Energy Conservation Program: Energy Conservation Standards for Standby Mode and Off Mode for Microwave Ovens, 8526-8574 [2012-2784]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Proposed Rules]
[Pages 8526-8574]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2784]



[[Page 8525]]

Vol. 77

Tuesday,

No. 30

February 14, 2012

Part IV





Department of Energy





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10 CFR Parts 429 and 430





Energy Conservation Program: Energy Conservation Standards for Standby 
Mode and Off Mode for Microwave Ovens; Proposed Rule

Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / 
Proposed Rules

[[Page 8526]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

[Docket Number EERE-2011-BT-STD-0048]
RIN 1904-AC07


Energy Conservation Program: Energy Conservation Standards for 
Standby Mode and Off Mode for Microwave Ovens

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

ACTION: Supplemental Notice of Proposed Rulemaking (SNOPR) and public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes 
energy conservation standards for various consumer products and 
commercial and industrial equipment. Microwave ovens are covered 
products under EPCA, although there are no existing microwave oven 
standards. EPCA requires the U.S. Department of Energy (DOE) to 
determine whether amended, more stringent, standards are 
technologically feasible and economically justified, and would save a 
significant amount of energy. Additionally, the Energy Independence and 
Security Act of 2007 (EISA 2007) amended EPCA to require any final rule 
adopted after July 1, 2010 establishing or revising energy conservation 
standards for covered products, including microwave ovens, to address 
standby mode and off mode energy use. On October 17, 2008, DOE issued a 
Notice of Proposed Rulemaking (NOPR) in which DOE proposed amendments 
to the energy conservation standards for several residential and 
commercial products, including microwave ovens. In response to the 
NOPR, DOE received comment expressing concern and encouraging the 
Department to re-examine standby mode and off mode of microwave ovens 
as a part of DOE's rulemaking analyses. Additionally, DOE received 
comment alleging certain data problems affecting DOE's rulemaking 
analyses. DOE's preliminary assessment suggested that the concerns 
might be valid, thereby necessitating additional, supplemental 
rulemaking analyses. In this notice, DOE responds to the comments 
received on the NOPR and proposes amended energy conservation standards 
for microwave oven standby mode and off mode. The notice also announces 
a public meeting to receive comment on these proposed standards and 
associated analyses and results.

DATES: DOE will hold a public meeting on March 14, 2012, from 9 a.m. to 
4 p.m., in Washington, DC. The meeting will also be broadcast as a 
Webinar. See section VIII, ``Public Participation,'' for Webinar 
registration information, participant instructions, and information 
about the capabilities available to Webinar participants.
    DOE will accept comments, data, and information regarding this 
SNOPR before and after the public meeting, but no later than April 16, 
2012. See section VIII, ``Public Participation,'' for details.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. Please note that foreign nationals visiting DOE 
Headquarters are subject to advanced security screening procedures. Any 
foreign national wishing to participate in the meeting should advise 
DOE as soon as possible by contacting Ms. Brenda Edwards at (202) 586-
2945 to initiate the necessary procedures.
    Any comments submitted must identify the SNOPR for Energy 
Conservation Standards for Microwave Oven Standby Mode and Off Mode and 
must provide docket number EERE-2011-BT-STD-0048 and/or regulatory 
information number (RIN) 1904-AC07. Comments may be submitted using any 
of the following methods.
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: MWO-2011-BT-STD-0048@ee.doe.gov Include the docket number 
and/or RIN 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. 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. It is not necessary to include printed 
copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
Christine_J._Kymn@omb.eop.gov.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VIII of this 
document (``Public Participation'').
    Docket: The docket is available for review at 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 
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+N+O+SR;rpp=10;po=0;D=EERE-
2011-BT-STD-0048. This Web page will contain a link to the docket for 
this notice on the regulations.gov site. The regulations.gov Web page 
will contain simple instructions on how to access all documents, 
including public comments, in the docket. See section VIII for 
information on how to submit comments through regulations.gov.
    For further information on how to submit or review public comments 
or participate in the public meeting, contact Ms. Brenda Edwards at 
(202) 586-2945 or email: Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT:
    Mr. Wes Anderson, U.S. Department of Energy, Energy Efficiency and 
Renewable Energy, Building Technologies Program, EE-2J, 1000 
Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 
586-7335. Email: wes.anderson@ee.doe.gov.
    Mr. Ari Altman, Esq., U.S. Department of Energy, Office of the 
General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 287-6307. Email: Ari.Altman@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Microwave Ovens
III. General Discussion
    A. Test Procedures
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels

[[Page 8527]]

    C. Energy Savings
    1. Determination of Energy Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    2. Rebuttable Presumption
IV. Methodology and Revisions to the Analyses Employed in the 
October 2008 Proposed Rule
    A. Product Classes
    B. Technology Assessment
    1. Cooking Sensors
    2. Display Technologies
    3. Power Supply and Control Boards
    4. Power-Down Options
    C. Engineering Analysis
    1. Energy Use Metric
    2. Standby Power Levels
    3. Manufacturing Costs
    D. Life-Cycle Cost and Payback Period Analysis
    1. Product Costs
    2. Annual Energy Consumption
    3. Energy Prices
    4. Repair and Maintenance Costs
    5. Product Lifetime
    6. Discount Rates
    7. Effective Date of New Standards
    8. Product Energy Efficiency in the Base Case
    9. Inputs to Payback Period Analysis
    10. Rebuttable-Presumption Payback Period
    E. National Impact Analysis--National Energy Savings and Net 
Present Value Analysis
    1. General
    2. Shipments
    3. Purchase Price, Operating Cost, and Income Impacts
    4. Other Inputs
    5. Effects of Standards on Energy Prices
    F. Consumer Subgroup Analysis
    G. Manufacturer Impact Analysis
    H. Employment Impact Analysis
    I. Utility Impact Analysis
    J. Emissions Analysis
    K. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    2. Valuation of Other Emissions Reductions
    L. Discussion of Other Comments
    1. Off Mode Power Consumption
    2. Proposed Standards for Microwave Oven Standby Mode and Off 
Mode Energy Use
    3. Manufacturer Tax Credits Impact on Market Adoption of More 
Efficient Products
V. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Consumers
    2. Economic Impacts on Manufacturers
    3. National Impact Analysis
    4. Impact on Utility or Performance of Product
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Other Factors
    C. Proposed Standard
    1. Benefits and Burdens of TSLs Considered for Microwave Ovens
    2. Summary of Benefits and Costs (Annualized) of the Proposed 
Standards
VI. Additional Technical Corrections to 10 CFR 430.32
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VIII. Public Participation
    A. Attendance at Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
IX. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

    The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.; 
EPCA or the Act), as amended, provides that any amended energy 
conservation standard DOE prescribes for certain consumer products, 
such as microwave ovens, 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)) 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 
proposes amended energy conservation standards for microwave oven 
standby mode and off mode. The proposed standards, which prescribe the 
maximum allowable energy use when a product is in standby mode, are 
shown in Table I.1.\1\ These proposed standards, if adopted, would 
apply to all products listed in Table I.1 and manufactured in, or 
imported into, the United States on or after April 1, 2014.
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    \1\ DOE considered energy use in off mode for microwave ovens, 
but is not proposing a maximum allowable off mode power because it 
is unaware of any current microwave ovens that are capable of 
operating in such a mode.

         Table I.1--Proposed Energy Conservation Standards for Microwave Oven Standby Mode and Off Mode
                                          [Compliance Starting in 2014]
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                 Product classes                               Proposed energy conservation standard
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Microwave-Only Ovens and Countertop Combination   Maximum Standby Power = 1.0 watt.
 Microwave Ovens.
Built-In and Over-the-Range Combination           Maximum Standby Power = 2.2 watts.
 Microwave Ovens.
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    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy-an estimated 0.41 quads over 30 years 
(2014 through 2043). According to the Energy Information 
Administration's (EIA's) Annual Energy Outlook 2010 (AEO 2010), total 
residential energy consumption is projected to be 21.3 quads in 2015. 
The amount of energy saved per year is equivalent to 0.06 percent of 
the projected household energy use.
    The cumulative national net present value (NPV) of total consumer 
costs and savings of the proposed standards for products shipped in 
2014-2043, in 2010$, ranges from $1.82 billion (at a 7-percent discount 
rate) to $3.59 billion (at a 3-percent discount rate).\2\ The NPV is 
the estimated total value of future operating-cost savings during the 
analysis period, minus the estimated increased product costs, 
discounted to 2011. The industry net present value (INPV) is the sum of 
the discounted cash flows to the industry from the base

[[Page 8528]]

year through the end of the analysis period (2014 to 2043). Using a 
real discount rate of 7.2 percent, DOE estimates that INPV for 
manufacturers of all microwave ovens in the base case is $1.1 billion 
in 2010$. If DOE adopts the proposed standard, it expects manufacturers 
will lose 4.7 to 6.5 percent of their INPV, or approximately $52.9 
million to $73.6 million. Using a 7-percent discount rate, the NPV of 
consumer costs and savings from today's proposed standards would amount 
to 25 to 34 times the total estimated industry losses. Using a 3-
percent discount rate, the NPV would amount to 49 to 68 times the total 
estimated industry losses.
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    \2\ DOE uses discount rates of 7 and 3 percent based on guidance 
from the Office of Management and Budget (OMB Circular A-4, section 
E, September 17, 2003). See section IV.E for further information.
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    The projected economic impacts of the proposed standards on 
individual consumers are positive. For example, for Microwave-Only and 
Countertop Combination Microwave Ovens (Product Class 1), the estimated 
average life-cycle cost (LCC) savings in 2010$ are $13, and all 
consumers of these products would have positive economic impacts. For 
Built-In and Over-the-Range Combination Microwave Ovens (Product Class 
2), the estimated average LCC savings in 2010$ are $4, and most 
consumers of this product would have positive economic impacts.
    In addition, the proposed standards would have significant 
environmental benefits. The energy savings projected from the proposed 
standards would result in cumulative greenhouse gas emission reductions 
of 31.48 million metric tons (Mt) \3\ of carbon dioxide 
(CO2) in 2014-2043. During this period, the proposed 
standards would result in emissions reductions of 25.6 tons of nitrogen 
oxides (NOX), and have a negligible impact on emissions of 
mercury (Hg).\4\ DOE estimates the present monetary value of the 
CO2 emissions reduction is between $139 million and $2,118 
million, expressed in 2010$. DOE also estimates the present monetary 
value of the NOX emissions reduction, expressed in 2010$, is 
between $3.82 million and $39.3 million at a 7-percent discount rate, 
and between $7.44 million and $76.4 million at a 3-percent discount 
rate.\5\
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    \3\ Results for NOX and Hg are presented in short 
tons. A metric ton is equivalent to 1.1 short tons.
    \4\ DOE calculates emissions reductions relative to the most 
recent version of the Annual Energy Outlook (AEO) Reference case 
forecast. This forecast accounts for emissions reductions from in-
place regulations, including the Clean Air Interstate Rule (CAIR, 70 
FR 25162 (May 12, 2005)), but not the Clean Air Mercury Rule (CAMR, 
70 FR 28606 (May 18, 2005)). Subsequent regulations, including the 
Cross-State Air Pollution rule issued on July 6, 2011, do not appear 
in the forecast at this time.
    \5\ DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential 
economic benefits of reduced Hg emissions. DOE has decided to await 
further guidance regarding consistent valuation and reporting of Hg 
emissions before it once again monetizes Hg in its rulemakings.
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    The benefits and costs of today's proposed standards can also be 
expressed in terms of annualized values over a 30-year period. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating products that meet the 
proposed standards (consisting primarily of operating cost savings from 
using less energy, minus increases in product purchase costs, which is 
another way of representing consumer NPV), and (2) the monetary value 
of the benefits of emission reductions, including CO2 
emission reductions.\6\ The value of the CO2 reductions, 
otherwise known as the Social Cost of Carbon (SCC), is calculated using 
a range of values per metric ton of CO2 developed by a 
recent interagency process. The monetary costs and benefits of 
cumulative emissions reductions are reported in 2010$ to permit 
comparisons with the other costs and benefits in the same dollar units. 
The derivation of the SCC values is discussed in section IV.K.
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    \6\ 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 the same year used for discounting the 
NPV of total consumer costs and savings. To calculate the present 
value, DOE used discount rates of 3 and 7 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.2. 
From the present value, DOE then calculated the corresponding time-
series of fixed annual payments over a 30-year period starting in 
the same year used for discounting the NPV of total consumer costs 
and savings. 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.
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    Although combining the values of operating savings and 
CO2 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 different time frames for analysis. The national operating 
cost savings is measured for the lifetime of microwave ovens shipped in 
2014-2043. The SCC values, on the other hand, reflect the present value 
of all future climate-related impacts resulting from the emission of 
one ton of CO2 in each year. These impacts continue well 
beyond 2100.
    Table I.2 shows the annualized values for today's proposed 
standards, expressed in 2010$. The results under the primary estimate 
are as follows. Using a 7-percent discount rate for benefits and costs 
other than CO2 reductions, for which DOE used a 3-percent 
discount rate along with the SCC series corresponding to a value of 
$22.3/ton in 2010, the cost of the standards proposed in today's rule 
is $20.3 million per year in increased product costs, while the 
annualized benefits are $167 million in reduced product operating 
costs, $35.4 million in CO2 reductions, and $1.74 million in 
reduced NOX emissions. In this case, the net benefit amounts 
to $184 million per year. Using a 3-percent discount rate for all 
benefits and costs and the SCC series corresponding to a value of 
$22.3/ton in 2010, the cost of the standards proposed in today's rule 
is $21.6 million per year in increased product costs, while the 
annualized benefits are $205 million in reduced operating costs, $35.4 
million in CO2 reductions, and $2.14 million in reduced 
NOX emissions. In this case, the net benefit amounts to $221 
million per year.

 Table I.2--Annualized Benefits and Costs of Proposed Standards for Microwave Oven Standby Mode and Off Mode for
                                           Products Sold in 2014-2043
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                                               Discount rate          Primary     Low benefits    High benefits
                                                                   estimate *       estimate *       estimate *
                                                              --------------------------------------------------
                                         ....................            Monetized (million 2010$/year)
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                                                    Benefits
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Operating Cost Savings.................                   7%              167              150              185

[[Page 8529]]

 
                                                          3%              205              182              229
CO2 Reduction at $4.9/t **.............                   5%             9.02             8.49             9.55
CO2 Reduction at $22.3/t **............                   3%             35.4             33.3             37.6
CO2 Reduction at $36.5/t **............                 2.5%             55.9             52.5             59.3
CO2 Reduction at $67.6/t **............                   3%            108.0            101.5            114.6
NOX Reduction at $2,537/t **...........                   7%             1.74             1.65             1.82
                                                          3%             2.14             2.02             2.26
                                        ------------------------------------------------------------------------
    Total[dagger]......................             7% plus CO2 ran178 to 277       160 to 253       196 to 301
                                                          7%              204              185              224
                                                          3%              243              217              269
                                                    3% plus CO2 ran216 to 315       193 to 286       241 to 346
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                                                      Costs
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Incremental Product Costs..............                   7%            20.32            23.39            20.25
                                                          3%            21.59            25.48            21.48
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                                               Total Net Benefits
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    Total[dagger]......................             7% plus CO2 ran157 to 256       137 to 230       176 to 281
                                                          7%              184              162              204
                                                          3%              221              192              247
                                                    3% plus CO2 ran195 to 294       167 to 260       219 to 324
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* The Primary, Benefits, and High Benefits 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, incremental product costs reflect a declining trend (default learning rate) for product prices in
  the Primary Estimate, constant prices (no learning rate) for product prices in the Low Estimate, and a
  declining trend (high learning rate) in the High Estimate. The derivation and application of learning rates
  for product prices is explained in section IV.D.1.
** The CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under several
  scenarios. The values of $4.9, $22.3, and $36.5 per ton are the averages of SCC distributions calculated using
  5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $67.6 per ton represents the
  95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in
  2010$) is the average of the low and high values used in DOE's analysis.
[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 $22.3/ton in 2010 (in 2010$). 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.

    DOE has made an initial determination that the proposed standards 
represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified, while maintaining 
product utility in the form of a continual clock display, and would 
result in the significant conservation of energy. DOE further notes 
that products achieving these standard levels are already commercially 
available for one of the product classes covered by today's 
proposal.\7\ Based on the analyses described above, DOE found the 
benefits of the proposed standards to the Nation (energy savings, 
positive NPV of consumer benefits, consumer LCC savings, and emission 
reductions) outweigh the burdens (loss of INPV for manufacturers).
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    \7\ Products in the Microwave-Only Ovens and Countertop 
Combination Microwave Ovens product class that meet the proposed 
standards are currently commercially available. The Built-In and 
Over-the-Range Combination Microwave Ovens class does not currently 
comprise products that meet the proposed standards, primarily 
because of the larger components necessary for the convection system 
and the more complex displays. However, DOE believes it is 
technologically feasible for all microwave ovens to meet the 
proposed standards.
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    Based on consideration of the public comments DOE receives in 
response to this supplemental notice and related information collected 
and analyzed during the course of this rulemaking effort, DOE may adopt 
energy use levels presented in this notice that are either higher or 
lower than the proposed standards, or some combination of level(s) that 
incorporate the proposed standards in part. In particular, DOE is 
proposing TSL 3 for built-in products as the level which it has 
tentatively concluded meet the applicable statutory criteria (i.e., the 
highest level that is technologically feasible, economically justified, 
and would result in significant conservation of energy). Based upon 
public comments and any accompanying data submissions, DOE would 
consider finalizing other TSLs (as presented in this NOPR or at some 
level in between), including the option of not finalizing the standard 
for built-ins proposed in this rule. Accordingly, DOE is presenting a 
variety of issues throughout today's notice upon which it is seeking 
comment, which will bear upon its consideration of standards for built-
ins in the final rule.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposal as well as some of the relevant historical 
background related to the establishment of energy conservation 
standards for microwave oven standby mode and off mode.

A. Authority

    Title III of EPCA sets forth various provisions designed to improve 
energy efficiency. Part B of Title III (42 U.S.C. 6291-6309) provides 
for the Energy Conservation Program for Consumer Products Other Than 
Automobiles.\8\ EPCA covers consumer products and certain commercial 
equipment (referred to collectively hereafter as ``covered products''), 
including the microwave

[[Page 8530]]

ovens that are the subject of this rulemaking. (42 U.S.C. 6292(a)(10)) 
\9\
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    \8\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \9\ DOE 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 would occur no later than 6 
years from the issuance of a final rule establishing or amending a 
standard for a covered product.
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    Under the Act, 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 
rest of the program. Section 323 of the Act authorizes DOE, subject to 
certain criteria and conditions, 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) The National Appliance Energy 
Conservation Act of 1987 (NAECA), Public Law 100-12, amended EPCA to 
establish prescriptive standards for cooking products, specifically gas 
cooking products. No standards were established for microwave ovens. 
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 
(42 U.S.C. 6295(s)) and when making representations to the public 
regarding the energy use or efficiency of those products. (42 U.S.C. 
6293(c)) Similarly, DOE must use these test procedures to determine 
whether the products comply with standards adopted under EPCA. (42 
U.S.C. 6295(s)) The test procedure for microwave ovens currently 
appears at title 10, Code of Federal Regulations (CFR), part 430, 
subpart B, appendix I.
    EPCA provides 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, EPCA precludes DOE 
from adopting any standard for certain products, including microwave 
ovens, if no test procedure has been established for the product. (42 
U.S.C. 6295(o)(3)(A)) Moreover, DOE may not prescribe a standard: (1) 
If it would not result in the significant conservation of energy, 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)(B)) The Act also provides that, in deciding whether a 
proposed standard is economically justified, DOE must determine whether 
the benefits of the standard exceed its burdens. (42 U.S.C. 
6295(o)(2)(B)(i)) DOE must do so 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 (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i))
    EPCA also contains what is known as an ``anti-backsliding'' 
provision, which prevents the Secretary from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product. 
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended 
or new standard if the Secretary finds 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 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 at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing a product complying with an energy 
conservation standard level will be less than three times the value of 
the energy savings during the first year that the consumer will receive 
as a result of the standard, as calculated under the applicable test 
procedure. See 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 justifies a higher or lower standard than applies or will apply 
to the other products within that type or class. Id. In determining 
whether a performance-related feature justifies a different standard 
for a group of products, DOE must consider such factors as the utility 
to the consumer of such a feature and other factors DOE deems 
appropriate. Id. Any rule prescribing such a standard must include an 
explanation of the basis on which such higher or lower level was 
established. (42 U.S.C. 6295(q)(2))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE can, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions of section 327(d) 
of the Act. (42 U.S.C. 6297(d))
    Finally, section 310(3) of the Energy Independence and Security Act 
of 2007 (EISA 2007; Pub. L. 110-140) amended EPCA to require that 
energy conservation standards address standby mode and off mode energy 
use. (42 U.S.C. 6295(gg)) Specifically, when DOE adopts a standard for 
a covered product after July 1, 2010, it must, pursuant to criteria for 
adoption of standards at 42 U.S.C. 6295(o), incorporate standby mode 
and off mode energy use into the standard, if feasible, or adopt a 
separate standard for such energy use for that product. (42 U.S.C. 
6295(gg)(3)) These provisions in EISA 2007 do not preclude DOE from 
considering standards for standby mode and off mode energy use in a 
rulemaking that does not consider standards for active

[[Page 8531]]

mode energy use. In this rulemaking, DOE intends to incorporate standby 
mode and off mode energy use into any standard it adopts in the final 
rule.
    It is pursuant to the authority set forth above that DOE is 
conducting the present SNOPR rulemaking for standby mode and off mode 
electricity consumption of microwave ovens.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563. (76 FR 3281, Jan. 21, 2011). Executive Order 13563 is 
supplemental to and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 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 Executive Order 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) 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, DOE believes that today's proposed rule is consistent with 
these principles, including the requirement that, to the extent 
permitted by law, benefits justify costs and that net benefits are 
maximized. Consistent with Executive Order 13563, and the range of 
impacts analyzed in this rulemaking, the energy efficiency standards 
proposed herein by DOE achieve maximum net benefits.

B. Background

1. Current Standards
    Section 310 of EISA 2007 amends section 325 of EPCA to require DOE 
to regulate standby mode and off mode energy use for all covered 
products, including microwave ovens, as part of energy conservation 
standards for which a final rule is adopted after July 10, 2010. (42 
U.S.C. 6295(gg)(3)(A))
    Based on its ongoing analyses and comments from interested parties, 
DOE decided not to amend energy conservation standards for microwave 
oven energy factor (microwave oven operation in active mode), but 
instead develop a separate energy use metric for standby mode and off 
mode. 74 FR 16040 (Apr. 8, 2009).
2. History of Standards Rulemaking for Microwave Ovens
    On March 15, 2006, DOE published on its Web site a document titled, 
``Rulemaking Framework for Commercial Clothes Washers and Residential 
Dishwashers, Dehumidifiers, and Cooking Products'' (Framework 
Document).\10\ 71 FR 15059. The Framework Document described the 
procedural and analytical approaches that DOE anticipated using to 
evaluate energy conservation standards for these products, and 
identified various issues to be resolved in conducting the rulemaking. 
On December 4, 2006, DOE posted on its Web site two spreadsheet tools 
for this rulemaking.\11\ The first tool calculates life-cycle cost 
(LCC) and payback periods (PBPs). The second tool--the national impact 
analysis (NIA) spreadsheet--calculates the impacts on shipments and the 
national energy savings (NES) and NPV at various candidate standard 
levels. DOE subsequently published the advance notice of proposed 
rulemaking (ANOPR) for this rulemaking (72 FR 64432 (Nov. 15, 2007), 
the November 2007 ANOPR) and on December 13, 2007, held a public 
meeting to present and seek comment on the analytical methodology and 
results in the ANOPR (the December 2007 Public Meeting).
---------------------------------------------------------------------------

    \10\ This document is available on the DOE Web site at: 
www.eere.energy.gov/buildings/appliance_standards/residential/dehumidifiers.html. (Last accessed March 18, 2011.)
    \11\ These spreadsheets are available on the DOE Web site at: 
https://www1.eere.energy.gov/buildings/appliance_standards/residential_products.html. (Last accessed March 18, 2011.)
---------------------------------------------------------------------------

    At the December 2007 Public Meeting, DOE invited comment in 
particular on the following issues concerning microwave ovens: (1) 
Incorporation of the International Electrotechnical Commission (IEC) 
test standard IEC Standard 62301 \12\ into DOE's microwave oven test 
procedure to measure standby mode and off mode power; (2) IEC Standard 
62301 test conditions; and (3) a requirement that if the measured 
standby mode power varies as a function of the time displayed, the 
standby mode power test would run for 12 hours, with an initial clock 
setting of 12:00.
---------------------------------------------------------------------------

    \12\ IEC standards are available for purchase at: https://www.iec.ch/.
---------------------------------------------------------------------------

    Interested parties' comments presented during the December 2007 
Public Meeting and submitted in response to the November 2007 ANOPR 
addressed the standby mode and off mode energy use of microwave ovens 
and the ability to combine that energy use into a single metric with 
cooking energy use. Those concerns lead DOE to thoroughly investigate 
standby mode, off mode, and active mode power consumption of microwave 
ovens.
    On October 17, 2008, DOE published a NOPR (the October 2008 NOPR) 
for cooking products and commercial clothes washers in the Federal 
Register proposing amended energy conservation standards. 73 FR 62034. 
In the October 2008 NOPR, DOE tentatively concluded that a standard for 
microwave oven standby mode and off mode energy use would be 
technologically feasible and economically justified. Id. at 62120. 
Therefore, concurrent with the standards NOPR, DOE published in the 
Federal Register a test procedure NOPR for microwave ovens to 
incorporate a measurement of standby mode and off mode power and to 
consider inclusion of such power as part of the energy conservation 
standards rulemaking. 73 FR 62134 (Oct. 17, 2008).
    In conjunction with the October 2008 NOPR, DOE posted on its Web 
site the associated technical support document (TSD). The TSD included 
the results of DOE's analyses, including: (1) The market and technology 
assessment, (2) screening analysis, (3) engineering analysis, (4) 
energy and water use determination, (5) markups analysis to determine 
product price, (6) LCC and PBP analyses, (7) shipments analysis, (8) 
NES and NIA, and (9) manufacturer impact analysis (MIA). The 
engineering analysis spreadsheet, the LCC spreadsheets, the national 
and regional impact analysis spreadsheets, and the MIA spreadsheet were 
all made available at www.eere.energy.gov/buildings/appliance_standards/commercial/clothes_washers.html.

[[Page 8532]]

    In the October 2008 NOPR, DOE concluded based on its additional 
investigations that, ``although it may be mathematically possible to 
combine energy consumption into a single metric encompassing active 
(cooking), standby, and off modes, it is not technically feasible to do 
so at this time * * *.'' 73 FR 62034, 62043 (Oct. 17, 2008). The 
separate prescriptive standby mode and off mode energy conservation 
standards proposed in the October 2008 NOPR for microwave ovens were as 
shown in Table II.1.

Table II.1--October 2008 NOPR Proposed Energy Conservation Standards for
                Microwave Oven Standby Mode and Off Mode
------------------------------------------------------------------------
        Product class            Proposed energy conservation standard
------------------------------------------------------------------------
Microwave Ovens.............  Maximum Standby Power = 1.0 watt
------------------------------------------------------------------------

    In the October 2008 NOPR, DOE described and sought further comment 
on the analytical framework, models, and tools (e.g., LCC and NIA 
spreadsheets) it was using to analyze the impacts of energy 
conservation standards for this product. DOE held a public meeting in 
Washington, DC, on November 13, 2008 (the November 2008 Public 
Meeting), to present the methodologies and results for the October 2008 
NOPR analyses.
    Multiple interested parties commented in response to the October 
2008 NOPR that insufficient data and information were available to 
complete this rulemaking, and requested that it be postponed to allow 
DOE to gather such inputs on which to base its analysis. Whirlpool 
Corporation (Whirlpool) commented that DOE should work with industry to 
gather comprehensive data. Whirlpool stated that DOE and industry must 
ensure the product is useful to the consumer at the standards adopted, 
which could mean delaying standards until the next round of rulemaking. 
(Whirlpool, No. 50 at p. 2; Whirlpool, Public Meeting Transcript, No. 
40.5 at p. 63) \13\ GE Consumer & Industrial (GE) stated that DOE's 
approach could have important implications for how standby power is 
approached for other covered products, and thus it is essential that 
DOE take the time to address these issues. GE commented that DOE should 
postpone the microwave oven standby mode and off mode energy 
conservation standards rulemaking to allow standby power issues for 
covered products to be addressed either through negotiation or through 
a rulemaking that considers how the definition of standby power would 
affect all appliances, not just microwave ovens. GE further commented 
that if the microwave oven standby mode and off mode energy 
conservation standards rulemaking was not postponed, DOE should issue a 
``no standard'' standard for microwave oven standby power. (GE, No. 48, 
at pp. 2, 4)
---------------------------------------------------------------------------

    \13\ A notation in the form ``Whirlpool, No. 50 at p. 2'' 
identifies a written comment that DOE has received and has included 
in the docket of the standards rulemaking for microwave ovens 
(Docket No. EE-2006-STD-0127). This particular notation refers to a 
comment (1) submitted by Whirlpool, (2) recorded in document number 
50 in the docket of this rulemaking, and (3) which appears on page 2 
of document number 50. A notation in the form ``Whirlpool, Public 
Meeting Transcript, No. 40.5 at p. 63'' identifies an oral comment 
that DOE received during the November 13, 2008 NOPR public meeting 
and which was recorded in the public meeting transcript in the 
docket for this rulemaking (Docket No. EE-2006-STD-0127), available 
on www.regulations.gov. This particular notation refers to a comment 
(1) made by Whirlpool during the public meeting, (2) recorded in 
document number 40.5, which is the public meeting transcript that is 
filed in the docket of this rulemaking, and (3) which appears on 
page 63 of document number 40.5.
---------------------------------------------------------------------------

    DOE agreed with these commenters that additional information would 
improve its analysis and, in April 2009, it concluded that it should 
defer a decision regarding amended energy conservation standards for 
standby mode and off mode energy use for microwave ovens pending 
further rulemaking. FR 16040, 16042 (Apr. 8, 2009). In the interim, DOE 
proceeded with consideration of energy conservation standards for 
microwave oven active mode energy use based on its proposals in the 
October 2008 NOPR, and its analysis determined that no new standards 
for microwave oven active mode (as to cooking efficiency) were 
technologically feasible and economically justified. Therefore, in a 
final rule published on April 8, 2009, DOE maintained the ``no 
standard'' standard for microwave oven active mode energy use. Id. at 
16087. The final rule is available on DOE's Web site at: 
www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/74fr16040.pdf.
    After continuing its analysis of microwave oven standby mode and 
off mode through additional testing, research, and consideration of an 
updated version of IEC Standard 62301, DOE developed this SNOPR to 
enable interested parties to comment on the revised standby power 
levels proposed for microwave oven standby mode and off mode energy 
use.
    The effective date of any new energy conservation standards for 
this product would be 3 years after the final rule is published in the 
Federal Register.

