### CHAPTER 11: NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

11.1 INTRODUCTION

......................................................................................................... 11-1 11.2 BASE CASE AND STANDARDS CASE FORECASTED EFFICIENCIES

.............. 11-2 11.2.1 Cooking Products – Cooktops and Ovens

..................................................................... 11-3 11.2.2 Cooking Products – Microwave Ovens

......................................................................... 11-7 11.2.3 Commercial Clothes Washers

........................................................................................ 11-8 11.3 NATIONAL ENERGY SAVINGS

............................................................................. 11-10 11.3.1 NES Definition

.......................................................................................................... ... 11-10 11.3.2 NES Inputs

.............................................................................................................. ..... 11-11 11.3.2.1 Annual Energy Consumption per Unit

...................................................... 11-11 11.3.2.2 Shipments

................................................................................................... 11-15 11.3.2.3 Equipment Stock

........................................................................................ 11-15 11.3.2.4 National Annual Energy Consumption

...................................................... 11-16 11.3.2.5 Energy Site-to-Source Conversion Factors

................................................ 11-16 11.4 NET PRESENT VALUE

............................................................................................. 11-17 11.4.1 NPV Definition

.......................................................................................................... .. 11-17 11.4.2 NPV Inputs

.............................................................................................................. ..... 11-18 11.4.2.1 Total Installed Cost per Unit

...................................................................... 11-19 11.4.2.2 Annual Operating Cost Savings per Unit

................................................... 11-23 11.4.2.3 Total Annual Installed Cost Increases

....................................................... 11-25 11.4.2.4 Total Annual Operating Cost Savings

....................................................... 11-25 11.4.2.5 Discount Factors

........................................................................................ 11-25 11.4.2.6 Present Value of Costs

............................................................................... 11-26 11.4.2.7 Present Value of Savings

........................................................................... 11-26 11.4.3 Fuel Switching

.......................................................................................................... ... 11-26 11.5 NES AND NPV RESULTS

......................................................................................... 11-29 11.5.1 NES and NPV Input Summary

.................................................................................... 11-29 11.5.2 NES Results

............................................................................................................. .... 11-30 11.5.2.1 Cooking Products – Cooktops and Ovens

................................................. 11-30 11.5.2.2 Cooking Products – Microwave Ovens

..................................................... 11-31 11.5.2.3 Commercial Clothes Washers

.................................................................... 11-32 11.5.3 Annual Costs and Savings

........................................................................................... 11-33 11.5.4 NPV Results

............................................................................................................. .... 11-34 11.5.4.1 Cooking Products – Cooktops and Ovens

................................................. 11-35 11.5.4.2 Cooking Products – Microwave Ovens

..................................................... 11-36 11.5.4.3 Commercial Clothes Washers

.................................................................... 11-36 11.6 IMPACT OF STANDARDS ON NATURAL GAS AND ELECTRICITY PRICES AND ASSOCIATED CONSUMER BENEFITS

......................................... 11-37 11.6.1 Impact on Natural Gas Prices

...................................................................................... 11-37 11.6.2 Impact on Electricity Prices

......................................................................................... 11- 41

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### LIST OF TABLES
Table 11.2.1 Electric Coil Cooktops: Base Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-4 Table 11.2.2 Electric Smooth Cooktops: Base Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-4 Table 11.2.3 Gas Cooktops: Base Case and Standards Case Efficiency Distributions in 2012

.................................................................................................................... 11-4 Table 11.2.4 Electric Standard Ovens: Base Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-5 Table 11.2.5 Electric Self-Cleaning Ovens: Ba se Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-5 Table 11.2.6 Gas Standard Ovens: Base Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-6 Table 11.2.7 Gas Self-Cleaning Ovens: Base Case and Standards Case Efficiency Distributions in 2012

.......................................................................................... 11-6 Table 11.2.8 Microwave Ovens: Base Ca se and Standards Case Efficiency Distributions by Energy Factor Level in 2012

................................................... 11-8 Table 11.2.9 Top-Loading Commercial Clothe s Washers: Base Case and Standards Case Efficiency Distributions in 2012

............................................................... 11-9 Table 11.2.10 Front-Loading Commer cial Clothes Washers: Base Case and Standards Case Efficiency Distributions in 2012

............................................................... 11-9 Table 11.3.1 National Ener gy Saving Inputs

........................................................................ 11-11 Table 11.3.2 Cooktops: Base Case and Sta ndards Case Shipment-Weighted Average Per-Unit Annual Energy Consumption in 2012

............................................... 11-12 Table 11.3.3 Ovens: Base Case and Standa rds Case Shipment-Weighted Average PerUnit Annual Energy Consumption in 2012

..................................................... 11-12 Table 11.3.4 Microwave Ovens: Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy Consumption in 2012

................................ 11-14 Table 11.3.5 Top-Loading Commercial Clothe s Washers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy and Water Consumption in 2012

....................................................................................... 11-14 Table 11.3.6 Front-Loading Commer cial Clothes Washers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy and Water Consumption in 2012

....................................................................................... 11-15 Table 11.3.7 Site-to-Source Conversion Factor s for Electricity and Natural Gas

................ 11-17 Table 11.4.1 Net Present Value Inputs

................................................................................. 11-19 Table 11.4.2 Cooktops: Base Case and Sta ndards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012

............................................................. 11-20 Table 11.4.3 Ovens: Base Case and Standa rds Case Shipment-Weighted Average PerUnit Total Installed Costs in 2012

................................................................... 11-20 Table 11.4.4 Microwave Ovens: Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012

.............................................. 11-22

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### Table 11.4.5 Top-Loading Commercial Clothe s Washers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012

.... 11-22 Table 11.4.6 Front-Loading Commer cial Clothes Washers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012

.... 11-23 Table 11.4.7 Top-Loading Commercial Clothe s Washers: Base Case and Standards Case Shipment-Weighted Average Per-U nit Annualized Repair Costs in 2012

.................................................................................................................. 11-24 Table 11.4.8 Front-Loading Commer cial Clothes Washers: Base Case and Standards Case Shipment-Weighted Average Per-U nit Annualized Repair Costs in 2012

.................................................................................................................. 11-24 Table 11.4.9 Installation Cost for an Elect rical Outlet to acco mmodate an Electric Cooking Product

.............................................................................................. 11-27 Table 11.4.10 Installation Cost for a Branch Ci rcuit to accommodate an Electric Cooking Product

............................................................................................................. 11-28 Table 11.5.1 NES and NPV Inputs

....................................................................................... 11-29 Table 11.5.2 Cooktops: Cumu lative NES Results

............................................................... 11-30 Table 11.5.3 Ovens: Cumulative NES Results

.................................................................... 11-30 Table 11.5.4 Cooktops: Cumulative NES Resu lts Discounted at Seven Percent and Three Percent

................................................................................................... 11-31 Table 11.5.5 Ovens: Cumulative NES Results Discounted at Seven Percent and Three Percent

.............................................................................................................. 11-31 Table 11.5.6 Microwave Ovens by EF: Cumulative NES Results

...................................... 11-31 Table 11.5.7 Microwave Ovens by Standby Power: Cumulative NES Results

................... 11-32 Table 11.5.8 Microwave Ovens by EF: Cumula tive NES Results Discounted at Seven Percent and Three Percent

............................................................................... 11-32 Table 11.5.9 Microwave Ovens by Standby Power: Cumulative NES Results Discounted at Seven Percen t and Three Percent

.............................................. 11-32 Table 11.5.10 Commercial Clothes Washers: Cumulative NES and NWS Results

.............. 11-33 Table 11.5.11 Commercial Clothes Washers: Cumulative NES and NWS Results Discounted at Seven Percen t and Three Percent

.............................................. 11-33 Table 11.5.12 Cooktops: Cumulative NPV Resu lts based on Seven-Percent and ThreePercent Discount Rates

.................................................................................... 11-35 Table 11.5.13 Ovens: Cumulative NPV Resu lts based on Seven-Percent and ThreePercent Discount Rates

.................................................................................... 11-35 Table 11.5.14 Microwave Ovens by EF: Cumu lative NPV Results based on SevenPercent and Three-Percen t Discount Rates

...................................................... 11-36 Table 11.5.15 Microwave Ovens by Standby Powe r: Cumulative NPV Results based on Seven-Percent and Three-Percent Discount Rates

........................................... 11-36 Table 11.5.16 Commercial Clothes Washers: Cumulative NPV Results based on SevenPercent and Three-Percen t Discount Rates

...................................................... 11-37 Table 11.6.1 Impact of Max Tech Standard Levels on Natural Gas Consumption and Average Wellhead Price in 2030

..................................................................... 11-39 Table 11.6.2 Implicit Natural Gas Inverse Price Elasticity from Seven Energy Models

..... 11-40 Table 11.6.3 Impact of Max Tech Standard Levels on Electricity Consumption and Price in 2030

.................................................................................................... 11-42

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### LIST OF FIGURES
Figure 11.2.1 Gas Cooking Products: Forecast of Products with Standing Pilots

.................. 11-7 Figure 11.3.1 Gas Cooktops and Gas Standard Ovens: Forecasted Base Case Annual Energy Consumption

....................................................................................... 11-13 Figure 11.4.1 Gas Cooktops and Gas Standard Ovens: Forecasted Base Case Total Installed Costs

.................................................................................................. 11-21 Figure 11.5.1 Non-Discounted Annual Installe d Cost Increases and Annual Operating Cost Savings for Microwave Ovens, TSL 3b

.................................................. 11-34 Figure 11.6.1 Wellhead Natural Gas Price Change in 2030 Resulting from Reduced Natural Gas Consumption Associated w ith Max Tech Standard Levels

......... 11-38 Figure 11.6.2 Inverse Natural Gas Price Elas ticity from NEMS Analysis for Cooking Product and Commercial Clothes Washer Max Tech Standard Levels

........... 11-39 Figure 11.6.3 Electricity Price Change in 2030 Resulting from Reduced Electricity Consumption Associated with Max Tech Standard Levels

............................. 11-42 Figure 11.6.4 Inverse Electricity Price Elas ticity from NEMS Analysis for Cooking Product and Commercial Clothes Washer Max Tech Standard Levels

........... 11-43

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### CHAPTER 11. NATIONAL IMPACT ANALYSIS

11.1 INTRODUCTION This chapter describes the method for estim ating national impacts for cooking products and commercial clothes washers, i.e., the quantit y and net value to consumers of future national energy savings (NES) (and water savings for comm ercial clothes washers) from possible trial standard levels (TSL). Chapter 9 provides identifies and describes the TSLs for cooking products and commercial clothes washers. Results described here include: (1) national energy (and water) consumption and savings, (2) monetary value of energy savings to the Nation due to TSLs, (3) increased total installed costs to the Nation due to TSLs, and (4 ) the net present value (NPV) of energy savings (diffe rence between value of energy savings and increased total installed costs). For commercial clothes wash ers, when NES is discussed throughout this chapter, it includes national water savings in addition to national energy savings.

DOE determined both the NES and NPV for all of the TSLs considered for cooking products and commercial clothes washers. It performed all calculati ons for each of the considered products using a Microsoft Excel sp readsheet model, which is accessible on the Internet ( http://www.eere.energy.gov/buildings/appliance_standards/ ). Each product’s spreadsheet model, referred to as the Nationa l Impact Analysis (NIA) Model, combined the calculations for determining the NES and NPV as well as input from th e relevant Shipments Model. Details and instructions for using each of the NIA Models are provided in Appendix 10A.
The important facets of national energy consum ption of the considered products include: (1) shipments of the equipment, (2) customer re sponse to changes in tota l installed cost (i.e., purchase price plus installation costs), opera ting expense, and household income, and (3) voluntary programs promoting higher energy efficiency of equipment.

Chapter 10 provides a detailed description of the Shipments Models that DOE used to forecast future purchases of the considered produ cts. Included in the discussion are detailed descriptions of consumers’ sensitivities to tota l installed cost, operating expense, and income (otherwise known as elasticities), and how DOE captured them within the model.
Concerning voluntary programs, although they may increase the share of energy efficient equipment prior to the implementation date of any new TSLs, DOE was not able to obtain information that quantified how such programs affect equipment efficiencies on a national basis. Consequently, DOE did not explicitly incorporate th e impact of market-based initiatives into the shipments forecasts detailed in Chapter 10.

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### 11.2 BASE CASE AND STANDARDS CASE FORECASTED EFFICIENCIES A key component of DOE’s estimates of NES and NPV is the energy efficiencies forecasted over time for the base case (without ne w standards) and each of the standards cases (with new standards). The forecasted efficien cies represent the annual shipment-weighted energy efficiency of the products under consid eration over the forecast period (i.e., from the assumed effective date of a new standard to 30 years after the standard becomes effective). Because key inputs to the calculation of th e NES and NPV are dependent on the estimated efficiencies, these efficiencies ar e of great importance to the analys is. In the case of the NES, the per-unit annual energy (and water) consumption is a direct function of product efficiency. Chapter 6, Energy and Water Use Determination, de scribes how the per-unit energy (and water) consumption vary as a function of efficiency for each of the considered products. With regard to the NPV, two inputs, the per-unit total installed cost and the per-unit a nnual operating cost, are dependent on efficiency. The per-u nit total installed cost is a dire ct function of efficiency while the per-unit annual operating cost, because it is a function of the per-unit annual (and water) consumption, is indirectly dependent on product efficiency. Section 8.2.1 of Chapter 8, LifeCycle Cost (LCC) and Payback Period (PBP) Analysis, describes how pe r-unit total installed costs vary as a function of efficiency for each of the considered products. The above NES and NPV inputs, as well as all other inputs to the calculation of the NES and NPV, are also discussed below in sections 10.3.1 and 10.4.1.

