[Federal Register Volume 86, Number 127 (Wednesday, July 7, 2021)]
[Proposed Rules]
[Pages 35668-35689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14273]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2021-BT-STD-0003]
RIN 1904-AF13


Energy Conservation Program for Appliance Standards: Procedures, 
Interpretations, and Policies for Consideration in New or Revised 
Energy Conservation Standards and Test Procedures for Consumer Products 
and Commercial/Industrial Equipment

AGENCY: Office of Energy Efficiency and Renewable Energy (EERE), 
Department of Energy.

ACTION: Notice of proposed rulemaking and request for comment.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy (``DOE'' or the ``Department'') 
proposed major revisions to the Department's ``Procedures, 
Interpretations, and Policies for Consideration of New or Revised 
Energy Conservation Standards and Test Procedures for Consumer Products 
and Certain Commercial/Industrial Equipment'' (``Process Rule'') in a 
notice of proposed rulemaking that was published on April 12, 2021. DOE 
accepted comments on those proposed revisions through May 27, 2021. In 
this document, DOE proposes additional revisions to the Process Rule 
and requests comment on the proposals and any potential alternatives. 
These additional proposed revisions are consistent with current DOE 
practice and would remove unnecessary obstacles to DOE's ability to 
meet its statutory obligations under the Energy Policy and Conservation 
Act (``EPCA'').

DATES: Comments: DOE will accept comments, data, and information 
regarding all aspects of this notice of proposed rulemaking on or 
before August 23, 2021. DOE will hold a webinar on Tuesday, August 10, 
2021 from 11:00 a.m. to 4:00 p.m. See section V, ``Public 
Participation,'' for webinar registration information, participant 
instructions, and information about the capabilities available to 
webinar participants.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at https://www.regulations.gov/docket/EERE-2021-BT-STD-0003. Follow the instructions for submitting comments. 
Alternatively, interested persons may submit comments by email to the 
following address: <a href="/cdn-cgi/l/email-protection#7202001d1117010100071e1740424043212636424242413217175c161d175c151d04"><span class="__cf_email__" data-cfemail="88f8fae7ebedfbfbfafde4edbab8bab9dbdcccb8b8b8bbc8ededa6ece7eda6efe7fe">[email protected]</span></a>. Include ``2nd 
2021 Process Rule NOPR'' and docket number EERE-2021-BTD-STD-0003 and/
or RIN number 1904-AF13 in the subject line of the message. Submit 
electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file 
format, and avoid the use of special characters or any form of 
encryption.
    Although DOE has routinely accepted public comment submissions 
through a variety of mechanisms, including postal mail and hand 
delivery/courier, the Department has found it necessary to make 
temporary modifications to the comment submission process in light of 
the ongoing coronavirus disease 2019 (``COVID-19'') pandemic. DOE is 
currently accepting only electronic submissions at this time. If a 
commenter finds that this change poses an undue hardship, please 
contact Appliance Standards Program staff at (202) 586-1445 to discuss 
the need for alternative arrangements. Once the Covid-19 pandemic 
health emergency is resolved, DOE anticipates resuming all of its 
regular options for public comment submission, including postal mail 
and hand delivery/courier.
    No telefacsimiles (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see section V (Public Participation) of this 
document.
    Docket: The docket for this rulemaking, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at https://www.regulations.gov. All documents 
in the docket are listed in the https://www.regulations.gov index. This 
docket also contains all comments and rulemaking documents associated 
with the notice of proposed rulemaking that was published on April 12, 
2021. However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    The docket web page can be found at: https://www.regulations.gov/docket/EERE-2021-BT-STD-0003. The docket web page contains instructions 
on how to access all documents, including public comments, in the 
docket.

FOR FURTHER INFORMATION CONTACT: 
    Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Email: 
<a href="/cdn-cgi/l/email-protection#55142525393c343b36300621343b313427312604203026213c3a3b261530307b313a307b323a23"><span class="__cf_email__" data-cfemail="7d3c0d0d11141c131e182e091c13191c0f190e2c08180e091412130e3d181853191218531a120b">[email protected]</span></a>.
    Mr. Pete Cochran, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-9496. Email: <a href="/cdn-cgi/l/email-protection#eebe8b9a8b9cc0ad818d869c8f80ae869fc08a818bc0898198"><span class="__cf_email__" data-cfemail="baeadfcedfc894f9d5d9d2c8dbd4fad2cb94ded5df94ddd5cc">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of Proposal
II. Authority and Background
    A. Authority
    B. Background
III. Discussion of Proposed Revisions to the Process Rule
    A. Coverage Determinations
    B. Process for Developing Energy Conservation Standards
    C. Process for Developing Test Procedures
    D. ASHRAE Equipment
    E. Analytical Methodology
IV. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563

[[Page 35669]]

    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act of 1995
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Consistent With OMB's Information Quality Bulletin for 
Peer Review
V. Public Participation
    A. Participation in the Webinar
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Webinar
    D. Submission of Comments
VI. Approval of the Office of the Secretary

I. Summary of Proposal

    On February 14, 2020, the United States Department of Energy 
(``DOE'' or ``the Department'') published a final rule (``February 2020 
Final Rule'') in the Federal Register that made significant revisions 
to its ``Procedures, Interpretations, and Policies for Consideration of 
New or Revised Energy Conservation Standards and Test Procedures for 
Consumer Products and Certain Commercial/Industrial Equipment'' 
(``Process Rule'') found in 10 CFR part 430, subpart C, appendix A. 85 
FR 8626. DOE also published a companion final rule on August 19, 2020 
(``August 2020 Final Rule''), that clarified how DOE would conduct a 
comparative analysis across all trial standard levels when determining 
whether a particular trial standard level was economically justified. 
See 85 FR 50937. These rules collectively modified the Process Rule 
that DOE had originally issued on July 15, 1996 (``1996 Process Rule'') 
into its current form. See 61 FR 36974 and 10 CFR part 430, subpart C, 
appendix A (2021). While the 1996 Process Rule acknowledged that it 
would not be applicable to every rulemaking and that the circumstances 
of a particular rulemaking should dictate application of these 
generally applicable practices,\1\ the revisions made in the February 
2020 Final Rule sought to create a standardized rulemaking process that 
was binding on the Department. 85 FR 8626, 8634. In creating this one-
size-fits-all approach, the February 2020 Final Rule and the August 
2020 Final Rule also added additional steps to the rulemaking process 
that are not required by any applicable statute.
---------------------------------------------------------------------------

    \1\ Id. 61 FR 36979.
---------------------------------------------------------------------------

    Subsequent events have caused DOE to reconsider the merits of a 
one-size-fits-all rulemaking approach to establishing and amending 
energy conservations standards and test procedures. Two of these events 
are particularly salient. First, on October 30, 2020, a coalition of 
non-governmental organizations filed suit under EPCA alleging that DOE 
has failed to meet rulemaking deadlines for 25 different consumer 
products and commercial equipment.\2\ On November 9, 2020, a coalition 
of States filed a virtually identical lawsuit.\3\ In response to these 
lawsuits, DOE has had to reconsider whether the benefits of a one-size-
fits-all rulemaking approach outweigh the increased difficulty such an 
approach poses in meeting DOE's statutory deadlines and obligations 
under EPCA. As mentioned previously, the 1996 Process Rule allowed for 
``case-specific deviations and modifications of the generally 
applicable rule.'' 61 FR 36974, 36979. This allowed DOE to tailor 
rulemaking procedures to fit the specific circumstances of a particular 
rulemaking. For example, under the 1996 Process Rule, minor 
modifications to a test procedure would not automatically result in a 
180-day delay before DOE could issue a notice of proposed energy 
conservation standards. Eliminating these unnecessary delays would 
better enable DOE to meet its obligations and deadlines under EPCA. 
Further, the sooner new or amended energy conservation standards 
eliminate less-efficient covered products and equipment from the 
market, the greater the resulting energy savings and environmental 
benefits.
---------------------------------------------------------------------------

    \2\ Natural Resources Defense Council v. DOE, Case No. 20-cv-
9127 (S.D.N.Y. 2020).
    \3\ State of New York v. DOE, Case No. 20-cv-9362 (S.D.N.Y. 
2020).
---------------------------------------------------------------------------

    Second, on January 20, 2021, the White House issued Executive Order 
(``E.O.'') 13990, ``Protecting Public Health and the Environment and 
Restoring Science to Tackle the Climate Crisis.'' 86 FR 7037 (Jan. 25, 
2021). Section 1 of that Order lists a number of policies related to 
the protection of public health and the environment, including reducing 
greenhouse gas emissions and bolstering the Nation's resilience to the 
impacts of climate change. 86 FR 7037, 7041. Section 2 of the Order 
instructs all agencies to review ``existing regulations, orders, 
guidance documents, policies, and any other similar agency actions 
(agency actions) promulgated, issued, or adopted between January 20, 
2017, and January 20, 2021, that are or may be inconsistent with, or 
present obstacles to, [these policies].'' 86 FR 7037, 7041. Agencies 
are directed, as appropriate and consistent with applicable law, to 
consider suspending, revising, or rescinding these agency actions and 
to immediately commence work to confront the climate crisis. 86 FR 
7037, 7041. For certain explicitly enumerated agency actions, including 
the February 2020 and the August 2020 Final Rules, the Order directs 
agencies to consider publishing for notice and comment a proposed rule 
suspending, revising, or rescinding the agency action within a specific 
time frame. 86 FR 7037, 7037-7038. Under this mandate, DOE is directed 
to propose any major revisions to these two rules by March 2021, with 
any remaining revisions to be proposed by June 2021. 86 FR 7037, 7038.
    In light of these events, DOE has identified several aspects of the 
February 2020 and the August 2020 Final Rules (together, representing 
the current Process Rule) that present obstacles to DOE's ability to 
meet its obligations under EPCA. In accordance with E.O. 13990, DOE 
proposed major revisions to the current Process Rule in a notice of 
proposed rulemaking (NOPR) that was published on April 12, 2021 
(``April 2021 NOPR''). 86 FR 18901. The comment period on the April 
2021 NOPR ended on May 27, 2021.
    In this document, DOE proposes additional revisions that would: 
Further revise the process for coverage determination rulemakings; 
provide additional flexibility for DOE during the pre-NOPR stages of 
energy conservation standard and test procedure rulemakings, while 
preserving opportunities for stakeholders to provide early input in the 
rulemaking process; provide clarification on EPCA's rulemaking process 
for ASHRAE equipment; and revise the sections on DOE's analytical 
methods to reflect current rulemaking practices. These revisions are 
summarized in the following table. Note that for ease of use and 
clarity, the proposed regulatory text in this document contains both 
the proposed regulatory text in the April 2021 NOPR and the new text 
being proposed in this document. DOE is currently only soliciting 
comments on the new, additional regulatory text proposed in this NOPR.

[[Page 35670]]



            List of Proposed Revisions to the Process Rule 4
------------------------------------------------------------------------
                               Proposed revisions    Proposed additional
           Section             from the April 2021    revisions in this
                                      NOPR                document
------------------------------------------------------------------------
1. Objectives...............  Revise language to    No revisions
                               be consistent with    proposed.
                               the newly proposed
                               Section 3.
2. Scope....................  No revisions          No revisions
                               proposed.             proposed.
3. Mandatory Application of   Replace with new      No revisions
 the Process Rule.             Section 3,            proposed.
                               ``Application of
                               the Process Rule''.
4. Setting Priorities for     No revisions          No revisions
 Rulemaking Activity.          proposed.             proposed.
5. Coverage Determination     Eliminate the 180-    Proposed
 Rulemakings.                  day period in         introductory text
                               paragraph (c)         and revised
                               between               paragraph (a) would
                               finalization of DOE   eliminate the
                               test procedures and   requirement that a
                               issuance of a NOPR    coverage
                               proposing new or      determination
                               amended energy        rulemaking begins
                               conservation          with a notice of
                               standards.            proposed
                                                     determination and
                                                     allow DOE to seek
                                                     early stakeholder
                                                     input through
                                                     preliminary
                                                     rulemaking
                                                     documents; revised
                                                     paragraphs (b) and
                                                     (c) would eliminate
                                                     the requirement
                                                     that final coverage
                                                     determinations be
                                                     published prior to
                                                     the initiation of
                                                     any test procedure
                                                     or energy
                                                     conservation
                                                     standard rulemaking
                                                     and at least 180
                                                     days prior to
                                                     publication of a
                                                     test procedure
                                                     NOPR; revised
                                                     paragraph (d) would
                                                     allow DOE to
                                                     propose, if
                                                     necessary, an
                                                     amended coverage
                                                     determination
                                                     before proceeding
                                                     with a test
                                                     procedure or
                                                     standards
                                                     rulemaking.
6. Process for Developing     Eliminate paragraph   Revised paragraph
 Energy Conservation           (b), ``Significant    (a) would eliminate
 Standards.                    Savings of Energy''.  the requirement for
                                                     a separate early
                                                     assessment request
                                                     for information
                                                     (``RFI'') and
                                                     clarify that DOE
                                                     will issue one or
                                                     more documents
                                                     during the pre-NOPR
                                                     stage of a
                                                     rulemaking; revised
                                                     paragraphs (a) and
                                                     (b) would clarify
                                                     public comment
                                                     periods for pre-
                                                     NOPR and NOPR
                                                     documents; revised
                                                     paragraph (a)(5)
                                                     would reflect
                                                     current DOE
                                                     rulemaking
                                                     practice.
7. Policies on Selection of   Eliminate text in     No revisions
 Standards.                    paragraph (e)(2)(i)   proposed.
                               requiring DOE to
                               conduct a
                               comparative
                               analysis when
                               determining whether
                               a proposed standard
                               level is
                               economically
                               justified.
8. Test Procedures..........  Clarify in paragraph  Revised paragraph
                               (c) that DOE may      (a) would eliminate
                               revise consensus      the requirement for
                               industry test         a separate early
                               procedure standards   assessment request
                               for compliance,       for information
                               certification, and    (``RFI'') and
                               enforcement           clarify that DOE
                               purposes; eliminate   will issue one or
                               the 180-day period    more documents
                               in paragraph (d)      during the pre-NOPR
                               between               stage of a
                               finalization of DOE   rulemaking; revised
                               test procedures and   paragraphs (a) and
                               issuance of a NOPR    (b) would clarify
                               proposing new or      public comment
                               amended energy        periods for pre-
                               conservation          NOPR and NOPR
                               standards.            documents and
                                                     eliminate the
                                                     requirement that
                                                     DOE identify
                                                     necessary
                                                     modifications to a
                                                     test procedure
                                                     prior to initiating
                                                     an associated
                                                     energy conservation
                                                     standard
                                                     rulemaking.
9. ASHRAE Equipment.........  No revisions          Revise section to
                               proposed.             follow ASHRAE
                                                     rulemaking
                                                     requirements in
                                                     EPCA.
10. Direct Final Rules......  Revise section to     No revisions
                               clarify that DOE      proposed.
                               will implement its
                               direct final rule
                               authority on a case-
                               by-case basis.
11. Negotiated Rulemaking     Eliminate section...  No revisions
 Process.                                            proposed.
12. Principles for            No revisions          No revisions
 Distinguishing Between        proposed.             proposed.
 Effective and Compliance
 Dates.
13. Principles for the        No revisions          Revise to reflect
 Conduct of the Engineering    proposed.             current DOE
 Analysis.                                           rulemaking
                                                     practice.
14. Principles for the        Eliminate incorrect   Revise to reflect
 Analysis of Impacts on        cross reference.      current DOE
 Manufacturers.                                      rulemaking
                                                     practice.
15. Principles for the        No revisions          Revise to reflect
 Analysis of Impacts on        proposed.             current DOE
 Consumers.                                          rulemaking
                                                     practice.
16. Consideration of Non-     No revisions          Revise to reflect
 Regulatory Approaches.        proposed.             current DOE
                                                     rulemaking
                                                     practice.
17. Cross-Cutting Analytical  No revisions          Revise to reflect
 Assumptions.                  proposed.             current DOE
                                                     rulemaking
                                                     practice; move
                                                     discussion of
                                                     emissions analysis
                                                     into new section.
------------------------------------------------------------------------
* As part of the proposed revisions, DOE will reorganize and renumber
  sections and subsections as required.