III. General Discussion

A. Test Procedures

    The test procedures for cooking products including microwave ovens 
initially appeared at 10 CFR part 430, subpart B, appendix I. Those 
test procedures were part of a May 10, 1978 final rule that first 
established test procedures for conventional ranges, cooktops, and 
ovens (including microwave ovens). 43 FR 20108. DOE later revised its 
test procedures for cooking products to measure their efficiency and 
energy use more accurately, publishing a final rule on October 3, 1997. 
62 FR 51976. The 1997 rule incorporated parts of IEC Standard 705-1998 
and Amendment 2-1993, ``Methods for Measuring the Performance of 
Microwave Ovens for Households and Similar Purposes.'' It measured 
microwave oven cooking efficiency, but did not address energy use in 
the standby mode or off mode.
    Section 310 of EISA 2007 amended EPCA to require DOE to amend the 
test procedures for covered products to address energy consumption of 
standby mode and off mode. If technically infeasible, DOE must 
prescribe a separate standby mode and off mode energy use test 
procedure. (42 U.S.C. 6295(gg)(2)(A))
    As discussed previously, DOE published a notice of proposed 
rulemaking in October 2008 to amend the microwave oven test procedure 
to provide for measuring standby mode and off mode power consumption, 
(73 FR 62134 (Oct. 17, 2008)) and held a public meeting on the proposed 
rulemaking on November 14, 2008. DOE received comments from interested 
parties both in written responses to the October 2008 NOPR and at the 
November 2008 Public Meeting.

[[Page 8533]]

    After considering stakeholder comments and additional information, 
DOE issued an SNOPR for the test procedure for measuring microwave oven 
standby mode and off mode power consumption. 75 FR 42612 (July 22, 
2010). In that SNOPR, DOE proposed adopting definitions of modes based 
on relevant provisions from IEC Standard 62301 Second Edition, 
Committee Draft for Vote (IEC Standard 62301 CDV), as well as language 
to clarify application of those provisions for measuring microwave oven 
standby mode and off mode power consumption. Id. Also on July 22, 2010, 
DOE issued a repeal final rule (the July 2010 TP Final Rule) 
eliminating the active mode cooking efficiency provisions in the 
microwave oven test procedure after it determined that those provisions 
did not produce accurate and repeatable results. 75 FR 42579. DOE held 
a public meeting on September 16, 2010, and accepted comments, data, 
and information regarding the test procedure SNOPR no later than 
October 4, 2010. DOE also invited inputs on microwave active mode test 
procedures for a potential new test procedure rulemaking. After 
consideration of these comments, an interim final rule for a microwave 
oven test procedure addressing standby mode and off mode power was 
published in the Federal Register on March 9, 2011 (the March 2011 TP 
Interim Final Rule). 76 FR 12825. DOE provided a 180-day comment period 
on the March 2011 TP Interim Final Rule, during which it received 
several comments on potential improvements to the microwave oven test 
procedure recently adopted. DOE is currently considering these 
comments, but does not believe that any of the suggested amendments 
would impact the analysis in today's notice.

B. Technological Feasibility

1. General
    DOE considers a design option to be technologically feasible if it 
is in use by the associated industry or if research has progressed to 
development of a working prototype. In each standards rulemaking, 
therefore, DOE conducts a screening analysis, based on information it 
has gathered regarding existing technology options and prototype 
designs. In consultation with manufacturers, design engineers, and 
other stakeholders, DOE develops a list of design options for 
consideration in the rulemaking. After DOE determines that particular 
design options are technologically feasible, the first of the screening 
criteria, it evaluates each option in light of the following three 
additional criteria: (a) Practicability to manufacture, install, and 
service; (b) adverse impacts on product utility or availability; and 
(c) adverse impacts on health or safety. 10 CFR part 430, subpart C, 
appendix A, section 4(a)(3) and (4). All technologically feasible 
design options that pass the three additional screening criteria are 
candidates for further assessment in the engineering and subsequent 
analyses in the NOPR stage. DOE may amend the list of retained design 
options in SNOPR analyses based on comments received on the NOPR and on 
further research.
    DOE published a list of evaluated microwave oven technologies in 
the November 2007 ANOPR. 72 FR 64432 (Nov. 15, 2007). DOE identified 
lower-power display technologies, improved power supplies and 
controllers, and alternative cooking sensor technologies as options to 
reduce standby power. DOE conducted this research when it became aware 
of the likelihood of EISA 2007 being signed, which DOE understood was 
to contain provisions pertaining to standby mode and off mode energy 
use. Therefore, DOE presented details of each design option to 
stakeholders at the December 2007 Public Meeting even though the 
results were not available in time for publication in the November 2007 
ANOPR. DOE believes all of these options are technologically feasible, 
and in the ANOPR invited comment on technology options that reduce 
standby power in microwave ovens. 72 FR 64432, 64513 (Nov. 15, 2007). 
For more details of these technology options and stakeholder comments, 
see section IV.B of this notice.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt, or to decline to adopt, an amended or 
new standard for a type (or class) of product such as microwave ovens, 
it must ``determine the maximum improvement in energy efficiency or 
maximum reduction in energy use that is technologically feasible'' for 
such a product. (42 U.S.C. 6295(p)(1)) Using the design parameters that 
lead to creation of the highest available product efficiencies, in the 
engineering analysis DOE determined the maximum technologically 
feasible (``max-tech'') standby power levels \14\ for microwave ovens, 
as shown in Table III.1. (See chapter 3 in the SNOPR TSD.) The max-tech 
microwave oven standby power level corresponds to a unit equipped with 
a default automatic power-down function that shuts off certain power-
consuming components after a specified period of user inactivity. The 
max-tech microwave oven standby power level was determined in the 
October 2008 NOPR to be 0.02 watts (W). 73 FR 62052 (Oct. 17, 2008). 
Based upon additional analyses for today's SNOPR, DOE is proposing that 
this max-tech level applies to the product class of microwave-only 
ovens and countertop combination microwave ovens. For built-in and 
over-the-range combination microwave ovens, DOE proposes, based on its 
analysis, a max-tech standby power level of 0.04 W. For more details of 
the max-tech levels and stakeholder comments, see section IV.C of this 
notice.
---------------------------------------------------------------------------

    \14\ As noted previously, DOE is unaware of any microwave ovens 
currently available that can operate in off mode. Therefore, 
efficiency levels for the purposes of evaluating standby mode and 
off mode energy use in microwave ovens are defined on the basis of 
standby power only.

   Table III.1--Proposed Max-Tech Microwave Oven Standby Power Levels
------------------------------------------------------------------------
              Product class                Max-Tech standby power level
------------------------------------------------------------------------
Microwave-Only Ovens and Countertop       0.02 watts
 Combination Microwave Ovens.
Built-In and Over-the-Range Combination   0.04 watts
 Microwave Ovens.
------------------------------------------------------------------------

C. Energy Savings

1. Determination of Energy Savings
    DOE used its NIA spreadsheet tool to estimate energy savings from 
amended standards for standby mode and off mode energy use for 
microwave ovens. (Section IV.E of today's supplemental notice and 
chapter 10 of the SNOPR TSD describe the NIA spreadsheet model.) DOE 
forecasted energy savings throughout the period of analysis (beginning 
in 2014, the year that amended standards would go into effect, and 
ending in 2043) for each TSL,

[[Page 8534]]

relative to the base case, which represents the forecast of energy 
consumption in the absence of amended energy conservation standards. 
DOE quantified the energy savings attributable to amended energy 
conservation standards as the difference in energy consumption between 
each standards case and the base case. The base case incorporates 
market demand for more efficient products.
    The NIA spreadsheet tool calculates the electricity savings in 
``site energy'' expressed in kilowatt-hours (kWh). Site energy is the 
energy consumed directly on location by an individual product. DOE 
reports national energy savings on an annual basis in terms of the 
aggregated source energy savings, which is the savings in energy used 
to generate and transmit the energy consumed at the site. To convert 
site energy to source energy, DOE derived conversion factors, which 
change with time, from the AEO 2010. (See SNOPR TSD chapter 10 for 
further details.)
2. Significance of Savings
    EPCA, as amended, prohibits DOE from adopting a standard for a 
product if that standard would not result in ``significant'' energy 
savings. (42 U.S.C. 6295(o)(3)(B)) Although EPCA does not define the 
term ``significant,'' the U.S. Court of Appeals for the District of 
Columbia Circuit, in Natural Resources Defense Council v. Herrington, 
768 F.2d 1355, 1373 (DC Cir. 1985), indicated that Congress intended 
``significant'' energy savings in this context to be savings that were 
not ``genuinely trivial.'' The energy savings for energy conservation 
standards at the TSL considered in this rulemaking are nontrivial, and, 
therefore, DOE considers them ``significant'' within the meaning of 42 
U.S.C. 6295(o)(3)(B).

D. Economic Justification

1. Specific Criteria
    As noted earlier, EPCA provides seven factors to be evaluated in 
determining whether an energy conservation standard is economically 
justified. (42 U.S.C. 6295(o)(2)(B)) The following sections describe 
how DOE has addressed each of those seven factors in this rulemaking.
a. Economic Impacts on Manufacturers and Consumers
    In determining the impacts of an amended standard on manufacturers, 
DOE first determines the quantitative impacts using an annual cash-flow 
approach. This step includes both a short-term assessment--based on the 
cost and capital requirements during the period between the issuance of 
a regulation and when entities must comply with the regulation--and a 
long-term assessment over a 30-year analysis period. The industry-wide 
impacts analyzed include INPV (which values the industry on the basis 
of expected future cash flows), cash flows by year, changes in revenue 
and income, and other measures of impact, as appropriate. Second, DOE 
analyzes and reports the impacts on different types of manufacturers, 
paying particular attention to 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 different DOE 
regulations and other regulatory requirements on manufacturers. For 
more details on the MIA, see section IV.G and chapter 12 of the SNOPR 
TSD.
    For consumers, measures of economic impact include the changes in 
life-cycle cost (LCC) and payback period for the product at each TSL. 
Under EPCA, the LCC is one of seven factors to be considered in 
determining economic justification. (42 U.S.C. 6295(o)(2)(B)(i)(II)) It 
is discussed in detail in the following section.
b. Life-Cycle Cost
    The LCC is the sum of the purchase price of product (including any 
installation) and the operating expense (including energy and 
maintenance expenditures), discounted over the lifetime of the product.
    In this rulemaking, DOE calculated both LCC and LCC savings for 
various power consumption levels in standby and off modes. DOE 
established the variability and uncertainty in energy use by defining 
the uncertainty and variability in the standby and off modes (hours per 
day) of the product. The variability in energy prices was characterized 
by use of regional energy prices. To account for uncertainty and 
variability in other inputs, such as product lifetime and discount 
rate, DOE used a distribution of values with probabilities attached to 
each value. For each consumer with a microwave oven, DOE sampled the 
values of those inputs from the probability distributions.
    DOE's analysis produced a range of LCCs. In addition to providing 
the average LCC savings or average payback for a standard, this 
approach enables DOE to identify the percentage of consumers achieving 
LCC savings or attaining certain payback values due to an energy 
conservation standard. DOE presents the LCC savings as a distribution, 
with a mean value and a range. In the analysis prepared for the October 
2008 NOPR, DOE assumed that consumers will purchase the product in 
2012. For today's SNOPR, that assumption has been changed to 2014, as 
this is the expected first year of compliance. See section IV.D for 
more details on the LCC and PBP analysis.
c. Energy Savings
    Significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard. Additionally, 
EPCA requires DOE, in determining the economic justification of a 
proposed standard, to consider the total energy savings that are 
projected to result directly from a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(III)) As noted in the October 2008 NOPR, DOE used the 
NIA spreadsheet to estimate total energy savings attributable to the 
considered standard levels. 73 FR 62034, 62046 (Oct. 17, 2008). See 
section IV.E and chapter 10 of the SNOPR TSD for more details on this 
analysis.
d. Lessening of Utility or Performance of Product
    In preparing the NOPR, DOE considered whether the evaluated design 
options likely would lessen the utility or performance of the standby 
mode and off mode of microwave ovens. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) 
In the October 2008 NOPR, DOE determined that none of the considered 
TSLs would reduce the utility or performance of microwave ovens; all 
consumer utility features that affect standby power, such as a clock 
display and a cooking sensor, would be retained. 73 FR 62034, 62047 
(Oct. 17, 2008).
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition likely to 
result from standards. It 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 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)(i)(V) and (B)(ii)). 
DOE received the Attorney General's determination, dated December 16, 
2008, on standards proposed in the October 2008 NOPR. The Attorney 
General's determination for October 2008 NOPR did not mention microwave 
oven standards. (DOJ, No. 53 at pp. 1-

[[Page 8535]]

2). DOE has transmitted a copy of today's proposed rule to the Attorney 
General and has requested that the Department of Justice provide its 
determination on this issue.
f. Need of the Nation To Conserve Energy
    The non-monetary benefits of proposed standards are likely to be 
reflected in improvements to the reliability of the Nation's energy 
system--namely, reductions in the demand for energy will result in 
reduced costs for maintaining reliability of the Nation's electricity 
system. DOE conducts a utility impact analysis to estimate how 
standards may impact the Nation's needed power generation capacity. 
This analysis captures the effects of efficiency improvements on 
electricity consumption by the product that is the subject of this 
rulemaking.
    Proposed standards also likely result in improvements to the 
environment. In quantifying those improvements, DOE has calculated 
emission reductions based on the estimated level of power generation 
displaced by each TSL for microwave oven standby power. DOE reports the 
environmental effects from the proposed standards in an environmental 
assessment in chapter 15 of the SNOPR TSD. (42. U.S.C. 
6295(o)(2)(B)(i)(VI) and 6316(a)) See section IV.J for more details on 
this analysis.
g. Other Factors
    The Secretary, in determining whether a standard is economically 
justified, may consider other factors that the Secretary deems to be 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In considering amended 
standards for today's supplemental notice of proposed rulemaking, the 
Secretary found no relevant factors other than those identified 
elsewhere in today's SNOPR.
2. Rebuttable Presumption
    As set forth under 42 U.S.C. 6295(o)(2)(B)(iii), there is a 
rebuttable presumption that an energy conservation standard is 
economically justified if the increased installed 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. DOE's LCC and 
PBP analyses generate values that calculate the payback period for 
consumers of products that meet potential energy conservation 
standards. Included is the 3-year payback period contemplated under the 
rebuttable presumption test. DOE routinely conducts a full economic 
analysis that considers the full range of impacts, however, including 
those to the consumer, manufacturer, Nation, and environment, as 
required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this 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). Section V.B.1.c of today's supplemental notice and 
chapter 8 of the SNOPR TSD address the calculation of rebuttable-
presumption payback.

IV. Methodology and Revisions to the Analyses Employed in the October 
2008 Proposed Rule

    In weighing the benefits and burdens of amended standards for 
microwave oven standby mode and off mode energy use, DOE used economic 
models to estimate the impacts of each TSL. The life-cycle cost (LCC) 
spreadsheet calculates the LCC impacts and payback periods for 
potential amended energy conservation standards. DOE used the 
engineering spreadsheet to develop the relationship between cost and 
efficiency and to calculate the simple payback period for purposes of 
addressing the rebuttable presumption that a standard with a payback 
period of less than 3 years is economically justified. The NIA 
spreadsheet provides shipments forecasts and then calculates NES and 
NPV impacts of potential amended energy conservation standards. DOE 
also assessed manufacturer impacts, largely through use of the 
Government Regulatory Impact Model (GRIM).
    Additionally, DOE estimated the impacts of potential amended energy 
conservation standards on utilities and the environment. DOE used a 
version of the EIA's National Energy Modeling System (NEMS) for the 
utility and environmental analyses. The EIA has developed the NEMS 
model, which simulates the energy economy of the United States, over 
several years primarily for the purpose of preparing the AEO. The NEMS 
produces forecasts for the United States energy situation that are 
available in the public domain. The version of NEMS used for appliance 
standards analysis is called NEMS-BT.\15\ The NEMS-BT offers a 
sophisticated picture of the effect of standards, because it accounts 
for the interactions among the various energy supply and demand sectors 
and the economy as a whole.
---------------------------------------------------------------------------

    \15\ The EIA approves the use of the name NEMS to describe only 
an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the model used here has been named 
NEMS-BT. (``BT'' stands for DOE's Building Technologies Program.) 
For more information on NEMS, refer to The National Energy Modeling 
System: An Overview, DOE/EIA-0581 (98) (Feb. 1998) (available at: 
https://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf). (Last 
accessed March 18, 2011.)
---------------------------------------------------------------------------

A. Product Classes

    In general, when evaluating and establishing energy conservation 
standards, DOE divides covered products into classes by the type of 
energy used, capacity, or other performance-related features that 
affect consumer utility and efficiency. (42 U.S.C. 6295(q); 6316(a)) 
Different energy conservation standards may apply to different product 
classes. Id.
    At the time of the October 2008 NOPR, DOE's regulations codified at 
10 CFR 430.2 defined a microwave oven as a class of kitchen ranges and 
ovens which is a household cooking appliance consisting of a 
compartment designed to cook or heat food by means of microwave energy. 
In the October 2008 NOPR, DOE proposed a single product class for 
microwave ovens that would encompass microwave ovens with and without 
browning (thermal) elements, but would not include microwave ovens that 
incorporate convection systems. 73 FR 62034, 62048 (Oct. 17, 2008).
    Whirlpool commented that DOE's proposed definition of covered 
products creates a new product definition without proper engagement of 
interested parties by covering microwave ovens with or without thermal 
elements designed for surface browning of food. Whirlpool also 
commented that DOE stated combination microwave ovens, which were 
previously undefined, are not products covered by the microwave oven 
test procedure or standard. Whirlpool stated that DOE's proposed 
definition of covered products is inconsistent with the regulatory 
definition of a microwave oven provided in 10 CFR part 430 because 
there is no mention of thermal elements designed for browning food, and 
furthermore is not clear and should be clarified. (Whirlpool, No. 50 at 
pp. 1-2; Whirlpool, Public Meeting Transcript, No. 40.5 at p. 29) GE 
also commented that DOE should clarify what products are considered 
covered products. GE stated that DOE should review data for different 
product types, and exclude those for which there is insufficient data 
to support DOE's analysis. (GE, No. 48 at pp. 2-3)
    As part of its microwave oven test procedure rulemaking, DOE 
reassessed what products would be considered microwave ovens under the 
regulatory definition, and whether multiple product classes would be 
appropriate. As discussed in the March 2011 TP

[[Page 8536]]

Interim Final Rule, DOE amended the definition of microwave oven in 10 
CFR 430.2 to clarify that it includes microwave ovens with or without 
thermal elements designed for surface browning of food and combination 
ovens. DOE also discussed its determination that all ovens equipped 
with microwave capability would be considered a covered product, 
regardless of which cooking mode (i.e., radiant heating or microwave 
energy) is primary. Based on its preliminary analysis, DOE concluded 
that the general standby mode and off mode operation for microwave 
ovens that incorporate other means of cooking food does not differ from 
that of microwave-only units. As a result, DOE amended the microwave 
oven test procedure to require that the same standby mode and off mode 
testing methods be used for all microwave ovens. 76 FR 12825, 12828-30 
(Mar. 9, 2011).
    In order to determine whether specific types of microwave ovens 
should be separated into different product classes, DOE investigated 
whether there are any performance related features that would justify 
the establishment of a separate energy conservation standard. As 
discussed in the October 2008 NOPR, DOE tested a sample of 32 
countertop microwave-only units and measured standby mode power ranging 
from 1.2 W to 5.8 W. 73 FR 62034, 62042 (Oct. 17, 2008). None of these 
units was capable of operation in off mode, nor, as noted previously, 
is DOE aware of any other current microwave ovens capable of such 
operation. As discussed below in section IV.B, DOE noted that standby 
power consumption for microwave-only units largely depended on the 
presence of a cooking sensor, the display technology, the power supply 
and control board, and implementation of a power-down feature. With 
regards to display technologies, DOE noted that microwave-only units 
incorporated Light Emitting Diode (LED) displays, Liquid Crystal 
Displays (LCDs), and Vacuum Fluorescent Displays (VFDs).
    Based on comments received in response to the October 2008 NOPR 
(Association of Home Appliance Manufacturers (AHAM), No. 47 at p. 6; 
Whirlpool, No. 50 at p. 1), DOE conducted a survey of over-the-range 
microwave-only units available on the U.S. market. DOE determined that 
the display technologies used are similar to those used in countertop 
microwave-only units (i.e., LED displays, LCDs, and VFDs). DOE also 
conducted in-store standby mode testing on a limited sample of over-
the-range microwave-only units which showed similar standby power 
consumption as countertop microwave-only units. For these reasons, DOE 
tentatively concludes that over-the-range microwave-only units would 
not warrant a separate product class. DOE understands that over-the-
range microwave-only units may have additional components that are 
energized during active mode operation (i.e., exhaust fan motors). 
However, DOE's testing showed that the presence of such features did 
not increase the standby power consumption to warrant establishing a 
separate product class.
    DOE also conducted standby power testing on a sample of 13 
representative combination microwave ovens, including 5 countertop 
combination microwave ovens, 6 over-the-range combination microwave 
ovens, and 2 built-in combination microwave ovens. DOE's testing showed 
that the countertop combination microwave ovens use similar display 
technologies as countertop microwave-only units (i.e., LED displays, 
LCDs, and VFDs), and had standby power consumption ranging from 1.2 W 
to 4.7 W, which is similar to the standby power consumption for 
countertop microwave-only units. As a result, DOE tentatively concludes 
that countertop combination microwave ovens would not warrant a product 
class separate from microwave-only ovens.
    DOE's testing of built-in and over-the-range combination microwave 
ovens showed that the standby power consumption for these products 
ranged from 4.1 W to 8.8 W, which is higher than the standby power 
consumption for other microwave oven product types (i.e., countertop 
microwave-only, over-the-range microwave-only, and countertop 
combination microwave ovens). DOE's reverse-engineering analysis 
suggests that the additional features in built-in and over-the-range 
combination microwave ovens required to handle the thermal loads 
associated with their installation and to provide consumer utility, 
such as additional exhaust fan motors, convection fan motors and 
heaters, and additional lights, require a significant number of 
additional relays on the control board, and thus require a larger power 
supply for the control of such relays. While the relays themselves do 
not consume power in standby mode, they increase the total power supply 
requirements of the control board and thus increase the standby losses 
of the power supply. As a result, DOE believes that a separate product 
class should be established for built-in and over-the-range combination 
microwave ovens. DOE recognizes that built-in and over-the-range 
microwave-only units may similarly require some additional relays for 
exhaust fans and lights, and that countertop combination microwave 
ovens would require some additional relays for convection fans and 
heaters. However, DOE's product testing and reverse-engineering 
analyses indicated that these product types use similar-sized power 
supplies as those found in countertop microwave-only units, and as a 
result would not warrant a separate product class from countertop 
microwave-only units. Details of standby power testing for the 
determination of product classes is presented in chapter 5 of the SNOPR 
TSD.
    In summary, DOE proposes to establish the following two product 
classes for microwave ovens:

               Table IV.1--Microwave Oven Product Classes
------------------------------------------------------------------------
                              Product class
-------------------------------------------------------------------------
1. Microwave-Only Ovens and Countertop Combination Microwave Ovens.
2. Built-in and Over-the-Range Combination Microwave Ovens.
------------------------------------------------------------------------

    DOE determined that separate product classes for the purposes of 
setting energy conservation standards addressing standby mode and off 
mode energy use are warranted on the basis of different standby power 
performance. DOE did not evaluate whether the same product class 
distinction would also be appropriate for any active mode energy use 
standards because DOE eliminated the regulatory provisions establishing 
the cooking efficiency test procedure for microwave ovens in the July 
2010 TP Final Rule. 75 FR 42579 (July 22, 2010). If DOE adopts 
amendments to the microwave oven test procedure to include provisions 
for measuring active mode cooking efficiency, DOE may reevaluate these 
product classes as part of a future microwave oven energy conservation 
standards rulemaking. At that time, DOE may consider dividing 
countertop combination microwave ovens and over-the-range/built-in 
microwave-only units into separate product classes to account for the 
energy performance of heating components other than the microwave 
portion.

