[Federal Register Volume 87, Number 108 (Monday, June 6, 2022)]
[Rules and Regulations]
[Pages 34067-34093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12107]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0034]
RIN 1904-AE56


Energy Conservation Program: Energy Conservation Standards for 
Commercial Prerinse Spray Valves

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Final determination.

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SUMMARY: The Energy Policy and Conservation Act (``EPCA''), as amended, 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including commercial 
prerinse spray valves (``CPSVs'') equipment. EPCA also requires the 
U.S. Department of Energy (``DOE'' or ``the Department'') to 
periodically determine whether more stringent, amended standards would 
be technologically feasible and economically justified, and would 
result in significant energy savings. In this final determination, DOE 
has determined that amended energy conservation standards for 
commercial prerinse spray valves are not needed.

DATES: The effective date of this rule is July 6, 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/EERE-2019-BT-STD-0034. 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: <a href="/cdn-cgi/l/email-protection#4b0a3b3b27222a25282e183f2a252f2a392f381a3e2e383f222425380b2e2e652f242e652c243d"><span class="__cf_email__" data-cfemail="92d3e2e2fefbf3fcf1f7c1e6f3fcf6f3e0f6e1c3e7f7e1e6fbfdfce1d2f7f7bcf6fdf7bcf5fde4">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Mr. Bryan Berringer, 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: (202) 586-0371. Email: 
<a href="/cdn-cgi/l/email-protection#c687b6b6aaafa7a8a5a395b2a7a8a2a7b4a2b597b3a3b5b2afa9a8b586a3a3e8a2a9a3e8a1a9b0"><span class="__cf_email__" data-cfemail="b4f5c4c4d8ddd5dad7d1e7c0d5dad0d5c6d0c7e5c1d1c7c0dddbdac7f4d1d19ad0dbd19ad3dbc2">[email protected]</span></a>.
    Ms. Kathryn McIntosh, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-2002. Email: 
<a href="/cdn-cgi/l/email-protection#357e54415d474c5b1b78567c5b415a465d755d441b515a501b525a43"><span class="__cf_email__" data-cfemail="1b507a6f7369627535567852756f7468735b736a357f747e357c746d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Determination
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemakings for Commercial Prerinse 
Spray Valves
III. General Discussion

[[Page 34068]]

    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. Cost Effectiveness
    F. Further Considerations
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Scope of Coverage
    2. Technology Options
    B. Screening Analysis
    1. Screened Out Technologies
    2. Remaining Technologies
    3. Product Classes
    4. Market Assessment
    C. Engineering Analysis
    1. Efficiency Analysis
    2. Cost Analysis
    3. Cost Efficiency Results
    D. Markups Analysis
    E. Energy and Water Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Water and Wastewater Prices
    6. Maintenance and Repair Costs
    7. Product Lifetime
    8. Discount Rates
    9. Energy Efficiency Distribution in the No-New-Standards Case
    10. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. Customer Choice Scenarios
    3. National Energy Savings
    4. Net Present Value Analysis
    I. Manufacturer Impact Analysis
    1. Overview
    2. GRIM Analysis and Key Inputs
V. Analytical Results and Conclusions
    A. Economic Impacts on Individual Consumers
    B. Economic Impacts on Manufacturers
    1. Industry Cash Flow Analysis Results
    2. Direct Impacts on Employment
    3. Impacts on Manufacturing Capacity
    4. Impacts on Subgroups of Manufacturers
    5. Cumulative Regulatory Burden
    C. National Impact Analysis
    1. Significance of Energy Savings
    2. Net Present Value of Consumer Costs and Benefits
    D. Final Determination
    1. Technological Feasibility
    2. Cost Effectiveness
    3. Significant Conservation of Energy
    4. Additional Consideration
    5. Summary
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    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

I. Synopsis of the Final Determination

    Title III, Part B \1\ of EPCA,\2\ established the Energy 
Conservation Program for Consumer Products Other Than Automobiles. (42 
U.S.C. 6291-6309) These products include CPSVs, the subject of this 
final determination.\3\
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \2\ All 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 reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \3\ Because Congress included commercial prerinse spray valves 
in Part B of Title III of EPCA, the consumer product provisions of 
Part B (not the industrial equipment provisions of Part C) apply to 
CPSVs. However, because CPSVs are commonly considered to be 
commercial equipment, as a matter of administrative convenience and 
to minimize confusion among interested parties, DOE placed the 
requirements for CPSVs into subpart O of 10 CFR part 431. Part 431 
contains DOE regulations for commercial and industrial equipment. 
DOE refers to CPSVs as either ``products'' or ``equipment.''
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    DOE is issuing this final determination pursuant to the EPCA 
requirement that, not later than 6 years after issuance of any final 
rule establishing or amending a standard, DOE must publish either a 
notification of determination that standards for the product do not 
need to be amended, or a notice of proposed rulemaking (``NOPR'') 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m))
    For this final determination, DOE analyzed CPSVs subject to 
standards specified in title 10 of the Code of Federal Regulations 
(``CFR'') part 431, section 266.
    DOE first analyzed the technological feasibility of more energy 
(water) efficient CPSVs and CPSVs with lower energy use. For those 
CPSVs for which DOE determined higher standards to be technologically 
feasible, DOE estimated energy savings that would result from potential 
energy conservation standards by conducting a national impacts analysis 
(``NIA''). DOE evaluated whether higher standards would be cost 
effective by conducting life-cycle cost (``LCC'') and payback period 
(``PBP'') analyses and estimated the net present value (``NPV'') of the 
total costs and benefits experienced by consumers.
    Based on the results of the analyses, summarized in section V of 
this document, DOE has determined that current standards for CPSVs do 
not need to be amended because any potential benefits are outweighed by 
the risk of increased energy and water usage due to the increased risk 
of product type switching, costs, and additional burden to 
manufacturers.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final determination, as well as some of the historical 
background relevant to the establishment of standards for CPSVs.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include CPSVs, the 
subject of this document. (42 U.S.C. 6291(33)). EPCA prescribed energy 
conservation standards (in terms of flow rate) for these products (42 
U.S.C. 6295(dd)) and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6295(m)).
    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. 6291), test procedures (42 U.S.C. 6293), 
labeling (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 
6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    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 each covered product. (42 U.S.C. 
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products 
must use the prescribed DOE test procedure as the basis for certifying 
to DOE that their products comply with the applicable energy 
conservation standards adopted under EPCA and when making 
representations to the public regarding the energy use or efficiency of 
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, 
DOE must use

[[Page 34069]]

these test procedures to determine whether the products comply with 
standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test 
procedures for commercial prerinse spray valves appear at 10 CFR 
431.264.
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) California, however, has a 
statutory exemption to preemption for CPSV standards adopted by the 
California Energy Commission before January 1, 2005. (42 U.S.C. 
6297(c)(7)) As a result, while Federal CPSV standards apply in 
California, California's CPSV standards also apply for standards 
adopted by January 1, 2005, as they are exempt from preemption. In 
2018, California revised its regulations so that the maximum flow rate 
requirements align with those implemented by DOE for CPSVs. DOE may, 
however, grant waivers of Federal preemption for particular State laws 
or regulations, in accordance with the procedures and other provisions 
set forth under EPCA. (See 42 U.S.C. 6297(d))
    Pursuant to the amendments contained in the Energy Independence and 
Security Act of 2007 (``EISA 2007''), Public Law 110-140, any final 
rule for new or amended energy conservation standards promulgated after 
July 1, 2010, is required to address standby mode and off mode energy 
use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard 
for a covered product after that date, it must, if justified by the 
criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), 
incorporate standby mode and off mode energy use into a single 
standard, or, if that is not feasible, adopt a separate standard for 
such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) 
Because CPSVs only consume energy and water in active mode, DOE's test 
procedures for CPSVs do not address standby mode and off mode energy 
use as they are not applicable for this product.
    DOE must periodically review its already established energy 
conservation standards for a covered product no later than 6 years from 
the issuance of a final rule establishing or amending a standard for a 
covered product. (42 U.S.C. 6295(m)) This 6-year look-back provision 
requires that DOE publish either a determination that standards do not 
need to be amended or a NOPR, including new proposed standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)(A)-
(B)) 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 notification 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. 6295(m)(3)(B)). DOE must make the analysis on 
which a determination is based publicly available and provide an 
opportunity for written comment. (42 U.S.C. 6295(m)(2)).
    A determination that amended standards are not needed must be based 
on consideration of whether amended standards will result in 
significant conservation of energy, are technologically feasible, and 
are cost effective. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) 
Additionally, any new or amended energy conservation standard 
prescribed by the Secretary of Energy (``Secretary'') for any type (or 
class) of covered product shall be designed to achieve the maximum 
improvement in energy efficiency that the Secretary determines is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A)). Among the factors DOE considers in evaluating whether a 
proposed standard level is economically justified is whether the 
proposed standard at that level is cost effective, as defined under 42 
U.S.C. 6295(o)(2)(B)(i)(II). Under 42 U.S.C. 6295(o)(2)(B)(i)(II), an 
evaluation of cost effectiveness requires DOE to consider 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 products that 
are likely to result from the standard. (42 U.S.C. 6295(n)(2) and 42 
U.S.C. 6295(o)(2)(B)(i)(II)).
    DOE is publishing this final determination in satisfaction of the 
6-year review requirement in EPCA.

B. Background

1. Current Standards
    In a final rule published on January 27, 2016, (``January 2016 
Final Rule''), DOE prescribed the current energy conservation standards 
for CPSVs manufactured on and after January 28, 2019. 81 FR 4748. These 
standards prescribe a maximum flow rate in gallons per minute (``gpm'') 
for each product class and are set forth in DOE's regulations at 10 CFR 
431.266 and repeated in Table II.1.

    Table II.1--Federal Energy Conservation Standards for Commercial
                          Prerinse Spray Valves
------------------------------------------------------------------------
                                                             Flow rate
     Product class (spray force in ounce-force, ozf)           (gpm)
------------------------------------------------------------------------
Product Class 1 (<=5.0 ozf).............................            1.00
Product Class 2 (>5.0 ozf and <=8.0 ozf)................            1.20
Product Class 3 (>8.0 ozf)..............................            1.28
------------------------------------------------------------------------

2. History of Standards Rulemakings for Commercial Prerinse Spray 
Valves
    In support of the present review of the CPSV energy conservation 
standards, on June 10, 2020, DOE published a request for information 
(``RFI'') that identified various issues on which DOE sought comment to 
inform its determination of whether the standards need to be amended. 
85 FR 35383 (``June 2020 RFI''). Then, on August 18, 2021, DOE 
published a notice of proposed determination (``August 2021 NOPD'') in 
which DOE initially determined that amended energy conservation 
standards for CPSVs were not needed. 86 FR 46330. On September 1, 2021, 
DOE held a public webinar in which it presented the methods and 
analysis in the August 2021 NOPD and solicited public comment.\4\
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    \4\ Webinar transcript available at www.regulations.gov/document/EERE-2019-BT-STD-0034-0015.
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    DOE received written comments in response to the August 2021 NOPD 
from the interested parties listed in Table II.2.

              Table II.2--August 2021 NOPD Written Comments
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                                   Reference in this
         Organization(s)                 final         Organization type
                                     determination
------------------------------------------------------------------------
Appliance Standards Awareness     Efficiency          Efficiency
 Project, Natural Resources        Advocates.          Organization.
 Defense Council.

[[Page 34070]]

 
Northwest Energy Efficiency       NEEA..............  Efficiency
 Alliance.                                             Organization.
Pacific Gas and Electric          CA IOUs...........  Utilities.
 Company, San Diego Gas and
 Electric, and Southern
 California Edison.
Plumbing Manufacturers Inc......  PMI...............  Trade Association.
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    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\5\
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    \5\ The parenthetical reference provides a reference for 
information located in the docket. (Docket No. EERE-2019-BT-STD-
0034, which is maintained at www.regulations.gov/docket/EERE-2019-BT-STD-0034). The references are arranged as follows: (commenter 
name, comment docket ID number, page of that document).
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III. General Discussion

    DOE developed this final determination after considering comments, 
data, and information from interested parties that represent a variety 
of interests. This document addresses issues raised by these 
commenters.

A. Product Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered products into product classes by the type of energy 
used or by capacity or other performance-related features that justify 
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility of the feature to the consumer and other factors 
DOE determines are appropriate. (42 U.S.C. 6295(q)) The CPSV product 
classes for this final determination are discussed in further detail in 
section IV.B.3 of this document. This determination covers CPSVs, which 
are defined as handheld devices that have a release-to-close valve and 
are suitable for removing food residue from food service items before 
cleaning them in commercial dishwashing or ware washing equipment. 10 
CFR 431.262. DOE may determine that a device is suitable for removing 
food residue from food service items before cleaning them in commercial 
dishwashing or ware washing equipment based on any or all of the 
following:
    (1) Equipment design and representations (e.g., whether equipment 
is represented as being capable of rinsing dishes as compared to 
equipment that is represented exclusively for washing walls and floors 
or animal washing),
    (2) Channels of marketing and sales (e.g., whether equipment is 
marketed or sold through outlets that market or sell to food service 
entities), and/or
    (3) Actual sales (including whether the end-users are restaurants 
or commercial or institutional kitchens, even if those sales are 
indirectly through an entity such as a distributor).\6\
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    \6\ The definition of commercial prerinse spray valve was 
recently amended in the March 2022 test procedure final rule, 87 FR 
13901, 13905 (March 11, 2022). In that final rule, DOE stated that 
the amended definition only codified existing guidance and did not 
change the scope of the definition. Id.
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Id.
    The scope of coverage is discussed in further detail in section 
IV.A.1. of this document.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) 
Manufacturers of covered products must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product. (42 U.S.C. 
6295(s) and 42 U.S.C. 6293(c)). DOE's current energy conservation 
standards for CPSVs are expressed in terms of gpm. 10 CFR 431.266.
    On March 11, 2022, DOE published a test procedure final rule for 
CPSVs that amended the definition of ``commercial prerinse spray 
valve'' to codify existing guidance for determining whether a device is 
suitable for removing food residue from food service items that did not 
change the scope of products covered, updated references to the 
reaffirmed ASTM International (``ASTM'') Standard (ASTM F2324-13 
(2019)), and explicitly permitted voluntary representations at water 
pressures other than 60 pounds per square inch (``psi'') in 
manufacturer literature. 87 FR 13901 (``March 2022 TP Final Rule''). 
DOE determined that the amendments to the test procedure adopted in the 
March 2022 TP Final Rule will not alter the measured efficiency of 
CPSVs or require retesting or recertification solely as a result of 
DOE's adoption of the amendments to the test procedures. 87 FR 13901, 
13903.

