# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California ' s Water and Energy Conservation Standards for Residential Clothes Washers Docket EE

-RM-PET

- 100 [April 7, 2006] April 7, 2006



# Agitator washer is $220 and the weighted average price is $325. (Note - CEC itself uses much higher incremental prices when it is debunking rebates . The lack of internal consistency is startling .) It also overestimates the price of a basic washer meeting an 8.5 WF standard, which will asymptotically approach $500. Even with these offsetting changes , the incremental cost to the consumer is $280, not the $66

.44 claimed by CEC. Similarly, the asymptotic price for a base model meeting a WF of 6. 0 will be $600 , for an incremental cost to the consumer of $100 over an 8.5 WF washer and $380 over a current standard washer.
2. CEC does not consider the incremental effects of a 6.0 WF standard relative to an 8.5 level. 3. CEC does not consider the effects of changing consumer behavior through existing market mechanisms , crediting standards for all energy and water savings from the current situation

. They take all of the gain as a benefit of regulation and tax the least able to pay consumers with regulation ' s cost.
4. CEC does not consider that many consumers do not pay directly for water usage so they will not get the economic benefit of water savings , a critical component of the CEC consumer benefit calculations . Over 700, 000 households in California do not have water meters

. In addition many residents of apartments do not have their own individual water meters

. In both those situations , the CEC petition is left with annual consumer savings of $3.30 for the 8

.5 standard and $4.59 for the 6.0, hardly enough to justify any significant increase in cost, let alone the real impact of hundreds of dollars.
The effects of these errors are on consumer payback: 1. The actual payback to a consumer for a WF standard of 8.5 is over 25 years ($280 incremental cost divided by $ 10.91 in annual water and energy savings). 2. The actual incremental payback to a consumer for a WF standard of 6.0 versus one of 8

. 5 is over 9 years ($ 100 incremental cost divided by the difference between $21

. 52 in operating savings for a 6.0 standard and $10.91 for an 8.5 standard). 3. The actual direct payback to a consumer for a WF standard of 6 is over 17 years. No reasonable policy standard leads to a conclusion that consumers are benefited by paybacks of 25 or 17 years (longer than the expected life of the product even disregarding the time value of money).



# 35 

# OOOO ('O

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# Adjusting for probable changes in consumer behavior leading to increasing acceptance of low water factor washers, delays due to likely reduction in shipments as consumers postpone washer replacement and the incremental nature of the 6.0 standard leads to the likelihood that actual total water savings will be less than 50 million gallons from the combination of an 8.5 standard and a 6.0 one, not 66.7 million gallons. Figure 6. Similarly, the likely savings in electricity used by clothes washing will be 142 gWh, not the 227 gWh projected by CEC. Figure 7. Even CEC's projected savings are minimal in the total California context. The actual savings are certainly less than CEC estimate.

California Water Usage and Projected Savings from Washer Regulations

Usage in 2000, Projected Savings in 2020 16,000

14.000

12,000

6,000

4,000

2,000

0 1,000 Billion Gallons

Total Residential Source: 2005 California Water Plan and TIAX/Shorey analysis 

# Figure 6: Corrected Estimated Water Savings

14,000 Billion Gallons

MAgriculture Commercial , Industrial, Institutional O Residential Outdoor O Residential Indoor Clothes Washers Projected Savings

Projected Savings: 50 Billion Gallons

100 Billion Gallons

Clothes Washers



# 36 0000201

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# California Electricity Usage and Projected Savings from Washer Regulations Usage in 2002, Projected Savings in 2020 250,000 ,

200,000

150,000 -

irn

Total 

# Figure 7: Corrected Estimated Energy Savings Other 11111 1ndustrial q Commercial O Residential Clothes Washers M Projected Savings



# It is interesting to note that the CEC only discusses energy savings in the context of consumer payback analysis or in tables that have survived unedited from earlier filings. Somehow the notion of energy savings as an important factor in the analysis (overstated as those savings are by CEC) has disappeared. The total savings are infinitesimal in California and hardly create a compelling need that will have a measurable effect on either California's water or energy situation.

VII. EFFECT ON THE NATIONAL MARKET Based on in-depth interviews with manufacturers, AHAM consultant Everett Shorey has concluded a maximum California water factor standard of 8.5 in 2007 and 6.0 in 2010 would have significant deleterious effects on washing machine manufacturers, their suppliers and employees. Complying with any state standard affects national production decisions; manufacturers would have great difficulty meeting the California standard, a potential plethora of different state standards and the federal standard.



# 37 

# 0000202

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# NAECA was designed specifically to prevent such a situation from occurring. The economic effect on manufacturers would be negative due to the additional investment requirements for new capacity before normal capacity replacement cycles. These same pressures would be transmitted down to the industry's suppliers. Any major new capacity decisions also raise the possibility of shifts 'in manufacturing locations, possibly outside of the US, for either component assemblies or complete clothes washers. Further, cumulative regulatory burden has been shown to negatively impact the financial performance of appliance manufacturers as historically they have had to redesign most of their product lines to meet different NAECA standards. The prospect of several new state standards makes the potential future cumulative burden far more severe. The need for adequate time to recover capital investments required to meet federal standards was carefully considered by DOE in the clothes washer and all rulemakings. It was well understood by all parties involved in the clothes washer negotiated rule that ample time is needed to recover investments to achieve the 2004 and 2007 federal standards. Any new requirement by California would have serious detrimental effects on manufacturers' investment requirements and investments already made and underway in good faith reliance on the federal standard as the benchmark for the foreseeable future.
A. Financial Effects on Manufacturers A proposed California maximum water factor of 8.5 in 2007 and 6.0 in 2010 would have the following direct negative effects on manufacturers: 1. Require investment of $150 million in new manufacturing capacity to meet California requirements or diversion of most existing front load manufacturing capacity to California for no net national energy/water savings. 2. Require expenditures for engineering , product development, product introduction and marketing to support the introduction of new models for California consumers 3. Lead to a decline in clothes washer shipments in California as consumers choose to repair current, relatively inefficient washers rather than purchase new ones at much higher prices and less attractive feature sets than current top-load washers.
4. Increase costs for clothes washers with no clear evidence that manufacturers can pass through those costs or earn any additional margin to pay for the capacity investment. Using the Government Regulatory Impact Model (GRIM) accepted for use in DOE NAECA analyses, an initial California maximum water factor standard of 8.5 in



# 38 0000203

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# 2007 and 6.0 three years later would lead to a decline in clothes washer industry value of approximately $100 million, or about 16% of total industry value. This assumes that manufacturers can continue to earn the same percentage gross margin on the more expensive front load and non-agitator top load washers that would be sold in California, a very optimistic assumption. If manufacturers have lower margins, then the negative effect on value would be considerably greater. For example, if manufacturers maintain their current gross margin of $71.50 per unit, rather than their current 22% gross margin, the value of the clothes washer industry declines by $641 million, or 103%, i.e. the total industry value becomes negative. The difference between a constant percent gross margin and a constant dollar one amounts to about $8 dollars per unit at the manufacturers level or about $11 to the consumer. This projected difference in price between a basic top load washer and the minimum likely price for a washer that meets even an 8.5 standard is $280, far more than any possible differences that might be overcome through manufacturing efficiencies or other productivity gains. As always, the highly competitive nature of the clothes washer industry indicates both the difficulty and the necessity of maintaining gross margins in order to avoid substantial negative industry financial impact. Small differences in the ability to recoup the necessary gross margins will have a devastating effect on the major appliance manufacturers. Recent price reductions for front load and non-agitator top load washers demonstrate again the highly competitive nature of the clothes washer industry.
The GRIM analysis is based on specific scenarios and also on certain initiating values for financial analyses

. The scenarios are:
1. Base case

- Clothes washer shipments grow at 3.3% annually, in line with trend for 1993-2003, national share of clothes washers shifts from 82% top-load agitator washers in 2004 to 75% in 2007; California mix shifts from 78% top-load agitator in 2004 to 69% in 2007 (Appendix 1). 2. California Only Standard Case - California sets a maximum WF standard of 8.5 in 2007 and 6.0 in 2010, shipments of washers decline in California by 10% from 2007 through 2009, by 20% in 2010 through 2012, recovering to 90% of Base Case levels in 2013 and 2014 and reaching base case levels in 2015. Top-load agitator washers disappear from California in 2007. Shipments to California decline as consumers retain and repair older washers rather than bear the significant added expense coupled with less desirable features of washers that meet the California standard (Appendix 2). (It is recognized that with the required minimum 3 year lead-in period the effective date used by CEC are impractical. But, they are used here to correspond to the CEC proffered analysis.) 

# 3. Initiating values are as shown in Appendix 3.

39 

# 0000204

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# The cash flows from the GRIM analysis are shown in Appendices 4,& 5a&b (5a assumes 22% gross margin, 5b assumes $71.50 per unit gross margin). These scenarios and results assume that manufacturers create additional capacity to meet the California standards. It could be theoretically possible to meet a California WF standard of 8.5 by diverting virtually all current front-load shipments from the rest of the country to California. This would result in less financial impact on manufacturers. However, it would not create any national energy benefits, as it would simply reallocate current production, which is highly undesirable. It also would require ignoring market demand for those products. Even under a reallocation approach, there is not sufficient current production of units with WFs below 6.0 to meet the second level proposed by California. Manufacturers would experience the anticipated negative financial effects from such a lowered water factor.
R. The California Standard Would Cause A Burden On Manufacturers To Redesign Their Residential Clothes Washers Manufacturers have developed and will continue to develop clothes washer products that enhance both energy and water efficiency for the national market. Product development decisions involve many years and tens of millions of dollars in development costs, excluding the costs of tooling a plant. To the extent that a California standard requires separate product lines, it will create the need for additional investment. In the case of possible 8.5 WF standards and 6.0 standards, these proposals would either radically limit product choice in California or place huge burdens on manufacturers or both. On a simplistic level, there may be capacity in product lines already on the market or coming on the market to supply California with more clothes washers that meet the proposed standards. However, these products have been designed for specialty customers and are not optimized for the vast majority of the market that wishes simple, reliable, low cost washers. The actual difference in price between products that will be on the market without redesign will be significantly higher than those projected in the discussion of effects on consumers. The already dismal payback to consumers will, in actuality, be much worse. There is no capacity nor any designs that will be available at anything near the asymptotic minimum platform price used in the consumer analysis. Redesigning product lines will, in practice, force addition of new product lines on the industry. This will lead to the decline in industry value, as shown in the GRIM analysis of between $100 and $600 million dollars depending on the assumptions about ultimate product margins.



# 40 0000205

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# Other costs will increase throughout the distribution channel. Both manufacturers and retailers will incur costs to train sales representatives so that they can explain the new washers to customers who intended to purchase traditional top load agitator machines. Manufacturers and retailers will need to maintain customer service and help functions in order to answer consumer. questions about how to operate a low-water use washer successfully. Past experience with innovative products with different cleaning properties indicates that manufacturers and retailers will also face significant consumer discontent and product returns. These will increase total costs throughout the distribution channel. Such a redesign process also will likely lead to consequences on competition and jobs in the US.
C. Effects on Competition At the current time, there are six manufacturers of consumer washing machines with manufacturing capacity in the US (Whirlpool, GE, Electrolux, Alliance, Fisher & Paykel, and Bosch) with the just closed purchase of Maytag by Whirlpool. The cost of generating and producing a new washer model, especially if it is focused only on California, may be unsupportable for some manufacturers and could result in further industry concentration. The engineering, product development and product introduction costs plus capital conversion investments of introducing a new model will exceed $40-50 million for most manufacturers, regardless of actual production volume. Those manufacturers withrelatively low market shares may not be able to support this investment for low waterfactor washers even to meet a national market. In the case of a California-only regulation, Mr. Shorey's interviews indicate that several manufacturers would choose to sell in California only as long.as current products meet the standard. Low volume manufacturers are likely to exit the California market instead of making additional investments in new products. D. Sourcing Patterns and Effects on Jobs. To date the majority of clothes washers sold in the US have been assembled in the US, typically with major parts manufactured ,in the same plants that assemble the washers. Total production employment for clothes washers (excluding dryers) is approximately 7500 full time equivalents. There is consensus among washer manufacturers that this situation may not be sustainable, that the difference in labor and fringe benefit costs are now substantial enough that manufacturers must consider alternative sources for major parts and/or must



# 41 0 

# 0002 06

# Response of the Association of Home Appliance Manufacturers to the California Energy

Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET- 100 [April 7, 2006] April 7, 2006



# consider assembling clothes washers in lower cost locations. U.S. manufacturers may even decide to source and label a growing portion of their products from foreign manufacturers to reduce investment requirements. Should manufacturers choose to relocate production off-shore, this will result in the loss of manufacturing jobs in the US, particularly in Ohio, Iowa, Kentucky, Illinois and Arkansas. Absent a major cause for reconsideration, major appliance manufacturers tend not to change manufacturing locations since the savings from lower cost labor and other items will not support the associated capital investment. However, whenever manufacturers face a significant capital investment, the balance of factors changes and the likelihood of relocation increases. ® Several manufacturers have designed, tooled and introduced into the market place high efficiency clothes washer platforms over the past few years that significantly exceed the current federal DOE energy standards. Over a billion dollars have been invested to meet these standards. ® As the federal energy standards have become more stringent, DOE has elevated Energy Star qualifying levels, and utility based programs have increased rebate efficiency tiers to levels that could soon exceed many of the highly efficient washer designs. Meeting the next round of Energy Star levels and utility rebate tiers (although voluntary) may require substantial investment in retooling and replacing recently production plant modifications to produce highly efficient washer designs. Any further regulations may force several U.S. manufacturers to source their next high efficiency design washers from outside the U.S. in order to remain competitive in the marketplace, minimize capital outlay, and respond to new federal efficiency standards and voluntary conservation programs. o States like California requesting exemption from federal standards and imposing their own localized, very stringent energy and water standards, will likely result in manufacturers sourcing even larger numbers of high efficiency washers from outside the U.S.
o This could impact several , thousand J.S. jobs. Production line, design, engineering as well as support and supplier jobs are all potentially affected by sourcing decisions. o The transformation to high efficiency clothes washers needs to take into account R&D and manufacturing capabilities applied over a reasonable period of time to permit manufacturers to design and tool new, more efficient designs of their own. 

# 42 000020°7

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# Abrupt, stringent or inflexible mandates, particular in major markets like California, increase the likelihood of expedient decisions causing U.S. job losses as manufacturers are driven to low-cost solutions.
The trend of recent decisions is already moving towards greater use of non-US manufacturing

. Several companies have plants in Mexico or other countries that serve the US market and some are creating alliances for design and manufacturing capacity. As the result of recent NAECA rulemakings for refrigerators and freezers, for example, U.S. plants have closed and production has shifted . Therefore, the probability is high that any regulation that necessitates new capacity decisions for washers will result in further loss of US manufacturing jobs. The recent refrigerator situation provides an example of the potential for washer regulations to impact sourcing decisions: ® All U.S. based manufacturers have designed, tooled and introduced into the marketplace high-efficiency refrigerators of all types (side-by-sides, bottom freezers, and top freezers) that meet or exceed the 2001 DOE Energy Standards. Over a billion dollars has been invested to meet these standards. ® The ramifications of energy standards can be felt several years after the effective date, and may be a significant contributing factor to outsourcing decisions based on costs incurred to remain competitive in a dynamic global market. ® U.S manufacturers have moved significant production to Mexico, and in some cases, the Far East. ® In addition, several manufacturers have been forced to source many purchased components and assemblies from outside of the U.S. to remain cost competitive (compressors, electronic controls, motors, etc.). Several domestic suppliers have closed their U.S.-based manufacturing facilities.
It is estimated that over 5,000 U. S. jobs related to household refrigerators have already been lost due to relocation or outsourcing within the past 6 years. ® In addition, several manufacturers are considering additional relocation or outsourcing decisions in the near future.