B. Technology Assessment

    Product teardowns performed by DOE for this and past rulemakings 
gave DOE an insight into the strategies a manufacturer could adopt to 
achieve higher energy conservation standards. In the October 2008 NOPR, 
DOE asked stakeholders to provide data and information that would help 
DOE

[[Page 8537]]

evaluate the utility provided by specific features that contribute to 
microwave oven standby power. In addition, DOE conducted additional 
research on several microwave oven technologies that significantly 
affect standby power, including cooking sensors, display technologies, 
and control strategies and associated control boards. In the October 
2008 NOPR, DOE determined that control strategies are available that 
enable manufacturers to make design tradeoffs between incorporating 
features that consumer standby power (such as displays or cooking 
sensors) and including a function to turn power off to those components 
during standby mode. 73 FR 62034, 62052 (Oct. 17, 2008).
    As discussed above, DOE believes that the standby power 
characteristics for countertop combination microwave ovens and over-
the-range microwave-only units are similar to that of counter-top 
microwave-only units, and therefore, the same technology options would 
apply to these products. Additional testing on over-the range 
combination microwave ovens conducted by DOE also showed that standby 
power in these products depends largely on the same factors. The 
following sections discuss each of these technology options.
1. Cooking Sensors
    In the October 2008 NOPR, DOE reported that its teardown analysis 
had revealed one cooking sensor technology with no standby power 
consumption used in microwave ovens on the U.S. market: A piezoelectric 
steam sensor. DOE also found that infrared and weight sensors, which 
require little to no warm-up time or standby power, had been applied 
successfully in Japanese-market microwave ovens. Furthermore, DOE 
identified relative humidity sensors with no standby power consumption 
as a feasible microwave oven cooking sensor technology, but found no 
microwave ovens using these sensors at the time. Finally, DOE learned 
that a major microwave oven supplier to the U.S. market was preparing 
to introduce microwave ovens using a new type of absolute humidity 
sensor with no standby power requirement and no cost premium over that 
of a conventional absolute humidity sensor. 73 FR 62034, 62051 (Oct. 
17, 2008). DOE requested input and data on the utility provided by 
specific microwave oven features, including in relevant part cooking 
sensors that do not require standby power. Id. at 62133.
    AHAM agreed with DOE that some manufacturers in certain areas of 
the world have already started to incorporate some of the cooking 
sensor design options into microwave ovens. (AHAM, Public Meeting 
Transcript, No. 40.5 at pp. 78-79) AHAM expressed two concerns about 
these sensors: That reliability and accuracy of the sensors have not 
been fully proved through testing, and that there is limited 
availability of those sensors to microwave oven manufacturers due to 
intellectual property protections. (AHAM, Public Meeting Transcript, 
No. 40.5 at pp. 69-70) AHAM further requested that DOE provide data on 
the availability, reliability, and functionality of the cooking sensors 
that consume no standby power. AHAM stated that data collection for 
such sensors provides an additional rationale for postponing the 
rulemaking or not adopting a standby power standard for microwave 
ovens. (AHAM, No. 47 at p. 5)
    Whirlpool agreed with DOE that cooking sensors with no standby 
power consumption are becoming available, though experience with them 
is limited. According to Whirlpool, there is a lack of necessary data 
regarding reliability, accuracy and intellectual property status. 
(Whirlpool, No. 50 at p. 7)
    GE similarly commented that cooking sensors with no standby power 
consumption, while in limited use at that time, had not been fully 
tested and evaluated as appropriate alternatives. GE also requested 
that DOE provide data on the availability, reliability, and 
functionality of the sensors discussed in the October 2008 NOPR, 
relative to sensors currently in use. (GE, No. 48 at p. 3) GE also 
commented that absolute humidity sensors with standby power consumption 
offer greater resolution than relative humidity sensors with no standby 
power consumption and therefore offer consumer utility. (GE, Public 
Meeting Transcript, No. 40.5 at pp. 74-75) Furthermore, GE suggested 
that some of the sensor technologies described in the October 2008 
NOPR, such as infrared and weight sensors, are not feasible 
alternatives to the absolute humidity sensors used today. For instance, 
infrared sensors are easily fouled by contaminants and condensation. GE 
commented that DOE should provide further information about absolute 
humidity sensors with no standby power consumption and no cost premium 
over that of a conventional absolute humidity sensor. GE stated that it 
needed to review performance parameters and any associated intellectual 
property issues associated with these sensors. (GE, No. 48, pp. 3-4)
    DOE requested comment on whether any intellectual property or 
patent infringement issues are associated with the cooking sensor 
technologies discussed above; however, DOE did not receive any such 
data. In addition, DOE is not currently aware of any intellectual 
property or patent infringement issues for infrared sensors, weight 
sensors, piezoelectric sensors, or relative humidity sensors. With 
respect to the accuracy and reliability of low- and zero-standby power 
cooking sensors, DOE notes that a significant number of microwave oven 
models using the alternate cooking sensor technologies discussed above 
are available on the international market, and have been available for 
a number of years. As discussed above, DOE is also aware of one zero-
standby power cooking sensor technology used in microwave ovens on the 
U.S. market. DOE is not aware of any data indicating that the 
reliability and accuracy associated with these low- and zero-standby 
power cooking sensors significantly differs from that of the absolute 
humidity sensors currently employed in microwave ovens on the U.S. 
market. DOE is also unaware of data showing that fouling of infrared 
cooking sensors, as commented by GE, would significantly differ from 
that of absolute humidity sensors, or data on the decreased accuracy 
due to fouling as compared to the fouling of absolute humidity sensors. 
DOE recognizes GE's concern regarding the use of relative humidity 
sensors in microwave ovens. Because DOE is not aware of any relative 
humidity cooking sensors used in microwave ovens currently on the 
market, DOE is not aware of any data regarding the accuracy of these 
sensors for detecting the state of the cooking load to adjust the 
cooking time. However, DOE notes that multiple other cooking sensor 
technology options exist that have been employed in microwave ovens in 
place of an absolute humidity cooking sensor. For these reasons, DOE 
tentatively concludes that the low- and zero-standby-power cooking 
sensor technologies discussed above are viable design options, and has 
analyzed them for this SNOPR. DOE requests data and information on the 
accuracy and reliability of low- and zero-standby power cooking sensors 
as compared to absolute humidity cooking sensors currently used in 
microwave ovens on the U.S. market, and whether these technologies 
would affect how consumers use their microwave ovens or their 
satisfaction in using them due to any lessening of the utility or the 
performance of microwaves imposed by the standard. DOE also seeks 
information on the current commercial availability of this technology, 
the

[[Page 8538]]

likelihood of future adoption, and the potential impact on the 
lessening of competition amongst manufacturers. DOE also continues to 
request comment on whether any intellectual property or patent 
infringement issues are associated with the cooking sensor technologies 
discussed above.
    With respect to GE's comment that DOE should provide further 
information on absolute humidity sensors with no standby power 
consumption and no cost premium over that of a conventional absolute 
humidity sensor, because DOE was made aware of this information during 
interviews with microwave oven manufacturers, DOE is unable to provide 
further information regarding this absolute humidity cooking sensor.
    Edison Electric Institute (EEI) stated that due to the reduction in 
cooking time and thus energy consumption made possible by use of a 
cooking sensor, it is important to retain this feature in microwave 
ovens. (EEI, Public Meeting Transcript, No 40.5 at pp. 71-72) Also, EEI 
expressed concern about the recovery time of a cooking sensor after a 
full microwave oven power-down and the impacts on consumer utility of a 
slow recovery time. (EEI, Public Meeting Transcript, No. 40.5 at pp. 
77-78) As discussed in the October 2008 NOPR, low- and zero-standby-
power cooking sensor technologies require little to no warm-up time. 73 
FR 62034, 62050-51 (Oct. 17, 2008). As a result, DOE believes that low- 
and zero-standby-power cooking sensor technologies can be used in 
microwave ovens without impacting consumer utility.
2. Display Technologies
    DOE stated in the October 2008 NOPR that it would consider three 
display technologies for reducing microwave oven standby power 
consumption: LED displays, LCDs with and without backlighting, and 
VFDs. DOE stated that LED displays and LCDs consume less power than 
VFDs. DOE also stated that each identified display technology provides 
acceptable consumer utility, including brightness, viewing angle, and 
ability to display complex characters. 73 FR 62034, 62051 (Oct. 17, 
2008). DOE requested input and data on the utility provided by specific 
microwave oven features, including, in relevant part, display 
technologies. Id. at 62133.
    EEI commented that consumer utility is associated with an 
electronic display and timer rather than a mechanical timer. (EEI, 
Public Meeting Transcript, No. 40.5 at pp. 63-64). As discussed in the 
October 2008 NOPR, DOE was not aware of any microwave ovens currently 
available on the U.S. market using electromechanical controls (73 FR 
62034, 62051 (Oct. 17, 2008)), and thus has considered only electronic 
controls (including displays) in determining standby power levels. In 
addition, DOE is not considering electromechanical controls as a design 
option to reduce standby power consumption.
    AHAM, GE, and Whirlpool suggested that not all microwave oven 
display technologies considered by DOE will maintain consumer utility 
in all applications. Whirlpool stated that limiting the information 
displayed and/or reducing the size of the clock reduces standby power 
consumption at the expense of consumer utility. AHAM and Whirlpool 
expressed concerns about the reliability of LED displays, particularly 
in over-the-range microwave oven applications. According to AHAM, GE, 
and Whirlpool, for over-the-range microwave oven applications, VFDs are 
generally preferred over other display technologies such as backlit 
LCDs or LED displays, as VFDs: (1) Have greater reliability when 
exposed to the higher heat encountered above a cooking surface; (2) 
allow a wider viewing angle and have greater visibility; and (3) are 
available in more sizes and colors as demanded by the consumers of 
higher-end products, also allowing a manufacturer to provide a ``family 
look'' to product suites. (AHAM, No. 47 at p. 5; AHAM, Public Meeting 
Transcript, No. 40.5 at pp. 70-71; GE, No. 48 at p. 3; GE, Public 
Meeting Transcript, No 40.5, p. 75; Whirlpool, No. 50 at pp. 6-7).
    As discussed above, DOE's research suggests that multiple over-the-
range microwave ovens with low power displays, including the LED and 
LCD types, are currently available on the U.S. market. DOE has also 
found that manufacturer temperature ratings for the three types of 
displays are comparable. Furthermore, DOE has found that LED displays 
and LCDs in both countertop and over-the-range microwave ovens offer 
acceptable consumer utility features, including brightness, viewing 
angle, and ability to display complex characters. DOE found no 
microwave oven display technologies with intermittent backlighting or 
other features that impair consumer utility. As a result, DOE believes 
that LED displays and LCDs can be integrated into any countertop or 
over-the-range microwave oven, with proper heat shielding and without 
significant loss of consumer utility.
3. Power Supply and Control Boards
    In the October 2008 NOPR, DOE found several technologies available 
to increase power supply and control board efficiency that would reduce 
microwave oven standby power consumption. DOE found some microwave 
ovens on the U.S. market using switching power supplies with up to 75-
percent conversion efficiencies and 0.2 W or less no-load standby 
losses, though these models came with a higher cost, higher part count, 
and greater complexity. DOE stated that switching power supplies are as 
yet unproven in long-term microwave oven applications, and the greater 
complexity of these power supplies may also lower overall reliability. 
DOE was also aware of high efficiency power supply and control board 
components that could be used to reduce standby power consumption, but 
these were not found on commercially available microwave ovens at the 
time. 73 FR 62034, 62051 (Oct. 17, 2008). DOE requested comments on the 
ability of switching or similar modern power supplies to operate 
successfully inside a microwave oven and on the impacts of the 
efficiency of such power supplies on microwave oven standby power. Id. 
at 62133.
    AHAM commented that switching power supplies can operate 
successfully in microwave ovens, but that associated reliability is 
still relatively unknown. (AHAM, No. 47 at p. 6) Whirlpool cited 
limited data suggesting that the costs and potential reliability issues 
associated with switching power supplies do not support their economic 
viability. (Whirlpool, No. 50 at p. 8) Nevertheless, Whirlpool stated 
that it sells products with switching power supplies outside of the 
U.S. (Whirlpool, Public Meeting Transcript, No. 40.5 at pp. 81-82) DOE 
observes that switching power supplies are found in products such as 
computers, battery chargers, clothes washers, and clothes dryers, 
suggesting that the reliability and durability of switching power 
supplies has been proven in residential appliance applications. DOE 
notes that microwave ovens incorporating switching power supplies have 
been available for multiple years and are still used, as evidenced by 
such power supplies being observed in DOE's most recent test sample of 
combination microwave ovens. DOE is also unaware of data indicating 
that the reliability of switching power supplies is significantly worse 
than conventional linear power supplies over the lifetime of the 
product.
    Whirlpool suggested that switching power supplies are modestly more 
efficient than conventional power supplies. (Whirlpool, No. 50 at p. 8) 
Pacific Gas and Electric (PG&E) commented that switching power

[[Page 8539]]

supplies can have efficiency exceeding 90 percent and those in 
computers are routinely exceeding 95 percent. (PG&E, Public Meeting 
Transcript, No. 40.5 at p. 81) DOE believes that the application of 
power supplies is very different for computers and microwave ovens, and 
DOE research indicates that switching power supplies for appliance 
applications in sizes similar to those utilized in microwave ovens 
achieve no greater than 75-percent efficiency.\16\ Furthermore, DOE 
notes that the most efficient power supplies available for consumer 
computer use typically do not exceed 92-percent efficiency.\17\
---------------------------------------------------------------------------

    \16\ Information on the design and efficiency of switch mode 
power supplies can be found at https://www.powerint.com/en/applications/major-appliances.
    \17\ Information can be found at https://www.plugloadsolutions.com/80PlusPowerSupplies.aspx.
---------------------------------------------------------------------------

    AHAM expressed concern that electromechanical controls may be 
necessary in order to meet standby power requirements. (AHAM, Public 
Meeting Transcript, No. 40.5 at p. 58) As discussed above, DOE is not 
aware of any microwave ovens currently on the market with 
electromechanical controls. As a result, DOE has considered only 
microwave ovens with electronic controls in determining standby power 
levels. DOE does not believe that electromechanical controls would be 
required to achieve any of the standby power levels presented in 
section IV.D.
4. Power-Down Options
    In the October 2008 NOPR, DOE determined that control strategies 
are available that allowed microwave oven manufacturers to make design 
tradeoffs between incorporating power-consuming features such as 
displays or cooking sensors and including a function to cut power to 
those components during standby. DOE found that a large number of 
microwave ovens incorporating this automatic power-down feature were 
available in other markets such as Japan. 73 FR 62034, 62051-52 (Oct. 
17, 2008). DOE requested input and data on these control strategies as 
well as comments on the viability and cost of microwave oven control 
board circuitry that could accommodate transistors to switch off 
cooking sensors and displays. Id. at 62133.
    AHAM commented that the industry lacks data on control board 
circuitry to allow for a function to cut off power during standby mode. 
According to AHAM, such features must be reliable in high-temperature 
environments. AHAM noted that DOE has allowed no time for manufacturers 
to evaluate the viability or feasibility of the proposed technologies. 
(AHAM, No. 47 at pp. 3, 6) DOE research has not identified any 
technical barrier that would prevent microwave oven manufacturers from 
successfully integrating such control board circuitry with proper heat 
shielding and other design elements. DOE is also aware of similar 
automatic power-down control technologies incorporated in products such 
as clothes washers and clothes dryers, which utilize an additional 
transformerless power supply to provide just enough power to maintain 
the microcontroller chip while the unit is powered down, resulting in 
very low standby power levels. Therefore, DOE continues to believe that 
an automatic power-down feature is technically feasible in microwave 
applications.
    AHAM commented that it is concerned with a reduction in consumer 
utility and how the consumer interfaces with the unit. AHAM added that 
evaluating the impacts on consumer utility will require substantial 
consumer research. (AHAM, No. 47 at p. 6) AHAM suggested that an 
indicator light may be desirable in a microwave oven with the automatic 
power-down feature to communicate the product's status to the user. 
(AHAM, Public Meeting Transcript, No. 40.5 at p. 59) Whirlpool stated 
that an automatic power-down feature in microwave ovens may cause 
consumer confusion and complaints and could require significant 
consumer education efforts. (Whirlpool, Public Meeting Transcript, No. 
40.5 at pp. 65-66) Whirlpool commented that control technologies are 
available to dim or turn off a display after a period of inactivity has 
elapsed but that Whirlpool does not currently incorporate such a 
technology into its products. (Whirlpool, No. 50 at p. 7) Whirlpool and 
ASAP both commented that there could be a variety of ways to implement 
a power-down feature, including consumer-activated or fuzzy logic-based 
power response. (ASAP, Public Meeting Transcript, No. 40.5 at p. 79; 
Whirlpool, Public Meeting Transcript, No. 40.5 at p. 80) DOE has 
considered consumer utility issues in the determination of the proposed 
standby mode and off mode energy conservation standards. (See section 
V.C of today's supplemental notice and chapter 5 of the SNOPR TSD for 
additional discussion of this topic.) DOE welcomes further comments 
regarding consumer utility issues associated with each of the 
technology options, and in particular the low- and zero-standby power 
cooking sensors and display technologies, considered in this analysis.
    The comment filed jointly (hereafter, the Joint Comment) by ASAP, 
American Council for an Energy-Efficient Economy, American Rivers, 
Natural Resources Defense Council, Northeast Energy Efficiency 
Partnerships, Northwest Power and Conservation Council, Southern 
California Gas Company, San Diego Gas and Electric Company, Southern 
California Edison, and Earthjustice (EJ), stated that DOE should 
analyze user-activated controls to turn the display on and off, in 
addition to automatic power-down features. According to these 
commenters, a microwave oven equipped with such controls would meet the 
EPCA definition of operating in standby or off mode, and would give 
consumers the ability to reduce energy use below the proposed standby 
power standard level. The Joint Comment asserted that this type of 
switch is similar to power switches found on many computers, copiers, 
printers, televisions, and other products sold outside of the U.S. 
(Joint Comment, No. 44 at p. 10)
    ASAP requested clarification whether an on/off switch, particularly 
a consumer-activated one, would be considered as a design option. 
(ASAP, Public Meeting Transcript, No. 40.5 at pp. 66, 73-74) GE 
questioned whether a microwave oven would be in standby mode or off 
mode if the display is turned off. (GE, Public Meeting Transcript, No. 
40.5 at p. 73)
    Under the mode definitions adopted by the amended microwave oven 
test procedure (76 FR 12825, 12834-37 (Mar. 9, 2011)), a product for 
which an on/off switch has turned off the display would be considered 
to be in off mode, unless other energy consuming features associated 
with standby mode remain energized (i.e., features to facilitate the 
activation of other modes by remote switch, internal sensor, or timer; 
or continuous functions, including other information or status displays 
or sensor-based features). In the latter case, the microwave oven would 
remain in standby mode even with the display turned off.
    DOE is not aware of any products incorporating a user-activated 
control to turn the display on or off. Further, DOE does not have 
information to evaluate how often consumers might make use of this 
feature. Therefore, at this time DOE is unable to analyze such a 
control as a design option. DOE agrees that such a feature, if 
provided, could result in decreased energy usage in standby mode or off 
mode, and remains open to consideration of such a design option in 
future rulemakings. DOE also notes that manufacturers would not be 
precluded

[[Page 8540]]

from incorporating such a feature in their products under the proposed 
standards.

C. Engineering Analysis

    The purpose of the engineering analysis is to characterize the 
relationship between the energy use and the cost of standby mode 
features of microwave ovens. DOE used this standby power/cost 
relationship as input to the payback period, LCC, and NIA analyses. The 
engineering analysis provides data that can be used to establish the 
manufacturer selling price of more efficient products. Those data 
include manufacturing costs and manufacturer markups.
    DOE has identified three basic methods for generating manufacturing 
costs: (1) The design-option approach, which provides the incremental 
costs of adding to a baseline model design options that will improve 
its efficiency (i.e., lower its energy use in standby mode and off 
mode); (2) the efficiency-level approach, which provides the 
incremental costs of moving to higher energy efficiency levels (in this 
case, levels of reduced standby power), without regard to the 
particular design option(s) used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data on costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels. DOE conducted the 
engineering analysis for this rulemaking using the efficiency-level 
approach. For this analysis, DOE relied on laboratory testing of 
representative microwave ovens. DOE supplemented the standby power data 
with data gained through reverse-engineering analysis and primary and 
secondary research, as appropriate. To identify microwave oven design 
options, DOE performed a reverse engineering analysis on a 
representative sample of microwave ovens. Details of the engineering 
analysis are in chapter 5 of the SNOPR TSD.
1. Energy Use Metric
    In the October 2008 NOPR, DOE explored whether it would be 
technically feasible to combine the existing measure of energy 
efficiency during the cooking cycle per use with standby mode and off 
mode energy use over time to form a single metric, as required by EISA 
2007. (42 U.S.C. 6295(gg)(2)(A)) DOE tentatively concluded that, 
although it may be mathematically possible to combine energy 
consumption into a single metric encompassing active, standby, and off 
modes, it is not technically feasible to do so due to the high 
variability in the cooking efficiency measurement based on the 
microwave oven test procedure at that time and because of the 
significant contribution of standby power to overall microwave oven 
energy use. Therefore, DOE proposed a separate metric to measure 
standby power as provided by EISA 2007. 73 FR 62034, 62042-43 (Oct. 17, 
2008).
    ASAP, EEI, the Joint Comment, and Whirlpool agree with DOE's 
determination that it is not technically feasible to integrate standby 
and off mode energy use into a single efficiency metric for microwave 
ovens. (ASAP, Public Meeting Transcript, No. 40.5 at pp. 53; EEI, 
Public Meeting Transcript, No. 40.5 at p. 55; Joint Comment, No. 44 at 
p. 10; Whirlpool, No. 50 at p. 4; Whirlpool, Public Meeting Transcript, 
No. 40.5 at p. 29) AHAM stated that an integrated energy descriptor, 
while technically feasible, is not practical. (AHAM, No. 47 at p. 4; 
AHAM, Public Meeting Transcript, No. 40.5 at pp. 27, 54-55) ASAP 
questioned whether there was any legal prohibition on a prescriptive 
standard for microwave oven standby power, especially since DOE was at 
that time proposing a prescriptive standard for standing pilots in gas 
cooking products. (ASAP, Public Meeting Transcript, No. 40.5 at pp. 64-
65)
    As noted previously, DOE eliminated the active mode cooking 
efficiency provisions in the July 2010 TP Final Rule after it 
determined that those provisions did not produce accurate and 
repeatable results. 75 FR 42579 (July 22, 2010). Therefore, the absence 
of active mode provisions results in a de facto separate energy use 
descriptor for microwave oven standby mode and off mode energy use.
2. Standby Power Levels
    DOE is considering standby mode and off mode standards based on a 
maximum average standby power, in W, for microwave ovens. For the 
reasons noted previously, the standards do not include off mode power. 
For the October 2008 NOPR, DOE's analysis estimated the incremental 
manufacturing cost for microwave ovens having standby power consumption 
less than the baseline level of 4 W. For the purposes of that analysis, 
a baseline microwave oven was considered to incorporate an absolute 
humidity cooking sensor. To analyze the cost-energy use relationship 
for microwave oven standby power, DOE defined standby power levels 
expressed as a maximum average standby power in W. To analyze the 
impacts of standards, DOE defined the following four standby power 
levels for analysis: (1) The Federal Energy Management Program (FEMP) 
procurement efficiency recommendation; (2) the International Energy 
Agency's (IEA's) 1-Watt Plan; (3) a standby power level as a gap-fill 
between the FEMP Procurement Efficiency Recommendation and IEA 1-Watt 
Plan; and (4) the current maximum microwave oven standby technology 
(max-tech; i.e., lowest standby power) that DOE believes is or could be 
commercially available when the energy conservation standards become 
effective, based on a review of microwave ovens currently on the market 
worldwide. Table IV.2 provides the microwave oven standby power levels 
and the reference source for each level that DOE analyzed for the 
October 2008 NOPR. For more details on the determination of standby 
power levels, see chapter 5 of the SNOPR TSD.

   Table IV.2--October 2008 NOPR Proposed Microwave Oven Standby Power
                                 Levels
------------------------------------------------------------------------
                                                                Standby
      Standby power level (TSL)               Source           power (W)
------------------------------------------------------------------------
Baseline............................  Baseline..............        4.0
1...................................  FEMP Procurement              2.0
                                       Efficiency
                                       Recommendation.
2...................................  Gap Fill..............        1.5
3...................................  IEA 1-Watt Program....        1.0
4...................................  Max Tech..............        0.02
------------------------------------------------------------------------


[[Page 8541]]

    In the October 2008 NOPR, DOE requested comments and views of 
interested parties concerning the selection of microwave oven standby 
power levels for the engineering analysis. 73 FR 62034, 62133 (Oct. 17, 
2008). As discussed in section V.A, due to the definition of only four 
standby power levels, a TSL was defined for each standby power level 
and thus standby power levels may also be referred to as TSLs.
    AHAM commented that the microwave oven standby power TSLs are 
appropriate. In particular, AHAM asserted that much of the worldwide 
industry is moving towards the IEA 1-Watt Program, which corresponds to 
one of the TSLs. However, AHAM stated that DOE's engineering analysis 
based on these TSLs is incomplete and inaccurate. For example, none of 
the 32 units tested by DOE were over-the-range units, whereas six of 
the 21 units in the AHAM sample were over-the-range units. According to 
AHAM, it is important to include over-the-range microwave ovens in the 
analysis because most of these units likely include a VFD, which is the 
most reliable display type in high temperature conditions. (AHAM, No. 
47 at p. 3; AHAM, Public Meeting Transcript, No. 40.5 at p. 83)
    As previously discussed, DOE research found that multiple over-the-
range microwave ovens are currently available on the market that 
incorporate low-power display technologies, including LEDs and LCDs. 
DOE has also found that manufacturer temperature ratings for the three 
types of displays are comparable, and that LED displays and LCDs in 
both countertop and over-the-range microwave ovens offer acceptable 
consumer utility features, including brightness, viewing angle, and 
ability to display complex characters. Due to these findings, DOE 
believes that the TSLs and the associated analyses are still valid.
    Additionally, AHAM stated that each microwave oven standby power 
TSL should be set in a way that allows manufacturers a variety of 
pathways to reduce standby power consumption to that level. While some 
manufacturers are already starting to incorporate some of the standby 
power consumption-reducing design options identified by DOE, little or 
no data is available on some of the design trade-offs and reliability. 
(AHAM, Public Meeting Transcript, No. 40.5 at pp. 78-79) DOE believes 
that multiple pathways exist, based on the selection of the (1) display 
technology, (2) power supply/control boards, (3) cooking sensors, and 
(4) the possible incorporation of algorithms to automatically reduce 
standby power after a period of inactivity, as stated in the October 
2008 NOPR.
    Whirlpool commented that it is unaware of technologies that would 
allow microwave ovens equipped with VFDs to meet the 1-W standby power 
consumption limit of TSL 3 while keeping the display energized during 
standby mode. (Whirlpool, No. 50 at p. 7) GE stated that it has 
significant concerns about retaining all features associated with VFDs 
that impact consumer utility while reducing microwave oven standby 
power consumption to TSL 3. As a result, GE believes TSL 3 would reduce 
the utility or performance of microwave ovens. (GE, Public Meeting 
Transcript, No. 40.5 at p. 89) DOE has determined that microwave oven 
manufacturers can meet TSL 3 in microwave ovens with VFDs by 
incorporating an automatic power-down feature. In addition, DOE 
research suggests that LED displays and LCDs in both countertop and 
over-the-range microwave ovens offer acceptable consumer utility 
features, including brightness, viewing angle, and ability to display 
complex characters. Additional issues related to consumer utility are 
addressed in section V.C, which discusses the TSLs considered for 
proposed standby mode and off mode standards.
    AHAM requested additional information about the functionality 
associated with the microwave oven max-tech level, including response 
time from power-down. (AHAM, Public Meeting Transcript, No. 40.5 at p. 
84) EEI also requested information about the max-tech level, such as 
whether it has as many display features and includes all the features 
of the baseline model. (EEI, Public Meeting Transcript, No. 40.5 at p. 
84)
    As discussed in the October 2008 NOPR, the max-tech microwave oven 
standby power level of 0.02 W corresponds to a unit equipped with a 
default automatic power-down function that shuts off certain power-
consuming components after a specified period of user inactivity. The 
standby power at max-tech was obtained from a microwave oven currently 
on the market in Korea which incorporates such a feature. 73 FR 62034, 
62045 (Oct. 17, 2008). Although DOE does not have operational 
information on this specific model, DOE has analyzed the components 
necessary to achieve an automatic power-down function, and does not 
believe such a feature would limit the selection of display 
technologies or other features that provide consumer utility. DOE 
analysis suggests that response times for startup will be short enough 
(less than 1 second) to be acceptable to consumers.
    For the reasons discussed above in section IV.A, DOE also analyzed 
a separate product class for over-the-range combination microwave 
ovens. DOE's analysis estimates the incremental manufacturing cost for 
built-in and over-the-range combination microwave ovens having standby 
power consumption less than the baseline value of 4.5 W. To determine 
that baseline level, DOE measured the standby power consumption of a 
representative sample of built-in and over-the-range combination 
microwave ovens currently on the market. For the purpose of this 
standby power analysis, a baseline built-in/over-the-range combination 
microwave oven is considered to incorporate an absolute humidity 
cooking sensor. In order to analyze the cost-energy use relationship 
for this product class, DOE defined each standby power level as a 
maximum average standby power in watts.
    To determine the maximum average standby power at each level, DOE 
reverse-engineered a representative sample of built-in and over-the-
range combination microwave ovens to analyze the various components 
that contribute to the standby power consumption of the unit. DOE also 
measured the standby power consumed by these components individually. 
In its analysis, DOE observed that the absolute humidity cooking sensor 
used in these combination microwave ovens on average consume 0.9 W of 
standby power. For Standby Power Level (SL) 1, DOE believes that 
standby power can be reduced by incorporating a zero-standby cooking 
sensor. For SL 2, DOE analyzed potential improvements to the power 
supply design. DOE noted that microwave ovens at the baseline standby 
energy use incorporate a linear power supply. DOE measured the standby 
power consumption of the power supply and found that the transformer 
used to step down the line input voltage contributes most significantly 
to the standby power consumption. DOE then performed a power budget 
analysis to determine the size of the transformer needed to operate a 
microwave at full load, and the results suggest that replacing the 
conventional linear power supply with a more efficient switch mode 
power supply will eliminate the need for a large transformer and 
effectively reduce the standby power associated with the power supply. 
DOE thus estimated the standby power for SL 2 based on the improvement 
associated with changing from a conventional linear power supply with 
an efficiency of 55 percent

[[Page 8542]]

to a switch mode power supply with an efficiency of 75 percent. DOE 
developed this estimate for the efficiency of a switch mode power 
supply based on research of such power supply designs for appliance 
applications.\18\ For SL 3, DOE analyzed the impact relays have in 
determining the size of a power supply. DOE compared the power budget 
of a control board with electromechanical relays to that with solid 
state relays, and observed that the power requirement of a control 
board, with similar input and load, is lower with solid state relays 
than with electromechanical relays. Therefore, DOE estimated the 
standby power at SL 3 based on design improvements associated with 
using more efficient components in a switch mode power supply that 
incorporates solid state relays. For SL 4, DOE analyzed an automatic 
function that turns off power to standby power consuming components 
after a certain period of inactivity and that uses a transformerless 
power supply to maintain the microcontroller chip while the microwave 
oven is not powered on. DOE estimated the standby power at SL 4 based 
on the standby power requirements of the controller microcontroller 
chip.
---------------------------------------------------------------------------

    \18\ Information on the design and efficiency of switch mode 
power supplies can be found at https://www.powerint.com/en/applications/major-appliances.
---------------------------------------------------------------------------

    Table IV.3 provides the proposed standby power levels for the two 
product classes considered for today's SNOPR. Details of the 
engineering analysis are in chapter 5 of the SNOPR TSD.

