[Federal Register Volume 87, Number 65 (Tuesday, April 5, 2022)]
[Rules and Regulations]
[Pages 19595-19613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07138]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 87, No. 65 / Tuesday, April 5, 2022 / Rules 
and Regulations

[[Page 19595]]



DEPARTMENT OF ENERGY

10 CFR Part 435

[EERE-2022-BT-STD-0013]
RIN 1904-AD56


Energy Efficiency Standards for the Design and Construction of 
New Federal Low-Rise Residential Buildings Baseline Standards Update

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

ACTION: Final rule.

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SUMMARY: The U.S. Department of Energy (DOE) is publishing this final 
rule to implement provisions in the Energy Conservation and Production 
Act (ECPA) that require DOE to update the baseline Federal energy 
efficiency performance standards for the construction of new Federal 
low-rise residential buildings. This final rule updates the baseline 
Federal residential standard to the International Code Council (ICC) 
2021 International Energy Conservation Code (IECC).

DATES: This rule is effective June 6, 2022. The incorporation by 
reference of certain material listed in this rule was approved by the 
Director of the Federal Register as of June 6, 2022. The incorporation 
by reference of other material listed in this rule was approved by the 
Director of the Federal Register as of March 13, 2017.
    All Federal agencies shall design new Federal buildings that are 
low-rise residential buildings, for which design for construction began 
on or after April 5, 2023, using the 2021 IECC as the baseline standard 
for 10 CFR part 435.

ADDRESSES: The docket, which includes this Federal Register notice and 
other supporting documents and materials, is available for review at 
www.regulations.gov. All documents in the docket are listed in the 
www.regulations.gov index. However, some documents listed in the index, 
such as those containing information that is exempt from public 
disclosure, may not be publicly available. The www.regulations.gov site 
contains simple instructions on how to access all documents, including 
public comments, in the docket.
    A link to the docket web page can be found at www.energy.gov/eere/femp/notices-and-rules-related-federal-energy-management. This web page 
will contain a link to the docket for this notice on the 
www.regulations.gov site. The www.regulations.gov web page will contain 
simple instructions on how to access all documents, including public 
comments, in the docket.
    For further information on how to review the docket, contact Mr. 
Nicolas Baker at (202) 586-8215 or by email: <a href="/cdn-cgi/l/email-protection#5937303a3635382a773b38323c2b193c3c773d363c773e362f"><span class="__cf_email__" data-cfemail="eb85828884878a98c5898a808e99ab8e8ec58f848ec58c849d">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Mr. Nicolas Baker, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Federal 
Energy Management Program, Mailstop EE-5F, 1000 Independence Avenue SW, 
Washington, DC 20585, (202) 586-8215, email: <a href="/cdn-cgi/l/email-protection#6f01060c00030e1c410d0e040a1d2f0a0a410b000a41080019"><span class="__cf_email__" data-cfemail="b2dcdbd1ddded3c19cd0d3d9d7c0f2d7d79cd6ddd79cd5ddc4">[email protected]</span></a>.
    Mr. Matthew Ring, U.S. Department of Energy, Office of the General 
Counsel, Forrestal Building, GC-33, 1000 Independence Avenue SW, 
Washington, DC 20585, (202) 586-2555, Email: <a href="/cdn-cgi/l/email-protection#84e9e5f0f0ece1f3aaf6edeae3c4ecf5aae0ebe1aae3ebf2"><span class="__cf_email__" data-cfemail="7c111d080814190b520e15121b3c140d52181319521b130a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: DOE maintains previously-approved versions 
and incorporates by reference the following standard into 10 CFR part 
435:
    ICC International Energy Conservation Code (IECC), Redline Version, 
copyright 2021. (IECC 2021).
    Copies of this standard is available from the International Code 
Council, 4051 West Flossmoor Road, Country Club Hills, IL 60478, 1-800-
422-7233, www.iccsafe.org/.
    For a further discussion of this standard see section VII.N of this 
document.

Table of Contents

I. Summary
II. Introduction
III. Synopsis of the Final Rule
    A. Synopsis of Changes to the IECC Between the 2015 and 2021 
IECC
    1. Description of Changes From 2015 IECC to 2018 IECC
    2. Description of Changes From 2018 IECC to 2021 IECC
IV. Methodology, Analytical Results, and Conclusion
    A. Cost-Effectiveness Analysis
    B. Monetization of Emissions Reduction Benefits
    1. Monetization of Greenhouse Gas Emissions
    2. Monetization of Other Air Pollutants
    C. Conclusion
V. Compliance Date
VI. Reference Resources
VII. Regulatory Analysis
    A. Review Under Executive Order 12866, ``Regulatory Planning and 
Review''
    B. Review Under the Administrative Procedure Act
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act of 1995
    E. Review Under the National Environmental Policy Act of 1969
    F. Review Under Executive Order 13132, ``Federalism''
    G. Review Under Executive Order 12988, ``Civil Justice Reform''
    H. Review Under the Unfunded Mandates Reform Act of 1995
    I. Review Under the Treasury and General Government 
Appropriations Act of 1999
    J. Review Under Executive Order 12630, ``Governmental Actions 
and Interference With Constitutionally Protected Property Rights''
    K. Review Under the Treasury and General Government 
Appropriations Act, 2001
    L. Review Under Executive Order 13211, ``Actions Concerning 
Regulations That Significantly Affect Energy Supply, Distribution, 
or Use''
    M. Review Under Section 32 of the Federal Energy Administration 
Act of 1974
    N. Description of Materials Incorporated by Reference
VIII. Congressional Notification
IX. Approval of the Office of the Secretary

I. Summary

    Section 305 of the Energy Conservation and Production Act (ECPA), 
as amended, requires DOE to determine whether the energy efficiency 
standards for new Federal buildings should be updated to reflect 
revisions to the IECC based on the cost-effectiveness of the revisions. 
(42 U.S.C. 6834(a)(3)(B)) In this rulemaking, DOE is updating the 
energy efficiency standards for new Federal low-rise residential 
buildings to IECC 2021 from IECC 2015. Accordingly, DOE conducted a 
cost-effectiveness analysis and determined that the 2021 IECC would be 
cost-effective if applied to new Federal low-rise residential 
buildings. DOE's assumptions and methodology for the cost-effectiveness 
of this rule are based on the cost-effectiveness analysis of the 2021 
IECC

[[Page 19596]]

performed by DOE's state building codes program, as well as DOE's 
environmental assessment (EA) for this rulemaking.\1\ Therefore, in 
this final rule, DOE updates the energy efficiency standards for new 
Federal buildings to the 2021 IECC for buildings for which design for 
construction begins on or after one year following publication of this 
final rule in the Federal Register. (42 U.S.C. 6834 (a)(3)(A))
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    \1\ National Cost-Effectiveness of the Residential Provisions of 
the 2018 IECC, Taylor, ZT. PNNL-28515, Pacific Northwest National 
Laboratory, April 2021. www.energycodes.gov/sites/default/files/2021-07/2018IECC_CE_Residential.pdf.
    National Cost-Effectiveness of the Residential Provisions of the 
2021 IECC, Salcido, VR, Y Chen, Y Xie, and ZT Taylor. PNNL-31019, 
Pacific Northwest National Laboratory, June 2021. 
www.energycodes.gov/sites/default/files/2021-07/2021IECC_CostEffectiveness_Final_Residential.pdf.
    Environmental Assessment for Final Rule, 10 CFR part 435, 
`Energy Efficiency Standards for the Design and Construction of New 
Federal Low-Rise Residential Buildings,' Baseline Standards Update. 
The EA may be found in the docket for this rulemaking and at 
www.energy.gov/nepa/doeea-2166-energy-efficiency-standards-new-federal-low-rise-residential-buildings-baseline.
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II. Introduction

    ECPA, as amended, requires DOE to establish building energy 
efficiency standards for all new Federal buildings. (42 U.S.C. 
6834(a)(1)) The standards established under section 305(a)(1) of ECPA 
must contain energy efficiency measures that are technologically 
feasible, economically justified, and meet the energy efficiency levels 
in the applicable voluntary consensus energy codes specified in section 
305. (42 U.S.C. 6834(a)(1)-(3))
    Under section 305 of ECPA, the referenced voluntary consensus code 
for low-rise residential buildings is the International Code Council 
(ICC) International Energy Conservation Code (IECC). (42 U.S.C. 
6834(a)(2)(A)) DOE codified this referenced code as the baseline 
Federal building standard in its existing energy efficiency standards 
found in 10 CFR part 435. Also pursuant to section 305 of ECPA, DOE 
must establish, by rule, revised Federal building energy efficiency 
performance standards for new Federal buildings that require such 
buildings to be designed to achieve energy consumption levels that are 
at least 30 percent below the levels established in the referenced code 
(baseline Federal building standard), if life-cycle cost (LCC) 
effective. (42 U.S.C. 6834(a)(3)(A)(i)(I))
    Under section 305 of ECPA, not later than one year after the date 
of approval of each subsequent revision of the ASHRAE Standard or the 
IECC, DOE must determine whether to amend the baseline Federal building 
standards with the revised voluntary standard based on the cost-
effectiveness of the revised voluntary standard. (42 U.S.C. 
6834(a)(3)(B)) It is this requirement that this rulemaking addresses. 
ICC has updated the IECC from the version currently referenced in DOE's 
regulations at 10 CFR part 435. In this final rule, DOE revises the 
latest baseline Federal building standard for 10 CFR part 435 from the 
2015 IECC to the 2021 IECC. DOE notes that although ICC published an 
update to the IECC in 2018, this rule updates 10 CFR part 435 to the 
2021 IECC directly, without requiring agencies to comply with the 2018 
IECC. DOE notes, however, that because development of the IECC is 
incremental from version to version, the 2021 IECC does include all 
content in the 2018 IECC that was not specifically removed or modified 
during the development of the 2021 IECC.
    Section 306(a) of ECPA provides that each Federal agency and the 
Architect of the Capitol must adopt procedures to ensure that new 
Federal buildings will meet or exceed the Federal building energy 
efficiency standards established under section 305. (42 U.S.C. 6835(a)) 
Section 306(b) of ECPA bars the head of a Federal agency from expending 
Federal funds for the construction of a new Federal building unless the 
building meets or exceeds the applicable baseline Federal building 
energy standards established under section 305. (42 U.S.C. 6835(b)) 
Specifically, all new Federal buildings must be designed to achieve the 
baseline standards in the IECC for low-rise residential buildings (and 
ASHRAE Standard 90.1 for commercial and multi-family high-rise 
residential buildings) and achieve energy consumption levels at least 
30 percent below these minimum baseline standards, where LCC effective. 
(42 U.S.C. 6834 (a)(3)(A)) When it is not LCC effective to design new 
Federal low-rise residential buildings to exceed IECC performance 
levels by 30 percent, new Federal buildings must be designed to exceed 
the IECC performance levels up to the percentage that is LCC effective, 
but at minimum meets the performance levels of the IECC. (10 CFR 
435.4(c)). These requirements do not extend to renovations or 
modifications to existing buildings.

