Proposed Rule2021-14273
Energy Conservation Program for Appliance Standards: Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 7, 2021
Issuing agencies
Energy Department
Abstract
The U.S. Department of Energy (``DOE'' or the ``Department'') proposed major revisions to the Department's ``Procedures, Interpretations, and Policies for Consideration of New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Certain Commercial/Industrial Equipment'' (``Process Rule'') in a notice of proposed rulemaking that was published on April 12, 2021. DOE accepted comments on those proposed revisions through May 27, 2021. In this document, DOE proposes additional revisions to the Process Rule and requests comment on the proposals and any potential alternatives. These additional proposed revisions are consistent with current DOE practice and would remove unnecessary obstacles to DOE's ability to meet its statutory obligations under the Energy Policy and Conservation Act (``EPCA'').
Full Text
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<title>Federal Register, Volume 86 Issue 127 (Wednesday, July 7, 2021)</title>
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[Federal Register Volume 86, Number 127 (Wednesday, July 7, 2021)]
[Proposed Rules]
[Pages 35668-35689]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14273]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2021-BT-STD-0003]
RIN 1904-AF13
Energy Conservation Program for Appliance Standards: Procedures,
Interpretations, and Policies for Consideration in New or Revised
Energy Conservation Standards and Test Procedures for Consumer Products
and Commercial/Industrial Equipment
AGENCY: Office of Energy Efficiency and Renewable Energy (EERE),
Department of Energy.
ACTION: Notice of proposed rulemaking and request for comment.
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SUMMARY: The U.S. Department of Energy (``DOE'' or the ``Department'')
proposed major revisions to the Department's ``Procedures,
Interpretations, and Policies for Consideration of New or Revised
Energy Conservation Standards and Test Procedures for Consumer Products
and Certain Commercial/Industrial Equipment'' (``Process Rule'') in a
notice of proposed rulemaking that was published on April 12, 2021. DOE
accepted comments on those proposed revisions through May 27, 2021. In
this document, DOE proposes additional revisions to the Process Rule
and requests comment on the proposals and any potential alternatives.
These additional proposed revisions are consistent with current DOE
practice and would remove unnecessary obstacles to DOE's ability to
meet its statutory obligations under the Energy Policy and Conservation
Act (``EPCA'').
DATES: Comments: DOE will accept comments, data, and information
regarding all aspects of this notice of proposed rulemaking on or
before August 23, 2021. DOE will hold a webinar on Tuesday, August 10,
2021 from 11:00 a.m. to 4:00 p.m. See section V, ``Public
Participation,'' for webinar registration information, participant
instructions, and information about the capabilities available to
webinar participants.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at <a href="https://www.regulations.gov/docket/EERE-2021-BT-STD-0003">https://www.regulations.gov/docket/EERE-2021-BT-STD-0003</a>. Follow the instructions for submitting comments.
Alternatively, interested persons may submit comments by email to the
following address: <a href="/cdn-cgi/l/email-protection#7202001d1117010100071e1740424043212636424242413217175c161d175c151d04"><span class="__cf_email__" data-cfemail="88f8fae7ebedfbfbfafde4edbab8bab9dbdcccb8b8b8bbc8ededa6ece7eda6efe7fe">[email protected]</span></a>. Include ``2nd
2021 Process Rule NOPR'' and docket number EERE-2021-BTD-STD-0003 and/
or RIN number 1904-AF13 in the subject line of the message. Submit
electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file
format, and avoid the use of special characters or any form of
encryption.
Although DOE has routinely accepted public comment submissions
through a variety of mechanisms, including postal mail and hand
delivery/courier, the Department has found it necessary to make
temporary modifications to the comment submission process in light of
the ongoing coronavirus disease 2019 (``COVID-19'') pandemic. DOE is
currently accepting only electronic submissions at this time. If a
commenter finds that this change poses an undue hardship, please
contact Appliance Standards Program staff at (202) 586-1445 to discuss
the need for alternative arrangements. Once the Covid-19 pandemic
health emergency is resolved, DOE anticipates resuming all of its
regular options for public comment submission, including postal mail
and hand delivery/courier.
No telefacsimiles (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section V (Public Participation) of this
document.
Docket: The docket for this rulemaking, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All documents
in the docket are listed in the <a href="https://www.regulations.gov">https://www.regulations.gov</a> index. This
docket also contains all comments and rulemaking documents associated
with the notice of proposed rulemaking that was published on April 12,
2021. However, not all documents listed in the index may be publicly
available, such as information that is exempt from public disclosure.
The docket web page can be found at: <a href="https://www.regulations.gov/docket/EERE-2021-BT-STD-0003">https://www.regulations.gov/docket/EERE-2021-BT-STD-0003</a>. The docket web page contains instructions
on how to access all documents, including public comments, in the
docket.
FOR FURTHER INFORMATION CONTACT:
Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
<a href="/cdn-cgi/l/email-protection#55142525393c343b36300621343b313427312604203026213c3a3b261530307b313a307b323a23"><span class="__cf_email__" data-cfemail="7d3c0d0d11141c131e182e091c13191c0f190e2c08180e091412130e3d181853191218531a120b">[email protected]</span></a>.
Mr. Pete Cochran, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-9496. Email: <a href="/cdn-cgi/l/email-protection#eebe8b9a8b9cc0ad818d869c8f80ae869fc08a818bc0898198"><span class="__cf_email__" data-cfemail="baeadfcedfc894f9d5d9d2c8dbd4fad2cb94ded5df94ddd5cc">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of Proposal
II. Authority and Background
A. Authority
B. Background
III. Discussion of Proposed Revisions to the Process Rule
A. Coverage Determinations
B. Process for Developing Energy Conservation Standards
C. Process for Developing Test Procedures
D. ASHRAE Equipment
E. Analytical Methodology
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
[[Page 35669]]
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act of 1995
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Consistent With OMB's Information Quality Bulletin for
Peer Review
V. Public Participation
A. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Webinar
D. Submission of Comments
VI. Approval of the Office of the Secretary
I. Summary of Proposal
On February 14, 2020, the United States Department of Energy
(``DOE'' or ``the Department'') published a final rule (``February 2020
Final Rule'') in the Federal Register that made significant revisions
to its ``Procedures, Interpretations, and Policies for Consideration of
New or Revised Energy Conservation Standards and Test Procedures for
Consumer Products and Certain Commercial/Industrial Equipment''
(``Process Rule'') found in 10 CFR part 430, subpart C, appendix A. 85
FR 8626. DOE also published a companion final rule on August 19, 2020
(``August 2020 Final Rule''), that clarified how DOE would conduct a
comparative analysis across all trial standard levels when determining
whether a particular trial standard level was economically justified.
See 85 FR 50937. These rules collectively modified the Process Rule
that DOE had originally issued on July 15, 1996 (``1996 Process Rule'')
into its current form. See 61 FR 36974 and 10 CFR part 430, subpart C,
appendix A (2021). While the 1996 Process Rule acknowledged that it
would not be applicable to every rulemaking and that the circumstances
of a particular rulemaking should dictate application of these
generally applicable practices,\1\ the revisions made in the February
2020 Final Rule sought to create a standardized rulemaking process that
was binding on the Department. 85 FR 8626, 8634. In creating this one-
size-fits-all approach, the February 2020 Final Rule and the August
2020 Final Rule also added additional steps to the rulemaking process
that are not required by any applicable statute.
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\1\ Id. 61 FR 36979.
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Subsequent events have caused DOE to reconsider the merits of a
one-size-fits-all rulemaking approach to establishing and amending
energy conservations standards and test procedures. Two of these events
are particularly salient. First, on October 30, 2020, a coalition of
non-governmental organizations filed suit under EPCA alleging that DOE
has failed to meet rulemaking deadlines for 25 different consumer
products and commercial equipment.\2\ On November 9, 2020, a coalition
of States filed a virtually identical lawsuit.\3\ In response to these
lawsuits, DOE has had to reconsider whether the benefits of a one-size-
fits-all rulemaking approach outweigh the increased difficulty such an
approach poses in meeting DOE's statutory deadlines and obligations
under EPCA. As mentioned previously, the 1996 Process Rule allowed for
``case-specific deviations and modifications of the generally
applicable rule.'' 61 FR 36974, 36979. This allowed DOE to tailor
rulemaking procedures to fit the specific circumstances of a particular
rulemaking. For example, under the 1996 Process Rule, minor
modifications to a test procedure would not automatically result in a
180-day delay before DOE could issue a notice of proposed energy
conservation standards. Eliminating these unnecessary delays would
better enable DOE to meet its obligations and deadlines under EPCA.
Further, the sooner new or amended energy conservation standards
eliminate less-efficient covered products and equipment from the
market, the greater the resulting energy savings and environmental
benefits.
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\2\ Natural Resources Defense Council v. DOE, Case No. 20-cv-
9127 (S.D.N.Y. 2020).
\3\ State of New York v. DOE, Case No. 20-cv-9362 (S.D.N.Y.
2020).
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Second, on January 20, 2021, the White House issued Executive Order
(``E.O.'') 13990, ``Protecting Public Health and the Environment and
Restoring Science to Tackle the Climate Crisis.'' 86 FR 7037 (Jan. 25,
2021). Section 1 of that Order lists a number of policies related to
the protection of public health and the environment, including reducing
greenhouse gas emissions and bolstering the Nation's resilience to the
impacts of climate change. 86 FR 7037, 7041. Section 2 of the Order
instructs all agencies to review ``existing regulations, orders,
guidance documents, policies, and any other similar agency actions
(agency actions) promulgated, issued, or adopted between January 20,
2017, and January 20, 2021, that are or may be inconsistent with, or
present obstacles to, [these policies].'' 86 FR 7037, 7041. Agencies
are directed, as appropriate and consistent with applicable law, to
consider suspending, revising, or rescinding these agency actions and
to immediately commence work to confront the climate crisis. 86 FR
7037, 7041. For certain explicitly enumerated agency actions, including
the February 2020 and the August 2020 Final Rules, the Order directs
agencies to consider publishing for notice and comment a proposed rule
suspending, revising, or rescinding the agency action within a specific
time frame. 86 FR 7037, 7037-7038. Under this mandate, DOE is directed
to propose any major revisions to these two rules by March 2021, with
any remaining revisions to be proposed by June 2021. 86 FR 7037, 7038.
In light of these events, DOE has identified several aspects of the
February 2020 and the August 2020 Final Rules (together, representing
the current Process Rule) that present obstacles to DOE's ability to
meet its obligations under EPCA. In accordance with E.O. 13990, DOE
proposed major revisions to the current Process Rule in a notice of
proposed rulemaking (NOPR) that was published on April 12, 2021
(``April 2021 NOPR''). 86 FR 18901. The comment period on the April
2021 NOPR ended on May 27, 2021.
In this document, DOE proposes additional revisions that would:
Further revise the process for coverage determination rulemakings;
provide additional flexibility for DOE during the pre-NOPR stages of
energy conservation standard and test procedure rulemakings, while
preserving opportunities for stakeholders to provide early input in the
rulemaking process; provide clarification on EPCA's rulemaking process
for ASHRAE equipment; and revise the sections on DOE's analytical
methods to reflect current rulemaking practices. These revisions are
summarized in the following table. Note that for ease of use and
clarity, the proposed regulatory text in this document contains both
the proposed regulatory text in the April 2021 NOPR and the new text
being proposed in this document. DOE is currently only soliciting
comments on the new, additional regulatory text proposed in this NOPR.
[[Page 35670]]
List of Proposed Revisions to the Process Rule 4
------------------------------------------------------------------------
Proposed revisions Proposed additional
Section from the April 2021 revisions in this
NOPR document
------------------------------------------------------------------------
1. Objectives............... Revise language to No revisions
be consistent with proposed.
the newly proposed
Section 3.
2. Scope.................... No revisions No revisions
proposed. proposed.
3. Mandatory Application of Replace with new No revisions
the Process Rule. Section 3, proposed.
``Application of
the Process Rule''.
4. Setting Priorities for No revisions No revisions
Rulemaking Activity. proposed. proposed.
5. Coverage Determination Eliminate the 180- Proposed
Rulemakings. day period in introductory text
paragraph (c) and revised
between paragraph (a) would
finalization of DOE eliminate the
test procedures and requirement that a
issuance of a NOPR coverage
proposing new or determination
amended energy rulemaking begins
conservation with a notice of
standards. proposed
determination and
allow DOE to seek
early stakeholder
input through
preliminary
rulemaking
documents; revised
paragraphs (b) and
(c) would eliminate
the requirement
that final coverage
determinations be
published prior to
the initiation of
any test procedure
or energy
conservation
standard rulemaking
and at least 180
days prior to
publication of a
test procedure
NOPR; revised
paragraph (d) would
allow DOE to
propose, if
necessary, an
amended coverage
determination
before proceeding
with a test
procedure or
standards
rulemaking.
6. Process for Developing Eliminate paragraph Revised paragraph
Energy Conservation (b), ``Significant (a) would eliminate
Standards. Savings of Energy''. the requirement for
a separate early
assessment request
for information
(``RFI'') and
clarify that DOE
will issue one or
more documents
during the pre-NOPR
stage of a
rulemaking; revised
paragraphs (a) and
(b) would clarify
public comment
periods for pre-
NOPR and NOPR
documents; revised
paragraph (a)(5)
would reflect
current DOE
rulemaking
practice.
7. Policies on Selection of Eliminate text in No revisions
Standards. paragraph (e)(2)(i) proposed.
requiring DOE to
conduct a
comparative
analysis when
determining whether
a proposed standard
level is
economically
justified.
8. Test Procedures.......... Clarify in paragraph Revised paragraph
(c) that DOE may (a) would eliminate
revise consensus the requirement for
industry test a separate early
procedure standards assessment request
for compliance, for information
certification, and (``RFI'') and
enforcement clarify that DOE
purposes; eliminate will issue one or
the 180-day period more documents
in paragraph (d) during the pre-NOPR
between stage of a
finalization of DOE rulemaking; revised
test procedures and paragraphs (a) and
issuance of a NOPR (b) would clarify
proposing new or public comment
amended energy periods for pre-
conservation NOPR and NOPR
standards. documents and
eliminate the
requirement that
DOE identify
necessary
modifications to a
test procedure
prior to initiating
an associated
energy conservation
standard
rulemaking.
9. ASHRAE Equipment......... No revisions Revise section to
proposed. follow ASHRAE
rulemaking
requirements in
EPCA.
10. Direct Final Rules...... Revise section to No revisions
clarify that DOE proposed.
will implement its
direct final rule
authority on a case-
by-case basis.
11. Negotiated Rulemaking Eliminate section... No revisions
Process. proposed.
12. Principles for No revisions No revisions
Distinguishing Between proposed. proposed.
Effective and Compliance
Dates.
13. Principles for the No revisions Revise to reflect
Conduct of the Engineering proposed. current DOE
Analysis. rulemaking
practice.
14. Principles for the Eliminate incorrect Revise to reflect
Analysis of Impacts on cross reference. current DOE
Manufacturers. rulemaking
practice.
15. Principles for the No revisions Revise to reflect
Analysis of Impacts on proposed. current DOE
Consumers. rulemaking
practice.
16. Consideration of Non- No revisions Revise to reflect
Regulatory Approaches. proposed. current DOE
rulemaking
practice.
17. Cross-Cutting Analytical No revisions Revise to reflect
Assumptions. proposed. current DOE
rulemaking
practice; move
discussion of
emissions analysis
into new section.
------------------------------------------------------------------------
* As part of the proposed revisions, DOE will reorganize and renumber
sections and subsections as required.
[[Page 35671]]
II. Authority and Background
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\4\ These proposed revisions are separate from and complementary
to the revisions contained in DOE's proposed regulatory text from
its April 2021 NOPR. See 86 FR 18901, 18915-18921 (April 12, 2021).
