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Rule2024-08212

Energy Conservation Program: Energy Conservation Standards for Dishwashers

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Published

April 24, 2024

Effective

August 22, 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 dishwashers. In this direct final rule, the U.S. Department of Energy ("DOE") is adopting amended energy conservation standards for dishwashers. 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 80 (Wednesday, April 24, 2024)</title>
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[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Rules and Regulations]
[Pages 31398-31485]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08212]

[[Page 31397]]

Vol. 89

Wednesday,

No. 80

April 24, 2024

Part III

Department of Energy

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10 CFR Part 430

Energy Conservation Program: Energy Conservation Standards for
Dishwashers; Final Rule

Federal Register / Vol. 89 , No. 80 / Wednesday, April 24, 2024 /
Rules and Regulations

[[Page 31398]]

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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2019-BT-STD-0039]
RIN 1904-AF60

Energy Conservation Program: Energy Conservation Standards for
Dishwashers

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 dishwashers.
In this direct final rule, the U.S. Department of Energy (``DOE'') is
adopting amended energy conservation standards for dishwashers. 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 August 22, 2024. If adverse
comment are received by August 12, 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. The incorporation by
reference of certain material listed in this rule was approved by the
Director as of February 17, 2023. If no such adverse comments are
received, compliance with the amended standards established for
dishwashers in this direct final rule is required on and after April
23, 2027. 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 May 24, 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-2019-BT-STD-0039">www.regulations.gov/docket/EERE-2019-BT-STD-0039</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#e3a293938f8a828d8086b097828d8782918790b2968690978a8c8d90a38686cd878c86cd848c95">[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#057272722b606b6077627c2b7671646b6164776176457076616a6f2b626a73">[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#3b7a4b4b57525a55585e684f5a555f5a495f486a4e5e484f525455487b5e5e155f545e155c544d">[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) 306-7097. Email:
<a href="/cdn-cgi/l/email-protection#9cddf1f9f0f5fdb2cbf4f5e8f5f2fbdcf4edb2f8f3f9b2fbf3ea">[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 and Water 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
a. Desiccant Drying
b. Reduced Inlet-Water Temperature
c. Supercritical Carbon Dioxide Washing
d. Ultrasonic Washing
e. Thermoelectric Heat Pumps
f. Water Re-Use System
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Cost Analysis
3. 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 Dioxide
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis

[[Page 31399]]

N. Employment Impact Analysis
O. Regulatory Impact Analysis
P. Other Comments
1. Non-Regulatory Approaches
2. Test Procedure Usage Factors
3. National Academy of Sciences Report
V. Analytical Results and Conclusions
A. Trial Standard Levels
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. Cleaning Performance
b. Drying Performance
c. Cycle Length
d. Water Dilution
e. Equipment Lifetime and Energy Savings
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 Dishwashers
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. Materials Incorporated by Reference
N. 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 dishwashers, the subject of
this direct final rule. (42 U.S.C. 6292(a)(6))
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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.
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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 dishwashers.
The adopted standards 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'' \3\), recommends specific energy conservation
standards for dishwashers 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 \4\--and utilities--including San
Diego Gas and Electric (``SDG&E'') and Southern California Edison
(``SCE'') \5\--advocating for the adoption of the recommended
standards.
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\3\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055</a>.
\4\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0056">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0056</a>.
\5\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0057">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0057</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) expressed in terms of maximum estimated annual
energy use (``EAEU'') in kilowatt hours per year (``kWh/yr'') and
maximum per cycle water consumption in gallons per cycle (``gal/
cycle'') as measured according to DOE's dishwasher test procedure
codified at title 10 of the Code of Federal Regulations (``CFR'') part
430, subpart B, appendix C2 (``appendix C2'').
Table I.1 The amended standards recommended in the Joint Agreement
are represented as trial standard level (``TSL'') 3 in this document
(hereinafter the ``Recommended TSL'') and are described in section V.A
of this document. The Joint Agreement's standards for dishwashers apply
to all products listed in Table I.1 and manufactured in, or imported
into, the United States starting 3 years after publication of a final
rule in the Federal Register.

[[Page 31400]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.000

A. Benefits and Costs to Consumers

Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of dishwashers, as measured by the
average life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\6\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of dishwashers,
which is estimated to be 15.2 years (see section IV.F.6 of this
document).
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\6\ 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).
[GRAPHIC] [TIFF OMITTED] TR24AP24.001

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 7
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\7\ 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 through the
end of the analysis period (2024-2056). Using a real discount rate of
8.5 percent, DOE estimates that the INPV for manufacturers of
dishwashers in the case without amended standards is $735.8 million.
Under the adopted standards, which align with the Recommended TSL for
dishwashers, DOE estimates the change in INPV to range from -20.2
percent to -13.1 percent, which represents a change in INPV of
approximately -$148.8 million to -$96.7 million. In order to bring
products into compliance with amended standards, it is estimated that
industry will incur total conversion costs of $126.9 million.
DOE's analysis of the impacts of the adopted standards on
manufacturers is described in section IV.J and section V.B.2 of this
document.

C. National Benefits and Costs

DOE's analyses indicate that the adopted energy conservation
standards for dishwashers would save a significant amount of energy.
Relative to the case without amended standards, the lifetime energy
savings for dishwashers purchased in the 30-year period that begins in
the anticipated year of compliance with the amended standards (2027-
2056), amount to 0.31 quadrillion British thermal units (``Btu''), or
quads.\8\ This represents a savings of 2.6 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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\8\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.1 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for dishwashers ranges from $1.23 billion (at
a 7-percent discount rate) to $2.90 billion (at a 3-percent discount
rate). This NPV expresses the estimated total value of future
operating-cost savings minus the estimated increased product costs for
dishwashers purchased during the period 2027-2056.
In addition, the adopted standards for dishwashers 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 9.48 million metric tons (``Mt'') \9\
of carbon dioxide (``CO<INF>2</INF>''), 1.41 thousand tons of sulfur
dioxide (``SO<INF>2</INF>''), 22.37 thousand tons of nitrogen oxides
(``NO<INF>X</INF>''), 98.97 thousand tons of methane
(``CH<INF>4</INF>''), 0.06 thousand tons of nitrous oxide
(``N<INF>2</INF>O''), and 0.01 tons of mercury (``Hg'').\10\
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\9\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO<INF>2</INF> are presented in short tons.
\10\ 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 affect
air pollutant emissions.
\11\ Estimated climate-related benefits are provided in
compliance with Executive Order 12866.
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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'').\11\ Together these represent the social cost
of GHG (``SC-GHG''). DOE used interim SC-GHG

[[Page 31401]]

values (in terms of benefit per ton of GHG avoided) developed by an
Interagency Working Group on the Social Cost of Greenhouse Gases
(``IWG'').\12\ 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 $0.54 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. DOE notes, however, that the adopted standards would be
economically justified even without inclusion of monetized benefits of
reduced GHG emissions.
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\12\ To monetize the benefits of reducing GHG emissions this
analysis uses values that are based on the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published February 2021 by the
IWG. (``February 2021 SC-GHG TSD''). <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>.
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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 U.S. Environmental Protection Agency (``EPA''),\13\ as
discussed in section IV.L of this document. DOE did not monetize the
reduction in mercury emissions because the quantity is very small. DOE
estimated the present value of the health benefits would be $0.37
billion using a 7-percent discount rate, and $0.94 billion using a 3-
percent discount rate.\14\ 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 (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.
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\13\ U.S. 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>.
\14\ 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.
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Table I.3 summarizes the monetized benefits and costs expected to
result from the amended standards for dishwashers. 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.
BILLING CODE 6450-01-P

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[[Page 31403]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.003

BILLING CODE 6450-01-C
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.\15\
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\15\ 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.
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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 dishwashers
shipped in 2027-2056. The benefits associated with reduced emissions
achieved as a result of the adopted standards are also calculated based
on the lifetime of dishwashers shipped in 2027-2056. Total benefits for
both the 3-percent and 7-percent cases are presented using the average
GHG social costs with 3-percent discount rate.\16\ Estimates of total
benefits are presented for all four SC-GHG discount rates in section
V.B.8 of this document.
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\16\ As discussed in section IV.L.1 of this document, DOE agrees
with the IWG that using consumption-based discount rates (e.g., 3
percent) is appropriate when discounting the value of climate
impacts. Combining climate effects discounted at an appropriate
consumption-based discount rate with other costs and benefits
discounted at a capital-based rate (i.e., 7 percent) is reasonable
because of the different nature of the types of benefits being
measured.
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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 $14.0 million per year in increased equipment costs,
while the estimated annual benefits are $127.2 million in reduced
equipment operating costs, $29.0 million in climate benefits, and $34.3
million in health benefits. In this case, the net benefit would amount
to $176.4 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $14.0 million per year in increased
equipment costs, while the estimated annual benefits are $171.2 million
in reduced operating costs, $29.0 million in climate benefits, and
$50.8 million in health benefits. In this case, the net benefit would
amount to $237.0 million per year.
BILLING CODE 6450-01-P

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[[Page 31405]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.005

BILLING CODE 6450-01-C
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.J.3 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 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 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.
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 dishwashers is $14.0 million per year in increased
dishwasher costs, while the estimated annual benefits are $127.2
million in reduced dishwasher operating costs, $29.0 million in climate
benefits, and $34.3 million in health benefits. The net benefit amounts
to $176.4 million per year. DOE notes that the net benefits are
substantial even in the absence of the climate benefits \17\ and DOE
would adopt the same standards in the absence of such benefits.
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\17\ The information on climate benefits is provided in
compliance with Executive Order 12866.
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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.\18\ 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.
---------------------------------------------------------------------------

\18\ 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 0.31 quads FFC, the equivalent of
the primary annual energy use of 2.1 million homes. In addition, they
are projected to reduce cumulative CO<INF>2</INF> emissions by 9.48 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.\19\
---------------------------------------------------------------------------

\19\ The TSD is available in the docket for this rulemaking at
<a href="http://www.regulations.gov/docket/EERE-2019-BT-STD-0039/document">www.regulations.gov/docket/EERE-2019-BT-STD-0039/document</a>.
---------------------------------------------------------------------------

In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of four TSLs
for dishwashers. The TSLs and their associated benefits and burdens are
discussed in detail in sections V.A through V.C of this document. As
discussed in section V.C.1 of this document, DOE has tentatively

[[Page 31406]]

determined that TSL 3 (the Recommended TSL) represents the maximum
improvement in energy efficiency that is technologically feasible and
economically justified.

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
dishwashers.

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 dishwashers,
the subject of this document. (42 U.S.C. 6292(a)(6)) EPCA prescribed
energy conservation design standards for these products (42 U.S.C.
6295(g)(1) and (10)(A)), and directed DOE to conduct future rulemakings
to determine whether to amend these standards. (42 U.S.C. 6295(g)(4)
and (10)(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 dishwashers manufactured after
2010, Congress also directed DOE to ``determin[e] whether to amend''
those standards. 42 U.S.C. 6295(g)(10)(B). Congress's directive, in
section 6295(g)(10)(B), to consider whether ``to amend the standards
for dishwashers'' refers to ``the standards'' established in the
immediately preceding section, 6295(g)(10)(A). There, Congress
established energy conservation standards with both energy and water
use performance standards for dishwashers. Indeed, the energy and water
use performance standards for dishwashers (both standard and compact)
are each contained within a single subparagraph. See Id. Everything in
section 6295(g)(10) suggests that Congress intended both of those twin
standards to be evaluated when it came time, ``[n]ot later than January
1, 2015,'' to consider amending them. (Id. 6295(g)(10)(B)(i))
Accordingly, DOE understands its authority, under section
6295(g)(10)(B), to include consideration of amended energy and water
use performance standards for dishwashers.
DOE similarly understands its obligation 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 dishwashers. Neither
section 6295(g)(10)(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)(10)(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 section 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 dishwashers, 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, Public Law 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,
Public Law 102-486, 106 Stat 2776 (Oct. 24, 1992)). When it did so,
Congress also made corresponding changes to the definition of
``consumer 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 energy conservation 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 energy conservation

[[Page 31407]]

standards for residential clothes washers and dishwashers that included
both energy and water use performance standards. (See Sec. 301, EISA
2007, Public Law 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 residential
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)(10), energy
conservation standards for dishwashers that include both energy and
water use performance standards, Congress intended that energy
conservation standards for dishwashers 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)(10). 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, 530-531 (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 the 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 dishwashers appear at title 10 of
the CFR part 430, subpart B, appendix C1 (``appendix C1'') and appendix
C2.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including dishwashers. Any new
or amended standards 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))
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

[[Page 31408]]

economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(3)(B)) 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 must consider 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 EISA 2007,
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 and standards for
dishwashers 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.
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 this
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, 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).

