Energy Conservation Program: Energy Conservation Standards for Dehumidifiers, 76510-76573 [2023-24106]

Download as PDF 76510 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules DEPARTMENT OF ENERGY 10 CFR Part 430 [EERE–2019–BT–STD–0043] RIN 1904–AE61 Energy Conservation Program: Energy Conservation Standards for Dehumidifiers Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking and announcement of public meeting. AGENCY: The Energy Policy and Conservation Act, as amended (‘‘EPCA’’), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including dehumidifiers. EPCA also requires the U.S. Department of Energy (‘‘DOE’’) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking (‘‘NOPR’’), DOE proposes amended energy conservation standards for dehumidifiers, and also announces a public meeting to receive comment on these proposed standards and associated analyses and results. DATES: Comments: DOE will accept comments, data, and information regarding this NOPR no later than January 5, 2024. Meeting: DOE will hold a public meeting via webinar on Thursday, December 14, 2023, from 1:00 p.m. to 4:00 p.m. See section VII of this document, ‘‘Public Participation,’’ for webinar registration information, participant instructions, and information about the capabilities available to webinar participants. Comments regarding the likely competitive impact of the proposed standard should be sent to the U.S. Department of Justice (‘‘DOJ’’) contact listed in the ADDRESSES section on or before December 6, 2023. ADDRESSES: Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at www.regulations.gov under docket number EERE–2019–BT–STD–0043. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE– 2019–BT–STD–0043, by any of the following methods: ddrumheller on DSK120RN23PROD with PROPOSALS3 SUMMARY: VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 Email: Dehumidifiers2019STD0043@ ee.doe.gov. Include docket number EERE–2019–BT–STD–0043 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, 1000 Independence Avenue SW, Washington, DC 20585–0121. 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. Docket: The docket for this activity, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure. The docket web page can be found at www.regulations.gov/docket/EERE2019-BT-STD-0043. The docket web page contains instructions on how to access all documents, including public comments, in the docket. See section VII of this document for information on how to submit comments through www.regulations.gov. EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standard. Interested persons may contact the Division at energy.standards@usdoj.gov on or before the date specified in the DATES section. Please indicate in the subject line of your email the title and docket number of this proposed rulemaking. FOR FURTHER INFORMATION CONTACT: Dr. Carl Shapiro, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 Technologies Office, EE–2J, 1000 Independence Avenue SW, Washington, DC 20585–0121. Email: ApplianceStandardsQuestions@ ee.doe.gov. Mr. Peter Cochran, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 586–9496. Email: Peter.Cochran@hq.doe.gov. For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, 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. Synopsis of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for Dehumidifiers III. General Discussion A. Scope of Coverage B. Test Procedure C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels D. Energy Savings 1. Determination of Savings 2. Significance of Savings E. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP) c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Product Classes 2. Technology Options a. Improved Compressor Efficiency b. Washable Air Filters c. Air-to-Air Heat Exchangers d. Alternative Refrigerants e. Low-Standby-Loss Electronic Controls f. Multi-Circuited Evaporator and Secondary Condenser Coils B. Screening Analysis 1. Screened-Out Technologies 2. Remaining Technologies C. Engineering Analysis 1. Efficiency Analysis E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules a. Baseline Efficiency b. Higher Efficiency Levels 2. Cost Analysis 3. Cost-Efficiency Results D. Markups Analysis E. Energy Use Analysis F. Life-Cycle Cost and Payback Period Analysis 1. Product Cost 2. Installation Cost 3. Annual Energy Consumption 4. Energy Prices 5. Maintenance and Repair Costs 6. Product Lifetime 7. Discount Rates 8. Energy Efficiency Distribution in the NoNew-Standards Case 9. Payback Period Analysis G. Shipments Analysis H. National Impact Analysis 1. Product Efficiency Trends 2. National Energy Savings 3. Net Present Value Analysis I. Consumer Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model and Key Inputs a. Manufacturer Production Costs b. Shipments Projections c. Capital and Product Conversion Costs d. Manufacturer Markup Scenarios 3. Manufacturer Interviews a. Increases in Chassis Size b. Refrigerant Regulation 4. Discussion of MIA Comments K. Emissions Analysis 1. Air Quality Regulations Incorporated in DOE’s Analysis L. Monetizing Emissions Impacts 1. Monetization of Greenhouse Gas Emissions a. Social Cost of Carbon b. Social Cost of Methane and Nitrous Oxide 2. Monetization of Other Emissions Impacts M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results and Conclusions A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. Direct Impacts on Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 b. Net Present Value of Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance of Products 5. Impact of Any Lessening of Competition 6. Need of the Nation To Conserve Energy 7. Other Factors 8. Summary of Economic Impacts C. Conclusion 1. Benefits and Burdens of TSLs Considered for Dehumidifier Standards 2. Annualized Benefits and Costs of the Proposed Standards D. Reporting, Certification, and Sampling Plan VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 B. Review Under the Regulatory Flexibility Act 1. Description of Reasons Why Action Is Being Considered 2. Objectives of, and Legal Basis for, Rule 3. Description on Estimated Number of Small Entities Regulated 4. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities 5. Duplication, Overlap, and Conflict With Other Rules and Regulations 6. Significant Alternatives to the Rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Information Quality VII. Public Participation A. Attendance at the Public Meeting B. Procedure for Submitting Prepared General Statements for Distribution C. Conduct of the Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Synopsis of the Proposed Rule The Energy Policy and Conservation Act, Public Law 94–163, as amended (‘‘EPCA’’),1 authorizes DOE to regulate 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. PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 76511 the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291– 6317) Title III, Part B of EPCA 2 established the Energy Conservation Program for Consumer Products Other Than Automobiles. (42 U.S.C. 6291– 6309) These products include dehumidifiers, the subject of this proposed rulemaking. Pursuant to 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)) EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)) In accordance with these and other statutory provisions discussed in this document, DOE analyzed the benefits and burdens of four trial standard levels (‘‘TSLs’’) for dehumidifiers. The TSLs and their associated benefits and burdens are discussed in detail in sections V.A through V.C of this document. As discussed in section V.C of this document, DOE has tentatively determined that TSL 3 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified. The proposed standards, which are expressed in Integrated Energy Factor (‘‘IEF’’), or the volume of water in liters (‘‘L’’) removed by a kilowatt hour (‘‘kWh’’) of energy, are shown in Table I.1. These proposed standards, if adopted, would apply to all dehumidifiers listed in Table I.1. manufactured in, or imported into, the United States starting on the date 3 years after the publication of the final rule for this proposed rulemaking. 2 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A. E:\FR\FM\06NOP3.SGM 06NOP3 76512 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS Minimum integrated energy factor (L/kWh) Portable dehumidifier product capacity (pints/day) 25.00 or less ...................................................................................................................................................................................... 25.01–50.00 ....................................................................................................................................................................................... 50.01 or more .................................................................................................................................................................................... Whole-home dehumidifier product case volume (cubic feet): 8.0 or less ................................................................................................................................................................................... More than 8.0 ............................................................................................................................................................................. A. Benefits and Costs to Consumers Table I.2 presents DOE’s evaluation of the economic impacts of the proposed standards on consumers of dehumidifiers, as measured by the average life-cycle cost (‘‘LCC’’) savings and the simple payback period (‘‘PBP’’).3 The average LCC savings are positive for all product classes, and the 1.70 2.01 3.10 2.22 3.81 PBP is less than the average lifetime of dehumidifiers, which is estimated to be 10 years for portable dehumidifiers and 12 years for whole-home dehumidifiers (see section IV.F.6 of this document). TABLE I.2—IMPACTS OF PROPOSED ENERGY CONSERVATION STANDARDS ON CONSUMERS OF DEHUMIDIFIERS Average LCC savings (2022$) Product class Portable dehumidifiers, ≤25.00 pints/day .......................................................................................................... Portable dehumidifiers, 25.01–50.00 pints/day ................................................................................................. Portable dehumidifiers, >50.00 pints per day ................................................................................................... Whole-home dehumidifiers, ≤8.0 cubic feet case volume ................................................................................ Whole-home dehumidifiers, >8.0 cubic feet case volume ................................................................................ DOE’s analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document. ddrumheller on DSK120RN23PROD with PROPOSALS3 B. Impact on Manufacturers 4 The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023–2057). Using a real discount rate of 8.4 percent, DOE estimates that the INPV for manufacturers of dehumidifiers in the case without amended standards is $158.3 million. Under the proposed standards, the change in INPV is estimated to range from ¥3.3 percent to ¥2.1 percent, which is approximately ¥$5.2 million to ¥$3.3 million. In order to bring products into compliance with amended standards, it is estimated that the industry would incur total conversion costs of $6.9 million. DOE’s analysis of the impacts of the proposed standards on manufacturers is 3 The average LCC savings refer to consumers that are affected by a standard and are measured relative to the efficiency distribution in the no-newstandards case, which depicts the market in the compliance year in the absence of new or amended standards (see section IV.F.9 of this document). The simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline product (see section IV.C of this document). 4 All monetary values in this document are expressed in 2022 dollars. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 described in section IV.J of this document. The analytic results of the manufacturer impact analysis (‘‘MIA’’) are presented in section V.B.2 of this document. C. National Benefits and Costs DOE’s analyses indicate that the proposed energy conservation standards for dehumidifiers would save a significant amount of energy. Relative to the case without amended standards, the lifetime energy savings for dehumidifiers purchased in the 30-year period that begins in the anticipated year of compliance with the amended standards (2028–2057) amount to 0.33 quadrillion British thermal units (‘‘Btu’’), or quads.5 This represents a savings of 5.8 percent relative to the energy use of these products in the case without amended standards (referred to as the ‘‘no-new-standards case’’). The cumulative net present value (‘‘NPV’’) of total consumer benefits of the proposed standards for 5 The quantity refers to full-fuel-cycle (‘‘FFC’’) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.2 of this document. 6 A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO2 are presented in short tons. PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 $42 81 31 56 146 Simple payback period (years) 0.9 0.6 4.8 6.4 5.7 dehumidifiers ranges from $1.26 billion (at a 7-percent discount rate) to $2.61 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating cost savings minus the estimated increased product costs for dehumidifiers purchased from 2028 through 2057. In addition, the proposed standards for dehumidifiers are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 6.94 million metric tons (‘‘Mt’’) 6 of carbon dioxide (‘‘CO2’’), 1.76 thousand tons of sulfur dioxide (‘‘SO2’’), 11.81 thousand tons of nitrogen oxides (‘‘NOX’’), 51.94 thousand tons of methane (‘‘CH4’’), 0.06 thousand tons of nitrous oxide (‘‘N2O’’), and 0.01 tons of mercury (‘‘Hg’’).7 DOE estimates the value of climate benefits from a reduction in greenhouse gases (‘‘GHG’’) using four different estimates of the social cost (‘‘SC’’) of 7 DOE calculated emissions reductions relative to the no-new-standards case, which reflects key assumptions in the Annual Energy Outlook 2023 (‘‘AEO2023’’). AEO2023 reflects, to the extent possible, laws and regulations adopted through mid-November 2022, including the Inflation Reduction Act. See section IV.K of this document for further discussion of AEO2023 assumptions that affect air pollutant emissions. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules CO2 (‘‘SC–CO2’’), the social cost of methane (‘‘SC–CH4’’), and the social cost of nitrous oxide (‘‘SC–N2O’’). Together these represent the social cost of GHG (‘‘SC–GHG’’). DOE used interim SC–GHG values (in terms of benefit per ton of GHG avoided) developed by the Interagency Working Group on the Social Cost of Greenhouse Gases (‘‘IWG’’).8 The derivation of these values is discussed in section IV.L of this document. For presentational purposes, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are estimated to be $0.40 billion. DOE does not have a single central SC– GHG point estimate and emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. DOE estimated the monetary health benefits of SO2 and NOX emissions reductions using benefit per ton estimates from the Environmental Protection Agency,9 as discussed in section IV.L of this document. DOE estimated the present value of the health benefits would be $0.33 billion using a 7-percent discount rate, and $0.74 billion using a 3-percent discount rate.10 DOE is currently only monetizing health benefits from changes in ambient fine particulate matter (PM2.5) concentrations from two precursors 76513 (SO2 and NOX), and from changes in ambient ozone from one precursor (for NOX), but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. Table I.3 summarizes the monetized economic benefits and costs expected to result from the proposed standards for dehumidifiers. There are other important unquantified effects, including certain unquantified climate benefits, unquantified public health benefits from the reduction of toxic air pollutants and other emissions, unquantified energy security benefits, and distributional effects, among others. TABLE I.3—SUMMARY OF MONETIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS [Trial Standard Level (‘‘TSL’’) 3] Billion ($2022) 3% discount rate Consumer Operating Cost Savings .................................................................................................................................................................................... Climate Benefits * ................................................................................................................................................................................................................ Health Benefits ** ................................................................................................................................................................................................................ Total Benefits † .................................................................................................................................................................................................................... Consumer Incremental Product Costs ‡ ............................................................................................................................................................................. Net Benefits ......................................................................................................................................................................................................................... Change in Producer Cashflow (INPV) ‡‡ ............................................................................................................................................................................ 2.75 0.40 0.74 3.89 0.14 3.75 (0.005)–(0.003) 7% discount rate ddrumheller on DSK120RN23PROD with PROPOSALS3 Consumer Operating Cost Savings .................................................................................................................................................................................... Climate Benefits * (3% discount rate) ................................................................................................................................................................................. Health Benefits ** ................................................................................................................................................................................................................ Total Benefits † .................................................................................................................................................................................................................... Consumer Incremental Product Costs ‡ ............................................................................................................................................................................. Net Benefits ......................................................................................................................................................................................................................... Change in Producer Cashflow (INPV) ‡‡ ............................................................................................................................................................................ 1.34 0.40 0.33 2.07 0.08 1.99 (0.005)–(0.003) Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028–2057. These results include consumer, climate, and health benefits that accrue after 2057 from the products shipped in 2028–2057. * Climate benefits are calculated using four different estimates of the social cost of carbon (SC–CO2), methane (SC–CH4), and nitrous oxide (SC–N2O) (model average at 2.5-percent, 3-percent, and 5-percent discount rates; 95th percentile at a 3-percent discount rate) (see section IV.L of this document). Together these represent the global SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total and net benefits include those consumer, climate, and health benefits that can be quantified and monetized. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC– GHG point estimate and emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. ‡ Costs include incremental equipment costs as well as installation costs. ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s national impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (i.e., manufacturer impact analysis, or ‘‘MIA’’). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Change in INPV is calculated using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For dehumidifiers, the change in INPV ranges from ¥$5 million to ¥$3 million. DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated INPV in the above table, drawing on the MIA explained further in section IV.J of this document to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the net benefit calculation for this proposed rule, the net benefits would range from $3.74 billion to $3.75 billion at 3-percent discount rate and would range from $1.98 billion to $1.99 billion at 7-percent discount rate. DOE seeks comment on this approach. 8 To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG. (‘‘February 2021 SC–GHG TSD’’). www.whitehouse.gov/wp- VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 content/uploads/2021/02/ TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf. 9 U.S. EPA. Estimating the Benefit per Ton of Reducing Directly Emitted PM2.5, PM2.5 Precursors and Ozone Precursors from 21 Sectors. Available at PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 www.epa.gov/benmap/estimating-benefit-tonreducing-pm25-precursors-21-sectors. 10 DOE estimates the economic value of these emissions reductions resulting from the considered trial standard levels (‘‘TSLs’’) for the purpose of complying with the requirements of Executive Order 12866. E:\FR\FM\06NOP3.SGM 06NOP3 76514 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the value of climate and health benefits of emission reductions, all annualized.11 The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of dehumidifiers shipped between 2028 and 2057. The benefits associated with reduced emissions achieved as a result of the proposed standards are also calculated based on the lifetime of dehumidifiers shipped between 2028 and 2057. Total benefits for both the 3percent and 7-percent cases are presented using the average GHG social costs with a 3-percent discount rate. Estimates of SC–GHG values are presented for all four discount rates in section V.B.6 of this document. Table I.4 presents the total estimated monetized benefits and costs associated with the proposed standard, expressed in terms of annualized values. The results under the primary estimate are as follows. Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NOX and SO2 emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated cost of the standards proposed in this rule is $8.55 million per year in increased equipment costs, while the estimated annual benefits are $142.04 million in reduced equipment operating costs, $22.85 million in climate benefits, and $34.54 million in health benefits. In this case, the net benefit would amount to $190.89 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards is $7.89 million per year in increased equipment costs, while the estimated annual benefits are $157.99 million in reduced operating costs, $22.85 million in climate benefits, and $42.30 million in health benefits. In this case, the net benefit would amount to $215.24 million per year. TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS [TSL 3] Million 2022$/year Primary estimate Low-net-benefits estimate High-net-benefits estimate 3% discount rate Consumer Operating Cost Savings ............................................................................. Climate Benefits * ......................................................................................................... Health Benefits ** ......................................................................................................... Total Benefits † ............................................................................................................ Consumer Incremental Product Costs ‡ ...................................................................... Net Benefits ................................................................................................................. Change in Producer Cashflow ..................................................................................... (INPV) ‡‡ ...................................................................................................................... 157.99 22.85 42.30 223.14 7.89 215.24 153.04 22.66 41.95 217.65 7.94 209.71 163.15 22.93 42.42 228.50 7.77 220.74 (0.5)–(0.3) (0.5)–(0.3) (0.5)–(0.3) 142.04 22.85 34.54 199.44 8.55 190.89 (0.5)–(0.3) 138.10 22.66 34.31 195.07 8.58 186.49 (0.5)–(0.3) 146.50 22.93 34.64 204.06 8.44 195.62 (0.5)–(0.3) 7% discount rate ddrumheller on DSK120RN23PROD with PROPOSALS3 Consumer Operating Cost Savings ............................................................................. Climate Benefits * (3% discount rate) .......................................................................... Health Benefits ** ......................................................................................................... Total Benefits † ............................................................................................................ Consumer Incremental Product Costs ‡ ...................................................................... Net Benefits ................................................................................................................. Change in Producer Cashflow (INPV) ‡‡ .................................................................... Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028–2057. These results include consumer, climate, and health benefits that accrue after 2057 from the products shipped in 2028¥2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO 2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate and emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate. ‡‡ Costs include incremental equipment costs as well as installation costs. 11 To convert the time series of costs and benefits into annualized values, DOE calculated a present value in 2023, the year used for discounting the NPV of total consumer costs and savings. For the VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 benefits, DOE calculated a present value associated with each year’s shipments in the year in which the shipments occur (e.g., 2030), and then discounted the present value from each year to 2023. Using the PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 76515 ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s national impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (i.e., manufacturer impact analysis, or ‘‘MIA’’). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For dehumidifiers, the annualized change in INPV ranges from ¥$0.5 million to ¥$0.3 million. DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would range from $190.4 million to $190.6 million at 7-percent discount rate. DOE seeks comment on this approach. ddrumheller on DSK120RN23PROD with PROPOSALS3 DOE’s analysis of the national impacts of the proposed standards is described in sections IV.H, IV.K, and IV.L of this document. D. Conclusion DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, with regards to technological feasibility, products achieving these standard levels are already commercially available for all product classes covered by this proposal. As for economic justification, DOE’s analysis shows that the benefits of the proposed standard exceed, to a great extent, the burdens of the proposed standards. Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reduction benefits, and a 3percent discount rate case for GHG social costs, the estimated cost of the proposed standards for dehumidifiers is $8.55 million per year in increased product costs, while the estimated annual benefits are $142.04 million in reduced product operating costs, $22.85 million in climate benefits, and $34.54 million in health benefits. The net benefit amounts to $190.89 million per year. 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.12 For example, some covered products and equipment have substantial energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more 12 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). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 pronounced than products with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a caseby-case basis. As previously mentioned, the standards are projected to result in estimated national energy savings of 0.33 quad full-fuel-cycle (‘‘FFC’’), the equivalent of the primary annual energy use of 3.5 million homes. In addition, they are projected to reduce CO2 emissions by 6.94 Mt, SO2 emissions by 1.76 thousand tons, NOX emissions by 11.81 thousand tons, CH4 emissions by 51.94 thousand tons, N2O emissions by 0.06 thousand tons, Hg emissions by 0.01 tons. Based on these findings, DOE has initially determined the energy savings from the proposed standard levels are ‘‘significant’’ within the meaning of 42 U.S.C. 6295(o)(3)(B). The basis for these tentative conclusions is detailed in the remainder of this document and the accompanying technical support document (‘‘TSD’’). DOE also considered more stringent energy efficiency levels as potential standards and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of more stringent energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this document and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this document that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. II. Introduction The following section briefly discusses the statutory authority underlying this proposed rule as well as some of the relevant historical PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 background related to the establishment of standards for dehumidifiers. A. Authority EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part B of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include dehumidifiers, the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed initial energy conservation standards for these products. Id. EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296). Federal energy efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)–(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (42 U.S.C. 6297(d)) E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76516 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedures for dehumidifiers appear at title 10 of the Code of Federal Regulations (‘‘CFR’’) part 430, subpart B, appendix X1. DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including dehumidifiers. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a standard: (1) for certain products, including dehumidifiers, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)–(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors: (1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard; (2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard; (3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered products likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy and water conservation; and (7) Other factors the Secretary of Energy (‘‘Secretary’’) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) 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 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)) DOE’s current test procedures for dehumidifiers address standby mode and off mode energy use. In this proposed rulemaking, DOE intends to incorporate such energy use into any amended energy conservation standards that it may adopt. B. Background 1. Current Standards In a final rule published on June 13, 2016 (‘‘June 2016 Final Rule’’), DOE prescribed the current energy conservation standards for dehumidifiers manufactured on and after June 13, 2019. 81 FR 38338. These standards are set forth in DOE’s regulations at 10 CFR 430.32(v)(2). TABLE II.1—FEDERAL ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS Minimum integrated energy factor (L/kWh) Portable dehumidifier product capacity (pints/day) 25.00 or less ...................................................................................................................................................................................... VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 1.30 76517 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE II.1—FEDERAL ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS—Continued Minimum integrated energy factor (L/kWh) Portable dehumidifier product capacity (pints/day) 25.01–50.00 ....................................................................................................................................................................................... 50.01 or more .................................................................................................................................................................................... 1.60 2.80 Whole-home dehumidifier product case volume (cubic feet) 8.0 or less .......................................................................................................................................................................................... More than 8.0 .................................................................................................................................................................................... 2. History of Standards Rulemaking for Dehumidifiers On June 4, 2021, DOE published a Request for Information (‘‘June 2021 RFI’’) in the Federal Register to collect data and information to inform its decision, consistent with its obligations under EPCA, as to whether the Department should proceed with an energy conservation standards rulemaking for an amended energy conservation standard for dehumidifiers. 86 FR 29964, 29965. DOE published a notice of public meeting and availability of the 1.77 2.41 preliminary TSD on June 22, 2022 (‘‘June 2022 Preliminary Analysis’’). 87 FR 37240. DOE received comments in response to the June 2022 Preliminary Analysis from the interested parties listed in Table II.2. TABLE II.2—JUNE 2022 PRELIMINARY ANALYSIS WRITTEN COMMENTS Abbreviation Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, National Consumer Law Center, Natural Resources Defense Council, Northwest Energy Efficiency Alliance. Association of Home Appliance Manufacturers ............................................................................. Madison Indoor Air Quality ............................................................................................................ Joint Commenters ... 21 Efficiency Organizations. AHAM ...................... MIAQ ....................... 22 20 Trade Association. Manufacturer. A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.13 To the extent that interested parties have provided written comments that are substantively consistent with any oral comments provided during the July 19, 2022, public meeting, DOE cites the written comments throughout this document. Any oral comments provided during the webinar that are not substantively addressed by written comments are summarized and cited separately throughout this document. ddrumheller on DSK120RN23PROD with PROPOSALS3 Comment number in the docket Commenter(s) 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 stages for an energy conservation standards rulemaking. Section 6(a)(2) of appendix A states that if the Department determines it is appropriate to proceed 13 The parenthetical reference provides a reference for information located in the docket of DOE’s rulemaking to develop energy conservation standards for dehumidifiers (Docket No. EERE– 2019–BT–STD–0043, which is maintained at www.regulations.gov). The references are arranged as follows: (commenter name, comment docket ID number, page of that document). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 with a rulemaking, the preliminary stages of a rulemaking to issue or amend an energy conservation standard that DOE will undertake will include a framework document and preliminary analysis, or an advance notice of proposed rulemaking. While DOE published a preliminary analysis for this proposed rulemaking, DOE did not publish a framework document in conjunction with the preliminary analysis. 87 FR 37240. DOE notes, however, chapter 2 of the June 2022 Preliminary TSD that accompanied the June 2022 Preliminary Analysis— entitled Analytical Framework, Comments from Interested Parties, and DOE Responses—describes the general analytical framework that DOE uses in evaluating and developing potential amended energy conservation standards. DOE also previously published the June 2021 RFI, in which DOE identified and sought comment on the analyses that would be conducted in support of an energy conservation standards rulemaking for dehumidifiers. 86 FR 29964, 29965–29966. As such, publication of a separate framework document would be largely redundant of previously published documents. Section 6(f)(2) of appendix A specifies that the length of the public comment PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 Commenter type period for a NOPR will vary depending upon the circumstances of the particular proposed rulemaking, but will not be less than 75 calendar days. For this NOPR, DOE has opted to instead provide a 60-day comment period. DOE requested comment in the June 2021 RFI on the technical and economic analyses and provided stakeholders a 45-day comment period, after granting a 15-day comment period extension. 86 FR 29964 and 86 FR 34639. Additionally, DOE provided a 60-day comment period for the June 2022 Preliminary Analysis. 87 FR 37240, 37241. The analytical methods used for this NOPR are similar to those used in previous rulemaking documents. As such, DOE believes a 60day comment period is appropriate and will provide interested parties with a meaningful opportunity to comment on the proposed rule. Section 8(d)(1) of appendix A specifies that test procedure rulemakings establishing methodologies used to evaluate proposed energy conservation standards will be finalized prior to publication of a NOPR proposing new or amended energy conservation standards. Additionally, new test procedures and amended test procedures that impact measured energy use or efficiency will be finalized at least 180 days prior to the close of the E:\FR\FM\06NOP3.SGM 06NOP3 76518 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules comment period for (1) a NOPR proposing new or amended energy conservation standards or (2) a notice of proposed determination that standards do not need to be amended. In the dehumidifier test procedure final rule published on July 26, 2023, (July 2023 Test Procedure Final Rule), DOE amended the test procedures for dehumidifiers. 88 FR 48035. DOE determined that the amendments adopted will not alter (i.e., will not impact) the measured efficiency of dehumidifiers. Id. As such, the requirement that the amended test procedure be finalized at least 180 days prior to the close of the comment period for this NOPR does not apply. ddrumheller on DSK120RN23PROD with PROPOSALS3 III. General Discussion DOE developed this proposal after considering oral and written comments, data, and information from interested parties that represent a variety of interests. The following discussion addresses issues raised by these commenters. A. Scope of Coverage This NOPR covers those consumer products that meet the definition of ‘‘dehumidifier’’ as codified at 10 CFR 430.2. EPCA defines a dehumidifier as a product that is a self-contained, electrically operated, and mechanically encased assembly, consisting of a refrigerated surface (evaporator) that condenses moisture from the atmosphere, a refrigerating system with an electric motor, an air-circulating fan, and a means for collecting or disposing of the condensate. (42 U.S.C. 6291(34)) In a final rule published on July 31, 2015 (‘‘July 2015 Test Procedure Final Rule’’), DOE clarified that this definition of a dehumidifier, codified at 10 CFR 430.2, does not apply to portable air conditioners, room air conditioners, or packaged terminal air conditioners. 80 FR 45802, 45804–45805 (July 31, 2015). DOE also added definitions for portable dehumidifiers and whole-home dehumidifiers to 10 CFR 430.2. Portable dehumidifiers are designed to operate within the dehumidified space without ducting attached, although ducting may be attached optionally. Whole-home dehumidifiers are designed to be installed with inlet ducting for return process air and outlet ducting that supplies dehumidified process air to one or more locations in the dehumidified space. 10 CFR 430.2 DOE further established that dehumidifiers that are able to operate as both a portable and whole-home dehumidifier would be tested and rated for both configurations. 80 FR 45802, 45805– VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 C. Technological Feasibility 2. Maximum Technologically Feasible Levels When DOE proposes to adopt a new or amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (‘‘max-tech’’) improvements in energy efficiency for dehumidifiers, using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this proposed rulemaking are described in section IV.C.1.b of this document and in chapter 5 of the NOPR TSD. 1. General D. Energy Savings 45806. See section IV.A.1 of this document for discussion of the product classes analyzed in this NOPR. B. Test Procedure EPCA sets forth generally applicable criteria and procedures for DOE’s adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures to certify to DOE that their product complies with energy conservation standards and to quantify the efficiency of their product. DOE’s current energy conservation standards for dehumidifiers are expressed in terms of IEF in L/kWh. 10 CFR 430.32(v)(2) and 10 CFR part 430, subpart B, appendix X1. In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the proposed rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible. See sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430 subpart C (‘‘appendix A’’). After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; (3) adverse impacts on health or safety; and (4) unique pathway proprietary technologies. See sections 6(b)(3)(ii)–(v) and 7(b)(2)–(5) of appendix A. Section IV.B of this document discusses the results of the screening analysis for dehumidifiers, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this proposed rulemaking. For further details on the screening analysis for this proposed rulemaking, see chapter 4 of the NOPR TSD. PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 1. Determination of Savings For each trial standard level (‘‘TSL’’), DOE projected energy savings from application of the TSL to dehumidifiers purchased in the 30-year period that begins in the year of compliance with the proposed standards (2028–2057).14 The savings are measured over the entire lifetime of dehumidifiers purchased in the previous 30-year period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the nonew-standards case. The no-newstandards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of amended energy conservation standards. DOE used its national impact analysis (‘‘NIA’’) spreadsheet model to estimate national energy savings (‘‘NES’’) from potential amended or new standards for dehumidifiers. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. DOE also calculates NES in terms of FFC energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary 14 Each TSL is composed of specific efficiency levels for each product class. The TSLs considered for this NOPR are described in section V.A of this document. DOE conducted a sensitivity analysis that considers impacts for products shipped in a 9year period. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.15 DOE’s approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information on FFC energy savings, see section IV.H.1 of this document. 2. Significance of Savings To adopt any new or amended standards for a covered product, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B)) The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.16 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 with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a caseby-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. As stated, the standard levels proposed in this document are projected to result in national energy savings of 0.33 quad, the equivalent of the primary annual energy use of 3.5 million homes. Based on the amount of FFC savings, the corresponding reduction in emissions, and the need to confront the global climate crisis, DOE has initially determined the energy savings from the proposed standard levels are ‘‘significant’’ within the meaning of 42 U.S.C. 6295(o)(3)(B). ddrumheller on DSK120RN23PROD with PROPOSALS3 E. Economic Justification 1. Specific Criteria As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)– (VII)) The following sections discuss 15 The FFC metric is discussed in DOE’s statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012). 16 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). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 how DOE has addressed each of those seven factors in this proposed rulemaking. a. Economic Impact on Manufacturers and Consumers In determining the impacts of a potential new or amended standard on manufacturers, DOE conducts an MIA, as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) INPV, which values the industry on the basis of expected future cash flows, (2) cash flows by year, (3) changes in revenue and income, and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers. For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard. b. Savings in Operating Costs Compared To Increase in Price (LCC and PBP) EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of a product (including its installation) and the operating expense PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 76519 (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a moreefficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more stringent standard by the change in annual operating cost for the year that standards are assumed to take effect. For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new or amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new or amended standards. DOE’s LCC and PBP analysis is discussed in further detail in section IV.F of this document. c. Energy Savings Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.D of this document, DOE uses the NIA spreadsheet models to project national energy savings. d. Lessening of Utility or Performance of Products In establishing product classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the products under consideration in this proposed rulemaking. E:\FR\FM\06NOP3.SGM 06NOP3 76520 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the DOJ provide its determination on this issue. DOE will publish and respond to the Attorney General’s determination in the final rule. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the ADDRESSES section for information to send comments to DOJ. ddrumheller on DSK120RN23PROD with PROPOSALS3 f. Need for National Energy Conservation DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation’s energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation’s needed power generation capacity, as discussed in section IV.M of this document. DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The proposed standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document. g. Other Factors In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under ‘‘other factors.’’ 2. Rebuttable Presumption As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE’s LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE’s evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F.9 of this document. IV. Methodology and Discussion of Related Comments This section addresses the analyses DOE has performed for this proposed rulemaking with regard to dehumidifiers. Separate subsections address each component of DOE’s analyses. DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 standards. The national impacts analysis uses a second spreadsheet set that provides shipment projections and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (‘‘GRIM’’), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE website for this proposed rulemaking: www.regulations.gov/docket/EERE2019-BT-STD-0043. Additionally, DOE used output from the latest version of the Energy Information Administration’s (‘‘EIA’s’’) Annual Energy Outlook (‘‘AEO’’), a widely known energy projection for the United States, for the emissions and utility impact analyses. A. Market and Technology Assessment DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly available information. The subjects addressed in the market and technology assessment for this proposed rulemaking include (1) a determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of dehumidifiers. The key findings of DOE’s market assessment are summarized in the following sections. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment. 1. Product Classes When evaluating and establishing energy conservation standards, 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 E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 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 currently defines separate energy conservation standards using five dehumidifier product classes (10 CFR 430.32(v)(2)): Portable dehumidifiers have three product classes based on the product capacity: Product Class 1 are those with a capacity of 25.00 pints/day or less, Product Class 2 dehumidifiers have a capacity of 25.01 to 50.00 pints/day, and Product Class 3 dehumidifiers have a capacity of 50.01 pints/day or more. Whole-home dehumidifiers have two product classes based on product case volume: Product Class 4 dehumidifiers have a case volume of 8.0 cubic feet or less, and Product Class 5 have a case volume of more than 8.0 cubic feet. According to MIAQ, many of the units that are meant to be placed in the crawlspace of a home meet the portable dehumidifier definition due to their installation and configuration but have the same manufacturer production cost (‘‘MPC’’) as whole-home dehumidifiers. MIAQ stated that DOE did not clearly distinguish the difference between typical portable dehumidifiers and portable crawlspace dehumidifiers in the June 2022 Preliminary Analysis and requested that DOE keep this difference in mind when updating the TSD. (MIAQ, No. 20 at pp. 1–2) Dehumidifiers are classified based on their ducting configuration during consumer use, according to the definitions established in 10 CFR 430.2. Portable dehumidifiers operate in applications that require space dehumidification without ducting. Whole-home dehumidifiers operate with ducting, typically in conjunction with a heating, ventilating, and air conditioning (‘‘HVAC’’) system. Dehumidifiers installed in basement crawlspaces without ducting are classified as portable dehumidifiers. DOE is not aware of any specific performance-related feature that would justify a new product class for portable dehumidifiers installed in basement crawlspaces. Therefore, when conducting the engineering analysis, as discussed further in section IV.C of this document and chapter 5 of the NOPR TSD, DOE considered the MPCs of a variety of units in the largest portable dehumidifier product class, Product Class 3. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 2. Technology Options In the preliminary market analysis and technology assessment, DOE identified 16 technology options that would be expected to improve the efficiency of dehumidifiers, as measured by the DOE test procedure. TABLE IV.2—TECHNOLOGY OPTIONS FOR DEHUMIDIFIERS 1. 2. 3. 4. Microchannel heat exchangers. Built-in hygrometer/humidistat. Improved compressor efficiency. Improved condenser and evaporator performance. 5. Improved controls. 6. Improved defrost methods. 7. Improved demand-defrost controls. 8. Improved fan and fan-motor efficiency. 9. Improved flow-control devices. 10. Low-standby-loss electronic controls. 11. Washable air filters. 12. Pre-cooling air-to-air heat exchangers. 13. Heat pipes. 14. Improved refrigeration system insulation. 15. Refrigerant-desiccant systems. 16. Alternative refrigerants. Several commenters provided feedback on some of these technology options. These comments are summarized below, along with DOE’s responses. a. Improved Compressor Efficiency MIAQ stated that finding suitable high-efficiency compressors at the capacities and price points needed for dehumidifiers is a challenge, particularly with the transition to new refrigerants. According to MIAQ, the whole-home and crawlspace dehumidifier industry does not have sufficient volume to garner the full attention of compressor manufacturers. (MIAQ, No. 20 at p. 2) DOE has considered MIAQ’s comments regarding high-efficiency compressor availability, and for the reasons discussed in chapter 3 of the NOPR TSD, expects that by the time that compliance is required with any new dehumidifier standards, dehumidifier manufacturers will transition to compressors utilizing R–32 in place of compressors designed for the refrigerants currently in use. DOE acknowledges that there is significant uncertainty regarding the availability of the highest-efficiency single-speed compressors designed for operation with R–32 refrigerant that were analyzed for the June 2022 Preliminary Analysis, particularly in the smallest capacities. For this NOPR analysis, DOE has limited the improved compressor efficiency technology option to the maximum R–32 compressor efficiency that was observed within its teardown sample of dehumidifiers, to ensure that such compressors are already PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 76521 commercially available to the dehumidifier industry. Furthermore, should this NOPR proceed to a final rule, compliance with any amended standards would not be required until 3 years after a final rule is published. DOE expects that this 3-year compliance period would provide adequate time for dehumidifier original equipment manufacturers (‘‘OEMs’’) to source a sufficient supply of more efficient R–32 compressors ahead of anticipated demand. DOE expects that standards, if adopted, would therefore provide sufficient time and regulatory certainty for manufacturers and compressor suppliers to establish additional capacity in the supply chain, if needed. MIAQ reiterated its comment on the June 2022 Dehumidifier Test Procedure NOPR 17 that variable-speed compressors do not provide sufficient energy savings to justify the significant increase in cost required to implement this technology, especially in the consumer product market. (MIAQ, No. 20 at p. 3) In the June 2022 Preliminary Analysis, DOE considered variablespeed compressors as part of the technology assessment, but took into account only their full-load efficiency. As discussed in chapter 3 of the preliminary TSD, the DOE test procedure at appendix X1 does not attribute any partial-load efficiency improvements to variable-speed dehumidifiers as the test procedures for room air conditioners and portable air conditioners do for units with variablespeed compressors, because variablespeed dehumidifiers must maintain a constant evaporator temperature below the dew point regardless of the amount of moisture present in the room. This provides no opportunity for energy savings. DOE also noted the costs associated with implementing variablespeed compressors and accounted for these costs in the engineering analysis where appropriate. Since publication of the June 2022 Preliminary Analysis, additional market research, manufacturer interviews, and input from commenters led DOE to understand that variable-speed compressors do not offer efficiency benefits sufficient to justify the costs and design challenges associated with implementing them for dehumidifiers. Therefore, in the analysis for this NOPR, DOE did not consider variable-speed compressors as a design option to improve compressor efficiency. See chapter 3 of the NOPR TSD for 17 See posted comment on www.regulations.gov, Docket No. EERE–2019–BT–TP–0026–0008–0015. E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76522 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules additional discussion about variablespeed compressors. AHAM requested that DOE evaluate whether the use of variable-frequency drives and similar high frequency components will lead to increased nuisance tripping of ground-fault circuit-interrupters (‘‘GFCIs’’) and associated cost implications. According to AHAM, nuisance tripping may require a consumer to call an electrician to change a breaker or replace a unit and could lead to less efficient operation, as continuous dehumidification over time is more efficient than interrupted dehumidification. (AHAM, No. 22 at p. 7) DOE is aware that when implementing variable-frequency drives, as for both variable-speed compressors and fan blower electronically commutated motors (‘‘ECMs’’), it is possible that GFCI systems will trip without a fault present, requiring a manual reset of the dehumidifier by the consumer. However, DOE understands that GFCI tripping, even for units with variable-speed drives, can generally be mitigated through the use of best practices for reducing leakage current, such as minimizing ECM cable length and ensuring that filtered and unfiltered cables are separated to whatever extent possible to reduce leakage current. Additionally, optimizing the variablefrequency controller power filter to reduce total leakage current to levels below the GFCI detection limits can prevent GFCI tripping. Furthermore, DOE does not have any information on the prevalence of nuisance tripping events or on the potential impact of such trips on consumer utility or dehumidifier energy use. DOE notes that despite the potential for nuisance tripping, a wide range of appliances on the market today, including dehumidifiers, implement variablefrequency drives in their designs. The inclusion of these variable-frequency drive designs in units on the market suggests that they do not have a significant impact on the consumer utility of these products. Therefore, DOE is continuing to consider ECMs for fan blowers as a technology option for the NOPR engineering analysis. However, for the reasons discussed above, DOE did not consider variable-speed compressors as a technology option to improve compressor efficiency in this NOPR analysis. b. Washable Air Filters MIAQ did not support the use of washable air filters and stated that in a limited study washable filters were changed less frequently than disposable filters, leading to reduced airflow and VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 reduced efficiency. (MIAQ, No. 20 at p. 3) DOE understands that the efficiency impacts due to air filters are dependent on regular consumer maintenance. As DOE noted in the technology assessment in chapter 3 of the preliminary TSD, it is difficult to predict the amount of energy savings that could be realized with the addition of washable air filters, as it is dependent on the specific dehumidifier model and use characteristics, and on the degree to which the consumer takes advantage of this feature. DOE also noted in the preliminary TSD that most dehumidifiers incorporate an air filter and that most manufacturers design the air filters to be removable and washable. Therefore, DOE did not consider washable air filters as a design option to improve efficiency in the engineering analysis for the June 2022 Preliminary Analysis. The information that MIAQ provided regarding the efficiency impacts of washable air filters further supports DOE’s preliminary determination not to include washable air filters as a design option in the engineering analysis, and in light of the uncertainty and lack of sufficient data as to any efficiency benefit associated with them and the prevalence of them in dehumidifiers already on the market, DOE has tentatively removed from consideration washable air filters as a technology option in this NOPR. c. Air-to-Air Heat Exchangers According to MIAQ, air-to-air heat exchangers add significant cost and complexity to the design, MPC, and installation of the unit and typically push the unit into the greater than 8 cubic foot category where minimum efficiency values are considerably higher. (MIAQ, No. 20 at p. 3) DOE considers the costs of design options in the engineering analysis. Although DOE is aware that air-to-air heat exchangers are implemented in many whole-home dehumidifiers with case volumes greater than 8 cubic feet, DOE did not implement air-to-air heat exchangers as a design option to achieve higher efficiency levels in the NOPR engineering analysis because dehumidifiers with size constraints that allow air-to-air heat exchangers already implement them and they require too much case volume increase to implement for other units. (See chapter 5 of the NOPR TSD for additional details.) d. Alternative Refrigerants The Joint Commenters supported DOE’s decision to consider R–32 compressors as a design option for PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 dehumidifiers due to their significant potential to improve efficiencies, and agreed that R–32 will likely be acceptable for use in dehumidifiers by the time amended standards come into effect. The Joint Commenters noted that in July 2022, the U.S. Environmental Protection Agency (‘‘EPA’’) proposed to list R–32 as acceptable for use in new residential dehumidifiers. (Joint Commenters, No. 21 at p. 1) MIAQ requested that DOE consider the impact on efficiency that any new refrigerant would have on dehumidifiers. Although some refrigerants may provide efficiency improvements, optimizing the unit’s performance would require time and the assistance of component suppliers. (MIAQ, No. 20 at p. 3) DOE is aware that new refrigerant regulations from entities such as the California Air Resource Board (‘‘CARB’’) are prompting an industry-wide refrigerant changeover. Based on feedback received during the manufacturer interview process, DOE expects that the process of redesigning and optimizing dehumidifiers for new refrigerants such as R–32 will be part of the typical new unit design process, not a result of any amended standards that DOE may adopt. Additionally, DOE estimates that the implementation of R– 32 in dehumidifiers is unlikely to result in an efficiency increase due to the refrigerant changeover alone, although compressors designed for R–32 may be slightly more efficient than compressors designed for R–410a due to other design improvements. Therefore, given this industry-wide refrigerant changeover expected to occur by the compliance date of any new dehumidifier standards, in this NOPR analysis DOE considered the impact of compressor improvements on overall dehumidifier efficiency only for those compressors using R–32, assuming that manufacturers will already have transitioned to refrigeration systems optimized for the new refrigerant. DOE requests comment on the effects of EPA and CARB regulations on refrigerant choices and on whether changes in refrigerant will affect manufacturer’s ability to achieve the efficiency levels in the NOPR analysis and the availability of high-efficiency R–32 compressors. For further discussion of the cumulative regulatory burden, see section V.B.2.e of this document. e. Low-Standby-Loss Electronic Controls According to AHAM, low standbyloss electronic controls save as little as 1 watt of power and have a minimal impact to overall energy savings that E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules does not warrant the cost of implementing this technology option, and should therefore have been screened out by DOE. (AHAM, No. 22 at p. 4) In the engineering analysis, DOE accounts for the cost relative to the efficiency benefit of all technologies that pass the screening analysis and are considered, as discussed. See chapter 3 of the NOPR TSD for discussion of the potential efficiency benefits of lowstandby-loss electronic controls and chapter 5 of the NOPR TSD for further discussion of the costs of this technology. f. Multi-Circuited Evaporator and Secondary Condenser Coils Since publication of the June 2022 Preliminary Analysis, DOE became aware of at least one whole-home dehumidifier on the market that implements a novel refrigeration loop design. This patented design ‘‘causes part of the refrigerant within the system to evaporate and condense twice in one refrigeration cycle, thereby increasing the compressor capacity over typical systems without adding any additional power to the compressor.’’ 18 DOE has observed that this technology has resulted in a unit that is at least 4percent more efficient than any other unit available on the market and a significant reduction in case volume compared to units with similar dehumidification capacities. Therefore, DOE has included multi-circuited evaporator and secondary condenser coil refrigerant systems as an additional technology option for this NOPR. See chapter 3 of the NOPR TSD for additional discussion of this technology. 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: (1) Technological feasibility. Technologies that are not incorporated in commercial products or in commercially viable, existing prototypes will not be considered further. (2) Practicability to manufacture, install, and service. If it is determined that mass production of a technology in commercial products and reliable installation and servicing of the technology could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further. (3) Impacts on product utility. If a technology is determined to have a significant adverse impact on the utility of the product to subgroups of consumers, or result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further. (4) Safety of technologies. If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further. (5) Unique-pathway proprietary technologies. If a technology has proprietary protection and represents a unique pathway to achieving a given efficiency level, it will not be considered further, due to the potential for monopolistic concerns. 10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b). In summary, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed in the following sections. The subsequent sections include comments from interested parties pertinent to the screening criteria, DOE’s evaluation of each technology option against the screening analysis criteria, and whether DOE determined that a technology option should be excluded (‘‘screened out’’) based on the screening criteria. 1. Screened-Out Technologies In the June 2022 Preliminary Analysis, DOE screened out pre-cooling air-to-air heat exchangers and heat pipes from the analysis for portable dehumidifiers with capacities up to and including 50 pints/day. DOE determined that these dehumidifiers could not accommodate the significant increases in case size and weight required to implement these technologies without a significant adverse effect on consumer utility (screening criterion 3). AHAM agreed that implementation of pre-cooling air-to-air heat exchangers is applicable only to high-capacity portable dehumidifiers in Product Class 3 and requested that DOE recognize that current dehumidifier casings may not accommodate the increase in components and product size associated with this technology option. (AHAM, No. 22 at p. 4) For the reasons given in the June 2022 Preliminary Analysis, DOE is maintaining the same approach to air-toair heat exchangers and heat pipes in this NOPR analysis. See chapter 4 of the NOPR TSD for further discussion. DOE is also screening out multicircuited evaporator and secondary condenser coil refrigerant systems, a technology newly considered for the NOPR per section IV.A.2.f of this document, because it represents a unique-pathway proprietary technology. See chapter 4 of the NOPR TSD for further discussion. 2. Remaining Technologies Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.A.2 of this document meet all five screening criteria to be examined further as design options in DOE’s NOPR analysis. In summary, DOE did not screen out the following technology options: ddrumheller on DSK120RN23PROD with PROPOSALS3 TABLE IV.3—RETAINED DESIGN OPTIONS FOR DEHUMIDIFIERS 1. 2. 3. 4. 5. 6. 7. 8. 9. Microchannel heat exchangers. Built-in hygrometer/humidistat. Improved compressor efficiency. Improved condenser and evaporator performance. Improved controls. Improved defrost methods. Improved demand-defrost controls. Improved fan and fan-motor efficiency. Improved flow-control devices. 18 U.S. Patent No. 10,845,069. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 76523 E:\FR\FM\06NOP3.SGM 06NOP3 76524 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE IV.3—RETAINED DESIGN OPTIONS FOR DEHUMIDIFIERS—Continued 10. 11. 12. 13. 14. 15. Low-standby-loss electronic controls. Pre-cooling air-to-air heat exchanger (high-capacity portable and whole-home dehumidifiers only). Heat pipes (high-capacity portable and whole-home dehumidifiers only). Improved refrigeration system insulation. Refrigerant-desiccant systems. Alternative refrigerants. DOE has initially determined that these technology options are technologically feasible because they are being used or have previously been used in commercially available products or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (i.e., practicable to manufacture, install, and service and do not result in adverse impacts on consumer utility, product availability, health, or safety, uniquepathway proprietary technologies). For additional details, see chapter 4 of the NOPR TSD. ddrumheller on DSK120RN23PROD with PROPOSALS3 C. Engineering Analysis The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of dehumidifiers. There are two elements to consider in the engineering analysis; the selection of efficiency levels to analyze (i.e., the ‘‘efficiency analysis’’) and the determination of product cost at each efficiency level (i.e., the ‘‘cost analysis’’). In determining the performance of higher-efficiency products, DOE considers technologies and design option combinations not eliminated by the screening analysis. For each product class, DOE estimates the baseline cost, as well as the incremental cost for the product at efficiency levels above the baseline. The output of the engineering analysis is a set of cost-efficiency ‘‘curves’’ that are used in downstream analyses (i.e., the LCC and PBP analyses and the NIA). 1. Efficiency Analysis DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (i.e., the efficiency-level approach), or (2) determining the incremental efficiency improvements associated with incorporating specific design options to a baseline model (i.e., the design-option approach). Using the efficiency-level approach, the efficiency levels established for the analysis are determined based on the market distribution of existing products (in other words, based on the range of efficiencies and efficiency level ‘‘clusters’’ that already exist on the market). Using the design option VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 approach, the efficiency levels established for the analysis are determined through detailed engineering calculations and/or computer simulations of the efficiency improvements from implementing specific design options that have been identified in the technology assessment. DOE may also rely on a combination of these two approaches. For example, the efficiency-level approach (based on actual products on the market) may be extended using the design option approach to ‘‘gap fill’’ levels (to bridge large gaps between other identified efficiency levels) and/or to extrapolate to the max-tech level (particularly in cases where the max-tech level exceeds the maximum efficiency level currently available on the market). In this proposed rulemaking, DOE relied on a combination of these two methods in developing cost estimates at each efficiency level for dehumidifiers, structured around the reverse engineering approach. For each product class, DOE analyzed a few units from different manufacturers to ensure the analysis was representative of various designs on the market. The analysis involved reviewing publicly available cost and performance information, physically disassembling commercially available products and modeling equipment cost while removing costs associated with non-efficiency related components or features. From this information, DOE estimated the MPCs for a range of products currently available on the market. DOE then considered the incremental steps manufacturers may take to reach higher efficiency levels. In its modeling, DOE started with the baseline MPC and added the expected design options at each higher efficiency level to estimate incremental MPCs. See chapter 5 of the NOPR TSD for additional detail on the dehumidifiers analyzed. DOE analyzed six efficiency levels (‘‘ELs’’) as part of the engineering analysis for portable dehumidifiers with capacities less than or equal to 50 pints/ day: (1) the current DOE standard (baseline); (2) an intermediate level above the baseline but below the ENERGY STAR® level, representing units that exist on the market above the PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 baseline but are not ENERGY STAR units (EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) the level of the most efficient units available on the market (EL 3); (5) an intermediate level below the maximum technologically feasible (max-tech) efficiency that represents the implementation of more efficient compressors and fan motors on the market without any changes to the unit chassis (EL 4); and (6) the max-tech efficiency (EL 5). For portable dehumidifiers with capacities of 50.01 pints/day and above, the distribution of efficiencies that are available on the market and the technology options feasible for this product class required DOE to analyze different efficiency levels, as follows: (1) the current DOE standard (baseline); (2) an intermediate level above the baseline but below the ENERGY STAR level, representing units that exist on the market above the baseline but are not ENERGY STAR units (EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an intermediate level below max tech that represents the implementation of more efficient compressors and fan motors on the market (EL 3); and (5) the max-tech efficiency (EL 4). For whole-home dehumidifiers with case volumes of 8 cubic feet or below, likewise, the distribution of efficiencies that are available on the market and the technology options feasible for this product class required DOE to analyze different efficiency levels, as follows: (1) the current DOE standard (baseline); (2) the ENERGY STAR efficiency criterion (EL 1); (3) an intermediate level below max tech, representing the level of the most efficient units available on the market (EL 2); and (4) the max-tech efficiency (EL 3). For whole-home dehumidifiers with case volumes larger than 8 cubic feet, likewise, the distribution of efficiencies that are available on the market and the technology options feasible for this product class required DOE to analyze different efficiency levels, as follows: (1) the current DOE standard (baseline); (2) an intermediate level above the baseline but below the ENERGY STAR level, representing the level of the most efficient units available on the market E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 (EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an intermediate level below max tech that represents the implementation of more efficient compressors and fan motors on the market and some increase to heat exchanger size relative to EL 2 (EL 3); and (5) the max-tech efficiency (EL 4). a. Baseline Efficiency For each product/equipment class, DOE generally selects a baseline model as a reference point for each class, and measures changes resulting from potential energy conservation standards against the baseline. The baseline model in each product/equipment class represents the characteristics of a product/equipment typical of that class (e.g., capacity, physical size). Generally, a baseline model is one that just meets current energy conservation standards, or, if no standards are in place, the baseline is typically the most common or least efficient unit on the market. For representative units for teardowns and the NOPR, DOE selected three baseline units that fell within two of the five dehumidifier product classes (Product Class 1 and Product Class 2) as reference points for each analyzed product class, against which DOE measured changes that would result from amended energy conservation standards to support the engineering, LCC, and PBP analyses. Baseline units for two of the other three product classes (Product Class 3 and Product Class 5) were not readily available on the market for analysis. Additionally, as discussed in chapter 5 of the preliminary TSD, for whole-home dehumidifiers with case volumes of 8 cubic feet or less, DOE does not expect that efficiencies and overall designs have changed since the previous standards rulemaking, given that the whole-home dehumidifier standards adopted in the June 2016 Final Rule were the baseline level at the time. For this reason, DOE did not select additional baseline units in Product Class 4 for teardown as part of the NOPR analysis. However, DOE found that higher-efficiency models could provide insight into technologies that were likely to be implemented in baseline units to improve efficiency. Therefore, for product classes where baseline units were not available, DOE estimated the MPC of baseline units by evaluating which design options would need to be removed from the higherefficiency unit analyzed in order to reduce its efficiency to the baseline level. The baseline units in each of the analyzed product classes represent the basic characteristics of equipment in that class. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 MIAQ stated in response to the June 2022 Preliminary Analysis that the current energy conservation standards for portable dehumidifier product classes are not appropriate or in the best interest of the Nation’s energy consumption. According to MIAQ, the jump in baseline efficiency from 1.60 L/ kWh at the 25.01–50.00 pints/day capacity up to 2.80 L/kWh for largercapacity units is too drastic and would force MPC and manufacturer selling price (‘‘MSP’’) to escalate far above that of smaller dehumidifiers. According to MIAQ, as consumers purchase sufficient dehumidifier capacity match the latent load of their dwelling, this could be through a more expensive, higherefficiency dehumidifier at an efficiency of 2.80 L/kWh or through multiple lessexpensive and less-efficient dehumidifiers at an efficiency of 1.30 L/ kWh. MIAQ stated that as MPC and MSP on these two types of units are drastically different, anecdotal evidence indicates many consumers have two or more dehumidifiers in their basement or crawlspace consuming twice the power of a larger unit. Therefore, MIAQ requested that DOE develop a new set of baseline efficiency levels for portable dehumidifiers that create more parity in the MPCs and baseline efficiencies for the product sizes. (MIAQ, No. 20 at pp. 3–4) As noted, DOE analyzes the changes due to potential energy conservation standards against the baseline for each product class. DOE determined in the June 2016 Final Rule that the current standards were technologically feasible and economically justified for each of the five dehumidifier product classes (81 FR 38338, 38385–38388), and models exist on the market at or above the current standard level in each class. Therefore, DOE has evaluated baseline efficiency levels for this NOPR analysis that correspond to the current energy conservation standards for dehumidifiers. DOE notes that units with capacities larger than 50 pints/day have inherent differences in design from those with smaller capacities related to the different consumer utility they provide. The larger dehumidifiers in Product Class 3 provide dehumidification for large spaces, are more robustly constructed, and are more efficient due to their greater size and capacity. The smaller dehumidifiers are intended to dehumidify smaller spaces and provide consumers with an affordable, lighter-weight, and more compact option to dehumidify a targeted area. The current energy conservation standards on which the baseline efficiency levels are based PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 76525 reflect that consumers derive utility from the greater capacity, efficiency, and robust construction of larger dehumidifiers and that smaller dehumidifiers offer utility in the form of their smaller size and lower cost. These differences in utility are borne out in the design differences observed between these classes of dehumidifiers, with larger dehumidifiers implementing more durable materials and larger heat exchangers. These design differences lead to the cost differential observed by manufacturers and consumers between larger and smaller dehumidifiers. DOE developed the higher efficiency levels in each product class based on the units currently on the market, external efficiency criteria such as ENERGY STAR, and technological feasibility of design options to improve dehumidifier efficiency. DOE then evaluated the economic impacts of potential standards at each of these efficiency levels, including incremental impacts on MPCs and MSPs in each product class, as part of the NOPR analysis. DOE is not aware of and lacks sufficient consumer usage data showing that consumers install multiple smaller dehumidifiers in the same room instead of purchasing one larger, more efficient dehumidifier as part of an average period of use, and therefore did not model any product class switching as a result of evaluated potential standards. DOE requests comment regarding consumer’s dehumidifier usage patterns and whether consumers typically purchase multiple smaller dehumidifiers to meet dehumidification requirements as opposed to a single, higher capacity dehumidifier. b. Higher Efficiency Levels As discussed above, DOE modeled several efficiency levels above the baseline for dehumidifiers in each product class, using a combination of design options that varied by product class (for detailed discussion of the design options used to model each efficiency level, see chapter 5 of the NOPR TSD). As part of DOE’s analysis, the maximum available efficiency level is the highest efficiency unit currently available on the market. DOE also defines a ‘‘max-tech’’ efficiency level to represent the maximum possible efficiency for a given product. At all of these levels, DOE considered incremental compressor efficiency improvements as a design option. In the June 2022 Preliminary Analysis, DOE reviewed compressor manufacturer product catalogues to identify the maximum technologically feasible R–32 compressor efficiency. However, based on additional research and input from E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76526 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules manufacturer interviews, DOE understands that the most efficient compressors listed in catalogues may not be widely available to all dehumidifier manufacturers or available at the scale necessary to serve the dehumidifier market at the anticipated date of compliance of any new standards. This is especially true for the relatively small manufacturers that produce dehumidifiers in Product Class 4 and Product Class 5, given the specialized applications for these products and the corresponding lower production volumes. To address this concern in the NOPR analysis, DOE considered incremental compressor efficiency increases for each product class only up to the highest R–32 singlespeed compressor efficiency observed in the teardown sample in that class. This change ensures that the higherefficiency compressors considered as design options are widely available and technologically feasible for all dehumidifier manufacturers to implement. As discussed in chapter 5 of the NOPR TSD, DOE modeled replacing permanent split capacitor (‘‘PSC’’) fan motors with more efficient ECMs, replacing baseline single-speed compressors with the most efficient single-speed compressors already available on the market, reducing standby power using more efficient controls, and increasing the cabinet and heat exchanger to the largest sizes feasible without impacting consumer utility to improve efficiency. For all product classes, the max-tech level identified exceeds any other regulatory or voluntary efficiency criteria currently in effect. DOE received the following comments related to the higher efficiency levels modeled in the preliminary engineering analysis. AHAM requested that DOE account for additional controls, specifically variable-frequency drives that are required for ECMs in the improved fan and fan motor efficiency technology option. According to AHAM, in addition to the significant cost increase associated with ECMs being a significant obstacle to widespread adoption in dehumidifiers, additional controls would only further increase the cost and require additional space within the product case, potentially affecting the size and weight of the product. (AHAM, No. 22 at p. 5) DOE is aware that ECMs require specialized control boards and additional space within dehumidifier chassis to locate them and considered this issue as part of the engineering analysis. DOE found that there is a variable-speed dehumidifier on the VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 market that implements a variable-speed compressor, and this model has the same chassis size as another comparable dehumidifier from the same manufacturer that does not implement the variable-speed components and functionality. DOE expects that a variable-speed dehumidifier would have similar control requirements to one that implements ECMs. Therefore, DOE tentatively finds that the implementation of ECMs for fan blowers in dehumidifiers does not inherently necessitate a change in chassis size. According to AHAM and a survey of its members, employing the technology options that DOE suggested in the preliminary TSD to meet the analyzed efficiency levels for Product Classes 1, 2, and 3 would require significant increases in both model weight and model dimensions. For Product Classes 1 and 2, AHAM stated that an increase of up to 30 percent in model weight and up to 59 percent in model dimensions is required to meet EL 3, and an increase of up to 38 percent in model weight and up to 68 percent in model dimensions is required to meet EL 4. For Product Class 3, AHAM stated that EL 2 would require a product redesign and likely an increase in both weight and dimension by unknown quantities. AHAM also stated that increased product size and weight associated with implementing the technology options specified in the preliminary TSD will affect the consumer utility of dehumidifiers, specifically regarding portability. According to AHAM, consumers must move or lift dehumidifiers when purchased and when used in different spaces in their homes. Additionally, manufacturers design models to meet a 51-pound weight threshold for a oneperson lift, a design parameter that not only reflects consumer utility but also is a requirement under worker safety standards, parcel delivery service fee structures, and other distribution requirements that AHAM stated DOE should consider for all product classes. AHAM urged DOE to assess impacts on product weight associated with increased heat exchanger area and added tube rows in the improved condenser and evaporator performance technology option. According to AHAM, an increase in weight of the coil section could severely impact consumer use in existing dehumidifier designs that require lifting the coil section in order to access the water collection bucket. Additionally, AHAM stated that its members specifically identified weight increases associated with this technology option in meeting EL 3 for all product classes. AHAM requested PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 that DOE assess all potential cost increases associated with the technology options that increase product size and/ or weight and noted its recommendation for a standard that does not go beyond EL 2 for Product Class 1, a gap-fill analysis for Product Class 2, and no change in the standard for Product Class 3 to avoid these negative impacts. (AHAM, No. 22 at pp. 2–5) In the June 2022 Preliminary Analysis, DOE modeled the efficiency levels below max-tech mentioned by AHAM by implementing more efficient compressors without any additional design options. In DOE’s assessment, these higher-efficiency compressors would result in a slight weight increase but would require no changes to the dehumidifier’s chassis size or any substantive change in overall weight. Additionally, based on teardowns of other space conditioning products, DOE does not expect that ECMs are heavier than the PSC motors currently used in dehumidifiers. However, as AHAM suggested, DOE does expect weight changes at the max-tech level associated with increasing the heat exchanger size. DOE accounted for the effect of these weight changes and changes to chassis size in its analysis of shipping costs, and limited the maximum increase in heat exchanger size for portable dehumidifiers in Product Classes 1 and 2 to dimensions already observed on the market in these product classes to ensure the units analyzed retained their consumer utility as smaller, portable units. Because product weight changes due to heat exchanger size increases are correlated with product dimensions, DOE does not expect that these weight increases will result in units that are significantly heavier than those currently on the market, such that any weight increases will not adversely affect consumer utility. For Product Class 3, DOE’s market analysis suggests that most models in Product Class 3, even at baseline efficiency, typically weigh roughly between 55 and 70 pounds, already surpassing the 51pound weight limit for a single-person lift mentioned by AHAM. Therefore, Product Class 3 units already require two people to lift and install, a requirement that would not be altered by minor increases in chassis size and thus weight. However, a significantly larger chassis size might become more unwieldy for two people to lift. Accordingly, DOE limited the heat exchanger dimension increases considered for Product Class 3 to 5 percent greater than those observed in product teardowns in order to preclude any adverse effects on consumer utility. E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules DOE further notes that portable dehumidifiers are typically equipped with wheels that allow consumers to move them from room to room within the home. While DOE is aware of a dehumidifier design that requires consumers to lift the coil section to access the water bucket, the design is not efficiency-related and is proprietary, and therefore DOE did not consider this design in its analysis. In sum, DOE expects that the NOPR analysis and any subsequent amended energy conservation standards would not impact the design, weight, or dimensions of any dehumidifier significantly, as the required chassis dimensions are within the scope of those previously observed in dehumidifiers. For these reasons, in the NOPR analysis DOE continued to consider design options that increase the weight of dehumidifiers, limited to the extent discussed by restrictions on the allowable chassis size increases. DOE requests comment on whether limiting needed chassis size increases is sufficient to preserve consumer utility at the max-tech level. AHAM stated that while improved compressor efficiency can achieve higher overall efficiency, changes in compressor technology may require product redesigns in the form of additional safety components, particularly with the transition to R–32 refrigerant. According to AHAM, these additional safety components would make it more difficult to implement other technology options that will require room within the product casing. (AHAM, No. 22 at p. 5) DOE is aware that the EPA’s Significant New Alternatives Policy (‘‘SNAP’’) regulations now allow the use of R–32 in new dehumidifiers, provided that they comply with the relevant industry safety standard 19 to ensure new dehumidifiers are designed with the flammability of R–32 in mind. See 88 FR 26382. However, DOE does not have information regarding the sorts of design changes necessary to comply with this standard. See section V.B.2.e of this document for discussion of how DOE accounts for refrigerant transition costs in its cumulative regulatory burden analysis. ASAP and the Joint Commenters encouraged DOE to evaluate at least one intermediate efficiency level between EL 3 and EL 4 for Product Classes 1 and 2 to address the large gap in efficiencies 19 3rd edition, dated November 1, 2019, of Underwriters Laboratories (‘‘UL’’) Standard 60335– 2–40, ‘‘Household and Similar Electrical Appliances—Safety—Part 2–40: Particular Requirements for Electrical Heat Pumps, Air Conditioners and Dehumidifiers’’. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 due to the introduction of multiple design options at EL 4. The Joint Commenters added that DOE could evaluate an intermediate level based on the highest-efficiency compressors, or one reflecting all design options except for increases in heat exchanger size. According to the Joint Commenters, DOE may refer to the April 2022 NOPR for room air conditioners in which the most efficient single-speed compressors were associated with an increase in efficiency of 19 to 25 percent relative to baseline units and an incremental cost of less than $15. (ASAP, Public Meeting Transcript, No. 19 at pp. 19–20; Joint Commenters, No. 21 at p. 2) In the June 2022 Preliminary Analysis for Product Classes 1 and 2, DOE analyzed two efficiency levels above the ENERGY STAR level: the maximum available efficiency on the market and the max-tech efficiency. For Product Class 3 and for whole-home dehumidifiers, DOE analyzed the maxtech efficiency level above the ENERGY STAR level and no other intermediate levels, because there were no units on the market above the ENERGY STAR efficiency. While conducting the analysis for this NOPR, DOE noted the potential to add an efficiency level for all product classes beyond the maximum available efficiency but below max tech by using more efficient singlespeed compressors and implementing ECM technology. DOE used these design options to model a new intermediate efficiency level, EL 4, for all product classes. The new EL 4 level improves the efficiency by 35 to 63 percent relative to baseline units with incremental costs between $83 and $119, depending on product class. See chapter 5 of the NOPR TSD for additional discussion of the new efficiency levels and incremental costs. 2. Cost Analysis The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated product, and the availability and timeliness of purchasing the product on the market. The cost approaches are summarized as follows: b Physical teardowns: Under this approach, DOE physically dismantles a commercially available product, component by component, to develop a detailed bill of materials for the product. b Catalog teardowns: In lieu of physically deconstructing a product, DOE identifies each component using PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 76527 parts diagrams (e.g., available from manufacturer websites or appliance repair websites) to develop the bill of materials for the product. b Price surveys: If neither a physical nor catalog teardown is feasible (e.g., for tightly integrated products such as fluorescent lamps, which are infeasible to disassemble and for which parts diagrams are unavailable) or is costprohibitive and otherwise impractical (e.g., for large commercial boilers), DOE conducts price surveys using publicly available pricing data published on major online retailer websites and/or by soliciting prices from distributors and other commercial channels. In the present case, DOE conducted the analysis using physical teardowns. The resulting bill of materials provides the basis for the MPC estimates. To account for manufacturers’ nonproduction costs and profit margin, DOE applies a multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (‘‘MSP’’) is the price at which the manufacturer distributes a unit into commerce. DOE developed an average manufacturer markup by examining corporate annual reports filed by publicly traded manufacturers primarily engaged in appliance manufacturing and whose combined product range includes dehumidifiers. See section IV.J.2.d of this document or chapter 12 of the NOPR TSD for additional information on the manufacturer markup. In response to June 2022 Preliminary Analysis, MIAQ stated that although the manufacturer markup of 1.45 used in the preliminary analysis was historically accurate, it now overstates the current market situation which is decreasing as costs continue to increase and are unable to be passed onto the consumer. MIAQ also stated it would be willing to share information on their current markup for dehumidifiers. (MIAQ, No. 20 at p. 5) For this NOPR analysis, DOE adjusted the estimated industry average manufacturer markup from the 1.45 estimate published in the June 2022 Preliminary Analysis. DOE used market share weights to adjust the manufacturer markup based on confidential feedback provided in manufacturer interviews and a review of recent corporate annual reports by public companies engaged in manufacturing dehumidifiers. DOE estimates that the industry average manufacturer markup is 1.40 for all product classes. See section IV.J.2.d of this document and chapter 12 of the NOPR TSD for additional information on the manufacturer markup. E:\FR\FM\06NOP3.SGM 06NOP3 76528 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 AHAM stated that implementation of technology options that both increase product efficiency and product size and/or weight runs counter to manufacturer efforts to decrease product size and maximize shipping container space in order to deliver products to consumers in a timely manner while minimizing added costs due to ongoing supply chain and logistics issues. AHAM requested that DOE avoid design options that require increases in size and/or weight for these reasons and requested that DOE account for these added costs in its analysis. (AHAM, No. 22 at p. 3) In this NOPR, DOE’s analysis includes the impact of changes in dimensions on overseas container and domestic shipping rates. For efficiency levels below max-tech, DOE does not find increases in shipping costs, because chassis size and weight of the units are not expected to change from the baseline at these efficiency levels. At max-tech, there are increases in shipping costs due to the expected increase in chassis size. Additional information about shipping costs is available in section IV.F.1 of this document and chapter 8 of the NOPR TSD. 3. Cost-Efficiency Results The results of the engineering analysis are presented as cost-efficiency data for each of the efficiency levels for each of the product classes. DOE developed estimates of MPCs for each unit in the teardown sample, and also performed additional modeling for each of the teardown samples, to develop a comprehensive set of MPCs at each efficiency level. DOE then consolidated the resulting MPCs for each of DOE’s teardown units and modeled units using a weighted average for product classes in which DOE analyzed units from multiple manufacturers. DOE’s weighting factors were based on a market penetration analysis for each of the manufacturers within each product class. The resulting weighted-average incremental MPCs (i.e., the additional costs manufacturers would likely incur by producing dehumidifiers at each efficiency level compared to the baseline) are provided in Tables 5.5.12 and 5.5.13 in chapter 5 of the NOPR TSD. See chapter 5 of the NOPR TSD for additional detail on the engineering analysis. DOE requests comment on the incremental MPCs from the NOPR engineering analysis. D. Markups Analysis The markups analysis develops appropriate markups (e.g., retailer VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 markups, distributor markups, contractor markups) in the distribution chain and sales taxes to convert the MSP estimates derived in the engineering analysis to consumer prices, which are then used in the LCC and PBP analysis. At each step in the distribution channel, companies mark up the price of the product to cover business costs and profit margin. DOE developed baseline and incremental markups for each actor in the distribution chain. Baseline markups are applied to the price of products with baseline efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). The incremental markup is typically less than the baseline markup and is designed to maintain similar per-unit operating profit before and after new or amended standards.20 For portable dehumidifiers with capacities less than or equal to 50.0 pints/day, DOE assumed all sales were through the retail channel. DOE developed baseline and incremental retail markups using data from the 2017 Annual Retail Trade Survey for the ‘‘electronics and appliance stores’’ sector.21 The whole-home dehumidifier distribution channel reflects two additional markups to include wholesalers and contractors used in the purchase of the larger dehumidifiers. DOE developed wholesaler and contractor markups using U.S. Census Bureau data from the 2017 Annual Wholesale Trade Report 22 and the 2017 U.S. Economic Census,23 respectively. For portable dehumidifiers with capacities greater than 50.00 pints/day, DOE assumed 60 percent of shipments were through the retail channel, and 40 percent of shipments were through the whole-home dehumidifier distribution channel based on feedback from manufacturer interviews. 20 Because the projected prices of standardscompliant products are 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 in the short term, DOE maintains that in markets that are reasonably competitive, it is unlikely that standards would lead to a sustainable increase in profitability in the long run. 21 US Census Bureau, Annual Retail Trade Survey. 2017. www.census.gov/programs-surveys/ arts.html. 22 US Census Bureau, Annual Retail Trade Survey. 2017. www.census.gov/programs-surveys/ arts.html. 23 US Census Bureau, 2017 Economic Census. www.census.gov/programs-surveys/economiccensus/year/2017/economic-census-2017/ data.html. PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 Chapter 6 of the NOPR TSD provides details on DOE’s development of markups for dehumidifiers. E. Energy Use Analysis The purpose of the energy use analysis is to determine the annual energy consumption of dehumidifiers at different efficiencies in representative U.S. single-family homes and multifamily residences, and to assess the energy savings potential of increased dehumidifier efficiency. The energy use analysis estimates the range of energy use of dehumidifiers in the field (i.e., as they are actually used by consumers). The energy use analysis provides the basis for other analyses DOE performed, particularly assessments of the energy savings and the savings in consumer operating costs that could result from adoption of amended or new standards. DOE used data from the EIA’s 2020 Residential Energy Consumption Survey (‘‘RECS 2020’’) 24 to determine dehumidifier ownership and usage across the United States. RECS 2020 represents the largest nationally available dataset of installed residential appliance stock of dehumidifiers in households (either portable or whole home) as well as the number of portable units in each household. RECS also provides dehumidifier usage information in the form of broad categories of annual usage frequency as reported by the households. DOE estimated monthly vapor density data for each household that reported owning a portable dehumidifier by using corresponding outdoor temperature and humidity information for the year 2020 provided by the National Oceanic and Atmospheric Administration (NOAA).25 DOE used this vapor density data in conjunction with the annual usage information to estimate the respective annual operating hours of portable dehumidifiers for each consumer sample as applicable. DOE determined that portable dehumidifiers operated in active (dehumidification) mode, fan-only mode, and standby mode while wholehome dehumidifiers operated in active and standby modes only. To estimate the annual dehumidifier energy consumption, DOE first calculated the number of operating hours in each mode. For portable dehumidifiers, DOE used available dehumidifier field 24 U.S. Department of Energy–Energy Information Administration. Residential Energy Consumption Survey. 2020. www.eia.gov/consumption/ residential/data/2020/. 25 Available at https://www.ncdc.noaa.gov/cdoweb/datatools/lcd. E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules studies 26 27 that provided a relationship between vapor density and daily operating hours. DOE estimated that portable dehumidifiers operated in active mode for an average of 1,337 hours annually. For whole-home dehumidifiers, based on data from the field study, DOE estimated that, on average, 28 percent of the daily operating hours were spent in active or dehumidification mode and the remaining in standby mode. DOE paired these data with estimates of the number of months that dehumidifiers may be used based on usage behavior as reported in RECS 2020. DOE estimated that consumers leave the dehumidifier to cycle on and off for the entire month or months of the dehumidification season. MIAQ stated that although dehumidifiers use the same vapor compression refrigeration cycle as air conditioners, their operation is much different and the latent load or run time is affected by many variables. According to MIAQ, consumers typically do not manually change the mode of operation or settings once a dehumidifier is installed. (MIAQ, No. 20 at p. 4) DOE agrees that there are differences in operation between dehumidifiers and air conditioners. DOE’s energy use analysis is based on dehumidifier field studies that capture real world dehumidifier operation in a variety of different operating conditions. The studies used by DOE support MIAQ’s assertion that consumers do not manually change the mode of operation or settings once the dehumidifier is installed. MIAQ stated that more than 10 percent of households have more than one dehumidifier, which indicates that consumers understand they can purchase two smaller capacity units rather than one large capacity unit. (MIAQ, No. 20 at p. 4) Using RECS 2020, DOE estimates that 10.6 percent of portable dehumidifierowning households own multiple units, similar to the estimate provided by MIAQ. DOE adjusted the consumer sample to account for households with multiple units using the household weights derived by RECS 2020 and the reported number of portable dehumidifiers in each household. 26 Willem, H., T. Burke, C. Dunham, B. Beraki, J. Lutz, M. Melody, M. Nagaraju, C. Ni, S. Pratt, S. Price, and V. Tavares. Using Field-Metered Data to Quantify Annual Energy Use of Residential Portable Unit Dehumidifiers. 2013. Report No. LBNL–6469e. 27 Burke, T. A., H. Willem, C. C. Ni, H. Stratton, C. Dunham Whitehead, and R. Johnson. WholeHome Dehumidifiers: Field-Monitoring Study. 2014. Report No. LBNL–1003950E. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 Chapter 7 of the NOPR TSD provides details on DOE’s energy use analysis for dehumidifiers. F. Life-Cycle Cost and Payback Period Analysis DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for dehumidifiers. The effect of new or amended energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts: b 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. b 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 dehumidifiers in the absence of new or amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline product. For each considered efficiency level in each product class, DOE calculated the LCC and PBP for a nationally representative set of U.S. households. As stated previously, DOE developed household samples from RECS 2020. For each sample household, DOE determined the energy consumption for the dehumidifiers and the appropriate energy price. By developing a representative sample of households, the analysis captured the variability in energy consumption and energy prices associated with the use of dehumidifiers. Inputs to the calculation of total installed cost include the cost of the product—which includes MPCs, PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 76529 manufacturer markups, retailer and distributor markups, and sales taxes— and installation costs. Inputs to the calculation of operating expenses include annual energy consumption, energy prices and price projections, repair and maintenance costs, product lifetimes, and discount rates. DOE created distributions of values for product lifetime, discount rates, and sales taxes, with probabilities attached to each value, to account for their uncertainty and variability. The computer model DOE uses to calculate the LCC relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations randomly sample input values from the probability distributions and dehumidifier user samples. The model calculated the LCC for products at each efficiency level for 10,000 households per simulation run. The analytical results include a distribution of 10,000 data points showing the range of LCC savings for a given efficiency level relative to the no-new-standards case efficiency distribution. In performing an iteration of the Monte Carlo simulation for a given consumer, product efficiency is chosen based on its probability. If the chosen product efficiency is greater than or equal to the efficiency of the standard level under consideration, the LCC calculation reveals that a consumer is not impacted by the standard level. By accounting for consumers who already purchase more efficient products, DOE avoids overstating the potential benefits from increasing product efficiency. DOE calculated the LCC and PBP for consumers of dehumidifiers as if each were to purchase a new product in the expected year of required compliance with new or amended standards. New and amended standards would apply to dehumidifiers manufactured 3 years after the date on which any new or amended standard is published. (42 U.S.C. 6295 (m)(4)(A)) At this time, DOE estimates publication of a final rule in 2025. Therefore, for purposes of its analysis, DOE used 2028 as the first year of compliance with any amended standards for dehumidifiers. Table IV.3 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in E:\FR\FM\06NOP3.SGM 06NOP3 76530 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules chapter 8 of the NOPR TSD and its appendices. TABLE IV.4—SUMMARY OF INPUTS AND METHODS FOR THE LCC ANALYSIS * Inputs Source/method Product Costs ..................................................... Derived by multiplying MPCs by manufacturer, retailer, and contractor markups and sales tax, as appropriate. Used historical data to derive a price scaling index to project product costs. Applied price trend to electronic controls used on products with variable-speed blower motors. Baseline installation cost determined with data from RSMeans. Assumed no change with efficiency level. The total annual energy use derived from power demand of each mode multiplied by the hours per year in that mode. Average number of hours based on field data. Variability: Based on RECS 2020. Electricity: Based on Edison Electric Institute data for 2022. Variability: Regional energy prices determined for each census division. Based on AEO2023 electricity price projections from 2022–2050; constant value based on average of price for 2046–2050 thereafter. Assumed no change with efficiency level. Weibull probability distribution based on averages provided from manufacturer interviews: 10 years for portable dehumidifiers and 12 years for whole-home dehumidifiers. Approach involves identifying all possible debt or asset classes that might be used to purchase the considered appliances or that might be affected indirectly. Primary data source was the Federal Reserve Board’s Survey of Consumer Finances. 2028. Installation Costs ................................................ Annual Energy Use ............................................. Energy Prices ..................................................... Energy Price Trends ........................................... Repair and Maintenance Costs .......................... Product Lifetime .................................................. Discount Rates ................................................... Compliance Date ................................................ * Not used for PBP calculation. References for the data sources mentioned in this table are provided in the following sections and in chapter 8 of the NOPR TSD. ddrumheller on DSK120RN23PROD with PROPOSALS3 1. Product Cost To calculate consumer product costs, DOE multiplied the MPCs developed in the engineering analysis by the markups described previously (along with sales taxes). DOE used different markups for baseline products and higher-efficiency products, because DOE applies an incremental markup to the increase in MSP associated with higher-efficiency products. Economic literature and historical data suggest that the real costs of many products may trend downward over time according to ‘‘learning’’ or ‘‘experience’’ curves. Experience curve analysis implicitly includes factors such as efficiencies in labor, capital investment, automation, materials prices, distribution, and economies of scale at an industry-wide level. DOE developed two types of experience curves to project the future dehumidifier prices. One is an overall price trend applied to the cost of dehumidifier units excluding the cost of electronic controls used for variablespeed blower fans, and the other is a separate learning rate associated with the electronic controls used in units with variable-speed blower fans. To derive the first type of experience curve for portable dehumidifiers, DOE used historical Producer Price Index (‘‘PPI’’) data between 1983 and 2014 for ‘‘small electric household appliances, except fans’’ and data from the Bureau of Labor VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 Statistics (‘‘BLS’’) 28 between 2014 and 2022 for ‘‘small electric household appliances manufacturing’’ to construct a combined price index that is most representative of portable dehumidifiers. Inflation-adjusted price indices were calculated by dividing the PPI series by the implicit gross domestic product (‘‘GDP’’) price deflator for the same years. DOE assembled a time series of annual shipments of portable dehumidifiers from AHAM and Appliance Magazine.29 For efficiency levels that include variable-speed blowers, DOE applied a different price trend to the controls portion of the variable-speed blowers that contributes to the price increments moving from single-speed blower to variable-speed blower. DOE used PPI data between 1967 and 2022 on ‘‘semiconductors and related device manufacturing’’ to estimate the historic price trend of electronic components in the controls. The regression performed as an exponential trend line fit results in an R-square of 0.99, with an annual price decline rate of 6.3 percent. DOE applied the same learning parameters for wholehome dehumidifiers. See chapter 8 of the NOPR TSD for further details on this topic. DOE included the cost to internationally ship and domestically transport dehumidifier units to the 28 Product series IDs: PCU33521033521014 and PCU335210335210. More information at www.bls.gov/ppi/. 29 Appliance Magazine. Appliance Historical Statistical Review: 1954–2012. 2014. UBM Canon. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 United States. DOE calculated shipping costs for the baseline and for higher efficiency levels that have larger product dimensions that increase shipping costs. 2. Installation Cost Installation cost includes labor, overhead, and any miscellaneous materials and parts needed to install the product. In the June 2022 Preliminary Analysis, DOE assumed that there were no installation costs for portable dehumidifiers given that consumers were directed by manufacturer instructions to simply plug them in to a wall outlet for operation. For wholehome dehumidifiers, DOE used data from RSMeans’ 2022 Residential Cost Data to estimate installation costs for baseline and more efficient units. For this NOPR, DOE assumed that whole-home dehumidifier installation costs do not increase with efficiency based on feedback from manufacturer interviews. DOE used the baseline installation cost for all efficiency levels for whole-home dehumidifiers. DOE maintained the assumption of no installation costs for portable dehumidifiers. DOE seeks available data on installation costs for baseline and more efficient units. 3. Annual Energy Consumption For each sampled household, DOE determined the energy consumption for dehumidifiers at different efficiency levels using the approach described E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules previously in section IV.E of this document. 4. Energy Prices Because marginal electricity price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average electricity prices for the energy use of the product purchased in the no-newstandards case, and marginal electricity prices for the incremental change in energy use associated with the other efficiency levels considered. DOE derived electricity prices in 2022 using data from Edison Electric Institute (‘‘EEI’’) Typical Bills and Average Rates reports. Based upon comprehensive, industry-wide surveys, this semi-annual report presents typical monthly electric bills and average kilowatt-hour costs to the customer as charged by investorowned utilities. For the residential sector, DOE calculated electricity prices using the methodology described in Coughlin and Beraki (2018).30 DOE used the EEI data to define a marginal price as the ratio of the change in the bill to the change in energy consumption. To estimate energy prices in future years, DOE multiplied the 2022 energy prices by the projection of annual average price changes for each of the nine census divisions from the Reference case in AEO2023, which has an end year of 2050.31 To estimate energy prices after 2050, DOE assumed a constant 2050 value for all years. ddrumheller on DSK120RN23PROD with PROPOSALS3 5. Maintenance and Repair Costs Repair costs are associated with repairing or replacing product components that have failed in an appliance; maintenance costs are associated with maintaining the operation of the product. Typically, small incremental increases in product efficiency produce no, or only minor, changes in repair and maintenance costs compared to baseline efficiency products. In the June 2022 Preliminary Analysis, DOE assumed that maintenance and repair costs would not vary by efficiency level and did not include them in the LCC analysis. 30 Coughlin, K. and B. Beraki. 2018. Residential Electricity Prices: A Review of Data Sources and Estimation Methods. Lawrence Berkeley National Laboratory. Berkeley, CA. Report No. LBNL– 2001169. ees.lbl.gov/publications/residentialelectricity-prices-review. 31 EIA. Annual Energy Outlook 2023. Washington, DC. Available at www.eia.gov/forecasts/aeo/ (accessed August 21, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 MIAQ stated that, in general, more efficient dehumidifiers are typically made with more complex components which potentially increases the failure probability and the skill level of the technician required to conduct any repairs. (MIAQ, No. 20 at p. 5) Feedback from manufacturer interviews (see section IV.J.3 of this document) indicated that portable dehumidifiers do not require maintenance costs that would change with efficiency and whole-home dehumidifier consumers are more likely to replace rather than repair their units. Based on this feedback, DOE assumed that portable dehumidifier consumers are also more likely to replace a unit rather than repair it, similar to wholehome units. For this NOPR analysis, DOE did not include maintenance or repair costs for portable or whole-home dehumidifiers. DOE assumes that filter change frequency and cost would not change with efficiency for each product class. DOE notes that higher failure rates for units with more complex technology could potentially indicate a different lifetime for those units. However, DOE is unaware of any data indicating differences in failure rates based on the components used in more efficient dehumidifiers. DOE seeks comment on the assumption that dehumidifier consumers are most likely to replace a broken unit rather than repair it. DOE also seeks available data on the filter change and repair frequency and costs. 6. Product Lifetime In the June 2022 Preliminary Analysis, DOE assumed a lifetime distribution with an average age of 11 years for portable dehumidifiers, based on the June 2016 Final Rule. 81 FR 38338, 38359. In the absence of data specific to whole-home dehumidifiers, DOE assumed that whole-home dehumidifiers would have a lifetime distribution similar to residential packaged central air conditioners that operate in humid climates. For wholehome dehumidifiers, DOE used the lifetime distribution with an average lifetime of 18 years from the Residential Central Air and Heat Pumps Direct Final Rule, published on January 6, 2017. 82 FR 1786. MIAQ stated that since dehumidifiers operate under different conditions than air conditioning equipment, dehumidifiers may have a shorter average lifetime due to increased freeze/ thaw cycling, corrosion from increased water saturation time, and component failure from extreme intake air temperatures. MIAQ suggested a shorter 8- to 12-year lifetime as more applicable PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 76531 for dehumidifiers due to these different conditions. (MIAQ, No. 20 at p. 2) For this NOPR analysis, DOE has included the estimates from MIAQ and other feedback from manufacturers in its lifetime distributions. For portable dehumidifiers, DOE incorporated additional average lifetime estimates from manufacturers indicating an average lifetime of 10 years. A previous estimate of an average lifetime of 12 years from the Northeast Energy Star Lighting and Appliance is no longer available online and thus not included in the lifetime estimates. For wholehome units, as described by MIAQ, dehumidifiers are subject to different operating conditions relative to other air conditioning equipment that could lead to a different average lifetime. For whole-home dehumidifiers, DOE used an average value of 12 years wholehome dehumidifiers based on MIAQ’s comments. 7. Discount Rates In the calculation of LCC, DOE applies discount rates appropriate to households to estimate the present value of future operating cost savings. DOE estimated a distribution of discount rates for dehumidifiers 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.32 The LCC analysis estimates net present value over the lifetime of the product, so the appropriate discount rate will reflect the general opportunity cost of household funds, taking this time scale into account. Given the long time horizon modeled in the LCC 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 32 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. E:\FR\FM\06NOP3.SGM 06NOP3 76532 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 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 in order to approximate a consumer’s opportunity cost of funds related to appliance energy cost savings. It estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board’s triennial Survey of Consumer Finances 33 (‘‘SCF’’) starting in 1995 and ending in 2019. Using the SCF and other sources, DOE developed a distribution of rates for each type of debt and asset by income group to represent the rates that may apply in the year in which amended standards would take effect. DOE assigned each sample household a specific discount rate drawn from one of the distributions. The average rate across all types of household debt and equity and income groups, weighted by the shares of each type, is 4.3 percent. See chapter 8 of the NOPR TSD for further details on the development of consumer discount rates. 8. Energy Efficiency Distribution in the No-New-Standards Case To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE’s LCC analysis considered the projected distribution (market shares) of product efficiencies under the no-new-standards case (i.e., the case without amended or new energy conservation standards). In the June 2022 Preliminary Analysis, DOE used shipmentsweighted efficiency data submitted by percent of the dehumidifier market met ENERGY STAR levels in 2021, compared to 88 percent in 2020 and 80 percent in 2019. On October 10, 2023, EPA released the final recognition criteria for ENERGY STAR Most Efficient 2024, which meet or exceed the proposed standards in all product classes.34 The expected publication of ENERGY STAR specification 6.0 for dehumidifiers in 2024 will likely continue to shift the dehumidifier market toward more efficient products in the absence of a standard. To account for this observed historical trend towards a higher average market efficiency in the absence of a new standard, DOE included an annual improvement of 0.25 percent in the average shipment-weighted IEF, based on trends observed for room air conditioners 35 and also used in the June 2016 Final Rule for dehumidifiers. For whole-home dehumidifiers, in the absence of shipments-weighted data, DOE has maintained the approach of using model counts from the CCD database for the estimation of efficiency distributions and included an annual improvement of 0.25 percent in average shipment-weighted IEF for the no-newstandards case. DOE seeks data and comment on its efficiency distribution estimate and the assumption of an annual efficiency improvement of 0.25 percent and the expected market respond to updated ENERGY STAR 6.0 specifications. The estimated market shares for the no-new-standards case for dehumidifiers in 2028 are shown in Tables IV.4 and IV.5. See chapter 8 of the NOPR TSD for further information on the derivation of the efficiency distributions. AHAM to estimate the efficiency distribution for portable dehumidifiers. DOE used these data in conjunction with the model counts from the Compliance Certification Database (‘‘CCD’’) database to assign market share to efficiency levels defined in the June 2022 Preliminary Analysis. DOE assumed an annual efficiency improvement of 0.25 percent to develop the efficiency distribution in the first year of compliance. AHAM stated that model counts based on the CCD database are not an accurate proxy to estimate the efficiency distribution for portable dehumidifiers. AHAM suggested DOE use shipmentweighted data gathered from AHAM members. AHAM also noted that data from AHAM members indicated that 100 percent of shipments for Product Class 3 are at the baseline efficiency level and the one model in CCD meeting EL 2 is a whole-home dehumidifier. (AHAM, No. 22 at p. 7) DOE thanks AHAM for providing shipments-weighted distributions and has included the data for establishing the efficiency distribution of portable dehumidifiers in 2022. DOE notes in response to AHAM’s note on current market efficiency distribution that the no-new-standards case efficiency distribution used in the LCC is the projected efficiency distribution in the compliance year (2028) and includes the impact of market efficiency trends. For dehumidifiers, the efficiency trend employed by DOE is based on historical market trends towards more efficient products in response to ENERGY STAR criterion updates. The current ENERGY STAR specification 5.0 criterion were adopted in 2019. As indicated by ENERGY STAR shipments data, 94 TABLE IV.5—MARKET SHARE OF EACH EFFICIENCY LEVEL FOR PORTABLE DEHUMIDIFIERS FOR THE NO-NEW-STANDARDS CASE IN 2028 Product class ≤25.00 pints/day 25.01–50.00 pints/day ≥50.01 pints/day Product class market share 19.5% 77.9% 1.1% Integrated energy factor (L/kWh) ddrumheller on DSK120RN23PROD with PROPOSALS3 EL 0 1 2 3 4 5 ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... ............................................................... 1.30 1.40 1.57 1.70 1.94 2.32 33 U.S. Board of Governors of the Federal Reserve System. Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/ scf/scfindex.htm (last accessed February 22, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 Market share (%) Integrated energy factor (L/kWh) 0 25 66 9 0 0 1.60 1.70 1.80 2.01 2.07 2.38 34 Available at https://www.energystar.gov/sites/ default/files/asset/document/ Dehumidifiers%20ENERGY %20STAR%20Most%20Efficient %202024%20Final%20Criteria.pdf. PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 Integrated energy factor (L/kWh) Market share (%) 2.80 3.10 3.30 3.51 3.67 ........................ 86 14 0 0 0 ........................ Market share (%) 0 0 87 13 0 0 35 Ganeshalingam, M., Ni, C., and Yang, H–C. 2021. A Retrospective Analysis of the 2011 Direct Final Rule for Room Air Conditioners. Lawrence Berkeley National Laboratory. LBNL-2001413. E:\FR\FM\06NOP3.SGM 06NOP3 76533 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE IV.6—MARKET SHARE OF EACH EFFICIENCY LEVEL FOR WHOLE-HOME DEHUMIDIFIERS FOR THE NO-NEWSTANDARDS CASE IN 2028 Product class ≤8.0 cu ft case volume >8.0 cu ft case volume Product class market share 1.2% 0.3% EL 0 1 2 3 4 ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... The LCC Monte Carlo simulations draw from the efficiency distributions and randomly assign an efficiency to the dehumidifiers purchased by each sample household in the no-newstandards case. The resulting percent shares within the sample match the market shares in the efficiency distributions. ddrumheller on DSK120RN23PROD with PROPOSALS3 9. Payback Period Analysis The payback period is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more efficient products, compared to baseline products, through energy cost savings. Payback periods that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses. The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the product and the change in the first-year annual operating expenditures relative to the baseline. DOE refers to this as a ‘‘simple PBP’’ because it does not consider changes over time in operating cost savings. The PBP calculation uses the same inputs as the LCC analysis when deriving first-year operating costs. As noted previously, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the first year’s energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE determined the value of the first year’s energy savings by calculating the energy savings in accordance with the applicable DOE test procedure, and multiplying those savings by the average energy price projection for the year in which VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 Integrated energy factor (L/kWh) Market share (%) 1.77 2.09 2.22 2.39 ........................ 8 14 74 4 ........................ compliance with the amended standards would be required. G. Shipments Analysis DOE uses projections of annual product shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.36 The shipments model takes an accounting approach, tracking market shares of each product class and the vintage of units in the stock. Stock accounting uses product shipments as inputs to estimate the age distribution of in-service product stocks for all years. The age distribution of in-service product stocks is a key input to calculations of both the NES and NPV, because operating costs for any year depend on the age distribution of the stock. DOE’s stock accounting model is calibrated based on historical shipments for portable and whole-home dehumidifiers. In the June 2022 Preliminary Analysis, DOE used historical shipments provided by AHAM for portable dehumidifiers and assumed that whole-home dehumidifiers accounted for 1 percent of total dehumidifier shipments. In this NOPR analysis, DOE included 2022 shipments estimates for whole-home dehumidifiers based on feedback from manufacturers indicating whole-home dehumidifiers shipments account for 1.6 percent of the total dehumidifier market. DOE’s shipments model for dehumidifiers considers shipments to replace existing units and to first-time owners. To determine replacement shipments, DOE used survival probability distributions based on average lifetime estimates of 10 years for portable dehumidifiers and 12 years for whole-home dehumidifiers provided by 36 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. PO 00000 Frm 00025 Fmt 4701 Sfmt 4702 Integrated energy factor (L/kWh) Market share (%) 2.41 2.70 3.30 3.81 4.17 54 46 0 0 0 manufacturers. To estimate shipments to first-time owners, DOE used projections of AEO2023 housing stock coupled with the historical shipments data. DOE’s shipments projections include shipments reductions due to consumers that do not replace a failed unit. DOE considers the impacts on shipments from changes in product purchase price associated with higher energy efficiency levels using a price elasticity. As in the June 2022 Preliminary Analysis, DOE employs a price elasticity of ¥0.45 in its shipments model. These values are based on analysis of aggregated data for five residential appliances.37 The market impact is defined as the difference between the product of price elasticity of demand and the change in price due to a standard level. When comparing the first cost of the efficiency level selected for PC1 and PC2 at each TSL, DOE considers that the difference of installed cost in standards case is not significant enough to warrant a product switching scenario that would result in a different market share distribution from the no-new-standards case. Given the small overall market share of PC3, DOE did not include a product switching scenario in the analysis. DOE assumed that consumers are unlikely to purchase multiple lower capacity units in place of a larger capacity unit as a result of a standard. DOE seeks comment on the assumption that dehumidifier consumers’ purchase decision are unlikely to change as a result of a standard. H. National Impact Analysis The NIA assesses the national energy savings (‘‘NES’’) and the NPV from a national perspective of total consumer costs and savings that would be expected to result from new or amended 37 Fujita, K. (2015) Estimating Price Elasticity using Market-Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL–188289. E:\FR\FM\06NOP3.SGM 06NOP3 76534 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules standards at specific efficiency levels.38 (‘‘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 dehumidifiers sold from 2028 through 2057. DOE evaluates the impacts of new or amended standards by comparing a case without such standards with standards- case projections. The no-new-standards case characterizes energy use and consumer costs for each product class in the absence of new or amended energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. DOE compares the no-new-standards case with projections characterizing the market for each product class if DOE adopted new or amended standards at specific energy efficiency levels (i.e., the TSLs or standards cases) for that class. For the standards cases, DOE considers how a given standard would likely affect the market shares of products with efficiencies greater than the standard. DOE uses a spreadsheet model to calculate the energy savings and the national consumer costs and savings from each TSL. Interested parties can review DOE’s analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to probability distributions) as inputs. Table IV.6 summarizes the inputs and methods DOE used for the NIA analysis for the NOPR. Discussion of these inputs and methods follows the table. See chapter 10 of the NOPR TSD for further details. TABLE IV.7—SUMMARY OF INPUTS AND METHODS FOR THE NATIONAL IMPACT ANALYSIS Inputs Method Shipments ................................................................................................. Compliance Date of Standard .................................................................. Efficiency Trends ...................................................................................... Annual Energy Consumption per Unit ...................................................... Total Installed Cost per Unit ..................................................................... Annual Energy Cost per Unit ................................................................... Repair and Maintenance Cost per Unit .................................................... Energy Price Trends ................................................................................. Energy Site-to-Primary and FFC Conversion .......................................... Discount Rate ........................................................................................... Present Year ............................................................................................. ddrumheller on DSK120RN23PROD with PROPOSALS3 1. Product Efficiency Trends A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of the standards cases. DOE developed an energy efficiency distribution for the nonew-standards case (which yields a shipment-weighted average efficiency) for each of the considered product classes for the year of anticipated compliance with an amended or new standard. As described in section IV.F.8 of this document, the efficiency trend used in the no-new-standards case is based on historical market trends towards more efficient product in response to ENERGY STAR specifications. To account for the historical movement towards more efficient products in the market in the absence of a standard, DOE included an annual improvement of 0.25 percent in the average shipment-weighted IEF in each year of the analysis period shipments projection in the no-new- Annual shipments from shipments model. 2028. No-new-standards case: 0.25 percent annual increase in efficiency. Standards cases: Roll-up in compliance year to meet potential efficiency level. Annual weighted-average values are a function of energy use at each TSL. Annual weighted-average values are a function of cost at each TSL. Incorporates projection of future product prices based on historical data. 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. AEO2023 projections to 2050 and constant 2050 value thereafter. A time-series conversion factor based on AEO2023. 3 percent and 7 percent. 2023. standards case. The approach is further described in chapter 10 of the NOPR TSD For the standards cases, DOE used a ‘‘roll-up’’ scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2028). In this scenario, the market shares of products in the no-new-standards case that do not meet the standard under consideration would ‘‘roll up’’ to meet the new standard level, and the market share of products above the standard would remain unchanged. 2. National Energy Savings The national energy savings analysis involves a comparison of national energy consumption of the considered products between each TSL and the case with no new or amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each product (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-new standards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (i.e., the energy consumed by power plants to generate site electricity) using annual conversion factors derived from AEO 2023. Cumulative energy savings are the sum of the NES for each year over the timeframe of the analysis. Use of higher-efficiency products is sometimes associated with a direct rebound effect, which refers to an increase in utilization of the product due to the increase in efficiency. DOE did not find any data on the rebound effect specific to dehumidifiers and assumed no rebound in the NOPR analysis. 38 The NIA accounts for impacts in the 50 states and U.S. territories. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 In 2011, in response to the recommendations of a committee on ‘‘Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards’’ appointed by the National Academy of Sciences, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011, notice, DOE published a statement of amended policy in which DOE explained its determination that EIA’s National Energy Modeling System (‘‘NEMS’’) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector 39 that EIA uses to prepare its Annual Energy Outlook. 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 is described in appendix 10B of the NOPR TSD. 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. As discussed in section IV.F.1 of this document, DOE developed dehumidifier price trends based on historical PPI data. DOE applied the same trends to project prices for each product class at each considered efficiency level. By 2057, which is the end date of the projection period, the average dehumidifier price is projected to drop 25 percent relative to 2028. DOE’s 39 For more information on NEMS, refer to The National Energy Modeling System: An Overview 2018, DOE/EIA–0581(2018), April 2019. Available at https://www.eia.gov/outlooks/aeo/nems/ overview/pdf/0581(2018).pdf (last accessed February 22, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 projection of product prices is described in appendix 10C of the NOPR TSD. To evaluate the effect of uncertainty regarding the price trend estimates, DOE investigated the impact of different product price projections on the consumer NPV for the considered TSLs for dehumidifiers. In addition to the default price trend, DOE considered two product price sensitivity cases: (1) a high price decline case and (2) a low price decline case. In the high price decline case, DOE used a faster price decline for the non-controls portion of the price derived from the same combined price index PPI data for dehumidifiers between 2005 and 2022. In the low price decline case, DOE used the same combined price index PPI data for dehumidifiers between 1983 and 1998. For both high and low price decline cases, DOE used the default price decline for variable-speed blower controls. The derivation of these price trends and the results of these sensitivity cases are described in appendix 10C of the NOPR TSD. The energy cost savings are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average residential energy price changes in the Reference case from AEO2023, which has an end year of 2050. To estimate price trends after 2050, the 2050 value was used for all years. As part of the NIA, DOE also analyzed scenarios that used inputs from variants of the AEO2023 Reference case that have lower and higher economic growth. Those cases have lower and higher energy price trends compared to the Reference case. NIA results based on these cases are presented in appendix 10C of the NOPR TSD. In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7-percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of Management and Budget (‘‘OMB’’) to Federal agencies on the development of regulatory analysis.40 The discount rates for the determination of NPV are in contrast to the discount rates used in the LCC analysis, which are designed to 40 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. PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 76535 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. I. Consumer Subgroup Analysis In analyzing the potential impact of new or amended energy conservation standards on consumers, DOE evaluates the impact on identifiable subgroups of consumers that may be disproportionately affected by a new or amended national standard. The purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. DOE evaluates impacts on particular subgroups of consumers by analyzing the LCC impacts and PBP for those particular consumers from alternative standard levels. For this NOPR, DOE analyzed the impacts of the considered standard levels on two subgroups: (1) low-income households and (2) senior-only households. The analysis used subsets of the RECS 2020 sample composed of households that meet the criteria for the two subgroups. DOE used the LCC and PBP spreadsheet model to estimate the impacts of the considered efficiency levels on these subgroups. Chapter 11 in the NOPR TSD describes the consumer subgroup analysis. J. Manufacturer Impact Analysis 1. Overview DOE performed an MIA to estimate the financial impacts of amended energy conservation standards on manufacturers of dehumidifiers and to estimate the potential impacts of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects and includes analyses of projected industry cash flows, the INPV, investments in research and development (R&D) and manufacturing capital, and domestic manufacturing employment. Additionally, the MIA seeks to determine how amended energy conservation standards might affect manufacturing employment, capacity, and competition, as well as how standards contribute to overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on manufacturer subgroups, including small business manufacturers. The quantitative part of the MIA primarily relies on the GRIM, an industry cash flow model with inputs specific to this proposed rulemaking. E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76536 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules The key GRIM inputs include data on the industry cost structure, unit production costs, product shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant products. The key GRIM outputs are the INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industry-weighted average cost of capital, and the impact to domestic manufacturing employment. The model uses standard accounting principles to estimate the impacts of more-stringent energy conservation standards on a given industry by comparing changes in INPV and domestic manufacturing employment between a no-new-standards case and the various standards cases (i.e., TSLs). To capture the uncertainty relating to manufacturer pricing strategies following amended standards, the GRIM estimates a range of possible impacts under different manufacturer markup scenarios. The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard’s impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the NOPR TSD. DOE conducted the MIA for this rulemaking in three phases. In Phase 1 of the MIA, DOE prepared a profile of the dehumidifier manufacturing industry based on the market and technology assessment, preliminary manufacturer interviews, and publicly available information. This included a top-down analysis of dehumidifier manufacturers that DOE used to derive preliminary financial inputs for the GRIM (e.g., revenues; materials, labor, overhead, and depreciation expenses; selling, general, and administrative expenses (SG&A); and R&D expenses). DOE also used public sources of information to further calibrate its initial characterization of the dehumidifier manufacturing industry, including corporate annual reports, the U.S. Census Bureau’s Annual Survey of Manufactures (ASM),41 and reports from Dun & Bradstreet.42 41 U.S. Census Bureau, Annual Survey of Manufactures. ‘‘Summary Statistics for Industry Groups and Industries in the U.S (2021).’’ Available at: www.census.gov/data/tables/time-series/econ/ asm/2018-2021-asm.html (last accessed March 3, 2023). 42 The Dun & Bradstreet Hoovers login is available at: app.dnbhoovers.com (last accessed March 3, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 In Phase 2 of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of amended energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standard and extending over a 30-year period following the compliance date of the standard. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes. In addition, during Phase 2, DOE developed interview guides to distribute to manufacturers of dehumidifiers in order to develop other key GRIM inputs, including product and capital conversion costs, and to gather additional information on the anticipated effects of energy conservation standards on revenues, direct employment, capital assets, industry competitiveness, and subgroup impacts. In Phase 3 of the MIA, DOE conducted structured, detailed interviews with representative manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. See section IV.J.3 of this document for a description of the key issues raised by manufacturers during the interviews. As part of Phase 3, DOE also evaluated subgroups of manufacturers that may be disproportionately impacted by amended standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash flow analysis. Such manufacturer subgroups may include small business manufacturers, lowvolume manufacturers, niche players, and/or manufacturers exhibiting a cost structure that largely differs from the industry average. DOE identified one subgroup for a separate impact analysis: small business manufacturers. The small business subgroup is discussed in section VI.B of this document, ‘‘Review under the Regulatory Flexibility Act’’ and in chapter 12 of the NOPR TSD. 2. Government Regulatory Impact Model and Key Inputs DOE uses the GRIM to quantify the changes in cash flow due to amended PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 standards that result in a higher or lower industry value. The GRIM uses a standard, annual discounted cash-flow analysis that incorporates manufacturer costs, markups, shipments, and industry financial information as inputs. The GRIM models changes in costs, distribution of shipments, investments, and manufacturer margins that could result from an amended energy conservation standard. The GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning in 2023 (the base year of the analysis) and continuing to 2057. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. For manufacturers of dehumidifiers, DOE used a real discount rate of 8.4 percent, which was derived from industry financials and then modified according to feedback received during manufacturer interviews. The GRIM calculates cash flows using standard accounting principles and compares changes in INPV between the no-new-standards case and each standards case. The difference in INPV between the no-new-standards case and a standards case represents the financial impact of the amended energy conservation standard on manufacturers. As discussed previously, DOE developed critical GRIM inputs using a number of sources, including publicly available data, results of the engineering analysis, and information gathered from industry stakeholders during the course of manufacturer interviews. The GRIM results are presented in section V.B.2 of this document. Additional details about the GRIM, the discount rate, and other financial parameters can be found in chapter 12 of the NOPR TSD. a. Manufacturer Production Costs Manufacturing more efficient equipment is typically more expensive than manufacturing baseline equipment due to the use of more complex components, which are typically more costly than baseline components. The changes in the MPCs of covered products can affect the revenues, gross margins, and cash flow of the industry. DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (i.e., the efficiency-level approach), or (2) determining the incremental efficiency improvements associated with incorporating specific design options to a baseline model (i.e., the design-option approach). In this proposed rulemaking, DOE relied on a combination of the efficiency-level approach and the design-option E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules approach to develop cost estimates at each efficiency level for dehumidifiers, structured around the reverse engineering approach. The analysis involved reviewing publicly available cost and performance information, physically disassembling commercially available products and modeling equipment cost while removing costs associated with non-efficiency related components or features. DOE then considered the incremental steps manufacturers may take to reach higher efficiency levels. In its modeling, DOE started with the baseline MPC and added the expected design options at each higher efficiency level to estimate incremental MPCs. For a complete description of the MPCs, see section IV.C of this document or chapter 5 of the NOPR TSD. ddrumheller on DSK120RN23PROD with PROPOSALS3 b. Shipments Projections The GRIM estimates manufacturer revenues based on total unit shipment projections and the distribution of those shipments by efficiency level. Changes in sales volumes and efficiency distributions over time can significantly affect manufacturer finances. For this analysis, the GRIM uses the NIA’s annual shipment projections derived from the shipments analysis from 2023 (the base year) to 2057 (the end year of the analysis period). The shipments model takes an accounting approach, tracking market shares of each product class and the vintage of units in the stock. Stock accounting uses product shipments as inputs to estimate the age distribution of in-service product stocks for all years. DOE’s stock accounting model is calibrated based on historical shipments for portable and whole-home dehumidifiers. See section IV.G of this document or chapter 9 of the NOPR TSD for additional details. c. Capital and Product Conversion Costs Amended energy conservation standards could cause manufacturers to incur conversion costs to bring their production facilities and equipment designs into compliance. DOE evaluated the level of conversion-related expenditures that would be needed to comply with each considered efficiency level in each product class. For the MIA, DOE classified these conversion costs into two major groups: (1) capital conversion costs; and (2) product conversion costs. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant product designs can be fabricated and assembled. Product conversion costs are investments in research, development, VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 testing, marketing, and other noncapitalized costs necessary to make product designs comply with amended energy conservation standards. DOE relied on feedback from manufacturer interviews and information from the product teardown and engineering analyses to estimate the capital investment required at each analyzed efficiency level. DOE asked manufacturers to estimate the capital conversion costs (e.g., changes in production processes, equipment, and tooling) to implement the various design options. The data generated from the product teardown and engineering analyses were used to estimate the capital investment in equipment and tooling required of OEMs at each efficiency level, considering such factors as product design, raw materials, purchased components, and fabrication method. Changes in equipment and tooling were used to estimate capital conversion costs. DOE relied on feedback from manufacturer interviews, the engineering analysis, and model counts from DOE’s Compliance Certification Database (CCD) to evaluate the product conversion costs industry would likely incur at the considered standard levels. In interviews, DOE asked manufacturers to estimate the redesign effort and engineering resources required at various efficiency levels to quantify the product conversion costs. DOE integrated feedback from manufacturers on redesign effort and staffing to estimate product conversion cost. Manufacturer numbers were aggregated to protect confidential information. DOE used model counts to scale the feedback gathered in interviews to the overall dehumidifier industry. In general, DOE assumes all conversion-related investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standard. The conversion cost figures used in the GRIM can be found in section V.B.2 of this document. For additional information on the estimated capital and product conversion costs, see chapter 12 of the NOPR TSD. d. Manufacturer Markup Scenarios MSPs include direct manufacturing production costs (i.e., labor, materials, and overhead estimated in DOE’s MPCs) and all non-production costs (i.e., SG&A, R&D, and interest), along with profit. To calculate the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs estimated in the engineering analysis for each product class and efficiency level. Modifying these manufacturer markups in the PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 76537 standards case yields different sets of impacts on manufacturers. For the MIA, DOE modeled two standards-case scenarios to represent uncertainty regarding the potential impacts on prices and profitability for manufacturers following the implementation of amended energy conservation standards: (1) a preservation of gross margin percentage scenario; and (2) a preservation of operating profit scenario. These scenarios lead to different manufacturer markup values that, when applied to the MPCs, result in varying revenue and cash flow impacts. Under the preservation of gross margin percentage scenario, DOE applied a single uniform ‘‘gross margin percentage’’ markup across all efficiency levels, which assumes that manufacturers would be able to maintain the same amount of profit as a percentage of revenues at all efficiency levels within a product class. As manufacturer production costs increase with efficiency, this scenario implies that the per-unit dollar profit will increase. DOE assumed a gross margin percentage of 29 percent for all product classes.43 Manufacturers tend to believe it is optimistic to assume that they would be able to maintain the same gross margin percentage as their production costs increase, particularly for minimally efficient products. Therefore, this scenario represents an upper bound of industry profitability under an amended energy conservation standard. In the preservation of operating profit scenario, as the cost of production goes up under a standards case, manufacturers are generally required to reduce their manufacturer markups to a level that maintains base-case operating profit. DOE implemented this scenario in the GRIM by lowering the manufacturer markups at each TSL to yield approximately the same earnings before interest and taxes in the standards case as in the no-newstandards case in the year after the expected compliance date of the amended standards. The implicit assumption behind this scenario is that the industry can only maintain its operating profit in absolute dollars after the standard takes effect. A comparison of industry financial impacts under the two markup scenarios is presented in section V.B.2.a of this document. 43 The gross margin percentage of 29 percent is based on a manufacturer markup of 1.40. E:\FR\FM\06NOP3.SGM 06NOP3 76538 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 3. Manufacturer Interviews DOE interviewed manufacturers representing approximately 52 percent of industry shipments. Participants included both foreign and domestic OEMs with varying market shares and product class offerings. In interviews, DOE asked manufacturers to describe their major concerns regarding potential more stringent energy conservation standards for dehumidifiers. The following section highlights manufacturer concerns that helped inform the projected potential impacts of an amended standard on the industry. Manufacturer interviews are conducted under non-disclosure agreements (NDAs), so DOE does not document these discussions in the same way that it does public comments in the comment summaries and DOE’s responses throughout the rest of this document. a. Increases in Chassis Size In interviews, manufacturers expressed concern about efficiency levels that would necessitate increasing the chassis size to accommodate larger heat exchangers. First, these manufacturers stated that increasing the chassis size would require significant capital investment and engineering time to fully redesign their portfolio of dehumidifier models. Second, manufacturers stated that increasing the chassis size would add significant product costs, which would likely lead to lower sales volumes if consumers are not willing to pay for the higher upfront cost. Third, manufacturers of portable dehumidifiers with overseas production facilities expressed concern that increasing the chassis or cabinet size would negatively impact the loading capacity of the shipping container and increase shipping costs. Finally, some portable dehumidifier manufacturers expressed concern that the 3-year compliance period would be insufficient to develop cost-optimized models with new chassis designs to accommodate larger heat exchangers across their entire product portfolio. ddrumheller on DSK120RN23PROD with PROPOSALS3 b. Refrigerant Regulation In interviews, manufacturers noted that new refrigerant regulations restrict the use of high-global warming potential (GWP) refrigerants in dehumidifiers, which increases cumulative regulatory burden. Specifically, during interviews, manufacturers discussed State regulations, such as CARB’s rulemaking prohibiting the use of refrigerants with a GWP of 750 or greater starting January 1, 2023 for self-contained, residential dehumidifiers and starting January 1, VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 2025 for whole-home dehumidifiers.44 45 Most manufacturers of portable dehumidifiers noted that they would likely transition to R–32, which is a classified as a flammable refrigerant.46 A whole-home manufacturer expressed uncertainty about the choice of lowGWP refrigerants but noted that the various alternative refrigerant options being considered are also classified as flammable refrigerants. All manufacturers interviewed stated that transitioning to a low-GWP refrigerant requires notable engineering time and capital investment to update production facilities to accommodate flammable refrigerants. Some portable dehumidifier manufacturers with experience transitioning other products (e.g., portable air conditioners) to make use of R–32 stated that the dehumidifier transition would be relatively straightforward given their prior experience with R–32. In interviews, manufacturers indicated that they had already started the development process but were waiting on EPA to finalize its SNAP proposed rule before starting production of dehumidifiers with lowGWP refrigerants. EPA has since finalized the SNAP rule allowing for the use of R–32. See 88 FR 26382. 4. Discussion of MIA Comments In response to the June 2022 Preliminary Analysis, AHAM requested that DOE consider the impacts of tariffs on manufacturers, noting that manufacturers currently pay an additional 25 percent tariff under the China Section 301 tariffs for importing dehumidifiers on top of existing excise taxes and tariffs. According to AHAM, shipping costs are also impacted due to the shortage in shipping containers and lack of availability of transport to deliver manufactured products. (AHAM, No. 22 at pp. 3–4) 44 State of California Air Resource Board, ‘‘Prohibitions on Use of Certain Hydrofluorocarbons in Stationary Refrigeration, Chillers, AerosolsPropellants, and Foam End-Uses Regulation.’’ Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/ 2020/hfc2020/frorevised.pdf (last accessed March 4, 2023). 45 In a public hearing to consider the proposed amendments to the Prohibitions on the Use of Certain Hydrofluorocarbons in Stationary Refrigeration, Chillers, Aerosols-Propellants, and Foam End-Uses regulation, CARB stated that a whole home dehumidifier would be regulated as ‘‘Other Air-Conditioning Equipment’’ with a regulation effective date of January 1, 2025, and not as a ‘‘Residential Dehumidifier,’’ which is both selfcontained and portable. Public hearing date December 10, 2020. Agenda item number: 20–13– 4. ww2.arb.ca.gov/sites/default/files/barcu/regact/ 2020/hfc2020/fsorrevised.pdf (last accessed March 4, 2023). 46 R–32 is classified as an A2L refrigerant. The A2L class defines refrigerants that are nontoxic, but mildly flammable. PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 Based on information from manufacturer interviews and a review of model listings from DOE’s CCD, DOE assumes nearly all portable units with 25.00 pints/day or less (Product Class 1) and portable units with 25.01 to 50.00 pints/day (Product Class 2) are manufactured in Asia. DOE also assumes that 50 percent of portable units greater than 50.00 pints/day (Product Class 3) and 20 percent of whole-home units (Product Classes 4 and 5) are manufactured in Asia. Regarding U.S. tariffs on Chinese imports, DOE is aware that the Section 301 tariffs on dehumidifiers increased to 10 percent in September 2018 and to 25 percent in May 2019. As result of tariffs, DOE expects that manufactures will begin to shift production of these products to countries in East Asia and Southeast Asia not subject to Section 301 tariffs. However, due to uncertainty about the exact countries of origin, DOE’s engineering analysis continues to rely on data based on a Chinese point of origin. To revise MPCs to account for points of origin outside of China, DOE would require information on the countries of manufacture and 5-year averages for key inputs used to develop manufacturer production costs, such as fully-burdened production labor wage rates and local raw material prices. To better model the impact of Section 301 tariffs on dehumidifiers that continue to be manufactured in China, DOE requires additional information about the portion of products still manufactured there and how the tariffs are absorbed by the entities along the room AC value chain, such as the foreign OEMs, U.S. importers, retailers, and consumers. Increases in retail price may affect consumer purchasing decisions, as captured by the price sensitivity modeled in the shipments analysis. Furthermore, DOE considers the costs of overseas and domestic shipping in its calculation of consumer price used in the LCC and PBP analyses. AHAM stated that manufacturers will face significant retooling and redesign costs if existing chassis sizes are insufficient to implement the technology options specified in the June 2022 Preliminary Analysis. (AHAM, No. 22 at p. 3) DOE used results of the product teardown and engineering analyses as well as feedback from confidential manufacturer interviews to estimate the capital and product conversion costs required to reach each analyzed efficiency level, which included design options that would require a change in chassis size. See section IV.J.2.c of this document for a discussion on the conversion cost methodology and E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 section V.B.2.a of this document for a description of conversion costs by TSL. MIAQ stated that in addition to small business manufacturers, refrigerant desiccant dehumidifier manufacturers could also be disproportionally affected by amended energy conservation standards for dehumidifiers. (MIAQ, No. 20 at pp. 5–6) At the time of this NOPR analysis, DOE is not aware of any consumer refrigerant desiccant dehumidifiers currently available on the market. However, DOE tentatively expects that manufacturers of refrigerant desiccant dehumidifiers would follow a similar design path as pure refrigerant-based whole-home dehumidifiers if they were to introduce new models of consumer refrigerant desiccant dehumidifiers to the market. Thus, DOE tentatively determined that the industry analysis reasonably represents the potential impacts to refrigerant desiccant dehumidifier manufacturers. DOE requests comment on its tentative conclusion that refrigerant desiccant dehumidifier manufacturers would be similarly impacted by potential amended standards and therefore would not warrant a separate subgroup analysis. K. Emissions Analysis The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO2, NOX, SO2, and Hg. The second component estimates the impacts of potential standards on emissions of two additional greenhouse gases, CH4 and N2O, as well as the reductions to emissions of other gases due to ‘‘upstream’’ activities in the fuel production chain. These upstream activities comprise extraction, processing, and transporting fuels to the site of combustion. The analysis of electric power sector emissions of CO2, NOX, SO2, and Hg uses emissions factors intended to represent the marginal impacts of the change in electricity consumption associated with amended or new standards. The methodology is based on results published for the AEO, including a set of side cases that implement a variety of efficiency-related policies. The methodology is described in appendix 13A in the NOPR TSD. The analysis presented in this document uses projections from AEO2023. Power sector emissions of CH4 and N2O from fuel combustion are estimated using Emission Factors for Greenhouse Gas Inventories published by the Environmental Protection Agency VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 (EPA).47 FFC upstream emissions, which include emissions from fuel combustion during extraction, processing, and transportation of fuels, and ‘‘fugitive’’ emissions (direct leakage to the atmosphere) of CH4 and CO2, are estimated based on the methodology described in chapter 15 of the NOPR TSD. The emissions intensity factors are expressed in terms of physical units per megawatt hour (MWh) or metric million British thermal unit MMBtu of site energy savings. For power sector emissions, specific emissions intensity factors are calculated by sector and end use. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis. 1. Air Quality Regulations Incorporated in DOE’s Analysis DOE’s no-new-standards case for the electric power sector reflects the AEO, which incorporates the projected impacts of existing air quality regulations on emissions. AEO2023 reflects, to the extent possible, laws and regulations adopted through midNovember 2022, including the emissions control programs discussed in the following paragraphs and the Inflation Reduction Act.48 SO2 emissions from affected electric generating units (‘‘EGUs’’) are subject to nationwide and regional emissions capand-trade programs. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for affected EGUs in the 48 contiguous States and the District of Columbia (‘‘DC’’). (42 U.S.C. 7651 et seq.) SO2 emissions from numerous States in the eastern half of the United States are also limited under the CrossState Air Pollution Rule (‘‘CSAPR’’). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce certain emissions, including annual SO2 emissions, and went into effect as of January 1, 2015.49 The AEO 47 Available at www.epa.gov/sites/production/ files/2021-04/documents/emission-factors_ apr2021.pdf (last accessed July 12, 2021). 48 For further information, see the Assumptions to AEO2023 report that sets forth the major assumptions used to generate the projections in the Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed August 21, 2023). 49 CSAPR requires states to address annual emissions of SO2 and NOX, precursors to the formation of fine particulate matter (PM2.5) pollution, in order to address the interstate transport of pollution with respect to the 1997 and 2006 PM2.5 National Ambient Air Quality Standards (‘‘NAAQS’’). CSAPR also requires certain states to address the ozone season (May–September) emissions of NOX, a precursor to the formation of ozone pollution, in order to address the interstate transport of ozone pollution with respect to the PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 76539 incorporates implementation of CSAPR, including the update to the CSAPR ozone season program emission budgets and target dates issued in 2016. 81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is enforced through the use of tradable emissions allowances. Under existing EPA regulations, any excess SO2 emissions allowances resulting from the lower electricity demand caused by the adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions by another regulated EGU. However, beginning in 2016, SO2 emissions began to fall as a result of the Mercury and Air Toxics Standards (‘‘MATS’’) for power plants. 77 FR 9304 (Feb. 16, 2012). Because of the emissions reductions under the MATS, it is unlikely that excess SO2 emissions allowances resulting from the lower electricity demand would be needed or used to permit offsetting increases in SO2 emissions by another regulated EGU. Therefore, energy conservation standards that decrease electricity generation would generally reduce SO2 emissions. DOE estimated SO2 emissions reduction using emissions factors based on AEO2023. CSAPR also established limits on NOX emissions for numerous States in the eastern half of the United States. Energy conservation standards would have little effect on NOX emissions in those States covered by CSAPR emissions limits if excess NOX emissions allowances resulting from the lower electricity demand could be used to permit offsetting increases in NOX emissions from other EGUs. In such case, NOX emissions would remain near the limit even if electricity generation goes down. A different case could possibly result, depending on the configuration of the power sector in the different regions and the need for allowances, such that NOX emissions might not remain at the limit in the case of lower electricity demand. In this case, energy conservation standards might reduce NOX emissions in covered States. Despite this possibility, DOE has chosen to be conservative in its analysis and has maintained the assumption that standards will not reduce NOX emissions in States covered by CSAPR. Energy conservation standards would be expected to reduce NOX emissions in the States not covered by CSAPR. DOE used AEO2023 data to derive NOX 1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a supplemental rule that included an additional five states in the CSAPR ozone season program. 76 FR 80760 (Dec. 27, 2011) (Supplemental Rule). E:\FR\FM\06NOP3.SGM 06NOP3 76540 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules emissions factors for the group of States not covered by CSAPR. The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE’s energy conservation standards would be expected to slightly reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on AEO2023, which incorporates the MATS. ddrumheller on DSK120RN23PROD with PROPOSALS3 L. Monetizing Emissions Impacts As part of the development of this proposed rule, for the purpose of complying with the requirements of Executive Order (‘‘E.O.’’) 12866, DOE considered the estimated monetary benefits from the reduced emissions of CO2, CH4, N2O, NOX, and SO2 that are expected to result from each of the TSLs considered. In order to make this calculation analogous to the calculation of the NPV of consumer benefit, DOE considered the reduced emissions expected to result over the lifetime of products shipped in the projection period for each TSL. This section summarizes the basis for the values used for monetizing the emissions benefits and presents the values considered in this NOPR. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). DOE requests comment on how to address the climate benefits and other effects of the proposal. 1. Monetization of Greenhouse Gas Emissions DOE estimates the monetized benefits of the reductions in emissions of CO2, CH4, and N2O by using a measure of the social cost (‘‘SC’’) of each pollutant (e.g., SC–CO2). These estimates represent the monetary value of the net harm to society associated with a marginal increase in emissions of these pollutants in a given year, or the benefit of avoiding that increase. These estimates are intended to include (but are not limited to) climate change-related changes in net agricultural productivity, human health, property damages from increased flood risk, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. DOE exercises its own judgment in presenting monetized climate benefits as recommended by applicable VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 executive orders, and DOE would reach the same conclusion presented in this proposed rulemaking in the absence of the social cost of greenhouse gases. That is, the social costs of greenhouse gases, whether measured using the February 2021 interim estimates presented by the Interagency Working Group on the Social Cost of Greenhouse Gases or by another means, did not affect the rule ultimately proposed by DOE. DOE estimated the global social benefits of CO2, CH4, and N2O reductions (i.e., SC–GHGs) using the estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under E.O. 13990, published in February 2021 by the IWG (‘‘February 2021 SC–GHG TSD’’). The SC–GHGs is the monetary value of the net harm to society associated with a marginal increase in emissions in a given year, or the benefit of avoiding that increase. In principle, SC–GHGs includes the value of all climate change impacts, including (but not limited to) changes in net agricultural productivity, human health effects, property damage from increased flood risk and natural disasters, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services. The SC–GHGs therefore reflects the societal value of reducing emissions of the gas in question by one metric ton. The SC–GHGs is the theoretically appropriate value to use in conducting benefit-cost analyses of policies that affect CO2, N2O, and CH4 emissions. As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees that the interim SC–GHG estimates represent the most appropriate estimate of the SC–GHG until revised estimates have been developed reflecting the latest peer-reviewed science. The SC–GHG estimates presented in this NOPR were developed over many years using a transparent process, the best science available at the time of that process, peer-reviewed methodologies, and input from the public. Specifically, in 2009, the IWG—which included the DOE and other executive branch agencies and offices—was established to ensure that agencies were using the best available science and to promote consistency in the social cost of carbon (‘‘SC–CO2’’) values used across agencies. The IWG published SC–CO2 estimates in 2010 that were developed from an ensemble of three widely cited integrated assessment models (‘‘IAMs’’) that estimate global climate damages using highly aggregated representations of climate processes and the global PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 economy combined into a single modeling framework. The three IAMs were run using a common set of input assumptions in each model for future population, economic, and CO2 emissions growth, as well as equilibrium climate sensitivity—a measure of the globally averaged temperature response to increased atmospheric CO2 concentrations. These estimates were updated in 2013 based on new versions of each IAM. In August 2016, the IWG published estimates of the social cost of methane (‘‘SC–CH4’’) and nitrous oxide (‘‘SC–N2O’’) using methodologies that are consistent with the methodology underlying the SC– CO2 estimates. The modeling approach that extends the IWG SC–CO2 methodology to non-CO2 GHGs has undergone multiple stages of peer review. The SC–CH4 and SC–N2O estimates were developed by Marten et al.50 and underwent a standard doubleblind peer review process prior to journal publication. In 2015, as part of the response to public comments received to a 2013 solicitation for comments on the SC–CO2 estimates, the IWG announced a National Academies of Sciences, Engineering, and Medicine (‘‘National Academies’’) review of the SC–CO2 estimates to offer advice on how to approach future updates to ensure that the estimates continue to reflect the best available science and methodologies. In January 2017, the National Academies released their final report, Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide, and recommended specific criteria for future updates to the SC–CO2 estimates, a modeling framework to satisfy the specified criteria, and both near-term updates and longer-term research needs pertaining to various components of the estimation process.51 Shortly thereafter, in March 2017, President Trump issued E.O. 13783, which disbanded the IWG, withdrew the previous TSDs, and directed agencies to ensure SC–CO2 estimates used in regulatory analyses are consistent with the guidance contained in OMB’s Circular A–4, ‘‘including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount 50 Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, and A. Wolverton. Incremental CH4 and N2O mitigation benefits consistent with the US Government’s SC–CO2 estimates. Climate Policy. 2015. 15(2): pp. 272–298. 51 National Academies of Sciences, Engineering, and Medicine. Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide. 2017. The National Academies Press: Washington, DC. E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules rates’’ (E.O. 13783, Section 5(c)). Benefit-cost analyses following E.O. 13783 used SC–GHG estimates that attempted to focus on the U.S.-specific share of climate change damages as estimated by the models and were calculated using two discount rates recommended by Circular A–4: 3percent and 7-percent. All other methodological decisions and model versions used in SC–GHG calculations remained the same as those used by the IWG in 2010 and 2013, respectively. On January 20, 2021, President Biden issued E.O. 13990, which re-established the IWG and directed it to ensure that the U.S. Government’s estimates of the social cost of carbon and other greenhouse gases reflect the best available science and the recommendations in the National Academies 2017 report. The IWG was tasked with first reviewing the SC–GHG estimates currently used in Federal analyses and publishing interim estimates within 30 days of the E.O. that reflect the full impact of GHG emissions, including by taking global damages into account. The interim SC– GHG estimates published in February 2021 are used here to estimate the climate benefits for this proposed rulemaking. The E.O. instructs the IWG to undertake a fuller update of the SC– GHG estimates that takes into consideration the advice of the National Academies 2017 report and other recent scientific literature. The February 2021 SC–GHG TSD provides a complete discussion of the IWG’s initial review conducted under E.O. 13990. In particular, the IWG found that the SC– GHG estimates used under E.O. 13783 fail to reflect the full impact of GHG emissions in multiple ways. First, the IWG found that the SC–GHG estimates used under E.O. 13783 fail to fully capture many climate impacts that affect the welfare of U.S. citizens and residents, and those impacts are better reflected by global measures of the SC– GHG. Examples of omitted effects from the E.O. 13783 estimates include direct effects on U.S. citizens, assets, and investments located abroad, supply chains, U.S. military assets and interests abroad, and tourism, and spillover pathways such as economic and political destabilization and global migration that can lead to adverse impacts on U.S. national security, public health, and humanitarian concerns. In addition, assessing the benefits of U.S. GHG mitigation activities requires consideration of how those actions may affect mitigation activities by other countries, as those international mitigation actions will provide a benefit to U.S. citizens and VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 residents by mitigating climate impacts that affect U.S. citizens and residents. A wide range of scientific and economic experts have emphasized the issue of reciprocity as support for considering global damages of GHG emissions. If the United States does not consider impacts on other countries, it is difficult to convince other countries to consider the impacts of their emissions on the United States. The only way to achieve efficient allocation of resources for emissions reduction on a global basis—and so benefit the U.S. and its citizens—is for all countries to base their policies on global estimates of damages. As a member of the IWG involved in the development of the February 2021 SC– GHG TSD, DOE agrees with this assessment and, therefore, in this proposed rule DOE centers attention on a global measure of SC–GHG. This approach is the same as that taken in DOE regulatory analyses from 2012 through 2016. A robust estimate of climate damages that accrue only to U.S. citizens and residents does not currently exist in the literature. As explained in the February 2021 TSD, existing estimates are both incomplete and an underestimation of total damages that accrue to the citizens and residents of the U.S. because they do not fully capture the regional interactions and spillovers discussed above, nor do they include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature. As noted in the February 2021 SC–GHG TSD, the IWG will continue to review developments in the literature, including more robust methodologies for estimating a U.S.-specific SC–GHG value, and explore ways to better inform the public of the full range of carbon impacts. As a member of the IWG, DOE will continue to follow developments in the literature pertaining to this issue. Second, the IWG found that the use of the social rate of return on capital (7 percent under current OMB Circular A– 4 guidance) to discount the future benefits of reducing GHG emissions inappropriately underestimates the impacts of climate change for the purposes of estimating the SC–GHG. Consistent with the findings of the National Academies and the economic literature, the IWG continued to conclude that the consumption rate of interest is the theoretically appropriate discount rate in an intergenerational context,52 and recommended that 52 Interagency Working Group on Social Cost of Carbon, United States Government. Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 76541 discount rate uncertainty and relevant aspects of intergenerational ethical considerations be accounted for in selecting future discount rates. Furthermore, the damage estimates developed for use in the SC–GHG are estimated in consumption-equivalent terms, and so an application of OMB Circular A–4’s guidance for regulatory analysis would then use the consumption discount rate to calculate the SC–GHG. DOE agrees with this assessment and will continue to follow developments in the literature pertaining to this issue. DOE also notes that while OMB Circular A–4, as published in 2003, recommends using 3-percent and 7-percent discount rates as ‘‘default’’ values, Circular A–4 also reminds agencies that ‘‘different regulations may call for different emphases in the analysis, depending on the nature and complexity of the regulatory issues and the sensitivity of the benefit and cost estimates to the key assumptions.’’ On discounting, Circular A–4 recognizes that ‘‘special ethical considerations arise when comparing benefits and costs across generations,’’ and Circular A–4 acknowledges that analyses may appropriately ‘‘discount future costs and consumption benefits . . . at a lower rate than for intragenerational analysis.’’ In the 2015 Response to Comments on the Social Cost of Carbon for Regulatory Impact Analysis, OMB, DOE, and the other IWG members recognized that ‘‘Circular A–4 is a living document’’ and ‘‘the use of 7 percent is not considered appropriate for intergenerational discounting. There is wide support for this view in the academic literature, and it is recognized in Circular A–4 itself.’’ Thus, DOE 12866. 2010. Available at www.epa.gov/sites/ default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 2022); Interagency Working Group on Social Cost of Carbon, United States Government. Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order No. 12866. 2013. Available at www.federalregister.gov/documents/2013/11/26/ 2013-28242/technical-support-document-technicalupdate-of-the-social-cost-of-carbon-for-regulatoryimpact (last accessed April 15, 2022); Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Technical Support Document: Technical Update on the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. August 2016. Available at www.epa.gov/sites/default/files/2016-12/ documents/sc_co2_tsd_august_2016.pdf (last accessed January 18, 2022); Interagency Working Group on Social Cost of Greenhouse Gases, United States Government. Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866: Application of the Methodology to Estimate the Social Cost of Methane and the Social Cost of Nitrous Oxide. August 2016. www.epa.gov/sites/ default/files/2016-12/documents/addendum_to_scghg_tsd_august_2016.pdf (last accessed January 18, 2022). E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76542 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules concludes that a 7-percent discount rate is not appropriate to apply to value the social cost of greenhouse gases in the analysis presented in this analysis. To calculate the present and annualized values of climate benefits, DOE uses the same discount rate as the rate used to discount the value of damages from future GHG emissions, for internal consistency. That approach to discounting follows the same approach that the February 2021 TSD recommends ‘‘to ensure internal consistency—i.e., future damages from climate change using the SC–GHG at 2.5 percent should be discounted to the base year of the analysis using the same 2.5 percent rate.’’ DOE has also consulted the National Academies’ 2017 recommendations on how SC–GHG estimates can ‘‘be combined in RIAs with other cost and benefits estimates that may use different discount rates.’’ The National Academies reviewed several options, including ‘‘presenting all discount rate combinations of other costs and benefits with [SC–GHG] estimates.’’ As a member of the IWG involved in the development of the February 2021 SC–GHG TSD, DOE agrees with the above assessment and will continue to follow developments in the literature pertaining to this issue. While the IWG works to assess how best to incorporate the latest peer-reviewed science to develop an updated set of SC–GHG estimates, it set the interim estimates to be the most recent ones developed by the IWG prior to the group being disbanded in 2017. The estimates rely on the same models and harmonized inputs and are calculated using a range of discount rates. As explained in the February 2021 SC–GHG TSD, the IWG has recommended that agencies revert to the same set of four values drawn from the SC–GHG distributions based on three discount rates as were used in regulatory analyses between 2010 and 2016 and were subject to public comment. For each discount rate, the IWG combined the distributions across models and socioeconomic emissions scenarios (applying equal weight to each) and then selected a set of four values recommended for use in benefitcost analyses: an average value resulting from the model runs for each of three VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 discount rates (2.5-percent, 3-percent, and 5-percent), plus a fourth value, selected as the 95th percentile of estimates based on a 3-percent discount rate. The fourth value was included to provide information on potentially higher-than-expected economic impacts from climate change. As explained in the February 2021 SC–GHG TSD, and DOE agrees, this update reflects the immediate need to have an operational SC–GHG for use in regulatory benefitcost analyses and other applications developed using a transparent process, the science available at the time of that process, and peer-reviewed methodologies. Those estimates were subject to public comment in the context of dozens of proposed rulemakings as well as in a dedicated public comment period in 2013. There are a number of limitations and uncertainties associated with the SC– GHG estimates. First, the current scientific and economic understanding of discounting approaches suggests discount rates appropriate for intergenerational analysis in the context of climate change are likely to be less than 3 percent, near 2 percent, or lower.53 Second, the IAMs used to produce these interim estimates do not include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature and the science underlying their ‘‘damage functions’’ (i.e., the core parts of the IAMs that map global mean temperature changes and other physical impacts of climate change into economic (both market and nonmarket) damages) lags behind the most recent research. For example, limitations include the incomplete treatment of catastrophic and non-catastrophic impacts in the integrated assessment models, their incomplete treatment of adaptation and technological change, the incomplete way in which inter-regional and 53 Interagency Working Group on Social Cost of Greenhouse Gases (IWG). 2021. Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990. February. United States Government. Available at https://www.whitehouse.gov/wpcontent/uploads/2021/02/ TechnicalSupportDocument_ SocialCostofCarbonMethaneNitrousOxide.pdf. PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 intersectoral linkages are modeled, uncertainty in the extrapolation of damages to high temperatures, and inadequate representation of the relationship between the discount rate and uncertainty in economic growth over long time horizons. Likewise, the socioeconomic and emissions scenarios used as inputs to the models do not reflect new information from the last decade of scenario generation or the full range of projections. The modeling limitations do not all work in the same direction in terms of their influence on the SC–CO2 estimates. However, as discussed in the February 2021 TSD, the IWG has recommended that, taken together, the limitations suggest that the interim SC–GHG estimates used in this proposed rule likely underestimate the damages from GHG emissions. DOE concurs with this assessment. DOE’s derivations of the SC–CO2, SC– N2O, and SC–CH4 values used for this NOPR are discussed in the following sections, and the results of DOE’s analyses estimating the benefits of the reductions in emissions of these GHGs are presented in section V.B.6 of this document. a. Social Cost of Carbon The SC–CO2 values used for this final rule were based on the values developed for the IWG’s February 2021 TSD, which are shown in Table IV.7 in five-year increments from 2020 to 2050. The set of annual values that DOE used, which was adapted from estimates published by EPA,54 is presented in appendix 14A of the NOPR TSD. These estimates are based on methods, assumptions, and parameters identical to the estimates published by the IWG (which were based on EPA modeling), and include values for 2051 to 2070. DOE expects additional climate benefits to accrue for products still operating after 2070, but a lack of available SC–CO2 estimates for emissions years beyond 2070 prevents DOE from monetizing these potential benefits in this analysis. 54 See EPA, Revised 2023 and Later Model Year Light-Duty Vehicle GHG Emissions Standards: Regulatory Impact Analysis, Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023). E:\FR\FM\06NOP3.SGM 06NOP3 76543 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE IV.8—ANNUAL SC–CO2 VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton CO2] Discount rate and statistic Year 2020 2025 2030 2035 2040 2045 2050 5% 3% 2.5% 3% Average Average Average 95th percentile ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. ................................................................................................................. DOE multiplied the CO2 emissions reduction estimated for each year by the SC–CO2 value for that year in each of the four cases. DOE adjusted the values to 2022$ using the implicit price deflator for GDP from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the four cases using the specific 14 17 19 22 25 28 32 51 56 62 67 73 79 85 discount rate that had been used to obtain the SC–CO2 values in each case. b. Social Cost of Methane and Nitrous Oxide The SC–CH4 and SC–N2O values used for this NOPR were based on the values developed for the February 2021 TSD. Table IV.8 shows the updated sets of SC–CH4 and SC–N2O estimates from the latest interagency update in 5-year 76 83 89 96 103 110 116 152 169 187 206 225 242 260 increments from 2020 to 2050. The full set of annual values used is presented in appendix 14A of the NOPR TSD. To capture the uncertainties involved in regulatory impact analysis, DOE has determined it is appropriate to include all four sets of SC–CH4 and SC–N2O values, as recommended by the IWG. DOE derived values after 2050 using the approach described above for the SC– CO2 values. TABLE IV.9—ANNUAL SC–CH4 AND SC–N2O VALUES FROM 2021 INTERAGENCY UPDATE, 2020–2050 [2020$ per metric ton] SC–CH4 SC–N2O Discount rate and statistic Discount rate and statistic Year 2020 2025 2030 2035 2040 2045 2050 5% 3% 2.5% 3% 5% 3% 2.5% 3% Average Average Average 95th percentile Average Average Average 95th percentile .................................. .................................. .................................. .................................. .................................. .................................. .................................. 670 800 940 1,100 1,300 1,500 1,700 1,500 1,700 2,000 2,200 2,500 2,800 3,100 ddrumheller on DSK120RN23PROD with PROPOSALS3 DOE multiplied the CH4 and N2O emissions reduction estimated for each year by the SC–CH4 and SC–N2O estimates for that year in each of the cases. DOE adjusted the values to 2022$ using the implicit price deflator for GDP from the Bureau of Economic Analysis. To calculate a present value of the stream of monetary values, DOE discounted the values in each of the cases using the specific discount rate that had been used to obtain the SC–CH4 and SC–N2O estimates in each case. 2. Monetization of Other Emissions Impacts For the NOPR, DOE estimated the monetized value of NOX and SO2 emissions reductions from electricity generation using the latest benefit per ton estimates for that sector from the EPA’s Benefits Mapping and Analysis VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 2,000 2,200 2,500 2,800 3,100 3,500 3,800 3,900 4,500 5,200 6,000 6,700 7,500 8,200 5,800 6,800 7,800 9,000 10,000 12,000 13,000 Program.55 DOE used EPA’s values for PM2.5-related benefits associated with NOX and SO2 and for ozone-related benefits associated with NOX for 2025, 2030, and 2040, calculated with discount rates of 3-percent and 7percent. DOE used linear interpolation to define values for the years not given in the 2025 to 2040 period; for years beyond 2040, the values are held constant. DOE combined the EPA regional benefit-per-ton estimates with regional information on electricity consumption and emissions from AEO2023 to define weighted-average national values for NOX and SO2 (see appendix 14B of the NOPR TSD). 55 U.S. Environmental Protection Agency. Estimating the Benefit per Ton of Reducing Directly-Emitted PM2.5,PM2.5 Precursors and Ozone Precursors from 21 Sectors. www.epa.gov/benmap/ estimating-benefit-ton-reducing-directly-emittedpm25-pm25-precursors-and-ozone-precursors. PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 18,000 21,000 23,000 25,000 28,000 30,000 33,000 27,000 30,000 33,000 36,000 39,000 42,000 45,000 48,000 54,000 60,000 67,000 74,000 81,000 88,000 M. Utility Impact Analysis The utility impact analysis estimates the changes in installed electrical capacity and generation projected to result for each considered TSL. The analysis is based on published output from the NEMS associated with AEO2023. NEMS produces the AEO Reference case, as well as a number of side cases that estimate the economywide impacts of changes to energy supply and demand. For the current analysis, impacts are quantified by comparing the levels of electricity sector generation, installed capacity, fuel consumption and emissions in the AEO2023 Reference case and various side cases. Details of the methodology are provided in the appendices to chapters 13 and 15 of the NOPR TSD. The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, E:\FR\FM\06NOP3.SGM 06NOP3 76544 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 primary fuel consumption, installed capacity and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of potential new or amended energy conservation standards. N. Employment Impact Analysis DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts from new or amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the products subject to standards, their suppliers, and related service firms. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, caused by (1) reduced spending by consumers on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on the products to which the new standards apply and other goods and services, and (4) the effects of those three factors throughout the economy. One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department’s Bureau of Labor Statistics (‘‘BLS’’). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.56 There are many reasons for these differences, including wage differences and the fact that the utility sector is more capital-intensive and less 56 See U.S. Department of Commerce—Bureau of Economic Analysis. Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II). 1997. U.S. Government Printing Office: Washington, DC. Available at https:// www.bea.gov/sites/default/files/methodologies/ RIMSII_User_Guide.pdf (last accessed February 22, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 labor-intensive than other sectors. Energy conservation standards have the effect of reducing consumer utility bills. Because reduced consumer expenditures for energy likely lead to increased expenditures in other sectors of the economy, the general effect of efficiency standards is to shift economic activity from a less labor-intensive sector (i.e., the utility sector) to more labor-intensive sectors (e.g., the retail and service sectors). Thus, the BLS data suggest that net national employment may increase due to shifts in economic activity resulting from energy conservation standards. DOE estimated indirect national employment impacts for the standard levels considered in this NOPR using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 4 (‘‘ImSET’’).57 ImSET is a special-purpose version of the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was designed to estimate the national employment and income effects of energy-saving technologies. The ImSET software includes a computer-based I–O model having structural coefficients that characterize economic flows among 187 sectors most relevant to industrial, commercial, and residential building energy use. DOE notes that ImSET is not a general equilibrium forecasting model, and that the uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may overestimate actual job impacts over the long run for this rule. Therefore, DOE used ImSET only to generate results for near-term timeframes (2028–2032), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the NOPR TSD. V. Analytical Results and Conclusions The following section addresses the results from DOE’s analyses with respect to the considered energy conservation standards for dehumidifiers. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for dehumidifiers, and the standards levels that DOE is proposing to adopt in this NOPR. Additional 57 Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model Description and User Guide. 2015. Pacific Northwest National Laboratory: Richland, WA. PNNL–24563. PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 details regarding DOE’s analyses are contained in the NOPR TSD supporting this document. A. Trial Standard Levels In general, DOE typically evaluates new or potential amended standards for products and equipment by grouping individual efficiency levels for each class into TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost interactions between the product classes, to the extent that there are such interactions, and price elasticity of consumer purchasing decisions that may change when different standard levels are set. In the analysis conducted for this NOPR, DOE analyzed the benefits and burdens of four TSLs for dehumidifiers. DOE developed TSLs that combine efficiency levels for each analyzed product class. TSL 1 represents the smallest incremental increase in analyzed efficiency level above the baseline for each analyzed product class. TSL 2 corresponds to current ENERGY STAR® requirements for all product classes. TSL 3 is an intermediate TSL that maintains positive average LCC savings for all product classes while increasing stringency for Product Classes 1, 2, 4, and 5. TSL 4 represents max-tech. DOE presents the results for the TSLs in this document, while the results for all efficiency levels that DOE analyzed are in the NOPR TSD. In response to the June 2022 Preliminary Analysis, AHAM raised concerns about the technological feasibility and the economic impact of setting the amended energy conservation standard at EL 3 for all portable product classes. AHAM also questioned whether DOE can justify proposing a standard where a majority of energy savings come from one product class. (AHAM, No. 22 at p. 8) To clarify, DOE does not propose adopting standard levels at the Preliminary Analysis stage. The current NOPR analysis has been updated based on stakeholder feedback received in response to the June 2022 Preliminary Analysis, additional tear down of units to support the engineering analysis, and manufacturer interviews. For this NOPR analysis, DOE analyzed four trial standard levels and proposes a TSL that DOE considers technologically feasible and economically justified based on a multitude of factors (see section V.C.1 for discussion of the benefits and burdens of TSLs considered in this NOPR). Table V.1 presents the TSLs and the corresponding efficiency levels that DOE has identified for potential E:\FR\FM\06NOP3.SGM 06NOP3 76545 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules amended energy conservation standards for dehumidifiers. TABLE V.1—TRIAL STANDARD LEVELS FOR DEHUMIDIFIERS Portable PC1: ≤25.00 pints/day TSL 1 2 3 4 PC2: 25.01–50.00 pints/day IEF (L/kWh) EL ............................... ............................... ............................... ............................... 1 2 3 5 B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers DOE analyzed the economic impacts on dehumidifier consumers by looking at the effects that potential amended standards at each TSL would have on the LCC and PBP. DOE also examined IEF (L/kWh) EL 1.40 1.57 1.70 2.32 For Product Class 3, DOE found that EL 3 results in the largest average LCC loss and the highest percent of consumers negatively impacted consumers among considered efficiency levels. Similarly, for Product Classes 1 and 2, EL 4 results in the smallest average LCC savings and the highest percent of consumers negatively impacted among considered efficiency levels. Therefore, DOE did not include these ELs in the construction of TSLs. Whole-home 1 2 3 5 PC4: ≤8.0 cu. ft. PC3: >50.00 pints/day IEF (L/kWh) EL 1.70 1.80 2.01 2.38 1 2 1 4 the impacts of potential standards on selected consumer subgroups. These analyses are discussed in the following sections. a. Life-Cycle Cost and Payback Period In general, higher-efficiency products affect consumers in two ways: (1) purchase price increases and (2) annual operating costs decreases. Inputs used for calculating the LCC and PBP include total installed costs (i.e., product price plus installation costs), and operating costs (i.e., annual energy use, energy prices, energy price trends, repair costs, and maintenance costs). The LCC calculation also uses product lifetime and a discount rate. Chapter [8] of the NOPR TSD provides detailed information on the LCC and PBP analyses. Table V.2 through Table V.11 show the LCC and PBP results for the TSLs IEF (L/kWh) EL 3.10 3.30 3.10 3.67 PC5: >8.0 cu. ft. 1 1 2 3 IEF (L/kWh) EL 2.09 2.09 2.22 2.39 1 2 3 4 2.70 3.30 3.81 4.17 considered for each product class. In the first of each pair of tables, the simple payback is measured relative to the baseline product. In the second table, impacts are measured relative to the efficiency distribution in the no-newstandards case in the compliance year (see section IV.F.8 of this document). Because some consumers purchase products with higher efficiency in the no-new-standards case, the average savings are less than the difference between the average LCC of the baseline product and the average LCC at each TSL. The savings refer only to consumers who are affected by a standard at a given TSL. Those who already purchase a product with efficiency at or above a given TSL are not affected. Consumers for whom the LCC increases at a given TSL experience a net cost. TABLE V.2—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 1: PORTABLE DEHUMIDIFIERS [≤25.00 pints/day] Average costs (2022$) Efficiency level TSL 1 ....................................... 2 ....................................... 3 ....................................... 4 ....................................... Baseline 1 2 3 4 5 IEF (L/kWh) Installed cost 1.30 1.40 1.57 1.70 1.94 2.32 $279 283 288 293 397 447 First year’s operating cost $66 61 55 51 46 39 Lifetime operating cost $569 531 479 444 396 337 LCC $848 814 767 737 793 784 Simple payback (years) .................... 1.0 0.9 0.9 5.9 6.3 Average lifetime (years) 10.0 10.0 10.0 10.0 10.0 10.0 ddrumheller on DSK120RN23PROD with PROPOSALS3 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 76546 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE V.3—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR PRODUCT CLASS 1: PORTABLE DEHUMIDIFIERS [≤25.00 pints/day] Life-cycle cost savings TSL Efficiency level 1 ....................................................................................................................................... 2 ....................................................................................................................................... 3 ....................................................................................................................................... Average LCC savings * + (2022$) 1 2 3 4 5 4 ....................................................................................................................................... Percentage of consumers that experience net cost (%) $0 46 42 (17) (9) 0 1 3 70 65 * The savings represent the average LCC for affected consumers. + Parentheses denote negative (¥) values. TABLE V.4—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 2: PORTABLE DEHUMIDIFIERS [25.01–50.00 pints/day] Average costs (2022$) Efficiency level TSL IEF (L/kWh) Baseline 1 2 3 4 5 1 ....................................... 2 ....................................... 3 ....................................... 4 ....................................... Installed cost 1.60 1.70 1.80 2.01 2.07 2.38 $315 319 324 327 429 493 First year’s operating cost Lifetime operating cost $112 106 100 91 89 78 Simple payback (years) LCC $968 915 869 784 767 676 $1,283 1,234 1,193 1,112 1,196 1,169 Average lifetime (years) .................... 0.7 0.8 0.6 4.9 5.3 10.0 10.0 10.0 10.0 10.0 10.0 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.5—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR PRODUCT CLASS 2: PORTABLE DEHUMIDIFIERS [25.01–50.00 pints/day] Life-cycle cost savings TSL Efficiency level 1 ....................................................................................................................................... 2 ....................................................................................................................................... 3 ....................................................................................................................................... Average LCC savings * (2022$) 1 2 3 4 5 4 ....................................................................................................................................... Percentage of consumers that experience net cost (%) $0 0 81 (13) 14 0 0 0 68 60 * The savings represent the average LCC for affected consumers. TABLE V.6—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 3: PORTABLE DEHUMIDIFIERS ddrumheller on DSK120RN23PROD with PROPOSALS3 [>50.00 pints/day] Average costs (2022$) Efficiency level TSL 1,3 .................................... 2 ....................................... VerDate Sep<11>2014 20:36 Nov 03, 2023 Baseline 1 2 3 Jkt 262001 IEF (L/kWh) Installed cost 2.80 3.10 3.30 3.51 PO 00000 Frm 00038 $1,043 1,080 1,149 1,248 Fmt 4701 First year’s operating cost $88 80 76 72 Sfmt 4702 Lifetime operating cost $765 696 657 622 E:\FR\FM\06NOP3.SGM LCC $1,807 1,776 1,807 1,870 06NOP3 Simple payback (years) .................... 4.8 8.7 12.5 Average lifetime (years) 10.0 10.0 10.0 10.0 76547 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE V.6—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 3: PORTABLE DEHUMIDIFIERS—Continued [>50.00 pints/day] Average costs (2022$) Efficiency level TSL 4 ....................................... IEF (L/kWh) 4 Installed cost 3.67 First year’s operating cost 1,257 Lifetime operating cost 69 Simple payback (years) LCC 597 1,854 Average lifetime (years) 11.2 10.0 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.7—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR PRODUCT CLASS 3: PORTABLE DEHUMIDIFIERS [>50.00 pints/day] Life-cycle cost savings TSL Efficiency level 1,3 .................................................................................................................................... 2 ....................................................................................................................................... Average LCC savings * + (2022$) 1 2 3 4 4 ....................................................................................................................................... Percentage of consumers that experience net cost (%) $31 (4) (67) (52) 33 65 79 74 * The savings represent the average LCC for affected consumers. + Parentheses denote negative (¥) values. TABLE V.8—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 4: WHOLE-HOME DEHUMIDIFIERS [≤8.0 cu ft case volume] Average costs (2022$) Efficiency level TSL 1,2 .................................... 3 ....................................... 4 ....................................... IEF (L/kWh) Baseline 1 2 3 Installed cost 1.77 2.09 2.22 2.39 $2,733 2,876 2,907 2,978 First year’s operating cost $144 123 117 110 Lifetime operating cost Simple payback (years) LCC $1,441 1,235 1,170 1,099 $4,174 4,110 4,077 4,077 Average lifetime (years) .................... 6.9 6.4 7.2 12.0 12.0 12.0 12.0 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.9—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR PRODUCT CLASS 4: WHOLEHOME DEHUMIDIFIERS [≤8.0 cu ft case volume] Life-cycle cost savings ddrumheller on DSK120RN23PROD with PROPOSALS3 TSL Efficiency level 1,2 .................................................................................................................................... 3 ....................................................................................................................................... 4 ....................................................................................................................................... Average LCC savings * (2022$) 1 2 3 $63 56 12 * The savings represent the average LCC for affected consumers. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 Percentage of consumers that experience net cost (%) 4 8 56 76548 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE V.10—AVERAGE LCC AND PBP RESULTS FOR PRODUCT CLASS 5: WHOLE-HOME DEHUMIDIFIERS [>8.0 cu ft case volume] Average costs (2022$) Efficiency level TSL 1 2 3 4 ....................................... ....................................... ....................................... ....................................... IEF (L/kWh) Baseline 1 2 3 4 Installed cost 2.41 2.70 3.30 3.81 4.17 $2,734 2,797 2,816 2,954 3,077 First year’s operating cost $115 104 87 77 71 Lifetime operating cost Simple payback (years) LCC $1,166 1,053 882 778 720 $3,901 3,850 3,698 3,731 3,796 Average lifetime (years) .................... 5.6 2.9 5.7 7.8 12.0 12.0 12.0 12.0 12.0 Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product. TABLE V.11—AVERAGE LCC SAVINGS RELATIVE TO THE NO-NEW-STANDARDS CASE FOR PRODUCT CLASS 5: WHOLEHOME DEHUMIDIFIERS [>8.0 cu ft case volume] Life-cycle cost savings TSL 1 2 3 4 Efficiency level ....................................................................................................................................... ....................................................................................................................................... ....................................................................................................................................... ....................................................................................................................................... Average LCC savings * (2022$) 1 2 3 4 $53 179 146 81 Percentage of consumers that experience net cost (%) 19 7 38 53 * The savings represent the average LCC for affected consumers. b. Consumer Subgroup Analysis In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on low-income households and senior-only households. Table V.12 through Table V.16 compares the average LCC savings and PBP at each efficiency level for the consumer subgroups with similar metrics for the entire consumer sample for each product class. In most cases, the average LCC savings and PBP for low-income households and senior-only households at the considered efficiency levels are not substantially different from the average for all households. Chapter 11 of the NOPR TSD presents the complete LCC and PBP results for the subgroups. TABLE V.12—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 1: PORTABLE DEHUMIDIFIERS [≤25.00 pints/day] ddrumheller on DSK120RN23PROD with PROPOSALS3 Low-income households Average LCC Savings (2022$): * TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Payback Period (years): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Benefit (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Cost (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Senior-only households $0 $38 $34 ($37) $0 $43 $39 ($22) $0 $46 $42 ($9) 1.2 1.1 1.1 7.6 1.1 1.0 1.0 6.9 1.0 0.9 0.9 6.3 0% 23% 83% 27% 0% 24% 89% 30% 0% 24% 88% 35% 0% 1% 7% 73% 0% 0% 2% 70% 0% 1% 3% 65% * Parentheses denote negative (¥) values. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 All households E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 76549 TABLE V.13—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 2: PORTABLE DEHUMIDIFIERS [25.01–50.00 pints/day] Low-income households Average LCC Savings (2022$): * TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Payback Period (years): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Benefit (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Cost (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Senior-only households All households $0 $0 $65 ($21) $0 $0 $74 ($2) $0 $0 $81 $14 0.9 1.0 0.7 6.4 0.8 0.9 0.7 5.8 0.7 0.8 0.6 5.3 0% 0% 87% 32% 0% 0% 87% 35% 0% 0% 87% 40% 0% 0% 0% 68% 0% 0% 0% 65% 0% 0% 0% 60% * Parentheses denote negative (¥) values. TABLE V.14—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 3: PORTABLE DEHUMIDIFIERS [>50.00 pints/day] Low-income households Average LCC Savings (2022$): * TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Payback Period (years): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Benefit (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Cost (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Senior-only households All households $21 ($19) $21 ($76) $25 ($13) $25 ($66) $31 ($4) $31 ($52) 5.6 10.0 5.6 12.9 5.3 9.5 5.3 12.3 4.8 8.7 4.8 11.2 53% 29% 53% 17% 51% 29% 51% 20% 53% 35% 53% 26% 33% 71% 33% 83% 34% 71% 34% 80% 33% 65% 33% 74% * Parentheses denote negative (¥) values. TABLE V.15—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 4: WHOLE-HOME DEHUMIDIFIERS ddrumheller on DSK120RN23PROD with PROPOSALS3 [≤8.0 cu ft case volume] Low-income households Average LCC Savings (2022$): * TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Payback Period (years): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 Senior-only households All households $99 $99 $76 $37 $70 $70 $60 $14 $63 $63 $56 $12 4.8 4.8 6.8 6.8 6.9 6.9 E:\FR\FM\06NOP3.SGM 06NOP3 76550 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE V.15—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 4: WHOLE-HOME DEHUMIDIFIERS—Continued [≤8.0 cu ft case volume] Low-income households TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Benefit (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Cost (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Senior-only households All households 4.4 4.9 6.3 7.1 6.4 7.2 5% 5% 15% 48% 4% 4% 14% 39% 4% 4% 14% 40% 3% 3% 5% 40% 4% 4% 8% 58% 4% 4% 8% 56% * Parentheses denote negative (¥) values. TABLE V.16—COMPARISON OF LCC SAVINGS AND PBP FOR CONSUMER SUBGROUPS AND ALL HOUSEHOLDS; PRODUCT CLASS 5: WHOLE-HOME DEHUMIDIFIERS [>8.0 cu ft case volume] Low-income households Average LCC Savings (2022$): * TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Payback Period (years): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Benefit (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Consumers with Net Cost (%): TSL 1 ........................................................................................................................ TSL 2 ........................................................................................................................ TSL 3 ........................................................................................................................ TSL 4 ........................................................................................................................ Senior-only households All households $64 $178 $187 $163 $51 $179 $147 $82 $53 $179 $146 $81 3.8 2.0 3.9 5.3 5.5 2.9 5.6 7.6 5.6 2.9 5.7 7.8 36% 89% 66% 55% 33% 95% 62% 47% 34% 93% 62% 47% 13% 3% 26% 37% 20% 5% 38% 53% 19% 7% 38% 53% * Parentheses denote negative (¥) values. ddrumheller on DSK120RN23PROD with PROPOSALS3 c. Rebuttable Presumption Payback As discussed in section III.E.2 EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for a product that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete values, and, as required by EPCA, based VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 the energy use calculation on the DOE test procedure for dehumidifiers. In contrast, the PBPs presented in section V.B.1.a were calculated using average values derived from distributions that reflect the range of energy use in the field. Table V.17 presents the rebuttablepresumption payback periods for the considered TSLs for dehumidifiers. While DOE examined the rebuttablepresumption criterion, it considered whether the standard levels considered PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 for the NOPR are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 76551 TABLE V.17—REBUTTABLE-PRESUMPTION PAYBACK PERIODS Efficiency level Product class 1 2 3 4 5 6.6 5.4 10.7 .................... 6.5 7.3 6.1 .................... .................... .................... years Product Product Product Product Product Class Class Class Class Class 1: 2: 3: 4: 5: Portable Dehumidifiers ≤25.00 Pints/Day .................... Portable Dehumidifiers 25.01–50.00 Pints/Day ........... Portable Dehumidifiers >50.00 Pints/Day .................... Whole-Home Dehumidifiers ≤8.0 cu ft Case Volume .. Whole-Home Dehumidifiers >8.0 cu ft Case Volume 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of amended energy conservation standards on manufacturers of dehumidifiers. The following section describes the expected impacts on manufacturers at each considered TSL. Chapter 12 of the NOPR TSD explains the analysis in further detail. a. Industry Cash Flow Analysis Results In this section, DOE provides GRIM results from the analysis, which examines changes in the industry that would result from a standard. The following tables summarize the estimated financial impacts (represented by changes in INPV) of potential amended energy conservation standards on manufacturers of dehumidifiers, as well as the conversion costs that DOE estimates manufacturers of dehumidifiers would incur at each TSL. The impact of potential amended energy conservation standards were analyzed under two scenarios: (1) the preservation of gross margin percentage; and (2) the preservation of operating profit, as discussed in section IV.J.2.d of this document. The preservation of gross margin percentages applies a 1.2 0.9 5.9 4.8 5.2 ‘‘gross margin percentage’’ of 29 percent for all product classes across all efficiency levels.58 This scenario assumes that a manufacturer’s per-unit dollar profit would increase as MPCs increase in the standards cases and represents the upper-bound to industry profitability under potential amended energy conservation standards. The preservation of operating profit scenario reflects manufacturers’ concerns about their inability to maintain margins as MPCs increase to reach more-stringent efficiency levels. In this scenario, while manufacturers make the necessary investments required to convert their facilities to produce compliant equipment, operating profit does not change in absolute dollars and decreases as a percentage of revenue. The preservation of operating profit scenario results in the lower bound to impacts of potential amended standards on industry. Each of the modeled scenarios results in a unique set of cash flows and corresponding INPV for each TSL. INPV is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023–2057). The ‘‘change in INPV’’ results refer to the difference in industry value between the no-new-standards 1.1 1.0 10.7 4.8 2.7 1.2 0.8 11.5 5.6 4.7 case and standards case at each TSL. To provide perspective on the short-run cash flow impact, DOE includes a comparison of free cash flow between the no-new-standards case and the standards case at each TSL in the year before amended standards would take effect. This figure provides an understanding of the magnitude of the required conversion costs relative to the cash flow generated by the industry in the no-new-standards case. Conversion costs are one-time investments for manufacturers to bring their manufacturing facilities and product designs into compliance with potential amended standards. As described in section IV.J.2.c of this document, conversion cost investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the new standard. The conversion costs can have a significant impact on the shortterm cash flow on the industry and generally result in lower free cash flow in the period between the publication of the final rule and the compliance date of potential amended standards. Conversion costs are independent of the manufacturer markup scenarios and are not presented as a range in this analysis. TABLE V.18—MANUFACTURER IMPACT ANALYSIS DEHUMIDIFIER INDUSTRY RESULTS ddrumheller on DSK120RN23PROD with PROPOSALS3 INPV ...................................................................... Change in INPV .................................................... Free Cash Flow (2027) ......................................... Change in Free Cash Flow (2027) ....................... Product Conversion Costs .................................... Capital Conversion Costs ...................................... Conversion Costs .................................................. At TSL 4, the standard represents the max-tech efficiency levels for all product classes. The change in INPV is expected to range from ¥53.9 to ¥23.2 percent. At this level, free cash flow is Unit No-newstandards case TSL 1 TSL 2 TSL 3 2022$ Million .......... % ............................ 2022$ Million .......... % ............................ 2022$ Million .......... 2022$ Million .......... 2022$ Million .......... 158.3 ........................ 12.6 ........................ ........................ ........................ - 157.8 to 158.0 .. (0.3) to (0.2) ..... 12.4 .................. (1.5) .................. 0.6 .................... 0.0 .................... 0.6 .................... 157.4 to 158.1 .. (0.6) to (0.2) ..... 12.4 .................. (2.2) .................. 0.8 .................... 0.0 .................... 0.8 .................... 153.1 to 155.0 .. (3.3) to (2.1) ..... 10.3 .................. (18.4) ................ 6.9 .................... 0.0 .................... 6.9 .................... estimated to decrease by 244.3 percent compared to the no-new-standards case value of $12.6 million in the year 2027, the year before the standards year. Currently, less than 1 percent of 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 73.0 to 121.6 (53.9) to (23.2) (18.2) (244.3) 20.9 53.1 73.9 domestic dehumidifier shipments meet the efficiencies required at TSL 4. At max-tech, all product classes would require the most efficient compressor observed in teardown 58 The gross margin percentage of 29 percent is based on a manufacturer markup of 1.40. VerDate Sep<11>2014 TSL 4 E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76552 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules models, ECM blower fan with associated variable-speed driver, controls with less inactive mode power consumption and the largest heat exchangers observed in teardown models in each product class. Increasing heat exchanger surface area would necessitate notable changes to the chassis size of both portable and whole-home units as most dehumidifier designs cannot accommodate a larger heat exchanger within the existing cabinet structure. For the portable dehumidifier classes, which together account for approximately 98 percent of industry shipments, almost all manufacturers would need to make significant investments to adjust equipment, molding, and tooling to accommodate new dimensions across their entire product portfolio. None of the 15 portable dehumidifier OEMs currently offer any models that meet the max-tech efficiencies required. Product conversion costs at this level are significant as manufacturers work to completely redesign all existing models and develop new chassis designs to incorporate larger heat exchangers and more efficient components. DOE estimates capital conversion costs of $53.1 million and product conversion costs of $20.9 million. Conversion costs total $73.9 million. Compared to the market for portable dehumidifiers, the whole-home dehumidifier market is low-volume and relatively concentrated. Whole-home dehumidifiers account for approximately 2 percent of total industry shipments. DOE identified three OEMs producing whole-home dehumidifiers for the U.S. market. Of the two whole-home product classes, whole-home dehumidifiers ≤8.0 cu. ft. (Product Class 4) account for approximately 85 percent of wholehome dehumidifier shipments. Of the three whole-home OEMs identified, only one OEM currently offers a Product Class 4 model that meets the max-tech level. The remaining two OEMs would need to dedicate significant engineering resources to redesign their entire product portfolio to include larger heat exchangers, which would necessitate a change in dimensions and new chassis design. One of the OEMs without any models that meet max-tech is a small, domestic business with a significant market share of Product Class 4 shipments. For the other whole-home product class, only one OEM currently offers whole-home dehumidifiers >8.0 cu. ft. (Product Class 5). This OEM does not currently offer any models that meet the max-tech efficiency required. Given the limited number of whole-home OEMs, the limited number of models VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 currently available that meet the maxtech efficiency levels, and the extent of the redesign required for the OEMs without any max-tech product offerings, it is possible that the 3-year period between the announcement of the final rule and the compliance date of the amended energy conservation standard might be insufficient to design, test, and manufacture the necessary number of products to meet consumer demand. At TSL 4, the large conversion costs result in a free cash flow dropping below zero in the years before the standards year. The negative free cash flow calculation indicates manufacturers may need to access cash reserves or outside capital to finance conversion efforts. At TSL 4, the shipment-weighted average MPC for all dehumidifiers is expected to increase by 52.7 percent relative to the no-new-standards case shipment-weighted average MPC for all dehumidifiers in 2028. Given the projected increase in production costs, DOE expects an estimated 23.5 percent drop in shipments in the year the standard takes effect relative to the nonew-standards case. In the preservation of gross margin percentage scenario, the increase in cashflow from the higher MSP is outweighed by the $73.9 million in conversion costs and drop in annual shipments, causing a significant negative change in INPV at TSL 4 under this scenario. Under the preservation of operating profit scenario, the manufacturer markup decreases in 2029, the year after the analyzed compliance year. This reduction in the manufacturer markup, the $73.9 million in conversion costs incurred by manufacturers, and the drop in annual shipments cause a significant decrease in INPV at TSL 4 under the preservation of operating profit scenario. At TSL 3, the standard represents an intermediate TSL that maintains positive average LCC savings for all products while increasing stringency for Product Classes 1, 2, 4, and 5. The change in INPV is expected to range from ¥3.3 to ¥2.1 percent. At this level, free cash flow is estimated to decrease by 18.4 percent compared to the no-new-standards case value of $12.6 million in the year 2027, the year before the standards year. Currently, approximately 3 percent of domestic dehumidifier shipments meet the efficiencies required at TSL 3. For the portable dehumidifier classes ≤50.00 pints/day (Product Class 1 and Product Class 2), TSL 3 corresponds to EL3. For portable dehumidifiers >50 pints/day, TSL 3 corresponds to EL1. For whole home dehumidifiers ≤8.0 cu. ft., TSL 3 corresponds to EL2. For whole PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 home dehumidifiers >8.0 cu. ft., TSL 3 corresponds to EL3. At this level, DOE expects that all product classes would incorporate a higher efficiency compressor compared to the current baseline. For the whole-home dehumidifier classes, the analyzed design options also included the addition of an ECM blower and a larger heat exchanger as compared to baseline product offerings but to a lesser extent than what was analyzed at max-tech. At this level, DOE does not expect manufacturers of portable dehumidifiers to adopt new or larger chassis designs. As such, DOE does not expect industry would incur capital conversion costs since portable OEMs can likely achieve TSL 3 efficiencies without changes to the heat exchanger and chassis design. Portable dehumidifiers 25.01–50.00 pints/day (Product Class 2) accounts for approximately 73 percent of industry shipments. Of the 15 portable dehumidifier OEMs, around two OEMs currently offer Product Class 2 models that meet the efficiency required by TSL 3. Product conversion costs may be necessary for developing, qualifying, sourcing, and testing more efficient compressors. For whole-home dehumidifiers, DOE expects some manufacturers would need to adopt new or larger chassis designs to accommodate larger heat exchangers but not to the extent required at max-tech. For whole-home designs, DOE expects that the size differences would not necessitate capital investment since existing machinery could likely still be used. Of the three whole-home OEMs, two OEMs currently offer Product Class 4 models that meet the efficiency required. As with TSL 4, whole-home manufacturers would likely need to completely redesign non-compliant models. However, approximately 60 percent of basic model listings (around 32 unique basic models) already meet the efficiency level required. DOE estimates total conversion costs of $6.9 million, all of which are product conversion costs. At TSL 3, the shipment-weighted average MPC for all dehumidifiers is expected to increase by 1.6 percent relative to the no-new-standards case shipment-weighted average MPC for all dehumidifiers in 2028. Given the projected increase in production costs, DOE does not expect a notable drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation of gross margin percentage scenario, the slight increase in cashflow from the higher MSP is outweighed by the $6.9 million in conversion costs, causing a slightly E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules negative change in INPV at TSL 3 under this scenario. Under the preservation of operating profit scenario, the manufacturer markup decreases in 2029, the year after the analyzed compliance year. This reduction in the manufacturer markup and the $6.9 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 3 under the preservation of operating profit scenario. At TSL 2, the standard represents efficiency levels consistent with ENERGY STAR requirements for dehumidifiers. The change in INPV is expected to range from ¥0.9 to ¥0.2 percent. At this level, free cash flow is estimated to decrease by 2.2 percent compared to the no-new-standards case value of $12.6 million in the year 2027, the year before the standards year. Currently, approximately 89 percent of domestic dehumidifier shipments meet the efficiencies required at TSL 2. For all product classes, except for whole-home dehumidifiers ≤8.0 cu. ft. (Product Class 4), TSL 2 corresponds to EL2. For Product Class 4, TSL 2 corresponds to EL1. The design options analyzed for most product classes include incorporating incrementally more efficient compressors, similar to TSL 3. For Product Class 5, DOE also expects that manufacturers would need to increase the heat exchanger beyond what would be required at baseline. At this level, DOE estimates that most manufacturers can achieve TSL 2 efficiencies with relatively simple component changes. For the largest portable dehumidifier class (Product Class 2), all 15 OEMs have models that meet the efficiency level required. For the largest whole-home dehumidifier class (Product Class 4), all three OEMs have models that meet the efficiency level required. Product conversion costs may be necessary for developing, qualifying, sourcing, and testing more efficient compressors. DOE estimates total conversion costs of $0.8 million, all of which are product conversion costs. At TSL 2, the shipment-weighted average MPC for all dehumidifiers is expected to increase by 0.4 percent relative to the no-new-standards case shipment-weighted average MPC for all dehumidifiers in 2028. Given the projected increase in production costs, DOE does not expect a notable drop in shipments in the year the standard takes effect relative to the no-new-standards case. In the preservation of gross margin percentage scenario, the slight increase in cashflow from the higher MSP is outweighed by the $0.8 million in conversion costs, causing a slightly VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 negative change in INPV at TSL 2 under this scenario. Under the preservation of operating profit scenario, the manufacturer markup decreases in 2029, the year after the analyzed compliance year. This reduction in the manufacturer markup and the $0.8 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 2 under the preservation of operating profit scenario. At TSL 1, the standard represents the lowest analyzed efficiency level above baseline for all product classes (EL1). The change in INPV is expected to range from ¥0.4 to ¥0.1 percent. At this level, free cash flow is estimated to decrease by 1.5 percent compared to the no-new-standards case value of $12.6 million in the year 2027, the year before the standards year. Currently, approximately 99 percent of domestic dehumidifier shipments meet the efficiencies required at TSL 1. For all product classes, TSL 1 corresponds to EL1. At TSL 1, DOE analyzed implementing various design options for the range of directly analyzed product classes. corresponds to EL2. For whole-home dehumidifiers under 8.0 cubic feet, TSL 2 corresponds to EL1. The design options analyzed included implementing incrementally more efficient compressors compared to the current baseline, and, for whole home dehumidifiers >8.0 cu. ft. (Product Class 5), the analyzed design options also included implementing larger heat exchangers as compared to the current baseline. At this level, there are no capital conversion costs since most manufacturers can achieve TSL 1 efficiencies with relatively simple component changes. Product conversion costs may be necessary for developing, qualifying, sourcing, and testing more efficient components. DOE estimates total conversion costs of $0.6 million, all of which is product conversion cost. At TSL 1, the shipment-weighted average MPC for all dehumidifiers is expected to increase by 0.1 percent relative to the no-new-standards case shipment-weighted average MPC for all dehumidifiers in 2028. Given the relatively small increase in production costs, DOE does not project a notable drop in shipments in the year the standard takes effect. In the preservation of gross margin percentage scenario, the minor increase in cashflow from the higher MSP is slightly outweighed by the $0.6 million in conversion costs, causing a slightly negative change in INPV at TSL 1 under this scenario. Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 76553 be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2029, the year after the analyzed compliance year. This reduction in the manufacturer markup and the $0.6 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 1 under the preservation of operating profit scenario. DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL. b. Direct Impacts on Employment To quantitatively assess the potential impacts of amended energy conservation standards on direct employment in the dehumidifier industry, DOE used the GRIM to estimate the domestic labor expenditures and number of direct employees in the no-new-standards case and in each of the standards cases during the analysis period. DOE calculated these values using statistical data from the 2021 ASM,59 BLS employee compensation data,60 results of the engineering analysis, and manufacturer interviews. Labor expenditures related to product manufacturing depend on the labor intensity of the product, the sales volume, and an assumption that wages remain fixed in real terms over time. The total labor expenditures in each year are calculated by multiplying the total MPCs by the labor percentage of MPCs. The total labor expenditures in the GRIM were then converted to total production employment levels by dividing production labor expenditures by the average fully burdened wage multiplied by the average number of hours worked per year per production worker. To do this, DOE relied on the ASM inputs: Production Workers Annual Wages, Production Workers Annual Hours, Production Workers for Pay Period, and Number of Employees. DOE also relied on the BLS employee compensation data to determine the fully burdened wage ratio. The fully burdened wage ratio factors in paid leave, supplemental pay, insurance, 59 U.S. Census Bureau, Annual Survey of Manufactures. ‘‘Summary Statistics for Industry Groups and Industries in the U.S. (2021).’’ Available at www.census.gov/data/tables/timeseries/econ/asm/2018-2021-asm.html (last accessed March 4, 2023). 60 U.S. Bureau of Labor Statistics. Employer Costs for Employee Compensation—September 2022. December 15, 2022. Available at www.bls.gov/ news.release/pdf/ecec.pdf (last accessed March 4, 2023). E:\FR\FM\06NOP3.SGM 06NOP3 76554 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules retirement and savings, and legally required benefits. The number of production employees is then multiplied by the U.S. labor percentage to convert total production employment to total domestic production employment. The U.S. labor percentage represents the industry fraction of domestic manufacturing production capacity for the covered products. This value is derived from manufacturer interviews, equipment database analysis, and publicly available information. The U.S. labor percentage varies by product class. Nearly all portable units are manufactured outside of the United States. Comparatively, DOE estimates that 80 percent of whole-home units are manufactured in the United States. Overall, DOE estimates that 2 percent of all covered dehumidifiers units are manufactured domestically. The domestic production employees estimate covers production line workers, including line supervisors, who are directly involved in fabricating and assembling products within the OEM facility. Workers performing services that are closely associated with production operations, such as materials handling tasks using forklifts, are also included as production labor. DOE’s estimates only account for production workers who manufacture the specific equipment covered by this proposed rulemaking. Non-production workers account for the remainder of the direct employment figure. The non-production employees estimate covers domestic workers who are not directly involved in the production process, such as sales, engineering, human resources, and management. Using the amount of domestic production workers calculated above, non-production domestic employees are extrapolated by multiplying the ratio of non-production workers in the industry compared to production employees. DOE assumes that this employee distribution ratio remains constant between the no-newstandards case and standards cases. Using the GRIM, DOE estimates in the absence of amended energy conservation standards there would be 72 domestic production and nonproduction workers of dehumidifiers in 2028. Table V.19 shows the range of the impacts of potential amended energy conservation standards on U.S. manufacturing employment in dehumidifier industry. TABLE V.19—DIRECT EMPLOYMENT IMPACTS FOR DOMESTIC DEHUMIDIFIER MANUFACTURERS IN 2028 * No-newstandards case Direct Employment in 2028 (Production Workers + NonProduction Workers). Potential Changes in Direct Employment in 2028* ............ TSL 1 TSL 2 TSL 3 TSL 4 72 72 ................... 72 ................... 72 ................... 64. ........................ (53) to 0 ......... (53) to 0 ......... (53) to 0 ......... (53) to (8). ddrumheller on DSK120RN23PROD with PROPOSALS3 * DOE presents a range of potential employment impacts. Numbers in parentheses denote negative values. The direct employment impacts shown in Table V.19 represent the potential domestic employment changes that could result following the compliance date of amended energy conservation standards. The upper bound estimate corresponds to the change in the number of domestic workers that would result from amended energy conservation standards if manufacturers continued to produce the same scope of covered products within the United States after compliance takes effect. To establish a conservative lower bound, DOE assumes all manufacturers would shift production to foreign countries with lower costs of labor. At lower TSLs (i.e., TSL 1 through TSL 3), DOE believes the likelihood of changes in production location due to amended standards are low due to the relatively minor production line updates required. However, as amended standards increase in stringency and both the complexity and cost of production facility updates increases, manufacturers are more likely to revisit their production location decisions and/ or their make vs. buy decisions. Additional detail on the analysis of direct employment can be found in chapter 12 of the NOPR TSD. Additionally, the employment impacts VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 discussed in this section are independent of the employment impacts from the broader U.S. economy, which are documented in chapter 16 of the NOPR TSD. c. Impacts on Manufacturing Capacity In interviews, some manufacturers expressed concern about efficiency levels that would require increasing the chassis and heat exchanger. These manufacturers asserted that since manufacturing larger units requires longer production and processing time, increasing chassis size could reduce their manufacturing capacity. Furthermore, manufacturers expressed concern that the 3-year compliance period would be insufficient to develop completely new, cost-optimized models across their entire product portfolio if chassis size changes are required. DOE notes that there could be technical resource constraints due to overlapping regulations, particularly for whole-home dehumidifier manufacturers. Whole-home dehumidifier manufacturers may face resource constraints should DOE set more stringent standards that necessitate the redesign of the majority of models given State (e.g., CARB) and potential Federal refrigerant regulations requiring low-GWP refrigerants over a similar compliance timeline. PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 DOE seeks comment on whether manufacturers expect manufacturing capacity constraints or engineering resource constraints would limit product availability to consumers in the timeframe of the amended standard compliance date (2028). d. Impacts on Subgroups of Manufacturers Using average cost assumptions to develop industry cash-flow estimates may not capture the differential impacts among subgroups of manufacturers. Small manufacturers, niche players, or manufacturers exhibiting a cost structure that differs substantially from the industry average could be affected disproportionately. DOE investigated small businesses as a manufacturer subgroup that could be disproportionally impacted by energy conservation standards and could merit additional analysis. DOE did not identify any other adversely impacted manufacturer subgroups for this proposed rulemaking based on the results of the industry characterization. DOE analyzes the impacts on small businesses in a separate analysis in section VI.B of this document as part of the Regulatory Flexibility Analysis. In summary, the Small Business Administration (SBA) defines a ‘‘small business’’ as having 1,500 or employees E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules or less for North American Industry Classification System (NAICS) 335210, ‘‘Small Electrical Appliance Manufacturing’’ and 1,250 employees or less for NAICS 333415, ‘‘Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.’’ For a discussion of the impacts on the small business manufacturer subgroup, see the Regulatory Flexibility Analysis in section VI.B of this document and chapter 12 of the NOPR TSD. e. Cumulative Regulatory Burden One aspect of assessing manufacturer burden involves looking at the cumulative impact of multiple DOE standards and the product-specific regulatory actions of other Federal agencies that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect 76555 manufacturers’ financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing products. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency. DOE evaluates product-specific regulations that will take effect approximately three years before or after the estimated 2028 compliance date of any amended energy conservation standards for dehumidifiers. This information is presented in Table V.20. TABLE V.20—COMPLIANCE DATES AND EXPECTED CONVERSION EXPENSES OF FEDERAL ENERGY CONSERVATION STANDARDS AFFECTING DEHUMIDIFIER ORIGINAL EQUIPMENT MANUFACTURERS Number of OEMs affected by today’s rule ** Number of OEMs * Federal energy conservation standard Consumer Furnaces † 87 FR 40590 (July 7, 2022). Consumer Clothes Dryers,† 87 FR 51734 (August 23, 2022). Microwave Ovens 88 FR 39912 (June 20, 2023) Consumer Conventional Cooking Products 88 FR 6818 † (February 1, 2023). Residential Clothes Washers † 88 FR 13520 (March 3, 2023). Refrigerators, Freezers, and Refrigerator-Freezers † 88 FR 12452 (February 27, 2023). Room Air Conditioners 88 FR 34298 (May 26, 2023). Consumer Air Cleaners ‡ 88 FR 21752 (April 11, 2023). Miscellaneous Refrigeration Products † 88 FR 19382 (March 31, 2023). Dishwashers † 88 FR 32514 (May 19, 2023) ...... Consumer Water Heaters † 88 FR 49058 (July 28, 2023). Industry conversion costs (millions $) Approx. standards compliance year Industry conversion costs/product revenue *** (%) 15 3 2029 .......................... $150.6 (2020$) 1.4 15 3 2027 .......................... $149.7 (2020$) 1.8 18 34 1 1 2026 .......................... 2027 .......................... $46.1 (2021$) $183.4 (2021$) 0.7 1.2 19 3 2027 .......................... $690.8 (2021$) 5.2 49 3 2027 .......................... $1,323.6 (2021$) 3.8 8 4 2026 .......................... $24.8 (2021$) 0.4 43 2 2024 and 2026 ‡ ........ $57.3 (2021$) 1.3 38 3 2029 .......................... $126.9 (2021$) 3.1 22 22 3 3 2027 .......................... 2030 .......................... $125.6 (2021$) $228.1 (2022$) 2.1 1.3 ddrumheller on DSK120RN23PROD with PROPOSALS3 * This column presents the total number of OEMs identified in the energy conservation standard rule subject to cumulative regulatory burden. ** This column presents the number of OEMs producing dehumidifiers that are also listed as OEMs in the identified energy conservation standard subject to cumulative regulatory burden. *** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking. † These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication of a final rule. ‡ The Direct Final Rule for Consumer Air Cleaners adopts an amended standard in 2024 and a higher amended standard in 2026. The conversion costs are spread over a 3-year conversion period ending in 2025, with over 50 percent of the conversion costs occurring between 2024 and 2025. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 76556 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of dehumidifiers associated with multiple DOE standards or product-specific regulatory actions of other Federal agencies. Refrigerant Regulations DOE evaluated the potential impacts of State and Federal refrigerant regulations, such as CARB’s rulemaking prohibiting the use of refrigerants with a GWP of 750 or greater starting January 1, 2023 for self-contained, residential dehumidifiers and starting January 1, 2025 for whole-home dehumidifiers 61 and EPA’s final rule issued on October 5, 2023, which restricts the use of HFCs that have a GWP of 700 or greater for residential dehumidifiers beginning January 1, 2025.62 Based on market research and information from manufacturer interviews, DOE expects that dehumidifier manufacturers will transition to flammable refrigerants (e.g., R–32) in response to refrigerant GWP restrictions. DOE understands that switching from non-flammable to flammable refrigerants requires time and investment to redesign dehumidifiers and upgrade production facilities to accommodate the additional structural and safety precautions required. DOE tentatively expects manufacturers will need to transition to an A2L refrigerant to comply with upcoming refrigerant regulations, prior to the expected 2028 compliance date of any potential energy conservation standards. Investments required to transition to flammable refrigerants in response to State regulations or EPA’s final rule, necessitates a level of investment beyond typical annual R&D and capital expenditures. DOE considers the cost associated with the refrigerant transition in its GRIM to be independent of DOE actions related to any amended energy conservation standards. DOE accounted for the costs associated with redesigning dehumidifiers to make use of flammable refrigerants and retrofitting production facilities to accommodate flammable refrigerants in the GRIM in the no-newstandards case and standards cases to reflect the cumulative regulatory burden from State and Federal refrigerant regulation.63 DOE relied on manufacturer feedback in confidential interviews and a report prepared for EPA 64 to estimate the industry refrigerant transition costs. Based on feedback, DOE assumed that the transition to low-GWP refrigerants would require industry to invest approximately $3.6 million in R&D and $7.1 million in capital expenditures (e.g., investments in new charging equipment, leak detection systems, etc.). DOE requests comments on the magnitude of costs associated with transitioning dehumidifier products and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of amended standards. Quantification and categorization of these costs, such as engineering efforts, testing lab time, certification costs, and capital investments (e.g., new charging equipment), would enable DOE to refine its analysis. 