[Federal Register Volume 89, Number 49 (Tuesday, March 12, 2024)]
[Rules and Regulations]
[Pages 18164-18243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04765]
[[Page 18163]]
Vol. 89
Tuesday,
No. 49
March 12, 2024
Part IV
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for Consumer
Clothes Dryers; Final Rule and Proposed Rule
Federal Register / Vol. 89 , No. 49 / Tuesday, March 12, 2024 / Rules
and Regulations
[[Page 18164]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2014-BT-STD-0058]
RIN 1904-AF59
Energy Conservation Program: Energy Conservation Standards for
Consumer Clothes Dryers
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 consumer
clothes dryers. In this direct final rule, DOE is adopting amended
energy conservation standards for consumer clothes dryers. DOE has
determined that the amended energy conservation standards for these
products would result in significant conservation of energy and are
technologically feasible and economically justified.
DATES: The effective date of this rule is July 10, 2024. If adverse
comments are received by July 1, 2024 and DOE determines that such
comments may provide a reasonable basis for withdrawal of the direct
final rule under 42 U.S.C. 6295(o), a timely withdrawal of this rule
will be published in the Federal Register. If no such adverse comments
are received, compliance with the amended standards established for
consumer clothes dryers in this direct final rule is required on and
after March 1, 2028. Comments regarding the likely competitive impact
of the standards contained in this direct final rule should be sent to
the Department of Justice contact listed in the ADDRESSES section on or
before April 11, 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 www.regulations.gov. All documents in the docket are listed
in the www.regulations.gov 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 www.regulations.gov/docket/EERE-2014-BT-STD-0058. 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:
[email protected].
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
[email protected] 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: [email protected].
Mr. Matthew Schneider, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 597-6265. Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. Current Test Procedure
3. The Joint Agreement
III. General Discussion
A. Scope of Coverage
B. Fairly Representative of Relevant Points of View
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes
2. Technology Options
B. Screening Analysis
1. Screened Out Technologies
a. Thermoelectric Heating, Electric Only
b. Microwave, Electric Only
c. Indirect Heating
d. RF Drying, Electric Only
e. Ultrasonic Drying, Electric Only
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency Levels
b. Incremental Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy 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 Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Capital and Product Conversion Costs
d. Manufacturer Markup Scenarios
3. Discussion of MIA Comments
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
O. Regulatory Impact Analysis
P. Other Comments
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
[[Page 18165]]
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 Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Consumer Clothes
Dryer Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563 and 14094
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Congressional Notification
VII. Approval of the Office of the Secretary
I. Synopsis of the Direct Final Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part B of EPCA \2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include consumer clothes dryers, the
subject of this direct final rule. (42 U.S.C. 6292(a)(7))
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\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Act of 2020, Public Law 116-260 (Dec.
27, 2020), which reflect the last statutory amendments that impact
Parts A and A-1 of EPCA.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
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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 consumer clothes dryers.
The adopted standard levels in this direct final rule were proposed
in a letter submitted to DOE jointly by groups representing
manufacturers, energy and environmental advocates, consumer groups, and
a utility. This letter, titled ``Energy Efficiency Agreement of 2023''
(hereafter, the ``Joint Agreement'',) \3\ recommends specific energy
conservation standards for consumer clothes dryers that, in the
commenters' view, would satisfy the EPCA requirements in 42 U.S.C.
6295(o). DOE subsequently received letters of support 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\ Available at www.regulations.gov/comment/EERE-2014-BT-STD-0058-0055.
\4\ Available at www.regulations.gov/comment/EERE-2014-BT-STD-0058-0056.
\5\ Available at www.regulations.gov/comment/EERE-2014-BT-STD-0058-0057.
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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
elsewhere in this Federal Register a notice of proposed rulemaking
(``NOPR'') that contains standards identical to those adopted in this
direct final rule. Consistent with the statute, DOE is providing a 110-
day public comment period on the direct final rule. (42 U.S.C.
6295(p)(4)(B)) If DOE determines that any comments received provide a
reasonable basis for withdrawal of the direct final rule under 42
U.S.C. 6295(o) or any other applicable law, DOE will publish the
reasons for withdrawal and continue the rulemaking under the NOPR. (42
U.S.C. 6295(p)(4)(C)) See section II.A of this document for more
details on DOE's statutory authority.
The amended standards that DOE is adopting in this direct final
rule are the efficiency levels recommended in the Joint Agreement
(shown in Table I.1). The standards are expressed in terms of the
combined energy factor (``CEFD2''), measured in pounds per
kilowatt-hour (``lb/kWh''), as determined in accordance with DOE's
consumer clothes dryer test procedure at title 10 of the Code of
Federal Regulations (``CFR'') part 430, subpart B, appendix D2
(``appendix D2''). The CEF metric includes active mode, standby mode,
and off mode energy use. The amended standards recommended in the Joint
Agreement are represented as trial standard level (``TSL'') 3
(hereinafter the ``Recommended TSL'') and are described in section V.A
of this document. The Joint Agreement's standards for consumer clothes
dryers apply to all products listed in Table I.1 and manufactured in,
or imported into, the United States starting on March 1, 2028.
[[Page 18166]]
Table I.1--Energy Conservation Standards for Consumer Clothes Dryers
[Compliance starting March 1, 2028]
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Minimum_CEFD2 (lb/
Product class kWh)
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(i) Electric, Standard (4.4 cubic feet (``ft3'') or 3.93
greater capacity)...................................
(ii) Electric, Compact (120 volts (``V'')) (less than 4.33
4.4 ft3 capacity)...................................
(iii) Vented Electric, Compact (240V) (less than 4.4 3.57
ft3 capacity).......................................
(iv) Vented Gas, Standard (4.4 ft3 or greater 3.48
capacity)...........................................
(v) Vented Gas, Compact (less than 4.4 ft3 capacity). 2.02
(vi) Ventless Electric, Compact (240V) (less than 4.4 2.68
ft3 capacity).......................................
(vii) Ventless Electric, Combination Washer-Dryer.... 2.33
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A. Benefits and Costs to Consumers
Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of consumer clothes dryers, 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 consumer clothes dryers, which is estimated to be 14 years
(see section IV.F 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.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).
Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers
of Consumer Clothes Dryers
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Average LCC Simple payback
Consumer clothes dryer class savings (2022$) period (years)
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Electric, Standard (4.4 ft\3\ or $252 0.6
greater capacity)..................
Electric, Compact (120V) (less than 66 2.2
4.4 ft\3\ capacity)................
Vented Electric, Compact (240V) 90 2.0
(less than 4.4 ft\3\ capacity).....
Vented Gas, Standard (4.4 ft\3\ or 102 1.9
greater capacity)..................
Ventless Electric, Compact (240V) 99 0.4
(less than 4.4 ft\3\ capacity).....
Ventless Electric, Combination 11 0.0
Washer-Dryer.......................
------------------------------------------------------------------------
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
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year (2024) through
the end of the analysis period, which is 30 years from the analyzed
compliance date.\7\ Using a real discount rate of 7.5 percent, DOE
estimates that the INPV for manufacturers of consumer clothes dryers in
the case without amended standards is $2.12 billion in 2022$.\8\ Under
the adopted standards, which align with the Recommended TSL for
consumer clothes dryers, DOE estimates the change in INPV to range from
-6.8 percent to -5.7 percent, which is a decrease of approximately
$144.2 million to a decrease of approximately $119.7 million. In order
to bring products into compliance with amended standards, it is
estimated that industry will incur total conversion costs of $180.7
million.
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\7\ DOE's analysis period extends 30 years from the compliance
year. The analysis period for the MIA ranges from 2024-2056 for the
no-new-standards case and all TSLs, except for TSL 3 (the
Recommended TSL). The analysis period for the Recommended TSL ranges
from 2024-2057 due to the 2028 compliance year.
\8\ The no-new-standards case INPV of $2.12 billion reflects the
sum of discounted free cash flows from 2024-2056 (from the reference
year to 30 years after the 2027 compliance date) plus a discounted
terminal value.
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DOE's analysis of the impacts of the adopted standards on
manufacturers is described in section IV.J and section V.B.2 of this
document.
C. National Benefits and Costs 9
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\9\ All monetary values in this document are expressed in 2022
dollars and, where appropriate, are discounted to 2024 unless
explicitly stated otherwise.
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DOE's analyses indicate that the adopted energy conservation
standards for consumer clothes dryers would save a significant amount
of energy. Relative to the case without amended standards, the lifetime
energy savings for consumer clothes dryers purchased in the 30-year
period that begins in the anticipated year of compliance with the
amended standards (2028-2057), amount to 2.7 quadrillion British
thermal units (``Btu''), or quads.\10\ This represents a savings of 11
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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\10\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the standards for consumer clothes dryers ranges from $
9.23 billion (at a 7-percent discount rate) to $20.08 billion (at a 3-
percent discount rate). This NPV expresses the estimated total value of
future operating-cost savings minus the estimated increased product and
installation costs for consumer clothes dryers purchased during the
period 2028-2057.
In addition, the adopted standards for consumer clothes dryers are
projected to yield significant environmental benefits. DOE estimates
that the standards will result in cumulative emission reductions (over
the same period as for
[[Page 18167]]
energy savings) of 57.1 million metric tons (``Mt'') \11\ of carbon
dioxide (``CO2''), 13.9 thousand tons of sulfur dioxide
(``SO2''), 116.5 thousand tons of nitrogen oxides
(``NOX''), 527.6 thousand tons of methane
(``CH4''), 0.5 thousand tons of nitrous oxide
(``N2O''), and 0.1 tons of mercury (``Hg'').\12\ The
estimated cumulative reduction in CO2 emissions through 2030
amounts to 1.3 Mt, which is equivalent to the emissions resulting from
the annual electricity use of more than 260 thousand homes.
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\11\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\12\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2023 (``AEO2023''). AEO2023 represents current Federal and
State legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2023 assumptions that affect air pollutant
emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') using four different estimates of the social
cost of CO2 (``SC-CO2''), the social cost of
methane (``SC-CH4''), and the social cost of nitrous oxide
(``SC-N2O''). Together these represent the social cost of
GHG (``SC-GHG''). DOE used interim SC-GHG values (in terms of benefit
per ton of GHG avoided) developed by an Interagency Working Group on
the Social Cost of Greenhouse Gases (``IWG'').\13\ 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 $3.3
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.
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\13\ To monetize the benefits of reducing GHG emissions, this
analysis uses the interim estimates presented in the Technical
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide
Interim Estimates Under Executive Order 13990 published in February
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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DOE estimated the monetary health benefits of SO2 and
NOX emissions reductions, using benefit-per-ton estimates
from the Environmental Protection Agency,\14\ as discussed in section
IV.L of this document. DOE estimated the present value of the health
benefits would be $2.6 billion using a 7-percent discount rate, and
$6.3 billion using a 3-percent discount rate.\15\ DOE is currently only
monetizing health benefits from changes in ambient fine particulate
matter (PM2.5) concentrations from two precursors
(SO2 and NOX), and from changes in ambient ozone
from one precursor (for NOX), but will continue to assess
the ability to monetize other effects such as health benefits from
reductions in direct PM2.5 emissions.
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\14\ U.S. EPA. Estimating the Benefit per Ton of Reducing
Directly Emitted PM2.5, PM2.5 Precursors and
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
\15\ DOE estimates the economic value of these emissions
reductions resulting from the considered trial standard levels
(``TSLs'') for the purpose of complying with the requirements of
Executive Order 12866.
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Table I.3 summarizes the monetized benefits and costs expected to
result from the amended standards for consumer clothes dryers. There
are other important unquantified effects, including certain
unquantified climate benefits, unquantified public health benefits from
the reduction of toxic air pollutants and other emissions, unquantified
energy security benefits, and distributional effects, among others.
Table I.3--Summary of Monetized Benefits and Costs of Adopted Energy
Conservation Standards for Consumer Clothes Dryers
------------------------------------------------------------------------
Billion (2022$)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 21.1
Climate Benefits *.................................... 3.3
Health Benefits **.................................... 6.3
Total Benefits [dagger]............................... 30.7
Consumer Incremental Product Costs [Dagger]........... 1.0
Net Monetized Benefits................................ 20.1
Change in Producer Cash Flow (INPV [Dagger][Dagger]).. (0.14)-(0.12)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 9.8
Climate Benefits * (3% discount rate)................. 3.3
Health Benefits **.................................... 2.6
Total Benefits [dagger]............................... 15.8
Consumer Incremental Product Costs [Dagger]........... 0.6
Net Monetized Benefits................................ 9.2
Change in Producer Cash Flow (INPV [Dagger][Dagger]).. (0.14)-(0.12)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with
consumer clothes dryers shipped in 2028-2057. These results include
consumer, climate, and health benefits that accrue after 2057 from the
products shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the
global SC-GHG (see section IV.L of this document). For presentational
purposes of this table, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are shown; however, DOE
emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates. To monetize the
benefits of reducing GHG emissions, this analysis uses the interim
estimates presented in the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive
Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
health benefits that can be quantified and monetized. For presentation
purposes, total and net benefits for both the 3-percent and 7-percent
cases are presented using the average SC-GHG with a 3-percent discount
rate.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
[[Page 18168]]
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's
national impact analysis includes all impacts (both costs and
benefits) along the distribution chain beginning with the increased
costs to the manufacturer to manufacture the product and ending with
the increase in price experienced by the consumer. DOE also separately
conducts a detailed analysis on the impacts on manufacturers (the
MIA). See section IV.J of this document and chapter 12 of the direct
final rule technical support document (``TSD''). In the detailed MIA,
DOE models manufacturers' pricing decisions based on assumptions
regarding investments, conversion costs, cashflow, and margins. The
MIA produces a range of impacts, which is the rule's expected impact
on the INPV. The change in INPV is the present value of all changes in
industry cash flow, including changes in production costs, capital
expenditures, and manufacturer profit margins. Change in INPV is
calculated using the industry weighted average cost of capital value
of 7.5 percent that is estimated in the MIA (see chapter 12 of the
direct final rule TSD for a complete description of the industry
weighted average cost of capital). For consumer clothes dryers, those
values are -$144 million to -$120 million. DOE accounts for that range
of likely impacts in analyzing whether a TSL is economically
justified. See section V.C of this document. DOE is presenting the
range of impacts to the INPV under two manufacturer markup scenarios:
the Preservation of Gross Margin scenario, which is the manufacturer
markup scenario used in the calculation of Consumer Operating Cost
Savings in this table, and the Preservation of Operating Profit
scenario, where DOE assumed manufacturers would not be able to
increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated
change in INPV in the above table, drawing on the MIA explained
further in section IV.J of this document, to provide additional
context for assessing the estimated impacts of this direct final rule
to society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE
were to include the INPV into the net benefit calculation for this
direct final rule, the net benefits would range from $19.96 billion to
$19.98 billion at 3-percent discount rate and would range from $9.06
billion to $9.08 billion at 7-percent discount rate. Parentheses ( )
indicate negative values.
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The monetary values for the
total annualized net benefits are (1) the reduced consumer operating
costs, minus (2) the increase in product purchase prices and
installation costs, plus (3) the value of climate and health benefits
of emission reductions, all annualized.\16\
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\16\ 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 consumer clothes
dryers shipped in 2028-2057. The benefits associated with reduced
emissions achieved as a result of the adopted standards are also
calculated based on the lifetime of consumer clothes dryers shipped in
2028-2057. Total benefits for both the 3-percent and 7-percent cases
are presented using the average GHG social costs with a 3-percent
discount rate. Estimates of SC-GHG values are presented for all four
SC-GHG discount rates in section IV.L of this document.
Table I.4 presents the total estimated monetized benefits and costs
associated with the adopted standards, 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 NOX and SO2
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 $60.0 million per year in increased equipment costs,
while the estimated annual benefits are $971.4 million in reduced
equipment operating costs, $185.5 million in climate benefits, and
$259.9 million in health benefits. In this case, the net benefit would
amount to $1,357 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $57.2 million per year in increased
equipment costs, while the estimated annual benefits are $1,177 million
in reduced operating costs, $185.5 million in climate benefits, and
$349.4 million in health benefits. In this case, the net benefit would
amount to $1,654 million per year.
Table I.4--Annualized Benefits and Costs of Adopted Standards for Consumer Clothes Dryers (2028-2057)
----------------------------------------------------------------------------------------------------------------
Million/year (2022$)
-----------------------------------------------------
High-net-
Primary estimate Low-net-benefits benefits
estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................... 1,177 1,103 1,230
Climate Benefits *........................................ 185.5 178.9 187.8
Health Benefits **........................................ 349.4 337.2 353.7
Total Benefits [dagger]................................... 1,712 1,619 1,771
Consumer Incremental Product Costs........................ 57.2 58.9 54.4
Net Benefits.............................................. 1,654 1,560 1,717
Change in Producer Cash Flow (INPV [Dagger][Dagger])...... (12)-(10) (12)-(10) (12)-(10)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................... 971.4 915.5 1,014
Climate Benefits * (3% discount rate)..................... 185.5 178.9 187.8
Health Benefits **........................................ 259.9 251.5 262.8
Total Benefits [dagger]................................... 1,417 1,346 1,464
Consumer Incremental Product Costs [Dagger]............... 60.0 61.2 57.7
Net Benefits.............................................. 1,357 1,285 1,407
[[Page 18169]]
Change in Producer Cash Flow (INPV [Dagger][Dagger])...... (12)-(10) (12)-(10) (12)-(10)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped in 2028-2057.
These results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057.
The Primary, Low-Net-Benefits, and High-Net-Benefits estimates utilize projections of energy prices from the
AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a medium decline rate in the Primary Estimate, a constant rate in the Low-
Net-Benefits Estimate, and a high decline rate in the High-Net-Benefits Estimate. The methods used to derive
projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits
and Costs may not sum up to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with a
3-percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
impact analysis includes all impacts (both costs and benefits) along the distribution chain beginning with the
increased costs to the manufacturer to manufacture the product and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
(the MIA). See section IV.J of this document and chapter 12 of the direct final rule TSD. In the detailed MIA,
DOE models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs,
cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the INPV.
The change in INPV is the present value of all changes in industry cash flow, including changes in production
costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated
using the industry weighted average cost of capital value of 7.5 percent that is estimated in the manufacturer
impact analysis (see chapter 12 of the direct final rule TSD for a complete description of the industry
weighted average cost of capital). For consumer clothes dryers, those values are -$12 million to -$10 million.
DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See
section V.C of this document. DOE is presenting the range of impacts to the INPV under two manufacturer markup
scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the
calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup
scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
change in INPV in the above table, drawing on the MIA explained further in chapter 12 of this direct final
rule TSD, to provide additional context for assessing the estimated impacts of this direct final rule to
society, including potential changes in production and consumption, which is consistent with OMB's Circular A-
4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this direct
final rule, the annualized net benefits, using the primary estimate, would range from $1,642 million to $1,644
at 3-percent discount rate and would range from $1,345 million to $1,347 million at 7-percent discount rate.
Parentheses ( ) indicate negative values.
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.H, IV.K, and IV.L of this document.
D. Conclusion
DOE has determined that the Joint Agreement was submitted jointly
by interested persons that are fairly representative of relevant points
of view, in accordance with 42 U.S.C. 6295(p)(4)(A). After considering
the recommended standards and weighing the benefits and burdens, DOE
has determined that the recommended standards are in accordance with 42
U.S.C. 6295(o), which contains the criteria for prescribing new or
amended standards. Specifically, the Secretary of Energy
(``Secretary'') has determined that the adoption of the recommended
standards would result in the significant conservation of energy and 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
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
standards for consumer clothes dryers is $60.0 million per year in
increased product costs, while the estimated annual benefits are $971.4
million in reduced product operating costs, $185.5 million in climate
benefits, and $259.9 million in health benefits. The net benefit
amounts to $1,357 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.
---------------------------------------------------------------------------
\17\ The information on climate benefits is provided in
compliance with Executive Order 12866.
---------------------------------------------------------------------------
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\18\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand.
[[Page 18170]]
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 2.7 quads FFC, the equivalent of
the primary annual energy use of 18 million homes. In addition, they
are projected to reduce cumulative CO2 emissions by 57.1 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.
Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is
issuing this direct final rule amending the energy conservation
standards for consumer clothes dryers. Consistent with this authority,
DOE is also simultaneously publishing elsewhere in this Federal
Register a NOPR proposing standards that are identical to those
contained in this direct final rule. See 42 U.S.C. 6295(p)(4)(A)(i).
II. Introduction
The following section briefly discusses the statutory authority
underlying this direct final rule, as well as some of the relevant
historical background related to the establishment of standards for
consumer clothes dryers.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include consumer
clothes dryers, the subject of this document. (42 U.S.C. 6292(a)(8))
EPCA prescribed energy conservation standards for these products (42
U.S.C. 6295(g)(3)), and directed DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6295(g)(4)) EPCA
further provides that, not later than 6 years after the issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a NOPR including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(1))
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption in limited instances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (42 U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use
these test procedures to determine whether the products comply with
standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test
procedures for consumer clothes dryers appear at title 10 of the Code
of Federal Regulations (``CFR'') part 430, subpart B, appendix D1
(``appendix D1'') and appendix D2 (``appendix D2'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including consumer clothes
dryers. Any new or amended standard for a covered product must be
designed to achieve the maximum improvement in energy efficiency that
the Secretary determines is technologically feasible and economically
justified. (42 U.S.C. 6295(o)(2)(A) Furthermore, DOE may not adopt any
standard that would not result in the significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
Moreover, DOE may not prescribe a standard if DOE determines by
rule that the standard is not technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed
standard is economically justified, DOE must determine whether the
benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(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 evidence that the standard is likely to result in the
unavailability in the United States in
[[Page 18171]]
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 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 the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, final rules for new or amended energy conservation standards
promulgated after July 1, 2010, are required to address standby mode
and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE's current test procedures for consumer clothes
dryers 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 directly 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 (``Process Rule'' or ``appendix A''), DOE noted
that it may issue standards recommended by interested persons that are
fairly representative of relative points of view as a direct final rule
when the recommended standards are in accordance with 42 U.S.C. 6295(o)
or 42 U.S.C. 6313(a)(6)(B), as applicable. 86 FR 70892, 70912 (Dec. 13,
2021). But the direct final rule provision in EPCA does not impose
additional requirements applicable to other standards rulemakings,
which is consistent with the unique circumstances of rules issued
through consensus agreements under DOE's direct final rule authority.
Id. DOE's discretion remains bounded by its statutory mandate to adopt
a standard that results in the maximum improvement in energy efficiency
that is technologically feasible and economically justified--a
requirement found in 42 U.S.C. 6295(o). Id. As such, DOE's review and
analysis of the Joint Agreement is limited to whether the recommended
standards satisfy the criteria in 42 U.S.C. 6295(o).
B. Background
1. Current Standards
In a direct final rule published on April 21, 2011, (``April 2011
Direct Final Rule'') DOE prescribed the current energy conservation
standards for consumer clothes dryers manufactured on and after January
1, 2015. 76 FR 22454.\19\ These standards are set forth in DOE's
regulations at 10 CFR 430.32(h)(3) and are shown in Table II.1. These
standards are consistent with a prior joint proposal submitted to DOE
by interested parties representing manufacturers, energy and
environmental advocates, and consumer groups.\20\
---------------------------------------------------------------------------
\19\ DOE published a confirmation of effective date and
compliance date for the direct final rule on August 24, 2011. 76 FR
52854.
\20\ Available at: www.regulations.gov/comment/EERE-2007-BT-STD-0010-0049.
---------------------------------------------------------------------------
The current standards are defined in terms of a minimum allowable
CEF, as measured according to appendix D1. Even though DOE maintained
the same energy efficiency descriptor for both appendix D1 and appendix
D2, DOE notes that the CEF values are not equivalent because of the
extensive differences in test methods.\21\ To avoid potential confusion
that would result from using the same efficiency descriptor for both
test procedures as it relates to the standards discussed in this
document, DOE is including a ``D1'' or ``D2'' subscript when referring
to the appendix D1 CEF and appendix D2 CEF, respectively
(``CEFD1'' and ``CEFD2'').
---------------------------------------------------------------------------
\21\ While the current standards are based on CEF as determined
in accordance with appendix D1, manufacturers are permitted to use
the appendix D2 test procedure to comply with the current standards,
as long as they use a single appendix for all representations.
Beginning on the compliance date of the amended standards
established by this direct final rule, manufacturers will be
required to use appendix D2 to comply with the amended standards.
[[Page 18172]]
Table II.1--Federal Energy Efficiency Standards for Consumer Clothes
Dryers as Measured Under Appendix D1
------------------------------------------------------------------------
CEFD1 (lb/
Product class kWh)
------------------------------------------------------------------------
(i) Vented Electric, Standard (4.4 ft\3\ or greater 3.73
capacity)..............................................
(ii) Vented Electric, Compact (120V) (less than 4.4 3.61
ft\3\ capacity)........................................
(iii) Vented Electric, Compact (240V) (less than 4.4 3.27
ft\3\ capacity)........................................
(iv) Vented Gas......................................... 3.30
(v) Ventless Electric, Compact (240V) (less than 4.4 2.55
ft\3\ capacity)........................................
(vi) Ventless Electric, Combination Washer-Dryer........ 2.08
------------------------------------------------------------------------
2. Current Test Procedure
On October 8, 2021, DOE published a final rule for the test
procedure rulemaking (86 FR 56608) (the ``October 2021 TP Final
Rule''), in which it amended appendix D1 and appendix D2, both entitled
``Uniform Test Method for Measuring the Energy Consumption of Clothes
Dryers,'' to provide additional detail in response to questions from
manufacturers and test laboratories, including additional detail
regarding the testing of ``connected'' models, dryness level selection,
and the procedures for maintaining the required heat input rate for gas
consumer clothes dryers; additional detail for the test procedures for
performing inactive and off mode power measurements; specifications for
the final moisture content (``FMC'') required for testing automatic
termination control dryers; specification of a narrower scale
resolution for the weighing scale used to determine moisture content of
test loads; and specification that the test load must be weighed within
5 minutes after a test cycle has terminated. In addition, as part of
the October 2021 TP Final Rule, DOE amended the test procedures to
update the estimated number of annual use cycles for consumer clothes
dryers; provide further direction for additional provisions within the
test procedures; specify rounding requirements for all reported values;
apply consistent use of nomenclature and correct typographical errors;
remove obsolete sections of the test procedures, including appendix D;
and update the reference to the applicable industry test procedure to
the version certified by the American National Standards Institute
(``ANSI''). 86 FR 56608, 56610.
DOE's current energy conservation standards for consumer clothes
dryers are expressed in terms of CEFD1. (See 10 CFR
430.32(h)(3).) Appendix D1 tests timed drying cycles, and accounts for
clothes dryers with automatic termination controls by applying a higher
field use factor to units that have this feature. Appendix D2 tests
``normal'' automatic termination cycles and more accurately measures
the effects of automatic cycle termination.
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)) The appendix D2 test procedure,
which is required for use to demonstrate compliance with the amended
energy conservation standards established in this direct final rule,
measures the energy consumption of a representative use cycle that
dries a load of laundry from an initial moisture content of 57.5
percent to an FMC of less than 2 percent. 86 FR 56624-56625. For timer
clothes dryers, the test load is dried until the FMC is between 1 and
2.5 percent of the bone-dry weight of the test load. The measured
energy consumption is then normalized to determine the energy
consumption required to dry the test load to 2-percent FMC, with a
field use factor applied to account for the over-drying energy
consumption. For automatic termination control clothes dryers, appendix
D2 specifies that a ``normal'' program be selected for the test cycle,
and for clothes dryers that do not have a ``normal'' program, the cycle
recommended by the manufacturer for drying cotton or linen shall be
selected. If the drying temperature and drying level settings can be
chosen independently of the program, they shall be set at the maximum
drying temperature setting, and at a ``normal'' or ``medium'' dryness
level setting. The test is considered valid if the FMC of the test load
is 2 percent or less after the completion of the test cycle. If the FMC
is greater than 2 percent, the test is considered invalid and a new run
shall be conducted using the highest dryness level setting.
The current 2-percent FMC requirement using the DOE test cloth was
adopted as representative of approximately 5-percent FMC for ``real-
world'' clothing, based on data submitted in a joint petition for
rulemaking.\22\ DOE determined in the final rule published on August
14, 2013, that established the appendix D2 Test procedure that the
specified 2-percent FMC using the DOE test load was representative of
consumer expectations for dryness of clothing in field use. 78 FR
49608, 49620-49622, 49610-49611. DOE did not amend the FMC requirements
in the October 2021 TP Final Rule. 86 FR 56626.
---------------------------------------------------------------------------
\22\ The petition was submitted by AHAM, Whirlpool Corporation,
General Electric Company, Electrolux, LG Electronics, Inc., BSH,
Alliance Laundry Systems, Viking Range, Sub-Zero Wolf, Friedrich A/
C, U-Line, Samsung, Sharp Electronics, Miele, Heat Controller, AGA
Marvel, Brown Stove, Haier, Fagor America, Airwell Group, Arcelik,
Fisher & Paykel, Scotsman Ice, Indesit, Kuppersbusch, Kelon, and
DeLonghi, American Council for an Energy Efficient Economy,
Appliance Standards Awareness Project, Natural Resources Defense
Council, Alliance to Save Energy, Alliance for Water Efficiency,
Northwest Power and Conservation Council, and Northeast Energy
Efficiency Partnerships, Consumer Federation of America and the
National Consumer Law Center. See Docket No. EERE-2011-BT-TP-0054,
No. 3.
---------------------------------------------------------------------------
DOE has conducted the rulemaking analysis for this direct final
rule based on CEFD2 because compliance with the amended
energy conservation standards established in this direct final rule
must be determined based on the use of appendix D2. DOE discusses
additional details in section IV.C.1 of this document about how it
developed the engineering baseline, in terms of CEFD2, from
the current consumer clothes dryer standards that are in terms of
CEFD1.
3. The Joint Agreement
On September 25, 2023, DOE received a joint statement of
recommended standards (i.e., the Joint Agreement) for various home
appliance products, including consumer clothes dryers, submitted
jointly by groups representing manufacturers, energy and environmental
advocates, consumer groups, and a utility.\23\ In addition to the
[[Page 18173]]
recommended standards for consumer clothes dryers, the Joint Agreement
also included separate recommendations for several other covered
products.\24\ And, while acknowledging that DOE may implement these
recommendations in separate rulemakings, the Joint Agreement also
stated that the recommendations were recommended as a complete package
and each recommendation is contingent upon the other parts being
implemented. DOE understands this to mean that the Joint Agreement is
contingent upon DOE initiating rulemaking processes to adopt all of the
recommended standards in the agreement. That is distinguished from an
agreement where issuance of an amended energy conservation standard for
a covered product is contingent on issuance of amended energy
conservation standards for the other covered products. If the Joint
Agreement were so construed, it would conflict with the anti-
backsliding provision in 42 U.S.C. 6295(o)(1), because it would imply
the possibility that, if DOE were unable to issue an amended standard
for a certain product, it would have to withdraw a previously issued
standard for one of the other products. The anti-backsliding provision,
however, prevents DOE from withdrawing or amending an energy
conservation standard to be less stringent. As a result, DOE will be
proceeding with individual rulemakings that will evaluate each of the
recommended standards separately under the applicable statutory
criteria.
---------------------------------------------------------------------------
\23\ The signatories to the Joint Agreement include AHAM,
American Council for an Energy-Efficient Economy, Alliance for Water
Efficiency, Appliance Standards Awareness Project, Consumer
Federation of America, Consumer Reports, Earthjustice, National
Consumer Law Center, Natural Resources Defense Council, Northwest
Energy Efficiency Alliance, and Pacific Gas and Electric Company.
Members of AHAM's Major Appliance Division that make the affected
products include: Alliance Laundry Systems, LLC; Asko Appliances AB;
Beko US Inc.; Brown Stove Works, Inc.; BSH Home Appliances
Corporation; Danby Products, Ltd.; Electrolux Home Products, Inc.,;
Elicamex S.A. de C.V.; Faber; Fotile America; GE Appliances, a Haier
Company; L'Atelier Paris Haute Design LLG; LG Electronics; Liebherr
USA, Co.; Midea America Corp.; Miele, Inc.; Panasonic Appliances
Refrigeration Systems (PAPRSA) Corporation of America; Perlick
Corporation; Samsung Electronics America Inc; Sharp Electronics
Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The Middleby
Corporation; U-Line Corporation; Viking Range, LLC; and Whirlpool
Corporation.
\24\ 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 residential dishwashers with a cycle
time for the normal cycle of 60 minutes or less, top-loading
residential clothes washers (``RCWs'') and certain classes of consumer
clothes dryers with a cycle time of less than 30 minutes, and front-
loading RCWs with a cycle time of less than 45 minutes (collectively,
``short cycle product classes''). The petitioners argued that the final
rule revoking the short cycle product classes violated EPCA and was
arbitrary and capricious. On January 8, 2024, the United States Court
of Appeals for the Fifth Circuit granted the petition for review and
remanded the matter to DOE for further proceedings consistent with the
Fifth Circuit's opinion. See Louisiana v. United States Department of
Energy, 90 F.4th 461 (5th Cir. 2024). On February 14, 2024, following
the Fifth Circuit's decision in Louisiana v. United States Department
of Energy, DOE received a second joint statement from this same group
of stakeholders in which the signatories reaffirmed the Joint
Agreement, stating that the recommended standards represent the maximum
levels of efficiency that are technologically feasible and economically
justified.\25\ In the letter, the signatories clarified that ``short-
cycle'' product classes for RCWs, 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
consumer clothes dryers.
---------------------------------------------------------------------------
\25\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
The Joint Agreement recommends amended standard levels for consumer
clothes dryers as presented in Table II.2. (Joint Agreement, No. 55 at
p. 9) \26\ Details of the Joint Agreement recommendations for other
products are provided in the Joint Agreement posted in the docket.\27\
---------------------------------------------------------------------------
\26\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for consumer clothes dryers. (Docket
No. EERE-2014-BT-STD-0058, which is maintained at
www.regulations.gov). The references are arranged as follows:
(commenter name, comment docket ID number at page of that document).
\27\ The Joint Agreement available in the docket at
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0055.
Table II.2--Recommended Amended Energy Conservation Standards for
Consumer Clothes Dryers
------------------------------------------------------------------------
Minimum
energy
Product class efficiency Compliance date
ratio (lb/
kWh)
------------------------------------------------------------------------
Electric, Standard (4.4 cubic 3.93 March 1, 2028
feet (``ft\3\'') or greater
capacity).
Electric, Compact (120 volts 4.33
(``V'')) (less than 4.4 ft\3\
capacity).
Vented Electric, Compact (240V) 3.57
(less than 4.4 ft\3\ capacity).
Vented Gas, Standard (4.4 ft\3\ 3.48
or greater capacity).
Vented Gas, Compact (less than 2.02
4.4 ft\3\ capacity).
Ventless Electric, Compact (240V) 2.68
(less than 4.4 ft\3\ capacity).
Ventless Electric, Combination 2.33
Washer-Dryer.
------------------------------------------------------------------------
When the Joint Agreement was submitted, DOE was conducting a
rulemaking to consider amending the standards for consumer clothes
dryers. As part of that process, DOE published a NOPR and announced a
public meeting on August 23, 2022 (``August 2022 NOPR'') seeking
comment on its proposed amended standard to inform its decision
consistent with its obligations under EPCA and the Administrative
Procedure Act (``APA''). 87 FR 51734. DOE subsequently held a public
webinar on September 13, 2022, to discuss and receive comments on the
NOPR TSD.
Although DOE is adopting the Joint Agreement as a direct final rule
and no
[[Page 18174]]
longer proceeding with its prior rulemaking, DOE did consider relevant
comments, data, and information obtained during that rulemaking process
in determining whether the recommended standards from the Joint
Agreement are in accordance with 42 U.S.C. 6295(o). Any discussion of
comments, data, or information in this direct final rule that were
obtained during DOE's prior rulemaking will include a parenthetical
reference that 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 consumer clothes dryers. (Docket
No. EERE-2014-BT-STD-0058, which is maintained at
www.regulations.gov). The references are arranged as follows:
(commenter name, comment docket ID number at 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
persons that are fairly representative of relevant points of view and
the recommended standards satisfy the criteria in 42 U.S.C. 6295(o).
On March 17, 2022, various states filed a petition seeking review
of a final rule revoking two final rules that established product
classes for residential dishwashers with a cycle time for the normal
cycle of 60 minutes or less, top-loading RCWs and certain classes of
consumer clothes dryers with a cycle time of less than 30 minutes, and
front-loading RCWs with a cycle time of less than 45 minutes
(collectively, ``short cycle product classes''). The petitioners argued
that the final rule revoking the short cycle product classes violated
EPCA and was arbitrary and capricious. On January 8, 2024, the United
States Court of Appeals for the Fifth Circuit granted the petition for
review and remanded the matter to DOE for further proceedings
consistent with the Fifth Circuit's opinion. See Louisiana v. United
States Department of Energy, 90 F.4th 461 (5th Cir. 2024)
Following the Fifth Circuit's decision, the signatories to the
Joint Agreement submitted a second letter to DOE, which stated that
Joint Recommendation did not ``address'' ``short-cycle product
classes.'' \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:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
In a recently issued Request for Information,\30\ DOE is commencing
a rulemaking process on remand from the Fifth Circuit (the Remand
Proceeding) by soliciting further information, relevant to the issues
identified by the Fifth Circuit, regarding any short cycle product
classes. In that Remand Proceeding, DOE will conduct the analysis
required by 42 U.S.C. 6295(q)(1)(B) to determine whether any short-
cycle products have a ``capacity or other performance-related feature
[that] . . . justifies a higher or lower standard from that which
applies (or will apply) to other products. . . .''
---------------------------------------------------------------------------
\30\ See https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=50.
---------------------------------------------------------------------------
The current standards applicable to any products within the scope
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(g).
Consistent with the Joint Parties' letter, short-cycle products are not
subject to the amended standards adopted by this direct final rule. 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 consumer
clothes dryers: electric, standard; electric, compact; vented electric,
compact; vented gas, standard; vented gas, compact; ventless electric,
compact; and ventless electric, combination washer-dryer. Although
these product classes were not further divided by cycle time, DOE
understands them to exclude vented electric standard-size clothes
dryers and vented gas standard-size clothes dryers with a cycle time of
less than 30 minutes, when tested according to appendix D2. As
previously noted, any such ``short-cycle'' consumer clothes dryers will
be considered in the Remand Proceeding; the current standards
applicable to such ``short-cycle'' consumer clothes dryers are
unchanged by this rule.
Under the direct final rule authority at 42 U.S.C. 6295(p)(4), DOE
evaluates whether recommended standards are in accordance with criteria
contained in 42 U.S.C. 6295(o). DOE does not have the authority to
revise recommended standards submitted under the direct final rule
provision in EPCA. Therefore, DOE did not analyze any additional
product classes beyond those product classes included in the Joint
Agreement. That is, DOE has not separately considered or established
amended standards applicable to any short-cycle product classes. In the
event that DOE establishes short-cycle product classes, pursuant to the
rulemaking on remand from the Fifth Circuit, DOE will necessarily
consider what amended standards ought to apply to any such product
classes and will do so in conformance with EPCA.
DOE notes that the data and analysis used to support this direct
final rule includes information for vented electric standard-size
clothes dryers and vented gas standard-size clothes dryers that is not
distinguished by cycle time and is representative of all consumer
clothes dryers currently on the market today. To the extent that any
short cycle product classes were included in this data and analysis,
DOE believes the amount of such data is negligible.
A. Scope of Coverage
Before discussing how the Joint Agreement meets the requirements
for issuing a direct final rule, it is important to clarify the scope
of coverage for the recommended standards. EPCA does not define the
term ``clothes dryer.'' (See 42 U.S.C. 6291) DOE has defined an
``electric clothes dryer'' as a cabinet-like appliance designed to dry
fabrics in a tumble-type drum with forced air circulation. The heat
source is electricity and the drum and blower(s) are driven by an
electric motor(s). 10 CFR 430.2. DOE has defined a ``gas clothes
dryer'' as a cabinet-like appliance designed to dry fabrics in a
tumble-type drum with forced air circulation. The heat source is gas
and the drum and blower(s) are driven by an electric motor(s). Id. This
direct final rule covers consumer clothes dryers, i.e., those consumer
products that meet the definitions of ``electric clothes dryer'' and
``gas clothes dryer,'' as codified at 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
[[Page 18175]]
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 11 manufacturers of consumer clothes dryers.\31\ 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 a gas and electric utility, SDG&E,
and an 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.
