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Rule2024-04736

Energy Conservation Program: Energy Conservation Standards for Residential Clothes Washers

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Published

March 15, 2024

Effective

July 15, 2024

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 residential clothes washers ("RCWs"). In this direct final rule, the U.S. Department of Energy ("DOE") is adopting amended energy conservation standards for RCWs. DOE has determined that the amended energy conservation standards for these products would result in significant conservation of energy and are technologically feasible and economically justified.

Full Text

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<title>Federal Register, Volume 89 Issue 52 (Friday, March 15, 2024)</title>
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[Federal Register Volume 89, Number 52 (Friday, March 15, 2024)]
[Rules and Regulations]
[Pages 19026-19126]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-04736]

[[Page 19025]]

Vol. 89

Friday,

No. 52

March 15, 2024

Part II

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for
Residential Clothes Washers; Direct Final Rule

Federal Register / Vol. 89, No. 52 / Friday, March 15, 2024 / Rules
and Regulations

[[Page 19026]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0014]
RIN 1904-AF58

Energy Conservation Program: Energy Conservation Standards for
Residential Clothes Washers

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

ACTION: Direct final rule.

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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 residential
clothes washers (``RCWs''). In this direct final rule, the U.S.
Department of Energy (``DOE'') is adopting amended energy conservation
standards for RCWs. DOE has determined that the amended energy
conservation standards for these products would result in significant
conservation of energy and are technologically feasible and
economically justified.

DATES: The effective date of this rule is July 15, 2024. If adverse
comments are received by July 3, 2024, and DOE determines that such
comments may provide a reasonable basis for withdrawal of the direct
final rule under 42 U.S.C. 6295(o), a timely withdrawal of this rule
will be published in the Federal Register. If no such adverse comments
are received, compliance with the amended standards established for
RCWs in this direct final rule is required on and after March 1, 2028.
Comments regarding the likely competitive impact of the standards
contained in this direct final rule should be sent to the Department of
Justice contact listed in the ADDRESSES section on or before April 15,
2024.

ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
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/docket/EERE-2017-BT-STD-0014">www.regulations.gov/docket/EERE-2017-BT-STD-0014</a>. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
For further information on how to submit a comment or review other
public comments and the docket, contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
<a href="/cdn-cgi/l/email-protection#5a1b2a2a36333b34393f092e3b343e3b283e290b2f3f292e333534291a3f3f743e353f743d352c">[email&#160;protected]</a>.
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 standards contained in this direct
final rule. Interested persons may contact the Antitrust Division at
<a href="/cdn-cgi/l/email-protection#5633383324312f7825223738323724322516232532393c78313920">[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 direct final rule.

FOR FURTHER INFORMATION CONTACT: Dr. Carl Shapiro, 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: (202) 287-5649. Email:
<a href="/cdn-cgi/l/email-protection#9adbeaeaf6f3fbf4f9ffc9eefbf4fefbe8fee9cbefffe9eef3f5f4e9daffffb4fef5ffb4fdf5ec">[email&#160;protected]</a>.
Ms. Amelia Whiting, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 586-2588. Email:
<a href="/cdn-cgi/l/email-protection#16577b737a7f7738417e7f627f7871567e673872797338717960">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Direct Final 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. Current Test Procedure
3. The Joint Agreement
III. General Discussion
A. Scope of Coverage
B. Fairly Representative of Relevant Points of View
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
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Metric Translations
2. Efficiency Analysis
a. Baseline Efficiency Levels
b. Higher Efficiency Levels
c. Semi-Automatic
3. Cost Analysis
4. Cost-Efficiency Results
D. Markups Analysis
E. Energy and Water Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy and Water Consumption
4. Energy and Water Prices
a. Energy Prices
b. Water and Wastewater Prices
5. Maintenance and Repair 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 and Water Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Low-Income Households
2. Senior-Only Households
3. Well-Water Households
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Capital and Product Conversion Costs
d. Manufacturer Markup Scenarios
3. Discussion of MIA Comments
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
O. Regulatory Impact Analysis
P. Other Comments
1. Commerce Clause
2. Test Cloth
3. National Academy of Sciences Report
V. Analytical Results and Conclusions
A. Trial Standard Levels

[[Page 19027]]

B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy and Water Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
a. Performance Characteristics
b. Continued Availability of Small-Capacity Clothes Washers
c. Design Characteristics
d. Conclusion
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Residential
Clothes Washer Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Severability
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
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. Congressional Notification
VIII. Approval of the Office of the Secretary

I. Synopsis of the Direct Final Rule

The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part B of EPCA \2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include consumer (residential) \3\
clothes washers (``RCWs''), the subject of this direct final rule. (42
U.S.C. 6292(a)(7))
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\1\ 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), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\3\ DOE uses the ``residential'' nomenclature and ``RCW''
abbreviation for consumer clothes washers in order to distinguish
from the ``CCW'' abbreviation used for commercial clothes washers,
which are also regulated equipment under EPCA.
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Pursuant to EPCA, any new or amended energy conservation standard
must, among other things, 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 significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
In light of the above and under the authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct final rule amending energy
conservation standards for RCWs.
The adopted standard levels in this direct final rule were proposed
in a letter submitted to DOE jointly by groups representing
manufacturers, energy and environmental advocates, consumer groups, and
a utility. This letter, titled ``Energy Efficiency Agreement of 2023''
(hereafter, the ``Joint Agreement'' \4\), recommends specific energy
conservation standards for RCWs that, in the commenters' view, would
satisfy the EPCA requirements in 42 U.S.C. 6295(o). DOE subsequently
received letters of support for the Joint Agreement from States
including New York, California, and Massachusetts \5\ and utilities
including San Diego Gas and Electric (``SDG&E'') and Southern
California Edison (``SCE'') \6\ advocating for the adoption of the
recommended standards.
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\4\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505</a>.
\5\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0506">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0506</a>.
\6\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0507">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0507</a>.
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In accordance with the direct final rule provisions at 42 U.S.C.
6295(p)(4), DOE has determined that the recommendations contained in
the Joint Agreement are compliant with 42 U.S.C. 6295(o). As required
by 42 U.S.C. 6295(p)(4)(A)(i), DOE is also simultaneously publishing a
notice of proposed rulemaking (``NOPR'') that contains identical
standards to those adopted in this direct final rule. Consistent with
the statute, DOE is providing a 110-day public comment period on the
direct final rule. (42 U.S.C. 6295(p)(4)(B)) If DOE determines that any
comments received provide a reasonable basis for withdrawal of the
direct final rule under 42 U.S.C. 6295(o) or any other applicable law,
DOE will publish the reasons for withdrawal and continue the rulemaking
under the NOPR. (42 U.S.C. 6295(p)(4)(C)) See section II.A of this
document for more details on DOE's statutory authority.
The amended standards that DOE is adopting in this direct final
rule are the efficiency levels recommended in the Joint Agreement
(shown in Table I.1). The standards are expressed in terms of energy
efficiency ratio (``EER''), measured in pounds per kilowatt-hour per
cycle (``lb/kWh/cycle''), and water efficiency ratio (``WER''),
measured in pounds per gallon per cycle (``lb/gal/cycle''), as
determined in accordance with DOE's clothes washer test procedure
codified at title 10 of the Code of Federal Regulations (``CFR''), part
430, subpart B, appendix J (``appendix J''). The EER metric includes
active mode, inactive mode, and off mode energy use. The amended
standards recommended in the Joint Agreement are represented as trial
standard level (``TSL'') 2 in this document and described in section
V.A of this document. The Joint Agreement's standards for RCWs apply to
all products listed in Table I.1 manufactured in, or imported into, the
United States starting on March 1, 2028.

Table I.1--Energy Conservation Standards for Residential Clothes Washers
[Compliance starting March 1, 2028]
------------------------------------------------------------------------
Minimum energy Minimum water
Product class efficiency ratio efficiency ratio
(lb/kWh/cycle) (lb/gal/cycle)
------------------------------------------------------------------------
Automatic Clothes Washers:

[[Page 19028]]

Top-Loading Ultra-Compact 3.79 0.29
(less than 1.6 ft\3\
capacity)....................
Top-Loading Standard-Size (1.6 4.27 0.57
ft\3\ or greater capacity)
with an average cycle time of
30 minutes or greater........
Front-Loading Compact (less 5.02 0.71
than 3.0 ft\3\ capacity) *...
Front-Loading Standard-Size 5.52 0.77
(3.0 ft\3\ or greater
capacity) with an average
cycle time of 45 minutes or
greater......................
Semi-Automatic Clothes Washers.... 2.12 0.27
------------------------------------------------------------------------
* The standards in this table do not apply to front-loading clothes
washers with a capacity greater than or equal to 1.6 ft\3\ and less
than 3.0 ft\3\ with an average cycle time of less than 45 minutes.

A. Benefits and Costs to Consumers

Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of RCWs, as measured by the average
life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\7\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of RCWs, which
is estimated to be 13.4 years (see section IV.F.6 of this document).
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\7\ 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.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).

Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers
of Residential Clothes Washers
------------------------------------------------------------------------
Average LCC Simple payback
Product class savings (2022$) period (years)
------------------------------------------------------------------------
Automatic Clothes Washers:
Top-Loading Ultra-Compact n.a n.a.
(less than 1.6 ft\3\
capacity) *..................
Top-Loading Standard-Size (1.6 $111 6.2
ft\3\ or greater capacity)...
Front-Loading Compact (less 9 9.3
than 3.0 ft\3\ capacity).....
Front-Loading Standard-Size 46 1.4
(3.0 ft\3\ or greater
capacity)....................
Semi-Automatic Clothes Washers.... 284 0.5
------------------------------------------------------------------------
* The entry ``n.a.'' means not applicable because the adopted standard
is at the baseline level.

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

B. Impact on Manufacturers 8
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\8\ All monetary values in this document are expressed in 2022
dollars and, where appropriate, are discounted to 2024 unless
explicitly stated otherwise.
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The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year (2024) through
the end of the analysis period, which is 30 years from the analyzed
compliance date.\9\ Using a real discount rate of 9.3 percent, DOE
estimates that the INPV for manufacturers of RCWs in the case without
amended standards is $1,707.9 million.\10\ Under the adopted standards,
which align with the efficiency levels recommended in the Joint
Agreement (represented by TSL 2, hereafter, the ``Recommended TSL'')
for RCWs, DOE estimates the change in INPV to range from -16.3 percent
to -8.6 percent, which is -$278.3 million to -$146.9 million. In order
to bring products into compliance with amended standards, it is
estimated that industry will incur total conversion costs of $320.0
million.
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\9\ DOE's analysis period extends 30-years from the compliance
year. The analysis period ranges from 2024-2056 for the no-new-
standards case and all TSLs, except for TSL 2 (the Recommended TSL).
The analysis period for the Recommended TSL ranges from 2024-2057
due to the 2028 compliance year.
\10\ The no-new-standards case INPV of $1,707.9 million reflects
the sum of discounted free cash flows from 2024-2056 (from the
reference year to 30 years after the 2027 compliance date) plus a
discounted terminal value.
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DOE's analysis of the impacts of the adopted standards on
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs 11
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\11\ All monetary values in this document are expressed in 2022
dollars and, where appropriate, are discounted to 2024 unless
explicitly stated otherwise.
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DOE's analyses indicate that the adopted energy conservation
standards for RCWs would save a significant amount of energy and water.
Relative to the case without amended standards, the lifetime energy and
water savings for RCWs purchased in the 30-year period that begins in
the anticipated year of compliance with the amended standards (2028-
2057), amount to 0.67 quadrillion British thermal units (``Btu''), or
quads of energy and 1.89 trillion gallons of water, respectively.\12\
This represents a savings of 3.1 percent relative to the energy use of
these products in the case without amended standards (referred to as
the ``no-new-standards case'').
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\12\ 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.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for RCWs ranges from $3.28 billion (at a 7-
percent discount rate) to $8.71 billion (at a 3-percent discount rate).
This NPV expresses the

[[Page 19029]]

estimated total value of future operating-cost savings minus the
estimated increased product costs and installation costs for RCWs
purchased during the period 2028-2057.
In addition, the adopted standards for RCWs are projected to yield
significant environmental benefits. DOE estimates that the standards
will result in cumulative emission reductions (over the same period as
for energy savings) of 13.96 million metric tons (``Mt'') \13\ of
carbon dioxide (``CO<INF>2</INF>''), 3.65 thousand tons of sulfur
dioxide (``SO<INF>2</INF>''), 27.74 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 124.57 thousand tons of methane
(``CH<INF>4</INF>''), 0.12 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.02 tons of mercury (``Hg'').\14\ The
estimated cumulative reduction in CO<INF>2</INF> emissions through 2030
amounts to 0.46 Mt, which is equivalent to the emissions resulting from
the annual electricity use of more than 89 thousand homes.
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\13\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\14\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the Inflation Reduction Act. See section IV.K of this
document for further discussion of AEO2023 assumptions that effect
air pollutant emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') 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
GHG (``SC-GHG''). DOE used interim SC-GHG values (in terms of benefit
per ton of GHG avoided) developed by an Interagency Working Group on
the Social Cost of Greenhouse Gases (``IWG'').\15\ 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 $0.84
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 sets of SC-GHG estimates.
---------------------------------------------------------------------------

\15\ To monetize the benefits of reducing GHG emissions this
analysis uses the interim estimates presented in the Technical
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide
Interim Estimates Under Executive Order 13990 published in February
2021 by the IWG (``February 2021 SC-GHG TSD''). 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>.
---------------------------------------------------------------------------

DOE estimated the monetary health benefits of SO<INF>2</INF> and
NO<INF>X</INF> emissions reductions, using benefit per ton estimates
from the Environmental Protection Agency,\16\ as discussed in section
IV.L of this document. DOE estimated the present value of the health
benefits would be $0.73 billion using a 7-percent discount rate, and
$1.62 billion using a 3-percent discount rate.\17\ DOE is currently
only monetizing health benefits from changes in ambient fine
particulate matter (``PM<INF>2.5</INF>'') concentrations from two
precursors (SO<INF>2</INF> and NO<INF>X</INF>), and from changes in
ambient ozone from one precursor (for NO<INF>X</INF>), 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.
---------------------------------------------------------------------------

\16\ U.S. Environmental Protection Agency (``EPA''). Estimating
the Benefit per Ton of Reducing Directly Emitted PM<INF>2.5</INF>,
PM<INF>2.5</INF> Precursors and Ozone Precursors from 21 Sectors.
Available at <a href="http://www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors">www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors</a>.
\17\ 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.
---------------------------------------------------------------------------

Table I.3 summarizes the monetized benefits and costs expected to
result from the amended standards for RCWs. There are other important
unquantified effects, including certain unquantified climate benefits,
unquantified public health benefits from the reduction of toxic air
pollutants and other emissions, unquantified energy security benefits,
and distributional effects, among others.