[[Page 31409]]

B. Background

1. Current Standards
In a direct final rule published on May 30, 2012 (``May 2012 Direct
Final Rule''), DOE adopted the current energy conservation standards
for dishwashers manufactured on or after May 30, 2013, consistent with
the levels proposed in a letter submitted to DOE by groups representing
manufacturers, energy and environmental advocates, and consumer groups
on July 30, 2010. 77 FR 31918, 31918-31919. This collective set of
comments, titled ``Agreement on Minimum Federal Efficiency Standards,
Smart Appliances, Federal Incentives and Related Matters for Specified
Appliances'' (the ``July 2010 Joint Petition''),\20\ recommended
specific energy conservation standards for dishwashers that, in the
commenters' view, would satisfy the EPCA requirements in 42 U.S.C.
6295(o). 77 FR 31918, 31919. The July 2010 Joint Petition proposed
energy conservation standard levels for the standard-size and compact-
size dishwasher product classes based on the same capacity definitions
that existed at that time. 77 FR 31918, 31926. In the May 2012 Direct
Final Rule, DOE analyzed the benefits and burdens of multiple standard
levels for dishwashers, including a standard level that corresponded to
the recommended levels in the July 2010 Joint Petition, and determined
that the levels recommended in the Joint Petition satisfied the EPCA
requirements set forth under 42 U.S.C. 6295(o). 77 FR 31918, 31921.
---------------------------------------------------------------------------

\20\ DOE Docket No. EERE-2011-BT-STD-0060-0001.
---------------------------------------------------------------------------

In a final determination published on December 13, 2016 (``December
2016 Final Determination''), DOE concluded that amended energy
conservation standards would not be economically justified at any level
above the standards established in the May 2012 Direct Final Rule, and
therefore determined not to amend the standards. 81 FR 90072. The
current energy and water conservation standards are set forth in DOE's
regulations at 10 CFR part 430, Sec. 430.32(f), and are repeated in
Table II.1. The currently applicable DOE test procedure for dishwashers
appears at appendix C1.
[GRAPHIC] [TIFF OMITTED] TR24AP24.006

The regulatory text at 10 CFR 430.32(f) references the Association
of Home Appliance Manufacturers (``AHAM'') standard AHAM DW-1-2020 \21\
to define the items in the test load that comprise the serving pieces
and each place setting. The number of serving pieces and place settings
help determine the capacity of the dishwasher, which is used to
determine the applicable product class.
---------------------------------------------------------------------------

\21\ Uniform Test Method for Measuring the Energy Consumption of
Dishwashers. AHAM DW-1-2020. Copyright 2020.
---------------------------------------------------------------------------

2. Current Test Procedure
On December 22, 2021, DOE published a test procedure NOPR
(``December 2021 TP NOPR'') proposing amendments to the dishwasher test
procedure at appendix C1 and a new test procedure at appendix C2. 86 FR
72738. On January 18, 2023, DOE published a final rule amending the
test procedure at appendix C1 and establishing a new test procedure at
appendix C2 (``January 2023 TP Final Rule''). 88 FR 3234. The new
appendix C2 specifies updated annual cycles and low-power mode hours,
both of which are used to calculate the EAEU metric, and introduces a
minimum cleaning performance threshold to validate the selected test
cycle. 88 FR 3234, 3236.
Subsequently, on July 27, 2023, DOE published a final rule adding
clarifying instructions to the dishwasher test procedure at appendix C1
regarding the allowable dosing options for each type of detergent;
clarifying the existing detergent reporting requirements; and adding an
enforcement provision for dishwashers to specify the detergent and
dosing method that DOE would use for any enforcement testing of
dishwasher models certified in accordance with the applicable
dishwasher test procedure prior to July 17, 2023 (i.e., the date by
which the January 2023 TP Final Rule became mandatory for product
testing). 88 FR 48351.
EPCA authorizes DOE to design test procedures that measure energy
efficiency, energy use, water use, or estimated annual operating cost
of a covered product during a representative average use cycle or
period of use. (42 U.S.C. 6293(b)(3)) In general, a consumer-acceptable
level of cleaning performance (i.e., a representative average use
cycle) can be easier to achieve through the use of higher amounts of
energy and water use during the dishwasher cycle. Conversely,
maintaining acceptable cleaning performance can be more difficult as
energy and water levels are reduced. Improving one aspect of dishwasher
performance, such as reducing energy and/or water use as a result of
energy conservation standards, may require a trade-off with one or more
other aspects of performance, such as cleaning performance. 88 FR 3234,
3250-3251. As discussed, the currently applicable energy conservation
standards for dishwashers are based on appendix C1, which does not
prescribe a method for testing dishwasher cleaning performance.
The January 2023 TP Final Rule established a new test procedure at
appendix C2, which includes provisions for a minimum cleaning index
threshold of 70 to validate the selected test cycle. 88 FR 3234, 3261.
The cleaning index is calculated based on the number and size of
particles remaining on each item of the test load at the completion of
a dishwasher cycle as specified in AHAM DW-2-2020.\22\ Items that do
not have any soil particles are scored 0 (i.e., completely clean). No
single item in the test load can exceed a score of 9. Individual scores
for each item in the test load are combined as a weighted average to
calculate the per cycle cleaning index. A cleaning index of 100
indicates a completely clean test load. Id. at 88 FR 3255. In the
January 2023 TP Final Rule, DOE specified that the

[[Page 31410]]

cleaning index is calculated by only scoring soil particles on all
items in the test load and that spots, streaks, and rack contact marks
on glassware are not included in the cleaning index calculation.\23\
Id. at 88 FR 3248. Manufacturers must use the results of testing under
the new appendix C2 to determine compliance with the energy
conservation standards adopted in this direct final rule. Accordingly,
DOE used appendix C2 as finalized in the January 2023 TP Final Rule as
the basis for the analysis in this direct final rule. Id. at 88 FR
3234.
---------------------------------------------------------------------------

\22\ Household Electric Dishwashers. AHAM DW-2-2020. Copyright
2020.
\23\ In the December 2021 TP NOPR, DOE proposed a cleaning index
threshold of 65 calculated by scoring soil particles on all items as
well as spots, streaks, and rack contact marks on glassware. 86 FR
72738, 72756, 72758. In the January 2023 TP Final Rule, DOE noted
that the specified cleaning index threshold of 70 is equivalent to
the cleaning index threshold of 65 that was proposed in the December
2021 TP NOPR. 88 FR 3234, 3261.
---------------------------------------------------------------------------

DOE adopted a minimum cleaning performance threshold in appendix C2
to determine if a dishwasher, when tested according to the DOE test
procedure, ``completely washes a normally soiled load of dishes,'' so
as to better represent consumer use of the product (i.e., to produce
test results that are more representative of an average consumer use
cycle). 88 FR 3234, 3253, 3255. Based on the data available, DOE
determined that the cleaning performance threshold provides a
reasonable proxy for when consumers are likely to be satisfied with
performance on the normal cycle. 88 FR 3234, 3261. The cleaning index
threshold established as part of the new appendix C2 ensures that
energy and water savings are being realized for products that comply
with the amended energy conservation standards for dishwashers
established by this direct final rule. 88 FR 3234, 3253, 3254.
The standards enacted by this direct final rule are expressed in
terms of the EAEU and water consumption metrics as measured according
to the newly established test procedure contained in appendix C2.
3. The Joint Agreement
On September 25, 2023, DOE received a joint statement (i.e., the
Joint Agreement) recommending standards for dishwashers, that was
submitted by groups representing manufacturers, energy and
environmental advocates, consumer groups, and a utility.\24\ In
addition to the recommended standards for dishwashers, 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 the Joint Agreement is
contingent upon DOE initiating rulemaking processes to adopt all 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.
---------------------------------------------------------------------------

\24\ The signatories to the Joint Agreement include the AHAM,
American Council for an Energy Efficient Economy, Alliance for Water
Efficiency, ASAP, 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;
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.
\25\ The Joint Agreement contained recommendations for 6 covered
products: refrigerators, refrigerator-freezers, and freezers;
clothes washers; clothes dryers; dishwashers; 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 dishwashers with a cycle time for the
normal cycle of 60 minutes or less, top-loading residential clothes
washers and certain classes of consumer clothes dryers with a cycle
time of less than 30 minutes, and front-loading residential clothes
washers 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 residential clothes washers, 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 dishwashers.
---------------------------------------------------------------------------

\26\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059</a>.
---------------------------------------------------------------------------

The Joint Agreement recommends standard levels for dishwashers as
presented in Table II.2. (Joint Agreement, No. 55 at p. 5) 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-2019-BT-STD-0039-0055">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055</a>.

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[[Page 31411]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.007

DOE notes that it was conducting a rulemaking to consider amending
the standards for dishwashers when the Joint Agreement was submitted.
As part of that process, on January 24, 2022, DOE published a
notification of a webinar and availability of preliminary technical
support document (``January 2022 Preliminary Analysis''). 87 FR 3450.
Subsequently, on May 19, 2023, DOE published a NOPR and announced a
public meeting (``May 2023 NOPR'') seeking comment on its proposed
amended standard to inform its decision consistent with its obligations
under EPCA and the Administrative Procedure Act (``APA''). 88 FR 32514.
DOE held a public meeting on June 8, 2023, to discuss and receive
comments on the NOPR and NOPR TSD. The NOPR TSD is available at:
<a href="http://www.regulations.gov/document/EERE-2019-BT-STD-0039-0032">www.regulations.gov/document/EERE-2019-BT-STD-0039-0032</a>.
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 own prior rulemaking will include a
parenthetical reference that provides the location of the item in the
public record.\28\
---------------------------------------------------------------------------

\28\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for dishwashers. (Docket No. EERE-
2019-BT-STD-0039, which is maintained at <a href="http://www.regulations.gov">www.regulations.gov</a>). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------

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
parties 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 the final rule revoking two final rules that established the 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.'' \29\ That is because, as the letter explained, such product
classes ``did not exist'' at the time of the Joint Agreement.
---------------------------------------------------------------------------

\29\ This document is available in the docket at:
<a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059</a>.
---------------------------------------------------------------------------

In a recently published request for information (``RFI''), 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. 89 FR 17338 (March 11, 2024). 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. . . .''
The current standards applicable to any products within the scope
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(f).
Consistent with the Joint Parties' letter, short-cycle products are not
subject to the amended standards adopted by this direct final rule. 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 dishwashers:
standard-size and compact-size. Although these product classes were not
further divided by cycle time, DOE understands them to exclude
standard-size dishwashers with an average cycle time of 60 minutes or
less. As noted previously, any such ``short-cycle'' dishwashers will be
considered in the Remand Proceeding; the current standards applicable
to such ``short-cycle'' dishwashers 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.