---------------------------------------------------------------------------
\31\ These companies include: Alliance Laundry Systems, LLC;
Beko US Inc.; BSH Home Appliances Corporation; Danby Products, Ltd.;
Electrolux Home Products, Inc.; GE Appliances, a Haier Company; LG
Electronics; Midea America Corp.; Miele, Inc.; Samsung Electronics
America Inc.; and Whirlpool Corporation.
---------------------------------------------------------------------------
C. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. In evaluating the recommended standards proposed in the
Joint Agreement, DOE conducted the same analysis. 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.
Sections 7(b)(2)-(5) of appendix A. Section IV.B of this document
discusses the results of the screening analysis for consumer clothes
dryers, 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 an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(o)(2)(A)) Accordingly, in
the engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for consumer
clothes dryers using the design parameters for the most efficient
products available on the market or in working prototypes. The max-tech
levels that DOE determined for this rulemaking are described in section
IV.C of this document and in chapter 5 of the direct final rule TSD.
D. Energy Savings
1. Determination of Savings
For each TSL considered, DOE projected energy savings from
application of the TSL to consumer clothes dryers purchased in the 30-
year period that begins in the year of compliance with the amended
standards (2027-2056 for all TSLs except the Recommended TSL (i.e., TSL
3) and 2028-2057 for TSL 3).\32\ The savings are measured over the
entire lifetime of consumer clothes dryers 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.
---------------------------------------------------------------------------
\32\ 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 consumer clothes dryers. The NIA spreadsheet model
(described in section IV.H of this document) calculates energy savings
in terms of site energy, which is the energy directly consumed by
products at the locations where they are used. For electricity, DOE
reports national energy savings in terms of primary energy savings,
which is the savings in the energy that is used to generate and
transmit the site electricity. For natural gas, the primary energy
savings are considered to be equal to the site energy savings. DOE also
calculates NES in terms of FFC energy savings. The FFC metric includes
the energy consumed in extracting, processing, and transporting primary
fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a
more complete picture of the impacts of energy conservation
standards.\33\ DOE's approach is based on the calculation of an FFC
multiplier for each of the energy types used by covered products or
equipment. For more information on FFC energy savings, see section
IV.H.2 of this document.
---------------------------------------------------------------------------
\33\ 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
including through a direct final rule, 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.\34\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impact 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.
---------------------------------------------------------------------------
\34\ 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 2.7 quads, the
equivalent of the electricity
[[Page 18176]]
use of 18 million homes in one year. 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 direct final rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of amended standards on manufacturers,
DOE conducts an MIA, as discussed in section IV.J of this document. DOE
first uses an annual cash-flow approach to determine the quantitative
impacts. This step includes both a short-term assessment--based on the
cost and capital requirements during the period between when a
regulation is issued and when entities must comply with the
regulation--and a long-term assessment over a 30-year period. The
industry-wide impacts analyzed include (1) INPV, which values the
industry on the basis of expected future cash flows; (2) cash flows by
year; (3) changes in revenue and income; and (4) other measures of
impact, as appropriate. Second, DOE analyzes and reports the impacts on
different types of manufacturers, including impacts on small
manufacturers. Third, DOE considers the impact of standards on domestic
manufacturer employment and manufacturing capacity, as well as the
potential for standards to result in plant closures and loss of capital
investment. Finally, DOE takes into account cumulative impacts of
various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating cost (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section IV.H of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In evaluating design options and the impact of the recommended
standard levels, DOE evaluates potential standards that would not
lessen the utility or performance of the considered products. (42
U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the
standards adopted in this document would not reduce the utility or
performance of the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It
also directs the Attorney General to determine the impact, if any, of
any lessening of competition likely to result from a standard and to
transmit such determination to the Secretary within 60 days of the
publication of a proposed rule, together with an analysis of the nature
and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will
transmit a copy of this direct final rule to the Attorney General with
a request that the Department of Justice (``DOJ'') provide its
determination on this issue. DOE will consider DOJ's comments on the
rule in determining whether to withdraw the direct final rule. DOE will
also publish and respond to the DOJ's comments in the Federal Register
in a separate document.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the adopted standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when
[[Page 18177]]
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 of this document.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking regarding consumer clothes dryers. 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 consumer clothes dryers 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: www.regulations.gov/docket/EERE-2014-BT-STD-0058. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook 2023 (``AEO2023'') for the emissions and utility
impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
that could improve the energy efficiency of consumer clothes dryers.
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 seven product classes for consumer
clothes dryers. (Joint Agreement, No. 55 at p. 9). In this direct final
rule, DOE is adopting the product classes from the Joint Agreement, as
listed in Table IV.1.
Table IV.1--Joint Agreement Consumer Clothes Dryer Product Classes
------------------------------------------------------------------------
Product classes
-------------------------------------------------------------------------
1. Electric, Standard (4.4 ft3 or greater capacity)
2. Electric, Compact (120V) (less than 4.4 ft3 capacity)
3. Vented Electric, Compact (240V) (less than 4.4 ft3 capacity)
4. Vented Gas, Standard (4.4 ft3 or greater capacity)
5. Vented Gas, Compact (less than 4.4 ft3 capacity)
6. Ventless Electric, Compact (240V) (less than 4.4 ft3 capacity)
7. Ventless Electric, Combination Washer-Dryer
------------------------------------------------------------------------
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. However, in
accordance with 42 U.S.C. 6295(o)(4)--which is applicable to direct
final rules--DOE has concluded that the standards adopted in this
direct final rule will not result in the unavailability in any covered
product type (or class) of performance characteristics, features,
sizes, capacities, and volumes that are substantially the same as those
generally available in the United States currently.\35\ Additionally,
DOE notes that DOE's findings in this regard are discussed in detail in
section V.B.4 of this document.
---------------------------------------------------------------------------
\35\ EPCA specifies that DOE may not prescribe an amended or new
standard if the Secretary finds (and publishes such finding) that
interested persons have established by a preponderance of the
evidence that the standard is likely to result in the unavailability
in the United States in any covered product type (or class) of
performance characteristics (including reliability), features,
sizes, capacities, and volumes that are substantially the same as
those generally available in the United States at the time of the
Secretary's finding. (42 U.S.C. 6295(o)(4))
---------------------------------------------------------------------------
2. Technology Options
In this direct final rule, DOE considered the technology options
listed in Table IV.2, consistent with the table of technology options
presented in the August 2022 NOPR. 87 FR 51734. Chapter 3 of the TSD
for this direct final
[[Page 18178]]
rule includes a detailed list and descriptions of all technology
options identified for consumer clothes dryers. As discussed in chapter
3 of the TSD for this direct final rule, DOE has performed market
research and evaluated available consumer clothes dryers to assess
existing technology options to improve efficiency. The results of this
research are discussed in chapter 3 of the TSD for this direct final
rule. DOE notes that it did not receive any comments regarding the
technology options analyzed in the August 2022 NOPR.
Table IV.2--Direct Final Rule Analysis: Technology Options for Consumer
Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer control or drum upgrades:
Improved termination
Increased insulation
Modified operating conditions
Improved air circulation
Improved drum design
Methods of Exhaust Heat Recovery (Vented Models Only):
Recycle exhaust heat
Inlet air preheat
Inlet air preheat, condensing mode
Moisture Removal Options:
Heat pump, electric only
Thermoelectric heating, electric only
Microwave, electric only
Modulating heat
Indirect heating
RF drying, electric only
Ultrasonic drying, electric only
Component Improvements:
Improved motor efficiency
Improved fan efficiency
Standby Power Improvements:
Transformerless power supply with auto-powerdown
------------------------------------------------------------------------
B. Screening Analysis
DOE uses the following screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in commercially viable, existing
prototypes will not be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production of a technology in commercial products
and reliable installation and servicing of the technology could not be
achieved on the scale necessary to serve the relevant market at the
time of the projected compliance date of the standard, then that
technology will not be considered further.
(3) Impacts on product utility. If a technology is determined to
have a significant adverse impact on the utility of the product to
subgroups of consumers or result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
(4) Safety of technologies. If it is determined that a technology
would have significant adverse impacts on health or safety, it will not
be considered further.
(5) Unique-pathway proprietary technologies. If a technology has
proprietary protection and represents a unique pathway to achieving a
given efficiency level, it will not be considered further, due to the
potential for monopolistic concerns.
10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
In sum, if DOE determines that a technology, or a combination of
technologies, fails to meet one or more of the listed five criteria, it
will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include 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.
1. Screened Out Technologies
In conducting the screening analysis for this direct final rule,
DOE considered comments it had received in response to the screening
analysis conducted for the August 2022 NOPR.
a. Thermoelectric Heating, Electric Only
DOE notes that thermoelectric heating clothes dryers are still
undergoing preliminary research, including at Oak Ridge National
Laboratory (``ORNL''). While ORNL's test results of a preliminary
prototype have shown the potential for improved efficiency, ORNL
indicated that the initial prototype design produced longer-than-
desired drying times due to direct-contact heat transfer limitations
via the drum surface. ORNL subsequently developed another prototype
that added pumped secondary water loops that transferred heat from the
thermoelectric modules to the process air via air-to-water heat
exchangers to further improve efficiency and minimize cycle length.
ORNL's testing indicated efficiency and cycle times for this prototype
that are approximately equivalent to those of vapor compression heat
pump clothes dryers.\36\ Because the research for such a thermoelectric
heating clothes dryer that produces energy savings and meets consumer
expectations for drying cycle time is still in the prototype stage, DOE
determined that this technology option would not be practicable to
manufacture, install, and service on a scale necessary to serve the
relevant market at the time of the projected compliance date of any new
or amended consumer clothes dryer standards, and did not consider it
for further analysis.
---------------------------------------------------------------------------
\36\ Patel, V., Boudreaux, P., and Gluesenkamp, K. Oak Ridge
National Laboratory. Validated Model of a Thermoelectric Heat Pump
Clothes Dryer Using Secondary Pumped Loops. Applied Thermal
Engineering, Volume 184, February 5, 2021.
---------------------------------------------------------------------------
[[Page 18179]]
b. Microwave, Electric Only
Due to the large energy savings associated with microwave drying,
this technology was the subject of a multiyear development effort at
the Electric Power Research Institute (``EPRI'') in the mid-1990s.\37\
At least one major manufacturer--Whirlpool--developed a countertop-
scale version of such a product as recently as 2002,\38\ but to date
this technology has not been successfully commercialized.
---------------------------------------------------------------------------
\37\ S. Ashley. 1998. ``Energy-Efficient Appliances,''
Mechanical Engineering Magazine, March 1998, pp. 94-97.
\38\ E. Spagat. 2002. ``Whirlpool Goes Portable to Sell Dryers
to Gen Y,'' Wall Street Journal, June 4, 2002.
---------------------------------------------------------------------------
Microwave drying introduces significant technical and safety issues
with potential arcing from metallic objects in the fabric load,
including zippers, buttons, or ``stray'' items such as coins. While
efforts have been made to mitigate the conditions that are favorable to
arcing or to detect incipient arcing and terminate the cycle, the
possibility of fabric damage cannot be completely eliminated.\39\ In
addition to those consumer utility impacts, these conditions can also
pose a safety hazard. For these reasons, microwave drying was not
considered further for analysis.
---------------------------------------------------------------------------
\39\ J.F. Gerling. 2003. ``Microwave Clothes Drying--Technical
Solutions to Fundamental Challenges,'' Appliance Magazine, April
2003, p. 120.
---------------------------------------------------------------------------
c. Indirect Heating
Indirect heating would be viable only in residences that use a
hydronic heating system. Also, in order to derive clothes dryer heat
energy from a home's heating system, significant plumbing work would be
required to circulate heated water through a heat exchanger in the
clothes dryer. Therefore, this technology option does not meet the
criterion of practicability to install on a scale necessary to serve
the relevant market at the time of the effective date of any new
standard and was not considered for further analysis.
d. RF Drying, Electric Only
CoolDry, LLC (``CoolDry'') developed an RF clothes dryer prototype,
claiming an efficiency of 90 percent, compared to 50 percent for
conventional clothes dryers.\40\ CoolDry stated that its RF drying
technology operates at lower temperatures than do conventional clothes
dryers and, because the transfer of energy to clothes is not dependent
on convective heat transfer, the RF clothes dryer requires less
tumbling and subsequently consumes less energy for drum rotation than a
conventional clothes dryer. Because this technology was in the
prototype stage at the time it was initially considered and the company
is no longer in business, research and development is unlikely to be
ongoing. Therefore, DOE determined that this technology option would
not be practicable to manufacture, install, and service on a scale
necessary to serve the relevant market at the time of the projected
compliance date of any new or amended consumer clothes dryer standards
and did not consider it for further analysis.
---------------------------------------------------------------------------
\40\ Cool Dry did not specify the metric or test method used to
determine the efficiency of its prototype.
---------------------------------------------------------------------------
e. Ultrasonic Drying, Electric Only
Researchers at ORNL have developed an ultrasonic drying prototype
that uses piezoelectric transducers to separate water from clothes
through water cavitation produced by ultrasonic vibrations. According
to their research, the energy imparted to the water must overcome
surface tension in order to break the water into droplets, but this
energy is substantially less than the latent heat of vaporization of
water, which is the primary thermodynamic barrier for conventional
evaporation drying. The ORNL researchers anticipate that ultrasonic
drying technology will result in an energy factor \41\ of greater than
10 and a drying time of less than 20 minutes.\42\ Because this
technology is still in the prototype stage, however, DOE determined
that this technology option would not be practicable to manufacture,
install, and service on a scale necessary to serve the relevant market
at the time of the projected compliance date of any new or amended
consumer clothes dryer standards and did not consider it for further
analysis.
---------------------------------------------------------------------------
\41\ This energy factor incorporates only active mode energy use
and not standby mode and off mode energy use.
\42\ Momen, A. Ultrasonic Clothes Dryer: 2016 Building
Technologies Office Peer Review. 2016. Prepared for the U.S.
Department of Energy at Oak Ridge National Laboratory, in
partnership with the University of Florida and General Electric, p.
2.
---------------------------------------------------------------------------
DOE did not receive any comments in response to the August 2022
NOPR regarding these screened out technology options, and for the
reasons discussed, screened out the same technologies for this direct
final rule analysis.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.A.2 of
this document met all screening criteria to be examined further as
design options in DOE's direct final rule analysis. In summary, DOE did
not screen out the following technology options:
Table IV.3--Retained Design Options for Consumer Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination
Modified operating conditions
Improved air circulation
Increased insulation
Improved drum design
Methods of Exhaust Heat Recovery (vented models only):
Recycle exhaust heat
Inlet air preheat
Inlet air preheat, condensing mode
Moisture Removal Options:
Heat pump, electric only
Modulating heat
Component Improvements:
Improved motor efficiency
Improved fan efficiency
Standby Power Improvements:
Transformerless Power Supply with Auto-Powerdown
------------------------------------------------------------------------
[[Page 18180]]
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.
As previously discussed, on February 14, 2024, DOE received a
second joint statement from the same group of stakeholders that
submitted the Joint Agreement in which the signatories reaffirmed the
standards recommended in the Joint Agreement.\43\ In particular, the
letter states that the joint stakeholders do not anticipate the
recommended standards will negatively affect features or performance.
---------------------------------------------------------------------------
\43\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of consumer clothes
dryers. There are two elements to consider in the engineering analysis:
the selection of efficiency levels to analyze (i.e., the efficiency
analysis) and the determination of product cost at each efficiency
level (i.e., the cost analysis). In determining the performance of
higher efficiency products, DOE considers technologies and design
option combinations not eliminated by the screening analysis. For each
product class, DOE estimates the baseline cost, as well as the
incremental cost for the product/equipment at efficiency levels above
the baseline. The output of the engineering analysis is a set of cost-
efficiency ``curves'' that are used in downstream 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-tech'' level exceeds the maximum efficiency
level currently available on the market).
For this direct final rule, DOE used an efficiency-level approach,
supplemented with reverse engineering. This approach involved first
testing and then physically disassembling a representative sample of
commercially available products, reviewing publicly available cost
information, and modeling equipment cost. From this information and
through the reverse engineering process, DOE estimated the manufacturer
production costs (``MPCs'') for a range of products currently available
on the market, considering the design options and the steps
manufacturers would likely take to reach a certain efficiency level. As
part of this analysis, DOE included test units that represent baseline
models, newly introduced units on the market, units with unique
configurations, and units with technologies as observed in the
technology assessment. The efficiency levels analyzed as part of this
engineering analysis are attainable using commercially available
clothes dryer technologies, or technologies that have been demonstrated
in working prototypes.
a. Baseline Efficiency Levels
For each product/equipment class, DOE generally selects a baseline
model as a reference point for each class, and measures changes
resulting from potential energy conservation standards against the
baseline. The baseline model in each product/equipment class represents
the characteristics of a product/equipment 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.
The baseline clothes dryer efficiency levels for this direct final
rule differ from the existing energy conservation standards that were
established in the 2011 rulemaking analysis primarily due to the
difference between the then-current appendix D1, which DOE used to
evaluate products in the previous rulemaking, and the present version
of appendix D2, established in the October 2021 TP Final Rule and which
DOE used as the basis for this analysis. Appendix D2 includes test
methods that more accurately measure the effects of automatic cycle
termination and that may result in differences in the total measured
energy consumption of the test cycle as compared to the test methods in
appendix D1. Specifically, for automatic termination control dryers,
appendix D2 requires a lower FMC of the test load and does not rely on
a field use factor to account for the over-drying energy consumption,
instead requiring that the automatic termination drying program run to
the end of the cycle. Additionally, appendix D2 contains instructions
for the testing of timer dryers, which include a lower FMC of the test
load as compared to the version of appendix D1 used for the 2011
rulemaking analysis.
For the engineering analysis, DOE began by identifying the
efficiency level corresponding to the Federal minimum energy
conservation standards for each product class. Due to the test
procedure changes adopted in the October 2021 Final Rule, DOE
determined the baseline efficiency level representative of minimally
compliant products when tested under appendix D2. To identify the
appendix D2 baseline levels, DOE tested 22 models that were certified
as minimally compliant with the current energy conservation standards,
from across all product classes. Because certified performance data are
not available for models on the market tested in accordance with both
appendix D1 and appendix D2, DOE tested each basic model in its test
sample in accordance with appendix D1 and appendix D2 and used the test
values for appendix D2 to determine the baseline models in support of
this engineering analysis. Due to the differences in the two test
procedures previously described, the baseline CEFD2 measured
using appendix D2 is numerically lower for each product class than the
corresponding CEFD1 value in the current energy conservation
standards, though that does not indicate a lower efficiency. The test
procedure differences drive the lower baseline
[[Page 18181]]
CEFD2 values and do not represent a lower efficiency or
backsliding.
With regard to the vented gas compact product class, DOE is unaware
of any currently available commercial products that fall within the
vented gas compact product class. To determine the baseline level for
this product class, DOE analyzed a vented gas compact-size model that
was previously available on the market prior to the effective date of
the current energy conservation. DOE's previous testing of that model--
which utilized electromechanical controls--suggests that the model
would not be compliant with the existing standards. DOE expects that
manufacturers would implement electronic controls as a design option to
produce vented gas compact clothes dryers that minimally comply with
the existing standard. DOE determined the efficiency performance that
would be achieved through the addition of electronic controls by
applying the same relative efficiency improvement observed with the
implementation of electronic controls for standard-size vented gas
clothes dryers, as shown in Table IV.8 in section IV.C.1.b of this
document. The resulting estimated level of baseline performance for the
vented gas compact product class is consistent with the efficiency
level recommended by the Joint Agreement for this product class.
The baseline efficiency levels considered for this analysis are
presented along with the current standards in Table IV.4 and are
discussed in more detail in chapter 5 of the direct final rule TSD. The
baseline values are the same as those proposed in the August 2022 NOPR,
except for the vented gas compact product class as discussed.
Table IV.4--Direct Final Rule Consumer Clothes Dryer Baseline Efficiency
Levels
------------------------------------------------------------------------
CEFD1 (lb/kWh) CEFD2 (lb/kWh)
Product class *
------------------------------------------------------------------------
(i) Electric, Standard (4.4 ft3 or 3.73 2.20
greater capacity)......................
(ii) Electric, Compact (120V) (less than 3.61 2.36
4.4 ft3 capacity)......................
(iii) Vented Electric, Compact (240V) 3.27 2.00
(less than 4.4 ft3 capacity)...........
(iv) Vented Gas, Standard (4.4 cubic ft3 3.30 2.00
or greater capacity)...................
(v) Vented Gas, Compact (less than 4.4 3.30 2.02
ft3 capacity)..........................
(vi) Ventless Electric, Compact (240V) 2.55 2.03
(less than 4.4 ft3 capacity)...........
(vii) Ventless Electric, Combination 2.08 2.27
Washer-Dryer...........................
------------------------------------------------------------------------
* As discussed, the baseline CEFD2 values represent differences in test
procedure between appendix D1 and appendix D2 and do not constitute
backsliding. CEFD2 baseline efficiency levels as measured under
appendix D2 account for differences in the effectiveness of automatic
cycle termination. Manufacturers implement automatic termination in a
variety of ways, which will impact the representations as measured
under appendix D2 and result in a range of possible CEFD2 values, as
compared to the CEFD1 values in the existing Federal standards.
b. Incremental Efficiency Levels
DOE developed incremental efficiency levels by reviewing products
currently available on the market and by testing and reverse
engineering products in the DOE test sample in support of the direct
final rule. For each product class, DOE analyzed several efficiency
levels and determined the incremental MPC at each of these levels. DOE
initially reviewed data in DOE's Compliance Certification Database
(``CCD'') to evaluate the range of efficiencies for consumer clothes
dryers currently available on the market. As discussed in chapter 5 of
the direct final rule TSD, non-ENERGY STAR-qualified products (i.e.,
generally units with lower-rated efficiencies) are typically tested
using appendix D1, while ENERGY STAR-qualified products are required to
be tested using appendix D2. As a result, DOE conducted testing on a
representative sample of non-ENERGY STAR-qualified products using
appendix D2 to determine appropriate initial incremental efficiency
levels for each product class. DOE observed that while electronic
controls are typically implemented with other design options in this
analysis, the improved automatic termination precision offered by
switching to electronic controls contributed significantly to an
increase in efficiency. This efficiency gain informed the first
incremental efficiency levels for most product classes and was noted
simply as electronic controls in the design options listed in the
tables later in this section. The design options associated with higher
efficiency levels were subsequently distinguished according to specific
design options DOE found manufacturers used to meet these higher
efficiencies. As part of DOE's analysis, the maximum available
efficiency level is the highest efficiency unit currently available on
the market. DOE also defines a ``max-tech'' efficiency level to
represent the maximum possible efficiency for a given product.
For the vented gas compact product class, no units were available
on the market at the time of the analysis whose rated value exceeded
the baseline level. Given recent market trends, DOE does not have
reason to expect manufacturers to re-introduce compact-size vented gas
clothes dryers to the market, regardless of amendments to energy
conservation standards. Accordingly, DOE did not consider any higher
efficiency levels for this product class.
In defining the incremental efficiency levels for the other product
classes for this direct final rule, DOE considered comments it had
received in response to the incremental efficiency levels proposed in
the August 2022 NOPR, including several from commenters who support the
Joint Agreement.
The CA IOUs supported DOE's decision to adopt the updated max-tech
levels as indicative of the growth and maturity of heat pump
technologies for vented and ventless products. The CA IOUs further
commented that adopting the max-tech levels sets a key precedent for
subsequent DOE energy efficiency and non-DOE rulemakings to represent
the true potential of a product class. (California IOUs, No. 50 at pp.
4-5)
AHAM and Whirlpool disagreed with DOE's tentative determination
that the proposed standards in the August 2022 NOPR would allow for
electromechanical controls. AHAM and Whirlpool commented that
electronic controls are required to enable the technology options for
the proposed TSL. Whirlpool further commented that electromechanical
control dryers are not sophisticated enough to enable the other
technology options that DOE described in the August 2022 NOPR analysis
and therefore could not be used effectively with the appendix D2 test
procedure. Whirlpool stated that DOE's NOPR analysis missed several key
aspects where utility and performance could be lessened in order to
meet the proposed standard levels. Whirlpool noted that the average CEF
score of the five tested units in the vented electric standard product
class with electromechanical
[[Page 18182]]
controls in the August 2022 NOPR analysis is 2.64 lb/kWh, over 30-
percent lower than the proposed standard. AHAM stated that
electromechanical controls have consumer utility in that they are easy
to use and reduce the overall costs associated with the product, and
that requiring electronic controls would result in investment costs for
manufacturers and increased purchase prices for consumers. AHAM
requested that DOE retain electromechanical controls among a consumer's
purchase options as, according to AHAM, they are a desirable feature
for reliability, they provide reduced appliance cost among consumers,
and their elimination from the market would likely cause consumers to
postpone the purchase of new dryers, in turn increasing the total
national energy consumption. Whirlpool stated concern regarding a
forced regulatory phaseout of electromechanical controls because they
are incorporated in a popular and affordable segment of consumer
clothes dryers, and noted that although some electronic controls could
be ``hidden'' from the consumer, there could be some lost utility from
the easy and low-cost repairability of electromechanical control
dryers. (AHAM, No. 46 at pp. 5, 10; Whirlpool, No. 53 at pp. 3-4)
DOE is not aware of reliability issues associated with the
implementation of electronic controls relative to electromechanical
controls. However, DOE acknowledges that a transition from
electromechanical controls to electronic controls may require
manufacturer investment costs to redesign products and would likely
increase purchase price for consumers, as captured in the incremental
costs estimated and presented in this direct final rule analysis. Based
on its analysis for this direct final rule, DOE believes that component
costs associated with the implementation of electronic controls are
lower than those estimated in the August 2022 NOPR analysis, which is
reflected in the updated MPCs for the efficiency levels that entail a
shift to electronic controls. These costs are reflected in the MPCs,
which are the basis for the LCC and PBP analyses, in which consumer
impacts related to increased purchase price and repair and maintenance
costs are considered. Additionally, DOE reevaluated repair costs and
accordingly implemented higher repair costs associated with electronic
controls in this direct final rule analysis, consistent with
Whirlpool's comments. See section IV.F of this document and chapter 8
of the direct final rule TSD for additional details.
Regarding the concern that clothes dryers equipped with
electromechanical controls could not be tested under appendix D2, DOE
notes that its test sample shows that requiring the use of the appendix
D2 test procedure will not preclude the use of electromechanical
controls. As discussed in chapter 5 of the direct final rule TSD, DOE
tested baseline models with electromechanical controls under appendix
D2, where available. For the ventless electric compact (240V) product
class and the ventless electric combination washer-dryer product class,
there were no baseline models identified with electromechanical
controls; however, the same efficiency-level approach was taken to
establish the efficiency-level structures for these product classes.
The baseline efficiency levels in this direct final rule represent a
minimally compliant, basic-construction consumer clothes dryer on the
market, such as a dryer with electromechanical controls, and were set
according to the lowest tested values under appendix D2 in each product
class. As Whirlpool noted, the average CEF score of the five tested
units in the vented electric standard product class with
electromechanical controls was significantly lower than the proposed
standard, further indicating the efficiency savings associated with a
transition to a combination of electronic controls and higher design
options. Regarding the concern that the proposed amended standards
would require the implementation of electronic controls, DOE reiterates
that although it expects that electronic controls are most likely to be
used to achieve higher efficiency levels, and a review of ENERGY STAR-
qualified products suggests increased prevalent use of electronic
controls, manufacturers are not required to implement these specific
design options to meet amended standards. DOE therefore does not expect
the amended standards to preclude electromechanical controls should
manufacturers choose to implement them.
Regarding AHAM and Whirlpool's comments that the required
implementation of electronic controls to reach efficiency levels above
the existing standard may result in a loss of consumer utility
associated with the traditional user interface utilizing
electromechanical controls, DOE's testing and analysis of models
currently on the market confirms Whirlpool's statement that electronic
controls may be ``hidden'' from consumers who prefer a more traditional
user interface. This may be accomplished by implementing physical dials
for consumer use that in turn manipulate the electronic controls in
order to achieve the efficiency savings associated with electronic
controls while providing the user experience of electromechanical
controls. Therefore, even if electronic controls are utilized, DOE does
not expect a loss in consumer utility associated with the use of
electromechanical controls. DOE notes that AHAM recommended the
proposed efficiency levels in the Joint Agreement on behalf of its
members, including Whirlpool, in the Joint Agreement, which includes
efficiency levels that can be achieved with the implementation of
electronic controls.
Whirlpool stated that there may be greater visibility and scrutiny
of drying times associated with electronic control clothes dryers among
consumers, as electromechanical control dryers do not display drying
times. According to Whirlpool, consumers may believe they are losing
control of their dryers in a way that results in additional energy
consumption, and DOE should account for this possible behavioral shift
and lost energy savings. (Whirlpool, No. 53 at p. 7)
DOE is not aware of any data suggesting that the behavior of
consumers of with clothes dryers utilizing electronic controls results
in greater energy use than for consumers with clothes dryers utilizing
electromechanical controls and notes that electronic controls are
typically more efficient than electromechanical controls. As previously
noted, manufacturers currently provide electronic controls that provide
the experience of electromechanical controls through the use of dials
which would avoid any loss in consumer utility.
GEA stated that while the appendix D2 test procedure requires use
of the ``normal'' or ''medium'' dryness setting for the clothes dryer
test cycle, most labs, according to GEA, understand the ``optimum''
dryness setting to be the ``normal'' setting for appendix D2. GEA
stated that it provides further clarity to consumers and test labs in
the use and care manual for products with an ``optimum'' dryness
setting by specifying that optimum is the dryness setting to use for
most clothes when running the ``cottons'' cycle (the drying cycle
recommended for certain consumer clothes dryers manufactured by GEA for
drying cotton). Therefore, based on the cycle settings provided by the
additional test information DOE published on October 13, 2022, and
information provided by Guidehouse to GEA under a non-disclosure
agreement,
[[Page 18183]]
GEA stated that DOE incorrectly tested two models in its test sample
and urged DOE to either rerun its testing, exclude the models in
question from its analysis, or accept the data provided by GEA and
adjust its savings model. (GEA, No. 49 at pp. 2-3)
DOE notes that the baseline units GEA referenced are certified
under appendix D1, and although these units were not originally
intended to be tested under the appendix D2 test procedure, DOE tested
them using the appropriate cycle settings under the appendix D2 test
procedure to support the engineering analysis. These settings were
different than the ``optimum'' dryness setting specified in the use and
care manual for these particular units. Although GEA referred to
specific cycle settings for consumer use, DOE notes that this
instruction for cycle settings does not supersede the requirements of
the appendix D2 test procedure. Additionally, DOE notes that the test
cycle settings used were within the range anticipated and not expressly
warned against by the owner's manual or use and care manual. Therefore,
DOE maintains that the correct cycle settings were used to test the
units in question.
Whirlpool stated that DOE should have presented the cycle times
before and after wrinkle prevention mode was enabled for models in the
test sample that had wrinkle prevention mode on by default. Whirlpool
further stated that models reported in the data had extremely long
cycle times, between 88 and 319 minutes, but that such times were
distorted due to testing with wrinkle protection mode enabled.
Additionally, Whirlpool stated that testing of consumer clothes dryers
with wrinkle prevention mode enabled by default may have distorted some
of the tested settings and the resulting CEF scores because wrinkle
prevention results in additional cycle time of continuous tumbling
after the heating element has been turned off. Whirlpool stated that,
this results in an energy penalty as the additional cycle time
potentially allows for moisture absorption in the test load to the
point of failing to meet the required FMC of 2 percent, and therefore a
retest is required using the highest dryness level setting associated
with more energy consumption and thus a lower average measured CEF.
Whirlpool further stated that wrinkle prevention mode does not produce
an accurate comparison of average cycle times and CEF scores of these
dryers compared to other dryers that do not have wrinkle prevention
modes enabled by default, and DOE should have also recorded the CEF
scores, FMC, and drying times of these models before they were allowed
to enter wrinkle prevention mode. Whirlpool stated that this data
should have been used to inform comparisons between dryers and the
development of baseline efficiency levels. Whirlpool stated that if
these dryers were designed to the appendix D2 test procedure, wrinkle
prevention mode would likely not have been enabled by default.
(Whirlpool, No. 53 at pp. 9-10)
In the August 2013 TP Final Rule, DOE clarified that if a clothes
dryer is equipped with a wrinkle prevention mode that is activated by
default in the as-shipped position, the cycle shall be considered
complete after the end of the wrinkle prevention mode. 76 FR 49607,
49623-49624. Although wrinkle prevention mode may have been disabled
had the test units been designed for appendix D2 testing, DOE stated
previously that accurate testing of existing baseline units according
to the appendix D2 test procedure was essential for the analysis,
including the use of optional cycle settings that are enabled by
default and that do not affect the program, temperature, or dryness
settings. The test procedure in appendix D2 therefore requires that
testing include wrinkle prevention mode if it is enabled by default.
DOE maintains, as it was unable to predict or assume the cycle settings
Whirlpool would have selected had the test units been designed for
appendix D2 testing, that the test units in question were properly
tested in accordance with appendix D2 using the correct cycle settings
consistent with the DOE test procedure.
Chapter 5 of the direct final rule TSD discusses the incremental
efficiency levels for each of the product classes in this analysis. The
revised CEFD2 efficiency levels for each product class are
shown below in Table IV.5 through Table IV.10, along with the current
energy conservation standards in CEFD1 for comparison. As
discussed in section IV.C.1.a of this document, the baseline
CEFD2 values estimated for the preliminary analysis are
lower than the current CEFD1 values in the energy
conservation standards due to the differences in testing between
appendix D1 and appendix D2.
---------------------------------------------------------------------------
\44\ DOE is aware of consumer clothes dryers in the electric
standard product class that perform at higher efficiencies than the
proposed max-tech level, but those models are not representative of
the typical capacity in the electric standard product class.
Therefore, based on the certified performance of those models and
additional investigative testing, DOE determined a representative
max-tech efficiency for the electric standard product class that
reflects an appropriate, representative unit capacity. See chapter 5
of the final rule TSD for more information.
Table IV.5--Direct Final Rule Analysis: Electric Standard Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level (``EL'') Design option (lb/kWh) kWh) *
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electromechanical 3.73 2.20
Controls).
1.......................................... Baseline + Electronic Controls..... .............. 2.68
2.......................................... EL1 + Optimized Heating System..... .............. 3.04
3.......................................... EL2 + More Advanced Automatic .............. 3.27
Termination Control System.
4.......................................... EL3 + Modulating (2-Stage) Heat.... .............. 3.93
5.......................................... EL4 + Inlet Air Preheat............ .............. 4.21
6.......................................... Hybrid Heat Pump Dryer (Additional .............. 5.20
Resistance Heater).
7.......................................... Heat Pump Dryer (Max-Tech)......... .............. \44\ 7.39
----------------------------------------------------------------------------------------------------------------
* As discussed above, the baseline CEFD2 values represent differences in test procedure between appendix D1 and
appendix D2 and do not constitute backsliding.
[[Page 18184]]
Table IV.6--Direct Final Rule Analysis: Electric Compact (120V)--Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electromechanical 3.61 2.36
Controls).
1.......................................... Baseline + Electronic Controls..... .............. 3.15
2.......................................... EL1 + Optimized Heating System..... .............. 3.35
3.......................................... EL2 + More Advanced Automatic .............. 4.28
Termination Control System.
4.......................................... EL3 + Modulating (2-Stage) Heat.... .............. 4.33
5.......................................... EL4 + Inlet Air Preheat............ .............. 4.63
6.......................................... Heat Pump Dryer (Max-Tech)......... .............. 6.37
----------------------------------------------------------------------------------------------------------------
Table IV.7--Direct Final Rule Analysis: Vented Electric Compact (240V) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electromechanical 3.27 2.00
Controls).
1.......................................... Baseline + Electronic Controls..... .............. 2.44
2.......................................... EL1 + Optimized Heating System..... .............. 2.76
3.......................................... EL2 + More Advanced Automatic .............. 3.30
Termination Control System.
4.......................................... EL3 + Modulating (2-Stage) Heat.... .............. 3.57
5.......................................... EL4 + Inlet Air Preheat............ .............. 3.82
6.......................................... Heat Pump Dryer (Max-Tech)......... .............. 3.91
----------------------------------------------------------------------------------------------------------------
Table IV.8--Direct Final Rule Analysis: Vented Gas Standard Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level Design option (lb/kWh) \45\ kWh)
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electromechanical 3.30 2.00
Controls).
1.......................................... Baseline + Electronic Controls..... .............. 2.44
2.......................................... EL1 + Optimized Heating System and .............. 3.00
More Advanced Automatic
Termination Control System.
3.......................................... EL2 + Modulating (2-Stage) Heat.... .............. 3.48
4.......................................... EL3 + Inlet Air Preheat (Max-Tech). .............. 3.83
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\45\ The current standard does not distinguish a separate
product class for compact-size gas consumer clothes dryers. As such,
the current standard may apply to all gas consumer clothes dryers.
Table IV.9--Direct Final Rule Analysis: Ventless Electric Compact (240V) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electronic Controls)..... 2.55 2.03
1.......................................... Baseline + More Advanced Automatic .............. 2.68
Termination Control System.
2.......................................... Heat Pump Dryer (Max-Tech)......... .............. 6.80
----------------------------------------------------------------------------------------------------------------
Table IV.10--Direct Final Rule Analysis: Ventless Electric Combination Washer-Dryer Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 DFR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline................................... Baseline (Electronic Controls)..... 2.08 2.27
1.......................................... Baseline + High-Speed Spin......... .............. 2.33
2.......................................... Heat Pump Dryer (Max-Tech)......... .............. 4.01
----------------------------------------------------------------------------------------------------------------
[[Page 18185]]
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, and the availability and timeliness of purchasing the product
on the market. The cost approaches are summarized as follows:
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.
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.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g., large commercial boilers), DOE conducts price
surveys using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the present case, DOE conducted the analysis using physical
product teardowns to determine the baseline MPC for each product class
as outlined in chapter 5 of the direct final rule TSD. DOE developed
the cost-efficiency relationships for each product class as discussed
in section IV.C.3 of this document. DOE developed incremental MPCs
based on product teardowns and manufacturing cost modeling of the
expected design changes at each efficiency level. DOE observed that the
basic product designs of vented electric and vented gas clothes dryers
are similar except for the heating system. DOE also observed that the
technology designs of standard-size and compact-size consumer clothes
dryers are similar as well, simply scaled in size. As a result, in the
absence of models available on the market at certain efficiency levels
for certain product classes, DOE estimated the incremental MPC for
these based on the same design changes observed for the electric
standard product class. DOE updated the cost-efficiency analysis from
the preliminary analysis by updating the costs of raw materials and
purchased components, as well as updating costs for manufacturing
equipment, labor, and depreciation. DOE also used information from the
teardown of units in the updated test sample to inform updates to the
cost-efficiency analysis. Not all units in the updated test sample were
torn down; DOE focused on units recently introduced in the market,
units with unique configuration, and units with technologies that were
not available at the time of the preliminary analysis to better inform
the costs associated with particular product classes and design
options.
The resulting bill of materials provides the basis for the MPC
estimates in this direct final rule. The baseline MPCs for each
consumer clothes dryer product class are listed in Table IV.11, with
all costs presented in 2022 dollars.
Table IV.11--Direct Final Rule Analysis: Consumer Clothes Dryer Baseline
Manufacturer Production Costs
------------------------------------------------------------------------
Baseline MPC
Product class (2022$)
------------------------------------------------------------------------
(i) Electric, Standard (4.4 cubic feet (ft3) or greater 268.90
capacity)..............................................
(ii) Electric, Compact (120 volts (V)) (less than 4.4 284.06
ft3 capacity)..........................................
(iii) Vented Electric, Compact (240V) (less than 4.4 ft3 284.91
capacity)..............................................
(iv) Vented Gas, Standard (4.4 cubic ft3 or greater 303.39
capacity)..............................................
(v) Vented Gas, Compact (less than 4.4 ft3 capacity).... 329.94
(vi) Ventless Electric, Compact (240V) (less than 4.4 453.09
ft3 capacity)..........................................
(vii) Ventless Electric, Combination Washer-Dryer....... 611.19
------------------------------------------------------------------------
To account for manufacturers' non-production costs and 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 consumer clothes dryers.\46\ See
section IV.J.2.d of this document and chapter 12 of the direct final
rule TSD for additional information on the manufacturer markup.
---------------------------------------------------------------------------
\46\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (``EDGAR'') system. Available at
www.sec.gov/edgar/search/ (last accessed April 21, 2023).
---------------------------------------------------------------------------
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
product classes that were analyzed, as well as those extrapolated from
a product class with similar features. DOE developed estimates of MPCs
for each unit in the teardown sample to develop a comprehensive set of
incremental MPCs (i.e., the additional costs manufacturers would likely
incur by producing consumer clothes dryers at each efficiency level
compared to the baseline).
