[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Proposed Rules]
[Pages 15922-15930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-06809]



[[Page 15922]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2015-BT-STD-0003]
RIN 1904-AD49


Energy Conservation Program for Consumer Products: Energy 
Conservation Standards for Direct Heating Equipment and Pool Heaters

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Request for information (RFI).

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SUMMARY: The U.S. Department of Energy (DOE) is initiating a rulemaking 
to consider amended energy conservation standards for direct heating 
equipment and pool heaters. Once completed, this rulemaking will 
fulfill DOE's statutory obligation to either propose amended energy 
conservation standards for these products or to determine that the 
existing standards do not need to be amended. This RFI seeks to solicit 
information to help DOE determine whether national standards more 
stringent than those that are currently in place would result in a 
significant amount of additional energy savings and whether such 
amended national standards would be technologically feasible and 
economically justified. In overview, this document presents a brief 
description of the analysis DOE plans to perform for this rulemaking 
and requests comment on various issues relating to each of the analyses 
(e.g., market assessment, engineering analysis, energy use analysis, 
life-cycle cost and payback period analysis, national impact analysis, 
and manufacturer impact analysis). Although this document contains 
several specific topics on which the Department is particularly 
interested in receiving written comment, DOE welcomes suggestions and 
information from the public on any subject within the scope of this 
rulemaking, including topics not raised in this RFI.

DATES: Written comments and information are requested on or before 
April 27, 2015.

ADDRESSES: Interested parties are encouraged to submit comments 
electronically. However, interested persons may submit comments, 
identified by docket number EERE-2015-BT-STD-0003 and/or regulatory 
identification number (RIN) 1904-AD49 by any of the following methods:
    <bullet> Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for submitting comments.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#b1f5f9f483818084e2e5f581818182f1d4d49fd5ded49fd6dec7"><span class="__cf_email__" data-cfemail="febab6bbcccecfcbadaabacecececdbe9b9bd09a919bd0999188">[email protected]</span></a>. Include docket number 
EERE-2015-BT-STD-0003 and/or RIN 1904-AD49 in the subject line of the 
message. Submit electronic comments in WordPerfect, Microsoft Word, 
PDF, or ASCII file format, and avoid the use of special characters or 
any form of encryption.
    <bullet> Postal Mail: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Mailstop EE-2J, 1000 
Independence Avenue SW., Washington, DC 20585-0121. If possible, please 
submit all items on a compact disc (CD), in which case it is not 
necessary to include printed copies.
    <bullet> Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department 
of Energy, Building Technologies Program, 6th Floor, 950 L'Enfant Plaza 
SW., 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.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section III of this document 
(Public Participation).

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
may be sent to Ms. Ashley Armstrong, U.S. Department of Energy, Office 
of Energy Efficiency and Renewable Energy, Building Technologies 
Program, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-6590. Email: 
<a href="/cdn-cgi/l/email-protection#412528332422351e29242035282f261e24303428312c242f350124246f252e246f262e37"><span class="__cf_email__" data-cfemail="07636e75626473586f6266736e6960586276726e776a6269734762622963686229606871">[email protected]</span></a>.
    Mr. Sarah Butler, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-1777. Email: <a href="/cdn-cgi/l/email-protection#de8dbfacbfb6f09cabaab2bbac9eb6aff0bab1bbf0b9b1a8"><span class="__cf_email__" data-cfemail="e1b280938089cfa394958d8493a18990cf858e84cf868e97">[email protected]</span></a>.
    For information on how to submit or review public comments, contact 
Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, 
Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-2945. Email: <a href="/cdn-cgi/l/email-protection#82c0f0e7ece6e3acc7e6f5e3f0e6f1c2e7e7ace6ede7ace5edf4"><span class="__cf_email__" data-cfemail="baf8c8dfd4dedb94ffdecddbc8dec9fadfdf94ded5df94ddd5cc">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Background and Authority
    B. Rulemaking Process
II. Planned Rulemaking Analyses
    A. Test Procedures
    B. Market and Technology Assessment
    C. Technology Options for Consideration
    D. Engineering Analysis
    E. Markups Analysis
    F. Energy Use Analysis
    G. Life-Cycle Cost and Payback Period Analysis
    H. Shipment Analysis
    I. National Impact Analysis
    J. Manufacturer Impact Analysis
III. Public Participation

I. Introduction

A. Background and Authority

    Title III, Part B \1\ of the Energy Policy and Conservation Act of 
1975 (``EPCA'' or ``the Act''), Public Law 94-163 (codified at 42 
U.S.C. 6291-6309) sets forth a variety of provisions designed to 
improve energy efficiency and establishes the Energy Conservation 
Program for Consumer Products Other Than Automobiles.\2\ This program 
includes most major household appliances (collectively referred to as 
``covered products''), including the two covered products that are the 
subject of this rule: direct heating equipment (DHE) and pool heaters. 
(42 U.S.C. 6292(a)(9) and (11)) Under EPCA, this energy conservation 
program generally consists of four parts: (1) Testing; (2) labeling; 
(3) establishing Federal energy conservation standards; and (4) 
certification and enforcement procedures.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated as Part A.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law. 112-210 (Dec. 18, 2012).
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    EPCA prescribes specific energy conservation standards for the pool 
heaters and gas-fired direct heating equipment. (42 U.S.C. 6295(e)(2), 
(3)) EPCA also directed DOE to conduct two cycles of rulemakings to 
determine whether to amend its standards for direct heating equipment 
and pool heaters. (42 U.S.C. 6295(e)(4)) The statute further requires 
DOE to publish a notice of proposed rulemaking including new proposed 
standards or a notice of determination that the standards for a product 
need not be amended no later than 6 years after issuance of any final 
rule establishing or amending standards for that product. (42 U.S.C. 
6295(m)(1)) DOE last promulgated a final rule on April 16, 2010, 
amending its energy conservation standards for direct heating equipment 
and pool heaters, constituting the first of these two required 
rulemakings. 75 FR 20112. The current rulemaking satisfies the 
statutory requirements under EPCA to conduct a second round of review 
of the DHE and pool heater standards. (42 U.S.C. 6295(e)(4)(B)) 
Additionally, this

