Energy Conservation Program: Energy Conservation Standards for Residential Furnaces and Residential Central Air Conditioners and Heat Pumps, 37408-37548 [2011-14557]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 76, Number 123 (Monday, June 27, 2011)]
[Rules and Regulations]
[Pages 37408-37548]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14557]



[[Page 37407]]

Vol. 76

Monday,

No. 123

June 27, 2011

Part II





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Residential Furnaces and Residential Central Air Conditioners and Heat 
Pumps; Final Rule and Proposed Rule

Federal Register / Vol. 76, No. 123 / Monday, June 27, 2011 / Rules 
and Regulations

[[Page 37408]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2011-BT-STD-0011]
RIN 1904-AC06


Energy Conservation Program: Energy Conservation Standards for 
Residential Furnaces and Residential Central Air Conditioners and Heat 
Pumps

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 of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
residential furnaces and residential central air conditioners and heat 
pumps. EPCA also requires the U.S. Department of Energy (DOE) to 
determine whether more-stringent, amended standards for these products 
would be technologically feasible and economically justified, and would 
save a significant amount of energy. In this direct final rule, DOE 
adopts amended energy conservation standards for residential furnaces 
and for residential central air conditioners and heat pumps. A notice 
of proposed rulemaking that proposes identical energy efficiency 
standards is published elsewhere in this issue of the Federal Register. 
If DOE receives adverse comment and determines that such comment may 
provide a reasonable basis for withdrawing the direct final rule, this 
final rule will be withdrawn, and DOE will proceed with the proposed 
rule.

DATES: The direct final rule is effective on October 25, 2011 unless 
adverse comment is received by October 17, 2011. If adverse comments 
are received that DOE determines may provide a reasonable basis for 
withdrawal of the direct final rule, a timely withdrawal of this rule 
will be published in the Federal Register. If no such adverse comments 
are received, compliance with the standards in this final rule will be 
required on May 1, 2013 for non-weatherized gas furnaces, mobile home 
gas furnaces, and non-weatherized oil furnaces; and January 1, 2015 for 
weatherized gas furnaces and all central air conditioner and heat pump 
product classes.

ADDRESSES: Any comments submitted must identify the direct final rule 
for Energy Conservation Standards for Residential Furnaces, Central Air 
Conditioners, and Heat Pumps, and provide the docket number EERE-2011-
BT-STD-0011 and/or regulatory information number (RIN) 1904-AC06. 
Comments may be submitted using any of the following methods:
    1. Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. E-mail: ResFurnaceAC-2011-Std-0011@ee.doe.gov. Include Docket 
Numbers EERE-2011-BT-STD-0011 and/or RIN number 1904-AC06 in the 
subject line of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121. If possible, please submit all items on a 
CD, in which case it is not necessary to include printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    No telefacsimilies will be accepted. For detailed instructions on 
submitting comments and additional information on the rulemaking 
process, see section VII of this document (Public Participation).
    Docket: The docket is available for review at https://www.regulations.gov, including Federal Register notices, framework 
documents, public meeting attendee lists and transcripts, comments, and 
other supporting documents/materials. All documents in the docket are 
listed in the https://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.
    A link to the docket Web page can be found at: https://www.regulations.gov/#!docketDetail;dct=FR 
+PR+++SR+PS;rpp=50;so=DESC;sb=postedDate;po=0;D=EERE-2011-BT-STD-0011.
    The https://www.regulations.gov Web page contains simple 
instructions on how to access all documents, including public comments, 
in the docket. See section VII for further information on how to submit 
comments through https://www.regulations.gov.
    For further information on how to submit or review public comments, 
or view hard copies of the docket in the Resource Room, contact Ms. 
Brenda Edwards at (202) 586-2945 or by e-mail: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT:
Mr. Mohammed Khan (furnaces) or Mr. Wesley Anderson (central air 
conditioners and heat pumps), U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies Program, 
EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. 
Telephone: (202) 586-7892 or (202) 586-7335. E-mail: 
Mohammed.Khan@ee.doe.gov or Wes.Anderson@ee.doe.gov.
Mr. Eric Stas or Ms. Jennifer Tiedeman, U.S. Department of Energy, 
Office of the General Counsel, GC-71, 1000 Independence Avenue, SW., 
Washington, DC 20585-0121. Telephone: (202) 586-9507 or (202) 287-6111. 
E-mail: Eric.Stas@hq.doe.gov or Jennifer.Tiedeman@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Direct Final Rule
    A. The Energy Conservation Standard Levels
    B. Benefits and Costs to Consumers
    C. Impact on Manufacturers
    D. National Benefits
    E. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    2. History of Standards Rulemaking for Residential Furnaces, 
Central Air Conditioners, and Heat Pumps
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
III. General Discussion
    A. Combined Rulemaking
    B. Consensus Agreement
    1. Background
    2. Recommendations
    a. Regions
    b. Standard Levels
    c. Compliance Dates
    3. Comments on Consensus Agreement
    C. Compliance Dates
    a. Consensus Agreement Compliance Dates
    b. Shift From Peak Season
    c. Standby Mode and Off Mode Compliance Dates
    D. Regional Standards
    1. Furnace Regions for Analysis
    2. Central Air Conditioner and Heat Pump Regions for Analysis
    3. Impacts on Market Participants and Enforcement Issues
    a. Impacts on Additional Market Participants
    b. Enforcement Issues
    E. Standby Mode and Off Mode
    1. Furnaces
    a. Standby Mode and Off Mode for Weatherized Gas and Weatherized 
Oil-Fired Furnaces

