This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

31359 

Vol. 87, No. 100 

Tuesday, May 24, 2022 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[EERE–2017–BT–STD–0021] RIN 1904–AD90 

Energy Conservation Program: Energy 

Conservation Standards for Unfired 

Hot Water Storage Tanks 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final determination. 

SUMMARY: The Energy Policy and 

Conservation Act, as amended 

(‘‘EPCA’’), prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including unfired hot water storage 

tanks (‘‘UFHWSTs’’). EPCA also 

requires the U.S. Department of Energy 

(‘‘DOE’’ or ‘‘the Department’’) to 

periodically determine whether morestringent, amended standards would be 

technologically feasible and 

economically justified, and would result 

in significant additional energy savings. 

In this final determination, DOE 

determines that the energy conservation 

standards for UFHWSTs do not need to 

be amended. DOE has determined that 

it lacks clear and convincing evidence 

that more-stringent standards for 

UFHWSTs would save a significant 

additional amount of energy and would 

be economically justified. 

DATES: The effective date of this final 

determination is July 25, 2022. 

ADDRESSES: The docket for this 

rulemaking, which includes Federal 

Register notices, public meeting 

attendee lists and transcripts, 

comments, and other supporting 

documents/materials, is available for 

review at www.regulations.gov. All 

documents in the docket are listed in 

the www.regulations.gov index. 

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 

www.regulations.gov/docket?D=EERE2017-BT-STD-0021. The docket web 

page contains instructions on how to 

access all documents, including public 

comments, in the docket. 

For further information on how to 

review the docket, contact the 

Appliance and Equipment Standards 

Program staff at (202) 287–1445 or by 

email: ApplianceStandardsQuestions@

ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Julia Hegarty, 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. Telephone: (240) 597– 

6737. Email: 

ApplianceStandardsQuestions@

ee.doe.gov. 

Mr. Eric Stas, U.S. Department of 

Energy, Office of the General Counsel, 

GC–33, 1000 Independence Avenue SW, 

Washington, DC 20585–0121. 

Telephone: (202) 586–5827. Email: 

Eric.Stas@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Synopsis of the Final Determination 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemaking for 

UFHWSTs 

III. General Discussion 

A. Product Classes and Scope of Coverage 

B. Test Procedure 

C. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

D. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

E. Economic Justification 

1. Economic Impact on Manufacturers and 

Consumers 

2. Savings in Operating Costs Compared to 

Increase in Price (LCC and PBP) 

3. Energy Savings 

4. Lessening of Utility or Performance of 

Equipment 

5. Impact of Any Lessening of Competition 

6. Need for National Energy Conservation 

7. Other Factors 

IV. Methodology and Discussion of Related 

Comments 

A. Market and Technology Assessment 

1. Scope of Coverage and Equipment 

Classes 

2. Technology Options 

B. Screening Analysis 

1. Screened-Out Technologies 

2. Remaining Technologies 

C. Engineering Analysis 

1. Efficiency Analysis 

2. Representative Equipment for Analysis 

3. Cost Analysis 

D. Energy Use Analysis 

1. Tank Thermal Loss Model 

a. Tank Surface Area (Ai, j) 

b. Tank Internal Water Temperature (Ti) 

c. Tank Ambient Temperature (Tamb, z) 

d. R-value of Insulation (Ri, j) 

2. Annual Energy Use Due to UFHWST 

Losses 

3. Additional Sources of Uncertainty 

E. Life-Cycle Cost and Payback Period 

Analysis 

1. Installation Cost 

2. Annual Energy Consumption 

F. Shipments Analysis 

1. Stock Estimates 

a. Residential Stock 

b. Commercial Stock 

c. Industrial Stock 

2. Shipments for Replacement 

3. Shipments for New Construction 

4. Estimated Shipments 

5. Additional Sources of Uncertainty 

G. National Impact Analysis 

1. National Energy Savings 

2. Product Lifetime 

3. Energy Efficiency Distribution in the NoNew-Standards Case 

4. Hot Water Supply Boiler Efficiency 

Trend 

V. Analytical Results and Conclusions 

A. National Impact Analysis 

1. Significance of Energy Savings 

2. Net Present Value of Consumer Costs 

and Benefits 

B. Final Determination 

1. Technological Feasibility 

2. Significant Conservation of Energy 

3. Economic Justification 

4. Summary 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866 

and 13563 

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 Under the Information Quality 

Bulletin for Peer Review 

M. Congressional Notification 

VII. Approval of the Office of the Secretary 


jspears on DSK121TN23PROD with RULES1
31360 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

1For editorial reasons, upon codification in the 

U.S. Code, Part C was redesignated Part A–1. 

2All references to EPCA in this document refer 

to the statute as amended through the Energy Act 

of 2020, Public Law 116–260 (Dec. 27, 2020), which 

reflects the last statutory amendments that impact 

Parts A and A–1 of EPCA. 

I. Synopsis of the Final Determination 

Title III, Part C1 of EPCA,2 established 

the Energy Conservation Program for 

Certain Industrial Equipment. (42 U.S.C. 

6311–6317) This equipment includes 

UFHWSTs, the subject of this 

rulemaking. (42 U.S.C. 6311(1)(K)) 

Pursuant to EPCA, DOE is triggered to 

consider amending the energy efficiency 

standards for certain types of 

commercial and industrial equipment, 

including the equipment at issue in this 

document, whenever the American 

Society of Heating, Refrigerating, and 

Air-Conditioning Engineers 

(‘‘ASHRAE’’) amends the standard 

levels or design requirements prescribed 

in ASHRAE Standard 90.1, ‘‘Energy 

Standard for Buildings Except Low-Rise 

Residential Buildings,’’ (‘‘ASHRAE 

Standard 90.1’’). Under a separate 

provision of EPCA, DOE is required to 

review the existing energy conservation 

standards for those types of covered 

equipment subject to ASHRAE Standard 

90.1 every 6 years to determine whether 

those standards need to be amended. (42 

U.S.C. 6313(a)(6)(A)–(C)) DOE is 

publishing this final determination 

regarding the energy conservation 

standards for UFHWSTs under EPCA’s 

6-year-lookback authority. (42 U.S.C. 

6313(a)(6)(C)) 

For this final determination, DOE 

analyzed UFHWSTs subject to standards 

as specified in the Code of Federal 

Regulations (‘‘CFR’’) at 10 CFR 431.110. 

DOE first analyzed the technological 

feasibility of more-efficient UFHWSTs. 

For those UFHWSTs for which DOE 

determined higher standards to be 

technologically feasible, DOE estimated 

energy savings that would result from 

potential amended energy conservation 

standards. DOE also considered whether 

potential energy conservation standards 

would be economically justified. As 

discussed in the following sections, 

DOE has determined that it lacks clear 

and convincing evidence that amended 

energy conservation standards for 

UFHWSTs would result in significant 

additional conservation of energy or be 

economically justified. 

Based on the results of these analyses, 

summarized in section V of this 

document, DOE has determined that 

current energy conservation standards 

for UFHWSTs do not need to be 

amended. 

II. Introduction 

The following section briefly 

discusses the statutory authority 

underlying this final determination, as 

well as some of the relevant historical 

background related to the establishment 

of energy conservation standards for 

UFHWSTs. 

A. Authority 

EPCA, Public Law 94–163 (42 U.S.C. 

6291–6317, as codified), among other 

things, authorizes DOE to regulate the 

energy efficiency of a number of 

consumer products and certain 

industrial equipment. Title III, Part C of 

EPCA, added by Public Law 95–619, 

Title IV, section 441(a) (42 U.S.C. 6311– 

6317, as codified), established the 

Energy Conservation Program for 

Certain Industrial Equipment, which 

sets forth a variety of provisions 

designed to improve energy efficiency. 

This equipment includes UFHWSTs, the 

subject of this rulemaking. (42 U.S.C. 

6311(1)(K)) 

The energy conservation program 

under EPCA consists essentially of four 

parts: (1) Testing, (2) labeling, (3) the 

establishment of Federal energy 

conservation standards, and (4) 

certification and enforcement 

procedures. Relevant provisions of 

EPCA specifically include definitions 

(42 U.S.C. 6311), energy conservation 

standards (42 U.S.C. 6313), test 

procedures (42 U.S.C. 6314), labeling 

provisions (42 U.S.C. 6315), and the 

authority to require information and 

reports from manufacturers (42 U.S.C. 

6316). 

Federal energy efficiency 

requirements for covered equipment 

established under EPCA generally 

supersede State laws and regulations 

concerning energy conservation testing, 

labeling, and standards. (42 U.S.C. 

6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 

6297) DOE may, however, grant waivers 

of Federal preemption in limited 

circumstances for particular State laws 

or regulations, in accordance with the 

procedures and other provisions set 

forth under EPCA. (42 U.S.C. 6297(d); 

42 U.S.C. 6316(a); 42 U.S.C. 

6316(b)(2)(D)) 

Subject to certain criteria and 

conditions, DOE is required to develop 

test procedures to measure the energy 

efficiency, energy use, or estimated 

annual operating cost of covered 

equipment. (42 U.S.C. 6314) 

Specifically, EPCA requires that if a test 

procedure referenced in ASHRAE 

Standard 90.1 is updated, DOE must 

update its test procedure to be 

consistent with the amended test 

procedure in ASHRAE Standard 90.1, 

unless DOE determines, by rule, 

published in the Federal Register and 

supported by clear and convincing 

evidence, that the amended test 

procedure is not reasonably designed to 

produce test results that reflect the 

energy efficiency, energy use, or 

estimated operating costs of the covered 

ASHRAE equipment during a 

representative average use cycle. In 

addition, DOE must determine that the 

amended test procedure is not unduly 

burdensome to conduct. (42 U.S.C. 

6314(a)(2) and (4)) In addition, if DOE 

determines that a test procedure 

amendment is warranted, it must 

publish proposed test procedures in the 

Federal Register and offer the public an 

opportunity (of not less than 45 days 

duration) to present oral and written 

comments on them. (42 U.S.C. 6314(b)) 

In contrast, if DOE determines that test 

procedure revisions are not appropriate, 

DOE must publish in the Federal 

Register its determination not to amend 

the test procedures. (42 U.S.C. 

6314(a)(1)(A)(ii)) 

Manufacturers of covered equipment 

must use the Federal test procedures as 

the basis for: (1) Certifying to DOE that 

their equipment complies with the 

applicable energy conservation 

standards adopted pursuant to EPCA (42 

U.S.C. 6316(b); 42 U.S.C. 6296), and (2) 

making representations about the energy 

use or efficiency of that equipment (42 

U.S.C. 6314(d)). Similarly, DOE uses 

these test procedures to determine 

whether the equipment complies with 

relevant standards promulgated under 

EPCA. It is noted that DOE does not 

prescribe a test procedure for 

UFHWSTs, as the current Federal 

standard is an insulation design 

requirement of a minimum R-value of 

R–12.5. 10 CFR 431.110. 

EPCA contains mandatory energy 

conservation standards for commercial 

heating, air-conditioning, and water 

heating equipment. (42 U.S.C. 6313(a)) 

Specifically, the statute sets standards 

for small, large, and very large 

commercial package air conditioning 

and heating equipment, packaged 

terminal air conditioners and packaged 

terminal heat pumps, warm-air 

furnaces, packaged boilers, storage 

water heaters, instantaneous water 

heaters, and UFHWSTs. Id. In doing so, 

EPCA established Federal energy 

conservation standards that generally 

corresponded to the levels in the 

ASHRAE Standard 90.1 in effect on 

October 24, 1992 (i.e., ASHRAE 

Standard 90.1–1989). 

If ASHRAE Standard 90.1 is amended 

with respect to the standard levels or 

design requirements applicable under 

that standard for certain commercial 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31361 

equipment, including UFHWSTs, not 

later than 180 days after the amendment 

of the standard, DOE must publish in 

the Federal Register for public comment 

an analysis of the energy savings 

potential of amended energy efficiency 

standards. (42 U.S.C. 6313(a)(6)(A)(i)) 

DOE must adopt amended energy 

conservation standards at the new 

efficiency level in ASHRAE Standard 

90.1, unless clear and convincing 

evidence supports a determination that 

adoption of a more-stringent efficiency 

level as a national standard would 

produce significant additional energy 

savings and be technologically feasible 

and economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) 

To determine whether a standard is 

economically justified, EPCA requires 

that DOE determine whether the 

benefits of the standard exceed its 

burdens by considering, to the greatest 

extent practicable, the following seven 

factors: 

(1) The economic impact of the 

standard on manufacturers and 

consumers of products subject to the 

standard; 

(2) The savings in operating costs 

throughout the estimated average life of 

the covered products in the type (or 

class) compared to any increase in the 

price, initial charges, or maintenance 

expenses for the covered equipment that 

are likely to result from the standard; 

(3) The total projected amount of 

energy savings likely to result directly 

from the standard; 

(4) Any lessening of the utility or the 

performance of the covered product 

likely to result from 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 standard; 

(6) The need for national energy 

conservation; and 

(7) Other factors the Secretary of 

Energy considers relevant. 

(42 U.S.C. 6313(a)(6)(B)(ii)(I)–(VII) 

and (C)(i); 42 U.S.C. 6316(a); 42 U.S.C. 

6295(o)(2)(B)(i)) 

If DOE adopts as a national standard 

the efficiency levels specified in the 

amended ASHRAE Standard 90.1, DOE 

must establish such a standard not later 

than 18 months after publication of the 

amended industry standard. (42 U.S.C. 

6313(a)(6)(A)(ii)(I)) If DOE determines 

that a more-stringent standard is 

appropriate under the statutory criteria, 

DOE must establish the more-stringent 

standard not later than 30 months after 

publication of the revised ASHRAE 

Standard 90.1. (42 U.S.C. 

6313(a)(6)(B)(i)) 

EPCA also requires that every 6 years 

DOE shall evaluate the energy 

conservation standards for each class of 

certain covered commercial equipment, 

including UFHWSTs, and publish either 

a notice of determination that the 

standards do not need to be amended, 

or a notice of proposed rulemaking 

(‘‘NOPR’’) that includes new proposed 

energy conservation standards 

(proceeding to a final rule, as 

appropriate). (42 U.S.C. 6313(a)(6)(C)(i)) 

EPCA further provides that, not later 

than 3 years after the issuance of a final 

determination not to amend standards, 

DOE must publish either a notice of 

determination that standards for the 

product do not need to be amended, or 

a NOPR including new proposed energy 

conservation standards (proceeding to a 

final rule, as appropriate). (42 U.S.C. 

6313(a)(6)(C)(iii)(II)) DOE must make the 

analysis on which the determination is 

based publicly available and provide an 

opportunity for written comment. (42 

U.S.C. 6313(a)(6)(C)(ii)) Further, a 

determination that more-stringent 

standards would: (1) Result in 

significant additional conservation of 

energy and (2) be both technologically 

feasible and economically justified must 

be supported by clear and convincing 

evidence. (42 U.S.C. 6313(a)(6)(C)(i); 42 

U.S.C. 6313(a)(6)(A)) DOE is publishing 

this final determination in satisfaction 

of the 6-year-lookback review 

requirement in EPCA, having 

determined that DOE lacks clear and 

convincing evidence that amended 

standards for UFHWSTs would result in 

significant additional conservation of 

energy and be economically justified. 

B. Background 

1. Current Standards 

The initial Federal standards for 

UFHWSTs, established by EPCA, 

corresponded to the efficiency levels 

contained in ASHRAE Standard 90.1– 

1989. On January 12, 2001, DOE 

amended the standards for UFHWSTs to 

be equivalent to the efficiency level in 

ASHRAE Standard 90.1 as revised in 

October 1999. 66 FR 3336 (‘‘January 

2001 final rule’’). The January 2001 final 

rule established an insulation design 

requirement of a minimum R-value of 

R–12.5 for all UFHWSTs. 66 FR 3336, 

3356 (Jan. 12, 2001). This remains the 

current Federal standard (and the 

standard level specified in the most 

recent version of ASHRAE Standard 

90.1). The current standard is codified 

at 10 CFR 431.110. 

2. History of Standards Rulemaking for 

UFHWSTs 

As noted previously, the standards for 

UFHWSTs were most recently amended 

in the January 2001 final rule. EPCA 

requires DOE to evaluate the applicable 

energy conservation standard for 

UFHWSTs every 6 years to determine 

whether it needs to be amended. (42 

U.S.C. 6313(a)(6)(C)(i)) Thus, DOE 

published a request for information 

(‘‘RFI’’) in the Federal Register on 

August 9, 2019, which identified 

various issues and sought to collect data 

and information to inform its 

determination, consistent with its 

obligations under EPCA, as to whether 

the UFHWST standards need to be 

amended (the ‘‘August 2019 RFI’’). 84 

FR 39220. DOE subsequently published 

a notice of proposed determination 

(‘‘NOPD’’) in the Federal Register on 

June 10, 2021 (‘‘June 2021 NOPD’’), 

wherein DOE tentatively determined 

that the energy conservation standards 

for UFHWSTs do not need to be 

amended. 

DOE received six comments in 

response to the June 2021 NOPD from 

the interested parties listed in Table II.1. 

TABLE II.1—INTERESTED PARTIES PROVIDING WRITTEN COMMENTS ON THE JUNE 2021 UFHWSTS NOPD 

Commenter(s) Abbreviation Commenter type 

Aarin King ................................................................................................ King ................................................ Individual. 

Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, Northwest Energy Efficiency Alliance.Joint Commenters ......................... Efficiency Organizations. 

Bradford White Corporation .................................................................... BWC .............................................. Manufacturer. 

Rheem Manufacturing Company ............................................................ Rheem ........................................... Manufacturer. 

A.O. Smith Corporation ........................................................................... A.O. Smith ..................................... Manufacturer. 

Pacific Gas and Electric Company (‘‘PG&E’’), San Diego Gas and 

Electric (‘‘SDG&E’’), Southern California Edison (‘‘SCE’’).

CA IOUs ........................................ Investor-Owned Utilities. 


jspears on DSK121TN23PROD with RULES1
31362 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

3The parenthetical reference provides a reference 

for information located in the docket (Docket No. 

EERE–2017–BT–STD–0021, which is maintained at 

www.regulations.gov). The references are arranged 

as follows: (Commenter name, comment docket ID 

number, page of that document). 

4The CCD is available at 

www.regulations.doe.gov/certification-data. 

5Commenter also provided additional comments 

regarding heat transfer in tanks not applicable to 

this rulemaking. 

A parenthetical reference at the end of 

a comment quotation or paraphrase 

provides the location of the item in the 

public record.3

III. General Discussion 

DOE developed this final 

determination after a review of the 

UFHWST market, including product 

literature and product listings in the 

DOE Compliance Certification Database 

(‘‘CCD’’).4 DOE also considered oral and 

written comments, data, and 

information from interested parties that 

represent a variety of interests. The 

following discussion addresses issues 

raised by these commenters. BWC, 

Rheem, and A.O. Smith all expressed 

support for DOE’s proposed 

determination that energy conservation 

standards for UFHWSTs do not need to 

be amended. (BWC, No. 14 at p. 1; 

Rheem, No. 15 at p. 1; A.O. Smith, No. 

