2010-3479. Energy Conservation Standards for Residential Clothes Dryers and Room Air Conditioners: Public Meeting and Availability of the Preliminary Technical Support Document

AGENCY:

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

ACTION:

Notice of public meeting and availability of preliminary technical support document.

SUMMARY:

The U. S. Department of Energy (DOE) will hold a public meeting to discuss and receive comments on the product classes that DOE plans to analyze for purposes of amending energy conservation standards for residential clothes dryers and room air conditioners; the analytical framework, models, and tools that DOE is using to evaluate standards for these products; the results of preliminary analyses performed by DOE for these products; and potential energy conservation standard levels derived from these analyses that DOE could consider for these products. DOE also encourages written comments on these subjects. To inform stakeholders and facilitate this process, DOE has prepared an agenda, a preliminary Technical Support Document (TSD), and briefing materials, which are available at:

http://www1.eere.energy.gov/​buildings/​appliance_​standards/​residential/​clothes_​dryers.html and http://www1.eere.energy.gov/​buildings/​appliance_​standards/​residential/​room_​ac.html.

DATES:

The Department will hold a public meeting on Tuesday, March 16, 2010, from 9 a.m. to 5 p.m. in Washington, DC. Any person requesting to speak at the public meeting should submit such request, along with an electronic copy of the statement to be given at the public meeting, before 4 p.m., Tuesday, March 2, 2010. Written comments are welcome, especially following the public meeting, and should be submitted by April 26, 2010.

ADDRESSES:

The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-098, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Please note that foreign nationals participating in the public meeting are subject to advance security screening procedures. If a foreign national wishes to participate in the public meeting, please inform DOE of this fact as soon as possible by contacting Ms. Brenda Edwards at [phone] so that the necessary procedures can be completed.

Interested persons may submit comments, identified by docket number EERE-2007-BT-STD-0010, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• E-mail: [e-mail]. Include EERE-2007-BT-STD-0010 and/or RIN 1904-AA89 in the subject line of the message.
• Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, Public Meeting for Residential Clothes Dryers and Room Air Conditioners, EERE-2007-BT-STD-0010 and/or RIN 1904-AA89, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Phone: [phone]. Please submit one signed paper original.
• Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 6th Floor, 950 L'Enfant Plaza, SW., Washington, DC 20024. Phone: [phone]. Please submit one signed paper original.

Instructions: All submissions received must include the agency name and docket number or RIN for this rulemaking.

Docket: For access to the docket to read background documents, a copy of the transcript of the public meeting, or comments received, go to the U.S. Department of Energy, 6th Floor, 950 L'Enfant Plaza, SW., Washington, DC 20024, [phone], between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards at [phone] for additional information regarding visiting the Resource Room.

FOR FURTHER INFORMATION CONTACT:

Stephen Witkowski, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Phone: [phone]. e-mail: [e-mail].

Francine Pinto or Betsy Kohl, U.S. Department of Energy, Office of General Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Phone: [phone]. e-mail: [e-mail] or [e-mail].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Statutory Authority

II. History of Standards Rulemaking for Residential Clothes Dryers and Room Air Conditioners

A. Background

B. Current Rulemaking Process

i. Residential Clothes Dryers

ii. Room Air Conditioners

iii. Consent Decree

III. Summary of the Analyses Performed by DOE

A. Engineering Analysis

B. Markups To Determine Product Prices

C. Energy Use Characterization

D. Life-Cycle Cost and Payback Period Analyses

E. National Impact Analysis

I. Statutory Authority

Part A of Title III of the Energy Policy and Conservation Act of 1975 (EPCA), 42 U.S.C. 6291 et seq., established an energy conservation program for major household appliances, which includes residential clothes dryers and room air conditioners. This program authorizes the Department to establish technologically feasible, economically justified energy efficiency standards for certain consumer products that would result in substantial national energy savings, and for which both natural market forces and voluntary labeling programs have been and/or are expected to be ineffective in promoting energy efficiency.

DOE must design each new or amended standard for these products to (1) achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified, and (2) result in significant conservation of energy. (42 U.S.C. 6295(o)(2)(A)) To determine whether a proposed standard is economically justified, DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens to the greatest extent practicable, weighing the following seven factors:

1. The economic impact of the standard on manufacturers and consumers of products subject to the standard;

2. The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products which are likely to result from the imposition of the standard;

3. The total projected amount of energy savings likely to result directly from the imposition of the standard;

4. Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard;

5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;

6. The need for national energy conservation; and

7. Other factors the Secretary considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i).)

Prior to proposing a standard, DOE typically seeks public input on the analytical framework, models, and tools that DOE will use to evaluate standards for the product at issue; the results of preliminary analyses performed by DOE for the product; and potential energy conservation standard levels derived from these analyses that DOE could consider.