The resulting incremental MPCs from this analysis are provided in
Table IV.12 through Table IV.17. See chapter 5 of the direct final rule
TSD for additional detail on the engineering analysis.
[[Page 18186]]
Table IV.12--Direct Final Rule Analysis: Electric Standard Incremental
Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic 5.60
Controls.
2.............................. EL1 + Optimized Heating 8.60
System.
3.............................. EL2 + More Advanced 9.15
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 15.19
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 60.11
6.............................. Hybrid Heat Pump Dryer 231.01
(Additional Resistive
Heater).
7.............................. Heat Pump Dryer (Max- 240.85
Tech).
------------------------------------------------------------------------
Table IV.13--Direct Final Rule Analysis: Electric Compact (120V)
Incremental Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic 7.00
Controls.
2.............................. EL1 + Optimized Heating 11.81
System.
3.............................. EL2 + More Advanced 12.63
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 19.43
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 70.28
6.............................. Heat Pump Dryer (Max- 225.41
Tech).
------------------------------------------------------------------------
Table IV.14--Direct Final Rule Analysis: Vented Electric Compact (240V)
Incremental Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic 7.63
Controls.
2.............................. EL1 + Optimized Heating 12.43
System.
3.............................. EL2 + More Advanced 13.26
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 20.06
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 70.90
6.............................. Heat Pump Dryer (Max- 226.03
Tech).
------------------------------------------------------------------------
Table IV.15--Direct Final Rule Analysis: Vented Gas Standard Incremental
Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic 9.64
Controls.
2.............................. EL1 + Optimized Heating 11.55
System and More
Advanced Automatic
Termination Control
System.
3.............................. EL2 + Modulating (2- 21.59
Stage) Heat.
4.............................. EL3 + Inlet Air Preheat 66.52
(Max-Tech).
------------------------------------------------------------------------
Table IV.16--Direct Final Rule Analysis: Ventless Electric Compact
(240V) Incremental Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic ..............
Controls).
1.............................. Baseline + More 2.35
Advanced Automatic
Termination Control
System.
2.............................. Heat Pump Dryer (Max- 196.51
Tech).
------------------------------------------------------------------------
[[Page 18187]]
Table IV.17--Direct Final Rule Analysis: Ventless Electric Combination
Washer-Dryer Incremental Manufacturer Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2022$)
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic ..............
Controls).
1.............................. Baseline + High-Speed * 0.00
Spin.
2.............................. Heat Pump Dryer (Max- 420.04
Tech).
------------------------------------------------------------------------
* Most ventless electric combination washer-dryers are already equipped
with a spin-only mode option as a standard feature resulting in an
incremental MPC of $0.00 for this design option.
D. Markups Analysis
The markups analysis develops appropriate markups (e.g.,
manufacturer markups, 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 consumer
clothes dryers move from manufacturers to consumers. The majority of
consumer clothes dryer 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 90 percent
of the consumer clothes dryer market. The rest of the market goes
through a separate new construction 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 contractors.
DOE developed baseline and incremental markups for each actor in
the distribution channels. 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.\47\
---------------------------------------------------------------------------
\47\ 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; \48\ the 2017 Annual
Wholesale Trade Survey for ``household appliances, and electrical and
electronic goods merchant wholesalers'' to estimate wholesaler markups;
\49\ and the 2017 Economic Census for the residential construction
sector to derive general contractor markups.\50\
---------------------------------------------------------------------------
\48\ U.S. Census Bureau, Annual Retail Trade Survey. 2017.
Available at www.census.gov/programs-surveys/arts.html (last
accessed Feb. 1, 2022).
\49\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017.
Available at www.census.gov/wholesale/index.html (last accessed Feb.
1, 2022).
\50\ U.S. Census Bureau. 2017 Economic Census: Construction
Industry Series: Detailed Statistics for Establishments: 2017. New
Single-Family General Contractors, New Multifamily Housing
Construction (Except Operative Builders), New Housing Operative
Builders, and Residential Remodelers. Sector 23: 236115 through
236118. 2017. U.S. Census.
---------------------------------------------------------------------------
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for consumer clothes dryers.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of consumer clothes dryers at different efficiencies
in representative U.S. single-family homes, multifamily residences, and
mobile homes and to assess the energy savings potential of increased
consumer clothes dryer efficiency. The energy use analysis estimates
the range of energy use of consumer clothes dryers in the field (i.e.,
as they are actually used by consumers). The energy use analysis
provides the basis for other analyses DOE performed, particularly
assessments of the energy savings and the savings in consumer operating
costs that could result from adoption of amended or new standards.
In conducting the energy use analysis for this direct final rule,
DOE considered comments it had received in response to the proposed
analysis in the August 2022 NOPR. DOE received a comment from AHAM
regarding the number of annual use cycles in the August 2022 NOPR
energy use analysis. AHAM requested that DOE review the 2020
Residential Energy Consumption Survey (``2020 RECS'') data \51\ and
adjust the annual number of cycles accordingly. AHAM stated that it
previously commented that RECS 2015 suggested an annual number of
cycles of 236 as opposed to the 283 cycles in the current test
procedure, which is consistent with the observation that clothes washer
cycles have decreased in number to 234 cycles per year using the 2015
RECS. According to AHAM, it does not make sense for clothes washer
cycles to decrease and clothes dryer cycles to increase or even stay
the same. AHAM suggested that based on the 2020 RECS, the annual number
of cycles should be 209. (AHAM, No. 46 at p. 12)
---------------------------------------------------------------------------
\51\ The Residential Energy Consumption Survey 2020 data is
available at www.eia.gov/consumption/residential/data/2020/.
---------------------------------------------------------------------------
In the August 2022 NOPR analysis, DOE used data from the EIA's 2015
Residential Energy Consumption Survey (``2015 RECS'') to establish a
reasonable range of energy consumption in the field for consumer
clothes dryers. DOE noted that the microdata for the 2020 RECS was not
available at the time the NOPR analysis was conducted but stated that
it would update the underlying data to 2020 RECS if it was available
prior to the final rule. 87 FR 51762. DOE is aware that the 2020 RECS
has been published.\52\ This survey collected data from 18,496 housing
units and was designed by EIA to represent the household population in
the United States. Therefore, DOE has integrated this data into its
analysis for the direct final rule concerning households using clothes
dryers.
---------------------------------------------------------------------------
\52\ U.S. Department of Energy--Energy Information
Administration, Residential Energy Consumption Survey: 2020 Public
Use Data Files. Available at www.eia.gov/consumption/residential/data/2020/index.php?view=microdata (last accessed April 21, 2023).
---------------------------------------------------------------------------
DOE divided the sample of households into four subsamples for the
product classes being analyzed:
[[Page 18188]]
standard or compact consumer clothes dryers using electricity or
natural gas as the dryer fuel. For compact consumer clothes dryers, DOE
developed a subsample consisting of households with an electric or gas
clothes dryer in multifamily buildings, manufactured homes, and single-
family homes with less than 1,000 square feet and no garage or
basement, since these products are most likely to be found in these
housing types.
The energy use analysis requires DOE to establish a range of total
annual usage (number of cycles) in order to estimate annual energy
consumption by a clothes dryer. DOE estimated the number of clothes
dryer cycles per year for each sample household using data from the
2020 RECS on the number of laundry loads washed (clothes washer cycles)
per week and the frequency of clothes dryer use. The average annual
energy consumption was then calculated, reflecting an average annual
sample-weighted usage of 213 cycles per year.
For each considered efficiency level, DOE derived the field energy
use by separately estimating the active mode and standby mode energy
use and then adding them together. The per-cycle active mode energy
consumption was estimated using the DOE clothes dryer test procedure at
appendix D2. It was then back calculated from the test procedure
results by dividing the weight (lb) of clothes dried per-cycle (i.e.,
8.45 lb for standard and 3 lb for compact consumer clothes dryers) by
the CEFD2 (lb/kWh) and subtracting standby power. DOE
adjusted the test procedure energy use to reflect field conditions by
making an adjustment for clothes dryer load weight and moisture removal
factor. Chapter 7 of the direct final rule TSD provides more detail
about these calculations.
DOE also considered the impact of clothes dryer operation on home
heating and cooling loads, given that a clothes dryer releases heat to
the surrounding environment. If the clothes dryer is located indoors,
its use will tend to slightly reduce the heating load during the
heating season and slightly increase the cooling load during the
cooling season. To calculate this impact, DOE first estimated whether
the clothes dryer in a RECS sample home is located in conditioned space
(referred to as ``indoors'') or in unconditioned space (e.g., garages,
unconditioned basements, outdoor utility closets, or attics). Based on
the 2020 RECS and the 2019 American Housing Survey (``AHS''),\53\ DOE
assumed that 50 percent of vented standard electric and gas consumer
clothes dryers are located indoors, while 100 percent of compact and
ventless consumer clothes dryers are located indoors. For these
installations, DOE used the results from a European Union study about
the impacts of consumer clothes dryers on home heating and cooling
loads to determine the appropriate factor to apply to the total clothes
dryer energy use.\54\ This study reported that for vented consumer
clothes dryers, there is a factor of negative 3 to 9 percent (average 3
percent), and for ventless consumer clothes dryers there is a factor of
positive 7 to 15 percent (average 11 percent).\55\ This effect is
likely to be approximately the same for all of the considered
efficiency levels because the amount of air passing through the clothes
dryer does not vary.
---------------------------------------------------------------------------
\53\ U.S. Census Bureau: Housing and Household Economic
Statistics Division, American Housing Survey National Data. 2019,
HUD. Available at www.census.gov/programs-surveys/ahs/data/2019/ahs-
2019-public-use-file_puf-.html (last accessed April 6, 2023).
\54\ R[uuml]denauer, I. and C.-O. Gensch, Energy demand of
tumble driers with respect to differences in technology and ambient
conditions, January 13, 2004. European Committee of Domestic
Equipment Manufacturers (CECED).
\55\ For units that are located in conditioned space, a negative
factor for vented consumer clothes dryers translates to a penalty in
energy use, whereas a positive factor for ventless consumer clothes
dryers translates to a credit in energy use. For details of the
calculations, see the R[uuml]denauer and Gensch study referenced
above.
---------------------------------------------------------------------------
Chapter 7 of the direct final rule TSD provides details on DOE's
energy use analysis for consumer clothes dryers.
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
consumer clothes dryers. 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:
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
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.
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 consumer clothes dryers 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 2020 RECS. For each sample household, DOE determined the
energy consumption for the consumer clothes dryers and the appropriate
energy price. By developing a representative sample of households, the
analysis captured the variability in energy consumption and energy
prices associated with the use of consumer clothes dryers.
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
consumption, energy 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 consumer clothes dryer user samples.
For this rulemaking, the Monte Carlo approach is implemented in MS
Excel together with the Crystal Ball\TM\ add-on.\56\ The model
calculated the LCC for products
[[Page 18189]]
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. DOE calculated
the LCC and PBP for consumers of consumer clothes dryers as if each
were to purchase a new product in the first year of required compliance
with new or amended standards. New and amended standards apply to
consumer clothes dryers manufactured 3 years after the date on which
any new or amended standard is published. (42 U.S.C. 6295(m)(4)(A)(i))
Therefore, DOE used 2027 as the first year of compliance with any
amended standards for consumer clothes dryers for all the TSLs other
than TSL 3. For TSL 3, DOE used 2028 as the first year of compliance
for all product classes as specified for the Recommended TSL in the
Joint Agreement.
---------------------------------------------------------------------------
\56\ 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 www.oracle.com/technetwork/middleware/crystalball/overview/index.html (last accessed May 17, 2023).
---------------------------------------------------------------------------
Table IV.18 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.
Table IV.18--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Costs..................... Derived by multiplying MPCs by
manufacturer and retailer markups
and sales tax or by manufacturer,
wholesaler, and general contractor
markups and sales tax, as
appropriate. Used historical data
to derive a price scaling index to
project product costs.
Installation Costs................ Baseline installation cost
determined with data from RSMeans
Residential Cost Data 2022. Assumed
no change with efficiency level.
Annual Energy Use................. Total per-cycle energy use
multiplied by the cycles per year.
Average number of cycles based on
field data.
Variability: Based on the 2020 RECS
(dryer usage), market data on
remaining moisture content (RMC),
and load weights.
Energy Prices..................... Electricity: Based on EIA's Form 861
data for 2022.
Variability: Regional energy prices
by Census Division.
Energy Price Trends............... Based on AEO2023 energy price
projections.
Repair and Maintenance Costs...... Repair costs vary between
electromechanical and electronic
control timers.
Product Lifetime.................. Average: 14 years.
Discount Rates.................... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the
considered appliances or that might
be affected indirectly. Primary
data source was the Federal Reserve
Board's Survey of Consumer
Finances.
Compliance Date................... TSL 1, TSL 2, TSL 4, TSL 5, and TSL
6: 2027.
TSL 3 (The Recommended TSL): 2028.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
mentioned in this table are provided in the following sections or in
chapter 8 of the direct final rule TSD.
For this direct final rule, DOE considered comments it had received
regarding the methodology for evaluating consumer economic impact that
were submitted in response to the August 2022 NOPR. The approach used
for this direct final rule is largely the same approach DOE had used
for the August 2022 NOPR analysis.
In response to the August 2022 NOPR AHAM recommended that DOE
modify the way consumer economic impact is analyzed and look at the
probability that individual consumers will benefit from standards
rather than whether the aggregate benefit is positive. (AHAM, No. 46 at
p. 13)
In the LCC analysis, DOE notes that it does estimate the impact of
potential standards on individual consumers in the household sample and
considers the share of consumers that would benefit from a standard as
part of its evaluation regarding whether particular standards are
economically justified.
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. 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 consumer clothes
dryers, DOE obtained historical Producer Price Index (``PPI'') data
from the Bureau of Labor Statistics (``BLS'') for ``household laundry
equipment'' between 1947 and 2016 and ``major household appliance:
primary products'' between 2016 and 2022 to form a time series price
index representing household laundry equipment from 1947 to 2022.\57\
Inflation-adjusted price indices were calculated by dividing the PPI
series by the gross domestic product index from the Bureau of Economic
Analysis for the same years. Using this data from 1947 to 2022, the
estimated learning rate (defined as the fractional reduction in price
from each doubling of cumulative production) is 17.2 percent.
---------------------------------------------------------------------------
\57\ ``Household laundry equipment'' PPI (PCU3352203352204) is
available through May 2016, and ``major household appliance: primary
products'' PPI (PCU335220335220P) is available from May 2016 to
present. See more information at www.bls.gov/ppi/ (last accessed
Nov. 29, 2021).
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
regarding the methodology for calculating consumer product costs that
were submitted in response to the August 2022 NOPR. The approach used
[[Page 18190]]
for this direct final rule is largely the same approach DOE had used
for the August 2022 NOPR analysis.
In response to the August 2022 NOPR, AHAM stated that DOE's pricing
estimates are incorrect because currently, publicly available retail
market prices for the lowest-priced units (many of which are equipped
with electromechanical controls) are approximately $400, and DOE's
estimate for a baseline standard electric unit is $607. (AHAM, No. 46
at pp. 5-6, 8)
Whirlpool stated that DOE does not consider retail prices for
models actually being sold in the market today that meet varying
efficiency levels and actually utilize technology options needed to
meet TSL 3. Whirlpool commented that retail price differences between
$200 and $300 may be a better reflection of the expected price premiums
for consumers from amended standards than DOE's analysis and
methodology. (Whirlpool, No. 53 at p. 7)
In response, DOE notes that the actual retail price differences
between a baseline and higher efficiency level currently on the market
may include the price for other premium features in addition to
engineering designs relating to efficiency. Additionally, retail prices
reflect economies of scale in production as well as marketing
strategies and profit margins of manufacturers and retailers. DOE
maintains that its traditional approach, which has been subject to peer
review, is better able to identify the incremental costs that are only
connected to higher efficiency. Furthermore, in this direct final rule
analysis, DOE leveraged web scraping to gather data on clothes dryer
models available on the market from January to March 2023. The data was
collected from major retail outlets, including Best Buy, Lowe's, and AJ
Madison. DOE found that the lowest-priced baseline model cost $630. DOE
therefore concluded that its baseline estimate for a standard electric
unit is reasonable for this direct final rule.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE used data from
RSMeans Residential Cost Data to estimate the baseline installation
cost for consumer clothes dryers.\58\ DOE estimated that for the new
construction market, it takes, on average, 1 hour to install a clothes
dryer, while for the replacement or new-owner market, it takes 2.5
hours (i.e., 1 hour for the trip charge, 30 minutes to remove the old
clothes dryer, and 1 hour to install). DOE found no evidence that
increased efficiency levels would impact installation costs.
---------------------------------------------------------------------------
\58\ RSMeans Online Residential Data (2022 Release). Gordian:
Greenville, SC. Available at www.rsmeansonline.com (last accessed
April 6, 2023).
---------------------------------------------------------------------------
3. Annual Energy Consumption
For each sampled household, DOE determined the energy consumption
for a consumer clothes dryer at different efficiency levels using the
approach described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity and gas prices more accurately capture
the incremental savings associated with a change in energy use from
higher efficiency, they provide a better representation of incremental
change in consumer costs than average electricity and gas prices.
Therefore, DOE applied average electricity and gas prices for the
energy use of the product purchased in the no-new-standards case, and
marginal electricity and gas 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).\59\
---------------------------------------------------------------------------
\59\ Coughlin, K. and B. Beraki. 2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Laboratory. Berkeley, CA. Report No. LBNL-2001169.
Available at ees.lbl.gov/publications/residential-electricity-prices-review (last accessed April 6, 2023).
---------------------------------------------------------------------------
DOE obtained data for calculating regional prices of natural gas
from the EIA publication Natural Gas.\60\ This publication presents
monthly volumes of natural gas deliveries and average prices by state
for residential, commercial, and industrial customers.
---------------------------------------------------------------------------
\60\ U.S. Department of Energy--Energy Information
Administration. Natural Gas Navigator 2022. Available at
www.eia.gov/naturalgas/data.php (last accessed April 6, 2023).
---------------------------------------------------------------------------
DOE's methodology allows electricity and gas prices to vary by
sector, region, and season. In the analysis, variability in electricity
and gas prices is chosen to be consistent with the way the consumer
economic and energy use characteristics are defined in the LCC
analysis. For consumer clothes dryers, DOE calculated weighted average
values for average and marginal electricity and gas price for the 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.\61\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------
\61\ U.S. Department of Energy--Energy Information
Administration. Annual Energy Outlook 2023 with Projections to 2050.
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last
accessed May 7, 2023).
---------------------------------------------------------------------------
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. Past rules
indicate in general that small, incremental increases in product
efficiency produce no, or only minor, changes in repair and maintenance
costs compared to baseline efficiency products. 76 FR 22454.
For consumer clothes dryers, DOE derived an annualized repair rate
based on Consumer Reports data on repair and maintenance issues for
consumer clothes dryers. DOE estimated that the average repair rate
(which measures the repair frequency) for electric and gas consumer
clothes dryers is 12 percent and 14 percent, respectively. The most
likely repairs concern the electromechanical control unit or the
electronic control unit. The repair costs are annualized by dividing by
the average equipment lifetime of 14 years.
For this direct final rule, DOE considered comments it had received
regarding the maintenance and repair costs that were submitted in
response to the August 2022 NOPR. Whirlpool stated that DOE's NOPR
analysis failed to adequately account for the increased repair costs
associated with more advanced and expensive electronic parts in
electronic control dryers, which would be mandated through DOE's
proposed standards. Whirlpool commented that a timer replacement on an
electromechanical control dryer will be significantly cheaper than the
replacement of an equivalent failed component on an electronic control
dryer, with major component differences being the timer, push-to-start
button, rotary switch, buzzer, appliance control unit, and user
interface assembly. (Whirlpool, No. 53 at pp. 8-9)
[[Page 18191]]
As previously stated, for this direct final rule, DOE has updated
its methodology for estimating repair costs and included repair costs
associated with timer replacement in both electromechanical control and
electronic control dryers. Based on the information provided by
Whirlpool and a literature review, DOE estimated the repair cost to be
$75 for an electromechanical control unit and $225 for an electronic
control unit.
6. Product Lifetime
For consumer clothes dryers, DOE developed a distribution of
lifetimes from which specific values were assigned to the appliances in
the test sample. DOE analyzed 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 a number of
RECS on the age of the appliances in the homes. The data allowed DOE to
estimate a survival function, which provided an average appliance
lifetime of approximately 14 years. From the 2015 RECS to the 2020
RECS, there was a 6-percent increase in the number of consumer clothes
dryers retiring before reaching 4 years of age, and an additional 1
percent lasting beyond 15 years. Therefore, for this direct final rule,
DOE's estimated average lifetime for consumer clothes dryers remains 14
years, with a distribution that includes 1 percent more dryers retiring
before reaching 4 years and 2 percent more dryers remaining after 15
years and up to 30 years, compared to the NOPR Weibull lifetime
probability distribution. See chapter 8 of the direct final rule TSD
for further details.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating cost
savings. DOE estimated a distribution of discount rates for consumer
clothes dryers based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\62\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long-time horizon modeled in the LCC, the
application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\62\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend. The implicit discount rate is
not appropriate for the LCC analysis because it reflects a range of
factors that influence consumer purchase decisions, rather than the
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------
To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's triennial Survey of Consumer Finances
\63\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and
other sources, DOE developed a distribution of rates for each type of
debt and asset by income group to represent the rates that may apply in
the year in which amended standards would take effect. DOE assigned
each sample household a specific discount rate drawn from one of the
distributions. The average rate across all types of household debt and
equity and income groups, weighted by the shares of each type, is 4.3
percent. See chapter 8 of the direct final rule TSD for further details
on the development of consumer discount rates.
---------------------------------------------------------------------------
\63\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed May 2023).
---------------------------------------------------------------------------
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy
conservation standards).
To estimate the energy efficiency distribution of consumer clothes
dryers for 2027 or 2028, DOE used 2021 model data from DOE's CCD and
shipments data for consumer clothes dryers from the ENERGY STAR
program.64 65 Based on the historical shipments trend of
ENERGY STAR-qualified consumer clothes dryers, DOE estimated an annual
0.47-percent and 0.02-percent increase in shipment-weighted efficiency
for electric standard and vented gas standard clothes dryers,
respectively, beginning in 2021. Annual shipment-weighted efficiency
for the other product classes (which in total have less than 2.5-
percent market share) is held constant. The estimated market shares for
the no-new-standards case for consumer clothes dryers are shown in
Table IV.19 and Table IV.20. See chapter 8 of the direct final rule TSD
for further information on the derivation of the efficiency
distributions.
---------------------------------------------------------------------------
\64\ U.S. Department of Energy's Compliance Certification
Database. Available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed April 17, 2023).
\65\ ENERGY STAR, ENERGY STAR[supreg] Unit Shipment and Market
Penetration Report Calendar Year 2021 Summary. Available at
www.energystar.gov/partner_resources/products_partner_resources/brand_owner_resources/unit_shipment_data (last accessed April 17,
2023).
Table IV.19--No-New-Standards Case Efficiency Distribution in 2027 and 2028: Electric Standard, Electric Compact (120V), Electric Compact (240V), and
Ventless Electric Compact (240V)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric standard Electric compact (120V) Vented electric compact Ventless electric compact
----------------------------------------------------------------------------------------- (240V) (240V)
---------------------------------------------------------------
CEFD2 (lb/kWh) Market share CEFD2 (lb/ Market share CEFD2 (lb/ Market share CEFD2 (lb/ Market share
(%) kWh) (%) kWh) (%) kWh) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.20.................................... 14 2.36 20 2.00 35 2.03 14
[[Page 18192]]
2.68.................................... 13 3.15 15 2.44 25 2.68 59
3.04.................................... 13 3.35 25 2.76 30 6.80 28
3.27.................................... 9 4.28 0 3.30 10
3.93.................................... 42 4.33 0 3.57 0
4.21.................................... * 6 (7) 4.63 0 3.82 0
5.20.................................... 2 6.37 40 3.91 0
7.39.................................... 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The value in the parentheses indicates 2028 market share.
Table IV.20 No-New-Standards Case Efficiency Distribution in 2027 and 2028: Vented Gas Standard, and Ventless
Electric Combination Washer-Dryer *
----------------------------------------------------------------------------------------------------------------
Vented gas standard Ventless electric, combination
--------------------------------------------------------------------------------- washer-dryer
-------------------------------
CEFD2 (lb/kWh) Market share CEFD2 (lb/ Market share
(%) kWh) (%)
----------------------------------------------------------------------------------------------------------------
2.00............................................................ 15 2.27 39
2.44............................................................ 19 2.33 58
3.00............................................................ 18 4.01 3
3.48............................................................ 48
3.83............................................................ 0
----------------------------------------------------------------------------------------------------------------
* There are no models or shipments data for vented gas compact clothes dryers on the market.
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the consumer clothes
dryers purchased by each sample household in the no-new-standards case.
The resulting percentage shares within the sample match the market
shares in the efficiency distributions.
In the August 2022 NOPR, DOE performed a random assignment of
efficiency levels to consumers in its Monte Carlo sample. While DOE
acknowledges that economic factors may play a role when consumers
decide on what type of clothes dryers to install, assignment of clothes
dryer efficiency for a given installation, based solely on economic
measures such as life-cycle cost or simple payback period, most likely
would not fully and accurately reflect actual real-world installations.
There are a number of market failures discussed in the economics
literature that illustrate how purchasing decisions with respect to
energy efficiency are unlikely to be perfectly correlated with energy
use, as described below. DOE maintains that the method of assignment,
is a reasonable approach, because it simulates behavior in the clothes
dryer market, where market failures result in purchasing decisions not
being perfectly aligned with economic interests, more realistically
than relying only on apparent cost-effectiveness criteria derived from
the limited information in RECS. DOE further emphasizes that its
approach does not assume that all purchasers of consumer clothes dryers
make economically irrational decisions (i.e., the lack of a correlation
is not the same as a negative correlation). As part of the random
assignment, some homes with more frequent dryer events will be assigned
higher efficiency clothes dryers, and some homes with particularly
lower dryer events will be assigned baseline units. By using this
approach, DOE acknowledges the uncertainty inherent in the data and
minimizes any bias in the analysis by using random assignment, as
opposed to assuming certain market conditions that are unsupported
given the available evidence.
The following discussion provides more detail about the various
market failures that affect consumer clothes dryer purchases. First,
consumers are motivated by more than simple financial trade-offs. There
are several behavioral factors that can influence the purchasing
decisions of complicated multi-attribute products, such as consumer
clothes dryers. For example, consumers (or decision makers in an
organization) are highly influenced by choice architecture, defined as
the framing of the decision, the surrounding circumstances of the
purchase, the alternatives available, and how they are presented for
any given choice scenario.\66\ The same consumer or decision maker may
make different choices depending on the characteristics of the decision
context (e.g., the timing of the purchase, competing demands for
funds), which have nothing to do with the characteristics of the
alternatives themselves or their prices. Consumers or decision makers
also face a variety of other behavioral phenomena including loss
aversion, sensitivity to information salience, and other forms of
bounded rationality.\67\ Thaler, who won the Nobel Prize in Economics
in 2017 for his contributions to behavioral economics, and Sunstein
point out that these behavioral factors are strongest when the
decisions are complex and infrequent, when feedback on the decision is
muted and slow, and when
[[Page 18193]]
there is a high degree of information asymmetry.\68\ These
characteristics describe almost all purchasing situations of appliances
and equipment, including consumer clothes dryers. The installation of a
new or replacement consumer clothes dryers is done very infrequently,
as evidenced by the mean lifetime of 14 years for consumer clothes
dryers. Further, if the purchaser of the consumer clothes dryer is not
the entity paying the energy costs (e.g., a building owner and tenant),
there may be little to no feedback on the purchase. Additionally, there
are systematic market failures that are likely to contribute further
complexity to how products are chosen by consumers, as explained in the
following paragraphs. The first of these market failures--the split-
incentive or principal-agent problem--is likely to significantly affect
consumer clothes dryers. The principal-agent problem is a market
failure that results when the consumer that purchases the equipment
does not internalize all of the costs associated with operating the
equipment. Instead, the user of the product, who has no control over
the purchase decision, pays the operating costs. There is a high
likelihood of split-incentive problems in the case of rental properties
where the landlord makes the choice of what consumer clothes dryers to
install, whereas the renter is responsible for paying energy bills.
---------------------------------------------------------------------------
\66\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014).
``Choice Architecture'' in The Behavioral Foundations of Public
Policy, Eldar Shafir (ed).
\67\ Thaler, R.H., and Bernartzi, S. (2004). ``Save More
Tomorrow: Using Behavioral Economics in Increase Employee Savings,''
Journal of Political Economy 112(1), S164-S187. See also Klemick,
H., et al. (2015) ``Heavy-Duty Trucking and the Energy Efficiency
Paradox: Evidence from Focus Groups and Interviews,'' Transportation
Research Part A: Policy & Practice, 77, 154-166 (providing evidence
that loss aversion and other market failures can affect otherwise
profit-maximizing firms).
\68\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale
University Press.
---------------------------------------------------------------------------
In addition to the split-incentive problem, there are other market
failures that are likely to affect the choice of consumer clothes dryer
efficiency made by consumers. For example, unplanned replacements due
to unexpected failure of equipment such as a consumer clothes dryer are
strongly biased toward like-for-like replacement (i.e., replacing the
non-functioning equipment with a similar or identical product). Time is
a constraining factor during unplanned replacements, and consumers may
not consider the full range of available options on the market, despite
their availability. The consideration of alternative product options is
far more likely for planned replacements and installations in new
construction.
Additionally, Davis and Metcalf \69\ conducted an experiment
demonstrating that, even when consumers are presented with energy
consumption information, the nature of the information available to
consumers (e.g., from EnergyGuide labels) results in an inefficient
allocation of energy efficiency across households with different usage
levels. Their findings indicate that households are likely to make
decisions regarding the efficiency of the air conditioning equipment of
their homes that do not result in the highest net present value for
their specific usage pattern (i.e., their decision is based on
imperfect information and, therefore, is not necessarily optimal).
Also, most consumers did not properly understand the labels
(specifically whether energy consumption and cost estimates were
national averages or specific to their State). As such, consumers did
not make the most informed decisions. Consumer clothes dryers do not
require EnergyGuide labels, therefore energy consumption information is
more difficult to determine for a consumer, resulting in an even more
inefficient allocation of energy efficiency across households with
different usage levels.
---------------------------------------------------------------------------
\69\ Davis, L.W., and G.E. Metcalf (2016): ``Does better
information lead to better choices? Evidence from energy-efficiency
labels,'' Journal of the Association of Environmental and Resource
Economists, 3(3), 589-625. Available at: www.journals.uchicago.edu/doi/full/10.1086/686252 (Last accessed August 1, 2023).
---------------------------------------------------------------------------
In part because of the way information is presented, and in part
because of the way consumers process information, there is also a
market failure consisting of a systematic bias in the perception of
equipment energy usage, which can affect consumer choices. Attari et
al.\70\ show that consumers tend to underestimate the energy use of
large energy-intensive appliances (such as air conditioners,
dishwashers, and clothes dryers), but overestimate the energy use of
small appliances (such as light bulbs). Therefore, it is possible that
consumers systematically underestimate the energy use associated with
consumer clothes dryers, resulting in less cost-effective purchases.
---------------------------------------------------------------------------
\70\ Attari, S.Z., M.L. DeKay, C.I. Davidson, and W. Bruine de
Bruin (2010): ``Public perceptions of energy consumption and
savings.'' Proceedings of the National Academy of Sciences 107(37),
16054-16059. Available at: www.pnas.org/content/107/37/16054 (Last
accessed August 1, 2023).
---------------------------------------------------------------------------
These market failures affect a sizeable share of the consumer
population. A study by Houde \71\ indicates that there is a significant
subset of consumers that appear to purchase appliances without taking
into account their energy efficiency and operating costs at all.
---------------------------------------------------------------------------
\71\ Houde, S. (2018): ``How Consumers Respond to Environmental
Certification and the Value of Energy Information,'' The RAND
Journal of Economics, 49 (2), 453-477. Available at:
onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12231 (Last
accessed August 1, 2023).
---------------------------------------------------------------------------
The existence of market failures in the residential sector is well
supported by the economics literature and by a number of case studies.
If DOE developed an efficiency distribution that assigned consumer
clothes dryer efficiency in the no-new-standards case solely according
to energy use or economic considerations such as life-cycle cost or
payback period, the resulting distribution of efficiencies within the
consumer sample would not reflect any of the market failures or
behavioral factors above. Thus, DOE concludes such a distribution would
not be representative of the consumer clothes dryer market. Further,
even if a specific household is not subject to the market failures
above, the purchasing decision of consumer clothes dryer efficiency can
be highly complex and influenced by a number of factors (e.g.,
aesthetics) not captured by the building characteristics available in
the RECS sample. These factors can lead to households or building
owners choosing a consumer clothes dryer efficiency that deviates from
the efficiency predicted using only energy use or economic
considerations such as life-cycle cost or payback period (as calculated
using the information from RECS 2020).
There is a complex set of behavioral factors, with sometimes
opposing effects, affecting the consumer clothes dryer market. It is
impractical to model every consumer decision incorporating all of these
effects at this extreme level of granularity given the limited
available data. Given these myriad factors, DOE estimates the resulting
distribution of such a model, if it were possible, would be very
scattered with high variability. It is for this reason DOE utilizes a
random distribution (after accounting for efficiency market share
constraints) to approximate these effects. The methodology is not an
assertion of economic irrationality, but instead, it is a
methodological approximation of complex consumer behavior. The analysis
is neither biased toward high or low energy savings. The methodology
does not preferentially assign lower-efficiency consumer clothes dryers
to households in the no-new-standards case where savings from the rule
would be greatest, nor does it preferentially assign lower-efficiency
consumer clothes dryers to households in the no-new-standards case
where savings from the rule would be smallest. Some consumers were
assigned the clothes dryers that they would have chosen if they had
engaged in perfect economic considerations when purchasing the
products. Others were assigned less-efficient clothes dryers even where
a more-efficient product would eventually result in life-cycle savings,
simulating scenarios where, for
[[Page 18194]]
example, various market failures prevent consumers from realizing those
savings. Still others were assigned clothes dryers that were more
efficient than one would expect simply from life-cycle costs analysis,
reflecting, say, ``green'' behavior, whereby consumers ascribe
independent value to minimizing harm to the environment.
Therefore, for this direct final rule, DOE performed a random
assignment of efficiencies in the LCC analysis.
Additionally, for this direct final rule, DOE considered comments
it received regarding the projected distribution of product
efficiencies under the no-new-standards case that were submitted in
response to the August 2022 NOPR. The CA IOUs requested that DOE
clarify the changes in efficiency distributions from the 2021
preliminary analysis to the August 2022 NOPR analysis, specifically
regarding the percentage of products that meet or exceed the ENERGY
STAR level in the no-new-standards case. The CA IOUs stated that the
preliminary analysis efficiency distributions resulted in a reasonably
favorable consumer impact analysis for TSL 4. The CA IOUs recommended
that DOE reconsider the analysis and conclusion regarding TSL 4 if the
preliminary analysis efficiency distributions were more accurate. (CA
IOUs, No. 50 at pp. 3-4).
In the 2021 preliminary analysis, DOE utilized a consumer-choice
model to calculate market share of various efficiency options for
consumer clothes dryers. This model considered factors such as the
first cost for electric standard, vented gas standard, ventless
electric compact (204V), and ventless electric washer-dryer units. The
consumer-choice model relied on historical sales data from 2005 to
2011. To project the efficiency distribution for other product classes
(electric compact (120V), vented electric compact (240V), DOE used
inputs based on its own test samples and a review of models available
in the market.
In the 2022 NOPR analysis, DOE evaluated concerns expressed by
stakeholders regarding the adequacy and representativeness of the
historical sales data from 2005 to 2011. DOE recognized that these data
might not accurately reflect the correlations between shipments and
sale prices in recent years. For this reason, as well as to maintain
consistency in its methodology across product classes, DOE elected to
use CCD model counts \72\ instead of market shipments data to derive
the no-new-standards case efficiency distributions for the NOPR.
---------------------------------------------------------------------------
\72\ The CCD database lists basic models of certified consumer
clothes dryers that are subject to DOE's energy conservation
standards, including their rated capacities and CEF. These clothes
dryer models are submitted by manufacturers or their third-party
representatives.
---------------------------------------------------------------------------
The Joint Commenters commented that the ENERGY STAR shipment data
is a better reflection of the consumer clothes dryer market than CCD
model counts. The Joint Commenters stated that according to the ENERGY
STAR shipment data, only about 40 percent of electric standard dryer
models meet TSL 3 as opposed to DOE's estimate of 65 percent. (Joint
Commenters, No. 51 at pp. 3-4).
For this direct final rule, DOE has considered the ENERGY STAR
shipment data for standard consumer clothes dryers along with other
pertinent market information. As a result, DOE has revised the market
share estimate for electric and gas standard consumer clothes dryers
meeting ENERGY STAR criteria in the compliance year. DOE reduced market
share of electric standard consumer clothes dryers that meet TSL 3 from
61 percent to 42 percent and increased market share of gas standard
consumer clothes dryers that meet TSL 3 from 38 percent to 48 percent.
For the remaining product classes, which together account for less than
2.5 percent of the total shipments, DOE has continued to use the CCD
model counts because it is not aware of other available information.
9. Payback Period Analysis
The payback period is the amount of time (expressed in years) it
takes the consumer to recover the additional installed cost of more
efficient products, compared to baseline products, through energy cost
savings. Payback periods that exceed the life of the product mean that
the increased total installed cost is not recovered in reduced
operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test procedure
and multiplying those savings by the average energy price projection
for the year in which compliance with the amended standards would be
required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\73\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------
\73\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
Total product shipments for consumer clothes dryers are developed
by considering the demand from replacements for units in stock that
fail and the demand from new installations in newly constructed homes.
DOE calculated shipments due to replacements using the retirement
function developed for the LCC analysis. DOE calculated shipments due
to new installations using estimates for consumer clothes dryer
saturation rates in newly constructed homes from 2015 to 2020 in the
2020 RECS and projections of new housing starts in AEO2023.
DOE disaggregated total product shipments into each product class
using estimated market shares of each product class. To estimate these
market shares, DOE first developed a linear time series regression
model to estimate market share between the product fuel type (i.e., gas
or electric) by fitting the historical shipments of gas consumer
clothes dryers. Historical shipments data showed a steady decline of
market share of gas consumer clothes dryers, from 23 percent in 2000 to
17 percent in 2022. The linear regression model indicates that market
share of gas
[[Page 18195]]
consumer clothes dryers is strongly correlated with its historical time
series.
After developing the market share estimation between electric and
gas consumer clothes dryers, DOE then subtracted the estimated gas
clothes dryer market share from total shipments and divided the
electric clothes dryer market share into each electric consumer clothes
dryer product class. DOE estimated that electric standard and vented
gas standard consumer clothes dryers account for approximately 84
percent and 14 percent of the total shipments during the analysis
period, respectively.
To estimate shipments under a standards case, DOE considers the
impacts on shipments from changes in product purchase price and
operating cost associated with higher energy efficiency levels using a
price elasticity and an efficiency elasticity. As in the April 2021
preliminary analysis, DOE employed an efficiency elasticity rate of 0.2
percent and a price elasticity rate of -0.45 percent in its shipments
model. These values are based on analysis of aggregated data for five
residential appliances: consumer clothes washers, dishwashers,
refrigerators, freezers, and room air conditioners.\74\ The market
impact is defined as the difference between the product of price
elasticity of demand and the change in price due to a standard level,
and the product of the efficiency elasticity and the change in
operating costs due to a standard level.
---------------------------------------------------------------------------
\74\ Fujita, K. (2015) Estimating Price Elasticity using Market-
Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL-
188289.
---------------------------------------------------------------------------
DOE assumed when market impact occurs (i.e., when shipments drop
under a standards case), the affected consumers would either repair
their product or purchase a used clothes dryer rather than a new one.
In the repair scenario, the model assumes that the product's life is
extended by approximately 5 years. In the used product scenario, the
model assumes the remaining average lifetime for a used clothes dryer
is 7 years. Therefore, this market impact effectively influences the
decision between repairing or replacing the product, as well as the
decision between purchasing a used dryer or a new one. See chapter 9 of
the direct final rule TSD for details.
