimates of 

monetary value for reducing NOX from 

stationary sources range from $468 to 

$4,809 per ton in 2012$.35 DOE 

calculated monetary benefits using a 

medium value for NOX emissions of 

$2,639 per short ton (in 2012$), and real 

discount rates of 3-percent and 7- 

percent. 

DOE is evaluating appropriate 

monetization of avoided SO2 and Hg 

emissions in energy conservation 

standards rulemakings. It has not 

included monetization in the current 

analysis. 

M. Utility Impact Analysis 

The utility impact analysis estimates 

several effects on the power generation 

industry that would result from the 

adoption of new or amended energy 

conservation standards. In the utility 

impact analysis, DOE analyzes the 

changes in installed electricity capacity 

and generation that would result for 

each trial standard level. The utility 

impact analysis uses a variant of 

NEMS,36 which is a public domain, 

multi-sectored, partial equilibrium 

model of the U.S. energy sector. DOE 

uses a variant of this model, referred to 

as NEMS–BT,37 to account for selected 

utility impacts of new or amended 

energy conservation standards. DOE’s 

analysis consists of a comparison 

between model results for the most 

recent AEO Reference Case and for cases 

in which energy use is decremented to 

reflect the impact of potential standards. 

The energy savings inputs associated 

with each TSL come from the NIA. 

Chapter 15 of the NOPR TSD describes 

the utility impact analysis in further 

detail. 

N. Employment Impact Analysis 

Employment impacts from new or 

amended energy conservation standards 

include direct and indirect impacts. 

Direct employment impacts are any 

changes in the number of employees of 

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manufacturers of the equipment subject 

to standards; the MIA addresses those 

impacts. Indirect employment impacts 

are changes in national employment 

that occur due to the shift in 

expenditures and capital investment 

caused by the purchase and operation of 

more efficient equipment. Indirect 

employment impacts from standards 

consist of the jobs created or eliminated 

in the national economy, other than in 

the manufacturing sector being 

regulated, due to: (1) Reduced spending 

by end users on energy; (2) reduced 

spending on new energy supply by the 

utility industry; (3) increased consumer 

spending on the purchase of new 

equipment; and (4) the effects of those 

three factors throughout the economy. 

One method for assessing the possible 

effects on the demand for labor of such 

shifts in economic activity is to compare 

sector employment statistics developed 

by the Labor Department’s Bureau of 

Labor Statistics (BLS). BLS regularly 

publishes its estimates of the number of 

jobs per million dollars of economic 

activity in different sectors of the 

economy, as well as the jobs created 

elsewhere in the economy by this same 

economic activity. Data from BLS 

indicate that expenditures in the utility 

sector generally create fewer jobs (both 

directly and indirectly) than 

expenditures in other sectors of the 

economy. There are many reasons for 

these differences, including wage 

differences and the fact that the utility 

sector is more capital-intensive and less 

labor-intensive than other sectors. 

Energy conservation standards have the 

effect of reducing consumer utility bills. 

Because reduced consumer 

expenditures for energy likely lead to 

increased expenditures in other sectors 

of the economy, the general effect of 

efficiency standards is to shift economic 

activity from a less labor-intensive 

sector (i.e., the utility sector) to more 

labor-intensive sectors (e.g., the retail 

and service sectors). Thus, based on the 

BLS data alone, DOE believes net 

national employment may increase 

because of shifts in economic activity 

resulting from amended standards. 

For the standard levels considered in 

the NOPR, DOE estimated indirect 

national employment impacts using an 

input/output model of the U.S. economy 

called Impact of Sector Energy 

Technologies, Version 3.1.1 (ImSET). 

ImSET is a special-purpose version of 

the ‘‘U.S. Benchmark National InputOutput’’ (I–O) model, which was 

designed to estimate the national 

employment and income effects of 

energy-saving technologies. The ImSET 

software includes a computer-based I–O 

model having structural coefficients that 

characterize economic flows among the 

187 sectors. ImSET’s national economic 

I–O structure is based on a 2002 U.S. 

benchmark table, specially aggregated to 

the 187 sectors most relevant to 

industrial, commercial, and residential 

building energy use. DOE notes that 

ImSET is not a general equilibrium 

forecasting model, and understands the 

uncertainties involved in projecting 

employment impacts, especially 

changes in the later years of the 

analysis. Because ImSET does not 

incorporate price changes, the 

employment effects predicted by ImSET 

may over-estimate actual job impacts 

over the long run. For the NOPR, DOE 

used ImSET only to estimate short-term 

employment impacts. 

For more details on the employment 

impact analysis, see chapter 16 of the 

NOPR TSD. 

V. Analytical Results 

A. Trial Standard Levels 

At the NOPR stage, DOE develops 

Trial Standard Levels (TSLs) for 

consideration. TSLs are formed by 

grouping different efficiency levels, 

which are potential standard levels for 

each equipment class. Table V.1 

presents the TSLs analyzed and the 

corresponding efficiency level for each 

CCW equipment class. TSL 3 is 

comprised of the max-tech efficiency 

levels. TSL 2 is comprised of efficiency 

level 2 for front-loading CCWs and 

efficiency level 1 for top-loading CCWs. 

TSL 1 is comprised of efficiency level 1 

for each equipment class. 

TABLE V.1—SUMMARY OF TSLS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES WASHERS

Equipment class TSL 1 TSL 2 TSL 3 

Efficiency Level * 

Front Loading CCW Units ........................................................................................................... 1 2 3 

Top Loading CCW Units .............................................................................................................. 1 1 2 

* For the MEFJ2 and IWF that correspond to efficiency levels 1 through 3, see Table IV.3. 

B. Economic Justification and Energy 

Savings 

As discussed in section II.A, EPCA 

provides seven factors to be evaluated in 

determining whether a more stringent 

standard for front-loading and toploading commercial clothes washers is 

economically justified. (42 U.S.C. 

6313(a)(6)(B)(ii)) The following sections 

discuss how DOE addresses each of 

those factors in this rulemaking. 

1. Economic Impacts on Individual 

Customers 

DOE analyzed the economic impacts 

on front-loading and top-loading 

commercial clothes washers customers 

by looking at the effects potential 

standards would have on the LCC and 

PBP. DOE also examined the impacts of 

potential standards on customer 

subgroups. These analyses are discussed 

below. 

a. Life-Cycle Cost and Payback Period 

To evaluate the net economic impact 

of standards on front-loading and toploading CCW customers, DOE 

conducted LCC and PBP analyses for 

each TSL. Section IV.F of this notice 

discusses the inputs DOE used for 

calculating the LCC and PBP. 

For each representative unit, the key 

outputs of the LCC analysis are a mean 

LCC savings and a median PBP relative 

to the base case, as well as the fraction 

of customers for which the LCC will 

decrease (net benefit), increase (net 

cost), or exhibit no change (no impact) 

relative to the base case. No impacts 

occur when the base-case efficiency 

equals or exceeds the efficiency at a 

given TSL. Table V.2 through Table V.5 

show the key results for each 

representative unit. 

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TABLE V.2—SUMMARY LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR FRONT-LOADING, MULTI-FAMILY

APPLICATION COMMERCIAL CLOTHES WASHER UNITS

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ 1 2 3 

MEFJ2/IWF ................................................................................................................................... 1.80/4.50 2.00/4.10 2.20/3.90 

Total Installed Cost ($) ................................................................................................................ 1853.19 1853.69 1884.93 

Mean LCC Savings ($) ................................................................................................................ 229 285 8 

Customers with LCC Increase (Cost) (%) * ................................................................................. 0 0 46 

Customers with LCC Decrease (Benefit) (%) * ........................................................................... 27 61 53 

Customers with No Change in LCC (%) * ................................................................................... 73 39 0 

Median PBP (Years) .................................................................................................................... 0.0 0.0 3.8 

* Rounding may cause some items to not total 100 percent. 

TABLE V.3—SUMMARY LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR FRONT-LOADING, LAUNDROMAT

APPLICATION COMMERCIAL CLOTHES WASHER UNITS

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ 1 2 3 

MEFJ2/IWF ................................................................................................................................... 1.80/4.50 2.00/4.10 2.20/3.90 

Total Installed Cost ($) ................................................................................................................ 1853.19 1853.69 1884.93 

Mean LCC Savings ($) † .............................................................................................................. 198 235 (19) 

Customers with LCC Increase (Cost) (%) * ................................................................................. 0 0 72 

Customers with LCC Decrease (Benefit) (%) * ........................................................................... 27 61 28 

Customers with No Change in LCC (%) * ................................................................................... 73 39 0 

Median PBP (Years) .................................................................................................................... 0.0 0.0 8.0 

* Rounding may cause some items to not total 100 percent. 

†Values in parentheses are negative values. 

TABLE V.4—SUMMARY LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR TOP-LOADING, MULTI-FAMILY APPLICATION

COMMERCIAL CLOTHES WASHER UNITS

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ 1 1 2 

MEFJ2/IWF ................................................................................................................................... 1.35/8.80 1.35/8.80 1.55/6.90 

Total Installed Cost ($) ................................................................................................................ 1251.06 1251.06 1313.40 

Mean LCC Savings ($) ................................................................................................................ 259 259 813 

Customers with LCC Increase (Cost) (%) * ................................................................................. 0 0 0 

Customers with LCC Decrease (Benefit) (%) * ........................................................................... 99 99 100 

Customers with No Change in LCC (%) * ................................................................................... 1 1 0 

Median PBP (Years) .................................................................................................................... 0.0 0.0 0.6 

* Rounding may cause some items to not total 100 percent. 

TABLE V.5—SUMMARY LIFE-CYCLE COST AND PAYBACK PERIOD RESULTS FOR TOP-LOADING, LAUNDROMAT APPLICATION

COMMERCIAL CLOTHES WASHER UNITS

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ 1 1 2 

MEFJ2/IWF ................................................................................................................................... 1.35/8.80 1.35/8.80 1.55/6.90 

Total Installed Cost ($) ................................................................................................................ 1251.06 1251.06 1313.40 

Mean LCC Savings ($) ................................................................................................................ 145 145 654 

Customers with LCC Increase (Cost) (%) * ................................................................................. 0 0 0 

Customers with LCC Decrease (Benefit) (%) * ........................................................................... 99 99 100 

Customers with No Change in LCC (%) * ................................................................................... 1 1 0 

Median PBP (Years) .................................................................................................................... 0.0 0.0 0.6 

* Rounding may cause some items to not total 100 percent. 

b. Customer Subgroup Analysis 

In the customer subgroup analysis, 

DOE estimated the impacts of the 

considered TSLs on small business 

customers. The LCC savings and 

payback periods for small business 

customers are similar to the impacts for 

all customers. Chapter 11 of the NOPR 

TSD presents detailed results of the 

customer subgroup analysis. 

c. Rebuttable Presumption Payback 

As discussed in section III.E.2, EPCA 

establishes a rebuttable presumption 

that an energy conservation standard is 

economically justified if the increased 

purchase cost for equipment that meets 

the standard is less than three times the 

value of the first-year energy savings 

resulting from the standard. DOE 

calculated a rebuttable-presumption 

PBP for each TSL. 

DOE based the calculations on 

average usage profiles. As a result, DOE 

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calculated a single rebuttablepresumption payback value, and not a 

distribution of PBPs, for each TSL. 

Table V.6 and Table V.7 show the 

rebuttable-presumption PBPs for the 

considered TSLs. In addition to the 

rebuttable presumption analysis, 

however, DOE routinely conducts an 

economic analysis that considers the 

full range of impacts to the customer, 

manufacturer, nation, and environment, 

as required by EPCA. The results of that 

analysis serve as the basis for DOE to 

evaluate the economic justification for a 

potential standard level (thereby 

supporting or rebutting the results of 

any three-year PBP analysis). Section 

V.C addresses how DOE considered the 

range of impacts to select today’s 

proposed standards. 