16 at p. 1) However, as discussed in 

section III.B of this document, the CA 

IOUs and the Joint Commenters 

encouraged DOE to consider a 

performance-based test procedure for 

UFHWSTs to address standby loss 

before proceeding with this standards 

rulemaking. (CA IOUs, No. 17 at p. 2; 

Joint Commenters, No. 13 at p. 1) 

A. Product Classes and Scope of 

Coverage 

When evaluating and establishing 

energy conservation standards, DOE 

typically divides covered equipment 

into equipment classes by the type of 

energy used or by capacity or other 

performance-related features that justify 

differing standards. For UFHWSTs, the 

current standard at 10 CFR 431.110 is 

applicable to a single equipment class 

covering all UFHWSTs, which is 

consistent with the standard and 

structure in ASHRAE Standard 90.1. 

DOE’s regulations define ‘‘unfired hot 

water storage tank’’ as a tank used to 

store water that is heated externally, and 

that is industrial equipment. 10 CFR 

431.102. The scope of coverage is 

discussed in further detail in section 

IV.A.1 of this final determination. 

B. Test Procedure 

EPCA sets forth generally applicable 

criteria and procedures for DOE’s 

adoption and amendment of test 

procedures. (42 U.S.C. 6314(a)) As a 

general matter, manufacturers of 

covered ASHRAE equipment must use 

these test procedures to certify to DOE 

that their equipment complies with 

energy conservation standards and to 

quantify the efficiency of their 

equipment. (42 U.S.C. 6316(b); 42 U.S.C. 

6296) DOE’s current energy 

conservation standards for UFHWSTs 

are expressed in terms of a minimum 

R-value for tank insulation. (See 10 CFR 

431.110.) 

DOE does not prescribe a test 

procedure for UFHWSTs; however, 

DOE’s regulations define ‘‘R-value’’ as 

the thermal resistance of insulating 

material as determined using either 

ASTM International (‘‘ASTM’’) C177– 

13, ‘‘Standard Test Method for SteadyState Heat Flux Measurements and 

Thermal Transmission Properties by 

Means of the Guarded-Hot-Plate 

Apparatus,’’ or ASTM C518–15, 

‘‘Standard Test Method for Steady-State 

Thermal Transmission Properties by 

Means of the Heat Flow Meter 

Apparatus’’ and expressed in degreessquare feet-hours per British thermal 

units (‘‘°F ft2 h/Btu’’). 10 CFR 431.102. 

In response to the June 2021 NOPD, 

the CA IOUs and the Joint Commenters 

encouraged DOE to consider a 

performance-based test procedure for 

UFHWSTs to address standby loss 

before proceeding with this energy 

conservation standards rulemaking. (CA 

IOUs, No. 17 at p. 2; Joint Commenters, 

No. 13 at p. 1) The CA IOUs stated that 

performance-based standards are 

preferable to prescriptive standards 

because performance-based standards 

present a clearer assessment of product 

energy performance, allow purchasers to 

directly compare product efficiencies, 

and would encourage innovation in 

terms of new methods to reduce heat 

loss. (CA IOUs, No. 17 at pp. 1–2) 

Additionally, the Joint Commenters 

stated that the current standard, in 

terms of thermal resistance, does not 

guarantee that all tank surfaces are 

sufficiently insulated. They suggested 

that performance-based standards 

would provide a better understanding of 

actual energy consumption and would 

likely encourage improved methods to 

reduce heat loss. (Joint Commenters, No. 

13 at p. 1) In contrast, Rheem 

recommended that the current 

prescriptive design requirement (i.e., the 

minimum insulation requirement of R– 

12.5) be retained for UFHWSTs. 

(Rheem, No. 15 at p. 1) 

As discussed in section II.A of this 

document, DOE is publishing this final 

determination in satisfaction of the 

6-year-lookback review requirement in 

EPCA, which requires DOE to evaluate 

the energy conservation standards for 

certain commercial equipment, 

including UFHWSTs. Under that 

provision, DOE must publish either a 

notice of determination that the 

standards do not need to be amended, 

or a NOPR that includes proposed 

amendments to the energy conservation 

standards (proceeding to a final rule, as 

appropriate) every 6 years. (42 U.S.C. 

6313(a)(6)(C)(i)) Because a Federal test 

procedure for evaluating standby loss of 

UFHWSTs has not been established, 

DOE has only considered potential 

amended standards based on updating 

the prescriptive design requirement for 

insulation R-value. DOE will consider 

the merits and feasibility of a 

performance test in its next test 

procedure rulemaking for UFHWSTs. 

Additionally, in response to the June 

2021 NOPD, the CA IOUs suggested that 

DOE clarify the amount of tank surface 

area that is required to be insulated. (CA 

IOUs, No. 17 at p. 4) Aarin King stated 

that heat travels upward, and, therefore, 

insulation placement requirements 

should be at the greatest heat loss zones, 

such as the relief valve and fittings on 

the head of the tank. (King, No. 12 at 

p. 1) 5

As stated, the energy conservation 

standard for UFHWSTs specifies a 

minimum insulation rating. The energy 

conservation standard does not further 

specify the manner in which insulation 

is applied to a UFHWST. There are a 

wide variety of tank configurations 

(including the number, shape, and 

location of ports and other fittings) in 

equipment currently on the market, and 

the relative amount of tank surface area 

that is practical to insulate to R–12.5 

varies between tanks. Further, DOE is 

not aware of an industry standard that 

would allow for evaluation of insulation 

uniformity at this time. Therefore, DOE 

is not imposing an insulation placement 

requirement at this time but will 

continue to consider the issue in the 

future. 

Additionally, in response to the June 

2021 NOPD, Rheem suggested that 

focusing on insulation of field-installed 

plumbing may provide more significant 

energy savings than added tank 

insulation. The commenter stated that 

there are diminishing returns from 

increasing insulation thicknesses, and 

consequently, fittings and piping 

contribute to a significantly greater 

portion of the overall standby losses as 

tank insulation is increased. (Rheem, 

No. 15 at p. 2) In response to Rheem, 

DOE notes that it does not have 

authority to regulate field-installed 

plumbing insulation and did not 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31363 

6The FFC metric is discussed in DOE’s statement 

of policy and notice of policy amendment. 76 FR 

51281 (August 18, 2011), as amended at 77 FR 

49701 (August 17, 2012). 

7See Executive Order 14008, ‘‘Tackling the 

Climate Crisis at Home and Abroad,’’ 86 FR 7619 

(Feb. 1, 2021). 

consider such approach for this 

analysis. 

C. Technological Feasibility 

1. General 

In evaluating potential amendments 

to energy conservation standards, DOE 

conducts a screening analysis based on 

information gathered through a market 

and technology assessment of all current 

technology options and working 

prototype designs that could improve 

the efficiency of the products or 

equipment that are the subject of the 

rulemaking. As the first step in such an 

analysis, DOE develops a list of 

technology options for consideration in 

consultation with manufacturers, design 

engineers, and other interested parties. 

DOE then determines which of those 

means for improving efficiency are 

technologically feasible. In general, DOE 

considers technologies incorporated in 

commercially-available products or in 

working prototypes to be 

technologically feasible. See generally 

10 CFR 431.4; 10 CFR part 430, subpart 

C, appendix A, section 6(b)(3)(i) and 

7(b)(1). 

After DOE has determined that 

particular technology options are 

technologically feasible, it further 

evaluates each technology option in 

light of the following additional 

screening criteria: (1) Practicability to 

manufacture, install, and service; (2) 

adverse impacts on equipment utility or 

availability; (3) adverse impacts on 

health or safety and (4) unique-pathway 

proprietary technologies. See generally 

10 CFR 431.4; 10 CFR part 430, subpart 

C, appendix A, sections 6(b)(3)(ii)–(v) 

and 7(b)(2)–(5). Section IV.B of this 

document discusses the results of the 

screening analysis for UFHWSTs, 

particularly the designs DOE 

considered, those it screened out, and 

those that are the basis for the standards 

considered in this rulemaking. 

2. Maximum Technologically Feasible 

Levels 

As when DOE proposes to adopt an 

amended standard for a type or class of 

covered equipment, the Department 

determines the maximum improvement 

in energy efficiency or maximum 

reduction in energy use that is 

technologically feasible for such 

equipment. Accordingly, in the 

engineering analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for UFHWSTs, using the 

design parameters for the most efficient 

equipment available on the market or in 

working prototypes. The max-tech 

levels that DOE determined for this 

rulemaking are described in section IV.C 

of this final determination. 

D. Energy Savings 

1. Determination of Savings 

For each efficiency level (‘‘EL’’) 

evaluated, DOE projected energy savings 

from application of the efficiency level 

to UFHWSTs purchased in the 30-year 

period that begins in the assumed year 

of compliance with potential amended 

standards (2025–2054). The savings are 

measured over the entire lifetime of 

UFHWSTs purchased in the 30-year 

analysis period. DOE quantified the 

energy savings attributable to each 

efficiency level as the difference in 

energy consumption between each 

standards case and the no-newstandards case. The no-new-standards 

case represents a projection of energy 

consumption that reflects how the 

market for the subject equipment would 

likely evolve in the absence of amended 

energy conservation standards. 

DOE used a simplified national 

impact analysis (‘‘NIA’’) spreadsheet 

model to estimate national energy 

savings (‘‘NES’’) from potential 

amended standards for UFHWSTs. The 

simplified NIA for this analysis 

quantifies the potential energy savings 

from potential efficiency improvements 

for UFHWSTs; however, it does not 

estimate the net present value (‘‘NPV’’) 

to the Nation of these savings that is 

typically performed as part of the NIA. 

The simplified NIA spreadsheet model 

(described in section IV.G of this 

document) calculates energy savings in 

terms of site energy, which is the energy 

directly consumed by equipment at the 

locations where it is used. DOE also 

calculates NES in terms of full-fuelcycle (‘‘FFC’’) energy savings. The FFC 

metric includes the energy consumed in 

extracting, processing, and transporting 

primary fuels (i.e., coal, natural gas, 

petroleum fuels), and, thus, presents a 

more complete picture of the impacts of 

energy conservation standards.6 DOE’s 

approach is based on the calculation of 

an FFC multiplier for each of the energy 

types used by covered products or 

equipment. For more information on 

FFC energy savings, see section IV.G.1 

of this document. 

2. Significance of Savings 

In determining whether amended 

standards are needed for covered 

equipment addressed by ASHRAE 

Standard 90.1, DOE must determine 

whether such action would result in 

significant additional conservation of 

energy. (42 U.S.C. 6313(a)(6)(C)(i); 42 

U.S.C. 6313(a)(6)(A)(ii)(II)) 

The significance of energy savings 

offered by a new or amended energy 

conservation standard cannot be 

determined without knowledge of the 

specific circumstances surrounding a 

given rulemaking. For example, the 

United States has now rejoined the Paris 

Agreement on February 19, 2021. As 

part of that agreement, the United States 

has committed to reducing GHG 

emissions in order to limit the rise in 

mean global temperature.7 Additionally, 

some covered products and equipment 

have most of their energy consumption 

occur during periods of peak energy 

demand. The impacts of these products 

on the energy infrastructure can be more 

pronounced than products with 

relatively constant demand. 

Accordingly, DOE evaluates the 

significance of energy savings on a caseby-case basis. DOE has estimated the 

potential full-fuel cycle energy savings 

from an amended energy conservation 

standard for UFHWSTs at max-tech to 

be 0.058 quadrillion British thermal 

units (‘‘quads’’) over a 30-year analysis 

period (2025–2054). However, as 

explained in section V.B.2 of this 

document, DOE has encountered 

significant uncertainties related to its 

assessment of the energy savings 

potential of more-stringent amended 

energy conservation standards for 

UFHWSTs. 

E. Economic Justification 

As noted previously, EPCA provides 

seven factors to be evaluated in 

determining whether a potential energy 

conservation standard is economically 

justified. (See 42 U.S.C. 

6313(a)(6)(B)(ii)(I)–(VII)) The following 

sections discuss how DOE has 

addressed each of those seven factors in 

this rulemaking. 

1. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of 

potential amended standards on 

manufacturers, DOE typically conducts 

a manufacturer impact analysis 

(‘‘MIA’’). In conducting an MIA, DOE 

uses an annual cash-flow approach to 

determine the quantitative impacts 

between the no-new-standards and the 

potential amended standards cases. The 

industry-wide impacts analyzed 

typically include: (1) Industry net 

present value (‘‘INPV’’), which values 

the industry on the basis of expected 


jspears on DSK121TN23PROD with RULES1
31364 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

future cash flows; (2) cash flows by year; 

(3) changes in revenue and income; and 

(4) other measures of impact, as 

appropriate. DOE has determined that 

the energy conservation standard for 

UFHWSTs does not need to be 

amended, and, therefore, this final 

determination has no cash-flow impacts 

on manufacturers. Accordingly, DOE 

did not conduct an MIA for this final 

determination. 

For individual consumers, measures 

of economic impact include the changes 

in life-cycle cost (‘‘LCC’’) and payback 

period (‘‘PBP’’) associated with new or 

amended standards. These measures are 

discussed further in the following 

section. For consumers in the aggregate, 

DOE also calculates the national net 

present value of the consumer costs and 

benefits expected to result from 

particular standards. DOE also evaluates 

the impacts of potential standards on 

identifiable subgroups of consumers 

that may be affected disproportionately 

by a standard. However, as discussed in 

more detail in section IV.E of this 

document, due to significant 

uncertainties regarding the costs of 

alterations to doorways and mechanical 

rooms (which may be required in 

certain replacement installations in 

order to get an UFHWST to its 

installation destination if additional 

insulation thickness makes the 

UFHWST too large for existing 

structures to accommodate) and the lack 

of data indicating the likelihood and 

cost of such alterations when required, 

any analysis conducted by DOE 

regarding the LCC or PBP would have a 

high degree of uncertainty in terms of 

the inputs to those analyses. Comments 

received regarding the potential 

installation cost impacts of UFHWSTs 

due to larger tank dimensions in pursuit 

of increased efficiency for replacement 

equipment are discussed in section 

IV.E.1 of this document, and the 

rationale for not conducting the LCC or 

PBP is discussed in more detail in 

section IV.E.2 of this document. The 

consumer economic impacts which are 

normally calculated as part of the LCC 

are inputs to DOE’s National NPV 

estimates, but since the Department did 

not conduct an LCC analysis in the 

present case, DOE was unable to 

estimate the NPV for this final 

determination. 

2. Savings in Operating Costs Compared 

to Increase in Price (LCC and PBP) 

EPCA requires DOE to consider the 

savings in operating costs throughout 

the estimated average life of the covered 

product in the type (or class) compared 

to any increase in the price of, or in the 

initial charges for, or maintenance 

expenses of, the covered product that 

are likely to result from a standard. (42 

U.S.C. 6313(a)(6)(B)(ii)(II))) DOE 

typically conducts this comparison in 

its LCC and PBP analysis. 

The LCC is the sum of the purchase 

price of equipment (including its 

installation) and the operating cost 

(including energy, maintenance, and 

repair expenditures) discounted over 

the lifetime of the equipment. The LCC 

analysis requires a variety of inputs, 

such as equipment prices, equipment 

energy consumption, energy prices, 

maintenance and repair costs, 

equipment lifetime, and discount rates 

appropriate for consumers. To account 

for uncertainty and variability in 

specific inputs, such as equipment 

lifetime and discount rate, DOE uses a 

distribution of values, with probabilities 

attached to each value. 

The PBP is the estimated amount of 

time (in years) it takes consumers to 

recover the increased purchase cost 

(including installation) of more-efficient 

equipment through lower operating 

costs. DOE calculates the PBP by 

dividing the change in purchase cost 

due to a more-stringent standard by the 

change in annual operating cost for the 

year that standards are assumed to take 

effect. This type of calculation is known 

as a ‘‘simple’’ payback period because it 

does not take into account changes in 

operating expenses over time or the time 

value of money (i.e., the calculation is 

done at an effective discount rate of zero 

percent). Payback periods greater than 

the life of the equipment indicate that 

the increased total installed cost is not 

recovered by the reduced operating 

expenses. 

For its LCC and PBP analysis, DOE 

assumes that consumers will purchase 

the equipment in the first year of 

compliance with new or amended 

standards. The LCC savings for the 

considered efficiency levels are 

calculated relative to the case that 

reflects projected market trends in the 

absence of new or amended standards. 

As discussed in section IV.E of this 

document, DOE did not conduct an LCC 

and PBP analysis for this final 

determination because the lack of data 

and high degree of uncertainty of the 

inputs to those analyses meant that the 

outputs would be of little value. 

3. Energy Savings 

Although significant conservation of 

energy is a separate statutory 

requirement for adopting an energy 

conservation standard, EPCA requires 

DOE, in determining the economic 

justification of a standard, to consider 

the total projected energy savings that 

are expected to result directly from the 

standard. (42 U.S.C. 

6313(a)(6)(B)(ii)(III)) As discussed in 

section IV.G of this document, DOE uses 

the NIA spreadsheet models to project 

national energy savings. 

4. Lessening of Utility or Performance of 

Equipment 

In establishing equipment classes, and 

in evaluating design options and the 

impact of potential standard levels, DOE 

evaluates potential standards that would 

not lessen the utility or performance of 

the considered equipment. (42 U.S.C. 

6313(a)(6)(B)(ii)(IV)) Because DOE is not 

amending standards for UFHWSTs, the 

Department has concluded that this 

final determination will not reduce the 

utility or performance of UFHWSTs. 

5. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider the 

impact of any lessening of competition, 

as determined in writing by the 

Attorney General, that is likely to result 

from a standard. (42 U.S.C. 

6313(a)(6)(B)(ii)(V)) Because DOE did 

not propose amended standards for 

UFHWSTs, DOE did not transmit a copy 

of its proposed determination to the 

Attorney General for anti-competitive 

review. 

6. Need for National Energy 

Conservation 

DOE also considers the need for 

national energy conservation in 

determining whether a new or amended 

standard is economically justified. (42 

U.S.C. 6313(a)(6)(B)(ii)(VI)) Because 

DOE has concluded that it lacks clear 

and convincing evidence that amended 

standards for UFHWSTs would result in 

significant additional conservation of 

energy and be technologically feasible 

and economically justified, DOE did not 

conduct a utility impact analysis or 

emissions analysis for this final 

determination. 

7. Other Factors 

In determining whether an energy 

conservation standard is economically 

justified, DOE may consider any other 

factors that the Secretary deems to be 

relevant. (42 U.S.C. 

6313(a)(6)(B)(ii)(VII)) To the extent DOE 

identifies any relevant information 

regarding economic justification that 

does not fit into the other categories 

described previously, DOE could 

consider such information under ‘‘other 

factors.’’ 

IV. Methodology and Discussion of 

Related Comments 

This section addresses the analyses 

DOE has performed for this final 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31365 

determination with regard to UFHWSTs. 

Separate subsections address each 

component of the factors for DOE’s 

consideration, as well as corresponding 

analyses to the extent conducted. DOE 

used a spreadsheet tool to estimate the 

impact of potential energy conservation 

standards. This spreadsheet uses inputs 

from the energy use analysis and 

shipments projections and calculates a 

simplified NES expected to result from 

potential energy conservation standards. 