Table I.3--Summary of Monetized Benefits and Costs of Adopted Energy
Conservation Standards for Residential Clothes Washers
------------------------------------------------------------------------
Billion $2022
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings...................... 17.92
Climate Benefits *................................... 0.84
Health Benefits **................................... 1.62
------------------
Total Benefits [dagger].......................... 20.38
Consumer Incremental Product Costs [Dagger].......... 9.20
------------------
Net Monetized Benefits........................... 8.71
Change in Producer Cash Flow (INPV [Dagger][Dagger]). (0.28)-(0.15)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings...................... 8.65
Climate Benefits * (3% discount rate)................ 0.84
Health Benefits **................................... 0.73
------------------
Total Benefits [dagger].......................... 10.22
Consumer Incremental Product Costs [Dagger].......... 5.37
------------------
Net Monetized Benefits........................... 3.28
Change in Producer Cash Flow (INPV [Dagger][Dagger]). (0.28)-(0.15)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs
shipped in 2028-2057. These results include consumer, climate, and
health benefits that accrue after 2057 from the products shipped in
2028-2057.

[[Page 19030]]

* Climate benefits are calculated using four different estimates of the
global SC-GHG (see section IV.L of this document). For presentational
purposes of this table, the climate benefits associated with the
average SC-GHG at a 3 percent discount rate are shown; however, DOE
emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates. To monetize the
benefits of reducing GHG emissions this analysis uses the interim
estimates presented in the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive
Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits 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. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
health benefits that can be quantified and monetized. 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 DOE does not have a single central SC-GHG point estimate.
DOE emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's
national impacts analysis includes all impacts (both costs and
benefits) along the distribution chain beginning with the increased
costs to the manufacturer to manufacture the product and ending with
the increase in price experienced by the consumer. DOE also separately
conducts a detailed analysis on the impacts on manufacturers (i.e.,
manufacturer impact analysis, or ``MIA''). See section IV.J of this
document. In the detailed MIA, DOE models manufacturers' pricing
decisions based on assumptions regarding investments, conversion
costs, cash flow, and margins. The MIA produces a range of impacts,
which is the rule's expected impact on the INPV. The change in INPV is
the present value of all changes in industry cash flow, including
changes in production costs, capital expenditures, and manufacturer
profit margins. Change in INPV is calculated using the industry
weighted average cost of capital value of 9.3 percent that is
estimated in the MIA (see chapter 12 of the direct final rule
technical support document (``TSD'') for a complete description of the
industry weighted average cost of capital). For RCWs, the change in
INPV ranges from -$279 million to -$147 million. DOE accounts for that
range of likely impacts in analyzing whether a TSL is economically
justified. See section V.C of this document. DOE is presenting the
range of impacts to the INPV under two manufacturer markup scenarios:
the Preservation of Gross Margin scenario, which is the manufacturer
markup scenario used in the calculation of Consumer Operating Cost
Savings in this table, and the Preservation of Operating Profit
scenario, where DOE assumed manufacturers would not be able to
increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated
change in INPV in the previous table, drawing on the MIA explained
further in section IV.J of this document to provide additional context
for assessing the estimated impacts of this direct final rule to
society, including potential changes in production and consumption,
which is consistent with Office of Management and Budget (``OMB'')
Circular A-4 and Executive Order (``E.O.'') 12866. If DOE were to
include the change in INPV into the net benefit calculation for this
direct final rule, the net benefits would range from $8.43 billion to
$8.56 billion at 3-percent discount rate and would range from $3.00
billion to $3.13 billion at 7-percent discount rate. Parentheses ()
indicate negative values.

The benefits and costs of the adopted standards 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 climate and health benefits
of emission reductions, all annualized.\18\
---------------------------------------------------------------------------

\18\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2024, 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., 2020 or 2030), and then discounted the present value from
each year to 2024. 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 cost 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 RCWs shipped in
2028-2057. The benefits associated with reduced emissions achieved as a
result of the adopted standards are also calculated based on the
lifetime of RCWs shipped in 2028-2057. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social
costs with 3-percent discount rate. Estimates of total benefits values
are presented for all four SC-GHG discount rates in section V.B.6 of
this document.
Table I.4 presents the total estimated monetized benefits and costs
associated with the adopted standard, expressed in terms of annualized
values. 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 NO<INF>X</INF> and SO<INF>2</INF>
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated cost of the standards adopted
in this rule is $530.1 million per year in increased equipment costs,
while the estimated annual benefits are $853.9 million in reduced
equipment operating costs, $46.9 million in climate benefits, and $71.9
million in health benefits. In this case, the net benefit would amount
to $442.5 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $513.1 million per year in increased
equipment costs, while the estimated annual benefits are $998.9 million
in reduced operating costs, $46.9 million in climate benefits, and
$90.3 million in health benefits. In this case, the net benefit would
amount to $623.0 million per year.

Table I.4--Annualized Benefits and Costs of Adopted Standards for Residential Clothes Washers
[2028-2057]
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 998.9 957.2 1,020.9
Climate Benefits *.............................................. 46.9 45.2 47.5
Health Benefits **.............................................. 90.3 87.1 91.6
-----------------------------------------------
Total Benefits [dagger]..................................... 1,136.1 1,089.5 1,160.0
Consumer Incremental Product Costs [Dagger]..................... 513.1 551.8 468.6
-----------------------------------------------

[[Page 19031]]

Net Benefits................................................ 623.0 537.7 691.4
Change in Producer Cash Flow (INPV [Dagger][Dagger])............ (27)-(14) (27)-(14) (27)-(14)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 853.9 821.2 871.7
Climate Benefits * (3% discount rate)........................... 46.9 45.2 47.5
Health Benefits **.............................................. 71.9 69.6 72.8
-----------------------------------------------
Total Benefits [dagger]..................................... 972.6 935.9 992.0
Consumer Incremental Product Costs [Dagger]..................... 530.1 564.6 489.5
-----------------------------------------------
Net Benefits................................................ 442.5 371.3 502.5
Change in Producer Cash Flow (INPV [Dagger][Dagger])............ (27)-(14) (27)-(14) (27)-(14)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs shipped in 2028-2057. These results
include consumer, climate, and health benefits that accrue after 2057 from the products shipped in 2028-2057.
The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the
Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the
Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but 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 sets of SC-GHG
estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits 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. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
the increased costs to the manufacturer to manufacture the product and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
(MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers' pricing decisions
based on assumptions regarding investments, conversion costs, cash flow, and margins. The MIA produces a range
of impacts, which is the rule's expected impact on the INPV. The change in INPV is the present value of all
changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer
profit margins. The annualized change in INPV is calculated using the industry weighted average cost of
capital value of 9.3 percent that is estimated in the MIA (see chapter 12 of the direct final rule TSD for a
complete description of the industry weighted average cost of capital). For RCWs, the annualized change in
INPV ranges from -$27 million to -$14 million. DOE accounts for that range of likely impacts in analyzing
whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of
impacts to the INPV under two manufacturer markup scenarios: the Preservation of Gross Margin scenario, which
is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table,
and the Preservation of Operating Profit scenario, where DOE assumed manufacturers would not be able to
increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes
the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in
section IV.J of this document to provide additional context for assessing the estimated impacts of this direct
final rule to society, including potential changes in production and consumption, which is consistent with
OMB's Circular A-4 and E.O. 12866. If DOE were to include the annualized change in INPV into the annualized
net benefit calculation for this direct final rule, the annualized net benefits, using the primary estimate,
would range from $596 million to $609 million at 3-percent discount rate and would range from $415 million to
$428 million at 7-percent discount rate. Parentheses () indicate negative values.

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

D. Conclusion

DOE has determined that the Joint Agreement was submitted jointly
by interested persons that are fairly representative of relevant points
of view, in accordance with 42 U.S.C. 6295(p)(4)(A). After considering
the recommended standards and weighing the benefits and burdens, DOE
has determined that the recommended standards are in accordance with 42
U.S.C. 6295(o), which contains the criteria for prescribing new or
amended standards. Specifically, the Secretary of Energy
(``Secretary'') has determined that the adoption of the recommended
standards would result in the significant conservation of energy and
water and is the maximum improvement in energy efficiency that is
technologically feasible and economically justified. In determining
whether the recommended standards are economically justified, the
Secretary has determined that the benefits of the recommended standards
exceed the burdens. The Secretary has further concluded that the
recommended standards, when considering the benefits of energy and
water savings, positive NPV of consumer benefits, emission reductions,
the estimated monetary value of the emissions reductions, and positive
average LCC savings, would yield benefits that outweigh the negative
impacts on some consumers and on manufacturers, including the
conversion costs that could result in a reduction in INPV for
manufacturers.

[[Page 19032]]

Using a 7-percent discount rate for consumer benefits and costs and
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for RCWs is $495.4 million per year in increased product
costs, while the estimated annual benefits are $798.0 million in
reduced product operating costs, $45.5 million in climate benefits, and
$67.2 million in health benefits. The net benefit amounts to $415.2
million per year. DOE notes that the net benefits are substantial even
in the absence of the climate benefits,\19\ and DOE would adopt the
same standards in the absence of such benefits.
---------------------------------------------------------------------------

\19\ The information on climate benefits is provided in
compliance with Executive Order 12866.
---------------------------------------------------------------------------

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, 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. Accordingly, DOE evaluates
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

\20\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

As previously mentioned, the standards are projected to result in
estimated national energy savings of 0.67 quads FFC, the equivalent of
the primary annual energy use of 4.5 million homes. In addition, they
are projected to reduce cumulative CO<INF>2</INF> emissions by 13.96
Mt. Based on these findings, DOE has determined the energy savings from
the standard levels adopted in this direct final rule are
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B). A more
detailed discussion of the basis for these conclusions is contained in
the remainder of this document and the accompanying TSD.\21\
---------------------------------------------------------------------------

\21\ The TSD is available in the docket for this rulemaking at
<a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0014">www.regulations.gov/docket/EERE-2017-BT-STD-0014</a>.
---------------------------------------------------------------------------

Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is
issuing this direct final rule amending the energy conservation
standards for RCWs. Consistent with this authority, DOE is also
simultaneously publishing elsewhere in this Federal Register a NOPR
proposing standards that are identical to those contained in this
direct final rule. See 42 U.S.C. 6295(p)(4)(A)(i).

II. Introduction

The following section briefly discusses the statutory authority
underlying this direct final rule, as well as some of the relevant
historical background related to the establishment of standards for
RCWs.

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 RCWs, the
subject of this document. (42 U.S.C. 6292(a)(7)) EPCA prescribed energy
conservation standards for these products (42 U.S.C. 6295(g)(2) and
(g)(9)(A)), and directed DOE to conduct future rulemakings to determine
whether to amend these standards. (42 U.S.C. 6295(g)(4) and (g)(9)(B))
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))
In establishing energy conservation standards with both energy and
water use performance standards for RCWs manufactured after January 1,
2011, Congress also directed DOE to ``determin[e] whether to amend''
those standards. (42 U.S.C. 6295(g)(9)(B)) Congress's directive, in
section 6295(g)(9)(B), to consider whether ``to amend the standards in
effect for RCWs'' refers to ``the standards'' established in the
immediately preceding paragraph, 6295(g)(9)(A). There, Congress
established energy conservation standards with both energy and water
use performance standards for RCWs. Indeed, the energy and water use
performance standards for RCWs (both top-loading and front-loading) are
each contained within a single subparagraph. See id. Everything in
section 6295(g)(9) suggests that Congress intended both of those twin
standards to be evaluated when it came time, ``[n]ot later than
December 13, 2011,'' to consider amending them. (Id. 6295(g)(9)(B)(i))
Accordingly, DOE understands its authority, under 6295(g)(9)(B), to
include consideration of amended energy and water use performance
standards for RCWs.
DOE similarly understands its authority under 42 U.S.C. 6295(m) to
amend ``standards'' for covered products to include amending both the
energy and water use performance standards for RCWs. Neither section
6295(g)(9)(B) nor section 6295(m) limit their application to ``energy
use standards.'' Rather, they direct DOE to consider amending ``the
standards,'' 42 U.S.C. 6295(g)(9)(B), or simply ``standards,'' id.
6295(m)(1)(B), which may include both energy use standards and water
use standards.
Finally, DOE is promulgating these standards as a direct final rule
pursuant to 42 U.S.C. 6295(p)(4). That section also extends broadly to
any ``energy or water conservation standard'' without qualification.
Thus, pursuant to section 6295(p)(4), DOE may, so long as the other
relevant conditions are satisfied, promulgate a direct final rule that
includes water use performance standards for a covered product like
RCWs, where Congress has already established energy and water use
performance standards.
DOE is aware that the definition of ``energy conservation
standard,'' in section 6291(6), expressly references water use only for
four products specifically named: showerheads, faucets, water closets,
and urinals. See id. However, DOE does not read the language in 6291(6)
as fully delineating the scope of DOE's authority under EPCA. Rather,
as is required of agencies in applying a statute, individual
provisions, including section 6291(6) of EPCA, must be read in the
context of the statute as a whole.
The energy conservation program was initially limited to addressing
the energy use, meaning electricity and fossil fuels, of 13 covered
products. (See sections 321 and 322 of the Energy and Policy
Conservation Act, Pub. L. 94-163, 89 Stat. 871 (December 22, 1975))
Since its inception, Congress has expanded the scope of the energy
conservation program several times, including by adding covered
products, prescribing energy conservation standards for various
products, and by addressing water use for certain covered products. For
example, in the Energy Policy Act of 1992, Congress amended the list of
covered products in 42 U.S.C. 6292 to include showerheads, faucets,
water closets and urinals and expanded DOE's authority to regulate
water use for these products. (See sec. 123, Energy Policy Act of 1992,
Pub. L. 102-486, 106 Stat. 2776 (Oct. 24, 1992)) When it did so,
Congress also made corresponding changes to the definition of
``consumer