TABLE V.6—REBUTTABLE-PRESUMPTION PAYBACK PERIODS (YEARS) FOR FRONT-LOADING AND TOP-LOADING

COMMERCIAL CLOTHES WASHER UNITS: MULTI-FAMILY APPLICATION

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ FL: EL1 

TL:EL1 

FL: EL2 

TL:EL1 

FL: EL3 

TL:EL2 

Front Loading CCW Units ........................................................................................................... 0.00 0.04 8.77 

Top Loading CCW Units .............................................................................................................. 0.0 0.0 2.3 

TABLE V.7—REBUTTABLE-PRESUMPTION PAYBACK PERIODS (YEARS) FOR FRONT-LOADING AND TOP-LOADING

COMMERCIAL CLOTHES WASHER UNITS: LAUNDROMAT APPLICATION

Trial standard level 1 2 3 

Efficiency Level ............................................................................................................................ FL: EL1 

TL:EL1 

FL: EL2 

TL:EL1 

FL: EL3 

TL:EL2 

Front Loading CCW Units ........................................................................................................... 0.00 0.05 11.19 

Top Loading CCW Units .............................................................................................................. 0.00 0.00 2.73 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate 

the impact of new energy conservation 

standards on commercial clothes washer 

manufacturers. The following section 

describes the expected impacts on 

manufacturers at each TSL. Chapter 12 

of the NOPR TSD explains the analysis 

in further detail. 

a. Industry Cash-Flow Analysis Results 

The following tables depict the 

financial impacts (represented by 

changes in INPV) of amended energy 

conservation standards on 

manufacturers of commercial clothes 

washers as well as the conversion costs 

that DOE estimates manufacturers 

would incur for each equipment class at 

each TSL. To evaluate the range of cash 

flow impacts on the commercial clothes 

washer manufacturing industry, DOE 

used two different markup assumptions 

to model scenarios that correspond to 

the range of anticipated market 

responses to amended energy 

conservation standards. 

To assess the lower (less severe) end 

of the range of potential impacts, DOE 

modeled a preservation of gross margin 

percentage markup scenario, in which a 

uniform ‘‘gross margin percentage’’ 

markup is applied across all efficiency 

levels. In this scenario, DOE assumed 

that a manufacturer’s absolute dollar 

markup would increase as production 

costs increase in the amended energy 

conservation standards case. 

Manufacturers have indicated that it is 

optimistic to assume that they would be 

able to maintain the same gross margin 

percentage markup as their production 

costs increase in response to a new or 

amended energy conservation standard, 

particularly at higher TSLs. 

To assess the higher (more severe) end 

of the range of potential impacts, DOE 

modeled the preservation of operating 

profit (in absolute dollars) markup 

scenario, which assumes that 

manufacturers would not be able to 

preserve the same overall gross margin, 

but instead cut their markup for 

marginally compliant products to 

maintain a cost competitive product 

offering and keep the same overall level 

of operating profit as in the base case. 

The two tables below show the range of 

potential INPV impacts for 

manufacturers of commercial clothes 

washers. The first table reflects the 

lower bound of impacts (higher 

profitability) and the second represents 

the upper bound of impacts (lower 

profitability). 

Each scenario results in a unique set 

of cash flows and corresponding 

industry values at each TSL. In the 

following discussion, the INPV results 

refer to the sum of discounted cash 

flows through 2047, the difference in 

INPV between the base case and each 

standards case, and the total industry 

conversion costs required for each 

standards case. 

TABLE V.8—MANUFACTURER IMPACT ANALYSIS UNDER THE PRESERVATION OF GROSS MARGIN PERCENTAGE MARKUP

SCENARIO

Units Base case 

Trial standard level 

1 2 3 

INPV .................................................. 2012$ Millions .................................. $124.2 118.3 118.2 33.0 

Change in INPV ................................ 2012$ Millions .................................. ........................ (5.9) (6.0) (91.2) 

(%) .................................................... ........................ (4.7) (4.9) (73.4) 

Product Conversion Costs ................ 2012$ Millions .................................. ........................ 9.9 10.2 62.4 

Capital Conversion Costs ................. 2012$ Millions .................................. ........................ ........................ ........................ 63.1 

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TABLE V.8—MANUFACTURER IMPACT ANALYSIS UNDER THE PRESERVATION OF GROSS MARGIN PERCENTAGE MARKUP

SCENARIO—Continued 

Units Base case 

Trial standard level 

1 2 3 

Total Conversion Costs ............. 2012$ Millions .................................. ........................ 9.9 10.2 126.6 

* Values in parentheses are negative values. 

TABLE V.9—MANUFACTURER IMPACT ANALYSIS UNDER THE PRESERVATION OF OPERATING PROFIT IN ABSOLUTE

DOLLARS MARKUP SCENARIO

Units Base case 

Trial standard level 

1 2 3 

INPV .................................................. 2012$ Millions .................................. $124.2 118.3 118.2 28.8 

Change in INPV ................................ 2012$ Millions .................................. ........................ (5.9) (6.0) (95.4) 

(%) .................................................... ........................ (4.7) (4.9) (76.8) 

Product Conversion Costs ................ 2012$ Millions .................................. ........................ 9.9 10.2 62.4 

Capital Conversion Costs ................. 2012$ Millions .................................. ........................ ........................ ........................ 63.1 

Total Conversion Costs ............. 2012$ Millions .................................. ........................ 9.9 10.2 126.6 

* Values in parentheses are negative values. 

Beyond impacts on INPV, DOE 

includes a comparison of free cash flow 

between the base case and the standards 

case at each TSL in the year before 

amended standards take effect to 

provide perspective on the short-run 

cash flow impacts in the discussion of 

the results below. 

At TSL 1, DOE estimates the impact 

on INPV for manufacturers of 

commercial clothes washers to be $5.9 

million, or a change in INPV of ¥4.7 

percent under either markup scenario. 

At this TSL, industry free cash flow is 

estimated to decrease by approximately 

30.2 percent to $6.3 million, compared 

to the base-case value of $9.1 million in 

the year before the compliance date 

(2017). 

TSL 1 represents an improvement in 

MEFJ2 (as determined using appendix 

J2) from the baseline level of 1.65 to 

1.80 (ft3/kWh/cycle) for front-loading 

equipment and an improvement in 

MEFJ2 from the baseline level of 1.15 to 

1.35 (ft3/kWh/cycle) for top-loading 

equipment. The identical results for the 

two markup scenarios at TSL 1 occur 

because for both equipment classes, the 

baseline MPCs and the MPCs at TSL 1 

are the same. For front-loading 

equipment, this is because the 1.8 MEFJ2

(as determined using appendix J2) 

products (on which the EL 1 standard is 

based) are the lowest efficiency frontloading equipment available on the 

market. As such, TSL 1 would have no 

impact on the front-loading market. 

Similarly, the design options associated 

with EL 1 for top-loading equipment 

relate to control changes and different 

cycle options, rather than material 

changes to the equipment itself. While 

there are product conversion costs 

associated with the research and 

development needed to make these 

changes, there are no changes in the per 

unit production costs. Given these 

conditions, the impacts on INPV at TSL 

1 can be attributed solely to the $9.9 

million in product conversion costs for 

top-loading equipment. 

At TSL 2, DOE estimates the impact 

on INPV for manufacturers of 

commercial clothes washers to be $6.0 

million, or a change in INPV of ¥4.9 

percent under either markup scenario. 

At this TSL, industry free cash flow is 

estimated to decrease by approximately 

31.2 percent to $6.2 million, compared 

to the base-case value of $9.1 million in 

the year before the compliance date 

(2017). 

TSL 2 represents an improvement in 

MEFJ2 from the baseline level of 1.65 to 

2.00 (ft3/kWh/cycle) for front-loading 

equipment and an improvement in 

MEFJ2 from the baseline level of 1.15 to 

1.35 (ft3/kWh/cycle) for top-loading 

equipment. Much like TSL 1, the 

identical results for the two markup 

scenarios at TSL 2 occur because the 

baseline MPCs and the MPCs at TSL 2 

are very close for front-loading 

equipment, and the same for top-loading 

equipment. For front-loading 

equipment, this is because the 2.0 MEFJ2

EL (as determined using appendix J2) 

requires only minor changes to baseline 

equipment needed to enable slightly 

faster spin speeds. The standard level 

for top-loading equipment at TSL 2 is 

the same at TSL 1, and again relates to 

control changes and different cycle 

options, rather than material changes to 

the equipment. Because there are no 

substantive changes to MPCs for either 

equipment class, much as in TSL 1, 

nearly all of the impacts on INPV at TSL 

2 can be attributed to the $10.2 million 

in product conversion costs. 

At TSL 3, DOE estimates impacts on 

INPV for manufacturers of commercial 

clothes washers to range from ¥$91.2 

million to ¥$95.4 million, or a change 

in INPV of ¥73.4 percent to ¥76.8 

percent. At this TSL, industry free cash 

flow is estimated to decrease by over 

500 percent to ¥$36.8 million, 

compared to the base-case value of $9.1 

million in the year before the 

compliance date (2017). 

TSL 3 represents an improvement in 

MEFJ2 from the baseline level of 1.65 to 

2.20 (ft3/kWh/cycle) for equipment class 

1 and an improvement in MEFJ2 from 

the baseline level of 1.15 to 1.55 (ft3/

kWh/cycle) for equipment class 2. 

Unlike TSL 1 and TSL 2, the efficiency 

levels specified at TSL 3 would require 

substantial redesigns of products in both 

equipment classes. The design options 

proposed at these efficiency levels 

include switching to direct-drive 

motors, hung suspension, nontraditional agitation, and increasing the 

tub capacity—all of which require major 

platform overhauls and significant 

changes to manufacturing capital. These 

design options do not contribute to 

substantially different MPCs, but the 

conversion costs associated with 

product development and testing, as 

well as the investments in 

manufacturing capital including 

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Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 12335 

38The 2010 ASM provides the following 

definition: ‘‘The ‘production workers’ number 

includes workers (up through the line-supervisor 

level) engaged in fabricating, processing, 

assembling, inspecting, receiving, storing, handling, 

packing, warehousing, shipping (but not 

delivering), maintenance, repair, janitorial and 

guard services, product development, auxiliary 

production for plant’s own use (e.g., power plant), 

recordkeeping, and other services closely associated 

with these production operations at the 

establishment covered by the report. Employees 

above the working-supervisor level are excluded 

from this item.’’ 

39The 2010 Annual Survey of Manufacturers is 

available at: http://www.census.gov/mcd/

asmhome.html. 

retooling of tubs and agitators 

significantly impact the INPV. 

b. Impacts on Direct Employment 

DOE used the GRIM to estimate the 

domestic labor expenditures and 

number of domestic production workers 

in the base case and at each TSL from 

2013 to 2047. DOE used statistical data 

from the most recent U.S Census 

Bureau’s ‘‘Annual Survey of 

Manufactures,’’ the results of the 

engineering analysis, and interviews 

with manufacturers to determine the 

inputs necessary to calculate industrywide labor expenditures and domestic 

employment levels. Labor expenditures 

for the manufacture of a product are a 

function of the labor intensity of the 

product, the sales volume, and an 

assumption that wages in real terms 

remain constant. 

DOE notes that the MIA’s analysis 

detailing impacts on employment 

focuses specifically on the production 

workers manufacturing the covered 

products in question, rather than a 

manufacturer’s broader operations. 

Thus, the estimated number of impacted 

employees in the MIA is separate from 

the total number of employees used to 

determine whether a manufacturer is a 

small business for purposes of analysis 

under the Regulatory Flexibility Act. 

The estimates of production workers 

in this section cover only those up to 

and including the line-supervisor level 

directly involved in fabricating and 

assembling a product within the original 

equipment manufacturer (OEM) facility. 

In addition, workers that perform 

services closely associated with 

production operations are included. 

Employees above the workingsupervisor level are excluded from the 

count of production workers. Thus, the 

labor associated with non-production 

functions (e.g., factory supervision, 

advertisement, sales) is explicitly not 

covered.38 In addition, DOE’s estimates 

account for production workers that 

manufacture only the specific products 

covered by this rulemaking. For 

example, a worker on a clothes dryer 

production line would not be included 

in the estimate of the number of 

commercial clothes washer production 

workers. Finally, this analysis also does 

not factor in the dependence by some 

manufacturers on production volume to 

make their operations viable. For 

example, should a major line of 

business cease or move, a production 

facility may no longer have the 

manufacturing scale to obtain volume 

discounts on its purchases nor be able 

to justify maintaining major capital 

equipment. Thus, the impact on a 

manufacturing facility due to a line 

closure may affect more employees than 

just the production workers, but as 

stated previously, this analysis focuses 

on the production workers impacted 

directly. The aforementioned scenarios, 

however, are considered relative to 

employment impacts specific to the 

LVM at the end of this section. 

