Energy Conservation Program: Energy Conservation Standards for Portable Electric Spas, 69082-69116 [2022-24290]

Download as PDF 69082 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules DEPARTMENT OF ENERGY 10 CFR Part 430 [EERE–2022–BT–STD–0025] RIN 1904–AF36 Energy Conservation Program: Energy Conservation Standards for Portable Electric Spas Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notification of data availability and request for comment. AGENCY: In this notice of data availability (‘‘NODA’’), the U.S. Department of Energy (‘‘DOE’’) is publishing data and certain preliminary analytical results related to DOE’s evaluation of potential energy conservation standards for portable electric spas (‘‘PESs’’). DOE requests comments, data, and information regarding the data and analysis. DATES: Written comments and information will be accepted on or before, January 17, 2023. ADDRESSES: Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at www.regulations.gov, under docket number EERE–2022–BT–STD–0025. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE– 2022–BT–STD–0025, by any of the following methods: Email: PortableElecSpas2022STD0025@ ee.doe.gov. Include the docket number EERE–2022–BT–STD–0025 in the subject line of the message. Postal Mail: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, Mailstop EE–5B, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 287–1445. If possible, please submit all items on a compact disc (‘‘CD’’), in which case it is not necessary to include printed copies. Hand Delivery/Courier: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L’Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287–1445. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies. No telefacsimiles (‘‘faxes’’) will be accepted. For detailed instructions on submitting comments and additional lotter on DSK11XQN23PROD with PROPOSALS2 SUMMARY: VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 information on this process, see section IV of this document. To inform interested parties and to facilitate this rulemaking process, DOE has prepared preliminary analytical data, which is available on the rulemaking docket at: www.regulations.gov/docket/EERE2022-BT-STD-0025. Docket: The docket for this activity, which includes Federal Register notices, comments, public meeting transcripts, 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, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available. The docket web page can be found at www.regulations.gov/docket/EERE2022-BT-STD-0025. The docket web page contains instructions on how to access all documents, including public comments in the docket. See section IV.A of this document for information on how to submit comments through www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE–2J, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586– 9870. Email ApplianceStandardsQuestions@ ee.doe.gov. Ms. Kristin Koernig, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586–3593. Email: Kristin.koernig@hq.doe.gov. For further information on how to submit a comment, review other public comments and the docket, contact the Appliance and Equipment Standards Program staff at (202) 287–1445 or by email: ApplianceStandardsQuestions@ ee.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction A. Authority B. Rulemaking Process C. Deviation From Appendix A II. Background A. Current Process III. Summary of the Analyses Performed by DOE A. Market and Technology Assessment 1. Product Description 2. Potential Product Classes a. Inflatable Spas PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 b. Exercise Spas c. Standard Spas d. Combination Spas 3. Manufacturers and Industry Structure 4. Other Regulatory Programs 5. Technology Options for Improving Efficiency a. Insulation b. Cover c. Sealing d. Radiant Barrier e. Insulated Ground Cover f. Dedicated Circulation Pump g. Heat Pump B. Screening Analysis C. Engineering Analysis 1. Efficiency Analysis 2. Cost Analysis 3. Engineering Results D. Markups Analysis 1. Distribution Channels 2. Markups 3. Sales Taxes 4. Summary of Markups E. Energy Use Analysis 1. Consumer Sample 2. Typical Annual Operating Hours (npy) 3. Ambient Temperature (Tamb) 4. Operating Water Temperature (Top) 5. Annual Energy Use Results F. Life-Cycle Cost and Payback Period Analyses 1. Inputs to the Life-Cycle Cost Model a. Inputs to Total Installed Cost b. Inputs to Operating Costs 2. Product Lifetime a. Hard-Sided Spas b. Inflatable Spas 3. Rebound Effect 4. Energy Efficiency Distribution in the NoNew-Standards Case 5. Discount Rates 6. Payback Period Analysis 7. Consumer Results G. Shipments Analysis 1. Approach To Shipments and Stock Models 2. Initial Stock Estimates a. Hard-Sided Spas Stock b. Inflatable Spas Stock 3. Product Saturations 4. Determining Annual Spa Shipments a. Initial Shipments b. New Spa Shipments c. Spa Replacements d. Demolitions e. Product Lifetimes f. Future Portable Electric Spa Shipments g. Calculating Shipments and Stock 5. Impacts of Increased Product Costs on Shipments 6. Results for 30-Years of Shipment (2029– 2058) H. National Impact Analysis 1. Product Efficiency Trends 2. National Energy Savings a. Site-to-Power-Plant Energy Conversion Factors b. Full-Fuel Cycle Multipliers 3. Net Present Value Analysis 4. Candidate Standard Levels 5. Results for 30-Years of Shipments (2029–2058) IV. Public Participation A. Submission of Comments B. Issues on Which DOE Seeks Comment E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules V. Approval of the Office of the Secretary I. Introduction lotter on DSK11XQN23PROD with PROPOSALS2 A. Authority The Energy Policy and Conservation Act, as amended (‘‘EPCA’’),1 authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291–6317) Title III, Part B 2 of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles, which, in addition to identifying particular consumer products and commercial equipment as covered under the statute, permits the Secretary of Energy to classify additional types of consumer products as covered products. (42 U.S.C. 6292(a)(20)) In a notice of final determination of coverage (‘‘NOFD’’) published in the Federal Register on September 2, 2022 (‘‘September 2022 NOFD’’), DOE classified PESs as a covered product pursuant to 42 U.S.C. 6292(b)(1) after determining that classifying PESs as a covered product is necessary or appropriate to carry out the purposes of EPCA and that average annual household energy use for PESs is likely to exceed 100 kilowatt-hours per year. 87 FR 54123. The relevant purposes of EPCA include: (1) To conserve energy supplies through energy conservation programs, and, where necessary, the regulation of certain energy uses; and (2) To provide for improved energy efficiency of motor vehicles, major appliances, and certain other consumer products. (42 U.S.C. 6201(4) and (5)) First, DOE determined that the coverage of PESs is both necessary and appropriate to carry out the purposes of EPCA on the basis of market data, the existence of technology options for improving energy efficiency of PESs, and supporting argument of commenters in response to the notice of proposed determination of coverage. 87 FR 54123, 54125–54126. DOE then determined that estimated household energy use was likely to exceed 100 kWh/year based on market data and certification data reported to the California Energy Commission’s (‘‘CEC’’) Modernized Appliance Efficiency Database System (‘‘MAEDbS’’).3 In the September 2022 1 All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116–260 (Dec. 27, 2020), which reflect the last statutory amendments that impact Parts A and A–1 of EPCA. 2 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. 3 CEC Modernized Appliance Efficiency Database System. Available at VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 NOFD, DOE had estimated average energy consumption of 1,699 kWh per year per household, which matched estimates submitted by commenters in response to the notice of proposed determination of coverage. Id. at 87 FR 54126–54127. Having determined that classifying PESs as a covered product was necessary or appropriate to carry out the purposes of EPCA and that average annual household energy use for PESs was likely to exceed 100 kilowatt-hours per year, DOE classified PESs as a covered product. Id. at 87 FR 54127. Additionally, in the September 2022 NOFD, DOE established a definition of the term ‘‘portable electric spa,’’ which was ‘‘a factory-built electric spa or hot tub, supplied with equipment for heating and circulating water at the time of sale or sold separately for subsequent attachment.’’ Id. at 87 FR 54125; see also 10 CFR 430.2. As PESs are now a covered product, EPCA allows DOE to prescribe an energy conservation standard for any type (or class) of covered products of a type specified in 42 U.S.C. 6292(a)(20) if the requirements of 42 U.S.C. 6295(o) and (p) are met and the Secretary determines that— (A) the average per household energy use within the United States by products of such type (or class) exceeded 150 kilowatt-hours (or its Btu equivalent) for any 12-month period ending before such determination; (B) the aggregate household energy use within the United States by products of such type (or class) exceeded 4,200,000,000 kilowatt-hours (or its Btu equivalent) for any such 12month period; (C) substantial improvement in the energy efficiency of products of such type (or class) is technologically feasible; and (D) the application of a labeling rule under 42 U.S.C. 6294 to such type (or class) is not likely to be sufficient to induce manufacturers to produce, and consumers and other persons to purchase, covered products of such type (or class) which achieve the maximum energy efficiency which is technologically feasible and economically justified. (42 U.S.C. 6295(l)(1)) EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notification of determination that standards for the product do not need to be amended, or a notice of proposed cacertappliances.energy.ca.gov. (last accessed October 26, 2022). PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 69083 rulemaking (‘‘NOPR’’) including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) Not later than three years after issuance of a final determination not to amend standards, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B)) Under EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) DOE is publishing this NODA to collect data and information to inform its decision to establish energy conservation standards for PESs consistent with its obligations under EPCA. B. Rulemaking Process DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including PESs. As noted, EPCA requires that any new or amended energy conservation standard prescribed by the Secretary of Energy (‘‘Secretary’’) be designed to achieve the maximum improvement in energy efficiency (or water efficiency for certain products specified by EPCA) 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)) The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.4 For example, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products or equipment with relatively constant demand. In evaluating the significance of energy savings, DOE considers differences in primary energy and full-fuel cycle 4 Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021). E:\FR\FM\17NOP2.SGM 17NOP2 69084 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules (‘‘FFC’’) effects for different covered products and equipment when determining whether energy savings are significant. Primary energy and FFC effects include the energy consumed in electricity production (depending on load shape), in distribution and transmission, and in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and thus present a more complete picture of the impacts of energy conservation standards. Accordingly, DOE evaluates the significance of energy savings on a case-by-case basis, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to confront the global climate crisis, among other factors. To determine whether a standard is economically justified, EPCA requires that DOE determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors: 1. The economic impact of the standard on the 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 products likely to result from the standard; 5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; 6. The need for national energy and water conservation; and 7. Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) DOE fulfills these and other applicable requirements by conducting a series of analyses throughout the rulemaking process. Table I.1 shows the individual analyses that are performed to satisfy each of the requirements within EPCA. TABLE I.1—EPCA REQUIREMENTS AND CORRESPONDING DOE ANALYSIS EPCA requirement Corresponding DOE analysis Significant Energy Savings ....................................................................... Technological Feasibility .......................................................................... Economic Justification: Economic impact on manufacturers and consumers ........................ Lifetime operating cost savings compared to increased cost for the product. Total projected energy savings ......................................................... Impact on utility or performance ....................................................... Impact of any lessening of competition ............................................ Need for national energy and water conservation ............................ lotter on DSK11XQN23PROD with PROPOSALS2 Other factors the Secretary considers relevant ................................ • • • • • • Shipments Analysis. National Impact Analysis. Energy Analysis. Market and Technology Assessment. Screening Analysis. Engineering Analysis. • • • • • • • • • • • • • • • • • • • Manufacturer Impact Analysis. Life-Cycle Cost and Payback Period Analysis. Life-Cycle Cost Subgroup Analysis. Shipments Analysis. Markups for Product Price Analysis. Energy Analysis. Life-Cycle Cost and Payback Period Analysis. Shipments Analysis. National Impact Analysis. Screening Analysis. Engineering Analysis. Manufacturer Impact Analysis. Shipments Analysis. National Impact Analysis. Employment Impact Analysis. Utility Impact Analysis. Emissions Analysis. Monetization of Emission Reductions Benefits.5 Regulatory Impact Analysis. 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. (42 U.S.C. 6295(o)(2)(B)(iii)) 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 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 5 On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22–30087) granted the federal government’s emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21–cv– 1074–JDC–KK (W.D. La.). As a result of the Fifth Circuit’s order, the preliminary injunction is no longer in effect, pending resolution of the federal government’s appeal of that injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in that case from ‘‘adopting, employing, treating as binding, or relying upon’’ the interim estimates of the social cost of greenhouse gases—which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021—to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and permissible by law. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 lotter on DSK11XQN23PROD with PROPOSALS2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules generally available in the United States. (42 U.S.C. 6295(o)(4)) Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of product that has the same function or intended use, if DOE determines that products within such group: (A) consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the 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)) Finally, pursuant to the amendments contained in the Energy Independence and Security Act of 2007 (‘‘EISA 2007’’), Public Law 110–140, 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)) Before proposing a standard, DOE typically seeks public input on the analytical framework, models, and tools that DOE intends to use to evaluate standards for the product at issue and the results of preliminary analyses DOE performed for the product. See section IV.B of this document for a list of analysis and data on which DOE seeks comment. DOE is examining whether to establish energy conservation standards for PESs pursuant to its obligations under EPCA. This notification announces the availability of preliminary analytical results and data. C. Deviation From Appendix A In accordance with section 3(a) of 10 CFR part 430, subpart C, appendix A VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 (‘‘appendix A’’), DOE notes that it is deviating from the provision in appendix A regarding the pre-NOPR stage for an energy conservation standard rulemaking. Section 6(d)(2) of appendix A specifies that the length of the public comment period for a preNOPR will vary depending upon the circumstances of the particular rulemaking, but will not be less than 75 calendar days. For this NODA, DOE is providing a 60-day comment period, which DOE deems appropriate given the publication of three antecedent notices relating to PESs, two of which, themselves, offered opportunity for comment related to PESs and all of which would be understood by interested parties as a signal that DOE would be evaluating potential energy conservation standards. Those three antecedent notices were the proposed determination of portable electric spas as a covered consumer product (87 FR 8745 (Feb. 16, 2022)), the final determination of portable electric spas as a covered consumer product (87 FR 54123 (Sept. 2, 2022)), and the proposed rulemaking for the test procedure for portable electric spas (87 FR 63356 (Oct. 18, 2022)), respectively. Further, a 60day comment period will allow DOE to review comments received in response to this NODA and use them to inform the analysis of the product considered in evaluating potential energy conservation standards. II. Background A. Current Process DOE has not previously conducted an energy conservation standards rulemaking for PESs. As described in section I.A of this NODA, DOE previously determined that PESs met the criteria for classification as a covered product pursuant to EPCA and classified PESs as a covered product. 87 FR 54123. Following this determination of coverage, DOE published a NOPR proposing a test procedure for PESs in the Federal Register on October 18, 2022. 87 FR 63356. In that NOPR, DOE proposed to incorporate by reference an industry test method published by the Pool and Hot Tub Alliance (‘‘PHTA’’) 6 in partnership with the International Code Council (‘‘ICC’’) and approved by the American National Standards Institute (‘‘ANSI’’), ANSI/APSP/ICC–14 2019, ‘‘American National Standard for 6 The PHTA is a result of a 2019 merger between the Association of Pool and Spa Professionals (‘‘APSP’’) and the National Swimming Pool Foundation (‘‘NSPF’’). The reference to APSP has been retained in the ANSI designation of ANSI/ APSP/ICC–14 2019. PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 69085 Portable Electric Spa Energy Efficiency’’ (‘‘APSP–14 2019’’) with certain exceptions and additions. 87 FR 63356, 63361–63369. The proposed test method produces a measure of the energy consumption of PESs (i.e., the normalized average standby power) that represents the average power consumed by the spa, normalized to a standard temperature difference between the ambient air and the water in the spa, while the cover is on and the product is operating in its default operation mode. Id. at 87 FR 63361. Comments received to date as part of the coverage determination rulemaking have helped DOE identify and resolve issues related to the NODA. III. Summary of the Analyses Performed by DOE For the product covered in this NODA, DOE conducted in-depth technical analyses in the following areas: (1) engineering; (2) markups to determine product price; (3) energy use; (4) life cycle cost (‘‘LCC’’) and payback period (‘‘PBP’’); and (5) national impacts. The preliminary analytical results that present the methodology and results of each of these analyses that are not included in the body of this notice are available at: www.regulations.gov/docket/EERE2022-BT-STD-0025. Specifically, DOE is making available the following data and analysis: (1) Approved and Archived Portable Electric Spas exported from the CEC’s Meads. Data as of August 8, 2022. (2) DOE’s testing results for a simple inflatable portable electric spa. Testing followed methods specified in APSP–14 2019 and attempted to isolate the effects of various test conditions and design options. (3) Reference table for DOE’s proposed efficiency levels for noninflatable and inflatable portable electric spas, including particular changes in specifications and the estimated effects on energy consumption and costs thereof. DOE also conducted, and has included in this NODA, several other analyses that either support the major analyses or are preliminary analyses that will be expanded if DOE determines that a NOPR is warranted to propose new energy conservation standards. These analyses include: (1) the market and technology assessment; (2) the screening analysis, which contributes to the engineering analysis; and (3) the shipments analysis, which contributes to the LCC and PBP analysis and the national impact analysis (‘‘NIA’’). In addition to these analyses, DOE has begun preliminary work on the E:\FR\FM\17NOP2.SGM 17NOP2 69086 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules manufacturer impact analysis and has identified the methods to be used for the consumer subgroup analysis, the emissions analysis, the employment impact analysis, the regulatory impact analysis, and the utility impact analysis. DOE will expand on these analyses in the NOPR should one be issued. lotter on DSK11XQN23PROD with PROPOSALS2 A. Market and Technology Assessment DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including general characteristics of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment include: (1) a determination of the scope of the rulemaking and product classes; (2) manufacturers and industry structure; (3) existing efficiency programs; (4) shipments information; (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of the product. 1. Product Description DOE referred to PES product literature and to its communications with spa manufacturers to inform its understanding of the technology and the different types of products within the industry. Relevant product literature includes APSP–14 2019, the current industry test procedure and energy conservation standards, materials related to state rulemakings, academic papers, and marketing materials.7 In particular, DOE also made significant use of the following sources: the final staff report for CEC’s 2018 Appliance Efficiency Rulemaking for Spas, ‘‘Analysis of Efficiency Standards and Marking for Spas;’’ 8 the Codes and Standards Enhancement (‘‘CASE’’) Initiative submission from California investor-owned utilities in support of CEC’s 2012 rulemaking for spas, ‘‘Analysis of Standards Proposal for Portable Electric Spas;’’ 9 a 2018 graduate thesis from California State University, Sacramento, ‘‘Improving Energy Efficiency of Portable Electric Spas by Improving Its Thermal 7 APSP–14 2019 is available at: webstore.ansi.org/ standards/apsp/ansiapspicc142019. 8 California Energy Commission. ‘‘Final Staff Report—Analysis of Efficiency Standards and Marking for Spas.’’ February 2, 2018. 9 Codes and Standards Enhancement (CASE) Initiative. ‘‘Analysis of Standards Proposal for Portable Electric Spas.’’ May 15, 2014. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Conductivity Properties;’’ 10 and a 2012 graduate thesis from California Polytechnic State University, San Luis Obispo, ‘‘Measurement and Analysis of the Standby Power of Twenty-Seven Portable Electric Spas.’’ 11 PES manufacturers were contacted via the PHTA. APSP–14 2019 defines a spa as ‘‘a product intended for the immersion of persons in temperature-controlled water circulated in a closed system’’ and a portable electric spa as ‘‘a factory-built electric spa or hot tub, supplied with equipment for heating and circulating water at the time of sale or sold separately for subsequent attachment.’’ DOE adopted this definition of ‘‘portable electric spa’’ without modification in the September 2022 NOFD. 87 FR 54123, 54125. Integral heating and circulation equipment are features that distinguish PESs from similar products in inflatable or above-ground pools and therapy bathtubs or permanent residential spas, respectively. Beyond these characteristic features, PESs often also include chemical systems for water sanitation as well as features such as additional lighting, audio systems, and internet connectivity for more precise and accessible spa monitoring. DOE requests comment on the previous description of the target technology and the scope of this product, including whether any modifications or additions are necessary to characterize this product. 2. Potential Product Classes DOE must specify a different standard level for a type or class of product that has the same function or intended use if DOE determines that products within such group: consume a different kind of energy from that consumed by other covered products within such type (or class); or have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate. (Id.) Any rule prescribing such a standard must include an explanation of the basis on which such 10 Ramos, Nestor. ‘‘Improving Energy Efficiency of Portable Electric Spas by Improving Its Thermal Conductivity Properties.’’ Spring, 2018. 11 Hamill, Andrew. ‘‘Measurement and Analysis of the Standby Power of Twenty-Seven Portable Electric Spas.’’ September, 2012. PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 higher or lower level was established. (42 U.S.C. 6295(q)(2)) DOE observed several distinguishable categories of products in the PES market that provide consumers with unique utility that could necessitate a different standard level for energy consumption. a. Inflatable Spas Inflatable spas are characterized by collapsible and storable bodies. They are usually made of a flexible polyvinyl chloride (‘‘PVC’’) plastic tub, which is filled with air during use and which connects to a control unit external to the tub but still integral to the product as distributed in commerce. Inflatable spas are often used seasonally and, during seasons when inflatable spas are not in use, they are often deflated and put in storage. Correspondence with inflatable spa manufacturers indicated that inflatable spas provide unique utility as a result of their low price relative to other portable electric spas and their ability to be collapsed and moved more easily than other spas. Inflatable spas often have maximum water temperatures settings greater than 100 °F, and the PVC construction that allows them to be less expensive and collapsible also decrease their ability to retain heat. This characteristic generally makes the power demand of inflatable spas higher than that of other portable electric spas. As a result, DOE tentatively concludes that inflatable spas are not able to be subject to the same energy consumption limits as other spas. b. Exercise Spas Exercise spas are characterized by their large size and ability to generate a water flow strong enough to allow for physical activity such as swimming in place. Exercise spas are usually composed of a rectangular rigid synthetic plastic cabinet topped with a rigid vacuum-formed acrylic shell. The cavity between the cabinet and acrylic shell houses components such as pumps and heaters and also allows for dense insulating materials to help the spa retain heat. Exercise spas provide unique utility in their capacity to facilitate physical activity inside the spa for a person as large as the 99th Percentile Man as specified in ANSI/ APSP/ICC–16.12 Exercise spas may have maximum water temperatures settings above or below 100 °F. According to manufacturers, consumers tend to set the water temperature of exercise spas to less than 100 °F when using exercise 12 ANSI/APSP/ICC–16 is available at https:// webstore.ansi.org/standards/apsp/ansiapspicc 162017PA2021. E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules spas for physical activity. And exercise spas’ capacity to house dense insulation makes them able to retain heat and reduce energy consumption more than inflatable spas. c. Standard Spas Standard spas are neither collapsible nor designed for use in recreational physical activities. Like exercise spas, they are typically composed of rigid plastic cabinets affixed to an acrylic shell. However, they may also be constructed of other rigid materials. DOE is aware of some standard spas whose exteriors are made entirely of rotationally molded plastic. Standard spas are not designed to generate a water flow strong enough to allow for swimming in place and are usually not large enough to allow for a person to swim in place. Standard spas offer unique utility in comparison to inflatable spas in that they typically have more and higher performance jet pumps, as well as the capacity for more additional features such as lights, water features, or stereo systems. Standard spas usually have maximum water temperature settings of above 100 °F. Like exercise spas, the rigid and relatively large space between the perimeter of the spa and the spa shell allows for dense insulation, which makes standard spas able to reduce energy consumption more than inflatable spas. lotter on DSK11XQN23PROD with PROPOSALS2 d. Combination Spas Combination spas are single contiguous spas consisting of distinct exercise spa and standard spa sections, each of which has an independent control for the setting of water temperature. Combination spas provide unique utility in their capacity to provide distinct reservoirs intended for physical activity and also therapy and leisure. Like standard and exercise spas, combination spas are able to house dense insulation, increasing their ability to retain heat and to lower their energy consumption. DOE’s descriptions of these potential product classes were largely informed by the current industry standard, APSP– 14 2019. In this NODA, standard spas, exercise spas, and combination spas are sometimes collectively referred to as ‘‘non-inflatable’’ spas or ‘‘hard-sided’’ spas. And in this NODA, inflatable spas are often treated separately because their construction is associated with limited technology options and higher energy consumption. Exercise spas, standard spas, and combination spas, however, are often treated similarly as non-inflatable spas. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 DOE requests comment on whether the distinction between categories of PESs, as described in section III.A.2 of this NODA, is significant enough to warrant the establishment of different product classes for each type. 3. Manufactures and Industry Structure The PES market is largely split between inflatable spas, standard spas, and exercise and combination spas, with each type catering to different consumer segments that do not significantly overlap. Similarly, there is no significant overlap between the manufacturers of inflatable spas and non-inflatable spas, although one manufacturer will often make all of the standard, exercise, and combination spas. The inflatable spa market is concentrated in a small number of manufacturers characterized by large production volumes, vertical integration, and manufacturing plants located outside of the United States. The market for non-inflatable spas, however, is more fragmented among manufacturers who purchase most spa components and whose manufacturing plants are located in North America. Manufacturers of both inflatable and non-inflatable spas often produce models under multiple brands. In particular, manufacturers of noninflatable spas may also offer different brands, and even product lines within a brand, at multiple price points. Features that tend to correlate to the price point of a spa include the number and strength of therapy jets, the quality of cabinet materials, and the presence of additional features, such as lighting or stereo systems. DOE requests comment on the above description of the PES manufacturers and the PES industry structure and whether any other details are necessary for characterizing the industry or for determining whether energy conservation standards for PESs might be justified. 4. Other Regulatory Programs As part of its analysis, DOE surveyed existing regulatory programs concerning the energy consumption of PESs. These regulatory programs include both programs that enforce mandatory limits in their respective jurisdictions and voluntary programs. The first such mandatory program was CEC’s mandatory Title 20 regulations concerning PESs, which were adopted in 2004. Over the next decade, four other states adopted mandatory standards, in some cases following CEC’s regulations and, in other cases, creating their own, such as Arizona’s Title 44 adopted in 2009. In 2014, PHTA PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 69087 created the first iteration of a voluntary industry standard in APSP–14 2014, which measures and sets limits for the energy required to maintain the set temperature and circulate water while the spa is not in use, known as ‘‘standby power.’’ The most recent development in test procedures and energy conservation standards for PESs was the publication of APSP–14 2019 in 2019. This revised version of the APSP–14 (i.e., APSP–14 2019) was created in collaboration with CEC and was promptly adopted as California’s new standard. The 2019 version revised some test methods and lowered the maximum allowable standby power for exercise and combination spas from those in APSP–14 2014. APSP–14 2019 also included standby power limits for inflatable spas for the first time. As of July 2022, nine states have adopted APSP–14 2019, three states have adopted the previous version APSP–14 2014, and Arizona and Connecticut follow Arizona’s 2009 Title 44 provisions and California’s 2006 Title 20 provisions, respectively. DOE is also aware of standards in the European Union and Canada. The European Union standard, CSN EN 17125, covers a wider range of products and concerns safety requirements and test methods for energy consumption.13 CSN EN 17125 specifies labeling requirements for energy consumption but does not specify a maximum limit for the energy consumption of PESs. A Canadian national standard, Energy Performance of Hot Tubs and Spas, reaffirmed in 2021, (‘‘CSA C374:11’’), provides both a test method and energy performance requirements for PESs.14 CSA C374:11 cites CEC’s Title 20, and its test procedure and energy conservation standards are similar to those in APSP–14 2019. DOE requests information on any voluntary or mandatory test procedure and energy conservation standards for PESs that are not mentioned in section III.A.4 of this NODA. 5. Technology Options for Improving Efficiency DOE reviewed product literature and conducted manufacturer interviews to survey the technologies that could lower the normalized average standby power of a PES and are currently available for use in the portable electric spa market. To identify the most relevant technology 13 CSN EN 17125 is available at: https://www.enstandard.eu/csn-en-17125-domestic-spas-whirlpoolspas-hot-tubs-safety-requirements-and-testmethods/. 14 CSA C374:11 (R2021) is available at: https:// www.csagroup.org/store/product/2703317/. E:\FR\FM\17NOP2.SGM 17NOP2 69088 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 options, DOE researched the components of PESs that consume energy and the design characteristics that affect energy consumption. DOE’s research and data submitted by manufacturers suggest that the most substantial energy uses of a portable electric spa in standby mode are the energy use associated with maintaining the water temperature and circulating the water. As a result, DOE’s analysis considered technology options that focus on these two systems. Because their designs are quite different, inflatable spas and non-inflatable spas have different instances of applicable technology options, although the engineering motivations behind the types of technology options are similar. DOE’s research did not identify reasons that technology options would differ between standard spas, exercise, and combination spas. Accordingly, the same technology options are considered for each spa variety. DOE seeks comment generally on the descriptions of relevant energy-saving technology options as described in section III.A.5 of this document, including whether any options require revised or additional details to characterize each option’s effects on a PES’s energy consumption. a. Insulation To minimize heat losses, PESs require insulating materials between the hot spa water and cool ambient air. This NODA uses the unmodified term ‘‘insulation’’ to refer to the insulation in the walls and floor of the spa, as opposed to any insulating materials in the cover. In non-inflatable spas, this material is often a polyurethane spray foam, which is applied to the bottom of the spa shell. Foam can also be applied in sheets inside the perimeter of the spa cabinet. Foam insulation can be any selected thickness, with the maximum amount of foam known as ‘‘full-foam’’ insulation, which entirely fills the space between the spa shell and the cabinet. Even in full-foam applications, however, foam or other insulating materials cannot totally encapsulate a spa’s pumps or heating element. The most typical foam used has a density of 0.5 pounds per cubic foot. Both thicker and denser insulation increase, up to a point, the total R-value of the insulation, which then reduces the energy consumption of spas. However, the marginal effectiveness of thicker or denser insulation in the walls and floor, as measured in R-value, decreases progressively. Although in practice foam may be added in arbitrary increments, the efficiency analysis in section III.C.1 considers two specific VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 levels of additional insulation. The first corresponds to R–6 added in the spa’s wall sections to prevent heat loss from the water outward to the ambient air and to R–3.5 added in the floor section to prevent heat loss from the water downward to the ground. The second corresponds to R–6 added in the wall sections. The efficiency analysis also considers a design option in which two inches of 0.5 pound per cubic foot of foam is replaced with 2 pound per cubic foot of foam. Inflatable spas are typically only insulated by air pockets, their PVC material, and flexible foam integrated into their covers and, especially, into attachable ‘‘jackets.’’ To maintain its collapsible and storable characteristics, however, many other methods of adding foam or other insulating materials to non-inflatable spas are not applicable. In response to mandatory energy consumption limits in some jurisdictions, some inflatable spa manufacturers developed a ‘‘jacket,’’ which has foam integrated into it and surrounds the inflated spa. During correspondence with DOE, inflatable manufacturers reported that such a jacket or a similar design is necessary for reducing the energy consumption below maximum levels as specified by the most recent industry and CEC standards. DOE seeks comment regarding use of additional or improved insulation as a technology option for PESs and, in particular, what would limit adding further insulation to a PES. b. Cover Heat loss, which drives PES energy consumption, can also occur through the top face of a spa, in addition to through the walls and floor. Covers prevent this heat loss by acting as an insulator against conductive heat transfer and also as a convection and vapor barrier to maintain high humidity levels above the water surface, thus preventing evaporative cooling. In noninflatable spas, spa covers are typically made of rigid polystyrene foam panels wrapped in moisture barriers and protective vinyl sheaths. Most covers on non-inflatable spas have a central hinge, which allows consumers to remove and otherwise handle them more easily. The hinge is typically created by joining two pieces of rigid foam with a patch of vinyl. To allow for easy folding, there is typically a space of one to two inches between the two sections. This design is known as a ‘‘dual-hinged’’ design because either half may be lifted first. Like insulation in the body of noninflatable spas, the main method for increasing the thermal resistance of a PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 cover is to increase its thickness or density. Also, like insulation in the body of an inflatable spa, the marginal effectiveness of additional cover thickness or density decreases as the thickness or density increase. Product literature and online retail data suggest that the ranges of cover thicknesses and densities available are two inches to six inches and one pound per cubic foot to two pounds per cubic foot, respectively. Inflatable spa covers consist of thin flexible foam material that is about onehalf inch thick and surrounded by a flexible PVC tarp. In lieu of additional foam that would reduce the cover’s ability to collapse or to be stored, some inflatable spa manufacturers distribute spas with inflatable inserts, which end users may place in a pouch on the bottom of the cover. These inserts reduce the heat loss through the top face of the spa by adding additional insulating pockets of air between the water and ambient air and by improving the seal of the cover. DOE seeks comment regarding use of improved covers as a technology option for PESs and, in particular, what would limit further energy performance increases of PES covers. c. Sealing A particularly important aspect of the performance of a spa cover is that it largely depends on the extent to which the cover is able to create an airtight seal between the area above the spa’s water and the area surrounding the spa. Inadequate seals allow air to exchange between each area, resulting in heat losses through evaporation and convection. Areas through which air typically escapes are around the edge of the cover, where the cover meets the flange created by the top of the spa shell, and the central double-hinging area of the cover, if the cover does have a hinge. A common method of addressing the seal around the edge of the cover is by ensuring both the spa flange and the bottom of the cover are as flat as possible. To address air leaks through a hinge in the cover, manufacturers might insert a separate piece of foam to fill the gap between each half of the cover created by the hinge. This ‘‘hinge seal’’ is also composed of rigid foam sheathed in a protective material, such as vinyl, and is connected to the stretch of material connecting each section of the spa cover. The hinge seal is not connected to each section, however, allowing for easy folding. Manufacturers might also opt for a ‘‘single-hinged’’ folding design, in which there is no space gap between vertical edges of each spa cover sections. Instead, the edges of each E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 section of the cover are angled, with one overlapping the other. This design eliminates the gap between sections. With this design, only the section of the cover resting on top of the other at the hinge can be lifted first. Covers can typically be buckled into position, but manufacturers and product literature suggest that, when fastened, these buckles do not to a large extent affect the seal but are mostly intended for safety. Correspondence with manufacturers has also suggested that the cover cannot be perfectly sealed. Because pressure will build as a result of thermal expansion and contraction of interior air and water, as well as from the potential addition of air through jets, some amount of air will be forced to escape through even very fortified spa covers. Manufacturers have indicated to DOE that similar sealing strategies addressing air from leaking out of the spa cabinet could also reduce a spa’s normalized average standby power. However, DOE did not identify evidence of air leakage through spa regions other than the cover. Accordingly, no technology options or technologies were analyzed that explicitly address the sealing of other areas than the cover of the spa. DOE seeks comment regarding use of improved sealing as a technology option for PESs, regarding whether air leakage is significant at PES locations other than the cover, and regarding what would limit further sealing improvements energy performance increases of PES covers. d. Radiant Barrier The insulation and sealing methods described previously reduce conductive and convective heat losses, respectively. Energy can also leave the spa through radiative heat transfer. This type of heat transfer can be reduced by the application of a radiant barrier that reflects radiation back toward the center of the spa. Commonly available radiant barriers are composite ‘‘thermal blankets’’ made of a thin insulating material, such as bubble wrap, with reflective foil on both of its sides. DOE is aware of several manufacturers who use such a material or similar ones as a method of reducing their spas’ heat losses. Correspondence with manufacturers and DOE’s own research indicates that radiant barriers require an air gap between them and the radiating heat source to be effective. Like insulation, the marginal effectiveness of radiant barriers decreases as the spa reduces its heat losses via other methods. DOE seeks comment on the description of radiant barriers and data VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 on the relative effects of radiant barriers when paired with different amounts of insulation and different thicknesses of adjacent air gaps. e. Insulated Ground Cover To reduce heat conducted from the bottom of a spa to the ground, it is possible to install spas on top of a layer of insulating material. While noninflatable spas are not typically distributed with such layers, an example of this application is in the current industry test procedure, APSP–14 2019, which allows for spas to be placed on top of two inches of polyisocyanurate sheathed with at least half an inch of plywood during testing. Inflatable spas, however, are often distributed with thin foam mats meant to be placed underneath the spas. These mats are typically to protect them from debris which might puncture the spas’ PVC material. DOE has also observed similar, thicker ground covers available for purchase, which are marketed on the basis of their insulating capacities in addition to protective capacities. These thicker ground covers reduce the conductive heat transfer through the bottom of the spa to the ground. Based on their expected effectiveness and availability on the market, DOE considered insulated ground covers as a viable technology option for inflatable PESs. For this NODA, DOE did not explicitly model the addition of an insulated ground cover as a technology option for non-inflatable PESs because it remains unclear how DOE’s proposed test procedure for PESs may affect manufacturers’ installation instructions (e.g., to use an insulated ground cover) and consequently typical PES installation configurations. Additionally, existing performance data for PESs does not typically disclose presence of an insulated ground cover. Due to this uncertainty and the fact that such an addition into DOE’s model would change the effects of other design options, DOE employed the more conservative approach of not modeling insulated ground covers as a technology option for non-inflatable PESs in this NODA. However, DOE may do so in the future as indicated by comment or data. In contrast to the approach taken for non-inflatable PESs, DOE did include insulated ground covers as a technology option for inflatable spas because of the abundance of currently available products marketed as insulating ground covers for that spa type. DOE requests comment regarding whether insulated ground covers warrant inclusion in the set of technology options for non-inflatable PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 69089 PESs, including whether non-inflatable PESs are typically installed on top of insulated ground covers and whether that installation would be likely to change in view of the proposed DOE test procedure (see 87 FR 63356). f. Dedicated Circulation Pump Most non-inflatable spas use twospeed jet pumps for powering therapy jets and for water circulation. These jet pumps operate at high speed when powering therapy jets and low speed when used only for circulation purposes. The overall efficiency of a pump depends on several factors, including the hydraulic efficiency of the impeller and casing, the geometry of the plumbing system, and the electrical efficiency of the pump’s motor. However, it is possible to simplify the comparison of the efficiencies of two differently sized pumps operating at the same motor speed. In general, when a pump operates at a motor speed significantly lower than its maximum motor speed on a given plumbing system, it will be less efficient than a smaller pump operating at its maximum motor speed on that same plumbing system. Consequently, a pump configuration more efficient than a single two-speed pump is two singlespeed pumps, including a higher horsepower pump sized for operating therapy jets and a lower horsepower pump sized for filtration purposes. DOE is aware that pump inefficiencies may manifest as waste heat, which, if absorbed by the spa water, would reduce the load on the heating element and ultimately may mitigate the effects of a relatively inefficient pump and pump motor. The extent to which this waste heat is captured is still being investigated. Although in practice twospeed pumps and dedicated circulation pumps vary in power consumption, and the amount of waste heat will depend on how a given pump motor dissipates heat and on a spa’s insulation, the efficiency analysis in section III.C.1 considers just two estimated values for water circulation: one associated with using the low-speed setting of a twospeed pump, and one associated with using a one-speed dedicated circulation pump. DOE did not evaluate dedicated circulation pumps as a technology option for inflatable spas because inflatable spas typically use a one-speed dedicated circulation pump and a separate air blower for massage jets. DOE seeks comment and data on the degree to which two-speed pump inefficiencies manifest as waste heat and to which that waste heat is absorbed by the spa’s water. E:\FR\FM\17NOP2.SGM 17NOP2 lotter on DSK11XQN23PROD with PROPOSALS2 69090 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules g. Heat Pump B. Screening Analysis DOE is aware of the existence of heat pumps marketed for use with PESs. Heat pumps would require less power as a heat source than the electric resistance heaters typically used in the PES industry. DOE is aware of at least one manufacturer of heat pump models marketed for use with spas explicitly.15 However, heat pumps designed for use with portable electric spas appear otherwise absent in the market. DOE is unaware of portable electric spas that are equipped with heat pumps by their manufacturers. For the one spa-compatible heat pumps supplier that DOE identified, models list coefficients of performance 16 that range from 3.16 to 6.2, though at lower output temperatures than those typical of PESs. In general, heat pump performance declines as a function of increase of the thermal gradient across which they operate. However, DOE did not obtain data to extrapolate those values to higher temperatures. In general, heat pump performance declines as a function of increase of the thermal gradient across which they operate. Additionally, DOE did not obtain data regarding how heat pumps would affect installation cost if non-integral units required separate mounting, plumbing, and electrical connection. Accordingly, for this NODA, heat pumps were not included in the set of design options modeled in the engineering analysis due to lack of sufficient data and limited availability. If warranted, DOE may model the addition of a heat pump as a technology option in future analysis. DOE requests comment regarding whether heat pumps would be likely to reduce energy consumption in PESs and, if so, quantified estimates of the effects of heat pump integration on both energy consumption and manufacturer production cost. DOE requests comment regarding the availability of heat pumps compatible with PESs. DOE uses the following five screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking: Technological feasibility. Technologies that are not incorporated in commercial products or in working prototypes will not be considered further. Practicability to manufacture, install, and service. If it is determined that mass production and reliable installation and servicing of a technology in commercial products could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further. Impacts on product utility or product availability. If it is determined that a technology would have a significant adverse impact on the utility of the product for significant subgroups of consumers or would result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, that technology will not be considered further. Adverse impacts on health or safety. If it is determined that a technology would have significant adverse impacts on health or safety, that technology will not be considered further. Unique-pathway proprietary technologies. If a design option utilizes proprietary technology that represents a unique pathway to achieving a given efficiency level, that technology will not be considered further due to the potential for monopolistic concerns. 