A. Market and Technology Assessment 

DOE develops information in the 

market and technology assessment that 

provides an overall picture of the 

market for the equipment concerned, 

including the purpose of the equipment, 

the industry structure, manufacturers, 

market characteristics, and technologies 

used in the equipment. This activity 

includes both quantitative and 

qualitative assessments, based primarily 

on publicly-available information. DOE 

also had structured, detailed interviews 

conducted with representative 

manufacturers. During these interviews, 

engineering, manufacturing, 

procurement, and financial topics were 

discussed to validate assumptions used 

in DOE’s analyses, and to identify key 

issues or concerns. These interviews 

were conducted under non-disclosure 

agreements (‘‘NDAs’’), so DOE does not 

document these discussions in the same 

way that it does public comments in the 

comment summaries and DOE’s 

responses throughout the rest of this 

document. 

The subjects addressed in the market 

and technology assessment for this 

rulemaking include: (1) A determination 

of the scope of the rulemaking and 

equipment classes; (2) manufacturers 

and industry structure; (3) shipments 

information; (4) market and industry 

trends, and (5) technologies or design 

options that could improve the energy 

efficiency of UFHWSTs. The key 

findings of DOE’s market assessment are 

summarized in the following 

subsections. 

1. Scope of Coverage and Equipment 

Classes 

In this analysis, DOE relied on the 

definition of UFHWSTs in 10 CFR 

431.102, which defines an UFHWST as 

a tank used to store water that is heated 

externally, and that is industrial 

equipment. Any equipment meeting the 

definition of an UFHWST is included in 

DOE’s scope of coverage. UFHWSTs are 

not currently divided into equipment 

classes (i.e., there is a single equipment 

class covering all UFHWSTs). 

In the June 2021 NOPD, DOE did not 

propose to amend the definition of 

UFHWSTs or to divide UFHWSTs into 

separate equipment classes, stating that 

there was no indication the definition 

would benefit from an amendment or 

that further delineation of equipment 

classes was justified. 86 FR 30796, 

30802 (June 10, 2021). In response to the 

June 2021 NOPD, the CA IOUs 

recommend that DOE explore whether 

separate product classes would remove 

technical and market barriers to the 

setting of more stringent standards and 

if it would be feasible to set different 

standards. Similarly, the CA IOUs 

requested that DOE investigate different 

markets and applications for these 

different types of equipment, stating 

that rated capacity, along with other 

performance-related features, may 

justify the recognition of subgroups of 

UFHWSTs as separate equipment 

classes with differing standards. (CA 

IOUs, No. 17 at p. 2) 

In response, DOE notes that for 

consumer products, EPCA provides that 

DOE shall specify a level of energy use 

or efficiency higher or lower than that 

which applies (or would apply) for such 

type (or class) for any group of covered 

products which have the same function 

or intended use, if the Secretary 

determines that covered products 

within such group consume a different 

kind of energy or have a capacity or 

other performance-related feature which 

other products within such type (or 

class) do not have and such feature 

justifies a higher or lower standard from 

that which applies (or will apply) to 

other products within such type (or 

class). (42 U.S.C. 6295(q)(1)) However, 

there is no companion provision to 42 

U.S.C. 6295(q)(1) for ASHRAE 

equipment. In addition, DOE continues 

to find that changes to the definition of 

UFHWST are unnecessary. 

Therefore, in this Final 

Determination, DOE maintains the 

definition of UFWST and is not dividing 

UFHWSTs into separate equipment 

classes. 

2. Technology Options 

In the June 2021 NOPD, DOE 

identified several technology options 

that would be expected to improve the 

efficiency of UFHWSTs. 86 FR 30796, 

30802 (June 10, 2021). These technology 

options were based on manufacturer 

equipment literature and publiclyavailable technical literature. 

Specifically, the technologies identified 

in the June 2021 NOPD included the 

following: 

• Improved insulation R-value 

Æ Increased insulation thickness 

Æ Foam insulation 

Æ Advanced insulation types 

D Aerogel 

D Vacuum panels 

D Inert gas-filled panels 

• Pipe and fitting insulation 

• Greater coverage of tank surface area 

with foam insulation (e.g., tank 

bottom) 

In response to the June 2021 NOPD, 

Rheem commented that some foam 

systems can provide higher R-values but 

noted that there are variations with inplace foam properties such as densities 

within the cavity from the top to the 

bottom of the tank that will impact 

insulation performance. (Rheem, No. 15 

at p. 2) 

In the analysis for this final 

determination, DOE maintained the 

same set of technology options, which 

include foam insulation as suggested by 

Rheem. 

B. Screening Analysis 

DOE uses the following five screening 

criteria to determine which technology 

options are suitable for further 

consideration in an energy conservation 

standards rulemaking: 

(1) Technological feasibility. 

Technologies that are not incorporated 

in commercial products or in working 

prototypes will not be considered 

further. 

(2) Practicability to manufacture, 

install, and service. If it is determined 

that mass production and reliable 

installation and servicing of a 

technology in commercial equipment 

could not be achieved on the scale 

necessary to serve the relevant market at 

the time of the projected compliance 

date of the standard, then that 

technology will not be considered 

further. 

(3) Impacts on equipment utility or 

equipment availability. If it is 

determined that a technology would 

have significant adverse impact on the 

utility of the equipment to significant 

subgroups of consumers or would result 

in the unavailability of any covered 

equipment type with performance 

characteristics (including reliability), 

features, sizes, capacities, and volumes 

that are substantially the same as 

equipment generally available in the 

United States at the time, it will not be 

considered further. 

(4) Adverse impacts on health or 

safety. If it is determined that a 

technology would have significant 

adverse impacts on health or safety, it 

will not be considered further. 

(5) 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 due to the 

potential for monopolistic concerns. 


jspears on DSK121TN23PROD with RULES1
31366 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

8While the UFHWSTs standard addresses heat 

loss through establishing a minimum level of 

insulation, for the purpose of this analysis, the 

levels of improvement are referred to generally as 

‘‘efficiency levels.’’ 

10 CFR 431.4; 10 CFR part 430, 

subpart C, appendix A, sections 6(b)(3) 

and 7(b). In sum, if DOE determines that 

a technology, or a combination of 

technologies, fails to meet one or more 

of the listed five criteria, it will be 

excluded from further consideration in 

the engineering analysis. The reasons 

for eliminating any technology are 

discussed in the following sections. 

1. Screened-Out Technologies 

In the June 2021 NOPD, DOE did not 

consider any advanced insulation types 

as a technology option to increase the 

insulation R-value for UFHWSTs. Based 

on feedback from manufacturers, DOE 

tentatively determined that use of 

advanced insulation types (such as 

vacuum panels or aerogels) could 

necessitate an extremely difficult 

change to the UFHWST manufacturing 

process due to the rigid nature of these 

materials and the high degree of 

customization and ports on UFHWSTs. 

Additionally, DOE is not aware of any 

UFHWST equipment on the market that 

incorporate aerogels, vacuum panels, or 

inert gas-filled panels. DOE found that 

polyurethane foam is the most 

commonly used type of insulation for 

meeting the minimum insulation 

requirement, but fiberglass and/or 

Styrofoam are often used in specific 

regions (e.g., tank tops or bottoms, or 

regions around ports) where applying 

polyurethane foam could limit access to 

ports or be impractical to manufacture. 

As discussed in the June 2021 NOPD, 

DOE included a minimum amount of 

insulation other than polyurethane foam 

around pipes and fittings in its analysis 

of baseline equipment, but it did not 

consider requiring different insulation 

materials in these regions. For similar 

reasons, DOE did not consider 

additional insulation coverage around 

pipes and fittings as a technology option 

for the analysis. 86 FR 30796, 30803 

(June 10, 2021). 

DOE did not receive any comments in 

response to the June 2021 NOPD 

suggesting any changes to the results of 

its screening analysis. 

2. Remaining Technologies 

In the June 2021 NOPD, DOE retained 

improved insulation R-value due to 

increased polyurethane foam thickness 

as a design option in the engineering 

analysis. DOE determined that this 

technology option is technologically 

feasible because it only involves an 

increase in thickness of the same 

insulation material that is currently 

used on UFHWSTs, and can be achieved 

with the same processes that are 

currently being used in commerciallyavailable equipment or working 

prototypes (e.g., fabricating jackets or 

foaming). 86 FR 30796, 30803 (June 10, 

2021). DOE did not receive any 

comments opposing the use of this 

design option, and considered it for the 

engineering analysis for this final 

determination. 

C. Engineering Analysis 

The purpose of the engineering 

analysis is to establish the relationship 

between the efficiency and cost of 

UFHWSTs at different levels of reduced 

heat loss (‘‘efficiency levels’’).8 There 

are typically two elements to consider 

in the engineering analysis; the 

selection of efficiency levels to analyze 

(i.e., the ‘‘efficiency analysis’’) and the 

determination of equipment cost at each 

efficiency level (i.e., the ‘‘cost 

analysis’’). In determining the 

performance of higher-efficiency 

equipment, DOE considers technologies 

and design option combinations not 

eliminated by the screening analysis. 

DOE then typically estimates the 

baseline cost, as well as the incremental 

cost for the equipment at efficiency 

levels above the baseline, up to the maxtech efficiency level for each equipment 

class. The typical output of the 

engineering analysis is a set of costefficiency ‘‘curves’’ that are used in 

downstream analyses (i.e., the LCC and 

PBP analyses and the NIA). However, 

for the reasons discussed in section 

IV.C.3 of this document, the cost 

analysis was not performed for this final 

determination. 

1. Efficiency Analysis 

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). Using the 

efficiency-level approach, the efficiency 

levels established for the analysis are 

determined based on the market 

distribution of existing equipment (in 

other words, based on the range of 

efficiencies and efficiency level 

‘‘clusters’’ that already exist on the 

market, without regard to the specific 

design options used to achieve those 

levels). Using the design option 

approach, the efficiency levels 

established for the analysis are 

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. 

DOE may also rely on a combination of 

these two approaches. 

In the June 2021 NOPD, DOE adopted 

a design-option approach. DOE 

identified very few models of UFHWSTs 

on the market that are marketed with 

higher insulation levels than the current 

baseline requirement of R–12.5. 

However, as discussed later in this 

section, in the interim since the 

publication of the June 2021 NOPD, 

UFHWSTs have been certified in DOE’s 

CCD with R-values up to R–30. 

Therefore, for the current analysis, DOE 

is using the efficiency-level approach to 

determine the ‘‘max-tech’’ efficiency 

level as the maximum efficiency level 

available on the market. However, DOE 

is retaining the design-option approach 

for setting intermediate efficiency levels 

because of the limited range of R-values 

among UFHWSTs on the market 

between the baseline and max-tech. 

In response to the June 2021 NOPD, 

BWC commented that it is concerned 

about foam consistency and quality at 

thicknesses approaching or exceeding 3 

inches. BWC stated that it is difficult to 

ensure that the foam would evenly flow 

circumferentially, as well as vertically, 

on the tank given the size and many 

features on tanks. BWC asserted that 

this could ultimately compromise 

perceived efficiency improvements from 

increased foam thicknesses. (BWC, No. 

14 at p. 1) Similarly, Rheem recognized 

that some foam systems can provide 

higher R-values, but the commenter 

pointed out that there are variations 

with in-place foam properties, such as 

densities within the cavity from the top 

to the bottom of the tank, that will 

impact insulation performance. (Rheem, 

No. 15 at p. 2) Rheem suggested that 

applying more than 3 inches of 

polyurethane foam insulation to a 

jacketed tank is challenging and can 

lead to larger variation with in-place 

density and foam, which it stated would 

impact insulation quality and 

contributes to a decrease in R-values. 

Rheem also stated that R-values of 6.25 

per inch of insulation can be achieved 

with larger cavities but said that this is 

impractical and costly to manufacture, 

especially with the highly customized 

tanks and relatively small market 

production quantities for UFHWSTs. 

(Rheem, No. 15 at pp. 1–2) 

Rheem further stated that there are 

diminishing returns from increasing 

insulation thicknesses due to the 

increased surface area and heat transfer 

rate. (Rheem, No. 15 at p. 2). Similarly, 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31367 

9See: www.hotwater.com/water-heaters/ 

commercial/storage-tanks/jacketed---hpwhoptimized/ (Last accessed Feb. 21, 2022). 

A.O. Smith stated that in its experience, 

polyurethane foam insulation collapses 

when expanding in a cavity greater than 

3 inches (which in turn leads to 

increased heat loss). The commenter 

stated that it did experience greater 

reliability when exceeding 3 inches of 

thickness for polyurethane foam 

insulation by sequentially adding 

several layers of insulation but added 

that this process came at significant 

cost, including increased curing time, 

longer manufacturing times, as well as 

increased capital and labor. (A.O. 

Smith, No. 16 at p. 2) A.O. Smith also 

recommended that the Department 

engage with the U.S. Environmental 

Protection Agency (‘‘EPA’’) and industry 

moving forward regarding the efficacy of 

polyurethane foam properties, given 

evolving chemical regulations. (A.O. 

Smith, No. 16 at p. 2) 

Rheem and A.O. Smith also stated 

that they support the insulation 

thickness levels (up to 3 inches) as well 

as the R-value per inch (6.25) used in 

DOE’s analysis. (Rheem, No. 15 at p. 2; 

A.O. Smith, No. 16 at p. 2) 

For each equipment class, DOE 

generally selects a baseline model as a 

reference point for each class, and 

measures changes resulting from 

potential energy conservation standards 

against the baseline. The baseline model 

in each equipment class represents the 

characteristics of equipment typical of 

that class (e.g., capacity, physical size). 

Generally, a baseline model is one that 

just meets current energy conservation 

standards, or, if no standards are in 

place, the baseline is typically the most 

common or least efficient unit on the 

market. 

Based on its review of publiclyavailable equipment information and 

feedback from manufacturers, DOE 

found that 2 inches of polyurethane 

foam insulation provides a level of 

insulation that meets the current 

insulation requirement, and DOE, 

therefore, considered this insulation 

thickness as the baseline. As discussed 

in section IV.B.2 of this document, 

increased polyurethane foam insulation 

thickness was the only technology 

option that was not screened-out for this 

analysis, and thus, DOE considered 

more-stringent efficiency levels (i.e., 

increased R-value) based on varying 

levels of increased polyurethane foam 

thickness. As discussed in the June 2021 

NOPD, based on feedback from 

manufacturers and its own review of the 

UFHWST market, improvement in Rvalue as insulation thickness increases 

beyond 3 inches for jacketed tanks is 

unclear due to the lack of models on the 

market with thicker insulation and 

manufacturers’ feedback that increasing 

thickness beyond 3 inches is 

impractical. Therefore, DOE limited its 

analysis in the June 2021 NOPD to 

considering only up to 1 additional inch 

of insulation thickness above the 

baseline insulation level of 2 inches 

(i.e., 3 inches of foam insulation was 

considered the max-tech efficiency level 

for UFHWSTs). 86 FR 30796, 30804 

(June 10, 2021). 

As noted, UFHWSTs are currently 

certified in DOE’s CCD with insulation 

R-values up to R–30. From a review of 

product literature,9 DOE found that 

these products are insulated with 

polyurethane foam and have a stated 

insulation thickness of 5 inches. Based 

on the presence of these UFHWSTs on 

the market and their represented Rvalue, DOE updated its analysis from 

the June 2021 NOPR to use R–30 as the 

max-tech level, as this level of 

insulation has now been demonstrated 

to be technologically feasible. 

In response to manufacturer concerns 

that insulation levels beyond 3 inches 

would be difficult or impossible to 

achieve, DOE notes that such products 

are now on the market, demonstrating 

that they are feasible to manufacture. 

Therefore, DOE has concluded that the 

R–30 level is appropriate for 

consideration in this analysis. The 

conversion costs to produce higher 

levels of insulation would typically be 

accounted for in the MIA. However, as 

discussed in section III.E.1 of this 

document, DOE did not complete an 

MIA for this analysis because DOE is 

not amending standards for UFHWSTs. 

Similarly, in response to A.O. Smith’s 

suggestion that DOE engage with the 

EPA and industry moving forward 

regarding the efficacy of polyurethane 

foam properties given ever evolving 

chemical regulations, DOE notes that it 

is not amending standards for 

UFHWSTs in this final determination 

but will consider the impact of chemical 

regulations of foam efficacy in future 

rulemakings. 

For the evaluated insulation at a 

thickness less than the R–30 max-tech 

level, DOE estimated an R-value per 

inch of 6.25 because UFHWSTs are 

typically capable of achieving R–12.5 

using 2 inches of insulation. For the 

max-tech level, DOE estimated an Rvalue per inch of 6.00 based on the 

certified R-value and the insulation 

thickness specified in manufacturer 

literature, which represents the 

insulation properties demonstrated in 

the current tanks. The reduction in Rvalue per inch of insulation seen in 

units with increased insulation 

thickness illustrates the uncertainty 

associated with improvements in Rvalue as jacket thickness increases. This 

reduction in R-value at higher 

thicknesses of insulation is also 

consistent with feedback from 

manufacturers that the R-value per inch 

of polyurethane foam insulation would 

be uncertain at thicknesses greater than 

3 inches. (See discussion of comments 

received earlier in this section.) 

DOE included this updated max-tech 

efficiency level in its analysis in 

addition to the two efficiency levels 

considered in the June 2021 NOPD: R– 

15.625 and R–18.75, which correspond 

to 2.5 and 3 inches of polyurethane 

foam insulation, respectively. DOE did 

not receive any comments in response 

to the June 2021 NOPD suggesting that 

the efficiency levels previously 

analyzed should be adjusted, and did 

not identify any information that would 

support adjusting the insulation 

thickness or the assumed R-value per 

inch at those levels. The efficiency 

levels used in the analysis for this final 

determination are shown in Table IV.1. 

TABLE IV.1—EFFICIENCY LEVELS FOR REPRESENTATIVE UFHWSTS BASED ON INCREASED INSULATION

Efficiency level Insulation thickness (polyurethane foam) 

R-value per 

inch of 

insulation 

R-value of insulation 

Baseline—EL0 ......................................... 2 inches ................................................... 6.25 R–12.5. 

EL1 .......................................................... 2.5 inches ................................................ 6.25 R–15.625. 

EL2 .......................................................... 3 inches ................................................... 6.25 R–18.75. 

EL3 .......................................................... 5 inches ................................................... 6.0 R–30. 


jspears on DSK121TN23PROD with RULES1
31368 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

2. Representative Equipment for 

Analysis 

For the engineering analysis, DOE 

analyzed the publicly-available details, 

including storage volumes and other 

critical features, of UFHWST models 

available on the market to determine 

appropriate representative equipment to 

analyze. DOE also discussed the 

appropriate representative 

characteristics with UFHWST 

manufacturers during interviews. For 

the June 2021 NOPD, DOE determined 

the dimensions in Table IV.2 to be 

representative of the UFHWST market. 

TABLE IV.2—REPRESENTATIVE TANK CHARACTERISTICS USED IN THE JUNE 2021 NOPD 

Volume range Representative 

volume (gal.) 

Representative 

dimensions 

Height (in.) Diameter (in.) 

