Energy Conservation Program: Energy Conservation Standards for Dishwashers, 31398-31485 [2024-08212]
Download as PDF
<![CDATA[
31398
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE–2019–BT–STD–0039]
RIN 1904–AF60
Energy Conservation Program: Energy
Conservation Standards for
Dishwashers
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
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 dishwashers. In this direct
final rule, the U.S. Department of
Energy (‘‘DOE’’) is adopting amended
energy conservation standards for
dishwashers. DOE has determined that
the amended energy conservation
standards for these products would
result in significant conservation of
energy and are technologically feasible
and economically justified.
DATES: The effective date of this rule is
August 22, 2024. If adverse comment are
received by August 12, 2024 and DOE
determines that such comments may
provide a reasonable basis for
withdrawal of the direct final rule under
42 U.S.C. 6295(o), a timely withdrawal
of this rule will be published in the
Federal Register. The incorporation by
reference of certain material listed in
this rule was approved by the Director
as of February 17, 2023. If no such
adverse comments are received,
compliance with the amended standards
established for dishwashers in this
direct final rule is required on and after
April 23, 2027. Comments regarding the
likely competitive impact of the
standards contained in this direct final
rule should be sent to the Department of
Justice contact listed in the ADDRESSES
section on or before May 24, 2024.
ADDRESSES: The docket for this
rulemaking, which includes Federal
Register notices, public meeting
attendee lists and transcripts,
comments, and other supporting
documents/materials, is available for
review at www.regulations.gov. All
documents in the docket are listed in
the www.regulations.gov index.
However, not all documents listed in
the index may be publicly available,
such as information that is exempt from
public disclosure.
The docket web page can be found at
www.regulations.gov/docket/EERE-
khammond on DSKJM1Z7X2PROD with RULES3
SUMMARY:
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
2019-BT-STD-0039. The docket web
page contains instructions on how to
access all documents, including public
comments, in the docket.
For further information on how to
submit a comment or review other
public comments and the docket,
contact the Appliance and Equipment
Standards Program staff at (202) 287–
1445 or by email:
ApplianceStandardsQuestions@
ee.doe.gov.
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 standards
contained in this direct final rule.
Interested persons may contact the
Antitrust Division at
www.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 direct final rule.
FOR FURTHER INFORMATION CONTACT:
Dr. Carl Shapiro, U.S. Department of
Energy, Office of Energy Efficiency and
Renewable Energy, Building
Technologies Office, EE–5B, 1000
Independence Avenue SW, Washington,
DC 20585–0121. Telephone: (202) 287–
5649. Email:
ApplianceStandardsQuestions@
ee.doe.gov.
Ms. Amelia Whiting, U.S. Department
of Energy, Office of the General Counsel,
GC–33, 1000 Independence Avenue SW,
Washington, DC 20585–0121.
Telephone: (240) 306–7097. Email:
Amelia.Whiting@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final 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. Current Test Procedure
3. The Joint Agreement
III. General Discussion
A. Scope of Coverage
B. Fairly Representative of Relevant Points
of View
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)
PO 00000
Frm 00002
Fmt 4701
Sfmt 4700
c. Energy Savings
d. Lessening of Utility or Performance of
Products
e. Impact of Any Lessening of Competition
f. Need for National Energy and Water
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
B. Screening Analysis
1. Screened-Out Technologies
a. Desiccant Drying
b. Reduced Inlet-Water Temperature
c. Supercritical Carbon Dioxide Washing
d. Ultrasonic Washing
e. Thermoelectric Heat Pumps
f. Water Re-Use System
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy and Water Use Analysis
F. Life-Cycle Cost and Payback Period
Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy and Water Consumption
4. Energy and Water Prices
a. Energy Prices
b. Water and Wastewater 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 and Water Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Low-Income Households
2. Senior-Only Households
3. Well-Water Households
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. 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 Dioxide
b. Social Cost of Methane and Nitrous
Oxide
c. Sensitivity Analysis Using EPA’s New
SC–GHG Estimates
2. Monetization of Other Emissions
Impacts
M. Utility Impact Analysis
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
N. Employment Impact Analysis
O. Regulatory Impact Analysis
P. Other Comments
1. Non-Regulatory Approaches
2. Test Procedure Usage Factors
3. National Academy of Sciences Report
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 and Water
Savings
b. Net Present Value of Consumer Costs
and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of
Products
a. Cleaning Performance
b. Drying Performance
c. Cycle Length
d. Water Dilution
e. Equipment Lifetime and Energy Savings
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 Dishwashers Standards
2. Annualized Benefits and Costs of the
Adopted Standards
VI. Severability
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866,
13563, and 14094
B. Review Under the Regulatory Flexibility
Act
C. Review Under the Paperwork Reduction
Act
D. Review Under the National
Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates
Reform Act of 1995
H. Review Under the Treasury and General
Government Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General
Government Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Materials Incorporated by Reference
N. Congressional Notification
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
VIII. Approval of the Office of the Secretary
I. Synopsis of the Direct Final 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
dishwashers, the subject of this direct
final rule. (42 U.S.C. 6292(a)(6))
Pursuant to EPCA, any new or
amended energy conservation standard
must, among other things, 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
significant conservation of energy. (42
U.S.C. 6295(o)(3)(B))
In light of the above and under the
authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct
final rule amending energy conservation
standards for dishwashers.
The adopted standards in this direct
final rule were proposed in a letter
submitted to DOE jointly by groups
representing manufacturers, energy and
environmental advocates, consumer
groups, and a utility. This letter, titled
‘‘Energy Efficiency Agreement of 2023’’
(hereafter, the ‘‘Joint Agreement’’ 3),
recommends specific energy
conservation standards for dishwashers
that, in the commenters’ view, would
satisfy the EPCA requirements in 42
U.S.C. 6295(o). DOE subsequently
received letters of support for the Joint
Agreement from States—including New
York, California, and Massachusetts 4—
and utilities—including San Diego Gas
1 All references to EPCA in this document refer
to the statute as amended through the Energy Act
of 2020, Public Law 116–260 (Dec. 27, 2020), which
reflect the last statutory amendments that impact
Parts A and A–1 of EPCA.
2 For editorial reasons, upon codification in the
U.S. Code, Part B was redesignated Part A.
3 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0055.
4 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0056.
PO 00000
Frm 00003
Fmt 4701
Sfmt 4700
31399
and Electric (‘‘SDG&E’’) and Southern
California Edison (‘‘SCE’’) 5—advocating
for the adoption of the recommended
standards.
In accordance with the direct final
rule provisions at 42 U.S.C. 6295(p)(4),
DOE has determined that the
recommendations contained in the Joint
Agreement are compliant with 42 U.S.C.
6295(o). As required by 42 U.S.C.
6295(p)(4)(A)(i), DOE is also
simultaneously publishing a notice of
proposed rulemaking (‘‘NOPR’’) that
contains identical standards to those
adopted in this direct final rule.
Consistent with the statute, DOE is
providing a 110-day public comment
period on the direct final rule. (42
U.S.C. 6295(p)(4)(B)) If DOE determines
that any comments received provide a
reasonable basis for withdrawal of the
direct final rule under 42 U.S.C. 6295(o)
or any other applicable law, DOE will
publish the reasons for withdrawal and
continue the rulemaking under the
NOPR. (42 U.S.C. 6295(p)(4)(C)) See
section II.A of this document for more
details on DOE’s statutory authority.
The amended standards that DOE is
adopting in this direct final rule are the
efficiency levels recommended in the
Joint Agreement (shown in Table I.1)
expressed in terms of maximum
estimated annual energy use (‘‘EAEU’’)
in kilowatt hours per year (‘‘kWh/yr’’)
and maximum per cycle water
consumption in gallons per cycle (‘‘gal/
cycle’’) as measured according to DOE’s
dishwasher test procedure codified at
title 10 of the Code of Federal
Regulations (‘‘CFR’’) part 430, subpart B,
appendix C2 (‘‘appendix C2’’).
Table I.1 The amended standards
recommended in the Joint Agreement
are represented as trial standard level
(‘‘TSL’’) 3 in this document (hereinafter
the ‘‘Recommended TSL’’) and are
described in section V.A of this
document. The Joint Agreement’s
standards for dishwashers apply to all
products listed in Table I.1 and
manufactured in, or imported into, the
United States starting 3 years after
publication of a final rule in the Federal
Register.
5 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0057.
E:\FR\FM\24APR3.SGM
24APR3
31400
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table 1.1 Energy Conservation Standards for Dishwashers (Compliance Starting
April 23, 2027)
Product Class
Maximum Estimated Annual
Energy Use
Maximum Per-Cycle Water
Consumption
(kWh/year)
(£al/cycle)
PC 1: Standard-Size Dishwasher*
223
3.3
PC 2: Compact-Size Dishwasher
174
3.1
• The energy conservation standards in this table do not apply to standard-size dishwashers with a cycle
time for the normal cycle of 60 minutes or less.
A. Benefits and Costs to Consumers
Table I.2 summarizes DOE’s
evaluation of the economic impacts of
the adopted standards on consumers of
dishwashers, as measured by the
average life-cycle cost (‘‘LCC’’) savings
and the simple payback period
(‘‘PBP’’).6 The average LCC savings are
positive for all product classes, and the
PBP is less than the average lifetime of
dishwashers, which is estimated to be
15.2 years (see section IV.F.6 of this
document).
Table 1.2 Impacts of Adopted Energy Conservation Standards on Consumers of
Dishwashers (the Recommended TSL)
Average LCC Savings
Simple Payback Period
(2022$)
(vears)
$17
$32
3.9
0.0
DOE’s analysis of the impacts of the
adopted standards on consumers is
described in section IV.F of this
document.
DOE’s analysis of the impacts of the
adopted standards on manufacturers is
described in section IV.J and section
V.B.2 of this document.
B. Impact on Manufacturers 7
C. National Benefits and Costs
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 (2024–2056). Using a real
discount rate of 8.5 percent, DOE
estimates that the INPV for
manufacturers of dishwashers in the
case without amended standards is
$735.8 million. Under the adopted
standards, which align with the
Recommended TSL for dishwashers,
DOE estimates the change in INPV to
range from –20.2 percent to –13.1
percent, which represents a change in
INPV of approximately ¥$148.8 million
to ¥$96.7 million. In order to bring
products into compliance with amended
standards, it is estimated that industry
will incur total conversion costs of
$126.9 million.
DOE’s analyses indicate that the
adopted energy conservation standards
for dishwashers would save a significant
amount of energy. Relative to the case
without amended standards, the lifetime
energy savings for dishwashers
purchased in the 30-year period that
begins in the anticipated year of
compliance with the amended standards
(2027–2056), amount to 0.31 quadrillion
British thermal units (‘‘Btu’’), or quads.8
This represents a savings of 2.6 percent
relative to the energy use of these
products in the case without amended
standards (referred to as the ‘‘no-newstandards case’’).
The cumulative net present value
(‘‘NPV’’) of total consumer benefits of
the standards for dishwashers ranges
from $1.23 billion (at a 7-percent
discount rate) to $2.90 billion (at a 3percent discount rate). This NPV
6 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.8 of this document). The
simple PBP, which is designed to compare specific
efficiency levels, is measured relative to the
baseline product (see section IV.F.9 of this
document).
7 All monetary values in this document are
expressed in 2022 dollars and, where appropriate,
are discounted to 2024 unless explicitly stated
otherwise.
8 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.1 of this document.
9 A metric ton is equivalent to 1.1 short tons.
Results for emissions other than CO2 are presented
in short tons.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00004
Fmt 4701
Sfmt 4700
expresses the estimated total value of
future operating-cost savings minus the
estimated increased product costs for
dishwashers purchased during the
period 2027–2056.
In addition, the adopted standards for
dishwashers are projected to yield
significant environmental benefits. DOE
estimates that the standards will result
in cumulative emission reductions (over
the same period as for energy savings)
of 9.48 million metric tons (‘‘Mt’’) 9 of
carbon dioxide (‘‘CO2’’), 1.41 thousand
tons of sulfur dioxide (‘‘SO2’’), 22.37
thousand tons of nitrogen oxides
(‘‘NOX’’), 98.97 thousand tons of
methane (‘‘CH4’’), 0.06 thousand tons of
nitrous oxide (‘‘N2O’’), and 0.01 tons of
mercury (‘‘Hg’’).10
DOE estimates the value of climate
benefits from a reduction in greenhouse
gases (‘‘GHG’’) using four different
estimates of the social cost of CO2 (‘‘SC–
CO2’’), the social cost of methane (‘‘SC–
CH4’’), and the social cost of nitrous
oxide (‘‘SC–N2O’’).11 Together these
represent the social cost of GHG (‘‘SC–
GHG’’). DOE used interim SC–GHG
10 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.
11 Estimated climate-related benefits are provided
in compliance with Executive Order 12866.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.001</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Standard-Size
Compact-Size
ER24AP24.000</GPH>
Product Class
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
values (in terms of benefit per ton of
GHG avoided) developed by an
Interagency Working Group on the
Social Cost of Greenhouse Gases
(‘‘IWG’’).12 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 $0.54 billion. DOE does not have
a single central SC–GHG point estimate
and it emphasizes the importance and
value of considering the benefits
calculated using all four sets of SC–GHG
estimates. DOE notes, however, that the
khammond on DSKJM1Z7X2PROD with RULES3
12 To monetize the benefits of reducing GHG
emissions this analysis uses values that are based
on the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published
February 2021 by the IWG. (‘‘February 2021 SC–
GHG TSD’’). www.whitehouse.gov/wp-content/
uploads/2021/02/TechnicalSupportDocument_
SocialCostofCarbonMethaneNitrousOxide.pdf.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
adopted standards would be
economically justified even without
inclusion of monetized benefits of
reduced GHG emissions.
DOE estimated the monetary health
benefits of SO2 and NOX emissions
reductions using benefit per ton
estimates from the U.S. Environmental
Protection Agency (‘‘EPA’’),13 as
discussed in section IV.L of this
document. DOE did not monetize the
reduction in mercury emissions because
the quantity is very small. DOE
estimated the present value of the health
benefits would be $0.37 billion using a
7-percent discount rate, and $0.94
billion using a 3-percent discount rate.14
13 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-tonreducing-pm25-precursors-21-sectors.
14 DOE estimates the economic value of these
emissions reductions resulting from the considered
PO 00000
Frm 00005
Fmt 4701
Sfmt 4700
31401
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
(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
benefits and costs expected to result
from the amended standards for
dishwashers. 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.
BILLING CODE 6450–01–P
TSLs for the purpose of complying with the
requirements of Executive Order 12866.