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A. Authority
Title III, Parts B \5\ and C \6\ of the Energy Policy and
Conservation Act, as amended, (``EPCA'' or ``the Act''), Public Law 94-
163 (42 U.S.C. 6291-6317, as codified), established the Energy
Conservation Program for Consumer Products and Certain Industrial
Equipment.\7\ Under EPCA, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing; (2)
certification and enforcement procedures; (3) establishment of Federal
energy conservation standards; and (4) labeling. Subject to certain
criteria and conditions, DOE is required to develop test procedures to
measure the energy efficiency, energy use, water use (as applicable),
or estimated annual operating cost of each covered product and covered
equipment during a representative average use cycle or period of use.
(42 U.S.C. 6293; 42 U.S.C. 6314) Manufacturers of covered products and
covered equipment must use the prescribed DOE test procedure when
certifying to DOE that their products and equipment comply with the
applicable energy conservation standards adopted under EPCA and when
making any other representations to the public regarding the energy use
or efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s);
42 U.S.C. 6314(a); and 42 U.S.C. 6316(a)) Similarly, DOE must use these
test procedures to determine whether the products comply with energy
conservation standards adopted pursuant to EPCA. (42 U.S.C. 6295(s); 42
U.S.C. 6316(a))
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\5\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\6\ Part C was added by Public Law 95-619, Title IV, Sec.
441(a). For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated Part A-1.
\7\ All references to EPCA in this document refer to the statute
as amended through Energy Act of 2020, Public Law 116-260 (Dec. 27,
2020).
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In addition, pursuant to EPCA, any new or amended energy
conservation standard for covered products (and at least certain types
of equipment) must be designed to achieve the maximum improvement in
energy efficiency that is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A); 42 U.S.C. 6316(a)) In determining
whether a standard is economically justified, EPCA requires DOE, to the
greatest extent practicable, to consider the following seven factors:
(1) The economic impact of the standard on the manufacturers and
consumers; (2) the savings in operating costs, throughout the estimated
average life of the products (i.e., life-cycle costs), compared with
any increase in the price of, or in the initial charges for, or
operating and maintaining expenses of, the products which are likely to
result from the imposition of the standard; (3) the total projected
amount of energy, or as applicable, water, savings likely to result
directly from the imposition of the standard; (4) any lessening of the
utility or the performance of the products likely to result from the
imposition of the standard; (5) the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from the imposition of the standard; (6) the need for
national energy and water conservation; and (7) other factors DOE finds
relevant. (42 U.S.C. 6295(o)(2)(B)(i)) Furthermore, the new or amended
standard must result in a significant conservation of energy (42 U.S.C.
6295(o)(3)(B); 42 U.S.C. 6313(a)(6); and 42 U.S.C. 6316(a)) and comply
with any other applicable statutory provisions.
B. Background
DOE conducted an effort between 1995 and 1996 to improve the
process it follows to develop energy conservation standards for covered
appliance products. This effort involved reaching out to many different
stakeholders, including manufacturers, energy-efficiency advocates,
trade associations, State agencies, utilities, and other interested
parties for input. The result was the publication of the 1996 Process
Rule. 61 FR 36974. This document was codified at 10 CFR part 430,
subpart C, appendix A, and it became known colloquially as the
``Process Rule.'' The goal of the Process Rule was to elaborate on the
procedures, interpretations, and policies that would guide the
Department in establishing new or revised energy conservation standards
for consumer products. The rule was issued without notice and comment
under the Administrative Procedure Act's (``APA'') exception for
``interpretative rules, general statements of policy, or rules of
agency organization, procedure, or practice.'' (5 U.S.C. 553(b)(A))
On December 18, 2017, DOE issued an RFI on potential revisions to
the Process Rule. 82 FR 59992. DOE subsequently published a NOPR
regarding the Process Rule in the Federal Register on February 13,
2019. 84 FR 3910. DOE held public meetings for both the RFI and NOPR.
After considering the comments it received, DOE then published a final
rule in the Federal Register on February 14, 2020, which significantly
revised the Process Rule. 85 FR 8626.
While DOE issued the 1996 Process Rule without notice and comment
as an interpretative rule, general statement of policy, or rule of
agency organization, procedure, or practice, the February 2020 Final
Rule was issued as a legislative rule subject to notice and comment.
For several reasons, as stated throughout this document and in the
April 2021 NOPR, DOE believes the Process Rule is best described and
utilized as generally applicable guidance that may guide, but not bind,
the Department's rulemaking process. In accordance with E.O. 13990, DOE
is using a notice and comment process to propose revisions to the
Process Rule. 86 FR 7037.
III. Discussion of Proposed Revisions to the Process Rule
The following sections discuss the additional, proposed revisions
to the Process Rule and request comment on those proposals. DOE is
currently only soliciting comments on the new, additional revisions
proposed in this NOPR and is not soliciting comments on the revisions
proposed in the April 2021 NOPR. In addition to those specific requests
for comment, DOE requests comment, data, and information regarding all
aspects of this notice of proposed rulemaking.
A. Coverage Determinations
In addition to specifying a list of covered products and equipment,
EPCA contains provisions that enable the Secretary of Energy to
classify additional types of consumer products and commercial/
industrial equipment as ``covered'' within the meaning of EPCA. (42
U.S.C. 6292(b); 42 U.S.C. 6312(b)) This authority allows DOE to
consider regulating additional products and equipment to further the
goals of EPCA, i.e., to conserve energy, as long as certain statutory
requirements are met. Under 42 U.S.C. 6312(b), DOE is required to
include commercial/industrial equipment as covered equipment ``by
rule.'' While there is no corresponding requirement to include consumer
products as covered products by rule,\8\ DOE conducts coverage
determination rulemakings for both
[[Page 35672]]
commercial/industrial equipment and consumer products.
---------------------------------------------------------------------------
\8\ Under 42 U.S.C. 6292(b), DOE is authorized to ``classify'' a
consumer product as a covered product if certain conditions are met.
But there is no mention of DOE having to make such classifications
by rule.
---------------------------------------------------------------------------
In the February 2020 Final Rule, DOE added a section on coverage
determination rulemakings. Among other things, the new section provided
that DOE will: (1) Initiate a coverage determination rulemaking with a
notice of proposed determination; (2) publish final coverage
determinations as separate notices prior to the initiation of any test
procedure or energy conservation standard rulemaking and at least 180
days prior to publication of a test procedure NOPR; and (3) finalize
any changes to an existing scope of coverage before proceeding with a
test procedure or energy conservation standard rulemaking. 85 FR 8626,
8648-8653.
As discussed previously, DOE is reconsidering whether the benefits
of a one-size-fits-all rulemaking approach that lacks flexibility and
includes extra procedural steps not required by EPCA outweigh the
increased difficulty such an approach poses in meeting DOE's statutory
deadlines and obligations under EPCA. (DOE is including a chart to
depict its proposed revised process for energy conservation standards
and test procedure rulemakings, as discussed in this document, in
Docket No. EERE-2021-BT-STD-0003. Available at: <a href="https://www.regulations.gov/docket/EERE-2021-BT-STD-0003">https://www.regulations.gov/docket/EERE-2021-BT-STD-0003</a>.) First, with respect
to the requirement that DOE initiate a coverage determination
rulemaking with a notice of proposed determination, DOE notes that in
some cases it may be necessary to gather information about a consumer
product or commercial/industrial equipment before issuing a proposed
determination of coverage. For instance, DOE may only classify a
consumer product as a covered product if it is necessary or appropriate
to carry out the purposes of EPCA and the average annual per-household
energy use of the consumer product is likely to exceed 100 kilowatt-
hours per year. (42 U.S.C. 6292(b)) As such, it may be beneficial to
first issue an RFI or other document to solicit comment on whether a
consumer product is likely to meet these requirements. Based on the
information received, DOE may choose not to proceed with a notice of
proposed determination. Accordingly, DOE proposes that it may issue an
RFI or other pre-rule document prior to a notice of proposed coverage
determination. DOE requests comments, information, and data on whether
its proposed approach is appropriate or on any suggested alternatives.
Second, regarding the requirements to finalize coverage
determinations prior to the initiation of any test procedure or energy
conservation standard rulemaking and at least 180 days prior to
publication of a test procedure NOPR, DOE notes that coverage
determination, test procedure, and energy conservation standard
rulemakings are interdependent. A coverage determination defines the
product/equipment scope for which DOE can establish test procedures and
energy conservation standards. It also signals that inclusion of the
consumer product or commercial/industrial equipment is necessary to
carry out the purposes of EPCA, i.e., to conserve energy and/or water.
In order to make this determination, DOE needs to consider whether a
test procedure and energy conservation standards can be established for
the consumer product or commercial/industrial equipment. If DOE cannot
develop a test procedure that measures energy use during a
representative average use cycle and is not unduly burdensome to
conduct (42 U.S.C. 6293(b)(3); 42 U.S.C. 6314(a)(2)) or prescribe
energy conservation standards that result in significant energy savings
(42 U.S.C. 6295(o); 42 U.S.C. 6316(a)), then making a coverage
determination is not necessary as it will not result in the
conservation of energy. Thus, it is important that DOE be able to
initiate test procedure and energy conservation standard rulemakings
while the Department conducts a coverage determination rulemaking.
Accordingly, DOE proposes to eliminate the requirement that coverage
determination rulemakings must be finalized prior to initiation of a
test procedure or energy conservation standard rulemaking. DOE requests
comments, information, and data on whether its proposed approach is
appropriate or on any suggested alternatives.
As for the requirement that a coverage determination be finalized
180 days prior to publication of a test procedure NOPR, DOE notes that
there are significant differences between the benefits of finalizing a
coverage determination prior to publishing a test procedure NOPR and
the benefits of finalizing a test procedure prior to publishing an
energy conservation standards NOPR. As discussed in the April 2021
NOPR, a delay between publication of a test procedure final rule and an
energy conservation standards NOPR may be beneficial in some cases as
it could allow stakeholders to gain greater familiarity with complex
test procedure amendments before providing comment on a proposal to
amend standards. 86 FR 18901, 18908. But DOE does not see a
corresponding potential benefit for delaying publication of a test
procedure NOPR after a coverage determination, which establishes the
scope of coverage, i.e., a definition, for the newly covered product or
equipment, is finalized. Accordingly, DOE proposes to eliminate the
requirement that coverage determination rulemakings must be finalized
180 days prior to publication of a test procedure NOPR. DOE requests
comments, information, and data on whether its proposed approach is
appropriate or on any suggested alternatives. DOE notes that it will
continue to follow the requirements at 42 U.S.C. 6312(b) for coverage
determinations for commercial/industrial equipment and at 42 U.S.C.
6292(b) for consumer products.
B. Process for Developing Energy Conservation Standards
As part of the February 2020 Final Rule, DOE made a number of
changes to section 6, Process for Developing Energy Conservation
Standards, of the Process Rule, at least one of which has been
revisited in the April 2021 NOPR. Most significantly, the February 2020
Final Rule amended the Process Rule to include a two-part test for
determining whether EPCA's significant energy savings threshold has
been met (see section 6(b) of the 2020 Process Rule amendments). 85 FR
8626, 8655-8676, 8705. However, for the reasons explained in the April
2021 NOPR, DOE has proposed to revise the Process Rule to eliminate the
significant energy savings threshold test and to return to assessment
of energy savings on a case-by-case basis. 86 FR 18901, 18905.
Although the aforementioned provision represents the primary change
to the Process Rule regarding the development of energy conservation
standards, DOE also adopted a number of other standards-related
provisions in the February 2020 Final Rule, which are outlined in the
paragraphs that follow. The Department has decided to revisit these
provisions in this document and proposes further changes, as explained
subsequently.
First, in section 6(a) of the Process Rule, the February 2020 Final
Rule included an early assessment process for energy conservation
standards. More specifically, in section 6(a)(1) of the Process Rule,
DOE committed to publishing a notice in the Federal Register when it is
considering initiation of a rulemaking to establish or amend any energy
conservation standard, in which the agency will request submission of
comments, data, and information on whether DOE
[[Page 35673]]
should proceed with such rulemaking, including whether any new or
amended rule would be: (1) Cost-effective; (2) economically justified;
(3) technologically feasible, or (4) would result in a significant
savings of energy. Based upon available information, if DOE determines
that a new or amended standard would not satisfy the applicable
statutory criteria, it will publish a notice of proposed determination
to that effect in the Federal Register for notice and comment.
Otherwise, section 6(a)(2) of the Process Rule provides that DOE would
undertake the preliminary stages of a rulemaking to issue or amend the
energy conservation standard, proceeding with either a framework
document/preliminary analysis or an advance notice of proposed
rulemaking (``ANOPR''). The Process Rule further provides that RFIs and
notices of data availability (``NODA'') could be issued, as
appropriate, in addition to these preliminary-stage documents. Finally,
in section 6(a)(3) of the Process Rule, DOE clarifies that initiation
of a standards rulemaking does not guarantee that standards will be
issued, because it could later be discovered that the applicable
statutory criteria ultimately could not be satisfied. 85 FR 8626, 8704-
8705.
Upon further consideration, DOE is proposing to modify these
provisions to allow for a more expedited rulemaking process in
appropriate cases, particularly in light of the significant number of
legal deadlines confronting the Appliance Standards Program and the
anticipated benefits to the Nation of the associated energy
conservation standards. Because interested parties are free to raise
the matter of the likelihood of satisfying or not satisfying the
applicable statutory criteria needed for adoption of a new or amended
energy conservation standard at any stage of the rulemaking, DOE has
tentatively concluded that a separate rulemaking document limited to
only that topic (i.e., the early assessment RFI) may unnecessarily
delay the overall process without appreciable benefit if used in all
cases. Consequently, DOE proposes to remove the requirement for a
separate early assessment RFI for energy conservation standards.
Instead, DOE would welcome the same type of information in the context
of an RFI, preliminary analysis, ANOPR, or some other pre-NOPR
document, while at the same time asking other relevant questions and
gathering information in the event that the Department decides to
proceed with an energy conservation standards rulemaking. DOE requests
comments, information, and data on whether its proposed approach is
appropriate or on any other suggested alternatives.
Second, in section 6(e)(1) of the Process Rule, the February 2020
Final Rule clarified that if DOE determines it appropriate to move
forward with an energy conservation standards rulemaking after
conducting an early assessment, then the Department will publish in the
Federal Register either a framework document with a subsequent
preliminary analysis or an ANOPR. That same subsection provides that if
DOE finds, based upon the early assessment, that one or more of the
required statutory criteria for setting an energy conservation standard
cannot be met, then the Department will publish a proposed
determination to that effect in the Federal Register for notice and
comment (which may lead to a final determination, as appropriate).
Section 6(e)(2) of the Process Rule provides that the length of the
public comment period for pre-NOPR rulemaking documents will vary
depending upon the circumstances of the particular rulemaking, but will
not be less than 75 calendar days, and it further provides that DOE
will determine whether a public hearing is appropriate for such
documents. 85 FR 8626, 8705.
After further consideration, DOE proposes to modify and clarify
these provisions as follows. As noted previously, DOE is proposing to
eliminate the requirement for an energy conservation standard early
assessment RFI, while maintaining the opportunity for early public
input through other rulemaking documents as to whether new or amended
energy conservation standards are warranted under the applicable
statutory criteria. The Department has tentatively concluded that one
round of pre-NOPR input may be sufficient in some cases. For instance,
DOE is required to revisit final determinations that energy
conservation standards do not need to be amended within three years.
(42 U.S.C. 6295(m)(3)(B)) In such cases, DOE may only need to issue an
RFI or NODA to update its rulemaking analysis in preparation for
proposing amended standards or a determination that standards do not
need to be amended. Another example for which a single round of pre-
NOPR input may be sufficient would be if a product has been subject to
multiple rounds of rulemaking, relies on mature technologies, and for
which the market is well understood. As such, DOE proposes to publish
one or more documents in the Federal Register during the pre-NOPR stage
of a rulemaking to gather information on key issues. Such document(s)
could take several forms depending upon the specific proceeding,
including a framework document, RFI, NODA, preliminary analysis, or
ANOPR.