For this direct final rule, DOE considered comments it received
regarding the shipments analysis that were submitted in response to the
August 2022 NOPR. Whirlpool commented that consumers may continue
replacing cheaper components well into the life of an electromechanical
controlled dryer, extending its life, while they may not decide to make
a more expensive electronic component repair, like a user interface
assembly, after several years of ownership of an electronic control
dryer. Whirlpool stated that DOE's proposed standards may effectively
shorten the useful life of a consumer clothes dryer because of this
repair-versus-replacement calculus, resulting in loss of time-saving
benefits of dryer ownership. (Whirlpool, No. 53 at pp. 8-9)
As stated in section IV.C.1 of this document, the recommended
standards would continue to allow for electromechanical controlled
clothes dryers to be sold on the market. In addition, DOE is not aware
of reliability issues associated with the implementation of electronic
controls relative to electromechanical controls. Whirlpool's assertion
that the adopted standards may shorten the useful life of consumer
clothes dryers lacks quantitative data to support it. As stated in
section IV.F.6 of this document, DOE's lifetime estimation is
calibrated using shipments data, which include the adopted efficiency
levels of ENERGY STAR-qualified consumer clothes dryers sold in the
market. DOE's updated Weibull lifetime distribution in this direct
final rule captures the trend of shorter lifetime and delayed
replacement of consumer clothes dryers based on the recent field data.
See chapter 9 of the direct final rule TSD for details.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels.\75\
(``Consumer'' in this context refers to consumers of the product being
regulated.) DOE calculates the NES and NPV for the potential standard
levels considered based on projections of annual product shipments,
along with the annual energy consumption and total installed cost data
from the energy use and LCC analyses. For the present analysis, DOE
projected the energy savings, operating cost savings, product costs,
and NPV of consumer benefits over the lifetime of consumer clothes
dryers sold from 2027 through 2056 for all TSLs other than 2028 through
2057 for TSL 3 (the Recommended TSL detailed in the Joint Agreement).
---------------------------------------------------------------------------
\75\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of products with efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.21 summarizes the inputs and methods DOE used for the NIA
analysis for the direct final rule. Discussion of these inputs and
methods follows the table. See chapter 10 of the direct final rule TSD
for further details.
Table IV.21--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Methods
------------------------------------------------------------------------
Shipments......................... Annual shipments from shipments
model.
Compliance Date of Standard....... TSL 1, TSL 2, TSL 4, TSL 5, and TSL
6: 2027.
TSL 3 (the Recommended TSL): 2028.
[[Page 18196]]
Efficiency Trends................. No-new-standards case: Annual
efficiency improvement of 0.47% for
electric standard and 0.02% for
vented gas standard consumer
clothes dryers.
Standards cases: ``Roll-up''
equipment to meet potential
efficiency level.
Annual Energy Consumption per Unit Annual weighted average values are a
function of energy use at each TSL.
Total Installed Cost per Unit..... Annual weighted average values are a
function of cost at each TSL.
Incorporates projection of future
product prices based on historical
data.
Annual Energy Cost per Unit....... Annual weighted average values as a
function of the annual energy
consumption per-unit and energy
prices.
Repair and Maintenance Cost per Annual values change between
Unit. electromechanical controls and
electronic controls efficiency
level.
Energy Price Trends............... AEO2023 projections (to 2050) and
constant value based on the average
between 2046 and 2050 thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO2023.
Discount Rate..................... 3% and 7%.
Present Year...................... 2024.
------------------------------------------------------------------------
1. Product Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered product classes for the year of anticipated compliance with
an amended or new standard. To project the trend in efficiency absent
amended standards for consumer clothes dryers over the entire shipments
projection period, DOE used an annual 0.47-percent and 0.02-percent
increase in shipment-weighted efficiency beginning in 2021 for electric
standard and vented gas standard consumer clothes dryers, respectively.
The efficiency for the other product classes remains at their 2021
shipments-weighted efficiency levels. The approach is further described
in chapter 10 of the direct final rule TSD.
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective. In this scenario, the market shares of
products in the no-new-standards case that do not meet the standard
under consideration would ``roll-up'' to meet the new standard level,
and the market share of products above the standard would remain
unchanged.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered products between each
potential standards case (TSL) and the case with no-new or amended
energy conservation standards. DOE calculated the national energy
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy consumption (also by vintage).
DOE calculated annual NES based on the difference in national energy
consumption for the no-new-standards case and for each higher
efficiency standard case. DOE estimated energy consumption and savings
based on-site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2023. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
Use of higher efficiency products is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. DOE did not find any
data on the rebound effect specific to consumer clothes dryers, so it
did not include a rebound effect in the analysis.
Separate from a direct rebound effect, DOE also assessed the
potential implications of amended standards as it relates to clothes
dryer energy use, namely whether amended standards could result in a
decrease in drying performance that would require consumers to re-run
their drying cycles to achieve satisfactory drying performance. As
discussed in section II.B.2 of this document, DOE's appendix D2 test
procedure includes a maximum FMC threshold (i.e., a dryness level
threshold that much be achieved in order to be considered a valid test
cycle), which ensures that the rated energy consumption of clothes
dryers is representative of consumer expectations for dryness. DOE
testing confirmed that commercially available products achieve this FMC
dryness threshold at each of the efficiency levels considered in this
direct final rule analysis. Consequently, DOE has determined that
clothes dryers that comply with the amended standards will provide
consumer-acceptable levels of dryness corresponding to the rated energy
consumption as measured by appendix D2. In the NES, therefore, DOE
assumed that the amended standards would not result in any increase in
clothes dryer usage, such as that arising from consumers re-running
drying cycles.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011, notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \76\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas
[[Page 18197]]
(including fugitive emissions) and additional energy used to produce
and deliver the various fuels used by power plants. The approach used
for deriving FFC measures of energy use and emissions is described in
appendix 10B of the direct final rule TSD.
---------------------------------------------------------------------------
\76\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed
April 20, 2023).
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
regarding the methodology for calculating the national energy savings
that was presented in the August 2022 NOPR. The approach used for this
direct final rule is largely the same approach DOE had used for the
August 2022 NOPR analysis.
In response to the August 2022 NOPR, EEI stated that in the past,
DOE stated potentially using a captured-energy approach when estimating
upstream full-fuel-cycle energy savings; however, EEI noted that in
recent notices and rulemakings, DOE is now overstating these estimates
by using a fossil fuel equivalent for renewable energy, significantly
overstating the upstream savings. (EEI, No. 37 at pp. 45-46)
As previously mentioned, DOE converts electricity consumption and
savings to primary energy and FFC energy using annual conversion
factors derived from the AEO. Traditionally, EIA has used the fossil
fuel equivalency approach to report noncombustible renewables'
contribution to total primary energy. The fossil fuel equivalency
approach applies an annualized weighted average heat rate for fossil
fuel power plants to the electricity generated (in kWh) from
noncombustible renewables. EIA recognizes that using captured energy
(i.e., the net energy available for direct consumption after
transformation of a noncombustible renewable energy into electricity)
and using incident energy (i.e., the mechanical, radiation, or thermal
energy that is measurable as the ``input'' to the device) are possible
approaches for converting renewable electricity to a common measure of
primary energy, but it continues to use the fossil fuel equivalency
approach in the AEO and other reporting of energy statistics. DOE has
used this approach to accounting for primary energy savings from energy
efficiency standards for the entirety of the appliance standards
program.
Whirlpool commented that the lessening of utility and performance
of dryers, including increases to drying cycle times and potentially
increased fabric damage to clothes, may lead to corresponding
compensatory behavioral changes from consumers that may result in lost
energy savings. Whirlpool recommended that DOE's analysis account for
possible negative rebound effects of changes, such that the expected
energy savings from an amended standard may not be fully delivered over
the analyzed period. Whirlpool commented that consumers associate
longer drying times with more potential damage to their clothes and may
choose cycles or options that reduce overall drying time at the expense
of energy consumption. (Whirlpool, No. 53 at p. 6)
DOE has examined the potential impacts on different attributes of
product performance while considering amended standards, as detailed in
section IV.C.1 of this document. As discussed further in section V.B.4
of this document, DOE data indicate that the standards adopted by this
direct final rule will not necessitate any substantive increase in
cycle times compared to typical cycle times currently associated with
baseline consumer clothes dryers and therefore are not expected to have
any negative impacts on fabric care and product wear and tear that
would lead consumers to use more energy consumptive drying cycles.
Moreover, DOE notes that the appendix D2 test procedure, which will be
required to demonstrate compliance with the amended standards
established in this direct final rule, and is currently required for
ENERGY STAR certification, ensures that clothes dryers provide a
consumer-acceptable level of dryness.
Furthermore, as previously discussed, on February 14, 2024, DOE
received a second joint statement from the same group of stakeholders
that submitted the Joint Agreement (including AHAM, of which Whirlpool
is a member) in which the signatories reaffirmed the standards
recommended in the Joint Agreement.\77\ In particular, the letter
states that the stakeholders do not anticipate the recommended
standards will negatively affect features or performance, including
cycle time. In particular, the signatories stated that because the test
procedure that will be used to determine compliance with amended
standards (i.e., appendix D2) requires that dryers meet a threshold for
``final moisture content'' in order to be certified as compliant, this
final moisture content requirement ensures that compliant clothes
dryers will adequately dry clothes. The signatories further noted that
there are more than 400 electric clothes dryer models and nearly 200
gas clothes dryer models that are certified to the current ENERGY STAR
specification, which is equivalent to the recommended standard levels
and is based on appendix D2, and that these models all meet the final
moisture content threshold specified in appendix D2. For further
discussion of consumer clothes dryer performance as it relates to
amended standards, see section V.B.4 of this document.
---------------------------------------------------------------------------
\77\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
DOE acknowledges that this conclusion is contrary to its
assumptions in the final rule that it published on December 16, 2020
(``December 2020 Final Rule''). 85 FR 81359. There, DOE assumed that
consumers might need to re-run their clothes washers or dryers through
multiple cycles ``to adequately clean or dry their clothing.'' 85 FR
81365. In this rulemaking, DOE has found no evidence suggesting that
consumers are running their dryers multiple times at TSL 3 (i.e., the
Recommended TSL), which corresponds to the current ENERGY STAR
efficiency level for both electric and gas standard clothes dryers. As
supported by data described in section IV.E of this document, average
consumer usage of electric standard clothes has steadily declined from
301 cycles per year per dryer in the 2005 RECS to 213 cycles per year
per dryer in the 2020 RECS, and vented gas standard clothes dryer usage
has declined from 292 cycles in the 2005 RECS to 213 cycles in the 2020
RECS, while the average household size has remained essentially
unchanged (average 3 household members) during the same period. This
shows a significant downward trend in the average number of cycles run
on each consumer clothes dryer over the past 15 years, even after the
implementation of the current amended standard in 2015. These data
indicate that amended energy conservation standards have not resulted
in consumers increasing dryer usage due to amended standards for
consumer clothes dryers.
Given that there is no evidence of any previous consumer clothes
dryer standard increasing drying cycles per year, and in fact, instead
cycles per year have decreased over time through multiple standards,
DOE determines that a standard at the Recommended TSL would not be
expected to lead consumers to increase their use of consumer clothes
dryers.
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE
[[Page 18198]]
calculates net savings each year as the difference between the no-new-
standards case and each standards case in terms of total savings in
operating costs versus total increases in installed costs. DOE
calculates operating cost savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
consumer clothes dryer price trends based on historical PPI data. DOE
applied the same trends to project prices for each product class at
each considered efficiency level. By 2057, which is the end date of the
projection period for the Recommended TSL detailed in Joint Agreement,
the average consumer clothes dryer (real) price is projected to drop 18
percent relative to 2022. DOE's projection of product prices is
described in appendix 10C of the direct final rule TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for consumer
clothes dryers. In addition to the default price trend, DOE considered
two product price sensitivity cases: (1) a high-price-decline case
based on the combined price index from 1980 to 2022 \78\ and (2) a
constant price trend at the 2022 value. The derivation of these price
trends and the results of these sensitivity cases are described in
appendix 10C of the direct final rule TSD.
---------------------------------------------------------------------------
\78\ DOE combined PPI data of ``household laundry equipment''
from 1948 to 2016 and PPI data of ``major household appliance:
primary products'' from 2016 to 2022 into one time-series price
index to project future price for consumer clothes dryers.
---------------------------------------------------------------------------
The energy cost savings are calculated using the estimated energy
savings in each year and the projected price of the appropriate form of
energy. To estimate energy prices in future years, DOE multiplied the
average national energy prices by the projection of annual national-
average residential energy price changes in the Reference case from
AEO2023, which has an end year of 2050. To estimate price trends after
2050, the 2046-2050 average was used for all years. As part of the NIA,
DOE also analyzed scenarios that used inputs from variants of the
AEO2023 Reference case that have lower and higher economic growth.
Those cases have lower and higher energy price trends compared to the
Reference case. NIA results based on these cases are presented in
appendix 10D of the direct final rule TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
direct final rule, DOE estimated the NPV of consumer benefits using
both a 3-percent and a 7-percent real discount rate. DOE uses these
discount rates in accordance with guidance provided by the OMB to
Federal agencies on the development of regulatory analysis.\79\ The
discount rates for the determination of NPV are in contrast to the
discount rates used in the LCC analysis, which are designed to reflect
a consumer's perspective. The 7-percent real value is an estimate of
the average before-tax rate of return to private capital in the U.S.
economy. The 3-percent real value represents the ``social rate of time
preference,'' which is the rate at which society discounts future
consumption flows to their present value.
---------------------------------------------------------------------------
\79\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars/ (last accessed April 20, 2023).
DOE used the prior version of Circular A-4 (2003) as a result of the
effective date of the new version.
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this direct final rule,
DOE analyzed the impacts of the considered standard levels on two
subgroups: (1) low-income households and (2) senior-only households.
The analysis used subsets of the 2020 RECS sample composed of
households that meet the criteria for the considered subgroups. DOE
used the LCC and PBP spreadsheet model to estimate the impacts of the
considered efficiency levels on these subgroups. Chapter 11 in the
direct final rule TSD describes the consumer subgroup analysis.
For this direct final rule, DOE considered comments it received
regarding the consumer subgroup analysis that were submitted in
response to the August 2022 NOPR. DOE notes that although several of
the comments discussed below are from AHAM, as previously discussed, on
February 14, 2024, DOE received a second joint statement from the same
group of stakeholders that submitted the Joint Agreement (including
AHAM) in which the signatories reaffirmed the standards recommended in
the Joint Agreement.\80\ In particular, the letter states that ``the
recommended standards represent the maximum levels of efficiency that
are technologically feasible and economically justified.'' (emphasis
added).
---------------------------------------------------------------------------
\80\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
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In response to the August 2022 NOPR, AHAM stated that in a recent
consumer study conducted by Bellomy Research for AHAM, low-income
households were at a disadvantage when purchasing or replacing a
laundry appliance, with many households indicating that they would have
to make financial sacrifices in other areas of their lives to
accommodate purchasing a dryer. AHAM stated that over 90 percent of
low-income households cited cost as the most important factor when
deciding to purchase a dryer, and nearly 75 percent of low-income
households indicated they would not be willing to pay around $100 more
for a more efficient appliance at the time of purchase to save
approximately $50-$150 in energy costs over the lifetime of that
appliance. AHAM stated that one in four low-income households indicated
they would delay a replacement purchase if their laundry appliance
stopped working, and in cases of replacement, they would replace it
with another entry-level/value-tier model. Additionally, AHAM stated
that over half of low-income households indicated they would turn to
purchasing a used dryer or apply for assistance. (AHAM, No. 46 at pp.
6-7). AHAM stated that standards that result in increased prices for
entry-level appliances or that price some consumers out of the clothes
dryer market by eliminating technology options that allow manufacturers
to produce entry-level models (e.g., electromechanical controls) deepen
inequity for underserved communities. According to AHAM, if low-income
consumers do not have equitable access, they may forego dryer ownership
and use a laundromat with lost time savings and additional operating
costs, rely on expensive financing options, or buy an older and
possibly less efficient used dryer, thus reducing overall savings
potential. (AHAM, No. 46 at pp. 5-6, 8)
AGA and APGA supported AHAM's comments on the disproportionate
effect more stringent standards could have on low-income consumers.
(AGA et al., No. 47 at p. 4)
Whirlpool stated that low-income consumers may not be able to
purchase more efficient dryers due to the
[[Page 18199]]
significant cost increase and their inability to pay for very large
emergency purchases over $500. Whirlpool stated that while there may be
some level of life-cycle cost savings from proposed standards,
consumers who can no longer afford an entry-level dryer may never
realize these savings. Whirlpool stated that purchase price increases
driven by DOE's proposed standards may drive undesirable consumer
behavior, including repairing the old dryer or purchasing a used dryer,
effectively keeping older and less efficient appliances on the grid.
Whirlpool requested that DOE ensure new appliances remain as affordable
to low-income consumers as possible. (Whirlpool, No. 53 at pp. 7-8)
NYSERDA stated that amended standards would significantly improve
energy outcomes for low-income households and not create additional
burdens. NYSERDA stated that in New York, there is a relatively even
split between owner-occupied and rented homes, with a significant
number of rental properties, especially in new construction, having in-
unit consumer clothes dryers. NYSERDA commented that for individual
renters who are not responsible for the purchase of their clothes dryer
but who are responsible for paying their utility bills, amended
standards will provide utility bill savings without incurring direct
equipment costs. (NYSERDA, No. 48 at p. 2)
According to the 2020 RECS clothes dryer sample, approximately 47
percent of low-income households who have a dryer are renters. In most
cases, the property owner would purchase a new dryer. While the owner
might seek to collect some of this cost in rent, the ability to do so
is constrained by lease agreements and larger market forces that
influence rent levels in particular locations. Thus, it is reasonable
to conclude that renters would see a significant net benefit from a
higher efficiency dryer, and this is seen in the results of DOE's
analysis (see section V.B.1.b of this document for results of the
consumer subgroup analysis). Additionally, for this direct final rule,
DOE implemented a scenario assuming that landlords would pass some of
the incremental clothes dryer costs to renters in the LCC analysis. The
results indicate that this scenario would not impact DOE's decision on
adopting the amended standards. For details of the sensitivity results,
see appendix 11A of the direct final rule TSD.
In DOE's analysis, approximately 53 percent of low-income
households who have a dryer are homeowners, who would be responsible
for purchasing a new dryer. Given that the average incremental increase
in price for a dryer meeting the adopted standards (relative to the
baseline model that reflects current entry-level products) is $27, DOE
believes it is reasonable to conclude that most low-income homeowners
who could afford to purchase a new dryer under the current standard
could also afford to purchase a dryer that meets the new standard,
particularly in the absence of data indicating otherwise. Furthermore,
DOE's analysis found that for the largest product class (i.e., electric
standard), less than 1 percent of low-income households would
experience a net cost under the adopted standard, but the majority
would see a net benefit (see section V.B.1.b of this document for
results of the consumer subgroup analysis).
In total, DOE's analysis estimated that 45 percent of low-income
households who have a dryer would experience a net benefit and 54
percent of low-income households who have a dryer would have no impact
under the adopted standard.
AHAM comment in response to the August 2022 NOPR that low-income
consumers might lose equitable access to on-site dryer usage because of
the amended standards did not include supporting data so DOE was unable
to fully evaluate the assertion. Nevertheless, DOE's shipments analysis
takes into account the market impact under a standards case. For this
direct final rule, DOE has implemented scenarios in which affected
consumers would either repair their clothes dryers or opt to purchase a
used one instead of a new clothes dryer (see section IV.G of this
document).
AHAM recommended that DOE review all available data sources
regarding low-income households and appliances to incorporate into its
low-income analysis, in particular the basis of only differential
discount rates. AHAM commented that DOE's analysis is a very myopic
view of the effects of standards on low-income households, and within
this framework the approach of using average discount rates is
fundamentally flawed in its understanding of the relationship between
disposable income and balance sheet rebalancing. (AHAM, No. 46 at p. 8)
DOE's approach to the low-income consumer subgroup analysis
includes households that do not have assets or debts included in the
SCF. It is likely that a majority of these ``unbanked'' households
primarily rely on cash to complete transactions and as a form of
savings, which is included in the distribution of discount rates
associated with low-income consumers. Consumers that rely entirely on
cash are assigned a discount rate of 0 percent, as there is no lost
opportunity cost from alternative noncash assets or debts. For
households that utilize nontraditional, nonbank financing, DOE's
methodology includes a distribution of high discount rates (i.e., >10%
percent), which are representative of the opportunity cost associated
with nonbank lines of credit. Therefore, DOE determined that this
comprehensive approach enables a fair assessment of discount rates for
low-income consumers who have different financial situations.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of amended
energy conservation standards on manufacturers of consumer clothes
dryers and to estimate the potential impacts of such standards on
direct employment and manufacturing capacity. The MIA has both
quantitative and qualitative aspects and includes analyses of projected
industry cash flows, the INPV, investments in research and development
(``R&D'') and manufacturing capital, and domestic manufacturing
employment. Additionally, the MIA seeks to determine how amended energy
conservation standards might affect manufacturing employment, capacity,
and competition, as well as how standards contribute to overall
regulatory burden. Finally, the MIA serves to identify any
disproportionate impacts on manufacturer subgroups, including small
business manufacturers.
The quantitative part of the MIA primarily relies on the GRIM, an
industry cash flow model with inputs specific to this rulemaking. The
key GRIM inputs include data on the industry cost structure, unit
production costs, product shipments, manufacturer markups, and
investments in R&D and manufacturing capital required to produce
compliant products. The key GRIM outputs are the INPV, which is the sum
of industry annual cash flows over the analysis period, discounted
using the industry-weighted average cost of capital, and the impact on
domestic manufacturing employment. The model uses standard accounting
principles to estimate the impacts of more stringent energy
conservation standards on a given industry by comparing changes in INPV
and domestic manufacturing employment between a no-new-standards case
and the various standards cases. To capture
[[Page 18200]]
the uncertainty relating to manufacturer pricing strategies following
amended standards, the GRIM estimates a range of possible impacts under
different markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the consumer clothes dryer
manufacturing industry based on the market and technology assessment,
preliminary manufacturer interviews, and publicly available
information. This included a top-down analysis of consumer clothes
dryer manufacturers that DOE used to derive preliminary financial
inputs for the GRIM (e.g., revenues; materials, labor, overhead, and
depreciation expenses; selling, general, and administrative expenses
(``SG&A''); and R&D expenses). DOE also used public sources of
information to further calibrate its initial characterization of the
consumer clothes dryer manufacturing industry, including company
filings of form 10-K from the SEC,\81\ corporate annual reports, the
U.S. Census Bureau's Quarterly Survey of Plant Capacity
Utilization,\82\ the U.S. Census Bureau's Annual Survey of Manufactures
(``ASM''),\83\ and reports from Dun & Bradstreet.\84\
---------------------------------------------------------------------------
\81\ U.S. Securities and Exchange Commission. Company Filings.
Available at www.sec.gov/edgar/searchedgar/companysearch.html. (Last
accessed June 6, 2023).
\82\ U.S. Census Bureau. Quarterly Survey of Plant Capacity
Utilization. Available at www.census.gov/programs-surveys/qpc/data/tables.html (last accessed June 1, 2023).
\83\ U.S. Census Bureau, Annual Survey of Manufactures.
Available at www.census.gov/programs-surveys/asm/data/tables.html
(last accessed June 1, 2023).
\84\ The Dun & Bradstreet subscription login is available at
app.dnbhoovers.com (last accessed June 8, 2023).
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of amended energy
conservation standards. The GRIM uses several factors to determine a
series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. These factors include annual expected revenues,
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures.
In general, energy conservation standards can affect manufacturer cash
flow in three distinct ways: (1) creating a need for increased
investment, (2) raising production costs per-unit, and (3) altering
revenue due to higher per-unit prices and changes in sales volumes.
In addition, during Phase 2, DOE developed interview guides to
distribute to manufacturers of consumer clothes dryers in order to
develop other key GRIM inputs, including product and capital conversion
costs, and to gather additional information on the anticipated effects
of energy conservation standards on revenues, direct employment,
capital assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with representative manufacturers. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics to validate assumptions used in the GRIM and to identify key
issues or concerns. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by amended
standards or that may not be accurately represented by the average cost
assumptions used to develop the industry cash flow analysis. Such
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers, niche players, and/or manufacturers exhibiting a
cost structure that largely differs from the industry average. DOE
identified one subgroup for a separate impact analysis: small business
manufacturers. The small business subgroup is discussed in chapter 12
of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to
amended standards that result in a higher or lower industry value. The
GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, manufacturer markups, shipments, and
industry financial information as inputs. The GRIM models changes in
costs, distribution of shipments, investments, and manufacturer margins
that could result from an amended energy conservation standard. The
GRIM spreadsheet uses the inputs to arrive at a series of annual cash
flows, beginning in 2024 (the base year of the analysis) and continuing
30 years from the analyzed compliance year.\85\ DOE calculated INPVs by
summing the stream of annual discounted cash flows during this period.
For manufacturers of consumer clothes dryers, DOE used a real discount
rate of 7.5 percent, which was derived from industry financials and
then modified according to feedback received during manufacturer
interviews.
---------------------------------------------------------------------------
\85\ For the no-new-standards case and all TSLs except the
Recommended TSL (i.e., TSL 3), the analysis period ranges from 2024-
2056. For the Recommended TSL, the analysis period ranges from 2024-
2057.
---------------------------------------------------------------------------
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the
amended energy conservation standard on manufacturers. As discussed
previously, DOE developed the critical GRIM inputs using a number of
sources, including publicly available data, results of the engineering
analysis and shipments analysis, and information gathered from industry
stakeholders during the course of manufacturer interviews. The GRIM
results are presented in section V.B.2 of this document. Additional
details about the GRIM, the discount rate, and other financial
parameters can be found in chapter 12 of the direct final rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient products is typically more expensive
than manufacturing baseline products due to the use of more complex
components, which are typically more costly than baseline components.
The changes in MPCs of covered products can affect the revenues, gross
margins, and cash flow of the industry. DOE models the relationship
between efficiency and MPCs as a part of its engineering analysis. For
a complete description of the MPCs, see section IV.C of this document
and chapter 5 of the direct final rule TSD.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. Changes in sales volumes and efficiency mix over time
can significantly affect manufacturer finances. For this analysis, the
GRIM uses the NIA's annual shipment projections derived from the
shipments analysis from the base year (2024) to the end year of the
analysis period (30 years from the analyzed compliance date \86\). See
section IV.G of
[[Page 18201]]
this document and chapter 9 of the direct final rule TSD for additional
details.
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\86\ Id.
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c. Capital and Product Conversion Costs
Amended energy conservation standards could cause manufacturers to
incur conversion costs to bring their production facilities and product
designs into compliance. DOE evaluated the level of conversion-related
expenditures that would be needed to comply with each considered
efficiency level in each product class. For the MIA, DOE classified
these conversion costs into two major groups: (1) capital conversion
costs and (2) product conversion costs. Capital conversion costs are
investments in property, plant, and equipment necessary to adapt or
change existing production facilities such that new compliant product
designs can be fabricated and assembled. Product conversion costs are
investments in research, development, testing, marketing, and other
non-capitalized costs necessary to make product designs comply with
amended energy conservation standards.
DOE relied on manufacturer feedback to evaluate the level of
capital and product conversion costs manufacturers would likely incur
at the various TSLs. During confidential interviews, DOE asked
manufacturers to estimate the capital conversion costs (e.g., changes
in production processes, equipment, and tooling) to meet the various
efficiency levels. DOE also asked manufacturers to estimate the
redesign effort and engineering resources required at various
efficiency levels to quantify the product conversion costs. Based on
manufacturer feedback, DOE also estimated ``re-flooring'' costs
associated with replacing obsolete display models in big-box stores
(e.g., Lowe's, Home Depot, Best Buy) due to higher standards. Some
manufacturers stated that with a new product release, big-box retailers
discount outdated display models, and manufacturers share any losses
associated with discounting the retail price. The estimated re-flooring
costs for each efficiency level were incorporated into the product
conversion cost estimates, as DOE modeled the re-flooring costs as a
marketing expense.
DOE reviewed the DOE CCD,\87\ U.S. market share estimates, and
company characteristics to scale the company-specific conversion cost
estimates to levels that represent the overall industry. First, DOE
used data from its CCD,\88\ the ENERGY STAR-qualified product
database,\89\ and the California Energy Commission database \90\ to
identify original equipment manufacturers (``OEMs'') of the covered
products. Next, DOE assessed each OEM's U.S. market share and product
profile (e.g., estimated sales by product class and efficiency) for
consumer clothes dryers. Finally, DOE estimated industry-level
conversion cost estimates by scaling feedback from OEMs based on a
combination of product offerings and U.S. market share estimates.
---------------------------------------------------------------------------
\87\ U.S. Department of Energy's Compliance Certification
Database is available at www.regulations.doe.gov/certification-data
(last accessed April 28, 2023).
\88\ Id.
\89\ ENERGY STAR Product Finder data set, available at
www.energystar.gov/productfinder (last accessed April 28, 2023).
\90\ California Energy Commission Modernized Appliance
Efficiency Database System, available at
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx
(last accessed April 28, 2023).
---------------------------------------------------------------------------
DOE adjusted the conversion cost estimates developed in support of
the August 2022 NOPR to 2022$ for this analysis. DOE also estimated
industry costs associated with appendix D2, as finalized in the October
2021 TP Final Rule. 86 FR 56608.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion cost
figures used in the GRIM can be found in section V.B.2.a of this
document. For additional information on the estimated capital and
product conversion costs, see chapter 12 of the direct final rule TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs
estimated in the engineering analysis for each product class and
efficiency level. Modifying these markups in the standards case yields
different sets of impacts on manufacturers. For the MIA, DOE modeled
two standards-case scenarios to represent uncertainty regarding the
potential impacts on prices and profitability for manufacturers
following the implementation of amended energy conservation standards:
(1) a preservation of gross margin percentage scenario and (2) a
preservation-of-operating profit scenario. These scenarios lead to
different manufacturer markup values that, when applied to the MPCs,
result in varying revenue and cash flow impacts.
Under the preservation of gross margin percentage scenario, DOE
applied a single uniform ``gross margin percentage'' across all
efficiency levels, which assumes that manufacturers would be able to
maintain the same amount of profit as a percentage of revenues at all
efficiency levels within a product class. As manufacturer production
costs increase with efficiency, this scenario implies that the per-unit
dollar profit will increase. DOE assumed a gross margin percentage of
approximately 21 percent for all product classes.\91\ Manufacturers
tend to believe it is optimistic to assume that they would be able to
maintain the same gross margin percentage as their production costs
increase, particularly for minimally efficient products. Therefore,
this scenario represents a high bound to industry profitability under
an amended energy conservation standard.
---------------------------------------------------------------------------
\91\ The gross margin percentage of 21 percent is based on a
manufacturer markup of 1.26.
---------------------------------------------------------------------------
Under the preservation of operating profit scenario, DOE modeled a
situation in which manufacturers are not able to increase per-unit
operating profit in proportion to increases in manufacturer production
costs. DOE implemented this scenario in the GRIM by lowering the
manufacturer markups at each TSL to yield approximately the same
earnings before interest and taxes in the standards case as in the no-
new-standards case in the year after the compliance date of the amended
standards. The implicit assumption behind this scenario is that the
industry can only maintain its operating profit in absolute dollars
after the standard.
A comparison of industry financial impacts under the two
manufacturer markup scenarios is presented in section V.B.2.a of this
document.
3. Discussion of MIA Comments
For this direct final rule, DOE considered comments it had received
regarding its manufacturer impact analysis presented in the August 2022
NOPR. The approach used for this direct final rule is largely the same
as the approach DOE had used for the August 2022 NOPR analysis.
AHAM requested that DOE confirm it has fully included all costs
that manufacturers would face in compliance to assure that the
financial effects on manufacturers are not excessive. (AHAM, No. 46 at
p. 11)
As discussed in section IV.J.2.c of this document, DOE primarily
relied on manufacturer feedback to estimate the
[[Page 18202]]
capital and product conversion costs that manufacturers would likely
incur at the various analyzed efficiency levels. DOE did not receive
additional feedback about its conversion cost estimates published in
the August 2022 NOPR. Therefore, DOE did not significantly alter its
conversion cost methodology in evaluating this direct final rule. DOE
adjusted the conversion cost estimates developed in support of the NOPR
to 2022$ for this analysis. Additionally, for this direct final rule,
DOE updated its product conversion cost estimates to incorporate the
estimated industry costs associated with rerating basic models in
accordance with appendix D2. 86 FR 56608.
AHAM stated that if DOE is to consider amending energy conservation
standards, it must incorporate into its analysis the challenges
manufacturers are facing regarding the COVID-19 pandemic and increased
tariffs. AHAM commented that DOE cannot simply rely on its previous
analysis regarding component costs. (AHAM, No. 46 at pp. 13-14)
For this direct final rule, DOE updated its engineering analysis to
incorporate up-to-date cost estimates. Increased costs associated with
recent supply chain challenges stemming from the COVID-19 pandemic have
been incorporated into the cost analysis by way of 5-year moving
averages for materials and the most up-to-date costs for purchased
parts.
AHAM stated that there will be an additional design cycle for
either or both clothes washers and clothes dryers if the effective
dates for the two products are out of sync. AHAM stated that the
existing DOE analysis does not capture this situation, which creates a
significant technical and financial burden on manufacturers. (AHAM, No.
46 at p. 11) AHAM stated its support for the ongoing Peer Review
process regarding cumulative regulatory burden and stated that DOE
should not discount the time and resources needed to evaluate and
respond to all proposed test procedures and energy conservation
standards for multiple products proposed over a short period. AHAM
commented that when these rulemakings occur simultaneously, the
cumulative burden increases dramatically. (AHAM, No. 46 at p. 13)
DOE notes that it is adopting the Recommended TSL in this direct
final rule. The Joint Agreement included recommendations for other
appliance standards rulemakings: residential clothes washers; consumer
clothes dryers; consumer conventional cooking products; dishwashers;
refrigerators, refrigerator-freezers, and freezers; and miscellaneous
refrigeration products. The signatories indicate that the Joint
Agreement for the six rulemakings should be considered as a joint
recommendation of standards, to be adopted in its entirety. (Joint
Agreement, No. 55 at p. 3) The Joint Agreement specifies a compliance
date of March 1, 2028 for both residential clothes washers and consumer
clothes dryers. Therefore, DOE did not adjust its conversion cost
estimates to account for the time and investments associated with an
additional design cycle as DOE assumed the compliance dates for
residential clothes washers and consumer clothes dryers would align.
AHAM urged DOE to incorporate the financial results of the current
cumulative regulatory burden analysis directly into the MIA and stated
that this is achievable by adding the combined costs of complying with
multiple regulations into the Product Conversion Costs in the GRIM
model and including the costs to manufacturers of responding to and
monitoring regulations. (AHAM, No. 46 at p. 11) AHAM requested that DOE
explicitly recognize the industry effects of multiple regulations
issued within a short period of time on the same product. AHAM stated
that the MIA inherently assumes the regulation analyzed in the INPV
analysis is a single event (investment) and that all other cash flows
are unaffected by this regulation. In addition, AHAM stated that when
there are multiple regulations on the same product within the 6-year
lock-in period, the second regulation violates the recoupment
assumption inherent in the first one, which is not considered by the
GRIM model. AHAM stated that DOE could resolve this by conducting a
consolidated analysis for multiple regulations starting from the time
of the first regulation or by incorporating a value reduction factor in
the first post-regulation year of the analysis that subtracts the value
lost from the remaining years of the previous regulation. (Id. at pp.
11-12)
If DOE were to combine the conversion costs from multiple
regulations, as requested, it would be appropriate to match the
combined conversion costs with the combined revenues of the regulated
products. DOE is concerned that combined results would make it more
difficult to discern the direct impact of the amended standard on
covered manufacturers, particularly for rulemakings where there is only
partial overlap of manufacturers. Conversion costs would be spread over
a larger revenue base and result in less severe INPV impacts when
evaluated on a percent change basis. Furthermore, DOE is not aware of
other Federal, product-specific regulations on consumer clothes dryers
that would go into effect 3 years before or after the 2028 compliance
date. DOE understands that if the effective dates of the consumer
clothes dryer and residential clothes washer amended standards were
misaligned, there could be additional development and marketing costs
associated with aligning the design cycles of these products, as
clothes dryers and clothes washers are typically designed and sold in
pairs. However, DOE did not account for any additional development cost
associated with this potential regulatory burden, as DOE modeled the
recommended March 1, 2028 compliance date from the Joint Agreement for
both rulemakings.
AHAM urged DOE to weigh in against regulatory misalignment with
Natural Resources Canada (``NRCan'') through the United States-Canada
Regulatory Cooperation Council work plan on energy efficiency and under
the Memorandum of Understanding (``MOU'') on energy cooperation. AHAM
also urged DOE to account for the burden of any misalignment in its
analysis. According to AHAM, it is critical that amended standards are
coordinated with NRCan, in both substance and timing, to maintain a
consistent United States-Canadian market for home appliances. (AHAM,
No. 46 at p. 13)
As part of the analysis underlying the energy conservation
standards for consumer clothes dryers, DOE considers and reviews
standards programs from other regions. As part of this effort, DOE
considers regulatory actions undertaken by NRCan and notes that per a
notice published on April 2, 2022 in the Canada Gazette, Part I,\92\
NRCan is currently proceeding with pre-consultations to align the
energy efficiency and testing standard for five home appliance
categories including consumer clothes dryer with the outcomes of the
current DOE regulatory efforts. Further detail regarding DOE's review
of the NRCan regulatory actions and those in other regions are
discussed in chapter 3 of the direct final rule TSD.
---------------------------------------------------------------------------
\92\ The notice published in the Canada Gazette, Part I can be
found at: gazette.gc.ca/rp-pr/p1/2022/2022-04-02/html/notice-avis-eng.html#ne4.
---------------------------------------------------------------------------
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the
[[Page 18203]]
impacts of potential standards on emissions of two additional
greenhouse gases, CH4 and N2O, as well as the
reductions in emissions of other gases due to ``upstream'' activities
in the fuel production chain. These upstream activities comprise
extraction, processing, and transporting fuels to the site of
combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions intended to
represent the marginal impacts of the change in electricity consumption
associated with amended or new standards. The methodology is based on
results published for the AEO, including a set of side cases that
implement a variety of efficiency-related policies. The methodology is
described in appendix 13A in the direct final rule TSD. The analysis
presented in this notice uses projections from AEO2023. Power sector
emissions of CH4 and N2O from fuel combustion are
estimated using Emission Factors for Greenhouse Gas Inventories
published by the Environmental Protection Agency (EPA).\93\
---------------------------------------------------------------------------
\93\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed April 6,
2023).
---------------------------------------------------------------------------
The on-site operation of consumer clothes dryers involves
combustion of fossil fuels and results in emissions of CO2,
NOX, SO2, CH4, and N2O
where these products are used. Site emissions of these gases were
estimated using Emission Factors for Greenhouse Gas Inventories and,
for NOX and SO2, emissions intensity factors from
an EPA publication.\94\
---------------------------------------------------------------------------
\94\ U.S. Environmental Protection Agency. External Combustion
Sources. In Compilation of Air Pollutant Emission Factors. AP-42.
Fifth Edition. Volume I: Stationary Point and Area Sources. Chapter
1. Available at www.epa.gov/air-emissions-factors-and-quantification/ap-42-compilation-air-emissions-factors#Proposed/
(last accessed May 26, 2023).
---------------------------------------------------------------------------
FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive'' emissions (direct leakage to the atmosphere) of
CH4 and CO2, are estimated based on the
methodology described in chapter 15 of the direct final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or MMBtu of site energy savings. For power sector
emissions, specific emissions intensity factors are calculated by
sector and end use. Total emissions reductions are estimated using the
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO2023 generally represents current
legislation and environmental regulations, including recent government
actions, that were in place at the time of preparation of AEO2023,
including the emissions control programs discussed in the following
paragraphs.\95\
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\95\ For further information, see the Assumptions to AEO2023
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed May 26, 2023).
---------------------------------------------------------------------------
SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\96\ AEO2023
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, for states subject to SO2
emissions limits under CSAPR, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
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\96\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (``PM2.5'') pollution, in order
to address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------
However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants. 77 FR 9304 (Feb. 16, 2012). The direct final rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. In order to continue operating,
coal plants must have either flue gas desulfurization or dry sorbent
injection systems installed. Both technologies, which are used to
reduce acid gas emissions, also reduce SO2 emissions.
Because of the emissions reductions under the MATS, it is unlikely that
excess SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by another regulated EGU.
Therefore, energy conservation standards that decrease electricity
generation will generally reduce SO2 emissions. DOE
estimated SO2 emissions reduction using emissions factors
based on AEO2023.