0 to 100 ........................................................................................................................................ 50 47 22 

101 to 250 .................................................................................................................................... 175 65 28 

251 to 500 .................................................................................................................................... 375 72 42 

501 to 1000 .................................................................................................................................. 750 141 42 

1,001 to 2,000 .............................................................................................................................. 1,500 124 60 

2,001 to 5,000 .............................................................................................................................. 3,500 168 84 

>5,000 .......................................................................................................................................... 5,000 180 96 

In response to the June 2021 NOPD, 

A.O. Smith suggested alternative 

dimensions for several representative 

tank sizes. Specifically, it recommended 

a height of 34 inches and a diameter of 

24 inches for a 50-gallon tank, a height 

of 87 inches and a diameter of 36 inches 

for a 375-gallon tank, a height of 100 

inches and a diameter of 48 inches for 

a 750-gallon tank, a height of 204 inches 

and a diameter of 72 inches for a 3,500- 

gallon tank, and a height of 283 inches 

and a diameter of 72 inches for a 5,000- 

gallon tank. A.O. Smith also suggested 

that tanks of 3,500 and 5,000 gallons 

should be installed horizontally. (A.O. 

Smith, No. 16 at p. 3) 

Rheem recommended that an 80- 

gallon tank be used instead of a 50- 

gallon tank to represent tanks in the 0 

to 100 gallon volume range, because this 

volume would better represent 

commercial applications as the 

predominant installation size. Rheem 

suggested that 50 gallons is more 

representative of light commercial and 

some residential applications. (Rheem, 

No. 15 at p. 2) After further reviewing 

UFHWSTs on the market between 0 and 

100 gallons, DOE agrees with this 

comment and changed the 

representative size for this volume range 

to 80 gallons in the analysis for this 

final determination. 

Rheem also suggested that the 

diameter and height for an 80-gallon 

tank should be 24 inches and 58 inches, 

respectively, and suggested that the 

dimensions of the 175-gallon tank 

should be 67 inches in height and 32 

inches in diameter. (Rheem, No. 15 at p. 

2) Based on a review of manufacturer 

specification sheets for 80-gallon 

models on the market, DOE agrees that 

Rheem’s suggested dimensions for the 

80-gallon tank are appropriate and has 

updated its representative dimensions 

for this final determination accordingly. 

However, based on review of the 

manufacturer specification sheets for 

other sizes of UFHWSTs on the market, 

DOE did not conclude that the 

representative dimensions used for 

other volumes of tanks should be 

changed. These dimensions were 

determined based on DOE’s review of 

the entire market, as well as feedback 

from manufacturers during 

manufacturer interviews. 

In the June 2021 NOPD, DOE 

acknowledged comments regarding the 

customized and variable nature of the 

UFHWST market. 86 FR 30796, 30804 

(June 10, 2021). To account for the wide 

range of UFHWSTs on the market, DOE 

chose several representative baseline 

units for analysis. DOE also included 

several ambient temperature conditions 

in its energy use analysis to reflect 

typical installation locations (i.e., 

indoors in mechanical rooms or 

outdoors in ‘‘Very Hot’’ and ‘‘Hot’’ 

regions). DOE also noted that UFHWSTs 

can be installed in either a vertical or 

horizontal orientation. As discussed in 

section IV.D.1.b of this document, for 

the energy use analysis, DOE employed 

a conservative assumption that a tank 

would always be full of hot water and, 

therefore, did not consider stratification 

of water temperature inside the tank. 

Under this assumption, installation 

orientation would not have a significant 

impact on its energy use analysis 

results. As such, DOE included only 

vertically-oriented units (which are the 

most common) in the representative 

equipment analyzed. In light of these 

considerations, the characteristics of the 

representative units evaluated 

(including the change to an 80 gallon 

unit for the 0–100 gallon range) are 

listed in Table IV.3. 

TABLE IV.3—REPRESENTATIVE TANK CHARACTERISTICS USED IN THE FINAL DETERMINATION

Volume range 

Representative 

volume 

(gal.) 

Representative dimensions 

Height 

(in.) 

Diameter 

(in.) 

0 to 100 ........................................................................................................................................ 80 58 20 

101 to 250 .................................................................................................................................... 175 65 28 

251 to 500 .................................................................................................................................... 375 72 42 

501 to 1,000 ................................................................................................................................. 750 141 42 

1,001 to 2,000 .............................................................................................................................. 1,500 124 60 

2,001 to 5,000 .............................................................................................................................. 3,500 168 84 

>5,000 .......................................................................................................................................... 5,000 180 96 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31369 

10Available at: www.regulations.gov/

document?D=EERE-2014-BT-STD-0042=0016, 

section 5.5.3 (Last accessed: April 8, 2020). 

3. Cost Analysis 

The cost analysis portion of the 

engineering analysis is conducted using 

one or a combination of cost 

approaches. The selection of cost 

approach depends on a suite of factors, 

including the availability and reliability 

of public information, characteristics of 

the regulated equipment, the availability 

and timeliness of purchasing the 

equipment on the market. The cost 

approaches are summarized as follows: 

• Physical teardowns: Under this 

approach, DOE physically dismantles 

commercially-available equipment, 

component-by-component, to develop a 

detailed bill of materials for the 

equipment. 

• Catalog teardowns: In lieu of 

physically deconstructing equipment, 

DOE identifies each component using 

parts diagrams (available from sources 

such as manufacturer websites or 

appliance repair websites) to develop 

the bill of materials for the equipment. 

• Price surveys: If neither a physical 

nor catalog teardown is feasible (e.g., for 

tightly integrated products such as 

fluorescent lamps, which are infeasible 

to disassemble and for which parts 

diagrams are unavailable), costprohibitive, or otherwise impractical 

(e.g., large commercial boilers), DOE 

conducts price surveys using publiclyavailable pricing data published on 

major online retailer websites and/or by 

soliciting prices from distributors and 

other commercial channels. 

As discussed in section IV.E of this 

document, DOE did not conduct a cost 

analysis because DOE did not have the 

requisite inputs to develop its LCC 

model with a degree of certainty that 

would meet the statute’s ‘‘clear and 

convincing’’ evidentiary threshold. 

Accordingly, DOE did not generate a 

cost-efficiency curve, as it would not be 

necessary without an LCC model to feed 

into. 

D. Energy Use Analysis 

The purpose of the energy use 

analysis is to determine the annual 

energy consumption of UFHWSTs at 

different efficiencies in representative 

U.S. commercial buildings and 

industrial facilities, and to assess the 

energy savings potential of increased 

UFHWST efficiency. The energy use 

analysis estimates the range of energy 

use of UFHWSTs in the field (i.e., as 

they are actually used by consumers). 

The energy use analysis provides the 

basis for other analyses DOE performed, 

particularly assessment of the energy 

savings that could result from adoption 

of amended or new standards. 

As discussed, UFHWSTs store hot 

water and do not directly consume fuel 

or electricity for the purpose of heating 

water, so any potential amendments to 

the standard would reduce standby loss 

of heat from the stored water. Further, 

DOE currently only prescribes a 

minimum insulation requirement (as 

opposed to a minimum efficiency 

requirement) for UFHWSTs. 

Accordingly, the energy use analysis 

determines the annual energy 

consumption of paired water heaters 

and boilers due to standby loss of the 

UFHWSTs and assesses the energy 

savings potential of increasing the 

stringency of the required insulation for 

UFHWSTs. 

1. Tank Thermal Loss Model 

As discussed in the June 2021 NOPD, 

for this determination, DOE adapted the 

thermal loss model described in the 

technical support document (‘‘TSD’’) for 

the commercial water heating (‘‘CWH’’) 

energy conservation standards (‘‘ECS’’) 

NOPR published in the Federal Register 

on May 31, 2016 (81 FR 34440; ‘‘May 

2016 CWH ECS NOPR’’), with some 

modifications to how the tank surface 

areas are defined.10 86 FR 30796, 30806 

(June 10, 2021). These modifications 

were introduced to capture equipment 

performance that results from 

differences in surface insulation 

thickness over different areas of the tank 

(i.e., insulation around fittings and 

access ports). These differences are 

described in section IV.D.1.a of this 

document. 

DOE received comment from both the 

CA IOUs and Rheem on its energy use 

analysis. The CA IOUs suggested that 

DOE should find alternative methods to 

analyze the energy consumption of 

UFHWSTs or solicit assistance from 

stakeholders because, they stated that 

the challenges of evaluating the impacts 

and feasibility of energy efficiency 

standards for UFHWSTs should not 

prompt DOE to forego updating those 

standards. (CA IOUs, No. 17 at p. 4) In 

contrast, Rheem stated that the Tank 

Thermal Loss Model was appropriate for 

this analysis. (Rheem, No. 15 at p. 3) 

DOE did not receive any further specific 

input or information from stakeholders 

on its Tank Thermal Loss Model. After 

again considering the available 

information, DOE did not identify 

alternative models appropriate for the 

analysis conducted for this 

determination. Accordingly, DOE has 

elected to maintain its modeling 

approach for this final determination. 

Where: 

Qhr, j = The hourly heat loss for the UFHWST 

for each efficiency level j (Btu/hr). 

i = The surface area of the cylindrical tank 

is divided into different zones each 

indexed i. 

Ai, j = The area of each zone i at each 

efficiency level j (ft2). 

Ti = The constant internal water temperature 

for each tank zone i (°F). 

Tamb,z = The ambient air temperature for each 

climate zone z (°F). 

Ri, j = The net R-value of the insulation for 

each zone i at each efficiency level j (°F 

· ft2 · hr/Btu). 

a. Tank Surface Area (Ai, j) 

DOE maintained the approach it used 

in the June 2021 NOPD for this final 

determination, where DOE used a 

conservative assumption in its energy 

use analysis that water temperature 

would remain uniformly at 140 °F and 

did not consider stratification of water 

temperatures inside the tank. 86 FR 

30796, 30806 (June 10, 2021). Therefore, 

although tanks can be installed 

horizontally or vertically, there is no 

difference in thermal losses between 

these configurations, and DOE only 

used vertical tanks in its analysis. The 

UFHWST’s total external surface area 

was divided into separate zones, where 

i is the index for each zone. Zones 

represent the different areas of an 

UFHWST that would have unique 

insulative values. 

ATankTop = When the UFHWST is oriented 

vertically, this represents the tank’s top 

surface. 

AFittings = Is the sum of all uninsulated areas 

of the tank’s surface devoted to fittings. 

AFittingInsulation = Is the sum of all insulated 

areas of the tank’s surface surrounding 

the (uninsulated) fittings. 

AAccessPort = Is the sum of all insulated areas 

of the tank’s surface devoted to the tank’s 

clean-out hand hole port or manhole. 

ATankWall = When the UFHWST is oriented 

vertically, this represents the tank’s 

walls. 

ATankBottom = When the UFHWST is oriented 

vertically, this represents the tank’s 

bottom surface. 

In response to the June 2021 NOPD, 

A.O. Smith stated that it has not 

conducted any tests to validate DOE’s 

Tank Thermal Loss Model but 

recommended that any tests conducted 

to validate the Tank Thermal Loss 

Model must include an uninsulated 

temperature and pressure relief valve 

installed in a fitting in the top 6 inches 

of the tank. The commenter stated that 

a temperature and pressure relief valve 

is a mandatory safety device that will be 

installed on each UFHWST and is not 


jspears on DSK121TN23PROD with RULES1ER24MY22.007</GPH>
31370 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

11Presently, the 2018 edition of CBECs is the 

most recent version. Energy Information 

Administration (EIA), 2018 Commercial Building 

Energy Consumption Survey (CBECS) (Available at: 

www.eia.gov/consumption/commercial/) (Last 

accessed Feb. 10, 2021). 

12Energy Information Administration (EIA), 2012 

Commercial Building Energy Consumption Survey 

(CBECS) (Available at: https://www.eia.gov/ 

consumption/commercial/) (Last accessed April 4, 

2019). 

permitted by most applicable safety 

codes to be covered. (A.O. Smith, No. 16 

at p. 4) In response and as discussed in 

this section, DOE’s Tank Thermal Loss 

Model accounts for small areas of 

uninsulated tank to reflect losses 

through adjoining pipes or fittings at 

each of several ports. DOE maintained 

the quantity of uninsulated ports that 

were discussed in the June 2021 NOPD, 

which specifically included reference to 

a temperature and pressure relief valve. 

86 FR 30796, 30805 (June 10, 2021). 

b. Tank Internal Water Temperature (Ti) 

For the June 2021 NOPD analysis, 

DOE assumed that the water inside the 

UFHWSTs is at a constant uniform 

temperature of 140 °F, which is the 

average water temperature required by 

the current Federal test procedures for 

storage-type CWH equipment during 

standby loss testing. 86 FR 30796, 30806 

(June 10, 2021). (See generally 10 CFR 

431.106; 10 CFR part 431, subpart G, 

appendix A, section 6; 10 CFR part 431, 

subpart G, appendix B, section 5.) 

Because UFHWSTs serve the same 

function as storage-type CWH 

equipment in standby mode, DOE 

reasoned that similar conditions would 

be appropriate for UFHWSTs as for 

storage-type CWH equipment in standby 

mode. Id. DOE used a conservative 

assumption that internal water 

temperatures would remain indefinitely 

at 140 °F. In reality, the rate of heat loss 

from a UFHWST would decrease slowly 

as the temperature difference between 

the internal stored water and the 

ambient air decreased. However, 

because this effect would be minimal, 

DOE did not consider stratification of 

water temperatures inside the tank and 

assumed that a tank would always be 

full of hot water. Therefore, DOE held 

the temperature T constant across all 

tank zones i. Id. 

DOE received comments from a 

number of stakeholders regarding the 

assumed constant internal water 

temperature of 140 °F. The CA IOUs 

commented that many common 

commercial hot water applications 

require temperatures higher than 140 °F 

and stated that the Centers for Disease 

Control and Prevention notes in its 

Environmental Infection Control 

Guidelines that a temperature of 160 °F 

is recommended for clothes washing in 

healthcare facilities. (CA IOUs, No. 17 at 

p. 2) 

Rheem stated that typical storage 

water temperatures are between 120 °F 

and 180 °F for food service, laundry, and 

commercial building applications or 

between 120 °F and 130 °F for 

commercial buildings not requiring 

sanitation. Rheem stated that a constant 

internal tank temperature of 140 °F is an 

appropriate estimate for the purposes of 

DOE’s analysis. (Rheem, No. 15 at p. 2) 

A.O. Smith stated that it agrees with 

DOE’s use of 140 °F as a constant 

internal water temperature. (A.O. Smith, 

No. 16 at p. 3) 

Given the wide range of temperatures 

provided by stakeholders above and 

below DOE’s assumed internal 

temperature, DOE finds the 140 °F to be 

reasonably representative of UFHWST 

use in the field. The 140 °F is within the 

range of temperatures suggested by 

commenters. The data sources examined 

by DOE (i.e., recent versions of the 

Commercial Building Energy 

Consumption Survey (‘‘CBECS’’)),11 12

while containing information on 

primary business activity, do not 

contain information from which to infer 

an average internal tank water 

temperature. Additionally, commenters 

did not provide data in terms of 

percentage of applications at which the 

various internal temperatures are 

realized. As such, DOE maintained its 

use of 140 °F for this final 

determination. 

c. Tank Ambient Temperature (Tamb, z) 

For the June 2021 NOPD, DOE 

assumed that all tanks that are installed 

indoors would have a constant ambient 

temperature of 75 °F, which is the 

average air temperature specified by the 

current Federal test procedure for 

storage-type CWH equipment during 

standby loss testing. 86 FR 30796, 30806 

(June 10, 2021). See generally 10 CFR 

431.106; 10 CFR part 431, subpart G, 

appendix A, section 6; 10 CFR part 431, 

subpart G, appendix B, section 5. 

Both Rheem and A.O. Smith 

commented on DOE’s assumed use of 

75 °F as the constant average ambient 

temperature. Rheem supported the 

ambient temperature of 75 °F used as a 

representative value for indoor 

installations. (Rheem, No. 15 at p. 3) In 

contrast, A.O. Smith suggested that 

78 °F would be more accurate for indoor 

ambient temperatures. (A.O. Smith, No. 

16 at p. 3) 

In response, DOE understands that 

indoor ambient temperatures seen in the 

field will be a distribution of values 

depending on the location of the 

UFHWST within the building and that 

this location may be conditioned to a 

temperature other than 75 °F, or not 

conditioned at all. As discussed, 

UFHWSTs serve the same function as 

storage-type CWH equipment in standby 

mode, and DOE expects that similar 

conditions would be appropriate for 

UFHWSTs as for storage-type CWH 

equipment in standby mode. For the 

purpose of this simplified energy 

savings estimate for this final 

determination, DOE finds that the use of 

the 75 °F applicable under the CWH test 

procedure is appropriately 

representative for UFHWSTs. 

DOE notes that A.O. Smith did not 

provide a basis for its suggestion to test 

at 78 °F, which would increase the 

ambient air temperature as compared to 

the current DOE test procedure. 

Increasing the ambient temperature 

would lower the temperature 

differential between the UFHWST’s 

internal and ambient temperature, 

thereby reducing the projected potential 

energy savings. Given the 

unsubstantiated nature of A.O. Smith’s 

comment and for the reasons discussed, 

DOE maintained its use of 75 °F as the 

indoor constant ambient temperature for 

this final determination. 

As stated in the June 2021 NOPD, 

based on feedback from manufacturers 

during interviews conducted under 

NDA, DOE assumed that 90 percent of 

UFHWSTs would be installed indoors 

and that the remaining 10 percent 

would be installed outdoors. 86 FR 

30796, 30806 (June 10, 2021). 

Rheem agreed with DOE’s assumption 

that 10 percent of all UFHWSTs are 

installed outdoors. (Rheem, No. 15 at p. 

3) A.O. Smith suggested that the 

Department’s assumption that 10 

percent of all UFHWSTs are installed 

outdoors may be overstated. (A.O. 

Smith, No. 16 at p. 3) However, A.O. 

Smith did not provide a basis for its 

assertion and did not provide an 

alternate percentage to consider. Absent 

additional support for a different value, 

for this final determination, DOE 

maintained its assumption that 10 

percent of UFWHSTs are installed 

outdoors. 

A.O. Smith stated that outdoor tanks 

tend to be taller and have larger 

volumes than indoor tanks, but R-values 

are generally consistent with indoor 

tanks. (A.O. Smith, No. 16 at p. 3) 

Rheem stated that typical capacities 

used for outdoor applications include 

235, 335, 499, 534-gallon sizes; smaller 

tanks not specifically intended for 

outdoor installation may also be placed 

outside with applied weatherization; 

and outdoor models can have 2.5 to 3 

inches of spray foam insulation and be 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31371 

13The TMY data sets hold hourly values of solar 

radiation and meteorological elements for a 1-year 

period. Their intended use is for computer 

simulations of solar energy conversion systems and 

building systems to facilitate performance 

comparisons of different system types, 

configurations, and locations in the United States 

and its territories. Because they represent typical 

rather than extreme conditions, they are not suited 

for designing systems to meet the worst-case 

conditions occurring at a location. 

14Wilcox, S. and W. Marion, 2008 User’s Manual 

for TMY3 Data Sets, NREL/TP–581–43156 (April 

2008) (Available at: www.nrel.gov/docs/fy08osti/ 

43156.pdf) (Last accessed November 2021). 

15Building America Best Practices Series, 

Volume 7.3, Guide to determining climate regions 

by county 2015 (Available at: www.energy.gov/sites/ 

prod/files/2015/10/f27/ba_climate_region_guide_

7.3.pdf). 