III. Synopsis of the Final Rule

    DOE is issuing this action as a final rule. As indicated in this 
preamble, DOE must determine whether the energy efficiency standards 
for new Federal buildings should be updated to reflect revisions 
included in the 2021 IECC based on the cost-effectiveness of the 
revisions. (42 U.S.C. 6834(a)(3)(B)) In this final rule, DOE determines 
that the energy efficiency standards for new Federal buildings should 
be updated to reflect the 2021 revisions to the IECC based on the cost-
effectiveness of the revisions.
    DOE reviewed the IECC for DOE's state building codes program and 
determined that the 2021 version of the IECC would achieve greater 
energy efficiency than the prior version (the 2018 version). (See 86 FR 
40529 (July 28, 2021)) DOE also reviewed the 2018 version of the IECC 
and determined that the 2018 version would achieve greater energy 
efficiency than the prior version (the 2015 version currently 
referenced in 10 CFR part 435). (See 82 FR 2867 (January 10, 2017)) 
Both these determinations were subject to notice and comment. See 86 FR 
26710 (May 17, 2021) and 84 FR 18833 (May 2, 2019), respectively, for 
the 2021 IECC and 2018 preliminary determinations. DOE found that the 
2021 version of the IECC would save 8.79 percent more source energy 
than the 2018 version of the IECC \2\ and that the 2018 version of the 
IECC would save 1.91 percent more source energy than the 2015 version 
of the IECC.\3\
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    \2\ Final Determination Regarding Energy Efficiency Improvements 
in the 2021 International Energy Conservation Code (IECC); Notice of 
determination, 86 FR 40529 (July 28, 2021). www.regulations.gov/docket/EERE-2021-BT-DET-0010/document.
    \3\ Final Determination Regarding Energy Efficiency Improvements 
in the 2018 International Energy Conservation Code (IECC); Notice of 
determination, 84 FR 67435 (December 10, 2019). 
www.federalregister.gov/documents/2019/12/10/2019-26550/final-determination-regarding-energy-efficiency-improvements-in-the-2018-international-energy.
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    In DOE's determinations for the State building codes program, and 
again in this rule, DOE states that the cost-effectiveness of revisions 
to the voluntary codes is considered through DOE's statutorily directed 
involvement in the codes process. See 86 FR 40529 (July 28, 2021). 
Section 307 of ECPA requires DOE to participate in the ICC code 
development process and to assist in determining the cost-effectiveness 
of the voluntary standards. (42 U.S.C. 6836) DOE is required to 
periodically review the economic basis of the voluntary building energy 
codes and participate in the industry process for review and 
modification, including seeking adoption of all technologically 
feasible and economically justified energy efficiency measures. (42 
U.S.C. 6836(b))
    In addition to DOE's consideration of the cost-effectiveness of the 
2021 IECC through its participation in the code

[[Page 19597]]

development process, DOE conducted an independent analysis of the cost-
effectiveness of the 2021 IECC compared to the 2018 IECC and 2015 
IECC.\4\ The results of the analysis are discussed in section VII.A of 
this document. DOE's assumptions and methodology for the cost-
effectiveness of this rule are based on DOE's cost-effectiveness 
analysis of the 2018 and 2021 IECC, as well as DOE's EA for this 
rulemaking.\5\
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    \4\ National Cost-Effectiveness of the Residential Provisions of 
the 2018 IECC, Taylor, ZT PNNL-28515, Pacific Northwest National 
Laboratory, April 2021. www.energycodes.gov/sites/default/files/2021-07/2018IECC_CE_Residential.pdf.
    National Cost-Effectiveness of the Residential Provisions of the 
2021 IECC, Salcido, VR, Y Chen, Y Xie, and ZT Taylor. PNNL-31019, 
Pacific Northwest National Laboratory, June 2021. 
www.energycodes.gov/sites/default/files/2021-07/2021IECC_CostEffectiveness_Final_Residential.pdf.
    \5\ Environmental Assessment for Final Rule, 10 CFR part 435, 
`Energy Efficiency Standards for New Federal Low-Rise Residential 
Buildings,' Baseline Standards Update. The EA may be found in the 
docket for this rulemaking and at www.energy.gov/nepa/doeea-2166-energy-efficiency-standards-new-federal-low-rise-residential-buildings-baseline.
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    In this rule, DOE updates the energy efficiency standards 
applicable to new Federal buildings based on the determinations made by 
DOE as to the energy efficiency improvements of the 2018 IECC \6\ and 
2021 IECC,\7\ as compared to the predecessor version (the 2015 IECC), 
and based on the considerations of cost-effectiveness incorporated into 
the codes processes, DOE's involvement in those processes, and DOE's 
own cost-effectiveness analysis. This final rule amends 10 CFR part 435 
to update the referenced baseline Federal energy efficiency performance 
standards. This final rule does not make any changes to the overall 
requirement that agencies must design buildings to meet the baseline 
standard and, if LCC effective, achieve savings of at least 30 percent 
below the baseline standard.
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    \6\ Final Determination Regarding Energy Efficiency Improvements 
in the 2018 International Energy Conservation Code (IECC); Notice of 
determination, 84 FR 67435 (December 10, 2019). 
www.federalregister.gov/documents/2019/12/10/2019-26550/final-determination-regarding-energy-efficiency-improvements-in-the-2018-international-energy.
    \7\ Final Determination Regarding Energy Efficiency Improvements 
in the 2021 International Energy Conservation Code (IECC); Notice of 
determination, 86 FR 40529 (July 28, 2021). www.regulations.gov/docket/EERE-2021-BT-DET-0010/document.
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A. Synopsis of Changes to the IECC Between the 2015 and 2021 IECC

    The IECC is updated every three years by the International Code 
Council (ICC). DOE, as part of its determination process, evaluates 
each new version of the IECC for low-rise residential buildings. The 
summaries in the following sections are taken directly from DOE's 
determinations and supporting analyses for the 2018 IECC \8\ and 2021 
IECC.\9\ Section III.A.1 of this document describes the changes between 
the 2015 IECC and the 2018 IECC and section III.A.2 of this document 
describes the changes between the 2018 IECC and the 2021 IECC.
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    \8\ Final Determination Regarding Energy Efficiency Improvements 
in the 2018 International Energy Conservation Code (IECC); Notice of 
determination, 84 FR 67435 (December 10, 2019). 
www.federalregister.gov/documents/2019/12/10/2019-26550/final-determination-regarding-energy-efficiency-improvements-in-the-2018-international-energy.
    National Cost-Effectiveness of the Residential Provisions of the 
2018 IECC, Taylor, ZT. PNNL-28515, Pacific Northwest National 
Laboratory, April 2021. www.energycodes.gov/sites/default/files/2021-07/2018IECC_CE_Residential.pdf.
    \9\ Final Determination Regarding Energy Efficiency Improvements 
in the 2021 International Energy Conservation Code (IECC); Notice of 
determination, 86 FR 40529 (July 28, 2021) www.regulations.gov/docket/EERE-2021-BT-DET-0010/document.
    National Cost-Effectiveness of the Residential Provisions of the 
2021 IECC, Salcido VR, Y Chen, Y Xie, and ZT Taylor, PNNL-31019, 
Pacific Northwest National Laboratory, June 2021. 
www.energycodes.gov/sites/default/files/2021-07/2021IECC_CostEffectiveness_Final_Residential.pdf.
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1. Description of Changes From 2015 IECC to 2018 IECC
    In creating the 2018 IECC, ICC processed 47 approved code change 
proposals to the 2015 IECC. A total of 14 of these changes were found 
to have a direct impact on energy use and the other 33 changes were 
administrative or had an impact on non-energy portions of the code. DOE 
found that changes resulting in decreased energy use outweigh any 
changes expected to result in increased energy use in residential 
buildings. Of the 47 total changes, 11 were expected to decrease energy 
use, 3 were expected to increase energy use, 30 were administrative, 
and 3 were considered not energy related.
    The 11 changes considered that are expected to decrease energy use 
are the following:
    (1) Requires R-5 insulation under the entire slab when the slab is 
heated. This change will result in reduced heat loss in buildings with 
heated slabs, thereby reducing energy use.
    (2) Lowers fenestration U-factors in climate zones 3-8. This change 
reduces heat loss and gain through doors and windows in six of the 
eight IECC climate zones.
    (3) Corrects an inconsistency in the steel framing R-value 
equivalency table. This change effectively requires an additional R-1 
continuous insulation if R-19 cavity insulation is used, resulting in 
decreased energy use.
    (4) Adds provisions for ducts buried in attic insulation. The 
provisions added address buried ducts as an optional feature.
    (5) Adds heat recovery ventilation (HRV)/energy recovery 
ventilation (ERV)-specific fan-efficacy requirements. This change 
replaces prior efficacy values for generic in-line fans that were 
considered inappropriate when HRV/ERV systems are installed.
    (6) Increases high-efficacy lighting requirements from 75 percent 
to 90 percent of permanently installed lighting fixtures and eliminates 
the option of calculating percentages based on lamp counts instead of 
fixture counts. This change results in reduced energy use in lighting 
and applies to all homes complying with the IECC.
    (7) Updates equation for ventilation fan energy in the Standard 
Reference Design of the simulated performance alternative compliance 
path to reference prescriptive fan-efficacy requirements. The equation 
in the prior code version used a term based on outdated fan efficacies. 
This change reduces energy when compliance is demonstrated using the 
performance path.
    (8) Replaces definition of Energy Rating Index (ERI) with a 
reference to ANSI/RESNET/ICC 301, except for Reference Home ventilation 
rates, which are modified to be consistent with International 
Residential Code (IRC) requirements. This change bases the ERI target 
on the IRC's ventilation rates, which are lower than those in American 
National Standards Institute (ANSI)/Residential Energy Services Network 
(RESNET)/ICC 301. This reduces ventilation energy in homes meeting the 
target in the ERI path.
    (9) Improves mandatory envelope requirements in the ERI compliance 
path for homes with onsite generation. This change strengthens 
mandatory envelope efficiency requirements and prevents degrading 
envelope efficiency in trade for onsite generation.
    (10) Requires new heating, ventilating, and air-conditioning (HVAC) 
systems in additions and alterations to comply with the same 
requirements as systems in new homes. This change will improve 
efficiency in some additions and alterations.
    (11) Modifies and clarifies an exception to the pool cover 
requirements. This change makes a modest increase to the level of site-
recovered energy required to qualify for the exception.
    The three changes that are expected to increase energy use are as 
follows:
    (1) Exempts log homes designed in accordance with ICC-400 from the 
thermal envelope requirements of the

[[Page 19598]]

IECC. This change results in an expected increase in energy use in log 
homes since ICC-400 allows less efficient walls than the IECC.
    (2) Allows buried ducts meeting specified insulation and air-
sealing criteria to be considered equivalent to ducts located entirely 
within conditioned space in the simulated performance alternative 
compliance path. This change increases heat gain/loss into attics 
compared to ducts entirely within conditioned space.
    (3) Raises (relaxes) ERI thresholds. This change allows higher 
energy use in residences under the ERI compliance path.
    The remaining 33 changes were considered administrative in nature 
or were determined to not be energy related. These changes are 
discussed in more detail in Table A.2 of Energy Savings Analysis: 2018 
IECC for Residential Buildings.\10\
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    \10\ www.energycodes.gov/sites/default/files/2021-07/EERE-2018-BT-DET-0014-0008.pdf.
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2. Description of Changes From 2018 IECC to 2021 IECC
    In creating the 2021 IECC, ICC processed 119 approved code change 
proposals to the 2018 IECC. A total of 35 of these changes were found 
to have a direct impact on energy use and the other 79 changes were 
administrative or had an impact on non-energy portions of the code. DOE 
found that changes resulting in decreased energy use outweigh any 
changes expected to result in increased energy use in residential 
buildings. Of the 35 changes that were determined to directly impact 
energy use, 29 were expected to decrease energy use and 6 were expected 
to increase energy use.
    The following 11 changes were determined to result in the bulk of 
the energy savings associated with the 2021 IECC over the 2018 IECC:
    (1) Increases lamp efficacy to 65 lumens per watt and luminaires 
efficacy to 45 lumens per watt.
    (2) Increases efficacy in the definition of high-efficacy lamps to 
70 lumens per watt.
    (3) Increases stringency of wood frame wall R-value requirements in 
climate zones 4 and 5.
    (4) Increases slab insulation R-value requirements and depth in 
climate zones 3-5.
    (5) Increases stringency for ceiling insulation in climate zones 2 
and 3.
    (6) Increases stringency for ceiling insulation in climate zones 4-
8 and adds exception for when there is not space for R-60 in the 
ceiling.
    (7) Increases stringency of fenestration U-factors in climate zones 
3-4.
    (8) Increases whole-house mechanical ventilation system fan 
efficacy requirements for inline fans and bathroom/utility fans.
    (9) Requires ventilation systems to include heat or energy recovery 
in climate zones 7 and 8.
    (10) Requires exterior lighting in R-2, R-3, and R-4 buildings to 
meet Section C405.4 of IECC.
    (11) Adds new section R408, ``Additional Efficiency Package 
Options'' to reduce energy use by 5 percent regardless of the 
compliance path chosen.

