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CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM INTERESTED 

PARTIES, AND DOE RESPONSES

TABLE OF CONTENTS 

2.1 INTRODUCTION ........................................................................................................... 2-1

2.2 MARKET AND TECHNOLOGY ASSESSMENT ........................................................ 2-5

2.2.1 Market Assessment .......................................................................................................... 2-5

2.2.1.1 Definition ....................................................................................................... 2-5

2.2.1.2 Product Classes and Scope of Coverage ........................................................ 2-5

2.2.1.3 Test Procedure ............................................................................................... 2-8

2.2.2 Technology Assessment ................................................................................................... 2-9

2.3 SCREENING ANALYSIS ............................................................................................ 2-10

2.4 ENGINEERING ANALYSIS ........................................................................................ 2-10

2.5 MARKUPS ANALYSIS ............................................................................................... 2-12

2.6 ENERGY USE ANALYSIS .......................................................................................... 2-13

2.6.1 Samples of Dehumidifier Users ..................................................................................... 2-13

2.6.2 Energy Use Determination for Portable Dehumidifiers ................................................. 2-14

2.6.3 Energy Use Determination for Whole-Home Dehumidifiers ........................................ 2-15

2.7 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS ................................... 2-16

2.7.1 Inputs to First Costs ....................................................................................................... 2-17

2.7.2 Inputs to Operating Cost ................................................................................................ 2-18

2.7.3 Other Inputs ................................................................................................................... 2-19

2.8 SHIPMENTS ANALYSIS............................................................................................. 2-19

2.9 NATIONAL IMPACT ANALYSIS .............................................................................. 2-20

2.9.1 National Energy Savings Analysis................................................................................. 2-21

2.9.2 Net Present Value Analysis ........................................................................................... 2-22

2.10 CONSUMER SUBGROUP ANALYSIS ...................................................................... 2-22

2.11 MANUFACTURER IMPACT ANALYSIS.................................................................. 2-23

2.11.1 Industry Cash-Flow Analysis ......................................................................................... 2-23

2.11.2 Manufacturer Subgroup Analysis .................................................................................. 2-23

2.11.3 Competitive Impacts Assessment .................................................................................. 2-23

2.11.4 Cumulative Regulatory Burden ..................................................................................... 2-24

2.11.5 Preliminary Results for the Manufacturer Impact Analysis .......................................... 2-24

2.12 EMISSIONS ANALYSIS .............................................................................................. 2-24

2.13 MONETIZATION OF EMISSIONS REDUCTION BENEFITS ................................. 2-26

2.14 UTILITY IMPACT ANALYSIS ................................................................................... 2-28

2.15 EMPLOYMENT IMPACT ANALYSIS ....................................................................... 2-29

2.16 REGULATORY IMPACT ANALYSIS ........................................................................ 2-29

2.17 REFERENCES .............................................................................................................. 2-29

LIST OF FIGURES 

Figure 2.1.1 Flow Diagram of Analyses for the Rulemaking Process ..................................... 2-2
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CHAPTER 2. ANALYTICAL FRAMEWORK 

2.1 INTRODUCTION 

 Section 6295(o)(2)(A) of the Energy Policy and Conservation Act (EPCA), Pub. L. 94-

163, 42 U.S.C. 6291 et seq. requires the U.S. Department of Energy (DOE) to set forth energy 

conservation standards that achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. This chapter describes the general analytical 

framework that DOE uses in developing such standards, and in particular, amended energy 

conservation standards for residential dehumidifiers. The analytical framework is a description of 

the methodology, the analytical tools, and the relationships among the various analyses that are 

part of this rulemaking. 

 

 Figure 2.1.1 summarizes the analytical components of the standards-setting process. The 

focus of this figure is the center column, identified as “Analyses.” The columns labeled “Key 

Inputs” and “Key Outputs” show how the analyses fit into the rulemaking process, and how the 

analyses relate to each other. Key inputs are the types of data and information that the analyses 

require. Some key inputs exist in public databases; DOE collects other inputs from interested 

parties or other knowledgeable experts within the field. Key outputs are analytical results that 

feed directly into the standards-setting process. Dotted lines connecting analyses show types of 

information that feed from one analysis to another. 
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Figure 2.1.1 Flow Diagram of Analyses for the Rulemaking Process 
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 The analyses performed as part of the preliminary analysis stage and reported in this 

preliminary technical support document (preliminary TSD) are listed below. 

 A market and technology assessment to characterize the relevant product markets and 

existing technology options, including prototype designs. 

 A screening analysis to review each technology option and determine if it is 

technologically feasible; is practical to manufacture, install, and service; would adversely 

affect product utility or product availability; or would have adverse impacts on health and 

safety. 

 An engineering analysis to develop cost-efficiency relationships that show the 

manufacturer’s cost of achieving increased efficiency. 

 A markups analysis to develop distribution channel markups that relate the manufacturer 

production cost to the cost to the consumer. 

 An energy use analysis to determine the annual energy use in the field of the considered 

products. 

 LCC and payback period (PBP) analyses to calculate, at the consumer level, the 

discounted savings in operating costs throughout the estimated average life of the covered 

products, compared to any increase in the installed cost for the products likely to result 

directly from imposition of the standard. 

 A shipments analysis to forecast product shipments, which then are used to calculate the 

national impacts of standards on energy, consumer net present value (NPV), and future 

manufacturer cash flows. 

 A national impact analysis (NIA) to assess the aggregate impacts at the national level of 

potential energy conservation standards for each of the considered products, as measured 

by the net present value (NPV) of total consumer economic impacts and the national 

energy savings (NES). 

 A preliminary manufacturer impact analysis to assess the potential impacts of energy 

conservation standards on manufacturers, such as impacts on capital conversion 

expenditures, marketing costs, shipments, and research and development costs. 

 

 The analyses DOE will perform in any subsequent notice of proposed rulemaking 

(NOPR) stage include those listed below. In addition, DOE will revise the analyses it performed 

in the preliminary analysis stage based on comments and new information received on topics 

including, but not limited, to those listed below. 

 An LCC subgroup analysis to evaluate variations in customer characteristics that might 

cause a standard to affect particular consumer sub-populations, such as low-income 

households, differently than the overall population. 

 A manufacturer impact analysis to estimate the financial impact of standards on 

manufacturers and to calculate impacts on competition, employment, and manufacturing 

capacity. 

 A utility impact analysis to estimate the effects of proposed standards on electric and gas 

utilities. 
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 An employment impact analysis to assess the aggregate impacts of amended energy 

conservation standards on national employment. 

 An environmental impact analysis to provide estimates of the effects of amended energy 

conservation standards on emissions of carbon dioxide (CO2), sulfur dioxide (SO2), 

nitrogen oxides (NOx), and mercury (Hg). 

 A regulatory impact analysis to present major alternatives to proposed amended energy 

conservation standards that could achieve substantially the same regulatory goal at a 

lower cost. 

 

 DOE developed this analytical framework and documented its initial findings in the 

Energy Conservation Standards Rulemaking Framework Document for Residential 

Dehumidifiers (the framework document). DOE announced the availability of the framework 

document in a Notice of Public Meeting and Availability of a Framework Document published in 

the Federal Register on August 17, 2012. 77 FR 49739. DOE presented the analytical approach 

to interested parties during a public meeting on September 24, 2012. The framework document is 

available at http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0027-0003. 

 In response to the publication of the framework document and the associated public 

meeting, DOE received comments from interested parties regarding its analytical approach. In 

the preliminary analysis, DOE: (1) summarizes the key comments received from interested 

parties and describes DOE’s responses to those comments; (2) summarizes any significant 

changes in the analytical approach made since publishing the framework document; and (3) 

explains in further detail each of the issues for which DOE seeks public comment in the 

executive summary. This preliminary TSD contains details of the preliminary analyses 

conducted for residential dehumidifiers. 
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2.2 MARKET AND TECHNOLOGY ASSESSMENT 

 The market and technology assessment characterizes the relevant product markets and 

existing technology options, including working prototype designs, for the considered products. 

2.2.1 Market Assessment 

 When DOE begins an energy conservation standards rulemaking, it develops information 

that provides an overall picture of the market for the products considered, including the nature of 

the products, the industry structure, and market characteristics for the products. This activity 

consists of both quantitative and qualitative efforts based primarily on publicly available 

information. The subjects addressed in the market assessment for residential dehumidifiers 

included manufacturers, trade associations, and the quantities and types of products sold and 

offered for sale. DOE examined both large and small and foreign and domestic residential 

dehumidifier manufacturers. DOE also examined publicly available data from the key trade 

association for this product category, the Association of Home Appliance Manufacturers 

(AHAM). DOE reviewed shipment data collected by AHAM and Appliance magazine to 

evaluate annual shipment trends. Finally, DOE reviewed other energy efficiency programs from 

utilities, individual States, and other organizations. Chapter 3 of the preliminary TSD provides 

additional details on the market and technology assessment. 