        Table IV.3--Proposed Microwave Oven Standby Power Levels
------------------------------------------------------------------------
                                                 Standby power (W)
                                         -------------------------------
           Standby power level            Microwave-only   Built-in and
                                          and countertop  over-the-range
                                            combination     combination
------------------------------------------------------------------------
Baseline................................            4.0             4.5
1.......................................            2.0             3.7
2.......................................            1.5             2.7
3.......................................            1.0             2.2
4.......................................            0.02            0.04
------------------------------------------------------------------------

3. Manufacturing Costs
    In this rulemaking DOE estimates a manufacturing cost for microwave 
ovens at each standby power level. The manufacturing costs are the 
basis of inputs for other analyses, including the LCC, national impact, 
and GRIM analyses.
    For microwave oven standby mode and off mode energy use, DOE 
estimated a cost-energy use relationship (or ``curve'') in the form of 
the incremental manufacturing costs associated with incremental 
reductions in baseline standby power. In the October 2008 NOPR, DOE 
determined that microwave oven standby power depends on, among other 
factors, the display technology used, the associated power supplies and 
controllers, and the presence or lack of a cooking sensor. From testing 
and reverse engineering, DOE observed correlations between (1) specific 
components and technologies, or combinations thereof, and (2) measured 
standby power. DOE obtained preliminary incremental manufacturing costs 
associated with standby power levels by considering combinations of 
those components as well as other technology options identified to 
reduce standby power. In the October 2008 NOPR, DOE presented 
manufacturing cost estimates based on quotes obtained from suppliers, 
interviews with manufacturers, interviews with subject matter experts, 
research and literature review, and numerical modeling. 73 FR 62034, 
62055 (Oct. 17, 2008). They are shown in Table IV.4.

   Table IV.4--October 2008 NOPR Proposed Microwave Oven Standby Power
                     Incremental Manufacturing Costs
------------------------------------------------------------------------
                                                             Incremental
             Standby power level                  Standby        cost
                                                 power (W)      2007$)
------------------------------------------------------------------------
Baseline.....................................          4.0            NA
1............................................          2.0          0.30
2............................................          1.5          0.67
3............................................          1.0          1.47
4............................................          0.02         5.13
------------------------------------------------------------------------

    Based on DOE's research, interviews with subject matter experts, 
and discussions with manufacturers, DOE believes that all consumer 
utility (display, cooking sensor, etc.) could be maintained by standby 
power consumption down to SL 3 (1.0 W). At the max-tech level, DOE 
would expect implementation of an automatic power-down feature that 
would, among other things, shut off the display after a period of 
inactivity, potentially impacting consumer utility.
    DOE observed several different cooking sensor technologies. Follow-
on testing after the December 2007 public meeting showed that some 
sensors are zero-standby (relative humidity) cooking sensors. During 
the MIA interview for the NOPR, one manufacturer indicated that its 
supplier of cooking sensors had developed zero-standby absolute 
humidity cooking sensors that would have the same manufacturing cost as 
the higher-standby power devices they would replace. Based on the 
number of available approaches to zero-standby cooking sensors from 
which manufacturers can choose, DOE believes that all manufacturers can 
and likely will implement zero-standby cooking sensors by the effective 
date of standby mode and off mode energy conservation standards, and 
maintain the consumer utility of a cooking sensor without affecting 
unit cost. DOE believes that a standard at standby power levels of 1 or 
2 W would not affect consumer utility, because all display types could 
continue to be used. At SL 3 for VFDs and SL 4 for all display 
technologies, DOE analysis suggests the need for a separate controller 
(automatic power-down) that automatically turns off all other power-
consuming components during standby mode. Such a feature would affect 
the consumer utility of having a clock display only if the consumer 
could not opt out of auto power-down.
    DOE requested input and data from interested parties on the 
estimated incremental manufacturing costs, as well as the assumed 
approaches, to achieve each microwave oven standby power level. DOE 
also requested comment on whether any intellectual property or patent 
infringement issues are associated with the design options

[[Page 8543]]

presented in the NOPR TSD to achieve each standby power level. 73 FR 
62034, 62133 (Oct. 17, 2008).
    AHAM questioned the source of the incremental cost data associated 
with each standby power level presented by DOE, since some microwave 
oven manufacturers cannot recall providing this information to DOE. 
AHAM commented on the need for incremental manufacturing costs to 
reflect both a one-time cost as well as the possibility of multiple 
paths to achieve each TSL. (AHAM, Public Meeting Transcript, No. 40.5 
at p. 87) GE commented that the cost associated with upgrading power 
supplies to reach TSL 3 is a question. (GE, Public Meeting Transcript, 
No. 40.5 at pp. 75-76)
    As described in chapter 5 of the TSD published with the October 
2008 NOPR, DOE developed incremental cost estimates for each standby 
power level using the design-option approach. (One-time costs are 
evaluated as part of the MIA.) DOE estimated costs for each of the 
components and technologies based on quotes from component suppliers, 
interviews with manufacturers, interviews with subject matter experts, 
research and literature review, and numerical modeling. The incremental 
manufacturing costs for each standby power level were determined by 
considering different combinations of these components as well as other 
technology options identified to reduce standby power.
    DOE is aware that manufacturers may employ a number of strategies 
to achieve the different standby power levels. The estimated 
manufacturing costs for each standby power level represent the approach 
DOE believes manufacturers would most likely use to achieve the standby 
power at each level. For each level, DOE assumed manufacturers would 
implement design options with the lowest associated manufacturing cost. 
If DOE determined there were multiple paths with similar costs to reach 
a certain level, it assumed manufacturers would be equally likely to 
choose either strategy.
    Whirlpool commented that its market research suggests high costs 
associated with consumer education on proper operation of microwave 
ovens with automatic power-down features. Whirlpool clarified that the 
marketing costs it submitted for the ANOPR did not include these costs, 
estimated at $10 million, including retailer training, point-of-
purchase material, product tags, telephone support, and possibly more. 
(Whirlpool, No. 50 at p. 7) AHAM also commented that DOE did not 
complete a rigorous analysis on manufacturing costs. According to AHAM, 
DOE obtained component costs, but did not account for the cost 
implications on appliance manufacturers. AHAM stated that this includes 
variables such as component reliability and/or utility, both of which 
will impact manufacturer cost. (AHAM, No. 47 at p. 6)
    DOE considered any conversion costs associated with changes to 
consumer utility and reliability in the manufacturer impact analysis, 
discussed in section IV.G. However, as previously discussed, DOE found 
no reliability or consumer utility concerns with switching from VFD to 
LCD or LED displays. Through discussions with manufacturers and OEMs, 
DOE believes that zero-standby cooking sensors could be implemented 
with no effect on consumer utility or reliability. DOE is aware that an 
automatic power-down feature required at SL 3 for VFDs and at SL 4 for 
all display types could affect consumer utility, and considered these 
impacts in the selection of the proposed standards.
    For the reasons described above, DOE believes the standby power 
levels and corresponding incremental manufacturing costs presented in 
the October 2008 NOPR remain fundamentally valid for the microwave-only 
and countertop combination microwave oven product class. DOE is unaware 
of any technologies that have become available since the publishing of 
the October 2008 NOPR that would alter the incremental cost for any 
standby power level. However, the costs presented in the October 2008 
NOPR are in 2008 dollars. DOE scaled these costs to 2010 dollars using 
the producer price index (PPI) to reflect more current values.\19\ The 
relevant PPI for microwave ovens is a subset of the household cooking 
appliance manufacturing industry, specifically for electric (including 
microwave) household ranges, ovens, surface cooking units, and 
equipment. Table IV.5 shows the revised incremental costs for each 
standby power level for Product Class 1, scaled to 2010 dollars.
---------------------------------------------------------------------------

    \19\ Information on the PPI databases can be found at https://www.bls.gov/ppi/data.htm. (Last accessed March 18, 2011.)

  Table IV.5--Microwave Oven Product Class 1 Standby Power Incremental
                           Manufacturing Costs
------------------------------------------------------------------------
                                                 Standby     Incremental
             Standby power level                power (W)   cost (2010$)
------------------------------------------------------------------------
Baseline....................................          4.0             NA
1...........................................          2.0          $0.27
2...........................................          1.5           0.60
3...........................................          1.0           1.31
4...........................................          0.02          4.58
------------------------------------------------------------------------

    As discussed in section IV.A, for today's SNOPR, DOE is proposing 
two product classes for microwave ovens. While the analysis presented 
in the October 2008 NOPR remains relevant for the microwave-only and 
countertop combination microwave oven product class, DOE conducted 
analyses on a test sample of 13 combination microwave ovens for this 
SNOPR to evaluate the built-in and over-the-range combination microwave 
oven product class. DOE again used the design-option approach to 
determine the incremental manufacturing costs of combination microwave 
ovens for each standby power level.
    DOE estimated the incremental cost associated with reductions in 
baseline standby power of built-in and over-the-range combination 
microwave ovens. DOE performed engineering teardowns and control board 
cost analyses to determine the cost of the baseline control board used 
in these units. DOE estimated the cost associated with each standby 
power level by using quotes from various component suppliers to 
determine the cost of the components used in each design option.
    For SL 1, DOE estimated that the manufacturing cost of a zero-
standby cooking sensor would be the same as that of the cooking sensor 
with high standby power. To estimate the manufacturing cost for SL 2, 
DOE used reverse engineering to determine the cost of the components 
used in a design of a switch mode power supply capable of delivering 
the same output power as the baseline conventional linear power supply. 
In its analysis for the manufacturing cost of SL 3, DOE determined the 
cost of the components used to design a control board with a switch 
mode power supply and solid state relays capable of driving the same 
loads as the electromechanical relays. DOE estimated the manufacturing 
cost for SL 4 based on the cost of the components needed to design an 
automatic power-down function that uses a transformerless power supply.
    The results of these new analyses are summarized in Table IV.6. For 
the detailed cost-energy use analysis, including descriptions of design 
options and design changes to meet standby

[[Page 8544]]

power levels, see chapter 5 of the SNOPR TSD.

  Table IV.6--Microwave Oven Product Class 2 Standby Power Incremental
                           Manufacturing Costs
------------------------------------------------------------------------
                                                 Standby     Incremental
             Standby power level                power (W)   cost (2010$)
------------------------------------------------------------------------
Baseline....................................          4.5             NA
1...........................................          3.7             $0
2...........................................          2.7           2.29
3...........................................          2.2           9.44
4...........................................          0.04          5.18
------------------------------------------------------------------------

D. Life-Cycle Cost and Payback Period Analysis

    In response to the requirements of section 325(o)(2)(B)(i) of the 
Act, DOE conducted LCC and PBP analyses to evaluate the economic 
impacts of possible amended energy conservation standards for consumers 
of microwave ovens having standby mode and off mode features. (42 
U.S.C. 6295(o)(2)(B)(i)) DOE conducted the analyses using a spreadsheet 
model developed in Microsoft (MS) Excel for Windows 2007. (See chapter 
8 of the SNOPR TSD.)
    The LCC represents the total consumer expense over the life of a 
product, including purchase and installation expense and operating 
costs (energy expenditures, repair costs, and maintenance costs). The 
PBP is the number of years it would take for the consumer to recover 
the increased costs of a higher-efficiency product through energy 
savings. To calculate the LCC, DOE discounts future operating costs to 
the time of purchase and sums them over the lifetime of the product. 
DOE forecasts the change in LCC and the change in PBP associated with a 
given efficiency level relative to the base-case product efficiency. 
The base-case forecast reflects the market in the absence of amended 
mandatory energy conservation standards. As part of the LCC and PBP 
analyses, DOE develops data that it uses to establish product prices, 
annual energy consumption, energy prices, maintenance and repair costs, 
product lifetime, and discount rates.
    DOE developed a consumer sample for microwave ovens having standby 
mode and off mode features from EIA's 2005 Residential Energy 
Consumption Survey (RECS). It used this sample to establish the 
variability and uncertainty in microwave oven electricity use. The 
variability in electricity pricing was characterized by incorporating 
regional energy prices. DOE calculated the LCC associated with a 
baseline microwave oven having standby mode and off mode features. To 
calculate the LCC savings and PBP associated with products that could 
meet potential amended energy conservation standards, DOE substituted 
the baseline unit with more efficient designs.
    Table IV.7 summarizes the approaches and data DOE used to derive 
the inputs to the LCC and PBP calculations for the October 2008 NOPR, 
and the changes it made for today's SNOPR. DOE did not introduce 
changes to the LCC and PBP analysis methodology described in the 
October 2008 NOPR. As the following sections discuss in more detail, 
however, DOE revised some of the inputs to the analysis. Chapter 8 of 
the SNOPR TSD contains a detailed discussion of the methodology 
utilized for the LCC and PBP analysis as well as the inputs developed 
for the analysis.

    Table IV.7--Summary of Inputs and Key Assumptions in LCC and PBP
                                Analyses
------------------------------------------------------------------------
                                                       Changes for the
           Inputs               October 2008 NOPR           SNOPR
------------------------------------------------------------------------
                        Affecting Installed Costs
------------------------------------------------------------------------
Product Cost................  Derived by            Used experience
                               multiplying           curve fits to
                               manufacturer cost     forecast a price
                               by manufacturer,      scaling index to
                               distributor markups   forecast product
                               and sales tax.        costs.
------------------------------------------------------------------------
                        Affecting Operating Costs
------------------------------------------------------------------------
Annual Energy Use...........  Annual energy use     No change.
                               determined from the
                               annual usage
                               (average daily use
                               cycles).
Energy Prices...............  Electricity: Updated  Electricity: Updated
                               using EIA's 2006      using EIA's 2009
                               Form 861 data.        Form 861 data.
                               Variability:          Variability: No
                               Regional energy       change.
                               prices determined
                               for 13 regions.
Energy Price Trends.........  Energy: Forecasts     Reference Case, High
                               updated with EIA's    Growth, and Low
                               Annual Energy         Growth forecasts
                               Outlook 2008 (AEO     updated with EIA's
                               2008).                AEO 2010 May
                                                     Release.
Repair and Maintenance Costs  Assumed no repair or  No change.
                               maintenance costs.
------------------------------------------------------------------------
        Affecting Present Value of Annual Operating Cost Savings
------------------------------------------------------------------------
Product Lifetime............  Estimated using       No change.
                               survey results from
                               RECS (1990, 1993,
                               1997, 2001, 2005)
                               and the U.S. Census
                               American Housing
                               Survey (2005,
                               2007), along with
                               historic data on
                               appliance shipments.
Discount Rates..............  Variability:          No change.
                               Characterized using
                               Weibull probability
                               distributions.
------------------------------------------------------------------------
                 Affecting Installed and Operating Costs
------------------------------------------------------------------------
Effective Date of New         2012................  2014.
 Standard.
------------------------------------------------------------------------


[[Page 8545]]

1. Product Costs
    To calculate the product costs paid by microwave oven purchasers, 
DOE multiplied the manufacturing selling prices developed from the 
engineering analysis by the supply chain markups it developed (along 
with sales taxes). DOE used the same supply chain markups for today's 
SNOPR that were developed for the October 2008 NOPR. See chapter 6 of 
the SNOPR TSD for additional information. For the October 2008 NOPR, 
DOE analyzed only countertop models of microwave ovens and considered 
installation costs to be zero. For today's SNOPR, DOE analyzed both 
countertop and over-the-range microwave ovens and considered 
installation costs to be zero.
    On February 22, 2011, DOE published a Notice of Data Availability 
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory 
analysis by addressing equipment price trends. Consistent with the 
NODA, DOE examined historical producer price indices (PPI) for electric 
cooking equipment generally and microwave ovens specifically and found 
a consistent, long-term declining real price trend. Consistent with the 
method proposed in the NODA, DOE used experience curve fits to develop 
a price scaling index to forecast product costs for this rulemaking.
    DOE also considered the public comments that were received in 
response to the NODA and refined its experience curve trend forecasting 
estimates. Many commenters were supportive of DOE moving from an 
assumption-based equipment price trend forecasting method to a data-
driven methodology for forecasting price trends. Other commenters were 
skeptical that DOE could accurately forecast price trends given the 
many variables and factors that can complicate both the estimation and 
the interpretation of the numerical price trend results and the 
relationship between price and cost. DOE evaluated these concerns and 
determined that retaining the assumption-based approach of a constant 
real price trend was not consistent with the historical data for the 
products covered in this rule (though this scenario does represent a 
reasonable upper bound on the future equipment price trend). DOE also 
performed an initial evaluation of the possibility of other factors 
complicating the estimation of the long-term price trend, and developed 
a range of potential price trend values that was consistent with the 
available data and justified by the amount of data that was available 
to DOE at this time. DOE recognizes that its price trend forecasting 
methods are likely to be modified as more data and information becomes 
available to enhance the statistical certainty of the trend estimate 
and the completeness of the model. Additional data should enable an 
improved evaluation of the potential impacts of more of the factors 
that can influence equipment price trends over time.
    To evaluate the impact of the uncertainty of the price trend 
estimates, DOE performed price trend sensitivity calculations in the 
national impact analysis to examine the dependence of the analysis 
results on different analytical assumptions. DOE also included a 
constant real price trend assumption as a sensitivity scenario 
representing an upper bound on the forecast price trend.
    A more detailed discussion of DOE's price trend modeling and 
calculations is provided in appendix 8-E of the SNOPR TSD.
2. Annual Energy Consumption
    DOE determined the annual energy consumption of the standby mode 
and off mode of microwave ovens by estimating the number of hours of 
operation throughout the year and assuming that the unit would be in 
standby mode or off mode the rest of the time. DOE estimated the number 
of operating hours relative to the baseline of 71 hours calculated in 
the NOPR. DOE subtracted the number of calculated operating hours from 
the total number of hours in a year and multiplied by the standby mode 
and off mode power usage to determine yearly standby mode and off mode 
energy consumption.
3. Energy Prices
    DOE derived average electricity prices for 13 geographic areas 
consisting of the nine U.S. Census divisions, with four large States 
(New York, Florida, Texas, and California) treated separately. DOE 
estimated residential electricity prices for each of the 13 geographic 
areas based on data from EIA Form 861, ``Annual Electric Power Industry 
Report.'' DOE calculated an average residential electricity price by 
first estimating an average residential price for each utility, and 
then calculating a regional average price by weighting each utility 
having customers in a region by the number of residential customers 
served in that region. The calculations for today's SNOPR used the most 
recent available data (2009).
    To estimate trends in electricity prices for the October 2008 NOPR, 
DOE used the price forecasts in EIA's AEO 2008. To arrive at prices in 
future years, DOE multiplied the average prices described above by the 
forecast of annual average price changes in AEO 2008. For today's 
supplemental notice, DOE updated its energy price forecasts using those 
in the AEO 2010 May Release. Because the AEO forecasts prices only to 
2035, DOE followed past guidelines that EIA provided to the Federal 
Energy Management Program and used the average rate of change during 
2020-2035 to estimate price trends beyond 2035.
    The spreadsheet tools used to conduct the LCC and PBP analysis 
allow users to select energy price forecasts for either the AEO's High 
economic growth case or Low economic growth case to estimate the 
sensitivity of the LCC and PBP to different energy price forecasts.
    DOE received comment regarding the inputs to the energy price 
forecasts. The Joint Comment recommended that DOE conduct a sensitivity 
analysis using a basket of other forecasts besides the AEO. (Joint 
Comment, No. 44 at p. 11) As mentioned above, DOE considered price 
forecasts from the AEO's High and Low economic growth cases to estimate 
the sensitivity of the LCC and PBP results to different energy price 
forecasts. The alternative forecasts from the AEO provide a suitable 
range to examine the sensitivity of LCC and PBP results to different 
energy price forecasts.
    The Joint Comment also stated that to realistically depict energy 
prices in the future, DOE must consider the impact of carbon control 
legislation, because such legislation is likely. It also noted that 
there are regional cap-and-trade programs in effect in the Northeast 
(Regional Greenhouse Gas Initiative [RGGI]) and the West (Western 
Climate Initiative [WCI]) that will affect the price of electricity, 
which was not yet reflected in the AEO energy price forecasts. (Joint 
Comment, No. 44 at p. 12) EJ stated that caps likely will be in place 
by the time new standards become effective, so DOE should increase its 
electricity prices to reflect the cost of complying with emission caps. 
(EJ, Public Meeting Transcript, No. 40.5 at pp. 105-106)
    In response, DOE believes that the shape of Federal carbon control 
legislation, and the ensuing cost to electricity generators of carbon 
mitigation, is too uncertain to incorporate into the energy price 
forecasts that DOE uses. The costs to electricity generators of carbon 
mitigation resulting from the regional programs are also uncertain over 
the forecast period for this rulemaking. That being said, EIA included 
the effect of

[[Page 8546]]

the RGGI in its energy price forecasts for the AEO 2010 May Release. 
(WCI did not provide sufficient detail to EIA in order for them to 
model WCI's impact on energy price forecasts.) Therefore, the energy 
price forecasts used in today's supplemental notice include the impact 
of one of the two regional cap-and-trade programs in the United States.
4. Repair and Maintenance Costs
    Repair costs are those associated with repairing or replacing 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. For the 
October 2008 NOPR, DOE did not include repair or maintenance costs in 
its analyses. DOE maintained the same approach for this SNOPR.
5. Product Lifetime
    For the October 2008 NOPR and today's SNOPR, DOE used a variety of 
sources to establish low, average, and high estimates for product 
lifetime. The average microwave oven lifetime used was 9.3 years. DOE 
used a Weibull probability distribution to characterize microwave oven 
lifetime.
6. Discount Rates
    In the calculation of LCC, DOE applies discount rates to estimate 
the present value of future operating costs. DOE estimated a 
distribution of residential discount rates for microwave ovens. See 
chapter 8 in the SNOPR TSD for further details on the development of 
consumer discount rates.
    To establish residential discount rates for the LCC analysis in the 
October 2008 NOPR and today's SNOPR, DOE identified all debt or asset 
classes that consumers might use to purchase household appliances, 
including household assets that might be affected indirectly. It 
estimated average percentage shares of the various debt or asset 
classes for the average U.S. household using data from the Federal 
Reserve Board's ``Survey of Consumer Finances'' (SCF) for 1989, 1992, 
1995, 1998, 2001, 2004, and 2007. Using the SCF and other sources, DOE 
then developed a distribution of rates for each type of debt and asset 
to represent the rates that may apply in the year in which new 
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, weighted by the 
shares of each class, is 5.1 percent. DOE used the same approach for 
today's supplemental notice.
7. Effective Date of New Standards
    The effective date is the future date when parties subject to the 
requirements of a new energy conservation standard must begin 
compliance. For the NOPR, DOE assumed that any new standards adopted in 
this rulemaking would become effective in March 2012, 3 years after the 
month when it expected the final rule would be published in the Federal 
Register. For today's SNOPR, DOE expects that the final rule will be 
published in 2011, with new standards requiring compliance three years 
later. Thus, DOE calculated the LCC for appliance consumers as if they 
would purchase new products in 2014.
8. Product Energy Efficiency in the Base Case
    For the LCC and PBP analysis, DOE analyzes higher efficiency levels 
relative to a base case (i.e., the case without new energy conservation 
standards). However, some consumers may already purchase products 
having efficiencies greater than the baseline product levels. Thus, to 
accurately estimate the percentage of consumers that would be affected 
by a particular standard level, DOE estimates the distribution of 
product efficiencies that consumers are expected to purchase under the 
base case. DOE refers to this distribution of product energy 
efficiencies as a base-case efficiency distribution. For the October 
2008 NOPR and today's SNOPR, DOE used the current shares of available 
models at specific standby power levels to establish the base-case 
efficiency distributions. Table IV.8 presents the market shares of the 
standby power levels in the base case for standby mode and off mode 
energy use of microwave ovens.

                              Table IV.8--Microwave Ovens: Base-Case Market Shares
----------------------------------------------------------------------------------------------------------------
                                                                   Product Class 1           Product Class 2
                                                             ---------------------------------------------------
                            Level                               Standby     2005 Share    Standby     2005 Share
                                                               power (W)       (%)       power (W)       (%)
----------------------------------------------------------------------------------------------------------------
Baseline....................................................         4.00         46.2         4.50        100.0
TSL1 \*\....................................................         2.00         34.6         3.70          0.0
TSL 2.......................................................         1.50         19.2         2.70          0.0
TSL 3.......................................................         1.00          0.0         2.20          0.0
TSL 4.......................................................         0.02          0.0         0.04          0.0
----------------------------------------------------------------------------------------------------------------
* TSL = Trial Standard Level.

9. Inputs to Payback Period Analysis
    The PBP is the amount of time (expressed in years) it takes the 
consumer to recover the additional installed cost of a more efficient 
product through operating cost savings, compared to the baseline 
product. The simple payback period does not account for changes in 
operating expenses over time or the time value of money. The inputs to 
the PBP calculation are the total installed cost of the product to the 
consumer for each efficiency level and the annual (first-year) 
operating expenditures for each efficiency level. For the October 2008 
NOPR and today's SNOPR, the PBP calculation uses the same inputs as the 
LCC analysis, except that energy price trends and discount rates are 
not needed.
10. Rebuttable-Presumption Payback Period
    As noted above, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii)) 
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 test procedure in 
place for that standard. For each TSL, DOE determined the value of the 
first year's energy savings by calculating the quantity of those 
savings in accordance with DOE's test procedure, and multiplying that 
amount by the average energy price forecast for the year in which a new 
standard first would be effective--in this case, 2014.

[[Page 8547]]

    DOE received comments addressing the topic of using a rebuttable-
presumption payback period to establish the economic justification of 
an energy conservation standard. The Joint Comment and EJ stated that 
DOE's view that it is necessary to consider a full range of impacts 
because the rebuttable presumption criterion is insufficient for 
determining economic justification does not reflect the extent to which 
the rebuttable-presumption analysis constrains DOE's authority to 
reject standards based on economic impacts. (Joint Comment, No. 44 at 
appendix B, p. 1; EJ, Public Meeting Transcript, No. 40.5 at p. 130) 
The Joint Comment stated that in 42 U.S.C. 6295(o)(2)(B)(iii), Congress 
erected a significant barrier to DOE's rejection, on the basis of 
economic justifiability, of standard levels to which the rebuttable 
presumption applies. Further, EJ and the Joint Comment stated DOE's 
preference to proceed under the seven-factor test contained in 42 
U.S.C. 6295(o)(2)(B)(i) is not pertinent. The Joint Comment agreed with 
DOE that analysis under the seven-factor test is necessary and 
typically has supported standards having paybacks longer than 3 years. 
However, the Joint Comment stated that DOE's decision making must 
reflect the expressed intent of Congress that the highest standard 
level resulting in cost recovery within 3 years constitutes the 
presumptive lowest standard level that DOE must adopt. (Joint Comment, 
No. 44 at appendix B, pp. 1-2)
    In response, when examining potential standard levels DOE considers 
both the rebuttable-presumption payback criteria, as well as a full 
analysis that includes all seven relevant statutory criteria under 42 
U.S.C. 6295(o)(2)(B)(i). DOE believes, however, that the commenters are 
misinterpreting the statutory provision in question. The Joint Comment 
and EJ state that DOE need not look beyond the results of the 
rebuttable-presumption analysis, but DOE believes that the statute 
contains no such restriction, and following this approach would 
potentially force the agency to ignore other relevant information that 
would bear on the selection of the most stringent standard level that 
meets all applicable statutory criteria. Similarly, DOE believes that 
the Joint Comment misreads the statute in calling for a level that 
meets the rebuttable-presumption test to serve as a minimum level when 
setting the final energy conservation standard. To do so would not only 
eliminate the ``rebuttable'' aspect of the presumption but also would 
lock in place a level that may not be economically justified based on a 
full review of statutory criteria. EPCA already obligates DOE to select 
the most stringent standard level that meets the applicable statutory 
criteria.

E. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

1. General
    DOE's NIA assesses the national energy savings, as well as the 
national NPV, of total consumer costs and savings expected to result 
from new or amended standards at specific efficiency levels. DOE 
applied the NIA spreadsheet to calculate energy savings and NPV, using 
the annual energy consumption and total installed cost data from the 
LCC analysis. DOE forecasted the energy savings, energy cost savings, 
product costs, and NPV for the two product classes from 2014 to 2043. 
The forecasts provide annual and cumulative values for all four 
parameters. In addition, DOE incorporated into its NIA spreadsheet the 
capability to analyze sensitivity of the results to forecasted energy 
prices and product efficiency trends. Table IV.9 summarizes the 
approach and data DOE used to derive the inputs to the NES and NPV 
analyses for the October 2008 NOPR and the changes made in the analyses 
for today's SNOPR. A discussion of the 2008 inputs and the changes 
follows. (See chapter 10 of the SNOPR TSD for further details.)