[[Page 15923]]

rulemaking will satisfy the requirement for DOE to publish a notice of 
proposed rulemaking containing proposed standards or a notice of 
determination that the standards for direct heating equipment and pool 
heaters do not need to be amended by April 16, 2016. (42 U.S.C. 
6295(m)(1)) If DOE were to publish a notice of proposed rulemaking 
containing proposed amendments to its standards for either direct 
heating equipment or pool heaters, DOE would be required to issue a 
final rule amending the standards no later than 2 years after issuance 
of the notice. (42 U.S.C. 6295(m)(3)(A))
    EPCA also provides criteria for prescribing amended standards for 
covered products generally, including direct heating equipment and pool 
heaters. As indicated above, any such amended 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)) Additionally, EPCA provides specific prohibitions on 
prescribing such standards. DOE may not prescribe an amended standard 
for any of its covered products for which it has not established a test 
procedure. (42 U.S.C. 6295(o)(3)(A)) Further, DOE may not prescribe a 
standard if DOE determines by rule that such standard would not result 
in ``significant conservation of energy,'' or ``is not technologically 
feasible or economically justified.'' (42 U.S.C. 6295(o)(3)(B)) EPCA 
also provides that in deciding whether a standard is economically 
justified for covered products, DOE must, after receiving comments on 
the proposed standard, determine whether the benefits of the standard 
exceed its burdens 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) through (VII))

    In addition, EPCA, as amended, establishes a rebuttable presumption 
that any standard for covered products 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. (42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA also contains what is commonly known as an ``anti-
backsliding'' provision. (42 U.S.C. 6295(o)(1)) This provision mandates 
that the Secretary not prescribe any amended standard that either 
increases the maximum allowable energy use or decreases the minimum 
required energy efficiency of a covered product. EPCA further provides 
that the Secretary may not prescribe an amended 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 product type (or class) with performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4)) 
Under 42 U.S.C. 6295(q)(1), EPCA specifies requirements applicable to 
promulgating standards for any type or class of covered product that 
has two or more subcategories. Under this provision, DOE must specify a 
different standard level than that which applies generally to such type 
or class of product that has the same function or intended use, if DOE 
determines that the 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'' than applies or 
will apply to the other products. (42 U.S.C. 6295(q)(1)) In determining 
whether a performance-related feature justifies such a different 
standard for a group of products, DOE must consider ``such factors as 
the utility to the consumer of such a feature'' and other factors the 
Secretary deems appropriate. Id. Any rule prescribing such a standard 
must include an explanation of the basis on which DOE established such 
higher or lower level. (42 U.S.C. 6295(q)(2))
    Section 310(3) of the Energy Independence and Security Act of 2007 
(EISA 2007; Pub. L. 110-140) amended EPCA to prospectively require that 
energy conservation standards address standby mode and off mode energy 
use. Specifically, when DOE adopts new or amended standards for a 
covered product after July 1, 2010, the final rule must, if justified 
by the criteria for adoption of standards in section 325(o) of EPCA, 
incorporate standby mode and off mode energy use into a single standard 
if feasible, or otherwise adopt a separate standard for such energy use 
for that product. (42 U.S.C. 6295(gg)(3)) On December 17, 2012 DOE 
promulgated a final rule amending its test procedures for vented direct 
heating equipment and pool heaters to incorporate standby and off-mode 
energy consumption (see section II.A below for further detail). 77 FR 
74559. The amendments related to standby and off-mode energy 
consumption were not required for purposes of compliance until the 
compliance date of the next standards final rule for those products. 
Id. This rulemaking, if amended standards are ultimately adopted, would 
serve as the next energy conservation standards rulemaking subsequent 
to these test procedure amendments, and therefore this rulemaking will 
take into account standby and off-mode energy consumption.
    Finally, Federal energy conservation requirements for covered 
products generally supersede State laws or regulations concerning 
energy conservation testing, labeling, and standards. (42 U.S.C. 
6297(a) through (c)) DOE can, however, grant waivers of Federal 
preemption for particular State laws or regulations, in accordance with 
the procedures and other provisions of section 327(d) of the Act. (42 
U.S.C. 6297(d))

B. Rulemaking Process

    In addition to the specific statutory criteria discussed in section 
I.A that DOE must follow for prescribing amended standards for covered 
products, DOE uses a specific process to assess the appropriateness of 
amending the standards that are currently in place for a given type of 
product. For direct heating equipment and pool heaters, DOE plans to 
conduct in-depth technical analyses of the costs and benefits of the 
potential amended standards to determine whether more stringent 
standards are technologically feasible and would lead to significant 
energy savings, and whether such

[[Page 15924]]

amended standards would be economically justified. The analyses would 
include the following: (1) Engineering; (2) energy use; (3) markups; 
(4) life-cycle cost and payback period; and (5) national impacts. DOE 
will also conduct downstream analyses including an analysis of: (1) 
Manufacturer impacts; (2) emission impacts; (3) utility impacts; (4) 
employment impacts; and (5) regulatory impacts. DOE will also conduct 
several other analyses that support those previously listed, including 
the market and technology assessment, the screening analysis (which 
contributes to the engineering analysis), and the shipments analysis 
(which contributes to the national impact analysis). As detailed 
throughout this RFI, DOE is publishing this notice as the first step in 
the analytical process and is requesting input and data from interested 
parties to aid in the development of the technical analyses.
    Subsequently, DOE may conduct a preliminary analysis for some or 
all products, particularly heat pump pool heaters since no prior 
rulemaking record for these products exists. Alternatively, DOE may 
elect to proceed directly to a NOPR (or determination that standards 
need not be amended) for some or all products.

II. Planned Rulemaking Analyses

    In this section, DOE summarizes the rulemaking analyses and 
identifies a number of issues on which it seeks input and data in order 
to aid in the development of the technical and economic analyses to 
determine whether amended energy conservation standards may be 
warranted for direct heating equipment and/or pool heaters. In 
addition, DOE welcomes comments on other issues relevant to the conduct 
of this rulemaking that may not specifically be identified in this RFI.

