[Federal Register Volume 87, Number 40 (Tuesday, March 1, 2022)]
[Proposed Rules]
[Pages 11327-11335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04013]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0019]
RIN 1904-AD91


Energy Conservation Program: Energy Conservation Standards for 
Consumer Water Heaters

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

ACTION: Notification of availability of preliminary technical support 
document and request for comment.

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SUMMARY: The U.S. Department of Energy (DOE or the Department) 
announces the availability of the preliminary analysis it has conducted 
for purposes of evaluating the need for amended energy conservation 
standards for consumer water heaters, which is set forth in the 
Department's preliminary technical support document (TSD) for this 
rulemaking. DOE will hold a public meeting via webinar to discuss and 
receive comment on its preliminary analysis. The meeting will cover the 
analytical framework, models, and tools used to evaluate potential 
standards; the results of preliminary analyses performed; potential 
energy conservation standard levels derived from these analyses (if DOE 
determines that proposed amendments are necessary); and other relevant 
issues. In addition, DOE encourages written comments on these subjects.

DATES: 
    Comments: DOE will accept written comments, data, and information 
regarding its preliminary analysis for consumer water heaters no later 
than May 2, 2022.
    Meeting: DOE will hold a public meeting via webinar on Tuesday, 
April 12, 2022, from 1:00 p.m. to 5:00 p.m. See section IV, ``Public 
Participation,'' for webinar registration information, participant 
instructions, and information about the capabilities available to 
webinar participants.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov. Follow the 
instructions for submitting comments. Alternatively, interested persons 
may submit comments, identified by docket number EERE-2017-BT-STD-0019 
and/or RIN 1904-AD91, by any of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: to <a href="/cdn-cgi/l/email-protection#4a092524393f272f381d2b3e2f38022f2b3e2f3839787a7b7d191e0e7a7a7b730a2f2f642e252f642d253c"><span class="__cf_email__" data-cfemail="01426e6f72746c647356607564734964607564737233313036525545313130384164642f656e642f666e77">[email protected]</span></a>. Include 
docket number EERE-2017-BT-STD-0019 and/or RIN 1904-AD91 in the subject 
line of the message.
    No telefacsimiles (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section IV of this document (Public Participation).
    Although DOE has routinely accepted public comment submissions 
through a variety of mechanisms, including postal mail and hand 
delivery/courier, the Department has found it necessary to make 
temporary modifications to the comment submission process in light of 
the ongoing coronavirus (COVID-19) pandemic. DOE is currently 
suspending receipt of public comments via postal mail and hand 
delivery/courier. If a commenter finds that this change poses an undue 
hardship, please contact Appliance Standards Program staff at (202) 
586-1445 to discuss the need for alternative arrangements. Once the 
COVID-19 pandemic health emergency is resolved, DOE anticipates 
resuming all of its regular options for public comment submission, 
including postal mail and hand delivery/courier.
    To inform interested parties and to facilitate this rulemaking 
process, DOE has prepared an agenda, a preliminary TSD, and briefing 
materials, which are available on the DOE website at: 
www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. 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 those 
containing information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2017-BT-STD-0019. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section IV (Public Participation) for information on how to submit 
comments through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(240) 597-6737. Email: <a href="/cdn-cgi/l/email-protection#024372726e6b636c61675176636c666370667153776771766b6d6c714267672c666d672c656d74"><span class="__cf_email__" data-cfemail="2d6c5d5d41444c434e487e594c43494c5f495e7c58485e594442435e6d484803494248034a425b">[email protected]</span></a>.
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-5827. Email: <a href="/cdn-cgi/l/email-protection#0346716a602d50776270436b722d676c662d646c75"><span class="__cf_email__" data-cfemail="db9ea9b2b8f588afbaa89bb3aaf5bfb4bef5bcb4ad">[email protected]</span></a>.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting 
webinar, contact the Appliance and Equipment Standards Program staff at 
(202) 287-1445 or by email: <a href="/cdn-cgi/l/email-protection#7a3b0a0a16131b14191f290e1b141e1b081e092b0f1f090e131514093a1f1f541e151f541d150c"><span class="__cf_email__" data-cfemail="3c7d4c4c50555d525f596f485d52585d4e584f6d49594f485553524f7c595912585359125b534a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority
    B. Rulemaking Process
    C. Deviation From Appendix A
II. Background
    A. Current Standards
    B. Current Process
III. Summary of the Analyses Performed by DOE
    A. Engineering Analysis
    B. Mark-Ups Analysis
    C. Energy Use Analysis
    D. Life-Cycle Cost and Payback Period Analyses
    E. National Impact Analysis
    F. Other Analyses
IV. Public Participation
    A. Participation in the Webinar
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Webinar

[[Page 11328]]

