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Proposed Rule2022-04013

Energy Conservation Program: Energy Conservation Standards for Consumer Water Heaters

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Published

March 1, 2022

Issuing agencies

Energy Department

Abstract

The U.S. Department of Energy (DOE or the Department) announces the availability of the preliminary analysis it has conducted for purposes of evaluating the need for amended energy conservation standards for consumer water heaters, which is set forth in the Department's preliminary technical support document (TSD) for this rulemaking. DOE will hold a public meeting via webinar to discuss and receive comment on its preliminary analysis. The meeting will cover the analytical framework, models, and tools used to evaluate potential standards; the results of preliminary analyses performed; potential energy conservation standard levels derived from these analyses (if DOE determines that proposed amendments are necessary); and other relevant issues. In addition, DOE encourages written comments on these subjects.

Full Text

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<title>Federal Register, Volume 87 Issue 40 (Tuesday, March 1, 2022)</title>
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[Federal Register Volume 87, Number 40 (Tuesday, March 1, 2022)]
[Proposed Rules]
[Pages 11327-11335]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-04013]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0019]
RIN 1904-AD91

Energy Conservation Program: Energy Conservation Standards for
Consumer Water Heaters

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

ACTION: Notification of availability of preliminary technical support
document and request for comment.

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SUMMARY: The U.S. Department of Energy (DOE or the Department)
announces the availability of the preliminary analysis it has conducted
for purposes of evaluating the need for amended energy conservation
standards for consumer water heaters, which is set forth in the
Department's preliminary technical support document (TSD) for this
rulemaking. DOE will hold a public meeting via webinar to discuss and
receive comment on its preliminary analysis. The meeting will cover the
analytical framework, models, and tools used to evaluate potential
standards; the results of preliminary analyses performed; potential
energy conservation standard levels derived from these analyses (if DOE
determines that proposed amendments are necessary); and other relevant
issues. In addition, DOE encourages written comments on these subjects.

DATES:
Comments: DOE will accept written comments, data, and information
regarding its preliminary analysis for consumer water heaters no later
than May 2, 2022.
Meeting: DOE will hold a public meeting via webinar on Tuesday,
April 12, 2022, from 1:00 p.m. to 5:00 p.m. See section IV, ``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="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by docket number EERE-2017-BT-STD-0019
and/or RIN 1904-AD91, by any of the following methods:
1. Federal eRulemaking Portal: <a href="http://www.regulations.gov">www.regulations.gov</a>. Follow the
instructions for submitting comments.
2. Email: to <a href="/cdn-cgi/l/email-protection#4a092524393f272f381d2b3e2f38022f2b3e2f3839787a7b7d191e0e7a7a7b730a2f2f642e252f642d253c">[email&#160;protected]</a>. Include
docket number EERE-2017-BT-STD-0019 and/or RIN 1904-AD91 in the subject
line of the message.
No telefacsimiles (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section IV of this document (Public Participation).
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 (COVID-19) pandemic. DOE is currently
suspending receipt of public comments via postal mail and hand
delivery/courier. 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.
To inform interested parties and to facilitate this rulemaking
process, DOE has prepared an agenda, a preliminary TSD, and briefing
materials, which are available on the DOE website at:
<a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32</a>.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at <a href="http://www.regulations.gov">www.regulations.gov</a>. All documents in the
docket are listed in the <a href="http://www.regulations.gov">www.regulations.gov</a> index. However, not all
documents listed in the index may be publicly available, such as those
containing information that is exempt from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0019">www.regulations.gov/docket/EERE-2017-BT-STD-0019</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section IV (Public Participation) for information on how to submit
comments through <a href="http://www.regulations.gov">www.regulations.gov</a>.