C. Technological Feasibility

1. General
    In evaluating potential amendments to energy conservation 
standards, DOE conducts a screening analysis based on information 
gathered on all current technology options and prototype designs that 
could improve the efficiency of the products or equipment that are the 
subject of the determination. 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. DOE considers technologies 
incorporated in commercially available products or in working 
prototypes to be technologically feasible. Sections 6(b)(3)(i) and 
7(b)(1) of appendix A to 10 CFR part 430, subpart C (``appendix A'').
    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 product utility or availability; (3) adverse impacts on 
health or safety; and (4) unique pathway proprietary technologies. 
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.B of 
this document discusses the results of the screening analysis for 
CPSVs, particularly the designs DOE considered, those it screened out, 
and those that are the basis for the standards considered in this 
determination. For further details on the screening analysis for this 
final determination, see chapter 4 of the final determination technical 
support document (``TSD'').
2. Maximum Technologically Feasible Levels
    As when DOE proposes to adopt an amended standard for a type or 
class of covered product, it must determine the maximum improvement in 
energy efficiency or maximum reduction in

[[Page 34071]]

energy use that is technologically feasible for such a product. (42 
U.S.C. 6295(p)(1)). Accordingly, in the engineering analysis, DOE 
determined the maximum technologically feasible (``max-tech'') 
improvements in energy efficiency for CPSVs using the design parameters 
for the most efficient products available on the market or in working 
prototypes. The max-tech levels that DOE determined for this analysis 
are described in section IV.C of this document and in chapter 5 of the 
final determination TSD.

D. Energy Savings

1. Determination of Savings
    For each efficiency level (``EL'') evaluated, DOE projected energy 
savings from application of the efficiency level to the CPSVs purchased 
in the 30-year period that begins in the assumed year of compliance 
with the potential standards (2027-2056). The savings are measured over 
the entire lifetime of the CPSVs purchased in the previous 30-year 
period. DOE quantified the energy savings attributable to each 
efficiency level as the difference in energy consumption between each 
standards case and the no-new-standards case. The no-new-standards case 
represents a projection of energy consumption that reflects how the 
market for a product would likely evolve in the absence of amended 
energy conservation standards.
    DOE used its NIA spreadsheet model to estimate national energy 
savings (``NES'') from potential amended or new standards for CPSVs. 
The NIA spreadsheet model (described in section IV.H of this document) 
calculates energy savings in terms of site energy, which is the energy 
directly consumed by products at the locations where they are used. For 
electricity, DOE reports NES in terms of primary energy savings, which 
is the savings in the energy that is used to generate and transmit the 
site electricity. DOE also calculates NES in terms of full-fuel-cycle 
(``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.\7\ 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.H of this document.
---------------------------------------------------------------------------

    \7\ The FFC metric is discussed in DOE's statement of policy and 
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended 
at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    In determining whether amended standards are needed, DOE must 
consider whether such standards will result in significant conservation 
of energy. (42 U.S.C. 6295(m)(1)(A)) 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.\8\ For example, the United States rejoined the 
Paris Agreement on February 19, 2021. As part of that agreement, the 
United States has committed to reducing greenhouse gas (``GHG'') 
emissions in order to limit the rise in mean global temperature.\9\ As 
such, energy savings that reduce GHG emissions have taken on greater 
importance. Accordingly, DOE evaluates the significance of energy 
savings on a case-by-case basis (as discussed in section V.D.3).
---------------------------------------------------------------------------

    \8\ See 86 FR 70892, 70901 (Dec. 13, 2021).
    \9\ See Executive Order 14008, 86 FR 7619 (Feb. 1, 2021), 
``Tackling the Climate Crisis at Home and Abroad''.
---------------------------------------------------------------------------

E. Cost Effectiveness

    In making a determination of whether amended energy conservation 
standards are needed, EPCA requires DOE to consider the cost 
effectiveness of amended standards in the context of the savings in 
operating costs throughout the estimated average life of the covered 
product 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. 6295(m)(1)(A), 42 U.S.C. 
6295(n)(2), and 42 U.S.C. 6295(o)(2)(B)(i)(II)).
    In determining cost effectiveness of amending standards for CPSVs, 
DOE conducted LCC and PBP analyses that estimate the costs and benefits 
to users from potential standards. To further inform DOE's 
consideration of the cost effectiveness of potential amended standards, 
DOE considered the NPV of total costs and benefits estimated as part of 
the NIA. The inputs for determining the NPV of the total costs and 
benefits experienced by consumers are (1) total annual installed cost, 
(2) total annual operating costs (energy costs and repair and 
maintenance costs), and (3) a discount factor to calculate the present 
value of costs and savings.

F. Further Considerations

    As stated previously, pursuant to EPCA, absent DOE publishing a 
notification of determination that energy conservation standards for 
CPSVs do not need to be amended, DOE must issue a NOPR that includes 
new proposed standards. (42 U.S.C. 6295(m)(1)(B)). The new proposed 
standards in any such NOPR must be based on the criteria established 
under 42 U.S.C. 6295(o) and follow the procedures established under 42 
U.S.C. 6295(p). (42 U.S.C. 6295(m)(1)(B)). The criteria in 42 U.S.C. 
6295(o) require that standards be designed to achieve the maximum 
improvement in energy efficiency, which the Secretary determines is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)(A)). In deciding whether a proposed standard is economically 
justified, DOE must determine whether the benefits of the standard 
exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)). DOE must make this 
determination after receiving comments on the proposed standard, and by 
considering, to the greatest extent practicable, the following seven 
statutory factors:

    (1) The economic impact of the standard on manufacturers and 
consumers of the 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 for, or maintenance 
expenses of the covered products that are likely to result from the 
standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered products 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 and water conservation; and
    (7) Other factors the Secretary considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    As discussed in the January 2016 Final Rule, DOE found that amended 
standards at a level more stringent than those adopted would not be 
economically justified under the considerations of the seven factors 
prescribed in EPCA. 81 FR 4748, 4794 (Jan. 27, 2016). Specifically, the 
Secretary concluded that at the more stringent standards levels, the 
benefits of energy savings, positive NPV of consumer benefits, emission 
reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the reduction in manufacturer 
industry value. Id. Consequently, the Secretary concluded that 
standards more stringent than those adopted were not economically 
justified. Id. For the determination in

[[Page 34072]]

this document, DOE has considered potential manufacturer impacts 
associated with amended energy conservation standards (See section IV.I 
of this document).

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
final determination regarding CPSVs. Separate subsections address each 
component of DOE's analyses. DOE used several analytical tools to 
estimate the impact of potential energy conservation standards. The 
first tool is a spreadsheet that calculates the LCC savings and PBP of 
potential energy conservation standards. The NIA uses a second 
spreadsheet set that provides shipments projections and calculates NES 
and NPV of total consumer costs and savings expected to result from 
potential energy conservation standards. These spreadsheet tools are 
available on the website: www.regulations.gov/docket/EERE-2019-BT-STD-0034.
    In response to the August 2021 NOPD, PMI commented generally that 
they support DOE's proposed determination that amended energy 
conservation standards are not needed. (PMI, No. 16 at p. 1)

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this final determination include (1) a determination of 
the scope and product classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends, and (6) technologies or design options 
that could improve the energy efficiency of commercial prerinse spray 
valves. The key findings of DOE's market assessment are summarized in 
the following sections. See chapter 3 of the final determination TSD 
for further discussion of the market and technology assessment.
1. Scope of Coverage
    In this analysis, DOE relied on the definition of CPSVs in 10 CFR 
431.262, which defines CPSV as a handheld device that has a release-to-
close valve and is suitable for removing food residue from food service 
items before cleaning them in commercial dishwashing or ware washing 
equipment. DOE may determine that a device is suitable for removing 
food residue from food service items before cleaning them in commercial 
dishwashing or ware washing equipment based on any or all of the 
following: (1) equipment design and representations (e.g., whether 
equipment is represented as being capable of rinsing dishes as compared 
to equipment that is represented exclusively for washing walls and 
floors or animal washing); (2) channels of marketing and sales (e.g., 
whether equipment is marketed or sold through outlets that market or 
sell to food service entities); and/or (3) actual sales (including 
whether the end-users are restaurants or commercial or institutional 
kitchens, even if those sales are indirectly through an entity such as 
a distributor). 10 CFR 431.262. Any product meeting the definition of 
CPSV is included in DOE's scope of coverage.
2. Technology Options
    In the August 2021 NOPD, DOE identified several technology options 
that would be expected to improve the efficiency of CPSVs, as measured 
by the DOE test procedure. 86 FR 46330, 46336. The complete list of 
technology options identified are as follows:
    <bullet> Addition of flow control insert,
    <bullet> Smaller spray hole area,
    <bullet> Aerators,
    <bullet> Additional valves,
    <bullet> Changing spray hole shape, and
    <bullet> Venturi meter to orifice plate nozzle geometries. \10\
---------------------------------------------------------------------------

    \10\ A venturi meter is a nozzle where the fluid accelerates 
through a converging cone of 15-20 degrees. An orifice plate is a 
flat plate with a circular hole drilled in it.
---------------------------------------------------------------------------

    DOE also discussed use of a pressure compensating aerator (``PCA'') 
as a technology to potentially improve efficiency. 86 FR 46330, 46336. 
DOE stated that PCAs typically use an O-ring that compresses and 
relaxes in response to system pressure. When there is no pressure, the 
O-ring is relaxed and allows the aerator to be fully opened. As the 
pressure increases, the O-ring is compressed into the aerator opening 
to partially block water passage. This establishes an inverse 
relationship between the area of the aerator opening and the water 
pressure, and can be designed such that the water flow rate is 
approximately constant with pressure. Id
    Further, DOE stated that the Federal test procedure measures flow 
rate and spray force at a singular, representative water pressure and 
adding a PCA would not change the flow rate or spray force at DOE's 
test pressure. Id. DOE requested comment on its determination that PCAs 
would not change the flow rate or spray force at DOE's test pressure. 
Id.
    In response to the August 2021 NOPD, the CA IOUs agreed that PCAs 
would not change the flow rate or spray force under DOE's test 
procedure. (CA IOUs, No. 18 at p. 2) The CA IOUs recommended DOE 
require testing at two test pressures, 40 psi and 60 psi, so that PCAs 
can be included in the engineering analysis. (Id. at p. 2) Similarly, 
NEEA recommended DOE require testing at both 60 psi and 40 psi and 
include PCAs as a technology option to increase customer satisfaction. 
(NEEA, No. 19 at pp. 3-4) NEEA asserted that under DOE's existing test 
procedure there is limited opportunity for efficiency improvements and 
that requiring testing at more pressures could prevent product class 
switching and encourage PCAs as a technology option. (NEEA, No. 19 at 
p. 1) NEEA commented that DOE amending the test procedure to require 
testing at lower pressures would encourage technologies, such as PCAs, 
that increase customer satisfaction at lower flow rates. (NEEA, No. 19 
at p. 1-2)
    In the March 2022 TP Final Rule, DOE amended its test procedure to 
explicitly permit voluntary testing at alternative pressures in 
addition to testing at 60 psi. 87 FR 13901, 13906. This amendment 
permits manufacturers to market any potential benefits of PCAs at 
alternate pressures. DOE notes, however, the test pressure specified in 
10 CFR 431.264 is based on ASTM F2324, which is an industry consensus 
standard that includes input from a wide variety of national 
stakeholders and was corroborated with the data compiled for a prior 
test procedure rulemaking. Id. DOE noted that it has not received any 
new data indicating that an alternative test pressure would be more 
representative. Id.
    Moreover, relative to a CPSV without a PCA, a CPSV with a PCA would 
have greater water usage at pressures below 60 psi and lesser water 
usage at pressures above 60 psi. As such, PCAs may not represent a 
technology option that saves any water because low-pressure 
applications would consume more water than applications at the 
representative pressure of 60 psi. Accordingly, DOE does not consider 
PCAs as a technology option that would save energy or water.
    In summary, for this analysis, DOE considers the technology options 
shown

[[Page 34073]]

in Table IV.1. Detailed descriptions of these technology options can be 
found in chapter 3 of the final determination TSD.

     Table IV.1--Commercial Prerinse Spray Valves Technology Options
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                            Technology option
------------------------------------------------------------------------
Addition of Flow Control Insert.
Smaller Spray Hole Area.
Aerators.
Additional Valves.
Changing Spray Hole Shape.
Venturi Meter to Orifice Plate Nozzle Geometries.
------------------------------------------------------------------------

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 products 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 product utility or product availability. If it is 
determined that a technology would have significant adverse impact 
on the utility of the product to significant subgroups of consumers 
or would result in the unavailability of any covered product type 
with performance characteristics (including reliability), features, 
sizes, capacities, and volumes that are substantially the same as 
products generally available in the 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.

    Sections 6(b)(3) and 7(b) of appendix A to 10 CFR part 430, subpart 
C.
    In summary, 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.
1. Screened Out Technologies
    In the August 2021 NOPD, DOE proposed to screen out the same 
technology options from the January 2016 Final Rule, which were 
addition of flow control insert, aerators, and additional valves. 86 FR 
46330, 46336. DOE's review of the market continues to support DOE's 
prior determination that these technologies are not suitable for 
further consideration because they are not included in any commercially 
available products or working prototypes and therefore do not meet the 
screening criteria for technologically feasibility, as discussed in 
chapter 4 of the final determination TSD. DOE did not receive any 
comment suggesting including any of these technology options. 
Therefore, DOE has maintained the proposed August 2021 NOPD conclusions 
and has screened out the same technology options as presented in Table 
IV.2.

                                                       Table IV.2--Screened Out Technology Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Screening criteria (X = basis for screening out)
                                                        ------------------------------------------------------------------------------------------------
               Screened technology option                                   Practicability to    Adverse impact                          Unique pathway
                                                          Technological       manufacture,         on product      Adverse impacts on      proprietary
                                                           feasibility    install, and service       utility        health and safety     technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Addition of Flow Control Insert........................               X   ....................  ................  ....................  ................
Aerators...............................................               X   ....................  ................  ....................  ................
Additional Valves......................................               X   ....................  ................  ....................  ................
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Remaining Technologies
    After reviewing each technology, DOE did not screen out the 
following technology options and considers them as design options in 
the engineering analysis, consistent with the August 2021 NOPD:
    <bullet> smaller spray hole area,
    <bullet> changing spray hole shape, and
    <bullet> venturi meter to orifice plate nozzle geometries.
    DOE determined that these technology options are technologically 
feasible because they are being used or have previously been used in 
commercially available products or working prototypes. Also, these 
remaining technology options meet the other screening criteria (i.e., 
practicable to manufacture, install, and service and do not result in 
adverse impacts on consumer utility, product availability, health, or 
safety). For additional details, see chapter 4 of the final 
determination TSD.
3. Product Classes
    In general, when evaluating and establishing energy conservation 
standards, DOE divides the covered product into classes by (1) the type 
of energy used, (2) the capacity of the product, or (3) any other 
performance-related feature that affects energy efficiency and 
justifies different standard levels, considering factors such as 
consumer utility. (42 U.S.C. 6295(q))
    For CPSVs, the current energy conservation standards specified in 
10 CFR 431.266 are based on three product classes determined according 
to spray force, which is a performance-related feature that provides 
utility to the consumer. ``Spray force'' is defined as the amount of 
force exerted onto the spray disc, measured in ounce-force (``ozf''). 
10 CFR 431.262. Table IV.3 lists the current three product classes for 
CPSVs.