3. National Impact Analysis This section presents DOE’s estimates of the national energy savings and the NPV of consumer benefits that would result from each of the TSLs considered as potential amended standards. a. Significance of Energy Savings To estimate the energy savings attributable to potential amended standards for dehumidifiers, DOE compared their energy consumption under the no-new-standards case to their anticipated energy consumption under each TSL. The savings are measured over the entire lifetime of products purchased in the 30-year period that begins in the year of anticipated compliance with amended standards (2028–2057). Table V.21 presents DOE’s projections of the national energy savings for each TSL considered for dehumidifiers. The savings were calculated using the approach described in section IV.H of this document. TABLE V.21—CUMULATIVE NATIONAL ENERGY SAVINGS FOR DEHUMIDIFIERS; 30 YEARS OF SHIPMENTS [2028–2057] Trial standard level 1 I 2 I 3 I 4 quads ddrumheller on DSK120RN23PROD with PROPOSALS3 Primary energy ................................................................................................ FFC energy ...................................................................................................... 0.00 0.00 0.02 0.02 I I 0.32 0.33 I 0.97 0.99 OMB Circular A–4 65 requires agencies to present analytical results, including separate schedules of the monetized benefits and costs that show the type and timing of benefits and costs. Circular A–4 also directs agencies to consider the variability of key elements underlying the estimates of benefits and costs. For this proposed rulemaking, DOE undertook a sensitivity analysis using 9 years, rather than 30 years, of product shipments. The choice of a 9-year period is a proxy for the timeline in EPCA for the review of certain energy conservation standards and potential revision of and compliance with such revised 61 State of California Air Resource Board, ‘‘Prohibitions on Use of Certain Hydrofluorocarbons in Stationary Refrigeration, Chillers, AerosolsPropellants, and Foam End-Uses Regulation.’’ Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/ 2020/hfc2020/frorevised.pdf (last accessed March 4, 2023). 62 The final rule was issued on October 5, 2023 and is pending publication in the Federal Register. A pre-publication version of the EPA final rule is available at: www.epa.gov/system/files/documents/ 2023-10/technology-transitions-final-rule-2023-pre- publication.pdf. Once published, the final rule will be available at: www.regulations.gov/docket/EPAHQ-OAR-2021-0643. 63 Although State regulations, such as CARB’s, required the use low-GWP refrigerants in California starting January 1, 2023, for portable dehumidifiers, DOE assumed the refrigerant transition costs would be incurred over the same time period as wholehome dehumidifiers (2023 to 2024) since manufacturers likely waited for EPA SNAP approval before investing in the transition to lowGWP refrigerants for dehumidifiers. 88 FR 26382. 64 Report prepared for the U.S. Environmental Protection Agency, prepared by RTI International, ‘‘Global Non-CO2 Greenhouse Gas Emission Projections & Marginal Abatement Cost Analysis: Methodology Documentation’’ (2019). Available at www.epa.gov/sites/default/files/2019-09/ documents/nonco2_methodology_report.pdf. 65 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wpcontent/uploads/legacy_drupal_files/omb/circulars/ A4/a-4.pdf. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 76557 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules standards.66 The review timeframe established in EPCA is generally not synchronized with the product lifetime, product manufacturing cycles, or other factors specific to dehumidifiers. Thus, such results are presented for informational purposes only and are not indicative of any change in DOE’s analytical methodology. The NES sensitivity analysis results based on a 9- year analytical period are presented in Table V.22. The impacts are counted over the lifetime of dehumidifiers purchased in 2028–2036. TABLE V.22—CUMULATIVE NATIONAL ENERGY SAVINGS FOR DEHUMIDIFIERS; 9 YEARS OF SHIPMENTS [2028–2036] Trial standard level 1 I 2 I 3 I 4 quads Primary energy ................................................................................................ FFC energy ...................................................................................................... b. Net Present Value of Consumer Costs and Benefits DOE estimated the cumulative NPV of the total costs and savings for 0.00 0.00 0.01 0.01 I 0.12 0.12 I 0.28 0.29 I percent real discount rate. Table V.23 shows the consumer NPV results with impacts counted over the lifetime of products purchased in 2028–2057. consumers that would result from the TSLs considered for dehumidifiers. In accordance with OMB’s guidelines on regulatory analysis,67 DOE calculated NPV using both a 7-percent and a 3- TABLE V.23—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR DEHUMIDIFIERS; 30 YEARS OF SHIPMENTS [2028–2057] Trial standard level Discount rate 1 I 2 I 3 I 4 Billion 2022$ 3 percent .......................................................................................................... 7 percent .......................................................................................................... The NPV results based on the aforementioned 9-year analytical period are presented in Table V.24. The impacts are counted over the lifetime of 0.02 0.01 0.07 0.03 I products purchased in 2028–2036. As mentioned previously, such results are presented for informational purposes only and are not indicative of any 2.61 1.26 I 2.21 0.50 I change in DOE’s analytical methodology or decision criteria. TABLE V.24—CUMULATIVE NET PRESENT VALUE OF CONSUMER BENEFITS FOR DEHUMIDIFIERS; 9 YEARS OF SHIPMENTS (2028–2036) Trial standard level Discount rate 1 I 2 I 3 I 4 Billion 2022$ ddrumheller on DSK120RN23PROD with PROPOSALS3 3 percent .......................................................................................................... 7 percent .......................................................................................................... 0.01 0.00 0.04 0.02 I I 1.16 0.71 I 0.55 0.09 The previous results reflect the use of a default trend to estimate the change in price for dehumidifiers over the analysis period (see section IV.F.1 of this document). DOE also conducted a sensitivity analysis that considered one scenario with a lower rate of price decline than the reference case and one scenario with a higher rate of price decline than the reference case. The results of these alternative cases are presented in appendix 10C of the NOPR TSD. In the high-price-decline case, the NPV of consumer benefits is higher than in the default case. In the low-pricedecline case, the NPV of consumer benefits is lower than in the default case. 66 EPCA requires DOE to review its standards at least once every 6 years, and requires, for certain products, a 3-year period after any new standard is promulgated before compliance is required, except that in no case may any new standards be required within 6 years of the compliance date of the previous standards. (42 U.S.C. 6295(m)) While adding a 6-year review to the 3-year compliance period adds up to 9 years, DOE notes that it may undertake reviews at any time within the 6-year period and that the 3-year compliance date may yield to the 6-year backstop. A 9-year analysis period may not be appropriate given the variability that occurs in the timing of standards reviews and the fact that for some products, the compliance period is 5 years rather than 3 years. 67 U.S. Office of Management and Budget. Circular A–4: Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wpcontent/uploads/legacy_drupal_files/omb/circulars/ A4/a-4.pdf. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 c. Indirect Impacts on Employment DOE estimates that that amended energy conservation standards for E:\FR\FM\06NOP3.SGM 06NOP3 76558 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules dehumidifiers would reduce energy expenditures for consumers of those products, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect employment impacts of the TSLs that DOE considered. There are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2028– 2032), where these uncertainties are reduced. The results suggest that the proposed standards would be likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the NOPR TSD presents detailed results regarding anticipated indirect employment impacts. 4. Impact on Utility or Performance of Products As discussed in section IV.C.1.b of this document, DOE has tentatively concluded that the standards proposed in this NOPR would not lessen the utility or performance of the dehumidifiers under consideration in this rulemaking. Manufacturers of these products currently offer units that meet or exceed the proposed standards. 5. Impact of Any Lessening of Competition DOE considered any lessening of competition that would be likely to result from new or amended standards. As discussed in section III.E.1.e of this document, the Attorney General determines the impact, if any, of any lessening of competition likely to result from a proposed standard, and transmits such determination in writing to the Secretary, together with an analysis of the nature and extent of such impact. To assist the Attorney General in making this determination, DOE has provided DOJ with copies of this NOPR and the accompanying TSD for review. DOE will consider DOJ’s comments on the proposed rule in determining whether to proceed to a final rule. DOE will publish and respond to DOJ’s comments in that document. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the ADDRESSES section for information to send comments to DOJ. 6. Need of the Nation to Conserve Energy Enhanced energy efficiency, where economically justified, improves the Nation’s energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy production. Reduced electricity demand due to energy conservation standards is also likely to reduce the cost of maintaining the reliability of the electricity system, particularly during peak-load periods. Chapter 15 in the NOPR TSD presents the estimated impacts on electricity generating capacity, relative to the no-newstandards case, for the TSLs that DOE considered in this rulemaking. Energy conservation resulting from potential energy conservation standards for dehumidifiers is expected to yield environmental benefits in the form of reduced emissions of certain air pollutants and greenhouse gases. Table V.25 provides DOE’s estimate of cumulative emissions reductions expected to result from the TSLs considered in this rulemaking. The emissions were calculated using the multipliers discussed in section IV.K of this document. DOE reports annual emissions reductions for each TSL in chapter 13 of the NOPR TSD. TABLE V.25—CUMULATIVE EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 Trial standard level 1 2 3 4 Power Sector Emissions CO2 (million metric tons) ................................................................................. CH4 (thousand tons) ........................................................................................ N2O (thousand tons) ........................................................................................ NOX(thousand tons) ......................................................................................... SO2 (thousand tons) ........................................................................................ Hg (tons) .......................................................................................................... 0.07 0.00 0.00 0.03 0.02 0.000 0.31 0.02 0.00 0.14 0.08 0.001 6.37 0.41 0.06 2.97 1.72 0.011 18.68 1.19 0.16 8.50 5.00 0.033 0.01 0.59 0.00 0.10 0.00 0.000 0.03 2.51 0.00 0.43 0.00 0.000 0.57 51.53 0.00 8.84 0.04 0.000 1.69 153.02 0.01 26.25 0.10 0.000 0.08 0.60 0.00 0.14 0.02 0.000 0.34 2.53 0.00 0.57 0.09 0.001 6.94 51.94 0.06 11.81 1.76 0.012 20.36 154.20 0.17 34.74 5.10 0.034 Upstream Emissions ddrumheller on DSK120RN23PROD with PROPOSALS3 CO2 (million metric tons) ................................................................................. CH4 (thousand tons) ........................................................................................ N2O (thousand tons) ........................................................................................ NOX (thousand tons) ....................................................................................... SO2 (thousand tons) ........................................................................................ Hg (tons) .......................................................................................................... Total FFC Emissions CO2 (million metric tons) ................................................................................. CH4 (thousand tons) ........................................................................................ N2O (thousand tons) ........................................................................................ NOX (thousand tons) ....................................................................................... SO2 (thousand tons) ........................................................................................ Hg (tons) .......................................................................................................... VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules As part of the analysis for this rulemaking, DOE estimated monetary benefits likely to result from the reduced emissions of CO2 that DOE estimated for each of the considered TSLs for dehumidifiers. Section IV.L of this document discusses the SC–CO2 values that DOE used. Table V.26 presents the value of CO2 emissions reduction at each TSL for each of the 76559 SC–CO2 cases. The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. TABLE V.26—PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 SC–CO2 case Discount rate and statistics TSL 5% 3% 2.5% 3% Average Average Average 95th percentile Billion 2022$ 1 2 3 4 ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... As discussed in section IV.L.2 of this document, DOE estimated the climate benefits likely to result from the reduced emissions of methane and N2O that DOE estimated for each of the 0.00 0.00 0.08 0.22 considered TSLs for dehumidifiers. Table V.27 presents the value of the CH4 emissions reduction at each TSL, and Table V.28 presents the value of the N2O emissions reduction at each TSL. The 0.00 0.02 0.32 0.92 0.01 0.02 0.50 1.43 0.01 0.05 0.98 2.79 time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. TABLE V.27—PRESENT VALUE OF METHANE EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 SC–CH4 case Discount rate and statistics TSL 5% 3% 2.5% 3% Average Average Average 95th percentile Million 2022$ 1 2 3 4 ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... 0.31 1.28 26.43 74.88 0.88 3.65 75.40 219.14 1.21 5.04 104.13 304.41 2.33 9.66 200.00 579.67 TABLE V.28—PRESENT VALUE OF NITROUS OXIDE EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 SC–N2O case Discount rate and statistics TSL 5% 3% 2.5% 3% Average Average Average 95th percentile Million 2022$ ddrumheller on DSK120RN23PROD with PROPOSALS3 1 2 3 4 ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... ....................................................................................................................... DOE is well aware that scientific and economic knowledge about the contribution of CO2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the global and U.S. economy continues to evolve rapidly. DOE, together with other Federal VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 0.00 0.01 0.25 0.69 agencies, will continue to review methodologies for estimating the monetary value of reductions in CO2 and other GHG emissions. This ongoing review will consider the comments on this subject that are part of the public record for this and other rulemakings, as well as other methodological PO 00000 Frm 00051 Fmt 4701 Sfmt 4702 0.01 0.05 0.96 2.71 0.02 0.07 1.47 4.17 0.03 0.12 2.56 7.20 assumptions and issues. DOE notes that the proposed standards would be economically justified even without inclusion of monetized benefits of reduced GHG emissions. DOE also estimated the monetary value of the health benefits associated with NOX and SO2 emissions reductions E:\FR\FM\06NOP3.SGM 06NOP3 76560 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules anticipated to result from the considered TSLs for dehumidifiers. The dollar-per-ton values that DOE used are discussed in section IV.L of this document. Table V.29 presents the present value for NOX emissions reduction for each TSL calculated using 7-percent and 3-percent discount rates, and Table V.30 presents similar results for SO2 emissions reductions. The results in these tables reflect application of EPA’s low dollar-per-ton values, which DOE used to be conservative. The time-series of annual values is presented for the proposed TSL in chapter 14 of the NOPR TSD. TABLE V.29—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 3% Discount rate TSL 7% Discount rate Million 2022$ 1 2 3 4 ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... 7.26 29.32 610.43 1,716.52 3.33 13.09 270.11 716.08 TABLE V.30—PRESENT VALUE OF SO2 EMISSIONS REDUCTION FOR DEHUMIDIFIERS SHIPPED IN 2028–2057 3% Discount rate TSL 7% Discount rate Million 2022$ 1 2 3 4 ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... ............................................................................................................................................................................... Not all the public health and environmental benefits from the reduction of greenhouse gases, NOX, and SO2 are captured in the values above, and additional unquantified benefits from the reductions of those pollutants as well as from the reduction of direct PM and other co-pollutants may be significant. DOE has not included monetary benefits of the reduction of Hg emissions because the amount of reduction is very small. 7. Other Factors The Secretary of Energy, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis. 8. Summary of Economic Impacts Table V.31 presents the NPV values that result from adding the estimates of the potential economic benefits resulting from reduced GHG and NOX 1.51 6.11 126.15 352.00 0.71 2.78 56.92 149.67 and SO2 emissions to the NPV of consumer benefits calculated for each TSL considered in this rulemaking. The consumer benefits are domestic U.S. monetary savings that occur as a result of purchasing the covered products, and are measured for the lifetime of products shipped in 2028–2057. The climate benefits associated with reduced GHG emissions resulting from the adopted standards are global benefits, and are also calculated based on the lifetime of dehumidifiers shipped in 2028–2057. TABLE V.31—CONSUMER NPV COMBINED WITH PRESENT VALUE OF CLIMATE BENEFITS AND HEALTH BENEFITS Category TSL 1 TSL 2 TSL 3 TSL 4 Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$) 5% Average SC–GHG case ............................................................................ 3% Average SC–GHG case ............................................................................ 2.5% Average SC–GHG case ......................................................................... 3% 95th percentile SC–GHG case .................................................................. 0.03 0.03 0.03 0.04 0.11 0.13 0.14 0.16 3.45 3.75 3.95 4.53 4.57 5.42 6.02 7.65 1.69 1.99 2.19 2.77 1.66 2.50 3.10 4.74 ddrumheller on DSK120RN23PROD with PROPOSALS3 Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$) 5% Average SC–GHG case ............................................................................ 3% Average SC–GHG case ............................................................................ 2.5% Average SC–GHG case ......................................................................... 3% 95th percentile SC–GHG case .................................................................. C. Conclusion When considering new or amended energy conservation standards, the standards that DOE adopts for any type (or class) of covered product must be VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 0.01 0.02 0.02 0.03 designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. PO 00000 Frm 00052 Fmt 4701 Sfmt 4702 0.05 0.07 0.08 0.10 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) For this NOPR, DOE considered the impacts of amended standards for dehumidifiers at each TSL, beginning with the maximum technologically feasible level, to determine whether that level was economically justified. Where the max-tech level was not justified, DOE then considered the next most efficient level and undertook the same evaluation until it reached the highest efficiency level that is both technologically feasible and economically justified and saves a significant amount of energy. To aid the reader as DOE discusses the benefits and/or burdens of each TSL, tables in this section present a summary of the results of DOE’s quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification. These include the impacts on identifiable subgroups of consumers who may be disproportionately affected by a national standard and impacts on employment. DOE also notes that the economics literature provides a wide-ranging discussion of how consumers trade off upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. There is evidence that consumers undervalue future energy savings as a result of (1) a lack of information, (2) a lack of sufficient salience of the long-term or aggregate benefits, (3) a lack of sufficient savings to warrant delaying or altering purchases, (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments, (5) computational or other difficulties associated with the evaluation of relevant tradeoffs, and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Having less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher than expected rate between current consumption and uncertain future energy cost savings. In DOE’s current regulatory analysis, potential changes in the benefits and costs of a regulation due to changes in consumer purchase decisions are included in two ways. First, if consumers forgo the purchase of a product in the standards case, this decreases sales for product manufacturers, and the impact on manufacturers attributed to lost revenue is included in the MIA. This approach includes changes to future shipments and INPV but does not include the forgone value to consumers who are no longer expected to purchase a dehumidifier in the standards case. Second, DOE accounts for energy savings attributable only to products actually used by consumers in the standards case; if a standard decreases the number of products purchased by consumers, this decreases the potential energy savings from an energy conservation standard. DOE provides estimates of shipments and changes in the volume of product purchases in chapter 9 of the NOPR TSD. However, DOE’s current analysis does not 76561 explicitly control for heterogeneity in consumer preferences, preferences across subcategories of products or specific features, or consumer price sensitivity variation according to household income.68 While DOE is not prepared at present to provide a fuller quantifiable framework for estimating the benefits and costs of changes in consumer purchase decisions due to an energy conservation standard, DOE is committed to developing a framework that can support empirical quantitative tools for improved assessment of the consumer welfare impacts of appliance standards. DOE has posted a paper that discusses the issue of consumer welfare impacts of appliance energy conservation standards, and potential enhancements to the methodology by which these impacts are defined and estimated in the regulatory process.69 DOE welcomes comments on how to more fully assess the potential impact of energy conservation standards on consumer choice and how to quantify this impact in its regulatory analysis in future rulemakings. 1. Benefits and Burdens of TSLs Considered for Dehumidifier Standards Table V.32 and Table V.33 summarize the quantitative impacts estimated for each TSL for dehumidifiers. The national impacts are measured over the lifetime of dehumidifiers purchased in the 30-year period that begins in the anticipated year of compliance with amended standards (2028–2057). The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. The efficiency levels contained in each TSL are described in section V.A of this document. TABLE V.32—SUMMARY OF ANALYTICAL RESULTS FOR DEHUMIDIFIER TSLS: NATIONAL IMPACTS Category TSL 1 TSL 2 TSL 3 TSL 4 Cumulative FFC National Energy Savings Quads .............................................................................................................. 0.00 0.02 0.33 0.99 0.34 2.53 0.00 0.57 0.09 0.00 6.94 51.94 0.06 11.81 1.76 0.01 20.36 154.20 0.17 34.74 5.10 0.03 ddrumheller on DSK120RN23PROD with PROPOSALS3 Cumulative FFC Emissions Reduction CO2 (million metric tons) ................................................................................. CH4 (thousand tons) ........................................................................................ N2O (thousand tons) ........................................................................................ NOX (thousand tons) ....................................................................................... SO2 (thousand tons) ........................................................................................ Hg (tons) .......................................................................................................... 68 P.C. Reiss and M.W. White. Household Electricity Demand, Revisited. Review of Economic Studies. 2005. 72(3): pp. 853–883. doi: 10.1111/ 0034–6527.00354. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 0.08 0.60 0.00 0.14 0.02 0.00 69 Sanstad, A.H. Notes on the Economics of Household Energy Consumption and Technology Choice. 2010. Lawrence Berkeley National Laboratory. Available at www1.eere.energy.gov/ PO 00000 Frm 00053 Fmt 4701 Sfmt 4702 buildings/appliance_standards/pdfs/consumer_ee_ theory.pdf (last accessed February 22, 2023). E:\FR\FM\06NOP3.SGM 06NOP3 76562 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules TABLE V.32—SUMMARY OF ANALYTICAL RESULTS FOR DEHUMIDIFIER TSLS: NATIONAL IMPACTS—Continued Category TSL 1 TSL 2 TSL 3 TSL 4 Present Value of Benefits and Costs (3% discount rate, billion 2022$) Consumer Operating Cost Savings ................................................................. Climate Benefits * ............................................................................................. Health Benefits ** ............................................................................................. Total Benefits † ................................................................................................ Consumer Incremental Product Costs ‡ .......................................................... Consumer Net Benefits ................................................................................... Total Net Benefits ............................................................................................ 0.03 0.00 0.01 0.05 0.02 0.02 0.03 0.13 0.02 0.04 0.19 0.06 0.07 0.13 2.75 0.40 0.74 3.89 0.14 2.61 3.75 7.80 1.14 2.07 11.01 5.59 2.21 5.42 1.34 0.40 0.33 2.07 0.08 1.26 1.99 3.59 1.14 0.87 5.59 3.09 0.50 2.50 Present Value of Benefits and Costs (7% discount rate, billion 2022$) Consumer Operating Cost Savings ................................................................. Climate Benefits * ............................................................................................. Health Benefits ** ............................................................................................. Total Benefits † ................................................................................................ Consumer Incremental Product Costs ‡ .......................................................... Consumer Net Benefits ................................................................................... Total Net Benefits ............................................................................................ 0.02 0.00 0.00 0.03 0.01 0.01 0.02 0.07 0.02 0.02 0.10 0.03 0.03 0.07 Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028–2057. These results include benefits to consumers which accrue after 2057 from the products shipped in 2028–2057. * Climate benefits are calculated using four different estimates of the SC–CO2, SC–CH4 and SC–N2O. Together, these represent the global SC–GHG. For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. † Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate and emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. ‡ Costs include incremental equipment costs as well as installation costs. TABLE V.33—SUMMARY OF ANALYTICAL RESULTS FOR DEHUMIDIFIER TSLS: MANUFACTURER AND CONSUMER IMPACTS Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * Manufacturer Impacts Industry NPV (million 2022$) (No-new-standards case INPV = $158.3) ..................................................................................... Industry NPV (% change) ............................................................ 157.8 to 158.0 (0.3) to (0.2) 157.4 to 158.1 (0.6) to (0.2) 153.1 to 155.0 (3.3) to (2.1) 73.0 to 121.6 (53.9) to (23.2) $46 $0 ($4) $63 $179 $13 $42 $81 $31 $56 $146 $71 ($9) $14 ($52) $12 $81 $7 0.9 0.8 8.7 6.9 2.9 1.0 0.9 0.6 4.8 6.4 5.7 0.8 6.3 5.3 11.2 7.2 7.8 5.6 1% 0% 65% 4% 7% 1% 3% 0% 33% 8% 38% 1% 65% 60% 74% 56% 53% 61% Consumer Average LCC Savings (2022$) PC 1: Portable Dehumidifiers ≤25.00 Pints/Day ......................... PC 2: Portable Dehumidifiers 25.01–50.00 Pints/Day ................ PC 3: Portable Dehumidifiers >50.00 Pints/Day ......................... PC 4: Whole-Home Dehumidifiers ≤8.0 cu. ft. Case Volume ..... PC 5: Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume ..... Shipment-Weighted Average * ..................................................... $0 $0 $31 $63 $53 $1 Consumer Simple PBP (years) ddrumheller on DSK120RN23PROD with PROPOSALS3 PC 1: Portable Dehumidifiers ≤25.00 Pints/Day ......................... PC 2: Portable Dehumidifiers 25.01–50.00 Pints/Day ................ PC 3: Portable Dehumidifiers >50.00 Pints/Day ......................... PC 4: Whole-Home Dehumidifiers ≤8.0 cu. ft. Case Volume ..... PC 5: Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume ..... Shipment-Weighted Average * ..................................................... 1.0 0.7 4.8 6.9 5.6 0.9 Percent of Consumers That Experience a Net Cost PC 1: Portable Dehumidifiers ≤25.00 Pints/Day ......................... PC 2: Portable Dehumidifiers 25.01–50.00 Pints/Day ................ PC 3: Portable Dehumidifiers >50.00 Pints/Day ......................... PC 4: Whole-Home Dehumidifiers ≤8.0 cu. ft. Case Volume ..... PC 5: Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume ..... Shipment-Weighted Average * ..................................................... 0% 0% 33% 4% 19% 0% Parentheses indicate negative (¥) values. * Weighted by shares of each product class in total projected shipments in 2022. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00054 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules DOE first considered TSL 4, which represents the max-tech efficiency levels. At this TSL, all product classes would require the most efficient compressor found in DOE’s physical teardowns of commercially available models, an ECM blower fan with associated variable-speed driver, controls with lower inactive mode power consumption, and the largest heat exchangers observed from DOE’s physical teardowns of commercially available models in each product class. TSL 4 would save an estimated 0.99 quads of energy, an amount DOE considers significant. Under TSL 4, the NPV of consumer benefit would be $0.50 billion using a discount rate of 7 percent, and $2.21 billion using a discount rate of 3 percent. The cumulative emissions reductions at TSL 4 are 20.36 Mt of CO2, 5.10 thousand tons of SO2, 34.74 thousand tons of NOX, 0.03 tons of Hg, 154.20 thousand tons of CH4, and 0.17 thousand tons of N2O. The estimated monetary value of the climate benefits from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 4 is $1.14 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 4 is $0.87 billion using a 7-percent discount rate and $2.07 billion using a 3-percent discount rate. Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO2 and NOX emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated total NPV at TSL 4 is $2.50 billion. Using a 3-percent discount rate for all benefits and costs, the estimated total NPV at TSL 4 is $5.42 billion. The estimated total NPV is provided for additional information, however DOE primarily relies upon the NPV of consumer benefits when determining whether a proposed standard level is economically justified. Portable dehumidifiers in the CCD range in capacity from 1.7 to 104.3 pints per day and account for 98 percent of the current dehumidifier shipments.70 Within the portable segment of the market, there are three product classes differentiated by capacity range. Portable dehumidifiers with capacities greater than 25.0 pints per day and less than or equal to 50.0 pints per day (PC 2) have the largest market share accounting for approximately 73 percent 70 Current shipments estimates refer to the 2022 shipments distribution in the no-new-standards case. See section IV.F.8 of this document for details on the energy efficiency distribution in the no-newstandards case. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 of portable dehumidifier shipments. Portable dehumidifiers with capacities less than or equal to 25.0 pints per day (PC 1) account for approximately 26 percent of portable dehumidifier shipments. Portable dehumidifiers with capacities greater than 50.0 pints per day (PC 3) account for the remaining 1 percent of portable dehumidifier shipments. Whole-home dehumidifiers are categorized into two product classes based on case volume and correspond to 2 percent of the total dehumidifier market. Whole-home units range in case volume between 1.7 cu. ft. and 9.5 cu. ft. Whole-home dehumidifiers with case volumes less than or equal to 8.0 cu. ft. (PC 4) account for 85 percent of wholehome dehumidifier shipments in 2022. For portable dehumidifiers at TSL 4, the average LCC impact is a savings of $14 for PC 2, a net cost of $9 for PC 1 and $52 for PC 3. The simple payback period is 6.3 years for PC 1, 5.3 years for PC 2, and 11.2 years for PC 3. Notably, the simple payback period for PC 3 exceeds the expected average lifetime of 10 years for portable dehumidifiers. The fraction of consumers experiencing a net LCC cost is 65 percent for PC 1, 60 percent for PC 2, and 74 percent for PC 3. For wholehome dehumidifiers, the average LCC impact is a savings of $12 for PC 4 and $81 for PC 5. The simple payback is 7.2 years for PC 4 and 7.8 years for PC 5. The fraction of consumers experiencing a net LCC cost is 56 percent for PC 4 and 53 percent for PC 5. Weighted across the market share for all five product classes, a majority of dehumidifier consumers (61 percent) would experience a net cost. An analysis of RECS 2020 indicates that 97 percent of low-income households that own a dehumidifier own a portable unit. Assuming the lowincome sample has a similar market distribution in portable dehumidifier capacities as the national sample, DOE estimates that approximately 25 percent of low-income dehumidifier consumers purchase units in PC 1 and 71 percent in PC 2. At TSL 4, low-income households experience an average net LCC cost of $37 for PC 1 and $21 for PC 2. The percentage of low-income consumers who experience a net LCC cost is 73 percent for PC 1 and 68 percent for PC 2. Low-income households will experience an installed cost increase of $169 for PC 1 (60 percent price increase relative to baseline unit) and $179 for PC 2 (57 percent price increase relative to baseline unit). The simple payback period for low-income households is 7.6 years for PC 1 and 6.4 years for PC 2. PO 00000 Frm 00055 Fmt 4701 Sfmt 4702 76563 At TSL 4, the projected change in INPV ranges from a decrease of $85.3 million to a decrease of $36.8 million, which corresponds to decreases of 53.9 percent and 23.2 percent, respectively. DOE estimates that industry must invest $73.9 million to completely redesign nearly all models to accommodate larger heat exchangers and new chassis designs. Overall, DOE estimates that less than 1 percent of current industry shipments meet the efficiencies required at TSL 4. A max-tech standard would require significant investment. Most manufacturers would need to incorporate larger heat exchangers, which would necessitate increasing chassis dimensions of both portable and whole-home units since most dehumidifiers cannot accommodate a larger heat exchanger within the existing cabinet structure. For the portable dehumidifier classes, which together account for nearly 98 percent of industry shipments, most manufacturers would need to make significant investments to adjust equipment and tooling to accommodate new dimensions across their entire product portfolio. DOE estimates that no portable dehumidifier shipments currently meet the max-tech efficiencies. Of the 15 portable dehumidifier OEMs, none currently offer any models that meet the max-tech efficiencies. Whole-home dehumidifiers account for the remaining 2 percent of industry shipments. DOE estimates that approximately 3 percent of whole-home dehumidifier shipments meet max-tech efficiencies. DOE identified only three OEMs producing whole-home dehumidifiers for the U.S. market. Of those three whole-home OEMs, only one currently offers a PC 4 model that meets the max-tech level. The other two OEMs would therefore need to dedicate significant engineering resources to redesign their entire product portfolio to include larger heat exchangers, which would necessitate a change in dimensions and chassis designs. For product class 5, only one OEM manufacturers whole-home dehumidifiers greater than 8.0 cu. ft. (PC 5). This OEM does not currently offer any models that meet the max-tech efficiency required. Given the limited number of whole-home OEMs, the limited number of models currently available that meet the max-tech efficiency levels, and the extent of the redesign required for the OEMs without any max-tech product offerings, there is uncertainty whether whole-home products would remain sufficiently available to meet consumer demand at E:\FR\FM\06NOP3.SGM 06NOP3 ddrumheller on DSK120RN23PROD with PROPOSALS3 76564 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules the compliance date of amended standards set at TSL 4. At this TSL, DOE expects an estimated 23-percent drop in shipments compared to the no-newstandards case shipments in the year the standard takes effect (2028), as some consumers may forgo or delay purchasing a new dehumidifier due to the increased upfront cost of standardscompliant models. The Secretary tentatively concludes that at TSL 4 for dehumidifiers, the benefits of energy savings, positive NPV of consumer benefits, emission reductions, and the estimated monetary value of the emissions reductions would be outweighed by the economic burden on a majority of consumers, and the impacts on manufacturers, including the large conversion costs, profit margin impacts that could result in a large reduction in INPV, and the lack of manufacturers currently offering products meeting the efficiency levels required at this TSL. Across all product classes, a majority of dehumidifier consumers (61 percent) would experience a net LCC cost. Additionally, the average LCC savings would be negative for PC 1 and PC 3. DOE’s consumer subgroup analysis indicates that both low-income and senior-only households would experience larger economic burdens compared to the national population. All portable dehumidifier product classes, which account for 97 percent of dehumidifiers in low-income households and 98 percent in senior-only households, have a negative average LCC savings and majority of consumers experience a net cost. For PC 2 which accounts for 71 percent of the low-income market share of all dehumidifiers, the average net LCC cost is $21 and 68 percent of the low-income consumers would experience a net cost. Weighted across all product classes, the average lowincome consumer would experience a net LCC cost of $23 and 69 percent of low-income consumers would experience a net cost at TSL 4. The average senior-only household would experience a net LCC cost of $8 and 66 percent of consumers experiencing a net cost. The potential reduction in INPV could be as high as 53.9 percent. The drop in industry value and reduction in free cash flow after the compliance year is driven by a range of factors, but most notably the changes are driven by conversion cost investments manufacturers must make to redesign and produce more efficient products. Most manufacturers would need to dedicate significant capital and engineering resources to develop new chassis designs to accommodate larger VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 heat exchangers. Due to the limited amount of engineering resources each manufacturer has, it is unclear if most manufacturers will be able to redesign their entire product offerings of dehumidifiers covered by this rulemaking in the 3-year compliance period. Consequently, the Secretary has tentatively concluded that TSL 4 is not economically justified. DOE then considered TSL 3, which represents efficiency level 3 for PC 1, PC 2, and PC 5, efficiency level 1 for PC 3, and efficiency level 2 for PC 4. At this level, DOE expects that all product classes would incorporate a higher efficiency compressor. For PC 4 and 5, technology options include the addition of an ECM blower and a larger heat exchanger. TSL 3 would save an estimated 0.33 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $1.26 billion using a discount rate of 7 percent, and $2.61 billion using a discount rate of 3 percent. The cumulative emissions reductions at TSL 3 are 6.94 Mt of CO2, 1.76 thousand tons of SO2, 11.81 thousand tons of NOX, 0.01 tons of Hg, 51.94 thousand tons of CH4, and 0.06 thousand tons of N2O. The estimated monetary value of the climate benefits from reduced GHG emissions (associated with the average SC–GHG at a 3-percent discount rate) at TSL 3 is $0.40 billion. The estimated monetary value of the health benefits from reduced SO2 and NOX emissions at TSL 3 is $0.33 billion using a 7-percent discount rate and $0.74 billion using a 3-percent discount rate. Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO2 and NOX emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated total NPV at TSL 3 is $1.99 billion. Using a 3-percent discount rate for all benefits and costs, the estimated total NPV at TSL 3 is $3.75 billion. The estimated total NPV is provided for additional information, however DOE primarily relies upon the NPV of consumer benefits when determining whether a proposed standard level is economically justified. For portable dehumidifiers at TSL 3, the average LCC impact is a savings of $42 for PC 1, $81 for PC 2, and $31 for PC 3. The simple payback period is 0.9 years for PC 1, 0.6 years for PC 2, and 4.8 years for PC 3. The fraction of consumers experiencing a net LCC cost is 3 percent for PC 1, 0 percent for PC 2, and 33 percent for PC 3. For wholehome dehumidifiers, the average LCC PO 00000 Frm 00056 Fmt 4701 Sfmt 4702 savings is $56 for PC 4 and $146 for PC 5. The simple payback period is 6.4 years for PC 4 and 5.7 years for PC 5. The fraction of consumers experiencing a net LCC cost is 8 percent for PC 4 and 38 percent for PC 5. Weighting across all product classes, 1 percent of dehumidifier consumers would experience a net cost. The average LCC savings are positive for all product classes for the national consumer samples as well as for the low-income and senior-only consumer samples. At TSL 3, the percentage of low-income households that experience a net LCC cost is 7 percent for PC 1 and 0 percent for PC 2. At TSL 3, the projected change in INPV ranges from a decrease of $5.2 million to a decrease of $3.3 million, which correspond to decreases of 3.3 percent and 2.1 percent, respectively. DOE estimates that industry must invest $6.9 million to comply with standards set at TSL 3. DOE estimates that approximately 3 percent of industry shipments currently meet the efficiency levels analyzed at TSL 3. DOE estimates that approximately 2 percent of portable dehumidifier shipments currently meet the TSL 3 efficiency levels. At this level, manufacturers would likely incur product conversion costs to qualify, source, and test more efficient compressors. However, DOE does not expect portable dehumidifier manufacturers would need to adopt new or larger chassis designs because the proposed levels may be met through component swaps in existing chassis designs. Thus, DOE does not expect manufacturers would incur notable capital conversion costs to meet the efficiencies required. For whole-home dehumidifiers, DOE expects some manufacturers would need to adopt new or larger chassis designs to accommodate larger heat exchangers but not to the extent required at max-tech. For whole-home dehumidifier designs, DOE expects that the size differences would not necessitate capital investment since existing machinery could likely still be used. DOE estimates that 78 percent of PC 4 shipments (which account for 85 percent of wholehome dehumidifier shipments) meet the efficiency level required. Of the three whole-home dehumidifier OEMs, two OEMs currently offer PC 4 models that meet the efficiency required. As with TSL 4, whole-home dehumidifier manufacturers would likely need to completely redesign models that do not meet the required efficiencies. However, approximately 60 percent of PC 4 basic model listings (around 32 unique basic models), representing the full range of E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules existing sizes of PC 4 models (1.7 to 6.6 cu. ft.), already meet the efficiency level required. After considering the analysis and weighing the benefits and burdens, the Secretary has tentatively concluded that a standard set at TSL 3 for dehumidifiers would be economically justified. At this TSL, the average LCC savings for all product classes are positive. An estimated 1 percent of portable dehumidifier (PC 1, PC 2, and PC 3) and 13 percent of whole-home dehumidifier (PC 4 and PC 5) consumers experience a net cost. The FFC national energy savings are significant and the NPV of consumer benefits is positive using both a 3percent and 7-percent discount rate. Notably, the benefits to consumers vastly outweigh the cost to manufacturers. At TSL 3, the NPV of consumer benefits, even measured at the more conservative discount rate of 7 percent, is approximately 242 times higher than the maximum estimated manufacturers’ loss in INPV. The standard levels at TSL 3 are economically justified even without weighing the estimated monetary value of emissions reductions. When those emissions reductions are included— representing $0.40 billion in climate benefits (associated with the average SC–GHG at a 7-percent discount rate), and $0.74 billion (using a 3-percent discount rate) or $0.33 billion (using a 7-percent discount rate) in health benefits—the rationale becomes stronger still. As stated, DOE conducts the walkdown analysis to determine the TSL that represents the maximum improvement in energy efficiency that is technologically feasible and economically justified as required under EPCA. The walk-down is not a comparative analysis, as a comparative analysis would result in the maximization of net benefits instead of energy savings that are technologically feasible and economically justified, which would be contrary to the statute. 86 FR 70892, 70908. Although DOE has not conducted a comparative analysis to select the proposed energy conservation standards, DOE notes that as compared to TSL 4, TSL 3 has shorter payback periods, smaller percentages of consumer experiencing a net cost, higher LCC savings for all product classes, a lower maximum decrease in INPV, and lower manufacturer conversion costs. Although DOE considered proposed amended standard levels for dehumidifiers by grouping the efficiency levels for each product class into TSLs, DOE evaluates all analyzed efficiency levels in its analysis. For portable dehumidifiers with capacities less than or equal to 50.0 pints per day, which account for 97 percent of the dehumidifier market, TSL 3 represents the maximum energy savings that does not result in a large percentage of consumers experiencing a net LCC cost. Efficiency levels above the proposed standard have lower LCC savings and a significantly larger percentage of consumers that experience a net cost. For portable dehumidifiers with capacities greater than 50.0 pints per day, which accounts for 1.1 percent of the dehumidifier market, TSL 3 corresponds to EL 1, the only efficiency 76565 level with positive LCC savings and a majority of consumers either not impacted or positively impacted by the proposed standard. For whole-home dehumidifiers, which represent 1.6 percent of the dehumidifier market, TSL 3 corresponds to efficiency levels one level below the max-tech efficiency level. For PC 4, which accounts for approximately 85 of the whole-home dehumidifier shipments, one OEM (out of the three whole-home OEMs) currently offers one model that meets the max-tech level. Given the limited number of whole-home OEMs, the limited number of models currently available that meet the max-tech efficiency level, and the extent of the redesign required for the OEMs without any max-tech product offerings, there is a risk that the 3-year period between the announcement of the final rule and the compliance date of the amended energy conservation standard might be insufficient to design, test, and manufacture the necessary number of whole-home products to meet consumer demand. For PC 5, a majority of consumers would experience negative LCC savings at the max-tech efficiency level. At the proposed TSL, the LCC savings are higher and the percent negatively impacted consumers are lower compared to the max-tech efficiency level. Therefore, based on the previous considerations, DOE proposes to adopt the energy conservation standards for dehumidifiers at TSL 3. The proposed amended energy conservation standards for dehumidifiers, which are expressed as IEF, are shown in Table V.34. TABLE V.34—PROPOSED AMENDED ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS Minimum integrated energy factor (L/kWh) Product class TSL 3 ddrumheller on DSK120RN23PROD with PROPOSALS3 PC PC PC PC PC 1: 2: 3: 4: 5: Portable Dehumidifiers ≤25.00 Pints/Day ............................................................................................................................... Portable Dehumidifiers 25.01–50.00 Pints/Day ...................................................................................................................... Portable Dehumidifiers >50.00 Pints/Day ............................................................................................................................... Whole-Home Dehumidifiers ≤8.0 cu. ft. Case Volume ........................................................................................................... Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume ........................................................................................................... 2. Annualized Benefits and Costs of the Proposed Standards The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The annualized net benefit is (1) the annualized national economic value (expressed in 2022$) of the benefits from operating products that meet the proposed standards VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 (consisting primarily of operating cost savings from using less energy, minus increases in product purchase costs), and (2) the annualized monetary value of the climate and health benefits from emission reductions. Table V.35 shows the annualized values for dehumidifiers under TSL 3, expressed in 2022$. The results under the primary estimate are as follows. PO 00000 Frm 00057 Fmt 4701 Sfmt 4702 1.70 2.01 3.10 2.22 3.81 Using a 7-percent discount rate for consumer benefits and costs and NOX and SO2 reduction benefits, and a 3percent discount rate case for GHG social costs, the estimated cost of the proposed standards for dehumidifiers is $8.55 million per year in increased equipment costs, while the estimated annual benefits are $142.04 million from reduced equipment operating E:\FR\FM\06NOP3.SGM 06NOP3 76566 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules costs, $22.85 million from GHG reductions, and $34.54 million from reduced NOX and SO2 emissions. In this case, the net benefit amounts to $190.89 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards for dehumidifiers is $7.89 million per year in increased equipment costs, while the estimated annual benefits are $157.99 million in reduced operating costs, $22.85 million from GHG reductions, and $42.30 million from reduced NOX and SO2 emissions. In this case, the net benefit amounts to $215.24 million per year. TABLE V.35—ANNUALIZED BENEFITS AND COSTS OF PROPOSED ENERGY CONSERVATION STANDARDS FOR DEHUMIDIFIERS [TSL 3] Million 2022$/year Primary estimate Low-net-benefits estimate High-net-benefits estimate 3% discount rate Consumer Operating Cost Savings ............................................................................. Climate Benefits * ......................................................................................................... Health Benefits ** ......................................................................................................... Total Benefits † ............................................................................................................ Consumer Incremental Product Costs ‡ ...................................................................... Net Benefits ................................................................................................................. Change in Producer Cashflow (INPV ‡‡) .................................................................... 157.99 22.85 42.30 223.14 7.89 215.24 (0.5)–(0.3) 153.04 22.66 41.95 217.65 7.94 209.71 (0.5)–(0.3) 163.15 22.93 42.42 228.50 7.77 220.74 (0.5)–(0.3) 142.04 22.85 34.54 199.44 8.55 190.89 (0.5)–(0.3) 138.10 22.66 34.31 195.07 8.58 186.49 (0.5)–(0.3) 146.50 22.93 34.64 204.06 8.44 195.62 (0.5)–(0.3) 7% discount rate ddrumheller on DSK120RN23PROD with PROPOSALS3 Consumer Operating Cost Savings ............................................................................. Climate Benefits * (3% discount rate) .......................................................................... Health Benefits ** ......................................................................................................... Total Benefits † ............................................................................................................ Consumer Incremental Product Costs ‡ ...................................................................... Net Benefits ................................................................................................................. Change in Producer Cashflow (INPV ‡‡) .................................................................... Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028–2057. These results include benefits to consumers which accrue after 2057 from the products shipped in 2028¥2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding. * Climate benefits are calculated using four different estimates of the global SC–GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC–GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC–GHG point estimate and emphasizes the importance and value of considering the benefits calculated using all four sets of SC–GHG estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). ** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. See section IV.L of this document for more details. † Total benefits for both the 3-percent and 7-percent cases are presented using the average SC–GHG with 3-percent discount rate, but DOE does not have a single central SC–GHG point estimate. ‡ Costs include incremental equipment costs as well as installation costs. ‡‡ Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE’s national impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (i.e., manufacturer impact analysis, or ‘‘MIA’’). See section IV.J of this document. In the detailed MIA, DOE models manufacturers’ pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule’s expected impact on the INPV. The change in INPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For dehumidifiers, the annualized change in INPV ranges from ¥$0.5 million to ¥$0.3 million. DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB’s Circular A–4 and E.O. 12866. If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would range from $190.4 million to $190.6 million at 7-percent discount rate. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00058 Fmt 4701 Sfmt 4702 E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules D. Reporting, Certification, and Sampling Plan Manufacturers, including importers, must use product-specific certification templates to certify compliance to DOE. For dehumidifiers, the certification template reflects the general certification requirements specified at 10 CFR 429.12. As discussed in the previous paragraphs, DOE is not proposing to amend the product-specific certification requirements for these products. ddrumheller on DSK120RN23PROD with PROPOSALS3 VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866, 13563 and 14094 E.O. 12866, ‘‘Regulatory Planning and Review,’’ as supplemented and reaffirmed by E.O. 13563, ‘‘Improving Regulation and Regulatory Review,’’ 76 FR 3821 (Jan. 21, 2011) and amended by E.O. 14094, ‘‘Modernizing Regulatory Review,’’ 88 FR 21879 (April 11, 2023), requires agencies, to the extent permitted by law, to (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (‘‘OIRA’’) in the Office of Management and Budget (‘‘OMB’’) has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 stated in the preamble, this proposed regulatory action is consistent with these principles. Section 6(a) of E.O. 12866 also requires agencies to submit ‘‘significant regulatory actions’’ to OIRA for review. OIRA has determined that this proposed regulatory action constitutes a ‘‘significant regulatory action’’ within the scope of section 3(f)(1) of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the proposed regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation why the planned regulatory action is preferable to the identified potential alternatives. These assessments are summarized in this preamble and further detail can be found in the technical support document for this rulemaking. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (‘‘IRFA’’) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by E.O. 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel’s website (www.energy.gov/gc/ office-general-counsel). DOE has prepared the following IRFA for the products that are the subject of this rulemaking. For manufacturers of dehumidifiers, the SBA has set a size threshold, which defines those entities classified as ‘‘small businesses’’ for the purposes of the statute. DOE used the SBA’s small business size standards to determine whether any small entities would be subject to the requirements of the rule. (See 13 CFR part 121.) The size standards are listed by North American Industry Classification System (NAICS) code and industry description and are PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 76567 available at www.sba.gov/document/ support--table-size-standards. Manufacturing of portable dehumidifiers is classified under NAICS 335210, ‘‘Small Electrical Appliance Manufacturing’’ and manufacturing of whole-home dehumidifiers is classified under NAICS 333415, ‘‘Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.’’ For NAICS 335210, the SBA sets a threshold of 1,500 employees or less and for NAICS 333415, the SBA sets a threshold of 1,250 employees or less, for an entity to be considered as a small business for these categories. For the purpose of this IRFA, DOE used the higher employee limit of 1,500 in order to establish a more inclusive threshold for what determines a ‘‘small business.’’ 1. Description of Reasons Why Action Is Being Considered DOE is proposing amended energy conservation standards for dehumidifiers. EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part B of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include dehumidifiers, the subject of this document. (42 U.S.C. 6295(cc)) In a final rule published on June 13, 2016, DOE prescribed the current energy conservation standards for dehumidifiers manufactured on and after June 13, 2019. 81 FR 38338. EPCA provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) This propose rulemaking is in accordance with DOE’s obligations under EPCA. 2. Objectives of, and Legal Basis for, Rule EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part B of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include dehumidifiers, the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed energy conservation standards for these products. Id. EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or E:\FR\FM\06NOP3.SGM 06NOP3 76568 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) ddrumheller on DSK120RN23PROD with PROPOSALS3 3. Description on Estimated Number of Small Entities Regulated DOE conducted a market assessment using public information and subscription-based company reports to identify potential small manufacturers. DOE began its assessment by compiling a product database of dehumidifier models available in the United States. To develop a comprehensive product database of dehumidifier basic models, DOE reviewed its Compliance Certification Database (CCD),71 supplemented by information from California Energy Commission’s Modernized Appliance Efficiency Database System (MAEDbS),72 EPA’s ENERGY STAR Product Finder data set,73 individual company websites, and prior dehumidifier rulemakings. DOE then reviewed the comprehensive product database to identify the original equipment manufacturers (OEMs) of the dehumidifier models identified. DOE consulted publicly available data, such as manufacturer websites, manufacturer specifications and product literature, import/export logs (e.g., bills of lading from Panjiva 74), and basic model numbers, to identify OEMs of covered dehumidifiers. DOE further relied on public data and subscription-based market research tools (e.g., Dun & Bradstreet reports 75) to determine company, location, headcount, and annual revenue. DOE screened out companies that do not offer products covered by this rulemaking, do not meet the SBA’s definition of a ‘‘small business,’’ or are foreign-owned and operated. Based on its review, DOE identified 20 OEMs that sell dehumidifiers in the 71 U.S. Department of Energy’s Compliance Certification Database is available at: www.regulations.doe.gov/certification-data/ #q=Product_Group_s%3A* (Last accessed February 21, 2023). 72 California Energy Commission’s Modernized Appliance Efficiency Database System is available at: cacertappliances.energy.ca.gov/Pages/Search/ AdvancedSearch.aspx. (Last accessed February 21, 2023.) 73 U.S. Environmental Protection Agency’s ENERGY STAR Product Finder data set is available at: www.energystar.gov/productfinder/ (Last accessed February 21, 2023.) 74 S&P Global. Panjiva Market Intelligence is available at: panjiva.com/import-export/UnitedStates (Last accessed May 5, 2022). 75 The Dun & Bradstreet Hoovers subscription login is available at app.dnbhoovers.com. (Last accessed March 23, 2023). VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 United States. DOE then determined that of the 20 OEMs, 19 were either large OEMs or are foreign owned and operated. Therefore, DOE tentatively determined that one company is a small, domestic manufacturer that meets the SBA’s definition of a ‘‘small business’’ (i.e., the company has 1,500 employees or less) and manufactures products covered by this rulemaking. This small business manufactures whole-home dehumidifiers ≤8.0 cubic feet (Product Class 4). DOE reached out to this small business and invited them to participate in voluntary interviews. However, this small business did not consent to participate in the voluntary interviews conducted in support of the NOPR analysis. DOE also requested information about small businesses and potential impacts on small businesses while interviewing larger manufacturers. 4. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities DOE reviewed its product database and identified 35 basic models of whole-home dehumidifiers with a capacity of under 8.0 cubic feet (Product Class 4) manufactured by this small, domestic OEM. Of those 35 models, 23 models currently meet the TSL 3 efficiency level. Should this small business choose to redesign the 12 models that do not currently meet the proposed amended standard, DOE estimates that the small business would need to invest $337,000 in product conversion costs to redesign all 12 models to incorporate higher efficiency compressors, ECM blowers, and larger heat exchangers. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make product designs comply with amended energy conservation standards. DOE’s engineering analysis indicates manufacturers would likely be able to produce compliant products with existing machinery, and, therefore, DOE tentatively does not expect meeting the proposed standard would require new equipment or tooling. DOE’s analysis focused on the investments associated with amended standards; investments associated with changes in regulations by other State or Federal agencies (i.e., refrigerant regulations) are not attributed to amended standards. Based on annual revenue estimates from Dun & Bradstreet, DOE estimated the company’s annual revenue to be $221 million. The total conversion costs of $337,000 are less than 0.1 percent of PO 00000 Frm 00060 Fmt 4701 Sfmt 4702 company revenue over the 3-year conversion period. DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by product class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers. 5. Duplication, Overlap, and Conflict With Other Rules and Regulations DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the proposed rule. 6. Significant Alternatives to the Rule The discussion in the previous section analyzes impacts on small businesses that would result from DOE’s proposed rule, represented by TSL 3. In reviewing alternatives to the proposed rule, DOE examined energy conservation standards set at lower efficiency levels. While TSL 1 and TSL 2 would reduce the impacts on small business manufacturers, it would come at the expense of a reduction in energy savings. TSL 1 achieves 98 percent lower energy savings compared to the energy savings at TSL 3. TSL 2 achieves 95 percent lower energy savings compared to the energy savings at TSL 3. Based on the presented discussion, establishing standards at TSL 3 balances the benefits of the energy savings at TSL 3 with the potential burdens placed on dehumidifier manufacturers, including small business manufacturers. Accordingly, DOE does not propose one of the other TSLs considered in the analysis, or the other policy alternatives examined as part of the regulatory impact analysis and included in chapter 17 of the NOPR TSD. Additional compliance flexibilities may be available through other means. EPCA provides that a manufacturer whose annual gross revenue from all of its operations does not exceed $8 million may apply for an exemption from all or part of an energy conservation standard for a period not longer than 24 months after the effective date of a final rule establishing the standard. (42 U.S.C. 6295(t)) Additionally, manufacturers subject to DOE’s energy efficiency standards may apply to DOE’s Office of Hearings and Appeals for exception relief under certain circumstances. Manufacturers should refer to 10 CFR part 430, subpart E, and 10 CFR part 1003 for additional details. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules C. Review Under the Paperwork Reduction Act Manufacturers of dehumidifiers must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for dehumidifiers, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including dehumidifiers. (See generally 10 CFR part 429). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (‘‘PRA’’). This requirement has been approved by OMB under OMB control number 1910–1400. Public reporting burden for the certification is estimated to average 35 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. ddrumheller on DSK120RN23PROD with PROPOSALS3 D. Review Under the National Environmental Policy Act of 1969 DOE is analyzing this proposed regulation in accordance with the National Environmental Policy Act of 1969 (‘‘NEPA’’) and DOE’s NEPA implementing regulations (10 CFR part 1021). DOE’s regulations include a categorical exclusion for rulemakings that establish energy conservation standards for consumer products or industrial equipment. 10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this rulemaking qualifies for categorical exclusion B5.1 because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, none of the exceptions identified in categorical exclusion B5.1(b) apply, no extraordinary circumstances exist that require further environmental analysis, and it otherwise meets the requirements for application of a categorical exclusion. See 10 CFR 1021.410. DOE will complete its NEPA review before issuing the final rule. VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 E. Review Under Executive Order 13132 E.O. 13132, ‘‘Federalism,’’ 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of this proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) Therefore, no further action is required by Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, ‘‘Civil Justice Reform,’’ imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Regarding the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any, (2) clearly specifies any effect on existing Federal law or regulation, (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction, (4) specifies the retroactive effect, if any, (5) PO 00000 Frm 00061 Fmt 4701 Sfmt 4702 76569 adequately defines key terms, and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of E.O. 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (‘‘UMRA’’) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104–4, section 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed ‘‘significant intergovernmental mandate,’’ and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE’s policy statement is also available at www.energy.gov/sites/prod/ files/gcprod/documents/umra_97.pdf. This rule does not contain a Federal intergovernmental mandate, nor is it expected to require expenditures of $100 million or more in any one year by the private sector. As a result, the analytical requirements of UMRA do not apply. H. Review Under the Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105–277) requires E:\FR\FM\06NOP3.SGM 06NOP3 76570 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review Under Executive Order 12630 Pursuant to E.O. 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights,’’ 53 FR 8859 (Mar. 15, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. ddrumheller on DSK120RN23PROD with PROPOSALS3 J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M–19–15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/ 12/f70/DOE%20Final%20Updated %20IQA%20Guidelines %20Dec%202019.pdf. DOE has reviewed this NOPR under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 E.O. 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,’’ 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. DOE has tentatively concluded that this regulatory action, which proposes amended energy conservation standards for dehumidifiers, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this proposed rule. L. Information Quality On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (‘‘OSTP’’), issued its Final Information Quality Bulletin for Peer Review (‘‘the Bulletin’’). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government’s scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are ‘‘influential scientific information,’’ which the Bulletin defines as ‘‘scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.’’ 70 FR 2664, 2667. In response to OMB’s Bulletin, DOE conducted formal peer reviews of the energy conservation standards development process and the analyses that are typically used and has prepared a report describing that peer review.76 Generation of this report involved a rigorous, formal, and documented evaluation using objective criteria and qualified and independent reviewers to make a judgment as to the technical/ scientific/business merit, the actual or anticipated results, and the productivity and management effectiveness of programs and/or projects. Because available data, models, and technological understanding have 76 The 2007 ‘‘Energy Conservation Standards Rulemaking Peer Review Report’’ is available at energy.gov/eere/buildings/downloads/energyconservation-standards-rulemaking-peer-reviewreport-0 (last accessed DATE). PO 00000 Frm 00062 Fmt 4701 Sfmt 4702 changed since 2007, DOE has engaged with the National Academy of Sciences to review DOE’s analytical methodologies to ascertain whether modifications are needed to improve DOE’s analyses. DOE is in the process of evaluating the resulting report.77 VII. Public Participation A. Participation in the Webinar The time and date the webinar meeting are listed in the DATES section at the beginning of this document. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE’s website: www1.eere.energy.gov/buildings/ appliance_standards/ standards.aspx?productid=24. Participants are responsible for ensuring their systems are compatible with the webinar software. B. Procedure for Submitting Prepared General Statements for Distribution Any person who has an interest in the topics addressed in this proposed rule, or who is representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation at the webinar. Such persons may submit to ApplianceStandardsQuestions@ ee.doe.gov. Persons who wish to speak should include with their request a computer file in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that briefly describes the nature of their interest in this proposed rulemaking and the topics they wish to discuss. Such persons should also provide a daytime telephone number where they can be reached. C. Conduct of the Webinar DOE will designate a DOE official to preside at the webinar/public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the webinar. There shall not be discussion of proprietary information, costs or prices, market 77 The report is available at www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards. E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules ddrumheller on DSK120RN23PROD with PROPOSALS3 share, or other commercial matters regulated by U.S. anti-trust laws. After the webinar and until the end of the comment period, interested parties may submit further comments on the proceedings and any aspect of the proposed rulemaking. The webinar will be conducted in an informal, conference style. DOE will a general overview of the topics addressed in this rulemaking, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this propose rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit, as time permits, other participants to comment briefly on any general statements. At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this propose rulemaking. The official conducting the webinar/public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the webinar. A transcript of the webinar will be included in the docket, which can be viewed as described in the Docket section at the beginning of this document. In addition, any person may buy a copy of the transcript from the transcribing reporter. D. Submission of Comments DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments, 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 VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 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 PO 00000 Frm 00063 Fmt 4701 Sfmt 4702 76571 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 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). E. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: (1) DOE requests comment on the effects of EPA and CARB regulations on refrigerant choices and on whether changes in refrigerant will affect manufacturer’s ability to achieve the efficiency levels in the NOPR analysis and the availability of high-efficiency R–32 compressors. (2) DOE requests comment regarding consumer’s dehumidifier usage patterns and whether consumers typically purchase multiple smaller dehumidifiers to meet dehumidification E:\FR\FM\06NOP3.SGM 06NOP3 76572 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules requirements as opposed to a single, higher capacity dehumidifier. (3) DOE requests comment on whether limiting needed chassis size increases are sufficient to preserve consumer utility at the max-tech level. (4) DOE requests comment on the incremental MPCs from the NOPR engineering analysis. (5) DOE seeks available data on installation costs for baseline and more efficient units. (6) DOE seeks comment on the assumption that dehumidifier consumers are most likely to replace a broken unit rather than repair it. DOE also seeks available data on the repair frequency. (7) DOE seeks data and comment on its efficiency distribution estimate and the assumption of an annual efficiency improvement of 0.25 percent and the expected market respond to updated ENERGY STAR 6.0 specifications. (8) DOE requests comment on its tentative conclusion that refrigerant desiccant dehumidifier manufacturers would be similarly impacted by potential amended standards and therefore would not warrant a separate subgroup analysis. (9) DOE requests comment on how to address the climate benefits and other effects of the proposal. (10) DOE seeks comments, information, and data on the capital conversion costs and product conversion costs estimated for each TSL. (11) DOE seeks comment on whether manufacturers expect manufacturing capacity constraints or engineering resource constraints would limit product availability to consumers in the timeframe of the amended standard compliance date (2028). (12) DOE requests information regarding the impact of cumulative regulatory burden on manufacturers of dehumidifiers associated with multiple DOE standards or product-specific regulatory actions of other Federal agencies. (13) DOE requests comments on the magnitude of costs associated with transitioning dehumidifier products and production facilities to accommodate low-GWP refrigerants that would be incurred between the publication of this NOPR and the proposed compliance date of amended standards. Quantification and categorization of these costs, such as engineering efforts, testing lab time, certification costs, and capital investments (e.g., new charging equipment), would enable DOE to refine its analysis. (14) DOE seeks comments, information, and data on the number of small businesses in the industry, the names of those small businesses, and their market shares by product class. DOE also requests comment on the potential impacts of the proposed standards on small manufacturers. (15) Additionally, DOE welcomes comments on other issues relevant to the conduct of this rulemaking that may not specifically be identified in this document. VIII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this notice of proposed rulemaking and announcement of public meeting. List of Subjects in 10 CFR Part 430 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Intergovernmental relations, Small businesses. Signing Authority This document of the Department of Energy was signed on October 27, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register. Signed in Washington, DC, on October 27, 2023. Treena V. Garrett, Federal Register Liaison Officer, U.S. Department of Energy For the reasons stated in the preamble, DOE is proposing to amend part 430 of Chapter II of Title 10, Code of Federal Regulations as set forth below: PART 430—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS 1. The authority citation for part 430 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 2461 note. 2. Amend § 430.32 by revising paragraph (v) to read as follows: ■ § 430.32 Energy and water conservation standards and their compliance dates. * * * * * (v) Dehumidifiers. (1) Dehumidifiers manufactured on or after June 13, 2019, and before [date 3 years after date of publication of the final rule], shall have an integrated energy factor that meets or exceeds the following values: Minimum integrated energy factor (liters/kWh) Portable dehumidifier product capacity (pints/day) ddrumheller on DSK120RN23PROD with PROPOSALS3 25.00 or less ........................................................................................................................................................................................ 25.01–50.00 ......................................................................................................................................................................................... 50.01 or more ...................................................................................................................................................................................... 1.30 1.60 2.80 Whole-home dehumidifier product case volume (cubic feet) 8.0 or less ............................................................................................................................................................................................ More than 8.0 ...................................................................................................................................................................................... (2) Dehumidifiers manufactured on or after [date 3 years after date of VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 publication of the final rule], shall have PO 00000 Frm 00064 Fmt 4701 Sfmt 4702 1.77 2.41 an integrated energy factor that meets or exceeds the following values: E:\FR\FM\06NOP3.SGM 06NOP3 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Proposed Rules 76573 Minimum integrated energy factor (liters/kWh) Portable dehumidifier product capacity (pints/day) 25.00 or less ........................................................................................................................................................................................ 25.01–50.00 ......................................................................................................................................................................................... 50.01 or more ...................................................................................................................................................................................... 1.70 2.01 3.10 Whole-home dehumidifier product case volume (cubic feet) 8.0 or less ............................................................................................................................................................................................ More than 8.0 ...................................................................................................................................................................................... * * * * * [FR Doc. 2023–24106 Filed 11–3–23; 8:45 am] ddrumheller on DSK120RN23PROD with PROPOSALS3 BILLING CODE 6450–01–P VerDate Sep<11>2014 20:36 Nov 03, 2023 Jkt 262001 PO 00000 Frm 00065 Fmt 4701 Sfmt 9990 E:\FR\FM\06NOP3.SGM 06NOP3 2.22 3.81