Appendix I Base Case GRIM Shipments



# 43 0000208

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006

B- Cana 2007 Sitandards . No Choog4 in F1 ,agy5tar 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2914 2015 2016 2017 2018 Ce51or1m Top Lond 623054 845.738 820 , 302 592.448 612 , 226 632 ,664 653,764 675,810 898,164 721 ,471 745,555 710 ,444 796, 164 822.743 850,206 Tap L. Enargy6mr 48.700 53,419 84 , 757 78

. 780 79

. 322 81,970 84 , 706 87,534 90,458 93

. 476 96.597 99,021 103 , 154 108 , 597 110,158 Top Load Non-Agitator 19,545 22,370 27 , 102 32,125 33,196 34,308 35 ,451 36,035 37,658 39 , 121 40 ,4 27 41,777 43,172 44,613 46.102 Franc Loud 78,830 87,706 100 261 125 ,958 130.161 134,506 138,996 143,837 148,432 153,387 158 , 507 163 , 799 169207 174,917 180.757 Front Load Mv.1-d 87,570 100,227 121 , 430 143 , 937 146,743 153,708 158 , 039 164,142 109,621 175,264 181 , 135 187,182 193,431 199,888 206,561 Tool & 53,498 909,490 939 ,852 971 ,227 1,003,849 1 ,037,154 1,071 , 778 1 , 107,557 1,144,531 1 , 182,739 1 , 222,222 1 , 283,024 1,305

. 187 1,348,759 1 , 393,784 Banoa d Notion Top Load 5,931,872 5,805,037 5,801,412 5,377,722 5, 557.247 5, 742,785 5,934,477 6

. 132,589 6,337

. 313 8, 540.872 8,767,494 8, 993.414 7.220.876 7 ,466,131 7, 717,441 Top Load ErlargySler 321,434 482,813 840 , 288 841,728 869,826 858,885 928 , 872 959,881 991,925 1 , 025,038 1 , 059.257 1,094.818 1 , 131,160 1 , 168,922 1,207,944 Top Load non
-A44604 134,528 235,801 328.425 427 , 119 441,377 458,112 471,338 487,073 503,333 520 , 138 537

.499 555 ,443 573,985 593,147 812,948 Front Load 527,447 600,378 782,556 978 , 229 1 , 008,819 1 , 042,498 1 ,077,298 1 , 113,281 1,150,426 1,168, 630 1

.228,517 1 ,269,629 1 , 311,910 1 ,355,705 1 ,400,983 Front low 44068064 802,744 587,958 589
. 23 590 ,8 53 810 , 577 MOW 852,024 873,790 808,283 719.528 743,548 788 ,370 794,020 820 ,527 847,919 Total 7

.216,023 7.891

. 544 7 , 94&311 8,213,851 8,487

. 848 8,771,199 9,084,009 9,368,583 9,879 , 279 10 , 902,404 10 , 338,315 10,681,373 11 , 037,051 11 ,4 05.432 11,787,214 National Top Load 8, 254,926 &450,775 11221,714 5,970,170 8,189,473 8 ,375,429 8,988,361 8

. 808.188 7,035 ,478 7, 270,343 7 , 513,049 7,763,958 8 , 023,040 6 , 290,874 11, 567,849 Top Load Er-7,S5 388,134 518,082 711,053 918,489 948

. 150 880 , 835 1 , 013,579 1 , 047,415 1,082,381 1 , 118,514 1,155 , 854 1 , 194,440 1 , 234,314 1,275,519 1 , 318,100 Top Lord 008

-Aai atm 154,070 258,031 355,527 459.244 474 , 575 400 ,4 18 5M,769 523,706 541,190 559, 257 577,927 597, 220 617

. 157 637 , 780 859.050 Front load 604,076 688,003 688,818 1 ,102,165 1, 138,8361 1 ,177,902 1, 218,294 1,258,898 1.296.857 1 , 342217 1 ,387,024 1 ,433,328 1 ,481,177 1,539,923 1 ,581,720 Front Load Mvano64 69&314 688,083 711.053 734 , 790 759,320 784,868 610,883 837,932 885,905 894

.811 924, 893 965, 552 987,451 1,020 ,415 1 , 054,480 Total 8 , 071,522 8,601,034 6,888 , 163 9 , 184,877 9 ,491,497 9 , 808,353 10 , 135,788 10 , 474,150 10 , 823,810 11

. 185,142 11,550,537 11.944.397 12 , 343,138 12 , 755,191 13 , 100,999

Top Load 73 % 71% 88% 81% 61 % 41% 61% 61% 81% 81 % 81% 81% 61% 61% 61% Top Load EntegyStar 5% 8% 7% 8% 0% 8% 8% 8% 8% 8% 6% 8% 8% 8% 8% Top Load Non-Agitator 2% 2% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% FrontLoad 9% 10% 11% 13 % 13% 13% 13% 13% 13% 13% 13% 13% 13 % 13% 13% Front Load Adomorgad 10% 11% 13% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% P4,aot of NoOonal 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 11% 80bnoa d Natlan Top Lad 78% 75% 70% 85% 65% 85% 65% 85% 65% 85% 65% 85% 85% 85% 85% Top LOatl EnmrgyStar 4% 8% 0% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Top Lad nortAgaid. 2% 3% 4% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Front Lw o 7% 8% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% Fvtt L Oadd Mv400 d 8% 8% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% P-' d Nat-50 09% 89% 89% 89% 09% 89% 89% 89% 80% 89% 89% 69% 89% 89% 89% 945654l TOP Low 77% 75% 70% 85% 85% 05% 65% 65% 85% 85% 65% 65% 65% 05% 65% Top Lad En r

gySStar 5% 6% 8% 10% 10% 10% 10% 10% 10% t0% 10% 10% 10% 10% 10% TOP Load 6 Aafta0Or 2% 3% 4% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Front Load 7% 8% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% Front LOW Mvarww 9% 8% 8% 8 % 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 0% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%



# 44 0000209

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006

Appendix 2 California Only Standard Shipments C0685o Omy Standard C60aria 8

.518.0 St ,84,4 2004 2005 2068 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Qdfo0q Tip Load 623

.054 645 , 738 820.302 0 0 0 0 0 0 0 0 0 0 0 - 0 Top Load FmraySfa 48.700 53,449 64,757 0 0 0 0 0 0 0 0 0 0 0 0 Toy Load No,-Agitator 19,545 22, 370 27.102 97,410 90

. 328 93 , 344 0 0 0 0 0 0 0 0 0 Front Load 76 ,830 87,700 106,281 811,873 832292 653,407 600, 195 620232 640,937 745, 125 770,000 894, 117 913

.631 944 , 131 975,649 From Load Advan ad 07,570 100,227 121,430 174,921 100, 657 186,689 257 , 227 285,814 274

. 667 319

. 339 330

.000 378907 391,556 404,628 410,135 Total 653406 909,400 939,052 874,104 603264 933,439 857 ,422 1586,046 915,824 1 ,064,465 1 , 100,000 1.263.024 1,305 , 187 1

. 348,759 1 ,393.784 Babric® ot Nation Top Load 5,831,872 5

.805,037 5,601,412 5.377
. 722 5 ,557.247 5 , 742,765 5 , 934,477 8132 , 588 6 , 337,313 6

. 548,872 6

. 787.494 6 , 993,414 7,226 , 876 7,489 , 131 7,717,441 Top Load ErragySbr 321434 462.813 646,296 841,728 689, 828 688005 928.872 959,881 991 ,925 1 ,025,038 1 , 069,257 1 , 094,616 1

. 131,180 1 , 168,922 1,207.944 Top Load r010-985.00 134,526 235

.861 328425 427.119 441,377 456,112 471,338 467,073 503 , 333 520, 136 037 ,499 555 ,443 573 , 905 593 , 147 812.848 Front Load 527

.447 600, 378 762,566 978,229 1 ,008, 019 1 , 042,496 1,077,298 1 , 113261 1 , 160,626 1 , 188,830 1 , 228,517 1 ,289.929 1

.311.910 1 , 355,705 1.400.963 From Lad Adratoed 002,744 $87.656 509.823 590,853 610, 577 830,960 652 ,024 673 , 790 696, 263 718528 743,546 768,370 794, 020 620,527 847,919 Total 7218 , 023 7,891,544 7, 948,311 8,213 , 651 8 ,487,840 9 , 771,199 9,04,009 9,388 , 593 9,679,279 10 , 002,404 10 , 336,315 10

. 081,373 11 , 037,851 111,406 ,432 11 , 787,214 National Top Load 8,254,926 8

.450,775 6221,714 5,377 , 722 5 , 557,247 5,742,765 5,934477 8 , 132,586 8,337,313 6 , 548,872 6 , 767,494 6,953414 7228 , 876 7 ,468,131 7 , 717.441 Tap Load Erra99Sbr 368,134 518 , 002 71 1.0M 641,728 869,828 698 ,085 928,872 959,991 991,925 1 , 025,038 1,059257 1 ,094,818 1 , 131,180 1,168,922 1 ,207,844 Top Load nonAgaafor 154,070 250,031 355.527 514,529 531,706 549,458 471 ,338 407,073 503 ,333 520, 136 537,1199 565,443 571 ,985 593

. 147 812,946 Fiat Load 604,078 666683 888816 1,586 , 102 1,641,118 1 , 695,953 1 ,877493 1 ,733,493 1.791,383 1 , 933,956 1 ,998.517 2, 153,648 2226541 2299, 868 2,378,812 Fret Load 9dva504 690 , 314 688

.063 711,683 705,874 791,234 817.848 909 , 250 939 , 600 970 , 971 1,938 , 887 1.073,548 1,147 , 277 1 , 185,578 1 , 225,155 1 , 266.054 Total 0 ,071,522 6,601,034 8,888,183 9,007.755 9

. 301,132 9 , 704,837 9 , 921,437 10,252 , 639 10.694,004 11 , 936,869 11 , 436,315 11,944 , 397 12 , 343,138 12

. 755,191 13 , 160,999 C45forrio Tap LOW 73% 71% 08% 0% 0% 0% 0% 0% 0% 0% 0 % 0% 0% 0% 0% Top Load EndgySbr 5% 6% 7% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Tap Load 001 0

-991990 2% 2% 3% 10% 10% 10% 0% 0 % 0% 0% 0% 0% 0% 6% 0% From Load 9% 10% 11% 79% 70% 70% 70 % 79% 70% 70% 70% 70% 79% 70% 70% From Load Adva ood 10% 11% 13% 20% 20% 20% 30 % 30% 30% 30% 30 % 30% 30% 30% 30% Poro[ntd Notate! 11% 11% 11% 10% 10% 10% 9% 9% 9% 10% 10% 11% 11% 11% 11% Bolan of Nabn Tap Load 76% 75% 70% 65% 65% 65% 85% 65% 66% 65% 65 % 65% 85% 85% 65% Top Load Enm9ySbr 4% 8% 8% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Top Load na*Agibtor 2% 3% 4% 5% 5% 5% 5% 5% 5% 5% 5 % 5% 5% 5% 5% Fran Load 7% 6% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% From Loot Ad,

. I d 8% 6% 1% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% P01 008 N.6-1 89% 89% 09% 90% 90% 90% 91% 91% 91% 90 % 90% 89% 99% 09% 89% Not-al Top Load 77% 75% 70% 65% 65% 65% 65 % 55% 65% 65% 65 % 65% 65% 65% 65% Tap Load Eneryysbr 5% 6% 8% 10% 10% 10% 10% 10% 10 % 10% 10% 10% 10% 15% 10% Top Load n Agt4br 2% 3% 4% 5% 5% 5% 5% 5% 5 % 5% 5% 5% 5% 5% 5% From Load 7% 6% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% Fat Loud Adva ood 9% 8% 8% 8% 8% 8% 6% 8% 8% 0% 8% 8% 8% 8% 8% Total 100% 100% 100% 100% 100% 100% 100% 100% 190% 100% 100% 100% 100% 100% 100%



# 45 

# 210

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006

Appendix 3 GRIM Initiating Values 

# Basic Initiating Values for GRIM Source Retail Gross Margin 24

.0% Retailer financial reports, manufacturer interviews Cost of Goods Sold Top Load 78. 0% Manufacturer interviews Top Load Energy Star 78. 0% Manufacturer interviews 

# Top Load Non-Agitator 78.0% Manufacturer interviews Front Load 78.0% Manufacturer interviews Front Load Advanced 78.0% Manufacturer interviews 

# Selli SG ng , General and Administrative Costs &A Standard SG&A 16. 0% Manufacturer interviews 

# R&D 2.0% Manufacturer interviews Income Taxes 43.0% 2000 Washer rulemaking TSD Cas h Flow Items 

# Depreciation 2.0% Change in Working Capital 10.5% 2000 Washer rulemaking TSD Ordinary Capital Expenditures 2.5% Manufacturer interviews Asset Life 15 Manufacturer interviews 

# Cost of Capital 6 .65% 2000 Washer rulemaking TSD Conversion Costs Product ( Million) per Company $ 15 Manufacturer interviews Capital Costs Line (Million ) $ 50 Manufacturer interviews Unit $50 Manufacturer interviews 

# Line Capacity (thousand units) 500 Manufacturer interviews Companies Remaining 2007 California Standard 4 TIAX/Shorey estimate 2010 California Standard 3 TIAX/Shorey estimate



# 46 0000211

# Response of the Association of Home Appliance Manufacturers to the California Energy

Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006

Appendix 4 Base Case GRIM Cash Flows

8re Cane 2004 2005 2006 2007 2006 2009 2010 2011 2012 2013 2014 2015 2016 2017 SNP-la (000) Top Laed 8,255 6,451 8

.222 5 , 970 6 , 169 6

. 375 6, 588 6,608 7

.035 7 ,270 7,513 7.764 8, 023 8,291 Top LoW EnerySmr 368 516 711 918 949 981 1 , 014 1 , 047 1 ,082 1 , 119 1

. 156 1 , 194 1

.234 1.276 Top Land N011
-Aqa68 154 258 356 459 475 490 507 524 541 559 578 597 817 638 Front LOW 604 888 889 1,102 1,139 1 , 177 1.216 1

. 257 1 , 299 1 , 342 1.387 1,433 1 ,481 1.531 Front Land Advarumd 690 888 711 735 759 785 811 838 866 895 925 956 987 1020 T0W 6 , 072 8 , 601 8

. 888 9 , 185 9 , 491 9

. 808 15 , 136 10 ,474 10

. 824 11 , 185 11 , 559 11 , 944 12 , 343 12,755 RMa1 Pnm Top LOW 325 325 325 350 350 350 350 350 350 350 350 350 350 350 Top Ladd E0009998 400 400 425 450 450 450 450 450 450 450 450 450 450 450 Top Land 600.89 4000 825 820 815 000 600 600 800 800 800 800 800 800 090 800 Front Load 750 700 850 800 am 000 600 600 800 600 800 600 800 800 Frond LOW AdvanOSd 1,000 900 850 80D 600 800 800 800 800 800 600 800 800 800 Wel90bd 8000059 428 420 427 449 449 449 449 449 449 449 449 449 449 449 Me.9 48005 Revaw (BMM) Top LoW 1,545 1 ,593 1,537 1