[[Page 37409]]

    b. Standby Mode and Off Mode for Electric Furnaces
    c. Standby Mode and Off Mode for Mobile Home Oil-Fired Furnaces
    2. Central Air Conditioners and Heat Pumps
    a. Off Mode for Space-Constrained Air Conditioners and Heat 
Pumps
    F. Test Procedures
    1. Furnaces
    a. AFUE Test Method Comment Discussion
    b. Standby Mode and Off Mode
    2. Central Air Conditioners and Heat Pumps
    a. Proposed Test Procedure Amendments
    G. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    a. Weatherized Gas Furnace Max-Tech Efficiency Level
    b. Space-Constrained Central Air Conditioner and Heat Pump Max-
Tech Efficiency Levels
    H. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    I. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need of the Nation To Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion
    A. Market and Technology Assessment
    1. General
    2. Products Included in this Rulemaking
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    3. Product Classes
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    4. Technologies That Do Not Impact Rated Efficiency
    B. Screening Analysis
    1. Furnaces
    a. Screened-Out Technology Options
    2. Central Air Conditioners and Heat Pumps
    3. Standby Mode and Off Mode
    4. Technologies Considered
    C. Engineering Analysis
    1. Cost Assessment Methodology
    a. Teardown Analysis
    b. Cost Model
    c. Manufacturing Production Cost
    d. Cost-Efficiency Relationship
    e. Manufacturer Markup
    f. Shipping Costs
    g. Manufacturer Interviews
    2. Representative Products
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    3. Efficiency Levels
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    4. Results
    5. Scaling to Additional Capacities
    a. Furnaces
    b. Central Air Conditioners and Heat Pumps
    6. Heat Pump SEER/HSPF Relationships
    7. Standby Mode and Off Mode Analysis
    a. Identification and Characterization of Standby Mode and Off 
Mode Components
    b. Baseline Model
    c. Cost-Power Consumption Results
    D. Markup Analysis
    E. Energy Use Analysis
    1. Central Air Conditioners and Heat Pumps
    2. Furnaces
    3. Standby Mode and Off Mode
    a. Central Air Conditioners and Heat Pumps
    b. Furnaces
    F. Life-Cycle Cost and Payback Period Analyses
    1. Product Cost
    2. Installation Cost
    a. Central Air Conditioners and Heat Pumps
    b. Furnaces
    3. Annual Energy Consumption
    4. Energy Prices
    5. Energy Price Projections
    6. Maintenance and Repair Costs
    a. Central Air Conditioners and Heat Pumps
    b. Furnaces
    7. Product Lifetime
    8. Discount Rates
    9. Compliance Date of Amended Standards
    10. Base-Case Efficiency Distribution
    a. Energy Efficiency
    b. Standby Mode and Off Mode Power
    11. Inputs to Payback Period Analysis
    12. Rebuttable Presumption Payback Period
    G. National Impact Analysis-National Energy Savings and Net 
Present Value
    1. Shipments
    a. Impact of Potential Standards on Shipments
    2. Forecasted Efficiency in the Base Case and Standards Cases
    3. Installed Cost per Unit
    4. National Energy Savings
    5. Net Present Value of Consumer Benefit
    6. Benefits From Effects of Standards on Energy Prices
    H. Consumer Subgroup Analysis
    I. Manufacturer Impact Analysis
    1. Overview
    a. Phase 1: Industry Profile
    b. Phase 2: Industry Cash Flow Analysis
    c. Phase 3: Sub-Group Impact Analysis
    2. GRIM Analysis
    a. GRIM Key Inputs
    b. Markup Scenarios
    3. Manufacturer Interviews
    a. Consensus Agreement
    b. Potential for Significant Changes to Manufacturing Facilities
    c. Increase in Product Repair and Migration to Alternative 
Products
    d. HFC Phase-Out Legislation
    e. Physical Constraints
    f. Supply Chain Constraints
    J. Employment Impact Analysis
    K. Utility Impact Analysis
    L. Environmental Assessment
    M. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
V. Analytical Results
    A. Trial Standard Levels
    1. TSLs for Energy Efficiency
    2. TSLs for Standby Mode and Off Mode Power
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Sub-Groups of Small 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
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Furnace, Central 
Air Conditioner, and Heat Pump Energy Efficiency
    2. Benefits and Burdens of TSLs Considered for Furnace, Central 
Air Conditioner, and Heat Pump Standby Mode and Off Mode Power
    3. Annualized Benefits and Costs of Standards for Furnace, 
Central Air Conditioner, and Heat Pump Energy Efficiency
    4. Annualized Benefits and Costs of Standards for Furnace, 
Central Air Conditioner, and Heat Pump Standby Mode and Off Mode 
Power
    5. Certification Requirements
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    2. Description and Estimate of Compliance Requirements
    a. Central Air Conditioning and Heat Pumps
    b. Residential Furnaces
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act of 1995
    D. Review Under the National Environmental Policy Act of 1969