Agencies

DEPARTMENT OF ENERGY

[Federal Register Volume 88, Number 213 (Monday, November 6, 2023)]
[Proposed Rules]
[Pages 76510-76573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24106]



[[Page 76509]]

Vol. 88

Monday,

No. 213

November 6, 2023

Part IV





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Dehumidifiers; Proposed Rule

Federal Register / Vol. 88 , No. 213 / Monday, November 6, 2023 / 
Proposed Rules

[[Page 76510]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2019-BT-STD-0043]
RIN 1904-AE61


Energy Conservation Program: Energy Conservation Standards for 
Dehumidifiers

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

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including 
dehumidifiers. EPCA also requires the U.S. Department of Energy 
(``DOE'') to periodically determine whether more stringent standards 
would be technologically feasible and economically justified, and would 
result in significant energy savings. In this notice of proposed 
rulemaking (``NOPR''), DOE proposes amended energy conservation 
standards for dehumidifiers, and also announces a public meeting to 
receive comment on these proposed standards and associated analyses and 
results.

DATES: 
    Comments: DOE will accept comments, data, and information regarding 
this NOPR no later than January 5, 2024.
    Meeting: DOE will hold a public meeting via webinar on Thursday, 
December 14, 2023, from 1:00 p.m. to 4:00 p.m. See section VII of this 
document, ``Public Participation,'' for webinar registration 
information, participant instructions, and information about the 
capabilities available to webinar participants.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the U.S. Department of Justice (``DOJ'') 
contact listed in the ADDRESSES section on or before December 6, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov under docket 
number EERE-2019-BT-STD-0043. Follow the instructions for submitting 
comments. Alternatively, interested persons may submit comments, 
identified by docket number EERE-2019-BT-STD-0043, by any of the 
following methods:
    Email: [email protected]. Include docket number 
EERE-2019-BT-STD-0043 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, 1000 
Independence Avenue SW, Washington, DC 20585-0121. 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.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. All documents in the 
docket are listed in the www.regulations.gov index. However, not all 
documents listed in the index may be publicly available, such as 
information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2019-BT-STD-0043. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII of this document for information on how to submit comments 
through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Division at [email protected] on or 
before the date specified in the DATES section. Please indicate in the 
subject line of your email the title and docket number of this proposed 
rulemaking.

FOR FURTHER INFORMATION CONTACT: 
    Dr. Carl Shapiro, 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. Email: 
[email protected].
    Mr. Peter Cochran, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-9496. Email: [email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact the Appliance and Equipment Standards Program staff at (202) 
287-1445 or by email: [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Dehumidifiers
III. General Discussion
    A. Scope of Coverage
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared to Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Product Classes
    2. Technology Options
    a. Improved Compressor Efficiency
    b. Washable Air Filters
    c. Air-to-Air Heat Exchangers
    d. Alternative Refrigerants
    e. Low-Standby-Loss Electronic Controls
    f. Multi-Circuited Evaporator and Secondary Condenser Coils
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis

[[Page 76511]]

    a. Baseline Efficiency
    b. Higher Efficiency Levels
    2. Cost Analysis
    3. Cost-Efficiency Results
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Product Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Capital and Product Conversion Costs
    d. Manufacturer Markup Scenarios
    3. Manufacturer Interviews
    a. Increases in Chassis Size
    b. Refrigerant Regulation
    4. Discussion of MIA Comments
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Dehumidifier 
Standards
    2. Annualized Benefits and Costs of the Proposed Standards
    D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description on Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, Part B of EPCA \2\ established the Energy 
Conservation Program for Consumer Products Other Than Automobiles. (42 
U.S.C. 6291-6309) These products include dehumidifiers, the subject of 
this proposed rulemaking.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    Pursuant to 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)) EPCA also provides that not later 
than 6 years after issuance of any final rule establishing or amending 
a standard, DOE must publish either a notice of determination that 
standards for the product do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m))
    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of four trial 
standard levels (``TSLs'') for dehumidifiers. The TSLs and their 
associated benefits and burdens are discussed in detail in sections V.A 
through V.C of this document. As discussed in section V.C of this 
document, DOE has tentatively determined that TSL 3 represents the 
maximum improvement in energy efficiency that is technologically 
feasible and economically justified. The proposed standards, which are 
expressed in Integrated Energy Factor (``IEF''), or the volume of water 
in liters (``L'') removed by a kilowatt hour (``kWh'') of energy, are 
shown in Table I.1. These proposed standards, if adopted, would apply 
to all dehumidifiers listed in Table I.1. manufactured in, or imported 
into, the United States starting on the date 3 years after the 
publication of the final rule for this proposed rulemaking.

[[Page 76512]]



   Table I.1--Proposed Energy Conservation Standards for Dehumidifiers
------------------------------------------------------------------------
                                                             Minimum
                                                            integrated
   Portable dehumidifier product capacity (pints/day)     energy factor
                                                             (L/kWh)
------------------------------------------------------------------------
25.00 or less..........................................             1.70
25.01-50.00............................................             2.01
50.01 or more..........................................             3.10
Whole-home dehumidifier product case volume (cubic
 feet):
    8.0 or less........................................             2.22
    More than 8.0......................................             3.81
------------------------------------------------------------------------

A. Benefits and Costs to Consumers

    Table I.2 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of dehumidifiers, as measured by the 
average life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\3\ The average LCC savings are positive for all product 
classes, and the PBP is less than the average lifetime of 
dehumidifiers, which is estimated to be 10 years for portable 
dehumidifiers and 12 years for whole-home dehumidifiers (see section 
IV.F.6 of this document).
---------------------------------------------------------------------------

    \3\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.C of this document).

     Table I.2--Impacts of Proposed Energy Conservation Standards on
                       Consumers of Dehumidifiers
------------------------------------------------------------------------
                                         Average LCC     Simple payback
            Product class              savings (2022$)   period (years)
------------------------------------------------------------------------
Portable dehumidifiers, <=25.00 pints/             $42               0.9
 day.................................
Portable dehumidifiers, 25.01-50.00                 81               0.6
 pints/day...........................
Portable dehumidifiers, >50.00 pints                31               4.8
 per day.............................
Whole-home dehumidifiers, <=8.0 cubic               56               6.4
 feet case volume....................
Whole-home dehumidifiers, >8.0 cubic               146               5.7
 feet case volume....................
------------------------------------------------------------------------

    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this document.

B. Impact on Manufacturers ⁴
---------------------------------------------------------------------------

    \4\ All monetary values in this document are expressed in 2022 
dollars.
---------------------------------------------------------------------------

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2023-2057). Using a real discount rate of 8.4 percent, 
DOE estimates that the INPV for manufacturers of dehumidifiers in the 
case without amended standards is $158.3 million. Under the proposed 
standards, the change in INPV is estimated to range from -3.3 percent 
to -2.1 percent, which is approximately -$5.2 million to -$3.3 million. 
In order to bring products into compliance with amended standards, it 
is estimated that the industry would incur total conversion costs of 
$6.9 million.
    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs

    DOE's analyses indicate that the proposed energy conservation 
standards for dehumidifiers would save a significant amount of energy. 
Relative to the case without amended standards, the lifetime energy 
savings for dehumidifiers purchased in the 30-year period that begins 
in the anticipated year of compliance with the amended standards (2028-
2057) amount to 0.33 quadrillion British thermal units (``Btu''), or 
quads.\5\ This represents a savings of 5.8 percent relative to the 
energy use of these products in the case without amended standards 
(referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------

    \5\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for dehumidifiers ranges from $1.26 
billion (at a 7-percent discount rate) to $2.61 billion (at a 3-percent 
discount rate). This NPV expresses the estimated total value of future 
operating cost savings minus the estimated increased product costs for 
dehumidifiers purchased from 2028 through 2057.
    In addition, the proposed standards for dehumidifiers are projected 
to yield significant environmental benefits. DOE estimates that the 
proposed standards would result in cumulative emission reductions (over 
the same period as for energy savings) of 6.94 million metric tons 
(``Mt'') \6\ of carbon dioxide (``CO2''), 1.76 thousand tons 
of sulfur dioxide (``SO2''), 11.81 thousand tons of nitrogen 
oxides (``NOX''), 51.94 thousand tons of methane 
(``CH4''), 0.06 thousand tons of nitrous oxide 
(``N2O''), and 0.01 tons of mercury (``Hg'').\7\
---------------------------------------------------------------------------

    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the Inflation Reduction Act. See section IV.K of this 
document for further discussion of AEO2023 assumptions that affect 
air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost (``SC'') of

[[Page 76513]]

CO2 (``SC-CO2''), the social cost of methane 
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG 
(``SC-GHG''). DOE used interim SC-GHG values (in terms of benefit per 
ton of GHG avoided) developed by the Interagency Working Group on the 
Social Cost of Greenhouse Gases (``IWG'').\8\ The derivation of these 
values is discussed in section IV.L of this document. For 
presentational purposes, the climate benefits associated with the 
average SC-GHG at a 3-percent discount rate are estimated to be $0.40 
billion. DOE does not have a single central SC-GHG point estimate and 
emphasizes the importance and value of considering the benefits 
calculated using all four sets of SC-GHG estimates.
---------------------------------------------------------------------------

    \8\ To monetize the benefits of reducing GHG emissions this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990 published in February 
2021 by the IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions using benefit per ton estimates 
from the Environmental Protection Agency,\9\ as discussed in section 
IV.L of this document. DOE estimated the present value of the health 
benefits would be $0.33 billion using a 7-percent discount rate, and 
$0.74 billion using a 3-percent discount rate.\10\ DOE is currently 
only monetizing health benefits from changes in ambient fine 
particulate matter (PM2.5) concentrations from two 
precursors (SO2 and NOX), and from changes in 
ambient ozone from one precursor (for NOX), but will 
continue to assess the ability to monetize other effects such as health 
benefits from reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------

    \9\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \10\ DOE estimates the economic value of these emissions 
reductions resulting from the considered trial standard levels 
(``TSLs'') for the purpose of complying with the requirements of 
Executive Order 12866.
---------------------------------------------------------------------------

    Table I.3 summarizes the monetized economic benefits and costs 
expected to result from the proposed standards for dehumidifiers. There 
are other important unquantified effects, including certain 
unquantified climate benefits, unquantified public health benefits from 
the reduction of toxic air pollutants and other emissions, unquantified 
energy security benefits, and distributional effects, among others.

  Table I.3--Summary of Monetized Benefits and Costs of Proposed Energy
                Conservation Standards for Dehumidifiers
                   [Trial Standard Level (``TSL'') 3]
------------------------------------------------------------------------
                                                         Billion ($2022)
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................             2.75
Climate Benefits *.....................................             0.40
Health Benefits **.....................................             0.74
Total Benefits [dagger]................................             3.89
Consumer Incremental Product Costs [Dagger]............             0.14
Net Benefits...........................................             3.75
Change in Producer Cashflow (INPV) [Dagger][Dagger]....  (0.005)-(0.003)
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................             1.34
Climate Benefits * (3% discount rate)..................             0.40
Health Benefits **.....................................             0.33
Total Benefits [dagger]................................             2.07
Consumer Incremental Product Costs [Dagger]............             0.08
Net Benefits...........................................             1.99
Change in Producer Cashflow (INPV) [Dagger][Dagger]....  (0.005)-(0.003)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with
  dehumidifiers shipped in 2028-2057. These results include consumer,
  climate, and health benefits that accrue after 2057 from the products
  shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the
  social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
  (SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent
  discount rates; 95th percentile at a 3-percent discount rate) (see
  section IV.L of this document). Together these represent the global SC-
  GHG. For presentational purposes of this table, the climate benefits
  associated with the average SC-GHG at a 3-percent discount rate are
  shown, but DOE does not have a single central SC-GHG point estimate.
  To monetize the benefits of reducing GHG emissions this analysis uses
  the interim estimates presented in the Technical Support Document:
  Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
  Under Executive Order 13990 published in February 2021 by the
  Interagency Working Group on the Social Cost of Greenhouse Gases
  (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits but will continue to assess the ability to monetize other
  effects such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with 3-percent discount
  rate, but DOE does not have a single central SC-GHG point estimate and
  emphasizes the importance and value of considering the benefits
  calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
  installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
  cycle costs analysis and national impact analysis as discussed in
  detail below. See sections IV.F and IV.H of this document. DOE's
  national impacts analysis includes all impacts (both costs and
  benefits) along the distribution chain beginning with the increased
  costs to the manufacturer to manufacture the product and ending with
  the increase in price experienced by the consumer. DOE also separately
  conducts a detailed analysis on the impacts on manufacturers (i.e.,
  manufacturer impact analysis, or ``MIA''). See section IV.J of this
  document. In the detailed MIA, DOE models manufacturers' pricing
  decisions based on assumptions regarding investments, conversion
  costs, cashflow, and margins. The MIA produces a range of impacts,
  which is the rule's expected impact on the INPV. The change in INPV is
  the present value of all changes in industry cash flow, including
  changes in production costs, capital expenditures, and manufacturer
  profit margins. Change in INPV is calculated using the industry
  weighted average cost of capital value of 8.4 percent that is
  estimated in the manufacturer impact analysis (see chapter 12 of the
  NOPR TSD for a complete description of the industry weighted average
  cost of capital). For dehumidifiers, the change in INPV ranges from -
  $5 million to -$3 million. DOE accounts for that range of likely
  impacts in analyzing whether a trial standard level is economically
  justified. See section V.C of this document. DOE is presenting the
  range of impacts to the INPV under two markup scenarios: the
  Preservation of Gross Margin scenario, which is the manufacturer
  markup scenario used in the calculation of Consumer Operating Cost
  Savings in this table; and the Preservation of Operating Profit Markup
  scenario, where DOE assumed manufacturers would not be able to
  increase per-unit operating profit in proportion to increases in
  manufacturer production costs. DOE includes the range of estimated
  INPV in the above table, drawing on the MIA explained further in
  section IV.J of this document to provide additional context for
  assessing the estimated impacts of this proposal to society, including
  potential changes in production and consumption, which is consistent
  with OMB's Circular A-4 and E.O. 12866. If DOE were to include the
  INPV into the net benefit calculation for this proposed rule, the net
  benefits would range from $3.74 billion to $3.75 billion at 3-percent
  discount rate and would range from $1.98 billion to $1.99 billion at 7-
  percent discount rate. DOE seeks comment on this approach.


[[Page 76514]]

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\11\
---------------------------------------------------------------------------

    \11\ To convert the time series of costs and benefits into 
annualized values, DOE calculated a present value in 2023, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2023. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of dehumidifiers 
shipped between 2028 and 2057. The benefits associated with reduced 
emissions achieved as a result of the proposed standards are also 
calculated based on the lifetime of dehumidifiers shipped between 2028 
and 2057. Total benefits for both the 3-percent and 7-percent cases are 
presented using the average GHG social costs with a 3-percent discount 
rate. Estimates of SC-GHG values are presented for all four discount 
rates in section V.B.6 of this document.
    Table I.4 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $8.55 million per year in increased equipment 
costs, while the estimated annual benefits are $142.04 million in 
reduced equipment operating costs, $22.85 million in climate benefits, 
and $34.54 million in health benefits. In this case, the net benefit 
would amount to $190.89 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $7.89 million per year in 
increased equipment costs, while the estimated annual benefits are 
$157.99 million in reduced operating costs, $22.85 million in climate 
benefits, and $42.30 million in health benefits. In this case, the net 
benefit would amount to $215.24 million per year.

      Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Dehumidifiers
                                                     [TSL 3]
----------------------------------------------------------------------------------------------------------------
                                                                            Million 2022$/year
                                                         -------------------------------------------------------
                                                              Primary      Low-net-benefits    High-net-benefits
                                                             estimate          estimate            estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................          157.99              153.04              163.15
Climate Benefits *......................................           22.85               22.66               22.93
Health Benefits **......................................           42.30               41.95               42.42
Total Benefits [dagger].................................          223.14              217.65              228.50
Consumer Incremental Product Costs [Dagger].............            7.89                7.94                7.77
Net Benefits............................................          215.24              209.71              220.74
Change in Producer Cashflow.............................     (0.5)-(0.3)         (0.5)-(0.3)         (0.5)-(0.3)
(INPV) [Dagger][Dagger].................................
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................          142.04              138.10              146.50
Climate Benefits * (3% discount rate)...................           22.85               22.66               22.93
Health Benefits **......................................           34.54               34.31               34.64
Total Benefits [dagger].................................          199.44              195.07              204.06
Consumer Incremental Product Costs [Dagger].............            8.55                8.58                8.44
Net Benefits............................................          190.89              186.49              195.62
Change in Producer Cashflow (INPV) [Dagger][Dagger].....     (0.5)-(0.3)         (0.5)-(0.3)         (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
  results include consumer, climate, and health benefits that accrue after 2057 from the products shipped in
  2028-2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices
  from the AEO 2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In
  addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline
  rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods
  used to derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that
  the Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate and
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the
  Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger][Dagger] Costs include incremental equipment costs as well as installation costs.

[[Page 76515]]

 
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
  impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
  the increased costs to the manufacturer to manufacture the product and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
  (i.e., manufacturer impact analysis, or ``MIA''). See section IV.J of this document. In the detailed MIA, DOE
  models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs,
  cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the INPV.
  The change in INPV is the present value of all changes in industry cash flow, including changes in production
  costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated
  using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer
  impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average
  cost of capital). For dehumidifiers, the annualized change in INPV ranges from -$0.5 million to -$0.3 million.
  DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically
  justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
  markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
  the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit
  Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
  proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
  change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to
  provide additional context for assessing the estimated impacts of this proposal to society, including
  potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866.
  If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the
  annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would
  range from $190.4 million to $190.6 million at 7-percent discount rate. DOE seeks comment on this approach.

DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K, and IV.L of this document.

D. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regards to 
technological feasibility, products achieving these standard levels are 
already commercially available for all product classes covered by this 
proposal. As for economic justification, DOE's analysis shows that the 
benefits of the proposed standard exceed, to a great extent, the 
burdens of the proposed standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for dehumidifiers is $8.55 million per year in 
increased product costs, while the estimated annual benefits are 
$142.04 million in reduced product operating costs, $22.85 million in 
climate benefits, and $34.54 million in health benefits. The net 
benefit amounts to $190.89 million per year.
    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.\12\ For 
example, some covered products and equipment have substantial energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \12\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the standards are projected to result in 
estimated national energy savings of 0.33 quad full-fuel-cycle 
(``FFC''), the equivalent of the primary annual energy use of 3.5 
million homes. In addition, they are projected to reduce CO2 
emissions by 6.94 Mt, SO2 emissions by 1.76 thousand tons, 
NOX emissions by 11.81 thousand tons, CH4 
emissions by 51.94 thousand tons, N2O emissions by 0.06 
thousand tons, Hg emissions by 0.01 tons. Based on these findings, DOE 
has initially determined the energy savings from the proposed standard 
levels are ``significant'' within the meaning of 42 U.S.C. 
6295(o)(3)(B). The basis for these tentative conclusions is detailed in 
the remainder of this document and the accompanying technical support 
document (``TSD'').
    DOE also considered more stringent energy efficiency levels as 
potential standards and is still considering them in this rulemaking. 
However, DOE has tentatively concluded that the potential burdens of 
more stringent energy efficiency levels would outweigh the projected 
benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this document that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed rule as well as some of the relevant 
historical background related to the establishment of standards for 
dehumidifiers.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include dehumidifiers, 
the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed 
initial energy conservation standards for these products. Id. EPCA 
further provides that, not later than 6 years after the issuance of any 
final rule establishing or amending a standard, DOE must publish either 
a notice of determination that standards for the product do not need to 
be amended, or a NOPR including new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6295(m)(1))
    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA specifically include 
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), 
labeling provisions (42 U.S.C. 6294), energy conservation standards (42 
U.S.C. 6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption for particular State laws or regulations, in accordance with 
the procedures and other provisions set forth under EPCA. (42 U.S.C. 
6297(d))

[[Page 76516]]

    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered product. (42 U.S.C. 
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products 
must use the prescribed DOE test procedure as the basis for certifying 
to DOE that their products comply with the applicable energy 
conservation standards adopted under EPCA and when making 
representations to the public regarding the energy use or efficiency of 
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, 
DOE must use these test procedures to determine whether the products 
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The 
DOE test procedures for dehumidifiers appear at title 10 of the Code of 
Federal Regulations (``CFR'') part 430, subpart B, appendix X1.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including dehumidifiers. Any 
new or amended standard for a covered product must be designed to 
achieve the maximum improvement in energy efficiency that the Secretary 
of Energy determines is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A) Furthermore, DOE may not adopt any 
standard that would not result in the significant conservation of 
energy. (42 U.S.C. 6295(o)(3))
    Moreover, DOE may not prescribe a standard: (1) for certain 
products, including dehumidifiers, if no test procedure has been 
established for the product, or (2) if DOE determines by rule that the 
standard is not technologically feasible or economically justified. (42 
U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make 
this determination after receiving comments on the proposed standard, 
and by considering, to the greatest extent practicable, the following 
seven statutory factors:
    (1) The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    (2) The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the standard;
    (3) The total projected amount of energy (or as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
products likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    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 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)) DOE's current test procedures for dehumidifiers 
address standby mode and off mode energy use. In this proposed 
rulemaking, DOE intends to incorporate such energy use into any amended 
energy conservation standards that it may adopt.

B. Background

1. Current Standards
    In a final rule published on June 13, 2016 (``June 2016 Final 
Rule''), DOE prescribed the current energy conservation standards for 
dehumidifiers manufactured on and after June 13, 2019. 81 FR 38338. 
These standards are set forth in DOE's regulations at 10 CFR 
430.32(v)(2).

   Table II.1--Federal Energy Conservation Standards for Dehumidifiers
------------------------------------------------------------------------
                                                             Minimum
                                                            integrated
   Portable dehumidifier product capacity (pints/day)     energy factor
                                                             (L/kWh)
------------------------------------------------------------------------
25.00 or less..........................................             1.30

[[Page 76517]]

 
25.01-50.00............................................             1.60
50.01 or more..........................................             2.80
------------------------------------------------------------------------
Whole-home dehumidifier product case volume              ...............
(cubic feet)
------------------------------------------------------------------------
8.0 or less............................................             1.77
More than 8.0..........................................             2.41
------------------------------------------------------------------------

2. History of Standards Rulemaking for Dehumidifiers
    On June 4, 2021, DOE published a Request for Information (``June 
2021 RFI'') in the Federal Register to collect data and information to 
inform its decision, consistent with its obligations under EPCA, as to 
whether the Department should proceed with an energy conservation 
standards rulemaking for an amended energy conservation standard for 
dehumidifiers. 86 FR 29964, 29965.
    DOE published a notice of public meeting and availability of the 
preliminary TSD on June 22, 2022 (``June 2022 Preliminary Analysis''). 
87 FR 37240. DOE received comments in response to the June 2022 
Preliminary Analysis from the interested parties listed in Table II.2.

                           Table II.2--June 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
                                                                 Comment
           Commenter(s)                   Abbreviation          number in              Commenter type
                                                                the docket
----------------------------------------------------------------------------------------------------------------
Appliance Standards Awareness      Joint Commenters..........           21  Efficiency Organizations.
 Project, American Council for an
 Energy-Efficient Economy,
 National Consumer Law Center,
 Natural Resources Defense
 Council, Northwest Energy
 Efficiency Alliance.
Association of Home Appliance      AHAM......................           22  Trade Association.
 Manufacturers.
Madison Indoor Air Quality.......  MIAQ......................           20  Manufacturer.
----------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\13\ 
To the extent that interested parties have provided written comments 
that are substantively consistent with any oral comments provided 
during the July 19, 2022, public meeting, DOE cites the written 
comments throughout this document. Any oral comments provided during 
the webinar that are not substantively addressed by written comments 
are summarized and cited separately throughout this document.
---------------------------------------------------------------------------

    \13\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for dehumidifiers (Docket No. EERE-
2019-BT-STD-0043, which is maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
---------------------------------------------------------------------------

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 stages for an energy 
conservation standards rulemaking. Section 6(a)(2) of appendix A states 
that if the Department determines it is appropriate to proceed with a 
rulemaking, the preliminary stages of a rulemaking to issue or amend an 
energy conservation standard that DOE will undertake will include a 
framework document and preliminary analysis, or an advance notice of 
proposed rulemaking. While DOE published a preliminary analysis for 
this proposed rulemaking, DOE did not publish a framework document in 
conjunction with the preliminary analysis. 87 FR 37240. DOE notes, 
however, chapter 2 of the June 2022 Preliminary TSD that accompanied 
the June 2022 Preliminary Analysis--entitled Analytical Framework, 
Comments from Interested Parties, and DOE Responses--describes the 
general analytical framework that DOE uses in evaluating and developing 
potential amended energy conservation standards. DOE also previously 
published the June 2021 RFI, in which DOE identified and sought comment 
on the analyses that would be conducted in support of an energy 
conservation standards rulemaking for dehumidifiers. 86 FR 29964, 
29965-29966. As such, publication of a separate framework document 
would be largely redundant of previously published documents.
    Section 6(f)(2) of appendix A specifies that the length of the 
public comment period for a NOPR will vary depending upon the 
circumstances of the particular proposed rulemaking, but will not be 
less than 75 calendar days. For this NOPR, DOE has opted to instead 
provide a 60-day comment period. DOE requested comment in the June 2021 
RFI on the technical and economic analyses and provided stakeholders a 
45-day comment period, after granting a 15-day comment period 
extension. 86 FR 29964 and 86 FR 34639. Additionally, DOE provided a 
60-day comment period for the June 2022 Preliminary Analysis. 87 FR 
37240, 37241. The analytical methods used for this NOPR are similar to 
those used in previous rulemaking documents. As such, DOE believes a 
60-day comment period is appropriate and will provide interested 
parties with a meaningful opportunity to comment on the proposed rule. 
Section 8(d)(1) of appendix A specifies that test procedure rulemakings 
establishing methodologies used to evaluate proposed energy 
conservation standards will be finalized prior to publication of a NOPR 
proposing new or amended energy conservation standards. Additionally, 
new test procedures and amended test procedures that impact measured 
energy use or efficiency will be finalized at least 180 days prior to 
the close of the

[[Page 76518]]

comment period for (1) a NOPR proposing new or amended energy 
conservation standards or (2) a notice of proposed determination that 
standards do not need to be amended. In the dehumidifier test procedure 
final rule published on July 26, 2023, (July 2023 Test Procedure Final 
Rule), DOE amended the test procedures for dehumidifiers. 88 FR 48035. 
DOE determined that the amendments adopted will not alter (i.e., will 
not impact) the measured efficiency of dehumidifiers. Id. As such, the 
requirement that the amended test procedure be finalized at least 180 
days prior to the close of the comment period for this NOPR does not 
apply.

III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. Scope of Coverage

    This NOPR covers those consumer products that meet the definition 
of ``dehumidifier'' as codified at 10 CFR 430.2.
    EPCA defines a dehumidifier as a product that is a self-contained, 
electrically operated, and mechanically encased assembly, consisting of 
a refrigerated surface (evaporator) that condenses moisture from the 
atmosphere, a refrigerating system with an electric motor, an air-
circulating fan, and a means for collecting or disposing of the 
condensate. (42 U.S.C. 6291(34)) In a final rule published on July 31, 
2015 (``July 2015 Test Procedure Final Rule''), DOE clarified that this 
definition of a dehumidifier, codified at 10 CFR 430.2, does not apply 
to portable air conditioners, room air conditioners, or packaged 
terminal air conditioners. 80 FR 45802, 45804-45805 (July 31, 2015). 
DOE also added definitions for portable dehumidifiers and whole-home 
dehumidifiers to 10 CFR 430.2. Portable dehumidifiers are designed to 
operate within the dehumidified space without ducting attached, 
although ducting may be attached optionally. Whole-home dehumidifiers 
are designed to be installed with inlet ducting for return process air 
and outlet ducting that supplies dehumidified process air to one or 
more locations in the dehumidified space. 10 CFR 430.2 DOE further 
established that dehumidifiers that are able to operate as both a 
portable and whole-home dehumidifier would be tested and rated for both 
configurations. 80 FR 45802, 45805-45806. See section IV.A.1 of this 
document for discussion of the product classes analyzed in this NOPR.

B. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) 
Manufacturers of covered products must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product. DOE's 
current energy conservation standards for dehumidifiers are expressed 
in terms of IEF in L/kWh. 10 CFR 430.32(v)(2) and 10 CFR part 430, 
subpart B, appendix X1.

C. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
proposed rulemaking. As the first step in such an analysis, DOE 
develops a list of technology options for consideration in consultation 
with manufacturers, design engineers, and other interested parties. DOE 
then determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially available products or in working prototypes to be 
technologically feasible. See sections 6(b)(3)(i) and 7(b)(1) of 
appendix A to 10 CFR part 430 subpart C (``appendix A'').
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety; and (4) unique pathway proprietary technologies. See 
sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.B of 
this document discusses the results of the screening analysis for 
dehumidifiers, particularly the designs DOE considered, those it 
screened out, and those that are the basis for the standards considered 
in this proposed rulemaking. For further details on the screening 
analysis for this proposed rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a new or amended standard for a type or 
class of covered product, it must determine the maximum improvement in 
energy efficiency or maximum reduction in energy use that is 
technologically feasible for such product. (42 U.S.C. 6295(p)(1)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for dehumidifiers, using the design parameters for the most 
efficient products available on the market or in working prototypes. 
The max-tech levels that DOE determined for this proposed rulemaking 
are described in section IV.C.1.b of this document and in chapter 5 of 
the NOPR TSD.

D. Energy Savings

1. Determination of Savings
    For each trial standard level (``TSL''), DOE projected energy 
savings from application of the TSL to dehumidifiers purchased in the 
30-year period that begins in the year of compliance with the proposed 
standards (2028-2057).\14\ The savings are measured over the entire 
lifetime of dehumidifiers purchased in the previous 30-year period. DOE 
quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for a 
product would likely evolve in the absence of amended energy 
conservation standards.
---------------------------------------------------------------------------

    \14\ Each TSL is composed of specific efficiency levels for each 
product class. The TSLs considered for this NOPR are described in 
section V.A of this document. DOE conducted a sensitivity analysis 
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential amended or 
new standards for dehumidifiers. The NIA spreadsheet model (described 
in section IV.H of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of primary energy savings, which is the savings 
in the energy that is used to generate and transmit the site 
electricity. DOE also calculates NES in terms of FFC energy savings. 
The FFC metric includes the energy consumed in extracting, processing, 
and transporting primary

[[Page 76519]]

fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a 
more complete picture of the impacts of energy conservation 
standards.\15\ DOE's approach is based on the calculation of an FFC 
multiplier for each of the energy types used by covered products or 
equipment. For more information on FFC energy savings, see section 
IV.H.1 of this document.
---------------------------------------------------------------------------

    \15\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for a covered product, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\16\ 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 with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis, taking into 
account the significance of cumulative FFC national energy savings, the 
cumulative FFC emissions reductions, and the need to confront the 
global climate crisis, among other factors.
---------------------------------------------------------------------------

    \16\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As stated, the standard levels proposed in this document are 
projected to result in national energy savings of 0.33 quad, the 
equivalent of the primary annual energy use of 3.5 million homes. Based 
on the amount of FFC savings, the corresponding reduction in emissions, 
and the need to confront the global climate crisis, DOE has initially 
determined the energy savings from the proposed standard levels are 
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).

E. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The 
following sections discuss how DOE has addressed each of those seven 
factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential new or amended standard 
on manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash-flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows, (2) 
cash flows by year, (3) changes in revenue and income, and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value of 
the consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered products in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section III.D of this document, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing product classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards proposed in this document would not 
reduce the utility or performance of the products under consideration 
in this proposed rulemaking.

[[Page 76520]]

e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a proposed standard and to transmit such determination to the 
Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed 
rule to the Attorney General with a request that the DOJ provide its 
determination on this issue. DOE will publish and respond to the 
Attorney General's determination in the final rule. DOE invites comment 
from the public regarding the competitive impacts that are likely to 
result from this proposed rule. In addition, stakeholders may also 
provide comments separately to DOJ regarding these potential impacts. 
See the ADDRESSES section for information to send comments to DOJ.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy 
savings from the proposed standards are likely to provide improvements 
to the security and reliability of the Nation's energy system. 
Reductions in the demand for electricity also may result in reduced 
costs for maintaining the reliability of the Nation's electricity 
system. DOE conducts a utility impact analysis to estimate how 
standards may affect the Nation's needed power generation capacity, as 
discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The proposed standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and GHGs associated with energy production and use. DOE 
conducts an emissions analysis to estimate how potential standards may 
affect these emissions, as discussed in section IV.K of this document; 
the estimated emissions impacts are reported in section V.B.6 of this 
document. DOE also estimates the economic value of emissions reductions 
resulting from the considered TSLs, as discussed in section IV.L of 
this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To 
the extent DOE identifies any relevant information regarding economic 
justification that does not fit into the other categories described 
previously, DOE could consider such information under ``other 
factors.''
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effects that proposed 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the Nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.F.9 of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
proposed rulemaking with regard to dehumidifiers. Separate subsections 
address each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipment projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this proposed rulemaking: 
www.regulations.gov/docket/EERE-2019-BT-STD-0043. Additionally, DOE 
used output from the latest version of the Energy Information 
Administration's (``EIA's'') Annual Energy Outlook (``AEO''), a widely 
known energy projection for the United States, for the emissions and 
utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this proposed rulemaking include (1) a determination of 
the scope of the rulemaking and product classes, (2) manufacturers and 
industry structure, (3) existing efficiency programs, (4) shipments 
information, (5) market and industry trends; and (6) technologies or 
design options that could improve the energy efficiency of 
dehumidifiers. The key findings of DOE's market assessment are 
summarized in the following sections. See chapter 3 of the NOPR TSD for 
further discussion of the market and technology assessment.
1. Product Classes
    When evaluating and establishing energy conservation standards, 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

[[Page 76521]]

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 currently defines separate energy conservation standards using 
five dehumidifier product classes (10 CFR 430.32(v)(2)):
    Portable dehumidifiers have three product classes based on the 
product capacity: Product Class 1 are those with a capacity of 25.00 
pints/day or less, Product Class 2 dehumidifiers have a capacity of 
25.01 to 50.00 pints/day, and Product Class 3 dehumidifiers have a 
capacity of 50.01 pints/day or more. Whole-home dehumidifiers have two 
product classes based on product case volume: Product Class 4 
dehumidifiers have a case volume of 8.0 cubic feet or less, and Product 
Class 5 have a case volume of more than 8.0 cubic feet.
    According to MIAQ, many of the units that are meant to be placed in 
the crawlspace of a home meet the portable dehumidifier definition due 
to their installation and configuration but have the same manufacturer 
production cost (``MPC'') as whole-home dehumidifiers. MIAQ stated that 
DOE did not clearly distinguish the difference between typical portable 
dehumidifiers and portable crawlspace dehumidifiers in the June 2022 
Preliminary Analysis and requested that DOE keep this difference in 
mind when updating the TSD. (MIAQ, No. 20 at pp. 1-2)
    Dehumidifiers are classified based on their ducting configuration 
during consumer use, according to the definitions established in 10 CFR 
430.2. Portable dehumidifiers operate in applications that require 
space dehumidification without ducting. Whole-home dehumidifiers 
operate with ducting, typically in conjunction with a heating, 
ventilating, and air conditioning (``HVAC'') system. Dehumidifiers 
installed in basement crawlspaces without ducting are classified as 
portable dehumidifiers. DOE is not aware of any specific performance-
related feature that would justify a new product class for portable 
dehumidifiers installed in basement crawlspaces. Therefore, when 
conducting the engineering analysis, as discussed further in section 
IV.C of this document and chapter 5 of the NOPR TSD, DOE considered the 
MPCs of a variety of units in the largest portable dehumidifier product 
class, Product Class 3.
2. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified 16 technology options that would be expected to improve the 
efficiency of dehumidifiers, as measured by the DOE test procedure.

            Table IV.2--Technology Options for Dehumidifiers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Microchannel heat exchangers.
2. Built-in hygrometer/humidistat.
3. Improved compressor efficiency.
4. Improved condenser and evaporator performance.
5. Improved controls.
6. Improved defrost methods.
7. Improved demand-defrost controls.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.
10. Low-standby-loss electronic controls.
11. Washable air filters.
12. Pre-cooling air-to-air heat exchangers.
13. Heat pipes.
14. Improved refrigeration system insulation.
15. Refrigerant-desiccant systems.
16. Alternative refrigerants.
------------------------------------------------------------------------

    Several commenters provided feedback on some of these technology 
options. These comments are summarized below, along with DOE's 
responses.
a. Improved Compressor Efficiency
    MIAQ stated that finding suitable high-efficiency compressors at 
the capacities and price points needed for dehumidifiers is a 
challenge, particularly with the transition to new refrigerants. 
According to MIAQ, the whole-home and crawlspace dehumidifier industry 
does not have sufficient volume to garner the full attention of 
compressor manufacturers. (MIAQ, No. 20 at p. 2)
    DOE has considered MIAQ's comments regarding high-efficiency 
compressor availability, and for the reasons discussed in chapter 3 of 
the NOPR TSD, expects that by the time that compliance is required with 
any new dehumidifier standards, dehumidifier manufacturers will 
transition to compressors utilizing R-32 in place of compressors 
designed for the refrigerants currently in use. DOE acknowledges that 
there is significant uncertainty regarding the availability of the 
highest-efficiency single-speed compressors designed for operation with 
R-32 refrigerant that were analyzed for the June 2022 Preliminary 
Analysis, particularly in the smallest capacities. For this NOPR 
analysis, DOE has limited the improved compressor efficiency technology 
option to the maximum R-32 compressor efficiency that was observed 
within its teardown sample of dehumidifiers, to ensure that such 
compressors are already commercially available to the dehumidifier 
industry. Furthermore, should this NOPR proceed to a final rule, 
compliance with any amended standards would not be required until 3 
years after a final rule is published. DOE expects that this 3-year 
compliance period would provide adequate time for dehumidifier original 
equipment manufacturers (``OEMs'') to source a sufficient supply of 
more efficient R-32 compressors ahead of anticipated demand. DOE 
expects that standards, if adopted, would therefore provide sufficient 
time and regulatory certainty for manufacturers and compressor 
suppliers to establish additional capacity in the supply chain, if 
needed.
    MIAQ reiterated its comment on the June 2022 Dehumidifier Test 
Procedure NOPR \17\ that variable-speed compressors do not provide 
sufficient energy savings to justify the significant increase in cost 
required to implement this technology, especially in the consumer 
product market. (MIAQ, No. 20 at p. 3)
---------------------------------------------------------------------------

    \17\ See posted comment on www.regulations.gov, Docket No. EERE-
2019-BT-TP-0026-0008-0015.
---------------------------------------------------------------------------

    In the June 2022 Preliminary Analysis, DOE considered variable-
speed compressors as part of the technology assessment, but took into 
account only their full-load efficiency. As discussed in chapter 3 of 
the preliminary TSD, the DOE test procedure at appendix X1 does not 
attribute any partial-load efficiency improvements to variable-speed 
dehumidifiers as the test procedures for room air conditioners and 
portable air conditioners do for units with variable-speed compressors, 
because variable-speed dehumidifiers must maintain a constant 
evaporator temperature below the dew point regardless of the amount of 
moisture present in the room. This provides no opportunity for energy 
savings. DOE also noted the costs associated with implementing 
variable-speed compressors and accounted for these costs in the 
engineering analysis where appropriate.
    Since publication of the June 2022 Preliminary Analysis, additional 
market research, manufacturer interviews, and input from commenters led 
DOE to understand that variable-speed compressors do not offer 
efficiency benefits sufficient to justify the costs and design 
challenges associated with implementing them for dehumidifiers. 
Therefore, in the analysis for this NOPR, DOE did not consider 
variable-speed compressors as a design option to improve compressor 
efficiency. See chapter 3 of the NOPR TSD for

[[Page 76522]]

additional discussion about variable-speed compressors.
    AHAM requested that DOE evaluate whether the use of variable-
frequency drives and similar high frequency components will lead to 
increased nuisance tripping of ground-fault circuit-interrupters 
(``GFCIs'') and associated cost implications. According to AHAM, 
nuisance tripping may require a consumer to call an electrician to 
change a breaker or replace a unit and could lead to less efficient 
operation, as continuous dehumidification over time is more efficient 
than interrupted dehumidification. (AHAM, No. 22 at p. 7)
    DOE is aware that when implementing variable-frequency drives, as 
for both variable-speed compressors and fan blower electronically 
commutated motors (``ECMs''), it is possible that GFCI systems will 
trip without a fault present, requiring a manual reset of the 
dehumidifier by the consumer. However, DOE understands that GFCI 
tripping, even for units with variable-speed drives, can generally be 
mitigated through the use of best practices for reducing leakage 
current, such as minimizing ECM cable length and ensuring that filtered 
and unfiltered cables are separated to whatever extent possible to 
reduce leakage current. Additionally, optimizing the variable-frequency 
controller power filter to reduce total leakage current to levels below 
the GFCI detection limits can prevent GFCI tripping. Furthermore, DOE 
does not have any information on the prevalence of nuisance tripping 
events or on the potential impact of such trips on consumer utility or 
dehumidifier energy use. DOE notes that despite the potential for 
nuisance tripping, a wide range of appliances on the market today, 
including dehumidifiers, implement variable-frequency drives in their 
designs. The inclusion of these variable-frequency drive designs in 
units on the market suggests that they do not have a significant impact 
on the consumer utility of these products. Therefore, DOE is continuing 
to consider ECMs for fan blowers as a technology option for the NOPR 
engineering analysis. However, for the reasons discussed above, DOE did 
not consider variable-speed compressors as a technology option to 
improve compressor efficiency in this NOPR analysis.
b. Washable Air Filters
    MIAQ did not support the use of washable air filters and stated 
that in a limited study washable filters were changed less frequently 
than disposable filters, leading to reduced airflow and reduced 
efficiency. (MIAQ, No. 20 at p. 3)
    DOE understands that the efficiency impacts due to air filters are 
dependent on regular consumer maintenance. As DOE noted in the 
technology assessment in chapter 3 of the preliminary TSD, it is 
difficult to predict the amount of energy savings that could be 
realized with the addition of washable air filters, as it is dependent 
on the specific dehumidifier model and use characteristics, and on the 
degree to which the consumer takes advantage of this feature. DOE also 
noted in the preliminary TSD that most dehumidifiers incorporate an air 
filter and that most manufacturers design the air filters to be 
removable and washable. Therefore, DOE did not consider washable air 
filters as a design option to improve efficiency in the engineering 
analysis for the June 2022 Preliminary Analysis. The information that 
MIAQ provided regarding the efficiency impacts of washable air filters 
further supports DOE's preliminary determination not to include 
washable air filters as a design option in the engineering analysis, 
and in light of the uncertainty and lack of sufficient data as to any 
efficiency benefit associated with them and the prevalence of them in 
dehumidifiers already on the market, DOE has tentatively removed from 
consideration washable air filters as a technology option in this NOPR.
c. Air-to-Air Heat Exchangers
    According to MIAQ, air-to-air heat exchangers add significant cost 
and complexity to the design, MPC, and installation of the unit and 
typically push the unit into the greater than 8 cubic foot category 
where minimum efficiency values are considerably higher. (MIAQ, No. 20 
at p. 3)
    DOE considers the costs of design options in the engineering 
analysis. Although DOE is aware that air-to-air heat exchangers are 
implemented in many whole-home dehumidifiers with case volumes greater 
than 8 cubic feet, DOE did not implement air-to-air heat exchangers as 
a design option to achieve higher efficiency levels in the NOPR 
engineering analysis because dehumidifiers with size constraints that 
allow air-to-air heat exchangers already implement them and they 
require too much case volume increase to implement for other units. 
(See chapter 5 of the NOPR TSD for additional details.)
d. Alternative Refrigerants
    The Joint Commenters supported DOE's decision to consider R-32 
compressors as a design option for dehumidifiers due to their 
significant potential to improve efficiencies, and agreed that R-32 
will likely be acceptable for use in dehumidifiers by the time amended 
standards come into effect. The Joint Commenters noted that in July 
2022, the U.S. Environmental Protection Agency (``EPA'') proposed to 
list R-32 as acceptable for use in new residential dehumidifiers. 
(Joint Commenters, No. 21 at p. 1)
    MIAQ requested that DOE consider the impact on efficiency that any 
new refrigerant would have on dehumidifiers. Although some refrigerants 
may provide efficiency improvements, optimizing the unit's performance 
would require time and the assistance of component suppliers. (MIAQ, 
No. 20 at p. 3)
    DOE is aware that new refrigerant regulations from entities such as 
the California Air Resource Board (``CARB'') are prompting an industry-
wide refrigerant changeover. Based on feedback received during the 
manufacturer interview process, DOE expects that the process of 
redesigning and optimizing dehumidifiers for new refrigerants such as 
R-32 will be part of the typical new unit design process, not a result 
of any amended standards that DOE may adopt. Additionally, DOE 
estimates that the implementation of R-32 in dehumidifiers is unlikely 
to result in an efficiency increase due to the refrigerant changeover 
alone, although compressors designed for R-32 may be slightly more 
efficient than compressors designed for R-410a due to other design 
improvements. Therefore, given this industry-wide refrigerant 
changeover expected to occur by the compliance date of any new 
dehumidifier standards, in this NOPR analysis DOE considered the impact 
of compressor improvements on overall dehumidifier efficiency only for 
those compressors using R-32, assuming that manufacturers will already 
have transitioned to refrigeration systems optimized for the new 
refrigerant.
    DOE requests comment on the effects of EPA and CARB regulations on 
refrigerant choices and on whether changes in refrigerant will affect 
manufacturer's ability to achieve the efficiency levels in the NOPR 
analysis and the availability of high-efficiency R-32 compressors.
    For further discussion of the cumulative regulatory burden, see 
section V.B.2.e of this document.
e. Low-Standby-Loss Electronic Controls
    According to AHAM, low standby-loss electronic controls save as 
little as 1 watt of power and have a minimal impact to overall energy 
savings that

[[Page 76523]]

does not warrant the cost of implementing this technology option, and 
should therefore have been screened out by DOE. (AHAM, No. 22 at p. 4)
    In the engineering analysis, DOE accounts for the cost relative to 
the efficiency benefit of all technologies that pass the screening 
analysis and are considered, as discussed. See chapter 3 of the NOPR 
TSD for discussion of the potential efficiency benefits of low-standby-
loss electronic controls and chapter 5 of the NOPR TSD for further 
discussion of the costs of this technology.
f. Multi-Circuited Evaporator and Secondary Condenser Coils
    Since publication of the June 2022 Preliminary Analysis, DOE became 
aware of at least one whole-home dehumidifier on the market that 
implements a novel refrigeration loop design. This patented design 
``causes part of the refrigerant within the system to evaporate and 
condense twice in one refrigeration cycle, thereby increasing the 
compressor capacity over typical systems without adding any additional 
power to the compressor.'' \18\ DOE has observed that this technology 
has resulted in a unit that is at least 4-percent more efficient than 
any other unit available on the market and a significant reduction in 
case volume compared to units with similar dehumidification capacities. 
Therefore, DOE has included multi-circuited evaporator and secondary 
condenser coil refrigerant systems as an additional technology option 
for this NOPR. See chapter 3 of the NOPR TSD for additional discussion 
of this technology.
---------------------------------------------------------------------------

    \18\ U.S. Patent No. 10,845,069.
---------------------------------------------------------------------------

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:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or result in the unavailability of any covered 
product type with performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as products generally available in the United States at the time, 
it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns.

10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).

    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the June 2022 Preliminary Analysis, DOE screened out pre-cooling 
air-to-air heat exchangers and heat pipes from the analysis for 
portable dehumidifiers with capacities up to and including 50 pints/
day. DOE determined that these dehumidifiers could not accommodate the 
significant increases in case size and weight required to implement 
these technologies without a significant adverse effect on consumer 
utility (screening criterion 3).
    AHAM agreed that implementation of pre-cooling air-to-air heat 
exchangers is applicable only to high-capacity portable dehumidifiers 
in Product Class 3 and requested that DOE recognize that current 
dehumidifier casings may not accommodate the increase in components and 
product size associated with this technology option. (AHAM, No. 22 at 
p. 4)
    For the reasons given in the June 2022 Preliminary Analysis, DOE is 
maintaining the same approach to air-to-air heat exchangers and heat 
pipes in this NOPR analysis. See chapter 4 of the NOPR TSD for further 
discussion.
    DOE is also screening out multi-circuited evaporator and secondary 
condenser coil refrigerant systems, a technology newly considered for 
the NOPR per section IV.A.2.f of this document, because it represents a 
unique-pathway proprietary technology. See chapter 4 of the NOPR TSD 
for further discussion.
2. Remaining Technologies
    Through a review of each technology, DOE tentatively concludes that 
all of the other identified technologies listed in section IV.A.2 of 
this document meet all five screening criteria to be examined further 
as design options in DOE's NOPR analysis. In summary, DOE did not 
screen out the following technology options:

          Table IV.3--Retained Design Options for Dehumidifiers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Microchannel heat exchangers.
2. Built-in hygrometer/humidistat.
3. Improved compressor efficiency.
4. Improved condenser and evaporator performance.
5. Improved controls.
6. Improved defrost methods.
7. Improved demand-defrost controls.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.

