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Proposed Rule2022-07145

Energy Conservation Program: Energy Conservation Standards for Consumer Pool Heaters

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Published

April 15, 2022

Issuing agencies

Energy Department

Abstract

The Energy Policy and Conservation Act, as amended ("EPCA"), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including consumer pool heaters. EPCA also requires the U.S. Department of Energy ("DOE") to periodically determine whether more-stringent, standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking ("NOPR"), DOE proposes definitions for the different classes of pool heaters, amended energy conservation standards for gas- fired pool heaters, new energy conservation standards for electric pool heaters, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results.

Full Text

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[Federal Register Volume 87, Number 73 (Friday, April 15, 2022)]
[Proposed Rules]
[Pages 22640-22718]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07145]

[[Page 22639]]

Vol. 87

Friday,

No. 73

April 15, 2022

Part II

Department of Energy

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10 CFR Parts 429 and 430

Energy Conservation Program: Energy Conservation Standards for Consumer
Pool Heaters; Proposed Rule

Federal Register / Vol. 87 , No. 73 / Friday, April 15, 2022 /
Proposed Rules

[[Page 22640]]

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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

[EERE-2021-BT-STD-0020]
RIN 1904-AD49

Energy Conservation Program: Energy Conservation Standards for
Consumer Pool Heaters

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

ACTION: Notice of proposed rulemaking and announcement of public
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including consumer
pool heaters. EPCA also requires the U.S. Department of Energy
(``DOE'') to periodically determine whether more-stringent, standards
would be technologically feasible and economically justified, and would
result in significant energy savings. In this notice of proposed
rulemaking (``NOPR''), DOE proposes definitions for the different
classes of pool heaters, amended energy conservation standards for gas-
fired pool heaters, new energy conservation standards for electric pool
heaters, and also announces a public meeting to receive comment on
these proposed standards and associated analyses and results.

DATES: Meeting: DOE will hold a public meeting via webinar on this NOPR
on Wednesday, May 4, 2022, from 1 p.m. to 4 p.m. See section VII,
``Public Participation,'' for webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants.
Comments: Comments regarding the likely competitive impact of the
proposed standard should be sent to the Department of Justice contact
listed in the ADDRESSES section on or before May 16, 2022.
DOE will accept comments, data, and information regarding this NOPR
no later than June 14, 2022.

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 by email to the following address:
<a href="/cdn-cgi/l/email-protection#9fcff0f0f3d7fafeebfaedecadafadaecccbdbafafadafdffafab1fbf0fab1f8f0e9">[email&#160;protected]</a>. Include ``Energy Conservation
Standards for Consumer Pool Heaters'' and the docket number EERE-2021-
BT-STD-0020 and/or RIN number 1904-AD49 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 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.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section VII of this document.
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
information that is exempt from public disclosure.
The docket web page can be found at <a href="http://www.regulations.gov/#!docketDetail">www.regulations.gov/#!docketDetail</a>;D=EERE-2021-BT-STD-0020. The docket web page contains
instructions on how to access all documents, including public comments,
in the docket. See section VII for information on how to submit
comments through <a href="http://www.regulations.gov">www.regulations.gov</a>.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to the Office of Energy Efficiency and
Renewable Energy following the instructions at <a href="http://www.regulations.gov">www.regulations.gov</a>.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at <a href="/cdn-cgi/l/email-protection#f0959e95829789de8384919e9491829483b08583949f9ade979f86">[email&#160;protected]</a> on or
before the date specified in the DATES section. Please indicate in the
``Subject'' line of your email the title and Docket Number of this
proposed rulemaking.

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#89c8f9f9e5e0e8e7eaecdafde8e7ede8fbedfad8fcecfafde0e6e7fac9ececa7ede6eca7eee6ff">[email&#160;protected]</a>.
Ms. Kathryn McIntosh, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC,
20585-0121. Telephone: (202) 586-2002. Email:
<a href="/cdn-cgi/l/email-protection#82c9e3f6eaf0fbecaccfe1cbecf6edf1eac2eaf3ace6ede7ace5edf4">[email&#160;protected]</a>.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the webinar, contact
the Appliance and Equipment Standards Program staff at (202) 287-1445
or by email: <a href="/cdn-cgi/l/email-protection#1e5f6e6e72777f707d7b4d6a7f707a7f6c7a6d4f6b7b6d6a7771706d5e7b7b307a717b30797168">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemakings for Consumer Pool Heaters
C. Deviation From Appendix A
III. General Discussion
A. Product Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
2. Rebuttable Presumption
F. Other Issues
1. Regulatory Approach For Consumer Pool Heaters
2. Certification and Enforcement
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Scope of Coverage and Product Classes

[[Page 22641]]

2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency analysis
2. Cost Analysis
D. Markups Analysis
E. Energy Use Analysis
1. Pool Heater Consumer Samples
2. Energy Use Estimation
3. Energy Use Results
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Repair and Maintenance Costs
6. Product Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
3. Manufacturer Interviews
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
2. Monetization of Other Air Pollutants
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
2. Economic Impacts on Manufacturers
3. National Impact Analysis
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation to Conserve Energy
7. Other Factors
8. Summary of National Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Consumer Pool
Heater Standards
2. Annualized Benefits and Costs of the Proposed Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Description of Materials Incorporated by Reference
VII. 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
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

Title III, Part B \1\ of EPCA,\2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include consumer pool heaters, the
subject of this rulemaking. (42 U.S.C. 6292(a)(11))
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020).
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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)) EPCA also provides that not later
than 6 years after issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(1))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for gas-fired pool heaters and new energy conservation standards for
electric pool heaters. In addition, the proposed new and amended
standards are expressed in terms of the integrated thermal efficiency
(TE<INF>I</INF>) metric, which replaces the thermal efficiency (TE)
metric for gas-fired pool heaters, and are shown in Table I.1. The
proposed TE<INF>I</INF> standards are expressed as a function of the
active mode electrical input power (PE) in British thermal units per
hour (Btu/h) for electric pool heaters and the gas input rating
(Q<INF>IN</INF>) in Btu/h for gas-fired pool heaters. These proposed
standards, if adopted, would apply to all consumer pool heaters listed
in Table I.1 manufactured in, or imported into, the United States
starting on the date 5 years after the publication of the final rule
for this rulemaking. (42 U.S.C. 6295(m)(4)(A)(ii))

[[Page 22642]]

[GRAPHIC] [TIFF OMITTED] TP15AP22.000

A. Benefits and Costs to Consumers

Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of consumer pool heaters, as measured
by the average life-cycle cost (``LCC'') savings and the simple payback
period (``PBP'').\3\ The average LCC savings are positive for electric
pool heaters and gas-fired pool heaters, and the PBP is less than the
average lifetime of electric pool heaters and gas-fired pool heaters,
which is estimated to be 11.2 years (see section IV.F.6 of this NOPR).
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\3\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.9 of this NOPR). The simple PBP, which is designed
to compare specific efficiency levels, is measured relative to the
baseline product (see section IV.C of this NOPR).

Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Pool Heaters
------------------------------------------------------------------------
Average LCC Simple payback
Product class savings 2020$ period years
------------------------------------------------------------------------
Electric Pool Heater.................... 1,029 0.7
Gas-fired Pool Heater................... 43 1.5
------------------------------------------------------------------------

DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.

B. Impact on Manufacturers

The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the reference year through
the end of the analysis period (2021-2057). Using a real discount rate
of 7.4 percent,\4\ DOE estimates that the INPV for manufacturers of
consumer pool heaters in the case without new and amended energy
conservation standards is $188.7 million in 2020$. Under the proposed
standards, the change in INPV is estimated to range from -14.7 percent
to -7.7 percent, which is approximately -$27.7 million to -$14.4
million. In order to bring products into compliance with the proposed
standards, it is estimated that the consumer pool heater industry would
incur conversion costs of approximately $38.8 million.
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\4\ The discount rate was derived from industry financials from
publicly traded companies and then modified according to feedback
received during manufacturer interviews.
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DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.

C. National Benefits and Costs 5
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\5\ All monetary values in this document are expressed in 2020
dollars.
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DOE's analyses indicate that the proposed energy conservation
standards for consumer pool heaters would save a significant amount of
energy. Relative to the case without new or amended standards, the
lifetime energy savings for consumer pool heaters purchased in the 30-
year period that begins in the anticipated first full year of
compliance with the new or amended standards (2028-2057) amount to 0.49
quadrillion British thermal units (``Btu''), or quads.\6\ This
represents a savings of 5.3 percent relative to the energy use of
electric and gas-fired pool heaters in the case without amended
standards (referred to as the ``no-new-standards case'').
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\6\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.1 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for consumer pool heaters ranges
from $0.95 billion (at a 7-percent discount rate) to $2.39 billion (at
a 3-percent discount rate). This NPV expresses the estimated total
value of future operating-cost savings minus the estimated increased
product and installation costs for consumer pool heaters purchased in
2028-2057.
In addition, the proposed standards for consumer pool heaters are
projected to yield significant environmental benefits. DOE estimates
that the proposed standards would result in cumulative emission
reductions (over the same period as for energy savings) of 19 million
metric tons (``Mt'') \7\ of carbon dioxide (``CO<INF>2</INF>''), 5.5
thousand tons of sulfur dioxide (``SO<INF>2</INF>''), 90 thousand tons
of nitrogen oxides

[[Page 22643]]

(``NO<INF>X</INF>''), 161 thousand tons of methane
(``CH<INF>4</INF>''), 0.15 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.03 tons of mercury (``Hg'').\8\
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\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\8\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2021 (``AEO2021). AEO2021 represents current federal and
state legislation and final implementation of regulations as of the
time of its preparation. See section IV.K for further discussion of
AEO2021 assumptions that effect air pollutant emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases using four different estimates of the social cost of
CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of methane
(``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide (``SC-
N<INF>2</INF>O''). Together these represent the social cost of
greenhouse gases (SC-GHG). DOE used interim SC-GHG values developed by
an Interagency Working Group on the Social Cost of Greenhouse Gases
(IWG).\9\ The derivation of these values is discussed in section IV.L
of this document. For presentational purposes, the climate benefits
associated with the average SC-GHG at a 3-percent discount rate are
estimated to be $0.9 billion. DOE does not have a single central SC-GHG
point estimate and it emphasizes the importance and value of
considering the benefits calculated using all four SC-GHG estimates.
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\9\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021. Available at: <a href="http://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf">www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf</a>
(last accessed March 17, 2022).
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DOE also estimates health benefits from SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions.\10\ DOE estimates the present
value of the health benefits would be $0.1 billion using a 7-percent
discount rate, and $0.3 billion using a 3-percent discount rate.\11\
DOE is currently only monetizing (for SO<INF>2</INF> and
NO<INF>X</INF>) PM<INF>2.5</INF> precursor health benefits and (for
NO<INF>X</INF>) ozone precursor health benefits but will continue to
assess the ability to monetize other effects such as health benefits
from reductions in direct PM<INF>2.5</INF> emissions 12 13
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\10\ DOE estimated the monetized value of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions associated with site and
electricity savings using benefit per ton estimates from the
scientific literature. See section IV.L.2 of this document for
further discussion.
\11\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
\12\ DOE plans to update its methodology to reflect the
Environmental Protection Agency's recent updates to benefit-per-ton
values in a future impact analysis if DOE issues a final rule and
generally for forthcoming rulemakings, but DOE does not have time to
fully vet the new methods for this impact analysis.
\13\ On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is
no longer in effect, pending resolution of the federal government's
appeal of that injunction or a further court order. Among other
things, the preliminary injunction enjoined the defendants in that
case from ``adopting, employing, treating as binding, or relying
upon'' the interim estimates of the social cost of greenhouse
gases--which were issued by the Interagency Working Group on the
Social Cost of Greenhouse Gases on February 26, 2021--to monetize
the benefits of reducing greenhouse gas emissions. In the absence of
further intervening court orders, DOE will revert to its approach
prior to the injunction and present monetized benefits where
appropriate and permissible under law.
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Table I.3 summarizes the economic benefits and costs expected to
result from the proposed standards for consumer pool heaters. In the
table, total benefits for both the 3-percent and 7-percent cases are
presented using the average GHG social costs with 3-percent discount
rate. DOE does not have a single central SC-GHG point estimate and it
emphasizes the importance and value of considering the benefits
calculated using all four SC-GHG estimates. The estimated total net
benefits using each of the four SC-GHG estimates are presented in
section V.B.8. of this document.

Table I.3--Summary of Monetized Economic Benefits and Costs of Proposed
Energy Conservation Standards for Consumer Pool Heaters
[TSL 5]
------------------------------------------------------------------------
Billion 2020$
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 3.2
Climate Benefits *...................................... 0.9
Health Benefits **...................................... 0.3
Total Benefits [dagger]................................. 4.4
Consumer Incremental Product Costs [Dagger]............. 0.8
Net Benefits............................................ 3.6
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 1.4
Climate Benefits *...................................... 0.9
Health Benefits **...................................... 0.1
Total Benefits [dagger]................................. 2.4
Consumer Incremental Product costs [Dagger]............. 0.4
Net Benefits............................................ 2.0
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with
consumer pool heaters shipped in 2028-2057. These results include
benefits to consumers which accrue after 2057 from the products
shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.17 through Table V.19. Together these represent the global
social cost of greenhouse gases (SC-GHG). For presentational purposes
of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but the Department does not
have a single central SC-GHG point estimate. See section. IV.L of this
document for more details
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing PM2.5 and (for NOX) ozone
precursor health benefits, but will continue to assess the ability to
monetize other effects such as health benefits from reductions in
direct PM2.5 emissions. The health benefits are presented at real
discount rates of 3 and 7 percent. See section IV.L of this document
for more details.

[[Page 22644]]

[dagger] Total and net benefits include consumer, climate, and health
benefits. For presentation purposes, total and net benefits for both
the 3-percent and 7-percent cases are presented using the average SC-
GHG with 3-percent discount rate, but the Department does not have a
single central SC-GHG point estimate. DOE emphasizes the importance
and value of considering the benefits calculated using all four SC-GHG
estimates. See Table V.22 for net benefits using all four SC-GHG
estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction issued
in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result
of the Fifth Circuit's order, the preliminary injunction is no longer
in effect, pending resolution of the federal government's appeal of
that injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. In the absence of further
intervening court orders, DOE will revert to its approach prior to the
injunction and present monetized benefits where appropriate and
permissible under law.
[Dagger] Costs include incremental equipment costs as well as
installation costs.

The benefits and costs of the proposed standards, for consumer pool
heaters sold in 2028-2057, can also be expressed in terms of annualized
values. The monetary values for the total annualized net benefits are
(1) the reduced consumer operating costs, minus (2) the increase in
product purchase prices and installation costs, plus (3) the value of
the benefits of GHGs, SO<INF>2</INF> and NO<INF>X</INF> emission
reductions, all annualized.\14\
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\14\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2028, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2028. The calculation uses discount rates of 3 and 7 percent for
all costs and benefits. Using the present value, DOE then calculated
the fixed annual payment over a 30-year period, starting in the
compliance year, that yields the same present value.
---------------------------------------------------------------------------

The national operating savings are domestic private U.S. consumer
monetary savings that occur as a result of purchasing the covered
products and are measured for the lifetime of consumer pool heaters
shipped in 2028-2057. The climate and health benefits associated with
reduced emissions achieved as a result of the proposed standards are
also calculated based on the lifetime of consumer pool heaters shipped
in 2028-2057.
Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.4. The results under the primary
estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards
proposed in this rule is $49.0 million per year in increased equipment
costs, while the estimated annual benefits are $164 million in reduced
equipment operating costs, $54.5 million in climate benefits, and $15.6
million in health benefits. In this case, the net benefit would amount
to $185 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $49.3 million per year in
increased equipment costs, while the estimated annual benefits are $195
million in reduced operating costs, $54.5 million in climate benefits,
and $19.6 million in health benefits. In this case, the net benefit
would amount to $220 million per year.