[[Page 31412]]

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 and compact-size
dishwashers that is not distinguished by cycle time and is
representative of all dishwashers 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

This direct final rule covers those consumer products that meet the
definition of ``dishwasher'' as codified at 10 CFR 430.2.
Dishwasher means a cabinet-like appliance which with the aid of
water and detergent, washes, rinses, and dries (when a drying process
is included) dishware, glassware, eating utensils, and most cooking
utensils by chemical, mechanical and/or electrical means and discharges
to the plumbing drainage system. 10 CFR 430.2.
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
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, AHAM, which represents 16 manufacturers
of dishwashers.\30\ 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. 56). 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. 57). As a result, DOE has determined that the Joint Agreement was
submitted by interested persons who are fairly representative of
relevant points of view.
---------------------------------------------------------------------------

\30\ These companies include: Asko Appliances AB; Beko US Inc.;
BSH Home Appliances Corporation; Danby Products, Ltd.; Electrolux;
Fotile America; GE Appliances, a Haier Company; LG Electronics;
Midea America Corp.; Miele, Inc.; Samsung Electronics America, Inc.;
Sharp Electronics Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The
Middleby Corporation; 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 appendix
A.
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) through (5) of appendix A. Section IV.B of this
document discusses the results of the screening analysis for
dishwashers, 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 dishwashers, using the design parameters for the most
efficient products available on the market or in working prototypes.
The max-tech levels that DOE determined for this rulemaking are
described in section IV.C.1.b 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 dishwashers purchased in the 30-year period that begins in the
year of compliance with the amended standards (2027-2056).\31\ The
savings are measured over the entire lifetime of dishwashers 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.
---------------------------------------------------------------------------

\31\ 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'') from potential amended
standards for dishwashers. The NIA spreadsheet model (described in
section IV.H of this document) calculates energy savings in terms of
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of primary energy savings, which is the savings
in the energy that is used to generate and transmit the site
electricity. For natural gas, the primary energy savings are considered
to be equal to the site energy savings. DOE also calculates NES in
terms of full-fuel-cycle (``FFC'') energy savings. The FFC metric
includes the energy consumed in extracting, processing, and
transporting primary fuels (i.e., coal, natural gas, petroleum fuels),
and thus presents a more complete picture of the impacts of energy
conservation standards.\32\ DOE's approach is based on the calculation
of an FFC multiplier for each of the energy types used by covered
products or

[[Page 31413]]

equipment. For more information on FFC energy savings, see section
IV.H.2 of this document.
---------------------------------------------------------------------------

\32\ 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.\33\ 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, 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.
---------------------------------------------------------------------------

\33\ 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 stated, the standard levels adopted in this direct final rule
are projected to result in national energy savings of 0.31 quads FFC,
the equivalent of the primary annual energy use of 2.1 million homes.
Based on the amount of FFC savings, the corresponding reduction in
emissions, 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 a manufacturing impact analysis (``MIA''),
as discussed in section IV.J of this document. DOE first uses an annual
cash-flow approach to determine the quantitative impacts. This step
includes both a short-term assessment--based on the cost and capital
requirements during the period between when a regulation is issued and
when entities must comply with the regulation--and a long-term
assessment over a 30-year period. The industry-wide impacts analyzed
include (1) INPV, which values the industry on the basis of expected
future cash flows; (2) cash flows by year; (3) changes in revenue and
income; and (4) other measures of impact, as appropriate. Second, DOE
analyzes and reports the impacts on different types of manufacturers,
including impacts on small manufacturers. Third, DOE considers the
impact of standards on domestic manufacturer employment and
manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. Finally, DOE
takes into account cumulative impacts of various DOE regulations and
other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating 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 establishing product classes, and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards adopted in this document would not
reduce the utility or performance of the dishwashers 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

[[Page 31414]]

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 notice.
f. Need for National Energy and Water 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 benefits in the form of reduced emissions of air
pollutants and 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.9 of this document.

IV. Methodology and Discussion of Related Comments

This section addresses the analyses DOE has performed for this
rulemaking with regard to dishwashers. 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 dishwashers 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?D=EERE-019-BT-STD-0039">www.regulations.gov/docket?D=EERE-019-BT-STD-0039</a>. Additionally, DOE used output from the
latest version of the EIA's 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) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
that could improve the energy efficiency of dishwashers. 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 two product classes for dishwashers.
(Joint Agreement, No. 55 at p. 8) In this direct final rule, DOE is
adopting the product classes from the Joint Agreement, as follows:
(1) Standard-size dishwashers (>=8 place settings plus 6 serving
pieces); and
(2) Compact-size dishwashers (<8 place settings plus 6 serving
pieces). Id.
Where the place settings are as specified in AHAM DW-1-2020 and the
test load is as specified in section 2.4 of appendix C2. Id.
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

[[Page 31415]]

currently.\34\ DOE's findings in this regard are discussed in detail in
section V.B.4 of this document.
---------------------------------------------------------------------------

\34\ 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 20 technology options,
consistent with the table of technology options presented in the May
2023 NOPR. 88 FR 32514, 32527-32528. In general, technology options for
dishwashers may reduce energy use alone, or reduce both energy and
water use together. Most dishwashers in the United States use as their
water source a hot water line that is typically tapped from the hot
water line serving the adjacent kitchen faucet. Because the energy used
to heat the water consumed by the dishwasher is included as part of the
EAEU metric, technologies that decrease water use also inherently
decrease energy use. Chapter 3 of the TSD for this direct final rule
includes a detailed list and descriptions of all technology options
identified for dishwashers, including a discussion of how each
technology option reduces energy use only or both energy and water use
together.
Among the technology options identified for dishwashers, the
following reduce energy use only (i.e., they reduce energy use without
directly reducing water use): condensation drying, including use of a
stainless steel tub; desiccant drying; fan/jet drying; improved motor
efficiency; increased insulation; low-standby-loss electronic controls;
reduced inlet-water temperature; thermoelectric heat pumps; ultrasonic
washing; and variable-speed motors.
The following technology options reduce both energy and water use
together (i.e., they reduce water use, thereby also inherently reducing
energy use): control strategies; flow-through heating; improved fill
control; improved food filter; improved spray-arm geometry;
microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls; modified sump geometry, with and without dual pumps;
super-critical carbon dioxide washing; variable washing pressures and
flow rates; and water re-use system.
In developing the list of technology options for this direct final
rule, DOE considered comments it had received in response to the May
2023 NOPR. Samsung Electronics America, Inc. (``Samsung'') noted \35\
that variable-speed pump motors reduce energy consumption by allowing
the dishwasher to operate at the most suitable flow rate for each
specific phase of the cleaning process. (Samsung, No. 52 at p. 2)
Samsung agreed with DOE that enhancements in dishwasher components also
contribute to energy efficiency, especially advanced technologies such
as electronic and soil-sensing controls. Samsung commented that the
technology options identified by DOE are achievable and can be
implemented by manufacturers to significantly improve energy
efficiency, reduce resource consumption, and promote sustainability
while maintaining cleaning performance that consumers expect. (Samsung,
No. 52 at pp. 2-3) As noted, DOE has maintained the technology options
discussed in the May 2023 NOPR.
---------------------------------------------------------------------------

\35\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0052">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0052</a>.
---------------------------------------------------------------------------

B. Screening Analysis

DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in 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 summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis.
The subsequent sections 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
The following sections detail the technology options that were
screened out for this direct final rule, and the reasons why they were
eliminated.
a. Desiccant Drying
Desiccant drying relies on a material such as zeolite \36\ to
adsorb moisture to aid in the drying process and reduce drying energy
consumption. DOE is aware of dishwashers from one manufacturer on the
market in the United States that use desiccant drying.\37\
---------------------------------------------------------------------------

\36\ Zeolite is a highly porous aluminosilicate mineral that
adsorbs moisture and releases heat to aid in the drying process.
\37\ See chapter 4, section 4.2.1.1 of the January 2022
Preliminary TSD.
---------------------------------------------------------------------------

DOE has screened out desiccant drying from further consideration
because it is a unique-pathway proprietary technology. Desiccant drying
is a patented technology, and although multiple manufacturers hold
patents for dishwasher designs with desiccant drying features, DOE is
concerned that this technology option is not available for all
manufacturers.
b. Reduced Inlet-Water Temperature
Reduced inlet-water temperature requires that dishwashers tap the
cold water line for their water supply. Because most dishwashers in the
United States tap the hot water line, this technology option would
require significant alteration of existing dishwasher installations in
order to

[[Page 31416]]

accommodate newly purchased units incorporating this technology option.
Therefore, DOE has determined that it would not be practicable to
install this technology on the scale necessary to serve the relevant
market at the time of the effective date of an amended standard.
c. Supercritical Carbon Dioxide Washing
Supercritical carbon dioxide washing, which uses supercritical
carbon dioxide instead of conventional detergent and water to wash
dishes, is currently being researched. Given that this technology is in
the research stage, DOE has determined that it would not be practicable
to manufacture, install and service this technology on the scale
necessary to serve the relevant market at the time of the effective
date of an amended standard. Furthermore, because this technology is in
the research stage, it is not yet possible to assess whether it would
have any adverse impacts on equipment utility to consumers or equipment
availability, or any adverse impacts on consumers' health or safety.
d. Ultrasonic Washing
A dishwasher using ultrasonic waves to generate a cleaning mist was
produced for the Japanese market in 2002; however, this model is no
longer available on the market. Available information indicates that
the use of a mist with ion generation instead of water with detergent
would decrease cleaning performance, impacting consumer utility.
Ultrasonic dishwashing based upon soiled-dish immersion in a fluid
that is then excited by ultrasonic waves has not been demonstrated. In
an immersion-based ultrasonic dishwasher, standing ultrasonic waves
within the washing cavity and the force of bubble cavitation implosion
can damage fragile dishware. Because no manufacturers currently produce
consumer ultrasonic dishwashers, it is impossible to assess whether
this technology option would have any impacts on consumers' health or
safety, or product availability.
Based on this information, DOE has screened out both identified
product types that incorporate the ultrasonic washing technology
option.
e. Thermoelectric Heat Pumps
The thermoelectric heat pump system aims to extract waste heat from
drain water and recover heat normally lost during the drying process,
and apply it to the washing, rinsing, and drying phases, effectively
saving energy. The technology is not commercially available yet as the
technology is still in the research phase. Therefore, DOE has
determined that it would not be practicable to manufacture, install and
service this technology on the scale necessary to serve the relevant
market at the time of the effective date of the amended standards.
Furthermore, because this technology is in the research stage, it is
not yet possible to assess whether it would have any adverse impacts on
equipment utility to consumers or equipment availability, or any
adverse impacts on consumers' health or safety.
f. Water Re-Use System
This system saves water from the final rinse of a given dishwasher
cycle for use in a subsequent dishwasher cycle. A water re-use system
dishwasher also performs ``drain out'' and ``clean out'' cycles if the
dishwasher is not operated for a certain period of time. Both ``drain
out'' and ``clean out'' events consume additional water and energy
during the subsequent cycle, even though such a system saves water and
energy consumption overall.
DOE has screened out this technology option as it has determined
that leaking and contamination from a water holding tank could
potentially present negative health or safety impacts.
2. Remaining Technologies
Through a review of each technology, DOE concludes that all of the
other identified technologies listed in section IV.A.2 of this document
met all five 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:
Technology options that reduce energy use only: condensation
drying, including use of a stainless steel tub; fan/jet drying;
improved motor efficiency; increased insulation; low-standby-loss
electronic controls; and variable-speed motors.
Technology options that reduce both energy and water use together:
control strategies; flow-through heating; improved fill control;
improved food filter; improved spray-arm geometry; microprocessor
controls and fuzzy logic, including adaptive or soil-sensing controls;
modified sump geometry, with and without dual pumps; and variable
washing pressures and flow rates.
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 dishwashers. 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 dishwasher class, DOE
estimates the baseline cost, as well as the incremental cost for the
dishwasher at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design-option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design-option approach to 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-