 DOE reviewed relevant literature and interviewed manufacturers to develop an overall 

picture of the residential dehumidifier industry in the United States. Industry publications and 

trade journals, government agencies, and trade organizations provided the bulk of the 

information, including (1) manufacturers and their market shares; (2) shipments by product type 

(i.e., portable versus whole-home); (3) detailed product information; and (4) industry trends. The 

analysis developed as part of the market and technology assessment is described in chapter 3 of 

the preliminary TSD. 

2.2.1.1 Definition 

EPCA defines “dehumidifier” as “a self-contained, electrically operated, and 

mechanically encased assembly consisting of - (A) a refrigerated surface (evaporator) that 

condenses moisture from the atmosphere; (B) a refrigerating system, including an electric motor; 

(C) an air-circulating fan; and (D) means for collecting or disposing of the condensate.” (42 

U.S.C. 6291(34)) DOE did not receive any comments on this definition in response to the 

framework document. 

2.2.1.2 Product Classes and Scope of Coverage 

 When evaluating and establishing energy conservation standards, DOE generally divides 

covered products into product classes by the type of energy used or by capacity or other 

performance-related features that affect efficiency. Different energy conservation standards may 

apply to different product classes. (42 U.S.C. 6295(q)) 

 In the framework document, DOE analyzed six product classes for residential 

dehumidifiers (for details on these product classes, see chapter 3 of this preliminary TSD). In 
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particular, DOE analyzed five product classes for portable dehumidifiers, based on the energy 

conservation standards that became effective on October 1, 2012. (10 CFR 430.32(v)(2)) DOE 

also considered an additional product class for whole-home dehumidifiers, which are designed to 

be installed in a ducted configuration, typically in conjunction with the home’s heating, 

ventilation, and air conditioning (HVAC) system. 

 AHAM supported DOE’s proposed product classes, and in particular maintaining the five 

portable dehumidifier product classes. According to AHAM, consolidating the product classes 

could eliminate smaller-capacity units from the market because it could become prohibitively 

costly for manufacturers to produce them, which would be in conflict with the requirements of 

42 U.S.C. 6295(o)(4). AHAM stated that larger-capacity units may be able to meet the needs of 

smaller spaces, but they are more expensive, and, thus consumers may not be able to purchase 

them and achieve the energy savings under the current proposal. AHAM noted that instead, 

many consumers may be forced to decide between a cost-effective smaller-capacity unit and an 

ENERGY STAR-rated product. Additionally, AHAM commented that the consolidated product 

classes in the ENERGY STAR dehumidifier specifications are biased towards larger-capacity 

units, and that the ENERGY STAR program could also push smaller-capacity units off the 

market. AHAM’s analysis indicated that the payback period for an incremental cost of a largercapacity ENERGY STAR dehumidifier would be over 7 years, as compared to the product’s 

average 10-year lifetime. (AHAM, No. 8 at pp. 1–3) 

The group of California investor-owned utilities (IOUs) comprising Pacific Gas and 

Electric Company, San Diego Gas and Electric Company, and Southern California Edison 

(hereafter referred to as “California IOUs”) jointly commented that DOE should consolidate 

dehumidifiers with capacities under 75 pints/day into a single product class, as the ENERGY 

STAR specifications currently do, because smaller-capacity units do not offer unique consumer 

utility. According to the California IOUs, both larger-capacity and smaller-capacity units can be 

used to dehumidify a room, but the smaller-capacity units are typically less energy efficient and 

remove moisture more slowly. The California Utilities stated that units rated at 70 pints/day are, 

on average, almost 50 percent more efficient than units rated at 25 pints/day. (California IOUs, 

No. 11 at p. 3) 

DOE evaluated the possibility of consolidating portable dehumidifiers with capacities 

less than 75 pints/day, according to the current test procedure, into a single product class, but 

determined during the engineering analysis that the ability to achieve a certain efficiency at a 

given capacity is primarily a function of the chassis size rather than being an inherent 

relationship between capacity and efficiency. Because each manufacturer has developed different 

sets of chassis sizes to span the range of capacities within its product offerings, the ability to 

achieve certain efficiency levels within each of the existing product classes is also different from 

manufacturer to manufacturer. By retaining multiple product classes, DOE is able to individually 

consider appropriate efficiency levels and potential standards in each class that will take into 

consideration its unique performance factors and costs. For that reason, DOE retains product 

class differentiation for portable dehumidifiers for this preliminary analysis. For further 

information on product classes, see chapter 5 of this preliminary TSD. 
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 The California IOUs supported DOE’s inclusion of a product class for whole-home 

dehumidifiers, and recommended that DOE acquire additional data on both the performance and 

market saturation of these units. (California IOUs, No. 11 at p. 4) Southern Company questioned 

whether whole-home dehumidifiers would be in the same product class as portable dehumidifiers 

with the same capacity. Southern Company also suggested that DOE consider covering not only 

whole-home dehumidifiers that function independently but those that are integrated with a 

central air conditioning system. According to Southern Company, such an integrated product 

could save energy in total than a slightly more efficient separate dehumidification system. 

(Southern Company, Public Meeting Transcript, No. 10 at pp. 48–49, 72–73) In consideration of 

these comments, DOE is maintaining the classification of whole-home dehumidifiers separate 

from portable dehumidifiers, including those units with similar capacities. Due to potential 

installation constraints for certain whole-home dehumidifier applications that impact the capacity 

and potential efficiency improvement, DOE is also considering two product classes within 

whole-home dehumidifiers based on case volume. For further discussion of product classes, see 

chapter 5 of this preliminary TSD. 

 AHAM requested clarification on how portable products that could be installed in a 

ducted configuration would be classified. It recommended that because every portable 

dehumidifier technically can be installed with a duct, DOE should clarify that “ducted 

installation” refers only to products for which the manufacturer provides instructions for ducted 

installation in its use and care guide. (AHAM, Public Meeting Transcript, No. 10 at p. 28; 

AHAM, No. 8 at pp. 3–4) Northwest Energy Efficiency Alliance (NEEA) also questioned how 

portable dehumidifiers with the capability for ducted installation would be classified, particularly 

because if the standards for whole-home dehumidifiers were lower than for portable 

dehumidifiers, a convertible portable unit could be allowed to be less efficient than other 

portable units. (NEEA, Public Meeting Transcript, No. 10 at pp. 46–47) DOE published a NOPR 

in the Federal Register on DATE proposing amendments to its dehumidifier test procedure 

(hereafter referred to as the “DATE Test Procedure NOPR”). In the DATE Test Procedure 

NOPR, DOE proposed that if a given model meets both the proposed definition of a portable 

dehumidifier and a whole-home dehumidifier, with conversion achieved by means of optional 

ducting kits, the product must be tested as both product categories, must meet both applicable 

standards, and must be certified as meeting both standards, if DOE ultimately establishes 

standards for whole home units. [CITE] 

 Southern Company questioned whether desiccant dehumidifiers would be considered 

covered products for the purposes of energy conservation standards and test procedures. 

(Southern Company, Public Meeting Transcript, No. 10 at p. 45) Dehumidifiers that remove 

moisture solely by means of adsorption via a desiccant do not meet the statutory definition 

provided by EPCA in 42 U.S.C. 6291(34), because they do not contain a refrigeration system. 

Therefore, such products would not be covered by the energy conservation standards and test 

procedures that are the subject of DOE’s current rulemakings. DOE is, however, considering 

dehumidifiers that contain desiccant wheels in addition to refrigeration systems for moisture 

removal. The DATE Test Procedure NOPR and chapter 5 of the preliminary TSD contain further 

information on these “refrigerant-desiccant” dehumidifiers. 
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 Appliance Standards Awareness Project, American Council for an Energy-Efficient 

Economy, Consumers Union, Natural Resources Defense Council, and NEEA (hereafter referred 

to as “Joint Commenters”), urged DOE to work with ENERGY STAR to develop a label for 

dehumidifiers that would provide information to consumers about the appropriate relative 

humidity settings to achieve additional energy savings, including the potential consequences of 

selecting higher or lower settings. (Joint Commenters, No. 9 at pp. 2, 10) The U.S. 