Table I.4--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Consumer Pool
Heaters
[TSL 5]
----------------------------------------------------------------------------------------------------------------
Million 2020$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 194.9 179.0 212.8
Climate Benefits *.............................................. 54.5 52.4 56.6
Health Benefits **.............................................. 19.6 18.9 20.4
Total Benefits [dagger]......................................... 269 250 290
Consumer Incremental Product Costs [Dagger]..................... 49.3 51.4 49.4
Net Benefits.................................................... 220 199 240
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 164.2 152.7 177.7
Climate Benefits *.............................................. 54.5 52.4 56.6
Health Benefits **.............................................. 15.6 15.0 16.1
Total Benefits [dagger]......................................... 234 220 250
Consumer Incremental Product Costs [Dagger]..................... 49.0 50.7 49.2
Net Benefits.................................................... 185 169 201
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer pool heaters shipped in 2028-2057.
These results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate). Together these represent the global social cost of greenhouse
gases (SC-GHG). For presentational purposes of this table, the climate benefits associated with the average SC-
GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
GHG estimates. See section. IV.L of this document for more details.

[[Page 22645]]

** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
PM2.5 and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5 emissions. The health benefits are presented
at real discount rates of 3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's emergency motion for
stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-
1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary injunction is no longer in
effect, pending resolution of the federal government's appeal of that injunction or a further court order.
Among other things, the preliminary injunction enjoined the defendants in that case from ``adopting,
employing, treating as binding, or relying upon'' the interim estimates of the social cost of greenhouse
gases--which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February
26, 2021--to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening
court orders, DOE will revert to its approach prior to the injunction and present monetized benefits where
appropriate and permissible under law.
[Dagger] Costs include incremental equipment costs as well as installation costs.

DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K, and IV.L of this document.

D. Conclusion

DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified and would result in the significant
conservation of energy. DOE further notes that products achieving these
standard levels are already commercially available for all product
classes covered by this proposal. Based on the analyses described
previously, DOE has tentatively concluded that the benefits of the
proposed standards to the Nation (energy savings, positive NPV of
consumer benefits, consumer LCC savings, and emission reductions) would
outweigh the burdens (loss of INPV for manufacturers and LCC increases
for some consumers).
DOE also considered more-stringent energy efficiency levels as
potential standards and is still considering them in this rulemaking.
However, DOE has tentatively concluded that the potential burdens of
the more-stringent energy efficiency levels would outweigh the
projected benefits.
Based on consideration of the public comments DOE received in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed standards, or some combination of
level(s) that incorporate the proposed standards in part.

II. Introduction

The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
consumer pool heaters.

A. Authority

EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include consumer pool
heaters, the subject of this document. (42 U.S.C. 6292(a)(11)) EPCA
prescribed energy conservation standards for these products (42 U.S.C.
6295(e)(2)) and directs DOE to conduct two cycles 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 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)(1))
The energy conservation program for covered products under EPCA
consists essentially of four parts: (1) Testing, (2) labeling, (3) the
establishment of Federal energy conservation standards, and (4)
certification and enforcement procedures. Relevant provisions of EPCA
specifically include definitions (42 U.S.C. 6291), test procedures (42
U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation
standards (42 U.S.C. 6295), and the authority to require information
and reports from manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (See 42
U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly,
DOE must use these test procedures to determine whether the products
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The
DOE test procedures for consumer pool heaters appear at title 10 of the
Code of Federal Regulations (``CFR'') part 430, subpart B, appendix P
(``appendix P'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including consumer pool
heaters. Any new or amended standard for a covered product must be
designed to achieve the maximum improvement in energy efficiency that
the Secretary of Energy determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would
not result in the significant conservation of energy. (42 U.S.C.
6295(o)(3)(B))
Moreover, DOE may not prescribe a standard: (1) For certain
products, including consumer pool heaters, if no test procedure has
been established for the product, or (2) if DOE determines by rule that
the standard is not technologically feasible or economically justified.
(42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard
is economically justified, DOE must determine whether the benefits of
the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must
make this determination after receiving comments on the proposed
standard,

[[Page 22646]]

and by considering, to the greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, 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;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
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))
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 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 pool
heaters, which measures integrated thermal efficiency, addresses
standby mode and off mode energy use. In this rulemaking, DOE intends
to incorporate such energy use into any new or amended energy
conservation standards it adopts in the final rule through use of
integrated thermal efficiency as the regulating metric.

B. Background

1. Current Standards
The current energy conservation standard for gas-fired pool heaters
is set forth in DOE's regulations at 10 CFR 430.32(k) and is repeated
in Table II.1 of this document. The current energy conservation
standard for gas-fired pool heaters is in terms of thermal efficiency,
which measures only active mode efficiency. Electric pool heaters are a
covered product under EPCA, but there is currently no Federal energy
conservation standard.

Table II.1--Federal Energy Conservation Standards for Consumer Pool
Heaters
------------------------------------------------------------------------
Minimum thermal
Product class efficiency
(percent)
------------------------------------------------------------------------
Gas-Fired Pool Heaters................................. 82
------------------------------------------------------------------------

2. History of Standards Rulemakings for Consumer Pool Heaters
On April 16, 2010, DOE published a final rule in which it concluded
the first round of rulemaking required under EPCA and established an
amended energy conservation standard for consumer pool heaters. 75 FR
20112 (``April 2010 final rule'').\15\ In relevant part, the April 2010
final rule amended the statutorily prescribed standards for gas-fired
pool heaters with a compliance date of April 16, 2013, on and after
which gas-fired pool heaters were required to achieve a thermal
efficiency of 82 percent.
---------------------------------------------------------------------------

\15\ A correction notice was published on April 27, 2010,
correcting a reference to the compliance date for the energy
conservation standard. 75 FR 21981.
---------------------------------------------------------------------------

On December 17, 2012, DOE published a final rule in the Federal
Register that established a new efficiency metric for gas-fired pool
heaters, ``integrated thermal efficiency.'' 77 FR 74559, 74565
(``December 2012 TP final rule''). The integrated thermal efficiency
(TE<INF>I</INF>) metric built on the existing thermal efficiency metric
for measuring active mode energy efficiency, and also accounts for the
energy consumption during standby mode and off mode operation. DOE
stated in the December 2012 TP final rule that for purposes of
compliance with the energy conservation standard, the test procedure
amendments related to standby mode and off mode (i.e., integrated
thermal efficiency) are not required until the compliance date of the
next standards final rule, which addresses standby and off mode. 77 FR
74559, 74559.
On January 6, 2015, DOE published a final rule pertaining to its
test procedures for direct heating equipment (``DHE'') and consumer
pool heaters. 80 FR 792 (``January 2015 TP final rule''). In that final
rule, DOE established test methods for measuring the integrated thermal
efficiency of electric resistance and electric heat pump pool heaters.
To evaluate whether to propose amendments to the energy
conservation standard for consumer pool heaters, DOE issued a request
for information (``RFI'') in the Federal Register on March 26, 2015. 80
FR 15922 (``March

[[Page 22647]]

2015 RFI''). Through the March 2015 RFI, DOE requested data and
information pertaining to its planned technical and economic analyses
for DHE and consumer pool heaters. Among other topics, the March 2015
RFI sought data and information pertaining to electric pool heaters. 80
FR 15922, 15924-15925. Although the March 2015 RFI and the previous
energy conservation standards rulemaking (concluding with the April
2010 final rule) included both DHE and consumer pool heaters, DOE has
elected to review its energy conservation standards for each of these
products separately.\16\
---------------------------------------------------------------------------

\16\ The rulemaking docket for DHE can be found at:
<a href="http://www.regulations.gov/#!docketDetail">www.regulations.gov/#!docketDetail</a>;D=EERE-2016-BT-STD-0007.
---------------------------------------------------------------------------

DOE subsequently published a notice of data availability (``NODA'')
in the Federal Register on October 26, 2015, which announced the
availability of its analyses for electric pool heaters. 80 FR 65169
(``October 2015 NODA''). The purpose of the October 2015 NODA was to
make publicly available the initial technical and economic analyses
conducted for electric pool heaters, and present initial results of
those analyses to seek further input from stakeholders. DOE did not
propose new or amended standards for consumer pool heaters at that
time. The initial technical support document (``TSD'') and accompanying
analytical spreadsheets for the October 2015 NODA provided the analyses
DOE undertook to examine the potential for establishing energy
conservation standards for electric pool heaters and provided
preliminary discussions in response to a number of issues raised by
comments to the March 2015 RFI. It described the analytical methodology
that DOE used and each analysis DOE had performed.
In response to the publication of the March 2015 RFI, DOE received
seven comments from interested parties regarding DOE's analytical
approach pertaining to both electric and gas-fired pool heaters. The
March 2015 RFI comments relating to electric pool heaters were
addressed in chapter 2 of the October 2015 NODA TSD. DOE received nine
comments in response to the October 2015 NODA. Commenters on the March
2015 RFI and October 2015 NODA are listed in Table II.2 of this
document. The comments received in response to October 2015 NODA, as
well as those comments received in response to the March 2015 RFI not
previously addressed in the October 2015 NODA, are discussed in the
appropriate sections of this document.

Table II.2--Interested Parties Providing Written Comment in Response to
the March 2015 RFI and/or October 2015 NODA
------------------------------------------------------------------------
Name(s) Commenter type * Acronym
------------------------------------------------------------------------
Association of Pool and Spa TA APSP and IHTA.
Professionals and
International Hot Tub
Association (Joint Comment).
Appliance Standard Awareness EA ASAP and NRDC.
Project and Natural Resources
Defense Council (Joint
Comment).
Appliance Standard Awareness EA ASAP et al.
Project, Natural Resources
Defense Council, Alliance to
Save Energy, American Council
for an Energy-Efficient
Economy, and National
Consumer Law Center (Joint
Comment).
Laclede Group................. U Laclede.
National Propane Gas U NPGA.
Association.
Air-Conditioning, Heating and TA AHRI.
Refrigeration Institute.
Edison Electric Institute..... U EEI.
California Investor Owned U CA IOUs.
Utilities.
Adriana Murray................ I Murray.
Jeffery Tawney................ I Tawney.
Raypak, Inc................... M Raypak.
Lochinvar, LLC................ M Lochinvar.
Coates Heater Manufacturing M Coates.
Co., Inc.
------------------------------------------------------------------------
* EA: Efficiency/Environmental Advocate; I: Individual; M: Manufacturer;
TA: Trade Association; U: Utility or Utility Trade Association.

A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\17\
---------------------------------------------------------------------------

\17\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for pool heaters. (Docket No. EERE-
2021-BT-STD-0020, which is maintained at <a href="http://www.regulations.gov">www.regulations.gov</a>). The
references are arranged as follows: (Commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------

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. Section 6(d)(2) of appendix A
specifies that the length of the public comment period for a NOPR will
vary depending upon the circumstances of the particular rulemaking, but
will not be less than 75 calendar days. For this NOPR, DOE has opted to
instead provide a 60-day comment period. As stated, DOE requested
comment in the March 2015 RFI on the technical and economic analyses
and provided stakeholders a 30-day comment period. 80 FR 15922.
Additionally, DOE provided a 45-day comment period for the October 2015
notice of data availability 80 FR 65169. DOE has relied on many of the
same analytical assumptions and approaches as used in the preliminary
assessment presented in the notice of data availability and has
determined that a 60-day comment period in conjunction with the prior
comment periods provides sufficient time for interested parties to
review the proposed rule and develop comments.

III. General Discussion

DOE developed this proposal after considering written comments,
data, and information from interested parties that represent a variety
of interests. The following discussion addresses issues raised by these
commenters.

A. Product Classes and Scope of Coverage

When evaluating and establishing energy conservation standards, DOE

[[Page 22648]]

divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In determining whether a performance-related
feature justifies a different standard, DOE must consider such factors
as the utility of the feature to the consumer and other factors DOE
determines are appropriate. (42 U.S.C. 6295(q)(1))
This NOPR covers consumer ``pool heaters'' defined as an appliance
designed for heating nonpotable water contained at atmospheric
pressure, including heating water in swimming pools, spas, hot tubs and
similar applications. 10 CFR 430.2. The scope of coverage and product
classes for this NOPR are discussed in further detail in section IV.A.1
of this NOPR.

B. Test Procedure

EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE's
current energy conservation standards for consumer pool heaters are
expressed in terms of thermal efficiency. See 10 CFR 430.32(k)(2). As
stated in section II.A, DOE's test procedure for consumer pool heaters
is found at appendix P.
As discussed in section II of this document, EISA 2007 amended EPCA
to require DOE to amend its test procedures for covered consumer
products generally to include measurement of standby mode and off mode
energy consumption. (42 U.S.C. 6295(gg)(2)(A)) The test procedure
applicable to fossil fuel-fired pool heaters, as amended in the
December 2012 TP final rule, relies on the TE<INF>I</INF> metric, which
accounts for energy consumption during active mode operation (sections
2.1.1, 3.1.1, and 4.1.1 of appendix P) and standby mode (sections 2.2,
3.2, and 4.2 of appendix P) and off mode operation (sections 2.3, 3.2,
and 4.3 of appendix P), as required by EISA 2007. 77 FR 74559, 74572.
See also, 77 FR 74559, 74564-74565.
The DOE test procedure for electric resistance and electric heat
pump pool heaters incorporates by reference Air-Conditioning, Heating,
and Refrigeration Institute (``AHRI'') Standard 1160-2009,
``Performance Rating of Heat Pump Pool Heaters'' (``AHRI 1160'') and
American National Standards Institute (``ANSI'')/American Society of
Heating, Refrigerating, and Air-Conditioning Engineers (``ASHRAE'')
Standard 146-2011, ``Method of Testing and Rating Pool Heaters''
(``ASHRAE 146''). The procedures referenced in AHRI 1160 and ASHRAE 146
are used to determine the active mode energy use for electric
resistance (sections 2.1.2, 3.1.2, and 4.1.2 of appendix P) and
electric heat pump pool heaters (sections 2.1.3, 3.1.3, and 4.1.3 of
appendix P). Standby mode and off mode energy use are also recorded
using the same procedures used for fossil-fuel fired pool heaters
(sections 2.2, 3.2, and 4.2 and 2.3, 3.2, and 4.3 of appendix P,
respectively). The active mode, standby mode, and off mode energy use
is then combined into the TE<INF>I</INF> metric (section 5 of appendix
P).
In this document, DOE is proposing new and amended energy
conservation standards for consumer pool heaters. To the extent DOE is
also proposing amendments to the test procedure, such proposed
amendments are limited to those necessary to accommodate the proposed
definitions and the proposed product classes. As discussed further in
sections III.F.2 and IV.A.1 of this document, DOE is proposing to amend
appendix P to add definitions for active electrical power, input
capacity, and output capacity, add a calculation to determine the
output capacity for electric pool heaters, and clarify the calculation
of input capacity for fossil fuel-fired pool heaters. The proposed
amendments to appendix P, if made final, would not impact how the test
procedure is conducted in terms of the measurements taken, but rather
the additional provisions use existing measurements to calculate the
values necessary for comparing product efficiency to the proposed
standards.
In response to the March 2015 RFI and October 2015 NODA, DOE
received several comments from stakeholders relating to the consumer
pool heater test procedure, which DOE will consider further in the next
revision of its consumer pool heater test procedure.