For each of the products considered, DOE based the development of the product efficiencies in the base case on the assignment of equipment efficiencies in the base case for the year 2005. In other words, DOE determined the di stribution of product effi ciencies currently in the marketplace to develop a shipment-weighted e fficiency for the year 2005. For a complete discussion of the assignment of efficiencies in the base case for each of the considered products, refer to section 8.2.6 of Chapter 8, LCC and PBP Analysis.
Using the shipment-weight efficiency for the year 2005 as a starting point, DOE developed base case forecasted efficiencies base d on assumptions regarding future efficiency growth. For the period spanning 2005–2012 (2012 be ing the assumed effective date of a new standard), DOE assumed that ther e would be no growth in the ship ment-weighted efficiency (i.e., no change in the distribution of product efficiencies ). Because there are no historical data to indicate how product efficiencies have cha nged over time, DOE estimated that forecasted efficiencies remained frozen at the 2012 efficien cy level until the end of the forecast period (30 years after the assumed effective date—t he year 2042). Alth ough DOE recognizes the possibility that product efficiencies may change over time, DOE does not want to speculate as to how these product efficiencies may change withou t historical informati on. As described below in Section 11.2.1, DOE did forecast the market sh are of gas standard ranges equipped with standing pilots to estimate the impact of elimin ating standing pilots for gas cooktops and gas standard ovens.

For its determination of standards-case for ecasted efficiencies, DOE assumed a “roll-up” scenario to establish the shipment-weighted effici ency for the year that standards are assumed to become effective (i.e., 2012). DOE assumed that product efficiencies in th e base case that did

11-2

### not meet the standard under consid eration would “roll up” to meet the new standard level. Also, DOE assumed that all product effi ciencies in the base case that were above the standard under consideration would not be affected. Using the shipment-weighted efficiency in the year 2012 as a starting point, DOE developed standards-case forecasted efficiencies based on assumptions regarding future efficiency growth. For all of the considered products, DOE made the same assumptions regarding standards-case efficiency gr owth rates as for the base case— namely, that forecasted efficiencies remain frozen at the 201 2 efficiency level until the end of the forecast period. By maintaining the same growth rate for forecasted efficiencies in the standards case as in the base case (i.e., zero growth), DOE retained a constant efficiency difference or gap between the two cases over the length of the forecast period. Although frozen trends may not reflect what happens to base case and standards case product efficiencies in the future, DOE believes that maintaining a frozen efficiency difference betw een the base case and standards case provides a reasonable estimate of the impact that standards have on product efficiency.

With the exception of cooktops and ovens, the NIA spreadsheet models for each of the considered products also incorpor ated user options of one percen t and two percent for the growth rates of the base-case an d standards-case forecasted efficiencies. The following sections detail the base-case and standards-case forecasted effici encies that DOE developed for each of the four sets of products.

11.2.1 Cooking Products – Cooktops and Ovens DOE first presented the market share of effi ciencies in the base case for cooktops and ovens in sections 8.2.6.1 and 8.2.6.2, respectively, of Chapter 8, LCC and PBP Analysis. As noted in Chapter 8, DOE did not have the data to develop efficiency distributions for any of the electric cooktop and oven product classes or th e gas self-cleaning oven product class. Thus, DOE assumed that 100 percent of the current market was at the baseline level for these product classes. Because DOE assumed a roll-up scenario for forecasting product efficiency distributions once a standard became effective, th e effect of any standard level was to move 100 percent of the market to that standard level.
In the case of gas cooktops and gas standard ovens, data were availa ble to allow DOE to identify the percentage of the market in the ba se case that was alrea dy equipped with pilotless ignition. As described in Chapter 8, DOE allocated that percentage of the market that already had pilotless ignition. Therefore, knowing the ma rket share of gas cooktops and standard ovens already equipped with pilotless ignition allowed DOE to accurately estimate the national impacts of requiring a standard that no longer allowed standing pilots.
For the year 2012, Tables 11.2.1, 11.2.2, and 11.2.3 show the base case and standards case product efficiency distributions that DOE used in its national impact analysis for electric coil, electric smooth, and gas cooktops. Th e standards cases correspond to the candidate standard levels analyzed in the LCC and PBP An alysis. The TSLs for each product class are also shown in the following tables. Note that the TSLs do not consider all of the candidate standard levels that DOE analyzed in the LCC and PBP anal ysis. Also included in th e tables below are the

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### shipment-weighted efficiencies (SWEF) associat ed with the base case and each standards case (candidate standard level).

Table 11.2.1 Electric Coil Cooktops: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 Baseline 1 0.737 100%

- 1 2, 3, 4 0.769 0% 100% SWEF (EF) 0.737 0.769



### Table 11.2.2 Electric Smooth Cooktops: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 Baseline 1, 2, 3 0.742 100%

- 1 4 0.753 0% 100% SWEF (EF) 0.742 0.753



### Table 11.2.3 Gas Cooktops: Base Case and Standard s Case Efficiency Distributions in 2012

Candidate Standard Level TSL EF Market Shares

Base Case Standard Case 1 2 Baseline

- 0.156 6.8%

- - 1 1, 2, 3 0.399 93.2% 100%

- 2 4 0.420 0% 0% 100% SWEF (EF) 0.379 0.399 0.420



### Tables 11.2.4, 11.2.5, 11.2.6, and 11.2.7 show the ba se case and standards case product efficiency distributions in 2012 that DOE used fo r electric standard, electric self-cleaning, gas standard, and gas self-cleaning ovens. As with the cooktop produc t classes, the standards cases for the oven product classes correspond to the candida te standard levels analyzed in the LCC and PBP Analysis. The TSLs for each product class ar e also shown in the following tables. Note that the TSLs do not consider all of the candidate standard levels that DOE analyzed in the LCC and PBP analysis. Also included in each of the tabl es is the SWEF associat ed with the base case and each standards case.
In the case of gas standard ovens (Table 11.2.6), DOE analyzed standard levels 1 and 1a in a similar manner. That is, because both are non-standing pilot ignition options, DOE allocated the market share at the baseline level (standi ng pilot) to the candidate standard level under

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### consideration without affecting the market share allocated to the other standing pilot option. Therefore, when DOE analyzed candidate standa rd level 1 (glo-bar ignition system), the 17.6 percent of the market at the baseline level was ro lled-up into candidate sta ndard level 1 (to arrive at a market share of 91.8 percent) without affectin g the market share at candidate standard level 1a (spark ignition). When DOE analyzed candi date standard level 1a, the 17.6 percent of the market at the baseline level was rolled-up into ca ndidate standard level 1a (to arrive at a market share of 25.8 percent) without affecting the mark et share at candidate standard level 1. For candidate standard levels 2 through 6, becau se they included design options beyond a nonstanding pilot ignition system, the market shares at the baseline level and candidate standard levels 1 and 1a (for a total of 100 percent) were allocated to the candidate standard level under consideration.

Table 11.2.4 Electric Standard Ovens: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 2 3 4 5 Baseline 1 0.1066 100%

- - - - - 1

- 0.1113 0% 100%

- - - - 2 2, 3 0.1163 0% 0% 100% - - - 3

- 0.1181 0% 0% 0% 100% - - 4

- 0.1206 0% 0% 0% 0% 100% - 5 4 0.1209 0% 0% 0% 0% 0% 100% SWEF (EF) 0.1066 0.1113 0.1163 0.1181 0.1206 0.1209



### Table 11.2.5 Electric Self-Cleaning Ovens: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 2 Baseline 1, 2, 3 0.1099 100%

- - 1

- 0.1102 0% 100%

- 2 4 0.1123 0% 0% 100% SWEF (EF) 0.1099 0.1102 0.1123

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### Table 11.2.6 Gas Standard Ovens: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 2 3 4 5 6 1a Baseline

- 0.0298 17.6%

- - - - - - - 1*

- 0.0536 74.2% 91.8%

- - - - - 74.2% 2

- 0.0566 0% 0% 100%

- - - - 0% 3

- 0.0572 0% 0% 0% 100%

- - - 0% 4

- 0.0593 0% 0% 0% 0% 100% - - 0% 5

- 0.0596 0% 0% 0% 0% 0% 100% - 0% 6 4 0.0600 0% 0% 0% 0% 0% 0% 100% 0% 1a* 1, 2, 3 0.0583 8.2% 8.2% 0% 0% 0% 0% 0% 25.8% SWEF (EF) 0.0498 0.0540 0.0566 0.0572 0.0593 0.0596 0.0600 0.0548 * Candidate Standard Levels 1 and 1a correspond to designs that are utilized for the same purpose—eliminate the

need for a standing pilo t. Level 1 is a glo-bar hot surface ignition de vice while level 1a is a spark ignition device.



### Table 11.2.7 Gas Self-Cleaning Ovens: Base Case and Standards Case Efficiency Distributions in 2012
Candidate Market Shares Standard

Level TSL EF Base Case Candidate Standard Level 1 2 3 Baseline 1, 2 0.0540 100%

- - - 1 3 0.0625 0% 100%

- - 2

- 0.0627 0% 0% 100%

- 3 4 0.0632 0% 0% 0% 100% SWEF (EF) 0.0540 0.0625 0.0627 0.0632



### For gas cooktops and gas standard ovens, DOE developed base case efficiency trends to estimate the future market share of products with pilotless ignition. As described in Chapter 8, only gas standard ranges (which are a combinati on of a gas cooktop and a gas standard oven) are still shipped with standing pilots. Based on the data first presented in sections 8.2.6.1 and 8.2.6.2 of Chapter 8, Figure 11.2.2 shows the historical market share of gas cooking products with standing pilots. The figure belo w also provides trend lines to the historical data. Note that the market share of gas built-in ovens with standing pilots zeroed out in 1991 while the market share of gas built-in cooktops with standing pilots is zero out by the year 2000. That leaves standard ranges as the only gas cooking produc ts shipped with standing pilots. By the end of the forecast period in the year 2042, DOE estimated that less than five percent of gas st andard ranges in the market would still be shipped w ith standing pilots. DOE used the trend line for gas standard ranges presented below in Figure 11.2.2 to forecast the percentage of gas range shipments with standing pilots. Refer back to section 10.3.1.1 of Chapter 10, Shipments Analysis, for a description of how DOE allocate d the gas standard range ship ments into gas cooktop and gas standard oven product classes.

11-60.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

1985 1995 2005 2015 2025 2035 2045
YearPercent with Pilot Gas Standard Range Gas Built-In Cooktop
Gas Built-In Oven



### Figure 11.2.1 Gas Cooking Products: Forecast of Products with Standing Pilots
With regard to the base case and standards case forecasted efficiencies, as noted previously, DOE assumed th at equipment efficiencies remain fr ozen at the levels in the year 2012 for all standard levels and fo r all product classes, with th e exception of gas cooktops and gas standard ovens. For gas cooktops and gas standard ovens, as noted above, DOE used the forecasted trend in gas ranges with standing pilots in the base case (as shown in Figure 11.2.2) to estimate the impacts from moving to a candidate st andard level that eliminated standing pilots (i.e., candidate standard levels 1 and 1a). For all gas cooktop and gas standard oven candidate standard levels, DOE assumed that equipment efficien cies remain frozen at the levels in the year 2012.

11.2.2 Cooking Products – Microwave Ovens DOE first presented the market share of effi ciencies in the base case for microwave ovens in section 8.2.6.3 of Chapter 8, LCC and PBP An alysis. Table 11.2.8 shows the base case and standards case product efficiency distributions in the year 2012 that DOE used in its national impact analysis for microwave ovens. The stan dards cases correspond to the candidate standard levels analyzed in the LCC and PBP Analysis. The TSLs are also shown in Table 11.2.8. Note that DOE considered all the candidate standard levels in the TSLs that it developed for microwave ovens. Table 11.2.8 presents both the ma rket shares by energy factor level and standby power level. While DOE conducted separa te national impact analyses for the energy factor and standby power, the base case efficiency distributions ha ve been developed to account

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### for the percentage of the market that are repr esented by efficiency leve ls in both the ‘energy factor’ and ‘standby power’ groupings . Specifically, the baseline e fficiency level represents 46.2 percent of the market and is comprised of an energy factor of 0.557 and standby power consumption of 4.0 watts with a corresponding a nnual energy consumption of 165.8 kWh/year. Because all efficiency levels under consideration to improve the energy factor have an annual energy use which is greater than all of the efficiency levels u nder consideration to limit standby power, DOE conducted the NIA on the energy factor by retaining the base case market share assignments for standby power. For example, in analyzing TSL 1a, DOE specified that 46.2 percent of consumers would purchase microwave ovens with an energy factor of 0.586. For those consumers already purchas ing products with a standby pow er consumption of 2.0 Watts (34.6 percent market share at TSL 1b) and 1.5 Watts (19.2 market sh are at TSL 2b), DOE estimated that these consumers would be unaff ected as they already owned microwave ovens with an energy consumption lower than TSL 1a.
Table 11.2.8 shows the resulting shipment-wei ghted efficiency for the energy factor, standby power, and annual energy use for each standard level considered.