   Table IV.3--Current Commercial Prerinse Spray Valve Product Classes
------------------------------------------------------------------------
                                             Spray force in  ounce-force
               Product class                            (ozf)
------------------------------------------------------------------------
Product Class 1...........................  <=5.0 ozf.
Product Class 2...........................  >5.0 ozf and <=8.0 ozf.
Product Class 3...........................  >8.0 ozf.
------------------------------------------------------------------------

    These product classes were based on previous market research that 
identified three distinct end-user applications requiring differing 
amounts of spray force: (1) cleaning delicate glassware and removing 
loose food particles from dishware (which requires the least amount of 
spray force), (2) cleaning wet food, and (3) cleaning baked-on foods

[[Page 34074]]

(which requires the greatest amount of spray force). 81 FR 4748, 4758-
4759.
    In the August 2021 NOPD, DOE proposed to maintain the existing 
product class structure for the analysis conducted. 86 FR 46330, 46337. 
In response, DOE received comments from the CA IOUs and Efficiency 
Advocates suggesting DOE consider an alternate approach using an 
equation-based standard where the maximum water flow rate of a product 
is calculated based on its measured spray force. (CA IOUs, No. 18 at 
pp. 1-2; Efficiency Advocates, No. 17 at pp. 1-2) Upon further review, 
DOE has determined that an equation-based standard would limit the 
design flexibility regarding nozzle and valve characteristics for 
consumers and manufacturers while not yielding any water or energy 
savings. Further discussion on this topic is provided in section 
IV.C.1.b of this document.
    In this final determination, DOE continues to conclude that the 
current three product class structure is appropriate and has maintained 
the same approach.
4. Market Assessment
    For this final determination, DOE relied on government databases, 
retail listings, and industry publications (e.g., manufacturer 
catalogs) to assess the overall state of the industry. DOE used this 
market analysis to generate the shipments analysis, discussed in 
section IV.G. of this document. DOE maintained the nearest neighbor 
switching assumptions \11\ proposed in the August 2021 NOPD, as 
discussed in section IV.G.
---------------------------------------------------------------------------

    \11\ In this scenario, consumers would choose the product with 
the flow rate that is closest to their current product flow rate, 
even if it has a higher spray force (thus product class switching). 
Under the nearest neighbor scenario, DOE assumed 100 percent of 
consumers would choose the closest flow rate. 86 FR 46330, 64344.
---------------------------------------------------------------------------

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of CPSVs. There are two 
elements to consider in the engineering analysis: the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of more efficient 
products, DOE considers technologies and design option combinations not 
eliminated by the screening analysis. For each product class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
product at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
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 products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). 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. For example, the efficiency 
level approach (based on actual products on the market) may be extended 
using the design option approach to interpolate to define ``gap fill'' 
levels (to bridge large gaps between other identified efficiency 
levels) and/or to extrapolate to the max-tech level (particularly in 
cases where the ``max-tech'' level exceeds the maximum efficiency level 
currently available on the market).
    In this final determination, just like what was proposed in the 
August 2021 NOPD and the January 2016 Final Rule, DOE is adopting a 
design option approach. The analysis is performed in terms of 
incremental increases in efficiency (decreases in flow rate) due to 
implementation of selected design options.
a. Baseline Efficiency Levels
    For each product 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 product class represents the characteristics of 
a product 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.
    The current minimum energy conservation standards represent the 
baseline efficiency levels for each product class. The current 
standards for each product class are based on flow rate in gpm.
b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency (i.e., lowest water use in a given product 
class) unit currently available on the market. DOE also defines a max-
tech efficiency level to represent the maximum possible efficiency for 
a given product.
    In the August 2021 NOPR, DOE presented the max-tech CPSV for each 
product class. 86 FR 46330, 46338. DOE noted that product class 2 and 
product class 3 were consistent with the max-tech values used in the 
January 2016 Final Rule, while a new max-tech had been identified for 
product class 1.\12\ DOE did not receive any comment suggesting the 
max-tech values were inappropriate. DOE has used the max-tech 
efficiency level flow rates presented in Table IV.4 in this analysis.
---------------------------------------------------------------------------

    \12\ The new max-tech model utilizes a smaller spray hole area 
to further reduce flow rate. This is not a new technology option; 
rather, it is further utilizing a technology option considered 
during the January 2016 Final Rule.

        Table IV.4--Maximum Efficiency Levels Currently Available
------------------------------------------------------------------------
                                                             Flow rate
                      Product class                            (gpm)
------------------------------------------------------------------------
Product Class 1.........................................            0.45
Product Class 2.........................................            0.73
Product Class 3.........................................            1.13
------------------------------------------------------------------------

    In the January 2016 Final Rule, DOE presented a theoretical linear 
relationship between CPSV flow rate and spray force, derived from both 
Bernoulli's principle of incompressible flow and the concept of 
conservation of mass in a fluid system. 81 FR 4748, 4762. DOE had 
verified this linear relationship through market testing of available 
products and close matching between the theoretical relationship and 
the flow rates and spray forces of available products. Id. In the 
August 2021 NOPD, DOE stated that it continued to use the linear 
relationship between CPSV flow rate and spray force in its engineering 
analysis. 86 FR 46330, 46339. Specifically, in chapter 5 of the August 
2021 NOPD TSD,\13\ DOE discusses that while DOE generally

[[Page 34075]]

relied on manufacturer reported spray force data and prior DOE testing 
to characterize the range of spray forces available on the market, DOE 
used the linear relationship to inform how various technology options 
that reduce flow rate would impact spray force. The relationship 
between flow rate and spray force is given below:
---------------------------------------------------------------------------

    \13\ Chapter 5 of the August 2021 NOPD TSD is available at 
www.regulations.gov/document/EERE-2019-BT-STD-0034-0010.
    \14\ See chapter 5 of the August 2021 NOPD TSD.
    [GRAPHIC] [TIFF OMITTED] TR06JN22.000
    
    In response to the August 2021 NOPD, both the Efficiency Advocates 
and CA IOUs commented that there are spray valves in the DOE Compliance 
Certification Database (``CCD'') with similar flow rate and a range of 
spray forces, suggesting manufacturers may be able to reduce flow rate 
without losing spray force. Accordingly, both recommended that DOE 
consider setting maximum flow rate standard based on a linear 
relationship that incorporates spray force. (Efficiency Advocates, No. 
17 at pp. 1-2; CA IOUs, No. 18 at pp. 1-2)
    DOE notes that the equation relating spray force and flow rate is 
theoretical and while it aligns well with what DOE has observed in the 
industry, there is going to be some amount of deviation observed in 
industry as the theoretical relationship does not perfectly translate 
to the real world. The theoretical relationship includes assumptions 
about ideal flow through a nozzle, which assumes certain factors are 
constant (i.e., uniform velocity profile, viscosity, turbulence, etc.). 
While these terms can generally be treated as constant in modeling and 
estimating, they are present in real world applications. Therefore, the 
linear equation is approximately accurate for modeling what the 
theoretical spray force would be for a given flow rate. As discussed 
previously, DOE used the equation in the engineering analysis only to 
inform how various technology options that reduce flow rate would 
impact spray force.
    Setting an efficiency standard based on the equation, however, 
would allow for very little freedom in manufacturer designs and little 
tolerance for deviations beyond the theoretical linear relationship 
between spray force and flow rate. DOE has previously acknowledged that 
other characteristics beyond spray force, including spray shape and the 
amount of splash back, could also affect consumer utility of CPSVs. 81 
FR 4748, 4759. An equation-based standard could run the risk of only 
permitting certain spray shapes and splash back characteristics to meet 
this theoretical equation-based standard. In other words, an equation-
based standard could require spray valve designs that have minimal 
deviation from the ideal flow assumptions included in the derivation of 
Equation 1. In effect, an equation-based approach could force all CPSVs 
to look exactly the same. Conversely, keeping the proposed approach of 
one flow rate standard per product class continues to allow for some 
flexibility and tolerance in design.
    The CA IOUs and Efficiency Advocates further suggested that an 
equation-based efficiency standard would encourage products that 
deliver a higher spray force while reducing flow rate (and in turn, 
reducing water consumption). (Efficiency Advocates, No. 17 at p. 1; CA 
IOUs, No. 18 at p. 1) The Efficiency Advocates also suggested that an 
equation-based approach would reduce the likelihood of product 
switching. (Efficiency Advocates, No. 17 at p. 1)
    DOE does not agree that an equation-based standard would reduce 
product switching. A CPSV could be designed to achieve the hypothetical 
equation-based standard by either changing the spray force, or by 
changing the flow rate. The Efficiency Advocates' suggestion is 
premised on consumers selecting products based on spray force (i.e., 
under an equation-based standard consumers would select the lowest flow 
rate that provides the desired spray force). DOE's review of the market 
indicates that manufacturers typically advertise only flow rate, 
suggesting that in selecting CPSVs, flow rate is the more determinative 
characteristic. Accordingly, DOE's analysis assumes that consumers 
switch to the nearest flow rate, not nearest spray force (i.e., nearest 
neighbor, as discussed in section IV.H of this document).
    With an equation-based approach, consumers would continue to choose 
the product with the flow rate that is closest to the desired flow 
rate; therefore, there would be zero water savings. DOE has previously 
relied on the nearest neighbor assumption and requested comment on it 
several times. 86 FR 46330, 46344-46345; 80 FR 39486, 39538 (Jul. 9, 
2015). DOE has not received comment to the contrary. DOE sees no 
advantage in an equation-based standard for CPSVs and therefore has 
maintained the existing product class structure in the analysis 
supporting this final determination.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one cost approach 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 product, and the availability and timeliness of 
purchasing the product on the market. The cost approaches are 
summarized as follows:
    <bullet> Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component-by-component, to 
develop a detailed bill of materials (``BOM'') for the product.
    <bullet> Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the BOM for the product.
    <bullet> 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) or cost-prohibitive and otherwise impractical (e.g., 
large commercial boilers), DOE conducts price surveys using publicly 
available pricing data published on major online retailer websites and/
or by soliciting prices from distributors and other commercial 
channels.
    In the August 2021 NOPD, DOE stated that it did not observe any new 
technology options since the January 2016 Final Rule, and therefore, 
updated the cost analysis from the January 2016 Final Rule to be 
representative of the market in 2020. 86 FR 46330, 46339. DOE updated 
the material prices of each component of the previously torn down CPSVs 
and updated the labor,

[[Page 34076]]

depreciation, utilities, maintenance, tax, and insurance costs. DOE did 
not include any CPSVs that have exited the market or had their design 
modified since they were torn down. The resulting BOM provided the 
basis for the manufacturer production cost (``MPC'') estimates. The 
updated costs reaffirmed that there are differences in manufacturing 
costs between units from different manufacturers. However, none of the 
differences are directly related to the efficiency of a CPSV. Rather, 
the differences were primarily due to differences in the type and 
amount of material used (e.g., plastic versus brass or stainless steel 
spray nozzles). Therefore, DOE concluded that MPC was unaffected by 
efficiency level, both within product classes and across product 
classes. Id.
    In the August 2021 NOPD, DOE requested comment and data regarding 
any changes in MPC that would not be accounted for by updating the cost 
analysis of the previously conducted product teardowns. Further, DOE 
requested any data that would contradict its determination of no 
incremental cost associated with improvements in efficiency of CPSVs. 
Id.
    DOE did not receive any comments regarding the cost analysis 
conclusions presented in the August 2021 NOPD. DOE continues to 
conclude that MPC is unaffected by efficiency level, same as the 
conclusion from the August 2021 NOPD and the January 2016 Final Rule 
(i.e., MPC remains constant across all product classes). As such, the 
resulting cost analysis provided the basis for the MPC estimates.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the MPC. The resulting manufacturer selling price (``MSP'') 
is the price at which the manufacturer distributes a unit into 
commerce. DOE developed an average manufacturer markup by examining the 
annual Securities and Exchange Commission (``SEC'') 10-K reports filed 
by publicly traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes CPSVs. The 
manufacturer markup is discussed in more detail in section IV.I.2.d of 
this document.
3. Cost Efficiency Results
    The results of the engineering analysis are reported as cost 
efficiency data and indicate that manufacturing production costs are 
unaffected by efficiency level within a product class and across 
product classes. Therefore, DOE determined the final MPC as the average 
MPC of all CPSVs. The summary of the cost efficiency relationships for 
product classes 1, 2, and 3 are presented in Table IV.5, Table IV.6, 
and Table IV.7, respectively. See chapter 5 of the final determination 
TSD for additional detail on the engineering analysis and complete cost 
efficiency results.

