I 113th CONGRESS 2d Session H. R. 4066 IN THE HOUSE OF REPRESENTATIVES February 18, 2014 Mr. Whitfield (for himself, Mr. Latta , Mr. Welch , and Mr. Matheson ) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To modify the efficiency standards for grid-enabled water heaters.

1. Grid-enabled water heaters Part B of title III of the Energy Policy and Conservation Act ( 42 U.S.C. 6291 et seq. ) is amended— (1) in section 325(e) ( 42 U.S.C. 6295(e) ), by adding at the end the following: (6) Additional standards for grid-enabled water heaters (A) Definitions In this paragraph: (i) Activation key The term activation key means a physical device or control directly on the water heater, a software code, or a digital communication— (I) that must be activated to enable the product to operate continuously and at its designed specifications and capabilities; and (II) without which activation the product will provide not greater than 50 percent of the rated first hour delivery of hot water certified by the manufacturer. (ii) Grid-enabled water heater The term grid-enabled water heater means an electric resistance water heater that— (I) has a rated storage tank volume of more than 75 gallons; (II) is manufactured on or after April 16, 2015; (III) has— (aa) an energy factor of not less than 1.061 minus the product obtained by multiplying— (AA) the rated storage volume of the tank, expressed in gallons; and (BB) 0.00168; or (bb) an efficiency level equivalent to the energy factor under item (aa) and expressed as a uniform energy descriptor based on the revised test procedure for water heaters described in paragraph (5); (IV) is equipped by the manufacturer with an activation key; and (V) bears a permanent label applied by the manufacturer that— (aa) is made of material not adversely affected by water; (bb) is attached by means of non-water-soluble adhesive; and (cc) advises purchasers and end-users of the intended and appropriate use of the product with the following notice printed in 16.5 point Arial Narrow Bold font: IMPORTANT INFORMATION: This water heater is intended only for use as part of an electric thermal storage or demand response program. It will not provide adequate hot water unless enrolled in such a program and activated by your utility company or another program operator. Confirm the availability of a program in your local area before purchasing or installing this product. . (B) Requirement The manufacturer or private labeler shall provide the activation key only to utilities or other companies operating electric thermal storage or demand response programs that use grid-enabled water heaters. (C) Reports (i) Manufacturers The Secretary shall require each manufacturer of grid-enabled water heaters to report to the Secretary annually the quantity of grid-enabled water heaters that the manufacturer ships each year. (ii) Operators The Secretary shall require utilities and other demand response and thermal storage program operators to report annually the quantity of grid-enabled water heaters activated for their programs using forms of the Energy Information Agency or using such other mechanism that the Secretary determines appropriate after an opportunity for notice and comment. (iii) Confidentiality requirements The Secretary shall treat shipment data reported by manufacturers as confidential business information. (D) Publication of information (i) In general In 2017 and 2019, the Secretary shall publish an analysis of the data collected under subparagraph (C) to assess the extent to which shipped products are put into use in demand response and thermal storage programs. (ii) Prevention of product diversion If the Secretary determines that sales of grid-enabled water heaters exceed by 15 percent or greater the quantity of such products activated for use in demand response and thermal storage programs annually, the Secretary shall, after opportunity for notice and comment, establish procedures to prevent product diversion for non-program purposes. (E) Compliance (i) In general Subparagraphs (A) through (D) shall remain in effect until the Secretary determines under this section that grid-enabled water heaters do not require a separate efficiency requirement. (ii) Effective date If the Secretary exercises the authority described in clause (i) or amends the efficiency requirement for grid-enabled water heaters, that action will take effect on the date described in subsection (m)(4)(A)(ii). (iii) Consideration In carrying out this section with respect to electric water heaters, the Secretary shall consider the impact on thermal storage and demand response programs, including the consequent impact on energy savings, electric bills, electric reliability, integration of renewable resources, and the environment. (iv) Requirements In carrying out this subparagraph, the Secretary shall require that grid-enabled water heaters be equipped with communication capability to enable the grid-enabled water heaters to participate in ancillary services programs if the Secretary determines that the technology is available, practical, and cost-effective. ; and (2) in section 332(a) ( 42 U.S.C. 6302(a) )— (A) in paragraph (5), by striking or at the end; (B) in the first paragraph (6), by striking the period at the end and inserting a semicolon; (C) by redesignating the second paragraph (6) as paragraph (7); (D) in subparagraph (B) of paragraph (7) (as so redesignated), by striking the period at the end and inserting ; or ; and (E) by adding at the end the following: (8) with respect to grid-enabled water heaters that are not used as part of an electric thermal storage or demand response program, for any person knowingly and repeatedly— (A) to distribute activation keys for those grid-enabled water heaters; (B) otherwise to enable the full operation of those grid-enabled water heaters; or (C) to remove or render illegible the labels of those grid-enabled water heaters. .