Energy Conservation Program: Energy Conservation Standards for Direct Heating Equipment, 71325-71330 [2016-24866]

Download as PDF 71325 Rules and Regulations Federal Register Vol. 81, No. 200 Monday, October 17, 2016 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE–2016–BT–STD– 0007] RIN 1904–AD65 Energy Conservation Program: Energy Conservation Standards for Direct Heating Equipment Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Final determination. AGENCY: The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including direct heating equipment. EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more-stringent standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this final determination, DOE is finalizing its determination that morestringent energy conservation standards for direct heating equipment are not economically justified and is therefore not amending its energy conservation standards. SUMMARY: The effective date of this rule is December 16, 2016. ADDRESSES: The docket for this rulemaking, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, jstallworth on DSK7TPTVN1PROD with RULES DATES: VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 such as information that is exempt from public disclosure. A link to the docket Web page can be found at https://www.regulations.gov/ docket?D=EERE-2016-BT-STD-0007. The docket Web page contains simple instructions on how to access all documents, including public comments, in the docket. For further information on how to review the docket, contact the Appliance and Equipment Standards Program Staff at (202) 586–6636 or by email: Appliance_Standards_Public_ Meetings@ee.doe.gov FOR FURTHER INFORMATION CONTACT: John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE–5B, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 287–1692. Email: direct_heating_equipment@ee.doe.gov. Ms. Sarah Butler, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 586–1777. Email: Sarah.Butler@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Determination A. Authority B. Background 1. Current Standards 2. History of Rulemakings for Direct Heating Equipment II. Rationale A. Previous Rulemaking B. April 2016 Proposal Not To Amend C. Comments Received III. Final Determination Not To Amend IV. Procedural Issues and Regulatory Review A. Review Under Executive Orders 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 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 V. Approval of the Office of the Secretary I. Summary of the Determination DOE has determined that energy conservation standards should not be amended for direct heating equipment (DHE). DOE has concluded that the DHE market characteristics are largely similar to those analyzed in the previous rulemaking and the technologies available for improving DHE energy efficiency have not advanced significantly since the previous rulemaking analyses 1 (concluding with the publication of a final rule on April 16, 2010, hereafter ‘‘April 2010 Final Rule’’). 75 FR 20112. In addition, DOE believes the conclusions reached in the April 2010 Final Rule regarding the benefits and burdens of more stringent standards for DHE are still relevant to the DHE market today. Therefore, DOE has determined that amended energy conservation standards would not be economically justified. A. Authority Title III, Part B 2 of the Energy Policy and Conservation Act of 1975 (‘‘EPCA’’ or ‘‘the Act’’), Public Law 94–163 (codified at 42 U.S.C. 6291–6309) established the Energy Conservation Program for Consumer Products Other Than Automobiles.3 This program covers most major household appliances (collectively referred to as ‘‘covered products’’) including DHE, which are the subject of this document. (42 U.S.C. 6292 (a)(9)) EPCA prescribed initial energy conservation standards for DHE and directs DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(e)(3) and (4)) DOE is issuing this final determination pursuant to that requirement, in addition to the requirement under 42 U.S.C. 6295(m), which states that DOE must periodically review its already established energy conservation standards for a covered product not later than six years after issuance of any final rule establishing or amending such standards. As a result of such review, DOE must either publish a notice of proposed rulemaking to amend 1 With the exception of condensing technology for fan-type wall furnaces, discussed in section II. 2 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated as Part A. 3 All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act, Public Law 114–11 (April 30, 2015). E:\FR\FM\17OCR1.SGM 17OCR1 jstallworth on DSK7TPTVN1PROD with RULES 71326 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Rules and Regulations the standards or publish a notice of determination indicating that the existing standards do not need to be amended. (42 U.S.C. 6295(m)(1)(A) and (B)) Pursuant to the requirements set forth under EPCA, any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) Moreover, DOE may not prescribe a standard: (1) For certain products, including DHE, if no test procedure has been established for the product,4 or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after considering, to the greatest extent practicable, the following seven statutory factors: (1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard; (2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard; (3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered products likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy and water conservation; and (7) Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a 4 The DOE test procedures for DHE appear at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix O and 10 CFR part 430, subpart B, appendix G (appendix G). VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) EPCA, as codified, also contains what is known as an ‘‘anti-backsliding’’ provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4)) 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 may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d)). Finally, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)–(B)) DOE’s current test procedures for vented home heating equipment address standby mode fossilfuel energy use only. B. Background 1. Current Standards In the April 2010 Final Rule, DOE prescribed the current energy conservation standards for DHE manufactured on and after April 16, 2013. 75 FR 20112. These standards are set forth in DOE’s regulations at 10 CFR PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 430.32(i)(2) and are shown in Table I–1.5 TABLE I–1—FEDERAL ENERGY CONSERVATION STANDARDS FOR DHE [10 CFR 430.32(i)(2)] Product class Gas wall fan type up to 42,000 Btu/h ...................... Gas wall fan type over 42,000 Btu/h ...................... Gas wall gravity type up to 27,000 Btu/h ...................... Gas wall gravity type over 27,000 Btu/h up to 46,000 Btu/h .................................. Gas wall gravity type over 46,000 Btu/h ...................... Gas floor up to 37,000 Btu/h Gas floor over 37,000 Btu/h Gas room up to 20,000 Btu/h Gas room over 20,000 Btu/h up to 27,000 Btu/h ............ Gas room over 27,000 Btu/h up to 46,000 Btu/h ............ Gas room over 46,000 Btu/h Annual fuel utilization efficiency, April 16, 2013 (percent) 75 76 65 66 67 57 58 61 66 67 68 2. History of Rulemakings for Direct Heating Equipment EPCA, as codified, initially set forth energy conservation standards for certain DHE product classes that are the subject of this document and directed DOE to conduct two subsequent rulemakings to determine whether the existing standards should be amended. (42 U.S.C. 6295(e)(3) and (4)) The first of these two rulemakings included both DHE and pool heaters and concluded with the April 2010 Final Rule (codified at 10 CFR 430.32(i) and (k)). 75 FR 20112. With respect to DHE, the first rulemaking amended the energy conservation standards for vented home heating equipment, a subset of DHE, and consolidated some of the product classes from the previous standards established by EPCA. Compliance with the amended standards was required beginning on April 16, 2013. Id. DOE did not issue standards for unvented home heating equipment, a subset of DHE, finding that such standards would produce insignificant energy savings. 75 FR 20112, 20130. This rulemaking satisfies the statutory requirement under EPCA to (1) conduct a second round of review of the DHE 5 DOE notes that DHE is defined at 10 CFR 430.2 as vented home heating equipment and unvented home heating equipment; however, the existing energy conservation standards apply only to product classes of vented home heating equipment. There are no existing energy conservation standards for unvented home heating equipment. E:\FR\FM\17OCR1.SGM 17OCR1 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Rules and Regulations standards (42 U.S.C. 6295(e)(4)(B)) and (2) publish either a notice of determination that standards for DHE do not need to be amended or a notice of proposed rulemaking proposing to amend the DHE energy conservation standards (42 U.S.C. 6295(m)(1)). To initiate this rulemaking,6 DOE issued a Request for Information (RFI) in the Federal Register on March 26, 2015 (hereafter ‘‘March 2015 RFI’’). 80 FR 15922. Through that RFI, DOE requested data and information pertaining to its planned technical and economic analyses for DHE and pool heaters. Subsequently, on April 11, 2016, DOE published in the Federal Register a Notice of Proposed Determination (April 2016 NOPD) to not amend its energy conservation standards for DHE. 81 FR 21276. Due to the lack of advancement in the DHE industry since the April 2010 Final Rule in terms of product offerings, available technology options and associated costs, and declining shipment volumes, DOE believed that amending the DHE energy conservation standards would impose a substantial burden on manufacturers of DHE, particularly to small manufacturers. DOE also tentatively concluded that energy conservation standards for unvented home heating equipment, a form of DHE, would likely result in negligible energy savings and therefore did not propose standards for this product. In this final determination, DOE finalizes its proposed determination from the April 2016 NOPD. II. Rationale jstallworth on DSK7TPTVN1PROD with RULES A. Previous Rulemaking In the most recent DOE rulemaking for DHE energy conservation standards, DOE initially proposed standards for vented home heating products in a NOPR published on December 11, 2009 (‘‘December 2009 NOPR’’) that represented a six AFUE percentage point (weighted-average across all product classes) increase over the standards established by EPCA and codified at 42 U.S.C. 6295(e)(3). 74 FR 65852 (December 11, 2009). In response to the December 2009 NOPR several commenters presented the following concerns: • Shipments of DHE were low, therefore energy savings potential was low; 6 Although the March 2015 RFI and the previous energy conservation standards rulemaking included both DHE and pool heaters, DOE subsequently elected to conduct separate rulemakings for each of these products. This rulemaking pertains solely to the energy conservation standards for DHE. VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 • Low shipments would make it difficult to recoup manufacturers’ expenditures related to complying with amended standards; • Product offerings may be reduced; • Manufacturers may leave the market entirely; and • Employment in the industry may be negatively impacted due to reduced product lines and/or insufficient return on investment required to meet amended standards. In the April 2010 Final Rule, DOE also found that: • The industry had gone through considerable consolidation, with three businesses controlling the vast majority of the market; • Consolidation was driven by the decrease in shipments; • Product lines were predominantly maintained to provide replacements, not new construction; and • Small business manufacturers could be disproportionately disadvantaged by a more stringent standard due to low shipment volumes and a high ratio of anticipated investment costs to annual earnings. DOE ultimately rejected TSL 3 and all higher TSLs in the April 2010 Final Rule on the grounds that capital conversion costs would lead to a large reduction in INPV and that small businesses would be disproportionately impacted. DOE also noted that the lifecycle cost (LCC) and payback period analyses (PBP) for TSL 4 and higher suggested that benefits to consumers were outweighed by initial costs. 75 FR 20112, 20215–20218 (April 16, 2010). DOE, therefore, adopted standards at TSL 2 for vented home heating equipment. Compliance with the adopted standards (codified at 10 CFR 430.32(i)(2)) was required for all vented home heating equipment manufactured on or after April 16, 2013. B. April 2016 Proposal Not To Amend In the April 2016 NOPD DOE found that few changes to the industry and product offerings had occurred since the April 2010 Final Rule and therefore the conclusions presented in that final rule were still valid. First, DOE conducted a review of the current DHE market, including product literature and product listings in the DOE Compliance Certification Management System (CCMS) database and Air-Conditioning, Heating, and Refrigeration Institute (AHRI) product directory.7 DOE found that the number of models offered in 7 The AHRI directory for DHE can be found at: https://www.ahridirectory.org/ahridirectory/pages/ dht/defaultSearch.aspx. The DOE CCMS database can be found at: http://www.regulations.doe.gov/ certification-data/. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 71327 each of the DHE product classes has decreased overall since the previous rulemaking. This supported the notion that the DHE market was shrinking and that product lines were mainly maintained as replacements for existing DHE units, and that new product lines generally were not being developed. Second, DOE examined available technologies used to improve the efficiency of DHE. DOE contractors analyzed current products through product teardowns and engaged in manufacturer interviews to obtain further information in support of its analysis. In response to the March 2015 RFI, AHRI commented that the current energy conservation standards are close to if not at the maximum technology level for most product classes of DHE. (Docket EERE–2015–BT–STD–0003: AHRI, No. 7 at p. 4) During confidential manufacturer interviews, DOE received similar feedback regarding the small potential for improving efficiency over current standards for most product classes. Moreover, manufacturers suggested that because these units are primarily sold as replacement units, new designs or prototypes are generally not being pursued. DOE noted in the April 2016 NOPD that the same technology options (namely improved heat exchanger, induced draft, electronic ignition, and a two-speed blower for wall