10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b). If DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. In the case of PESs, DOE has tentatively determined that no technology options identified in section III.A.5 met the criteria for screening. Accordingly, all technology options identified in section III.A.5 were considered during the engineering analysis, with the exception of heat pumps and insulated ground covers (for non-inflatable spas only), which are not explicitly analyzed as design options for reasons discussed in section III.A.5 of this NODA. 15 Arctic Heat Pumps. Arctic Titanium Heat Pump for Swimming Pools and Spas—015ZA/B. Available at www.arcticheatpumps.com/arctic-titanium-heatpump-for-swimming-pools-and-spas-heats-chills11-700-btu-dc-inverter.html. (last accessed August 5, 2022) The 2022–08–05 material from this website is available in docket 2022–BT–STD–0025 at www.regulations.gov. 16 Coefficient of performance (‘‘COP’’) is a figure characterizing the relative performance of heat pumps. It represents the ratio of heat transferred to the input energy required to transfer it. A higher COP indicates less energy consumed to per unit of heat delivered. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 C. Engineering Analysis The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of PESs. There are two elements to consider in the engineering analysis: the selection of efficiency levels to analyze (i.e., the ‘‘efficiency analysis’’) and the determination of PESs cost at each efficiency level (i.e., the ‘‘cost analysis’’). In determining the performance of higher-efficiency PESs, DOE considered technologies and design option combinations not eliminated by the screening analysis. For each product class of PES, DOE estimated the manufacturer production cost (‘‘MPC’’) for the baseline as well as higher efficiency levels. The output of the engineering analysis is a set of costefficiency ‘‘curves’’ that are used in downstream analyses (i.e., the LCC and PBP analyses and the NIA). DOE converts the MPC to the manufacturer selling price (‘‘MSP’’) by applying a manufacturer markup. The MSP is the price the manufacturer charges its first customer, when selling into the PES distribution channels. The manufacturer markup accounts for manufacturer non-production costs and profit margin. DOE developed the manufacturer markup by examining publicly available financial information for manufacturers of the covered product. 1. Efficiency Analysis DOE selected efficiency levels to analyze by identifying baseline units for non-inflatable and inflatable spas, evaluating the effects of efficiency design options on those units, and extrapolating the results to spas of other sizes. The baseline unit is intended to be representative of the most consumptive spas available in the market. For non-inflatable spas, DOE identified ‘‘Spa J’’ from the 2012 study ‘‘Measurement and Analysis of the Standby Power of Twenty-Seven Portable Electric Spas’’ as the baseline unit.17 For inflatable spas, DOE acquired a sample unit and measured its performance without the additional features that make it compliant with CEC energy conservation standards (and, by extension, with APSP–14 2019). The results of those tests were considered to be representative of the most consumptive inflatable spas on the market. DOE seeks comment on its selection of the baseline unit, including whether any other units on the market would 17 Hamill, Andrew. ‘‘Measurement and Analysis of the Standby Power of Twenty-Seven Portable Electric Spas.’’ September, 2012. E:\FR\FM\17NOP2.SGM 17NOP2 69091 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules better represent the most consumptive spas available for purchase. The non-inflatable spa baseline unit was identified on the basis of its fill volume and normalized average standby power. However, no information was available regarding its features and, in particular, its insulation characteristics. To predict the effects of technologies and design option combinations on the non-inflatable baseline unit, it was necessary to estimate insulation levels of the model’s spa cabinet. To do this estimate, a simplified model of the energy consumption of PESs was created, which accepts spa specifications, including fill volume, linear dimensions, and insulation type, and predicts the normalized average standby losses of a spa. Predictions were made for a subset of spas in MAEDbS on which DOE collected additional data through brochures and other marketing materials, and predictions were then compared to values reported in MAEDbS. By establishing a relationship between the amount of insulation and normalized average standby power, it was possible to estimate the amount of insulation in the non-inflatable baseline unit, Spa J. Additionally, Spa J was reported to be tested with a cover better than other covers observed to be available on the market. Using the energy consumption model, the normalized average standby power was approximated for Spa J if it had been fitted with a cover of a lower R-value. The energy consumption model is described in more detail below. DOE’s research and correspondence with manufacturers indicate that the drivers of PESs’ energy consumption in standby mode are: (1) heat losses, and (2) the energy demands of filtration. In addition to the energy consumption of the filtration system, there are small power demands, such as that of a spa’s controls unit, that are also modeled as constant with size. In DOE’s analysis, the energy consumption of the filtration system and other wattage inputs, which are constant with size and do not contribute to water heating, are collectively referred to as ‘‘non-heat losses.’’ In the energy consumption model, these non-heat losses were modeled as constant with size and were discretized into two potential values for non-inflatable spas—a larger value for spas that use the low-speed setting of high-hp pumps for filtration, and a smaller value for spas that use a bettersized dedicated circulation pump for filtration purposes. Only one value for non-heat losses was estimated for inflatable spas, which typically already use dedicated circulation pumps for filtration and separate air blowers for massage jets. The estimated values for non-heat losses are summarized in the table below. The ‘‘High HP 2-Speed Pump’’ column represents the non-heat losses associated with a high horsepower two-speed pump for noninflatable spas and the single speed pump typical for inflatable spas, while the ‘‘Dedicated Circulation Pump’’ column represents non-heat losses associated with dedicated circulation pump upgrades. TABLE III.1—ESTIMATED NON-HEAT LOSSES OF PESS Non-heat losses Spa type High HP 2-speed pump Dedicated circulation pump Standard Spa .......................................................................................................................................................... Exercise Spa ........................................................................................................................................................... Combination Spa ..................................................................................................................................................... Inflatable Spa .......................................................................................................................................................... 40 Watts ........ 40 Watts ........ 40 Watts ........ n/a .................. 20 Watts. 20 Watts. 20 Watts. 27.25 Watts. DOE requests comment on the range of filtration system power demands in PESs as described in Table III.1. DOE also requests comment on any correlation between power demand and whether a spa uses a high horsepower two-speed pump or a lower horsepower dedicated circulation pump. To calculate a spa’s heat loss in standby mode, DOE assumed that a spa’s normalized average standby power loss is approximately equal to the instantaneous heat loss of a spa held at thermal equilibrium, with spa water temperature and ambient air temperature held at the values respectively specified by DOE’s proposed test procedure. It is noteworthy that doing so ignores temperature fluctuations characteristic of PESs’ heating cycles. DOE accounted for heat losses due to one-dimensional conductive heat transfer through the walls, floor, and cover of the spa, as well as heat losses due to convection at the outer wall and due to radiation. Spas were modelled as thermal circuits consisting of walls, floor, and cover in parallel with each other. The total thermal resistance of the walls and floor of the spa depends in part on their respective thicknesses and, consequently, the shape of the spa shell. Therefore, a simplified shell configuration consisting of basic upright seats on every side (i.e., no lounge seats) was considered. As a result of this assumption, walls were divided into lower-insulation top wall and higherinsulation bottom wall sections, and the floor was divided into lower-insulation center and higher-insulation perimeter sections. In particular, the following simplifications were made regarding the distance from the spa shell to the spa cabinet: lotter on DSK11XQN23PROD with PROPOSALS2 TABLE III.2—MEASUREMENTS OF SIMPLIFIED MODEL OF NON-INFLATABLE SPA SHELL Section of spa Top of Wall ..... Bottom of Wall Center of floor Perimeter of floor. VerDate Sep<11>2014 Maximum insulation thickness Description The The The The horizontal distance from the spa cabinet to the seat backs. .......................................................................... horizontal distance from the spa cabinet to the wall of the foot well. ............................................................ vertical distance from the base of the spa to the bottom of the foot well. ..................................................... vertical distance from the base of the spa to the bottom of the seat. ........................................................... 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 6 inches. 18 inches. 3 inches. 15 inches. lotter on DSK11XQN23PROD with PROPOSALS2 69092 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules In addition to conductive heat transfer, heat losses due to radiation and convection were estimated. Losses due to radiation were approximated using the average percent difference between the average standby losses of spa models units with and without reflective layers in their insulation. DOE identified those unit pairs and their differences in standby energy consumption using MAEDbS. DOE also conducted independent testing on one inflatable spa and one non-inflatable spa, measuring the energy consumption before and after each was retrofitted with a reflective radiant barrier. To estimate the effects of air convection on the outside surfaces of the spa, DOE selected a convective heat transfer coefficient characteristic of airflow at the rate specified in DOE’s proposed test procedure and applied it in series with the spa walls, floor, and cover. Although air leaks are known to affect the heat losses of a spa, DOE did not obtain data sufficient to characterize the magnitude of their effect. Accordingly, DOE’s energy model does not estimate the effect of air leaks explicitly. Instead, losses due to air leaks are treated as included in the losses through bridge sections, as described as follows. DOE requests comment on its assumption of a standard shell shape as described in Table III.2, especially whether it is representative and whether DOE should consider certain shapes that result in maximum or minimum amounts of insulation. DOE requests data and comment on the effectiveness of radiant barriers in reducing the normalized average standby power of PESs and on what factors make radiant barriers more or less effective. DOE requests data and comment on the extent to which spas lose heat through air convection out of unsealed regions of the spa and on the factors that affect heat losses due to sealing. DOE requests comment on the best way to quantify varying degrees of cover seal, including perimeter seal against the spa flange and hinge seal through the center of the cover. The PES energy consumption model system described previously overlooks several complicating factors. Specifically, the typical spa’s cabinet holds plumbing, heating equipment, and other components that not only displace insulation, but also bring hot water closer to the outside of the spa and even generate their own waste heat, which escapes the spa or enters the water at unknown proportions. At the same time, the foam itself is subject to voids and other variations. Rather than attempting to find an analytical solution VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 that considers factors such as the number of jets and amount of piping, the physical size of internal components, or the distance of each from the outside of the spa, DOE used a simplified model that considers the heat loss through these ‘‘thermal bridges’’ as the amount of heat loss that could not be predicted by the onedimensional model described above. DOE used this assumption to reformulate the thermal circuit of a spa as consisting of one-part thermal bridge section and one-part insulated section, which is subdivided into walls, floor, and cover, as described previously. Bridge sections were modeled as smaller but responsible for a disproportionate amount of heat flux. Specifically, the proportion of areas were estimated to be 90 percent insulated area to 10 percent bridge area. As a result, it was possible to calculate an average R-value for bridge sections in a spa. Using the average R-value for bridge sections and the modeled area ratios of insulated area to bridge area, the energy consumption model calculated total energy use with a median 0.9 percent error and an average of ¥4.38 percent error. DOE requests comment on the method of analyzing thermal bridges as a single section of low R-value on the spa. Additionally, DOE requests information about techniques and models which are used in industry to predict spa performance. DOE requests comment and data on the discrepancy between heat loss through the wall where the components are housed and through other walls. DOE requests comment on any strategies for considering the effects of hot water traveling through plumbing on a spa’s heat loss. The R-value of a typical spa’s bridge section was important to infer insulation thickness of Spa J, the chosen baseline unit for non-inflatable spas. Although Spa J’s ‘‘equivalent insulation thickness’’ was calculated using the measured heat loss rate, this value cannot be used to represent the spa’s insulation thickness because it does not consider bridge sections of relatively low thermal resistance. Consequently, it would underestimate the amount of insulation in Spa J and overestimate both the space available for additional insulation and ultimately the amount by which it would be possible to lower heat losses. Using the average R-value for bridge sections, DOE found what may be a more representative insulation equivalent resistance, which is then able to be decomposed into individual walls, cover, and floor equivalent resistances. With estimated insulation characteristics for its baseline non- PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 inflatable spa, it was possible to calculate the expected effects of additional insulation on the baseline spa’s normalized average standby power consumption. DOE used these calculations to evaluate additional insulation in the walls of the spa, the floor, and the cover. These calculations, along with data from DOE’s testing a non-inflatable spa and from the 2012 Hamill study, were used to establish proposed efficiency levels for noninflatable spas. DOE selected efficiency levels in the order of increasing dollar to implement per expected watt savings using costs described below in the cost analysis. DOE was also able to conduct its own testing on an inflatable spa baseline unit. Because DOE’s energy consumption model relies to a large extent on R-values, and as DOE found less data on the R-value of inflatable spa materials, the effects of most inflatable design options were related to test data rather than calculations. For design options utilizing additional insulation and for which DOE did not have test data, a model similar to the one described previously was used. And efficiency levels for inflatable spas were chosen in the order of increasing dollar to implement per expected watt savings, similar to non-inflatable spas. After the normalized standby power consumption was calculated for the baseline non-inflatable and inflatable spas, the standby power of spas with other volumes was extrapolated using a scaling relationship. DOE used the relationship defined in APSP–14 2019 standards levels, which vary energy consumption proportionally to the volume of the spa raised to the twothirds power. Several manufacturers recounted during correspondence with DOE that a constant term was added to the scaling relationship to account for energy demands unrelated to size during the most recent revision of APSP–14 2019. Consequently, DOE chose to again break total standby power losses into heat losses and non-heat losses, and to scale only heat losses proportionally to volume raised to the two-thirds power, while holding nonheat losses constant at different fill volumes. DOE requests comment describing its appropriation of the scaling relationship defined in APSP–14 2019 and whether there are any other traits with which DOE might vary energy consumption. The efficiency analysis above was informed by data acquired by testing to the current industry standard test procedure, APSP–14 2019. However, DOE has proposed a test procedure for PESs, which made it necessary to E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules convert initial results into those which might be expected if spas were to be tested under that proposed test procedure. In particular, this conversion accounted for a higher temperature gradient between spa water and ambient air temperatures during testing, and for the removal of the foam and plywood foundation allowed by APSP–14 2019.18 To account for the change in temperature gradient, original values were multiplied by a re-normalization factor of 1.243, the ratio of the proposed temperature difference of 46 °F to the industry standard of 37 °F. DOE removed R–13 of insulation from the floor section of the spa in its model to account for the loss of two inches of polyisocyanurate foam underneath the spa. While the converted values will be used for downstream analyses, DOE is also releasing the values before conversion so that manufacturers may consider them in the context of existing data. DOE requests comment on whether there are other factors DOE should consider in converting normalized average standby power values to reflect the proposed test procedure. 2. Cost Analysis DOE gathered data through manufacturer interviews, sample unit teardowns, and publicly available retail data to estimate the costs of both whole baseline units and of incremental design options. When necessary, profit margins for inflatables and non-inflatable spa manufacturers, as well as certain distributors, were estimated to convert MPC to MSP to final sale price. DOE requests comment and data on typical markups from MPC to MSP and from MSP to final sale price. Once the costs of baseline units and individual design options were estimated, DOE investigated a scaling function that could relate the price of a spa to its fill volume. As a first approximation, DOE estimated that the cost of a spa would be directly proportional to its fill-volume to the two-thirds power. DOE analyzed a small sample of retail data and found that, for units otherwise equal in qualities and features, such a relationship appears to slightly overestimate the cost of smaller spas and underestimate the cost of larger spas. DOE requests comment and data characterizing the relationship between 69093 MPC and the size of a PES and whether there are better methods for approximating the effects of size changes on MPC than the one described previously. DOE requests comment and data characterizing to what degree sales margins vary with spa size. 3. Engineering Results The initial results of the efficiency analysis contained the estimated energy consumption of PESs at each efficiency level, as would be measured according to the current industry test procedure, APSP–14. These initial results are not used in the energy use analysis or other downstream analyses because they do not reflect DOE’s proposed test procedure. However, as manufacturers are most likely to have data as measured with the current industry standard test procedure, the initial results of the efficiency analysis are summarized in the tables which follow. In the sets of efficiency levels for both non-inflatable and inflatable spas, Efficiency Level 1 is equivalent to the maximum consumption limit set by APSP–14 2019. TABLE III.3—ENERGY CONSUMPTION FOR NON-INFLATABLE SPAS USING INDUSTRY TP 0 1 2 3 4 5 6 7 8 Energy consumption of a 334gal unit (watts) Energy consumption using industry TP (watts) Efficiency level (Baseline) ....................................... ........................................................ ........................................................ ........................................................ ........................................................ ........................................................ ........................................................ ........................................................ (Max-Tech) .................................... 40 40 40 40 40 40 40 40 40 + + + + + + + + + 6.88 3.75 2.92 2.74 2.74 2.63 2.38 1.88 1.80 * * * * * * * * * Vol Vol Vol Vol Vol Vol Vol Vol Vol 2/3 2/3 2/3 2/3 2/3 2/3 2/3 2/3 2/3 ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... 371 220 180 172 152 146 135 111 107 TABLE III.4—ENERGY CONSUMPTION FOR INFLATABLE SPAS USING INDUSTRY TP lotter on DSK11XQN23PROD with PROPOSALS2 0 (Baseline) ....................................... 1 ........................................................ 2 ........................................................ 3(Max-Tech) ...................................... 9.20 7.00 4.78 4.73 * * * * Vol Vol Vol Vol 2/3 2/3 2/3 2/3 .............................................................................................. .............................................................................................. .............................................................................................. .............................................................................................. DOE requests comment on the efficiency levels described in tables Table III.3 and Table III.4, including whether any do not align with expected effects design options associated with them, as described in Table III.7 and Table III.8. As discussed previously in this document, on October 18, 2022, DOE proposed a test procedure for measuring the energy consumption of PESs. 87 FR 63356. DOE’s proposed test procedure aligns with the current industry test procedure in many regards, including in 18 Appendix A of APSP–14 states the following: The floor may be insulated with 2in. (51mm) thick R–13 polyisocyanurate with radiant barrier on both sides. VerDate Sep<11>2014 18:07 Nov 16, 2022 Estimated energy consumption of a 200-gal unit (watts) Energy consumption using industry TP (watts) Efficiency level Jkt 259001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 315 239 164 162 its use of normalized average standby power as a metric for the energy consumption of PESs. However, DOE’s proposed test procedure includes changes to the specified ambient air temperature and to the amount of insulation allowed under the spa during E:\FR\FM\17NOP2.SGM 17NOP2 69094 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules below. These values are used in the analyses described in later sections of this document. The tables below also summarize the expected percent change in energy consumption on each efficiency level as a result of DOE’s proposed test procedure. The increased temperature gradient is not expected to affect any efficiency levels differently. However, the effect of removing additional testing. These changes can be expected to increase the measured normalized average standby power of all PESs. Section III.C.1 discusses DOE’s method of converting standby power values measured under the industry test procedure to the values expected if the standby power values for the same spas were measured under DOE’s proposed test procedure. The converted and final results are summarized in the tables insulation from underneath the spa will depend on the amount of foam present in the base section of the spa and on the presence of other design options. As a result, the percent change is not constant across efficiency levels. The change in normalized average standby power at a given efficiency level due to DOE’s proposed test procedure is expected to remain constant for spas of all volumes at that efficiency level. TABLE III.5—ENERGY CONSUMPTION FOR NON-INFLATABLE SPA USING PROPOSED TP 0 1 2 3 4 5 6 7 8 Energy consumption of a 334-gal unit (watts) Energy consumption using proposed TP (watts) Efficiency level ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... ................................................... 40 40 40 40 40 40 40 40 40 + + + + + + + + + 9.55 5.37 4.34 4.12 4.02 3.88 3.04 2.73 2.63 * * * * * * * * * Vol Vol Vol Vol Vol Vol Vol Vol Vol 2/3 2/3 2/3 2/3 2/3 2/3 2/3 2/3 2/3 ............................................................................ ............................................................................ ............................................................................ ............................................................................ ............................................................................ ............................................................................ ............................................................................ ............................................................................ ............................................................................ 500 299 249 238 213 207 167 152 147 % Increase from industry TP (%) 35 36 38 38 40 42 24 37 37 TABLE III.6—ENERGY CONSUMPTION FOR INFLATABLE SPA USING PROPOSED TP 0 1 2 3 Energy consumption of a 200-gal unit (watts) Energy consumption using proposed TP (watts) Efficiency level ................................................... ................................................... ................................................... ................................................... 14.39 * Vol 2/3 ................................................................................... 12.03 * Vol 2/3 ................................................................................... 7.50 * Vol 2/3 ..................................................................................... 7.44 * Vol 2/3 ..................................................................................... DOE requests comment on the expected effects of DOE’s proposed test procedure, as described in Table III.5 and Table III.6, including on whether its effects on normalized average standby power would be greater than or less than DOE’s estimates. Efficiency levels for PESs were established by estimating the effects of adding each design option to a representative unit at the previous efficiency level. The design option, which presented the lowest cost in dollars per watt expected to be saved, was selected as characteristic of the next efficiency level. Although potential standards at different efficiency levels will not prescribe specific design options, this approach resulted in the possibility of characterizing each 492 411 257 254 % Increase from industry TP (%) 56 72 57 57 efficiency level by the addition of a specific design option. DOE’s estimates of the cost to manufacture each design option, as well as the baseline spa, are described in section III.C.2 of this NODA. The characteristic design options and their estimated costs on 334-gallon non-inflatable spas and a 200-gallon inflatable spa are summarized in the tables III.7 and III.8. lotter on DSK11XQN23PROD with PROPOSALS2 TABLE III.7—CHARACTERISTIC DESIGN OPTIONS FOR NON-INFLATABLE EFFICIENCY LEVELS Efficiency level Characteristic design option added from previous EL 0 ........................................... The baseline spa, Spa J, was estimated to have R–10 worth of insulation in the walls and floor and an R–14 cover. Additional R–6 in the wall sections and R–3.5 in the floor section .......... Additional R–6 in the wall sections ........................................................... Additional inch of cover thickness (equivalent to an additional R–4) ....... Switch from two-speed pump to dedicated jet and circulation pumps ..... Additional inch of cover thickness (equivalent to an additional R–4) ....... Replace two inches of 0.5lb foam with 2lb foam insulation ..................... Add radiant barrier around perimeter of spa ............................................ Increase cover density from 1lb foam to 2lb foam ................................... 1 2 3 4 5 6 7 8 ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM Total MPC for 334-gal unit 17NOP2 Marginal MPC for 334-gal unit $3,120 $0 3,186 3,252 3,280 3,405 3,433 3,607 3,697 3,767 66 66 28 125 28 174 90 70 69095 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.8—CHARACTERISTIC DESIGN OPTIONS FOR INFLATABLE SPA EFFICIENCY LEVELS Efficiency level 0 1 2 3 Total MPC on 200-gal unit Characteristic design option added from previous EL ................................................... ................................................... ................................................... ................................................... None .................................................................................................. Flexible foam jacket and inflatable cover insert ............................... Additional reflective blanket around spa ........................................... 1⁄2 inch thick foam ground cover ....................................................... DOE requests comment and data regarding the design options and associated estimated costs described in tables Table III.7 and Table III.8 of this NODA. Section III.C.2 also discusses the conversion of MPC to MSP using manufacturer markups, and the scaling relationship used to extrapolate from the price of the baseline unit to units of other sizes. In particular, the price of a spa was modeled as growing proportionally to the fill volume to the two thirds power. The manufacturer markups used and the ultimate MSP scaling relationships are described in Tables III.9 and III.10. Marginal MPC on 200-gal unit $122 165 297 329 $0 43 132 32 TABLE III.9—MANUFACTURER MARKUPS BY MANUFACTURER TYPE Estimated manufacturer markup Manufacturer types Inflatable Spa Manufacturer ...... Non-Inflatable Spa Manufacturer ....................................... 1.17 1.43 TABLE III.10—PORTABLE ELECTRIC SPA MSP BY VOLUME MSP for non-inflatable spas ($) Efficiency level 0 1 2 3 4 5 6 7 8 ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ ................................................ MSP for inflatable spas ($) 92.69 * Vol 2/3 .......................................................................... 94.64 * Vol 2/3 .......................................................................... 98.54 * Vol 2/3 .......................................................................... 103.27 * Vol 2/3 ........................................................................ 111.72 * Vol 2/3 ........................................................................ 120.99 * Vol 2/3 ........................................................................ 136.22 * Vol 2/3 ........................................................................ 154.10 * Vol 2/3 ........................................................................ 174.05 * Vol 2/3 ........................................................................ Those estimates describe a relationship between the marginal cost and the marginal efficiency of a PES as the PES is made progressively more efficient. The relationship is the basis of analyses described in sections D, E, F, G, and H of this NODA. D. Markups Analysis The markups analysis develops appropriate markups (e.g., retailer markups, distributor markups, contractor markups) in the distribution chain and sales taxes to convert the MSP estimates derived in the engineering analysis to consumer prices, which are then used in the LCC and PBP analyses and in the manufacturer impact analysis. At each step in the distribution channel, companies mark up the price of the product to cover business costs and profit margin. 4.07 * Vol 2/3 5.50 * Vol 2/3 9.92 * Vol 2/3 10.98 * Vol 2/3 n/a n/a n/a n/a n/a 1. Distribution Channels For this NODA, DOE has identified separate distribution channels into groups for hard-sided (standard, exercise, and combination) and inflatable spas. DOE based the market shares on confidential manufacturer interviews conducted under nondisclosure agreements. For PESs, the main parties in the distribution chains are shown in Table III.11. TABLE III.11—DISTRIBUTION CHANNELS Market share (%) Index Distribution channel agents Hard-sided spas lotter on DSK11XQN23PROD with PROPOSALS2 1 2 3 4 5 ........................................ ........................................ ........................................ ........................................ ........................................ Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer → → → → → 2. Markups Baseline markups are applied to the price of products with baseline VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Wholesaler → Spa Product Contractor → Consumer .................. Spa Product Retailer → Consumer .............................................. Big Box Retailer → Consumer ...................................................... Big Box Internet Retailer → Consumer ........................................ Consumer (direct sale) ................................................................. efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 5 60 20 10 5 Inflatable spas ........................ ........................ 50 50 ........................ The incremental markup is typically less than the baseline markup and is designed to maintain similar per-unit E:\FR\FM\17NOP2.SGM 17NOP2 69096 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules operating profit before and after new or amended standards.19 For this NODA, DOE did not develop PES-specific baseline and incremental markups for each actor in the distribution chain. Instead, based on supply chain similarities, DOE used the markups analysis developed for its Pool Heater energy conservation standard as a proxy.20 If DOE decides to pursue minimum efficiency standards for PESs, DOE will examine the PES supply chain in detail. DOE applied the following baseline and incremental markups for each step of the distribution channels listed in Table III.11, which are shown in Table III.12. TABLE III.12—AGENT SPECIFIC MARKUPS Baseline markup Agent Wholesaler ............................................................................................................................................................... Spa Product Retailer ............................................................................................................................................... Big Box Retailer ....................................................................................................................................................... Big Box Internet Retailer ......................................................................................................................................... Consumer (direct sale) ............................................................................................................................................ Spa Product Contractor ........................................................................................................................................... DOE requests information on the existence of any distribution channels other than the distribution channels listed in Table III.11 of this document. Further, DOE requests comment on whether the same distribution channels are applicable to installations of new and replacement PESs. DOE requests information on the fraction of shipments that are distributed through the channels shown in Table III.11 of this document. 3. Sales Taxes The sales tax represents state and local sales taxes that are applied to the consumer product price. The sales tax is 1.41 1.76 1.31 1.31 1.70 1.40 Incremental markup 1.15 1.22 1.07 1.07 1.22 1.21 a multiplicative factor that increases the consumer product price. DOE derived state and local taxes from data provided by the Sales Tax Clearinghouse.21 DOE derived population-weighted average tax values for each Census Region, as shown in Table III.13.22 TABLE III.13—AVERAGE SALES TAX RATES BY CENSUS REGION Census region 1 2 3 4 Sales tax rate (%) Description .................................................................................................. .................................................................................................. .................................................................................................. .................................................................................................. Northeast .................................................................................... Midwest ...................................................................................... South .......................................................................................... West ........................................................................................... 6.90 7.10 7.36 7.53 Population-weighted average .............................................. .................................................................................................... 7.28 and provides the average sales tax to arrive at overall markups for the 4. Summary of Markups Table III.14 summarizes the markups at each stage in the distribution channel potential product classes considered in this analysis. TABLE III.14—SUMMARY OF MARKUPS Baseline markup Equipment class Standard .................................................................................................................................................................. Exercise ................................................................................................................................................................... Combination ............................................................................................................................................................. Inflatable .................................................................................................................................................................. E. Energy Use Analysis lotter on DSK11XQN23PROD with PROPOSALS2 The purpose of the energy use analysis is to determine the annual energy consumption of PESs during 19 Because the projected price of standardscompliant products is typically higher than the price of baseline products, using the same markup for the incremental cost and the baseline cost would result in higher per-unit operating profit. While such an outcome is possible, DOE maintains that it is unlikely that standards would lead to a VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 1.75 1.75 1.75 1.41 Incremental markups 1.27 1.27 1.27 1.15 stand-by operation at different efficiencies in representative U.S. single-family homes and to assess the energy savings potential of increased PES efficiency. The energy use analysis estimated the range of energy use of PESs in the field (i.e., as they are actually used by consumers). The energy use analysis provided the basis for other analyses DOE performed, sustainable increase in profitability in the long run in markets that are reasonable competitive. 20 Please see chapter 6 of the Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Consumer Pool Heaters. DOE. 2022. Available at https://www.regulations.gov/ document/EERE-2021-BT-STD-0020-0005. 21 Sales Tax Clearinghouse Inc. State Sales Tax Rates Along with Combined Average City and County Rates. July 2021. Available at https:// thestc.com/STrates.stm (Last accessed July 1, 2021.) 22 See: https://www2.census.gov/geo/pdfs/mapsdata/maps/reference/us_regdiv.pdf. PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of new standards. The energy use analysis uses the energy use models developed in the engineering analysis. The engineering analysis calculated the rate of heat loss AEUz from the spa as a function of the difference between the spa operating temperature and the ambient temperature. For this analysis, DOE developed distributions of binned hourly ambient temperature data using the dry-bulb temperature from the Typical Meteorological Year 3 69097 (‘‘TMY3’’) 23 weather data as a function of climate zone, as described in section III.E.3 of this document. The annual energy use (‘‘AEU’’) in kilowatt hours per year (kWh/yr) for each climate zone, z, for all spas, other than combination spas, is expressed as: ~ Wz,j ((Sysnon-heat + Sysheat X Vol3~) X T Top -Tambj = L.,. _T opTP J ) X npyz ambTP For combination spas, where there are two independently heated pools of water: ~ Wz,j ([Sysnon-heat + (Sysheat X Vol'§'2) X T T = L.,. J lotter on DSK11XQN23PROD with PROPOSALS2 + [(Sysheat X 2) Vol'§' X l T0 p - Tamb 1• _T opTP ambTP ExerciseSpa T Where: AEUz = the annual energy use, in kWh, of the spa installed in climate zone z; if there are any hours where Tamb exceeds Top, AEU is set equal to zero, j = a bin index representing the ambient temperature at which the spa is operating, wz,j = the probability of the monthly ambient temperature for climate zone z, Sysnon-heat = the energy use of non-heat producing systems, i.e., water pumps, controls, etc., which does not scale with spa water volume, z = climate zone, Sysheat = a coefficient representing heating system energy use, which scales with spa water volume, Vol = the spa’s water volume, Top = the spa’s operating temperature (87 for exercise spas, and the exercise portion of combination spas, 102 for all other products) (°F), TopTP = the spa’s operating temperature as defined in the test procedure (102 °F), Tamb j = the ambient temperature (°F), TambTP = the national average ambient temperature, as defined in the test procedure (56 °F), and npyz = number of months of operation per year for PESs installed in climate zone z. 23 The TMY data sets hold hourly values of solar radiation and meteorological elements for a 1-year period. Their intended use is for computer simulations of solar energy conversion systems and building systems to facilitate performance comparisons of different system types, configurations, and locations in the United States and its territories. Because the values represent typical rather than extreme conditions, they are not suited for designing systems to meet the worst-case conditions occurring at a location. 24 U.S. Department of Energy—Energy Information Administration. Residential Energy Consumption Survey: 2015 RECS Survey Data. 2015. Available at https://www.eia.gov/ VerDate Sep<11>2014 18:07 Nov 16, 2022 l p - Tamb 1• _T opTP ambTP StandardSpa Jkt 259001 DOE seeks comment on its energy use model. Specifically, DOE seeks comment on the energy use model for combination spas, where the Sysnon-heat variable is normalized with volume of water portioned to the standard spa pool. 1. Consumer Sample DOE conducts its analysis in support of a potential new minimum energy conservation standard at the national level. This means that DOE must distribute consumers of PES products throughout the nation to capture variability of key inputs of PES operation. Specifically, for the annual energy use estimate, DOE had concern regarding distributing the population of PO 00000 Frm 00017 0 Fmt 4701 Sfmt 4702 ) X npyz PES installations across different regions to capture variability in outdoor (ambient) temperatures, which impact PES stand-by energy consumption. This distribution of installations is referred to as the ‘‘Consumer Sample.’’ For this NODA, DOE used the statistical household data available in the Energy Information Administration. Residential Energy Consumption Survey: 2015 (‘‘RECS’’).24 25 DOE used the data from RECS of households with a hot tub (RECBATH=1, FUELTUB=5, and TYPEHUQ=[2, 3]) to define the national spatial sample of PES installations over analysis regions defined by the intersection of census regions r and climate zones z. The climate zones are those defined in the RECS microdata. The percent distribution of consumers over census region/climate zone is provided in Table III.15. consumption/residential/data/2015/. (Last accessed August 5, 2021.) 25 At the time of drafting, the Residential Energy Consumption Survey has released a new version based on 2020 inputs as a preliminary analysis. If DOE elects to pursue new minimum efficiency standards for PESs, DOE will update the consumer sample to the 2020 version of RECS. E:\FR\FM\17NOP2.SGM 17NOP2 EP17NO22.000</GPH> AEUz 69098 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.15—REGION AND CLIMATE ZONE PROBABILITIES OF HOT TUB INSTALLATIONS Climate zone (z) Census region (r ) Hot-dry/ mixed-dry Cold/very cold 1 2 3 4 Hot-humid Marine Mixed-humid Total ............................................................... ............................................................... ............................................................... ............................................................... 18.0 16.5 1.1 8.8 0.0 0.0 0.0 9.0 0.0 0.0 9.8 0.7 0.0 0.0 0.0 13.1 2.1 6.4 14.5 0.0 20.1 22.9 25.4 31.6 Total .................................................. 44.5 9.0 10.5 13.1 22.9 100.0 2. Typical Annual Operating Hours (npy) A key input to the energy use analysis is the number of annual operating hours of the product. Available data indicated that PESs operate in stand-by mode for the majority of hours that they are on. During the process of updating PES standards for California in 2018, CEC reported a duty cycle between 5,040 hours per year for inflatable spas (which are intended for seasonal use) and 8,760 hours per year for standard, exercise, and combination spas.26 DOE notes that these estimates may be typical for California, but are not represented in the existing data in RECS. The RECS data include a field (MONTUB) quantifying the number of months per year that the hot tub is considered in use. For this analysis, DOE considered the term ‘‘in use’’ to mean plugged-in and running. RECS does not specify which months the spa is in use, only the quantity of months. Therefore, for this NODA, DOE interpreted these data as that the spas in RECS will be operating during the warmest months of the year, as shown in Table III.16. For inflatable PES, DOE made the modeling assumption that they would be in operation up to a maximum of warmest 6 months of the year. TABLE III.16—MAPPING OF RECS MONTHS OF OPERATION TO CALENDAR MONTHS Months of operation (npy) Jan ................ Feb ................ Mar ................ Apr ................ May ............... Jun ................ Jul ................. Aug ............... Sep ............... Oct ................ Nov ............... Dec ............... Hours/year .... 1 2 3 4 5 6 7 8 9 10 11 ................ ................ ................ ................ ................ ................ 1 ................ ................ ................ ................ ................ 744 ................ ................ ................ ................ ................ ................ 1 1 ................ ................ ................ ................ 1,488 ................ ................ ................ ................ ................ 1 1 1 ................ ................ ................ ................ 2,208 ................ ................ ................ ................ ................ 1 1 1 1 ................ ................ ................ 2,928 ................ ................ ................ ................ 1 1 1 1 1 ................ ................ ................ 3,672 ................ ................ ................ ................ 1 1 1 1 1 1 ................ ................ 4,416 ................ ................ ................ 1 1 1 1 1 1 1 ................ ................ 5,136 ................ ................ ................ 1 1 1 1 1 1 1 1 ................ 5,856 ................ ................ 1 1 1 1 1 1 1 1 1 ................ 6,600 ................ ................ 1 1 1 1 1 1 1 1 1 1 7,344 ................ 1 1 1 1 1 1 1 1 1 1 1 8,016 DOE used RECS data to estimate the probability that a spa would be in use npy months per year as a function of climate zone. Given the sparsity of RECS data and to estimate the probabilities, DOE first binned the recorded value of MONTUB into 4 bins: 1 to 3 months per year, 4 to 6 months per year, 7 to 9 months per year, and 10 to 12 months per year. Then DOE calculated the percent of RECS households falling in each bin for each climate zone. Finally, DOE used the modelling assumption that the 3 values in each bin are equally probable. The resulting distribution of the expected 12 1 1 1 1 1 1 1 1 1 1 1 1 8,760 number of months per year (npy) are shown in Table III.17. Once the number of months of operation is known, the hours of operation are calculated as if the spa is in operation over the full month. TABLE III.17—ASSIGNMENT OF CLIMATE ZONE (z) BY MONTHS OF OPERATION (npy) FOR HARD-SIDED SPAS lotter on DSK11XQN23PROD with PROPOSALS2 Months per year (npy) 1 2 3 4 5 6 7 8 9 Cold/very cold ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... 26 Final Staff Report, Analysis of Efficiency Standards and Marking for Spas, 2018 Appliance VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Hot-dry/ mixed-dry 0.07 0.07 0.07 0.07 0.06 0.06 0.06 0.06 0.12 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.13 Efficiency Rulemaking for Spas Docket Number 18– AAER–02 TN 222413. See: pg. 35, Available at PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 Hot-humid 0.09 0.09 0.09 0.09 0.05 0.05 0.05 0.05 0.11 Marine Mixed-humid 0.06 0.06 0.06 0.06 0.05 0.05 0.05 0.05 0.14 https://efiling.energy.ca.gov/GetDocument. aspx?tn=222413&DocumentContentId=31256. E:\FR\FM\17NOP2.SGM 17NOP2 0.04 0.04 0.04 0.04 0.06 0.06 0.06 0.06 0.15 69099 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.17—ASSIGNMENT OF CLIMATE ZONE (z) BY MONTHS OF OPERATION (npy) FOR HARD-SIDED SPAS—Continued Months per year (npy) Cold/very cold 10 ......................................................................................... 11 ......................................................................................... 12 ......................................................................................... Hot-dry/ mixed-dry 0.12 0.12 0.12 Hot-humid 0.13 0.13 0.13 0.11 0.11 0.11 Marine Mixed-humid 0.14 0.14 0.14 0.15 0.15 0.15 TABLE III.18—ASSIGNMENT OF CLIMATE ZONE (z) BY MONTHS OF OPERATION (npy) FOR INFLATABLE SPAS Months per year (npy) 1 2 3 4 5 6 Cold/very cold ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... ........................................................................................... DOE requests comment on its approach to estimating annual operating hours. Additionally, DOE requests comment on its modeling assumption that PES would be operated during the warmest months of the year. 3. Ambient Temperature (Tamb) For the purposes of the NODA, DOE has made the modeling assumption that all PESs are installed outdoors and their energy use will be a function of the ambient temperature of the PESs’ location. Losses to the external environment depend both on how many months per year the spa operates, and Hot-dry/ mixed-dry 0.17 0.17 0.17 0.17 0.16 0.16 Hot-humid 0.16 0.16 0.16 0.16 0.18 0.18 0.19 0.19 0.19 0.19 0.12 0.12 the distribution of ambient temperatures for those months in the given climate zone. To establish representative hourly temperatures for each of the PESs’ installations as a function of climate zone (z), DOE calculated the probability distribution of temperatures, binned into 5 °F segments, denoted j, based on TMY3 data. For this NODA, DOE averaged over one TMY3 weather station for each state within a climate zone to determine a single hourly temperature series for each zone, z. For each value of npy, DOE binned the temperature time series for the Marine Mixed-humid 0.17 0.17 0.17 0.17 0.15 0.15 0.13 0.13 0.13 0.13 0.23 0.23 appropriate months to create a distribution. The distribution was normalized by the total number of hours for that selection of months. The result is a distribution w(z,j,npy), which defines the percent of hours allocated to each bin j for climate zone z, with npy months of operation.27 An example of the probability distribution of ambient temperatures for PESs operating for 1 and 7 months a year installed in census region 2 (Midwest), which covers climate zones: cold/very cold and mixed-humid, are shown in Table III.19. TABLE III.19—EXAMPLE AMBIENT TEMPERATURE PROBABILITIES FOR CENSUS REGION 2 (MIDWEST), WHERE PESS ARE OPERATED FOR 1 AND 7 MONTHS PER YEAR lotter on DSK11XQN23PROD with PROPOSALS2 Months of operation npy Probability (w) Temperature bin °F (j ) Cold/very cold (z) Mixed-humid (z) 1 1 1 1 1 1 1 ..................... ..................... ..................... ..................... ..................... ..................... ..................... 62.5 67.5 72.5 77.5 82.5 87.5 92.5 0.095 0.223 0.219 0.249 0.172 0.042 .................................................................. .................................................................. 0.067 0.266 0.215 0.196 0.179 0.077 7 7 7 7 7 7 7 7 7 7 7 7 7 Total ........ ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... .................................................................. 32.5 37.5 42.5 47.5 52.5 57.5 62.5 67.5 72.5 77.5 82.5 87.5 92.5 1.000 0.003 0.033 0.052 0.084 0.102 0.117 0.155 0.165 0.134 0.102 0.046 0.008 .................................................................. 1.00 .................................................................. 0.001 0.022 0.049 0.071 0.123 0.135 0.156 0.168 0.116 0.099 0.048 0.012 27 For the treatment of TMY3 data and mapping weather stations to regions, climate zones and states please see Appendix 7C or the Technical Support VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Consumer Furnaces. U.S. Department PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 of Energy. 2022. Available at https:// www.regulations.gov/document/EERE-2014-BTSTD-0031-0320. E:\FR\FM\17NOP2.SGM 17NOP2 69100 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.19—EXAMPLE AMBIENT TEMPERATURE PROBABILITIES FOR CENSUS REGION 2 (MIDWEST), WHERE PESS ARE OPERATED FOR 1 AND 7 MONTHS PER YEAR—Continued Months of operation npy Total ........ Probability (w) Temperature bin °F (j ) Cold/very cold (z) Mixed-humid (z) .................................................................. Representative values of the distribution are provided in Table III.19 for one month of operation and for seven months of operation per year. In general, the smaller the npy, the more usage is concentrated in warmer months. DOE requests comment on its approach to determining regional ambient temperatures. 4. Operating Water Temperature (Top) An input to the energy use analysis is the typical stand-by mode operating temperature of the spa. DOE 1.000 understands that the typical operating temperature for any given spa would be determined by the personal preference of the consumer. Further, DOE understands that all potential product classes of PESs can be operated over a range of temperatures, with a recommended safe operating maximum temperature of 104 °F.28 DOE recognizes that this maximum temperature would not apply to exercise spas not capable of maintaining a minimum water temperature of 100 °F. DOE was unable to find a credible source to create a lower bound, minimum stand-by 1.00 operating temperature. In a guidance document to dutyholders of spas, the Health and Safety Executive determined a typical operating range of 30–40 °C (86–104 °F).29 For any future potential energy conservation standards for PESs, DOE tentatively concludes that the typical stand-by mode operating temperatures aligns with the minimum operating temperatures stated in APSP–14 2019, and that these temperatures are representative of the average. These values are shown in Table III.20. TABLE III.20—TYPICAL OPERATING WATER TEMPERATURE (°F) BY SPA POTENTIAL PRODUCT CLASS DEFINED IN APSP–14 2019 Temp. °F Product class Requirement 102 ±2 .. exercise spas or the exercise portion of a combination spa. exercise spas or the exercise portion of a combination spa. standard spas, the standard spa portion of a combination spa, or inflatable spas. capable of maintaining a minimum water temperature of 100 °F. is not capable of maintaining a minimum water temperature of 100 °F. ........................................................................................... 87 ±2 .... 102 ±2 .. For spas capable of maintaining a minimum water temperature of 100 °F, DOE assumed for modelling a single point temperature of 102 °F. For spas not capable of maintaining a minimum water temperature of 100 °F, DOE assumed for modelling a single point temperature of 87 °F. DOE split the fraction of exercise, and the exercise portion of combination spas, where 30 percent of installations would operate at 87 °F and the remaining 70 percent of installations would operate at 102 °F. DOE made the modeling assumption that the spa would be maintained at this temperature for the operating hours that the spa is in stand-by mode. However, in the field, DOE expects that spas will be operated over a range of temperatures to meet the comfort of the consumer. DOE requests data or comment on the typical operating temperature for exercise spas not capable of maintaining a minimum temperature of 100 °F. And DOE requests data or comment on the distribution of typical operating Reference 5.6.1.1 5.6.1.2 5.6.1.3 temperature for exercise spas not capable of maintaining a minimum temperature of 100 °F. DOE requests data or comment on the distribution of typical operating temperature for spas capable of maintaining a minimum temperature of 100 °F. And DOE requests data or comment on the distribution of typical operating temperature for exercise spas capable of maintaining a minimum temperature of 100 °F. 5. Annual Energy Use Results TABLE III.21—AVERAGE ANNUAL ENERGY USE BY POTENTIAL PRODUCT CLASS (KWH/YEAR) Spa type Efficiency level lotter on DSK11XQN23PROD with PROPOSALS2 Combination 0 1 2 3 4 5 6 ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... 28 U.S. Consumer Product Safety Commission, CPSC Warns of Hot Tub Temperatures, December 31, 1979. Available at www.cpsc.gov/Newsroom/ VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 8,978 5,118 4,182 3,978 3,783 3,654 2,894 News-Releases/1980/CPSC-Warns-Of-Hot-TubTemperatures (Last accessed: January 14, 2022.) PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 Exercise 6,869 3,937 3,219 3,063 2,902 2,803 2,223 Inflatable 988 816 511 507 N/A N/A N/A Standard 2,570 1,542 1,283 1,228 1,101 1,066 860 29 The Control of Legionella and Other Infectious Agents in Spa-Pool Systems, Health and Safety Executive, 2017. Available at www.hse.gov.uk/ pubns/priced/hsg282.pdf. E:\FR\FM\17NOP2.SGM 17NOP2 69101 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.21—AVERAGE ANNUAL ENERGY USE BY POTENTIAL PRODUCT CLASS (KWH/YEAR)—Continued Spa type Efficiency level Combination 7 ....................................................................................................................... 8 ....................................................................................................................... F. Life-Cycle Cost and Payback Period Analyses DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers defined in the consumer sample (see section III.E.1) of potential energy conservation standards for PESs. The effect of potential energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. In this NODA, DOE used the following two metrics to measure consumer impacts: • The LCC is the total consumer expense of an appliance or product over the life of that product, consisting of total installed cost (manufacturer selling price, distribution chain markups, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product. • The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a moreefficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher efficiency levels by the change in annual operating cost for the year that amended or new standards are assumed to take effect. For any given efficiency level, DOE measures the change in LCC relative to the LCC in the no-new-standards case, which reflects the estimated efficiency Exercise 2,605 2,512 distribution of PESs in the absence of new or amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline product. For each considered efficiency level in each potential product class, DOE calculated the LCC and PBP for a nationally representative set of housing units. As stated previously, DOE developed household samples from the 2015 RECS. For each sample household, DOE determined the energy consumption for the PESs and the appropriate electricity price. By developing a representative sample of households, the analysis captured the variability in energy consumption and energy prices associated with the use of PESs. Inputs to the calculation of total installed cost include the cost of the product—which includes MPCs, manufacturer markups, retailer and distributor markups, and sales taxes— and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, product lifetimes, and discount rates. DOE created distributions of values for product lifetime, discount rates, and sales taxes, with probabilities attached to each value to account for their uncertainty and variability. The computer model DOE uses to calculate the LCC and PBP relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and PES’s user 2,002 1,931 Inflatable N/A N/A Standard 781 756 samples. For this NODA the Monte Carlo approach was implemented in a computer simulation. The model calculated the LCC and PBP for products at each efficiency level for 10,000 housing units per simulation run. The analytical results include a distribution of 10,000 data points showing the range of LCC savings for a given efficiency level relative to the nonew-standards case efficiency distribution. In performing an iteration of the Monte Carlo simulation for a given consumer, product efficiency is chosen based on its probability. If the chosen product efficiency is greater than or equal to the efficiency of the standard level under consideration, the LCC and PBP calculation reveals that a consumer is not impacted by the standard level. By accounting for consumers who already purchase more-efficient products, DOE avoids overstating the potential benefits from increasing product efficiency. DOE calculated the LCC and PBP for all consumers of PESs as if each were to purchase a new product in the expected year of required compliance with new standards. Any new standards would apply to PESs manufactured 5 years after the date on which any new standard is published. (42 U.S.C. 6295(l)(2)) For purposes of its analysis, DOE used 2029 as the first year of compliance with any new standards for PESs. Table III.22 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion on the approach and data. lotter on DSK11XQN23PROD with PROPOSALS2 TABLE III.22—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS * Inputs Source/method Product Cost ................................... Installation Costs ............................. Annual Energy Use ......................... Derived by multiplying MPCs by manufacturer and retailer markups and sales tax, as appropriate. Assumed no change with efficiency level and not considered in the NODA. The total annual energy use multiplied by the hours per year. Average number of hours based on RECS 2015. Variability: Based on the Census region, and Climate Zone. Electricity: Determined as per LBNL–2001169.30 Based on AEO2022 price projections. Assumed not to change with efficiency level. Average: 10.5 years for hard-sided spas, 3.0 for inflatable spas. Energy Prices .................................. Energy Price Trends ....................... Repair and Maintenance Costs ...... Product Lifetime .............................. 30 Coughlin, K., Beraki, B. Residential Electricity Prices A Review of Data Sources and Estimation Methods. Energy Analysis and Environmental VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Impacts Division Lawrence Berkeley National Laboratory Energy Efficiency Standards Group. PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 2018. Available at https://eta-publications.lbl.gov/ sites/default/files/lbnl-2001169.pdf. E:\FR\FM\17NOP2.SGM 17NOP2 69102 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.22—SUMMARY OF INPUTS AND METHODS FOR THE LCC AND PBP ANALYSIS *—Continued Inputs Source/method Discount Rates ................................ Approach involves identifying all possible debt or asset classes that might be used to purchase the considered appliances or might be affected indirectly. Primary data source was the Federal Reserve Board’s Survey of Consumer Finances. 2029. 1. Inputs to the Life-Cycle Cost Model The LCC is the total consumer expense during the life of an appliance, including purchase expense and operating costs (including energy expenditures). DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product. DOE defines LCC by the following equation: L N LCC =TIC+ (1 act + r)t t=l Where: LCC = life-cycle cost in dollars, TIC = total installed cost in dollars, è = sum over product lifetime, from year 1 to year N, N = lifetime of appliance in years, OCt = operating cost in dollars in year t, r = discount rate, and t = year for which operating cost is being determined. DOE expresses dollar values in 2021$ for the LCC. a. Inputs to Total Installed Cost Product Costs To calculate consumer product costs, DOE multiplied the MSPs developed in the engineering analysis by the markups described previously (along with sales taxes). DOE used different markups for baseline products and higher-efficiency products because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency products. lotter on DSK11XQN23PROD with PROPOSALS2 Future Product Costs Examination of historical price data for certain appliances and equipment that have had energy conservation standards indicates that the assumption of constant real prices and costs may overestimate long-term trends in appliance and equipment prices in many cases. Economic literature and historical data suggest that the real costs of these products may, in fact, trend downward over time according to ‘‘learning’’ or ‘‘experience’’ curves. Desroches et al. (2013) summarizes the data and literature currently available that is relevant to price projections for VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 selected appliances and equipment.31 The extensive literature on the ‘‘learning’’ or ‘‘experience’’ curve phenomenon is typically based on observations in the manufacturing sector.32 In the experience curve method, the real cost of production is related to the cumulative production or ‘‘experience’’ with a manufactured product. This experience is usually measured in terms of cumulative production. Thus, as experience (production) accumulates, the cost of producing the next unit decreases. If DOE proceeds with new efficiency standards for PESs, DOE may derive the learning rate parameter for all PESs from the historical Producer Price Index (‘‘PPI’’) data for ‘‘326191—Plastics Plumbing Fixture Manufacturing’’ for the time period between 1993 and 2021 from the Bureau of Labor Statistics (‘‘BLS’’).33 34 If DOE determines that new efficiency standards for PESs are warranted, DOE will inflation-adjust the price indices calculation by dividing the PPI series by the implicit Gross Domestic Product price deflator for the same years. DOE requests comment on its proposed methodology to project future equipment prices. DOE requests information or data related to the past trends in production costs of PESs. Additionally, DOE requests data or information related to the cost of PES production over time. product. As part of its Title 20 regulatory activities for PESs, CEC examined potentially available technologies that can be employed to improve the efficiency of PESs. CEC’s report includes several technology options but states that improved insulation (in terms of improved insulation coverage, type, and quantity) within the tub walls and of the tub cover offer the greatest opportunity for improved efficiency. The report also mentions further attainable efficiency improvements through, but not limited to, improved spa cover design and improved pump and motor system design within in the spa itself.35 DOE tentatively finds that none of these technologies would impact the quantity of labor, overhead, or materials needed to install a PES if DOE were to adopt new energy efficiency standards. Based on these findings, DOE tentatively concludes that installation costs should not be included in any future life-cycle cost analysis. DOE requests comment on its decision to exclude installation costs from any future efficiency standard calculation. DOE requests data and details on the installation costs of PESs, and whether those costs vary by product type or any other factor affecting their efficiency. Installation Costs As noted, inputs to the calculation of total install cost include the installation costs. Installation cost includes labor, overhead, and any miscellaneous materials and parts needed to install the For each sampled household, DOE determined the energy consumption for a PES at different efficiency levels using the approach described previously in section III.E of this document. 31 Desroches, Louis-Benoit, et al., ‘‘Incorporating Experience Curves in Appliance Standards Analysis’’, Energy Policy 52 (2013): 402–416. 32 In addition to Desroches (2013), see Weiss, M., Junginger, H.M., Patel, M.K., Blok, K., (2010a). A Review of Experience Curve Analyses for Energy Demand Technologies. Technological Forecasting & Social Change. 77:411–428. 33 This U.S. industry consists of establishments primarily engaged in manufacturing plastics or fiberglass plumbing fixtures. Examples of products made by these establishments are plastics or fiberglass bathtubs, hot tubs, portable toilets, and shower stalls. See www.naics.com/naics-codedescription/?code=326191 34 Product series ID: NDU3261913261911, see more information at www.bls.gov/ppi. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 b. Inputs to Operating Costs Annual Energy Consumption Electricity Prices Using data from EEI Typical Bills and Average Rates reports, DOE derived annual electricity prices in 2021 for all the census regions in RECS.36 37 DOE calculated electricity prices using the 35 Final Staff Report, Analysis of Efficiency Standards and Marking for Spas, 2018 Appliance Efficiency Rulemaking for Spas Docket Number 18– AAER–02 TN 222413. Available at efiling.energy.ca.gov/GetDocument.aspx?tn= 222413&DocumentContentId=31256. 36 Edison Electric Institute, Typical Bills and Average Rates Report, Winter 2021, 2021. 37 Edison Electric Institute, Typical Bills and Average Rates Report, Summer 2021, 2021. E:\FR\FM\17NOP2.SGM 17NOP2 EP17NO22.001</GPH> Compliance Date ............................ Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules methodology described in Coughlin and Beraki (2018), where for each purchase sampled, DOE assigned the average and marginal electricity price for the census region in which the PES is located.38 Because marginal electricity price captures more accurately the incremental costs or savings associated with a change in energy use relative to the consumer’s bill in the reference case, it may provide a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE used average electricity prices to characterize the baseline energy level and marginal 69103 electricity prices to characterize the incremental change in energy costs associated with the other energy levels considered. The regional average and marginal electricity prices are shown in Table III.23. TABLE III.23—REGIONAL AVERAGE AND MARGINAL ELECTRICITY PRICES [$/kWh, 2021$] Census region 1 2 3 4 ....................................................... ....................................................... ....................................................... ....................................................... Northeast ................................................................................................... Midwest ..................................................................................................... South ......................................................................................................... West .......................................................................................................... Future Electricity Price Trends To arrive at prices in future years, DOE will multiply the 2021 electricity prices by the forecast of annual average price changes for each census division from the most recent Energy Information Administration’s Annual Energy Outlook (‘‘AEO’’).39 To estimate price trends after 2050, DOE maintained prices constant at 2050 levels. DOE requests comment on its use of AEO to project electricity prices into the future. lotter on DSK11XQN23PROD with PROPOSALS2 Maintenance and Repair Costs As noted, inputs to the calculation of operating expenses include repair and maintenance costs, among other factors. For this NODA, DOE made the modeling assumption that maintenance costs would not change with increased product stand-by efficiency. DOE understands that PES maintenance broadly falls into two categories: (1) maintaining water quality, and (2) the care and upkeep of the PES itself. DOE does not foresee a difference in costs to consumers in maintaining water quality under a new potential efficiency standard to stand-by power. Further, DOE understands the maintenance to 38 Coughlin, K., Beraki, B. Residential Electricity Prices A Review of Data Sources and Estimation Methods. Energy Analysis and Environmental Impacts Division Lawrence Berkeley National Laboratory Energy Efficiency Standards Group. 2018. Available at https://eta-publications.lbl.gov/ sites/default/files/lbnl-2001169.pdf. 39 See www.eia.gov/outlooks/aeo. 40 See https://staging-na01jacuzzi.demandware.net/on/demandware.static/-/ VerDate Sep<11>2014 18:07 Nov 16, 2022 Average $/kWh Geographic area Jkt 259001 the PES itself to be cleaning activities (i.e., cleaning of the filters, spa interior, spa exterior, and cover).40 Based on these understandings, DOE does not consider that these cleaning activities would cost the consumer more under a new potential energy conservation standard. However, DOE notes that the costs to repair more efficient PES mechanical systems and insulation may be greater in the case of a potential new energy conservation standard. DOE requests feedback and specific data on whether maintenance costs differ in comparison to the baseline maintenance costs for any of the specific efficiency improving technology options applicable to PESs. DOE requests comment on the typical repairs to PESs and how they may differ in the case of a potential new energy conservation standard. 0.1834 0.1380 0.1164 0.1959 Marginal $/kWh 0.1687 0.1240 0.0994 0.2145 PESs will be retired from service. To model PES lifetimes, DOE assumed that the probability function for the annual survival of PESs would take the form of a Weibull distribution. A Weibull distribution is a probability distribution commonly used to measure failure rates.41 42 a. Hard-Sided Spas DOE examined historical hard-sided spa installation data from PK Data, Inc. (‘‘PK Data’’) for the years from 2015 through 2020 and fit a Weibull distribution to these data with minimum and maximum lifetimes of 1 year and 30 years, respectively. This Weibull distribution yielded an average lifetime of 9.3 years. b. Inflatable Spas The product lifetime is the age at which a product is retired from service. Rather than use a single average value for the lifetime of PESs, DOE developed lifetime distributions to characterize the age, in years, when hard- and inflatable DOE did not have equivalent data from which to estimate lifetimes for inflatable spas. As a result, DOE used the average lifetime on the design life from the CEC CASE report on PESs.43 To estimate the lifetime of inflatable spas, DOE fit a Weibull function based on the modeling assumptions of an average and maximum lifetimes of 3.0 and 5.0 years, respectively. Library-Sites-jacuzzi-shared-content/default/ v44de813235d8b46eb8c84da693ec1bed8e8ec186/ pdf-documents/Jacuzzi_Swim_Spa_Collection_ Owners_Manual_English.pdf. 41 For reference on the Weibull distribution, see sections 1.3.6.6.8 and 8.4.1.3 of the NIST/ SEMATECH e-Handbook of Statistical Methods. Available at www.itl.nist.gov/div898/handbook/. 42 For an example methodology of how DOE approaches its survival calculation, see section 8.3.4 of chapter 8 of the Technical Support Document: Energy Efficiency Program For Consumer Products and Commercial and Industrial Equipment: Consumer Furnaces. DOE. 2022. Available at https://www.regulations.gov/ document/EERE-2014-BT-STD-0031-0320. 43 California Energy Commission. ‘‘Final Staff Report—Analysis of Efficiency Standards and Marking for Spas.’’ February 2, 2018. 2. Product Lifetime PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 69104 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.24—LIFETIME PARAMETERS Value Minimum (years) Hard-Sided Spas .................................................................. Inflatable Spas ..................................................................... DOE requests comment on its lifetime analysis. 3. Rebound Effect DOE considered the possibility that some consumers may use a higherefficiency PES more than a baseline one, thereby negating some or all the energy savings from the more-efficient product. Such a change in consumer behavior when operating costs decline is known as a (direct) rebound effect. Because the heating and pumping systems operation in ‘‘stand-by mode’’ also function when the PES is operated in ‘‘active mode,’’ an increase in PES usage due to a rebound effect would not impact any potential energy savings in a new standards case. For this reason, DOE tentatively finds that the rebound effect should not apply to PES stand-by power. DOE requests comment on its reasoning to not apply a rebound effect to PES stand-by power energy use. 4. Energy Efficiency Distribution in the No-New-Standards Case To accurately estimate the share of consumers that would be affected by a potential energy conservation standard Weibull parameters Average (years) 1 1 Maximum (years) 9.3 3.0 at a particular efficiency level, DOE’s LCC analysis considers the projected distribution (market shares) of product efficiencies under the no-new-standards case (i.e., the case without amended or new energy conservation standards). To establish the fraction of PES purchases that exceed baseline equipment in terms of energy efficiency in the absence of potential new standards, DOE examined information provided by PHTA and U.S. Census data. The information provided by the PHTA shows the adoption of state level minimum efficiency requirements for PESs. These state level programs are related to different editions of APSP–14 2019, and this variation in state-level adoption creates a fractured regulatory environment where different states have different minimum energy efficiency requirements. For this NODA, DOE has made the simplified modeling assumption that all spas sold in states with an existing standard would adhere to APSP–14 2019 and will be considered above the baseline in 2029. Further, DOE notes that the RECS 2015 data does not have Alpha (scale) 30 5 9.91 3.20 Beta (shape) 1.85 7.00 state-level information from which to derive the relative spa owning probability for each state, and, for the purposes of estimating the efficiency distribution in the no-new standards case, DOE used state populations published in the 2021 Census.44 DOE acknowledges that this modeling assumption may overrepresent the state of national efficiency adoption to the detriment of national energy savings as states with less stringent standards are modeled with greater minimum efficiency levels. However, this potential overrepresentation may be balanced by those consumers in nonregulated states purchasing more efficient products. These populations are shown in Table III.25 and are held constant over time. Using the projected distribution of efficiencies for PESs, DOE randomly assigned a product efficiency to each household drawn from the consumer sample. If a consumer is assigned a product efficiency that is greater than or equal to the efficiency under consideration, the consumer would not be affected by a standard at that efficiency level. lotter on DSK11XQN23PROD with PROPOSALS2 TABLE III.25—PESS MINIMUM EFFICIENCY STANDARDS BY STATE State Standard Arizona ........................................................................................ California ..................................................................................... Connecticut ................................................................................. District of Columbia .................................................................... Massachusetts ............................................................................ New Jersey ................................................................................. Oregon ........................................................................................ Pennsylvania .............................................................................. Rhode Island .............................................................................. Colorado ..................................................................................... Maryland ..................................................................................... Nevada ....................................................................................... Vermont ...................................................................................... Washington ................................................................................. AZ Title 44 .................................................................................. APSP 14–2019 ........................................................................... CA Title 20 (2006) ...................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2014 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2019 ........................................................................... APSP 14–2014 ........................................................................... APSP 14–2014 ........................................................................... 7,276,316 39,237,836 3,605,597 670,050 6,984,723 9,267,130 4,246,155 12,964,056 1,095,610 5,812,069 6,165,129 3,143,991 645,570 7,738,692 Total Population Covered by Standards ............................................................................................................................................. U.S. Population .................................................................................................................................................................................... Fraction above Baseline ...................................................................................................................................................................... Fraction at Baseline ............................................................................................................................................................................. 108,852,924 331,893,745 32.8% 67.2% 44 Annual Estimates of the Resident Population for the United States, Regions, States, District of VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 Columbia, and Puerto Rico: April 1, 2020 to July 1, PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 Population 2021 (NST–EST2021–POP). U.S. Census Bureau, Population Division. December 2021. E:\FR\FM\17NOP2.SGM 17NOP2 69105 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.26—DISTRIBUTION OF EFFICIENCIES IN THE NO-NEW STANDARDS CASE (%) Efficiency level Type All Spas ........................ 0 1 2 3 4 5 6 7 8 67.2 32.8 0 0 0 0 0 0 0 5. Discount Rates In the calculation of LCC, DOE applies discount rates appropriate to households to estimate the present value of future operating cost savings in the year of compliance. DOE estimated a distribution of discount rates for PESs based on the opportunity cost of consumer funds. DOE applies weighted average discount rates calculated from consumer debt and asset data, rather than marginal or implicit discount rates.45 The LCC analysis estimates net present value over the lifetime of the product. As a result, the appropriate discount rate will reflect the general opportunity cost of household funds, taking this time scale into account. Given the long-time horizon modeled in the LCC analysis, the application of a marginal interest rate associated with an initial source of funds is inaccurate. Regardless of the method of purchase, consumers are expected to continue to rebalance their debt and asset holdings over the LCC analysis period, based on the restrictions consumers face in their debt payment requirements and the relative size of the interest rates available on debts and assets. DOE estimates the aggregate impact of this rebalancing using the historical distribution of debts and assets. To establish residential discount rates for the LCC analysis, DOE identified all relevant household debt or asset classes to approximate a consumer’s opportunity cost of funds related to appliance energy cost savings. Then DOE estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board’s Survey of Consumer Finances (‘‘SCF’’) for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.46 Using the SCF and other sources, DOE developed a distribution of rates for each type of debt and asset by income group to represent the rates that may apply in the year in which new energy conservation standards would take effect. DOE assigned each sample household a specific discount rate drawn from one of the distributions. The average rate across all types of household debt and equity and income groups were then mapped to RECS income bins for the fraction of homes with portable electric spas.47 TABLE III.27—MAPPING OF SCF INCOME GROUPS TO RECS 2015 INCOME BIN RECS income bins 1 2 3 4 5 6 7 8 1 ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... 2 100.0% 2.9% 3 86.6% 10.6% 100.0% 15.4% 4 5 84.6% 100.0% 13.4% 6 86.6% 88.4% 11.6% 100.0 TABLE III.28—AVERAGE REAL EFFECTIVE DISCOUNT RATES SCF income group Discount rate (%) 1 ................................................................................................................ 2 ................................................................................................................ 3 ................................................................................................................ 4 ................................................................................................................ 5 ................................................................................................................ 6 ................................................................................................................ Overall Average ........................................................................................ 4.76 4.99 4.54 3.84 3.47 3.23 4.29 lotter on DSK11XQN23PROD with PROPOSALS2 Source: Board of Governors of the Federal Reserve System, Survey of Consumer Finances (1995–2019). 45 The implicit discount rate is inferred from a consumer purchase decision between two otherwise identical goods with different first cost and operating cost. It is the interest rate that equates the increment of first cost to the difference in net present value of lifetime operating cost, incorporating the influence of several factors: transaction costs; risk premiums and response to uncertainty; time preferences; and interest rates at which a consumer is able to borrow or lend. The implicit discount rate is not appropriate for the LCC VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 analysis because it reflects a range of factors that influence consumer purchase decisions, rather than the opportunity cost of the funds that are used in purchases. 46 Note that two older versions of the SCF are also available (1989 and 1992); these surveys are not used in this analysis because they do not provide all of the necessary types of data (e.g., credit card interest rates, etc.). DOE has tentatively determined that the time span covered by the eight surveys PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 included is sufficiently representative of recent debt and equity shares and interest rates. 47 A detailed discussion of DOE discount rate methodology for residential consumers can be found in the Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Consumer Furnaces. DOE, 2022, in chapters 8, and appendix 8H. Available at https://www.regulations.gov/ document/EERE-2014-BT-STD-0031-0320. E:\FR\FM\17NOP2.SGM 17NOP2 69106 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules 6. Payback Period Analysis The PBP is the amount of time it takes the consumer to recover the additional installed cost of more-efficient products, compared to baseline products, through energy cost savings. PBP are expressed in years. PBP that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses. The equation for PBP is: ll/C PBP = flOC Where: PBP = payback period in years, DIC = difference in the total installed cost between the more efficient product (efficiency levels 1, 2, 3, etc.) and the baseline product, and DOC = difference in first-year annual operating costs between the more efficient product and the baseline product. The data inputs to PBP are the total installed cost of the product to the consumer for each efficiency level and the annual (first year) operating costs for each efficiency level. As for the LCC, the inputs to the total installed cost are the product price and installation cost. The inputs to the operating costs are the annual energy and annual maintenance costs. The PBP uses the same inputs as does the LCC analysis, except that electricity price trends are not required. Because the PBP is a simple payback, the required electricity cost is only for the year in which a potential new energy conservation standard would take effect—in this case, 2029. 7. Consumer Results TABLE III.29—STANDARD SPAS: AVERAGE LCC AND PBP RESULTS Average costs (2021$) Efficiency level Installed cost 0 1 2 3 4 5 6 7 8 ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... First year’s operating cost Lifetime operating cost 352 246 207 198 179 174 142 130 126 2,648 1,849 1,555 1,491 1,345 1,305 1,068 978 949 8,507 8,594 8,852 9,165 9,725 10,338 11,347 12,530 13,851 Simple payback period (years) LCC 11,644 10,937 10,918 11,188 11,638 12,251 13,088 14,258 15,636 Average lifetime (years) ........................ 0.8 2.4 4.5 7.8 11.9 16.5 23.9 34.6 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 TABLE III.30—STANDARD SPAS: AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTION % Consumers with net cost Efficiency level 1 2 3 4 5 6 7 8 ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... 6.4 35.2 51.2 65.9 77.0 84.6 91.4 96.1 Average savings— impacted consumers (2021$) 1,056 726 456 6 ¥607 ¥1,444 ¥2,614 ¥3,992 TABLE III.31—EXERCISE SPAS: AVERAGE LCC AND PBP RESULTS Efficiency level lotter on DSK11XQN23PROD with PROPOSALS2 Installed cost 0 1 2 3 4 5 6 7 8 ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 First year’s operating cost 26,791 27,063 27,876 28,862 30,624 32,556 35,731 39,459 43,618 PO 00000 Frm 00026 Lifetime operating cost 930 631 521 497 472 457 368 335 324 Fmt 4701 Sfmt 4702 6,937 4,715 3,892 3,715 3,530 3,417 2,756 2,504 2,423 Simple payback period (years) LCC 35,077 33,144 33,187 34,060 35,751 37,696 40,415 44,132 48,479 E:\FR\FM\17NOP2.SGM ........................ 0.9 2.7 5.1 9.4 14.6 20.2 29.7 44.0 17NOP2 Average lifetime (years) 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 EP17NO22.002</GPH> Average costs (2021$) Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules 69107 TABLE III.32—EXERCISE SPAS: AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTION % Consumers with net cost Efficiency level 1 2 3 4 5 6 7 8 ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... 