[[Page 35671]]

II. Authority and Background
---------------------------------------------------------------------------

    \4\ These proposed revisions are separate from and complementary 
to the revisions contained in DOE's proposed regulatory text from 
its April 2021 NOPR. See 86 FR 18901, 18915-18921 (April 12, 2021).
---------------------------------------------------------------------------

A. Authority

    Title III, Parts B \5\ and C \6\ of the Energy Policy and 
Conservation Act, as amended, (``EPCA'' or ``the Act''), Public Law 94-
163 (42 U.S.C. 6291-6317, as codified), established the Energy 
Conservation Program for Consumer Products and Certain Industrial 
Equipment.\7\ Under EPCA, DOE's energy conservation program for covered 
products consists essentially of four parts: (1) Testing; (2) 
certification and enforcement procedures; (3) establishment of Federal 
energy conservation standards; and (4) labeling. Subject to certain 
criteria and conditions, DOE is required to develop test procedures to 
measure the energy efficiency, energy use, water use (as applicable), 
or estimated annual operating cost of each covered product and covered 
equipment during a representative average use cycle or period of use. 
(42 U.S.C. 6293; 42 U.S.C. 6314) Manufacturers of covered products and 
covered equipment must use the prescribed DOE test procedure when 
certifying to DOE that their products and equipment comply with the 
applicable energy conservation standards adopted under EPCA and when 
making any other representations to the public regarding the energy use 
or efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s); 
42 U.S.C. 6314(a); and 42 U.S.C. 6316(a)) Similarly, DOE must use these 
test procedures to determine whether the products comply with energy 
conservation standards adopted pursuant to EPCA. (42 U.S.C. 6295(s); 42 
U.S.C. 6316(a))
---------------------------------------------------------------------------

    \5\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \6\ Part C was added by Public Law 95-619, Title IV, Sec.  
441(a). For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
    \7\ All references to EPCA in this document refer to the statute 
as amended through Energy Act of 2020, Public Law 116-260 (Dec. 27, 
2020).
---------------------------------------------------------------------------

    In addition, pursuant to EPCA, any new or amended energy 
conservation standard for covered products (and at least certain types 
of equipment) must be designed to achieve the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A); 42 U.S.C. 6316(a)) In determining 
whether a standard is economically justified, EPCA requires DOE, to the 
greatest extent practicable, to consider the following seven factors: 
(1) The economic impact of the standard on the manufacturers and 
consumers; (2) the savings in operating costs, throughout the estimated 
average life of the products (i.e., life-cycle costs), compared with 
any increase in the price of, or in the initial charges for, or 
operating and maintaining expenses of, the products which are likely to 
result from the imposition of the standard; (3) the total projected 
amount of energy, or as applicable, water, savings likely to result 
directly from the imposition of the standard; (4) any lessening of the 
utility or the performance of the products likely to result from the 
imposition of the standard; (5) the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from the imposition of the standard; (6) the need for 
national energy and water conservation; and (7) other factors DOE finds 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)) Furthermore, the new or amended 
standard must result in a significant conservation of energy (42 U.S.C. 
6295(o)(3)(B); 42 U.S.C. 6313(a)(6); and 42 U.S.C. 6316(a)) and comply 
with any other applicable statutory provisions.

B. Background

    DOE conducted an effort between 1995 and 1996 to improve the 
process it follows to develop energy conservation standards for covered 
appliance products. This effort involved reaching out to many different 
stakeholders, including manufacturers, energy-efficiency advocates, 
trade associations, State agencies, utilities, and other interested 
parties for input. The result was the publication of the 1996 Process 
Rule. 61 FR 36974. This document was codified at 10 CFR part 430, 
subpart C, appendix A, and it became known colloquially as the 
``Process Rule.'' The goal of the Process Rule was to elaborate on the 
procedures, interpretations, and policies that would guide the 
Department in establishing new or revised energy conservation standards 
for consumer products. The rule was issued without notice and comment 
under the Administrative Procedure Act's (``APA'') exception for 
``interpretative rules, general statements of policy, or rules of 
agency organization, procedure, or practice.'' (5 U.S.C. 553(b)(A))
    On December 18, 2017, DOE issued an RFI on potential revisions to 
the Process Rule. 82 FR 59992. DOE subsequently published a NOPR 
regarding the Process Rule in the Federal Register on February 13, 
2019. 84 FR 3910. DOE held public meetings for both the RFI and NOPR. 
After considering the comments it received, DOE then published a final 
rule in the Federal Register on February 14, 2020, which significantly 
revised the Process Rule. 85 FR 8626.
    While DOE issued the 1996 Process Rule without notice and comment 
as an interpretative rule, general statement of policy, or rule of 
agency organization, procedure, or practice, the February 2020 Final 
Rule was issued as a legislative rule subject to notice and comment. 
For several reasons, as stated throughout this document and in the 
April 2021 NOPR, DOE believes the Process Rule is best described and 
utilized as generally applicable guidance that may guide, but not bind, 
the Department's rulemaking process. In accordance with E.O. 13990, DOE 
is using a notice and comment process to propose revisions to the 
Process Rule. 86 FR 7037.

III. Discussion of Proposed Revisions to the Process Rule

    The following sections discuss the additional, proposed revisions 
to the Process Rule and request comment on those proposals. DOE is 
currently only soliciting comments on the new, additional revisions 
proposed in this NOPR and is not soliciting comments on the revisions 
proposed in the April 2021 NOPR. In addition to those specific requests 
for comment, DOE requests comment, data, and information regarding all 
aspects of this notice of proposed rulemaking.

A. Coverage Determinations

    In addition to specifying a list of covered products and equipment, 
EPCA contains provisions that enable the Secretary of Energy to 
classify additional types of consumer products and commercial/
industrial equipment as ``covered'' within the meaning of EPCA. (42 
U.S.C. 6292(b); 42 U.S.C. 6312(b)) This authority allows DOE to 
consider regulating additional products and equipment to further the 
goals of EPCA, i.e., to conserve energy, as long as certain statutory 
requirements are met. Under 42 U.S.C. 6312(b), DOE is required to 
include commercial/industrial equipment as covered equipment ``by 
rule.'' While there is no corresponding requirement to include consumer 
products as covered products by rule,\8\ DOE conducts coverage 
determination rulemakings for both

[[Page 35672]]

commercial/industrial equipment and consumer products.
---------------------------------------------------------------------------

    \8\ Under 42 U.S.C. 6292(b), DOE is authorized to ``classify'' a 
consumer product as a covered product if certain conditions are met. 
But there is no mention of DOE having to make such classifications 
by rule.
---------------------------------------------------------------------------

    In the February 2020 Final Rule, DOE added a section on coverage 
determination rulemakings. Among other things, the new section provided 
that DOE will: (1) Initiate a coverage determination rulemaking with a 
notice of proposed determination; (2) publish final coverage 
determinations as separate notices prior to the initiation of any test 
procedure or energy conservation standard rulemaking and at least 180 
days prior to publication of a test procedure NOPR; and (3) finalize 
any changes to an existing scope of coverage before proceeding with a 
test procedure or energy conservation standard rulemaking. 85 FR 8626, 
8648-8653.
    As discussed previously, DOE is reconsidering whether the benefits 
of a one-size-fits-all rulemaking approach that lacks flexibility and 
includes extra procedural steps not required by EPCA outweigh the 
increased difficulty such an approach poses in meeting DOE's statutory 
deadlines and obligations under EPCA. (DOE is including a chart to 
depict its proposed revised process for energy conservation standards 
and test procedure rulemakings, as discussed in this document, in 
Docket No. EERE-2021-BT-STD-0003. Available at: https://www.regulations.gov/docket/EERE-2021-BT-STD-0003.) First, with respect 
to the requirement that DOE initiate a coverage determination 
rulemaking with a notice of proposed determination, DOE notes that in 
some cases it may be necessary to gather information about a consumer 
product or commercial/industrial equipment before issuing a proposed 
determination of coverage. For instance, DOE may only classify a 
consumer product as a covered product if it is necessary or appropriate 
to carry out the purposes of EPCA and the average annual per-household 
energy use of the consumer product is likely to exceed 100 kilowatt-
hours per year. (42 U.S.C. 6292(b)) As such, it may be beneficial to 
first issue an RFI or other document to solicit comment on whether a 
consumer product is likely to meet these requirements. Based on the 
information received, DOE may choose not to proceed with a notice of 
proposed determination. Accordingly, DOE proposes that it may issue an 
RFI or other pre-rule document prior to a notice of proposed coverage 
determination. DOE requests comments, information, and data on whether 
its proposed approach is appropriate or on any suggested alternatives.
    Second, regarding the requirements to finalize coverage 
determinations prior to the initiation of any test procedure or energy 
conservation standard rulemaking and at least 180 days prior to 
publication of a test procedure NOPR, DOE notes that coverage 
determination, test procedure, and energy conservation standard 
rulemakings are interdependent. A coverage determination defines the 
product/equipment scope for which DOE can establish test procedures and 
energy conservation standards. It also signals that inclusion of the 
consumer product or commercial/industrial equipment is necessary to 
carry out the purposes of EPCA, i.e., to conserve energy and/or water. 
In order to make this determination, DOE needs to consider whether a 
test procedure and energy conservation standards can be established for 
the consumer product or commercial/industrial equipment. If DOE cannot 
develop a test procedure that measures energy use during a 
representative average use cycle and is not unduly burdensome to 
conduct (42 U.S.C. 6293(b)(3); 42 U.S.C. 6314(a)(2)) or prescribe 
energy conservation standards that result in significant energy savings 
(42 U.S.C. 6295(o); 42 U.S.C. 6316(a)), then making a coverage 
determination is not necessary as it will not result in the 
conservation of energy. Thus, it is important that DOE be able to 
initiate test procedure and energy conservation standard rulemakings 
while the Department conducts a coverage determination rulemaking. 
Accordingly, DOE proposes to eliminate the requirement that coverage 
determination rulemakings must be finalized prior to initiation of a 
test procedure or energy conservation standard rulemaking. DOE requests 
comments, information, and data on whether its proposed approach is 
appropriate or on any suggested alternatives.
    As for the requirement that a coverage determination be finalized 
180 days prior to publication of a test procedure NOPR, DOE notes that 
there are significant differences between the benefits of finalizing a 
coverage determination prior to publishing a test procedure NOPR and 
the benefits of finalizing a test procedure prior to publishing an 
energy conservation standards NOPR. As discussed in the April 2021 
NOPR, a delay between publication of a test procedure final rule and an 
energy conservation standards NOPR may be beneficial in some cases as 
it could allow stakeholders to gain greater familiarity with complex 
test procedure amendments before providing comment on a proposal to 
amend standards. 86 FR 18901, 18908. But DOE does not see a 
corresponding potential benefit for delaying publication of a test 
procedure NOPR after a coverage determination, which establishes the 
scope of coverage, i.e., a definition, for the newly covered product or 
equipment, is finalized. Accordingly, DOE proposes to eliminate the 
requirement that coverage determination rulemakings must be finalized 
180 days prior to publication of a test procedure NOPR. DOE requests 
comments, information, and data on whether its proposed approach is 
appropriate or on any suggested alternatives. DOE notes that it will 
continue to follow the requirements at 42 U.S.C. 6312(b) for coverage 
determinations for commercial/industrial equipment and at 42 U.S.C. 
6292(b) for consumer products.

B. Process for Developing Energy Conservation Standards

    As part of the February 2020 Final Rule, DOE made a number of 
changes to section 6, Process for Developing Energy Conservation 
Standards, of the Process Rule, at least one of which has been 
revisited in the April 2021 NOPR. Most significantly, the February 2020 
Final Rule amended the Process Rule to include a two-part test for 
determining whether EPCA's significant energy savings threshold has 
been met (see section 6(b) of the 2020 Process Rule amendments). 85 FR 
8626, 8655-8676, 8705. However, for the reasons explained in the April 
2021 NOPR, DOE has proposed to revise the Process Rule to eliminate the 
significant energy savings threshold test and to return to assessment 
of energy savings on a case-by-case basis. 86 FR 18901, 18905.
    Although the aforementioned provision represents the primary change 
to the Process Rule regarding the development of energy conservation 
standards, DOE also adopted a number of other standards-related 
provisions in the February 2020 Final Rule, which are outlined in the 
paragraphs that follow. The Department has decided to revisit these 
provisions in this document and proposes further changes, as explained 
subsequently.
    First, in section 6(a) of the Process Rule, the February 2020 Final 
Rule included an early assessment process for energy conservation 
standards. More specifically, in section 6(a)(1) of the Process Rule, 
DOE committed to publishing a notice in the Federal Register when it is 
considering initiation of a rulemaking to establish or amend any energy 
conservation standard, in which the agency will request submission of 
comments, data, and information on whether DOE

[[Page 35673]]

should proceed with such rulemaking, including whether any new or 
amended rule would be: (1) Cost-effective; (2) economically justified; 
(3) technologically feasible, or (4) would result in a significant 
savings of energy. Based upon available information, if DOE determines 
that a new or amended standard would not satisfy the applicable 
statutory criteria, it will publish a notice of proposed determination 
to that effect in the Federal Register for notice and comment. 
Otherwise, section 6(a)(2) of the Process Rule provides that DOE would 
undertake the preliminary stages of a rulemaking to issue or amend the 
energy conservation standard, proceeding with either a framework 
document/preliminary analysis or an advance notice of proposed 
rulemaking (``ANOPR''). The Process Rule further provides that RFIs and 
notices of data availability (``NODA'') could be issued, as 
appropriate, in addition to these preliminary-stage documents. Finally, 
in section 6(a)(3) of the Process Rule, DOE clarifies that initiation 
of a standards rulemaking does not guarantee that standards will be 
issued, because it could later be discovered that the applicable 
statutory criteria ultimately could not be satisfied. 85 FR 8626, 8704-
8705.
    Upon further consideration, DOE is proposing to modify these 
provisions to allow for a more expedited rulemaking process in 
appropriate cases, particularly in light of the significant number of 
legal deadlines confronting the Appliance Standards Program and the 
anticipated benefits to the Nation of the associated energy 
conservation standards. Because interested parties are free to raise 
the matter of the likelihood of satisfying or not satisfying the 
applicable statutory criteria needed for adoption of a new or amended 
energy conservation standard at any stage of the rulemaking, DOE has 
tentatively concluded that a separate rulemaking document limited to 
only that topic (i.e., the early assessment RFI) may unnecessarily 
delay the overall process without appreciable benefit if used in all 
cases. Consequently, DOE proposes to remove the requirement for a 
separate early assessment RFI for energy conservation standards. 
Instead, DOE would welcome the same type of information in the context 
of an RFI, preliminary analysis, ANOPR, or some other pre-NOPR 
document, while at the same time asking other relevant questions and 
gathering information in the event that the Department decides to 
proceed with an energy conservation standards rulemaking. DOE requests 
comments, information, and data on whether its proposed approach is 
appropriate or on any other suggested alternatives.
    Second, in section 6(e)(1) of the Process Rule, the February 2020 
Final Rule clarified that if DOE determines it appropriate to move 
forward with an energy conservation standards rulemaking after 
conducting an early assessment, then the Department will publish in the 
Federal Register either a framework document with a subsequent 
preliminary analysis or an ANOPR. That same subsection provides that if 
DOE finds, based upon the early assessment, that one or more of the 
required statutory criteria for setting an energy conservation standard 
cannot be met, then the Department will publish a proposed 
determination to that effect in the Federal Register for notice and 
comment (which may lead to a final determination, as appropriate). 
Section 6(e)(2) of the Process Rule provides that the length of the 
public comment period for pre-NOPR rulemaking documents will vary 
depending upon the circumstances of the particular rulemaking, but will 
not be less than 75 calendar days, and it further provides that DOE 
will determine whether a public hearing is appropriate for such 
documents. 85 FR 8626, 8705.
    After further consideration, DOE proposes to modify and clarify 
these provisions as follows. As noted previously, DOE is proposing to 
eliminate the requirement for an energy conservation standard early 
assessment RFI, while maintaining the opportunity for early public 
input through other rulemaking documents as to whether new or amended 
energy conservation standards are warranted under the applicable 
statutory criteria. The Department has tentatively concluded that one 
round of pre-NOPR input may be sufficient in some cases. For instance, 
DOE is required to revisit final determinations that energy 
conservation standards do not need to be amended within three years. 
(42 U.S.C. 6295(m)(3)(B)) In such cases, DOE may only need to issue an 
RFI or NODA to update its rulemaking analysis in preparation for 
proposing amended standards or a determination that standards do not 
need to be amended. Another example for which a single round of pre-
NOPR input may be sufficient would be if a product has been subject to 
multiple rounds of rulemaking, relies on mature technologies, and for 
which the market is well understood. As such, DOE proposes to publish 
one or more documents in the Federal Register during the pre-NOPR stage 
of a rulemaking to gather information on key issues. Such document(s) 
could take several forms depending upon the specific proceeding, 
including a framework document, RFI, NODA, preliminary analysis, or 
ANOPR.
    Additionally, DOE proposes to remove the 75-day comment period 
requirement for pre-NOPR energy conservation standards documents, as it 
is not compelled by EPCA or other applicable law. Instead, for these 
pre-NOPR documents for which there is no statutorily required comment 
period, DOE would provide an appropriate comment period,\9\ determined 
on a case-by-case basis, which is commensurate with the nature and 
complexity of the energy conservation standard at issue, and will 
consider requests from the public for extension of the comment period 
to allow additional opportunities for public input. Particularly given 
the many legal deadlines the Department faces for various appliance 
rulemakings, DOE reasons that these proposed changes would promote 
efficiency by eliminating redundant requests for the same information 
and otherwise streamlining the rulemaking process. It is DOE's belief 
that these changes would improve the efficiency of the Appliance 
Standards Program without sacrificing the quality of DOE's analyses or 
the opportunity for public input. Thus, for the reasons stated, DOE 
proposes to revise section 6(e) of the Process Rule to reflect these 
changes. DOE requests comments, information, and data on whether its 
proposed approach is appropriate or on any other suggested 
alternatives. DOE also seeks comment on whether these changes would 
affect the quality of DOE's analyses or opportunities for public 
comment.
---------------------------------------------------------------------------