II. History of Standards Rulemaking for Residential Clothes Dryers and Room Air Conditioners

A. Background

The amendments to EPCA in the National Appliance Energy Conservation Act of 1987 (NAECA), Public Law 100-12, established prescriptive energy conservation standards for residential clothes dryers and performance energy conservation standards for room air conditioners, as well as requirements for determining whether these standards should be amended. (42 U.S.C. 6295(c) and (g).)

i. Residential Clothes Dryers

EPCA, as amended by NAECA, requires gas clothes dryers not to be equipped with constant burning pilots and requires that DOE conduct two cycles of rulemakings to determine if more stringent standards are justified. (42 U.S.C. 6295 (g)(3) and (4)) DOE defines “electric clothes dryer” under EPCA as “a cabinet-like appliance designed to dry fabrics in a tumble-type drum with forced air circulation. The heat source is electricity and the drum and blower(s) are driven by an electric motor(s).” (Title 10 of the Code of Federal Regulations (CFR) 430.2) Gas clothes dryers have a similar definition, except the heat source is gas. On May 14, 1991, DOE published a final rule in the Federal Register (FR) establishing the first set of performance standards for residential clothes dryers; the new standards became effective on May 14, 1994. 56 FR 22250. DOE initiated a second standards rulemaking for residential clothes dryers by publishing an advance notice of proposed rulemaking (ANOPR) in the Federal Register on November 14, 1994. 59 FR 56423. Pursuant to the priority-setting process outlined in the July 15, 1996, Procedures, Interpretations and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products (61 FR 36974 (July 15, 1996) (establishing 10 CFR part 430, subpart C, appendix A); the “Process Rule”), however, DOE classified the standards rulemaking for residential clothes dryers as a low priority for its fiscal year 1998 priority-setting process. As a result, DOE suspended the standards rulemaking activities for them.

ii. Room Air Conditioners

NAECA established performance standards for room air conditioners that became effective on January 1, 1990, and directed DOE to conduct two cycles of rulemakings to determine if more stringent standards are justified. (42 U.S.C. 6295 (c)(1) and (2)) DOE defines “room air conditioner” under EPCA as a “consumer product, other than a `packaged terminal air conditioner,' which is powered by a single phase electric current and which is an encased assembly designed as a unit for mounting in a window or through the wall for the purpose of providing delivery of conditioned air to an enclosed space. It includes a prime source of refrigeration and may include a means for ventilating and heating.” (10 CFR 430.2) On March 4, 1994, DOE published in the Federal Register a notice of proposed rulemaking (NOPR) for several products, including room air conditioners. 59 FR 10464. As a result of the Process Rule, DOE suspended activities to finalize standards for room air conditioners. DOE subsequently resumed rulemaking activities related to room air conditioners, and, on September 24, 1997, DOE published a final rule establishing an updated set of performance standards, with an effective date of October 1, 2000. 62 FR 50122.

iii. Consent Decree

Under the consolidated Consent Decree in New York v. Bodman, No. 05 Civ. 7807 (S.D.N.Y. filed Sept. 7, 2005) and Natural Resources Defense Council v. Bodman, No. 05 Civ. 7808 (S.D.N.Y. filed Sept. 7, 2005) DOE is required to publish a final rule amending energy conservation standards for residential clothes dryers and room air conditioners no later than June 30, 2011.

B. Current Rulemaking Process

To initiate the current rulemaking to consider energy conservation standards, the Department published on its Web site the Energy Conservation Standards Rulemaking Framework Document for Residential Clothes Dryers and Room Air Conditioners (the framework document) to explain the issues, analyses, and process that it anticipated using for the development of energy efficiency standards for these products. This document is available at http://www1.eere.energy.gov/​buildings/​appliance_​standards/​residential/​pdfs/​dryer_​roomac_​framework.pdf. DOE also published a notice announcing the availability of the framework document and a public meeting to discuss the proposed analytical framework, and inviting written comments concerning the development of standards for residential clothes dryers and room air conditioners. 72 FR 57254 (October 9, 2007).

The focus of the public meeting, which was held on October 24, 2007, was to discuss the analyses and issues identified in various sections of the framework document. At the meeting, DOE described the different analyses it would conduct, the methods proposed for conducting them, and the relationships among the various analyses. Manufacturers, trade associations, environmental advocates, regulators, and other interested parties attended the meeting. Comments received since publication of the framework document have helped identify issues DOE needs to address in developing a proposed standard and provided information contributing to DOE's proposed resolution of these issues.

III. Summary of the Analyses Performed by DOE

For each of the residential clothes dryer and room air conditioner products currently under consideration, DOE conducted in-depth technical analyses in the following areas: (1) Engineering, (2) markups to determine product price, (3) energy-use characterization, (4) life-cycle cost (LCC) and payback period (PBP) analyses, and (5) national impact analysis (NIA). These analyses resulted in a preliminary TSD that presents the methodology and results of each of these analyses. The preliminary TSD is available at the Web address given in the SUMMARY section of this notice. The analyses are described in more detail below.

DOE also conducted several other analyses that either support the five major analyses or are preliminary analyses that will be expanded upon for the NOPR. These analyses include the market and technology assessment, the screening analysis, which contributes to the engineering analysis, and the shipments analysis, which contributes to the NIA. In addition to these analyses, DOE has completed preliminary work on the manufacturer impact analysis (MIA) and identified the methods to be used for the LCC subgroup analysis, the environmental assessment, the employment analysis, the regulatory impact analysis, and the utility impact analysis. DOE will expand on these analyses in the NOPR.