7.9 39.5 55.8 72.1 82.1 88.5 94.2 97.5 Average savings— impacted consumers (2021$) 2,889 1,889 1,017 ¥674 ¥2,619 ¥5,338 ¥9,055 ¥13,403 TABLE III.33—COMBINATION SPAS: AVERAGE LCC AND PBP RESULTS Average costs (2021$) Efficiency level Installed cost 0 1 2 3 4 5 6 7 8 ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... First year’s operating cost Lifetime operating cost 1,218 823 678 647 617 597 481 437 422 9,093 6,143 5,064 4,831 4,609 4,460 3,592 3,262 3,155 34,175 34,523 35,560 36,818 39,065 41,531 45,581 50,336 55,642 Simple payback period (years) LCC 44,965 42,387 42,412 43,519 45,690 48,167 51,611 56,345 61,888 Average lifetime (years) ........................ 0.9 2.7 4.9 9.1 14.1 19.5 28.6 42.2 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 TABLE III.34—COMBINATION SPAS: AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTION % Consumers with net cost Efficiency level 1 2 3 4 5 6 7 8 ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... 7.5 38.4 54.2 70.6 81.0 88.2 94.1 97.4 Average savings— impacted consumers (2021$) 3,835 2,553 1,446 ¥724 ¥3,201 ¥6,646 ¥11,379 ¥16,923 TABLE III.35—INFLATABLE SPAS: AVERAGE LCC AND PBP RESULTS Average costs (2021$) Efficiency level lotter on DSK11XQN23PROD with PROPOSALS2 Installed cost 0 1 2 3 ............................................................... ............................................................... ............................................................... ............................................................... VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 First year’s operating cost Lifetime operating cost 147 130 83 82 424 375 238 237 244 287 549 858 PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 Simple payback period (years) LCC E:\FR\FM\17NOP2.SGM 780 778 924 1,256 ........................ 2.8 5.5 13.0 17NOP2 Average lifetime (years) 3.0 3.0 3.0 3.0 69108 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.36—INFLATABLE SPAS: AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE EFFICIENCY DISTRIBUTION: COMBINATION SPAS % Consumers with net cost Efficiency level 1 ............................................................................................................................................................................... 2 ............................................................................................................................................................................... 3 ............................................................................................................................................................................... G. Shipments Analysis DOE uses projections of annual product shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.48 The shipments model takes an accounting approach in tracking market shares of each potential product class and the vintage of units in the stock. Stock accounting uses product shipments as inputs to estimate the age distribution of in-service product stocks for all years. The age distribution of in-service product stocks is a key input to calculations of both the NES and NPV because operating costs for any year depend on the age distribution of the stock. 1. Approach to Shipments and Stock Models DOE developed a national stock model to estimate annual shipments of products under potential energy efficiency standards. The model considers market segments as distinct inputs to projected shipments. DOE considered new home installations and replacements in existing households as the primary market segments for PESs. DOE’s shipments model takes a stock accounting approach, tracking the vintage of units in the existing stock and expected housing stock trends. The stock accounting uses product shipments, a retirement function, and initial in-service product stock as inputs to develop an estimate of the age distribution of in-service product stock for all years. The age distribution of inservice product stock is a key input to calculations of both the NES and NPV because the operating costs for any year depend on the age distribution of the stock. The dependence of operating cost on the product age distribution occurs under a standards-case scenario that produces increasing efficiency over 38.7 84.6 99.6 Average savings— impacted consumers (2021$) 3 ¥143 ¥475 time, whereby older, less efficient units may have higher operating costs, while younger, more-efficient units have lower operating costs. 2. Initial Stock Estimates a. Hard-Sided Spas Stock DOE used industry data from PK Data to estimate the initial stock for hardsided spas.49 The PK Data were compiled from manufacturer data and other sources, including dealers, retailers, and consumers, and provide an estimated installation base for these spas. However, these data did not specify the fraction of installations that are standard, exercise, or combination spas. For this NODA, DOE has made the modeling assumptions that the fraction of the market for standard, exercise, and combination spas will follow the model count in MAEDbS.50 The stock breakdown based on the data received by DOE from PK Data and the weights from MAEDbS are shown in Table III.37. TABLE III.37—PK DATA AND DOE STOCK ESTIMATES OF HARD-SIDED SPAS [Units, 2020] All spas PK data Fraction (%) ..................................................................................................... Units (2020) ..................................................................................................... DOE requests comment on its stock ratios for hard-sided spas. Additionally, DOE seeks input on the market shares of standard, exercise, and combination spas. lotter on DSK11XQN23PROD with PROPOSALS2 b. Inflatable Spas Stock Inflatable spas (inflatable spas) are a relatively new product to the spa 48 DOE uses data on manufacturer shipments as a proxy for national sales, as aggregate data on sales are lacking. In general, one would expect a close correspondence between shipments and sales. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 100 5,454,117 Standard 85 4,635,999 Exercise 12 654,494 Combination 3 163,624 industry. As such, DOE was unable to find comprehensive, publicly available information to indicate either their shipments or existing stock. The CEC’s ‘‘2018 Appliance Efficiency Rulemaking for Spas, Final Staff Report’’ projected California’s stock of inflatable spas in 2020 to be 20,101 units. When this value is scaled by population, it produces a national stock estimate of 170,025 units, or approximately 3 percent of the stock of hard-sided Spas. For this NODA, DOE has made the modeling assumption that stock of inflatable spas in 2020 was 170,025 units. 49 P.K. Data Inc. 2022 Hot Tube Market Data: Custom Compilation for Lawrence Berkeley National Laboratory (through 2021). 2022. Alpharetta, GA. (Last accessed April 12, 2022.) Available at https://www.pkdata.com/reportsstore.html#/. 50 California Energy Commission’s Modernized Appliance Efficiency Database System. Available at https://cacertappliances.energy.ca.gov/Login.aspx. PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules 69109 TABLE III.38—ESTIMATED TOTAL PES STOCKS, AND MARKET WEIGHT, 2020 (UNITS) Potential product class weight, M Potential product class Standard .................................................................................................................................................................. Exercise ................................................................................................................................................................... Combination ............................................................................................................................................................. Inflatable .................................................................................................................................................................. Stocki = S toek t x Stockt, Where: Stockt = the total PES stock in 2022, i.e., 5,624,142 units, i = an index indicating the location (r, z) of the spa, S = the saturation (count) of spas per singlefamily household, and H = total single-family households. 4. Determining Annual Spa Shipments a. Initial Shipments Initial shipments for each potential product class of PESs are derived from the stock estimates in section III.G.2, as: . (SH) xM Ships= L lotter on DSK11XQN23PROD with PROPOSALS2 avg Where: Ships = total PES shipments for each product class, M = PES market weight (see Table III.38), and Lavg = the average potential product class’s lifetime. b. New Spa Shipments To estimate shipments of new purchases, DOE used projections of total housing stock from AEO2022 coupled with the estimated PES saturation. In other words, to project the shipments for new purchases for any given year, DOE multiplied the regional stock housing projections by the estimated VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 c. Spa Replacements Over time, some units will be retired and removed from stock, thereby 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 unit fails, DOE used a Weibull survival function based on a product lifetime distribution with an average lifetime of 9.3 years and 3.5 years for hard-sided, and inflatable spas, respectively. For a more complete discussion of lifetimes, refer to section III.F.2. Shipments for replacements are defined as: y-1 Shipr(Y) L = PrShips y-Lmax Where: Shipr = shipments for replacement, Lmax = product maximum lifetime, and pr = a product’s retirement probability. d. Demolitions Demolitions refer to the destruction of in-service spas that are not replaced with new equipment. For this NODA, DOE defined the demolition rate as follows. For each location (r, z), and analysis year, y. E = T¥N E(y - 1) - E(y) (j + N(y) = - - E(y) - -+-N(y) --- Where: s = the demolition rate, and E = existing single-family house count, derived from RECS. e. Product Lifetimes The methodology used to determine the distribution of PESs’ lifetimes is discussed in section III.F.2. PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 g. Calculating Shipments and Stock DOE calculates the total in-service stock of products by integrating historical shipments data starting from a specified year. The start year depends on the historical data available for each product, which for this NODA is based on data from PK Data in 2020. As units are added to the in-service stock, some older units retire and exit the stock. In this NODA, for each year in the analysis period from 2029 through 2058, DOE calculated the shipments and stock as: Stock(y) = Stock(y¥1) (1¥s) + Shipn(y), and Ships(y) = Shipn(y) + Shipr(y) + sStock(y¥1). As the last unit shipped during the analysis period will survive beyond 2056, their presence was be accounted for as: Stock(y) = Stock(y¥1)¥Shipr(y), 5. Impacts of Increased Product Costs on Shipments Because DOE’s projections of shipments and national impacts from potential energy conservation standards consider a 30-year period, DOE needed to consider how price elasticity evolves in the years after a new standard takes effect in this NODA. Price elasticity is a factor that reflects the percent change in quantity purchased of a product 51 U.S. Department of Energy—Energy Information Administration. Annual Energy Outlook 2022. 2022. Washington, DC. (Last accessed July 10, 2022.) See: Table 4. Residential Sector Key Indicators and Consumption—Case: Reference case Available at https://www.eia.gov/ outlooks/aeo/data/browser/#/?id=4-AEO2022& cases=ref2022&sourcekey=0. E:\FR\FM\17NOP2.SGM 17NOP2 EP17NO22.006</GPH> Stocki Shipn (y) = N(y)S(y) Where: Shipn = new shipments, y = year of analysis, and N = new housing starts. f. Future Portable Electric Spa Shipments To project future shipments, DOE typically uses new housing starts projections from AEO as market drivers for products sold to the residential sector. For this NODA, DOE used the Single-Family Households trend from AEO2022 to drive future spa shipments.51 DOE requests comment on its proposed use of future residential construction to project future shipments of PESs. EP17NO22.005</GPH> 3. Product Saturations PES stocks are distributed nationally according to the number of single-family houses by census region, r, and climate zone, z, derived from RECS. These regional distributions are considered static over the analysis period. PES saturations are expressed as: saturation of PES. New shipments in each year are determined as: 4,635,999 654,494 163,624 170,025 EP17NO22.003</GPH> EP17NO22.004</GPH> DOE seeks comment on its 2020 stock estimates for all spa types. 82.5 11.7 2.9 2.9 Units 69110 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules given a 1 percent change in price. DOE conducted a literature review and an analysis of appliance price and efficiency data to estimate the effects on product shipments from increases in product purchase price and product energy efficiency. Existing studies of appliance markets suggest that the demand for durable goods, such as appliances, is priceinelastic. Other information in the literature suggests that appliances are a normal good, such that rising incomes increase the demand for appliances, and that consumer behavior reflects relatively high implicit discount rates when comparing appliance prices and appliance operating costs. DOE considered the price elasticity developed above to be a short-term value but was unable to identify sources specific to PESs that would be sufficient to model differences in short- and longterm price elasticities. Therefore, to estimate how the price elasticity changes through time, DOE relied on a study pertaining to automobiles.52 This study shows that the price elasticity of demand for automobiles changes in the years following a change in purchase price, a trend also observed in appliances and other durables.53 54 As time passes from the change in purchase price, the price elasticity becomes more inelastic until it reaches a terminal value around the tenth year after the price change. Table III.39 shows the relative change over time in the price elasticity of demand for automobiles. As shown in the table, DOE developed a time series of price elasticity for residential appliances based on the relative change over time in the price elasticity of demand for automobiles. For years not shown in the table, DOE performed a linear interpolation to obtain the price elasticity.55 TABLE III.39—CHANGE IN RELATIVE PRICE ELASTICITY FOLLOWING A CHANGE IN PURCHASE PRICE Years following price change 1 Change in elasticity relative to first year Price elasticity .......................................... 2 1.00 ¥0.45 3 0.78 ¥0.35 5 0.63 ¥0.28 10 0.46 ¥0.21 0.35 ¥0.16 20 0.33 ¥0.15 6. Results for 30-years of Shipment (2029–2058) TABLE III.40—PES SHIPMENTS FOR SELECT YEARS IN THE ABSENCE OF POTENTIAL NEW STANDARDS (EL 0), (UNITS) Spa type Year Standard 2029 2030 2035 2040 2045 2050 2055 2058 ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. 558,863 562,920 580,511 598,725 615,313 631,547 648,129 657,934 Exercise Combination 78,898 79,471 81,954 84,526 86,868 89,160 91,501 92,885 19,725 19,868 20,489 21,131 21,717 22,290 22,875 23,221 Inflatable 50,809 51,194 53,077 54,708 56,357 57,934 59,488 60,416 TABLE III.41—PES AFFECTED STOCK FOR SELECT YEARS IN THE ABSENCE OF POTENTIAL NEW STANDARDS (EL 0), (UNITS) Spa type Year lotter on DSK11XQN23PROD with PROPOSALS2 Standard 2027 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. 52 Saul H. Hymans, Gardner Ackley, and F. Thomas Juster. Consumer durable spending: Explanation and prediction. Brookings Papers on Economic Activity, 1970(2):173–206, 1970. (Last accessed August 28, 2021.) Available at https:// www.jstor.org/stable/2534239. 53 Philip Parker and Ramya Neelamegham. Price elasticity dynamics over the product life cycle: A VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 558,863 1,113,813 3,474,943 4,828,630 5,420,218 5,684,921 5,858,365 4,697,420 2,075,344 660,865 150,756 24,229 study of consumer durables. Marketing Letters, 8(2):205–216, April 1997. (Last accessed August 28, 2021.) Available at https://link.springer.com/ article/10.1023%2FA%3A1007962520455. 54 DOE relies on Hymens et al. (1970) for efficiency scaling factors because it provides the greatest detail out of all the available studies on price elasticity over time. PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 Exercise 78,898 157,244 490,580 681,689 765,207 802,577 827,063 663,165 292,990 93,299 21,283 3,421 Combination 19,725 39,311 122,645 170,422 191,302 200,644 206,766 165,791 73,247 23,325 5,321 855 Inflatable 50,809 101,988 184,055 190,031 195,793 201,380 206,848 90,521 0 0 0 0 55 For an example methodology of how DOE approaches its product price elasticity calculation, please see section 9.4 of chapter 9 of the Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Room Air Conditioners. DOE. 2022. Available at https://www.regulations.gov/ document/EERE-2014-BT-STD-0059-0030. E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules 69111 TABLE III.41—PES AFFECTED STOCK FOR SELECT YEARS IN THE ABSENCE OF POTENTIAL NEW STANDARDS (EL 0), (UNITS)—Continued Spa type Year Standard 2085 ................................................................................................................. 2090 ................................................................................................................. H. National Impact Analysis The NIA assesses the NES and the NPV from a national perspective of total consumer costs and savings that would be expected to result from new or amended standards at specific efficiency levels.56 (‘‘Consumer’’ in this context refers to consumers of the product being regulated.) DOE calculates the NES and NPV for the potential standard levels considered based on projections of annual product shipments, along with the annual energy consumption and total installed cost data from the energy use and LCC analyses. For the present analysis, DOE projected the energy Exercise 2,259 0 savings, operating cost savings, product costs, and NPV of consumer benefits over the lifetime of PESs sold from 2029 through 2058. DOE evaluates the effects of potential new standards by comparing a case without such standards with standardscase projections. The no-new-standards case characterizes energy use and consumer costs for each potential product class in the absence of new or amended energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. Combination 319 0 80 0 Inflatable 0 0 DOE compares the no-new-standards case with projections characterizing the market for each potential product class if DOE adopted new or amended standards at specific energy efficiency levels (i.e., the ELs or standards cases) for that class. For the standards cases, DOE considers how a given standard would likely affect the market shares of products with efficiencies greater than the standard. Table III.42 summarizes the inputs and methods DOE used for the NIA analysis for the NODA. Discussion of these inputs and methods follows the table. TABLE III.42—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS Inputs Method Shipments ................................................................................................. Modeled Compliance Date of Standard ................................................... Efficiency Trends ...................................................................................... Annual shipments from shipments model. 2029. No-new-standards case. Standards cases. Annual average values are a function of energy use at each EL. Annual average values are a function of cost at each EL. Annual weighted-average values as a function of the annual energy consumption per unit and energy prices. Annual values do not change with efficiency level. AEO2022 projections (to 2050), constant 2050 prices thereafter. A time-series conversion factor based on AEO2022. 3 percent and 7 percent. 2022. Annual Energy Consumption per Unit ...................................................... Total Installed Cost per Unit ..................................................................... Annual Energy Cost per Unit ................................................................... lotter on DSK11XQN23PROD with PROPOSALS2 Repair and Maintenance Cost per Unit .................................................... Energy Prices ........................................................................................... Energy Site-to-Primary and FFC Conversion .......................................... Discount Rate ........................................................................................... Present Year ............................................................................................. 1. Products Efficiency Trends A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of the standards cases. Section III.F.4 of this document describes how DOE developed an energy efficiency distribution for the no-new-standards case (which yields a shipment-weighted average efficiency) for each of the considered potential product classes for the year of anticipated compliance with an amended or new standard. For the standards cases, DOE used a ‘‘roll-up’’ scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2029). In this scenario, the market shares of products in the no-new-standards case that do not meet the standard under consideration would ‘‘roll up’’ to meet the new standard level, and the market share of products above the standard would remain unchanged. For this NODA, DOE’s modeling assumed that the distribution of product efficiencies will remain constant over time. DOE requests comment on its modeling assumption that PES efficiency will remaining constant over time in the absence of potential new standards. 2. National Energy Savings The NES analysis involves a comparison of national energy consumption of the considered products between each potential standards case (EL) and the case with no new or amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each product (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-new-standards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (i.e., the energy consumed by power plants to generate site electricity) using annual conversion factors derived from AEO2022. Cumulative energy 56 The NIA accounts for impacts in the 50 states and Washington D.C. VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 E:\FR\FM\17NOP2.SGM 17NOP2 69112 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules savings are the sum of the NES for each year over the timeframe of the analysis. The following equation shows that DOE calculated annual NES as the difference between two projections: a no-new-standards case (without new standards) and a standards case. Positive values of NES represent energy savings (that is, they show that national annual energy consumption (‘‘AEC’’) under a standards case is less than in the no-new-standards). NESy = AECBase¥AECSTD Where: NES = annual national energy savings (quads), AEC = annual national energy consumption each year in quadrillion Btus (quads) summed over vintages of the product stock, and y = year in the forecast. Cumulative energy savings are the sum of annual NES from products shipped between the years 2029 through 2058. DOE calculated the national annual site energy consumption by multiplying the number or stock of the product (by vintage) by its unit annual energy consumption (AEC; also, by vintage). National annual energy consumption is calculated using the following equation. AECy = S STOCKV × UECV conversion factor to account for losses associated with the generation, transmission, and distribution of electricity. The site-to-source conversion factor is a multiplicative factor used to convert site energy consumption into primary, or source, energy consumption, expressed in quadrillion Btus (quads). DOE used annual site-to-power-plant conversion factors based on the version of the national energy modeling system (‘‘NEMS’’) 57 that corresponds to AEO2022 58 The factors are marginal values, which represent the response of the national power system to incremental changes in consumption. For electricity, the conversion factors change over time in response to projected changes in generation sources (the types of power plants projected to provide electricity). There is not a specific end-use for PES in NEMS. As such, DOE applied the refrigeration enduse as a proxy, as the load profile of the equipment would be similar— equipment that when plugged-in and running does not respond to the cyclical dynamics of the electricity grid. lotter on DSK11XQN23PROD with PROPOSALS2 b. Full-Fuel Cycle Multipliers In 2011, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in Where: the NIA and emissions analyses AEC = annual national energy consumption included in future energy conservation each year in quadrillion Btus (quads), standards rulemakings in response to summed over vintages of the product the recommendations of a committee on stock, STOCKV, ‘‘Point-of-Use and Full-Fuel-Cycle STOCKV = stock of product (millions of units) Measurement Approaches to Energy of vintage V that survive in the year for Efficiency Standards’’ appointed by the which DOE calculated annual energy National Academy of Sciences. 76 FR consumption, 51281 (Aug. 18, 2011). After evaluating UECV = annual energy consumption of PESs the approaches discussed in the August in kilowatt-hours (kWh), V = year in which the product was purchased 18, 2011 notice, DOE published a as a new unit, and statement of amended policy in which y = year in the forecast. DOE explained its determination that EIA’s NEMS is the most appropriate tool The stock of a product depends on annual shipments and the lifetime of the for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 product. DOE projected product (Aug. 17, 2012). NEMS is a public shipments under the no-new-standards domain, multi-sector, partial case and standards cases. To avoid equilibrium model of the U.S. energy including savings attributable to sector 59 that EIA uses to prepare its shipments displaced (units not purchased) because of standards, DOE 57 For more information on NEMS, refer to the used the projected standards-case U.S. Department of Energy, Energy Information shipments and, in turn, the standardsAdministration documentation. A useful summary case stock, to calculate the national AEC is National Energy Modeling System: An Overview for the no-new-standards. 2000, DOE/EIA–0581(2000), March 2000. EIA a. Site-to-Power-Plant Energy Conversion Factors In determining annual NES, DOE initially considered the AEC at a residence (for electricity, the energy, expressed in kWh, consumed by a household). DOE then calculated primary (source) energy use from site energy consumption by applying a VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 approves use of the name NEMS to describe only an official version of the model with no modification to code or data. Energy Information Administration. Annual Energy Outlook 2022 with Projections to 2050. 2022. Washington, DC (Last accessed July 20, 2022.) Available at https:// www.eia.gov/outlooks/aeo/. 58 See www.eia.gov/outlooks/aeo. 59 For more information on NEMS, refer to The National Energy Modeling System: An Overview 2009, DOE/EIA–0581(2009), October 2009. Available at www.eia.gov/analysis/pdfpages/ PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 AEO. The FFC factors incorporate losses in production, and delivery in the case of natural gas, (including fugitive emissions) and additional energy used to produce and deliver the various fuels used by power plants. The approach used for deriving FFC measures of energy use and emissions can be found in other DOE analysis.60 3. Net Present Value Analysis The inputs for determining the NPV of the total costs and benefits experienced by consumers are (1) total annual installed cost, (2) total annual operating costs (energy costs and repair and maintenance costs), and (3) a discount factor to calculate the present value of costs and savings. DOE calculates net savings each year as the difference between the no-newstandards case and each standards case in terms of total savings in operating costs versus total increases in installed costs. DOE calculates operating cost savings over the lifetime of each product shipped during the projection period. The NPV is the value in the present of a time-series of costs and savings. The NPV is described by the equation: NPV = PVS¥PVC Where: PVS = present value of operating cost savings, and PVC = present value of increased total installed costs (including purchase price and installation costs). DOE determined the PVS and PVC according to the following expressions. PVS = S OCSy × DFy PVC = S TICy × DFy Where: OCS = total annual savings in operating costs each year summed over vintages of the product stock, STOCKV, DF = discount factor in each year, TIC = total annual increases in installed cost each year summed over vintages of the product stock, STOCKV and y = year in the forecast. DOE calculated the total annual consumer savings in operating costs by multiplying the number or stock of the product (by vintage) by its per-unit operating cost savings (also by vintage). DOE calculated the total annual increases in consumer product price by multiplying the number or shipments of the product (by vintage) by its per-unit 0581(2009)index.php (last accessed September 2022). 60 An example methodology of deriving FFC measures can be found in the Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Commercial Water Heating Equipment, 2022, appendix 10D. Available at https:// www.regulations.gov/document/EERE-2021-BTSTD-0027-0001. E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules increase in consumer cost (also by vintage). Total annual operating cost savings and total annual product price increases are calculated by the following equations. OCSy = S STOCKy × UOCSv TICy = S SHIPy × UTICy Where: OCSy = operating cost savings per unit in year y, STOCKV = stock of products of vintage V that survive in the year for which DOE calculated annual energy consumption, UOCSV = annual operating cost savings per unit of vintage V, V = year in which the product was purchased as a new unit, TICy = total increase in installed product cost in year y, SHIPy = shipments of the product in year y, and UTICy = annual per-unit increase in installed product cost in year y. The operating cost savings are energy cost savings, which are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average residential energy price changes in the Reference Case from AEO2022, which has an end year of 2050. To estimate price trends after 2050, DOE maintained electricity prices constant at 2050 levels. In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this NODA, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7percent real discount rate. DOE used these discount rates in accordance with guidance provided by the Office of Management and Budget (‘‘OMB’’) to Federal agencies on the development of regulatory analysis.61 The discount rates for the determination of NPV are in contrast to the discount rates used in the LCC analysis, which are designed to reflect a consumer’s perspective. The 7percent real value is an estimate of the average before-tax rate of return to private capital in the U.S. economy. The 3-percent real value represents the ‘‘social rate of time preference,’’ which is the rate at which society discounts future consumption flows to their present value. The operating cost savings are energy cost savings, which are calculated using the estimated energy savings in each year, and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average residential energy price changes in the Reference Case from AEO2022, which has an end year of 2050. 69113 4. Candidate Standards Levels In general, DOE typically evaluates potential new or amended standards for products and equipment by grouping individual efficiency levels for each class into candidate standard levels (‘‘CSLs’’). Use of CSLs allows DOE to identify and consider manufacturer cost interactions between the product classes and market cross elasticity from consumer purchasing decisions that may change when different standard levels are set, to the extent that there are such interactions. In the analysis conducted for this NODA, DOE analyzed the benefits and burdens of up to eight CSLs for PESs. DOE developed CSLs that combine efficiency levels for each analyzed product class. These CSLs were developed by directly mapping specific efficiency levels for each of the PES product classes analyzed by DOE. For this NODA, CSL 1 represents PES efficiency at APSP–14 2019. And the remaining CSLs represent the increase in efficiency determined by each efficiency level in the engineering analysis. DOE notes that for inflatable spas DOE did not examine efficiency levels greater than EL 3, and mapped EL 3 to the CSLs greater than 3. Table III.43 presents the CSLs and the corresponding efficiency levels that DOE has identified for potential new energy conservation standards for PESs. TABLE III.43—CANDIDATE STANDARD LEVELS FOR PESS Candidate standard level 1 2 3 4 5 6 7 8 Spa type Combination ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... Exercise EL EL EL EL EL EL EL EL 1 2 3 4 5 6 7 8 Inflatable EL EL EL EL EL EL EL EL 1 2 3 4 5 6 7 8 Standard EL EL EL EL EL EL EL EL 1 2 3 3 3 3 3 3 EL EL EL EL EL EL EL EL 1 2 3 4 5 6 7 8 5. Results for 30-years of Shipments (2029–2058) TABLE III.44—CUMULATIVE FULL-FUEL CYCLE NATIONAL ENERGY SAVINGS (QUADS) lotter on DSK11XQN23PROD with PROPOSALS2 Candidate standard level 1 2 3 4 5 Spa type Combination ..................... ..................... ..................... ..................... ..................... 0.11 0.14 0.15 0.16 0.16 61 United States Office of Management and Budget. Circular A–4: Regulatory Analysis. VerDate Sep<11>2014 Exercise 18:07 Nov 16, 2022 Jkt 259001 Inflatable 0.35 0.43 0.46 0.48 0.50 0.01 0.02 0.03 0.03 0.03 September 17, 2003. Section E. Available at https:// www.whitehouse.gov/wp-content/uploads/legacy_ PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 Standard drupal_files/omb/circulars/A4/a-4.pdf (last accessed Aug 8, 2022). E:\FR\FM\17NOP2.SGM 17NOP2 0.86 1.09 1.14 1.26 1.31 69114 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules TABLE III.44—CUMULATIVE FULL-FUEL CYCLE NATIONAL ENERGY SAVINGS (QUADS)—Continued Candidate standard level Spa type Combination Exercise 6 ..................... 7 ..................... 8 ..................... 0.19 0.20 0.20 Inflatable 0.57 0.60 0.61 Standard 0.03 0.03 0.03 1.48 1.56 1.59 TABLE III.45—CUMULATIVE CONSUMER NET PRESENT (BILLION, 2021$) Candidate standard level Spa type Combination Exercise Inflatable Standard 3% Discount Rate 1 2 3 4 5 6 7 8 ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... 0.078 0.074 0.047 ¥0.007 ¥0.068 ¥0.158 ¥0.277 ¥0.416 0.235 0.221 0.134 ¥0.033 ¥0.226 ¥0.507 ¥0.883 ¥1.318 0.007 0.015 0.006 0.006 0.006 0.006 0.006 0.006 0.598 0.592 0.407 0.089 ¥0.333 ¥0.941 ¥1.769 ¥2.739 0.003 0.007 0.001 0.001 0.001 0.001 0.001 0.001 0.285 0.275 0.177 0.009 ¥0.211 ¥0.532 ¥0.962 ¥1.465 7% Discount Rate 1 2 3 4 5 6 7 8 ..................... ..................... ..................... ..................... ..................... ..................... ..................... ..................... 0.037 0.034 0.020 ¥0.008 ¥0.040 ¥0.087 ¥0.149 ¥0.221 0.112 0.102 0.056 ¥0.031 ¥0.131 ¥0.279 ¥0.474 ¥0.700 However, your contact information will be publicly viewable if you include A. Submission of Comments it in the comment itself or in any DOE will accept comments, data, and documents attached to your comment. Any information that you do not want information regarding this NODA no later than the date provided in the DATES to be publicly viewable should not be included in your comment, nor in any section at the beginning of this NODA. document attached to your comment. Interested parties may submit Otherwise, persons viewing comments comments, data, and other information will see only first and last names, using any of the methods described in organization names, correspondence the ADDRESSES section at the beginning containing comments, and any of this document. documents submitted with the Submitting comments via comments. www.regulations.gov. The Do not submit to www.regulations.gov www.regulations.gov web page will information for which disclosure is require you to provide your name and restricted by statute, such as trade contact information. Your contact secrets and commercial or financial information will be viewable to DOE information (hereinafter referred to as Building Technologies staff only. Your Confidential Business Information contact information will not be publicly (‘‘CBI’’)). Comments submitted through viewable except for your first and last www.regulations.gov cannot be claimed names, organization name (if any), and as CBI. Comments received through the submitter representative name (if any). website will waive any CBI claims for If your comment is not processed the information submitted. For properly because of technical information on submitting CBI, see the difficulties, DOE will use this Confidential Business Information section. information to contact you. If DOE cannot read your comment due to DOE processes submissions made technical difficulties and cannot contact through www.regulations.gov before you for clarification, DOE may not be posting. Normally, comments will be posted within a few days of being able to consider your comment. lotter on DSK11XQN23PROD with PROPOSALS2 IV. Publication Participation VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 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 www.regulations.gov provides after you have successfully uploaded your comment. Submitting comments via email, hand delivery/courier, or postal mail. Comments and documents submitted via email, hand delivery/courier, or postal mail also will be posted to www.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 in 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. If you submit via postal mail or hand delivery/ courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No E:\FR\FM\17NOP2.SGM 17NOP2 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 telefacsimiles (‘‘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, that are written in English, and that 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. Pursuant 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 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. DOE will make its own determination about the confidential status of the information and treat it according to its determination. 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 information deemed to be exempt from public disclosure). B. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this NODA, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: Issue 1: DOE requests comment on the previously description of the target technology and the scope of this product, including whether any modifications or additions are necessary to characterize this product. Issue 2: DOE requests comment on whether the distinction between categories of PESs, as described in section III.A.2 of this NODA, is significant enough to warrant the establishment of different product classes for each type. Issue 3: DOE requests comment on the above description of the PES manufacturers and the PES industry structure and whether any other details VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 are necessary for characterizing the industry or for determining whether energy conservation standards for PESs might be justified. Issue 4: DOE requests information on any voluntary or mandatory test procedure and energy conservation standards for PESs that are not mentioned in section III.A.4 of this NODA. Issue 5: DOE seeks comment generally on the descriptions of relevant energysaving technology options as described in section III.A.5 of this document, including whether any options require revised or additional details to characterize each option’s effects on a PES’s energy consumption. Issue 6: DOE seeks comment regarding use of additional or improved insulation as a technology option for PESs, and in particular what would limit adding further insulation to a PES. Issue 7: DOE seeks comment regarding use of improved covers as a technology option for PESs, and in particular what would limit further energy performance increases of PES covers. Issue 8: DOE seeks comment regarding use of improved sealing as a technology option for PESs, regarding whether air leakage is significant at PES locations other than the cover, and regarding what would limit further sealing improvements energy performance increases of PES covers. Issue 9: DOE seeks comment on the description of radiant barriers and data on the relative effects of radiant barriers when paired with different amounts of insulation and different thicknesses of adjacent air gaps. Issue 10: DOE requests comment regarding whether insulated ground covers warrant inclusion in the set of technology options for non-inflatable PESs. Issue 11: DOE seeks comment and data on the degree to which two-speed pump inefficiencies manifest as waste heat and to which that waste heat is absorbed by the portable electric spa’s water. Issue 12: DOE requests comment regarding whether heat pumps would be likely to reduce energy consumption in PESs and, if so, quantified estimates of the effects of heat pump integration on both energy consumption and manufacturer production cost. Issue 13: DOE requests comment regarding the availability of heat pumps compatible with PESs. Issue 14: DOE seeks comment on its selection of baseline units, including whether any other units on the market would better represent the most PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 69115 consumptive spas available for purchase. Issue 15: DOE requests comment on the range of filtration system power demands in PESs as described in Table III.1. DOE also requests comment on any correlation between power demand and whether a spa uses a high horsepower two-speed pump or a lower horsepower dedicated circulation pump. Issue 16: DOE requests comment on its assumption of a standard shell shape as described in Table III.2, especially whether it is representative and whether DOE should consider certain shapes that result in maximum or minimum amounts of insulation. Issue 17: DOE requests data and comment on the effectiveness of radiant barriers in reducing the normalized average standby power of PES and on what factors make radiant barriers more or less effective. Issue 18: DOE requests data and comment on the extent to which spas lose heat through air convection out of unsealed regions of the spa and on the factors that affect heat losses due to sealing. Issue 19: DOE requests comment on the best way to quantify varying degrees of cover seal, including perimeter seal against the spa flange and hinge seal through the center of the cover. Issue 20: DOE requests comment on the method of analyzing thermal bridges as a single section of low R-value on the spa. Additionally, DOE requests information about techniques and models which are used in industry to predict spa performance. Issue 21: DOE requests comment and data on the discrepancy between heat loss through the wall where the components are housed and through other walls. Issue 22: DOE requests comment on any strategies for considering the effects of hot water traveling through plumbing on a spa’s heat loss. Issue 23: DOE requests comment describing its appropriation of the scaling relationship defined in APSP–14 2019 and whether there are any other traits with which DOE might vary energy consumption. Issue 24: DOE requests comment on whether there are other factors DOE should consider in converting normalized average standby power values to reflect the proposed test procedure. Issue 25: DOE requests comment and data on typical markups from MPC to MSP and from MSP to final sale price. Issue 26: DOE requests comment and data characterizing the relationship between MPC and the size of a PES and whether there are better methods for E:\FR\FM\17NOP2.SGM 17NOP2 69116 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Proposed Rules lotter on DSK11XQN23PROD with PROPOSALS2 approximating the effects of size changes on MPC than the one described previously. Issue 27: DOE requests comment and data characterizing to what degree sales margins vary with spa size. Issue 28: DOE requests comment on the efficiency levels described in tables Table III.3 and Table III.4, including whether any do not align with expected effects design options associated with them, as described below in Table III.7 and Table III.8. Issue 29: DOE requests comment on the expected effects of DOE’s proposed test procedure, as described in Table III.5 and Table III.6, including on whether its effects on normalized average standby power would be greater than or less than DOE’s estimates. Issue 30: DOE requests comment and data regarding the design options and associated estimated costs described in tables Table III.7 and Table III.8 of this NODA. Issue 31: DOE requests information on the existence of any distribution channels other than the distribution channels listed in Table III.11 of this document. Further, DOE requests comment on whether the same distribution channels are applicable to installations of new and replacement PES. Issue 32: DOE requests information on the fraction of shipments that are distributed through the channels shown in Table III.11 of this document. Issue 33: DOE seeks comment on its energy use model. Specifically, DOE seeks comment on the energy use model for combination spas, where the Sysnon-heat variable is normalized with volume of water portioned to the standard spa pool. Issue 34: DOE requests comment on its approach to estimating annual operating hours. Additionally, DOE requests comments on its modeling assumption that PES would be operated during the warmest months of the year. Issue 35: DOE requests comment on its approach to determining regional ambient temperatures. Issue 36: DOE requests data or comment on the typical operating VerDate Sep<11>2014 18:07 Nov 16, 2022 Jkt 259001 temperature for exercise spas not capable of maintaining a minimum temperature of 100 °F. And DOE requests data or comment on the distribution of typical operating temperature for exercise spas not capable of maintaining a minimum temperature of 100 °F. Issue 37: DOE requests data or comment on the distribution of typical operating temperature for spas capable of maintaining a minimum temperature of 100 °F. And DOE requests data or comment on the distribution of typical operating temperature for exercise spas capable of maintaining a minimum temperature of 100 °F. Issue 38: DOE requests comment on its proposed methodology to project future equipment prices. Issue 39: DOE request information or data related to the past trends in production costs of PESs. Additionally, DOE request data or information related to the cost of PES production over time. Issue 40: DOE requests comment on its decision to exclude installation costs from any future efficiency standard calculation. Issue 41: DOE requests data and details on the installation costs of PESs, and whether those costs vary by product type or any other factor affecting their efficiency. Issue 42: DOE requests comment on its use of AEO to project electricity prices into the future. Issue 43: DOE requests feedback and specific data on whether maintenance costs differ in comparison to the baseline maintenance costs for any of the specific efficiency improving technology options applicable to PESs. Issue 44: DOE requests comment on the typical repairs to PESs and how they may differ in the case of a potential new energy conservation standard. Issue 45: DOE requests comment on its lifetime analysis. Issue 46: DOE requests comment on its reasoning and assumption to not apply a rebound effect to PES stand-by power energy use. Issue 47: DOE requests comment on its stock ratios for hard-sided spas. Additionally, DOE seeks input on the PO 00000 Frm 00036 Fmt 4701 Sfmt 9990 market shares of standard, exercise, and combination spas. Issue 48: DOE seeks comment on its assumed 2020 stock estimates for all spa types. Issue 49: DOE requests comment on its proposed use of future residential construction to project future shipments of PESs. Issue 50: DOE requests comment on its modeling assumption that PES efficiency will remaining constant over time in the absence of potential new standards. Issue 51: Additionally, DOE welcomes comments on other issues relevant to the conduct of this rulemaking that may not specifically be identified in this document. V. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this notification of data availability and request for comment. Signing Authority This document of the Department of Energy was signed on October 31, 2022, by Francisco Alejandro Moreno, Acting Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register. Signed in Washington, DC, on November 2, 2022. Treena V. Garrett, Federal Register Liaison Officer, U.S. Department of Energy. [FR Doc. 2022–24290 Filed 11–16–22; 8:45 am] BILLING CODE 6450–01–P E:\FR\FM\17NOP2.SGM 17NOP2