CSAPR also established limits on NOX emissions for
numerous States in the eastern half of the United States. Energy
conservation standards would have little effect on NOX
emissions in those States covered by CSAPR emissions limits if excess
NOX emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NOX emissions from other EGUs. In such case, NOX
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that standards might reduce
NOX emissions in covered States. Despite this possibility,
DOE has chosen to be conservative in its analysis and has maintained
the assumption that standards will not reduce NOX emissions
in States covered by CSAPR. Standards would be expected to reduce
NOX emissions in the States not covered by CSAPR. DOE used
AEO2023 data to derive NOX emissions factors for the group
of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2023, which incorporates the MATS.
EEI stated that the emissions estimates are significantly
overstated
[[Page 18204]]
with the passage of the Inflation Reduction Act (``IRA''). EEI
recommended that DOE update the analysis to account for the IRA and all
the impacts in terms of the significantly increased use of renewable
electricity as well as the increase in the number of utilities that
have stated zero carbon electricity can be attained within the next 15
to 25 years. (EEI, No. 37 at pp. 54-55)
As previously stated, for the direct final rule DOE used the
AEO2023 Reference case, which includes the IRA, to represent the
electric power sector over the coming decades. The AEO2023 Reference
case reflects EIA's view of the most likely uptake of IRA tax credits,
and it assumes qualified technologies receive the base tax credit and
some bonus credits. The IRA provisions, in combination with other
policies and market forces, push wind and solar to 56 percent of
electricity generation by 2050. DOE estimated emissions reductions from
the adopted standards relative to this case.
L. Monetizing Emissions Impacts
As part of the development of this direct final rule, for the
purpose of complying with the requirements of Executive Order 12866,
DOE considered the estimated monetary benefits from the reduced
emissions of CO2, CH4, N2O,
NOX, and SO2 that are expected to result from
each of the TSLs considered. In order to make this calculation
analogous to the calculation of the NPV of consumer benefit, DOE
considered the reduced emissions expected to result over the lifetime
of products shipped in the projection period for each TSL. This section
summarizes the basis for the values used for monetizing the emissions
benefits and presents the values considered in this direct final rule.
To monetize the benefits of reducing GHG emissions, this analysis
uses the interim estimates presented in the Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990 published in February 2021 by the IWG.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., social costs of greenhouse
gases ``SC-CO2''). These estimates represent the monetary
value '' of the net harm to society associated with a marginal increase
in emissions of these pollutants in a given year, or the benefit of
avoiding that increase. These estimates are intended to include (but
are not limited to) climate change-related changes in net agricultural
productivity, human health, property damages from increased flood risk,
disruption of energy systems, risk of conflict, environmental
migration, and the value of ecosystem services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this rulemaking in the absence
of the social cost of greenhouse gases. That is, the SC-CO2,
whether measured using the February 2021 interim estimates presented by
the Interagency Working Group on the Social Cost of Greenhouse Gases or
by another means, did not affect the rule ultimately proposed by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions using SC-GHG values that
were based on the interim values presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates under Executive Order 13990, published in February 2021 by
the IWG. The SC-GHG is the monetary value of the net harm to society
associated with a marginal increase in emissions in a given year, or
the benefit of avoiding that increase. In principle, the SC-GHG
includes the value of all climate change impacts, including (but not
limited to) changes in net agricultural productivity, human health
effects, property damage from increased flood risk and natural
disasters, disruption of energy systems, risk of conflict,
environmental migration, and the value of ecosystem services. The SC-
GHG therefore reflects the societal value of reducing emissions of the
gas in question by one metric ton. The SC-GHG is the theoretically
appropriate value to use in conducting benefit-cost analyses of
policies that affect CO2, N2O, and CH4
emissions. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agrees that the interim SC-GHG estimates
represent the most appropriate estimate of the SC-GHG for this rule,
which was developed using the interim estimates. DOE continues to
evaluate recent developments in the scientific literature, including
the updated SC-GHG estimates published by the EPA in December 2023
within their rulemaking on oil and natural gas sector sources.\97\ For
this rulemaking, DOE used these updated SC-GHG values to conduct a
sensitivity analysis of the value of GHG emissions reductions
associated with alternative standards for clothes dryers (see section
IV.L.1.c of this document).
---------------------------------------------------------------------------
\97\ Available at www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-final-rule-20231130.pdf.
---------------------------------------------------------------------------
The SC-GHG estimates presented here were developed over many years,
using peer-reviewed methodologies, a transparent process, the best
science available at the time of that process, and input from the
public. Specifically, in 2009, the IWG, which included DOE and other
executive branch agencies and offices, was established to ensure that
agencies were using the best available science and to promote
consistency in the SC-CO2 values used across agencies. The
IWG published SC-CO2 estimates in 2010 that were developed
from an ensemble of three widely cited integrated assessment models
(``IAMs'') that estimate global climate damages using highly aggregated
representations of climate processes and the global economy combined
into a single modeling framework. The three IAMs were run using a
common set of input assumptions in each model for future population,
economic, and CO2 emissions growth, as well as equilibrium
climate sensitivity--a measure of the globally averaged temperature
response to increased atmospheric CO2 concentrations. These
estimates were updated in 2013 based on new versions of each IAM. In
August 2016 the IWG published estimates of the social cost of methane
(``SC-CH4'') and nitrous oxide (``SC-N2O'') using
methodologies that are consistent with the methodology underlying the
SC-CO2 estimates. The modeling approach that extends the IWG
SC-CO2 methodology to non-CO2 GHGs has undergone
multiple stages of peer review. The SC-CH4 and SC-
N2O estimates were developed by Marten et al.\98\ and
underwent a standard double-blind peer review process prior to journal
publication. In 2015, as part of the response to public comments
received following a 2013 solicitation for comments on the SC-
CO2 estimates, the IWG announced a National Academies of
Sciences, Engineering, and Medicine review of the SC-CO2
estimates to offer advice on how to approach future updates to ensure
that the estimates continue to reflect the best available science and
methodologies. In January 2017, the National Academies released their
final report, Valuing Climate Damages: Updating Estimation
[[Page 18205]]
of the Social Cost of Carbon Dioxide, and recommended specific criteria
for future updates to the SC-CO2 estimates, a modeling
framework to satisfy the specified criteria, and both near-term updates
and longer-term research needs pertaining to various components of the
estimation process (National Academies, 2017).\99\ Shortly thereafter,
in March 2017, President Trump issued Executive Order (``E.O.'') 13783,
which disbanded the IWG, withdrew the previous TSDs, and directed
agencies to ensure SC-CO2 estimates used in regulatory
analyses are consistent with the guidance contained in OMB's Circular
A-4,\100\ ``including with respect to the consideration of domestic
versus international impacts and the consideration of appropriate
discount rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses
following E.O. 13783 used SC-GHG estimates that attempted to focus on
the U.S.-specific share of climate change damages as estimated by the
models and were calculated using two discount rates recommended by
Circular A-4, 3 percent and 7 percent. All other methodological
decisions and model versions used in SC-GHG calculations remained the
same as those used by the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------
\98\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold,
and A. Wolverton. Incremental CH4 and N2O
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
\99\ National Academies of Sciences, Engineering, and Medicine.
Valuing Climate Damages: Updating Estimation of the Social Cost of
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
\100\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars/ (last accessed April 20, 2023).
DOE used the prior version of Circular A-4 (2003) as a result of the
effective date of the new version.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of the National Academies (2017). The IWG was tasked
with first reviewing the SC-GHG estimates currently used in Federal
analyses and publishing interim estimates within 30 days of E.O. 13990
that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
rulemaking. E.O. 13990 instructs the IWG to undertake a fuller update
of the SC-GHG estimates by January 2022 that takes into consideration
the advice of the National Academies (2017) and other recent scientific
literature. The February 2021 SC-GHG TSD provides a complete discussion
of the IWG's initial review conducted under E.O. 13990. In particular,
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to
reflect the full impact of GHG emissions in multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O.
13783 fail to fully capture many climate impacts that affect the
welfare of U.S. citizens and residents, and those impacts are better
reflected by global measures of the SC-GHG. Examples of omitted effects
from the E.O. 13783 estimates include direct effects on U.S. citizens,
assets, and investments located abroad; supply chains, U.S. military
assets and interests abroad, and tourism; and spillover pathways such
as economic and political destabilization and global migration that can
lead to adverse impacts on U.S. national security, public health, and
humanitarian concerns. In addition, assessing the benefits of United
States GHG mitigation activities requires consideration of how those
actions may affect mitigation activities by other countries, as those
international mitigation actions will provide a benefit to United
States citizens and residents by mitigating climate impacts that affect
United States citizens and residents. A wide range of scientific and
economic experts have emphasized the issue of reciprocity as support
for considering global damages of GHG emissions. If the United States
does not consider impacts on other countries, it is difficult to
convince other countries to consider the impacts of their emissions on
the United States. The only way to achieve an efficient allocation of
resources for emissions reduction on a global basis--and so benefit the
United States and its citizens--is for all countries to base their
policies on global estimates of damages. As a member of the IWG
involved in the development of the February 2021 SC-GHG TSD, DOE agrees
with this assessment and, therefore, in this direct final rule DOE
centers attention on a global measure of SC-GHG. This approach is the
same as that taken in DOE regulatory analyses from 2012 through 2016. A
robust estimate of climate damages that accrue only to U.S. citizens
and residents does not currently exist in the literature. As explained
in the February 2021 TSD, existing estimates are both incomplete and an
underestimate of total damages that accrue to the citizens and
residents of the U.S. because they do not fully capture the regional
interactions and spillovers previously discussed, nor do they include
all of the important physical, ecological, and economic impacts of
climate change recognized in the climate change literature. As noted in
the February 2021 SC-GHG TSD, the IWG will continue to review
developments in the literature, including more robust methodologies for
estimating a U.S.-specific SC-GHG value, and explore ways to better
inform the public of the full range of carbon impacts. As a member of
the IWG, DOE will continue to follow developments in the literature
pertaining to this issue.
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies (2017) and the economic literature, the IWG continued to
conclude that the consumption rate of interest is the theoretically
appropriate discount rate in an intergenerational context \101\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
---------------------------------------------------------------------------
\101\ Interagency Working Group on Social Cost of Carbon, United
States Government. Technical Support Document: Social Cost of Carbon
for Regulatory Impact Analysis Under Executive Order 12866. 2010.
Available at www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 2022); Interagency Working
Group on Social Cost of Carbon, United States Government. Technical
Support Document: Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order 12866. 2013.
Available at www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed April 15, 2022);
Interagency Working Group on Social Cost of Greenhouse Gases, United
States Government. Technical Support Document: Technical Update on
the Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. August 2016. Available at www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last
accessed Jan. 18, 2022); Interagency Working Group on Social Cost of
Greenhouse Gases, United States Government. Addendum to Technical
Support Document on Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866: Application of the Methodology
to Estimate the Social Cost of Methane and the Social Cost of
Nitrous Oxide. August 2016. Available at www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last
accessed Jan. 18, 2022).
---------------------------------------------------------------------------
Furthermore, the damage estimates developed for use in the SC-GHG
are estimated in consumption-equivalent terms, and so an application of
OMB Circular A-4's guidance for regulatory analysis would then use the
consumption discount rate to calculate the SC-GHG. DOE agrees with this
assessment and will continue to follow
[[Page 18206]]
developments in the literature pertaining to this issue. DOE also notes
that while OMB Circular A-4, as published in 2003, recommends using 3-
percent and 7-percent discount rates as ``default'' values, Circular A-
4 also reminds agencies that ``different regulations may call for
different emphases in the analysis, depending on the nature and
complexity of the regulatory issues and the sensitivity of the benefit
and cost estimates to the key assumptions.'' On discounting, Circular
A-4 recognizes that ``special ethical considerations arise when
comparing benefits and costs across generations,'' and Circular A-4
acknowledges that analyses may appropriately ``discount future costs
and consumption benefits . . . at a lower rate than for
intragenerational analysis.'' In the 2015 Response to Comments on the
Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the
IWG members recognized that ``Circular A-4 is a living document'' and
``the use of 7 percent is not considered appropriate for
intergenerational discounting. There is wide support for this view in
the academic literature, and it is recognized in Circular A-4 itself.''
Thus, DOE concludes that a 7-percent discount rate is not appropriate
to apply to value the social cost of greenhouse gases in the analysis
presented in this document.
To calculate the present and annualized values of climate benefits,
DOE uses the same discount rate as the rate used to discount the value
of damages from future GHG emissions for internal consistency. That
approach to discounting follows the same approach that the February
2021 TSD recommends ``to ensure internal consistency--i.e., future
damages from climate change using the SC-GHG at 2.5 percent should be
discounted to the base year of the analysis using the same 2.5 percent
rate.'' DOE has also consulted the National Academies' 2017
recommendations on how SC-GHG estimates can ``be combined in RIAs with
other cost and benefits estimates that may use different discount
rates.'' The National Academies reviewed several options, including
``presenting all discount rate combinations of other costs and benefits
with [SC-GHG] estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue
to follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest, peer-
reviewed science to develop an updated set of SC-GHG estimates, it set
the interim estimates to be the most recent estimates developed by the
IWG prior to the group being disbanded in 2017. The estimates rely on
the same models and harmonized inputs and are calculated using a range
of discount rates. As explained in the February 2021 SC-GHG TSD, the
IWG has recommended that agencies revert to the same set of four values
drawn from the SC-GHG distributions based on three discount rates as
were used in regulatory analyses between 2010 and 2016 and were subject
to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to each) and then selected a set of four values
recommended for use in benefit-cost analyses: an average value
resulting from the model runs for each of three discount rates (2.5
percent, 3 percent, and 5 percent) plus a fourth value, selected as the
95th percentile of estimates based on a 3-percent discount rate. The
fourth value was included to provide information on potentially higher-
than-expected economic impacts from climate change. As explained in the
February 2021 SC-GHG TSD, with which DOE agrees, this update reflects
the immediate need to have an operational SC-GHG for use in regulatory
benefit-cost analyses and other applications that was developed using a
transparent process, peer-reviewed methodologies, and the science
available at the time of that process. Those estimates were subject to
public comment in dozens of proposed rulemakings as well as in a
dedicated public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent, or
lower.\102\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature,
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which interregional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 TSD, the IWG has recommended that, taken
together, the limitations suggest that the interim SC-GHG estimates
used in this direct final rule likely underestimate the damages from
GHG emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------
\102\ Interagency Working Group on Social Cost of Greenhouse
Gases (IWG), United States Government. Technical Support Document:
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
Under Executive Order 13990. February 2021. Available at
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/ (last accessed May 23, 2023).
---------------------------------------------------------------------------
DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this direct final rule are discussed
in the following sections, and the results of DOE's analyses estimating
the benefits of the reductions in emissions of these GHGs are presented
in section V.B.6 of this document.
a. Social Cost of Carbon
The SC-CO2 values used for this direct final rule were
based on the values developed for the IWG's February 2021 TSD, which
are shown in Table IV.22 in 5-year increments from 2020 to 2050. The
set of annual values that DOE used, which was adapted from estimates
published by EPA,\103\ is presented in appendix 14A of the direct final
rule TSD. These estimates are based on methods, assumptions, and
parameters identical with the 2020-2050 estimates published by the IWG
(which were based on EPA modeling) and include values for 2051 to 2070.
DOE expects additional climate benefits to accrue for any longer-life
consumer clothes dryers after 2070, but a lack of available SC-
CO2 estimates for
[[Page 18207]]
emissions years beyond 2070 prevents DOE from monetizing these
potential benefits in this analysis.
---------------------------------------------------------------------------
\103\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed Feb. 21, 2023).
---------------------------------------------------------------------------
For purposes of capturing the uncertainties involved in regulatory
impact analysis, DOE has determined it is appropriate to include all
four sets of SC-CO2 values, as recommended by the IWG.\104\
---------------------------------------------------------------------------
\104\ For example, the February 2021 TSD discusses how the
understanding of discounting approaches suggests that discount rates
appropriate for intergenerational analysis in the context of climate
change may be lower than 3 percent.
Table IV.22--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per Metric Ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate and statistic
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2020............................................ 14 51 76 152
2025............................................ 17 56 83 169
2030............................................ 19 62 89 187
2035............................................ 22 67 96 206
2040............................................ 25 73 103 225
2045............................................ 28 79 110 242
2050............................................ 32 85 116 260
----------------------------------------------------------------------------------------------------------------
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2022$ using the implicit price
deflator for gross domestic product (``GDP'') from the Bureau of
Economic Analysis. To calculate a present value of the stream of
monetary values, DOE discounted the values in each of the four cases
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
direct final rule were based on the values developed for the February
2021 TSD. Table IV.23 shows the updated sets of SC-CH4 and
SC-N2O estimates from the latest interagency update in 5-
year increments from 2020 to 2050. The full set of annual values used
is presented in appendix 14A of the direct final rule TSD. To capture
the uncertainties involved in regulatory impact analysis, DOE has
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG.
DOE derived values after 2050 using the approach described above for
the SC-CO2.
Table IV.23.--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020$ per Metric Ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-------------------------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
-------------------------------------------------------------------------------------------------------
Year 5% 3% 2.5% 3% 5% 3% 2.5% 3%
-------------------------------------------------------------------------------------------------------
95th 95th
Average Average Average percentile Average Average Average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................................ 670 1500 2000 3900 5800 18000 27000 48000
2025............................................ 800 1700 2200 4500 6800 21000 30000 54000
2030............................................ 940 2000 2500 5200 7800 23000 33000 60000
2035............................................ 1100 2200 2800 6000 9000 25000 36000 67000
2040............................................ 1300 2500 3100 6700 10000 28000 39000 74000
2045............................................ 1500 2800 3500 7500 12000 30000 42000 81000
2050............................................ 1700 3100 3800 8200 13000 33000 45000 88000
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE multiplied the CH4 and N2O emissions
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE
adjusted the values to 2022$ using the implicit price deflator for
gross domestic product (``GDP'') from the Bureau of Economic Analysis.
To calculate a present value of the stream of monetary values, DOE
discounted the values in each of the cases using the specific discount
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
In December 2023 EPA issued a new set of SC-GHG estimates (2023 SC-
GHG) in connection with a final rulemaking under the Clean Air
Act.\105\ For this rulemaking, DOE used these updated 2023 SC-GHG
values to conduct a sensitivity analysis of the value of GHG emissions
reductions associated with alternative standards for consumer clothes
dryers. This sensitivity analysis provides an expanded range of
potential climate benefits associated with amended standards. The final
year of EPA's new the 2023 SC-GHG estimates is 2080; therefore, DOE did
not monetize the climate benefits of GHG emissions reductions occurring
after 2080.
---------------------------------------------------------------------------
\105\ See www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------
The overall climate benefits are larger using when using the
higher, updated 2023 SC-GHG estimates, compared to the climate benefits
using the older IWG SC-GHG estimates. However, DOE's conclusion that
the standards are economically justified remains the same
[[Page 18208]]
regardless of which SC-GHG estimates are used.
The results of the sensitivity analysis are presented in appendix
14C of the direct final rule TSD.
2. Monetization of Other Emissions Impacts
For the direct final rule, DOE estimated the monetized value of
NOX and SO2 emissions reductions from electricity
generation using benefit-per-ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\106\ DOE used EPA's values
for PM2.5-related benefits associated with NOX
and SO2 and for ozone-related benefits associated with
NOX for 2025 and 2030, and 2040, calculated with discount
rates of 3 percent and 7 percent. DOE used linear interpolation to
define values for the years not given in the 2025 to 2040 period; for
years beyond 2040, the values are held constant. DOE combined the EPA
benefit-per-ton estimates with regional information on electricity
consumption and emissions to define weighted average national values
for NOX and SO2 as a function of sector (see
appendix 14B of the direct final rule TSD).
---------------------------------------------------------------------------
\106\ Estimating the Benefit-per-Ton of Reducing Directly-
Emitted PM2.5, PM2.5 Precursors and Ozone
Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------
DOE also estimated the monetized value of NOX and
SO2 emissions reductions from site use of natural gas in
consumer clothes dryers using benefit-per-ton estimates from the EPA's
Benefits Mapping and Analysis Program. Although none of the sectors
covered by EPA refers specifically to residential and commercial
buildings, the sector called ``area sources'' would be a reasonable
proxy for residential and commercial buildings.\107\ The EPA document
provides high and low estimates for 2025 and 2030 at 3- and 7-percent
discount rates.\108\ DOE used the same linear interpolation and
extrapolation as it did with the values for electricity generation.
---------------------------------------------------------------------------
\107\ ``Area sources'' represents all emission sources for which
states do not have exact (point) locations in their emissions
inventories. Because exact locations would tend to be associated
with larger sources, ``area sources'' would be fairly representative
of small, dispersed sources like homes and businesses.
\108\ ``Area sources'' are a category in the 2018 document from
EPA but are not used in the 2021 document cited above. See
www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
For this direct final rule, DOE considered comments it had received
regarding its monetization emission impact analysis presented in the
August 2022 NOPR. The approach used for this direct final rule is
largely the same as the approach DOE had used for the August 2022 NOPR
analysis.
In response to the August 2022 NOPR, AHAM disagreed with DOE's use
of both the social cost of carbon (``SCC'') and other monetization of
emissions reductions benefits in its analysis of the factors that EPCA
requires DOE to balance in determining the appropriate standard, as
these values are highly subjective and ever-changing. (AHAM, No. 46 at
p. 14)
As stated in section III.E.1.f of this document, DOE maintains that
environmental and public health benefits associated with more efficient
use of energy, including those connected to global climate change, are
important to take into account when considering the need for national
energy conservation, which is one of the factors that EPCA requires DOE
to evaluate in determining whether a potential energy conservation
standard is economically justified. In addition, Executive Order 13563,
which was reaffirmed on January 21, 2021, stated that each agency must,
among other things, ``select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity).'' For these reasons, DOE
includes monetized emissions reductions in its evaluation of potential
standard levels. As previously stated, however, DOE would reach the
same conclusion presented in this rulemaking in the absence of the SC-
GHG. At the Recommended TSL, the average LCC savings for all product
classes is positive. In addition, the FFC national energy savings are
significant and the NPV of consumer benefits is positive using both a
3-percent and 7-percent discount rate. Even when measured at the more
conservative discount rate of 7 percent, the NPV of consumer benefits
is over 64 times higher than the maximum estimated manufacturers' loss
in INPV.
M. Utility Impact Analysis
The utility impact analysis estimates the changes in installed
electrical capacity and generation projected to result for each
considered TSL. The analysis is based on published output from the NEMS
associated with AEO2023. NEMS produces the AEO Reference case, as well
as a number of side cases that estimate the economy-wide impacts of
changes to energy supply and demand. For the current analysis, impacts
are quantified by comparing the levels of electricity sector
generation, installed capacity, fuel consumption, and emissions in the
AEO2023 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters 13 and 15 of the
direct final rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
The utility analysis also estimates the impact on gas utilities in
terms of projected changes in natural gas deliveries to consumers for
each TSL.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a standard. Employment impacts from new or amended
energy conservation standards include both direct and indirect impacts.
Direct employment impacts are any changes in the number of employees of
manufacturers of the products subject to standards, their suppliers,
and related service firms. The MIA addresses those impacts. Indirect
employment impacts are changes in national employment that occur due to
the shift in expenditures and capital investment caused by the purchase
and operation of more efficient appliances. Indirect employment impacts
from standards consist of the net jobs created or eliminated in the
national economy, other than in the manufacturing sector being
regulated, caused by (1) reduced spending by consumers on energy, (2)
reduced spending on new energy supply by the utility industry, (3)
increased consumer spending on the products to which the new standards
apply and other goods and services, and (4) the effects of those three
factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (``BLS''). BLS regularly publishes its estimates of
the number of
[[Page 18209]]
jobs per million dollars of economic activity in different sectors of
the economy, as well as the jobs created elsewhere in the economy by
this same economic activity. Data from BLS indicate that expenditures
in the utility sector generally create fewer jobs (both directly and
indirectly) than expenditures in other sectors of the economy.\109\
There are many reasons for these differences, including wage
differences and the fact that the utility sector is more capital-
intensive and less labor-intensive than other sectors. Energy
conservation standards have the effect of reducing consumer utility
bills. Because reduced consumer expenditures for energy likely lead to
increased expenditures in other sectors of the economy, the general
effect of efficiency standards is to shift economic activity from a
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS
data suggest that net national employment may increase due to shifts in
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------
\109\ See U.S. Department of Commerce--Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (``RIMS II''). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.osti.gov/biblio/7281092 (last accessed July 1, 2021).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this direct final rule using an input/output model
of the U.S. economy called Impact of Sector Energy Technologies version
4 (``ImSET'').\110\ ImSET is a special-purpose version of the ``U.S.
Benchmark National Input-Output'' (``I-O'') model, which was designed
to estimate the national employment and income effects of energy-saving
technologies. The ImSET software includes a computer-based I-O model
having structural coefficients that characterize economic flows among
187 sectors most relevant to industrial, commercial, and residential
building energy use.
---------------------------------------------------------------------------
\110\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User's Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563. Available at www.pnnl.gov/main/publications/external/technical_reports/PNNL-24563.pdf (last
accessed April 26, 2023).
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may overestimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2027-2033) where these uncertainties are
reduced.\111\ For more details on the employment impact analysis, see
chapter 16 of the direct final rule TSD.
---------------------------------------------------------------------------
\111\ The near-term timeframes for the Recommended TSL are 2028-
2034.
---------------------------------------------------------------------------
O. Regulatory Impact Analysis
For any regulatory action that the Administrator of the Office of
Information and Regulatory Affairs (``OIRA'') within OMB determines is
a significant regulatory action under section 3(f)(1) of E.O. 12866,
section 6(a)(3)(C) of E.O. 12866 requires Federal agencies to provide
an assessment, including the underlying analysis, of costs and benefits
of potentially effective and reasonably feasible alternatives to the
planned regulation, identified by the agencies or the public (including
improving the current regulation and reasonably viable non-regulatory
actions), and an explanation why the planned regulatory action is
preferable to the identified potential alternatives. 58 FR 51735,
51741. As discussed further in section VI.A of this document, OIRA has
determined that this final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866, as amended by E.O. 14094. Accordingly, DOE conducted a
regulatory impact analysis (``RIA'') for this direct final rule.
As part of the RIA, DOE identifies major alternatives to standards
that represent feasible policy options to reduce the energy and water
consumption of the covered product. DOE evaluates each alternative in
terms of its ability to achieve significant energy and water savings at
a reasonable cost, and compares the effectiveness of each alternative
to the effectiveness of the finalized standard. DOE recognizes that
voluntary or other non-regulatory efforts by manufacturers, utilities,
and other interested parties can substantially affect energy and water
efficiency or reduce energy and water consumption. DOE bases its
assessment on the recorded impacts of any such initiatives to date, but
also considers information presented by interested parties regarding
the impacts current initiatives may have in the future. Further details
regarding the RIA are provided in chapter 17 of the direct final rule
TSD.
P. Other Comments
As discussed previously, DOE considered relevant comments, data,
and information obtained during its own rulemaking process in
determining whether the recommended standards from the Joint Agreement
are in accordance with 42 U.S.C. 6295(o). And while some of those
comments were directed at specific aspects of DOE's analysis of the
Joint Agreement under 42 U.S.C. 6295(o), others were more generally
applicable to DOE's energy conservation standards rulemaking program as
a whole. The ensuing discussion focuses on these general comments
concerning energy conservation standards issued under EPCA.
The National Academies of Sciences, Engineering, and Medicine
(``NAS'') periodically appoint a committee to peer review the
assumptions, models, and methodologies that DOE uses in setting energy
conservation standards for covered products and equipment. The most
recent such peer review was conducted in a series of meetings in 2020,
and NAS issued the report \112\ in 2021 detailing its findings and
recommendations on how DOE can improve its analyses and align them with
best practices for cost-benefit analysis.
---------------------------------------------------------------------------
\112\ Review of Methods Used by the U.S. Department of Energy in
Setting Appliance and Equipment Standards (2021), available at
nap.nationalacademies.org/25992.
---------------------------------------------------------------------------
AHAM recommended that DOE adopt the recommendations of the NAS
report and incorporate the Regulatory Impact Analysis methodology of
Office of Management and Budget (``OMB'') Circular A-4 and start with a
more robust assessment of private market failures and alternatives to
minimum standards that includes a robust identification and assessment
of market failures by market segment. (AHAM, No. 46 at pp. 12-13)
AGA and APGA also commented that DOE should implement
recommendations in the NAS report, specifically: appliance standards
should be economically justified or based on significant failures of
private markets or irrational consumer behavior (Recommendation 2-2);
the Cost Analysis segment of the Engineering Analysis should be
expanded to include ranges of costs, patterns of consumption, diversity
factors, energy peak demand, and variance regarding environmental
factors (Recommendation 3-5); DOE should put greater weight on ex post
and market-based evidence of markups to project a more realistic range
of effects of a standard on prices (Recommendation 4-1); DOE should
place greater emphasis on providing an argument for
[[Page 18210]]
the plausibility and magnitude of any market failure related to the
energy efficiency gap in its analyses (Recommendation 4-13); and DOE
should give greater attention to a broader set of potential market
failures on the supply side, including how standards might reduce the
number of competing firms, and also how standards might impact price
discrimination, technological diffusion, and collusion (Recommendation
4-14). (APGA et al., No. 47 at pp. 2-3)
The rulemaking process for standards of covered products and
equipment are outlined at appendix A to subpart C of 10 CFR part 430,
and DOE periodically examines and revises these provisions in separate
rulemaking proceedings. The recommendations in the NAS report cited by
commenters on the August 2022 NOPR, which pertain to the processes by
which DOE analyzes energy conservation standards, will be considered in
a separate rulemaking considering all product categories.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
consumer clothes dryers. It addresses the TSLs examined by DOE, the
projected impacts of each of these levels if adopted as energy
conservation standards for consumer clothes dryers, and the standards
levels that DOE is adopting in this direct final rule. Additional
details regarding DOE's analyses are contained in the direct final rule
TSD supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential amended standards for
products and equipment by grouping individual efficiency levels for
each class into TSLs. Use of TSLs allows DOE to identify and consider
manufacturer cost interactions between the product classes, to the
extent that there are such interactions, and market cross elasticity
from consumer purchasing decisions that may change when different
standard levels are set.
In the analysis conducted for this direct final rule, DOE analyzed
the benefits and burdens of six TSLs for consumer clothes dryers. DOE
developed TSLs that combine efficiency levels for each analyzed product
class/category using similar technologies and/or efficiencies and
having roughly comparable equipment availability. DOE presents the
results for the TSLs in this document, while the results for all
efficiency levels that DOE analyzed are in the direct final rule TSD.
DOE presents the results for the TSLs in this document, while the
results for all efficiency levels that DOE analyzed are in the direct
final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for consumer clothes dryers. For the vented gas compact
product class, all TSLs represent the baseline efficiency level because
there are no higher efficiency levels, and this level corresponds to
the efficiency level for vented gas compact clothes dryers in the
Recommended TSL in the Joint Agreement. For all remaining product
classes, the TSLs are defined as follows. TSL 6 represents the maximum
technologically feasible (``max-tech'') energy efficiency. TSL 5
represents the maximum national energy savings with maximum positive
NPV. TSL 4 represents the maximum national energy savings with simple
PBP less than 4 years. TSL 3--which corresponds to the Recommended TSL
in the Joint Agreement--represents the intermediate efficiency level
between TSL 2 and TSL 4. TSL 2 corresponds to the efficiency level with
high-speed spin for ventless electric combination washer-dryer and
automatic termination control system for all other product classes. TSL
1 corresponds to the efficiency level with electronic controls.
Table V.1--Trial Standard Levels for Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency level and
representative CEFD2 (lb/kWh)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric, Standard.............. 1 (2.68).......... 3 (3.27).......... 4 (3.93).......... 5 (4.21).......... 7 (7.39).......... 7 (7.39)
Electric, Compact (120V)........ 1 (3.15).......... 3 (4.28).......... 4 (4.33).......... 4 (4.33).......... 4 (4.33).......... 6 (6.37)
Vented Electric, Compact (240V). 1 (2.44).......... 3 (3.30).......... 4 (3.57).......... 4 (3.57).......... 5 (3.82).......... 6 (3.91)
Vented Gas, Standard............ 1 (2.44).......... 2 (3.00).......... 3 (3.48).......... 3 (3.48).......... 4 (3.83).......... 4 (3.83)
Vented Gas, Compact............. Baseline (2.02)... Baseline (2.02)... Baseline (2.02)... Baseline (2.02)... Baseline (2.02)... Baseline (2.02)
Ventless Electric, Compact Baseline (2.03)... 1 (2.68).......... 1 (2.68).......... 1 (2.68).......... 1 (2.68).......... 2 (6.80)
(240V).
Ventless Electric, Combination Baseline (2.27)... 1 (2.33).......... 1 (2.33).......... 1 (2.33).......... 1 (2.33).......... 2 (4.01)
Washer-Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE constructed the TSLs for this direct final rule to include
efficiency levels (``ELs'') representative of ELs with similar
characteristics (i.e., using similar technologies and/or efficiencies,
and having roughly comparable equipment availability). The use of
representative ELs provided for greater distinction between the TSLs.
While representative ELs were included in the TSLs, DOE considered all
ELs as part of its analysis but did not include all ELs in the
TSLs.\113\
---------------------------------------------------------------------------
\113\ Efficiency levels that were analyzed for this final rule
are discussed in section IV.C.1 of this document. Results by
efficiency level are presented in the final rule TSD chapters 8 and
10.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on consumers of consumer clothes
dryers by looking at the effects that potential amended standards at
each TSL would have on the LCC and PBP. DOE also examined the impacts
of potential standards on selected consumer subgroups. These analyses
are discussed in the following sections.
a. Life-Cycle Cost and Payback Period
In general, higher efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs) and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter 8 of the
[[Page 18211]]
direct final rule TSD provides detailed information on the LCC and PBP
analyses.
Table V.2 through Table V.13 show the LCC and PBP results for the
TSLs considered for each product class. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, the impacts are measured relative to the
efficiency distribution in the in the no-new-standards case in the
compliance year (see section IV.F.8 of this document). Because some
consumers purchase products with higher efficiency in the no-new-
standards case, the average savings are less than the difference
between the average LCC of the baseline product and the average LCC at
each TSL. The savings refer only to consumers who are affected by a
standard at a given TSL. Those who already purchase a product with
efficiency at or above a given TSL are not affected. Consumers for whom
the LCC increases at a given TSL experience a net cost.
Table V.2--Average LCC and PBP Results for Electric Standard Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ -------------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.20 Baseline..................... $656 $111 $1,251 $1,907 ................ 14
1.......................................... 2.68 1............................ 666 94 1,082 1,748 0.5 14
2.......................................... 3.27 3............................ 672 79 922 1,594 0.5 14
3 *........................................ 3.93 4............................ 678 67 802 1,480 0.6 14
4.......................................... 4.21 5............................ 756 64 759 1,515 2.1 14
5, 6....................................... 7.39 7............................ 1,055 42 514 1,569 5.8 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Electric Standard Consumer Clothes
Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.68 1 $150 1.2
2................................... 3.27 3 170 0.9
3 **................................ 3.93 4 252 0.9
4................................... 4.21 5 100 48.0
5, 6................................ 7.39 7 41 63.1
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.4--Average LCC and PBP Results for Electric Compact (120V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ -------------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.36 Baseline..................... $683 $40 $325 $1,136 ................ 14
1.......................................... 3.15 1............................ 695 32 257 1,082 1.5 14
2.......................................... 4.28 3............................ 704 25 199 1,017 1.5 14
3 *........................................ 4.33 4............................ 712 25 198 1,023 2.2 14
4, 5....................................... 4.33 4............................ 715 25 198 1,026 2.2 14
6.......................................... 6.37 6............................ 1,057 19 146 1,301 18.1 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Electric Compact (120V) Consumer
Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 3.15 1 $53 4.8
2................................... 4.28 3 83 5.1
** 3................................ 4.33 4 66 21.4
4, 5................................ 4.33 4 66 21.7
[[Page 18212]]
6................................... 6.37 6 (209) 90.9
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.6--Average LCC and PBP Results for Electric Compact (240V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ -------------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.00 Baseline..................... $685 $47 $541 $1,226 ................ 14
1.......................................... 2.44 1............................ 698 41 490 1,187 2.1 14
2.......................................... 3.30 3............................ 707 32 394 1,101 1.5 14
3 *........................................ 3.57 4............................ 714 30 375 1,090 2.0 14
4.......................................... 3.57 4............................ 718 30 374 1,092 2.0 14
5.......................................... 3.82 5............................ 802 29 357 1,160 6.6 14
6.......................................... 3.91 6............................ 1,059 29 352 1,412 20.4 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Vented Electric Compact (240V) Consumer
Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-Cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.44 1 $38 5.7
2................................... 3.30 3 89 4.6
3 **................................ 3.57 4 90 12.4
4................................... 3.57 4 90 12.6
5................................... 3.82 5 22 60.7
6................................... 3.91 6 (230) 92.8
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.8--Average LCC and PBP Results for Vented Gas Standard Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ ---------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period lifetime
Installed cost operating cost operating cost LCC (years) (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.00 Baseline........................ $794 $56 $668 $1,461 .............. 14
1............................................. 2.44 1............................... 810 50 607 1,417 2.5 14
2............................................. 3.00 2............................... 813 41 511 1,324 1.3 14
3 *........................................... 3.48 3............................... 825 36 465 1,291 1.9 14
4............................................. 3.48 3............................... 830 37 464 1,293 1.9 14
5, 6.......................................... 3.83 4............................... 904 34 429 1,333 5.0 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
[[Page 18213]]
Table V.9--Average LCC Savings Relative to the No-New-Standards Case for Vented Gas Standard Consumer Clothes
Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.44 1 $48 2.7%
2................................... 3.00 2 112 1.7
3 **................................ 3.48 3 102 7.1
4................................... 3.48 3 102 7.0
5, 6................................ 3.83 4 13 68.7
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.10--Average LCC and PBP Results for Ventless Electric Compact (240V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ -------------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.03 Baseline..................... $1,020 $41 $475 $1,495 ................ 14
1.......................................... 2.03 Baseline..................... 1,020 41 475 1,495 ................ 14
2, 4, 5.................................... 2.68 1............................ 1,024 31 368 1,392 0.4 14
3 *........................................ 2.68 1............................ 1,018 30 370 1,387 0.4 14
6.......................................... 6.80 2............................ 1,346 12 167 1,513 11.4 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.11--Average LCC Savings Relative to the No-New-Standards Case for Ventless Electric Compact (240V)
Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.03 Baseline .................... ....................
2, 4, 5............................. 2.68 1 99 0.0
3 **................................ 2.68 1 99 0.0
6................................... 6.80 2 (102) 58.6
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.12--Average LCC and PBP Results for Ventless Electric Combination Washer-Dryer Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
CEFD2 (lb/ -------------------------------------------------------------------- Simple payback Average
TSL kWh) Efficiency level First year's Lifetime period (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................... 2.27 Baseline..................... $1,335 $37 $445 $1,780 ................ 14
2, 4, 5.................................... 2.33 1............................ 1,335 36 435 1,769 0.0 14
3 *........................................ 2.33 1............................ 1,327 36 436 1,763 0.0 14
6.......................................... 4.01 2............................ 2,031 22 275 2,305 46.3 14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
[[Page 18214]]
Table V.13--Average LCC Savings Relative to the No-New-Standards Case for Ventless Electric Combination Washer-
Dryer Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
CEFD2 (lb/ Efficiency Percentage of
TSL kWh) level Average LCC savings consumers that
* (2022$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.27 Baseline .................... ....................
2, 4, 5............................. 2.33 1 $10 0.0
3 **................................ 2.33 1 11 0.0
6................................... 4.01 2 (531) 95.0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and senior-only households.
Table V.14 through Table V.25 compare the average LCC savings, PBP,
percent of consumers negatively impacted, and percent of consumers
positively impacted at each EL for the consumer subgroups, along with
corresponding values for the entire residential consumer sample for
product classes with a sufficient sample size. In most cases, the
average LCC savings and PBP for low-income households and senior-only
households at the considered ELs are not substantially different from
the average for all households. Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP results for the subgroups.