FOR FURTHER INFORMATION CONTACT:
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(240) 597-6737. Email: <a href="/cdn-cgi/l/email-protection#024372726e6b636c61675176636c666370667153776771766b6d6c714267672c666d672c656d74">[email&#160;protected]</a>.
Mr. Eric Stas, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-5827. Email: <a href="/cdn-cgi/l/email-protection#0346716a602d50776270436b722d676c662d646c75">[email&#160;protected]</a>.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting
webinar, contact the Appliance and Equipment Standards Program staff at
(202) 287-1445 or by email: <a href="/cdn-cgi/l/email-protection#7a3b0a0a16131b14191f290e1b141e1b081e092b0f1f090e131514093a1f1f541e151f541d150c">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
A. Authority
B. Rulemaking Process
C. Deviation From Appendix A
II. Background
A. Current Standards
B. Current Process
III. Summary of the Analyses Performed by DOE
A. Engineering Analysis
B. Mark-Ups Analysis
C. Energy Use Analysis
D. Life-Cycle Cost and Payback Period Analyses
E. National Impact Analysis
F. Other Analyses
IV. Public Participation
A. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Webinar

[[Page 11328]]

D. Submission of Comments
V. Approval of the Office of the Secretary

I. Introduction

A. Authority

The Energy Policy and Conservation Act, as amended (EPCA),\1\
Public Law 94-163 (42 U.S.C. 6291-6317, as codified), authorizes DOE to
regulate the energy efficiency of a number of consumer products and
certain industrial equipment. Title III, Part B \2\ of EPCA established
the Energy Conservation Program for Consumer Products Other Than
Automobiles. (42 U.S.C. 6291-6309) These products include consumer
water heaters, the subject of this document. (42 U.S.C. 6292(a)(4))
---------------------------------------------------------------------------

\1\ All references to EPCA in this document refer to the statute
as amended through the Infrastructure Investment and Jobs Act,
Public Law 117-58 (Nov. 15, 2021).
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
---------------------------------------------------------------------------

EPCA prescribed energy conservation standards for these products
(42 U.S.C. 6295(e)(1)), and the statute directed DOE to conduct two
cycles of rulemakings to determine whether to amend these standards (42
U.S.C. 6295(e)(4)). EPCA further provides that, not later than 6 years
after the issuance of any final rule establishing or amending a
standard, DOE must publish either a notification of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking (NOPR) including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(1)) Not later than three years after issuance of a final
determination not to amend standards, DOE must publish either a notice
of determination that standards for the product do not need to be
amended, or a NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
DOE completed the first of these rulemaking cycles on January 17,
2001, by publishing in the Federal Register a final rule amending the
energy conservation standards for consumer water heaters. 66 FR 4474
(establishing amended standards with a requirement for compliance
starting on January 20, 2004) (January 2001 Final Rule). Subsequently,
DOE completed the second rulemaking cycle to amend the standards for
consumer water heaters by publishing a final rule in the Federal
Register on April 16, 2010. 75 FR 20112 (establishing amended consumer
water heater standards with a requirement for compliance starting on
April 16, 2015) (April 2010 Final Rule). As directed by later
amendments to EPCA \3\ (see 42 U.S.C. 6295(e)(5)(B)), on July 11, 2014,
DOE published in the Federal Register a final rule amending the test
procedure for consumer water heaters to change the efficiency metric
from energy factor (EF) to uniform energy factor (UEF). 79 FR 40542.
The existing EF-based energy conservation standards were then
translated from EF to UEF in a separate DOE conversion factor final
rule published in the Federal Register on December 29, 2016, that
established a method for converting EF to UEF for water heater basic
models that were previously in existence. 81 FR 96204 (December 2016
Conversion Factor Final Rule). The current energy conservation
standards for consumer water heaters are located in the Code of Federal
Regulations (CFR) at 10 CFR 430.32(d) and are set forth in Table II.1
in section A of this document. The currently applicable DOE test
procedures for consumer water heaters appear at 10 CFR part 430,
subpart B, appendix E (Appendix E).
---------------------------------------------------------------------------

\3\ The requirement for a consumer water heater test procedure
using uniform energy factor as a metric, as well as the requirement
for DOE to undertake a conversion factor rulemaking to translate
existing consumer water heater standards denominated in terms of EF
to ones denominated in terms of UEF, were part of the amendments to
EPCA contained in the American Energy Manufacturing Technical
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
DOE is publishing this preliminary analysis to collect data and
information to inform its decision consistent with its obligations
under EPCA.