Agencies

[Federal Register Volume 87, Number 221 (Thursday, November 17, 2022)]
[Proposed Rules]
[Pages 69082-69116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24290]



[[Page 69081]]

Vol. 87

Thursday,

No. 221

November 17, 2022

Part II





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for Portable 
Electric Spas; Proposed Rule

Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / 
Proposed Rules

[[Page 69082]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2022-BT-STD-0025]
RIN 1904-AF36


Energy Conservation Program: Energy Conservation Standards for 
Portable Electric Spas

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

ACTION: Notification of data availability and request for comment.

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SUMMARY: In this notice of data availability (``NODA''), the U.S. 
Department of Energy (``DOE'') is publishing data and certain 
preliminary analytical results related to DOE's evaluation of potential 
energy conservation standards for portable electric spas (``PESs''). 
DOE requests comments, data, and information regarding the data and 
analysis.

DATES: Written comments and information will be accepted on or before, 
January 17, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov, under docket 
number EERE-2022-BT-STD-0025. Follow the instructions for submitting 
comments. Alternatively, interested persons may submit comments, 
identified by docket number EERE-2022-BT-STD-0025, by any of the 
following methods:
    Email: [email protected]. Include the docket 
number EERE-2022-BT-STD-0025 in the subject line of the message.
    Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. If possible, please submit all items on a compact disc 
(``CD''), in which case it is not necessary to include printed copies.
    Hand Delivery/Courier: Appliance and Equipment Standards Program, 
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant 
Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445. 
If possible, please submit all items on a CD, in which case it is not 
necessary to include printed copies.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section IV of this document.
    To inform interested parties and to facilitate this rulemaking 
process, DOE has prepared preliminary analytical data, which is 
available on the rulemaking docket at: www.regulations.gov/docket/EERE-2022-BT-STD-0025.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, public meeting transcripts, 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, some documents listed in the index, 
such as those containing information that is exempt from public 
disclosure, may not be publicly available.
    The docket web page can be found at www.regulations.gov/docket/EERE-2022-BT-STD-0025. The docket web page contains instructions on how 
to access all documents, including public comments in the docket. See 
section IV.A of this document for information on how to submit comments 
through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-2J, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 586-9870. Email [email protected].
    Ms. Kristin Koernig, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-3593. Email: 
[email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority
    B. Rulemaking Process
    C. Deviation From Appendix A
II. Background
    A. Current Process
III. Summary of the Analyses Performed by DOE
    A. Market and Technology Assessment
    1. Product Description
    2. Potential Product Classes
    a. Inflatable Spas
    b. Exercise Spas
    c. Standard Spas
    d. Combination Spas
    3. Manufacturers and Industry Structure
    4. Other Regulatory Programs
    5. Technology Options for Improving Efficiency
    a. Insulation
    b. Cover
    c. Sealing
    d. Radiant Barrier
    e. Insulated Ground Cover
    f. Dedicated Circulation Pump
    g. Heat Pump
    B. Screening Analysis
    C. Engineering Analysis
    1. Efficiency Analysis
    2. Cost Analysis
    3. Engineering Results
    D. Markups Analysis
    1. Distribution Channels
    2. Markups
    3. Sales Taxes
    4. Summary of Markups
    E. Energy Use Analysis
    1. Consumer Sample
    2. Typical Annual Operating Hours (npy)
    3. Ambient Temperature (Tamb)
    4. Operating Water Temperature (Top)
    5. Annual Energy Use Results
    F. Life-Cycle Cost and Payback Period Analyses
    1. Inputs to the Life-Cycle Cost Model
    a. Inputs to Total Installed Cost
    b. Inputs to Operating Costs
    2. Product Lifetime
    a. Hard-Sided Spas
    b. Inflatable Spas
    3. Rebound Effect
    4. Energy Efficiency Distribution in the No-New-Standards Case
    5. Discount Rates
    6. Payback Period Analysis
    7. Consumer Results
    G. Shipments Analysis
    1. Approach To Shipments and Stock Models
    2. Initial Stock Estimates
    a. Hard-Sided Spas Stock
    b. Inflatable Spas Stock
    3. Product Saturations
    4. Determining Annual Spa Shipments
    a. Initial Shipments
    b. New Spa Shipments
    c. Spa Replacements
    d. Demolitions
    e. Product Lifetimes
    f. Future Portable Electric Spa Shipments
    g. Calculating Shipments and Stock
    5. Impacts of Increased Product Costs on Shipments
    6. Results for 30-Years of Shipment (2029-2058)
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy Savings
    a. Site-to-Power-Plant Energy Conversion Factors
    b. Full-Fuel Cycle Multipliers
    3. Net Present Value Analysis
    4. Candidate Standard Levels
    5. Results for 30-Years of Shipments (2029-2058)
IV. Public Participation
    A. Submission of Comments
    B. Issues on Which DOE Seeks Comment

[[Page 69083]]

V. Approval of the Office of the Secretary

I. Introduction

A. Authority

    The Energy Policy and Conservation Act, as amended (``EPCA''),\1\ 
authorizes DOE to regulate the energy efficiency of a number of 
consumer products and certain industrial equipment. (42 U.S.C. 6291-
6317) Title III, Part B \2\ of EPCA established the Energy Conservation 
Program for Consumer Products Other Than Automobiles, which, in 
addition to identifying particular consumer products and commercial 
equipment as covered under the statute, permits the Secretary of Energy 
to classify additional types of consumer products as covered products. 
(42 U.S.C. 6292(a)(20)) In a notice of final determination of coverage 
(``NOFD'') published in the Federal Register on September 2, 2022 
(``September 2022 NOFD''), DOE classified PESs as a covered product 
pursuant to 42 U.S.C. 6292(b)(1) after determining that classifying 
PESs as a covered product is necessary or appropriate to carry out the 
purposes of EPCA and that average annual household energy use for PESs 
is likely to exceed 100 kilowatt-hours per year. 87 FR 54123.
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
---------------------------------------------------------------------------

    The relevant purposes of EPCA include:
    (1) To conserve energy supplies through energy conservation 
programs, and, where necessary, the regulation of certain energy uses; 
and
    (2) To provide for improved energy efficiency of motor vehicles, 
major appliances, and certain other consumer products. (42 U.S.C. 
6201(4) and (5))
    First, DOE determined that the coverage of PESs is both necessary 
and appropriate to carry out the purposes of EPCA on the basis of 
market data, the existence of technology options for improving energy 
efficiency of PESs, and supporting argument of commenters in response 
to the notice of proposed determination of coverage. 87 FR 54123, 
54125-54126.
    DOE then determined that estimated household energy use was likely 
to exceed 100 kWh/year based on market data and certification data 
reported to the California Energy Commission's (``CEC'') Modernized 
Appliance Efficiency Database System (``MAEDbS'').\3\ In the September 
2022 NOFD, DOE had estimated average energy consumption of 1,699 kWh 
per year per household, which matched estimates submitted by commenters 
in response to the notice of proposed determination of coverage. Id. at 
87 FR 54126-54127.
---------------------------------------------------------------------------

    \3\ CEC Modernized Appliance Efficiency Database System. 
Available at cacertappliances.energy.ca.gov. (last accessed October 
26, 2022).
---------------------------------------------------------------------------

    Having determined that classifying PESs as a covered product was 
necessary or appropriate to carry out the purposes of EPCA and that 
average annual household energy use for PESs was likely to exceed 100 
kilowatt-hours per year, DOE classified PESs as a covered product. Id. 
at 87 FR 54127.
    Additionally, in the September 2022 NOFD, DOE established a 
definition of the term ``portable electric spa,'' which was ``a 
factory-built electric spa or hot tub, supplied with equipment for 
heating and circulating water at the time of sale or sold separately 
for subsequent attachment.'' Id. at 87 FR 54125; see also 10 CFR 430.2.
    As PESs are now a covered product, EPCA allows DOE to prescribe an 
energy conservation standard for any type (or class) of covered 
products of a type specified in 42 U.S.C. 6292(a)(20) if the 
requirements of 42 U.S.C. 6295(o) and (p) are met and the Secretary 
determines that--
    (A) the average per household energy use within the United States 
by products of such type (or class) exceeded 150 kilowatt-hours (or its 
Btu equivalent) for any 12-month period ending before such 
determination;
    (B) the aggregate household energy use within the United States by 
products of such type (or class) exceeded 4,200,000,000 kilowatt-hours 
(or its Btu equivalent) for any such 12-month period;
    (C) substantial improvement in the energy efficiency of products of 
such type (or class) is technologically feasible; and
    (D) the application of a labeling rule under 42 U.S.C. 6294 to such 
type (or class) is not likely to be sufficient to induce manufacturers 
to produce, and consumers and other persons to purchase, covered 
products of such type (or class) which achieve the maximum energy 
efficiency which is technologically feasible and economically 
justified. (42 U.S.C. 6295(l)(1))
    EPCA further provides that, not later than 6 years after the 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notification of determination that standards for 
the product do not need to be amended, or a notice of proposed 
rulemaking (``NOPR'') including new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6295(m)(1)) Not later than three years after issuance of a final 
determination not to amend standards, DOE must publish either a notice 
of determination that standards for the product do not need to be 
amended, or a NOPR including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
    Under EPCA, any new or amended energy conservation standard must be 
designed to achieve the maximum improvement in energy efficiency that 
DOE determines is technologically feasible and economically justified. 
(42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must 
result in a significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    DOE is publishing this NODA to collect data and information to 
inform its decision to establish energy conservation standards for PESs 
consistent with its obligations under EPCA.

B. Rulemaking Process

    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including PESs. As noted, EPCA 
requires that any new or amended energy conservation standard 
prescribed by the Secretary of Energy (``Secretary'') be designed to 
achieve the maximum improvement in energy efficiency (or water 
efficiency for certain products specified by EPCA) 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))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\4\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products or equipment with relatively constant demand. In evaluating 
the significance of energy savings, DOE considers differences in 
primary energy and full-fuel cycle

[[Page 69084]]

(``FFC'') effects for different covered products and equipment when 
determining whether energy savings are significant. Primary energy and 
FFC effects include the energy consumed in electricity production 
(depending on load shape), in distribution and transmission, and in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and thus present a more complete picture 
of the impacts of energy conservation standards. Accordingly, DOE 
evaluates the significance of energy savings on a case-by-case basis, 
taking into account the significance of cumulative FFC national energy 
savings, the cumulative FFC emissions reductions, and the need to 
confront the global climate crisis, among other factors.
---------------------------------------------------------------------------

    \4\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    To determine whether a standard is economically justified, EPCA 
requires that DOE determine whether the benefits of the standard exceed 
its burdens by considering, to the greatest extent practicable, the 
following seven factors:
    1. The economic impact of the standard on the 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 products 
likely to result from the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    DOE fulfills these and other applicable requirements by conducting 
a series of analyses throughout the rulemaking process. Table I.1 shows 
the individual analyses that are performed to satisfy each of the 
requirements within EPCA.
---------------------------------------------------------------------------

    \5\ On March 16, 2022, the Fifth Circuit Court of Appeals (No. 
22-30087) granted the federal government's emergency motion for stay 
pending appeal of the February 11, 2022, preliminary injunction 
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a 
result of the Fifth Circuit's order, the preliminary injunction is 
no longer in effect, pending resolution of the federal government's 
appeal of that injunction or a further court order. Among other 
things, the preliminary injunction enjoined the defendants in that 
case from ``adopting, employing, treating as binding, or relying 
upon'' the interim estimates of the social cost of greenhouse 
gases--which were issued by the Interagency Working Group on the 
Social Cost of Greenhouse Gases on February 26, 2021--to monetize 
the benefits of reducing greenhouse gas emissions. In the absence of 
further intervening court orders, DOE will revert to its approach 
prior to the injunction and present monetized benefits where 
appropriate and permissible by law.

       Table I.1--EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
            EPCA requirement                Corresponding DOE analysis
------------------------------------------------------------------------
Significant Energy Savings.............   Shipments Analysis.
                                          National Impact
                                          Analysis.
                                          Energy Analysis.
Technological Feasibility..............   Market and Technology
                                          Assessment.
                                          Screening Analysis.
                                          Engineering Analysis.
Economic Justification:
    Economic impact on manufacturers      Manufacturer Impact
     and consumers.                       Analysis.
                                          Life-Cycle Cost and
                                          Payback Period Analysis.
                                          Life-Cycle Cost
                                          Subgroup Analysis.
                                          Shipments Analysis.
    Lifetime operating cost savings       Markups for Product
     compared to increased cost for the   Price Analysis.
     product.                             Energy Analysis.
                                          Life-Cycle Cost and
                                          Payback Period Analysis.
    Total projected energy savings.....   Shipments Analysis.
                                          National Impact
                                          Analysis.
    Impact on utility or performance...   Screening Analysis.
                                          Engineering Analysis.
    Impact of any lessening of            Manufacturer Impact
     competition.                         Analysis.
    Need for national energy and water    Shipments Analysis.
     conservation.                        National Impact
                                          Analysis.
    Other factors the Secretary           Employment Impact
     considers relevant.                  Analysis.
                                          Utility Impact
                                          Analysis.
                                          Emissions Analysis.
                                          Monetization of
                                          Emission Reductions
                                          Benefits.\5\
                                          Regulatory Impact
                                          Analysis.
------------------------------------------------------------------------

    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. (42 U.S.C. 6295(o)(2)(B)(iii))
    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 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

[[Page 69085]]

generally available in the United States. (42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of product that has the same function or intended use, if DOE 
determines that products within such group: (A) consume a different 
kind of energy from that consumed by other covered products within such 
type (or class); or (B) have a capacity or other performance-related 
feature which other products within such type (or class) do not have 
and such feature justifies a higher or lower standard. (42 U.S.C. 
6295(q)(1)) In determining whether a performance-related feature 
justifies a different standard for a group of products, DOE must 
consider such factors as the utility to the consumer of the 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))
    Finally, pursuant to the amendments contained in the Energy 
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, 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))
    Before proposing a standard, DOE typically seeks public input on 
the analytical framework, models, and tools that DOE intends to use to 
evaluate standards for the product at issue and the results of 
preliminary analyses DOE performed for the product. See section IV.B of 
this document for a list of analysis and data on which DOE seeks 
comment.
    DOE is examining whether to establish energy conservation standards 
for PESs pursuant to its obligations under EPCA. This notification 
announces the availability of preliminary analytical results and data.

C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``appendix A''), DOE notes that it is deviating from the 
provision in appendix A regarding the pre-NOPR stage for an energy 
conservation standard rulemaking. Section 6(d)(2) of appendix A 
specifies that the length of the public comment period for a pre-NOPR 
will vary depending upon the circumstances of the particular 
rulemaking, but will not be less than 75 calendar days. For this NODA, 
DOE is providing a 60-day comment period, which DOE deems appropriate 
given the publication of three antecedent notices relating to PESs, two 
of which, themselves, offered opportunity for comment related to PESs 
and all of which would be understood by interested parties as a signal 
that DOE would be evaluating potential energy conservation standards. 
Those three antecedent notices were the proposed determination of 
portable electric spas as a covered consumer product (87 FR 8745 (Feb. 
16, 2022)), the final determination of portable electric spas as a 
covered consumer product (87 FR 54123 (Sept. 2, 2022)), and the 
proposed rulemaking for the test procedure for portable electric spas 
(87 FR 63356 (Oct. 18, 2022)), respectively. Further, a 60-day comment 
period will allow DOE to review comments received in response to this 
NODA and use them to inform the analysis of the product considered in 
evaluating potential energy conservation standards.

II. Background

A. Current Process

    DOE has not previously conducted an energy conservation standards 
rulemaking for PESs. As described in section I.A of this NODA, DOE 
previously determined that PESs met the criteria for classification as 
a covered product pursuant to EPCA and classified PESs as a covered 
product. 87 FR 54123.
    Following this determination of coverage, DOE published a NOPR 
proposing a test procedure for PESs in the Federal Register on October 
18, 2022. 87 FR 63356. In that NOPR, DOE proposed to incorporate by 
reference an industry test method published by the Pool and Hot Tub 
Alliance (``PHTA'') \6\ in partnership with the International Code 
Council (``ICC'') and approved by the American National Standards 
Institute (``ANSI''), ANSI/APSP/ICC-14 2019, ``American National 
Standard for Portable Electric Spa Energy Efficiency'' (``APSP-14 
2019'') with certain exceptions and additions. 87 FR 63356, 63361-
63369. The proposed test method produces a measure of the energy 
consumption of PESs (i.e., the normalized average standby power) that 
represents the average power consumed by the spa, normalized to a 
standard temperature difference between the ambient air and the water 
in the spa, while the cover is on and the product is operating in its 
default operation mode. Id. at 87 FR 63361.
---------------------------------------------------------------------------

    \6\ The PHTA is a result of a 2019 merger between the 
Association of Pool and Spa Professionals (``APSP'') and the 
National Swimming Pool Foundation (``NSPF''). The reference to APSP 
has been retained in the ANSI designation of ANSI/APSP/ICC-14 2019.
---------------------------------------------------------------------------

    Comments received to date as part of the coverage determination 
rulemaking have helped DOE identify and resolve issues related to the 
NODA.

III. Summary of the Analyses Performed by DOE

    For the product covered in this NODA, DOE conducted in-depth 
technical analyses in the following areas: (1) engineering; (2) markups 
to determine product price; (3) energy use; (4) life cycle cost 
(``LCC'') and payback period (``PBP''); and (5) national impacts. The 
preliminary analytical results that present the methodology and results 
of each of these analyses that are not included in the body of this 
notice are available at: www.regulations.gov/docket/EERE-2022-BT-STD-0025. Specifically, DOE is making available the following data and 
analysis:
    (1) Approved and Archived Portable Electric Spas exported from the 
CEC's Meads. Data as of August 8, 2022.
    (2) DOE's testing results for a simple inflatable portable electric 
spa. Testing followed methods specified in APSP-14 2019 and attempted 
to isolate the effects of various test conditions and design options.
    (3) Reference table for DOE's proposed efficiency levels for non-
inflatable and inflatable portable electric spas, including particular 
changes in specifications and the estimated effects on energy 
consumption and costs thereof.
    DOE also conducted, and has included in this NODA, several other 
analyses that either support the major analyses or are preliminary 
analyses that will be expanded if DOE determines that a NOPR is 
warranted to propose new energy conservation standards. These analyses 
include: (1) the market and technology assessment; (2) the screening 
analysis, which contributes to the engineering analysis; and (3) the 
shipments analysis, which contributes to the LCC and PBP analysis and 
the national impact analysis (``NIA''). In addition to these analyses, 
DOE has begun preliminary work on the

[[Page 69086]]

manufacturer impact analysis and has identified the methods to be used 
for the consumer subgroup analysis, the emissions analysis, the 
employment impact analysis, the regulatory impact analysis, and the 
utility impact analysis. DOE will expand on these analyses in the NOPR 
should one be issued.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including general characteristics of the products, the 
industry structure, manufacturers, market characteristics, and 
technologies used in the products. This activity includes both 
quantitative and qualitative assessments, based primarily on publicly 
available information. The subjects addressed in the market and 
technology assessment include: (1) a determination of the scope of the 
rulemaking and product classes; (2) manufacturers and industry 
structure; (3) existing efficiency programs; (4) shipments information; 
(5) market and industry trends; and (6) technologies or design options 
that could improve the energy efficiency of the product.
1. Product Description
    DOE referred to PES product literature and to its communications 
with spa manufacturers to inform its understanding of the technology 
and the different types of products within the industry. Relevant 
product literature includes APSP-14 2019, the current industry test 
procedure and energy conservation standards, materials related to state 
rulemakings, academic papers, and marketing materials.\7\ In 
particular, DOE also made significant use of the following sources: the 
final staff report for CEC's 2018 Appliance Efficiency Rulemaking for 
Spas, ``Analysis of Efficiency Standards and Marking for Spas;'' \8\ 
the Codes and Standards Enhancement (``CASE'') Initiative submission 
from California investor-owned utilities in support of CEC's 2012 
rulemaking for spas, ``Analysis of Standards Proposal for Portable 
Electric Spas;'' \9\ a 2018 graduate thesis from California State 
University, Sacramento, ``Improving Energy Efficiency of Portable 
Electric Spas by Improving Its Thermal Conductivity Properties;'' \10\ 
and a 2012 graduate thesis from California Polytechnic State 
University, San Luis Obispo, ``Measurement and Analysis of the Standby 
Power of Twenty-Seven Portable Electric Spas.'' \11\ PES manufacturers 
were contacted via the PHTA.
---------------------------------------------------------------------------

    \7\ APSP-14 2019 is available at: webstore.ansi.org/standards/apsp/ansiapspicc142019.
    \8\ California Energy Commission. ``Final Staff Report--Analysis 
of Efficiency Standards and Marking for Spas.'' February 2, 2018.
    \9\ Codes and Standards Enhancement (CASE) Initiative. 
``Analysis of Standards Proposal for Portable Electric Spas.'' May 
15, 2014.
    \10\ Ramos, Nestor. ``Improving Energy Efficiency of Portable 
Electric Spas by Improving Its Thermal Conductivity Properties.'' 
Spring, 2018.
    \11\ Hamill, Andrew. ``Measurement and Analysis of the Standby 
Power of Twenty-Seven Portable Electric Spas.'' September, 2012.
---------------------------------------------------------------------------

    APSP-14 2019 defines a spa as ``a product intended for the 
immersion of persons in temperature-controlled water circulated in a 
closed system'' and a portable electric spa as ``a factory-built 
electric spa or hot tub, supplied with equipment for heating and 
circulating water at the time of sale or sold separately for subsequent 
attachment.'' DOE adopted this definition of ``portable electric spa'' 
without modification in the September 2022 NOFD. 87 FR 54123, 54125.
    Integral heating and circulation equipment are features that 
distinguish PESs from similar products in inflatable or above-ground 
pools and therapy bathtubs or permanent residential spas, respectively. 
Beyond these characteristic features, PESs often also include chemical 
systems for water sanitation as well as features such as additional 
lighting, audio systems, and internet connectivity for more precise and 
accessible spa monitoring.
    DOE requests comment on the previous description of the target 
technology and the scope of this product, including whether any 
modifications or additions are necessary to characterize this product.
2. Potential Product Classes
    DOE must specify a different standard level for a type or class of 
product that has the same function or intended use if DOE determines 
that products within such group: consume a different kind of energy 
from that consumed by other covered products within such type (or 
class); or have a capacity or other performance-related feature which 
other products within such type (or class) do not have and such feature 
justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In 
determining whether a performance-related feature justifies a different 
standard for a group of products, DOE must consider such factors as the 
utility to the consumer of the 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))
    DOE observed several distinguishable categories of products in the 
PES market that provide consumers with unique utility that could 
necessitate a different standard level for energy consumption.
a. Inflatable Spas
    Inflatable spas are characterized by collapsible and storable 
bodies. They are usually made of a flexible polyvinyl chloride 
(``PVC'') plastic tub, which is filled with air during use and which 
connects to a control unit external to the tub but still integral to 
the product as distributed in commerce. Inflatable spas are often used 
seasonally and, during seasons when inflatable spas are not in use, 
they are often deflated and put in storage. Correspondence with 
inflatable spa manufacturers indicated that inflatable spas provide 
unique utility as a result of their low price relative to other 
portable electric spas and their ability to be collapsed and moved more 
easily than other spas. Inflatable spas often have maximum water 
temperatures settings greater than 100 [deg]F, and the PVC construction 
that allows them to be less expensive and collapsible also decrease 
their ability to retain heat. This characteristic generally makes the 
power demand of inflatable spas higher than that of other portable 
electric spas. As a result, DOE tentatively concludes that inflatable 
spas are not able to be subject to the same energy consumption limits 
as other spas.
b. Exercise Spas
    Exercise spas are characterized by their large size and ability to 
generate a water flow strong enough to allow for physical activity such 
as swimming in place. Exercise spas are usually composed of a 
rectangular rigid synthetic plastic cabinet topped with a rigid vacuum-
formed acrylic shell. The cavity between the cabinet and acrylic shell 
houses components such as pumps and heaters and also allows for dense 
insulating materials to help the spa retain heat. Exercise spas provide 
unique utility in their capacity to facilitate physical activity inside 
the spa for a person as large as the 99th Percentile Man as specified 
in ANSI/APSP/ICC-16.\12\ Exercise spas may have maximum water 
temperatures settings above or below 100 [deg]F. According to 
manufacturers, consumers tend to set the water temperature of exercise 
spas to less than 100 [deg]F when using exercise

[[Page 69087]]

spas for physical activity. And exercise spas' capacity to house dense 
insulation makes them able to retain heat and reduce energy consumption 
more than inflatable spas.
---------------------------------------------------------------------------

    \12\ ANSI/APSP/ICC-16 is available at https://webstore.ansi.org/standards/apsp/ansiapspicc162017PA2021.
---------------------------------------------------------------------------

c. Standard Spas
    Standard spas are neither collapsible nor designed for use in 
recreational physical activities. Like exercise spas, they are 
typically composed of rigid plastic cabinets affixed to an acrylic 
shell. However, they may also be constructed of other rigid materials. 
DOE is aware of some standard spas whose exteriors are made entirely of 
rotationally molded plastic. Standard spas are not designed to generate 
a water flow strong enough to allow for swimming in place and are 
usually not large enough to allow for a person to swim in place. 
Standard spas offer unique utility in comparison to inflatable spas in 
that they typically have more and higher performance jet pumps, as well 
as the capacity for more additional features such as lights, water 
features, or stereo systems. Standard spas usually have maximum water 
temperature settings of above 100 [deg]F. Like exercise spas, the rigid 
and relatively large space between the perimeter of the spa and the spa 
shell allows for dense insulation, which makes standard spas able to 
reduce energy consumption more than inflatable spas.
d. Combination Spas
    Combination spas are single contiguous spas consisting of distinct 
exercise spa and standard spa sections, each of which has an 
independent control for the setting of water temperature. Combination 
spas provide unique utility in their capacity to provide distinct 
reservoirs intended for physical activity and also therapy and leisure. 
Like standard and exercise spas, combination spas are able to house 
dense insulation, increasing their ability to retain heat and to lower 
their energy consumption.
    DOE's descriptions of these potential product classes were largely 
informed by the current industry standard, APSP-14 2019. In this NODA, 
standard spas, exercise spas, and combination spas are sometimes 
collectively referred to as ``non-inflatable'' spas or ``hard-sided'' 
spas. And in this NODA, inflatable spas are often treated separately 
because their construction is associated with limited technology 
options and higher energy consumption. Exercise spas, standard spas, 
and combination spas, however, are often treated similarly as non-
inflatable spas.
    DOE requests comment on whether the distinction between categories 
of PESs, as described in section III.A.2 of this NODA, is significant 
enough to warrant the establishment of different product classes for 
each type.
3. Manufactures and Industry Structure
    The PES market is largely split between inflatable spas, standard 
spas, and exercise and combination spas, with each type catering to 
different consumer segments that do not significantly overlap. 
Similarly, there is no significant overlap between the manufacturers of 
inflatable spas and non-inflatable spas, although one manufacturer will 
often make all of the standard, exercise, and combination spas. The 
inflatable spa market is concentrated in a small number of 
manufacturers characterized by large production volumes, vertical 
integration, and manufacturing plants located outside of the United 
States. The market for non-inflatable spas, however, is more fragmented 
among manufacturers who purchase most spa components and whose 
manufacturing plants are located in North America. Manufacturers of 
both inflatable and non-inflatable spas often produce models under 
multiple brands. In particular, manufacturers of non-inflatable spas 
may also offer different brands, and even product lines within a brand, 
at multiple price points. Features that tend to correlate to the price 
point of a spa include the number and strength of therapy jets, the 
quality of cabinet materials, and the presence of additional features, 
such as lighting or stereo systems.
    DOE requests comment on the above description of the PES 
manufacturers and the PES industry structure and whether any other 
details are necessary for characterizing the industry or for 
determining whether energy conservation standards for PESs might be 
justified.
4. Other Regulatory Programs
    As part of its analysis, DOE surveyed existing regulatory programs 
concerning the energy consumption of PESs. These regulatory programs 
include both programs that enforce mandatory limits in their respective 
jurisdictions and voluntary programs. The first such mandatory program 
was CEC's mandatory Title 20 regulations concerning PESs, which were 
adopted in 2004. Over the next decade, four other states adopted 
mandatory standards, in some cases following CEC's regulations and, in 
other cases, creating their own, such as Arizona's Title 44 adopted in 
2009. In 2014, PHTA created the first iteration of a voluntary industry 
standard in APSP-14 2014, which measures and sets limits for the energy 
required to maintain the set temperature and circulate water while the 
spa is not in use, known as ``standby power.''
    The most recent development in test procedures and energy 
conservation standards for PESs was the publication of APSP-14 2019 in 
2019. This revised version of the APSP-14 (i.e., APSP-14 2019) was 
created in collaboration with CEC and was promptly adopted as 
California's new standard. The 2019 version revised some test methods 
and lowered the maximum allowable standby power for exercise and 
combination spas from those in APSP-14 2014. APSP-14 2019 also included 
standby power limits for inflatable spas for the first time. As of July 
2022, nine states have adopted APSP-14 2019, three states have adopted 
the previous version APSP-14 2014, and Arizona and Connecticut follow 
Arizona's 2009 Title 44 provisions and California's 2006 Title 20 
provisions, respectively.
    DOE is also aware of standards in the European Union and Canada. 
The European Union standard, CSN EN 17125, covers a wider range of 
products and concerns safety requirements and test methods for energy 
consumption.\13\ CSN EN 17125 specifies labeling requirements for 
energy consumption but does not specify a maximum limit for the energy 
consumption of PESs. A Canadian national standard, Energy Performance 
of Hot Tubs and Spas, reaffirmed in 2021, (``CSA C374:11''), provides 
both a test method and energy performance requirements for PESs.\14\ 
CSA C374:11 cites CEC's Title 20, and its test procedure and energy 
conservation standards are similar to those in APSP-14 2019.
---------------------------------------------------------------------------

    \13\ CSN EN 17125 is available at: https://www.en-standard.eu/csn-en-17125-domestic-spas-whirlpool-spas-hot-tubs-safety-requirements-and-test-methods/.
    \14\ CSA C374:11 (R2021) is available at: https://www.csagroup.org/store/product/2703317/.
---------------------------------------------------------------------------

    DOE requests information on any voluntary or mandatory test 
procedure and energy conservation standards for PESs that are not 
mentioned in section III.A.4 of this NODA.
5. Technology Options for Improving Efficiency
    DOE reviewed product literature and conducted manufacturer 
interviews to survey the technologies that could lower the normalized 
average standby power of a PES and are currently available for use in 
the portable electric spa market. To identify the most relevant 
technology

[[Page 69088]]

options, DOE researched the components of PESs that consume energy and 
the design characteristics that affect energy consumption. DOE's 
research and data submitted by manufacturers suggest that the most 
substantial energy uses of a portable electric spa in standby mode are 
the energy use associated with maintaining the water temperature and 
circulating the water. As a result, DOE's analysis considered 
technology options that focus on these two systems. Because their 
designs are quite different, inflatable spas and non-inflatable spas 
have different instances of applicable technology options, although the 
engineering motivations behind the types of technology options are 
similar. DOE's research did not identify reasons that technology 
options would differ between standard spas, exercise, and combination 
spas. Accordingly, the same technology options are considered for each 
spa variety.
    DOE seeks comment generally on the descriptions of relevant energy-
saving technology options as described in section III.A.5 of this 
document, including whether any options require revised or additional 
details to characterize each option's effects on a PES's energy 
consumption.
a. Insulation
    To minimize heat losses, PESs require insulating materials between 
the hot spa water and cool ambient air. This NODA uses the unmodified 
term ``insulation'' to refer to the insulation in the walls and floor 
of the spa, as opposed to any insulating materials in the cover. In 
non-inflatable spas, this material is often a polyurethane spray foam, 
which is applied to the bottom of the spa shell. Foam can also be 
applied in sheets inside the perimeter of the spa cabinet. Foam 
insulation can be any selected thickness, with the maximum amount of 
foam known as ``full-foam'' insulation, which entirely fills the space 
between the spa shell and the cabinet. Even in full-foam applications, 
however, foam or other insulating materials cannot totally encapsulate 
a spa's pumps or heating element. The most typical foam used has a 
density of 0.5 pounds per cubic foot. Both thicker and denser 
insulation increase, up to a point, the total R-value of the 
insulation, which then reduces the energy consumption of spas. However, 
the marginal effectiveness of thicker or denser insulation in the walls 
and floor, as measured in R-value, decreases progressively. Although in 
practice foam may be added in arbitrary increments, the efficiency 
analysis in section III.C.1 considers two specific levels of additional 
insulation. The first corresponds to R-6 added in the spa's wall 
sections to prevent heat loss from the water outward to the ambient air 
and to R-3.5 added in the floor section to prevent heat loss from the 
water downward to the ground. The second corresponds to R-6 added in 
the wall sections. The efficiency analysis also considers a design 
option in which two inches of 0.5 pound per cubic foot of foam is 
replaced with 2 pound per cubic foot of foam.
    Inflatable spas are typically only insulated by air pockets, their 
PVC material, and flexible foam integrated into their covers and, 
especially, into attachable ``jackets.'' To maintain its collapsible 
and storable characteristics, however, many other methods of adding 
foam or other insulating materials to non-inflatable spas are not 
applicable. In response to mandatory energy consumption limits in some 
jurisdictions, some inflatable spa manufacturers developed a 
``jacket,'' which has foam integrated into it and surrounds the 
inflated spa. During correspondence with DOE, inflatable manufacturers 
reported that such a jacket or a similar design is necessary for 
reducing the energy consumption below maximum levels as specified by 
the most recent industry and CEC standards.
    DOE seeks comment regarding use of additional or improved 
insulation as a technology option for PESs and, in particular, what 
would limit adding further insulation to a PES.
b. Cover
    Heat loss, which drives PES energy consumption, can also occur 
through the top face of a spa, in addition to through the walls and 
floor. Covers prevent this heat loss by acting as an insulator against 
conductive heat transfer and also as a convection and vapor barrier to 
maintain high humidity levels above the water surface, thus preventing 
evaporative cooling. In non-inflatable spas, spa covers are typically 
made of rigid polystyrene foam panels wrapped in moisture barriers and 
protective vinyl sheaths. Most covers on non-inflatable spas have a 
central hinge, which allows consumers to remove and otherwise handle 
them more easily. The hinge is typically created by joining two pieces 
of rigid foam with a patch of vinyl. To allow for easy folding, there 
is typically a space of one to two inches between the two sections. 
This design is known as a ``dual-hinged'' design because either half 
may be lifted first. Like insulation in the body of non-inflatable 
spas, the main method for increasing the thermal resistance of a cover 
is to increase its thickness or density. Also, like insulation in the 
body of an inflatable spa, the marginal effectiveness of additional 
cover thickness or density decreases as the thickness or density 
increase. Product literature and online retail data suggest that the 
ranges of cover thicknesses and densities available are two inches to 
six inches and one pound per cubic foot to two pounds per cubic foot, 
respectively.
    Inflatable spa covers consist of thin flexible foam material that 
is about one-half inch thick and surrounded by a flexible PVC tarp. In 
lieu of additional foam that would reduce the cover's ability to 
collapse or to be stored, some inflatable spa manufacturers distribute 
spas with inflatable inserts, which end users may place in a pouch on 
the bottom of the cover. These inserts reduce the heat loss through the 
top face of the spa by adding additional insulating pockets of air 
between the water and ambient air and by improving the seal of the 
cover.
    DOE seeks comment regarding use of improved covers as a technology 
option for PESs and, in particular, what would limit further energy 
performance increases of PES covers.
c. Sealing
    A particularly important aspect of the performance of a spa cover 
is that it largely depends on the extent to which the cover is able to 
create an airtight seal between the area above the spa's water and the 
area surrounding the spa. Inadequate seals allow air to exchange 
between each area, resulting in heat losses through evaporation and 
convection. Areas through which air typically escapes are around the 
edge of the cover, where the cover meets the flange created by the top 
of the spa shell, and the central double-hinging area of the cover, if 
the cover does have a hinge. A common method of addressing the seal 
around the edge of the cover is by ensuring both the spa flange and the 
bottom of the cover are as flat as possible. To address air leaks 
through a hinge in the cover, manufacturers might insert a separate 
piece of foam to fill the gap between each half of the cover created by 
the hinge. This ``hinge seal'' is also composed of rigid foam sheathed 
in a protective material, such as vinyl, and is connected to the 
stretch of material connecting each section of the spa cover. The hinge 
seal is not connected to each section, however, allowing for easy 
folding. Manufacturers might also opt for a ``single-hinged'' folding 
design, in which there is no space gap between vertical edges of each 
spa cover sections. Instead, the edges of each

[[Page 69089]]

section of the cover are angled, with one overlapping the other. This 
design eliminates the gap between sections. With this design, only the 
section of the cover resting on top of the other at the hinge can be 
lifted first. Covers can typically be buckled into position, but 
manufacturers and product literature suggest that, when fastened, these 
buckles do not to a large extent affect the seal but are mostly 
intended for safety. Correspondence with manufacturers has also 
suggested that the cover cannot be perfectly sealed. Because pressure 
will build as a result of thermal expansion and contraction of interior 
air and water, as well as from the potential addition of air through 
jets, some amount of air will be forced to escape through even very 
fortified spa covers.
    Manufacturers have indicated to DOE that similar sealing strategies 
addressing air from leaking out of the spa cabinet could also reduce a 
spa's normalized average standby power. However, DOE did not identify 
evidence of air leakage through spa regions other than the cover. 
Accordingly, no technology options or technologies were analyzed that 
explicitly address the sealing of other areas than the cover of the 
spa.
    DOE seeks comment regarding use of improved sealing as a technology 
option for PESs, regarding whether air leakage is significant at PES 
locations other than the cover, and regarding what would limit further 
sealing improvements energy performance increases of PES covers.
d. Radiant Barrier
    The insulation and sealing methods described previously reduce 
conductive and convective heat losses, respectively. Energy can also 
leave the spa through radiative heat transfer. This type of heat 
transfer can be reduced by the application of a radiant barrier that 
reflects radiation back toward the center of the spa. Commonly 
available radiant barriers are composite ``thermal blankets'' made of a 
thin insulating material, such as bubble wrap, with reflective foil on 
both of its sides. DOE is aware of several manufacturers who use such a 
material or similar ones as a method of reducing their spas' heat 
losses. Correspondence with manufacturers and DOE's own research 
indicates that radiant barriers require an air gap between them and the 
radiating heat source to be effective. Like insulation, the marginal 
effectiveness of radiant barriers decreases as the spa reduces its heat 
losses via other methods.
    DOE seeks comment on the description of radiant barriers and data 
on the relative effects of radiant barriers when paired with different 
amounts of insulation and different thicknesses of adjacent air gaps.
e. Insulated Ground Cover
    To reduce heat conducted from the bottom of a spa to the ground, it 
is possible to install spas on top of a layer of insulating material. 
While non-inflatable spas are not typically distributed with such 
layers, an example of this application is in the current industry test 
procedure, APSP-14 2019, which allows for spas to be placed on top of 
two inches of polyisocyanurate sheathed with at least half an inch of 
plywood during testing. Inflatable spas, however, are often distributed 
with thin foam mats meant to be placed underneath the spas. These mats 
are typically to protect them from debris which might puncture the 
spas' PVC material. DOE has also observed similar, thicker ground 
covers available for purchase, which are marketed on the basis of their 
insulating capacities in addition to protective capacities. These 
thicker ground covers reduce the conductive heat transfer through the 
bottom of the spa to the ground. Based on their expected effectiveness 
and availability on the market, DOE considered insulated ground covers 
as a viable technology option for inflatable PESs.
    For this NODA, DOE did not explicitly model the addition of an 
insulated ground cover as a technology option for non-inflatable PESs 
because it remains unclear how DOE's proposed test procedure for PESs 
may affect manufacturers' installation instructions (e.g., to use an 
insulated ground cover) and consequently typical PES installation 
configurations. Additionally, existing performance data for PESs does 
not typically disclose presence of an insulated ground cover. Due to 
this uncertainty and the fact that such an addition into DOE's model 
would change the effects of other design options, DOE employed the more 
conservative approach of not modeling insulated ground covers as a 
technology option for non-inflatable PESs in this NODA. However, DOE 
may do so in the future as indicated by comment or data. In contrast to 
the approach taken for non-inflatable PESs, DOE did include insulated 
ground covers as a technology option for inflatable spas because of the 
abundance of currently available products marketed as insulating ground 
covers for that spa type.
    DOE requests comment regarding whether insulated ground covers 
warrant inclusion in the set of technology options for non-inflatable 
PESs, including whether non-inflatable PESs are typically installed on 
top of insulated ground covers and whether that installation would be 
likely to change in view of the proposed DOE test procedure (see 87 FR 
63356).
f. Dedicated Circulation Pump
    Most non-inflatable spas use two-speed jet pumps for powering 
therapy jets and for water circulation. These jet pumps operate at high 
speed when powering therapy jets and low speed when used only for 
circulation purposes. The overall efficiency of a pump depends on 
several factors, including the hydraulic efficiency of the impeller and 
casing, the geometry of the plumbing system, and the electrical 
efficiency of the pump's motor. However, it is possible to simplify the 
comparison of the efficiencies of two differently sized pumps operating 
at the same motor speed. In general, when a pump operates at a motor 
speed significantly lower than its maximum motor speed on a given 
plumbing system, it will be less efficient than a smaller pump 
operating at its maximum motor speed on that same plumbing system. 
Consequently, a pump configuration more efficient than a single two-
speed pump is two single-speed pumps, including a higher horsepower 
pump sized for operating therapy jets and a lower horsepower pump sized 
for filtration purposes. DOE is aware that pump inefficiencies may 
manifest as waste heat, which, if absorbed by the spa water, would 
reduce the load on the heating element and ultimately may mitigate the 
effects of a relatively inefficient pump and pump motor. The extent to 
which this waste heat is captured is still being investigated. Although 
in practice two-speed pumps and dedicated circulation pumps vary in 
power consumption, and the amount of waste heat will depend on how a 
given pump motor dissipates heat and on a spa's insulation, the 
efficiency analysis in section III.C.1 considers just two estimated 
values for water circulation: one associated with using the low-speed 
setting of a two-speed pump, and one associated with using a one-speed 
dedicated circulation pump. DOE did not evaluate dedicated circulation 
pumps as a technology option for inflatable spas because inflatable 
spas typically use a one-speed dedicated circulation pump and a 
separate air blower for massage jets.
    DOE seeks comment and data on the degree to which two-speed pump 
inefficiencies manifest as waste heat and to which that waste heat is 
absorbed by the spa's water.