IV. Methodology, Analytical Results, and Conclusion

A. Cost-Effectiveness Analysis

    DOE's assumptions and methodology for the cost-effectiveness of 
this rule are based on the cost-effectiveness analysis of the 2018 IECC 
\11\ and 2021 IECC performed by DOE's state building codes program,\12\ 
as well as DOE's EA for this rulemaking.\13\ The EA identified a rate 
of new Federal residential construction of approximately 9.78 million 
square feet per year. This equates to approximately 3,824 new single-
family units (9.60 million square feet) and 153 new low-rise multi-
family residential units (0.19 million square feet) assumed each year. 
As described in the EA, this estimate is derived from consideration of 
data from the Federal Real Property Profile Management System (FRPP MS) 
extraction and Department of Defense estimates of privatized housing. 
DOE's cost-effectiveness analysis of the 2018 IECC provides tables for 
the first cost increase, the energy savings, and the LCCs associated 
with the 2018 IECC versus the 2015 IECC by climate zone. DOE's cost-
effectiveness report does not provide national average values but does 
provide sufficient weighting data so that these national averages can 
be calculated. The weighting data provided in the cost-effectiveness 
report is used to generate the rows labeled ``National Average'' in 
Table IV.1 through Table IV.9 in this preamble.
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    \11\ DOE's cost-effectiveness report on the 2018 IECC is 
``National Cost-Effectiveness of the Residential Provisions of the 
2018 IECC'', PNNL-28515, Taylor, ZT, April 2021. Available at 
www.energycodes.gov/sites/default/files/2021-07/2018IECC_CE_Residential.pdf.
    \12\ DOE's cost-effectiveness report on the 2021 IECC is 
``National Cost-Effectiveness of the Residential Provisions of the 
2021 IECC'', PNNL-31019, Salcido et al, June 2021. Available at 
www.energycodes.gov/sites/default/files/2021-07/2021IECC_CostEffectiveness_Final_Residential.pdf.
    \13\ The EA (DOE/EA-2166) is entitled, ``Environmental 
Assessment for Final Rule, 10 CFR part 435, `Energy Efficiency 
Standards for New Federal Low-Rise Residential Buildings,' Baseline 
Standards Update.'' The EA may be found in the docket for this 
rulemaking and at www.energy.gov/nepa/doeea-2166-energy-efficiency-standards-new-federal-low-rise-residential-buildings-baseline.
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    Table IV.1 lists the increased first costs associated with the 2018 
IECC for a standard 2,376 square feet prototypical home and a standard 
1,200 square feet prototypical apartment/condo building.\14\ \15\ Based 
on historical data as described in the EA, DOE estimates that the 
majority of Federal low-rise residential construction will be single-
family homes built by the Department of Defense (or their privatization 
contractors), along with some single-family homes and Federal low-rise 
multi-family buildings built by other agencies,\16\ so the results of 
DOE's first cost analysis are shown in full. The

[[Page 19599]]

2018 IECC does increase the first cost of construction of new homes and 
apartments/condos compared to the 2015 IECC in all climate zones in the 
United States.
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    \14\ A discussion of the DOE residential prototypes is found in 
DOE's cost-effectiveness report, available at www.energycodes.gov/sites/default/files/2021-07/2021IECC_CostEffectiveness_Final_Residential.pdf.
    \15\ Note that the values in Table VI.1 have been adjusted to 
reflect 2020$ from the table that appears in DOE's determination of 
energy savings for IECC 2018, which were in 2018$. This adjustment 
was made using the GDP deflator value to correct for inflation 
between 2018 and 2020. Organization for Economic Co-operation and 
Development, GDP Implicit Price Deflator in United States, retrieved 
from FRED, Federal Reserve Bank of St. Louis; fred.stlouisfed.org/series/USAGDPDEFAISMEI, Updated February 17, 2021.
    \16\ DOE's main source of Federal construction information, the 
Federal Real Property Profile Management System (FRPP MS), lists 
Family Housing and Barracks/Dormitories as separate categories. DOE 
utilized the Federal Agency information in the FRPP MS to 
disaggregate Federal Dormitories and Barracks to estimate new 
construction of dormitories, which are predominantly residential in 
nature, and training barracks, which include non-residential spaces. 
Department of Defense agencies were assumed to construct training 
barracks, while non-DoD agencies were assumed to construct 
dormitories. DOE utilized Asset Height Range information in the FRPP 
MS to distinguish between low-rise residential construction and 
multi-family high-rise construction by including only buildings 
estimated to be less than 30 feet in height. Once buildings to be 
included had been identified, the FRPP MS data was then used to 
estimate the square footage of buildings in the Federal Dormitories 
and Barracks and Family Housing categories that are assumed to be 
built under 10 CFR part 435 (the subject of this rulemaking) versus 
those more likely to be built under 10 CFR part 433 (New Federal 
Commercial and Multi-Family High-rise Residential). For Family 
Housing, DOE also utilized the square foot information in the FRPP 
MS to develop percentage weights for the Single-Family prototype 
(less than 6,000 square feet) and Low-rise Multi-family Residential 
(6,000 square feet and greater). The square foot demarcation was 
determined using the BECP assumption of approximately 1,200 square 
feet per multi-family housing unit, and an assumption that 5 or more 
housing units would define a multi-family building. While Barracks 
may be envisioned as long low buildings containing rows of cots, 
this vision is driven primarily by old-style barracks from the past. 
DOD's new training barracks tend to combine sleeping accommodations, 
classrooms, and physical training facilities and are therefore 
designed by DOD using the Federal commercial and high-rise multi-
family requirements.

          Table IV.1--Total Incremental Construction First Cost for 2018 IECC Compared to the 2015 IECC
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                                                      2,376 ft\2\ house            1,200 ft\2\ apartment/condo
                                             -------------------------------------------------------------------
                Climate zone                   Slab, unheated                    Slab, unheated
                                                basement, or        Heated        basement, or        Heated
                                                 crawlspace        basement        crawlspace        basement
----------------------------------------------------------------------------------------------------------------
1...........................................                $0              $0                $0              $0
2...........................................                 0               0                 0               0
3...........................................                72             108                56              74
4...........................................                72             108                56              74
5...........................................                48              72                37              49
6...........................................                48              72                37              49
7...........................................                48              72                37              49
8...........................................                48              72                37              49
National Average............................                49              74                38              50
----------------------------------------------------------------------------------------------------------------

    Table IV.2 lists the increased first costs associated with the 2021 
IECC for a standard 2,376 square feet prototypical home and a standard 
1,200 square feet prototypical apartment/condo building. The 2021 IECC 
increases the first cost of construction of new homes and apartments/
condos compared to the 2018 IECC in all climate zones in the United 
States.

         Table IV.2--Total Incremental Construction First Cost * for 2021 IECC Compared to the 2018 IECC
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                          Climate zone                           2,376 ft\2\ house   1,200 ft\2\ apartment/condo
----------------------------------------------------------------------------------------------------------------
1..............................................................               $936                          $933
2..............................................................              1,530                         1,146
3..............................................................              1,859                         1,192
4..............................................................              3,687                         1,533
5..............................................................              3,569                         1,487
6..............................................................              1,477                         1,102
7..............................................................              2,980                         2,603
8..............................................................              2,982                         2,603
National Average...............................................              2,372                         1,316
----------------------------------------------------------------------------------------------------------------
* The 2021 Cost Effectiveness report provides total incremental construction cost increase with no distinction
  made between the foundation type. In this particular transition from IECC 2018 to IECC 2021, the cost increase
  is primarily due to additional insulation requirements, window improvements, efficiency option packages, and
  heat recovery ventilation (only for climate zones 7 and 8).

    Table IV.3 combines the incremental first costs associated with the 
2018 and 2021 versions of the IECC. In addition to adjusting for 
inflation (as was done for the values in Table IV.1), the 2018 IECC 
analysis was adjusted to use the same underlying economic assumptions 
as the 2021 IECC, including fuel prices, fuel price escalations, labor 
and material costs, and sales tax rates.

          Table IV.3--Total Incremental Construction First Cost for 2021 IECC Compared to the 2015 IECC
                                                     [2020$]
----------------------------------------------------------------------------------------------------------------
                          Climate zone                           2,376 ft\2\ house   1,200 ft\2\ apartment/condo
----------------------------------------------------------------------------------------------------------------
1..............................................................               $936                          $933
2..............................................................              1,536                         1,146
3..............................................................              1,938                         1,217
4..............................................................              3,265                         1,386
5..............................................................              3,624                         1,503
6..............................................................              1,531                         1,118
7..............................................................              3,035                         2,620
8..............................................................              3,037                         2,620
National Average...............................................              2,336                         1,294
----------------------------------------------------------------------------------------------------------------


[[Page 19600]]

    The United States Census Bureau tracks information on new home 
sales in the United States. Based on available data, the median price 
of a non-Federal single-family home in the United States in 2020 was 
$336,990.\17\ The national average incremental cost increase of $2,336 
represents approximately 0.7 percent of the median cost of a new home. 
An estimated construction cost of $217 per square foot for new Federal 
dormitories and barracks was obtained from RS Means (2020).\18\ This 
would equate to approximately $260,400 per multi-family unit. The 
national average incremental cost increase of $1,294 represents 
approximately 0.5 percent of the approximate cost per multi-family 
unit. Any increase in first cost would be accompanied by a reduction in 
energy costs and an increase in LCC net savings.
---------------------------------------------------------------------------

    \17\ See www.census.gov/construction/nrs/historical_data/index.html, Median and Average Sale Price of Houses Sold.
    \18\ RS Means. 2020. RS Means Building Construction Cost Data, 
89th Ed. Construction Publishers & Consultants. Norwell, MA.
---------------------------------------------------------------------------

    The estimated first year energy cost savings associated with the 
2018 IECC is shown in Table IV.4 and the estimated first year energy 
cost savings associated with the 2021 IECC is show in Table IV.5.\19\ 
These tables are based on a combination of single-family homes and 
apartments/condos as described in DOE's cost-effectiveness reports. 
While the weighting of homes and apartments/condos may not be identical 
in the private and Federal sectors, the trends are similar for both 
single-family homes and apartments/condos. Both the 2018 IECC and 2021 
IECC save a moderate amount of energy costs over the 2015 IECC in all 
climate zones in the United States.
---------------------------------------------------------------------------

    \19\ Note that the values in Table VI.4 have been adjusted to 
reflect 2020$ from the table that appears in DOE's determination of 
energy savings for IECC 2018, which were in 2018$. This adjustment 
was made using the GDP deflator value to correct for inflation 
between 2018 and 2020. Organization for Economic Co- operation and 
Development, GDP Implicit Price Deflator in United States, retrieved 
from FRED, Federal Reserve Bank of St. Louis; fred.stlouisfed.org/series/USAGDPDEFAISMEI, Updated February 17, 2021.

  Table IV.4--Average First Year Energy Cost Savings for the 2018 IECC
                        Compared to the 2015 IECC
                                 [2020$]
------------------------------------------------------------------------
                                             Average annual energy cost
               Climate zone                 savings (2020$/dwelling-unit-
                                                         yr)
------------------------------------------------------------------------
1.........................................                           $15
2.........................................                            15
3.........................................                            25
4.........................................                            29
5.........................................                            28
6.........................................                            30
7.........................................                            36
8.........................................                            48
National Average..........................                            25
------------------------------------------------------------------------


  Table IV.5--Average First Year Energy Cost Savings for the 2021 IECC
                        Compared to the 2018 IECC
                                 [2020$]
------------------------------------------------------------------------
                                             Average annual energy cost
               Climate zone                 savings (2020$/dwelling-unit-
                                                         yr)
------------------------------------------------------------------------
1.........................................                          $200
2.........................................                           192
3.........................................                           200
4.........................................                           205
5.........................................                           173
6.........................................                           123
7.........................................                           306
8.........................................                           411
National Average..........................                           191
------------------------------------------------------------------------

    Table IV.6 combines the average first year energy cost savings 
associated with the 2018 and 2021 versions of the IECC. In addition to 
adjusting for inflation (as was done for the values in Table IV.4), the 
2018 IECC analysis was adjusted to use the same underlying economic 
assumptions as the 2021 IECC, including fuel prices, fuel price 
escalations, labor and material costs, and sales tax rates.

  Table IV.6--Average First Year Energy Cost Savings for the 2015 IECC
                        Compared to the 2021 IECC
                                 [2020$]
------------------------------------------------------------------------
                                             Average annual energy cost
               Climate zone                 savings (2020$/dwelling-unit-
                                                         yr)
------------------------------------------------------------------------
1.........................................                          $208
2.........................................                           199
3.........................................                           214

[[Page 19601]]

 
4.........................................                           223
5.........................................                           189
6.........................................                           146
7.........................................                           328
8.........................................                           439
National Average..........................                           205
------------------------------------------------------------------------

    The LCC impact of the 2018 IECC is shown in Table IV.7 and the LCC 
impact of the 2021 IECC is shown in Table IV.8.\20\ Again, these values 
represent the combination of single-family homes and apartments/condos, 
but the trends are clear. Both the 2018 IECC and 2021 IECC have 
moderate LCC net savings in all climate zones in the United States.
---------------------------------------------------------------------------

    \20\ Note that the values in Table VI.7 have been adjusted to 
reflect 2020$ from the table that appears in DOE's determination of 
energy savings for IECC 2018, which were in 2018$. This adjustment 
was made using the GDP deflator value to correct for inflation 
between 2018 and 2020. Organization for Economic Co-operation and 
Development, GDP Implicit Price Deflator in United States, retrieved 
from FRED, Federal Reserve Bank of St. Louis; fred.stlouisfed.org/series/USAGDPDEFAISMEI, Updated February 17, 2021.