    \9\ See, for example, Executive Order 12866(6)(a)(1): ``Each 
agency shall (consistent with its own rules, regulations, or 
procedures) provide the public with meaningful participation in the 
regulatory process. In particular, before issuing a notice of 
proposed rulemaking, each agency should, where appropriate, seek the 
involvement of those who are intended to benefit from and those 
expected to be burdened by any regulation (including, specifically, 
State, local, and tribal officials). In addition, each agency should 
afford the public a meaningful opportunity to comment on any 
proposed regulation, which in most cases should include a comment 
period of not less than 60 days.''
---------------------------------------------------------------------------

    In section 6(g)(2) of the Process Rule, the February 2020 Final 
Rule stated that there would be a public comment period of at least 75 
days for an energy conservation standards NOPR, with at least one 
public hearing or workshop. 85 FR 8626, 8706.
    After further consideration, DOE proposes to modify the provision 
at section 6(g)(2) as follows. DOE proposes to remove the 75-day 
comment period

[[Page 35674]]

requirement for energy conservation standards NOPRs, replacing it with 
a 60-day comment period as required by EPCA. (42 U.S.C. 6295(p)(2); 42 
U.S.C. 6316(a)) Although the Department believes that 60 days offers an 
adequate amount of time for comment in most cases, DOE may extend the 
comment period, as appropriate and on a case-by-case basis, 
commensurate with the nature and complexity of the energy conservation 
standard at issue. While the 2020 Process Rule has not been in effect 
for long enough to cause these missed deadlines, for the reasons 
discussed throughout, DOE has tentatively concluded that this proposed 
change would promote the efficiency of the Appliance Standards Program 
by streamlining the rulemaking process. DOE requests comments, 
information, and data on whether its proposed approach is appropriate 
or on any other suggested alternatives.
    Finally, section 6(f)(4) of the current Process Rule discusses 
factors to be considered in selecting a proposed standard. These 
provisions were not modified in the February 2020 Final Rule. DOE 
proposes to make minor updates to these provisions (now in proposed 
section 6(a)(5)(iv)) to reflect current Departmental practice, which 
has evolved in the decades since development of the 1996 Process Rule. 
The descriptions of the analyses currently in sections 13-17 present 
the procedures, interpretations, and policies as set forth in the 1996 
Process Rule. In the years following that final rule, DOE's analyses 
have evolved and been refined. DOE also notes that stakeholders are 
afforded the opportunity to comment on the specific application of 
these analyses as part of the individual product and equipment 
rulemakings. The revisions proposed in the following sections reflect 
the current state of DOE's analytical methodologies. Specifically, DOE 
proposes and seeks public comment on the following proposed revisions:
    <bullet> Impacts on manufacturers: Remove specification of 
``private'' in relation to manufacturer impacts, change assessment of 
impacts on plant closures to impacts on employment, and clarify that 
changes to capital investment may not be negative.
    <bullet> Private impacts on consumers: Clarify that DOE typically 
uses regional energy prices rather than national prices and remove 
reference of sensitivity analyses from this section as they correctly 
apply to the national impacts section.
    <bullet> Impacts on utilities: Revise to specify that this analysis 
considers utility generation and capacity rather than costs and 
revenues.
    <bullet> Impacts on the environment: Remove reference to impacts on 
pollution control costs, which DOE does not consider.
    Additional detail regarding these proposed changes is provided in 
section III.E of this NOPR.

C. Process for Developing Test Procedures

    As part of the February 2020 Final Rule, DOE made a number of 
changes to section 8, Test Procedures, of the Process Rule, some of 
which have been revisited in the April 2021 NOPR. First, the February 
2020 Final Rule amended the Process Rule's title to reflect DOE's long 
practice of including test procedure rulemakings (as well as certain 
commercial/industrial equipment) within its scope, as the 1996 Process 
Rule only explicitly referred to energy conservation standards 
rulemakings for consumer products. 85 FR 8626, 8703. Although DOE has 
proposed in its April 2021 NOPR to once again make the Process Rule 
nonbinding guidance for the reasons explained in that document, DOE has 
maintained the applicability of the Process Rule to covered consumer 
products and certain commercial/industrial equipment, as well as to 
energy conservation standards and test procedures. 86 FR 18901, 18904-
18905, 18915. The February 2020 Final Rule also required DOE to 
finalize a test procedure 180 days prior to publication of a NOPR to 
prescribe new or amended energy conservation standards, and it set a 
presumption that the Department would adopt applicable industry 
consensus test procedures without modification, unless such industry 
test procedures do not meet the requirements of EPCA. 85 FR 8626, 8676-
8682, 8707-8708. However, in the April 2021 NOPR, DOE proposed to 
revise the Process Rule to eliminate the mandatory 180-day spacing 
requirement, and the Department also proposed to clarify that DOE will 
only adopt industry consensus test procedures if they meet the 
requirements of EPCA and that DOE may also adopt industry test 
procedure standards with modifications, or draft its own procedures as 
necessary to ensure compatibility with the relevant statutory 
requirements, as well as DOE's compliance, certification, and 
enforcement requirements. 86 FR 18901, 18906-18908, 18918-18919.
    Although the aforementioned provisions represent the primary 
changes to the Process Rule test procedure provisions, DOE also adopted 
a small number of other test procedure-related provisions in the 
February 2020 Final Rule, which are outlined in the paragraphs that 
follow. The Department has decided to revisit these provisions in this 
document and proposes further changes, as explained subsequently.
    First, in section 8(a) of the Process Rule, the February 2020 Final 
Rule included an early assessment process for test procedures similar 
to that adopted for energy conservation standards. Consequently, DOE 
committed to publishing a notice in the Federal Register when it is 
considering initiation of a rulemaking to amend a test procedure, in 
which the agency will request submission of comments, data, and 
information on whether an amended test procedure rule would: (1) More 
accurately measure energy efficiency, energy use, water use (as 
specified in EPCA), or estimated annual operating cost of a covered 
product during a representative average use cycle or period of use 
without being unduly burdensome to conduct; or (2) reduce testing 
burden. Based upon available information, if DOE determines that an 
amended test procedure is not justified at that time, it will publish a 
notice of proposed determination to that effect in the Federal Register 
for notice and comment. Otherwise, DOE would undertake the preliminary 
stages of a rulemaking to amend the test procedure. 85 FR 8626, 8707-
8708.
    Upon further consideration, DOE is proposing to modify this 
provision to allow for a more expedited rulemaking process in 
appropriate cases, particularly in light of the significant number of 
legal deadlines confronting the Appliance Standards Program and the 
anticipated benefits to the Nation of the associated energy 
conservation standards. Because interested parties are free to raise 
the matter of the need for an amended test procedure at any preliminary 
stage of the rulemaking, DOE has tentatively concluded that a separate 
rulemaking document limited to only that topic (i.e., the early 
assessment RFI) unnecessarily delays the overall process without 
appreciable benefit. Consequently, DOE proposes to remove the 
requirement for a separate early assessment RFI for test procedures. 
Instead, DOE would welcome the same type of information in the context 
of an RFI, preliminary analysis, ANOPR, or some other pre-NOPR 
document, while at the same time asking relevant questions and 
gathering information about other test procedure issues, such as the 
applicability of any industry test procedure, in the event that the 
Department decides to proceed with a test procedure rulemaking.

[[Page 35675]]

Additionally, for these pre-NOPR documents for which there is no 
statutorily required comment period, DOE proposes to clarify that the 
Department would provide an appropriate comment period for pre-NOPR 
documents, determined on a case-by-case basis, which is commensurate 
with the nature and complexity of the test procedure rulemaking at 
issue. DOE also proposes to clarify that it will provide a minimum 60-
day public comment period with at least one public hearing or workshop 
for test procedure NOPR documents. DOE has historically provided a 75-
day comment period for test procedure NOPRs, consistent with the 
comment period requirement for technical regulations in the North 
American Free Trade Agreement, U.S.-Canada-Mexico (``NAFTA''), Dec. 17, 
1992, 32 I.L.M. 289 (1993); the North American Free Trade Agreement 
Implementation Act, Public Law 103-182, 107 Stat. 2057 (1993) (codified 
as amended at 10 U.S.C.A. 2576) (1993) (``NAFTA Implementation Act''); 
and Executive Order 12889, ``Implementation of the North American Free 
Trade Agreement,'' 58 FR 69681 (Dec. 30, 1993). However, Congress 
repealed the NAFTA Implementation Act and has replaced NAFTA with the 
Agreement between the United States of America, the United Mexican 
States, and the United Canadian States (``USMCA''), Nov. 30, 2018, 134 
Stat. 11, thereby rendering E.O. 12889 inoperable. Consequently, since 
the USMCA is consistent with EPCA's public comment period requirements 
and normally requires a minimum comment period of 60 days for technical 
regulations, DOE now proposes to provide a minimum 60-day public 
comment period for test procedure NOPRs. DOE requests comments, 
information, and data on whether its proposed approach is appropriate 
or on any other suggested alternatives.
    Second, in section 8(b) of the Process Rule, the February 2020 
Final Rule contemplated further opportunities for early public input if 
the Department determines to move forward with the test procedure 
rulemaking after considering comments on the early assessment RFI. 
Also, in that subsection, the February 2020 Final Rule stated that DOE 
will identify any necessary modifications to established test procedure 
prior to initiating the standards development process. 85 FR 8626, 
8708. After further consideration, DOE proposes to modify and clarify 
these provisions as follows. As noted previously, DOE is proposing to 
eliminate the requirement for a test procedure early assessment RFI, 
while maintaining the opportunity for early public input through other 
rulemaking documents (potentially including RFIs) as to whether test 
procedure amendments are warranted under the applicable statutory 
criteria. The Department has tentatively concluded that one round of 
pre-NOPR input may be sufficient in some cases. Furthermore, DOE would 
clarify that its intention in section 8(b) was that Department will 
identify all test procedure modifications prior to issuing a proposed 
standard for that appliance, not to preclude the agency from preparing 
other pre-rulemaking standards documents, such as RFIs, NODAs, and 
preliminary analyses. DOE believes that such preliminary standards-
related work and data gathering can commence in concert with the test 
procedure proceeding, as long as any anticipated test procedure changes 
are identified and evaluated in time for them to be factored into the 
energy conservation standards proposal. It is DOE's belief that these 
changes would improve the efficiency of the Appliance Standards Program 
without sacrificing the quality of DOE's analyses or the opportunity 
for public input. DOE requests comments, information, and data on 
whether its proposed approach is appropriate or on any other suggested 
alternatives. In addition, DOE seeks comment on whether these changes 
would affect the quality of DOE's analyses or opportunities for public 
comment.

D. ASHRAE Equipment

    In EPCA, Congress established a separate and unique regulatory 
scheme pertaining to DOE rulemaking of certain covered equipment 
addressed by ASHRAE Standard 90.1, Energy Standard for Buildings Except 
Low-Rise Residential Buildings, including specific requirements for 
both energy conservation standards and test procedures. See 42 U.S.C. 
6313(a)(6) and 42 U.S.C. 6314(a)(4), respectively. In the February 2020 
Final Rule, DOE added a section to the Process Rule specifically 
addressing ASHRAE equipment for the first time.\10\ 85 FR 8626, 8708.
---------------------------------------------------------------------------

    \10\ The 1996 Process Rule final rule did not address ASHRAE 
equipment specifically. 61 FR 36974 (July 15, 1996).
---------------------------------------------------------------------------

    While DOE sees value in setting forth the statutory requirements 
and the Department's regulatory process for covered ASHRAE equipment, a 
subsequent review suggests that DOE's initial efforts to explain the 
applicable ASHRAE requirements could be improved, both in terms of 
better delineating the process for energy conservation standards/test 
procedures and removing constraints that are neither compelled by the 
statute nor consistent with DOE's historic practice, and would impede 
DOE's ability to achieve EPCA's energy conservation purposes.
    Consequently, DOE proposes to reorganize and revise the ASHRAE 
section of the Process Rule to focus on the requirements in EPCA, to 
increase clarity, and to be consistent with longstanding DOE practices. 
As part of this effort, DOE is proposing to remove extraneous language 
relating to DOE's interpretations of the statute's ASHRAE provisions, 
because the Department has found matters pertaining to scope, 
triggering, and applicable statutory criteria to typically involve 
nuances most appropriately addressed in individual ASHRAE rulemaking 
actions. One such example would be an update to the relevant ASHRAE 
standard that specifies standard levels for a type of covered equipment 
that previously was not subject to standards, as was the case with 
computer room air conditioners. See 77 FR 28928 (May 16, 2012). In such 
an instance, the application of EPCA's trigger provision is not the 
typical scenario in which existing standard levels for covered 
equipment are updated. Such matters may not lend themselves to a 
standardized approach suitable for inclusion in the Process Rule, but 
instead, are better addressed on a case-by-case basis in the context of 
the specific ASHRAE rulemaking in question. In light of the above, 
DOE's proposed changes are discussed in the paragraphs that follow.
    First, DOE proposes to include separate sections delineating the 
EPCA requirements under two scenarios: (1) ASHRAE action regarding 
standards and test procedures (i.e., ``ASHRAE trigger'' under 42 U.S.C. 
6313(a)(6)(A) and 42 U.S.C. 6314(a)(4)(A)-(B), respectively) and (2) 
DOE's obligation to periodically review energy conservation standards 
and test procedures for ASHRAE equipment (i.e., 6-year-lookback or 7-
year-lookback under 42 U.S.C. 6313(a)(6)(C) and 42 U.S.C. 6314(a)(1), 
respectively). It is expected that this refinement would provide 
additional clarity to stakeholders by more clearly articulating the 
statutory scheme regarding standards and test procedure rulemakings for 
ASHRAE equipment.
    Within the ASHRAE trigger section, DOE proposes to further separate 
out the statutory requirements for energy conservation standards and 
test procedures. In the current version of the

[[Page 35676]]