[[Page 19033]]

product'' (42 U.S.C. 6291(1)), the definition of ``energy conservation
standard'' (42 U.S.C. 6291(6)), the section governing the promulgation
of test procedures (42 U.S.C. 6293), the criteria for prescribing new
or amended energy conservation standards (42 U.S.C. 6295(o)), and
elsewhere in EPCA.
Later, Congress further expanded the scope of the energy
conservation program several times. For instance, Congress added
products and standards directly to 42 U.S.C. 6295, the section of EPCA
that contains statutorily prescribed standards as well as DOE's
standard-setting authorities. See 42 U.S.C. 6295(a) (stating that the
``purposes of this section are to--(1) provide Federal energy
conservation standards applicable to covered products; and (2)
authorize the Secretary to prescribe amended or new energy conservation
standards for each type (or class) of covered product.''). When
Congress added these new standards and standard-setting authorities to
42 U.S.C. 6295 after the Energy Policy Act of 1992, it often did so
without making any conforming changes to other provisions in EPCA,
e.g., sections 6291 or 6292. For example, in the Energy Policy Act of
2005, Congress prescribed standards by statute, or gave DOE the
authority to set standards for, battery chargers, external power
supplies, ceiling fans, ceiling fan light kits, beverage vending
machines, illuminated exit signs, torchieres, low voltage dry-type
distribution transformers, traffic signal modules and pedestrian
modules, certain lamps, dehumidifiers, and commercial prerinse spray
valves in 42 U.S.C. 6295 without updating the list of covered products
in 42 U.S.C. 6292. (See sec. 135, Energy Policy Act of 2005, 119 Stat.
594 (Aug. 8, 2005))
Congress also expanded the scope of the energy conservation program
by directly adding water use performance standards for certain products
to 42 U.S.C. 6295. For example, in the Energy Policy Act of 2005,
Congress added a water use performance standard (but no energy use
performance standard) for commercial prerinse spray valves (``CPSVs'')
and did so without updating the list of covered products in 42 U.S.C.
6292 to include CPSVs and without adding CPSVs to the list of
enumerated products with water use performance standards in the
``energy conservation standard'' definition in 42 U.S.C. 6291(6). In
the Energy Independence and Security Act of 2007 (``EISA 2007''),
Congress amended 42 U.S.C. 6295 by prescribing standards for RCWs and
dishwashers that included both energy and water use performance
standards. (See sec. 301, EISA 2007, Pub. L. 110-140, 121 Stat. 1492
(Dec. 19, 2007)) Again, when it did so, Congress did not add these
products to the list of enumerated products with water use performance
standards in the definition of ``energy conservation standard'' in 42
U.S.C. 6291(6).
In considering how to treat these products and standards that
Congress has directly added to 42 U.S.C. 6295 without making conforming
changes to the rest of the statute, including the list of covered
products in 42 U.S.C. 6292, and the water-use products in the
definition of an ``energy conservation standard,'' DOE construes the
statute as a whole. When Congress added products and standards directly
to 42 U.S.C. 6295 it must have meant those products to be covered
products and those standards to be energy conservation standards, given
that the purpose of 42 U.S.C. 6295 is to provide ``energy conservation
standards applicable to covered products'' and to ``authorize the
Secretary to prescribe amended or new energy conservation standards for
each type (or class) of covered product.'' Elsewhere in EPCA, the
statute's references to covered products and energy conservation
standards can only be read coherently as including the covered products
and energy conservation standards Congress added directly to section
6295, even if Congress did not make conforming edits to 6291 or 6292.
For example, manufacturers are prohibited from ``distribut[ing] in
commerce any new covered product which is not in conformity with an
applicable energy conservation standard.'' (42 U.S.C. 6302(a)(5)
(emphasis added)) It would defeat congressional intent to allow a
manufacturer to distribute a product, e.g., a CPSV or ceiling fan, that
violates an applicable energy conservation standard that Congress
prescribed simply because Congress added the product directly to 42
U.S.C. 6295 without also updating the list of covered products in 42
U.S.C. 6292(a). In addition, preemption in EPCA is based on ``the
effective date of an energy conservation standard established in or
prescribed under section 6295 of this title for any covered product.''
(42 U.S.C. 6297(c) (emphasis added)) Nothing in EPCA suggests that
standards Congress adopted in 6295 lack preemptive effect, merely
because Congress did not make conforming amendments to 6291, 6292, or
6293.
It would similarly defeat congressional intent for a manufacturer
to be permitted to distribute a covered product, e.g., a clothes washer
or dishwasher, that violates a water use performance standard because
Congress added the standard to 42 U.S.C. 6295 without also updating the
definition of energy conservation standard in 42 U.S.C. 6291(6). By
prescribing directly, in 6295(g)(9), energy conservation standards for
RCWs that include both energy and water use performance standards,
Congress intended that energy conservation standards for RCWs include
both energy use and water use.
DOE recognizes that some might argue that Congress's specific
reference in section 6291(6) to water standards for showerheads,
faucets, water closets, and urinals could ``create a negative
implication'' that energy conservations standards for other covered
products may not include water use standards. See Marx v. Gen. Revenue
Corp., 568 U.S. 371, 381 (2013). ``The force of any negative
implication, however, depends on context.'' Id.; see also NLRB v. SW
Gen., Inc., 580 U.S. 288, 302 (2017) (``The expressio unius canon
applies only when circumstances support a sensible inference that the
term left out must have been meant to be excluded.'' (Alterations and
quotation marks omitted)). In this context, the textual and structural
cues discussed above show that Congress did not intend to exclude from
the definition of energy conservation standard the water use
performance standards that it specifically prescribed, and directed DOE
to amend, in section 6295. To conclude otherwise would negate the plain
text of 6295(g)(9). Furthermore, to the extent the definition of energy
conservation standards in section 6291(6), which was last amended in
the Energy Policy Act of 1992, could be read as in conflict with the
energy and water use performance standards prescribed by Congress in
EISA 2007, any such conflict should be resolved in favor of the more
recently enacted statute. See United States v. Estate of Romani, 523
U.S. 517, 530-31 (1998) (``[A] specific policy embodied in a later
Federal statute should control our construction of the priority
statute, even though it had not been expressly amended.'').
Accordingly, based on a complete reading of the statute, DOE has
determined that products and standards added directly to 42 U.S.C. 6295
are appropriately considered ``covered products'' and ``energy
conservation standards'' for the purposes of applying the various
provisions in EPCA.
The energy conservation program 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

[[Page 19034]]

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 in limited instances 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(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 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 RCWs appear at 10 CFR part 430,
subpart B, appendices J (``appendix J'') and J2 (``appendix J2'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including RCWs. Any new or
amended standard for a covered product must be designed to achieve the
maximum improvement in energy efficiency that the Secretary determines
is technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would
not result in the significant conservation of energy. (42 U.S.C.
6295(o)(3)(B))
Moreover, DOE may not prescribe a standard if DOE determines by
rule that the standard is not technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(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, 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 considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, 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, as codified, 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))
EPCA specifies requirements when promulgating an energy
conservation standard for a covered product that has two or more
subcategories. A rule prescribing an energy conservation standard for a
type (or class) of product must specify a different standard level for
a type or class of products 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 considers such factors as the utility to the consumer of such a
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))
Additionally, pursuant to the amendments contained in the EISA
2007, Public Law 110-140, final rules for new or amended energy
conservation standards promulgated after July 1, 2010, are 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 RCWs address standby mode and off mode energy use, as do the
amended standards adopted in this direct final rule.
Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE
authority to issue a final rule (i.e., a ``direct final rule'')
establishing an energy conservation standard upon receipt of a
statement submitted jointly by interested persons that are fairly
representative of relevant points of view (including representatives of
manufacturers of covered products, States, and efficiency advocates),
as determined by the Secretary, that contains recommendations with
respect to an energy or water conservation standard. (42 U.S.C.
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also
determine whether a jointly-submitted recommendation for an energy or
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable.

[[Page 19035]]

The direct final rule must be published simultaneously with a NOPR
that proposes an energy or water conservation standard that is
identical to the standard established in the direct final rule, and DOE
must provide a public comment period of at least 110 days on the
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) While DOE typically provides a
comment period of 60 days on proposed standards, for a NOPR
accompanying a direct final rule, DOE provides a comment period of the
same length as the comment period on the direct final rule--i.e., 110
days. Based on the comments received during this period, the direct
final rule will either become effective, or DOE will withdraw it not
later than 120 days after its issuance if: (1) one or more adverse
comments is received, and (2) DOE determines that those comments, when
viewed in light of the rulemaking record related to the direct final
rule, may provide a reasonable basis for withdrawal of the direct final
rule under 42 U.S.C. 6295(o). (42 U.S.C. 6295(p)(4)(C)) Receipt of an
alternative joint recommendation may also trigger a DOE withdrawal of
the direct final rule in the same manner. (Id.)
DOE has previously explained its interpretation of its direct final
rule authority. In a final rule amending the Department's ``Procedures,
Interpretations and Policies for Consideration of New or Revised Energy
Conservation Standards for Consumer Products'' at 10 CFR part 430,
subpart C, appendix A (``Process Rule'' or ``appendix A''), DOE noted
that it may issue standards recommended by interested persons that are
fairly representative of relative points of view as a direct final rule
when the recommended standards are in accordance with 42 U.S.C. 6295(o)
or 42 U.S.C. 6313(a)(6)(B), as applicable. 86 FR 70892, 70912 (Dec. 13,
2021). But the direct final rule provision in EPCA does not impose
additional requirements applicable to other standards rulemakings,
which is consistent with the unique circumstances of rules issued
through consensus agreements under DOE's direct final rule authority.
Id. DOE's discretion remains bounded by its statutory mandate to adopt
a standard that results in the maximum improvement in energy efficiency
that is technologically feasible and economically justified--a
requirement found in 42 U.S.C. 6295(o). Id. As such, DOE's review and
analysis of the Joint Agreement is limited to whether the recommended
standards satisfy the criteria in 42 U.S.C. 6295(o).

B. Background

1. Current Standards
In a direct final rule published on May 31, 2012 (``May 2012 Direct
Final Rule''), DOE prescribed the current energy conservation standards
for RCWs manufactured on or after January 1, 2018. 77 FR 32308.\22\
These standards are set forth in DOE's regulations at 10 CFR
430.32(g)(4). These standards are consistent with a prior joint
proposal submitted to DOE by interested parties representing
manufacturers, energy and environmental advocates, and consumer
groups.\23\ The current standards are defined in terms of a minimum
allowable integrated modified energy factor (``IMEF''), measured in
cubic feet per kilowatt-hour per cycle (``ft\3\/kWh/cycle''), and
maximum allowable integrated water factor (``IWF''), measured in
gallons per cycle per cubic foot (``gal/cycle/ft\3\''), as measured
according to appendix J2.
---------------------------------------------------------------------------

\22\ DOE published a confirmation of effective date and
compliance date for the direct final rule on October 1, 2012. 77 FR
59719.
\23\ Available at <a href="http://www.regulations.gov/document/EERE-2008-BT-STD-0019-0032">www.regulations.gov/document/EERE-2008-BT-STD-0019-0032</a>.

Table II.1--Federal Energy Efficiency Standards for Residential Clothes
Washers
------------------------------------------------------------------------
Minimum integrated
modified energy Maximum integrated
Product class factor (ft\3\/kWh/ water factor (gal/
cycle) cycle/ft\3\)
------------------------------------------------------------------------
Top-Loading, Compact (less 1.15 12.0
than 1.6 ft\3\ capacity)...
Top-Loading, Standard (1.6 1.57 6.5
ft\3\ or greater capacity).
Front-Loading, Compact (less 1.13 8.3
than 1.6 ft\3\ capacity)...
Front-Loading, Standard (1.6 1.84 4.7
ft\3\ or greater capacity).
------------------------------------------------------------------------

For top-loading semi-automatic clothes washers, a design standard
currently applies, which requires such products to have an unheated
rinse water option. 10 CFR 430.32(g)(1).
2. Current Test Procedure
As discussed, DOE's current energy conservation standards for RCWs
are expressed in terms of IMEF and IWF as measured using appendix J2.
(See 10 CFR 430.32(g)(4))
In a final rule published on June 1, 2022 (``June 2022 TP Final
Rule''), DOE finalized a new test procedure (TP) at appendix J, which
defines new energy efficiency metrics: an energy efficiency ratio
(i.e., EER) and a water efficiency ratio (i.e., WER). 87 FR 33316,
33319. EER is defined as the quotient of the weighted-average load size
divided by the total clothes washer energy consumption per cycle, with
such energy consumption expressed as the sum of (1) the machine
electrical energy consumption, (2) the hot water energy consumption,
(3) the energy required for removal of the remaining moisture in the
wash load, and (4) the combined low-power mode energy consumption. 10
CFR part 430 subpart B, appendix J, section 1. WER is defined as the
quotient of the weighted-average load size divided by the total
weighted per-cycle water consumption for all wash cycles in gallons.
Id. For both EER and WER, a higher value indicates more efficient
performance. The standards enacted by this direct final rule are
expressed in terms of the EER and WER metrics as measured according to
the newly established test procedure contained in appendix J.
---------------------------------------------------------------------------

\24\ The signatories to the Joint Agreement include AHAM,
American Council for an Energy-Efficient Economy, Alliance for Water
Efficiency, Appliance Standards Awareness Project, Consumer
Federation of America, Consumer Reports, Earthjustice, National
Consumer Law Center, Natural Resources Defense Council, Northwest
Energy Efficiency Alliance, and Pacific Gas and Electric Company.
Members of AHAM's Major Appliance Division that make the affected
products include: Alliance Laundry Systems, LLC; Asko Appliances AB;
Beko US Inc.; Brown Stove Works, Inc.; BSH Home Appliances
Corporation; Danby Products, Ltd.; Electrolux Home Products, Inc.;
Elicamex S.A. de C.V.; Faber; Fotile America; GE Appliances, a Haier
Company; L'Atelier Paris Haute Design LLG; LG Electronics; Liebherr
USA, Co.; Midea America Corp.; Miele, Inc.; Panasonic Appliances
Refrigeration Systems (PAPRSA) Corporation of America; Perlick
Corporation; Samsung Electronics America Inc.; Sharp Electronics
Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The Middleby
Corporation; U-Line Corporation; Viking Range, LLC; and Whirlpool
Corporation.
---------------------------------------------------------------------------

3. The Joint Agreement
On September 25, 2023, DOE received a joint statement (i.e., the
Joint Agreement) recommending standards