E:\FR\FM\24APR3.SGM
24APR3
31402
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table 1.3 Summary of Monetized Benefits and Costs of Adopted Energy
Conservation Standards for Dishwashers (TSL 3-the Recommended TSL)
Billion $2022
3% discount rate
Consumer Operating Cost Savings
3.16
Climate Benefits*
0.54
Health Benefits**
0.94
Total Benefitst
4.64
Consumer Incremental Product Costst
0.26
Net Monetized Benefitst
4.38
(0.15) - (0.10)
Change in Producer Cash Flow (INPV)tt
7% discount rate
Consumer Operating Cost Savings
1.38
Climate Benefits* (3% discount rate)
0.54
Health Benefits**
0.37
Total Benefitst
2.29
Consumer Incremental Product Costs;
0.15
Net Monetized Benefitst
2.13
Change in Producer Cash Flow (INPV)tt
(0.15) - (0.10)
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00006
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.002</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Note: This table presents the costs and benefits associated with dishwashers shipped in 2027-2056. These
results include consumer, climate, and health benefits that accrue after 2056 from the products shipped in
2027-2056.
* 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; however, DOE 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 IWG.
** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only
monetizing (for SO2 and NOx) PM2.s 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.s emissions. See section IV.L of this document for more details.
t 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
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31403
SC-GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated
using all four sets of SC-GHG estimates.
t Costs include incremental equipment costs as well as installation costs.
U 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.Hof 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 8.5 percent that is
estimated in the MIA (see chapter 12 of the direct fmal rule technical support document ("TSD") for a
complete description of the industry weighted average cost of capital). For dishwashers, the change in
INPV ranges from -$149 million to -$97 million. DOE accounts for that range oflikely impacts in
analyzing whether a TSL is economically justified. See section V.C of this document. DOE is presenting
the range of impacts to the INPV under two manufacturer 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 Tiered scenario, which models a reduction of manufacturer
markups due to reduced product differentiation as a result of amended standards. DOE includes the range
of estimated change in INPV in the previous 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 direct fmal rule to
society, including potential changes in production and consumption, which is consistent with OMB's
Circular A-4 and E.O. 12866. IfDOE were to include the INPV into the net benefit calculation for this
direct fmal rule, the net benefits would range from $4.23 billion to $4.28 billion at 3-percent discount rate
and would range from $1.98 billion to $2.03 billion at 7-percent discount rate. Parentheses () indicate
negative values.
The benefits and costs of the adopted
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.15
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
dishwashers shipped in 2027–2056. The
benefits associated with reduced
emissions achieved as a result of the
adopted standards are also calculated
based on the lifetime of dishwashers
shipped in 2027–2056. Total benefits for
both the 3-percent and 7-percent cases
are presented using the average GHG
social costs with 3-percent discount
rate.16 Estimates of total benefits are
presented for all four SC–GHG discount
rates in section V.B.8 of this document.
Table I.4 presents the total estimated
monetized benefits and costs associated
with the adopted 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
BILLING CODE 6450–01–P
15 To convert the time-series of costs and benefits
into annualized values, DOE calculated a present
value in 2024, 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., 2020 or 2030), and then
discounted the present value from each year to
2024. 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.
16 As discussed in section IV.L.1 of this
document, DOE agrees with the IWG that using
consumption-based discount rates (e.g., 3 percent)
is appropriate when discounting the value of
climate impacts. Combining climate effects
discounted at an appropriate consumption-based
discount rate with other costs and benefits
discounted at a capital-based rate (i.e., 7 percent) is
reasonable because of the different nature of the
types of benefits being measured.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00007
Fmt 4701
Sfmt 4700
cost of the standards adopted in this
rule is $14.0 million per year in
increased equipment costs, while the
estimated annual benefits are $127.2
million in reduced equipment operating
costs, $29.0 million in climate benefits,
and $34.3 million in health benefits. In
this case, the net benefit would amount
to $176.4 million per year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the standards is $14.0 million per year
in increased equipment costs, while the
estimated annual benefits are $171.2
million in reduced operating costs,
$29.0 million in climate benefits, and
$50.8 million in health benefits. In this
case, the net benefit would amount to
$237.0 million per year.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.003</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–C
31404
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table 1.4 Annualized Benefits and Costs of Adopted Standards for Dishwashers (the
Recommended TSL) (2027-2056)
Million 2022$/year
Primary Estimate
Low-Net-Benefits
Estimate
High-NetBenefits Estimate
3% discount rate
Consumer Operating Cost Savings
171.2
164.1
175.8
Climate Benefits*
29.0
28.3
29.3
Health Benefits**
50.8
49.6
51.3
Total Benefitst
251.0
242.0
256.4
14.0
17.0
13.2
237.0
224.9
243.1
(14)- (9)
(14)-(9)
(14)- (9)
Consumer Incremental Product Costst
Net Benefits
Change in Producer Cashflow (INPV)U
7% discount rate
Consumer Operating Cost Savings
127.2
122.5
130.5
Climate Benefits* (3% discount rate)
29.0
28.3
29.3
Health Benefits**
34.3
33.5
34.5
Total Benefitst
190.5
184.3
194.3
Consumer Incremental Product Costst
14.0
16.7
13.3
Net Benefits
176.4
167.6
181.0
(14)- (9)
(14)-(9)
(14)- (9)
Note: This table presents the costs and benefits associated with dishwashers shipped in 2027-2056. These
results include consumer, climate, and health benefits that accrue after 2056 from the products shipped in
2027-2056. 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. 1n 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 and
IV.Hof 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 it emphasizes the importance and value of considering the benefits calculated using all four
sets ofSC-GHG estimates. To monetize the benefits ofreducing GHG emissions, this analysis uses the
interim estimates presented in the Technical Support Document: Social Cost a/Carbon, Methane, and
Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the IWG.
** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only
monetizing (for SO2 and NOx) PM2.s 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.s emissions. See section IV.L of this document for more details.
t Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3percent discount rate, but DOE does not have a single central SC-GHG point estimate.
t Costs include incremental equipment costs as well as installation costs.
tt Operating Cost Savings are calculated based on the life-cycle cost analysis and national impact analysis
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00008
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.004</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Change in Producer Cashflow (INPV)H
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31405
as discussed in detail below. See sections IV.F and IV.Hof 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., 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 8.5 percent that is estimated in the MIA (see
chapter 12 of the direct final rule TSD for a complete description of the industry weighted-average cost of
capital). For dishwashers, the change in INPV ranges from -$14 million to -$9 million. DOE accounts for
that range oflikely impacts in analyzing whether a TSL is economically justified. See section V.C of this
document. DOE is presenting the range of impacts to the INPV under two manufacturer 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 Tiered scenario, which models a
reduction of manufacturer markups due to reduced product differentiation as a result of amended standards.
DOE includes the range of estimated annualized change in INPV in the previous 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 direct final rule to society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. IfDOE were to include the INPV into
annualized the net benefit calculation for this direct final rule, the annualized net benefits would range from
$223 million to $228 million at 3-percent discount rate and would range from $163 million to $168 million
at 7-percent discount rate. Parentheses() indicate negative values.
DOE’s analysis of the national impacts
of the adopted standards is described in
sections IV.J.3 and IV.L of this
document.
khammond on DSKJM1Z7X2PROD with RULES3
D. Conclusion
DOE has determined that the Joint
Agreement was submitted jointly by
interested persons that are fairly
representative of relevant points of
view, in accordance with 42 U.S.C.
6295(p)(4)(A). After considering the
recommended standards and weighing
the benefits and burdens, DOE has
determined that the recommended
standards are in accordance with 42
U.S.C. 6295(o), which contains the
criteria for prescribing new or amended
standards. Specifically, the Secretary of
Energy (‘‘Secretary’’) has determined
that the adoption of the recommended
standards would result in the significant
conservation of energy and is the
maximum improvement in energy
efficiency that is technologically
feasible and economically justified. In
determining whether the recommended
standards are economically justified, the
Secretary has determined that the
benefits of the recommended standards
exceed the burdens. The Secretary has
further concluded that the
recommended standards, when
considering the benefits of energy
savings, positive NPV of consumer
benefits, emission reductions, the
estimated monetary value of the
emissions reductions, and positive
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
average LCC savings, would yield
benefits that outweigh the negative
impacts on some consumers and on
manufacturers, including the conversion
costs that could result in a reduction in
INPV for manufacturers.
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
standards for dishwashers is $14.0
million per year in increased
dishwasher costs, while the estimated
annual benefits are $127.2 million in
reduced dishwasher operating costs,
$29.0 million in climate benefits, and
$34.3 million in health benefits. The net
benefit amounts to $176.4 million per
year. DOE notes that the net benefits are
substantial even in the absence of the
climate benefits 17 and DOE would
adopt the same standards in the absence
of such benefits.
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.18 For example, some
covered products and equipment have
most of their energy consumption occur
17 The information on climate benefits is provided
in compliance with Executive Order 12866.
18 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).
PO 00000
Frm 00009
Fmt 4701
Sfmt 4700
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.
As previously mentioned, the
standards are projected to result in
estimated national energy savings of
0.31 quads FFC, the equivalent of the
primary annual energy use of 2.1
million homes. In addition, they are
projected to reduce cumulative CO2
emissions by 9.48 Mt. Based on these
findings, DOE has determined the
energy savings from the standard levels
adopted in this direct final rule are
‘‘significant’’ within the meaning of 42
U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these
conclusions is contained in the
remainder of this document and the
accompanying TSD.19
In accordance with these and other
statutory provisions discussed in this
document, DOE analyzed the benefits
and burdens of four TSLs for
dishwashers. 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.1 of this
document, DOE has tentatively
19 The TSD is available in the docket for this
rulemaking at www.regulations.gov/docket/EERE2019-BT-STD-0039/document.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.005</GPH>
BILLING CODE 6450–01–C
31406
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
determined that TSL 3 (the
Recommended TSL) represents the
maximum improvement in energy
efficiency that is technologically
feasible and economically justified.
khammond on DSKJM1Z7X2PROD with RULES3
II. Introduction
The following section briefly
discusses the statutory authority
underlying this direct final rule, as well
as some of the relevant historical
background related to the establishment
of standards for dishwashers.
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 dishwashers,
the subject of this document. (42 U.S.C.
6292(a)(6)) EPCA prescribed energy
conservation design standards for these
products (42 U.S.C. 6295(g)(1) and
(10)(A)), and directed DOE to conduct
future rulemakings to determine
whether to amend these standards. (42
U.S.C. 6295(g)(4) and (10)(B)) 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))
In establishing energy conservation
standards with both energy and water
use performance standards for
dishwashers manufactured after 2010,
Congress also directed DOE to
‘‘determin[e] whether to amend’’ those
standards. 42 U.S.C. 6295(g)(10)(B).
Congress’s directive, in section
6295(g)(10)(B), to consider whether ‘‘to
amend the standards for dishwashers’’
refers to ‘‘the standards’’ established in
the immediately preceding section,
6295(g)(10)(A). There, Congress
established energy conservation
standards with both energy and water
use performance standards for
dishwashers. Indeed, the energy and
water use performance standards for
dishwashers (both standard and
compact) are each contained within a
single subparagraph. See Id. Everything
in section 6295(g)(10) suggests that
Congress intended both of those twin
standards to be evaluated when it came
time, ‘‘[n]ot later than January 1, 2015,’’
to consider amending them. (Id.
6295(g)(10)(B)(i)) Accordingly, DOE
understands its authority, under section
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
6295(g)(10)(B), to include consideration
of amended energy and water use
performance standards for dishwashers.
DOE similarly understands its
obligation under 42 U.S.C. 6295(m) to
amend ‘‘standards’’ for covered
products to include amending both the
energy and water use performance
standards for dishwashers. Neither
section 6295(g)(10)(B) nor section
6295(m) limit their application to
‘‘energy use standards.’’ Rather, they
direct DOE to consider amending ‘‘the
standards,’’ 42 U.S.C. 6295(g)(10)(B), or
simply ‘‘standards,’’ Id. 6295(m)(1)(B),
which may include both energy use
standards and water use standards.
Finally, DOE is promulgating these
standards as a direct final rule pursuant
to section 42 U.S.C. 6295(p)(4). That
section also extends broadly to any
‘‘energy or water conservation standard’’
without qualification. Thus, pursuant to
section 6295(p)(4), DOE may, so long as
the other relevant conditions are
satisfied, promulgate a direct final rule
that includes water use performance
standards for a covered product like
dishwashers, where Congress has
already established energy and water
use performance standards.
DOE is aware that the definition of
‘‘energy conservation standard,’’ in
section 6291(6), expressly references
water use only for four products
specifically named: showerheads,
faucets, water closets, and urinals. See
Id. However, DOE does not read the
language in 6291(6) as fully delineating
the scope of DOE’s authority under
EPCA. Rather, as is required of agencies
in applying a statute, individual
provisions, including section 6291(6) of
EPCA, must be read in the context of the
statute as a whole.
The energy conservation program was
initially limited to addressing the
energy use, meaning electricity and
fossil fuels, of 13 covered products (See
sections 321 and 322 of the Energy and
Policy Conservation Act, Public Law
94–163, 89 Stat 871 (December 22,
1975)) Since its inception, Congress has
expanded the scope of the energy
conservation program several times,
including by adding covered products,
prescribing energy conservation
standards for various products, and by
addressing water use for certain covered
products. For example, in the Energy
Policy Act of 1992, Congress amended
the list of covered products in 42 U.S.C.
6292 to include showerheads, faucets,
water closets and urinals and expanded
DOE’s authority to regulate water use for
these products. (See Sec. 123, Energy
Policy Act of 1992, Public Law 102–486,
106 Stat 2776 (Oct. 24, 1992)). When it
did so, Congress also made
PO 00000
Frm 00010
Fmt 4701
Sfmt 4700
corresponding changes to the definition
of ‘‘consumer product’’ (42 U.S.C.
6291(1)), the definition of ‘‘energy
conservation standard’’ (42 U.S.C.
6291(6)), the section governing the
promulgation of test procedures (42
U.S.C. 6293), the criteria for prescribing
new or amended energy conservation
standards (42 U.S.C. 6295(o)), and
elsewhere in EPCA.
Later, Congress further expanded the
scope of the energy conservation
program several times. For instance,
Congress added products and energy
conservation standards directly to 42
U.S.C. 6295, the section of EPCA that
contains statutorily prescribed
standards as well as DOE’s standardsetting authorities. See 42 U.S.C. 6295(a)
(stating that the ‘‘purposes of this
section are to—(1) provide Federal
energy conservation standards
applicable to covered products; and (2)
authorize the Secretary to prescribe
amended or new energy conservation
standards for each type (or class) of
covered product.’’)). When Congress
added these new standards and
standard-setting authorities to 42 U.S.C.
