Standards Case Shipments Results

22 rt Base Case

21 i -n- Std Level 1

20 ^ Std Level 2'^__

-0-Std Level 3

19 -^c- Std Level 4

Microwave Ovens

Dehumidifiers

#23.4

EE-2006-STD-0127 COMMENT 23.4
#23.4

Inputs

ational Impact Analysis

n Total Installed Cost

• Average per unit values as a function of efficiency level taken from LCC analysis

n Repair and Maintenance Costs

• No increase in repair and maintenance costs with efficiency

n Annual Energy Use

• Average per unit values as a function of efficiency level taken from LCC analysis

n Base-Case and Standards -Case Forecasted Efficiencies

• Base-Case efficiencies 2005-2012: Based on base case efficiency distributions from LCC analysis

• Standards-Case efficiencies 2012: Based on "Roll-up" scenario

• Forecasted efficiencies: Frozen at 2012 levels with the exception of base case efficiencies for gas

cooking products

n Energy and Water Prices

• Average prices taken from LCC analysis

• Future energy prices adjusted according to trend forecasted by the 2007 Annual Energy Outlook

• Future water prices forecasted on linear extrapolation of CPI national water price index from 1970-

2005

n Electricity Site-to -Source Conversion Factors

• Conversion factors based on marginal heat rates from NEMS corresponding to 2006 Annual Energy

Outlook

• Factors vary annually and account for generation, distribution, and transmission losses

n Discount Rate

• 7% and 3% real from OMB's Regulatory Analysis Guideline A-4

n Present Year

• Future expenses are discounted to the year 2007 115

EE-2006-STD-0127 COMMENT 23.4
#23.4

Base-Case and Standards-Case Forecasted Efficiencies

Example: Dishwashers

Market Shares

Standards Case

Level EF Base-Case 1 2 3 4 5 6 7

Baseline 0.46 5.0% - - - - - - -

1 0.58 53.0% 58.0% - - - - - -

2 0.62 31.0% 31.0% 89.0% - - - - -

3 0.65 8.0% 8.0% 8.0% 97.0% - - - -

4 0.68 2.5% 2.5% 2.5% 2.5% 99.5% - - -

5 0.72 0.2% 0.2% 0.2% 0.2% 0.2% 99.7% - -

6 0.80 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 99.9% -

7 1.11 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 100%

SWEF (EF) 0.596 0.602 0.625 0.652 0.681 0.721 0.800 1.110

Base-Case efficiency distribution from LCC and PBP analysis

• For the year 2005 and based on AHAM data submittal

• Assumed to remain frozen from 2005 to 2012

n Standards-Case efficiency distributions based on "Roll-up" scenario

• Efficiencies below the standard level "roll-up" to the standard level

• Efficiencies above the standard level are unaffected

n Forecasted efficiencies assumed to remain frozen at 2012 levels

• Maintains a constant efficiency gap between base case and standards case over forecast

period

116

EE-2006-STD-0127 COMMENT 23.4
#23.4

Base-Case and Standards-Case Forecasted Efficiencies (Issue #14)

n Because key inputs to the calculation of the NES and NPV are

dependent on the estimated efficiencies under the base case

(without standards) and the standards case (with standards),

forecasted efficiencies are of great importance to the analysis.

n DOE used a "roll-up" scenario to establish the shipment-weighted

efficiency for the year that standards are estimated to become

effective (i.e., 2012).

n DOE forecasted base-case and standards-case efficiencies,

believing they remained frozen throughout the analysis period (i.e.,

2012-2042).

DOE requests feedback on its methodologies for both forecasting

efficiencies and estimating the impact that standards have on

product efficiencies.

117

EE-2006-STD-0127 COMMENT 23.4
#23.4

Dehumidifier Total Installed Cost-Efficiency Relationships

Standards Case

Product Class Base Case 1 2 3 4 5

<25 00

SWEF (EF) 1.15 1.18 1 .24 1.27 1.30 1.38

.

Total Installed Cost (2006$) $149 $151 $152 $158 $166 $176

25 01 35 00

SWEF (EF) 1.29 1 .31 1.34 1.37 1.40 1.45

. - .

Total Installed Cost (2006$) $149 $151 $152 $158 $166 $176

35 01 45 00

SWEF (EF) 1.39 1 .41 1.44 1.47 1.50 1.74

. - .