fan-type furnaces) were considered as part of the previous DHE rulemaking analysis, and agreed that the technology options available for DHE likely have limited potential for achieving energy savings.8 Furthermore, the costs of technology options were anticipated to be similar or higher than in the previous rulemaking analysis due to reduced shipments and therefore the purchasing power of DHE manufacturers. In addition to these technology options, DOE also noted that a condensing fan-type wall furnace with two input capacities (17,500 Btu/h with a 90.2% AFUE rating, and 35,000 Btu/ h with a 91.8% AFUE rating) had become available since the last rulemaking. DOE must set amended standards that result in the maximum improvement in energy efficiency that is technologically feasible (42 U.S.C. 8 DOE notes that for room heaters with input capacity up to 20,000 Btu/h, the maximum AFUE available on the market increased from 59% in 2009 (only one unit at this input capacity was available on the market at that time) to 71% in 2015. DOE believes that this is due to heat exchanger improvements only because these units do not use electricity. Due to the small input capacity, DOE does not believe that this increase in AFUE (based on heat exchanger improvements relative to input capacity) is representative of or feasible for other room heater product classes. E:\FR\FM\17OCR1.SGM 17OCR1 jstallworth on DSK7TPTVN1PROD with RULES 71328 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Rules and Regulations 6295(p)(1)) and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE generally considers technologies available in the market or in prototype products in its list of technologies for improving efficiency. Therefore, DOE determined that this condensing fan-type wall furnace represented the max-tech efficiency level for fan-type wall furnaces for this rulemaking. DOE received feedback during manufacturer interviews regarding the manufacturer production cost for the condensing unit that indicated that condensing models are significantly more expensive to manufacture than non-condensing models. Manufacturer feedback also indicated that shipments of these units are so low as to be negligible, as consumers are not willing to pay the high initial cost for such products. Furthermore, only one manufacturer currently makes a condensing fan-type wall furnace and others would need to make substantial investments in order to produce these units on a scale large enough to support a Federal minimum standard. Therefore, DOE concluded that this technology option, which was not considered in the analysis for the April 2010 Final Rule, would not be economically justified today when analyzed for the Nation as a whole. DOE believes that severe manufacturer impacts would be expected if an energy conservation standard were adopted at this level. Finally, DOE acknowledged in the April 2016 NOPD that the DHE industry had seen further consolidation, with the total number of manufacturers declining from six to four. Furthermore, according to manufacturers,9 shipments further decreased since the April 2010 Final Rule, and therefore it would be more difficult for manufacturers to recover capital expenditures resulting from increased standards. DOE acknowledged that DHE units continue to be produced primarily as replacements and that the market is small, and expected that shipments would continue to decrease and amended standards would likely accelerate the trend of declining shipments. Moreover, DOE anticipated that small business impacts resulting from amended standards could be significant, as two of the four remaining manufacturers subject to DHE standards are small businesses. DOE believed that its conclusions regarding small businesses from the April 2010 Final Rule (i.e., that small businesses would be likely to reduce product offerings or leave the DHE market entirely if the standard was set above the level 9 Information obtained during confidential manufacturer interviews. VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 adopted in that rulemaking) were still valid concerns. In light of these considerations, DOE proposed in the April 2016 NOPD not to amend its energy conservation standards for DHE. DOE tentatively concluded that amended standards for DHE could not be economically justified based on low and declining shipments, lack of cost-effective technology options, and the potential for severe impacts on small businesses. C. Comments Received In response to the April 2016 NOPD, DOE received five comment submissions from Tyler McAnelly (individual), the American Public Gas Association (APGA), the Association of Home Appliance Manufacturers (AHAM), the California Investor Owned Utilities (CA IOUs), and the Airconditioning, Heating, and Refrigeration Institute (AHRI).10 APGA, AHAM, and AHRI supported DOE’s tentative determination that amended standards for DHE would not be economically justified. (APGA, No. 4 at p. 1–2; AHAM, No. 5 at p. 2; AHRI, No. 7 at p. 1–2) APGA reiterated that because the market is small, any increase in the standard would result in significant impacts on manufacturers. (APGA, No. 4 at p. 1) AHRI agreed that model offerings had been reduced and suggested that this was a result of the last rulemaking. (AHRI, No. 7 at p. 1) They agreed with DOE’s determination that an amended standard set at a condensing efficiency level for fan-type wall furnaces would severely impact manufacturers. (AHRI, No. 7 at p. 1) They also presented their estimates of the percent change in total shipments for the years 2010–2015 compared with the total shipments over the period 2001–2006, estimating that wall furnace shipments were 21% less, direct vent wall furnace (a form of wall furnace) shipments were 31% less, and room heater shipments were 44% less. (AHRI, No. 7 at p. 2) McAnelly suggested that amended standards for DHE may be technologically feasible, may save a significant amount of energy such that DOE should not wait until such standards are economically justified, and that therefore DOE should consider adopting amended standards for DHE. (McAnelly, No. 3 at p. 1) In response, DOE notes that it is required by statute (42 U.S.C. 6295(o)(2)(A)) to establish energy conservation standards that are both technologically feasible and 10 All public comment submissions can be found at: https://www.regulations.gov/docket?D=EERE2016-BT-STD-0007. PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 economically justified, and therefore cannot legally amend standards that cannot be shown to be economically justified based on the seven criteria found at 42 U.S.C. 6295(o)(2)(B). In response to the April 2016 NOPD, the CA IOUs urged DOE to consider energy conservation standards for portable electric heaters (a form of unvented home heating equipment). They cited reports indicating both a growing market, the overall energy use for these products, and the prevalence of thermostats and their potential to save energy. They also suggested that DOE modify the test procedure for unvented home heating equipment in order to reflect energy savings due to control features like thermostats, occupancy sensors, automatic shut-off, and network capabilities. (CA IOUs, No. 6 at p. 1–2) The DOE test procedure for unvented home heating equipment (appendix G), includes a calculation of annual energy consumption based on a single assignment of active mode hours for unvented heaters that are used as the primary heating source for the