Environmental Protection Agency (EPA) administers the labeling portion of the ENERGY 

STAR program, and therefore would determine the labeling requirements for ENERGY STARqualified dehumidifiers. 

2.2.1.3 Test Procedure 

 The market assessment also provides information on DOE’s current test procedure for 

measuring the moisture removal capacity and energy efficiency of residential dehumidifiers. In 

response to the framework document, DOE received multiple comments regarding this test 

procedure, with topics including (1) whole-home dehumidifier testing; (2) representative ambient 

conditions; and (3) fan-only mode. These topics are addressed in the DATE Test Procedure 

NOPR, which details these comments, provides responses, and presents DOE’s proposed 

amendments. CITE.

 In addition, DOE received a comment from the California IOUs regarding the energy 

efficiency metric that DOE intends to use in its analysis for energy conservation standards. The 

California IOUs opposed a metric integrating active mode and standby mode energy use, stating 

that separate energy conservation standards for active mode and standby mode would encourage 

manufacturers to reduce energy use in each of these modes. The California IOUs further stated 

that the effectiveness of efficiency improvements to specific operating modes could be obscured 

if the energy uses from all operating modes are combined into a single metric. They 

recommended that DOE collect more information on each mode separately to better understand 

the effectiveness of different approaches that can be applied to reduce energy use in different 

operating modes, which would help DOE set a standard that maximizes energy savings and cost 

effectiveness. (California IOUs, No. 11 at p. 4) 

EPCA, in relevant part, requires DOE to integrate measures of standby mode and off 

mode energy consumption into the overall energy efficiency, energy consumption, or other 

energy descriptor for each covered product, including dehumidifiers, unless the Secretary 

determines that— 

 (i) the current test procedures for a covered product already fully account for and 

incorporate the standby mode and off mode energy consumption of the covered product; or 

 (ii) such an integrated test procedure is technically infeasible for a particular covered 

product, in which case the Secretary shall prescribe a separate standby mode and off mode 

energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 

6295(gg)(2)(A)) 

 In a final rule published in the Federal Register on October 31, 2012, DOE determined 

that it is technically feasible to incorporate measures of standby mode and off mode energy 
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consumption into the efficiency metric for dehumidifiers, and thus established a new efficiency 

metric, integrated energy factor. 77 FR 65942. EPCA, as amended by EISA 2007, also requires 

that any final rule establishing or revising a standard for a covered product, adopted after July 1, 

2010, shall incorporate standby mode and off mode energy use into a single amended or new 

standard, if feasible. (42 U.S.C. 6295(gg)(3)(A)) Therefore, the potential standard levels 

considered in this preliminary analysis are evaluated based on integrated energy factor. 

2.2.2 Technology Assessment 

 DOE typically uses information relating to existing and past technology options and 

working prototype designs as inputs to determine what technologies manufacturers use to attain 

higher performance levels. In consultation with interested parties, DOE develops a list of 

technologies for consideration. Initially, these technologies encompass all those it believes are 

technologically feasible. 

 DOE developed its list of technologically feasible design options for residential 

dehumidifiers through consultation with manufacturers of components and systems, and from 

trade publications and technical papers. Since many options for improving product efficiency are 

available in existing units, product literature and direct examination provided additional 

information. 

Chapter 3 of the preliminary TSD includes the detailed list of all technology options 

identified for residential dehumidifiers. The Joint Commenters supported the evaluation of heat 

pipes as a technology option. In addition, the Joint Commenters, as well as Appliance Standards 

Awareness Project (ASAP) individually, recommended that DOE include as a technology option 

air-to-air heat exchangers for precooling the inlet air using the evaporator discharge air. (ASAP, 

Public Meeting Transcript, No. 10 at p. 32; Joint Commenters, No. 9 at pp. 2, 8) AHAM 

requested that DOE provide additional information on the heat pipe technology option, including 

product literature, research, and any test procedure revisions necessary to capture the energy 

efficiency benefits. (AHAM, Public Meeting Transcript, No. 10 at pp. 31–32, 43–44) DOE has 

evaluated both air-to-air heat exchangers and heat pipes as technology options in this preliminary 

analysis. For more information, see chapter 3 and chapter 5 of this preliminary TSD. 

ASAP asked whether the potential benefits of a built-in humidistat could be captured by 

the current test procedure, and encouraged DOE to consider it as a technology option. (ASAP, 

Public Meeting Transcript, No. 10 at pp. 35–36) The Joint Commenters recommended including 

desiccant wheels that increase the moisture removal capacity of refrigeration-based whole-home 

dehumidifiers as a technology option. In such systems, the desiccant wheel removes moisture 

downstream of the evaporator coil, and heat from the condenser coil is used to dry the wheel 

with the moist air subsequently discharged outdoors. (Joint Commenters, No. 9 at p. 8) 

Underwriters Laboratories (UL) asked whether any of the technology options included in the 

framework document were highly susceptible to molding. (UL, Public Meeting Transcript, No. 

10 at pp. 37–38) DOE did not consider built-in humidistats as a technology option in this 

rulemaking because DOE observed all dehumidifiers that it could identify on the market as 

having this feature, and therefore the feature is included in the baseline models. DOE did 
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consider refrigerant-desiccant dehumidifiers in this preliminary analysis, but DOE did not find 

any efficiency improvement associated with this technology under representative ambient 

conditions. Chapters 3 and 5 of the preliminary TSD contain additional information about 

refrigerant-desiccant dehumidifiers. In addition, DOE did not find information that would 

indicate that any of the considered design options were more susceptible to mold formation than 

the others. 

2.3 SCREENING ANALYSIS 

 The screening analysis examines various technologies as to whether they: (1) are 

technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an 

adverse impact on product utility or availability; and (4) have adverse impacts on health and 

safety. DOE developed an initial list of efficiency-enhancement options from the technologies 

identified as technologically feasible in the technology assessment. Then DOE, in consultation 

with interested parties, reviewed the list to determine if these options are practicable to 

manufacture, install, and service, would adversely affect product utility or availability, or would 

have adverse impacts on health and safety. In the engineering analysis, DOE further considered

efficiency enhancement options that it did not screen out in the screening analysis. Chapter 4 of 

the preliminary TSD contains details on the screening analysis for residential dehumidifiers. 

2.4 ENGINEERING ANALYSIS 

 The engineering analysis (chapter 5 of the preliminary TSD) establishes the relationship 

between the manufacturing production cost (MPC) and the efficiency for each class of residential 

dehumidifiers. The purpose of the analysis is to estimate the incremental MPCs for a product that 

would result from increasing efficiency levels above the level of the baseline model in each 

product class. This relationship serves as the basis for cost/benefit calculations in terms of 

individual consumers, manufacturers, and the nation. Chapter 5 discusses the product classes 

DOE analyzed, the representative baseline units, the incremental efficiency levels, the 

methodology DOE used to develop the manufacturing production costs, the cost-efficiency 

curves, and the impact of efficiency improvements on the considered products. 

 The engineering analysis considered technologies not eliminated in the screening 

analysis, designated design options, although certain technologies were not analyzed for the 

reasons set forth in chapter 5 of the preliminary TSD. DOE considered the analyzed design 

options in developing the cost-efficiency curves. 

 DOE typically structures its engineering analysis around one of three methodologies: (1) 

the design-option approach, which calculates the incremental costs of adding specific design 

options to a baseline model; (2) the efficiency-level approach, which calculates the relative costs 

of achieving increases in energy efficiency levels without regard to the particular design options 

used to achieve such increases; and/or (3) the reverse-engineering or cost-assessment approach, 
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which involves a “bottom-up” manufacturing cost assessment based on a detailed bill of 

materials derived from tear-downs of the product being analyzed. 

 DOE used a hybrid approach combining aspects of all three methods in its engineering 

analysis. The efficiency-level approach for residential dehumidifiers, combined with the costassessment approach, allowed DOE to develop a cost for each product analyzed. DOE estimated 

that the costs for these products reflected the costs for typical units at their respective efficiency 

levels. This approach involved physically disassembling commercially available products, 

consulting with outside experts, reviewing publicly available cost and performance information, 

and modeling equipment cost. To ensure that DOE’s analysis covered the entire range of 

capacities and efficiencies available on the market, DOE relied on the design-option approach to 

determine what changes would be needed for a particular unit to meet a certain efficiency level. 