Table V.14--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Electric Standard Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $148 $110 $150 0.3 0.7 0.5
3....................................... 2 166 128 170 0.3 0.6 0.5
4....................................... ** 3 245 190 252 0.3 0.8 0.6
5....................................... 4 127 58 100 1.1 2.8 2.1
7....................................... 5, 6 180 (56) 41 3.2 7.6 5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.15--Comparison of Percentages of Impacted Consumers * for Consumer Subgroups and All Households:
Electric Standard Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
EL TSL households households All households
(%) (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 1.3 1.4 1.2
3............................................... 2 1.0 1.1 0.9
4............................................... ** 3 0.8 1.1 0.9
5............................................... 4 26.6 53.6 48.0
7............................................... 5, 6 34.9 71.6 63.1
----------------------------------------------------------------------------------------------------------------
* Percentage of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.16--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Electric Compact (120V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $67 $34 $53 0.7 2.1 1.5
3....................................... 2 96 61 83 0.7 1.9 1.5
4....................................... ** 3 84 46 66 1.0 2.9 2.2
4....................................... 4, 5 83 46 66 1.0 2.9 2.2
6....................................... 6 (23) (243) (209) 8.5 23.4 18.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
[[Page 18215]]
Table V.17--Comparison of Percentages of Impacted Consumers * for Consumer Subgroups and All Households:
Electric Compact (120V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income
EL TSL households Senior-only All households (%)
(%) households (%)
----------------------------------------------------------------------------------------------------------------
1................................... 1 4.0 5.0 4.8
3................................... 2 3.8 5.6 5.1
4................................... ** 3 12.2 24.8 21.4
4................................... 4, 5 12.2 25.0 21.7
6................................... 6 43.9 94.9 90.9
----------------------------------------------------------------------------------------------------------------
* Percentage of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.18--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Vented Electric Compact (240V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $51 $22 $38 1.0 2.8 2.1
3....................................... 2 102 66 89 0.7 2.0 1.5
4....................................... ** 3 109 65 90 1.0 2.6 2.0
4....................................... 4 109 64 90 1.0 2.6 2.0
5....................................... 5 83 (7) 22 3.1 8.5 6.6
6....................................... 6 (45) (260) (230) 9.6 26.5 20.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.19--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Vented
Electric Compact (240V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income
EL TSL households Senior-only All households (%)
(%) households (%)
----------------------------------------------------------------------------------------------------------------
1................................... 1 4.5 6.0 5.7
3................................... 2 3.7 5.0 4.6
4................................... ** 3 7.4 15.1 12.4
4................................... 4 7.5 15.3 12.6
5................................... 5 30.0 68.5 60.7
6................................... 6 44.9 96.1 92.8
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.20--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Vented Gas Standard Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $57 $33 $48 1.3 3.3 2.5
2....................................... 2 117 91 112 0.7 1.6 1.3
3....................................... ** 3 113 81 102 1.0 2.4 1.9
3....................................... 4 113 81 102 1.0 2.4 1.9
4....................................... 5, 6 54 (5) 13 2.7 6.3 5.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.21--Comparison of Percentages of Impacted Consumers * for Consumer Subgroups and All Households: Vented
Gas Standard Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
EL TSL households households All households
(%) (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 2.4 3.0 2.7
2............................................... 2 1.6 1.7 1.7
3............................................... ** 3 4.8 8.9 7.1
3............................................... 3, 4 4.8 8.8 7.0
[[Page 18216]]
4............................................... 5, 6 35.9 74.5 68.7
----------------------------------------------------------------------------------------------------------------
* Percentage of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.22--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Ventless Electric Compact (240V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................... 1 .............. .............. .............. .............. .............. ..............
1....................................... 2, 4, 5 $108 $80 $99 0.2 0.5 0.4
1....................................... ** 3 108 80 99 0.2 0.5 0.4
2....................................... 6 64 (147) (102) 5.4 14.5 11.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.23--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Ventless
Electric Compact (240V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
EL TSL households households All households
(%) (%) (%)
----------------------------------------------------------------------------------------------------------------
0............................................... 1 .............. .............. ..............
1............................................... 2, 4, 5 0.0 0.0 0.0
2............................................... ** 3 0.0 0.0 0.0
2............................................... 6 27.8 63.4 58.6
----------------------------------------------------------------------------------------------------------------
* Percentage of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
Table V.24--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Ventless Electric Combination Washer-Dryer Consumer Clothes
Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2022$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................... 1 .............. .............. .............. .............. .............. ..............
1....................................... 2, 4, 5 $11 $8 $10 0.0 0.0 0.0
1....................................... ** 3 11 8 11 0.0 0.0 0.0
2....................................... 6 (186) (565) (531) 22.0 58.6 46.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values are denoted in parentheses.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
Table V.25--Comparison of Percentages of Impacted Consumers * for Consumer Subgroups and All Households:
Ventless Electric Combination Washer-Dryer Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
EL TSL households households All households
(%) (%) (%)
----------------------------------------------------------------------------------------------------------------
0............................................... 1 .............. .............. ..............
1............................................... 2, 4, 5 0.0 0.0 0.0
1............................................... ** 3 0.0 0.0 0.0
2............................................... 6 44.8 96.2 95.0
----------------------------------------------------------------------------------------------------------------
* Percentage of impacted consumers indicates households with net cost.
** All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of
2028.
[[Page 18217]]
c. Rebuttable Presumption Payback
As discussed in section II.A of this document, EPCA establishes a
rebuttable presumption that an energy conservation standard is
economically justified if the increased purchase cost for a product
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. In calculating a
rebuttable presumption payback period for each of the considered TSLs,
DOE used discrete values, and, as required by EPCA, based the energy
use calculation on the DOE test procedures for consumer clothes dryers.
In contrast, the PBPs presented in section V.B.1.a of this document
were calculated using distributions that reflect the range of energy
use in the field.
Table V.26 presents the rebuttable presumption payback periods for
the considered TSLs for consumer clothes dryers. While DOE examined the
rebuttable presumption criterion, it considered whether the standard
levels considered for this rule are economically justified through a
more detailed analysis of the economic impacts of those levels,
pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range
of impacts to the consumer, manufacturer, Nation, and environment. The
results of that analysis serve as the basis for DOE to definitively
evaluate the economic justification for a potential standard level,
thereby supporting or rebutting the results of any preliminary
determination of economic justification.
Table V.26--Rebuttable Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -----------------------------------------------------------------------------------------------
1 2 3* 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(years)
-----------------------------------------------------------------------------------------------
Electric, Standard...................................... 0.4 0.3 0.4 1.5 4.1 4.1
Electric, Compact (120 V)............................... 1.0 1.0 1.6 1.6 1.6 13.0
Vented Electric, Compact (240 V)........................ 3.2 1.0 1.4 1.4 4.6 14.2
Vented Gas, Standard.................................... 3.1 2.0 2.9 2.8 7.8 7.8
Ventless Electric, Compact (240 V)...................... .............. 0.3 0.3 0.3 0.3 8.8
Ventless Electric, Combination Washer-Dryer............. .............. 0.0 0.0 0.0 0.0 33.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
* All TSLs except TSL 3 (the Recommended TSL) have a compliance year of 2027. TSL 3 has a compliance year of 2028.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of consumer clothes dryers. The
next section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the direct final rule TSD explains the
analysis in further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard. The
following tables summarize the estimated financial impacts (represented
by changes in INPV) of potential amended energy conservation standards
on manufacturers of consumer clothes dryers, as well as the conversion
costs that DOE estimates manufacturers of consumer clothes dryers would
incur at each TSL.
The impacts of potential amended energy conservation standards were
analyzed under two scenarios: (1) the preservation of gross margin
percentage; and (2) the preservation of operating profit as discussed
in section IV.J.2.d of this document. In the preservation-of-gross-
margin-percentage scenario, DOE applied a gross margin percentage of 21
percent for all product classes and all efficiency levels in the
standards case.\114\ This scenario assumes that a manufacturer's per-
unit dollar profit would increase as MPCs increase in the standards
cases. DOE models this scenario as an upper bound to industry
profitability under an energy conservation standard.
---------------------------------------------------------------------------
\114\ The gross margin percentage of 21 percent is based on a
manufacturer markup of 1.26.
---------------------------------------------------------------------------
In the preservation-of-operating-profit scenario, manufacturers do
not earn additional operating profit when compared to the no-new-
standards case scenario. While manufacturers make the necessary upfront
investments required to produce compliant products, per-unit operating
profit does not change in absolute dollars. DOE models this scenario as
the lower bound to industry profitability under an energy conservation
standard.
Each of the modeled scenarios results in a unique set of cash flows
and corresponding INPV for each TSL. INPV is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (30 years from the analyzed compliance year).\115\ The
``change in INPV'' results refer to the difference in industry value
between the no-new-standards case and standards case at each TSL. To
provide perspective on the short-run cash-flow impact, DOE includes a
comparison of free cash flow between the no-new-standards case and the
standards case at each TSL in the year before amended standards would
take effect. This figure provides an understanding of the magnitude of
the required conversion costs relative to the cash flow generated by
the industry in the no-new-standards case.
---------------------------------------------------------------------------
\115\ The analysis period ranges from 2024-2056 for the no-new-
standards case and all TSLs, except for TSL 3 (the Recommended TSL).
The analysis period for TSL 3 ranges from 2024-2057 due to the 2028
compliance year.
---------------------------------------------------------------------------
Conversion costs are one-time investments for manufacturers to
bring their manufacturing facilities and product designs into
compliance with potential amended standards. As described in section
IV.J.2.c of this document, conversion cost investments occur between
the year of publication of the direct final rule and the year by which
manufacturers must comply with the new standard. The conversion costs
can have a significant impact on short-term cash flow within the
industry and generally result in lower free cash flow in the period
between publication of the direct final rule and the compliance date of
potential amended standards. Conversion costs are independent of the
manufacturer markup scenarios and are not presented as a range in this
analysis.
[[Page 18218]]
Table V.27--Manufacturer Impact Analysis Results for Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
No-new- standards
Units case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2022$ millions..... 2,115.4 2,080.3 to 2,084.3 2,061.1 to 2,069.5 1,971.2 to 1,995.8 1,501.9 to 1,724.8 679.9 to 1,800.8.. 604.3 to 1,753.5
Change in INPV *................ %.................. ................. (1.7) to (1.5).... (2.6) to (2.2).... (6.8) to (5.7).... (29.0) to (18.5).. (67.9) to (14.9).. (71.4) to (17.1)
Free Cash Flow (2026) **........ 2022$ millions..... *** 136.7 119.2............. 109.7............. 61.2.............. (153.7)........... (496.0)........... (531.4)
Change in Free Cash Flow (2026) %.................. ................. (12.8)............ (19.8)............ (55.2)............ (212.5)........... (462.9)........... (488.8)
**.
Product Conversion Costs........ 2022$ millions..... ................. 27.3.............. 37.6.............. 51.7.............. 87.7.............. 122.6............. 128.2
Capital Conversion Costs........ 2022$ millions..... ................. 18.6.............. 31.9.............. 128.9............. 579.7............. 1,314.3........... 1,388.8
Total Conversion Costs.......... 2022$ millions..... ................. 45.8.............. 69.5.............. 180.7............. 667.5............. 1,436.9........... 1,516.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative values.
** TSL 3 (the Recommended TSL) represents the change in free cash flow in 2027, a year before the 2028 compliance date.
*** In 2027, the no-new-standards free cash flow is $136.6 million.
The cash flow results discussion below refers to product classes as
defined in Table IV.1 in section IV.A.1 of this document. It also
refers to the efficiency levels and associated design options
designated in Table IV.5 through Table IV.10 in section IV.C.1.b of
this document.
At TSL 1, the standard reflects efficiency levels with electronic
controls for all product classes. The change in INPV is expected to
range from -1.7 to -1.5 percent. At this level, free cash flow is
estimated to decrease by 12.8 percent compared to the no-new-standards
case value of $136.7 million in the year 2026, the year before the 2027
standards year. DOE's shipments analysis estimates approximately 85
percent of current shipments meet this level.\116\
---------------------------------------------------------------------------
\116\ Current shipments calculations relied on shipments in 2024
(the reference year).
---------------------------------------------------------------------------
The design options DOE analyzed include implementing electronic
controls. For electric standard, electric compact (120V), vented
electric compact (240V), and vented gas standard, TSL 1 corresponds to
EL 1. For ventless electric compact (240V) and ventless electric
combination washer-dryer, TSL 1 corresponds to the baseline
CEFD2. Capital conversion costs may be necessary for
additional tooling for timers and electronics. Product conversion costs
may be necessary for developing, sourcing, and testing electronics
(e.g., safety, performance, and durability tests). DOE does not expect
industry to incur re-flooring costs at this level since the necessary
enhancements could be done ``behind the hinge,'' incorporating the
design changes in a manner that does not impact product appearance. DOE
does not expect industry to incur conversion costs related to the
ventless electric compact (240V) or ventless electric combination
washer-dryer as the efficiency levels would remain at baseline. DOE
estimates capital conversion costs of $18.6 million and product
conversion costs of $27.3 million. Conversion costs total $45.8
million.
At TSL 1, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 0.3 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given this relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year the standard takes effect. In the preservation-of-gross-
margin-percentage scenario, the slight increase in cash flow from the
higher MSP is outweighed by the $45.8 million in conversion costs,
causing a slightly negative change in INPV at TSL 1 under this
scenario. Under the preservation-of-operating-profit scenario,
manufacturers earn the same per-unit operating profit as would be
earned in the no-new-standards case, but manufacturers do not earn
additional profit from their investments. In this scenario, the
manufacturer markup decreases in 2028, the year after the analyzed 2027
compliance year. This reduction in the manufacturer markup and the
$45.8 million in conversion costs incurred by manufacturers cause a
slightly negative change in INPV at TSL 1 under the preservation-of-
operating-profit scenario.
At TSL 2, the standard reflects efficiency levels with more
advanced automatic termination controls for electric standard, electric
compact (120V), vented electric compact (240V), vented gas standard,
and ventless electric compact (240V), and high-speed spin for ventless
electric combination washer-dryer. The change in INPV is expected to
range from -2.6 to -2.2 percent. At this level, free cash flow is
estimated to decrease 19.8 percent compared to the no-new-standards
case value of $136.7 million in the year 2026, the year before the 2027
standards year. DOE's shipments analysis estimates approximately 58
percent of current shipments meet this level.
The design options for electric standard, electric compact (120V),
vented electric compact (240V), vented gas standard, and ventless
electric compact (240V) include implementing electronic controls,
optimized heating systems, and more advanced automatic termination
controls. For ventless electric combination washer-dryer, the design
option analyzed includes high-speed spin cycles. For the electric
standard, electric compact (120V), and vented electric compact (240V),
TSL 2 corresponds to EL 3. For vented gas standard, TSL 2 corresponds
to EL 2. For ventless electric compact (240V) and ventless electric
combination washer-dryer, TSL 2 corresponds to EL 1. Capital conversion
costs may be necessary for incremental updates in tooling. Product
conversion costs may be necessary for software optimization,
prototyping, and testing. DOE expects industry to incur some re-
flooring costs as manufacturers redesign product lines to meet the
efficiency levels required by TSL 2. DOE estimates capital conversion
costs of $31.9 million and product conversion costs of $37.6 million.
Conversion costs total $69.5 million.
At TSL 2, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 0.6 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year
[[Page 18219]]
the standard takes effect. In the preservation-of-gross-margin-
percentage scenario, the slight increase cash flow from the higher MSP
is outweighed by the $69.5 million in conversion costs, causing a
slightly negative change in INPV at TSL 2 under this scenario. Under
the preservation-of-operating-profit scenario, the manufacturer markup
decreases in 2028, the year after the analyzed 2027 compliance year.
This reduction in the manufacturer markup and the $69.5 million in
conversion costs incurred by manufacturers cause a negative change in
INPV at TSL 2 under the preservation-of-operating-profit scenario.
At TSL 3 (i.e., the Recommended TSL), the standard reflects a set
of efficiency levels between the levels designated in TSL 2 and TSL 4.
The change in INPV is expected to range from -6.8 to -5.7 percent. At
this level, free cash flow is estimated to decrease 55.2 percent
compared to the no-new-standards case value of $136.6 million in the
year 2027, the year before the 2028 standards year. DOE's shipments
analysis estimates approximately 48 percent of current shipments meet
this level.
The design options analyzed for electric standard, electric compact
(120V), vented electric compact (240V), and vented gas standard include
implementing electronic controls, optimized heating systems, more
advanced automatic termination controls, and modulating heat. For
ventless electric compact (240V) and ventless electric combination
washer-dryer, the design options analyzed are the same as TSL 2. For
electric standard, electric compact (120V), and vented electric compact
(240V), TSL 3 corresponds to EL 4. For vented gas standard, TSL 3
corresponds to EL 3. For ventless electric compact (240V) and ventless
electric combination washer-dryer, TSL 3 corresponds to EL 1. The
incremental increase in industry conversion costs from the prior TSL
are due to the higher efficiency level requirements for electric
standard, electric compact (120V), vented electric compact (240V), and
vented gas standard. Capital conversion costs may be necessary as
manufacturers increase tooling for two-stage heating systems. Product
conversion costs may be necessary for prototyping and testing. DOE
expects industry to incur similar re-flooring costs as with TSL 2. DOE
estimates capital conversion costs of $128.9 million and product
conversion costs of $51.7 million. Conversion costs total $180.7
million.
At TSL 3, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 1.7 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2028. Given the relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year the standard takes effect. In the preservation-of-gross-
margin-percentage scenario, the increase in cash flow from the higher
MSP is outweighed by the $180.7 million in conversion costs, causing a
negative change in INPV at TSL 3 under this scenario. Under the
preservation-of-operating-profit scenario, the manufacturer markup
decreases in 2029, the year after the analyzed 2028 compliance year.
This reduction in the manufacturer markup and the $180.7 million in
conversion costs incurred by manufacturers cause a negative change in
INPV at TSL 3 under the preservation-of-operating-profit scenario.
At TSL 4, the standard reflects the maximum national energy savings
with a simple PBP of less than 4 years. The change in INPV is expected
to range from -29.0 to -18.5 percent. At this level, free cash flow is
estimated to decrease by 212.5 percent compared to the no-new-standards
case value of $136.7 million in the year 2026, the year before the 2027
standards year. DOE's shipments analysis estimates approximately 15
percent of current shipments meet this level.
The design options analyzed for electric standard include
implementing electronic controls, optimized heating systems, more
advanced automatic termination controls, modulating heat, and inlet air
preheat. For the remaining product classes, the efficiency levels and
analyzed design options for TSL 4 are the same as TSL 3. The
incremental increase in industry conversion costs from the prior TSL is
due to the efficiency level requirements for electric standard. There
is very little industry experience with inlet air preheat designs.
Currently, DOE is not aware of any consumer clothes dryers on the
market utilizing this design option. Electric standard dryers account
for an estimated 81 percent of domestic consumer clothes dryer
shipments. Of these standard electric dryer shipments, DOE estimates
only 7 percent meet or exceed the efficiency level required by TSL 4.
Implementing inlet air preheat represents a major overhaul of existing
product lines and manufacturing facilities. For capital conversion
costs, this change might necessitate significant new equipment and
tooling. Product conversion costs may be necessary for designing,
prototyping, and testing new or updated platforms. DOE expects industry
to incur more re-flooring costs compared to prior TSLs as more display
units would need to be replaced with high-efficiency models. DOE
estimates capital conversion costs of $579.7 million and product
conversion costs of $87.7 million. Conversion costs total $667.5
million.
At TSL 4, the large conversion costs result in free cash flow
dropping below zero in the years before the standards year. The
negative free cash-flow calculation indicates manufacturers may need to
access cash reserves or outside capital to finance conversion efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 13 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE estimates a less than 1-percent drop in shipments in the
year the standard takes effect compared to the no-new-standards case.
In the preservation-of-gross-margin-percentage scenario, the increase
in cash flow from the higher MSP is outweighed by the $667.5 million in
conversion costs, causing a negative change in INPV at TSL 4 under this
scenario. Under the preservation-of-operating-profit scenario, the
manufacturer markup decreases in 2028, the year after the analyzed 2027
compliance year. This reduction in the manufacturer markup and the
$667.5 million in conversion costs incurred by manufacturers cause a
negative change in INPV at TSL 4 under the preservation-of-operating-
profit scenario.
At TSL 5, the standard reflects the maximum national energy savings
with maximum positive NPV. The change in INPV is expected to range from
-67.9 to -14.9 percent. At this level, free cash flow is estimated to
decrease by 462.9 percent compared to the no-new-standards case value
of $136.7 million in the year 2026, the year before the 2027 standards
year. DOE's shipments analysis estimates approximately 2 percent of
current shipments meet this level.
The design option analyzed for electric standard includes
implementing heat pump technology. The design options analyzed for the
vented electric compact (240V) and vented gas standard include
implementing electronic controls, optimized heating systems, more
advanced automatic termination controls, modulating heat, and inlet air
preheat. For electric compact (120V), ventless electric compact (240V),
and ventless electric combination washer-
[[Page 18220]]
dryer, the design options analyzed are the same as the prior TSL. For
electric standard, TSL 5 corresponds to EL 7. For electric compact
(120V) and vented gas standard, TSL 5 corresponds to EL 4. For vented
electric compact (240V), TSL 5 corresponds to EL 5. For ventless
electric compact (240V) and ventless electric combination washer-dryer,
TSL 5 corresponds to EL 1.
At TSL 5, conversion costs are largely driven by the max-tech
efficiency level required for electric standard and vented gas
standard. As previously discussed, electric standard dryers account for
81 percent of domestic consumer clothes dryer shipments. Currently,
there are few electric standard models on the U.S. market that meet the
max-tech efficiency level required by TSL 5. Of the 13 OEMs identified
that offer electric standard dryers, only five OEMs manufacture
electric standard dryers that utilize heat pump technology. Of these
five OEMs, four OEMs offer approximately six models (accounting for
less than 1 percent of electric standard model listings) that meet the
max-tech level required at TSL 5. Nearly all manufacturers would need
to significantly update facilities to meet a heat pump efficiency level
for electric standard dryers. Mandating a heat pump efficiency level
for this product class would require many manufacturers to design
completely new clothes dryer platforms or adapt heat pump designs from
other markets (i.e., redesign European heat pump models to adhere to
U.S. safety standards and consumer preferences).
Vented gas standard dryers account for approximately 17 percent of
domestic consumer clothes dryer shipments. Manufacturers would need to
implement inlet air preheat technology along with other design options
to meet the efficiency levels required by TSL 5. Thus far, dryers with
this technology and performance have not been observed in clothes
dryers available on the consumer market. Clothes dryers with inlet air
preheat designs have been observed only in laboratory settings. In
interviews, some manufacturers raised concerns about implementing a
relatively untested technology for the consumer market. There is very
little industry experience with inlet air preheat designs. Several
manufacturers speculated that implementing inlet air preheat technology
would require a major overhaul of existing production facilities and a
significant amount of engineering time.
DOE expects industry to incur more re-flooring costs compared to
prior TSLs, as nearly all display units would need to be replaced with
high-efficiency models. DOE estimates capital conversion costs of
$1,314.3 million and product conversion costs of $122.6 million.
Conversion costs total $1,436.9 million.
As with TSL 4, the large conversion costs result in free cash flow
dropping below zero in the years before the standard year. The negative
free cash-flow calculation indicates manufacturers may need to access
cash reserves or outside capital to finance conversion efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 63.2 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE expects an estimated 11-percent drop in shipments in the
year the standard takes effect compared to the no-new-standards case.
In the preservation-of-gross-margin-percentage scenario, the increase
in MSP is outweighed by the $1,436.9 million in conversion costs and
the drop in annual shipments, causing a negative change in INPV at TSL
5 under this scenario. Under the preservation-of-operating-profit
scenario, the manufacturer markup decreases in 2028, the year after the
analyzed 2027 compliance year. This large reduction in manufacturer
markup, the $1,436.9 million in conversion costs incurred by
manufacturers, and the drop in annual shipments cause a significantly
negative change in INPV at TSL 5 under the preservation-of-operating-
profit scenario.
At TSL 6, the standard reflects max-tech efficiency for all product
classes. The change in INPV is expected to range from -71.4 to -17.1
percent. At this level, free cash flow is estimated to decrease by
488.8 percent compared to the no-new-standards case value of $136.7
million in the year 2026, the year before the 2027 standards year.
DOE's shipments analysis estimates approximately 1 percent of current
shipments meet this level.
The design option analyzed for TSL 6 incorporates heat pump
technology for electric standard, electric compact (120V), vented
electric compact (240V), ventless electric compact (240V), and ventless
electric combination washer-dryer. For vented gas standard, the design
options analyzed include implementing electronic controls, optimized
heating systems, more advanced automatic termination controls,
modulating heat, and inlet air preheat.
Of the 19 OEMs that manufacture electric consumer clothes dryers
(i.e., electric standard, electric compact (120V), vented electric
compact (240V), ventless electric compact (240V), ventless electric
combination washer-dryer), 10 OEMs do not currently offer any consumer
clothes dryer models for the U.S. market that utilize heat pump
technology. Of the 13 OEMs that offer electric standard clothes dryers,
four OEMs currently offer some models that meet the max-tech heat pump
level. Of the 10 OEMs that offer electric compact (120V) clothes
dryers, one OEM offers a model that meets the max-tech level. Of the
five OEMs that offer vented electric compact (240V) clothes dryers, one
OEM offers models that meet the max-tech level. Of the 13 OEMs that
offer ventless electric compact (240V) clothes dryers, one OEM offers a
model that meets the max-tech level. Of the five OEMs that offer
ventless electric combination washer-dryer, two OEMs offer models that
meet the max-tech level.
A standard that could only be met using heat pump technology could
require a total renovation of existing facilities and completely new
clothes dryer platforms for manufacturers that do not offer heat pump
clothes dryers today. In interviews, two OEMs with significant market
shares stated that they would require additional facilities to handle
dryer manufacturing under a standard that could only be met using heat
pump technology. As previously discussed, implementing inlet air
preheat also represents a major overhaul of existing vented gas product
lines. DOE expects industry to incur slightly more re-flooring costs
compared to TSL 5, as all display models below max-tech efficiency
would need to be replaced due to the higher standard. At TSL 6,
reaching max-tech efficiency levels is a billion-dollar investment for
industry. DOE estimates capital conversion costs of $1,388.8 million
and product conversion costs of $128.2 million. Conversion costs total
$1,516.9 million.
As with TSL 4 and TSL 5, the large conversion costs result in free
cash flow dropping below zero in the years before the standard year.
The negative free cash-flow calculation indicates manufacturers may
need to access cash reserves or outside capital to finance conversion
efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 64.7 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE expects an
[[Page 18221]]
estimated 11-percent drop in shipments in the year the standard takes
effect compared to the no-new-standards case. In the preservation-of-
gross-margin-percentage scenario, the large increase in MSP is still
outweighed by the $1,516.9 million in conversion costs and drop in
annual shipments, causing a moderately negative change in INPV at TSL 6
under this scenario. Under the preservation-of-operating-profit
scenario, the manufacturer markup decreases in 2028, the year after the
analyzed 2027 compliance year. This large reduction in manufacturer
markup, the $1,516.9 million in conversion costs incurred by
manufacturers, and the drop in annual shipments cause a significantly
negative change in INPV at TSL 6 under the preservation-of-operating-
profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of amended energy
conservation standards on direct employment in the consumer clothes
dryer industry, DOE used the GRIM to estimate the domestic labor
expenditures and number of direct employees in the no-new-standards
case and in each of the standards cases during the analysis period. For
the direct final rule, DOE used the most up-to-date information
available. DOE calculated these values using statistical data from the
U.S. Census Bureau's 2021 ASM,\117\ the U.S. Bureau of Labor
Statistics' employee compensation data,\118\ results of the engineering
analysis, and manufacturer interviews.
---------------------------------------------------------------------------
\117\ U.S. Census Bureau, Annual Survey of Manufactures: Summary
Statistics for Industry Groups and Industries in the U.S.: 2018-
2021. Available at www.census.gov/programs-surveys/asm/data/tables.html (last accessed May 23, 2023).
\118\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. March 17, 2023. Available at www.bls.gov/news.release/pdf/ecec.pdf (last accessed June 8, 2023).
---------------------------------------------------------------------------
Labor expenditures related to product manufacturing depend on the
labor intensity of the product, the sales volume, and an assumption
that wages remain fixed in real terms over time. The total labor
expenditures in each year are calculated by multiplying the total MPCs
by the labor percentage of MPCs. The total labor expenditures in the
GRIM were then converted to total production employment levels by
dividing production labor expenditures by the average fully burdened
wage multiplied by the average number of hours worked per year per
production worker. To do this, DOE relied on ASM inputs: Production
Workers Annual Wages, Production Workers Annual Hours, Production
Workers for Pay Period, and Number of Employees. DOE also relied on BLS
employee compensation data to determine the fully burdened wage ratio.
The fully burdened wage ratio factors in paid leave, supplemental pay,
insurance, retirement and savings, and legally required benefits.
The number of production employees is then multiplied by the U.S.
labor percentage to convert total production employment to total
domestic production employment. The U.S. labor percentage represents
the industry fraction of domestic manufacturing production capacity for
the covered product. This value is derived from manufacturer
interviews, product database analysis, and publicly available
information. For the August 2022 NOPR, DOE estimated that approximately
58 percent of consumer clothes dryers were produced domestically. In
support of this direct final rule analysis, DOE conducted further
research to ensure this estimate was still accurate. Based on a review
of publicly available data, DOE estimates that 60 percent of consumer
clothes dryers are produced domestically.
The domestic production employees estimate covers production line
workers, including line supervisors, who are directly involved in
fabricating and assembling products within the OEM facility. Workers
performing services that are closely associated with production
operations, such as materials-handling tasks using forklifts, are also
included as production labor. DOE's estimates only account for
production workers who manufacture the specific products covered by
this amended rulemaking.
Non-production workers account for the remainder of the direct
employment figure. The non-production employees estimate covers
domestic workers who are not directly involved in the production
process, such as sales, engineering, human resources, and management.
Using the amount of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio
of non-production workers in the industry compared to production
employees. DOE assumes that this employee distribution ratio remains
constant between the no-new-standards case and standards cases.
Using the GRIM, DOE estimates that in the absence of new energy
conservation standards, there would be 2,725 domestic production and
non-production workers for consumer clothes dryers in 2027. Table V.28
shows the range of the impacts of energy conservation standards on U.S.
manufacturing employment in the consumer clothes dryer industry. The
following discussion provides a qualitative evaluation of the range of
potential impacts presented in Table V.28.
Table V.28--Domestic Direct Employment Impacts for Consumer Clothes Dryer Manufacturers in the Analyzed Compliance Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2027 * ** 2,725 2,729........... 2,752........... 2,778........... 3,106........... 5,687........... 5,737
(Production Workers + Non-
Production Workers).
Potential Changes in Direct .............. (2,433) to 4.... (2,433) to 27... (2,433) to 34... (2,433) to 381.. (2,433) to 2,962 (2,433) to
Employment Workers ***. 3,012
--------------------------------------------------------------------------------------------------------------------------------------------------------
* TSL 3 (the Recommended TSL) represents the direct employment in 2028.
** In 2028, the no-new-standards case direct employment estimate is 2,744.
*** DOE presents a range of potential employment impacts. Parentheses denote negative values.
The direct employment impacts shown in Table V.29 represent the
potential domestic employment changes that could result following the
compliance date for the consumer clothes dryer product classes in this
amended rule. The upper-bound estimate corresponds to an increase in
the number of domestic workers that would result from amended energy
conservation standards if manufacturers continue to produce the same
scope of
[[Page 18222]]
covered products within the United States after compliance takes
effect. The lower-bound estimate represents the maximum decrease in
production workers if manufacturing moved to lower labor-cost
countries. Most manufacturers currently produce at least a portion of
their consumer clothes dryers in countries with lower labor costs, and
an amended standard that necessitates large increases in labor content
or large expenditures to retool facilities could cause manufacturers to
reevaluate domestic production siting options. However, the Recommended
TSL (i.e., TSL 3) would likely not require significant increases in
labor content or significant capital investments. As such, DOE expects
that the likelihood of changes in production location as a direct
result of amended standards are relatively low.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the direct final rule TSD. Additionally, the
employment impacts discussed in this section are independent of the
employment impacts from the broader U.S. economy, which are documented
in chapter 16 of the direct final rule TSD.
c. Impacts on Manufacturing Capacity
As discussed in section V.B.2.a of this document, implementing the
different design options analyzed for this direct final rule would
require varying levels of resources and investment. A standard level
that would require the use of heat pump technology for electric dryers
and combination washer-dryers would represent the biggest shift in
technology for clothes dryer manufacturing among all the design options
considered for this analysis. Adopting efficiency levels that require
heat pump technology would necessitate very large investments to both
redesign products and update production facilities. Currently, DOE
estimates that approximately 1 percent of consumer clothes dryer
shipments meet the analyzed max-tech heat pump efficiency levels. In
interviews, several manufacturers expressed concern that the 3-year
EPCA-specified time period between the announcement of a final rule and
the compliance date of the amended energy conservation standard might
be insufficient to design, test, and manufacture the necessary number
of products to meet demand.
In interviews, some manufacturers raised concerns about
implementing inlet air preheat designs. Unlike the discussions about
heat pump technology, there is very little industry experience with
inlet air preheat designs. Currently, no models on the U.S. market
incorporate this design option. Several manufacturers speculated that
implementing inlet air preheat would require a major overhaul of
existing production facilities and a significant amount of engineering
time.
However, because TSL 3 (i.e., the Recommended TSL) would not
require heat pump technology or inlet air preheat designs, DOE does not
expect manufacturers to face long-term capacity constraints due to the
standard levels detailed in this direct final rule. Furthermore, at the
Recommended TSL, manufacturers will have a 4-year period between the
announcement of the direct final rule and the compliance date of the
amended energy conservation standards to redesign products to meet the
adopted standard levels.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop industry cash flow
estimates may not capture the differential impacts among subgroups of
manufacturers. Small manufacturers, niche players, or manufacturers
exhibiting a cost structure that differs substantially from the
industry average could be affected disproportionately. DOE investigated
small businesses as a manufacturer subgroup that could be
disproportionally impacted by energy conservation standards and could
merit additional analysis. DOE did not identify any other adversely
impacted manufacturer subgroups for this rulemaking based on the
results of the industry characterization.
DOE analyzes the impacts on small businesses in a separate analysis
for the standards proposed in the NOPR published elsewhere in this
issue of the Federal Register and in chapter 12 of the direct final
rule TSD. For a discussion of the impacts on the small business
manufacturer subgroup, see chapter 12 of the direct final rule TSD.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the regulatory actions
of other Federal agencies and States that affect the manufacturers of a
covered product or equipment. While any one regulation may not impose a
significant burden on manufacturers, the combined effects of several
existing or impending regulations may have serious consequences for
some manufacturers, groups of manufacturers, or an entire industry.
Multiple regulations affecting the same manufacturer can strain profits
and lead companies to abandon product lines or markets with lower
expected future returns than competing products. For these reasons, DOE
conducts an analysis of cumulative regulatory burden as part of its
rulemakings pertaining to appliance efficiency.
For the cumulative regulatory burden analysis, DOE examines
Federal, product-specific regulations that could affect consumer
clothes dryer manufacturers that take effect approximately 3 years
before or after the 2028 compliance date. This information is presented
in Table V.29.
Table V.29--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Consumer Clothes Dryer Original
Equipment Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of OEMs Industry Industry conversion
Federal energy conservation standard Number of OEMs affected by Approx. standards conversion costs costs/equipment
* today's rule ** compliance year (Millions) revenue ***(%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Portable Air Conditioners 85 FR 1378 (January 10, 2020)... 9 2 2025 $320.9 (2015$) 6.7
Residential Clothes Washers [dagger]88 FR 13520 (March 3, 19 14 2027 $690.8 (2021$) 5.2
2023)....................................................
Miscellaneous Refrigeration Products [dagger]88 FR 19382 38 5 2029 $126.9 (2021$) 3.1
(March 31, 2023).........................................
Automatic Commercial Ice Makers [dagger]88 FR 30508 (May 23 1 2027 $15.9 (2022$) 0.6
11, 2023)................................................
Dishwashers [dagger]88 FR 32514 (May 19, 2023)............ 21 12 2027 $125.6 (2021$) 2.1
[[Page 18223]]
Refrigerated Bottled or Canned Beverage Vending Machines 5 1 2028 $1.5 (2022$) 0.2
[dagger]88 FR 33968 (May 25, 2023).......................
Room Air Conditioners 88 FR 34298 (May 26, 2023).......... 8 4 2026 $24.8 (2021$) 0.4
Microwave Ovens 88 FR 39912 (June 20, 2023)............... 18 11 2026 $46.1 (2021$) 0.7
Consumer Water Heaters [dagger]88 FR 49058 (July 28, 2023) 22 3 2030 $228.1 (2022$) 1.3
Commercial Water Heating Equipment 88 FR 69686 (October 6, 15 1 2026 $42.7 (2022$) 5.3
2023)....................................................
Commercial Refrigerators, Refrigerator-Freezers, and 83 4 2028 $226.4 (2022$) 1.6
Freezers [dagger]88 FR 70196 (October 10, 2023)..........
Dehumidifiers [dagger]88 FR 76510 (November 6, 2023)...... 20 3 2028 $6.9 (2022$) 0.4
Consumer Furnaces 88 FR 87502 (December 18, 2023)......... 15 1 2029 $162.0 (2022$) 1.8
Refrigerators, Freezers, and Refrigerator-Freezers 89 FR 63 11 [Dagger] 2029 and $830.3 (2022$) 1.3
3026 (January 17, 2024).................................. 2030
Consumer Conventional Cooking Products 89 FR 11434 35 8 2028 $66.7 (2022$) 0.3
(February 14, 2024)......................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule that is contributing to cumulative regulatory
burden.
** This column presents the number of OEMs producing consumer clothes dryers that are also listed as OEMs in the identified energy conservation standard
that is contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of equipment revenue during the conversion period. Industry conversion costs are the
upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
publication year of a final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5 years,
depending on the rulemaking.
[dagger] These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication of a final rule.
[Dagger] For the refrigerators, refrigerator-freezers, and freezers energy conservation standards direct final rule, the compliance year (2029 or 2030)
varies by product class.
As shown in Table V.29, the rulemakings with the largest overlap of
consumer clothes dryer OEMs include residential clothes washers,
consumer conventional cooking products, dishwashers, refrigerators,
refrigerator-freezers, and freezers, and miscellaneous refrigeration
products, which are all part of the multi-product Joint Agreement
submitted by interested parties.\119\ As detailed in the Joint
Agreement, the signatories indicated that their recommendations should
be considered a ``complete package.'' The signatories further stated
that ``each part of this agreement is contingent upon the other parts
being implemented.'' (Joint Agreement, No. 55, p. 3)
---------------------------------------------------------------------------
\119\ The microwave ovens energy conservation standards final
rule (88 FR 39912), which has 11 overlapping OEMs, was published
prior to the joint submission of the multi-product Joint Agreement.
---------------------------------------------------------------------------
The multi-product Joint Agreement states the ``jointly recommended
compliance dates will achieve the overall energy and economic benefits
of this agreement while allowing necessary lead-times for manufacturers
to redesign products and retool manufacturing plants to meet the
recommended standards across product categories.'' (Joint Agreement,
No. 55 at p. 2) The staggered compliance dates help mitigate
manufacturers' concerns about their ability to allocate sufficient
resources to comply with multiple concurrent amended standards and
about the need to align compliance dates for products that are
typically designed or sold as matched pairs (such as residential
clothes washers and consumer clothes dryers). See section IV.J.3 of
this document for stakeholder comments about cumulative regulatory
burden. See Table V.30 for a comparison of the estimated compliance
dates based on EPCA-specified timelines and the compliance dates
detailed in the Joint Agreement.
Table V.30--Expected Compliance Dates for Multi-Product Joint Agreement
------------------------------------------------------------------------
Estimated
compliance
Rulemaking year based on Compliance year in
EPCA the joint agreement
requirements
------------------------------------------------------------------------
Consumer Clothes Dryers........... 2027 2028
Residential Clothes Washers....... 2027 2028
Consumer Conventional Cooking 2027 2028
Products.
[[Page 18224]]
Dishwashers....................... 2027 2027 *
Refrigerators, Refrigerator- 2027 2029 or 2030
Freezers, and Freezers. depending on the
product class.
Miscellaneous Refrigeration 2029 2029
Products.
------------------------------------------------------------------------
* Estimated compliance year. The Joint Agreement states, ``3 years after
the publication of a final rule in the Federal Register.'' (Joint
Agreement, No. 55 at p. 2)
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for consumer clothes dryers, DOE compared clothes dryer
energy consumption under the no-new-standards case to their anticipated
energy consumption under each TSL. The savings are measured over the
entire lifetime of products purchased in the 30-year period that begins
in the year of anticipated compliance with amended standards (2027-
2056).\120\ Table V.31 presents DOE's projections of the national
energy savings for each TSL considered for consumer clothes dryers. The
savings were calculated using the approach described in section IV.H.2
of this document.