Total Installed Cost (2006$) $180 $182 $190 $198 $208 $273

45 01 54 00

SWEF (EF) 1.49 1 .51 1.54 1.57 1.60 2.02

. - .

Total Installed Cost (2006$) $180 $182 $190 $198 $208 $273

54 01 74 99

SWEF (EF) 1.58 1 .59 1.61 1.65 1.70 1.80

. - .

Total Installed Cost (2006$) $198 $200 $202 $208 $224 $241

>75 00

SWEF (EF) 2.43 2.47 2.51 2.55 2.60 2.75

.

Total Installed Cost (2006$) $198 $200 $202 $208 $224 $241

n Base-Case efficiency distribution from LCC and PBP analysis

• For the year 2005 and based on AHAM data submittal

• Assumed to remain frozen from 2005 to 2012

n Standards-Case efficiency distributions based on "Roll-up" scenario

• Efficiencies below the standard level "roll-up" to the standard level

• Efficiencies above the standard level are unaffected

118

EE-2006-STD-0127 COMMENT 23.4
#23.4

Dehumidifier Cost and Efficiency Relationships (Issue #15)

n DOE applied the cost-efficiency data that were developed for three

product classes to the other three classes for which DOE was

unable to develop cost-efficiency relationships due to lack of data.

• Costs developed for the combined 0-35.00 pints/day class applied to the two

individual classes that comprise the combined class-25.00 pints/day and

less and 25.01-35.00 pints/day.

• Costs developed for the 35.01-45.00 pints/day and 54.01-74.99 pints/day

product classes applied to the 45.01-54.00 pints/day and 75.00 pints/day and

greater product classes, respectively.

• Cost data neither interpolated nor extrapolated to account for product

efficiency differences between the classes.

DOE requests feedback on its approach for characterizing the total

installed costs for those dehumidifier product classes in which it

was not able to develop cost-efficiency relationships.

119

EE-2006-STD-0127 COMMENT 23.4
Example Net Present Value Results

Dishwashers , Standard Level 3 - Annual Values

$0.35 ,

$0.30 d

$0.25 t

$0.20

$0.15 +

$0.10

$0.05 I

$0.00 IIIIIIIIIIIIIIIIIIIIIIIal

-$0.05

Operating Cost Savings

Equipment Cost

Net Savings

-$0.10

2Q12 2017 2022 2027 2032 2037 2042 2047 2052 2057 201 2

#23.4

120

EE-2006-STD-0127 COMMENT 23.4
Other Issues

The Department seeks comments and recommendations from

stakeholders on any other aspects related to the National Impacts

Analysis.

#23.4

121

EE-2006-STD-0127 COMMENT 23.4
#23.4

Energy Conservation Standards for

Residential Dishwashers , Dehumidifiers, Cooking Products and

Commercial Clothes Washers

ANOPR Public Meeting

NOPR Analyses and Next Steps

Building Technologies Program

Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy

December 13, 2007

EE-2006-STD-0127 COMMENT 23.4
NOPR Analyses Flow Diagram

O

Revise Trial

ANOPR Standard

Analyses Levels

Manufacturer Utility Employment

Impact Impact Impact

Analysis Analysis Analysis

Environmenta

Assessment

#23.4

Regulatory

Impact

Analysis

123

EE-2006-STD-0127 COMMENT 23.4
#23.4

Revise ANOPR Analyses

Engineering Analysis • Consider ANOPR comments

• Revise using latest data

Life-Cycle Cost and Payback • Consider ANOPR comments

Period Analyses

• Revise using latest data

• Conduct LCC Sub-Group Analysis

National Impact Analysis • Consider ANOPR comments

• Revise using latest data

124

EE-2006-STD-0127 COMMENT 23.4
#23.4

LCC Subgroup Analysis

n Purpose

• To evaluate the economic impacts of standards on consumer subgroups who may

be disproportionately impacted compared with the general user population

n Method

• Extend the LCC analysis to examine the impacts for defined subgroups

n Potential subgroups

• Dishwashers

- Low-Income

- Seniors

- Without city water and sewer (i.e.,

with well and septic systems)

• Dehumidifiers

- Low-income

- Seniors

• Cooking Products

- Low-Income

- Seniors

- Without electricity (gas cooking

products only)

• Commercial Clothes Washers

- Small Businesses

- Multi-Family buildings without city

water and sewer (i.e., with well

and septic systems)