[[Page 69090]]

g. Heat Pump
    DOE is aware of the existence of heat pumps marketed for use with 
PESs. Heat pumps would require less power as a heat source than the 
electric resistance heaters typically used in the PES industry. DOE is 
aware of at least one manufacturer of heat pump models marketed for use 
with spas explicitly.\15\ However, heat pumps designed for use with 
portable electric spas appear otherwise absent in the market. DOE is 
unaware of portable electric spas that are equipped with heat pumps by 
their manufacturers.
---------------------------------------------------------------------------

    \15\ Arctic Heat Pumps. Arctic Titanium Heat Pump for Swimming 
Pools and Spas--015ZA/B. Available at www.arcticheatpumps.com/arctic-titanium-heat-pump-for-swimming-pools-and-spas-heats-chills-11-700-btu-dc-inverter.html. (last accessed August 5, 2022) The 
2022-08-05 material from this website is available in docket 2022-
BT-STD-0025 at www.regulations.gov.
---------------------------------------------------------------------------

    For the one spa-compatible heat pumps supplier that DOE identified, 
models list coefficients of performance \16\ that range from 3.16 to 
6.2, though at lower output temperatures than those typical of PESs. In 
general, heat pump performance declines as a function of increase of 
the thermal gradient across which they operate. However, DOE did not 
obtain data to extrapolate those values to higher temperatures. In 
general, heat pump performance declines as a function of increase of 
the thermal gradient across which they operate. Additionally, DOE did 
not obtain data regarding how heat pumps would affect installation cost 
if non-integral units required separate mounting, plumbing, and 
electrical connection.
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    \16\ Coefficient of performance (``COP'') is a figure 
characterizing the relative performance of heat pumps. It represents 
the ratio of heat transferred to the input energy required to 
transfer it. A higher COP indicates less energy consumed to per unit 
of heat delivered.
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    Accordingly, for this NODA, heat pumps were not included in the set 
of design options modeled in the engineering analysis due to lack of 
sufficient data and limited availability. If warranted, DOE may model 
the addition of a heat pump as a technology option in future analysis.
    DOE requests comment regarding whether heat pumps would be likely 
to reduce energy consumption in PESs and, if so, quantified estimates 
of the effects of heat pump integration on both energy consumption and 
manufacturer production cost.
    DOE requests comment regarding the availability of heat pumps 
compatible with PESs.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    Technological feasibility. Technologies that are not incorporated 
in commercial products or in working prototypes will not be considered 
further.
    Practicability to manufacture, install, and service. If it is 
determined that mass production and reliable installation and servicing 
of a technology in commercial products could not be achieved on the 
scale necessary to serve the relevant market at the time of the 
projected compliance date of the standard, then that technology will 
not be considered further.
    Impacts on product utility or product availability. If it is 
determined that a technology would have a significant adverse impact on 
the utility of the product for significant subgroups of consumers or 
would result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the United States at the time, that technology 
will not be considered further.
    Adverse impacts on health or safety. If it is determined that a 
technology would have significant adverse impacts on health or safety, 
that technology will not be considered further.
    Unique-pathway proprietary technologies. If a design option 
utilizes proprietary technology that represents a unique pathway to 
achieving a given efficiency level, that technology will not be 
considered further due to the potential for monopolistic concerns.
    10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
    If DOE determines that a technology, or a combination of 
technologies, fails to meet one or more of the listed five criteria, it 
will be excluded from further consideration in the engineering 
analysis.
    In the case of PESs, DOE has tentatively determined that no 
technology options identified in section III.A.5 met the criteria for 
screening. Accordingly, all technology options identified in section 
III.A.5 were considered during the engineering analysis, with the 
exception of heat pumps and insulated ground covers (for non-inflatable 
spas only), which are not explicitly analyzed as design options for 
reasons discussed in section III.A.5 of this NODA.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of PESs. There are two 
elements to consider in the engineering analysis: the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of PESs cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
PESs, DOE considered technologies and design option combinations not 
eliminated by the screening analysis. For each product class of PES, 
DOE estimated the manufacturer production cost (``MPC'') for the 
baseline as well as higher efficiency levels. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
    DOE converts the MPC to the manufacturer selling price (``MSP'') by 
applying a manufacturer markup. The MSP is the price the manufacturer 
charges its first customer, when selling into the PES distribution 
channels. The manufacturer markup accounts for manufacturer non-
production costs and profit margin. DOE developed the manufacturer 
markup by examining publicly available financial information for 
manufacturers of the covered product.
1. Efficiency Analysis
    DOE selected efficiency levels to analyze by identifying baseline 
units for non-inflatable and inflatable spas, evaluating the effects of 
efficiency design options on those units, and extrapolating the results 
to spas of other sizes. The baseline unit is intended to be 
representative of the most consumptive spas available in the market. 
For non-inflatable spas, DOE identified ``Spa J'' from the 2012 study 
``Measurement and Analysis of the Standby Power of Twenty-Seven 
Portable Electric Spas'' as the baseline unit.\17\ For inflatable spas, 
DOE acquired a sample unit and measured its performance without the 
additional features that make it compliant with CEC energy conservation 
standards (and, by extension, with APSP-14 2019). The results of those 
tests were considered to be representative of the most consumptive 
inflatable spas on the market.
---------------------------------------------------------------------------

    \17\ Hamill, Andrew. ``Measurement and Analysis of the Standby 
Power of Twenty-Seven Portable Electric Spas.'' September, 2012.
---------------------------------------------------------------------------

    DOE seeks comment on its selection of the baseline unit, including 
whether any other units on the market would

[[Page 69091]]

better represent the most consumptive spas available for purchase.
    The non-inflatable spa baseline unit was identified on the basis of 
its fill volume and normalized average standby power. However, no 
information was available regarding its features and, in particular, 
its insulation characteristics. To predict the effects of technologies 
and design option combinations on the non-inflatable baseline unit, it 
was necessary to estimate insulation levels of the model's spa cabinet. 
To do this estimate, a simplified model of the energy consumption of 
PESs was created, which accepts spa specifications, including fill 
volume, linear dimensions, and insulation type, and predicts the 
normalized average standby losses of a spa. Predictions were made for a 
subset of spas in MAEDbS on which DOE collected additional data through 
brochures and other marketing materials, and predictions were then 
compared to values reported in MAEDbS. By establishing a relationship 
between the amount of insulation and normalized average standby power, 
it was possible to estimate the amount of insulation in the non-
inflatable baseline unit, Spa J. Additionally, Spa J was reported to be 
tested with a cover better than other covers observed to be available 
on the market. Using the energy consumption model, the normalized 
average standby power was approximated for Spa J if it had been fitted 
with a cover of a lower R-value. The energy consumption model is 
described in more detail below.
    DOE's research and correspondence with manufacturers indicate that 
the drivers of PESs' energy consumption in standby mode are: (1) heat 
losses, and (2) the energy demands of filtration. In addition to the 
energy consumption of the filtration system, there are small power 
demands, such as that of a spa's controls unit, that are also modeled 
as constant with size. In DOE's analysis, the energy consumption of the 
filtration system and other wattage inputs, which are constant with 
size and do not contribute to water heating, are collectively referred 
to as ``non-heat losses.'' In the energy consumption model, these non-
heat losses were modeled as constant with size and were discretized 
into two potential values for non-inflatable spas--a larger value for 
spas that use the low-speed setting of high-hp pumps for filtration, 
and a smaller value for spas that use a better-sized dedicated 
circulation pump for filtration purposes. Only one value for non-heat 
losses was estimated for inflatable spas, which typically already use 
dedicated circulation pumps for filtration and separate air blowers for 
massage jets. The estimated values for non-heat losses are summarized 
in the table below. The ``High HP 2-Speed Pump'' column represents the 
non-heat losses associated with a high horsepower two-speed pump for 
non-inflatable spas and the single speed pump typical for inflatable 
spas, while the ``Dedicated Circulation Pump'' column represents non-
heat losses associated with dedicated circulation pump upgrades.

             Table III.1--Estimated Non-Heat Losses of PESs
------------------------------------------------------------------------
                                             Non-heat losses
                                ----------------------------------------
            Spa type               High HP  2-speed        Dedicated
                                         pump          circulation pump
------------------------------------------------------------------------
Standard Spa...................  40 Watts...........  20 Watts.
Exercise Spa...................  40 Watts...........  20 Watts.
Combination Spa................  40 Watts...........  20 Watts.
Inflatable Spa.................  n/a................  27.25 Watts.
------------------------------------------------------------------------

    DOE requests comment on the range of filtration system power 
demands in PESs as described in Table III.1. DOE also requests comment 
on any correlation between power demand and whether a spa uses a high 
horsepower two-speed pump or a lower horsepower dedicated circulation 
pump.
    To calculate a spa's heat loss in standby mode, DOE assumed that a 
spa's normalized average standby power loss is approximately equal to 
the instantaneous heat loss of a spa held at thermal equilibrium, with 
spa water temperature and ambient air temperature held at the values 
respectively specified by DOE's proposed test procedure. It is 
noteworthy that doing so ignores temperature fluctuations 
characteristic of PESs' heating cycles.
    DOE accounted for heat losses due to one-dimensional conductive 
heat transfer through the walls, floor, and cover of the spa, as well 
as heat losses due to convection at the outer wall and due to 
radiation. Spas were modelled as thermal circuits consisting of walls, 
floor, and cover in parallel with each other. The total thermal 
resistance of the walls and floor of the spa depends in part on their 
respective thicknesses and, consequently, the shape of the spa shell. 
Therefore, a simplified shell configuration consisting of basic upright 
seats on every side (i.e., no lounge seats) was considered. As a result 
of this assumption, walls were divided into lower-insulation top wall 
and higher-insulation bottom wall sections, and the floor was divided 
into lower-insulation center and higher-insulation perimeter sections. 
In particular, the following simplifications were made regarding the 
distance from the spa shell to the spa cabinet:

   Table III.2--Measurements of Simplified Model of Non-Inflatable Spa
                                  Shell
------------------------------------------------------------------------
                                                    Maximum  insulation
    Section of spa             Description               thickness
------------------------------------------------------------------------
Top of Wall...........  The horizontal distance   6 inches.
                         from the spa cabinet to
                         the seat backs..
Bottom of Wall........  The horizontal distance   18 inches.
                         from the spa cabinet to
                         the wall of the foot
                         well..
Center of floor.......  The vertical distance     3 inches.
                         from the base of the
                         spa to the bottom of
                         the foot well..
Perimeter of floor....  The vertical distance     15 inches.
                         from the base of the
                         spa to the bottom of
                         the seat..
------------------------------------------------------------------------


[[Page 69092]]

    In addition to conductive heat transfer, heat losses due to 
radiation and convection were estimated. Losses due to radiation were 
approximated using the average percent difference between the average 
standby losses of spa models units with and without reflective layers 
in their insulation. DOE identified those unit pairs and their 
differences in standby energy consumption using MAEDbS. DOE also 
conducted independent testing on one inflatable spa and one non-
inflatable spa, measuring the energy consumption before and after each 
was retrofitted with a reflective radiant barrier. To estimate the 
effects of air convection on the outside surfaces of the spa, DOE 
selected a convective heat transfer coefficient characteristic of 
airflow at the rate specified in DOE's proposed test procedure and 
applied it in series with the spa walls, floor, and cover. Although air 
leaks are known to affect the heat losses of a spa, DOE did not obtain 
data sufficient to characterize the magnitude of their effect. 
Accordingly, DOE's energy model does not estimate the effect of air 
leaks explicitly. Instead, losses due to air leaks are treated as 
included in the losses through bridge sections, as described as 
follows.
    DOE requests comment on its assumption of a standard shell shape as 
described in Table III.2, especially whether it is representative and 
whether DOE should consider certain shapes that result in maximum or 
minimum amounts of insulation.
    DOE requests data and comment on the effectiveness of radiant 
barriers in reducing the normalized average standby power of PESs and 
on what factors make radiant barriers more or less effective.
    DOE requests data and comment on the extent to which spas lose heat 
through air convection out of unsealed regions of the spa and on the 
factors that affect heat losses due to sealing.
    DOE requests comment on the best way to quantify varying degrees of 
cover seal, including perimeter seal against the spa flange and hinge 
seal through the center of the cover.
    The PES energy consumption model system described previously 
overlooks several complicating factors. Specifically, the typical spa's 
cabinet holds plumbing, heating equipment, and other components that 
not only displace insulation, but also bring hot water closer to the 
outside of the spa and even generate their own waste heat, which 
escapes the spa or enters the water at unknown proportions. At the same 
time, the foam itself is subject to voids and other variations. Rather 
than attempting to find an analytical solution that considers factors 
such as the number of jets and amount of piping, the physical size of 
internal components, or the distance of each from the outside of the 
spa, DOE used a simplified model that considers the heat loss through 
these ``thermal bridges'' as the amount of heat loss that could not be 
predicted by the one-dimensional model described above. DOE used this 
assumption to reformulate the thermal circuit of a spa as consisting of 
one-part thermal bridge section and one-part insulated section, which 
is subdivided into walls, floor, and cover, as described previously. 
Bridge sections were modeled as smaller but responsible for a 
disproportionate amount of heat flux. Specifically, the proportion of 
areas were estimated to be 90 percent insulated area to 10 percent 
bridge area. As a result, it was possible to calculate an average R-
value for bridge sections in a spa. Using the average R-value for 
bridge sections and the modeled area ratios of insulated area to bridge 
area, the energy consumption model calculated total energy use with a 
median 0.9 percent error and an average of -4.38 percent error.
    DOE requests comment on the method of analyzing thermal bridges as 
a single section of low R-value on the spa. Additionally, DOE requests 
information about techniques and models which are used in industry to 
predict spa performance.
    DOE requests comment and data on the discrepancy between heat loss 
through the wall where the components are housed and through other 
walls.
    DOE requests comment on any strategies for considering the effects 
of hot water traveling through plumbing on a spa's heat loss.
    The R-value of a typical spa's bridge section was important to 
infer insulation thickness of Spa J, the chosen baseline unit for non-
inflatable spas. Although Spa J's ``equivalent insulation thickness'' 
was calculated using the measured heat loss rate, this value cannot be 
used to represent the spa's insulation thickness because it does not 
consider bridge sections of relatively low thermal resistance. 
Consequently, it would underestimate the amount of insulation in Spa J 
and overestimate both the space available for additional insulation and 
ultimately the amount by which it would be possible to lower heat 
losses. Using the average R-value for bridge sections, DOE found what 
may be a more representative insulation equivalent resistance, which is 
then able to be decomposed into individual walls, cover, and floor 
equivalent resistances.
    With estimated insulation characteristics for its baseline non-
inflatable spa, it was possible to calculate the expected effects of 
additional insulation on the baseline spa's normalized average standby 
power consumption. DOE used these calculations to evaluate additional 
insulation in the walls of the spa, the floor, and the cover. These 
calculations, along with data from DOE's testing a non-inflatable spa 
and from the 2012 Hamill study, were used to establish proposed 
efficiency levels for non-inflatable spas. DOE selected efficiency 
levels in the order of increasing dollar to implement per expected watt 
savings using costs described below in the cost analysis.
    DOE was also able to conduct its own testing on an inflatable spa 
baseline unit. Because DOE's energy consumption model relies to a large 
extent on R-values, and as DOE found less data on the R-value of 
inflatable spa materials, the effects of most inflatable design options 
were related to test data rather than calculations. For design options 
utilizing additional insulation and for which DOE did not have test 
data, a model similar to the one described previously was used. And 
efficiency levels for inflatable spas were chosen in the order of 
increasing dollar to implement per expected watt savings, similar to 
non-inflatable spas.
    After the normalized standby power consumption was calculated for 
the baseline non-inflatable and inflatable spas, the standby power of 
spas with other volumes was extrapolated using a scaling relationship. 
DOE used the relationship defined in APSP-14 2019 standards levels, 
which vary energy consumption proportionally to the volume of the spa 
raised to the two-thirds power. Several manufacturers recounted during 
correspondence with DOE that a constant term was added to the scaling 
relationship to account for energy demands unrelated to size during the 
most recent revision of APSP-14 2019. Consequently, DOE chose to again 
break total standby power losses into heat losses and non-heat losses, 
and to scale only heat losses proportionally to volume raised to the 
two-thirds power, while holding non-heat losses constant at different 
fill volumes.
    DOE requests comment describing its appropriation of the scaling 
relationship defined in APSP-14 2019 and whether there are any other 
traits with which DOE might vary energy consumption.
    The efficiency analysis above was informed by data acquired by 
testing to the current industry standard test procedure, APSP-14 2019. 
However, DOE has proposed a test procedure for PESs, which made it 
necessary to

[[Page 69093]]

convert initial results into those which might be expected if spas were 
to be tested under that proposed test procedure. In particular, this 
conversion accounted for a higher temperature gradient between spa 
water and ambient air temperatures during testing, and for the removal 
of the foam and plywood foundation allowed by APSP-14 2019.\18\ To 
account for the change in temperature gradient, original values were 
multiplied by a re-normalization factor of 1.243, the ratio of the 
proposed temperature difference of 46 [deg]F to the industry standard 
of 37 [deg]F. DOE removed R-13 of insulation from the floor section of 
the spa in its model to account for the loss of two inches of 
polyisocyanurate foam underneath the spa. While the converted values 
will be used for downstream analyses, DOE is also releasing the values 
before conversion so that manufacturers may consider them in the 
context of existing data.
---------------------------------------------------------------------------

    \18\ Appendix A of APSP-14 states the following: The floor may 
be insulated with 2in. (51mm) thick R-13 polyisocyanurate with 
radiant barrier on both sides.
---------------------------------------------------------------------------

    DOE requests comment on whether there are other factors DOE should 
consider in converting normalized average standby power values to 
reflect the proposed test procedure.
2. Cost Analysis
    DOE gathered data through manufacturer interviews, sample unit 
teardowns, and publicly available retail data to estimate the costs of 
both whole baseline units and of incremental design options. When 
necessary, profit margins for inflatables and non-inflatable spa 
manufacturers, as well as certain distributors, were estimated to 
convert MPC to MSP to final sale price.
    DOE requests comment and data on typical markups from MPC to MSP 
and from MSP to final sale price.
    Once the costs of baseline units and individual design options were 
estimated, DOE investigated a scaling function that could relate the 
price of a spa to its fill volume. As a first approximation, DOE 
estimated that the cost of a spa would be directly proportional to its 
fill-volume to the two-thirds power. DOE analyzed a small sample of 
retail data and found that, for units otherwise equal in qualities and 
features, such a relationship appears to slightly overestimate the cost 
of smaller spas and underestimate the cost of larger spas.
    DOE requests comment and data characterizing the relationship 
between MPC and the size of a PES and whether there are better methods 
for approximating the effects of size changes on MPC than the one 
described previously.
    DOE requests comment and data characterizing to what degree sales 
margins vary with spa size.
3. Engineering Results
    The initial results of the efficiency analysis contained the 
estimated energy consumption of PESs at each efficiency level, as would 
be measured according to the current industry test procedure, APSP-14. 
These initial results are not used in the energy use analysis or other 
downstream analyses because they do not reflect DOE's proposed test 
procedure. However, as manufacturers are most likely to have data as 
measured with the current industry standard test procedure, the initial 
results of the efficiency analysis are summarized in the tables which 
follow. In the sets of efficiency levels for both non-inflatable and 
inflatable spas, Efficiency Level 1 is equivalent to the maximum 
consumption limit set by APSP-14 2019.

                    Table III.3--Energy Consumption for Non-Inflatable Spas Using Industry TP
----------------------------------------------------------------------------------------------------------------
                                              Energy consumption using industry TP  Energy consumption of a 334-
              Efficiency level                               (watts)                      gal unit  (watts)
----------------------------------------------------------------------------------------------------------------
0 (Baseline)................................  40 + 6.88 * Vol 2/3.................                           371
1...........................................  40 + 3.75 * Vol 2/3.................                           220
2...........................................  40 + 2.92 * Vol 2/3.................                           180
3...........................................  40 + 2.74 * Vol 2/3.................                           172
4...........................................  40 + 2.74 * Vol 2/3.................                           152
5...........................................  40 + 2.63 * Vol 2/3.................                           146
6...........................................  40 + 2.38 * Vol 2/3.................                           135
7...........................................  40 + 1.88 * Vol 2/3.................                           111
8 (Max-Tech)................................  40 + 1.80 * Vol 2/3.................                           107
----------------------------------------------------------------------------------------------------------------


                      Table III.4--Energy Consumption for Inflatable Spas Using Industry TP
----------------------------------------------------------------------------------------------------------------
                                              Energy consumption using industry TP  Estimated energy consumption
              Efficiency level                               (watts)                 of a 200-gal unit  (watts)
----------------------------------------------------------------------------------------------------------------
0 (Baseline)................................  9.20 * Vol 2/3......................                           315
1...........................................  7.00 * Vol 2/3......................                           239
2...........................................  4.78 * Vol 2/3......................                           164
3(Max-Tech).................................  4.73 * Vol 2/3......................                           162
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on the efficiency levels described in tables 
Table III.3 and Table III.4, including whether any do not align with 
expected effects design options associated with them, as described in 
Table III.7 and Table III.8.
    As discussed previously in this document, on October 18, 2022, DOE 
proposed a test procedure for measuring the energy consumption of PESs. 
87 FR 63356. DOE's proposed test procedure aligns with the current 
industry test procedure in many regards, including in its use of 
normalized average standby power as a metric for the energy consumption 
of PESs. However, DOE's proposed test procedure includes changes to the 
specified ambient air temperature and to the amount of insulation 
allowed under the spa during

[[Page 69094]]

testing. These changes can be expected to increase the measured 
normalized average standby power of all PESs. Section III.C.1 discusses 
DOE's method of converting standby power values measured under the 
industry test procedure to the values expected if the standby power 
values for the same spas were measured under DOE's proposed test 
procedure. The converted and final results are summarized in the tables 
below. These values are used in the analyses described in later 
sections of this document.
    The tables below also summarize the expected percent change in 
energy consumption on each efficiency level as a result of DOE's 
proposed test procedure. The increased temperature gradient is not 
expected to affect any efficiency levels differently. However, the 
effect of removing additional insulation from underneath the spa will 
depend on the amount of foam present in the base section of the spa and 
on the presence of other design options. As a result, the percent 
change is not constant across efficiency levels. The change in 
normalized average standby power at a given efficiency level due to 
DOE's proposed test procedure is expected to remain constant for spas 
of all volumes at that efficiency level.

                    Table III.5--Energy Consumption for Non-Inflatable Spa Using Proposed TP
----------------------------------------------------------------------------------------------------------------
                                                                                  Energy
                                              Energy consumption using       consumption of a   % Increase from
            Efficiency level                    proposed TP  (watts)           334-gal unit     industry TP  (%)
                                                                                 (watts)
----------------------------------------------------------------------------------------------------------------
0.......................................  40 + 9.55 * Vol 2/3.............                500                 35
1.......................................  40 + 5.37 * Vol 2/3.............                299                 36
2.......................................  40 + 4.34 * Vol 2/3.............                249                 38
3.......................................  40 + 4.12 * Vol 2/3.............                238                 38
4.......................................  40 + 4.02 * Vol 2/3.............                213                 40
5.......................................  40 + 3.88 * Vol 2/3.............                207                 42
6.......................................  40 + 3.04 * Vol 2/3.............                167                 24
7.......................................  40 + 2.73 * Vol 2/3.............                152                 37
8.......................................  40 + 2.63 * Vol 2/3.............                147                 37
----------------------------------------------------------------------------------------------------------------


                      Table III.6--Energy Consumption for Inflatable Spa Using Proposed TP
----------------------------------------------------------------------------------------------------------------
                                                                                  Energy
                                              Energy consumption using       consumption of a   % Increase from
            Efficiency level                    proposed TP  (watts)           200-gal unit     industry TP  (%)
                                                                                 (watts)
----------------------------------------------------------------------------------------------------------------
0.......................................  14.39 * Vol 2/3.................                492                 56
1.......................................  12.03 * Vol 2/3.................                411                 72
2.......................................  7.50 * Vol 2/3..................                257                 57
3.......................................  7.44 * Vol 2/3..................                254                 57
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on the expected effects of DOE's proposed test 
procedure, as described in Table III.5 and Table III.6, including on 
whether its effects on normalized average standby power would be 
greater than or less than DOE's estimates.
    Efficiency levels for PESs were established by estimating the 
effects of adding each design option to a representative unit at the 
previous efficiency level. The design option, which presented the 
lowest cost in dollars per watt expected to be saved, was selected as 
characteristic of the next efficiency level. Although potential 
standards at different efficiency levels will not prescribe specific 
design options, this approach resulted in the possibility of 
characterizing each efficiency level by the addition of a specific 
design option. DOE's estimates of the cost to manufacture each design 
option, as well as the baseline spa, are described in section III.C.2 
of this NODA. The characteristic design options and their estimated 
costs on 334-gallon non-inflatable spas and a 200-gallon inflatable spa 
are summarized in the tables III.7 and III.8.

                 Table III.7--Characteristic Design Options for Non-Inflatable Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                            Characteristic design option      Total MPC for     Marginal MPC for
            Efficiency level                   added from previous EL          334-gal unit       334-gal unit
----------------------------------------------------------------------------------------------------------------
0.......................................  The baseline spa, Spa J, was                 $3,120                 $0
                                           estimated to have R-10 worth of
                                           insulation in the walls and
                                           floor and an R-14 cover.
1.......................................  Additional R-6 in the wall                    3,186                 66
                                           sections and R-3.5 in the floor
                                           section.
2.......................................  Additional R-6 in the wall                    3,252                 66
                                           sections.
3.......................................  Additional inch of cover                      3,280                 28
                                           thickness (equivalent to an
                                           additional R-4).
4.......................................  Switch from two-speed pump to                 3,405                125
                                           dedicated jet and circulation
                                           pumps.
5.......................................  Additional inch of cover                      3,433                 28
                                           thickness (equivalent to an
                                           additional R-4).
6.......................................  Replace two inches of 0.5lb foam              3,607                174
                                           with 2lb foam insulation.
7.......................................  Add radiant barrier around                    3,697                 90
                                           perimeter of spa.
8.......................................  Increase cover density from 1lb               3,767                 70
                                           foam to 2lb foam.
----------------------------------------------------------------------------------------------------------------


[[Page 69095]]


                 Table III.8--Characteristic Design Options for Inflatable Spa Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                            Characteristic design option    Total MPC on  200-  Marginal MPC on
            Efficiency level                   added from previous EL            gal unit         200-gal unit
----------------------------------------------------------------------------------------------------------------
0.......................................  None............................               $122                 $0
1.......................................  Flexible foam jacket and                        165                 43
                                           inflatable cover insert.
2.......................................  Additional reflective blanket                   297                132
                                           around spa.
3.......................................  \1/2\ inch thick foam ground                    329                 32
                                           cover.
----------------------------------------------------------------------------------------------------------------

    DOE requests comment and data regarding the design options and 
associated estimated costs described in tables Table III.7 and Table 
III.8 of this NODA.
    Section III.C.2 also discusses the conversion of MPC to MSP using 
manufacturer markups, and the scaling relationship used to extrapolate 
from the price of the baseline unit to units of other sizes. In 
particular, the price of a spa was modeled as growing proportionally to 
the fill volume to the two thirds power. The manufacturer markups used 
and the ultimate MSP scaling relationships are described in Tables 
III.9 and III.10.

         Table III.9--Manufacturer Markups by Manufacturer Type
------------------------------------------------------------------------
                                                           Estimated
                  Manufacturer types                      manufacturer
                                                             markup
------------------------------------------------------------------------
Inflatable Spa Manufacturer..........................               1.17
Non-Inflatable Spa Manufacturer......................               1.43
------------------------------------------------------------------------


            Table III.10--Portable Electric Spa MSP by Volume
------------------------------------------------------------------------
                                                             MSP for
       Efficiency level         MSP for non-inflatable   inflatable spas
                                       spas  ($)               ($)
------------------------------------------------------------------------
0.............................  92.69 * Vol 2/3.......  4.07 * Vol 2/3
1.............................  94.64 * Vol 2/3.......  5.50 * Vol 2/3
2.............................  98.54 * Vol 2/3.......  9.92 * Vol 2/3
3.............................  103.27 * Vol 2/3......  10.98 * Vol 2/3
4.............................  111.72 * Vol 2/3......  n/a
5.............................  120.99 * Vol 2/3......  n/a
6.............................  136.22 * Vol 2/3......  n/a
7.............................  154.10 * Vol 2/3......  n/a
8.............................  174.05 * Vol 2/3......  n/a
------------------------------------------------------------------------

    Those estimates describe a relationship between the marginal cost 
and the marginal efficiency of a PES as the PES is made progressively 
more efficient. The relationship is the basis of analyses described in 
sections D, E, F, G, and H of this NODA.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analyses and in the manufacturer impact analysis. At each step 
in the distribution channel, companies mark up the price of the product 
to cover business costs and profit margin.
1. Distribution Channels
    For this NODA, DOE has identified separate distribution channels 
into groups for hard-sided (standard, exercise, and combination) and 
inflatable spas. DOE based the market shares on confidential 
manufacturer interviews conducted under non-disclosure agreements. For 
PESs, the main parties in the distribution chains are shown in Table 
III.11.

                                       Table III.11--Distribution Channels
----------------------------------------------------------------------------------------------------------------
                                                                                         Market share  (%)
                                                                                 -------------------------------
                 Index                         Distribution channel agents          Hard-sided      Inflatable
                                                                                       spas            spas
----------------------------------------------------------------------------------------------------------------
1.....................................  Manufacturer [rarr] Wholesaler [rarr]                  5  ..............
                                         Spa Product Contractor [rarr] Consumer.
2.....................................  Manufacturer [rarr] Spa Product Retailer              60  ..............
                                         [rarr] Consumer.
3.....................................  Manufacturer [rarr] Big Box Retailer                  20              50
                                         [rarr] Consumer.
4.....................................  Manufacturer [rarr] Big Box Internet                  10              50
                                         Retailer [rarr] Consumer.
5.....................................  Manufacturer [rarr] Consumer (direct                   5  ..............
                                         sale).
----------------------------------------------------------------------------------------------------------------

2. Markups
    Baseline markups are applied to the price of products with baseline 
efficiency, while incremental markups are applied to the difference in 
price between baseline and higher-efficiency models (the incremental 
cost increase). The incremental markup is typically less than the 
baseline markup and is designed to maintain similar per-unit

[[Page 69096]]

operating profit before and after new or amended standards.\19\
---------------------------------------------------------------------------

    \19\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that it is unlikely that standards would 
lead to a sustainable increase in profitability in the long run in 
markets that are reasonable competitive.
---------------------------------------------------------------------------

    For this NODA, DOE did not develop PES-specific baseline and 
incremental markups for each actor in the distribution chain. Instead, 
based on supply chain similarities, DOE used the markups analysis 
developed for its Pool Heater energy conservation standard as a 
proxy.\20\ If DOE decides to pursue minimum efficiency standards for 
PESs, DOE will examine the PES supply chain in detail.
---------------------------------------------------------------------------

    \20\ Please see chapter 6 of the Technical Support Document: 
Energy Efficiency Program for Consumer Products and Commercial and 
Industrial Equipment: Consumer Pool Heaters. DOE. 2022. Available at 
https://www.regulations.gov/document/EERE-2021-BT-STD-0020-0005.
---------------------------------------------------------------------------

    DOE applied the following baseline and incremental markups for each 
step of the distribution channels listed in Table III.11, which are 
shown in Table III.12.

                  Table III.12--Agent Specific Markups
------------------------------------------------------------------------
                                             Baseline       Incremental
                  Agent                       markup          markup
------------------------------------------------------------------------
Wholesaler..............................            1.41            1.15
Spa Product Retailer....................            1.76            1.22
Big Box Retailer........................            1.31            1.07
Big Box Internet Retailer...............            1.31            1.07
Consumer (direct sale)..................            1.70            1.22
Spa Product Contractor..................            1.40            1.21
------------------------------------------------------------------------

    DOE requests information on the existence of any distribution 
channels other than the distribution channels listed in Table III.11 of 
this document. Further, DOE requests comment on whether the same 
distribution channels are applicable to installations of new and 
replacement PESs.
    DOE requests information on the fraction of shipments that are 
distributed through the channels shown in Table III.11 of this 
document.
3. Sales Taxes
    The sales tax represents state and local sales taxes that are 
applied to the consumer product price. The sales tax is a 
multiplicative factor that increases the consumer product price.
    DOE derived state and local taxes from data provided by the Sales 
Tax Clearinghouse.\21\ DOE derived population-weighted average tax 
values for each Census Region, as shown in Table III.13.\22\
---------------------------------------------------------------------------

    \21\ Sales Tax Clearinghouse Inc. State Sales Tax Rates Along 
with Combined Average City and County Rates. July 2021. Available at 
https://thestc.com/STrates.stm (Last accessed July 1, 2021.)
    \22\ See: https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf.

         Table III.13--Average Sales Tax Rates by Census Region
------------------------------------------------------------------------
                                                          Sales tax rate
         Census region                 Description              (%)
------------------------------------------------------------------------
1..............................  Northeast..............            6.90
2..............................  Midwest................            7.10
3..............................  South..................            7.36
4..............................  West...................            7.53
                                                         ---------------
    Population-weighted average  .......................            7.28
------------------------------------------------------------------------

4. Summary of Markups
    Table III.14 summarizes the markups at each stage in the 
distribution channel and provides the average sales tax to arrive at 
overall markups for the potential product classes considered in this 
analysis.

                    Table III.14--Summary of Markups
------------------------------------------------------------------------
                                             Baseline       Incremental
             Equipment class                  markup          markups
------------------------------------------------------------------------
Standard................................            1.75            1.27
Exercise................................            1.75            1.27
Combination.............................            1.75            1.27
Inflatable..............................            1.41            1.15
------------------------------------------------------------------------

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of PESs during stand-by operation at different 
efficiencies in representative U.S. single-family homes and to assess 
the energy savings potential of increased PES efficiency. The energy 
use analysis estimated the range of energy use of PESs in the field 
(i.e., as they are actually used by consumers). The energy use analysis 
provided the basis for other analyses DOE performed,

[[Page 69097]]

particularly assessments of the energy savings and the savings in 
consumer operating costs that could result from adoption of new 
standards.
    The energy use analysis uses the energy use models developed in the 
engineering analysis. The engineering analysis calculated the rate of 
heat loss from the spa as a function of the difference between the spa 
operating temperature and the ambient temperature. For this analysis, 
DOE developed distributions of binned hourly ambient temperature data 
using the dry-bulb temperature from the Typical Meteorological Year 3 
(``TMY3'') \23\ weather data as a function of climate zone, as 
described in section III.E.3 of this document. The annual energy use 
(``AEU'') in kilowatt hours per year (kWh/yr) for each climate zone, z, 
for all spas, other than combination spas, is expressed as:
---------------------------------------------------------------------------

    \23\ The TMY data sets hold hourly values of solar radiation and 
meteorological elements for a 1-year period. Their intended use is 
for computer simulations of solar energy conversion systems and 
building systems to facilitate performance comparisons of different 
system types, configurations, and locations in the United States and 
its territories. Because the values represent typical rather than 
extreme conditions, they are not suited for designing systems to 
meet the worst-case conditions occurring at a location.
[GRAPHIC] [TIFF OMITTED] TP17NO22.000

---------------------------------------------------------------------------
Where:

AEUz = the annual energy use, in kWh, of the spa installed in 
climate zone z; if there are any hours where Tamb exceeds Top, AEU 
is set equal to zero,
j = a bin index representing the ambient temperature at which the 
spa is operating,
wz,j = the probability of the monthly ambient temperature for 
climate zone z,
Sysnon-heat = the energy use of non-heat producing 
systems, i.e., water pumps, controls, etc., which does not scale 
with spa water volume,
z = climate zone,
Sysheat = a coefficient representing heating system energy use, 
which scales with spa water volume,
Vol = the spa's water volume,
Top = the spa's operating temperature (87 for exercise spas, and the 
exercise portion of combination spas, 102 for all other products) 
([deg]F),
TopTP = the spa's operating temperature as defined in the test 
procedure (102 [deg]F),
Tamb j = the ambient temperature ([deg]F),
TambTP = the national average ambient temperature, as defined in the 
test procedure (56 [deg]F), and
npyz = number of months of operation per year for PESs installed in 
climate zone z.

    DOE seeks comment on its energy use model. Specifically, DOE seeks 
comment on the energy use model for combination spas, where the Sysnon-
heat variable is normalized with volume of water portioned to the 
standard spa pool.
1. Consumer Sample
    DOE conducts its analysis in support of a potential new minimum 
energy conservation standard at the national level. This means that DOE 
must distribute consumers of PES products throughout the nation to 
capture variability of key inputs of PES operation. Specifically, for 
the annual energy use estimate, DOE had concern regarding distributing 
the population of PES installations across different regions to capture 
variability in outdoor (ambient) temperatures, which impact PES stand-
by energy consumption. This distribution of installations is referred 
to as the ``Consumer Sample.''
    For this NODA, DOE used the statistical household data available in 
the Energy Information Administration. Residential Energy Consumption 
Survey: 2015 (``RECS'').\24\ \25\ DOE used the data from RECS of 
households with a hot tub (RECBATH=1, FUELTUB=5, and TYPEHUQ=[2, 3]) to 
define the national spatial sample of PES installations over analysis 
regions defined by the intersection of census regions r and climate 
zones z. The climate zones are those defined in the RECS microdata. The 
percent distribution of consumers over census region/climate zone is 
provided in Table III.15.
---------------------------------------------------------------------------

    \24\ U.S. Department of Energy--Energy Information 
Administration. Residential Energy Consumption Survey: 2015 RECS 
Survey Data. 2015. Available at https://www.eia.gov/consumption/residential/data/2015/. (Last accessed August 5, 2021.)
    \25\ At the time of drafting, the Residential Energy Consumption 
Survey has released a new version based on 2020 inputs as a 
preliminary analysis. If DOE elects to pursue new minimum efficiency 
standards for PESs, DOE will update the consumer sample to the 2020 
version of RECS.

[[Page 69098]]



                                      Table III.15--Region and Climate Zone Probabilities of Hot Tub Installations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Climate zone (z)
                                                         -----------------------------------------------------------------------------------------------
                   Census region (r )                                     Hot-dry/ mixed-
                                                          Cold/very cold        dry          Hot-humid        Marine        Mixed-humid        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................            18.0             0.0             0.0             0.0             2.1            20.1
2.......................................................            16.5             0.0             0.0             0.0             6.4            22.9
3.......................................................             1.1             0.0             9.8             0.0            14.5            25.4
4.......................................................             8.8             9.0             0.7            13.1             0.0            31.6
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................            44.5             9.0            10.5            13.1            22.9           100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Typical Annual Operating Hours (npy)
    A key input to the energy use analysis is the number of annual 
operating hours of the product. Available data indicated that PESs 
operate in stand-by mode for the majority of hours that they are on. 
During the process of updating PES standards for California in 2018, 
CEC reported a duty cycle between 5,040 hours per year for inflatable 
spas (which are intended for seasonal use) and 8,760 hours per year for 
standard, exercise, and combination spas.\26\ DOE notes that these 
estimates may be typical for California, but are not represented in the 
existing data in RECS.
---------------------------------------------------------------------------

    \26\ Final Staff Report, Analysis of Efficiency Standards and 
Marking for Spas, 2018 Appliance Efficiency Rulemaking for Spas 
Docket Number 18-AAER-02 TN 222413. See: pg. 35, Available at 
https://efiling.energy.ca.gov/GetDocument.aspx?tn=222413&DocumentContentId=31256.
---------------------------------------------------------------------------

    The RECS data include a field (MONTUB) quantifying the number of 
months per year that the hot tub is considered in use. For this 
analysis, DOE considered the term ``in use'' to mean plugged-in and 
running. RECS does not specify which months the spa is in use, only the 
quantity of months. Therefore, for this NODA, DOE interpreted these 
data as that the spas in RECS will be operating during the warmest 
months of the year, as shown in Table III.16. For inflatable PES, DOE 
made the modeling assumption that they would be in operation up to a 
maximum of warmest 6 months of the year.