Table IV.7--Total LCC Net Savings for the 2018 IECC Compared to the 2015
                                  IECC
                                 [2020$]
------------------------------------------------------------------------
                                            Total LCC net savings (2020$/
               Climate zone                        dwelling-unit)
------------------------------------------------------------------------
1.........................................                          $417
2.........................................                           420
3.........................................                           548
4.........................................                           641
5.........................................                           652
6.........................................                           706
7.........................................                           857
8.........................................                         1,209
National Average..........................                           579
------------------------------------------------------------------------


Table IV.8--Total LCC Net Savings for the 2021 IECC Compared to the 2018
                                  IECC
                                 [2020$]
------------------------------------------------------------------------
                                            Total LCC net savings (2020$/
               Climate zone                        dwelling-unit)
------------------------------------------------------------------------
1.........................................                        $3,536
2.........................................                         2,854
3.........................................                         2,829
4.........................................                         2,243
5.........................................                         1,034
6.........................................                           970
7.........................................                         3,783
8.........................................                         6,782
National Average..........................                         2,320
------------------------------------------------------------------------

    Table IV.9 combines the total LCC net savings associated with the 
2018 and 2021 versions of the IECC. In addition to adjusting for 
inflation (as was done for the values in Table IV.7), the 2018 IECC 
analysis was adjusted to use the same underlying economic assumptions 
as the 2021 IECC, including fuel prices, fuel price escalations, labor 
and material costs, and sales tax rates.

Table IV.9--Total LCC Net Savings for the 2021 IECC Compared to the 2015
                                  IECC
                                 [2020$]
------------------------------------------------------------------------
                                            Total LCC net savings (2020$/
               Climate zone                        dwelling-unit)
------------------------------------------------------------------------
1.........................................                        $3,946
2.........................................                         3,241
3.........................................                         3,354

[[Page 19602]]

 
4.........................................                         2,890
5.........................................                         1,639
6.........................................                         1,716
7.........................................                         4,643
8.........................................                         7,924
National Average..........................                         2,860
------------------------------------------------------------------------

    By multiplying the estimated 3,977 units of new low-rise Federal 
construction per year by the national average values in Table IV.3, 
Table IV.6, and Table IV.9, DOE estimated that the total incremental 
first cost estimate for Federal buildings is an increase of $9.1 
million per year, that the total first year energy cost estimate is a 
savings of $0.8 million per year, and that the annual LCC net savings 
for the entire Federal low-rise residential buildings sector are 
estimated to be $11.4 million per year.
    DOE also conducted a net benefits and costs analysis using a 30-
year analysis period and an assumed building lifetime of 30 years. The 
building lifetime assumption was made to correspond with availability 
of underlying data from the cost-effectiveness analysis conducted by 
DOE's State building energy codes program.
    DOE calculated the net present value (NPV) of the change in 
equipment cost and reduced operating cost associated with the 
difference between the IECC 2015 and the IECC 2021. The NPV is the 
value in the present of a time-series of costs and savings, equal to 
the present value of savings in operating cost minus the present value 
of the increased total equipment cost to consumers.
    DOE determined the total increased equipment cost for each year of 
the analysis period (2022-2051) using the incremental construction cost 
described previously. DOE determined the present value of operating 
cost savings for each year from the beginning of the analysis period to 
the year when all Federal buildings constructed by 2051 have been 
retired, assuming a 30-year lifetime of the building.
    The average annual operating cost includes the costs for energy, 
repair or replacement of building components (e.g., heating and cooling 
equipment, lighting, and envelope measures), and maintenance of the 
building. DOE determined the per-unit annual savings in operating cost 
based on the savings in energy costs plus replacement and maintenance 
cost savings, which were calculated in the underlying cost-
effectiveness analysis by DOE's State building energy codes program. 
While DOE used the methodology and prices described previously to 
calculate first year energy cost savings and LCC net savings, for the 
NPV calculations, DOE determined the per-unit annual savings in 
operating cost by multiplying the per square foot annual electricity, 
natural gas, and fuel oil savings in energy consumption by the 
appropriate residential energy price from EIA's AEO2021.\21\ DOE 
forecasted energy prices based on projected average annual price 
changes in EIA's AEO2021 to develop the operating cost savings through 
the analysis period.
---------------------------------------------------------------------------

    \21\ DOE--U.S. Department of Energy. 2021. Annual Energy Outlook 
2021 with Projections to 2050. Washington, DC. Available at 
www.eia.gov/outlooks/aeo/.
---------------------------------------------------------------------------

    DOE uses national discount rates to calculate national NPV. DOE 
estimated NPV using both a 3-percent and a 7-percent real discount 
rate, in accordance with the Office of Management and Budget's guidance 
to Federal agencies on the development of regulatory analysis, 
particularly section E therein: Identifying and Measuring Benefits and 
Costs.\22\ The NPV is the sum over time of the discounted net savings.
---------------------------------------------------------------------------

    \22\ Office of Management and Budget. OMB Circular A-4, 
Regulatory Analysis. 2003. OMB: Washington, DC. September 17, 2003. 
www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

    The present value of increased equipment costs is the annual total 
cost increase in each year (the difference between the IECC 2021 and 
the IECC 2015), discounted to the present, and summed throughout the 
analysis period (2022 through 2051). Because new construction is held 
constant through the analysis period, the installed cost is constant.
    The present value of savings in operating cost is the annual 
savings in operating cost (the difference between the IECC 2021 and the 
IECC 2015), discounted to the present and summed through the analysis 
period (2022 through 2051). Savings are decreases in operating cost 
associated with the higher energy efficiency associated with buildings 
designed to the IECC 2021 compared to the IECC 2015. Total annual 
savings in operating cost are the savings per square foot multiplied by 
the number of square feet that survive in a particular year through the 
lifetime of the buildings constructed in the last year of the analysis 
period.

B. Monetization of Emissions Reduction Benefits

    As part of the development of this rule, for the purpose of 
complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO<INF>2,</INF> CH<INF>4</INF>, N<INF>2</INF>O, NO<INF>X</INF>, and 
SO<INF>2</INF> that are expected to result from this rule. In order to 
make this calculation analogous to the calculation of the NPV of 
consumer benefit, DOE considered the reduced emissions expected to 
result over the lifetime of buildings constructed in the analysis 
period. This section summarizes the basis for the values used for 
monetizing the emissions benefits and presents the values considered in 
this rule.
    On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction issued 
in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of 
the Fifth Circuit's order, the preliminary injunction is no longer in 
effect, pending resolution of the federal government's appeal of that 
injunction or a further court order. Among other things, the 
preliminary injunction enjoined the defendants in that case from 
``adopting, employing, treating as binding, or relying upon'' the 
interim estimates of the social cost of greenhouse gases--which were 
issued by the Interagency Working Group on the Social Cost of 
Greenhouse Gases on February 26, 2021--to monetize the benefits of 
reducing greenhouse gas emissions. In the absence of further 
intervening court orders, DOE will revert to its approach prior to the

[[Page 19603]]

injunction and present monetized benefits where appropriate and 
permissible under law.
1. Monetization of Greenhouse Gas Emissions
    For the purpose of complying with the requirements of Executive 
Order 12866, DOE estimates the monetized benefits of the reductions in 
emissions of CO<INF>2</INF>, CH<INF>4</INF>, and N<INF>2</INF>O by 
using a measure of the social cost (``SC'') of each pollutant (e.g., 
SC-GHGs). These estimates represent the monetary value of the net harm 
to society associated with a marginal increase in emissions of these 
pollutants in a given year, or the benefit of avoiding that increase. 
These estimates are intended to include (but are not limited to) 
climate-change-related changes in net agricultural productivity, human 
health, property damages from increased flood risk, disruption of 
energy systems, risk of conflict, environmental migration, and the 
value of ecosystem services. DOE exercises its own judgment in 
presenting monetized climate benefits as recommended by applicable 
executive orders and guidance, and DOE would reach the same conclusion 
presented in this notice in the absence of the social cost of 
greenhouse gases, including the February 2021 Interim Estimates 
presented by the Interagency Working Group on the Social Cost of 
Greenhouse Gases. DOE exercises its own judgment in presenting 
monetized climate benefits as recommended by applicable executive 
orders, and DOE would reach the same conclusion presented in this 
notice in the absence of the social cost of greenhouse gases, including 
the February 2021 Interim Estimates presented by the Interagency 
Working Group on the Social Cost of Greenhouse Gases.
    DOE estimated the global social benefits of CO<INF>2</INF>, 
CH<INF>4</INF>, and N<INF>2</INF>O reductions (i.e., SC-GHGs) using the 
estimates presented in the Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990 published in February 2021 by the Interagency Working Group 
on the Social Cost of Greenhouse Gases (IWG) (IWG, 2021). The SC-GHGs 
is the monetary value of the net harm to society associated with a 
marginal increase in emissions in a given year, or the benefit of 
avoiding that increase. In principle, SC-GHGs includes the value of all 
climate change impacts, including (but not limited to) changes in net 
agricultural productivity, human health effects, property damage from 
increased flood risk and natural disasters, disruption of energy 
systems, risk of conflict, environmental migration, and the value of 
ecosystem services. The SC-GHGs therefore, reflects the societal value 
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting 
benefit-cost analyses of policies that affect CO<INF>2</INF>, 
N<INF>2</INF>O and CH<INF>4</INF> emissions. As a member of the IWG 
involved in the development of the February 2021 SC-GHG TSD), the DOE 
agrees that the interim SC-GHG estimates represent the most appropriate 
estimate of the SC-GHG until revised estimates have been developed 
reflecting the latest, peer-reviewed science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, an interagency working group (IWG) that 
included the DOE and other executive branch agencies and offices was 
established to ensure that agencies were using the best available 
science and to promote consistency in the social cost of carbon (SC-
CO<INF>2</INF>) values used across agencies. The IWG published SC-
CO<INF>2</INF> estimates in 2010 that were developed from an ensemble 
of three widely cited integrated assessment models (IAMs) that estimate 
global climate damages using highly aggregated representations of 
climate processes and the global economy combined into a single 
modeling framework. The three IAMs were run using a common set of input 
assumptions in each model for future population, economic, and 
CO<INF>2</INF> emissions growth, as well as equilibrium climate 
sensitivity (ECS)--a measure of the globally averaged temperature 
response to increased atmospheric CO\2\ concentrations. These estimates 
were updated in 2013 based on new versions of each IAM. In August 2016 
the IWG published estimates of the social cost of methane (SC-
CH<INF>4</INF>) and nitrous oxide (SC-N2O) using methodologies that are 
consistent with the methodology underlying the SC-CO<INF>2</INF> 
estimates. The modeling approach that extends the IWG SC-CO<INF>2</INF> 
methodology to non-CO<INF>2</INF> GHGs has undergone multiple stages of 
peer review. The SC-CH<INF>4</INF> and SC-N<INF>2</INF>O estimates were 
developed by Marten et al. (2015) and underwent a standard double-blind 
peer review process prior to journal publication. In 2015, as part of 
the response to public comments received to a 2013 solicitation for 
comments on the SC-CO<INF>2</INF> estimates, the IWG announced a 
National Academies of Sciences, Engineering, and Medicine review of the 
SC-CO<INF>2</INF> estimates to offer advice on how to approach future 
updates to ensure that the estimates continue to reflect the best 
available science and methodologies. In January 2017, the National 
Academies released their final report, Valuing Climate Damages: 
Updating Estimation of the Social Cost of Carbon Dioxide, and 
recommended specific criteria for future updates to the SC-
CO<INF>2</INF> estimates, a modeling framework to satisfy the specified 
criteria, and both near-term updates and longer-term research needs 
pertaining to various components of the estimation process (National 
Academies, 2017). Shortly thereafter, in March 2017, President Trump 
issued Executive Order 13783, which disbanded the IWG, withdrew the 
previous TSDs, and directed agencies to ensure SC-CO<INF>2</INF> 
estimates used in regulatory analyses are consistent with the guidance 
contained in OMB's Circular A-4, ``including with respect to the 
consideration of domestic versus international impacts and the 
consideration of appropriate discount rates'' (E.O. 13783, Section 
5(c)).
    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of the National Academies (2017). The IWG was tasked 
with first reviewing the SC-GHG estimates currently used in Federal 
analyses and publishing interim estimates within 30 days of the E.O. 
that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021, specifically the SC-CH<INF>4</INF> estimates, are used 
here to estimate the climate benefits for this final rule. The E.O. 
instructs the IWG to undertake a fuller update of the SC-GHG estimates 
by January 2022 that takes into consideration the advice of the 
National Academies (2017) and other recent scientific literature.
    The February 2021 SC-GHG TSD provides a complete discussion of the 
IWG's initial review conducted under E.O. 13990. In particular, the IWG 
found that the SC-GHG estimates used under E.O. 13783 fail to reflect 
the full impact of GHG emissions in multiple ways. First, the IWG found 
that a global perspective is essential for SC-GHG estimates because it 
fully captures climate impacts that affect the United States and which 
have been omitted from prior U.S.-specific estimates due to