[[Page 31417]]

tech'' level exceeds the maximum efficiency level currently available
on the market).
For this analysis, DOE used a combination of the efficiency-level
and design-option approach. This approach involved physically
disassembling commercially available products, reviewing publicly
available cost information, and modeling equipment cost. From this
information, DOE estimated the manufacturer production costs (``MPCs'')
for a range of products currently available on the market. DOE then
considered the incremental steps manufacturers may take to reach higher
efficiency levels. In its modeling, DOE started with the baseline MPC
and added the expected design options at each higher efficiency level
to estimate incremental MPCs. By doing this, the engineering analysis
did not factor in the additional higher-cost features with no impact on
efficiency that are included in some models. However, at efficiency
levels where the product designs significantly deviated from the
baseline product, DOE used the efficiency-level approach to determine
an MPC estimate, while removing the costs associated with non-
efficiency-related components or features. DOE also provides further
discussion on the design options and efficiency improvements in chapter
5 of the direct final rule TSD.
a. Baseline Efficiency
For each dishwasher 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 dishwasher class represents the
characteristics of a dishwasher 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.
For dishwashers, DOE identified products available on the market
rated at the current energy conservation standards levels for both
standard-size and compact-size dishwasher product classes. Accordingly,
DOE analyzed these products as baseline units. DOE uses the baseline
unit for comparison in several phases of the direct final rule
analyses, including the engineering analysis, LCC analysis, PBP
analysis, and NIA. To determine energy and water savings that will
result from an amended energy conservation standard, DOE compares
energy and water consumption at each of the higher energy efficiency
levels to the energy and water consumption of the baseline unit.
Similarly, to determine the changes in price to the consumer that will
result from an amended energy conservation standard, DOE compares the
price of a unit at each higher efficiency level to the price of a unit
at the baseline. Additional details on the selection of baseline units
may be found in chapter 5 of the direct final rule TSD. In the May 2023
NOPR, DOE updated the baseline efficiency level for the compact-size
dishwasher product class, when using appendix C2, from 178 kWh/year
estimated in the January 2022 Preliminary Analysis to 191 kWh/year. 88
FR 32514, 32530. In the January 2022 Preliminary Analysis, DOE
translated the current compact-size product class standard level of 222
kWh/year, which is based on appendix C1, to an EAEU based on appendix
C2 using the baseline standby power use estimate of 2.3 watts from the
December 2016 Final Determination (see chapter 7 of the December 2016
Final Determination TSD).\38\ Id. at 32531. However, based on more
recent testing of compact-size dishwashers, DOE determined in its
analysis for the May 2023 NOPR that current baseline compact-size
dishwashers consume 0.5 watts in standby mode. Using this updated
standby power value to translate 222 kWh/year from appendix C1 to
appendix C2, DOE calculated an updated baseline EAEU value of 191 kWh/
year for compact-size dishwashers. Id. Accordingly, in the May 2023
NOPR, DOE proposed the baseline compact-size dishwasher efficiency
level to be 191 kWh/year and 3.5 gal/cycle. Id. Table IV.1 presents the
baseline levels identified for each dishwasher product class in the May
2023 NOPR.
---------------------------------------------------------------------------

\38\ To translate the current dishwasher EAEU standards from
appendix C1 to appendix C2, DOE separated the EAEU into annual
active mode energy use and annual standby mode energy use. DOE
multiplied the annual active mode energy use by 184 cycles/year and
divided by 215 cycles/year, then added back the annual standby
energy use to determine updated EAEU values based on 184 annual
cycles.
[GRAPHIC] [TIFF OMITTED] TR24AP24.008

DOE sought comment on the baseline efficiency levels analyzed in
the May 2023 NOPR for each product class. 88 FR 32514, 32531. DOE did
not receive any comments related to the selected baseline efficiency
levels, including the updated baseline efficiency level for compact-
size dishwashers in the May 2023 NOPR. DOE therefore used the baseline
efficiency levels from the May 2023 NOPR in its analysis for this
direct final rule.
b. Higher Efficiency Levels
Using the efficiency-level approach, the higher 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 this approach, DOE identified four efficiency levels
beyond the baseline for standard-size dishwashers and two for the
compact-size product class. At each higher efficiency level, both
energy use and water use decrease through the implementation of
combinations of design options that individually either reduce energy
use alone, or reduce both energy and water use together, as

[[Page 31418]]

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, or reduce both energy and water use together.
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 May 2023 NOPR.
Table IV.2 and Table IV.3 show the efficiency levels DOE evaluated
for standard-size and compact-size dishwashers in the May 2023 NOPR. 88
FR 32514, 32534-32535.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.009

[GRAPHIC] [TIFF OMITTED] TR24AP24.010

For standard-size dishwashers, EL 1 corresponded to the ENERGY STAR
Version 6.0 \39\ (``ENERGY STAR V. 6.0'') level, EL 2 corresponded to a
gap-fill efficiency level between ENERGY STAR V. 6.0 and ENERGY STAR V.
7.0, and EL 3 corresponded to the ENERGY STAR V. 7.0 level (which was
also the ENERGY STAR Most Efficient criteria in 2022 and 2023). For
compact-size dishwashers, EL 1 corresponded to the ENERGY STAR V. 6.0
level. For both standard-size and compact-size dishwashers, the max-
tech efficiency level corresponded to the highest efficiency unit
available on the market at that time, excluding from consideration
models that rely on technologies that were screened out previously. 88
FR 32514, 32534-32535. In the May 2023 NOPR, DOE requested feedback on
the efficiency levels analyzed for each product class in this proposal.
88 FR 32514, 32335. DOE did not receive any comments related to the
selected efficiency levels. DOE therefore used the baseline and
incremental efficiency levels from the May 2023 NOPR in its analysis
for this direct final rule.
---------------------------------------------------------------------------

\39\ ENERGY STAR Version 6.0 Program Requirements available at:
<a href="http://www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Residential%20Dishwasher%20Version%206.0%20Final%20Program%20Requirements_0.pdf">www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Residential%20Dishwasher%20Version%206.0%20Final%20Program%20Requirements_0.pdf</a>
---------------------------------------------------------------------------

For the reasons discussed, DOE analyzed for this direct final rule
the efficiency levels for standard-size and compact-size dishwashers
that were proposed in the May 2023 NOPR, as reproduced in Table IV.4
and Table IV.5, respectively.

[[Page 31419]]

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[GRAPHIC] [TIFF OMITTED] TR24AP24.012

BILLING CODE 6450-01-C
DOE notes that the compact-size max-tech unit that was analyzed in
the May 2023 NOPR was not included in DOE's Compliance Certification
Database (``CCD'') as of September 2023. Models that are discontinued
over the course of a DOE rulemaking timeline remain applicable in
conducting the analysis in accordance with EPCA requirements because
such models incorporate technologically feasible design options that
manufacturers may use to achieve the corresponding efficiency levels in
commercial products. The CCD included models that exceed the efficiency
of the max-tech unit analyzed in the May 2023 NOPR; however, for these
units, there is a discrepancy between the rated EAEU in DOE's CCD and
the EAEU listed on the model's EnergyGuide label,\40\ therefore, DOE
did not consider these units for its max-tech analysis. Accordingly,
DOE has retained the same compact-size max-tech unit analyzed in this
direct final rule as that identified in the May 2023 NOPR.
---------------------------------------------------------------------------

\40\ The CCD lists models with an EAEU of 114 kWh/year and water
consumption of 1.6 gallons/cycle. However, the EnergyGuide label for
these units lists the EAEU as 154 kWh/year and water consumption of
1.8 gallons/cycle. Accordingly, DOE did not consider this unit as
the max-tech unit for this final rule analysis.
---------------------------------------------------------------------------

2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the dishwasher
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 this direct final rule, 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 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 dishwashers. See section IV.J.2.d of
this document and chapter 12 of the direct final rule TSD for
additional detail on the manufacturer markup.
3. Cost-Efficiency Results
To develop the incremental MPCs associated with improving product
efficiency for each product class, DOE started with the baseline unit
cost model and added the expected changes associated with improving
efficiency at each higher efficiency level. By doing this, DOE excluded
the costs of any non-efficiency related components from the more
efficient units.
Table IV.6 shows the baseline MPCs for standard-size and compact-
size dishwashers estimated for the May 2023 NOPR. 88 FR 32514, 32536.
Table IV.7 and Table IV.8 show the incremental

[[Page 31420]]

MPCs from the baseline developed in the May 2023 NOPR for standard-size
and compact-size dishwashers, respectively, in 2022 dollars. Id. at 88
FR 32536-32537.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR24AP24.014

[GRAPHIC] [TIFF OMITTED] TR24AP24.015

For this direct final rule, DOE updated the underlying raw material
and component prices used in its cost model to reflect raw material and
component prices as of March 2023. Table IV.9 presents the baseline
MPCs for each product class as determined for this final rule, in 2023
dollars. Table IV.10 and Table IV.11 provide the incremental MPCs for
each efficiency level for both product classes as determined for this
final rule.
[GRAPHIC] [TIFF OMITTED] TR24AP24.016

[[Page 31421]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.017

[GRAPHIC] [TIFF OMITTED] TR24AP24.018

BILLING CODE 6450-01-C
The detailed description of DOE's determination of costs for
baseline and higher efficiency levels is provided in chapter 5 of the
direct final rule TSD.

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.
DOE considered two distribution channels through which dishwashers
move from manufacturers to consumers. The majority of dishwasher sales
go through the direct retailer channel, in which manufacturers sell the
products directly to retailers, who then sell to consumers. This direct
retailer channel accounts for 85 percent of the dishwasher market. The
rest of the market goes through a separate distribution channel, in
which manufacturers sell the products to wholesalers, who in turn sell
the products to general contractors, then to consumers. The main
parties in the post-manufacturer distribution channels are retailers,
wholesalers, and general contractors.
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.\41\
---------------------------------------------------------------------------

\41\ 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.
---------------------------------------------------------------------------

DOE relied on economic data from the U.S. Census Bureau to estimate
average baseline and incremental markups. Specifically, DOE used the
2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector to develop retailer markups.\42\
---------------------------------------------------------------------------

\42\ US Census Bureau, Annual Retail Trade Survey. 2017.
<a href="http://www.census.gov/programs-surveys/arts.html">www.census.gov/programs-surveys/arts.html</a>
---------------------------------------------------------------------------

For this direct final rule, DOE considered comments it had received
regarding the markups analysis conducted for the May 2023 NOPR. The
approach for determining markups in this direct final rule was the same
approach DOE had used for the May 2023 NOPR analysis.
In response to the March 2023 NOPR, AHAM commented \43\ that it,
along with AHRI and other stakeholders, disputes DOE's distinction
between markups from manufacturers to end customers for the base case,
those for costs added to meet proposed standards, and the use of
incremental versus average markups. (AHAM, No. 51 at p. 18) AHAM stated
that in its comments on the 2015 NOPR contained quotes from actual
retailers about their actual practices and they contradict the DOE
process. (Id.)
---------------------------------------------------------------------------

\43\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051</a>.
---------------------------------------------------------------------------

DOE's incremental markup approach assumes that an increase in
operating profits, which is implied by keeping a fixed average 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 reported by the 2017 Economic Census
indicates that the household appliance stores sector (NAICS 443141) is
a competitive marketplace.\44\ DOE recognizes that actors in the
distribution chains are likely to seek to maintain the same markup on
appliances in response to changes in MSPs after an amendment to energy
conservation standards. However, DOE believes that retail

[[Page 31422]]

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.\45\ According to economic theory, firms in a perfectly
competitive market are expected to achieve only normal profits in the
long run, and any short-term economic profit would be eroded by entry
and increased competition over time. While it is acknowledged that no
real-world market perfectly fits the conditions of perfect competition,
the theory provides insights into industries and sectors that share
certain characteristics. As indicated by industry data,\46\ the
appliance retail sector is a competitive marketplace; thus, DOE
contends that an increase in profitability, which is implied by keeping
a fixed average markup when the production cost goes up, is not likely
viable in the long run.
---------------------------------------------------------------------------