 The efficiency levels that DOE considered in the engineering analysis are attainable using 

technologies currently available on the market in residential dehumidifiers. DOE associated 

efficiency gains with certain design options that were retained through the screening analysis in 

chapter 4 of this preliminary TSD. DOE also provided further discussion for design options that 

met the screening criteria, but did not factor into the cost-efficiency relationship. Chapter 5 of 

this preliminary TSD describes the methodology and results of the efficiency level analysis used 

to derive the cost-efficiency relationships. 

 The California IOUs and Joint Commenters urged DOE to consider an equation-based 

approach for defining energy conservation standards as a function of dehumidifier capacity. The 

Joint Commenters observed that currently available models exhibit a relatively linear 

relationship between capacity and energy factor, although the highest efficiency 30 pints/day 

model has the same energy factor as the highest efficiency 70 pints/day unit. The Joint 

Commenters noted that an equation-based approach to dehumidifier standards would be similar 

to the standards for refrigerators and water heaters, where maximum energy use and energy 

factor are functions of adjusted volume and rated storage volume, respectively. (California IOUs, 

No. 11 at p. 3; Joint Commenters, No. 9 at pp. 2, 7) 

 As discussed in section 2.2.1.2, DOE has determined that it would maintain separate 

product classes for this preliminary analysis because of the varying ability to achieve certain 

efficiency levels due to the chassis sizes used by different manufacturers. DOE tentatively 

concludes that there is not an inherent relationship between capacity and efficiency that would 

warrant defining dehumidifier energy conservation standards as an equation relating these two 

parameters. Therefore, in the engineering analysis, DOE identified efficiency levels for each 

product class on the basis of available products and design options, and did not use an equationbased approach for setting the efficiency levels. 

 AHAM agreed with the maximum available efficiency level for the 35.01 to 45.00 

pints/day portable dehumidifier product class and with the gap fill level for the 45.01–54.00 

pints/day portable dehumidifier product class. According to AHAM, the ENERGY STAR 

criterion of 1.85 liters (L)/kilowatt-hour (kWh) is not appropriate as an efficiency level for those 

capacities. (AHAM, No. 8 at p. 3) The Joint Commenters noted, however, that there are models 
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in the DOE compliance certification database with efficiencies that exceed 1.85 L/kWh, as well 

as models in the ENERGY STAR dehumidifier product list with capacities ranging from 30 to 

70 pints/day which have a certified energy factor of 1.85 L/kWh. The Joint Commenters further 

noted that the energy factors and relative rankings of models could change significantly if DOE 

amends its test procedure to better reflect field performance. (Joint Commenters, No. 9 at pp. 8–

9) ASAP suggested analyzing one or two additional efficiency levels for whole-home 

dehumidifiers due to the large gap between the proposed levels. (ASAP, Public Meeting 

Transcript, No. 10 at p. 55) 

 Because there are products in all product classes that meet the ENERGY STAR 

qualification level, DOE maintained that efficiency level in the 35.01–45.00 pints/day and 

45.01–54.00 pints/day product classes. As the Joint Commenters noted, however, both the 

capacities and EFs associated with the analyzed efficiency levels were adjusted to account for 

DOE’s proposed test procedure changes. For further information, see chapter 5 of the 

preliminary TSD. DOE also maintained the efficiency levels for larger whole-home 

dehumidifiers as proposed in the framework document. In the engineering analysis, DOE 

observed that these efficiency levels represent the range of product technologies and efficiencies 

available on the market. However, DOE separated the whole-home product classes into two 

categories based on product case size, and the efficiency levels for the smaller whole-home 

product class were different from those proposed in the framework document. Chapter 5 of this 

preliminary TSD contains further discussion of the whole-home product classes and efficiency 

levels. 

2.5 Markups Analysis 

DOE uses manufacturer-to-customer markups to convert the manufacturer selling price 

estimates from the engineering analysis to customer prices, which are then used in the LCC and 

PBP analysis and in the manufacturer impact analysis. Retail prices are necessary for the 

baseline efficiency level and all other efficiency levels under consideration. 

Before developing markups, DOE defines key market participants and identifies 

distribution channels. Generally, the portable dehumidifier distribution chain includes three 

parties: (1) the manufacturers producing the products; (2) the retailers purchasing the products 

from manufacturers and selling them to consumers; and (3) the consumers who purchase the 

products. For the markups analysis, DOE used two types of distribution channels to describe how 

most dehumidifiers pass from the manufacturer to the consumer; (1) replacement market and (2) 

new first time owners. These distribution channels are explained in detail in chapter 6 of this 

preliminary TSD. 

Because whole-home dehumidifiers are usually installed as part of the residential cooling 

and heating system, DOE assumes that they should follow the same distribution channel as 

central air-conditioners or forced air heating equipment. There are two primary types of markets 

describing the way most whole-home dehumidifiers pass from the manufacturer to the consumer: 

one applying to installation in replacement markets or by new owners and the other applying to 
2-13

installation in new construction. In the replacement distribution channel, (1) the manufacturer 

generally sells the equipment to (2) a wholesaler, who in turn sells it to (3) a mechanical 

contractor, who in turn sells it to (4) the consumer. The new construction distribution channel 

includes an additional link in the chain—the general contractor: (1) manufacturer (2) wholesaler, 

(3) mechanical contractor, (4) general contractor, and (5) consumer. 

After defining the participants and channels, DOE develops baseline and incremental 

markups to transform the manufacturer selling price into a consumer product price. DOE uses 

the baseline markups, which cover all of a manufacturer’s costs, to determine the sales price of 

baseline models. Incremental markups are coefficients that DOE applies to the incremental cost 

of higher-efficiency models. Because companies mark up the price at each point in the 

distribution channel, both baseline and incremental markups are dependent on the particular 

distribution channel. 

DOE requested comment on the approach to developing estimates of future residential 

dehumidifier retail prices used in the framework document; however, no comments were 

received on the methodology. Therefore, DOE used the same markups methodology for this 

preliminary analysis. 

2.6 Energy Use Analysis 

DOE establishes the annual energy consumption of a product and assesses the energysavings potential of various product efficiencies. As part of the energy use analysis, certain 

engineering assumptions may be required regarding product application, including how often the 

product is operated and under what conditions. DOE uses the annual energy consumption and 

energy-savings potential in the LCC and PBP analyses to establish the savings in consumer 

operating costs at various product efficiency levels. 

2.6.1 Samples of Dehumidifier Users 

DOE used the Energy Information Administration’s (EIA) 2009 Residential Energy 

Consumption Survey (RECS 2009) to establish a sample of households using dehumidifiers for 

each dehumidifier product class.1The RECS data provides information on dehumidifier 

ownership and frequency of dehumidifier use by monthly range in each household. The survey 

also includes household information such as the physical characteristics of housing units, 

household demographics, information about cooling products, and other relevant data. DOE used 

the household samples not only to determine dehumidifier annual energy consumption, but also 

as the basis for conducting the LCC and PBP analysis. 

In the framework document, DOE sought stakeholder input on data sources that it can use 

to characterize the variability in annual energy consumption for dehumidifiers. Underwriters 

Laboratories asked what characterized a household in the DOE analyses. (Underwriters 

Laboratories, Public Meeting Transcript, No. 10 at p. 73) DOE used the RECS 2009 data sample 

to characterize the variability in dehumidifier energy consumption. RECS has 1609 housing 
2-14

records that indicate dehumidifier ownership and defines household as “[a] family, an individual, 

or a group of up to nine unrelated persons, occupying the same housing unit.a” 

For the preliminary analysis, DOE seeks stakeholder input on data sources that can be 

used to characterize commercial use of residential dehumidifiers. 

2.6.2 Energy Use Determination for Portable Dehumidifiers 

Portable dehumidifiers are used primarily in basement locations, and their energy use is 

dependent on at least two conditions: (1) the finished state of the basement and (2) whether the 

dehumidifier has a condensate collecting bucket that requires emptying or is equipped with a 

hose that drains liquid directly as moisture is dripped off the condensing coils. To estimate the 

annual energy consumption of portable dehumidifiers for both conditions, DOE began by 

assigning each RECS household to one of the 151 National Oceanic and Atmospheric 

Administration’s National Climatic Data Center (NCDC) weather stations by calculating which 

weather station (within the appropriate census region or large state) best matched the 2009 

heating and cooling degree-days in the RECS data set. 