                          Table IV.5--Cost Efficiency Relationship for Product Class 1
                                             [Spray force <=5.0 ozf]
----------------------------------------------------------------------------------------------------------------
                                                                                   Manufacturer     Incremental
          Efficiency level                 Efficiency level          Flow rate      production       cost over
                                             description               (gpm)       cost (2020$)    baseline ($)
----------------------------------------------------------------------------------------------------------------
Baseline...........................  Current Federal standard...            1.00          $26.91           $0.00
Level 1............................  15% improvement over                   0.85           26.91            0.00
                                      Federal standard.
Level 2............................  25% improvement over                   0.75           26.91            0.00
                                      Federal standard.
Level 3............................  Maximum technologically                0.45           26.91            0.00
                                      feasible (max-tech).
----------------------------------------------------------------------------------------------------------------


                          Table IV.6--Cost Efficiency Relationship for Product Class 2
                                      [Spray force >5.0 ozf and <=8.0 ozf]
----------------------------------------------------------------------------------------------------------------
                                                                                   Manufacturer     Incremental
          Efficiency level                 Efficiency level          Flow rate      production       cost over
                                             description               (gpm)       cost (2020$)    baseline ($)
----------------------------------------------------------------------------------------------------------------
Baseline...........................  Current Federal standard...            1.20          $26.91           $0.00
Level 1............................  15% improvement over                   1.02           26.91            0.00
                                      Federal standard.
Level 2............................  25% improvement over                   0.90           26.91            0.00
                                      Federal standard.
Level 3............................  Maximum technologically                0.73           26.91            0.00
                                      feasible (max-tech).
----------------------------------------------------------------------------------------------------------------


                          Table IV.7--Cost Efficiency Relationship for Product Class 3
                                             [Spray force >8.0 ozf]
----------------------------------------------------------------------------------------------------------------
                                                                                   Manufacturer     Incremental
          Efficiency level                 Efficiency level          Flow rate      production       cost over
                                             description               (gpm)       cost (2020$)    baseline ($)
----------------------------------------------------------------------------------------------------------------
Baseline...........................  Current Federal standard...            1.28          $26.91           $0.00
Level 1............................  Maximum technologically-               1.13           26.91            0.00
                                      feasible (max-tech).
----------------------------------------------------------------------------------------------------------------

    See chapter 5 of the final determination TSD for additional detail 
on the engineering analysis and complete cost efficiency results.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices,

[[Page 34077]]

which are then used in the LCC and PBP analysis and in the manufacturer 
impact analysis (``MIA''). At each step in the distribution channel, 
companies mark up the price of the product to cover business costs and 
profit margin.
    DOE requested comment in the June 2020 RFI regarding markups per 
distribution channel as well as the portion of equipment sold via each 
distribution channel. 85 FR 35383, 35390 (Jun. 10, 2020). DOE did not 
receive any comments related to markups per distribution channel.
    For commercial prerinse spray valves, the main parties in the 
distribution chain are manufacturers, distributors, retailers, and 
service companies. Each party in the distribution chain sells to the 
final consumer. Table IV.8 provides the portion of equipment passing 
through different distribution channels that DOE included in the August 
2021 NOPD. 86 FR 46330, 46340.

    Table IV.8--Commercial Prerinse Spray Valve Distribution Channels
------------------------------------------------------------------------
                                                           Percentage
             Channel                     Pathway         through channel
------------------------------------------------------------------------
A................................  Manufacturer [rarr]                17
                                    Final Consumer
                                    (Direct Sales).
B................................  Manufacturer [rarr]                33
                                    Authorized
                                    Distributor [rarr]
                                    Final Consumer.
C................................  Manufacturer [rarr]                17
                                    Retailer [rarr]
                                    Final Consumer.
D................................  Manufacturer [rarr]                33
                                    Service Company
                                    [rarr] Final
                                    Consumer.
------------------------------------------------------------------------

    DOE developed baseline markups for each entity in the distribution 
chain. Baseline markups are multipliers that convert the MSP of 
equipment at the baseline efficiency level to consumer purchase price. 
Incremental markups are multipliers that convert the incremental 
increase in MSP for a product at each higher efficiency level (compared 
to the MSP at the baseline efficiency level) to the corresponding 
purchase price. In the analysis for the August 2021 NOPD, DOE used only 
baseline markups, as the engineering analysis indicated that there is 
no price increase with improvements in efficiency for commercial 
prerinse spray valves.
    DOE relied on annual reports and SEC 10-K reports from public 
companies in the different distribution channels to estimate average 
baseline markups. Table IV.9 provides the markups for each distribution 
channel that DOE used in the NOPD analysis. 86 FR 46330, 46340-46341.

      Table IV.9--Commercial Prerinse Spray Valve Baseline Channels
------------------------------------------------------------------------
             Channel                     Pathway         Baseline markup
------------------------------------------------------------------------
A................................  Manufacturer [rarr]              1.72
                                    Final Consumer
                                    (Direct Sales).
B................................  Manufacturer [rarr]              1.72
                                    Authorized
                                    Distributor [rarr]
                                    Final Consumer.
C................................  Manufacturer [rarr]              1.52
                                    Retailer [rarr]
                                    Final Consumer.
D................................  Manufacturer [rarr]              1.87
                                    Service Company
                                    [rarr] Final
                                    Consumer.
------------------------------------------------------------------------

    DOE did not receive any comments regarding the markups presented in 
the August 2021 NOPD. DOE used these markup values in the final 
determination analysis.
    Sales tax also factors into the mark-ups. DOE did not receive any 
comments related to sales tax in response to the August 2021 NOPD. 
However, DOE updated the sales tax to reflect the 2022 sales tax and 
weighted by 2022 population. The change in sales tax between the August 
2021 NOPD and this final determination is a small increase in national 
average sales tax.
    Chapter 6 of the final determination TSD provides details on DOE's 
development of markups for CPSVs.

E. Energy and Water Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of CPSVs at different efficiencies in representative 
U.S. commercial buildings, and to assess the energy savings potential 
of increased CPSV efficiency. The energy use analysis estimates the 
range of energy use of CPSVs 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 assessments of the energy 
savings and the savings in consumer operating costs that could result 
from adoption of amended or new standards. DOE proposed to the use the 
same energy and water use analysis process from the January 2016 Final 
Rule in the August 2021 NOPD. 86 FR 46330, 46341.
    As discussed in section IV.C.1 of this document, DOE developed flow 
rates for each efficiency level analyzed in the engineering analysis. 
DOE calculated the energy and water use by determining the 
representative daily operating time of the product by major building 
types that contain commercial kitchens found in the 2012 Commercial 
Building Energy Consumption Survey (``CBECS'').\15\ The daily CPSV 
operating time was annualized based on operating schedules for each 
building type. In the June 2020 RFI, DOE presented CPSV annual 
operating hours and requested comment on those hours. 85 FR 35383, 
35390. DOE did not receive any comments related to operating hours. DOE 
also received no comments to the August 2021 NOPD related to operating 
hours. However, after the August 2021 NOPD was published, 2018 CBECS 
was released. For this final determination, DOE used operating hours 
from the 2018 CBECS. There were no major differences in operating hours 
or water usage between CBECS 2012 and CBECS 2018. However, the mixture 
of fuel type for water heaters changed between CBECS 2012 and CBECS 
2018 to a slightly larger amount of natural gas water heaters in CBECS 
2018 compared to CBECS 2012. Although the efficiency values did not 
change between the NOPD and this final determination, the energy and 
water use values slightly

[[Page 34078]]

changed. The differences in energy and water use stem from the change 
in water heater mixture use as well as small reduction in operating 
hours from the update of CBECS 2018. Water use for each equipment class 
was determined by multiplying the annual operating time by the flow 
rate and operating pressure of 60 psi for each efficiency level. DOE 
requested comment in the June 2020 RFI requesting feedback related to 
the typical operating pressure of the water typically supplied to 
commercial prerinse spray valves and DOE's assumption of 60 psi. 85 FR 
35383, 35390. PMI concurred with this operating pressure and stated 
that 60 <plus-minus> 2 psi is representative of the average U.S. water 
pressure in commercial kitchens. (PMI, No. 4 at pp. 4-5)
---------------------------------------------------------------------------

    \15\ U.S. Department of Energy-Energy Information 
Administration. Commercial Building Energy Consumption Survey. 2020. 
Washington, DC. Available at www.eia.gov/consumption/commercial/data/2012/.
---------------------------------------------------------------------------

    DOE used 60 psi operating pressure in the August 2021 NOPD. 86 FR 
46330, 46341. DOE did not receive any comments related to operating 
pressure and retained the 60 psi value for this final determination.
    In the August 2021 NOPD, energy use was calculated by multiplying 
the annual water use in gallons by the energy required to heat each 
gallon of water to an end-use temperature of 108 [deg]F. DOE requested 
comment in the June 2020 RFI related to the end-use water temperature 
of the water leaving the CPSVs and any related supporting data. 85 FR 
35383, 35390. In response to the June 2020 RFI, PMI stated that it was 
not aware of any data or market information that suggested a different 
temperature than the 108 [deg]F end-use temperature. (PMI, No. 4 at p. 
5) In this final determination as DOE did in the NOPD, cold water 
supply temperatures used in the energy use calculation were derived for 
the nine U.S. census regions based on ambient air temperatures, and hot 
water supply temperature was assumed to be 140 [deg]F based on American 
Society of Heating, Refrigerating, and Air-Conditioning Engineers 
(``ASHRAE'') Standard 12-2020.\16\ DOE did not receive any comments 
related to the energy use methodology used in the August 2021 NOPD. DOE 
used the same process for energy and water use analysis with the 
exception of using the more current 2018 CBECS data for this final 
determination.
---------------------------------------------------------------------------

    \16\ ASHRAE. 2020. ASHRAE Standard 12-2020: Managing the Risk of 
Legionellosis Associated with Building Water Systems.
---------------------------------------------------------------------------

    Chapter 7 of the final determination TSD provides details on DOE's 
energy use analysis for commercial prerinse spray valves.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
CPSVs.\17\ 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. DOE used the following two metrics to 
measure consumer impacts:
---------------------------------------------------------------------------

    \17\ The original NOPD (86 FR 46330) published on August 18, 
2021 accidentally omitted a few pages of this introductory section. 
The omitted text was addressed during the public meeting webinar 
held on September 1, 2021, (see EERE-2019-BT-STD-0034-0013) as well 
as via an email distributed on September 22, 2021.
---------------------------------------------------------------------------

    <bullet> The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (MSP, 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 
product.
    <bullet> The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more efficient product 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 CPSVs 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 product.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and CPSV user samples. For 
this determination, the Monte Carlo approach is implemented in 
Microsoft Excel together with the Crystal Ball\TM\ add-on.\18\ The 
model calculated the LCC and PBP for products at each efficiency level 
for 10,000 CPSV users per simulation run. The analytical results 
include a distribution of 10,000 data points showing the range of LCC 
savings for a given efficiency level relative to the no-new-standards 
case efficiency distribution. The LCC savings are the summation of the 
differences in LCC between a given efficiency level and the standard 
level under consideration, weighted by the percent of consumers who are 
at that given efficiency level relative to all consumers who are 
affected. For product efficiencies greater than or equal to the 
efficiency of the standard level under consideration, the LCC and PBP 
calculations reveal that a consumer is not impacted by the standard 
level. By accounting for consumers who already purchase more efficient 
products, DOE avoids overstating the potential benefits from increasing 
product efficiency.
---------------------------------------------------------------------------

    \18\ Crystal Ball\TM\ is a commercially-available software tool 
to facilitate the creation of these types of models by generating 
probability distributions and summarizing results within Excel, 
available at www.oracle.com/technetwork/middleware/crystalball/overview/index.html.
---------------------------------------------------------------------------

    DOE calculated the LCC and PBP for all consumers of CPSVs as if 
each were to purchase a new product in the expected year of required 
compliance with new or amended standards. Any amended standards would 
apply to CPSVs manufactured 3 years after the date on which any new or 
amended standard is published, consistent with the 3-year compliance 
period used during the January 2016 Final Rule. 81 FR 4748, 4764-4765. 
For purposes of its analysis, DOE used 2027 as the first year of 
compliance with any amended standards for CPSVs.
    Table IV.10 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the final determination TSD and its appendices.

[[Page 34079]]



 Table IV.10--Summary of Inputs and Methods for the LCC and PBP Analysis
                                   \*\
------------------------------------------------------------------------
                 Inputs                           Source/Method
------------------------------------------------------------------------
Product Cost...........................  Derived by multiplying MPCs by
                                          manufacturer and retailer
                                          markups and sales tax, as
                                          appropriate.
Installation Costs.....................  Baseline installation cost
                                          determined with data from U.S.
                                          Department of Labor and U.S.
                                          Bureau of Labor Statistics.
                                          Assumed no change with
                                          efficiency level.
Annual Energy Use......................  The energy use multiplied by
                                          the average hours per year.
                                          Average number of hours based
                                          on field data.
                                         Variability: Based on the 2018
                                          CBECS.
Energy Prices..........................  Electricity: Based on the U.S.
                                          Energy Information
                                          Administration (``EIA'') Form
                                          861 data for 2020.
                                         Variability: Regional energy
                                          prices determined for 27
                                          regions.
Energy Price Trends....................  Based on the Annual Energy
                                          Outlook 2021 (``AEO2021'')
                                          price projections.
Repair and Maintenance Costs...........  Assumed no change with
                                          efficiency level.
Product Lifetime.......................  Average: 5 years.
Discount Rates.........................  Approach involves identifying
                                          all possible debt or asset
                                          classes that might be used to
                                          purchase the considered
                                          appliances or might be
                                          affected indirectly. Primary
                                          data source was the Federal
                                          Reserve Board's Survey of
                                          Consumer Finances.
Compliance Date........................  2027.
------------------------------------------------------------------------
\*\ References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the final
  determination TSD.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups described in section IV.D of this document (along with sales 
taxes). As stated earlier in this document, DOE used baseline markups, 
but did not apply incremental markups because the engineering analysis 
indicated that there is no price increase with improvements in 
efficiency for CPSVs.
    In prior energy conservation standards rulemakings, DOE estimated 
the total installed costs per unit for product and then assumed that 
costs remain constant throughout the analysis period. This assumption 
is conservative because product costs tend to decrease over time. In 
2011, DOE published a notice of data availability (``NODA'') titled 
Equipment Process Forecasting in Energy Conservation Standards 
Analysis. 76 FR 9696 (Feb. 22, 2011). In the NODA, DOE proposed a 
methodology for determining whether equipment process have trended 
downward in real terms. The methodology examines so-called price or 
experimental learning, wherein, with ever-increasing experience with 
the production of a product, manufacturers are able to reduce their 
production costs through innovations in technology and process.
    CPSVs are formed metal devices. Neither changes in technology nor 
process are expected to occur to change the price of the product in 
this analysis. For this analysis, DOE assumed that product costs remain 
constant over the analysis period. This is consistent with the January 
2016 Final Rule. 81 FR 4748, 4767.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE used data from 
the U.S. Department of Labor to estimate the baseline installation cost 
for CPSVs. In the August 2021 NOPD, DOE found no evidence that the 
installation costs would be affected by increased efficiency levels, 
which was consistent with the January 2016 Final Rule. 86 FR 46330, 
46342. DOE received no comments related to installation costs. In this 
final determination, DOE did not vary installation costs with 
efficiency levels.
3. Annual Energy Consumption
    For each sampled CPSV user, DOE determined the energy consumption 
for a CPSV at different efficiency levels using the approach described 
previously in section IV.E of this document.
4. Energy Prices
    In the August 2021 NOPD, DOE derived average annual commercial 
electricity prices for 27 geographic regions using data from the U.S. 
Energy Information Administration (``EIA'') Form EIA-861 database 
(based on the ``Annual Electric Power Industry Report'').\19\ DOE 
derived average natural gas prices using data from EIA's natural gas 
prices.\20\
---------------------------------------------------------------------------

    \19\ Available at www.eia.doe.gov/cneaf/electricity/page/eia861.html.
    \20\ Available at www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PCS_DMcf_m.htm.
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by a projection of annual change in 
national average commercial energy price in AEO2021.\21\ AEO2021 has an 
end year of 2050. To estimate price trends after 2050, DOE used the 
average annual rate of change in prices from 2040 through 2050.
---------------------------------------------------------------------------

    \21\ U.S. Department of Energy--Energy Information 
Administration. Annual Energy Outlook 2021 with Projections to 2050. 
2021. Washington, DC (AEO2021). Available at www.eia.gov/outlooks/aeo/.
---------------------------------------------------------------------------

    DOE received no comments related to energy prices. DOE used the 
same methodology for this final determination.
5. Water and Wastewater Prices
    For the analysis presented in the August 2021 NOPD, DOE obtained 
data on water and wastewater prices from the 2019 American Water Works 
Association (``AWWA'') surveys for this analysis.\22\ For each State 
and the District of Columbia, DOE combined all individual utility 
observations within the State to develop one value for water and 
wastewater service. Because water and wastewater charges are frequently 
tied to the same metered commodity values, DOE combined the prices for 
water and wastewater into one total dollar per thousand gallons amount.