[[Page 37410]]

    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. Review Under the Information Quality Bulletin for Peer Review
    M. Congressional Notification
VII. Public Participation
    A. Submission of Comments
VIII. Approval of the Office of the Secretary

I. Summary of the Direct Final Rule

A. The Energy Conservation Standard Levels

    Title III, Part B \1\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as 
codified), established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. Pursuant to EPCA, any new or amended 
energy conservation standard that DOE prescribes for certain products, 
such as the residential furnaces (furnaces) and residential central air 
conditioners and central air conditioning heat pumps (air conditioners 
and heat pumps) \2\ that are the subject of this rulemaking, shall be 
designed to ``achieve the maximum improvement in energy efficiency * * 
* which the Secretary 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 accordance with these and other 
statutory provisions discussed in this notice, DOE adopts amended 
energy conservation standards for furnaces and central air conditioners 
and heat pumps. The standards for energy efficiency are shown in Table 
I.1, and the standards for standby mode and off mode \3\ are shown in 
Table I.2. These standards apply to all products listed in Table I.1 
and manufactured in, or imported into, the United States on or after 
May 1, 2013, for non-weatherized gas and oil-fired furnaces and mobile 
home gas furnaces, and on or after January 1, 2015, for weatherized 
furnaces and central air conditioners and heat pumps.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \2\ ``Residential central air conditioner'' is a product that 
provides cooling only. It is often paired with a separate electric 
or gas furnace. ``Residential central air conditioning heat pump'' 
is a product that provides both cooling and heating, with the 
cooling provided in the same manner as a residential central air 
conditioner and the heating provided by a heat pump mechanism. In 
this document, ``residential central air conditioners and central 
air conditioning heat pumps'' are referred to collectively as 
``central air conditioners and heat pumps,'' and separately as ``air 
conditioners'' (cooling only) and ``heat pumps'' (both cooling and 
heating), respectively.
    \3\ In this rule, DOE is changing the nomenclature for the 
standby mode and off mode power consumption metrics for furnaces 
from those in the furnace and boiler test procedure final rule 
published on October 20, 2010. 75 FR 64621. DOE is renaming the 
PSB and POFF metrics as PW,SB and 
PW,OFF, respectively. However, the substance of these 
metrics remains unchanged.

  Table I.1--Amended Energy Conservation Standards for Furnace, Central
            Air Conditioner, and Heat Pump Energy Efficiency
------------------------------------------------------------------------
                                                      Northern Region **
          Product class           National standards       standards
------------------------------------------------------------------------
                         Residential Furnaces *
------------------------------------------------------------------------
Non-weatherized gas.............  AFUE = 80%........  AFUE = 90%.
Mobile home gas.................  AFUE = 80%........  AFUE = 90%.
Non-weatherized oil-fired.......  AFUE = 83%........  AFUE = 83%.
Weatherized gas.................  AFUE = 81%........  AFUE = 81%.
Mobile home oil-fired             AFUE = 75%........  AFUE = 75%.
 [Dagger][Dagger].
Weatherized oil-fired             AFUE = 78%........  AFUE = 78%.
 [Dagger][Dagger].
Electric [Dagger][Dagger].......  AFUE = 78%........  AFUE = 78%.
------------------------------------------------------------------------


 
                                                                  Southeastern Region
            Product class                National standards        [dagger][dagger]        Southwestern Region
                                                                       standards            [Dagger] standards
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                                Central Air Conditioners and Heat Pumps [dagger]
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Split-system air conditioners.......  SEER = 13..............  SEER = 14...............  SEER = 14.
                                                                                         EER = 12.2 (for units
                                                                                          with a rated cooling
                                                                                          capacity less than
                                                                                          45,000 Btu/h).
                                                                                         EER = 11.7 (for units
                                                                                          with a rated cooling
                                                                                          capacity equal to or
                                                                                          greater than 45,000
                                                                                          Btu/h).
Split-system heat pumps.............  SEER = 14..............  SEER = 14...............  SEER = 14.
                                      HSPF = 8.2.............  HSPF = 8.2..............  HSPF = 8.2.
Single-package air conditioners       SEER = 14..............  SEER = 14...............  SEER = 14.
 [Dagger][Dagger].
                                                                                         EER = 11.0.
Single-package heat pumps...........  SEER = 14..............  SEER = 14...............  SEER = 14.
                                      HSPF = 8.0.............  HSPF = 8.0..............  HSPF = 8.0.
Small-duct, high-velocity systems...  SEER = 13..............  SEER = 13...............  SEER = 13.
                                      HSPF = 7.7.............  HSPF = 7.7..............  HSPF = 7.7.
Space-constrained products--air       SEER = 12..............  SEER = 12...............  SEER = 12.
 conditioners [Dagger][Dagger].
Space-constrained products--heat      SEER = 12..............  SEER = 12...............  SEER = 12.
 pumps [Dagger][Dagger].
                                      HSPF = 7.4.............  HSPF = 7.4..............  HSPF = 7.4.
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* AFUE is annual fuel utilization efficiency.
** The Northern region for furnaces contains the following States: Alaska, Colorado, Connecticut, Idaho,
  Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New
  Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah,
  Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

[[Page 37411]]

 
[dagger] SEER is Seasonal Energy Efficiency Ratio; EER is Energy Efficiency Ratio; HSPF is Heating Seasonal
  Performance Factor; and Btu/h is British thermal units per hour.
[dagger][dagger] The Southeastern region for central air conditioners and heat pumps contains the following
  States: Alabama,, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi,
  North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia, and the District of Columbia.
[Dagger] The Southwestern region for central air conditioners and heat pumps contains the States of Arizona,
  California, Nevada, and New Mexico.
[Dagger][Dagger] DOE is not amending energy conservation standards for these product classes in this rule.