[[Page 19036]]

for RCWs, that was submitted by groups representing manufacturers,
energy and environmental advocates, consumer groups, and a utility.\24\
In addition to the recommended standards for RCWs, the Joint Agreement
also included separate recommendations for several other covered
products.\25\ And, while acknowledging that DOE may implement these
recommendations in separate rulemakings, the Joint Agreement also
stated that the recommendations were recommended as a complete package
and each recommendation is contingent upon the other parts being
implemented. DOE understands this to mean that the Joint Agreement is
contingent upon DOE initiating rulemaking processes to adopt all of the
recommended standards in the agreement. That is distinguished from an
agreement where issuance of an amended energy conservation standard for
a covered product is contingent on issuance of amended energy
conservation standards for the other covered products. If the Joint
Agreement were so construed, it would conflict with the anti-
backsliding provision in 42 U.S.C. 6295(o)(1), because it would imply
the possibility that, if DOE were unable to issue an amended standard
for a certain product, it would have to withdraw a previously issued
standard for one of the other products. The anti-backsliding provision,
however, prevents DOE from withdrawing or amending an energy
conservation standard to be less stringent. As a result, DOE will be
proceeding with individual rulemakings that will evaluate each of the
recommended standards separately under the applicable statutory
criteria.
---------------------------------------------------------------------------

\25\ The Joint Agreement contained recommendations for 6 covered
products: refrigerators, refrigerator-freezers, and freezers;
residential clothes washers; consumer clothes dryers; dishwashers;
consumer conventional cooking products; and miscellaneous
refrigeration products.
---------------------------------------------------------------------------

A court decision issued after DOE received the Joint Agreement is
also relevant to this rule. On March 17, 2022, various States filed a
petition seeking review of a final rule revoking two final rules that
established product classes for residential dishwashers with a cycle
time for the normal cycle of 60 minutes or less, top-loading RCWs and
certain classes of consumer clothes dryers with a cycle time of less
than 30 minutes, and front-loading RCWs with a cycle time of less than
45 minutes (collectively, ``short cycle product classes''). The
petitioners argued that the final rule revoking the short cycle product
classes violated EPCA and was arbitrary and capricious. On January 8,
2024, the United States Court of Appeals for the Fifth Circuit granted
the petition for review and remanded the matter to DOE for further
proceedings consistent with the Fifth Circuit's opinion. See Louisiana
v. United States Department of Energy, 90 F.4th 461 (5th Cir. 2024).
On February 14, 2024, following the Fifth Circuit's decision in
Louisiana v. United States Department of Energy, DOE received a second
joint statement from this same group of stakeholders in which the
signatories reaffirmed the Joint Agreement, stating that the
recommended standards represent the maximum levels of efficiency that
are technologically feasible and economically justified.\26\ In the
letter, the signatories clarified that ``short-cycle'' product classes
for RCWs, consumer clothes dryers, and dishwashers did not exist at the
time that the signatories submitted their recommendations and it is
their understanding that these classes also do not exist at the current
time. Accordingly, the parties clarified that the Joint Agreement did
not address short-cycle product classes. The signatories also stated
that they did not anticipate that the recommended energy conservation
standards in the Joint Agreement will negatively affect features or
performance, including cycle time, for RCWs.
---------------------------------------------------------------------------

\26\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509</a>.
---------------------------------------------------------------------------

The Joint Agreement recommends amended standard levels for RCWs as
presented in Table II.2. (Joint Agreement, No. 505 at p. 9) Details of
the Joint Agreement recommendations for other products are provided in
the Joint Agreement posted in the docket.\27\
---------------------------------------------------------------------------

\27\ The Joint Agreement is available in the docket at
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505</a>.

Table II.2--Recommended Amended Energy Conservation Standards for Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
Minimum energy Minimum water
Product class efficiency ratio (lb/ efficiency ratio (lb/ Compliance date
kWh/cycle) gal/cycle)
----------------------------------------------------------------------------------------------------------------
Top-Loading, Ultra-Compact (less than 3.79 0.29 March 1, 2028.
1.6 ft\3\ capacity).
Top-Loading, Standard-Size (1.6 ft\3\ or 4.27 0.57
greater capacity).
Front-Loading, Compact (less than 1.6 5.02 0.71
ft\3\ capacity).
Front-Loading, Standard-Size (1.6 ft\3\ 5.52 0.77
or greater capacity).
Semi-Automatic Clothes Washers.......... 2.12 0.27
----------------------------------------------------------------------------------------------------------------

When the Joint Agreement was submitted, DOE was conducting a
rulemaking to consider amending the standards for RCWs. As part of that
process, DOE published a NOPR and announced a public meeting on March
3, 2023 (``March 2023 NOPR''), seeking comment on its proposed amended
standards to inform its decision consistent with its obligations under
EPCA and the Administrative Procedure Act (``APA''). 88 FR 13520. The
March 2023 NOPR proposed amended standards defined in terms of the EER
and WER metrics as measured according to appendix J. Id. at 88 FR
13522. The March 2023 NOPR also proposed to re-establish a product
class, and establish new performance standards, for semi-automatic
clothes washers. Id. at 88 FR 13541.\28\ The March 2023 NOPR TSD is
available at: <a href="http://www.regulations.gov/document/EERE-2017-BT-STD-0014-0058">www.regulations.gov/document/EERE-2017-BT-STD-0014-0058</a>.
---------------------------------------------------------------------------

\28\ Top-loading semi-automatic clothes washers were subject to
a design standard requiring an unheated rinse water option, as
established by section 5(g) of the National Appliance Energy
Conservation Act of 1987, Public Law 100-12.
---------------------------------------------------------------------------

Although DOE is adopting the Joint Agreement as a direct final rule
and no longer proceeding with its own rulemaking, DOE did consider
relevant comments, data, and information obtained during that
rulemaking process in determining whether the recommended standards
from the Joint Agreement are in accordance with 42 U.S.C. 6295(o). Any
discussion of comments, data, or information in this direct final rule
that were obtained during DOE's prior rulemaking will include a
parenthetical reference that

[[Page 19037]]

provides the location of the item in the public record.\29\
---------------------------------------------------------------------------

\29\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for residential clothes washers.
(Docket No. EERE-2017-BT-STD-0014, 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 at page number of that
document).
---------------------------------------------------------------------------

III. General Discussion

DOE is issuing this direct final rule after determining that the
recommended standards submitted in the Joint Agreement meet the
requirements in 42 U.S.C. 6295(p)(4). More specifically, DOE has
determined that the recommended standards were submitted by interested
persons that are fairly representative of relevant points of view and
the recommended standards satisfy the criteria in 42 U.S.C. 6295(o).
On March 17, 2022, various States filed a petition seeking review
of a final rule revoking two final rules that established product
classes for residential dishwashers with a cycle time for the normal
cycle of 60 minutes or less, top-loading RCWs and certain classes of
consumer clothes dryers with a cycle time of less than 30 minutes, and
front-loading RCWs with a cycle time of less than 45 minutes
(collectively, ``short cycle product classes''). The petitioners argued
that the final rule revoking the short cycle product classes violated
EPCA and was arbitrary and capricious. On January 8, 2024, the United
States Court of Appeals for the Fifth Circuit granted the petition for
review and remanded the matter to DOE for further proceedings
consistent with the Fifth Circuit's opinion. See Louisiana v. United
States Department of Energy, 90 F.4th 461 (5th Cir. 2024).
Following the Fifth Circuit's decision, the signatories to the
Joint Agreement submitted a second letter to DOE, which stated that
Joint Recommendation did not ``address'' ``short-cycle product
classes.'' \30\ That is because, as the letter explained, such product
classes ``did not exist'' at the time of the Joint Agreement.
---------------------------------------------------------------------------

\30\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509</a>.
---------------------------------------------------------------------------

In a recently issued request for information (``RFI''),\31\ DOE is
commencing a rulemaking process on remand from the Fifth Circuit (the
``Remand Proceeding'') by soliciting further information, relevant to
the issues identified by the Fifth Circuit, regarding any short cycle
product classes. In that Remand Proceeding, DOE will conduct the
analysis required by 42 U.S.C. 6295(q)(1)(B) to determine whether any
short-cycle products have a ``capacity or other performance-related
feature [that] . . . justifies a higher or lower standard from that
which applies (or will apply) to other products. . . .''
---------------------------------------------------------------------------

\31\ See <a href="http://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=68">www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=68</a>.
---------------------------------------------------------------------------

The current standards applicable to any products within the scope
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(g).
Consistent with the Joint Parties' letter, short-cycle products are not
subject to the amended standards adopted by this direct final rule
(``DFR''). If the short-cycle products that DOE will consider in the
Remand Proceeding were subject to these standards, that would have the
practical effect of limiting the options available in the Remand
Proceeding. That is because EPCA's anti-backsliding provision precludes
DOE from prescribing any amended standard ``which increases the maximum
allowable energy use'' of a covered product. 42 U.S.C. 6295(o)(1).
Accordingly, were the products at issue in the Remand Proceeding also
subject to the amended standards adopted here, the Department could
only reaffirm the standards adopted in this direct final rule or adopt
more stringent standards.
The Joint Agreement specifies the product classes for RCWs: semi-
automatic; top-loading, ultra-compact; top-loading, standard-size;
front-loading, compact; and front-loading, standard-size. Although
these product classes were not further divided by cycle time, DOE
understands them to exclude top-loading standard-size RCWs with an
average cycle time of less than 30 minutes, and front-loading standard-
size RCWs with an average cycle time of less than 45 minutes. As noted
above, any such ``short-cycle'' RCWs will be considered in the Remand
Proceeding; the current standards applicable to such ``short-cycle''
RCWs are unchanged by this rule.
Under the direct final rule authority at 42 U.S.C. 6295(p)(4), DOE
evaluates whether recommended standards are in accordance with criteria
contained in 42 U.S.C. 6295(o). DOE does not have the authority to
revise recommended standards submitted under the direct final rule
provision in EPCA. Therefore, DOE did not analyze any additional
product classes beyond those product classes included in the Joint
Agreement. That is, DOE has not separately considered or established
amended standards applicable to any short-cycle product classes. In the
event that DOE establishes short-cycle product classes, pursuant to the
rulemaking on remand from the Fifth Circuit, DOE will necessarily
consider what amended standards ought to apply to any such product
classes and will do so in conformance with EPCA.
DOE notes that the data and analysis used to support this direct
final rule includes information for standard-size, top-loading and
front-loading clothes washers that is not distinguished by cycle time
and is representative of all clothes washers currently on the market
today. To the extent that any short cycle products were included in
this data and analysis, DOE believes the amount of such data is
negligible.

A. Scope of Coverage

Before discussing how the Joint Agreement meets the requirements
for issuing a direct final rule, it is important to clarify the scope
of coverage for the recommended standards. EPCA does not define the
term ``clothes washer.'' (See 42 U.S.C. 6291) DOE has defined a
``clothes washer'' as a consumer product designed to clean clothes,
utilizing a water solution of soap and/or detergent and mechanical
agitation or other movement, and must be one of the following classes:
automatic clothes washers, semi-automatic clothes washers, and other
clothes washers. 10 CFR 430.2. This direct final rule covers those
consumer products that meet the definition of ``clothes washer,'' as
codified at 10 CFR 430.2.
An ``automatic clothes washer'' is a class of clothes washer that
has a control system which is capable of scheduling a preselected
combination of operations, such as regulation of water temperature,
regulation of the water fill level, and performance of wash, rinse,
drain, and spin functions without the need for user intervention
subsequent to the initiation of machine operation. Some models may
require user intervention to initiate these different segments of the
cycle after the machine has begun operation, but they do not require
the user to intervene to regulate the water temperature by adjusting
the external water faucet valves. Id.
A ``semi-automatic clothes washer'' is a class of clothes washer
that is the same as an automatic clothes washer except that user
intervention is required to regulate the water temperature by adjusting
the external water faucet valves. Id. ``Other clothes washer'' means a
class of clothes washer that is not an automatic or semi-automatic
clothes washer. Id.
See section IV.A.1 of this document for discussion of the product
classes analyzed in this direct final rule.

B. Fairly Representative of Relevant Points of View

Under the direct final rule provision in EPCA, recommended energy

[[Page 19038]]

conservation standards must be submitted by interested persons that are
fairly representative of relevant points of view (including
representatives of manufacturers of covered products, States, and
efficiency advocates) as determined by DOE. (42 U.S.C. 6295(p)(4)(A))
With respect to this requirement, DOE notes that the Joint Agreement
included a trade association, the Association of Home Appliance
Manufacturers (``AHAM''), which represents 12 manufacturers of
RCWs.\32\ The Joint Agreement also included environmental and energy-
efficiency advocacy organizations, consumer advocacy organizations, and
a gas and electric utility company. Additionally, DOE received a letter
in support of the Joint Agreement from the States of New York,
California, and Massachusetts (see comment No. 506). DOE also received
a letter in support of the Joint Agreement from the gas and electric
utility, SDG&E, and the electric utility, SCE (see comment No. 507). As
a result, DOE has determined that the Joint Agreement was submitted by
interested persons who are fairly representative of relevant points of
view.
---------------------------------------------------------------------------

\32\ These companies include: Alliance Laundry Systems, LLC;
Asko Appliances AB; Beko US Inc.; BSH Home Appliances Corporation;
Danby Products, Ltd.; Electrolux Home Products, Inc.; GE Appliances,
a Haier Company; LG Electronics; Midea America Corp.; Miele, Inc.;
Samsung Electronics America Inc.; and Whirlpool Corporation.
---------------------------------------------------------------------------

C. Technological Feasibility

1. General
In each energy conservation standards rulemaking, 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. 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 the
Process Rule.
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.
Section 7(b)(2)-(5) of the Process Rule. Section IV.B of this document
discusses the results of the screening analysis for RCWs, 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 direct final rule TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt a new or 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(o)(2)(A))
Accordingly, in the engineering analysis, DOE determined the maximum
technologically feasible (``max-tech'') improvements in energy
efficiency for RCWs, 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 of this document and in chapter 5 of the direct final rule TSD.