A. Test Procedures

    The test procedure for vented home heating equipment is located at 
10 CFR 430.23(o) and 10 CFR part 430, subpart B, appendix O (Appendix 
O) for vented home heating equipment (``vented heater''). The vented 
heater test procedure includes provisions for determining energy 
efficiency (annual fuel utilization efficiency (AFUE)), as well as 
annual energy consumption. DOE's test procedure for pool heaters is 
found at 10 CFR 430.23(p) and 10 CFR part 430, subpart B, appendix P 
(Appendix P). The test procedure includes provisions for determining 
two energy efficiency descriptors (i.e., thermal efficiency and 
integrated thermal efficiency), as well as annual energy consumption.
    EISA 2007 amended EPCA to require DOE to amend its test procedures 
for all covered products to include measurement of standby mode and off 
mode energy consumption. (42 U.S.C. 6295(gg)(2)(A)) DOE published a 
final rule adopting standby mode and off mode provisions for direct 
heating equipment and pool heaters in the Federal Register on December 
17, 2012 (hereafter referred to as the December 2012 test procedure 
final rule). 77 FR 74559. Additionally, DOE published a final rule 
regarding its DHE and pool heater test procedures on January 6, 2015 
adopting, among other things, provisions for testing vented home 
heaters that use condensing technology, updated industry standards 
incorporated by reference, and provisions for testing electric 
resistance and electric heat pump pool heaters, and which clarified the 
applicability of the test procedure to oil-fired pool heaters 
(hereafter referred to as the January 2015 test procedure final rule). 
80 FR 792. DOE will use the most current version of the test procedures 
as the basis for any amended energy conservation standards.
    For DHE, the December 2012 test procedure final rule included 
additional measurements and calculations in the test procedure to 
determine the annual electrical consumption in standby and off-mode 
separate from the AFUE metric. 77 FR 74559, 74571-74572. The standby 
and off-mode fossil fuel consumption for DHE was previously 
incorporated in the AFUE in the form of the pilot light usage and off-
cycle flue and stack losses. For gas-fired pool heaters, the December 
2012 test procedure final rule included measurements and calculations 
that incorporate electrical and fossil fuel consumption in standby and 
off-mode into an integrated thermal efficiency metric. Id. at 74572-
74573. The provisions for testing electric resistance and electric heat 
pump pool heaters added in the January 2015 test procedure final rule 
also integrate the standby and off-mode electrical consumption into an 
integrated thermal efficiency metric. 80 FR 792, 813-815.
    For both DHE and pool heaters, the December 2012 test procedure 
amendments were not required for testing in determining compliance with 
the current energy conservation standards until the next energy 
conservation standard final rule. 77 FR 74559. This rulemaking is the 
subsequent standards rulemaking to the December 2012 test procedure 
amendments; therefore, DOE plans to consider energy conservation 
standards as part of this rulemaking that incorporate standby and off-
mode energy use as measured by the amended test procedures.
    In the case of vented home heating equipment, while the pilot light 
and off-cycle flue and stack losses are integrated into the AFUE, the 
measurements and calculations for standby and off-mode electrical 
consumption are not. Should DOE consider standby and off-mode 
electrical consumption of vented home heating equipment separate 
analyses would be conducted in order to propose energy conservation 
standards for standby and off-mode electrical consumption. In order to 
make such a determination, DOE is seeking data, information, and 
comment on the electrical consumption of vented home heating equipment 
in standby and off-mode.
    Issue 1: DOE seeks data, information, and comment on the electrical 
consumption of all product classes of DHE in standby and off-mode.
    In the case of pool heaters, the amendments contained in the 
December 2012 test procedure final rule integrated the standby and off-
mode electrical consumption for gas-fired pool heaters into an 
integrated thermal efficiency metric. Likewise, the January 2015 test 
procedure final rule added provisions for determining the integrated 
thermal efficiency of electric resistance and electric heat pump pool 
heaters. Since the current pool heater rating metric (thermal 
efficiency) and energy conservation standards do not incorporate 
standby and off-mode energy consumption, DOE would need to develop a 
method to convert from the existing thermal efficiency ratings (which 
does not include standby and off mode energy consumption) to ratings 
under the new integrated thermal efficiency metric (which includes 
standby and off mode energy consumption). DOE plans to develop a method 
of converting ratings from those under the current metrics to those 
under the new metrics that include standby and off-mode energy 
consumption. To that end, DOE is requesting information regarding 
typical standby and off-mode fossil fuel and electricity consumption 
for DHE and pool heaters.
    Issue 2: DOE requests data and information regarding typical energy 
use (fossil fuel and electricity) in standby and off-modes for all pool 
heater types (i.e. gas-fired, electric resistance, and electric heat 
pump). DOE also requests data and information regarding the impacts on 
efficiency ratings of including the standby mode and off mode energy 
consumption in the

[[Page 15925]]

integrated thermal efficiency (pool heaters).

B. Market and Technology Assessment

    The market and technology assessment provides information about the 
direct heating equipment and pool heater industries that will be used 
throughout the rulemaking process. For example, this information will 
be used to determine whether the existing product class structure 
requires modification based on the statutory criteria for setting such 
classes and to explore the potential for technological improvements in 
the design of such products. The Department uses qualitative and 
quantitative information to assess the past and present industry 
structure and market characteristics. DOE will use existing market 
materials and literature from a variety of sources, including industry 
publications, trade journals, government agencies, and trade 
organizations. DOE will also consider conducting interviews with 
manufacturers to assess the overall market for both direct heating 
equipment and for pool heaters.
    The current product classes as established in the Code of Federal 
Regulations for direct heating equipment are characterized by product 
type (i.e., wall fan, wall gravity, floor furnace, and room heater), 
and size (i.e., input capacity rating). As a starting point, DOE plans 
to use the existing product class structure for products manufactured 
after April 16, 2013, which divides direct heating equipment into the 
equipment classes as shown in the table in 10 CFR 430.32(i) and 
summarized below in Table II.1.

        Table II.1--Product Classes for Direct Heating Equipment
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                              Product type
-------------------------------------------------------------------------
Gas wall fan type up to 42,000 Btu/h.
Gas wall fan type over 42,000 Btu/h.
Gas wall gravity type up to 27,000 Btu/h.
Gas wall gravity type over 27,000 Btu/h up to 46,000 Btu/h.
Gas wall gravity type over 46,000 Btu/h.
Gas floor up to 37,000 Btu/h.
Gas floor over 37,000 Btu/h.
Gas room up to 20,000 Btu/h.
Gas room over 20,000 Btu/h up to 27,000 Btu/h.
Gas room over 27,000 Btu/h up to 46,000 Btu/h.
Gas room over 46,000 Btu/h.
------------------------------------------------------------------------

    DOE's energy conservation standards for pool heaters currently 
regulate only one type of pool heater--gas-fired pool heaters. In 
analyzing standards for electric (including both resistance and heat 
pump), DOE will consider creating separate product classes for pool 
heaters based on fuel type, capacity, or other performance related 
features that may affect efficiency and justify the establishment of 
different energy conservation standards.
    Issue 3: DOE requests feedback on the current product classes for 
direct heating equipment and seeks information regarding other product 
classes it should consider for inclusion in its analysis.
    Issue 4: DOE seeks comment on whether product classes should be 
established for pool heaters and seeks information regarding product 
classes it should consider for inclusion in its analysis.
    Issue 5: DOE seeks data, information, and comment on electric 
resistance pool heaters, specifically on their capacities and 
applications. DOE also requests data, information, and comment on 
whether heat pump technology is a viable design for those applications 
in which electric resistance pool heaters are typically found.
    As discussed in section II.A, DOE published a final rule on January 
6, 2015 regarding its test procedures for DHE and pool heaters in which 
it was clarified that the test procedure applies to oil-fired pool 
heaters. 80 FR 792 However, in reviewing the pool heater market, DOE 
found only one model of oil-fired pool heater available. DOE therefore 
has tentatively determined that the energy savings potential for oil-
fired pool heaters is de minimis, and that accordingly energy 
conservation standards need not be proposed.
    Issue 6: DOE seeks comment on its tentative conclusion that energy 
conservation standards for oil-fired pool heaters would result in de 
minimis energy savings.