  Table I.2--Amended Energy Conservation Standards for Furnace, Central
        Air Conditioner, and Heat Pump Standby Mode and Off Mode*
------------------------------------------------------------------------
                                     Standby mode and off mode standard
           Product class                           levels
------------------------------------------------------------------------
                          Residential Furnaces*
------------------------------------------------------------------------
Non-weatherized gas...............  PW,SB = 10 watts.
                                    PW,OFF = 10 watts.
Mobile home gas...................  PW,SB = 10 watts.
                                    PW,OFF = 10 watts.
Non-weatherized oil-fired.........  PW,SB = 11 watts.
                                    PW,OFF = 11 watts.
Mobile home oil-fired.............  PW,SB = 11 watts.
                                    PW,OFF = 11 watts.
Electric..........................  PW,SB = 10 watts.
                                    PW,OFF = 10 watts.
------------------------------------------------------------------------
        Central Air Conditioners and Heat Pumps [dagger][dagger]
------------------------------------------------------------------------
           Product class                  Off mode standard levels
                                               [dagger][dagger]
------------------------------------------------------------------------
Split-system air conditioners.....  PW,OFF = 30 watts.
Split-system heat pumps...........  PW,OFF = 33 watts.
Single-package air conditioners...  PW,OFF = 30 watts.
Single-package heat pumps.........  PW,OFF = 33 watts.
Small-duct, high-velocity systems.  PW,OFF = 30 watts.
Space-constrained air conditioners  PW,OFF = 30 watts.
Space-constrained heat pumps......  PW,OFF = 33 watts.
------------------------------------------------------------------------
* PW,SB is standby mode electrical power consumption, and PW,OFF is off
  mode electrical power consumption. For furnaces, DOE is proposing to
  change the nomenclature for the standby mode and off mode power
  consumption metrics for furnaces from those in the furnace and boiler
  test procedure final rule published on October 20, 2010. 75 FR 64621.
  DOE is renaming the PSB and POFF metrics as PW,SB and PW,OFF,
  respectively. However, the substance of these metrics remains
  unchanged.
** Standby mode and off mode energy consumption for weatherized gas and
  oil-fired furnaces is regulated as a part of single-package air
  conditioners and heat pumps, as discussed in section III.E.1.
[dagger] PW,OFF is off mode electrical power consumption for central air
  conditioners and heat pumps.
[dagger][dagger] DOE is not adopting a separate standby mode standard
  level for central air conditioners and heat pumps, because standby
  mode power consumption for these products is already regulated by SEER
  and HSPF.

B. Benefits and Costs to Consumers

    The projected economic impacts of the standards in this rule on 
individual consumers are generally positive. For the standards on 
energy efficiency, the estimated average life-cycle cost (LCC) \4\ 
savings for consumers are $155 for non-weatherized gas furnaces in the 
northern region, $419 for mobile home gas furnaces in the northern 
region, and $15 for non-weatherized oil-fired furnaces at a national 
level. (The standards in this rule on energy efficiency would have no 
impact for consumers of non-weatherized gas furnaces and mobile home 
gas furnaces in the southern region.) The estimated LCC savings for 
consumers are $93 and $107 for split system air conditioners (coil 
only) in the hot-humid and hot-dry regions,\5\ respectively; $89 and 
$101 for split system air conditioners (blower coil) in the hot-humid 
and hot-dry regions, respectively; $102 and $175 for split system heat 
pumps in the hot-humid and hot-dry regions, respectively, and $4 for 
the rest of the country; $37 for single package air conditioners in the 
entire country; and $104 for single package heat pumps in the entire 
country.\6\ For small-duct, high-velocity systems, no consumers would 
be impacted by the standards in this rule.
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    \4\ The LCC is the total consumer expense over the life of a 
product, consisting of purchase 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.
    \5\ Throughout this notice, the terms ``hot-humid'' and ``hot-
dry'' are used interchangeably with the terms ``southeastern'' and 
``southwestern,'' respectively, when referring to the two southern 
regions for central air conditioners and heat pumps.
    \6\ For single-package air conditioners and single-package heat 
pumps, DOE has analyzed the regional standards on a national basis 
because the standard would be identical in each region. 
Additionally, given the low level of shipments of these products, 
DOE determined that an analysis of regional standards would not 
produce significant differences in comparison to a single national 
standard.
---------------------------------------------------------------------------

    For the national standards in this rule on standby mode and off 
mode power, the estimated average LCC savings for consumers are $2 for 
non-weatherized gas furnaces, $0 for mobile home gas furnaces and 
electric furnaces, $1 for non-weatherized oil-fired furnaces, $84 for 
split system air conditioners (coil only), $40 for split system air 
conditioners (blower coil), $9 for split system heat pumps, $41 for 
single package air conditioners, $9 for single package heat pumps and 
$37 for small-duct, high-velocity (SDHV) systems.

C. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2010 through 2045). Using a real discount rate of 8.0 
percent, DOE

[[Page 37412]]

estimates that the INPV for manufacturers of furnaces, central air 
conditioners, and heat pumps in the base case (without amended 
standards) is $8.50 billion in 2009$. For the standards in this rule on 
energy efficiency, DOE expects that manufacturers may lose 5.6 to 10.6 
percent of their INPV, or approximately $0.48 billion to $0.90 billion. 
For the standards in this rule on standby mode and off mode power, DOE 
expects that manufacturers may lose up to 2.9 percent of their INPV, or 
approximately $0.25 billion.

D. National Benefits

    DOE's analyses indicate that the standards in this rule for energy 
efficiency and standby mode and off mode power would save a significant 
amount of energy--an estimated 3.36 to 4.38 quads of cumulative energy 
in 2013-2045 for furnaces and in 2015-2045 for central air conditioners 
and heat pumps.\7\ This amount is comprised of savings of 3.20 to 4.22 
quads for the standards in this rule on energy efficiency and 0.16 
quads for the standards in this rule on standby mode and off mode 
power. The total amount is approximately one-fifth of the amount of 
total energy used annually by the U.S. residential sector. In addition, 
DOE expects the energy savings from the standards in this rule to 
eliminate the need for approximately 3.80 to 3.92 gigawatts (GW) of 
generating capacity by 2045.
---------------------------------------------------------------------------

    \7\ DOE has calculated the energy savings over a period that 
begins in the year in which compliance with the proposed standards 
would be required (as described in the text preceding Table I.1) and 
continues through 2045. DOE used the same end year (2045) for both 
types of products to be consistent with the end year that it used in 
analyzing other standard levels that it considered. See section IV.G 
of this notice for further discussion.
---------------------------------------------------------------------------

    The cumulative national net present value (NPV) of total consumer 
costs and savings of the standards in this rule for products shipped in 
2013-2045 for furnaces and in 2015-2045 for central air conditioners 
and heat pumps, in 2009$, ranges from $4.30 billion to $4.58 billion 
(at a 7-percent discount rate) to $15.9 billion to $18.7 billion (at a 
3-percent discount rate).\8\ This NPV is the estimated total value of 
future operating-cost savings during the analysis period, minus the 
estimated increased product costs (including installation), discounted 
to 2011.
---------------------------------------------------------------------------

    \8\ DOE uses discount rates of 7 and 3 percent based on guidance 
from the Office of Management and Budget (OMB Circular A-4, section 
E (Sept. 17, 2003)). See section IV.G of this notice for further 
information.
---------------------------------------------------------------------------

    In addition, the standards in this rule would have significant 
environmental benefits. The energy savings would result in cumulative 
greenhouse gas emission reductions of 113 million to 143 million metric 
tons (Mt) \9\ of carbon dioxide (CO2) in 2013-2045 for 
furnaces and in 2015-2045 for central air conditioners and heat pumps. 
During this period, the standards in this rule would also result in 
emissions reductions of 97 to 124 thousand tons of nitrogen oxides 
(NOX) and 0.143 to 0.169 ton of mercury (Hg).\10\ DOE 
estimates the present monetary value of the total CO2 
emissions reductions is between $0.574 billion and $11.8 billion, 
expressed in 2009$ and discounted to 2011 using a range of discount 
rates (see notes to Table I.3). DOE also estimates the present monetary 
value of the NOX emissions reductions, expressed in 2009$ 
and discounted to 2011, is between $12.7 million and $169 million at a 
7-percent discount rate, and between $30.7 million and $403 million at 
a 3-percent discount rate.\11\
---------------------------------------------------------------------------

    \9\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \10\ DOE calculates emissions reductions relative to the most 
recent version of the Annual Energy Outlook (AEO) Reference case 
forecast. As noted in section 15.2.4 of TSD chapter 15, this 
forecast accounts for regulatory emissions reductions through 2008, 
including the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 
2005)), but not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May 
18, 2005)). Subsequent regulations, including the currently proposed 
CAIR replacement rule, the Clean Air Transport Rule (75 FR 45210 
(Aug. 2, 2010)), do not appear in the forecast.
    \11\ DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential 
economic benefits of reduced Hg emissions. DOE has decided to await 
further guidance regarding consistent valuation and reporting of Hg 
emissions before it once again monetizes Hg emissions reductions in 
its rulemakings.
---------------------------------------------------------------------------

    The benefits and costs of the standards in this rule can also be 
expressed in terms of annualized values. The annualized monetary values 
are the sum of: (1) The annualized national economic value, expressed 
in 2009$, of the benefits from operating products that meet the 
standards in this rule (consisting primarily of operating cost savings 
from using less energy, minus increases in equipment purchase costs, 
which is another way of representing consumer NPV), and (2) the 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\12\ The value of the CO2 
reductions, otherwise known as the Social Cost of Carbon (SCC), is 
calculated using a range of values per metric ton of CO2 
developed by a recent interagency process. The monetary costs and 
benefits of cumulative emissions reductions are reported in 2009$ to 
permit comparisons with the other costs and benefits in the same dollar 
units. The derivation of the SCC values is discussed in further detail 
in section IV.M.
---------------------------------------------------------------------------