6295 after the Energy Policy Act of
1992, it often did so without making any
conforming changes to other provisions
in EPCA, e.g., sections 6291 or 6292. For
example, in the Energy Policy Act of
2005, Congress prescribed standards by
statute, or gave DOE the authority to set
standards for, battery chargers, external
power supplies, ceiling fans, ceiling fan
light kits, beverage vending machines,
illuminated exit signs, torchieres, low
voltage dry-type distribution
transformers, traffic signal modules and
pedestrian modules, certain lamps,
dehumidifiers, and commercial prerinse
spray valves in 42 U.S.C. 6295 without
updating the list of covered products in
42 U.S.C. 6292. (See Sec. 135, Energy
Policy Act of 2005, 119 Stat 594 (Aug.
8, 2005)).
Congress also expanded the scope of
the energy conservation program by
directly adding water use performance
standards for certain products to 42
U.S.C. 6295. For example, in the Energy
Policy Act of 2005, Congress added a
water use performance standard (but no
energy use performance standard) for
commercial prerinse spray valves
(‘‘CPSVs’’) and did so without updating
the list of covered products in 42 U.S.C.
6292 to include CPSVs and without
adding CPSVs to the list of enumerated
products with water use performance
standards in the ‘‘energy conservation
standard’’ definition in 42 U.S.C.
6291(6). In the Energy Independence
and Security Act of 2007 (‘‘EISA 2007’’),
Congress amended 42 U.S.C. 6295 by
prescribing energy conservation
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
standards for residential clothes
washers and dishwashers that included
both energy and water use performance
standards. (See Sec. 301, EISA 2007,
Public Law 110–140, 121 Stat 1492
(Dec. 19, 2007)). Again, when it did so,
Congress did not add these products to
the list of enumerated products with
water use performance standards in the
definition of ‘‘energy conservation
standard’’ in 42 U.S.C. 6291(6).
In considering how to treat these
products and standards that Congress
has directly added to 42 U.S.C. 6295
without making conforming changes to
the rest of the statute, including the list
of covered products in 42 U.S.C. 6292,
and the water-use products in the
definition of an ‘‘energy conservation
standard,’’ DOE construes the statute as
a whole. When Congress added
products and standards directly to 42
U.S.C. 6295 it must have meant those
products to be covered products and
those standards to be energy
conservation standards, given that the
purpose of 42 U.S.C. 6295 is to provide
‘‘energy conservation standards
applicable to covered products’’ and to
‘‘authorize the Secretary to prescribe
amended or new energy conservation
standards for each type (or class) of
covered product.’’ Elsewhere in EPCA,
the statute’s references to covered
products and energy conservation
standards can only be read coherently as
including the covered products and
energy conservation standards Congress
added directly to section 6295, even if
Congress did not make conforming edits
to 6291 or 6292. For example,
manufacturers are prohibited from
‘‘distribut[ing] in commerce any new
covered product which is not in
conformity with an applicable energy
conservation standard.’’ (42 U.S.C.
6302(a)(5) (emphasis added)) It would
defeat congressional intent to allow a
manufacturer to distribute a product,
e.g., a CPSV or ceiling fan, that violates
an applicable energy conservation
standard that Congress prescribed
simply because Congress added the
product directly to 42 U.S.C. 6295
without also updating the list of covered
products in 42 U.S.C. 6292(a). In
addition, preemption in EPCA is based
on ‘‘the effective date of an energy
conservation standard established in or
prescribed under section 6295 of this
title for any covered product.’’ (42
U.S.C. 6297(c) (emphasis added))
Nothing in EPCA suggests that
standards Congress adopted in 6295
lack preemptive effect, merely because
Congress did not make conforming
amendments to 6291, 6292, or 6293.
It would similarly defeat
congressional intent for a manufacturer
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
to be permitted to distribute a covered
product, e.g., a residential clothes
washer or dishwasher, that violates a
water use performance standard because
Congress added the standard to 42
U.S.C. 6295 without also updating the
definition of energy conservation
standard in 42 U.S.C. 6291(6). By
prescribing directly, in 6295(g)(10),
energy conservation standards for
dishwashers that include both energy
and water use performance standards,
Congress intended that energy
conservation standards for dishwashers
include both energy use and water use.
DOE recognizes that some might argue
that Congress’s specific reference in
section 6291(6) to water standards for
showerheads, faucets, water closets, and
urinals could ‘‘create a negative
implication’’ that energy conservations
standards for other covered products
may not include water use standards.
See Marx v. Gen. Revenue Corp., 568
U.S. 371, 381 (2013). ‘‘The force of any
negative implication, however, depends
on context.’’ Id.; see also NLRB v. SW
Gen., Inc., 580 U.S. 288, 302 (2017)
(‘‘The expressio unius canon applies
only when circumstances support a
sensible inference that the term left out
must have been meant to be excluded.’’
(alterations and quotation marks
omitted)). In this context, the textual
and structural cues discussed above
show that Congress did not intend to
exclude from the definition of energy
conservation standard the water use
performance standards that it
specifically prescribed, and directed
DOE to amend, in section 6295. To
conclude otherwise would negate the
plain text of 6295(g)(10). Furthermore,
to the extent the definition of energy
conservation standards in section
6291(6), which was last amended in the
Energy Policy Act of 1992, could be read
as in conflict with the energy and water
use performance standards prescribed
by Congress in EISA 2007, any such
conflict should be resolved in favor of
the more recently enacted statute. See
United States v. Estate of Romani, 523
U.S. 517, 530–531 (1998) (‘‘[A] specific
policy embodied in a later federal
statute should control our construction
of the priority statute, even though it
had not been expressly amended.’’).
Accordingly, based on a complete
reading of the statute, DOE has
determined that products and standards
added directly to 42 U.S.C. 6295 are
appropriately considered ‘‘covered
products’’ and ‘‘energy conservation
standards’’ for the purposes of applying
the various provisions in EPCA.
The energy conservation program
under EPCA, consists essentially of four
parts: (1) testing, (2) labeling, (3) the
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
31407
establishment of Federal energy
conservation standards, and (4)
certification and enforcement
procedures. Relevant provisions of the
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 in
limited instances for particular State
laws or regulations, in accordance with
the procedures and other provisions set
forth under EPCA. (See 42 U.S.C.
6297(d))
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(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 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 dishwashers appear at
title 10 of the CFR part 430, subpart B,
appendix C1 (‘‘appendix C1’’) and
appendix C2.
DOE must follow specific statutory
criteria for prescribing new or amended
standards for covered products,
including dishwashers. Any new or
amended standards for a 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)) 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 if DOE determines by rule that
the standard is not technologically
feasible or economically justified. (42
U.S.C. 6295(o)(3)(B)) In deciding
whether a proposed standard is
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31408
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
economically justified, DOE must
determine whether the benefits of the
standard exceed its burdens. (42 U.S.C.
6295(o)(3)(B)) 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
considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII))
Further, EPCA, as codified,
establishes a rebuttable presumption
that a standard is economically justified
if the Secretary finds that the additional
cost to the consumer of purchasing a
product complying with an energy
conservation standard level will be less
than three times the value of the energy
savings during the first year that the
consumer will receive as a result of the
standard, as calculated under the
applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii))
EPCA, as codified, also contains what
is known as an ‘‘anti-backsliding’’
provision, which prevents the Secretary
from prescribing any amended standard
that either increases the maximum
allowable energy use or decreases the
minimum required energy efficiency of
a covered product. (42 U.S.C.
6295(o)(1)) Also, the Secretary may not
prescribe an amended or new standard
if interested persons have established by
a preponderance of the evidence that
the standard is likely to result in the
unavailability in the United States in
any covered product type (or class) of
performance characteristics (including
reliability), features, sizes, capacities,
and volumes that are substantially the
same as those generally available in the
United States. (42 U.S.C. 6295(o)(4))
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
EPCA specifies requirements when
promulgating an energy conservation
standard for a covered product that has
two or more subcategories. A rule
prescribing an energy conservation
standard for a type (or class) of product
must specify a different standard level
for a type or class of products 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
such a feature and other factors DOE
deems appropriate. (Id.) Any rule
prescribing such a standard must
include an explanation of the basis on
which such higher or lower level was
established. (42 U.S.C. 6295(q)(2))
Additionally, pursuant to the
amendments contained in EISA 2007,
final rules for new or amended energy
conservation standards promulgated
after July 1, 2010, are 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 and standards for
dishwashers address standby mode and
off mode energy use, as do the amended
standards adopted in this direct final
rule.
Finally, EISA 2007 amended EPCA, in
relevant part, to grant DOE authority to
issue a final rule (i.e., a ‘‘direct final
rule’’) establishing an energy
conservation standard upon receipt of a
statement submitted jointly by
interested persons that are fairly
representative of relevant points of view
(including representatives of
manufacturers of covered products,
States, and efficiency advocates), as
determined by the Secretary, that
contains recommendations with respect
to an energy or water conservation
standard. (42 U.S.C. 6295(p)(4))
Pursuant to 42 U.S.C. 6295(p)(4), the
Secretary must also determine whether
a jointly-submitted recommendation for
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
an energy or water conservation
standard satisfies 42 U.S.C. 6295(o) or
42 U.S.C. 6313(a)(6)(B), as applicable.
The direct final rule must be
published simultaneously with a NOPR
that proposes an energy or water
conservation standard that is identical
to the standard established in the direct
final rule, and DOE must provide a
public comment period of at least 110
days on this proposal. (42 U.S.C.
6295(p)(4)(A)–(B)) While DOE typically
provides a comment period of 60 days
on proposed standards, for a NOPR
accompanying a direct final rule, DOE
provides a comment period of the same
length as the comment period on the
direct final rule—i.e., 110 days. Based
on the comments received during this
period, the direct final rule will either
become effective, or DOE will withdraw
it not later than 120 days after its
issuance if: (1) one or more adverse
comments is received, and (2) DOE
determines that those comments, when
viewed in light of the rulemaking record
related to the direct final rule, may
provide a reasonable basis for
withdrawal of the direct final rule under
42 U.S.C. 6295(o). (42 U.S.C.
6295(p)(4)(C)) Receipt of an alternative
joint recommendation may also trigger a
DOE withdrawal of the direct final rule
in the same manner. (Id.)
DOE has previously explained its
interpretation of its direct final rule
authority. In a final rule amending the
Department’s ‘‘Procedures,
Interpretations and Policies for
Consideration of New or Revised Energy
Conservation Standards for Consumer
Products’’ at 10 CFR part 430, subpart
C, appendix A, DOE noted that it may
issue standards recommended by
interested persons that are fairly
representative of relative points of view
as a direct final rule when the
recommended standards are in
accordance with 42 U.S.C. 6295(o) or 42
U.S.C. 6313(a)(6)(B), as applicable. 86
FR 70892, 70912 (Dec. 13, 2021). But the
direct final rule provision in EPCA does
not impose additional requirements
applicable to other standards
rulemakings, which is consistent with
the unique circumstances of rules
issued through consensus agreements
under DOE’s direct final rule authority.
Id. DOE’s discretion remains bounded
by its statutory mandate to adopt a
standard that results in the maximum
improvement in energy efficiency that is
technologically feasible and
economically justified—a requirement
found in 42 U.S.C. 6295(o). Id. As such,
DOE’s review and analysis of the Joint
Agreement is limited to whether the
recommended standards satisfy the
criteria in 42 U.S.C. 6295(o).
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
B. Background
1. Current Standards
In a direct final rule published on
May 30, 2012 (‘‘May 2012 Direct Final
Rule’’), DOE adopted the current energy
conservation standards for dishwashers
manufactured on or after May 30, 2013,
consistent with the levels proposed in a
letter submitted to DOE by groups
representing manufacturers, energy and
environmental advocates, and consumer
groups on July 30, 2010. 77 FR 31918,
31918–31919. This collective set of
comments, titled ‘‘Agreement on
Minimum Federal Efficiency Standards,
Smart Appliances, Federal Incentives
and Related Matters for Specified
Appliances’’ (the ‘‘July 2010 Joint
Petition’’),20 recommended specific
energy conservation standards for
dishwashers that, in the commenters’
view, would satisfy the EPCA
requirements in 42 U.S.C. 6295(o). 77
FR 31918, 31919. The July 2010 Joint
Petition proposed energy conservation
standard levels for the standard-size and
compact-size dishwasher product
classes based on the same capacity
definitions that existed at that time. 77
FR 31918, 31926. In the May 2012
Direct Final Rule, DOE analyzed the
benefits and burdens of multiple
standard levels for dishwashers,
including a standard level that
corresponded to the recommended
levels in the July 2010 Joint Petition,
and determined that the levels
recommended in the Joint Petition
31409
satisfied the EPCA requirements set
forth under 42 U.S.C. 6295(o). 77 FR
31918, 31921.
In a final determination published on
December 13, 2016 (‘‘December 2016
Final Determination’’), DOE concluded
that amended energy conservation
standards would not be economically
justified at any level above the
standards established in the May 2012
Direct Final Rule, and therefore
determined not to amend the standards.
81 FR 90072. The current energy and
water conservation standards are set
forth in DOE’s regulations at 10 CFR
part 430, § 430.32(f), and are repeated in
Table II.1. The currently applicable DOE
test procedure for dishwashers appears
at appendix C1.
Product Class
Maximum Estimated Annual
Energy Use *
(kWhlvear)
Maximum Per-Cycle Water
Consumption *
(wllc:vcle)
307
5.0
3.5
Standard-Size Dishwasher
Compact-Size Dishwasher
* Using appendix Cl
The regulatory text at 10 CFR
430.32(f) references the Association of
Home Appliance Manufacturers
(‘‘AHAM’’) standard AHAM DW–1–
2020 21 to define the items in the test
load that comprise the serving pieces
and each place setting. The number of
serving pieces and place settings help
determine the capacity of the
dishwasher, which is used to determine
the applicable product class.
khammond on DSKJM1Z7X2PROD with RULES3
2. Current Test Procedure
On December 22, 2021, DOE
published a test procedure NOPR
(‘‘December 2021 TP NOPR’’) proposing
amendments to the dishwasher test
procedure at appendix C1 and a new
test procedure at appendix C2. 86 FR
72738. On January 18, 2023, DOE
published a final rule amending the test
procedure at appendix C1 and
establishing a new test procedure at
appendix C2 (‘‘January 2023 TP Final
Rule’’). 88 FR 3234. The new appendix
C2 specifies updated annual cycles and
low-power mode hours, both of which
are used to calculate the EAEU metric,
and introduces a minimum cleaning
performance threshold to validate the
selected test cycle. 88 FR 3234, 3236.