\44\ 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>. The Herfindahl-
Hirschman Index value can be found by navigating to the
``Concentration of largest firms for the U.S.'' table and then
filtering the industry code to NAICS 443141.The Herfindahl-Hirschman
Index reported for the largest 50 firms in household appliance
stores sector, is 123.8. Generally, a market with an HHI value of
under 1,000 is considered to be competitive.
\45\ A recent retrospective study by LBNL compared ex-ante
projections of the 2011 Direct Final Rule for Room ACs with ex-post
data across various analytical inputs. While the observed product
price data remain sparse, the available market data suggests that
for some product classes, prices did not significantly increase
after the standard change, and for others, the prices aligned with
DOE's projections. Ganeshalingam, M., Ni, C., and Yang, H-C. 2021. A
Retrospective Analysis of the 2011 Direct Final Rule for Room Air
Conditioners. Lawrence Berkeley National Laboratory. LBNL-2001413.
\46\ IBISWorld, US Industry Reports (NAICS): <a href="https://my.ibisworld.com/us/en/industry/home">https://my.ibisworld.com/us/en/industry/home</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
effect of amended standards from other factors. DOE agrees that
empirical data on markup practices would be desirable, but such
information is closely held and difficult to obtain. Consequently, DOE
relies to economic theory as the foundation for developing the markup
analysis. Hence, DOE continues to maintain that its assumption that
standards do not facilitate a sustainable increase in profitability is
reasonable.
The comments submitted by AHAM during the 2015 NOPR contain quotes
from their interviews with retailers, but do not provide the details
and the interview questions used by their consultant based on data
confidentiality reasons. However, without knowing what questions were
posed to the contractors and retailers, it is challenging for DOE to
evaluate the applicability of those quotes. As noted, DOE's analysis
necessarily considers a situation in which nothing changes except for
those changes in appliance offerings that occur in response to amended
standards, and this needs to be addressed clearly in the framing of the
questions.
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for dishwashers.

E. Energy and Water Use Analysis

The purpose of the energy and water use analysis is to determine
the annual energy and water consumption of dishwashers at different
efficiencies in representative U.S. single-family homes, and multi-
family residences, and to assess the energy and water savings potential
of increased dishwasher efficiency. In order to determine
representative life-cycle costs (as discussed in IV.F), both annual
energy and water consumption are considered at each efficiency level
because the technologies to improve energy efficiency may also reduce
water usage (as discussed in IV.C.1.b). The energy and water use
analysis estimates the range of energy and water use of dishwashers in
the field (i.e., as they are actually used by consumers). The energy
and water use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy and water savings and
the savings in consumer operating costs that could result from adoption
of amended or new standards.
For this direct final rule, DOE considered comments it had received
regarding the energy and water use analysis conducted for the May 2023
NOPR. The approach used to estimate the energy and water consumption
for this direct final rule is largely the same as the approach DOE had
used for the May 2023 NOPR analysis.
In the May 2023 NOPR, DOE determined the average annual energy and
water consumption of dishwashers by multiplying the per-cycle energy
and water consumption by the number of cycles per year. 88 FR 32514,
32537. DOE used the EIA's 2020 Residential Energy Consumption Survey
(``RECS'') data to calculate an estimate of annual number of
cycles.\47\ Id. Having determined number of cycles of dishwasher use
per year for each RECS household, DOE determined the corresponding
annual energy and water consumption. Id. In the May 2023 NOPR, DOE
determined the average annual cycles of operation for dishwashers to be
197 cycles per year based on RECS 2020. (Id. 88 FR 32538)
---------------------------------------------------------------------------

\47\ U.S. Department of Energy-Energy Information
Administration, Residential Energy Consumption Survey, 2015 Public
Use Microdata Files, 2020. Washington, DC. Available at
<a href="http://www.eia.doe.gov/emeu/recs/recspubuse20/pubuse20.html">www.eia.doe.gov/emeu/recs/recspubuse20/pubuse20.html</a>.
---------------------------------------------------------------------------

In response to the May 2023 NOPR, Alliance for Water Efficiency
(``AWE'') recommended \48\ that DOE consider using actual data for its
assumptions about cycles per year. (AWE, No. 44 at p. 2) AWE commented
that a significant difference exists between the 197 cycles per year
that DOE is using and the 95 cycles per year the water industry
typically uses. (Id.) AWE stated that the water industry frequently
relies on residential end use data from Residential End Uses of Water,
Version 2 Water Research Foundation Report #4309b (``REUW 2016'').
(Id.) AWE also stated that its experience and academic research suggest
there are often large gaps between consumer survey responses and actual
behavior when it comes to fixture and appliance usage. (Id. at p. 3)
AWE commented that DOE could explore acquiring data from companies
using smart devices, sub-meters, or sensors installed on water meters
and supply lines in thousands of homes across the United States that
collect real-time end use data, which could then be disaggregated.
(Id.)
---------------------------------------------------------------------------

\48\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0044">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0044</a>.
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DOE has reviewed the REUW 2016 report published by the Water
Research Foundation, which analyzed dishwasher end-use data from
detailed log data from 762 households. DOE acknowledges that RECS is
based on household reported frequency of average dishwasher usage per
week, rather than on contemporaneous logs taken by households or meters
installed on household dishwashers, which could be more reliable on an
individual basis. However, unlike the REUW 2016, which is based on
households in the service areas of 21 U.S. utilities, the RECS 2020
consists of a nationally representative sample of housing units
including more than 10,000 households that report dishwasher usage. DOE
also acknowledges AWE's concern that survey data can be different from
field metered data. For a comparison between survey data and field
metered data, DOE referred to a report from Sun et al. that showed that
the average annual dishwasher cycle counts obtained from Pecan Street
field metered data based on a limited household sample size and limited
geographic locations were comparable with the average cycle counts
reported by RECS 2020 with a difference of three percent.\49\
Therefore,

[[Page 31423]]

DOE considers RECS to be the most nationally representative dataset to
approximate consumer dishwasher usage in the U.S. and uses it in the
analysis for this direct final rule.
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\49\ Sun, Q., et al. 2022. Using Field-Metered Data to
Characterize Consumer Usage Patterns of Residential Dishwashers.
Lawrence Berkeley National Laboratory, Berkeley, CA.
---------------------------------------------------------------------------

AHAM commented that DOE eliminated the numerical threshold for the
significant conservation of energy savings determination that was in
the prior Process Rule, reverting to its earlier approach of
determining whether energy savings are significant on a case-by-case
basis. AHAM noted that the amended standards for dishwasher would
result in 0.31 quads, but DOE could achieve far greater savings through
other means such as public education. AHAM stated that on a monthly
basis, savings are so minuscule as to render them meaningless relative
to the potential increase in up-front purchase costs, particularly for
dishwashers on the lower end of the price scale. AHAM recommended that
DOE use median savings as a way to partially overcome the bias in the
RECS data where a few outlier high usage RECS data points distort the
results. (AHAM, No. 51 at p. 6) AHAM stated using the median LCC
savings, the savings are approximately $0.72 cents per year, which is
an amount so small as not to even be noticed by consumers on their
monthly balance sheets. (Id. at pp. 6-7) AHAM further stated that
proposed standards that are not cost effective are not economically
justified under EPCA because the savings do not justify the
manufacturer and consumer burdens that result from the amended
standards and DOE should issue a determination not to amend standards
beyond EL 1 for dishwashers. (Id.)
As described in section IV.E of this document, DOE's energy and
water use analysis for this direct final rule is derived based on RECS
2020, which provides household's dishwasher loads information ranging
from 1 cycle to 21 cycles per week, once after every meal. The
household survey-based annual energy and water use for each household
then feed into the LCC analysis. Excluding minimum and maximum values
from the RECS households samples would result in a less accurate
representation of the actual national dishwasher usage patterns and
consumption distribution exhibited by the household sample. However, as
a standardized approach, DOE presents the distributions of LCC savings
for each product class and efficiency level as histograms and boxplots
in chapter 8 of the direct final rule TSD, which can also be generated
via the published LCC spreadsheet tool. This approach allows
stakeholders to observe the full range of LCC savings over the relevant
time scale, which accounts for the total costs and savings to a
consumer over the lifetime of a new unit purchased in the compliance
year, enabling a more informed evaluation of the potential impacts of
the proposed standards. In addition, DOE's decision on amended
standards is not solely determined by the average LCC savings. While
LCC savings play a role, they are considered alongside other critical
factors, including the percentage of negatively impacted consumers, the
simple payback period, and the overall impact on manufacturers. DOE
further notes, that while AHAM submitted these comments in response to
the May 2023 NOPR, since then AHAM became a party to the Joint
Agreement and is supportive of the recommended standard adopted in this
direct final rule
The California Inventor-Owned Utilities (``CA IOUs'') \50\
recommended \51\ that DOE conduct a representative consumer survey to
review the assumption that consumers turn off the power-dry feature 50
percent of the time if such options exists, and in the absence of such
information, amend the test procedure to test the default cycle with
all manufacturer recommended settings for everyday use enabled. The CA
IOUs expressed concern that DOE lacked solid supportive data and
defaulted to the Department of Commerce Voluntary Labeling Program's
position that for ``any feature requiring a consumer interaction and
for which actual usage is unknown,'' a ``50 percent frequency'' was
assumed. (CA IOUs, No. 50 at p. 6) The CA IOUs commented that in
practice, it is unclear how often consumers actually choose to disable
power-dry and that DOE is reducing the annual energy consumption of 15
units by an average of 6 percent without proof of the expected consumer
behavior. The CA IOUs cited to a 2007 Proctor & Gamble study that
indicated 66 percent of households use the power-dry feature regularly.
The CA IOUs suggested that DOE collect data to update this conclusion
based on consumer use of power-dry, its relation to the ability to
disable the feature, and its presence in default operation or
recommendation for everyday use. (Id. at p. 7)
---------------------------------------------------------------------------

\50\ The ``CA IOUs'' includes Pacific Gas and Electric Company,
SDG&E, and SCE; collectively, the California Investor-Owned
Utilities.
\51\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0050">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0050</a>.
---------------------------------------------------------------------------

DOE updates its analyses with the most current, nationally
representative data. As pointed out by the CA IOU, the 2007 Proctor &
Gamble study did not specify if the dishwashers of the participants had
the option to turn off heated dry, or if the heated dry option was by
default on or off, and it was unclear how the consumer samples were
selected. DOE is unaware of any nationally representative consumer data
showing consumer selection of drying options. Conducting a survey as
suggested is not viable within the context of this rulemaking, but DOE
may consider doing so for a future rulemaking. The calculation of EAEU
at 10 CFR 430.23 assumes dishwashers with the power dry feature use it
50 percent of the time. In the absence of any other nationally
representative data set, DOE is using the same assumption in this
direct final rule analysis. DOE did not include drying option
selections in this direct final rule analysis, but may consider other
assumptions regarding use of drying features in future dishwasher test
procedure rulemakings.
AWE commented that DOE should more thoroughly consider and evaluate
the energy embedded in the water that will be saved from the proposed
standard, in addition to end-user energy use. (AWE, No. 44 at p. 4) AWE
has developed a water conservation tracking tool for evaluating the
water savings, costs, and benefits of urban water conservation programs
and for projecting future water demands. (Id.) AWE further stated that
DOE could also adjust this based on the assumptions it is currently
using for private wells and DOE can calculate the emissions-related
benefits in the same way it has calculated them for direct energy
savings. (Id. at p. 5)
DOE has previously determined that EPCA does not direct DOE to
consider the energy used for utility water treatment and delivery. In a
May 2012 Final Rule on Residential Clothes Washers, DOE noted that EPCA
directs DOE to consider ``the total projected amount of energy, or as
applicable, water, savings likely to result directly from the
imposition of the standard.'' 77 FR 32308, 32346 (quoting 42 U.S.C.
6295(o)(2)(B)(i)(III)). In the May 2012 Final Rule on Residential
Clothes Washers, DOE interpreted ``directly from the imposition of the
standard'' to include energy used in the generation, transmission, and
distribution of fuels used by appliances. Unlike the energy used for
water treatment and delivery, primary energy savings and the full-fuel-
cycle measure are in a distribution chain that is directly linked to
the energy used by appliances. (Id.)
Chapter 7 of the direct final rule TSD provides details on DOE's
energy and water use analysis for dishwashers.