Process Rule, EPCA's timelines for energy conservation standards were 
erroneously applied to test procedures as well. DOE wishes to make 
clear the applicable statutory timelines applicable to energy 
conservation standard and test procedure rulemakings in the Process 
Rule. DOE also proposes to clarify what type of action on the part of 
ASHRAE would trigger a DOE review for amended energy conservation 
standards and test procedures. With respect to amended energy 
conservation standards, DOE only considers ASHRAE to have acted in a 
manner triggering DOE review when an updated version of ASHRAE Standard 
90.1 publishes (i.e., not at the time that an addendum to ASHRAE 
Standard 90.1 is released or approved), and the updated version 
includes an increase in stringency of standard levels or a new design 
requirement relative to the current Federal standards. With respect to 
test procedures, DOE only considers ASHRAE to have acted in a manner 
triggering DOE review when an updated version of ASHRAE Standard 90.1 
publishes (i.e., not at the time that an addendum to ASHRAE Standard 
90.1 is released or approved), and that updated version adopts a new or 
amended test procedure. This approach is consistent with the ASHRAE-
specific provisions in EPCA and generally consistent with past DOE 
practice. DOE notes in the past that it has treated an update to the 
industry test procedure standard referenced by ASHRAE Standard 90.1 as 
a trigger. See e.g., 77 FR 2356, 2358 (Jan. 17, 2012). DOE proposes to 
only consider an update to ASHRAE Standard 90.1 that modifies the 
referenced industry test procedure to be a trigger under the statute. 
This approach is consistent with EPCA and provides certainty to the 
public regarding when DOE is required to consider updating test 
procedures for ASHRAE equipment. Finally, DOE notes that ASHRAE 
reviewing and reaffirming (i.e., not amending) a standard or test 
procedure does not trigger a DOE review or affect the timing of DOE's 
separate obligation under EPCA to periodically review standards and 
test procedures for each class of covered equipment.
    Under the ASHRAE trigger for test procedures (42 U.S.C. 
6314(a)(4)), when ASHRAE Standard 90.1 is amended, the statute requires 
DOE to amend the Federal test procedure to be consistent with the 
updated version of Standard 90.1, unless the Department determines, by 
rule, published in the Federal Register and supported by clear and 
convincing evidence, that the amended industry test standard would not 
be representative of the equipment's energy efficiency, energy use, or 
estimated operating cost during a representative average use cycle and 
not be unduly burdensome to conduct. In such cases, DOE may then 
develop its own test procedure which does meet these statutory 
requirements related to representativeness and burden, even if the test 
procedure is not consistent with the amended industry test standard. 
Further, DOE notes that the statutory language ``consistent with'' 
itself provides some flexibility in adopting the amended industry test 
procedure. As EPCA does not require DOE to adopt a test procedure 
identical to applicable industry test standard, DOE may make 
modifications that are consistent with the applicable industry test 
standard.
    In addition, DOE proposes to clarify that it is not required to 
adopt or align with sections of the industry test standard that are not 
necessary for the method of test for metrics included in the DOE test 
procedure (e.g., sections of the industry test procedure regarding 
selection of models for testing under an industry certification 
program, verification of represented values and the associated 
tolerances, and operational requirements need not be referenced or 
aligned with by DOE). These proposals are consistent with the 
Department's longstanding historic practice.
    DOE proposes to remove the statement that DOE will adopt the 
revised ASHRAE levels or the industry test procedure, except in very 
limited circumstances. The circumstances under which DOE will adopt a 
more-stringent standard than the ASHRAE standard or a different test 
procedure are laid out in the statute. For example, DOE will issue a 
more-stringent standard than the ASHRAE standard if DOE determines, 
supported by clear and convincing evidence, that the more-stringent 
standard would result in significant additional conservation of energy 
and is technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(A)(ii)(II)) ``Very limited circumstances'' is an ambiguous 
description for a process that is delineated in EPCA. As a result, DOE 
proposes to remove this description of the circumstances under which 
DOE will not adopt the amended ASHRAE standard or industry test 
procedure.
    In addition, DOE proposes to remove the discussion of what 
constitutes clear and convincing evidence. As DOE previously noted in 
the February 2020 Final Rule, the clear and convincing evidence 
standard has a specific meaning that the courts have routinely 
addressed through case law. See 85 FR 8626, 8642 (discussing in detail 
application of the ``clear and convincing'' evidentiary standard by 
courts and legal commentators). DOE does not believe the elaboration 
contained in the current paragraph adds value to the EPCA language 
already referenced in this section or to the established case law 
pertaining to the standard of review for clear and convincing evidence.
    DOE also proposes to remove the statement that DOE believes that 
ASHRAE not acting to amend Standard 90.1 is tantamount to a decision 
that the existing standard remain in place. This statement does not 
have any effect on DOE's rulemaking obligations under the ASHRAE 
provisions in EPCA. As discussed previously, DOE initiates an ASHRAE 
rulemaking because: (1) Standard 90.1 is amended to include more-
stringent standards or a new design requirement; or (2) EPCA requires 
DOE to evaluate each class of covered equipment every 6 years. Neither 
of these situations would be affected by a decision by ASHRAE to 
reaffirm an existing standard.
    Finally, DOE also proposes to make two clarifications regarding its 
ASHRAE review process, which are consistent with longstanding DOE 
practice. First, in an ASHRAE trigger analysis, DOE will assess energy 
savings from amended ASHRAE Standard 90.1 levels as compared to the 
current Federal standard (or the market baseline in cases where ASHRAE 
adds new equipment classes or categories not previously subject to 
Federal standards), and will also assess energy savings from more-
stringent standards as compared to the ASHRAE Standard 90.1 levels. DOE 
notes that the analysis period differs for these assessments, as EPCA 
specifies different compliance dates for adopting levels in ASHRAE as 
opposed to adopting more-stringent levels. And, second, DOE notes that 
under an ASHRAE trigger, it may review all metrics for the equipment 
category, even though ASHRAE only amended DOE's regulated metric(s), 
and the Department may also consider changing regulated metrics (while 
assessing equivalent stringency between metrics). DOE may also consider 
changing metrics during a 6-year-lookback or 7-year-lookback review. 
DOE believes this is consistent with EPCA's requirement that test 
procedures (and metrics) be representative of an average use cycle.
    DOE requests comments, information, and data on whether its 
proposed approaches to ASHRAE standards and test procedure rulemakings 
are appropriate or on any other suggested alternatives.

[[Page 35677]]

E. Analytical Methodology

    In the February 2020 Process Rule, DOE stated that it would 
consider changes to sections of the Process Rule involving its 
analytical methodologies in a subsequent proceeding after completion of 
a peer review. 85 FR 8686-8687. As such, these sections remained 
largely unchanged from the 1996 Process Rule. Subsequently, DOE engaged 
with the National Academy of Sciences (``NAS'') to review DOE's 
analytical methodologies to ascertain whether modifications are needed 
to improve the Department's analyses. That review process is still 
ongoing. Upon further reconsideration, DOE believes that it is 
important to revise the analytical sections in the Process Rule to 
better reflect Departmental practice. The descriptions of the analyses 
currently in sections 13-17 present the procedures, interpretations, 
and policies as set forth in the 1996 Process Rule. In the years 
following that final rule, DOE's analyses have evolved and been 
refined. The revisions proposed in the following sections reflect the 
current state of DOE's analytical methodologies. If DOE makes any 
revisions to its analytical methods based on the NAS peer review, the 
Department will propose any necessary corresponding revisions to the 
Process Rule in a subsequent proceeding.
1. New Section 12 Principles for the Conduct of the Engineering 
Analysis
    DOE proposes to update the description of the analysis to more 
comprehensively describe the various approaches DOE takes in developing 
cost-efficiency relationships. Specifically, DOE proposes to reorganize 
the discussion to clearly describe the two key aspects of the 
engineering analysis: The efficiency analysis (i.e., identifying the 
efficiency levels for analysis) and the cost analysis (i.e., estimating 
the costs at each analyzed efficiency level).
    In particular, DOE typically uses one of two approaches to develop 
energy efficiency levels for the engineering analysis: (1) Relying on 
observed efficiency levels in the market (i.e., the efficiency-level 
approach), or (2) determining the incremental efficiency improvements 
associated with incorporating specific design options to a baseline 
model (i.e., the design-option approach).
    DOE typically uses one or a combination of approaches to conduct 
the cost analysis, including (1) physical teardowns (i.e., physically 
dismantling a commercially available product/equipment model, 
component-by-component, to develop a detailed bill of materials for the 
model); (2) catalog teardowns (i.e., identifying each component using 
parts diagrams available from manufacturer websites or appliance repair 
websites, in lieu of physically deconstructing the product/equipment, 
to develop the bill of materials for the product/equipment); and/or (3) 
price surveys (i.e., deriving costs using publicly available pricing 
data published on major online retailer websites and/or by soliciting 
prices from distributors and other commercial channels). The choice of 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the subject 
product/equipment, and the availability and timeliness of purchasing 
the product/equipment on the market.
2. New Section 13 Principles for the Analysis of Impacts on 
Manufacturers
    In the preamble to the July 1996 Process Rule, the Department of 
Energy committed to a detailed review of the existing manufacturer 
impact analysis methodologies. 61 FR 36974, 36979. During a series of 
public consultations in 1997, the Department presented a draft work 
plan for the development of new methods for assessing manufacturer 
impacts and invited comments and suggestions from interested parties. 
See 62 FR 8189 (Feb. 24, 1997). The Department implemented its revised 
Manufacturer Impact Analysis methodologies for final rules issued 
subsequently. DOE proposes to update the Process Rule to align with the 
manufacturer impact analysis methodologies that are the result of the 
1997 process and subsequent stakeholder input. DOE proposes to clarify 
the process used to evaluate manufacturers impacts and expands the 
guidance on the methodologies used to solicit stakeholder input. The 
updates include:
    <bullet> Acknowledgement of the manufacturer interview process. DOE 
adds language to reflect a critical tool used as part of the current 
process, wherein manufacturer specific data and information are used to 
develop and validate key inputs for the manufacturer impact analysis.
    <bullet> Added detail on use of the Government Regulatory Impact 
Model (GRIM). The 1996 and 2020 Process Rules make mention of the GRIM 
without explanation of the model. DOE adds language on the structure, 
underlying principles, and outputs of the model.
    <bullet> Differentiation between types of cost impacts. To better 
reflect the current process, DOE expands discussion about the types of 
manufacturer cost impacts considered in the analysis.
    <bullet> Clarification on the treatment of manufacturer subgroups. 
To be consistent with the current process, DOE adds criteria on the 
evaluation of subgroups of manufacturers that may be disproportionately 
impacted by standards or that may not be accurately represented by the 
average cost assumptions.
    <bullet> Consideration of competitive impacts, as required by EPCA. 
To be consistent with the current process and with EPCA, DOE adds 
criteria to consider any lessening of competition that is likely to 
result from imposition of standards and clarifies how the Department 
will coordinate with the Department of Justice.
    <bullet> Inclusion of stakeholder concerns related to manufacturing 
capacity and direct employment impacts. To be consistent with the 
current process, DOE highlights criteria related to manufacturing 
capacity and direct employment impacts that the Department considers in 
its assessment of impacts on manufacturers.
3. New Section 14 Principles for the Analysis of Impacts on Consumers
    DOE proposes minor changes to the discussion of analytical 
principles related to consumer impacts. These changes reflect the 
analytical methodologies that are the result of several iterations of 
stakeholder input and regulatory review, advances in data availability, 
and advances in analytical techniques in the academic literature. In 
particular, DOE proposes the following changes: (1) Clarifications 
regarding the use of analytical input distributions in order to 
establish representative consumer samples and evaluate the range of 
potential impacts. These changes help to differentiate variation in 
consumer impacts captured in the Life-Cycle Cost (LCC) analysis from 
additional sensitivity or scenario analyses used for data or 
assumptions subject to a higher degree of uncertainty; (2) 
clarifications to differentiate the LCC analysis from the consumer 
subgroup analysis, the latter of which considers impacts on subgroups 
of consumers who may be disproportionately impacted by a potential 
standard; (3) removal of discussion of magnitude of first cost and 
length of payback period triggering additional assessments, as those 
assessments are always made when relevant to a given products; and (4) 
the addition of a discussion on consumer discount rates, found in 
section 17 of the current Process Rule.

[[Page 35678]]

The revised discussion reflects DOE's established practice of 
calculating weighted discount rates based on debt and equity holdings 
for both residential and commercial/industrial consumers, for the 
purposes of the LCC analysis.
4. New Section 15 Consideration of Non-Regulatory Approaches
    DOE proposes to simplify the text to reflect its current practice 
and to clarify the data available for use in DOE's analyses. 
Specifically, the proposed revisions clarify that DOE's established 
practice is to compare non-regulatory initiatives relative to 
candidate/trial standard levels rather than considering their 
individual impacts. In addition, the proposed revisions clarify that 
DOE bases its assessment on the actual impacts of existing non-
regulatory initiatives, and does not typically speculate on potential 
future non-regulatory initiatives or initiatives that have not yet been 
implemented. Finally, DOE proposes to eliminate reference to assessing 
appropriate compliance dates, as these are nearly always statutorily 
defined.
5. New Section 16 Cross-Cutting Analytical Assumptions
    DOE proposes minor updates to reflect DOE's long-standing 
analytical practice. In particular, DOE proposes the following 
clarifications: (1) DOE will continue to utilize a 30-year analysis 
period along with a 9-year sensitivity analysis, but DOE no longer 
analyzes a time length specific to each product; (2) energy-efficiency 
trends will be based on the best available historical market data 
(which may or may not be based on NEMS); (3) analyses will generally 
adopt the reference energy price scenario of EIA's most current Annual 
Energy Outlook (while demand is not typically considered); and (4) the 
discount rates used in determining national costs and benefits 
(formerly referred to as social discount rates) are in accordance with 
the Office of Management and Budget (OMB)'s guidance to Federal 
agencies on developing regulatory analyses (OMB Circular A-4, September 
17, 2003, and section E., ``Identifying and Measuring Benefits and 
Costs,'' therein).
6. New Section 17 Emissions Analysis
    DOE also proposes a new section 17 discussing the Department's 
emissions analysis that is based on text that is currently part of 
section 17, Cross-Cutting Analytical Assumptions. The proposed updates 
clarify that DOE will estimate emissions reductions of greenhouse gases 
and pollutants likely to result from candidate/trial standard levels 
following best practices at the time. These emissions reductions will 
potentially include the effect on electric power sector and site 
combustion emissions, as well as on ``upstream activities'' in the fuel 
production chain. The proposed updates also clarify that estimation of 
the monetary value of the avoided greenhouse gas emissions, as well as 
those of other air pollutants, will be based on best practices at the 
time, for example, by using accepted benefit-per-ton values from the 
scientific literature.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    This regulatory action is a significant regulatory action under 
section 3(f)(4) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993). Accordingly, this proposed 
regulatory action was subject to review under the Executive Order by 
the Office of Information and Regulatory Affairs (OIRA) in the Office 
of Management and Budget (OMB).
    The revisions contained in this proposed regulatory action are 
procedural changes designed to improve DOE's ability to meet its 
rulemaking obligations and deadlines under EPCA. These proposed 
revisions would not impose any regulatory costs or burdens on 
stakeholders, nor would they limit public participation in DOE's 
rulemaking process. Instead, these proposed revisions would allow DOE 
to tailor its rulemaking processes to fit the facts and circumstances 
of a particular rulemaking for a covered product or equipment.
    DOE currently has energy conservation standards and test procedures 
in place for more than 60 categories of covered products and equipment 
and is typically working on anywhere from 50 to 100 rulemakings (for 
both energy conservation standards and test procedures) at any one 
time. Further, these rulemakings are all subject to statutory or other 
deadlines. Typically, review cycles for energy conservation standards 
and test procedures for covered products are 6 and 7 years, 
respectively. (42 U.S.C. 6295(m)(1); 42 U.S.C 6293(b)(1)) Additionally, 
if DOE decides not to amend an energy conservation standard for a 
covered product, the subsequent review cycle is shortened to 3 years. 
(42 U.S.C. 6295(m)(3)(B)) It is challenging to meet these cyclical 
deadlines for more than 60 categories of covered products and 
equipment. In fact, as previously discussed, DOE is currently facing 
two lawsuits that allege DOE has failed to meet rulemaking deadlines 
for 25 different consumer products and commercial equipment.
    In order to meet these rulemaking deadlines, DOE cannot afford the 
inefficiencies that come with a one-size-fits-all rulemaking approach. 
For example, having to issue an early assessment RFI followed by an 
ANOPR to collect early stakeholder input when a NODA or other pre-rule 
document would accomplish the same purpose unnecessarily lengthens the 
rulemaking process and wastes limited DOE resources. Similarly, having 
to identify any necessary modifications to a test procedure prior to 
initiating an energy conservation standard rulemaking makes it more 
difficult for DOE to meet rulemaking deadlines, while offering little 
to no benefit to stakeholders. The revisions proposed in this document 
would allow DOE to eliminate these types of inefficiencies that 
lengthen the rulemaking process and waste DOE resources, while not 
affecting the ability of the public to participate in the rulemaking 
process. Eliminating inefficiencies that lengthen the rulemaking 
process allows DOE to more quickly develop energy conservation 
standards that deliver the environmental benefits, including reductions 
in greenhouse gas emissions, that DOE is directed to pursue under E.O. 
13990. Further, the sooner new or amended energy conservation standards 
eliminate less-efficient covered products and equipment from the 
market, the greater the resulting energy savings and environmental 
benefits.
    Finally, the revisions proposed in this document would not dictate 
any particular rulemaking outcome in an energy conservation standard or 
test procedure rulemaking. DOE will continue to calculate the 
regulatory costs and benefits of new and amended energy conservation 
standards and test procedures issued under EPCA in future, individual 
rulemakings.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996) 
requires preparation of an initial regulatory flexibility analysis 
(IRFA) for any rule that by law must be proposed for public comment and 
a final regulatory flexibility analysis (FRFA) for any such rule that 
an agency adopts as a final rule, unless the agency certifies that the 
rule, if promulgated, will not have a significant economic impact on a 
substantial number of small entities. A