    D. Submission of Comments
V. Approval of the Office of the Secretary

I. Introduction

A. Authority

    The Energy Policy and Conservation Act, as amended (EPCA),\1\ 
Public Law 94-163 (42 U.S.C. 6291-6317, as codified), authorizes DOE to 
regulate the energy efficiency of a number of consumer products and 
certain industrial equipment. Title III, Part B \2\ of EPCA established 
the Energy Conservation Program for Consumer Products Other Than 
Automobiles. (42 U.S.C. 6291-6309) These products include consumer 
water heaters, the subject of this document. (42 U.S.C. 6292(a)(4))
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through the Infrastructure Investment and Jobs Act, 
Public Law 117-58 (Nov. 15, 2021).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
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    EPCA prescribed energy conservation standards for these products 
(42 U.S.C. 6295(e)(1)), and the statute directed DOE to conduct two 
cycles of rulemakings to determine whether to amend these standards (42 
U.S.C. 6295(e)(4)). EPCA further provides that, not later than 6 years 
after the issuance of any final rule establishing or amending a 
standard, DOE must publish either a notification of determination that 
standards for the product do not need to be amended, or a notice of 
proposed rulemaking (NOPR) including new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6295(m)(1)) Not later than three years after issuance of a final 
determination not to amend standards, DOE must publish either a notice 
of determination that standards for the product do not need to be 
amended, or a NOPR including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
    DOE completed the first of these rulemaking cycles on January 17, 
2001, by publishing in the Federal Register a final rule amending the 
energy conservation standards for consumer water heaters. 66 FR 4474 
(establishing amended standards with a requirement for compliance 
starting on January 20, 2004) (January 2001 Final Rule). Subsequently, 
DOE completed the second rulemaking cycle to amend the standards for 
consumer water heaters by publishing a final rule in the Federal 
Register on April 16, 2010. 75 FR 20112 (establishing amended consumer 
water heater standards with a requirement for compliance starting on 
April 16, 2015) (April 2010 Final Rule). As directed by later 
amendments to EPCA \3\ (see 42 U.S.C. 6295(e)(5)(B)), on July 11, 2014, 
DOE published in the Federal Register a final rule amending the test 
procedure for consumer water heaters to change the efficiency metric 
from energy factor (EF) to uniform energy factor (UEF). 79 FR 40542. 
The existing EF-based energy conservation standards were then 
translated from EF to UEF in a separate DOE conversion factor final 
rule published in the Federal Register on December 29, 2016, that 
established a method for converting EF to UEF for water heater basic 
models that were previously in existence. 81 FR 96204 (December 2016 
Conversion Factor Final Rule). The current energy conservation 
standards for consumer water heaters are located in the Code of Federal 
Regulations (CFR) at 10 CFR 430.32(d) and are set forth in Table II.1 
in section A of this document. The currently applicable DOE test 
procedures for consumer water heaters appear at 10 CFR part 430, 
subpart B, appendix E (Appendix E).
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    \3\ The requirement for a consumer water heater test procedure 
using uniform energy factor as a metric, as well as the requirement 
for DOE to undertake a conversion factor rulemaking to translate 
existing consumer water heater standards denominated in terms of EF 
to ones denominated in terms of UEF, were part of the amendments to 
EPCA contained in the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
or amended standard must result in a significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B))
    DOE is publishing this preliminary analysis to collect data and 
information to inform its decision consistent with its obligations 
under EPCA.

B. Rulemaking Process

    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including consumer water 
heaters. As noted, EPCA requires that any new or amended energy 
conservation standard prescribed by the Secretary of Energy (Secretary) 
be designed to achieve the maximum improvement in energy efficiency (or 
water efficiency for certain products specified by EPCA) that is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would 
not result in significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\4\ For 
example, the United States rejoined the Paris Agreement on February 19, 
2021. As part of that agreement, the United States has committed to 
reducing greenhouse gas (GHG) emissions in order to limit the rise in 
mean global temperature. As such, energy savings that reduce GHG 
emissions have taken on greater importance. Additionally, some covered 
products and equipment have most of their energy consumption occur 
during periods of peak energy demand. The impacts of these products on 
the U.S. energy infrastructure can be more pronounced than those of 
products with relatively constant demand. In evaluating the 
significance of energy savings, DOE considers differences in not only 
site energy use, but also primary energy and full-fuel-cycle (FFC) 
effects for different covered products and equipment when determining 
whether energy savings are significant. Primary energy and FFC effects 
include the energy consumed in electricity production (depending on 
load shape), in distribution and transmission, and in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and, thus, present a more complete picture of the 
impacts of energy conservation standards.\5\ Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
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    \4\ See 86 FR 70892, 70901 (Dec. 13, 2021).
    \5\ The FFC metric is discussed in DOE's statement of policy and 
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended 
at 77 FR 49701 (Aug. 17, 2012).
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    To determine whether a proposed new or amended energy conservation 
standard is economically justified, EPCA requires that DOE 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 the 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 
standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;

[[Page 11329]]

    (4) Any lessening of the utility or the performance of the 
products likely to result from 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 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    DOE fulfills these and other applicable requirements by conducting 
a series of analyses throughout the rulemaking process. Table I.1 shows 
the individual analyses that are performed to satisfy each of the 
requirements within EPCA.