C. Technological Feasibility

1. General
In evaluating potential amendments to energy conservation
standards, DOE conducts a screening analysis based on information
gathered on all current technology options and prototype designs that
could improve the efficiency of the products or equipment that are the
subject of the rulemaking. As the first step in such an analysis, DOE
develops a list of technology options for consideration in consultation
with manufacturers, design engineers, and other interested parties.
Sections 6(c)(1), (2) of 10 CFR part 430, subpart C, appendix A. DOE
then determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available products or in working prototypes to be
technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of appendix A
to part 430, subpart C.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
Practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A to part 430
subpart C. Section IV.B of this document discusses the results of the
screening analysis for consumer pool heaters, particularly the designs
DOE considered, those it screened out, and those that are the basis for
the standards considered in this rulemaking. For further details on the
screening analysis for this rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for consumer
pool heaters, using the design parameters for the most efficient
products available on the market or in working prototypes. The max-tech
levels that DOE determined for this rulemaking are described in section
IV.C.1.c of this document and in chapter 5 of the NOPR TSD.

D. Energy Savings

1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to consumer pool heaters purchased
in the 30-year period that begins in the first full year of compliance
with the proposed standards (2028-2057).\18\ The savings

[[Page 22649]]

are measured over the entire lifetime of consumer pool heaters
purchased in the previous 30-year period. DOE quantified the energy
savings attributable to each TSL as the difference in energy
consumption between each standards case and the no-new-standards case.
The no-new-standards case represents a projection of energy consumption
that reflects how the market for a product would likely evolve in the
absence of new or amended energy conservation standards.
---------------------------------------------------------------------------

\18\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for consumer pool heaters. The NIA spreadsheet model
(described in section IV.H of this document) calculates energy savings
in terms of site energy, which is the energy directly consumed by
products at the locations where they are used. For electricity, DOE
reports national energy savings in terms of primary energy savings,
which is the savings in the energy that is used to generate and
transmit the site electricity. For natural gas, the primary energy
savings are considered to be equal to the site energy savings. DOE also
calculates NES in terms of full-fuel-cycle (``FFC'') energy savings.
The FFC metric includes the energy consumed in extracting, processing,
and transporting primary fuels (i.e., coal, natural gas, petroleum
fuels), and thus presents a more complete picture of the impacts of
energy conservation standards.\19\ DOE's approach is based on the
calculation of an FFC multiplier for each of the energy types used by
covered products or equipment. For more information on FFC energy
savings, see section IV.H.1 of this document.
---------------------------------------------------------------------------

\19\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
To adopt standards for a covered product, DOE must determine that
such action would result in ``significant'' energy savings. (42 U.S.C.
6295(o)(3)(B))) Although the term ``significant'' is not defined in the
EPCA, the U.S. Court of Appeals, for the District of Columbia Circuit
in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373
(D.C. Cir. 1985), opined that Congress intended ``significant'' energy
savings in the context of EPCA to be savings that were not ``genuinely
trivial.''
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.\20\ For
example, the United States has now rejoined the Paris Agreement and
will exert leadership in confronting the climate crisis. 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 energy infrastructure can be more pronounced than
products with relatively constant demand. In evaluating the
significance of energy savings, DOE considers differences in 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.
---------------------------------------------------------------------------

\20\ A numeric threshold for determining the significance of
energy savings was established in a final rule published on February
14, 2020 (85 FR 8626, 8670), but was subsequently eliminated in a
final rule published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

Accordingly, DOE evaluated the significance of energy savings on a
case-by-case basis. As discussed in section V.C of this document, DOE
is proposing to adopt TSL 5, which would save an estimated 0.49 quads
of energy (FFC). DOE has initially determined the energy savings for
the TSL proposed in this proposed rulemaking are nontrivial, and,
therefore, DOE considers them ``significant'' within the meaning of 42
U.S.C. 6295(o)(3)(B).

E. Economic Justification

1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts a MIA, as discussed in section IV.J of this
document. DOE first uses an annual cash-flow approach to determine the
quantitative impacts. This step includes both a short-term assessment--
based on the cost and capital requirements during the period between
when a regulation is issued and when entities must comply with the
regulation--and a long-term assessment over a 30-year period. The
industry-wide impacts analyzed include (1) INPV, which values the
industry on the basis of expected future cash flows, (2) cash flows by
year, (3) changes in revenue and income, and (4) other measures of
impact, as appropriate. Second, DOE analyzes and reports the impacts on
different types of manufacturers, including impacts on small
manufacturers. Third, DOE considers the impact of standards on domestic
manufacturer employment and manufacturing capacity, as well as the
potential for standards to result in plant closures and loss of capital
investment. Finally, DOE takes into account cumulative impacts of
various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of

[[Page 22650]]

values, with probabilities attached to each value.
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
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first full year of compliance with
new or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.D of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (``DOJ'') provide its determination on this issue. DOE will
publish and respond to the Attorney General's determination in the
final rule. DOE invites comment from the public regarding the
competitive impacts that are likely to result from this proposed rule.
In addition, stakeholders may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. As part of the analysis of the need for national
energy and water conservation, DOE conducts an emissions analysis to
estimate how potential standards may affect these emissions, as
discussed in section IV.K of this document; the estimated emissions
impacts are reported in section V.B.7 of this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.'' No other factors were considered in this analysis.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE routinely conducts an economic analysis that considers
the full range of impacts to consumers, manufacturers, the Nation, and
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable presumption payback calculation
is discussed in section IV.F.9 of this document.

F. Other Issues

1. Regulatory Approach for Consumer Pool Heaters
In response to the March 2015 RFI, EEI stated that if DOE intends
to establish new energy efficiency standards for electric resistance
pool heaters and electric heat pump pool heaters, it must follow the
process used by DOE when considering whether to include a product as a
covered product under EPCA. (EEI, No. 6 at p. 2) In response, DOE notes
that the December 11, 2009 NOPR that preceded the April 2010 final rule
explained in detail that the definition of ``pool heater'' in EPCA
covers both gas-fired pool heaters and electric pool heaters, including
heat pump pool heaters. 74 FR 65852, 65866-65867. And, as noted
previously, DOE has established a test procedure for electric pool
heaters and is now proposing standards in this document.
In the October 2015 NODA, DOE requested comment on its
determination

[[Page 22651]]

to forgo a preliminary analysis for gas-fired pool heaters and noted
that interested parties will have the opportunity to comment on DOE's
analyses for gas-fired pool heaters during the next phase of the
analysis. 80 FR 65169, 65171. In response, NPGA and EEI argued that DOE
should publish a NODA for gas-fired pool heaters in order to provide
the public with equal opportunities to provide comments for both
products. (NPGA, No. 15 at p. 2; EEI, No. 21 at p. 2)
In response to these comments, DOE notes that the analysis
conducted for gas-fired pool heaters in this proposed rulemaking
follows similar methodologies to those presented and used in the April
2010 final rule. Stakeholders were informed that the analysis
methodology employed in this proposed determination would be based on
the prior rulemaking. As such, DOE determined that a preliminary
analysis was not necessary for gas-fired pool heaters. Interested
parties have an opportunity to comment on the analysis during the
course of this proposed rulemaking.
Laclede stated that it opposes any limitation of minimum efficiency
standards for consumer pool heaters to those fueled by natural gas and
propane. (Laclede Group, No. 17 at p. 3) As noted previously, DOE is
proposing to adopt the TE<INF>I</INF> metric for gas-fired pool heater
standard, as well as proposing to establish a new standard for electric
pool heaters, in this document.
The CA IOUs encouraged DOE to establish standards for standby and
off mode energy consumption separately from thermal efficiency, because
establishing a requirement for an integrated thermal efficiency metric
may lead to the standby and off mode energy consumption not being
considered by manufacturers, as they are small relative to overall
consumer pool heater energy consumption. The CA IOUs added that
establishing separate standby and off mode requirements and thermal
efficiency requirements will ensure that seasonal off switches remain
on most consumer pool heaters. (CA IOUs, No. 20 at p. 3) In response,
DOE notes that it is required by EISA 2007 to include the standby and
off mode energy consumption in the test procedure of all covered
products unless such an integrated test procedure is technically
infeasible for a covered product. (42 U.S.C. 6295(gg)(2)(A)) DOE must
prescribe separate standby mode and off mode energy use test procedure
if an integrated test procedure is deemed technically infeasible. (42
U.S.C. 6295(gg)(2)(A)(ii)) DOE notes that such determinations are based
on the technical characteristics of a product and, as such, are product
specific. In the case of consumer pool heaters, in the December 2012 TP
final rule DOE determined that the inclusion of the standby and off
mode energy use into an integrated metric would provide a measurable
performance differentiation and concluded that an integrated metric is
technically feasible. 77 FR 74559, 74564 (December 17, 2012). DOE
disagrees with the CA IOUs' assertion that the integrated thermal
efficiency may lead to standby and off mode energy consumption not
being considered by manufacturers. DOE has initially found that the
presence of a seasonal off switch improves the integrated thermal
efficiency and has included it as a technology option in its analysis.
Standby and off mode energy consumption may have a large impact on the
integrated thermal efficiency, primarily due to the large number of
operational hours in standby and off modes as compared to active mode.
For instance, the standby fuel consumption of a pilot light on a gas-
fired pool heater has a dramatic impact on its integrated thermal
efficiency. Likewise, DOE estimates that for a heat pump pool heater
inclusion of the standby and off mode energy consumption can reduce the
overall efficiency by as much as 8 percent.
2. Certification and Enforcement
DOE reviewed its certification and enforcement provisions as they
pertain to consumer pool heaters and proposes several provisions to
clarify its procedures for gas-fired pool heaters.
DOE proposes to harmonize its terminology related to the capacity
of consumer pool heaters as it relates to certification. For gas-fired
pool heaters, DOE proposes to use the term ``input capacity'' in its
provisions. DOE notes that input capacity is already certified for
basic models of gas-fired pool heaters and DOE's proposed revisions to
its regulations are a clarification only. If standards for gas-fired
pool heaters are adopted via this proposed rulemaking, DOE would
consider requirements for reporting and certifying to TE<INF>I</INF> in
lieu of TE in a separate rulemaking.
If standards for electric pool heaters are adopted via this
rulemaking, DOE would consider requirements for reporting and
certifying active electrical power (as applicable) along with the
representative value for integrated thermal efficiency in a separate
rulemaking.
To provide clarity on how values would be determined for
certification, DOE also proposes clarifications in its test procedure
found in appendix P by adding definitions for the terms ``input
capacity'' (Q<INF>IN</INF>), ``active electrical power'' (PE), and
``output capacity'' (Q<INF>OUT</INF>) and identifying which measured
variables in the test procedure represent these characteristics.
Specifically, DOE proposes to: Use values measured during the active
mode test described in Section 2.10.1 of ANSI Z21.56 (i.e., heating
value times correction factor times the quantity of fossil-fuel used
divided by the length of the test) to determine the input capacity of a
fossil fuel-fired water heater, as this calculation was not stated
clearly within appendix P; to clarify that active electrical power is
represented by the variable PE; and to provide a calculation for output
capacity so the product class for an electric pool heater can be
appropriately determined.
Also, DOE proposes that for enforcement testing, the input capacity
or active electrical power (as applicable) would be measured pursuant
to appendix P and compared against the rated value certified by the
manufacturer. If the measured input capacity or active electrical power
(as applicable) is within <plus-minus>2 percent of the certified value,
then DOE would use the certified value when determining the applicable
standard. The <plus-minus>2 percent threshold is already used \21\
within the DOE enforcement provisions and test procedures as a
reasonable range for input capacity to account for manufacturing
variations that may affect the input capacity.
---------------------------------------------------------------------------

\21\ For example, the enforcement provisions for commercial
water heating equipment, at 10 CFR 429.134(n), requires that the
tested input rate be within 2 percent of the certified rated input.
---------------------------------------------------------------------------

During enforcement testing for a gas-fired pool heater, if the
measured input capacity is not within <plus-minus>2 percent of the
certified value, then DOE would follow these steps to attempt to bring
the fuel input rate to within <plus-minus>2 percent of the certified
value. First, DOE would attempt to adjust the gas pressure in order to
increase or decrease the input capacity as necessary. If the input
capacity is still not within <plus-minus>2 percent of the certified
value, DOE would then attempt to modify the gas inlet orifice (i.e.,
drill) if the unit is equipped with one. Finally, if these measures do
not bring the input capacity to within <plus-minus>2 percent of the
certified value, DOE would use the mean measured input capacity (either
for a single unit sample or the average for a multiple unit sample)
when determining the applicable standard for the basic model.

[[Page 22652]]

For an electric pool heater, DOE would not take any steps to modify
the unit to bring the active electrical power of the unit within the
<plus-minus>2 percent threshold. Rather, if the active electrical power
is not within <plus-minus>2 percent of the certified value, DOE would
use the measured active electrical power (either for a single unit
sample or the average for a multiple unit sample) when determining the
applicable standard for the basic model. DOE proposes this verification
process to provide manufacturers with additional information about how
DOE will evaluate compliance.
DOE requests comment on the proposal to add to its enforcement
provisions to use a <plus-minus>2 percent threshold on the certified
value of input capacity or active electrical power (as applicable) when
determining the applicable energy conservation standard for the basic
model.
In response to the October 2015 NODA, AHRI expressed concern
regarding the representation of the integrated thermal efficiency
values. AHRI acknowledged that the inclusion of the standby and off
mode consumptions in the TE<INF>I</INF> calculation results in
percentages that are lower than the coefficient of performance
(``COP'') equivalent, but suggested that the relative scale of the
ratings has been lost in this process. AHRI suggested that for products
where the efficiency ratings are less than 100 percent, a change of one
or two percentage points may make a difference. However, for products
such as heat pump pool heaters with efficiency ratings that exceed 300
percent,\22\ a difference of 1 or 2 points is inconsequential. (AHRI,
No. 16 at p. 3)
---------------------------------------------------------------------------

\22\ Heat pump pool heaters move heat from the ambient air and
to the pool water instead of heating the pool water directly, as is
done with electric resistance pool heaters. Heat pumps move heat as
opposed to generating heat, so a relatively small amount of energy
is required to provide a large amount of heat.
---------------------------------------------------------------------------