    \12\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2011, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 32-year period, starting in 2011 that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions, whereas the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use quite different time frames for analysis. The national 
operating cost savings is measured for the lifetime of products shipped 
in 2013-2045 for furnaces and 2015-2045 for central air conditioners 
and heat pumps. The SCC values, on the other hand, reflect the present 
value of future climate-related impacts resulting from the emission of 
one metric ton of carbon dioxide in each year. These impacts continue 
well beyond 2100.
    Estimates of annualized benefits and costs of the standards in this 
rule for furnace, central air conditioner, and heat pump energy 
efficiency are shown in Table I.3. The results under the primary 
estimate are as follows. Using a 7-percent discount rate for consumer 
impacts and the SCC series that has a value of $22.1/ton in 2010 (in 
2009$), the cost of the standards in this rule is $527 million to $773 
million per year in increased equipment costs, while the annualized 
benefits are $837 million to $1106 million per year in reduced 
equipment operating costs, $140 million to $178 million in 
CO2 reductions, and $5.3 million to $6.9 million in reduced 
NOX emissions. In this case, the net benefit amounts to $456 
million to $517 million per year. DOE also calculated annualized net 
benefits using a range of potential electricity and equipment price 
trend forecasts. Given the range of

[[Page 37413]]

modeled price trends, the range of net benefits in this case is from 
$295 million to $623 million per year. The low estimate in Table I.3 
corresponds to a scenario with a low electricity price trend and a 
constant real price trend for equipment, while the high estimate 
reflects a high electricity price trend and a strong declining real 
price trend for equipment.
    Using a 3-percent discount rate for consumer impacts and the SCC 
series that has a value of $22.1/ton in 2010 (in 2009$), the cost of 
the standards in this rule is $566 million to $825 million per year in 
increased equipment costs, while the benefits are $1289 million to 
$1686 million per year in reduced operating costs, $140 million to $178 
million in CO2 reductions, and $7.9 million to $10.2 million 
in reduced NOX emissions. In this case, the net benefit 
amounts to $871 million to $1049 million per year. DOE also calculated 
annualized net benefits using a range of potential electricity and 
equipment price trend forecasts. Given the range of modeled price 
trends, the range of net benefits in this case is from $601 million to 
$1,260 million per year. The low estimate corresponds to a scenario 
with a low electricity price trend and a constant real price trend for 
equipment, while the high estimate reflects a high electricity price 
trend and a strong declining real price trend for equipment.

         Table I.3--Annualized Benefits and Costs of Standards for Furnace and Central Air Conditioner and Heat Pump Energy Efficiency (TSL 4) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Monetized (million 2009$/year)
                                           Discount rate          --------------------------------------------------------------------------------------
                                                                       Primary estimate **            Low estimate **              High estimate **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........  7%.............................  837 to 1,106...............  723 to 959.................  955 to 1,258.
                                  3%.............................  1,289 to 1,686.............  1,083 to 1,422.............  1,493 to 1,948.
CO2 Reduction at $4.9/t [dagger]  5%.............................  34 to 43...................  34 to 43...................  34 to 43.
CO2 Reduction at $22.1/t          3%.............................  140 to 178.................  141 to 178.................  140 to 178.
 [dagger].
CO2 Reduction at $36.3/t          2.5%...........................  224 to 284.................  225 to 285.................  224 to 284.
 [dagger].
CO2 Reduction at $67.1/t          3%.............................  427 to 541.................  428 to 543.................  427 to 541.
 [dagger].
NOX Reduction at $2,519/ton       7%.............................  5.3 to 6.9.................  5.3 to 7.0.................  5.3 to 6.9.
 [dagger].
                                  3%.............................  7.9 to 10.2................  7.9 to 10.3................  7.9 to 10.2.
    Total [dagger][dagger]......  7% plus CO2 range..............  876 to 1,653...............  762 to 1,509...............  994 to 1,805.
                                  7%.............................  983 to 1,290...............  869 to 1,144...............  1,100 to 1,442.
                                  3%.............................  1,437 to 1,874.............  1,232 to 1,611.............  1,641 to 2,136.
                                  3% plus CO2 range..............  1,330 to 2,237.............  1,125 to 1,975.............  1,535 to 2,499.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......  7%.............................  527 to 773.................  574 to 840.................  555 to 819.
                                  3%.............................  566 to 825.................  630 to 916.................  599 to 876.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Net Benefits/Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total [dagger][dagger]......  7% plus CO2 range..............  349 to 880.................  188 to 669.................  438 to 986.
                                  7%.............................  456 to 517.................  295 to 305.................  545 to 623.
                                  3%.............................  871 to 1,049...............  601 to 695.................  1,042 to 1,260.
                                  3% plus CO2 range..............  764 to 1,412...............  494 to 1,059...............  935 to 1,623.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The benefits and costs are calculated for products shipped in 2013-2045 for the furnace standards and in 2015-2045 for the central air conditioner and
  heat pump standards.
** The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and High Economic Growth case, respectively. In addition, the Low estimate uses incremental product costs that reflects constant prices (no learning
  rate) for product prices, and the High estimate uses incremental product costs that reflects a declining trend (high learning rate) for product
  prices. The derivation and application of learning rates for product prices is explained in section IV.F.1.
[dagger] The CO2 values represent global monetized values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of
  $4.9, $22.1, and $36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates,
  respectively. The value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value
  for NOX (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate,
  which is $22.1/ton in 2010 (in 2009$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are
  calculated using the labeled discount rate, and those values are added to the full range of CO2 values.