16U.S. Census Population Estimates by County, as 

of 2018 (Available at: www.census.gov/data/tables/ 

time-series/demo/popest/2010s-countiestotal.html#par_textimage) (Last accessed April 1, 

2022). 

rated as high as R–16. (Rheem, No. 15 

at p. 3) 

Furthermore, Rheem stated that in 

addition to climate zones 1A, 2A, and 

2B, UFHWSTs are installed in some 

areas of climate zones 3 and 4. Rheem 

also stated that given indoor space 

constraints and rising construction 

costs, installation outdoors in colder 

climate zones with added pipe and 

fittings insulation and freeze protection 

is becoming more viable. (Rheem, No. 

15 at p. 3) 

For this final determination, for the 

fraction of UFHWSTs modeled as 

installed in outdoor spaces, or in nonconditioned spaces, DOE expanded the 

applicable climate zones (z) and 

calculated the monthly average 

temperatures from Typical 

Meteorological Year 3 (‘‘TMY3’’) 13 data 

for the Building America climate 

regions 1A, 2A, 2B, 3A, 3B, 3C, 4A, 4B, 

and 4C.14 15 The temperatures for each 

region are represented by the cities in 

Table IV.4. The monthly regional 

averages were then weighted using the 

regional city populations based on 2018 

Census data.16 Additionally, DOE 

revised its capacity weighting 

assumptions for outdoor installed tanks 

to account for the larger capacities 

described by both A.O. Smith and 

Rheem; these capacity weights are 

shown in Table IV.5. 

TABLE IV.4—CLIMATE ZONES AND REPRESENTATIVE CITIES

Climate zone Population Representative city TMY location 

# 

1A ......................................................................................................................................... 6,208,359 Miami .................... 722020 

2A ......................................................................................................................................... 38,418,718 Houston ................. 722430 

2B ......................................................................................................................................... 6,869,283 Phoenix ................. 722780 

3A ......................................................................................................................................... 43,230,951 Atlanta ................... 722190 

3B—CA ................................................................................................................................. 29,951,605 Los Angeles .......... 722950 

3B—Non CA ......................................................................................................................... 5,546,151 Las Vegas ............. 723677 

3C ......................................................................................................................................... 8,596,694 San Francisco ....... 724940 

4A ......................................................................................................................................... 69,154,015 Baltimore ............... 724060 

4B ......................................................................................................................................... 2,245,023 Albuquerque .......... 723650 

4C ......................................................................................................................................... 9,696,610 Seattle ................... 727930 

5A ......................................................................................................................................... 70,727,419 Chicago ................. 725300 

5B ......................................................................................................................................... 13,119,013 Boulder .................. 724699 

6A ......................................................................................................................................... 17,705,715 Minneapolis ........... 726580 

6B ......................................................................................................................................... 2,650,907 Helena ................... 727720 

7 ............................................................................................................................................ 2,625,239 Duluth .................... 727450 

8 ............................................................................................................................................ 170,286 Fairbanks .............. 702610 

TABLE IV.5—CAPACITY WEIGHTING OF INDOOR VERSUS OUTDOOR UFHWSTS

Capacity range 

(gal) 

Indoor 

weighting factor 

Outdoor 

weighting factor 

60 to 100 ...................................................................................................................................................... 0.05 0 

101 to 250 .................................................................................................................................................... 0.2 0.21 

251 to 500 .................................................................................................................................................... 0.3 0.32 

501 to 1000 .................................................................................................................................................. 0.2 0.21 

1001 to 2000 ................................................................................................................................................ 0.15 0.16 

2001 to 5000 ................................................................................................................................................ 0.09 0.09 

>5000 ........................................................................................................................................................... 0.01 0.01 

Table IV.6 provides the monthly 

average ambient temperature values, 

Tamb, z, for each of the Climate Zones 

considered in this final determination. 

TABLE IV.6—AVERAGE MONTHLY AMBIENT TEMPERATURES

Climate zone Location 

weight 

Average temperature for month 

(° F) 

1 2 3 4 5 6 7 8 9 10 11 12 

1A .............................................................................................. 0.028 67.0 69.6 70.8 75.4 79.5 81.8 82.6 82.4 81.5 79.4 74.5 68.5 

2A .............................................................................................. 0.175 50.9 55.0 61.2 68.9 75.3 80.6 82.9 82.8 79.6 68.6 62.8 54.6 

2B .............................................................................................. 0.031 55.4 60.2 63.2 74.6 81.1 93.2 96.0 92.9 86.7 76.7 64.3 53.1 

3A .............................................................................................. 0.197 39.1 46.3 56.8 63.0 69.5 76.6 78.9 79.8 72.5 60.8 53.5 45.9 

3B—CA ..................................................................................... 0.136 56.7 57.6 58.2 60.4 62.6 64.7 67.8 68.1 67.7 64.7 61.2 57.8 

3B—Non CA .............................................................................. 0.025 37.6 37.6 40.6 53.4 58.9 65.1 68.6 66.0 63.6 50.5 40.3 34.5 


jspears on DSK121TN23PROD with RULES1
31372 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

17The projected value for Boiler Efficiency 

(Boilern) is 0.922 in 2027. See section IV.G.4 of this 

document for more details. 

TABLE IV.6—AVERAGE MONTHLY AMBIENT TEMPERATURES—Continued 

Climate zone Location 

weight 

Average temperature for month 

(° F) 

1 2 3 4 5 6 7 8 9 10 11 12 

3C .............................................................................................. 0.039 49.3 52.3 54.8 56.6 59.0 59.6 60.7 61.9 62.1 59.2 55.0 51.2 

4A .............................................................................................. 0.314 31.1 36.0 46.4 55.7 65.0 73.3 77.6 75.7 68.8 54.8 48.0 35.7 

4B .............................................................................................. 0.010 36.7 39.7 47.8 57.0 64.1 73.8 78.1 75.3 68.9 56.7 44.5 35.7 

4C .............................................................................................. 0.044 40.1 42.5 47.0 51.5 55.4 60.1 63.8 65.8 59.2 52.6 46.5 41.8 

Indoor ........................................................................................ 0.90 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 

d. R-Value of Insulation (Ri, j) 

The R-value of each zone i of the 

UFHWST is defined for each efficiency 

level j in the engineering analysis in 

Table IV.1 and Table IV.3 of section 

IV.C of this document. 

2. Annual Energy Use Due to UFHWST 

Losses 

To calculate the energy used by the 

boiler attributable to the heat losses of 

the UFHWSTs, DOE maintained the 

approach from the June 2021 NOPD and 

used the following equation for each 

efficiency level listed in Table IV.1: 

Where: 

eBoilj = The energy by the boiler required to 

maintain the water temperature in the 

UFHWST at the temperature Ti at each 

efficiency level j, (Btu/yr), 

Qhr, j = hourly heat loss for the UFHWST at 

each efficiency level j (see section IV.D.1, 

of this document) (Btu/hr), and 

Boilerh = average boiler efficiency (%) in 

year yr (defined in section IV.G.4 of this 

document). 

Table IV.7 presents the energy used 

by the boiler attributable to the heat 

losses of the UFHWST at the baseline 

(EL 0) and each efficiency level by tank 

capacity. Table IV.8 presents the 

resulting energy savings at each 

efficiency level above baseline. The 

representative storage volumes used in 

this analysis are discussed in section 

IV.C.2 of this document. 

DOE did not receive any comment 

regarding annual energy use due to 

UFHWST losses and maintained its 

approach from the June 2021 NOPD for 

this final determination. 

TABLE IV.7—BOILER ENERGY USE DUE TO UFHWST HEAT LOSSES IN 2025 

[MMBtu/yr] 17

EL 

UFHWST capacity (gal) 

80 175 375 750 1,500 3,500 5,000 

0 ........................................................................................... 2.28 3.42 5.56 9.79 12.82 22.53 27.48 

1 ........................................................................................... 2.00 2.94 4.70 8.35 10.80 18.67 22.68 

2 ........................................................................................... 1.82 2.63 4.13 7.39 9.46 16.10 19.48 

3 ........................................................................................... 1.48 2.03 3.01 5.49 6.81 10.99 13.10 

TABLE IV—8 SAVINGS IN BOILER ENERGY USE DUE TO REDUCED UFHWST HEAT LOSSES IN 2025 

[MMBtu/yr] 

EL 

UFHWST capacity (gal) 

80 175 375 750 1,500 3,500 5,000 

1 ........................................................................................... 0.28 0.47 0.86 1.45 2.01 3.85 4.80 

2 ........................................................................................... 0.46 0.79 1.43 2.41 3.35 6.42 8.00 

3 ........................................................................................... 0.81 1.39 2.54 4.30 6.01 11.53 14.38 

3. Additional Sources of Uncertainty 

As discussed in section IV.C.2 of this 

document, the inputs to DOE’s Tank 

Thermal Loss Model were primarily 

based on publicly-available information, 

DOE’s previous knowledge of 

UFHWSTs, and feedback from 

manufacturers received during 

interviews conducted under NDAs. To 

validate the model, DOE compared the 

results produced by the model to results 

of testing previously conducted to 

evaluate the performance-based test 

procedure proposed for UFHWSTs in 

the May 2016 CWH TP NOPR, which 

was largely based on the standby loss 

test procedure for commercial storage 

water heaters. The proposed test 

procedure included a standby loss test 

that would be conducted as the mean 

tank water temperatures decay from 

142 °F to 138 °F at a nominal ambient 

temperature of 75 °F. 81 FR 28588, 

28603 (May 9, 2016). Standby loss tests 

were conducted on 17 UFHWSTs with 

an advertised insulation level of R–12.5 


jspears on DSK121TN23PROD with RULES1ER24MY22.008</GPH>
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31373 

and storage volumes of 40, 80, or 120 

gallons in order to gather data on 

whether measured standby losses were 

consistent with what would be expected 

from tanks insulated to their rated and/ 

or advertised insulation levels, to assess 

the repeatability and sensitivity of the 

proposed test procedure, and to gather 

data on the potential burden in 

conducting the testing. 

DOE used the same analytical model 

described in this section to calculate the 

expected losses from each of these 

tanks, using their measured dimensions 

and actual number of ports. As 

discussed, the internal water 

temperature (140 °F) and ambient air 

temperature (75 °F) used for the 

analytical model were the same as the 

average temperatures seen during the 

physical testing. The same assumptions 

about insulation details (e.g., R-values 

for different materials and the use of 

fiberglass around ports) were used as 

were used for the baseline (R–12.5) 

units in DOE’s Tank Thermal Loss 

Model. The average predicted rate of 

standby losses for these tanks was 73 

percent of the measured standby losses 

and ranged from as low as 58 percent of 

the measured losses up to 90 percent of 

the measured losses. Because the 

estimated standby losses are 

significantly lower than the measured 

losses, this suggests that DOE’s Tank 

Thermal Loss Model undercounts the 

actual standby losses that would occur 

in the field. Furthermore, the wide 

range in calculated standby losses as 

compared to measured standby losses 

indicates that the accuracy of the 

thermal loss calculations in predicting 

the standby losses of a particular model 

will be somewhat unpredictable, 

thereby adding additional uncertainty. 

Furthermore, when DOE conducted 

standby loss tests of UFHWSTs, it found 

that tanks with identical storage 

volumes, dimensions, number of ports, 

and nominal insulation levels differed 

by up to 8.5 percent, whereas DOE’s 

model would predict the same level of 

standby losses for these tanks. This 

finding suggests that there may be 

variations in the extent of R–12.5 

coverage between units, even between 

units from the same manufacturer. As 

discussed in section IV.C.2 of this 

document, it may not be practical to 

insulate all surfaces of UFHWSTs with 

polyurethane foam due to the nature of 

the insulation application process or the 

need to retain access to certain ports. 

Differences in manufacturers’ tank 

designs, manufacturing processes, or 

their interpretations of the R–12.5 

insulation requirement could lead to 

variations in the amount of tank surface 

area that is actually insulated with R– 

12.5. Therefore, tanks that appear to 

have the same attributes and insulation 

may have different levels of standby 

losses in the field. This source of 

potential variation in standby losses 

further supports DOE’s conclusion that 

there may be additional sources of 

thermal losses that vary between tanks 

and that are not adequately captured in 

its current Tank Thermal Loss Model. 

This variation also makes it very 

difficult for DOE to characterize the 

representative performance of a 

‘‘baseline’’ UFHWST, or the expected 

performance at any potential amended 

standard level, with a high degree of 

confidence since there is significant 

variation in thermal energy losses at a 

given efficiency level (R-value) that 

cannot be readily predicted or otherwise 

accounted for in the analysis. Due to 

these potential variations in insulation 

coverage and because DOE has not been 

able to verify its Tank Thermal Loss 

Model against its physical test results, 

there is significant uncertainty as to the 

validity of its energy use analysis. 

E. Life-Cycle Cost and Payback Period 

Analysis 

To determine whether a standard is 

economically justified, EPCA requires 

DOE to consider the economic impact of 

the standard on manufacturers and 

consumers, as well as the savings in 

operating costs throughout the 

estimated average life of the equipment 

compared to any increase in price, 

initial charges, or maintenance expenses 

of the equipment likely to result from 

the standard. (42 U.S.C. 

6313(a)(6)(B)(ii)(I)–(II)) The effect of 

new or amended energy conservation 

standards on individual consumers 

usually involves a reduction in 

operating cost and an increase in 

purchase cost. To evaluate the economic 

impacts of potential energy conservation 

standards on consumers, in order to 

determine whether amended standards 

would be economically justified, DOE 

used the following two metrics to 

measure consumer impacts: 

• The LCC is the total consumer 

expense of an appliance or equipment 

over the life of that equipment, 

consisting of total installed cost 

(manufacturer selling price, distribution 

chain markups, sales tax, and 

installation costs) plus operating costs 

(expenses for energy use, maintenance, 

and repair). To compute the operating 

costs, DOE discounts future operating 

costs to the time of purchase and sums 

them over the lifetime of the equipment. 

• The PBP is the estimated amount of 

time (in years) it takes consumers to 

recover the increased purchase cost 

(including installation) of more-efficient 

equipment through lower operating 

costs. DOE calculates the PBP by 

dividing the change in purchase cost at 

higher efficiency levels by the change in 

annual operating cost for the year that 

amended or new standards are assumed 

to take effect. 

For any given efficiency level, DOE 

measures the change in LCC relative to 

the LCC in the no-new-standards case, 

which reflects the estimated efficiency 

distribution of UFHWSTs in the absence 

of new or amended energy conservation 

standards. In contrast, the PBP for a 

given efficiency level is measured 

relative to the baseline equipment. 

1. Installation Cost 

Installation cost includes labor, 

overhead, and any miscellaneous 

materials and parts needed to install the 

equipment. In the June 2021 NOPD, 

DOE qualitatively examined certain 

factors that can impact the installation 

costs of UFHWST. 86 FR 80796, 80809– 

80810 (June 10, 2021). DOE 

acknowledged that that increasing 

installation costs can reduce, or even 

eliminate, the future economic 

consumer benefits from a potential new 

standard. Id. at 86 FR 80810. DOE 

tentatively agreed with the commenters 

that a small increase in tank 

dimensions, a change driven by the 

need to comply with a potential new 

standard case, could potentially 

disproportionately increase the 

installation costs for a fraction of 

consumers of replacement equipment. 

Id. DOE stated that while the fraction of 

impacted consumers is uncertain, DOE 

is certain that there will be some 

consumers who will experience these 

higher installation costs. Id. DOE further 

stated that these higher installation 

costs for replacement equipment create 

uncertainty regarding the positive 

economic benefits for a potentially 

significant fraction of consumers from 

an amended standard for UFHWSTs. Id. 

In response to the June 2021 NOPD, 

DOE received comments regarding 

information related to costs resulting 

from building modifications due to 

increased equipment size. A.O. Smith 

stated that the primary consideration of 

the designing/specifying engineer when 

replacing a UFHWST is the required 

storage volume and frequency of hot 

water demand for the building/ 

application. From there, an installation 

recommendation is made based upon 

constraints, including, but not limited 

to, doorways and passageways that can 

accommodate the installation of one or 

more new UFHWSTs. (A.O. Smith, No. 

16 at p. 5) Rheem suggested that an 

increase in the overall dimensions, 

especially the diameter of UFHWST due 


jspears on DSK121TN23PROD with RULES1
31374 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

18U.S. Energy Information Administration, 

Residential Energy Consumption Survey 2015 

(RECS), as published in 2018. 

to increased insulation thickness, could 

require modifications to existing 

doorways or mechanical rooms. Rheem 

stated that an increase in the overall 

dimensions of UFHWSTs would require 

additional space for installation, along 

with higher cost for transportation and 

handling of the tank until it reaches its 

final location. (Rheem, No. 16 at p. 3) 

Both A.O. Smith and Rheem agreed that 

the costs will vary substantially 

depending on the tank size, building 

type, and whether it is going to new 

construction or a replacement 

installation. Rheem commented that for 

new construction, the UFHWST 

installation can be better planned and 

located during the construction process, 

but future replacement will still present 

challenges. Rheem further commented 

that there are several requirements to 

consider in determining if restructuring 

a building is cost-effective or 

appropriate for a given installation and 

building, including compliance with 

building, mechanical, plumbing, and 

local codes and manufacturer’s 

instructions. Rheem stated that 

installing floor tie downs, modifying 

fire-rated doorways and interior passage 

doors, and changing exit routes in a 

building are some examples of codesrelated considerations. (Rheem, No. 15 

at pp. 3–4; A.O. Smith, No. 16 at p. 4) 

Finally, A.O. Smith suggested that 

buildings associated with municipal, 

university, school, and hospital 

(‘‘MUSH’’) facilities will typically have 

equipment/mechanical rooms, and 

access thereto, that can accommodate 

the installation of UFHWSTs of slightly 

different sizes, including ones with 

modest increases in dimensions. In the 

commenter’s experience, the more 

challenging installations are ones 

associated with ‘‘high-rise buildings’’ 

and historic buildings, in both urban 

and rural areas; according to A.O. 

Smith, these buildings often have 

equipment/mechanical rooms in 

basements or on the rooftop, which 

present unique and challenging 

circumstances for replacing a UFHWST 

generally, let alone with one that may 

have slightly larger dimensions. (A.O. 

Smith, No 16 at p. 5) 

In response, the comments from A.O. 

Smith and Rheem reaffirmed DOE’s 

understanding that potential amended 

standards for UFHWSTs could 

potentially disproportionately increase 

the installation costs for a fraction of 

consumers of replacement equipment. 

Absent further information or data on 

typical installations costs for UFHWST 

to indicate the contrary, DOE maintains 

the conclusion arrived at in the June 

2021 NOPD: There is considerable 

uncertainty regarding future consumer 

economic benefits from increasing the 

efficiency of UFHWSTs. 

2. Annual Energy Consumption 

DOE typically determines the annual 

energy consumption for equipment at 

different efficiency levels. DOE’s 

approach to determining the annual 

energy consumption of UFHWSTs is 

described in section IV.D of this 

document. 