[[Page 34080]]

This amount is referred to as the combined water price. DOE used the 
consumer price index (``CPI'') data for water related consumption 
(1974-2019) in developing a real growth rate for combined water price 
forecasts. DOE requested comment in the June 2020 RFI whether a 
different water price dataset should be considered. 85 FR 35383, 35391. 
DOE received no comments related to water price datasets in response to 
either the June 2020 RFI or the August 2021 NOPD. DOE used the same 
methodology for this final determination.
---------------------------------------------------------------------------

    \22\ American Water Works Association. 2019 Water and Wastewater 
Rate Survey. 2019. Available at www.awwa.org/Store/2019-Water-and-Wastewater-Rate-Survey--Digital-Set/ProductDetail/79004009.
---------------------------------------------------------------------------

    Chapter 8 of the final determination TSD provides more detail about 
DOE's approach to developing water and wastewater prices.
6. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. Typically, 
small incremental increases in product efficiency produce no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products. DOE requested comment in the June 2020 RFI on the 
assumption of zero maintenance and repair costs upon failure. DOE 
assumed that consumers would replace the CPSV upon failure rather than 
repairing the product. 85 FR 35383, 35391. DOE also requested comment 
if these changes would differ per efficiency level. Id. DOE received no 
comments related to maintenance nor repair costs.
    For the analysis presented in the August 2021 NOPD, DOE modeled 
CPSVs as not being repaired, and no maintenance costs. Additionally, 
DOE modeled no changes in maintenance or repair costs between different 
efficiency levels. DOE received no comments related to this assumption 
in the August 2021 NOPD. In this final determination, DOE assumed CPSVs 
as not being repaired, and no maintenance costs.
7. Product Lifetime
    For CPSVs, DOE used lifetime estimates from manufacturer datasheets 
and other published data sources. DOE requested comment in the June 
2020 RFI regarding lifetime and lifetime distributions, and restated 
the values from the January 2016 Final Rule--an average lifetime of 5 
years and maximum of 10 years. 85 FR 35383, 35391. DOE did not receive 
any comments related to lifetime of CPSVs in response to the June 2020 
RFI.
    For the analysis presented in the August 2021 NOPD, DOE developed a 
Weibull distribution with an average lifetime of 5 years and a maximum 
lifetime of 10 years. The use of a lifetime distribution for this 
analysis helps account for the variability in product lifetimes. DOE 
received no comments related to the lifetime values or distribution in 
response to the August 2021 NOPD. In this final determination, DOE 
assumed the same life values and distributions as in the August 2021 
NOPD.
8. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to CPSV users to estimate the present value of future operating costs. 
DOE estimated a distribution of commercial discount rates for CPSVs 
based on consumer financing costs and the opportunity cost of consumer 
funds.
    DOE applies weighted-average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\23\ DOE notes that the LCC does not analyze the appliance 
purchase decision, so the implicit discount rate is not relevant in 
this model. The LCC estimates NPV over the lifetime of the product, so 
the appropriate discount rate will reflect the general opportunity cost 
of commercial consumer funds, taking this time scale into account. 
Given the long-time horizon modeled in the LCC, the application of a 
marginal interest rate associated with an initial source of funds is 
inaccurate. Regardless of the method of purchase, consumers are 
expected to continue to rebalance their debt and asset holdings over 
the LCC analysis period, based on the restrictions consumers face in 
their debt payment requirements and the relative size of the interest 
rates available on debts and assets. DOE estimates the aggregate impact 
of this rebalancing using the historical distribution of debts and 
assets.
---------------------------------------------------------------------------

    \23\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in NPV of 
lifetime operating cost, incorporating the influence of several 
factors: transaction costs, risk premiums and response to 
uncertainty, time preferences, and interest rates at which a 
consumer is able to borrow or lend.
---------------------------------------------------------------------------

    In the August 2021 NOPD, to establish commercial discount rates for 
the LCC analysis, DOE identified all relevant commercial consumer debt 
or asset classes in order to approximate a commercial consumer's 
opportunity cost of funds related to appliance energy cost savings. It 
estimated the average percentage shares of the various types of debt 
and equity by commercial consumer building type using data from 
Damodaran Online \24\ for 1998-2019. Using Damodaran Online and the 
Federal Reserve, DOE developed a distribution of rates for each type of 
debt and asset by building type to represent the rates that may apply 
in the year in which amended standards would take effect. DOE assigned 
each sample building a specific discount rate drawn from one of the 
distributions. The average rate across all types of commercial consumer 
debt and equity, weighted by the shares of each type, given business 
size, is 7.0 percent.
---------------------------------------------------------------------------

    \24\ Damodaran Online. Available at pages.stern.nyu.edu/
~adamodar/ (accessed April 2020).
---------------------------------------------------------------------------

    DOE received no comments related to discount rate in response to 
the August 2021 NOPD. In this final determination, DOE uses the same 
analysis process for discount rates and values. However, the inputs for 
discount rates changed and this final determination uses a slightly 
lower discount rate for the LCC than compared to the August 2021 NOPD.
    See chapter 8 of the final determination TSD for further details on 
the development of consumer discount rates.
9. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis 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).
    To estimate the energy efficiency distribution of CPSVs for 2027 
(the first year of the analysis period), DOE conducted general internet 
searches and examined manufacturer literature to understand the 
characteristics of the spray values currently offered on the market. 
DOE assumed that the no-new-standards case percentages in 2027 would 
stay the same through the analysis period. The estimated market shares 
by product class for the no-new-standards case for CPSVs DOE assumed in 
the August 2021 NOPD are shown in Table IV.11 of this document. The 
estimated market shares within each product class for the no-new-
standards case for CPSVs DOE assumed in the August 2021 NOPD are shown 
in Table IV.12.

[[Page 34081]]



    Table IV.11--Product Class Distribution in No-New-Standards Case
------------------------------------------------------------------------
                                                           Portion of
                     Product class                       shipments (% of
                                                           shipments)
------------------------------------------------------------------------
1.....................................................                10
2.....................................................                70
3.....................................................                20
------------------------------------------------------------------------


          Table IV.12--Efficiency Level Distribution Within Each Product Class in No-New-Standards Case
----------------------------------------------------------------------------------------------------------------
                                                          Product class 1    Product class 2    Product class 3
                    Efficiency Level                      (% of shipments)   (% of shipments)   (% of shipments)
----------------------------------------------------------------------------------------------------------------
0......................................................                3.1               74.2               86.0
1......................................................  .................               24.2               14.0
2......................................................               87.5  .................  .................
3......................................................                9.4                1.5  .................
----------------------------------------------------------------------------------------------------------------

    DOE received no direct comments related to the August 2021 NOPD 
assumed efficiency distributions. However, both the CA IOUs and NEEA 
commented that the CCD database does not contain any models in product 
class 3, suggesting that the lack of product availability in product 
class 3 indicates a need for additional research as to consumer 
preferences in the CPSV market, including in-depth market and sales 
analysis to better inform DOE's product type switching methodology. 
NEEA stated that DOE should also account for market availability of 
products. (CA IOUs, No. 15 at pp. 18-19; NEEA, No. 19 at p. 3) DOE 
agrees that the CCD, when queried between March 2021 and March 2022, 
did not contain any models in product class 3. However, DOE has 
identified such products in manufacturer catalogs and on the market. 
The values in Table IV.11 are based on DOE's survey of the market 
indicating that 20 percent of products available are in product class 
3. The values in Table IV.12 are partially based on data from the CCD 
as well as DOE's review of market data. The values in Table IV.12 
indicate products exist for EL 0 and EL 1 in product class 3. Given the 
presence of CPSVs in product class three, there is not a need to 
account for market availability as suggested by NEEA.
    DOE uses these same efficiency distributions from the August 2021 
NOPD in this final determination.
    See chapter 8 of the final determination TSD for further 
information on the derivation of the efficiency distributions.
10. Payback Period Analysis
    The PBP is the amount of time it takes the consumer to recover the 
additional installed cost of more efficient products, compared to 
baseline products, through energy cost savings. The PBP is expressed in 
years. The PBP that exceeds the life of the product means that the 
increased total installed cost is not recovered in reduced operating 
expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the product and the change in the 
first-year annual operating expenditures relative to the baseline. The 
PBP calculation uses the same inputs as the LCC analysis, except that 
discount rates are not needed.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\25\ 
The shipments model takes an accounting approach in tracking market 
shares of each product class and the vintage of units in the stock. 
Stock accounting uses product shipments as inputs to estimate the age 
distribution of in-service product stocks for all years. The age 
distribution of in-service product stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the number of CPSVs in operation during that year.
---------------------------------------------------------------------------

    \25\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    In the August 2021 NOPD, historical CPSV shipment data were 
obtained from industry reports as well as DOE's CCD.\26\ NEEA commented 
that the CCD does not contain any models in product class 3. (NEEA, No. 
19 at p. 3) In this final determination, DOE consulted manufacturer 
catalogues to identify the product class 3 data. DOE also used the CCD 
to help inform some of the efficiency values reported in Table IV.12 of 
this document.
---------------------------------------------------------------------------

    \26\ Department of Energy--Office of Energy Efficiency and 
Renewable Energy. U.S. Department of Energy's Compliance 
Certification Database. Available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
---------------------------------------------------------------------------

    In the August 2021 NOPD, DOE used the commercial floorspace growth 
rate to make projections through 2056. PMI commented that at least 
20,000 restaurants closed in 2020 as a result of the COVID-19 pandemic. 
(PMI, No. 4 at pp. 3-4) DOE modeled flat growth in 2020 through 2022 
for CPSVs and assumed that growth would increase by the time the 
analysis period starts in 2027. 86 FR 46330, 46344.

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new or amended standards at specific efficiency levels.\27\ 
(``Consumer'' in this context refers to consumers of the equipment 
being regulated.) DOE calculates the NES and NPV for the potential 
standard levels considered based on projections of annual product 
shipments, along with the annual energy consumption and total installed 
cost data from the energy use and LCC analyses. For the present 
analysis, DOE projected the energy savings, operating cost savings, 
product costs, and NPV of consumer benefits over the lifetime of CPSVs 
sold from 2027 through 2056.
---------------------------------------------------------------------------

    \27\ The NIA accounts for impacts in the 50 states and 
Washington, DC.
---------------------------------------------------------------------------

    DOE evaluates the effects of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
CPSV product class in the absence of new or amended

[[Page 34082]]

energy conservation standards. For this projection, DOE considers 
historical trends in efficiency and various forces that are likely to 
affect the mix of efficiencies over time. DOE compares the no-new-
standards case with projections characterizing the market for each CPSV 
product class if DOE adopted new or amended standards at specific 
energy efficiency levels (i.e., the efficiency levels or standards 
cases) for that class. For the standards cases, DOE considers how a 
given standard would likely affect the market shares of CPSVs with 
lower flow rates than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each efficiency level. 
Interested parties can review DOE's analyses by changing various input 
quantities within the spreadsheet. The NIA spreadsheet model uses 
typical values (as opposed to probability distributions) as inputs.
    Table IV.13 summarizes the inputs and methods DOE used for the NIA 
analysis for the final determination. Discussion of these inputs and 
methods follows the table. See chapter 10 of the final determination 
TSD for details.

   Table IV.13--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
                Inputs                               Method
------------------------------------------------------------------------
Shipments............................  Annual shipments from shipments
                                        model.
Modeled Compliance Date of Standard..  2027.
Efficiency Trends....................  No-new-standards case. Standards
                                        cases.
Annual Energy Consumption per Unit...  Annual weighted-average values
                                        are a function of energy use at
                                        each EL.
Total Installed Cost per Unit........  Annual weighted-average values
                                        are a function of cost at each
                                        EL.
Annual Energy Cost per Unit..........  Annual weighted-average values as
                                        a function of the annual energy
                                        consumption per unit and energy
                                        prices.
Repair and Maintenance Cost per Unit.  Annual values do not change with
                                        efficiency level.
Energy Prices........................  AEO2021 projections (to 2050) and
                                        extrapolation through 2056.
Energy Site-to-Primary and FFC         A time-series conversion factor
 Conversion.                            based on AEO2021.
Discount Rate........................  3 percent and 7 percent.
Present Year.........................  2022.
------------------------------------------------------------------------