   Table IV.9--Approach and Data Used To Derive Inputs to the National
                     Energy Savings and NPV Analyses
------------------------------------------------------------------------
                                    2008 NOPR          Changes for the
           Inputs                  Description              SNOPR
------------------------------------------------------------------------
Shipments...................  Annual shipments      See Table IV.10.
                               from shipments
                               model.
Compliance Date of Standard.  2012................  2014.
Base-Case Forecasted          Shipment-weighted     No change.
 Efficiencies.                 efficiency (SWEF)
                               determined in 2005.
                               SWEF held constant
                               over forecast
                               period.
Standards-Case Forecasted     Analyzed as one       Analyzed as two
 Efficiencies.                 product class. Roll-  product classes.
                               up scenario used      Roll-up scenario
                               for determining       used for
                               SWEF in the year      determining SWEF in
                               that standards        the year that
                               become effective      standards become
                               for each standards    effective for each
                               case. SWEF held       standards case.
                               constant over         SWEF held constant
                               forecast period.      over forecast
                                                     period
Annual Energy Consumption     Annual weighted-      No change.
 per Unit.                     average values as a
                               function of SWEF.
Total Installed Cost per      Annual weighted-      Incorporated
 Unit.                         average values as a   learning rate to
                               function of SWEF.     forecast product
                                                     prices.
Energy Cost per Unit........  Annual weighted-      No change.
                               average values as a
                               function of the
                               annual energy
                               consumption per
                               unit and energy
                               (and water) prices.
Repair Cost and Maintenance   Incorporated changes  No change.
 Cost per Unit.                in repair costs as
                               a function of
                               standby power.
Escalation of Energy Prices.  AEO 2008 forecasts    Updated to AEO 2010
                               (to 2030);            May release
                               extrapolated to       forecasts (to
                               2042.                 2035); extrapolated
                                                     to 2043.
Energy Site-to-Source         Conversion varies     No change.
 Conversion.                   yearly and is
                               generated by DOE/
                               EIA's NEMS program
                               (a time-series
                               conversion factor;
                               includes electric
                               generation,
                               transmission, and
                               distribution
                               losses).
Discount Rate...............  3 and 7 percent real  No change.
Present Year................  Future expenses       Future expenses
                               discounted to 2007.   discounted to 2011.
------------------------------------------------------------------------


[[Page 8548]]

2. Shipments
    The shipments portion of the NIA spreadsheet is a model that uses 
historical data as a basis for projecting future shipments of the 
products that are the subject of this rulemaking. In projecting 
microwave oven shipments, DOE accounted for two market segments: (1) 
New construction; and (2) replacement of failed products. Because 
shipments for new construction and replacements were not enough to 
account for all product shipments, DOE developed another market segment 
to calibrate its shipments model. In addition to normal replacements, 
DOE's shipments model also assumed that a small fraction of the stock 
would be replaced early. It also considered retired units not replaced. 
DOE used the non-replacement market segment to calibrate the shipments 
model to historical shipments data.
    To estimate the impacts of prospective standards on product 
shipments (i.e., to forecast standards-case shipments), DOE considered 
the combined effects of changes in purchase price, annual operating 
cost, and household income on the magnitude of shipments.
    Table IV.10 summarizes the approach and data DOE used to derive the 
inputs to the shipments analysis for the October 2008 NOPR, and the 
changes it made for today's SNOPR. The general approach for forecasting 
microwave shipments for today's SNOPR remains unchanged from the NOPR.

  Table IV.10--Approach and Data Used To Derive Inputs to the Shipments
                                Analysis
------------------------------------------------------------------------
                                    2008 NOPR          Changes for the
           Inputs                  description              SNOPR
------------------------------------------------------------------------
Number of Product Classes...  One product class.    Two product classes:
                               Market share data     (1) All microwave
                               provided by AHAM.     oven-only and
                                                     countertop
                                                     microwave oven-
                                                     combination; (2)
                                                     over-the-range
                                                     microwave oven-
                                                     combination. Market
                                                     share data provided
                                                     by AHAM; 99%
                                                     product class
                                                     1 and 1%
                                                     product class
                                                     2. Product
                                                     class market shares
                                                     held constant over
                                                     forecast period.
New Construction Shipments..  Housing forecasts     No change in
                               updated with EIA      approach. Housing
                               AEO 2009 April        forecasts updated
                               release forecasts     with EIA AEO 2010
                               for the Reference     forecasts for the
                               case, High growth     Reference case,
                               case, and Low         High growth case,
                               growth case.          and Low growth
                                                     case.
Replacements................  Determined by         No change.
                               tracking total
                               product stock by
                               vintage and
                               establishing the
                               failure of the
                               stock using
                               retirement
                               functions from the
                               LCC and PBP
                               analysis.
                               Retirement
                               functions revised
                               to be based on
                               Weibull lifetime
                               distributions.
Retired Units not Replaced    Used to calibrate     No change.
 (i.e., non-replacements).     shipments model to
                               historical
                               shipments data.
Historical Shipments........  Data sources include  No change.
                               AHAM data submittal
                               and Appliance
                               magazine.
Purchase Price, Operating     Developed ``relative  No change.
 Cost, and Household Income    price'' elasticity,
 Impacts due to Efficiency     which accounts for
 Standards.                    the purchase price
                               and the present
                               value of operating
                               cost savings
                               divided by
                               household income.
                               Used purchase price
                               and efficiency data
                               specific to
                               residential
                               refrigerators,
                               clothes washers,
                               and dishwashers
                               between 1980 and
                               2002 to determine a
                               ``relative price''
                               elasticity of
                               demand of -0.34.
Fuel Switching..............  Not applicable......  No change.
------------------------------------------------------------------------

a. New Construction Shipments
    To estimate shipments for new construction, DOE used forecasts of 
housing starts coupled with microwave oven saturation data. In other 
words, to forecast the shipments for new construction in any given 
year, DOE multiplied the housing forecast by the forecasted saturation 
of microwave ovens for new housing.
    New housing comprises single- and multi-family units (also referred 
to as ``new housing completions'') and mobile home placements. DOE 
forecasted new housing based on EIA's AEO 2010 for 2005-2035. AEO 2010 
provides three sets of forecasts: the Reference case, the High economic 
growth case, and the Low economic growth case. DOE used the forecasts 
from the Reference case for the NIA results reported in this notice. 
For the Reference case, the forecast shows a decline in housing 
completions from 2.2 million in 2005 to 1.7 million by 2030. For 2035-
2043, DOE froze completions at the level in 2035.
b. Replacements and Non-Replacements
    To determine shipments for the replacement market, DOE used an 
accounting method that tracks the total stock of units by vintage. DOE 
estimated a stock of microwave ovens by vintage by integrating 
historical shipments starting from 1972. Over time, some units are 
retired and removed from the stock, triggering the shipment of a 
replacement unit. Depending on the vintage, a certain percentage of 
each type of unit will fail and need to be replaced. To determine when 
a microwave oven fails, DOE used data from RECS and AHS to estimate a 
product survival function. This function was modeled as a Weibull 
distribution. Based on this method, the average calculated microwave 
oven lifetime is 9.3 years. For a more complete discussion of microwave 
lifetimes, refer to section 8.2.3 of chapter 8 of the SNOPR TSD.
3. Purchase Price, Operating Cost, and Income Impacts
    To estimate the combined effects of increases in product purchase 
price and decreases in product operating costs on microwave oven 
shipments, for the October 2008 NOPR DOE used a

[[Page 8549]]

literature review and a statistical analysis on a limited set of 
appliance price, efficiency, and shipments data. DOE used purchase 
price and efficiency data specific to microwave ovens between 1980 and 
2002 to conduct regression analyses. DOE's analysis suggested that the 
relative short-run price elasticity of demand is -0.34.
    Because DOE's forecast of shipments and national impacts 
attributable to standards spans more than 30 years, DOE also considered 
how the relative price elasticity is affected once a new standard takes 
effect. After the purchase price changes, price elasticity becomes more 
inelastic over the years until it reaches a terminal value. For the 
October 2008 NOPR and today's SNOPR, DOE incorporated a relative price 
elasticity change that resulted in a terminal value of approximately 
one-third of the short-run elasticity. In other words, DOE determined 
that consumer purchase decisions, in time, become less sensitive to the 
initial change in the product's relative price.
4. Other Inputs
a. Forecasted Efficiencies
    A key input to the calculations of NES and NPV are the energy 
efficiencies that DOE forecasts for the base case (without new 
standards). The forecasted efficiencies represent the annual shipment-
weighted energy efficiency (SWEF) of the product under consideration 
during the forecast period (i.e., from the estimated effective date of 
a new standard to 30 years after that date). Because DOE had no data to 
reasonably estimate how microwave oven standby power levels might 
change during the next 30 years, it assumed that forecasted 
efficiencies will stay at the 2014 standby power levels until the end 
of the forecast period.
    For its determination of the cases under alternative standard 
levels (``standards cases''), DOE used a ``roll-up'' scenario in the 
October 2008 NOPR to establish the SWEF for 2012. For today's SNOPR, 
DOE established the SWEF for 2014 and assumed that product efficiencies 
in the base case that do not meet the standard level under 
consideration would roll-up to meet the new standard level. DOE assumed 
that all product efficiencies in the base case that were above the 
standard level under consideration would not be affected by the 
standard.
    DOE made the same assumption regarding forecasted standards-case 
efficiencies as for the base case; namely, that efficiencies will 
remain at the 2014 standby power level until the end of the forecast 
period. By maintaining the same rate of increase for forecasted 
efficiencies in the standards case as in the base case (i.e., no 
change), DOE retained a constant efficiency difference between the two 
cases throughout the forecast period. Although the no-change trends may 
not reflect what would happen to base-case and standards-case product 
efficiencies in the future, DOE believes that maintaining a constant 
efficiency difference between the base case and each standards case 
provides a reasonable estimate of the impact that standards would have 
on product efficiency. It is more important to accurately estimate the 
efficiency difference between the standards case and base case than to 
accurately estimate the actual product efficiencies in the standards 
and base cases. DOE retained the approach used in the October 2008 NOPR 
for today's SNOPR. Because the effective date of the standard is now 
assumed to be 2014, DOE applied the ``roll-up'' scenario in the year 
2014 to establish the SWEF for each standards case.
b. Annual Energy Consumption
    The annual energy consumption per unit depends directly on product 
efficiency. For the October 2008 NOPR and today's SNOPR, DOE used the 
SWEFs associated with the base case and each standards case, in 
combination with the annual energy use data, to estimate the shipment-
weighted average annual per-unit energy consumption under the base case 
and standards cases. The national energy consumption is the product of 
the annual energy consumption per unit and the number of units of each 
vintage, which depends on shipments.
    As noted above, DOE used a relative price elasticity to estimate 
standards-case shipments for microwave ovens. To avoid the inclusion of 
energy savings from any reduction in shipments attributable to a 
standard, DOE used the standards-case shipments projection and the 
standards-case stock to calculate the annual energy consumption in the 
base case. For microwave ovens, DOE assumed that any drop in shipments 
caused by standards would result in the purchase of used machines. DOE 
retained the use of the base-case shipments to determine the annual 
energy consumption in the base case for today's SNOPR.
c. Site-to-Source Energy Conversion
    To estimate the national energy savings expected from appliance 
standards, DOE uses a multiplicative factor to convert site energy 
consumption (energy use at the location where the appliance is 
operated) into primary or source energy consumption (the energy 
required to deliver the site energy). For the October 2008 NOPR, DOE 
used annual site-to-source conversion factors based on the version of 
NEMS that corresponds to AEO 2008. For today's SNOPR, DOE used AEO 
2010. For electricity, the conversion factors vary over time because of 
projected changes in generation sources (i.e., the types of power 
plants projected to provide electricity to the country). Because the 
AEO does not provide energy forecasts beyond 2035, DOE used conversion 
factors that remain constant at the 2035 values throughout the rest of 
the forecast.
d. Total Installed Costs and Operating Costs
    The increase in total annual installed cost is equal to the 
difference in the per-unit total installed cost between the base case 
and standards case, multiplied by the shipments forecasted in the 
standards case.
    In the NOPR analysis, DOE assumed that the manufacturer costs and 
retail prices of products meeting various efficiency levels remain 
fixed, in real terms, throughout the period of the analysis. As 
discussed in section IV.F.1, examination of historical price data for 
certain appliances that have been subject to energy conservation 
standards indicates that the assumption of constant real prices and 
costs may, in many cases, over-estimate long-term appliance price 
trends.
    For the SNOPR, DOE applied a learning rate of 28.9 percent to 
forecast the prices of microwave ovens sold in each year in the 
forecast period (2014-2043). The learning rate expresses the change in 
price associated with a doubling in cumulative production. The price in 
each year is a function of the learning rate and the cumulative 
production of microwave ovens forecast in each year. DOE applied the 
same values to forecast prices for each product class at each 
considered efficiency level. Learning curve analysis characterizes the 
reduction in production cost mainly associated with labor-based 
performance improvement and higher investment in new capital equipment 
at the microeconomic level. Experience curve analysis tends to focus 
more on entire industries and aggregates over various casual factors at 
the macroeconomic level: ``Experience curve'' and ``progress function'' 
typically represent generalizations of the learning concept to 
encompass behavior of all inputs to production and cost (i.e., labor, 
capital, and materials).'' The economic literature often uses these two 
terms interchangeably. The term

[[Page 8550]]

``learning'' is used here to broadly cover these general macroeconomic 
concepts. The ``experience'' curve developed for microwave ovens is 
based solely on shipments and PPI data specific to the United States. 
Because all microwave ovens are manufactured outside of the country, 
the changes observed in the PPI data are a result of efficiency gains 
realized in production outside of the country. In other words, 
``experience'' is currently a dynamic of global production and 
distribution and is the cause for the changes observed in the PPI data.
    To evaluate the impact of the uncertainty of the price trend 
estimates, DOE performed price trend sensitivity calculations to 
examine the dependence of the analysis results on different analytical 
assumptions. DOE considered four learning rate sensitivities: (1) A 
``high learning'' rate (34.7 percent); (2) a ``low learning'' rate 
(21.3 percent); (3) a ``no learning'' rate (constant real prices); and 
(4) a ``microwave oven only'' rate. The ``microwave oven only'' is 
based on a limited set of historical price data specifically for 
microwave ovens, and the learning rate is 39.6 percent.
    The annual operating cost savings per unit include changes in 
energy, repair, and maintenance costs. DOE forecasted energy prices for 
the October 2008 NOPR based on AEO 2008; it updated the forecasts for 
the SNOPR using data from AEO 2010. For the October 2008 NOPR and 
today's SNOPR, DOE assumed no increases in repair and maintenance costs 
for more efficient standby mode and off mode features of microwave 
ovens.
e. Discount Rates
    DOE multiplies monetary values in future years by a discount factor 
to determine their present value. DOE estimated national impacts using 
both a 3-percent and a 7-percent real discount rate, in accordance with 
guidance provided by the Office of Management and Budget (OMB) to 
Federal agencies on the development of regulatory analysis (OMB 
Circular A-4 (Sept.17, 2003), section E, ``Identifying and Measuring 
Benefits and Costs''). The Joint Comment stated that DOE should use a 
2-percent to 3-percent real discount rate for national impact analyses. 
(Joint Comment, No. 44 at p. 11) It noted that societal discount rates 
are the subject of extensive academic research, and the weight of 
academic opinion is that the appropriate societal discount rate is 3 
percent or less. It urged DOE to give primary weight to results based 
on the lower of the discount rates recommended by OMB.
    In response, DOE notes that OMB Circular A-4 references an earlier 
Circular A-94, which states that a real discount rate of 7 percent 
should be used as a base case for regulatory analysis. The 7-percent 
rate is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. It approximates the opportunity cost of 
capital, and, according to Circular A-94, it is the appropriate 
discount rate whenever the primary effect of a regulation is to 
displace or alter the use of capital in the private sector. OMB later 
found that the average rate of return to capital remains near the 7-
percent rate estimated in 1992. Circular A-4 also states that when 
regulation primarily and directly affects private consumption, a lower 
discount rate is appropriate. ``The alternative most often used is 
sometimes called the social rate of time preference * * * the rate at 
which `society' discounts future consumption flows to their present 
value.'' It suggests that the real rate of return on long-term 
government debt may provide a fair approximation of the social rate of 
time preference, and states that during the past 30 years, this rate 
has averaged around 3 percent in real terms on a pre-tax basis. It 
concludes that ``for regulatory analysis, [agencies] should provide 
estimates of net benefits using both 3 percent and 7 percent.'' In 
accordance with the guidance from OMB Circular A-4, DOE did not give 
primary weight to results derived using a 3-percent discount rate.
5. Effects of Standards on Energy Prices
    The Joint Comment stated that the proposed standard's mitigation 
effects on electricity prices should be documented and the value of 
reduced electricity bills to all consumers quantified as a benefit. 
(Joint Comment, No. 44 at p. 11) For the October 2008 NOPR, DOE 
examined the impact of reduced energy demand associated with possible 
cooking products standards on prices of electricity. DOE found that 
reductions in electricity demand resulting from possible standards for 
cooking products would produce no detectable change on the average user 
price of electricity in the United States. DOE concluded that microwave 
oven standby mode and off mode standards will not provide additional 
economic benefits resulting from lower energy prices. Thus, for today's 
SNOPR DOE has made no change to its assumptions about the effects of 
microwave oven standards on energy prices.

F. Consumer Subgroup Analysis

    In the October 2008 NOPR, DOE analyzed the potential effects of 
microwave oven standby mode and off mode standards on two subgroups: 
(1) Low-income consumers, and (2) consumers living in senior-only 
households. DOE used the same approach for today's SNOPR.

G. Manufacturer Impact Analysis

    DOE performed an MIA to estimate the financial impact of standby 
mode and off mode energy conservation standards on microwave oven 
manufacturers, and to calculate the impact of such standards on 
domestic employment and manufacturing capacity. The MIA has both 
quantitative and qualitative aspects. The quantitative part of the MIA 
primarily relies on the GRIM--an industry-cash-flow model customized 
for this rulemaking. The GRIM inputs are data characterizing the 
industry cost structure, shipments, and revenues. The key output is the 
industry net present value. Different sets of assumptions (scenarios) 
will produce different results. The qualitative part of the MIA 
addresses factors such as product characteristics, characteristics of 
particular firms, and market and product trends, and it also includes 
an assessment of the impacts of standards on subgroups of 
manufacturers. DOE outlined its methodology for the MIA in the October 
2008 NOPR. 73 FR 62034, 62075-81 (Oct. 17, 2008). The complete MIA is 
presented in chapter 12 of the SNOPR TSD.
    For today's SNOPR, DOE updated the MIA results based on several 
changes to other analyses that impact the MIA. DOE revised the analysis 
to account for the impacts on manufacturers resulting from standby mode 
and off mode standards for Product Class 1 (Microwave-Only Ovens and 
Countertop Combination Microwave Ovens) and Product Class 2 (Built-In 
and Over-the-Range Combination Microwave Ovens). As discussed in 
section IV.C.3, based on the engineering analysis, DOE included updated 
manufacturer production costs (MPCs) for Product Class 1 and new MPCs 
for Product Class 2. For the SNOPR DOE updated its engineering analysis 
to 2010$ using the PPI. DOE also incorporated price trends into the 
analysis. Incorporating prices trends rather than assuming prices 
remain fixed in real terms throughout the analysis also impacts the MIA 
results. DOE used the default prices trends in the NIA starting in the 
base year of the analysis (2011) and continuing through the end of the 
analysis period (2043). DOE also assumed that MPCs and MSPs were 
similarly impacted by price trends in both the base case and standards 
cases. See section IV.D.1 for a

[[Page 8551]]

description of how DOE implemented prices trends into the analysis.
    The total shipments and efficiency distributions were updated using 
the new estimates outlined in the SNOPR NIA. The MIA also uses the new 
analysis period in the NIA (2013-2043) and has updated the base year to 
2011. See section IV.E for a description of the changes to the NIA.
    To segment total product and capital conversion costs between 
Product Class 1 and Product Class 2, DOE used the same split between 
these two product classes as used in the NIA. DOE used the same per-
platform costs at each standby power level for both product classes, 
but converted these product and capital conversion costs to 2010$ using 
the PPI. As described below, DOE also updated the product conversion 
costs in response to comments from interested parties.
    As noted in section IV.C.2, Whirlpool commented that its market 
research suggests high costs associated with consumer education on 
proper operation of microwave ovens with automatic power-down features. 
Whirlpool clarified that the marketing costs it submitted for the ANOPR 
did not include these costs, estimated at $10 million, including 
retailer training, point-of-purchase material, product tags, telephone 
support, and possibly more. (Whirlpool, No. 50 at p. 7) AHAM also 
commented that DOE did not account for the all cost implications on 
appliance manufacturers, including variables such as component 
reliability and/or utility, both of which will impact manufacturer 
cost. (AHAM, No. 47 at p. 6)
    As part of the MIA conducted for the October 2008 NOPR, DOE 
considered product and capital conversion costs associated with the 
analyzed TSLs. Product conversion costs are one-time investments in 
research, development, testing, and marketing, focused on making 
product designs comply with new energy conservation standards. DOE 
investigated available product information to estimate the number of 
product platforms that would need to be updated at each TSL to 
determine conversion costs for the entire industry. DOE also used 
manufacturer interviews to verify the estimates used to determine 
product conversion costs. For each TSL, DOE assumed that most of the 
product conversion costs would be used for product development 
expenses. To account for the majority of the cost to upgrade the 
designs of product platforms that did not meet the standby power 
requirements at each TSL, DOE estimated a per-platform cost for 
engineering time, reliability testing, and product development that 
varied depending on the complexity of the design options. In response 
to Whirlpool's comment, DOE notes that the normal product cycle of 
microwave ovens is less the 3-year period between the announcement and 
the compliance date of the final rule, and some of these marketing 
costs for rolling-out new products would have been incurred without 
standards. However, to conservatively account for any of these 
extraordinary marketing costs in that period, DOE also estimated for 
the SNOPR a per-platform cost where it analyzed a power-down design 
option to achieve the required standby power level. The marketing cost 
equaled half the estimated engineering expense per platform. Chapter 12 
of the SNOPR TSD contains more detailed information on the product 
conversion costs for microwave oven manufacturers.
    DOE also received a comment about the MIA results during the 
October 2008 NOPR public meeting. In response to a discussion about 
different possible design paths that might be taken by manufacturers to 
reach higher efficiencies, LG questioned why the range of impacts on 
INPV was great if DOE had trouble contacting some overseas 
manufacturers. (LG, Public Meeting Transcript, No. 40.5 at p. 167-169).
    Additional information and interviewing a greater number of 
manufacturers would not affect the range of INPV impacts shown in the 
NOPR. Rather, the range of potential impacts on microwave oven 
manufacturers in the NOPR MIA analysis depended on two factors: The 
magnitude of the conversion costs and the ability of manufacturers to 
pass through the additional production costs to consumers at higher 
TSLs. The production cost at the max-tech standby power level (TSL 4) 
in the NOPR added $5.13 to the baseline MPC. If manufacturers could 
fully pass through these additional production costs to consumers for 
lower standby power, the additional cash flow from operations in the 
NOPR MIA analysis would still not be enough to overcome the substantial 
product and capital conversion costs, resulting in a loss of $35 
million in INPV. If manufacturers could only pass through a portion of 
the increased production costs, the lower per-unit profit lowered cash 
flow from operations and resulted in a loss of $172 million in INPV. 73 
FR 62034, 62096-99 (Oct. 17, 2008). Hence, feedback from manufacturers 
was valuable to determine the standby power conversion costs and to 
determine which scenarios were appropriate to calculate the potential 
impacts on INPV.

H. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts include 
direct and indirect impacts. Direct employment impacts are changes in 
the number of employees for manufacturers of the products subject to 
standards, their suppliers, and related service firms. The MIA 
addresses those impacts. Indirect employment impacts from standards 
consist of the jobs created or eliminated in the national economy, 
other than in the manufacturing sector being regulated, due to: (1) 
Reduced spending on energy by end users, (2) reduced spending on new 
energy supply by the utility industry, (3) increased consumer spending 
on the purchase of new products, and (4) the effects of those three 
factors throughout the economy.
    One method for assessing the possible effects such shifts in 
economic activity may have on the demand for labor is to compare 
sectoral employment statistics developed by the Bureau of Labor 
Statistics (BLS). BLS regularly publishes its estimates of the number 
of jobs per million dollars of economic activity in different sectors 
of the economy, as well as the jobs created elsewhere in the economy by 
that same economic activity. Data from BLS indicate that expenditures 
in the utility sector generally create fewer jobs (both directly and 
indirectly) than do expenditures in other sectors of the economy.\20\ 
There are many reasons for the differences, including wage differences 
and the fact that the utility sector is more capital-intensive and less 
labor-intensive than many 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 energy 
conservation 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 manufacturing sectors). Thus, based on 
the BLS data alone, DOE believes net national employment will increase 
due to shifts in economic activity resulting from new standby mode and 
off mode standards for microwave ovens.
---------------------------------------------------------------------------

    \20\ See Bureau of Economic Analysis, ``Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS 
II),'' Washington, DC, U.S. Department of Commerce, 1992.
---------------------------------------------------------------------------

    In developing the October 2008 NOPR and today's SNOPR, DOE 
estimated

[[Page 8552]]

indirect national employment impacts using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 3.1.1 
(ImSET). ImSET is a special-purpose version of the U.S. Benchmark 
National Input-Output (I-O) model 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 to characterize economic flows among 187 sectors most 
relevant to industrial, commercial, and residential building energy 
use.
    DOE notes that ImSET is not a general equilibrium forecasting 
model, and understands the uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis.\4\ Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may over-estimate actual job 
impacts over the long run for this rule. Because ImSET predicts small 
job impacts resulting from this rule, regardless of these 
uncertainties, the actual job impacts are likely to be negligible in 
the overall economy. DOE may consider the use of other modeling 
approaches for examining long run employment impacts. DOE also notes 
that the employment impacts estimated with ImSET for the entire economy 
differ from the employment impacts in the microwaves manufacturing 
sector estimated using the Government Regulatory Impact Model (GRIM) in 
chapter 12 of the TSD. The methodologies used and the sectors analyzed 
in the ImSET and GRIM models are different. Please see chapter 13 of 
the TSD for additional details on the range of results generated from 
the ImSET model.
    EJ and the Joint Comment stated that DOE must consider its own 
projections that an increase in employment will result from the 
adoption of standards in weighing the economic costs and benefits of 
more stringent energy conservation standards. (EJ Comment, Public 
Meeting Transcript, No. 40.5 at p. 186; Joint Comment, No. 44 at p. 13) 
As described above, when evaluating alternative standard levels DOE 
considers the indirect employment impacts estimated using ImSet. Direct 
employment impacts on the manufacturers that produce microwave ovens 
are analyzed in the MIA, as discussed in section IV.G. For today's 
SNOPR, DOE made no change to its method for estimating employment 
impacts. EEI requested clarification on the methodology used to 
estimate the national employment impacts when the majority of microwave 
ovens are manufactured overseas. (EEI, Public Meeting Transcript at p. 
185) The employment impacts analysis considers only the indirect 
employment impacts expected to result from appliance standards. The 
employment impacts in the affected appliance manufacturing industry are 
assessed in the MIA. For the purposes of the employment impacts 
analysis described in this section, the location of the manufacturing 
facilities is not relevant. For further details, see chapter 13 of the 
SNOPR TSD.

I. Utility Impact Analysis

    The utility impact analysis estimates the change in the forecasted 
power generation capacity for the Nation that would be expected to 
result from adoption of new or amended standards. The analysis 
determines the changes to electricity supply as a result of electricity 
consumption savings due to standards. For the October 2008 NOPR and 
today's SNOPR, DOE used the NEMS-BT computer model to calculate these 
changes. The analysis output provides a forecast for the needed 
generation capacities at each TSL. The estimated net benefit of a 
standard is the difference between the generation capacities forecasted 
by NEMS-BT and the AEO Reference case. DOE obtained the energy savings 
inputs from the NIA. Those inputs reflect the effects of standby mode 
and off mode energy use reduction on electricity consumption of 
microwave ovens. Chapter 14 of the SNOPR TSD presents results of the 
utility impact analysis.

J. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of CO2, NOX, and Hg from energy 
conservation standards for microwave oven standby mode and off mode 
energy use. DOE used the NEMS-BT computer model, which is run similarly 
to the AEO NEMS, except that microwave oven standby mode and off mode 
energy use is reduced by the amount of energy saved at each TSL. The 
inputs of national energy savings come from the NIA spreadsheet model, 
while the output is the forecasted physical emissions. The net benefit 
of each TSL in today's proposed rule is the difference between the 
forecasted emissions estimated by NEMS-BT at each TSL and the AEO 2010 
Reference case. NEMS-BT tracks CO2 emissions using a 
detailed module that provides results with broad coverage of all 
sectors and inclusion of interactive effects. For today's SNOPR, DOE 
used AEO 2010. For the final rule, DOE intends to revise the emissions 
analysis using the most current version of NEMS.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap and trading 
programs, and DOE has preliminarily determined that these programs 
create uncertainty about the standards' impact on SO2 
emissions. Title IV of the Clean Air Act sets an annual emissions cap 
on SO2 for affected EGUs in all 50 States and the District 
of Columbia (DC). SO2 emissions from 28 eastern States and 
DC are also limited under the Clean Air Interstate Rule (CAIR, 70 FR 
25162 (May 12, 2005)), which created an allowance-based trading program 
that would gradually replace the Title IV program in those States and 
DC. Although CAIR was remanded to EPA by the U.S. Court of Appeals for 
the District of Columbia Circuit (DC Circuit), see North Carolina v. 
EPA, 550 F.3d 1176 (DC Cir. 2008), it remained in effect temporarily, 
consistent with the DC Circuit's earlier opinion in North Carolina v. 
EPA, 531 F.3d 896 (DC Cir. 2008). On July 6, 2010, EPA issued the 
Transport Rule proposal, a replacement for CAIR (75 FR 45210 (Aug. 2, 
2010)); and on July 6, 2011 EPA issued the final Transport Rule, 
entitled the Cross-State Air Pollution Rule. 76 FR 48208 (Aug. 8, 
2011). On December 30, 2011, however, the DC Circuit stayed the new 
rules while a panel of judges reviews them, and told EPA to continue 
enforcing CAIR (see EME Homer City Generation v. EPA, No. 11-1302, 
Order at *2 (DC Cir. Dec. 30, 2011)). The AEO 2011 NEMS-BT used for 
today's NOPR assumes the implementation of CAIR.
    The attainment of emissions caps typically is flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the imposition of an energy conservation standard could be used to 
permit offsetting increases in SO2 emissions by any 
regulated EGU. However, if the standard resulted in a permanent 
increase in the quantity of unused emissions allowances, there would be 
an overall reduction in SO2 emissions from the standards. 
While there remains some uncertainty about the ultimate effects of 
energy conservation standards on SO2 emissions covered by 
the existing cap-and-trade system, the NEMS-BT modeling system that DOE 
uses to forecast emissions reductions currently indicates that no 
physical reductions in power sector emissions would occur for 
SO2.