C. Technology Options for Consideration

    DOE uses information about existing and past technology options and 
prototype designs to help identify technologies that manufacturers 
could use to meet and/or exceed energy conservation standards. In 
consultation with interested parties, DOE intends to develop a list of 
technologies to consider in its analysis. Initially, this list will 
include all those technologies considered to be technologically 
feasible and will serve to establish the maximum technologically 
feasible design. For DHE, DOE will initially consider the specific 
technologies and design options listed below, along with any other 
technologies identified during the rulemaking analysis.

<bullet> Improved insulation \3\
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    \3\ This includes increasing jacket insulation, advanced 
insulation types, foam insulation, and pipe and fitting insulation. 
For DHE, this applies only to floor furnaces, since heat lost 
through the jacket does not enter the occupied space.
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<bullet> Power and direct venting
<bullet> Condensing heat exchanger technology
<bullet> Electronic ignition systems
<bullet> Improved controls \4\
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    \4\ This includes incorporating timer controls, modulating 
controls, and intelligent and wireless controls and communication.
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<bullet> Improved burners \5\
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    \5\ This includes incorporating variable firing-rate burners, 
low-stage firing burners, and modulating burners.
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<bullet> Flue or stack damper \6\
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    \6\ Thermal or electro-mechanical.
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<bullet> Improved heat exchanger design \7\
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    \7\ Including material and surface area.

    For gas-fired pool heaters, DOE will consider the specific 
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technologies and design options listed below.

<bullet> Improved insulation \3\
<bullet> Improved controls \4\
<bullet> Improved heat exchanger design \7\
<bullet> Condensing heat exchanger technology
<bullet> Electronic ignition systems

    For electric pool heaters, if included in the scope of this 
rulemaking, DOE would initially consider the specific technologies and 
design options listed below.

<bullet> Improved insulation \3\
<bullet> Improved controls \4\
<bullet> Heat pump (as opposed to electric resistance element) \8\
---------------------------------------------------------------------------

    \8\ Should electric pool heaters be considered one product 
class, heat pump technology may be considered a technology option 
for increasing the efficiency of electric pool heaters.
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<bullet> Increased evaporator surface area (heat pump pool heaters)
<bullet> Increased condenser surface area (heat pump pool heaters)
<bullet> Improved compressor efficiency (heat pump pool heaters)

    Issue 7: DOE seeks information related to these or other 
efficiency-improving technologies for DHE or pool heaters. 
Specifically, DOE is interested in comments regarding their costs, 
applicability to the current market, and how these technologies improve 
efficiency of DHE and pool heaters.

D. Engineering Analysis

    The engineering analysis estimates the cost-efficiency relationship 
of products at different levels of increased energy efficiency. This 
relationship serves as the basis for the cost-benefit calculations for 
consumers, manufacturers, and the nation. In determining the cost-
efficiency relationship, DOE will estimate the increase in manufacturer 
cost associated

[[Page 15926]]

with increasing the efficiency of products above the baseline up to the 
maximum technologically feasible (``max-tech'') efficiency level for 
each product class. The baseline model is used as a reference point for 
each product class in the engineering analysis and the life-cycle cost 
and payback-period analyses. DOE considers products that just meet the 
current minimum energy conservation standard as baseline products. For 
products that do not have an existing minimum energy conservation 
standard, DOE considers the least efficient products on the market as 
baseline equipment. DOE will establish a baseline for each DHE product 
class using the AFUE, and a separate baseline in terms of standby and 
off-mode electrical consumption since this is not integrated in the 
AFUE metric. For each gas-fired pool heater product class, DOE would 
use the thermal efficiency standards converted to integrated thermal 
efficiency in order to set a baseline. Energy conservation standards do 
not currently exist for electric resistance and electric heat pump pool 
heaters, and so DOE would select the least efficient products on the 
market for baseline models using the integrated thermal efficiency 
metric.
    Issue 8: DOE requests comment on approaches that it should consider 
when determining a baseline for product classes of DHE and pool 
heaters, including information regarding the merits and/or deficiencies 
of such approaches.
    Issue 9: DOE requests information on max-tech efficiency levels 
achievable in the current market and associated technologies for both 
DHE and pool heaters.
    In order to create the cost-efficiency relationship, DOE 
anticipates that it will structure its engineering analysis using both 
a reverse-engineering (or cost-assessment) approach and a catalog 
teardown approach. A cost-assessment approach relies on a teardown 
analysis of representative units at the baseline efficiency level and 
higher efficiency levels up to the maximum technologically feasible 
designs. A teardown analysis (or physical teardown) determines the 
production cost of a product by disassembling the product ``piece-by-
piece'' and estimating the material and labor cost of each component. A 
catalog teardown approach uses published manufacturer catalogs and 
supplementary component data to estimate the major physical differences 
between a piece of equipment that has been physically disassembled and 
another similar product. These two methods would be used together to 
help DOE estimate the manufacturer production cost of products at 
various efficiency levels.
    Issue 10: DOE requests feedback on the planned approach for the 
engineering analysis and on the appropriate representative capacities 
and characteristics for each DHE product class and for pool heaters of 
all types.