Table 11.2.8 Microwave Ovens: Base Case and Standards Case Efficiency Distributions by Energy Factor Level in 2012

TSL EF Standby Power

(W) Annual Energy

Use (kWh/yr) Market Shares

Base Case Trial Standard Level

1a 2a 3a 4a 1b 2b 3b 4b Baseline 0.557 4.0 165.8 46.2%

- - - - - - - - 1a 0.586 4.0 159.3 0% 46.2%

- - - - - - - 2a 0.588 4.0 158.8 0% 0% 46.2%

- - - - - - 3a 0.597 4.0 157.0 0% 0% 0% 46.2%

- - - - - 4a 0.602 4.0 156.0 0% 0% 0% 0% 46.2%

- - - - 1b 0.557 2.0 148.4 34.6% 34.6% 34.6% 34.6% 34.6% 80.8%

- - - 2b 0.557 1.5 144.0 19.2% 19.2% 19.2% 19.2% 19.2% 19.2% 100%

- - 3b 0.557 1.0 139.7 0% 0% 0% 0% 0% 0% 0% 100%

- 4b 0.557 0.02 131.2 0% 0% 0% 0% 0% 0% 0% 0% 100% SWEF (EF) 0.557 0.586 0.588 0.597 0.602 0.557 0.557 0.557 0.557 SWEF (Standby Power) 2.83 2.83 2.83 2.83 2.83 1.90 1.50 1.00 0.02 SWEF (Annual Energy Use) 155.6 152.6 152.4 151.5 151.1 147.6 144.0 139.7 131.2



### Based on the assumption of a zero-percent growth rate in the forecasted efficiencies for the base case and all standard s cases, DOE maintained the SW EFs shown above in Table 11.2.8 throughout the entire forecast period, i.e., from 2012 to 2042.

11.2.3 Commercial Clothes Washers DOE first presented the market share of efficiencies in the base case for commercial clothes washers in section 8.2.6.4 of Chapter 8, LCC and PBP Analysis . Tables 11.2.9 and

11-8

### 11.2.10 show the base case and TSL product effi ciency distributions in the year 2012, corresponding to the modified energy factor (M EF) and water factor (WF) of top-loading and front-loading clothes washing equipment, respec tively, that DOE used in its national impact analysis for commercial clothes washers. The TSLs are comprised of the candidate standard levels analyzed in the LCC and PBP Analysis. The TSLs are also shown in Tables 11.2.9 and 11.2.10. Note that DOE considered all the candida te standard levels in the TSLs that it developed for commercial clothes washers. Al so included in the table below is the SWEF associated with the base case and each TSL.

Table 11.2.9 Top-Loading Commercial Clothes Washers : Base Case and Standards Case Efficiency Distributions in 2012

CSL TSL Efficiencies Market Shares

Base Case Trial Standard Level MEF WF 1 2 3 4 5 Baseline

- 1.26 9.50 63.6%

- - - - - 1 1 1.42 9.50 33.3% 97.0%

- - - - 2 2 1.60 8.50 0.0% 0% 97.0%

- - - 3 3, 4, 5 1.76 8.30 3.0% 3.0% 3.0% 100% 100% 100% SWEF (MEF) 1.33 1.43 1.60 1.76 1.76 1.76

SWEF (WF) 9.46 9.46 8.49 8.30 8.30 8.30



### Table 11.2.10 Front-Loading Commercial Clothes Wash ers: Base Case and Standards Case Efficiency Distributions in 2012

CSL TSL Efficiencies Market Shares

Base Case Trial Standard Level MEF WF 1 2 3 4 5 Baselin

e - 1.72 8.00 7.4%

- - - - -
1 1 1.80 7.50 4.4% 11.8%

- - - - 2 2, 3 2.00 5.50 85.3% 85.3% 97.0% 97.0%

- - 3 4 2.20 5.10 1.5% 1.5% 1.5% 1.5% 98.5%

- 4 5 2.35 4.40 1.5% 1.5% 1.5% 1.5% 1.5% 100% SWEF (MEF) 1.98 1.98 2.01 2.01 2.20 2.35

SWEF (WF) 5.75 5.71 5.48 5.48 5.09 4.40



### Based on the assumption of a zero-percent growth rate in the forecasted efficiencies for the base case and all standard s cases, DOE maintained the SW EFs shown above in Table 11.2.9 throughout the entire forecast period, i.e., from 2012 to 2042.

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### 11.3 NATIONAL ENERGY SAVINGS

11.3.1 NES Definition As shown in the following equation, DOE cal culates annual national energy savings as the difference between two projections: a base case (without new standards) and a standards case (with new standards). Positi ve values of NES correspond to energy savings (i.e., national energy consumption with standards is less than national energy consumption in the base case).

_ 

### NES y 

### = AEC AEC BASE STD


### Cumulative energy savings are the sum over the forecast period, extending from the assumed effective date, i.e., 2012, to 30 years afte r the effective date, i. e., 2042, of the annual national energy savings. This calculation is represented by the following equation:



### NES cum 

### = 

# ∑ NES y


### DOE calculated the national annual energy consumption by multiplying the number or stock of the given product (by vi ntage) by its unit energy consumption (also by vintage). The calculation of the national annual energy consumption is represented by the following equation:



### AEC = 

# ∑ STOCK V 

### × UEC V


### For the above expressions, DOE define d the various quantities as follows:

AEC 

### = Annual national energy consumption each year in quadrillion British thermal units (Btus) – or quads, summed over vintages of the product stock, STOCK V 

### , NES 

### = Annual national energy savings (quads), STOCK V



### = Stock of product (millions of units) of vintage V 

### surviving in the year for which DOE calculated annual energy cons umption (vintages range from five to approximately 28 years, depending on the retirement function of the product), UEC V 

### = Annual energy consumption per pro duct in either kilowatt-hours (kWh) or million Btus (MMBtu) (electricity and gas consumption are converted from site energy to source energy (qua ds) by applying a time-dependent conversion factor), V



### = Year in which the product was purchased as a new unit, and y 

### = Year in the forecast (i.e., 2012 to 2042).
The stock of equipment is dependent on annual shipments and the lifetime of the equipment. As described in Chapter 10, DOE conducted shipments projec tions under the base case and standards cases. DOE determined that the shipments projections under the standards

11-10

### cases were slightly lower than those in the base case projection, due to the higher purchase prices of the more-efficient equipment. In other word s, DOE believes that the higher purchase prices would cause some consumers to forego new equipment purchases.
Due to the drop in shipments caused by sta ndards, for microwave ovens, DOE used the standards case shipments projecti on and, in turn, the st andards case stock, to calculate the annual energy consumption in the base case to avoi d the inclusion of savings due to displaced shipments. However, in the case of commercial clothes washers, because DOE explicitly accounted for the energy and water consumption of the displaced shipments, it maintained the use of the base case shipments to determine the annual energy consumption in the base case. For commercial clothes washers, DOE assumed that any drop in shipments caused by standards would result in the purchase of used machines. Finally, in the case of electric and gas cooking products, because the housing market is fully saturated (i.e., all households have cooking appliances), DOE assumed that standards would neither impact shipments nor cause shifts in electric and gas cooking product market shares. Therefore, DOE’s pr ojected standards case shipments for electric and gas cooking products were identical to its base case shipments.

11.3.2 NES Inputs 

### Table 11.3.1 lists the inputs for the determination of NES.

Table 11.3.1 National Energy Saving Inputs Annual Energy Consumption per Unit ( UEC ) Shipments Equipment Stock ( STOCK V

) National Annual Energy Consumption ( AEC ) Site-to-Source Conversion Factor ( src_conv )



### 11.3.2.1 Annual Energy Consumption per Unit 

### For each of the considered products, DOE presented the per-unit annual energy (and water) consumption as a function of product effici ency in both Chapter 6, Energy and Water Use Determination, and section 8.2.2.1 of Chapter 8, LCC and PBP Analysis. Because the per-unit annual energy (and water) consumption is directly dependent on efficiency, DOE used the base case and standards case SWEFs presented above in section 10.2, in combination with the annual energy (and water use) data presented in Chapte rs 6 and 8, to estimate the shipment-weighted average annual per-unit energy (and water) consump tion under the base case and standards cases. The following sections describe the shipment -weighted average annual per-unit energy (and water) consumption for each of the considered products.
Cooking Products – Cooktops and Ovens 

### DOE based its per-unit annual energy c onsumption of cooktops and ovens on data presented in section 8.2.2.1 of Chapter 8. Using the relationship be tween cooktop and oven EF and annual energy consumption described in Chapte r 8, Tables 11.3.2 and 11.3.3 present the per11-11

### unit annual energy consumption based on the SW EFs corresponding to the base case and each candidate standard level for each of the three product classes of cooktops and the four product classes of ovens.

Table 11.3.2 Cooktops: Base Case and Standard s Case Shipment-Weighted Average PerUnit Annual Energy Consumption in 2012

Product Class Base Case Candidate Standard Level 1 2

Electric Coil SWEF (EF) 0.737 0.769 Electric (kWh/yr) 128.2 122.9

Electric Smooth SWEF (EF) 0.742 0.753 Electric (kWh/yr) 128.2 126.3

Gas SWEF (EF) 0.379 0.399 0.420 Gas (MMBtu/yr) 0.83 0.72 0.68



### Table 11.3.3 Ovens: Base Case and Standards Case Shipment-Weighted Average PerUnit Annual Energy Consumption in 2012

Product Class Base Case Candidate Standard Level 1* 2 3 4 5 6 1a*
Electric Standard SWEF (EF) 0.1066 0.1113 0.1163 0.1181 0.1206 0.1209 Electric (kWh/yr) 166.5 160.1 153.9 151.8 149.0 148.6
Electric SelfClean SWEF (EF) 0.1099 0.1102 0.1123 Electric (kWh/yr) 171.0 170.6 167.9 SWEF (EF) 0.0498 0.0540 0.0566 0.0572 0.0593 0.0596 0.0600 0.0548 Gas Standard Electric (kWh/yr) 15.7 19.4 21.1 21.1 22.9 22.9 22.9 15.7 Gas (MMBtu/yr) 1.02 0.84 0.80 0.79 0.75 0.75 0.74 0.84

Gas Self-Clean SWEF (EF) 0.0540 0.0625 0.0627 0.0632 Electric (kWh/yr) 53.33 55.13 55.13 55.13 Gas (MMBtu/yr) 0.86 0.73 0.73 0.72
* For gas standard ovens, levels 1 and 1a correspond to designs that are utilized for the same purpose—eliminate

the need for a standing pilot—but the te chnologies for each design are differen t. Level 1 is a hot surface ignition device while level 1a is a spark ignition device.


### For all classes except gas cooktops and standa rd ovens, as noted above in section 11.2, DOE assumed that forecasted effi ciencies in the base case and st andards cases remain frozen at the efficiency levels in 2012. Therefore, b ecause the per-unit annual energy consumption is a function of efficiency, DOE held the values shown above in Tables 11.3.2 and 11.3.3 constant over the forecast period (2012–2042).

11-12Standard Oven - Gas Use Standard Oven - Elec Use 

### For gas cooktops and standard ovens, DOE track ed the percentage of gas standard ranges (which are composed of a cooktop and standard oven) with standing pilots. Because the percentage of ranges with sta nding pilots changes over time (a s shown above in section 11.2, Figure 11.2.1), the base case annua l energy consumption will change over time as well. Figure 11.3.1 shows how the annual gas energy use for bo th base case gas cooktops and gas standard ovens decreases over time as more gas standard ranges are forecaste d to be shipped with pilotless ignition. Also note in Figure 11.3.1 that, becau se standard ovens without standing pilots are assumed to use globar ignition devices that us e a non-significant amount of electricity, the amount of electricity use for sta ndard ovens increases over time.

1.00 Cooktop - Gas Use

0.95 18.5

0.90 18.0 19.0Base Case Gas Cooktop and GasStandard Oven Annual Energy UseBase Case Gas Standard OvenElectrical Annual Energy Use (kWh)(MMBtu)
0.85

0.80 17.0

0.75 16.5

0.70 16.0 17.5

2010 2015 2020 2025 2030 2035 2040 2045
Year


### Figure 11.3.1 Gas Cooktops and Gas Standard Ovens: Forecasted Base Case Annual Energy Consumption



### DOE assumed that forecasted efficiencies for gas cooktops and standard ovens in the standards cases remain frozen at the efficiency levels in 2012. Therefor e, because the per-unit annual energy consumption is a f unction of efficiency, DOE held the gas cooktop and standard oven values shown above in Tables 11.3.2 a nd 11.3.3 constant over the forecast period (2012– 2042) for all standards cases.
Cooking Products – Microwave Ovens 

### DOE based its per-unit annual energy c onsumption of microwave ovens on data presented in section 8.2.2.1 of Chapter 8. Using the relationship between microwave oven EF, standby power, and annual energy consumption descri bed in Chapter 8, Table 11.3.4 presents the per-unit annual energy consumption based on th e SWEFs and shipment-w eighted standby power corresponding to the base case and each TSL.

