## 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

# #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

# #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

# #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

# #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

# #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

# 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

# Other Issues

The Department seeks comments and recommendations from stakeholders on any other aspects related to the National Impacts Analysis. 

# #23.4

121

# #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

# 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

# #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

# #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

# 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

# #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

# #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 requestsfeedback on the criteria it should use for basing the selection of Trial Standard Levels.

128

# 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

# #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

# #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

# #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

# 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

# #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