In the GRIM, DOE used the labor 

content of each product and the 

manufacturing production costs from 

the engineering analysis to estimate the 

annual labor expenditures in the 

commercial clothes washer 

manufacturing industry. DOE used 

information gained through interviews 

with manufacturers to estimate the 

portion of the total labor expenditures 

that is attributable to domestic labor. 

The employment impacts shown in 

Table V.10 represent the potential 

production employment that could 

result following amended energy 

conservation standards. These are 

independent of the employment impacts 

from the broader U.S. economy, which 

are documented in chapter 16 of the 

NOPR TSD. 

DOE estimates that in the absence of 

amended energy conservation 

standards, there would be 334 domestic 

production workers involved in 

manufacturing commercial clothes 

washers in 2018. Table V.10 shows the 

range of the impacts of potential 

amended energy conservation standards 

on U.S. production workers in the 

commercial clothes washer 

manufacturing industry. The upper end 

of the results in this table estimates the 

total potential increase in the number of 

production workers after amended 

energy conservation standards. To 

calculate the total potential increase, 

DOE assumed that manufacturers 

continue to produce the same scope of 

covered products in domestic 

production facilities and domestic 

production is not shifted to lower-laborcost countries. Because there is a risk of 

manufacturers evaluating sourcing 

decisions in response to amended 

energy conservation standards, the 

lower end of the range of employment 

results in Table V.10 includes the 

estimated total number of U.S. 

production workers in the industry who 

could lose their jobs if all existing 

production were moved outside of the 

United States. 

TABLE V.10—CHANGE IN TOTAL NUMBER OF DOMESTIC PRODUCTION EMPLOYEES IN 2018 IN THE CCW INDUSTRY

Base case TSL 1 TSL 2 TSL 3 

Total Number of Domestic Production Workers in 2018 ................................. 334 334 334 364 

Potential Changes in Domestic Production Workers in 2018* ........................ ........................ 0–(334) 0–(334) 30–(364) 

Because production employment 

expenditures are assumed to be a fixed 

percentage of Cost of Goods Sold 

(COGS) and the MPCs typically increase 

with more efficient products, labor 

tracks the increased prices in the GRIM. 

As efficiency of washers increases, so 

does the complexity of the machines, 

generally requiring more labor to 

produce. As previously discussed, for 

TSL 1, there is no change in MPCs from 

the base case, and, for TSL 2, there is 

a small increase in MPCs for frontloaders that would be offset by a shift 

in shipments from front-loaders to toploaders. As a result, DOE expects that 

there would be no employment impacts 

among domestic commercial clothes 

washer manufacturers for TSL 1 and 

TSL 2. For TSL 3, the GRIM predicts an 

increase in domestic employment 

following amended standards based on 

the increase in complexity and relative 

price of the equipment. 

Using the U.S. Census Bureau’s 2010 

Annual Survey of Manufactures 39 and 

interviews with manufacturers, DOE 

estimates that approximately 83 percent 

of commercial clothes washers are 

currently produced domestically. In the 

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commercial clothes washer industry, 

100 percent of top-loaders are 

manufactured domestically, while a 

much larger share of front-loaders are 

produced abroad. As illustrated in Table 

V.10, the actual impacts on domestic 

employment after standards would be 

different than estimated if any U.S. 

manufacturer decided to shift remaining 

U.S. production to lower-cost countries. 

The proposed standard could result in 

losing all 334 production workers if all 

U.S. manufacturers source standardscompliant washers or shift U.S. 

production abroad. However, feedback 

from manufacturers during NOPR 

interviews supports the notion that toploading commercial clothes washers 

will continue to be produced 

domestically following amended energy 

conservation standards, unless the maxtech level is chosen. 

c. Impacts on Manufacturing Capacity 

According to the majority of 

commercial clothes washer 

manufacturers, new energy conservation 

standards could potentially impact 

manufacturers’ production capacity 

depending on the efficiency level 

required. For TSL 1 and TSL 2, the most 

significant conversion costs are the 

research and development, testing, and 

certification of products with moreefficient components, which does not 

affect production line capacity. 

Available information indicates that 

manufacturers will be able to maintain 

manufacturing capacity levels and 

continue to meet market demand under 

new energy conservation standards as 

long as manufacturers continue to offer 

top-loading and front-loading washers. 

However, a very high efficiency 

standard for top-loading clothes washers 

could cause certain manufacturers to 

abandon further domestic production of 

top-loading clothes washers after the 

effective date, and choose instead to 

relocate manufacturing abroad or to 

source from a foreign manufacturer, 

which could lead to a permanently 

lower production capacity within the 

commercial clothes washer industry. 

d. Impacts on Subgroups of 

Manufacturers 

Using average cost assumptions to 

develop an industry cash flow estimate 

is not adequate for assessing differential 

impacts among subgroups of 

manufacturers. Small manufacturers, 

niche players, or manufacturers 

exhibiting a cost structure that differs 

significantly from the industry average 

could be affected differently. DOE used 

the results of the industry 

characterization to group manufacturers 

exhibiting similar characteristics. 

As outlined earlier, one LVM of 

commercial clothes washers would be 

disproportionately affected by any 

energy efficiency regulation in the 

commercial clothes washer industry. 

This business is focused on one specific 

market segment and is at least ten times 

smaller than its diversified competitors. 

Due to this combination of market 

concentration and size, this LVM is at 

risk of material harm to its business, 

depending on the TSL chosen. 

The commercial clothes washer LVM 

indicated that it could not manufacture 

top-loading or front-loading washers at 

the proposed max-tech level (MEFJ2 of 

1.55 and 2.20, respectively, as 

determined using appendix J2) with its 

existing manufacturing capital and 

platform constraints. If DOE were to set 

the standard at the max-tech level, the 

LVM believes that a ‘‘green field’’ design 

for front-loaders would likely be 

required. For top-loaders, the LVM 

asserts that it does not have the 

technology to reach the max-tech level, 

and it would be forced to develop an 

entirely new business model, possibly 

ceasing commercial clothes washer 

production altogether, sourcing from 

abroad, shifting production abroad, or 

some combination thereof, which could 

cause employment impacts in the 

commercial clothes washer industry. If 

the LVM no longer offers top-loading 

washers, it would likely cease 

commercial clothes washer production 

altogether, resulting in significant 

impacts to the industry. Currently, the 

LVM’s top-loading washers account for 

more than half of the company’s 

commercial clothes washer revenues 

and three-quarters of its commercial 

clothes washer shipments. To shift all 

top-loading commercial clothes washers 

to front-loading washers at current 

production volumes would require 

substantial investments that the 

company may not be able to justify. In 

addition, the LVM derives an estimated 

88 percent of its clothes washer revenue 

from commercial clothes washers, so its 

sales in the residential clothes washer 

market would be too low to justify 

continuing any top-loading clothes 

washer manufacturing. Further detail 

and separate analysis of impacts on the 

LVM are found in chapter 12 of the 

NOPR TSD. 

e. Cumulative Regulatory Burden 

One aspect of assessing manufacturer 

burden is the cumulative impact of 

multiple DOE standards and the 

regulatory actions of other Federal 

agencies and states that affect the 

manufacturers of a covered product or 

equipment. While any one regulation 

may not impose a significant burden on 

manufacturers, the combined effects of 

several existing or impending 

regulations may have serious 

consequences for some manufacturers, 

groups of manufacturers, or an entire 

industry. 

Companies that produce a wider 

range of regulated products may be 

faced with more capital and product 

development expenditures than their 

competitors. This can prompt those 

companies to exit the market or reduce 

their product offerings, potentially 

reducing competition. Smaller 

companies can be especially affected, 

since they have lower sales volumes 

over which to amortize the costs of 

compliance with new regulations. 

In addition to DOE’s energy 

conservation regulations for commercial 

clothes washers, several other existing 

regulations apply to these products and 

other equipment produced by the same 

manufacturers. The most significant of 

these additional regulations include 

several additional existing or proposed 

Federal and State energy conservation 

and environmental standards, consumer 

product safety standards, the Green 

Chemistry law in California, and 

standards impacting commercial clothes 

washer suppliers such as the Conflict 

Minerals directive contained within the 

Dodd-Frank Act of 2010. 

Most manufacturers interviewed also 

sell products to other countries with 

energy conservation and standby 

standards. Manufacturers may incur a 

substantial cost to the extent that there 

are overlapping testing and certification 

requirements in other markets besides 

the United States. Because DOE has 

authority to set standards on products 

sold in the United States, DOE accounts 

only for domestic compliance costs in 

its analysis of cumulative regulatory 

burdens impacting commercial clothes 

washer manufacturers. For more details, 

see chapter 12 of the NOPR TSD. 

3. National Impact Analysis 

Projections of shipments are an 

important part of the NIA. As discussed 

in section IV.G, The market shares of the 

equipment classes are somewhat 

sensitive to the installed cost of new 

equipment. DOE applied a cross-price 

elasticity to estimate how the market 

would shift between front-loading and 

top-loading units in response to a 

change in price of the unit. 

Table V.11presents the estimated 

cumulative shipments in 2018–2047 in 

the base case and under each TSL. 

Because DOE found CCW units to be 

relatively price inelastic, DOE estimated 

that the potential standards would not 

affect total shipments. 

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40EPCA requires DOE to review its standards at 

least once every 6 years, and requires, for certain 

products, a 3-year period after any new standard is 

promulgated before compliance is required, except 

that in no case may any new standards be required 

within 6 years of the compliance date of the 

previous standards. While adding a 6-year review 

to the 3-year compliance period adds up to 9 years, 

DOE notes that it may undertake reviews at any 

time within the 6 year period and that the 3-year 

compliance date may yield to the 6-year backstop. 

A 9-year analysis period may not be appropriate 

given the variability that occurs in the timing of 

standards reviews and the fact that for some 

consumer products, the compliance period is 5 

years rather than 3 years. 

TABLE V.11—PROJECTED CUMULATIVE SHIPMENTS OF FRONT- AND TOP-LOADING COMMERCIAL CLOTHES WASHER UNITS

IN 2018–2047 

[Million units] 

Base case 

TSL1 

FL: EL1 

TL:EL1 

TSL2 

FL: EL2 

TL:EL1 

TSL3 

Max Tech 

FL: EL3 

TL:EL2 

Front Loading ................................................................................................... 2.813 2.813 2.812 2.900 

Top Loading ..................................................................................................... 3.465 3.465 3.466 3.379 

Total ................................................................................................................. 6.278 6.278 6.278 6.278 

a. Significance of Energy Savings 

For each TSL, DOE projected energy 

savings for front-loading and toploading commercial clothes washer unit 

purchased in the 30-year period that 

begins in the year of anticipated 

compliance with amended standards 

(2018–2047). The savings are measured 

over the entire lifetime of equipment 

purchased in the 30-year period. DOE 

quantified the energy savings 

attributable to each TSL as the 

difference in energy consumption 

between each standards case and the 

base case. Table V.12 presents the 

estimated primary energy savings for 

each considered TSL, and Table V.13 

presents the estimated FFC energy 

savings for each TSL. The approach for 

estimating national energy savings is 

further described in section IV.H. 

TABLE V.12—CUMULATIVE PRIMARY ENERGY SAVINGS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES

WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2047 

Equipment class 

Trial standard level 

1 2 3 

quads 

Front Loading CCW Units ........................................................................................................... 0.007 0.023 0.005 

Top Loading CCW Units .............................................................................................................. 0.086 0.085 0.163 

Total All Classes ................................................................................................................... 0.092 0.109 0.168 

TABLE V.13—CUMULATIVE FULL-FUEL-CYCLE ENERGY SAVINGS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2047 

Equipment class 

Trial standard level 

1 2 3 

quads 

Front Loading CCW Units ........................................................................................................... 0.007 0.025 0.005 

Top Loading CCW Units .............................................................................................................. 0.090 0.090 0.170 

Total All Classes ................................................................................................................... 0.097 0.114 0.175 

For this rulemaking, DOE undertook a 

sensitivity analysis using nine instead of 

30 years of equipment 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.40 This timeframe may not be 

statistically relevant with regard to the 

equipment lifetime, equipment 

manufacturing cycles or other factors 

specific to front-loading and top-loading 

commercial clothes washer equipment. 