[[Page 31424]]

F. Life-Cycle Cost and Payback Period Analysis

DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
dishwashers. Because the technologies to improve energy efficiency may
also reduce water usage (as discussed in IV.C.1.b), the economic
impacts in the LCC and PBP include both energy consumption and water
consumption. The effect of new or amended energy conservation standards
on individual consumers usually involves a reduction in operating cost
and an increase in purchase cost. DOE used the following two metrics to
measure consumer impacts:
<bullet> The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
and water use, maintenance, and repair). To compute the operating
costs, DOE discounts future operating costs to the time of purchase and
sums them over the lifetime of the product.
<bullet> The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of dishwashers in the absence of new
or amended energy conservation standards. In contrast, the PBP for a
given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. As stated previously, DOE developed household samples
from the RECS 2020. For each sample household, DOE determined the
energy and water consumption for the dishwashers and the appropriate
energy and water prices. By developing a representative sample of
households, the analysis captured the variability in energy and water
consumption and energy and water prices associated with the use of
dishwashers.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy and water
consumption, energy and water prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached to each value, to account for their
uncertainty and variability.
The computer model DOE uses to calculate the LCC relies on a Monte
Carlo simulation to incorporate uncertainty and variability into the
analysis. The Monte Carlo simulations randomly sample input values from
the probability distributions and dishwasher user samples. For this
rulemaking, the Monte Carlo approach is implemented in MS Excel
together with the Crystal Ball\TM\ add-on.\52\ The model calculated the
LCC for products at each efficiency level for 10,000 housing units per
simulation run. The analytical results include a distribution of 10,000
data points showing the range of LCC savings for a given efficiency
level relative to the no-new-standards case efficiency distribution. In
performing an iteration of the Monte Carlo simulation for a given
consumer, product efficiency is chosen based on its probability. If the
chosen product efficiency is greater than or equal to the efficiency of
the standard level under consideration, the LCC calculation reveals
that a consumer is not impacted by the standard level. By accounting
for consumers who already purchase more-efficient products, DOE avoids
overstating the potential benefits from increasing product efficiency.
---------------------------------------------------------------------------

\52\ Crystal Ball\TM\ is a commercially available software tool
to facilitate the creation of these types of models by generating
probability distributions and summarizing results within Excel.
Available at <a href="http://www.oracle.com/middleware/technologies/crystalball.html">www.oracle.com/middleware/technologies/crystalball.html</a>
(last accessed Oct. 19, 2023).
---------------------------------------------------------------------------

DOE calculated the LCC and PBP for consumers of dishwashers as if
each were to purchase a new product in the first year of required
compliance with amended standards. Amended standards apply to
dishwashers manufactured 3 years after the date on which any new or
amended standard is published. (42 U.S.C. 6295(m)(4)(B)) Therefore, DOE
used 2027 as the first year of compliance with any amended standards
for dishwashers.
Table IV.12 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the direct final rule TSD and its appendices.
BILLING CODE 6450-01-P

[[Page 31425]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.019

BILLING CODE 6450-01-C
For this direct final rule, DOE considered comments it had received
regarding the LCC analysis conducted for the May 2023 NOPR. The LCC
approach used for this direct final rule is largely the same as the
approach DOE had used for the May 2023 NOPR analysis.
In response to the May 2023 NOPR, AHAM commented that DOE should
focus on conducting a purchase decision analysis instead of relying on
outcomes and long-term cost analyses. (AHAM, No. 51 at p. 18) AHAM
commented that the logical basis for regulation lies in identifying
consumer and systemic market failures, where consumer failure refers to
making ``incorrect'' decisions due to a lack of information. (Id.) AHAM
stated that systemic market failure relates to mispricing of inputs
(such as underpricing of the environmental impacts in energy prices) or
other similar conditions. AHAM commented that while there are many
critiques of how accurate a rational choice model is for true consumer
behavior, including the recent insights of behavioral economics, all of
these discussions start from the premise of a purchase decision choice
model. AHAM commented on the importance of considering the actual
conditions and expectations of purchasers in DOE's LCC model, separate
from the broader economic impact analysis, which should be in the
National Impact Analysis. (Id.) AHAM suggested that the LCC model
should assess the extent of market failure by comparing the actual rate
of energy-efficient product purchases with the rate that rational
consumers would choose. (Id.)
The LCC analysis currently relies on market data on the
distribution of efficiency of products to assign products with varying
efficiency performance to each household when compliance with the
standard becomes required. This approach is intended to simulate the
range of individual outcomes resulting from the hypothetical setting of
a revised energy conservation standard at various levels of efficiency
when the data needed to develop a product-specific consumer choice
model are currently unavailable. This is a methodological decision made
by DOE after considering the existence of various systematic market
failures (e.g., information asymmetries, bounded rationality, etc.) and
their implication in rational versus actual purchase behavior.
Considering that individual consumer decisions may be driven by
multiple factors and may vary based on demographic features as well as
available information to consumers at the time of purchase, the data
required to develop a product specific complex consumer choice model
were unavailable in the case of dishwashers. In the LCC analysis, DOE
aims to simulate the range of individual outcomes resulting from a
hypothetical setting of revised energy efficiency standards. Both the
distribution and the national average values were considered. Moreover,
the outcome of the LCC is not considered in isolation, but in the
context of the broader set of analyses, including the NIA. DOE further
notes, that AHAM is a party to the Joint Agreement and is supportive of
the recommended standard adopted in this direct final rule.

[[Page 31426]]

AHAM stated that there have been changes in DOE's analysis for
standard-size dishwashers between the January 2022 Preliminary Analysis
and the May 2023 NOPR including the percentage of consumers
experiencing a net cost decreased from 43 percent to 3 percent and the
payback period decreased from 7 to 2.4 years and it is unclear how DOE
arrived at the new conclusions that have a significant impact on
overall energy savings estimates and economic analysis. (AHAM, No. 51
at p. 26) Whirlpool Corporation (``Whirlpool'') questioned \53\ why
there is such a big departure in consumer cost-effectiveness for EL 2
between the January 2022 Preliminary Analysis and the May 2023 NOPR.
(Whirlpool, No. 45 at pp. 3-4) Whirlpool commented that compared to the
43 percent of consumers who were estimated to experience a net cost
from EL 2 in the January 2022 Preliminary Analysis, only 3 percent of
consumers are now estimated to experience a net cost from this level in
the May 2023 NOPR. (Id.) Whirlpool further commented that given this
very large apparent change in the data and the impact that this has on
DOE's overall selection of TSLs, DOE should provide stakeholders with
supporting information/data that led to this drastic change in the
analysis. (Id.)
---------------------------------------------------------------------------

\53\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0045">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0045</a>.
---------------------------------------------------------------------------

DOE updates its analytical inputs with the most recent available
data sources, in response to stakeholder comment, and based on
information obtained through testing, teardowns, manufacturer
interviews, and any additional research and analysis. Input updates
include MPCs, energy and water prices and price trends, dollar year,
price learning trends, product efficiency distributions, discount rate,
sales tax, and shipments. For this final rule, the LCC inputs are
summarized in Table IV.12. Because of those input changes, the LCC
results were changed in the May 2023 NOPR analysis, and again in the
direct final rule analysis compared to those from the January 2022
Preliminary Analysis. In this case, the primary driver of the decrease
in percent of consumers with a net cost is based on a change in MPC
between the January 2022 Preliminary Analysis and the May 2023 NOPR,
driven by DOE's updated engineering analysis. Specifically, based on
manufacturer feedback, DOE revisited its teardown analysis and observed
that the same technology options exist at both EL 1 and EL 2, with EL 2
units having improved control started and design tolerances. For these
reasons, the MPC at EL 2 is the same as that at EL 1, which decreases
the percent of consumers with a net cost at EL 2. DOE notes that AHAM
(of which Whirlpool is a member) supported the Recommended TSL, which
includes the same EL as the standards proposed in the May 2023 NOPR for
standard-size dishwashers.
1. Product Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products because DOE applies an
incremental markup to the increase in MSP associated with higher-
efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. An experience curve analysis implicitly
includes factors such as efficiencies in labor, capital investment,
automation, materials prices, distribution, and economies of scale at
an industry-wide level. To derive the learning rate parameter for
dishwashers, DOE obtained historical Producer Price Index (``PPI'')
data for appliances from the Bureau of Labor Statistics (``BLS''). A
PPI for ``all-other-miscellaneous-household-appliances'' was available
for the time period between 1988 and 2014.\54\ However, the all-other-
miscellaneous-household-appliances PPI was discontinued beyond 2014 due
to insufficient sample size. To extend the price index beyond 2014, DOE
assumed that the price index of primary products of major household
appliance manufacturing would trend similarly to all other
miscellaneous household appliances. This is because, based on
communications with BLS researchers, discontinued series are often
grouped into the primary products under the more aggregated PPI series.
Examining the PPI of all other miscellaneous household appliances and
primary products of major household appliances shows that the
magnitudes of both price trends align with each other. Inflation-
adjusted price indices were calculated by dividing the PPI series by
the gross domestic product index from Bureau of Economic Analysis for
the same years. Using data from 1988-2021, the estimated learning rate
(defined as the fractional reduction in price expected from each
doubling of cumulative production) is 24.2 percent, which results in an
average annual price decline of 0.96 percent. See chapter 8 of the
direct final rule TSD for further details on this topic.
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\54\ U.S. Bureau of Labor Statistics, PPI Industry Data, Major
household appliance manufacturers, Product series ID: PCU
33522033522011. Data series available at <a href="http://www.bls.gov/ppi/">www.bls.gov/ppi/</a>.
---------------------------------------------------------------------------

For this direct final rule, DOE considered comments it had received
regarding the methodology for calculating consumer product costs that
was presented in the May 2023 NOPR. The approach used for this direct
final rule is largely the same as the approach DOE had used for the May
2023 NOPR analysis.
In response to the May 2023 NOPR, Northwest Energy Efficiency
Alliance (``NEEA'') encouraged \55\ DOE to consider a specific learning
curve for variable-speed drives when conducting future dishwasher
standards analyses similar to its approach in the recent refrigerator
standards rulemaking. (NEEA, No. 53 at p. 2)
---------------------------------------------------------------------------

\55\ Available at: <a href="http://www.regulations.gov/comment/EERE-2019-BT-STD-0039-0053">www.regulations.gov/comment/EERE-2019-BT-STD-0039-0053</a>.
---------------------------------------------------------------------------

DOE did not consider a specific price learning curve for variable-
speed drives due to the lack of data regarding the data regarding the
relevant market share of products. DOE will consider all available
technology options and their related learning curves when conducting
future dishwasher standards analyses for standards rulemakings.
AHAM commented that DOE's application of a ``learning or experience
curve'' to reduce expected extra manufacturing costs required to meet
proposed standard levels lacks a solid theoretical foundation for why
an experience or learning curve should exist, what functional form it
should take and whether it should be a continuous function. (AHAM, No.
51 at p. 19) AHAM commented that the approach, based solely on
empirical relationships, demands clear alignment with the actual
products in question and the data used to develop the relationship.
AHAM stated that when the data takes a new shape, DOE must adjust its
equations to reflect that change as continuing to use old data and
equations simply to create a longer time series is not acceptable.
(Id.) AHAM commented that DOE's justification that continued use of
learning rates is justified by past price declines is DOE confusing
past correlation with future causation and the very severe limitations
of forward projection without a sound theoretical basis for assuming
that the correlation will continue. (Id.) AHAM further stated that
there is no particularly strong reason to expect that any future trends
will be modeled with a continuous