.568 1 ,641 1,696 1,752 1 , 811 1 , 871 1

.934 1 ,888 2065 2 , 134 2,205 Top LOW Erw95tor 112 157 230 314 325 335 347 358 370 383 395 408 422 436 Top Loud Non*94elor 97 181 220 279 289 298 308 318 329 340 351 363 375 389 Front LOW 344 368 439 503 519 537 555 573 592 812 832 854 875 688 Frond L.099 Advanced 525 471 459 447 482 477 493 509 526 544 582 581 800 620 1644, 2

. 822 2

. 748 2 , 885 3

. 131 3,235 3 , 343 3 , 455 3 , 570 3 , 689 3

. 613 3 , 940 4.071 4

. 207 4.348
COGS Top Lamd 78% 1,205 1 ,243 1 , 199 1

.239 1 ,280 1

. 323 1,367 1 , 413 1 ,460 1

. 508 1.559 1 ,611 1 ,685 1.720 Top Load Enw95ter 78% 87 122 179 245 253 262 270 279 289 298 308 319 329 340 Top Load Non.Apdo0 78% 75 125 172 218 225 233 240 248 257 265 274 283 293 302 Front 1,049 78 % 209 286 342 392 405 419 433 447 482 477 483 510 527 544 Front LOW Advanoad 76% 409 367 358 348 360 372 385 397 411 424 439 453 468 484 Tottl 2.046 2 , 143 2,250 2, 442 2 , 524 2 , 608 2

. 895 2

. 785 2,878 2

. 974 3.073 3, 178 3.2112 3,391
Goon Mlo9in Top LOW 340 351 338 349 381 373 388 398 412 425 440 454 470 485 Top Lo0EnmrgSmr 25 35 51 69 71 74 76 79 81 84 87 90 93 98 Top LOW NO0A94600 21 35 48 61 83 66 68 70 72 76 77 80 83 85 F,OMLaod 76 81 97 111 114 116 122 126 130 135 139 144 149 164 Fmnt LOW 8406984 115 104 101 98 102 105 108 112 116 120 124 128 132 136 Tow 577 605 635 899 712 736 700 785 812 839 867

. 886 .926 957 SGBA 0008009008A 16% 420 440 482 501 518 535 553 571 590 610 630 851 673 696 R&D 2% 52 55 56 63 65 67 69 71 74 78 79 81 84 87 Product Carnpabn E4p0nnea TOta 472 495 519 564 582 602 622 643 684 866 7 09 733 757 783 Prot eeforc 1ane4 8 Ffnenong 105 110 115 125 129 134 138 143 148 153 158 163 168 174

Tease 43% 45 47 50 54 58 58 59 61 83 66 88 70 72 75 Net )n0-me Befae Financing 80 63 86 71 74 76 79 81 84 87 90 93 98 99

Cosh Fbw

9a11000me 60 63 66 71 74 76 79 Of 64 87 90 93 96 99 Depr99e(ion 2% 52 43 45 49 50 52 54 56 58 59 61 64 66 Be New Depred0lkm Change in Working C9i0Bl 11% (10) (11) 20) ( 9) (9) (9) 191 ( 10) (10) (10) fil l ( 11) (12) Cwh Fkaea ham Operations 112 95 100 100 116

. 120 124 126 132 1360 141 146 150 155 Cop40f 6078Wawae Ordk-yCopkol Eopeo05000 3% (66) (09) ( 72) 478 ) (81) (84 ) ( 66) (89) (92) (05) (98 ) ( 102) (105) 1109) COrnerabn CoPM E4pendi4urod C4uh 0904 In Inve0lfnent ( 66) (69) (72) 178) (81 ) ( 84) (66) (89 ) ( 92) (95 ) 198) (102) (105) (109)
Not Cash Flow 47 27 2 7 22 35 36 37 38 40 41 42 44 45 47 NPV 7% $623.28



# 47 

# 000 

# 0212

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# Appendix 5a California Standards Case GRIM Cash Flows

- 22% Gross Margin

CA Qtly Sumer d • 2 Levels , One ter 2007

. One for 2010 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Smpmonts (000) Top Load 8.255 8.451 8,222 5,378 5,557 5,743 5,934 6,133 6.337 8,549 8,787 8,993 7,227 7,488 Toploel Ener9808 368 518 711 842 870 899 929 960 992 1,025 1,059 1,095 1,131 1,189 Top Laad Non AO844ar 154 258 358 $15 532 549 471 467 503 520 537 555 574 593 Frol8 Land 804 BOB 889 1,588 1.841 1.696 1,877 1,733 1,791 1,934 1,999 2,154 2,226 2,300 From Load Advaucad 890 888 711 768 797 818 909 940 971 1 039 1 074 1.147 1.106 1225 Toad 8,072 8,801 8,988 9,088 9,391 9,705 9.921 10,253 10,585 11,087 11,436 11,944 12,343 12,755 R.W1 Prko Top Load 325 325 325 350 350 350 350 350 350 350 350 350 350 350 Top Load Ene95188 400 400 425 450 450 450 450 450 450 450 450 450 450 450 Too Load North 825 820 815 800 600 800 800 800 800 law 000 800 800 800 Frond Load 750 700 850 800 800 800 600 600 800 600 800 800 800 600 Front Lori Advanced 1,000 900 850 800 800 800 800 800 600 800 800 800 800 8(0 We (pl880 Av ga 428 420 427 466 466 466 464 464 484 466 466 468 468 468 MtaMaceren Revmwo (SMM) Top Lead 1,545 1,593 1,537 1.430 1,478 1,528 1,579 1,831 1, 886 1 ,742 1,600 1,860 1,922 1,007 Top Lead Ew9069 112 157 230 298 297 307 318 328 339 351 362 374 307 400 Top Load Noe.A94a1o7 97 101 220 313 323 334 287 298 306 318 327 338 349 381 FrmtLoad 344 356 439 724 748 773 785 790 817 682 911 962 1,015 1,049 Front Load Advanced 525 471 459 468 481 497 553 571 590 832 653 698 721 745 Toms 2,622 2.740 2,885 3,221 3,320 3,440 3,501 3,817 3,38 3,922 4,053 4,262 4,394 4.541
COGS Top Load 76% 1,205 1,243 1,199 1.116 1,153 1,102 1,231 1,272 1,315 1,359 1,404 1,451 1,499 1,549 Top Load ErcrgSw 78% 87 122 179 225 232 240 248 256 265 273 283 292 302 312 Top Load 800.5480 r 78% 75 125 172 244 252 261 224 231 239 247 255 283 272 281 Fmm Load 78% 289 280 342 585 584 603 597 817 637 688 711 766 792 818 From Load Advarx04 78% 409 387 358 363 375 398 431 446 480 493 509 541 502 581 New Op-di.. 0 3 5 7 6 10 10 10 10 10 10 10 10 10 Toter 2,046 2,146 2,255 2,519 2,604 2,693 2,740 2,632 2,926 3,009 3,172 3327 3,437 3,552 Gloss Mvyn Top Load 340 351 338 315 325 338 347 359 371 383 396 409 423 437 Top Load Eney808 25 35 51 83 65 88 70 72 75 77 80 82 85 88 Top Land N0n4948Z0 21 35 48 69 71 73 63 65 67 70 72 74 77 79 Front Load 76 81 97 159 165 170 168 174 180 194 200 216 223 231 Front Lead Advanced 115 104 101 102 106 109 122 121 130 139 144 153 159 184 New Deprecation 0 (3) (5) (7) (6; (10) (10) (10) (10) (10) (10) (101 (10) (10) Total 577 602 630 702 724 747 760 788 812 853 682 925 951 985 SGSA Standard SGBA 16% 420 440 482 515 533 550 580 579 598 628 549 680 703 726 R&D 2% 52 55 so 64 87 69 70 72 75 78 81 65 88 61 Prodo8(Ca000000 Experoe, 20 20 20 15 15 15 Tow 492 515 539 595 814 634 630 651 873 700 730 765 791 817 Profit Bamre Taxm & Fioankoog 65 87 80 101 110 113 130 135 140 147 152 160 166 172

Taxes 43% 37 38 39 46 47 48 56 58 80 63 85 69 71 74
Net browns 9e4010 Flnano g 48 50 81 83 64 74 71 00 84 87 91 94 98

Cash Flow Operatons Netlnwrne 48 50 52 61 63 64 74 77 80 64 87 91 94 96 Door acwbn 2% 52 43 45 50 52 54 55 57 59 61 83 67 89 71 New DeprocYwn 3 5 7 8 10 10 10 10 10 10 10 10 10 Clwpeln Working Capital 11% (1,) (12) (28) (9) (9) (5) (10) (10) (15) (11) (16) (12) (12) Cash Fbra from Operations 101 85 90 90 114 119 134 134 138 140 149 152 162 167 cap" Expendioeoa Drdwry Capital Expenderaee 3% (86) (89) (72) (81) (83) (86) (88) (90) (93) (98) 1101) (106) (110) (114) Crt o,lle Capital Eopendraae (38) (38) (25) 125) (25) Cash Used In Invoili0ant (66) (106) (110) (1081 (108) (111) (08) (90) 493) (98) (101) (106) (110) (114)
Nat Cash Flow 35 (21) (19) (15) 6 8 46 43 45 42 46 45 52 53

NPV 7% 0523,42 DMm (599.86) Prcent o40 a Cam Value -18%



# 48 0000213

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET- 100 [April 7, 2006] April 7, 2006



# Appendix 5b California Standards Case GRIM Cash Flows

- $71.50 per unit Gross Margin

CA Only Standard • 2 Levels, One for 2007 , Om for 2010 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Stupn orts (000) Top Load 6,255 6

.451 0,222 5 ,378 5, 557 5 ,743 5 ,934 6, 133 0,337 6, 549 6,767 6,003 7 ,227 7,468 Top Load EnagyStar 388 516 711 842 870 899 929 960 982 1,026 1 ,059 1 ,095 1 , 131 1,160 Top Load Non
-A560tor 154 258 356 515 532 549 471 487 503 520 537 555 574 593 Front Load 604 688 589 1 ,568 1 , 841 1 , 696 1,677 1 , 733 1 ,791 1 , 034 1 ,999 2,154 2 , 126 2,300 Front Load 84469064 690 688 711 766 791 610 909 940 971 R a 1

. 074 !

. 147 1 , 188 1,225 Total 8,072 8,601 8,896 9,060 9,391 9, 705 9,921 10, 253 10, 595 11,067 11,436 11 ,944 12 ,343 12,755 Retail Paco Top Load 325 325 325 350 350 350 350 350 350 350 350 350 350 350 Top Load Enargystor 400 400 425 460 450 450 450 450 450 450 450 450 450 450 Top Load Non-898ator 825 820 815 Boo 800 800 800 600 600 600 600 800 800 000 Front Load 750 700 650 800 600 BW 600 600 600 800 800 600 000 600 Frail Load Mvmrcad 1 ,000 900 650 800 600 600 800 600 800 800 000 800 800 000 Weighed Average 428 420 427 466 466 466 404 484 461 486 466 466 468 468 Manufacturor Ravam,6 (6MM) Top Lord 1 , 545 1 , 593 1 ,537 1 ,430 1 , 478 1 , 528 1 , 579 1,831 1 ,666 1

. 742 1 ,800 1 ,880 1.922 1,067 Top Load EnergyStar 112 157 230 288 297 307 318 328 339 351 382 374 387 400 Top Load Non-ft t tof 97 181 220 313 323 334 287 296 306 318 327 338 349 381 F,0t4 Lead 344 365 439 724 748 T73 765 790 817 682 911 962 1 ,015 1.049 Front Laid Advanced 525 471 459 466 481 487 553 571 690 632 653 698 721 745 Total 2 , 622 2,748 2 ,085 3, 221 3, 328 3, 440 3 , 501 3, 61 3, 738 ,922 4,053 4,252 4, 384 4,541 COGS Top Load 71 % 1,098 1

. 132 1 ,092 1,040 1

.081 1,117 1 , 154 1,193 1,233 1 , 274 1 , 316 1,360 1,408 1,453 Top Land EnwgyStar 76% 86 120 178 228 235 243 251 260 268 277 287 296 306 318 Top Leas Non
-844omr 89% 86 142 105 276 285 295 253 261 270 279 288 209 308 316 Front laid 87% 301 317 376 611 631 652 845 687 869 744 788 828 858 884 Fwd Load Advanced 91 % 475 421 408 411 424 439 489 604 521 557 576 616 636 657 New Deprodgion 0 3 5 7 8 10 10 10 10 10 10 10 10 10 Total 045 2 , 135 2,255 2 , 578 2,685 2 ,756 2 ,801 2,894 2,991 3,141 3, 46 3,408 3,52 1 1 3,639 Gross Margin Top Lead 71

. 50 447 461 445 385 397 411 424 438 453 468 484 500 517 534 Top Lead EnorgyStar 71.50 26 37 51 60 62 64 66 69 71 73 76 76 81 64 Top Load Non
-841ita14r 71,50 11 18 25 37 38 39 34 35 38 37 38 40 41 42 Front Load 71

. 50 43 49 64 114 117 121 120 124 128 138 143 154 , 159 164 Front Lead Advanced 71.50 49 49 51 55 57 58 65 67 69 74 77 62 65 68 Naw Depredation 0 (3) (5) (7 ) (8) (10) (10) (10) (10) ( 10) (10) It0 ) ( 10) (10) Total 577 612 631 843 663 684 699 723 748 781 608 644 673 902 SGMA Standard SGM 16% 420 440 462 515 533 550 580 579 598 628 649 680 703 726 R&D 2% 52 55 58 64 67 69 70 72 75 78 81 55 Be 91 Product Converwon E47.1040 20 20 20 15 15 15 Total 492 515 539 595 814 634 630 651 673 706 730 7 85 79 1 817 Pmy6 Sellers Tam 6 Financing 85 0 91 48 49 50 69 72 75 75 78 ' 79 82 85

Tea. 43% 37 42 39 21 21 21 30 31 32 32 34 34 35 36 Not Inert,. Before Financing 48 56 62 28 2 8 39 41 43 43 4 45 47 48

Call Ftpv Oparolkwa Not l100810 48 56 52 28 28 28 39 41 43 43 45 45 47 48 Depreciation 2% 52 43 45 52 53 ' 55 58 58 80 63 65 68 70 73 Now Depreciation 3 5 7 8 10 10 10 10 10 10 10 10 10 Cnapa in Waking Capital 11% (9) (13) (34) (9) (9 ) (5) (10) 110) ( 16) (11 ) ( 17) (12) (12) Cash Flows from 08er050110 101 92 00 52 00 64 101 99 102 100 108 106 115 119 Capital E,peaitunra Ordinary Capital Expenditures 3% (66) (69) (72 ) ( 81) (831 ( 86) (88 ) ( 90) (93 ) ( 98) (101 ) ( 106) (110) (114) Conversion Capital Eapendltunis (38) (38 ) ( 25) (25) (25) Cash Used In Invmtmant (66) (106) (110 ) ( 106) (108 ) ( 171) (88 ) ( 90) (93 ) ( 98) (101 ) ( 106) (110) (114)