E. Markups Analysis

    To carry out the life-cycle cost (LCC) and payback period (PBP) 
calculations, DOE needs to determine the cost to the consumer of 
baseline products that satisfy the currently applicable standards, and 
the cost of the more efficient unit the customer would purchase under 
potential amended standards. This is done by applying a markup 
multiplier to the manufacturer's selling price to estimate the 
consumer's price.
    Markups depend on the distribution channels for a product (i.e., 
how the product passes from the manufacturer to the consumer). For both 
direct heating equipment and pool heaters, DOE characterized two 
distribution channels to describe how the equipment pass from the 
manufacturer to consumer: (1) replacement market, and (2) new 
construction market.
    In the replacement market for direct heating equipment, most sales 
go through wholesalers to mechanical contractors, and then to 
consumers. In new construction market, most sales go through wholesaler 
to mechanical contractors hired by the general contractors. Thus, DOE 
defined two distribution channels for the purposes of estimating 
markups for direct heating equipment, and the distribution channel for 
replacement market is characterized as follows:

Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr] 
Consumer

    In the case of new construction, DOE plans to characterize the 
distribution channel as follows:

Manufacturer [rarr] Wholesaler [rarr] Mechanical Contractor [rarr] 
General Contractor [rarr] Consumer

    To determine distribution channels for pool heaters, DOE used 
information from a consultant report.\9\ For the replacement market, 
most sales go through wholesalers to pool service companies. In most 
new construction market, the pool builder purchases the product from a 
wholesaler, and there is no contractor involved. Thus, DOE defined two 
distribution channels for the purposes of estimating markups for pool 
heaters.
---------------------------------------------------------------------------

    \9\ Hamos, R., Consultant Report--Pool Heater Distribution 
Channels, 2007.
---------------------------------------------------------------------------

    For replacement pool heaters, DOE plans to characterize the 
distribution channel as follows:

Manufacturer [rarr] Wholesaler [rarr] Service Company [rarr] Consumer

    For the new construction market, DOE plans to characterize the 
distribution channel for pool heaters as follows:

Manufacturer [rarr] Wholesaler [rarr] Pool Builder [rarr] Consumer

    Issue 11: DOE seeks input from stakeholders on whether the 
distribution channels described above are appropriate for direct 
heating equipment and pool heaters and are sufficient to describe the 
distribution markets.
    Issue 12: DOE seeks input on the percentage of products being 
distributed through the different distribution channels, and whether 
the share of products through each channel varies based on product 
class, capacity, or other feature.
    To develop markups for the parties involved in the distribution of 
direct heating equipment and pool heaters, DOE would utilize several 
sources including: (1) the Heating, Air-Conditioning & Refrigeration 
Distributors International (HARDI) 2013 Profit Report \10\ to develop 
wholesaler markups, (2) the 2005 Air Conditioning Contractors of 
America's (ACCA) financial analysis for the heating, ventilation, air-
conditioning, and refrigeration (HVACR) contracting industry \11\ and 
U.S. Census Bureau's 2007 Economic Census data for the plumbing and 
HVAC contractors industry \12\ to develop mechanical contractor 
markups, (3) RS Means Electrical Cost Data \13\ to develop pool service 
company markup, and (4) U.S. Census Bureau's 2007 Economic Census data 
for the residential building construction industry \14\ to develop

[[Page 15927]]

general contractor and pool builder markups.
---------------------------------------------------------------------------

    \10\ Heating, Air Conditioning & Refrigeration Distributors 
International 2013 Profit Report, <http://www.hardinet.org/Profit-Report>
    \11\ Air Conditioning Contractors of America (ACCA), Financial 
Analysis for the HVACR Contracting Industry: 2005, 2005. <https://www.acca.org/store/product.php?pid=142>
    \12\ U.S. Census Bureau, Data set for Sector 23, EC0723A1: 
238220 (Plumbing, Heating and Air-Conditioning Contractors), 
Construction: Geographic Area Series, Detailed Statistics for 
Establishments, 2007. <http://www.census.gov/econ/>
    \13\ RS Means Company Inc., Mechanical Cost Data--31st Annual 
Edition. 2013. ed. M. Mossman. Kingston, MA.
    \14\ U.S. Census Bureau, Construction: Industry Series: 
Preliminary Detailed Statistics for Establishments: 2007. New 
Single-Family General Contractors, New Multifamily Housing 
Construction (Except Operative Builders), New Housing Operative 
Builders Resi, 2007. <http://www.census.gov/econ/>
---------------------------------------------------------------------------

    In addition to the markups, DOE would derive State and local taxes 
from data provided by the Sales Tax Clearinghouse. \15\ These data 
represent weighted-average taxes that include county and city rates. 
DOE would derive shipment-weighted-average tax values for each region 
considered in the analysis.
---------------------------------------------------------------------------

    \15\ Sales Tax Clearinghouse Inc., State Sales Tax Rates Along 
with Combined Average City and County Rates, 2010. <http://thestc.com/STrates.stm>
---------------------------------------------------------------------------

    Issue 13: DOE seeks updated data, if available, and recommendations 
regarding data sources to establish the markups for the parties 
involved with the distribution of covered equipment.

F. Energy Use Analysis

    The purpose of the energy use analysis is to assess the energy 
requirements of direct heating equipment and pool heaters described in 
the engineering analysis for a representative sample of households that 
utilize the product, and to assess the energy-savings potential of 
increased product efficiencies. DOE uses the annual energy consumption 
and energy-savings potential in the LCC and PBP analysis to establish 
the operating costs savings at various product efficiency levels. DOE 
will estimate the annual energy consumption of direct heating equipment 
at specified energy efficiency levels across a range of applications, 
household types, and climate zones. The annual energy consumption 
includes use of natural gas, liquefied petroleum gas (LPG), and 
electricity.
    DOE intends to base the energy use analysis on household 
characteristics from the Energy Information Administration's (EIA) 2009 
Residential Energy Consumption Survey (RECS) \16\ for the households in 
RECS that use direct heating equipment and pool heaters covered by this 
standard. In addition, DOE may supplement the use of RECS with less 
detailed but more recent data sources, such as the American Housing 
Survey.
---------------------------------------------------------------------------

    \16\ Energy Information Administration (EIA). 2009 Residential 
Energy Consumption Survey (RECS). (Available at: http://www.eia.gov/consumption/residential/) (Last accessed April 10, 2013).
---------------------------------------------------------------------------

    The RECS survey data include information on the physical 
characteristics of homes, space heating equipment used, fuels used, 
energy consumption and expenditures, and other building 
characteristics. RECS data also reports energy consumption for pool 
heating in households that use them. Based on these data, DOE will 
develop a representative population of households for each direct 
heating equipment and pool heater class.
    Issue 14: DOE requests comment on the overall method to determine 
energy use of direct heating equipment and pool heaters and if other 
factors should be considered in developing the energy use or energy use 
methodology.
    Issue 15: DOE seeks input on the current distribution of product 
efficiencies in the market for different product types and classes.