[[Page 76524]]

 
10. Low-standby-loss electronic controls.
11. Pre-cooling air-to-air heat exchanger (high-capacity portable and
 whole-home dehumidifiers only).
12. Heat pipes (high-capacity portable and whole-home dehumidifiers
 only).
13. Improved refrigeration system insulation.
14. Refrigerant-desiccant systems.
15. Alternative refrigerants.
------------------------------------------------------------------------

    DOE has initially determined that these technology options are 
technologically feasible because they are being used or have previously 
been used in commercially available products or working prototypes. DOE 
also finds that all of the remaining technology options meet the other 
screening criteria (i.e., practicable to manufacture, install, and 
service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, unique-pathway proprietary 
technologies). For additional details, see chapter 4 of the NOPR TSD.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of dehumidifiers. There 
are two elements to consider in the engineering analysis; the selection 
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
products, DOE considers technologies and design option combinations not 
eliminated by the screening analysis. For each product class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
product at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to ``gap fill'' levels (to bridge 
large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In this proposed rulemaking, DOE relied on a combination of these 
two methods in developing cost estimates at each efficiency level for 
dehumidifiers, structured around the reverse engineering approach. For 
each product class, DOE analyzed a few units from different 
manufacturers to ensure the analysis was representative of various 
designs on the market. The analysis involved reviewing publicly 
available cost and performance information, physically disassembling 
commercially available products and modeling equipment cost while 
removing costs associated with non-efficiency related components or 
features. From this information, DOE estimated the MPCs for a range of 
products currently available on the market. DOE then considered the 
incremental steps manufacturers may take to reach higher efficiency 
levels. In its modeling, DOE started with the baseline MPC and added 
the expected design options at each higher efficiency level to estimate 
incremental MPCs. See chapter 5 of the NOPR TSD for additional detail 
on the dehumidifiers analyzed.
    DOE analyzed six efficiency levels (``ELs'') as part of the 
engineering analysis for portable dehumidifiers with capacities less 
than or equal to 50 pints/day: (1) the current DOE standard (baseline); 
(2) an intermediate level above the baseline but below the ENERGY 
STAR[supreg] level, representing units that exist on the market above 
the baseline but are not ENERGY STAR units (EL 1); (3) the ENERGY STAR 
efficiency criterion (EL 2); (4) the level of the most efficient units 
available on the market (EL 3); (5) an intermediate level below the 
maximum technologically feasible (max-tech) efficiency that represents 
the implementation of more efficient compressors and fan motors on the 
market without any changes to the unit chassis (EL 4); and (6) the max-
tech efficiency (EL 5).
    For portable dehumidifiers with capacities of 50.01 pints/day and 
above, the distribution of efficiencies that are available on the 
market and the technology options feasible for this product class 
required DOE to analyze different efficiency levels, as follows: (1) 
the current DOE standard (baseline); (2) an intermediate level above 
the baseline but below the ENERGY STAR level, representing units that 
exist on the market above the baseline but are not ENERGY STAR units 
(EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an 
intermediate level below max tech that represents the implementation of 
more efficient compressors and fan motors on the market (EL 3); and (5) 
the max-tech efficiency (EL 4).
    For whole-home dehumidifiers with case volumes of 8 cubic feet or 
below, likewise, the distribution of efficiencies that are available on 
the market and the technology options feasible for this product class 
required DOE to analyze different efficiency levels, as follows: (1) 
the current DOE standard (baseline); (2) the ENERGY STAR efficiency 
criterion (EL 1); (3) an intermediate level below max tech, 
representing the level of the most efficient units available on the 
market (EL 2); and (4) the max-tech efficiency (EL 3).
    For whole-home dehumidifiers with case volumes larger than 8 cubic 
feet, likewise, the distribution of efficiencies that are available on 
the market and the technology options feasible for this product class 
required DOE to analyze different efficiency levels, as follows: (1) 
the current DOE standard (baseline); (2) an intermediate level above 
the baseline but below the ENERGY STAR level, representing the level of 
the most efficient units available on the market

[[Page 76525]]

(EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an 
intermediate level below max tech that represents the implementation of 
more efficient compressors and fan motors on the market and some 
increase to heat exchanger size relative to EL 2 (EL 3); and (5) the 
max-tech efficiency (EL 4).
a. Baseline Efficiency
    For each product/equipment class, DOE generally selects a baseline 
model as a reference point for each class, and measures changes 
resulting from potential energy conservation standards against the 
baseline. The baseline model in each product/equipment class represents 
the characteristics of a product/equipment typical of that class (e.g., 
capacity, physical size). Generally, a baseline model is one that just 
meets current energy conservation standards, or, if no standards are in 
place, the baseline is typically the most common or least efficient 
unit on the market.
    For representative units for teardowns and the NOPR, DOE selected 
three baseline units that fell within two of the five dehumidifier 
product classes (Product Class 1 and Product Class 2) as reference 
points for each analyzed product class, against which DOE measured 
changes that would result from amended energy conservation standards to 
support the engineering, LCC, and PBP analyses. Baseline units for two 
of the other three product classes (Product Class 3 and Product Class 
5) were not readily available on the market for analysis. Additionally, 
as discussed in chapter 5 of the preliminary TSD, for whole-home 
dehumidifiers with case volumes of 8 cubic feet or less, DOE does not 
expect that efficiencies and overall designs have changed since the 
previous standards rulemaking, given that the whole-home dehumidifier 
standards adopted in the June 2016 Final Rule were the baseline level 
at the time. For this reason, DOE did not select additional baseline 
units in Product Class 4 for teardown as part of the NOPR analysis. 
However, DOE found that higher-efficiency models could provide insight 
into technologies that were likely to be implemented in baseline units 
to improve efficiency. Therefore, for product classes where baseline 
units were not available, DOE estimated the MPC of baseline units by 
evaluating which design options would need to be removed from the 
higher-efficiency unit analyzed in order to reduce its efficiency to 
the baseline level. The baseline units in each of the analyzed product 
classes represent the basic characteristics of equipment in that class.
    MIAQ stated in response to the June 2022 Preliminary Analysis that 
the current energy conservation standards for portable dehumidifier 
product classes are not appropriate or in the best interest of the 
Nation's energy consumption. According to MIAQ, the jump in baseline 
efficiency from 1.60 L/kWh at the 25.01-50.00 pints/day capacity up to 
2.80 L/kWh for larger-capacity units is too drastic and would force MPC 
and manufacturer selling price (``MSP'') to escalate far above that of 
smaller dehumidifiers. According to MIAQ, as consumers purchase 
sufficient dehumidifier capacity match the latent load of their 
dwelling, this could be through a more expensive, higher-efficiency 
dehumidifier at an efficiency of 2.80 L/kWh or through multiple less-
expensive and less-efficient dehumidifiers at an efficiency of 1.30 L/
kWh. MIAQ stated that as MPC and MSP on these two types of units are 
drastically different, anecdotal evidence indicates many consumers have 
two or more dehumidifiers in their basement or crawlspace consuming 
twice the power of a larger unit. Therefore, MIAQ requested that DOE 
develop a new set of baseline efficiency levels for portable 
dehumidifiers that create more parity in the MPCs and baseline 
efficiencies for the product sizes. (MIAQ, No. 20 at pp. 3-4)
    As noted, DOE analyzes the changes due to potential energy 
conservation standards against the baseline for each product class. DOE 
determined in the June 2016 Final Rule that the current standards were 
technologically feasible and economically justified for each of the 
five dehumidifier product classes (81 FR 38338, 38385-38388), and 
models exist on the market at or above the current standard level in 
each class. Therefore, DOE has evaluated baseline efficiency levels for 
this NOPR analysis that correspond to the current energy conservation 
standards for dehumidifiers. DOE notes that units with capacities 
larger than 50 pints/day have inherent differences in design from those 
with smaller capacities related to the different consumer utility they 
provide. The larger dehumidifiers in Product Class 3 provide 
dehumidification for large spaces, are more robustly constructed, and 
are more efficient due to their greater size and capacity. The smaller 
dehumidifiers are intended to dehumidify smaller spaces and provide 
consumers with an affordable, lighter-weight, and more compact option 
to dehumidify a targeted area. The current energy conservation 
standards on which the baseline efficiency levels are based reflect 
that consumers derive utility from the greater capacity, efficiency, 
and robust construction of larger dehumidifiers and that smaller 
dehumidifiers offer utility in the form of their smaller size and lower 
cost. These differences in utility are borne out in the design 
differences observed between these classes of dehumidifiers, with 
larger dehumidifiers implementing more durable materials and larger 
heat exchangers. These design differences lead to the cost differential 
observed by manufacturers and consumers between larger and smaller 
dehumidifiers. DOE developed the higher efficiency levels in each 
product class based on the units currently on the market, external 
efficiency criteria such as ENERGY STAR, and technological feasibility 
of design options to improve dehumidifier efficiency. DOE then 
evaluated the economic impacts of potential standards at each of these 
efficiency levels, including incremental impacts on MPCs and MSPs in 
each product class, as part of the NOPR analysis. DOE is not aware of 
and lacks sufficient consumer usage data showing that consumers install 
multiple smaller dehumidifiers in the same room instead of purchasing 
one larger, more efficient dehumidifier as part of an average period of 
use, and therefore did not model any product class switching as a 
result of evaluated potential standards.
    DOE requests comment regarding consumer's dehumidifier usage 
patterns and whether consumers typically purchase multiple smaller 
dehumidifiers to meet dehumidification requirements as opposed to a 
single, higher capacity dehumidifier.
b. Higher Efficiency Levels
    As discussed above, DOE modeled several efficiency levels above the 
baseline for dehumidifiers in each product class, using a combination 
of design options that varied by product class (for detailed discussion 
of the design options used to model each efficiency level, see chapter 
5 of the NOPR TSD). As part of DOE's analysis, the maximum available 
efficiency level is the highest efficiency unit currently available on 
the market. DOE also defines a ``max-tech'' efficiency level to 
represent the maximum possible efficiency for a given product. At all 
of these levels, DOE considered incremental compressor efficiency 
improvements as a design option. In the June 2022 Preliminary Analysis, 
DOE reviewed compressor manufacturer product catalogues to identify the 
maximum technologically feasible R-32 compressor efficiency. However, 
based on additional research and input from

[[Page 76526]]

manufacturer interviews, DOE understands that the most efficient 
compressors listed in catalogues may not be widely available to all 
dehumidifier manufacturers or available at the scale necessary to serve 
the dehumidifier market at the anticipated date of compliance of any 
new standards. This is especially true for the relatively small 
manufacturers that produce dehumidifiers in Product Class 4 and Product 
Class 5, given the specialized applications for these products and the 
corresponding lower production volumes. To address this concern in the 
NOPR analysis, DOE considered incremental compressor efficiency 
increases for each product class only up to the highest R-32 single-
speed compressor efficiency observed in the teardown sample in that 
class. This change ensures that the higher-efficiency compressors 
considered as design options are widely available and technologically 
feasible for all dehumidifier manufacturers to implement. As discussed 
in chapter 5 of the NOPR TSD, DOE modeled replacing permanent split 
capacitor (``PSC'') fan motors with more efficient ECMs, replacing 
baseline single-speed compressors with the most efficient single-speed 
compressors already available on the market, reducing standby power 
using more efficient controls, and increasing the cabinet and heat 
exchanger to the largest sizes feasible without impacting consumer 
utility to improve efficiency. For all product classes, the max-tech 
level identified exceeds any other regulatory or voluntary efficiency 
criteria currently in effect.
    DOE received the following comments related to the higher 
efficiency levels modeled in the preliminary engineering analysis.
    AHAM requested that DOE account for additional controls, 
specifically variable-frequency drives that are required for ECMs in 
the improved fan and fan motor efficiency technology option. According 
to AHAM, in addition to the significant cost increase associated with 
ECMs being a significant obstacle to widespread adoption in 
dehumidifiers, additional controls would only further increase the cost 
and require additional space within the product case, potentially 
affecting the size and weight of the product. (AHAM, No. 22 at p. 5)
    DOE is aware that ECMs require specialized control boards and 
additional space within dehumidifier chassis to locate them and 
considered this issue as part of the engineering analysis. DOE found 
that there is a variable-speed dehumidifier on the market that 
implements a variable-speed compressor, and this model has the same 
chassis size as another comparable dehumidifier from the same 
manufacturer that does not implement the variable-speed components and 
functionality. DOE expects that a variable-speed dehumidifier would 
have similar control requirements to one that implements ECMs. 
Therefore, DOE tentatively finds that the implementation of ECMs for 
fan blowers in dehumidifiers does not inherently necessitate a change 
in chassis size.
    According to AHAM and a survey of its members, employing the 
technology options that DOE suggested in the preliminary TSD to meet 
the analyzed efficiency levels for Product Classes 1, 2, and 3 would 
require significant increases in both model weight and model 
dimensions. For Product Classes 1 and 2, AHAM stated that an increase 
of up to 30 percent in model weight and up to 59 percent in model 
dimensions is required to meet EL 3, and an increase of up to 38 
percent in model weight and up to 68 percent in model dimensions is 
required to meet EL 4. For Product Class 3, AHAM stated that EL 2 would 
require a product redesign and likely an increase in both weight and 
dimension by unknown quantities. AHAM also stated that increased 
product size and weight associated with implementing the technology 
options specified in the preliminary TSD will affect the consumer 
utility of dehumidifiers, specifically regarding portability. According 
to AHAM, consumers must move or lift dehumidifiers when purchased and 
when used in different spaces in their homes. Additionally, 
manufacturers design models to meet a 51-pound weight threshold for a 
one-person lift, a design parameter that not only reflects consumer 
utility but also is a requirement under worker safety standards, parcel 
delivery service fee structures, and other distribution requirements 
that AHAM stated DOE should consider for all product classes. AHAM 
urged DOE to assess impacts on product weight associated with increased 
heat exchanger area and added tube rows in the improved condenser and 
evaporator performance technology option. According to AHAM, an 
increase in weight of the coil section could severely impact consumer 
use in existing dehumidifier designs that require lifting the coil 
section in order to access the water collection bucket. Additionally, 
AHAM stated that its members specifically identified weight increases 
associated with this technology option in meeting EL 3 for all product 
classes. AHAM requested that DOE assess all potential cost increases 
associated with the technology options that increase product size and/
or weight and noted its recommendation for a standard that does not go 
beyond EL 2 for Product Class 1, a gap-fill analysis for Product Class 
2, and no change in the standard for Product Class 3 to avoid these 
negative impacts. (AHAM, No. 22 at pp. 2-5)
    In the June 2022 Preliminary Analysis, DOE modeled the efficiency 
levels below max-tech mentioned by AHAM by implementing more efficient 
compressors without any additional design options. In DOE's assessment, 
these higher-efficiency compressors would result in a slight weight 
increase but would require no changes to the dehumidifier's chassis 
size or any substantive change in overall weight. Additionally, based 
on teardowns of other space conditioning products, DOE does not expect 
that ECMs are heavier than the PSC motors currently used in 
dehumidifiers. However, as AHAM suggested, DOE does expect weight 
changes at the max-tech level associated with increasing the heat 
exchanger size. DOE accounted for the effect of these weight changes 
and changes to chassis size in its analysis of shipping costs, and 
limited the maximum increase in heat exchanger size for portable 
dehumidifiers in Product Classes 1 and 2 to dimensions already observed 
on the market in these product classes to ensure the units analyzed 
retained their consumer utility as smaller, portable units. Because 
product weight changes due to heat exchanger size increases are 
correlated with product dimensions, DOE does not expect that these 
weight increases will result in units that are significantly heavier 
than those currently on the market, such that any weight increases will 
not adversely affect consumer utility. For Product Class 3, DOE's 
market analysis suggests that most models in Product Class 3, even at 
baseline efficiency, typically weigh roughly between 55 and 70 pounds, 
already surpassing the 51-pound weight limit for a single-person lift 
mentioned by AHAM. Therefore, Product Class 3 units already require two 
people to lift and install, a requirement that would not be altered by 
minor increases in chassis size and thus weight. However, a 
significantly larger chassis size might become more unwieldy for two 
people to lift. Accordingly, DOE limited the heat exchanger dimension 
increases considered for Product Class 3 to 5 percent greater than 
those observed in product teardowns in order to preclude any adverse 
effects on consumer utility.

[[Page 76527]]

DOE further notes that portable dehumidifiers are typically equipped 
with wheels that allow consumers to move them from room to room within 
the home. While DOE is aware of a dehumidifier design that requires 
consumers to lift the coil section to access the water bucket, the 
design is not efficiency-related and is proprietary, and therefore DOE 
did not consider this design in its analysis. In sum, DOE expects that 
the NOPR analysis and any subsequent amended energy conservation 
standards would not impact the design, weight, or dimensions of any 
dehumidifier significantly, as the required chassis dimensions are 
within the scope of those previously observed in dehumidifiers. For 
these reasons, in the NOPR analysis DOE continued to consider design 
options that increase the weight of dehumidifiers, limited to the 
extent discussed by restrictions on the allowable chassis size 
increases.
    DOE requests comment on whether limiting needed chassis size 
increases is sufficient to preserve consumer utility at the max-tech 
level.
    AHAM stated that while improved compressor efficiency can achieve 
higher overall efficiency, changes in compressor technology may require 
product redesigns in the form of additional safety components, 
particularly with the transition to R-32 refrigerant. According to 
AHAM, these additional safety components would make it more difficult 
to implement other technology options that will require room within the 
product casing. (AHAM, No. 22 at p. 5)
    DOE is aware that the EPA's Significant New Alternatives Policy 
(``SNAP'') regulations now allow the use of R-32 in new dehumidifiers, 
provided that they comply with the relevant industry safety standard 
\19\ to ensure new dehumidifiers are designed with the flammability of 
R-32 in mind. See 88 FR 26382. However, DOE does not have information 
regarding the sorts of design changes necessary to comply with this 
standard. See section V.B.2.e of this document for discussion of how 
DOE accounts for refrigerant transition costs in its cumulative 
regulatory burden analysis.
---------------------------------------------------------------------------

    \19\ 3rd edition, dated November 1, 2019, of Underwriters 
Laboratories (``UL'') Standard 60335-2-40, ``Household and Similar 
Electrical Appliances--Safety--Part 2-40: Particular Requirements 
for Electrical Heat Pumps, Air Conditioners and Dehumidifiers''.
---------------------------------------------------------------------------

    ASAP and the Joint Commenters encouraged DOE to evaluate at least 
one intermediate efficiency level between EL 3 and EL 4 for Product 
Classes 1 and 2 to address the large gap in efficiencies due to the 
introduction of multiple design options at EL 4. The Joint Commenters 
added that DOE could evaluate an intermediate level based on the 
highest-efficiency compressors, or one reflecting all design options 
except for increases in heat exchanger size. According to the Joint 
Commenters, DOE may refer to the April 2022 NOPR for room air 
conditioners in which the most efficient single-speed compressors were 
associated with an increase in efficiency of 19 to 25 percent relative 
to baseline units and an incremental cost of less than $15. (ASAP, 
Public Meeting Transcript, No. 19 at pp. 19-20; Joint Commenters, No. 
21 at p. 2)
    In the June 2022 Preliminary Analysis for Product Classes 1 and 2, 
DOE analyzed two efficiency levels above the ENERGY STAR level: the 
maximum available efficiency on the market and the max-tech efficiency. 
For Product Class 3 and for whole-home dehumidifiers, DOE analyzed the 
max-tech efficiency level above the ENERGY STAR level and no other 
intermediate levels, because there were no units on the market above 
the ENERGY STAR efficiency. While conducting the analysis for this 
NOPR, DOE noted the potential to add an efficiency level for all 
product classes beyond the maximum available efficiency but below max 
tech by using more efficient single-speed compressors and implementing 
ECM technology. DOE used these design options to model a new 
intermediate efficiency level, EL 4, for all product classes. The new 
EL 4 level improves the efficiency by 35 to 63 percent relative to 
baseline units with incremental costs between $83 and $119, depending 
on product class. See chapter 5 of the NOPR TSD for additional 
discussion of the new efficiency levels and incremental costs.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, and the availability and timeliness of purchasing the product 
on the market. The cost approaches are summarized as follows:
    [squ] Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component by component, to 
develop a detailed bill of materials for the product.
    [squ] Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (e.g., 
available from manufacturer websites or appliance repair websites) to 
develop the bill of materials for the product.
    [squ] Price surveys: If neither a physical nor catalog teardown is 
feasible (e.g., for tightly integrated products such as fluorescent 
lamps, which are infeasible to disassemble and for which parts diagrams 
are unavailable) or is cost-prohibitive and otherwise impractical 
(e.g., for large commercial boilers), DOE conducts price surveys using 
publicly available pricing data published on major online retailer 
websites and/or by soliciting prices from distributors and other 
commercial channels.
    In the present case, DOE conducted the analysis using physical 
teardowns. The resulting bill of materials provides the basis for the 
MPC estimates.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a multiplier (the manufacturer markup) to the MPC. 
The resulting manufacturer selling price (``MSP'') is the price at 
which the manufacturer distributes a unit into commerce. DOE developed 
an average manufacturer markup by examining corporate annual reports 
filed by publicly traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes dehumidifiers. 
See section IV.J.2.d of this document or chapter 12 of the NOPR TSD for 
additional information on the manufacturer markup.
    In response to June 2022 Preliminary Analysis, MIAQ stated that 
although the manufacturer markup of 1.45 used in the preliminary 
analysis was historically accurate, it now overstates the current 
market situation which is decreasing as costs continue to increase and 
are unable to be passed onto the consumer. MIAQ also stated it would be 
willing to share information on their current markup for dehumidifiers. 
(MIAQ, No. 20 at p. 5)
    For this NOPR analysis, DOE adjusted the estimated industry average 
manufacturer markup from the 1.45 estimate published in the June 2022 
Preliminary Analysis. DOE used market share weights to adjust the 
manufacturer markup based on confidential feedback provided in 
manufacturer interviews and a review of recent corporate annual reports 
by public companies engaged in manufacturing dehumidifiers. DOE 
estimates that the industry average manufacturer markup is 1.40 for all 
product classes. See section IV.J.2.d of this document and chapter 12 
of the NOPR TSD for additional information on the manufacturer markup.

[[Page 76528]]

    AHAM stated that implementation of technology options that both 
increase product efficiency and product size and/or weight runs counter 
to manufacturer efforts to decrease product size and maximize shipping 
container space in order to deliver products to consumers in a timely 
manner while minimizing added costs due to ongoing supply chain and 
logistics issues. AHAM requested that DOE avoid design options that 
require increases in size and/or weight for these reasons and requested 
that DOE account for these added costs in its analysis. (AHAM, No. 22 
at p. 3)
    In this NOPR, DOE's analysis includes the impact of changes in 
dimensions on overseas container and domestic shipping rates. For 
efficiency levels below max-tech, DOE does not find increases in 
shipping costs, because chassis size and weight of the units are not 
expected to change from the baseline at these efficiency levels. At 
max-tech, there are increases in shipping costs due to the expected 
increase in chassis size. Additional information about shipping costs 
is available in section IV.F.1 of this document and chapter 8 of the 
NOPR TSD.
3. Cost-Efficiency Results
    The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the 
product classes. DOE developed estimates of MPCs for each unit in the 
teardown sample, and also performed additional modeling for each of the 
teardown samples, to develop a comprehensive set of MPCs at each 
efficiency level. DOE then consolidated the resulting MPCs for each of 
DOE's teardown units and modeled units using a weighted average for 
product classes in which DOE analyzed units from multiple 
manufacturers. DOE's weighting factors were based on a market 
penetration analysis for each of the manufacturers within each product 
class. The resulting weighted-average incremental MPCs (i.e., the 
additional costs manufacturers would likely incur by producing 
dehumidifiers at each efficiency level compared to the baseline) are 
provided in Tables 5.5.12 and 5.5.13 in chapter 5 of the NOPR TSD. See 
chapter 5 of the NOPR TSD for additional detail on the engineering 
analysis.
    DOE requests comment on the incremental MPCs from the NOPR 
engineering analysis.

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 analysis. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
products with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit operating profit before and after new or 
amended standards.\20\
---------------------------------------------------------------------------

    \20\ Because the projected prices of standards-compliant 
products are 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 in the short term, DOE maintains that in markets 
that are reasonably competitive, it is unlikely that standards would 
lead to a sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    For portable dehumidifiers with capacities less than or equal to 
50.0 pints/day, DOE assumed all sales were through the retail channel. 
DOE developed baseline and incremental retail markups using data from 
the 2017 Annual Retail Trade Survey for the ``electronics and appliance 
stores'' sector.\21\ The whole-home dehumidifier distribution channel 
reflects two additional markups to include wholesalers and contractors 
used in the purchase of the larger dehumidifiers. DOE developed 
wholesaler and contractor markups using U.S. Census Bureau data from 
the 2017 Annual Wholesale Trade Report \22\ and the 2017 U.S. Economic 
Census,\23\ respectively. For portable dehumidifiers with capacities 
greater than 50.00 pints/day, DOE assumed 60 percent of shipments were 
through the retail channel, and 40 percent of shipments were through 
the whole-home dehumidifier distribution channel based on feedback from 
manufacturer interviews.
---------------------------------------------------------------------------

    \21\ US Census Bureau, Annual Retail Trade Survey. 2017. 
www.census.gov/programs-surveys/arts.html.
    \22\ US Census Bureau, Annual Retail Trade Survey. 2017. 
www.census.gov/programs-surveys/arts.html.
    \23\ US Census Bureau, 2017 Economic Census. www.census.gov/programs-surveys/economic-census/year/2017/economic-census-2017/data.html.
---------------------------------------------------------------------------

    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for dehumidifiers.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of dehumidifiers at different efficiencies in 
representative U.S. single-family homes and multi-family residences, 
and to assess the energy savings potential of increased dehumidifier 
efficiency. The energy use analysis estimates the range of energy use 
of dehumidifiers in the field (i.e., as they are actually used by 
consumers). The energy use analysis provides the basis for other 
analyses DOE performed, particularly assessments of the energy savings 
and the savings in consumer operating costs that could result from 
adoption of amended or new standards.
    DOE used data from the EIA's 2020 Residential Energy Consumption 
Survey (``RECS 2020'') \24\ to determine dehumidifier ownership and 
usage across the United States. RECS 2020 represents the largest 
nationally available dataset of installed residential appliance stock 
of dehumidifiers in households (either portable or whole home) as well 
as the number of portable units in each household. RECS also provides 
dehumidifier usage information in the form of broad categories of 
annual usage frequency as reported by the households. DOE estimated 
monthly vapor density data for each household that reported owning a 
portable dehumidifier by using corresponding outdoor temperature and 
humidity information for the year 2020 provided by the National Oceanic 
and Atmospheric Administration (NOAA).\25\ DOE used this vapor density 
data in conjunction with the annual usage information to estimate the 
respective annual operating hours of portable dehumidifiers for each 
consumer sample as applicable.
---------------------------------------------------------------------------

    \24\ U.S. Department of Energy-Energy Information 
Administration. Residential Energy Consumption Survey. 2020. 
www.eia.gov/consumption/residential/data/2020/.
    \25\ Available at https://www.ncdc.noaa.gov/cdo-web/datatools/lcd.
---------------------------------------------------------------------------

    DOE determined that portable dehumidifiers operated in active 
(dehumidification) mode, fan-only mode, and standby mode while whole-
home dehumidifiers operated in active and standby modes only. To 
estimate the annual dehumidifier energy consumption, DOE first 
calculated the number of operating hours in each mode. For portable 
dehumidifiers, DOE used available dehumidifier field

[[Page 76529]]

studies ^{26 27} that provided a relationship between vapor 
density and daily operating hours. DOE estimated that portable 
dehumidifiers operated in active mode for an average of 1,337 hours 
annually. For whole-home dehumidifiers, based on data from the field 
study, DOE estimated that, on average, 28 percent of the daily 
operating hours were spent in active or dehumidification mode and the 
remaining in standby mode. DOE paired these data with estimates of the 
number of months that dehumidifiers may be used based on usage behavior 
as reported in RECS 2020. DOE estimated that consumers leave the 
dehumidifier to cycle on and off for the entire month or months of the 
dehumidification season.
---------------------------------------------------------------------------

    \26\ Willem, H., T. Burke, C. Dunham, B. Beraki, J. Lutz, M. 
Melody, M. Nagaraju, C. Ni, S. Pratt, S. Price, and V. Tavares. 
Using Field-Metered Data to Quantify Annual Energy Use of 
Residential Portable Unit Dehumidifiers. 2013. Report No. LBNL-
6469e.
    \27\ Burke, T. A., H. Willem, C. C. Ni, H. Stratton, C. Dunham 
Whitehead, and R. Johnson. Whole-Home Dehumidifiers: Field-
Monitoring Study. 2014. Report No. LBNL-1003950E.
---------------------------------------------------------------------------

    MIAQ stated that although dehumidifiers use the same vapor 
compression refrigeration cycle as air conditioners, their operation is 
much different and the latent load or run time is affected by many 
variables. According to MIAQ, consumers typically do not manually 
change the mode of operation or settings once a dehumidifier is 
installed. (MIAQ, No. 20 at p. 4)
    DOE agrees that there are differences in operation between 
dehumidifiers and air conditioners. DOE's energy use analysis is based 
on dehumidifier field studies that capture real world dehumidifier 
operation in a variety of different operating conditions. The studies 
used by DOE support MIAQ's assertion that consumers do not manually 
change the mode of operation or settings once the dehumidifier is 
installed.
    MIAQ stated that more than 10 percent of households have more than 
one dehumidifier, which indicates that consumers understand they can 
purchase two smaller capacity units rather than one large capacity 
unit. (MIAQ, No. 20 at p. 4)
    Using RECS 2020, DOE estimates that 10.6 percent of portable 
dehumidifier-owning households own multiple units, similar to the 
estimate provided by MIAQ. DOE adjusted the consumer sample to account 
for households with multiple units using the household weights derived 
by RECS 2020 and the reported number of portable dehumidifiers in each 
household.
    Chapter 7 of the NOPR TSD provides details on DOE's energy use 
analysis for dehumidifiers.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
dehumidifiers. The effect of new or amended energy conservation 
standards on individual consumers usually involves a reduction in 
operating cost and an increase in purchase cost. DOE used the following 
two metrics to measure consumer impacts:
    [squ] 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.
    [squ] 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 dehumidifiers in the absence of 
new or amended energy conservation standards. In contrast, the PBP for 
a given efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for a nationally representative set of U.S. 
households. As stated previously, DOE developed household samples from 
RECS 2020. For each sample household, DOE determined the energy 
consumption for the dehumidifiers and the appropriate energy price. By 
developing a representative sample of households, the analysis captured 
the variability in energy consumption and energy prices associated with 
the use of dehumidifiers.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation to incorporate uncertainty and variability into the 
analysis. The Monte Carlo simulations randomly sample input values from 
the probability distributions and dehumidifier user samples. The model 
calculated the LCC for products at each efficiency level for 10,000 
households per simulation run. The analytical results include a 
distribution of 10,000 data points showing the range of LCC savings for 
a given efficiency level relative to the no-new-standards case 
efficiency distribution. In performing an iteration of the Monte Carlo 
simulation for a given consumer, product efficiency is chosen based on 
its probability. If the chosen product efficiency is greater than or 
equal to the efficiency of the standard level under consideration, the 
LCC calculation reveals that a consumer is not impacted by the standard 
level. By accounting for consumers who already purchase more efficient 
products, DOE avoids overstating the potential benefits from increasing 
product efficiency.
    DOE calculated the LCC and PBP for consumers of dehumidifiers as if 
each were to purchase a new product in the expected year of required 
compliance with new or amended standards. New and amended standards 
would apply to dehumidifiers manufactured 3 years after the date on 
which any new or amended standard is published. (42 U.S.C. 6295 
(m)(4)(A)) At this time, DOE estimates publication of a final rule in 
2025. Therefore, for purposes of its analysis, DOE used 2028 as the 
first year of compliance with any amended standards for dehumidifiers.
    Table IV.3 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in

[[Page 76530]]

chapter 8 of the NOPR TSD and its appendices.

    Table IV.4--Summary of Inputs and Methods for the LCC Analysis *
------------------------------------------------------------------------
            Inputs                           Source/method
------------------------------------------------------------------------
Product Costs................  Derived by multiplying MPCs by
                                manufacturer, retailer, and contractor
                                markups and sales tax, as appropriate.
                                Used historical data to derive a price
                                scaling index to project product costs.
                                Applied price trend to electronic
                                controls used on products with variable-
                                speed blower motors.
Installation Costs...........  Baseline installation cost determined
                                with data from RSMeans. Assumed no
                                change with efficiency level.
Annual Energy Use............  The total annual energy use derived from
                                power demand of each mode multiplied by
                                the hours per year in that mode. Average
                                number of hours based on field data.
                               Variability: Based on RECS 2020.
Energy Prices................  Electricity: Based on Edison Electric
                                Institute data for 2022.
                               Variability: Regional energy prices
                                determined for each census division.
Energy Price Trends..........  Based on AEO2023 electricity price
                                projections from 2022-2050; constant
                                value based on average of price for 2046-
                                2050 thereafter.
Repair and Maintenance Costs.  Assumed no change with efficiency level.
Product Lifetime.............  Weibull probability distribution based on
                                averages provided from manufacturer
                                interviews: 10 years for portable
                                dehumidifiers and 12 years for whole-
                                home dehumidifiers.
Discount Rates...............  Approach involves identifying all
                                possible debt or asset classes that
                                might be used to purchase the considered
                                appliances or that might be affected
                                indirectly. Primary data source was the
                                Federal Reserve Board's Survey of
                                Consumer Finances.
Compliance Date..............  2028.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
  mentioned in this table are provided in the following sections and in
  chapter 8 of the NOPR TSD.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products, because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency products.
    Economic literature and historical data suggest that the real costs 
of many products may trend downward over time according to ``learning'' 
or ``experience'' curves. Experience curve analysis implicitly includes 
factors such as efficiencies in labor, capital investment, automation, 
materials prices, distribution, and economies of scale at an industry-
wide level. DOE developed two types of experience curves to project the 
future dehumidifier prices. One is an overall price trend applied to 
the cost of dehumidifier units excluding the cost of electronic 
controls used for variable-speed blower fans, and the other is a 
separate learning rate associated with the electronic controls used in 
units with variable-speed blower fans. To derive the first type of 
experience curve for portable dehumidifiers, DOE used historical 
Producer Price Index (``PPI'') data between 1983 and 2014 for ``small 
electric household appliances, except fans'' and data from the Bureau 
of Labor Statistics (``BLS'') \28\ between 2014 and 2022 for ``small 
electric household appliances manufacturing'' to construct a combined 
price index that is most representative of portable dehumidifiers. 
Inflation-adjusted price indices were calculated by dividing the PPI 
series by the implicit gross domestic product (``GDP'') price deflator 
for the same years. DOE assembled a time series of annual shipments of 
portable dehumidifiers from AHAM and Appliance Magazine.\29\ For 
efficiency levels that include variable-speed blowers, DOE applied a 
different price trend to the controls portion of the variable-speed 
blowers that contributes to the price increments moving from single-
speed blower to variable-speed blower. DOE used PPI data between 1967 
and 2022 on ``semiconductors and related device manufacturing'' to 
estimate the historic price trend of electronic components in the 
controls. The regression performed as an exponential trend line fit 
results in an R-square of 0.99, with an annual price decline rate of 
6.3 percent. DOE applied the same learning parameters for whole-home 
dehumidifiers. See chapter 8 of the NOPR TSD for further details on 
this topic.
---------------------------------------------------------------------------

    \28\ Product series IDs: PCU33521033521014 and PCU335210335210. 
More information at www.bls.gov/ppi/.
    \29\ Appliance Magazine. Appliance Historical Statistical 
Review: 1954-2012. 2014. UBM Canon.
---------------------------------------------------------------------------

    DOE included the cost to internationally ship and domestically 
transport dehumidifier units to the United States. DOE calculated 
shipping costs for the baseline and for higher efficiency levels that 
have larger product dimensions that increase shipping costs.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. In the June 2022 
Preliminary Analysis, DOE assumed that there were no installation costs 
for portable dehumidifiers given that consumers were directed by 
manufacturer instructions to simply plug them in to a wall outlet for 
operation. For whole-home dehumidifiers, DOE used data from RSMeans' 
2022 Residential Cost Data to estimate installation costs for baseline 
and more efficient units.
    For this NOPR, DOE assumed that whole-home dehumidifier 
installation costs do not increase with efficiency based on feedback 
from manufacturer interviews. DOE used the baseline installation cost 
for all efficiency levels for whole-home dehumidifiers. DOE maintained 
the assumption of no installation costs for portable dehumidifiers.
    DOE seeks available data on installation costs for baseline and 
more efficient units.
3. Annual Energy Consumption
    For each sampled household, DOE determined the energy consumption 
for dehumidifiers at different efficiency levels using the approach 
described

[[Page 76531]]

previously in section IV.E of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 using data from Edison 
Electric Institute (``EEI'') Typical Bills and Average Rates reports. 
Based upon comprehensive, industry-wide surveys, this semi-annual 
report presents typical monthly electric bills and average kilowatt-
hour costs to the customer as charged by investor-owned utilities. For 
the residential sector, DOE calculated electricity prices using the 
methodology described in Coughlin and Beraki (2018).\30\ DOE used the 
EEI data to define a marginal price as the ratio of the change in the 
bill to the change in energy consumption.
---------------------------------------------------------------------------

    \30\ Coughlin, K. and B. Beraki. 2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Laboratory. Berkeley, CA. Report No. LBNL-2001169. 
ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 2022 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO2023, 
which has an end year of 2050.\31\ To estimate energy prices after 
2050, DOE assumed a constant 2050 value for all years.
---------------------------------------------------------------------------

    \31\ EIA. Annual Energy Outlook 2023. Washington, DC. Available 
at www.eia.gov/forecasts/aeo/ (accessed August 21, 2023).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. Typically, 
small incremental increases in product efficiency produce no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products.
    In the June 2022 Preliminary Analysis, DOE assumed that maintenance 
and repair costs would not vary by efficiency level and did not include 
them in the LCC analysis.
    MIAQ stated that, in general, more efficient dehumidifiers are 
typically made with more complex components which potentially increases 
the failure probability and the skill level of the technician required 
to conduct any repairs. (MIAQ, No. 20 at p. 5)
    Feedback from manufacturer interviews (see section IV.J.3 of this 
document) indicated that portable dehumidifiers do not require 
maintenance costs that would change with efficiency and whole-home 
dehumidifier consumers are more likely to replace rather than repair 
their units. Based on this feedback, DOE assumed that portable 
dehumidifier consumers are also more likely to replace a unit rather 
than repair it, similar to whole-home units. For this NOPR analysis, 
DOE did not include maintenance or repair costs for portable or whole-
home dehumidifiers. DOE assumes that filter change frequency and cost 
would not change with efficiency for each product class. DOE notes that 
higher failure rates for units with more complex technology could 
potentially indicate a different lifetime for those units. However, DOE 
is unaware of any data indicating differences in failure rates based on 
the components used in more efficient dehumidifiers.
    DOE seeks comment on the assumption that dehumidifier consumers are 
most likely to replace a broken unit rather than repair it. DOE also 
seeks available data on the filter change and repair frequency and 
costs.
6. Product Lifetime
    In the June 2022 Preliminary Analysis, DOE assumed a lifetime 
distribution with an average age of 11 years for portable 
dehumidifiers, based on the June 2016 Final Rule. 81 FR 38338, 38359. 
In the absence of data specific to whole-home dehumidifiers, DOE 
assumed that whole-home dehumidifiers would have a lifetime 
distribution similar to residential packaged central air conditioners 
that operate in humid climates. For whole-home dehumidifiers, DOE used 
the lifetime distribution with an average lifetime of 18 years from the 
Residential Central Air and Heat Pumps Direct Final Rule, published on 
January 6, 2017. 82 FR 1786.
    MIAQ stated that since dehumidifiers operate under different 
conditions than air conditioning equipment, dehumidifiers may have a 
shorter average lifetime due to increased freeze/thaw cycling, 
corrosion from increased water saturation time, and component failure 
from extreme intake air temperatures. MIAQ suggested a shorter 8- to 
12-year lifetime as more applicable for dehumidifiers due to these 
different conditions. (MIAQ, No. 20 at p. 2)
    For this NOPR analysis, DOE has included the estimates from MIAQ 
and other feedback from manufacturers in its lifetime distributions. 
For portable dehumidifiers, DOE incorporated additional average 
lifetime estimates from manufacturers indicating an average lifetime of 
10 years. A previous estimate of an average lifetime of 12 years from 
the Northeast Energy Star Lighting and Appliance is no longer available 
online and thus not included in the lifetime estimates. For whole-home 
units, as described by MIAQ, dehumidifiers are subject to different 
operating conditions relative to other air conditioning equipment that 
could lead to a different average lifetime. For whole-home 
dehumidifiers, DOE used an average value of 12 years whole-home 
dehumidifiers based on MIAQ's comments.
7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to households to estimate the present value of future operating cost 
savings. DOE estimated a distribution of discount rates for 
dehumidifiers 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.\32\ The LCC analysis estimates net present value over the 
lifetime of the product, so the appropriate discount rate will reflect 
the general opportunity cost of household funds, taking this time scale 
into account. Given the long time horizon modeled in the LCC 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

[[Page 76532]]

aggregate impact of this rebalancing using the historical distribution 
of debts and assets.
---------------------------------------------------------------------------

    \32\ 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 in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's triennial Survey of Consumer Finances 
\33\ (``SCF'') starting in 1995 and ending in 2019. Using the SCF and 
other sources, DOE developed a distribution of rates for each type of 
debt and asset by income group to represent the rates that may apply in 
the year in which amended standards would take effect. DOE assigned 
each sample household a specific discount rate drawn from one of the 
distributions. The average rate across all types of household debt and 
equity and income groups, weighted by the shares of each type, is 4.3 
percent. See chapter 8 of the NOPR TSD for further details on the 
development of consumer discount rates.
---------------------------------------------------------------------------

    \33\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed February 22, 2023).
---------------------------------------------------------------------------

8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    In the June 2022 Preliminary Analysis, DOE used shipments-weighted 
efficiency data submitted by AHAM to estimate the efficiency 
distribution for portable dehumidifiers. DOE used these data in 
conjunction with the model counts from the Compliance Certification 
Database (``CCD'') database to assign market share to efficiency levels 
defined in the June 2022 Preliminary Analysis. DOE assumed an annual 
efficiency improvement of 0.25 percent to develop the efficiency 
distribution in the first year of compliance.
    AHAM stated that model counts based on the CCD database are not an 
accurate proxy to estimate the efficiency distribution for portable 
dehumidifiers. AHAM suggested DOE use shipment-weighted data gathered 
from AHAM members. AHAM also noted that data from AHAM members 
indicated that 100 percent of shipments for Product Class 3 are at the 
baseline efficiency level and the one model in CCD meeting EL 2 is a 
whole-home dehumidifier. (AHAM, No. 22 at p. 7)
    DOE thanks AHAM for providing shipments-weighted distributions and 
has included the data for establishing the efficiency distribution of 
portable dehumidifiers in 2022. DOE notes in response to AHAM's note on 
current market efficiency distribution that the no-new-standards case 
efficiency distribution used in the LCC is the projected efficiency 
distribution in the compliance year (2028) and includes the impact of 
market efficiency trends. For dehumidifiers, the efficiency trend 
employed by DOE is based on historical market trends towards more 
efficient products in response to ENERGY STAR criterion updates. The 
current ENERGY STAR specification 5.0 criterion were adopted in 2019. 
As indicated by ENERGY STAR shipments data, 94 percent of the 
dehumidifier market met ENERGY STAR levels in 2021, compared to 88 
percent in 2020 and 80 percent in 2019. On October 10, 2023, EPA 
released the final recognition criteria for ENERGY STAR Most Efficient 
2024, which meet or exceed the proposed standards in all product 
classes.\34\ The expected publication of ENERGY STAR specification 6.0 
for dehumidifiers in 2024 will likely continue to shift the 
dehumidifier market toward more efficient products in the absence of a 
standard. To account for this observed historical trend towards a 
higher average market efficiency in the absence of a new standard, DOE 
included an annual improvement of 0.25 percent in the average shipment-
weighted IEF, based on trends observed for room air conditioners \35\ 
and also used in the June 2016 Final Rule for dehumidifiers. For whole-
home dehumidifiers, in the absence of shipments-weighted data, DOE has 
maintained the approach of using model counts from the CCD database for 
the estimation of efficiency distributions and included an annual 
improvement of 0.25 percent in average shipment-weighted IEF for the 
no-new-standards case.
---------------------------------------------------------------------------

    \34\ Available at https://www.energystar.gov/sites/default/files/asset/document/Dehumidifiers%20ENERGY%20STAR%20Most%20Efficient%202024%20Final%20Criteria.pdf.
    \35\ Ganeshalingam, M., Ni, C., and Yang, H-C. 2021. A 
Retrospective Analysis of the 2011 Direct Final Rule for Room Air 
Conditioners. Lawrence Berkeley National Laboratory. LBNL-2001413.
---------------------------------------------------------------------------

    DOE seeks data and comment on its efficiency distribution estimate 
and the assumption of an annual efficiency improvement of 0.25 percent 
and the expected market respond to updated ENERGY STAR 6.0 
specifications.
    The estimated market shares for the no-new-standards case for 
dehumidifiers in 2028 are shown in Tables IV.4 and IV.5. See chapter 8 
of the NOPR TSD for further information on the derivation of the 
efficiency distributions.

                   Table IV.5--Market Share of Each Efficiency Level for Portable Dehumidifiers for the No-New-Standards Case in 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Product class                              <=25.00 pints/day             25.01-50.00 pints/day             >=50.01 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Product class market share                              19.5%                           77.9%                           1.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Integrated                      Integrated                      Integrated
                           EL                              energy factor   Market share    energy factor   Market share    energy factor   Market share
                                                              (L/kWh)           (%)           (L/kWh)           (%)           (L/kWh)           (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................            1.30               0            1.60               0            2.80              86
1.......................................................            1.40              25            1.70               0            3.10              14
2.......................................................            1.57              66            1.80              87            3.30               0
3.......................................................            1.70               9            2.01              13            3.51               0
4.......................................................            1.94               0            2.07               0            3.67               0
5.......................................................            2.32               0            2.38               0  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 76533]]


 Table IV.6--Market Share of Each Efficiency Level for Whole-Home Dehumidifiers for the No-New-Standards Case in
                                                      2028
----------------------------------------------------------------------------------------------------------------
                  Product class                       <=8.0 cu ft case volume         >8.0 cu ft case volume
----------------------------------------------------------------------------------------------------------------
           Product class market share                          1.2%                            0.3%
----------------------------------------------------------------------------------------------------------------
                                                    Integrated                      Integrated
                       EL                          energy factor   Market share    energy factor   Market share
                                                      (L/kWh)           (%)           (L/kWh)           (%)
----------------------------------------------------------------------------------------------------------------
0...............................................            1.77               8            2.41              54
1...............................................            2.09              14            2.70              46
2...............................................            2.22              74            3.30               0
3...............................................            2.39               4            3.81               0
4...............................................  ..............  ..............            4.17               0
----------------------------------------------------------------------------------------------------------------

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the dehumidifiers 
purchased by each sample household in the no-new-standards case. The 
resulting percent shares within the sample match the market shares in 
the efficiency distributions.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more 
efficient products, compared to baseline products, through energy cost 
savings. Payback periods that exceed the life of the product mean that 
the increased total installed cost is not recovered in reduced 
operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the product and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing a product complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE 
determined the value of the first year's energy savings by calculating 
the energy savings in accordance with the applicable DOE test 
procedure, and multiplying those savings by the average energy price 
projection for the year in which compliance with the amended standards 
would be required.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\36\ 
The shipments model takes an accounting approach, tracking market 
shares of each product class and the vintage of units in the stock. 
Stock accounting uses product shipments as inputs to estimate the age 
distribution of in-service product stocks for all years. The age 
distribution of in-service product stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \36\ 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.
---------------------------------------------------------------------------

    DOE's stock accounting model is calibrated based on historical 
shipments for portable and whole-home dehumidifiers. In the June 2022 
Preliminary Analysis, DOE used historical shipments provided by AHAM 
for portable dehumidifiers and assumed that whole-home dehumidifiers 
accounted for 1 percent of total dehumidifier shipments. In this NOPR 
analysis, DOE included 2022 shipments estimates for whole-home 
dehumidifiers based on feedback from manufacturers indicating whole-
home dehumidifiers shipments account for 1.6 percent of the total 
dehumidifier market.
    DOE's shipments model for dehumidifiers considers shipments to 
replace existing units and to first-time owners. To determine 
replacement shipments, DOE used survival probability distributions 
based on average lifetime estimates of 10 years for portable 
dehumidifiers and 12 years for whole-home dehumidifiers provided by 
manufacturers. To estimate shipments to first-time owners, DOE used 
projections of AEO2023 housing stock coupled with the historical 
shipments data. DOE's shipments projections include shipments 
reductions due to consumers that do not replace a failed unit.
    DOE considers the impacts on shipments from changes in product 
purchase price associated with higher energy efficiency levels using a 
price elasticity. As in the June 2022 Preliminary Analysis, DOE employs 
a price elasticity of -0.45 in its shipments model. These values are 
based on analysis of aggregated data for five residential 
appliances.\37\ The market impact is defined as the difference between 
the product of price elasticity of demand and the change in price due 
to a standard level.
---------------------------------------------------------------------------

    \37\ Fujita, K. (2015) Estimating Price Elasticity using Market-
Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL-
188289.
---------------------------------------------------------------------------

    When comparing the first cost of the efficiency level selected for 
PC1 and PC2 at each TSL, DOE considers that the difference of installed 
cost in standards case is not significant enough to warrant a product 
switching scenario that would result in a different market share 
distribution from the no-new-standards case. Given the small overall 
market share of PC3, DOE did not include a product switching scenario 
in the analysis. DOE assumed that consumers are unlikely to purchase 
multiple lower capacity units in place of a larger capacity unit as a 
result of a standard.
    DOE seeks comment on the assumption that dehumidifier consumers' 
purchase decision are unlikely to change as a result of a standard.

H. National Impact Analysis

    The NIA assesses the national energy savings (``NES'') and the NPV 
from a national perspective of total consumer costs and savings that 
would be expected to result from new or amended

[[Page 76534]]

standards at specific efficiency levels.\38\ (``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 dehumidifiers sold from 2028 through 
2057.
---------------------------------------------------------------------------

    \38\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
product class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each product class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of products with efficiencies greater than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV.6 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

    Table IV.7--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
                 Inputs                               Method
------------------------------------------------------------------------
Shipments..............................  Annual shipments from shipments
                                          model.
Compliance Date of Standard............  2028.
Efficiency Trends......................  No-new-standards case: 0.25
                                          percent annual increase in
                                          efficiency.
                                         Standards cases: Roll-up in
                                          compliance year to meet
                                          potential efficiency level.
Annual Energy Consumption per Unit.....  Annual weighted-average values
                                          are a function of energy use
                                          at each TSL.
Total Installed Cost per Unit..........  Annual weighted-average values
                                          are a function of cost at each
                                          TSL.
                                         Incorporates projection of
                                          future product prices based on
                                          historical data.
Annual Energy Cost per Unit............  Annual weighted-average values
                                          as a function of the annual
                                          energy consumption per unit
                                          and energy prices.
Repair and Maintenance Cost per Unit...  Annual values do not change
                                          with efficiency level.
Energy Price Trends....................  AEO2023 projections to 2050 and
                                          constant 2050 value
                                          thereafter.
Energy Site-to-Primary and FFC           A time-series conversion factor
 Conversion.                              based on AEO2023.
Discount Rate..........................  3 percent and 7 percent.
Present Year...........................  2023.
------------------------------------------------------------------------

1. Product Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. DOE developed an energy efficiency distribution for the no-new-
standards case (which yields a shipment-weighted average efficiency) 
for each of the considered product classes for the year of anticipated 
compliance with an amended or new standard. As described in section 
IV.F.8 of this document, the efficiency trend used in the no-new-
standards case is based on historical market trends towards more 
efficient product in response to ENERGY STAR specifications. To account 
for the historical movement towards more efficient products in the 
market in the absence of a standard, DOE included an annual improvement 
of 0.25 percent in the average shipment-weighted IEF in each year of 
the analysis period shipments projection in the no-new-standards case. 
The approach is further described in chapter 10 of the NOPR TSD
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2028). In this scenario, the market 
shares of products in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered products between each TSL 
and the case with no new or amended energy conservation standards. DOE 
calculated the national energy consumption by multiplying the number of 
units (stock) of each product (by vintage or age) by the unit energy 
consumption (also by vintage). DOE calculated annual NES based on the 
difference in national energy consumption for the no-new standards case 
and for each higher efficiency standard case. DOE estimated energy 
consumption and savings based on site energy and converted the 
electricity consumption and savings to primary energy (i.e., the energy 
consumed by power plants to generate site electricity) using annual 
conversion factors derived from AEO 2023. Cumulative energy savings are 
the sum of the NES for each year over the timeframe of the analysis.
    Use of higher-efficiency products is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency. DOE did not find any 
data on the rebound effect specific to dehumidifiers and assumed no 
rebound in the NOPR analysis.

[[Page 76535]]

    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011, notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \39\ 
that EIA uses to prepare its Annual Energy Outlook. 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 is 
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------

    \39\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2018, DOE/EIA-0581(2018), April 2019. 
Available at https://www.eia.gov/outlooks/aeo/nems/overview/pdf/0581(2018).pdf (last accessed February 22, 2023).
---------------------------------------------------------------------------

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.
    As discussed in section IV.F.1 of this document, DOE developed 
dehumidifier price trends based on historical PPI data. DOE applied the 
same trends to project prices for each product class at each considered 
efficiency level. By 2057, which is the end date of the projection 
period, the average dehumidifier price is projected to drop 25 percent 
relative to 2028. DOE's projection of product prices is described in 
appendix 10C of the NOPR TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
projections on the consumer NPV for the considered TSLs for 
dehumidifiers. In addition to the default price trend, DOE considered 
two product price sensitivity cases: (1) a high price decline case and 
(2) a low price decline case. In the high price decline case, DOE used 
a faster price decline for the non-controls portion of the price 
derived from the same combined price index PPI data for dehumidifiers 
between 2005 and 2022. In the low price decline case, DOE used the same 
combined price index PPI data for dehumidifiers between 1983 and 1998. 
For both high and low price decline cases, DOE used the default price 
decline for variable-speed blower controls. The derivation of these 
price trends and the results of these sensitivity cases are described 
in appendix 10C of the NOPR TSD.
    The energy cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from 
AEO2023, which has an end year of 2050. To estimate price trends after 
2050, the 2050 value was used for all years. As part of the NIA, DOE 
also analyzed scenarios that used inputs from variants of the AEO2023 
Reference case that have lower and higher economic growth. Those cases 
have lower and higher energy price trends compared to the Reference 
case. NIA results based on these cases are presented in appendix 10C of 
the NOPR TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\40\ 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.
---------------------------------------------------------------------------

    \40\ 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.
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels. For this NOPR, DOE analyzed 
the impacts of the considered standard levels on two subgroups: (1) 
low-income households and (2) senior-only households. The analysis used 
subsets of the RECS 2020 sample composed of households that meet the 
criteria for the two subgroups. DOE used the LCC and PBP spreadsheet 
model to estimate the impacts of the considered efficiency levels on 
these subgroups. Chapter 11 in the NOPR TSD describes the consumer 
subgroup analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of amended 
energy conservation standards on manufacturers of dehumidifiers and to 
estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (R&D) and manufacturing 
capital, and domestic manufacturing employment. Additionally, the MIA 
seeks to determine how amended energy conservation standards might 
affect manufacturing employment, capacity, and competition, as well as 
how standards contribute to overall regulatory burden. Finally, the MIA 
serves to identify any disproportionate impacts on manufacturer 
subgroups, including small business manufacturers.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this proposed 
rulemaking.

[[Page 76536]]

The key GRIM inputs include data on the industry cost structure, unit 
production costs, product shipments, manufacturer markups, and 
investments in R&D and manufacturing capital required to produce 
compliant products. The key GRIM outputs are the INPV, which is the sum 
of industry annual cash flows over the analysis period, discounted 
using the industry-weighted average cost of capital, and the impact to 
domestic manufacturing employment. The model uses standard accounting 
principles to estimate the impacts of more-stringent energy 
conservation standards on a given industry by comparing changes in INPV 
and domestic manufacturing employment between a no-new-standards case 
and the various standards cases (i.e., TSLs). To capture the 
uncertainty relating to manufacturer pricing strategies following 
amended standards, the GRIM estimates a range of possible impacts under 
different manufacturer markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the NOPR TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the dehumidifier manufacturing 
industry based on the market and technology assessment, preliminary 
manufacturer interviews, and publicly available information. This 
included a top-down analysis of dehumidifier manufacturers that DOE 
used to derive preliminary financial inputs for the GRIM (e.g., 
revenues; materials, labor, overhead, and depreciation expenses; 
selling, general, and administrative expenses (SG&A); and R&D 
expenses). DOE also used public sources of information to further 
calibrate its initial characterization of the dehumidifier 
manufacturing industry, including corporate annual reports, the U.S. 
Census Bureau's Annual Survey of Manufactures (ASM),\41\ and reports 
from Dun & Bradstreet.\42\
---------------------------------------------------------------------------

    \41\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S 
(2021).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed March 3, 2023).
    \42\ The Dun & Bradstreet Hoovers login is available at: 
app.dnbhoovers.com (last accessed March 3, 2023).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of amended energy 
conservation standards. The GRIM uses several factors to determine a 
series of annual cash flows starting with the announcement of the 
standard and extending over a 30-year period following the compliance 
date of the standard. These factors include annual expected revenues, 
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. 
In general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of dehumidifiers in order to develop other 
key GRIM inputs, including product and capital conversion costs, and to 
gather additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.3 of this document for a 
description of the key issues raised by manufacturers during the 
interviews. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by amended 
standards or that may not be accurately represented by the average cost 
assumptions used to develop the industry cash flow analysis. Such 
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers, niche players, and/or manufacturers exhibiting a 
cost structure that largely differs from the industry average. DOE 
identified one subgroup for a separate impact analysis: small business 
manufacturers. The small business subgroup is discussed in section VI.B 
of this document, ``Review under the Regulatory Flexibility Act'' and 
in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to 
amended standards that result in a higher or lower industry value. The 
GRIM uses a standard, annual discounted cash-flow analysis that 
incorporates manufacturer costs, markups, shipments, and industry 
financial information as inputs. The GRIM models changes in costs, 
distribution of shipments, investments, and manufacturer margins that 
could result from an amended energy conservation standard. The GRIM 
spreadsheet uses the inputs to arrive at a series of annual cash flows, 
beginning in 2023 (the base year of the analysis) and continuing to 
2057. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For manufacturers of dehumidifiers, DOE 
used a real discount rate of 8.4 percent, which was derived from 
industry financials and then modified according to feedback received 
during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the 
amended energy conservation standard on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis, and information gathered from industry stakeholders during 
the course of manufacturer interviews. The GRIM results are presented 
in section V.B.2 of this document. Additional details about the GRIM, 
the discount rate, and other financial parameters can be found in 
chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered products can affect the revenues, 
gross margins, and cash flow of the industry.
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). In this proposed rulemaking, DOE relied on 
a combination of the efficiency-level approach and the design-option

[[Page 76537]]

approach to develop cost estimates at each efficiency level for 
dehumidifiers, structured around the reverse engineering approach. The 
analysis involved reviewing publicly available cost and performance 
information, physically disassembling commercially available products 
and modeling equipment cost while removing costs associated with non-
efficiency related components or features. DOE then considered the 
incremental steps manufacturers may take to reach higher efficiency 
levels. In its modeling, DOE started with the baseline MPC and added 
the expected design options at each higher efficiency level to estimate 
incremental MPCs. For a complete description of the MPCs, see section 
IV.C of this document or chapter 5 of the NOPR TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency distributions 
over time can significantly affect manufacturer finances. For this 
analysis, the GRIM uses the NIA's annual shipment projections derived 
from the shipments analysis from 2023 (the base year) to 2057 (the end 
year of the analysis period). The shipments model takes an accounting 
approach, tracking market shares of each product class and the vintage 
of units in the stock. Stock accounting uses product shipments as 
inputs to estimate the age distribution of in-service product stocks 
for all years. DOE's stock accounting model is calibrated based on 
historical shipments for portable and whole-home dehumidifiers. See 
section IV.G of this document or chapter 9 of the NOPR TSD for 
additional details.
c. Capital and Product Conversion Costs
    Amended energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each product class. For the MIA, 
DOE classified these conversion costs into two major groups: (1) 
capital conversion costs; and (2) product conversion costs. Capital 
conversion costs are investments in property, plant, and equipment 
necessary to adapt or change existing production facilities such that 
new compliant product designs can be fabricated and assembled. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make product 
designs comply with amended energy conservation standards.
    DOE relied on feedback from manufacturer interviews and information 
from the product teardown and engineering analyses to estimate the 
capital investment required at each analyzed efficiency level. DOE 
asked manufacturers to estimate the capital conversion costs (e.g., 
changes in production processes, equipment, and tooling) to implement 
the various design options. The data generated from the product 
teardown and engineering analyses were used to estimate the capital 
investment in equipment and tooling required of OEMs at each efficiency 
level, considering such factors as product design, raw materials, 
purchased components, and fabrication method. Changes in equipment and 
tooling were used to estimate capital conversion costs.
    DOE relied on feedback from manufacturer interviews, the 
engineering analysis, and model counts from DOE's Compliance 
Certification Database (CCD) to evaluate the product conversion costs 
industry would likely incur at the considered standard levels. In 
interviews, DOE asked manufacturers to estimate the redesign effort and 
engineering resources required at various efficiency levels to quantify 
the product conversion costs. DOE integrated feedback from 
manufacturers on redesign effort and staffing to estimate product 
conversion cost. Manufacturer numbers were aggregated to protect 
confidential information. DOE used model counts to scale the feedback 
gathered in interviews to the overall dehumidifier industry.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in section V.B.2 of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the NOPR TSD.
d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs 
estimated in the engineering analysis for each product class and 
efficiency level. Modifying these manufacturer markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case scenarios to represent uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of amended energy 
conservation standards: (1) a preservation of gross margin percentage 
scenario; and (2) a preservation of operating profit scenario. These 
scenarios lead to different manufacturer markup values that, when 
applied to the MPCs, result in varying revenue and cash flow impacts.
    Under the preservation of gross margin percentage scenario, DOE 
applied a single uniform ``gross margin percentage'' markup across all 
efficiency levels, which assumes that manufacturers would be able to 
maintain the same amount of profit as a percentage of revenues at all 
efficiency levels within a product class. As manufacturer production 
costs increase with efficiency, this scenario implies that the per-unit 
dollar profit will increase. DOE assumed a gross margin percentage of 
29 percent for all product classes.\43\ Manufacturers tend to believe 
it is optimistic to assume that they would be able to maintain the same 
gross margin percentage as their production costs increase, 
particularly for minimally efficient products. Therefore, this scenario 
represents an upper bound of industry profitability under an amended 
energy conservation standard.
---------------------------------------------------------------------------

    \43\ The gross margin percentage of 29 percent is based on a 
manufacturer markup of 1.40.
---------------------------------------------------------------------------

    In the preservation of operating profit scenario, as the cost of 
production goes up under a standards case, manufacturers are generally 
required to reduce their manufacturer markups to a level that maintains 
base-case operating profit. DOE implemented this scenario in the GRIM 
by lowering the manufacturer markups at each TSL to yield approximately 
the same earnings before interest and taxes in the standards case as in 
the no-new-standards case in the year after the expected compliance 
date of the amended standards. The implicit assumption behind this 
scenario is that the industry can only maintain its operating profit in 
absolute dollars after the standard takes effect.
    A comparison of industry financial impacts under the two markup 
scenarios is presented in section V.B.2.a of this document.