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### Table 11.3.4 Microwave Ovens: Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy Consumption in 2012
Base Case Trial Standard Level 1a 2a 3a 4a 1b 2b 3b 4b SWEF (EF) 0.557 0.586 0.588 0.597 0.602 0.557 0.557 0.557 0.557 SWEF (Standby Power) 2.83 2.83 2.83 2.83 2.83 1.90 1.50 1.00 0.02
Annual Energy Use (kWh/yr) 155.6 152.6 152.4 151.5 151.1 147.6 144.0 139.7 131.2



### As noted above in section 11.2, DOE assumed that forecasted efficiencies in the base case and standards cases remain frozen at the effi ciency levels in 2012. Therefore, because the per-unit annual energy consumption is a functio n of efficiency, DOE held the values shown above in Table 11.3.4 constant over the forecast period (2012–2042).

Commercial Clothes Washers 

### DOE based its per-unit annual energy and water consumption of commercial clothes washers on data presented in section 8.2.2.1 of Chapter 8. Using the relationship between clothes washer MEF and WF and annual energy a nd water consumption described in Chapter 8, Tables 11.3.5 and 11.3.6 present the per-unit an nual electrical and gas energy use, and water consumption, based on the SWEFs corresponding to the base case and each TSL for top-loading and front-loading washers, respectively. Because establishments that use commercial clothes washers use either electric or gas water heaters and dryers, the per-unit annual energy use values in the table below are provided by fuel type. The energy and wate r use values shown in Tables 11.3.5 and 11.3.6 are weighted-average values re flecting the market share of washers in multifamily buildings (85 percent) and laundromats (15 percent), as provided by the Consortium for Energy Efficiency (CEE). 1 

### The water heating and drying en ergy consumption data reflect the percentage of gas and electric water heaters and dryers in the combined multi-family and laundromat market. Based on data from the CEE, in the combined market, 17 and 83 percent of water heaters are electric and gas, respectively, while 34 and 66 percent of dryers are electric and gas, respectively. 1



### Table 11.3.5 Top-Loading Commercial Clothes Washers : Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy and Water Consumption in 2012
Base Trial Standard Level Case 1 2 3 4 5 SWEF (MEF) 1.33 1.43 1.60 1.76 1.76 1.76

SWEF (WF) 9.46 9.46 8.49 8.30 8.30 8.30 Annual Energy Use Electric (kWh/yr) 946 899 810 759 759 759 Gas (MMBtu/yr) 8.25 7.49 6.58 5.88 5.88 5.88 Annual Water Use (1000 gal/ yr) 36.8 36.8 33.0 29.1 32.2 32.2

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### Table 11.3.6 Front-Loading Commercial Clothes Wash ers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Annual Energy and Water Consumption in 2012
Base Case Trial Standard Level 1 2 3 4 5 SWEF (MEF) 1.98 1.98 2.01 2.01 2.20 2.35

SWEF (WF) 5.75 5.71 5.48 5.48 5.09 4.40 Annual Energy Use Electric (kWh/yr) 698 696 690 690 642 610 Gas (MMBtu/yr) 5.12 5.10 5.02 5.02 4.51 4.19 Annual Water Use (1000 gal/ yr) 22.3 22.2 21.3 21.3 19.8 17.1



### As noted above in section 11.2, DOE assumed that forecasted efficiencies in the base case and standards cases remain frozen at the effi ciency levels in 2012. Therefore, because the per-unit annual energy and water consumption are a function of efficiency, DOE held the values shown above in Tables 11.3.5 and 11.3.6 constant over the forecast period (2012–2042).
As described in section 10.4 of Chapter 10, Shipments Analysis, DOE forecasted a slight drop in commercial clothes washer shipment s due to purchase price increases caused by standards-related efficiency increases. DOE a ssumed that those establishments forgoing the purchase of a commercial clothes washer due to standards would instead purchase a used clothes washer with an efficiency equal to the baseline level, i.e., 1.26 MEF/9.5 WF for top-loading washers and 1.72 MEF/8.0 WF fo r front-loading washers. In the NIA Model for commercial clothes washers, DOE accounted for the number of used washers purchased in order to quantify the energy and water impacts of those establishments that were estimated to forgo a new commercial clothes washer purchase.

11.3.2.2 Shipments 

### DOE forecasted shipments for the base case and all standards cases. Several factors, including total installed costs (purchase price pl us installation costs), op erating cost, household income, and equipment lifetime, all impact foreca sted shipments. Of the above factors, total installed cost was the primary driver in forecas ting the impact of standards on shipments. As noted earlier, the increased total installed cost of more-efficient equipment causes some customers to forego equipment purchases. C onsequently, shipments forecasted under the standards cases are lowe r than under the base case. An ex tensive description of the methodology for conducting and generating the shipments forecasts for each of the considered products can be found in Chapter 10, Shipments Analysis.

11.3.2.3 Equipment Stock 

### The equipment stock in a given year is th e number of products shipped from earlier years that survive in the given year. The NIA Models keep track of the number of units shipped each year. DOE assumes that the products have an increasing probability of reti ring as they age. The

11-15

### probability of survival as a function of years-si nce-purchase is the survival function. See the specific product sections in Chapter 10, Shipment s Analysis, for further details on the survival functions that DOE used in its analysis.

11.3.2.4 National Annual Energy Consumption 

### The national annual energy consumption is the product of the annual energy consumption per unit and the number of units of each vintage. This approach accounts for differences in unit energy consumption from year to year. Th e equation for determining the annual energy consumption was shown above in secti on 11.3.1 and is repeated below.

AEC 

### = 

# ∑ STOCK V 

### × UEC V


### In determining national annual energy consum ption, DOE initially calculated the annual energy consumption at the site, and then applied a conversion factor to calculate primary energy consumption (see section 11.3.2.5).

11.3.2.5 Energy Site-to-Source Conversion Factors 

### In determining national annual energy consum ption, DOE initially calculated the annual energy consumption at the site (e.g., for elect ricity, the energy in kWh consumed at the household or establishment). It then calculated primary (source) energy consumption from site energy consumption by applying a conversion factor to account fo r losses associated with the generation, transmission, and distribution of elec tricity and gas. The site-to-source conversion factor is the multiplicative factor used for conve rting site energy consumption into primary or source energy consumption, expressed in quads . DOE used annual si te-to-source conversion factors based on the version of the National En ergy Modeling System (NEMS) that corresponds to EIA’s Annual Energy Outlook 2008 

### ( AEO2008 

### ). The factors used are marginal values, which represent the response of the syst em to an incremental decrease in consumption. Natural gas losses include pipeline leakage, pumping energy, and transportation fuel. The AEO2008 

### forecasts losses of about seven percent for the na tural gas used on site, with only slight variation from year to year. For electricity, the conve rsion factors vary over time, due to projected changes in generation sources (i.e ., the power plant type s projected to provide electricity to the country). DOE assumed that conversion factors remain constant at 2030 values throughout the remainder of the forecast. Table 11.3.7 shows the site-to-source conversion factors from 2005 to the end of the forecast period (2042).

11-16

### Table 11.3.7 Site-to-Source Conversion Factors for Electricity and Natural Gas

Year Electricity Btu/kWh Natural Gas Btu/Btu Year Electricity Btu/kWh Natural Gas Btu/Btu 2005 11500 1.097 2019 8300 1.087 2006 11500 1.066 2020 8088 1.091 2007 11200 1.086 2021 8088 1.093 2008 10250 1.082 2022 7949 1.094 2009 10000 1.084 2023 7200 1.094 2010 10000 1.086 2024 6966 1.094 2011 10000 1.086 2025 6500 1.095 2012 10000 1.086 2026 6309 1.095 2013 10000 1.086 2027 6309 1.095 2014 10000 1.086 2028 6309 1.096 2015 10000 1.086 2029 6309 1.096 2016 10000 1.086 2030 6309 1.096 2017 9700 1.086 2031–2042 6309 1.096 2018 9000 1.087 Source: NEMS, 2006.



### 11.4 NET PRESENT VALUE

11.4.1 NPV Definition 

### The NPV is the value in the present of a tim e series of costs and savings. The NPV is described by the equation:

_ 

### NPV = PVS PVC

where:

PVS 

### = Present value of operating cost saving s (including energy, water, repair, and maintenance costs), and PVC 

### = Present value of increased total in stalled costs (including equipment and installation).
DOE determined the PVS and PVC according to the following expressions:

PVS = 

# ∑ OCS y 

### × DF y

11-17

### PVC = 

# ∑ TIC y 

### × DF y


### DOE calculated the total annual operating cost savings by multiplying the number or stock of the given product (by vi ntage) by its per-unit operating co st savings (also by vintage). DOE calculated the total annual installed cost increases by multiplying the number or stock of the given product (by vintage) by its per-unit total installed cost increase (also by vintage). The calculation of the annual operating costs savings and total an nual installed cost increases is represented with the following equations:

OCS y 

### = 

# ∑ STOCK V 

### × UOCS V



### TIC y 

### = 

# ∑ STOCK V 

### × UTIC V


### For the above expressions, DOE defined the various quantities as follows:

OCS 

### = Total annual operating cost savings each year summed over vintages of the product stock, STOCK V 

### , TIC 

### = Total annual installed cost increases each year summed over vintages of the product stock, STOCK V 

### , DF = 

### Discount factor in each year, STOCK V



### = Stock of product (millions of units) of vintage V 

### surviving in the year for which DOE calculated annual energy cons umption (vintages range from five to approximately 28 years, depending on the retirement function of the product), UOCS V 

### = Annual operating cost savings per unit, UTIC V 

### = Annual total installe d cost increase per unit, V



### = Year in which the product was purchased as a new unit, and y 

### = Year in the forecast (i.e., 2012 to 2042).

DOE determined the PVC 

### for each year, from the effectiv e date of the standard to the year 2042. It determined the PVS 

### for each year, from the effectiv e date of the standard to the year when units purchased in 2042 retire. DOE calculated costs and savings as the difference between a standards case and a base case (i.e., without new standards).

DOE calculated a discount factor from the di scount rate and the num ber of years between the “present” (i.e., year to which the sum is bei ng discounted) and the year in which the costs and savings occur. The NPV is the sum over time of the discounted net savings.

11.4.2 NPV Inputs 

### Table 11.4.1 summarizes the inputs to the NPV calculation.

11-18

### Table 11.4.1 Net Present Value Inputs Total Installed Cost per Unit Annual Operating Cost Savings per Unit Total Annual Installed Cost Increases Total Annual Operating Costs Discount Factor Present Value of Costs Present Value of Savings



### The increase in the total annual installed cost 

### is equal to the annual change in the per-unit total installed cost (difference between base case and standards case) multiplied by the shipments forecasted in the standards case. As with the ca lculation of the NES, DOE did not calculate total annual installed costs for all of the products usin g base case shipments. Rather, in the case of dehumidifiers and microwave ovens, DOE used th e standards case shipments projection and, in turn, the standards case stock, to calculate the costs to avoid the inclusion of savings due to displaced shipments. In the case of commercial clothes washers, DOE assumed that any drop in shipments caused by standards would result in the purchase of used machines. Electric and gas cooking products are the notable exception. Fo r these products, because the market is fully saturated, DOE assumed that standards would ne ither impact shipments nor cause shifts in electric and gas cooking product market shares . Therefore, for electric and gas cooking products, DOE used the base case shipments to determine costs for all standards cases.

The total annual operating cost savings 

### are equal to the change in the annual operating costs (difference between base case and standards case) per unit multiplied by the shipments forecasted in the standards case. As noted a bove for the calculation of total annual installed costs, DOE did not necessarily ca lculate operating cost savings using the base case shipments. The annual operating cost includes energy, water, repair, and maintenance costs.

11.4.2.1 Total Installed Cost per Unit 

### For each of the considered products, DOE firs t presented the per-unit total installed cost as a function of product efficiency in section 8.2.1 of Chapter 8, LCC and PBP Analysis. Because the per-unit total annual in stalled cost is directly depende nt on efficiency, DOE used the base case and standards case SWEF s presented above in section 11.2, in combination with the total installed costs presented in Chapter 8, to estimate the shipment-weighted average annual per-unit total installed cost under the base case and standards cases. The following sections describe the shipment-weighted average annual per-unit total installed cost for each of the considered products.
Cooking Products – Cooktops and Ovens DOE based its per-unit total in stalled cost of cooktops and ovens on data presented in sections 8.2.1.1 and 8.2.1.2 of Chapter 8. Th e total installed cost includes both the equipment price and the installation cost. For gas cooktops and standard ovens, the installation cost for

11-19

### standard levels beyond the baseline level accounts for consumers that need to install an electrical outlet to accommodate a cooking product that now requires electricity to operate. Details on the determination of this added installation costs and the percentage of consumers that are estimated to need an outlet are provided in sections 8.2. 1.1 for gas cooktops and 8.2.1.2 for gas standard ovens. DOE based average equipment prices on average manufacturer costs multiplied by average overall markup values. Using the rela tionship between cooktop and oven EF and total installed cost presented in Chap ter 8, Tables 11.4.2 and 11.4.3 s how the per-unit total installed cost for cooktops and ovens, respectively, ba sed on the SWEFs correspo nding to the base case and each candidate standard level.