Additionally, DOE proposes to remove the 75-day comment period
requirement for pre-NOPR energy conservation standards documents, as it
is not compelled by EPCA or other applicable law. Instead, for these
pre-NOPR documents for which there is no statutorily required comment
period, DOE would provide an appropriate comment period,\9\ determined
on a case-by-case basis, which is commensurate with the nature and
complexity of the energy conservation standard at issue, and will
consider requests from the public for extension of the comment period
to allow additional opportunities for public input. Particularly given
the many legal deadlines the Department faces for various appliance
rulemakings, DOE reasons that these proposed changes would promote
efficiency by eliminating redundant requests for the same information
and otherwise streamlining the rulemaking process. It is DOE's belief
that these changes would improve the efficiency of the Appliance
Standards Program without sacrificing the quality of DOE's analyses or
the opportunity for public input. Thus, for the reasons stated, DOE
proposes to revise section 6(e) of the Process Rule to reflect these
changes. DOE requests comments, information, and data on whether its
proposed approach is appropriate or on any other suggested
alternatives. DOE also seeks comment on whether these changes would
affect the quality of DOE's analyses or opportunities for public
comment.
---------------------------------------------------------------------------
\9\ See, for example, Executive Order 12866(6)(a)(1): ``Each
agency shall (consistent with its own rules, regulations, or
procedures) provide the public with meaningful participation in the
regulatory process. In particular, before issuing a notice of
proposed rulemaking, each agency should, where appropriate, seek the
involvement of those who are intended to benefit from and those
expected to be burdened by any regulation (including, specifically,
State, local, and tribal officials). In addition, each agency should
afford the public a meaningful opportunity to comment on any
proposed regulation, which in most cases should include a comment
period of not less than 60 days.''
---------------------------------------------------------------------------
In section 6(g)(2) of the Process Rule, the February 2020 Final
Rule stated that there would be a public comment period of at least 75
days for an energy conservation standards NOPR, with at least one
public hearing or workshop. 85 FR 8626, 8706.
After further consideration, DOE proposes to modify the provision
at section 6(g)(2) as follows. DOE proposes to remove the 75-day
comment period
[[Page 35674]]
requirement for energy conservation standards NOPRs, replacing it with
a 60-day comment period as required by EPCA. (42 U.S.C. 6295(p)(2); 42
U.S.C. 6316(a)) Although the Department believes that 60 days offers an
adequate amount of time for comment in most cases, DOE may extend the
comment period, as appropriate and on a case-by-case basis,
commensurate with the nature and complexity of the energy conservation
standard at issue. While the 2020 Process Rule has not been in effect
for long enough to cause these missed deadlines, for the reasons
discussed throughout, DOE has tentatively concluded that this proposed
change would promote the efficiency of the Appliance Standards Program
by streamlining the rulemaking process. DOE requests comments,
information, and data on whether its proposed approach is appropriate
or on any other suggested alternatives.
Finally, section 6(f)(4) of the current Process Rule discusses
factors to be considered in selecting a proposed standard. These
provisions were not modified in the February 2020 Final Rule. DOE
proposes to make minor updates to these provisions (now in proposed
section 6(a)(5)(iv)) to reflect current Departmental practice, which
has evolved in the decades since development of the 1996 Process Rule.
The descriptions of the analyses currently in sections 13-17 present
the procedures, interpretations, and policies as set forth in the 1996
Process Rule. In the years following that final rule, DOE's analyses
have evolved and been refined. DOE also notes that stakeholders are
afforded the opportunity to comment on the specific application of
these analyses as part of the individual product and equipment
rulemakings. The revisions proposed in the following sections reflect
the current state of DOE's analytical methodologies. Specifically, DOE
proposes and seeks public comment on the following proposed revisions:
<bullet> Impacts on manufacturers: Remove specification of
``private'' in relation to manufacturer impacts, change assessment of
impacts on plant closures to impacts on employment, and clarify that
changes to capital investment may not be negative.
<bullet> Private impacts on consumers: Clarify that DOE typically
uses regional energy prices rather than national prices and remove
reference of sensitivity analyses from this section as they correctly
apply to the national impacts section.
<bullet> Impacts on utilities: Revise to specify that this analysis
considers utility generation and capacity rather than costs and
revenues.
<bullet> Impacts on the environment: Remove reference to impacts on
pollution control costs, which DOE does not consider.
Additional detail regarding these proposed changes is provided in
section III.E of this NOPR.
C. Process for Developing Test Procedures
As part of the February 2020 Final Rule, DOE made a number of
changes to section 8, Test Procedures, of the Process Rule, some of
which have been revisited in the April 2021 NOPR. First, the February
2020 Final Rule amended the Process Rule's title to reflect DOE's long
practice of including test procedure rulemakings (as well as certain
commercial/industrial equipment) within its scope, as the 1996 Process
Rule only explicitly referred to energy conservation standards
rulemakings for consumer products. 85 FR 8626, 8703. Although DOE has
proposed in its April 2021 NOPR to once again make the Process Rule
nonbinding guidance for the reasons explained in that document, DOE has
maintained the applicability of the Process Rule to covered consumer
products and certain commercial/industrial equipment, as well as to
energy conservation standards and test procedures. 86 FR 18901, 18904-
18905, 18915. The February 2020 Final Rule also required DOE to
finalize a test procedure 180 days prior to publication of a NOPR to
prescribe new or amended energy conservation standards, and it set a
presumption that the Department would adopt applicable industry
consensus test procedures without modification, unless such industry
test procedures do not meet the requirements of EPCA. 85 FR 8626, 8676-
8682, 8707-8708. However, in the April 2021 NOPR, DOE proposed to
revise the Process Rule to eliminate the mandatory 180-day spacing
requirement, and the Department also proposed to clarify that DOE will
only adopt industry consensus test procedures if they meet the
requirements of EPCA and that DOE may also adopt industry test
procedure standards with modifications, or draft its own procedures as
necessary to ensure compatibility with the relevant statutory
requirements, as well as DOE's compliance, certification, and
enforcement requirements. 86 FR 18901, 18906-18908, 18918-18919.
Although the aforementioned provisions represent the primary
changes to the Process Rule test procedure provisions, DOE also adopted
a small number of other test procedure-related provisions in the
February 2020 Final Rule, which are outlined in the paragraphs that
follow. The Department has decided to revisit these provisions in this
document and proposes further changes, as explained subsequently.
First, in section 8(a) of the Process Rule, the February 2020 Final
Rule included an early assessment process for test procedures similar
to that adopted for energy conservation standards. Consequently, DOE
committed to publishing a notice in the Federal Register when it is
considering initiation of a rulemaking to amend a test procedure, in
which the agency will request submission of comments, data, and
information on whether an amended test procedure rule would: (1) More
accurately measure energy efficiency, energy use, water use (as
specified in EPCA), or estimated annual operating cost of a covered
product during a representative average use cycle or period of use
without being unduly burdensome to conduct; or (2) reduce testing
burden. Based upon available information, if DOE determines that an
amended test procedure is not justified at that time, it will publish a
notice of proposed determination to that effect in the Federal Register
for notice and comment. Otherwise, DOE would undertake the preliminary
stages of a rulemaking to amend the test procedure. 85 FR 8626, 8707-
8708.
Upon further consideration, DOE is proposing to modify this
provision to allow for a more expedited rulemaking process in
appropriate cases, particularly in light of the significant number of
legal deadlines confronting the Appliance Standards Program and the
anticipated benefits to the Nation of the associated energy
conservation standards. Because interested parties are free to raise
the matter of the need for an amended test procedure at any preliminary
stage of the rulemaking, DOE has tentatively concluded that a separate
rulemaking document limited to only that topic (i.e., the early
assessment RFI) unnecessarily delays the overall process without
appreciable benefit. Consequently, DOE proposes to remove the
requirement for a separate early assessment RFI for test procedures.
Instead, DOE would welcome the same type of information in the context
of an RFI, preliminary analysis, ANOPR, or some other pre-NOPR
document, while at the same time asking relevant questions and
gathering information about other test procedure issues, such as the
applicability of any industry test procedure, in the event that the
Department decides to proceed with a test procedure rulemaking.
[[Page 35675]]
Additionally, for these pre-NOPR documents for which there is no
statutorily required comment period, DOE proposes to clarify that the
Department would provide an appropriate comment period for pre-NOPR
documents, determined on a case-by-case basis, which is commensurate
with the nature and complexity of the test procedure rulemaking at
issue. DOE also proposes to clarify that it will provide a minimum 60-
day public comment period with at least one public hearing or workshop
for test procedure NOPR documents. DOE has historically provided a 75-
day comment period for test procedure NOPRs, consistent with the
comment period requirement for technical regulations in the North
American Free Trade Agreement, U.S.-Canada-Mexico (``NAFTA''), Dec. 17,
1992, 32 I.L.M. 289 (1993); the North American Free Trade Agreement
Implementation Act, Public Law 103-182, 107 Stat. 2057 (1993) (codified
as amended at 10 U.S.C.A. 2576) (1993) (``NAFTA Implementation Act'');
and Executive Order 12889, ``Implementation of the North American Free
Trade Agreement,'' 58 FR 69681 (Dec. 30, 1993). However, Congress
repealed the NAFTA Implementation Act and has replaced NAFTA with the
Agreement between the United States of America, the United Mexican
States, and the United Canadian States (``USMCA''), Nov. 30, 2018, 134
Stat. 11, thereby rendering E.O. 12889 inoperable. Consequently, since
the USMCA is consistent with EPCA's public comment period requirements
and normally requires a minimum comment period of 60 days for technical
regulations, DOE now proposes to provide a minimum 60-day public
comment period for test procedure NOPRs. DOE requests comments,
information, and data on whether its proposed approach is appropriate
or on any other suggested alternatives.
Second, in section 8(b) of the Process Rule, the February 2020
Final Rule contemplated further opportunities for early public input if
the Department determines to move forward with the test procedure
rulemaking after considering comments on the early assessment RFI.
Also, in that subsection, the February 2020 Final Rule stated that DOE
will identify any necessary modifications to established test procedure
prior to initiating the standards development process. 85 FR 8626,
8708. After further consideration, DOE proposes to modify and clarify
these provisions as follows. As noted previously, DOE is proposing to
eliminate the requirement for a test procedure early assessment RFI,
while maintaining the opportunity for early public input through other
rulemaking documents (potentially including RFIs) as to whether test
procedure amendments are warranted under the applicable statutory
criteria. The Department has tentatively concluded that one round of
pre-NOPR input may be sufficient in some cases. Furthermore, DOE would
clarify that its intention in section 8(b) was that Department will
identify all test procedure modifications prior to issuing a proposed
standard for that appliance, not to preclude the agency from preparing
other pre-rulemaking standards documents, such as RFIs, NODAs, and
preliminary analyses. DOE believes that such preliminary standards-
related work and data gathering can commence in concert with the test
procedure proceeding, as long as any anticipated test procedure changes
are identified and evaluated in time for them to be factored into the
energy conservation standards proposal. It is DOE's belief that these
changes would improve the efficiency of the Appliance Standards Program
without sacrificing the quality of DOE's analyses or the opportunity
for public input. DOE requests comments, information, and data on
whether its proposed approach is appropriate or on any other suggested
alternatives. In addition, DOE seeks comment on whether these changes
would affect the quality of DOE's analyses or opportunities for public
comment.
D. ASHRAE Equipment
In EPCA, Congress established a separate and unique regulatory
scheme pertaining to DOE rulemaking of certain covered equipment
addressed by ASHRAE Standard 90.1, Energy Standard for Buildings Except
Low-Rise Residential Buildings, including specific requirements for
both energy conservation standards and test procedures. See 42 U.S.C.
6313(a)(6) and 42 U.S.C. 6314(a)(4), respectively. In the February 2020
Final Rule, DOE added a section to the Process Rule specifically
addressing ASHRAE equipment for the first time.\10\ 85 FR 8626, 8708.
---------------------------------------------------------------------------
\10\ The 1996 Process Rule final rule did not address ASHRAE
equipment specifically. 61 FR 36974 (July 15, 1996).
---------------------------------------------------------------------------
While DOE sees value in setting forth the statutory requirements
and the Department's regulatory process for covered ASHRAE equipment, a
subsequent review suggests that DOE's initial efforts to explain the
applicable ASHRAE requirements could be improved, both in terms of
better delineating the process for energy conservation standards/test
procedures and removing constraints that are neither compelled by the
statute nor consistent with DOE's historic practice, and would impede
DOE's ability to achieve EPCA's energy conservation purposes.
Consequently, DOE proposes to reorganize and revise the ASHRAE
section of the Process Rule to focus on the requirements in EPCA, to
increase clarity, and to be consistent with longstanding DOE practices.
As part of this effort, DOE is proposing to remove extraneous language
relating to DOE's interpretations of the statute's ASHRAE provisions,
because the Department has found matters pertaining to scope,
triggering, and applicable statutory criteria to typically involve
nuances most appropriately addressed in individual ASHRAE rulemaking
actions. One such example would be an update to the relevant ASHRAE
standard that specifies standard levels for a type of covered equipment
that previously was not subject to standards, as was the case with
computer room air conditioners. See 77 FR 28928 (May 16, 2012). In such
an instance, the application of EPCA's trigger provision is not the
typical scenario in which existing standard levels for covered
equipment are updated. Such matters may not lend themselves to a
standardized approach suitable for inclusion in the Process Rule, but
instead, are better addressed on a case-by-case basis in the context of
the specific ASHRAE rulemaking in question. In light of the above,
DOE's proposed changes are discussed in the paragraphs that follow.
First, DOE proposes to include separate sections delineating the
EPCA requirements under two scenarios: (1) ASHRAE action regarding
standards and test procedures (i.e., ``ASHRAE trigger'' under 42 U.S.C.
6313(a)(6)(A) and 42 U.S.C. 6314(a)(4)(A)-(B), respectively) and (2)
DOE's obligation to periodically review energy conservation standards
and test procedures for ASHRAE equipment (i.e., 6-year-lookback or 7-
year-lookback under 42 U.S.C. 6313(a)(6)(C) and 42 U.S.C. 6314(a)(1),
respectively). It is expected that this refinement would provide
additional clarity to stakeholders by more clearly articulating the
statutory scheme regarding standards and test procedure rulemakings for
ASHRAE equipment.
Within the ASHRAE trigger section, DOE proposes to further separate
out the statutory requirements for energy conservation standards and
test procedures. In the current version of the
[[Page 35676]]
Process Rule, EPCA's timelines for energy conservation standards were
erroneously applied to test procedures as well. DOE wishes to make
clear the applicable statutory timelines applicable to energy
conservation standard and test procedure rulemakings in the Process
Rule. DOE also proposes to clarify what type of action on the part of
ASHRAE would trigger a DOE review for amended energy conservation
standards and test procedures. With respect to amended energy
conservation standards, DOE only considers ASHRAE to have acted in a
manner triggering DOE review when an updated version of ASHRAE Standard
90.1 publishes (i.e., not at the time that an addendum to ASHRAE
Standard 90.1 is released or approved), and the updated version
includes an increase in stringency of standard levels or a new design
requirement relative to the current Federal standards. With respect to
test procedures, DOE only considers ASHRAE to have acted in a manner
triggering DOE review when an updated version of ASHRAE Standard 90.1
publishes (i.e., not at the time that an addendum to ASHRAE Standard
90.1 is released or approved), and that updated version adopts a new or
amended test procedure. This approach is consistent with the ASHRAE-
specific provisions in EPCA and generally consistent with past DOE
practice. DOE notes in the past that it has treated an update to the
industry test procedure standard referenced by ASHRAE Standard 90.1 as
a trigger. See e.g., 77 FR 2356, 2358 (Jan. 17, 2012). DOE proposes to
only consider an update to ASHRAE Standard 90.1 that modifies the
referenced industry test procedure to be a trigger under the statute.