[[Page 76538]]

3. Manufacturer Interviews
    DOE interviewed manufacturers representing approximately 52 percent 
of industry shipments. Participants included both foreign and domestic 
OEMs with varying market shares and product class offerings.
    In interviews, DOE asked manufacturers to describe their major 
concerns regarding potential more stringent energy conservation 
standards for dehumidifiers. The following section highlights 
manufacturer concerns that helped inform the projected potential 
impacts of an amended standard on the industry. Manufacturer interviews 
are conducted under non-disclosure agreements (NDAs), so DOE does not 
document these discussions in the same way that it does public comments 
in the comment summaries and DOE's responses throughout the rest of 
this document.
a. Increases in Chassis Size
    In interviews, manufacturers expressed concern about efficiency 
levels that would necessitate increasing the chassis size to 
accommodate larger heat exchangers. First, these manufacturers stated 
that increasing the chassis size would require significant capital 
investment and engineering time to fully redesign their portfolio of 
dehumidifier models. Second, manufacturers stated that increasing the 
chassis size would add significant product costs, which would likely 
lead to lower sales volumes if consumers are not willing to pay for the 
higher upfront cost. Third, manufacturers of portable dehumidifiers 
with overseas production facilities expressed concern that increasing 
the chassis or cabinet size would negatively impact the loading 
capacity of the shipping container and increase shipping costs. 
Finally, some portable dehumidifier manufacturers expressed concern 
that the 3-year compliance period would be insufficient to develop 
cost-optimized models with new chassis designs to accommodate larger 
heat exchangers across their entire product portfolio.
b. Refrigerant Regulation
    In interviews, manufacturers noted that new refrigerant regulations 
restrict the use of high-global warming potential (GWP) refrigerants in 
dehumidifiers, which increases cumulative regulatory burden. 
Specifically, during interviews, manufacturers discussed State 
regulations, such as CARB's rulemaking prohibiting the use of 
refrigerants with a GWP of 750 or greater starting January 1, 2023 for 
self-contained, residential dehumidifiers and starting January 1, 2025 
for whole-home dehumidifiers.^{44 45} Most manufacturers of 
portable dehumidifiers noted that they would likely transition to R-32, 
which is a classified as a flammable refrigerant.\46\ A whole-home 
manufacturer expressed uncertainty about the choice of low-GWP 
refrigerants but noted that the various alternative refrigerant options 
being considered are also classified as flammable refrigerants. All 
manufacturers interviewed stated that transitioning to a low-GWP 
refrigerant requires notable engineering time and capital investment to 
update production facilities to accommodate flammable refrigerants. 
Some portable dehumidifier manufacturers with experience transitioning 
other products (e.g., portable air conditioners) to make use of R-32 
stated that the dehumidifier transition would be relatively 
straightforward given their prior experience with R-32. In interviews, 
manufacturers indicated that they had already started the development 
process but were waiting on EPA to finalize its SNAP proposed rule 
before starting production of dehumidifiers with low-GWP refrigerants. 
EPA has since finalized the SNAP rule allowing for the use of R-32. See 
88 FR 26382.
---------------------------------------------------------------------------

    \44\ State of California Air Resource Board, ``Prohibitions on 
Use of Certain Hydrofluorocarbons in Stationary Refrigeration, 
Chillers, Aerosols-Propellants, and Foam End-Uses Regulation.'' 
Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/frorevised.pdf (last accessed March 
4, 2023).
    \45\ In a public hearing to consider the proposed amendments to 
the Prohibitions on the Use of Certain Hydrofluorocarbons in 
Stationary Refrigeration, Chillers, Aerosols-Propellants, and Foam 
End-Uses regulation, CARB stated that a whole home dehumidifier 
would be regulated as ``Other Air-Conditioning Equipment'' with a 
regulation effective date of January 1, 2025, and not as a 
``Residential Dehumidifier,'' which is both self-contained and 
portable. Public hearing date December 10, 2020. Agenda item number: 
20-13-4. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/fsorrevised.pdf (last accessed March 4, 2023).
    \46\ R-32 is classified as an A2L refrigerant. The A2L class 
defines refrigerants that are nontoxic, but mildly flammable.
---------------------------------------------------------------------------

4. Discussion of MIA Comments
    In response to the June 2022 Preliminary Analysis, AHAM requested 
that DOE consider the impacts of tariffs on manufacturers, noting that 
manufacturers currently pay an additional 25 percent tariff under the 
China Section 301 tariffs for importing dehumidifiers on top of 
existing excise taxes and tariffs. According to AHAM, shipping costs 
are also impacted due to the shortage in shipping containers and lack 
of availability of transport to deliver manufactured products. (AHAM, 
No. 22 at pp. 3-4)
    Based on information from manufacturer interviews and a review of 
model listings from DOE's CCD, DOE assumes nearly all portable units 
with 25.00 pints/day or less (Product Class 1) and portable units with 
25.01 to 50.00 pints/day (Product Class 2) are manufactured in Asia. 
DOE also assumes that 50 percent of portable units greater than 50.00 
pints/day (Product Class 3) and 20 percent of whole-home units (Product 
Classes 4 and 5) are manufactured in Asia. Regarding U.S. tariffs on 
Chinese imports, DOE is aware that the Section 301 tariffs on 
dehumidifiers increased to 10 percent in September 2018 and to 25 
percent in May 2019. As result of tariffs, DOE expects that 
manufactures will begin to shift production of these products to 
countries in East Asia and Southeast Asia not subject to Section 301 
tariffs. However, due to uncertainty about the exact countries of 
origin, DOE's engineering analysis continues to rely on data based on a 
Chinese point of origin. To revise MPCs to account for points of origin 
outside of China, DOE would require information on the countries of 
manufacture and 5-year averages for key inputs used to develop 
manufacturer production costs, such as fully-burdened production labor 
wage rates and local raw material prices.
    To better model the impact of Section 301 tariffs on dehumidifiers 
that continue to be manufactured in China, DOE requires additional 
information about the portion of products still manufactured there and 
how the tariffs are absorbed by the entities along the room AC value 
chain, such as the foreign OEMs, U.S. importers, retailers, and 
consumers. Increases in retail price may affect consumer purchasing 
decisions, as captured by the price sensitivity modeled in the 
shipments analysis. Furthermore, DOE considers the costs of overseas 
and domestic shipping in its calculation of consumer price used in the 
LCC and PBP analyses.
    AHAM stated that manufacturers will face significant retooling and 
redesign costs if existing chassis sizes are insufficient to implement 
the technology options specified in the June 2022 Preliminary Analysis. 
(AHAM, No. 22 at p. 3)
    DOE used results of the product teardown and engineering analyses 
as well as feedback from confidential manufacturer interviews to 
estimate the capital and product conversion costs required to reach 
each analyzed efficiency level, which included design options that 
would require a change in chassis size. See section IV.J.2.c of this 
document for a discussion on the conversion cost methodology and

[[Page 76539]]

section V.B.2.a of this document for a description of conversion costs 
by TSL.
    MIAQ stated that in addition to small business manufacturers, 
refrigerant desiccant dehumidifier manufacturers could also be 
disproportionally affected by amended energy conservation standards for 
dehumidifiers. (MIAQ, No. 20 at pp. 5-6)
    At the time of this NOPR analysis, DOE is not aware of any consumer 
refrigerant desiccant dehumidifiers currently available on the market. 
However, DOE tentatively expects that manufacturers of refrigerant 
desiccant dehumidifiers would follow a similar design path as pure 
refrigerant-based whole-home dehumidifiers if they were to introduce 
new models of consumer refrigerant desiccant dehumidifiers to the 
market. Thus, DOE tentatively determined that the industry analysis 
reasonably represents the potential impacts to refrigerant desiccant 
dehumidifier manufacturers.
    DOE requests comment on its tentative conclusion that refrigerant 
desiccant dehumidifier manufacturers would be similarly impacted by 
potential amended standards and therefore would not warrant a separate 
subgroup analysis.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions to emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions factors intended 
to represent the marginal impacts of the change in electricity 
consumption associated with amended or new standards. The methodology 
is based on results published for the AEO, including a set of side 
cases that implement a variety of efficiency-related policies. The 
methodology is described in appendix 13A in the NOPR TSD. The analysis 
presented in this document uses projections from AEO2023. Power sector 
emissions of CH4 and N2O from fuel combustion are 
estimated using Emission Factors for Greenhouse Gas Inventories 
published by the Environmental Protection Agency (EPA).\47\ FFC 
upstream emissions, which include emissions from fuel combustion during 
extraction, processing, and transportation of fuels, and ``fugitive'' 
emissions (direct leakage to the atmosphere) of CH4 and 
CO2, are estimated based on the methodology described in 
chapter 15 of the NOPR TSD.
---------------------------------------------------------------------------

    \47\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    The emissions intensity factors are expressed in terms of physical 
units per megawatt hour (MWh) or metric million British thermal unit 
MMBtu of site energy savings. For power sector emissions, specific 
emissions intensity factors are calculated by sector and end use. Total 
emissions reductions are estimated using the energy savings calculated 
in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the emissions control programs discussed in the following 
paragraphs and the Inflation Reduction Act.\48\
---------------------------------------------------------------------------

    \48\ For further information, see the Assumptions to AEO2023 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook 2023. Available at 
www.eia.gov/outlooks/aeo/assumptions/ (last accessed August 21, 
2023).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
States to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\49\ The AEO 
incorporates implementation of CSAPR, including the update to the CSAPR 
ozone season program emission budgets and target dates issued in 2016. 
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among 
EGUs and is enforced through the use of tradable emissions allowances. 
Under existing EPA regulations, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \49\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (PM2.5) pollution, in order to 
address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program. 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants. 77 FR 9304 (Feb. 16, 2012). Because of the emissions 
reductions under the MATS, it is unlikely that excess SO2 
emissions allowances resulting from the lower electricity demand would 
be needed or used to permit offsetting increases in SO2 
emissions by another regulated EGU. Therefore, energy conservation 
standards that decrease electricity generation would generally reduce 
SO2 emissions. DOE estimated SO2 emissions 
reduction using emissions factors based on AEO2023.
    CSAPR also established limits on NOX emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those States covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such case, NOX 
emissions would remain near the limit even if electricity generation 
goes down. A different case could possibly result, depending on the 
configuration of the power sector in the different regions and the need 
for allowances, such that NOX emissions might not remain at 
the limit in the case of lower electricity demand. In this case, energy 
conservation standards might reduce NOX emissions in covered 
States. Despite this possibility, DOE has chosen to be conservative in 
its analysis and has maintained the assumption that standards will not 
reduce NOX emissions in States covered by CSAPR. Energy 
conservation standards would be expected to reduce NOX 
emissions in the States not covered by CSAPR. DOE used AEO2023 data to 
derive NOX

[[Page 76540]]

emissions factors for the group of States not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this proposed rule, for the purpose 
of complying with the requirements of Executive Order (``E.O.'') 12866, 
DOE considered the estimated monetary benefits from the reduced 
emissions of CO2, CH4, N2O, 
NOX, and SO2 that are expected to result from 
each of the TSLs considered. In order to make this calculation 
analogous to the calculation of the NPV of consumer benefit, DOE 
considered the reduced emissions expected to result over the lifetime 
of products shipped in the projection period for each TSL. This section 
summarizes the basis for the values used for monetizing the emissions 
benefits and presents the values considered in this NOPR.
    To monetize the benefits of reducing GHG emissions this analysis 
uses the interim estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the 
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
    DOE requests comment on how to address the climate benefits and 
other effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the social cost (``SC'') of each pollutant (e.g., SC-
CO2). These estimates represent the monetary value of the 
net harm to society associated with a marginal increase in emissions of 
these pollutants in a given year, or the benefit of avoiding that 
increase. These estimates are intended to include (but are not limited 
to) climate change-related changes in net agricultural productivity, 
human health, property damages from increased flood risk, disruption of 
energy systems, risk of conflict, environmental migration, and the 
value of ecosystem services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable executive orders, and DOE would 
reach the same conclusion presented in this proposed rulemaking in the 
absence of the social cost of greenhouse gases. That is, the social 
costs of greenhouse gases, whether measured using the February 2021 
interim estimates presented by the Interagency Working Group on the 
Social Cost of Greenhouse Gases or by another means, did not affect the 
rule ultimately proposed by DOE.
    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions (i.e., SC-GHGs) using the 
estimates presented in the Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under E.O. 13990, 
published in February 2021 by the IWG (``February 2021 SC-GHG TSD''). 
The SC-GHGs is the monetary value of the net harm to society associated 
with a marginal increase in emissions in a given year, or the benefit 
of avoiding that increase. In principle, SC-GHGs includes the value of 
all climate change impacts, including (but not limited to) changes in 
net agricultural productivity, human health effects, property damage 
from increased flood risk and natural disasters, disruption of energy 
systems, risk of conflict, environmental migration, and the value of 
ecosystem services. The SC-GHGs therefore reflects the societal value 
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting 
benefit-cost analyses of policies that affect CO2, 
N2O, and CH4 emissions. As a member of the IWG 
involved in the development of the February 2021 SC-GHG TSD, DOE agrees 
that the interim SC-GHG estimates represent the most appropriate 
estimate of the SC-GHG until revised estimates have been developed 
reflecting the latest peer-reviewed science.
    The SC-GHG estimates presented in this NOPR were developed over 
many years using a transparent process, the best science available at 
the time of that process, peer-reviewed methodologies, and input from 
the public. Specifically, in 2009, the IWG--which included the DOE and 
other executive branch agencies and offices--was established to ensure 
that agencies were using the best available science and to promote 
consistency in the social cost of carbon (``SC-CO2'') values 
used across agencies. The IWG published SC-CO2 estimates in 
2010 that were developed from an ensemble of three widely cited 
integrated assessment models (``IAMs'') that estimate global climate 
damages using highly aggregated representations of climate processes 
and the global economy combined into a single modeling framework. The 
three IAMs were run using a common set of input assumptions in each 
model for future population, economic, and CO2 emissions 
growth, as well as equilibrium climate sensitivity--a measure of the 
globally averaged temperature response to increased atmospheric 
CO2 concentrations. These estimates were updated in 2013 
based on new versions of each IAM. In August 2016, the IWG published 
estimates of the social cost of methane (``SC-CH4'') and 
nitrous oxide (``SC-N2O'') using methodologies that are 
consistent with the methodology underlying the SC-CO2 
estimates. The modeling approach that extends the IWG SC-CO2 
methodology to non-CO2 GHGs has undergone multiple stages of 
peer review. The SC-CH4 and SC-N2O estimates were 
developed by Marten et al.\50\ and underwent a standard double-blind 
peer review process prior to journal publication. In 2015, as part of 
the response to public comments received to a 2013 solicitation for 
comments on the SC-CO2 estimates, the IWG announced a 
National Academies of Sciences, Engineering, and Medicine (``National 
Academies'') review of the SC-CO2 estimates to offer advice 
on how to approach future updates to ensure that the estimates continue 
to reflect the best available science and methodologies. In January 
2017, the National Academies released their final report, Valuing 
Climate Damages: Updating Estimation of the Social Cost of Carbon 
Dioxide, and recommended specific criteria for future updates to the 
SC-CO2 estimates, a modeling framework to satisfy the 
specified criteria, and both near-term updates and longer-term research 
needs pertaining to various components of the estimation process.\51\ 
Shortly thereafter, in March 2017, President Trump issued E.O. 13783, 
which disbanded the IWG, withdrew the previous TSDs, and directed 
agencies to ensure SC-CO2 estimates used in regulatory 
analyses are consistent with the guidance contained in OMB's Circular 
A-4, ``including with respect to the consideration of domestic versus 
international impacts and the consideration of appropriate discount

[[Page 76541]]

rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses following 
E.O. 13783 used SC-GHG estimates that attempted to focus on the U.S.-
specific share of climate change damages as estimated by the models and 
were calculated using two discount rates recommended by Circular A-4: 
3-percent and 7-percent. All other methodological decisions and model 
versions used in SC-GHG calculations remained the same as those used by 
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \50\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O 
mitigation benefits consistent with the US Government's SC-
CO2 estimates. Climate Policy. 2015. 15(2): pp. 272-298.
    \51\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued E.O. 13990, which re-
established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations in the National Academies 2017 report. The IWG was 
tasked with first reviewing the SC-GHG estimates currently used in 
Federal analyses and publishing interim estimates within 30 days of the 
E.O. that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller 
update of the SC-GHG estimates that takes into consideration the advice 
of the National Academies 2017 report and other recent scientific 
literature. The February 2021 SC-GHG TSD provides a complete discussion 
of the IWG's initial review conducted under E.O. 13990. In particular, 
the IWG found that the SC-GHG estimates used under E.O. 13783 fail to 
reflect the full impact of GHG emissions in multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad, supply chains, U.S. military 
assets and interests abroad, and tourism, and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of 
damages. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this proposed rule DOE centers attention on a global 
measure of SC-GHG. This approach is the same as that taken in DOE 
regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 TSD, existing estimates are both incomplete and an underestimation 
of total damages that accrue to the citizens and residents of the U.S. 
because they do not fully capture the regional interactions and 
spillovers discussed above, nor do they include all of the important 
physical, ecological, and economic impacts of climate change recognized 
in the climate change literature. As noted in the February 2021 SC-GHG 
TSD, the IWG will continue to review developments in the literature, 
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full 
range of carbon impacts. As a member of the IWG, DOE will continue to 
follow developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies and the economic literature, the IWG continued to conclude 
that the consumption rate of interest is the theoretically appropriate 
discount rate in an intergenerational context,\52\ and recommended that 
discount rate uncertainty and relevant aspects of intergenerational 
ethical considerations be accounted for in selecting future discount 
rates.
---------------------------------------------------------------------------

    \52\ Interagency Working Group on Social Cost of Carbon, United 
States Government. Technical Support Document: Social Cost of Carbon 
for Regulatory Impact Analysis Under Executive Order 12866. 2010. 
Available at www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 2022); Interagency Working 
Group on Social Cost of Carbon, United States Government. Technical 
Support Document: Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order No. 12866. 2013. 
Available at www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed April 15, 2022); 
Interagency Working Group on Social Cost of Greenhouse Gases, United 
States Government. Technical Support Document: Technical Update on 
the Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. August 2016. Available at www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last 
accessed January 18, 2022); Interagency Working Group on Social Cost 
of Greenhouse Gases, United States Government. Addendum to Technical 
Support Document on Social Cost of Carbon for Regulatory Impact 
Analysis Under Executive Order 12866: Application of the Methodology 
to Estimate the Social Cost of Methane and the Social Cost of 
Nitrous Oxide. August 2016. www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed 
January 18, 2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3-percent and 7-percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits . . . at 
a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE

[[Page 76542]]

concludes that a 7-percent discount rate is not appropriate to apply to 
value the social cost of greenhouse gases in the analysis presented in 
this analysis.
    To calculate the present and annualized values of climate benefits, 
DOE uses the same discount rate as the rate used to discount the value 
of damages from future GHG emissions, for internal consistency. That 
approach to discounting follows the same approach that the February 
2021 TSD recommends ``to ensure internal consistency--i.e., future 
damages from climate change using the SC-GHG at 2.5 percent should be 
discounted to the base year of the analysis using the same 2.5 percent 
rate.'' DOE has also consulted the National Academies' 2017 
recommendations on how SC-GHG estimates can ``be combined in RIAs with 
other cost and benefits estimates that may use different discount 
rates.'' The National Academies reviewed several options, including 
``presenting all discount rate combinations of other costs and benefits 
with [SC-GHG] estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue 
to follow developments in the literature pertaining to this issue. 
While the IWG works to assess how best to incorporate the latest peer-
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent ones developed by the IWG 
prior to the group being disbanded in 2017. The estimates rely on the 
same models and harmonized inputs and are calculated using a range of 
discount rates. As explained in the February 2021 SC-GHG TSD, the IWG 
has recommended that agencies revert to the same set of four values 
drawn from the SC-GHG distributions based on three discount rates as 
were used in regulatory analyses between 2010 and 2016 and were subject 
to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5-
percent, 3-percent, and 5-percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3-percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications developed using a 
transparent process, the science available at the time of that process, 
and peer-reviewed methodologies. Those estimates were subject to public 
comment in the context of dozens of proposed rulemakings as well as in 
a dedicated public comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent, or 
lower.\53\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions'' (i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages) lags behind the most recent research. For example, 
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their 
incomplete treatment of adaptation and technological change, the 
incomplete way in which inter-regional and intersectoral linkages are 
modeled, uncertainty in the extrapolation of damages to high 
temperatures, and inadequate representation of the relationship between 
the discount rate and uncertainty in economic growth over long time 
horizons. Likewise, the socioeconomic and emissions scenarios used as 
inputs to the models do not reflect new information from the last 
decade of scenario generation or the full range of projections. The 
modeling limitations do not all work in the same direction in terms of 
their influence on the SC-CO2 estimates. However, as 
discussed in the February 2021 TSD, the IWG has recommended that, taken 
together, the limitations suggest that the interim SC-GHG estimates 
used in this proposed rule likely underestimate the damages from GHG 
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \53\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at 
https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this NOPR are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this final rule were based on 
the values developed for the IWG's February 2021 TSD, which are shown 
in Table IV.7 in five-year increments from 2020 to 2050. The set of 
annual values that DOE used, which was adapted from estimates published 
by EPA,\54\ is presented in appendix 14A of the NOPR TSD. These 
estimates are based on methods, assumptions, and parameters identical 
to the estimates published by the IWG (which were based on EPA 
modeling), and include values for 2051 to 2070. DOE expects additional 
climate benefits to accrue for products still operating after 2070, but 
a lack of available SC-CO2 estimates for emissions years 
beyond 2070 prevents DOE from monetizing these potential benefits in 
this analysis.
---------------------------------------------------------------------------

    \54\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed February 21, 2023).

[[Page 76543]]



                    Table IV.8--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2020............................................              14              51              76             152
2025............................................              17              56              83             169
2030............................................              19              62              89             187
2035............................................              22              67              96             206
2040............................................              25              73             103             225
2045............................................              28              79             110             242
2050............................................              32              85             116             260
----------------------------------------------------------------------------------------------------------------

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2022$ using the implicit price 
deflator for GDP from the Bureau of Economic Analysis. To calculate a 
present value of the stream of monetary values, DOE discounted the 
values in each of the four cases using the specific discount rate that 
had been used to obtain the SC-CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
NOPR were based on the values developed for the February 2021 TSD. 
Table IV.8 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in appendix 14A of the NOPR TSD. To capture the uncertainties 
involved in regulatory impact analysis, DOE has determined it is 
appropriate to include all four sets of SC-CH4 and SC-
N2O values, as recommended by the IWG. DOE derived values 
after 2050 using the approach described above for the SC-CO2 
values.

                                                       Table IV.9--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
                                                                                     [2020$ per metric ton]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              SC-CH4                                                          SC-N2O
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                                    Discount rate and statistic                                     Discount rate and statistic
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                              Year                                      5%              3%             2.5%             3%              5%              3%             2.5%             3%
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       95th                                                            95th
                                                                      Average         Average         Average       percentile        Average         Average         Average       percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................................................             670           1,500           2,000           3,900           5,800          18,000          27,000          48,000
2025............................................................             800           1,700           2,200           4,500           6,800          21,000          30,000          54,000
2030............................................................             940           2,000           2,500           5,200           7,800          23,000          33,000          60,000
2035............................................................           1,100           2,200           2,800           6,000           9,000          25,000          36,000          67,000
2040............................................................           1,300           2,500           3,100           6,700          10,000          28,000          39,000          74,000
2045............................................................           1,500           2,800           3,500           7,500          12,000          30,000          42,000          81,000
2050............................................................           1,700           3,100           3,800           8,200          13,000          33,000          45,000          88,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2022$ using the implicit price deflator for GDP 
from the Bureau of Economic Analysis. To calculate a present value of 
the stream of monetary values, DOE discounted the values in each of the 
cases using the specific discount rate that had been used to obtain the 
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the NOPR, DOE estimated the monetized value of NOX 
and SO2 emissions reductions from electricity generation 
using the latest benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\55\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025, 2030, and 2040, calculated with discount rates 
of 3-percent and 7-percent. DOE used linear interpolation to define 
values for the years not given in the 2025 to 2040 period; for years 
beyond 2040, the values are held constant. DOE combined the EPA 
regional benefit-per-ton estimates with regional information on 
electricity consumption and emissions from AEO2023 to define weighted-
average national values for NOX and SO2 (see 
appendix 14B of the NOPR TSD).
---------------------------------------------------------------------------

    \55\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly-Emitted 
PM2.5,PM2.5 Precursors and Ozone Precursors 
from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption and emissions in the 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation,

[[Page 76544]]

primary fuel consumption, installed capacity and power sector emissions 
due to a unit reduction in demand for a given end use. These 
coefficients are multiplied by the stream of electricity savings 
calculated in the NIA to provide estimates of selected utility impacts 
of potential new or amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new or 
amended energy conservation standards include both direct and indirect 
impacts. Direct employment impacts are any changes in the number of 
employees of manufacturers of the products subject to standards, their 
suppliers, and related service firms. The MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more-efficient appliances. Indirect 
employment impacts from standards consist of the net jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, caused by (1) reduced spending by consumers on 
energy, (2) reduced spending on new energy supply by the utility 
industry, (3) increased consumer spending on the products to which the 
new standards apply and other goods and services, and (4) the effects 
of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\56\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \56\ See U.S. Department of Commerce--Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at https://www.bea.gov/sites/default/files/methodologies/RIMSII_User_Guide.pdf (last 
accessed February 22, 2023).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\57\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \57\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may overestimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2028-2032), where these uncertainties are 
reduced. For more details on the employment impact analysis, see 
chapter 16 of the NOPR TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for 
dehumidifiers. It addresses the TSLs examined by DOE, the projected 
impacts of each of these levels if adopted as energy conservation 
standards for dehumidifiers, and the standards levels that DOE is 
proposing to adopt in this NOPR. Additional details regarding DOE's 
analyses are contained in the NOPR TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates new or potential amended 
standards for products and equipment by grouping individual efficiency 
levels for each class into TSLs. Use of TSLs allows DOE to identify and 
consider manufacturer cost interactions between the product classes, to 
the extent that there are such interactions, and price elasticity of 
consumer purchasing decisions that may change when different standard 
levels are set.
    In the analysis conducted for this NOPR, DOE analyzed the benefits 
and burdens of four TSLs for dehumidifiers. DOE developed TSLs that 
combine efficiency levels for each analyzed product class. TSL 1 
represents the smallest incremental increase in analyzed efficiency 
level above the baseline for each analyzed product class. TSL 2 
corresponds to current ENERGY STAR[supreg] requirements for all product 
classes. TSL 3 is an intermediate TSL that maintains positive average 
LCC savings for all product classes while increasing stringency for 
Product Classes 1, 2, 4, and 5. TSL 4 represents max-tech. DOE presents 
the results for the TSLs in this document, while the results for all 
efficiency levels that DOE analyzed are in the NOPR TSD.
    In response to the June 2022 Preliminary Analysis, AHAM raised 
concerns about the technological feasibility and the economic impact of 
setting the amended energy conservation standard at EL 3 for all 
portable product classes. AHAM also questioned whether DOE can justify 
proposing a standard where a majority of energy savings come from one 
product class. (AHAM, No. 22 at p. 8)
    To clarify, DOE does not propose adopting standard levels at the 
Preliminary Analysis stage. The current NOPR analysis has been updated 
based on stakeholder feedback received in response to the June 2022 
Preliminary Analysis, additional tear down of units to support the 
engineering analysis, and manufacturer interviews. For this NOPR 
analysis, DOE analyzed four trial standard levels and proposes a TSL 
that DOE considers technologically feasible and economically justified 
based on a multitude of factors (see section V.C.1 for discussion of 
the benefits and burdens of TSLs considered in this NOPR).
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential

[[Page 76545]]

amended energy conservation standards for dehumidifiers.

                                                   Table V.1--Trial Standard Levels for Dehumidifiers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Portable                                              Whole-home
                                           -------------------------------------------------------------------------------------------------------------
                                             PC1: <=25.00 pints/    PC2: 25.01-50.00     PC3: >50.00 pints/    PC4: <=8.0 cu. ft.     PC5: >8.0 cu. ft.
                    TSL                              day                pints/day                day         -------------------------------------------
                                           ------------------------------------------------------------------
                                                        IEF (L/               IEF (L/               IEF (L/       EL      IEF (L/       EL      IEF (L/
                                                EL        kWh)        EL        kWh)        EL        kWh)                  kWh)                  kWh)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.........................................          1       1.40          1       1.70          1       3.10          1       2.09          1       2.70
2.........................................          2       1.57          2       1.80          2       3.30          1       2.09          2       3.30
3.........................................          3       1.70          3       2.01          1       3.10          2       2.22          3       3.81
4.........................................          5       2.32          5       2.38          4       3.67          3       2.39          4       4.17
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For Product Class 3, DOE found that EL 3 results in the largest 
average LCC loss and the highest percent of consumers negatively 
impacted consumers among considered efficiency levels. Similarly, for 
Product Classes 1 and 2, EL 4 results in the smallest average LCC 
savings and the highest percent of consumers negatively impacted among 
considered efficiency levels. Therefore, DOE did not include these ELs 
in the construction of TSLs.

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on dehumidifier consumers by 
looking at the effects that potential amended standards at each TSL 
would have on the LCC and PBP. DOE also examined the impacts of 
potential standards on selected consumer subgroups. These analyses are 
discussed in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decreases. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses product lifetime and a discount rate. Chapter [8] of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V.2 through Table V.11 show the LCC and PBP results for the 
TSLs considered for each product class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
product. In the second table, impacts are measured relative to the 
efficiency distribution in the no-new-standards case in the compliance 
year (see section IV.F.8 of this document). Because some consumers 
purchase products with higher efficiency in the no-new-standards case, 
the average savings are less than the difference between the average 
LCC of the baseline product and the average LCC at each TSL. The 
savings refer only to consumers who are affected by a standard at a 
given TSL. Those who already purchase a product with efficiency at or 
above a given TSL are not affected. Consumers for whom the LCC 
increases at a given TSL experience a net cost.

                                   Table V.2--Average LCC and PBP Results for Product Class 1: Portable Dehumidifiers
                                                                   [<=25.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                   Efficiency                               First                                  Simple      Average
                       TSL                           level     IEF (L/kWh)   Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline         1.30         $279          $66         $569         $848  ...........         10.0
1...............................................            1         1.40          283           61          531          814          1.0         10.0
2...............................................            2         1.57          288           55          479          767          0.9         10.0
3...............................................            3         1.70          293           51          444          737          0.9         10.0
                                                            4         1.94          397           46          396          793          5.9         10.0
4...............................................            5         2.32          447           39          337          784          6.3         10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


[[Page 76546]]


Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Product Class 1: Portable Dehumidifiers
                                               [<=25.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                  Percentage of
                            TSL                             Efficiency level     Average LCC     consumers that
                                                                               savings \*\ \+\   experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1.........................................................                 1                $0                 0
2.........................................................                 2                46                 1
3.........................................................                 3                42                 3
                                                                           4              (17)                70
4.........................................................                 5               (9)                65
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
+ Parentheses denote negative (-) values.


                                   Table V.4--Average LCC and PBP Results for Product Class 2: Portable Dehumidifiers
                                                                 [25.01-50.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                   Efficiency                               First                                  Simple      Average
                       TSL                           level     IEF (L/kWh)   Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline         1.60         $315         $112         $968       $1,283  ...........         10.0
1...............................................            1         1.70          319          106          915        1,234          0.7         10.0
2...............................................            2         1.80          324          100          869        1,193          0.8         10.0
3...............................................            3         2.01          327           91          784        1,112          0.6         10.0
                                                            4         2.07          429           89          767        1,196          4.9         10.0
4...............................................            5         2.38          493           78          676        1,169          5.3         10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Product Class 2: Portable Dehumidifiers
                                             [25.01-50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                  Percentage of
                            TSL                             Efficiency level     Average LCC     consumers that
                                                                                 savings \*\     experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1.........................................................                 1                $0                 0
2.........................................................                 2                 0                 0
3.........................................................                 3                81                 0
                                                                           4              (13)                68
4.........................................................                 5                14                60
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


                                   Table V.6--Average LCC and PBP Results for Product Class 3: Portable Dehumidifiers
                                                                   [>50.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                   Efficiency                               First                                  Simple      Average
                       TSL                           level     IEF (L/kWh)   Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline         2.80       $1,043          $88         $765       $1,807  ...........         10.0
1,3.............................................            1         3.10        1,080           80          696        1,776          4.8         10.0
2...............................................            2         3.30        1,149           76          657        1,807          8.7         10.0
                                                            3         3.51        1,248           72          622        1,870         12.5         10.0

[[Page 76547]]

 
4...............................................            4         3.67        1,257           69          597        1,854         11.2         10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Product Class 3: Portable Dehumidifiers
                                               [>50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                  Percentage of
                            TSL                             Efficiency level     Average LCC     consumers that
                                                                               savings \*\ \+\   experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1,3.......................................................                 1               $31                33
2.........................................................                 2               (4)                65
                                                                           3              (67)                79
4.........................................................                 4              (52)                74
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
+ Parentheses denote negative (-) values.


                                  Table V.8--Average LCC and PBP Results for Product Class 4: Whole-Home Dehumidifiers
                                                                [<=8.0 cu ft case volume]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                   Efficiency                               First                                  Simple      Average
                       TSL                           level     IEF (L/kWh)   Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline         1.77       $2,733         $144       $1,441       $4,174  ...........         12.0
1,2.............................................            1         2.09        2,876          123        1,235        4,110          6.9         12.0
3...............................................            2         2.22        2,907          117        1,170        4,077          6.4         12.0
4...............................................            3         2.39        2,978          110        1,099        4,077          7.2         12.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.9--Average LCC Savings Relative to the No-New-Standards Case for Product Class 4: Whole-Home
                                                  Dehumidifiers
                                            [<=8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                  Percentage of
                            TSL                             Efficiency level     Average LCC     consumers that
                                                                                 savings \*\     experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1,2.......................................................                 1               $63                 4
3.........................................................                 2                56                 8
4.........................................................                 3                12                56
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.


[[Page 76548]]


                                  Table V.10--Average LCC and PBP Results for Product Class 5: Whole-Home Dehumidifiers
                                                                [>8.0 cu ft case volume]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Average costs (2022$)
                                                                           ----------------------------------------------------
                                                   Efficiency                               First                                  Simple      Average
                       TSL                           level     IEF (L/kWh)   Installed      year's      Lifetime                  payback      lifetime
                                                                                cost      operating    operating       LCC        (years)      (years)
                                                                                             cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Baseline         2.41       $2,734         $115       $1,166       $3,901  ...........         12.0
1...............................................            1         2.70        2,797          104        1,053        3,850          5.6         12.0
2...............................................            2         3.30        2,816           87          882        3,698          2.9         12.0
3...............................................            3         3.81        2,954           77          778        3,731          5.7         12.0
4...............................................            4         4.17        3,077           71          720        3,796          7.8         12.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.11--Average LCC Savings Relative to the No-New-Standards Case for Product Class 5: Whole-Home
                                                  Dehumidifiers
                                            [>8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost savings
                                                                             -----------------------------------
                                                                                                  Percentage of
                            TSL                             Efficiency level     Average LCC     consumers that
                                                                                 savings \*\     experience net
                                                                                   (2022$)          cost (%)
----------------------------------------------------------------------------------------------------------------
1.........................................................                 1               $53                19
2.........................................................                 2               179                 7
3.........................................................                 3               146                38
4.........................................................                 4                81                53
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on low-income households and senior-only households. 
Table V.12 through Table V.16 compares the average LCC savings and PBP 
at each efficiency level for the consumer subgroups with similar 
metrics for the entire consumer sample for each product class. In most 
cases, the average LCC savings and PBP for low-income households and 
senior-only households at the considered efficiency levels are not 
substantially different from the average for all households. Chapter 11 
of the NOPR TSD presents the complete LCC and PBP results for the 
subgroups.

    Table V.12--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 1:
                                             Portable Dehumidifiers
                                               [<=25.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                               Low-income        Senior-only
                                                               households        households      All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
    TSL 1.................................................                $0                $0                $0
    TSL 2.................................................               $38               $43               $46
    TSL 3.................................................               $34               $39               $42
    TSL 4.................................................             ($37)             ($22)              ($9)
Payback Period (years):
    TSL 1.................................................               1.2               1.1               1.0
    TSL 2.................................................               1.1               1.0               0.9
    TSL 3.................................................               1.1               1.0               0.9
    TSL 4.................................................               7.6               6.9               6.3
Consumers with Net Benefit (%):
    TSL 1.................................................                0%                0%                0%
    TSL 2.................................................               23%               24%               24%
    TSL 3.................................................               83%               89%               88%
    TSL 4.................................................               27%               30%               35%
Consumers with Net Cost (%):
    TSL 1.................................................                0%                0%                0%
    TSL 2.................................................                1%                0%                1%
    TSL 3.................................................                7%                2%                3%
    TSL 4.................................................               73%               70%               65%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.


[[Page 76549]]


    Table V.13--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 2:
                                             Portable Dehumidifiers
                                             [25.01-50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                               Low-income        Senior-only
                                                               households        households      All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
    TSL 1.................................................                $0                $0                $0
    TSL 2.................................................                $0                $0                $0
    TSL 3.................................................               $65               $74               $81
    TSL 4.................................................             ($21)              ($2)               $14
Payback Period (years):
    TSL 1.................................................               0.9               0.8               0.7
    TSL 2.................................................               1.0               0.9               0.8
    TSL 3.................................................               0.7               0.7               0.6
    TSL 4.................................................               6.4               5.8               5.3
Consumers with Net Benefit (%):
    TSL 1.................................................                0%                0%                0%
    TSL 2.................................................                0%                0%                0%
    TSL 3.................................................               87%               87%               87%
    TSL 4.................................................               32%               35%               40%
Consumers with Net Cost (%):
    TSL 1.................................................                0%                0%                0%
    TSL 2.................................................                0%                0%                0%
    TSL 3.................................................                0%                0%                0%
    TSL 4.................................................               68%               65%               60%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.


    Table V.14--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 3:
                                             Portable Dehumidifiers
                                               [>50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                               Low-income        Senior-only
                                                               households        households      All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
    TSL 1.................................................               $21               $25               $31
    TSL 2.................................................             ($19)             ($13)              ($4)
    TSL 3.................................................               $21               $25               $31
    TSL 4.................................................             ($76)             ($66)             ($52)
Payback Period (years):
    TSL 1.................................................               5.6               5.3               4.8
    TSL 2.................................................              10.0               9.5               8.7
    TSL 3.................................................               5.6               5.3               4.8
    TSL 4.................................................              12.9              12.3              11.2
Consumers with Net Benefit (%):
    TSL 1.................................................               53%               51%               53%
    TSL 2.................................................               29%               29%               35%
    TSL 3.................................................               53%               51%               53%
    TSL 4.................................................               17%               20%               26%
Consumers with Net Cost (%):
    TSL 1.................................................               33%               34%               33%
    TSL 2.................................................               71%               71%               65%
    TSL 3.................................................               33%               34%               33%
    TSL 4.................................................               83%               80%               74%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.


Table V.15--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 4: Whole-
                                               Home Dehumidifiers
                                            [<=8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
                                                               Low-income        Senior-only
                                                               households        households      All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
    TSL 1.................................................               $99               $70               $63
    TSL 2.................................................               $99               $70               $63
    TSL 3.................................................               $76               $60               $56
    TSL 4.................................................               $37               $14               $12
Payback Period (years):
    TSL 1.................................................               4.8               6.8               6.9
    TSL 2.................................................               4.8               6.8               6.9

[[Page 76550]]

 
    TSL 3.................................................               4.4               6.3               6.4
    TSL 4.................................................               4.9               7.1               7.2
Consumers with Net Benefit (%):
    TSL 1.................................................                5%                4%                4%
    TSL 2.................................................                5%                4%                4%
    TSL 3.................................................               15%               14%               14%
    TSL 4.................................................               48%               39%               40%
Consumers with Net Cost (%):
    TSL 1.................................................                3%                4%                4%
    TSL 2.................................................                3%                4%                4%
    TSL 3.................................................                5%                8%                8%
    TSL 4.................................................               40%               58%               56%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.


Table V.16--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 5: Whole-
                                               Home Dehumidifiers
                                            [>8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
                                                               Low-income        Senior-only
                                                               households        households      All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
    TSL 1.................................................               $64               $51               $53
    TSL 2.................................................              $178              $179              $179
    TSL 3.................................................              $187              $147              $146
    TSL 4.................................................              $163               $82               $81
Payback Period (years):
    TSL 1.................................................               3.8               5.5               5.6
    TSL 2.................................................               2.0               2.9               2.9
    TSL 3.................................................               3.9               5.6               5.7
    TSL 4.................................................               5.3               7.6               7.8
Consumers with Net Benefit (%):
    TSL 1.................................................               36%               33%               34%
    TSL 2.................................................               89%               95%               93%
    TSL 3.................................................               66%               62%               62%
    TSL 4.................................................               55%               47%               47%
Consumers with Net Cost (%):
    TSL 1.................................................               13%               20%               19%
    TSL 2.................................................                3%                5%                7%
    TSL 3.................................................               26%               38%               38%
    TSL 4.................................................               37%               53%               53%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.

c. Rebuttable Presumption Payback
    As discussed in section III.E.2 EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for a product that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedure for dehumidifiers. In contrast, 
the PBPs presented in section V.B.1.a were calculated using average 
values derived from distributions that reflect the range of energy use 
in the field.
    Table V.17 presents the rebuttable-presumption payback periods for 
the considered TSLs for dehumidifiers. While DOE examined the 
rebuttable-presumption criterion, it considered whether the standard 
levels considered for the NOPR are economically justified through a 
more detailed analysis of the economic impacts of those levels, 
pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range 
of impacts to the consumer, manufacturer, Nation, and environment. The 
results of that analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level, 
thereby supporting or rebutting the results of any preliminary 
determination of economic justification.

[[Page 76551]]



                               Table V.17--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
                                                                         Efficiency level
                 Product class                  ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
                                                                              years
----------------------------------------------------------------------------------------------------------------
Product Class 1: Portable Dehumidifiers <=25.00          1.2          1.1          1.2          6.6          7.3
 Pints/Day.....................................
Product Class 2: Portable Dehumidifiers 25.01-           0.9          1.0          0.8          5.4          6.1
 50.00 Pints/Day...............................
Product Class 3: Portable Dehumidifiers >50.00           5.9         10.7         11.5         10.7  ...........
 Pints/Day.....................................
Product Class 4: Whole-Home Dehumidifiers <=8.0          4.8          4.8          5.6  ...........  ...........
 cu ft Case Volume.............................
Product Class 5: Whole-Home Dehumidifiers >8.0           5.2          2.7          4.7          6.5  ...........
 cu ft Case Volume.............................
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of dehumidifiers. The following 
section describes the expected impacts on manufacturers at each 
considered TSL. Chapter 12 of the NOPR TSD explains the analysis in 
further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from a standard. The 
following tables summarize the estimated financial impacts (represented 
by changes in INPV) of potential amended energy conservation standards 
on manufacturers of dehumidifiers, as well as the conversion costs that 
DOE estimates manufacturers of dehumidifiers would incur at each TSL.
    The impact of potential amended energy conservation standards were 
analyzed under two scenarios: (1) the preservation of gross margin 
percentage; and (2) the preservation of operating profit, as discussed 
in section IV.J.2.d of this document. The preservation of gross margin 
percentages applies a ``gross margin percentage'' of 29 percent for all 
product classes across all efficiency levels.\58\ This scenario assumes 
that a manufacturer's per-unit dollar profit would increase as MPCs 
increase in the standards cases and represents the upper-bound to 
industry profitability under potential amended energy conservation 
standards.
---------------------------------------------------------------------------

    \58\ The gross margin percentage of 29 percent is based on a 
manufacturer markup of 1.40.
---------------------------------------------------------------------------

    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more-stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant equipment, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation of operating profit scenario 
results in the lower bound to impacts of potential amended standards on 
industry.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding INPV for each TSL. INPV is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2023-2057). The ``change in INPV'' results refer to 
the difference in industry value between the no-new-standards case and 
standards case at each TSL. To provide perspective on the short-run 
cash flow impact, DOE includes a comparison of free cash flow between 
the no-new-standards case and the standards case at each TSL in the 
year before amended standards would take effect. This figure provides 
an understanding of the magnitude of the required conversion costs 
relative to the cash flow generated by the industry in the no-new-
standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and product designs into 
compliance with potential amended standards. As described in section 
IV.J.2.c of this document, conversion cost investments occur between 
the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion costs 
can have a significant impact on the short-term cash flow on the 
industry and generally result in lower free cash flow in the period 
between the publication of the final rule and the compliance date of 
potential amended standards. Conversion costs are independent of the 
manufacturer markup scenarios and are not presented as a range in this 
analysis.

                                         Table V.18--Manufacturer Impact Analysis Dehumidifier Industry Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             No-new-
                                          Unit           standards case         TSL 1                TSL 2               TSL 3               TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV..........................  2022$ Million..........           158.3  157.8 to 158.0.....  157.4 to 158.1....  153.1 to 155.0....  73.0 to 121.6
Change in INPV................  %......................  ..............  (0.3) to (0.2).....  (0.6) to (0.2)....  (3.3) to (2.1)....  (53.9) to (23.2)
Free Cash Flow (2027).........  2022$ Million..........            12.6  12.4...............  12.4..............  10.3..............  (18.2)
Change in Free Cash Flow        %......................  ..............  (1.5)..............  (2.2).............  (18.4)............  (244.3)
 (2027).
Product Conversion Costs......  2022$ Million..........  ..............  0.6................  0.8...............  6.9...............  20.9
Capital Conversion Costs......  2022$ Million..........  ..............  0.0................  0.0...............  0.0...............  53.1
Conversion Costs..............  2022$ Million..........               -  0.6................  0.8...............  6.9...............  73.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    At TSL 4, the standard represents the max-tech efficiency levels 
for all product classes. The change in INPV is expected to range from -
53.9 to -23.2 percent. At this level, free cash flow is estimated to 
decrease by 244.3 percent compared to the no-new-standards case value 
of $12.6 million in the year 2027, the year before the standards year. 
Currently, less than 1 percent of domestic dehumidifier shipments meet 
the efficiencies required at TSL 4.
    At max-tech, all product classes would require the most efficient 
compressor observed in teardown

[[Page 76552]]

models, ECM blower fan with associated variable-speed driver, controls 
with less inactive mode power consumption and the largest heat 
exchangers observed in teardown models in each product class. 
Increasing heat exchanger surface area would necessitate notable 
changes to the chassis size of both portable and whole-home units as 
most dehumidifier designs cannot accommodate a larger heat exchanger 
within the existing cabinet structure. For the portable dehumidifier 
classes, which together account for approximately 98 percent of 
industry shipments, almost all manufacturers would need to make 
significant investments to adjust equipment, molding, and tooling to 
accommodate new dimensions across their entire product portfolio. None 
of the 15 portable dehumidifier OEMs currently offer any models that 
meet the max-tech efficiencies required. Product conversion costs at 
this level are significant as manufacturers work to completely redesign 
all existing models and develop new chassis designs to incorporate 
larger heat exchangers and more efficient components. DOE estimates 
capital conversion costs of $53.1 million and product conversion costs 
of $20.9 million. Conversion costs total $73.9 million.
    Compared to the market for portable dehumidifiers, the whole-home 
dehumidifier market is low-volume and relatively concentrated. Whole-
home dehumidifiers account for approximately 2 percent of total 
industry shipments. DOE identified three OEMs producing whole-home 
dehumidifiers for the U.S. market. Of the two whole-home product 
classes, whole-home dehumidifiers <=8.0 cu. ft. (Product Class 4) 
account for approximately 85 percent of whole-home dehumidifier 
shipments. Of the three whole-home OEMs identified, only one OEM 
currently offers a Product Class 4 model that meets the max-tech level. 
The remaining two OEMs would need to dedicate significant engineering 
resources to redesign their entire product portfolio to include larger 
heat exchangers, which would necessitate a change in dimensions and new 
chassis design. One of the OEMs without any models that meet max-tech 
is a small, domestic business with a significant market share of 
Product Class 4 shipments. For the other whole-home product class, only 
one OEM currently offers whole-home dehumidifiers >8.0 cu. ft. (Product 
Class 5). This OEM does not currently offer any models that meet the 
max-tech efficiency required. Given the limited number of whole-home 
OEMs, the limited number of models currently available that meet the 
max-tech efficiency levels, and the extent of the redesign required for 
the OEMs without any max-tech product offerings, it is possible that 
the 3-year period between the announcement of the final rule and the 
compliance date of the amended energy conservation standard might be 
insufficient to design, test, and manufacture the necessary number of 
products to meet consumer demand.
    At TSL 4, the large conversion costs result in a free cash flow 
dropping below zero in the years before the standards year. The 
negative free cash flow calculation indicates manufacturers may need to 
access cash reserves or outside capital to finance conversion efforts.
    At TSL 4, the shipment-weighted average MPC for all dehumidifiers 
is expected to increase by 52.7 percent relative to the no-new-
standards case shipment-weighted average MPC for all dehumidifiers in 
2028. Given the projected increase in production costs, DOE expects an 
estimated 23.5 percent drop in shipments in the year the standard takes 
effect relative to the no-new-standards case. In the preservation of 
gross margin percentage scenario, the increase in cashflow from the 
higher MSP is outweighed by the $73.9 million in conversion costs and 
drop in annual shipments, causing a significant negative change in INPV 
at TSL 4 under this scenario. Under the preservation of operating 
profit scenario, the manufacturer markup decreases in 2029, the year 
after the analyzed compliance year. This reduction in the manufacturer 
markup, the $73.9 million in conversion costs incurred by 
manufacturers, and the drop in annual shipments cause a significant 
decrease in INPV at TSL 4 under the preservation of operating profit 
scenario.
    At TSL 3, the standard represents an intermediate TSL that 
maintains positive average LCC savings for all products while 
increasing stringency for Product Classes 1, 2, 4, and 5. The change in 
INPV is expected to range from -3.3 to -2.1 percent. At this level, 
free cash flow is estimated to decrease by 18.4 percent compared to the 
no-new-standards case value of $12.6 million in the year 2027, the year 
before the standards year. Currently, approximately 3 percent of 
domestic dehumidifier shipments meet the efficiencies required at TSL 
3.
    For the portable dehumidifier classes <=50.00 pints/day (Product 
Class 1 and Product Class 2), TSL 3 corresponds to EL3. For portable 
dehumidifiers >50 pints/day, TSL 3 corresponds to EL1. For whole home 
dehumidifiers <=8.0 cu. ft., TSL 3 corresponds to EL2. For whole home 
dehumidifiers >8.0 cu. ft., TSL 3 corresponds to EL3. At this level, 
DOE expects that all product classes would incorporate a higher 
efficiency compressor compared to the current baseline. For the whole-
home dehumidifier classes, the analyzed design options also included 
the addition of an ECM blower and a larger heat exchanger as compared 
to baseline product offerings but to a lesser extent than what was 
analyzed at max-tech. At this level, DOE does not expect manufacturers 
of portable dehumidifiers to adopt new or larger chassis designs. As 
such, DOE does not expect industry would incur capital conversion costs 
since portable OEMs can likely achieve TSL 3 efficiencies without 
changes to the heat exchanger and chassis design. Portable 
dehumidifiers 25.01-50.00 pints/day (Product Class 2) accounts for 
approximately 73 percent of industry shipments. Of the 15 portable 
dehumidifier OEMs, around two OEMs currently offer Product Class 2 
models that meet the efficiency required by TSL 3. Product conversion 
costs may be necessary for developing, qualifying, sourcing, and 
testing more efficient compressors. For whole-home dehumidifiers, DOE 
expects some manufacturers would need to adopt new or larger chassis 
designs to accommodate larger heat exchangers but not to the extent 
required at max-tech. For whole-home designs, DOE expects that the size 
differences would not necessitate capital investment since existing 
machinery could likely still be used. Of the three whole-home OEMs, two 
OEMs currently offer Product Class 4 models that meet the efficiency 
required. As with TSL 4, whole-home manufacturers would likely need to 
completely redesign non-compliant models. However, approximately 60 
percent of basic model listings (around 32 unique basic models) already 
meet the efficiency level required. DOE estimates total conversion 
costs of $6.9 million, all of which are product conversion costs.
    At TSL 3, the shipment-weighted average MPC for all dehumidifiers 
is expected to increase by 1.6 percent relative to the no-new-standards 
case shipment-weighted average MPC for all dehumidifiers in 2028. Given 
the projected increase in production costs, DOE does not expect a 
notable drop in shipments in the year the standard takes effect 
relative to the no-new-standards case. In the preservation of gross 
margin percentage scenario, the slight increase in cashflow from the 
higher MSP is outweighed by the $6.9 million in conversion costs, 
causing a slightly

[[Page 76553]]

negative change in INPV at TSL 3 under this scenario. Under the 
preservation of operating profit scenario, the manufacturer markup 
decreases in 2029, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $6.9 million in conversion 
costs incurred by manufacturers cause a slightly negative change in 
INPV at TSL 3 under the preservation of operating profit scenario.
    At TSL 2, the standard represents efficiency levels consistent with 
ENERGY STAR requirements for dehumidifiers. The change in INPV is 
expected to range from -0.9 to -0.2 percent. At this level, free cash 
flow is estimated to decrease by 2.2 percent compared to the no-new-
standards case value of $12.6 million in the year 2027, the year before 
the standards year. Currently, approximately 89 percent of domestic 
dehumidifier shipments meet the efficiencies required at TSL 2.
    For all product classes, except for whole-home dehumidifiers <=8.0 
cu. ft. (Product Class 4), TSL 2 corresponds to EL2. For Product Class 
4, TSL 2 corresponds to EL1. The design options analyzed for most 
product classes include incorporating incrementally more efficient 
compressors, similar to TSL 3. For Product Class 5, DOE also expects 
that manufacturers would need to increase the heat exchanger beyond 
what would be required at baseline. At this level, DOE estimates that 
most manufacturers can achieve TSL 2 efficiencies with relatively 
simple component changes. For the largest portable dehumidifier class 
(Product Class 2), all 15 OEMs have models that meet the efficiency 
level required. For the largest whole-home dehumidifier class (Product 
Class 4), all three OEMs have models that meet the efficiency level 
required. Product conversion costs may be necessary for developing, 
qualifying, sourcing, and testing more efficient compressors. DOE 
estimates total conversion costs of $0.8 million, all of which are 
product conversion costs.
    At TSL 2, the shipment-weighted average MPC for all dehumidifiers 
is expected to increase by 0.4 percent relative to the no-new-standards 
case shipment-weighted average MPC for all dehumidifiers in 2028. Given 
the projected increase in production costs, DOE does not expect a 
notable drop in shipments in the year the standard takes effect 
relative to the no-new-standards case. In the preservation of gross 
margin percentage scenario, the slight increase in cashflow from the 
higher MSP is outweighed by the $0.8 million in conversion costs, 
causing a slightly negative change in INPV at TSL 2 under this 
scenario. Under the preservation of operating profit scenario, the 
manufacturer markup decreases in 2029, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the $0.8 
million in conversion costs incurred by manufacturers cause a slightly 
negative change in INPV at TSL 2 under the preservation of operating 
profit scenario.
    At TSL 1, the standard represents the lowest analyzed efficiency 
level above baseline for all product classes (EL1). The change in INPV 
is expected to range from -0.4 to -0.1 percent. At this level, free 
cash flow is estimated to decrease by 1.5 percent compared to the no-
new-standards case value of $12.6 million in the year 2027, the year 
before the standards year. Currently, approximately 99 percent of 
domestic dehumidifier shipments meet the efficiencies required at TSL 
1.
    For all product classes, TSL 1 corresponds to EL1. At TSL 1, DOE 
analyzed implementing various design options for the range of directly 
analyzed product classes. corresponds to EL2. For whole-home 
dehumidifiers under 8.0 cubic feet, TSL 2 corresponds to EL1. The 
design options analyzed included implementing incrementally more 
efficient compressors compared to the current baseline, and, for whole 
home dehumidifiers >8.0 cu. ft. (Product Class 5), the analyzed design 
options also included implementing larger heat exchangers as compared 
to the current baseline. At this level, there are no capital conversion 
costs since most manufacturers can achieve TSL 1 efficiencies with 
relatively simple component changes. Product conversion costs may be 
necessary for developing, qualifying, sourcing, and testing more 
efficient components. DOE estimates total conversion costs of $0.6 
million, all of which is product conversion cost.
    At TSL 1, the shipment-weighted average MPC for all dehumidifiers 
is expected to increase by 0.1 percent relative to the no-new-standards 
case shipment-weighted average MPC for all dehumidifiers in 2028. Given 
the relatively small increase in production costs, DOE does not project 
a notable drop in shipments in the year the standard takes effect. In 
the preservation of gross margin percentage scenario, the minor 
increase in cashflow from the higher MSP is slightly outweighed by the 
$0.6 million in conversion costs, causing a slightly negative change in 
INPV at TSL 1 under this scenario. Under the preservation of operating 
profit scenario, manufacturers earn the same per-unit operating profit 
as would be earned in the no-new-standards case, but manufacturers do 
not earn additional profit from their investments. In this scenario, 
the manufacturer markup decreases in 2029, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the $0.6 
million in conversion costs incurred by manufacturers cause a slightly 
negative change in INPV at TSL 1 under the preservation of operating 
profit scenario.
    DOE seeks comments, information, and data on the capital conversion 
costs and product conversion costs estimated for each TSL.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of amended energy 
conservation standards on direct employment in the dehumidifier 
industry, DOE used the GRIM to estimate the domestic labor expenditures 
and number of direct employees in the no-new-standards case and in each 
of the standards cases during the analysis period. DOE calculated these 
values using statistical data from the 2021 ASM,\59\ BLS employee 
compensation data,\60\ results of the engineering analysis, and 
manufacturer interviews.
---------------------------------------------------------------------------

    \59\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S. 
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed March 4, 2023).
    \60\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation--September 2022. December 15, 2022. Available 
at www.bls.gov/news.release/pdf/ecec.pdf (last accessed March 4, 
2023).
---------------------------------------------------------------------------

    Labor expenditures related to product manufacturing depend on the 
labor intensity of the product, the sales volume, and an assumption 
that wages remain fixed in real terms over time. The total labor 
expenditures in each year are calculated by multiplying the total MPCs 
by the labor percentage of MPCs. The total labor expenditures in the 
GRIM were then converted to total production employment levels by 
dividing production labor expenditures by the average fully burdened 
wage multiplied by the average number of hours worked per year per 
production worker. To do this, DOE relied on the ASM inputs: Production 
Workers Annual Wages, Production Workers Annual Hours, Production 
Workers for Pay Period, and Number of Employees. DOE also relied on the 
BLS employee compensation data to determine the fully burdened wage 
ratio. The fully burdened wage ratio factors in paid leave, 
supplemental pay, insurance,

[[Page 76554]]

retirement and savings, and legally required benefits.
    The number of production employees is then multiplied by the U.S. 
labor percentage to convert total production employment to total 
domestic production employment. The U.S. labor percentage represents 
the industry fraction of domestic manufacturing production capacity for 
the covered products. This value is derived from manufacturer 
interviews, equipment database analysis, and publicly available 
information. The U.S. labor percentage varies by product class. Nearly 
all portable units are manufactured outside of the United States. 
Comparatively, DOE estimates that 80 percent of whole-home units are 
manufactured in the United States. Overall, DOE estimates that 2 
percent of all covered dehumidifiers units are manufactured 
domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling products within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific equipment covered by 
this proposed rulemaking.
    Non-production workers account for the remainder of the direct 
employment figure. The non-production employees estimate covers 
domestic workers who are not directly involved in the production 
process, such as sales, engineering, human resources, and management. 
Using the amount of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio 
of non-production workers in the industry compared to production 
employees. DOE assumes that this employee distribution ratio remains 
constant between the no-new-standards case and standards cases.
    Using the GRIM, DOE estimates in the absence of amended energy 
conservation standards there would be 72 domestic production and non-
production workers of dehumidifiers in 2028. Table V.19 shows the range 
of the impacts of potential amended energy conservation standards on 
U.S. manufacturing employment in dehumidifier industry.

                                 Table V.19--Direct Employment Impacts for Domestic Dehumidifier Manufacturers in 2028 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        No-new-
                                    standards case            TSL 1                     TSL 2                    TSL 3                    TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2028                       72  72......................  72......................  72.....................  64.
 (Production Workers + Non-
 Production Workers).
Potential Changes in Direct         ..............  (53) to 0...............  (53) to 0...............  (53) to 0..............  (53) to (8).
 Employment in 2028*.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses denote negative values.

    The direct employment impacts shown in Table V.19 represent the 
potential domestic employment changes that could result following the 
compliance date of amended energy conservation standards. The upper 
bound estimate corresponds to the change in the number of domestic 
workers that would result from amended energy conservation standards if 
manufacturers continued to produce the same scope of covered products 
within the United States after compliance takes effect. To establish a 
conservative lower bound, DOE assumes all manufacturers would shift 
production to foreign countries with lower costs of labor. At lower 
TSLs (i.e., TSL 1 through TSL 3), DOE believes the likelihood of 
changes in production location due to amended standards are low due to 
the relatively minor production line updates required. However, as 
amended standards increase in stringency and both the complexity and 
cost of production facility updates increases, manufacturers are more 
likely to revisit their production location decisions and/or their make 
vs. buy decisions.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the NOPR TSD. Additionally, the employment impacts 
discussed in this section are independent of the employment impacts 
from the broader U.S. economy, which are documented in chapter 16 of 
the NOPR TSD.
c. Impacts on Manufacturing Capacity
    In interviews, some manufacturers expressed concern about 
efficiency levels that would require increasing the chassis and heat 
exchanger. These manufacturers asserted that since manufacturing larger 
units requires longer production and processing time, increasing 
chassis size could reduce their manufacturing capacity. Furthermore, 
manufacturers expressed concern that the 3-year compliance period would 
be insufficient to develop completely new, cost-optimized models across 
their entire product portfolio if chassis size changes are required.
    DOE notes that there could be technical resource constraints due to 
overlapping regulations, particularly for whole-home dehumidifier 
manufacturers. Whole-home dehumidifier manufacturers may face resource 
constraints should DOE set more stringent standards that necessitate 
the redesign of the majority of models given State (e.g., CARB) and 
potential Federal refrigerant regulations requiring low-GWP 
refrigerants over a similar compliance timeline.
    DOE seeks comment on whether manufacturers expect manufacturing 
capacity constraints or engineering resource constraints would limit 
product availability to consumers in the timeframe of the amended 
standard compliance date (2028).
d. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop industry cash-flow 
estimates may not capture the differential impacts among subgroups of 
manufacturers. Small manufacturers, niche players, or manufacturers 
exhibiting a cost structure that differs substantially from the 
industry average could be affected disproportionately. DOE investigated 
small businesses as a manufacturer subgroup that could be 
disproportionally impacted by energy conservation standards and could 
merit additional analysis. DOE did not identify any other adversely 
impacted manufacturer subgroups for this proposed rulemaking based on 
the results of the industry characterization.
    DOE analyzes the impacts on small businesses in a separate analysis 
in section VI.B of this document as part of the Regulatory Flexibility 
Analysis. In summary, the Small Business Administration (SBA) defines a 
``small business'' as having 1,500 or employees

[[Page 76555]]

or less for North American Industry Classification System (NAICS) 
335210, ``Small Electrical Appliance Manufacturing'' and 1,250 
employees or less for NAICS 333415, ``Air Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' For a discussion of the impacts on the small business 
manufacturer subgroup, see the Regulatory Flexibility Analysis in 
section VI.B of this document and chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    DOE evaluates product-specific regulations that will take effect 
approximately three years before or after the estimated 2028 compliance 
date of any amended energy conservation standards for dehumidifiers. 
This information is presented in Table V.20.