B. Rulemaking Process

DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including consumer water
heaters. As noted, EPCA requires that any new or amended energy
conservation standard prescribed by the Secretary of Energy (Secretary)
be designed to achieve the maximum improvement in energy efficiency (or
water efficiency for certain products specified by EPCA) that is
technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would
not result in significant conservation of energy. (42 U.S.C.
6295(o)(3)(B))
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\4\ For
example, the United States rejoined the Paris Agreement on February 19,
2021. As part of that agreement, the United States has committed to
reducing greenhouse gas (GHG) emissions in order to limit the rise in
mean global temperature. As such, energy savings that reduce GHG
emissions have taken on greater importance. Additionally, some covered
products and equipment have most of their energy consumption occur
during periods of peak energy demand. The impacts of these products on
the U.S. energy infrastructure can be more pronounced than those of
products with relatively constant demand. In evaluating the
significance of energy savings, DOE considers differences in not only
site energy use, but also primary energy and full-fuel-cycle (FFC)
effects for different covered products and equipment when determining
whether energy savings are significant. Primary energy and FFC effects
include the energy consumed in electricity production (depending on
load shape), in distribution and transmission, and in extracting,
processing, and transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and, thus, present a more complete picture of the
impacts of energy conservation standards.\5\ Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
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\4\ See 86 FR 70892, 70901 (Dec. 13, 2021).
\5\ The FFC metric is discussed in DOE's statement of policy and
notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended
at 77 FR 49701 (Aug. 17, 2012).
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To determine whether a proposed new or amended energy conservation
standard is economically justified, EPCA requires that DOE determine
whether the benefits of the standard exceed its burdens by considering,
to the greatest extent practicable, the following seven factors:

(1) The economic impact of the standard on the manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated
average life of the covered products in the type (or class) compared
to any increase in the price, initial charges, or maintenance
expenses for the covered products that are likely to result from the
standard;
(3) The total projected amount of energy (or as applicable,
water) savings likely to result directly from the standard;

[[Page 11329]]

(4) Any lessening of the utility or the performance of the
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
DOE fulfills these and other applicable requirements by conducting
a series of analyses throughout the rulemaking process. Table I.1 shows
the individual analyses that are performed to satisfy each of the
requirements within EPCA.

Table I.1--EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
EPCA requirement Corresponding DOE analysis
------------------------------------------------------------------------
Significant Energy Savings................ <bullet> Shipments Analysis.
<bullet> National Impact
Analysis.
<bullet> Energy Analysis.
Technological Feasibility................. <bullet> Market and
Technology Assessment.
<bullet> Screening Analysis.
<bullet> Engineering
Analysis.
Economic Justification:
1. Economic impact on manufacturers <bullet> Manufacturer Impact
and consumers. Analysis.
<bullet> Life-Cycle Cost and
Payback Period Analysis.
<bullet> Life-Cycle Cost
Subgroup Analysis.
<bullet> Shipments Analysis.
2. Lifetime operating cost savings <bullet> Mark-ups for
compared to increased cost for the Product Price Analysis.
product.
<bullet> Energy Analysis.
<bullet> Life-Cycle Cost and
Payback Period Analysis.
3. Total projected energy savings..... <bullet> Shipments Analysis.
<bullet> National Impact
Analysis.
4. Impact on utility or performance... <bullet> Screening Analysis.
<bullet> Engineering
Analysis.
5. Impact of any lessening of <bullet> Manufacturer Impact
competition. Analysis.
6. Need for national energy and water <bullet> Shipments Analysis.
conservation.
<bullet> National Impact
Analysis.
7. Other factors the Secretary <bullet> Employment Impact
considers relevant. Analysis.
<bullet> Utility Impact
Analysis.
<bullet> Emissions Analysis.
<bullet> Monetization of
Emission Reductions
Benefits.\6\
<bullet> Regulatory Impact
Analysis.
------------------------------------------------------------------------

Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
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\6\ Currently, in compliance with the preliminary injunction
issued on February 11, 2022, in Louisiana v. Biden, No. 21-cv-1074-
JDC-KK (W.D. La.), DOE is not monetizing the costs of greenhouse gas
emissions.
---------------------------------------------------------------------------

EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) Consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE deems appropriate. Id. Any rule prescribing such a
standard must include an explanation of the basis on which such higher
or lower level was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments to EPCA contained in the Energy
Independence and Security Act of 2007 (EISA 2007), Public Law 110-140,
any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE's current test procedures for consumer water
heaters address standby mode and off mode energy use. In this
rulemaking, DOE intends to incorporate such energy use into any amended
energy conservation standards it adopts in the final rule.
Before proposing a standard, DOE typically seeks public input on
the analytical framework, models, and tools