This approach is consistent with EPCA and provides certainty to the
public regarding when DOE is required to consider updating test
procedures for ASHRAE equipment. Finally, DOE notes that ASHRAE
reviewing and reaffirming (i.e., not amending) a standard or test
procedure does not trigger a DOE review or affect the timing of DOE's
separate obligation under EPCA to periodically review standards and
test procedures for each class of covered equipment.
Under the ASHRAE trigger for test procedures (42 U.S.C.
6314(a)(4)), when ASHRAE Standard 90.1 is amended, the statute requires
DOE to amend the Federal test procedure to be consistent with the
updated version of Standard 90.1, unless the Department determines, by
rule, published in the Federal Register and supported by clear and
convincing evidence, that the amended industry test standard would not
be representative of the equipment's energy efficiency, energy use, or
estimated operating cost during a representative average use cycle and
not be unduly burdensome to conduct. In such cases, DOE may then
develop its own test procedure which does meet these statutory
requirements related to representativeness and burden, even if the test
procedure is not consistent with the amended industry test standard.
Further, DOE notes that the statutory language ``consistent with''
itself provides some flexibility in adopting the amended industry test
procedure. As EPCA does not require DOE to adopt a test procedure
identical to applicable industry test standard, DOE may make
modifications that are consistent with the applicable industry test
standard.
In addition, DOE proposes to clarify that it is not required to
adopt or align with sections of the industry test standard that are not
necessary for the method of test for metrics included in the DOE test
procedure (e.g., sections of the industry test procedure regarding
selection of models for testing under an industry certification
program, verification of represented values and the associated
tolerances, and operational requirements need not be referenced or
aligned with by DOE). These proposals are consistent with the
Department's longstanding historic practice.
DOE proposes to remove the statement that DOE will adopt the
revised ASHRAE levels or the industry test procedure, except in very
limited circumstances. The circumstances under which DOE will adopt a
more-stringent standard than the ASHRAE standard or a different test
procedure are laid out in the statute. For example, DOE will issue a
more-stringent standard than the ASHRAE standard if DOE determines,
supported by clear and convincing evidence, that the more-stringent
standard would result in significant additional conservation of energy
and is technologically feasible and economically justified. (42 U.S.C.
6313(a)(6)(A)(ii)(II)) ``Very limited circumstances'' is an ambiguous
description for a process that is delineated in EPCA. As a result, DOE
proposes to remove this description of the circumstances under which
DOE will not adopt the amended ASHRAE standard or industry test
procedure.
In addition, DOE proposes to remove the discussion of what
constitutes clear and convincing evidence. As DOE previously noted in
the February 2020 Final Rule, the clear and convincing evidence
standard has a specific meaning that the courts have routinely
addressed through case law. See 85 FR 8626, 8642 (discussing in detail
application of the ``clear and convincing'' evidentiary standard by
courts and legal commentators). DOE does not believe the elaboration
contained in the current paragraph adds value to the EPCA language
already referenced in this section or to the established case law
pertaining to the standard of review for clear and convincing evidence.
DOE also proposes to remove the statement that DOE believes that
ASHRAE not acting to amend Standard 90.1 is tantamount to a decision
that the existing standard remain in place. This statement does not
have any effect on DOE's rulemaking obligations under the ASHRAE
provisions in EPCA. As discussed previously, DOE initiates an ASHRAE
rulemaking because: (1) Standard 90.1 is amended to include more-
stringent standards or a new design requirement; or (2) EPCA requires
DOE to evaluate each class of covered equipment every 6 years. Neither
of these situations would be affected by a decision by ASHRAE to
reaffirm an existing standard.
Finally, DOE also proposes to make two clarifications regarding its
ASHRAE review process, which are consistent with longstanding DOE
practice. First, in an ASHRAE trigger analysis, DOE will assess energy
savings from amended ASHRAE Standard 90.1 levels as compared to the
current Federal standard (or the market baseline in cases where ASHRAE
adds new equipment classes or categories not previously subject to
Federal standards), and will also assess energy savings from more-
stringent standards as compared to the ASHRAE Standard 90.1 levels. DOE
notes that the analysis period differs for these assessments, as EPCA
specifies different compliance dates for adopting levels in ASHRAE as
opposed to adopting more-stringent levels. And, second, DOE notes that
under an ASHRAE trigger, it may review all metrics for the equipment
category, even though ASHRAE only amended DOE's regulated metric(s),
and the Department may also consider changing regulated metrics (while
assessing equivalent stringency between metrics). DOE may also consider
changing metrics during a 6-year-lookback or 7-year-lookback review.
DOE believes this is consistent with EPCA's requirement that test
procedures (and metrics) be representative of an average use cycle.
DOE requests comments, information, and data on whether its
proposed approaches to ASHRAE standards and test procedure rulemakings
are appropriate or on any other suggested alternatives.
[[Page 35677]]
E. Analytical Methodology
In the February 2020 Process Rule, DOE stated that it would
consider changes to sections of the Process Rule involving its
analytical methodologies in a subsequent proceeding after completion of
a peer review. 85 FR 8686-8687. As such, these sections remained
largely unchanged from the 1996 Process Rule. Subsequently, DOE engaged
with the National Academy of Sciences (``NAS'') to review DOE's
analytical methodologies to ascertain whether modifications are needed
to improve the Department's analyses. That review process is still
ongoing. Upon further reconsideration, DOE believes that it is
important to revise the analytical sections in the Process Rule to
better reflect Departmental practice. The descriptions of the analyses
currently in sections 13-17 present the procedures, interpretations,
and policies as set forth in the 1996 Process Rule. In the years
following that final rule, DOE's analyses have evolved and been
refined. The revisions proposed in the following sections reflect the
current state of DOE's analytical methodologies. If DOE makes any
revisions to its analytical methods based on the NAS peer review, the
Department will propose any necessary corresponding revisions to the
Process Rule in a subsequent proceeding.
1. New Section 12 Principles for the Conduct of the Engineering
Analysis
DOE proposes to update the description of the analysis to more
comprehensively describe the various approaches DOE takes in developing
cost-efficiency relationships. Specifically, DOE proposes to reorganize
the discussion to clearly describe the two key aspects of the
engineering analysis: The efficiency analysis (i.e., identifying the
efficiency levels for analysis) and the cost analysis (i.e., estimating
the costs at each analyzed efficiency level).
In particular, DOE typically uses one of two approaches to develop
energy efficiency levels for the engineering analysis: (1) Relying on
observed efficiency levels in the market (i.e., the efficiency-level
approach), or (2) determining the incremental efficiency improvements
associated with incorporating specific design options to a baseline
model (i.e., the design-option approach).
DOE typically uses one or a combination of approaches to conduct
the cost analysis, including (1) physical teardowns (i.e., physically
dismantling a commercially available product/equipment model,
component-by-component, to develop a detailed bill of materials for the
model); (2) catalog teardowns (i.e., identifying each component using
parts diagrams available from manufacturer websites or appliance repair
websites, in lieu of physically deconstructing the product/equipment,
to develop the bill of materials for the product/equipment); and/or (3)
price surveys (i.e., deriving costs using publicly available pricing
data published on major online retailer websites and/or by soliciting
prices from distributors and other commercial channels). The choice of
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the subject
product/equipment, and the availability and timeliness of purchasing
the product/equipment on the market.
2. New Section 13 Principles for the Analysis of Impacts on
Manufacturers
In the preamble to the July 1996 Process Rule, the Department of
Energy committed to a detailed review of the existing manufacturer
impact analysis methodologies. 61 FR 36974, 36979. During a series of
public consultations in 1997, the Department presented a draft work
plan for the development of new methods for assessing manufacturer
impacts and invited comments and suggestions from interested parties.
See 62 FR 8189 (Feb. 24, 1997). The Department implemented its revised
Manufacturer Impact Analysis methodologies for final rules issued
subsequently. DOE proposes to update the Process Rule to align with the
manufacturer impact analysis methodologies that are the result of the
1997 process and subsequent stakeholder input. DOE proposes to clarify
the process used to evaluate manufacturers impacts and expands the
guidance on the methodologies used to solicit stakeholder input. The
updates include:
<bullet> Acknowledgement of the manufacturer interview process. DOE
adds language to reflect a critical tool used as part of the current
process, wherein manufacturer specific data and information are used to
develop and validate key inputs for the manufacturer impact analysis.
<bullet> Added detail on use of the Government Regulatory Impact
Model (GRIM). The 1996 and 2020 Process Rules make mention of the GRIM
without explanation of the model. DOE adds language on the structure,
underlying principles, and outputs of the model.
<bullet> Differentiation between types of cost impacts. To better
reflect the current process, DOE expands discussion about the types of
manufacturer cost impacts considered in the analysis.
<bullet> Clarification on the treatment of manufacturer subgroups.
To be consistent with the current process, DOE adds criteria on the
evaluation of subgroups of manufacturers that may be disproportionately
impacted by standards or that may not be accurately represented by the
average cost assumptions.
<bullet> Consideration of competitive impacts, as required by EPCA.
To be consistent with the current process and with EPCA, DOE adds
criteria to consider any lessening of competition that is likely to
result from imposition of standards and clarifies how the Department
will coordinate with the Department of Justice.
<bullet> Inclusion of stakeholder concerns related to manufacturing
capacity and direct employment impacts. To be consistent with the
current process, DOE highlights criteria related to manufacturing
capacity and direct employment impacts that the Department considers in
its assessment of impacts on manufacturers.
3. New Section 14 Principles for the Analysis of Impacts on Consumers
DOE proposes minor changes to the discussion of analytical
principles related to consumer impacts. These changes reflect the
analytical methodologies that are the result of several iterations of
stakeholder input and regulatory review, advances in data availability,
and advances in analytical techniques in the academic literature. In
particular, DOE proposes the following changes: (1) Clarifications
regarding the use of analytical input distributions in order to
establish representative consumer samples and evaluate the range of
potential impacts. These changes help to differentiate variation in
consumer impacts captured in the Life-Cycle Cost (LCC) analysis from
additional sensitivity or scenario analyses used for data or
assumptions subject to a higher degree of uncertainty; (2)
clarifications to differentiate the LCC analysis from the consumer
subgroup analysis, the latter of which considers impacts on subgroups
of consumers who may be disproportionately impacted by a potential
standard; (3) removal of discussion of magnitude of first cost and
length of payback period triggering additional assessments, as those
assessments are always made when relevant to a given products; and (4)
the addition of a discussion on consumer discount rates, found in
section 17 of the current Process Rule.
[[Page 35678]]
The revised discussion reflects DOE's established practice of
calculating weighted discount rates based on debt and equity holdings
for both residential and commercial/industrial consumers, for the
purposes of the LCC analysis.
4. New Section 15 Consideration of Non-Regulatory Approaches
DOE proposes to simplify the text to reflect its current practice
and to clarify the data available for use in DOE's analyses.
Specifically, the proposed revisions clarify that DOE's established
practice is to compare non-regulatory initiatives relative to
candidate/trial standard levels rather than considering their
individual impacts. In addition, the proposed revisions clarify that
DOE bases its assessment on the actual impacts of existing non-
regulatory initiatives, and does not typically speculate on potential
future non-regulatory initiatives or initiatives that have not yet been
implemented. Finally, DOE proposes to eliminate reference to assessing
appropriate compliance dates, as these are nearly always statutorily
defined.
5. New Section 16 Cross-Cutting Analytical Assumptions
DOE proposes minor updates to reflect DOE's long-standing
analytical practice. In particular, DOE proposes the following
clarifications: (1) DOE will continue to utilize a 30-year analysis
period along with a 9-year sensitivity analysis, but DOE no longer
analyzes a time length specific to each product; (2) energy-efficiency
trends will be based on the best available historical market data
(which may or may not be based on NEMS); (3) analyses will generally
adopt the reference energy price scenario of EIA's most current Annual
Energy Outlook (while demand is not typically considered); and (4) the
discount rates used in determining national costs and benefits
(formerly referred to as social discount rates) are in accordance with
the Office of Management and Budget (OMB)'s guidance to Federal
agencies on developing regulatory analyses (OMB Circular A-4, September
17, 2003, and section E., ``Identifying and Measuring Benefits and
Costs,'' therein).
6. New Section 17 Emissions Analysis
DOE also proposes a new section 17 discussing the Department's
emissions analysis that is based on text that is currently part of
section 17, Cross-Cutting Analytical Assumptions. The proposed updates
clarify that DOE will estimate emissions reductions of greenhouse gases
and pollutants likely to result from candidate/trial standard levels
following best practices at the time. These emissions reductions will
potentially include the effect on electric power sector and site
combustion emissions, as well as on ``upstream activities'' in the fuel
production chain. The proposed updates also clarify that estimation of
the monetary value of the avoided greenhouse gas emissions, as well as
those of other air pollutants, will be based on best practices at the
time, for example, by using accepted benefit-per-ton values from the
scientific literature.
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
This regulatory action is a significant regulatory action under
section 3(f)(4) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993). Accordingly, this proposed
regulatory action was subject to review under the Executive Order by
the Office of Information and Regulatory Affairs (OIRA) in the Office
of Management and Budget (OMB).
The revisions contained in this proposed regulatory action are
procedural changes designed to improve DOE's ability to meet its
rulemaking obligations and deadlines under EPCA. These proposed
revisions would not impose any regulatory costs or burdens on
stakeholders, nor would they limit public participation in DOE's
rulemaking process. Instead, these proposed revisions would allow DOE
to tailor its rulemaking processes to fit the facts and circumstances
of a particular rulemaking for a covered product or equipment.
DOE currently has energy conservation standards and test procedures
in place for more than 60 categories of covered products and equipment
and is typically working on anywhere from 50 to 100 rulemakings (for
both energy conservation standards and test procedures) at any one
time. Further, these rulemakings are all subject to statutory or other
deadlines. Typically, review cycles for energy conservation standards
and test procedures for covered products are 6 and 7 years,
respectively. (42 U.S.C. 6295(m)(1); 42 U.S.C 6293(b)(1)) Additionally,
if DOE decides not to amend an energy conservation standard for a
covered product, the subsequent review cycle is shortened to 3 years.
(42 U.S.C. 6295(m)(3)(B)) It is challenging to meet these cyclical
deadlines for more than 60 categories of covered products and
equipment. In fact, as previously discussed, DOE is currently facing
two lawsuits that allege DOE has failed to meet rulemaking deadlines
for 25 different consumer products and commercial equipment.
In order to meet these rulemaking deadlines, DOE cannot afford the
inefficiencies that come with a one-size-fits-all rulemaking approach.
For example, having to issue an early assessment RFI followed by an
ANOPR to collect early stakeholder input when a NODA or other pre-rule
document would accomplish the same purpose unnecessarily lengthens the
rulemaking process and wastes limited DOE resources. Similarly, having
to identify any necessary modifications to a test procedure prior to
initiating an energy conservation standard rulemaking makes it more
difficult for DOE to meet rulemaking deadlines, while offering little
to no benefit to stakeholders. The revisions proposed in this document
would allow DOE to eliminate these types of inefficiencies that
lengthen the rulemaking process and waste DOE resources, while not
affecting the ability of the public to participate in the rulemaking
process. Eliminating inefficiencies that lengthen the rulemaking
process allows DOE to more quickly develop energy conservation
standards that deliver the environmental benefits, including reductions
in greenhouse gas emissions, that DOE is directed to pursue under E.O.