Subsequently, on July 27, 2023, DOE
published a final rule adding clarifying
20 DOE Docket No. EERE-2011-BT-STD-00600001.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
222
instructions to the dishwasher test
procedure at appendix C1 regarding the
allowable dosing options for each type
of detergent; clarifying the existing
detergent reporting requirements; and
adding an enforcement provision for
dishwashers to specify the detergent
and dosing method that DOE would use
for any enforcement testing of
dishwasher models certified in
accordance with the applicable
dishwasher test procedure prior to July
17, 2023 (i.e., the date by which the
January 2023 TP Final Rule became
mandatory for product testing). 88 FR
48351.
EPCA authorizes DOE to design test
procedures that measure energy
efficiency, energy use, water use, or
estimated annual operating cost of a
covered product during a representative
average use cycle or period of use. (42
U.S.C. 6293(b)(3)) In general, a
consumer-acceptable level of cleaning
performance (i.e., a representative
average use cycle) can be easier to
achieve through the use of higher
amounts of energy and water use during
the dishwasher cycle. Conversely,
maintaining acceptable cleaning
performance can be more difficult as
energy and water levels are reduced.
Improving one aspect of dishwasher
performance, such as reducing energy
and/or water use as a result of energy
conservation standards, may require a
trade-off with one or more other aspects
of performance, such as cleaning
performance. 88 FR 3234, 3250–3251.
As discussed, the currently applicable
energy conservation standards for
dishwashers are based on appendix C1,
which does not prescribe a method for
testing dishwasher cleaning
performance.
The January 2023 TP Final Rule
established a new test procedure at
appendix C2, which includes provisions
for a minimum cleaning index threshold
of 70 to validate the selected test cycle.
88 FR 3234, 3261. The cleaning index is
calculated based on the number and size
of particles remaining on each item of
the test load at the completion of a
dishwasher cycle as specified in AHAM
DW–2–2020.22 Items that do not have
any soil particles are scored 0 (i.e.,
completely clean). No single item in the
test load can exceed a score of 9.
Individual scores for each item in the
test load are combined as a weighted
average to calculate the per cycle
cleaning index. A cleaning index of 100
indicates a completely clean test load.
Id. at 88 FR 3255. In the January 2023
TP Final Rule, DOE specified that the
21 Uniform Test Method for Measuring the Energy
Consumption of Dishwashers. AHAM DW–1–2020.
Copyright 2020.
22 Household Electric Dishwashers. AHAM DW–
2–2020. Copyright 2020.
PO 00000
Frm 00013
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.006</GPH>
Table 11.1 Federal Enerev Conservation Standards for Dishwashers
31410
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
3. The Joint Agreement
On September 25, 2023, DOE received
a joint statement (i.e., the Joint
Agreement) recommending standards
for dishwashers, that was submitted by
groups representing manufacturers,
energy and environmental advocates,
consumer groups, and a utility.24 In
addition to the recommended standards
for dishwashers, the Joint Agreement
also included separate
recommendations for several other
covered products.25 And, while
acknowledging that DOE may
implement these recommendations in
separate rulemakings, the Joint
Agreement also stated that the
recommendations were recommended
as a complete package and each
recommendation is contingent upon the
other parts being implemented. DOE
understands this to mean the Joint
Agreement is contingent upon DOE
initiating rulemaking processes to adopt
all the recommended standards in the
agreement. That is distinguished from
an agreement where issuance of an
amended energy conservation standard
for a covered product is contingent on
issuance of amended energy
conservation standards for the other
covered products. If the Joint Agreement
were so construed, it would conflict
with the anti-backsliding provision in
42 U.S.C. 6295(o)(1), because it would
imply the possibility that, if DOE were
unable to issue an amended standard for
a certain product, it would have to
withdraw a previously issued standard
for one of the other products. The antibacksliding provision, however,
prevents DOE from withdrawing or
amending an energy conservation
standard to be less stringent. As a result,
DOE will be proceeding with individual
rulemakings that will evaluate each of
the recommended standards separately
under the applicable statutory criteria.
A court decision issued after DOE
received the Joint Agreement is also
relevant to this rule. On March 17, 2022,
various States filed a petition seeking
review of a final rule revoking two final
rules that established product classes for
dishwashers with a cycle time for the
normal cycle of 60 minutes or less, toploading residential clothes washers and
certain classes of consumer clothes
dryers with a cycle time of less than 30
minutes, and front-loading residential
clothes washers with a cycle time of less
than 45 minutes (collectively, ‘‘shortcycle product classes’’). The petitioners
argued that the final rule revoking the
short-cycle product classes violated
EPCA and was arbitrary and capricious.
On January 8, 2024, the United States
Court of Appeals for the Fifth Circuit
granted the petition for review and
remanded the matter to DOE for further
proceedings consistent with the Fifth
Circuit’s opinion. See Louisiana v.
United States Department of Energy, 90
F.4th 461 (5th Cir. 2024).
On February 14, 2024, following the
Fifth Circuit’s decision in Louisiana v.
United States Department of Energy,
DOE received a second joint statement
from this same group of stakeholders in
which the signatories reaffirmed the
Joint Agreement, stating that the
recommended standards represent the
maximum levels of efficiency that are
technologically feasible and
economically justified.26 In the letter,
the signatories clarified that ‘‘shortcycle’’ product classes for residential
clothes washers, consumer clothes
dryers, and dishwashers did not exist at
the time that the signatories submitted
their recommendations and it is their
understanding that these classes also do
not exist at the current time.
Accordingly, the parties clarified that
the Joint Agreement did not address
short-cycle product classes. The
signatories also stated that they did not
anticipate that the recommended energy
conservation standards in the Joint
Agreement will negatively affect
features or performance, including cycle
time, for dishwashers.
The Joint Agreement recommends
standard levels for dishwashers as
presented in Table II.2. (Joint
Agreement, No. 55 at p. 5) Details of the
Joint Agreement recommendations for
other products are provided in the Joint
Agreement posted in the docket.27
23 In the December 2021 TP NOPR, DOE proposed
a cleaning index threshold of 65 calculated by
scoring soil particles on all items as well as spots,
streaks, and rack contact marks on glassware. 86 FR
72738, 72756, 72758. In the January 2023 TP Final
Rule, DOE noted that the specified cleaning index
threshold of 70 is equivalent to the cleaning index
threshold of 65 that was proposed in the December
2021 TP NOPR. 88 FR 3234, 3261.
24 The signatories to the Joint Agreement include
the AHAM, American Council for an Energy
Efficient Economy, Alliance for Water Efficiency,
ASAP, Consumer Federation of America, Consumer
Reports, Earthjustice, National Consumer Law
Center, Natural Resources Defense Council,
Northwest Energy Efficiency Alliance, and Pacific
Gas and Electric Company. Members of AHAM’s
Major Appliance Division that make the affected
products include: Alliance Laundry Systems, LLC;
Asko Appliances AB; Beko US Inc.; Brown Stove
Works, Inc.; BSH Home Appliances Corporation;
Danby Products, Ltd.; Electrolux; Elicamex S.A. de
C.V.; Faber; Fotile America; GE Appliances, a Haier
Company; L’Atelier Paris Haute Design LLG; LG
Electronics; Liebherr USA, Co.; Midea America
Corp.; Miele, Inc.; Panasonic Appliances
Refrigeration Systems (PAPRSA) Corporation of
America; Perlick Corporation; Samsung Electronics
America, Inc.; Sharp Electronics Corporation; Smeg
S.p.A; Sub-Zero Group, Inc.; The Middleby
Corporation; U-Line Corporation; Viking Range,
LLC; and Whirlpool Corporation.
25 The Joint Agreement contained
recommendations for 6 covered products:
refrigerators, refrigerator-freezers, and freezers;
clothes washers; clothes dryers; dishwashers;
cooking products; and miscellaneous refrigeration
products.
26 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
27 The Joint Agreement is available in the docket
at www.regulations.gov/comment/EERE-2019-BTSTD-0039-0055.
khammond on DSKJM1Z7X2PROD with RULES3
cleaning index is calculated by only
scoring soil particles on all items in the
test load and that spots, streaks, and
rack contact marks on glassware are not
included in the cleaning index
calculation.23 Id. at 88 FR 3248.
Manufacturers must use the results of
testing under the new appendix C2 to
determine compliance with the energy
conservation standards adopted in this
direct final rule. Accordingly, DOE used
appendix C2 as finalized in the January
2023 TP Final Rule as the basis for the
analysis in this direct final rule. Id. at
88 FR 3234.
DOE adopted a minimum cleaning
performance threshold in appendix C2
to determine if a dishwasher, when
tested according to the DOE test
procedure, ‘‘completely washes a
normally soiled load of dishes,’’ so as to
better represent consumer use of the
product (i.e., to produce test results that
are more representative of an average
consumer use cycle). 88 FR 3234, 3253,
3255. Based on the data available, DOE
determined that the cleaning
performance threshold provides a
reasonable proxy for when consumers
are likely to be satisfied with
performance on the normal cycle. 88 FR
3234, 3261. The cleaning index
threshold established as part of the new
appendix C2 ensures that energy and
water savings are being realized for
products that comply with the amended
energy conservation standards for
dishwashers established by this direct
final rule. 88 FR 3234, 3253, 3254.
The standards enacted by this direct
final rule are expressed in terms of the
EAEU and water consumption metrics
as measured according to the newly
established test procedure contained in
appendix C2.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00014
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31411
Table 11.2 Recommended Amended Energy Conservation Standards for
Dishwashers
Standard Levels
Using Test Procedure Appendix C2
Per-Cycle Water
Estimated Annual
Energy Use
Consumption
(kWh/year)
(~al/cycle)
Standard-Size Dishwasher
(2: 8 place settings plus 6
serving pieces)
Compact-Size Dishwasher
(< 8 place settings plus 6
serving pieces)
khammond on DSKJM1Z7X2PROD with RULES3
DOE notes that it was conducting a
rulemaking to consider amending the
standards for dishwashers when the
Joint Agreement was submitted. As part
of that process, on January 24, 2022,
DOE published a notification of a
webinar and availability of preliminary
technical support document (‘‘January
2022 Preliminary Analysis’’). 87 FR
3450. Subsequently, on May 19, 2023,
DOE published a NOPR and announced
a public meeting (‘‘May 2023 NOPR’’)
seeking comment on its proposed
amended standard to inform its decision
consistent with its obligations under
EPCA and the Administrative Procedure
Act (‘‘APA’’). 88 FR 32514. DOE held a
public meeting on June 8, 2023, to
discuss and receive comments on the
NOPR and NOPR TSD. The NOPR TSD
is available at: www.regulations.gov/
document/EERE-2019-BT-STD-00390032.
Although DOE is adopting the Joint
Agreement as a direct final rule and no
longer proceeding with its own
rulemaking, DOE did consider relevant
comments, data, and information
obtained during that rulemaking process
in determining whether the
recommended standards from the Joint
Agreement are in accordance with 42
U.S.C. 6295(o). Any discussion of
comments, data, or information in this
direct final rule that were obtained
during DOE’s own prior rulemaking will
include a parenthetical reference that
provides the location of the item in the
public record.28
III. General Discussion
DOE is issuing this direct final rule
after determining that the recommended
standards submitted in the Joint
28 The parenthetical reference provides a
reference for information located in the docket of
DOE’s rulemaking to develop energy conservation
standards for dishwashers. (Docket No. EERE–
2019–BT–STD–0039, 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
17:42 Apr 23, 2024
Jkt 262001
223
3.3
174
3.1
Agreement meet the requirements in 42
U.S.C. 6295(p)(4). More specifically,
DOE has determined that the
recommended standards were submitted
by interested parties that are fairly
representative of relevant points of view
and the recommended standards satisfy
the criteria in 42 U.S.C. 6295(o).
On March 17, 2022, various States
filed a petition seeking review of the
final rule revoking two final rules that
established the short-cycle product
classes. The petitioners argued that the
final rule revoking the short-cycle
product classes violated EPCA and was
arbitrary and capricious. On January 8,
2024, the United States Court of
Appeals for the Fifth Circuit granted the
petition for review and remanded the
matter to DOE for further proceedings
consistent with the Fifth Circuit’s
opinion. See Louisiana v. United States
Department of Energy, 90 F.4th 461 (5th
Cir. 2024).
Following the Fifth Circuit’s decision,
the signatories to the Joint Agreement
submitted a second letter to DOE, which
stated that Joint Recommendation did
not ‘‘address’’ ‘‘short-cycle product
classes.’’ 29 That is because, as the letter
explained, such product classes ‘‘did
not exist’’ at the time of the Joint
Agreement.
In a recently published request for
information (‘‘RFI’’), DOE is
commencing a rulemaking process on
remand from the Fifth Circuit (the
‘‘Remand Proceeding’’) by soliciting
further information, relevant to the
issues identified by the Fifth Circuit,
regarding any short-cycle product
classes. 89 FR 17338 (March 11, 2024).
In that Remand Proceeding, DOE will
conduct the analysis required by 42
U.S.C. 6295(q)(1)(B) to determine
whether any short-cycle products have
a ‘‘capacity or other performance-related
feature [that] . . . justifies a higher or
29 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
PO 00000
Frm 00015
Fmt 4701
Sfmt 4700
Compliance Date
3 years after
publication of this
direct final rule
3 years after
publication of this
direct final rule
lower standard from that which applies
(or will apply) to other products. . . .’’
The current standards applicable to
any products within the scope of that
proceeding remain unchanged by this
rule. See 10 CFR 430.32(f). Consistent
with the Joint Parties’ letter, short-cycle
products are not subject to the amended
standards adopted by this direct final
rule. If the short-cycle products that
DOE will consider in the Remand
Proceeding were subject to these
standards, that would have the practical
effect of limiting the options available in
the Remand Proceeding. That is because
EPCA’s anti-backsliding provision
precludes DOE from prescribing any
amended standard ‘‘which increases the
maximum allowable energy use’’ of a
covered product. 42 U.S.C. 6295(o)(1).
Accordingly, were the products at issue
in the Remand Proceeding also subject
to the amended standards adopted here,
the Department could only reaffirm the
standards adopted in this direct final
rule or adopt more stringent standards.
The Joint Agreement specifies the
product classes for dishwashers:
standard-size and compact-size.