After assigning each RECS household NCDC weather data, DOE calculated the average 

vapor density for each month of the year. The number of months that the dehumidifier was used 

(as indicated by RECS data) was mapped onto the months having the highest vapor density. The 

vapor density for each month was used to calculate the average compressor run time as a fraction 

of an hour using compressor use as related to environmental conditions from a recent field 

metering study.2This same study provided the basis for determining fan-only mode time and 

combined low-power (standby/off) mode time. Assignments for fan-only mode power and 

standby/off mode power were made considering no relationship was found by the study’s authors 

between unit capacity and fan or standby/off mode power. The power of the compressor during 

dehumidification mode was calculated using the method to determine rated capacity and rated 

efficiency proposed in the XXX Test Procedure NOPR. See chapter 7 of the preliminary TSD for 

more detailed information. 

At the framework meeting, one stakeholder asked if dehumidifier efficiency used in the 

analysis was based on the current test procedure. (ASAP, Public Meeting Transcript, No. 10 at p. 

74) DOE used dehumidifier efficiencies based on the XXX Test Procedure NOPR. Values for 

dehumidifier efficiency levels as related to product classes were developed in the engineering 

analysis. 

In the framework document, DOE requested input on its proposed energy use analysis. 

The Joint Commenters brought DOE’s attention to two field studies that measured portable 

dehumidifier energy use. One study from Cadmus estimated 1000 kWh per year based on 8 

months of operation but excluding the high humidity season. Another field study from the 

Energy Center of Wisconsin estimated average annual energy consumption to be 477 kWh. 

(Joint Commenters, No. 9 at p. 9) DOE did not use the above-named studies in its determination 

 

a

http://www.eia.gov/emeu/recs/glossary.html
2-15

of energy use because the Cadmus study was not conducted during the high humidity season and 

therefore did not characterize the period of highest dehumidifier use. The Energy Center of 

Wisconsin study did not determine energy use and frequency during standby or fan modes. 

DOE reviewed existing and new literature, including the two studies mentioned by the 

Joint Commenters, to establish a range of energy use for dehumidifiers. A newly published field 

metering study for portable dehumidifiers linked outdoor absolute humidity to indoor air 

conditions and dehumidifier compressor use.3

The study found that dehumidifier use was 

influenced, among other variables, by whether the basement was finished and the type of 

dehumidifier condensate removal. DOE based its energy use analysis on the equations used to 

model the relationship between vapor density and compressor use developed from the field 

metering study. The resulting energy use values were within the range of the values used in the 

2007 rulemaking. 

2.6.3 Energy Use Determination for Whole-Home Dehumidifiers 

DOE estimated energy use for whole-home dehumidifiers based on a recent field 

metering study for three modes of dehumidifier operation: compressor + fan (i.e., active 

dehumidification), fan-only, and standby (i.e., either inactive mode or off-cycle mode).4The 

sample size of the field study was insufficient to calculate compressor use based on 

environmental conditions, however, as was done for portable dehumidifiers. Consequently, DOE 

modified the annual energy use equation to account for fan-only mode and standby/off mode. 

The equation below and used in the previous rulemaking calculates compressor energy 

use. 

 

 ( 

 ⁄ ) 

 

Where: 

DEHAEU = annual dehumidifier energy use (kilowatt-hours per year [kWh/year]), 

CAP = capacity (pints/day), 

0.473 = conversion from pints to liters (L),

24 = number of hours in a day, 

Hours = annual operating hours, and 

Efficiency = efficiency (L/kWh). 

After obtaining estimates of average time spent in each mode of dehumidifier operation 

from the field study, DOE used the following equation to calculate annual energy use for each 

capacity and efficiency of dehumidifier. 
2-16

 ∑ ( ) 

[

 

 

 

 (

 ( ) 

 )

 (( ) )

 (( )

 

 ) ]

 

 

 

 

 

 

 

 

 

 

 

 

 

 ( )

 

 

 

XDehum= fraction of time in dehumidification mode 

XFan= fraction of time in fan-only mode 

XStby= fraction of time in standby/off mode 

kWDehum= kW power of dehumidification mode 

kWFan= kW power of fan-only mode 

kWStdby= kW power of standby/off mode 

Note: 

 

 

See chapter 7 of the preliminary TSD for more information. 

2.7 Life-Cycle Cost and Payback Period Analysis 

In determining whether an energy efficiency standard is economically justified, DOE 

considers the economic impact of potential standards on consumers. The effect of new or 

amended standards on individual consumers usually includes a reduction in operating cost and an 

increase in purchase cost. DOE used the following two metrics to measure consumer impacts: 

 LCC (life-cycle cost) is the total customer cost of an appliance or product, generally over 

the life of the appliance or product, including purchase and operating costs. The latter 

consist of maintenance, repair, and energy costs. Future operating costs are discounted to 

the time of purchase and summed over the lifetime of the appliance or product. 
2-17

 PBP (payback period) measures the amount of time it takes consumers to recover the 

assumed higher purchase price of a more energy-efficient product through reduced 

operating costs. 

DOE analyzed the net effect of potential dehumidifier standards on consumers by 

calculating the LCC and PBP. Inputs to the LCC calculation include the installed cost to the 

consumer (purchase price plus installation cost), operating expenses (energy expenses, repair 

costs, and maintenance costs), the lifetime of the product, and a discount rate. Inputs to the 

payback period calculation include the installed cost to the consumer and first-year operating 

costs. 

DOE performed the LCC and PBP analyses using a spreadsheet model combined with 

Crystal Ball (a commercially-available software program used to conduct stochastic analysis 

using Monte Carlo simulation and probability distributions) to account for uncertainty and 

variability among the input variables. Each Monte Carlo simulation consists of 10,000 LCC and 

PBP calculations. The model performs each calculation using input values that are either 

sampled from probability distributions and household samples or characterized with single point 

values. The analytical results include a distribution of 10,000 data points showing the range of 

LCC savings and PBPs for a given efficiency level relative to the base case efficiency forecast. 

In performing an iteration of the Monte Carlo simulation for a given consumer, product 

efficiency is chosen based on its probability. If the chosen product efficiency is greater than or 

equal to the efficiency of the standard level under consideration, the LCC and PBP calculation 

reveals that a consumer is not impacted by the standard level. By accounting for consumers who 

already purchase more-efficient products, DOE avoids overstating the potential benefits from 

increasing product efficiency. 

DOE is also required to perform a PBP analysis to determine whether the rebuttable 

presumption of economic justification applies (where the higher installed cost of more energyefficient equipment is less than three times the value of the lowered operating costs in the first 

year of the energy conservation standard). (42 U.S.C. 6295(o)(2)(B)(iii)) The results of this 

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 preliminary determination of economic 

justification). 

2.7.1 Inputs to First Costs 

Installation Costs

Typically, small incremental changes in product efficiency incur little or no change in 

installation costs over baseline products. Based on available information, DOE did not include 

any installation costs from either a portable or whole-home dehumidifier with an increased 

product efficiency. 

Product Costs

To calculate the product costs paid by dehumidifier purchasers, DOE multiplied the 

manufacturing product costs (MPCs) developed from the engineering analysis by industry 
2-18

markups to derive manufacturers’ selling prices (MSPs). The MSPs in turn are multiplied by 

supply chain markups (along with sales taxes) to estimate the initial cost to the consumer. DOE 

used the supply chain markups that include separate markups on the baseline MSP and the 

incremental cost of each higher efficiency level considered. 

AHAM submitted a comment on the framework document that it continues to oppose the 

use of experience curves in the development of product costs; it referenced their comment on the 

supplemental notice of proposed rulemaking for energy conservation standards for microwave 

oven standby mode and off mode. (AHAM, No. 8 at p. 5) 

For the dehumidifier analysis, DOE developed future product prices by fitting historical 

producer price index (PPI) data from the Bureau of Labor Statistics in an exponential function 

with year as the explanatory variable. DOE uses the “small electric household appliances” PPI 

for portable dehumidifiers and “room air-conditioners and dehumidifiers” PPI for whole-home 

dehumidifiers. These two PPI series are the most disaggregated categories that include portable 

and whole-home units. Given very limited market data available for dehumidifiers, DOE 

believes that using these two PPI series would generate more robust estimates and reflect more 

closely real price trends as observed in many other household appliances than an assumption of 

no price trend. Because the costs estimated in the engineering analysis are based on the year of 

analysis, DOE believes it is appropriate to apply the price trend estimation to project the product 

price at the year of compliance in the LCC analysis. 

2.7.2 Inputs to Operating Cost 

Energy Prices 

DOE derived average monthly electricity prices for the 27 geographic areas in RECS 

2009 by using the latest data from EIA. DOE assigned an appropriate energy price to each 

household in the sample, depending on its location. For future prices, DOE used the projected 

annual changes in average residential electricity prices in EIA’s 2013 Annual Energy Outlook

(AEO 2013).