13990. Further, the sooner new or amended energy conservation standards
eliminate less-efficient covered products and equipment from the
market, the greater the resulting energy savings and environmental
benefits.
Finally, the revisions proposed in this document would not dictate
any particular rulemaking outcome in an energy conservation standard or
test procedure rulemaking. DOE will continue to calculate the
regulatory costs and benefits of new and amended energy conservation
standards and test procedures issued under EPCA in future, individual
rulemakings.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996)
requires preparation of an initial regulatory flexibility analysis
(IRFA) for any rule that by law must be proposed for public comment and
a final regulatory flexibility analysis (FRFA) for any such rule that
an agency adopts as a final rule, unless the agency certifies that the
rule, if promulgated, will not have a significant economic impact on a
substantial number of small entities. A
[[Page 35679]]
regulatory flexibility analysis examines the impact of the rule on
small entities and considers alternative ways of reducing negative
effects. Also, as required by Executive Order 13272, ``Proper
Consideration of Small Entities in Agency Rulemaking,'' 67 FR 53461
(August 16, 2002), DOE published procedures and policies on February
19, 2003, to ensure that the potential impacts of its rules on small
entities are properly considered during the DOE rulemaking process. 68
FR 7990. DOE has made its procedures and policies available on the
Office of the General Counsel's website at: <a href="https://www.energy.gov/gc/office-general-counsel">https://www.energy.gov/gc/office-general-counsel</a>.
This proposed rule details generally applicable guidance that may
guide, but not bind, the Department's rulemaking process. The proposed
revisions are intended to improve DOE's ability to meet the obligations
and deadlines outlined in EPCA by allowing DOE to tailor its rulemaking
procedures to fit the specific facts and circumstances of a particular
covered product or equipment, while not affecting the ability of any
interested person, including small entities, to participate in DOE's
rulemaking process. Because this proposed rule imposes no regulatory
obligations on the public, including small entities, and does not
affect the ability of any interested person, including small entities,
to participate in DOE's rulemaking process, DOE certifies that this
proposed rule will not have a significant economic impact on a
substantial number of small entities, and, therefore, no initial
regulatory flexibility analysis is required. Mid-Tex Elec. Cooperative,
Inc. v. F.E.R.C., 773 F.2d 327 (D.C. Cir. 1985).
C. Review Under the Paperwork Reduction Act of 1995
DOE is not amending its existing information collections through
this proposed rule. Under existing provisions, manufacturers of covered
products/equipment must certify to DOE that their products comply with
any applicable energy conservation standards. In certifying compliance,
manufacturers must test their products according to the DOE test
procedures for such products/equipment, including any amendments
adopted for those test procedures, on the date that compliance is
required. DOE has established regulations for the certification and
recordkeeping requirements for all covered consumer products and
commercial equipment. 76 FR 12422 (March 7, 2011); 80 FR 5099 (Jan. 30,
2015). The collection-of-information requirement for certification and
recordkeeping is subject to review and approval by OMB under the
Paperwork Reduction Act (PRA). This requirement has been approved by
OMB under OMB control number 1910-1400. Public reporting burden for the
certification is estimated to average 30 hours per response, including
the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
Specifically, this proposed rule, addressing clarifications to the
Process Rule itself, does not contain any collection of information
requirement that would trigger the PRA.
D. Review Under the National Environmental Policy Act of 1969
DOE is analyzing this proposed regulation in accordance with the
National Environmental Policy Act (NEPA) and DOE's NEPA implementing
regulations (10 CFR part 1021). DOE's regulations include a categorical
exclusion for rulemakings interpreting or amending an existing rule or
regulation that does not change the environmental effect of the rule or
regulation being amended. 10 CFR part 1021, subpart D, appendix A5.
DOE's regulations include a categorical exclusion for rulemakings that
are strictly procedural. 10 CFR part 1021, subpart D, appendix A6. DOE
anticipates that this rulemaking qualifies for categorical exclusion A5
and A6 because it is amending a rule and because it is a procedural
rulemaking, it does not change the environmental effect of the rule and
otherwise meets the requirements for application of a categorical
exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review
before issuing the final rule.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 10,
1999), imposes certain requirements on Federal agencies formulating and
implementing policies or regulations that preempt State law or that
have Federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive Order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. DOE has examined this
proposed rule and has determined that it will not have a substantial
direct effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. It will
primarily affect the procedure by which DOE develops proposed rules to
revise energy conservation standards and test procedures. EPCA governs
and prescribes Federal preemption of State regulations that are the
subject of DOE's regulations adopted pursuant to the statute. In such
cases, States can petition DOE for exemption from such preemption to
the extent, and based on criteria, set forth in EPCA. (42 U.S.C.
6297(d)) Therefore, Executive Order 13132 requires no further action.
F. Review Under Executive Order 12988
Regarding the review of existing regulations and the promulgation
of new regulations, section 3(a) of Executive Order 12988, ``Civil
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal
agencies the general duty to adhere to the following requirements: (1)
Eliminate drafting errors and ambiguity; (2) write regulations to
minimize litigation; (3) provide a clear legal standard for affected
conduct rather than a general standard; and (4) promote simplification
and burden reduction. Regarding the review required by section 3(a),
section 3(b) of Executive Order 12988 specifically requires that each
Executive agency make every reasonable effort to ensure that when it
issues a regulation, the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) clearly specifies the retroactive effect, if any; (5) specifies
whether administrative proceedings are to be required before parties
may file suit in court and, if so, describes those proceedings and
requires the exhaustion of administrative remedies; (6)
[[Page 35680]]
adequately defines key terms; and (7) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in sections 3(a) and 3(b) to determine whether they are met
or it is unreasonable to meet one or more of them. DOE has completed
the required review and has determined that, to the extent permitted by
law, the proposed rule meets the relevant standards of Executive Order
12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. (Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531))
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. (62 FR 12820) (This policy is also available at <a href="https://www.energy.gov/gc/office-general-counsel">https://www.energy.gov/gc/office-general-counsel</a> under ``Guidance & Opinions''
(Rulemaking)) DOE examined the proposed rule according to UMRA and its
statement of policy and has determined that the rule contains neither
an intergovernmental mandate, nor a mandate that may result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year.
Accordingly, no further assessment or analysis is required under UMRA.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This proposed rule would not have any impact on the autonomy or
integrity of the family as an institution. Accordingly, DOE has
concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to Executive Order 12630, ``Governmental Actions and
Interference with Constitutionally Protected Property Rights,'' 53 FR
8859 (March 18, 1988), DOE has determined that this proposed rule would
not result in any takings that might require compensation under the
Fifth Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). DOE has reviewed this proposed rule under the OMB and
DOE guidelines and has concluded that it is consistent with the
applicable policies in those guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that the regulatory action in this
document, which makes clarifications to the Process Rule that guides
the Department in proposing energy conservation standards is not a
significant energy action because it would not have a significant
adverse effect on the supply, distribution, or use of energy, nor has
it been designated as a significant energy action by the Administrator
of OIRA. Therefore, it is not a significant energy action, and,
accordingly, DOE has not prepared a Statement of Energy Effects for
this proposed rule.
L. Review Consistent With OMB's Information Quality Bulletin for Peer
Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (OSTP), issued its Final Information
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have or does have a clear and
substantial impact on important public policies or private sector
decisions.'' Id. at 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report,'' dated February 2007, has been
[[Page 35681]]
disseminated and is available at the following website: <a href="http://www.energy.gov/eere/buildings/peer-review">www.energy.gov/eere/buildings/peer-review</a>. Because available data, models, and
technological understanding have changed since 2007, DOE has engaged
with the National Academy of Sciences to review DOE's analytical
methodologies to ascertain whether modifications are needed to improve
the Department's analyses. The results from that review are expected
later in 2021.
V. Public Participation
A. Participation in the Webinar
The time and date of the webinar are listed in the DATES section at
the beginning of this document. If no participants register for the
webinar, it will be cancelled. Webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants will be published on DOE's website:
<a href="https://www.energy.gov/eere/buildings/process-rule">https://www.energy.gov/eere/buildings/process-rule</a>. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has an interest in the topics addressed in this
proposed rulemaking, or who is representative of a group or class of
persons that has an interest in these issues, may request an
opportunity to make an oral presentation at the webinar. Such persons
may submit requests to speak by email to the Appliance and Equipment
Standards Program, <a href="/cdn-cgi/l/email-protection#6d2c1d1d01040c030e083e190c03090c1f091e3c18081e190402031e2d080843090208430a021b"><span class="__cf_email__" data-cfemail="501120203c39313e33350324313e34312234230125352324393f3e231035357e343f357e373f26">[email protected]</span></a>. Persons who
wish to speak should include with their request a computer file in
WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that
briefly describes the nature of their interest in this rulemaking and
the topics they wish to discuss. Such persons should also provide a
daytime telephone number where they can be reached.
Persons requesting to speak should briefly describe the nature of
their interest in this rulemaking and provide a telephone number for
contact. DOE requests persons selected to make an oral presentation to
submit an advance copy of their statements at least two weeks before
the webinar. At its discretion, DOE may permit persons who cannot
supply an advance copy of their statement to participate, if those
persons have made advance alternative arrangements with the Building
Technologies Office. As necessary, requests to give an oral
presentation should ask for such alternative arrangements.
C. Conduct of the Webinar
DOE will designate a DOE official to preside at the webinar and may
also use a professional facilitator to aid discussion. The meeting will
not be a judicial or evidentiary-type public hearing, but DOE will
conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A
court reporter will be present to record the proceedings and prepare a
transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the webinar. There shall not be discussion of proprietary information,
costs or prices, market share, or other commercial matters regulated by
U.S. anti-trust laws. After the webinar and until the end of the
comment period, interested parties may submit further comments on the
proceedings and any aspect of the rulemaking.
The webinar will be conducted in an informal, conference style. DOE
will present summaries of comments received before the webinar, allow
time for prepared general statements by participants, and encourage all
interested parties to share their views on issues affecting this
rulemaking. Each participant will be allowed to make a general
statement (within time limits determined by DOE), before the discussion
of specific topics. DOE will permit, as time permits, other
participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the
webinar will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the webinar.
A transcript of the webinar will be included in the docket, which
can be viewed as described in the Docket section at the beginning of
this NOPR. In addition, any person may buy a copy of the transcript
from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule no later than the date provided in the DATES section at
the beginning of this proposed rule. Interested parties may submit
comments using any of the methods described in the ADDRESSES section at
the beginning of this document.
Submitting comments via <a href="https://www.regulations.gov">https://www.regulations.gov</a>. The <a href="https://www.regulations.gov">https://www.regulations.gov</a> web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment or in any documents attached to your comment.
Any information that you do not want to be publicly viewable should not
be included in your comment, nor in any document attached to your
comment. Persons viewing comments will see only first and last names,
organization names, correspondence containing comments, and any
documents submitted with the comments.
Do not submit to <a href="https://www.regulations.gov">https://www.regulations.gov</a> information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (CBI)). Comments submitted through
<a href="https://www.regulations.gov">https://www.regulations.gov</a> cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for the information
submitted. For information on submitting CBI, see the Confidential
Business Information section.
DOE processes submissions made through <a href="https://www.regulations.gov">https://www.regulations.gov</a>
before posting. Normally, comments will be posted within a few days of
being submitted. However, if large volumes of comments are being
processed simultaneously, your comment may not be viewable for up to
several weeks. Please keep the comment tracking number that <a href="https://www.regulations.gov">https://www.regulations.gov</a> provides after you
[[Page 35682]]
have successfully uploaded your comment.
Submitting comments via email. Comments and documents submitted via
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Include contact information each time you submit comments, data,
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Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
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and treat it according to its determination.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
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exempt from public disclosure).
VI. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this proposed
rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Small
businesses, Test procedures.
Signing Authority
This document of the Department of Energy was signed on June 29,
2021, by Kelly Speakes-Backman, Principal Deputy Assistant Secretary
and Acting Assistant Secretary for Energy Efficiency and Renewable
Energy, pursuant to delegated authority from the Secretary of Energy.
That document with the original signature and date is maintained by
DOE. For administrative purposes only, and in compliance with
requirements of the Office of the Federal Register, the undersigned DOE
Federal Register Liaison Officer has been authorized to sign and submit
the document in electronic format for publication, as an official
document of the Department of Energy. This administrative process in no
way alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on June 30, 2021.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons stated in the preamble, DOE proposes to amend part
430 of title 10 of the Code of Federal Regulations as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Appendix A to subpart C of part 430 is revised to read as follows:
Appendix A to Subpart C of Part 430--Procedures, Interpretations, and
Policies for Consideration of New or Revised Energy Conservation
Standards and Test Procedures for Consumer Products and Certain
Commercial/Industrial Equipment
1. Objectives
2. Scope
3. Application of the Process Rule
4. Setting Priorities for Rulemaking Activity
5. Coverage Determination Rulemakings
6. Process for Developing Energy Conservation Standards
7. Policies on Selection of Standards
8. Test Procedures
9. ASHRAE Equipment
10. Direct Final Rules
11. Principles for Distinguishing Between Effective and Compliance
Dates
12. Principles for the Conduct of the Engineering Analysis
13. Principles for the Analysis of Impacts on Manufacturers
14. Principles for the Analysis of Impacts on Consumers
15. Consideration of Non-Regulatory Approaches
16. Cross-Cutting Analytical Assumptions
17. Emissions Analysis
1. Objectives
This appendix establishes procedures, interpretations, and
policies to guide the Department of Energy (``DOE'' or the
``Department'') in the consideration and promulgation of new or
revised appliance energy conservation standards and test procedures
under the Energy Policy and Conservation Act (EPCA). This appendix
applies to both covered consumer products and covered commercial/
industrial equipment. The Department's objectives in establishing
these procedures include:
(a) Provide for early input from stakeholders. The Department
seeks to provide opportunities for public input early in the
rulemaking process so that the initiation and direction of
rulemakings is informed by comment from interested parties. DOE will
be able to seek early input from interested parties in determining
whether establishing new or amending existing energy conservation
standards will result in significant savings of energy and is
economically justified and technologically feasible. In the context
of test procedure rulemakings, DOE will be able to seek early input
from interested parties in determining whether--
(1) Establishing a new or amending an existing test procedure
will better measure the energy efficiency, energy use, water use (as
specified in EPCA), or estimated annual operating cost of a covered
product/equipment during a representative average use cycle or
period of use (for consumer products); and
(2) Will not be unduly burdensome to conduct.
(b) Increase predictability of the rulemaking timetable. The
Department seeks to make informed, strategic decisions about how to
deploy its resources on the range of possible standards and test
procedure development activities, and to announce these
prioritization decisions so that all interested parties have a
common expectation about the timing of different rulemaking
activities. Further, DOE will offer the opportunity to provide input
on the prioritization of rulemakings through a request for comment
as DOE begins preparation of its Regulatory Agenda each spring.
(c) Eliminate problematic design options early in the process.
The Department seeks to eliminate from consideration, early in the
process, any design options that present unacceptable problems with
respect to manufacturability, consumer utility, or safety, so that
the detailed analysis can focus
[[Page 35683]]
only on viable design options. DOE will be able to eliminate from
consideration design options if it concludes that manufacture,
installation or service of the design will be impractical, or that
the design option will have a material adverse impact on the utility
of the product, or if the design option will have a material adverse
impact on safety or health. DOE will also be able to eliminate from
consideration proprietary design options that represent a unique
pathway to achieving a given efficiency level. This screening will
be done at the outset of a rulemaking.
(d) Fully consider non-regulatory approaches. The Department
seeks to understand the effects of market forces and voluntary
programs on encouraging the purchase of energy efficient products so
that the incremental impacts of a new or revised standard can be
accurately assessed and the Department can make informed decisions
about where standards and voluntary programs can be used most
effectively. DOE will continue to be able to support voluntary
efforts by manufacturers, retailers, utilities, and others to
increase product/equipment efficiency.