    Estimates of annualized benefits and costs of the standards in this 
rule for furnace, central air conditioner, and heat pump standby mode 
and off mode power are shown in Table I.4. The results under the 
primary estimate are as follows. Using a 7-percent discount rate and 
the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the 
standards in this rule is $16.4 million per year in increased equipment 
costs, while the annualized benefits are $46.5 million per year in 
reduced equipment operating costs, $12.4 million in CO2 
reductions, and $0.4 million in reduced NOX emissions. In 
this case, the net benefit amounts to $42.8 million per year. Using a 
3-percent discount rate and the SCC value of $22.10/ton in 2010 (in 
2009$), the cost of the standards in this rule is $19.1 million per 
year in increased equipment costs, while the benefits are $79.3 million 
per year in reduced operating costs, $12.4 million in CO2 
reductions, and $0.6 million in reduced NOX emissions. In 
this case, the net benefit amounts to $73.2 million per year.

[[Page 37414]]



      Table I.4--Annualized Benefits and Costs of Standards for Furnace, Central Air Conditioner, and Heat Pump Standby Mode and Off Mode (TSL 2) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Monetized (million 2009$/year)
                                          Discount rate          ---------------------------------------------------------------------------------------
                                                                      Primary estimate **            Low estimate **              High estimate **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings.........  7%.............................  46.5.......................  40.4.......................  52.8.
                                 3%.............................  79.3.......................  67.9.......................  90.8.
CO2 Reduction at $4.9/t          5%.............................  2.9........................  2.9........................  2.9.
 [dagger].
CO2 Reduction at $22.1/t         3%.............................  12.4.......................  12.4.......................  12.4.
 [dagger].
CO2 Reduction at $36.3/t         2.5%...........................  19.9.......................  19.9.......................  19.9.
 [dagger].
CO2 Reduction at $67.1/t         3%.............................  37.6.......................  37.6.......................  37.6.
 [dagger].
NOX Reduction at $2,519/ton      7%.............................  0.4........................  0.4........................  0.4.
 [dagger].
                                 3%.............................  0.6........................  0.6........................  0.6.
    Total [dagger][dagger].....  7% plus CO2 range..............  49.7 to 84.5...............  43.6 to 78.4...............  56.1 to 90.8.
                                 7%.............................  59.2.......................  53.1.......................  65.5.
                                 3%.............................  92.3.......................  80.9.......................  103.8.
                                 3% plus CO2 range..............  82.8 to 117.5..............  71.4 to 106.2..............  94.3 to 129.1.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs......  7%.............................  16.4.......................  15.2.......................  17.7.
                                 3%.............................  19.1.......................  17.6.......................  20.6.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Net Benefits/Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total [dagger][dagger].....  7% plus CO2 range..............  33.3 to 68.1...............  28.5 to 63.2...............  38.4 to 73.1.
                                 7%.............................  42.8.......................  38.0.......................  47.9.
                                 3%.............................  73.2.......................  63.3.......................  83.2.
                                 3% plus CO2 range..............  63.7 to 98.4...............  53.8 to 88.5...............  73.7 to 108.5.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The benefits and costs are calculated for products shipped in 2013-2045 for the furnace standards and in 2015-2045 for the central air conditioner and
  heat pump standards.
** The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and High Economic Growth case, respectively. In addition, the low estimate uses incremental product costs that reflects constant prices (no learning
  rate) for product prices, and the high estimate uses incremental product costs that reflects a declining trend (high learning rate) for product
  prices. The derivation and application of learning rates for product prices is explained in section IV.F.1.
[dagger] The CO2 values represent global monetized values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of
  $4.9, $22.1, and $36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates,
  respectively. The value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value
  for NOX (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate,
  which is $22.1/ton in 2010 (in 2009$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are
  calculated using the labeled discount rate, and those values are added to the full range of CO2 values.

E. Conclusion

    Based on the analyses culminating in this rule, DOE has concluded 
that the benefits of the standards in this rule (energy savings, 
positive NPV of consumer benefits, consumer LCC savings, and emission 
reductions) would outweigh the burdens (loss of INPV for manufacturers 
and LCC increases for some consumers). DOE has concluded that the 
standards in this rule represent the maximum improvement in energy 
efficiency that is technologically feasible and economically justified, 
and would result in the significant conservation of energy. DOE further 
notes that products achieving these standard levels are already 
commercially available for all of the product classes covered by 
today's proposal.

II. Introduction

    The following sections briefly discuss the statutory authority 
underlying today's direct final rule, as well as some of the relevant 
historical background related to the establishment of standards for 
residential furnaces and residential central air conditioners and heat 
pumps.