Not Cash Flow 3 5 (15) (20 ) ( 54) (28) ( 27 ) 13 

### 9 (0) 5

NPV 6 , 7% (618,33) Dolts ($641 60) Paro0nt of Base Case Value .103%



# 49 

# 000021.4

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# VIII. CONCLUSION
AHAM concludes these comments by summarizing the information presented above through responses to the specific questions asked in the Federal Register notice.
1. Are California ' s water interest " unusual and compelling " and how do they compare to those in the nation and of other states? California's water interests are not "unusual and compelling." In fact, they are not significantly different than that of many regions and states even if they are above average. Nor is there a significant nexus between clothes washer water use and these water interests since residential clothes washer use and related energy use is a small fraction (about 1 percent) of total California water use. This explains why a clothes washer water energy standard is not contained in the state's water plan.
2. Are there other factors and information , in addition to the California petition, that the Department should consider in determining whether California's water interests are "unusual and compelling"? Experts disagree markedly with the conclusion that California is in dire water situation and there certainly is no record in ' California that clothes washer water use reduction through stringent standards is a key component of a plan.
3. Are the water use issues " substantially different in nature and magnitude from those prevailing in the United States generally "? Should the phrase "in the United States generally" be interpreted to include comparison of different regions as well as national averages ? Are the water use issues in California substantially different in nature or magnitude than those prevailing in other Western states?"
The record is clear that the California situation is not much different than that in other Western States, as well as other regions, and that, therefore, California has no more of a case than Nevada, Colorado or Oregon, for example. This means that a decision to grant the California standard opens up the federal standards program to proliferation of state standards and their devastating cumulative effect. Since some parts of California are above the national averages for water prices and some are below, it makes sense also to compare regions as well as states in other parts of the United States. We also have shown that the national average clothes washer water usage data presented by CEC from the American Water Association is dated and inconsistent with more recent analysis undertaken in California



# 50 0000215

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET- 100 [April 7, 2006] April 7, 2006



# 4. Are there "alternative approaches to ... [clothes washer] water savings," "water savings or production ", or "alternative policies or programs " that could achieve the same water savings in California as could be achieved by the California clothes washer standards? Relatively minor improvements in the agricultural and other water use efficiencies would far outweigh anything that could be done on clothes washers. Even in the residential sector, significant movement towards metering and reductions in outdoor landscaping water use will have dramatic effects. With respect to clothes washers, the combination of the federal standards, Energy Star and aggressive California incentive programs already underway will provide significant water and energy savings.
5. Are there estimates of market-induced improvements in efficiency of all products subject to the California regulation? We have shown that the CEC underestimates the accomplishments already occurring in California and that are likely to occur in the future due to market-induced improvements. 6. Is the analysis used in the California petition accurate ? For example, are the state savings estimates correct? How valid are the states assumptions? AHAM's response is replete with challenges to the faulty nature of the CEC's assumptions including its gross exaggerations of the savings which will be attained.
7. Is California ' s petition statement that the water supplies are not " fungible" and it is very difficult transferring these waters from one section of the state, accurate ? Are the ways California can transfer water more easily? Water transfers occur and are being promoted in California. There is extensive fungibility of water supplies and multi-purpose use of water supplies for both agricultural and residential purposes.
8. What impacts would the state standards have on manufacturing , marketing, distribution, sale or servicing covered products on a national basis? The loss of conventional top load product in California in and of itself has a significant negative effect on the national market. Second, the burden of attempting to convert a large amount of production to the needed front loaders and equally expensive non-conventional top loaders will have a significant impact on manufacturers' cash flow, profitability and likelihood of maintaining their domestic employment base.

51 

# o O i

# Response of the Association of Home Appliance Manufacturers to the California Energy Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [Apri17, 2006] April 7, 2006



# 9. Will the California clothes washer standard disadvantage smaller manufacturers or dealers or lessen competition in California?
Please see the comments of Alliance Laundry particularly with respect to smaller manufacturers . California distributors and dealers will suffer from a radical decrease in the type and breadth of their product lines, losing sales to other states.
10. To what extent would the California standard cause a burden to manufacturers to redesign the residential clothes washers? In order to sell in California, manufacturers will have to turn over the vast majority of their model line. Since this is impractical within some existing facilities and platforms, California's action will provide a great impetus to further movements of manufacturing from the United States and direct sourcing from foreign firms, particularly in Asia.
11. Would the California standard result in the reduction of product availability or sales volume? The California standard will result in the total absence of the basic $300-$400 top mount conventional clothes washer. Californians will be required to pay upwards of double the price for even an entry level clothes washer.
12. To what extent is a California regulation likely to contribute significantly to proliferation of state appliance efficiency standards ? What cumulative impact would such requirements have? Because California's interest is not materially different from that of several states and regions there will be few barriers for other states to follow-on with similar waiver requests. States are now considering legislation that facilitates waiver requests without any need for legislative action. See, e.g., Maine LD 2041. Each state program adds to the administrative, logistical and cost burden for manufacturers.
13. Will the California regulation impact the availability in the state of any covered product , type (class or performance characteristics ), including reliability, features , sizes , capacities and volumes that are substantially the same as those generally available in the state? It is hard to envision a state regulation that will have more of an impact in wiping out the availability of a standard American product on which hundreds of millions of consumers have relied for 50 years. The consumer benefits of easily accessible, top-load machines, with desired cycle times, wholly reliable rinseability and cleanability, and all



# 52 

# 0 '40 3L

# Response of the Association of Home Appliance Manufacturers to the California Energy

Commission Petition for Exemption from Federal Preemption of California's Water and Energy Conservation Standards for Residential Clothes Washers Docket EE-RM-PET-100 [April 7, 2006] April 7, 2006



# available at $300 entry-level prices will be eliminated from California if the Department grants this petition. Respectfully submitted,



# David Calabrese Vice President, Government Relations

Of Counsel: Charles A. Samuels

Mintz Levin Cohn Ferris Glovsky and Popeo PC 701 Pennsylvania Avenue, N.W. Washington , DC 20004 Direct Dial : 202-434-7311 E-Mail: casamuels (&rnintz.com

53 WDC 384454v.2 00(2021.8

# Comments

# Samuel W. Bodman

Secretary of Energy c/o Ms

. Brenda Edward-Jones United States Department of Energy Building Technologies Program, Mail Stop EE

- 2J, Room 1J-018 1000 Independence Avenue, SW Washington , DC 20585
RE: Docket No. EE - - PET-100 Petition to Exempt from Preemption, California's Water Efficiency Standards for Residential Clothes Washers

Overview 

# The California Urban Water Conservation Council supports the California Energy Commission Petition to exempt from preemption filed on behalf of the State of California

. Sustainable water efficiency is a focus of our efforts to assure that a safe and reliable water supply is available to California citizens , businesses and the supporting environment . The Council is a consortium of more than 350 water retailers and environmental groups, working together to secure the water future of California

. Our member water agencies represent more than 75% of the urban water deliveries throughout the state. The heart of the Council is the Memorandum of Understanding that all members sign , pledging to implement the Best Management Practices ( BMPs) for water efficiency. These 14 BMPs include a comprehensive roster of programs to garner water conservation from water users and within the operations of the water agency itself

. Specifically , high efficiency clothes washer incentive programs are designated as BMP 6. 

# Water agencies implement these BMPs as a comprehensive strategy, implementing every feasible and cost effective means to improve water resources through reductions in water use . Costs for conservation are compared to costs for developing new water sources to meet the growing population ' s demand. All cost effective methods are included in an integrated resource plan, and all cost effective and reliable means are implemented to meet the local needs of each water provider. The security of the future water supply usually includes a large array of strategies, including but not limited to:

• Imported water from shared sources' • Local groundwater • Distribution system upgrades • Leak detection and repair 

# • Canal lining • Water recycling • Water reuse • Reclaimed water 

# 0000219

# ® Groundwater recharge • Incentives and rebates for high efficiency appliances ® Direct installation of high efficiency appliances • Plumbing retrofits ® Landscape audits and system upgrades ® Water budget based rate structures ® Water transfers • Inclining tier rate structures Since 1991, Council members have implemented water efficiency strategies resulting in water savings of more than 1.3 million acre-feet; this is equal to the annual water use of more than 3 million homes. California is already the most water efficient state in the nation, and yet we continue to lead the world in developing new water conservation strategies. Council members have expended between $85-90 million annually for nearly 10 years to implement these conservation strategies. The costs are borne by every ratepayer through higher water rates. There are limits to our ability to solve our own water problems when Federal standards preempt the implementation of readily available technology. Our only means to improve clothes washer efficiency and eliminate the water waste is to offer financial incentives for the purchase of the high efficiency models. Administrating rebates and vouchers is very costly and overly burdens water agency staff and resources. In addition, financial incentive programs have only limited effect on the overall market share. Even doubling the incentive values would not achieve a 50% market share for high efficiency washers. Administering rebate programs for washers is costly to all ratepayers, has limited effect, and is only necessary due to the tack of improved and updated efficiency standards.The members of the Council have already implemented every feasible and costeffective method to save water. There are no additional efficiency options to substitute for the proposed clothes washer efficiency standards that are not already implemented. California is not asking clothes washer manufacturers to bear an undue burden of the State's water efficiency needs. California is only asking that the high efficiency clothes washer models already sold in this state be made the norm for all consumer purchases.

California ' s Interests are Unusual and Compelling California has the most extensive water importation and distribution system in the nation. In California, 90% of the population receives water from sources more than 250 miles away. The extensive importation and distribution of water supplies not only increases costs; it greatly increases security risks. Much of California's water supply travels through the Sacramento Delta, contained and channeled to Southern California through a myriad of levees, canals and aqueducts. Now, these aging levees are becoming increasingly susceptible to failure from high tides, earthquakes or flooding. In our recent Spring rains of 2006 two levees in this sensitive area were breached. The liability has become so great to California's water supply that the Governor of California has recently requested that the Delta levees be granted National Emergency status.

2 of 5 

# OOk2O

# In addition to the Delta levee issue, seawater intrusion threatens groundwater sources

where over-pumping for water supply has become necessary. Further surface water interruptions could cause irreparable damage to even these groundwater sources. No other state is so susceptible to the catastrophic effects of natural or intentional interruptions in water supply. Water use efficiency becomes one of the few options that can greatly minimize the severe negative impact of major interruptions in California's unique and precarious water supply network. California's water use issues are substantially different in nature and magnitude from those in other western states. Consumer demand often outstrips the water supplies that are available, despite California consumers using less indoor water per capita than many other states. California's groundwater basins have been historically over-drafted. California's Colorado River allotment of 4.4 million acre-feet is an additional curtailment; the US Bureau of Reclamation has instructed the state to cut back nearly 800,000 acre-feet from its current consumption of 5.2 million acre-feet. In order to meet this challenge, California will need a variety of supply tools. Water efficiency appliance standards are one of many approaches California is taking to proactively diversify water supplies. Failure to deal successfully with these cutbacks will result in a severe economic impact to California, and thus the nation as a whole.

California ' s Unique Water

- Economy Situation 

# California's economy, equivalent to that of the fifth largest country worldwide, is dependant on an adequate and reliable water supply. In 2004 California ranked first in the nation in gross state product: $1.5 trillion worth of goods and services. Impacting California's economy with water shortages will have a negative ripple effect on not only the State, but on the entire nation. California's industries and agriculture -- which supply the nation with computer products, manufactured goods, and 40% of its fruits and vegetables -- need water to remain viable. It is indisputable that water efficiency offers California its most cost effective source of water. Clothes washer efficiency standards can improve California's economy by making water available for other productive uses, within California and the surrounding western States.
California's Water Efficiency Benefits Other States The Colorado River is one of California's major water sources. Many other Western States share this water source, and water allotments exceed the safe limits of water diversion. As water use efficiency improves in California, the State will be less dependent upon water deliveries from the Colorado River. This provides some relief on the Colorado River in periods of sustained drought. As California reduces its water draw from the Colorado River, this water becomes available for other western states as well as the environment.
Alternative Approaches Implemented There are many alternative cost-effective methods to improve water efficiency, and we are already implementing them. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part. California state law

3 of 5 

# 0000221

# requires water agencies to evaluate water efficiency options and water supply options equally

in its planning process

. Implementation is required for all cost

-effective strategies. Improving the efficiency of clothes washers does not supplant other reasonable means that might be available. The State of California cannot afford to dismiss any reasonable and cost effective methods to decrease water demand

. Water availability, safety concerns and legal rights limit the state water suppliers ' ability to increase water production

. Reclaimed water offers potential and is being pursued throughout the State , but its applications are limited to nonpotable uses and it requires a significant investment in dual distribution networks and building design

. Desalinization requires development and operating costs far greater than traditional water sources and is highly energy

-intensive in a state that is taking measures to reduce its overall energy use and greenhouse gas emissions. There is no single solution to secure California ' s water future

. We cannot afford to dismiss any reasonable conservation strategy

- especially high-efficiency clothes washers that are already in evidence in the marketplace.
Exemption from Preemption is Necessary Water efficiency standards for appliances are not the only solution , but are a very important part of a large array of strategies to solve California's impending water crisis. Clothes washers are a major water use in 80% of homes

. High efficiency washers save more than 50% of the water wasted by traditional washers. A typical family using a non-efficient washer wastes more than 6,000 gallons of water per year

. Currently , our only available action to reduce this wastage is to offer financial incentives such as rebates to encourage the purchase of the high

- efficiency washers; this method has limited effect and is very costly to taxpayers and ratepayers, compared to appliance standards

. Even doubling the incentive values would not achieve a 50% market share for high efficiency washers

. Rebate values and administration costs are all passed down to the taxpayer or ratepayer, who bear an undue burden because improved washer efficiency standards cannot be adopted by the State.
Water Savings Impact Projections The Council has reviewed the California Energy Commission (CEC) Petition . The water savings projections included in the Petition coincide with the Council ' s benefit-cost methodologies and savings estimates

. The projections are reasonable , and are actually more conservative than Council projections . The CEC projections appear to presume that a Water Factor (WF) standard of 8.5 will result in all washers meeting that standard , and assume none .will be more efficient

. Our experience suggests that an 8.5 WF standard will result in many consumers purchasing washers with even greater efficiency. The Council expects that a WF standard of 8.5 might easily result in an average WF of washers purchased to average 7.5 WE, or less. The beneficial impact of water efficiency standards is probably much greater than the CEC Petition suggests. The CEC Petition includes conservative water saving projections of more than 204,500 acre
-feet of water saved annually from the implementation of the standards

. This equates to

4 of 5 

# 0000222

# the water use of more than 450,000 homes. The Council estimates the water savings to be

10% to 20% greater than the CEC Petition reveals. Water and energy prices are escalating faster than most other consumer costs. This problem has become more acute since the date that the CEC submitted the Petition. The rise of water.and energy costs, because they are non-discretionary, has a very negative impact to the average homeowner. As stated before, 80% of homes in California have an in-home clothes washer. Water efficiency standards are a financially prudent method to improve the economic stability of 80% of California homes. In addition, the water efficiency improvements reduce operating costs of water purveyors, which benefits all ratepayers. High efficiency washers actually cost the ratepayers less, based on lifecycle costs. Thus, the citizens of California will financially benefit when the clothes washer standards are implemented Efficiency Standards Do Not Limit Purchasing Options 

# Manufacturers are already prepared to meet the demands of the efficiency standards. According to the Energy Star listings, consumers have 26 brands and 195 different models among which to choose for washers meeting the 8.5 WF standard. The 6.0 WF standard is four years away; already 15 different brands offer 122 different models. New models meeting the standards are introduced weekly. Manufacturers have responded to the demand for water efficiency beyond any expectations. Water efficiency technology is available to all manufacturers for use in their designs. In California, water is no longer a resource that can be wasted because efficiency is perceived to be inconvenient to manufacturers or consumers. Clothes washer efficiency standards must be implemented to meet the cost-effective technology readily available.