Although these product classes were not
further divided by cycle time, DOE
understands them to exclude standardsize dishwashers with an average cycle
time of 60 minutes or less. As noted
previously, any such ‘‘short-cycle’’
dishwashers will be considered in the
Remand Proceeding; the current
standards applicable to such ‘‘shortcycle’’ dishwashers are unchanged by
this rule.
Under the direct final rule authority at
42 U.S.C. 6295(p)(4), DOE evaluates
whether recommended standards are in
accordance with criteria contained in 42
U.S.C. 6295(o). DOE does not have the
authority to revise recommended
standards submitted under the direct
final rule provision in EPCA. Therefore,
DOE did not analyze any additional
product classes beyond those product
classes included in the Joint Agreement.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.007</GPH>
Product Class
31412
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
That is, DOE has not separately
considered or established amended
standards applicable to any short-cycle
product classes. In the event that DOE
establishes short-cycle product classes,
pursuant to the rulemaking on remand
from the Fifth Circuit, DOE will
necessarily consider what amended
standards ought to apply to any such
product classes and will do so in
conformance with EPCA.
DOE notes that the data and analysis
used to support this direct final rule
includes information for standard-size
and compact-size dishwashers that is
not distinguished by cycle time and is
representative of all dishwashers
currently on the market today. To the
extent that any short-cycle products
were included in this data and analysis,
DOE believes the amount of such data
is negligible.
A. Scope of Coverage
This direct final rule covers those
consumer products that meet the
definition of ‘‘dishwasher’’ as codified
at 10 CFR 430.2.
Dishwasher means a cabinet-like
appliance which with the aid of water
and detergent, washes, rinses, and dries
(when a drying process is included)
dishware, glassware, eating utensils,
and most cooking utensils by chemical,
mechanical and/or electrical means and
discharges to the plumbing drainage
system. 10 CFR 430.2.
See section IV.A.1 of this document
for discussion of the product classes
analyzed in this direct final rule.
khammond on DSKJM1Z7X2PROD with RULES3
B. Fairly Representative of Relevant
Points of View
Under the direct final rule provision
in EPCA, recommended energy
conservation standards must be
submitted by interested persons that are
fairly representative of relevant points
of view (including representatives of
manufacturers of covered products,
States, and efficiency advocates) as
determined by DOE. (42 U.S.C.
6295(p)(4)(A)) With respect to this
requirement, DOE notes that the Joint
Agreement included a trade association,
AHAM, which represents 16
manufacturers of dishwashers.30 The
Joint Agreement also included
environmental and energy-efficiency
advocacy organizations, consumer
advocacy organizations, and a gas and
30 These companies include: Asko Appliances
AB; Beko US Inc.; BSH Home Appliances
Corporation; Danby Products, Ltd.; Electrolux;
Fotile America; GE Appliances, a Haier Company;
LG Electronics; Midea America Corp.; Miele, Inc.;
Samsung Electronics America, Inc.; Sharp
Electronics Corporation; Smeg S.p.A; Sub-Zero
Group, Inc.; The Middleby Corporation; and
Whirlpool Corporation.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
electric utility company. Additionally,
DOE received a letter in support of the
Joint Agreement from the States of New
York, California, and Massachusetts
(See comment No. 56). DOE also
received a letter in support of the Joint
Agreement from the gas and electric
utility, SDG&E, and the electric utility,
SCE (See comment No. 57). As a result,
DOE has determined that the Joint
Agreement was submitted by interested
persons who are fairly representative of
relevant points of view.
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
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. Sections
6(b)(3)(i) and 7(b)(1) of 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. Section 7(b)(2)
through (5) of appendix A. Section IV.B
of this document discusses the results of
the screening analysis for dishwashers,
particularly the designs DOE
considered, those it screened out, and
those that are the basis for the standards
considered in this rulemaking. For
further details on the screening analysis
for this rulemaking, see chapter 4 of the
direct final rule 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(o)(2)(A)) Accordingly, in the
Frm 00016
Fmt 4701
Sfmt 4700
D. Energy Savings
1. Determination of Savings
C. Technological Feasibility
PO 00000
engineering analysis, DOE determined
the maximum technologically feasible
(‘‘max-tech’’) improvements in energy
efficiency for dishwashers, 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
rulemaking are described in section
IV.C.1.b of this document and in chapter
5 of the direct final rule TSD.
For each TSL, DOE projected energy
savings from application of the TSL to
dishwashers purchased in the 30-year
period that begins in the year of
compliance with the amended standards
(2027–2056).31 The savings are
measured over the entire lifetime of
dishwashers purchased in the 30-year
analysis 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 models to estimate
national energy savings (‘‘NES’’) from
potential amended standards for
dishwashers. 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. For natural
gas, the primary energy savings are
considered to be equal to the site energy
savings. DOE also calculates NES in
terms of full-fuel-cycle (‘‘FFC’’) energy
savings. The FFC metric 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 conservation standards.32 DOE’s
approach is based on the calculation of
an FFC multiplier for each of the energy
types used by covered products or
31 DOE also presents a sensitivity analysis that
considers impacts for products shipped in a 9-year
period.
32 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).
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
equipment. For more information on
FFC energy savings, see section IV.H.2
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.33 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 adopted
in this direct final rule are projected to
result in national energy savings of 0.31
quads FFC, the equivalent of the
primary annual energy use of 2.1
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 determined the energy savings from
the standard levels adopted in this
direct final rule 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 rulemaking.
khammond on DSKJM1Z7X2PROD with RULES3
a. Economic Impact on Manufacturers
and Consumers
In determining the impacts of
potential new or amended standards on
manufacturers, DOE conducts a
manufacturing impact analysis (‘‘MIA’’),
as discussed in section IV.J of this
33 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
17:42 Apr 23, 2024
Jkt 262001
31413
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.
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.
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 cost
(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
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 adopted
in this document would not reduce the
utility or performance of the
dishwashers under consideration in this
rulemaking.
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
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 IV.H of this
document, DOE uses the NIA
spreadsheet models to project national
energy savings.
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 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
E:\FR\FM\24APR3.SGM
24APR3
31414
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
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 direct final rule
to the Attorney General with a request
that the Department of Justice (‘‘DOJ’’)
provide its determination on this issue.
DOE will consider DOJ’s comments on
the rule in determining whether to
withdraw the direct final rule. DOE will
also publish and respond to the DOJ’s
comments in the Federal Register in a
separate notice.
khammond on DSKJM1Z7X2PROD with RULES3
f. Need for National Energy and Water
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 adopted
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 adopted 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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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 effect potential amended
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 rulemaking
with regard to dishwashers. Separate
subsections address each component of
DOE’s analyses, including relevant
comments DOE received during its
separate rulemaking to amend the
energy conservation standards for
dishwashers prior to receiving the Joint
Agreement.
DOE used several analytical tools to
estimate the impact of the standards
considered 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 shipments 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
PO 00000
Frm 00018
Fmt 4701
Sfmt 4700
are available on the DOE website for this
rulemaking: www.regulations.gov/
docket?D=EERE-019-BT-STD-0039.
Additionally, DOE used output from the
latest version of the EIA’s Annual
Energy Outlook (‘‘AEO’’) 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
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 dishwashers. The key
findings of DOE’s market assessment are
summarized in the following sections.
See chapter 3 of the direct final rule
TSD for further discussion of the market
and technology assessment.
1. Product Classes
The Joint Agreement specifies two
product classes for dishwashers. (Joint
Agreement, No. 55 at p. 8) In this direct
final rule, DOE is adopting the product
classes from the Joint Agreement, as
follows:
(1) Standard-size dishwashers (≥8
place settings plus 6 serving pieces);
and
(2) Compact-size dishwashers (<8
place settings plus 6 serving pieces). Id.
Where the place settings are as
specified in AHAM DW–1–2020 and the
test load is as specified in section 2.4 of
appendix C2. Id.
DOE further notes that product classes
established through EPCA’s direct final
rule authority are not subject to the
criteria specified at 42 U.S.C. 6295(q)(1)
for establishing product classes.
Nevertheless, in accordance with 42
U.S.C. 6295(o)(4)—which is applicable
to direct final rules—DOE has
concluded that the standards adopted in
this direct final rule will not result in
the unavailability in any covered
product type (or class) of performance
characteristics, features, sizes,
capacities, and volumes that are
substantially the same as those generally
available in the United States
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
currently.34 DOE’s findings in this
regard are discussed in detail in section
V.B.4 of this document.
2. Technology Options
khammond on DSKJM1Z7X2PROD with RULES3
In this direct final rule, DOE
considered 20 technology options,
consistent with the table of technology
options presented in the May 2023
NOPR. 88 FR 32514, 32527–32528. In
general, technology options for
dishwashers may reduce energy use
alone, or reduce both energy and water
use together. Most dishwashers in the
United States use as their water source
a hot water line that is typically tapped
from the hot water line serving the
adjacent kitchen faucet. Because the
energy used to heat the water consumed
by the dishwasher is included as part of
the EAEU metric, technologies that
decrease water use also inherently
decrease energy use. Chapter 3 of the
TSD for this direct final rule includes a
detailed list and descriptions of all
technology options identified for
dishwashers, including a discussion of
how each technology option reduces
energy use only or both energy and
water use together.
Among the technology options
identified for dishwashers, the
following reduce energy use only (i.e.,
they reduce energy use without directly
reducing water use): condensation
drying, including use of a stainless steel
tub; desiccant drying; fan/jet drying;
improved motor efficiency; increased
insulation; low-standby-loss electronic
controls; reduced inlet-water
temperature; thermoelectric heat
pumps; ultrasonic washing; and
variable-speed motors.
The following technology options
reduce both energy and water use
together (i.e., they reduce water use,
thereby also inherently reducing energy
use): control strategies; flow-through
heating; improved fill control; improved
food filter; improved spray-arm
geometry; microprocessor controls and
fuzzy logic, including adaptive or soilsensing controls; modified sump
geometry, with and without dual
pumps; super-critical carbon dioxide
washing; variable washing pressures
and flow rates; and water re-use system.
34 EPCA specifies that DOE may not prescribe an
amended or new standard if the Secretary finds
(and publishes such finding) that interested persons
have established by a preponderance of the
evidence that the standard is likely to result in the
unavailability in the United States 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 at the time of the Secretary’s finding. (42
U.S.C. 6295(o)(4))
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
31415
In developing the list of technology
options for this direct final rule, DOE
considered comments it had received in
response to the May 2023 NOPR.
Samsung Electronics America, Inc.
(‘‘Samsung’’) noted 35 that variablespeed pump motors reduce energy
consumption by allowing the
dishwasher to operate at the most
suitable flow rate for each specific phase
of the cleaning process. (Samsung, No.
52 at p. 2) Samsung agreed with DOE
that enhancements in dishwasher
components also contribute to energy
efficiency, especially advanced
technologies such as electronic and soilsensing controls. Samsung commented
that the technology options identified
by DOE are achievable and can be
implemented by manufacturers to
significantly improve energy efficiency,
reduce resource consumption, and
promote sustainability while
maintaining cleaning performance that
consumers expect. (Samsung, No. 52 at
pp. 2–3) As noted, DOE has maintained
the technology options discussed in the
May 2023 NOPR.
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 subsequent sections of this
document discuss 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.
The results of the screening analysis are
discussed in greater detail in chapter 4
of the TSD for this direct final rule.
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
1. Screened-Out Technologies
The following sections detail the
technology options that were screened
out for this direct final rule, and the
reasons why they were eliminated.
35 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0052.
PO 00000
Frm 00019
Fmt 4701
Sfmt 4700
a. Desiccant Drying
Desiccant drying relies on a material
such as zeolite 36 to adsorb moisture to
aid in the drying process and reduce
drying energy consumption. DOE is
aware of dishwashers from one
manufacturer on the market in the
United States that use desiccant
drying.37
DOE has screened out desiccant
drying from further consideration
because it is a unique-pathway
proprietary technology. Desiccant
drying is a patented technology, and
although multiple manufacturers hold
patents for dishwasher designs with
desiccant drying features, DOE is
concerned that this technology option is
not available for all manufacturers.
b. Reduced Inlet-Water Temperature
Reduced inlet-water temperature
requires that dishwashers tap the cold
water line for their water supply.
Because most dishwashers in the United
States tap the hot water line, this
technology option would require
significant alteration of existing
dishwasher installations in order to
36 Zeolite is a highly porous aluminosilicate
mineral that adsorbs moisture and releases heat to
aid in the drying process.
37 See chapter 4, section 4.2.1.1 of the January
2022 Preliminary TSD.
E:\FR\FM\24APR3.SGM
24APR3
31416
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
accommodate newly purchased units
incorporating this technology option.
Therefore, DOE has determined that it
would not be practicable to install this
technology on the scale necessary to
serve the relevant market at the time of
the effective date of an amended
standard.
c. Supercritical Carbon Dioxide
Washing
Supercritical carbon dioxide washing,
which uses supercritical carbon dioxide
instead of conventional detergent and
water to wash dishes, is currently being
researched. Given that this technology is
in the research stage, DOE has
determined that it would not be
practicable to manufacture, install and
service this technology on the scale
necessary to serve the relevant market at
the time of the effective date of an
amended standard. Furthermore,
because this technology is in the
research stage, it is not yet possible to
assess whether it would have any
adverse impacts on equipment utility to
consumers or equipment availability, or
any adverse impacts on consumers’
health or safety.
khammond on DSKJM1Z7X2PROD with RULES3
d. Ultrasonic Washing
A dishwasher using ultrasonic waves
to generate a cleaning mist was
produced for the Japanese market in
2002; however, this model is no longer
available on the market. Available
information indicates that the use of a
mist with ion generation instead of
water with detergent would decrease
cleaning performance, impacting
consumer utility.
Ultrasonic dishwashing based upon
soiled-dish immersion in a fluid that is
then excited by ultrasonic waves has not
been demonstrated. In an immersionbased ultrasonic dishwasher, standing
ultrasonic waves within the washing
cavity and the force of bubble cavitation
implosion can damage fragile dishware.
Because no manufacturers currently
produce consumer ultrasonic
dishwashers, it is impossible to assess
whether this technology option would
have any impacts on consumers’ health
or safety, or product availability.