[[Page 11330]]

that DOE intends to use to evaluate potential standards for the product
at issue and the results of preliminary analyses DOE performed for the
product.
DOE is examining whether to amend the current energy conservation
standards for consumer water heaters pursuant to its obligations under
EPCA. This document announces the availability of the preliminary TSD,
which details the preliminary analyses and summarizes the preliminary
results of DOE's analyses. In addition, DOE is announcing a public
meeting webinar to solicit feedback from interested parties on its
analytical framework, models, and preliminary results.

C. Deviation from Appendix A

In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``appendix A''), DOE notes that it is deviating from the
provision in appendix A regarding the pre-NOPR stages for an energy
conservation standards rulemaking. See 86 FR 70892 (Dec. 13, 2021)
(effective January 12, 2022). Section 6(a)(2) of appendix A states that
if the Department determines it is appropriate to proceed with a
rulemaking, the preliminary stages of a rulemaking to issue or amend an
energy conservation standard that DOE will undertake will be a
framework document and preliminary analysis, or an advance notice of
proposed rulemaking.
DOE is opting to deviate from this step by publishing a preliminary
analysis without a framework document. A framework document is intended
to introduce and summarize the various analyses DOE conducts during the
rulemaking process and requests initial feedback from interested
parties. As discussed further in section B, prior to this notification
of the preliminary analysis DOE published a request for information
(``RFI'') in which DOE identified and sought comment on the analyses
conducted in support of the most recent energy conservation standards
rulemakings. 85 FR 30853 (May 21, 2020; ``May 2020 RFI'').
Specifically, in the May 2020 RFI, DOE sought data and information as
to whether any new or amended rule would be cost effective,
economically justified, technologically feasible, or would result in a
significant savings of energy. 85 FR 30853, 30855. DOE sought such data
and information to assist in its consideration of whether (and if so,
how) to amend the standards for consumer water heater. Id. Further, DOE
provided an overview of the analysis it would use to evaluate new or
amended energy conservation standards, including references to and
requests for comment on the analyses conducted as part of the most
recent energy conservation standards rulemakings. See 85 FR 30853,
30859-30877. As DOE is intending to rely on substantively the same
analytical methods as in the most recent rulemaking, publication of a
framework document would be largely redundant with the published May
2020 RFI. As such, DOE is not publishing a framework document.
Section 6(d)(2) of appendix A 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. For this preliminary analysis, DOE
has opted to provide a 60-day comment period. As stated, DOE requested
comment in the May 2020 RFI on the previous energy conservation
standards analyses. For this preliminary analysis, DOE has relied on
many of the same analytical assumptions and approaches as used in the
previous rulemaking and has determined that a 60-day comment period in
conjunction with the prior comment period for the May 2020 RFI provides
sufficient time for interested parties to review the preliminary
analysis and develop comments.

II. Background

A. Current Standards

In a final rule published in the Federal Register on April 16, 2010
(April 2010 Final Rule), DOE prescribed the current energy conservation
standards for consumer water heaters, which are applicable to such
products manufactured on and after April 16, 2015. 75 FR 20111, 20234.
As explained in section A of this document, DOE published the
December 2016 Conversion Factor Final Rule in the Federal Register (81
FR 96204 (Dec. 29, 2016)) to convert standards based on EF to standards
based on UEF, the metric produced by the amended test procedure
established by the July 2014 Final Rule (79 FR 40542 (July 11, 2014)).
These standards are set forth in DOE's regulations at 10 CFR 430.32(d)
and are repeated here in Table II.1.