Table 11.4.2 Cooktops: Base Case and Standard s Case Shipment-Weighted Average PerUnit Total Installed Costs in 2012
Product Candidate Standard Level Class Base Case 1 2

Electric Coil SWEF (EF) 0.737 0.769 Total Installed Cost (2006$) $272 $276

Electric Smooth SWEF (EF) 0.742 0.753 Total Installed Cost (2006$) $309 $550

Gas SWEF (EF) 0.379 0.399 0.420 Total Installed Cost (2006$) $385 $391 $420



### Table 11.4.3 Ovens: Base Case and Standards Case Shipment-Weighted Average PerUnit Total Installed Costs in 2012
Product Class Base Case Candidate Standard Level 1* 2 3 4 5 6 1a*

Electric Standard

Electric Self-Clean

Gas Standard SWEF (EF)
Total Installed Cost (2006$) SWEF (EF)
Total Installed Cost (2006$) SWEF (EF) 0.1066
$414

0.1099

$485

0.0498 0.1113
$416

0.1102

$491

0.0540 0.1163
$421

0.1123

$548

0.0566 0.1181
$426

0.0572 0.1206
$484

0.0593 0.1209
$489

0.0596 0.0600 0.0548
Total Installed Cost (2006$) $500 $515 $520 $522 $554 $556 $562 $516

Gas SelfClean SWEF (EF)
Total Installed Cost (2006$) 0.0540
$550 0.0625
$566 0.0627
$573 0.0632
$574

* For gas standard ovens, levels 1 and 1a correspond to designs that are utilized for the same purpose—eliminate

the need for a standing pilot— but the technologies for each design are di fferent. Level 1 is a hot surface ignition device while level 1a is a spark ignition device.

11-20

### For all classes except gas cooktops and standa rd ovens, as noted above in section 11.2, DOE assumed that forecasted effi ciencies in the base case and ca ndidate standard levels remain frozen at the efficiency levels in 2012. Theref ore, because the per-unit to tal installed cost is a function of efficiency, DOE held the values s hown above in Tables 11.4.4 and 11.4.5 constant over the forecast period (2012–2042).
For gas cooktops and standard ovens, DOE track ed the percentage of gas standard ranges (which are composed of a cooktop and standard oven) with standing pilots. Because the percentage of ranges with standing pilots cha nges over time (as shown above in section 11.2, Figure 11.2.1), the base case total installed cost will change over time as well. Figure 11.4.1 shows how the total installed cost for both base case gas c ooktops and gas standard ovens increases over time as more gas standard rang es are forecasted to be shipped with pilotless ignition.

$326.0 $326.5 $327.0 $327.5 $328.0 $328.5

2010 2015 2020 2025 2030 2035 2040 2045
YearBase Case Gas CooktopTotal Installed Cost (2006$)

$445.5 $446.0 $446.5 $447.0 $447.5 $448.0Base Case Gas Standard OvenTotal Installed Cost (2006$) Cooktop
Standard Oven



### Figure 11.4.1 Gas Cooktops and Gas Standard Ovens: Forecasted Base Case Total Installed Costs


### DOE assumed that forecasted efficiencies for gas cooktops and standard ovens in the standards cases remain frozen at the efficiency levels in 2012. Therefore, because the per-unit total installed cost is a func tion of efficiency, DOE held th e gas cooktop and standard oven values shown above in Tables 11.4.2 and 11.4. 3 constant over the forecast period (2012–2042) for all candidate standard levels.

11-21

### Cooking Products – Microwave Ovens DOE based its per-unit total installed cost of microwave ovens on data presented in section 8.2.1.3 of Chapter 8. For microwave ove ns, the total installed cost includes only the equipment price, since the installation cost fo r these products is zero. DOE based average equipment prices on average manufacturer costs multiplied by average overall markup values. Using the relationship between microwave oven EF and total installed cost presented in Chapter 8, Table 11.4.4 shows the per-un it total installed cost for micr owave ovens based on the SWEFs corresponding to the base case and each TSL.

Table 11.4.4 Microwave Ovens: Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012 Base Case Trial Standard Level 1a 2a 3a 4a 1b 2b 3b 4b SWEF (EF) 0.557 0.586 0.588 0.597 0.602 0.557 0.557 0.557 0.557 SWEF (Standby Power) 4.0 4.0 4.0 4.0 4.0 2.0 1.5 1.0 0.02 Total Installed Cost (2006$) $220 $226 $232 $242 $255 $220 $221 $222 $228



### As noted above in section 11.2, DOE assumed that forecasted efficiencies in the base case and TSLs remain frozen at the efficiency levels in 2012. Therefor e, because the per-unit total installed costs are a function of efficien cy, DOE held the values shown above in Table 11.4.4 constant over the forecast period (2012–2042).

Commercial Clothes Washers DOE based its per-unit total installed cost of commercial clothes washers on data presented in section 8.2.1.4 of Chapter 8. Th e total installed cost includes both the equipment price and the installation cost. DOE based av erage equipment prices on average manufacturer costs multiplied by average overall markup values. Using the relationship between commercial clothes washer MEF and WF and total installed co st presented in Chapter 8, Tables 11.4.5 and 11.4.6 show the per-unit total in stalled cost based on the SWEFs corresponding to the base case and each TSL for top-loading and fr ont-loading washers, respectively.

Table 11.4.5 Top-Loading Commercial Clothes Washers : Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012 Trial Standard Level Base Case 1 2 3 4 5 SWEF (MEF) 1.33 1.43 1.60 1.76 1.76 1.76

SWEF (WF) 9.46 9.46 8.49 8.30 8.30 8.30 Total Installed Cost (2006$) $781 $857 $942 $964 $964 $964

11-22

### Table 11.4.6 Front-Loading Commercial Clothes Wash ers: Base Case and Standards Case Shipment-Weighted Average Per-Unit Total Installed Costs in 2012

Base Case Trial Standard Level 1 2 3 4 5 SWEF (MEF) 1.98 1.98 2.01 2.01 2.20 2.35

SWEF (WF) 5.75 5.71 5.48 5.48 5.09 4.40 Total Installed Cost (2006$) $1,339 $1,339 $1,341 $1,341 $1,379 $1,419



### As noted above in section 11.2, DOE assumed that forecasted efficiencies in the base case and TSLs remain frozen at the efficiency levels in 2012. Therefor e, because the per-unit total installed costs are a func tion of efficiency, DOE held the values shown above in Table 11.4.5 constant over the forecast period (2012–2042).

11.4.2.2 Annual Operating Cost Savings per Unit 

### The per-unit annual operating cost includes th e energy, water, repair, and maintenance costs.
Annual Energy and Water Costs DOE determined the per-unit annual energy a nd water cost savings by taking the per-unit annual energy (and water) consumption savings developed for each product and multiplying it by the appropriate energy (and water) price.
For all of the considered products, estimat es of the per-unit an nual energy (and water) consumption for the base case and each standards cas e were presented earlier in section 11.3.2.1. As described previously, DOE forecasted the per-unit annual energy (and water) consumption for the base case and each standards case for al l products by freezing the consumption at levels estimated for the year 2012. a



### Energy and water prices are described in se ction 8.2.2.2 of Chapter 8. DOE forecasted energy prices based on EIA’s AEO2008 

### . DOE forecasted water prices based on trends in the national water price index as provided by the Bur eau of Labor Statistics. The energy and water price trends are described in se ction 8.2.2.3 of Chapter 8.
Annual Repair and Maintenance Costs As described in section 8.2.2.4 of Chap ter 8, DOE estimated increased repair and maintenance costs for gas cooktops, gas standard ovens, and commercial clothes washers. DOE assumed no increase in repair and maintenance costs due to st andards for all electric cooking products (including microwave ovens ), and gas self-cleaning ovens.

a The one exception pertains to the base case per-unit annual energy consumption of gas cooktops and gas standard

ovens.

11-23

### For gas cooktops and gas standard ovens, DOE determined the repair and maintenance costs for the three types of ignition systems considered for these products: standing pilot (baseline level), electric glo-bar ignition (candidate standard leve l 1 for standard gas ovens), and electronic spark ignition (candidate standard level 1 for ga s cooktops and candidate standard level 1a for gas standard ovens). For standing pi lot ignition systems, DOE determined that repair and maintenance are needed once every 10 years to clean valves. For electric glo-bar/hot surface ignition systems, the glo-bar requires replacement a pproximately every five years. In the case of electronic ignition systems, contro l modules tend to last 10 years. The electrodes/igniters can fail due to hard contact from pots or pans, alt hough failures are rare. As defined in section 11.4.1, for the calculation of annual operating cost savings, DOE kept track of the vintage of products entering the stock. Therefore, DOE was able to properly account for when gas cooktops and gas standard ovens incurred costs for the repair and maintenance of ignition systems.

For commercial clothes washers, DOE estimat ed that repair costs would increase as a function of equipment efficiency. Using the re lationship between clothes washer MEF and WF and repair described in Chapter 8, Tables 11.4. 7 and 11.4.8 present the pe r-unit annualized repair cost based on the SWEFs corresponding to the ba se case and each TSL for top-loading and frontloading washers, respectively. The repair cost s shown in Tables 11.4.7 and 11.4.8 are weightedaverage values reflecting the market share of wa shers in multi-family buildings (85 percent) and laundromats (15 percent), as provided by th e Consortium for Energy Efficiency (CEE).

Table 11.4.7 Top-Loading Commercial Clothes Washers : Base Case and Standards Case Shipment-Weighted Average Per-Unit Annualized Repair Costs in 2012

Base Case Trial Standard Level 1 2 3 4 5 SWEF (MEF) 1.33 1.43 1.60 1.76 1.76 1.76

SWEF (WF) 9.46 9.46 8.49 8.30 8.30 8.30 Annualized Repair Cost (2006$) $29 $32 $37 $38 $38 $38



### Table 11.4.8 Front-Loading Commercial Clothes Wash ers: Base Case and Standards Case Shipment-Weighted Average Per-Un it Annualized Repair Costs in 2012

Base Case Trial Standard Level 1 2 3 4 5 SWEF (MEF) 1.98 1.98 2.01 2.01 2.20 2.35

SWEF (WF) 5.75 5.71 5.48 5.48 5.09 4.40 Annualized Repair Cost (2006$) $56 $56 $56 $56 $58 $60



### As noted above in section 11.2, DOE assumed that forecasted efficiencies in the base case and TSLs remain frozen at the efficiency levels in 2012. Therefor e, because the per-unit total installed costs are a functi on of efficiency, DOE held the values shown above in Tables 11.4.7 and 11.4.8 constant over the forecast period (2012–2042).

11-24

### 11.4.2.3 Total Annual Installed Cost Increases



### The total annual installed cost increase for any given standa rds case is the product of the total installed cost increase per unit due to the standard and the num ber of units of each vintage. This approach accounts for differences in total installed cost from year to year. The equation for determining the total annual installed cost increase for a given standards case was shown in section 11.4.1 and is repeated below.

TIC = 

# ∑ STOCK V 

### × UTIC V



### As noted earlier for commercial clothes wa shers, DOE accounted fo r the total installed cost of those establishments that were forced into purchasing used clothes washers due to standards. Therefore, the total annual installed cost increase ta kes into account the total installed cost of the used washers that were purcha sed in lieu of the purchase of new washers.

11.4.2.4 Total Annual Operating Cost Savings 

### The total annual operating cost savings for a ny given standards case is the product of the annual operating cost savings per unit due to th e standard and the number of units of each vintage. This approach account s for differences in annual operati ng cost savings from year to year. The equation for determining the total annu al operating cost savings for a given standards case was shown above and is repeated below.

OCS = 

# ∑ STOCK V 

### × UOCS V



### As noted earlier for commercial clothes washers, DOE accounted for the energy and water use of those establishments that were forced into purchasing used washers due to standards. Therefore, the total annual operatin g cost savings take in to account the energy and water costs of the used washers that were purch ased in lieu of the purchase of new washers.

11.4.2.5 Discount Factors 

### DOE multiplies monetary values in future years by a discount factor to determine the present value. The discount factor (DF) is described by the equation:

1 DF =

_ ( y yp ) 

### ( 1+ r )

where:

r 

### = discount rate, y 

### = year of the monetary value, and y P 

### = year in which the present value is being determined.

11-25

### DOE estimated national impacts with both a three-percent and a seven-percent real discount rate as the average real rate of return on pr ivate investment in the U.S. economy. It used these discount rates in accordance with the Office of Management and Budget (OMB)’s guidance to Federal agencies on the development of regulatory analysis (OMB Circular A-4, September 17, 2003), and section E., “Identifying and Measuring Benefits and Costs,” therein. DOE defines the present year as 2007.