As discussed in section V.A.1 of this 

document, DOE estimates that amended 

standards at the max-tech level would 

result in FFC energy savings of 0.058 

quads over 30 years. However, as 

discussed in sections IV.D and IV.E of 

this document, even small adjustments 

to several critical inputs to the model 

could have a large impact on these 

results and could significantly alter the 

findings. For example, as explained 

previously, the inputs to the Tank 

Thermal Loss Model are primarily based 

on publicly available data and 

information gathered during 

manufacturer interviews, but as 

discussed earlier, the results from this 

model underestimate losses as 

compared to those observed during 

testing of UFHWSTs that was previously 

done to evaluate the test procedure 

proposed for UFHWSTs in the May 

2016 CWH TP NOPR. As noted in the 

June 2021 NOPD, when DOE conducted 

standby loss tests of UFHWSTs, it found 

that tanks with identical storage 

volumes, dimensions, number of ports, 

and nominal insulation levels differed 

by up to 8.5 percent, whereas DOE’s 

model would predict the same level of 

standby losses for tanks with the same 

attributes and insulation. This finding 

suggests that there are variations in the 

extent of R–12.5 coverage between 

units, even between units from the same 

manufacturer. 86 FR 30796, 30808 (June 

10, 2021). The unpredictable results of 

DOE testing meant that DOE was unable 

to validate its thermal loss model to test 

data with a high degree of certainty. 

Without being able to verify expected 

levels of heat loss through testing, DOE 

is unable to conduct an LCC and PBP 

analysis for this final determination. 

DOE may continue to investigate this 

issue further in the future. 

F. Shipments Analysis 

DOE uses projections of annual 

equipment shipments to calculate the 

national impacts of potential amended 

or new energy conservation standards. 

The shipments model takes an 

accounting approach in tracking market 

shares of each equipment class and the 

vintage of units in the stock. Stock 

accounting uses equipment shipments 

as inputs to estimate the age distribution 

of in-service equipment stocks for all 

years. 

To project shipments and equipment 

stocks for 2025 through the end of the 

30-year analysis period (2054), DOE 

used a stock accounting model. Future 

shipments are calculated based on 

projections in Annual Energy Outlook 

2021 (AEO 2021) (see section IV.F.3 of 

this document for further details). The 

stock accounting model keeps track of 

shipments and calculates replacement 

shipments based on the expected 

service lifetime of UFHWSTs and a 

Weibull distribution that identifies a 

percentage of units still in existence 

from a prior year that will fail and need 

to be replaced in the current year. 

DOE’s approach begins with an 

estimate of the current stock of 

UFHWSTs. DOE uses an estimate of 

average UFHWST lifetime to derive the 

fraction of the stock that is replaced in 

each year. DOE then adds an estimate of 

new UFHWSTs installed in each year. 

1. Stock Estimates 

DOE investigated each sector that is 

presumed to operate UFHWSTs: 

Residential, commercial, and industrial. 

However, DOE was unable to find clear 

indicators of how many UFHWST are 

used by any of these sectors, so it 

developed sectoral stock estimates from 

publicly-available data, as discussed in 

the paragraphs that follow. 

a. Residential Stock 

As explained in detail in the June 

2021 NOPD, to estimate the stock of 

UFHWSTs in the residential sector, 

DOE’s search of the RECS database 

using these assumptions yielded a 

sample of zero buildings that had the 

potential to contain an UFHWST.18 86 

FR 30796, 30811 (June 10, 2021). At that 

time, DOE assumed that UFHWST were 

not used in residential buildings. DOE 

did not receive any comments on 

residential installations of UFHWST. 

Accordingly, for this final 

determination, DOE concluded that the 

quantity of UFHWST installed in the 

residential sector is minimal, and 

consequently, it was not considered for 

the purpose of this final determination. 

b. Commercial Stock 

To estimate the stock of UFHWSTs in 

the commercial sector, DOE examined 

the CBECS databases. At the time of the 

publication of the June 2021 NOPD, the 

2012 edition of CBECS (‘‘CBECS 2012’’) 

was the most recent edition. Since the 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31375 

19 ‘‘District heating’’ is an underground 

infrastructure asset where thermal energy is 

provided to multiple buildings from a central 

energy plant or plants. In this context, it would be 

operated by local governments. 

20Energy Information Administration (EIA), 2014 

Manufacturing Energy Consumption Survey (MECS) 

(Available at: https://www.eia.gov/consumption/ 

manufacturing/data/2014/) (Last accessed April 4, 

2019). 

21Northwest Energy Efficiency Alliance, 2014 

Industrial Facilities Site Assessment: Report & 

Analytic Results, 2014 (Available at: https://

neea.org/img/documents/2014-industrial-facilitiesstock-assessment-final-report.pdf) (Last accessed 

May 3, 2021). 

22U.S. Census Bureau, All Sectors: Summary 

Statistics for the U.S., States, and Selected 

Geographies: 2017, Table EC1700BASIC, 2017 

(Available at: https://data.census.gov/cedsci/ 

table?q=31-33%3A%20Manufacturing&

hidePreview=false&tid=ECNBASIC2017.

EC1700BASIC&vintage=2017) (Last accessed: March 

27, 2020). 

June 2021 NOPD was published in the 

Federal Register, the 2018 edition of 

CBECS (‘‘CBECS 2018’’) was made 

available. 

CBECS 2018 introduced new building 

records that may contain UFHWST 

equipment, as they relate to 

technologies that are often connected to 

UFHWSTs which were absent from 

CBECS 2012. However, CBECS 2018 

was also limited in its characterization 

of buildings that may contain an 

UFHWST when compared to CBECS 

2012 and did not have the same fields 

from which to draw a customer sample. 

For this final determination, in addition 

to the sample based on CBECS 2012 

which was presented in the June 2021 

NOPD, DOE included the buildings 

from CBECS 2018 with the following 

characteristics in addition to the stock 

estimates presented in the June 2021 

NOPD (see 86 FR 30796, 30811 (June 10, 

2021)). 

• Solar thermal used for water 

heating (SOWATR = 1), and 

• Water loop heat pump for hot water 

distribution (WTLOOP_HW = 1). 

As noted previously, for the June 2021 

NOPD, DOE based its commercial stock 

estimates on data from CBECS 2012. 

Since DOE did not receive any 

comments suggesting alternate stock 

from the estimates, the Department has 

elected to maintain its use of these 

estimates for this final determination in 

addition to the new records from CBECS 

2018. From CBEC 2012, DOE assumed 

that builds likely to contain an 

UFHWST would be characterized as 

follows: 

• A building with water heating 

equipment (WTHTEQ = 1), and 

• Where the main heating equipment 

is boilers inside (or adjacent to) the 

building that produce steam or hot 

water (MAINHT = 3). 

The results of a search of the CBECS 

databases using these assumptions 

yielded a commercial sample of 325,089 

buildings from CBECS 2012, plus an 

additional 11,134 buildings from CBECS 

2018. From this sample DOE also found 

that 99.2 percent of these buildings use 

natural gas as their primary energy 

source for water heating, with the 

remaining 0.8 percent of buildings using 

district water heating,19 electricity, 

heating oil, or other fuels. For purpose 

of analysis, DOE considered 100 percent 

of commercial buildings to use natural 

gas to heat water. 

DOE notes that for this determination, 

the surveys from both CBECS 2012, and 

CBECS 2018 contain very course data 

regarding the quantity and type of water 

heating technologies for each record. 

DOE assumed one UFWHST per 

building—for all building recordsregardless of building size from the 

CBECS results. This is likely to be an 

overestimation of UFHWST installed 

stock, as not all buildings matching the 

available criteria from CBECS will 

contain UFHWSTs, even if some of 

these building contain multiple units. 

c. Industrial Stock 

For this final determination DOE 

maintained its industrial stock approach 

and estimate of UFWHSTs that it used 

in the June 2021 NOPD. As described in 

the June 2021 NOPD, DOE examined the 

industrial data source listed in the 

August 2019 ECS RFI and was not able 

to determine an appropriate stock 

sample from the highly aggregated data 

available.20 21 86 FR 30796, 30811 (June 

10, 2021). DOE maintains that 

UFHWSTs are used to store potable hot 

water for human consumption and 

washing, not for industrial process 

water. This assumption is supported by 

Rheem’s comment that stated that their 

UFHWSTs are not intended for nonpotable water storage. (Rheem, No.15 at 

p. 5) 

DOE maintained its assumption that 

the volume of hot water storage needed 

would be similar across both 

commercial and manufacturing sectors 

on a per-person basis. To estimate the 

stock of industrial consumers, DOE used 

the number of manufacturing employees 

from the 2017 census.22 DOE then 

determined the ratio of UFHWSTs per 

commercial employee. DOE then used 

the ratio of the employee count from the 

commercial sample described in section 

IV.F.1.b of this document over the total 

number of commercial employees to 

represent the number of UFHWSTs in 

the commercial sector on a peremployee basis. DOE then applied this 

ratio to the total number of 

manufacturing employees from the 2017 

census to produce a National stock 

estimate for the industrial sector. 

DOE received comments from Rheem 

and A.O. Smith indicating that the 

estimates industrial stock should be a 

smaller fraction of the UFHWST install 

base when compared to commercial 

installations. Rheem commented that 

most UFHWSTs are installed in the 

commercial sector; and A.O. Smith 

stated that the percentage of UFHWSTs 

used for industrial process hot water 

storage is relatively small, and that 

those UFHWSTs used for industrial 

processes are typically customized/ 

engineered-to-order tanks. (Rheem, 

No.15 at p. 4; A.O. Smith, No. 16 at p. 

6) Additionally, Rheem supported 

DOE’s ‘‘80/20’’ split between 

commercial and industrial applications. 

(Rheem, No.15 at p. 4) DOE received no 

other comment on the industrial stock 

estimates. Given the supportive nature 

of these comments regarding DOE’s 

industrial stock estimation, the 

Department maintained the approach 

from the June 2021 NOPD for this final 

determination. 

Table IV.9 presents the estimated 

stock of UFHWSTs in each sector, in 

2012 and 2018. Table IV.9 shows that 

even with the updated commercial 

inputs resulting from the additional 

buildings from CBEC 2018 that the 

approximate 80/20 split in the final 

determination weight between 

commercial and industrial sectors is 

maintained. 

TABLE IV.9—ESTIMATED UFHWST STOCK (2012) 

Sector 

NOPD 

number of 

units 

(2012) 

Final 

determination 

units 

(2012) 

Final 

determination 

weight (%) 

(2018) 

Residential ................................................................................................................. 0 0 0 

Commercial ................................................................................................................ 315,360 325,269 82 


jspears on DSK121TN23PROD with RULES1
31376 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

23U.S. Energy Information Administration, 

Annual Energy Outlook (2021), Table 22, 

Commercial Sector Energy Consumption, 

Floorspace, Equipment Efficiency, and Distributed 

Generation (Available at: https://www.eia.gov/ 

outlooks/aeo/data/browser/#/?id=32- 

AEO2021&cases=ref2021&sourcekey=0) (Last 

accessed Feb. 21, 2022). 24U.S. Energy Information Administration, 

Annual Energy Outlook (2021), Table 23, Industrial 

Sector Macroeconomic Indicators (Available at: 

https://www.eia.gov/outlooks/aeo/data/browser/#/ 

?id=34-AEO2021&cases=ref2021&sourcekey=0) 

(Last accessed Feb. 21, 2022). 

TABLE IV.9—ESTIMATED UFHWST STOCK (2012)—Continued 

Sector 

NOPD 

number of 

units 

(2012) 

Final 

determination 

units 

(2012) 

Final 

determination 

weight (%) 

(2018) 

Industrial .................................................................................................................... 71,361 71,361 18 

2. Shipments for Replacement 

For the reasons explained in the June 

2021 NOPD, DOE based the replacement 

rate for UFHWSTs on an average 

equipment lifetime of 12 years, using 

the equipment lifetime developed for 

commercial water heaters. 86 FR 30796, 

30811–30812 (June 10, 2021). In 

response to the June 2021 NOPD, DOE 

did not receive any comments regarding 

its derived annual rate of UFHWST 

replacement. Accordingly, for this final 

determination, DOE maintained its 

assumption of an 8 percent per year 

replacement rate for UFHWSTs. 

3. Shipments for New Construction 

To project shipments of UFHWSTs for 

new construction, DOE relied on the 

trends available from the AEO 2021. 

DOE used the Commercial Floorspace 

and Macro Indicators Employment 

Manufacturing trends to project new 

construction for the commercial and 

industrial sectors, respectively.23 24 DOE 

estimated a saturation rate for each 

equipment type using building and 

equipment stock values. The saturation 

rate was applied in each year, yielding 

shipments to new buildings. 

On this topic, Rheem stated that it 

expects to see growth in storage tank 

applications to support growth with 

commercial heat pump water heater 

systems for new a construction and 

replacement installations. (Rheem, 

No.15 at p. 5) The CA IOUs stated that 

they likewise expect future shipments of 

UFHWSTs to increase in response to the 

increased penetration of commercial 

heat pump water heaters. (Rheem, No.15 

at p. 5, CA IOUs, No.17 at p. 1) 

A.O. Smith commented that the AEO 

may be too broad of a ‘‘scaler’’ to use 

and recommended considering whether 

an organization like the American 

Institute of Architects (AIA) or ASHRAE 

may have a more defined data set. (A.O. 

Smith, No.16 at p. 6) 

In response, DOE notes that there are 

insufficient publicly-available data to 

model the future shipments of 

UFHWSTs connected to heat pump 

water heaters. However, buildings with 

heat pump water heaters were included 

in CBECS 2018, and they were also 

included in this stock analysis (see 

section IV.F.1.b of this document). 

Additionally, DOE did search for data 

related to future UFHWST shipments 

(or an appropriate proxy) generated by 

either the AIA or ASHRAE, but the 

Department was unable to locate any 

such information. Therefore, for this 

final determination, DOE continued to 

use AEO 2021 to project future 

UFHWST sales. The trend from AEO is 

publicly available, and DOE finds that it 

provides an accepted, credible 

projection of key performance 

indicators. 

Rheem commented on instances of 

installation of a second tank that can 

serve to help meet the total hot water 

load or function as a backup. More 

specifically, Rheem stated that two 

tanks (under 500 gallons) are used in a 

growing number of applications, but the 

commenter did not provide data or 

information as to the extent of any such 

trend. (Rheem, No.15 at p. 4) A.O. Smith 

suggested that it is not uncommon for 

installations to have more than one 

UFHWST per building. A.O. Smith 

further stated that individual 

installations will have different/unique 

dimensional limitations depending on 

the doorways or elevators that must be 

used to get the tanks into place, as well 

as overhead clearances. A.O. Smith 

stated that these constraints may limit 

tank size and require multiple tanks to 

meet the intended application. A.O. 

Smith further stated that some 

installations require redundancy for 

critical components such as hot water 

supply systems and will have heaters 

and storage tanks connected in parallel 

such that one can be isolated for 

maintenance while the other remains in 

service. (A.O. Smith, No.16 at p. 6) 

DOE understands that the installation 

of additional equipment could be driven 

by concerns related to limitations 

associated with individual installation 

circumstances, or the need for added 

redundancy of critical hot water 

systems, as suggested by commenters. 

However, DOE does not have data as to 

the extent to which multiple 

installations occur, and commenters did 

not provide information as to the extent 

of such installations in terms of either 

units installed or sectors where this 

would be most probable. Nonetheless, 

DOE notes that its initial stock estimate 

in section IV.F.1 of this document is 

very broad due to the categories 

available in CBECS 2012 and CBECS 

2018, and, therefore, it likely estimates 

at the higher end of the potential range 

of installed UFHWSTs. For these 

reasons, DOE did not explicitly include 

a factor to increase shipments to 

account for redundant UFHWSTs. 

4. Estimated Shipments 

Table IV.10 presents the estimated 

UFHWST shipments in selected years. 

TABLE IV.10—SHIPMENTS RESULTS

FOR UFHWSTS (UNITS) 

Year Shipments 

(NOPD) 

Shipments 

(final 

determination) 

2025 ........... 38,119 39,407 

2030 ........... 41,324 41,424 

2040 ........... 45,474 45,694 

2050 ........... 48,363 49,901 

Table IV.11 presents the estimated 

distribution of UFHWST shipments by 

the storage volume ranges specified in 

section IV.C.2 of this document. DOE 

estimated these values through 

examination of capacity counts in 

existing trade literature and DOE’s 

CCMS database, confidential interviews 

with manufactures under NDA, and 

stakeholder comments. DOE assumes 

that this distribution is static and does 

not change over time. 

DOE received comments from A.O. 

Smith and Rheem regarding the 

distribution of shipments over 

equipment capacities. Both suggested 

that DOE’s stock analysis may include 

too many large tanks and not enough 

smaller tanks. Rheem stated that the 

distribution of shipment estimates for 

the 0 to 100 and 101 to 250-gallon 

capacity ranges appears to be low, and 

the 1,001 to 2,000 and 2,001 to 5,000- 

gallon ranges are high. (A.O. Smith, 

No.16 at p. 5, Rheem, No.15 at p. 5) In 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31377 

25For more information on NEMS, refer to The 

National Energy Modeling System: An Overview 

2009, DOE/EIA–0581(2009) (October 2009) 

(Available at: www.eia.gov/analysis/pdfpages/ 

0581(2009)index.php) (Last accessed March 25, 

2022). 

response, for this final determination, 

DOE has redistributed the fraction of 

capacities based on the comments 

received. This redistribution is shown 

in Table IV.11. 

TABLE IV.11—DISTRIBUTION OF SHIPMENTS BY UFHWST STORAGE VOLUME (GAL) 

Capacity range 

Market shares 

in NOPD 

(%) 

Revied 

market shares 

(%) 

0 to 100 .................................................................................................................................................................... 3 15 

101 to 250 ................................................................................................................................................................ 11 20 

251 to 500 ................................................................................................................................................................ 23 23 

501 to 1000 .............................................................................................................................................................. 26 26 

1001 to 2000 ............................................................................................................................................................ 20 10 

2001 to 5000 ............................................................................................................................................................ 16 5 

>5000 ....................................................................................................................................................................... 1 1 

5. Additional Sources of Uncertainty 

DOE recognizes that the market for 

UFHWSTs is a relatively highly 

customized and low-volume shipments 

market. DOE’s review of publiclyavailable information indicates that 

annual shipments through 2030 will be 

below 20,000 units (see the previous 

section for additional details). In the 

June 2021 NOPD, DOE identified 48 

UFHWST manufacturers, 37 of which 

are small domestic manufacturers. 86 

FR 30796, 30812 (June 10, 2021). In 

response to the June 2021 NOPD, BWC 

stated that the number of manufacturers 

identified that produce UFHWSTs 

reinforces the point that the market is 

highly customized and contains a 

significant number of small, niche 

manufacturers. (BWC, No. 14 at p. 2) 

Due to the niche nature of this 

marketplace, it is difficult to accurately 

predict how the market would respond 

to amended standards (e.g., whether any 

manufacturers would face 

disproportionately high conversion 

costs, what changes may result to the 

distribution of tank sizes sold, if 

consumers would select different 

equipment to meet their water heating 

needs, or whether manufacturers might 

consolidate or exit the market). These 

uncertainties may substantially impact 

the findings if DOE were to complete a 

full economic impact analysis of 

amended standards for UFHWSTs or 

estimate the cost-effectiveness of a 

more-stringent standard. 

G. National Impact Analysis 

DOE conducted an NIA that assesses 

the NES in terms of total FFC energy 

savings that would be expected to result 

from new or amended standards at 

specific efficiency levels. DOE did not 

assess the net present value (‘‘NPV’’) of 

the total costs and benefits experienced 

by consumers as part of the NIA because 

of the lack of a cost analysis and LCC 

analysis, as previously discussed. DOE 

calculates the NES for the potential 

standard levels considered based on 

projections of annual equipment 

shipments, along with the annual 

energy consumption from the energy 

use analysis. For the present analysis, 

DOE projected the energy savings over 

the lifetime of UFHWSTs sold from 

2025 through 2054. 