Based on this information, DOE has
screened out both identified product
types that incorporate the ultrasonic
washing technology option.
e. Thermoelectric Heat Pumps
The thermoelectric heat pump system
aims to extract waste heat from drain
water and recover heat normally lost
during the drying process, and apply it
to the washing, rinsing, and drying
phases, effectively saving energy. The
technology is not commercially
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
available yet as the technology is still in
the research phase. Therefore, DOE has
determined that it would not be
practicable to manufacture, install and
service this technology on the scale
necessary to serve the relevant market at
the time of the effective date of the
amended standards. Furthermore,
because this technology is in the
research stage, it is not yet possible to
assess whether it would have any
adverse impacts on equipment utility to
consumers or equipment availability, or
any adverse impacts on consumers’
health or safety.
f. Water Re-Use System
This system saves water from the final
rinse of a given dishwasher cycle for use
in a subsequent dishwasher cycle. A
water re-use system dishwasher also
performs ‘‘drain out’’ and ‘‘clean out’’
cycles if the dishwasher is not operated
for a certain period of time. Both ‘‘drain
out’’ and ‘‘clean out’’ events consume
additional water and energy during the
subsequent cycle, even though such a
system saves water and energy
consumption overall.
DOE has screened out this technology
option as it has determined that leaking
and contamination from a water holding
tank could potentially present negative
health or safety impacts.
2. Remaining Technologies
Through a review of each technology,
DOE concludes that all of the other
identified technologies listed in section
IV.A.2 of this document met all five
screening criteria to be examined further
as design options in DOE’s direct final
rule analysis. In summary, DOE did not
screen out the following technology
options:
Technology options that reduce
energy use only: condensation drying,
including use of a stainless steel tub;
fan/jet drying; improved motor
efficiency; increased insulation; lowstandby-loss electronic controls; and
variable-speed motors.
Technology options that reduce both
energy and water use together: control
strategies; flow-through heating;
improved fill control; improved food
filter; improved spray-arm geometry;
microprocessor controls and fuzzy logic,
including adaptive or soil-sensing
controls; modified sump geometry, with
and without dual pumps; and variable
washing pressures and flow rates.
DOE 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
PO 00000
Frm 00020
Fmt 4701
Sfmt 4700
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). For
additional details, see chapter 4 of the
direct final rule TSD.
C. Engineering Analysis
The purpose of the engineering
analysis is to establish the relationship
between the efficiency and cost of
dishwashers. 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 dishwasher class, DOE
estimates the baseline cost, as well as
the incremental cost for the dishwasher
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 interpolate to define ‘‘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-
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
tech’’ level exceeds the maximum
efficiency level currently available on
the market).
For this analysis, DOE used a
combination of the efficiency-level and
design-option approach. This approach
involved physically disassembling
commercially available products,
reviewing publicly available cost
information, and modeling equipment
cost. From this information, DOE
estimated the manufacturer production
costs (‘‘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. By doing this, the
engineering analysis did not factor in
the additional higher-cost features with
no impact on efficiency that are
included in some models. However, at
efficiency levels where the product
designs significantly deviated from the
baseline product, DOE used the
efficiency-level approach to determine
an MPC estimate, while removing the
costs associated with non-efficiencyrelated components or features. DOE
also provides further discussion on the
design options and efficiency
improvements in chapter 5 of the direct
final rule TSD.
a. Baseline Efficiency
For each dishwasher product 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 dishwasher class represents the
characteristics of a dishwasher 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 dishwashers, DOE identified
products available on the market rated
at the current energy conservation
standards levels for both standard-size
and compact-size dishwasher product
classes. Accordingly, DOE analyzed
these products as baseline units. DOE
uses the baseline unit for comparison in
several phases of the direct final rule
analyses, including the engineering
analysis, LCC analysis, PBP analysis,
and NIA. To determine energy and
water savings that will result from an
amended energy conservation standard,
DOE compares energy and water
consumption at each of the higher
energy efficiency levels to the energy
and water consumption of the baseline
unit. Similarly, to determine the
changes in price to the consumer that
will result from an amended energy
conservation standard, DOE compares
the price of a unit at each higher
31417
efficiency level to the price of a unit at
the baseline. Additional details on the
selection of baseline units may be found
in chapter 5 of the direct final rule TSD.
In the May 2023 NOPR, DOE updated
the baseline efficiency level for the
compact-size dishwasher product class,
when using appendix C2, from 178
kWh/year estimated in the January 2022
Preliminary Analysis to 191 kWh/year.
88 FR 32514, 32530. In the January 2022
Preliminary Analysis, DOE translated
the current compact-size product class
standard level of 222 kWh/year, which
is based on appendix C1, to an EAEU
based on appendix C2 using the
baseline standby power use estimate of
2.3 watts from the December 2016 Final
Determination (see chapter 7 of the
December 2016 Final Determination
TSD).38 Id. at 32531. However, based on
more recent testing of compact-size
dishwashers, DOE determined in its
analysis for the May 2023 NOPR that
current baseline compact-size
dishwashers consume 0.5 watts in
standby mode. Using this updated
standby power value to translate 222
kWh/year from appendix C1 to
appendix C2, DOE calculated an
updated baseline EAEU value of 191
kWh/year for compact-size dishwashers.
Id. Accordingly, in the May 2023 NOPR,
DOE proposed the baseline compactsize dishwasher efficiency level to be
191 kWh/year and 3.5 gal/cycle. Id.
Table IV.1 presents the baseline levels
identified for each dishwasher product
class in the May 2023 NOPR.
Table IV.1: Baseline Dishwasher Efficiency Levels Evaluated in the May 2023
NOPR
Estimated Annual Energy
Use
(kWh/year)*
307
222
khammond on DSKJM1Z7X2PROD with RULES3
Standard-size
Compact-size
* Using appendix C 1
** Using appendix C2
Estimated Annual Energy
Use
(kWh/year)**
263
191
Per-Cycle Water
Consumption
(gal/cycle)
5.0
3.5
DOE sought comment on the baseline
efficiency levels analyzed in the May
2023 NOPR for each product class. 88
FR 32514, 32531. DOE did not receive
any comments related to the selected
baseline efficiency levels, including the
updated baseline efficiency level for
compact-size dishwashers in the May
2023 NOPR. DOE therefore used the
baseline efficiency levels from the May
2023 NOPR in its analysis for this direct
final rule.
Using the efficiency-level approach,
the higher 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 this approach, DOE
identified four efficiency levels beyond
the baseline for standard-size
dishwashers and two for the compactsize product class. At each higher
efficiency level, both energy use and
water use decrease through the
implementation of combinations of
design options that individually either
reduce energy use alone, or reduce both
energy and water use together, as
38 To translate the current dishwasher EAEU
standards from appendix C1 to appendix C2, DOE
separated the EAEU into annual active mode energy
use and annual standby mode energy use. DOE
multiplied the annual active mode energy use by
184 cycles/year and divided by 215 cycles/year,
then added back the annual standby energy use to
determine updated EAEU values based on 184
annual cycles.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
b. Higher Efficiency Levels
PO 00000
Frm 00021
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.008</GPH>
Product Class
31418
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
discussed previously in section IV.A.2
of this document. Chapter 5 of the direct
final rule TSD provides a detailed
discussion of the specific design
changes that DOE believes
manufacturers would typically use to
meet each higher efficiency level
considered in this engineering analysis,
including a discussion of whether such
design changes would reduce energy
use only, or reduce both energy and
water use together.
In defining the higher efficiency
levels for this direct final rule, DOE
considered comments it had received in
response to the higher efficiency levels
proposed in the May 2023 NOPR.
Table IV.2 and Table IV.3 show the
efficiency levels DOE evaluated for
standard-size and compact-size
dishwashers in the May 2023 NOPR. 88
FR 32514, 32534–32535.
BILLING CODE 6450–01–P
Table IV.2: Efficiency Levels for Standard-Size Dishwashers Evaluated in the May
2023NOPR
Efficiency
Level
Estimated Annual Energy
Use
(kWhlvear)*
307
270
260
240
225
Baseline
1
2
3
4 (Max-Tech)
* Using appendix C 1
** Using appendix C2
Estimated Annual Energy
Use
(kWhlvear)**
263
232
223
206
193
Per-Cycle Water
Consumption
(fzallcvcle)
5.0
3.5
3.3
3.2
2.4
Table IV.3: Efficiency Levels for Compact-Size Dishwashers Evaluated in the May
2023NOPR
Per-Cycle Water
Consumption
(~al/cycle)
3.5
3.1
1.6
For standard-size dishwashers, EL 1
corresponded to the ENERGY STAR
Version 6.0 39 (‘‘ENERGY STAR V. 6.0’’)
level, EL 2 corresponded to a gap-fill
efficiency level between ENERGY STAR
V. 6.0 and ENERGY STAR V. 7.0, and
EL 3 corresponded to the ENERGY
STAR V. 7.0 level (which was also the
ENERGY STAR Most Efficient criteria in
2022 and 2023). For compact-size
dishwashers, EL 1 corresponded to the
ENERGY STAR V. 6.0 level. For both
standard-size and compact-size
dishwashers, the max-tech efficiency
level corresponded to the highest
efficiency unit available on the market
at that time, excluding from
consideration models that rely on
technologies that were screened out
previously. 88 FR 32514, 32534–32535.
In the May 2023 NOPR, DOE requested
feedback on the efficiency levels
analyzed for each product class in this
proposal. 88 FR 32514, 32335. DOE did
not receive any comments related to the
selected efficiency levels. DOE therefore
used the baseline and incremental
efficiency levels from the May 2023
NOPR in its analysis for this direct final
rule.
For the reasons discussed, DOE
analyzed for this direct final rule the
efficiency levels for standard-size and
compact-size dishwashers that were
proposed in the May 2023 NOPR, as
reproduced in Table IV.4 and Table
IV.5, respectively.
39 ENERGY STAR Version 6.0 Program
Requirements available at: www.energystar.gov/
sites/default/files/asset/document/ENERGY%
20STAR%20Residential%20Dishwasher%
20Version%206.0%20Final%20Program%20
Requirements_0.pdf
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00022
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.010</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Estimated Annual Energy
Use
(kWh/year)**
191
174
124
ER24AP24.009</GPH>
Estimated Annual Energy
Use
(kWh/year)*
Baseline
220
1
203
2 (Max-Tech)
144
* Using appendix C 1
** Using appendix C2
Efficiency
Level
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31419
Table IV.4: Analyzed Efficiency Levels for Standard-Size Dishwashers
Efficiency
Level
Estimated Annual Energy
Use
(kWh/year)*
307
270
260
240
225
Baseline
1
2
3
4 (Max-Tech)
* Using appendix C 1
** Using appendix C2
Estimated Annual Energy
Use
(kWh/year)**
263
232
223
206
193
Per-Cycle Water
Consumption
(Rallcycle)
5.0
3.5
3.3
3.2
2.4
Table IV.5: Analyzed Efficiency Levels for Compact-Size Dishwashers
DOE notes that the compact-size maxtech unit that was analyzed in the May
2023 NOPR was not included in DOE’s
Compliance Certification Database
(‘‘CCD’’) as of September 2023. Models
that are discontinued over the course of
a DOE rulemaking timeline remain
applicable in conducting the analysis in
accordance with EPCA requirements
because such models incorporate
technologically feasible design options
that manufacturers may use to achieve
the corresponding efficiency levels in
commercial products. The CCD
included models that exceed the
efficiency of the max-tech unit analyzed
in the May 2023 NOPR; however, for
these units, there is a discrepancy
between the rated EAEU in DOE’s CCD
and the EAEU listed on the model’s
EnergyGuide label,40 therefore, DOE did
not consider these units for its max-tech
analysis. Accordingly, DOE has retained
the same compact-size max-tech unit
analyzed in this direct final rule as that
identified in the May 2023 NOPR.
khammond on DSKJM1Z7X2PROD with RULES3
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,
40 The CCD lists models with an EAEU of 114
kWh/year and water consumption of 1.6 gallons/
cycle. However, the EnergyGuide label for these
units lists the EAEU as 154 kWh/year and water
consumption of 1.8 gallons/cycle. Accordingly,
DOE did not consider this unit as the max-tech unit
for this final rule analysis.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
including the availability and reliability
of public information, characteristics of
the regulated product, the availability
and timeliness of purchasing the
dishwasher on the market. The cost
approaches are summarized as follows:
• 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.
• Catalog teardowns: In lieu of
physically deconstructing a product,
DOE identifies each component using
parts diagrams (available from
manufacturer websites or appliance
repair websites, for example) to develop
the bill of materials for the product.
• Price surveys: If neither a physical
nor catalog teardown is feasible (for
example, for tightly integrated products
such as fluorescent lamps, which are
infeasible to disassemble and for which
parts diagrams are unavailable) or costprohibitive and otherwise impractical
(e.g., 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 this direct final rule, DOE
conducted the analysis using the
physical teardown approach. For each
product class, DOE tore down a
representative sample of models
spanning the entire range of efficiency
levels, as well as multiple
manufacturers within each product
class. DOE aggregated the results so that
the cost-efficiency relationship
PO 00000
Frm 00023
Fmt 4701
Sfmt 4700
Per-cycle water
consumption
(Rallcycle)
3.5
3.1
1.6
developed for each product class
reflects DOE’s assessment of a marketrepresentative ‘‘path’’ to achieve each
higher efficiency level. The resulting
bill of materials provides the basis for
the MPC estimates.
To account for manufacturers’ 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 the
annual Securities and Exchange
Commission (‘‘SEC’’) 10–K reports filed
by publicly traded manufacturers
primarily engaged in appliance
manufacturing and whose combined
product range includes dishwashers.
See section IV.J.2.d of this document
and chapter 12 of the direct final rule
TSD for additional detail on the
manufacturer markup.
3. Cost-Efficiency Results
To develop the incremental MPCs
associated with improving product
efficiency for each product class, DOE
started with the baseline unit cost
model and added the expected changes
associated with improving efficiency at
each higher efficiency level. By doing
this, DOE excluded the costs of any nonefficiency related components from the
more efficient units.
Table IV.6 shows the baseline MPCs
for standard-size and compact-size
dishwashers estimated for the May 2023
NOPR. 88 FR 32514, 32536. Table IV.7
and Table IV.8 show the incremental
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.012</GPH>
BILLING CODE 6450–01–C
Estimated Annual Energy
Use
(kWh/year)**
191
174
124
ER24AP24.011</GPH>
Estimated Annual Energy
Use
(kWh/year)*
Baseline
220
1
203
2 (Max-Tech)
144
* Using appendix C 1
** Using appendix C2
Efficiency
Level
31420
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
MPCs from the baseline developed in
the May 2023 NOPR for standard-size
and compact-size dishwashers,
respectively, in 2022 dollars. Id. at 88
FR 32536–32537.
BILLING CODE 6450–01–P
.