11.4.2.6 Present Value of Costs 

### The present value of increased installed costs is the annual installed cost increase in each year (i.e., the difference between the standards ca se and base case), discounted to the present, and summed for the time period over which DOE is considering the installation of equipment (i.e., from the effective date of standards, 2012, to the year 2042).

The increase in total installed cost refers to both equipment cost and installation cost associated with the higher energy efficiency of equipment purchased in the standards case compared to the base case. DOE calculated annua l increases in installed costs as the difference in total installed cost for new equipment purchased each year, multiplied by the shipments in the standards case.

11.4.2.7 Present Value of Savings 

### The present value of operating cost savings is the annual operating cost savings (i.e., the difference between the base case and standards case) discounted to the present, and summed over the period from the effective date, 2012, to the time when the last unit installed in 2042 is retired from service.
Savings are decreases in opera ting costs (including electric ity, repair, and maintenance costs) associated with the highe r energy efficiency of equipment purchased in the standards case compared to the base case. Total annual operating cost savings are the savings per unit multiplied by the number of units of each vintag e surviving in a particular year. Equipment consumes energy over its entire lifetime, and for units purchased in 2042, the consumption includes energy consumed until the unit is retired from service.

11.4.3 Fuel Switching 

### Fuel switching describes the occurrence of consumers switching from a product that consumes one type of fuel to another product that provides the same utility and service but consumes a different fuel. Fuel switching is caused when the purchase price or operating cost of a product is so high that it causes the consumer to alter their pur chase decision and buy the like product that operates off the alternative fuel.

11-26

### As described in Chapter 8, sections 8.2. 1.1 and 8.2.1.2, some gas cooktop and gas standard oven consumers that use products with standing pilot ignition devices would need to install an electrical outl et to accommodate a product that would require electricity to operate. As detailed in Chapter 8, DOE estimated an installati on cost of $235 to install an electrical outlet for a gas cooking product that needed electricity to operate. Becaus e the added installation cost is high, DOE needed to assess whether those gas pr oduct consumers that would need to install an outlet would change their purchase decision and acquire an electric cooking product.
If a consumer were to switch from a gas cooki ng product to an electr ical appliance due to the prospect of this installation cost, an ou tlet would still be needed to accommodate the electrical appliance. Based on the RS Means Mechanical Cost Data, 2008


### , 2 

### the cost of installing only an outlet suitable for an electrical cooki ng appliance, which requires a 50-amp, 240-volt receptacle, is $305 (see Table 11.4.9).

Table 11.4.9 Installation Cost for an Electrical Outlet to accommodate an Electric Cooking Product

Indiv. Line # Description Crew Daily Output PersonHours Unit Mat. Labor Equip. Total Total incl. O&P 2008 Mechanical Cost Data: 2008 Base Costs

4730 Range Outlet, 50 amp240 volt recpt. 30' of #8/3, EMT & wire 1 Elect 2.96 2.703 Ea. $111 $123 $0 $234 $305 Average (2006$)* $305 Total Installation Cost (2006$) $305.00
* Cost in 2008$ assumed to be representative of 2006$. Sources: Bare Costs: RS Means, Mechanical Cost Data, 2008.


### Due to the amperage and voltage requirements of the receptacle as well as the age of the household in which the outlet would be installed (p re-1960), a separate br anch circuit coming off the fuse box or circuit breaker panel would be necessary to accommodate the electrical cooking appliance. Also, because of the additional amperage required by the electrical cooking appliance, it is highly likely that the fuse box or circuit breaker panel would need to be upgraded. Based on material costs from the Craftsman 2008 National Home Improvement Estimator 3 

### and 2008 National Repair & Remodeling Estimator 4 

### and labor costs from the RS Means, Mechanical Cost Data, 2008


### , 2 

### DOE estimated an installation cost of $1247 for installing a branch circuit and upgrading a breaker panel from 50 amps to 100 am ps (see Table 11.4.10). Combined with the $305 installation cost of the recept acle, the total installation cost to accommodate an electrical cooking appliance is estimated to be $1562 or over six times the cost of installing a standard 120-volt outlet for a gas cooking pr oduct. Therefore, there is no financial incentive for a consumer to switch from gas cooking to electric cooking. Thus, DOE believes the probability of fuel switching is so low that DOE is not cons idering it in the national impact analysis of cooktops and ovens.

11-27

### Fuel switching was not considered for either microwave ovens or commercial clothes washers.

Table 11.4.10 Installation Cost for a Branch Circuit to accommodate an Electric Cooking Product

Description 2008 Bare Costs Calculated Values

Qty Crew Labor Hours Unit Mat. Labor (given) Equip. Total (given) Labor Hours (Calc.) Mat. (incl. 10% Profit) Labor (incl O&P) Equip Total incl. O&P Fishing electrical cable through a stud wall (assume 2 foot wired per stud walls) * Job Setup 1 1 Elec 0.270 Ea. $0 $12 $0 $12 0.270 $0 $18 $0 $18.32 per foot of cable fished 20 1 Elec 0.050 LF $0 $2 $0 $2 1.000 $0 $68 $0 $67.87 per electrical box set 1 1 Elec. 0.761 Ea. $0 $35 $0 $35 0.761 $0 $52 $0 $51.65 per stud notched and hole patched 10 1 Elec 0.400 Per Stud $0 $18 $0 $18 4.000 $0 $271 $0 $271.48

Branch Circuit Installation Panel (100 AMP service - 12-circuit, Installation) ** 1 1 Elec 1.600 Ea. $160 $73 $0 $233 1.600 $176 $109 $0 $284.59

Disconnect and remove distribution panel (50-100 Amps, Frame Wall) *** 1 1 Elec. 0.220 Ea. $0 $10 $0 $10 0.220 $0 $15 $0 $14.93

Per Circuit Disconnect *** 10 1 Elec. 0.063 Per Circuit $0 $3 $0 $3 0.630 $0 $43 $0 $42.76

Ground-fault interrupter plug-oncircuit breaker, QOGFI Qwik-Gard®, Square D® (50 AMP, 2 Pole) *** 1 1 Elec. 0.150 $163 $7 $0 $170 0.150 $179 $10 $0 $189.48

Grounding rod with clamp (100 AMP Service Installation) ** 1 1 Elec 2.670 Ea. $16.50 $122 0 $138 2.670 $18 $181 $0 $199.36

Ground Cable (typcical Allowance is 10 LF) ** 10 1 Elec. 0.080 LF $0.18 $4 $0 $4 0.800 $2 $54 $0 $56.28

Electrical Permit Charge ** 1 1 Elec 0.000 CLF $0.00 $0 0 $0 0.000 $0 $0 $0 $50.00
Total Installation Cost (2006$) † $1246.72

* Sources – Labor Hours and Material Costs: Craftsman, National Home Improvement Estimator , 2008; Labor Costs and Overhead & Profit (O&P) Multiplier: RS Means, Mechanical Cost Data, 2008. ** Sources – Labor Hours and Material Costs: Craftsman, Repair and Remodel Estimator , 2008; Labor Costs and Overhead & Profit (O&P) Multiplier: RS Means, Mechanical Cost Data, 2008. *** Sources – Labor Hours and Material Costs: Craftsman, Home Improvement , 2008; Labor Costs and Overhead & Profit (O&P) Multiplier: RS Means, Mechanical Cost Data, 2008. † Cost in 2008$ assumed to be representative of 2006$.

11-28

### 11.5 NES AND NPV RESULTS 

### The NIA Model provides estimates of th e NES and NPV due to various candidate standards levels. The inputs to the NIA Model have been discu ssed earlier in sections 11.3.2 (NES Inputs) and 11.4.2 (NPV Inputs). DOE generated the NES and NPV results using a Microsoft Excel ® 

### spreadsheet, which is accessible on the Internet ( http://www.eere.en ergy.gov/buildings/ appliance_standards/). Detail s and instructions for using the spreadsheet are provided in Appendix 11A.

11.5.1 NES and NPV Input Summary 

### Table 11.5.1 summarizes the inputs to the NI A Model. For each input a brief description of the data source is given.

Table 11.5.1 NES and NPV Inputs Input Data Description Shipments Annual shipments from Shipments Model. (See Chapter 10.) Effective Date of Standard 2012. Base Case Forecasted Efficiencies SWEF determined in the year 2005 for each of the considered products. SWEF held constant ov er forecast period of 2005–2042. (See Section 11.2.) Standards Case Efficiencies Roll-up scenario assu med for determining SWEF in the year 2012 for each standards case and for each of the considered products. SWEF held constant over forecast period of 2012–2042. (S ee Section 11.2.) Annual Energy Consumption per Unit Annual weighted-average values are a function of SWEF. (See Section 11.3.2.1.) Total Installed Cost per Unit Annual weighted-average values are a function of SWEF. (See Section 11.4.2.1.) Energy and Water Cost per Unit Annual weighted-average values are a function of the annual energy consumption per unit and energy (and water) prices. (See Section 8.2.2.3 of Chapter 8 for energy and water prices.) Repair Cost and Maintenance Cost per Unit For gas cooktops and gas standard ovens, repair and maintenance costs specified for different ty pes of ignition systems. For commercial clothes washers, annual weighted-average values are a function of SWEF. For all electric cooking products, including microwave ovens, and gas self-cleaning ovens, no changes in repair and maintenance cost assumed due to standards. (See Section 8.2.2.4 of Chapter 8 for repair and maintenance costs.) Escalation of Energy and Wate r Prices Energy Prices: EIA AEO2008 forecasts (to 2030) and extrapolation to 2042. (See Section 8.2.2.3 of Chapter 8.) Water Prices: Linear extrapolation off historical trend in national water price index. (See Section 8.2.2.3 of Chapter 8.) Energy Site-to-Source Conversion Conversion varies yearly and is generated by DOE/EIA’s NEMS* program (a time series conversion factor; includes electric generation, transmission, and distribution losses). Discount Rate 3 percent and 7 percent real. Present Year Future expenses are discounted to year 2007. * Chapter 14 on the Utility Impact Analysis and the Envi ronmental Assessment Report provide more detail on NEMS.

11-29

### 11.5.2 NES Results 

### The following sections provide NES results (and national water savings (NWS) results for commercial clothes wa shers) for the TSLs analyzed for th e considered products. NES results are cumulative to 2042 and are shown as primary energy savings. NWS results are expressed in billions of gallons. DOE based the inputs to the NIA Model on wei ghted-average values, yielding results that are discrete point values, rath er than a distribution of values as in the LCC and PBP Analysis.

11.5.2.1 Cooking Products – Cooktops and Ovens 

### This section provides NES results for the e fficiency levels considered for the three product classes of cooktops and the four product classes of ovens. Tables 11.5.2 and 11.5.3 show the NES results for the candidate standard levels and TSLs analyzed for cooktops and ovens, respectively.

Table 11.5.2 Cooktops: Cumulative NES Results

CSL Electric Coil Electric Smooth Gas

TSL EF NES quads TSL EF NES quads TSL EF NES Quads Baseline 1 0.737

- 1, 2, 3 0.742

- - 0.156

- 1 2, 3, 4 0.769 0.04 4 0.753 0.02 1, 2, 3 0.399 0.10 2 4 0.420 0.15



### Table 11.5.3 Ovens: Cumulative NES Results

CSL Electric Standard Electric Self-Cle an Gas Standard Gas Self-Clean

TSL EF NES quads TSL EF NES quads TSL EF NES quads TSL EF NES quads
Base 1 0.1066

- 1, 2, 3 0.1099

- - 0.0298

- 1, 2 0.0540

-

1*

- 0.1113 0.03

- 0.1102 0.01

- 0.0536 0.04 3 0.0625 0.09 2 2, 3 0.1163 0.05 4 0.1123 0.04

- 0.0566 0.06

- 0.0627 0.09 3

- 0.1181 0.06

- 0.0572 0.07 4 0.0632 0.10 4

- 0.1206 0.07

- 0.0593 0.08 5 4 0.1209 0.07

- 0.0596 0.09
6 4 0.0600 0.09 1a* 1, 2, 3 0.0583 0.05
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose—eliminate the need for a standi ng pilot—but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because levels 2 through 6 are derived from level 1.


### Tables 11.5.4 and 11.5.5 show the magnitude of the NES if the savings are discounted at rates of seven percent and three percent for cooktops a nd ovens, respectively.

