### APPENDIX 11B. NATIONAL EQUIPMENT AND OPERATING COSTS

TABLE OF CONTENTS

11B.1 INTRODUCTION .................................................................................................11B-1 11B.2 RESULTS ..............................................................................................................11B- 2

LIST OF TABLES
Table 11B.2.1 Commercial Clothes Washers, Top-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, SevenPercent Discount Rate (billion 2008$).......................................................11B-3 Table 11B.2.2 Commercial Clothes Washers, Top-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, ThreePercent Discount Rate (billion 2008$).......................................................11B-3 Table 11B.2.3 Commercial Clothes Washers, Front-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, SevenPercent Discount Rate (billion 2008$).......................................................11B-4 Table 11B.2.4 Commercial Clothes Washers, Front-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, ThreePercent Discount Rate (billion 2008$).......................................................11B-4

11B-i

### APPENDIX 11B. NATIONAL EQUIPMENT AND OPERATING COSTS

11B.1 INTRODUCTION In this appendix, the Department presents the components of the net present value (NPV), namely, the present value of the equipment (or total installed costs) and the present value of the operating costs for each of the four appliance products. The present value of equipment costs is also termed the cumulative national equipment costs while the present value of operating costs is also termed the cumulative national operating costs.
As presented in Chapter 11, National Impact Analysis, the NPV is described by the equation:

_ 

### NPV = PVS PVC

where:

PVS 

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

### = Present value of increased total installed costs (including equipment and installation).

The PVS 

### and PVC 

### are determined according to the following expressions:



### PVS = 

# � OCS y 

### × DF y



### PVC = 

# � TIC y 

### × DF y



### where:

OCS 

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

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

### Discount factor in each year, and y 

### = Year in the forecast (i.e., 2013 to 2043).

PVS 

### and PVC 

### are determined for each year from the effectiv e date of the standard to the year when units purchased in 2043 retire.
The present value of operating costs and the present value of equipment costs (or total installed costs) are the components comprising the PVS 

### and PVC 

### , respectively. The PVS 

### is

11B-1

### determined by taking the difference between the present value of operating costs for the base case and the present value of operating costs for the standards case. The PVC 

### is determined by taking the difference between the present value of equipment costs for the base case and the present value of equipment costs for the standards case.

11B.2 RESULTS 

### The following sections provide tables showing the present value of operating costs (also known as the cumulative national operating costs) and the present value of equipment costs (also known as the cumulative national equipment costs) for commercial clothes washers. Two sets of results are presented; one based on a seven-percent and another based on a three-percent discount rate.
In the tables provided in the following sections, the national operating and equipment costs are presented for the base case (i.e., without standards) and each standard level analyzed. Differences between the base case and standards cases are also presented. The difference in the national equipment costs represents the PVC 

### or present value of equipment cost increases while the difference in the national operating costs represents the PVS 

### or present value of operating cost savings. The difference between the base case and standards case total national equipment and operating costs represents the NPV



### . Tables 11B.2.1–11B.2.4 present the national equipment and operating costs, PVC 

### , PVS 

### , and NPV 

### for commercial clothes washers at real discount rates of seven- and three-percent, respectively.
As detailed in Chapter 11, shipments projections under the standards cases were determined to be lower than those in the base case projection due to the higher installed cost of the more efficient equipment. Typically, DOE would use the standards case shipments projection and, in turn, the standards case equipment stock, to determine the NPV 

### to avoid the inclusion of savings due to displaced shipments. But because DOE assumed that any drop in shipments caused by standards would result in the purchase of used machines, DOE maintained the use of the base case shipments to determine the annual energy consumption in the base case. Thus, the base case values shown in Tables 11B.2.1 to 11B.2.4 do not vary with the standards case. Both the CSL and TSL are identified in the following tables.

11B-2

### Table 11B.2.1	 Commercial Clothes Washers, Top-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, SevenPercent Discount Rate (billion 2008$) Standard Level Equipment Operating Total Base Case 1.14 7.40 8.54 CSL 1 / TSL 1, 2 1.25 7.28 8.53 Difference* -0.11 0.12 0.01 Base Case 1.14 7.40 8.54 CSL 2 / TSL 3, 4, 5 1.36 6.83 8.20 Difference* -0.22 0.56 0.34 * Equipment Cost Difference represents the PVC ; Operating Cost Difference represents the PVC ; NPV is represented by the bold and italicized values.



### Table 11B.2.2	 Commercial Clothes Washers, Top-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, ThreePercent Discount Rate (billion 2008$) Standard Level Equipment Operating Total Base Case 2.05 14.62 16.67 CSL 1 / TSL 1, 2 2.25 14.36 16.60 Difference* -0.20 0.26 0.07 Base Case 2.05 14.62 16.67 CSL 2 / TSL 3, 4, 5 2.45 13.36 15.81 Difference* -0.40 1.26 0.86 * Equipment Cost Difference represents the PVC ; Operating Cost Difference represents the PVC ; NPV is represented by the bold and italicized values.



### 11B-3

### Table 11B.2.3	 Commercial Clothes Washers, Front-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, SevenPercent Discount Rate (billion 2008$) Standard Level Equipment Operating Total Base Case 0.88 2.31 3.19 CSL 1 / TSL 1 0.88 2.31 3.19 Difference* 0.00 0.00 0.00 Base Case 0.88 2.31 3.19 CSL 2 / TSL 2, 3 0.88 2.30 3.18 Difference* 0.00 0.02 0.01 Base Case 0.88 2.31 3.19 CSL 3 / TSL 4 0.90 2.22 3.12 Difference* -0.02 0.09 0.07 Base Case 0.88 2.31 3.19 CSL 4 / TSL 5 0.93 2.10 3.03 Difference* -0.05 0.21 0.17 * Equipment Cost Difference represents the PVC ; Operating Cost Difference represents the PVC ; NPV is represented by the bold and italicized values.



### Table 11B.2.4	 Commercial Clothes Washers, Front-Loading: Cumulative NationalEquipment and Operating Costs with NPV from 2013–2043, ThreePercent Discount Rate (billion 2008$) Standard Level Equipment Operating Total Base Case 1.58 4.53 6.11 CSL 1 / TSL 1 1.58 4.52 6.10 Difference* 0.00 0.01 0.01 Base Case 1.58 4.53 6.11 CSL 2 / TSL 2, 3 1.58 4.50 6.08 Difference* 0.00 0.03 0.03 Base Case 1.58 4.53 6.11 CSL 3 / TSL 4 1.62 4.32 5.94 Difference* -0.04 0.21 0.17 Base Case 1.58 4.53 6.11 CSL 4 / TSL 5 1.66 4.06 5.72 Difference* -0.08 0.47 0.39 * Equipment Cost Difference represents the PVC ; Operating Cost Difference represents the PVC ; NPV is represented by the bold and italicized values.



### 11B-4