[[Page 19604]]

methodological constraints. Examples of omitted effects include direct 
effects on U.S. citizens, assets, and investments located abroad, 
supply chains, and tourism, and spillover pathways such as economic and 
political destabilization and global migration. In addition, assessing 
the benefits of U.S. GHG mitigation activities requires consideration 
of how those actions may affect mitigation activities by other 
countries, as those international mitigation actions will provide a 
benefit to U.S. citizens and residents by mitigating climate impacts 
that affect U.S. citizens and residents. If the United States does not 
consider impacts on other countries, it is difficult to convince other 
countries to consider the impacts of their emissions on the United 
States. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this final rule DOE centers attention on a global measure 
of SC-CH4. This approach is the same as that taken in DOE regulatory 
analyses from 2012 through 2016. Prior to that, in 2008 DOE presented 
Social Cost of Carbon (SCC) estimates based on values the 
Intergovernmental Panel on Climate Change (IPCC) identified in 
literature at that time. As noted in the February 2021 SC-GHG TSD, the 
IWG will continue to review developments in the literature, including 
more robust methodologies for estimating a U.S.-specific SC-GHG value, 
and explore ways to better inform the public of the full range of 
carbon impacts. As a member of the IWG, DOE will continue to follow 
developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies (2017) and the economic literature, the IWG continued to 
conclude that the consumption rate of interest is the theoretically 
appropriate discount rate in an intergenerational context (IWG 2010, 
2013, 2016a, 2016b), and recommended that discount rate uncertainty and 
relevant aspects of intergenerational ethical considerations be 
accounted for in selecting future discount rates. As a member of the 
IWG involved in the development of the February 2021 SC-GHG TSD, DOE 
agrees with this assessment and will continue to follow developments in 
the literature pertaining to this issue.
    While the IWG works to assess how best to incorporate the latest, 
peer reviewed science to develop an updated set of SC-GHG estimates, it 
set the interim estimates to be the most recent estimates developed by 
the IWG prior to the group being disbanded in 2017. The estimates rely 
on the same models and harmonized inputs and are calculated using a 
range of discount rates. As explained in the February 2021 SC-GHG TSD, 
the IWG has recommended that agencies to revert to the same set of four 
values drawn from the SC-GHG distributions based on three discount 
rates as were used in regulatory analyses between 2010 and 2016 and 
subject to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: An average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3 percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer-reviewed methodologies, and the science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    DOE's derivations of the SC-GHGs (i.e., SC-CO<INF>2</INF>, SC-
N<INF>2</INF>O, and SC-CH<INF>4</INF>) values used for this rule are 
discussed in the following sections, and the results of DOE's analyses 
estimating the benefits of the reductions in emissions of these 
pollutants are presented in section VII.A.
a. Social Cost of Carbon
    The SC-CO<INF>2</INF> values used for this rule were generated 
using the values presented in the 2021 update from the IWG's February 
2021 TSD. Table IV.10 shows the updated sets of SC-CO<INF>2</INF> 
estimates from the latest interagency update in 5-year increments from 
2020 to 2050. For purposes of capturing the uncertainties involved in 
regulatory impact analysis, DOE has determined it is appropriate 
include all four sets of SC-CO<INF>2</INF> values, as recommended by 
the IWG.\23\
---------------------------------------------------------------------------

    \23\ For example, the February 2021 TSD discusses how the 
understanding of discounting approaches suggests that discount rates 
appropriate for intergenerational analysis in the context of climate 
change may be lower than 3 percent.

                    Table IV.10--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per Metric Ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                         Discount rate
                                              ------------------------------------------------------------------
                     Year                                                                           3% 95th
                                                 5% average      3% average     2.5% average       percentile
----------------------------------------------------------------------------------------------------------------
2020.........................................              14              51              76                152
2025.........................................              17              56              83                169
2030.........................................              19              62              89                187
2035.........................................              22              67              96                206
2040.........................................              25              73             103                225
2045.........................................              28              79             110                242
2050.........................................              32              85             116                260
----------------------------------------------------------------------------------------------------------------


[[Page 19605]]

    In calculating the potential global benefits resulting from reduced 
CO<INF>2</INF> emissions, DOE used the values from the February 2021 
TSD, adjusted to 2020$ using the implicit price deflator for gross 
domestic product (GDP) from the Bureau of Economic Analysis. For each 
of the four sets of SC-CO<INF>2</INF> cases specified, the values for 
emissions in 2020 were $14, $51, $76, and $152 per metric ton avoided 
(values expressed in 2020$). DOE derived values from 2051 to 2070 based 
on estimates published by EPA.\24\ These estimates are based on 
methods, assumptions, and parameters identical to the 2020-2050 
estimates published by the IWG. DOE derived values after 2070 based on 
the trend in 2060-2070 in each of the four cases. DOE derived values 
after 2050 using the approach described above for the SC-
CO<INF>2</INF>.
---------------------------------------------------------------------------

    \24\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at: www.epa.gov/system/files/documents/2021-12/420r21028.pdf (last accessed January 13, 
2022).
---------------------------------------------------------------------------

    DOE multiplied the CO<INF>2</INF> emissions reduction estimated for 
each year by the SC-CO<INF>2</INF> value for that year in each of the 
four cases. To calculate a present value of the stream of monetary 
values, DOE discounted the values in each of the four cases using the 
specific discount rate that had been used to obtain the SC-
CO<INF>2</INF> values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH<INF>4</INF> and SC-N<INF>2</INF>O values used for this 
rule were generated using the values presented in the 2021 update from 
the IWG.\25\ Table IV.11 shows the updated sets of SC-CH<INF>4</INF> 
and SC-N<INF>2</INF>O estimates from the latest interagency update in 
5-year increments from 2020 to 2050. To capture the uncertainties 
involved in regulatory impact analysis, DOE has determined it is 
appropriate to include all four sets of SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O values, as recommended by the IWG.
---------------------------------------------------------------------------

    \25\ See Interagency Working Group on Social Cost of Greenhouse 
Gases, Technical Support Document: Social Cost of Carbon, Methane, 
and Nitrous Oxide. Interim Estimates Under Executive Order 13990, 
Washington, DC, February 2021. Available at: www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf 
(last accessed March 17, 2021).

                                  Table IV.11--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                 [2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        SC-CH4 discount rate and statistic         SC-N2O discount rate and statistic
                                                                   -------------------------------------------------------------------------------------
                               Year                                    5%        3%       2.5%      3% 95th       5%        3%       2.5%      3% 95th
                                                                     average   average   average   percentile   average   average   average   percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020..............................................................       670     1,500     2,000        3,900     5,800    18,000    27,000       48,000
2025..............................................................       800     1,700     2,200        4,500     6,800    21,000    30,000       54,000
2030..............................................................       940     2,000     2,500        5,200     7,800    23,000    33,000       60,000
2035..............................................................     1,100     2,200     2,800        6,000     9,000    25,000    36,000       67,000
2040..............................................................     1,300     2,500     3,100        6,700    10,000    28,000    39,000       74,000
2045..............................................................     1,500     2,800     3,500        7,500    12,000    30,000    42,000       81,000
2050..............................................................     1,700     3,100     3,800        8,200    13,000    33,000    45,000       88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH<INF>4</INF> and N<INF>2</INF>O emissions 
reduction estimated for each year by the SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates for that year in each of the cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the cases using the specific discount 
rate that had been used to obtain the SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates in each case.
2. Monetization of Other Air Pollutants
    DOE estimated the monetized value of NO<INF>X</INF> and 
SO<INF>2</INF> emissions reductions from electricity generation using 
benefit per ton estimates based on air quality modeling and 
concentration-response functions conducted for the Clean Power Plan 
final rule. 84 FR 32520. DOE used EPA's values for NO<INF>X</INF> (as 
PM<INF>2.5</INF>) and SO<INF>2</INF> for 2020, 2025, and 2030 
calculated with discount rates of 3 percent and 7 percent, and EPA's 
values for ozone season NO<INF>X,</INF> which do not involve 
discounting since the impacts are in the same year as emissions. DOE 
used linear interpolation to define values for the years between 2020 
and 2025 and between 2025 and 2030; for years beyond 2030 the values 
are held constant.
    DOE also estimated the monetized value of NO<INF>X</INF> and 
SO<INF>2</INF> emissions reductions from site use of natural gas in 
buildings impacted by this rule using benefit-per-ton estimates from 
the EPA's Benefits Mapping and Analysis Program. Although none of the 
sectors covered by EPA refers specifically to residential and 
commercial buildings, the sector called ``area sources'' would be a 
reasonable proxy for residential and commercial buildings.\26\ The EPA 
document provides high and low estimates for 2025 and 2030 at 3- and 7-
percent discount rates.\27\ DOE used the same linear interpolation and 
extrapolation as it did with the values for electricity generation. DOE 
primarily relied on the low estimates to be conservative.
---------------------------------------------------------------------------

    \26\ ``Area sources'' represents all emission sources for which 
states do not have exact (point) locations in their emissions 
inventories. Because exact locations would tend to be associated 
with larger sources, ``area sources'' would be fairly representative 
of small dispersed sources like homes and businesses.
    \27\ ``Area sources'' are a category in the 2018 document from 
EPA, but are not used in the 2021 document cited above. See: 
www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf.
---------------------------------------------------------------------------

    DOE multiplied the emissions reduction (in tons) in each year by 
the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate. On March 16, 
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the 
federal government's emergency motion for stay pending appeal of the 
February 11, 2022, preliminary injunction issued in Louisiana v. Biden, 
No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's 
order, the preliminary injunction is no longer in effect, pending 
resolution of the federal government's appeal of that injunction or a 
further court order. Among other things, the preliminary injunction 
enjoined the defendants in that case from ``adopting, employing, 
treating as binding, or relying upon'' the interim estimates of the 
social cost of

[[Page 19606]]

greenhouse gases--which were issued by the Interagency Working Group on 
the Social Cost of Greenhouse Gases on February 26, 2021--to monetize 
the benefits of reducing greenhouse gas emissions. In the absence of 
further intervening court orders, DOE will revert to its approach prior 
to the injunction and present monetized benefits where appropriate and 
permissible under law.

C. Conclusion

    This analysis results in a cumulative net present value (NPV) of 
total benefits of the rule of $0.23 billion (at a 7-percent discount 
rate) and $0.50 billion (at a 3-percent discount rate). This NPV 
expresses the estimated total value of future operating cost savings 
minus the estimated increased building costs for new Federal 
construction for 2022-2051 with a 30-year lifetime and includes 
monetized climate and health benefits (see Table IV.12). DOE estimates 
climate benefits from a reduction in greenhouse gases (GHG) using four 
different estimates of the social cost of CO<INF>2</INF> (``SC-
CO<INF>2</INF>''), the social cost of methane (``SC-CH<INF>4</INF>''), 
and the social cost of nitrous oxide (``SC-N<INF>2</INF>O''). Together 
these represent the social cost of GHG (SC-GHG). DOE used interim SC-
GHG values developed by an Interagency Working Group on the Social Cost 
of Greenhouse Gases (IWG).\28\ \29\ DOE does not have a single central 
SC-GHG point estimate and it emphasizes the importance and value of 
considering the benefits calculated using all four SC-GHG estimates. 
DOE is currently only monetizing (for SO<INF>2</INF> and 
NO<INF>X</INF>) PM<INF>2.5</INF> precursor health benefits and (for 
NO<INF>X</INF>) ozone precursor health benefits, but will continue to 
assess the ability to monetize other effects such as health benefits 
from reductions in direct PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

    \28\ See Interagency Working Group on Social Cost of Greenhouse 
Gases, Technical Support Document: Social Cost of Carbon, Methane, 
and Nitrous Oxide. Interim Estimates Under Executive Order 13990, 
Washington, DC, February 2021. https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
    \29\ On March 16, 2022, the Fifth Circuit Court of Appeals (No. 
22-30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction 
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a 
result of the Fifth Circuit's order, the preliminary injunction is 
no longer in effect, pending resolution of the federal government's 
appeal of that injunction or a further court order. Among other 
things, the preliminary injunction enjoined the defendants in that 
case from ``adopting, employing, treating as binding, or relying 
upon'' the interim estimates of the social cost of greenhouse 
gases--which were issued by the Interagency Working Group on the 
Social Cost of Greenhouse Gases on February 26, 2021--to monetize 
the benefits of reducing greenhouse gas emissions. In the absence of 
further intervening court orders, DOE will revert to its approach 
prior to the injunction and present monetized benefits where 
appropriate and permissible under law.
---------------------------------------------------------------------------

    The benefits and costs of the rulemaking can also be expressed in 
terms of annualized values. The annualized net benefit is (1) the 
annualized national economic value (expressed in 2020$) of the benefits 
from building to IECC 2021, consisting primarily of operating cost 
savings from using less energy, minus increases in building costs, and 
(2) the annualized monetary value of the benefits of climate (GHG) and 
health (NO<INF>X</INF>, and SO<INF>2</INF>) emission reductions. Table 
IV.13 shows the annualized values for this rulemaking, expressed in 
2020$. In the tables, total benefits for both the 3-percent and 7-
percent cases are presented using the average GHG social costs with 3-
percent discount rate, but the Department emphasizes the importance and 
value of considering the benefits calculated using all four SC-GHG 
cases.