home. For unvented heaters that are not used as the primary heating source for the home, there are no provisions for calculating either the energy efficiency or annual energy consumption. Pursuant to 42 U.S.C. 6295(o)(3) DOE is prohibited from prescribing a new or amended standard for a covered consumer product if a test procedure has not been prescribed for that consumer product. As such, DOE cannot consider standards for these products at this time. DOE may consider amending the test procedures and establishing standards for unvented home heating equipment in the future. III. Final Determination Not To Amend DOE did not receive any comments or data suggesting that DOE’s initial analysis of the DHE market in the April 2016 NOPD was inaccurate. Therefore, due to the lack of advancement in the DHE industry since the April 2010 Final Rule in terms of product offerings, available technology options and associated costs, and declining shipment volumes, DOE continues to believe that amending the DHE energy conservation standards would impose a substantial burden on manufacturers of DHE, particularly to small manufacturers. DOE rejected higher TSLs during the previous DHE rulemaking due to significant impacts on industry profitability, risks of accelerated industry consolidation, and the likelihood that small manufacturers would experience disproportionate impacts that could lead them to E:\FR\FM\17OCR1.SGM 17OCR1 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Rules and Regulations discontinue product lines or exit the market altogether. DOE believes that the market and the manufacturers’ circumstances are similar to those found when DOE last evaluated amended energy conservation standards for DHE for the April 2010 Final Rule. As such, DOE believes that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. Therefore, DOE has determined not to amend the DHE energy conservation standards. As discussed in section I.A, EPCA requires DOE to incorporate standby mode and off mode energy use into a single amended or new standard (if feasible) or prescribe a separate standard for standby mode and off mode energy consumption in any final rule establishing or revising a standard for a covered product, adopted after July 1, 2010. (42 U.S.C. 6295(gg)(3)(A)–(B)) Because DOE is not amending standards for DHE in this rule, DOE is not required to adopt amended standards that include standby and off mode energy use. DOE notes that fossil fuel energy use in standby mode and off mode is already included in the AFUE metric, and DOE anticipates that electric standby and off mode energy use is small in comparison to fossil fuel energy use. IV. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 This final determination is not subject to review under Executive Order (E.O.) 12866, ‘‘Regulatory Planning and Review.’’ 58 FR 51735 (October 4, 1993). jstallworth on DSK7TPTVN1PROD with RULES B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (August 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 VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 has made its procedures and policies available on the Office of the General Counsel’s Web site (http://energy.gov/ gc/office-general-counsel). DOE reviewed this final determination under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. In this final determination, DOE finds that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. This determination does not establish amended energy conservation standards for DHE. On the basis of the foregoing, DOE certifies that this determination will not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared an FRFA for this final determination. DOE will transmit this certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration for review under 5 U.S.C. 605(b). C. Review Under the Paperwork Reduction Act This final determination, which determines that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens, and imposes no new information or record keeping requirements. Accordingly, the Office of Management and Budget (OMB) clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.) D. Review Under the National Environmental Policy Act of 1969 In this final determination, DOE determines that amended energy conservation standards for DHE would not be economically justified at any level above the current standard level because benefits of more stringent standards would not outweigh the burdens. DOE has determined that review under the National Environmental Policy Act of 1969 (NEPA), Public Law 91–190, codified at 42 U.S.C. 4321 et seq. is not required at this time because standards are not being adopted. E. Review Under Executive Order 13132 Executive Order 13132, ‘‘Federalism,’’ 64 FR 43255 (August 10, 1999), imposes certain requirements on Federal agencies formulating and implementing PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 71329 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. As this final determination determines that amended standards are not likely to be warranted for DHE, there is no impact on the policymaking discretion of the states. Therefore, no 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; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of 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 determination meets the E:\FR\FM\17OCR1.SGM 17OCR1 71330 Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / Rules and Regulations relevant standards of Executive Order 12988. jstallworth on DSK7TPTVN1PROD with RULES 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 them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE’s policy statement is also available at http://energy.gov/sites/ prod/files/gcprod/documents/umra_ 97.pdf. This final determination contains neither an intergovernmental mandate nor a mandate that may result in the expenditure of $100 million or more in any year, so these UMRA requirements do not apply. 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 final determination will 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 Pursuant to Executive Order 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights,’’ 53 FR 8859 (March 15, 1988), VerDate Sep<11>2014 14:00 Oct 14, 2016 Jkt 241001 DOE has determined that this final determination will not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this final determination 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. Because this final determination determines that amended standards for DHE are not warranted, it is not a significant energy action, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects. L. Review Under the Information Quality Bulletin for Peer Review On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (OSTP), issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR PO 00000 Frm 00006 Fmt 4700 Sfmt 9990 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.’’ Id. at FR 2667. In response to OMB’s Bulletin, 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: www.energy.gov/ eere/buildings/peer-review. V. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this final determination. List of Subjects in 10 CFR Part 430 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Incorporation by reference, Intergovernmental relations, Small businesses. Issued in Washington, DC, on October 7, 2016. David J. Friedman, Acting Assistant Secretary, Energy Efficiency and Renewable Energy. [FR Doc. 2016–24866 Filed 10–14–16; 8:45 am] BILLING CODE 6450–01–P E:\FR\FM\17OCR1.SGM 17OCR1