Maintenance and Repair Costs 

Typically, small incremental changes in product efficiency incur little or no change in 

installation, repair and maintenance costs over baseline products. Having no information to 

conclude otherwise, DOE did not include any maintenance or repair costs from either a portable 

or whole-home dehumidifier with an increased product efficiency. 

Product Lifetime 

Product lifetime is the age at which an appliance is retired from service. Based on 

information from the American Council for an Energy Efficiency Economy and the Northeast 

Energy Star Lighting and Appliance data, DOE identified an average dehumidifier lifetime of 11 

years for portable dehumidifiers and 19 years for whole-home dehumidifiers. DOE characterized 

dehumidifier survival functions using Weibull distributions. 
2-19

2.7.3 Other Inputs 

DOE used discount rates to determine the present value of lifetime operating expenses. 

The discount rate used in the LCC analysis represents the rate from an individual consumer’s 

perspective.b Much of the data used for determining consumer discount rates comes from the 

Federal Reserve Board’s triennial Survey of Consumer Finances.

c

To estimate the share of consumers affected by a standard at a particular efficiency level, 

DOE’s LCC and PBP analysis considers the projected distribution (i.e., market shares) of 

product efficiencies that consumers will purchase in the first compliance year under the base case 

(the case without amended energy conservation standards). 

2.8 Shipments Analysis 

DOE used forecasts of product shipments to calculate the national impacts of standards 

and also in its manufacturer impact analysis. DOE developed these shipment forecasts based on 

an analysis of key market drivers for each product. 

DOE estimated portable dehumidifier shipments by projecting shipments in two market 

segments: (1) replacements; (2) homeowners that did not previously have a dehumidifier, i.e., 

first time owners. 

To project portable dehumidifier replacement shipments, DOE developed retirement 

functions for dehumidifiers from the lifetime estimates and applied them to the existing products 

in the stock. The existing stock of products is tracked by vintage and developed from historical 

shipments data. To project shipments to the first time owner market, DOE calibrated the 

estimated shipments with the historical data by introducing into the model a market segment 

identified as existing households without dehumidifiers. DOE estimated that 0.34 percent of 

existing households without a dehumidifier would annually purchase this product over the period 

2019–2048. DOE estimated whole-home shipments at 1 percent of the total portable 

dehumidifier shipment volume. See chapter 9 of this preliminary TSD for more details regarding 

the projection of dehumidifier shipments. 

The Northwest Energy Efficiency Alliance (NEEA) inquired if the shipments analysis 

includes new units that are not replacements, nor included in new construction, such as 

refurbished or retrofit units. (NEEA, Public Meeting Transcript, No. 10 at pp. 89–90) Southern 

Company stated that shipments come not only from replacement and new purchase, but also 

from retrofit of supplemental dehumidification systems. (Southern Company, Public Meeting 

Transcript, No. 10 at pp. 90–91) ASAP stated that the market includes people doing retrofit of 

 

b

 The consumer discount rate differs from the discount rates used in the national impact analysis, which are intended 

to represent the rate of return on capital in the U.S. economy, as well as the societal rate of return on private 

consumption. 

c

 Available at www.federalreserve.gov/econresdata/scf/scfindex.htm. 
2-20

supplemental dehumidification systems in existing homes and ASAP wondered if any data were 

available on the retrofit trend. (ASAP, Public Meeting Transcript, No. 10 at pp. 91–92) 

While DOE has no shipments data specific to the retrofit or refurbish market, this market 

is covered in DOE’s first-time owners shipments estimation, described above. 

Southern Company also commented that recent versions of the International Energy 

Conservation Code (IECC) address the need for supplemental dehumidification, but that most 

building codes didn't adopt these requirements until about 2009. Southern Company stated as an 

example that the Florida Solar Energy Center has researched the need to require in Florida’s 

building code supplemental dehumidification in certain very humid areas of the State. Southern 

Company stated that shipments trend in the last few years may have a different pattern than in 

earlier years due to building codes. (Southern Company, Public Meeting Transcript, No. 10 at 

pp. 57–58, 87–88) 

In a July 2013 report published for DOE by the Building Sciences Corporation, it was 

noted that most building efficiency improvements made in response to building code 

requirements and above-code incentive programs result in lowering sensible heat gains while 

latent (moisture) gains remain mostly unchanged.5Therefore, building codes are not driving the 

wide-scale implementation of supplemental dehumidification at this time, and are thus unlikely 

to have significantly affected dehumidifier shipments over the past few years.

2.9 National Impact Analysis 

The NIA assesses the NES and the NPV from a national perspective of total consumer 

costs and savings expected to result from new or amended energy conservation standards at 

specific efficiency levels. DOE determined the NPV and NES for the standard levels considered 

for the dehumidifier product classes analyzed. DOE prepared a Microsoft Excel spreadsheet that 

uses typical values (as opposed to probability distributions) as inputs. To assess the effect of 

input uncertainty on NES and NPV results, DOE has developed its spreadsheet model to conduct 

sensitivity analyses by running scenarios on specific input variables. 

Analyzing impacts of potential energy conservation standards for dehumidifiers requires 

comparing projections of U.S. energy consumption with amended energy conservation standards 

against projections of energy consumption without amended standards. The forecasts include 

projections of annual appliance shipments, the annual energy consumption of new appliances, 

and the purchase price of new appliances. 

A key component of DOE’s NIA is the energy efficiency forecasted over time for the base 

case (without new standards) and each of the standards cases. The forecasted efficiencies 

represent the annual shipment-weighted energy efficiency of the products under consideration 

during the forecast period (i.e., from the assumed compliance date of a new standard to 30 years 

after compliance is required). 
2-21

DOE developed a distribution of efficiencies in the base case for 2019 (the assumed 

compliance date for amended standards) for each dehumidifier product class. In each standards 

case, a “roll-up” scenario approach was applied to establish the efficiency distribution for 2019. 

Under the “roll-up” scenario, product efficiencies in the base case that do not meet the standard 

level under consideration would “roll-up” to meet the new standard level; and product 

efficiencies above the standard level under consideration would not be affected. In addition to a 

“roll-up” scenario, DOE developed a shift scenario. In the shift scenario DOE applied an annual 

growth rate in average energy efficiency, as it is done in the base case. To develop standards case 

forecasted SWIEFs, DOE developed growth trends for each candidate standard level that 

maintained the same per-unit average total installed cost difference for the year 2019 between the 

base case and each standards case over the entire forecast period (2019–2048). DOE’s approach 

for developing standards case SWIEFs in this manner assumes that the rate of adoption of more 

efficient products under the standards case can occur only at a rate which ensures that the 

average total installed cost difference between the standards case and base case over the entire 

forecast period is held constant. Because the total installed cost versus efficiency relationship for 

each product class demonstrates an increasing cost rate for more efficient products, the SWIEF 

growth rate for each standards case is lower than the SWIEF growth rate for the base case. 

DOE assumed that energy efficiencies for all dehumidifier product classes will increase at 

a rate of 0.25% per year in absence of standard. The growth rates in the standard cases are 

slightly lower than in the base case. Note that for the standards cases, the efficiency trend does 

not increase past the max tech level. 

2.9.1 National Energy Savings Analysis 

The inputs for determining the national energy savings for each product analyzed are: (1) 

annual energy consumption per unit; (2) shipments; (3) product or equipment stock; (4) national 

energy consumption; and (5) site-to-source conversion factors. DOE calculated the national 

energy consumption by multiplying the number of units (stock) of each product (by vintage or 

age) by the unit energy consumption (also by vintage). Vintage represents the age of the product. 

DOE calculated annual NES based on the difference in national energy consumption for the base 

case (without new efficiency standards) and for each higher efficiency standard. DOE estimated 

energy consumption and savings based on site energy and converted the electricity consumption 

and savings to source (primary) energy using annual conversion factors derived from the most 

recent version of the National Energy Modeling System (NEMS). Cumulative energy savings are 

the sum of the NES for each year over the timeframe of the analysis. 

 

Chapter 10 of this preliminary TSD presents primary energy savings for the considered 

efficiency levels. 
2-22

2.9.2 Net Present Value Analysis 

The parameters for determining NPV are the present value of costs and the present value 

of savings. The inputs for the present value of costs and the present value of savings include (1) 

total annual installed cost; (2) total annual savings in operating costs; (3) a discount factor to 

calculate the present value of costs and savings; DOE determined the net savings for each year as 

the difference between the base case and each standards case in terms of total savings in 

operating costs versus total increases in installed costs. DOE calculated savings over the lifetime 

of products shipped in the forecast period. DOE calculated NPV as the difference between the 

present value of operating cost savings and the present value of total installed costs. DOE used a 

discount factor based on real discount rates of 3 and 7 percent to discount future costs and 

savings to present values. 