Preemption is Necessary, Prudent and Justified 

# Each year that we delay implementing a more efficient standard means approximately 7% of the clothes washers annually replaced will be replaced with inefficient water-guzzling models that will waste water and energy for estimated consumer life of 14 years. We strongly urge you to accept the CEC's Petition to allow California to determine its own water future without the need for Federal assistance. Please grant the preemption necessary for California, its citizens, and the California Urban Water Conservation Council to secure a safe and reliable water supply for the state.

Sincerely,

Mary Ann Dickinson Executive Director

5 of 5 

# 0000 223

# April 7, 2006

Mr. Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585



# RE: Docket number EE-RM-PET-100, Petition To Exempt From Preemption, California's Water Efficiency Standards For Residential Clothes Washers

Dear Mr. Bodman, The City of Downey supports the California Energy Commission petition to exempt from preemption California's Water Efficiency Standards for Residential Clothes Washers, filed on behalf of the State of California

. Sustainable water efficiency is a major aspect of our efforts to assure that a safe and reliable water supply is available to our residents, businesses and public areas. Water use projections indicate that by fiscal year 2009/2010 the City of Downey will need to deliver 17,440 acre-feet per year to consumers within the City of Downey service area. This is an increase of over 760 acre-feet from fiscal year 2004/05. In order to meet future water demands, the City has adopted a water management plan that utilizes water conservation as an integral aspect of meeting the City's future needs. We at the City of Downey urge you to consider the unique characteristics of California that offers convincing reasons for this state-wide exemption. We ask that you consider the following:
California 's Interests are Unusual and Compelling 

# California has the most extensive water importation and distribution system in the nation. Most of the state's water demand is more than 300 miles from the water source. Much of California's water supply travels through the Sacramento Delta, with the supplies destined for Southern California traveling through a myriad of levees and canals that traverse the Central California valley. Now, many of the aging levees in the Sacramento Delta have been found to be susceptible to failure. The extent of the problem has become so great that the Governor of California has recently requested that the Delta levees be granted National Emergency status. Should levees in certain areas of the Delta fail, there could be immediate impacts to the water



# ®®00224

# supplies of Southern California. The sources of failure include natural failure caused by

age or poor maintenance practices, failure due to catastrophic flooding or earthquake, or failure caused by intentional acts.
In addition to the supplies from the Sacramento Delta region, Southern California also receives vast amounts of imported water from the Colorado River from the Metropolitan Water District of Southern California (MWD). MWD imports water through the use of lakes, canals, dams and pump stations that extend from the Colorado River to much of Southern California, supplying an estimated population of over 18,000.000. This supply system is also susceptible to failure by earthquakes or intentional acts. Although both combined supply sources can meet the needs of Southern California at this time, limits to the amounts of water that can be exported from the Sacramento Delta and the Colorado River can change, impacting the amount of water that can be utilized by this highly populated, business oriented, and diverse geographical area. No other state is so susceptible to the catastrophic effects of natural or intentional interruptions in water supply. Water use efficiency can greatly minimize the severe negative impact of major interruptions in California's unique and precarious water supply network.
California' s Unique Water-Economy Situation The State of California, with the fifth largest economy in the world, is highly dependant on an adequate and reliable water supply. Water shortages would have an immediate impact on the economy on the State, which would then impact the economy of the rest of the nation. Water efficiency offers California its most cost effective source of water to feed its economy; an economy the entire nation depends on for financial stability. Alternative Approaches Implemented There are many other cost-effective methods to improve water use efficiency, and we have already implemented a number of them. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part. The City of Downey evaluates water efficiency options and water supply options equally in its planning process. We strive to implement all of the most cost-effective strategies available . Improving the efficiency of clothes washers will not reduce our efforts to move forward with other water conservation activities. Our efforts to provide a reliable source of water to our costumers include the following: 

# • Reduced Rates For Recycled Water Use Public Education • Zero Water Consumption Urinal Program • Pre-rinse Spray Nozzle Rebates • High Efficiency Clothes Washer Rebates • Weather Based Irrigation Controller Rebates • Commercial Clothes Washers Rebates • Water Broom Rebates

S

# The City of Downey cannot afford to dismiss any reasonable and cost effective

method to increase water supply or decrease water demand

. Recycled water offers potential , but is limited to non

-potable uses and requires a substantial investment in distribution network

. design and construction

. Desalinization requires development and operating costs far greater than traditional water sources
. In addition , increasing desalinization increases energy use, while California is taking measure to reduce its energy use and greenhouse gas emissions. There is no single solution to secure California's water future, and the City of Downey is committed to provide a reliable source of water to meet the needs of the community it serves.
Exemption from Preemption is Necessary Water efficiency standards for appliances are not the only solution, but are a very important part of a large array of strategies to solve our impending water crisis. Clothes washers are a major water use in 80% of homes. High efficiency washers save more than 50% of the water used by traditional washers. A typical family using an efficient washer could save up to 6,000 gallons of water per year. For the City of Downey this represents savings of approximately 117,474,000 gallons of water per year. We must reduce this waste by every means available, without undue financial burden to the ratepayers. Currently, our only available action is to offer rebates to encourage the purchase of the high- efficiency washers; this method has limited effect and is very costly, compared to appliance standards. Ratepayers bear an undue burden because washer efficiency standards cannot be adopted by the State. We urge you to accept California's petition to allow California to determine its own water future without the need for Federal assistance. Please grant the preemption necessary for California, its citizens and the City of Downey to secure a safe and reliable water supply for the state. 

# Sincerely,

for 

# . 2. Desi Alvarez, P.E. Director of Public Works



# 0000226

## Board of Directors

Robert F Topolovac, President Susa^ i Varty, Vice President Tnelrna M. Miller, Treasurer Marty A Muir, Secretary Harold L. Gano, Director 

# Municipal Water District General Manager David C MCCollom Deputy General Manager

Harry Ehrl.ch Assistant General Manager 

## Kimber,y A. Thorrer General Counsel Wesley Pe::u(2,



# 1966 Olivenhain Road , Encinitas, California 92024 1 Phone (760) 753-6466 I Fax 1,760) 753-4277 1 www.olivennaln.corr



# Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585
RE: Petition To Exempt From Preemption, California's Water Efficiency Standards For Residential Clothes Washers
Dear Secretary Bodman, The Olivenhain Municipal Water District (District) supports the California Energy Commission petition to exempt California from preemption filed on behalf of the State of California. Sustainable water efficiency is a major aspect of our efforts to assure that a safe and reliable water supply is available to California citizens, businesses and the supporting environment. The District urges you to consider the unique characteristics of California that offer convincing reasons for this exemption. Please consider the following:
California 's Interests are Unusual and Compelling California has the most extensive water importation and distribution system in the nation. Most of the water demand is more than 300 miles from the water source.The water source for the District is the Colorado River and the California BayDelta. The extensive importation and distribution of water supplies not only increases costs ; it greatly increases security risks . Much of California's water supply travels through the Sacramento Delta, contained and channeled to Southern California through a myriad of levees

. Now, these aging levees are susceptible to failure . The liability has become so great that the Governor of California has recently requested that the Delta levees be granted National Emergency status

. Seawater intrusion threatens groundwater sources where over
-pumping has become necessary ; further surface water interruptions could cause irreparable damage

. No other state is so susceptible to the catastrophic effects of natural or intentional interruptions in water supply

. Water use efficiency

A Public Agency -Providing Water I Wastewater Services I Recycled Water I1-lydroelectricty I Elf,, Forest Recreational Reserve Pure Excellence 

# 0000227,

# can greatly minimize the severe negative impact of major interruptions in

California's unique and precarious water supply network. The District serves approximately 24,000 customers, including 58,000 residents and imports 100% of its water. Improving water use efficiency is a vital part of our resource planning, and is the most viable source for water needed to meet the current and future needs of our customers. In addition, water efficiency minimizes the hardships our customers will endure in the event of potential water supply crises. 

# California's Unique Water-Economy Situation California's economy, equivalent to that of the fifth largest country worldwide, is dependant on an adequate and reliable water supply. Impacting California's economy with water shortages will have a negative ripple effect on the entire nation. Water efficiency offers California its most cost effective source of water to feed its economy; an economy the entire nation depends on for financial stability. Alternative Approaches Implemented There are many alternative cost-effective methods to improve water efficiency, and we are already implementing them. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part. The District evaluates water efficiency options and water supply options equally in its planning process. We implement all of the most cost-effective strategies available. Improving the efficiency of clothes washers does not supplant other reasonable means available. Our efforts to provide a reliable source of water California include the following: Weather-based Irrigation Controller and mulch Distributions Vouchers for water-saving devices Free surveys to inspect irrigation systems for leaks and make recommendations for efficient water use Irrigation system upgrade grants of up to $5,000 Various school and public information programs including classes on California friendly landscape design, drought tolerant plants and efficient irrigation systems California friendly landscape contests ® An ordinance prohibiting water waste ® Product standards support ® Water transfers ® Recycled water ® Groundwater recharge Desalination.



# 0000228

# The District cannot afford to dismiss any reasonable and cost effective method to

increase water supply or decrease water demand. Exemption from Preemption is Necessary Water efficiency standards for appliances are not the only solution, but are a very important part of a large array of strategies to solve our impending water crisis. Clothes washers are a major water use in 80% of homes. High efficiency washers save more than 50% of the water wasted by traditional washers. A typical family using a non-efficient washer wastes more than 6,000 gallons of water per year. We must stop this waste by every means available, and without undue financial burden to the ratepayers. Currently, the only available action toagencies is to offer rebates or vouchers to encourage the purchase of the highefficiency washers; this method has limited effect and is very costly, compared to appliance standards. Ratepayers bear an undue burden because washer efficiency standards cannot be adopted by the State. We urge you to accept California's petition to allow California to determine its own water future without the need for Federal assistance. Please grant the preemption necessary for California, its citizens and the District to secure a safe and reliable water supply for the state. Sincerely, OLIVENHAIN MUNICIPAL WATER DISTRICT 

# I 

# n

David C. McCollom General Manager



# OOOO229

## DIRECTORS 43885 SOUTH GRIMMER BOULEVARD • P.O. BOX 5110, FREMONT, CALIFORNIA 94537.5110 MANAGEMENT

MARTIN L. KOLLER 

## (510) 668-4200 • FAX (510) 770-1793 • www.acwd.org PAUL PIRAINO President General Manager JUDY C. HUANG ROBERT SHAVER Vice President Engineering Manager JAMES G. GUNTHER KARL B. STINSON ARTHUR LAMPERT Operations Manager JOHN H. WEED WILLIAM 

# J. ZENONI Finance and Administration Manage[


# April 7, 2006
Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 RE: Petition To Exempt From Preemption, California's Water Efficiency Standards For Residential Clothes Washers - docket number EE-RM-PET-100 The Alameda County Water District (ACWD) supports the California Energy Commission petition to exempt from preemption filed on behalf of the State of California

. Sustainable water efficiency is a major aspect of our efforts to assure that a safe and reliable water supply is available to California citizens, businesses and the supporting environment. We at Alameda County Water District urge you to consider the unique characteristics of California that offer convincing reasons for this exemption. We ask that you consider the following:
California 's interests are Unusual and Compelling California has the most extensive water importation and distribution system in the nation. Most of the water demand is more than 300 miles from the water source. ACWD's supply comes from the Bay-Delta via the State Water Project (SWP) and the San Francisco Regional Water System (SFPUC) in addition to local: supplies which include groundwater from the Niles Cone Groundwater Basin. The SWP and SFPUC sources travel a significant distance to provide water for customers in ACWD's service area. The extensive importation and distribution of water supplies not only increases costs; it greatly increases security risks. Much of California's water supply travels through the Sacramento Delta, contained and channeled to the Bay Area and Southern California through a myriad of levees. Now, these aging levees are susceptible to failure. The liability has become so great that the Governor of California has recently requested that the Delta levees be granted National Emergency status. Seawater intrusion threatens groundwater sources where over-pumping has become necessary; further surface water interruptions could cause irreparable damage. No other state is so susceptible to the catastrophic effects of natural or intentional interruptions in water supply. Water use efficiency can greatly minimize the severe negative impact of major interruptions in California's unique and precarious water supply network. ACWD serves a population of over 324,000 and 7,500 businesses. Typically 50-60% of our drinking water supply is imported. Improving water use efficiency is a vital part of our resource planning, and is the most viable source for water needed to meet the current and future needs of our customers. In addition, water efficiency minimizes the hardships our customers will endure in the event of potential water supply crises.