Agencies

[Federal Register Volume 81, Number 200 (Monday, October 17, 2016)]
[Rules and Regulations]
[Pages 71325-71330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24866]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 81, No. 200 / Monday, October 17, 2016 / 
Rules and Regulations

[[Page 71325]]



DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2016-BT-STD-0007]
RIN 1904-AD65


Energy Conservation Program: Energy Conservation Standards for 
Direct Heating Equipment

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

ACTION: Final determination.

-----------------------------------------------------------------------

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
direct heating equipment. EPCA also requires the U.S. Department of 
Energy (DOE) to periodically determine whether more-stringent standards 
would be technologically feasible and economically justified, and would 
save a significant amount of energy. In this final determination, DOE 
is finalizing its determination that more-stringent energy conservation 
standards for direct heating equipment are not economically justified 
and is therefore not amending its energy conservation standards.

DATES: The effective date of this rule is December 16, 2016.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, not all documents listed in 
the index may be publicly available, such as information that is exempt 
from public disclosure.
    A link to the docket Web page can be found at https://www.regulations.gov/docket?D=EERE-2016-BT-STD-0007. The docket Web page 
contains simple instructions on how to access all documents, including 
public comments, in the docket.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards Program Staff at (202) 586-6636 or by 
email: Appliance_Standards_Public_Meetings@ee.doe.gov

FOR FURTHER INFORMATION CONTACT: 
    John Cymbalsky, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: 
(202) 287-1692. Email: direct_heating_equipment@ee.doe.gov.
    Ms. Sarah Butler, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-1777. Email: Sarah.Butler@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Determination
    A. Authority
    B. Background
    1. Current Standards
    2. History of Rulemakings for Direct Heating Equipment
II. Rationale
    A. Previous Rulemaking
    B. April 2016 Proposal Not To Amend
    C. Comments Received
III. Final Determination Not To Amend
IV. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 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
V. Approval of the Office of the Secretary

I. Summary of the Determination

    DOE has determined that energy conservation standards should not be 
amended for direct heating equipment (DHE). DOE has concluded that the 
DHE market characteristics are largely similar to those analyzed in the 
previous rulemaking and the technologies available for improving DHE 
energy efficiency have not advanced significantly since the previous 
rulemaking analyses \1\ (concluding with the publication of a final 
rule on April 16, 2010, hereafter ``April 2010 Final Rule''). 75 FR 
20112. In addition, DOE believes the conclusions reached in the April 
2010 Final Rule regarding the benefits and burdens of more stringent 
standards for DHE are still relevant to the DHE market today. 
Therefore, DOE has determined that amended energy conservation 
standards would not be economically justified.
---------------------------------------------------------------------------

    \1\ With the exception of condensing technology for fan-type 
wall furnaces, discussed in section II.
---------------------------------------------------------------------------

A. Authority

    Title III, Part B \2\ of the Energy Policy and Conservation Act of 
1975 (``EPCA'' or ``the Act''), Public Law 94-163 (codified at 42 
U.S.C. 6291-6309) established the Energy Conservation Program for 
Consumer Products Other Than Automobiles.\3\ This program covers most 
major household appliances (collectively referred to as ``covered 
products'') including DHE, which are the subject of this document. (42 
U.S.C. 6292 (a)(9)) EPCA prescribed initial energy conservation 
standards for DHE and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6295(e)(3) and 
(4)) DOE is issuing this final determination pursuant to that 
requirement, in addition to the requirement under 42 U.S.C. 6295(m), 
which states that DOE must periodically review its already established 
energy conservation standards for a covered product not later than six 
years after issuance of any final rule establishing or amending such 
standards. As a result of such review, DOE must either publish a notice 
of proposed rulemaking to amend

[[Page 71326]]

the standards or publish a notice of determination indicating that the 
existing standards do not need to be amended. (42 U.S.C. 6295(m)(1)(A) 
and (B))
---------------------------------------------------------------------------

    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated as Part A.
    \3\ All references to EPCA in this document refer to the statute 
as amended through the Energy Efficiency Improvement Act, Public Law 
114-11 (April 30, 2015).
---------------------------------------------------------------------------

    Pursuant to the requirements set forth under EPCA, any new or 
amended standard for a covered product must be designed to achieve the 
maximum improvement in energy efficiency that is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 
Furthermore, DOE may not adopt any standard that would not result in 
the significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) 
Moreover, DOE may not prescribe a standard: (1) For certain products, 
including DHE, if no test procedure has been established for the 
product,\4\ or (2) if DOE determines by rule that the standard is not 
technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)(B)) In deciding whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make 
this determination after considering, to the greatest extent 
practicable, the following seven statutory factors:
---------------------------------------------------------------------------

    \4\ The DOE test procedures for DHE appear at title 10 of the 
Code of Federal Regulations (CFR) part 430, subpart B, appendix O 
and 10 CFR part 430, subpart B, appendix G (appendix G).
---------------------------------------------------------------------------

    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (Secretary) considers 
relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    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 may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 42 
U.S.C. 6297(d)).
    Finally, any final rule for new or amended energy conservation 
standards promulgated after July 1, 2010, is required to address 
standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) 
Specifically, when DOE adopts a standard for a covered product after 
that date, it must, if justified by the criteria for adoption of 
standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and 
off mode energy use into a single standard, or, if that is not 
feasible, adopt a separate standard for such energy use for that 
product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures 
for vented home heating equipment address standby mode fossil-fuel 
energy use only.

B. Background

1. Current Standards
    In the April 2010 Final Rule, DOE prescribed the current energy 
conservation standards for DHE manufactured on and after April 16, 
2013. 75 FR 20112. These standards are set forth in DOE's regulations 
at 10 CFR 430.32(i)(2) and are shown in Table I-1.\5\
---------------------------------------------------------------------------

    \5\ DOE notes that DHE is defined at 10 CFR 430.2 as vented home 
heating equipment and unvented home heating equipment; however, the 
existing energy conservation standards apply only to product classes 
of vented home heating equipment. There are no existing energy 
conservation standards for unvented home heating equipment.

        Table I-1--Federal Energy Conservation Standards for DHE
                          [10 CFR 430.32(i)(2)]
------------------------------------------------------------------------
                                                            Annual fuel
                                                            utilization
                      Product class                         efficiency,
                                                          April 16, 2013
                                                             (percent)
------------------------------------------------------------------------
Gas wall fan type up to 42,000 Btu/h....................              75
Gas wall fan type over 42,000 Btu/h.....................              76
Gas wall gravity type up to 27,000 Btu/h................              65
Gas wall gravity type over 27,000 Btu/h up to 46,000 Btu/             66
 h......................................................
Gas wall gravity type over 46,000 Btu/h.................              67
Gas floor up to 37,000 Btu/h............................              57
Gas floor over 37,000 Btu/h.............................              58
Gas room up to 20,000 Btu/h.............................              61
Gas room over 20,000 Btu/h up to 27,000 Btu/h...........              66
Gas room over 27,000 Btu/h up to 46,000 Btu/h...........              67
Gas room over 46,000 Btu/h..............................              68
------------------------------------------------------------------------