---------------------------------------------------------------------------
\120\ The analysis period for TSL 3 (the Recommended TSL) is
2028-2057.
Table V.31--Cumulative National Energy Savings for Consumer Clothes Dryers; 30 Years of Shipments (2027-2056) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
quads
-----------------------------------------------------------------------------------------------
Primary energy.......................................... 0.55 1.53 2.57 3.41 9.42 9.47
FFC energy.............................................. 0.57 1.58 2.66 3.52 9.70 9.76
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
OMB Circular A-4 requires agencies to present analytical results
including separate schedules of the monetized benefits and costs that
show the type and timing of benefits and costs. Circular A-4 also
directs agencies to consider the variability of key elements underlying
the estimates of benefits and costs. For this rulemaking, DOE undertook
a sensitivity analysis using 9 years, rather than 30 years, of product
shipments. The choice of a 9-year period is a proxy for the timeline in
EPCA for the review of certain energy conservation standards and
potential revision of and compliance with such revised standards.\121\
The review timeframe established in EPCA is generally not synchronized
with the product lifetime, product manufacturing cycles, or other
factors specific to consumer clothes dryers. Thus, such results are
presented for informational purposes only and are not indicative of any
change in DOE's analytical methodology. The NES sensitivity analysis
results based on a 9-year analytical period are presented in Table
V.32. The impacts are counted over the lifetime of consumer clothes
dryers purchased during the period 2027-2035.\122\
---------------------------------------------------------------------------
\121\ EPCA requires DOE to review its standards at least once
every 6 years, and requires, for certain products, a 3-year period
after any new standard is promulgated before compliance is required,
except that in no case may any new standards be required within 6
years of the compliance date of the previous standards. While adding
a 6-year review to the 3-year compliance period adds up to 9 years,
DOE notes that it may undertake reviews at any time within the 6-
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given
the variability that occurs in the timing of standards reviews and
the fact that for some products, the compliance period is 5 years
rather than 3 years.
\122\ The analysis period for TSL 3 (the Recommended TSL) is
2028-2036.
Table V.32--Cumulative National Energy Savings for Consumer Clothes Dryers; 9 Years of Shipments (2027-2035) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
quads
-----------------------------------------------------------------------------------------------
Primary energy.......................................... 0.19 0.54 0.92 1.17 2.80 2.81
[[Page 18225]]
FFC energy.............................................. 0.20 0.56 0.96 1.21 2.89 2.90
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2036.
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for consumer
clothes dryers. In accordance with OMB's guidelines on regulatory
analysis, DOE calculated NPV using both a 7-percent and a 3-percent
real discount rate. Table V.33 shows the consumer NPV results with
impacts counted over the lifetime of products purchased during the
period 2027-2056.
Table V.33--Cumulative Net Present Value of Consumer Benefits for Consumer Clothes Dryers; 30 Years of Shipments (2027-2056) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
billion 2022$
-----------------------------------------------------------------------------------------------
3 percent............................................... 4.07 12.33 20.08 19.85 31.21 30.50
7 percent............................................... 1.92 5.88 9.23 8.42 9.03 8.58
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.34. The impacts are counted over the
lifetime of products purchased during the period 2027-2035. As
mentioned previously, such results are presented for informational
purposes only and are not indicative of any change in DOE's analytical
methodology or decision criteria.
Table V.34 Cumulative Net Present Value of Consumer Benefits for Consumer Clothes Dryers; 9 Years of Shipments (2027-2035) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
billion 2022$
-----------------------------------------------------------------------------------------------
3 percent............................................... 1.78 5.46 9.08 8.80 13.64 13.41
7 percent............................................... 1.07 3.31 5.28 4.77 5.69 5.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2036.
The previous results reflect the use of a default trend to estimate
the change in price for consumer clothes dryers over the analysis
period (see section IV.F.1 of this document). DOE also conducted a
sensitivity analysis that considered one scenario with a lower rate of
price decline than the reference case and one scenario with a higher
rate of price decline than the reference case. The results of these
alternative cases are presented in appendix 10C of the direct final
rule TSD. In the high-price-decline case, the NPV of consumer benefits
is higher than in the default case. In the lower-price-decline case,
the NPV of consumer benefits is lower than in the default case.
c. Indirect Impacts on Employment
DOE estimates that amended energy conservation standards for
consumer clothes dryers will reduce energy expenditures for consumers
of those products, with the resulting net savings being redirected to
other forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2027-2033),\123\ where these uncertainties are reduced.
---------------------------------------------------------------------------
\123\ The analysis period for TSL 3 (the Recommended TSL) is
2028-2034.
---------------------------------------------------------------------------
The results suggest that the adopted standards are likely to have a
negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
employment. Chapter 16 of the direct final rule TSD presents detailed
results regarding anticipated indirect employment impacts.
[[Page 18226]]
4. Impact on Utility or Performance of Products
As discussed in section III.E.1.d of this document, DOE has
concluded that the standards adopted in this direct final rule will not
lessen the utility or performance of the consumer clothes dryers under
consideration in this rulemaking. Manufacturers of these products
currently offer units that meet or exceed the adopted standards.
In response to the August 2022 NOPR, AHAM stated that DOE must
ensure that amended standards do not lengthen cycle times, and AHAM
believes that in order to achieve the test procedure's current FMC
requirement and meet the standards proposed in the August 2022 NOPR,
cycle lengths will get longer. Whirlpool commented that the strategies
used in consumer clothes dryers certified under appendix D2 often lower
the overall average drying temperature and extend the drying time to
increase the CEF, while minimally compliant consumer clothes dryers
certified under appendix D1 typically achieve a higher overall
temperature and shorten the drying process. Citing DOE's test sample,
Whirlpool stated that models certified using appendix D1 without
wrinkle prevention mode activated had an average drying time of 56
minutes when tested to appendix D2, while models certified using
appendix D2 had an average drying time of 66 minutes, and ENERGY STAR-
qualified products had an average drying time of 71 minutes, the
additional time needed to meet the 2-percent FMC requirement. Whirlpool
stated that DOE's statutory criteria are not met to proceed with the
standards proposed in the August 2022 NOPR due to a clear lessening of
performance and utility of the product associated with longer drying
times. (AHAM, No. 46 at pp. 8-10; Whirlpool, No. 53 at p. 4)
DOE's test data do not support the assertion by AHAM and Whirlpool
that amended standards would necessitate longer drying times. In DOE's
test sample, the consumer clothes dryers certified under appendix D1
have an average cycle time of 61 minutes when tested in accordance with
appendix D2. In comparison, among the units in DOE's test sample that
are certified under appendix D2 at or above the amended standard,
multiple units have a cycle time less than 60 minutes. This indicates
that the standards adopted by this direct final rule will not
necessitate any increase in cycle time compared to typical cycle times
currently associated with baseline consumer clothes dryers. DOE notes
that a 60-minute cycle time is notably less than the 80-minute cycle
time required for ENERGY STAR qualification.\124\ DOE further notes
that cycle time is one of many product attributes that consumers
consider when purchasing a clothes dryer, such as drying performance
and fabric care. As further examples, Consumer Reports--which DOE
recognizes is one popular resource for consumers seeking independent
reviews of consumer products--highlights the following product
attributes for consumer clothes dryers in addition to cycle time:
drying performance, ergonomics, noise level, capacity, drum material,
compatibility with a drying rack, availability of custom programs,
availability of a steam option, moisture sensing capability, Wifi
connectivity, and stackability with an accompanying clothes
washer.\125\
---------------------------------------------------------------------------
\124\ ENERGY STAR criteria for consumer clothes dryers can be
found at: www.energystar.gov/products/appliances/clothes_dryers/key_product_criteria.
\125\ Consumer Reports ratings of consumer clothes dryers
available at www.consumerreports.org/appliances/clothes-dryers (last
accessed February 5, 2024).
---------------------------------------------------------------------------
As noted in section IV.H.2 of this document, DOE has observed a
steady decline in annual consumer clothes dryer cycles over the past 15
years, despite the implementation of more stringent consumer clothes
dryer energy conservation standards, which is an indication that
consumers are not rerunning their clothes dryers. Additionally, the
amended standards correspond to the current ENERGY STAR efficiency
level for both electric and gas standard clothes dryers, which requires
testing in accordance with appendix D2 and which ensures consumer-
accepted dryness levels as discussed in section II.B.2 of this
document. As noted above, DOE does not expect increased cycle times
compared to typical cycle times currently associated with baseline
consumer clothes dryers as a result of adopted standards. In addition,
DOE does not expect consumers to re-run the consumer clothes dryer upon
completion of the initial run as a result of the amended standards
being adopted in this direct final rule. DOE therefore does not expect
a lessening in performance or utility as a result of the standards
adopted by this direct final rule. As previously discussed, on February
14, 2024, DOE received a second joint statement from the same group of
stakeholders that submitted the Joint Agreement in which the
signatories reaffirmed the standards recommended in the Joint
Agreement.\126\ In particular, the letter states that DOE's test data
show, and industry experience agrees, that the recommended standard
levels for consumer clothes dryers will not result in significant
differences in cycle time and will adequately dry clothes.
---------------------------------------------------------------------------
\126\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
Whirlpool stated that due to the core technological differences in
energy-saving heat pump clothes dryers (such as lower air temperatures,
heat retention, and water condensing systems) compared to conventional
resistive heater clothes dryers, harder-to-dry fabrics need additional
time in a heat pump clothes dryer to remove their embedded moisture and
some heat pump clothes dryers may not get down to the required FMC.
(Whirlpool, No. 53 at pp. 12-13)
With regard to Whirlpool's concerns about the performance of heat
pump clothes dryers for certain hard-to-dry fabrics, DOE notes that the
standards adopted by this direct final rule do not require the use of
heat pump technology. AHAM stated that longer consumer clothes dryer
cycle times may create different cycle times between clothes washers
and clothes dryers, which may result in different consumer behaviors.
According to AHAM, different operating times in laundry products may
result in the increased use of wrinkle control cycles or redrying loads
to avoid wrinkled clothes resulting from the clothes sitting in the
clothes dryer for more extended periods of time, or in consumers re-
washing clothes that were not transferred to the clothes dryer due to a
previous load still being dried, ultimately resulting in increased
water and energy use. AHAM also stated that consumers could turn to
using other cycles, thus undercutting savings designed to be achieved
through use of the normal cycle. AHAM and Whirlpool therefore stated
that DOE should evaluate the impact of amended standards on drying
times as cycle length is a performance feature associated with consumer
preferences that consumers are unlikely to accept if cycles are too
long and do not match washing times. AHAM also disagreed with DOE's use
of the maximum drying time of 80 minutes in the current ENERGY STAR
specification as a benchmark for its analysis, asserting that the
specification was not based on sufficient supporting or consumer-
relevant data. (AHAM, No. 46 at pp. 8-10)
As previously stated, DOE does not expect a shift in consumer
drying times associated with amended standards beyond what is typically
experienced by consumers of baseline consumer clothes dryers.
Additionally, DOE does not expect that the amended standards
[[Page 18227]]
would result in longer drying cycles given the prevalence on the market
of consumer clothes dryers that meet the amended standard with cycle
times comparable to those of current baseline models, regardless of the
longer cycle time of 80 minutes allowed in the ENERGY STAR
specification. Therefore, DOE has no basis to conclude that the amended
standards would alter the existing relative cycle times between
consumer clothes dryers and clothes washers.
The test data presented in the August 2022 NOPR contradict certain
conclusions and presumptions made by DOE in previous rulemakings with
regard to cycle times. In particular, in a NOPR published on August 13,
2020 (``August 2020 NOPR''), which preceded the December 2020 Final
Rule, DOE stated its presumption that the shortest possible cycle times
currently available on the market represent the models for which
certain manufacturers have prioritized cycle time while maintaining
adequate drying performance and other performance aspects of consumer
clothes dryers; and that based on this presumption, the current energy
conservation standards may have discouraged manufacturers from bringing
models to the market with cycle times of 30 minutes or less. 85 FR
49297, 49305 reiterated at 85 FR 81359, 81361. DOE further asserted
that offering products with shorter cycle times would require more per-
cycle energy use than would be permitted under the current standards in
order to maintain the same level of performance in other areas. 85 FR
49297, 49299.
DOE has determined, contrary to the August 2020 NOPR's assumptions,
that current energy conservation standards have not prevented the sale
of consumer clothes dryers with shorter cycle times. DOE's test data
presented in the August 2022 NOPR indicate no discernable correlation
between efficiency level and cycle time for vented electric standard
dryers or vented gas clothes dryers (i.e., the consumer clothes dryer
product classes subject to the December 2020 Final Rule) Indeed, for
vented electric standard clothes dryers, the most efficient model in
DOE's test sample has a shorter cycle time (80 minutes) than the least
efficient minimally-compliant model in DOE's test sample (98 minutes).
The models with the lowest cycle times of 36 and 39 minutes both
achieve higher efficiency level EL 3. Similarly, for vented gas clothes
dryers, the most efficient model in DOE's test sample has a cycle time
of 66 minutes, substantially similar to the baseline unit with a cycle
time of 65 minutes. The models with the lowest cycle times of 35 and 36
minutes both achieve higher efficiency level EL 2. Based on this data,
DOE reaches a different conclusion than was reached in the December
2020 Final Rule. In particular, noting that DOE's data show no
discernable correlation between efficiency and cycle time, this data
does not support DOE's prior assertion that the current consumer
clothes dryer energy conservation standards may be precluding
manufacturers from bringing models to the market with substantially
shorter cycle times, or DOE's prior presumption that offering products
with shorter cycle times would require more per-cycle energy use than
would be permitted under the current standards.
Furthermore, in the second joint statement submitted February 14,
2024, by the signatories of the Joint Agreement, the signatories
acknowledge that DOE's investigative testing shows that there is no
significant difference in cycle time between consumer clothes dryers in
DOE's data set that are less efficient than the recommended standards
and those that just meet the recommended standard levels. The
signatories noted, for example, that the difference in average cycle
time is only about 2 minutes between electric standard clothes dryers
in DOE's data set that are less efficient than the recommended standard
and those that just meet the recommended standard (with CEFs of 3.93
and 3.94). Moreover, the signatories stated that the electric standard
clothes dryers in DOE's data set that are less efficient than the
recommended standards include models with longer cycle times than those
that meet the recommended standards, suggesting that cycle time is tied
to more than efficiency alone.
Finally, for the reasons previously discussed, DOE has also
determined that the standards adopted in this direct final rule will
not result in any significant differences in drying cycle times.
AHAM and Whirlpool commented that longer cycle times also cause
more wear and tear on clothing as well as on the product itself and can
decrease the lifetime of the product and increase the need for repair.
Whirlpool stated that longer cycles lead to consumer perception that
their clothes are being damaged and potentially lead consumers to
interrupt consumer clothes dryer cycles to prevent garment damage,
depending on different fabric types/thicknesses. Whirlpool commented
that when presented with the concept of a lower-heat and slower-drying
cycle that would save energy, consumers were not enthusiastic and did
not trust that such a drying strategy would prevent garment damage or
match clothes washer cycle times. Whirlpool stated that, according to
its provided research focused on thread removal counts on test cloth,
there is the possibility of increased fabric damage with longer drying
times when the test cloth is in a semi-saturated state. Whirlpool
commented that every 30 minutes of drying time for semi-saturated
fabric is equivalent to 2.4 times the amount of fabric damage that
would have been seen with one complete wash cycle in a front-load
clothes washer. Whirlpool commented that this research showed 17-
percent thread removal from 7 minutes of drying under appendix D1
testing and 40-percent thread removal from 30 minutes of drying under
appendix D2 testing. Whirlpool stated that according to these results,
appendix D2 testing resulted in a longer drying time in which the test
cloth was in a semi-saturated state, as well as 2.4 times the fabric
damage as a consumer clothes dryer cycle under appendix D1 testing.
According to Whirlpool, the longer the drying cycle is drawn out at
lower temperatures, the more total friction and thread removal occurs
as the semi-saturated clothes rub together when tumbling in the drum.
Whirlpool asserted that fabric care is partially a story of cycle
temperature and mechanical damage from extended drying times, and
although there may be some benefit from lower temperatures, the
potentially increased mechanical damage from longer cycles cannot be
ignored, nor the additional cost burden associated with consumers
replacing damaged or worn clothing that was not factored into DOE's
analysis. AHAM stated that manufacturers would also have to plan for
increased wear and tear on the product itself with more robust
components; therefore, AHAM disagreed with DOE's conclusion that repair
and maintenance costs would not change with the proposed standard. Both
AHAM and Whirlpool stated that DOE should account for the impacts of
energy conservation standards associated with increased drying times on
fabric care and the additional cost burden in its analysis. (AHAM, No.
46 at pp. 9-10; Whirlpool, No. 53 at p. 5)
The fabric care data Whirlpool shared shows increased thread
removal from drying under appendix D2 testing compared to testing under
appendix D1 for the same unit, which according to Whirlpool is due to
longer drying times when the test cloth is in a semi-saturated state.
However, DOE notes that amended standards would not require any
specific drying strategy (e.g., longer cycle times, longer drying time
at
[[Page 18228]]
the semi-saturated state, lower drying temperatures) to ensure the FMC
requirement or amended standards are met nor preclude shorter drying
times at the semi-saturated state. Additionally, DOE notes that this
testing did not compare the thread removal from drying for units with
different efficiencies, but rather the same unit tested under two
different tests, so DOE is not aware of any data substantiating a
correlation between increased efficiency and thread removal. As
previously noted, appendix D2 accounts for all consumer clothes dryers
with and without automatic termination control and is therefore more
representative of consumer use than appendix D1, and depending on the
automatic termination control system, the appendix D2 cycle time may be
longer or shorter than that when testing in accordance with appendix
D1. Furthermore, DOE is not aware of any information indicating that
the higher efficiency levels associated with amended standards would
increase cycle time beyond what is typically experienced by consumers
of baseline consumer clothes dryers, and has determined that existing
cycle times can be met with consumer clothes dryers capable of meeting
the amended standards. Therefore, DOE has concluded the recommend
standards that are the subject of this direct final rule would not
result in increased impacts on fabric care and product wear and tear as
AHAM and Whirlpool suggested. Additionally, DOE notes that AHAM
recommended the efficiency levels proposed in the August 2022 NOPR for
adoption in this direct final rule. DOE, however, will continue to
review relevant data on potential impacts on fabric care and product
wear and tear and may consider it in future rulemakings.
For the reasons discussed throughout this section and based on the
additional confirming statements from the Joint Agreement signatories,
DOE has concluded that the standards adopted in this direct final rule
will not lessen the utility or performance of the consumer clothes
dryers under consideration in this rulemaking.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.E.1.e
of this document, EPCA directs the Attorney General of the United
States (``Attorney General'') to determine the impact, if any, of any
lessening of competition likely to result from a proposed standard and
to transmit such determination in writing 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. To assist the Attorney General
in making this determination, DOE is providing the DOJ with copies of
this direct final rule and the TSD for review.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the direct final
rule TSD presents the estimated impacts on electricity generating
capacity, relative to the no-new-standards case, for the TSLs that DOE
considered in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for consumer clothes dryers is expected to yield
environmental benefits in the form of reduced emissions of certain air
pollutants and greenhouse gases. Table V.35 provides DOE's estimate of
cumulative emissions reductions expected to result from the TSLs
considered in this rulemaking. The emissions were calculated using the
multipliers discussed in section IV.K of this document. DOE reports
annual emissions reductions for each TSL in chapter 13 of the direct
final rule TSD.
Table V.35--Cumulative Emissions Reduction for Consumer Clothes Dryers Shipped in 2027-2056 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial Standard Level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Power Sector Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 11.2 30.8 51.5 66.5 170.9 171.7
CH4 (thousand tons)..................................... 0.7 2.0 3.3 4.4 12.0 12.1
N2O (thousand tons)..................................... 0.1 0.3 0.4 0.6 1.7 1.7
NOX (thousand tons)..................................... 6.4 17.4 29.3 36.6 87.6 88.0
SO2 (thousand tons)..................................... 2.9 8.3 13.6 18.7 52.4 52.7
Hg (tons)............................................... 0.02 0.06 0.09 0.13 0.36 0.36
--------------------------------------------------------------------------------------------------------------------------------------------------------
Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 1.2 3.3 5.6 7.0 17.7 17.8
CH4 (thousand tons)..................................... 114.0 309.4 524.3 657.1 1,633 1,642
N2O (thousand tons)..................................... 0.005 0.001 0.021 0.003 0.1 0.1
NOX (thousand tons)..................................... 18.9 51.6 87.3 110.0 276.5 277.9
SO2 (thousand tons)..................................... 0.1 0.2 0.3 0.3 1.0 1.0
Hg (tons)............................................... 0.0001 0.0002 0.0003 0.0005 0.0013 0.0013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total FFC Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 12.4 34.1 57.1 73.5 188.6 189.5
CH4 (thousand tons)..................................... 114.7 311.4 527.6 661.5 1,645 1,654
N2O (thousand tons)..................................... 0.1 0.3 0.5 0.6 1.7 1.7
NOX (thousand tons)..................................... 25.4 69.0 116.5 146.6 364.1 365.9
SO2 (thousand tons)..................................... 3.0 8.4 13.9 19.0 53.3 53.6
Hg (tons)............................................... 0.02 0.06 0.10 0.13 0.36 0.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
[[Page 18229]]
As part of the analysis for this rule, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for consumer clothes
dryers. Section IV.L of this document discusses the estimated SC-
CO2 values that DOE used. Table V.36 presents the value of
CO2 emissions reduction at each TSL for each of the SC-
CO2 cases. The time series of annual values is presented for
the selected TSL in chapter 14 of the direct final rule TSD.
Table V.36--Present Value of CO2 Emissions Reduction for Consumer Clothes Dryers Shipped in 2027-2056 *
----------------------------------------------------------------------------------------------------------------
SC-CO2 case discount rate and statistics
---------------------------------------------------------------
TSL 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
----------------------------------------------------------------------------------------------------------------
1............................................... 136 565 876 1,718
2............................................... 376 1,559 2,415 4,739
3............................................... 613 2,566 3,985 7,800
4............................................... 808 3,353 5,197 10,192
5............................................... 2,012 8,435 13,115 25,622
6............................................... 2,022 8,479 13,183 25,753
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
As discussed in section IV.L.2 of this document, DOE estimated the
climate benefits likely to result from the reduced emissions of methane
and N2O that DOE estimated for each of the considered TSLs
for consumer clothes dryers. Table V.37 presents the value of the
CH4 emissions reduction at each TSL, and Table V.38 presents
the value of the N2O emissions reduction at each TSL. The
time series of annual values is presented for the selected TSL in
chapter 14 of the direct final rule TSD.
Table V.37--Present Value of Methane Emissions Reduction for Consumer Clothes Dryers Shipped in 2027-2056 *
----------------------------------------------------------------------------------------------------------------
SC-CH4 case discount rate and statistics
---------------------------------------------------------------
TSL 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
----------------------------------------------------------------------------------------------------------------
1............................................... 57 165 229 438
2............................................... 156 450 623 1,193
3............................................... 259 754 1,046 1,996
4............................................... 331 954 1,321 2,527
5............................................... 801 2,342 3,252 6,200
6............................................... 805 2,354 3,268 6,230
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
Table V.38--Present Value of Nitrous Oxide Emissions Reduction for Consumer Clothes Dryers Shipped in 2027-2056
*
----------------------------------------------------------------------------------------------------------------
SC-N2O case discount rate and statistics
---------------------------------------------------------------
TSL 3% 95th
5% Average 3% Average 2.5% Average percentile
----------------------------------------------------------------------------------------------------------------
(million 2022$)
----------------------------------------------------------------------------------------------------------------
1............................................... 0.4 1.6 2.5 4.4
2............................................... 1.2 4.6 7.1 12.3
3............................................... 1.9 7.5 11.6 20.0
4............................................... 2.7 10.3 15.8 27.4
5............................................... 7.1 27.6 42.5 73.6
6............................................... 7.1 27.8 42.7 74.0
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
global and U.S. economy continues to evolve rapidly. DOE, together with
other Federal agencies, will continue to review methodologies for
estimating the monetary value of reductions in CO2 and other
GHG emissions. This ongoing
[[Page 18230]]
review will consider the comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. DOE notes, however, that the
adopted standards would be economically justified even without
inclusion of monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the economic benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for consumer clothes
dryers. The dollar-per-ton values that DOE used are discussed in
section IV.L.2 of this document. Table V.39 presents the present value
for NOX emissions reductions for each TSL calculated using
7-percent and 3-percent discount rates, and Table V.40 presents similar
results for SO2 emissions reductions. The results in these
tables reflect application of EPA's low dollar-per-ton values, which
DOE used to be conservative. The time series of annual values is
presented for the selected TSL in chapter 14 of the direct final rule
TSD.
Table V.39--Present Value of NOX Emissions Reduction for Consumer
Clothes Dryers Shipped in 2027-2056 *
------------------------------------------------------------------------
7% Discount 3% Discount
TSL rate rate
------------------------------------------------------------------------
million 2022$
------------------------------------------------------------------------
1....................................... 502 1,167
2....................................... 1,391 3,216
3....................................... 2,217 5,305
4....................................... 2,962 6,887
5....................................... 7,133 17,135
6....................................... 7,168 17,222
------------------------------------------------------------------------
Note: Results are based on the low benefit-per-ton values.
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
Table V.40--Present Value of SO2 Emissions Reduction for Consumer
Clothes Dryers Shipped in 2027-2056 *
------------------------------------------------------------------------
7% Discount 3% Discount
TSL rate rate
------------------------------------------------------------------------
million 2022$
------------------------------------------------------------------------
1....................................... 93 209
2....................................... 265 594
3....................................... 415 963
4....................................... 590 1,333
5....................................... 1,541 3,630
6....................................... 1,550 3,651
------------------------------------------------------------------------
* The analysis period for TSL 3 (the Recommended TSL) is 2028-2057.
Not all the public health and environmental benefits from the
reduction of greenhouse gases, NOX, and SO2 are
captured in the values above, and additional unquantified benefits from
the reductions of those pollutants as well as from the reduction of
direct particulate matter (``PM'') and other co-pollutants may be
significant. DOE has not included monetary benefits of the reduction of
Hg emissions because the amount of reduction is very small.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No
other factors were considered in this analysis.
8. Summary of Economic Impacts
Table V.41 presents the NPV values that result from adding the
estimates of the economic benefits resulting from reduced GHG and
NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered products and are measured for the
lifetime of products shipped during the period 2027-2056.\127\ The
climate benefits associated with reduced GHG emissions resulting from
the adopted standards are global benefits and are also calculated based
on the lifetime of consumer clothes dryers shipped during the period
2027-2056.\128\
---------------------------------------------------------------------------
\127\ The analysis period for TSL 3 (the Recommended TSL) is
2028-2057.
\128\ Id.
Table V.41--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.................................. 5.6 16.7 27.2 29.2 54.8 54.2
3% Average SC-GHG case.................................. 6.2 18.2 29.7 32.4 62.8 62.2
2.5% Average SC-GHG case................................ 6.6 19.2 31.4 34.6 68.4 67.9
3% 95th percentile SC-GHG case.......................... 7.6 22.1 36.2 40.8 83.9 83.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.................................. 2.7 8.1 12.7 13.1 20.5 20.1
3% Average SC-GHG case.................................. 3.3 9.6 15.2 16.3 28.5 28.2
2.5% Average SC-GHG case................................ 3.6 10.6 16.9 18.5 34.1 33.8
3% 95th percentile SC-GHG case.......................... 4.7 13.5 21.7 24.7 49.6 49.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of 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)) In determining
whether a standard is economically justified, the Secretary must
determine whether the benefits of the standard exceed its burdens by,
to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
[[Page 18231]]
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For this direct final rule, DOE considered the impacts of amended
standards for consumer clothes dryers at each TSL, beginning with the
maximum technologically feasible level, to determine whether that level
was economically justified. Where the max-tech level was not justified,
DOE then considered the next most efficient level and undertook the
same evaluation until it reached the highest efficiency level that is
both technologically feasible and economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL, tables in this section present a summary of the results of
DOE's quantitative analysis for each TSL. In addition to the
quantitative results presented in the tables, DOE also considers other
burdens and benefits that affect economic justification. These include
the impacts on identifiable subgroups of consumers who may be
disproportionately affected by a national standard and impacts on
employment.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information; (2) a lack of sufficient salience of the long-term or
aggregate benefits; (3) a lack of sufficient savings to warrant
delaying or altering purchases; (4) excessive focus on the short-term,
in the form of inconsistent weighting of future energy cost savings
relative to available returns on other investments; (5) computational
or other difficulties associated with the evaluation of relevant
tradeoffs; and (6) a divergence in incentives (for example, between
renters and owners, or builders and purchasers). Having less-than-
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher-than-
expected rate between current consumption and uncertain future energy
cost savings.
It is important to recognize that while DOE is promulgating two
separate regulatory actions for energy efficiency standards for
residential clothes washers and consumer dryers, clothes washers and
dryers are complementary products, and they are sometimes sold and
purchased together as joint goods. This type of consumer purchasing
behavior is not typical of DOE energy efficiency standards. These
products are available in a variety of combinations and the efficiency
and/or product class of one product does not restrict the efficiency
and/or product class of the other. The efficiency levels are
independent of each other. Hence, DOE does not directly model the joint
purchasing decision of clothes washers and dryers in this rule. It is
possible that if only one machine fails, consumers could replace one
machine or could replace both machines jointly. If consumers replace
both machines when one fails, aggregate lifecycle costs would be the
combination of impacts as presented in both final rules.
Consumers value a variety of attributes in consumer clothes dryers.
These attributes can factor into consumer purchasing decisions along
with installation and operating cost. For example, DOE understands
certain consumers make purchasing decisions on non-efficiency
attributes such as color or other visual features such as control panel
layout, which may overlap with efficiency considerations related to and
a potential preference for mechanical over electronic controls.
One specific attribute related to the joint use of clothes washers
and dryers worth noting is the moisture content of clothes as consumers
wash and dry them. DOE recognizes that amended clothes washer standards
could result in less total moisture needing to be removed from the
clothing in a dryer, whereas amended clothes dryer standards could
result in a less energy-intensive process for removing that moisture.
As explained on page 99, the amended dryer test procedure in appendix
D2 includes incoming RMC values (i.e., a starting lower moisture
content for the load) that are more representative of the resulting
moisture content seen in high-efficiency clothes washers. Due to the
uniqueness of the Joint Recommendation where the clothes washer and
dryer proposals and compliance dates were aligned, the dryer rulemaking
encompasses these lower initial moisture values as a starting point for
the energy use analysis, so the effect of faster spin speeds resulting
in less ``wet'' clothes is already captured by DOE. The relative
comparison of efficiency levels for a given product would remain the
same, even if the baseline energy consumption were adjusted due to an
increase in efficiency in the complementary product.
General considerations for consumer welfare and preferences as well
as the special cases of complementary goods are areas DOE plans to
explore in a forthcoming RFI related to the agency's updates to its
overall analytic framework.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forego the
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a standard decreases the number of products
purchased by consumers, this decreases the potential energy savings
from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of product purchases in chapter 9
of the direct final rule TSD. However, DOE's current analysis does not
explicitly control for heterogeneity in consumer preferences,
preferences across subcategories of products or specific features, or
consumer price sensitivity variation according to household
income.\129\
---------------------------------------------------------------------------
\129\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883.
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\130\
---------------------------------------------------------------------------
\130\ Sanstad, A. H. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed July
1, 2021).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for Consumer Clothes Dryer
Standards
Table V.42 and Table V.43 summarize the quantitative impacts
estimated for each TSL for consumer clothes dryers. The national
impacts are measured over the lifetime of consumer clothes dryers
purchased in the 30-year period that begins in the anticipated year of
[[Page 18232]]
compliance with amended standards (2027-2056).\131\ The energy savings,
emissions reductions, and value of emissions reductions refer to full-
fuel-cycle results. DOE is presenting monetized benefits of GHG
emissions reductions in accordance with the applicable Executive orders
and DOE would reach the same conclusion presented in this notice in the
absence of the social cost of greenhouse gases, including the Interim
Estimates presented by the Interagency Working Group. The efficiency
levels contained in each TSL are described in section V.A of this
document.
---------------------------------------------------------------------------
\131\ The analysis period for TSL 3 (the Recommended TSL) is
2028-2057.
Table V.42--Summary of Analytical Results for Consumer Clothes Dryers TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings (quads)
----------------------------------------------------------------------------------------------------------------
Quads............................. 0.57 1.58 2.66 3.52 9.70 9.76
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction (Total FFC Emissions)
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 12.4 34.1 57.1 73.5 188.6 189.6
CH4 (thousand tons)............... 114.8 311.4 527.6 661.6 1,646 1,654
N2O (thousand tons)............... 0.1 0.3 0.5 0.6 1.7 1.7
NOX (thousand tons)............... 25.4 69.0 116.5 146.7 364.1 366.0
SO2 (thousand tons)............... 3.0 8.4 13.9 19.0 53.3 53.6
Hg (tons)......................... 0.02 0.1 0.1 0.1 0.4 0.4
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (3% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings... 4.3 12.7 21.1 28.8 77.4 77.8
Climate Benefits *................ 0.7 2.0 3.3 4.3 10.8 10.9
Health Benefits **................ 1.4 3.8 6.3 8.2 20.8 20.9
Total Benefits [dagger]........... 6.4 18.5 30.7 41.3 108.9 109.5
Consumer Incremental Product Costs 0.2 0.4 1.0 8.9 46.2 47.3
[Dagger].........................
Consumer Net Benefits............. 4.1 12.3 20.1 19.9 31.2 30.5
Total Net Benefits................ 6.2 18.2 29.7 32.4 62.8 62.2
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (7% discount rate, billions 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings... 2.0 6.1 9.8 13.7 35.2 35.4
Climate Benefits *................ 0.7 2.0 3.3 4.3 10.8 10.9
Health Benefits **................ 0.6 1.7 2.6 3.6 8.7 8.7
Total Benefits [dagger]........... 3.4 9.8 15.8 21.6 54.7 55.0
Consumer Incremental Product Costs 0.1 0.2 0.6 5.3 26.2 26.8
[Dagger].........................
Consumer Net Benefits............. 1.9 5.9 9.2 8.4 9.0 8.6
Total Net Benefits................ 3.3 9.6 15.2 16.3 28.5 28.2
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped during the
period 2027-2056 for all TSLs except TSL 3 (the Recommended TSL) and 2028-2057 for TSL 3. These results
include benefits to consumers which accrue after 2056 from the products shipped during the period 2027-2056
for all TSLs except for TSL 3 and 2057 from the products shipped during the period 2028-2057.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together,
these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3-percent discount rate are shown; however, DOE emphasizes the importance and
value of considering the benefits calculated using all four sets of SC-GHG estimates. To monetize the benefits
of reducing GHG emissions, this analysis uses the interim estimates presented in the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990
published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate.
Table V.43--Summary of Analytical Results for Consumer Clothes Dryers TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * TSL 6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No- 2,080.3-2,084.3...... 2,061.1-2,069.5 1,971.2-1,995.8 1,501.9-1,724.8 679.9-1,800.8 604.3-1,753.5
new-standards case INPV =
2,115.4).
Industry NPV (% change)........... (1.7)-(1.5).......... (2.6)-(2.2) (6.8)-(5.7) (29.0)-(18.5) (67.9)-(14.9) (71.4)-(17.1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 18233]]
Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric, Standard................ 150.................. 170 252 101 41 41
Electric, Compact (120 V)......... 53................... 83 66 66 66 (209)
Vented Electric, Compact (240 V).. 38................... 89 90 90 22 (230)
Vented Gas, Standard.............. 48................... 112 102 102 13 13
Ventless Electric, Compact (240 V) 0.................... 99 99 99 99 (102)
Ventless Electric, Combination 0.................... 10 11 10 10 (531)
Washer-Dryer.
Shipment-Weighted Average \*\..... 131.................. 159 224 100 36 29
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric, Standard................ 0.5.................. 0.5 0.6 2.1 5.8 5.8
Electric, Compact (120 V)......... 1.5.................. 1.5 2.2 2.2 2.2 18.1
Vented Electric, Compact (240 V).. 2.1.................. 1.5 2.0 2.0 6.6 20.4
Vented Gas, Standard.............. 2.5.................. 1.3 1.9 1.9 5.0 5.0
Ventless Electric, Compact (240 V) 0.0.................. 0.4 0.4 0.4 0.4 11.4
Ventless Electric, Combination 0.0.................. 0.0 0.0 0.0 0.0 46.3
Washer-Dryer.
Shipment-Weighted Average \*\..... 0.9.................. 0.6 0.8 2.1 5.6 6.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric, Standard................ 1.2.................. 0.9 0.9 48.0 63.1 63.1
Electric, Compact (120 V)......... 4.8.................. 5.1 21.4 21.7 21.7 90.9
Vented Electric, Compact (240 V).. 5.7.................. 4.6 12.4 12.6 60.7 92.8
Vented Gas, Standard.............. 2.7.................. 1.7 7.1 7.0 68.7 68.7
Ventless Electric, Compact (240 V) 0.0.................. 0.0 0.0 0.0 0.0 58.6
Ventless Electric, Combination 0.0.................. 0.0 0.0 0.0 0.0 95.0
Washer-Dryer.
Shipment-Weighted Average \*\..... 1.5.................. 1.0 2.0 40.4 63.3 64.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each product class in total projected shipments in 2027 for all TSLs except TSL 3 and in 2028 for TSL 3.
DOE first considered TSL 6, which represents the max-tech
efficiency level and includes the design parameters of the most
efficient products available on the market or in working prototypes for
all product classes. The max-tech design options include heat pump
technology for electric consumer clothes dryers and inlet air preheat
technology for gas consumer clothes dryers. DOE's shipments analysis
estimates approximately 1 percent of annual consumer clothes dryer
shipments currently meet this level. TSL 6 would save an estimated 9.76
quads of energy, an amount DOE considers significant. Under TSL 6, the
NPV of consumer benefit would be $8.6 billion using a discount rate of
7 percent, and $30.5 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 189.6 Mt of
CO2, 53.6 thousand tons of SO2, 366.0 thousand
tons of NOX, 0.4 ton of Hg, 1,654 thousand tons of
CH4, and 1.7 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 6 is $10.9 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 6 is $8.7 billion using a 7-percent discount rate and $20.9 billion
using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 6 is $28.2
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 6 is $62.2 billion. The estimated total
NPV is provided for additional information; however, DOE primarily
relies upon the NPV of consumer benefits when determining whether a
standard level is economically justified.
At TSL 6, the average LCC impact on affected consumers is a savings
of $41 for electric standard, -$209 for electric compact (120V), -$230
for vented electric compact (240V), $13 for vented gas standard, -$102
for ventless
[[Page 18234]]
electric compact (240V), and -$531 for ventless electric combination
washer-dryer. The simple PBP is 6 years for electric standard, 18 years
for electric compact (120V), 20 years for vented electric compact
(240V), 5 years for vented gas standard, 11 years for ventless electric
compact (240V), and 46 years for ventless electric combination washer-
dryer. The fraction of consumers experiencing a net LCC cost is 63
percent for electric standard, 91 percent for electric compact (120V),
93 percent for vented electric compact (240V), 69 percent for vented
gas standard, 59 percent for ventless electric compact (240V), and 95
percent for ventless electric combination washer-dryer. Overall, across
the product classes, the majority of consumers will experience a net
LCC cost, especially for senior households. DOE estimated that more 72
percent of senior-only households will experience a net LCC cost at TSL
6.
At TSL 6, the projected change in INPV ranges from a decrease of
$1,511.1 million to a decrease of $361.9 million, corresponding to
decreases of 71.4 percent and 17.1 percent, respectively. The loss in
INPV is largely driven by industry conversion costs as manufacturers
work to redesign their portfolios of model offerings and retool entire
factories to comply with amended standards at this level. Industry
conversion costs could reach $1,516.9 million at this TSL.
Conversion costs at TSL 6 are significant, as nearly all existing
consumer clothes dryer models would need to be redesigned to meet the
max-tech efficiencies. Approximately 1 percent of industry shipments
currently meet TSL 6. For the electric clothes dryer product classes,
manufacturers would need to implement heat pump technology to meet max-
tech levels. Out of the 19 OEMs that manufacture electric consumer
clothes dryers, nine OEMs offer heat pump models for the U.S. market.
The remaining 10 OEMs do not offer any models for the domestic market
that utilize heat pump technology. A standard that could only be met
using heat pump technology would require a total renovation of existing
production facilities and would require most manufacturers to design
completely new clothes dryer platforms, as they would not be able to
maintain the resistive heating designs that currently dominate the U.S.
electric clothes dryer market. In interviews, several manufacturers
expressed concern about a potential shortage of products given the
required scale of investment, redesign efforts, and 3-year compliance
timeline.