Thus, this information is presented for 

informational purposes only and is not 

indicative of any change in DOE’s 

analytical methodology. The NES 

results based on a 9-year analytical 

period are presented in Table V.14. The 

impacts are counted over the lifetime of 

commercial clothes washers purchased 

in 2018–2026. 

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12338 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

41OMB Circular A–4, section E (Sept. 17, 2003). 

Available at: http://www.whitehouse.gov/omb/

circulars_a004_a-4. 

TABLE V.14—CUMULATIVE PRIMARY ENERGY SAVINGS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES

WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2026 

Equipment class 

Trial standard level 

1 2 3 

quads 

Front Loading CCW Units ........................................................................................................... 0.002 0.006 0.001 

Top Loading CCW Units .............................................................................................................. 0.024 0.024 0.046 

Total All Classes ................................................................................................................... 0.026 0.030 0.047 

b. Net Present Value of Customer Costs 

and Benefits 

DOE estimated the cumulative NPV of 

the total costs and savings for customers 

that would result from the TSLs 

considered for CCWs. In accordance 

with OMB’s guidelines on regulatory 

analysis,41 DOE calculated the NPV 

using both a 7-percent and a 3-percent 

real discount rate. The 7-percent rate is 

an estimate of the average before-tax rate 

of return on private capital in the U.S. 

economy, and reflects the returns on 

real estate and small business capital as 

well as corporate capital. This discount 

rate approximates the opportunity cost 

of capital in the private sector. The 3- 

percent rate reflects the potential effects 

of standards on private consumption 

(e.g., through higher prices for 

equipment and reduced purchases of 

energy). This rate represents the rate at 

which society discounts future 

consumption flows to their present 

value. It can be approximated by the 

real rate of return on long-term 

government debt (i.e., yield on United 

States Treasury notes), which has 

averaged about 3 percent for the past 30 

years. 

Table V.15 shows the customer NPV 

results for each TSL considered for 

CCWs. In each case, the impacts cover 

the lifetime of equipment purchased in 

2018–2047. 

TABLE V.15—NET PRESENT VALUE OF CUSTOMER BENEFITS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2047 

Equipment class 

Discount 

rate 

% 

Trial standard level 

1 2 3 

billion 2012$ 

Front Loading CCW Units ................................................................................ 3 0.120 0.344 -0.132 

Top Loading CCW Units .................................................................................. ........................ 0.596 0.594 2.131 

Total All Classes .............................................................................................. ........................ 0.716 0.938 1.999 

Front Loading CCW Units ................................................................................ 7 0.051 0.145 -0.060 

Top Loading CCW Units .................................................................................. ........................ 0.261 0.260 0.910 

Total All Classes ....................................................................................... ........................ 0.311 0.405 0.850 

The NPV results based on the nineyear analytical period discussed in 

section V.B.3.a are presented in Table 

V.16. The impacts are counted over the 

lifetime of equipment purchased in 

2018–2026. As mentioned previously, 

this information is presented for 

informational purposes only and is not 

indicative of any change in DOE’s 

analytical methodology or decision 

criteria. 

TABLE V.16—NET PRESENT VALUE OF CUSTOMER BENEFITS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2026 †

Equipment class 

Discount 

rate 

% 

Trial standard level 

1 2 3 

billion 2012$ 

Front Loading CCW Units ................................................................................ 3 0.04 0.11 (0.04) 

Top Loading CCW Units .................................................................................. ........................ 0.21 0.21 0.71 

Total All Classes .............................................................................................. ........................ 0.24 0.31 0.67 

Front Loading CCW Units ................................................................................ 7 0.02 0.06 (0.03) 

Top Loading CCW Units .................................................................................. ........................ 0.13 0.12 0.42 

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TABLE V.16—NET PRESENT VALUE OF CUSTOMER BENEFITS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS FOR UNITS SOLD IN 2018–2026 †—Continued 

Equipment class 

Discount 

rate 

% 

Trial standard level 

1 2 3 

Total All Classes ....................................................................................... ........................ 0.15 0.19 0.40 

†Values in parentheses are negative values. 

c. Indirect Impacts on Employment 

DOE expects energy conservation 

standards for front-loading and toploading commercial clothes washers to 

reduce energy costs for equipment 

owners, and the resulting net savings to 

be redirected to other forms of economic 

activity. Those shifts in spending and 

economic activity could affect the 

demand for labor. As described in 

section IV.N, DOE used an input/output 

model of the U.S. economy to estimate 

indirect employment impacts of the 

TSLs that DOE considered in this 

rulemaking. DOE understands that there 

are uncertainties involved in projecting 

employment impacts, especially 

changes in the later years of the 

analysis. Therefore, DOE generated 

results for near-term time frames, where 

these uncertainties are reduced. 

The results suggest that the proposed 

standards are likely to have negligible 

impact on the net demand for labor in 

the economy. The net change in jobs is 

so small that it would be imperceptible 

in national labor statistics and might be 

offset by other, unanticipated effects on 

employment. Chapter 16 of the NOPR 

TSD presents detailed results. 

4. Impact on Utility 

As discussed in section IV.C, DOE has 

determined that the standards it is 

proposing today will not lessen the 

utility of front-loading and top-loading 

commercial clothes washers. 

5. Impact of Any Lessening of 

Competition 

DOE considers any lessening of 

competition likely to result from 

amended standards. The Attorney 

General determines the impact, if any, 

of any lessening of competition likely to 

result from a proposed standard, and 

transmits such determination to the 

Secretary, together with an analysis of 

the nature and extent of such impact. 

To assist the Attorney General in 

making such determination, DOE will 

provide DOJ with copies of this NOPR 

and the TSD for review. DOE will 

consider DOJ’s comments on the 

proposed rule in preparing the final 

rule, and DOE will publish and respond 

to DOJ’s comments in that document. 

6. Need of the Nation to Conserve 

Energy 

Enhanced energy efficiency, where 

economically justified, improves the 

nation’s energy security, strengthens the 

economy, and reduces the 

environmental impacts or costs of 

energy production. Reduced electricity 

demand due to energy conservation 

standards is also likely to reduce the 

cost of maintaining the reliability of the 

electricity system, particularly during 

peak-load periods. As a measure of this 

reduced demand, chapter 15 in the 

NOPR TSD presents the estimated 

reduction in generating capacity for the 

TSLs that DOE considered in this 

rulemaking. 

Energy savings from standards for 

front-loading and top-loading 

commercial clothes washers could also 

produce environmental benefits in the 

form of reduced emissions of air 

pollutants and greenhouse gases. Table 

V.17 provides DOE’s estimate of 

cumulative emissions reductions 

projected to result from the TSLs 

considered in this rulemaking. DOE 

reports annual emissions reductions for 

each TSL in chapter 13 of the NOPR 

TSD. 

TABLE V.17—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS

Trial standard level 

1 2 3 

Power Sector and Site Emissions * 

CO2 (million metric tons) ....................................................................................................... 4 .5 5 .4 8 .2 

SO2 (thousand tons) .............................................................................................................. 4 .0 4 .3 8 .6 

NOX (thousand tons) ............................................................................................................. 1 .2 1 .7 1 .2 

Hg (tons) ................................................................................................................................ 0 .00 0 .01 0 .01 

N2O (thousand tons) .............................................................................................................. 0 .07 0 .07 0 .14 

CH4 (thousand tons) .............................................................................................................. 0 .40 0 .44 0 .83 

Upstream Emissions 

CO2 (million metric tons) ....................................................................................................... 0 .4 0 .5 0 .7 

SO2 (thousand tons) .............................................................................................................. 0 .04 0 .04 0 .08 

NOX (thousand tons) ............................................................................................................. 6 .0 7 .4 10 .0 

Hg (tons) ................................................................................................................................ 0 .00 0 .00 0 .00 

N2O (thousand tons) .............................................................................................................. 0 .002 0 .002 0 .004 

CH4 (thousand tons) .............................................................................................................. 40.4 49 .7 65 .3 

Total Emissions 

CO2 (million metric tons) ....................................................................................................... 5 .0 5 .9 8 .8 

SO2 (thousand tons) .............................................................................................................. 4 .0 4 .4 8 .7 

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12340 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

TABLE V.17—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL

CLOTHES WASHERS TRIAL STANDARD LEVELS—Continued 

Trial standard level 

1 2 3 

NOX (thousand tons) ............................................................................................................. 7 .3 9 .1 11 .1 

Hg (tons) ................................................................................................................................ 0 .00 0 .01 0 .01 

N2O (thousand tons) .............................................................................................................. 0 .07 0 .08 0 .15 

N2O (thousand tons CO2eq) ** .............................................................................................. 20 .4 22 .6 43 .2 

CH4 (thousand tons) .............................................................................................................. 40.8 50 .1 66 .2 

CH4 (thousand tons CO2eq) ** ............................................................................................... 1019 .1 1253 .4 1654 .1 

* Includes site emissions from gas water heaters. 

** CO2eq is the quantity of CO2 that would have the same global warming potential (GWP). 

As part of the analysis for this rule, 

DOE estimated monetary benefits likely 

to result from the reduced emissions of 

CO2 and NOX that DOE estimated for 

each of the TSLs considered. As 

discussed in section IV.L, DOE used the 

most recent values for the SCC 

developed by an interagency process. 

The four sets of SCC values resulting 

from that process (expressed in 2012$) 

are represented by $11.8/metric ton (the 

average value from a distribution that 

uses a 5-percent discount rate), $39.7/

metric ton (the average value from a 

distribution that uses a 3-percent 

discount rate), $61.2/metric ton (the 

average value from a distribution that 

uses a 2.5-percent discount rate), and 

$117/metric ton (the 95th-percentile 

value from a distribution that uses a 3- 

percent discount rate). These values 

correspond to the value of emission 

reductions in 2015; the values for later 

years are higher due to increasing 

damages as the projected magnitude of 

climate change increases. 

Table V.18 presents the global value 

of CO2 emissions reductions at each 

TSL. For each of the four cases, DOE 

calculated a present value of the stream 

of annual values using the same 

discount rate as was used in the studies 

upon which the dollar-per-ton values 

are based. DOE calculated domestic 

values as a range from 7 percent to 23 

percent of the global values, and these 

results are presented in chapter 14 of 

the NOPR TSD. 

TABLE V.18—ESTIMATES OF PRESENT VALUE OF CO2 EMISSIONS REDUCTION UNDER FRONT-LOADING AND TOP-LOADING

COMMERCIAL CLOTHES WASHERS TRIAL STANDARD LEVELS

TSL 

SCC Case * 

5% discount rate, average * 3% discount rate, average * 2.5% discount rate, average * 3% discount rate, 95th percentile * 

Million 2012$ 

Power Sector and Site Emissions 

1 ....... 30 .06 139 .38 221 .96 430 .59 

2 ....... 35 .45 164 .70 262 .39 508 .93 

3 ....... 54 .38 251 .50 400 .32 776 .76 

Upstream Emissions 

1 ....... 2 .652 12 .450 19 .876 38 .514 

2 ....... 3 .219 15 .136 24 .170 46 .828 

3 ....... 4 .434 20 .818 33 .234 64 .399 

Total Emissions 

1 ....... 32 .71 151 .83 241 .83 469 .10 

2 ....... 38 .67 179 .84 286 .56 555 .76 

3 ....... 58 .81 272 .31 433 .55 841 .16 

* For each of the four cases, the corresponding global SCC value for emissions in 2015 is $11.8, $39.7, $61.2, and $117 per metric ton 

(2012$). 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other 

greenhouse gas (GHG) emissions to 

changes in the future global climate and 

the potential resulting damages to the 

world economy continues to evolve 

rapidly. Thus, any value placed on 

reducing CO2 emissions in this 

rulemaking is subject to change. DOE, 

together with other Federal agencies, 

will continue to review various 

methodologies for estimating the 

monetary value of reductions in CO2

and other GHG emissions. This ongoing 

review will consider the comments on 

this subject that are part of the public 

record for this and other rulemakings, as 

well as other methodological 

assumptions and issues. However, 

consistent with DOE’s legal obligations, 

and taking into account the uncertainty 

involved with this particular issue, DOE 

has included in this proposed rule the 

most recent values and analyses 

resulting from the interagency process. 