D. Energy Savings

1. Determination of Savings
For each TSL, DOE projected energy savings from application of the
TSL to RCWs purchased in the 30-year period that begins in the year of
compliance with the amended standards (2027-2056 for all TSLs except
the Recommended TSL, i.e., TSL 2, and 2028-2057 for TSL 2).\33\ The
savings are measured over the entire lifetime of products purchased in
the 30-year analysis 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 amended energy conservation standards.
---------------------------------------------------------------------------

\33\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate national energy savings (``NES'') and national water
savings (``NWS'') from potential amended standards for RCWs. 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 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.\34\ 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.2 of this document.
---------------------------------------------------------------------------

\34\ 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 any new or amended 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))
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.\35\ For
example, 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.
---------------------------------------------------------------------------

\35\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
and the need to confront the global climate crisis, among other
factors.
As stated, the standard levels adopted in this direct final rule
are projected to result in national energy savings of 0.67 quads, the
equivalent of the primary annual energy use of 4.5 million homes. Based
on the amount of FFC savings, the corresponding reduction in emissions,

[[Page 19039]]

and the need to confront the global climate crisis, DOE has determined
the energy savings from the standard levels adopted in this direct
final rule are ``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 potential new or amended standards on
manufacturers, DOE conducts an 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 payback period (``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 cost (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 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 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 IV.H of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
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
adopted 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 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 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 direct final rule to the Attorney General with
a request that the Department of Justice (``DOJ'') provide its
determination on this issue. DOE will consider DOJ's comments on the
rule in determining whether to withdraw the direct final rule. DOE will
also publish and respond to the DOJ's comments in the Federal Register
in a separate document.
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 adopted 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 adopted standards are likely to result in
environmental

[[Page 19040]]

benefits in the form of reduced emissions of air pollutants and
greenhouse gases (``GHGs'') associated with energy production and use.
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.6
of this document. DOE also estimates the economic value of emissions
reductions resulting from the considered TSLs, as discussed in section
IV.L 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.''
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 effect potential amended
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 of this document.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to RCWs. Separate subsections address each
component of DOE's analyses, including relevant comments DOE received
during its separate rulemaking to amend the energy conservation
standards for RCWs prior to receiving the Joint Agreement.
DOE used several analytical tools to estimate the impact of the
standards considered 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 national impacts analysis 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 rulemaking: <a href="http://www.regulations.gov/docket/EERE-2017-BT-STD-0014">www.regulations.gov/docket/EERE-2017-BT-STD-0014</a>. Additionally, DOE used output from the
latest version of the U.S. Energy Information Administration (``EIA'')
Annual Energy Outlook (``AEO'') 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) identification of 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 RCW. The key findings of DOE's market assessment
are summarized in the following sections. See chapter 3 of the direct
final rule TSD for further discussion of the market and technology
assessment.
1. Product Classes
The Joint Agreement specifies the five product classes for RCWs.
(Joint Agreement, No. 505 at p. 9) In this direct final rule, DOE is
adopting the product classes from the Joint Agreement, as listed in
Table IV.1.

Table IV.1--Joint Agreement Residential Clothes Washer Product Classes
------------------------------------------------------------------------
Product class
-------------------------------------------------------------------------
Automatic Clothes Washers:
Top-Loading Ultra-Compact (less than 1.6 ft\3\ capacity).
Top-Loading Standard-Size (1.6 ft\3\ or greater capacity).
Front-Loading Compact (less than 3.0 ft\3\ capacity).
Front-Loading Standard-Size (3.0 ft\3\ or greater capacity).
Semi-Automatic Clothes Washers.
------------------------------------------------------------------------

DOE further notes that product classes established through EPCA's
direct final rule authority are not subject to the criteria specified
at 42 U.S.C. 6295(q)(1) for establishing product classes. Nevertheless,
in accordance with 42 U.S.C. 6295(o)(4)--which is applicable to direct
final rules--DOE has concluded that the standards adopted in this
direct final rule will not result in the unavailability in any covered
product type (or class) of performance characteristics, features,
sizes, capacities, and volumes that are substantially the same as those
generally available in the United States currently.\36\ DOE's findings
in this regard are discussed in detail in section V.B.4 of this
document.
---------------------------------------------------------------------------

\36\ EPCA specifies that DOE may not prescribe an amended or new
standard if the Secretary finds (and publishes such finding) that
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 at the time of the
Secretary's finding. (42 U.S.C. 6295(o)(4)).
---------------------------------------------------------------------------

2. Technology Options
In this direct final rule, DOE considered the technology options
listed in Table IV.2, consistent with the table of technology options
presented in the March 2023 NOPR. See 88 FR 13520, 13541. DOE notes
that it did not receive any comments regarding the technology options
analyzed in the March 2023 NOPR.
In general, technology options for RCWs may reduce energy use
alone, water use alone, or both energy and water use together. Because
the energy used to heat any hot water consumed by the RCW is included
as part of the EER metric, technologies that decrease hot water use
also inherently decrease energy use. In Table IV.2, the technology
options that reduce energy use alone are those indicated as methods for
decreasing machine energy, drying energy, and standby energy. One

[[Page 19041]]

technology option--spray rinse--reduces water use alone, listed among
the methods for decreasing water use.\37\ The technology options that
reduce both energy and water use together are the remaining three
options among the methods for decreasing water use, as well as those
indicated as methods for reducing water heating energy.
---------------------------------------------------------------------------

\37\ Since nearly all RCWs use only cold water in the rinse
portion of the cycle (i.e., generally no hot water is used in the
rinse portion of the cycle), spray rinse reduces water use without
any corresponding reduction in energy use.
---------------------------------------------------------------------------

Chapter 3 of the TSD for this direct final rule includes a detailed
list and descriptions of all technology options identified for RCWs,
including a discussion of how each technology option reduces energy use
only, water use only, or both energy and water use together.

Table IV.2--Technology Options for Residential Clothes Washers
------------------------------------------------------------------------

-------------------------------------------------------------------------
Methods for Decreasing Water Use: *
Adaptive water fill controls.
Hardware features enabling lower water levels.
Spray rinse.
Polymer bead cleaning.
Methods for Decreasing Machine Energy:
More efficient motor.
Direct drive motor.
Methods for Decreasing Water Heating Energy:
Wash temperature decrease.
Ozonated laundering.
Methods for Decreasing Drying Energy:
Hardware features enabling spin speed increase.
Spin time increase.
Methods for Decreasing Standby Energy:
Lower standby power components.
Methods for Increasing Overall Efficiency:
Capacity increase.
------------------------------------------------------------------------
* Most of the methods for decreasing water use are also methods for
decreasing water heating energy, since less hot water is used.

B. Screening Analysis

DOE uses the following 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 commercially viable, existing
prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial products
and reliable installation and servicing of the technology could not be
achieved on the scale necessary to serve the relevant market at the
time of the projected compliance date of the standard, then that
technology will not be considered further.
(3) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers, or result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(4) Safety of technologies. 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 technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further due to the
potential for monopolistic concerns.

10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
In sum, 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 of this document discuss 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. The results of the
screening analysis are discussed in greater detail in chapter 4 of the
TSD for this direct final rule.
1. Screened-Out Technologies
DOE partially screened out capacity increase as a technology
option. Specifically, DOE screened out any capacity increase that would
require a corresponding increase in cabinet width larger than 27
inches, on the basis of the practicability to install and service RCWs
with cabinet widths larger than 27 inches. DOE recognizes that products
with a width greater than 27 inches may not be able to fit through many
standards-size interior doorways.
DOE also screened out ozonated laundering and polymer bead cleaning
on the basis of their practicability to install, manufacture, and
service. Polymer bead cleaning is also a unique-pathway proprietary
technology. DOE also screened out electrolytic disassociation of water
on the basis that this technology could have impacts on product utility
or availability. Chapter 3 of the TSD for this direct final rule
includes a detailed description of each of these technology options.
DOE notes that the results of the screening analysis conducted for
this direct final rule align with the screening analysis DOE conducted
for the March 2023 NOPR. See 88 FR 13520, 13542-13453. In the March
2023 NOPR, DOE sought comment on whether any additional technology
options should be screened out on the basis of any of the screening
criteria. Id. at 88 FR 13543. In conducting the screening analysis for
this direct final rule, DOE considered comments it had received in
response to the March 2023 NOPR.
Fisher et al.\38\ commented that the proposed standards are not
technologically feasible because they would require manufacturers to
overhaul many design features that have the potential to impact
performance.\39\ (Fisher et al., No. 463 at pp. 2-3)
---------------------------------------------------------------------------

\38\ ``Fisher et al.'' refers to a joint comment from Travis
Fisher, Rachael Wilfong, and Kevin Dayaratna. Although these
individual commenters are associated with The Heritage Foundation,
the comment states that the views expressed in it should not be
construed as representing any official position of The Heritage
Foundation. (Fisher et al., No. 463 at p. 1).
\39\ DOE did not include Fisher et al.'s comments about spin-
time increase and wash temperature decrease in top-loading standard-
size RCWs at the proposed standard level because the adopted
standard level in this direct final rule is different than what was
proposed in the March 2023 NOPR.
---------------------------------------------------------------------------

In response to Fisher et al.'s comment regarding technological
feasibility due to potential impacts on certain aspects of clothes
washer performance, DOE has concluded that the standards adopted in
this direct final rule are technologically feasible as the technologies
used to achieve the adopted standards are widely incorporated in
commercial products already. Sections 6(b)(3)(i) and 7(b)(1) of the
Process Rule. Furthermore, DOE has determined through analysis of test
data that the standards adopted in this direct final rule will not
lessen the utility or performance of the RCWs under consideration in
this rulemaking, as discussed further in section V.B.4 of this
document.
NEEA et al.\40\ supported the inclusion in the analysis of larger
wash baskets for top-loading models at higher efficiency levels,
assuming common sense limitations to ensure similar installation
locations. (NEEA et al., No. 455 at p. 5)
---------------------------------------------------------------------------

\40\ ``NEEA et al.'' refers to a joint comment from Northwest
Energy Efficiency Alliance (``NEEA''), Commonwealth Edison Company,
and Natural Resources Defense Council.
---------------------------------------------------------------------------

Appliance Standards Awareness Project (``ASAP''), American Council
for an Energy-Efficient Economy (``ACEEE''), and the New York State
Energy Research and Development Authority (``NYSERDA'') commented that,
contrary to concerns raised at DOE's public meeting, manufacturers

[[Page 19042]]

have increased top-loading RCW capacity from 3.8 ft\3\ to 5.3 ft\3\
without a meaningful increase in cabinet dimensions, which supports DOE
screening out from the analysis any capacity increase that would
increase cabinet widths. (ASAP, ACEEE, and NYSERDA, No. 458 at p. 4)
Samsung Electronics America, Inc. (``Samsung'') commented that the
necessary technological advancements and solutions identified by DOE
are readily available and accessible, which aligned with DOE's
assessment of the technological feasibility of the standards proposed
in the March 2023 NOPR. (Samsung, No. 461 at p. 4)
Strauch commented that direct-drive or brushless permanent magnet
(``BPM'') motors will increase RCW cost and decrease reliability.
(Strauch, No. 430 at p. 2)
DOE notes that the incremental cost of higher-efficiency design
options is considered as part of the engineering analysis, from which
DOE derives its cost efficiency ``curves.'' DOE's analysis specifically
accounts for the increased cost of implementing direct drive and BPM
motors to improve efficiency. (See section IV.C.4 of this document and
chapter 5 of the direct final rule TSD) In response to Strauch's
comment asserting that direct drive and BPM motors will decrease
reliability, DOE does not have any data on the comparative reliability
of RCWs that use various motor technologies. However, as discussed
further in section IV.F.5 of this document, DOE's analysis does
incorporate an assumption of increased repair costs for higher
efficiency RCWs. DOE additionally notes that multiple RCW manufacturers
offer warranties specifically for the direct drive motor component of
the clothes washer ranging from 10-year \41\ or 20-year \42\ warranties
to lifetime \43\ warranties--indicative of manufacturers' expectation
of the relatively high reliability of these components.
---------------------------------------------------------------------------

\41\ See, for example, <a href="http://www.maytag.com/services/limited-10-year-warranty.html">www.maytag.com/services/limited-10-year-warranty.html</a>.
\42\ See, for example, <a href="http://www.samsung.com/latin_en/microsite/20-years-warranty/">www.samsung.com/latin_en/microsite/20-years-warranty/</a>.
\43\ See, for example, <a href="http://www.kenmore.com/warranty-information/#washers">www.kenmore.com/warranty-information/#washers</a>.
---------------------------------------------------------------------------

Whirlpool Corporation (``Whirlpool'') commented that DOE's proposal
may create consumer accessibility issues for shorter-than-average
consumers and consumers with disabilities or limited mobility, as they
may struggle to reach the bottom of larger-capacity RCWs, which
manufacturers will have to deepen to satisfy the standards proposed in
the March 2023 NOPR, because the width of cabinets cannot be increased
beyond standard doorway clearance. (Whirlpool, No. 462 at p. 9)
Whirlpool commented that people of average and below-average height may
not be able to access the bottom of deeper-basket top-loading RCWs
without bringing their feet off the ground, which could create a fall
hazard and possible soft-tissue compression of the chest and abdominal
area. (Id. at p. 10) Whirlpool commented that some people could be
forced to shift to a front-loading configuration, further increasing
the ownership cost and eliminating any potential operating cost savings
for many consumers. (Id.) Whirlpool asserted that larger-capacity top-
loading RCWs would be ineligible for compliance with the Americans with
Disabilities Act, due to strict requirements for height and depth of
units. (Id.) Whirlpool also commented that there is a loss of utility
as some consumers do not want or need to use larger load sizes as well
as installation problems related to smaller doorways and basements.
(Whirlpool, Public Transcript, No. 91 at pp. 82-83)
Mannino,\44\ in referencing Whirlpool's comment during the public
webinar that people have a hard time reaching the bottom of larger
tubs,\45\ added that many customers have a step stool next to their
RCWs that they must stand on to get waist-high so they can bend over
far enough to take their clothes out. (Mannino, Public Webinar
Transcript, No. 91 at p. 84)
---------------------------------------------------------------------------

\44\ ``Mannino'' refers to comments made by Michael Mannino
representing Appliance Service Systems during the public webinar
held March 28, 2023.
\45\ Whirlpool, Public Webinar Transcript, No. 91 at pp. 8283.
---------------------------------------------------------------------------

DOE notes that, as discussed in section V.B.4.b of this document,
for this direct final rule DOE has re-evaluated its assumption from the
March 2023 NOPR that capacity increase would be required to meet the
standards proposed in the March 2023 NOPR for top-loading standard-size
RCWs. For this direct final rule, DOE has conducted additional analysis
that indicates that the amended standards can be met by all capacities
currently available on the market without the need to implement the
design option of increasing capacity. Therefore, manufacturers will
continue to be able to offer the same range of capacities as are
currently available on the market. In chapter 5 of the direct final
rule TSD, DOE provides example design pathways that manufacturers could
use to achieve higher efficiency without increasing capacity as a
design option, such that DOE does not expect it will raise
accessibility concerns.
Whirlpool further commented that DOE must work closely with the
Consumer Product Safety Commission (``CPSC'') to understand their work
and ensure that RCWs can safely withstand high spin speeds under
spontaneous unbalanced load conditions, given that the standards
proposed in the March 2023 NOPR would effectively mandate higher spin
speeds. (Id. at p. 13) AHAM noted that although higher spin speeds are
an available option to increase efficiency, UL formed a working group
to address recalls that happened with vertical axis clothes washers and
instantaneous out-of-balance events that happened in the field. AHAM
commented that DOE must coordinate with the CPSC as it considers
certain technology options because manufacturers will need to dedicate
resources to ensure that increased spin speeds do not decrease product
safety. (AHAM, No. 464 at p. 17)
Representatives Latta et al.\46\ commented that increased spin
speeds to meet amended standards could increase the potential for load
imbalance issues. (Representatives Latta et al., No. 456 at pp. 2-3)
---------------------------------------------------------------------------