[[Page 31427]]

function of the form DOE is proposing and that there is an apparent
``flattening'' of the data in DOE's learning curve equation.
Additionally, AHAM stated that all recent data is above the line drawn
by the equation should give DOE significant pause to consider whether
it is modeling a relationship that no longer holds, no matter what the
regressions statistics from past data show. (Id. at pp. 19-20) AHAM
commented that such ``learning'' should not be projected beyond labor
and materials costs, given it does not logically apply to overheads,
sales, marketing, general and administrative costs, or depreciation and
financing costs. (Id. at p. 20)
DOE notes that there is considerable empirical evidence of
consistent price declines for appliances in the past few decades.
Several studies examined retail prices of various household appliances,
including dishwashers, during different periods of time and showed that
prices had been steadily falling while efficiency had been increasing,
for example Dale, et al. (2009) and Taylor, et al. (2015). Given the
limited data availability on historical manufacturing costs broken out
by different components, DOE utilized the PPI published by the BLS as a
proxy for manufacturing costs to represent the analyzed product as a
whole. While products may experience varying degrees of price learning
during different product stages, DOE modeled the average learning rate
based on the full historical PPI series to capture the overall price
evolution in relation to the cumulative shipments. When fitting the
historical PPI and cumulative annual shipments to the experience curve,
which takes the form of a power function, the resulting R-square value
is 91 percent. Despite that the observed data could deviate above or
below the fitted curve during certain periods, the high value of R-
square indicates a reasonable fit overall, although DOE recognizes the
difficulty when projecting regression results out of sample. In
addition, DOE also conducted sensitivity analyses that are based on a
particular segment of the PPI data for ``all other miscellaneous
household appliances and primary products of major household
appliances'' to investigate the impact of alternative product price
projections (low price learning and constant price) in the NIA of this
rulemaking. In all scenarios that DOE considered, the impact of the
price projection on the Net Present Value estimates is limited to
negative three percent to one percent for the adopted TSL. Overall, the
impact would not affect the policy decision. For details of the
sensitivity results, see appendix 10C of the direct final rule TSD. DOE
further notes, that AHAM is a party to the Joint Agreement and is
supportive of the recommended standard adopted in this direct final
rule.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. Based on inputs
provided by manufacturers, DOE concluded that installation costs would
not be impacted by increased efficiency levels. DOE received no
stakeholder comments on this issue.
3. Annual Energy and Water Consumption
For each sampled household, DOE determined the energy and water
consumption for dishwashers at different efficiency levels using the
approach described previously in section IV.E of this document. Both
energy and water consumption are considered in the LCC analysis because
the technologies to improve energy efficiency may also reduce water
usage (as discussed in section IV.C.1.b of this document).
4. Energy and Water Prices
a. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
DOE derived electricity prices in 2022 using data from EEI Typical
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric
bills and average kilowatt-hour costs to the customer as charged by
investor-owned utilities. For the residential sector, DOE calculated
electricity prices using the methodology described in Coughlin and
Beraki (2018).\56\
---------------------------------------------------------------------------

\56\ Coughlin, K. and B. Beraki. 2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
Available at <a href="http://ees.lbl.gov/publications/residential-electricity-prices-review">ees.lbl.gov/publications/residential-electricity-prices-review</a>.
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To estimate energy prices in future years, DOE multiplied the 2020
energy prices by the projection of annual average price changes for
each of the nine Census Divisions from the Reference case in AEO2023,
which has an end year of 2050.\57\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

\57\ EIA. Annual Energy Outlook 2023. Available at <a href="http://www.eia.gov/outlooks/aeo/">www.eia.gov/outlooks/aeo/</a> (last accessed Oct. 19, 2023).
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DOE's methodology allows electricity prices to vary by sector,
region, and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis.
DOE obtained data for calculating regional prices of natural gas
from the EIA publication, Natural Gas Navigator.\58\ This publication
presents monthly volumes of natural gas deliveries and average prices
by State for residential, commercial, and industrial customers. DOE
used the complete annual data for 2022 to calculate an average annual
price for each Census Division. Residential natural gas prices were
adjusted by applying seasonal marginal price factors to reflect a
change in a consumer's bill associated with a change in energy
consumed.
---------------------------------------------------------------------------

\58\ U.S. Department of Energy--Energy Information
Administration. Natural Gas Navigator 2022. Available at
<a href="http://www.eia.gov/naturalgas/data.php">www.eia.gov/naturalgas/data.php</a>.
---------------------------------------------------------------------------

DOE assigned average prices to each household in the LCC sample
based on its location and its baseline electricity and gas consumption.
For sampled households who were assigned a product efficiency greater
than or equal to the considered level for a standard in the no-new-
standards case, DOE assigned marginal prices to each household based on
its location and the decremented electricity and gas consumption. In
the LCC sample, households could be assigned to one of nine Census
Divisions. See chapter 8 of the direct final rule TSD for details.
To estimate energy prices in future years, DOE multiplied the 2022
energy prices by the projection of annual average price changes for
each of the nine Census Divisions from the Reference case in AEO2023,
which has an end year of 2050.\59\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

\59\ EIA. Annual Energy Outlook 2023. Available at <a href="http://www.eia.gov/outlooks/aeo/">www.eia.gov/outlooks/aeo/</a> (last accessed June 20, 2023).
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b. Water and Wastewater Prices
DOE obtained residential water and wastewater price data from the
Water

[[Page 31428]]

and Wastewater Rate Survey conducted by Raftelis Financial Consultants
and the American Water Works Association.\60\ The survey covers
approximately 445 water utilities and 334 wastewater utilities
analyzing each industry (water and wastewater) separately. For each
water or wastewater utility, DOE calculated the average-price-per-unit
volume by dividing the total volumetric cost by the volume delivered.
DOE also calculated the marginal price by dividing the incremental cost
by the increased volume charged at each consumption level.
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\60\ Raftelis Financial Consultants, Inc. 2020 RFC/AWWA Water
and Wastewater Rate Survey. 2021. Charlotte, NC, Kansas City, MO,
and Pasadena, CA.
---------------------------------------------------------------------------

The samples that DOE obtained of the water and wastewater utilities
is too small to calculate regional public sector prices for all U.S.
Census Divisions. Therefore, DOE calculated regional costs for water
and wastewater service at the Census Region level (Northeast, South,
Midwest, and West) by weighting each State in a region by its
population.
For this direct final rule analysis, DOE has updated its
methodology for developing water prices for consumers who rely on a
private well-water system, instead of the public supply system in
consideration of stakeholder comments. DOE primarily considered well
maintenance costs and pump operating costs when developing the average
water price. Conversely, DOE only considered pump operating costs when
developing the marginal price for well users. As a result, the
estimated average and marginal water prices for well users are $1.24
and $0.39 per thousand gallons, respectively. For septic tank users,
DOE considered only the septic tank maintenance cost when determining
the average price and excluded the marginal cost component, as any
marginal costs are likely to be negligible. DOE is unable to develop
Census-region-level well-water and septic tank prices due to the
limitation of available data; consequently, the same values were used
for each Census Region.
To determine the current percentage of the U.S. population served
by private wells and septic tanks, DOE used historical American Housing
Survey (``AHS'') data from 1970 to 2021 to develop a projection for
2027, the effective year of potential new standards for
dishwashers.\61\
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\61\ The U.S. Census Bureau. The American Housing Survey. Years
1970-2021. Available at <a href="http://www.census.gov/programs-surveys/ahs.html">www.census.gov/programs-surveys/ahs.html</a>
(last accessed June 12, 2023).
---------------------------------------------------------------------------

DOE then conducted random simulations to determine the percentage
of households in rural areas served by private wells and septic tanks.
Based on the estimated percentages, well-water prices and septic tank
prices were assigned to sampled households accordingly. Furthermore,
DOE estimated the septic tank user population and assigned
corresponding septic tank prices to households relying on public water
systems.
To estimate the future trend for public water and wastewater
prices, DOE used data on the historic trend in the national water price
index (U.S. city average) from 1988 through 2022 provided by the Labor
Department's BLS.\62\ DOE extrapolated the future trends based on the
linear growth from 1988 to 2022. DOE used the extrapolated trend to
forecast prices through 2050. To estimate the price trend after 2050,
DOE used a constant value derived from the average values from 2046
through 2050.
---------------------------------------------------------------------------

\62\ U.S. Department of Labor-Bureau of Labor Statistics,
Consumer Price Indexes, Item: Water and sewerage maintenance, Series
Id: CUSR0000SEHG01, U.S. city average, 2022. Washington, DC.
Available at <a href="http://www.bls.gov/cpi/home.htm#data">www.bls.gov/cpi/home.htm#data</a>.
---------------------------------------------------------------------------

To estimate the future trend for the average well-water and septic
tank prices, DOE used data on the historic trend in the overall
national consumer price index from 1988 through 2022 provided by the
Labor Department's BLS.\63\ DOE extrapolated the future trends based on
the linear growth from 1988 to 2022. DOE used the extrapolated trend to
forecast prices through 2050. To estimate the price trend after 2050,
DOE used a constant value derived from the average values from 2046
through 2050. In addition, to estimate the future trend for the
marginal well-water price, the electricity trend was used, as described
previously in section IV.F.4.a of this document.
---------------------------------------------------------------------------

\63\ U.S. Department of Labor-Bureau of Labor Statistics,
Consumer Price Indexes, All Items, Series Id: CUUR0000SA0, U.S. city
average, 2022. Washington, DC. Available at <a href="http://www.bls.gov/cpi/home.htm#data">www.bls.gov/cpi/home.htm#data</a>.
---------------------------------------------------------------------------

In response to the May 2023 NOPR, AHAM commented that it previously
suggested DOE should consider the actual water costs for households on
well systems. (AHAM, No. 51 at p. 12)
AHAM commented that DOE's May 2023 NOPR approach to septic system
costs is incorrect and stated that DOE should acknowledge that there
are no incremental costs for consumers using septic systems and treat
these both well water users and septic tank users as a separate
subgroup instead of averaging them into composite water and sewer
costs. (AHAM, No. 51 at pp. 12-14)
As described in section IV.I.3 of this document, for this direct
final rule, DOE updated its method for estimating well-water and septic
costs. The updated average well-water and septic tank prices are 17.1
percent of the combined cost of public water and sewer costs. In
addition, DOE assigned either septic tank or public sewer prices to
well-water households based on the probability distributions obtained
from the AHS 2021 data.
AHAM commented that the economic value of water is undefined and an
inappropriate measure in the life cycle cost analysis. AHAM stated that
if DOE is relying, even implicitly, on the AWWA/RFC study for its
definition of economic value, as matter of administrative law, it must
make the underlying reference available for public comment before it
can use it as a source. According to AHAM, private well users pay the
actual marginal cost of water, primarily the electricity for pumping,
not an ``economic value.'' While there are embedded costs for drilling
a well, these costs are sunk and the marginal cost is only the
electricity. (AHAM, No. 51, at p. 13) AHAM suggested that if DOE
insists on the ``economic value,'' DOE should define it, demonstrate
how well-water use reduces water availability, and quantify the actual
``economic value'' of lost well water. (Id.) AHAM further stated that
even if there is an ``economic value'' of well water, it should be
considered in the NIA, not the LCC. (Id. at 16.)
DOE concurs that ``economic value of water'' is not the actual
price that well users would pay. Hence, for this direct final rule, DOE
has adjusted its methodology regarding water price for well users and
septic tank price. To derive well-water price, DOE conducted a
literature review and took into consideration the inputs provided by
AHAM. As a result, DOE estimated the average water price for well users
to be $1.24 per thousand gallons, with a marginal price of $0.39 per
thousand gallons representing the electricity cost for pumping.
Regarding septic tank price, DOE estimated the average cost to be $1.30
per thousand gallons and excluded the marginal cost component, as it
may be negligible or close to $0 per thousand gallons. For references
and details of the well-water and septic tank prices, see chapter 8 of
the direct final rule TSD. In addition, in the LCC, DOE has explicitly
assigned water and wastewater sources, along with corresponding
specific prices, to RECS households randomly using different
probability distributions for urban and rural households by Census
Region based on AHS 2021 data. Similarly, both the public and private
water and wastewater costs were accounted for in