1. Product Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.9 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment weighted-average efficiency) for each of the 
considered product classes for the year of anticipated compliance with 
an amended or new standard.
    For the standards cases, DOE considered three consumer choice 
scenarios to establish the shipment-weighted efficiency for the year 
that standards are assumed to become effective (2027). Further 
descriptions of the scenarios are provided in the following section.
2. Customer Choice Scenarios
    In the January 2016 Final Rule, DOE acknowledged both the 
possibility that consumers would switch between product classes and the 
possibility that a subset of consumers would exit the CPSV market and 
purchase higher flow rate products (e.g., faucets). 81 FR 4748, 4769. 
In the August 2021 NOPD, DOE included two scenarios of switching. In 
one scenario (nearest neighbor), some product class 2 consumers opted 
to purchase product class 3 equipment. In the second scenario (product 
type switch), some product class 3 consumers opted to purchase a faucet 
instead of another spray valve. 86 FR 46330, 46344. Therefore, the NIA 
model allows for evaluation of a no product switch scenario (``rolling-
up'' within product class), as well as the nearest neighbor and product 
type switch scenarios.
    NEEA recommended DOE conduct research to further explore customer 
satisfaction in the CPSV market. (NEEA, No. 19 at p. 2)
    In the August 2021 NOPD, as well as in this final determination, 
DOE analyzed three permutations of consumer behavior in the analyses, 
which capture a range of consumer choice options. DOE analyzed the 
major options available to consumers if standards were amended 
including the following:
    <bullet> ``Rolling-up'' within product class. Consumers purchase a 
device in the product class (no product class switch). This is a 
typical scenario when consumer demand for a utility feature of a 
product class limits consumers switching to another product class.
    <bullet> Nearest neighbor. Consumers purchase a device with similar 
flow rate even if in a different product class (i.e., nearest 
neighbor).
    <bullet> Product-type switching. Consumers opt to purchase a 
different product type altogether (e.g., consumers opt to purchase a 
higher flow product like a faucet).
    NEEA stated that they believed that it is more likely that 
consumers would switch within the product classes in order to keep 
using a spray valve of any flow rate or spray force rather than leave 
the market. (NEEA, No. 19 at p. 3) NEEA also commented that product 
type switching was a valid scenario, but the reality of consumers 
opting for a faucet is not as regularly expected as presented in the 
August 2021 NOPD. (NEEA, No. 19 at p. 2).
    Under the nearest neighbor scenario, if the current choices of 
product under the current regulations correspond to the consumers' 
optimal product, it is probable that some consumers would switch from 
product class 1 to product class 2 or from product class 2 to product 
class 3 in response to amended standards in order to maintain their 
satisfaction with the product. In more extreme cases, consumers may 
also opt to exit the CPSV market and purchase a different type of 
product (e.g., a faucet) with a higher flow rate (i.e., product type 
switch). The Federal standard for faucets established a maximum flow 
rate of 2.2 gpm. 10 CFR 430.32(o). The economics resulting from nearest 
neighbor and product-type switching may result in lower optimal 
efficiency levels and reduced estimates of water and energy savings, as 
compared to the case without class switching.
    DOE is not aware of any other consumer preference scenarios that 
should be evaluated. DOE did not receive any specific comments on 
alternate consumer preference scenarios that are possible and that 
should be evaluated. Therefore, DOE has maintained the same scenarios 
from the August 2021 NOPD. DOE presents the nearest neighbor scenario 
as the

[[Page 34083]]

Reference case in the final determination but presents results from 
each of the scenarios in Chapter 10 of the final determination TSD.
    In the nearest neighbor scenario, consumers would choose the 
product with the flow rate that is closest to their current product 
flow rate, even if it has a higher spray force (product class 
switching). Under the nearest neighbor scenario, DOE assumed 100 
percent of consumers would choose the closest flow rate. Table IV.14 
lists the flow rate for the potential efficiency levels evaluated in 
the August 2021 NOPD. 86 FR 46330, 46344.

                             Table IV.14--Commercial Prerinse Spray Valve Flow Rates
----------------------------------------------------------------------------------------------------------------
                                                          Product class 1    Product class 2    Product class 3
                    Efficiency level                    --------------------------------------------------------
                                                          Flow rate (gpm)    Flow rate (gpm)    Flow rate (gpm)
----------------------------------------------------------------------------------------------------------------
Baseline...............................................               1.00               1.20               1.28
Level 1................................................             * 0.85               1.02               1.13
Level 2................................................               0.75             * 0.90  .................
Level 3................................................               0.45               0.73  .................
----------------------------------------------------------------------------------------------------------------
\*\ Market data do not indicate currently available product that meet this efficiency level.

    In response to the August 2021 NOPD, NEEA commented that they 
believed that it is more likely that consumers would switch between 
product classes in order to keep using a spray valve of any flow rate 
or spray force rather than leave the market altogether (moving to a 
faucet), as CPSVs have performance features specifically tailored for 
commercial dishwashing applications that traditional faucets do not. 
(NEEA, No. 19 at p. 3) DOE agrees that is more likely consumers will 
switch between product classes and not opt to purchase faucets. For 
this reason, DOE uses the nearest neighbor scenario (switching between 
product classes while still purchasing spray valves) as the Reference 
case in this final determination, however DOE cannot rule out the 
potential of consumers leaving the CPSV market all together.
    To the extent that customers would opt to leave the CPSV market, 
that scenario is more likely as a result of more stringent standards 
for this rulemaking than it was for the January 2016 Final Rule. As 
discussed, the availability of CPSVs that are in product class 3 may be 
limited and as such the lack of units available in product class 3 
makes it more likely that consumers seeking the product utility 
associated with the spray force currently offered in product class 2 
would exit the CPSV market. Therefore, the likelihood of consumers 
opting for alternative products outside of the CPSV market in response 
to amended standards in this rulemaking is more likely than presented 
in the January 2016 Final Rule. See 86 46330, 46344-46346 (August 11, 
2021).
    A detailed discussion of DOE's method to model this sensitivity 
analysis is contained in chapter 10 of the final determination TSD.
3. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered product between each potential standards 
case (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 each product (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 efficiency standard case. 
DOE estimated energy consumption and savings based on site energy and 
converted the electricity consumption and savings to primary energy 
(i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from AEO2021. 
Cumulative energy savings are the sum of the NES for each year over the 
timeframe of the analysis.
    The use of a more efficient product is occasionally associated with 
a direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency. For CPSVs, DOE did not 
use a rebound effect estimate. DOE does not include the rebound effect 
in the NPV analysis because it reasons that the increased service from 
greater use of the product has an economic value that is reflected in 
the value of the foregone energy savings.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' 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 (Aug. 18, 2011). After evaluating the approaches discussed in the 
August 18, 2011, notice, DOE published a statement of amended policy in 
which DOE explained its determination that EIA's National Energy 
Modeling System (``NEMS'') is the most appropriate tool for its FFC 
analysis and its intention to use NEMS for that purpose. 77 FR 49701 
(Aug. 17, 2012). NEMS is a public domain, multi-sector, partial 
equilibrium model of the U.S. energy sector \28\ 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. The approach used for deriving FFC measures of energy use 
and emissions is described in appendix 10B of the final determination 
TSD.
---------------------------------------------------------------------------

    \28\ For 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.
---------------------------------------------------------------------------

4. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a discount factor to calculate the present value of costs and 
savings. DOE calculates net savings each year as the difference between 
the no-new-standards case and each standards case in terms of total 
savings in operating costs versus total increases in installed costs. 
DOE calculates operating cost savings over the lifetime of each product 
shipped during the projection period.

[[Page 34084]]

    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year and the 
projected price of the appropriate form of energy. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the projection of annual national average commercial energy 
price changes in the Reference case from AEO2021, which has an end year 
of 2050. To estimate price trends after 2050, DOE used the average 
annual rate of change in prices from 2020 through 2050. As part of the 
NIA, DOE also analyzed scenarios that used inputs from variants of the 
AEO2021 Reference case that have lower and higher economic growth. 
Those cases have lower and higher energy price trends compared to the 
Reference case. NIA results based on these cases are presented in 
appendix 10C of the final determination TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
final determination, DOE estimated the NPV of consumer benefits using 
both a 3-percent and a 7-percent real discount rate. DOE uses these 
discount rates in accordance with guidance provided by the Office of 
Management and Budget (``OMB'') to Federal agencies on the development 
of regulatory analysis.\29\ The discount rates for the determination of 
NPV are in contrast to the discount rates used in the LCC analysis, 
which are designed to reflect a consumer's perspective. The 7-percent 
real value is an estimate of the average before-tax rate of return to 
private capital in the U.S. economy. The 3-percent real value 
represents the ``social rate of time preference,'' which is the rate at 
which society discounts future consumption flows to their present 
value.
---------------------------------------------------------------------------

    \29\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
www.whitehouse.gov/omb/memoranda/m03-21.html.
---------------------------------------------------------------------------

I. Manufacturer Impact Analysis

1. Overview
    DOE conducted an MIA for CPSVs to estimate the financial impacts of 
analyzed amended energy conservation standards on manufacturers of 
CPSVs. The MIA has both quantitative and qualitative aspects and 
includes analyses of projected industry cash flows, the industry net 
present value (``INPV''), investments in research and development and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how amended energy 
conservation standards might affect manufacturing employment, capacity, 
and competition, as well as how standards contribute to overall 
regulatory burden. Finally, the MIA serves to identify any 
disproportionate impacts on manufacturer subgroups, including small 
business manufacturers.
    The quantitative part of the MIA relies on the Government 
Regulatory Impact Model (``GRIM''), an industry cash flow model 
customized for the CPSVs covered in this final determination. The key 
GRIM inputs are data on the industry cost structure, MPCs, and 
shipments, as well as assumptions about manufacturer markups and 
manufacturer conversion costs. The key MIA output is INPV, which is the 
sum of industry annual cash flows over the analysis period, discounted 
using the industry weighted-average cost of capital, and the impact to 
domestic manufacturing employment. The GRIM calculates annual cash 
flows using standard accounting principles. DOE used the GRIM to 
compare changes in INPV between the no-new-standards case and various 
efficiency levels, the standards cases. The difference in INPV between 
the no-new-standards case and the standards cases represents the 
financial impact of analyzed amended energy conservation standards on 
CPSV manufacturers. Different sets of assumptions (conversion cost 
scenarios) produce different INPV results. The qualitative part of the 
MIA addresses factors such as manufacturing capacity; characteristics 
of, and impacts on, any particular subgroup of manufacturers, including 
small manufacturers; the cumulative regulatory burden placed on CPSV 
manufacturers; and any impacts on competition.
2. GRIM Analysis and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flows over time 
due to the analyzed amended energy conservation standards. These 
changes in cash flows result in either a higher or lower INPV for the 
standards cases compared to the no-new-standards case. The GRIM uses a 
standard annual cash flow analysis that incorporates MPCs, manufacturer 
markups, shipments, and industry financial information as inputs. It 
then models changes in manufacturer investments that may result from 
the analyzed amended energy conservation standards. The GRIM uses these 
inputs to calculate a series of annual cash flows beginning with the 
reference year of the analysis (2022) and continuing to the terminal 
year of the analysis (2056). DOE computes INPV by summing the stream of 
annual discounted cash flows during the analysis period. DOE continued 
to use a real discount rate of 6.86 percent, the same discount rate 
used in the August 2021 NOPD, for CPSV manufacturers in this final 
determination. 86 FR 46330, 46346.\30\ Many of the GRIM inputs come 
from the engineering analysis, the shipments analysis, and other 
research conducted during the MIA. The major GRIM inputs are described 
in detail in the following sections.
---------------------------------------------------------------------------

    \30\ The August 2021 NOPD incorrectly stated that the discount 
rate used in the NOPD MIA was 6.89%. However, the value that was 
actually used in the GRIM file was 6.86%. 86 FR 46330, 46346.
---------------------------------------------------------------------------

a. Manufacturer Product Costs
    Manufacturing more efficient products is typically more expensive 
than manufacturing baseline products. However, as discussed in section 
IV.C.2 of this document, the MPCs for all CPSVs are constant at every 
efficiency level and for every product class. In the MIA, DOE used the 
MPCs calculated in the engineering analysis, as described in section 
IV.C.2 of this document and further detailed in chapter 5 of the final 
determination TSD.
b. Shipment Projections
    INPV, the key GRIM output, depends on industry revenue, which 
depends on the quantity and prices of CPSVs shipped in each year of the 
analysis period. Industry revenue calculations require forecasts of (1) 
the total annual shipment volume of CPSVs, (2) the distribution of 
shipments across the product classes, and (3) the distribution of 
shipments across efficiency levels.
    In the MIA, DOE used the shipments calculated as part of the 
shipments analysis discussion in section IV.G of this document and 
chapter 9 of the final determination TSD.
c. Product and Capital Conversion Costs
    DOE expects the analyzed amended CPSV energy conservation standards 
would cause manufacturers to incur conversion costs to bring their 
production facilities and product designs into compliance with the 
analyzed amended standards. For the MIA, DOE classified these 
conversion costs into two groups: (1) capital conversion costs and (2) 
product conversion costs. Capital conversion costs are investments in 
property, plant, and equipment necessary to adapt or change existing 
production facilities so new product designs can be fabricated and 
assembled. Product conversion costs are investments in research, 
development, testing, marketing, certification, and other non-
capitalized costs necessary to make product designs

[[Page 34085]]

comply with the analyzed amended standards.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of a potential final rule and the year 
by which manufacturers must comply with potential amended standards. 
DOE created estimates of industry capital and product conversion costs 
using the engineering cost model and information gained during product 
teardowns. Product conversion costs depend on the number of CPSV models 
that need to be redesigned and retested as well as the number of 
manufacturers that need to update brochures and marketing materials. 
Capital conversion costs are based on the number of plastic spray 
patterns that would need to be fabricated by CPSV manufacturers. The 
conversion cost estimates are presented in section V.B of this 
document.
d. Manufacturer Markup
    As discussed in section IV.I.2.a of this document, the MPCs for 
CPSVs are the manufacturers' costs for those products. The MPCs include 
materials, direct labor, depreciation, and overhead, which are 
collectively referred to as the cost of goods sold. The MSP is the 
price received by CPSV manufacturers from the first sale of those 
products, typically to a distributor, regardless of the downstream 
distribution channel through which the CPSVs are ultimately sold. The 
MSP is not the price the end-user pays for CPSVs because there are 
typically multiple sales along the distribution chain and various 
markups applied to each sale. The MSP equals the MPC multiplied by the 
manufacturer markup. The manufacturer markup covers all the CPSV 
manufacturer's non-production costs (i.e., selling, general, and 
administrative expenses; research and development; and interest) as 
well as profit. Total industry revenue for CPSV manufacturers equals 
the MSPs at each efficiency level multiplied by the number of shipments 
at that efficiency level for all product classes. As previously discuss 
in section IV.C.2 of this document, the MPC for all CPSVs is the same 
at each efficiency level for all product classes. Therefore, total 
industry revenue equals the MSP multiplied by the number of shipments.
    In the June 2020 RFI, DOE requested comment on whether the 
manufacturer markup of 1.30 from the January 2016 Final Rule is still 
appropriate to represent the market share weighted-average value. 85 FR 
35383, 35389. DOE did not receive any comments on this topic in either 
the June 2020 RFI or the August 2021 NOPD. Therefore, DOE used the same 
manufacturer markup of 1.30 that was used in the August 2021 NOPD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the analyzed energy conservation standards for CPSVs. 
It addresses the efficiency levels examined by DOE and the projected 
impacts of each of these levels. Additional details regarding DOE's 
analyses are contained in the final determination TSD supporting this 
document.
    In response to the August 2021 NOPD, NEEA commented that it is not 
clear what scenario was used for DOE's determination of the product 
switching methodology. (NEEA, No. 19 at p. 2) DOE's reference case in 
the NOPD was the nearest neighbor scenario, which is the same in this 
final determination. However, DOE also considered the effect of 
product-type switching for the determination. As discussed in section 
IV.H.2 of this document, DOE notes to the extent that customers would 
opt to leave the CPSV market, that scenario is more likely as a result 
of more stringent standards for this determination than it was for the 
January 2016 Final Rule. Therefore, the product-type switch scenario 
was also a consideration for the final determination.