                                          Table III.16--Mapping of RECS Months of Operation to Calendar Months
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       Months of operation (npy)
                                             -----------------------------------------------------------------------------------------------------------
                                                 1        2        3        4        5        6        7        8        9        10       11       12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Jan.........................................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......        1
Feb.........................................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......        1        1
Mar.........................................  .......  .......  .......  .......  .......  .......  .......  .......        1        1        1        1
Apr.........................................  .......  .......  .......  .......  .......  .......        1        1        1        1        1        1
May.........................................  .......  .......  .......  .......        1        1        1        1        1        1        1        1
Jun.........................................  .......  .......        1        1        1        1        1        1        1        1        1        1
Jul.........................................        1        1        1        1        1        1        1        1        1        1        1        1
Aug.........................................  .......        1        1        1        1        1        1        1        1        1        1        1
Sep.........................................  .......  .......  .......        1        1        1        1        1        1        1        1        1
Oct.........................................  .......  .......  .......  .......  .......        1        1        1        1        1        1        1
Nov.........................................  .......  .......  .......  .......  .......  .......  .......        1        1        1        1        1
Dec.........................................  .......  .......  .......  .......  .......  .......  .......  .......  .......        1        1        1
Hours/year..................................      744    1,488    2,208    2,928    3,672    4,416    5,136    5,856    6,600    7,344    8,016    8,760
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE used RECS data to estimate the probability that a spa would be 
in use npy months per year as a function of climate zone. Given the 
sparsity of RECS data and to estimate the probabilities, DOE first 
binned the recorded value of MONTUB into 4 bins: 1 to 3 months per 
year, 4 to 6 months per year, 7 to 9 months per year, and 10 to 12 
months per year. Then DOE calculated the percent of RECS households 
falling in each bin for each climate zone. Finally, DOE used the 
modelling assumption that the 3 values in each bin are equally 
probable. The resulting distribution of the expected number of months 
per year (npy) are shown in Table III.17. Once the number of months of 
operation is known, the hours of operation are calculated as if the spa 
is in operation over the full month.

          Table III.17--Assignment of Climate Zone (z) by Months of Operation (npy) for Hard-Sided Spas
----------------------------------------------------------------------------------------------------------------
                                                  Hot-dry/ mixed-
     Months per year  (npy)       Cold/very cold        dry          Hot-humid        Marine        Mixed-humid
----------------------------------------------------------------------------------------------------------------
1...............................            0.07            0.06            0.09            0.06            0.04
2...............................            0.07            0.06            0.09            0.06            0.04
3...............................            0.07            0.06            0.09            0.06            0.04
4...............................            0.07            0.06            0.09            0.06            0.04
5...............................            0.06            0.06            0.05            0.05            0.06
6...............................            0.06            0.06            0.05            0.05            0.06
7...............................            0.06            0.06            0.05            0.05            0.06
8...............................            0.06            0.06            0.05            0.05            0.06
9...............................            0.12            0.13            0.11            0.14            0.15

[[Page 69099]]

 
10..............................            0.12            0.13            0.11            0.14            0.15
11..............................            0.12            0.13            0.11            0.14            0.15
12..............................            0.12            0.13            0.11            0.14            0.15
----------------------------------------------------------------------------------------------------------------


          Table III.18--Assignment of Climate Zone (z) by Months of Operation (npy) for Inflatable Spas
----------------------------------------------------------------------------------------------------------------
                                                  Hot-dry/ mixed-
     Months per year  (npy)       Cold/very cold        dry          Hot-humid        Marine        Mixed-humid
----------------------------------------------------------------------------------------------------------------
1...............................            0.17            0.16            0.19            0.17            0.13
2...............................            0.17            0.16            0.19            0.17            0.13
3...............................            0.17            0.16            0.19            0.17            0.13
4...............................            0.17            0.16            0.19            0.17            0.13
5...............................            0.16            0.18            0.12            0.15            0.23
6...............................            0.16            0.18            0.12            0.15            0.23
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on its approach to estimating annual operating 
hours. Additionally, DOE requests comment on its modeling assumption 
that PES would be operated during the warmest months of the year.
3. Ambient Temperature (Tamb)
    For the purposes of the NODA, DOE has made the modeling assumption 
that all PESs are installed outdoors and their energy use will be a 
function of the ambient temperature of the PESs' location. Losses to 
the external environment depend both on how many months per year the 
spa operates, and the distribution of ambient temperatures for those 
months in the given climate zone. To establish representative hourly 
temperatures for each of the PESs' installations as a function of 
climate zone (z), DOE calculated the probability distribution of 
temperatures, binned into 5 [deg]F segments, denoted j, based on TMY3 
data. For this NODA, DOE averaged over one TMY3 weather station for 
each state within a climate zone to determine a single hourly 
temperature series for each zone, z. For each value of npy, DOE binned 
the temperature time series for the appropriate months to create a 
distribution. The distribution was normalized by the total number of 
hours for that selection of months. The result is a distribution 
w(z,j,npy), which defines the percent of hours allocated to each bin j 
for climate zone z, with npy months of operation.\27\
---------------------------------------------------------------------------

    \27\ For the treatment of TMY3 data and mapping weather stations 
to regions, climate zones and states please see Appendix 7C or the 
Technical Support Document: Energy Efficiency Program for Consumer 
Products and Commercial and Industrial Equipment: Consumer Furnaces. 
U.S. Department of Energy. 2022. Available at https://www.regulations.gov/document/EERE-2014-BT-STD-0031-0320.
---------------------------------------------------------------------------

    An example of the probability distribution of ambient temperatures 
for PESs operating for 1 and 7 months a year installed in census region 
2 (Midwest), which covers climate zones: cold/very cold and mixed-
humid, are shown in Table III.19.

 Table III.19--Example Ambient Temperature Probabilities for Census Region 2 (Midwest), Where PESs Are Operated
                                           for 1 and 7 Months per Year
----------------------------------------------------------------------------------------------------------------
                                                                                       Probability (w)
                                                          Temperature bin  -------------------------------------
                Months of  operation npy                    [deg]F (j )       Cold/very cold
                                                                                   (z)          Mixed-humid (z)
----------------------------------------------------------------------------------------------------------------
1......................................................               62.5              0.095  .................
1......................................................               67.5              0.223              0.067
1......................................................               72.5              0.219              0.266
1......................................................               77.5              0.249              0.215
1......................................................               82.5              0.172              0.196
1......................................................               87.5              0.042              0.179
1......................................................               92.5  .................              0.077
                                                        --------------------------------------------------------
    Total..............................................  .................              1.000               1.00
7......................................................               32.5              0.003  .................
7......................................................               37.5              0.033              0.001
7......................................................               42.5              0.052              0.022
7......................................................               47.5              0.084              0.049
7......................................................               52.5              0.102              0.071
7......................................................               57.5              0.117              0.123
7......................................................               62.5              0.155              0.135
7......................................................               67.5              0.165              0.156
7......................................................               72.5              0.134              0.168
7......................................................               77.5              0.102              0.116
7......................................................               82.5              0.046              0.099
7......................................................               87.5              0.008              0.048
7......................................................               92.5  .................              0.012
                                                        --------------------------------------------------------

[[Page 69100]]

 
    Total..............................................  .................              1.000               1.00
----------------------------------------------------------------------------------------------------------------

    Representative values of the distribution are provided in Table 
III.19 for one month of operation and for seven months of operation per 
year. In general, the smaller the npy, the more usage is concentrated 
in warmer months.
    DOE requests comment on its approach to determining regional 
ambient temperatures.
4. Operating Water Temperature (Top)
    An input to the energy use analysis is the typical stand-by mode 
operating temperature of the spa. DOE understands that the typical 
operating temperature for any given spa would be determined by the 
personal preference of the consumer. Further, DOE understands that all 
potential product classes of PESs can be operated over a range of 
temperatures, with a recommended safe operating maximum temperature of 
104 [deg]F.\28\ DOE recognizes that this maximum temperature would not 
apply to exercise spas not capable of maintaining a minimum water 
temperature of 100 [deg]F. DOE was unable to find a credible source to 
create a lower bound, minimum stand-by operating temperature. In a 
guidance document to dutyholders of spas, the Health and Safety 
Executive determined a typical operating range of 30-40 [deg]C (86-104 
[deg]F).\29\
---------------------------------------------------------------------------

    \28\ U.S. Consumer Product Safety Commission, CPSC Warns of Hot 
Tub Temperatures, December 31, 1979. Available at www.cpsc.gov/Newsroom/News-Releases/1980/CPSC-Warns-Of-Hot-Tub-Temperatures (Last 
accessed: January 14, 2022.)
    \29\ The Control of Legionella and Other Infectious Agents in 
Spa-Pool Systems, Health and Safety Executive, 2017. Available at 
www.hse.gov.uk/pubns/priced/hsg282.pdf.
---------------------------------------------------------------------------

    For any future potential energy conservation standards for PESs, 
DOE tentatively concludes that the typical stand-by mode operating 
temperatures aligns with the minimum operating temperatures stated in 
APSP-14 2019, and that these temperatures are representative of the 
average. These values are shown in Table III.20.

    Table III.20--Typical Operating Water Temperature ([deg]F) by Spa
                   Potential Product Class Defined in
                              APSP-14 2019
------------------------------------------------------------------------
 Temp. [deg]F      Product class         Requirement         Reference
------------------------------------------------------------------------
102 2.        the exercise         maintaining a
                 portion of a         minimum water
                 combination spa.     temperature of 100
                                      [deg]F.
87 2.        the exercise         maintaining a
                 portion of a         minimum water
                 combination spa.     temperature of 100
                                      [deg]F.
102 2.        standard spa
                 portion of a
                 combination spa,
                 or inflatable spas.
------------------------------------------------------------------------

    For spas capable of maintaining a minimum water temperature of 100 
[deg]F, DOE assumed for modelling a single point temperature of 102 
[deg]F. For spas not capable of maintaining a minimum water temperature 
of 100 [deg]F, DOE assumed for modelling a single point temperature of 
87 [deg]F. DOE split the fraction of exercise, and the exercise portion 
of combination spas, where 30 percent of installations would operate at 
87 [deg]F and the remaining 70 percent of installations would operate 
at 102 [deg]F. DOE made the modeling assumption that the spa would be 
maintained at this temperature for the operating hours that the spa is 
in stand-by mode. However, in the field, DOE expects that spas will be 
operated over a range of temperatures to meet the comfort of the 
consumer.
    DOE requests data or comment on the typical operating temperature 
for exercise spas not capable of maintaining a minimum temperature of 
100 [deg]F. And DOE requests data or comment on the distribution of 
typical operating temperature for exercise spas not capable of 
maintaining a minimum temperature of 100 [deg]F.
    DOE requests data or comment on the distribution of typical 
operating temperature for spas capable of maintaining a minimum 
temperature of 100 [deg]F. And DOE requests data or comment on the 
distribution of typical operating temperature for exercise spas capable 
of maintaining a minimum temperature of 100 [deg]F.
5. Annual Energy Use Results

                  Table III.21--Average Annual Energy Use by Potential Product Class (kWh/Year)
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
                Efficiency level                 ---------------------------------------------------------------
                                                    Combination      Exercise       Inflatable       Standard
----------------------------------------------------------------------------------------------------------------
0...............................................           8,978           6,869             988           2,570
1...............................................           5,118           3,937             816           1,542
2...............................................           4,182           3,219             511           1,283
3...............................................           3,978           3,063             507           1,228
4...............................................           3,783           2,902             N/A           1,101
5...............................................           3,654           2,803             N/A           1,066
6...............................................           2,894           2,223             N/A             860

[[Page 69101]]

 
7...............................................           2,605           2,002             N/A             781
8...............................................           2,512           1,931             N/A             756
----------------------------------------------------------------------------------------------------------------

F. Life-Cycle Cost and Payback Period Analyses

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers defined in the consumer sample (see section 
III.E.1) of potential energy conservation standards for PESs. The 
effect of potential energy conservation standards on individual 
consumers usually involves a reduction in operating cost and an 
increase in purchase cost. In this NODA, DOE used the following two 
metrics to measure consumer impacts:
     The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain markups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
use, maintenance, and repair). To compute the operating costs, DOE 
discounts future operating costs to the time of purchase and sums them 
over the lifetime of the product.
     The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of PESs in the absence of new or 
amended energy conservation standards. In contrast, the PBP for a given 
efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each potential product 
class, DOE calculated the LCC and PBP for a nationally representative 
set of housing units. As stated previously, DOE developed household 
samples from the 2015 RECS. For each sample household, DOE determined 
the energy consumption for the PESs and the appropriate electricity 
price. By developing a representative sample of households, the 
analysis captured the variability in energy consumption and energy 
prices associated with the use of PESs.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP relies on 
a Monte Carlo simulation to incorporate uncertainty and variability 
into the analysis. The Monte Carlo simulations randomly sample input 
values from the probability distributions and PES's user samples. For 
this NODA the Monte Carlo approach was implemented in a computer 
simulation. The model calculated the LCC and PBP for products at each 
efficiency level for 10,000 housing units per simulation run. The 
analytical results include a distribution of 10,000 data points showing 
the range of LCC savings for a given efficiency level relative to the 
no-new-standards case efficiency distribution. In performing an 
iteration of the Monte Carlo simulation for a given consumer, product 
efficiency is chosen based on its probability. If the chosen product 
efficiency is greater than or equal to the efficiency of the standard 
level under consideration, the LCC and PBP calculation reveals that a 
consumer is not impacted by the standard level. By accounting for 
consumers who already purchase more-efficient products, DOE avoids 
overstating the potential benefits from increasing product efficiency.
    DOE calculated the LCC and PBP for all consumers of PESs as if each 
were to purchase a new product in the expected year of required 
compliance with new standards. Any new standards would apply to PESs 
manufactured 5 years after the date on which any new standard is 
published. (42 U.S.C. 6295(l)(2)) For purposes of its analysis, DOE 
used 2029 as the first year of compliance with any new standards for 
PESs.
    Table III.22 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion on the approach and data.
---------------------------------------------------------------------------

    \30\ Coughlin, K., Beraki, B. Residential Electricity Prices A 
Review of Data Sources and Estimation Methods. Energy Analysis and 
Environmental Impacts Division Lawrence Berkeley National Laboratory 
Energy Efficiency Standards Group. 2018. Available at https://eta-publications.lbl.gov/sites/default/files/lbnl-2001169.pdf.

Table III.22--Summary of Inputs and Methods for the LCC and PBP Analysis
                                    *
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Product Cost......................  Derived by multiplying MPCs by
                                     manufacturer and retailer markups
                                     and sales tax, as appropriate.
Installation Costs................  Assumed no change with efficiency
                                     level and not considered in the
                                     NODA.
Annual Energy Use.................  The total annual energy use
                                     multiplied by the hours per year.
                                     Average number of hours based on
                                     RECS 2015.
                                    Variability: Based on the Census
                                     region, and Climate Zone.
Energy Prices.....................  Electricity: Determined as per LBNL-
                                     2001169.\30\
Energy Price Trends...............  Based on AEO2022 price projections.
Repair and Maintenance Costs......  Assumed not to change with
                                     efficiency level.
Product Lifetime..................  Average: 10.5 years for hard-sided
                                     spas, 3.0 for inflatable spas.

[[Page 69102]]

 
Discount Rates....................  Approach involves identifying all
                                     possible debt or asset classes that
                                     might be used to purchase the
                                     considered appliances or might be
                                     affected indirectly. Primary data
                                     source was the Federal Reserve
                                     Board's Survey of Consumer
                                     Finances.
Compliance Date...................  2029.
------------------------------------------------------------------------

1. Inputs to the Life-Cycle Cost Model
    The LCC is the total consumer expense during the life of an 
appliance, including purchase expense and operating costs (including 
energy expenditures). DOE discounts future operating costs to the time 
of purchase and sums them over the lifetime of the product. DOE defines 
LCC by the following equation:
[GRAPHIC] [TIFF OMITTED] TP17NO22.001


Where:

LCC = life-cycle cost in dollars,
TIC = total installed cost in dollars,
[sum] = sum over product lifetime, from year 1 to year N,
N = lifetime of appliance in years,
OCt = operating cost in dollars in year t,
r = discount rate, and
t = year for which operating cost is being determined.

    DOE expresses dollar values in 2021$ for the LCC.
a. Inputs to Total Installed Cost
Product Costs
    To calculate consumer product costs, DOE multiplied the MSPs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products because DOE applies an 
incremental markup to the increase in MSP associated with higher-
efficiency products.
Future Product Costs
    Examination of historical price data for certain appliances and 
equipment that have had energy conservation standards indicates that 
the assumption of constant real prices and costs may overestimate long-
term trends in appliance and equipment prices in many cases. Economic 
literature and historical data suggest that the real costs of these 
products may, in fact, trend downward over time according to 
``learning'' or ``experience'' curves. Desroches et al. (2013) 
summarizes the data and literature currently available that is relevant 
to price projections for selected appliances and equipment.\31\ The 
extensive literature on the ``learning'' or ``experience'' curve 
phenomenon is typically based on observations in the manufacturing 
sector.\32\ In the experience curve method, the real cost of production 
is related to the cumulative production or ``experience'' with a 
manufactured product. This experience is usually measured in terms of 
cumulative production. Thus, as experience (production) accumulates, 
the cost of producing the next unit decreases.
---------------------------------------------------------------------------

    \31\ Desroches, Louis-Benoit, et al., ``Incorporating Experience 
Curves in Appliance Standards Analysis'', Energy Policy 52 (2013): 
402-416.
    \32\ In addition to Desroches (2013), see Weiss, M., Junginger, 
H.M., Patel, M.K., Blok, K., (2010a). A Review of Experience Curve 
Analyses for Energy Demand Technologies. Technological Forecasting & 
Social Change. 77:411-428.
---------------------------------------------------------------------------

    If DOE proceeds with new efficiency standards for PESs, DOE may 
derive the learning rate parameter for all PESs from the historical 
Producer Price Index (``PPI'') data for ``326191--Plastics Plumbing 
Fixture Manufacturing'' for the time period between 1993 and 2021 from 
the Bureau of Labor Statistics (``BLS'').33 34 If DOE 
determines that new efficiency standards for PESs are warranted, DOE 
will inflation-adjust the price indices calculation by dividing the PPI 
series by the implicit Gross Domestic Product price deflator for the 
same years.
---------------------------------------------------------------------------

    \33\ This U.S. industry consists of establishments primarily 
engaged in manufacturing plastics or fiberglass plumbing fixtures. 
Examples of products made by these establishments are plastics or 
fiberglass bathtubs, hot tubs, portable toilets, and shower stalls. 
See www.naics.com/naics-code-description/?code=326191
    \34\ Product series ID: NDU3261913261911, see more information 
at www.bls.gov/ppi.
---------------------------------------------------------------------------

    DOE requests comment on its proposed methodology to project future 
equipment prices.
    DOE requests information or data related to the past trends in 
production costs of PESs. Additionally, DOE requests data or 
information related to the cost of PES production over time.
Installation Costs
    As noted, inputs to the calculation of total install cost include 
the installation costs. Installation cost includes labor, overhead, and 
any miscellaneous materials and parts needed to install the product. As 
part of its Title 20 regulatory activities for PESs, CEC examined 
potentially available technologies that can be employed to improve the 
efficiency of PESs. CEC's report includes several technology options 
but states that improved insulation (in terms of improved insulation 
coverage, type, and quantity) within the tub walls and of the tub cover 
offer the greatest opportunity for improved efficiency. The report also 
mentions further attainable efficiency improvements through, but not 
limited to, improved spa cover design and improved pump and motor 
system design within in the spa itself.\35\ DOE tentatively finds that 
none of these technologies would impact the quantity of labor, 
overhead, or materials needed to install a PES if DOE were to adopt new 
energy efficiency standards. Based on these findings, DOE tentatively 
concludes that installation costs should not be included in any future 
life-cycle cost analysis.
---------------------------------------------------------------------------

    \35\ Final Staff Report, Analysis of Efficiency Standards and 
Marking for Spas, 2018 Appliance Efficiency Rulemaking for Spas 
Docket Number 18-AAER-02 TN 222413. Available at 
efiling.energy.ca.gov/GetDocument.aspx?tn=222413&DocumentContentId=31256.
---------------------------------------------------------------------------

    DOE requests comment on its decision to exclude installation costs 
from any future efficiency standard calculation.
    DOE requests data and details on the installation costs of PESs, 
and whether those costs vary by product type or any other factor 
affecting their efficiency.
b. Inputs to Operating Costs
Annual Energy Consumption
    For each sampled household, DOE determined the energy consumption 
for a PES at different efficiency levels using the approach described 
previously in section III.E of this document.
Electricity Prices
    Using data from EEI Typical Bills and Average Rates reports, DOE 
derived annual electricity prices in 2021 for all the census regions in 
RECS.36 37 DOE calculated electricity prices using the

[[Page 69103]]

methodology described in Coughlin and Beraki (2018), where for each 
purchase sampled, DOE assigned the average and marginal electricity 
price for the census region in which the PES is located.\38\ Because 
marginal electricity price captures more accurately the incremental 
costs or savings associated with a change in energy use relative to the 
consumer's bill in the reference case, it may provide a better 
representation of incremental change in consumer costs than average 
electricity prices. Therefore, DOE used average electricity prices to 
characterize the baseline energy level and marginal electricity prices 
to characterize the incremental change in energy costs associated with 
the other energy levels considered. The regional average and marginal 
electricity prices are shown in Table III.23.
---------------------------------------------------------------------------

    \36\ Edison Electric Institute, Typical Bills and Average Rates 
Report, Winter 2021, 2021.
    \37\ Edison Electric Institute, Typical Bills and Average Rates 
Report, Summer 2021, 2021.
    \38\ Coughlin, K., Beraki, B. Residential Electricity Prices A 
Review of Data Sources and Estimation Methods. Energy Analysis and 
Environmental Impacts Division Lawrence Berkeley National Laboratory 
Energy Efficiency Standards Group. 2018. Available at https://eta-publications.lbl.gov/sites/default/files/lbnl-2001169.pdf.

                         Table III.23--Regional Average and Marginal Electricity Prices
                                                 [$/kWh, 2021$]
----------------------------------------------------------------------------------------------------------------
                 Census region                           Geographic area           Average $/kWh  Marginal $/kWh
----------------------------------------------------------------------------------------------------------------
1.............................................  Northeast.......................          0.1834          0.1687
2.............................................  Midwest.........................          0.1380          0.1240
3.............................................  South...........................          0.1164          0.0994
4.............................................  West............................          0.1959          0.2145
----------------------------------------------------------------------------------------------------------------

Future Electricity Price Trends
    To arrive at prices in future years, DOE will multiply the 2021 
electricity prices by the forecast of annual average price changes for 
each census division from the most recent Energy Information 
Administration's Annual Energy Outlook (``AEO'').\39\ To estimate price 
trends after 2050, DOE maintained prices constant at 2050 levels.
---------------------------------------------------------------------------

    \39\ See www.eia.gov/outlooks/aeo.
---------------------------------------------------------------------------

    DOE requests comment on its use of AEO to project electricity 
prices into the future.
Maintenance and Repair Costs
    As noted, inputs to the calculation of operating expenses include 
repair and maintenance costs, among other factors. For this NODA, DOE 
made the modeling assumption that maintenance costs would not change 
with increased product stand-by efficiency. DOE understands that PES 
maintenance broadly falls into two categories: (1) maintaining water 
quality, and (2) the care and upkeep of the PES itself. DOE does not 
foresee a difference in costs to consumers in maintaining water quality 
under a new potential efficiency standard to stand-by power. Further, 
DOE understands the maintenance to the PES itself to be cleaning 
activities (i.e., cleaning of the filters, spa interior, spa exterior, 
and cover).\40\ Based on these understandings, DOE does not consider 
that these cleaning activities would cost the consumer more under a new 
potential energy conservation standard.
---------------------------------------------------------------------------

    \40\ See https://staging-na01-jacuzzi.demandware.net/on/demandware.static/-/Library-Sites-jacuzzi-shared-content/default/v44de813235d8b46eb8c84da693ec1bed8e8ec186/pdf-documents/Jacuzzi_Swim_Spa_Collection_Owners_Manual_English.pdf.
---------------------------------------------------------------------------

    However, DOE notes that the costs to repair more efficient PES 
mechanical systems and insulation may be greater in the case of a 
potential new energy conservation standard.
    DOE requests feedback and specific data on whether maintenance 
costs differ in comparison to the baseline maintenance costs for any of 
the specific efficiency improving technology options applicable to 
PESs.
    DOE requests comment on the typical repairs to PESs and how they 
may differ in the case of a potential new energy conservation standard.
2. Product Lifetime
    The product lifetime is the age at which a product is retired from 
service. Rather than use a single average value for the lifetime of 
PESs, DOE developed lifetime distributions to characterize the age, in 
years, when hard- and inflatable PESs will be retired from service. To 
model PES lifetimes, DOE assumed that the probability function for the 
annual survival of PESs would take the form of a Weibull distribution. 
A Weibull distribution is a probability distribution commonly used to 
measure failure rates.41 42
---------------------------------------------------------------------------

    \41\ For reference on the Weibull distribution, see sections 
1.3.6.6.8 and 8.4.1.3 of the NIST/SEMATECH e-Handbook of Statistical 
Methods. Available at www.itl.nist.gov/div898/handbook/.
    \42\ For an example methodology of how DOE approaches its 
survival calculation, see section 8.3.4 of chapter 8 of the 
Technical Support Document: Energy Efficiency Program For Consumer 
Products and Commercial and Industrial Equipment: Consumer Furnaces. 
DOE. 2022. Available at https://www.regulations.gov/document/EERE-2014-BT-STD-0031-0320.
---------------------------------------------------------------------------

a. Hard-Sided Spas
    DOE examined historical hard-sided spa installation data from PK 
Data, Inc. (``PK Data'') for the years from 2015 through 2020 and fit a 
Weibull distribution to these data with minimum and maximum lifetimes 
of 1 year and 30 years, respectively. This Weibull distribution yielded 
an average lifetime of 9.3 years.
b. Inflatable Spas
    DOE did not have equivalent data from which to estimate lifetimes 
for inflatable spas. As a result, DOE used the average lifetime on the 
design life from the CEC CASE report on PESs.\43\ To estimate the 
lifetime of inflatable spas, DOE fit a Weibull function based on the 
modeling assumptions of an average and maximum lifetimes of 3.0 and 5.0 
years, respectively.
---------------------------------------------------------------------------

    \43\ California Energy Commission. ``Final Staff Report--
Analysis of Efficiency Standards and Marking for Spas.'' February 2, 
2018.

[[Page 69104]]



                                        Table III.24--Lifetime Parameters
----------------------------------------------------------------------------------------------------------------
                                                       Value                            Weibull parameters
                                 -------------------------------------------------------------------------------
                                      Minimum         Average         Maximum
                                      (years)         (years)         (years)     Alpha  (scale)   Beta  (shape)
----------------------------------------------------------------------------------------------------------------
Hard-Sided Spas.................               1             9.3              30            9.91            1.85
Inflatable Spas.................               1             3.0               5            3.20            7.00
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on its lifetime analysis.
3. Rebound Effect
    DOE considered the possibility that some consumers may use a 
higher-efficiency PES more than a baseline one, thereby negating some 
or all the energy savings from the more-efficient product. Such a 
change in consumer behavior when operating costs decline is known as a 
(direct) rebound effect. Because the heating and pumping systems 
operation in ``stand-by mode'' also function when the PES is operated 
in ``active mode,'' an increase in PES usage due to a rebound effect 
would not impact any potential energy savings in a new standards case. 
For this reason, DOE tentatively finds that the rebound effect should 
not apply to PES stand-by power.
    DOE requests comment on its reasoning to not apply a rebound effect 
to PES stand-by power energy use.
4. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considers the projected 
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    To establish the fraction of PES purchases that exceed baseline 
equipment in terms of energy efficiency in the absence of potential new 
standards, DOE examined information provided by PHTA and U.S. Census 
data.
    The information provided by the PHTA shows the adoption of state 
level minimum efficiency requirements for PESs. These state level 
programs are related to different editions of APSP-14 2019, and this 
variation in state-level adoption creates a fractured regulatory 
environment where different states have different minimum energy 
efficiency requirements.
    For this NODA, DOE has made the simplified modeling assumption that 
all spas sold in states with an existing standard would adhere to APSP-
14 2019 and will be considered above the baseline in 2029. Further, DOE 
notes that the RECS 2015 data does not have state-level information 
from which to derive the relative spa owning probability for each 
state, and, for the purposes of estimating the efficiency distribution 
in the no-new standards case, DOE used state populations published in 
the 2021 Census.\44\ DOE acknowledges that this modeling assumption may 
overrepresent the state of national efficiency adoption to the 
detriment of national energy savings as states with less stringent 
standards are modeled with greater minimum efficiency levels. However, 
this potential overrepresentation may be balanced by those consumers in 
non-regulated states purchasing more efficient products. These 
populations are shown in Table III.25 and are held constant over time.
---------------------------------------------------------------------------

    \44\ Annual Estimates of the Resident Population for the United 
States, Regions, States, District of Columbia, and Puerto Rico: 
April 1, 2020 to July 1, 2021 (NST-EST2021-POP). U.S. Census Bureau, 
Population Division. December 2021.
---------------------------------------------------------------------------

    Using the projected distribution of efficiencies for PESs, DOE 
randomly assigned a product efficiency to each household drawn from the 
consumer sample. If a consumer is assigned a product efficiency that is 
greater than or equal to the efficiency under consideration, the 
consumer would not be affected by a standard at that efficiency level.

        Table III.25--PESs Minimum Efficiency Standards by State
------------------------------------------------------------------------
               State                      Standard          Population
------------------------------------------------------------------------
Arizona...........................  AZ Title 44.........       7,276,316
California........................  APSP 14-2019........      39,237,836
Connecticut.......................  CA Title 20 (2006)..       3,605,597
District of Columbia..............  APSP 14-2019........         670,050
Massachusetts.....................  APSP 14-2019........       6,984,723
New Jersey........................  APSP 14-2019........       9,267,130
Oregon............................  APSP 14-2019........       4,246,155
Pennsylvania......................  APSP 14-2019........      12,964,056
Rhode Island......................  APSP 14-2019........       1,095,610
Colorado..........................  APSP 14-2014........       5,812,069
Maryland..........................  APSP 14-2019........       6,165,129
Nevada............................  APSP 14-2019........       3,143,991
Vermont...........................  APSP 14-2014........         645,570
Washington........................  APSP 14-2014........       7,738,692
------------------------------------------------------------------------
Total Population Covered by Standards...................     108,852,924
U.S. Population.........................................     331,893,745
Fraction above Baseline.................................           32.8%
Fraction at Baseline....................................           67.2%
------------------------------------------------------------------------


[[Page 69105]]


                                       Table III.26--Distribution of Efficiencies in the No-New Standards Case (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Efficiency level
               Type                ---------------------------------------------------------------------------------------------------------------------
                                           0                1              2           3           4           5           6           7           8
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Spas..........................            67.2             32.8           0           0           0           0           0           0           0
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to households to estimate the present value of future operating cost 
savings in the year of compliance. DOE estimated a distribution of 
discount rates for PESs based on the opportunity cost of consumer 
funds.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\45\ The LCC analysis estimates net present value over the 
lifetime of the product. As a result, the appropriate discount rate 
will reflect the general opportunity cost of household funds, taking 
this time scale into account. Given the long-time horizon modeled in 
the LCC analysis, the application of a marginal interest rate 
associated with an initial source of funds is inaccurate. Regardless of 
the method of purchase, consumers are expected to continue to rebalance 
their debt and asset holdings over the LCC analysis period, based on 
the restrictions consumers face in their debt payment requirements and 
the relative size of the interest rates available on debts and assets. 
DOE estimates the aggregate impact of this rebalancing using the 
historical distribution of debts and assets.
---------------------------------------------------------------------------

    \45\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; and interest rates at 
which a consumer is able to borrow or lend. The implicit discount 
rate is not appropriate for the LCC analysis because it reflects a 
range of factors that influence consumer purchase decisions, rather 
than the opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes to approximate 
a consumer's opportunity cost of funds related to appliance energy cost 
savings. Then DOE estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's Survey of Consumer Finances (``SCF'') 
for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.\46\ Using 
the SCF and other sources, DOE developed a distribution of rates for 
each type of debt and asset by income group to represent the rates that 
may apply in the year in which new energy conservation standards would 
take effect. DOE assigned each sample household a specific discount 
rate drawn from one of the distributions. The average rate across all 
types of household debt and equity and income groups were then mapped 
to RECS income bins for the fraction of homes with portable electric 
spas.\47\
---------------------------------------------------------------------------

    \46\ Note that two older versions of the SCF are also available 
(1989 and 1992); these surveys are not used in this analysis because 
they do not provide all of the necessary types of data (e.g., credit 
card interest rates, etc.). DOE has tentatively determined that the 
time span covered by the eight surveys included is sufficiently 
representative of recent debt and equity shares and interest rates.
    \47\ A detailed discussion of DOE discount rate methodology for 
residential consumers can be found in the Technical Support 
Document: Energy Efficiency Program for Consumer Products and 
Commercial and Industrial Equipment: Consumer Furnaces. DOE, 2022, 
in chapters 8, and appendix 8H. Available at https://www.regulations.gov/document/EERE-2014-BT-STD-0031-0320.

                                           Table III.27--Mapping of SCF Income Groups to RECS 2015 Income Bin
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    RECS income bins                             1               2               3               4               5               6
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................          100.0%
2.......................................................            2.9%           86.6%           10.6%
3.......................................................                                          100.0%
4.......................................................                                           15.4%           84.6%
5.......................................................                                                          100.0%
6.......................................................                                                           13.4%           86.6%
7.......................................................                                                                           88.4%           11.6%
8.......................................................                                                                                           100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


           Table III.28--Average Real Effective Discount Rates
------------------------------------------------------------------------
            SCF income group                    Discount rate (%)
------------------------------------------------------------------------
1......................................  4.76
2......................................  4.99
3......................................  4.54
4......................................  3.84
5......................................  3.47
6......................................  3.23
Overall Average........................  4.29
------------------------------------------------------------------------
Source: Board of Governors of the Federal Reserve System, Survey of
  Consumer Finances (1995-2019).


[[Page 69106]]

6. Payback Period Analysis
    The PBP is the amount of time it takes the consumer to recover the 
additional installed cost of more-efficient products, compared to 
baseline products, through energy cost savings. PBP are expressed in 
years. PBP that exceed the life of the product mean that the increased 
total installed cost is not recovered in reduced operating expenses. 
The equation for PBP is:
[GRAPHIC] [TIFF OMITTED] TP17NO22.002

Where:

PBP = payback period in years,
[Delta]IC = difference in the total installed cost between the more 
efficient product (efficiency levels 1, 2, 3, etc.) and the baseline 
product, and
[Delta]OC = difference in first-year annual operating costs between 
the more efficient product and the baseline product.