# 000023()

# California's Unique Water- Economy Situation

California's economy, equivalent to that of the fifth largest country worldwide, is dependant on an adequate and reliable water supply. Impacting California's economy with water shortages will have a negative ripple effect on the entire nation. Water efficiency offers California one of its most cost effective sources of water to feed its economy; an economy the entire nation depends on for financial stability.
Alternative Approaches Implemented There are many alternative cost-effective methods to improve water efficiency, and we are already implementing them. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply, yet it is a vital part. ACWD evaluates water efficiency options and water supply options equally in its planning process. We implement all of the most cost-effective strategies available. Improving the efficiency of clothes washers does not supplant other reasonable means available. Our efforts to provide a reliable source of water include but are not limited to various water conservation programs targeting every water use category in our service area, public information programs, school programs, groundwater recharge, desalination, and leak detection and repair.
ACWD cannot afford to dismiss any reasonable and cost effective method to increase water supply or decrease water demand

. Water availability , safety concerns and legal rights limit our ability to increase water production. Reclaimed water offers potential , but is limited to non

-potable uses and requires a huge investment in dual distribution network and building design

. Desalination requires development and operating costs far greater than traditional water sources
. There is not a single solution to secure California ' s water future, and ACWD' s commitment to provide a reliable source of water to meet the needs of the communities it serves. Exemption from Preemption is Necessary Water efficiency standards for appliances are not the only solution, but are a very important part of a large array of strategies to solve our impending water crisis. Clothes washers are a major water use in 80% of homes. High efficiency washers save more than 50% of the water wasted by traditional washers. A typical family using an efficient washer will save more than 6,000 gallons of water per year. Currently, our only available action is to promote water efficient washers through rebates to encourage the purchase of the high- efficiency washers; this method has limited effect and is very costly, compared to appliance standards. Ratepayers bear an undue burden because washer efficiency standards cannot be adopted by the State. Therefore, we encourage you to grant the preemption necessary for California and its citizens to secure a safe and reliable water supply for the state. Sincerely,

Paul Piraino General Manager Alameda County Water District



# 0x®0231.

# "Costello , Patrick" To: california.petition@ee.doe.gov <PCostello@cityofnapa .o cc: "Brun, Philip" <pbrun@cityofnapa.org> rg> Subject: California Preemption Exemption Petition 04/07/2006 04:51 PM 0 Federal Record Not a Federal Record

User Filed as: Not Categorized in ERMS


# If this external e-mail is a record and you are the first EERE recipient, click the 'File to ERMS ' button in the toolbar to categorize this e-mail



# Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585

Subject: Office of Energy Efficiency and Renewable Energy Docket No. EE

-RM-PET-100 Support for Petition to Exempt From Preemption California's Water Efficiency Standards for Residential Clothes Washers
Dear Mr. Secretary: On behalf of the City of Napa Water Division, we strongly urge you to approve the Petition to Exempt From Preemption California's Water Efficiency Standards for Residential Clothes Washers.
California 's water use is intricately linked to high energy costs and consumption. As the nation 's largest water user with a vast water transportation infrastructure , California's water systems are uniquely energy-intensive due to pumping requirements to deliver volumes of water long distances , across mountain ranges , and over high elevations. The City of Napa is partially dependent on the State Water Project, the nation's largest state-built water conveyance system of reservoirs , lakes , power plants, pump stations, canals , tunnels , and a 444 mile-long aqueduct. The State Water Project is the largest single user of electricity in California. The amount of energy required to support the state's water delivery system and the energy requirements associated with treating, pumping , and delivering water from supply sources to population centers is of increasing concern. It is clear that more efficient water use will substantially reduce energy costs and use. Due to the state's unique water and energy circumstances, California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002, the California State Legislature declared that "a significant portion of



# 0000232

# urban water demand in the state is for residential clothes washers " and that "water

conservation is a proven tool that will make the most effective use of the state 's limited supply , and will conserve energy ." As a result of these declarations , the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California. Implementation of state water efficiency standards will result in significant reduction in water use and cost to pump , treat, and provide reliable supplies while also reducing energy consumption and costs required to maintain and operate water delivery systems and wastewater treatment facilities

. The amount of energy that will be conserved as a result of water efficiency standards will be significant

. A fully implemented 8.5 water factor standard will save as much energy as the annual usage for approximately 50,000 California homes

. The 6

. 0 water factor will save the annual energy use of approximately 85,000 California homes, equivalent to four cities the size of Napa. Along with increased consumer energy and water cost savings , these water efficiency standards would not burden the clothes washer industry. Instead , these standards would positively impact the manufacturing, marketing , distribution , sale, and servicing of these high-efficiency washers . Today, most appliance manufacturers , large and small, already produce high-efficiency washer models that comply with the proposed standards . While 30 percent of California 's washer sales already comply with the 8.5 standard , 20 percent of sales already comply with the more stringent 6.0 standard. Various rebate incentive and educational programs throughout the state are also in place to increase the sale of these washers . The City of Napa has funded its local rebate program for the past two years

. However, if provided this preemptive waiver, California can achieve a 100 percent market share for high -efficiency washers and increase the sales competition and gross revenue of the clothes washer industry. As California uses more water than any state , the City of Napa supports a statewide residential clothes washer water efficiency standard of 8.5 effective January 1, 2007 followed by a 6

. 0 standard effective January 1, 2010 to conserve and manage supplies for a growing population

. Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce use of imported water deliveries

. It is crucial that California carry out these water efficiency standards and responsibly reduce its dependence on overly tapped and energy
-intensive regional and imported water supplies

. Water efficiency standards for residential clothes washers will help California achieve this goal. We sincerely hope you will approve the Petition to Exempt From Preemption California's Water Efficiency Standards for Residential Clothes Washers

. It is critical to the state's economy and the quality of life for populations that will make California their home for generations to come. Sincerely,
Phil Brun



# 0000233

# General Manager, Water Division

City of Napa



# 0Ow".;A

# April 7, 2006

California C

601 Van Ness Avenue. Suite 4E3-608 San Francisco CA 94102 3200 415 561 6650 415 561_9652 fax

John K. (JaeK) Hawks California Water Association 001 Van Ness Avenue, Suite 2047 Mail Code #E3-608 

### San Francisco. CA 94 1 02 3 200 415 561.9650 415 561.9652 A ax 415.3054393 cell

Palle Jensen ir. Jose V+ater Company V: Santa Clara Street )nsc- CAis196 i, _'y 7:i_,

41•. 279 `111 tax



### Bob Kelly ^tlJUr nar.:",•ir,', Systems

Kevin Tilden



### Stan Ferraro Caldnrnia P:alar Service Company



### John S. Tootle Cal to, nia We; r•r Service Company 2',32 W 23,''r'. Strecl Tor ran; r ^C :, yQ jQ;. 

### 310 25' 1•: H. 310 5424,64 1-

Sharon Carlson California Water Association '510 Fallcreek Lane tos CA 9n703 404.1 v'i 1 562 9260907 fax 

# Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington , DC 20585
Re: Docket No. EE-RM-PET-100-Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers
Dear Mr. Secretary:
On behalf of the California Water Association , which represents investorowned water utilities in California , I am writing to urge you to approve the California Energy Commission ' s Petition to Exempt from Preemption California's Water Efficiency Standards , f or Residential Clothes Washers. California's water use is intricately linked to high energy costs and consumption. As the nation's largest water user with a vast water transportation and conveyance infrastructure, California has a series of water systems that are uniquely energy-intensive, primarily due to pumping requirements to deliver volumes of water long distances, across mountain ranges and over high elevations. The State Water Project, the nation's largest state-built water conveyance system of reservoirs, lakes, power plants. pump stations , canals, tunnels and a 444 mile-long aqueduct, is the largest single user of electricity in the state . The amount of energy required to support the state 's water delivery system and energy requirements associated with treating, pumping and delivering water from water supply sources to population centers is of increasing concern throughout the state. It is clear that more efficient water use will substantially reduce energy costs and use. Because of the state's unique water and energy circumstances. California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002. the California State Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the state's limited supply, and wil I conserve energy." As a result of these declarations, the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California. Implementation of state water efficiency standards will result in a significant reduction in use and in costs to pump, treat and provide reliable state water supplies, while also reducing energy consumption and the costs required to



# 0 00 0235

# Hon. Samuel W. Bodman April 7, 2006 Page 2 of 2 maintain and operate water delivery systems and wastewater treatment facilities. The amount of energy that will be conserved as a result of water efficiency standards will be signifi cant. A fully implemented 8.5 (gallons/cubic foot) water factor standard will save as much energy as the annual usage for approximately 50.000 California homes , and the 6

. 0 water factor will save the equivalent annual energy use of approximately 85,000 California homes. Along with increased consumer energy and water cost savings, these water efficiency standards would not burden the clothes washer industry. Instead, these standards would positively impact the manufacturing , marketing, distribution, sale and servicing of these high

-efficiency washers . Today, most appliance manufacturers, large and small, already produce these types of high-efficiency washers, and they comply with proposed standards. While 30 percent of California ' s washer sales already comply with the 8

.5 standard , an additional 20 percent of sales now comply with the 6

.0 standard

. Various rebate incentive and educational programs throughout the state are also in place to support and increase the sale of these washers, which currently account for 39 percent of the market

. However, if provided this preemptive waiver, California can achieve a 100 percent market share and increase sales competition and gross revenue of the clothes washer industry.
Because California uses more water than any other state, and because it will continue to have rapid population growth. we support a residential clothes washer water efficiency standard of 8.5. effective January 1. 2007, followed by a 6.0 standard. effective January 1. 2010 to conserve and manage supplies for a growing population. Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce use of imported water deliveries

. It is crucial that California carry out these water efficiency standards and responsibly reduce its dependence on overly tapped and energy-intensive regional and imported water supplies

. Water efficiency standards for residential clothes washers will help California achieve this goal. We sincerely hope you will approve the Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers. It is critical to the state ' s economy and quality of life of populations that will make California their home for generations to come.



# 0000236

# Pacific Gas E lectric Company Codes Standards Prog ram
Comments on Preempti on Exem pti on Petition Docket N u mber EE-RM-PET-1 00 

# Un ited States Department of E nergy

Prepared for: Ms. Brenda Edwards-Jones U.S. Department of Energy , Building Technologies Program

Mailstop EE-2J, Room 1J-018 1000 Independence Avenue, SW. Washington , DC 20585-0121
Submitted by: Gary B. Fernstrom

April 6, 2006

This report was prepared by Pacific Gas and Electric Company and funded by California utility customers under the auspices of the California Public Utilities Commission 

# Copyright 2006 Pacific Gas and Electric Company

. All rights reserved except that this document may be used , copied, and distributed, without modification. Neither PG&E nor any of its employees makes any warranty, express or implied, or assumes any legal liability of responsibility for the accuracy, completeness , or usefulness of any data , information , method , policy, product or process disclosed in this document, or represents that its use will not infringe any privately-owned rights , including but not limited to patents, trademarks or copyrights.



# 0 00023

# Table of Contents

Introduction .......................................................................................................................3 General Comments ...........................................................................................................3 Specific Comments in Response to DOE Q uestions ......................................................4 Market-Induced Improvements ..................................................................................4 Accuracy of Analysis of Savings .................................................................................4 National Impacts on Industry ......................................................................................6 Impacts and Distribution Costs ...................................................................................7 Disadvantages on Smaller Industry Actors ................................................................8 Burdens of Redesi2n .....................................................................................................8 Product Availability .....................................................................................................8 Sales Volume Impacts ..................................................................................................9 Proliferation of State Standards ..................................................................................9 Availability of Product Characteristics ....................................................................10 Availability of Product Characteristics (2) ...............................................................10 Introduction Pacific Gas and Electric Company (PG&E) is pleased to have this opportunity to provide input on the Preemption Exemption Petition (Petition) filed in late 2005 by the California Energy Commission. Pacific Gas and Electric Company, incorporated in California in 1905, is one of the largest combination natural gas and electric utilities in the United States. Based in San Francisco, the company has approximately 20,000 employees who carry out Pacific Gas and Electric Company's primary business -the transmission and delivery of energy. The company provides natural gas and electric service to approximately 5.0 million electric and 4

. 1 million natural gas customer accounts throughout a 70,000-square-mile service area in northern and central California. Our comments hereunder are funded by California Public Utility Commission-approved public purpose funds and are presented in the best interests of the approximately 15 million people PG&E provides with natural gas and electric service -- one in every twenty Americans. The regulations that are the subject of the Petition, residential washer water efficiency standards adopted in 2003 by the California Energy Commission (Commission), are estimated to provide California customers with annual savings over 500 GWh, 50 million therms, and 66 billion gallons of water by 2025. PG&E advocated strongly for the Commission's adoption of the residential washer standards in 2003. PG&E strongly encourages the U.S. Department of Energy (DOE) to approve the Petition and grant California the waiver from preemption. We provide more detailed discussions in support of the Petition in the following pages.



# General Comments

The federal Register, Vol. 71, No. 24 (dated February 6, 2006 ) listed 18 specific



# 0 0 0 0238

# questions for which the DOE was interested in receiving comments. We respond to a

number of these, while leaving other water industry stakeholders to respond in detail to the water policy-focused questions. Generally, however, PG&E concurs with the Commission' s assessment that California's water interests represent an "unusual and compelling " situation compared to the Nation as a whole and to other states. Petition opponents may identify other localities that are experiencing one or more of the same challenges faced in California. The totality of the challenges for both water and energy supply, the environmental impacts, the connection of these factors with the California economy, and in fact, the sheer size of the California population ensure that the California situation can only reasonably be described as unique and compelling. Recently increased concerns (subsequent to the development of the Petition), such as the deteriorating condition of California's water delivery system ( i.e., inadequate levees), add more urgency to the California situation. The energy and water policy planning documents published by California agencies and referenced in the Petition clearly demonstrate that the adopted residential washer standard is an appropriate, consistent, and well-conceived tool for helping California attend to its needs. That the standards are one of several policy, program and supply options being deployed in California cannot be construed by the DOE as evidence that granting the Petition is unnecessary. All cost-effective tools are desperately needed to meet the manifold water and energy challenges. Ironically, many of the future alternative water supply options (desalination, recycling, etc.,) are energy intensive and will serve to compound the State's energy woes if they are deployed over other conservation options. Efficiency is first on the "loading order" of solutions. Resources that are now being less efficiently spent on residential washer efficiency programs (relative to the cost efficiency of the preempted California standards) must be freed up to allow the State to develop new voluntary efficiency programs for different appliances and products for which regulation is not a viable strategy.

Specific Comments in Response to DOE Questions
Market

-Induced Improvements
Are there estimates of market-induced improvements in efficiency of all products subject to the California regulation? 

# We note that the Petition provides a reasonable estimate of "natural" market induced improvements in efficiency of residential washers. PG&E shares similar expectations for reductions in shipment-weighted water factors over time between the implementation of the standard and 2040 (upper line in Figure 4 of the Petition). We note, however, that in our opinion, such market-induced changes are not truly "natural". In our opinion, such ongoing improvement would require ongoing incentive programs. Thus, these estimates reflect a presumption of ongoing investment of millions and millions of dollars by California IOUs and water agencies (ultimately funded by California rate payers) through voluntary rebate and education programs. Were such investments to cease, we believe



# 0000239

# that the residual, "natural" market-induced efficiency gains would be well under the 1.5%

per year assumption, if not flat. Thus, if anything, we believe the Commission's portrayal of natural-market induced efficiency gains is optimistic. Furthermore, DOE should not forget that recent improvements in baseline energy and water use beyond minimum federal requirements can in large part be attributed to sustained, annual , multi-million dollar expenditures by utilities and water agencies in California and around the country, the very parties now supporting the Petition. DOE should not take these investments for granted in future years. Accuracy of Analysis of Savings Is the analysis used in the California Petition accurate ? For example, are the State's savings estimates correct ? How valid are the State's assumptions? PG&E provided substantial analysis to the Commission's proceeding in support of the residential washer standards

. It may come as no surprise , therefore, that PG&E asserts that the savings estimates that the Commission articulates in the Petition are valid and reasonable. We note a substantial conservatism, however, in the analysis that the DOE should consider

. Presumed shipment

-weighted water factor baselines of 10.5 gallons per cubic foot were based on testimony of AHAM and manufacturers in the CEC proceeding. Whereas the Commission calculated water savings based on the difference between this baseline and the standards levels (e.g., water factors of 8.5 and 6.0), PG&E more realistically applied shipment

-weighted average water factors below the standards levels in recognition of the large proportion of washers selling in California that already well exceed these standards levels. More specifically, PG&E estimated post-standard shipment-weighted average efficiencies of 8.10 and 5.75 gallons per cubic foot. For tier 2 (6.0 WF) of the standard that difference in approach leads to underestimating per unit savings of 220 gallons per washer per year. Whether PG&E's estimates of 8.10 and 5.75 WF are low enough is uncertain. What is certain is that the Commission's estimate understates the actual per unit savings (presuming that manufacturers comply with the standard and that AHAM' s baseline forecast is accurate). 