11-30

### Table 11.5.4 Cooktops: Cumulative NES Results Di scounted at Seven Percent and Three Percent Electric Coil Electric Smooth Gas NES ( quads ) NES ( quads ) NES ( quads )

CSL TSL EF 7% disc. 3% disc. TSL EF 7% disc. 3% disc. TSL EF 7% disc. 3% disc. Base 1 0.737 - - 1, 2, 3 0.742 - - - 0.156 - -

1 2, 3, 4 0.769 0.01 0.02 4 0.753 0.00 0.01 1, 2, 3 0.399 0.03 0.05
2 4 0.420 0.04 0.08



### Table 11.5.5 Ovens: Cumulative NES Results Discounted at Seven Percent and Three Percent Electric Standard Electric Self-Cle an Gas Standard Gas Self-Clean NES ( quads ) NES ( quads ) NES ( quads ) NES ( quads )

CSL TSL EF 7% disc. 3% disc. TSL EF 7% disc. 3% disc. TSL EF 7% disc. 3% disc. TSL EF 7% disc. 3% disc. Base 1 0.1066 - - 1,2,3 0.1099 - - - 0.0298 - - 1,2 0.0540 - -

1* - 0.1113 0.01 0.01 - 0.1102 0.00 0.00 - 0.0536 0.01 0.02 3 0.0625 0.02 0.04 2 2, 3 0.1163 0.01 0.03 4 0.1123 0.01 0.02 - 0.0566 0.02 0.03 - 0.0627 0.02 0.05 3 - 0.1181 0.01 0.03 - 0.0572 0.02 0.04 4 0.0632 0.02 0.05 4 - 0.1206 0.02 0.04 - 0.0593 0.02 0.04 5 4 0.1209 0.02 0.04 - 0.0596 0.02 0.04
6 4 0.0600 0.02 0.05
1a* 1,2,3 0.0583 0.01 0.03
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose—eliminate the need for a standi ng pilot—but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because levels 2 through 6 are derived from level 1.



### 11.5.2.2 Cooking Products – Microwave Ovens 

### This section provides NES results for the e fficiency levels considered for microwave ovens. Tables 11.5.6 and 11.5.7 show the NES re sults for the two sets of TSLs analyzed for microwave ovens—one set only for the energy fact or (EF) and one set on ly for standby power.

Table 11.5.6 Microwave Ovens by EF: Cumulative NES Results

TSL EF NES Quads 1a 0.586 0.08 2a 0.588 0.09 3a 0.597 0.11 4a 0.602 0.12

11-31

### Table 11.5.7 Microwave Ovens by Standby Power: Cumulative NES Results

TSL Standby Power Watts NES Quads 1b 2.0 0.23 2b 1.5 0.33 3b 1.0 0.45 4b 0.02 0.69



### Tables 11.5.8 and 11.5.9 showsthe magnitude of the NES if the savings are discounted at rates of seven percent and three percent.

Table 11.5.8 Microwave Ovens by EF: Cumulative NES Results Discounted at Seven Percent and Three Percent

TSL EF NES ( quads ) 7% discounted 3% discounted 1a 0.586 0.02 0.05 2a 0.588 0.02 0.05 3a 0.597 0.03 0.06 4a 0.602 0.03 0.07



### Table 11.5.9 Microwave Ovens by Standby Power: Cumulative NES Results Discounted at Seven Percent and Three Percent

TSL Standby Power Watts NES ( quads ) 7% discounted 3% discounted 1b 2.0 0.06 0.13 2b 1.5 0.09 0.18 3b 1.0 0.12 0.25 4b 0.02 0.19 0.38



### 11.5.2.3 Commercial Clothes Washers 

### This section provides NES and NWS result s for the TSLs considered for commercial clothes washers. Table 11.5.10 shows the NES and NWS results for the TSLs analyzed for commercial clothes washers.

11-32

### Table 11.5.10 Commercial Clothes Washers: Cumulative NES and NWS Results Top-Loading Washers Front-Loading Washers NWS NWS NES billion NES billion CSL TSL MEF/WF quads gallons TSL MEF/WF quads gallons

1 1 1.42/9.50 0.05 0 1 1.80/7.50 0.00 2 2 2 1.60/8.50 0.11 150 2, 3 2.00/5.50 0.00 12 3 3, 4, 5 1.72/8.00 0.15 179 4 2.20/5/10 0.01 30 4 5 2.35/4.40 0.02 60



### Table 11.5.11 shows the magnitude of the NE S and NWS if the savings are discounted at rates of seven percent and three percent.

Table 11.5.11 Commercial Clothes Washers: Cumulative NES and NWS Results Discounted at Seven Percent and Three Percent

CSL Top-Loading Washers Front-Loading Washers

TSL MEF/WF 7% Disc Rate 3% Disc Rate

TSL MEF/WF 7% Disc Rate 3% Disc Rate

NES quads NWS billion gallons NES quads NWS billion gallons NES quads NWS billion gallons NES quads NWS billion gallons
1 1 1.42/9.50 0.01 0 0.03 0 1 1.80/7.50 0.00 0 0.00 1
2 2 1.60/8.50 0.03 38 0.06 80 2, 3 2.00/5.50 0.00 3 0.00 7 3 3, 4, 5 1.72/8.00 0.04 45 0.08 95 4 2.20/5/10 0.00 8 0.01 16
4 5 2.35/4.40 0.00 15 0.01 32



### 11.5.3 Annual Costs and Savings 

### To illustrate the basic inputs to the NP V calculations, Figure 11.5.1 presents the nondiscounted annual installed cost in creases and annual operating cost savings at the national level for TSL 3b for microwave ovens. The figure also shows the net savings, which is the difference between the savings and costs for each year. Th e annual equipment cost is the increase in the total installed cost for products purchased each year over the period 2012–2042. The annual operating cost savings is the savi ngs in operating costs for products operating in each year. The NPV is the difference between the cumulative annual discounted savings and the cumulative annual discounted costs. DOE could create fi gures like the one shown below for each of the considered products’ standard cases.

11-33-0.05 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35

2012 2017 2022 2027 2032 2037 2042 2047 2052

YearBillion of 2006 Dollars Equipment Cost Operating Cost Savings Net Savings



### Figure 11.5.1 Non-Discounted Annual Installe d Cost Increases and Annual Operating Cost Savings for Microwave Ovens, TSL 3b

11.5.4 NPV Results 

### The following sections provide NPV results fo r the candidate standards levels considered for the product classes of each considered product. Results are cumulative and are shown as the discounted value of these savings in dollar term s. DOE based the inputs to the NIA Model on weighted-average values, yielding re sults that are discrete point va lues, rather than a distribution of values as in the LCC and PBP Analysis.
The present value of increased total installed costs is th e total annual installed cost increase (i.e., the difference between the standard s case and base case), discounted to the present, and summed over the time period in which DOE evaluates the impact of standards (i.e., from the effective date of standards, 2012, to the year 2042).
Savings are decreases in opera ting costs (including energy and water) associated with the higher energy efficiency of equipment purchased in the standards case compared to the base case. Total operating cost savings are the savings per unit multiplied by the number of units of each vintage (i.e., the year of ma nufacture) surviving in a particul ar year. Equipment consumes energy and must be maintained ov er its entire lifetime. For un its purchased up through 2042, the operating cost includes energy and water consumed unt il the last unit is retired from service.

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### 11.5.4.1 Cooking Products – Cooktops and Ovens 

### This section provides NPV results based on discount rates of seven percent and three percent for the standard levels considered for cooktops and ovens. Tables 11.5.12 and 11.5.13 show the NPV results for the candidate standa rd levels analyzed for cooktops and ovens, respectively. Under the base case (i.e., without standards), th e cumulative national equipment and operating costs of cooking pr oducts based on a seven-per cent discount ra te equal $61.7 billion and $56.6 billion, respec tively. Based on a three-percent discount rate, the cumulative national equipment and operating costs equal $118. 0 billion and $122.3 bill ion, respectively. Detailed results showing the breakdown of the NPV into national equipment costs and national operating costs are provided in Appendix 11B.

Table 11.5.12 Cooktops: Cumulative NPV Result s based on Seven-Percent and ThreePercent Discount Rates Electric Coil Electric Smooth Gas NPV NPV NPV NPV NPV NPV

CSL TSL EF @ 7% billion 2006$ @ 3% billion 2006$ TSL EF @ 7% billion 2006$ @ 3% billion 2006$ TSL EF @ 7% billion 2006$ @ 3% billion 2006$
Base 1 0.737

- - 1, 2, 3 0.742

- - - 0.156

- -

1 2, 3, 4 0.769 0.07 0.23 4 0.753 -7.26 -13.89 1, 2, 3 0.399 0.19 0.50
2 4 0.420 -0.73 -1.11



### Table 11.5.13 Ovens: Cumulative NPV Results based on Seven-Percent and Three-Percent Discount Rates

CSL Electric Standard Electric Self-Cle an Gas Standard Gas Self-Clean

TSL EF NPV @ 7% billion 2006$ NPV @ 3% billion 2006$ TSL EF NPV @ 7% billion 2006$ NPV @ 3% billion 2006$ TSL EF NPV @ 7% billion 2006$ NPV @ 3% billion 2006$ TSL EF NPV @ 7% billion 2006$ NPV @ 3% billion 2006$
Base 1 0.1066

- - 1,2,3 0.1099

- - - 0.0298

- - 1,2 0.0540

- -

1*

- 0.1113 0.07 0.21

- 0.1102 -0.27 -0.50

- 0.0536 -0.18 -0.34 3 0.0625 -0.01 0.19
2 2, 3 0.1163 0.11 0.34 4 0.1123 -2.77 -5.21

- 0.0566 -0.38 -0.81

- 0.0627 -0.12 -0.01 3

- 0.1181 0.06 0.28

­ 0.0572 -0.38 -0.81 4 0.0632 -0.14 -0.04
4

- 0.1206 -0.74 -1.24

­ 0.0593 -0.82 -1.60 5 4 0.1209 -0.81 -1.37

­ 0.0596 -0.84 -1.64
6 4 0.0600 -0.91 -1.76 1a* 1,2,3 0.0583 0.02 0.11
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same

purpose—eliminate the need for a standi ng pilot—but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because levels 2 through 6 are derived from level 1.

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### 11.5.4.2 Cooking Products – Microwave Ovens 

### This section provides NPV results based on discount rates of seven percent and three percent for the standard levels considered fo r microwave ovens. Tables 11.5.14 and 11.5.14 show the NPV results for the candidate standard levels analyzed for microwave ovens. Under the base case (i.e., without standards), the cumu lative national equipment and operating costs of microwave ovens based on a seven-percent disco unt rate equal $36.4 billion and $22.9 billion, respectively. Based on a three-percent discount rate, the cumulative national equipment and operating costs equal $69.6 billion and $46.4 billion, respectively. Detailed results showing the breakdown of the NPV into national equipment co sts and national operating costs are provided in Appendix 11B.

Table 11.5.14 Microwave Ovens by EF: Cumulative NPV Results based on Seven-Percent and Three-Percent Discount Rates

TSL EF NPV 7% Discount Rate billion 2006$ 3% Discount Rate billion 2006$
1a 0.586 -0.61 -1.07 2a 0.588 -1.60 -2.96 3a 0.597 -3.06 -5.72 4a 0.602 -4.94 -9.28



### Table 11.5.15 Microwave Ovens by Standby Power: Cumulative NPV Results based on Seven-Percent and Three-Percent Discount Rates

TSL Standby Power Watts NPV 7% Discount Rate billion 2006$ 3% Discount Rate billion 2006$
1b 2.0 0.91 2.03 2b 1.5 1.25 2.79 3b 1.0 1.56 3.52 4b 0.02 1.61 3.90



### 11.5.4.3 Commercial Clothes Washers 

### This section provides NPV results based on discount rates of seven percent and three percent for the standard levels considered for commercial clothes washers. Table 11.5.16 shows the NPV results for the candidate standard leve ls analyzed for commercial clothes washers. Under the base case (i.e., without standards) , the cumulative national equipment and operating costs of commercial clothes washers based on a seven-percent discount ra te equal $1.5 billion and $8.4 billion, respectively. Based on a three- percent discount rate, the cumulative national equipment and operating costs equal $2.9 billion and $17.1 billion, respectively. Detailed results showing the breakdown of the NPV into nationa l equipment costs and national operating costs are provided in Appendix 11B.