\46\ ``Representatives Latta et al.'' refers to a joint comment
from the following members of the U.S. House of Representatives:
Robert E. Latta (OH), H. Morgan Griffith (VA), Russ Fulcher (ID),
Rick W. Allen (GA), and Greg Pence (IN).
---------------------------------------------------------------------------

DOE only considered spin increase as a design option insofar as it
is already demonstrated in RCWs available on the market. The prevalence
of high-speed spin features currently available on the market is
indicative that RCWs can be designed to safely withstand such spin
speeds. DOE notes that models at the Recommended TSL would also require
faster spin speeds compared to the baseline, and the Recommended TSL is
supported by the Joint Commenters, which includes manufacturers with
commercially available products that meet or exceed these levels being
safely used today by consumers. As previously discussed, on February
14, 2024, DOE received a second joint statement from the same group of
stakeholders that submitted the Joint Agreement (of which Whirlpool is
a member) in which the signatories reaffirmed the standards recommended
in the Joint Agreement.\47\ In particular, the letter states that the
joint stakeholders do not anticipate the recommended standards will
negatively affect features or performance.
---------------------------------------------------------------------------

\47\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509">www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509</a>.
---------------------------------------------------------------------------

AHAM commented that high-frequency components (e.g., variable-speed
motors) in higher-efficiency RCWs contribute to RCWs losing power

[[Page 19043]]

due to so-called ``nuisance tripping'' of the electrical outlet. (AHAM,
No. 464 at pp. 17-22) Specifically, AHAM explained that arc-fault
circuit-interrupters (``AFCIs'') are devices required by the National
Electrical Code and local building codes that trip and disable
appliances when they detect certain electrical signals, including
conducted emissions. (Id. at p. 17) AHAM commented that many AFCI
manufacturers implement more stringent tripping thresholds than those
recommended by the Federal Communications Commission or the National
Electrical Manufacturers Association, and that the variability in AFCI
tripping thresholds among AFCI manufacturers creates a major challenge
for home appliance manufacturers in making products more efficient,
noting that AFCI manufacturers are not required to publicize changes to
the tripping thresholds or update the relevant industry standard with
this information. (Id. at pp. 17-18) AHAM commented that DOE must not
endanger manufacturers' ability to address this issue by pushing RCWs
towards use of components that generate higher frequency conducted
emissions, such as variable-speed motors. (Id. at p. 19) AHAM requested
that DOE consider how updated standards will impact manufacturers'
ability to meet the specifications required to prevent AFCI nuisance
tripping, quantify this impact, and adjust its analysis accordingly.
(Id.)
AHAM further commented on similar issues regarding ground-fault
circuit interrupters (``GFCIs''), which are also devices required by
the National Electrical Code that trip and disable appliances when they
detect a ground-fault. (Id. at p. 20) AHAM commented that while
appliance manufacturers can add filters to help avoid nuisance
tripping, doing so increases energy consumption and does not solve the
root cause, which AHAM states is highly variable GFCI tripping
thresholds at high frequencies. (Id.) AHAM noted that the latest
Underwriters Laboratory (``UL'') standard for GFCIs \48\ does not
define the electrical amperage tripping threshold for frequencies other
than 60 Hertz. (Id. at p. 21) AHAM commented that UL has conducted a
study that verified that components operating at high frequencies
contribute to nuisance tripping, even when no electrical hazard exists.
(Id. at p. 20) The UL study referenced by AHAM explored the root causes
of reported interoperability incidents (i.e., nuisance tripping)
between certain GFCIs and home appliances, including RCWs. (Id. at pp.
59-68) The UL study referenced by AHAM noted that its results were used
in a proposal to add a GFCI interoperability test to the UL standard
for appliances that are plugged into GFCIs,\49\ and that the results
from the study are anticipated to facilitate the development of new
performance requirements for UL 943 for frequencies other than 60
Hertz. (Id.)
---------------------------------------------------------------------------

\48\ UL 943 is the standard for Ground-Fault Circuit-
Interrupters.
\49\ UL 101 is the standard for Leakage Current for Utilization
Equipment.
---------------------------------------------------------------------------

AHAM requested that DOE use its expertise and resources to properly
investigate what it characterizes as the technological incompatibility
between high-frequency components and AFCIs/GFCIs and suggested that
DOE adjust its analysis and quantify the impact from nuisance tripping.
(Id. at p. 22)
In response to AHAM's concern regarding high-frequency components'
impact on nuisance tripping, DOE emphasizes that it only considered
design options that are already demonstrated in RCWs available on the
market. DOE is aware of the potential for ``nuisance tripping'' of GFCI
circuit protectors by high-frequency components such as variable-speed
motors. However, DOE understands that nuisance tripping can generally
be mitigated through the use of best practices for reducing leakage
current, such as minimizing electrical cable lengths and ensuring that
filtered and unfiltered cables are separated to whatever extent
possible to reduce leakage current. Additionally, optimizing the
variable-frequency controller power filter to reduce total leakage
current to levels below the GFCI detection limits can further prevent
GFCI tripping. To the extent that the use of additional electronic
components is needed in conjunction with the use of design options with
high-frequency components (such as variable-speed motors), and to the
extent that such additional electronic components are provided in RCWs
currently on the market that make use of such design options, DOE's
teardown analysis captures any additional cost associated with such
components.
DOE notes that despite any potential for nuisance tripping, a wide
range of appliances on the market today, including clothes washers,
implement variable-frequency drives in their designs. The inclusion of
these variable-frequency drive designs in units on the market suggests
that they do not have a significant impact on the consumer utility of
these products. DOE notes that variable-speed motors have been used in
RCWs for over a decade \50\ and observes the widespread usage of
variable-speed motors in RCWs currently on the market, as discussed
further in chapter 5 of the direct final rule TSD. DOE is not aware of
widespread issues with the currently available products that would
warrant exclusion from consideration. Further, as indicated by the
Joint Agreement of which AHAM was a signatory, products at the standard
level being adopted in this direct final rule are widely available,
have significant market share--as the adopted standard represents the
ENERGY STAR level--and manufacturers have not indicated consumer
dissatisfaction with the clothes washers commercially available today.
---------------------------------------------------------------------------

\50\ See, for example, discussion of variable-speed motors in
chapter 5 of the TSD accompanying the energy conservation standards
May 2012 Direct Final Rule. Available at <a href="http://www.regulations.gov/document/EERE-2008-BT-STD-0019-0047">www.regulations.gov/document/EERE-2008-BT-STD-0019-0047</a>.
---------------------------------------------------------------------------

2. Remaining Technologies
Through a review of each technology, DOE concludes that all of the
other identified technologies listed in Table IV.3 meet all screening
criteria to be examined further as design options in DOE's direct final
rule analysis. In summary, DOE did not screen out the following
technology options:

Table IV.3--Retained Design Options for Residential Clothes Washers
------------------------------------------------------------------------

-------------------------------------------------------------------------
Methods for Decreasing Water Use *
Adaptive water fill controls.
Hardware features enabling lower water levels.
Spray rinse.
Methods for Decreasing Machine Energy
More efficient motor.
Direct drive motor.
Methods for Decreasing Water Heating Energy
Wash temperature decrease.
Methods for Decreasing Drying Energy
Hardware features enabling spin speed increase.
Spin time increase.
Methods for Decreasing Standby Energy
Lower standby power components.
Methods for Increasing Overall Efficiency
Capacity increase (without requiring a cabinet width increase).
------------------------------------------------------------------------
* Most of the methods for decreasing water use are also methods for
decreasing water heating energy, since less hot water is used.

As discussed, technology options for RCWs may reduce energy use
alone, water use alone, or both energy and water use together. The
technology options that reduce energy use alone are those indicated as
methods for decreasing machine energy, drying energy, and standby
energy. Spray rinse, indicated as one of the methods for reducing water
use, reduces water use alone. The technology options that reduce both
energy and water use

[[Page 19044]]

together are the remaining two options among the methods for decreasing
water use, as well as those indicated as methods for reducing water
heating energy.
DOE determined that these technology options are technologically
feasible because they are being used or have previously been used in
commercially-available products or working 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). For additional details, see chapter 4
of the direct final rule TSD.

C. Engineering Analysis

The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of RCWs. 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
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. Metric Translations
As discussed in section II.B.2 of this document, the June 2022 TP
Final Rule established a new test procedure, appendix J, which
established new EER and WER efficiency metrics. 87 FR 33316. Appendix J
also incorporates a number of revisions that affect the per-cycle
energy and water use in comparison to results obtained under the
current appendix J2 test procedure. See 10 CFR part 430, subpart B,
appendix J. In the March 2023 NOPR, DOE identified efficiency levels
initially in terms of the existing IMEF and IWF metrics and used a
translation equation to convert the identified IMEF and IWF levels into
corresponding EER and WER levels as the basis for the proposed amended
standards. 88 FR 13520, 13545. The translation equation was based on
testing performed by DOE on a representative sample of RCW models. Id.
at 88 FR 13555-13559.
In this direct final rule, DOE used the same translation equations
presented in the March 2023 NOPR to translate efficiency levels from
the appendix J2 metrics (i.e., IMEF and IWF) into the appendix J
metrics (i.e., EER and WER).
2. 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 interpolate to define ``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).
For this direct final rule, DOE used an efficiency-level approach,
supplemented with the design-option approach for certain ``gap fill''
efficiency levels. The efficiency-level approach is appropriate for
RCWs given the availability of certification data to determine the
market distribution of existing products and to identify efficiency
level ``clusters'' that already exist on the market.
In conducting the efficiency analysis for the automatic clothes
washer product classes, DOE first identified efficiency levels in terms
of the current IMEF and IWF metrics defined in appendix J2 that are the
most familiar to interested parties. DOE also initially determined the
cost-efficiency relationships based on these metrics. Following that,
DOE translated each efficiency level into its corresponding EER and WER
values using the translation equations developed for each product
class, as discussed previously in section IV.C.1 of this document.
For the semi-automatic product class, for which reliable
certification data is unavailable, DOE tested a representative sample
of units to appendix J and used that set of data points to determine
the baseline and higher efficiency levels, as described further in
section IV.C.2.c of this document.
The efficiency levels that DOE considered in the engineering
analysis are attainable using technologies currently available on the
market in RCWs. DOE used the results of the testing and teardown
analyses to determine a representative set of technologies and design
strategies that manufacturers use to achieve each higher efficiency
level. This information provides interested parties with additional
transparency of assumptions and results, and the ability to perform
independent analyses for verification. Chapter 5 of the direct final
rule TSD describes the methodology and results of the analysis used to
derive the cost-efficiency relationships.
a. Baseline Efficiency 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.
In defining the baseline efficiency levels for this direct final
rule, DOE considered comments it had received in response to the
baseline efficiency levels proposed in the March 2023 NOPR.
In the March 2023 NOPR, DOE analyzed the baseline efficiency levels
shown in Table IV.4 for each automatic product class. 88 FR 13520,
13546. The semi-automatic product class is discussed separately in
section IV.C.2.c of this document.

[[Page 19045]]

Table IV.4--Baseline Efficiency Levels Analyzed in the March 2023 NOPR
--------------------------------------------------------------------------------------------------------------------------------------------------------
Minimum IMEF (ft Maximum IWF (gal/ Minimum EER (lb/ Minimum WER (lb/
Product class Description \3\/kWh/cycle) cycle/ft \3\) kWh/cycle) gal/cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact (<1.6 ft \3\)..... Current DOE standard.......... 1.15 12.0 3.79 0.29
Top-Loading Standard-Size (>=1.6 ft \3\).... Current DOE standard.......... 1.57 6.5 3.50 0.38
Front-Loading Compact (<3.0 ft \3\)......... Current DOE standard for front- 1.84 4.7 4.41 0.53
loading standard-size (>=1.6
ft \3\) *.
Front-Loading Standard-Size (>=3.0 ft \3\).. ENERGY STAR v. 7.0 **......... 2.38 3.7 5.02 0.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Although the current DOE standard for front-loading compact (<1.6 ft \3\) is 1.13 IMEF/8.3 IWF, no front-loading units are currently on the market
with a capacity <1.6 ft \3\. The baseline efficiency level proposed in the March 2023 NOPR reflected the currently applicable standard for front-
loading RCWs with capacities between 1.6 and 3.0 ft \3\.
** Although the current DOE standard for front-loading standard-size (>=1.6 ft \3\) is 1.84 IMEF/4.7 IWF, at the time of analysis, the least efficient
front-loading standard-size RCW available on the market had an efficiency rating of 2.38 IMEF/3.7 IWF. DOE noted in the March 2023 NOPR that although
DOE's Compliance Certification Database (``CCD'') includes front-loading standard-size RCWs that are rated at the current standard level of 1.84 IMEF,
it had determined through testing that these units perform significantly above their rated value at the current standard level. 88 FR 13520, 13545.