DOE also estimated the cumulative 

monetary value of the economic benefits 

associated with NOX emissions 

reductions anticipated to result from 

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amended standards for Front-loading 

and Top-loading CCWs. The dollar-perton values that DOE used are discussed 

in section IV.L. Table V.19 presents the 

cumulative present values for each TSL 

calculated using seven-percent and 

three-percent discount rates. 

TABLE V.19—ESTIMATES OF PRESENT VALUE OF NOX EMISSIONS REDUCTION UNDER FRONT-LOADING AND TOPLOADING COMMERCIAL CLOTHES WASHERS TRIAL STANDARD LEVELS

TSL 3% discount rate 7% discount rate 

Million 2012$ 

Power Sector and Site Emissions 

1 ....... 1.18 0.26 

2 ....... 1.77 0.50 

3 ....... 0.63 ¥0.30 

Upstream Emissions 

1 ....... 7.93 3.60 

2 ....... 9.66 4.36 

3 ....... 13.07 5.93 

Upstream Emissions 

1 ....... 9.10 3.85 

2 ....... 11.43 4.86 

3 ....... 13.71 5.63 

7. Summary of National Economic 

Impacts 

The NPV of the monetized benefits 

associated with emissions reductions 

can be viewed as a complement to the 

NPV of the customer savings calculated 

for each TSL considered in this 

rulemaking. Table V.20 presents the 

NPV values that result from adding the 

estimates of the potential economic 

benefits resulting from reduced CO2 and 

NOX emissions in each of four valuation 

scenarios to the NPV of customer 

savings calculated for each TSL 

considered in this rulemaking, at both a 

seven-percent and three-percent 

discount rate. The CO2 values used in 

the columns of each table correspond to 

the four sets of SCC values discussed 

above. 

TABLE V.20—NET PRESENT VALUE OF CUSTOMER SAVINGS COMBINED WITH PRESENT VALUE OF MONETIZED BENEFITS

FROM CO2 AND NOX EMISSIONS REDUCTIONS

TSL 

Customer NPV at 3% discount rate added with: 

SCC Case $11.8/metric ton 

CO2* 

SCC Case $39.7/metric ton 

CO2* 

SCC Case $61.2/metric ton 

CO2* 

SCC Case $117/metric ton 

CO2* 

Billion 2012$ 

1 ....... 0.8 0.9 1.0 1.2 

2 ....... 1.0 1.1 1.2 1.5 

3 ....... 2.1 2.3 2.4 2.9 

TSL 

Customer NPV at 7% Discount Rate added with: 

SCC Case $11.8/metric ton 

CO2* 

SCC Case $39.7/metric ton 

CO2* 

SCC Case $61.2/metric ton 

CO2* 

SCC Case $117/metric ton 

CO2* 

Billion 2012$ 

1 ....... 0.3 0.5 0.6 0.8 

2 ....... 0.4 0.6 0.7 1.0 

3 ....... 0.9 1.1 1.3 1.7 

* These label values represent the global SCC in 2015, in 2012$. For NOX emissions, each case uses the medium value, which corresponds 

to $2,639 per ton. 

Although adding the value of 

customer savings to the values of 

emission reductions provides a valuable 

perspective, two issues should be 

considered. First, the national operating 

cost savings are domestic U.S. customer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and the SCC are 

performed with different methods that 

use different time frames for analysis. 

The national operating cost savings is 

measured for the lifetime of equipment 

shipped in 2018–2047. The SCC values, 

on the other hand, reflect the present 

value of future climate-related impacts 

resulting from the emission of one 

metric ton of CO2 in each year. These 

impacts continue well beyond 2100. 

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8. Other Factors 

The Secretary of Energy, in 

determining whether a standard is 

economically justified, may consider 

any other factors that the Secretary 

deems to be relevant. (42 U.S.C. 

6313(a)(6)(B)(ii)(VII)) No other factors 

were considered in this analysis. 

C. Proposed Standards 

When considering proposed 

standards, the new or amended energy 

conservation standard that DOE adopts 

for any type (or class) of covered 

equipment shall be designed to achieve 

the maximum improvement in energy 

efficiency that the Secretary of Energy 

determines is technologically feasible 

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

6295(o)(2)(A) and 6316(a)) In 

determining whether a standard is 

economically justified, the Secretary 

must determine whether the benefits of 

the standard exceed its burdens to the 

greatest extent practicable, considering 

the seven statutory factors discussed 

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

and 6316(a)) The new or amended 

standard must also ‘‘result in significant 

conservation of energy.’’ (42 U.S.C. 

6295(o)(3)(B) and 6316(a)) 

For today’s NOPR, DOE considered 

the impacts of standards at each TSL, 

beginning with the maximum 

technologically feasible level, to 

determine whether that level was 

economically justified. Where the maxtech level was not justified, DOE then 

considered the next most efficient level 

and undertook the same evaluation until 

it reached the highest efficiency level 

that is technologically feasible, 

economically justified and saves a 

significant amount of energy. 

To aid the reader in understanding 

the benefits and/or burdens of each TSL, 

tables in this section summarize the 

quantitative analytical results for each 

TSL, based on the assumptions and 

methodology discussed herein. The 

efficiency levels contained in each TSL 

are described in section V.A. In addition 

to the quantitative results presented in 

the tables, DOE also considers other 

burdens and benefits that affect 

economic justification. These include 

the impacts on identifiable subgroups of 

customers who may be 

disproportionately affected by a national 

standard (see section V.B.1.b), and 

impacts on employment. DOE discusses 

the impacts on employment in frontloading and top-loading commercial 

clothes washer equipment 

manufacturing in section V.B.2, and 

discusses the indirect employment 

impacts in section V.B.3.c. 

1. Benefits and Burdens of Trial 

Standard Levels Considered for FrontLoading and Top-Loading Commercial 

Clothes Washers 

Table V.21 and Table V.22 summarize 

the quantitative impacts estimated for 

each TSL for front-loading and toploading commercial clothes washers. 

TABLE V.21—SUMMARY OF ANALYTICAL RESULTS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES

WASHERS: NATIONAL IMPACTS

Category TSL 1 TSL 2 TSL 3 

National FFC Energy Savings quads 

0.097 0.114 0.175 

NPV of Customer Benefits 2012$ billion 

3% discount rate ........................................................................................................ 0.72 0.94 2.00 

7% discount rate ........................................................................................................ 0.31 0.40 0.85 

Cumulative Emissions Reduction (Total FFC Emissions) 

CO2 million metric tons .............................................................................................. 4.94 5.87 8.84 

NOX thousand tons .................................................................................................... 7.26 9.10 11.14 

Hg tons ...................................................................................................................... 0.00 0.01 0.01 

N2O thousand tons .................................................................................................... 0.07 0.08 0.15 

N2O thousand tons CO2eq* ...................................................................................... 20.37 22.57 43.25 

CH4 thousand tons .................................................................................................... 40.77 50.14 66.16 

CH4 thousand tons CO2eq* ....................................................................................... 1,019 1,253 1,654 

SO2 thousand tons .................................................................................................... 3.99 4.36 8.69 

Value of Emissions Reduction (Total FFC Emissions) 

CO2 2012$ million ** .................................................................................................. 32.7 to 469.1 38.7 to 555.8 58.8 to 841.2 

NOX—3% discount rate 2012$ million ...................................................................... 9.1 11.43 13.71 

NOX—7% discount rate 2012$ million ...................................................................... 3.85 4.86 5.63 

* CO2eq is the quantity of CO2 that would have the same global warming potential (GWP). 

** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions. 

TABLE V.22—SUMMARY OF ANALYTICAL RESULTS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES

WASHERS: MANUFACTURER AND CONSUMER IMPACTS

Category TSL 1 TSL 2 TSL 3 

Manufacturer Impacts.

Change in Industry NPV (2012$ million) † ................................................................ (5.9) (6.0) (91.2) to (95.4) 

Change in Industry NPV (%) † ................................................................................... (4.7) (4.90) (73.4) to (76.8) 

Customer Mean LCC Savings 2012$ 

Front-Loading, Multi-family ........................................................................................ 229 285 8 

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TABLE V.22—SUMMARY OF ANALYTICAL RESULTS FOR FRONT-LOADING AND TOP-LOADING COMMERCIAL CLOTHES

WASHERS: MANUFACTURER AND CONSUMER IMPACTS—Continued 

Category TSL 1 TSL 2 TSL 3 

Front-Loading, Laundromat † ..................................................................................... 198 235 (19) 

Top-Loading, Multi-family .......................................................................................... 259 259 813 

Top-Loading, Laundromat ......................................................................................... 145 145 654 

Weighted Average * ................................................................................................... 235 257 464

Customer Median PBP years 

Front-Loading, Multi-family ........................................................................................ 0.0 0.0 3.8 

Front-Loading, Laundromat ....................................................................................... 0.0 0.0 8.0 

Top-Loading, Multi-family .......................................................................................... 0.0 0.0 0.6 

Top-Loading, Laundromat ......................................................................................... 0.0 0.0 0.6 

Weighted Average * ................................................................................................... 0.0 0.0 2.2

Front-Loading, Multi-Family 

Customers with Net Cost % ...................................................................................... 0 0 46 

Customers with Net Benefit % .................................................................................. 27 61 53 

Customers with No Impact % .................................................................................... 73 39 0 

Front-Loading, Laundromat 

Customers with Net Cost % ...................................................................................... 0 0 72 

Customers with Net Benefit % .................................................................................. 27 61 28 

Customers with No Impact % .................................................................................... 73 39 0 

Top-Loading, Multi-Family 

Customers with Net Cost % ...................................................................................... 0 0 0 

Customers with Net Benefit % .................................................................................. 99 99 100 

Customers with No Impact % .................................................................................... 1 1 0 

Top-Loading, Laundromat 

Customers with Net Cost % ...................................................................................... 0 0 0 

Customers with Net Benefit % .................................................................................. 99 99 100 

Customers with No Impact % .................................................................................... 1 1 0 

* Weighted by shares of each equipment class in total projected shipments in 2018. 

†Values in parentheses are negative values. 

First, DOE considered TSL 3, the most 

efficient level (max tech), which would 

save an estimated total of 0.17 quads of 

energy, an amount DOE considers 

significant. TSL 3 has an estimated NPV 

of customer benefit of $0.85 billion 

using a 7 percent discount rate, and 

$1.99 billion using a 3 percent discount 

rate. 

The cumulative emissions reductions 

at TSL 3 are 8.8 million metric tons of 

CO2, 11.1 thousand tons of NOX, 8.7 

thousand tons of SO2, and 0.01 tons of 

Hg. The estimated monetary value of the 

CO2 emissions reductions at TSL 3 

ranges from $59 million to $841 million. 

At TSL 3, the average LCC savings is 

$8 and ¥$19 for multi-family and 

laundromat applications for frontloading CCW units, and $813 and $654 

for multi-family and laundromat 

applications for top-loading CCW units. 

The median PBP is 4 and 8 years for 

multi-family and laundromat 

applications for front-loading CCW 

units, and 0.6 years for both 

applications for top-loading CCW units. 

The share of customers experiencing a 

net LCC benefit is 53 percent and 28 

percent for multi-family and laundromat 

applications for front-loading CCW 

units, and 99.8 percent for both 

applications for top-loading CCW units. 

At TSL 3, the projected change in 

INPV ranges from a decrease of $91.2 

million to a decrease of $95.4 million, 

equivalent to 73.4 percent and 76.8 

percent, respectively. Products that 

meet the efficiency standards specified 

by this TSL are forecast to represent 

only 12 percent of shipments in the year 

leading up to amended standards. As 

such, manufacturers would have to 

redesign nearly all products by the 2018 

compliance date to meet demand. 