A. Economic Impacts on Individual Consumers

    DOE analyzed the cost effectiveness (i.e., the savings in operating 
costs throughout the estimated average life of CPSVs compared to any 
increase in the price of, or in the initial charges for, or maintenance 
expenses of, the CPSVs) that is likely to result from the imposition of 
a standard at an efficiency level by considering the LCC and PBP at 
each efficiency level. These analyses are discussed in the following 
sections.
    In general, a more efficient product can affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. In the case of CPSVs, there is no incremental cost associated 
with the more efficient product. Inputs used for calculating the LCC 
and PBP include total installed costs (i.e., product price plus 
installation costs) and operating costs (i.e., annual energy use, 
energy prices, energy price trends, repair costs, and maintenance 
costs). The LCC calculation also uses product lifetime and a discount 
rate. Chapter 8 of the final determination TSD provides detailed 
information on the LCC and PBP analyses.
    Table V.1 shows the average LCC and PBP results for the efficiency 
levels considered for CPSVs in this analysis.

       Table V.1--Average LCC and PBP Results by Efficiency Level
------------------------------------------------------------------------
                                                                Simple
                                                LCC savings    payback
               Efficiency level                   (2020$)       period
                                                               (years)
------------------------------------------------------------------------
EL 1..........................................      $371.02            0
EL 2..........................................       723.57            0
EL 3..........................................       735.58            0
------------------------------------------------------------------------

    The average LCC results in Table V.1 reflect the assumption of a 
consumer opting to stay within the same product class and not 
incorporating the switching between product classes or product types 
that is modeled when assessing national impacts. The results in Table 
V.1 also assume a consumer purchases a product from an efficiency level 
that exists in the market. As a result, product class 1 consumers at 
baseline efficiency level purchase EL 2 products in the LCC analysis, 
and product class 2 consumers at EL 1 purchase EL 3 in the LCC 
analysis.

B. Economic Impacts on Manufacturers

    DOE performed an MIA to estimate the impact of potential amended 
energy conservation standards on manufacturers of CPSVs. DOE modeled 
MIA results using the reference case, Nearest Neighbor. The following 
sections describe the expected impacts on CPSV manufacturers at each 
efficiency level. Chapter 11 of the final determination TSD explains 
the MIA in further detail.
1. Industry Cash Flow Analysis Results
    In this section, DOE provides MIA results from the analysis, which 
examines changes in the industry that could result from amended 
standards. Table V.2 and Table V.3 depict the estimated financial 
impacts (represented by changes in INPV) of potential amended energy 
conservation standards on CPSV manufacturers, as well as the conversion 
costs that DOE estimates manufacturers would incur at each efficiency 
level. To evaluate the range of cash flow impacts on the CPSV industry, 
DOE modeled two conversion cost scenarios that correspond to the range 
of potential manufacturer investments that may occur in responses to 
potential amended standards. Each conversion cost scenario results in a 
unique set of cash flows and corresponding industry values at each 
efficiency level.
    In the following discussion, the INPV results refer to the 
difference in industry value between the no-new-standards case and the 
standards cases that result from the sum of discounted cash flows from 
the reference year (2022) through

[[Page 34086]]

the end of the analysis period (2056). The results also discuss the 
difference in cash flows between the no-new-standards case and the 
standards cases in the year before the analyzed compliance date for 
potential amended energy conservation standards. This differential 
represents the size of the required conversion costs relative to the 
cash flow generated by the CPSV industry in the absence of amended 
energy conservation standards.
    To assess the upper (less severe) end of the range of potential 
impacts on CPSV manufacturers, DOE modeled a sourced conversion cost 
scenario. This scenario assumes that the majority of CPSV 
manufacturers, but not all CPSV manufacturers, source components 
(including the nozzle) from component suppliers and simply assemble the 
CPSVs. In this scenario, the CPSV manufacturers that DOE assumed source 
components would not incur a capital conversion cost related to the 
fabrication of plastic nozzles if CPSV manufacturers must redesign 
nozzle molds due to the analyzed amended energy conservation standards.
    To assess the lower (more severe) end of the range of potential 
impacts on CPSV manufacturers, DOE modeled a fabricated conversion cost 
scenario. This scenario assumes that all CPSV manufacturers currently 
selling products with plastic spray nozzles fabricate these nozzles in-
house. In this scenario, all CPSV manufacturers incur capital 
conversion costs related to the fabrication of plastic nozzles if CPSV 
manufacturers must redesign nozzle molds due to analyzed amended energy 
conservation standards.
    Table V.2 and Table V.3 present the projected results for CPSVs 
under the sourced and fabricated conversion cost scenarios. DOE 
examined results for all product classes together since most 
manufacturers sell products across a variety of the analyzed product 
classes.

 Table V.2--Manufacturer Impact Analysis for Commercial Prerinse Spray Valves--Sourced Conversion Cost Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                Efficiency level *
                                      Units           No-new-    -----------------------------------------------
                                                  standards case         1               2               3
----------------------------------------------------------------------------------------------------------------
INPV..........................  2020$ millions..            11.6            10.7            10.7            10.7
Change in INPV................  2020$ millions..  ..............           (0.9)           (0.9)           (0.9)
                                %...............  ..............           (8.0)           (8.0)           (8.0)
Product Conversion Costs......  2020$ millions..  ..............             1.3             1.3             1.3
Capital Conversion Costs......  2020$ millions..  ..............             0.1             0.1             0.1
Total Conversion Costs........  2020$ millions..  ..............             1.4             1.4             1.4
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative numbers.


    Table V.3--Manufacturer Impact Analysis for Commercial Prerinse Spray Valves--Fabricated Conversion Cost
                                                    Scenario
----------------------------------------------------------------------------------------------------------------
                                                                                Efficiency level *
                                      Units           No-new-    -----------------------------------------------
                                                  standards case         1               2               3
----------------------------------------------------------------------------------------------------------------
INPV..........................  2020$ millions..            11.6            10.5            10.5            10.4
Change in INPV................  2020$ millions..  ..............           (1.0)           (1.0)           (1.2)
                                %...............  ..............           (9.0)           (9.0)          (10.1)
Product Conversion Costs......  2020$ millions..  ..............             1.3             1.3             1.3
Capital Conversion Costs......  2020$ millions..  ..............             0.3             0.3             0.4
Total Conversion Costs........  2020$ millions..  ..............             1.6             1.6             1.7
----------------------------------------------------------------------------------------------------------------
* Numbers in parentheses indicate negative numbers.

    At EL 1, DOE estimates the impacts on INPV to range from -$1.0 
million to -$0.9 million, or a change in INPV of -9.0 percent to -8.0 
percent. At EL 1, industry free cash flow (operating cash flow minus 
capital expenditures) is estimated to decrease to $0.1 million, or a 
drop of up to 88.2 percent, compared to the no-new-standards case value 
of $0.7 million in 2026, the year leading up to the analyzed compliance 
date of potential amended energy conservation standards.
    Percentage impacts on INPV are moderately negative at EL 1. DOE 
projects that in the analyzed year of compliance (2027), 97 percent of 
CPSV shipments in product class 1, 26 percent of CPSV shipments in 
product class 2, and 14 percent of CPSV shipments in product class 3 
will meet EL 1. EL 1 represents max-tech for product class 3. DOE 
expects CPSV manufacturers to incur approximately $1.3 million in 
product conversion costs to update brochures and marketing material and 
retest and redesign CPSV models that would need to be redesigned if 
standards were set at EL 1. Additionally, CPSV manufacturers would 
incur between $0.3 million and $0.1 million in capital conversion costs 
to fabricate new plastic nozzle molds to accommodate spray patterns 
that could meet potential amended standards set at EL 1.
    At EL 2, DOE estimates the impacts on INPV to range from -$1.0 
million to -$0.9 million, or a change in INPV of -9.0 percent to -8.0 
percent. At EL 2, industry free cash flow (operating cash flow minus 
capital expenditures) is estimated to decrease to $0.1 million, or a 
drop of up to 88.2 percent, compared to the no-new-standards case value 
of $0.7 million in 2026, the year leading up to the analyzed compliance 
date of potential amended energy conservation standards.
    Percentage impacts on INPV are moderately negative at EL 2. DOE 
projects that in the analyzed year of compliance (2027), 97 percent of 
CPSV shipments in product class 1 and 2 percent of CPSV shipments in 
product class 2 will meet or exceed EL 2. Product class 3 is at max-
tech (at EL 1) and 14 percent of product class 3 CPSV shipments will 
meet max-tech. DOE expects CPSV manufacturers to incur approximately 
$1.3 million in product conversion costs to update brochures and 
marketing material and retest and

[[Page 34087]]

redesign CPSV models that would need to be redesigned if standards were 
set at EL 2 (and EL 1, which is max-tech, for product class 3). 
Additionally, CPSV manufacturers would incur between $0.3 million and 
$0.1 million in capital conversion costs to fabricate new plastic 
nozzle molds to accommodate spray patterns that could meet potential 
amended standards set at EL 2 (and EL 1, which is max-tech, for product 
class 3).
    At EL 3, max-tech for all product classes, DOE estimates the 
impacts on INPV to range from -$1.2 million to -$0.9 million, or a 
change in INPV of -10.1 percent to -8.0 percent. At EL 3, industry free 
cash flow (operating cash flow minus capital expenditures) is estimated 
to decrease to less than $0.1 million, or a drop of up to 99.0 percent, 
compared to the no-new-standards case value of $0.7 million in 2026, 
the year leading up to the analyzed compliance date of potential 
amended energy conservation standards.
    Percentage impacts on INPV are moderately negative at EL 3. DOE 
projects that in the analyzed year of compliance (2027), 9 percent of 
CPSV shipments in product class 1, 2 percent of CPSV shipments in 
product class 2, and 14 percent of CPSV shipments in product class 3 
will meet max-tech. DOE expects CPSV manufacturers to incur 
approximately $1.3 million in product conversion costs to update 
brochures and marketing material and retest and redesign CPSV models 
that would need to be redesigned if standards were set at max-tech (EL 
3 for product classes 1 and 2 and EL 1 for product class 3). 
Additionally, CPSV manufacturers would incur between $0.4 million and 
$0.1 million in capital conversion costs to fabricate new plastic 
nozzle molds to accommodate spray patterns that could meet potential 
amended standards set at max-tech (EL 3 for product classes 1 and 2 and 
EL 1 for product class 3).
2. Direct Impacts on Employment
    The design option specified for achieving greater efficiency levels 
(i.e., changing the total spray hole area of the CPSV nozzle) does not 
increase the labor content (measured in dollars) of CPSVs at any EL, 
nor does it increase total MPC or labor associated with manufacturing 
CPSVs. Additionally, total industry shipments are forecasted to be 
constant at all the analyzed standard levels. Therefore, DOE predicts 
no change in domestic manufacturing employment levels due to any of the 
analyzed standard levels.
3. Impacts on Manufacturing Capacity
    Not every CPSV manufacturer makes CPSV models that could meet all 
the analyzed amended energy conservation standards for all product 
classes. However, DOE believes that manufacturers would not need to 
make substantial platform changes or significant investments for their 
CPSV products to meet any of the amended energy conservation standards 
analyzed in this rulemaking. Therefore, DOE does not foresee any 
significant impact on manufacturing capacity due to any of the analyzed 
amended energy conservation standards.
4. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop an industry cash flow 
estimate may not be adequate for assessing differential impacts among 
manufacturer subgroups. Small manufacturers, niche product 
manufacturers, and manufacturers exhibiting cost structures 
substantially different from the industry average could be affected 
disproportionately. DOE analyzed the impacts on small businesses in 
section VI.B of this document. DOE did not identify any other 
manufacturer subgroups for this rulemaking.
5. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product. While any one regulation may not 
impose a significant burden on manufacturers, the combined effects of 
several existing or impending regulations may have serious consequences 
for some manufacturers, groups of manufacturers, or an entire industry. 
Assessing the impact of a single regulation may overlook this 
cumulative regulatory burden. In addition to energy conservation 
standards, other regulations can significantly affect manufacturers' 
financial operations. Multiple regulations affecting the same 
manufacturer can strain profits and lead companies to abandon product 
lines or markets with lower expected future returns than competing 
products. For these reasons, DOE typically conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency. However, given the conclusion discussed in 
section V.D of this document, DOE did not conduct a cumulative 
regulatory burden analysis.

C. National Impact Analysis

    This section presents DOE's estimates of the NES and the NPV of 
consumer benefits 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 CPSVs, DOE compared their energy consumption under the 
no-new-standards case to their anticipated energy consumption under 
each efficiency level. The savings are measured over the entire 
lifetime of the product purchased in the 30-year period that begins in 
the year of anticipated compliance with amended standards (2027-2056). 
Table V.4 presents DOE's projections of the NES for each efficiency 
level considered for CPSVs for all three scenarios considered (section 
IV.H.2 of this document).

    Table V.4--Cumulative National Energy and Water Savings for Commercial Prerinse Spray Valves; 30 Years of
                                                    Shipments
                                                   [2027-2056]
----------------------------------------------------------------------------------------------------------------
                                                                    National energy and water savings
                                                        --------------------------------------------------------
                    Efficiency level                                                             National water
                                                           Primary energy       FFC energy      savings (billion
                                                              (quads)            (quads)              gal)
----------------------------------------------------------------------------------------------------------------
                                Scenario #1--``Rolling-up'' within product class
----------------------------------------------------------------------------------------------------------------
1......................................................              0.151              0.160            159.328
2......................................................              0.312              0.329            328.747

[[Page 34088]]

 
3......................................................              0.279              0.295            294.188
----------------------------------------------------------------------------------------------------------------
                                 Scenario #2--Nearest Neighbor [REFERENCE CASE]
----------------------------------------------------------------------------------------------------------------
1......................................................              0.050              0.053             52.571
2......................................................              0.036              0.038             37.468
3......................................................              0.037              0.039             39.004
----------------------------------------------------------------------------------------------------------------
                                       Scenario #3--Product type switching
----------------------------------------------------------------------------------------------------------------
1......................................................            (0.098)            (0.103)          (102.905)
2......................................................            (0.112)            (0.108)          (118.009)
3......................................................            (0.110)            (0.117)          (116.473)
----------------------------------------------------------------------------------------------------------------
* Values in parenthesis indicate negative values.

    OMB Circular A-4 \31\ 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 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 product 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.\32\ The review timeframe established in 
EPCA is generally not synchronized with the product lifetime, product 
manufacturing cycles, or other factors specific to CPSVs. Thus, such 
results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology. Table V.5 
presents DOE's 9-year projections of the NES for each efficiency level 
considered for CPSVs for all three scenarios considered (section IV.H.2 
of this document). The impacts are counted over the lifetime of CPSVs 
purchased in 2027-2035.
---------------------------------------------------------------------------

    \31\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/.
    \32\ Section 325(m) of EPCA requires DOE to review its standards 
at least once every 6 years, and requires, for certain products, 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. 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 products, the compliance period is 5 years rather 
than 3 years.