 Table IV.12--Summary of Monetized Economic Benefits and Costs (Billion
                                 2020$)
                    [2022-2051 plus 30-year lifetime]
------------------------------------------------------------------------
                                                           Billion $2020
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................           0.391
Climate Benefits *......................................           0.114
Health Benefits **......................................           0.177
                                                         ---------------
    Total Benefits [dagger].............................           0.682
    Consumer Incremental Product Costs [dagger][dagger].           0.179
                                                         ---------------
        Net Benefits....................................           0.503
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................           0.168
Climate Benefits *......................................           0.114
Health Benefits **......................................           0.066
                                                         ---------------
    Total Benefits [dagger].............................           0.347
    Consumer Incremental Product Costs [dagger][dagger].           0.113
                                                         ---------------
        Net Benefits....................................           0.234
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with Federal
  new low-rise residential buildings built in 2022-2051. These results
  include benefits to consumers which accrue after 2051 from the
  buildings constructed in 2022-2051.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate). Together
  these represent the social cost of greenhouse gases (SC-GHG). For
  presentational purposes of this table, the climate benefits associated
  with the average SC-GHG at a 3 percent discount rate are shown, but
  the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits
  calculated using all four SC-GHG estimates. See section IV.B of this
  document for more details.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing PM2.5 and (for NOX) ozone
  precursor health benefits, but will continue to assess the ability to
  monetize other effects such as health benefits from reductions in
  direct PM2.5 emissions. The health benefits are presented at real
  discount rates of 3 and 7 percent. See IV.B of this document for more
  details.

[[Page 19607]]

 
[dagger] Total and net benefits include consumer operating cost savings
  and benefits related to public health and climate. On March 16, 2022,
  the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
  government's emergency motion for stay pending appeal of the February
  11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-
  cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order,
  the preliminary injunction is no longer in effect, pending resolution
  of the federal government's appeal of that injunction or a further
  court order. Among other things, the preliminary injunction enjoined
  the defendants in that case from ``adopting, employing, treating as
  binding, or relying upon'' the interim estimates of the social cost of
  greenhouse gases--which were issued by the Interagency Working Group
  on the Social Cost of Greenhouse Gases on February 26, 2021--to
  monetize the benefits of reducing greenhouse gas emissions. In the
  absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where
  appropriate and permissible under law.
[dagger][dagger] Costs include incremental equipment costs as well as
  installation costs.


   Table IV.13--Annualized Monetized Benefits, Costs, and Net Benefits
                             (Million 2020$)
                    [2022-2051 plus 30-year lifetime]
------------------------------------------------------------------------
                                            Million 2020$/year
            Category             ---------------------------------------
                                   3% discount rate    7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.                20.0                13.5
Climate Benefits *..............                 5.8                 5.8
Health Benefits **..............                 9.0                 5.3
                                 ---------------------------------------
    Total Benefits [dagger].....                34.8                18.8
    Costs [dagger][dagger]......                 9.1                 9.1
                                 ---------------------------------------
        Net Benefits............                25.7                15.5
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with Federal
  new low-rise residential buildings built in 2022-2051. These results
  include benefits to consumers which accrue after 2051 from the
  buildings constructed in 2022-2051.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate). Together
  these represent the social cost of greenhouse gases (SC-GHG). For
  presentational purposes of this table, the climate benefits associated
  with the average SC-GHG at a 3 percent discount rate are shown, but
  the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits
  calculated using all four SC-GHG estimates. See section IV.B of this
  document for more details.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. The health benefits are presented at real discount rates of
  3 and 7 percent. See section IV.B of this document for more details.
[dagger] Total and net benefits include consumer operating cost savings
  and benefits related to public health and climate. On March 16, 2022,
  the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
  government's emergency motion for stay pending appeal of the February
  11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-
  cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order,
  the preliminary injunction is no longer in effect, pending resolution
  of the federal government's appeal of that injunction or a further
  court order. Among other things, the preliminary injunction enjoined
  the defendants in that case from ``adopting, employing, treating as
  binding, or relying upon'' the interim estimates of the social cost of
  greenhouse gases--which were issued by the Interagency Working Group
  on the Social Cost of Greenhouse Gases on February 26, 2021--to
  monetize the benefits of reducing greenhouse gas emissions. In the
  absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where
  appropriate and permissible under law.
[dagger][dagger] Costs include incremental equipment costs as well as
  installation costs.

    Accordingly, DOE has determined that the implementation of IECC 
2021 for Federal low-rise residential buildings is cost-effective. DOE 
is presenting monetized climate benefits in accordance with the 
applicable Executive Orders and DOE would reach the same conclusion 
presented in this notice in the absence of the social cost of 
greenhouse gases, including the February 2021 Interim Estimates 
presented by the Interagency Working Group on the Social Cost of 
Greenhouse Gases.

V. Compliance Date

    This final rule applies to new Federal low-rise residential 
buildings for which design for construction begins on or after one year 
from the publication date of this rulemaking in the Federal Register. 
(42 U.S.C. 6834(a)(1)) Such buildings must be designed to exceed the 
energy efficiency level of the appropriate updated voluntary standard 
by 30 percent if LCC effective. However, at a minimum, such buildings 
must achieve the energy efficiency equal to that of the appropriate 
updated voluntary standard. One-year lead time before the design for 
construction begins is consistent with DOE's previous updates to the 
energy efficiency baselines and the original statutory mandate for 
Federal building standards. One year lead time before design for 
construction begins helps to minimize compliance costs to agencies, 
which may have planned buildings in various stages of design, and 
allows for design changes to more fully consider LCC effective measures 
(as opposed to having to revise designs in development, which may make 
incorporation of energy efficiency measures more difficult or 
expensive).

VI. Reference Resources

    DOE originally prepared this list of resources to help Federal 
agencies achieve building energy efficiency levels of at least 30 
percent below the 2009 IECC. DOE has reviewed these resources and 
believes that they continue to be useful for helping agencies maximize 
their energy efficiency levels. DOE has updated this resource list as 
appropriate. These resources come in many forms and in a variety of 
media. Resources are provided for all buildings, as well as 
specifically for low-rise residential buildings. FEMP offers an online 
search database of tools that can help agencies reduce energy use and 
meet Federal laws and requirements. Tools include software, 
calculators, data sets, and databases created by DOE and other Federal 
organizations. This resource can be found at www.energy.gov/eere/femp/federal-energy-management-tools.

(1) Energy Efficient Products--U.S. DOE Federal Energy Management 
Program and U.S. Environmental Protection Agency (EPA) ENERGY STAR 
Program

www.energy.gov/eere/femp/energy-efficient-products-and-energy-saving-technologies

    Federal agencies are required by EPAct 2005 and 10 CFR part 436 to

[[Page 19608]]

specify Federal Energy Management Program (FEMP) designated or ENERGY 
STAR equipment, including building mechanical and lighting equipment 
and builder-supplied appliances, for purchase and installation in all 
new construction unless the agency can show that the use of such 
equipment is not life-cycle cost-effective. 42 U.S.C. 8259b(b) Although 
this rule does not specifically address the use of this equipment, 
ENERGY STAR and FEMP-designated products are generally more energy 
efficient than the corresponding minimum manufacturing standards for 
residential-sized appliances and equipment, and may be used to achieve 
part of the savings required of Federal building designs. Agencies are 
required to use equipment designated as high-efficiency by FEMP and/or 
ENERGY STAR, credit may be taken for this equipment as part of the 
Total Building Performance compliance path through the use of Section 
R401.2.5 Part 2 of the 2021 IECC. Credit given in the Total Building 
Performance compliance path will depend on whether the equipment 
efficiency required for ENERGY STAR and FEMP-designated products meets 
or exceeds the efficiency required for the 2021 IECC additional 
efficiency packages. In some cases, the efficiency required in the 2021 
IECC additional efficiency packages exceeds the efficiency of the 
ENERGY STAR and FEMP-designated equipment, which implies that no credit 
will be given in the Total Building Performance compliance path. The 
FEMP websites, accessed through the previous links, are provided as 
useful resources for achieving part of the energy savings required by 
the rule.

(2) Life-Cycle Cost Analysis--U.S. DOE Federal Energy Management 
Program

www.energy.gov/eere/femp/building-life-cycle-cost-programs

    The LCC analysis rules promulgated in 10 CFR part 436 Subpart A, 
Life-Cycle Cost Methodology and Procedures, conform to requirements in 
the Federal Energy Management Improvement Act of 1988 (Pub. L. 100-615) 
and subsequent energy conservation legislation, as well as Executive 
Order 13693, ``Planning for Federal Sustainability in the Next 
Decade.'' The LCC guidance and required discount rates and energy price 
projections are determined annually by FEMP and the Energy Information 
Administration, and are published in the Annual Supplement to The 
National Institute of Standards and Technology Handbook 135: ``Energy 
Price Indices and Discount Factors for Life-Cycle Cost Analysis.''

(3) ENERGY STAR Buildings--U.S. Environmental Protection Agency and 
U.S. Department of Energy

www.energystar.gov/homes

    ENERGY STAR is a government-backed program helping businesses and 
individuals protect the environment through superior energy efficiency. 
The EPA program requirements for ENERGY STAR-labeled homes, effective 
as of the date of this rule, provide a useful guide for meeting the 
Federal energy efficiency standard for low-rise residential buildings.

(4) Passive House Institute US

www.phius.org/home-page

    This website provides information on designing and building very 
low energy homes.

(5) U.S. DOE Office of Energy Efficiency & Renewable Energy--
Residential Buildings Integration

www.energy.gov/eere/buildings/residential-buildings-integration

    This website provides information on energy efficient home design 
strategies and technologies to support energy efficiency in residences.

(6) 2020 National Green Building Standard, ICC 700--ICC and NAHB

https://shop.iccsafe.org/icc-700-2020-national-green-building-standardr.html

    The National Green Building Standard ICC 700-2020 National Green 
Building Standard[supreg] (NGBS) is an American National Standards 
Institute (ANSI)-approved, residential construction standard for 
voluntary, above-code building certification is a green building rating 
system for homes approved by the American National Standards Institute. 
This standard The NGBS standard provides requirements design and 
verification direction for building high-efficiency and green homes and 
multi-family buildings.

(7) The NGBS Green Promise

www.ngbs.com/the-ngbs-green-promise

    The National Green Building Standard is a green building rating 
system for homes approved by the American National Standards Institute.

(8) LEED Certification for Residential

www.usgbc.org/leed/rating-systems/residential

    This certification system provides requirements for building high-
efficiency and green homes and multi-family buildings.

(9) Green Globes--The Green Building Initiative

www.thegbi.org/

    This certification provides requirements for building high-
efficiency and green multi-family buildings.

(10) 2018 IECC--ICC

https://shop.iccsafe.org/codes/2018-international-codes-and-references/2018-international-energy-conservation-code.html \30\
---------------------------------------------------------------------------

    \30\ A free read-only version of the 2018 IECC is available at 
https://codes.iccsafe.org/content/IECC2018P4.

    The interim energy efficiency standard for low-rise residential 
buildings between the 2015 IECC and the 2021 IECC is the 2018 IECC.

(11) 2021 IECC--ICC

https://shop.iccsafe.org/codes/2021-international-codes-and-references/2021-international-energy-conservation-coder.html \31\
---------------------------------------------------------------------------

    \31\ A free read-only version of the 2021 IECC is available at 
https://codes.iccsafe.org/content/IECC2021P1.