[[Page 35679]]

regulatory flexibility analysis examines the impact of the rule on 
small entities and considers alternative ways of reducing negative 
effects. Also, as required by Executive Order 13272, ``Proper 
Consideration of Small Entities in Agency Rulemaking,'' 67 FR 53461 
(August 16, 2002), DOE published procedures and policies on February 
19, 2003, to ensure that the potential impacts of its rules on small 
entities are properly considered during the DOE rulemaking process. 68 
FR 7990. DOE has made its procedures and policies available on the 
Office of the General Counsel's website at: https://www.energy.gov/gc/office-general-counsel.
    This proposed rule details generally applicable guidance that may 
guide, but not bind, the Department's rulemaking process. The proposed 
revisions are intended to improve DOE's ability to meet the obligations 
and deadlines outlined in EPCA by allowing DOE to tailor its rulemaking 
procedures to fit the specific facts and circumstances of a particular 
covered product or equipment, while not affecting the ability of any 
interested person, including small entities, to participate in DOE's 
rulemaking process. Because this proposed rule imposes no regulatory 
obligations on the public, including small entities, and does not 
affect the ability of any interested person, including small entities, 
to participate in DOE's rulemaking process, DOE certifies that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities, and, therefore, no initial 
regulatory flexibility analysis is required. Mid-Tex Elec. Cooperative, 
Inc. v. F.E.R.C., 773 F.2d 327 (D.C. Cir. 1985).

C. Review Under the Paperwork Reduction Act of 1995

    DOE is not amending its existing information collections through 
this proposed rule. Under existing provisions, manufacturers of covered 
products/equipment must certify to DOE that their products comply with 
any applicable energy conservation standards. In certifying compliance, 
manufacturers must test their products according to the DOE test 
procedures for such products/equipment, including any amendments 
adopted for those test procedures, on the date that compliance is 
required. DOE has established regulations for the certification and 
recordkeeping requirements for all covered consumer products and 
commercial equipment. 76 FR 12422 (March 7, 2011); 80 FR 5099 (Jan. 30, 
2015). The collection-of-information requirement for certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (PRA). This requirement has been approved by 
OMB under OMB control number 1910-1400. Public reporting burden for the 
certification is estimated to average 30 hours per response, including 
the time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.
    Specifically, this proposed rule, addressing clarifications to the 
Process Rule itself, does not contain any collection of information 
requirement that would trigger the PRA.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act (NEPA) and DOE's NEPA implementing 
regulations (10 CFR part 1021). DOE's regulations include a categorical 
exclusion for rulemakings interpreting or amending an existing rule or 
regulation that does not change the environmental effect of the rule or 
regulation being amended. 10 CFR part 1021, subpart D, appendix A5. 
DOE's regulations include a categorical exclusion for rulemakings that 
are strictly procedural. 10 CFR part 1021, subpart D, appendix A6. DOE 
anticipates that this rulemaking qualifies for categorical exclusion A5 
and A6 because it is amending a rule and because it is a procedural 
rulemaking, it does not change the environmental effect of the rule and 
otherwise meets the requirements for application of a categorical 
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review 
before issuing the final rule.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10, 
1999), imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has examined this 
proposed rule and has determined that it will not have a substantial 
direct effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. It will 
primarily affect the procedure by which DOE develops proposed rules to 
revise energy conservation standards and test procedures. EPCA governs 
and prescribes Federal preemption of State regulations that are the 
subject of DOE's regulations adopted pursuant to the statute. In such 
cases, States can petition DOE for exemption from such preemption to 
the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 
6297(d)) Therefore, Executive Order 13132 requires no further action.

F. Review Under Executive Order 12988

    Regarding the review of existing regulations and the promulgation 
of new regulations, section 3(a) of Executive Order 12988, ``Civil 
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal 
agencies the general duty to adhere to the following requirements: (1) 
Eliminate drafting errors and ambiguity; (2) write regulations to 
minimize litigation; (3) provide a clear legal standard for affected 
conduct rather than a general standard; and (4) promote simplification 
and burden reduction. Regarding the review required by section 3(a), 
section 3(b) of Executive Order 12988 specifically requires that each 
Executive agency make every reasonable effort to ensure that when it 
issues a regulation, the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) clearly specifies the retroactive effect, if any; (5) specifies 
whether administrative proceedings are to be required before parties 
may file suit in court and, if so, describes those proceedings and 
requires the exhaustion of administrative remedies; (6)

[[Page 35680]]

adequately defines key terms; and (7) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in sections 3(a) and 3(b) to determine whether they are met 
or it is unreasonable to meet one or more of them. DOE has completed 
the required review and has determined that, to the extent permitted by 
law, the proposed rule meets the relevant standards of Executive Order 
12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. (Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531)) 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. (62 FR 12820) (This policy is also available at https://www.energy.gov/gc/office-general-counsel under ``Guidance & Opinions'' 
(Rulemaking)) DOE examined the proposed rule according to UMRA and its 
statement of policy and has determined that the rule contains neither 
an intergovernmental mandate, nor a mandate that may result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any year. 
Accordingly, no further assessment or analysis is required under UMRA.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

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

I. Review Under Executive Order 12630

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

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

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

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that the regulatory action in this 
document, which makes clarifications to the Process Rule that guides 
the Department in proposing energy conservation standards is not a 
significant energy action because it would not have a significant 
adverse effect on the supply, distribution, or use of energy, nor has 
it been designated as a significant energy action by the Administrator 
of OIRA. Therefore, it is not a significant energy action, and, 
accordingly, DOE has not prepared a Statement of Energy Effects for 
this proposed rule.

L. Review Consistent With OMB's Information Quality Bulletin for Peer 
Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have or does have a clear and 
substantial impact on important public policies or private sector 
decisions.'' Id. at 70 FR 2667.
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report,'' dated February 2007, has been

[[Page 35681]]

disseminated and is available at the following website: www.energy.gov/eere/buildings/peer-review. Because available data, models, and 
technological understanding have changed since 2007, DOE has engaged 
with the National Academy of Sciences to review DOE's analytical 
methodologies to ascertain whether modifications are needed to improve 
the Department's analyses. The results from that review are expected 
later in 2021.

V. Public Participation

A. Participation in the Webinar

    The time and date of the webinar are listed in the DATES section at 
the beginning of this document. If no participants register for the 
webinar, it will be cancelled. Webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants will be published on DOE's website: 
https://www.energy.gov/eere/buildings/process-rule. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
proposed rulemaking, or who is representative of a group or class of 
persons that has an interest in these issues, may request an 
opportunity to make an oral presentation at the webinar. Such persons 
may submit requests to speak by email to the Appliance and Equipment 
Standards Program, <a href="/cdn-cgi/l/email-protection#6d2c1d1d01040c030e083e190c03090c1f091e3c18081e190402031e2d080843090208430a021b"><span class="__cf_email__" data-cfemail="501120203c39313e33350324313e34312234230125352324393f3e231035357e343f357e373f26">[email protected]</span></a>. Persons who 
wish to speak should include with their request a computer file in 
WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that 
briefly describes the nature of their interest in this rulemaking and 
the topics they wish to discuss. Such persons should also provide a 
daytime telephone number where they can be reached.
    Persons requesting to speak should briefly describe the nature of 
their interest in this rulemaking and provide a telephone number for 
contact. DOE requests persons selected to make an oral presentation to 
submit an advance copy of their statements at least two weeks before 
the webinar. At its discretion, DOE may permit persons who cannot 
supply an advance copy of their statement to participate, if those 
persons have made advance alternative arrangements with the Building 
Technologies Office. As necessary, requests to give an oral 
presentation should ask for such alternative arrangements.

C. Conduct of the Webinar

    DOE will designate a DOE official to preside at the webinar and may 
also use a professional facilitator to aid discussion. The meeting will 
not be a judicial or evidentiary-type public hearing, but DOE will 
conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A 
court reporter will be present to record the proceedings and prepare a 
transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the webinar. There shall not be discussion of proprietary information, 
costs or prices, market share, or other commercial matters regulated by 
U.S. anti-trust laws. After the webinar and until the end of the 
comment period, interested parties may submit further comments on the 
proceedings and any aspect of the rulemaking.
    The webinar will be conducted in an informal, conference style. DOE 
will present summaries of comments received before the webinar, allow 
time for prepared general statements by participants, and encourage all 
interested parties to share their views on issues affecting this 
rulemaking. Each participant will be allowed to make a general 
statement (within time limits determined by DOE), before the discussion 
of specific topics. DOE will permit, as time permits, other 
participants to comment briefly on any general statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the 
webinar will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the webinar.
    A transcript of the webinar will be included in the docket, which 
can be viewed as described in the Docket section at the beginning of 
this NOPR. In addition, any person may buy a copy of the transcript 
from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule no later than the date provided in the DATES section at 
the beginning of this proposed rule. Interested parties may submit 
comments using any of the methods described in the ADDRESSES section at 
the beginning of this document.
    Submitting comments via https://www.regulations.gov. The https://www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to https://www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
https://www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through https://www.regulations.gov 
before posting. Normally, comments will be posted within a few days of 
being submitted. However, if large volumes of comments are being 
processed simultaneously, your comment may not be viewable for up to 
several weeks. Please keep the comment tracking number that https://www.regulations.gov provides after you

[[Page 35682]]

have successfully uploaded your comment.
    Submitting comments via email. Comments and documents submitted via 
email also will be posted to https://www.regulations.gov. If you do not 
want your personal contact information to be publicly viewable, do not 
include it in your comment or any accompanying documents. Instead, 
provide your contact information in a cover letter. Include your first 
and last names, email address, telephone number, and optional mailing 
address. The cover letter will not be publicly viewable as long as it 
does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. No telefacsimiles (faxes) will 
be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, written in English, and free of any defects or 
viruses. Documents should not contain special characters or any form of 
encryption, and, if possible, they should carry the electronic 
signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: One copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

VI. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference, Intergovernmental relations, Small 
businesses, Test procedures.

Signing Authority

    This document of the Department of Energy was signed on June 29, 
2021, by Kelly Speakes-Backman, Principal Deputy Assistant Secretary 
and Acting Assistant Secretary for Energy Efficiency and Renewable 
Energy, pursuant to delegated authority from the Secretary of Energy. 
That document with the original signature and date is maintained by 
DOE. For administrative purposes only, and in compliance with 
requirements of the Office of the Federal Register, the undersigned DOE 
Federal Register Liaison Officer has been authorized to sign and submit 
the document in electronic format for publication, as an official 
document of the Department of Energy. This administrative process in no 
way alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on June 30, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons stated in the preamble, DOE proposes to amend part 
430 of title 10 of the Code of Federal Regulations as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Appendix A to subpart C of part 430 is revised to read as follows:

Appendix A to Subpart C of Part 430--Procedures, Interpretations, and 
Policies for Consideration of New or Revised Energy Conservation 
Standards and Test Procedures for Consumer Products and Certain 
Commercial/Industrial Equipment

1. Objectives
2. Scope
3. Application of the Process Rule
4. Setting Priorities for Rulemaking Activity
5. Coverage Determination Rulemakings
6. Process for Developing Energy Conservation Standards
7. Policies on Selection of Standards
8. Test Procedures
9. ASHRAE Equipment
10. Direct Final Rules
11. Principles for Distinguishing Between Effective and Compliance 
Dates
12. Principles for the Conduct of the Engineering Analysis
13. Principles for the Analysis of Impacts on Manufacturers
14. Principles for the Analysis of Impacts on Consumers
15. Consideration of Non-Regulatory Approaches
16. Cross-Cutting Analytical Assumptions
17. Emissions Analysis

1. Objectives

    This appendix establishes procedures, interpretations, and 
policies to guide the Department of Energy (``DOE'' or the 
``Department'') in the consideration and promulgation of new or 
revised appliance energy conservation standards and test procedures 
under the Energy Policy and Conservation Act (EPCA). This appendix 
applies to both covered consumer products and covered commercial/
industrial equipment. The Department's objectives in establishing 
these procedures include:
    (a) Provide for early input from stakeholders. The Department 
seeks to provide opportunities for public input early in the 
rulemaking process so that the initiation and direction of 
rulemakings is informed by comment from interested parties. DOE will 
be able to seek early input from interested parties in determining 
whether establishing new or amending existing energy conservation 
standards will result in significant savings of energy and is 
economically justified and technologically feasible. In the context 
of test procedure rulemakings, DOE will be able to seek early input 
from interested parties in determining whether--
    (1) Establishing a new or amending an existing test procedure 
will better measure the energy efficiency, energy use, water use (as 
specified in EPCA), or estimated annual operating cost of a covered 
product/equipment during a representative average use cycle or 
period of use (for consumer products); and
    (2) Will not be unduly burdensome to conduct.
    (b) Increase predictability of the rulemaking timetable. The 
Department seeks to make informed, strategic decisions about how to 
deploy its resources on the range of possible standards and test 
procedure development activities, and to announce these 
prioritization decisions so that all interested parties have a 
common expectation about the timing of different rulemaking 
activities. Further, DOE will offer the opportunity to provide input 
on the prioritization of rulemakings through a request for comment 
as DOE begins preparation of its Regulatory Agenda each spring.
    (c) Eliminate problematic design options early in the process. 
The Department seeks to eliminate from consideration, early in the 
process, any design options that present unacceptable problems with 
respect to manufacturability, consumer utility, or safety, so that 
the detailed analysis can focus

[[Page 35683]]

only on viable design options. DOE will be able to eliminate from 
consideration design options if it concludes that manufacture, 
installation or service of the design will be impractical, or that 
the design option will have a material adverse impact on the utility 
of the product, or if the design option will have a material adverse 
impact on safety or health. DOE will also be able to eliminate from 
consideration proprietary design options that represent a unique 
pathway to achieving a given efficiency level. This screening will 
be done at the outset of a rulemaking.
    (d) Fully consider non-regulatory approaches. The Department 
seeks to understand the effects of market forces and voluntary 
programs on encouraging the purchase of energy efficient products so 
that the incremental impacts of a new or revised standard can be 
accurately assessed and the Department can make informed decisions 
about where standards and voluntary programs can be used most 
effectively. DOE will continue to be able to support voluntary 
efforts by manufacturers, retailers, utilities, and others to 
increase product/equipment efficiency.
    (e) Conduct thorough analysis of impacts. In addition to 
understanding the aggregate social and private costs and benefits of 
standards, the Department seeks to understand the distribution of 
those costs and benefits among consumers, manufacturers, and others, 
as well as the uncertainty associated with these analyses of costs 
and benefits, so that any adverse impacts on subgroups and 
uncertainty concerning any adverse impacts can be fully considered 
in selecting a standard. DOE will be able to consider the 
variability of impacts on significant groups of manufacturers and 
consumers in addition to aggregate social and private costs and 
benefits, report the range of uncertainty associated with these 
impacts, and take into account cumulative impacts of regulation on 
manufacturers. The Department will also be able to conduct 
appropriate analyses to assess the impact that new or amended test 
procedures will have on manufacturers and consumers.
    (f) Use transparent and robust analytical methods. The 
Department seeks to use qualitative and quantitative analytical 
methods that are fully documented for the public and that produce 
results that can be explained and reproduced, so that the analytical 
underpinnings for policy decisions on standards are as sound and 
well-accepted as possible.
    (g) Support efforts to build consensus on standards. The 
Department seeks to encourage development of consensus proposals for 
new or revised standards because standards with such broad-based 
support are likely to balance effectively the various interests 
affected by such standards.