2. History of Rulemakings for Direct Heating Equipment
    EPCA, as codified, initially set forth energy conservation 
standards for certain DHE product classes that are the subject of this 
document and directed DOE to conduct two subsequent rulemakings to 
determine whether the existing standards should be amended. (42 U.S.C. 
6295(e)(3) and (4)) The first of these two rulemakings included both 
DHE and pool heaters and concluded with the April 2010 Final Rule 
(codified at 10 CFR 430.32(i) and (k)). 75 FR 20112. With respect to 
DHE, the first rulemaking amended the energy conservation standards for 
vented home heating equipment, a subset of DHE, and consolidated some 
of the product classes from the previous standards established by EPCA. 
Compliance with the amended standards was required beginning on April 
16, 2013. Id. DOE did not issue standards for unvented home heating 
equipment, a subset of DHE, finding that such standards would produce 
insignificant energy savings. 75 FR 20112, 20130.
    This rulemaking satisfies the statutory requirement under EPCA to 
(1) conduct a second round of review of the DHE

[[Page 71327]]

standards (42 U.S.C. 6295(e)(4)(B)) and (2) publish either a notice of 
determination that standards for DHE do not need to be amended or a 
notice of proposed rulemaking proposing to amend the DHE energy 
conservation standards (42 U.S.C. 6295(m)(1)). To initiate this 
rulemaking,\6\ DOE issued a Request for Information (RFI) in the 
Federal Register on March 26, 2015 (hereafter ``March 2015 RFI''). 80 
FR 15922. Through that RFI, DOE requested data and information 
pertaining to its planned technical and economic analyses for DHE and 
pool heaters.
---------------------------------------------------------------------------

    \6\ Although the March 2015 RFI and the previous energy 
conservation standards rulemaking included both DHE and pool 
heaters, DOE subsequently elected to conduct separate rulemakings 
for each of these products. This rulemaking pertains solely to the 
energy conservation standards for DHE.
---------------------------------------------------------------------------

    Subsequently, on April 11, 2016, DOE published in the Federal 
Register a Notice of Proposed Determination (April 2016 NOPD) to not 
amend its energy conservation standards for DHE. 81 FR 21276. Due to 
the lack of advancement in the DHE industry since the April 2010 Final 
Rule in terms of product offerings, available technology options and 
associated costs, and declining shipment volumes, DOE believed that 
amending the DHE energy conservation standards would impose a 
substantial burden on manufacturers of DHE, particularly to small 
manufacturers. DOE also tentatively concluded that energy conservation 
standards for unvented home heating equipment, a form of DHE, would 
likely result in negligible energy savings and therefore did not 
propose standards for this product. In this final determination, DOE 
finalizes its proposed determination from the April 2016 NOPD.

II. Rationale

A. Previous Rulemaking

    In the most recent DOE rulemaking for DHE energy conservation 
standards, DOE initially proposed standards for vented home heating 
products in a NOPR published on December 11, 2009 (``December 2009 
NOPR'') that represented a six AFUE percentage point (weighted-average 
across all product classes) increase over the standards established by 
EPCA and codified at 42 U.S.C. 6295(e)(3). 74 FR 65852 (December 11, 
2009). In response to the December 2009 NOPR several commenters 
presented the following concerns:
     Shipments of DHE were low, therefore energy savings 
potential was low;
     Low shipments would make it difficult to recoup 
manufacturers' expenditures related to complying with amended 
standards;
     Product offerings may be reduced;
     Manufacturers may leave the market entirely; and
     Employment in the industry may be negatively impacted due 
to reduced product lines and/or insufficient return on investment 
required to meet amended standards.
    In the April 2010 Final Rule, DOE also found that:
     The industry had gone through considerable consolidation, 
with three businesses controlling the vast majority of the market;
     Consolidation was driven by the decrease in shipments;
     Product lines were predominantly maintained to provide 
replacements, not new construction; and
     Small business manufacturers could be disproportionately 
disadvantaged by a more stringent standard due to low shipment volumes 
and a high ratio of anticipated investment costs to annual earnings.
    DOE ultimately rejected TSL 3 and all higher TSLs in the April 2010 
Final Rule on the grounds that capital conversion costs would lead to a 
large reduction in INPV and that small businesses would be 
disproportionately impacted. DOE also noted that the life-cycle cost 
(LCC) and payback period analyses (PBP) for TSL 4 and higher suggested 
that benefits to consumers were outweighed by initial costs. 75 FR 
20112, 20215-20218 (April 16, 2010). DOE, therefore, adopted standards 
at TSL 2 for vented home heating equipment. Compliance with the adopted 
standards (codified at 10 CFR 430.32(i)(2)) was required for all vented 
home heating equipment manufactured on or after April 16, 2013.

B. April 2016 Proposal Not To Amend

    In the April 2016 NOPD DOE found that few changes to the industry 
and product offerings had occurred since the April 2010 Final Rule and 
therefore the conclusions presented in that final rule were still 
valid. First, DOE conducted a review of the current DHE market, 
including product literature and product listings in the DOE Compliance 
Certification Management System (CCMS) database and Air-Conditioning, 
Heating, and Refrigeration Institute (AHRI) product directory.\7\ DOE 
found that the number of models offered in each of the DHE product 
classes has decreased overall since the previous rulemaking. This 
supported the notion that the DHE market was shrinking and that product 
lines were mainly maintained as replacements for existing DHE units, 
and that new product lines generally were not being developed.
---------------------------------------------------------------------------

    \7\ The AHRI directory for DHE can be found at: https://www.ahridirectory.org/ahridirectory/pages/dht/defaultSearch.aspx. 
The DOE CCMS database can be found at: http://www.regulations.doe.gov/certification-data/.
---------------------------------------------------------------------------

    Second, DOE examined available technologies used to improve the 
efficiency of DHE. DOE contractors analyzed current products through 
product teardowns and engaged in manufacturer interviews to obtain 
further information in support of its analysis. In response to the 
March 2015 RFI, AHRI commented that the current energy conservation 
standards are close to if not at the maximum technology level for most 
product classes of DHE. (Docket EERE-2015-BT-STD-0003: AHRI, No. 7 at 
p. 4) During confidential manufacturer interviews, DOE received similar 
feedback regarding the small potential for improving efficiency over 
current standards for most product classes. Moreover, manufacturers 
suggested that because these units are primarily sold as replacement 
units, new designs or prototypes are generally not being pursued. DOE 
noted in the April 2016 NOPD that the same technology options (namely 
improved heat exchanger, induced draft, electronic ignition, and a two-
speed blower for wall fan-type furnaces) were considered as part of the 
previous DHE rulemaking analysis, and agreed that the technology 
options available for DHE likely have limited potential for achieving 
energy savings.\8\ Furthermore, the costs of technology options were 
anticipated to be similar or higher than in the previous rulemaking 
analysis due to reduced shipments and therefore the purchasing power of 
DHE manufacturers.
---------------------------------------------------------------------------