    The energy efficiency standard for low-rise residential buildings 
is the 2021 IECC.

(12) Whole Building Design Guide--National Institute of Building 
Sciences

www.wbdg.org/

    A portal providing one-stop access to up-to-date information on a 
wide range of building-related guidance, criteria, and technology from 
a ``whole buildings'' perspective.

VII. Regulatory Analysis

A. Review Under Executive Order 12866, ``Regulatory Planning and 
Review''

    This final rule is a ``significant regulatory action'' under 
Executive Order 12866, ``Regulatory Planning and Review.'' 58 FR 51735 
(October 4, 1993). Accordingly, this action was subject to review by 
the Office of Information and Regulatory Affairs (OIRA) in the Office 
of Management and Budget (OMB). OMB has completed its review. As 
discussed previously in this rule, DOE is required to determine, based 
on the cost-effectiveness, whether the standards for Federal buildings 
should be updated to reflect an amendment to the IECC standard. As 
stated in the preamble, DOE complied with the statutory language by 
analyzing the cost-effectiveness of the 2018 IECC and the 2021 IECC, 
and through DOE's involvement in the ICC code development process.

[[Page 19609]]

    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. 76 FR 3281 (January 21, 2011). E.O. 
13563 is supplemental to, and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866.
    Review under Executive Order 12866 requires an analysis of the 
economic effect of the rule. For this purpose, DOE estimated 
incremental first cost (in this case, the difference between the cost 
of a building designed to meet the 2021 IECC and a building designed to 
meet the 2015 IECC) for the Federal low-rise residential buildings 
sector, as well as LCC net savings. Because this update incorporates 
changes made in the 2018 and 2021 IECC codes, DOE has adjusted the IECC 
2018 analyses to use the same underlying economic assumptions (e.g., 
fuel price escalations, labor rates, etc.) as the IECC 2021 analysis in 
order to estimate the cumulative impact of the two code changes. First, 
DOE estimated that the annual full fuel cycle national energy savings 
would be 0.074 trillion Btu (associated with one year of Federal 
construction), that the cumulative (over the 30-year analysis period) 
full fuel cycle national energy savings would be 0.060 quadrillion Btu, 
and that the cumulative (including building lifetime savings) full fuel 
cycle national energy savings would be 0.063 quadrillion Btu. Based on 
these energy savings and using the methodology described in section IV 
of this document, DOE estimated the resulting incremental first cost, 
first year energy cost savings, and annual LCC net savings. DOE 
estimated that the total incremental first cost is an increase of $9.1 
million per year, with an average first cost increase of $2,296 per 
household. DOE estimated $11.3 million in annual LCC net savings for 
the entire Federal low-rise residential buildings sector with an 
average LCC net savings of $2,860 per household.\32\
---------------------------------------------------------------------------

    \32\ DOE also prepared an EA for this rule that details the 
environmental impacts, including emissions reductions, of the rule. 
Environmental Assessment for Final Rule, 10 CFR part 435, `Energy 
Efficiency Standards for New Federal Low-Rise Residential 
Buildings,' Baseline Standards Update. The EA may be found in the 
docket for this rulemaking and at www.energy.gov/nepa/doeea-2166-energy-efficiency-standards-new-federal-low-rise-residential-buildings-baseline.
---------------------------------------------------------------------------

    Table VII.1 shows the monetized economic benefits and costs 
expected to result from this rulemaking. Using a 7-percent discount 
rate for consumer benefits and costs and health benefits, and a 3-
percent discount rate case for GHG social (climate) costs, the 
estimated cost of this rulemaking is $0.113 billion in increased 
equipment costs, while the estimated benefits are $0.168 billion in 
reduced equipment operating costs, $0.114 billion in climate benefits, 
and $0.066 billion in health benefits. In this case, the net benefit 
amounts to $0.234 billion. Using a 3-percent discount rate for all 
benefits and costs, the estimated cost of this rulemaking is $0.179 
billion in increased equipment costs, while the estimated benefits are 
$0.391 billion in reduced equipment operating costs, $0.114 billion in 
climate benefits, and $0.177 billion in health benefits. In this case, 
the net benefit amounts to $0.503 billion.
    Table VII.2 shows the annualized monetized economic benefits and 
costs expected to result from this rulemaking. Using a 7-percent 
discount rate for consumer benefits and costs and health benefits, and 
a 3-percent discount rate case for GHG social (climate) costs, the 
estimated cost of this rulemaking is $9.1 million per year in increased 
equipment costs, while the estimated annual benefits are $13.5 million 
in reduced equipment operating costs, $5.8 million in climate benefits, 
and $5.3 million in health benefits. In this case, the net benefit 
amounts to $15.5 million per year. Using a 3-percent discount rate for 
all benefits and costs, the estimated cost of this rulemaking is $9.1 
million per year in increased equipment costs, while the estimated 
annual benefits are $20.0 million in reduced equipment operating costs, 
$5.8 million in climate benefits, and $9.0 million in health benefits. 
In this case, the net benefit amounts to $25.7 million per year.

 Table VII.1--Summary of Monetized Economic Benefits and Costs (Billion
                                 2020$)
                    [2022-2051 plus 30-year lifetime]
------------------------------------------------------------------------
                                                           Billion $2020
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................           0.391
Climate Benefits *......................................           0.114
Health Benefits **......................................           0.177
                                                         ---------------
    Total Benefits [dagger].............................           0.682
    Consumer Incremental Product Costs [dagger][dagger].           0.179
                                                         ---------------
        Net Benefits....................................           0.503
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................           0.168
Climate Benefits *......................................           0.114
Health Benefits **......................................           0.066
                                                         ---------------
    Total Benefits [dagger].............................           0.347
    Consumer Incremental Product Costs [dagger][dagger].           0.113
                                                         ---------------
        Net Benefits....................................           0.234
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with Federal
  new commercial and multi-family high-rise buildings built in 2022-
  2051. These results include benefits to consumers which accrue after
  2051 from the buildings constructed in 2022-2051.

[[Page 19610]]

 
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate). Together
  these represent the social cost of greenhouse gases (SC-GHG). For
  presentational purposes of this table, the climate benefits associated
  with the average SC-GHG at a 3 percent discount rate are shown, but
  the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits
  calculated using all four SC-GHG estimates. See section IV.B of this
  document for more details.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. The health benefits are presented at real discount rates of
  3 and 7 percent. See section IV.B of this document for more details.
[dagger] Total and net benefits include consumer operating cost savings
  and benefits related to public health and climate. On March 16, 2022,
  the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
  government's emergency motion for stay pending appeal of the February
  11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-
  cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order,
  the preliminary injunction is no longer in effect, pending resolution
  of the federal government's appeal of that injunction or a further
  court order. Among other things, the preliminary injunction enjoined
  the defendants in that case from ``adopting, employing, treating as
  binding, or relying upon'' the interim estimates of the social cost of
  greenhouse gases--which were issued by the Interagency Working Group
  on the Social Cost of Greenhouse Gases on February 26, 2021--to
  monetize the benefits of reducing greenhouse gas emissions. In the
  absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where
  appropriate and permissible under law. [dagger] Costs include
  incremental equipment costs as well as installation costs.


   Table VII.2--Annualized Monetized Benefits, Costs, and Net Benefits
                             (Million 2020$)
                    [2022-2051 plus 30-Year Lifetime]
------------------------------------------------------------------------
                                            Million 2020$/year
            Category             ---------------------------------------
                                   3% Discount rate    7% Discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.                20.0                13.5
Climate Benefits *..............                 5.8                 5.8
Health Benefits **..............                 9.0                 5.3
                                 ---------------------------------------
    Total Benefits[dagger]......                34.8                24.6
    Costs[dagger][dagger].......                 9.1                 9.1
                                 ---------------------------------------
        Net Benefits............                25.7                15.5
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with Federal
  new commercial and multi-family high-rise buildings built in 2022-
  2051. These results include benefits to consumers which accrue after
  2051 from the buildings constructed in 2022-2051.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
  discount rates; 95th percentile at 3 percent discount rate). Together
  these represent the social cost of greenhouse gases (SC-GHG). For
  presentational purposes of this table, the climate benefits associated
  with the average SC-GHG at a 3 percent discount rate are shown, but
  the Department does not have a single central SC-GHG point estimate,
  and it emphasizes the importance and value of considering the benefits
  calculated using all four SC-GHG estimates. See section IV.B of this
  document for more details.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. The health benefits are presented at real discount rates of
  3 and 7 percent. See section IV.B of this document for more details.
[dagger] Total and net benefits include consumer operating cost savings
  and benefits related to public health and climate. On March 16, 2022,
  the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
  government's emergency motion for stay pending appeal of the February
  11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-
  cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order,
  the preliminary injunction is no longer in effect, pending resolution
  of the federal government's appeal of that injunction or a further
  court order. Among other things, the preliminary injunction enjoined
  the defendants in that case from ``adopting, employing, treating as
  binding, or relying upon'' the interim estimates of the social cost of
  greenhouse gases--which were issued by the Interagency Working Group
  on the Social Cost of Greenhouse Gases on February 26, 2021--to
  monetize the benefits of reducing greenhouse gas emissions. In the
  absence of further intervening court orders, DOE will revert to its
  approach prior to the injunction and present monetized benefits where
  appropriate and permissible under law.
[dagger][dagger] Costs include incremental equipment costs as well as
  installation costs.

B. Review Under the Administrative Procedure Act

    This rule, which updates energy efficiency performance standards 
for the design and construction of new Federal buildings, is a rule 
relating to public property, and therefore is not subject to the 
rulemaking requirements of the Administrative Procedure Act, including 
the requirement to publish a notice of proposed rulemaking. (See 5 
U.S.C. 553(a)(2))

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of General Counsel's 
website: https://energy.gov/gc/office-general-counsel.
    As noted above, DOE has determined that a notice of proposed 
rulemaking is not required by 5 U.S.C. 553 or any other law for 
issuance of this rule. As such, the analytical requirements of the 
Regulatory Flexibility Act do not apply. 5 U.S.C. 605(b).

D. Review Under the Paperwork Reduction Act of 1995

    This rulemaking will impose no new information or record keeping 
requirements. Accordingly, OMB clearance is not required under the 
Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

[[Page 19611]]

E. Review Under the National Environmental Policy Act of 1969

    DOE prepared an EA (DOE/EA-2166) entitled, ``Environmental 
Assessment for Final Rule, 10 CFR part 435, `Energy Efficiency 
Standards for New Federal Low-Rise Residential Buildings,' Baseline 
Standards Update,'' \33\ pursuant to the Council on Environmental 
Quality's (CEQ) Regulations for Implementing the Procedural Provisions 
of the National Environmental Policy Act (40 CFR parts 1500-1508), the 
National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 
4321 et seq.), and DOE's NEPA Implementing Procedures (10 CFR part 
1021).
---------------------------------------------------------------------------

    \33\ The EA may be found in the docket for this rulemaking and 
at www.energy.gov/nepa/doeea-2166-energy-efficiency-standards-new-federal-low-rise-residential-buildings-baseline.
---------------------------------------------------------------------------

    The EA addresses the possible incremental environmental effects 
attributable to the application of the final rule. The only anticipated 
impact would be a decrease in outdoor air pollutants resulting from 
decreased fossil fuel consumption, either directly consumed on site or 
indirectly when used to generate energy that is consumed in Federal 
buildings. Therefore, DOE has issued a finding of no significant impact 
(FONSI), pursuant to NEPA, the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations 
for compliance with NEPA (10 CFR part 1021).
    To identify the potential environmental impacts that may result 
from implementing the final rule on new Federal low-rise residential 
buildings, DOE compared the requirements of the final rule updating 
energy efficiency performance standards for Federal new low-rise 
residential buildings to 2021 IECC with the ``no-action alternative'' 
of using the current Federal standards (the 2015 IECC). This comparison 
is identical to that undertaken by DOE in its determinations of energy 
savings of those standards and codes.
    Accordingly, DOE concludes in the EA that new Federal buildings 
designed and constructed to the 2021 IECC will use less energy than new 
Federal buildings designed and constructed to the 2015 IECC because the 
2021 IECC is more efficient than 2015 IECC. This decrease in energy 
usage translates to reduced emissions of carbon dioxide 
(CO<INF>2</INF>), nitrogen oxides (NO<INF>X</INF>), and mercury (Hg) 
over the 30-year period examined in the EA. As reported in the EA, 
cumulative emission reductions for 30 years of construction and 
operation for Federal buildings built during that period (2022 through 
2051) were estimated at up to 1.3 million metric tons of 
CO<INF>2</INF>, up to 2.3 thousand tons of NO<INF>X</INF>, up to 0.002 
tons of Hg, up to 10.8 thousand tons of CH<INF>4</INF>, up to 0.4 
thousand tons of SO<INF>2</INF>, and up to 0.01 thousand tons of 
N<INF>2</INF>O. In conducting the net benefits analysis, DOE also 
calculated the energy savings and associated emissions corresponding to 
the analysis period plus the lifetime of the building (30 years) to 
capture the full benefits stream associated with Federal buildings 
constructed from 2022 through 2051. For 30 years of construction and 
operation including building lifetime, cumulative emission reductions 
were estimated at up to 2.5 million metric tons of CO<INF>2</INF>, up 
to 4.3 thousand tons of NO<INF>X</INF>, up to 0.004 tons of Hg, up to 
20.8 thousand tons of CH<INF>4</INF>, up to 0.8 thousand tons of 
SO<INF>2</INF>, and up to 0.02 thousand tons of N<INF>2</INF>O.