In response, in the context of an initial analysis, DOE used the
test procedure equations in appendix P to arrive at the analyzed
efficiency levels examined in the NODA. See chapter 5 of the NODA TSD.
For this NOPR, however, DOE proposes capacity-dependent standards as
described in section IV.C.1 of this document. It is important to
preserve a higher level of precision in the test procedure and
certification criteria because the evaluated standards are continuous
functions that vary greatly dependent on capacity of the pool heater
(input capacity or active electrical power, as applicable). In order to
clarify this precision, DOE would consider rounding requirements for
consumer pool heater in a separate rulemaking addressing certification
reports.
In response to the March 2015 RFI, Lochinvar and Raypak expressed
concern that the use of the integrated thermal efficiency metric would
reduce the efficiency ratings for consumer pool heaters. (Lochinvar,
No. 2 at p. 2; Raypak, No. 4 at p. 2) Lochinvar highlighted that the
small reduction in the efficiency rating would impose a significant
burden on manufacturers who will be required to assign new model
numbers to all products due to the efficiency reduction. (Lochinvar,
No. 2 at p. 2) AHRI requested that DOE clarify whether manufacturers
will be required to change model numbers when implementing the new
efficiency metric. (AHRI, No. 7 at p. 2) Raypak requested clarification
on how DOE will address products that currently meet the minimum 82%
thermal efficiency requirement but would no longer meet the minimum
standard. (Raypak, No. 4 at p. 2)
In response, DOE first clarifies that specifying amended energy
conservation standards for consumer pool heaters in terms of
TE<INF>I</INF> rather than in terms of TE would not require new basic
model numbers. Were certification to TE<INF>I</INF> required, pursuant
to 10 CFR 429.12(b)(7), manufacturers may submit updated or corrected
certification information for basic models. Therefore, at such time as
certification were required using TE<INF>I</INF> manufacturers could
submit an updated certification report with the TE<INF>I</INF> for a
given basic model rather than assign a new basic model number upon the
compliance date of amended energy conservation standards.
Regarding the reduction in efficiency ratings for models rated
using the TE<INF>I</INF> metric relative to the TE metric, DOE
accounted for the differences between the metrics in its analysis. DOE
examined efficiency levels, including the baseline efficiency level
corresponding to the current energy conservation standards, in terms of
TE<INF>I</INF> that account for to the inclusion of standby mode and
off mode energy consumption and electrical energy consumption that will
cause the TE<INF>I</INF> value to be lower than the TE value of a given
model. See section IV.C.1 for discussion of the TE<INF>I</INF>
efficiency levels analyzed. Furthermore, EPCA requires that when a test
procedure amendment changes the measured energy efficiency, models in
use before the date on which the amended energy conservation standard
becomes effective that comply with the energy conservation standard
applicable to such covered products on the day before such date shall
be deemed to comply with the amended energy conservation standard. (42
U.S.C. 6293(e)(3))
DOE seeks comment on its proposed certification and enforcement
provisions and clarifications.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to consumer pool heaters. Separate subsections
address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The NIA uses a second spreadsheet set
that provides shipments projections and calculates national energy
savings and net present value of total consumer costs and savings
expected to result from potential energy conservation standards. DOE
uses the third spreadsheet tool, the Government Regulatory Impact Model
(``GRIM''), to assess manufacturer impacts of potential standards.
These three spreadsheet tools are available on the DOE website for this
proposed rulemaking: <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=44&action=viewcurrent">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=44&action=viewcurrent</a>.
Additionally, DOE used output from the latest version of the Energy
Information Administration's (``EIA's'') Annual Energy Outlook
(``AEO'') 2020, a widely known energy projection for the United States,
for the emissions and utility impact analyses.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends; and (6) technologies or design options
that could improve the energy efficiency of consumer pool heaters. The

[[Page 22653]]

findings of the market assessment inform downstream analyses, such as
the engineering analysis and LCC analysis, and are presented in detail
in chapter 3 of the NOPR TSD. In addition, chapter 3 of the TSD
includes a detailed discussion of technology options for improving the
energy efficiency of consumer pool heaters; the key findings and
updates to the technology assessment are summarized in the following
section.
1. Scope of Coverage and Product Classes
Under EPCA, pool heaters (which include electric pool heaters, and
gas-fired pool heaters, and oil-fired pool heaters) are covered
products. (42 U.S.C. 6292(a)(11)) EPCA defines ``pool heater'' as an
``appliance designed for heating nonpotable water contained at
atmospheric pressure, including heating water in swimming pools, spas,
hot tubs and similar applications.'' (42 U.S.C. 6291(25)) However,
energy conservation standards have only been established for gas-fired
pool heaters.\23\ For this proposed rulemaking, DOE proposes to
establish additional product classes for electric pool heaters,
establish energy conservation standards for electric pool heaters, and
for gas-fired pool heaters, to translate the existing standard from the
TE metric to an equivalent level in terms of the TE<INF>I</INF> metric
and to amend the energy conservation standards. DOE has tentatively
determined not to analyze potential standards for oil-fired pool
heaters based on the understanding that such standards would result in
minimal energy savings. DOE also did not perform energy conservation
standards analysis for electric spa heaters as DOE was unable to
identify technology options available to improve the efficiency of such
products. Accordingly, DOE is not proposing amended standards for these
products in this NOPR.
---------------------------------------------------------------------------

\23\ EPCA prescribed a minimum thermal efficiency of pool
heaters and initially only defined thermal efficiency of pool
heaters in the context of test conditions for gas-fired pool
heaters. (See 42 U.S.C. 6295(e)(2) and 42 U.S.C. 6291(26))
---------------------------------------------------------------------------

In the March 2015 RFI, DOE noted that oil-fired pool heaters have
an extremely small market share and requested comment on the potential
energy savings that could result from energy conservation standards for
oil-fired pool heaters. 80 FR 15922, 15925. In response, Raypak and
AHRI indicated that there is little opportunity for savings. (Raypak,
No. 4 at p. 3; AHRI, No. 7 at p. 3) AHRI noted that they only knew of
one oil-fired pool heater on the market currently. (AHRI, No. 7 at p.
3) EEI suggested that DOE should analyze oil-fired pool heaters if they
have significant market share (i.e., greater than 2%) in order to
maintain fuel and market neutrality. (EEI, No. 6 at p. 4) For this
NOPR, DOE tentatively determined not to analyze potential standards for
oil-fired pool heaters based on its previous understanding that the
market for oil-fired pool heaters is extremely limited and, thus, any
standards would be unlikely to result in significant energy savings.
DOE's market research and the comments from AHRI and Raypak indicate
that oil-fired pool heaters comprise a very small share of the consumer
pool heater market. DOE does not anticipate a significant number of
consumers would choose an oil-fired pool heater as a substitute for a
gas-fired or electric pool heater due to the high first cost associated
with installing a fuel oil tank, and the ongoing cost of fuel oil for
pool heating.
In response to the March 2015 RFI, AHRI suggested that DOE limit
the scope to less than 400,000 Btu/h for gas- and oil-fired pool
heaters and less than or equal to 140,000 Btu/h for heat pump pool
heaters to make a clear distinction between residential and commercial
products. (AHRI, No. 7 at p. 2) Raypak stated that gas-fired pool
heaters typically range from 50,000 Btu/h to 400,000 Btu/h for
residential pools and commercial pool heaters typically range from
200,000 Btu/h to 4,000,000 Btu/hr. Raypak also stated that it is not
uncommon to see multiple smaller pool heaters used together instead of
utilizing a larger pool heater(s). (Raypak, No. 4 at p. 4)
EPCA places no capacity limit on the pool heaters it covers in
terms of its definition of ``pool heater.'' (42 U.S.C. 6291(25))
Furthermore, EPCA covers pool heaters as a ``consumer product,'' (42
U.S.C. 6291(2), 42 U.S.C. 6292(a)(11)) and defines ``consumer
product,'' in part, as an article that ``to any significant extent, is
distributed in commerce for personal use or consumption by
individuals.'' (42 U.S.C. 6291(1)) Standards established for pool
heaters as a consumer product under EPCA apply to any pool heater
distributed to any significant extent as a consumer product for
residential use, regardless of input capacity and including consumer
pool heater models that may also be installed in commercial
applications. DOE has initially concluded that further delineation by
adding an input capacity limit is not necessary. As discussed in the
April 2010 final rule, pool heaters marketed as commercial equipment
contain additional design modifications related to safety requirements
for installation in commercial buildings. 75 FR 20112, 20127. In that
final rule, DOE noted that this would include pool heating systems that
are designed to meet a high volume flow and are matched with a pump
from the point of manufacture to accommodate the needs of commercial
facilities. Id. DOE stated that manufacturers can distinguish those
units from pool heaters distributed to any significant extent as a
consumer product for residential use, regardless of input capacity. Id.
at 75 FR 20127-20128. Moreover, standards for gas-fired pool heaters
regardless of size have been in place since 1990, and to place a
capacity limit on standards now would result in backsliding for
products over the capacity limit, which would be contrary to the anti-
backsliding provision in EPCA. (42 U.S.C. 6295(o)(1))
In response to the March 2015 RFI, AHRI suggested that DOE consider
atmospheric gas-fired heaters separately from fan-assist gas-fired
heaters. Similarly, AHRI suggested that DOE consider condensing and
non-condensing products separately as well. (AHRI, No. 7 at p. 4)
EPCA requires that a rule prescribing an energy conservation
standard for a type (or class) of covered products must specify a level
of energy use higher or efficiency lower, than that which applies (or
would apply) for such type (or class) for any group of covered products
which have the same function or intended use, if the Secretary
determines that covered 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 from that which applies (or will apply) to other products
within such type (or class). (42 U.S.C. 6295(q)(1)) In making a
determination concerning whether a performance-related feature
justifies the establishment of a higher or lower standard, the
Secretary shall consider such factors as the utility to the consumer of
such a feature, and such other factors as the Secretary deems
appropriate. (Id.) DOE is not proposing to increase the stringency of
the standard for gas-fired pool heaters to a level that would be
unachievable by the gas-fired pool heaters described by AHRI. The gas-
fired pool heaters described by AHRI are subject to the current
standard and presently there are atmospheric, fan-assist, non-
condensing, and condensing models on the market in compliance with that

[[Page 22654]]

standard. As such, there is no need to evaluate in the present document
whether atmospheric, fan-assist, non-condensing, and/or condensing gas-
fired pool heaters provide a unique feature and if so whether such
feature justifies a different standard for gas-fired pool heaters.
In the March 2015 RFI, DOE requested comment on whether capacity or
other performance related features that may affect efficiency would
justify the establishment of consumer pool heater product classes that
would be subject to different energy conservation standards. 80 FR
15922, 15925. Specifically, DOE sought comment on whether heat pump
technology was a viable design for applications which typically utilize
electric resistance pool heaters.
The CA IOUs and ASAP et al. both encouraged DOE to regulate
electric pool heaters under a single product class, and to consider
heat pump technology as a design option for electric pool heaters. (CA
IOUs, No. 5 at p. 5 and No. 20 at p. 5; ASAP et al., No. 3 at p. 1-2)
Murray stated support for a uniform homogenous standard for all
consumer pool heaters. (Murray, No. 14 at p. 1) The CA IOUs further
noted that in DOE's residential water heater standard, electric
resistance and heat pump water heaters are combined into one product
class and are not treated separately. (CA IOUs, No. 5 at p. 5) The CA
IOUs encouraged DOE to investigate the national savings potential from
water heating in portable electric spas which is almost entirely
provided by electric resistance heating. (CA IOUs, No. 5 at p. 5)
EEI suggested that separate product classes should be established
for electric resistance pool heaters and heat pump pool heaters in
DOE's analysis, and AHRI recommended that each fuel type (gas,
electric, and heat pump) be analyzed separately. (EEI, No. 6 at p. 2;
AHRI, No. 7 at p. 2) EEI asserted that electric resistance pool heaters
and heat pump pool heaters are distinct products with different
characteristics and as such require different product classes. EEI
stated that key differences include space constraints and operational
considerations. (EEI, No. 6 at pp. 2-3)
AHRI and Raypak stated that heat pump technology is not a viable
design for all applications in which electric resistance pool heaters
are found. (AHRI, No. 7 at p. 3; Raypak, No. 4 at p. 2) The electric
resistance-type units are typically installed as a component into a
larger, more complex piece of equipment such as a spa or hot tub. AHRI
stated that heat pumps could not typically be installed in the same
housing. They further asserted that electric resistance pool heaters
are typically installed in indoor applications where heat pump
technology is not a cost-effective substitution. (AHRI, No. 7 at p. 3)
Coates stated that heat pump pool heaters have proven ineffective
in climates that do not have high temperature and high humidity, being
expensive and unable to perform as needed. Coates indicated that
electric resistance spa heaters range from 1.5 kW to 11 kW. Coates
added that heat pump pool heaters are usually not acceptable for spas
due to their slow heat-up time, high cost, and inability to heat during
the cool or cold months in northern climates. (Coates, No. 8 at p. 2)
In response to Murray's comment, DOE notes that, in evaluating and
establishing energy conservation standards, EPCA directs DOE to divide
covered products into classes based on the type of energy used. EPCA
also directs DOE to divide covered products into classes based on
capacity or other performance-related feature if such feature justifies
a different standard. (42 U.S.C. 6295(q))
DOE considered comments raised by stakeholders when considering
whether separate product classes should be evaluated in its analysis of
potential standards for electric resistance pool heaters and electric
heat pump pool heaters. DOE recognizes that that the performance of a
heat pump is dependent upon the air temperature and air humidity at
which it operates. However, DOE disagrees with Coates's assertion that
heat pump pool heaters are ineffective in colder climates. Although
heat pump pool heaters perform best when operating within an
environment with high air temperature and high air humidity, they are
nonetheless capable of operating effectively in cooler climates during
the swimming season. DOE is aware of consumer heat pump pool heaters
currently on the market with the capability of operating at below-
freezing temperatures. DOE recognizes that heat pump pool heaters may
have difficulty providing adequate heat to pools if operating during
the colder months in northern climates. Rare cases such as these could
be accommodated through the use of heat pump pool heaters that
incorporate electric resistance backup in their designs (as is done in
the case of some heat pump water heater designs \24\). Therefore, DOE
proposes to maintain a single product class for electric pool heaters.
---------------------------------------------------------------------------

\24\ DOE gave similar consideration to establishing a separate
product class for heat pump water heaters and consistent with the
proposal in this document, DOE determined that heat pump electric
water heaters do not warrant a separate product class. See, 75 FR
20112, 20135 (April 16, 2010).
---------------------------------------------------------------------------

For this analysis, DOE has tentatively determined to separate
certain electric pool heaters into an ``electric spa heaters'' product
class. ANSI/APSP/International Code Council (``ICC'') Standard 6-2013,
``American National Standard for Residential Portable Spas and Swim
Spas'' (ANSI 6) provides recommended minimum guidelines for the design,
equipment, installation, and use of residential portable spas and swim
spas. Spas and hot tubs come in many different configurations but are
distinguished in section 1 of ANSI 6 based on whether they are portable
or built-in and within the portable distinction whether they are self-
contained or non-self-contained. Lower capacity electric heaters used
to heat water in spas are a covered product by virtue of being within
EPCA's definition of pool heater. (42 U.S.C. 6291(25)) Electric spa
heaters are often incorporated into the construction of a self-
contained spa or hot tub, resulting in the heater performing its major
function (heating spa water) in a space constrained environment. These
space constraints preclude the use of higher efficiency technologies
(heat pump) and manufacturers instead rely on electric resistance
heating elements. DOE has initially determined that heat pump
technology is not a viable option for electric spa heaters designed for
use within a self-contained portable electric spa because the space
required for a heat pump impedes its incorporation into the
construction of a spa or hot tub. DOE has also initially determined
that heat pump technology is a viable option for heating a spa or hot
tub if the heater is separate from the construction of the hot tub or
spa (i.e., non-self-contained as defined in section 1 of ANSI 6). As a
result, DOE has separated electric spa heaters from the analysis of
electric pool heaters. The proposed definition of ``electric spa
heater'' distinguishes this product based on capacity and whether the
product is designed to be installed within a portable electric spa. The
proposed definitions for ``electric spa heater'' and ``portable
electric spa'' are presented later in this section.
Electric spa heaters rely on electric heating elements for which
there is currently negligible opportunity for efficiency gains.
Consequently, DOE did not perform energy conservation standards
analysis for electric spa heaters as DOE did not initially identify
technology options that could be implemented to improve the efficiency
of these products.
For the October 2015 NODA analysis, DOE defined electric spa
heaters to be

[[Page 22655]]

heaters that: (1) Have a rated output capacity of 11 kW (37,534 Btu/h)
or less; and (2) are factory- or field-assembled within the envelope of
a spa, hot tub, or pool as defined by 10 CFR 430.2. See chapter 3 of
the October 2015 NODA TSD. In the October 2015 NODA, DOE identified the
11 kW threshold as being a typical output capacity below which electric
resistance heaters are integrated in spas. Id. DOE tentatively used
this threshold in the October 2015 NODA analysis based on its
assessment of the market. The threshold was also suggested in response
to the March 2015 RFI by Coates, a manufacturer of electric resistance
spa and pool heaters. (Coates, No. 8 at p. 2) Table IV.1 lists the
product classes for consumer pool heaters outlined in Table 2.4.1 of
the October 2015 NODA TSD.