       Table I.1--EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
             EPCA requirement                Corresponding DOE analysis
------------------------------------------------------------------------
Significant Energy Savings................  <bullet> Shipments Analysis.
                                            <bullet> National Impact
                                             Analysis.
                                            <bullet> Energy Analysis.
Technological Feasibility.................  <bullet> Market and
                                             Technology Assessment.
                                            <bullet> Screening Analysis.
                                            <bullet> Engineering
                                             Analysis.
Economic Justification:
    1. Economic impact on manufacturers     <bullet> Manufacturer Impact
     and consumers.                          Analysis.
                                            <bullet> Life-Cycle Cost and
                                             Payback Period Analysis.
                                            <bullet> Life-Cycle Cost
                                             Subgroup Analysis.
                                            <bullet> Shipments Analysis.
    2. Lifetime operating cost savings      <bullet> Mark-ups for
     compared to increased cost for the      Product Price Analysis.
     product.
                                            <bullet> Energy Analysis.
                                            <bullet> Life-Cycle Cost and
                                             Payback Period Analysis.
    3. Total projected energy savings.....  <bullet> Shipments Analysis.
                                            <bullet> National Impact
                                             Analysis.
    4. Impact on utility or performance...  <bullet> Screening Analysis.
                                            <bullet> Engineering
                                             Analysis.
    5. Impact of any lessening of           <bullet> Manufacturer Impact
     competition.                            Analysis.
    6. Need for national energy and water   <bullet> Shipments Analysis.
     conservation.
                                            <bullet> National Impact
                                             Analysis.
    7. Other factors the Secretary          <bullet> Employment Impact
     considers relevant.                     Analysis.
                                            <bullet> Utility Impact
                                             Analysis.
                                            <bullet> Emissions Analysis.
                                            <bullet> Monetization of
                                             Emission Reductions
                                             Benefits.\6\
                                            <bullet> Regulatory Impact
                                             Analysis.
------------------------------------------------------------------------

    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
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    \6\ Currently, in compliance with the preliminary injunction 
issued on February 11, 2022, in Louisiana v. Biden, No. 21-cv-1074-
JDC-KK (W.D. La.), DOE is not monetizing the costs of greenhouse gas 
emissions.
---------------------------------------------------------------------------

    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended 
or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of product that has the same function or intended use, if DOE 
determines that products within such group: (A) Consume a different 
kind of energy from that consumed by other covered products within such 
type (or class); or (B) have a capacity or other performance-related 
feature which other products within such type (or class) do not have 
and such feature justifies a higher or lower standard. (42 U.S.C. 
6295(q)(1)) In determining whether a performance-related feature 
justifies a different standard for a group of products, DOE must 
consider such factors as the utility to the consumer of the feature and 
other factors DOE deems appropriate. Id. Any rule prescribing such a 
standard must include an explanation of the basis on which such higher 
or lower level was established. (42 U.S.C. 6295(q)(2))
    Finally, pursuant to the amendments to EPCA contained in the Energy 
Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, 
any final rule for new or amended energy conservation standards 
promulgated after July 1, 2010, is required to address standby mode and 
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE 
adopts a standard for a covered product after that date, it must, if 
justified by the criteria for adoption of standards under EPCA (42 
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into 
a single standard, or, if that is not feasible, adopt a separate 
standard for such energy use for that product. (42 U.S.C. 
6295(gg)(3)(A)-(B)) DOE's current test procedures for consumer water 
heaters address standby mode and off mode energy use. In this 
rulemaking, DOE intends to incorporate such energy use into any amended 
energy conservation standards it adopts in the final rule.
    Before proposing a standard, DOE typically seeks public input on 
the analytical framework, models, and tools

[[Page 11330]]

that DOE intends to use to evaluate potential standards for the product 
at issue and the results of preliminary analyses DOE performed for the 
product.
    DOE is examining whether to amend the current energy conservation 
standards for consumer water heaters pursuant to its obligations under 
EPCA. This document announces the availability of the preliminary TSD, 
which details the preliminary analyses and summarizes the preliminary 
results of DOE's analyses. In addition, DOE is announcing a public 
meeting webinar to solicit feedback from interested parties on its 
analytical framework, models, and preliminary results.