[[Page 8553]]

    As discussed above, the version of NEMS-BT used for today's SNOPR 
assumes the implementation of CAIR, which established a cap on 
NOX emissions in 28 eastern States and the District of 
Columbia. With CAIR in effect, the energy conservation standards for 
microwave oven standby mode and off mode energy use are expected to 
have little or no physical effect on these emissions in those States 
covered by CAIR, for the same reasons that they may have little effect 
on SO2 emissions. However, the standards would be expected 
to reduce NOX emissions in those 22 States not affected by 
the CAIR. For these 22 States, DOE used NEMS-BT to estimate 
NOX emission reductions from the standards that are 
considered in today's SNOPR.
    On December 21, 2011, EPA announced national emissions standards 
for hazardous air pollutants (NESHAPs) for mercury and certain other 
pollutants emitted from coal and oil-fired EGUs. (See https://epa.gov/mats/pdfs/20111216MATSfinal.pdf.) The NESHAPs do not include a trading 
program and, as such, DOE's energy conservation standards would likely 
reduce Hg emissions. For the emissions analysis for this rulemaking, 
DOE estimated mercury emissions reductions using NEMS-BT based on 
AEO2010, which does not incorporate the NESHAPs. DOE expects that 
future versions of the NEMS-BT model will reflect the implementation of 
the NESHAPs.

K. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed rule, DOE considered 
the estimated monetary benefits likely to result from the reduced 
emissions of CO2 and NOX that are expected to 
result from each of the TSLs considered. In order to make this 
calculation similar 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 forecast period for each TSL. This 
section summarizes the basis for the monetary values used for each of 
these emissions and presents the values considered in this rulemaking.
    For today's SNOPR, DOE is relying on a set of values for the SCC 
that was developed by an interagency process. A summary of the basis 
for those values is provided below, and a more detailed description of 
the methodologies used is provided as an appendix to chapter 16 of the 
SNOPR TSD.

1. Social Cost of Carbon

    Under section 1(b)(6) of Executive Order 12866, 58 FR 51735 (Oct. 
4, 1993), agencies must, to the extent permitted by law, ``assess both 
the costs and the benefits of the intended regulation and, recognizing 
that some costs and benefits are difficult to quantify, propose or 
adopt a regulation only upon a reasoned determination that the benefits 
of the intended regulation justify its costs.'' The purpose of the SCC 
estimates presented here is to allow agencies to incorporate the 
monetized social benefits of reducing CO2 emissions into 
cost-benefit analyses of regulatory actions that have small, or 
``marginal,'' impacts on cumulative global emissions. The estimates are 
presented with an acknowledgement of the many uncertainties involved 
and with a clear understanding that they should be updated over time to 
reflect increasing knowledge of the science and economics of climate 
impacts.
    As part of the interagency process that developed the SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide.
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council \21\ 
points out that any assessment will suffer from uncertainty, 
speculation, and lack of information about (1) future emissions of 
greenhouse gases, (2) the effects of past and future emissions on the 
climate system, (3) the impact of changes in climate on the physical 
and biological environment, and (4) the translation of these 
environmental impacts into economic damages. As a result, any effort to 
quantify and monetize the harms associated with climate change will 
raise serious questions of science, economics, and ethics and should be 
viewed as provisional.
---------------------------------------------------------------------------

    \21\ National Research Council. ``Hidden Costs of Energy: 
Unpriced Consequences of Energy Production and Use.'' National 
Academies Press: Washington, DC 2009.
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Consistent with the directive quoted 
above, the purpose of the SCC estimates presented here is to make it 
possible for agencies to incorporate the social benefits from reducing 
carbon dioxide emissions into cost-benefit analyses of regulatory 
actions that have small, or ``marginal,'' impacts on cumulative global 
emissions. Most Federal regulatory actions can be expected to have 
marginal impacts on global emissions.
    For such policies, the agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC value 
appropriate for that year. The net present value of the benefits can 
then be calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years. This 
approach assumes that the marginal damages from increased emissions are 
constant for small departures from the baseline emissions path, an 
approximation that is reasonable for policies that have effects on 
emissions that are small relative to cumulative global carbon dioxide 
emissions. For policies that have a large (non-marginal) impact on 
global cumulative emissions, there is a separate question of whether 
the SCC is an appropriate tool for calculating the benefits of reduced 
emissions. This concern is not applicable to this notice, and DOE does 
not attempt to answer that question here.
    At the time of the preparation of this supplemental notice, the 
most recent interagency estimates of the potential global benefits 
resulting from reduced CO2 emissions in 2010, expressed in 
2010$, were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For 
emissions reductions that occur in later years, these values grow in 
real terms over time. Additionally, the interagency group determined 
that a range of values from 7 percent to 23 percent should be used to 
adjust the global SCC to

[[Page 8554]]

calculate domestic effects,\22\ although preference is given to 
consideration of the global benefits of reducing CO2 
emissions.
---------------------------------------------------------------------------

    \22\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
---------------------------------------------------------------------------

    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. Specifically, the interagency group has set a preliminary 
goal of revisiting the SCC values within 2 years or at such time as 
substantially updated models become available, and to continue to 
support research in this area. In the meantime, the interagency group 
will continue to explore the issues raised by this analysis and 
consider public comments as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    To date, economic analyses for Federal regulations have used a wide 
range of values to estimate the benefits associated with reducing 
carbon dioxide emissions. In the model year 2011 CAFE final rule, the 
Department of Transportation (DOT) used both a ``domestic'' SCC value 
of $2 per ton of CO2 and a ``global'' SCC value of $33 per 
ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year. It also included a 
sensitivity analysis at $80 per ton of CO2. See Average Fuel 
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 
FR 14196 (March 30, 2009) (Final Rule); Final Environmental Impact 
Statement Corporate Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: 
https://www.nhtsa.gov/fuel-economy). A domestic SCC value is meant to 
reflect the value of damages in the United States resulting from a unit 
change in carbon dioxide emissions, while a global SCC value is meant 
to reflect the value of damages worldwide.
    A 2008 regulation proposed by DOT assumed a domestic SCC value of 
$7 per ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0 to $14 for sensitivity analysis), also increasing 
at 2.4 percent per year. See Average Fuel Economy Standards, Passenger 
Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate Average 
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 
2011-2015 at 3-58 (June 2008) (Available at: https://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and 
packaged terminal heat pumps finalized by DOE in October of 2008 used a 
domestic SCC range of $0 to $20 per ton CO2 for 2007 
emission reductions (in 2007$). 73 FR 58772, 58814 (Oct. 7, 2008). In 
addition, EPA's 2008 Advance Notice of Proposed Rulemaking on 
Regulating Greenhouse Gas Emissions Under the Clean Air Act identified 
what it described as ``very preliminary'' SCC estimates subject to 
revision. 73 FR 44354 (July 30, 2008). EPA's global mean values were 
$68 and $40 per ton CO2 for discount rates of approximately 
2 percent and 3 percent, respectively (in 2006$ for 2007 emissions).
    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: Global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per ton of CO2. These interim values 
represent the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules and were offered for public comment in connection with 
proposed rules, including the joint EPA-DOT fuel economy and 
CO2 tailpipe emission proposed rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates, which 
were considered for this proposed rule. Specifically, the group 
considered public comments and further explored the technical 
literature in relevant fields. The interagency group relied on three 
integrated assessment models (IAMs) commonly used to estimate the SCC: 
The FUND, DICE, and PAGE models.\23\ These models are frequently cited 
in the peer-reviewed literature and were used in the last assessment of 
the Intergovernmental Panel on Climate Change. Each model was given 
equal weight in the SCC values that were developed.
---------------------------------------------------------------------------

    \23\ The models are described in appendix 15-A of the SNOPR TSD.
---------------------------------------------------------------------------

    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four SCC values for use in 
regulatory analyses. Three values are based on the average SCC from 
three integrated assessment models, at discount rates of 2.5 percent, 3 
percent, and 5 percent. The fourth value, which represents the 95th 
percentile SCC estimate across all three models at a 3-percent discount 
rate, is included to represent higher-than-expected impacts from 
temperature change further out in the tails of the SCC distribution. 
For emissions (or emission reductions) that occur in later years, these 
values grow in real terms over time, as depicted in Table IV.11.

[[Page 8555]]



                                   Table IV.11--Social Cost of CO2, 2010-2050
                                        [In 2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                                Discount Rate %
                                                              --------------------------------------------------
                             Year                                  5          3         2.5             3
                                                              --------------------------------------------------
                                                                Average    Average    Average    95th Percentile
----------------------------------------------------------------------------------------------------------------
2010.........................................................        4.7       21.4       35.1              64.9
2015.........................................................        5.7       23.8       38.4              72.8
2020.........................................................        6.8       26.3       41.7              80.7
2025.........................................................        8.2       29.6       45.9              90.4
2030.........................................................        9.7       32.8       50.0             100.0
2035.........................................................       11.2       36.0       54.2             109.7
2040.........................................................       12.7       39.2       58.4             119.3
2045.........................................................       14.2       42.1       61.7             127.8
2050.........................................................       15.7       44.9       65.0             136.2
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the agencies participating in the 
interagency process to estimate the SCC.
    DOE recognizes the uncertainties embedded in the estimates of the 
SCC used for cost-benefit analyses. As such, DOE and others in the U.S. 
Government intend to periodically review and reconsider those estimates 
to reflect increasing knowledge of the science and economics of climate 
impacts, as well as improvements in modeling. In this context, 
statements recognizing the limitations of the analysis and calling for 
further research take on exceptional significance.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the most recent values 
identified by the interagency process, adjusted to 2010$ using the GDP 
price deflator. For each of the four cases specified, the values used 
for emissions in 2010 were $4.9, $22.3, $36.5, and $67.6 per metric ton 
avoided (values expressed in 2010$).\24\ To monetize the CO2 
emissions reductions expected to result from amended standards for 
microwave ovens, DOE used the values identified in Table A1 of the 
``Social Cost of Carbon for Regulatory Impact Analysis Under Executive 
Order 12866,'' which is reprinted in appendix 16-A of the SNOPR TSD, 
appropriately escalated to 2010$. 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 SCC values in each case.
---------------------------------------------------------------------------

    \24\ Table A1 presents SCC values through 2050. For DOE's 
calculation, it derived values after 2050 using the 3-percent per 
year escalation rate used by the interagency group.
---------------------------------------------------------------------------

    Several parties provided comments regarding the economic valuation 
of CO2 for the October 2008 NOPR. Whirlpool does not support 
an attempt to value those emissions as part of this rulemaking. 
(Whirlpool, No. 50 at p. 8) DOE believes that, in keeping with 
Executive Order 12866, placing an economic value on avoided 
CO2 emissions is necessary for a proper assessment of the 
costs and benefits of energy efficiency standards. For this SNOPR, DOE 
has updated its valuation of emission reductions based on the most 
recent recommendations from the interagency group. DOE has considered a 
wide range of values per ton of avoided CO2. As stated 
previously, the estimates are presented with an acknowledgement of the 
many uncertainties involved and with a clear understanding that they 
should be updated over time to reflect increasing knowledge of the 
science and economics of climate impacts.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the TSLs it considered. As noted above, 
new or amended energy conservation standards would reduce 
NOX emissions in those 22 States that are not affected by 
the CAIR. DOE estimated the monetized value of NOX emissions 
reductions resulting from each of the TSLs considered for today's SNOPR 
based on environmental damage estimates found in the relevant 
scientific literature. Available estimates suggest a very wide range of 
monetary values, ranging from $370 per ton to $3,800 per ton of 
NOX from stationary sources, measured in 2001$ (equivalent 
to a range of $450 to $4,623 per ton in 2010$).\25\ In accordance with 
OMB guidance, DOE conducted two calculations of the monetary benefits 
derived using each of the economic values used for NOX, one 
using a real discount rate of 3 percent and the other using a real 
discount rate of 7 percent.\26\
---------------------------------------------------------------------------

    \25\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC
    \26\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    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 in its rulemakings.

L. Discussion of Other Comments

1. Off Mode Power Consumption
    In the October 2008 NOPR, DOE determined that a microwave oven 
would be considered to be in off mode if it is plugged in to a main 
power source, is not being used for an active function such as cooking 
or defrosting, and is not consuming power for any standby mode 
function. 73 FR 62034, 62042 (Oct. 17, 2008). Hypothetically, a 
microwave with mechanical controls and no display or cooking sensor but 
that consumes power for components such as a power supply when the unit

[[Page 8556]]

is not activated would be considered to be in off mode. DOE believed no 
such microwave ovens were available on the market, and was unaware of 
any microwave ovens available that could operate in off mode. 
Therefore, DOE proposed no off-mode power consumption energy 
conservation standard. DOE requested input and data regarding off mode 
power for microwave ovens.
    Despite DOE's test results indicating that no current microwave 
oven can operate in off mode, AHAM recommended that some level of power 
should be allowed in off mode for the following reasons:
    (1) Harmonization, particularly with Europe, which is implementing 
a 0.5 W standard on off mode in 2013;
    (2) Consistency in standby mode and off mode definitions among all 
NAECA-covered products;
    (3) Off mode and standby mode are linked, in that standby power 
requirements may result in previously unused features, such as a small 
LED indicating that power is running to the unit, but the unit is in 
standby mode; and
    (4) Power use and conversion concerns (i.e., harmonics \27\) may 
necessitate some protective capability, which falls into the definition 
of off mode.
---------------------------------------------------------------------------

    \27\ Harmonics are waveforms of voltage or current that are 
multiples of the fundamental main power frequency. Harmonics can 
cause disruption to equipment connected to the main power and lead 
to component failures.
---------------------------------------------------------------------------

    AHAM urged DOE to consider adopting AHAM's proposed clarifications 
and examples for off mode power included in Exhibit 1. These guidelines 
allow for a single definition to be used for all products. (AHAM, No. 
47 at p. 5)
    Whirlpool commented that the addition of off mode to the proposed 
rule is very important to assure that all power consumption is properly 
accounted for. (Whirlpool, No. 50 at p. 4)
    DOE generally agrees with the topics addressed in these comments. 
Consistency between covered products and international harmonization 
are important issues to be considered in energy conservation standards 
rulemakings, as is properly accounting for all power consumption. 
However, DOE received no comments indicating that any microwave ovens 
with off mode capability are currently available or expected to become 
available on the market. In the concurrent microwave oven test 
procedure rulemaking, DOE investigated the potential for microwave 
ovens with an on/off switch to operate in off mode. DOE determined that 
microwave ovens with such a configuration would be capable of operating 
in off mode, but that operation in off mode due to the activation of an 
on/off switch would be associated with zero energy consumption. 
Therefore, DOE continues to propose no standard for off mode power in 
microwave ovens because it believes there would be no benefit 
associated with such a standard.
2. Proposed Standards for Microwave Oven Standby Mode and Off Mode 
Energy Use
    For the October 2008 NOPR, DOE made the preliminary determination 
that a maximum standby power standard of 1.0 W for microwave ovens is 
technologically feasible and economically justified. 73 FR 62034, 62120 
(Oct. 17, 2008). DOE requested comments and views of interested parties 
on the proposed standards for microwave ovens. Id. at 62133.
    EEI stated that the proposed standard of 1.0 W is too aggressive 
because typical microwave ovens have standby power consumption of 2 to 
4 W. This power is used for functions that consumers find useful (such 
as clocks and cooking sensors). EEI noted that DOE should work with 
AHAM to set a different standard that does not compromise 
functionality. EEI suggested a standard of 2.0 to 3.0 W, which should 
provide more flexibility to manufacturers and provide national energy 
savings. (EEI, No. 56 at p. 2)
    As discussed in the October 2008 NOPR and this SNOPR, DOE is aware 
of various strategies manufacturers could employ to reduce standby 
power consumption while maintaining consumer utility. DOE's analysis in 
today's SNOPR indicates that a 1-W standard for microwave-only ovens 
and countertop combination microwave ovens would be technically 
feasible and economically justified. DOE is not proposing a 1-W 
standard for built-in and over-the-range combination microwave ovens 
because such a level was not found to be technically feasible while 
maintaining consumer utility (i.e., automatic power-down would be 
necessary to meet that standby power level).
    The Joint Comment and ASAP support the proposed standard. According 
to the Joint Comment, the proposal is in keeping with national and 
international efforts to limit product standby power. (Joint Comment, 
No. 44 at p. 10; ASAP, Public Meeting Transcript, No. 40.5 at p. 32)
    AHAM stated that it believes all the TSLs are appropriate, 
including the TSL on which the proposed standard is based. AHAM stated 
that much of the world is moving towards the IEA 1-Watt Program. (AHAM, 
Public Meeting Transcript, No. 40.5 at p. 83) Nevertheless, AHAM stated 
its opposition to the proposed standard, due in part to the lack of 
sufficient time for manufacturers to evaluate the viability or 
feasibility of the proposed technologies. AHAM proposed that DOE issue 
a ``no standard'' standard on microwave ovens or postpone the current 
rulemaking on microwave oven standby power until a robust test 
procedure is published and data are collected using the clarified test 
procedure to define potential standby power requirements. If the ``no 
standard'' standard is issued, standby power may be addressed during 
the next cooking products rulemaking or through negotiation. (AHAM, No. 
47 at pp. 3-4) AHAM also commented that the proposed standard's 
effective date of 2012 is inconsistent with the timing in the rest of 
the world. (AHAM, Public Meeting Transcript, No. 40.5 at p. 27) GE 
recommended that DOE should postpone the microwave oven standby power 
rulemaking until a robust test procedure is published or, in the 
alternative, issue a ``no standard'' standard on microwave ovens. GE 
further stated that it believes there are critical gaps in the 
engineering analysis used to justify the proposed standard. (GE, No. 48 
at p. 2) GE commented that if the microwave oven standby and off mode 
rulemaking is not postponed, DOE should issue a ``no standard'' 
standard on microwave ovens. (GE, No. 48 at p. 2)
    Whirlpool commented that it does not support the proposed standard. 
(Whirlpool, No. 50 at p. 1) Further, Whirlpool stated that DOE's 
rulemaking timeline should take into account international changes in 
microwave oven standards. According to Whirlpool, any changes in U.S. 
policy that coincided with changes in policy around the world would be 
significantly advantageous to manufacturers. (Whirlpool, Public Meeting 
Transcript, No. 40.5 at p. 29)
    Since the publication of the October 2008 NOPR, DOE has amended the 
microwave oven test procedure for microwave ovens to measure standby 
mode and off mode power consumption. These amendments appear in the 
March 2011 TP Interim Final Rule. 76 FR 12825 (Mar. 9, 2011). The 
amendments incorporate by reference certain provisions of IEC Standard 
62301 First Edition, 2005-06, which is an international test procedure 
addressing standby mode and off mode power measurement. In addition, in 
order to

[[Page 8557]]

ensure that the amended test procedure adequately addresses the EISA 
2007 requirement to consider the most recent version of IEC Standard 
62301 (42 U.S.C. 6295(gg)(2)(A)), and recognizing that the IEC was 
expected to issue IEC Standard 62301 (Second Edition) in the same 
timeframe as DOE was planning to publish the amended test procedure, 
DOE issued the microwave oven test procedure on an interim final basis. 
The March 2011 TP Interim Final Rule offered a 180-day comment period, 
and to the extent necessary, DOE is considering appropriate adjustments 
based on comments received. Also since the publication of the October 
2008 NOPR, DOE conducted further analyses in support of this energy 
conservation standards rulemaking, including the evaluation of 
combination microwave ovens.
    In considering standards for today's SNOPR, DOE is proposing two 
product classes for microwave ovens: (1) Microwave-only ovens and 
countertop combination microwave ovens; and (2) built-in and over-the-
range combination microwave ovens. DOE believes the analyses conducted 
for microwave ovens in the October 2008 NOPR remains valid for the 
microwave-only oven and countertop combination microwave oven product 
class. However, these analyses have been updated to reflect more 
current results, where applicable. DOE conducted additional analyses 
for the built-in and over-the-range combination microwave oven product 
class. The approach and results for proposed standard levels for 
today's SNOPR are discussed in section IV.
3. Manufacturer Tax Credits Impact on Market Adoption of More Efficient 
Products
    Whirlpool commented that the analysis cites dated studies which 
suggest that the consumer sees little economic benefit of manufacturer 
tax credits. Not covered in this analysis is that the tax credits 
provide manufacturers some of the cash flow necessary to invest in the 
development of ever more efficient products. Thus, the consumer sees 
significant benefit in the form of increasingly energy and water 
efficient products in the marketplace. (Whirlpool, No. 50 at p. 9)
    As described in chapter 17 of the SNOPR TSD on the Regulatory 
Impact Analysis (RIA), DOE analyzed non-regulatory alternatives to 
minimum energy conservation standards, including manufacturer tax 
credits. The RIA assesses the national energy savings and economic 
impacts (i.e., NPV) of the non-regulatory alternatives relative to the 
national impacts from minimum energy conservation standards. In the 
case of manufacturer tax credits, DOE agrees that they provide 
manufacturers the financial means to develop and sell more efficient 
products and that the resulting consumer purchase price would be 
partially mitigated by the tax credits. However, DOE estimated that tax 
credits would be paid for by consumers in another form (such as 
additional taxes), and therefore did not include them as a consumer 
benefit for the purposes of calculating the national NPV. DOE did 
estimate that manufacturer tax credits will lead to an increase in the 
sales of more energy-efficient products. DOE determined, however, that 
the rate of adoption of more efficient products due to manufacturer tax 
credits is not as great as that from mandatory minimum energy 
conservation standards. For more details on DOE's analysis of 
manufacturer tax credits and all non-regulatory alternatives, refer to 
chapter 17 of the SNOPR TSD.

V. Analytical Results

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of a number of TSLs for the 
microwave oven standby mode and off mode energy use that are the 
subject of today's proposed rule. For the October 2008 NOPR, DOE based 
the TSLs on standby power levels explored in the November 2007 ANOPR, 
and selected the TSLs on consideration of economic factors and current 
market conditions. As discussed previously in section IV, given the 
small number of standby power levels analyzed, DOE maintained all four 
of the standby power levels to consider as TSLs.
    Table V.1 shows the TSLs for microwave oven standby mode and off 
mode energy use. In all, DOE has considered four TSLs. TSL 1 
corresponds to the first candidate standard level from each product 
class and represents the standby power level for each class with the 
least significant design change. TSL 4 corresponds to the max-tech 
efficiency levels. TSLs 2 and 3 are intermediate levels between TSL 1 
and TSL 4.

Table V.1--Trial Standard Levels for Microwave Oven Standby Mode and Off
                             Mode Energy Use
------------------------------------------------------------------------
                                             Standby power (W)
                                 ---------------------------------------
                                   Product Class 1:    Product Class 2:
      Trial standard level        Microwave-only and  Built-in and over-
                                      countertop           the-range
                                      combination         combination
------------------------------------------------------------------------
TSL 1...........................                2.00                3.70
TSL 2...........................                1.50                2.70
TSL 3...........................                1.00                2.20
TSL 4...........................                0.02                0.04
------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Consumers
a. Life-Cycle Cost and Payback Period
    To evaluate the net economic impact of standards on consumers, DOE 
conducted LCC and PBP analyses for each TSL. In general, a higher-
efficiency product would affect consumers in two ways: (1) Annual 
operating expense would decrease; and (2) purchase price would 
increase. Section IV.D of this notice discusses the inputs DOE used for 
calculating the LCC and PBP.
    The key outputs of the LCC analysis are a mean LCC savings relative 
to the baseline product design, as well as a probability distribution 
or likelihood of LCC reduction or increase, for each TSL and product 
class. The LCC analysis also estimates the fraction of consumers for 
which the LCC will decrease (net benefit), increase (net cost), or 
exhibit no change (no impact) relative to the base-case product 
forecast. No impacts occur when the product efficiencies of the base-
case forecast already equal or exceed the efficiency at a given TSL.
    Table V.2 and Table V.3 show the LCC and PBP results for both 
microwave oven product classes. Note that for built-in and over-the-
range combination

[[Page 8558]]

microwave ovens, 100 percent of consumers of such products in 2014 are 
assumed to be using a combination microwave oven in the base case. Any 
decrease in standby power would affect 100 percent of the market.

                 Table V.2--Microwave-Only Ovens and Countertop Combination Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost ($)                  Life-cycle cost savings
                                                               ------------------------------------------------------------------------------   Payback
                                                      Standby                                                         % Households with         period
                        TSL                          power (W     Average     Average     Average     Average  ------------------------------   (years)
                                                                 installed   operating      LCC      savings $               No        Net      Median
                                                                   price       cost                             Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..........................................        4.00        $223         $31        $254          NA         0       100         0          NA
1.................................................        2.00         224          15         239           7         0        54        46         0.2
2.................................................        1.50         224          12         236          10         0        19        81         0.4
3.................................................        1.00         225           8         233          13         0         0       100         1.1
4.................................................        0.02         230           0         230          15         0         0       100         2.4
--------------------------------------------------------------------------------------------------------------------------------------------------------


                     Table V.3--Built-in and Over-the-Range Combination Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Life-cycle cost ($)                  Life-cycle cost savings
                                                               ------------------------------------------------------------------------------   Payback
                                                      Standby                                                         % Households with         period
                        TSL                         power  (W)    Average     Average     Average     Average  ------------------------------   (years)
                                                                 installed   operating      LCC       Savings                No        Net      median
                                                                   price       cost                             Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..........................................        4.50        $482         $35        $517          NA         0       100         0          NA
1.................................................        3.70         482          29         511          $6         0         0       100         0.0
2.................................................        2.70         486          21         506          11         0         0       100         1.9
3.................................................        2.20         496          17         513           4        21         0        79         6.3
4.................................................        0.04         490           0         490          27         0         0       100         1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Consumer Subgroup Analysis
    Using the LCC spreadsheet model, DOE determined the impact of the 
standards on the following microwave oven consumer subgroups: senior-
only households and low-income households. Table V.4 and Table V.5 
compare the average LCC savings for senior-only households and low-
income households with those for all households. The LCC impacts for 
senior-only and low-income households are essentially the same as they 
are for the general population.

  Table V.4--Microwave-Only Ovens and Countertop Combination Microwave Ovens: Comparison of Average LCC Savings
                                    for Consumer Subgroups and All Households
----------------------------------------------------------------------------------------------------------------
                                                                Standby    Senior-only   Low-income      All
                             TSL                               power (W)    households   households   households
----------------------------------------------------------------------------------------------------------------
1...........................................................         2.00           $7           $7           $7
2...........................................................         1.50           10           10           10
3...........................................................         1.00           12           12           13
4...........................................................         0.02           15           15           15
----------------------------------------------------------------------------------------------------------------


    Table V.5--Built-In and Over-the-Range Combination Microwave Ovens: Comparison of Average LCC Savings for
                                      Consumer Subgroups and All Households
----------------------------------------------------------------------------------------------------------------
                                                                Standby    Senior-only   Low-income      All
                             TSL                               power (W)    households   households   households
----------------------------------------------------------------------------------------------------------------
1...........................................................         3.70           $6           $6           $6
2...........................................................         2.70           10           10           11
3...........................................................         2.20            4            4            4
4...........................................................         0.04           27           27           27
----------------------------------------------------------------------------------------------------------------

c. Rebuttable-Presumption Payback
    As discussed above, EPCA establishes a rebuttable presumption that, 
in essence, an energy conservation standard is economically justified 
if the increased purchase cost for product that meets the standard is 
less than three times the value of the first-year energy savings 
resulting from the standard. (42 U.S.C. 6295(o)(2)(B)(iii)) DOE 
calculated a rebuttable-presumption payback period for each TSL to 
determine whether DOE could presume that a standard at that level is 
economically justified. Table V.6 shows the rebuttable-presumption 
payback periods for the microwave oven standby mode and off mode TSLs. 
Because only a single, average value is necessary for establishing the 
rebuttable-presumption payback period, rather than using distributions 
for input values, DOE used discrete values. As required by EPCA, DOE 
based the calculation on the assumptions in the DOE test procedures for 
microwave ovens. (42 U.S.C. 6295(o)(2)(B)(iii)) As a result, DOE

[[Page 8559]]

calculated a single rebuttable-presumption payback value, and not a 
distribution of payback periods, for each TSL.