Table IV.1--October 2015 NODA Product Classes for Consumer Pool Heaters
------------------------------------------------------------------------
Analyzed in
Product class Additional description October 2015
NODA?
------------------------------------------------------------------------
Gas-fired Pool Heater......... ...................... No.
Electric Pool Heater.......... ...................... Yes.
Electric Spa Heater........... Output Capacity <=11 No.
kW; Assembled within
spa, hot tub, or pool
envelope.
------------------------------------------------------------------------

In response to the scope of coverage presented in the October 2015
NODA, AHRI stated that the analysis appears not to consider the market
segment \25\ that may require capacities much higher than the largest
heat pump pool heaters available on the market. AHRI stated that the
analysis must consider the entire current market for electric pool
heaters and should not establish an efficiency standard that will make
products unavailable for some segments of that market. AHRI recommended
DOE establish separate product classes for electric pool heaters based
on a capacity breakpoint. (AHRI, No. 16 at p. 1)
---------------------------------------------------------------------------

\25\ Very large pools or pool in colder climates. (AHRI, No. 16,
at p. 1)
---------------------------------------------------------------------------

DOE's review of the heat pump pool heater market found that most
models have output capacities less than 200,000 Btu/h, however, DOE did
find electric heat pump pool heaters with output capacities up to
500,000 Btu/h. Whereas gas-fired pool heaters are available with output
capacities approaching 4,100,000 Btu/h. Therefore, DOE agrees with
AHRI's comment that heat pump technology is not currently utilized to a
significant extent in the high capacity pool heater market segment. As
discussed in section IV.C.1 of this document, DOE is proposing capacity
dependent energy conservation standards for gas-fired and electric pool
heaters. Further, the estimated TE<INF>I</INF> values for the high
capacity heat pump pool heaters available on the market are greater
than the proposed efficiency levels discussed in section V.C,
therefore, there DOE has tentatively determined that it is not
currently necessary to establish separate product classes for electric
pool heaters based on a capacity breakpoint.
DOE requested comment regarding whether the product classes
outlined in the October 2015 NODA adequately describes the electric
pool heater market. See chapter 3 of the October 2015 NODA.
Several commenters agreed with DOE's position to exclude electric
spa heaters from the analysis. (CA IOUs, No. 20 at p. 6; APSP and IHTA
No. 18 at p. 1) APSP and AHRI agreed with DOE's assumption that heat
pump technology could not be implemented within a spa heater. (APSP and
IHTA No. 18 at p. 1; AHRI, No. 16 at p. 2) The CA IOUs encouraged DOE
to explore the energy savings potential from portable electric spas in
another rulemaking. (CA IOUs, No. 20 at p. 6)
AHRI agreed that the basic concept of the product classes is
adequate for the consumer pool heater market but suggested further
development be made to the electric spa heater definition. AHRI agreed
with the specification of a maximum output capacity as part of the
definition of the electric spa heater product class, noting that the 11
kW limit is reasonable for spa heaters. However, AHRI stated that the
second part of the definition (assembled within spa, hot tub, or pool
envelope) is not clear enough. AHRI noted that the definition appears
to exclude spa heaters that may be physically separate from the spa,
hot tub, or pool but which are required to heat water for those units.
AHRI suggested that either the specification of an ``envelope'' needs
to be described in greater detail, or such specification should be
reconsidered. (AHRI, No. 16 at p. 2)
DOE has considered AHRI's comment and agrees that the criterion
that an electric spa heater is shipped within the spa envelope may
cause confusion and issues for replacement electric spa heaters
intended for existing portable electric spas. Due to these concerns,
DOE has amended the envelope criterion in the definition of an electric
spa heater to include electric spa heaters that are designed to be
installed within a portable electric spa, which does not preclude
electric spa heaters that are sold and shipped outside of the envelope
of a spa, hot tub, or pool. The updated proposed definition is
presented later in this section of this document.
In response to the product classes presented in the October 2015
NODA, Tawney suggested that DOE set separate standards for electric
pool heaters that have both heating and cooling capabilities. Tawney
stated that the addition of reversing components creates a diminished
performance for all other components (i.e., the compressor, evaporator,
and condenser) and, therefore, requiring the minimum efficiency level
to be set equal for these two different types of products would create
design issues for the manufacturer and consumers. (Tawney, No. 13 at p.
1)
DOE recognizes that heat/cool heat pumps have reverse cycle
capabilities to provide the cooling function, and, theoretically,
manufacturers could design products intended for heating and cooling
differently from those intended for heating only (i.e., different size
heat exchanger coils). However, based on DOE's review of products
currently on the market, DOE does not expect the reverse cycle
capability would negatively impact the integrated thermal efficiency of
heat/cool heat pumps in heating mode. DOE examined parts diagrams found
in manufacturer literature of traditional heat pump pool heaters and
heat/cool heat pump models within the same product family which
revealed the addition of a reversing valve as the only differentiator
between the two products. DOE then compared the rated heating
efficiency of both models and found them to be identical in the
majority of cases, indicating that the presence of the reversing valve
and reverse cycle capability does not inherently reduce heating
performance. Therefore, DOE has tentatively determined that the
creation of a separate product classes for heat pump

[[Page 22656]]

pool heaters with cooling capability is not necessary.
DOE requests comment on its assumption that electric pool heaters
that have both heating and cooling capabilities do not suffer
diminished efficiency performance in heating mode.
DOE analyzed new and amended standards for gas-fired pool heaters
and electric pool heaters but did not analyze energy conservation
standards for electric spa heaters (i.e., electric pool heaters with
output capacity <= 11 kW that are designed to be installed in a
portable electric spa).
DOE requests comment on the product classes analyzed for this
proposed rulemaking.
DOE is proposing definitions for electric pool heaters, electric
spa heaters, gas-fired pool heaters, oil-fired pool heaters, and
portable electric spas to clarify its regulations as they apply to
consumer pool heaters. Based on comments received in response to the
October 2015 NODA, DOE refined its definition for electric spa heaters.
The proposed definitions are as follows:
Electric pool heater means a pool heater other than an electric spa
heater that uses electricity as its primary energy source.
Electric spa heater means a pool heater that (1) uses electricity
as its primary energy source; (2) has an output capacity (as measured
according to appendix P to subpart B of part 430) of 11 kW or less; and
(3) is designed to be installed within a portable electric spa.
Gas-fired pool heater means a pool heater that uses gas as its
primary energy source.
Oil-fired pool heater means a pool heater that uses oil as its
primary energy source.
Portable electric spa means a self-contained, factory-built spa or
hot tub in which all control, water heating and water circulating
equipment is an integral part of the product. Self-contained spas may
be permanently wired or cord connected.
DOE requests comment on the proposed definitions for electric pool
heater, electric spa heater, gas-fired pool heater, oil-fired pool
heater, and portable electric spa.
DOE also proposes to define output capacity and provide equations
for its calculation for electric pool and spa heaters in its test
procedure at appendix P. As described in section III.B of this
document, appendix P incorporates by reference ASHRAE 146. DOE's
proposed calculation for output capacity for an electric pool or spa
heater utilizes measurements already taken for other calculations in
appendix P and therefore DOE does not consider this provision to result
in any additional test procedure burden. DOE proposes to define the
output capacity for electric pool heaters and spa heaters as follows:
Output capacity for an electric pool or spa heater means the
maximum rate at which energy is transferred to the water.
DOE proposes separate equations for the calculation of output
capacity of an electric resistance pool heater and electric heat pump
pool heater. For electric pool heaters that rely on electric resistance
heating elements, DOE proposes that the output capacity be calculated
as:

Q<INF>OUT,ER</INF> = k * W * (T<INF>mo</INF> - T<INF>mi</INF>) * (60/
30)

where k is the specific heat of water, W is the mass of water collected
during the test, T<INF>mo</INF> is the average outlet water temperature
recorded during the primary test, T<INF>mi</INF> is the average inlet
water temperature record during the primary test, all as defined in
Section 11.1 of ASHRAE 146, and (60/30) is the conversion factor to
convert unit from per 30 minutes to per hour.
DOE proposes that the output capacity of an electric pool heater
that uses heat pump technology be calculated as:

Q<INF>OUT,HP</INF> = k * W * (T<INF>ohp</INF> - T<INF>ihp</INF>) * (60/
t<INF>HP</INF>)

where k is the specific heat of water, W is the mass of water collected
during the test, T<INF>ohp</INF> is the average outlet water
temperature during the standard rating test, T<INF>ihp</INF> is the
average inlet water temperature during the standard rating test, all as
defined in Section 11.2 of ASHRAE 146, and t<INF>HP</INF> is the
elapsed time of data recording during the thermal efficiency test on
electric heat pump pool heater, as defined in Section 9.1 of ASHRAE
146, in minutes.
DOE requests comment on its proposed definition for output
capacity, as well as its proposed calculations for determining the
output capacity of electric pool heaters.
2. Technology Options
In response to the March 2015 RFI, Coates stated their concern that
DOE used the term ``less efficient products, such as electric
resistance pool heaters'' and that the efficiency of electric pool and
spa heaters is very high (98 percent or higher). (Coates, No. 8 at p.
5) DOE agrees that electric resistance pool heaters have efficiencies
around 98 percent. However, the statement DOE made compares the
efficiency of electric resistance pool heaters to heat pump pool
heaters which have efficiencies greater than 100 percent. 80 FR 15922,
15929 (March 26, 2015). Therefore, electric resistance pool heaters are
less efficient than heat pump pool heaters.
In the October 2015 NODA market and technology analysis for
electric pool heaters, DOE identified eight technology options that
would be expected to improve the efficiency of electric pool heaters,
as measured by the DOE test procedure: Insulation improvements; control
improvements; heat pump technology; heat exchanger improvements (heat
pump); compressor improvements (heat pump); expansion valve
improvements (heat pump); fan improvements (heat pump); and off switch.
See section 3.3 of chapter 3 of the October 2015 NODA TSD.
DOE received no comments suggesting technology options be added to
those listed in the October 2015 NODA analysis for electric pool
heaters. In this NOPR analysis, DOE added switching mode power supply
to the list of technology options for electric pool heaters.
In the March 2015 RFI, DOE identified five technology options that
it expected to improve the efficiency of gas-fired pool heaters, as
measured by the DOE test procedure: Insulation improvements; control
improvements; improved heat exchanger design; condensing heat exchanger
technology; and electronic ignition systems. 80 FR 15922, 15925.
In response to the potential technology options identified for gas-
fired pool heaters in the March 2015 RFI, Raypak stated that improved
insulation, improved controls, and improved ignition systems are
currently widely used and have little opportunity to provide
improvements in thermal efficiency. (Raypak, No. at 4 at p. 3) AHRI
stated that improved controls are expected to have minimal or negative
impact on efficiency due to the large size of pools as modulating heat
is not an effective way to heat up pools. AHRI stated that most gas-
fired pool heaters on the market currently are equipped with electronic
ignition systems and the pilot light only comes on when heat is called.
AHRI also opined that condensing heat exchanger technology is not an
economically feasible option for gas-fired pool heaters due to the
relatively short burner operating hours. (AHRI, No. 7 at p. 3)
In response, DOE notes that in its review of the market and during
the engineering analysis (see section IV.C of this document), DOE
generally identifies technologies that are commonly incorporated at the
baseline efficiency level, as well as those typically implemented to
achieve higher efficiencies. In the technology assessment DOE
identifies all

[[Page 22657]]

technologies that are possibilities for improving efficiency, in the
event that any models do not already utilize them. DOE's engineering
analysis is based on the typical technology or combination of
technologies used to achieve each efficiency level, as observed in
products on the market.
For this NOPR analysis, DOE identified three more technology
options that would be expected to improve the integrated thermal
efficiency of gas-fired pool heaters as measured by the test procedure,
which were not listed in the March 2015 RFI. These technologies
include: Condensing pulse combustion, switch mode power supply, and
seasonal off switch.
After identifying all potential technology options for improving
the efficiency of consumer pool heaters, DOE performed the screening
analysis (see section IV.B of this document or chapter 4 of the TSD) on
these technologies to determine which could be considered further in
the analysis and which should be eliminated.

B. Screening Analysis

DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
projected compliance date of the standard, then that technology will
not be considered further.
(3) Impacts on product utility or product availability. If it is
determined that a technology would have a significant adverse impact on
the utility of the product for significant subgroups of consumers or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
(5) Unique-Pathway Proprietary Technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further, due to the potential for monopolistic concerns.
10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria. DOE did not receive any
comments from interested parties related to the screening analysis.
1. Screened-Out Technologies
DOE eliminated condensing pulse combustion from its analysis having
tentatively determined that it is not technologically feasible and not
practical to manufacture, install, and service. Although condensing
pulse combustion technology shows promising results in increasing
efficiency, it has not yet penetrated the consumer pool heater market,
and similar efficiencies are achievable with other technologies that
have already been introduced on the market.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.A.2 met
all five screening criteria to be examined further as design options in
DOE's NOPR analysis. In summary, DOE did not screen out the technology
options shown in Table IV.2 of this document and considers them as
design options in the engineering analysis.