 For the NPV analysis, DOE calculates increases in total installed costs as the difference 

in total installed cost between the base case and standards case (i.e., once the standards take 

effect). Because the more-efficient products bought in the standards case usually cost more than 

products bought in the base case, cost increases appear as negative values in the NPV. 

 DOE expresses savings in operating costs as decreases associated with the lower energy 

consumption of products bought in the standards case compared to the base case. Total savings 

in operating costs are the product of savings per unit and the number of units of each vintage that 

survive in a given year. 

DOE used the most recent available edition of EIA’s Annual Energy Outlook (AEO 2013) 

as the default source of projections for future energy prices and total housing stock. It will also 

calculate the NPV assuming higher and lower economy growth scenarios from the AEO.

DOE uses the 3-percent and 7-percent real discount rates in accordance with guidance 

provided by the Office of Management and Budget (OMB) to Federal agencies on the 

development of regulatory analysis. (OMB Circular A-4 (Sept. 17, 2003), section E, “Identifying 

and Measuring Benefits and Costs”) 

2.10 Consumer Subgroup Analysis 

DOE intends to evaluate impacts on consumer subgroups, especially low-income and 

senior consumers during any subsequent NOPR analysis. During the preliminary analysis, DOE 

has identified consumer subgroups that it believes may be affected disproportionately by new or 

revised energy conservation standards. 

At any subsequent NOPR stage of this rulemaking, DOE will conduct a LCC subgroup 

analysis. A consumer subgroup comprises a subset of the population that may be affected 

disproportionately by new or revised energy conservation standards (e.g., low-income 

consumers, seniors). The purpose of a subgroup analysis is to determine the extent of any such 

disproportional impacts. 
2-23

2.11 MANUFACTURER IMPACT ANALYSIS 

 DOE performed a preliminary manufacturer impact analysis (MIA) to estimate the 

financial impact of higher energy conservation standards on manufacturers of residential 

dehumidifiers, and to calculate the impact of such standards on employment and manufacturing 

capacity. The MIA has both quantitative and qualitative aspects. The quantitative part of the 

MIA relies on the government regulatory impact model (GRIM), an industry-cash-flow model 

customized for this industry. The following is an overview of the information DOE collected and 

the analysis that was conducted during the preliminary MIA. For more detail on the MIA, see 

chapter 12 of the preliminary TSD. 

2.11.1 Industry Cash-Flow Analysis

 The industry cash-flow analysis relies primarily on the GRIM. DOE uses the GRIM to 

analyze the financial impacts of more stringent energy conservation standards on the industry 

that produces the products covered by the standard. For more information on the industry cashflow analysis, refer to chapter 12 of the preliminary TSD. 

2.11.2 Manufacturer Subgroup Analysis 

 Industry cost estimates are not adequate to assess differential impacts among subgroups 

of manufacturers. For example, small and niche manufacturers, or manufacturers whose cost 

structure differs significantly from the industry average, could experience a more negative 

impact from the imposition of standards. Ideally, DOE would consider the impact on every firm 

individually; however, since this usually is not possible, DOE typically uses the results of the 

industry characterization to group manufacturers exhibiting similar characteristics. 

 DOE outlined the process it uses to establish manufacturer subgroups in the framework 

document and sought comment from interested parties on any potential subgroups within the 

dehumidifier industry. DOE did not receive any comments in response, but its research suggests 

that there are at least five residential dehumidifier manufacturers in the United States that are 

designated as small businesses pursuant to size standards established by the U.S. Small Business 

Administration. DOE therefore seeks comment on its estimates of the number of small 

businesses who may be impacted by the rule and what those impacts might be. 

2.11.3 Competitive Impacts Assessment 

 DOE must also consider whether a new standard is likely to reduce industry competition, 

and the Attorney General must determine the impacts, if any, of any reduced competition. DOE 

will gather and report available firm-specific financial information and impacts. The competitive 
2-24

impacts assessment will focus on assessing the impacts on smaller manufacturers. DOE will base 

this assessment on manufacturing cost data and information collected from interviews with 

manufacturers. The manufacturer interviews will focus on gathering information to help assess 

asymmetrical cost increases to some manufacturers, increased proportion of fixed costs 

potentially increasing business risks, and potential barriers to market entry (e.g., proprietary 

technologies). The notice of proposed rulemaking will be submitted to the Attorney General for a 

review of the impacts of standards on competition. The Attorney General’s comments on the 

proposed rule will be considered in preparing the final rule. 

2.11.4 Cumulative Regulatory Burden 

 DOE recognizes and seeks to mitigate the overlapping effects on manufacturers of new or 

revised DOE standards and other regulatory actions affecting the same equipment. DOE will 

analyze and consider the impact on manufacturers of multiple, product-specific regulatory 

actions. Based on its own research and discussions with manufacturers, DOE identified several 

regulations relevant to residential dehumidifiers, including amended energy conservation 

standards for other products made by dehumidifier manufacturers and international energy 

conservation standards. 

 The cumulative burden typically focuses on the impacts of other product-specific Federal 

requirements on manufacturers of the covered products with a compliance date 3 years prior to 

and 3 years after the anticipated compliance dates of the amended energy conservation standards 

of this rulemaking. DOE discusses these and other regulations in chapter 12 of the preliminary 

TSD. 

2.11.5 Preliminary Results for the Manufacturer Impact Analysis 

 As part of the preliminary MIA, DOE discussed potential impacts of amended energy 

conservation standards with companies representing a majority of residential dehumidifier sales. 

These discussions took place during the interviews DOE conducted for the engineering analysis. 

The interviews provided valuable information that DOE used to evaluate the impacts of amended 

energy conservation standards on manufacturers’ cash flows, manufacturing capacities, and 

employment levels. DOE discusses its findings from the preliminary MIA interviews in the 

executive summary and in chapter 12 of the preliminary TSD. 

2.12 Emissions Analysis 

In the emissions analysis, DOE will estimate 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 the considered products. In addition, DOE will 

estimate 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) and 77 FR 49701 (Aug. 17, 
2-25

2012)), the FFC analysis includes impacts on emissions of methane and nitrous oxide, both of 

which are recognized as greenhouse gases. 

DOE conducts the emissions analysis using emissions factors derived from data in the 

latest version of EIA’s AEO, supplemented by data from other sources. EIA prepares the AEO

using NEMS. Each annual version of NEMS incorporates the projected impacts of existing air 

quality regulations on emissions. The text below refers to AEO 2013, which 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 cap and trading 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 

(D.C.). SO2 emissions from 28 eastern states and D.C. were also limited under the Clean Air 

Interstate Rule (CAIR), which created an allowance-based trading program that operates along 

with the Title IV program in those States and D.C. 70 FR 25162 (May 12, 2005). CAIR was 

remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

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, 696 F.3d 7, 38 (D.C. Cir. 2012). The court ordered EPA to 

continue administering CAIR. AEO 2013 assumes that CAIR remains a binding regulation 

through 2040.d

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 no reductions in power sector emissions would occur for SO2 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, 

 

d

 On April 29, 2014, the U.S. Supreme Court reversed the judgment of the D.C. Circuit and remanded the case for 

further proceedings consistent with the Supreme Court's opinion. The Supreme Court held in part that EPA's 

methodology for quantifying emissions that must be eliminated in certain states due to their impacts in other 

downwind states was based on a permissible, workable, and equitable interpretation of the Clean Air Act provision 

that provides statutory authority for CSAPR. See EPA v. EME Homer City Generation, No 12-1182, slip op. at 32 

(U.S. April 29, 2014). Because DOE is using emissions factors based on AEO 2013 for today's preliminary analysis, 

the preliminary analysis assumes that CAIR, not CSAPR, is the regulation in force. The difference between CAIR 

and CSAPR is not relevant for the purpose of DOE’s analysis of SO2 emissions. 
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2011. 77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a standard for HCl 

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 that would be established by CSAPR, 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 eastern States and the District of Columbia. 

Energy conservation standards are expected to have little or no physical effect on these 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 estimates NOX emissions reductions from potential standards in the States where 

emissions are not capped. 

 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 mercury emissions. 

DOE will estimate mercury emissions reduction using emissions factors based on AEO 2013, 

which incorporates the MATS. 