In the March 2023 NOPR, DOE discussed an alternate approach it was
considering for defining the baseline levels. Id. at 88 FR 13561. The
baseline efficiency levels defined in the March 2023 NOPR represented
an IMEF-to-EER translation based on ``consistent spin'' performance
\51\ across all the cycle settings required for testing. DOE observed
through testing, however, that some units on the market are designed
such that only the cycle setting required for measuring the remaining
moisture content (``RMC'') under appendix J2 (i.e., the Cold/Cold cycle
with maximum load size) is optimized \52\ to achieve a favorable RMC
value; on such units, the spin portion of the cycle is significantly
faster or longer on the Cold/Cold setting with a maximum load size than
for the other temperature settings or load sizes that are tested as
part of the energy test. Id. at 88 FR 13556. As discussed in the March
2023 NOPR, comments submitted by a manufacturer suggested that, were
DOE to amend standards based on appendix J, manufacturers that
currently use ``Cold/Cold optimized spin'' would likely increase the
spin speeds or spin durations across all temperature settings to match
the spin behavior of the Cold/Cold temperature setting; i.e., such
units would be redesigned to exhibit ``consistent spin'' performance to
provide the lowest possible (i.e., best possible) RMC measurement under
appendix J. Id. at 88 FR 13557. Under the alternate approach to
defining the baseline efficiency levels discussed in the March 2023
NOPR, DOE would define the baseline efficiency levels based on a
translation between appendix J2 and appendix J metrics without
consideration of any changes to spin implementations as a result of
adopting the new appendix J test procedure. Id. at 88 FR 13561. DOE
referred to this in the March 2023 NOPR as the ``unadjusted'' baseline
approach. Id. Using this approach, the baseline level presented in the
March 2023 NOPR would instead be considered efficiency level (``EL'')
1.
---------------------------------------------------------------------------

\51\ In the March 2023 NOPR, DOE discussed its observation of
various approaches used by manufacturers for the final spin portion
of the wash cycle across all the cycle setting required for testing.
88 FR 13520, 13561. DOE used the term ``consistent spin'' to refer
to units in which the characteristics of the spin cycle (e.g., spin
speed, spin time) are consistent across temperature selections. Id.
at 88 FR 13556. On such units, RMC values measured on Warm/Cold,
Hot/Cold, and Extra Hot/Cold cycles are substantially similar to the
RMC value measured on the Cold/Cold cycle. Id.
\52\ DOE used the term ``Cold/Cold optimized spin'' in the March
2023 NOPR to refer to units in which the spin cycle is optimized on
the Cold/Cold setting with maximum load size. Id.
---------------------------------------------------------------------------

DOE sought comment on the baseline efficiency levels analyzed in
the March 2023 NOPR for each product class. Id. at 88 FR 13546. DOE
also sought comment on whether it should consider defining an
``unadjusted'' baseline efficiency level based on a translation between
appendix J2 and appendix J metrics without consideration of any changes
to spin implementations as a result of adopting the appendix J test
procedure. Id. at 88 FR 13561.
AHAM agreed with DOE's proposal to establish the baseline at the
current DOE standard for top-loading standard-size RCWs and at the
current standard for front-loading standard-size RCWs for the front-
loading compact product class. (AHAM, No. 464 at pp. 16-17)
AHAM opposed DOE's proposal to establish the baseline for front-
loading standard-size RCWs at the ENERGY STAR v. 7.0 level and instead
recommended establishing the baseline at the current DOE standard. (Id.
at p. 17) AHAM commented that even if DOE tested some products that
meet higher levels of efficiency than their rated values, that may not
universally be the case; and that even if it is, the DOE standard does
continue to represent the baseline, as those products are designed in
order to ensure they meet the current energy conservation standard.
(Id.) AHAM further commented that DOE's approach does not match the
intent of establishing the baseline, which is to identify the least-
efficient product and set the baseline at that level. (Id.) As such,
AHAM recommended that DOE establish the baseline at the current DOE
standard for front-loading standard-size products. (Id.)
In response to AHAM's comment regarding the definition of the
baseline level for front-loading standard-size RCWs, DOE is adopting
AHAM's recommended approach for this direct final rule and defining the
baseline level for the front-loading standard-size product class as the
current DOE standard (corresponding to 1.84 IMEF/5.7 IWF).\53\
---------------------------------------------------------------------------

\53\ In this direct final rule (``DFR''), DOE labels the EL
corresponding to the current DOE standard as ``DFR Baseline'' and
the EL corresponding to ENERGY STAR v. 7.0 as ``NOPR Baseline.''
---------------------------------------------------------------------------

The California Investor-Owned Utilities (``CA IOUs'') \54\
recommended that DOE use an ``unadjusted'' baseline efficiency level as
presented in appendix 5A of the March 2023 NOPR TSD and update the
market share distributions by including a ``consistent spin''
implementation technology option reflecting the existing market. (CA
IOUs, No. 460 at pp. 3-4) The CA IOUs stated that they acknowledge the
challenges of transitioning to the new test procedure's energy and
water metrics, but maintain that assuming all

[[Page 19046]]

units will adopt the ``consistent spin'' implementation method and that
incorporating this assumption as the baseline for each product class
does not represent real-world usage. (Id.) The CA IOUs recommended DOE
use the least efficient tested EER in its test sample to define the
baseline efficiency level and that DOE may apply consistent spin
implementation and the associated cost and energy savings as a
technology improvement at EL 1. (Id. at p. 4) The CA IOUs noted that
this method would respect DOE's expectation that manufacturers adopt a
consistent spin profile in response to appendix J. (Id.) The CA IOUs
commented that this approach should also result in updates to the
efficiency distribution for all product classes where DOE found units
with a non-consistent spin implementation. (Id.) The CA IOUs stated the
same market distribution calculations and adjustments should be
implemented for top-loading standard-size, front-loading compact, and
semi-automatic product classes since all were found to have products
with non-consistent spin implementation in DOE's testing. (Id.) The CA
IOUs further stated that these adjustments to DOE's analysis will
accurately represent energy savings from this rulemaking by properly
characterizing existing products and their variety of spin
implementations. (Id. at pp. 4-5) The CA IOUs requested that, should
DOE decline to adopt the proposed methodology, DOE clarify its position
on the inclusion of the costs associated with the spin improvements.
(Id. at p. 5) The CA IOUs requested that DOE ensure uniformity in its
treatment of consistent spin profiles to account for both or none of
the savings and costs. (Id.)
---------------------------------------------------------------------------

\54\ The ``CA IOUs'' includes Pacific Gas and Electric Company,
SDG&E, and SCE.
---------------------------------------------------------------------------

In response to the CA IOUs' recommendation to use the
``unadjusted'' baseline approach to define the baseline efficiency
levels, DOE has further evaluated this approach and determined that DOE
would not be able to reliably extrapolate its test results to the
entire market to determine how market shares would need to be
apportioned between an ``unadjusted'' baseline level and the baseline
level defined in the March 2023 NOPR using the translation equations.
More specifically, although DOE identified units in its test sample
with ``Cold/Cold optimized'' spin characteristic, DOE was not able to
determine a consistent pattern of implementation of this
characteristic--either among manufacturers or product platforms--that
could be used to extrapolate to the entire RCW market. For example,
DOE's test results indicated that some individual manufacturers use
different spin characteristics across their RCW model offerings (e.g.,
using ``consistent spin'' on some models, while using ``Cold/Cold
optimized spin'' on other model), and in some cases across different
individual models within the same product family (e.g., among front-
loading standard-size models designed and built on the same underlying
product platform). DOE recognizes that by not explicitly accounting for
changes to spin implementation at the baseline level for some portion
of the market, any incremental energy savings attributable to the
change in test procedure to appendix J are not accounted for in DOE's
assessment of the total energy savings resulting from the amended
standards enacted by this direct final rule. Regarding DOE's accounting
of any costs associated with such changes in spin implementation, DOE
is not assigning any additional manufacturing cost to the baseline
level with respect to this issue. The design changes incorporated into
DOE's cost-efficiency curves at the amended standard level already
include any necessary structural improvements that would potentially be
required to convert a product from using a ``Cold/Cold optimized'' spin
implementation to a ``consistent spin'' implementation (e.g., more
robust bearings or suspension to accommodate increased spin speeds).
b. Higher Efficiency Levels
To establish higher efficiency levels for the analysis, DOE
reviewed data in DOE's CCD to evaluate the range of efficiencies for
RCWs currently available on the market.\55\
---------------------------------------------------------------------------

\55\ DOE's Compliance Certification Database is available at
<a href="http://www.regulations.doe.gov/certification-data">www.regulations.doe.gov/certification-data</a>. Analysis conducted May
2023.
---------------------------------------------------------------------------

As part of DOE's analysis, the maximum available efficiency level
is the highest efficiency unit currently available on the market. DOE
also defines a ``max-tech'' efficiency level to represent the maximum
possible efficiency for a given product in each product class. (42
U.S.C. 6295(p)(1)) DOE typically determines max-tech levels based on
technologies that are either commercially available or have been
demonstrated as working prototypes. If the max-tech design meets DOE's
screening criteria, DOE considers the design in further analysis.
In defining the higher efficiency levels for this direct final
rule, DOE considered comments it had received in response to the higher
efficiency levels proposed in the March 2023 NOPR.
In the March 2023 NOPR, DOE tentatively determined that the max-
tech efficiency level for each RCW product class corresponds to the
maximum available level for each product class. 88 FR 13520, 13546. In
other words, DOE did not define or analyze any efficiency levels higher
than those currently available on the market. Id.
As noted, EPCA requires that any new or amended energy conservation
standard be designed to achieve the maximum improvement in energy
efficiency that is technologically feasible. (42 U.S.C. 6295(o)(2)(A))
For RCWs, a determination of technological feasibility must encompass
not only an achievable reduction in energy and/or water consumption,
but also the ability of the product to perform its intended function
(i.e., wash clothing) at reduced energy or water levels.\56\ Attributes
that are relevant to consumers encompass multiple aspects of RCW
operation such as stain removal, solid particle removal, rinsing
effectiveness, fabric gentleness, cycle time, noise, vibration, and
others. Each of these attributes may be affected by energy and water
efficiency levels, and achieving better performance in one attribute
may require a tradeoff with one or more other attributes. DOE does not
have the means to be able to determine whether a product that uses less
water or energy than the maximum efficiency level available on the
market would represent a viable (i.e., technologically feasible)
product that would satisfy consumer expectations regarding all the
other aspects of RCW performance that are not measured by the DOE test
procedure. As far as DOE is aware, the complexity of the
interdependence among all these attributes precludes being able to use
a computer model or other similar means to predict changes in these
product attributes as a result of reduced energy and water levels.
Rather, as far as DOE is aware, such determinations are made in an
iterative fashion through extensive product testing as part of
manufacturers' design processes.
---------------------------------------------------------------------------

\56\ As an extreme example, DOE could consider a hypothetical
RCW that reduces its water consumption to near-zero, but such a
product would not be viable for washing clothing, given current
technology.
---------------------------------------------------------------------------

DOE sought comment on the higher efficiency levels analyzed in the
March 2023 NOPR for each product class. Id. at 88 FR 13549.
DOE did not receive any comments regarding the higher efficiency
levels analyzed in the March 2023 NOPR.
At each higher efficiency level, both energy use and water use
decrease through the implementation of

[[Page 19047]]

combinations of design options that individually either reduce energy
use alone, reduce water use alone, or reduce both energy and water use
together, as discussed previously in section IV.A.2 of this document.
Chapter 5 of the direct final rule TSD provides a detailed discussion
of the specific design changes that DOE believes manufacturers would
typically use to meet each higher efficiency level considered in this
engineering analysis, including a discussion of whether such design
changes would reduce energy use only, water use only, or reduce both
energy and water use together.
In this direct final rule, DOE analyzed the higher efficiency
levels shown in Tables IV.5 through IV.8, consistent with the levels
analyzed in the March 2023 NOPR.

Table IV.5--Top-Loading Ultra-Compact (<1.6 ft\3\) Efficiency Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMEF (ft \3\ /kWh/ IWF (gal/cycle/ft
EL Efficiency level description cycle) \3\) EER (lb/kWh/cycle) WER (lb/gal/cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............................. Current DOE standard............. 1.15 12.0 3.79 0.29
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table IV.6--Top-Loading Standard-Size (>=1.6 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Efficiency
EL level IMEF (ft \3\/kWh/ IWF (gal/cycle/ft EER (lb/kWh/ WER (lb/gal/
description cycle) \3\) cycle) cycle)
----------------------------------------------------------------------------------------------------------------
Baseline........... Current DOE 1.57 6.5 3.50 0.38
standard.
1.................. Gap fill....... 1.82 5.4 3.89 0.47
2.................. ENERGY STAR v. 2.06 4.3 4.27 0.57
8.1.
3.................. 2015-2017 2.38 3.7 4.78 0.63
Consortium for
Energy
Efficiency
(``CEE'') Tier
1.
4.................. Maximum 2.76 3.2 5.37 0.67
available
(2016/2017
ENERGY STAR
Most
Efficient).
----------------------------------------------------------------------------------------------------------------

Table IV.7--Front-Loading Compact (<3.0 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Efficiency
EL level IMEF (ft \3\/kWh/ IWF (gal/cycle/ft EER (lb/kWh/ WER (lb/gal/
description cycle) \3\) cycle) cycle)
----------------------------------------------------------------------------------------------------------------
Baseline........... Current DOE 1.84 4.7 4.41 0.53
standard for
front-loading
standard-size
(>=1.6 ft \3\).
1.................. ENERGY STAR v. 2.07 4.2 4.80 0.62
8.1 level for
units <=2.5 ft
\3\.
2.................. 2023 ENERGY 2.20 3.7 5.02 0.71
STAR Most
Efficient for
units <=2.5 ft
\3\.
3.................. Gap fill....... 2.50 3.5 5.53 0.75
4.................. Maximum 2.76 3.2 5.97 0.80
available
(ENERGY STAR
v. 8.1 level
for units >2.5
ft \3\).
----------------------------------------------------------------------------------------------------------------

Table IV.8--Front-Loading Standard-Size (>=3.0 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Efficiency level IMEF (ft \3\/kWh/ IWF (gal/cycle/ft EER (lb/kWh/ WER (lb/gal/
EL description cycle) \3\) cycle) cycle)
----------------------------------------------------------------------------------------------------------------
DFR Baseline...... Current DOE 1.84 4.7 4.31 0.38
standard.
NOPR Baseline..... ENERGY STAR v. 2.38 3.7 5.02 0.64
7.0.
1................. Gap fill........ 2.60 3.5 5.31 0.69
2................. ENERGY STAR v. 2.76 3.2 5.52 0.77
8.1.
3................. 2023 ENERGY STAR 2.92 3.2 5.73 0.77
Most Efficient.
4................. Maximum 3.10 2.9 5.97 0.85
available.
----------------------------------------------------------------------------------------------------------------

c. Semi-Automatic
As discussed in section IV.A.1 of this document, this direct final
rule re-establishes a separate product class for semi-automatic clothes
washers and establishes performance-based standards for semi-automatic
clothes washers. In considering the definition of efficiency levels for
semi-automatic clothes washers for this direct final rule, DOE used the
same methodology it had proposed in the March 2023 NOPR.
As discussed in the March 2023 NOPR, given the lack of specificity
in appendix J2 regarding the testing of semi-automatic clothes washers,
and the significant differences in testing between appendix J2 versus
appendix J for semi-automatic clothes washers, DOE tentatively
determined that it could not develop an accurate correlation between
appendix J2 metrics (i.e., IMEF and IWF) and appendix J metrics (i.e.,
EER and WER) for semi-automatic clothes washers. Id. at 88 FR 13549.
Therefore, DOE proposed to define efficiency levels in terms of EER and
WER directly rather than first defining efficiency levels in terms of
IMEF and IWF and then developing translation equations to translate
those levels to EER and WER. Id. As discussed in the March 2023 NOPR,
DOE determined efficiency levels for the semi-automatic clothes washer
product class by testing a representative sample of models on the
market and observing the range of EER and WER results. Id.