C. Deviation from Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``appendix A''), DOE notes that it is deviating from the 
provision in appendix A regarding the pre-NOPR stages for an energy 
conservation standards rulemaking. See 86 FR 70892 (Dec. 13, 2021) 
(effective January 12, 2022). Section 6(a)(2) of appendix A states that 
if the Department determines it is appropriate to proceed with a 
rulemaking, the preliminary stages of a rulemaking to issue or amend an 
energy conservation standard that DOE will undertake will be a 
framework document and preliminary analysis, or an advance notice of 
proposed rulemaking.
    DOE is opting to deviate from this step by publishing a preliminary 
analysis without a framework document. A framework document is intended 
to introduce and summarize the various analyses DOE conducts during the 
rulemaking process and requests initial feedback from interested 
parties. As discussed further in section B, prior to this notification 
of the preliminary analysis DOE published a request for information 
(``RFI'') in which DOE identified and sought comment on the analyses 
conducted in support of the most recent energy conservation standards 
rulemakings. 85 FR 30853 (May 21, 2020; ``May 2020 RFI''). 
Specifically, in the May 2020 RFI, DOE sought data and information as 
to whether any new or amended rule would be cost effective, 
economically justified, technologically feasible, or would result in a 
significant savings of energy. 85 FR 30853, 30855. DOE sought such data 
and information to assist in its consideration of whether (and if so, 
how) to amend the standards for consumer water heater. Id. Further, DOE 
provided an overview of the analysis it would use to evaluate new or 
amended energy conservation standards, including references to and 
requests for comment on the analyses conducted as part of the most 
recent energy conservation standards rulemakings. See 85 FR 30853, 
30859-30877. As DOE is intending to rely on substantively the same 
analytical methods as in the most recent rulemaking, publication of a 
framework document would be largely redundant with the published May 
2020 RFI. As such, DOE is not publishing a framework document.
    Section 6(d)(2) of appendix A provides that the length of the 
public comment period for pre-NOPR rulemaking documents will vary 
depending upon the circumstances of the particular rulemaking, but will 
not be less than 75 calendar days. For this preliminary analysis, DOE 
has opted to provide a 60-day comment period. As stated, DOE requested 
comment in the May 2020 RFI on the previous energy conservation 
standards analyses. For this preliminary analysis, DOE has relied on 
many of the same analytical assumptions and approaches as used in the 
previous rulemaking and has determined that a 60-day comment period in 
conjunction with the prior comment period for the May 2020 RFI provides 
sufficient time for interested parties to review the preliminary 
analysis and develop comments.

II. Background

A. Current Standards

    In a final rule published in the Federal Register on April 16, 2010 
(April 2010 Final Rule), DOE prescribed the current energy conservation 
standards for consumer water heaters, which are applicable to such 
products manufactured on and after April 16, 2015. 75 FR 20111, 20234.
    As explained in section A of this document, DOE published the 
December 2016 Conversion Factor Final Rule in the Federal Register (81 
FR 96204 (Dec. 29, 2016)) to convert standards based on EF to standards 
based on UEF, the metric produced by the amended test procedure 
established by the July 2014 Final Rule (79 FR 40542 (July 11, 2014)). 
These standards are set forth in DOE's regulations at 10 CFR 430.32(d) 
and are repeated here in Table II.1.

                                      Table II.1--Federal Energy Conservation Standards for Consumer Water Heaters
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Rated storage volume  and input rating  (if
            Product class                              applicable)                         Draw pattern                   Uniform energy factor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater......  >=20 gal and <=55 gal                         Very Small................  0.3456-(0.0020 x Vr).
                                      ............................................  Low.......................  0.5982-(0.0019 x Vr).
                                      ............................................  Medium....................  0.6483-(0.0017 x Vr).
                                      ............................................  High......................  0.6920-(0.0013 x Vr).
                                      >55 gal and <=100 gal                         Very Small................  0.6470-(0.0006 x Vr).
                                      ............................................  Low.......................  0.7689-(0.0005 x Vr).
                                      ............................................  Medium....................  0.7897-(0.0004 x Vr).
                                      ............................................  High......................  0.8072-(0.0003 x Vr).
Oil-fired Storage Water Heater......  <=50 gal                                      Very Small................  0.2509-(0.0012 x Vr).
                                      ............................................  Low.......................  0.5330-(0.0016 x Vr).
                                      ............................................  Medium....................  0.6078-(0.0016 x Vr).
                                      ............................................  High......................  0.6815-(0.0014 x Vr).
Electric Storage Water Heater.......  >=20 gal and <=55 gal                         Very Small................  0.8808-(0.0008 x Vr).
                                      ............................................  Low.......................  0.9254-(0.0003 x Vr).
                                      ............................................  Medium....................  0.9307-(0.0002 x Vr).
                                      ............................................  High......................  0.9349-(0.0001 x Vr).
                                      >55 gal and <=120 gal                         Very Small................  1.9236-(0.0011 x Vr).
                                      ............................................  Low.......................  2.0440-(0.0011 x Vr).
                                      ............................................  Medium....................  2.1171-(0.0011 x Vr).
                                      ............................................  High......................  2.2418-(0.0011 x Vr).
Tabletop Water Heater...............  >=20 gal and <=120 gal                        Very Small................  0.6323-(0.0058 x Vr).
                                      ............................................  Low.......................  0.9188-(0.0031 x Vr).