Power plants may emit particulates from the smoke stack, which are known as direct 

particulate matter (PM) emissions. NEMS does not account for direct PM emissions from power 

plants. DOE is investigating the possibility of using other methods to estimate reduction in PM 

emissions due to standards. The great majority of ambient PM associated with power plants is in 

the form of secondary sulfates and nitrates, which are produced at a significant distance from 

power plants by complex atmospheric chemical reactions that often involve the gaseous 

emissions of power plants, mainly SO2 and NOX. The monetary benefits that DOE estimates for 

reductions in SO2 and NOX emissions resulting from standards are in fact primarily related to the 

health benefits of reduced ambient PM. 

2.13 Monetization of Emissions Reduction Benefits 

 DOE plans to consider the estimated monetary benefits likely to result from the reduced 

emissions of CO2 and NOX that are expected to accompany each of the standard levels 

considered. 
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 To estimate the monetary value of benefits resulting from reduced emissions of CO2, 

DOE plans to use the most current Social Cost of Carbon (SCC) values developed and/or agreed 

to by an interagency process. The SCC is intended to be a monetary measure of the incremental 

damage resulting from greenhouse gas (GHG) emissions, including, but not limited to, net 

agricultural productivity loss, human health effects, property damage from sea level rise, and 

changes in ecosystem services. Any effort to quantify and to monetize the harms associated with 

climate change will raise serious questions of science, economics, and ethics. But with full 

regard for the limits of both quantification and monetization, the SCC can be used to provide 

estimates of the social benefits of reductions in GHG emissions. 

 The Interagency Working Group on Social Cost of Carbon released an update of its 

previous reportein 2013.6The most recent estimates of the SCC in 2015, expressed in 2013$, are 

$12.0, $40.5, $62.4, and $119 per metric ton of CO2 avoided. For emissions reductions that occur 

in later years, these 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 DOE will give preference to consideration of the 

global benefits of reducing CO2 emissions. 

 DOE multiplies 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 discounts the values in each of the four cases using the discount rates that had been 

used to obtain the SCC values in each case. 

 DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

 DOE also estimates the potential monetary benefit of reduced NOX emissions resulting 

from the standard levels it considers. DOE calculates monetary benefits using a medium value 

for NOX emissions of $2,684 per short ton (in 2013$), and real discount rates of 3 percent and 7 

percent. 

DOE is evaluating appropriate valuation of avoided SO2 and Hg emissions. Whether 

monetization of reduced Hg emissions will occur in this rulemaking is yet to be determined. 

AHAM commented that DOE’s analysis regarding monetization of carbon dioxide should 

be a more comprehensive analysis to understand the total environmental impact. It stated that if a 

CO2 analysis is done, the analysis should include CO2 emissions that are caused indirectly, as 

well as directly, from a standards change, such as increased carbon emissions required to 

 

e

Social 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-for-RIA.pdf. 
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manufacture a given standard level, the increased transportation and related emissions required 

for a given standard level, and reduced carbon emissions from peak load reductions. (AHAM, 

No. 8 at p. 5) 

DOE’s emissions analysis does consider reduced carbon emissions from changes in 

electricity generation. Regarding indirect emissions, the considerations that DOE applies to 

energy savings also apply to emissions reductions. EPCA directs DOE to consider the total 

projected amount of energy, or as applicable, water, savings likely to result directly from the 

imposition of the standard when determining whether a standard is economically justified. (42 

U.S.C. 6295(o)(2)(B)(i)(III) and 6316(a)) DOE interprets this to include energy used in the 

generation, transmission, and distribution of fuels used by appliances or equipment, as well as 

the energy consumed in extracting, processing, and transporting primary fuels. DOE’s current 

accounting of full-fuel-cycle energy savings is directly linked to the energy used by appliances or 

equipment. DOE believes that energy used in manufacturing or transporting of appliances or 

equipment falls outside the boundaries of “directly” as intended by EPCA. Thus, DOE does not 

plan to consider such energy use and associated emissions in the NIA or the emissions analysis. 

2.14 Utility Impact Analysis 

To estimate the impacts of potential energy conservation standards for dehumidifiers on 

the electric utility industry, DOE will use a variant of the EIA’s National Energy Modeling 

System called NEMS-BT.f NEMS is a large, multi-sectoral, partial-equilibrium model of the U.S. 

energy sector that EIA has developed over several years, primarily for the purpose of preparing 

the AEO. NEMS produces a widely recognized forecast for the United States through 2035 and is 

available to the public. 

The utility impact analysis is a comparison of the NEMS-BT model results between the 

base case and standard cases. Outputs of the utility impact analysis usually parallel results that 

appear in the latest AEO, with some additions. The utility impact analysis reports the changes in 

installed capacity and generation that result from each standard level by plant type. DOE will 

model the anticipated energy savings impacts from potential amended energy conservation 

standards using NEMS-BT to generate forecasts that deviate from the AEO Reference Case. 

Southern Company commented that rapid changes are occurring in the electric utility 

market and that NEMS-BT will handle that, but using the most up-to-date possible information 

 

f

 For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000, 

DOE/EIA-0581 (March 2000), available at: http://tonto.eia.doe.gov/ftproot/forecasting/05812000.pdf. 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 EIA assumptions, DOE refers to the model by the name NEMS-BT. (“BT” refers to DOE’s 

Building Technologies Program, under whose aegis this work is performed.) 
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in that particular area will be very important. (Southern Company, Public Meeting Transcript, 

No. 10 at p. 104) DOE will use the most current version of NEMS-BT and the latest inputs. 

2.15 Employment Impact Analysis 

The adoption of energy conservation standards can affect employment both directly and 

indirectly. Direct employment impacts are changes in the number of employees at the plants that 

produce the covered products, along with affiliated distribution and service companies. DOE will 

evaluate direct employment impacts in the MIA. 

Indirect employment impacts may result from expenditures shifting between goods (the 

substitution effect) and changes in income and overall expenditure levels (the income effect) that 

occur due to standards. DOE defines indirect employment impacts from standards as net jobs 

eliminated or created in the general economy as a result of increased spending driven by 

increased product prices and reduced spending on energy. 

The indirect employment impacts will be investigated in the employment impact analysis 

using the Pacific Northwest National Laboratory’s “Impact of Sector Energy Technologies” 

(ImSET) model.7

The ImSET model was developed for DOE’s Office of Planning, Budget, and 

Analysis to estimate the employment and income effects of energy-saving technologies in 

buildings, industry, and transportation. Compared with simple economic multiplier approaches, 

ImSET allows for more complete and automated analysis of the economic impacts of energy 

conservation investments.

2.16 Regulatory Impact Analysis 

In the NOPR stage, DOE will prepare a regulatory impact analysis (RIA) that evaluates 

potential non-regulatory policy alternatives, comparing the costs and benefits of each to those of 

the proposed standards. DOE recognizes that non-regulatory policy alternatives can substantially 

affect energy efficiency or reduce energy consumption. DOE will base its assessment on the 

actual impacts of any such initiatives to date, but also will consider information presented by 

interested parties regarding the potential future impacts of current initiatives. 

2.17 REFERENCES 

 

1

 “Residential Energy Consumption Survey: 2009 RECS Survey Data,” 2013. U.S. Department 

of Energy: Energy Information Administration. Available online at: 

http://www.eia.gov/consumption/residential/data/2009/. (Accessed November 30, 2013).
2-30

 

2

 Willem, Henry et al., “Using Field-Metered Data to Quantify Annual Energy Use of 

Residential Portable Unit Dehumidifiers,” 2013. Lawrence Berkeley National Laboratory. 

Berkeley, CA. Report No. LBNL-6469E.

3

Id.

4

 Willem, Henry et al., “Field-Monitoring of Whole-Home Dehumidifiers: Initial Results of a 

Pilot Study,” 2013. Lawrence Berkeley National Laboratory. Berkeley, CA. Report No. LBNL6475E.

5 Rudd, Armin. “Supplemental Dehumidification in Warm-Humid Climates”, Building America 

Report – 1310, Building Science Consortium, Prepared for the U.S. Department of Energy, July 

2013, p. 4. 

6

“Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under 

Executive Order 12866,” May 2013; revised November 2013. Interagency Working Group on 

Social Cost of Carbon, United States Government. Available online at: 

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-ofcarbon-for-regulator-impact-analysis.pdf. (Accessed November 30, 2013).

7

 Roop, J. M., M. J. Scott, and R. W. Schultz, “ImSET: Impact of Sector Energy Technologies,” 

2005. Pacific Northwest National Laboratory. Richland, WA. Report No. PNNL-15273.