[[Page 31429]]

the NIA. The term ``economic value'' of water refers to the National
Groundwater Association's use of the term.\64\ The AWWA/Raftelis data
used to develop the public water and wastewater costs are available
from an online subscription.\65\
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\64\ Groundwater Use in the United States of America. National
Ground Water Association, <a href="http://www.ngwa.org/docs/default-source/default-document-library/groundwater/usa-groundwater-use-fact-sheet.pdf?sfvrsn=5c7a0db8_4">www.ngwa.org/docs/default-source/default-document-library/groundwater/usa-groundwater-use-fact-sheet.pdf?sfvrsn=5c7a0db8_4</a>.
\65\ The American Water Works Association & Raftelis Financial
Consultants, Inc., 2022 RFC/AWWA Water and Wastewater Rate Survey.
2023. Charlotte, NC. The latest report is available at <a href="https://engage.awwa.org/PersonifyEbusiness/Bookstore/Product-Details/productId/194150460">https://engage.awwa.org/PersonifyEbusiness/Bookstore/Product-Details/productId/194150460</a>.
---------------------------------------------------------------------------

AWE commented that DOE should extrapolate from the annualized rate
increases for 1998 to 2020 from the AWWA/Raftelis Water and Wastewater
Rate Survey. (AWE, No. 44 at p. 1) AWE stated that instead of using
AWWA/Raftelis for historic and current pricing and a CPI-based approach
for future price trends, AWE supports the use of data from the AWWA/
Raftelis Survey as the basis for DOE's calculation for both the
historic and current water and wastewater prices and for price trends.
(Id. at p. 2) AWE commented that it is confident that the price trend
data in the AWWA/Raftelis Survey are more accurate and representative
because it is based on a review of the actual rates from a large sample
set of utilities from nearly all U.S. states on a biennial basis and
that it is better to use rate data when performing calculations based
on specific volumes of water saved rather than data on average customer
bills, which is what the water and sewerage maintenance item from CPI
is based on. (Id.)
AWWA/Raftelis conducts water and wastewater rates survey, which
used to be every two years and now every six months, for U.S. water and
wastewater utilities. For each of the AWWA/Raftelis surveys, utilities
in the sample respond voluntarily to the survey questions, with a
limited number of overlapping utilities in each survey year. For this
reason, it is possible that the annual change in rates may be affected
by which utilities respond to the survey, which is also known as sample
bias. In addition, the rate data are reported in usage tiers set by
each utility and not on actual household water consumption.
The BLS Water and Sewer CPI sample represents 600 to 700 quotes for
water or sewer service, and the sample is consistent for four years,
which reduces the possible year over year bias as compared to AWWA/
Raftelis. Additionally, the Water and Sewer CPI was estimated based on
consumer water bills that reflect household water consumption.
Therefore, DOE concludes that the BLS' CPI water and sewer data better
reflect the nationally representative price trends than the AWWA/
Raftelis data. DOE therefore used the CPI for water and sewer for its
public utilities' water and wastewater price trend forecast for this
final rule.
DOE used a similar methodology to develop future water and
wastewater prices in its clothes washer standard rulemaking as it used
in the March 2024 final rule analysis. DOE used a constant value
derived from the average values from 2046 through 2050 to estimate the
price trend after 2050, whereas in the May 2023 NOPR, published May 19,
2023 (88 FR 32514), DOE used the 2050 value for the price trend after
2050.\66\
---------------------------------------------------------------------------

\66\ Additional details regarding the dishwasher analysis are
provided in the May 2023 NOPR TSD, available at <a href="http://www.regulations.gov/document/EERE-2019-BT-STD-0039-0032">www.regulations.gov/document/EERE-2019-BT-STD-0039-0032</a>.
---------------------------------------------------------------------------

AHAM stated DOE should recognize that not all households directly
pay for water and sewer. (AHAM, No. 51 at p. 16) As such, AHAM asserted
that DOE is overestimating the actual annual operating cost savings
that these consumers would receive from reduced water use in
dishwashers. (Id.) AHAM commented that in many circumstances the costs
for water and sewer are either borne by landlords or are combined into
generalized common charges. (Id.)
AHAM identified two subgroups of consumers who might not see
monetary savings from a reduction in water use as a result of an
amended standard: (1) condominium owners in multi-family buildings
where water and sewer costs are included in common charges and (2) low-
income renters in multi-family housing where water is not sub-metered
and/or costs are covered by landlords. (AHAM, No. 51 at p. 16) As it
applies to multi-family housing, AHAM stated that installing sub-
metering equipment may cost thousands of dollars per unit including
plumbing charges and many landlords do not find it attractive or
practical to sub-meter. (Id.) Additionally, for condominium properties,
the owner owns the dishwasher, leading to a reverse split-incentive
such that the household will not see the benefit directly and will have
a negative LCC savings. Further, raising the price of a dishwasher will
also encourage the household to continue repairing the dishwasher
rather than purchasing a more expensive new one, reducing or
eliminating the project national savings. As such, AHAM recommend that
DOE recognize this sub-group and address the relevant financial
situation. (Id. at pp. 16-17)
DOE notes that while RECS does identify multi-family housing, it
does not provide information on whether a household's water bill is
included in the rent, included in the common charges, or paid directly
to the utility. For the first group of multi-family unit owners (such
as apartments, condominiums, and co-ops) identified in RECS and
reporting that energy bills are not paid directly to the utilities, DOE
posits that those households also do not directly pay their water
bills, considering that some multi-family units may have a shared water
meters, which is more common than shared electricity or gas meters. It
is, therefore, likely that households that do not directly pay their
energy bills to the utilities, also do not directly pay for their water
bill. This group represents less than 1.2 percent of the national
sample, indicating a relatively small group. For the second group of
low-income renters in multi-family buildings, DOE adopted a
conservative approach assuming that those households that reported as
not paying their energy bill would also not pay their water bill and,
therefore, do not accrue any operating cost savings from the considered
standards. This issue is accounted for in the low-income subgroup
analysis. Based on DOE's assessment, the low-income subgroup has
comparable LCC savings and fraction of consumers experiencing a net
cost as the national sample. See section IV.I.1 and section V.B.1.b of
this document for the detailed methodology and the results of the low-
income subgroup analysis.
With regards to the split-incentive issue, the existence of a split
incentive across a substantial number of U.S. households, in which a
tenant pays for the cost of electricity while the landlord furnishes
appliances, has been identified through a number of studies of
residential appliance use broadly, and for dishwashers in low-income
settings in specific. Building from early work including Jaffe and
Stavins (1994),\67\ Murtishaw and Sathaye (2006) \68\ discussed the
presence of landlord-tenant split-incentives (i.e., the ``principal-
agent problem'') in the context of refrigeration, water heating, space
heating, and lighting in rental housing. While the study did not solely
focus on the low-income household,

[[Page 31430]]

they estimated that 35 percent of total residential site energy use is
subject to split-incentives based on these four products alone. In the
specific context of dishwashers, based on RECS 2020, 88 percent of low-
income individuals who rented their homes and owned a dishwasher were
found to pay the electricity bill resulting from their energy use, such
that they were likely subject to a scenario in which their landlord
purchased the appliance, but they paid the operating costs. Spurlock
and Fujita (2022),\69\ Houde and Spurlock (2016),\70\ and citations
therein (e.g., Davis 2012) \71\ also further elaborated on split-
incentives in rental housing and their association with generally lower
efficiency among the appliances used by renters. As a result, DOE's
analysis concludes that there is a substantial fraction of split-
incentive issue among low-income households. Therefore, DOE divide the
low-income subgroup into renters and non-renters categories, for which
different assumptions were applied. For low-income households who are
home-owners and do pay for the product and energy costs, DOE considers
that those households will experience an impact from any proposed
standard and DOE then uses the same methodology applied to the national
LCC analysis. For low-income households who are renters and do not pay
for energy bills, DOE considers the amended standards will have no
impact on those households. In the split-incentive case in which the
low-income households who are renters and pay for energy bills, the
landlord would bear the cost of the appliance, and the household would
pay the operating costs and therefore accrue the operating cost savings
from the considered standards. Although paid by different individuals,
the difference between the incremental equipment cost and the life
cycle operating cost savings would still be characterized as the LCC
savings associated with the dishwasher in question in the national LCC
analysis. Therefore, the split-incentives cases would not affect the
methodology of the national LCC savings estimates. More details can be
found in section IV.I.1 of this document as well as in chapter 11 of
the direct final rule TSD.
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\67\ A.B. Jaffe and R.N. Stavins (1994) The energy-efficiency
gap What does it mean? Energy Policy, 22 (10) 804-810, Available at
<a href="http://doi.org/10.1016/0301-4215">doi.org/10.1016/0301-4215</a>(94)90138-4.
\68\ Murtishaw, S., & Sathaye, J. (2006). Quantifying the Effect
of the Principal-Agent Problem on US Residential Energy Use.
Lawrence Berkeley National Laboratory. Available at
<a href="http://escholarship.org/uc/item/6f14t11t">escholarship.org/uc/item/6f14t11t</a>.
\69\ C.A. Spurlock and K.S. Fujita (2022) Equity implications of
market structure and appliance energy efficiency regulation, Energy
Policy, 165 (112943), Available at <a href="http://doi.org/10.1016/j.enpol.2022.112943">doi.org/10.1016/j.enpol.2022.112943</a>.
\70\ S. Houde, C.A. Spurlock (2016) Minimum Energy Efficiency
Standards for Appliances: Old and New Economic Rationales. Economics
of Energy & Environmental Policy, 5(2), 65-84. Available at
<a href="http://www.jstor.org/stable/26189506">www.jstor.org/stable/26189506</a>.
\71\ L.W. Davis (2012) Evaluating the slow adoption of energy
efficient investments: are renters less likely to have energy
efficient appliances? The Design and Implementation of US Climate
Policy, University of Chicago Press (2012), pp. 301-316.
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As in the case when some consumers may delay or forgo their
purchase due to the increased first cost caused by the standards, DOE
assumed that those consumers would hand wash their dishes and accounted
for the possible increase in energy and water use as an additional cost
to the standards case in the National Impact Analysis. DOE considered
this as a conservative approach since there are alternatives to
handwashing dishes such as extended repair, or purchasing a second-hand
unit.
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product. Typically,
small incremental increases in product efficiency entail no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency products. However, products having significantly higher
efficiencies compared to baseline products are more likely to incur
higher repair and maintenance costs, because their increased complexity
and higher part count typically increases the cumulative probability of
failure.
In this direct final rule analysis, DOE derived repair costs for
dishwashers for each efficiency level based on manufacturers' inputs on
the repair frequency and costs. DOE did not include routine maintenance
costs as no evidence or data shows that the routine maintenance costs
or frequency would vary with increased efficiency. See chapter 8 of the
direct final rule TSD for further details.
6. Product Lifetime
For dishwashers, DOE developed a distribution of lifetimes from
which specific values are assigned to the appliances in the samples.
DOE conducted an analysis of actual lifetime in the field using a
combination of historical shipments data, the stock of the considered
appliances in the American Housing Survey, and responses in RECS on the
age of the appliances in the homes. The data allowed DOE to estimate a
survival function, which provides an average appliance lifetime. This
analysis yielded a lifetime probability distribution with an average
lifetime for dishwashers of approximately 15.2 years. DOE has found no
evidence or information related to variation in dishwasher lifetime by
product class or efficiency level. See chapter 8 of the direct final
rule TSD for further details.
7. Discount Ra

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