(e) Conduct thorough analysis of impacts. In addition to
understanding the aggregate social and private costs and benefits of
standards, the Department seeks to understand the distribution of
those costs and benefits among consumers, manufacturers, and others,
as well as the uncertainty associated with these analyses of costs
and benefits, so that any adverse impacts on subgroups and
uncertainty concerning any adverse impacts can be fully considered
in selecting a standard. DOE will be able to consider the
variability of impacts on significant groups of manufacturers and
consumers in addition to aggregate social and private costs and
benefits, report the range of uncertainty associated with these
impacts, and take into account cumulative impacts of regulation on
manufacturers. The Department will also be able to conduct
appropriate analyses to assess the impact that new or amended test
procedures will have on manufacturers and consumers.
(f) Use transparent and robust analytical methods. The
Department seeks to use qualitative and quantitative analytical
methods that are fully documented for the public and that produce
results that can be explained and reproduced, so that the analytical
underpinnings for policy decisions on standards are as sound and
well-accepted as possible.
(g) Support efforts to build consensus on standards. The
Department seeks to encourage development of consensus proposals for
new or revised standards because standards with such broad-based
support are likely to balance effectively the various interests
affected by such standards.
2. Scope
The procedures, interpretations, and policies described in this
appendix apply to rulemakings concerning new or revised Federal
energy conservation standards and test procedures, and related rule
documents (i.e., coverage determinations) for consumer products in
Part A and commercial and industrial equipment under Part A-1 of the
Energy Policy and Conservation Act (EPCA), as amended, except
covered ASHRAE equipment in Part A-1 are governed separately under
section 9 in this appendix.
3. Application of the Process Rule
(a) This appendix contains procedures, interpretations, and
policies that are generally applicable to the development of energy
conservation standards and test procedures. The Department may, as
necessary, deviate from this appendix to account for the specific
circumstances of a particular rulemaking.
(b) This appendix is not intended to, and does not, create any
right or benefit, substantive or procedural, enforceable at law or
in equity.
4. Setting Priorities for Rulemaking Activity
(a) In establishing its priorities for undertaking energy
conservation standards and test procedure rulemakings, DOE will
consider the following factors, consistent with applicable legal
obligations:
(1) Potential energy savings;
(2) Potential social and private, including environmental or
energy security, benefits;
(3) Applicable deadlines for rulemakings;
(4) Incremental DOE resources required to complete the
rulemaking process;
(5) Other relevant regulatory actions affecting the products/
equipment;
(6) Stakeholder recommendations;
(7) Evidence of energy efficiency gains in the market absent new
or revised standards;
(8) Status of required changes to test procedures; and
(9) Other relevant factors.
(b) DOE will offer the opportunity to provide input on
prioritization of rulemakings through a request for comment as DOE
begins preparation of its Regulatory Agenda each spring.
5. Coverage Determination Rulemakings
DOE has discretion to conduct proceedings to determine whether
additional consumer products and commercial/industrial equipment
should be covered under EPCA if certain statutory criteria are met.
(42 U.S.C. 6292(b) and 42 U.S.C. 6295(l) for consumer products; 42
U.S.C. 6312(b) for commercial/industrial equipment) This section
describes the process to be used in establishing coverage for
consumer products and commercial/industrial equipment.
(a) Pre-Notice of Proposed Rulemaking (``NOPR'') Stage. In
determining whether to consider establishing coverage for a consumer
product or commercial/industrial equipment, DOE may publish one or
more preliminary documents in the Federal Register intended to
gather information on key issues. Such document(s) will be published
in the Federal Register, with accompanying documents referenced and
posted in the appropriate docket.
(b) NOPR Stage. If DOE determines to proceed with a coverage
determination process, the Department will publish a notice of
proposed determination, providing an opportunity for public comment
of not less than 60 days, in which DOE will explain how such
products/equipment that it seeks to designate as ``covered'' meet
the statutory criteria for coverage and why such coverage is
``necessary or appropriate'' to carry out the purposes of EPCA. In
the case of commercial equipment, DOE will follow the same process,
except that the Department must demonstrate that coverage of the
equipment type is ``necessary'' to carry out the purposes of EPCA.
(c) Final Rule. DOE will publish a Final Rule in the Federal
Register that establishes the scope of coverage for the product/
equipment, responds to public comments received on the NOPR, and
explains how inclusion of the newly covered product/equipment meets
the statutory criteria for coverage and why such coverage is
necessary or appropriate to carry out the purposes of EPCA. DOE will
finalize coverage for a product/equipment prior to publication of a
proposed rule to establish a test procedure.
(d) Scope of Coverage Revisions. If, during the substantive
rulemaking proceedings to establish test procedures or energy
conservation standards after completing a coverage determination,
DOE finds it necessary and appropriate to amend the scope of
coverage, DOE will propose an amended coverage determination and
finalize coverage prior to moving forward with the test procedure or
standards rulemaking.
6. Process for Developing Energy Conservation Standards
This section describes the process to be used in developing
energy conservation standards for covered products and equipment
other than those covered equipment subject to ASHRAE/IES Standard
90.1.
(a) Pre-NOPR Stage. (1) General. In determining whether to
consider establishing or amending any energy conservation standard,
DOE will publish one or more preliminary documents in the Federal
Register intended to gather information on key issues. Such
document(s) could take several forms depending upon the specific
proceeding, including a framework document, request for information
(RFI), notice of data availability (NODA), preliminary analysis, or
advance notice of proposed rulemaking (ANOPR). Such document(s) will
be published in the Federal Register, with any accompanying
documents referenced and posted in the appropriate docket.
(2) Satisfaction of Statutory Criteria. As part of such pre-
NOPR-stage document(s), DOE will solicit submission of comments,
data, and information on whether DOE should proceed with the
rulemaking, including whether any new or amended rule would satisfy
the relevant statutory criteria to be cost-effective, economically
justified, technologically feasible, and result in a significant
savings of energy. Based on the information received in response to
such request and its own analysis, DOE will determine whether to
proceed with a rulemaking for a new or amended energy conservation
standard. If DOE determines at any point in the pre-NOPR stage that
no candidate standard level for a new or amended standard is likely
to satisfy all of the applicable statutory criteria (i.e., to be
technologically feasible and economically
[[Page 35684]]
justified and result in significant energy savings), DOE will
announce that conclusion in the Federal Register and proceed with
notice-and-comment rulemaking that proposes a determination not to
adopt new or amended standards. DOE notes that it will, consistent
with its statutory obligations, consider both cost effectiveness and
economic justification when issuing a determination not to amend a
standard. If DOE receives sufficient information suggesting it could
justify a new or amended standard or the information received is
inconclusive with regard to the statutory criteria, DOE will move
forward with the rulemaking to issue or amend an energy conservation
standard. In those instances where the available information either
suggested that a new or amended energy conservation standard might
be justified or in which the information was inconclusive on this
point, and DOE undertakes a rulemaking to establish or amend an
energy conservation standard, DOE may still ultimately determine
that such a standard is not economically justified, technologically
feasible or would not result in a significant savings of energy at a
later stage of the rulemaking.
(3) Design options. (i) General. Once the Department has
initiated a rulemaking for a specific product/equipment but before
publishing a proposed rule to establish or amend standards, DOE will
typically identify the product/equipment categories and design
options to be analyzed in detail, as well as those design options to
be eliminated from further consideration. During the pre-NOPR stage
of the rulemaking, interested parties may be consulted to provide
information on key issues, including potential design options,
through a variety of rulemaking documents.
(ii) Identification and screening of design options. During the
pre-NOPR phase of the rulemaking process, the Department will
typically develop a list of design options for consideration.
Initially, the candidate design options will encompass all those
technologies considered to be technologically feasible. Following
the development of this initial list of design options, DOE will
review each design option based on the factors described in
paragraph (a)(3)(iii) of this section and the policies stated in
section 7 of this Appendix (i.e., Policies on Selection of
Standards). The reasons for eliminating or retaining any design
option at this stage of the process will be fully documented and
published as part of the NOPR and as appropriate for a given rule,
in the pre-NOPR document(s). The technologically feasible design
options that are not eliminated in this screening analysis will be
considered further in the Engineering Analysis described in
paragraph (a)(4) of this section.
(iii) Factors for screening of design options. The factors for
screening design options include:
(A) Technological feasibility. Technologies incorporated in
commercial products (or equipment) or in working prototypes will be
considered technologically feasible.
(B) Practicability to manufacture, install and service. If mass
production of a technology under consideration for use in
commercially-available products (or equipment) and reliable
installation and servicing of the technology could be achieved on
the scale necessary to serve the relevant market at the time of the
effective date of the standard, then that technology will be
considered practicable to manufacture, install, and service.
(C) Adverse Impacts on Product Utility or Product Availability.
(D) Adverse Impacts on Health or Safety.
(E) Unique-Pathway Proprietary Technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further.
(4) Engineering analysis of design options and selection of
candidate standard levels. After design options are identified and
screened, DOE will perform the engineering analysis and the benefit/
cost analysis and select the candidate standard levels based on
these analyses. The results of the analyses will be published in a
Technical Support Document (TSD) to accompany the appropriate
rulemaking documents.
(i) Identification of engineering analytical methods and tools.
DOE will select the specific engineering analysis tools (or multiple
tools, if necessary, to address uncertainty) to be used in the
analysis of the design options identified as a result of the
screening analysis.
(ii) Engineering and life-cycle cost analysis of design options.
DOE and its contractors will perform engineering and life-cycle cost
analyses of the design options.
(iii) Review by stakeholders. Interested parties will have the
opportunity to review the results of the engineering and life-cycle
cost analyses. If appropriate, a public workshop will be conducted
to review these results. The analyses will be revised as appropriate
on the basis of this input.
(iv) New information relating to the factors used for screening
design options. If further information or analysis leads to a
determination that a design option, or a combination of design
options, has unacceptable impacts, that design option or combination
of design options will not be included in a candidate standard
level.
(v) Selection of candidate standard levels. Based on the results
of the engineering and life-cycle cost analysis of design options
and the policies stated in paragraph (a)(3)(iii) of this section,
DOE will select the candidate standard levels for further analysis.
(5) Analysis of impacts and selection of proposed standard
level. If DOE has determined preliminarily that a candidate standard
level is likely to produce the maximum improvement in energy
efficiency that is both technologically feasible and economically
justified and constitutes significant energy savings, economic
analyses of the impacts of the candidate standard levels will be
conducted. The Department will propose new or amended standards in a
subsequent NOPR based on the results of the impact analysis.
(i) Identification of issues for analysis. The Department, in
consideration of comments received, will identify issues that will
be examined in the impacts analysis.
(ii) Identification of analytical methods and tools. DOE will
select the specific economic analysis tools (or multiple tools, if
necessary, to address uncertainty) to be used in the analysis of the
candidate standard levels.
(iii) Analysis of impacts. DOE will conduct the analysis of the
impacts of candidate standard levels.
(iv) Factors to be considered in selecting a proposed standard.
The factors to be considered in selection of a proposed standard
include:
(A) Impacts on manufacturers. The analysis of manufacturer
impacts will include: Estimated impacts on cash flow; assessment of
impacts on manufacturers of specific categories of products/
equipment and small manufacturers; assessment of impacts on
manufacturers of multiple product-specific Federal regulatory
requirements, including efficiency standards for other products and
regulations of other agencies; and impacts on manufacturing
capacity, employment, and capital investment.
(B) Private impacts on consumers. The analysis of consumer
impacts will include: Estimated private energy savings impacts on
consumers based on regional average energy prices and energy usage;
assessments of the variability of impacts on subgroups of consumers
based on major regional differences in usage or energy prices and
significant variations in installation costs or performance;
consideration of changes to product utility, changes to purchase
rate and/or costs of products, and other impacts of likely concern
to all or some consumers, based to the extent practicable on direct
input from consumers; estimated life-cycle cost with sensitivity
analysis; and consideration of the increased first cost to consumers
and the time required for energy cost savings to pay back these
first costs.
(C) Impacts on competition, including industry concentration
analysis.
(D) Impacts on utilities. The analysis of utility impacts will
include estimated marginal impacts on electric and gas utility
generation and capacity.
(E) National energy, economic, and employment impacts. The
analysis of national energy, economic, and employment impacts will
include: Estimated energy savings by fuel type; estimated net
present value of benefits to all consumers; sensitivity analyses
using high and low discount rates reflecting both private
transactions and social discount rates and high and low energy price
forecasts; and estimates of the direct and indirect impacts on
employment by appliance manufacturers, relevant service industries,
energy suppliers, suppliers of complementary and substitution
products, and the economy in general.
(F) Impacts on the environment. The analysis of environmental
impacts will include estimated impacts on emissions of carbon and
relevant criteria pollutants.
(G) Impacts of non-regulatory approaches. The analysis of energy
savings and consumer impacts will incorporate an assessment of the
impacts of market forces and existing voluntary programs in
promoting product/equipment efficiency, usage, and related
characteristics in the absence of updated efficiency standards.
(H) New information relating to the factors used for screening
design options.
[[Page 35685]]
(6) Public comment and hearing. The length of the public comment
period for pre-NOPR rulemaking documents will be determined on a
case-by-case basis and may vary depending upon the circumstances of
the particular rulemaking. For pre-NOPR documents, DOE will
determine whether a public hearing is appropriate.
(7) Revisions based on comments. Based on consideration of the
comments received, any necessary changes to the engineering
analysis, life-cycle cost analysis, or the candidate standard levels
will be made.
(b) NOPR Stage. (1) Documentation of decisions on proposed
standard selection. The Department will publish a NOPR in the
Federal Register that proposes standard levels and explains the
basis for the selection of those proposed levels, and DOE will post
on its website a draft TSD documenting the analysis of impacts. The
draft TSD will also be posted in the appropriate docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. As required by 42 U.S.C. 6295(p)(1) of EPCA,
the NOPR also will describe the maximum improvement in energy
efficiency or maximum reduction in energy use that is
technologically feasible and, if the proposed standards would not
achieve these levels, the reasons for proposing different standards.
(2) Public comment and hearing. There will be not less than 60
days for public comment on the NOPR, with at least one public
hearing or workshop. (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6306)
(3) Revisions to impact analyses and selection of final
standard. Based on the public comments received, DOE will review the
proposed standard and impact analyses, and make modifications as
necessary. If major changes to the analyses are required at this
stage, DOE will publish a Supplemental Notice of Proposed Rulemaking
(SNOPR), when required. DOE may also publish a NODA or RFI, where
appropriate.
(c) Final Rule Stage. The Department will publish a Final Rule
in the Federal Register that promulgates standard levels, responds
to public comments received on the NOPR (and SNOPR if applicable),
and explains how the selection of those standards meets the
statutory requirement that any new or amended energy conservation
standard produces the maximum improvement in energy efficiency that
is both technologically feasible and economically justified and
constitutes significant energy savings, accompanied by a final TSD.
7. Policies on Selection of Standards
(a) Purpose. (1) Section 6 describes the process that will be
used to consider new or revised energy efficiency standards and
lists a number of factors and analyses that will be considered at
specified points in the process. Department policies concerning the
selection of new or revised standards, and decisions preliminary
thereto, are described in this section. These policies are intended
to elaborate on the statutory criteria provided in 42 U.S.C. 6295.
(2) The procedures described in this section are intended to
assist the Department in making the determinations required by EPCA
and do not preclude DOE's consideration of any other information
consistent with the relevant statutory criteria. The Department will
consider pertinent information in determining whether a new or
revised standard is consistent with the statutory criteria.
(b) Screening design options. These factors will be considered
as follows in determining whether a design option will receive any
further consideration:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable,
existing prototypes will not be considered further.
