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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 -

i

rn

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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 with

relatively 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 0000206

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 134,528 235,801 328.4 25 427,119 441,377 458,112 471,338 487,073 503,333 520, 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 Lwo 7% 8% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%

Fvtt LOadd 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 rgySStar 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

 EE-RM-PET-100 COMMENT 97
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 0010-991990 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

 EE-RM-PET-100 COMMENT 97
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

Cash 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

 EE-RM-PET-100 COMMENT 97
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 472 495 519 564 582 602 622 643 684 866 709 733 757 783

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 27 22 35 36 37 38 40 41 42 44 45 47

NPV 7% $623.28

47 0000212

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 2,99 1 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 492 515 539 595 814 634 630 651 673 706 730 785 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 28 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 35 (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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

WDC 384454v.2 00(2021.8

53

 EE-RM-PET-100 COMMENT 97
Comments

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
® 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.

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 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

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 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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,

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 to

agencies 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

 EE-RM-PET-100 COMMENT 97
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()

 EE-RM-PET-100 COMMENT 97
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.

 EE-RM-PET-100 COMMENT 97
"Costello , Patrick" To: california.petition@ee.doe.gov

<PCostello@cityofnapa .o cc: "Brun, Philip" <pbrun@cityofnapa.org>

rg> Subject: California Preemption Exemption Petition

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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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
General Manager , Water Division

City of Napa

0Ow".;A

 EE-RM-PET-100 COMMENT 97
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, 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

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

0000235

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
Pacific Gas Electric Company

Codes Standards Program

Comments on

Preemption Exemption Petition

Docket Number EE-RM-PET-1 00

Un ited States Department of Energy

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.

000023

 EE-RM-PET-100 COMMENT 97
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

0000238

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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 coveredproducts 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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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.

 EE-RM-PET-100 COMMENT 97
N

T

l DISTRI CT 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

 EE-RM-PET-100 COMMENT 97
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 of populations that will make California their home for generations to come.

cc: Beth Beeman, IRWD

Fiona Sanchez, IRWD

Mike Gillissie, IRWD

0000245

 EE-RM-PET-100 COMMENT 97
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 Ufty 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.

 EE-RM-PET-100 COMMENT 97
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 treatment

facilities 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

00002-I D

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

000025a

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

 EE-RM-PET-100 COMMENT 97
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

000

9i 6.774.5200 ® Fox 916.786.9175 a TDD 916.774.5220 ® www.roseville.ca.us `^

 EE-RM-PET-100 COMMENT 97
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

0000257

 EE-RM-PET-100 COMMENT 97
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.

0000258

Rc,<i,d

 EE-RM-PET-100 COMMENT 97