2. Scope

    The procedures, interpretations, and policies described in this 
appendix apply to rulemakings concerning new or revised Federal 
energy conservation standards and test procedures, and related rule 
documents (i.e., coverage determinations) for consumer products in 
Part A and commercial and industrial equipment under Part A-1 of the 
Energy Policy and Conservation Act (EPCA), as amended, except 
covered ASHRAE equipment in Part A-1 are governed separately under 
section 9 in this appendix.

3. Application of the Process Rule

    (a) This appendix contains procedures, interpretations, and 
policies that are generally applicable to the development of energy 
conservation standards and test procedures. The Department may, as 
necessary, deviate from this appendix to account for the specific 
circumstances of a particular rulemaking.
    (b) This appendix is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or 
in equity.

4. Setting Priorities for Rulemaking Activity

    (a) In establishing its priorities for undertaking energy 
conservation standards and test procedure rulemakings, DOE will 
consider the following factors, consistent with applicable legal 
obligations:
    (1) Potential energy savings;
    (2) Potential social and private, including environmental or 
energy security, benefits;
    (3) Applicable deadlines for rulemakings;
    (4) Incremental DOE resources required to complete the 
rulemaking process;
    (5) Other relevant regulatory actions affecting the products/
equipment;
    (6) Stakeholder recommendations;
    (7) Evidence of energy efficiency gains in the market absent new 
or revised standards;
    (8) Status of required changes to test procedures; and
    (9) Other relevant factors.
    (b) DOE will offer the opportunity to provide input on 
prioritization of rulemakings through a request for comment as DOE 
begins preparation of its Regulatory Agenda each spring.

5. Coverage Determination Rulemakings

    DOE has discretion to conduct proceedings to determine whether 
additional consumer products and commercial/industrial equipment 
should be covered under EPCA if certain statutory criteria are met. 
(42 U.S.C. 6292(b) and 42 U.S.C. 6295(l) for consumer products; 42 
U.S.C. 6312(b) for commercial/industrial equipment) This section 
describes the process to be used in establishing coverage for 
consumer products and commercial/industrial equipment.
    (a) Pre-Notice of Proposed Rulemaking (``NOPR'') Stage. In 
determining whether to consider establishing coverage for a consumer 
product or commercial/industrial equipment, DOE may publish one or 
more preliminary documents in the Federal Register intended to 
gather information on key issues. Such document(s) will be published 
in the Federal Register, with accompanying documents referenced and 
posted in the appropriate docket.
    (b) NOPR Stage. If DOE determines to proceed with a coverage 
determination process, the Department will publish a notice of 
proposed determination, providing an opportunity for public comment 
of not less than 60 days, in which DOE will explain how such 
products/equipment that it seeks to designate as ``covered'' meet 
the statutory criteria for coverage and why such coverage is 
``necessary or appropriate'' to carry out the purposes of EPCA. In 
the case of commercial equipment, DOE will follow the same process, 
except that the Department must demonstrate that coverage of the 
equipment type is ``necessary'' to carry out the purposes of EPCA.
    (c) Final Rule. DOE will publish a Final Rule in the Federal 
Register that establishes the scope of coverage for the product/
equipment, responds to public comments received on the NOPR, and 
explains how inclusion of the newly covered product/equipment meets 
the statutory criteria for coverage and why such coverage is 
necessary or appropriate to carry out the purposes of EPCA. DOE will 
finalize coverage for a product/equipment prior to publication of a 
proposed rule to establish a test procedure.
    (d) Scope of Coverage Revisions. If, during the substantive 
rulemaking proceedings to establish test procedures or energy 
conservation standards after completing a coverage determination, 
DOE finds it necessary and appropriate to amend the scope of 
coverage, DOE will propose an amended coverage determination and 
finalize coverage prior to moving forward with the test procedure or 
standards rulemaking.

6. Process for Developing Energy Conservation Standards

    This section describes the process to be used in developing 
energy conservation standards for covered products and equipment 
other than those covered equipment subject to ASHRAE/IES Standard 
90.1.
    (a) Pre-NOPR Stage. (1) General. In determining whether to 
consider establishing or amending any energy conservation standard, 
DOE will publish one or more preliminary documents in the Federal 
Register intended to gather information on key issues. Such 
document(s) could take several forms depending upon the specific 
proceeding, including a framework document, request for information 
(RFI), notice of data availability (NODA), preliminary analysis, or 
advance notice of proposed rulemaking (ANOPR). Such document(s) will 
be published in the Federal Register, with any accompanying 
documents referenced and posted in the appropriate docket.
    (2) Satisfaction of Statutory Criteria. As part of such pre-
NOPR-stage document(s), DOE will solicit submission of comments, 
data, and information on whether DOE should proceed with the 
rulemaking, including whether any new or amended rule would satisfy 
the relevant statutory criteria to be cost-effective, economically 
justified, technologically feasible, and result in a significant 
savings of energy. Based on the information received in response to 
such request and its own analysis, DOE will determine whether to 
proceed with a rulemaking for a new or amended energy conservation 
standard. If DOE determines at any point in the pre-NOPR stage that 
no candidate standard level for a new or amended standard is likely 
to satisfy all of the applicable statutory criteria (i.e., to be 
technologically feasible and economically

[[Page 35684]]

justified and result in significant energy savings), DOE will 
announce that conclusion in the Federal Register and proceed with 
notice-and-comment rulemaking that proposes a determination not to 
adopt new or amended standards. DOE notes that it will, consistent 
with its statutory obligations, consider both cost effectiveness and 
economic justification when issuing a determination not to amend a 
standard. If DOE receives sufficient information suggesting it could 
justify a new or amended standard or the information received is 
inconclusive with regard to the statutory criteria, DOE will move 
forward with the rulemaking to issue or amend an energy conservation 
standard. In those instances where the available information either 
suggested that a new or amended energy conservation standard might 
be justified or in which the information was inconclusive on this 
point, and DOE undertakes a rulemaking to establish or amend an 
energy conservation standard, DOE may still ultimately determine 
that such a standard is not economically justified, technologically 
feasible or would not result in a significant savings of energy at a 
later stage of the rulemaking.
    (3) Design options. (i) General. Once the Department has 
initiated a rulemaking for a specific product/equipment but before 
publishing a proposed rule to establish or amend standards, DOE will 
typically identify the product/equipment categories and design 
options to be analyzed in detail, as well as those design options to 
be eliminated from further consideration. During the pre-NOPR stage 
of the rulemaking, interested parties may be consulted to provide 
information on key issues, including potential design options, 
through a variety of rulemaking documents.
    (ii) Identification and screening of design options. During the 
pre-NOPR phase of the rulemaking process, the Department will 
typically develop a list of design options for consideration. 
Initially, the candidate design options will encompass all those 
technologies considered to be technologically feasible. Following 
the development of this initial list of design options, DOE will 
review each design option based on the factors described in 
paragraph (a)(3)(iii) of this section and the policies stated in 
section 7 of this Appendix (i.e., Policies on Selection of 
Standards). The reasons for eliminating or retaining any design 
option at this stage of the process will be fully documented and 
published as part of the NOPR and as appropriate for a given rule, 
in the pre-NOPR document(s). The technologically feasible design 
options that are not eliminated in this screening analysis will be 
considered further in the Engineering Analysis described in 
paragraph (a)(4) of this section.
    (iii) Factors for screening of design options. The factors for 
screening design options include:
    (A) Technological feasibility. Technologies incorporated in 
commercial products (or equipment) or in working prototypes will be 
considered technologically feasible.
    (B) Practicability to manufacture, install and service. If mass 
production of a technology under consideration for use in 
commercially-available products (or equipment) and reliable 
installation and servicing of the technology could be achieved on 
the scale necessary to serve the relevant market at the time of the 
effective date of the standard, then that technology will be 
considered practicable to manufacture, install, and service.
    (C) Adverse Impacts on Product Utility or Product Availability.
    (D) Adverse Impacts on Health or Safety.
    (E) Unique-Pathway Proprietary Technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further.
    (4) Engineering analysis of design options and selection of 
candidate standard levels. After design options are identified and 
screened, DOE will perform the engineering analysis and the benefit/
cost analysis and select the candidate standard levels based on 
these analyses. The results of the analyses will be published in a 
Technical Support Document (TSD) to accompany the appropriate 
rulemaking documents.
    (i) Identification of engineering analytical methods and tools. 
DOE will select the specific engineering analysis tools (or multiple 
tools, if necessary, to address uncertainty) to be used in the 
analysis of the design options identified as a result of the 
screening analysis.
    (ii) Engineering and life-cycle cost analysis of design options. 
DOE and its contractors will perform engineering and life-cycle cost 
analyses of the design options.
    (iii) Review by stakeholders. Interested parties will have the 
opportunity to review the results of the engineering and life-cycle 
cost analyses. If appropriate, a public workshop will be conducted 
to review these results. The analyses will be revised as appropriate 
on the basis of this input.
    (iv) New information relating to the factors used for screening 
design options. If further information or analysis leads to a 
determination that a design option, or a combination of design 
options, has unacceptable impacts, that design option or combination 
of design options will not be included in a candidate standard 
level.
    (v) Selection of candidate standard levels. Based on the results 
of the engineering and life-cycle cost analysis of design options 
and the policies stated in paragraph (a)(3)(iii) of this section, 
DOE will select the candidate standard levels for further analysis.
    (5) Analysis of impacts and selection of proposed standard 
level. If DOE has determined preliminarily that a candidate standard 
level is likely to produce the maximum improvement in energy 
efficiency that is both technologically feasible and economically 
justified and constitutes significant energy savings, economic 
analyses of the impacts of the candidate standard levels will be 
conducted. The Department will propose new or amended standards in a 
subsequent NOPR based on the results of the impact analysis.
    (i) Identification of issues for analysis. The Department, in 
consideration of comments received, will identify issues that will 
be examined in the impacts analysis.
    (ii) Identification of analytical methods and tools. DOE will 
select the specific economic analysis tools (or multiple tools, if 
necessary, to address uncertainty) to be used in the analysis of the 
candidate standard levels.
    (iii) Analysis of impacts. DOE will conduct the analysis of the 
impacts of candidate standard levels.
    (iv) Factors to be considered in selecting a proposed standard. 
The factors to be considered in selection of a proposed standard 
include:
    (A) Impacts on manufacturers. The analysis of manufacturer 
impacts will include: Estimated impacts on cash flow; assessment of 
impacts on manufacturers of specific categories of products/
equipment and small manufacturers; assessment of impacts on 
manufacturers of multiple product-specific Federal regulatory 
requirements, including efficiency standards for other products and 
regulations of other agencies; and impacts on manufacturing 
capacity, employment, and capital investment.
    (B) Private impacts on consumers. The analysis of consumer 
impacts will include: Estimated private energy savings impacts on 
consumers based on regional average energy prices and energy usage; 
assessments of the variability of impacts on subgroups of consumers 
based on major regional differences in usage or energy prices and 
significant variations in installation costs or performance; 
consideration of changes to product utility, changes to purchase 
rate and/or costs of products, and other impacts of likely concern 
to all or some consumers, based to the extent practicable on direct 
input from consumers; estimated life-cycle cost with sensitivity 
analysis; and consideration of the increased first cost to consumers 
and the time required for energy cost savings to pay back these 
first costs.
    (C) Impacts on competition, including industry concentration 
analysis.
    (D) Impacts on utilities. The analysis of utility impacts will 
include estimated marginal impacts on electric and gas utility 
generation and capacity.
    (E) National energy, economic, and employment impacts. The 
analysis of national energy, economic, and employment impacts will 
include: Estimated energy savings by fuel type; estimated net 
present value of benefits to all consumers; sensitivity analyses 
using high and low discount rates reflecting both private 
transactions and social discount rates and high and low energy price 
forecasts; and estimates of the direct and indirect impacts on 
employment by appliance manufacturers, relevant service industries, 
energy suppliers, suppliers of complementary and substitution 
products, and the economy in general.
    (F) Impacts on the environment. The analysis of environmental 
impacts will include estimated impacts on emissions of carbon and 
relevant criteria pollutants.
    (G) Impacts of non-regulatory approaches. The analysis of energy 
savings and consumer impacts will incorporate an assessment of the 
impacts of market forces and existing voluntary programs in 
promoting product/equipment efficiency, usage, and related 
characteristics in the absence of updated efficiency standards.
    (H) New information relating to the factors used for screening 
design options.

[[Page 35685]]

    (6) Public comment and hearing. The length of the public comment 
period for pre-NOPR rulemaking documents will be determined on a 
case-by-case basis and may vary depending upon the circumstances of 
the particular rulemaking. For pre-NOPR documents, DOE will 
determine whether a public hearing is appropriate.
    (7) Revisions based on comments. Based on consideration of the 
comments received, any necessary changes to the engineering 
analysis, life-cycle cost analysis, or the candidate standard levels 
will be made.
    (b) NOPR Stage. (1) Documentation of decisions on proposed 
standard selection. The Department will publish a NOPR in the 
Federal Register that proposes standard levels and explains the 
basis for the selection of those proposed levels, and DOE will post 
on its website a draft TSD documenting the analysis of impacts. The 
draft TSD will also be posted in the appropriate docket at https://www.regulations.gov. As required by 42 U.S.C. 6295(p)(1) of EPCA, 
the NOPR also will describe the maximum improvement in energy 
efficiency or maximum reduction in energy use that is 
technologically feasible and, if the proposed standards would not 
achieve these levels, the reasons for proposing different standards.
    (2) Public comment and hearing. There will be not less than 60 
days for public comment on the NOPR, with at least one public 
hearing or workshop. (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6306)
    (3) Revisions to impact analyses and selection of final 
standard. Based on the public comments received, DOE will review the 
proposed standard and impact analyses, and make modifications as 
necessary. If major changes to the analyses are required at this 
stage, DOE will publish a Supplemental Notice of Proposed Rulemaking 
(SNOPR), when required. DOE may also publish a NODA or RFI, where 
appropriate.
    (c) Final Rule Stage. The Department will publish a Final Rule 
in the Federal Register that promulgates standard levels, responds 
to public comments received on the NOPR (and SNOPR if applicable), 
and explains how the selection of those standards meets the 
statutory requirement that any new or amended energy conservation 
standard produces the maximum improvement in energy efficiency that 
is both technologically feasible and economically justified and 
constitutes significant energy savings, accompanied by a final TSD.