(2) Practicability to manufacture, install and service. If it is
determined that mass production of a technology in commercial
products and reliable installation and servicing of the technology
could not be achieved on the scale necessary to serve the relevant
market at the time of the compliance date of the standard, then that
technology will not be considered further.
(3) Impacts on product utility. If a technology is determined to
have significant adverse impact on the utility of the product/
equipment to subgroups of consumers, or result in the unavailability
of any covered product type with performance characteristics
(including reliability), features, sizes, capacities, and volumes
that are substantially the same as products generally available in
the U.S. at the time, it will not be considered further.
(4) Safety of technologies. If it is determined that a
technology will have significant adverse impacts on health or
safety, it will not be considered further.
(5) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving
a given efficiency level, it will not be considered further, due to
the potential for monopolistic concerns.
(c) Identification of candidate standard levels. Based on the
results of the engineering and cost/benefit analyses of design
options, DOE will identify the candidate standard levels for further
analysis. Candidate standard levels will be selected as follows:
(1) Costs and savings of design options. Design options that
have payback periods that exceed the median life of the product or
which result in life-cycle cost increases relative to the base case,
using typical fuel costs, usage, and private discount rates, will
not be used as the basis for candidate standard levels.
(2) Further information on factors used for screening design
options. If further information or analysis leads to a determination
that a design option, or a combination of design options, has
unacceptable impacts under the policies stated in this Appendix,
that design option or combination of design options will not be
included in a candidate standard level.
(3) Selection of candidate standard levels. Candidate standard
levels, which will be identified in the pre-NOPR documents and on
which impact analyses will be conducted, will be based on the
remaining design options.
(i) The range of candidate standard levels will typically
include:
(A) The most energy-efficient combination of design options;
(B) The combination of design options with the lowest life-cycle
cost; and
(C) A combination of design options with a payback period of not
more than three years.
(ii) Candidate standard levels that incorporate noteworthy
technologies or fill in large gaps between efficiency levels of
other candidate standard levels also may be selected.
(d) Pre-NOPR Stage. New information provided in public comments
on any pre-NOPR documents will be considered to determine whether
any changes to the candidate standard levels are needed before
proceeding to the analysis of impacts.
(e)(1) Selection of proposed standard. Based on the results of
the analysis of impacts, DOE will select a standard level to be
proposed for public comment in the NOPR. As required under 42 U.S.C.
6295(o)(2)(A), any new or revised standard must be designed to
achieve the maximum improvement in energy efficiency that is
determined to be both technologically feasible and economically
justified.
(2) Statutory policies. The fundamental policies concerning the
selection of standards include:
(i) A trial standard level will not be proposed or promulgated
if the Department determines that it is not both technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 42
U.S.C. 6295(o)(3)(B)) For a trial standard level to be economically
justified, the Secretary must determine that the benefits of the
standard exceed its burdens by, to the greatest extent practicable,
considering the factors listed in 42 U.S.C. 6295(o)(2)(B)(i). A
standard level is subject to a rebuttable presumption that it is
economically justified if the payback period is three years or less.
(42 U.S.C. 6295(o)(2)(B)(iii))
(ii) If the Department determines that interested persons have
established by a preponderance of the evidence that a standard level
is likely to result in the unavailability in the United States of
any covered product/equipment type (or class) with performance
characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the U.S. at the time of the determination,
then that standard level will not be proposed. (42 U.S.C.
6295(o)(4))
(iii) If the Department determines that a standard level would
not result in significant conservation of energy, that standard
level will not be proposed. (42 U.S.C. 6295(o)(3)(B))
(f) Selection of a final standard. New information provided in
the public comments on the NOPR and any analysis by the Department
of Justice concerning impacts on competition of the proposed
standard will be considered to determine whether issuance of a new
or amended energy conservation standard produces the maximum
improvement in energy efficiency that is both technologically
feasible and economically justified and still constitutes
significant energy savings or whether any change to the proposed
standard level is needed before proceeding to the final rule. The
same
[[Page 35686]]
policies used to select the proposed standard level, as described in
this section, will be used to guide the selection of the final
standard level or a determination that no new or amended standard is
justified.
8. Test Procedures
(a) Pre-NOPR Stage. (1) General. In determining whether to
consider establishing or amending any test procedure, DOE will
publish one or more preliminary documents in the Federal Register
(e.g., an RFI or NODA) intended to gather information on key issues.
(2) Satisfaction of Statutory Criteria. As part of such
document(s), DOE will solicit submission of comments, data, and
information on whether DOE should proceed with the rulemaking,
including whether: A new test procedure would satisfy the relevant
statutory criteria that test procedures be reasonably designed to
produce test results which measure energy efficiency, energy use,
water use (in the case of showerheads, faucets, water closets and
urinals), or estimated annual operating cost of a covered product
during a representative average use cycle or period of use, as
determined by the Secretary, and shall not be unduly burdensome to
conduct; or an amended test procedure would more fully or accurately
comply with the aforementioned statutory criteria. Based on the
information received in response to such request and its own
analysis, DOE will determine whether to proceed with a rulemaking
for a new or amended test procedure.
(3) If DOE determines that a new or amended test procedure would
not satisfy the applicable statutory criteria, DOE will engage in
notice-and-comment rulemaking to issue a determination that a new or
amended test procedure is not warranted.
(4) If DOE receives sufficient information suggesting a new or
amended test procedure may satisfy the applicable statutory criteria
or the information received is inconclusive with regard to the
statutory criteria, DOE will move forward with the rulemaking to
issue or amend a test procedure.
(5) In those instances where the available information either
suggested that a new or amended test procedure might be warranted or
in which the information was inconclusive on this point, and DOE
undertakes a rulemaking to establish or amend a test procedure, DOE
may still ultimately determine that such a test procedure does not
satisfy the applicable statutory criteria at a later stage of the
rulemaking.
(6) Public comment and hearing. The length of the public comment
period for pre-NOPR rulemaking documents will be determined on a
case-by-case basis and may vary depending upon the circumstances of
the particular rulemaking. For pre-NOPR documents, DOE will
determine whether a public hearing is appropriate.
(b) NOPR Stage. (1) Documentation of decisions on proposed test
procedure. The Department will publish a NOPR in the Federal
Register that proposes a new or amended test procedure and explains
how the test procedure satisfies the applicable statutory criteria.
(2) Public comment and hearing. There will be not less than 60
days for public comment on the NOPR, with at least one public
hearing or workshop. (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6306)
(3) Revisions to the analyses and establishment of a final test
procedure. Based on the public comments received, DOE will review
the proposed test procedure, and make modifications as necessary. As
part of this process, DOE may issue an RFI, NODA, SNOPR, or other
rulemaking document, as appropriate.
(c) Final Rule Stage. The Department will publish a Final Rule
in the Federal Register that establishes or amends a test procedure,
responds to public comments received on the NOPR (and any subsequent
rulemaking documents), and explains how the new or amended test
procedure meets the applicable statutory requirements.
(d) Adoption of Industry Test Methods. DOE will adopt industry
test procedure standards as DOE test procedures for covered products
and equipment, but only if DOE determines that such procedures would
not be unduly burdensome to conduct and would produce test results
that reflect the energy efficiency, energy use, water use (as
specified in EPCA) or estimated operating costs of that equipment
during a representative average use cycle. DOE may also adopt
industry test procedure standards with modifications or craft its
own procedures as necessary to ensure compatibility with the
relevant statutory requirements, as well as DOE's compliance,
certification, and enforcement requirements.
(e) Issuing final test procedure modification. Test procedure
rulemakings establishing methodologies used to evaluate proposed
energy conservation standards will be finalized prior to publication
of a NOPR proposing new or amended energy conservation standards.
(f) Effective Date of Test Procedures. If required only for the
evaluation and issuance of updated efficiency standards, use of the
modified test procedures typically will not be required until the
implementation date of updated standards.
9. ASHRAE Equipment
EPCA provides unique statutory requirements and a specific set
of timelines for certain enumerated types of commercial and
industrial equipment (generally, commercial water heaters,
commercial packaged boilers, commercial air-conditioning and heating
equipment, and packaged terminal air conditioners and heat pumps
(i.e., ``ASHRAE equipment'')).
(a) ASHRAE Trigger Rulemakings for Energy Conservation
Standards. Pursuant to EPCA's statutory scheme for covered ASHRAE
equipment, DOE is required to consider amending the existing Federal
energy conservation standards for ASHRAE equipment when ASHRAE
Standard 90.1 is amended with respect to standards or design
requirements applicable to such equipment.
(1) Not later than 180 days after the amendment of ASHRAE
Standard 90.1, DOE will publish in the Federal Register for public
comment an analysis of the energy savings potential of amended
energy efficiency standards for the affected equipment.
(2) Not later than 18 months after the amendment of ASHRAE
Standard 90.1, DOE must adopt amended energy conservation standards
at the new efficiency level in ASHRAE Standard 90.1 as the uniform
national standard for the affected equipment, unless DOE determines
by rule, and supported by clear and convincing evidence, that a
more-stringent standard would result in significant additional
conservation of energy and is technologically feasible and
economically justified. In such case, DOE must adopt the more-
stringent standard for the affected equipment not later than 30
months after amendment of ASHRAE Standard 90.1.
(3) Regarding amendments to ASHRAE Standard 90.1 involving
energy conservation standards, DOE considers an amendment of a
standard level to occur when an updated version of ASHRAE Standard
90.1 publishes (i.e., not at the time that an addendum to ASHRAE
Standard 90.1 is released or approved). In addition, DOE considers
an amendment of standard levels in ASHRAE Standard 90.1 to be only
those changes resulting in an increase in stringency of standard
levels relative to the current Federal standards or the adoption of
a design requirement.
(b) ASHRAE Trigger Rulemakings for Test Procedures. Pursuant to
EPCA's statutory scheme for covered ASHRAE equipment, DOE is
required to consider amending the existing Federal test procedures
for such equipment when ASHRAE Standard 90.1 is amended with respect
to test procedures applicable to such equipment.
(1) DOE shall amend the test procedure for ASHRAE equipment, as
necessary, to be consistent with the amended ASHRAE Standard 90.1,
unless DOE determines by rule, and supported by clear and convincing
evidence, that to do so would not meet the requirements in 42 U.S.C.
6314(a)(2)-(3), which generally provide that the test procedure must
produce results which reflect energy efficiency, energy use, and
estimated operating costs during a representative average use cycle
and not be unduly burdensome to conduct. If DOE makes such a
determination, DOE may establish an amended test procedure for such
equipment that meets the requirements in 42 U.S.C. 6314(a)(2)-(3).
(2) With regard to test procedures for ASHRAE equipment, EPCA
requires DOE to adopt test procedures consistent with applicable
industry test standards. DOE notes that the statutory language
``consistent with'' provides some flexibility in adopting the
amended industry test procedure. As EPCA does not require DOE to
adopt a test procedure identical to the applicable industry test
standard, DOE may make modifications that are consistent with the
applicable industry test standard. Further, DOE is not required to
adopt or align with sections of the industry test standard that are
not necessary for the method of test for metrics included in the DOE
test procedure (e.g., sections of the industry test procedure
regarding selection of models for testing under an industry
certification program, verification of represented values and the
associated tolerances, and operational
[[Page 35687]]
requirements need not be adopted or aligned with by DOE).
(c) ASHRAE Lookback Rulemakings. EPCA also requires that DOE
periodically consider amending energy conservation standards and
test procedures for ASHRAE equipment.
(1) EPCA requirements for ASHRAE equipment outside of the ASHRAE
Standard 90.1 process include:
(i) Energy Conservation Standards. Every 6 years, DOE shall
conduct an evaluation of each class of covered equipment. DOE shall
publish either a notice of determination that standards do not need
to be amended (because they would not result in significant
additional conservation of energy and/or would not be
technologically feasible and/or economically justified) or a notice
of proposed rulemaking including new proposed standards (based on
the criteria and procedures in 42 U.S.C. 6313(a)(6)(B) and supported
by clear and convincing evidence).
(A) If DOE issues a notice of proposed rulemaking, it shall
publish a final rule no more than 2 years later.
(B) If DOE determines that a standard does not need to be
amended, not later than 3 years after such a determination, DOE must
publish either a notice of determination that standards do not need
to be amended (because they would not result in significant
additional conservation of energy and/or would not be
technologically feasible and/or economically justified) or a notice
of proposed rulemaking including new proposed standards (based on
the criteria and procedures in in 42 U.S.C. 6313(a)(6)(B) and
supported by clear and convincing evidence).
(ii) Test Procedures. At least once every 7 years, DOE shall
conduct an evaluation, and if DOE determines, supported by clear and
convincing evidence, that amended test procedures would more
accurately or fully comply with the requirements in 42 U.S.C.
6314(a)(2)-(3), it shall prescribe test procedures for the
applicable equipment. DOE notes that EPCA requires test procedures
that are ``consistent with'' industry test procedures. As noted in
paragraph (b)(2) of this section, this affords DOE some flexibility
in making modifications to the DOE test procedure that are
consistent with the industry test procedure. Otherwise, DOE shall
publish a notice of determination not to amend a test procedure.
(2) DOE's 6-year-lookback and 7-year-lookback review
requirements, as detailed in this section, are regulatory
obligations specific to DOE and not satisfied by any ASHRAE action.
Specifically, ASHRAE reviewing and reaffirming (but not amending) a
standard or test procedure does not eliminate DOE's separate
requirement to review each class of covered equipment.
10. Direct Final Rules
In accordance with 42 U.S.C. 6295(p)(4), on receipt of a joint
proposal that is submitted by interested persons that are fairly
representative of relevant points of view, DOE may issue a direct
final rule (DFR) establishing energy conservation standards for a
covered product or equipment if DOE determines the recommended
standard is in accordance with 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B) as applicable. To be ``fairly representative of
relevant points of view'' the group submitting a joint statement
must, where appropriate, include larger concerns and small
businesses in the regulated industry/manufacturer community, energy
advocates, energy utilities, consumers, and States. However, it will
be necessary to evaluate the meaning of ``fairly representative'' on
a case-by-case basis, subject to the circumstances of a particular
rulemaking, to determine whether fewer or additional parties must be
part of a joint statement in order to be ``fairly representative of
relevant points of view.''
11. Principles for Distinguishing Between Effective and Compliance
Dates
(a) Dates, generally. The effective and compliance dates for
either DOE test procedures or DOE energy conservation standards are
typically not identical, and these terms should not be used
interchangeably.
(b) Effective date. The effective date is the date a rule is
legally operative after being published in the Federal Register.
(c) Compliance date. (1) For test procedures, the compliance
date is the specific date when manufacturers are required to use the
new or amended test procedure requirements to make representations
concerning the energy efficiency or use of a product, including
certification that the covered product/equipment meets an applicable
energy conservation standard.
(2) For energy conservation standards, the compliance date is
the specific date upon which manufacturers are required to meet the
new or amended standards for applicable covered products/equipment
that are distributed in interstate commerce.
12. Principles for the Conduct of the Engineering Analysis
(a) The purpose of the engineering analysis is to develop the
relationship between efficiency and cost of the subject product/
equipment. Another important role of the engineering analysis is to
identify the maximum technologically feasible level. The maximum
technologically feasible level is one that can be reached through
efficiency improvements and/or design options, both commercially
feasible and in working prototypes. The Department will consider two
elements in the engineering analysis: The selection of efficiency
levels to analyze, as discussed in paragraph (b) of this section;
and the determination of product cost at each efficiency level, as
discussed in paragraph (c) of this section. From the efficiency/cost
relationship developed in the engineering analysis, measures such as
payback, life-cycle cost, and energy savings can be developed. The
Department will identify issues that will be examined in the
engineering analysis and the types of specialized expertise that may
be required. DOE will select appropriate contractors,
subcontractors, and expert consultants, as necessary, to perform the
engineering analysis. DOE will minimize uncertainties by using
measures such as test data or component or material supplier
information where available. Also, the Department will consider
data, information, and analyses received from interested parties for
use in the analysis wherever feasible.