A. Authority

    Title III, Part B of the Energy Policy and Conservation Act of 1975 
(EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) 
established the Energy Conservation Program for Consumer Products Other 
Than Automobiles,\13\ a program covering most major household 
appliances (collectively referred to as ``covered products''), which 
includes the types of residential central air conditioners and heat 
pumps and furnaces that are the subject of this rulemaking. (42 U.S.C. 
6292(a)(3) and (5)) EPCA prescribed energy conservation standards for 
central air conditioners and heat pumps and directed DOE to conduct two 
cycles of rulemakings to determine whether to amend these standards. 
(42 U.S.C. 6295(d)(1)-(3)) The statute also prescribed standards for 
furnaces, except for ``small'' furnaces (i.e., those units with an 
input capacity less than 45,000 British thermal units per hour (Btu/
h)), for which EPCA directed DOE to prescribe standards. (42 U.S.C. 
6295(f)(1)-(2)) Finally, EPCA directed DOE to conduct rulemakings to 
determine whether to amend the standards for furnaces. (42 U.S.C. 
6295(f)(4)(A)-(C)) As explained in further detail in section II.B, 
``Background,'' this rulemaking represents the second round of 
amendments to both the central air conditioner/heat pump and the 
furnaces standards, under the authority of 42 U.S.C. 6295(d)(3)(B) and 
(f)(4)(C), respectively.
---------------------------------------------------------------------------

    \13\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
---------------------------------------------------------------------------

    DOE notes that this rulemaking is one of the required agency 
actions in two court orders. First, pursuant to the

[[Page 37415]]

consolidated Consent Decree in State of New York, et al. v. Bodman, et 
al., 05 Civ. 7807 (LAP), and Natural Resources Defense Council, et al. 
v. Bodman, et al., 05 Civ. 7808 (LAP), DOE is required to complete a 
final rule for amended energy conservation standards for residential 
central air conditioners and heat pumps that must be sent to the 
Federal Register by June 30, 2011. Second, pursuant to the Voluntary 
Remand in State of New York, et al. v. Department of Energy, et al., 
08-0311-ag(L); 08-0312-ag(con), DOE agreed to complete a final rule to 
consider amendments to the energy conservation standards for 
residential furnaces which it anticipated would be sent to the Federal 
Register by May 1, 2011.
    DOE further notes that under 42 U.S.C. 6295(m), the agency must 
periodically review its already established energy conservation 
standards for a covered product. Under this requirement, the next 
review that DOE would need to conduct must occur no later than six 
years from the issuance of a final rule establishing or amending a 
standard for a covered product.
    Pursuant to EPCA, DOE's energy conservation program for covered 
products consists essentially of four parts: (1) Testing; (2) labeling; 
(3) the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is primarily responsible for labeling, and DOE implements the 
remainder of the program. 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. 6293) 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. Id. The DOE test procedures for 
central air conditioners and heat pumps, and for furnaces, appear at 
title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, 
appendices M and N, respectively.
    DOE must follow specific statutory criteria for prescribing amended 
standards for covered products. As indicated above, any amended 
standard for a covered product must be designed to achieve the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may 
not adopt any standard that would not result in the significant 
conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not 
prescribe a standard: (1) For certain products, including both furnaces 
and central air conditioners and heat pumps, if no test procedure has 
been established for the product, or (2) if DOE determines by rule that 
the proposed standard is not technologically feasible or economically 
justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a standard 
is economically justified, DOE must determine whether the benefits of 
the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must 
make this determination after receiving comments on the proposed 
standard, and by considering, to the greatest extent practicable, the 
following seven 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 imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of 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 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (the Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    The Energy Independence and Security Act of 2007 (EISA 2007; Pub. 
L. 110-140) amended EPCA, in relevant part, to grant DOE authority to 
issue a final rule (hereinafter referred to as a ``direct final rule'') 
establishing an energy conservation standard on 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 that are in accordance with the 
provisions of 42 U.S.C. 6295(o). A notice of proposed rulemaking (NOPR) 
that proposes an identical energy efficiency standard must be published 
simultaneously with the 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). Not later than 120 days after issuance of the direct final 
rule, if one or more adverse comments or an alternative joint 
recommendation are received relating to the direct final rule, the 
Secretary must determine whether the comments or alternative 
recommendation may provide a reasonable basis for withdrawal under 42 
U.S.C. 6295(o) or other applicable law. If the Secretary makes such a 
determination, DOE must withdraw the direct final rule and proceed with 
the simultaneously-published NOPR. DOE must publish in the Federal 
Register the reason why the direct final rule was withdrawn. Id.
    The Consent Decree in State of New York, et al. v. Bodman, et al., 
described above, defines a ``final rule'' to have the same meaning as 
in 42 U.S.C. 6295(p)(4) and defines ``final action'' as a final 
decision by DOE. As this direct final rule is issued under authority at 
42 U.S.C. 6295(p)(4) and constitutes a final decision by DOE which 
becomes legally effective 120 days after issuance, absent an adverse 
comment that leads the Secretary to withdraw the direct final rule, DOE 
asserts that issuance of this direct final rule on or before the date 
required by the court constitutes compliance with the Consent Decree in 
State of New York, et al. v. Bodman, et al.
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States of 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))

[[Page 37416]]

    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))
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating a standard for a type or class of covered product that has 
two or more subcategories. DOE must specify a different standard level 
than that which applies generally to such type or class of products 
``for any group of covered products which have the same function or 
intended use, if * * * 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 justifie