Table IV.2--Technology Options Which Passed Screening Criteria
------------------------------------------------------------------------
Electric pool Gas-fired pool
Technology option heater heater
------------------------------------------------------------------------
Insulation improvements............... X X
Control improvements.................. X X
Heat pump technology.................. X ...............
Heat exchanger improvements........... X X
Expansion valve improvements.......... X ...............
Fan improvements...................... X ...............
Condensing heat exchanger............. ............... X
Electronic ignition systems........... ............... X
Switch mode power supply.............. X X
Seasonal off switch................... X X
------------------------------------------------------------------------

DOE has initially determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially-available products or commercially viable,
existing prototypes. DOE also finds that all of the remaining
technology options meet the other screening criteria (i.e., practicable
to manufacture, install, and service and do not result in adverse
impacts on consumer utility, product availability, health, or safety,
unique-pathway proprietary technologies). For additional details, see
chapter 4 of the NOPR TSD.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of consumer pool heaters.
There are two elements to consider in the engineering analysis; the
selection of efficiency levels to analyze (i.e., the ``efficiency
analysis'') and the determination of product cost at each efficiency
level (i.e., the ``cost analysis''). In determining the performance of
higher-efficiency products, DOE considers technologies and design
option combinations not

[[Page 22658]]

eliminated by the screening analysis. For each product class, DOE
estimates the baseline cost, as well as the incremental cost for the
product at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) Relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
In this proposed rulemaking, DOE relies on the efficiency-level
approach. For the October 2015 NODA, DOE identified the efficiency
levels for analysis based on a review of products on the market and
then, as described in section IV.C.2 of this document, used a cost-
assessment approach which includes product teardowns to determine the
technologies used at each efficiency level and the associated
manufacturing costs at those levels. See section 5.7 of chapter 5 of
the October 2015 NODA TSD.
DOE continued to use the same analytical approaches for this NOPR.
DOE received specific comments from interested parties on certain
aspects of the engineering analysis in response to the October 2015
NODA. A brief overview of the methodology, a discussion of the comments
DOE received, DOE's response to those comments, and any adjustments
made to the engineering analysis methodology or assumptions as a result
of those comments is presented in the sections below. See chapter 5 of
the NOPR TSD for additional details about the engineering analysis.
a. Efficiency Levels
As noted previously, for analysis of consumer pool heater
standards, DOE used an efficiency-level approach to identify
incremental improvements in efficiency for each product class. An
efficiency-level approach enabled DOE to identify incremental
improvements in efficiency for efficiency-improving technologies that
consumer pool heater manufacturers already incorporate in commercially
available models. After identifying efficiency levels for analysis, DOE
used a cost-assessment approach (section IV.C.2 of this document) to
determine the manufacturer production cost (``MPC'') at each efficiency
level identified for analysis.
Integrated thermal efficiency accounts for the fuel and electricity
consumption in active, standby, and off modes. However, at the time the
engineering analysis for this NOPR was performed, manufacturers had not
yet begun publishing the integrated thermal efficiency of their
products (there are no existing standards for electric pool heaters,
and standards for gas-fired pool heaters are currently in terms of
thermal efficiency as described in section III.B of this document).
Therefore, in the gathering of information to inform the engineering
analysis, DOE was limited to thermal efficiency in the case of gas-
fired pool heaters, and coefficients of performance (``COP'') (set
equal to thermal efficiency by the test procedure) in the case of heat
pump pool heaters. DOE then calculated the integrated thermal
efficiency by combining the thermal efficiency (as defined in section
5.1 of the DOE test procedure) of the product, with typical values for
active mode, standby mode, and off mode energy consumption. DOE derived
these typical values from test data and sought manufacturer feedback
during confidential manufacturer interviews to confirm that the values
were appropriate.
The energy consumption rate measurements that contribute to the
integrated thermal efficiency metric are presented in Table IV.3 of
this document, and vary by consumer pool heater type (i.e., electric
resistance, electric heat pump, and gas-fired). DOE notes that these
measurements also vary by efficiency level. The ``typical case'' energy
use assumptions used to determine the efficiency levels are presented
in greater detail in sections IV.C.1.b and IV.C.1.c of this document.

Table IV.3--Inputs to Integrated Thermal Efficiency by Consumer Pool
Heater Type
------------------------------------------------------------------------
Consumer pool heater type Inputs to TEI Description
------------------------------------------------------------------------
Electric Resistance Pool Et............... Thermal efficiency
Heater. (11.1 of ASHRAE
146).
PE............... Average annual
electrical energy
consumption.
EC............... Electrical
consumption in Btu
per 30 mins.
PW,SB............ Standby power
consumption rate.
PW,OFF........... Off power consumption
rate.
Heat Pump Pool Heater......... Et............... Thermal efficiency
(11.1 of ASHRAE
146).
PE............... Average annual
electrical energy
consumption.
Ec,hp............ Electrical
consumption during
test time.
tHP.............. Test time.
PW,SB............ Standby power
consumption rate.
PW,OFF........... Off power consumption
rate.
Gas-Fired Pool Heater......... Et............... Thermal efficiency
(2.10 of ANSI
Z21.56).
EC............... Electrical
consumption in Btu
per 30 mins.
QPR.............. Consumption rate of
pilot.
Qoff,R........... Off mode fuel
consumption rate.
PW,SB............ Standby power
consumption rate.
PW,OFF........... Off Power consumption
rate.
------------------------------------------------------------------------

[[Page 22659]]

The integrated thermal efficiency metric is the ratio of the
seasonal useful output of the consumer pool heater divided by the
annual input to the consumer pool heater. Based on manufacturer
interviews, DOE has tentatively determined that standby and off mode
electricity consumption do not increase as capacity increases. This
causes differences in the resulting integrated thermal efficiencies for
units at different capacities that have the same thermal efficiency and
same standby and off mode energy consumption. Lower capacity units will
have lower integrated thermal efficiency ratings due to standby and off
mode energy use comprising a larger share of the total energy use of
the product than for larger capacity units. To account for this,
instead of standards that are fixed integrated thermal efficiency
levels as presented in section 5.3 of chapter 5 of the October 2015
NODA TSD, DOE is proposing equation-based efficiency levels in which
the integrated thermal efficiency level is a function of the capacity
of the unit.
DOE developed these integrated thermal efficiency equations using a
similar methodology to the one used to develop the integrated thermal
efficiency levels in the October 2015 NODA analysis for electric pool
heaters. See section 5.3 of chapter 5 of the October 2015 NODA.
Specifically, DOE selected the efficiency levels based on thermal
efficiency, and then determined the typical values for all other energy
consumption rate values that contribute to the integrated thermal
efficiency metric (i.e., standby mode, off mode). DOE then calculated
the integrated thermal efficiency as a function of capacity by
utilizing these typical values for all efficiency levels other than the
max-tech level. As discussed further in section IV.C.1.c of this
document, the max-tech level is the maximum efficiency theoretically
possible and uses technologies (i.e., seasonal off switch and switch
mode power supply) that result in energy consumption rate values that
are lower than the typical values used for the other efficiency levels.
Additional information regarding the selection of efficiency levels
is provided in the following sections and in chapter 5 of the NOPR TSD.
b. Baseline Levels
For each product class, DOE generally selects a baseline model as a
reference point for each class, and measures changes resulting from
potential energy conservation standards against the baseline. The
baseline model in each product class represents the characteristics of
a product typical of that class (e.g., capacity, physical size).
Generally, a baseline model is one that just meets current energy
conservation standards, or, if no standards are in place, the baseline
is typically the most common or least efficient unit on the market.
DOE uses the baseline model for comparison in several phases of the
analyses, including the engineering analysis, LCC analysis, PBP
analysis, and NIA. To determine energy savings that will result from a
new or amended energy conservation standard, DOE compares energy use at
each of the higher energy efficiency levels to the energy consumption
of the baseline unit. Similarly, to determine the changes in price to
the consumer that will result from an amended energy conservation
standard, DOE compares the price of a baseline unit to the price of a
unit at each higher efficiency level. In the March 2015 RFI, DOE
requested information regarding typical energy use (fossil fuel and
electricity) in all modes, including standby and off modes for all
consumer pool heater types. 80 FR 15992, 15924.
Raypak responded that the typical fossil fuel energy use in standby
and off modes is zero because gas-fired pool heaters only fire when
there is a call for heat to maintain a set temperature. Raypak
commented that the electricity consumption is limited to standby and
off mode for all types of consumer pool heaters and that the magnitude
of these electricity consumption values may change slightly based on
the input capacity of the unit. (Raypak, No. 4 at p. 2)
DOE has found several consumer pool heaters on the market which
utilize standing pilots. These pilot lights operate when the consumer
pool heater is not in use and contribute to fossil fuel energy use in
standby mode. DOE does not disagree that electricity consumption may
change slightly based on input capacity but has tentatively determined
to use a single typical value for the various types of electrical
energy consumption based on feedback received during confidential
manufacturer interviews. Table IV.4 of this document presents the
baseline efficiency level identified for gas-fired pool heaters.
[GRAPHIC] [TIFF OMITTED] TP15AP22.001

Table IV.5 of this document presents the baseline efficiency level
identified for electric pool heaters. No comments were received in
response to the October 2015 NODA in regard to the baseline efficiency
level for electric pool heaters.

[[Page 22660]]

[GRAPHIC] [TIFF OMITTED] TP15AP22.002

Additional details on the selection of baseline models and the
development of the baseline efficiency equations may be found in
chapter 5 of the NOPR TSD.
c. Other Efficiency Levels
As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency model currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product.
Table IV.6 of this document shows the efficiency levels DOE
selected for the October 2015 NODA analysis. See section 5.3 of chapter
5 of the October 2015 NODA. As described previously in this section,
all else being equal, the integrated thermal efficiency metric is
expected to vary depending on a consumer pool heater's capacity. The
integrated thermal efficiencies listed in Table IV.6 are based on an
output capacity of 110,000 Btu/h. (Note, the large increase in
integrated thermal efficiency between EL 0 and EL 1 is the result of a
technology option change from electric resistance elements as the heat
source to a heat pump.)

Table IV.6--October 2015 NODA Efficiency Level for Electric Pool Heaters at Output Capacity of 110,000 Btu/h
----------------------------------------------------------------------------------------------------------------
Et (percent) PW,SB (W) * PW,OFF (W) * TEI **
Efficiency level (percent)
----------------------------------------------------------------------------------------------------------------
EL 0............................................ 99 1.2 1.2 99
EL 1............................................ 360 5.2 5.2 344
EL 2............................................ 520 5.2 5.2 486
EL 3............................................ 580 5.2 5.2 538
EL 4............................................ 600 5.2 5.2 556
EL 5............................................ 610 5.2 5.2 564
----------------------------------------------------------------------------------------------------------------
* Presented in terms of Btu/h in appendix P.
** Values are based on Et and assumptions for PW,SB and PW,OFF at left, and uses equation 5.4.3 in the DOE test
procedure found in appendix P.

DOE requested comment on the efficiency levels presented in the
October 2015 NODA analysis, including the typical standby and off mode
energy consumption of electric pool heaters.
In response to the October 2015 NODA analysis, AHRI stated that
many manufacturers have not measured the standby and off mode
consumption for many of their consumer pool heater models. Therefore,
AHRI stated that they are not able to address the ``typical'' values
used in the preliminary analysis. AHRI also stated that the efficiency
levels presented in the October 2015 NODA analysis were acceptable.
(AHRI, No. 16 at p. 2, 3)
In response to the efficiency levels presented in the October 2015
NODA for electric pool heaters ASAP and NRDC and CA IOUs encouraged DOE
to re-evaluate the max-tech level for electric pool heaters. The
commenters stated that the AHRI database includes models that exceed a
COP of 6.1, the level presented as max-tech in the October 2015 NODA.
The commenters stated that those units with a COP greater than 6.1 are
smaller in capacity than the representative unit size of 110,000 Btu/h.
(CA IOUs, No. 20 at p. 5; ASAP and NRDC, No. 19 at p. 2) CA IOUs stated
their belief that larger capacity units could achieve similarly high
COP levels. (CA IOUs, No. 20, at p. 5)
DOE recognizes that there are models on the market with higher COP
ratings than the assumed COP rating used in the max-tech energy level.
However, as noted by commenters, these units have a lower capacity than
DOE's representative capacity. DOE has not identified larger
residential heat pump pool heaters with a COP rating greater than 6.1
on the market or in prototypes. Smaller heat pump pool heaters with a
COP greater than 6.1 may not be representative of efficiency
improvements of which larger heat pump pool heaters are capable.
Therefore, DOE maintained the same COP max-tech level used in the
October 2015 NODA as an input to the integrated thermal efficiency
equation for this analysis.
ASAP and NRDC urged DOE to evaluate a level that incorporates
technology options presented in the October 2015 NODA TSD that may not
be present in currently available consumer pool heaters including
electronically commutated motor (``ECM'') fan motors (i.e., brushless
permanent magnet (``BPM'') motors),\26\ toroidal transformers, and an
off switch. (ASAP and NRDC, No. 19 at p. 3)
---------------------------------------------------------------------------

\26\ ``ECM'' refers to the constant-airflow BPM offerings of a
specific motor manufacturer. DOE refers to this technology using the
generic term, ``BPM motor.''
---------------------------------------------------------------------------

In response to these comments, DOE has incorporated standby and off
mode technology options at the max-tech level to decrease the standby
and off mode electricity consumption and thereby increase the
integrated thermal efficiency at that level. These technology options
include: Transformer improvements, switching mode power supply, and a
seasonal off switch.
As was noted in chapter 3 of the October 2015 NODA TSD, the
efficiency

[[Page 22661]]

of permanent split capacitor (``PSC'') motors is highest at a single
speed, with significant diminishing operation efficiency at other
speeds, whereas BPM motors are capable of maintaining a high operating
efficiency at multiple speeds. However, the energy savings associated
with this technology may be limited as heat pump pool heaters operate
at full capacity to satisfy the call for heat. As noted by ASAP and
NRDC, heat pump pool heaters on the market do not currently utilize BPM
fan motors. Therefore, DOE has not been able to test products in order
to determine the magnitude of efficiency improvement, if any, that
could be expected due to the incorporation of BPM motors.
DOE requests comment on the efficiency improvement expected from
replacing a PSC fan motor with a BPM fan motor in heat pump pool
heater.
AHRI stated that the use of straight (EL 1) or twisted (EL 2)
titanium tube coils are two different ways to get to the same end. AHRI
further commented that the two different design features described for
EL 1 and EL 2, respectively, do not inherently result in the
significantly different efficiencies estimated in the analysis. AHRI
stated that the efficiency that will result from the use of straight or
twisted titanium tubing will be based on the effectiveness of the
overall design of the heat exchanger; the twisted tube provides no
significant efficiency improvement of itself. (AHRI, No. 16 at pp. 3-4)
In response to AHRI's assertions, DOE notes that for electric pool
heaters it selected efficiency levels and units for teardown based on
the published coefficients of performance of models currently on the
market (as integrated thermal efficiency data were not yet available).
As shown in Table IV.7, the heat exchanger design of the model DOE
analyzed at EL 1 in the October 2015 NODA included two straight
titanium tube coils in submerged water tanks; at EL2, the model that
was analyzed had a heat exchanger consisting of a single twisted
titanium tube coil in concentric counter-flow PVC pipe. These models
were included in the engineering analysis described in chapter 5 of the
October 2015 NODA TSD. DOE did not assume a priori that the concentric/
counter-flow PVC heat exchanger design would result in a certain
efficiency increase compared to the submerged coil design, but rather
found that these were the design paths for units with such rated
efficiencies on the market. Upon further review of the models on the
market, DOE has tentatively determined that consideration of two
straight titanium tube coils in submerged water tanks as a design
option for EL 1, as presented in the October 2015 NODA, does not
represent a typical design for the lowest efficiency heat pump pool
heater and, as discussed later in section IV.C.2.c of this document,
this design option is more expensive than other designs that are
similar to those used at the other ELs. As such, DOE has amended the
design option for EL 1 to a heat pump with a heat exchanger consisting
of a single twisted titanium tube coil in concentric counter-flow PVC
pipe as this design better resembles the lowest efficiency heat pump
pool heater on the market.
Table IV.7 provides a description of the typical technological
change at each efficiency level for electric pool heaters.

Table IV.7--Technology Description by Efficiency Level for Electric Pool
Heaters
------------------------------------------------------------------------
Efficiency level Technology
------------------------------------------------------------------------
EL 0................................... Electric Resistance.
EL 1 \*\............................... Heat Pump, twisted Titanium
tube coil in concentric/
counter flow PVC Pipe.
EL 2................................... EL1 + increased evaporator
surface area.
EL 3................................... EL2 + increased evaporator
surface area.
EL 4................................... EL3 + increased evaporator
surface area.
EL 5................................... EL4 + condenser coil length +
seasonal off switch + switch
mode power supply.
------------------------------------------------------------------------
\*\ The EL 1 design option has been updated from that presented in the
October 2015 NODA. The description in the October 2015 NODA was,
``Heat Pump, two straight Titanium tube coils in submerged water
tanks.''