For gas consumer clothes dryers, manufacturers would need to
implement inlet air preheat technology along with other design options
to meet the efficiency levels required by TSL 6. Thus far, consumer
clothes dryers with this technology and performance have not been
observed in consumer clothes dryers available on the consumer market.
Consumer clothes dryers with inlet air preheat designs have been
observed only in laboratory settings. In interviews, some manufacturers
raised concerns about implementing a relatively untested technology for
the consumer market. There is very little industry experience with
inlet air preheat designs. Several manufacturers speculated that
implementing inlet air preheat technology would require a major
overhaul of existing production facilities and a significant amount of
engineering time.
At this level, DOE estimates an 11-percent drop in shipments in the
year the standard takes effect compared to the no-new-standards case,
as price-sensitive consumers may forgo purchasing a new clothes dryer
or rely on alternatives such as repair or purchasing a used dryer due
to the increased upfront cost of baseline models.
The Secretary concludes that at TSL 6 for consumer clothes dryers,
the benefits of energy savings, positive NPV of consumer benefits,
emission reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on many
consumers, especially senior-only households, as well as the impacts on
manufacturers, including the potential for large conversion costs and
reduction in INPV.
TSL 6, representing the most efficient heat pump technology on the
market, would provide significant energy savings potential, as
discussed. Despite the current and potential future benefits of heat
pump technology, the analysis at TSL 6 indicates that a significant
fraction of consumers, including low-income and senior-only households,
would experience a net cost given the current relatively high
incremental cost of certain consumer clothes dryers at the max-tech
efficiency level. This is particularly pronounced for electric standard
clothes dryers, where the incremental production cost at the max-tech
efficiency level is comparable to the manufacturer production cost for
the baseline efficiency level. Consumers with existing electric
standard clothes dryers below EL 4 (about 55 percent) and consumers
with existing vented gas standard clothes dryers below EL 3 (about 50
percent) are more likely to experience a net cost at TSL 6, given the
relatively modest decrease in operating costs compared to the high
incremental installed costs as represented by the weighted average LCC
savings of $30. Few products currently meet the efficiency levels
required by TSL 6. DOE estimates that approximately 1 percent of
current shipments meet the max-tech efficiencies. At max-tech, limited
industry experience by certain manufacturers with the high-efficiency
design options, the large conversion costs to update facilities and
product designs, and expected drop in industry shipments would result
in a reduction of INPV and a potential shortage of products given the
required scale of investment, redesign efforts, and time constraints.
Consequently, the Secretary has concluded that TSL 6 is not
economically justified.
DOE then considered TSL 5, which represents the maximum energy
savings with maximum positive NPV. TSL 5 corresponds to the max-tech
level (EL 7), which represents heat pump technology, for the electric
standard product class, and the efficiency levels corresponding to
modulating (2-stage) heating technology in the electric compact (120V)
and inlet air preheat technology in the vented electric compact (240V)
product classes considered in this analysis. For the vented gas
standard product class, TSL 5 corresponds to the max-tech level (EL 4),
which represents inlet air preheat technology. TSL 5 would save an
estimated 9.70 quads of energy, an amount DOE considers significant.
Under TSL 5, the NPV of consumer benefit would be $9.0 billion using a
discount rate of 7 percent, and $31.2 billion using a discount rate of
3 percent.
The cumulative emissions reductions at TSL 5 are 188.6 Mt of
CO2, 53.3 thousand tons of SO2, 364.1 thousand
tons of NOX, 0.4 ton of Hg, 1,646 thousand tons of
CH4, and 1.7 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 5 is $10.8 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $ 8.7 billion using a 7-percent discount rate and $20.8
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 5 is $28.5
billion.
[[Page 18235]]
Using a 3-percent discount rate for all benefits and costs, the
estimated total NPV at TSL 5 is $62.8 billion. The estimated total NPV
is provided for additional information, however DOE primarily relies
upon the NPV of consumer benefits when determining whether a standard
level is economically justified.
At TSL 5, the average LCC impact on affected consumers is a savings
of $41 for electric standard, $66 for electric compact (120V), $22 for
vented electric compact (240V), $13 for vented gas standard, $99 for
ventless electric compact (240V), and $10 for ventless electric
combination washer-dryer. The simple PBP is 6 years for electric
standard, 2 years for electric compact (120V), 7 years for vented
electric compact (240V), 5 years for vented gas standard, 0.4 years for
ventless electric compact (240V), and zero years for ventless electric
combination washer-dryer. The fraction of consumers experiencing a net
LCC cost is 63 percent for electric standard, 22 percent for electric
compact (120V), 61 percent for vented electric compact (240V), 69
percent for vented gas standard, and zero percent for ventless electric
compact (240V) and ventless electric combination washer-dryer. Overall,
across the product classes, approximately 63 percent of consumers will
experience a net LCC cost, especially for senior-only households. DOE
estimated that more than 71 percent of senior-only households will
experience a net LCC cost at TSL 5.
At TSL 5, the projected change in INPV ranges from a decrease of
$1,435.5 million to a decrease of $314.6 million, corresponding to
decreases of 67.9 percent and 14.9 percent, respectively. Industry
conversion costs could reach $1,436.9 million at this TSL.
DOE's shipments analysis estimates approximately 2 percent of
annual shipments currently meet this level. At TSL 5, the efficiency
levels and analyzed design options for electric standard and vented gas
standard dryers (which together account for approximately 98 percent of
industry shipments) are the same as at max-tech. Thus, requiring heat
pump technology for electric standard dryers and inlet air preheat for
vented gas standard dryers would result in similar conversion costs,
reduction in INPV, and drop in shipments as TSL 6.
At this level, DOE estimates a 11-percent drop in shipments in the
year the standard takes effect compared to the no-new-standards case,
as price-sensitive consumers may forgo purchasing a new clothes dryer
or rely on alternatives such as repair or purchasing a used dryer due
to the increased upfront cost of baseline models.
The Secretary concludes that at TSL 5 for consumer clothes dryers,
the benefits of energy savings, positive NPV of consumer benefits,
emission reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on many
consumers, especially senior-only households, as well as the impacts on
manufacturers, including the significant conversion costs and large
potential reduction in INPV. A significant fraction of electric
standard clothes dryer consumers, including low-income and senior-only
households, would experience a net cost. This is due to the high
incremental cost of electric standard clothes dryers at the max-tech
efficiency level. Consumers with existing electric standard clothes
dryers below EL 4 are more likely to experience a net cost at TSL 5,
given the relatively modest decrease in operating costs compared to the
high incremental installed costs. DOE estimates that approximately 2
percent of shipments currently meet the efficiencies required by this
TSL. At TSL 5, the limited industry experience by certain manufacturers
with the high-efficiency design options, the large conversion costs to
update facilities and product designs, and expected drop in industry
shipments would result in a reduction of INPV and a potential shortage
of products given the required scale of investment, redesign efforts,
and time constraints. Consequently, the Secretary has concluded that
TSL 5 is not economically justified.
DOE then considered TSL 4, which represents the maximum national
energy savings with simple PBP less than 4 years for each product
class. TSL 4 corresponds to the EL that represents inlet air preheat
technology for the electric standard product class considered in this
analysis. For the electric compact (120V) and vented electric compact
(240V) product classes, TSL 4 corresponds to EL 4, which represents
modulating (2-stage) heating technology. For the vented gas standard
product class, TSL 4 corresponds to EL 3, which also represents
modulating (2-stage) heating technology. TSL 4 would save an estimated
3.52 quads of energy, an amount DOE considers significant. Under TSL 4,
the NPV of consumer benefit would be $8.4 billion using a discount rate
of 7 percent, and $19.9 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 73.5 Mt of
CO2, 19.0 thousand tons of SO2, 146.7 thousand
tons of NOX, 0.1 ton of Hg, 661.6 thousand tons of
CH4, and 0.6 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 4 is $4.3 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $3.6 billion using a 7-percent discount rate and $8.2 million
using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 4 is $16.3
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $32.4 billion. The estimated total
NPV is provided for additional information; however, DOE primarily
relies upon the NPV of consumer benefits when determining whether a
standard level is economically justified.
At TSL 4, the average LCC impact on affected consumers is a savings
of $101 for electric standard, $66 for electric compact (120V), $90 for
vented electric compact (240V), $102 for vented gas standard, $99 for
ventless electric compact, and $10 for ventless electric combination
washer-dryer. The simple PBP is 2 years for electric standard, 2 years
for electric compact (120V), 2 years for vented electric compact
(240V), 2 years for vented gas standard, 0.4 years for ventless
electric compact (240V), and 0 years for ventless electric combination
washer-dryer. The fraction of consumers experiencing a net LCC cost is
48 percent for electric standard, 22 percent for electric compact
(120V), 13 percent for vented electric compact (240V), 7 percent for
vented gas standard, and zero percent for ventless electric compact
(240V) and ventless electric combination washer-dryer. Overall, across
the product classes, approximately 40 percent of consumers will
experience a net LCC cost, especially for senior households. DOE
estimated that about 45 percent of senior-only households will
experience a net LCC cost at TSL 4.
At TSL 4, the projected change in INPV ranges from a decrease of
$613.5 million to a decrease of $390.6 million, corresponding to
decreases of 29.0 percent and 18.5 percent, respectively. Industry
conversion costs could reach $667.5 million at this TSL.
At TSL 4, the majority of consumer clothes dryer models would need
to be redesigned to meet the efficiency levels required. DOE's
shipments analysis
[[Page 18236]]
estimates approximately 15 percent of current shipments meet this
level. For electric standard dryers, the design options include
implementing inlet air preheat and other features. As previously noted,
electric standard dryers account for approximately 81 percent of total
shipments. At the current time, there is very little industry
experience with inlet air preheat designs. Currently, DOE is not aware
of any consumer clothes dryers on the market utilizing this design
option. DOE's shipments analysis estimates that approximately 7 percent
of electric standard shipments currently meet the efficiency required
by TSL 4. Implementing inlet air preheat for electric standard dryers
would represent a major overhaul of existing product lines and
manufacturing facilities. This change would necessitate significant
investments in new equipment and tooling. Product conversion costs
would be necessary for designing, prototyping, and testing new or
updated platforms.
For vented gas standard clothes dryers, the analyzed design option
at TSL 4 includes modulating (2-stage) heat technology, among other
design options. Out of the nine OEMs that manufacture vented gas
standard clothes dryers, eight offer products that meet the
efficiencies required at TSL 4. DOE does not believe that there are any
substantive barriers to modulating (2-stage) heating technology.
Capital conversion costs would be necessary as manufacturers increase
tooling for 2-stage heating systems. Product conversion costs would be
necessary for cost-optimizing and testing new designs for a market with
amended standards.
At this level, DOE does not expect a notable drop in shipments in
the year the standard takes effect.
The Secretary concludes that at TSL 4 for consumer clothes dryers,
the benefits of energy savings, positive NPV of consumer benefits,
emission reductions, and the estimated monetary value of the emissions
reductions would be outweighed by the economic burden on many
consumers, especially senior-only households, as well as the impacts on
manufacturers, including the conversion costs and profit margin impacts
that could result in a large reduction in INPV. A significant fraction
of electric standard clothes dryer consumers, including senior-only
households, would experience a net cost. This is due to the high
incremental cost of electric standard clothes dryers at the inlet air
preheat technology efficiency level. Consumers with existing electric
standard clothes dryers below EL 4 are more likely to experience a net
cost at TSL 4, given the relatively modest decrease in operating costs
compared to the high incremental installed costs. For electric standard
dryers, DOE estimates that approximately 7 percent of shipments
currently meet the efficiency level required by this TSL. At TSL 4, the
limited industry experience of electric standard dryer manufacturers
with inlet air preheat technology and the large conversion costs to
update facilities and product designs, would result in a large
reduction of INPV. Consequently, the Secretary has concluded that TSL 4
is not economically justified.
DOE then considered the Recommended TSL, which represents a set of
intermediate efficiency levels between those designated in TSL 2 and
TSL 4 and corresponds to the current ENERGY STAR efficiency levels for
the electric standard and vented gas standard product classes, which
represent approximately 98 percent of the market. The Recommended TSL
corresponds to the EL that represents modulating (2-stage) heating
technology for the electric standard and electric compact (120V)
product classes. For the vented gas standard product class, the
Recommended TSL corresponds to EL 3, which also represents modulating
(2-stage) heating technology. For the vented gas compact product class,
the Recommended TSL corresponds to baseline CEFD2. For the
electric compact (240V) product classes, the Recommended TSL
corresponds to EL 2 for vented consumer clothes dryers, which
represents a model with an optimized heating system and EL 1 for
ventless consumer clothes dryers, which represents a baseline model
with a more advanced automatic termination control system. For the
ventless electric combination washer-dryer product class, the
Recommended TSL corresponds to EL 1, which represents a baseline model
with high-speed spin technology. The Recommended TSL would save an
estimated 2.66 quads of energy, an amount DOE considers significant.
Under the Recommended TSL, the NPV of consumer benefit would be $9.23
billion using a discount rate of 7 percent, and $20.08 billion using a
discount rate of 3 percent.
The cumulative emissions reductions at the Recommended TSL are 57.1
Mt of CO2, 13.9 thousand tons of SO2, 116.5
thousand tons of NOX, 0.1 ton of Hg, 527.6 thousand tons of
CH4, and 0.5 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 3 is $3.3 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is $2.6 billion using a 7-percent discount rate and $6.3 billion
using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at the Recommended
TSL is $15.2 billion. Using a 3-percent discount rate for all benefits
and costs, the estimated total NPV at the Recommended TSL is $29.7
billion. The estimated total NPV is provided for additional
information; however, DOE primarily relies upon the NPV of consumer
benefits when determining whether a standard level is economically
justified.
At the Recommended TSL, the average LCC impact on affected
consumers is a savings of $252 for electric standard, $66 for electric
compact (120V), $90 for vented electric compact (240V), $102 for vented
gas standard, $99 for ventless electric compact, and $11 for ventless
electric combination washer-dryer. The simple PBP is 1 year for the
largest product class (electric standard), 2 years for electric compact
(120V), 2 years for vented electric compact (240V), 2 years for vented
gas standard, 0.4 years for ventless electric compact (240V), and 0
years for ventless electric combination washer-dryer. The fraction of
consumers experiencing a net LCC cost is 1 percent for electric
standard, 21 percent for PC 2, 12 percent for vented electric compact
(240V), 7 percent for vented gas standard, and zero percent for
ventless electric compact (240V) and ventless electric combination
washer-dryer. Overall, across the product classes, approximately 2
percent of consumers, including low-income and senior-only households,
will experience a net LCC cost.
At the Recommended TSL, the projected change in INPV ranges from a
decrease of $144.2 million to a decrease of $119.7 million,
corresponding to decreases of 6.8 percent and 5.7 percent,
respectively. Industry conversion costs could reach $180.7 million at
this TSL.
DOE expects that some existing consumer clothes dryer models would
need to be redesigned to meet the Recommended TSL efficiencies, but
there are a wide range of available models for vented electric standard
dryers due to participation in the ENERGY STAR program. DOE's shipments
analysis estimates approximately 48 percent of annual shipments
currently meet this level. For electric standard, electric compact
[[Page 18237]]
(120V), vented electric compact (240V), and vented gas standard clothes
dryers, which account for approximately 99 percent of total annual
shipments, the design options include implementing electronic controls,
optimized heating systems, more advanced automatic termination
controls, and modulating (2-stage) heat. Of the 19 electric dryer OEMs,
14 offer products at or above the efficiencies required for the
electric dryer product classes at the Recommended TSL. Out of the nine
OEMs that manufacture vented gas standard clothes dryers, eight offer
products that meet the efficiencies required at the Recommended TSL.
Capital conversion costs may be necessary as manufacturers increase
tooling for 2-stage heating systems. Manufacturers may choose to
further cost-optimize and test new designs as a result of the
standards, but DOE believes some of this has already occurred in
response to ENERGY STAR. DOE does not expect any drop in shipments in
the year the standard takes effect.
For all TSLs considered in this direct final rule--except for the
Recommended TSL--DOE is bound by the 3-year lead time requirements in
EPCA when determining compliance dates (i.e., compliance with amended
standards required in 2027). For the Recommended TSL, DOE's analysis
utilized the March 1, 2028, compliance date specified in the Joint
Agreement as it was an integral part of the multi-product joint
recommendation. A 2028 compliance year provides manufacturers
additional flexibility to spread capital requirements, engineering
resources, and conversion activities over a longer period of time
depending on the individual needs of each manufacturer.
At the Recommended TSL, DOE's data demonstrate no negative impact
on consumer utility for consumer clothes dryers. In addition, the
second joint statement from the same group of stakeholders that
submitted the Joint Agreement states that DOE's test data show, and
industry experience agrees, that the recommended standard level for
consumer clothes dryers will not result in significant differences in
cycle time and will adequately dry clothes.\132\ Based on the
information available, DOE concludes that no lessening of product
utility or performance would occur at the Recommended TSL.
---------------------------------------------------------------------------
\132\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0058.
---------------------------------------------------------------------------
After considering the analysis and weighing the benefits and
burdens, the Secretary has concluded that a standard set at the
Recommended TSL for consumer clothes dryers would result in the maximum
improvement in energy efficiency that is technologically feasible and
economically justified and also result in the significant conservation
of energy. At this TSL, the average LCC savings for all consumer
clothes dryer product classes are positive. An estimated weighted
average of 2 percent of consumer clothes dryer consumers would
experience a net cost. The FFC national energy savings are significant
and the NPV of consumer benefits is positive using both a 3-percent and
7-percent discount rate. Notably, the benefits to consumers vastly
outweigh the cost to manufacturers. At the Recommended TSL, the NPV of
consumer benefits, even measured at the more conservative discount rate
of 7 percent, is over 64 times higher than the maximum estimated
manufacturers' loss in INPV. The positive LCC savings--a different way
of quantifying consumer benefits--reinforces this conclusion. The
standard levels at the Recommended TSL are economically justified even
without weighing the estimated monetary value of emissions reductions.
When those emissions reductions are included--representing $3.3 billion
in climate benefits (associated with the average SC-GHG at a 3-percent
discount rate), and $6.3 billion (using a 3-percent discount rate) or
$2.6 billion (using a 7-percent discount rate) in health benefits--the
rationale becomes stronger still.
As stated, DOE conducts the walk-down analysis to determine the TSL
that represents the maximum improvement in energy efficiency that is
technologically feasible and economically justified as required under
EPCA. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to the statute. 86 FR 70892, 70908.
Although DOE has not conducted a comparative analysis to select the
amended energy conservation standards, DOE notes that as compared to
TSL 6, TSL 5, and TSL 4, the Recommended TSL has higher average LCC
savings, smaller percentages of consumers experiencing a net cost, a
lower maximum decrease in INPV, and lower manufacturer conversion
costs.
Although DOE considered amended standard levels for consumer
clothes dryers by grouping the efficiency levels for each product class
into TSLs, DOE evaluates all analyzed efficiency levels in its
analysis. Accordingly, the Secretary has concluded that the Recommended
TSL would offer the maximum improvement in efficiency that is
technologically feasible and economically justified and would result in
the significant conservation of energy. For electric standard and
vented gas standard consumer clothes dryers, which account for
approximately 98 percent of U.S. shipments, requiring efficiency levels
above the levels required by the Recommended TSL result in a large
percentage of consumers experiencing a net LCC cost, in addition to
significant manufacturer impacts and reductions in INPV. Additionally,
for consumer clothes dryers, most manufacturers offer products that can
meet the Recommended TSL across both electric and gas consumer clothes
dryers. In addition, the Recommended TSL corresponds to the current
ENERGY STAR levels for electric standard and vented gas standard
clothes dryers, which have significant market share and manufacturer
support due to their promotion over the past couple of years as a
voluntary energy efficiency program. The adoption of standards, if
finalized, at this TSL may encourage ENERGY STAR to further consider
more efficient levels for dryers in the year leadings up to the
compliance of date of the standard, which would in turn likely spur
additional market introductions of consumer clothes dryers with heat
pump technology, foster maturation of the technology and downward price
trends, and further support differentiation within the dryer market for
energy efficient products. For electric and vented gas standard
consumer clothes dryers, the Recommended TSL is comprised of EL 4 and
EL 3, respectively, resulting in higher LCC savings, a significant
reduction in the number of consumers experiencing a net cost, a lower
maximum decrease in INPV, and lower conversion costs to the point where
DOE has concluded they are economically justified, as discussed for the
Recommended TSL in the preceding paragraphs.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for consumer clothes dryers at the
Recommended TSL.
While DOE considered each potential TSL under the criteria laid out
in 42 U.S.C. 6295(o) as discussed above, DOE notes that the Recommended
TSL for consumer clothes dryers adopted in this direct final rule is
part of a multi-product Joint Agreement covering six rulemakings
(residential clothes washers; consumer clothes dryers;
[[Page 18238]]
consumer conventional cooking products; dishwashers; refrigerators,
refrigerator-freezers, and freezers; and miscellaneous refrigeration
products). The signatories indicated that the Joint Agreement for the
six rulemakings should be considered as a joint statement of
recommended standards, to be adopted in its entirety. As discussed in
section V.B.2.e of this document, many consumer clothes dryer OEMs also
manufacture residential clothes dryers; consumer conventional cooking
products; dishwashers; refrigerators, refrigerator-freezers, and
freezers; and miscellaneous refrigeration products. Therefore, there
are potential integrated benefits to the Joint Agreement. Rather than
requiring compliance with five amended standards in a single year
(2027),\133\ the negotiated multi-product Joint Agreement staggers the
compliance dates for the five amended standards over a 4-year period
(2027-2030). In response to the August 2022 NOPR, AHAM expressed
concerns about the timing of ongoing home appliance rulemakings.
Specifically, AHAM commented that there are a number of ongoing
regulations that impact consumer clothes dryer manufacturers. (AHAM,
No. 46 at p. 13) AHAM has submitted similar comments to other ongoing
home appliance rulemakings.\134\ As AHAM is a key signatory of the
Joint Agreement, DOE understands that the compliance dates recommended
in the Joint Agreement would help reduce cumulative regulatory burden.
These compliance dates help relieve concern on the part of some
manufacturers about their ability to allocate sufficient resources to
comply with multiple concurrent amended standards and about the need to
align compliance dates for products that are typically designed or sold
as matched pairs. The Joint Agreement also provides additional years of
regulatory certainty for manufacturers and their suppliers.
---------------------------------------------------------------------------
\133\ The analyses for residential clothes washers (88 FR
13520); consumer clothes dryers (87 FR 51734); consumer conventional
cooking products (88 FR 6818); dishwashers (88 FR 32514); and
refrigerators, refrigerator-freezers, and freezers (88 FR 12452)
utilized a 2027 compliance year for analysis at the proposed rule
stage. Miscellaneous refrigeration products (88 FR 12452) utilized a
2029 compliance year for the NOPR analysis.
\134\ AHAM has submitted written comments regarding cumulative
regulatory burden for the other five rulemakings included in the
multi-product Joint Agreement. AHAM's written comments on cumulative
regulatory burden are available at: www.regulations.gov/comment/EERE-2017-BT-STD-0014-0464 (pp. 41-44) for residential clothes
washers; www.regulations.gov/comment/EERE-2014-BT-STD-0005-2285 (pp.
44-47) for consumer conventional cooking products;
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051 (pp. 21-24)
for dishwashers; www.regulations.gov/comment/EERE-2017-BT-STD-0003-0069 (pp. 20-22) for refrigerators, refrigerator-freezers, and
freezers; and www.regulations.gov/comment/EERE-2020-BT-STD-0039-0031
(pp. 12-15) for miscellaneous refrigeration products.
---------------------------------------------------------------------------
For residential clothes washers and consumer clothes dryers
specifically, aligned compliance dates would help reduce cumulative
regulatory burden for the 13 OEMs that manufacture both residential
clothes washers and consumer clothes dryers. In response to the August
2022 NOPR, AHAM commented that laundry products (RCWs and consumer
clothes dryers) are designed and used in pairs. (AHAM, No. 46 at p. 10)
AHAM stated that an additional design cycle for clothes washers and/or
clothes dryers may be necessary if the effective compliance dates for
the two products were out of sync. AHAM further stated that coordinated
compliance dates would greatly reduce burden on manufacturers and
retailers. (Id.)
The amended energy conservation standards for consumer clothes
dryers, which are expressed as CEFD2, are shown in Table
V.44.
Table V.44--Amended Energy Conservation Standards for Consumer Clothes
Dryers
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Product class
------------------------------------------------------------------------
(i) Electric, Standard (4.4 ft3 or greater capacity).... 3.93
(ii) Electric, Compact (120V) (less than 4.4 ft3 4.33
capacity)..............................................
(iii) Vented Electric, Compact (240V) (less than 4.4 ft3 3.57
capacity)..............................................
(iv) Ventless Electric, Combination Washer-Dryer........ 2.33
(v) Vented Gas, Standard (4.4 ft3 or greater capacity).. 3.48
(vi) Ventless Electric, Compact (240V) (less than 4.4 2.68
ft3 capacity)..........................................
(vii) Vented Gas, Compact (less than 4.4 ft3 capacity).. 2.02
------------------------------------------------------------------------
NEEA, the Joint Commenters, and Samsung supported DOE's proposed
TSL 3, which aligns with the Recommended TSL in this direct final rule,
given the national energy savings, life-cycle cost savings, and
reasonable manufacturer impacts. According to the Joint Commenters, TSL
3 provides large cost savings for all consumer groups, including low-
income households. Samsung supported DOE's proposed TSL 3 and believes
the test sample adequately represents the current marketplace. (NEEA,
No. 45 at p. 2; Joint Commenters, No. 51 at p. 2; Samsung, No. 54 at p.
2)
NYSERDA also supported DOE's proposal in the August 2022 NOPR and
urged expedient adoption of the amended standards given significant LCC
savings, reasonable payback periods, significant GHG emissions
reductions, energy savings, and monetary benefits for consumers in New
York and beyond, and the aging out of a significant portion of the
installed dryer stock in New York. According to the 2019 New York
Residential Building Stock Assessment, 49 percent of New York consumer
clothes dryers are over 10 years old, and another 81 percent are 5
years or older. NYSERDA stated that based on DOE's assumption of a
product lifetime average of 14 years, a significant number of dryers in
New York will be due for replacement around the time of the new
standard, but only if DOE finalizes this standard promptly. (NYSERDA,
No. 48 at pp. 1-2)
While the California IOUs supported DOE's conclusion that TSL 3
represented an economically justified and technologically feasible
efficiency level achieving significant energy savings, the California
IOUs requested that DOE clarify the supporting data that led to the
conclusion that TSL 4 was not economically justified. The California
IOUs urged DOE to adopt TSL 3 at the earliest opportunity so that
consumers may obtain the significant savings provided from this level.
(California IOUs, No. 50 at pp. 1-2)
As previously stated, TSL 4 is not economically justified. Nearly
50 percent of electric standard clothes dryer users, including over 53
percent of senior-only households, would experience a net cost. This
can be
[[Page 18239]]
attributed to the high incremental cost of electric standard dryers
with the inlet air preheat technology efficiency level. Moreover, the
industry conversion costs for implementing TSL 4 could amount to $668
million, resulting in a substantial decrease in the manufacturer's
INPV. In addition, there is very little industry experience with inlet
air preheat designs. Currently, DOE is not aware of any consumer
clothes dryers on the market utilizing this design option. DOE's
shipments analysis estimates that approximately 7 percent of electric
standard shipments currently meet the efficiency required by TSL 4.
Implementing inlet air preheat for electric standard dryers would
represent a major overhaul of existing product lines and manufacturing
facilities.
2. Annualized Benefits and Costs of the Adopted Standards
The benefits and costs of the adopted standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2022$) of the
benefits from operating products that meet the adopted standards
(consisting primarily of operating cost savings from using less
energy), minus increases in product purchase costs, and (2) the
annualized monetary value of the climate and health benefits.
Table V.45 shows the annualized values for consumer clothes dryers
under the Recommended TSL, expressed in 2022$. The results under the
primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reductions, and the 3-percent
discount rate case for GHG social costs, the estimated cost of the
adopted standards for consumer clothes dryers is $60.0 million per year
in increased equipment installed costs, while the estimated annual
benefits are $971.4 million from reduced equipment operating costs,
$185.5 million in GHG reductions, and $259.9 million from reduced
NOX and SO2 emissions. In this case, the net
benefit amounts to $1,357 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the adopted standards for consumer clothes dryers is
$57.2 million per year in increased equipment costs, while the
estimated annual benefits are $1,177 million in reduced operating
costs, $185.5 million from GHG reductions, and $349.4 million from
reduced NOX and SO2 emissions. In this case, the
net benefit amounts to $1,654 million per year.
Table--V.45 Annualized Monetized Benefits and Costs of Energy Conservation Standards for Consumer Clothes Dryers
(the Recommended TSL)
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
Estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 1,177 1,103 1,230
Climate Benefits*............................................... 185.5 178.9 187.8
Health Benefits* *.............................................. 349.4 337.2 353.7
Total Benefits[dagger].......................................... 1,712 1,619 1,771
Consumer Incremental Product Costs[Dagger]...................... 57.2 58.9 54.4
Net Benefits.................................................... 1,654 1,560 1,717
Change in Producer Cashflow (INPV[Dagger][Dagger]).............. (12)-(10) (12)-(10) (12)-(10)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 971.4 915.5 1,014
Climate Benefits *.............................................. 185.5 178.9 187.8
Health Benefits **.............................................. 259.9 251.5 262.8
Total Benefits[dagger].......................................... 1,417 1,346 1,464
Consumer Incremental Product Costs[Dagger]...................... 60.0 61.2 57.7
Net Benefits.................................................... 1,357 1,285 1,407
Change in Producer Cashflow (INPV[Dagger][Dagger]).............. (12)-(10) (12)-(10) (12)-(10)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped in 2028-2057.
These results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057.
The Primary, Low-Net-Benefits, and High-Net-Benefits estimates utilize projections of energy prices from the
AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
incremental equipment costs reflect a medium decline rate in the Primary Estimate, a constant rate in the Low-
Net-Benefits Estimate, and a high decline rate in the High-Net-Benefits Estimate. The methods used to derive
projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits
and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate, and it
emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[[Page 18240]]
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes
all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the
manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE
also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J of
this document and chapter 12 of the direct final rule TSD. In the detailed MIA, DOE models manufacturers'
pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA
produces a range of impacts, which is the rule's expected impact on the INPV. The change in INPV is the
present value of all changes in industry cash flow, including changes in production costs, capital
expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry
weighted average cost of capital value of 7.5 percent that is estimated in the manufacturer impact analysis
(see chapter 12 of the direct final rule TSD for a complete description of the industry weighted average cost
of capital). For consumer clothes dryers, those values are -$12 million to -$10 million. DOE accounts for that
range of likely impacts in analyzing whether a TSL is economically justified. See section V.C of this
document. DOE is presenting the range of impacts to the INPV under two manufacturer markup scenarios: the
Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of
Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit scenario, where DOE
assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above
table, drawing on the MIA explained further in chapter 12 of the direct final rule TSD, to provide additional
context for assessing the estimated impacts of this direct final rule to society, including potential changes
in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to
include the INPV into the annualized net benefit calculation for this direct final rule, the annualized net
benefits, using the primary estimate, would range from $1,642 million to $,1644 million at 3-percent discount
rate and would range from $1,345 million to $1,347 million at 7-percent discount rate. Parentheses ( )
indicate negative values.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563 and 14094
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879
(April 11, 2023), requires agencies, to the extent permitted by law, to
(1) propose or adopt a regulation only upon a reasoned determination
that its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public. DOE emphasizes as well that E.O. 13563
requires agencies to use the best available techniques to quantify
anticipated present and future benefits and costs as accurately as
possible. In its guidance, the Office of Information and Regulatory
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. For the reasons stated in the preamble,
this final regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f) of
E.O. 12866. DOE has provided to OIRA an assessment, including the
underlying analysis, of benefits and costs anticipated from the final
regulatory action, together with, to the extent feasible, a
quantification of those costs; and an assessment, including the
underlying analysis, of costs and benefits of potentially effective and
reasonably feasible alternatives to the planned regulation, and an
explanation why the planned regulatory action is preferable to the
identified potential alternatives. These assessments are summarized in
this preamble and further detail can be found in the technical support
document for this rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
and a final regulatory flexibility analysis (``FRFA'') for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and
policies on February 19, 2003, to ensure that the potential impacts of
its rules on small entities are properly considered during the
rulemaking process. 68 FR 7990. DOE has made its procedures and
policies available on the Office of the General Counsel's website
(www.energy.gov/gc/office-general-counsel).
DOE is not obligated to prepare a regulatory flexibility analysis
for this rulemaking because there is not a requirement to publish a
general notice of proposed rulemaking under the Administrative
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously,
DOE has determined that the Joint Agreement meets the necessary
requirements under EPCA to issue this direct final rule for energy
conservation standards for consumer clothes dryers under the procedures
in 42 U.S.C. 6295(p)(4). DOE notes that the NOPR for energy
conservation standards for consumer clothes dryers published elsewhere
in this issue of the Federal Register contains a regulatory flexibility
analysis.
C. Review Under the Paperwork Reduction Act
Manufacturers of consumer clothes dryers must certify to DOE that
their products comply with any applicable energy conservation
standards. In certifying compliance, manufacturers must test their
products according to the DOE test procedures for consumer clothes
dryers, including any amendments adopted for those test procedures. DOE
has established regulations for the certification and recordkeeping
requirements for all covered consumer products and commercial
equipment, including consumer clothes dryers. (See generally 10 CFR
part 429.) The collection-of-information requirement for the
certification and recordkeeping is subject to review and approval by
OMB under the Paperwork Reduction Act (``PRA''). This requirement has
been
[[Page 18241]]
approved by OMB under OMB control number 1910-1400. Public reporting
burden for the certification is estimated to average 35 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act of 1969
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for categorical exclusion under 10
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that
establishes energy conservation standards for consumer products or
industrial equipment, none of the exceptions identified in B5.1(b)
apply, no extraordinary circumstances exist that require further
environmental analysis, and it meets the requirements for application
of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has
determined that promulgation of this rule is not a major Federal action
significantly affecting the quality of the human environment within the
meaning of NEPA, and does not require an environmental assessment or an
environmental impact statement.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this rule and has determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the products that are the
subject of this direct final rule. States can petition DOE for
exemption from such preemption to the extent, and based on criteria,
set forth in EPCA. (42 U.S.C. 6297) Therefore, no further action is
required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation (1)
clearly specifies the preemptive effect, if any, (2) clearly specifies
any effect on existing Federal law or regulation, (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction, (4) specifies the retroactive effect, if any, (5)
adequately defines key terms, and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of E.O. 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this direct final rule meets the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE has concluded that this direct final rule may require
expenditures of $100 million or more in any one year by the private
sector. Such expenditures may include (1) investment in research and
development and in capital expenditures by consumer clothes dryer
manufacturers in the years between the direct final rule and the
compliance date for the new standards and (2) incremental additional
expenditures by consumers to purchase higher efficiency consumer
clothes dryers starting at the compliance date for the applicable
standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the direct final rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. This
SUPPLEMENTARY INFORMATION section and the TSD for this direct final
rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives
[[Page 18242]]
of the rule unless DOE publishes an explanation for doing otherwise, or
the selection of such an alternative is inconsistent with law. As
required by 42 U.S.C. 6295(m), this direct final rule establishes
amended energy conservation standards for consumer clothes dryers that
are designed to achieve the maximum improvement in energy efficiency
that DOE has determined to be both technologically feasible and
economically justified, as required by 6295(o)(2)(A) and 6295(o)(3)(B).
A full discussion of the alternatives considered by DOE is presented in
chapter 17 of the TSD for this direct final rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
Although this direct final rule would not have any impact on the
autonomy or integrity of the family as an institution as defined, this
rule could impact a family's well-being. When developing a Family
Policymaking Assessment, agencies must assess whether: (1) the action
strengthens or erodes the stability or safety of the family and,
particularly, the marital commitment; (2) the action strengthens or
erodes the authority and rights of parents in the education, nurture,
and supervision of their children; (3) the action helps the family
perform its functions, or substitutes governmental activity for the
function; (4) the action increases or decreases disposable income or
poverty of families and children; (5) the proposed benefits of the
action justify the financial impact on the family; (6) the action may
be carried out by State or local government or by the family; and
whether (7) the action establishes an implicit or explicit policy
concerning the relationship between the behavior and personal
responsibility of youth, and the norms of society.
DOE has considered how the proposed benefits of this rule compare
to the possible financial impact on a family (the only factor listed
that is relevant to this final rule). As part of its rulemaking
process, DOE must determine whether the energy conservation standards
contained in this direct final rule are economically justified. As
discussed in section V.C.1 of this document, DOE has determined that
the standards are economically justified because the benefits to
consumers far outweigh the costs to manufacturers. Families will also
see LCC savings as a result of this final rule. Moreover, as discussed
further in section IV.I of this document, DOE's analysis estimated that
45 percent of low-income households who have a consumer clothes dryer
would experience a net benefit and 54 percent of low-income households
who have a consumer clothes dryer would have no impact under the
adopted standards. Further, the standards will also result in climate
and health benefits for families.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this rule would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
information quality guidelines established by each agency pursuant to
general guidelines issued by OMB. OMB's guidelines were published at 67
FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR
62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this direct final rule under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any significant energy action. A
``significant energy action'' is defined as any action by an agency
that promulgates or is expected to lead to promulgation of a final
rule, and that (1) is a significant regulatory action under Executive
Order 12866, or any successor order; and (2) is likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE has concluded that this regulatory action, which sets forth
amended energy conservation standards for consumer clothes dryers, is
not a significant energy action because the standards are not likely to
have a significant adverse effect on the supply, distribution, or use
of energy, nor has it been designated as such by the Administrator at
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects
on this direct final rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the Bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and prepared a report describing that peer
review.\135\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity
[[Page 18243]]
and management effectiveness of programs and/or projects. Because
available data, models, and technological understanding have changed
since 2007, DOE has engaged with the National Academy of Sciences to
review DOE's analytical methodologies to ascertain whether
modifications are needed to improve DOE's analyses. DOE is in the
process of evaluating the resulting report.\136\
---------------------------------------------------------------------------
\135\ The 2007 Energy Conservation Standards Rulemaking Peer
Review Report is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last
accessed November 2021).
\136\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that the Office of Information and Regulatory Affairs has
determined that this action meets the criteria set forth in 5 U.S.C.
804(2).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this direct
final rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Reporting and recordkeeping requirements,
Small businesses.
Signing Authority
This document of the Department of Energy was signed on February
29, 2024, by Jeffrey Marootian, Principal Deputy Assistant Secretary
for Energy Efficiency and Renewable Energy, pursuant to delegated
authority from the Secretary of Energy. That document with the original
signature and date is maintained by DOE. For administrative purposes
only, and in compliance with requirements of the Office of the Federal
Register, the undersigned DOE Federal Register Liaison Officer has been
authorized to sign and submit the document in electronic format for
publication, as an official document of the Department of Energy. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Signed in Washington, DC, on March 1, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends part 430 of
chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Amend Sec. 430.32 by adding paragraph (h)(4) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(h) * * *
(4) Clothes dryers manufactured on or after March 1, 2028, shall
have a combined energy factor, determined in accordance with appendix
D2 of this subpart, no less than:
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Product class
------------------------------------------------------------------------
(i) Electric, Standard (4.4 ft3 or greater capacity) *. 3.93
(ii) Electric, Compact (120V) (less than 4.4 ft3 4.33
capacity).............................................
(iii) Vented Electric, Compact (240V) (less than 4.4 3.57
ft3 capacity).........................................
(iv) Vented Gas, Standard (4.4 ft3 or greater capacity) 3.48
**....................................................
(v) Vented Gas, Compact (less than 4.4 ft3 capacity)... 2.02
(vi) Ventless Electric, Compact (240V) (less than 4.4 2.68
ft3 capacity).........................................
(vii) Ventless Electric, Combination Washer-Dryer...... 2.33
------------------------------------------------------------------------
* The energy conservation standards in this product class do not apply
to Vented Electric, Standard clothes dryers with a cycle time of less
than 30 minutes, when tested according to appendix D2 in subpart B of
this part.
** The energy conservation standards in this product class do not apply
to Vented Gas, Standard clothes dryers with a cycle time of less than
30 minutes, when tested according to appendix D2 in subpart B of this
part.
* * * * *
[FR Doc. 2024-04765 Filed 3-11-24; 8:45 am]
BILLING CODE 6450-01-P