(b) The Department will typically use one of two approaches to
develop energy efficiency levels for the engineering analysis:
Relying on observed efficiency levels in the market (i.e., the
efficiency-level approach); or determining the incremental
efficiency improvements associated with incorporating specific
design options to a baseline model (i.e., the design-option
approach). The Department will consider the availability of data and
analytical tools, the resource needs, and public comments when
determining the best approach or combination of approaches for an
engineering analysis.
(1) Using the efficiency-level approach, the efficiency levels
established for the analysis will be determined based on the market
distribution of existing products. This approach typically entails
compiling a comprehensive list of products available on the market,
such as from DOE's product certification database and conducting DOE
energy performance tests to validate the certified ratings.
(2) Using the design option approach, the efficiency levels
established for the analysis will be determined through detailed
engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options
that have been identified in the technology assessment and screening
analysis. The design option approach will typically be used when a
comprehensive database of certified models is unavailable. In
certain rulemakings, the efficiency-level approach (based on actual
products on the market) will be extended using the design option
approach to interpolate to define ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the ``max-tech'' level (the level that DOE determines
is the maximum achievable efficiency level, particularly in cases
where the ``max-tech'' level exceeds the maximum efficiency level
currently available on the market). The Department will identify,
modify, or develop any engineering models necessary to predict the
efficiency impact of any one or combination of design options on the
product/equipment as measured by the applicable DOE test procedure.
(3) The cost-efficiency curve and a detailed description of any
engineering models will be available to stakeholders during the pre-
NOPR stage of the rulemaking.
(c) The Department will typically conduct the cost analysis
using one or a combination of approaches depending on a suite of
factors, including the availability and reliability of public
information, characteristics of the subject product/equipment, and
the availability and timeliness of purchasing the product/equipment
on the market. The cost approaches are summarized as follows:
(1) Physical teardowns: Under this approach, the Department will
physically dismantle a commercially-available product/equipment
model, component-by-component, to develop a detailed bill of
materials for the model. The core function of
[[Page 35688]]
physical teardowns is to support the costing analysis; however, it
serves other purposes as well. The teardown process provides
information on the range of design options used to improve energy
efficiency and informs the technology assessment. Performance
testing and teardowns are used to define the baseline, against which
incremental energy savings and incremental costs are compared.
Teardowns are also used to identify technology options for
consideration in the screening analysis and design paths for the
Engineering Analysis.
(2) Catalog teardowns: The Department will often complement
physical teardowns with catalogue (a.k.a., ``virtual'') teardowns,
thereby allowing the analysis to capture a broader range of
capacities and other features within a product family. In lieu of
physically deconstructing the product/equipment, the Department will
identify each component using parts diagrams (available from
manufacturer websites or appliance repair websites, for example) to
develop the bill of materials for the product/equipment. An analysis
comprised of only virtual teardowns is also possible for product
categories where features are well-documented.
(3) Price surveys: If neither a physical nor catalog teardown is
feasible, or if they would be cost-prohibitive or otherwise
impractical, the Department will conduct price surveys using
publicly-available pricing data published on major online retailer
websites and/or by soliciting prices from distributors and other
commercial channels.
13. Principles for the Analysis of Impacts on Manufacturers
(a) Purpose. The purpose of the manufacturer impact analysis
(MIA) is to identify and quantify the impacts of any new or amended
energy conservation standards on manufacturers. The MIA will have
both quantitative and qualitative aspects, and it will include the
analyses of projected industry cash flows, the industry net present
value, conversion costs, and direct employment. Additionally, the
MIA will seek to describe how new or amended energy conservation
standards might affect manufacturing capacity and competition, as
well as how standards contribute to overall regulatory burden.
Finally, the MIA will seek to identify any disproportionate impacts
on manufacturer subgroups, including small business manufacturers.
The Department will analyze the impact of standards on manufacturers
with substantial input from manufacturers and other interested
parties. This section describes the principles that will be used in
conducting future manufacturing impact analyses.
(b) Issue identification. Prior to publishing a NOPR, the
Department will identify issues that will require greater
consideration in the detailed manufacturer impact analysis. Possible
issues may include identification of specific types or subgroups of
manufacturers and concerns over access to technology. Specialized
contractor expertise and empirical data requirements, and analytic
tools required to perform the manufacturer impact analysis also
would be identified at this stage.
(c) Industry characterization. Prior to publishing a NOPR, the
Department will prepare an industry profile based on the market and
technology assessment and other publicly available information. DOE
will use public sources of information (e.g., company financial
reports) to derive preliminary financial inputs for the industry
cash flow analysis. DOE will describe the present and past industry
structure and market characteristics.
(d) Interview Process. DOE will seek to conduct structured,
detailed interviews with manufacturers. During these interviews, DOE
will discuss engineering, manufacturing, procurement, and financial
topics in order to develop and validate key financial inputs,
including product and capital conversion costs, and to gather
additional information on the anticipated effects of energy
conservation standards on revenues, direct employment, capital
assets, industry competition, and subgroup impacts.
(e) Industry Cash Flow Analysis. The quantitative part of the
MIA will rely primarily on the Government Regulatory Impact Model
(``GRIM''), an industry cash flow model with inputs specific to each
rulemaking. The Department will develop critical GRIM inputs using a
number of sources, including publicly-available data, results of the
other rulemaking analyses, and information gathered from industry
stakeholders during the course of manufacturer interviews. To
capture the uncertainty relating to manufacturer cost impacts and
impacts on product/equipment sales, features, and prices following
amended standards, the Department will use the GRIM to estimate a
range of possible impacts under different scenarios.
(f) Cost impacts on manufacturers. The Department will seek
input from interested parties on the treatment of cost issues.
Manufacturers will be encouraged to offer suggestions and feedback
on sources of data and DOE cost estimates. Costing issues to be
addressed include:
(1) Product/equipment-specific costs associated with direct
material, labor, and factory overhead (based on cost impacts
estimated for the engineering analysis);
(2) Product conversion costs, which are investments in research,
development, testing, marketing, and other non-capitalized costs
necessary to make product designs comply with new or amended energy
conservation standards; and
(3) Capital conversion costs, which are investments in property,
plants, and equipment necessary to adapt or change production
facilities such that new, compliant product designs can be
fabricated and assembled.
(g) Disproportional impacts on manufacturer subgroups. DOE will
evaluate subgroups of manufacturers that may be disproportionately
impacted by standards or that may not be accurately represented by
the average cost assumptions used to develop the industry cash flow
analysis. Such manufacturer subgroups may include small business
manufacturers, niche players, and/or manufacturers exhibiting a cost
structure that largely differs from the industry average. The
subgroup analysis will include qualitative descriptions and, where
sufficient non-proprietary data are available, quantitative
estimates.
(h) Impacts on product/equipment sales, features, and prices.
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. For this analysis, the GRIM uses the NIA's annual
shipment projections derived from the shipments analysis.
(i) Measures of impact. The Department will use the GRIM to
calculate cash flows using standard accounting principles and
changes in industry net present value (INPV) between the no-new-
standards case and each standards case. The difference in INPV
between the no-new-standards case and a standards case represents
the financial impact of the new or amended energy conservation
standard on manufacturers. Computations will be performed for the
industry as a whole and, as appropriate, for manufacturer subgroups.
Impacts to be analyzed include:
(1) Industry net present value and change in INPV relative to
the no-new-standards case industry value. The Department will
perform sensitivity/scenario analyses for parameters where
significant uncertainty was identified and/or for which DOE received
significant comment. An uncertainty analysis could include inputs
such as production costs, conversion costs, manufacturer mark-ups,
and shipment projections.
(2) Industry annual cash flows and percent change relative to
the no-new-standards cash flow levels. The Department will analyze
the impact of the new or amended standard on industry annual free
cash flow as an indicator of potential financial constraints in the
industry.
(3) Other measures of impact are described in paragraphs (j)
through (m) of this section and will also be evaluated in the MIA.
(j) Cumulative Impacts of Other Federal Regulatory Actions.
(1) The Department will recognize and consider the overlapping
effects on manufacturers of new or revised DOE standards and other
Federal regulatory actions affecting the same products or equipment.
(2) If the Department determines that a proposed standard would
impose a significant impact on product or equipment manufacturers
within approximately three years of the compliance date of another
DOE standard that imposes significant impacts on the same
manufacturers (or divisions thereof, as appropriate), the Department
will, to the extent possible, evaluate the impact on manufacturers
of the proposed standard and assess the joint impacts of both
standards on manufacturers as described in paragraph (j)(4) of this
section.
(3) If the Department is directed to establish or revise
standards for products/equipment that are components of other
products/equipment subject to standards, the Department will
consider the interaction between such standards in assessing
manufacturer impacts of a particular standard as described in
paragraph (j)(4) of this section.
(4) The Department will seek to assess regulations that affect
the same product and same revenue streams in an appropriately
coordinated or integrated analysis. Where
[[Page 35689]]
multiple regulations do not affect the same revenue streams but lead
to industry constraints due to resources shared (such as capital,
engineering time, test lab availability, or limited capacity of
shared vendors) across covered products, DOE will describe and
consider those industry constraints.
(k) Competitive Impact Assessment. EPCA directs the Department
to consider any lessening of competition that is likely to result
from imposition of standards. It further directs the Attorney
General to determine in writing the impacts, if any, of any
lessening of competition. To assist the Attorney General in making
this determination, DOE will gather information that would help in
assessing asymmetrical cost increases to some manufacturers,
increased proportion of fixed costs potentially increasing business
risks, and potential barriers to market entry (e.g., proprietary
technologies).
(l) Manufacturing Capacity Impact. Through public comment and
during the manufacturer interviews, the Department will seek
information to help identify impacts on manufacturing capacity, such
as:
(1) Capacity utilization and plant location decisions with and
without new or amended standards;
(2) The ability of manufacturers to upgrade or remodel existing
facilities to accommodate new or amended standards;
(3) The nature and value of stranded assets, if any, that are a
direct result of new or amended standards; and
(4) Estimates for any one-time restructuring and other charges,
where applicable.
(m) Direct Employment Impacts. To assess how direct employment
patterns might be affected by new or amended standards, the
Department will solicit industry participant views on changes in
employment patterns that may result from increased standard levels.
To help bound quantitative estimates of the potential employment
impacts, the Department will use the GRIM to estimate the number of
direct employees in the no-new-standards case and in each of the
standards cases during the analysis period.
(n) Summary of quantitative and qualitative assessments. The
NOPR will include a summary of the manufacturer impacts detailed in
the TSD. In the NOPR, DOE will report the manufacturer impacts for
standard levels that are evaluated and discuss quantitative and
qualitative impacts by standard level.
14. Principles for the Analysis of Impacts on Consumers
(a) Early consideration of impacts on consumer utility. The
Department will consider at the earliest stages of the development
of a standard whether particular design options will lessen the
utility of the covered products/equipment to the consumer. See
paragraph (c) of section 6.
(b) Impacts on product/equipment availability. The Department
will determine, based on consideration of information submitted
during the standard development process, whether a proposed standard
is likely to result in the unavailability of any covered product/
equipment type with performance characteristics (including
reliability), features, sizes, capacities, and volumes that are
substantially the same as products/equipment generally available in
the U.S. at the time. DOE will not promulgate a standard if it
concludes that it would result in such unavailability.
(c) Measures of consumer impacts. In the assessment of consumer
impacts of standards, the Department will consider the Life-Cycle
Cost and Payback Period to evaluate the savings in operating
expenses relative to increases in the installed product cost.
(1) Consumer discount rates. To determine present values of
costs and benefits in life-cycle cost analysis for residential
consumers, DOE will calculate discount rates as the weighted average
real interest rate across consumer debt and equity holdings. For
commercial/industrial consumers, DOE will calculate discount rates
as the weighted average cost of capital. DOE will use discount rate
distributions to capture the diversity of residential and
commercial/industrial consumers.
(2) Variation in consumer impacts. The Department will consider
impacts on significant segments of consumers in determining
standards levels, and will use representative consumer samples where
possible to evaluate the potential distribution of impacts of
candidate/trial standard levels being evaluated among consumers
using the product under consideration for standards. Where LCC
savings are positive, the Department will also consider impacts on
any significant subgroups of consumers that may be
disproportionately impacted by a potential standard level, such as
low-income households or small businesses. DOE will consider non-
regulatory approaches as discussed in Section 15, taking into
account significant impacts on identifiable subgroups.
(3) Sensitivity and scenario analyses. For data or assumptions
subject to a higher degree of uncertainty, the Department will also
perform sensitivity and scenario analyses when appropriate.
15. Consideration of Non-Regulatory Approaches
The Department recognizes that non-regulatory efforts by
manufacturers, utilities, and other interested parties can result in
substantial efficiency improvements. The Department intends to
consider the likely effects of non-regulatory initiatives relative
to standard levels being evaluated. DOE will attempt to base its
assessment on the actual impacts of such initiatives to date, but it
also will consider information presented regarding the impacts that
any existing initiative might have in the future.
16. Cross-Cutting Analytical Assumptions
In selecting values for certain cross-cutting analytical
assumptions, DOE expects to rely upon the following sources and
general principles.
(a) Underlying economic assumptions. The appliance standards
analyses will generally use the same economic growth assumptions
that underlie the most current Annual Energy Outlook (AEO) published
by the Energy Information Administration (EIA).
(b) Analytic time length. The appliance standards analyses will
generally consider impacts over the lifetime of products shipped
over a 30-year period. As a sensitivity case, the analyses may also
use a shorter time period in analyzing the effects of the standard.
(c) Energy price trends. Analyses of the impact of appliance
standards on users will generally adopt the reference energy price
scenario of the EIA's most current AEO. The sensitivity of estimated
impacts to possible variations in future energy prices are likely to
be examined using the EIA's high and low energy price scenarios. The
analyses will incorporate regional and/or marginal prices as
appropriate and where available.
(d) Product/equipment-specific energy-efficiency trends, without
updated standards. Product/equipment-specific energy-efficiency
trends will be based on the best available historical market data,
technology trends, and other product-specific assessments by DOE
with input from interested parties.
(e) Discount rates for national costs and benefits. DOE uses
both 3-percent and 7-percent real discount rates when estimating
national impacts. Those discount rates are in accordance with the
Office of Management and Budget (OMB)'s guidance to Federal agencies
on developing regulatory analyses (OMB Circular A-4 (Sept. 17, 2003)
and section E., ``Identifying and Measuring Benefits and Costs,''
therein).
17. Emissions Analysis
(a) Emissions reductions. DOE will use best practices at the
time to estimate emission reductions of certain greenhouse gases and
pollutants likely to result from standard levels being evaluated. To
date best practice means the emissions analysis typically includes
two components. In the first component, DOE typically develops the
power sector emissions analysis--to date best practice includes
using a methodology that utilizes DOE's latest Annual Energy
Outlook. For site combustion of natural gas or petroleum fuels, to
date best practice means the combustion emissions are typically
estimated using emission intensity factors from the Environmental
Protection Agency (EPA). The second component of DOE's emissions
analysis typically estimates the effect of standard levels being
evaluated on emissions due to ``upstream activities'' in the fuel
production chain. These upstream activities include the emissions
related to extracting, processing, and transporting fuels to the
site of combustion, e.g., as detailed in DOE's Full-Fuel-Cycle
Statement of Policy (76 FR 51281 (August 18, 2011)).
(b) Monetization of emissions reductions. For estimating the
economic value of avoided emissions of carbon dioxide and other
greenhouse gases, as well as those of other air pollutants, DOE will
follow the best practices at the time, for example, by using
accepted benefit-per-ton values from the scientific literature at
the time.
[FR Doc. 2021-14273 Filed 7-6-21; 8:45 am]
BILLING CODE 6450-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.