Table IV.8 shows the efficiency levels DOE selected for the NOPR
analysis for electric pool heaters based on application of the design
options presented in Table IV.7.
BILLING CODE 6450-01-P

[[Page 22662]]

[GRAPHIC] [TIFF OMITTED] TP15AP22.003

In the March 2015 RFI, DOE also requested information on the max-
tech efficiency levels for gas-fired pool heaters. 80 FR 15922, 15926.
In response, Raypak stated that the max-tech efficiency level for gas-
fired pool heaters would be in the range of 94 to 96-percent thermal
efficiency. Raypak stated that the selection of heat exchanger
materials for gas-fired pool heaters restricts the max-tech efficiency
from being higher because the materials used have to be resistant to
the chemicals used in pools, particularly when the pool chemistry is
not properly maintained. (Raypak, No. 4 at p. 3)
DOE analyzed a max-tech efficiency level of 95-percent thermal
efficiency in this NOPR analysis based on its review of the gas-fired
pool heater market. At the time of the analysis, 95-percent thermal
efficiency represented the highest level available on the market.
Table IV.9 shows the efficiency levels DOE analyzed for this NOPR
with respect to gas-fired pool heaters. DOE selected the thermal
efficiency levels based on its review of the gas-fired pool heaters
market.

[[Page 22663]]

[GRAPHIC] [TIFF OMITTED] TP15AP22.004

BILLING CODE 6450-01-C
DOE seeks comment from interested parties regarding the efficiency
levels selected for the NOPR analysis.
Table IV.10 provides a description of the typical technological
change(s) at each efficiency level for gas-fired pool heaters.

Table IV.10--Technology Description by Efficiency Level for Gas-Fired
Pool Heaters
------------------------------------------------------------------------
Efficiency level Technology
------------------------------------------------------------------------
EL 0................................... Standing Pilot + Cu or CuNi
Finned Tube + Atmospheric.
EL 1................................... Electronic Ignition + Cu or
CuNi Finned Tube +
Atmospheric.
EL 2................................... Electronic Ignition + Cu or
CuNi Finned Tube + Blower
Driven Gas/Air Mix.
EL 3................................... Condensing + CuNi and Cu Finned
Tube + seasonal off switch +
switch mode power supply.
------------------------------------------------------------------------

DOE seeks comment from interested parties regarding the typical
technological changes associated with each efficiency level.
See section VII.E for a list of issues on which DOE seeks comment.
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the product on
the market. The cost approaches are summarized as follows:
<bullet> Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component-by-component, to
develop a detailed bill of materials for the product.
<bullet> Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
<bullet> Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
At the start of the engineering analysis, DOE identified the energy
efficiency levels associated with consumer pool heaters on the market
using data gathered in the market assessment. DOE also identified the
technologies and features that are typically incorporated into products
at the baseline level and at the various energy efficiency levels
analyzed above the baseline. Next, DOE selected products for the
physical teardown analysis having characteristics of typical products
on the market at the representative capacity. DOE gathered information
from performing a physical teardown analysis (see section IV.C.2.a of
this document) to create detailed bill of materials (BOMs), which
included all components and processes used to manufacture the products.
DOE used the BOMs from the teardowns as inputs to calculate the MPC for
products at various efficiency levels spanning the full range of
efficiencies from the baseline to the maximum technology available. DOE
reexamined and revised its cost assessment performed for the October
2015 NODA analysis.
During the development of the analysis for the NOPR, DOE held
interviews with manufacturers to gain insight into the consumer pool
heater industry, and to request feedback on the engineering analysis.
DOE used the information gathered from these interviews, along with the
information obtained through the teardown analysis and public comments,
to refine its MPC estimates for this rulemaking. Next, DOE derived
manufacturer markups using publicly-available consumer pool heater
industry financial data in conjunction with manufacturers' feedback.
The markups were used to convert the MPCs into manufacturer sales
prices (MSPs). Further information on comments received and the
analytical methodology is presented in the following subsections. For
additional detail, see chapter 5 of the NOPR TSD.
a. Teardown Analysis
To assemble BOMs and to calculate the manufacturing costs for the
different components in consumer pool heaters, DOE disassembled
multiple units into their base components and estimated the materials,
processes, and labor required for the manufacture of each individual
component, a process referred to as a ``physical teardown.''

[[Page 22664]]

Using the data gathered from the physical teardowns, DOE characterized
each component according to its weight, dimensions, material, quantity,
and the manufacturing processes used to fabricate and assemble it.
DOE also used a supplementary method, called a ``virtual
teardown,'' which examines published manufacturer catalogs and
supplementary component data to estimate the major physical differences
between a product that was physically disassembled and a similar
product that was not. For supplementary virtual teardowns, DOE gathered
product data such as dimensions, weight, and design features from
publicly-available information, such as manufacturer catalogs.
The teardown analysis allowed DOE to identify the technologies that
manufacturers typically incorporate into their products, along with the
efficiency levels associated with each technology or combination of
technologies. The BOMs from the teardown analysis were then used as
inputs to calculate the MPC for each product that was torn down. The
MPC's resulting from the teardowns were used to develop an industry
average MPC for each efficiency level of each product class analyzed.
More information regarding details on the teardown analysis can be
found in chapter 5 of the NOPR TSD.
b. Cost Estimation Method
The costs of individual models are estimated using the content of
the BOMs (i.e., materials, fabrication, labor, and all other aspects
that make up a production facility) to generate the MPCs. For example,
these MPCs include overhead and depreciation. DOE collected information
on labor rates, tooling costs, raw material prices, and other factors
as inputs into the cost estimates. For purchased parts, DOE estimates
the purchase price based on volume-variable price quotations and
detailed discussions with manufacturers and component suppliers. For
fabricated parts, the prices of raw metal materials \27\ (i.e., tube,
sheet metal) are estimated using the average of the most recent 5-year
period. The cost of transforming the intermediate materials into
finished parts was estimated based on current industry pricing at the
time of analysis.\28\
---------------------------------------------------------------------------

\27\ American Metals Market, available at <a href="http://www.amm.com/">www.amm.com/</a>.
\28\ U.S. Department of Labor, Bureau of Labor Statistics,
Producer Price Indices, available at <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a>.
---------------------------------------------------------------------------

c. Manufacturing Production Costs
DOE estimated the MPC at each efficiency level considered for each
product class, from the baseline through the max-tech and then
calculated the percentages attributable to each cost category (i.e.,
materials, labor, depreciation, and overhead). These percentages are
used to validate the assumptions by comparing them to manufacturers'
actual financial data published in annual reports, along with feedback
obtained from manufacturers during interviews. DOE uses these
production cost percentages in the MIA (see section IV.J of this
document).
DOE's analysis focused on a single representative capacity for each
product class analyzed. DOE selected a representative output capacity
of 110,000 Btu/h for electric pool heaters and a representative input
capacity of 250,000 Btu/h for gas-fired pool heaters.\29\ DOE selected
these representative capacities based on the number of available models
on the market and by referencing a number of sources, including
information collected for the market and technology assessment, as well
as information obtained from product literature. DOE then sought
feedback on the representative capacities during confidential
manufacturer interviews.
---------------------------------------------------------------------------

\29\ For gas-fired pool heaters, manufacturers are currently
required to certify input capacity pursuant to 10 CFR 429.12. For
electric heat pump pool heaters, manufacturers currently use output
capacity in order to represent the capacity of a unit. DOE used a
combination of the AHRI directory data (<a href="http://www.ahridirectory.org/">www.ahridirectory.org/</a>) and
product literature to obtain data regarding electric heat pump pool
heater output capacity.
---------------------------------------------------------------------------

AHRI stated that the MPC estimates for electric pool heaters
presented in the October 2015 NODA analysis are significantly flawed.
AHRI stated that the relationship of manufacturing cost to efficiency
for heat pump pool heaters is relatively linear and proportional,
similar to other consumer products. AHRI suggested that the design
features assumed for EL 1 and EL 2 mischaracterize how those respective
efficiency levels are achieved and provide an unrealistic estimate of
MPC, i.e., a 40% improvement in the EL 1 efficiency cannot be achieved
for only a $1 increase in MPC. (AHRI, No. 16 at p. 3-4)
As discussed in section IV.C.1.c, the electric pool heaters
selected for teardown and to represent each efficiency level were based
on the published coefficients of performance of models currently on the
market (as integrated thermal efficiency data were not yet available).
DOE did not assume a priori that the concentric/counter-flow PVC heat
exchanger design would result in a certain efficiency increase compared
to the submerged coil design, but rather found that these were the
design paths for units with such rated efficiencies on the market.
Further, as demonstrated by DOE's cost-efficiency curves, although the
design at EL 2 provides a large improvement in efficiency as compared
to the design evaluated at EL 1 in the October 2015 NODA, DOE's
estimate of the MPC based on its teardown analysis indicated that the
cost to manufacture the product with a heat exchanger as designed at EL
2 was not substantially more than that at EL 1. For the analysis
conducted for this NOPR, as discussed in section IV.C.1.c, DOE has
tentatively determined to change the design option for the electric
pool heater EL 1 to be more similar to the design options at the other
ELs (i.e., twisted Titanium tube coil in concentric/counter flow PVC
Pipe).
For this NOPR analysis, DOE revised the cost analysis assumptions
it used for the October 2015 NODA analysis based on updated pricing
information (for raw materials and purchased parts) and additional
manufacturer feedback. This resulted in refined MPCs and production
cost percentages.
Table IV.11 presents DOE's estimates of the MPC's by efficiency
level for electric pool heaters in the NOPR analysis. The integrated
thermal efficiencies and MPCs listed in Table IV.11 are based on an
output capacity of 110,000 Btu/h.

Table IV.11--Manufacturing Production Cost for Electric Pool Heaters at
Representative Output Capacity of 110,000 Btu/h
------------------------------------------------------------------------
TEI (percent)
Efficiency level MPC ($2020)
------------------------------------------------------------------------
EL 0.................................... 99 893
EL 1.................................... 387 1,093

[[Page 22665]]

EL 2.................................... 483 1,144
EL 3.................................... 534 1,188
EL 4.................................... 551 1,220
EL 5.................................... 595 1,304
------------------------------------------------------------------------

In developing the MPCs for gas-fired pool heaters for this NOPR,
DOE considered the heat exchanger material and whether a model would
utilize a cupronickel or copper heat exchanger at a given efficiency
level. DOE surveyed the market and found that the percentage of models
at each efficiency level that currently utilize copper or cupronickel
heat exchangers and assumed that, under an amended standard, the
percentage would remain unchanged.\30\
---------------------------------------------------------------------------

\30\ For example, assume that at EL 1, 60 percent of the market
currently uses copper heat exchangers and 40 percent of the market
currently uses cupronickel heat exchangers. Then, if EL 1 was chosen
as the amended standard level, DOE assumes that 60 percent of the
market would continue to use copper heat exchangers and 40 percent
of the market would continue to use cupronickel heat exchangers.
---------------------------------------------------------------------------

DOE requests comment on its assumption that the fraction of
shipments which utilize cupronickel heat exchangers would not change as
a result of amended standards.
Table IV.12 presents DOE's estimates of the MPCs by efficiency
level for gas-fired pool heaters in the NOPR analysis. The integrated
thermal efficiencies and MPCs listed in Table IV.12 are based on an
input capacity of 250,000 Btu/h.

Table IV.12--Manufacturing Production Cost for Gas-Fired Pool Heaters at
Representative Input Capacity of 250,000 Btu/h
------------------------------------------------------------------------
TEI (percent)
Efficiency level MPC ($2020)
------------------------------------------------------------------------
EL 0.................................... 61.1 659
EL 1.................................... 81.3 665
EL 2.................................... 83.3 827
EL 3.................................... 94.8 1,157
------------------------------------------------------------------------

Chapter 5 of the NOPR TSD presents additional detail regarding the
development of DOE's estimates of the MPCs for consumer pool heaters.
d. Manufacturer Markups
To account for manufacturers' non-production costs and profit
margin, DOE applies a non-production cost multiplier (the manufacturer
markup) to the MPC. The resulting MSP is the price that DOE research
suggests the manufacturer can sell a given unit into the marketplace
under a standards scenario. To meet new or amended energy conservation
standards, manufacturers typically redesign their baseline products.
These design changes typically increase MPCs relative to those of
previous baseline MPCs. Depending on the competitive environment for
these particular products, some or all of the increased production
costs may be passed from manufacturers to retailers and eventually to
customers in the form of higher purchase prices. As production costs
increase, manufacturers may also incur additional overhead (e.g.,
warranty costs).
The manufacturer markup has an important bearing on profitability.
A high markup under a standards scenario suggests manufacturers can
readily pass along the increased variable costs and some of the capital
and product conversion costs (the one-time expenditures) to consumers.
A low markup suggests that manufacturers will have greater difficulty
recovering their investments, product conversion costs, and/or
incremental MPCs.
DOE estimated manufacturer markups based on publicly available
financial information for consumer pool heater manufacturers, and
information obtained during manufacturer interviews, DOE assumed the
non-production cost markup--which includes selling, general, and
administrative (``SG&A'') expenses, research and development (``R&D'')
expenses, interest, and profit--to be 1.33 for gas-fired pool heaters
and 1.28 for electric pool heaters. See chapter 5 of the NOPR TSD for
more details about the manufacturer markup calculation.
e. Manufacturer Interviews
Throughout the rulemaking process, DOE has sought and continues to
seek feedback and insight from interested parties that would improve
the information used in its analyses. DOE interviewed manufacturers as
a part of the NOPR manufacturer impact analysis (see section IV.J.3 of
this document). During the interviews, DOE sought feedback on all
aspects of its analyses for consumer pool heaters. For the engineering
analysis, DOE discussed the analytical assumptions and estimates, cost
analysis, and cost-efficiency curves with consumer pool heater
manufacturers. DOE considered all the information manufacturers
provided when refining the cost analysis and assumptions. DOE
incorporated equipment and manufacturing process figures into the
analysis as averages to avoid disclosing sensitive information about
individual manufacturers' products or manufacturing processes. More
details about the manufacturer interviews are contained in chapter 12
of the NOPR TSD.

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., wholesaler
and distributors, pool contractors, pool retailers, pool builders) in
the distribution chain and sales taxes to convert the 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 add markup to the price of the product to cover
business costs and profit margin.