[[Page 11331]]

 
                                      ............................................  Medium....................  0.9577-(0.0023 x Vr).
                                      ............................................  High......................  0.9884-(0.0016 x Vr).
Instantaneous Gas-fired Water Heater  <2 gal and >50,000 Btu/h                      Very Small................  0.80.
                                      ............................................  Low.......................  0.81.
                                      ............................................  Medium....................  0.81.
                                      ............................................  High......................  0.81.
Instantaneous Electric Water Heater.  <2 gal                                        Very Small................  0.91.
                                      ............................................  Low.......................  0.91.
                                      ............................................  Medium....................  0.91.
                                      ............................................  High......................  0.92.
Grid-Enabled Water Heater...........  >75 gal                                       Very Small................  1.0136-(0.0028 x Vr).
                                      ............................................  Low.......................  0.9984-(0.0014 x Vr).
                                      ............................................  Medium....................  0.9853-(0.0010 x Vr).
                                      ............................................  High......................  0.9720-(0.0007 x Vr).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ``Vr'' is the Rated Storage Volume (in gallons), as determined pursuant to 10 CFR 429.17.

    As stated in section A of this document, EPCA, as amended, 
prescribed initial energy conservation standards for consumer water 
heaters, as shown in Table II.2. (42 U.S.C. 6295(e)(1)) DOE notes that 
the statutory energy conservation standards apply to both storage and 
instantaneous consumer water heaters regardless of volume capacity. As 
such, the energy conservation standards shown in Table II.2 would cover 
the volume and input rate ranges not included in Table II.1.

     Table II.2--Consumer Water Heater Energy Conservation Standards
                           Prescribed by EPCA
------------------------------------------------------------------------
                                     The energy factor shall be not less
                                       than the following for products
           Product class            manufactured on or after  January 1,
                                                    1990
------------------------------------------------------------------------
Gas Water Heater..................  0.62-(0.0019 x Rated Storage Volume
                                     in gallons).
Oil Water Heater..................  0.59-(0.0019 x Rated Storage Volume
                                     in gallons).
Electric Water Heater.............  0.95-(0.00132 x Rated Storage Volume
                                     in gallons).
------------------------------------------------------------------------

B. Current Process

    As stated, on May 21, 2020, DOE published notice in the Federal 
Register through a request for information that it was initiating a 
review to determine whether any new or amended standards for consumer 
water heaters would satisfy the relevant requirements of EPCA. 85 FR 
30853. Specifically, through the published notice and RFI, DOE sought 
data and information that could enable the agency to determine whether 
DOE should propose a ``no new standard'' determination because a more-
stringent standard: (1) Would not result in a significant savings of 
energy; (2) is not technologically feasible; (3) is not economically 
justified; or (4) any combination of foregoing. Id. at 85 FR 30855.
    Comments received to date as part of the current process have 
helped DOE identify and resolve issues related to development of the 
preliminary analyses. Chapter 2 of the preliminary TSD summarizes and 
addresses the comments received. Further comments are requested 
throughout the preliminary TSD and executive summary.

III. Summary of the Analyses Performed by DOE

    For the products covered in this preliminary analysis, DOE 
conducted in-depth technical analyses in the following areas: (1) 
Engineering; (2) mark-ups to determine product price; (3) energy use; 
(4) life cycle cost (LCC) and payback period (PBP); and (5) national 
impacts. The preliminary TSD that presents the methodology and results 
of each of these analyses is available at: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32.
    DOE also conducted, and has included in the preliminary TSD, 
several other analyses that support the major analyses or are 
preliminary analyses that will be expanded if DOE determines that a 
NOPR is warranted to propose new or amended energy conservation 
standards. These analyses include: (1) The market and technology 
assessment; (2) the screening analysis, which contributes to the 
engineering analysis; and (3) the shipments analysis, which contributes 
to the LCC and PBP analysis and the national impact analysis (NIA). In 
addition to these analyses, DOE has begun preliminary work on the 
manufacturer impact analysis and has identified the methods to be used 
for the consumer subgroup analysis, the emissions analysis, the 
employment impact analysis, the regulatory impact analysis, and the 
utility impact analysis. DOE will expand on these analyses in the NOPR, 
should one be issued.

A. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of consumer water heaters. 
There are two elements to consider in the engineering analysis: (1) The 
selection of efficiency levels to analyze (i.e., the ``efficiency 
analysis'') and (2) the determination of product cost at each 
efficiency level (i.e., the ``cost analysis''). In determining the 
performance of higher-efficiency products, DOE considers technologies 
and design option combinations not eliminated by the screening 
analysis. For each product class, DOE estimates the baseline cost, as 
well as the incremental cost, for the product/equipment at efficiency 
levels above the baseline. The output of the engineering analysis is a 
set of cost-efficiency ``curves'' that are used in downstream

[[Page 11332]]

analyses (i.e., the LCC and PBP analyses and the NIA).
    DOE converts the Manufacture Production Cost (MPC) to the 
manufacturer selling price (MSP) by applying a manufacturer mark-up. 
The MSP is the price the manufacturer charges its first customer, when 
selling into the consumer water heater distribution channels. The 
manufacturer mark-up accounts for manufacturer non-production costs and 
profit margin. DOE developed the manufacturer mark-up by examining 
publicly-available financial information for manufacturers of the 
covered product.
    See Chapter 5 of the preliminary TSD for additional detail on the 
engineering analysis and Chapter 12 of the preliminary TSD for 
additional detail on the manufacturer mark-up.

B. Mark-Ups Analysis

    The mark-ups analysis develops appropriate mark-ups (e.g., retailer 
mark-ups, distributor mark-ups, contractor mark-ups) in the 
distribution chain and sales taxes to convert MSP estimates derived in 
the engineering analysis to consumer prices, which are then used in the 
LCC and PBP analysis. At each step in the distribution channel, 
companies mark up the price of the product to cover business costs and 
profit margin.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain for consumer water heaters. Baseline mark-ups 
are applied to the price of products with baseline efficiency, while 
incremental mark-ups are applied to the difference in price between 
baseline and higher-efficiency models (the incremental cost increase). 
The incremental mark-up is typically less than the baseline mark-up and 
is designed to maintain similar per-unit operating profit before and 
after new or amended standards.\7\
---------------------------------------------------------------------------

    \7\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same mark-up for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive, it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    Chapter 6 of the preliminary TSD provides details on DOE's 
development of mark-ups for consumer water heaters.

C. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of consumer water heaters at different efficiencies 
in representative U.S. single-family homes, multi-family residences, 
and commercial buildings, and to assess the energy savings potential of 
increased consumer water heater efficiency. The energy use analysis 
estimates the range of energy use of consumer water heaters in the 
field (i.e., as they are actually used by consumers). In addition, the 
energy use analysis provides the basis for other analyses DOE 
performed, particularly assessments of the energy savings and the 
savings in consumer operating costs that could result from adoption of 
amended or new energy conservation standards.
    Chapter 7 of the preliminary TSD addresses the energy use analysis.

D. Life-Cycle Cost and Payback Period Analyses

    The effect of new or amended energy conservation standards on 
individual consumers usually involves a reduction in operating cost and 
an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
    <bullet> The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain mark-ups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
use, maintenance, and repair). To compute the operating costs, DOE 
discounts future operating costs to the time of purchase and sums them 
over the lifetime of the product.
    <bullet> The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    Chapter 8 of the preliminary TSD addresses the LCC and PBP 
analyses.

E. National Impact Analysis

    The NIA estimates the national energy savings (NES) and the net 
present value (NPV) of total consumer costs and savings expected to 
result from amended standards at specific efficiency levels (referred 
to as candidate standard levels).\8\ DOE calculates the NES and NPV for 
the potential standard levels considered based on projections of annual 
product shipments, along with the annual energy consumption and total 
installed cost data from the energy use and LCC analyses. For the 
present analysis, DOE projected the energy savings, operating cost 
savings, product costs, and NPV of consumer benefits over the lifetime 
of consumer water heaters sold from 2030 through 2059.
---------------------------------------------------------------------------

    \8\ The NIA accounts for impacts in the 50 States and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
product class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each product class if DOE 
adopted new or amended standards at specific energy efficiency levels 
for that class. For each efficiency level, DOE considers how a given 
standard would likely affect the market shares of product with 
efficiencies greater than the standard.
    For the NIA, DOE uses a spreadsheet model to calculate the energy 
savings and the national consumer costs and savings from each 
efficiency level. Interested parties can review DOE's analyses by 
changing various input quantities within the spreadsheet. The NIA 
spreadsheet model uses typical values (as opposed to probability 
distributions) as inputs. Critical inputs to this analysis include 
shipments projections, estimated product lifetimes, product installed 
costs and operating costs, product annual energy consumption, the base-
case efficiency projection, product switching parameters, and discount 
rates. Chapter 10 of the preliminary TSD addresses the NIA.