7. Policies on Selection of Standards

    (a) Purpose. (1) Section 6 describes the process that will be 
used to consider new or revised energy efficiency standards and 
lists a number of factors and analyses that will be considered at 
specified points in the process. Department policies concerning the 
selection of new or revised standards, and decisions preliminary 
thereto, are described in this section. These policies are intended 
to elaborate on the statutory criteria provided in 42 U.S.C. 6295.
    (2) The procedures described in this section are intended to 
assist the Department in making the determinations required by EPCA 
and do not preclude DOE's consideration of any other information 
consistent with the relevant statutory criteria. The Department will 
consider pertinent information in determining whether a new or 
revised standard is consistent with the statutory criteria.
    (b) Screening design options. These factors will be considered 
as follows in determining whether a design option will receive any 
further consideration:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, 
existing prototypes will not be considered further.
    (2) Practicability to manufacture, install and service. If it is 
determined that mass production of a technology in commercial 
products and reliable installation and servicing of the technology 
could not be achieved on the scale necessary to serve the relevant 
market at the time of the compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have significant adverse impact on the utility of the product/
equipment to subgroups of consumers, or result in the unavailability 
of any covered product type with performance characteristics 
(including reliability), features, sizes, capacities, and volumes 
that are substantially the same as products generally available in 
the U.S. at the time, it will not be considered further.
    (4) Safety of technologies. If it is determined that a 
technology will have significant adverse impacts on health or 
safety, it will not be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving 
a given efficiency level, it will not be considered further, due to 
the potential for monopolistic concerns.
    (c) Identification of candidate standard levels. Based on the 
results of the engineering and cost/benefit analyses of design 
options, DOE will identify the candidate standard levels for further 
analysis. Candidate standard levels will be selected as follows:
    (1) Costs and savings of design options. Design options that 
have payback periods that exceed the median life of the product or 
which result in life-cycle cost increases relative to the base case, 
using typical fuel costs, usage, and private discount rates, will 
not be used as the basis for candidate standard levels.
    (2) Further information on factors used for screening design 
options. If further information or analysis leads to a determination 
that a design option, or a combination of design options, has 
unacceptable impacts under the policies stated in this Appendix, 
that design option or combination of design options will not be 
included in a candidate standard level.
    (3) Selection of candidate standard levels. Candidate standard 
levels, which will be identified in the pre-NOPR documents and on 
which impact analyses will be conducted, will be based on the 
remaining design options.
    (i) The range of candidate standard levels will typically 
include:
    (A) The most energy-efficient combination of design options;
    (B) The combination of design options with the lowest life-cycle 
cost; and
    (C) A combination of design options with a payback period of not 
more than three years.
    (ii) Candidate standard levels that incorporate noteworthy 
technologies or fill in large gaps between efficiency levels of 
other candidate standard levels also may be selected.
    (d) Pre-NOPR Stage. New information provided in public comments 
on any pre-NOPR documents will be considered to determine whether 
any changes to the candidate standard levels are needed before 
proceeding to the analysis of impacts.
    (e)(1) Selection of proposed standard. Based on the results of 
the analysis of impacts, DOE will select a standard level to be 
proposed for public comment in the NOPR. As required under 42 U.S.C. 
6295(o)(2)(A), any new or revised standard must be designed to 
achieve the maximum improvement in energy efficiency that is 
determined to be both technologically feasible and economically 
justified.
    (2) Statutory policies. The fundamental policies concerning the 
selection of standards include:
    (i) A trial standard level will not be proposed or promulgated 
if the Department determines that it is not both technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 42 
U.S.C. 6295(o)(3)(B)) For a trial standard level to be economically 
justified, the Secretary must determine that the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the factors listed in 42 U.S.C. 6295(o)(2)(B)(i). A 
standard level is subject to a rebuttable presumption that it is 
economically justified if the payback period is three years or less. 
(42 U.S.C. 6295(o)(2)(B)(iii))
    (ii) If the Department determines that interested persons have 
established by a preponderance of the evidence that a standard level 
is likely to result in the unavailability in the United States of 
any covered product/equipment type (or class) with performance 
characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the U.S. at the time of the determination, 
then that standard level will not be proposed. (42 U.S.C. 
6295(o)(4))
    (iii) If the Department determines that a standard level would 
not result in significant conservation of energy, that standard 
level will not be proposed. (42 U.S.C. 6295(o)(3)(B))
    (f) Selection of a final standard. New information provided in 
the public comments on the NOPR and any analysis by the Department 
of Justice concerning impacts on competition of the proposed 
standard will be considered to determine whether issuance of a new 
or amended energy conservation standard produces the maximum 
improvement in energy efficiency that is both technologically 
feasible and economically justified and still constitutes 
significant energy savings or whether any change to the proposed 
standard level is needed before proceeding to the final rule. The 
same

[[Page 35686]]

policies used to select the proposed standard level, as described in 
this section, will be used to guide the selection of the final 
standard level or a determination that no new or amended standard is 
justified.

8. Test Procedures

    (a) Pre-NOPR Stage. (1) General. In determining whether to 
consider establishing or amending any test procedure, DOE will 
publish one or more preliminary documents in the Federal Register 
(e.g., an RFI or NODA) intended to gather information on key issues.
    (2) Satisfaction of Statutory Criteria. As part of such 
document(s), DOE will solicit submission of comments, data, and 
information on whether DOE should proceed with the rulemaking, 
including whether: A new test procedure would satisfy the relevant 
statutory criteria that test procedures be reasonably designed to 
produce test results which measure energy efficiency, energy use, 
water use (in the case of showerheads, faucets, water closets and 
urinals), or estimated annual operating cost of a covered product 
during a representative average use cycle or period of use, as 
determined by the Secretary, and shall not be unduly burdensome to 
conduct; or an amended test procedure would more fully or accurately 
comply with the aforementioned statutory criteria. Based on the 
information received in response to such request and its own 
analysis, DOE will determine whether to proceed with a rulemaking 
for a new or amended test procedure.
    (3) If DOE determines that a new or amended test procedure would 
not satisfy the applicable statutory criteria, DOE will engage in 
notice-and-comment rulemaking to issue a determination that a new or 
amended test procedure is not warranted.
    (4) If DOE receives sufficient information suggesting a new or 
amended test procedure may satisfy the applicable statutory criteria 
or the information received is inconclusive with regard to the 
statutory criteria, DOE will move forward with the rulemaking to 
issue or amend a test procedure.
    (5) In those instances where the available information either 
suggested that a new or amended test procedure might be warranted or 
in which the information was inconclusive on this point, and DOE 
undertakes a rulemaking to establish or amend a test procedure, DOE 
may still ultimately determine that such a test procedure does not 
satisfy the applicable statutory criteria at a later stage of the 
rulemaking.
    (6) Public comment and hearing. The length of the public comment 
period for pre-NOPR rulemaking documents will be determined on a 
case-by-case basis and may vary depending upon the circumstances of 
the particular rulemaking. For pre-NOPR documents, DOE will 
determine whether a public hearing is appropriate.
    (b) NOPR Stage. (1) Documentation of decisions on proposed test 
procedure. The Department will publish a NOPR in the Federal 
Register that proposes a new or amended test procedure and explains 
how the test procedure satisfies the applicable statutory criteria.
    (2) Public comment and hearing. There will be not less than 60 
days for public comment on the NOPR, with at least one public 
hearing or workshop. (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6306)
    (3) Revisions to the analyses and establishment of a final test 
procedure. Based on the public comments received, DOE will review 
the proposed test procedure, and make modifications as necessary. As 
part of this process, DOE may issue an RFI, NODA, SNOPR, or other 
rulemaking document, as appropriate.
    (c) Final Rule Stage. The Department will publish a Final Rule 
in the Federal Register that establishes or amends a test procedure, 
responds to public comments received on the NOPR (and any subsequent 
rulemaking documents), and explains how the new or amended test 
procedure meets the applicable statutory requirements.
    (d) Adoption of Industry Test Methods. DOE will adopt industry 
test procedure standards as DOE test procedures for covered products 
and equipment, but only if DOE determines that such procedures would 
not be unduly burdensome to conduct and would produce test results 
that reflect the energy efficiency, energy use, water use (as 
specified in EPCA) or estimated operating costs of that equipment 
during a representative average use cycle. DOE may also adopt 
industry test procedure standards with modifications or craft its 
own procedures as necessary to ensure compatibility with the 
relevant statutory requirements, as well as DOE's compliance, 
certification, and enforcement requirements.
    (e) Issuing final test procedure modification. Test procedure 
rulemakings establishing methodologies used to evaluate proposed 
energy conservation standards will be finalized prior to publication 
of a NOPR proposing new or amended energy conservation standards.
    (f) Effective Date of Test Procedures. If required only for the 
evaluation and issuance of updated efficiency standards, use of the 
modified test procedures typically will not be required until the 
implementation date of updated standards.

9. ASHRAE Equipment

    EPCA provides unique statutory requirements and a specific set 
of timelines for certain enumerated types of commercial and 
industrial equipment (generally, commercial water heaters, 
commercial packaged boilers, commercial air-conditioning and heating 
equipment, and packaged terminal air conditioners and heat pumps 
(i.e., ``ASHRAE equipment'')).
    (a) ASHRAE Trigger Rulemakings for Energy Conservation 
Standards. Pursuant to EPCA's statutory scheme for covered ASHRAE 
equipment, DOE is required to consider amending the existing Federal 
energy conservation standards for ASHRAE equipment when ASHRAE 
Standard 90.1 is amended with respect to standards or design 
requirements applicable to such equipment.
    (1) Not later than 180 days after the amendment of ASHRAE 
Standard 90.1, DOE will publish in the Federal Register for public 
comment an analysis of the energy savings potential of amended 
energy efficiency standards for the affected equipment.
    (2) Not later than 18 months after the amendment of ASHRAE 
Standard 90.1, DOE must adopt amended energy conservation standards 
at the new efficiency level in ASHRAE Standard 90.1 as the uniform 
national standard for the affected equipment, unless DOE determines 
by rule, and supported by clear and convincing evidence, that a 
more-stringent standard would result in significant additional 
conservation of energy and is technologically feasible and 
economically justified. In such case, DOE must adopt the more-
stringent standard for the affected equipment not later than 30 
months after amendment of ASHRAE Standard 90.1.
    (3) Regarding amendments to ASHRAE Standard 90.1 involving 
energy conservation standards, DOE considers an amendment of a 
standard level to occur when an updated version of ASHRAE Standard 
90.1 publishes (i.e., not at the time that an addendum to ASHRAE 
Standard 90.1 is released or approved). In addition, DOE considers 
an amendment of standard levels in ASHRAE Standard 90.1 to be only 
those changes resulting in an increase in stringency of standard 
levels relative to the current Federal standards or the adoption of 
a design requirement.
    (b) ASHRAE Trigger Rulemakings for Test Procedures. Pursuant to 
EPCA's statutory scheme for covered ASHRAE equipment, DOE is 
required to consider amending the existing Federal test procedures 
for such equipment when ASHRAE Standard 90.1 is amended with respect 
to test procedures applicable to such equipment.
    (1) DOE shall amend the test procedure for ASHRAE equipment, as 
necessary, to be consistent with the amended ASHRAE Standard 90.1, 
unless DOE determines by rule, and supported by clear and convincing 
evidence, that to do so would not meet the requirements in 42 U.S.C. 
6314(a)(2)-(3), which generally provide that the test procedure must 
produce results which reflect energy efficiency, energy use, and 
estimated operating costs during a representative average use cycle 
and not be unduly burdensome to conduct. If DOE makes such a 
determination, DOE may establish an amended test procedure for such 
equipment that meets the requirements in 42 U.S.C. 6314(a)(2)-(3).
    (2) With regard to test procedures for ASHRAE equipment, EPCA 
requires DOE to adopt test procedures consistent with applicable 
industry test standards. DOE notes that the statutory language 
``consistent with'' provides some flexibility in adopting the 
amended industry test procedure. As EPCA does not require DOE to 
adopt a test procedure identical to the applicable industry test 
standard, DOE may make modifications that are consistent with the 
applicable industry test standard. Further, DOE is not required to 
adopt or align with sections of the industry test standard that are 
not necessary for the method of test for metrics included in the DOE 
test procedure (e.g., sections of the industry test procedure 
regarding selection of models for testing under an industry 
certification program, verification of represented values and the 
associated tolerances, and operational

[[Page 35687]]

requirements need not be adopted or aligned with by DOE).
    (c) ASHRAE Lookback Rulemakings. EPCA also requires that DOE 
periodically consider amending energy conservation standards and 
test procedures for ASHRAE equipment.
    (1) EPCA requirements for ASHRAE equipment outside of the ASHRAE 
Standard 90.1 process include:
    (i) Energy Conservation Standards. Every 6 years, DOE shall 
conduct an evaluation of each class of covered equipment. DOE shall 
publish either a notice of determination that standards do not need 
to be amended (because they would not result in significant 
additional conservation of energy and/or would not be 
technologically feasible and/or economically justified) or a notice 
of proposed rulemaking including new proposed standards (based on 
the criteria and procedures in 42 U.S.C. 6313(a)(6)(B) and supported 
by clear and convincing evidence).
    (A) If DOE issues a notice of proposed rulemaking, it shall 
publish a final rule no more than 2 years later.
    (B) If DOE determines that a standard does not need to be 
amended, not later than 3 years after such a determination, DOE must 
publish either a notice of determination that standards do not need 
to be amended (because they would not result in significant 
additional conservation of energy and/or would not be 
technologically feasible and/or economically justified) or a notice 
of proposed rulemaking including new proposed standards (based on 
the criteria and procedures in in 42 U.S.C. 6313(a)(6)(B) and 
supported by clear and convincing evidence).
    (ii) Test Procedures. At least once every 7 years, DOE shall 
conduct an evaluation, and if DOE determines, supported by clear and 
convincing evidence, that amended test procedures would more 
accurately or fully comply with the requirements in 42 U.S.C. 
6314(a)(2)-(3), it shall prescribe test procedures for the 
applicable equipment. DOE notes that EPCA requires test procedures 
that are ``consistent with'' industry test procedures. As noted in 
paragraph (b)(2) of this section, this affords DOE some flexibility 
in making modifications to the DOE test procedure that are 
consistent with the industry test procedure. Otherwise, DOE shall 
publish a notice of determination not to amend a test procedure.
    (2) DOE's 6-year-lookback and 7-year-lookback review 
requirements, as detailed in this section, are regulatory 
obligations specific to DOE and not satisfied by any ASHRAE action. 
Specifically, ASHRAE reviewing and reaffirming (but not amending) a 
standard or test procedure does not eliminate DOE's separate 
requirement to review each class of covered equipment.

10. Direct Final Rules

    In accordance with 42 U.S.C. 6295(p)(4), on receipt of a joint 
proposal that is submitted by interested persons that are fairly 
representative of relevant points of view, DOE may issue a direct 
final rule (DFR) establishing energy conservation standards for a 
covered product or equipment if DOE determines the recommended 
standard is in accordance with 42 U.S.C. 6295(o) or 42 U.S.C. 
6313(a)(6)(B) as applicable. To be ``fairly representative of 
relevant points of view'' the group submitting a joint statement 
must, where appropriate, include larger concerns and small 
businesses in the regulated industry/manufacturer community, energy 
advocates, energy utilities, consumers, and States. However, it will 
be necessary to evaluate the meaning of ``fairly representative'' on 
a case-by-case basis, subject to the circumstances of a particular 
rulemaking, to determine whether fewer or additional parties must be 
part of a joint statement in order to be ``fairly representative of 
relevant points of view.''

11. Principles for Distinguishing Between Effective and Compliance 
Dates

    (a) Dates, generally. The effective and compliance dates for 
either DOE test procedures or DOE energy conservation standards are 
typically not identical, and these terms should not be used 
interchangeably.
    (b) Effective date. The effective date is the date a rule is 
legally operative after being published in the Federal Register.
    (c) Compliance date. (1) For test procedures, the compliance 
date is the specific date when manufacturers are required to use the 
new or amended test procedure requirements to make representations 
concerning the energy efficiency or use of a product, including 
certification that the covered product/equipment meets an applicable 
energy conservation standard.
    (2) For energy conservation standards, the compliance date is 
the specific date upon which manufacturers are required to meet the 
new or amended standards for applicable covered products/equipment 
that are distributed in interstate commerce.