F. Review under Executive Order 13132, ``Federalism''

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 
1999), imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE examined this rule 
and determined that it does not preempt State law and does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

G. Review Under Executive Order 12988, ``Civil Justice Reform''

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Federal agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity, (2) write 
regulations to minimize litigation, and (3) provide a clear legal 
standard for affected conduct, rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation (1) clearly specifies 
the preemptive effect, if any; (2) clearly specifies any effect on 
existing Federal law or regulation; (3) provides a clear legal standard 
for affected conduct, while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or if it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this rule meets the relevant standards of Executive 
Order 12988.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 
L. 104-4) requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and tribal governments as well as 
the private sector. For a proposed regulatory action likely to result 
in a rule that may cause the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector of $100 million 
or more in any one year (adjusted annually for inflation), section 202 
of UMRA requires a Federal agency to publish a written statement that 
estimates the resulting costs, benefits, and other effects on the 
national economy. (2 U.S.C. 1532(a) and (b)) The UMRA also requires a 
Federal agency to develop an effective process to permit timely input 
by elected officers of State, local, and tribal governments on a 
proposed ``significant intergovernmental mandate'' and requires an 
agency plan for giving notice and opportunity for timely input to 
potentially affected small governments before establishing any 
requirements that might significantly or uniquely affect small 
governments. On March 18, 1997, DOE published a statement of policy on 
its process for intergovernmental consultation under UMRA (62 FR

[[Page 19612]]

12820) (also available at https://energy.gov/gc/office-general-counsel). This final rule contains neither an intergovernmental mandate 
nor a mandate that may result in the expenditure of $100 million or 
more in any year by State, local, and tribal governments, in the 
aggregate, or by the private sector, so these requirements under the 
Unfunded Mandates Reform Act do not apply.

I. Review Under the Treasury and General Government Appropriations Act 
of 1999

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a 
Family Policymaking Assessment for any rule that may affect family 
well-being. This final rule would not have any impact on the autonomy 
or integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

J. Review Under Executive Order 12630, ``Governmental Actions and 
Interference With Constitutionally Protected Property Rights''

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (March 18, 1988), that this rule would not result 
in any takings that might require compensation under the Fifth 
Amendment to the United States Constitution.

K. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), 
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). 
DOE has reviewed this final rule under the OMB and DOE guidelines and 
has concluded that it is consistent with applicable policies in those 
guidelines.

L. Review Under Executive Order 13211, ``Actions Concerning Regulations 
That Significantly Affect Energy Supply, Distribution, or Use''

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to 
OIRA, a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use. DOE's Energy 
Information Administration (EIA) estimates single-family and multi-
family households in the residential sector will be approximately 120 
million households averaging 1,800 square feet in the United States in 
2022, with a growth rate of roughly 0.7 percent per year, which is 
equivalent to about 832,000 new households or approximately 1.5 billion 
square feet per year.\34\ This rule is expected to incrementally reduce 
the energy usage of approximately 9.78 million square feet \35\ of 
Federal low-rise residential construction annually. Thus, the rule 
represents approximately 0.65 percent of the expected annual U.S. 
construction in 2022, and less in every succeeding year. This final 
rule would not have a significant adverse effect on the supply, 
distribution, or use of energy and, therefore, is not a significant 
energy action. Accordingly, DOE has not prepared a Statement of Energy 
Effects.
---------------------------------------------------------------------------

    \34\ See Table A4 of the 2021 Annual Energy Outlook at 
www.eia.gov/outlooks/aeo/excel/aeotab_4.xlsx.
    \35\ See EA for this rule for the origin of the federal 
residential construction estimate.
---------------------------------------------------------------------------

M. Review Under Section 32 of the Federal Energy Administration Act of 
1974

    Under section 301 of the DOE Organization Act (Pub. L. 95-91), DOE 
must comply with section 32 of the Federal Energy Administration Act of 
1974 (Pub. L. 93-275), as amended by the Federal Energy Administration 
Authorization Act of 1977 (Pub. L. 95-70). (15 U.S.C. 788) Section 32 
provides that where a proposed rule authorizes or requires use of 
commercial standards, the NOPR must inform the public of the use and 
background of such standards. In addition, section 32(c) requires DOE 
to consult with the Department of Justice (DOJ) and the Federal Trade 
Commission (FTC) concerning the impact of the commercial or industry 
standards on competition.
    Although section 32 specifically refers to the proposed rule stage, 
DOE is meeting these requirements at the final rule stage because there 
was no proposed rule for this action. This final rule incorporates 
testing methods contained in the following commercial standard: ICC 
2021 IECC, International Energy Conservation Code, 2020, International 
Code Council, ISBN 978-1-60983-749-5.
    DOE has evaluated these standards and notes that the IECC Standard 
is developed under ICC's governmental consensus standard procedures and 
is under a three-year maintenance cycle. ICC has established a program 
for regular publication of errata and revisions, including procedures 
for timely, documented, consensus action on requested changes to the 
IECC. The 2018 IECC was published in 2017 and the 2021 IECC was 
published in 2020. However, DOE is unable to conclude whether the IECC 
fully complies with the requirements of section 32(b) of the FEAA 
(i.e., whether they were developed in a manner that fully provides for 
public participation, comment, and review). DOE has consulted with both 
the Attorney General and the Chairman of the FTC about the impact on 
competition of using the methods contained in these standards and has 
received no comments objecting to their use.

N. Description of Materials Incorporated by Reference

    In this final rule, DOE incorporates by reference the ICC 2021 
International Energy Conservation Code, (IECC), Redline Version, 
copyright 2021. This U.S. standard provides minimum requirements for 
energy-efficient designs for low-rise residential buildings. Copies of 
this standard are available from the International Code Council, 4051 
West Flossmoor Road, Country Club Hills, IL 60478, 1-888-422-7233, 
www.iccsafe.org.
    The Director of the Federal Register previously approved ICC 
International Energy Conservation Code (IECC) 2005, 2009, and 2015 
Editions, for incorporation by reference in 10 CFR part 435.

[[Page 19613]]

VIII. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

IX. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
rule.

List of Subjects in 10 CFR Part 435

    Buildings and facilities, Energy conservation, Federal buildings 
and facilities, Housing, Incorporation by reference.

Signing Authority

    This document of the DOE was signed on March 28, 2022, by Kelly J. 
Speakes-Backman, Principal Deputy Assistant Secretary for Energy 
Efficiency and Renewable Energy, pursuant to delegated authority from 
the Secretary of Energy. That document, with the original signature and 
date, is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the DOE. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on March 31, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, the Department of Energy 
amends part 435 of chapter II of title 10 of the Code of Federal 
Regulations as set forth below:

PART 435--ENERGY EFFICIENCY STANDARDS FOR THE DESIGN AND 
CONSTRUCTION OF NEW FEDERAL LOW-RISE RESIDENTIAL BUILDINGS

0
1. The authority citation for part 435 continues to read as follows:

    Authority:  42 U.S.C. 6831-6832; 6834-6836; 42 U.S.C. 8253-54, 
42 U.S.C. 7101 et seq.


0
2. Section 435.2 is amended by:
0
a. Removing in the definition for ``IECC Baseline Building 2004'', the 
text ``ICC International Energy Conservation Code, 2004 Supplement 
Edition, January 2005'' and adding, in its place, the text ``ICC IECC 
2004'';
0
b. Removing in the definition for ``IECC Baseline Building 2009'', the 
text ``ICC International Energy Conservation Code, 2009 Edition, 
January 2009'' and adding, in its place, the text ``ICC IECC 2009''; 
and
0
c. Adding in alphanumerical order a definition for ``IECC Baseline 
Building 2021''.
    The addition reads as follows:


Sec.  435.2  Definitions.

* * * * *
    IECC Baseline Building 2021 means a building that is otherwise 
identical to the proposed building but is designed to meet, but not 
exceed, the energy efficiency specifications in the ICC IECC 2021 
(incorporated by reference, see Sec.  435.3).
* * * * *

0
3. Section 435.3 is amended by revising paragraph (a) and adding 
paragraph (b)(4) to read as follows:


Sec.  435.3  Materials incorporated by reference.

    (a) Certain material is incorporated by reference into this subpart 
with the approval of the Director of the Federal Register in accordance 
with 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other 
than that specified in this section, DOE must publish a document in the 
Federal Register and the material must be available to the public. All 
approved material is available for inspection at DOE, and at the 
National Archives and Records Administration (NARA). Contact DOE at: 
The U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, Building Technologies Program, Sixth Floor, 950 
L'Enfant Plaza SW, Washington, DC 20024, (202) 586-9127, 
<a href="/cdn-cgi/l/email-protection#0a487f63666e63646d794a6f6f246e656f246d657c"><span class="__cf_email__" data-cfemail="c88abda1a4aca1a6afbb88adade6aca7ade6afa7be">[email protected]</span></a>, https://www.energy.gov/eere/buildings/building-technologies-office. For information on the availability of this 
material at NARA, email: <a href="/cdn-cgi/l/email-protection#a9cfdb87c0c7dad9cccaddc0c6c7e9c7c8dbc887cec6df"><span class="__cf_email__" data-cfemail="dabca8f4b3b4a9aabfb9aeb3b5b49ab4bba8bbf4bdb5ac">[email protected]</span></a>, or go to: 
www.archives.gov/federal-register/cfr/ibr-locations.html. The material 
may be obtained from the sources in the following paragraphs of this 
section.
    (b) * * *
    (4) ICC 2021 International Energy Conservation Code (IECC), Redline 
Version, Copyright 2021, (``IECC 2021''), IBR approved for Sec. Sec.  
435.2, 435.4, and 435.5.

0
4. Section 435.4 is amended by:
0
a. Revising paragraph (a)(3) introductory text;
0
b. Removing in paragraph (a)(3)(i), the text ``2015 IECC'' and adding 
in its place the text ``IECC 2015''; and
0
c. Adding paragraph (a)(4).
    The revision and addition reads as follows:


Sec.  435.4  Energy efficiency performance standard.

    (a) * * *
    (3) All Federal agencies shall design new Federal buildings that 
are low-rise residential buildings, for which design for construction 
began on or after January 10, 2018, but before April 5, 2023 to:
* * * * *
    (4) All Federal agencies shall design new Federal buildings that 
are low-rise residential buildings, for which design for construction 
began on or after April 5, 2023 to:
    (i) Meet the IECC 2021, (incorporated by reference, see Sec.  
435.3); and
    (ii) If life-cycle cost-effective, achieve energy consumption 
levels, calculated consistent with paragraph (b) of this section, that 
are at least 30 percent below the levels of the IECC Baseline Building 
2021.
* * * * *

0
5. Section 435.5 is amended by revising paragraph (c) and adding 
paragraph (d) to read as follows:


Sec.  435.5  Performance level determination.

* * * * *
    (c) For new Federal buildings for which design for construction 
began on or after January 10, 2018 but before April 5, 2023 each 
Federal agency shall determine energy consumption levels for both the 
IECC Baseline Building 2015 and proposed building by using the 
Simulated Performance Alternative found in section R405 of the IECC 
2015 (incorporated by reference, see Sec.  435.3).
    (d) For new Federal buildings for which design for construction 
began on or after April 5, 2023 each Federal agency shall determine 
energy consumption levels for both the IECC Baseline Building 2021 and 
proposed building by using the Simulated Performance Alternative found 
in section R405 of the IECC 2021 (incorporated by reference, see Sec.  
435.3).

[FR Doc. 2022-07138 Filed 4-4-22; 8:45 am]
BILLING CODE 6450-01-P


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