    The data inputs to PBP are the total installed cost of the product 
to the consumer for each efficiency level and the annual (first year) 
operating costs for each efficiency level. As for the LCC, the inputs 
to the total installed cost are the product price and installation 
cost. The inputs to the operating costs are the annual energy and 
annual maintenance costs. The PBP uses the same inputs as does the LCC 
analysis, except that electricity price trends are not required. 
Because the PBP is a simple payback, the required electricity cost is 
only for the year in which a potential new energy conservation standard 
would take effect--in this case, 2029.
7. Consumer Results

                                                Table III.29--Standard Spas: Average LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2021$)                          Simple
                                                         ----------------------------------------------------------------     payback         Average
                    Efficiency level                                       First year's      Lifetime                         period         lifetime
                                                          Installed cost  operating cost  operating cost        LCC           (years)         (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................           8,507             352           2,648          11,644  ..............             8.8
1.......................................................           8,594             246           1,849          10,937             0.8             8.8
2.......................................................           8,852             207           1,555          10,918             2.4             8.8
3.......................................................           9,165             198           1,491          11,188             4.5             8.8
4.......................................................           9,725             179           1,345          11,638             7.8             8.8
5.......................................................          10,338             174           1,305          12,251            11.9             8.8
6.......................................................          11,347             142           1,068          13,088            16.5             8.8
7.......................................................          12,530             130             978          14,258            23.9             8.8
8.......................................................          13,851             126             949          15,636            34.6             8.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


Table III.30--Standard Spas: Average LCC Savings Relative to the No-New-
                 Standards Case Efficiency Distribution
------------------------------------------------------------------------
                                                              Average
                                                             savings--
            Efficiency level                % Consumers      impacted
                                           with net cost     consumers
                                                              (2021$)
------------------------------------------------------------------------
1.......................................             6.4           1,056
2.......................................            35.2             726
3.......................................            51.2             456
4.......................................            65.9               6
5.......................................            77.0            -607
6.......................................            84.6          -1,444
7.......................................            91.4          -2,614
8.......................................            96.1          -3,992
------------------------------------------------------------------------


                                                Table III.31--Exercise Spas: Average LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2021$)
                                                         ---------------------------------------------------------------- Simple payback      Average
                    Efficiency level                                       First year's      Lifetime                     period (years)     lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................          26,791             930           6,937          35,077  ..............             8.8
1.......................................................          27,063             631           4,715          33,144             0.9             8.8
2.......................................................          27,876             521           3,892          33,187             2.7             8.8
3.......................................................          28,862             497           3,715          34,060             5.1             8.8
4.......................................................          30,624             472           3,530          35,751             9.4             8.8
5.......................................................          32,556             457           3,417          37,696            14.6             8.8
6.......................................................          35,731             368           2,756          40,415            20.2             8.8
7.......................................................          39,459             335           2,504          44,132            29.7             8.8
8.......................................................          43,618             324           2,423          48,479            44.0             8.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 69107]]


Table III.32--Exercise Spas: Average LCC Savings Relative to the No-New-
                 Standards Case Efficiency Distribution
------------------------------------------------------------------------
                                                              Average
                                                             savings--
            Efficiency level                % Consumers      impacted
                                           with net cost     consumers
                                                              (2021$)
------------------------------------------------------------------------
1.......................................             7.9           2,889
2.......................................            39.5           1,889
3.......................................            55.8           1,017
4.......................................            72.1            -674
5.......................................            82.1          -2,619
6.......................................            88.5          -5,338
7.......................................            94.2          -9,055
8.......................................            97.5         -13,403
------------------------------------------------------------------------


                                               Table III.33--Combination Spas: Average LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2021$)                          Simple
                                                         ----------------------------------------------------------------     payback         Average
                    Efficiency level                                       First year's      Lifetime                         period         lifetime
                                                          Installed cost  operating cost  operating cost        LCC           (years)         (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................          34,175           1,218           9,093          44,965  ..............             8.8
1.......................................................          34,523             823           6,143          42,387             0.9             8.8
2.......................................................          35,560             678           5,064          42,412             2.7             8.8
3.......................................................          36,818             647           4,831          43,519             4.9             8.8
4.......................................................          39,065             617           4,609          45,690             9.1             8.8
5.......................................................          41,531             597           4,460          48,167            14.1             8.8
6.......................................................          45,581             481           3,592          51,611            19.5             8.8
7.......................................................          50,336             437           3,262          56,345            28.6             8.8
8.......................................................          55,642             422           3,155          61,888            42.2             8.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table III.34--Combination Spas: Average LCC Savings Relative to the No-
               New-Standards Case Efficiency Distribution
------------------------------------------------------------------------
                                                              Average
                                                             savings--
            Efficiency level                % Consumers      impacted
                                           with net cost     consumers
                                                              (2021$)
------------------------------------------------------------------------
1.......................................             7.5           3,835
2.......................................            38.4           2,553
3.......................................            54.2           1,446
4.......................................            70.6            -724
5.......................................            81.0          -3,201
6.......................................            88.2          -6,646
7.......................................            94.1         -11,379
8.......................................            97.4         -16,923
------------------------------------------------------------------------


                                               Table III.35--Inflatable Spas: Average LCC and PBP Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Average costs (2021$)                          Simple
                                                         ----------------------------------------------------------------     payback         Average
                    Efficiency level                                       First year's      Lifetime                         period         lifetime
                                                          Installed cost  operating cost  operating cost        LCC           (years)         (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................             244             147             424             780  ..............             3.0
1.......................................................             287             130             375             778             2.8             3.0
2.......................................................             549              83             238             924             5.5             3.0
3.......................................................             858              82             237           1,256            13.0             3.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 69108]]


 Table III.36--Inflatable Spas: Average LCC Savings Relative to the No-
      New-Standards Case Efficiency Distribution: Combination Spas
------------------------------------------------------------------------
                                                              Average
                                                             savings--
            Efficiency level                % Consumers      impacted
                                           with net cost     consumers
                                                              (2021$)
------------------------------------------------------------------------
1.......................................            38.7               3
2.......................................            84.6            -143
3.......................................            99.6            -475
------------------------------------------------------------------------

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\48\ 
The shipments model takes an accounting approach in tracking market 
shares of each potential product class and the vintage of units in the 
stock. Stock accounting uses product shipments as inputs to estimate 
the age distribution of in-service product stocks for all years. The 
age distribution of in-service product stocks is a key input to 
calculations of both the NES and NPV because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \48\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

1. Approach to Shipments and Stock Models
    DOE developed a national stock model to estimate annual shipments 
of products under potential energy efficiency standards. The model 
considers market segments as distinct inputs to projected shipments. 
DOE considered new home installations and replacements in existing 
households as the primary market segments for PESs.
    DOE's shipments model takes a stock accounting approach, tracking 
the vintage of units in the existing stock and expected housing stock 
trends. The stock accounting uses product shipments, a retirement 
function, and initial in-service product stock as inputs to develop an 
estimate of the age distribution of in-service product stock for all 
years. The age distribution of in-service product stock is a key input 
to calculations of both the NES and NPV because the operating costs for 
any year depend on the age distribution of the stock. The dependence of 
operating cost on the product age distribution occurs under a 
standards-case scenario that produces increasing efficiency over time, 
whereby older, less efficient units may have higher operating costs, 
while younger, more-efficient units have lower operating costs.
2. Initial Stock Estimates
a. Hard-Sided Spas Stock
    DOE used industry data from PK Data to estimate the initial stock 
for hard-sided spas.\49\ The PK Data were compiled from manufacturer 
data and other sources, including dealers, retailers, and consumers, 
and provide an estimated installation base for these spas. However, 
these data did not specify the fraction of installations that are 
standard, exercise, or combination spas. For this NODA, DOE has made 
the modeling assumptions that the fraction of the market for standard, 
exercise, and combination spas will follow the model count in 
MAEDbS.\50\ The stock breakdown based on the data received by DOE from 
PK Data and the weights from MAEDbS are shown in Table III.37.
---------------------------------------------------------------------------

    \49\ P.K. Data Inc. 2022 Hot Tube Market Data: Custom 
Compilation for Lawrence Berkeley National Laboratory (through 
2021). 2022. Alpharetta, GA. (Last accessed April 12, 2022.) 
Available at https://www.pkdata.com/reports-store.html#/.
    \50\ California Energy Commission's Modernized Appliance 
Efficiency Database System. Available at https://cacertappliances.energy.ca.gov/Login.aspx.

                        Table III.37--PK Data and DOE Stock Estimates of Hard-Sided Spas
                                                  [Units, 2020]
----------------------------------------------------------------------------------------------------------------
                                                   All spas  PK
                                                       data          Standard        Exercise       Combination
----------------------------------------------------------------------------------------------------------------
Fraction (%)....................................             100              85              12               3
Units (2020)....................................       5,454,117       4,635,999         654,494         163,624
----------------------------------------------------------------------------------------------------------------

    DOE requests comment on its stock ratios for hard-sided spas. 
Additionally, DOE seeks input on the market shares of standard, 
exercise, and combination spas.
b. Inflatable Spas Stock
    Inflatable spas (inflatable spas) are a relatively new product to 
the spa industry. As such, DOE was unable to find comprehensive, 
publicly available information to indicate either their shipments or 
existing stock. The CEC's ``2018 Appliance Efficiency Rulemaking for 
Spas, Final Staff Report'' projected California's stock of inflatable 
spas in 2020 to be 20,101 units. When this value is scaled by 
population, it produces a national stock estimate of 170,025 units, or 
approximately 3 percent of the stock of hard-sided Spas. For this NODA, 
DOE has made the modeling assumption that stock of inflatable spas in 
2020 was 170,025 units.

[[Page 69109]]



    Table III.38--Estimated Total PES Stocks, and Market Weight, 2020
                                 (Units)
------------------------------------------------------------------------
                                             Potential
         Potential product class           product class       Units
                                             weight, M
------------------------------------------------------------------------
Standard................................            82.5       4,635,999
Exercise................................            11.7         654,494
Combination.............................             2.9         163,624
Inflatable..............................             2.9         170,025
------------------------------------------------------------------------

    DOE seeks comment on its 2020 stock estimates for all spa types.
3. Product Saturations
    PES stocks are distributed nationally according to the number of 
single-family houses by census region, r, and climate zone, z, derived 
from RECS. These regional distributions are considered static over the 
analysis period. PES saturations are expressed as:
[GRAPHIC] [TIFF OMITTED] TP17NO22.003

Where:

Stockt = the total PES stock in 2022, i.e., 5,624,142 units,
i = an index indicating the location (r, z) of the spa,
S = the saturation (count) of spas per single-family household, and
H = total single-family households.
4. Determining Annual Spa Shipments
a. Initial Shipments
    Initial shipments for each potential product class of PESs are 
derived from the stock estimates in section III.G.2, as:
[GRAPHIC] [TIFF OMITTED] TP17NO22.004

Where:

Ships = total PES shipments for each product class,
M = PES market weight (see Table III.38), and
Lavg = the average potential product class's lifetime.
b. New Spa Shipments
    To estimate shipments of new purchases, DOE used projections of 
total housing stock from AEO2022 coupled with the estimated PES 
saturation. In other words, to project the shipments for new purchases 
for any given year, DOE multiplied the regional stock housing 
projections by the estimated saturation of PES. New shipments in each 
year are determined as:

Shipn (y) = N(y)S(y)

Where:

Shipn = new shipments,
y = year of analysis, and
N = new housing starts.
c. Spa Replacements
    Over time, some units will be retired and removed from stock, 
thereby 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 unit fails, DOE used a Weibull 
survival function based on a product lifetime distribution with an 
average lifetime of 9.3 years and 3.5 years for hard-sided, and 
inflatable spas, respectively. For a more complete discussion of 
lifetimes, refer to section III.F.2. Shipments for replacements are 
defined as:
[GRAPHIC] [TIFF OMITTED] TP17NO22.005

Where:

Shipr = shipments for replacement,
Lmax = product maximum lifetime, and
pr = a product's retirement probability.
d. Demolitions
    Demolitions refer to the destruction of in-service spas that are 
not replaced with new equipment. For this NODA, DOE defined the 
demolition rate as follows. For each location (r, z), and analysis 
year, y.

E = T-N
[GRAPHIC] [TIFF OMITTED] TP17NO22.006

Where:

[sigma] = the demolition rate, and
E = existing single-family house count, derived from RECS.
e. Product Lifetimes
    The methodology used to determine the distribution of PESs' 
lifetimes is discussed in section III.F.2.
f. Future Portable Electric Spa Shipments
    To project future shipments, DOE typically uses new housing starts 
projections from AEO as market drivers for products sold to the 
residential sector. For this NODA, DOE used the Single-Family 
Households trend from AEO2022 to drive future spa shipments.\51\
---------------------------------------------------------------------------

    \51\ U.S. Department of Energy--Energy Information 
Administration. Annual Energy Outlook 2022. 2022. Washington, DC. 
(Last accessed July 10, 2022.) See: Table 4. Residential Sector Key 
Indicators and Consumption--Case: Reference case Available at 
https://www.eia.gov/outlooks/aeo/data/browser/#/?id=4-AEO2022&cases=ref2022&sourcekey=0.
---------------------------------------------------------------------------

    DOE requests comment on its proposed use of future residential 
construction to project future shipments of PESs.
g. Calculating Shipments and Stock
    DOE calculates the total in-service stock of products by 
integrating historical shipments data starting from a specified year. 
The start year depends on the historical data available for each 
product, which for this NODA is based on data from PK Data in 2020. As 
units are added to the in-service stock, some older units retire and 
exit the stock. In this NODA, for each year in the analysis period from 
2029 through 2058, DOE calculated the shipments and stock as:

Stock(y) = Stock(y-1) (1-[sigma]) + Shipn(y), and
Ships(y) = Shipn(y) + Shipr(y) + [sigma]Stock(y-1).

    As the last unit shipped during the analysis period will survive 
beyond 2056, their presence was be accounted for as:

Stock(y) = Stock(y-1)-Shipr(y),
5. Impacts of Increased Product Costs on Shipments
    Because DOE's projections of shipments and national impacts from 
potential energy conservation standards consider a 30-year period, DOE 
needed to consider how price elasticity evolves in the years after a 
new standard takes effect in this NODA. Price elasticity is a factor 
that reflects the percent change in quantity purchased of a product

[[Page 69110]]

given a 1 percent change in price. DOE conducted a literature review 
and an analysis of appliance price and efficiency data to estimate the 
effects on product shipments from increases in product purchase price 
and product energy efficiency.
    Existing studies of appliance markets suggest that the demand for 
durable goods, such as appliances, is price-inelastic. Other 
information in the literature suggests that appliances are a normal 
good, such that rising incomes increase the demand for appliances, and 
that consumer behavior reflects relatively high implicit discount rates 
when comparing appliance prices and appliance operating costs.
    DOE considered the price elasticity developed above to be a short-
term value but was unable to identify sources specific to PESs that 
would be sufficient to model differences in short- and long-term price 
elasticities. Therefore, to estimate how the price elasticity changes 
through time, DOE relied on a study pertaining to automobiles.\52\ This 
study shows that the price elasticity of demand for automobiles changes 
in the years following a change in purchase price, a trend also 
observed in appliances and other durables.\53\ \54\ As time passes from 
the change in purchase price, the price elasticity becomes more 
inelastic until it reaches a terminal value around the tenth year after 
the price change. Table III.39 shows the relative change over time in 
the price elasticity of demand for automobiles. As shown in the table, 
DOE developed a time series of price elasticity for residential 
appliances based on the relative change over time in the price 
elasticity of demand for automobiles. For years not shown in the table, 
DOE performed a linear interpolation to obtain the price 
elasticity.\55\
---------------------------------------------------------------------------

    \52\ Saul H. Hymans, Gardner Ackley, and F. Thomas Juster. 
Consumer durable spending: Explanation and prediction. Brookings 
Papers on Economic Activity, 1970(2):173-206, 1970. (Last accessed 
August 28, 2021.) Available at https://www.jstor.org/stable/2534239.
    \53\ Philip Parker and Ramya Neelamegham. Price elasticity 
dynamics over the product life cycle: A study of consumer durables. 
Marketing Letters, 8(2):205-216, April 1997. (Last accessed August 
28, 2021.) Available at https://link.springer.com/article/10.1023%2FA%3A1007962520455.
    \54\ DOE relies on Hymens et al. (1970) for efficiency scaling 
factors because it provides the greatest detail out of all the 
available studies on price elasticity over time.
    \55\ For an example methodology of how DOE approaches its 
product price elasticity calculation, please see section 9.4 of 
chapter 9 of the Technical Support Document: Energy Efficiency 
Program for Consumer Products and Commercial and Industrial 
Equipment: Room Air Conditioners. DOE. 2022. Available at https://www.regulations.gov/document/EERE-2014-BT-STD-0059-0030.

                                 Table III.39--Change in Relative Price Elasticity Following a Change in Purchase Price
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Years following price change
                                                         -----------------------------------------------------------------------------------------------
                                                                 1               2               3               5              10              20
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in elasticity relative to first year.............            1.00            0.78            0.63            0.46            0.35            0.33
Price elasticity........................................           -0.45           -0.35           -0.28           -0.21           -0.16           -0.15
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. Results for 30-years of Shipment (2029-2058)

     Table III.40--PES Shipments for Select Years in the Absence of Potential New Standards (EL 0), (Units)
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
                      Year                       ---------------------------------------------------------------
                                                     Standard        Exercise       Combination     Inflatable
----------------------------------------------------------------------------------------------------------------
2029............................................         558,863          78,898          19,725          50,809
2030............................................         562,920          79,471          19,868          51,194
2035............................................         580,511          81,954          20,489          53,077
2040............................................         598,725          84,526          21,131          54,708
2045............................................         615,313          86,868          21,717          56,357
2050............................................         631,547          89,160          22,290          57,934
2055............................................         648,129          91,501          22,875          59,488
2058............................................         657,934          92,885          23,221          60,416
----------------------------------------------------------------------------------------------------------------


   Table III.41--PES Affected Stock for Select Years in the Absence of Potential New Standards (EL 0), (Units)
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
                      Year                       ---------------------------------------------------------------
                                                     Standard        Exercise       Combination     Inflatable
----------------------------------------------------------------------------------------------------------------
2027............................................         558,863          78,898          19,725          50,809
2030............................................       1,113,813         157,244          39,311         101,988
2035............................................       3,474,943         490,580         122,645         184,055
2040............................................       4,828,630         681,689         170,422         190,031
2045............................................       5,420,218         765,207         191,302         195,793
2050............................................       5,684,921         802,577         200,644         201,380
2055............................................       5,858,365         827,063         206,766         206,848
2060............................................       4,697,420         663,165         165,791          90,521
2065............................................       2,075,344         292,990          73,247               0
2070............................................         660,865          93,299          23,325               0
2075............................................         150,756          21,283           5,321               0
2080............................................          24,229           3,421             855               0

[[Page 69111]]

 
2085............................................           2,259             319              80               0
2090............................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new or amended standards at specific efficiency levels.\56\ 
(``Consumer'' in this context refers to consumers of the product being 
regulated.) DOE calculates the NES and NPV for the potential standard 
levels considered based on projections of annual product shipments, 
along with the annual energy consumption and total installed cost data 
from the energy use and LCC analyses. For the present analysis, DOE 
projected the energy savings, operating cost savings, product costs, 
and NPV of consumer benefits over the lifetime of PESs sold from 2029 
through 2058.
---------------------------------------------------------------------------

    \56\ The NIA accounts for impacts in the 50 states and 
Washington D.C.
---------------------------------------------------------------------------

    DOE evaluates the effects of potential new standards by comparing a 
case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
potential product class in the absence of new or amended energy 
conservation standards. For this projection, DOE considers historical 
trends in efficiency and various forces that are likely to affect the 
mix of efficiencies over time. DOE compares the no-new-standards case 
with projections characterizing the market for each potential product 
class if DOE adopted new or amended standards at specific energy 
efficiency levels (i.e., the ELs or standards cases) for that class. 
For the standards cases, DOE considers how a given standard would 
likely affect the market shares of products with efficiencies greater 
than the standard.
    Table III.42 summarizes the inputs and methods DOE used for the NIA 
analysis for the NODA. Discussion of these inputs and methods follows 
the table.

   Table III.42--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
                 Inputs                               Method
------------------------------------------------------------------------
Shipments..............................  Annual shipments from shipments
                                          model.
Modeled Compliance Date of Standard....  2029.
Efficiency Trends......................  No-new-standards case.
                                         Standards cases.
Annual Energy Consumption per Unit.....  Annual average values are a
                                          function of energy use at each
                                          EL.
Total Installed Cost per Unit..........  Annual average values are a
                                          function of cost at each EL.
Annual Energy Cost per Unit............  Annual weighted-average values
                                          as a function of the annual
                                          energy consumption per unit
                                          and energy prices.
Repair and Maintenance Cost per Unit...  Annual values do not change
                                          with efficiency level.
Energy Prices..........................  AEO2022 projections (to 2050),
                                          constant 2050 prices
                                          thereafter.
Energy Site-to-Primary and FFC           A time-series conversion factor
 Conversion.                              based on AEO2022.
Discount Rate..........................  3 percent and 7 percent.
Present Year...........................  2022.
------------------------------------------------------------------------

1. Products Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section III.F.4 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered potential product classes for the year of anticipated 
compliance with an amended or new standard.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2029). In this scenario, the market 
shares of products in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged.
    For this NODA, DOE's modeling assumed that the distribution of 
product efficiencies will remain constant over time.
    DOE requests comment on its modeling assumption that PES efficiency 
will remaining constant over time in the absence of potential new 
standards.
2. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered products between each potential standards 
case (EL) and the case with no new or amended energy conservation 
standards. DOE calculated the national energy consumption by 
multiplying the number of units (stock) of each product (by vintage or 
age) by the unit energy consumption (also by vintage). DOE calculated 
annual NES based on the difference in national energy consumption for 
the no-new-standards case and for each higher efficiency standard case. 
DOE estimated energy consumption and savings based on site energy and 
converted the electricity consumption and savings to primary energy 
(i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from AEO2022. 
Cumulative energy

[[Page 69112]]

savings are the sum of the NES for each year over the timeframe of the 
analysis.
    The following equation shows that DOE calculated annual NES as the 
difference between two projections: a no-new-standards case (without 
new standards) and a standards case. Positive values of NES represent 
energy savings (that is, they show that national annual energy 
consumption (``AEC'') under a standards case is less than in the no-
new-standards).

NESy = AECBase-AECSTD

Where:

NES = annual national energy savings (quads),
AEC = annual national energy consumption each year in quadrillion 
Btus (quads) summed over vintages of the product stock, and
y = year in the forecast.

    Cumulative energy savings are the sum of annual NES from products 
shipped between the years 2029 through 2058.
    DOE calculated the national annual site energy consumption by 
multiplying the number or stock of the product (by vintage) by its unit 
annual energy consumption (AEC; also, by vintage). National annual 
energy consumption is calculated using the following equation.

AECy = [Sigma] STOCKV x UECV

Where:

AEC = annual national energy consumption each year in quadrillion 
Btus (quads), summed over vintages of the product stock, STOCKV,
STOCKV = stock of product (millions of units) of vintage V that 
survive in the year for which DOE calculated annual energy 
consumption,
UECV = annual energy consumption of PESs in kilowatt-hours (kWh),
V = year in which the product was purchased as a new unit, and
y = year in the forecast.

    The stock of a product depends on annual shipments and the lifetime 
of the product. DOE projected product shipments under the no-new-
standards case and standards cases. To avoid including savings 
attributable to shipments displaced (units not purchased) because of 
standards, DOE used the projected standards-case shipments and, in 
turn, the standards-case stock, to calculate the national AEC for the 
no-new-standards.
a. Site-to-Power-Plant Energy Conversion Factors
    In determining annual NES, DOE initially considered the AEC at a 
residence (for electricity, the energy, expressed in kWh, consumed by a 
household). DOE then calculated primary (source) energy use from site 
energy consumption by applying a conversion factor to account for 
losses associated with the generation, transmission, and distribution 
of electricity. The site-to-source conversion factor is a 
multiplicative factor used to convert site energy consumption into 
primary, or source, energy consumption, expressed in quadrillion Btus 
(quads).
    DOE used annual site-to-power-plant conversion factors based on the 
version of the national energy modeling system (``NEMS'') \57\ that 
corresponds to AEO2022 \58\ The factors are marginal values, which 
represent the response of the national power system to incremental 
changes in consumption. For electricity, the conversion factors change 
over time in response to projected changes in generation sources (the 
types of power plants projected to provide electricity). There is not a 
specific end-use for PES in NEMS. As such, DOE applied the 
refrigeration end-use as a proxy, as the load profile of the equipment 
would be similar--equipment that when plugged-in and running does not 
respond to the cyclical dynamics of the electricity grid.
---------------------------------------------------------------------------

    \57\ For more information on NEMS, refer to the U.S. Department 
of Energy, Energy Information Administration documentation. A useful 
summary is National Energy Modeling System: An Overview 2000, DOE/
EIA-0581(2000), March 2000. EIA approves use of the name NEMS to 
describe only an official version of the model with no modification 
to code or data. Energy Information Administration. Annual Energy 
Outlook 2022 with Projections to 2050. 2022. Washington, DC (Last 
accessed July 20, 2022.) Available at https://www.eia.gov/outlooks/aeo/.
    \58\ See www.eia.gov/outlooks/aeo.
---------------------------------------------------------------------------

b. Full-Fuel Cycle Multipliers
    In 2011, DOE announced its intention to use FFC measures of energy 
use and greenhouse gas and other emissions in the NIA and emissions 
analyses included in future energy conservation standards rulemakings 
in response to the recommendations of a committee on ``Point-of-Use and 
Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards'' 
appointed by the National Academy of Sciences. 76 FR 51281 (Aug. 18, 
2011). After evaluating the approaches discussed in the August 18, 2011 
notice, DOE published a statement of amended policy in which DOE 
explained its determination that EIA's NEMS is the most appropriate 
tool for its FFC analysis and its intention to use NEMS for that 
purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-
sector, partial equilibrium model of the U.S. energy sector \59\ that 
EIA uses to prepare its AEO. The FFC factors incorporate losses in 
production, and delivery in the case of natural gas, (including 
fugitive emissions) and additional energy used to produce and deliver 
the various fuels used by power plants. The approach used for deriving 
FFC measures of energy use and emissions can be found in other DOE 
analysis.\60\
---------------------------------------------------------------------------

    \59\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/analysis/pdfpages/0581(2009)index.php (last 
accessed September 2022).
    \60\ An example methodology of deriving FFC measures can be 
found in the Technical Support Document: Energy Efficiency Program 
for Consumer Products and Commercial and Industrial Equipment: 
Commercial Water Heating Equipment, 2022, appendix 10D. Available at 
https://www.regulations.gov/document/EERE-2021-BT-STD-0027-0001.
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a discount factor to calculate the present value of costs and 
savings. DOE calculates net savings each year as the difference between 
the no-new-standards case and each standards case in terms of total 
savings in operating costs versus total increases in installed costs. 
DOE calculates operating cost savings over the lifetime of each product 
shipped during the projection period.
    The NPV is the value in the present of a time-series of costs and 
savings. The NPV is described by the equation:

NPV = PVS-PVC

Where:

PVS = present value of operating cost savings, and
    PVC = present value of increased total installed costs 
(including purchase price and installation costs).

    DOE determined the PVS and PVC according to the following 
expressions.

    PVS = [Sigma] OCSy x DFy
    PVC = [Sigma] TICy x DFy

Where:

OCS = total annual savings in operating costs each year summed over 
vintages of the product stock, STOCKV,
DF = discount factor in each year,
TIC = total annual increases in installed cost each year summed over 
vintages of the product stock, STOCKV and
y = year in the forecast.

    DOE calculated the total annual consumer savings in operating costs 
by multiplying the number or stock of the product (by vintage) by its 
per-unit operating cost savings (also by vintage). DOE calculated the 
total annual increases in consumer product price by multiplying the 
number or shipments of the product (by vintage) by its per-unit

[[Page 69113]]

increase in consumer cost (also by vintage). Total annual operating 
cost savings and total annual product price increases are calculated by 
the following equations.

    OCSy = [Sigma] STOCKy x UOCSv
    TICy = [Sigma] SHIPy x UTICy

Where:

OCSy = operating cost savings per unit in year y,
STOCKV = stock of products of vintage V that survive in the year for 
which DOE calculated annual energy consumption,
UOCSV = annual operating cost savings per unit of vintage V,
V = year in which the product was purchased as a new unit,
TICy = total increase in installed product cost in year y,
SHIPy = shipments of the product in year y, and
UTICy = annual per-unit increase in installed product cost in year 
y.

    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year and the 
projected price of the appropriate form of energy. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the projection of annual national-average residential energy 
price changes in the Reference Case from AEO2022, which has an end year 
of 2050. To estimate price trends after 2050, DOE maintained 
electricity prices constant at 2050 levels.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NODA, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE used these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\61\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \61\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed Aug 8, 2022).
---------------------------------------------------------------------------

    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year, and the 
projected price of the appropriate form of energy. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the projection of annual national-average residential energy 
price changes in the Reference Case from AEO2022, which has an end year 
of 2050.
4. Candidate Standards Levels
    In general, DOE typically evaluates potential new or amended 
standards for products and equipment by grouping individual efficiency 
levels for each class into candidate standard levels (``CSLs''). Use of 
CSLs allows DOE to identify and consider manufacturer cost interactions 
between the product classes and market cross elasticity from consumer 
purchasing decisions that may change when different standard levels are 
set, to the extent that there are such interactions.
    In the analysis conducted for this NODA, DOE analyzed the benefits 
and burdens of up to eight CSLs for PESs. DOE developed CSLs that 
combine efficiency levels for each analyzed product class. These CSLs 
were developed by directly mapping specific efficiency levels for each 
of the PES product classes analyzed by DOE. For this NODA, CSL 1 
represents PES efficiency at APSP-14 2019. And the remaining CSLs 
represent the increase in efficiency determined by each efficiency 
level in the engineering analysis. DOE notes that for inflatable spas 
DOE did not examine efficiency levels greater than EL 3, and mapped EL 
3 to the CSLs greater than 3.
    Table III.43 presents the CSLs and the corresponding efficiency 
levels that DOE has identified for potential new energy conservation 
standards for PESs.

                                Table III.43--Candidate Standard Levels for PESs
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
            Candidate standard level             ---------------------------------------------------------------
                                                    Combination      Exercise       Inflatable       Standard
----------------------------------------------------------------------------------------------------------------
1...............................................            EL 1            EL 1            EL 1            EL 1
2...............................................            EL 2            EL 2            EL 2            EL 2
3...............................................            EL 3            EL 3            EL 3            EL 3
4...............................................            EL 4            EL 4            EL 3            EL 4
5...............................................            EL 5            EL 5            EL 3            EL 5
6...............................................            EL 6            EL 6            EL 3            EL 6
7...............................................            EL 7            EL 7            EL 3            EL 7
8...............................................            EL 8            EL 8            EL 3            EL 8
----------------------------------------------------------------------------------------------------------------

5. Results for 30-years of Shipments (2029-2058)

                    Table III.44--Cumulative Full-Fuel Cycle National Energy Savings (Quads)
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
            Candidate standard level             ---------------------------------------------------------------
                                                    Combination      Exercise       Inflatable       Standard
----------------------------------------------------------------------------------------------------------------
1...............................................            0.11            0.35            0.01            0.86
2...............................................            0.14            0.43            0.02            1.09
3...............................................            0.15            0.46            0.03            1.14
4...............................................            0.16            0.48            0.03            1.26
5...............................................            0.16            0.50            0.03            1.31

[[Page 69114]]

 
6...............................................            0.19            0.57            0.03            1.48
7...............................................            0.20            0.60            0.03            1.56
8...............................................            0.20            0.61            0.03            1.59
----------------------------------------------------------------------------------------------------------------


                         Table III.45--Cumulative Consumer Net Present (Billion, 2021$)
----------------------------------------------------------------------------------------------------------------
                                                                             Spa type
            Candidate standard level             ---------------------------------------------------------------
                                                    Combination      Exercise       Inflatable       Standard
----------------------------------------------------------------------------------------------------------------
                                                3% Discount Rate
----------------------------------------------------------------------------------------------------------------
1...............................................           0.078           0.235           0.007           0.598
2...............................................           0.074           0.221           0.015           0.592
3...............................................           0.047           0.134           0.006           0.407
4...............................................          -0.007          -0.033           0.006           0.089
5...............................................          -0.068          -0.226           0.006          -0.333
6...............................................          -0.158          -0.507           0.006          -0.941
7...............................................          -0.277          -0.883           0.006          -1.769
8...............................................          -0.416          -1.318           0.006          -2.739
----------------------------------------------------------------------------------------------------------------
                                                7% Discount Rate
----------------------------------------------------------------------------------------------------------------
1...............................................           0.037           0.112           0.003           0.285
2...............................................           0.034           0.102           0.007           0.275
3...............................................           0.020           0.056           0.001           0.177
4...............................................          -0.008          -0.031           0.001           0.009
5...............................................          -0.040          -0.131           0.001          -0.211
6...............................................          -0.087          -0.279           0.001          -0.532
7...............................................          -0.149          -0.474           0.001          -0.962
8...............................................          -0.221          -0.700           0.001          -1.465
----------------------------------------------------------------------------------------------------------------

IV. Publication Participation

A. Submission of Comments

    DOE will accept comments, data, and information regarding this NODA 
no later than the date provided in the DATES section at the beginning 
of this NODA. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.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 itself 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. Otherwise, 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 www.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 www.regulations.gov cannot be claimed as CBI. Comments received 
through the website 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 www.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 www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.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 in 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. If you submit via postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No

[[Page 69115]]

telefacsimiles (``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, that are written in English, and that 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. Pursuant 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 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. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    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 information deemed to be 
exempt from public disclosure).

B. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this NODA, DOE is 
particularly interested in receiving comments and views of interested 
parties concerning the following issues:
    Issue 1: DOE requests comment on the previously description of the 
target technology and the scope of this product, including whether any 
modifications or additions are necessary to characterize this product.
    Issue 2: DOE requests comment on whether the distinction between 
categories of PESs, as described in section III.A.2 of this NODA, is 
significant enough to warrant the establishment of different product 
classes for each type.
    Issue 3: DOE requests comment on the above description of the PES 
manufacturers and the PES industry structure and whether any other 
details are necessary for characterizing the industry or for 
determining whether energy conservation standards for PESs might be 
justified.
    Issue 4: DOE requests information on any voluntary or mandatory 
test procedure and energy conservation standards for PESs that are not 
mentioned in section III.A.4 of this NODA.
    Issue 5: DOE seeks comment generally on the descriptions of 
relevant energy-saving technology options as described in section 
III.A.5 of this document, including whether any options require revised 
or additional details to characterize each option's effects on a PES's 
energy consumption.
    Issue 6: DOE seeks comment regarding use of additional or improved 
insulation as a technology option for PESs, and in particular what 
would limit adding further insulation to a PES.
    Issue 7: DOE seeks comment regarding use of improved covers as a 
technology option for PESs, and in particular what would limit further 
energy performance increases of PES covers.
    Issue 8: DOE seeks comment regarding use of improved sealing as a 
technology option for PESs, regarding whether air leakage is 
significant at PES locations other than the cover, and regarding what 
would limit further sealing improvements energy performance increases 
of PES covers.
    Issue 9: DOE seeks comment on the description of radiant barriers 
and data on the relative effects of radiant barriers when paired with 
different amounts of insulation and different thicknesses of adjacent 
air gaps.
    Issue 10: DOE requests comment regarding whether insulated ground 
covers warrant inclusion in the set of technology options for non-
inflatable PESs.
    Issue 11: DOE seeks comment and data on the degree to which two-
speed pump inefficiencies manifest as waste heat and to which that 
waste heat is absorbed by the portable electric spa's water.
    Issue 12: DOE requests comment regarding whether heat pumps would 
be likely to reduce energy consumption in PESs and, if so, quantified 
estimates of the effects of heat pump integration on both energy 
consumption and manufacturer production cost.
    Issue 13: DOE requests comment regarding the availability of heat 
pumps compatible with PESs.
    Issue 14: DOE seeks comment on its selection of baseline units, 
including whether any other units on the market would better represent 
the most consumptive spas available for purchase.
    Issue 15: DOE requests comment on the range of filtration system 
power demands in PESs as described in Table III.1. DOE also requests 
comment on any correlation between power demand and whether a spa uses 
a high horsepower two-speed pump or a lower horsepower dedicated 
circulation pump.
    Issue 16: DOE requests comment on its assumption of a standard 
shell shape as described in Table III.2, especially whether it is 
representative and whether DOE should consider certain shapes that 
result in maximum or minimum amounts of insulation.
    Issue 17: DOE requests data and comment on the effectiveness of 
radiant barriers in reducing the normalized average standby power of 
PES and on what factors make radiant barriers more or less effective.
    Issue 18: DOE requests data and comment on the extent to which spas 
lose heat through air convection out of unsealed regions of the spa and 
on the factors that affect heat losses due to sealing.
    Issue 19: DOE requests comment on the best way to quantify varying 
degrees of cover seal, including perimeter seal against the spa flange 
and hinge seal through the center of the cover.
    Issue 20: DOE requests comment on the method of analyzing thermal 
bridges as a single section of low R-value on the spa. Additionally, 
DOE requests information about techniques and models which are used in 
industry to predict spa performance.
    Issue 21: DOE requests comment and data on the discrepancy between 
heat loss through the wall where the components are housed and through 
other walls.
    Issue 22: DOE requests comment on any strategies for considering 
the effects of hot water traveling through plumbing on a spa's heat 
loss.
    Issue 23: DOE requests comment describing its appropriation of the 
scaling relationship defined in APSP-14 2019 and whether there are any 
other traits with which DOE might vary energy consumption.
    Issue 24: DOE requests comment on whether there are other factors 
DOE should consider in converting normalized average standby power 
values to reflect the proposed test procedure.
    Issue 25: DOE requests comment and data on typical markups from MPC 
to MSP and from MSP to final sale price.
    Issue 26: DOE requests comment and data characterizing the 
relationship between MPC and the size of a PES and whether there are 
better methods for

[[Page 69116]]

approximating the effects of size changes on MPC than the one described 
previously.
    Issue 27: DOE requests comment and data characterizing to what 
degree sales margins vary with spa size.
    Issue 28: DOE requests comment on the efficiency levels described 
in tables Table III.3 and Table III.4, including whether any do not 
align with expected effects design options associated with them, as 
described below in Table III.7 and Table III.8.
    Issue 29: DOE requests comment on the expected effects of DOE's 
proposed test procedure, as described in Table III.5 and Table III.6, 
including on whether its effects on normalized average standby power 
would be greater than or less than DOE's estimates.
    Issue 30: DOE requests comment and data regarding the design 
options and associated estimated costs described in tables Table III.7 
and Table III.8 of this NODA.
    Issue 31: DOE requests information on the existence of any 
distribution channels other than the distribution channels listed in 
Table III.11 of this document. Further, DOE requests comment on whether 
the same distribution channels are applicable to installations of new 
and replacement PES.
    Issue 32: DOE requests information on the fraction of shipments 
that are distributed through the channels shown in Table III.11 of this 
document.
    Issue 33: DOE seeks comment on its energy use model. Specifically, 
DOE seeks comment on the energy use model for combination spas, where 
the Sysnon-heat variable is normalized with volume of water portioned 
to the standard spa pool.
    Issue 34: DOE requests comment on its approach to estimating annual 
operating hours. Additionally, DOE requests comments on its modeling 
assumption that PES would be operated during the warmest months of the 
year.
    Issue 35: DOE requests comment on its approach to determining 
regional ambient temperatures.
    Issue 36: DOE requests data or comment on the typical operating 
temperature for exercise spas not capable of maintaining a minimum 
temperature of 100 [deg]F. And DOE requests data or comment on the 
distribution of typical operating temperature for exercise spas not 
capable of maintaining a minimum temperature of 100 [deg]F.
    Issue 37: DOE requests data or comment on the distribution of 
typical operating temperature for spas capable of maintaining a minimum 
temperature of 100 [deg]F. And DOE requests data or comment on the 
distribution of typical operating temperature for exercise spas capable 
of maintaining a minimum temperature of 100 [deg]F.
    Issue 38: DOE requests comment on its proposed methodology to 
project future equipment prices.
    Issue 39: DOE request information or data related to the past 
trends in production costs of PESs. Additionally, DOE request data or 
information related to the cost of PES production over time.
    Issue 40: DOE requests comment on its decision to exclude 
installation costs from any future efficiency standard calculation.
    Issue 41: DOE requests data and details on the installation costs 
of PESs, and whether those costs vary by product type or any other 
factor affecting their efficiency.
    Issue 42: DOE requests comment on its use of AEO to project 
electricity prices into the future.
    Issue 43: DOE requests feedback and specific data on whether 
maintenance costs differ in comparison to the baseline maintenance 
costs for any of the specific efficiency improving technology options 
applicable to PESs.
    Issue 44: DOE requests comment on the typical repairs to PESs and 
how they may differ in the case of a potential new energy conservation 
standard.
    Issue 45: DOE requests comment on its lifetime analysis.
    Issue 46: DOE requests comment on its reasoning and assumption to 
not apply a rebound effect to PES stand-by power energy use.
    Issue 47: DOE requests comment on its stock ratios for hard-sided 
spas. Additionally, DOE seeks input on the market shares of standard, 
exercise, and combination spas.
    Issue 48: DOE seeks comment on its assumed 2020 stock estimates for 
all spa types.
    Issue 49: DOE requests comment on its proposed use of future 
residential construction to project future shipments of PESs.
    Issue 50: DOE requests comment on its modeling assumption that PES 
efficiency will remaining constant over time in the absence of 
potential new standards.
    Issue 51: Additionally, DOE welcomes comments on other issues 
relevant to the conduct of this rulemaking that may not specifically be 
identified in this document.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this 
notification of data availability and request for comment.

Signing Authority

    This document of the Department of Energy was signed on October 31, 
2022, by Francisco Alejandro Moreno, Acting Assistant Secretary for 
Energy Efficiency and Renewable Energy, pursuant to delegated authority 
from the Secretary of Energy. That document with the original signature 
and date is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on November 2, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-24290 Filed 11-16-22; 8:45 am]
BILLING CODE 6450-01-P


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