Table II.1--Federal Energy Conservation Standards for Consumer Water Heaters
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rated storage volume and input rating (if
Product class applicable) Draw pattern Uniform energy factor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater...... >=20 gal and <=55 gal Very Small................ 0.3456-(0.0020 x Vr).
............................................ Low....................... 0.5982-(0.0019 x Vr).
............................................ Medium.................... 0.6483-(0.0017 x Vr).
............................................ High...................... 0.6920-(0.0013 x Vr).
>55 gal and <=100 gal Very Small................ 0.6470-(0.0006 x Vr).
............................................ Low....................... 0.7689-(0.0005 x Vr).
............................................ Medium.................... 0.7897-(0.0004 x Vr).
............................................ High...................... 0.8072-(0.0003 x Vr).
Oil-fired Storage Water Heater...... <=50 gal Very Small................ 0.2509-(0.0012 x Vr).
............................................ Low....................... 0.5330-(0.0016 x Vr).
............................................ Medium.................... 0.6078-(0.0016 x Vr).
............................................ High...................... 0.6815-(0.0014 x Vr).
Electric Storage Water Heater....... >=20 gal and <=55 gal Very Small................ 0.8808-(0.0008 x Vr).
............................................ Low....................... 0.9254-(0.0003 x Vr).
............................................ Medium.................... 0.9307-(0.0002 x Vr).
............................................ High...................... 0.9349-(0.0001 x Vr).
>55 gal and <=120 gal Very Small................ 1.9236-(0.0011 x Vr).
............................................ Low....................... 2.0440-(0.0011 x Vr).
............................................ Medium.................... 2.1171-(0.0011 x Vr).
............................................ High...................... 2.2418-(0.0011 x Vr).
Tabletop Water Heater............... >=20 gal and <=120 gal Very Small................ 0.6323-(0.0058 x Vr).
............................................ Low....................... 0.9188-(0.0031 x Vr).

[[Page 11331]]

............................................ Medium.................... 0.9577-(0.0023 x Vr).
............................................ High...................... 0.9884-(0.0016 x Vr).
Instantaneous Gas-fired Water Heater <2 gal and >50,000 Btu/h Very Small................ 0.80.
............................................ Low....................... 0.81.
............................................ Medium.................... 0.81.
............................................ High...................... 0.81.
Instantaneous Electric Water Heater. <2 gal Very Small................ 0.91.
............................................ Low....................... 0.91.
............................................ Medium.................... 0.91.
............................................ High...................... 0.92.
Grid-Enabled Water Heater........... >75 gal Very Small................ 1.0136-(0.0028 x Vr).
............................................ Low....................... 0.9984-(0.0014 x Vr).
............................................ Medium.................... 0.9853-(0.0010 x Vr).
............................................ High...................... 0.9720-(0.0007 x Vr).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ``Vr'' is the Rated Storage Volume (in gallons), as determined pursuant to 10 CFR 429.17.

As stated in section A of this document, EPCA, as amended,
prescribed initial energy conservation standards for consumer water
heaters, as shown in Table II.2. (42 U.S.C. 6295(e)(1)) DOE notes that
the statutory energy conservation standards apply to both storage and
instantaneous consumer water heaters regardless of volume capacity. As
such, the energy conservation standards shown in Table II.2 would cover
the volume and input rate ranges not included in Table II.1.

Table II.2--Consumer Water Heater Energy Conservation Standards
Prescribed by EPCA
------------------------------------------------------------------------
The energy factor shall be not less
than the following for products
Product class manufactured on or after January 1,
1990
------------------------------------------------------------------------
Gas Water Heater.................. 0.62-(0.0019 x Rated Storage Volume
in gallons).
Oil Water Heater.................. 0.59-(0.0019 x Rated Storage Volume
in gallons).
Electric Water Heater............. 0.95-(0.00132 x Rated Storage Volume
in gallons).
------------------------------------------------------------------------

B. Current Process

As stated, on May 21, 2020, DOE published notice in the Federal
Register through a request for information that it was initiating a
review to determine whether any new or amended standards for consumer
water heaters would satisfy the relevant requirements of EPCA. 85 FR
30853. Specifically, through the published notice and RFI, DOE sought
data and information that could enable the agency to determine whether
DOE should propose a ``no new standard'' determination because a more-
stringent standard: (1) Would not result in a significant savings of
energy; (2) is not technologically feasible; (3) is not economically
justified; or (4) any combination of foregoing. Id. at 85 FR 30855.
Comments received to date as part of the current process have
helped DOE identify and resolve issues related to development of the
preliminary analyses. Chapter 2 of the preliminary TSD summarizes and
addresses the comments received. Further comments are requested
throughout the preliminary TSD and executive summary.