G. 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 consumers of 
direct heating equipment and pool heaters by determining how a 
potential amended standard affects their operating expenses (usually 
decreased) and their total installed costs (usually increased).
    DOE intends to analyze the potential for variability by performing 
the LCC and PBP calculations on a representative sample of individual 
households. DOE plans to utilize the sample of households developed for 
the energy use analysis and the corresponding simulations results. 
Within a given household, one or more direct heating equipment units 
may serve the building's space heating needs, depending on the space 
heating requirements of the building. As a result, the Department 
intends to express the LCC and PBP results for each of the individual 
direct heating equipment units installed in the building. DOE plans to 
model variability in many of the inputs to the LCC and PBP analysis 
using Monte Carlo simulation and probability distributions. As a 
result, the LCC and PBP results will be displayed as distributions of 
impacts compared to the base case (without amended standards) 
conditions. DOE also intends to utilize the sample of households 
developed for energy use analysis of pool heaters. DOE plans to model 
variability in many of the inputs to the pool heater LCC and PBP 
analysis using Monte Carlo simulation and probability distributions.
    Issue 16: DOE requests comment on the overall method that it 
intends on using to conduct the LCC and PBP analysis for direct heating 
equipment and pool heaters.
    Inputs to the LCC and PBP analysis are categorized as: (1) inputs 
for establishing the purchase expense, otherwise known as the total 
installed cost, and (2) inputs for calculating the operating expense.
    The primary inputs for establishing the total installed cost are 
the baseline consumer price, standard-level consumer price increases, 
and installation costs. Baseline consumer prices and standard-level 
consumer price increases will be determined by applying markups to 
manufacturer selling price estimates. The installation cost is added to 
the consumer price to arrive at a total installed cost. DOE intends to 
develop installation costs using the most recent RS Means data 
available.
    Issue 17: DOE seeks input on the approach and data sources it 
intends to use to develop installation costs, specifically, its 
intention to use the most recent RS Means Mechanical Cost Data. \17\
---------------------------------------------------------------------------

    \17\ RS Means. 2014 Mechanical Cost Data. (Available at: http://rsmeans.reedconstructiondata.com/60023.aspx) (Last accessed April 
10, 2014).
---------------------------------------------------------------------------

    The primary inputs for calculating the operating costs are product 
energy consumption, product efficiency, energy prices and forecasts, 
maintenance and repair costs, product lifetime, and discount rates. 
Both product lifetime and discount rates are used to calculate the 
present value of future operating expenses.
    The product energy consumption is the site energy use associated 
with providing space heating to the room of a building (DHE) or water 
heating to a pool or spa (pool heaters). DOE intends to utilize the 
energy use calculation methodology described in Section II.F to 
establish product energy use.
    DOE will identify an approach to account for the gas, liquefied 
petroleum gas (LPG) and electricity prices paid by consumers for the 
purposes of calculating operating costs, savings, net present value, 
and payback period. DOE intends to consider determining gas, LPG, and 
electricity prices based on geographically available fuel cost data 
such as state level data, with consideration for the variation in 
energy costs paid by different building types. This approach calculates 
energy expenses based on actual energy prices that customers are paying 
in different geographical areas of the country. As a potential 
additional source, DOE may consider data to compare provided in EIA's 
Form 826 data \18\ to calculate commercial electricity prices, EIA's

[[Page 15928]]

Natural Gas Navigator \19\ to calculate commercial natural gas prices, 
and EIA's State Energy Data Systems (SEDS) \20\ to calculate liquefied 
petroleum gas (LPG) prices. Future energy prices will likely be 
projected using trends from EIA's most recently published Annual Energy 
Outlook (AEO). \21\
---------------------------------------------------------------------------

    \18\ Energy Information Administration (EIA), Survey form EIA-
826--Monthly Electric Utility Sales and Revenue Report with State 
Distributions--(Available at: http://www.eia.gov/electricity/data/eia826/index.html)
    \19\ Energy Information Administration (EIA), Natural Gas 
Navigator. (Available at: http://tonto.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm).
    \20\ Energy Information Administration (EIA), State Energy Data 
System (SEDS). (Available at: http://www.eia.gov/state/seds/).
    \21\ Energy Information Administration (EIA). Annual Energy 
Outlook (AEO) Full Version. (Available at: http://www.eia.gov/forecasts/aeo/).
---------------------------------------------------------------------------

    Issue 18: DOE seeks comment and sources on its approach for 
developing gas, LPG, and electricity prices.
    Maintenance costs are expenses associated with ensuring continued 
operation of the covered products over time. DOE intends to develop 
maintenance costs for its analysis using the most recent RS Means data 
available. \22\ DOE plans also to consider the cases when the equipment 
is covered by service and/or maintenance agreements.
---------------------------------------------------------------------------

    \22\ RS Means. 2013 Facilities Maintenance & Repair Cost Data. 
(Available at: http://rsmeans.reedconstructiondata.com/60303.aspx).
---------------------------------------------------------------------------

    Issue 19: DOE seeks input on the approach and data sources it 
intends to use to develop maintenance costs for DHE and pool heaters, 
specifically, its intention to use the most recent RS Means Facilities 
Maintenance & Repair Cost Data, as well as to consider the cost of 
service and/or maintenance agreements.
    Repair costs are expenses associated with repairing or replacing 
components of the covered products that have failed. DOE intends to 
assess whether repair costs vary with product efficiency as part of its 
analysis. Likewise, DOE intends to assess whether maintenance costs 
vary with product efficiency as part of its analysis.
    Issue 20: DOE seeks comment as to whether repair costs vary as a 
function of product efficiency for either DHE or pool heaters. DOE also 
requests any data or information on developing repair costs for these 
products.
    Product lifetime is the age at which a unit of covered equipment is 
retired from service. The average equipment lifetimes for DHE and gas-
fired pool heaters are estimated by various sources to be between 3 and 
20 years based on application and equipment type.\23\ Based on these 
data, DOE plans to determine the average lifetimes for each DHE and 
pool heater product class as the primary inputs for developing a 
Weibull probability distribution to characterize DHE and pool heater 
lifetimes.
---------------------------------------------------------------------------

    \23\ See S. Department of Energy-Office of Codes and Standards, 
Technical Support Document: Energy Efficiency Standards for Consumer 
Products: Room Air Conditioners, Water Heaters, Direct Heating 
Equipment, Mobile Home Furnaces, Kitchen Ranges and Ovens, Pool 
Heaters, Fluorescent Lamp Ballasts & Television Sets, 1993. 
Washington, DC Vol. 1 of 3. Report No. DOE/EE-0009. National 
Renewable Energy Laboratory (NREL). U.S. Department of Energy 
Commercial Reference Building Models of the National Building Stock. 
February 2011. Pg. 38. (Available at: http://www.nrel.gov/docs/fy11osti/46861.pdf); Empire Comfort System, Surround Yourself With 
Comfort, 2006. (Available at: http://dev.obatadesign.com/clients/Empire/faq/faq.asp); U.S. Department of Energy: Energy Efficiency 
and Renewable Energy, Gas Swimming Pool Heaters, 2005; Illinois 
Propane Gas Association, Swimming, 2006 (Available at: http://
www.ilpga.org/homebuilder_swimming.cfm); Pool Quest, Heating-
Frequently Asked Questions, 2005.) (Available at: http://www.poolquest.com/heaters.aspx). The Spa Specialist Inc., Spa 
Buyer's Questions and Answers, 2006. (Available at: http://www.spaspecialist.com/qa.html); and Hamos, R., Consultant Report--
Pool Heaters, 2009.
---------------------------------------------------------------------------