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### Table 11.5.16 Commercial Clothes Washers: Cumulative NPV Results based on SevenPercent and Three-Percent Discount Rates Top-Loading Washers Front-Loading Washers NPV @

7% Billion NPV @ 3% Billion NPV @ 7% Billion NPV @ 3% Billion CSL TSL MEF/WF 2006$ 2006$ TSL MEF/WF 2006$ 2006$

1 1 1.42/9.50 -0.006 0.03 1 1.80/7.50 0.004 0.01 2 2 1.60/8.50 0.29 0.77 2, 3 2.00/5.50 0.03 0.06 3 3, 4, 5 1.72/8.00 0.43 1.10 4 2.20/5/10 0.07 0.16 4 5 2.35/4.40 0.12 0.29



### 11.6 IMPACT OF STANDARDS ON NA TURAL GAS AND ELECTRICITY PRICES AND ASSOCIATED CONSUMER BENEFITS

11.6.1 Impact on Natural Gas Prices 

### DOE conducted an analysis on the potential impact on natural gas prices resulting from the promulgation of new standards on cooking products and commercial clothes washers at maximum technologically feasible (i.e., “Max Tech ”) standard levels. “Max Tech” standard levels correspond to TSL 4 for cooktops and ovens, TSL 4b for microwave ovens, and TSL 6 for commercial clothes washers. The analysis used a version of NEMS called NEM-BT, modified to account for energy savings associated with the pr oposed standards. As described in Chapter 14 on the utility impact analysis, using NEMS-BT for such an anal ysis typically involves using higher-decrement runs to isolate the impacts of the standards from numerical noise. DOE derived the price effect results associated with the energy savings resulting from the Max Tech standards using a regressed inte rpolation toward the origin.
DOE examined two Max Tech scenarios: one for cooking products consisting of TSL 4 for cooktops and ovens and TSL 4b for microw ave ovens and one for commercial clothes washers consisting of TSL 6.
Figure 11.6.1 shows the change in total natural gas consum ption for the year 2030 (on the x-axis) resulting from Max Tech standard leve ls and the corresponding change in U.S. average wellhead natural gas price (on the y-axis). The points in Figure 11.6.1 that are labeled with “50x”, “60x”, “75x”, “100x” or “12 5x” represent the results for a se ries of higher decrement runs assuming various multiples of the savings resulting from the Max Tech scenarios. Decrement runs for cooking products are labeled as “Cook” while decrement runs for commercial clothes washers are labeled as “CLW”. Each scenario ha s multiple points that represent the results using the Annual Energy Outlook (AEO ) 2008 Reference Case. 5 

### The interpolated results for the Max Tech standard levels are shown in the upper ri ght hand corner of Figure 11.6.1. For the Max Tech standard levels, NEMS predicts that the 2030 average wellhead natural gas price will

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### remain unchanged for both the cooking product and commercial clothes washer standards. As shown in Table 11.6.1, relative to AEO 2008 Re ference Case values, the forecasted wellhead price decline in 2030 is zero percent. Other outputs from NEMS show that the predicted reduction in the average-customer natura l gas price in 2030 is also unchanged. b



### Because the results shown in Table 11.6 .1 show that cooking product and commercial clothes washer energy efficiency standards at the Max Tech level have no impact on average well head prices, efficiency standards for c ooking products and commercial clothes washers, even at the Max Tech level, will have no effect on natural gas consumer prices.

CLW Max Std Cook MaxTech Mar13

100xCLW

50xCook 125xCLW

60xCook

75xCook 

### 0.02

0.00

-0.02

-0.04

-0.06

-0.08

-0.10

-0.12

-0.14

-0.16

-0.18 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 Change in Total Natural Gas Consumption (Quads)



### Figure 11.6.1 Wellhead Natural Gas Price Ch ange in 2030 Resulting from Reduced Natural Gas Consumption Associated with Max Tech Standard LevelsChange in Wellhead Natural Gas Price(2006-$/MBtu)

b The main customer sectors are electric po wer, industry, residential and commercial.

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### Table 11.6.1 Impact of Max Tech Standard Leve ls on Natural Gas Consumption and Average Wellhead Price in 2030 No-Standard Case Max Tech Scenario Result Nat Gas Consumption Nat Gas Price Nat Gas Consumption Change in Consumption Nat Gas Price Change in Price

Quads 2006$/ MMBtu Quads Quads % 2006$/ MMBtu 2006$/ MMBtu % Cooking Product Max Tech 21.4 6.63 21.4 -0.01 -0.1 6.63 0.00 0.0

Commercial Clothes Washer Max Tech 21.4 6.63 21.4 0.00 0.0 6.63 0.00 0.0



### The inverse price elasticity seen in NEMS to estimate the effect of consumption on price varies over the forecast period due to the dynami cs of natural gas supply and demand in NEMS (Figure 11.6.2). c 

### The average value over the forecast period is 0.61 and 0.02 for cooking product standards (labeled as “Cook” in Figure 11.6.2) an d commercial clothes washer standards (labeled as “CLW” in Figure 11.6.2), respectively.

-0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.002015201620172018201920202021202220232024202520262027202820292030



### YearInverse Price Elasticity



### Cook MaxTech CSL CLW MaxTech CSL



### Figure 11.6.2 Inverse Natural Gas Price Elasticity from NEMS Analysis for Cooking Product and Commercia l Clothes Washer Max Tech Standard Levels

c Since the demand reduction in the early years after the st andard takes effect is small, the model results for those years may be less accurate than in later years.

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### The average inverse price elasticity (0.61 and 0.02) reported above is generally consistent with other studies that used various versions of NEMS to examine the impacts to natural gas prices resulting from reductions in natural gas demand. In a revi ew of a number of such studies, Wiser and Bollinger 6 

### examined analyses that reported the reduction in na tional natural gas demand from certain energy policies and the resu lting decline in the wellhead gas price. Examining the average values of the inverse pr ice elasticity over the forecast period in each study, they found the average values to range from 0. 7 to 4.7. It is important to note that the average inverse price elasticities in 13 of 19 analyses were betw een 0.8 and 2.0, and the average value from DOE's current analysis (0.90) falls in the lower end of this range.
Although NEMS provides a detailed charac terization of natural gas supply, it is understandable that NEMS may not accurately repres ent the long-run supply of natural gas of the country since all aspects of the future are not certain. Howeve r, other widely used complex energy demand/supply models produ ce results that are similar to NEMS results, and NEMS is recognized as a reliable analyti cal tool. Table 11.6.2 compares th e results of modeling studies of the response of natural gas price to change in gas consumption. These results are summarized in a 2003 study by Stanford's Energy Modeling Forum. 7 

### While the magnitude of the price response (as summarized by the inverse pr ice elasticity) varies considerab ly among the models reviewed, in general, they confirm that a sizable price im pact is associated with changes in natural gas consumption. d 

### It is worth noting that the NEMS long-run (2020) response is smaller than that of most of the other models.

Table 11.6.2 Implicit Natural Gas Inverse Price El asticity from Seven Energy Models 2005 2010 2015 2020 Average NEMS 1.8 2.2 0.53 0.11 1.2 POEMS 2.4 1.8 2.5 1.8 2.1 CRA 3.5 2.5 1.1 0.9 2.0 NANGAS 5.4 7.0 7.6 5.1 6.3 E2020 1.5 1.0 1.0 0.7 1.1 MARKAL N/A 2.0 N/A 2.1 2.1 NARG 8.7 12.4 5.6 2.4 7.3 NEMS (National Energy Modeling System, 2002); POEM S (Policy Office Electricity Modeling System), CRA (Charles River Associates), NANGAS (North American Natural Gas Analysis System), E2020 (Energy 2020), MARKAL (MARKet ALlocation), NARG (North American Regional Gas model) Source: Based on EMF, 2003



### In addition to the models listed in Table 11.6.2, there exist studies conducted by the National Petroleum Council 8 

### and the National Commission on Energy Policy 9 

### that are based on the EEA model. The EEA model shows higher inverse price elasti cities (between 4.0 and 16.8),

d The EMF scenarios actually modeled the impact of increased gas demand on price. Assuming a smooth supply curve over the long term, however, the elasticities implied by an increase in demand should be essentially equivalent to those implied by a decrease in demand. Two of th e models (NANGAS and NARG) report somewhat anomalous inverse elasticities for undetermined reasons.

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### leading to larger natural gas price reductions for a given demand decrease, than those predicted by NEMS and most of the other national energy models.

11.6.2 Impact on Electricity Prices 

### DOE also conducted an analysis on the potenti al impact on electric ity prices resulting from the promulgation of new standards on cooki ng products and commercial clothes washers at maximum technologically feasible (i.e., “Max Tech ”) standard levels. “Max Tech” standard levels correspond to TSL 4 for cooktops and ovens, TSL 4b for microwave ovens, and TSL 6 for commercial clothes washers. The analysis used a version of NEMS ca lled NEMS-BT, modified to account for energy savings associated with th e proposed standards. Again, using NEMS-BT for such an analysis typically involves using high er-decrement runs to isolate the impacts of the standards from numerical noise. DOE derived the price effect results associated with the energy savings resulting from the Max Tech standards using a regressed in terpolation toward the origin.
DOE examined two Max Tech scenarios: one for cooking products consisting of TSL 4 for cooktops and ovens and TSL 4b for microw ave ovens and one for commercial clothes washers consisting of TSL 6.
Figure 11.6.3 shows the change in total electric power cons umption for the year 2030 (on the x-axis) resulting from Max Tech standard levels and the corresponding change in U.S. average electricity price (on the y- axis). The points in Figure 11.6.3 that are labeled with “50x”, “60x”, “75x”, “100x”, “125x”, or “150x” represent the results for a series of higher decrement runs assuming various multiples of the savings resulting from the Max Tech scenarios. Decrement runs for cooking products are labe led as “Cook” while decrement runs for commercial clothes washers are labeled as “CLW”. Each scenario has multiple points that represent the results usi ng the Annual Energy Outlook (AEO) 2008 Reference Case. 2 

### The interpolated results for the Max Tech standard leve ls are shown in the upper right hand corner of Figure 11.6.3. For the Max Tech standard levels, NEMS predicts that the 2030 average electricity price will remain unchanged fo r both the cooking product and commercial clothes washer standards. As shown in Table 11.6.3, relative to AEO 2008 Reference Case values, the forecasted electricity pric e decline in 2030 is zero percent. Ot her outputs from NEMS show that the predicted reduction in the average-customer electricity price in 2030 is also unchanged. e



### Because the results shown in Table 11.6 .3 show that cooking product and commercial clothes washer energy efficiency standards at the Max Tech level have no impact on average electricity prices, efficiency standards for cooking products and commercial clothes washers, even at the Max Tech level, will have no effect on the average electricit y price to end users.

e The main customer sectors are electric po wer, industry, residential and commercial.

11-41125xCLW 100xCLW

150xCLW

Cook MaxTe Mar13 ch

75xCook 60xCook CLW

50xCook 

### 0.08

0.06

0.04

0.02

0.00 Max Std 

### -0.02

-0.04

-0.06

-0.08Change in Electricity Price (2006$/MBtu)



### -5.0 -4.0 -3.0 -2.0 -1.0 0.0 Change in Total Electricity Consumption (Quads)



### Figure 11.6.3 Electricity Price Change in 2030 Resulting from Reduced Electricity Consumption Associat ed with Max Tech Standard Levels

Table 11.6.3 Impact of Max Tech Standard Levels on Electricity Consumption and Price in 2030 No-Standard Case Max Tech Scenario Result Electricity Consumption Electricity Price Electricity Consumption Change in Consumption Electricity Price Change in Price

Quads 2006$/ MMBtu Quads Quads % 2006$/ MMBtu 2006$/ MMBtu % Cooking Product Max Tech 49.21 25.93 49.20 -0.01 -0.02% 25.93 0.00 0.0

Commercial Clothes Washer Max Tech 49.21 25.93 49.19 -0.02 -0.02% 25.93 0.00 0.0



### The inverse price elasticity seen in NEMS is used to estimate the effect of consumption on price varies over the forecast period due to the dynamics of energy supply and demand in

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### NEMS (Figure 11.6.4). f 

### The average value over the forecast period is 0.67 and 0.30 for cooking product standards (labeled as “Cook” in Figure 11 .6.4) and commercial cl othes washer standards (labeled as “CLW” in Figure 11.6.4), respectively.

-0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.402015201620172018201920202021202220232024202520262027202820292030



### YearInverse Price Elasticity



### Cook MaxTech CSL CLW MaxTech CSL



### Figure 11.6.4 Inverse Electricity Price Elasti city from NEMS Analysis for Cooking Product and Commercia l Clothes Washer Max Tech Standard Levels

f Since the demand reduction in the early years after the st andard takes effect is small, the model results for those years may be less accurate than in later years.

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### REFERENCES

1 

### Consortium for Energy Efficiency. Commercial Family-Sized Washers: An Initiative Description of the Consortium for Energy Efficiency 

### , 1998. Boston, MA.

2 

### RS Means. Mechanical Cost Data, 31 st 

### Annual Edition 

### , 2008. Kingston, MA.

3 

### Craftsman Book Company, 2008 National Home Improvement Estimator 

### . 2008. Carlsbad, CA.

< http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&products_id=396 >

4 

### Craftsman Book Company, 2008 National Repair & Remodeling Estimator 

### . 2008. Carlsbad, CA.

< http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&products_id=400 >

5 

### U.S. Department of Energy - En ergy Information Administration, Annual Energy Outlook 2008 (Revised Early Release) with Projections to 2030 

### . 2008: Washington, DC.
< http://www.eia.doe.gov/oiaf/aeo/ >

6 

### Ryan Wiser, Mark Bolinger, and Matt St. Clair, Easing the Natural Gas Crisis: Reducing Natural Gas Prices through Increased Depl oyment of Renewable Energy and Energy Efficiency 

### . 2005, Lawrence Berkeley National Laboratory.

7 

### Natural Gas, Fuel Diversity and North American Energy markets 

### , Energy Modeling Forum, Stanford University.

8 

### Balancing Natural Gas Policy - Fueling th e Demands of a Growing Economy, Vol. I Summary of Findings and Recommendations 

### , National Petroleum Council.

9 

### National Commission on Energy Policy, Increasing U.S. Natural Gas Supplies: A Discussion Paper and Recommendations from the National Commission on Energy Policy 

### . 2003.

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