A. Engineering Analysis

The engineering analysis establishes the relationship between the cost and efficiency of a product DOE is evaluating for amended energy conservation standards. This relationship serves as the basis for cost-benefit calculations for individual consumers, manufacturers, and the nation. The engineering analysis identifies representative baseline products, which is the starting point for analyzing technologies that provide energy efficiency improvements. Baseline product refers to a model or models having features and technologies typically found in products currently offered for sale. The baseline model in each product class represents the characteristics of products in that class and, for products already subject to energy conservation standards, usually is a model that just meets the current standard. Chapter 5 of the preliminary TSD discusses the engineering analysis.

B. Markups To Determine Product Prices

DOE derives consumer prices for products based on manufacturer costs, manufacturer markups, retailer markups, distributor markups, contractor markups, builder markups, and sales taxes. In deriving these markups, DOE has determined (1) The distribution channels for product sales; (2) the markup associated with each party in the distribution channels; and (3) the existence and magnitude of differences between markups for baseline products (baseline markups) and for more efficient products (incremental markups). DOE calculates both overall baseline and overall incremental markups based on the product markups at each step in the distribution channel. The overall incremental markup relates the change in the manufacturer sales price of higher efficiency models (the incremental cost increase) to the change in the retailer or distributor sales price. Chapter 6 of the preliminary TSD discusses the estimation of markups.

C. Energy Use Characterization

The energy use characterization provides estimates of annual energy consumption for the residential clothes dryers and room air conditioners, which DOE uses in the LCC and PBP analyses and the NIA. DOE developed energy consumption estimates for all of the product classes analyzed in the engineering analysis, as the basis for its energy use estimates. Chapter 7 of the preliminary TSD discusses the energy use characterization.

D. Life-Cycle Cost and Payback Period Analyses

The LCC and PBP analyses determine the economic impact of potential standards on individual consumers. The LCC is the total consumer expense for a product over the life of the product. The LCC analysis compares the LCCs of products designed to meet possible energy conservation standards with the LCCs of the products likely to be installed in the absence of standards. DOE determines LCCs by considering (1) Total installed cost to the purchaser (which consists of manufacturer selling price, sales taxes, distribution chain markups, and installation cost); (2) the operating expenses of the products (energy use and maintenance); (3) product lifetime; and (4) a discount rate that reflects the real consumer cost of capital and puts the LCC in present-value terms. The PBP represents the number of years needed to recover the increase in purchase price (including installation cost) of more efficient products through savings in the operating cost of the product. It is the change in total installed cost due to increased efficiency divided by the change in annual operating cost from increased efficiency. Chapter 8 of the preliminary TSD discusses the LCC and PBP analyses.

E. National Impact Analysis

The NIA estimates the national energy savings (NES) and the net present value (NPV) of total consumer costs and savings expected to result from new standards at specific efficiency levels. DOE calculated NES and NPV for each efficiency level as the difference between a base-case forecast (without new standards) and the standards case forecast (with standards). DOE determined national annual energy consumption by multiplying the number of units in use (by vintage) by the average unit energy consumption (also by vintage). Cumulative energy savings are the sum of the annual NES determined over a specified time period. The national NPV is the sum over time of the discounted net savings each year, which consists of the difference between total operating cost savings and increases in total installed costs. Critical inputs to this analysis include shipments projections, retirement rates (based on estimated product lifetimes), and estimates of changes in shipments and retirement rates in response to changes in product costs due to standards. Chapter 10 of the preliminary TSD discusses the NIA.

DOE consulted with interested parties as part of its process for conducting all of the analyses and invites further input from the public on these topics. The preliminary analytical results are subject to revision following review and input from the public. The final rule will contain the final analysis results.

The Department encourages those who wish to participate in the public meeting to obtain the preliminary TSD and to be prepared to discuss its contents. A copy of the preliminary TSD is available at the Web address given in the SUMMARY section of this notice. However, public meeting participants need not limit their comments to the topics identified in the preliminary TSD. The Department is also interested in receiving views concerning other relevant issues that participants believe would affect energy conservation standards for these products or that DOE should address in the NOPR.

Furthermore, the Department welcomes all interested parties, regardless of whether they participate in the public meeting, to submit in writing by April 26, 2010, comments and information on matters addressed in the preliminary TSD and on other matters relevant to consideration of standards for residential clothes dryers and room air conditioners.

The public meeting will be conducted in an informal, conference style. A court reporter will be present to record the minutes of the meeting. There shall be no discussion of proprietary information, costs or prices, market shares, or other commercial matters regulated by United States antitrust laws.

After the public meeting and the expiration of the period for submitting written statements, the Department will consider all comments and additional information that is obtained from interested parties or through further analyses, and it will prepare a NOPR. The NOPR will include proposed energy conservation standards for the products covered by this rulemaking, and members of the public will be given an opportunity to submit written and oral comments on the proposed standards.

Issued in Washington, DC, on February 12, 2010.

Cathy Zoi,

Assistant Secretary, Energy Efficiency and Renewable Energy.