125

EE-2006-STD-0127 COMMENT 23.4
NOPR Analyses Flow Diagram

0

Revise Trial

ANOPR (>> Standard

Analyses Levels

Manufacturer Utility Employment

Impact Impact Impact

Analysis Analysis Analysis

Environmenta

Assessment

#23.4

Regulatory

Impact

Analysis

126

EE-2006-STD-0127 COMMENT 23.4
#23.4

Selection of Trial Standard Levels

n Purpose

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

proposed standard level is selected

- Each trial standard level consists of a set of candidate standard levels covering all

product classes, and may vary between product classes

- NOPR analyses assess impacts for trial standard levels (not product classes)

n Method

• Trial standard levels are assembled from the product classes and candidate

standards identified in the ANOPR

- Candidate standard levels cover a range of efficiencies and can include:

n Most energy efficient level (max tech)

n Efficiency level with the lowest life-cycle cost

n Efficiency level with a payback period of three years or less

n Efficiency levels with noteworthy technologies

n Efficiency levels that fill in large gaps between candidate standard levels

- Each trial standard level consists of the candidate standard level from each

product class that meets one of the above criteria

127

EE-2006-STD-0127 COMMENT 23.4
#23.4

Trial Standard Levels (Issue #16)

n A critical part of the NOPR analysis on which DOE is seeking early

guidance and input.

n Trial standard levels are created from combinations of candidate

standard levels at a product class level.

n Based around a consistent theme , such as lowest life-cycle cost or

payback in 3-years or less.

DOE requests feedback on the criteria it should use for basing the

selection of Trial Standard Levels.

128

EE-2006-STD-0127 COMMENT 23.4
NOPR Analyses Flow Diagram

0

Revise

ANOPR

Analyses

Trial

Standard

Levels

Manufacturer % Utility

Impact Impact

Analysis ^ Analysis

Employment

Impact

Analysis

Environmenta

Assessment

#23.4

Regulatory

Impact

Analysis

129

EE-2006-STD-0127 COMMENT 23.4
#23.4

.x.

Manufacturer Impact Analysis

n Purpose

• To assess the impacts of standards on residential dishwasher, dehumidifier, and

cooking product and commercial clothes washer manufacturers

• To identify and estimate impacts on manufacturer sub-groups that may be more

severely impacted than the industry as a whole

• To examine the impact of cumulative regulatory burdens on the industry

n Method

• Analyze industry cash flow and net present value through use of the Government

Regulatory Impact Model (GRIM)

• Interview manufacturers to refine inputs to the GRIM, develop sub-group analyses,

and address qualitative issues

n Output

• Industry Net Present Value impacts

Sub-group Net Present Value impacts

• Other impacts

130

EE-2006-STD-0127 COMMENT 23.4
#23.4

Manufacturer Impact Analysis Process

n The MIA consists of three phases

- Phase 1 -

Industry

profile

Phase 2 Phase 3

Interviews Assess direct

Develop Develop & industry- employment, Finalize

straw-man interview wide / competition, MIA results

GRIM* guide subgroup cumulative for NOPR

analyses burden

* Government Regulatory Impact Model (GRIM)

131

EE-2006-STD-0127 COMMENT 23.4
#23.4

The MIA is both concurrent and coordinated with activities throughout

the rulemaking process.

Manufacturer Impact Analysis

"Strawman" GRIM

Phase 111

Manufacturer Interviews

Revised Industry Cash Flow

Manufacturer Subgroup Analysis

Qualitative Assessment

Other Rulemaking Analyses

Screening Analysis

Engineering Analysis

LCC Analysis

National Energy

Savings Analysis

Consumer Subgroup

Utility Impacts

Environmental Impacts

Indirect Employment

Impacts

132

EE-2006-STD-0127 COMMENT 23.4
Phase I: Industry Profile

arer 1

n Collect financial and market information

' Industry reports

• Company annual reports and websites

• Trade journals

• U.S. Census Bureau

• SEC 10-K form filings

• ANOPR information: manufacturer production costs, markups and

manufacturer selling prices, shipments

#23.4

133

EE-2006-STD-0127 COMMENT 23.4
#23.4

Phase II: Develop Straw -man GRIM

The Government Regulatory Impact Model (GRIM) is an industry

cash flow analysis that estimates the change in industry value

due to the introduction of new efficiency standards.

Manufacturer Prices

GRIM

Shipments

Manufacturing Costs

Financial Information

Cash Flow Impacts,

Changes in Industry NPV

134

EE-2006-STD-0127 COMMENT 23.4