Redesigning all units to meet the current 

max-tech efficiency levels would 

require considerable capital and 

equipment conversion expenditures. At 

TSL 3, the capital conversion costs total 

$63.1 million, 13.1 times the industry 

annual capital expenditure in the year 

leading up to amended standards. DOE 

estimates that complete platform 

redesigns would cost the industry $62.4 

million in equipment conversion costs. 

These conversion costs largely relate to 

the research programs required to 

develop new products that meet the 

efficiency standards set forth by TSL 3. 

These costs are equivalent to 14.3 times 

the industry annual budget for research 

and development. Total capital and 

equipment conversion costs associated 

with the changes in products and 

manufacturing facilities required at TSL 

3 would require significant use of 

manufacturers’ financial reserves 

(manufacturer capital pools), impacting 

other areas of business that compete for 

these resources, and significantly 

reducing INPV. In addition, 

manufacturers could face a substantial 

impact on profitability at TSL 3. 

Because manufacturers are more likely 

to reduce their margins to maintain a 

price-competitive product at higher 

TSLs, DOE expects that TSL 3 would 

yield impacts closer to the high end of 

the range of INPV impacts. If the high 

end of the range of impacts is reached, 

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42 DOE used a two-step calculation process to 

convert the time-series of costs and benefits into 

annualized values. First, DOE calculated a present 

value in 2013, the year used for discounting the 

NPV of total customer costs and savings, for the 

time-series of costs and benefits using discount 

rates of three and seven percent for all costs and 

benefits except for the value of CO2 reductions. For 

the latter, DOE used a range of discount rates. From 

the present value, DOE then calculated the fixed 

annual payment over a 30-year period (2019 

through 2048) that yields the same present value. 

The fixed annual payment is the annualized value. 

Although DOE calculated annualized values, this 

does not imply that the time-series of cost and 

benefits from which the annualized values were 

determined is a steady stream of payments. 

as DOE expects, TSL 3 could result in 

a net loss of 76.8 percent in INPV to 

commercial clothes washer 

manufacturers. As a result, at TSL 3, 

DOE expects that some companies 

would be forced to exit the commercial 

clothes washer market or shift 

production abroad, both which would 

negatively impact domestic 

manufacturing capacity and 

employment. 

In view of the foregoing, DOE 

concludes that, at TSL 3 for frontloading and top-loading CCW 

equipment, the benefits of energy 

savings, positive NPV of total customer 

benefits, customer LCC savings for three 

of the four applications, emission 

reductions and the estimated monetary 

value of the emissions reductions would 

be outweighed by the negative customer 

impacts for front-loadings CCWs in 

laundromats, the large reduction in 

industry value at TSL 3, as well as the 

potential for loss of domestic 

manufacturing. Consequently, DOE has 

concluded that TSL 3 is not 

economically justified. 

Next, DOE considered TSL 2, which 

would save an estimated total of 0.11 

quads of energy, an amount DOE 

considers significant. TSL 2 has an 

estimated NPV of customer benefit of 

$0.40 billion using a 7 percent discount 

rate, and $0.94 billion using a 3 percent 

discount rate. 

The cumulative emissions reductions 

at TSL 2 are 5.9 million metric tons of 

CO2, 9.1 thousand tons of NOX, 4.4 

thousand tons of SO2, and 0.01 tons of 

Hg. The estimated monetary value of the 

CO2 emissions reductions at TSL 2 

ranges from $39 million to $556 million. 

At TSL 2, the average LCC savings is 

$285 and $235 for front-loading CCW 

units for multi-family application, and 

laundromat application, respectively. 

For top-loading CCW units, the average 

LCC savings are $259 and $145 for 

multi-family and laundromat 

applications. The median PBP is 0.02 

and 0.01 years for multi-family and 

laundromat applications for frontloading CCW units, zero years for toploading CCW units. The share of 

customers experiencing a net LCC 

benefit is 61 percent for front-loading 

CCW units, and 99 percent for toploading CCW units. 

At TSL 2, the projected change in 

INPV is a decrease of $6.0 million, or a 

decrease of 4.9 percent. Although 

products that meet the efficiency 

standards specified by this TSL are 

forecast to represent only 15 percent of 

shipments in the year leading up to 

amended standards, DOE’s testing and 

reverse-engineering analyses indicate 

that manufacturers can achieve TSL 2 at 

little or no additional capital cost 

compared to models at the current 

baseline levels. Through its analyses, 

DOE observed that manufacturers 

generally employ control strategies to 

achieve the TSL 2 efficiency levels (e.g., 

changes in water levels, water 

temperatures, and cycle settings 

available to the end user). Accordingly, 

this level corresponds more to 

incremental equipment conversions 

rather than platform redesigns. Thus, 

DOE estimates that compliance with 

TSL 2 would not require any up front 

capital investments, while the industry 

budget for capital expenditure in the 

year leading up to amended standards is 

$4.8 million. TSL 2 will require an 

estimated $10.2 million in equipment 

conversion costs primarily relating to 

the research and development programs 

needed to improve upon existing 

platforms to meet the specified 

efficiency levels. This represents 2.3 

times the industry budget for research 

and development in the year leading up 

to amended standards. The substantial 

reduction in conversion costs 

corresponding to compliance with TSL 

2 greatly mitigates the operational risk 

and impact on INPV. 

After considering the analysis and 

weighing the benefits and the burdens, 

DOE has tentatively concluded that at 

TSL 2 for front-loading and top-loading 

commercial clothes washer equipment, 

the benefits of energy savings, positive 

NPV of customer benefit, positive 

impacts on consumers (as indicated by 

positive average LCC savings, favorable 

PBPs, and the large percentage of 

customers who would experience LCC 

benefits), emission reductions, and the 

estimated monetary value of the 

emissions reductions would outweigh 

the potential reductions in INPV for 

manufacturers. The Secretary of Energy 

has concluded that TSL 2 would save a 

significant amount of energy and is 

technologically feasible and 

economically justified. 

Based on the above considerations, 

DOE today proposes to adopt the energy 

conservation standards for front-loading 

and top-loading commercial clothes 

washers at TSL 2. 

Table V.23 presents the proposed 

energy conservation standards for 

commercial clothes washer equipment. 

TABLE V.23—PROPOSED ENERGY

CONSERVATION STANDARDS FOR

COMMERCIAL CLOTHES WASHERS

Product class Minimum 

MEFJ2* 

Maximum 

IWF †

Top-Loading .............. 1.35 8.8 

TABLE V.23—PROPOSED ENERGY

CONSERVATION STANDARDS FOR

COMMERCIAL CLOTHES WASHERS— 

Continued 

Product class Minimum 

MEFJ2* 

Maximum 

IWF †

Front-Loading ........... 2.00 4.1 

* MEFJ2 (appendix J2 modified energy factor) is calculated as the clothes container capacity in cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) The 

total weighted per-cycle hot water energy consumption; (2) the total weighted per-cycle machine electrical energy consumption; and (3) 

the per-cycle energy consumption for removing moisture from a test load. † IWF (integrated water factor) is calculated 

as the sum, expressed in gallons per cycle, of 

the total weighted per-cycle water consumption for all wash cycles divided by the clothes 

container capacity in cubic feet. 

2. Summary of Benefits and Costs 

(Annualized) of the Proposed Standards 

The benefits and costs of today’s 

proposed standards, for equipment sold 

in 2018–2047, can also be expressed in 

terms of annualized values. The 

annualized monetary values are the sum 

of (1) the annualized national economic 

value of the benefits from consumer 

operation of equipment that meet the 

proposed standards (consisting 

primarily of operating cost savings from 

using less energy, minus increases in 

equipment purchase and installation 

costs, which is another way of 

representing consumer NPV), and (2) 

the annualized monetary value of the 

benefits of emission reductions, 

including CO2 emission reductions.42

Although combining the values of 

operating savings and CO2 emission 

reductions provides a useful 

perspective, two issues should be 

considered. First, the national operating 

savings are domestic U.S. customer 

monetary savings that occur as a result 

of market transactions while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use different time frames for 

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analysis. The national operating cost 

savings is measured for the lifetime of 

front-loading and top-loading 

commercial clothes washers shipped in 

2018–2047. The SCC values, on the 

other hand, reflect the present value of 

some future climate-related impacts 

resulting from the emission of one ton 

of carbon dioxide in each year. These 

impacts continue well beyond 2100. 

Estimates of annualized benefits and 

costs of the proposed standards for 

front-loading and top-loading 

commercial clothes washers are shown 

in Table V.24. The results under the 

primary estimate are as follows. Using a 

7-percent discount rate for benefits and 

costs other than CO2 reduction, for 

which DOE used a 3-percent discount 

rate along with the average SCC series 

that uses a 3-percent discount rate, the 

cost of the standards proposed in 

today’s rule is $0.02 million per year in 

increased equipment costs; while the 

estimated benefits are $31 million per 

year in reduced equipment operating 

costs, $9 million in CO2 reductions, and 

$0.37 million in reduced NOX

emissions. In this case, the net benefit 

would amount to $40 million per year. 

Using a 3-percent discount rate for all 

benefits and costs and the average SCC 

series, the estimated cost of the 

standards proposed in today’s rule is 

$0.02 million per year in increased 

equipment costs; while the estimated 

benefits are $46 million per year in 

reduced operating costs, $9 million in 

CO2 reductions, and $0.57 million in 

reduced NOX emissions. In this case, the 

net benefit would amount to 

approximately $56 million per year. 

TABLE V.24—ANNUALIZED BENEFITS AND COSTS OF PROPOSED STANDARDS FOR FRONT-LOADING AND TOP-LOADING

COMMERCIAL CLOTHES WASHERS (TSL 2) 

Discount rate Primary estimate* Low net benefits 

estimate* 

High net benefits 

estimate* 

million 2012$/year 

Benefits 

Operating Cost Savings ................................. 7% .............................. 31 ............................... 27 ............................... 38. 

3% .............................. 46 ............................... 40 ............................... 60. 

CO2 Reduction Monetized Value ($11.8/t 

case) *.

5% .............................. 2 ................................. 2 ................................. 3. 

CO2 Reduction Monetized Value ($39.7/t 

case) *.

3% .............................. 9 ................................. 8 ................................. 11. 

CO2 Reduction Monetized Value ($61.2/t 

case) *.

2.5% ........................... 13 ............................... 12 ............................... 17. 

CO2 Reduction Monetized Value ($117/t 

case) *.

3% .............................. 28 ............................... 25 ............................... 34. 

NOX Reduction Monetized Value (at $2,639/

ton) **.

7% .............................. 0.37 ............................ 0.33 ............................ 0.45. 

3% .............................. 0.57 ............................ 0.51 ............................ 0.70. 

Total Benefits† ................................................ 7% plus CO2 range ... 33 to 58 ...................... 29 to 52 ...................... 42 to 73. 

7% .............................. 40 ............................... 35 ............................... 50. 

3% plus CO2 range ... 49 to 75 ...................... 43 to 66 ...................... 64 to 95. 

3% .............................. 56 ............................... 49 ............................... 72. 

Costs 

Incremental Product Costs ............................. 7% .............................. 0.02 ............................ 0.02 ............................ 0.02. 

3% .............................. 0.02 ............................ 0.03 ............................ 0.02. 

Net Benefits 

Total† .............................................................. 7% plus CO2 range ... 33 to 58 ...................... 29 to 52 ...................... 42 to 73. 

7% .............................. 40 ............................... 35 ............................... 50. 

3% plus CO2 range ... 49 to 75 ...................... 43 to 66 ...................... 64 to 95. 

3% .............................. 56 ............................... 49 ............................... 72. 

* This table presents the annualized costs and benefits associated with front-loading and top-loading CCW units shipped in 2018–2047. These 

results include benefits to customers which accrue after 2047 from the products purchased in 2018–2047. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The 

Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the AEO2013 Reference case, Low Economic 

Growth case, and High Economic Growth case, respectively. In addition, incremental product costs reflect no change for projected product price 

trends in the Primary Estimate, an increasing trend for projected product prices in the Low Benefits Estimate, and a decreasing trend for projected product prices in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F. 

** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC 

from the three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile 

SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature 

change further out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate 

an escalation factor. The value for NOX is the average of the low and high values used in DOE’s analysis. †Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount 

rate. In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the labeled 

discount rate, and those values are added to the full range of CO2 values. 

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12346 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866 and 13563 

Section 1(b)(1) of Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (Oct. 4, 1993), 

requires each agency to identify the 

problem that it intends to address, 

including, where applicable, the failures 

of private markets or public institutions 

that warrant new agency action, as well 

as to assess the significance of that 

problem. The problems that today’s 

standards address are as follows: 

(1) There is a lack of consumer 

information and/or information 

processing capability about energy 

efficiency opportunities in the 

commercial appliance market. 

(2) There is asymmetric information 

(one party to a transaction has more and 

better information than the other) and/ 

or high transactions costs (costs of 

gathering information and effecting 

exchanges of goods and services). 

(3) There are external benefits 

resulting from improved energy 

efficiency of commercial clothes 

washers that are not captured by the 

users of such equipment. These benefits 

include externalities related to 

environmental protection and energy 

security that are not reflected in energy 

prices, such as reduced emissions of 

greenhouse gases. 

In addition, DOE has determined that 

today’s regulatory action is a 

‘‘significant regulatory action’’ under 

Executive Order 12866. DOE presented 

for review to the Office of Information 

and Regulatory Affairs (OIRA) in the 

OMB the draft rule and other documents 

prepared for this rulemaking, including 

a regulatory impact analysis (RIA), and 

has included these documents in the 

rulemaking record. The assessments 

prepared pursuant to Executive Order 

12866 can be found in the technical 

support document for this rulemaking. 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011 (76 FR 3281, 

Jan. 21, 2011). EO 13563 is 

supplemental to and explicitly reaffirms 

the principles, structures, and 

definitions governing regulatory review 

established in Executive Order 12866. 

To the extent permitted by law, agencies 

are required by Executive Order 13563 

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 

Executive Order 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 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 the preamble, DOE believes 

that today’s NOPR is consistent with 

these principles, including the 

requirement that, to the extent 

permitted by law, benefits justify costs 

and that net benefits are maximized. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’, 5 U.S.C. 601 et seq.) requires 

preparation of an initial regulatory 

flexibility analysis (IRFA) 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 Executive Order 13272, 

‘‘Proper Consideration of Small Entities 

in Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies 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 Web site (http://energy.gov/ 

gc/office-general-counsel). 

DOE reviewed today’s NOPR pursuant 

to the RFA and the policies and 

procedures discussed above. DOE 

certifies that the standards established 

in today’s NOPR, published elsewhere 

in today’s Federal Register, will not 

have a significant impact on a 

substantial number of small entities. 

The factual basis for this certification is 

set forth below. DOE will consider any 

comments on the certification or 

economic impacts of the rule in 

determining whether to proceed with 

the NOPR. 

For manufacturers of commercial 

clothes washers, the Small Business 

Administration (SBA) has set a size 

threshold, which defines those entities 

classified as ‘‘small businesses’’ for the 

purposes of the statute. DOE used the 

SBA’s small business size standards to 

determine whether any small entities 

would be subject to the requirements of 

the rule. 65 FR 30836, 30848 (May 15, 

2000), as amended at 65 FR 53533, 

53544 (Sept. 5, 2000) and codified at 13 

CFR part 121.The size standards are 

listed by North American Industry 

Classification System (NAICS) code and 

industry description and are available 

at: www.sba.gov/sites/default/files/ 

SizeStandards_Table.pdf. Commercial 

clothes washer manufacturing is 

classified under NAICS 333318, ‘‘Other 

commercial and service industry 

machinery manufacturing.’’ The SBA 

sets a threshold of 1,000 employees or 

less for an entity to be considered as a 

small business for this category. 

To estimate the number of small 

businesses which could be impacted by 

the amended energy conservation 

standards, DOE conducted a market 

survey using available public 

information to identify potential small 

manufacturers. DOE’s research included 

the AHAM membership directory, 

product databases (CEE, CEC, and 

ENERGY STAR databases) and 

individual company Web sites to find 

potential small business manufacturers. 

DOE also asked interested parties and 

industry representatives if they were 

aware of any other small business 

manufacturers during manufacturer 

interviews and at previous DOE public 

meetings. DOE reviewed all publicly 

available data and contacted various 

companies, as necessary, to determine 

whether they met the SBA’s definition 

of a small business manufacturer of 

covered commercial clothes washers. 

DOE screened out companies that did 

not offer products covered by this 

rulemaking, did not meet the definition 

of a ‘‘small business,’’ or are foreign 

owned and operated. 

All top-loading commercial clothes 

washers and approximately 40 percent 

of front-loading commercial clothes 

washers are currently manufactured in 

the United States, accounting for 78 

percent of overall domestic commercial 

clothes washer shipments. Three U.S.- 

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based companies are responsible for this 

78 percent domestic production and 

over 95 percent of commercial clothes 

washer industry market share. Although 

one of these manufacturers has been 

identified and analyzed separately as a 

LVM, none of these manufacturers meet 

the definition of a small business 

manufacturer, as they all have more 

than 1,000 employees. The small 

portion of the remaining commercial 

clothes washer market (approximately 

5,800 shipments) is supplied by a 

combination of 3 international 

companies, all of which have small 

market shares. These companies are all 

foreign owned and operated, and exceed 

the SBA’s employment threshold for 

consideration as a small business under 

the appropriate NAICS code. Therefore, 

DOE did not identify any small business 

manufacturers of commercial clothes 

washers. 

Based on the discussion above, DOE 

certifies that the standards for 

commercial clothes washers set forth in 

today’s rule would not have a 

significant economic impact on a 

substantial number of small entities. 

Accordingly, DOE has not prepared a 

regulatory flexibility analysis for this 

rulemaking. DOE will transmit the 

certification and supporting statement 

of factual basis to the Chief Counsel for 

Advocacy of the SBA for review under 

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

C. Review Under the Paperwork 

Reduction Act 

Manufacturers of commercial clothes 

washers must certify to DOE that their 

products comply with any applicable 

energy conservation standards. In 

certifying compliance, manufacturers 

must test their products according to the 

DOE test procedures for commercial 

clothes washers, including any 

amendments adopted for those test 

procedures. DOE has established 

regulations for the certification and 

recordkeeping requirements for all 

covered consumer products and 

commercial equipment, including 

commercial clothes washers. 76 FR 

12422 (March 7, 2011). The collectionof-information requirement for the 

certification and recordkeeping is 

subject to review and approval by OMB 

under the Paperwork Reduction Act 

(PRA). This requirement has been 

approved by OMB under OMB control 

number 1910–1400. Public reporting 

burden for the certification is estimated 

to average 20 hours per response, 

including the time for reviewing 

instructions, searching existing data 

sources, gathering and maintaining the 

data needed, and completing and 

reviewing the collection of information. 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number. 

D. Review Under the National 

Environmental Policy Act of 1969 

Pursuant to the National 

Environmental Policy Act (NEPA) of 

1969, DOE has determined that the 

proposed rule fits within the category of 

actions included in Categorical 

Exclusion (CX) B5.1 and otherwise 

meets the requirements for application 

of a CX. See 10 CFR Part 1021, App. B, 

B5.1(b); 1021.410(b) and Appendix B, 

B(1)–(5). The proposed rule fits within 

the category of actions because it is a 

rulemaking that establishes energy 

conservation standards for consumer 

products or industrial equipment, and 

for which none of the exceptions 

identified in CX B5.1(b) apply. 

Therefore, DOE has made a CX 

determination for this rulemaking, and 

DOE does not need to prepare an 

Environmental Assessment or 

Environmental Impact Statement for 

this proposed rule. DOE’s CX 

determination for this proposed rule is 

available at http://cxnepa.energy.gov/. 

E. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism.’’ 

64 FR 43255 (Aug. 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. EPCA 

governs and prescribes Federal 

preemption of state regulations as to 

energy conservation for the products 

that are the subject of today’s proposed 

rule. 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) No further 

action is required by Executive Order 

13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform,’’ 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; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. 61 FR 4729 (Feb. 

7, 1996). Section 3(b) of Executive Order 

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 Executive Order 

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 

proposed rule meets the relevant 

standards of Executive Order 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 

proposed 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)) 

The UMRA also requires a Federal 

agency to develop an effective process 

to permit timely input by elected 

officers of state, local, and tribal 

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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 small governments. 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 http://

energy.gov/gc/office-general-counsel. 

DOE examined today’s proposed rule 

according to UMRA and its statement of 

policy. Today’s proposed rule does not 

contain a Federal intergovernmental 

mandate, and DOE expects it will not 

require expenditures of $100 million or 

more by the private sector. Such 

expenditures may include: (1) 

Investment in research and 

development and in capital 

expenditures by commercial clothes 

washer manufacturers in the years 

between the final rule and the 

compliance date for the new standards, 

and (2) incremental additional 

expenditures by consumers to purchase 

higher-efficiency commercial clothes 

washers, starting at the compliance date 

for the applicable standard. Therefore, 

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 rule 

that may affect family well-being. This 

rule would not have any impact on the 

autonomy or integrity of the family as 

an institution. Accordingly, DOE has 

concluded that it is not necessary to 

prepare a Family Policymaking 

Assessment. 

I. Review Under Executive Order 12630 

DOE has determined, under Executive 

Order 12630, ‘‘Governmental Actions 

and Interference with Constitutionally 

Protected Property Rights’’ 53 FR 8859 

(Mar. 18, 1988), that this regulation 

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 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). DOE has reviewed 

today’s NOPR 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 

Executive Order 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 (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy, or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed 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. 

DOE has tentatively concluded that 

today’s regulatory action, which sets 

forth energy conservation standards for 

commercial clothes washers, is not a 

significant energy action because the 

proposed standards are not likely to 

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. Accordingly, 

DOE has not prepared a Statement of 

Energy Effects on the proposed rule. 

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. 70 FR 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal in-progress peer 

reviews of the energy conservation 

standards development process and 

analyses and has prepared a Peer 

Review Report pertaining to the energy 

conservation standards rulemaking 

analyses. 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. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report’’ dated February 2007 has been 

disseminated and is available at the 

following Web site: 

www1.eere.energy.gov/buildings/

appliance_standards/peer_review.html. 

VII. Public Participation 

A. Attendance at the Public Meeting 

The time, date, and location of the 

public meeting are listed in the DATES

and ADDRESSES sections at the beginning 

of this notice. If you plan to attend the 

public meeting, please notify Ms. 

Brenda Edwards at (202) 586–2945 or 

Brenda.Edwards@ee.doe.gov. As 

explained in the ADDRESSES section, 

foreign nationals visiting DOE 

Headquarters are subject to advance 

security screening procedures. 

In addition, you can attend the public 

meeting via webinar. Webinar 

registration information, participant 

instructions, and information about the 

capabilities available to webinar 

participants will be published on DOE’s 

rulemaking Web site at: http://

www1.eere.energy.gov/buildings/

appliance_standards/rulemaking.aspx/

ruleid/56. Participants are responsible 

for ensuring their systems are 

compatible with the webinar software. 

B. Procedure for Submitting Prepared 

General Statements for Distribution 

Any person who has plans to present 

a prepared general statement may 

request that copies of his or her 

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Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 12349 

statement be made available at the 

public meeting. Such persons may 

submit requests, along with an advance 

electronic copy of their statement in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format, to the appropriate address 

shown in the ADDRESSES section at the 

beginning of this notice. The request 

and advance copy of statements must be 

received at least one week before the 

public meeting and may be emailed, 

hand-delivered, or sent by mail. DOE 

prefers to receive requests and advance 

copies via email. Please include a 

telephone number to enable DOE staff to 

make follow-up contact, if needed. 