• th e Mail 2023 NOPR
Table IV6 BaseI'me M anu facturer Pro dUCfIOn COS tS Ill
Product Class
Standard-size
Compact-size
* Using appendix C2
Estimated Annual Energy
Use
(kWh/year)*
263
191
Per-Cycle Water
Consumption (gal/cycle)
Baseline MPC
5.0
3.5
$184.35
$215.17
(2022$)
Table IV.7: Incremental Manufacturer Production Costs for Standard-Size
Dishwashers in the May 2023 NOPR
Efficiency
Level
Baseline
1
2
3
4 (Max-Tech)
* Using appendix C2
Estimated Annual Energy
Use
(kWh/year)*
263
232
223
206
193
Per-Cycle Water
Consumption
(f!allcvcle)
5.0
3.5
3.3
3.2
2.4
Incremental MPC
(2022$)
$I0.17
$I0.17
$61.50
$91.25
Table IV.8: Incremental Manufacturer Production Costs for Compact-Size
Dishwashers in the May 2023 NOPR
Estimated Annual Energy
Use
(kWh/year)*
Baseline
191
1
174
2 (Max-Tech)
124
* Using appendix C2
Per-Cycle Water
Consumption
(£allcvcle)
3.5
3.1
1.6
Efficiency
Level
For this direct final rule, DOE
updated the underlying raw material
and component prices used in its cost
model to reflect raw material and
component prices as of March 2023.
Table IV.9 presents the baseline MPCs
for each product class as determined for
this final rule, in 2023 dollars. Table
Incremental MPC
(2022$)
$39.45
IV.10 and Table IV.11 provide the
incremental MPCs for each efficiency
level for both product classes as
determined for this final rule.
Table IV.9: Baseline Manufacturer Production Costs
Baseline MPC
(2023$)
$171.50
$192.27
ER24AP24.014</GPH>
ER24AP24.015</GPH>
Per-Cycle Water
Consumption
(f!.al/cycle)
5.0
3.5
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00024
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.013</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Standard-size
Compact-size
* Using appendix C2
Estimated Annual Energy
Use
(kWh/year)*
263
191
ER24AP24.016</GPH>
Product Class
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31421
Table IV.10: Incremental Manufacturer Product Costs for Standard-Size
Dishwashers
Efficiency
Level
Baseline
1
2
3
4 (Max-Tech)
* Using appendix C2
Estimated Annual Energy
Use
(kWh/year)*
263
232
223
206
193
Per-Cycle Water
Consumption
(fza//cycle)
5.0
3.5
3.3
3.2
2.4
Incremental MPC
(2023$)
$16.78
$16.78
$74.67
$117.83
Table IV.11: Incremental Manufacturer Product Costs for Compact-Size
Dishwashers
Per-Cycle Water
Consumption
(~al/cycle)
3.5
3.1
1.6
khammond on DSKJM1Z7X2PROD with RULES3
The detailed description of DOE’s
determination of costs for baseline and
higher efficiency levels is provided in
chapter 5 of the direct final rule TSD.
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 considered two distribution
channels through which dishwashers
move from manufacturers to consumers.
The majority of dishwasher sales go
through the direct retailer channel, in
which manufacturers sell the products
directly to retailers, who then sell to
consumers. This direct retailer channel
accounts for 85 percent of the
dishwasher market. The rest of the
market goes through a separate
distribution channel, in which
manufacturers sell the products to
wholesalers, who in turn sell the
products to general contractors, then to
consumers. The main parties in the
post-manufacturer distribution channels
are retailers, wholesalers, and general
contractors.
DOE developed baseline and
incremental markups for each actor in
the distribution chain. Baseline
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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.41
DOE relied on economic data from the
U.S. Census Bureau to estimate average
baseline and incremental markups.
Specifically, DOE used the 2017 Annual
Retail Trade Survey for the ‘‘electronics
and appliance stores’’ sector to develop
retailer markups.42
For this direct final rule, DOE
considered comments it had received
regarding the markups analysis
conducted for the May 2023 NOPR. The
approach for determining markups in
this direct final rule was the same
approach DOE had used for the May
2023 NOPR analysis.
In response to the March 2023 NOPR,
AHAM commented 43 that it, along with
41 Because the projected price of standardscompliant products is typically higher than the
price of baseline products, using the same markup
for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While
such an outcome is possible, DOE maintains that in
markets that are reasonably competitive it is
unlikely that standards would lead to a sustainable
increase in profitability in the long run.
42 US Census Bureau, Annual Retail Trade
Survey. 2017. www.census.gov/programs-surveys/
arts.html
43 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0051.
PO 00000
Frm 00025
Fmt 4701
Sfmt 4700
(2023$)
$38.17
AHRI and other stakeholders, disputes
DOE’s distinction between markups
from manufacturers to end customers
for the base case, those for costs added
to meet proposed standards, and the use
of incremental versus average markups.
(AHAM, No. 51 at p. 18) AHAM stated
that in its comments on the 2015 NOPR
contained quotes from actual retailers
about their actual practices and they
contradict the DOE process. (Id.)
DOE’s incremental markup approach
assumes that an increase in operating
profits, which is implied by keeping a
fixed average markup when the product
price goes up, is unlikely to be viable
over time in a reasonably competitive
market like household appliance
retailers. The Herfindahl-Hirschman
Index reported by the 2017 Economic
Census indicates that the household
appliance stores sector (NAICS 443141)
is a competitive marketplace.44 DOE
recognizes that actors in the distribution
chains are likely to seek to maintain the
same markup on appliances in response
to changes in MSPs after an amendment
to energy conservation standards.
However, DOE believes that retail
44 2017 Economic Census, Selected sectors:
Concentration of largest firms for the U.S. Available
at www.census.gov/data/tables/2017/econ/
economic-census/naics-sector-44-45.html. The
Herfindahl-Hirschman Index value can be found by
navigating to the ‘‘Concentration of largest firms for
the U.S.’’ table and then filtering the industry code
to NAICS 443141.The Herfindahl-Hirschman Index
reported for the largest 50 firms in household
appliance stores sector, is 123.8. Generally, a
market with an HHI value of under 1,000 is
considered to be competitive.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.018</GPH>
BILLING CODE 6450–01–C
Incremental MPC
ER24AP24.017</GPH>
Estimated Annual Energy
Use
(kWh/year)*
Baseline
191
1
174
2 (Max-Tech)
124
* Using appendix C2
Efficiency
Level
31422
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
pricing is likely to adjust over time as
those actors are forced to readjust their
markups to reach a medium-term
equilibrium in which per-unit profit is
relatively unchanged before and after
standards are implemented.45
According to economic theory, firms in
a perfectly competitive market are
expected to achieve only normal profits
in the long run, and any short-term
economic profit would be eroded by
entry and increased competition over
time. While it is acknowledged that no
real-world market perfectly fits the
conditions of perfect competition, the
theory provides insights into industries
and sectors that share certain
characteristics. As indicated by industry
data,46 the appliance retail sector is a
competitive marketplace; thus, DOE
contends that an increase in
profitability, which is implied by
keeping a fixed average markup when
the production cost goes up, is not
likely viable in the long run.
DOE acknowledges that markup
practices in response to amended
standards are complex and varying with
business conditions. However, DOE’s
analysis necessarily only considers
changes in appliance offerings that
occur in response to amended standards
and isolates the effect of amended
standards from other factors. DOE agrees
that empirical data on markup practices
would be desirable, but such
information is closely held and difficult
to obtain. Consequently, DOE relies to
economic theory as the foundation for
developing the markup analysis. Hence,
DOE continues to maintain that its
assumption that standards do not
facilitate a sustainable increase in
profitability is reasonable.
The comments submitted by AHAM
during the 2015 NOPR contain quotes
from their interviews with retailers, but
do not provide the details and the
interview questions used by their
consultant based on data confidentiality
reasons. However, without knowing
what questions were posed to the
contractors and retailers, it is
challenging for DOE to evaluate the
applicability of those quotes. As noted,
45 A recent retrospective study by LBNL
compared ex-ante projections of the 2011 Direct
Final Rule for Room ACs with ex-post data across
various analytical inputs. While the observed
product price data remain sparse, the available
market data suggests that for some product classes,
prices did not significantly increase after the
standard change, and for others, the prices aligned
with DOE’s projections. 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.
46 IBISWorld, US Industry Reports (NAICS):
https://my.ibisworld.com/us/en/industry/home.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
DOE’s analysis necessarily considers a
situation in which nothing changes
except for those changes in appliance
offerings that occur in response to
amended standards, and this needs to be
addressed clearly in the framing of the
questions.
Chapter 6 of the direct final rule TSD
provides details on DOE’s development
of markups for dishwashers.
E. Energy and Water Use Analysis
The purpose of the energy and water
use analysis is to determine the annual
energy and water consumption of
dishwashers at different efficiencies in
representative U.S. single-family homes,
and multi-family residences, and to
assess the energy and water savings
potential of increased dishwasher
efficiency. In order to determine
representative life-cycle costs (as
discussed in IV.F), both annual energy
and water consumption are considered
at each efficiency level because the
technologies to improve energy
efficiency may also reduce water usage
(as discussed in IV.C.1.b). The energy
and water use analysis estimates the
range of energy and water use of
dishwashers in the field (i.e., as they are
actually used by consumers). The
energy and water use analysis provides
the basis for other analyses DOE
performed, particularly assessments of
the energy and water savings and the
savings in consumer operating costs that
could result from adoption of amended
or new standards.
For this direct final rule, DOE
considered comments it had received
regarding the energy and water use
analysis conducted for the May 2023
NOPR. The approach used to estimate
the energy and water consumption for
this direct final rule is largely the same
as the approach DOE had used for the
May 2023 NOPR analysis.
In the May 2023 NOPR, DOE
determined the average annual energy
and water consumption of dishwashers
by multiplying the per-cycle energy and
water consumption by the number of
cycles per year. 88 FR 32514, 32537.
DOE used the EIA’s 2020 Residential
Energy Consumption Survey (‘‘RECS’’)
data to calculate an estimate of annual
number of cycles.47 Id. Having
determined number of cycles of
dishwasher use per year for each RECS
household, DOE determined the
corresponding annual energy and water
consumption. Id. In the May 2023
NOPR, DOE determined the average
47 U.S.
Department of Energy-Energy Information
Administration, Residential Energy Consumption
Survey, 2015 Public Use Microdata Files, 2020.
Washington, DC. Available at www.eia.doe.gov/
emeu/recs/recspubuse20/pubuse20.html.
PO 00000
Frm 00026
Fmt 4701
Sfmt 4700
annual cycles of operation for
dishwashers to be 197 cycles per year
based on RECS 2020. (Id. 88 FR 32538)
In response to the May 2023 NOPR,
Alliance for Water Efficiency (‘‘AWE’’)
recommended 48 that DOE consider
using actual data for its assumptions
about cycles per year. (AWE, No. 44 at
p. 2) AWE commented that a significant
difference exists between the 197 cycles
per year that DOE is using and the 95
cycles per year the water industry
typically uses. (Id.) AWE stated that the
water industry frequently relies on
residential end use data from
Residential End Uses of Water, Version
2 Water Research Foundation Report
#4309b (‘‘REUW 2016’’). (Id.) AWE also
stated that its experience and academic
research suggest there are often large
gaps between consumer survey
responses and actual behavior when it
comes to fixture and appliance usage.
(Id. at p. 3) AWE commented that DOE
could explore acquiring data from
companies using smart devices, submeters, or sensors installed on water
meters and supply lines in thousands of
homes across the United States that
collect real-time end use data, which
could then be disaggregated. (Id.)
DOE has reviewed the REUW 2016
report published by the Water Research
Foundation, which analyzed
dishwasher end-use data from detailed
log data from 762 households. DOE
acknowledges that RECS is based on
household reported frequency of
average dishwasher usage per week,
rather than on contemporaneous logs
taken by households or meters installed
on household dishwashers, which could
be more reliable on an individual basis.
However, unlike the REUW 2016, which
is based on households in the service
areas of 21 U.S. utilities, the RECS 2020
consists of a nationally representative
sample of housing units including more
than 10,000 households that report
dishwasher usage. DOE also
acknowledges AWE’s concern that
survey data can be different from field
metered data. For a comparison between
survey data and field metered data, DOE
referred to a report from Sun et al. that
showed that the average annual
dishwasher cycle counts obtained from
Pecan Street field metered data based on
a limited household sample size and
limited geographic locations were
comparable with the average cycle
counts reported by RECS 2020 with a
difference of three percent.49 Therefore,
48 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0044.
49 Sun, Q., et al. 2022. Using Field-Metered Data
to Characterize Consumer Usage Patterns of
Residential Dishwashers. Lawrence Berkeley
National Laboratory, Berkeley, CA.
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
DOE considers RECS to be the most
nationally representative dataset to
approximate consumer dishwasher
usage in the U.S. and uses it in the
analysis for this direct final rule.
AHAM commented that DOE
eliminated the numerical threshold for
the significant conservation of energy
savings determination that was in the
prior Process Rule, reverting to its
earlier approach of determining whether
energy savings are significant on a caseby-case basis. AHAM noted that the
amended standards for dishwasher
would result in 0.31 quads, but DOE
could achieve far greater savings
through other means such as public
education. AHAM stated that on a
monthly basis, savings are so minuscule
as to render them meaningless relative
to the potential increase in up-front
purchase costs, particularly for
dishwashers on the lower end of the
price scale. AHAM recommended that
DOE use median savings as a way to
partially overcome the bias in the RECS
data where a few outlier high usage
RECS data points distort the results.
(AHAM, No. 51 at p. 6) AHAM stated
using the median LCC savings, the
savings are approximately $0.72 cents
per year, which is an amount so small
as not to even be noticed by consumers
on their monthly balance sheets. (Id. at
pp. 6–7) AHAM further stated that
proposed standards that are not cost
effective are not economically justified
under EPCA because the savings do not
justify the manufacturer and consumer
burdens that result from the amended
standards and DOE should issue a
determination not to amend standards
beyond EL 1 for dishwashers. (Id.)
As described in section IV.E of this
document, DOE’s energy and water use
analysis for this direct final rule is
derived based on RECS 2020, which
provides household’s dishwasher loads
information ranging from 1 cycle to 21
cycles per week, once after every meal.