III. Summary of the Analyses Performed by DOE

For the products covered in this preliminary analysis, DOE
conducted in-depth technical analyses in the following areas: (1)
Engineering; (2) mark-ups to determine product price; (3) energy use;
(4) life cycle cost (LCC) and payback period (PBP); and (5) national
impacts. The preliminary TSD that presents the methodology and results
of each of these analyses is available at: <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32</a>.
DOE also conducted, and has included in the preliminary TSD,
several other analyses that support the major analyses or are
preliminary analyses that will be expanded if DOE determines that a
NOPR is warranted to propose new or amended energy conservation
standards. These analyses include: (1) The market and technology
assessment; (2) the screening analysis, which contributes to the
engineering analysis; and (3) the shipments analysis, which contributes
to the LCC and PBP analysis and the national impact analysis (NIA). In
addition to these analyses, DOE has begun preliminary work on the
manufacturer impact analysis and has identified the methods to be used
for the consumer subgroup analysis, the emissions analysis, the
employment impact analysis, the regulatory impact analysis, and the
utility impact analysis. DOE will expand on these analyses in the NOPR,
should one be issued.

A. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of consumer water heaters.
There are two elements to consider in the engineering analysis: (1) The
selection of efficiency levels to analyze (i.e., the ``efficiency
analysis'') and (2) the determination of product cost at each
efficiency level (i.e., the ``cost analysis''). In determining the
performance of higher-efficiency products, DOE considers technologies
and design option combinations not eliminated by the screening
analysis. For each product class, DOE estimates the baseline cost, as
well as the incremental cost, for the product/equipment at efficiency
levels above the baseline. The output of the engineering analysis is a
set of cost-efficiency ``curves'' that are used in downstream

[[Page 11332]]

analyses (i.e., the LCC and PBP analyses and the NIA).
DOE converts the Manufacture Production Cost (MPC) to the
manufacturer selling price (MSP) by applying a manufacturer mark-up.
The MSP is the price the manufacturer charges its first customer, when
selling into the consumer water heater distribution channels. The
manufacturer mark-up accounts for manufacturer non-production costs and
profit margin. DOE developed the manufacturer mark-up by examining
publicly-available financial information for manufacturers of the
covered product.
See Chapter 5 of the preliminary TSD for additional detail on the
engineering analysis and Chapter 12 of the preliminary TSD for
additional detail on the manufacturer mark-up.

B. Mark-Ups Analysis

The mark-ups analysis develops appropriate mark-ups (e.g., retailer
mark-ups, distributor mark-ups, contractor mark-ups) in the
distribution chain and sales taxes to convert MSP estimates derived in
the engineering analysis to consumer prices, which are then used in the
LCC and PBP analysis. At each step in the distribution channel,
companies mark up the price of the product to cover business costs and
profit margin.
DOE developed baseline and incremental markups for each actor in
the distribution chain for consumer water heaters. Baseline mark-ups
are applied to the price of products with baseline efficiency, while
incremental mark-ups are applied to the difference in price between
baseline and higher-efficiency models (the incremental cost increase).
The incremental mark-up is typically less than the baseline mark-up and
is designed to maintain similar per-unit operating profit before and
after new or amended standards.\7\
---------------------------------------------------------------------------

\7\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same mark-up for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive, it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

Chapter 6 of the preliminary TSD provides details on DOE's
development of mark-ups for consumer water heaters.

C. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of consumer water heaters at different efficiencies
in representative U.S. single-family homes, multi-family residences,
and commercial buildings, and to assess the energy savings potential of
increased consumer water heater efficiency. The energy use analysis
estimates the range of energy use of consumer water heaters in the
field (i.e., as they are actually used by consumers). In addition, the
energy use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy savings and the
savings in consumer operating costs that could result from adoption of
amended or new energy conservation standards.
Chapter 7 of the preliminary TSD addresses the energy use analysis.

D. Life-Cycle Cost and Payback Period Analyses

The effect of new or amended energy conservation standards on
individual consumers usually involves a reduction in operating cost and
an increase in purchase cost. DOE used the following two metrics to
measure consumer impacts:
<bullet> The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain mark-ups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
<bullet> The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
Chapter 8 of the preliminary TSD addresses the LCC and PBP
analyses.