    Issue 21: DOE seeks comment on its approach of using a Weibull 
probability distribution to characterize product lifetimes. DOE also 
requests DHE and pool heater product lifetime data and information on 
whether product lifetime varies based on product characteristics, fuel 
type, product application, or efficiency level considerations.
    Issue 22: DOE seeks data, information, and comment on the product 
lifetimes of electric resistance and electric heat pump pool heaters.
    The discount rate is the rate at which future expenditures are 
discounted to establish their present value. DOE intends to derive the 
discount rates by estimating the finance cost to consumers direct 
heating equipment and pool heaters. For replacement purchasers, the 
estimated cost of financing of this equipment is estimated from a 
portfolio of consumer debts. For new construction purchases, financing 
costs are related to mortgage interest rates.
    DOE's analysis includes measures of LCC and PBP impacts of 
potential standard levels relative to a base case, which reflects the 
likely market in the absence of amended standards. DOE plans to develop 
market-share efficiency data (i.e., the distribution of product 
shipments by efficiency) for the product classes DOE is considering, 
for the year in which compliance with any amended standards would be 
required.
    DOE also plans to assess the applicability of the ``rebound 
effect'' in the energy consumption for DHE and for pool heaters. A 
rebound effect occurs when a product that is made more efficient is 
used more intensively, so that the expected energy savings from the 
efficiency improvement may not fully materialize. However, at this 
time, DOE is not aware of any information about the rebound effect for 
these product types.
    Issue 23: DOE requests data on current efficiency market shares (of 
shipments) by product class for DHE and pool heaters, and also input on 
similar historic data. DOE also requests comment on market segmentation 
based on capacity, application and fuel type, as well as trends in fuel 
switching.
    Issue 24: DOE also requests information on expected future trends 
in efficiency for DHE product classes and for all pool heater types, 
including the relative market share of condensing versus non-condensing 
products in the market in the absence of new efficiency standards.
    Issue 25: DOE seeks comments and data on any rebound effect that 
may be associated with more efficient DHE and pool heaters.

H. Shipment Analysis

    DOE uses shipment projections by product class to calculate the 
national impacts of standards on energy consumption, net present value 
(NPV) of customer benefits, and future manufacturer cash flows.
    DOE intends to develop a shipments models for DHE and gas-fired 
pool heaters based on historical shipments data obtained during the 
rulemaking process. DOE currently does not have any historical 
shipments information for electric resistance or electric heat pump 
pool heaters. DOE will also examine unit shipments and value of 
shipments for direct heating equipment, and pool heaters using publicly 
available data from the U.S. Census Bureau's Annual Survey of 
Manufacturers (ASM) and Current Industrial Reports (CIR), and the 
American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers (ASHRAE) and Air-Conditioning, Heating, and Refrigeration 
Institute (AHRI).
    Issue 26: DOE seeks historical shipments data for DHE and pool 
heaters, particularly for electric resistance and electric heat pump 
pool heaters.
    Issue 27: DOE seeks data, information, and comment on expected 
future trends for shipments of all product classes of DHE and all types 
of pool heaters, including the relative share of sales to new 
construction vs. existing households.
    DOE intends to utilize the U.S. Census Bureau data \24\ to 
establish

[[Page 15929]]

historical new construction floor space, as well as historical stock 
floor space. The Annual Energy Outlook will be used to forecast both 
new construction and stock floor space. Using these and historical 
equipment saturation data from RECS, DOE will estimate shipments to the 
three market segments identified above.
---------------------------------------------------------------------------

    \24\ U.S. Census Bureau. Statistical Abstract of the United 
States: 2011, Table No 933--Construction Contracts-Value of 
Construction and Floor Space of Buildings by Class of Construction. 
(Available at: https://www.census.gov/compendia/statab/2011/cats/construction_housing/construction_indices_and_value.html)
---------------------------------------------------------------------------

    Issue 28: DOE seeks input on the approach and data sources it 
intends to use in developing the shipments model and shipments 
forecasts for this analysis, including main drivers and trends toward 
consumer switching between fuel types.

I. National Impact Analysis

    The purpose of the national impact analysis (NIA) is to estimate 
aggregate impacts of potential energy conservation standards at the 
national level. Impacts that DOE reports include the national energy 
savings (NES) from potential standards and the net present value (NPV) 
of the total customer benefits.
    To develop the NES, DOE calculates annual energy consumption for 
the base case and the standards cases. DOE calculates the annual energy 
consumption using per-unit annual energy use data multiplied by 
projected shipments.
    To develop the NPV of customer benefits from potential energy 
conservation standards, DOE calculates annual energy expenditures and 
annual product expenditures for the base case and the standards cases. 
DOE calculates annual energy expenditures from annual energy 
consumption by incorporating projected energy prices. DOE calculates 
annual product expenditures by multiplying the price per unit times the 
projected shipments. The difference each year between energy bill 
savings, increased maintenance and repair costs, and increased product 
expenditures is the net savings or net costs.
    A key component of DOE's estimates of NES and NPV are the product 
energy efficiencies forecasted over time for the base case and for each 
of the standards cases. For the base case trend, DOE will consider 
whether historical data show any trend and whether any trend can be 
reasonably extrapolated beyond current efficiency levels. In 
particular, DOE is interested in historical and future shipments of 
products with step changes in efficiency, such as condensing gas-fired 
DHE or heat pump pool heaters.
    Issue 29: DOE requests comment and any available data on 
historical, current, and future market share of equipment with step 
changes in efficiency, such as gas-fired vented home heaters that use 
condensing technology and electric heat pump pool heaters, as compared 
to less efficient products, such as non-condensing gas-fired DHE and 
electric resistance pool heaters, respectively, for each product class.
    For the various standards cases, to estimate the impact that 
amended energy conservation standards may have in the year compliance 
becomes required, DOE would likely use a ``roll-up'' scenario. Under 
the ``roll-up'' scenario, DOE assumes: (1) Product efficiencies in the 
base case that do not meet the new or amended standard level under 
consideration would ``roll up'' to meet that standard level; and (2) 
product shipments at efficiencies above the standard level under 
consideration would not be affected. After DOE establishes the 
efficiency distribution for the assumed compliance date of a standard, 
it may consider future projected efficiency growth using available 
trend data.
    As described in section II.F, DOE intends to determine whether 
there is a rebound effect associated with more efficient DHE or pool 
heaters. If data indicate that there is a rebound effect, DOE will 
account for the rebound effect in its calculation of NES.
    DOE has historically presented NES in terms of primary energy 
savings. On August 18, 2011, DOE announced its intention to use full-
fuel-cycle (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 
51282. 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 NEMS. After evaluating both 
models and the approaches discussed in the August 18, 2011 notice, DOE 
determined NEMS is a more appropriate tool for this purpose. 77 FR 
49701 (Aug. 17, 2012). Therefore, DOE is using NEMS to conduct FFC 
analyses. The method used to derive the FFC multipliers will be 
described in the TSD.