    \8\ DOE notes that for room heaters with input capacity up to 
20,000 Btu/h, the maximum AFUE available on the market increased 
from 59% in 2009 (only one unit at this input capacity was available 
on the market at that time) to 71% in 2015. DOE believes that this 
is due to heat exchanger improvements only because these units do 
not use electricity. Due to the small input capacity, DOE does not 
believe that this increase in AFUE (based on heat exchanger 
improvements relative to input capacity) is representative of or 
feasible for other room heater product classes.
---------------------------------------------------------------------------

    In addition to these technology options, DOE also noted that a 
condensing fan-type wall furnace with two input capacities (17,500 Btu/
h with a 90.2% AFUE rating, and 35,000 Btu/h with a 91.8% AFUE rating) 
had become available since the last rulemaking. DOE must set amended 
standards that result in the maximum improvement in energy efficiency 
that is technologically feasible (42 U.S.C.

[[Page 71328]]

6295(p)(1)) and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE 
generally considers technologies available in the market or in 
prototype products in its list of technologies for improving 
efficiency. Therefore, DOE determined that this condensing fan-type 
wall furnace represented the max-tech efficiency level for fan-type 
wall furnaces for this rulemaking. DOE received feedback during 
manufacturer interviews regarding the manufacturer production cost for 
the condensing unit that indicated that condensing models are 
significantly more expensive to manufacture than non-condensing models. 
Manufacturer feedback also indicated that shipments of these units are 
so low as to be negligible, as consumers are not willing to pay the 
high initial cost for such products. Furthermore, only one manufacturer 
currently makes a condensing fan-type wall furnace and others would 
need to make substantial investments in order to produce these units on 
a scale large enough to support a Federal minimum standard. Therefore, 
DOE concluded that this technology option, which was not considered in 
the analysis for the April 2010 Final Rule, would not be economically 
justified today when analyzed for the Nation as a whole. DOE believes 
that severe manufacturer impacts would be expected if an energy 
conservation standard were adopted at this level.
    Finally, DOE acknowledged in the April 2016 NOPD that the DHE 
industry had seen further consolidation, with the total number of 
manufacturers declining from six to four. Furthermore, according to 
manufacturers,\9\ shipments further decreased since the April 2010 
Final Rule, and therefore it would be more difficult for manufacturers 
to recover capital expenditures resulting from increased standards. DOE 
acknowledged that DHE units continue to be produced primarily as 
replacements and that the market is small, and expected that shipments 
would continue to decrease and amended standards would likely 
accelerate the trend of declining shipments. Moreover, DOE anticipated 
that small business impacts resulting from amended standards could be 
significant, as two of the four remaining manufacturers subject to DHE 
standards are small businesses. DOE believed that its conclusions 
regarding small businesses from the April 2010 Final Rule (i.e., that 
small businesses would be likely to reduce product offerings or leave 
the DHE market entirely if the standard was set above the level adopted 
in that rulemaking) were still valid concerns.
---------------------------------------------------------------------------

    \9\ Information obtained during confidential manufacturer 
interviews.
---------------------------------------------------------------------------

    In light of these considerations, DOE proposed in the April 2016 
NOPD not to amend its energy conservation standards for DHE. DOE 
tentatively concluded that amended standards for DHE could not be 
economically justified based on low and declining shipments, lack of 
cost-effective technology options, and the potential for severe impacts 
on small businesses.

C. Comments Received

    In response to the April 2016 NOPD, DOE received five comment 
submissions from Tyler McAnelly (individual), the American Public Gas 
Association (APGA), the Association of Home Appliance Manufacturers 
(AHAM), the California Investor Owned Utilities (CA IOUs), and the Air-
conditioning, Heating, and Refrigeration Institute (AHRI).\10\
---------------------------------------------------------------------------

    \10\ All public comment submissions can be found at: https://www.regulations.gov/docket?D=EERE-2016-BT-STD-0007.
---------------------------------------------------------------------------

    APGA, AHAM, and AHRI supported DOE's tentative determination that 
amended standards for DHE would not be economically justified. (APGA, 
No. 4 at p. 1-2; AHAM, No. 5 at p. 2; AHRI, No. 7 at p. 1-2) APGA 
reiterated that because the market is small, any increase in the 
standard would result in significant impacts on manufacturers. (APGA, 
No. 4 at p. 1) AHRI agreed that model offerings had been reduced and 
suggested that this was a result of the last rulemaking. (AHRI, No. 7 
at p. 1) They agreed with DOE's determination that an amended standard 
set at a condensing efficiency level for fan-type wall furnaces would 
severely impact manufacturers. (AHRI, No. 7 at p. 1) They also 
presented their estimates of the percent change in total shipments for 
the years 2010-2015 compared with the total shipments over the period 
2001-2006, estimating that wall furnace shipments were 21% less, direct 
vent wall furnace (a form of wall furnace) shipments were 31% less, and 
room heater shipments were 44% less. (AHRI, No. 7 at p. 2)
    McAnelly suggested that amended standards for DHE may be 
technologically feasible, may save a significant amount of energy such 
that DOE should not wait until such standards are economically 
justified, and that therefore DOE should consider adopting amended 
standards for DHE. (McAnelly, No. 3 at p. 1) In response, DOE notes 
that it is required by statute (42 U.S.C. 6295(o)(2)(A)) to establish 
energy conservation standards that are both technologically feasible 
and economically justified, and therefore cannot legally amend 
standards that cannot be shown to be economically justified based on 
the seven criteria found at 42 U.S.C. 6295(o)(2)(B).
    In response to the April 2016 NOPD, the CA IOUs urged DOE to 
consider energy conservation standards for portable electric heaters (a 
form of unvented home heating equipment). They cited reports indicating 
both a growing market, the overall energy use for these products, and 
the prevalence of thermostats and their potential to save energy. They 
also suggested that DOE modify the test procedure for unvented home 
heating equipment in order to reflect energy savings due to control 
features like thermostats, occupancy sensors, automatic shut-off, and 
network capabilities. (CA IOUs, No. 6 at p. 1-2)
    The DOE test procedure for unvented home heating equipment 
(appendix G), includes a calculation of annual energy consumption based 
on a single assignment of active mode hours for unvented heaters that 
are used as the primary heating source for the home. For unvented 
heaters that are not used as the primary heating source for the home, 
there are no provisions for calculating either the energy efficiency or 
annual energy consumption. Pursuant to 42 U.S.C. 6295(o)(3) DOE is 
prohibited from prescribing a new or amended standard for a covered 
consumer product if a test procedure has not been prescribed for that 
consumer product. As such, DOE cannot consider standards for these 
products at this time. DOE may consider amending the test procedures 
and establishing standards for unvented home heating equipment in the 
future.