C. Conduct of the Public Meeting 

DOE will designate a DOE official to 

preside at the public meeting and may 

also use a professional facilitator to aid 

discussion. The meeting will not be a 

judicial or evidentiary-type public 

hearing, but DOE will conduct it in 

accordance with section 336 of EPCA 

(42 U.S.C. 6306). A court reporter will 

be present to record the proceedings and 

prepare a transcript. DOE reserves the 

right to schedule the order of 

presentations and to establish the 

procedures governing the conduct of the 

public meeting. After the public 

meeting, interested parties may submit 

further comments on the proceedings as 

well as on any aspect of the rulemaking 

until the end of the comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the public meeting, 

allow time for prepared general 

statements by participants, and 

encourage all interested parties to share 

their views on issues affecting this 

rulemaking. Each participant will be 

allowed to make a general statement 

(within time limits determined by DOE), 

before the discussion of specific topics. 

DOE will allow, as time permits, other 

participants to comment briefly on any 

general statements. 

At the end of all prepared statements 

on a topic, DOE will permit participants 

to clarify their statements briefly and 

comment on statements made by others. 

Participants should be prepared to 

answer questions by DOE and by other 

participants concerning these issues. 

DOE representatives may also ask 

questions of participants concerning 

other matters relevant to this 

rulemaking. The official conducting the 

public meeting will accept additional 

comments or questions from those 

attending, as time permits. The 

presiding official will announce any 

further procedural rules or modification 

of the above procedures that may be 

needed for the proper conduct of the 

public meeting. 

A transcript of the public meeting will 

be included in the docket, which can be 

viewed as described in the Docket 

section at the beginning of this notice. 

In addition, any person may buy a copy 

of the transcript from the transcribing 

reporter. 

D. Submission of Comments 

DOE will accept comments, data, and 

information regarding this proposed 

rule before or after the public meeting, 

but no later than the date provided in 

the DATES section at the beginning of 

this proposed rule. Interested parties 

may submit comments, data, and other 

information using any of the methods 

described in the ADDRESSES section at 

the beginning of this notice. 

Submitting comments via 

regulations.gov. The regulations.gov 

Web page will require you to provide 

your name and contact information. 

Your contact information will be 

viewable to DOE Building Technologies 

staff only. Your contact information will 

not be publicly viewable except for your 

first and last names, organization name 

(if any), and submitter representative 

name (if any). If your comment is not 

processed properly because of technical 

difficulties, DOE will use this 

information to contact you. If DOE 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, DOE may not be 

able to consider your comment. 

However, your contact information 

will be publicly viewable if you include 

it in the comment itself or in any 

documents attached to your comment. 

Any information that you do not want 

to be publicly viewable should not be 

included in your comment, nor in any 

document attached to your comment. 

Otherwise, persons viewing comments 

will see only first and last names, 

organization names, correspondence 

containing comments, and any 

documents submitted with the 

comments. 

Do not submit to regulations.gov 

information for which disclosure is 

restricted by statute, such as trade 

secrets and commercial or financial 

information (hereinafter referred to as 

Confidential Business Information 

(CBI)). Comments submitted through 

regulations.gov cannot be claimed as 

CBI. Comments received through the 

Web site will waive any CBI claims for 

the information submitted. For 

information on submitting CBI, see the 

Confidential Business Information 

section below. 

DOE processes submissions made 

through regulations.gov before posting. 

Normally, comments will be posted 

within a few days of being submitted. 

However, if large volumes of comments 

are being processed simultaneously, 

your comment may not be viewable for 

up to several weeks. Please keep the 

comment tracking number that 

regulations.gov provides after you have 

successfully uploaded your comment. 

Submitting comments via email, hand 

delivery/courier, or mail. Comments and 

documents submitted via email, hand 

delivery, or mail also will be posted to 

regulations.gov. If you do not want your 

personal contact information to be 

publicly viewable, do not include it in 

your comment or any accompanying 

documents. Instead, provide your 

contact information in a cover letter. 

Include your first and last names, email 

address, telephone number, and 

optional mailing address. The cover 

letter will not be publicly viewable as 

long as it does not include any 

comments 

Include contact information each time 

you submit comments, data, documents, 

and other information to DOE. If you 

submit via mail or hand delivery/

courier, please provide all items on a 

CD, if feasible. It is not necessary to 

submit printed copies. No facsimiles 

(faxes) will be accepted. 

Comments, data, and other 

information submitted to DOE 

electronically should be provided in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format. Provide documents that are not 

secured, that are written in English, and 

that are free of any defects or viruses. 

Documents should not contain special 

characters or any form of encryption 

and, if possible, they should carry the 

electronic signature of the author. 

Campaign form letters. Please submit 

campaign form letters by the originating 

organization in batches of between 50 to 

500 form letters per PDF or as one form 

letter with a list of supporters’ names 

compiled into one or more PDFs. This 

reduces comment processing and 

posting time. 

Confidential Business Information. 

According to 10 CFR 1004.11, any 

person submitting information that he 

or she believes to be confidential and 

exempt by law from public disclosure 

should submit via email, postal mail, or 

hand delivery/courier two well-marked 

copies: one copy of the document 

marked confidential including all the 

information believed to be confidential, 

and one copy of the document marked 

non-confidential with the information 

believed to be confidential deleted. 

Submit these documents via email or on 

a CD, if feasible. DOE will make its own 

determination about the confidential 

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12350 Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 

status of the information and treat it 

according to its determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

It is DOE’s policy that all comments 

may be included in the public docket, 

without change and as received, 

including any personal information 

provided in the comments (except 

information deemed to be exempt from 

public disclosure). 

E. Issues on Which DOE Seeks Comment 

Although DOE welcomes comments 

on any aspect of this proposal, DOE is 

particularly interested in receiving 

comments and views of interested 

parties concerning the following issues: 

1. Information on historical product 

shipments and market share efficiency 

data, disaggregated by product class, for 

2012 and 2013 as those data become 

available. 

2. Comments, information and data on 

characterizing the CCW usage for 

establishing energy consumption of 

CCW. Specifically, whether there are 

any data on on-premise laundry usage 

that could improve the usage 

characterization. 

3. Comments, information and data on 

the equipment lifetimes developed for 

multi-family and laundromat 

applications for both front-loading and 

top-loading CCW. DOE defines lifetime 

as the age at which CCW equipment is 

retired from service. DOE welcomes 

further input on the multi-family, 

commercial clothes washer lifetimes of 

11.25 years on average, a 15.5 year 

maximum, and a 7.0 year minimum. 

DOE also welcomes further input on the 

laundromat average lifetime assumption 

of 7.125 years on average, a 9.3 year 

maximum, and a 5.0 year minimum. In 

the technical support document, these 

equipment lifetime assumptions applied 

to the LCC and PBP are discussed 

further in Chapter 8.2.3 and the Weibull 

distributions used for the lifetimes are 

discussed in Appendix 8C. 

4. Comments, information and data on 

the base case efficiency distributions of 

CCW. Given that market share efficiency 

data for 2010–2011 were used to 

develop estimated base case efficiency 

distributions in the compliance year 

(2018), DOE seeks more historical 

market share efficiency data which 

would be useful for projecting the base 

case and standards case efficiency 

distributions for the analysis period. 

5. Comments, information, and data 

on the repair and maintenance costs for 

front-loading and top-loading CCW 

equipment classes. Whether repair costs 

for CCW equipment would increase at 

the efficiency levels indicated in today’s 

proposed rule due to any changes in the 

design and materials and components 

used in order to comply with the new 

efficiency standards. 

6. Impacts that the energy and water 

conservation standards may have on any 

lessening of the utility or performance 

of the covered products. These impacts 

may include increased cycle times to 

wash clothes, ability to achieve good 

wash performance (e.g., cleaning and 

rinsing), increased longevity of clothing, 

improved ergonomics of washer use, 

increased noise, and other potential 

impacts. 

7. The reasonableness of the values 

that DOE used to characterize the 

rebound effect with the more efficient 

CCW equipment. 

8. Whether there would be any 

anticipated changes in the consumption 

of complementary goods (e.g., laundry 

detergent, stain removers, fabric 

softeners) that may result from the 

proposed standards. 

9. On the assumptions applied in the 

engineering analysis in Chapter 5 of the 

technical support document, for toploading and front-loading product 

classes for the baseline efficiency levels 

and technology cost assessment. For the 

top-loading product class, DOE used the 

baseline level on the 1.60 MEF and the 

8.5 WF requirements specified by 

current Federal energy conservation 

standards, which became effective for 

commercial clothes washers 

manufactured on or after January 8, 

2013. For the front-loading product 

class, DOE established the baseline level 

based on the 2.00 MEF and 5.5 WF 

requirements specified by current 

Federal energy conservation standards. 

10. To estimate the impact on 

shipments of the price increase for the 

considered efficiency levels, DOE used 

a cross price elasticity approach to 

measure the change in the market share 

of top-loaders caused by a change in the 

price of front loaders. At the efficiency 

levels proposed in this rule, front-loader 

CCW equipment would increase their 

market share by 48 percent from the 

current 40 percent in the analysis 

period. DOE welcomes stakeholder 

input and estimates on the effect of 

amended standards on future CCW 

equipment shipments. DOE also 

welcomes input and data on the cross 

elasticity estimates used in the analysis. 

11. DOE requests comment on 

whether there are features or attributes 

of the more energy-efficient CCW 

equipment that manufacturers would 

produce to meet the standards in this 

proposed rule that might affect how 

they would be used by consumers. DOE 

requests comment specifically on how 

any such effects on CCW product 

features or attributes should be weighed 

in the choice of standards for the CCW 

final rule. 

12. For this rulemaking, DOE 

analyzed the effects of this proposal 

assuming that the CCW equipment 

would be available to purchase for 30 

years, and it undertook a sensitivity 

analysis using 9 years rather than 30 

years of product shipments. The choice 

of a 30-year period of shipments is 

consistent with the DOE analysis for 

other products and commercial 

equipment. The choice of a 9-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. We are seeking input, 

information and data on whether there 

are ways to refine the analytic timeline 

further. 

13. DOE solicits comment on the 

application of the new SCC values used 

to determine the social benefits of CO2 

emissions reductions over the 

rulemaking analysis period. The 

rulemaking analysis period covers from 

2018 to 2047 plus an additional 50 years 

to account for the lifetime operation of 

the equipment purchased in that period. 

In particular, the agency solicits 

comment on its derivation of SCC 

values after 2050, where the agency 

applied the average annual growth rate 

of the SCC estimates in 2040–2050 

associated with each of the four sets of 

values. 

14. The agency also seeks input on the 

cumulative regulatory burden that may 

be imposed on industry either from 

recently implemented rulemakings for 

these products or other rulemakings that 

affect the same industry. 

15. Whether DOE should incorporate 

the cost of risers or storage drawers (also 

referred to as pedestals) into the 

baseline installation costs for frontloading machines. 

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Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Proposed Rules 12351 

VIII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s proposed rule. 

List of Subjects in 10 CFR Part 431 

Administrative practice and 

procedure, Energy conservation, 

Household appliances, and Small 

businesses. 

Issued in Washington, DC, on February 21, 

2014. 

David T. Danielson, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

For the reasons set forth in the 

preamble, DOE proposes to amend part 

431 of chapter II, subchapter D, of title 

10 of the Code of Federal Regulations, 

to read as set forth below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for Part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Section 431.156 to Subpart I is 

amended by revising paragraph (b) and 

adding paragraph (c) as follows: 

§ 431.156 Energy and water conservation 

standards and their effective dates. 

* * * * * 

(b) Each commercial clothes washer 

manufactured on or after January 8, 

2013, and before January 1, 2015, shall 

have a modified energy factor no less 

than and a water factor no greater than: 

Equipment class 

Modified 

energy 

factor 

(MEF), 

cu. ft./ 

kWh/ 

cycle 

Water 

factor 

(WF), 

gal./cu. 

ft./cycle 

Top-Loading .................. 1.60 8.5 

Front-Loading ............... 2.00 5.5 

(c) Each commercial clothes washer 

manufactured on or after January 1, 

2015 shall have a modified energy factor 

no less than and an integrated water 

factor no greater than: 

Equipment class 

Modified 

energy 

factor 

(MEFJ2), 

cu. ft./ 

kWh/ 

cycle 

Integrated 

water 

factor 

(IWF), 

gal./cu. 

ft./cycle 

Top-Loading .................. 1.35 8.8 

Front-Loading ............... 2.00 4.1 

[FR Doc. 2014–04407 Filed 3–3–14; 8:45 am] 

BILLING CODE 6450–01–P 

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