    Table V.20--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Dehumidifier Original Equipment
                                                                      Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Industry
                                                             Number of OEMs                                                 Industry        conversion
    Federal energy conservation standard     Number of OEMs    affected by       Approx. standards compliance year      conversion costs   costs/product
                                                    *         today's rule                                                (millions $)      revenue ***
                                                                   **                                                                           (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Furnaces [dagger] 87 FR 40590                   15               3  2029.....................................    $150.6 (2020$)             1.4
 (July 7, 2022).
Consumer Clothes Dryers,[dagger] 87 FR                   15               3  2027.....................................    $149.7 (2020$)             1.8
 51734 (August 23, 2022).
Microwave Ovens 88 FR 39912 (June 20, 2023)              18               1  2026.....................................     $46.1 (2021$)             0.7
Consumer Conventional Cooking Products 88                34               1  2027.....................................    $183.4 (2021$)             1.2
 FR 6818 [dagger] (February 1, 2023).
Residential Clothes Washers [dagger] 88 FR               19               3  2027.....................................    $690.8 (2021$)             5.2
 13520 (March 3, 2023).
Refrigerators, Freezers, and Refrigerator-               49               3  2027.....................................  $1,323.6 (2021$)             3.8
 Freezers [dagger] 88 FR 12452 (February
 27, 2023).
Room Air Conditioners 88 FR 34298 (May 26,                8               4  2026.....................................     $24.8 (2021$)             0.4
 2023).
Consumer Air Cleaners [Dagger] 88 FR 21752               43               2  2024 and 2026 [Dagger]...................     $57.3 (2021$)             1.3
 (April 11, 2023).
Miscellaneous Refrigeration Products                     38               3  2029.....................................    $126.9 (2021$)             3.1
 [dagger] 88 FR 19382 (March 31, 2023).
Dishwashers [dagger] 88 FR 32514 (May 19,                22               3  2027.....................................    $125.6 (2021$)             2.1
 2023).
Consumer Water Heaters [dagger] 88 FR 49058              22               3  2030.....................................    $228.1 (2022$)             1.3
 (July 28, 2023).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule subject to cumulative regulatory burden.
** This column presents the number of OEMs producing dehumidifiers that are also listed as OEMs in the identified energy conservation standard subject
  to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion period. Industry conversion costs are the
  upfront investments manufacturers must make to sell compliant products/equipment. The revenue used for this calculation is the revenue from just the
  covered product/equipment associated with each row. The conversion period is the time frame over which conversion costs are made and lasts from the
  publication year of the final rule to the compliance year of the energy conservation standard. The conversion period typically ranges from 3 to 5
  years, depending on the rulemaking.
[dagger] These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication of a final rule.
[Dagger] The Direct Final Rule for Consumer Air Cleaners adopts an amended standard in 2024 and a higher amended standard in 2026. The conversion costs
  are spread over a 3-year conversion period ending in 2025, with over 50 percent of the conversion costs occurring between 2024 and 2025.


[[Page 76556]]

    DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of dehumidifiers associated with 
multiple DOE standards or product-specific regulatory actions of other 
Federal agencies.
Refrigerant Regulations
    DOE evaluated the potential impacts of State and Federal 
refrigerant regulations, such as CARB's rulemaking prohibiting the use 
of refrigerants with a GWP of 750 or greater starting January 1, 2023 
for self-contained, residential dehumidifiers and starting January 1, 
2025 for whole-home dehumidifiers \61\ and EPA's final rule issued on 
October 5, 2023, which restricts the use of HFCs that have a GWP of 700 
or greater for residential dehumidifiers beginning January 1, 2025.\62\ 
Based on market research and information from manufacturer interviews, 
DOE expects that dehumidifier manufacturers will transition to 
flammable refrigerants (e.g., R-32) in response to refrigerant GWP 
restrictions. DOE understands that switching from non-flammable to 
flammable refrigerants requires time and investment to redesign 
dehumidifiers and upgrade production facilities to accommodate the 
additional structural and safety precautions required. DOE tentatively 
expects manufacturers will need to transition to an A2L refrigerant to 
comply with upcoming refrigerant regulations, prior to the expected 
2028 compliance date of any potential energy conservation standards.
---------------------------------------------------------------------------

    \61\ State of California Air Resource Board, ``Prohibitions on 
Use of Certain Hydrofluorocarbons in Stationary Refrigeration, 
Chillers, Aerosols-Propellants, and Foam End-Uses Regulation.'' 
Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/frorevised.pdf (last accessed March 
4, 2023).
    \62\ The final rule was issued on October 5, 2023 and is pending 
publication in the Federal Register. A pre-publication version of 
the EPA final rule is available at: www.epa.gov/system/files/documents/2023-10/technology-transitions-final-rule-2023-pre-publication.pdf. Once published, the final rule will be available 
at: www.regulations.gov/docket/EPA-HQ-OAR-2021-0643.
---------------------------------------------------------------------------

    Investments required to transition to flammable refrigerants in 
response to State regulations or EPA's final rule, necessitates a level 
of investment beyond typical annual R&D and capital expenditures. DOE 
considers the cost associated with the refrigerant transition in its 
GRIM to be independent of DOE actions related to any amended energy 
conservation standards. DOE accounted for the costs associated with 
redesigning dehumidifiers to make use of flammable refrigerants and 
retrofitting production facilities to accommodate flammable 
refrigerants in the GRIM in the no-new-standards case and standards 
cases to reflect the cumulative regulatory burden from State and 
Federal refrigerant regulation.\63\ DOE relied on manufacturer feedback 
in confidential interviews and a report prepared for EPA \64\ to 
estimate the industry refrigerant transition costs. Based on feedback, 
DOE assumed that the transition to low-GWP refrigerants would require 
industry to invest approximately $3.6 million in R&D and $7.1 million 
in capital expenditures (e.g., investments in new charging equipment, 
leak detection systems, etc.).
---------------------------------------------------------------------------

    \63\ Although State regulations, such as CARB's, required the 
use low-GWP refrigerants in California starting January 1, 2023, for 
portable dehumidifiers, DOE assumed the refrigerant transition costs 
would be incurred over the same time period as whole-home 
dehumidifiers (2023 to 2024) since manufacturers likely waited for 
EPA SNAP approval before investing in the transition to low-GWP 
refrigerants for dehumidifiers. 88 FR 26382.
    \64\ Report prepared for the U.S. Environmental Protection 
Agency, prepared by RTI International, ``Global Non-CO2 Greenhouse 
Gas Emission Projections & Marginal Abatement Cost Analysis: 
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------

    DOE requests comments on the magnitude of costs associated with 
transitioning dehumidifier products and production facilities to 
accommodate low-GWP refrigerants that would be incurred between the 
publication of this NOPR and the proposed compliance date of amended 
standards. Quantification and categorization of these costs, such as 
engineering efforts, testing lab time, certification costs, and capital 
investments (e.g., new charging equipment), would enable DOE to refine 
its analysis.
3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings and the NPV of consumer benefits that would result from each of 
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential amended 
standards for dehumidifiers, DOE compared their energy consumption 
under the no-new-standards case to their anticipated energy consumption 
under each TSL. The savings are measured over the entire lifetime of 
products purchased in the 30-year period that begins in the year of 
anticipated compliance with amended standards (2028-2057). Table V.21 
presents DOE's projections of the national energy savings for each TSL 
considered for dehumidifiers. The savings were calculated using the 
approach described in section IV.H of this document.

             Table V.21--Cumulative National Energy Savings for Dehumidifiers; 30 Years of Shipments
                                                   [2028-2057]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.00            0.02            0.32            0.97
FFC energy......................................            0.00            0.02            0.33            0.99
----------------------------------------------------------------------------------------------------------------

    OMB Circular A-4 \65\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this proposed 
rulemaking, DOE undertook a sensitivity analysis using 9 years, rather 
than 30 years, of product shipments. The choice of a 9-year period is a 
proxy for the timeline in EPCA for the review of certain energy 
conservation standards and potential revision of and compliance with 
such revised
---------------------------------------------------------------------------

    \65\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.

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

[[Page 76557]]

standards.\66\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to dehumidifiers. Thus, such results 
are presented for informational purposes only and are not indicative of 
any change in DOE's analytical methodology. The NES sensitivity 
analysis results based on a 9-year analytical period are presented in 
Table V.22. The impacts are counted over the lifetime of dehumidifiers 
purchased in 2028-2036.
---------------------------------------------------------------------------

    \66\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. (42 U.S.C. 
6295(m)) While adding a 6-year review to the 3-year compliance 
period adds up to 9 years, DOE notes that it may undertake reviews 
at any time within the 6-year period and that the 3-year compliance 
date may yield to the 6-year backstop. A 9-year analysis period may 
not be appropriate given the variability that occurs in the timing 
of standards reviews and the fact that for some products, the 
compliance period is 5 years rather than 3 years.

             Table V.22--Cumulative National Energy Savings for Dehumidifiers; 9 Years of Shipments
                                                   [2028-2036]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.00            0.01            0.12            0.28
FFC energy......................................            0.00            0.01            0.12            0.29
----------------------------------------------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for dehumidifiers. 
In accordance with OMB's guidelines on regulatory analysis,\67\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.23 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased in 2028-2057.
---------------------------------------------------------------------------

    \67\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.

     Table V.23--Cumulative Net Present Value of Consumer Benefits for Dehumidifiers; 30 Years of Shipments
                                                   [2028-2057]
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           Billion 2022$
                                                 ---------------------------------------------------------------
3 percent.......................................            0.02            0.07            2.61            2.21
7 percent.......................................            0.01            0.03            1.26            0.50
----------------------------------------------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.24. The impacts are counted over the 
lifetime of products purchased in 2028-2036. As mentioned previously, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology or decision 
criteria.

  Table V.24--Cumulative Net Present Value of Consumer Benefits for Dehumidifiers; 9 Years of Shipments (2028-
                                                      2036)
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           Billion 2022$
                                                 ---------------------------------------------------------------
3 percent.......................................            0.01            0.04            1.16            0.55
7 percent.......................................            0.00            0.02            0.71            0.09
----------------------------------------------------------------------------------------------------------------

    The previous results reflect the use of a default trend to estimate 
the change in price for dehumidifiers over the analysis period (see 
section IV.F.1 of this document). DOE also conducted a sensitivity 
analysis that considered one scenario with a lower rate of price 
decline than the reference case and one scenario with a higher rate of 
price decline than the reference case. The results of these alternative 
cases are presented in appendix 10C of the NOPR TSD. In the high-price-
decline case, the NPV of consumer benefits is higher than in the 
default case. In the low-price-decline case, the NPV of consumer 
benefits is lower than in the default case.
c. Indirect Impacts on Employment
    DOE estimates that that amended energy conservation standards for

[[Page 76558]]

dehumidifiers would reduce energy expenditures for consumers of those 
products, with the resulting net savings being redirected to other 
forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2028-2032), where these uncertainties are reduced.
    The results suggest that the proposed standards would be likely to 
have a negligible impact on the net demand for labor in the economy. 
The net change in jobs is so small that it would be imperceptible in 
national labor statistics and might be offset by other, unanticipated 
effects on employment. Chapter 16 of the NOPR TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section IV.C.1.b of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of the dehumidifiers under 
consideration in this rulemaking. Manufacturers of these products 
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section III.E.1.e 
of this document, the Attorney General determines the impact, if any, 
of any lessening of competition likely to result from a proposed 
standard, and transmits such determination in writing to the Secretary, 
together with an analysis of the nature and extent of such impact. To 
assist the Attorney General in making this determination, DOE has 
provided DOJ with copies of this NOPR and the accompanying TSD for 
review. DOE will consider DOJ's comments on the proposed rule in 
determining whether to proceed to a final rule. DOE will publish and 
respond to DOJ's comments in that document. DOE invites comment from 
the public regarding the competitive impacts that are likely to result 
from this proposed rule. In addition, stakeholders may also provide 
comments separately to DOJ regarding these potential impacts. See the 
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation to Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for dehumidifiers is expected to yield environmental benefits 
in the form of reduced emissions of certain air pollutants and 
greenhouse gases. Table V.25 provides DOE's estimate of cumulative 
emissions reductions expected to result from the TSLs considered in 
this rulemaking. The emissions were calculated using the multipliers 
discussed in section IV.K of this document. DOE reports annual 
emissions reductions for each TSL in chapter 13 of the NOPR TSD.

                Table V.25--Cumulative Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                             Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.07            0.31            6.37           18.68
CH4 (thousand tons).............................            0.00            0.02            0.41            1.19
N2O (thousand tons).............................            0.00            0.00            0.06            0.16
NOX(thousand tons)..............................            0.03            0.14            2.97            8.50
SO2 (thousand tons).............................            0.02            0.08            1.72            5.00
Hg (tons).......................................           0.000           0.001           0.011           0.033
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.01            0.03            0.57            1.69
CH4 (thousand tons).............................            0.59            2.51           51.53          153.02
N2O (thousand tons).............................            0.00            0.00            0.00            0.01
NOX (thousand tons).............................            0.10            0.43            8.84           26.25
SO2 (thousand tons).............................            0.00            0.00            0.04            0.10
Hg (tons).......................................           0.000           0.000           0.000           0.000
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.08            0.34            6.94           20.36
CH4 (thousand tons).............................            0.60            2.53           51.94          154.20
N2O (thousand tons).............................            0.00            0.00            0.06            0.17
NOX (thousand tons).............................            0.14            0.57           11.81           34.74
SO2 (thousand tons).............................            0.02            0.09            1.76            5.10
Hg (tons).......................................           0.000           0.001           0.012           0.034
----------------------------------------------------------------------------------------------------------------


[[Page 76559]]

    As part of the analysis for this rulemaking, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for dehumidifiers. 
Section IV.L of this document discusses the SC-CO2 values 
that DOE used. Table V.26 presents the value of CO2 
emissions reduction at each TSL for each of the SC-CO2 
cases. The time-series of annual values is presented for the proposed 
TSL in chapter 14 of the NOPR TSD.

           Table V.26--Present Value of CO2 Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CO2 case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                           Billion 2022$
                                                 ---------------------------------------------------------------
1...............................................            0.00            0.00            0.01            0.01
2...............................................            0.00            0.02            0.02            0.05
3...............................................            0.08            0.32            0.50            0.98
4...............................................            0.22            0.92            1.43            2.79
----------------------------------------------------------------------------------------------------------------

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for dehumidifiers. Table V.27 presents the value of the CH4 
emissions reduction at each TSL, and Table V.28 presents the value of 
the N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.

         Table V.27--Present Value of Methane Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CH4 case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                           Million 2022$
                                                 ---------------------------------------------------------------
1...............................................            0.31            0.88            1.21            2.33
2...............................................            1.28            3.65            5.04            9.66
3...............................................           26.43           75.40          104.13          200.00
4...............................................           74.88          219.14          304.41          579.67
----------------------------------------------------------------------------------------------------------------


      Table V.28--Present Value of Nitrous Oxide Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-N2O case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
                                                                           Million 2022$
                                                 ---------------------------------------------------------------
1...............................................            0.00            0.01            0.02            0.03
2...............................................            0.01            0.05            0.07            0.12
3...............................................            0.25            0.96            1.47            2.56
4...............................................            0.69            2.71            4.17            7.20
----------------------------------------------------------------------------------------------------------------

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NOX and SO2 emissions reductions

[[Page 76560]]

anticipated to result from the considered TSLs for dehumidifiers. The 
dollar-per-ton values that DOE used are discussed in section IV.L of 
this document. Table V.29 presents the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.30 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the proposed TSL in chapter 14 of the NOPR TSD.

 Table V.29--Present Value of NOX Emissions Reduction for Dehumidifiers
                          Shipped in 2028-2057
------------------------------------------------------------------------
                                            3% Discount     7% Discount
                   TSL                         rate            rate
------------------------------------------------------------------------
                                                   Million 2022$
                                         -------------------------------
1.......................................            7.26            3.33
2.......................................           29.32           13.09
3.......................................          610.43          270.11
4.......................................        1,716.52          716.08
------------------------------------------------------------------------


 Table V.30--Present Value of SO2 Emissions Reduction for Dehumidifiers
                          Shipped in 2028-2057
------------------------------------------------------------------------
                                            3% Discount     7% Discount
                   TSL                         rate            rate
------------------------------------------------------------------------
                                                   Million 2022$
                                         -------------------------------
1.......................................            1.51            0.71
2.......................................            6.11            2.78
3.......................................          126.15           56.92
4.......................................          352.00          149.67
------------------------------------------------------------------------

    Not all the public health and environmental benefits from the 
reduction of greenhouse gases, NOX, and SO2 are 
captured in the values above, and additional unquantified benefits from 
the reductions of those pollutants as well as from the reduction of 
direct PM and other co-pollutants may be significant. DOE has not 
included monetary benefits of the reduction of Hg emissions because the 
amount of reduction is very small.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No 
other factors were considered in this analysis.
8. Summary of Economic Impacts
    Table V.31 presents the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced GHG 
and NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this rulemaking. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered products, and are measured for the 
lifetime of products shipped in 2028-2057. The climate benefits 
associated with reduced GHG emissions resulting from the adopted 
standards are global benefits, and are also calculated based on the 
lifetime of dehumidifiers shipped in 2028-2057.

          Table V.31--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
                   Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................            0.03            0.11            3.45            4.57
3% Average SC-GHG case..........................            0.03            0.13            3.75            5.42
2.5% Average SC-GHG case........................            0.03            0.14            3.95            6.02
3% 95th percentile SC-GHG case..................            0.04            0.16            4.53            7.65
----------------------------------------------------------------------------------------------------------------
                   Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................            0.01            0.05            1.69            1.66
3% Average SC-GHG case..........................            0.02            0.07            1.99            2.50
2.5% Average SC-GHG case........................            0.02            0.08            2.19            3.10
3% 95th percentile SC-GHG case..................            0.03            0.10            2.77            4.74
----------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered product 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining 
whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens by, 
to the greatest extent

[[Page 76561]]

practicable, considering the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also result in significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of amended standards for 
dehumidifiers at each TSL, beginning with the maximum technologically 
feasible level, to determine whether that level was economically 
justified. Where the max-tech level was not justified, DOE then 
considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. There is evidence that consumers 
undervalue future energy savings as a result of (1) a lack of 
information, (2) a lack of sufficient salience of the long-term or 
aggregate benefits, (3) a lack of sufficient savings to warrant 
delaying or altering purchases, (4) excessive focus on the short term, 
in the form of inconsistent weighting of future energy cost savings 
relative to available returns on other investments, (5) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs, and (6) a divergence in incentives (for example, between 
renters and owners, or builders and purchasers). Having less than 
perfect foresight and a high degree of uncertainty about the future, 
consumers may trade off these types of investments at a higher than 
expected rate between current consumption and uncertain future energy 
cost savings.
    In DOE's current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer purchase 
decisions are included in two ways. First, if consumers forgo the 
purchase of a product in the standards case, this decreases sales for 
product manufacturers, and the impact on manufacturers attributed to 
lost revenue is included in the MIA. This approach includes changes to 
future shipments and INPV but does not include the forgone value to 
consumers who are no longer expected to purchase a dehumidifier in the 
standards case. Second, DOE accounts for energy savings attributable 
only to products actually used by consumers in the standards case; if a 
standard decreases the number of products purchased by consumers, this 
decreases the potential energy savings from an energy conservation 
standard. DOE provides estimates of shipments and changes in the volume 
of product purchases in chapter 9 of the NOPR TSD. However, DOE's 
current analysis does not explicitly control for heterogeneity in 
consumer preferences, preferences across subcategories of products or 
specific features, or consumer price sensitivity variation according to 
household income.\68\
---------------------------------------------------------------------------

    \68\ P.C. Reiss and M.W. White. Household Electricity Demand, 
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883. 
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------

    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE is committed to developing a framework that can support empirical 
quantitative tools for improved assessment of the consumer welfare 
impacts of appliance standards. DOE has posted a paper that discusses 
the issue of consumer welfare impacts of appliance energy conservation 
standards, and potential enhancements to the methodology by which these 
impacts are defined and estimated in the regulatory process.\69\ DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------

    \69\ Sanstad, A.H. Notes on the Economics of Household Energy 
Consumption and Technology Choice. 2010. Lawrence Berkeley National 
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed 
February 22, 2023).
---------------------------------------------------------------------------

1. Benefits and Burdens of TSLs Considered for Dehumidifier Standards
    Table V.32 and Table V.33 summarize the quantitative impacts 
estimated for each TSL for dehumidifiers. The national impacts are 
measured over the lifetime of dehumidifiers purchased in the 30-year 
period that begins in the anticipated year of compliance with amended 
standards (2028-2057). The energy savings, emissions reductions, and 
value of emissions reductions refer to full-fuel-cycle results. The 
efficiency levels contained in each TSL are described in section V.A of 
this document.

                Table V.32--Summary of Analytical Results for Dehumidifier TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
                                     Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads...........................................            0.00            0.02            0.33            0.99
----------------------------------------------------------------------------------------------------------------
                                       Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            0.08            0.34            6.94           20.36
CH4 (thousand tons).............................            0.60            2.53           51.94          154.20
N2O (thousand tons).............................            0.00            0.00            0.06            0.17
NOX (thousand tons).............................            0.14            0.57           11.81           34.74
SO2 (thousand tons).............................            0.02            0.09            1.76            5.10
Hg (tons).......................................            0.00            0.00            0.01            0.03
----------------------------------------------------------------------------------------------------------------

[[Page 76562]]

 
                      Present Value of Benefits and Costs (3% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................            0.03            0.13            2.75            7.80
Climate Benefits *..............................            0.00            0.02            0.40            1.14
Health Benefits **..............................            0.01            0.04            0.74            2.07
Total Benefits [dagger].........................            0.05            0.19            3.89           11.01
Consumer Incremental Product Costs [Dagger].....            0.02            0.06            0.14            5.59
Consumer Net Benefits...........................            0.02            0.07            2.61            2.21
Total Net Benefits..............................            0.03            0.13            3.75            5.42
----------------------------------------------------------------------------------------------------------------
                      Present Value of Benefits and Costs (7% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................            0.02            0.07            1.34            3.59
Climate Benefits *..............................            0.00            0.02            0.40            1.14
Health Benefits **..............................            0.00            0.02            0.33            0.87
Total Benefits [dagger].........................            0.03            0.10            2.07            5.59
Consumer Incremental Product Costs [Dagger].....            0.01            0.03            0.08            3.09
Consumer Net Benefits...........................            0.01            0.03            1.26            0.50
Total Net Benefits..............................            0.02            0.07            1.99            2.50
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
  results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together,
  these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated
  with the average SC-GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG
  point estimate. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the
  Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
  and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but DOE does not have a single central SC-GHG point estimate and emphasizes the
  importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.


       Table V.33--Summary of Analytical Results for Dehumidifier TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
               Category                      TSL 1 *           TSL 2 *           TSL 3 *            TSL 4 *
----------------------------------------------------------------------------------------------------------------
                                              Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-new-     157.8 to 158.0    157.4 to 158.1    153.1 to 155.0       73.0 to 121.6
 standards case INPV = $158.3)........
Industry NPV (% change)...............    (0.3) to (0.2)    (0.6) to (0.2)    (3.3) to (2.1)    (53.9) to (23.2)
----------------------------------------------------------------------------------------------------------------
                                      Consumer Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00                  $0               $46               $42                ($9)
 Pints/Day............................
PC 2: Portable Dehumidifiers 25.01-                   $0                $0               $81                 $14
 50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00                  $31              ($4)               $31               ($52)
 Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0                 $63               $63               $56                 $12
 cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0                  $53              $179              $146                 $81
 cu. ft. Case Volume..................
Shipment-Weighted Average *...........                $1               $13               $71                  $7
----------------------------------------------------------------------------------------------------------------
                                           Consumer Simple PBP (years)
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00                 1.0               0.9               0.9                 6.3
 Pints/Day............................
PC 2: Portable Dehumidifiers 25.01-                  0.7               0.8               0.6                 5.3
 50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00                  4.8               8.7               4.8                11.2
 Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0                 6.9               6.9               6.4                 7.2
 cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0                  5.6               2.9               5.7                 7.8
 cu. ft. Case Volume..................
Shipment-Weighted Average *...........               0.9               1.0               0.8                 5.6
----------------------------------------------------------------------------------------------------------------
                                 Percent of Consumers That Experience a Net Cost
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00                  0%                1%                3%                 65%
 Pints/Day............................
PC 2: Portable Dehumidifiers 25.01-                   0%                0%                0%                 60%
 50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00                  33%               65%               33%                 74%
 Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0                  4%                4%                8%                 56%
 cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0                  19%                7%               38%                 53%
 cu. ft. Case Volume..................
Shipment-Weighted Average *...........                0%                1%                1%                 61%
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each product class in total projected shipments in 2022.


[[Page 76563]]

    DOE first considered TSL 4, which represents the max-tech 
efficiency levels. At this TSL, all product classes would require the 
most efficient compressor found in DOE's physical teardowns of 
commercially available models, an ECM blower fan with associated 
variable-speed driver, controls with lower inactive mode power 
consumption, and the largest heat exchangers observed from DOE's 
physical teardowns of commercially available models in each product 
class. TSL 4 would save an estimated 0.99 quads of energy, an amount 
DOE considers significant. Under TSL 4, the NPV of consumer benefit 
would be $0.50 billion using a discount rate of 7 percent, and $2.21 
billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 20.36 Mt of 
CO2, 5.10 thousand tons of SO2, 34.74 thousand 
tons of NOX, 0.03 tons of Hg, 154.20 thousand tons of 
CH4, and 0.17 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $1.14 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $0.87 billion using a 7-percent discount rate and $2.07 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $2.50 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $5.42 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    Portable dehumidifiers in the CCD range in capacity from 1.7 to 
104.3 pints per day and account for 98 percent of the current 
dehumidifier shipments.\70\ Within the portable segment of the market, 
there are three product classes differentiated by capacity range. 
Portable dehumidifiers with capacities greater than 25.0 pints per day 
and less than or equal to 50.0 pints per day (PC 2) have the largest 
market share accounting for approximately 73 percent of portable 
dehumidifier shipments. Portable dehumidifiers with capacities less 
than or equal to 25.0 pints per day (PC 1) account for approximately 26 
percent of portable dehumidifier shipments. Portable dehumidifiers with 
capacities greater than 50.0 pints per day (PC 3) account for the 
remaining 1 percent of portable dehumidifier shipments. Whole-home 
dehumidifiers are categorized into two product classes based on case 
volume and correspond to 2 percent of the total dehumidifier market. 
Whole-home units range in case volume between 1.7 cu. ft. and 9.5 cu. 
ft. Whole-home dehumidifiers with case volumes less than or equal to 
8.0 cu. ft. (PC 4) account for 85 percent of whole-home dehumidifier 
shipments in 2022.
---------------------------------------------------------------------------

    \70\ Current shipments estimates refer to the 2022 shipments 
distribution in the no-new-standards case. See section IV.F.8 of 
this document for details on the energy efficiency distribution in 
the no-new-standards case.
---------------------------------------------------------------------------

    For portable dehumidifiers at TSL 4, the average LCC impact is a 
savings of $14 for PC 2, a net cost of $9 for PC 1 and $52 for PC 3. 
The simple payback period is 6.3 years for PC 1, 5.3 years for PC 2, 
and 11.2 years for PC 3. Notably, the simple payback period for PC 3 
exceeds the expected average lifetime of 10 years for portable 
dehumidifiers. The fraction of consumers experiencing a net LCC cost is 
65 percent for PC 1, 60 percent for PC 2, and 74 percent for PC 3. For 
whole-home dehumidifiers, the average LCC impact is a savings of $12 
for PC 4 and $81 for PC 5. The simple payback is 7.2 years for PC 4 and 
7.8 years for PC 5. The fraction of consumers experiencing a net LCC 
cost is 56 percent for PC 4 and 53 percent for PC 5. Weighted across 
the market share for all five product classes, a majority of 
dehumidifier consumers (61 percent) would experience a net cost.
    An analysis of RECS 2020 indicates that 97 percent of low-income 
households that own a dehumidifier own a portable unit. Assuming the 
low-income sample has a similar market distribution in portable 
dehumidifier capacities as the national sample, DOE estimates that 
approximately 25 percent of low-income dehumidifier consumers purchase 
units in PC 1 and 71 percent in PC 2. At TSL 4, low-income households 
experience an average net LCC cost of $37 for PC 1 and $21 for PC 2. 
The percentage of low-income consumers who experience a net LCC cost is 
73 percent for PC 1 and 68 percent for PC 2. Low-income households will 
experience an installed cost increase of $169 for PC 1 (60 percent 
price increase relative to baseline unit) and $179 for PC 2 (57 percent 
price increase relative to baseline unit). The simple payback period 
for low-income households is 7.6 years for PC 1 and 6.4 years for PC 2.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$85.3 million to a decrease of $36.8 million, which corresponds to 
decreases of 53.9 percent and 23.2 percent, respectively. DOE estimates 
that industry must invest $73.9 million to completely redesign nearly 
all models to accommodate larger heat exchangers and new chassis 
designs.
    Overall, DOE estimates that less than 1 percent of current industry 
shipments meet the efficiencies required at TSL 4. A max-tech standard 
would require significant investment. Most manufacturers would need to 
incorporate larger heat exchangers, which would necessitate increasing 
chassis dimensions of both portable and whole-home units since most 
dehumidifiers cannot accommodate a larger heat exchanger within the 
existing cabinet structure. For the portable dehumidifier classes, 
which together account for nearly 98 percent of industry shipments, 
most manufacturers would need to make significant investments to adjust 
equipment and tooling to accommodate new dimensions across their entire 
product portfolio. DOE estimates that no portable dehumidifier 
shipments currently meet the max-tech efficiencies. Of the 15 portable 
dehumidifier OEMs, none currently offer any models that meet the max-
tech efficiencies. Whole-home dehumidifiers account for the remaining 2 
percent of industry shipments. DOE estimates that approximately 3 
percent of whole-home dehumidifier shipments meet max-tech 
efficiencies. DOE identified only three OEMs producing whole-home 
dehumidifiers for the U.S. market. Of those three whole-home OEMs, only 
one currently offers a PC 4 model that meets the max-tech level. The 
other two OEMs would therefore need to dedicate significant engineering 
resources to redesign their entire product portfolio to include larger 
heat exchangers, which would necessitate a change in dimensions and 
chassis designs. For product class 5, only one OEM manufacturers whole-
home dehumidifiers greater than 8.0 cu. ft. (PC 5). This OEM does not 
currently offer any models that meet the max-tech efficiency required. 
Given the limited number of whole-home OEMs, the limited number of 
models currently available that meet the max-tech efficiency levels, 
and the extent of the redesign required for the OEMs without any max-
tech product offerings, there is uncertainty whether whole-home 
products would remain sufficiently available to meet consumer demand at

[[Page 76564]]

the compliance date of amended standards set at TSL 4. At this TSL, DOE 
expects an estimated 23-percent drop in shipments compared to the no-
new-standards case shipments in the year the standard takes effect 
(2028), as some consumers may forgo or delay purchasing a new 
dehumidifier due to the increased upfront cost of standards-compliant 
models.
    The Secretary tentatively concludes that at TSL 4 for 
dehumidifiers, the benefits of energy savings, positive NPV of consumer 
benefits, emission reductions, and the estimated monetary value of the 
emissions reductions would be outweighed by the economic burden on a 
majority of consumers, and the impacts on manufacturers, including the 
large conversion costs, profit margin impacts that could result in a 
large reduction in INPV, and the lack of manufacturers currently 
offering products meeting the efficiency levels required at this TSL. 
Across all product classes, a majority of dehumidifier consumers (61 
percent) would experience a net LCC cost. Additionally, the average LCC 
savings would be negative for PC 1 and PC 3. DOE's consumer subgroup 
analysis indicates that both low-income and senior-only households 
would experience larger economic burdens compared to the national 
population. All portable dehumidifier product classes, which account 
for 97 percent of dehumidifiers in low-income households and 98 percent 
in senior-only households, have a negative average LCC savings and 
majority of consumers experience a net cost. For PC 2 which accounts 
for 71 percent of the low-income market share of all dehumidifiers, the 
average net LCC cost is $21 and 68 percent of the low-income consumers 
would experience a net cost. Weighted across all product classes, the 
average low-income consumer would experience a net LCC cost of $23 and 
69 percent of low-income consumers would experience a net cost at TSL 
4. The average senior-only household would experience a net LCC cost of 
$8 and 66 percent of consumers experiencing a net cost. The potential 
reduction in INPV could be as high as 53.9 percent. The drop in 
industry value and reduction in free cash flow after the compliance 
year is driven by a range of factors, but most notably the changes are 
driven by conversion cost investments manufacturers must make to 
redesign and produce more efficient products. Most manufacturers would 
need to dedicate significant capital and engineering resources to 
develop new chassis designs to accommodate larger heat exchangers. Due 
to the limited amount of engineering resources each manufacturer has, 
it is unclear if most manufacturers will be able to redesign their 
entire product offerings of dehumidifiers covered by this rulemaking in 
the 3-year compliance period. Consequently, the Secretary has 
tentatively concluded that TSL 4 is not economically justified.
    DOE then considered TSL 3, which represents efficiency level 3 for 
PC 1, PC 2, and PC 5, efficiency level 1 for PC 3, and efficiency level 
2 for PC 4. At this level, DOE expects that all product classes would 
incorporate a higher efficiency compressor. For PC 4 and 5, technology 
options include the addition of an ECM blower and a larger heat 
exchanger. TSL 3 would save an estimated 0.33 quads of energy, an 
amount DOE considers significant. Under TSL 3, the NPV of consumer 
benefit would be $1.26 billion using a discount rate of 7 percent, and 
$2.61 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 6.94 Mt of 
CO2, 1.76 thousand tons of SO2, 11.81 thousand 
tons of NOX, 0.01 tons of Hg, 51.94 thousand tons of 
CH4, and 0.06 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 3 is $0.40 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 3 is $0.33 billion using a 7-percent discount rate and $0.74 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 3 is $1.99 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 3 is $3.75 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    For portable dehumidifiers at TSL 3, the average LCC impact is a 
savings of $42 for PC 1, $81 for PC 2, and $31 for PC 3. The simple 
payback period is 0.9 years for PC 1, 0.6 years for PC 2, and 4.8 years 
for PC 3. The fraction of consumers experiencing a net LCC cost is 3 
percent for PC 1, 0 percent for PC 2, and 33 percent for PC 3. For 
whole-home dehumidifiers, the average LCC savings is $56 for PC 4 and 
$146 for PC 5. The simple payback period is 6.4 years for PC 4 and 5.7 
years for PC 5. The fraction of consumers experiencing a net LCC cost 
is 8 percent for PC 4 and 38 percent for PC 5. Weighting across all 
product classes, 1 percent of dehumidifier consumers would experience a 
net cost. The average LCC savings are positive for all product classes 
for the national consumer samples as well as for the low-income and 
senior-only consumer samples. At TSL 3, the percentage of low-income 
households that experience a net LCC cost is 7 percent for PC 1 and 0 
percent for PC 2.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$5.2 million to a decrease of $3.3 million, which correspond to 
decreases of 3.3 percent and 2.1 percent, respectively. DOE estimates 
that industry must invest $6.9 million to comply with standards set at 
TSL 3. DOE estimates that approximately 3 percent of industry shipments 
currently meet the efficiency levels analyzed at TSL 3.
    DOE estimates that approximately 2 percent of portable dehumidifier 
shipments currently meet the TSL 3 efficiency levels. At this level, 
manufacturers would likely incur product conversion costs to qualify, 
source, and test more efficient compressors. However, DOE does not 
expect portable dehumidifier manufacturers would need to adopt new or 
larger chassis designs because the proposed levels may be met through 
component swaps in existing chassis designs. Thus, DOE does not expect 
manufacturers would incur notable capital conversion costs to meet the 
efficiencies required. For whole-home dehumidifiers, DOE expects some 
manufacturers would need to adopt new or larger chassis designs to 
accommodate larger heat exchangers but not to the extent required at 
max-tech. For whole-home dehumidifier designs, DOE expects that the 
size differences would not necessitate capital investment since 
existing machinery could likely still be used. DOE estimates that 78 
percent of PC 4 shipments (which account for 85 percent of whole-home 
dehumidifier shipments) meet the efficiency level required. Of the 
three whole-home dehumidifier OEMs, two OEMs currently offer PC 4 
models that meet the efficiency required. As with TSL 4, whole-home 
dehumidifier manufacturers would likely need to completely redesign 
models that do not meet the required efficiencies. However, 
approximately 60 percent of PC 4 basic model listings (around 32 unique 
basic models), representing the full range of

[[Page 76565]]

existing sizes of PC 4 models (1.7 to 6.6 cu. ft.), already meet the 
efficiency level required.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that a standard set at 
TSL 3 for dehumidifiers would be economically justified. At this TSL, 
the average LCC savings for all product classes are positive. An 
estimated 1 percent of portable dehumidifier (PC 1, PC 2, and PC 3) and 
13 percent of whole-home dehumidifier (PC 4 and PC 5) consumers 
experience a net cost. The FFC national energy savings are significant 
and the NPV of consumer benefits is positive using both a 3-percent and 
7-percent discount rate. Notably, the benefits to consumers vastly 
outweigh the cost to manufacturers. At TSL 3, the NPV of consumer 
benefits, even measured at the more conservative discount rate of 7 
percent, is approximately 242 times higher than the maximum estimated 
manufacturers' loss in INPV. The standard levels at TSL 3 are 
economically justified even without weighing the estimated monetary 
value of emissions reductions. When those emissions reductions are 
included--representing $0.40 billion in climate benefits (associated 
with the average SC-GHG at a 7-percent discount rate), and $0.74 
billion (using a 3-percent discount rate) or $0.33 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes 
stronger still.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the 
proposed energy conservation standards, DOE notes that as compared to 
TSL 4, TSL 3 has shorter payback periods, smaller percentages of 
consumer experiencing a net cost, higher LCC savings for all product 
classes, a lower maximum decrease in INPV, and lower manufacturer 
conversion costs.
    Although DOE considered proposed amended standard levels for 
dehumidifiers by grouping the efficiency levels for each product class 
into TSLs, DOE evaluates all analyzed efficiency levels in its 
analysis. For portable dehumidifiers with capacities less than or equal 
to 50.0 pints per day, which account for 97 percent of the dehumidifier 
market, TSL 3 represents the maximum energy savings that does not 
result in a large percentage of consumers experiencing a net LCC cost. 
Efficiency levels above the proposed standard have lower LCC savings 
and a significantly larger percentage of consumers that experience a 
net cost. For portable dehumidifiers with capacities greater than 50.0 
pints per day, which accounts for 1.1 percent of the dehumidifier 
market, TSL 3 corresponds to EL 1, the only efficiency level with 
positive LCC savings and a majority of consumers either not impacted or 
positively impacted by the proposed standard. For whole-home 
dehumidifiers, which represent 1.6 percent of the dehumidifier market, 
TSL 3 corresponds to efficiency levels one level below the max-tech 
efficiency level. For PC 4, which accounts for approximately 85 of the 
whole-home dehumidifier shipments, one OEM (out of the three whole-home 
OEMs) currently offers one model that meets the max-tech level. Given 
the limited number of whole-home OEMs, the limited number of models 
currently available that meet the max-tech efficiency level, and the 
extent of the redesign required for the OEMs without any max-tech 
product offerings, there is a risk that the 3-year period between the 
announcement of the final rule and the compliance date of the amended 
energy conservation standard might be insufficient to design, test, and 
manufacture the necessary number of whole-home products to meet 
consumer demand. For PC 5, a majority of consumers would experience 
negative LCC savings at the max-tech efficiency level. At the proposed 
TSL, the LCC savings are higher and the percent negatively impacted 
consumers are lower compared to the max-tech efficiency level.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for dehumidifiers at TSL 3. The 
proposed amended energy conservation standards for dehumidifiers, which 
are expressed as IEF, are shown in Table V.34.

     Table V.34--Proposed Amended Energy Conservation Standards for
                              Dehumidifiers
------------------------------------------------------------------------
                                                             Minimum
                                                            integrated
                                                          energy factor
                     Product class                           (L/kWh)
                                                        ----------------
                                                              TSL 3
------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00 Pints/Day.........             1.70
PC 2: Portable Dehumidifiers 25.01-50.00 Pints/Day.....             2.01
PC 3: Portable Dehumidifiers >50.00 Pints/Day..........             3.10
PC 4: Whole-Home Dehumidifiers <=8.0 cu. ft. Case                   2.22
 Volume................................................
PC 5: Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume             3.81
------------------------------------------------------------------------

2. Annualized Benefits and Costs of the Proposed Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022$) of the 
benefits from operating products that meet the proposed standards 
(consisting primarily of operating cost savings from using less energy, 
minus increases in product purchase costs), and (2) the annualized 
monetary value of the climate and health benefits from emission 
reductions.
    Table V.35 shows the annualized values for dehumidifiers under TSL 
3, expressed in 2022$. The results under the primary estimate are as 
follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for dehumidifiers is $8.55 million per year in 
increased equipment costs, while the estimated annual benefits are 
$142.04 million from reduced equipment operating

[[Page 76566]]

costs, $22.85 million from GHG reductions, and $34.54 million from 
reduced NOX and SO2 emissions. In this case, the 
net benefit amounts to $190.89 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for dehumidifiers is $7.89 
million per year in increased equipment costs, while the estimated 
annual benefits are $157.99 million in reduced operating costs, $22.85 
million from GHG reductions, and $42.30 million from reduced 
NOX and SO2 emissions. In this case, the net 
benefit amounts to $215.24 million per year.

      Table V.35--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Dehumidifiers
                                                     [TSL 3]
----------------------------------------------------------------------------------------------------------------
                                                                            Million 2022$/year
                                                         -------------------------------------------------------
                                                              Primary      Low-net-benefits    High-net-benefits
                                                             estimate          estimate            estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................          157.99              153.04              163.15
Climate Benefits *......................................           22.85               22.66               22.93
Health Benefits **......................................           42.30               41.95               42.42
Total Benefits [dagger].................................          223.14              217.65              228.50
Consumer Incremental Product Costs [Dagger].............            7.89                7.94                7.77
Net Benefits............................................          215.24              209.71              220.74
Change in Producer Cashflow (INPV [Dagger][Dagger]).....     (0.5)-(0.3)         (0.5)-(0.3)         (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.........................          142.04              138.10              146.50
Climate Benefits * (3% discount rate)...................           22.85               22.66               22.93
Health Benefits **......................................           34.54               34.31               34.64
Total Benefits [dagger].................................          199.44              195.07              204.06
Consumer Incremental Product Costs [Dagger].............            8.55                8.58                8.44
Net Benefits............................................          190.89              186.49              195.62
Change in Producer Cashflow (INPV [Dagger][Dagger]).....     (0.5)-(0.3)         (0.5)-(0.3)         (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
  results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057. The
  Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
  AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
  incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the
  Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in sections IV.F.1 and IV.H.3 of this document. Note that the
  Benefits and Costs may not sum to the Net Benefits due to rounding.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
  document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
  at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate and
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the
  Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. See section IV.L of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
  impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
  impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
  the increased costs to the manufacturer to manufacture the product and ending with the increase in price
  experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
  (i.e., manufacturer impact analysis, or ``MIA''). See section IV.J of this document. In the detailed MIA, DOE
  models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs,
  cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the INPV.
  The change in INPV is the present value of all changes in industry cash flow, including changes in production
  costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated
  using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer
  impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average
  cost of capital). For dehumidifiers, the annualized change in INPV ranges from -$0.5 million to -$0.3 million.
  DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically
  justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
  markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
  the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit
  Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
  proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
  change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to
  provide additional context for assessing the estimated impacts of this proposal to society, including
  potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866.
  If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the
  annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would
  range from $190.4 million to $190.6 million at 7-percent discount rate.


[[Page 76567]]

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use product-specific 
certification templates to certify compliance to DOE. For 
dehumidifiers, the certification template reflects the general 
certification requirements specified at 10 CFR 429.12. As discussed in 
the previous paragraphs, DOE is not proposing to amend the product-
specific certification requirements for these products.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563 and 14094

    E.O. 12866, ``Regulatory Planning and Review,'' as supplemented and 
reaffirmed by E.O. 13563, ``Improving Regulation and Regulatory 
Review,'' 76 FR 3821 (Jan. 21, 2011) and amended by E.O. 14094, 
``Modernizing Regulatory Review,'' 88 FR 21879 (April 11, 2023), 
requires agencies, to the extent permitted by law, to (1) propose or 
adopt a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') in the Office 
of Management and Budget (``OMB'') has emphasized that such techniques 
may include identifying changing future compliance costs that might 
result from technological innovation or anticipated behavioral changes. 
For the reasons stated in the preamble, this proposed regulatory action 
is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 
12866, DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the technical support 
document for this rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, unless 
the agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has 
prepared the following IRFA for the products that are the subject of 
this rulemaking.
    For manufacturers of dehumidifiers, the SBA has set a size 
threshold, which defines those entities classified as ``small 
businesses'' for the purposes of the statute. DOE used the SBA's small 
business size standards to determine whether any small entities would 
be subject to the requirements of the rule. (See 13 CFR part 121.) The 
size standards are listed by North American Industry Classification 
System (NAICS) code and industry description and are available at 
www.sba.gov/document/support--table-size-standards. Manufacturing of 
portable dehumidifiers is classified under NAICS 335210, ``Small 
Electrical Appliance Manufacturing'' and manufacturing of whole-home 
dehumidifiers is classified under NAICS 333415, ``Air Conditioning and 
Warm Air Heating Equipment and Commercial and Industrial Refrigeration 
Equipment Manufacturing.'' For NAICS 335210, the SBA sets a threshold 
of 1,500 employees or less and for NAICS 333415, the SBA sets a 
threshold of 1,250 employees or less, for an entity to be considered as 
a small business for these categories. For the purpose of this IRFA, 
DOE used the higher employee limit of 1,500 in order to establish a 
more inclusive threshold for what determines a ``small business.''
1. Description of Reasons Why Action Is Being Considered
    DOE is proposing amended energy conservation standards for 
dehumidifiers. EPCA authorizes DOE to regulate the energy efficiency of 
a number of consumer products and certain industrial equipment. Title 
III, Part B of EPCA established the Energy Conservation Program for 
Consumer Products Other Than Automobiles. These products include 
dehumidifiers, the subject of this document. (42 U.S.C. 6295(cc)) In a 
final rule published on June 13, 2016, DOE prescribed the current 
energy conservation standards for dehumidifiers manufactured on and 
after June 13, 2019. 81 FR 38338. EPCA provides that, not later than 6 
years after the issuance of any final rule establishing or amending a 
standard, DOE must publish either a notice of determination that 
standards for the product do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m)(1)) This propose 
rulemaking is in accordance with DOE's obligations under EPCA.
2. Objectives of, and Legal Basis for, Rule
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include dehumidifiers, 
the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed 
energy conservation standards for these products. Id. EPCA further 
provides that, not later than 6 years after the issuance of any final 
rule establishing or

[[Page 76568]]

amending a standard, DOE must publish either a notice of determination 
that standards for the product do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m)(1))
3. Description on Estimated Number of Small Entities Regulated
    DOE conducted a market assessment using public information and 
subscription-based company reports to identify potential small 
manufacturers. DOE began its assessment by compiling a product database 
of dehumidifier models available in the United States. To develop a 
comprehensive product database of dehumidifier basic models, DOE 
reviewed its Compliance Certification Database (CCD),\71\ supplemented 
by information from California Energy Commission's Modernized Appliance 
Efficiency Database System (MAEDbS),\72\ EPA's ENERGY STAR Product 
Finder data set,\73\ individual company websites, and prior 
dehumidifier rulemakings. DOE then reviewed the comprehensive product 
database to identify the original equipment manufacturers (OEMs) of the 
dehumidifier models identified. DOE consulted publicly available data, 
such as manufacturer websites, manufacturer specifications and product 
literature, import/export logs (e.g., bills of lading from Panjiva 
\74\), and basic model numbers, to identify OEMs of covered 
dehumidifiers. DOE further relied on public data and subscription-based 
market research tools (e.g., Dun & Bradstreet reports \75\) to 
determine company, location, headcount, and annual revenue. DOE 
screened out companies that do not offer products covered by this 
rulemaking, do not meet the SBA's definition of a ``small business,'' 
or are foreign-owned and operated.
---------------------------------------------------------------------------

    \71\ U.S. Department of Energy's Compliance Certification 
Database is available at: www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (Last accessed February 21, 2023).
    \72\ California Energy Commission's Modernized Appliance 
Efficiency Database System is available at: 
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx. 
(Last accessed February 21, 2023.)
    \73\ U.S. Environmental Protection Agency's ENERGY STAR Product 
Finder data set is available at: www.energystar.gov/productfinder/ 
(Last accessed February 21, 2023.)
    \74\ S&P Global. Panjiva Market Intelligence is available at: 
panjiva.com/import-export/United-States (Last accessed May 5, 2022).
    \75\ The Dun & Bradstreet Hoovers subscription login is 
available at app.dnbhoovers.com. (Last accessed March 23, 2023).
---------------------------------------------------------------------------

    Based on its review, DOE identified 20 OEMs that sell dehumidifiers 
in the United States. DOE then determined that of the 20 OEMs, 19 were 
either large OEMs or are foreign owned and operated. Therefore, DOE 
tentatively determined that one company is a small, domestic 
manufacturer that meets the SBA's definition of a ``small business'' 
(i.e., the company has 1,500 employees or less) and manufactures 
products covered by this rulemaking. This small business manufactures 
whole-home dehumidifiers <=8.0 cubic feet (Product Class 4).
    DOE reached out to this small business and invited them to 
participate in voluntary interviews. However, this small business did 
not consent to participate in the voluntary interviews conducted in 
support of the NOPR analysis. DOE also requested information about 
small businesses and potential impacts on small businesses while 
interviewing larger manufacturers.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    DOE reviewed its product database and identified 35 basic models of 
whole-home dehumidifiers with a capacity of under 8.0 cubic feet 
(Product Class 4) manufactured by this small, domestic OEM. Of those 35 
models, 23 models currently meet the TSL 3 efficiency level. Should 
this small business choose to redesign the 12 models that do not 
currently meet the proposed amended standard, DOE estimates that the 
small business would need to invest $337,000 in product conversion 
costs to redesign all 12 models to incorporate higher efficiency 
compressors, ECM blowers, and larger heat exchangers. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make product 
designs comply with amended energy conservation standards. DOE's 
engineering analysis indicates manufacturers would likely be able to 
produce compliant products with existing machinery, and, therefore, DOE 
tentatively does not expect meeting the proposed standard would require 
new equipment or tooling. DOE's analysis focused on the investments 
associated with amended standards; investments associated with changes 
in regulations by other State or Federal agencies (i.e., refrigerant 
regulations) are not attributed to amended standards. Based on annual 
revenue estimates from Dun & Bradstreet, DOE estimated the company's 
annual revenue to be $221 million. The total conversion costs of 
$337,000 are less than 0.1 percent of company revenue over the 3-year 
conversion period.
    DOE seeks comments, information, and data on the number of small 
businesses in the industry, the names of those small businesses, and 
their market shares by product class. DOE also requests comment on the 
potential impacts of the proposed standards on small manufacturers.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the proposed rule.
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposed rule, represented by 
TSL 3. In reviewing alternatives to the proposed rule, DOE examined 
energy conservation standards set at lower efficiency levels. While TSL 
1 and TSL 2 would reduce the impacts on small business manufacturers, 
it would come at the expense of a reduction in energy savings. TSL 1 
achieves 98 percent lower energy savings compared to the energy savings 
at TSL 3. TSL 2 achieves 95 percent lower energy savings compared to 
the energy savings at TSL 3.
    Based on the presented discussion, establishing standards at TSL 3 
balances the benefits of the energy savings at TSL 3 with the potential 
burdens placed on dehumidifier manufacturers, including small business 
manufacturers. Accordingly, DOE does not propose one of the other TSLs 
considered in the analysis, or the other policy alternatives examined 
as part of the regulatory impact analysis and included in chapter 17 of 
the NOPR TSD.
    Additional compliance flexibilities may be available through other 
means. EPCA provides that a manufacturer whose annual gross revenue 
from all of its operations does not exceed $8 million may apply for an 
exemption from all or part of an energy conservation standard for a 
period not longer than 24 months after the effective date of a final 
rule establishing the standard. (42 U.S.C. 6295(t)) Additionally, 
manufacturers subject to DOE's energy efficiency standards may apply to 
DOE's Office of Hearings and Appeals for exception relief under certain 
circumstances. Manufacturers should refer to 10 CFR part 430, subpart 
E, and 10 CFR part 1003 for additional details.

[[Page 76569]]

C. Review Under the Paperwork Reduction Act

    Manufacturers of dehumidifiers must certify to DOE that their 
products comply with any applicable energy conservation standards. In 
certifying compliance, manufacturers must test their products according 
to the DOE test procedures for dehumidifiers, including any amendments 
adopted for those test procedures. DOE has established regulations for 
the certification and recordkeeping requirements for all covered 
consumer products and commercial equipment, including dehumidifiers. 
(See generally 10 CFR part 429). The collection-of-information 
requirement for the certification and recordkeeping is subject to 
review and approval by OMB under the Paperwork Reduction Act (``PRA''). 
This requirement has been approved by OMB under OMB control number 
1910-1400. Public reporting burden for the certification is estimated 
to average 35 hours per response, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
rulemaking qualifies for categorical exclusion B5.1 because it is a 
rulemaking that establishes energy conservation standards for consumer 
products or industrial equipment, none of the exceptions identified in 
categorical exclusion B5.1(b) apply, no extraordinary circumstances 
exist that require further environmental analysis, and it otherwise 
meets the requirements for application of a categorical exclusion. See 
10 CFR 1021.410. DOE will complete its NEPA review before issuing the 
final rule.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this proposed rule and has 
tentatively determined that it would not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. EPCA governs 
and prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of this proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) 
Therefore, no further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any, (2) clearly 
specifies any effect on existing Federal law or regulation, (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction, (4) specifies the retroactive 
effect, if any, (5) adequately defines key terms, and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, this proposed rule meets the 
relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C. 
1531). For a proposed regulatory action likely to result in a rule that 
may cause the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector of $100 million or more in any 
one year (adjusted annually for inflation), section 202 of UMRA 
requires a Federal agency to publish a written statement that estimates 
the resulting costs, benefits, and other effects on the national 
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal 
agency to develop an effective process to permit timely input by 
elected officers of State, local, and Tribal governments on a proposed 
``significant intergovernmental mandate,'' and requires an agency plan 
for giving notice and opportunity for timely input to potentially 
affected small governments before establishing any requirements that 
might significantly or uniquely affect them. On March 18, 1997, DOE 
published a statement of policy on its process for intergovernmental 
consultation under UMRA. 62 FR 12820. DOE's policy statement is also 
available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    This rule does not contain a Federal intergovernmental mandate, nor 
is it expected to require expenditures of $100 million or more in any 
one year by the private sector. As a result, the analytical 
requirements of UMRA do not apply.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires

[[Page 76570]]

Federal agencies to issue a Family Policymaking Assessment for any rule 
that may affect family well-being. This rule would not have any impact 
on the autonomy or integrity of the family as an institution. 
Accordingly, DOE has concluded that it is not necessary to prepare a 
Family Policymaking Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed rule would not result in 
any takings that might require compensation under the Fifth Amendment 
to the U.S. Constitution.

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

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review 
most disseminations of information to the public under information 
quality guidelines established by each agency pursuant to general 
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPR under the OMB and DOE guidelines and has concluded 
that it is consistent with applicable policies in those guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to OIRA at OMB, 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that this regulatory action, which 
proposes amended energy conservation standards for dehumidifiers, is 
not a significant energy action because the proposed standards are not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on this proposed rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\76\ Generation of this report involved a rigorous, formal, and 
documented evaluation using objective criteria and qualified and 
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the 
productivity and management effectiveness of programs and/or projects. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve DOE's analyses. DOE is in the 
process of evaluating the resulting report.\77\
---------------------------------------------------------------------------

    \76\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last 
accessed DATE).
    \77\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

VII. Public Participation

A. Participation in the Webinar

    The time and date the webinar meeting are listed in the DATES 
section at the beginning of this document. Webinar registration 
information, participant instructions, and information about the 
capabilities available to webinar participants will be published on 
DOE's website: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=24. Participants are responsible for ensuring 
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
proposed rule, or who is representative of a group or class of persons 
that has an interest in these issues, may request an opportunity to 
make an oral presentation at the webinar. Such persons may submit to 
[email protected]. Persons who wish to speak 
should include with their request a computer file in WordPerfect, 
Microsoft Word, PDF, or text (ASCII) file format that briefly describes 
the nature of their interest in this proposed rulemaking and the topics 
they wish to discuss. Such persons should also provide a daytime 
telephone number where they can be reached.

C. Conduct of the Webinar

    DOE will designate a DOE official to preside at the webinar/public 
meeting and may also use a professional facilitator to aid discussion. 
The meeting will not be a judicial or evidentiary-type public hearing, 
but DOE will conduct it in accordance with section 336 of EPCA (42 
U.S.C. 6306). A court reporter will be present to record the 
proceedings and prepare a transcript. DOE reserves the right to 
schedule the order of presentations and to establish the procedures 
governing the conduct of the webinar. There shall not be discussion of 
proprietary information, costs or prices, market

[[Page 76571]]

share, or other commercial matters regulated by U.S. anti-trust laws. 
After the webinar and until the end of the comment period, interested 
parties may submit further comments on the proceedings and any aspect 
of the proposed rulemaking.
    The webinar will be conducted in an informal, conference style. DOE 
will a general overview of the topics addressed in this rulemaking, 
allow time for prepared general statements by participants, and 
encourage all interested parties to share their views on issues 
affecting this propose rulemaking. Each participant will be allowed to 
make a general statement (within time limits determined by DOE), before 
the discussion of specific topics. DOE will permit, as time permits, 
other participants to comment briefly on any general statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly. Participants should 
be prepared to answer questions by DOE and by other participants 
concerning these issues. DOE representatives may also ask questions of 
participants concerning other matters relevant to this propose 
rulemaking. The official conducting the webinar/public meeting will 
accept additional comments or questions from those attending, as time 
permits. The presiding official will announce any further procedural 
rules or modification of the above procedures that may be needed for 
the proper conduct of the webinar.
    A transcript of the webinar will be included in the docket, which 
can be viewed as described in the Docket section at the beginning of 
this document. In addition, any person may buy a copy of the transcript 
from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, 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 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).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    (1) DOE requests comment on the effects of EPA and CARB regulations 
on refrigerant choices and on whether changes in refrigerant will 
affect manufacturer's ability to achieve the efficiency levels in the 
NOPR analysis and the availability of high-efficiency R-32 compressors.
    (2) DOE requests comment regarding consumer's dehumidifier usage 
patterns and whether consumers typically purchase multiple smaller 
dehumidifiers to meet dehumidification

[[Page 76572]]

requirements as opposed to a single, higher capacity dehumidifier.
    (3) DOE requests comment on whether limiting needed chassis size 
increases are sufficient to preserve consumer utility at the max-tech 
level.
    (4) DOE requests comment on the incremental MPCs from the NOPR 
engineering analysis.
    (5) DOE seeks available data on installation costs for baseline and 
more efficient units.
    (6) DOE seeks comment on the assumption that dehumidifier consumers 
are most likely to replace a broken unit rather than repair it. DOE 
also seeks available data on the repair frequency.
    (7) DOE seeks data and comment on its efficiency distribution 
estimate and the assumption of an annual efficiency improvement of 0.25 
percent and the expected market respond to updated ENERGY STAR 6.0 
specifications.
    (8) DOE requests comment on its tentative conclusion that 
refrigerant desiccant dehumidifier manufacturers would be similarly 
impacted by potential amended standards and therefore would not warrant 
a separate subgroup analysis.
    (9) DOE requests comment on how to address the climate benefits and 
other effects of the proposal.
    (10) DOE seeks comments, information, and data on the capital 
conversion costs and product conversion costs estimated for each TSL.
    (11) DOE seeks comment on whether manufacturers expect 
manufacturing capacity constraints or engineering resource constraints 
would limit product availability to consumers in the timeframe of the 
amended standard compliance date (2028).
    (12) DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of dehumidifiers associated with 
multiple DOE standards or product-specific regulatory actions of other 
Federal agencies.
    (13) DOE requests comments on the magnitude of costs associated 
with transitioning dehumidifier products and production facilities to 
accommodate low-GWP refrigerants that would be incurred between the 
publication of this NOPR and the proposed compliance date of amended 
standards. Quantification and categorization of these costs, such as 
engineering efforts, testing lab time, certification costs, and capital 
investments (e.g., new charging equipment), would enable DOE to refine 
its analysis.
    (14) DOE seeks comments, information, and data on the number of 
small businesses in the industry, the names of those small businesses, 
and their market shares by product class. DOE also requests comment on 
the potential impacts of the proposed standards on small manufacturers.
    (15) Additionally, DOE welcomes comments on other issues relevant 
to the conduct of this rulemaking that may not specifically be 
identified in this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects in 10 CFR Part 430

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

Signing Authority

    This document of the Department of Energy was signed on October 27, 
2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary for 
Energy Efficiency and Renewable Energy, pursuant to delegated authority 
from the Secretary of Energy. That document with the original signature 
and date is maintained by DOE. For administrative purposes only, and in 
compliance with requirements of the Office of the Federal Register, the 
undersigned DOE Federal Register Liaison Officer has been authorized to 
sign and submit the document in electronic format for publication, as 
an official document of the Department of Energy. This administrative 
process in no way alters the legal effect of this document upon 
publication in the Federal Register.

    Signed in Washington, DC, on October 27, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy

    For the reasons stated in the preamble, DOE is proposing to amend 
part 430 of Chapter II of Title 10, Code of Federal Regulations as set 
forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority:  42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Amend Sec.  430.32 by revising paragraph (v) to read as follows:


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

* * * * *
    (v) Dehumidifiers. (1) Dehumidifiers manufactured on or after June 
13, 2019, and before [date 3 years after date of publication of the 
final rule], shall have an integrated energy factor that meets or 
exceeds the following values:

------------------------------------------------------------------------
                                                              Minimum
                                                            integrated
   Portable dehumidifier product capacity (pints/day)      energy factor
                                                           (liters/kWh)
------------------------------------------------------------------------
25.00 or less...........................................            1.30
25.01-50.00.............................................            1.60
50.01 or more...........................................            2.80
------------------------------------------------------------------------
Whole-home dehumidifier product case volume               ..............
(cubic feet)
------------------------------------------------------------------------
8.0 or less.............................................            1.77
More than 8.0...........................................            2.41
------------------------------------------------------------------------

    (2) Dehumidifiers manufactured on or after [date 3 years after date 
of publication of the final rule], shall have an integrated energy 
factor that meets or exceeds the following values:

[[Page 76573]]



------------------------------------------------------------------------
                                                              Minimum
                                                            integrated
   Portable dehumidifier product capacity (pints/day)      energy factor
                                                           (liters/kWh)
------------------------------------------------------------------------
25.00 or less...........................................            1.70
25.01-50.00.............................................            2.01
50.01 or more...........................................            3.10
------------------------------------------------------------------------
Whole-home dehumidifier product case volume               ..............
(cubic feet)
------------------------------------------------------------------------
8.0 or less.............................................            2.22
More than 8.0...........................................            3.81
------------------------------------------------------------------------

* * * * *
[FR Doc. 2023-24106 Filed 11-3-23; 8:45 am]
BILLING CODE 6450-01-P

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