III. Final Determination Not To Amend

    DOE did not receive any comments or data suggesting that DOE's 
initial analysis of the DHE market in the April 2016 NOPD was 
inaccurate. Therefore, due to the lack of advancement in the DHE 
industry since the April 2010 Final Rule in terms of product offerings, 
available technology options and associated costs, and declining 
shipment volumes, DOE continues to believe that amending the DHE energy 
conservation standards would impose a substantial burden on 
manufacturers of DHE, particularly to small manufacturers. DOE rejected 
higher TSLs during the previous DHE rulemaking due to significant 
impacts on industry profitability, risks of accelerated industry 
consolidation, and the likelihood that small manufacturers would 
experience disproportionate impacts that could lead them to

[[Page 71329]]

discontinue product lines or exit the market altogether. DOE believes 
that the market and the manufacturers' circumstances are similar to 
those found when DOE last evaluated amended energy conservation 
standards for DHE for the April 2010 Final Rule. As such, DOE believes 
that amended energy conservation standards for DHE would not be 
economically justified at any level above the current standard level 
because benefits of more stringent standards would not outweigh the 
burdens. Therefore, DOE has determined not to amend the DHE energy 
conservation standards.
    As discussed in section I.A, EPCA requires DOE to incorporate 
standby mode and off mode energy use into a single amended or new 
standard (if feasible) or prescribe a separate standard for standby 
mode and off mode energy consumption in any final rule establishing or 
revising a standard for a covered product, adopted after July 1, 2010. 
(42 U.S.C. 6295(gg)(3)(A)-(B)) Because DOE is not amending standards 
for DHE in this rule, DOE is not required to adopt amended standards 
that include standby and off mode energy use. DOE notes that fossil 
fuel energy use in standby mode and off mode is already included in the 
AFUE metric, and DOE anticipates that electric standby and off mode 
energy use is small in comparison to fossil fuel energy use.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    This final determination is not subject to review under Executive 
Order (E.O.) 12866, ``Regulatory Planning and Review.'' 58 FR 51735 
(October 4, 1993).

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) and a 
final regulatory flexibility analysis (FRFA) for any rule that by law 
must be proposed for public comment, unless the agency certifies that 
the rule, if promulgated, will not have a significant economic impact 
on a substantial number of small entities. As required by Executive 
Order 13272, ``Proper Consideration of Small Entities in Agency 
Rulemaking,'' 67 FR 53461 (August 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 
(http://energy.gov/gc/office-general-counsel).
    DOE reviewed this final determination under the provisions of the 
Regulatory Flexibility Act and the policies and procedures published on 
February 19, 2003. In this final determination, DOE finds that amended 
energy conservation standards for DHE would not be economically 
justified at any level above the current standard level because 
benefits of more stringent standards would not outweigh the burdens. 
This determination does not establish amended energy conservation 
standards for DHE. On the basis of the foregoing, DOE certifies that 
this determination will not have a significant economic impact on a 
substantial number of small entities. Accordingly, DOE has not prepared 
an FRFA for this final determination. DOE will transmit this 
certification and supporting statement of factual basis to the Chief 
Counsel for Advocacy of the Small Business Administration for review 
under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

    This final determination, which determines that amended energy 
conservation standards for DHE would not be economically justified at 
any level above the current standard level because benefits of more 
stringent standards would not outweigh the burdens, and imposes no new 
information or record keeping requirements. Accordingly, the Office of 
Management and Budget (OMB) clearance is not required under the 
Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

D. Review Under the National Environmental Policy Act of 1969

    In this final determination, DOE determines that amended energy 
conservation standards for DHE would not be economically justified at 
any level above the current standard level because benefits of more 
stringent standards would not outweigh the burdens. DOE has determined 
that review under the National Environmental Policy Act of 1969 (NEPA), 
Public Law 91-190, codified at 42 U.S.C. 4321 et seq. is not required 
at this time because standards are not being adopted.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 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. As this final 
determination determines that amended standards are not likely to be 
warranted for DHE, there is no impact on the policymaking discretion of 
the states. Therefore, no 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; (3) 
provide a clear legal standard for affected conduct rather than a 
general standard; and (4) promote simplification and burden reduction. 
61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 
3(a), section 3(b) of 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 determination meets 
the

[[Page 71330]]

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 them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf. This 
final determination contains neither an intergovernmental mandate nor a 
mandate that may result in the expenditure of $100 million or more in 
any year, so these UMRA requirements do not apply.

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 final determination will 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

    Pursuant to Executive Order 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights,'' 53 FR 
8859 (March 15, 1988), DOE has determined that this final determination 
will not result in any takings that might require compensation under 
the Fifth Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). DOE has reviewed this final determination 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.
    Because this final determination determines that amended standards 
for DHE are not warranted, it is not a significant energy action, nor 
has it been designated as such by the Administrator at OIRA. 
Accordingly, DOE has not prepared a Statement of Energy Effects.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' Id. at FR 2667.
    In response to OMB's Bulletin, 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: 
www.energy.gov/eere/buildings/peer-review.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
determination.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference, Intergovernmental relations, Small 
businesses.

    Issued in Washington, DC, on October 7, 2016.
David J. Friedman,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2016-24866 Filed 10-14-16; 8:45 am]
 BILLING CODE 6450-01-P