1. National Energy Savings 

The national energy savings (‘‘NES’’) 

analysis involves a comparison of 

national energy consumption of 

UFHWSTs between each potential 

standards case (for this final 

determination represented by efficiency 

level (‘‘EL’’)) and the case with no new 

or amended energy conservation 

standards. DOE calculated the national 

energy consumption by multiplying the 

number of units (stock) of equipment 

(by vintage or age) by the unit energy 

consumption (also by vintage). DOE 

calculated annual NES based on the 

difference in national energy 

consumption for the no-new-standards 

case and for each higher-efficiencystandards case. DOE evaluates the 

effects of amended standards at the 

national level by comparing a case 

without such standards (referred to as 

the no-new-standards case) with 

standards-case projections that 

characterize the market for each 

UFHWST class if DOE were to adopt 

amended standards at the specified 

energy efficiency levels for that class. As 

discussed in the subsections that follow, 

this analysis requires an examination of 

both the efficiency of the UFHWST, as 

well as the efficiency of the appliance 

supplying heated water to that tank. 

In 2011, in response to the 

recommendations in a report titled, 

‘‘Review of Site (Point-of-Use) and FullFuel-Cycle Measurement Approaches to 

DOE/EERE Building Appliance EnergyEfficiency Standards’’ issued by a 

committee appointed by the National 

Academy of Sciences, DOE announced 

its intention to use FFC measures of 

energy use and greenhouse gas and 

other emissions in the NIA and 

emissions analyses included in future 

energy conservation standards 

rulemakings. 76 FR 51281 (August 18, 

2011). After evaluating the approaches 

discussed in the August 18, 2011 notice, 

DOE subsequently published a 

statement of amended policy in the 

Federal Register, in which DOE 

explained its determination that EIA’s 

National Energy Modeling System 

(‘‘NEMS’’) is the most appropriate tool 

for DOE’s FFC analysis and its intention 

to use NEMS for that purpose. 77 FR 

49701 (August 17, 2012). NEMS is a 

public domain, multi-sectoral, partial 

equilibrium model of the U.S. energy 

sector 25 that EIA uses to prepare its 

AEO. The FFC factors incorporate losses 

in production, and delivery in the case 

of natural gas, (including fugitive 

emissions) and additional energy used 

to produce and deliver the various fuels 

used by power plants. 

2. Product Lifetime 

For this analysis, DOE maintained use 

of the average lifetime for commercial 

electric storage water heaters (i.e., 12 

years) as a proxy for UFHWST lifetime, 

as was done in the June 2021 NOPD. 86 

FR 30796, 30812 (June 10, 2021). 

DOE received several comments 

related to average UFHWST lifetimes. 

Both Rheem and A.O. Smith agreed 

with DOE’s estimated 12-year tank 

lifetime. (Rheem, No.15 at p. 5 and A.O. 

Smith, No.16 at p. 6) BWC suggested 

that UFHWST lifetimes vary between 6 

and 12 years, but the commenter opined 

that the actual lifetime is extremely 

dependent on product maintenance, 


jspears on DSK121TN23PROD with RULES1
31378 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

water quality, and product application. 

(BWC, No.14 at p. 1) 

In response, DOE notes that in its 

analysis, a distribution of lifetimes is 

used (with an average lifetime of 12 

years) to capture different factors that 

may contribute to lifetimes that are 

shorter or longer than the average. As 

BWC did not provide specific 

frequencies of UFHWST failures as 

would support modification of the 

distribution of lifetimes, DOE 

maintained the same assumptions used 

in its proposed determination for this 

final determination. 

3. Energy Efficiency Distribution in the 

No-New-Standards Case 

To estimate the share of consumers 

that would be affected by a potential 

energy conservation standard at a 

particular efficiency level, DOE first 

considered the projected distribution 

(market shares) of product efficiencies 

under the no-new-standards case (i.e., 

the case without amended or new 

energy conservation standards. In the 

June 2021 NOPD, DOE based its 

distribution of efficiencies in the nonew-standards case on the counts and 

R-values of the records in its CCD 

database. At that time, DOE found that 

there were a minimal number of designs 

that related to the R-value efficiency 

levels determined in the engineering 

analysis. 86 FR 30796, 30813 (June 10, 

2021). 

In commenting on the June 2021 

NOPD, DOE received input from 

interested parties regarding the 

distribution of efficiencies in the nonew-standards case. Both A.O. Smith 

and BWC agreed with DOE’s 

assumption that 99 percent of all units 

sold are currently at baseline (R–12.5). 

(A.O. Smith, No.16 at p. 7, BWC, No.14 

at p. 2) While Rheem agreed most 

shipments are at or near the baseline of 

R–12.5, it suggested that DOE should 

review the 99-percent assumption. 

(Rheem, No.15 at p. 5) The CA IOUs 

commented in the DOE compliance 

database, roughly 1149 out of 2428 

models have an R-value above 12.5, and 

660 models have an R-value at or above 

15.625 (EL 1), suggesting that there is 

interest in equipment with insulation 

levels well above the current minimum 

levels. (CA IOUs, No.17 at p. 4) 

Based on the comments received, 

DOE updated the baseline efficiency 

distribution used in the final 

determination based on the most 

recently available data from CCD. These 

data contain a greater number of models 

above baseline than there were at the 

time the June 2021 NOPD was 

published. Based on these new data, 

DOE revised its energy efficiency 

distribution in the no-new-standards 

case to match the data shown in Table 

IV.12 of this document. This update 

results in a revised distribution for this 

final determination of 68 precent at EL 

0 (baseline), and 31 percent at EL 1, and 

less than 1 percent combined at ELs 2 

and 3. The revised distribution of 

efficiencies weighted as a function of 

shipments by representative tank 

volume (gal) are shown in Table IV.13. 

TABLE IV.12—FRACTION OF MODEL EFFICIENCY IN CCMS 

(% of records) 

Representative tank volume 

(gal.) 

EL 0 

(baseline) 

EL 1 EL 2 EL 3 

R–12.5 R–15.62 R–18.75 R–30 

80 ..................................................................................................................... 7 0 0 0 

175 ................................................................................................................... 19 4 0 0 

375 ................................................................................................................... 18 6 0 0 

750 ................................................................................................................... 19 6 0 0 

1,500 ................................................................................................................ 10 8 0 0 

3,500 ................................................................................................................ 0 2 0 0 

5,000 ................................................................................................................ 0 1 0 0 

Note: DOE notes that while there is some equipment currently distributed in commerce that achieves EL 3, the fraction of such equipment is 

very small when compared to rest of the market and is not reflected here due to rounding. 

TABLE IV.13—FRACTION OF MODEL EFFICIENCIES AS A FUNCTION OF SHIPMENTS

(% of shipments) 

Representative tank volume 

(gal.) 

Shipments 

weight 

EL 0 

(baseline) 

EL 1 EL 2 EL 3 

R–12.5 R–15.62 R–18.75 R–30 

80 ......................................................................................... ........................ 4 0 0 0 

175 ....................................................................................... ........................ 17 3 0 0 

375 ....................................................................................... ........................ 23 7 0 0 

750 ....................................................................................... ........................ 15 5 0 0 

1,500 .................................................................................... ........................ 8 7 0 0 

3,500 .................................................................................... ........................ 1 8 0 0 

5,000 .................................................................................... ........................ 0 1 0 0 

Note: DOE notes that while there is some equipment currently distributed in commerce that achieves EL 3, the fraction of such equipment is 

very small when compared to rest of the market and is not reflected here due to rounding. 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31379 

26While there is a wide range of equipment that 

building owners can use to produce hot water, for 

this analysis, DOE assumed that 100 percent of all 

hot water is produced by a hot water supply boiler. 

See section IV.E.1.b of this document for details. 

27Available at: https://www.regulations.gov/ 

document?D=EERE-2014-BT-STD-0042-0016 (Last 

accessed: April 8, 2020). 

28U.S. Energy Information Administration, 

Annual Energy Outlook (2022), Table 22, 

Commercial Sector Energy Consumption, 

Floorspace, Equipment Efficiency, and Distributed 

Generation (Available at: https://www.eia.gov/ 

outlooks/aeo/data/browser/#/?id=32- 

AEO2020®ion=0-0&cases=ref2020&start=

2018&end=2050&f=A&linechart=ref2020-d112119a.

45-32-AEO2020&map=&

ctype=linechart&sourcekey=0) (Last accessed May 

10, 2022). 29Available at: https://www.regulations.gov/ 

document?D=EERE–2013–BT–STD–0030-0099 (Last 

accessed: April 8, 2020). 30U.S. Energy Information Administration, 

Annual Energy Outlook (2021), Table 22, 

Commercial Sector Energy Consumption, 

Floorspace, Equipment Efficiency, and Distributed 

Generation (Available at: www.eia.gov/outlooks/ 

aeo/data/browser/#/?id=32–AEO2021&

cases=ref2021&sourcekey=0) (Last accessed April 

23, 2021). 

31Commercial Packaged Boilers Final Rule 

National Impact Spreadsheet (Jan. 10, 2020) 

(Available at: https://www.regulations.gov/ 

document/EERE-2013-BT-STD-0030-0087) See: 

Efficiency Distribution tables on worksheets: 

SGHW, and LGHW (Last accessed: April 22, 2022). 

32The impacts of applying the no-new standards 

case efficiency trend from CPB can be examined as 

a sensitivity scenario in the accompanying energy 

savings estimation tool. (Available at: https://

www.regulations.gov/docket/EERE-2017-BT-STD0021/document.) 

33U.S. Office of Management and Budget, 

Circular A–4: Regulatory Analysis (Sept. 17, 2003) 

(Available at: www.whitehouse.gov/omb/circulars_

a004_a-4/). 

4. Hot Water Supply Boiler Efficiency 

Trend 

As stated previously, a potential 

standard increasing the insulation rating 

of UFWHST equipment would reduce 

thermal losses, which would in turn 

reduce the energy used by a building’s 

hot water supply equipment to provide 

hot water.26 Determining the impact of 

reduced UFHWST losses on the 

connected boiler(s) requires an estimate 

of the boiler efficiency. To estimate the 

efficiency of boiler systems, DOE used 

the No-New-Standards Case (EL 0) 

efficiency distribution data from the 

May 2016 CWH ECS NOPR27 to 

calculate a single, market-weighted, 

average efficiency, which was 84.4 

percent in 2016. For years beyond 2016 

and future years through 2050, DOE 

used the AEO 2022 data series 

‘‘Commercial: Stock Average Efficiency: 

Water Heating: Natural Gas: Reference 

case’’ to project the efficiency trend of 

hot-water supply boilers.28

The CA IOUs suggested that the boiler 

efficiencies used in DOE’s analysis of 

UFHWSTs might be too high and 

recommended that DOE revise its 

installed stock efficiency assumptions 

by using the NIA shipments estimates 

from the 2016 commercial packaged 

boilers (‘‘CPB’’) standards rulemaking. 

(CA IOUs, No.17 at pp. 3–4) 

In response, DOE notes that the 

analysis preformed in support of the 

May 2016 CPB standards rulemaking 

has a number of outdated assumptions, 

and even the January 2020 CPB 

standards final rule,29 while still 

relevant, does not include recent State 

and other initiatives promoting water 

heater efficiency that are captured in the 

AEO 2022 data series ‘‘Commercial: 

Stock Average Efficiency: Water 

Heating: Natural Gas: Reference case’’ to 

project the efficiency trend of hot-water 

supply boilers.30 For this final 

determination, DOE examined the 

efficiency distributions in the no-newstandards case for small and large 

commercial gas water heating boilers 

from the 2020 CPB standards final rule 

and found that that the resulting FFC 

savings were 0.061 quads, or 0.003 

quads greater that DOE’s estimation 

using the efficiency trend from AEO 

2022. 31 32 As DOE stated previously, the 

AEO 2022 data on boiler efficiency is 

the most current data available, and 

despite showing slightly less cumulative 

energy savings than the trend from the 

2020 CPB standards final rule, DOE has 

maintained its approach to use the most 

recently available information. 

Additionally, as in the June 2021 NOPD, 

DOE assumed no additional increase in 

boiler efficiency after 2050 (i.e., the end 

date for the AEO 2022 analysis). This 

efficiency trend for select years is 

shown in Table IV.13. 

TABLE IV.14—AVERAGE STOCK EFFICIENCIES OF HOT-WATER SUPPLY

BOILERS FROM 2025–2050 

Year Efficiency 

(%) 

2025 ...................................... 89.5 

2030 ...................................... 90.8 

2035 ...................................... 92.3 

2040 ...................................... 93.3 

2045 ...................................... 93.9 

2050 ...................................... 94.3 

V. Analytical Results and Conclusions 

The following section addresses the 

results from DOE’s analyses with 

respect to the considered energy 

conservation standards for UFHWSTs. It 

addresses the efficiency levels examined 

by DOE and the projected FFC energy 

savings of each of these levels. As 

discussed previously, certain economic 

analyses were not conducted for this 

final determination because it was 

determined they would be of limited 

value due to the lack of data and high 

degree of uncertainty of the inputs to 

those analyses. 

A. National Impact Analysis 

This section presents DOE’s estimates 

of the FFC NES that would result from 

each of the efficiency levels considered 

as potential amended standards. 

1. Significance of Energy Savings 

To estimate the energy savings 

attributable to potential amended 

standards for UFHWSTs, DOE compared 

their energy consumption under the nonew-standards case to their anticipated 

energy consumption under each 

efficiency level. The savings are 

measured over the entire lifetime of 

equipment purchased in the 30-year 

period that would begin in the year of 

anticipated compliance with amended 

standards (2025–2054). Table V.1 

presents DOE’s projections of the FFC 

National energy savings for each 

efficiency level considered for 

UFHWSTs. The savings were calculated 

using the approach described in section 

IV.D of this document. 

TABLE V.1—CUMULATIVE FFC NATIONAL ENERGY SAVINGS FOR UFHWSTS; 30 YEARS OF SHIPMENTS (2025–2054) 

Efficiency level 

1 2 3 

Full-Fuel-Cycle Energy (quads) ................................................................................................... 0.015 0.029 0.058 

OMB Circular A–4 33 requires 

agencies to present analytical results, 

including separate schedules of the 

monetized benefits and costs that show 

the type and timing of benefits and 

costs. Circular A–4 also directs agencies 


jspears on DSK121TN23PROD with RULES1
31380 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

34Under 42 U.S.C. 6313(a)(6)(C)(i) and (iv), EPCA 

requires DOE to review its standards for covered 

ASHRAE equipment every 6 years, and it requires 

a 3-year period after any new standard is 

promulgated before compliance is required, except 

that in no case may any new standards be required 

within 6 years of the compliance date of the 

previous standards. If DOE makes a determination 

that amended standards are not needed, it must 

conduct a subsequent review within three years 

following such a determination. (42 U.S.C. 

6313(a)(6)(C)(iii)(II)) Furthermore, if ASHRAE acts 

to amend ASHRAE Standard 90.1 for any of the 

enumerated equipment covered by EPCA, DOE is 

triggered to consider and adopt the amended 

ASHRAE levels, unless the Department has clear 

and convincing evidence to support more-stringent 

standard levels, which would result in significant 

additional energy savings and be technologically 

feasible and economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) If DOE adopts the amended 

ASHRAE levels, compliance with amended Federal 

energy conservation standards would be required 

either two or three years after the effective date of 

the ASHRAE Standard 90.1 amendments 

(depending upon the equipment type in question). 

However, if DOE adopts more-stringent standards 

pursuant to the ASHRAE trigger, compliance with 

such standards would be required four years after 

publication of a final rule. (42 U.S.C. 6313(a)(6)(D)) 

As DOE is evaluating the need to amend the 

standards, the sensitivity analysis is based on the 

review timeframe associated with amended 

standards. While adding a 6-year review to the 3- 

year compliance period adds up to 9 years, DOE 

notes that it may undertake reviews at any time 

within the 6-year period and that the 3-year 

compliance date may yield to the 6-year backstop. 

A 9-year analysis period may not be appropriate 

given the variability that occurs in the timing of 

standards reviews and the fact that for some 

equipment, the compliance period may be 

something other than 3 years. 

to consider the variability of key 

elements underlying the estimates of 

benefits and costs. For this final 

determination, DOE undertook a 

sensitivity analysis using 9 years, rather 

than 30 years, of equipment shipments. 

The choice of a 9-year period is a proxy 

for the timeline in EPCA for the review 

of certain energy conservation standards 

and potential revision of and 

compliance with such revised 

standards.34 The review timeframe 

established in EPCA is generally not 

synchronized with the equipment 

lifetime, equipment manufacturing 

cycles, or other factors specific to 

UFHWSTs. Thus, such results are 

presented for informational purposes 

only and are not indicative of any 

change in DOE’s analytical 

methodology. The NES sensitivity 

analysis results based on a 9-year 

analytical period are presented in Table 

V.2 of this document. The impacts are 

counted over the lifetime of UFHWSTs 

purchased in 2025–2034. 

TABLE V.2—CUMULATIVE FFC NATIONAL ENERGY SAVINGS FOR UFHWSTS; 9 YEARS OF SHIPMENTS (2025–2034) 

Efficiency level 

1 2 3 

Full-Fuel-Cycle Energy (quads) ................................................................................................... 0.005 0.009 0.018 

2. Net Present Value of Consumer Costs 

and Benefits 

As discussed in section IV.E of this 

document, increasing the size of 

UFHWSTs could necessitate alterations 

to doorways and mechanical rooms in 

certain replacement installations in 

order to get an UFHWST to its 

installation destination. Further, due to 

significant uncertainties regarding the 

costs of these alterations and the lack of 

data indicating the likelihood of such 

alterations being required, at this time, 

DOE is unable to estimate typical 

installation costs of UFHWSTs. 

Therefore, any analysis conducted by 

DOE regarding the LCC or PBP would be 

of limited value because of the lack of 

data and high degree of uncertainty of 

the inputs to those analyses, and as a 

result, DOE did not estimate the NPV of 

consumer costs and benefits. 

B. Final Determination 

After carefully considering the 

comments on the June 2021 NOPD and 

the available data and information, DOE 

has determined that the energy 

conservation standards for UFHWSTs 

do not need to be amended, for the 

reasons explained in the paragraphs 

immediately following. 

EPCA specifies that for any 

commercial and industrial equipment 

addressed under 42 U.S.C. 

6313(a)(6)(A)(i), including UFHWSTs, 

DOE may prescribe an energy 

conservation standard more stringent 

than the level for such equipment in 

ASHRAE Standard 90.1 only if ‘‘clear 

and convincing evidence’’ shows that a 

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)(C)(i); 42 U.S.C. 

6313(a)(6)(A)(ii)(II)) The ‘‘clear and 

convincing’’ evidentiary threshold 

applies both when DOE is triggered by 

ASHRAE action and when DOE 

conducts a 6-year-lookback rulemaking, 

with the latter being the basis for the 

current proceeding. 

Because an analysis of potential 

economic justification and energy 

savings first requires an evaluation of 

the relevant technology, DOE first 

discusses the technological feasibility of 

amended standards. DOE then evaluates 

the energy savings potential and 

economic justification of potential 

amended standards. 

1. Technological Feasibility 

EPCA mandates that DOE consider 

whether amended energy conservation 

standards for UFHWSTs would be 

technologically feasible. (42 U.S.C. 