F. Other Analyses

    As stated in section A of this document, EPCA does not prescribe 
storage volume or minimum input rating limits within its definition of 
consumer ``water heater.'' However, DOE's energy conservation standards 
for consumer water heaters at 10 CFR 430.32(d) do not include certain 
storage volume and input rating ranges. The storage volume and input 
rating ranges currently covered by the statutory standards at 42 U.S.C. 
6295(e)(1) but not included in the list of energy conservation 
standards in DOE's regulations at 10 CFR 430.32(d) are set forth in 
Table III.1.

[[Page 11333]]



      Table III.1--Consumer Water Heaters Without UEF-Based Energy
                         Conservation Standards
------------------------------------------------------------------------
                                          Rated storage volume and input
             Product class                   rating  (if applicable)
------------------------------------------------------------------------
Gas-fired Storage......................  <20 gal.
                                         >100 gal.
Oil-fired Storage......................  >50 gal.
Electric Storage.......................  <20 gal.
                                         >120 gal.
Tabletop...............................  <20 gal.
                                         >120 gal.
Gas-fired Instantaneous................  <2 gal and <=50,000 Btu/h.
                                         >=2 gal and <=50 kBtu/h.
                                         >=2 gal and >50 kBtu/h.
Oil-fired Instantaneous................  All.
Electric Instantaneous.................  >=2 gal.
------------------------------------------------------------------------

    In the December 2016 Conversion Factor Final Rule, DOE stated that 
it would not enforce the statutory standards (i.e., those prescribed by 
EPCA but are not codified in the CFR) applicable to the consumer water 
heaters that did not have a standard within the CFR until some point 
after DOE finalizes the conversion factor and the converted standards 
applicable to those products. 81 FR 96204, 96211 (Dec. 29, 2016). DOE 
will consider and may establish energy conservation standards for these 
products in this rulemaking. See Chapter 5 of the preliminary TSD for 
additional detail on the conversion of the remaining EF-based standards 
established by EPCA to UEF-based standards.
    On January 11, 2022, DOE published a test procedure NOPR in the 
Federal Register which proposed new definitions for certain types of 
consumer water heaters. 87 FR 1554 (January 2022 WH TP NOPR). These 
definitions included ``circulating water heater'' \9\ and ``low 
temperature water heater.'' \10\ These water heaters cannot be tested 
using the existing test procedure in Appendix E but can be tested using 
the proposed test procedures found in the January 2022 WH TP NOPR. See 
Chapter 5 of the preliminary TSD for additional detail on the product 
classes in which these products are covered and a discussion of the 
applicable energy conservation standards.
---------------------------------------------------------------------------

    \9\ The January 2022 WH TP NOPR proposed to define ``circulating 
water heater'' at 10 CFR 430.2 as an instantaneous or heat pump type 
water heater that does not have an operational scheme in which the 
burner, heating element, or compressor initiates and terminates 
heating based on sensing flow; has a water temperature sensor 
located at the inlet of the water heater or in a separate storage 
tank that is the primary means of initiating and terminating 
heating; and, must be used in combination with a recirculating pump 
and either a separate storage tank or water circulation loop in 
order to achieve the water flow and temperature conditions 
recommended in the manufacturer's installation and operation 
instructions. 87 FR 1554, 1595 (Jan. 11, 2022).
    \10\ The January 2022 WH TP NOPR proposed to define a ``low 
temperature water heater'' as an electric instantaneous water heater 
that is not a circulating water heater and cannot deliver water at a 
temperature greater than or equal to the set point temperature 
specified in section 2.5 of appendix E to subpart B of this part 
when supplied with water at the supply water temperature specified 
in section 2.3 of appendix E to subpart B of this part. 87 FR 1554, 
1595 (Jan. 11, 2022).
---------------------------------------------------------------------------

IV. Public Participation

    DOE invites public engagement in this process through participation 
in the webinar and submission of written comments, data, and 
information. After the webinar and the closing of the comment period, 
DOE will consider all timely-submitted comments and additional 
information obtained from interested parties, as well as information 
obtained through further analyses. Following such consideration, the 
Department will publish either a determination that the energy 
conservation standards for consumer water heaters need not be amended 
or a NOPR proposing to amend those standards. The NOPR, should one be 
issued, would include proposed energy conservation standards for the 
products covered by this rulemaking, and members of the public would be 
given an opportunity to submit written and oral comments on the 
proposed standards.