  Table V.6--Rebuttable-Presumption Payback Periods for Microwave Oven
                        Standby Mode and Off Mode
------------------------------------------------------------------------
                                           Payback period (years)
                                   -------------------------------------
                                      Microwave-only      Built-in and
                TSL                     ovens and        over-the-range
                                        countertop        combination
                                    combination ovens   microwave ovens
------------------------------------------------------------------------
1.................................               0.2                0.0
2.................................               0.3                1.8
3.................................               0.6                5.6
4.................................               1.6                1.6
------------------------------------------------------------------------

    With the exception of TSL 3 for built-in and over-the-range 
combination microwave ovens, all the TSLs in the above tables have 
rebuttable-presumption payback periods of less than 3 years. DOE 
believes that the rebuttable-presumption payback period criterion 
(i.e., a limited payback period) is not sufficient for determining 
economic justification. Therefore, DOE has considered a full range of 
impacts, including those to consumers, manufacturers, the Nation, and 
the environment. Section IV.D provides a complete discussion of how DOE 
considered the range of impacts to select its proposed standards.
2. Economic Impacts on Manufacturers
    For the October 2008 NOPR, DOE used INPV to compare the financial 
impacts of different TSLs on microwave oven manufacturers. 73 FR 62034, 
62096-99 (Oct. 17, 2008). The INPV is the sum of all net cash flows 
discounted by the industry's cost of capital (discount rate). DOE used 
the GRIM to compare the INPV of the base case (no new energy 
conservation standards) to that of each TSL for the microwave oven 
industry. To evaluate the range of cash-flow impacts on the microwave 
oven industry, DOE constructed different scenarios using different 
markups that correspond to the range of anticipated market responses. 
Each scenario results in a unique set of cash flows and corresponding 
industry value at each TSL. These steps allowed DOE to compare the 
potential impacts on the industry as a function of TSLs in the GRIM. 
The difference in INPV between the base case and the standards case is 
an estimate of the economic impacts that implementing that standard 
level would have on the entire industry. For today's supplemental 
notice, DOE continues to use the above methodology and presents the 
results in the subsequent sections. See chapter 12 for additional 
information on MIA methodology and results.
a. Industry Cash-Flow Analysis Results
    To assess the lower end of the range of potential impacts for the 
microwave oven industry, DOE considered the scenario reflecting the 
preservation of gross margin percentage. As production cost increases 
with efficiency, this scenario implies manufacturers will be able to 
maintain gross margins as a percentage of revenues. To assess the 
higher end of the range of potential impacts for the microwave oven 
industry, DOE considered the scenario reflecting preservation of gross 
margin in absolute dollars. Under this scenario, DOE assumed that the 
industry can maintain its gross margin in absolute dollars after the 
compliance date of the energy conservation standard. The industry would 
do so by lowering their gross margin as a percentage of revenue so that 
the gross margin in absolute dollars does not increase above the base-
case gross margin. Table V.7 through Table V.12 show MIA results for 
standby mode and off mode energy conservation standards using both 
markup scenarios described above for microwave oven manufacturers.

                Table V.7--Product Class 1 Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................     1,103.4       1,076.6        1,058.6        1,050.6        1,013.9
Change in INPV................................  2010$ millions..................           -         (26.8)         (44.9)         (52.8)         (89.6)
                                                %...............................           -          (2.4)          (4.1)          (4.8)          (8.1)
Product Conversion Costs......................  2010$ millions..................           -          39.2           70.5           89.1          172.3
Capital Conversion Costs......................  2010$ millions..................           -           3.9            4.3            4.7            7.8
Total Investment Required.....................  2010$ millions..................           -          43.1           74.8           93.8          180.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


           Table V.8--Product Class 1 Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................     1,103.4       1,074.4        1,051.8        1,031.6          939.5
Change in INPV................................  2010$ millions..................           -         (29.0)         (51.7)         (71.9)        (163.9)
                                                %...............................           -          (2.6)          (4.7)          (6.5)         (14.9)
Product Conversion Costs......................  2010$ millions..................           -          39.2           70.5           89.1          172.3
Capital Conversion Costs......................  2010$ millions..................           -           3.9            4.3            4.7            7.8
Total Investment Required.....................  2010$ millions..................           -          43.1           74.8           93.8          180.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


[[Page 8560]]


                Table V.9--Product Class 2 Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................        24.0          23.8           23.7           23.9           23.2
Change in INPV................................  2010$ millions..................           -          (0.3)          (0.4)          (0.1)          (0.9)
                                                %...............................           -          (1.2)          (1.5)          (0.3)          (3.6)
Product Conversion Costs......................  2010$ millions..................           -           0.4            0.7            0.9            1.7
Capital Conversion Costs......................  2010$ millions..................           -           0.0            0.0            0.0            0.1
Total Investment Required *...................  2010$ millions..................           -           0.4            0.8            0.9            1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* The total values may differ from the sum of the product conversion costs and capital conversion costs due to the rounding to one decimal place.


           Table V.10--Product Class 2 Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................        24.0          23.8           23.3           22.3           22.3
Change in INPV................................  2010$ millions..................           -          (0.3)          (0.8)          (1.7)          (1.8)
                                                %...............................           -          (1.2)          (3.1)          (7.1)          (7.3)
Product Conversion Costs......................  2010$ millions..................           -           0.4            0.7            0.9            1.7
Capital Conversion Costs......................  2010$ millions..................           -           0.0            0.0            0.0            0.1
Total Investment Required *...................  2010$ millions..................           -           0.4            0.8            0.9            1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* The total values may differ from the sum of the product conversion costs and capital conversion costs due to the rounding to one decimal place.


      Table V.11--Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario for Product Class 1 and 2 Combined
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................     1,127.5       1,100.4        1,082.2        1,074.5        1,037.0
Change in INPV................................  2010$ millions..................           -         (27.1)         (45.2)         (52.9)         (90.4)
                                                %...............................           -          (2.4)          (4.0)          (4.7)          (8.0)
Product Conversion Costs......................  2010$ millions..................           -          39.6           71.2           90.0          174.0
Capital Conversion Costs......................  2010$ millions..................           -           4.0            4.4            4.7            7.9
Total Investment Required*....................  2010$ millions..................           -          43.5           75.5           94.7          181.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* The total values may differ from the sum of the product conversion costs and capital conversion costs due to the rounding to one decimal place.


 Table V.12--Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario for Product Class 1 and 2 Combined
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Preservation of gross margin percentage markup scenario
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          TSL
                                                              Units                Base case -----------------------------------------------------------
                                                                                                    1              2              3              4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in INPV................................  2010$ millions..................     1,127.5       1,098.2        1,075.0        1,053.9          961.8
Change in INPV................................  2010$ millions..................           -         (29.3)         (52.4)         (73.6)        (165.7)
                                                %...............................           -          (2.6)          (4.6)          (6.5)         (14.7)
Product Conversion Costs......................  2010$ millions..................           -          39.6           71.2           90.0          174.0
Capital Conversion Costs......................  2010$ millions..................           -           4.0            4.4            4.7            7.9
Total Investment Required*....................  2010$ millions..................           -          43.5           75.5           94.7          181.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

[[Page 8561]]

 
* The total values may differ from the sum of the product conversion costs and capital conversion costs due to the rounding to one decimal place.

    TSL 1 represents an improvement in standby power from the baseline 
level of 4.0 W to 2.0 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 3.7 W for Product 
Class 2. At TSL 1, the impact on INPV and cash flow varies depending on 
the manufacturers' ability to pass on increases in MPCs to their 
customers. DOE estimated the impacts in INPV at TSL 1 to range -$27.1 
million to -$29.3 million, or a change in INPV of -2.4 percent to -2.6 
percent. At this level, the industry cash flow decreases by 
approximately 14.0 percent, to $72.3 million, compared to the base-case 
value of $84.2 million in the year leading up to the standards.
    TSL 2 represents an improvement in standby power from the baseline 
level of 4.0 W to 1.5 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 2.7 W for Product 
Class 2. At TSL 2, the impact on INPV and cash flow would be similar to 
TSL 1 and depend on whether manufacturers can fully recover the 
increases in MPCs from their customers. DOE estimated the impacts in 
INPV at TSL 2 to range from -$45.2 million to -$52.4 million, or a 
change in INPV of -4.0 percent to -4.6 percent. At this level, the 
industry cash flow decreases by approximately 24.0 percent, to $64.0 
million, compared to the base-case value of $84.2 million in the year 
leading up to the standards.
    TSL 3 represents an improvement in standby power from the baseline 
level of 4.0 W to 1.0 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 2.2 W for Product 
Class 2. At TSL 3, the impact on INPV and cash flow continues to vary 
depending on the manufacturers and their ability to pass on increases 
in MPCs to their customers. DOE estimated the impacts in INPV at TSL 3 
to range from approximately -$52.9 million to -73.6 million, or a 
change in INPV of -4.7 percent to -6.5 percent. At this level, the 
industry cash flow decreases by approximately 29.9 percent, to $59.0 
million, compared to the base-case value of $84.2 million in the year 
leading up to the standards.
    TSL 4 represents an improvement in standby power from the baseline 
level of 4.0 W to 0.02 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 0.04 W for Product 
Class 2. At TSL 4, DOE estimated the impacts in INPV to range from 
approximately -$90.4 million to -$165.7 million, or a change in INPV of 
-8.0 percent to -14.7 percent. At this level, the industry cash flow 
decreases by approximately 57.3 percent, to $35.9 million, compared to 
the base-case value of $84.2 million in the year leading up to the 
standards. At higher TSLs, manufacturers have a harder time fully 
passing on larger increases in MPCs to their customers. At TSL 4, the 
conversion costs are higher than the other TSLs because the design of 
all microwave platforms must be more significantly altered.
    For new standby mode and off mode energy conservation standards, 
conversion costs increase at higher TSLs as the complexity of further 
lowering standby power increases, substantially driving up engineering 
time and also increasing the testing and product development time. If 
the increased production costs are fully passed on to consumers (the 
preservation of gross margin percentage scenario), the operating 
revenue from higher prices is still not enough to overcome the negative 
impacts from the substantial conversion costs. The incremental costs 
are small for each TSL, meaning the positive impact on cash flows is 
small compared to the conversion costs required to achieve these 
efficiencies. As a result of the small incremental costs and large 
conversion expenses, INPV is negative for all TSLs under the 
preservation of gross margin percentage scenario. If the incremental 
costs are not fully passed along to customers (the preservation of 
gross margin (absolute dollars) scenario), the negative impacts on INPV 
are amplified at each TSL.
b. Employment Impacts
    DOE discussed the domestic employment impacts on the microwave oven 
industry in the October NOPR. DOE concluded that since more than 95 
percent of microwave ovens are already imported and the employment 
impacts in the GRIM are small, the actual impacts on domestic 
employment would depend on whether any U.S. manufacturer decided to 
shift remaining U.S. production to lower-cost countries. 73 FR 62034, 
62101-02 (Oct. 17, 2008).
c. Impacts on Manufacturing Capacity
    As stated in the NOPR, minor tooling changes would be necessary at 
all TSLs for standby mode and off mode standards. For all standby power 
levels, the most significant conversion costs are the research and 
development, testing, and certification of products with more-efficient 
components, which does not affect production line capacity. Thus, DOE 
believes manufacturers will be able to maintain manufacturing capacity 
levels and continue to meet market demand under new energy conservation 
standards. 73 FR 62034, 62103 (Oct. 17, 2008).
d. Impacts on Subgroups of Manufacturers
    DOE used the results of the industry characterization to group 
manufacturers exhibiting similar characteristics. However, DOE did not 
identify any manufacturer subgroups for microwave ovens that would 
justify a separate manufacturer subgroup.
e. Cumulative Regulatory Burden
    During previous stages of this rulemaking DOE identified a number 
of requirements with which manufacturers of these microwave ovens must 
comply and which take effect within 3 years of the anticipated 
compliance date of the proposed new standards. DOE discusses these and 
other requirements, and includes the full details of the cumulative 
regulatory burden, in chapter 12 of the SNOPR TSD.
3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings through 2043 attributable to 
potential standards for microwave oven standby mode and off mode, DOE 
compared the energy consumption of those products under the base case 
to their energy consumption under each TSL. Table V.13 presents the 
forecasted NES for each TSL for microwave oven standby mode and off 
mode. The savings were calculated using the approach described in 
section IV.E.

[[Page 8562]]



 Table V.13--Cumulative National Energy Savings for Microwave Oven Standby Mode and Off Mode Power in 2014-2043
----------------------------------------------------------------------------------------------------------------
                                                                  Microwave-only     Built-in and
                                                                     ovens and      over-the-range
                              TSL                                   countertop        combination      Total *
                                                                    combination     microwave ovens    (quads)
                                                                  ovens  (quads)        (quads)
----------------------------------------------------------------------------------------------------------------
 
1..............................................................              0.21              0.00         0.21
2..............................................................              0.30              0.00         0.30
3..............................................................             0.41*             0.01*         0.41
4..............................................................              0.62              0.01         0.63
----------------------------------------------------------------------------------------------------------------
* The total values may differ from the sum of the product class sub-totals due to the rounding to two decimal
  places.

    Chapter 10 of the SNOPR TSD provides additional details on the NES 
values reported in Table V.13, and also presents tables that show the 
magnitude of the energy savings discounted at rates of 3 percent and 7 
percent. Discounted energy savings represent a policy perspective in 
which energy savings realized farther in the future are less 
significant than energy savings realized in the nearer term.
b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV to the Nation of the total costs 
and savings for consumers that would result from particular standard 
levels for microwave oven standby mode and off mode. In accordance with 
the OMB's guidelines on regulatory analysis,\28\ DOE calculated NPV 
using both a 7-percent and a 3-percent real discount rate. The 7-
percent rate is an estimate of the average before-tax rate of return on 
private capital in the U.S. economy, and reflects the returns on real 
estate and small business capital as well as corporate capital. DOE 
used this discount rate to approximate the opportunity cost of capital 
in the private sector, because recent OMB analysis has found the 
average rate of return on capital to be near this rate. DOE used the 3-
percent rate to capture the potential effects of standards on private 
consumption (e.g., through higher prices for products and reduced 
purchases of energy). This rate represents the rate at which society 
discounts future consumption flows to their present value. This rate 
can be approximated by the real rate of return on long-term government 
debt (i.e., yield on Treasury notes minus annual rate of change in the 
Consumer Price Index), which has averaged about 3 percent on a pre-tax 
basis for the past 30 years.
---------------------------------------------------------------------------

    \28\ OMB Circular A-4, section E (Sept. 17, 2003). Available at: 
https://www.whitehouse.gov/omb/circulars_a004_a-4. (Last accessed 
March 18, 2011.)
---------------------------------------------------------------------------

    Table V.14 shows the consumer NPV results for each TSL DOE 
considered for both product classes of microwave ovens, using both a 7-
percent and a 3-percent discount rate. In each case, the impacts, i.e., 
discounted operating cost savings and discounted incremental equipment 
costs, cover the lifetime of products purchased in 2014-2043. For 
Product Class 1 (microwave-only and countertop combination microwave 
ovens), the benefit-to-cost ratio is greater than or equal to nine for 
TSLs 1, 2, and 3 and greater than three for TSL 4, irrespective of 
discount rate. For Product Class 2 (built-in and over-the-range 
combination microwave ovens), TSLs 2 and 4 have benefit-to-cost ratios 
of approximately five, irrespective of discount rate, while TSL 1, 
which incurs no additional cost relative to the baseline, has a 
limitless benefit-to-cost ratio. At TSL3, the benefits are 30 percent 
and 50 percent greater than the costs at discount rates of 7-percent 
and 3-percent, respectively. See chapter 10 of the SNOPR TSD for more 
detailed NPV results.

 Table V.14--Cumulative Net present Value of Consumer Benefits for Microwave Oven Standby Mode and Off Mode for
                                              Units Sold 2014-2043
----------------------------------------------------------------------------------------------------------------
                                                             Net present value (billion 2010$)
                                         -----------------------------------------------------------------------
                                           Microwave-only ovens   Built-in and over-the-          Total*
                                              and countertop         range combination   -----------------------
                                           combination microwave      microwave ovens
                   TSL                             ovens         ------------------------
                                         ------------------------                             7%          3%
                                              7%          3%          7%          3%       Discount    Discount
                                           Discount    Discount    Discount    Discount      rate        rate
                                             rate        rate        rate        rate
----------------------------------------------------------------------------------------------------------------
1.......................................        1.01        1.97        0.01        0.02        1.02        1.98
2.......................................        1.41        2.75        0.02        0.03        1.42        2.78
3.......................................        1.81        3.58        0.01        0.02        1.82        3.59
4.......................................        2.21        4.53        0.04        0.08        2.25        4.60
----------------------------------------------------------------------------------------------------------------
* The total values may differ from the sum of the product class sub-totals due to the rounding to two decimal
  places.

    The NPV results presented in Table V.14 are based on a learning 
rate of 28.9 percent, which is referred to as the ``default'' learning 
rate. DOE investigated the impact of different learning rates for 
product prices for the TSLs considered for microwave oven standby mode 
and off mode. DOE considered four learning rate sensitivities: (1) A 
``high learning'' rate (37.0 percent); (2) a ``low learning'' rate 
(19.2 percent); (3) a ``no learning'' rate

[[Page 8563]]

(constant real prices); and (4) a ``microwave oven only'' rate. The 
``microwave oven only'' is based on limited set of historical price 
data specifically for microwave ovens. DOE also analyzed a sensitivity 
based on the ``chained price index--other consumer durable goods except 
ophthalmic'' that was forecasted for use in AEO2010. This index is the 
most disaggregated category that includes appliances. Refer to appendix 
8-E of the SNOPR TSD for details on the development of the above 
learning sensitivities.
    Table V.15 provides the annualized NPV of consumer benefits at a 3-
percent discount rate, combined with the annualized present value of 
monetized benefits from CO2 and NOX emissions 
reductions, for each of the TSLs for the ``default'' learning rate and 
the sensitivity cases. Table V.16 provides the annualized NPVs using a 
7-percent discount rate for consumer NPV. Section V.B.6 provides a 
complete description and summary of the monetized benefits from 
CO2 and NOX emissions reductions. For most of the 
TSLs, the difference between the default results and the sensitivities 
is insignificant.

   Table V.15--Microwave Oven Standby Mode and Off Mode: Annualized Net Present Value of Consumer Benefits (3
 Percent Discount Rate) and Annualized Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions
                                       for Products Shipped in 2014-2043*
----------------------------------------------------------------------------------------------------------------
                                                                                No
                                                                             learning                  AEO2010
                                    Default  LR      Low          High       LR = 0%     Microwave     chained
       Trial standard level            =28.9%      learning     learning    (constant    ovens only     price
                                                  LR =19.2%    LR =37.0%       real      LR = 39.6%     index
                                                                             prices)                   forecast
----------------------------------------------------------------------------------------------------------------
                                                                    Billion 2010$
----------------------------------------------------------------------------------------------------------------
1.................................         0.12         0.12         0.12         0.12         0.12         0.12
2.................................         0.17         0.17         0.17         0.17         0.17         0.17
3.................................         0.22         0.22         0.22         0.22         0.22         0.22
4.................................         0.29         0.29         0.30         0.27         0.30         0.30
----------------------------------------------------------------------------------------------------------------
* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.3/metric ton in 2010
  (in 2010$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic benefits from reduced
  NOX emissions were calculated using a value of $2,537/ton (in 2010$), which is the average of the low and high
  values used in DOE's analysis, and a 3-percent discount rate. Because the discounted equipment cost increases
  at each TSL are very small relative to the discounted operating cost savings and the discounted monetized
  benefits of the emission reductions, the NPV as a function of learning rate does not change appreciably. In
  fact, the learning rate has a significant effect only on the NPV for TSL 4 where discounted equipment cost
  increases are relatively more significant.


   Table V.16--Microwave Oven Standby Mode and Off Mode: Annualized Net Present Value of Consumer Benefits (7
 Percent Discount Rate) and Annualized Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions
                                       for Products Shipped in 2014-2043*
----------------------------------------------------------------------------------------------------------------
                                                                           No learning
                                                     Low          High       LR = 0%    Sensitivity    AEO2010
       Trial standard level          Default LR  learning LR  learning LR   (constant    (microwave    chained
                                       =28.9%       =19.2%       =37.0%        real     ovens only)  price index
                                                                             prices)     LR = 39.6%    forecast
----------------------------------------------------------------------------------------------------------------
                                                                    Billion 2010$
----------------------------------------------------------------------------------------------------------------
1.................................         0.10         0.10         0.10         0.10         0.10         0.10
2.................................         0.14         0.14         0.14         0.14         0.14         0.14
3.................................         0.18         0.18         0.18         0.18         0.19         0.18
4.................................         0.24         0.23         0.24         0.22         0.25         0.24
----------------------------------------------------------------------------------------------------------------
* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.3/metric ton in 2010
  (in 2010$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic benefits from reduced
  NOX emissions were calculated using a value of $2,537/ton (in 2010$), which is the average of the low and high
  values used in DOE's analysis, and a 7-percent discount rate. Because the discounted equipment cost increases
  at each TSL are very small relative to the discounted operating cost savings and the discounted monetized
  benefits of the emission reductions, the NPV as a function of learning rate does not change appreciably. In
  fact, the learning rate has a significant effect only on the NPV for TSL 4 where discounted equipment cost
  increases are relatively more significant.

c. Indirect Impacts on Employment
    DOE develops estimates of the indirect employment impacts of 
proposed standards on the economy in general. As discussed above, DOE 
expects energy conservation standards for microwave ovens to reduce 
energy bills for consumers of those products, and the resulting net 
savings to be redirected to other forms of economic activity. Those 
shifts in spending and economic activity could affect the demand for 
labor. As described in section IV.H, to estimate those effects, DOE 
used an input/output model of the U.S. economy. DOE estimated the 
indirect employment impacts for the TSLs for both product classes of 
microwave ovens that DOE considered in this rulemaking. DOE understands 
that there are uncertainties involved in projecting employment impacts, 
especially changes in the later years of the analysis. Therefore, DOE 
generated results for intermediate timeframes, such as 2015, where 
these uncertainties are reduced.
    The results suggest the proposed standards are likely to have 
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 13 of the SNOPR TSD presents the detailed results.

[[Page 8564]]

4. Impact on Utility or Performance of Product
    For the reasons stated in section III.D.1.d, DOE believes that for 
purposes of 42 U.S.C. 6295(o)(2)(B)(i)(IV), the standby power level 
considered in this supplemental notice does not reduce the utility or 
performance of the microwave oven products under consideration in this 
rulemaking.
5. Impact of Any Lessening of Competition
    In weighing the promulgation of any proposed standards, DOE is 
required to consider any lessening of competition that is likely to 
result from the adoption of those standards. The determination of the 
likely competitive impacts stemming from a proposed standard is made by 
the Attorney General, who transmits this determination, along with an 
analysis of the nature and extent of the impact, to the Secretary of 
Energy. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and (B)(ii))
    The Attorney General's determination for the October 2008 NOPR 
included cooking products but did not mention microwave oven standards. 
(DOJ, No. 53 at pp. 1-2). To assist the Attorney General in making such 
a determination for the proposed standby mode and off mode standards, 
DOE has provided the Attorney General with copies of this notice and 
the TSD for review. DOE will consider the Attorney General's opinion on 
the proposed rule in preparing the final rule.
6. Need of the Nation To Conserve Energy
    Improving the energy consumption of microwave oven standby mode and 
off mode, where economically justified, would likely improve the 
security of the Nation's energy system by reducing overall demand for 
energy. Reduced electricity demand may also improve the reliability of 
the electricity system. As a measure of this reduced demand, Table V.17 
presents the estimated reduction in national generating capacity for 
the TSLs that DOE considered in this rulemaking.

  Table V.1717--Reduction in National Installed Electricity Generation
 Capacity Under Microwave Oven Standby Mode and Off Mode Trial Standard
                                 Levels
------------------------------------------------------------------------
                                                          Gigawatts
                        TSL                        ---------------------
                                                       2030       2043
------------------------------------------------------------------------
1.................................................      0.190      0.196
2.................................................      0.274      0.284
3.................................................      0.377      0.390
4.................................................      0.581      0.601
------------------------------------------------------------------------

    Energy savings from more stringent microwave oven standby mode and 
off mode standards would also produce environmental benefits in the 
form of reduced emissions of air pollutants and greenhouse gases 
associated with electricity production. Table V.18 provides DOE's 
estimate of cumulative CO2 and NOX emissions 
reductions that would result from the TSLs considered in this 
rulemaking. (Hg emission impacts are negligible and therefore not 
reported here.) In the environmental assessment (chapter 15 of the 
SNOPR TSD), DOE reports estimated annual changes in CO2, 
NOX, and Hg emissions attributable to each TSL.

Table V.18--Cumulative Emissions Reductions Under Microwave Oven Standby Mode and Off Mode Trial Standard Levels
                                                  in 2014-2043
----------------------------------------------------------------------------------------------------------------
                                                                                      TSL
                                                             ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
 
CO2 (Mt)....................................................        15.84        22.88        31.48        48.46
NOX (1,000 tons)............................................        12.88        18.61        25.60        39.42
----------------------------------------------------------------------------------------------------------------
Mt = million metric tons. Values for NOX emissions reductions refer to short tons.

    As discussed in section IV.J of this supplemental notice, DOE has 
not reported SO2 emissions reductions from power plants 
because there is uncertainty about the effect of energy conservation 
standards on the overall level of SO2 emissions in the 
United States due to SO2 emissions caps. DOE also did not 
include NOX emissions reduction from power plants in States 
subject to CAIR because an energy conservation standard would not 
affect the overall level of NOX emissions in those States 
due to the emissions caps mandated by CAIR.
    DOE also estimated monetary benefits likely to result from the 
reduced emissions of CO2 and NOX that DOE 
estimated for each of the TSLs considered for microwave oven standby 
mode and off mode. In order to make this calculation similar to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
2014-2043. Thus, the emissions reductions extend past 2043.
    As discussed in section IV.K, DOE used values for the SCC developed 
by an interagency process. The four values for CO2 emissions 
reductions resulting from that process (expressed in 2010$) are $4.9/
ton (the average value from a distribution that uses a 5-percent 
discount rate), $22.3/ton (the average value from a distribution that 
uses a 3-percent discount rate), $36.5/ton (the average value from a 
distribution that uses a 2.5-percent discount rate), and $67.6/ton (the 
95th-percentile value from a distribution that uses a 3-percent 
discount rate). These values correspond to the value of emission 
reductions in 2010; the values for later years are higher due to 
increasing damages as the magnitude of climate change increases. For 
each of the four cases, DOE calculated a present value of the stream of 
annual values using the same discount rate as was used in the studies 
upon which the dollar-per-ton values are based. Table V.19 presents the 
global values of CO2 emissions reductions at each TSL. DOE 
calculated domestic values as a range from 7 percent to 23 percent of 
the global values, and these results are presented in chapter 16 of the 
SNOPR TSD.

[[Page 8565]]



  Table V.19--Estimates of Present Value of CO2 Emissions Reductions Under Microwave Oven Standby Mode and Off
                            Mode Trial Standard Levels for Products Sold in 2014-2043
----------------------------------------------------------------------------------------------------------------
                                                                           Million 2010$
                                                 ---------------------------------------------------------------
                       TSL                                                                          3% discount
                                                    5% discount     3% discount    2.5% discount    rate, 95th
                                                  rate, average*  rate, average*  rate, average*    percentile*
----------------------------------------------------------------------------------------------------------------
1...............................................             $70            $349            $589          $1,066
2...............................................             101             505             851           1,539
3...............................................             139             694           1,170           2,118
4...............................................             213           1,069           1,801           3,259
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
  from a different part of the distribution.

    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 
world economy continues to evolve rapidly. Thus, any value placed in 
this rulemaking on reducing CO2 emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO2 and other GHG emissions. This ongoing 
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. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this proposed rule the 
most recent values resulting from the ongoing interagency review 
process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emissions reductions 
anticipated to result from new standby mode and off mode standards for 
microwave ovens. The dollar-per-ton values that DOE used are discussed 
in section IV.K. Table V.20 presents the cumulative present values for 
each TSL calculated using 7-percent and 3-percent discount rates.

Table V.20--Estimates of Present Value of NOX Emissions Reductions Under
   Microwave Oven Standby Mode and Off Mode Trial Standard Levels for
                       Products Sold in 2014-2043
------------------------------------------------------------------------
                                 3% discount rate      7% discount rate
             TSL                   Million 2010$        Million 2010$
------------------------------------------------------------------------
1............................  3.74 to 38.46.......  1.92 to 19.76
2............................  5.41 to 55.56.......  2.78 to 28.55
3............................  7.44 to 76.44.......  3.82 to 39.28
4............................  11.45 to 117.7......  5.89 to 60.5
------------------------------------------------------------------------

    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the consumer 
savings calculated for each TSL considered in this rulemaking. Table 
V.21 and Table V.22 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced 
CO2 and NOX emissions in each of four valuation 
scenarios to the NPV of consumer savings calculated for each TSL 
considered in this rulemaking, at both a 7-percent and 3-percent 
discount rate. The CO2 values used in the columns of each 
table correspond to the four scenarios for the valuation of 
CO2 emission reductions presented in section IV.K.

 Table V.21--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
 Value of Monetized Benefits from CO2 and NOX Emissions Reductions for Microwave Oven Standby Mode and Off Mode
----------------------------------------------------------------------------------------------------------------
                                                           Consumer NPV at 7% discount rate added with:
                                                 ---------------------------------------------------------------
                                                   SCC Value of    SCC Value of    SCC Value of    SCC Value of
                                                    $4.9/metric    $22.3/metric    $36.5/metric    $67.6/metric
                       TSL                         ton CO2* and    ton CO2* and    ton CO2* and    ton CO2* and
                                                   low value for   medium value    medium value   high value for
                                                   NOX** billion     for NOX**       for NOX**     NOX** billion
                                                       2010$       billion 2010$   billion 2010$       2010$
----------------------------------------------------------------------------------------------------------------
1...............................................            1.09            1.38            1.62            2.10
2...............................................            1.52            1.94            2.29            2.99
3...............................................            1.96            2.53            3.01            3.98
4...............................................            2.47            3.35            4.08            5.57
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2010$. The present values have been calculated with
  scenario-consistent discount rates.