J. Manufacturer Impact Analysis

    The purpose of the manufacturer impact analysis (MIA) is to 
estimate the financial impacts of potential energy conservation 
standards on manufacturers of direct heating equipment and pool 
heaters, and to evaluate the potential impact of such standards on 
direct employment and manufacturing capacity. The MIA includes both 
quantitative and qualitative aspects. The quantitative part of the MIA 
primarily relies on the Government Regulatory Impact Model (GRIM), an 
industry cash-flow model used to estimate a range of potential impacts 
on manufacturer profitability. The qualitative part of the MIA 
addresses a proposed standard's potential impacts on manufacturing 
capacity and industry competition, as well as factors such as product 
characteristics, impacts on particular subgroups of firms, and 
important market and product trends.
    As part of the MIA, DOE also analyzes impacts of potential energy 
conservation standards on small business manufacturers of covered 
products. DOE uses the Small Business Administration's (SBA) small 
business size standards to determine whether manufacturers qualify as 
small businesses. The size standards are listed by North American 
Industry Classification System (NAICS) code and industry description. 
\25\ Manufacturing of direct heating equipment and pool heaters is 
classified under NAICS 333414, ``Heating Equipment (except Warm Air 
Furnaces) Manufacturing.'' The SBA sets a threshold of 500 employees or 
fewer for an entity to be considered as a small business in this 
category. The 500-employee threshold includes all employees in a 
business's parent company and any other subsidiaries.
---------------------------------------------------------------------------

    \25\ Available at: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf
---------------------------------------------------------------------------

    DOE has initially identified four manufacturers of direct heating 
equipment and 16 manufacturers of pool heaters. The table below lists 
all identified manufacturers. Domestic small businesses are designated 
with an asterisk.

[[Page 15930]]



------------------------------------------------------------------------
  Direct heating equipment manufacturers      Pool heater manufacturers
------------------------------------------------------------------------
<bullet> Empire Comfort Systems*            <bullet> AquaCal Autopilot,
<bullet> Louisville Tin and Stove Co.*       Inc.*
<bullet> Rinnai                             <bullet> AquaComfort
<bullet> Williams Furnace Co.                Technologies.*
                                            <bullet> AquaPro Systems.*
                                            <bullet> Built Right Pool
                                             Heaters.*
                                            <bullet> Coates Heater
                                             Company, Inc.*
                                            <bullet> EcoSmart US, LLC.*
                                            <bullet> G&F Manufacturing.*
                                            <bullet> Hayward Industries,
                                             Inc.
                                            <bullet> Hydroquip, Inc.*
                                            <bullet> Lochinvar LLC.
                                            <bullet> Pentair.
                                            <bullet> Rheem.
                                            <bullet> Thermeau
                                             Industries, Inc.
                                             (Canadian).
                                            <bullet> Titan Systems
                                             (Canadian).
                                            <bullet> United States
                                             ThermoAmp, Inc.*
                                            <bullet> Zodiac Pool Systems
                                             Inc.
------------------------------------------------------------------------
* Domestic small businesses

    Issue 30: DOE requests comment on the completeness of the 
manufacturer list presented, including names of any additional 
manufacturers that may belong on this list.

III. Public Participation

    DOE will accept comments, data, and information regarding this RFI 
and other matters relevant to DOE's consideration of amended energy 
conservations standard for DHE and pool heaters no later than the date 
provided in the DATES section at the beginning of this RFI. Interested 
parties may submit comments using any of the methods described in the 
ADDRESSES section at the beginning of this RFI. After the close of the 
comment period, DOE will begin collecting data, conducting the 
analyses, and reviewing the public comments. These actions will be 
taken to aid in the development of a NOPR for energy conservation 
standards for DHE and pool heaters, should DOE decide to amend the 
standards for DHE and pool heaters.
    Instructions: All submissions received must include the agency name 
and docket number and/or RIN for this rulemaking. No telefacsimilies 
(faxes) will be accepted.
    Docket: The docket is available for review at www.regulations.gov, 
including Federal Register notices, public meeting attendees' lists and 
transcripts, comments, and other supporting documents/materials. All 
documents in the docket are listed in the www.regulations.gov index. 
However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2015-BT-STD-0003. This Web 
page contains a link to the docket for this notice on the 
www.regulations.gov Web site. The www.regulations.gov Web page contains 
simple instructions on how to access all documents, including public 
comments, in the docket.
    For 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: 
<a href="/cdn-cgi/l/email-protection#b8facaddd6dcd996fddccfd9cadccbf8dddd96dcd7dd96dfd7ce"><span class="__cf_email__" data-cfemail="8eccfcebe0eaefa0cbeaf9effceafdceebeba0eae1eba0e9e1f8">[email protected]</span></a>.
    DOE considers public participation to be a very important part of 
the process for developing test procedures. DOE actively encourages the 
participation and interaction of the public during the comment period 
in each stage of the rulemaking process. Interactions with and between 
members of the public provide a balanced discussion of the issues and 
assist DOE in the rulemaking process. Anyone who wishes to be added to 
the DOE mailing list to receive future notices and information about 
this rulemaking should contact Ms. Brenda Edwards at (202) 586-2945, or 
via email at <a href="/cdn-cgi/l/email-protection#0a48786f646e6b244f6e7d6b786e794a6f6f246e656f246d657c"><span class="__cf_email__" data-cfemail="2a68584f444e4b046f4e5d4b584e596a4f4f044e454f044d455c">[email protected]</span></a>.

    Issued in Washington, DC, on March 17, 2015.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2015-06809 Filed 3-25-15; 8:45 am]
 BILLING CODE 6450-01-P


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