12. Principles for the Conduct of the Engineering Analysis

    (a) The purpose of the engineering analysis is to develop the 
relationship between efficiency and cost of the subject product/
equipment. Another important role of the engineering analysis is to 
identify the maximum technologically feasible level. The maximum 
technologically feasible level is one that can be reached through 
efficiency improvements and/or design options, both commercially 
feasible and in working prototypes. The Department will consider two 
elements in the engineering analysis: The selection of efficiency 
levels to analyze, as discussed in paragraph (b) of this section; 
and the determination of product cost at each efficiency level, as 
discussed in paragraph (c) of this section. From the efficiency/cost 
relationship developed in the engineering analysis, measures such as 
payback, life-cycle cost, and energy savings can be developed. The 
Department will identify issues that will be examined in the 
engineering analysis and the types of specialized expertise that may 
be required. DOE will select appropriate contractors, 
subcontractors, and expert consultants, as necessary, to perform the 
engineering analysis. DOE will minimize uncertainties by using 
measures such as test data or component or material supplier 
information where available. Also, the Department will consider 
data, information, and analyses received from interested parties for 
use in the analysis wherever feasible.
    (b) The Department will typically use one of two approaches to 
develop energy efficiency levels for the engineering analysis: 
Relying on observed efficiency levels in the market (i.e., the 
efficiency-level approach); or determining the incremental 
efficiency improvements associated with incorporating specific 
design options to a baseline model (i.e., the design-option 
approach). The Department will consider the availability of data and 
analytical tools, the resource needs, and public comments when 
determining the best approach or combination of approaches for an 
engineering analysis.
    (1) Using the efficiency-level approach, the efficiency levels 
established for the analysis will be determined based on the market 
distribution of existing products. This approach typically entails 
compiling a comprehensive list of products available on the market, 
such as from DOE's product certification database and conducting DOE 
energy performance tests to validate the certified ratings.
    (2) Using the design option approach, the efficiency levels 
established for the analysis will be determined through detailed 
engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options 
that have been identified in the technology assessment and screening 
analysis. The design option approach will typically be used when a 
comprehensive database of certified models is unavailable. In 
certain rulemakings, the efficiency-level approach (based on actual 
products on the market) will be extended using the design option 
approach to interpolate to define ``gap fill'' levels (to bridge 
large gaps between other identified efficiency levels) and/or to 
extrapolate to the ``max-tech'' level (the level that DOE determines 
is the maximum achievable efficiency level, particularly in cases 
where the ``max-tech'' level exceeds the maximum efficiency level 
currently available on the market). The Department will identify, 
modify, or develop any engineering models necessary to predict the 
efficiency impact of any one or combination of design options on the 
product/equipment as measured by the applicable DOE test procedure.
    (3) The cost-efficiency curve and a detailed description of any 
engineering models will be available to stakeholders during the pre-
NOPR stage of the rulemaking.
    (c) The Department will typically conduct the cost analysis 
using one or a combination of approaches depending on a suite of 
factors, including the availability and reliability of public 
information, characteristics of the subject product/equipment, and 
the availability and timeliness of purchasing the product/equipment 
on the market. The cost approaches are summarized as follows:
    (1) Physical teardowns: Under this approach, the Department will 
physically dismantle a commercially-available product/equipment 
model, component-by-component, to develop a detailed bill of 
materials for the model. The core function of

[[Page 35688]]

physical teardowns is to support the costing analysis; however, it 
serves other purposes as well. The teardown process provides 
information on the range of design options used to improve energy 
efficiency and informs the technology assessment. Performance 
testing and teardowns are used to define the baseline, against which 
incremental energy savings and incremental costs are compared. 
Teardowns are also used to identify technology options for 
consideration in the screening analysis and design paths for the 
Engineering Analysis.
    (2) Catalog teardowns: The Department will often complement 
physical teardowns with catalogue (a.k.a., ``virtual'') teardowns, 
thereby allowing the analysis to capture a broader range of 
capacities and other features within a product family. In lieu of 
physically deconstructing the product/equipment, the Department will 
identify each component using parts diagrams (available from 
manufacturer websites or appliance repair websites, for example) to 
develop the bill of materials for the product/equipment. An analysis 
comprised of only virtual teardowns is also possible for product 
categories where features are well-documented.
    (3) Price surveys: If neither a physical nor catalog teardown is 
feasible, or if they would be cost-prohibitive or otherwise 
impractical, the Department will conduct price surveys using 
publicly-available pricing data published on major online retailer 
websites and/or by soliciting prices from distributors and other 
commercial channels.

13. Principles for the Analysis of Impacts on Manufacturers

    (a) Purpose. The purpose of the manufacturer impact analysis 
(MIA) is to identify and quantify the impacts of any new or amended 
energy conservation standards on manufacturers. The MIA will have 
both quantitative and qualitative aspects, and it will include the 
analyses of projected industry cash flows, the industry net present 
value, conversion costs, and direct employment. Additionally, the 
MIA will seek to describe how new or amended energy conservation 
standards might affect manufacturing capacity and competition, as 
well as how standards contribute to overall regulatory burden. 
Finally, the MIA will seek to identify any disproportionate impacts 
on manufacturer subgroups, including small business manufacturers. 
The Department will analyze the impact of standards on manufacturers 
with substantial input from manufacturers and other interested 
parties. This section describes the principles that will be used in 
conducting future manufacturing impact analyses.
    (b) Issue identification. Prior to publishing a NOPR, the 
Department will identify issues that will require greater 
consideration in the detailed manufacturer impact analysis. Possible 
issues may include identification of specific types or subgroups of 
manufacturers and concerns over access to technology. Specialized 
contractor expertise and empirical data requirements, and analytic 
tools required to perform the manufacturer impact analysis also 
would be identified at this stage.
    (c) Industry characterization. Prior to publishing a NOPR, the 
Department will prepare an industry profile based on the market and 
technology assessment and other publicly available information. DOE 
will use public sources of information (e.g., company financial 
reports) to derive preliminary financial inputs for the industry 
cash flow analysis. DOE will describe the present and past industry 
structure and market characteristics.
    (d) Interview Process. DOE will seek to conduct structured, 
detailed interviews with manufacturers. During these interviews, DOE 
will discuss engineering, manufacturing, procurement, and financial 
topics in order to develop and validate key financial inputs, 
including product and capital conversion costs, and to gather 
additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital 
assets, industry competition, and subgroup impacts.
    (e) Industry Cash Flow Analysis. The quantitative part of the 
MIA will rely primarily on the Government Regulatory Impact Model 
(``GRIM''), an industry cash flow model with inputs specific to each 
rulemaking. The Department will develop critical GRIM inputs using a 
number of sources, including publicly-available data, results of the 
other rulemaking analyses, and information gathered from industry 
stakeholders during the course of manufacturer interviews. To 
capture the uncertainty relating to manufacturer cost impacts and 
impacts on product/equipment sales, features, and prices following 
amended standards, the Department will use the GRIM to estimate a 
range of possible impacts under different scenarios.
    (f) Cost impacts on manufacturers. The Department will seek 
input from interested parties on the treatment of cost issues. 
Manufacturers will be encouraged to offer suggestions and feedback 
on sources of data and DOE cost estimates. Costing issues to be 
addressed include:
    (1) Product/equipment-specific costs associated with direct 
material, labor, and factory overhead (based on cost impacts 
estimated for the engineering analysis);
    (2) Product conversion costs, which are investments in research, 
development, testing, marketing, and other non-capitalized costs 
necessary to make product designs comply with new or amended energy 
conservation standards; and
    (3) Capital conversion costs, which are investments in property, 
plants, and equipment necessary to adapt or change production 
facilities such that new, compliant product designs can be 
fabricated and assembled.
    (g) Disproportional impacts on manufacturer subgroups. DOE will 
evaluate subgroups of manufacturers that may be disproportionately 
impacted by standards or that may not be accurately represented by 
the average cost assumptions used to develop the industry cash flow 
analysis. Such manufacturer subgroups may include small business 
manufacturers, niche players, and/or manufacturers exhibiting a cost 
structure that largely differs from the industry average. The 
subgroup analysis will include qualitative descriptions and, where 
sufficient non-proprietary data are available, quantitative 
estimates.
    (h) Impacts on product/equipment sales, features, and prices. 
The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. For this analysis, the GRIM uses the NIA's annual 
shipment projections derived from the shipments analysis.
    (i) Measures of impact. The Department will use the GRIM to 
calculate cash flows using standard accounting principles and 
changes in industry net present value (INPV) between the no-new-
standards case and each standards case. The difference in INPV 
between the no-new-standards case and a standards case represents 
the financial impact of the new or amended energy conservation 
standard on manufacturers. Computations will be performed for the 
industry as a whole and, as appropriate, for manufacturer subgroups. 
Impacts to be analyzed include:
    (1) Industry net present value and change in INPV relative to 
the no-new-standards case industry value. The Department will 
perform sensitivity/scenario analyses for parameters where 
significant uncertainty was identified and/or for which DOE received 
significant comment. An uncertainty analysis could include inputs 
such as production costs, conversion costs, manufacturer mark-ups, 
and shipment projections.
    (2) Industry annual cash flows and percent change relative to 
the no-new-standards cash flow levels. The Department will analyze 
the impact of the new or amended standard on industry annual free 
cash flow as an indicator of potential financial constraints in the 
industry.
    (3) Other measures of impact are described in paragraphs (j) 
through (m) of this section and will also be evaluated in the MIA.
    (j) Cumulative Impacts of Other Federal Regulatory Actions.
    (1) The Department will recognize and consider the overlapping 
effects on manufacturers of new or revised DOE standards and other 
Federal regulatory actions affecting the same products or equipment.
    (2) If the Department determines that a proposed standard would 
impose a significant impact on product or equipment manufacturers 
within approximately three years of the compliance date of another 
DOE standard that imposes significant impacts on the same 
manufacturers (or divisions thereof, as appropriate), the Department 
will, to the extent possible, evaluate the impact on manufacturers 
of the proposed standard and assess the joint impacts of both 
standards on manufacturers as described in paragraph (j)(4) of this 
section.
    (3) If the Department is directed to establish or revise 
standards for products/equipment that are components of other 
products/equipment subject to standards, the Department will 
consider the interaction between such standards in assessing 
manufacturer impacts of a particular standard as described in 
paragraph (j)(4) of this section.
    (4) The Department will seek to assess regulations that affect 
the same product and same revenue streams in an appropriately 
coordinated or integrated analysis. Where

[[Page 35689]]

multiple regulations do not affect the same revenue streams but lead 
to industry constraints due to resources shared (such as capital, 
engineering time, test lab availability, or limited capacity of 
shared vendors) across covered products, DOE will describe and 
consider those industry constraints.
    (k) Competitive Impact Assessment. EPCA directs the Department 
to consider any lessening of competition that is likely to result 
from imposition of standards. It further directs the Attorney 
General to determine in writing the impacts, if any, of any 
lessening of competition. To assist the Attorney General in making 
this determination, DOE will gather information that would help in 
assessing asymmetrical cost increases to some manufacturers, 
increased proportion of fixed costs potentially increasing business 
risks, and potential barriers to market entry (e.g., proprietary 
technologies).
    (l) Manufacturing Capacity Impact. Through public comment and 
during the manufacturer interviews, the Department will seek 
information to help identify impacts on manufacturing capacity, such 
as:
    (1) Capacity utilization and plant location decisions with and 
without new or amended standards;
    (2) The ability of manufacturers to upgrade or remodel existing 
facilities to accommodate new or amended standards;
    (3) The nature and value of stranded assets, if any, that are a 
direct result of new or amended standards; and
    (4) Estimates for any one-time restructuring and other charges, 
where applicable.
    (m) Direct Employment Impacts. To assess how direct employment 
patterns might be affected by new or amended standards, the 
Department will solicit industry participant views on changes in 
employment patterns that may result from increased standard levels. 
To help bound quantitative estimates of the potential employment 
impacts, the Department will use the GRIM to estimate the number of 
direct employees in the no-new-standards case and in each of the 
standards cases during the analysis period.
    (n) Summary of quantitative and qualitative assessments. The 
NOPR will include a summary of the manufacturer impacts detailed in 
the TSD. In the NOPR, DOE will report the manufacturer impacts for 
standard levels that are evaluated and discuss quantitative and 
qualitative impacts by standard level.

14. Principles for the Analysis of Impacts on Consumers

    (a) Early consideration of impacts on consumer utility. The 
Department will consider at the earliest stages of the development 
of a standard whether particular design options will lessen the 
utility of the covered products/equipment to the consumer. See 
paragraph (c) of section 6.
    (b) Impacts on product/equipment availability. The Department 
will determine, based on consideration of information submitted 
during the standard development process, whether a proposed standard 
is likely to result in the unavailability of any covered product/
equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as products/equipment generally available in 
the U.S. at the time. DOE will not promulgate a standard if it 
concludes that it would result in such unavailability.
    (c) Measures of consumer impacts. In the assessment of consumer 
impacts of standards, the Department will consider the Life-Cycle 
Cost and Payback Period to evaluate the savings in operating 
expenses relative to increases in the installed product cost.
    (1) Consumer discount rates. To determine present values of 
costs and benefits in life-cycle cost analysis for residential 
consumers, DOE will calculate discount rates as the weighted average 
real interest rate across consumer debt and equity holdings. For 
commercial/industrial consumers, DOE will calculate discount rates 
as the weighted average cost of capital. DOE will use discount rate 
distributions to capture the diversity of residential and 
commercial/industrial consumers.
    (2) Variation in consumer impacts. The Department will consider 
impacts on significant segments of consumers in determining 
standards levels, and will use representative consumer samples where 
possible to evaluate the potential distribution of impacts of 
candidate/trial standard levels being evaluated among consumers 
using the product under consideration for standards. Where LCC 
savings are positive, the Department will also consider impacts on 
any significant subgroups of consumers that may be 
disproportionately impacted by a potential standard level, such as 
low-income households or small businesses. DOE will consider non-
regulatory approaches as discussed in Section 15, taking into 
account significant impacts on identifiable subgroups.
    (3) Sensitivity and scenario analyses. For data or assumptions 
subject to a higher degree of uncertainty, the Department will also 
perform sensitivity and scenario analyses when appropriate.

15. Consideration of Non-Regulatory Approaches

    The Department recognizes that non-regulatory efforts by 
manufacturers, utilities, and other interested parties can result in 
substantial efficiency improvements. The Department intends to 
consider the likely effects of non-regulatory initiatives relative 
to standard levels being evaluated. DOE will attempt to base its 
assessment on the actual impacts of such initiatives to date, but it 
also will consider information presented regarding the impacts that 
any existing initiative might have in the future.

16. Cross-Cutting Analytical Assumptions

    In selecting values for certain cross-cutting analytical 
assumptions, DOE expects to rely upon the following sources and 
general principles.
    (a) Underlying economic assumptions. The appliance standards 
analyses will generally use the same economic growth assumptions 
that underlie the most current Annual Energy Outlook (AEO) published 
by the Energy Information Administration (EIA).
    (b) Analytic time length. The appliance standards analyses will 
generally consider impacts over the lifetime of products shipped 
over a 30-year period. As a sensitivity case, the analyses may also 
use a shorter time period in analyzing the effects of the standard.
    (c) Energy price trends. Analyses of the impact of appliance 
standards on users will generally adopt the reference energy price 
scenario of the EIA's most current AEO. The sensitivity of estimated 
impacts to possible variations in future energy prices are likely to 
be examined using the EIA's high and low energy price scenarios. The 
analyses will incorporate regional and/or marginal prices as 
appropriate and where available.
    (d) Product/equipment-specific energy-efficiency trends, without 
updated standards. Product/equipment-specific energy-efficiency 
trends will be based on the best available historical market data, 
technology trends, and other product-specific assessments by DOE 
with input from interested parties.
    (e) Discount rates for national costs and benefits. DOE uses 
both 3-percent and 7-percent real discount rates when estimating 
national impacts. Those discount rates are in accordance with the 
Office of Management and Budget (OMB)'s guidance to Federal agencies 
on developing regulatory analyses (OMB Circular A-4 (Sept. 17, 2003) 
and section E., ``Identifying and Measuring Benefits and Costs,'' 
therein).

17. Emissions Analysis

    (a) Emissions reductions. DOE will use best practices at the 
time to estimate emission reductions of certain greenhouse gases and 
pollutants likely to result from standard levels being evaluated. To 
date best practice means the emissions analysis typically includes 
two components. In the first component, DOE typically develops the 
power sector emissions analysis--to date best practice includes 
using a methodology that utilizes DOE's latest Annual Energy 
Outlook. For site combustion of natural gas or petroleum fuels, to 
date best practice means the combustion emissions are typically 
estimated using emission intensity factors from the Environmental 
Protection Agency (EPA). The second component of DOE's emissions 
analysis typically estimates the effect of standard levels being 
evaluated on emissions due to ``upstream activities'' in the fuel 
production chain. These upstream activities include the emissions 
related to extracting, processing, and transporting fuels to the 
site of combustion, e.g., as detailed in DOE's Full-Fuel-Cycle 
Statement of Policy (76 FR 51281 (August 18, 2011)).
    (b) Monetization of emissions reductions. For estimating the 
economic value of avoided emissions of carbon dioxide and other 
greenhouse gases, as well as those of other air pollutants, DOE will 
follow the best practices at the time, for example, by using 
accepted benefit-per-ton values from the scientific literature at 
the time.

[FR Doc. 2021-14273 Filed 7-6-21; 8:45 am]
BILLING CODE 6450-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>