[[Page 22666]]

For consumer pool heaters, the main parties in the distribution
chain are: (1) Manufacturers; (2) wholesalers or distributors; (3) pool
contractors; (4) pool retailers; (5) buying groups; \31\ and (6) pool
builders. For each actor in the distribution chain except for
manufacturers, DOE developed baseline and incremental markups. Baseline
markups are applied to the price of products with baseline efficiency,
while incremental markups are applied to the difference in price
between baseline and higher-efficiency models (the incremental cost
increase). The incremental markup is typically less than the baseline
markup and is designed to maintain similar per-unit operating profit
before and after new or amended standards.\32\
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\31\ Buying groups are intermediaries between the pool heater
manufacturers and contractors. A buying group is a coalition of
companies within a shared category who leverage their collective
purchasing power to negotiate price reductions from manufacturers.
\32\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup 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.
---------------------------------------------------------------------------

At each step in the distribution channel, companies add markup to
the price of the product to cover business costs and profit margin. For
the electric pool heater October 2015 NODA, DOE characterized two
markets in which pool products pass from the manufacturer to
residential and commercial consumers: \33\ (1) Replacement or new
installation of consumer pool heater for existing swimming pool or spa;
(2) installation of consumer pool heater in new swimming pool or spa.
For this NOPR, DOE gathered data from several sources including 2020
Pkdata report,\34\ POOLCORP's 2020 Form 10-K,\35\ PRNewswire,\36\
PoolPro Magazine,\37\ Aqua Magazine,\38\ and Pool and Spa News \39\ to
determine the distribution channels and fraction of shipments going
through each distribution channel. The distribution channels for
replacement or new installation of a consumer pool heater for existing
swimming pool or spa are characterized as follows: \40\
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\33\ DOE estimates that 6 percent of electric pool heaters and
13 percent of gas pool heaters will be shipped to commercial
applications in 2028. See section IV.E.1 of this document for
further discussion.
\34\ Pkdata, 2020 Residential and Commercial Swimming Pool, Hot
Tub, and Pool Heater Customized Report for LBNL, October 15, 2020,
available at: <a href="http://www.pkdata.com/datapointstrade.html#/">www.pkdata.com/datapointstrade.html#/</a> (last accessed
April 15, 2021).
\35\ POOLCORP, 2020 Form 10-K, available at:
<a href="http://dd7pmep5szm19.cloudfront.net/603/0000945841-21-000022.pdf">dd7pmep5szm19.cloudfront.net/603/0000945841-21-000022.pdf</a> (last
accessed April 15, 2021).
\36\ PRNewswire, United Aqua Group, one of the nation's largest
organizations dedicated to the professional pool construction,
service and retail industry, announces that POOLCORP[supreg] is no
longer the preferred distributor for its swimming pool products or
building materials, May 15, 2018, available at: <a href="http://www.prnewswire.com/news-releases/united-aqua-group-one-of-the-nations-largest-organizations-dedicated-to-the-professional-pool-construction-service-and-retail-industry-announces-that-poolcorp-is-no-longer-the-preferred-distributor-for-its-swimming-pool-produ-300648220.html">www.prnewswire.com/news-releases/united-aqua-group-one-of-the-nations-largest-organizations-dedicated-to-the-professional-pool-construction-service-and-retail-industry-announces-that-poolcorp-is-no-longer-the-preferred-distributor-for-its-swimming-pool-produ-300648220.html</a>
(last accessed April 15, 2021).
\37\ PoolPro, Channel Choices, PoolPro Magazine, March 5, 2018,
available at: <a href="http://poolpromag.com/channel-choices/">poolpromag.com/channel-choices/</a> (last accessed April
15, 2021).
\38\ Herman, E., Distributors: The Middleman's Role, Aqua
Magazine, December 2017, available at: <a href="http://aquamagazine.com/features/the-middleman-s-role.html">aquamagazine.com/features/the-middleman-s-role.html</a> (last accessed April 15, 2021).
\39\ Green, L., Forward Thinking: A Look at Distributor Sector
in Pool, Spa Industry Distributors adapt with the times, Pool and
Spa News, March 27, 2015, available at: <a href="http://www.poolspanews.com/business/retail-management/forward-thinking-a-look-at-distributor-sector-in-pool-spa-industry_o">www.poolspanews.com/business/retail-management/forward-thinking-a-look-at-distributor-sector-in-pool-spa-industry_o</a> (last accessed April 15, 2021).
\40\ Based on 2020 Pkdata, in residential pools and spas, DOE
assumes that the consumer pool heater goes through the wholesaler 45
percent of the time, 10 percent of the time wholesaler to retailer,
40 percent of the time directly through the pool retailer, and 5
percent of the time through the buying group.

---------------------------------------------------------------------------
Manufacturer [rarr] Wholesaler [rarr] Pool Contractor [rarr] Consumer

Manufacturer [rarr] Wholesaler [rarr] Pool Retailer [rarr] Consumer

Manufacturer [rarr] Pool Retailer [rarr] Consumer

Manufacturer [rarr] Buying Group [rarr] Pool Contractor [rarr] Consumer

The distribution channels for installation of consumer pool heaters
in a new swimming pool or spa are characterized as follows: \41\
---------------------------------------------------------------------------

\41\ Based on 2020 Pkdata, DOE estimated that about 40 percent
of consumer pool heater installations in new pools are distributed
through a wholesaler and about 60 percent are distributed through a
buying group.

---------------------------------------------------------------------------
Manufacturer [rarr] Wholesaler [rarr] Pool Builder [rarr] Consumer

Manufacturer [rarr] Buying Group [rarr] Pool Builder [rarr] Consumer

Lochinvar stated that the distribution channels for pool heaters
sold for commercial applications are similar to those used in
commercial packaged boiler and commercial water heater rulemakings.
(Lochinvar, No. 2 at p. 2) Lochinvar did not provide specific fractions
of shipments for each distribution channel. For the NOPR analysis, DOE
estimated that half of consumer pool heaters installed in commercial
applications would use similar distribution channels to commercial
packaged boilers and commercial water heaters (Manufacturer [rarr]
Wholesaler [rarr] Mechanical Contractor [rarr] Consumer for
replacements and new owners; and Manufacturer [rarr] Wholesaler [rarr]
Mechanical Contractor [rarr] General Contractor [rarr] Consumer for new
swimming pool construction),\42\ while the remaining consumer pool
heaters would have the distribution channels described previously.
---------------------------------------------------------------------------

\42\ Based on 2020 Pkdata, which showed a much larger fraction
of pool heaters being sold through distributors (about 70 percent)
and directly to end users (about 20 percent) in commercial
applications compared to pool heaters in residential applications.
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DOE requests comment on whether the distribution channels described
above are appropriate for consumer pool heaters and are sufficient to
describe the distribution markets. In addition, DOE seeks input on the
percentage of products being distributed through the different
distribution channels, and whether the share of products through each
channel varies based on product class, capacity, or other features.
To estimate average baseline and incremental markups, DOE relied on
several sources, including: (1) Form 10-K from U.S. Securities and
Exchange Commission (``SEC'') for Pool Corp (pool wholesaler and
retailers); \43\ (2) form 10-K from U.S. SEC for the Home Depot,
Lowe's, Wal-Mart, and Costco (for pool retailers); (3) U.S. Census
Bureau 2017 Annual Retail Trade Report for miscellaneous store
retailers (NAICS 453) (for direct pool retailers),\44\ (4) U.S. Census
Bureau 2017 Economic Census data \45\ on the residential and commercial
building construction industry (for pool builder, pool contractor, and
general and plumbing/mechanical contractors for commercial
applications); and (5) the Heating, Air Conditioning & Refrigeration
Distributors International (``HARDI'') 2013 Profit Report \46\ (for
wholesalers for

[[Page 22667]]

commercial applications). DOE assumes that the markups for buying group
is half of the value of pool wholesaler markups derived from Pool
Corp's form 10-K. In addition, DOE used the 2005 Air Conditioning
Contractors of America's (``ACCA'') Financial Analysis on the Heating,
Ventilation, Air-Conditioning, and Refrigeration (``HVACR'')
contracting industry \47\ to disaggregate the mechanical contractor
markups into replacement and new construction markets for consumer pool
heaters used in commercial applications.
---------------------------------------------------------------------------

\43\ U.S. Securities and Exchange Commission, SEC 10-K Reports
(2016-2020), available at <a href="http://www.sec.gov/">www.sec.gov/</a> (last accessed April 15,
2021).
\44\ U.S. Census Bureau, 2017 Annual Retail Trade Report,
available at <a href="http://www.census.gov/programs-surveys/arts.html">www.census.gov/programs-surveys/arts.html</a> (last
accessed April 15, 2021). Note that the 2017 Annual Retail Trade
Report is the latest version of the report that includes detailed
operating expenses data.
\45\ U.S. Census Bureau, 2017 Economic Census Data. available at
<a href="http://www.census.gov/programs-surveys/economic-census.html">www.census.gov/programs-surveys/economic-census.html</a> (last accessed
April 15, 2021).
\46\ Heating, Air Conditioning & Refrigeration Distributors
International (``HARDI''), 2013 HARDI Profit Report, available at
<a href="http://hardinet.org/">hardinet.org/</a> (last accessed April 15, 2021). Note that the 2013
HARDI Profit Report is the latest version of the report.
\47\ Air Conditioning Contractors of America (``ACCA''),
Financial Analysis for the HVACR Contracting Industry (2005),
available at <a href="http://www.acca.org/store#/storefront">www.acca.org/store#/storefront</a> (last accessed April 15,
2021). Note that the 2005 Financial Analysis for the HVACR
Contracting Industry is the latest version of the report and is only
used to disaggregate the mechanical contractor markups into
replacement and new construction markets.
---------------------------------------------------------------------------

In addition to the markups, DOE obtained state and local taxes from
data provided by the Sales Tax Clearinghouse.\48\ These data represent
weighted average taxes that include county and city rates. DOE derived
shipment-weighted average tax values for each region considered in the
analysis.
---------------------------------------------------------------------------

\48\ Sales Tax Clearinghouse Inc., State Sales Tax Rates Along
with Combined Average City and County Rates (Feb. 8, 2021),
available at <a href="http://thestc.com/STrates.stm">thestc.com/STrates.stm</a> (last accessed April 15, 2021).
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DOE requests comment on the data sources used to establish the
markups for the parties involved with the distribution of covered
products.
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for consumer pool heaters.

E. Energy Use Analysis

The purpose of the energy use analysis is to determine the annual
energy consumption of consumer pool heaters at different efficiencies
in representative U.S. applications, and to assess the energy savings
potential of increased consumer pool heater efficiency. The energy use
analysis estimates the range of energy use of consumer pool heaters in
the field (i.e., as they are actually used by consumers). The energy
use analysis provides the basis for other analyses DOE performed,
particularly assessments of the energy savings and the savings in
consumer operating costs that could result from adoption of amended or
new standards.
1. Pool Heater Consumer Samples
DOE created individual consumer samples for seven pool heater
market types: (1) pool heaters in single family homes that serve a
swimming pool only (pool type 1); (2) pool heaters in single family
homes that serve both a swimming pool and spa (pool type 2); (3) pool
heaters in single family homes that serve a spa only (pool type 3);
\49\ (4) pool heaters in single-family community swimming pools or spas
(pool type 4); (5) pool heaters in multi-family community swimming
pools or spas (pool type 5); (6) pool heaters in indoor commercial
swimming pools or spas (pool type 6); (7) pool heaters in outdoor
commercial swimming pools or spas (pool type 7). DOE used the samples
not only to determine pool heater annual energy consumption, but also
as the basis for conducting the LCC and PBP analysis.
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\49\ For electric pool heater sample, DOE only considered a
small fraction of large spas that require a pool heater large than
11 kW. For this NOPR, the fraction of spas with an electric pool
heater larger than 11 kW was determined based on 2020 Pkdata and
DOE's shipments analysis.
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For the October 2015 NODA, DOE used EIA 2009 Residential Energy
Consumption Survey (``RECS 2009'') to establish a sample of single
family homes that use an electric pool heater in swimming pool or spa
or both.\50\ For the NOPR, DOE used the EIA's 2015 Residential Energy
Consumption Survey (``RECS 2015'') to establish a sample of single
family homes that use an electric or gas-fired pool heater in a
swimming pool or spa or both.\51\ RECS 2015 includes information such
as the household or building owner demographics, fuel types used,
months swimming pool used in the last year, energy consumption and
expenditures, and other relevant data.
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\50\ U.S. Department of Energy-Energy Information
Administration. 2009 RECS Survey Data, available at <a href="http://www.eia.gov/consumption/residential/data/2009/">www.eia.gov/consumption/residential/data/2009/</a> (last accessed April 15, 2021).
\51\ U.S. Department of Energy-Energy Information
Administration. 2015 RECS Survey Data, available at <a href="http://www.eia.gov/consumption/residential/data/2015/">www.eia.gov/consumption/residential/data/2015/</a> (last accessed April 15, 2021).
RECS 2015 uses the term hot tub instead of spa. When a household has
a pool heater and spa heater of the same fuel, RECS 2015 does not
provide information about whether the pool heater is used for both.
For the NOPR, DOE assumes that in this case, a single pool heater is
used to heat both the pool and spa.
---------------------------------------------------------------------------

For consumer pool heaters used in indoor swimming pools in
commercial applications, DOE developed a sample using the 2012
Commercial Building Energy Consumption Survey (``CBECS 2012'').\52\
CBECS 2012 does not provide data on community pools or outdoor swimming
pools in commercial applications. To develop samples for consumer pool
heaters in single or multi-family community pools and/or spas, DOE used
a combination of RECS 2015, U.S. Census 2017 American Home Survey Data,
and the 2020 Pkdata.\53\ To develop a sample for pool heaters in
outdoor swimming pools in commercial applications, DOE used a
combination of CBECS 2012 and the 2020 Pkdata.
---------------------------------------------------------------------------

\52\ U.S. Department of Energy-Energy Information
Administration. 2012 CBECS Survey Data, available at <a href="http://www.eia.gov/consumption/commercial/data/2012/">www.eia.gov/consumption/commercial/data/2012/</a> (last accessed April 15, 2021).
\53\ Pkdata. 2020 Residential and Commercial Swimming Pool, Hot
tub, and Pool Heater Customized Report for LBNL, available at
<a href="http://www.pkdata.net/datapointstrade.html">www.pkdata.net/datapointstrade.html</a> (last accessed April 15, 2021).
---------------------------------------------------------------------------

Table IV.13 shows the estimated weights for the samples of electric
pool heaters and gas pool heaters by the seven pool heater market
types. See chapter 7 of the NOPR TSD for more details about the
creation of the samples and the regional breakdowns.

Table IV.13--Fraction of Electric Pool Heaters and Gas-Fired Pool Heaters by Pool Heater Market
----------------------------------------------------------------------------------------------------------------
Electric pool Gas-fired pool
Pool type ID Description heaters (%) heaters (%)
----------------------------------------------------------------------------------------------------------------
1.......................................... Single Family with Pool Heater 58.4 32.5
Serving Swimming Pool Only.
2.......................................... Single Family with Pool Heater 28.3 28.7
Serving Swimming Pool + Spa.
3.......................................... Single Family with Pool Heater 7.1 25.7
Serving Spa Only.
4.......................................... Community Pools or Spas (Single- 0.8 1.5
Family).
5.......................................... Community Pools or Spas (Multi- 2.8 5.1
Family).
6.......................................... Commercial Indoor Pools and Spas... 1.0 3.9
7.......................................... Commercial Outdoor Pools and Spas.. 1.5 2.6
----------------------------------------------------------------------------------------------------------------

[[Page 22668]]

AHRI stated that although the RECS information is readily available
and useful, the usage and installation circumstances of electric pool
heaters may be such that a more detailed estimate of installations per
state is needed to properly analyze an efficiency standard for electric
pool heaters. AHRI stated that because climate affects the electricity
use of electric pool heaters, any changes in the assumed geographical
distribution of electric pool heaters would alter electricity use.
(AHRI, No. 16 at p. 4) DOE contends that RECS provides a reasonable
distribution of users of electric pool heaters, since it closely
matches regional data for electric pool heaters from 2020 Pkdata. DOE
acknowledges that there is some uncertainty related to the distribution
of electric pool heaters and discusses its assumptions in more detail
in appendix 7A of the NOPR TSD.
EEI stated that because commercial pools, including community
pools, commercial indoor spas or pools, and commercial outdoor swimming
pools, are usually much larger in volume and operate for many more
hours during the year than pools in residential applications, their
inclusion in the analysis distorts the baseline energy usage and the
impacts of energy efficiency improvements. EEI stated that because
commercial swimming pool

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