[[Page 19048]]

DOE sought comment on the efficiency levels analyzed in the March 2023
NOPR for semi-automatic RCWs. Id.
DOE did not receive any comments regarding the efficiency levels
analyzed in the March 2023 NOPR for semi-automatic RCWs. In this direct
final rule, DOE used the efficiency levels defined in the March 2023
NOPR for semi-automatic RCWs.
Table IV.9 shows the efficiency levels for the semi-automatic
product class. See chapter 5 of the direct final rule TSD for more
details.

Table IV.9--Semi-Automatic Efficiency Levels
----------------------------------------------------------------------------------------------------------------
EER (lb/kWh/ WER (lb/gal/
EL Efficiency level description cycle) cycle)
----------------------------------------------------------------------------------------------------------------
Baseline.............................. Minimum available................. 1.60 0.17
1..................................... Gap fill.......................... 2.12 0.27
2..................................... Maximum available................. 2.51 0.36
----------------------------------------------------------------------------------------------------------------

3. 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, and 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.
In the present case, DOE conducted the analysis using the physical
teardown approach. For each product class, DOE tore down a
representative sample of models spanning the entire range of efficiency
levels, as well as multiple manufacturers within each product class.
DOE aggregated the results so that the cost-efficiency relationship
developed for each product class reflects DOE's assessment of a market-
representative ``path'' to achieve each higher efficiency level. The
resulting bill of materials provides the basis for the manufacturer
production cost (``MPC'') estimates.
To account for manufacturers' profit margin, DOE applies a
multiplier (the manufacturer markup) to the MPC. The resulting
manufacturer selling price (``MSP'') is the price at which the
manufacturer distributes a unit into commerce. DOE developed an average
manufacturer markup by examining the annual Securities and Exchange
Commission (``SEC'') 10-K reports filed by publicly-traded
manufacturers primarily engaged in appliance manufacturing and whose
combined product range includes RCWs.\57\ See chapter 12 of the TSD for
this direct final rule for additional detail on the manufacturer
markup.
---------------------------------------------------------------------------

\57\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. Available at
<a href="http://www.sec.gov/edgar/search/">www.sec.gov/edgar/search/</a> (last accessed June 30, 2023).
---------------------------------------------------------------------------

4. Cost-Efficiency Results
In developing the baseline and incremental MPCs for each defined
product class for this direct final rule, DOE considered comments it
had received in response to the cost-efficiency results presented in
the March 2023 NOPR.
As discussed in the March 2023 NOPR, in support of this rulemaking,
DOE conducted teardowns on 47 RCW models, which covered the entire
range of efficiency levels within each analyzed product class. See
chapter 5 of the March 2023 NOPR TSD.
DOE sought comment in the March 2023 NOPR on the baseline and
incremental MPCs developed for each product class. Id. at 88 FR 13553.
ASAP, ACEEE, and NYSERDA commented that they believe DOE is likely
overestimating incremental cost increases, especially for top-loading
standard-size RCWs. (ASAP, ACEEE, and NYSERDA, No. 458 at p. 2) ASAP,
ACEEE, and NYSERDA stated that while DOE assumes in the engineering
analysis that baseline top-loading RCWs have enameled baskets and that
units meeting the standards proposed in the March 2023 NOPR would have
stainless steel baskets, NEEA market research found that almost two-
thirds of baseline top-loading standard-size RCW sales already include
stainless steel baskets, including half of the least-expensive baseline
models. (Id.) ASAP, ACEEE, and NYSERDA further commented that DOE has
historically overestimated cost increases from energy efficiency
standards, and they noted that a 2022 Spurlock & Fujita study \58\
concluded that baseline RCW prices stayed flat while efficiency
increased by 30 percent, demonstrating that efficiency standards for
RCWs benefit all consumers and that low-income consumers were not
priced out of the market. (Id. at pp. 2-3) ASAP, ACEEE, and NYSERDA
commented that historical trends suggest that any incremental increases
in first cost experienced by customers will likely be smaller than
those estimated by DOE. (Id. at p. 3)
---------------------------------------------------------------------------

\58\ C.A. Spurlock & K.S. Fujita, ``Equity implications of
market structure and appliance energy efficiency regulation,''
Energy Policy, 2022, Vol. 165, 112943.
---------------------------------------------------------------------------

In response to the comment from ASAP, ACEEE, and NYSERDA regarding
the prevalence of stainless steel wash baskets at the baseline level,
in this direct final rule, DOE has updated its approach to calculating
the baseline MPC for top-loading standard-size RCWs to reflect a
market-weighted average of the use of stainless steel wash baskets
versus enameled steel at the baseline level. DOE used information
derived through confidential manufacturer interviews to determine the
market weightings of each basket type. DOE has determined that using a
market-weighted average provides a more accurate representation of the
industry-average MPC at the baseline level for the top-loading
standard-size product class.
In response to the comment from ASAP, ACEEE, and NYSERDA that DOE
has historically overestimated cost

[[Page 19049]]

increases from amended standards, DOE notes that the MPCs developed as
part of the engineering analysis reflect observations of technologies
as they are implemented on the market at the time of the analysis. As
discussed further in chapter 5 of the direct final rule TSD, DOE takes
into account that certain component-level costs would generally be
lower on a per-unit basis due to higher production volumes that would
result if DOE were to establish standards at a particular higher
efficiency level.\59\ To the extent that the actual cost of an improved
baseline product brought to market in compliance with amended standards
is less than the cost predicted by DOE in a prior rulemaking analysis,
DOE notes that product cost reductions may not necessarily be related
to efficiency redesigns even if implemented at the same time as
efficiency-related design changes. For example, throughout the home
appliance industry, DOE has observed a trend of greater use of plastic
components to replace components that were previously made of metal or
other more expensive materials. Manufacturers may also implement
product redesigns that require fewer parts, therefore resulting in
shorter assembly times and lower manual labor costs. DOE further notes
that manufacturers may choose to implement such non-efficiency design
changes at the same time as efficiency-related design changes in order
to minimize the number of product redesigns. DOE often does not have
insights into future non-efficiency related design changes being
considered by manufacturers. Furthermore, trends that may have occurred
in the past that resulted in cost reductions (e.g., increased used of
plastic components) would be expected to reach a ``saturation point''
and would therefore not be expected to continue indefinitely into the
future. For these reasons, it would be inappropriately speculative, and
therefore unjustifiable, for DOE to assume that non-efficiency related
product cost reductions realized in the past would continue to be
realized in the future in conjunction with future product redesigns
prompted by amended efficiency standards.
---------------------------------------------------------------------------

\59\ In general, higher product volumes result in lower per-unit
costs for each part.
---------------------------------------------------------------------------

AHAM commented that the changes to load sizes in new appendix J
will increase the inherent RMC in the loads, while the standards
proposed in the March 2023 NOPR require RMC to be extremely low at the
end of the cycle. (AHAM, No. 464 at p. 2) AHAM stated that in order to
meet the standards proposed in the March 2023 NOPR using the updated
test procedure, manufacturers will need to increase spin speed and high
spin speed plateau times. (Id.) AHAM further commented that the changes
to spin speed and time would drive motor, structure, and possible other
design changes (such as larger counterweights in front-loading RCWs).
(Id.) AHAM further commented that the changes to tested temperature
settings in new appendix J will force cycle redesigns such as lowering
the warmest warm temperature and other changes that add significant
cost to maintain current levels of performance. (Id.)
In response to AHAM's comment regarding the impacts of the new test
procedure on tested values, DOE notes that the translation equations
developed to translate IMEF efficiency levels into EER efficiency
levels inherently account for all the changes between the two test
procedures, including the change in load size and the tested
temperature settings.\60\ The application of these translation
equations is such that the translated EER level corresponding to a
given IMEF level represents the same level of stringency as the IMEF
level, even though the underlying RMC value may be different and/or the
tested temperature selections may be weighted differently. As such, DOE
has determined that the estimated costs associated with achieving
higher efficiency levels in terms of IMEF and IWF are representative of
the costs associated with achieving the corresponding EER and WER
levels as determined through application of the translation equations.
---------------------------------------------------------------------------

\60\ As discussed in section IV.C.1 of this document, these
translation equations were developed by testing a representative
sample of RCWs to both the appendix J test procedure and the
appendix J2 test procedure, and correlating the results.
---------------------------------------------------------------------------

Finally, for this direct final rule, DOE updated the underlying raw
material prices used in its cost model to reflect current raw material
prices, which resulted in slight changes to the MPC values in
comparison to the values used in the March 2023 NOPR. Table IV.10
presents the baseline MPCs for each product class as determined for
this direct final rule. Tables IV.11 through IV.14 provide the
incremental MPCs for each higher efficiency level for each product
class as determined for this direct final rule. As discussed, no
automatic top-loading compact RCWs are available on the market that
exceed the baseline level. Accordingly, DOE did not consider any higher
efficiency levels for this product class.

Table IV.10--Baseline Manufacturer Production Costs
[2022$]
------------------------------------------------------------------------
Manufacturer
Product class production cost
------------------------------------------------------------------------
Top-Loading Ultra-Compact (less than 1.6 ft \3\ $340.99
capacity)..........................................
Top-Loading Standard-Size (1.6 ft \3\ or greater 263.56
capacity)..........................................
Front-Loading Compact (less than 3.0 ft \3\ 307.19
capacity)..........................................
Front-Loading Standard-Size (3.0 ft \3\ or greater 438.11
capacity)..........................................
Semi-Automatic...................................... 177.77
------------------------------------------------------------------------

Table IV.11--Incremental Manufacturer Production Costs for Top-Loading Standard-Size (>=1.6 ft \3\) Product
Class
[2022$]
----------------------------------------------------------------------------------------------------------------
EL IMEF IWF EER WER Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline.................... 1.57 6.5 3.50 0.38 ..................
1........................... 1.82 5.4 3.89 0.47 $49.55
2........................... 2.06 4.3 4.27 0.57 91.83

[[Page 19050]]

3........................... 2.38 3.7 4.78 0.63 99.90
4........................... 2.76 3.2 5.37 0.67 103.41
----------------------------------------------------------------------------------------------------------------

Table IV.12--Incremental Manufacturer Production Costs for Front-Loading Compact (<3.0 ft\3\) Product Class
[2022$]
----------------------------------------------------------------------------------------------------------------
EL IMEF IWF EER WER Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline.................... 1.84 4.7 4.41 0.53 ..................
1........................... 2.07 4.2 4.80 0.62 $33.27
2........................... 2.20 3.7 5.02 0.71 57.03
3........................... 2.50 3.5 5.53 0.75 79.67
4........................... 2.76 3.2 5.97 0.80 81.29
----------------------------------------------------------------------------------------------------------------

Table IV.13--Incremental Manufacturer Production Costs for Front-Loading Standard-Size (>=3.0 ft\3\) Product
Class
[2022$]
----------------------------------------------------------------------------------------------------------------
EL IMEF IWF EER WER Incremental cost
----------------------------------------------------------------------------------------------------------------
DFR Baseline................ 1.84 4.7 4.31 0.38 ..................
NOPR Baseline............... 2.38 3.7 5.02 0.64 $0.00
1........................... 2.60 3.5 5.31 0.69 24.33
2........................... 2.76 3.2 5.52 0.77 42.03
3........................... 2.92 3.2 5.73 0.77 48.86
4........................... 3.10 2.9 5.97 0.85 58.27
----------------------------------------------------------------------------------------------------------------

Table IV.14--Incremental Manufacturer Production Costs for Semi-Automatic Product Class
[2022$]
----------------------------------------------------------------------------------------------------------------
EL EER WER Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline.................................................... 1.60 0.17 ..................
1........................................................... 2.12 0.27 $8.35
2........................................................... 2.51 0.36 13.58
----------------------------------------------------------------------------------------------------------------

D. Markups Analysis

The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) 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
mark up the price of the product to cover business costs and profit
margin.
For RCWs, the main parties in the post-manufacturer distribution
chain are retailers/distributors and consumers.
DOE developed baseline and incremental markups for each actor in
the distribution chain. 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.\61\
---------------------------------------------------------------------------

\61\ 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.
---------------------------------------------------------------------------

For the March 2023 NOPR, DOE relied on economic data from the U.S.
Census Bureau to estimate average baseline and incremental markups.\62\
---------------------------------------------------------------------------

\62\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017.
Available at <a href="http://www.census.gov/awts">www.census.gov/awts</a> (last accessed May 2, 2023).
---------------------------------------------------------------------------

For this direct final rule, DOE considered comments it had received
regarding the markups analysis conducted for the March 2023 NOPR. The
approach for determining markups in this direct final rule was the same
approach DOE had used for the March 2023 NOPR analysis.
In response to the March 2023 NOPR, AHAM commented that it, along
with AHRI and other stakeholders, disputes DOE's distinction between
markups from manufacturers to end customers for the base case and those
for costs added to meet proposed standards. (AHAM, No. 464 at p. 34)
AHAM presented data, including quotes from retailers, which AHAM
believes contradicts DOE's process and theory, arguing that it lacks
empirical evidence and relies on discredited theories. (Id.) AHAM
commented that DOE's theory is inconsistent with the data DOE presents,
as the price of RCWs has decreased over time while retailer gross

[[Page 19051]]

margins have remained constant. (Id.) AHAM asserted that DOE cannot
disregard data that contradicts its analysis and must take these
comments into account to avoid arbitrary and capricious rulemaking.
(Id. at p. 35)
DOE's incremental markup approach assumes that an increase in
operating profits, which is implied by keeping a fixed markup when the
product price goes up, is unlikely to be viable over time in a
reasonably competitive market like household appliance retailers. The
Herfindahl-Hirschman Index (``HHI'') reported by the 2017 Economic
Census indicates that the household appliance stores sector (North
American Industry Classification System (``NAICS'') 443141) is a
competitive marketplace.\63\ DOE recognizes that actors in the
distribution chains are likely to seek to maintain the same markup on
appliances in response to changes in manufacturer selling prices after
an amendment to energy conservation standards. However, DOE believes
that retail pricing is likely to adjust over time as those actors are
forced to readjust their markups to reach a medium-term equilibrium in
which per-unit profit is relatively unchanged before and after
standards are implemented.
---------------------------------------------------------------------------

\63\ 2017 Economic Census, Selected sectors: Concentration of
largest firms for the U.S. Available at <a href="http://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-44-45.html">www.census.gov/data/tables/2017/econ/economic-census/naics-sector-44-45.html</a>.
---------------------------------------------------------------------------

DOE acknowledges that markup practices in response to amended
standards are complex and varying with business conditions. However,
DOE's analysis necessarily only considers changes in appliance
offerings that occur in response to amended standards and isolates the

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