A. Participation in the Webinar

    The time and date of the webinar meeting are listed in the DATES 
section at the beginning of this document. Webinar registration 
information, participant instructions, and information about the 
capabilities available to webinar participants will be published on 
DOE's website: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32. Participants are responsible for ensuring 
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
document, or who is representative of a group or class of persons that 
has an interest in these issues, may request an opportunity to make an 
oral presentation at the public meeting webinar. Such persons may 
submit requests to speak via email to the Appliance and Equipment 
Standards Program at: <a href="/cdn-cgi/l/email-protection#25645555494c444b46407651444b414457415674504056514c4a4b566540400b414a400b424a53"><span class="__cf_email__" data-cfemail="064776766a6f6768656355726768626774627557736375726f6968754663632862696328616970">[email protected]</span></a>. Persons 
who wish to speak should include with their request a computer file in 
Microsoft Word, PDF, or text (ASCII) file format that briefly describes 
the nature of their interest in this rulemaking and the topics they 
wish to discuss. Such persons should also provide a daytime telephone 
number where they can be reached.
    Persons requesting to speak should briefly describe the nature of 
their interest in this rulemaking and provide a telephone number for 
contact. DOE requests persons selected to make an oral presentation to 
submit an advance copy of their statements at least two weeks before 
the public meeting webinar. At its discretion, DOE may permit persons 
who cannot supply an advance copy of their statement to participate, if 
those persons have made advance alternative arrangements with the 
Building Technologies Office. As necessary, requests to give an oral 
presentation should ask for such alternative arrangements.

C. Conduct of the Webinar

    DOE will designate a DOE official to preside at the public meeting 
webinar and may also use a professional facilitator to aid discussion. 
The webinar will not be a judicial or evidentiary-type public hearing, 
but DOE will conduct it in accordance with section 336 of EPCA (42 
U.S.C. 6306). A court reporter will be present to record

[[Page 11334]]

the proceedings and prepare a transcript. DOE reserves the right to 
schedule the order of presentations and to establish the procedures 
governing the conduct of the public meeting webinar. There shall not be 
discussion of proprietary information, costs or prices, market share, 
or other commercial matters regulated by U.S. anti-trust laws. After 
the public meeting webinar and until the end of the comment period, 
interested parties may submit further comments on the proceedings and 
any aspect of the rulemaking.
    The public meeting webinar will be conducted in an informal, 
conference style. DOE will present a general overview of the topics 
addressed in this rulemaking, allow time for prepared general 
statements by participants, and encourage all interested parties to 
share their views on issues affecting this rulemaking. Each participant 
will be allowed to make a general statement (within time limits 
determined by DOE), before the discussion of specific topics. DOE will 
allow, as time permits, other participants to comment briefly on any 
general statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting webinar will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting webinar.
    A transcript of the public meeting webinar will be included in the 
docket, which can be viewed as described in the Docket section at the 
beginning of this document. In addition, any person may buy a copy of 
the transcript from the transcribing reporter.

D. Submission of Comments

    DOE invites all interested parties, regardless of whether they 
participate in the public meeting webinar, to submit in writing no 
later than the date provided in the DATES section at the beginning of 
this document, comments, data, and information on matters addressed in 
this notification and on other matters relevant to DOE's consideration 
of potential amended energy conservations standards for consumer water 
heaters. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. If this instruction is followed, persons viewing comments 
will see only first and last names, organization names, correspondence 
containing comments, and any documents submitted with the comments.
    Do not submit to www.regulations.gov. information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
www.regulations.gov cannot be claimed as CBI. Comments received through 
the website will waive any CBI claims for the information submitted. 
For information on submitting CBI, see the Confidential Business 
Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email. Comments and documents submitted via 
email also will be posted to www.regulations.gov. If you do not want 
your personal contact information to be publicly viewable, do not 
include it in your comment or any accompanying documents. Instead, 
provide your contact information in a cover letter. Include your first 
and last names, email address, telephone number, and optional mailing 
address. The cover letter will not be publicly viewable as long as it 
does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. No telefacsimiles (faxes) will 
be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, or text (ASCII) file format. Provide documents that are not 
secured, that are written in English, and that are free of any defects 
or viruses. Documents should not contain special characters or any form 
of encryption and, if possible, they should carry the electronic 
signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: One copy of the document marked 
``Confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this 
notification of availability of the preliminary technical support 
document and request for comment.

[[Page 11335]]

Signing Authority

    This document of the Department of Energy was signed on February 
13, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant 
Secretary for Energy Efficiency and Renewable Energy, pursuant to 
delegated authority from the Secretary of Energy. That document with 
the original signature and date is maintained by DOE. For 
administrative purposes only, and in compliance with requirements of 
the Office of the Federal Register, the undersigned DOE Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of the Department of Energy. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on February 22, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-04013 Filed 2-28-22; 8:45 am]
BILLING CODE 6450-01-P


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