E. National Impact Analysis

The NIA estimates the national energy savings (NES) and the net
present value (NPV) of total consumer costs and savings expected to
result from amended standards at specific efficiency levels (referred
to as candidate standard levels).\8\ DOE calculates the NES and NPV for
the potential standard levels considered based on projections of annual
product shipments, along with the annual energy consumption and total
installed cost data from the energy use and LCC analyses. For the
present analysis, DOE projected the energy savings, operating cost
savings, product costs, and NPV of consumer benefits over the lifetime
of consumer water heaters sold from 2030 through 2059.
---------------------------------------------------------------------------

\8\ The NIA accounts for impacts in the 50 States and U.S.
territories.
---------------------------------------------------------------------------

DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
for that class. For each efficiency level, DOE considers how a given
standard would likely affect the market shares of product with
efficiencies greater than the standard.
For the NIA, DOE uses a spreadsheet model to calculate the energy
savings and the national consumer costs and savings from each
efficiency level. Interested parties can review DOE's analyses by
changing various input quantities within the spreadsheet. The NIA
spreadsheet model uses typical values (as opposed to probability
distributions) as inputs. Critical inputs to this analysis include
shipments projections, estimated product lifetimes, product installed
costs and operating costs, product annual energy consumption, the base-
case efficiency projection, product switching parameters, and discount
rates. Chapter 10 of the preliminary TSD addresses the NIA.

F. Other Analyses

As stated in section A of this document, EPCA does not prescribe
storage volume or minimum input rating limits within its definition of
consumer ``water heater.'' However, DOE's energy conservation standards
for consumer water heaters at 10 CFR 430.32(d) do not include certain
storage volume and input rating ranges. The storage volume and input
rating ranges currently covered by the statutory standards at 42 U.S.C.
6295(e)(1) but not included in the list of energy conservation
standards in DOE's regulations at 10 CFR 430.32(d) are set forth in
Table III.1.

[[Page 11333]]

Table III.1--Consumer Water Heaters Without UEF-Based Energy
Conservation Standards
------------------------------------------------------------------------
Rated storage volume and input
Product class rating (if applicable)
------------------------------------------------------------------------
Gas-fired Storage...................... <20 gal.
>100 gal.
Oil-fired Storage...................... >50 gal.
Electric Storage....................... <20 gal.
>120 gal.
Tabletop............................... <20 gal.
>120 gal.
Gas-fired Instantaneous................ <2 gal and <=50,000 Btu/h.
>=2 gal and <=50 kBtu/h.
>=2 gal and >50 kBtu/h.
Oil-fired Instantaneous................ All.
Electric Instantaneous................. >=2 gal.
------------------------------------------------------------------------

In the December 2016 Conversion Factor Final Rule, DOE stated that
it would not enforce the statutory standards (i.e., those prescribed by
EPCA but are not codified in the CFR) applicable to the consumer water
heaters that did not have a standard within the CFR until some point
after DOE finalizes the conversion factor and the converted standards
applicable to those products. 81 FR 96204, 96211 (Dec. 29, 2016). DOE
will consider and may establish energy conservation standards for these
products in this rulemaking. See Chapter 5 of the preliminary TSD for
additional detail on the conversion of the remaining EF-based standards
established by EPCA to UEF-based standards.
On January 11, 2022, DOE published a test procedure NOPR in the
Federal Register which proposed new definitions for certain types of
consumer water heaters. 87 FR 1554 (January 2022 WH TP NOPR). These
definitions included ``circulating water heater'' \9\ and ``low
temperature water heater.'' \10\ These water heaters cannot be tested
using the existing test procedure in Appendix E but can be tested using
the proposed test procedures found in the January 2022 WH TP NOPR. See
Chapter 5 of the preliminary TSD for additional detail on the product
classes in which these products are covered and a discussion of the
applicable energy conservation standards.
---------------------------------------------------------------------------