6313(a)(6)(C)(i); 42 U.S.C. 

6313(a)(6)(A)(ii)(II)) DOE has 

determined that increasing the R-value 

of insulation up to R–30 would improve 

the efficiency of UFHWSTs. As 

discussed in section IV.C.1 of this 

document, this increased R-value has 

been demonstrated in commerciallyavailable jacketed UFHWSTs. These 

tanks have an advertised polyurethane 

foam thickness of 5 inches. For 

insulation thicknesses up to 3 inches, 

DOE has determined that an R-value per 

inch of 6.25 is appropriate. However, 

the R-value per inch of insulation 

appears to decrease to 6 beyond this 

foam thickness, so DOE used this 

slightly lower R-value-per inch in its 

Tank Thermal Loss Model for the maxtech level. Therefore, increasing the 

thickness of insulation up to a level of 

5 inches has been demonstrated to be 

achievable in commercially-available 

jacketed UFHWSTs, and, thus, would be 

technologically feasible. (See section 

IV.C.1 of this document for further 

information.) Hence, DOE has 

determined that amended energy 

conservation standards for UFHWSTs 

would be technologically feasible. 

2. Significant Conservation of Energy 

EPCA also mandates that DOE 

consider whether amended energy 

conservation standards for UFHWSTs 

would result in result in significant 

additional conservation of energy. (42 

U.S.C. 6313(a)(6)(C)(i); 42 U.S.C. 

6313(a)(6)(A)(ii)(II)) In the present case, 

DOE estimates that amended standards 

for UFHWST would result in FFC 

energy savings of 0.015 quads at EL 1, 

0.029 quads at EL 2, and 0.058 quads at 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31381 

EL 3 (the max-tech level) over a 30-year 

analysis period (2025–2054), as realized 

by the connected hot-water supply 

boiler. However, as discussed 

throughout this document, there are 

significant uncertainties related to these 

results. 

First, as discussed in section IV.C.1 of 

this document, there appears to be a 

reduction in R-value per inch of 

insulation in units with insulation 

thickness greater than 3 inches, 

generating uncertainty with regard to 

the performance of models above EL 2. 

Second, as discussed in section IV.D.3 

of this document, when comparing the 

results of the Tank Thermal Loss model 

to measured standby losses, the 

predicted rate of standby losses ranged 

from as low as 58 percent of the 

measured losses up to 90 percent of the 

measured losses. Furthermore, DOE’s 

model would predict the same level of 

standby losses for tanks with identical 

storage volumes, dimensions, number of 

ports, and nominal insulation levels, 

whereas measured standby losses for 

such comparable tanks differed by up to 

8.5 percent. These findings suggest that 

there may be variations in the extent of 

R–12.5 coverage between units, even 

between units from the same 

manufacturer. As discussed in section 

IV.C.2 of this document, it may not be 

practical to insulate all surfaces of 

UFHWSTs with polyurethane foam due 

to the nature of the insulation 

application process or the need to retain 

access to certain ports. Differences in 

manufacturers’ tank designs, 

manufacturing processes, or their 

interpretations of the R–12.5 insulation 

requirement could lead to variations in 

the amount of tank surface area that is 

actually insulated with R–12.5. 

Therefore, tanks that appear to have the 

same attributes and insulation may have 

different levels of standby losses in the 

field. This variation makes it very 

difficult for DOE to characterize the 

representative performance of a 

‘‘baseline’’ UFHWST, or the expected 

performance at any potential amended 

standard level, with a high degree of 

confidence since there is significant 

variation in thermal energy losses at a 

given efficiency level (R-value) that 

cannot be readily predicted or otherwise 

accounted for in the analysis. 

Third, as discussed in section IV.F.5 

of this document, due to the niche 

nature of this marketplace, it is difficult 

to accurately predict how the market 

would respond to amended standards 

(e.g., whether any manufacturers would 

face disproportionately high conversion 

costs, what changes may result to the 

distribution of tank sizes sold, if 

consumers would select different 

equipment to meet their water heating 

needs, or whether manufacturers might 

consolidate or exit the market). This 

uncertainty in standards-case shipments 

projections propagates uncertainty into 

the estimates of national energy savings. 

Due to the uncertainties in 

characterizing the efficiency 

performance of models above EL 2, the 

uncertainties in characterizing the 

representative field energy use of both 

baseline models and models at all ELs, 

and the uncertainty in projecting 

standards-case shipments, DOE has 

determined that it lacks clear and 

convincing evidence that amended 

energy conservation standards for 

UFHWSTs would result in significant 

additional conservation of energy. 

3. Economic Justification 

In determining whether a standard is 

economically justified, the Secretary 

must determine whether the benefits of 

the standard exceed its burdens, 

considering to the greatest extent 

practicable the seven statutory factors 

discussed previously (see section II.A of 

this document). (42 U.S.C. 

6313(a)(6)(C)(i); 42 U.S.C. 

6313(a)(6)(B)(ii)(I)–(VII)) 

One of those seven factors is the 

savings in operating costs throughout 

the estimated average life of the product 

in the type (or class) compared to any 

increase in the price, initial charges, or 

maintenance expenses of the products 

that are likely to result from the 

standard. (42 U.S.C. 6313(a)(6)(C)(i); 42 

U.S.C. 6313(a)(6)(B)(ii)(II)) This factor is 

typically assessed using the LCC and 

PBP analysis, as well as the NPV. 

As discussed in section IV.E.1 and 

V.A.2 of this document, there are 

significant uncertainties with regard to 

installation costs of models with 

increased insulation thickness. 

Specifically, increasing the size of 

UFHWSTs could necessitate alterations 

to doorways and mechanical rooms in 

certain replacement installations in 

order to get an UFHWST to its 

installation destination. Further, due to 

significant uncertainties regarding the 

costs of these alterations and the lack of 

data indicating the likelihood of such 

alterations being required, at this time, 

DOE is unable to estimate typical 

installation costs of UFHWSTs. 

In addition, as discussed in section 

IV.D.1 of this document, even small 

adjustments to several critical inputs to 

the Thermal Tank Loss Model could 

have a large impact on any energy use 

and LCC results and could significantly 

alter the findings. 

For these reasons, DOE did not 

conduct an economic analysis for this 

rulemaking. EPCA requires that DOE 

determine, supported by clear and 

convincing evidence, that adoption of a 

uniform national standard more 

stringent than that in ASHRAE Standard 

90.1 would result in significant 

additional conservation of energy and 

be technologically feasible and 

economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)(II); emphasis added) 

The inability to make a determination, 

supported by clear and convincing 

evidence, with regard to any one of the 

statutory criteria prohibits DOE from 

adopting more-stringent standards 

regardless of its determinations as to the 

other criteria. Due to the significant 

uncertainties related to installation costs 

and energy use, DOE could not 

reasonably conduct an analysis of 

economic justification, because those 

uncertainties would propagate into the 

results of any such analysis. Therefore, 

the result of such economic analysis 

would fail to produce the clear and 

convincing evidence required under the 

statute to demonstrate that amended 

standards for UFHWSTs would be 

economically justified, thereby 

providing an additional basis for DOE’s 

decision to move forward with a final 

determination. 

4. Summary 

Based on the reasons stated in the 

foregoing discussion, DOE has 

determined that the energy conservation 

standards for unfired hot water storage 

tanks do not need to be amended, 

because it lacks ‘‘clear and convincing’’ 

evidence that amended standards would 

result in significant additional 

conservation of energy or be 

economically justified. 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866 and 13563 

Executive Order (‘‘E.O.’’) 12866, 

‘‘Regulatory Planning and Review,’’ 58 

FR 51735 (Oct. 4, 1993), as 

supplemented and reaffirmed by E.O. 

13563, ‘‘Improving Regulation and 

Regulatory Review,’’ 76 FR 3821 (Jan. 

21, 2011), requires agencies, to the 

extent permitted by law, to: (1) Propose 

or adopt a regulation only upon a 

reasoned determination that its benefits 

justify its costs (recognizing that some 

benefits and costs are difficult to 

quantify); (2) tailor regulations to 

impose the least burden on society, 

consistent with obtaining regulatory 

objectives, taking into account, among 

other things, and to the extent 

practicable, the costs of cumulative 

regulations; (3) select, in choosing 

among alternative regulatory 


jspears on DSK121TN23PROD with RULES1
31382 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive impacts; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. DOE emphasizes as 

well that E.O. 13563 requires agencies to 

use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, the Office of 

Information and Regulatory Affairs 

(‘‘OIRA’’) in the Office of Management 

and Budget (‘‘OMB’’) has emphasized 

that such techniques may include 

identifying changing future compliance 

costs that might result from 

technological innovation or anticipated 

behavioral changes. For the reasons 

stated in the preamble, this regulatory 

action is consistent with these 

principles. 

OMB has determined that this final 

determination does not constitute a 

‘‘significant regulatory action’’ under 

section 3(f) of E.O. 12866. Accordingly, 

this action was not subject to review 

under E.O. 12866 by OIRA at OMB. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis (‘‘IRFA’’) and a final regulatory 

flexibility analysis (‘‘FRFA’’) for any 

rule that by law must be proposed for 

public comment, unless the agency 

certifies that the rule, if promulgated, 

will not have a significant economic 

impact on a substantial number of small 

entities. As required by E.O. 13272, 

‘‘Proper Consideration of Small Entities 

in Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s website (www.energy.gov/gc/ 

office-general-counsel). 

The Small Business Administration 

(‘‘SBA’’) considers a business entity to 

be a small business, if, together with its 

affiliates, it employs less than a 

threshold number of workers specified 

in 13 CFR part 121. The size standards 

and codes are established by the 2017 

North American Industry Classification 

System (‘‘NAICS’’). Unfired hot water 

storage tank manufacturers are classified 

under NAICS code 333318, ’’Other 

Commercial and Service Industry 

Machinery Manufacturing.’’ The SBA 

sets a threshold of 1,000 employees or 

fewer for an entity to be considered as 

a small business in this category. DOE 

conducted a focused inquiry into small 

business manufacturers of the 

equipment covered by this final 

determination. The Department used 

available public information to identify 

potential small manufacturers. DOE 

accessed the Compliance Certification 

Database to create a list of companies 

that import or otherwise manufacture 

the unfired hot water storage tanks 

covered by this final determination. 

Using these sources, DOE identified a 

total of 48 distinct manufacturers of 

unfired hot water storage tanks. Of these 

manufacturers, DOE identified 37 

manufacturers that are potential small 

businesses. 

DOE reviewed this final 

determination under the provisions of 

the Regulatory Flexibility Act and the 

policies and procedures published on 

February 19, 2003. The final 

determination does not amend any 

energy conservation standards for 

UFHWSTs. On the basis of the 

foregoing, DOE certifies that this final 

determination will have no significant 

economic impact on a substantial 

number of small entities. Accordingly, 

DOE has not prepared an FRFA for this 

final determination. DOE will transmit 

this certification and supporting 

statement of factual basis to the Chief 

Counsel for Advocacy of the Small 

Business Administration for review 

under 5 U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act of 1995 

This final determination, which 

determines that amended energy 

conservation standards for UFHWSTs 

are unneeded under the applicable 

statutory criteria, imposes no new 

informational or recordkeeping 

requirements. Accordingly, OMB 

clearance is not required under the 

Paperwork Reduction Act. (44 U.S.C. 

3501 et seq.) 

D. Review Under the National 

Environmental Policy Act of 1969 

DOE has analyzed this final 

determination 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 actions 

including interpretations and ruling 

with respect to existing regulation. 10 

CFR part 1021, subpart D, appendix A4. 

DOE has completed the necessary 

review under NEPA and has determined 

that this final determination would not 

have a significant individual or 

cumulative impact to human health 

and/or environment, and is consistent 

with actions contained in DOE 

categorical exclusion A4. See 10 CFR 

1021.410. Therefore, DOE has 

determined that promulgation of this 

final determination is not a major 

Federal action significantly affecting the 

quality of the human environment 

within the meaning of NEPA, and does 

not require an environmental 

assessment or an environmental impact 

statement. 

E. Review Under Executive Order 13132 

E.O. 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 final 

determination and has determined that 

it would 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. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the equipment 

that is the subject of this final 

determination. States can petition DOE 

for exemption from such preemption to 

the extent, and based on criteria, set 

forth in EPCA. (See 42 U.S.C. 6316(a) 

and (b); 42 U.S.C. 6297) As this final 

determination does not amend the 

standards for UFHWSTs, there is no 

impact on the policymaking discretion 

of the States. Therefore, no further 


jspears on DSK121TN23PROD with RULES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 31383 

action is required by Executive Order 

13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of E.O. 

12988, ‘‘Civil Justice Reform,’’ 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. 61 FR 4729 (Feb. 7, 1996). 

Regarding the review required by 

section 3(a), section 3(b) of E.O. 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) Clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms, and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of E.O. 12988 requires Executive 

agencies to review regulations in light of 

applicable standards in section 3(a) and 

section 3(b) to determine whether they 

are met or it is unreasonable to meet one 

or more of them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, this final 

determination meets the relevant 

standards of E.O. 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. Public Law 104–4, sec. 

201 (codified at 2 U.S.C. 1531). For a 

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 

‘‘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. DOE’s policy 

statement is also available at 

www.energy.gov/sites/prod/files/gcprod/ 

documents/umra_97.pdf. 

DOE examined this final 

determination according to UMRA and 

its statement of policy and determined 

that the final determination does not 

contain a Federal intergovernmental 

mandate, nor is it expected to require 

expenditures of $100 million or more in 

any one year by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector. As a result, the analytical 

requirements of UMRA do not apply. 

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 

final determination 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 E.O. 12630, 

‘‘Governmental Actions and Interference 

with Constitutionally Protected Property 

Rights,’’ 53 FR 8859 (March 18, 1988), 

DOE has determined that this final 

determination will 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). Pursuant to 

OMB Memorandum M–19–15, 

Improving Implementation of the 

Information Quality Act (April 24, 

2019), DOE published updated 

guidelines which are available at: 

www.energy.gov/sites/prod/files/2019/ 

12/f70/DOE%20Final%20

Updated%20IQA%20Guidelines

%20Dec%202019.pdf. DOE has 

reviewed this final determination under 

the OMB and DOE guidelines and has 

concluded that it is consistent with 

applicable policies in those guidelines. 

K. Review Under Executive Order 13211 

E.O. 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 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 Executive 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 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 concluded that this final 

determination, which does not amend 

energy conservation standards for 

UFHWSTs, is not a significant energy 

action under E.O. 12866. Moreover, it 

will 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 at OIRA. Accordingly, it 

is not a significant energy action, and 

DOE has not prepared a Statement of 

Energy Effects. 

L. Review Under the 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 


jspears on DSK121TN23PROD with RULES1
31384 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Rules and Regulations 

35The 2007 ‘‘Energy Conservation Standards 

Rulemaking Peer Review Report’’ is available at the 

following website: www.energy.gov/eere/buildings/ 

downloads/energy-conservation-standardsrulemaking-peer-review-report-0. (Last accessed 

Feb. 21, 2022.) 

36The December 2021 NAS report is available at 

www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards. (Last accessed Feb. 21, 

2022.) 

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.’’ 70 FR 2664, 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and the analyses 

that are typically used and prepared a 

report describing that peer review.35

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. Because 

available data, models, and 

technological understanding have 

changed since 2007, DOE has 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. DOE is in the 

process of evaluating the resulting 

December 2021 NAS report.36

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

report to Congress on the promulgation 

of this final determination prior to its 

effective date. The report will state that 

it has been determined that the final 

determination is not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). 

VII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this final determination. 

Signing Authority 

This document of the Department of 

Energy was signed on May 18, 2022, by 

Kelly J. Speakes-Backman, Principal 

Deputy Assistant Secretary for Energy 

Efficiency and Renewable Energy, 

pursuant to delegated authority from the 

Secretary of Energy. That document 

with the original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

the 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 May 18, 

2022. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energyl 

[FR Doc. 2022–11128 Filed 5–23–22; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–1071; Project 

Identifier AD–2021–01055–E; Amendment 

39–22044; AD 2022–10–06] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

Corporation Turboshaft Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is superseding 

Airworthiness Directive (AD) 2017–18– 

14, which applied to certain Rolls-Royce 

Corporation (RRC) 250 model turboshaft 

engines. AD 2017–18–14 required 

repetitive visual inspections and 

fluorescent penetrant inspections (FPIs) 

of the 3rd-stage turbine wheel and 

removal from service of the 4th-stage 

turbine wheel. This AD was prompted 

by in-service turbine blade failures that 

resulted in the loss of power and engine 

in-flight shutdowns. This AD requires 

replacement of the 3rd-stage and 4thstage turbine wheels. This AD also 

revises the applicability to include an 

additional turboshaft engine model. The 

FAA is issuing this AD to address the 

unsafe condition on these products. 

DATES: This AD is effective June 28, 

2022. 

ADDRESSES: For service information 

identified in this final rule, contact 

Rolls-Royce Corporation, 450 South 

Meridian Street, Mail Code NB–01–06, 

Indianapolis, IN 46225; phone: (317) 

230–2720; email: HelicoptCustSupp@

Rolls-Royce.com; website: www.rollsroyce.com. You may view this service 

information at the Airworthiness 

Products Section, Operational Safety 

Branch, FAA, 1200 District Avenue, 

Burlington, MA 01803. For information 

on the availability of this material at the 

FAA, call (817) 222–5110. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–1071; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

final rule, any comments received, and 

other information. The address for 

Docket Operations is U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE, Washington, DC 20590. 

FOR FURTHER INFORMATION CONTACT: John 

Tallarovic, Aviation Safety Engineer, 

Chicago ACO, FAA, 2300 E Devon 

Avenue, Des Plaines, IL 60018; phone: 

(847) 294–8180; email: 

john.m.tallarovic@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 to supersede AD 2017–18–14, 

Amendment 39–19023 (82 FR 42443, 

September 8, 2017), (AD 2017–18–14). 

AD 2017–18–14 applied to certain RRC 

250–C20, –C20B, –C20F, –C20J, –C20R, 

–C20R/1, –C20R/2, –C20R/4, –C20W, 

–C300/A1, and –C300/B1 turboshaft 

engines with either a 3rd-stage turbine 

wheel, part number (P/N) 23065818, or 

a 4th-stage turbine wheel, P/N 23055944 

or RR30000240, installed. The NPRM 

published in the Federal Register on 

January 14, 2022 (87 FR 2365). The 

NPRM was prompted by in-service 

turbine blade failures that resulted in 

the loss of power and engine in-flight 

shutdowns. Since the FAA issued AD 

2017–18–14, the manufacturer 

redesigned the 3rd-stage turbine wheel. 

The manufacturer published RollsRoyce Alert Commercial Engine Bulletin 

(CEB) CEB A–1428/CEB A–72–4111 

(single document), which describes 

procedures for replacement of the 3rdstage turbine wheel, P/N 23065818, with 

the new increased blade fillet 3rd-stage 

turbine wheel, P/N M250–10473. 

Additionally, the FAA determined that 

the RRC 250–C20C (T63–A–720) model 

turboshaft engine is also susceptible to 

the unsafe condition. In the NPRM, the 

FAA proposed to require replacement of 

the 3rd-stage and 4th-stage turbine 


jspears on DSK121TN23PROD with RULES1