# Two significant factors were not captured in the estimates of statewide savings in tables 4 and 6 of the Petition

. These savings estimates were presented in terms of technical potential-a freeze frame view of relative efficiencies

. To investigate in more detail what savings would accrue over time under realistic standards versus non-standards scenarios

--a subject that DOE is broaching in its previous question--we concur that one should assess natural market-driven changes to shipment-weighted average efficiency in calculating annual savings rates of each successive year's cohort of new washers. As noted in the previous section, PG&E does not dispute the Petition's estimate of 1.5% or less per year of "market-induced" improvement in water factor. Thus, by the time the full stock of washers had been replaced with tier 2 standard compliant washers, the difference in water use between a new washer in the absence of the standard and one under the standards scenario would have decreased relative to the early years (water factor under the standards scenario decreases at a slower rate of 0.7% per year). This



# 0000240

# slow convergence in efficiencies would result in a 32% reduction in per units savings for

new products sold in 2025 compared to base year 2010. This reduction over time in firstyear annual savings is, however, overcome by the second factor. The expected population growth in California is discussed in the Petition, but is not factored into the savings estimates. Population estimates from the US Census Bureau show a 36 percent increase in population by 2025. This growth suggests a commensurate increase in clothes washers. Thus, the population increase would lead to aggregate annual "first year" water savings for each successive year's cohort of new washers that grow slightly over time despite significant forecasted relative per unit savings decreases. In conclusion, PG&E believes the Commission has reasonably estimated the saving impacts due to the standard, though they are likely understated on an aggregate, statewide basis by five to ten percent. National Impacts on Industry What impacts would the State standards have on manufacturing , marketing, distribution, sale, or servicing of covered products on a national basis? (42 U.S.G. 6297(d)(3)) As was asserted in the Petition, the implications for manufacturing, marketing, distribution, sale and servicing of covered products on a national basis is clear: minimal impact. The market share for Energy Star clothes washers in California in 2004 averaged 62.7% (Figure 1 below). Lacking more updated information, we use the same ratios as were used in the Petition to determine what proportion of Energy Star washers qualified at the 8.5 and 6.0 water factors. We estimate that up to one-half of all washer sales in California in 2004 qualified at the 8.5 water factor level and as much as one-third qualified at the 6.0 level. Nationally, industry is clearly geared up for the sale of compliant products. If already half and one-third of the California sales comply for the 8.5 and 6.0 water factor tier, respectively, then as explained in the Petition, "converting" the rest of California sales represents a change in the washer performance levels in only five percent of national shipments. 

# We don't see how industry can argue that such an impact is a significant problem for industry. We note for example that national market share for Energy Star washers moved from 20 to 27 percent between the first and fourth quarters of 2003 alone! That change in national market share is larger than the impact that this California standard could have on the national market and there was no advanced warning. Unlike natural market volatility, in the case of standards there will have been several year's notice to allow orderly planning and accommodation by industry. Figure 1. Clothes Washer Sales, Percent of ENERGY STAR Qualified Units



# 0000241

### 100% The ENER7Y STAR ana %d, aunea,da Marpw e'f. ,an-ry 1 2W rvpat 9 .. Q6% E-P F_ mtmc ash MbOPoae E-P
caemr



### 70%

10%

0% 71.0%



### aP



# Source: Itron, Inc., December 2005. "California Residential Efficiency Market Share Tracking: Appliances 2004 " 

# The previous paragraph addresses the impact nationally of changes in the types of washers that must be manufactured and sold in California as result of the standard but not concerns about slackened demand. The Commission has already made a convincing case using DOE research on consumer elasticity that substantive reductions in total unit sales in California are unlikely. As the Commission noted, in the unlikely event that sales dropped, say 10 percent, this only represents a one percent reduction in national shipments and is within the noise of annual shipment variability. For those vendors in California that would face the hypothetical 10 percent drop in sales, the implications for increased per unit revenues (20% +) cannot be overlooked and would mitigate volume reductions. Virtually all affected businesses have products qualifying at the 8.5 water factor level, including small and large manufacturers, distributors, and retailers alike. Years ahead of schedule many also have 6.0 water factor washers. We are, therefore, unaware of any national market actor who would necessarily be hurt by this standard. The market for inefficient washers will remain robust in the other 49 states and overseas. One set of industry players in California will almost certainly benefit: route operators and coin laundry stores. These stakeholders have been disadvantaged by the fact that California has water efficiency standards only for commercial (residential-sized) washers. The commercial washer standard may have shifted a fraction of customers on the margin from coin laundry toward in-home residential washers as a result of the increased relative cost of commercial versus residential washers. To the extent that that has happened, one can expect the increased purchase price for compliant residential washers under the California residential standard to shift a fraction of customers on the margin back toward coin laundry. This shift back to coin laundry would benefit the coin laundry industry materially. 

# PG&E believes that any industry stakeholder not already shifting their business strategy


# 0000242

# to address the high efficiency washer market share is going to have trouble remaining

competitive in the California market, regardless of whether a California standard is implemented. Thus, the incremental industry competitiveness impacts attributable to the California standards would be very limited. Impacts and Distribution Costs What impact will the California clothes washer standard have on manufacturing or distribution costs of manufacturers, distributors and others? (42 U.S.C. 6297(d)(3)(A)) The cost implications of the adopted standards will be acceptable. Modestly featured washers that meet the new standard will become the new "commodity product" with commensurate cost reductions relative to today's Energy Star washers. To be sure, we concur with the Commission that manufacturing costs and therefore wholesale and retail prices can be expected to increase -20 percent as a result of the standard. We further concur that these increased costs are cost-effective as estimated. Manufacturer claims that incremental costs should be forecasted on the basis of previous average costs for high-end washers (e.g., $400-500 incremental costs) are misguided. Generally, one would expect a price conscious consumer to pay for the lowest cost washer that meets his or her minimum requirements. Consumers that pay more are by definition purchasing non-energy/water benefits. Such additional benefits need not be bundled in with a washer designed to just meet the California standards. Thus, as a result of the standard in California, manufacturers that are concerned with staying competitive with price conscious consumers will expand their offering of lower price, high-efficiency washers that meet the standard with a more modest feature package. Disadvantages on Smaller Industry Actors 

# Will the California clothes washer standard disadvantage smaller manufacturers, distributors, or dealers or lessen competition in California? (42 US. C. 6297(d) (3) (B)) We agree with the Petition that numerous manufacturers, many with products that qualify even at the 6.0 water factor level have come into the market in the last decade. So as the federal washer efficiency standards have been instituted and voluntary programs such as Energy Star® have increased the rigor of their requirements, competition--especially from manufacturers newly entering the market--has increased dramatically. In 2003, there were three manufacturers with products that have water factors less than 5.5. That number increased to nine in 2004 and thirteen (fifteen brands) by the end of 2005. We are not aware of any situations where smaller market actors will necessarily be disadvantaged from the California standard.
Burdens of Redesign
To what extent would the California standard cause a burden to manufacturers to



# 000024

# redesign their residential clothes washers? (42 U.S. C. 6297(d)(3)(C))



# Given that up to one-third of washers sold in California in 2004 qualified at the 6.0 water factor level and that most major manufacturers have qualifying products well ahead of the standards effective date, it is hard to see how the California standard will create a substantive, incremental design burden on manufacturers. Much of the major redesign work has been completed or initiated in response to the federal energy efficiency standards effective on January 1, 2007 and the various voluntary programs. Given the time between 2004 and the likely effective date of the second tier of the California standard, more than a complete design/amortization period will have elapsed. This allows manufactures to integrate design work associated with standards into their typical product redesign cycles, thereby minimizing costs attributable to the California standard. Thus, the incremental design burden costs will be minimal and recoverable. Product Availability
Would the California standard result in a reduction in product availability ? (42 U.S.C. 6297(d) (3) (C) (i)) The Petition has convincingly addressed this matter on pages 38 through 40. Considering that one-third to one-half of California sales already qualify at the first standard tier as well as the growth in the variety and number of qualifying models in just the last several years as the federal standards took effect and voluntary programs increased in stringency, it is difficult to argue that product availability is going to be a concern in California. Clearly, the total number of distinct washer models for sale in California will be smaller than in the nation as a whole, but that does not equate to availability problems. As a point of reference, the numbers of active Energy Star®-rated models meeting 8.5 and 6.0 water factor requirements are currently 195 (170 if excluding discontinued products) and 122 (113 if excluding discontinued products), respectively. Again, it is clear from the analysis in a previous section that industry will have no trouble meeting demand in California because it represents a small shift (-five percent or less) in national manufacturing volume.


# Sales Volume Impacts
Would the California standard result in a reduction in sales volume of clothes washers either in California or in the United States as a whole? (42US.C. 6297(d)(3)(C)(ii)) As has been described in the Petition and earlier in these comments, the California standard cannot have a discernable impact on national sales. In a drastic, hypothetical case where the California standards slow demand in California by 10 percent, this represents only a drop by one percent in national shipments. Such a small percentage drop would be well within the year-to-year variations in washer sales, nationally. As noted in an earlier section, DOE's own market research shows that demand for residential washers is fairly inelastic with respect to price within the incremental price range that can reasonably be expected as a result of the standard. Small percentages of customers that



# 0000244

# may otherwise have purchased a new washer may repair rather than replace their existing

washer in response to higher first costs, but this effect would be limited in scope and duration. In previous sections, we have noted that while sales volume could drop slightly in the first years of each tier implementation, the ---20 percent higher cost estimated by the Commission would result in net increased revenues for market actors that greatly exceed any reasonably forecasted sales volume decreases. DOE's analysis for the federal standard that assumed migration to horizontal-axis washers suggested that industry may actually increase profit on a per unit basis.
Proliferation of State Standards
To what extent is the California regulation likely to contribute significantly to a proliferation of State appliance efficiency requirements ? What cumulative impact would such requirements have? (42 U.S.C. 6297(d)(3)(D)) 

# PG&E is aware of no other states or local jurisdictions that have or are developing a residential clothes washer water efficiency standard

. Since no standard similar to the adopted California standard may be implemented without a waiver from the DOE, DOE would control this proliferation in the event that other states came forward. Were other jurisdictions to develop, adopt and seek a waiver for such a standard, PG&E believes the cumulative impact would be negligible

. It seems highly unlikely that such standard would be different than the California standard. There would be several years to plan for production and sales in such jurisdictions , and the additional market share represented by most other jurisdictions would be modest relative to California. Additionally, we concur with the Commission that the economies of scale from such an eventuality may in fact benefit industry. Availability of Product Characteristics Would the California regulation impact the availability in the State of any covered product type (

or class) of performance characteristics ( including reliability), features, sizes, capacities , and volumes that are substantially the same as those generally available in the State? (42 U.S. C. 6297(d)(4)) 

# PG&E believes that the Commission's Petition has convincingly addressed this question. PG&E is not aware of any limitations in features , sizes , capacities or volumes that would result even after implementation of the 6

.0 water factor standard

. It is not clear to PG&E whether the vertical-axis attribute will be commonly available in California after the implementation of the 6

. 0 water factor tier. PG&E does not believe this attribute rises to the level of "product type" or "performance characteristic". In DOE's own research, the axis orientation attribute was only recognized as a distinct characteristic by 2 out of 429 respondents. Furthermore, we would expect that it was the horizontal-axis attribute that was being recognized in those two cases rather than the vertical

-axis attribute, which to our knowledge provides no distinct performance characteristics whatsoever. Availability of Product Characteristics (2)


# -0000245

# Would the California standard affect the availability of classes of clothes washers or

clothes washer performance characteristics, reliability, features, sizes, capacities and volumes that are generally available in California? (42 U.S.C. 6297(d)(4)) Our response to this question is the same as the response to the previous, similar question.

# N T 

## l 

# DISTRI C



# T 15600 S axi Canyon AvenLo • PO, Box 5700 • Uvine, CaJromia 92619-7LC • (949) 453-53W • w.wvinvd aon 

# April 6, 2006
Ms. Brenda Edwards-Jones 

# United States Department of Energy Building Technologies Program Mailstop EE-2J, Room 1J-018 1000 Independence Avenue, SW Washington, DC 20585-0121
Docket #: EE-RM-PET-100 

# SUBJECT: PETITION TO EXEMPT FROM PREEMPTION, CALIFORNIA'S WATER

EFFICIENCY STANDARDS FOR RESIDENTIAL CLOTHES WASHERS
Dear Ms. Edwards-Jones: On behalf of Irvine Ranch Water District (IRWD), we strongly urge you to approve the Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers. The ability for California to implement water and energy conservation measures is important to the State's economy and to its growing population. California's water use is intricately linked to high energy costs and consumption. As the nation's largest water user with a vast water transportation infrastructure, California's water- systems are uniquely energy intensive due to pumping requirements to deliver volumes of water long distances, across mountain ranges and over high elevations. The State Water Project, the nation's largest state-built water conveyance system of reservoirs, lakes, power plants, pump stations, canals, tunnels, and a 444 mile-long aqueduct, is the largest single user of electricity in the state. The amount of energy required to support the state's water delivery system and energy requirements associated with treating, pumping, and delivering water from water supply sources to population centers is of increasing concern throughout the state. It is clear that more efficient water use will substantially reduce energy costs and use. Due to the state's unique water and energy circumstances, California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002, the California State Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the state's limited supply, and will conserve energy." As a result of these declarations, the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California.



# ®000247

# Ms. Brenda Edwards-Jones

United States Department of Energy Building Technologies Program April 6, 2006 Page Two

Implementation of state water efficiency standards will result in significant reduction in use and cost to pump , treat, and provide reliable water supplies while also reducing energy consumption and costs required to maintain and operate water delivery systems and wastewater treatment facilities . The amount of energy that will be conserved as 'a result of water efficiency standards will be significant . A fully implemented 8.5 water factor standard will save as much energy as the annual usage for approximately 50,000 California homes and the 6. 0 water factor will save the equivalent annual energy use of approximately 85,000 California homes. Along with increased consumer energy and water cost savings , these water efficiency standards would not burden the clothes washer industry. Instead, these standards would positively impact the manufacturing, marketing , distribution, sale, and servicing of these high efficiency washers. Today, most appliance manufacturers , large and small , already produce these types of high efficiency washers and comply with proposed standards . While 30 percent of California' s sales of washers already comply with the 8. 5 standard , 20 percent of sales already comply with the 6.0 standard

. Various rebate incentive and educational programs throughout the state are also in place to support and increase the sale ofthese washers and currently account for 39 percent of the market. 

# As California uses more water than any other state and will continue rapid population growth, we support a residential clothes water efficiency standard of 8.5 effective January 1, 2007 followed by a 6

.0 standard effective January 1 , 2010 to conserve water and energy, and to manage supplies for a growing population

. Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce the use of imported water deliveries

. It is crucial that California carry out these water efficiency standards and responsibly reduce its dependence on overly tapped and energy-intensive regional and imported water supplies

. Water efficiency standards for residential clothes washers will help California achieve this goal. We sincerely hope you will approve the Petition to Exempt from Preemption California' s Water Efficiency Standards for Residential Clothes Washers. It is important to the state ' s economy and quality of life ofpopulations that will make California their home for generations to come.

cc: Beth Beeman, IRWD Fiona Sanchez, IRWD Mike Gillissie, IRWD



# 0000245

### Ent o ty V Coll ei CQllS d 

# n rr

ANTONIO R. VILLARAIGOSA Commission Mayor MARY D NICHOLS, President H. DAVID NAHAI, Vice President NICK PATSAOURAS EDITH RAMIREZ FORI3SCEE HOGAN-RUWLES BARBARA E. MOSCHOS, Secretary 

# April 6, 2006



# The Honorable Samuel W. Bad man Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Dear Mr. Secretary: 

# le U

# fty 

# of I[zz An

RONALD F. DBATON, General Munger



# Subject: Support for Petition to Exempt From Preemption California's Water-Efficiency Standards for Residential Clothes Washers On behalf of the Los Angeles Department of Water and Power , I strongly urge you to approve the Petition to Exempt from Preemption California 's Water-Efficiency Standards for Residential Clothes Washers. California's water use is intricately linked to high energy costs and consumption. As the nation's largest water user with a vast water transportation infrastructure, California's water systems are uniquely energy-intensive due to pumping requirements to deliver volumes of water long distances, over high elevations, and across mountain ranges. The State Water Project, the nation's largest state-built water conveyance system of reservoirs, lakes, power plants, pump stations, canals, tunnels and a 444 mile-long aqueduct, is the largest single-user of electricity in the state. The amount of energy required to support the state's water delivery system and energy requirements associated with treating, pumping, and delivering water from water supply sources to population centers is of increasing concern throughout the state. It is clear that more efficient water use will substantially, reduce energy costs and use. 