\9\ The January 2022 WH TP NOPR proposed to define ``circulating
water heater'' at 10 CFR 430.2 as an instantaneous or heat pump type
water heater that does not have an operational scheme in which the
burner, heating element, or compressor initiates and terminates
heating based on sensing flow; has a water temperature sensor
located at the inlet of the water heater or in a separate storage
tank that is the primary means of initiating and terminating
heating; and, must be used in combination with a recirculating pump
and either a separate storage tank or water circulation loop in
order to achieve the water flow and temperature conditions
recommended in the manufacturer's installation and operation
instructions. 87 FR 1554, 1595 (Jan. 11, 2022).
\10\ The January 2022 WH TP NOPR proposed to define a ``low
temperature water heater'' as an electric instantaneous water heater
that is not a circulating water heater and cannot deliver water at a
temperature greater than or equal to the set point temperature
specified in section 2.5 of appendix E to subpart B of this part
when supplied with water at the supply water temperature specified
in section 2.3 of appendix E to subpart B of this part. 87 FR 1554,
1595 (Jan. 11, 2022).
---------------------------------------------------------------------------

IV. Public Participation

DOE invites public engagement in this process through participation
in the webinar and submission of written comments, data, and
information. After the webinar and the closing of the comment period,
DOE will consider all timely-submitted comments and additional
information obtained from interested parties, as well as information
obtained through further analyses. Following such consideration, the
Department will publish either a determination that the energy
conservation standards for consumer water heaters need not be amended
or a NOPR proposing to amend those standards. The NOPR, should one be
issued, would include proposed energy conservation standards for the
products covered by this rulemaking, and members of the public would be
given an opportunity to submit written and oral comments on the
proposed standards.

A. Participation in the Webinar

The time and date of the webinar meeting are listed in the DATES
section at the beginning of this document. Webinar registration
information, participant instructions, and information about the
capabilities available to webinar participants will be published on
DOE's website: <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32</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
document, 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 public meeting webinar. Such persons may
submit requests to speak via email to the Appliance and Equipment
Standards Program at: <a href="/cdn-cgi/l/email-protection#25645555494c444b46407651444b414457415674504056514c4a4b566540400b414a400b424a53">[email&#160;protected]</a>. Persons
who wish to speak should include with their request a computer file in
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 public meeting 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 public meeting
webinar and may also use a professional facilitator to aid discussion.
The webinar 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

[[Page 11334]]

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 public meeting 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 public meeting 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 public meeting webinar will be conducted in an informal,
conference style. DOE will present a general overview of the topics
addressed in this rulemaking, 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
allow, 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 public
meeting 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 public meeting webinar.
A transcript of the public meeting webinar will be included in the
docket, which can be viewed as described in the Docket section at the
beginning of this document. In addition, any person may buy a copy of
the transcript from the transcribing reporter.

D. Submission of Comments

DOE invites all interested parties, regardless of whether they
participate in the public meeting webinar, to submit in writing no
later than the date provided in the DATES section at the beginning of
this document, comments, data, and information on matters addressed in
this notification and on other matters relevant to DOE's consideration
of potential amended energy conservations standards for consumer water
heaters. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via <a href="http://www.regulations.gov">www.regulations.gov</a>. The
<a href="http://www.regulations.gov">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 itself 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. If this instruction is followed, 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="http://www.regulations.gov">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="http://www.regulations.gov">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="http://www.regulations.gov">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="http://www.regulations.gov">www.regulations.gov</a>
provides after you have successfully uploaded your comment.
Submitting comments via email. Comments and documents submitted via
email also will be posted to <a href="http://www.regulations.gov">www.regulations.gov</a>. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information in a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. The cover letter will not be publicly viewable as long as it
does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. No telefacsimiles (faxes) will
be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, or text (ASCII) file format. Provide documents that are not
secured, that are written in English, and that are free of any defects
or viruses. Documents should not contain special characters or any form
of encryption and, if possible, they should carry the electronic
signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
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
email two well-marked copies: One copy of the document marked
``Confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
with the information believed to be confidential deleted. DOE will make
its own determination about the confidential status of the information
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
information provided in the comments (except information deemed to be
exempt from public disclosure).

V. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of this
notification of availability of the preliminary technical support
document and request for comment.

[[Page 11335]]

Signing Authority

This document of the Department of Energy was signed on February
13, 2022, by Kelly J. Speakes-Backman, Principal Deputy Assistant
Secretary for Energy Efficiency and Renewable Energy, pursuant to
delegated authority from the Secretary of Energy. That document with
the original signature and date is maintained by DOE. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.

Signed in Washington, DC, on February 22, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-04013 Filed 2-28-22; 8:45 am]
BILLING CODE 6450-01-P

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