[[Page 8566]]

 
** Low value corresponds to $450 per ton of NOX emissions. Medium value corresponds to $2,537 per ton of NOX
  emissions. High Value corresponds to $4,623 per ton of NOX emissions.


 Table V.22--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
 Value of Monetized Benefits from CO2 and NOX Emissions Reductions for Microwave Oven Standby Mode and Off Mode
----------------------------------------------------------------------------------------------------------------
                                                           Consumer NPV at 7% discount rate added with:
                                                 ---------------------------------------------------------------
                                                   SCC Value of    SCC Value of    SCC Value of    SCC Value of
                                                    $4.9/metric    $22.3/metric    $36.5/metric    $67.6/metric
                       TSL                         ton CO2* and    ton CO2* and    ton CO2* and    ton CO2* and
                                                   low value for   medium value    medium value   high value for
                                                   NOX** billion     for NOX**       for NOX**     NOX** billion
                                                       2010$       billion 2010$   billion 2010$       2010$
----------------------------------------------------------------------------------------------------------------
1...............................................            2.06            2.35            2.59            3.09
2...............................................            2.89            3.31            3.66            4.37
3...............................................            3.74            4.33            4.81            5.79
4...............................................            4.83            5.74            6.47            7.98
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2010$. The present values have been calculated with
  scenario-consistent discount rates.
** Low value corresponds to $450 per ton of NOX emissions. Medium value corresponds to $2,537 per ton of NOX
  emissions. High Value corresponds to $4,623 per ton of NOX emissions.

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC 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 2014-2043. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one ton of 
CO2 in each year. These impacts continue well beyond 2100.
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)(VI))) DOE 
has not considered other factors in development of the proposed 
standards in this SNOPR.

C. Proposed Standard

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product shall 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 
to the greatest extent practicable, in light of the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or 
amended standard must also ``result in significant conservation of 
energy.'' (42 U.S.C. 6295(o)(3)(B))
    For today's SNOPR, DOE considered the impacts of standards 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 in understanding the benefits and/or burdens of 
each TSL, Table V.24 summarizes the quantitative analytical results for 
each TSL, based on the assumptions and methodology discussed herein. In 
addition to the quantitative results presented in the table, DOE also 
considers other burdens and benefits that affect economic 
justification. These include the impacts on identifiable subgroups of 
consumers, such as low-income households and seniors, who may be 
disproportionately affected by a national standard. Section V.B.1 
presents the estimated impacts of each TSL for these subgroups.
    In addition to the quantitative results, DOE also considered 
harmonization of microwave oven standby mode and off mode standards 
with international standby power programs such as Korea's e-standby 
program,\29\ Australia's standby program,\30\ and Japan's Top Runner 
Program.\31\ Those programs seek to establish standby power ratings 
through the International Energy Agency's (IEA) 1-Watt Program, which 
seeks to lower standby power below 1 W for microwave ovens.\32\ Korea 
published a mandatory standby power standard of 1 W that became 
effective in 2010 and Australia will publish mandatory standby power 
standards of 1 W by 2012. In accordance with Japan's Top Runner 
Program, Japanese appliance manufacturers made a voluntary declaration 
to reduce standby power of microwave ovens that lack a timer to as 
close to zero as possible and that of microwave ovens that have a timer 
to 1 W or lower.
---------------------------------------------------------------------------

    \29\ Refer to: https://www.kemco.or.kr/new_eng/pg02/pg02100300.asp. (Last accessed March 18, 2011.)
    \30\ Refer to: https://www.energyrating.gov.au/standby.html. 
(Last accessed March 18, 2011.)
    \31\ Refer to: https://www.eccj.or.jp/top_runner/. 
(Last accessed March 18, 2011.)
    \32\ IEA Energy Information Centre. Standby Power Use and the 
IEA ``1-Watt Plan.'' Available at: https://www.iea.org/subjectqueries/standby.asp. (Last accessed March 18, 2011.)
---------------------------------------------------------------------------

    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. This undervaluation suggests that 
regulation that promotes energy efficiency can produce significant net 
private gains (as well as producing social gains by, for example, 
reducing pollution). There is evidence that consumers undervalue future

[[Page 8567]]

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 (for 
example, an inefficient ventilation fan in a new building or the 
delayed replacement of a water pump); (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 (that is, renter 
versus owner; builder vs. purchaser). Other literature indicates that 
with 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.
    In its 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: (1) If consumers forego a purchase 
of a product in the standards case, this decreases sales for product 
manufacturers and the cost to manufacturers is included in the MIA, and 
(2) DOE accounts for energy savings attributable only to products 
actually used by consumers in the standards case; if a regulatory 
option decreases the number of products used by consumers, this 
decreases the potential energy savings from an energy conservation 
standard. DOE provides detailed estimates of shipments and changes in 
the volume of product purchases in chapter 9 of the SNOPR TSD.
    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 seeks comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings.
1. Benefits and Burdens of TSLs Considered for Microwave Ovens
    Table V.23 summarizes the quantitative impacts estimated for each 
TSL for microwave ovens. The efficiency levels contained in each TSL 
are described in section V.A.

                    Table V.23--Summary of Results for Trial Standard Levels for Microwave Oven Standby Mode and Off Mode Energy Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Category                          TSL 1                         TSL 2                         TSL 3                        TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings (quads)..  0.21........................  0.30........................  0.41........................  0.63
NPV of Consumer Benefits (2010$
 billion)
    7% discount rate.............  1.02........................  1.42........................  1.82........................  2.25
    3% discount rate.............  1.98........................  2.78........................  3.59........................  4.60
Manufacturer Impacts
    Industry NPV (2010$ million).  (27.1) to (29.3)............  (45.2) to (52.4)............  (52.9) to (73.6)............  (90.4) to (165.7)
    Industry NPV (% change)......  (2.4) to (2.6)..............  (4.0) to (4.6)..............  (4.7) to (6.5)..............  (8.0) to (14.7)
Cumulative Emissions Reduction
CO2 (Mt).........................  15.84.......................  22.88.......................  31.48.......................  48.46
NOX (thousand tons)..............  12.88.......................  18.61.......................  25.60.......................  39.42
Value of Emissions Reductions
    CO2 (2010$ million)*.........  70 to 1,066.................  101 to 1,539................  139 to 2,118................  213 to 3,259
    NOX--3% discount rate (2010$   3.74 to 38.5................  5.41 to 55.6................  7.44 to 76.4................  11.5 to 118
     million).
    NOX--7% discount rate (2010$   1.92 to 19.8................  2.78 to 28.6................  3.82 to 39.3................  5.89 to 60.5
     million).
Consumer Mean LCC Savings (2010$)
    Product Class 1..............  7...........................  10..........................  13..........................  15
    Product Class 2..............  6...........................  11..........................  4...........................  27
Consumer Median PBP (years)
    Product Class 1..............  0.2.........................  0.4.........................  1.1.........................  2.4
    Product Class 2..............  0.0.........................  1.9.........................  6.3.........................  1.8
Distribution of Consumer LCC
 Impacts
    Product Class 1
        Net Cost (%).............  0...........................  0...........................  0...........................  0
        No Impact (%)............  54..........................  19..........................  0...........................  0
        Net Benefit (%)..........  46..........................  81..........................  100.........................  100
    Product Class 2
        Net Cost (%).............  0...........................  0...........................  21..........................  0
        No Impact (%)............  0...........................  0...........................  0...........................  0
        Net Benefit (%)..........  100.........................  100.........................  79..........................  100
Reduction in Generation Capacity   0.196.......................  0.284.......................  0.390.......................  0.601
 in 2043 (GW).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values. For NPVs, a negative value means a decrease in NPV.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.

    First, DOE considered TSL 4, the max-tech level for microwave oven 
standby mode and off mode energy use. TSL 4 likely would save 0.63 
quads of energy through 2043, an amount DOE considers significant. 
Under TSL 4, the estimated NPV of consumer benefit is $2.25 billion, 
using a discount rate of 7 percent, and $4.60 billion, using a discount 
rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 48.46 Mt of 
CO2 and 39.42 thousand tons of NOX, with a 
negligible impact on Hg emissions. The estimated monetary value of the 
CO2 emissions reductions at TSL 4 ranges from $213 million 
to $3,259 million. Total generating capacity in 2043 is estimated to 
decrease by 0.601 GW.
    DOE projects that at TSL 4 for microwave-only ovens and countertop 
combination microwave ovens (Product Class 1), the average microwave 
oven consumer would experience a decrease in LCC of $15. DOE also 
estimates that all consumers who purchase these

[[Page 8568]]

microwave ovens would realize some LCC savings. The median payback 
period at TSL 4 is projected to be 2.4 years, substantially shorter 
than the lifetime of the product. DOE projects that at TSL 4 for built-
in and over-the-range combination microwave ovens (Product Class 2), 
the average microwave oven consumer would experience a decrease in LCC 
of $27, and all consumers who purchase these microwave ovens would 
realize some LCC savings. The median payback period at TSL 4 is 
projected to be 1.8 years, substantially shorter than the lifetime of 
the product.
    Although DOE estimates that all microwave oven consumers would 
benefit economically from TSL 4, the reduction in standby power 
consumption at TSL 4 would result in the loss of certain functions that 
provide utility to consumers, specifically the continuous clock 
display. Because it is uncertain how greatly consumers value this 
function, DOE is concerned that TSL 4 may result in significant loss of 
consumer utility.
    For manufacturers of microwave ovens, DOE estimated a decrease in 
INPV that ranges from $90.4 million to $165.7 million. DOE recognizes 
that TSL 4 poses the risk of large negative impacts if manufacturers' 
expectations about reduced profit margins are realized. In particular, 
if the high end of the range of impacts is reached, as DOE expects, TSL 
4 could result in a net loss of 14.7 percent in INPV to microwave oven 
manufacturers.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 4, the Secretary has reached the following initial 
conclusion: At TSL 4, the benefits of energy savings, NPV of consumer 
benefit, positive consumer LCC impacts, and emissions reductions would 
be outweighed by the potential burden on consumers from loss of product 
utility and the large capital conversion costs that could result in a 
reduction in INPV for manufacturers.
    DOE then considered TSL 3. Primary energy savings are estimated to 
be 0.41 quads of energy through 2043, which DOE considers significant. 
Under TSL 3, the estimated NPV of consumer benefit is $1.82 billion, 
using a discount rate of 7 percent, and $3.59 billion, using a discount 
rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 31.48 Mt of 
CO2 and 25.60 thousand tons of NOX, with a 
negligible impact on Hg emissions. The estimated monetary value of the 
CO2 emissions reductions at TSL 3 ranges from $139 million 
to $2,118 million. Total generating capacity in 2043 under TSL 3 is 
estimated to decrease by 0.390 GW.
    For microwave-only ovens and countertop combination microwave 
ovens, DOE projects that at TSL 3 the average consumer would experience 
a decrease in LCC of $13, and all consumers who purchase these 
microwave ovens would realize some LCC savings. At TSL 3 the median 
payback period is projected to be 1.1 years, substantially shorter than 
the lifetime of the product. In addition, DOE estimates that the 
reduction in standby power consumption under TSL 3 (to no greater than 
1.0 W) would not impact consumer utility. The continuous clock display 
that would be lost under TSL 4 would be retained at TSL 3.
    For built-in and combination microwave ovens, DOE projects that at 
TSL 3 the average consumer would experience a decrease in LCC of $4, 
and 79 percent of consumers who purchase these microwave ovens would 
realize some LCC savings. At TSL 3 the median payback period is 
projected to be 6.3 years, shorter than the lifetime of the product.
    For manufacturers of microwave ovens, DOE estimated that the 
projected decrease in INPV under TSL 3 would range from $52.9 million 
to $73.6 million. DOE recognizes the risk of large negative impacts at 
TSL 3 if manufacturers' expectations about reduced profit margins are 
realized. In particular, if the high end of the range of impacts is 
reached, as DOE expects, TSL 3 could result in a net loss of 6.5 
percent in INPV to microwave oven manufacturers.
    After considering the analysis and weighing the benefits and the 
burdens, DOE has tentatively concluded that the benefits of energy 
savings, NPV of consumer benefit, positive consumer LCC impacts, and 
emissions reductions would outweigh the capital conversion costs that 
could result in a reduction in INPV for manufacturers. In particular, 
the Secretary has concluded that TSL 3 would save a significant amount 
of energy and is technologically feasible and economically justified. 
Therefore, DOE today proposes to adopt the energy conservation 
standards for microwave oven standby mode and off mode at TSL 3. Table 
V.23 presents the proposed standby mode and off mode energy 
conservation standards for microwave ovens.

  Table V.23--Proposed Energy Conservation Standards for Microwave Oven
                          Standby and Off Mode
------------------------------------------------------------------------
                                           Proposed energy conservation
            Product classes                          standard
------------------------------------------------------------------------
Microwave-Only Ovens and Countertop      Maximum Standby Power = 1.0
 Combination Microwave Ovens.             watt.
Built-In and Over-the-Range Combination  Maximum Standby Power = 2.2
 Microwave Ovens.                         watts.
------------------------------------------------------------------------

2. Summary of Benefits and Costs (Annualized) of the Proposed Standards
    The benefits and costs of today's proposed standards 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 
2010$, of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in equipment purchase costs, which is 
another way of representing consumer NPV), and (2) the monetary value 
of the benefits of emission reductions, including CO2 
emission reductions.\33\ The value of the CO2 reductions is 
calculated using a range of values per metric ton of CO2 
developed by a recent interagency process. The monetary costs and 
benefits of cumulative emissions reductions are reported in 2010$ to 
permit comparisons with the other costs and benefits in the same dollar 
units.
---------------------------------------------------------------------------

    \33\ 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 3 and 7 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 V.26. From the present value, DOE then calculated the 
fixed annual payment over a 30-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 reductions provides a useful perspective, two issues 
should be considered. First, the national operating savings are 
domestic

[[Page 8569]]

U.S. consumer monetary savings that occur as a result of market 
transactions while the value of CO2 reductions is based on a 
global value. Second, the assessments of operating cost savings and SCC 
are performed with different methods that use different time frames for 
analysis. The national operating cost savings is measured for the 
lifetime of products shipped in 2014-2043. The SCC values, on the other 
hand, reflect the present value of future climate-related impacts 
resulting from the emission of one ton of CO2 in each year. 
These impacts continue well beyond 2100.
    Table V.24 shows the annualized values for the proposed standards 
for microwave oven standby mode and off mode energy use. The results 
for the primary estimate are as follows. Using a 7-percent discount 
rate for benefits and costs other than CO2 reductions, for 
which DOE used a 3-percent discount rate along with the SCC series 
corresponding to a value of $22.3/ton in 2010, the cost of the 
standards proposed in today's rule is $20.3 million per year in 
increased product costs, while the annualized benefits are $167 million 
in reduced product operating costs, $35.4 million in CO2 
reductions, and $1.74 million in reduced NOX emissions. In 
this case, the net benefit amounts to $184 million per year. Using a 3-
percent discount rate for all benefits and costs and the SCC series 
corresponding to a value of $22.3/ton in 2010, the cost of the 
standards proposed in today's rule is $21.6 million per year in 
increased product costs, while the annualized benefits are $205 million 
in reduced operating costs, $35.4 million in CO2 reductions, 
and $2.14 million in reduced NOX emissions. In this case, 
the net benefit amounts to $221 million per year.

                      Table V.24--Annualized Benefits and Costs of Proposed Standards (TSL 3) for Microwave Ovens Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Monetized (million 2010$/year)
             Benefits                      Discount rate        ----------------------------------------------------------------------------------------
                                                                      Primary estimate\*\        Low benefits estimate\*\     High benefits estimate\*\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings...........  7%..........................  167.........................  150.........................  185
                                   3%..........................  205.........................  182.........................  229
CO2 Reduction at $4.9/t **.......  5%..........................  9.02........................  8.49........................  9.55
CO2 Reduction at $22.3/t **......  3%..........................  35.4........................  33.3........................  37.6
CO2 Reduction at $36.5/t **......  2.5%........................  55.9........................  52.5........................  59.3
CO2 Reduction at $67.6/t **......  3%..........................  108.0.......................  101.5.......................  114.6
NOX Reduction at $2,537/t **.....  7%..........................  1.74........................  1.65........................  1.82
                                   3%..........................  2.14........................  2.02........................  2.26
Total[dagger]....................  7% plus CO2 range...........  178 to 277..................  160 to 253..................  196 to 301
                                   7%..........................  204.........................  185.........................  224
                                   3%..........................  243.........................  217.........................  269
                                   3% plus CO2 range...........  216 to 315..................  193 to 286..................  241 to 346
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs........  7%..........................  20.32.......................  23.39.......................  20.25
                                   3%..........................  21.59.......................  25.48.......................  21.48
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total[dagger]....................  7% plus CO2 range...........  157 to 256..................  137 to 230..................  176 to 281
                                   7%..........................  184.........................  162.........................  204
                                   3%..........................  221.........................  192.........................  247
                                   3% plus CO2 range...........  195 to 294..................  167 to 260..................  219 to 324
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Primary, Benefits, and High Benefits Estimates utilize forecasts of energy prices and housing starts from the AEO 2010 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 CO2 values represent global values (in 2010$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.3, and
  $36.5 per ton are the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.6 per ton
  represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The value for NOX (in 2010$) is the average of the low and
  high values used in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount rate, which is $22.3/ton in 2010 (in
  2010$). 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.

VI. Additional Technical Corrections to 10 CFR 430.32

    In today's SNOPR, DOE is also proposing the following technical 
corrections to the language contained in 10 CFR 430.32. DOE notes that 
the title of 10 CFR 430.32, ``Energy and water conservation standards 
and their effective dates'' contains dates required for compliance with 
energy and water conservation standards rather than the effective dates 
of such standards. As a result, DOE is proposing to revise the title of 
10 CFR 430.32 to read ``Energy and water conservation standards and 
their compliance dates.'' DOE also notes that the current energy 
conservation standards for cooking products found at 10 CFR 
430.32(j)(1)-(2) should be revised to more accurately reflect the date 
required for compliance with energy conservation standards. DOE is 
proposing to revise the language in 10 CFR 430.32(j)(1)-(2) to state 
that products manufactured on or after the compliance date must meet 
the required energy conservation standard.

[[Page 8570]]

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's proposed standards address are as follows:
    (1) There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in the home 
appliance market.
    (2) There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information and effecting exchanges of goods 
and services).
    (3) There are external benefits resulting from improved energy 
efficiency of microwave ovens that are not captured by the users of 
such equipment. These benefits include externalities related to 
environmental protection and energy security that are not reflected in 
energy prices, such as reduced emissions of greenhouse gases.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that OIRA review this rule. DOE presented to OIRA for 
review the draft rule and other documents prepared for this rulemaking, 
including the RIA, and has included these documents in the rulemaking 
record. The assessments prepared pursuant to Executive Order 12866 can 
be found in the TSD for this rulemaking, available at 
www1.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 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 Executive Order 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, OIRA 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, DOE believes that today's SNOPR is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.

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) 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 Executive Order 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 Web site (www.gc.doe.gov).
    For manufacturers of microwave ovens, the Small Business 
Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. 65 FR 30836, 30850 (May 15, 2000), as amended at 65 FR 53533, 
53545 (Sept. 5, 2000) and codified at 13 CFR part 121. The size 
standards are listed by North American Industry Classification System 
(NAICS) code and industry description and are available at https://www.sba.gov/content/table-small-business-size-standards. DOE used the 
size standards the SBA published on November 5, 2010, as amended, to 
determine whether any small entities would be required to comply with 
the rule. Microwave oven manufacturing is classified under NAICS 
335221, ``Manufacturers of Household Cooking Appliances.'' The SBA sets 
a threshold of 750 employees or less for an entity to be considered as 
a small business for this category.
    The microwave oven industry consists of seven manufacturers that 
have a market share greater than 3 percent. Most are large, foreign 
companies that import microwave ovens into the United States. There are 
U.S. facilities that partly assemble microwave ovens. However, no 
domestic facilities are small businesses. Furthermore none of the 
microwave oven manufacturers are small business manufacturers. Thus, 
DOE did not conduct an initial regulatory flexibility analysis.

C. Review Under the Paperwork Reduction Act

    Manufacturers of microwave ovens must certify to DOE that their 
product complies with any applicable energy conservation standard. In 
certifying compliance, manufacturers must test their product according 
to the DOE test procedure for microwave ovens, including any amendments 
adopted for that test procedure. DOE has established regulations for 
the certification and recordkeeping requirements for all covered 
consumer products and commercial equipment, including microwave ovens. 
75 FR 56796 (Sept. 16, 2010). 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 approved by OMB under OMB control number 1910-
1400. Public reporting burden for the certification is estimated to 
average 20 hours per

[[Page 8571]]

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 (NEPA) of 1969, 
as amended (42 U.S.C. 4321 et seq.), DOE has determined that the 
proposed rule fits within the category of actions included in 
Categorical Exclusion (CX) B5.1 and otherwise meets the requirements 
for application of a CX. (See 10 CFR 1021.410(b) and Appendix B to 
Subpart D) The proposed rule fits within this category of actions 
because it is a rulemaking that establishes energy conservation 
standards for consumer products or industrial equipment, and for which 
none of the exceptions identified in CX B5.1(b) apply. Therefore, DOE 
has made a CX determination for this rulemaking, and DOE does not need 
to prepare an Environmental Assessment or Environmental Impact 
Statement for this proposed rule. DOE's CX determination for this 
proposed rule is available at https://cxnepa.energy.gov.

E. Review Under Executive Order 13132

    Executive Order 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. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's proposed 
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) 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 Executive Order 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; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 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 Executive Order 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 proposed rule 
meets the relevant standards of Executive Order 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 proposed 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 proposed ``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 small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820; also available 
at https://www.gc.doe.gov.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more on the private sector. Specifically, the proposed rule will 
likely result in a final rule that could require expenditures of $100 
million or more. Such expenditures may include (1) investment in 
research and development and in capital expenditures by microwave oven 
manufacturers in the years between the final rule and the compliance 
date for the new standard, and (2) incremental additional expenditures 
by consumers to purchase higher-efficiency microwave ovens, starting in 
2014.
    Section 202 of UMRA authorizes an agency to respond to the content 
requirements of UMRA in any other statement or analysis that 
accompanies the proposed 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. The 
SUPPLEMENTARY INFORMATION section of this supplemental notice of 
proposed rulemaking and the ``Regulatory Impact Analysis,'' chapter 17 
of the TSD for this supplemental proposed 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 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(h) and (o), 
today's proposed rule would establish energy conservation standards for 
microwave

[[Page 8572]]

oven standby mode and off mode that are designed to achieve the maximum 
improvement in energy use that DOE has determined to be both 
technologically feasible and economically justified. A full discussion 
of the alternatives considered by DOE is presented in chapter 17 of the 
TSD for today's supplemental proposed 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. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (March 18, 1988), that this regulation 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 agencies to review most 
disseminations of information to the public under 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). DOE has 
reviewed today's SNOPR 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

    Executive Order 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 proposed 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 proposed 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 tentatively concluded that today's regulatory action, which 
sets forth energy conservation standards for microwave oven standby 
mode and off mode, is not a significant energy action because the 
proposed 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 the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology (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 and as more fully set forth in the 
October 2008 NOPR, DOE conducted formal in-progress peer reviews of the 
energy conservation standards development process and analyses and has 
prepared a Peer Review Report pertaining to the energy conservation 
standards rulemaking analyses. 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 and management effectiveness of programs and/or 
projects. The ``Energy Conservation Standards Rulemaking Peer Review 
Report'' dated February 2007 has been disseminated and is available at 
the following Web site: https://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VIII. Public Participation

A. Attendance at Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this document. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the 
ADDRESSES section, foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures.
    In addition, you can attend the public meeting via Webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to Webinar participants will be 
published on the following Web site https://www1.gotomeeting.com/register/507099585. Participants are responsible for ensuring their 
systems are compatible with the Webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make a follow-up contact, if needed.

C. Conduct of Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA

[[Page 8573]]

(42 U.S.C. 6306). A court reporter will be present to record the 
proceedings and prepare a transcript. DOE reserves the right to 
schedule the order of presentations and to establish the procedures 
governing the conduct of the public meeting. After the public meeting, 
interested parties may submit further comments on the proceedings as 
well as on any aspect of the rulemaking until the end of the comment 
period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will permit, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments using any of the methods 
described in the ADDRESSES section at the beginning of this notice.
    Submitting comments via regulations.gov, the regulations.gov Web 
page will require you to provide your name and contact information. 
Your contact information will be viewable to DOE Building Technologies 
staff only. Your contact information will not be publicly viewable 
except for your first and last names, organization name (if any), and 
submitter representative name (if any). If your comment is not 
processed properly because of technical difficulties, DOE will use this 
information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to regulations.gov information for which disclosure 
is restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (CBI)). Comments submitted through regulations.gov cannot 
be claimed as CBI. Comments received through the Web site will waive 
any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section.
    DOE processes submissions made through regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery, or mail. Comments and 
documents submitted via email, hand delivery, or mail also will be 
posted to regulations.gov. If you do not want your personal contact 
information to be publicly viewable, do not include it in your comment 
or any accompanying documents. Instead, provide your contact 
information on a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. Email submissions are 
preferred. If you submit via mail or hand delivery, please provide all 
items on a CD, if feasible. It is not necessary to submit printed 
copies. No facsimiles (faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, written in English and are free of any defects or 
viruses. Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery two well-marked copies: One copy 
of the document marked confidential including all the information 
believed to be confidential, and one copy of the document marked non-
confidential with the information believed to be confidential deleted. 
Submit these documents via email or on a CD, if feasible. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except

[[Page 8574]]

information deemed to be exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    1. Input and data regarding off mode power for microwave ovens;
    2. Input and data on the utility provided by specific features that 
contribute to microwave oven standby power. In particular, DOE seeks 
information on any lessening of the utility or the performance of 
microwave display technologies and low- and zero-standby power cooking 
sensors as compared to absolute humidity cooking sensors currently used 
in microwave ovens on the U.S. market.
    3. Input and data on control strategies available to enable 
manufacturers to make design tradeoffs between incorporating standby-
power-consuming features such as displays or cooking sensors and 
including a function to turn power off to these components during 
standby mode. DOE also seeks comment on the viability and cost of 
microwave oven control board circuitry that could accommodate 
transistors to switch off cooking sensors and displays;
    4. Whether switching or similar modern power supplies can operate 
successfully inside a microwave oven and the associated efficiency 
impacts on standby power;
    5. Input and data on the estimated incremental manufacturing costs, 
as well as the assumed approaches to achieve TSL 3 for microwave oven 
standby mode and off mode. DOE also seeks comment on whether any 
intellectual property or patent infringement issues are associated with 
the design options presented in the SNOPR TSD to achieve TSL 3. In 
particular, DOE seeks comment on any lessening of competition due to 
intellectual property or patent infringement issues associated with 
low- and zero-standby power cooking sensors;
    6. Input and data on the estimated market share of microwave ovens 
at the standby power consumption stipulated by TSL 3.
    7. Information on any utility or performance impacts to built-ins 
at the standard level proposed by DOE.

IX. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's 
proposed rule.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Reporting and 
recordkeeping requirements, and Small businesses.

    Issued in Washington, DC, on January 31, 2012.
Henry Kelly,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons stated in the preamble, DOE proposes to amend parts 
429 and 430, of title 10 of the Code of Federal Regulations, as set 
forth below.

PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER 
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

    1. The authority citation for part 429 continues to read as 
follows:

    Authority: 42 U.S.C. 6291-6317.

    2. In Sec.  429.23 revise paragraph (b)(2) to read as follows:


Sec.  429.23  Conventional cooking tops, conventional ovens, microwave 
ovens.

* * * * *
    (b) * * *
    (2) Pursuant to Sec.  429.12(b)(13), a certification report shall 
include the following public product-specific information: For 
conventional cooking tops and conventional ovens: the type of pilot 
light and a declaration that the manufacturer has incorporated the 
applicable design requirements. For microwave ovens, the average 
standby power in watts.

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

    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.

    2. In Sec.  430.23 revise paragraph (i)(3) to read as follows:


Sec.  430.23  Test procedures for the measurement of energy and water 
consumption.

* * * * *
    (i) * * *
    (3) The standby power for microwave ovens shall be determined 
according to 3.2.4 of appendix I to this subpart. The standby power 
shall be rounded off to the nearest 0.1 watt.
* * * * *
    3. In Sec.  430.32 revise the heading and paragraph (j) to read as 
follows:


Sec.  430.32  Energy and water conservation standards and their 
compliance dates.

* * * * *
    (j) Cooking Products (1) Gas cooking products with an electrical 
supply cord manufactured on or after January 1, 1990, shall not be 
equipped with a constant burning pilot light.
    (2) Gas cooking products without an electrical supply cord 
manufactured on or after April 9, 2012, shall not be equipped with a 
constant burning pilot light.
    (3) Microwave-only ovens and countertop combination microwave ovens 
manufactured on or after [date 3 years after final rule Federal 
Register publication] shall have an average standby power not more than 
1.0 watt. Built-in and over-the-range combination microwave ovens 
manufactured on or after [date 3 years after final rule Federal 
Register publication] shall have an average standby power not more than 
2.2 watts.
* * * * *
[FR Doc. 2012-2784 Filed 2-13-12; 8:45 am]
BILLING CODE 6450-01-P