    Table V.5--Cumulative National Energy and Water Savings for Commercial Prerinse Spray Valves; 9 Years of
                                                    Shipments
                                                   [2027-2035]
----------------------------------------------------------------------------------------------------------------
                                                                    National energy and water savings
                                                        --------------------------------------------------------
                    Efficiency level                                                             National water
                                                           Primary energy       FFC energy      savings (billion
                                                              (quads)            (quads)              gal)
----------------------------------------------------------------------------------------------------------------
                                Scenario #1--``Rolling-up'' within product class
----------------------------------------------------------------------------------------------------------------
1......................................................              0.041              0.043             42.911
2......................................................              0.084              0.084             88.541
3......................................................              0.075              0.075             79.233
----------------------------------------------------------------------------------------------------------------
                                 Scenario #2--Nearest Neighbor [REFERENCE CASE]
----------------------------------------------------------------------------------------------------------------
1......................................................              0.003              0.013             14.159
2......................................................              0.002              0.010             10.091
3......................................................              0.003              0.010             10.505
----------------------------------------------------------------------------------------------------------------
                                       Scenario #3--Product-type switching
----------------------------------------------------------------------------------------------------------------
1......................................................            (0.026)            (0.028)           (27.715)
2......................................................            (0.030)            (0.032)           (31.783)

[[Page 34089]]

 
3......................................................            (0.030)            (0.032)           (31.369)
----------------------------------------------------------------------------------------------------------------
* Values in parenthesis indicate negative values.

2. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV for consumers that would result 
from the efficiency levels considered for CPSVs. In accordance with 
OMB's guidelines on regulatory analysis,\33\ DOE calculated NPV using 
both a 7-percent and a 3-percent real discount rate. Table V.6 shows 
the consumer NPV results for each efficiency level considered for CPSVs 
for all three scenarios considered (see section IV.H.2 of this 
document). The impacts are counted over the lifetime of a product 
purchased in 2027-2056.
---------------------------------------------------------------------------

    \33\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/.

    Table V.6--Cumulative Net Present Value of Consumer Benefits for
         Commercial Prerinse Spray Valves; 30 Years of Shipments
                               [2027-2056]
------------------------------------------------------------------------
                                     Net present value (billion $2020) *
                                   -------------------------------------
         Efficiency level               7-percent          3-percent
                                      discount rate      discount rate
------------------------------------------------------------------------
            Scenario #1--``Rolling-up'' within product class
------------------------------------------------------------------------
1.................................              1.109              2.360
2.................................              2.266              4.815
3.................................              2.009              4.276
------------------------------------------------------------------------
             Scenario #2--Nearest Neighbor [REFERENCE CASE]
------------------------------------------------------------------------
1.................................              0.335              0.740
2.................................              0.239              0.527
3.................................              0.249              0.549
------------------------------------------------------------------------
                   Scenario #3--Product type switching
------------------------------------------------------------------------
1.................................            (0.701)            (1.498)
2.................................            (0.805)            (1.698)
3.................................            (0.794)            (1.676)
------------------------------------------------------------------------
* Values in parenthesis indicate negative values.

    The NPV results based on the aforementioned 9-year analytical 
period for all three scenarios considered are presented in Table V.7. 
The impacts are counted over the lifetime of a product purchased in 
2027-2035. As mentioned previously, such results are presented for 
informational purposes only and are not indicative of any change in 
DOE's analytical methodology or decision criteria.

    Table V.7--Cumulative Net Present Value of Consumer Benefits for
   Commercial Prerinse Spray Valves; 9 Years of Shipments (2027-2035)
------------------------------------------------------------------------
                                     Net present value (billion $2020)*
                                   -------------------------------------
         Efficiency Level               7-percent          3-percent
                                      discount rate      discount rate
------------------------------------------------------------------------
            Scenario #1--``Rolling-up'' within product class
------------------------------------------------------------------------
1.................................              0.501              0.778
2.................................              1.028              1.562

[[Page 34090]]

 
3.................................              0.913              1.388
------------------------------------------------------------------------
             Scenario #2--Nearest Neighbor [REFERENCE CASE]
------------------------------------------------------------------------
1.................................              0.150              0.236
2.................................              0.107              0.168
3.................................              0.111              0.175
------------------------------------------------------------------------
                   Scenario #3--Product-type switching
------------------------------------------------------------------------
1.................................            (0.298)            (0.449)
2.................................            (0.345)            (0.518)
3.................................            (0.340)            (0.511)
------------------------------------------------------------------------
* Values in parenthesis indicate negative values.

D. Final Determination

    As required by EPCA, this final determination analyzes whether 
amended standards for CPSVs would result in significant conservation of 
energy, be technologically feasible, and be cost effective. (42 U.S.C. 
6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) Additionally, DOE also 
estimated the impact on manufacturers. The criteria considered under 42 
U.S.C. 6295(m)(1)(A) and the additional analysis are discussed in the 
following subsections. Because an analysis of potential cost 
effectiveness and energy savings first requires an evaluation of the 
relevant technology, DOE first discusses the technological feasibility 
of amended standards. DOE then addresses the cost effectiveness and 
energy savings associated with potential amended standards.
1. Technological Feasibility
    EPCA mandates that DOE consider whether amended energy conservation 
standards for CPSVs would be technologically feasible. (42 U.S.C. 
6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)(B)) DOE has determined that 
there are technology options that would improve the efficiency of 
CPSVs. These technology options are being used in commercially 
available CPSVs and therefore are technologically feasible. (See 
section IV.A.2 for further information.) Hence, DOE has determined that 
amended energy conservation standards for CPSVs are technologically 
feasible.
2. Cost Effectiveness
    EPCA requires DOE to consider whether energy conservation standards 
for CPSVs would be cost effective through an evaluation of the savings 
in operating costs throughout the estimated average life of the covered 
product compared to any increase in the price of, or in the initial 
charges for, or maintenance expenses of, the covered product which are 
likely to result from the imposition of an amended standard. (42 U.S.C. 
6295(m)(1)(A), 42 U.S.C. 6295(n)(2)(C), and 42 U.S.C. 
6295(o)(2)(B)(i)(II)). DOE conducted an LCC analysis to estimate the 
net costs/benefits to users from increased efficiency in the considered 
CPSVs. (See results in Table V.1 of this document). DOE then aggregated 
the results from the LCC analysis to estimate the NPV of the total 
costs and benefits experienced by the Nation for all three scenarios 
considered. (See results in Table V.6 of this document). As noted, the 
inputs for determining the NPV are (1) total annual installed cost, (2) 
total annual operating costs (energy costs and repair and maintenance 
costs), and (3) a discount factor to calculate the present value of 
costs and savings.
    DOE considered each of the efficiency levels. All efficiency levels 
for the reference case scenario (i.e., nearest neighbor) would result 
in a positive NPV at the 3-percent and 7-percent discount rates. DOE 
notes that the lack of incremental costs to consumers associated with 
more efficient products makes LCC and NPV values cost effective. 
However, in DOE's product type switch scenario, amended standards could 
result in a negative NPV (see section V.D.4 for further discussion).
3. Significant Conservation of Energy
    EPCA also mandates that DOE consider whether amended energy 
conservation standards for CPSVs would result in significant 
conservation of energy. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 
6295(n)(2)(A)). To estimate the energy savings attributable to 
potential amended standards for CPSVs, DOE compared their energy 
consumption under the no-new-standards case to their anticipated energy 
consumption under each potential standard level. The savings are 
measured over the entire lifetime of product purchased in the 30-year 
period that begins in the year of anticipated compliance with amended 
standards (2027-2056).
    DOE estimates that amended standards for CPSVs for the reference 
case scenario (i.e., nearest neighbor) would result in maximum energy 
savings of 0.053 quads FFC energy savings at EL 1 over a 30-year 
analysis period (2027-2056). (See results in Table V.4 of this 
document.) However, in DOE's product type switch scenario, amended 
standards could result in an increase in FFC energy use (see section 
V.D.4 for further discussion).
4. Additional Consideration
    EPCA lists certain additional factors for DOE to consider in 
deciding whether an amended energy conservation standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)).
    As part of this analysis, DOE considers the economic impact of the 
standard on manufacturers of the products subject to an amended 
standard. (42 U.S.C. 6295(o)(2)(B)(i)(I). DOE investigated the 
manufacturer impacts of any potential amended standards and estimates 
that amended standards for CPSVs would result in a reduction in INPV 
between 10.1 and 8.0 percent. (See results in Table V.2 and Table V.3 
of this document.)

[[Page 34091]]

    In this analysis, DOE also considers any lessening of the utility 
or the performance of the covered products likely to result from the 
imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(IV)). As noted 
in section IV.G, spray force is a driving factor of consumer utility 
and consumer satisfaction. As discussed in section IV.C.1.b of this 
document, there is a direct relationship between flow rate and spray 
force. Therefore, the relationship between consumer satisfaction and 
spray force for CPSVs makes it possible that consumers may opt to 
switch product classes if they are unsatisfied with the spray force 
available to them in their current product class due to amended 
standards. In some cases, consumers react to amended standards by 
switching to an alternative product that consumes more water and energy 
than their current product. As discussed in section IV.H.2 of this 
document, the change in product availability since the January 2016 
Final Rule makes it more likely that certain consumers would switch to 
higher flow rate products in response to amended standards. This shift 
increases the likelihood that amended standards could result in more 
energy and water use and a negative NPV. Accordingly, DOE accounted for 
this potential reduction in utility by considering the possibility of 
the product type switch scenario (section IV.H.2 of this document).
    In DOE's sensitivity analysis, wherein a subset of consumers exit 
the CPSV market and switch to higher flow rate products such as faucets 
(product type switch scenario), all efficiency levels would result in a 
negative NPV at the 3-percent and 7-percent discount rates. Further, 
amended standards could result in an increase in FFC energy use between 
0.103 (EL1) and 0.117 (EL3) quads over a 30-year analysis period (2027-
2056).
    Based on these additional considerations, DOE has determined that 
amended standards would not be economically justified at any efficiency 
level due to the increased likelihood of consumers switching products 
to higher flow rate products as a result of decreased consumer utility 
due to potential amended standards, and the corresponding negative NPV 
of this product type switch scenario and the negative INPV.
5. Summary
    In this final determination, although energy and water savings are 
possible in the reference case analysis, there is risk that amended 
standards could result in increased energy and water consumption if 
consumers switch to products with higher flow rates, like faucets (as 
demonstrated in the product type switch scenario). Similarly, the 
product-type switch scenario would also result in a negative NPV for 
consumers. As discussed in section IV.H.2 of this document, the change 
in product availability since the 2016 Final Rule makes it more likely 
that consumers would switch to products with higher flow rates in the 
presence of amended standards. Therefore, it is more likely that 
amended standards could result in increases in water, energy, and 
costs. The risk of these potential increases outweigh the cost 
effectiveness of any amended standards.
    As such, any potential benefits from amended standards are 
outweighed by the potential of increased energy and water use and the 
additional burden on manufacturers. DOE has determined, based on the 
estimated negative NPV values resulting from product type switching and 
the estimated additional burden on manufacturers, amended standards 
would not be economically justified. Therefore, DOE has determined that 
amended standards for CPSVs are not justified at this time.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' 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 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'') 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 final 
regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this final regulatory action does not constitute a 
``significant regulatory action'' under section 3(f) of E.O. 12866. 
Accordingly, this action was not submitted to OIRA for review under 
E.O. 12866.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of 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 (Aug. 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).
    DOE reviewed this final determination under the provisions of the 
Regulatory Flexibility Act and the policies and procedures published on 
February 19, 2003. DOE is not amending standards for CPSVs. This final 
determination would not result in any CPSV manufacturer, large or 
small, to incur any additional burden or significant economic impact 
because the current energy conservation standards would remain 
unchanged and in place. As a result, DOE concludes and certifies that 
the final determination has no significant economic impact on any small 
entities. Accordingly, DOE has not

[[Page 34092]]

prepared a FRFA for this final determination.

C. Review Under the Paperwork Reduction Act

    Manufacturers of commercial prerinse spray valves must certify to 
DOE that their products comply with any applicable energy conservation 
standards. In certifying compliance, manufacturers must test their 
products according to the DOE test procedures for commercial prerinse 
spray valves, including any amendments adopted for those test 
procedures. DOE has established regulations for the certification and 
recordkeeping requirements for all covered consumer products and 
commercial equipment, including commercial prerinse spray valves. (See 
generally 10 CFR part 429). The collection-of-information requirement 
for the certification and recordkeeping is subject to review and 
approval by OMB under the Paperwork Reduction Act (``PRA''). This 
requirement has been approved by OMB under OMB control number 1910-
1400. Public reporting burden for the certification is estimated to 
average 35 hours per response, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act of 1969 
(``NEPA''), DOE has analyzed this proposed determination in accordance 
with NEPA and DOE's NEPA implementing regulations (10 CFR part 1021). 
DOE has determined that this rule qualifies for categorical exclusion 
under 10 CFR part 1021, subpart D, appendix A4 because it is an 
interpretation or ruling in regards to an existing regulation and 
otherwise meets the requirements for application of a categorical 
exclusion. See 10 CFR 1021.410. Therefore, DOE has determined that 
promulgation of this rule 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 Environmental 
Impact Statement.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The E.O. 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 E.O. 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 products that are 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. (42 
U.S.C. 6297). Therefore, no further action is required by E.O. 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.
    This final determination contains neither an intergovernmental 
mandate nor a mandate that may result in the expenditure of $100 
million or more in any 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

[[Page 34093]]

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 (Mar. 15, 
1988), DOE has determined that this final determination would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

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

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). 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%20Updated%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 E.O. 12866, 
or any successor E.O.; 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.
    This final determination, which does not amend energy conservation 
standards for CPSVs, is not a significant regulatory action under E.O. 
12866. Moreover, it would not have a significant adverse effect on the 
supply, distribution, or use of energy, nor has it been designated as 
such by the Administrator at OIRA. Accordingly, 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 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 (Jan. 14, 2005).
    In response to the Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a Peer Review report 
pertaining to the energy conservation standards rulemaking 
analyses.\34\ 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 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 report.\35\
---------------------------------------------------------------------------

    \34\ Department of Energy--Office of Energy Efficiency and 
Renewable Energy. Energy Conservation Standards Rulemaking Peer 
Review Report. 2007. Available at www.energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0.
    \35\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule 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 DOE was signed on May 31, 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 DOE. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on June 1, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-12107 Filed 6-3-22; 8:45 am]
BILLING CODE 6450-01-P


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