# Due to the state's unique water and energy circumstances, California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002, the California State Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the state's limited supply, and will conserve energy." As a result of these declarations, the California Energy Commission adopted water-efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California. Implementation of state water-efficiency standards will result in significant reduction in use, thereby, reducing the cost to pump and treat water at the state and local levels while improving 

# Water and Power Conservation ... a way of life
111 North Hope Street, Los Angeles, California 90012-2607 Mailing address: Box 51111. Los Angeles 90051-5700 Telephone: (213) 367-4211 Cable address: DEWAPOLA 

# 0000zi.

# The Honorable Samuel W. Bodman

Page 2 April 6, 2006

the reliability of the state's water supplies. Coincident reductions in energy consumption and costs required to maintain and operate water delivery systems and wastewater treatmentfacilities will be realized. The amount of energy that will be conserved as a result of waterefficiency standards will be significant. A fully implemented 8.5 water-factor standard will save as much energy as the annual usage for approximately 50,000 California homes, and the 6.0 water factor will save the equivalent annual energy use of approximately 85,000 California homes. 

# Along with increased consumer energy and water cost savings , these water-efficiency standards will not burden the clothes washer industry. Instead, these standards will positively impact the manufacturing , marketing, distribution, sale, and servicing of high- efficiency washers . Today, most appliance manufacturers , large and small, already produce these types of high

-efficiency washers that comply with proposed standards . Thirty percent of the clothes washers sold in California already comply with the 8.5 standard, while 20 percent of sales already comply with the 6.0 standard

. Various financial rebate programs and educational programs throughout the state are already in place to support and increase the sale of these washers

. However, if provided this preemptive waiver, California can achieve a 100-percent market share, increasing sales competition, and gross revenue of the clothes washer industry while conserving precious natural resources. As California uses more water than any state and will continue rapid population growth, I support a residential clothes washer water-efficiency standard of 8.5 effective January 1, 2007 followed by a 6.0 standard effective January 1, 2010 to conserve and manage supplies for a growing population.-Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce use of imported water deliveries. It is crucial that California carry out these water-efficiency standards and responsibly reduce its dependence on overly tapped and energy-intensive regional and imported water supplies. Water-efficiency standards for residential clothes washers will help California achieve this goal.I sincerely hope you will approve the Petition to Exempt from Preemption California's WaterEfficiency Standards for Residential Clothes Washers.

Ronald F. Deaton General Manager TLG:mm



# 0 0 

# 002-I D

# April 6, 2006

Samuel W

. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington , DC 20585 Re: Support for Petition to Exempt From Preemption California ' s Water Efficiency Standards for Residential Clothes Washers
Dear Mr

. Secretary: On behalf of Crescenta Valley Water District , we strongly urge you to approve the Petition to Exempt from Preemption California ' s Water Efficiency Standards for Residential Clothes Washers.
California ' s water use is intricately linked to high energy costs and consumption. As the nation' s largest water user with a vast water transportation infrastructure, California ' s water systems are uniquely energy-intensive due to pumping requirements to deliver volumes of water long distances , across mountain ranges and over high elevations . The State Water Project, the nation ' s largest state

-built water conveyance system of reservoirs , lakes, power plants, pump stations , canals, tunnels and a 444 mile-long aqueduct, is the largest single user of electricity in the state

. The amount of energy required to support the state's water delivery system and energy requirements associated with treating, pumping and delivering water from water supply sources to population centers is of increasing concern throughout the state

. It is clear that more efficient water use will substantially reduce energy costs and use.
Due to the state ' s unique water and energy circumstances , California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions

. In 2002, the California State Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the state ' s limited supply, and will conserve energy." As a result of these declarations , the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California. Implementation of state water efficiency standards will result in significant reduction in use and cost to pump, treat and provide reliable state water supplies while also reducing energy



# 0000251

# consumption and costs required to maintain and operate water delivery systems and wastewater

treatment facilities. The amount of energy that will be conserved as a result of water efficiency standards will be significant. A fully implemented 8.5 water factor standard will save as much energy as the annual usage for approximately 50,000 California homes, and the 6.0 water factor will save the equivalent annual energy use of approximately 85,000 California homes. Along with increased consumer energy and water cost savings, these water efficiency standards would not burden the clothes washer industry. Instead, these standards would positively impact the manufacturing, marketing, distribution, sale and servicing of these high efficiency washers. Today, most appliance manufacturers, large and small, already produce these types of high efficiency washers and comply with proposed standards. While 30 percent of California's sale of washers already comply with the 8.5 standard, 20 percent of sales already comply with the 6.0 standard. Various rebate incentive and educational programs throughout the state are also in place to support and increase the sale of these washers and currently account for 39 percent of the market. However, if provided this preemptive waiver, California can achieve a 100 percent market share and increase sales competition and gross revenue of the clothes washer industry. As California uses more water than any state and will continue rapid population growth, we support a residential clothes washer water efficiency standard of 8.5 effective January 1, 2007 followed by a 6.0 standard effective January 1, 2010 to conserve and manage supplies for a growing population. Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce use of imported water deliveries. It is crucial that California carry out these water efficiency standards and responsibly reduce its dependence on overly tapped and energy-intensive regional and imported water supplies. Water efficiency standards for residential clothes washers will help California achieve this goal. We sincerely hope you will approve the Petition to Exempt From Preemption California's Water Efficiency Standards for Residential Clothes Washers. It is critical to the state's economy and quality of life of populations that will make California their home for generations to come.

Sincerely,

Dennis Erdman, General Manager Crescenta Valley Water District



# 0000252

# Association of California Water Agencies
Sinn 191(


# April 4, 2006
Sent via email to: california.petition@a, ee.doe.gov
Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Subject: Docket Number EE-RM-PET-100 - Petition To Exempt From Preemption California's Water Efficiency Standards For Residential Clothes Washers Dear Secretary Bodman: The Association Of California Water Agencies (ACWA) strongly supports the California Energy Commission petition to exempt from preemption California's Water Efficiency Standards For Residential Clothes Washers. ACWA is trade association representing nearly 450 public water agencies that supply over 90% of the water delivered in California for domestic, agricultural and industrial uses. ACWA and its member agencies are working diligently on many fronts to ensure that urban water use efficiency is maximized in a cost effective manner and that a reliable water supply will be available to support all aspects of California's communities, farms, economy and environment. ACWA appreciates the opportunity to comment on the petition as noticed by the U.S. Department of Energy in the Federal Register on February 6, 2006 (71 Fed. Reg. 6022 (2006)).
ACWA believes that the exemption from preemption should be granted for the following reasons:
1. California ' s Interests are Unusual and Compelling California has the most extensive water importation and distribution system in the nation . Significant water supplies are located more than 300 miles from the urban

Association of California Water Agencies 'I t ; K Street. Soite 100. Sacramento, California 918 14- )i77 916/441-4545 rA,% 916,/32;-4849

Hall of the States 400 N. Capitol >t. N.0 .. Suite .) 7 South, Washington, U.C. 20001 1511 202/434-4760 tai '0_'!434-4'6.3 

# www.acwanet.com 

# 0000 25a

# Samuel W. Bodman

April 4, 2006 Page 2 of 3 areas which are dependent upon these water sources. Much of the water supply system is vulnerable to catastrophic effects of earthquakes and/or levee failures that could interrupt water deliveries for many months and possibly years while repairs are made. Maximum practicable water use efficiency is essential to minimize the severe negative impact of major interruptions in California's unique and precarious water supply network. 2. Exemption from Preemption is Necessary to Significantly Reduce Water and Energy Waste Enhanced water efficiency standards for appliances are among a number of important strategies to solve our impending water crisis. Clothes washers are a major water use in 80% of homes. High efficiency washers save more than 50% of the water wasted by traditional washers. A typical family using a non-efficient washer wastes more than 6,000 gallons of water per year. The enhanced water efficiency standards will not only reduce this significant waste of precious water, but will also reduce energy waste as well. Although some water agencies currently offer rebates to encourage the purchase of the high-efficiency washers, this method has limited effect and is very costly to ratepayers, compared to mandating improved appliance standards. 3. Other Increased Water Use Efficiency Measures Are Also Being Implemented There are many innovative measures to improve water efficiency , and California water agencies are already implementing those that are locally cost effective. Improving the efficiency of clothes washers is only part of the overall solution for reliable water supply , yet it is a vital part. Improving the efficiency of clothes washers will not supplant other cost effective water conservation efforts , such as rebate and voucher programs , improved leak detection , increased public education programs , local landscape and water use ordinances, water transfers , new local storage reservoirs and groundwater conjunctive use projects , increased reclamation of stormwater and treated wastewater , and salt and brackish water desalination. It is clear that there is no one "silver bullet" to secure California's water future, but ACWA supports the efforts of its water agencies to implement those that will make significant incremental contributions using water more efficiently.



# 0000254

# Samuel W. Bodman

April 4, 2006 Page 3 of 3 We urge you to grant the California Energy Commission's petition to exempt State of California from the federal preemption. California has unique and compelling interests in obtaining a waiver from preemption for its RC W standards. The California standards are the best approach for achieving substantial water savings in residential clothes washers. ACWA agrees with the CEC that the California standards "offer the most comprehensive, highest-persistence, lowest-burden solution of all of the available alternatives. The standards create economic and environmental benefits, do not place significant burdens on industry, and do not significantly restrict performance or features." On behalf of the nearly 450 public water agencies in California, we respectfully request that the Department of Energy grant a waiver from preemption. Please feel free to contact David Bolland, Senior Regulatory Advocate or myself if you have any questions at 916-441-4545.

Sincerely,

Krista Clark Director of Regulatory Affairs



# 0000255

# City Council

3 11 Vernon Street 

# Roseville, California 95678.2649 

# April 3, 2006
Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Re: Support for California Preemption Exemption Petition for Residential Clothes Washers Dear Mr. Secretary: On behalf of the citizens of the City of Roseville, I urge you to approve the Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers. California's water use is intricately linked to high energy costs and consumption. As the nation 's largest water user with a vast water transportation infrastructure, California's water systems are uniquely energy-intensive due to pumping requirements to deliver volumes of water long distances, across mountain ranges and over high elevations. The State Water Project , the nation's largest State

-built water conveyance system of reservoirs, lakes, power plants, pump stations, canals, tunnels and a 444 mile-long aqueduct, is the largest single user of electricity in the State. The amount of energy required to support the State's water delivery system and energy requirements associated with treating , pumping and delivering water from water supply sources to population centers is of increasing concern throughout the State

. It is clear that more efficient water use will substantially reduce energy costs and use. Due to the State 's unique water and energy circumstances , California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002, the California State Legislature declared that "a significant portion of urban water demand in the State is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the State's limited supply, and will conserve energy." As a result of these declarations, the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California. Implementation of State water efficiency standards will result in significant reduction in use and cost to pump, treat and provide reliable State water supplies while also reducing energy consumption and costs required to maintain and operate water delivery systems and wastewater treatment facilities. The amount of energy that will be conserved as a result of water efficiency standards will be significant. A fully implemented 8.5 water factor standard will save as much energy as the annual usage for approximately


# 00 0 9i 6.774. 5200 ® Fox 916.786.9175 a TDD 916.774.5220 ® www.roseville

.ca.us `^

# 50,000 California homes, and the 6.0 water factor will save the equivalent annual energy

use of approximately 85,000 California homes. Today, most appliance manufacturers, large and small, already produce these types of high efficiency washers and comply with proposed standards. While 30 percent of washers sold in California already comply with the 8.5 standard, 20 percent of sales already comply with the 6.0 standard. Various rebate incentive and educational programs throughout the State are also in place to support and increase the sale of these washers and currently account for 39 percent of the market. However, if provided this preemptive waiver, California can achieve a 100 percent market share and increase sales competition and gross revenue of the clothes washer industry. As California uses more water than any State and will continue rapid population growth, the City supports a residential clothes washer water efficiency standard of 8.5 effective January 1, 2007 followed by a 6.0 standard effective January 1, 2010 to conserve and manage supplies for a growing population. Implementation of these standards will create tremendous water and energy savings for the region while supporting legal obligations to reduce use of imported water deliveries. It is crucial that California carries out these water efficiency standards and responsibly reduces its dependence on overly tapped and energy-intensive regional and imported water supplies. Water efficiency standards for residential clothes washers will help California achieve this goal. I hope you will approve the Petition to Exempt From Preemption California's Water Efficiency Standards for Residential Clothes Washers, It is critical to the State's economy and quality of life of California citizens for generations to come.

Gina Garbolino Mayor

cc: Mary Ann Dickinson, CUWCC Lisa Maddaus , Regional Water Authority

Docket #EE-RM-PET-100 

# 000 0 2 

# 57

# West Basin Municipal Water District
17140 S Avalon Blvd • Suite 210 • Carson , CA 90'7-ih-U_9G telephone 310-217 -2411 • fitx 3 10-21 -24 14



# Samuel W. Bodman Secretary of Energy United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Dear Mr . Secretary: March 31, 2006

DOCKET # EE-RM-PET-100

Support for Petition to Exempt from Preemption California 's Water Efficiency

Standards for Residential Clothes Washers On behalf of the West Basin Municipal Water District, we strongly support the Petition to Exempt from Preemption California's Water Efficiency Standards for Residential Clothes Washers. California's water use is intricately linked to high energy costs and consumption. As the nation's largest water user with a vast water transportation infrastructure, California's water systems are uniquely energy-intensive due to pumping requirements to deliver volumes of water long distances, across mountain ranges and over high elevations. The State Water Project, the nation's largest state-built water conveyance system of" reservoirs, lakes, power plants, pump.stations, canals, tunnels and a 444 mile-long aqueduct, is the largest single user of electricity in the state. The amount of energy required to support the state's water delivery system and energy requirements associated with treating, pumping and delivering water from water supply sources to population centers is of increasing concern throughout the state. It is clear that efficient water consumption will substantially reduce energy costs and use. Due to the state's unique water and energy circumstances, California must pursue highly efficient and cost-effective energy and water conservation strategies and solutions. In 2002, the California State Legislature declared that "a significant portion of urban water demand in the state is for residential clothes washers" and that "water conservation is a proven tool that will make the most effective use of the state's limited supply, and will conserve energy." As a result of these declarations, the California Energy Commission adopted water efficiency standards for residential clothes washers to address the unique and compelling interests and needs of California.



# 000 025 

# 8 Rc,<i,d