The household survey-based annual
energy and water use for each
household then feed into the LCC
analysis. Excluding minimum and
maximum values from the RECS
households samples would result in a
less accurate representation of the actual
national dishwasher usage patterns and
consumption distribution exhibited by
the household sample. However, as a
standardized approach, DOE presents
the distributions of LCC savings for each
product class and efficiency level as
histograms and boxplots in chapter 8 of
the direct final rule TSD, which can also
be generated via the published LCC
spreadsheet tool. This approach allows
stakeholders to observe the full range of
LCC savings over the relevant time
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
scale, which accounts for the total costs
and savings to a consumer over the
lifetime of a new unit purchased in the
compliance year, enabling a more
informed evaluation of the potential
impacts of the proposed standards. In
addition, DOE’s decision on amended
standards is not solely determined by
the average LCC savings. While LCC
savings play a role, they are considered
alongside other critical factors,
including the percentage of negatively
impacted consumers, the simple
payback period, and the overall impact
on manufacturers. DOE further notes,
that while AHAM submitted these
comments in response to the May 2023
NOPR, since then AHAM became a
party to the Joint Agreement and is
supportive of the recommended
standard adopted in this direct final rule
The California Inventor-Owned
Utilities (‘‘CA IOUs’’) 50
recommended 51 that DOE conduct a
representative consumer survey to
review the assumption that consumers
turn off the power-dry feature 50
percent of the time if such options
exists, and in the absence of such
information, amend the test procedure
to test the default cycle with all
manufacturer recommended settings for
everyday use enabled. The CA IOUs
expressed concern that DOE lacked
solid supportive data and defaulted to
the Department of Commerce Voluntary
Labeling Program’s position that for
‘‘any feature requiring a consumer
interaction and for which actual usage
is unknown,’’ a ‘‘50 percent frequency’’
was assumed. (CA IOUs, No. 50 at p. 6)
The CA IOUs commented that in
practice, it is unclear how often
consumers actually choose to disable
power-dry and that DOE is reducing the
annual energy consumption of 15 units
by an average of 6 percent without proof
of the expected consumer behavior. The
CA IOUs cited to a 2007 Proctor &
Gamble study that indicated 66 percent
of households use the power-dry feature
regularly. The CA IOUs suggested that
DOE collect data to update this
conclusion based on consumer use of
power-dry, its relation to the ability to
disable the feature, and its presence in
default operation or recommendation
for everyday use. (Id. at p. 7)
DOE updates its analyses with the
most current, nationally representative
data. As pointed out by the CA IOU, the
2007 Proctor & Gamble study did not
specify if the dishwashers of the
50 The ‘‘CA IOUs’’ includes Pacific Gas and
Electric Company, SDG&E, and SCE; collectively,
the California Investor-Owned Utilities.
51 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0050.
PO 00000
Frm 00027
Fmt 4701
Sfmt 4700
31423
participants had the option to turn off
heated dry, or if the heated dry option
was by default on or off, and it was
unclear how the consumer samples
were selected. DOE is unaware of any
nationally representative consumer data
showing consumer selection of drying
options. Conducting a survey as
suggested is not viable within the
context of this rulemaking, but DOE
may consider doing so for a future
rulemaking. The calculation of EAEU at
10 CFR 430.23 assumes dishwashers
with the power dry feature use it 50
percent of the time. In the absence of
any other nationally representative data
set, DOE is using the same assumption
in this direct final rule analysis. DOE
did not include drying option selections
in this direct final rule analysis, but may
consider other assumptions regarding
use of drying features in future
dishwasher test procedure rulemakings.
AWE commented that DOE should
more thoroughly consider and evaluate
the energy embedded in the water that
will be saved from the proposed
standard, in addition to end-user energy
use. (AWE, No. 44 at p. 4) AWE has
developed a water conservation tracking
tool for evaluating the water savings,
costs, and benefits of urban water
conservation programs and for
projecting future water demands. (Id.)
AWE further stated that DOE could also
adjust this based on the assumptions it
is currently using for private wells and
DOE can calculate the emissions-related
benefits in the same way it has
calculated them for direct energy
savings. (Id. at p. 5)
DOE has previously determined that
EPCA does not direct DOE to consider
the energy used for utility water
treatment and delivery. In a May 2012
Final Rule on Residential Clothes
Washers, DOE noted that EPCA directs
DOE to consider ‘‘the total projected
amount of energy, or as applicable,
water, savings likely to result directly
from the imposition of the standard.’’ 77
FR 32308, 32346 (quoting 42 U.S.C.
6295(o)(2)(B)(i)(III)). In the May 2012
Final Rule on Residential Clothes
Washers, DOE interpreted ‘‘directly
from the imposition of the standard’’ to
include energy used in the generation,
transmission, and distribution of fuels
used by appliances. Unlike the energy
used for water treatment and delivery,
primary energy savings and the fullfuel-cycle measure are in a distribution
chain that is directly linked to the
energy used by appliances. (Id.)
Chapter 7 of the direct final rule TSD
provides details on DOE’s energy and
water use analysis for dishwashers.
E:\FR\FM\24APR3.SGM
24APR3
31424
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
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 dishwashers. Because the
technologies to improve energy
efficiency may also reduce water usage
(as discussed in IV.C.1.b), the economic
impacts in the LCC and PBP include
both energy consumption and water
consumption. 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:
• 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 and
water use, maintenance, and repair). To
compute the operating costs, DOE
discounts future operating costs to the
time of purchase and sums them over
the lifetime of the product.
• The PBP is the estimated amount of
time (in years) it takes consumers to
recover the increased purchase cost
(including installation) of a moreefficient product through lower
operating costs. DOE calculates the PBP
by dividing the change in purchase cost
at higher efficiency levels by the change
in annual operating cost for the year that
amended or new standards are assumed
to take effect.
For any given efficiency level, DOE
measures the change in LCC relative to
the LCC in the no-new-standards case,
which reflects the estimated efficiency
distribution of dishwashers in the
absence of new or amended energy
conservation standards. In contrast, the
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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 housing units. As
stated previously, DOE developed
household samples from the RECS 2020.
For each sample household, DOE
determined the energy and water
consumption for the dishwashers and
the appropriate energy and water prices.
By developing a representative sample
of households, the analysis captured the
variability in energy and water
consumption and energy and water
prices associated with the use of
dishwashers.
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 and water
consumption, energy and water 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
dishwasher user samples. For this
rulemaking, the Monte Carlo approach
is implemented in MS Excel together
with the Crystal BallTM add-on.52 The
52 Crystal BallTM is a commercially available
software tool to facilitate the creation of these types
PO 00000
Frm 00028
Fmt 4701
Sfmt 4700
model calculated the LCC for products
at each efficiency level for 10,000
housing units per simulation run. The
analytical results include a distribution
of 10,000 data points showing the range
of LCC savings for a given efficiency
level relative to the no-new-standards
case efficiency distribution. In
performing an iteration of the Monte
Carlo simulation for a given consumer,
product efficiency is chosen based on its
probability. If the chosen product
efficiency is greater than or equal to the
efficiency of the standard level under
consideration, the LCC calculation
reveals that a consumer is not impacted
by the standard level. By accounting for
consumers who already purchase moreefficient products, DOE avoids
overstating the potential benefits from
increasing product efficiency.
DOE calculated the LCC and PBP for
consumers of dishwashers as if each
were to purchase a new product in the
first year of required compliance with
amended standards. Amended
standards apply to dishwashers
manufactured 3 years after the date on
which any new or amended standard is
published. (42 U.S.C. 6295(m)(4)(B))
Therefore, DOE used 2027 as the first
year of compliance with any amended
standards for dishwashers.
Table IV.12 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
chapter 8 of the direct final rule TSD
and its appendices.
BILLING CODE 6450–01–P
of models by generating probability distributions
and summarizing results within Excel. Available at
www.oracle.com/middleware/technologies/
crystalball.html (last accessed Oct. 19, 2023).
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31425
Table IV.12 Summary of Inputs and Methods for the LCC and PBP Analysis*
Source/Method
Derived by multiplying MPCs by manufacturer and retailer markups and sales
Product Cost
tax, as appropriate. Used historical data to derive a price scaling index to project
product costs.
Baseline installation cost based on manufacturers' inputs.
Installation Costs
Assumed no change in installation costs with efficiency level.
Annual Energy and
Per cycle energy and water use multiplied by the number of cycles per year.
Variability: Based on the RECS 2020.
Water Use
Electricity: Based on Edison Electric Institute data for 2022.
Natural Gas: Based on EIA's Natural Gas Navigator for 2022.
LPG and Fuel Oil: Based on EIA's State Energy Consumption, Price, and
Energy and Water
Expenditures Estimates data for 2022.
Prices
Variability: Regional energy prices determined by Census Division.
Water: Based on 2022 AWWA/Raftelis Survey. AHS 2021,** CDC 2023,t NGWA 2020.!
V ariabilitv: Regional water prices determined bv Census Region.
Energy and Water
Based on AEO 2023 price projections.
Water: Forecasted using BLS historic water price index information.
Price Trends
Repair and
Repair costs vary by product class and by efficiency level based on
Maintenance Costs
manufacturers' inputs.
Product Lifetime
Average: 15.2 years
Approach involves identifying all possible debt or asset classes that might be
used to purchase the considered appliances, or might be affected indirectly.
Discount Rates
Primary data source was the Federal Reserve Board's Survey of Consumer
Finances.
Compliance Date
2027
* Not used for PBP calculation. References for the data sources mentioned in this table are provided in the sections
following the table or in chapter 8 of the direct final rule TSD .
•• American Housing Survey, www.census.gov/programs-surveys/ahs.html
t Center for Disease Control, www.cdc.gov/healthywater/drinking/private/wells/maintenance.html#print
i National Ground Water Association, www.ngwa.org/docs/default-source/default-document-library/groundwater/usagroundwater-use-fact-sheet.pdf?sfvrsn=5c 7a0db8_4
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–C
For this direct final rule, DOE
considered comments it had received
regarding the LCC analysis conducted
for the May 2023 NOPR. The LCC
approach used for this direct final rule
is largely the same as the approach DOE
had used for the May 2023 NOPR
analysis.
In response to the May 2023 NOPR,
AHAM commented that DOE should
focus on conducting a purchase
decision analysis instead of relying on
outcomes and long-term cost analyses.
(AHAM, No. 51 at p. 18) AHAM
commented that the logical basis for
regulation lies in identifying consumer
and systemic market failures, where
consumer failure refers to making
‘‘incorrect’’ decisions due to a lack of
information. (Id.) AHAM stated that
systemic market failure relates to
mispricing of inputs (such as
underpricing of the environmental
impacts in energy prices) or other
similar conditions. AHAM commented
that while there are many critiques of
how accurate a rational choice model is
for true consumer behavior, including
the recent insights of behavioral
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
economics, all of these discussions start
from the premise of a purchase decision
choice model. AHAM commented on
the importance of considering the actual
conditions and expectations of
purchasers in DOE’s LCC model,
separate from the broader economic
impact analysis, which should be in the
National Impact Analysis. (Id.) AHAM
suggested that the LCC model should
assess the extent of market failure by
comparing the actual rate of energyefficient product purchases with the rate
that rational consumers would choose.
(Id.)
The LCC analysis currently relies on
market data on the distribution of
efficiency of products to assign products
with varying efficiency performance to
each household when compliance with
the standard becomes required. This
approach is intended to simulate the
range of individual outcomes resulting
from the hypothetical setting of a
revised energy conservation standard at
various levels of efficiency when the
data needed to develop a productspecific consumer choice model are
currently unavailable. This is a
PO 00000
Frm 00029
Fmt 4701
Sfmt 4700
methodological decision made by DOE
after considering the existence of
various systematic market failures (e.g.,
information asymmetries, bounded
rationality, etc.) and their implication in
rational versus actual purchase
behavior. Considering that individual
consumer decisions may be driven by
multiple factors and may vary based on
demographic features as well as
available information to consumers at
the time of purchase, the data required
to develop a product specific complex
consumer choice model were
unavailable in the case of dishwashers.
In the LCC analysis, DOE aims to
simulate the range of individual
outcomes resulting from a hypothetical
setting of revised energy efficiency
standards. Both the distribution and the
national average values were
considered. Moreover, the outcome of
the LCC is not considered in isolation,
but in the context of the broader set of
analyses, including the NIA. DOE
further notes, that AHAM is a party to
the Joint Agreement and is supportive of
the recommended standard adopted in
this direct final rule.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.019</GPH>
Inputs
khammond on DSKJM1Z7X2PROD with RULES3
31426
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
AHAM stated that there have been
changes in DOE’s analysis for standardsize dishwashers between the January
2022 Preliminary Analysis and the May
2023 NOPR including the percentage of
consumers experiencing a net cost
decreased from 43 percent to 3 percent
and the payback period decreased from
7 to 2.4 years and it is unclear how DOE
arrived at the new conclusions that have
a significant impact on overall energy
savings estimates and economic
analysis. (AHAM, No. 51 at p. 26)
Whirlpool Corporation (‘‘Whirlpool’’)
questioned 53 why there is such a big
departure in consumer costeffectiveness for EL 2 between the
January 2022 Preliminary Analysis and
the May 2023 NOPR. (Whirlpool, No. 45
at pp. 3–4) Whirlpool commented that
compared to the 43 percent of
consumers who were estimated to
experience a net cost from EL 2 in the
January 2022 Preliminary Analysis, only
3 percent of consumers are now
estimated to experience a net cost from
this level in the May 2023 NOPR. (Id.)
Whirlpool further commented that given
this very large apparent change in the
data and the impact that this has on
DOE’s overall selection of TSLs, DOE
should provide stakeholders with
supporting information/data that led to
this drastic change in the analysis. (Id.)
DOE updates its analytical inputs
with the most recent available data
sources, in response to stakeholder
comment, and based on information
obtained through testing, teardowns,
manufacturer interviews, and any
additional research and analysis. Input
updates include MPCs, energy and
water prices and price trends, dollar
year, price learning trends, product
efficiency distributions, discount rate,
sales tax, and shipments. For this final
rule, the LCC inputs are summarized in
Table IV.12. Because of those input
changes, the LCC results were changed
in the May 2023 NOPR analysis, and
again in the direct final rule analysis
compared to those from the January
2022 Preliminary Analysis. In this case,
the primary driver of the decrease in
percent of consumers with a net cost is
based on a change in MPC between the
January 2022 Preliminary Analysis and
the May 2023 NOPR, driven by DOE’s
updated engineering analysis.
Specifically, based on manufacturer
feedback, DOE revisited its teardown
analysis and observed that the same
technology options exist at both EL 1
and EL 2, with EL 2 units having
improved control started and design
tolerances. For these reasons, the MPC
53 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0045.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
at EL 2 is the same as that at EL 1, which
decreases the percent of consumers with
a net cost at EL 2. DOE notes that
AHAM (of which Whirlpool is a
member) supported the Recommended
TSL, which includes the same EL as the
standards proposed in the May 2023
NOPR for standard-size dishwashers.
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. An 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. To derive the learning rate
parameter for dishwashers, DOE
obtained historical Producer Price Index
(‘‘PPI’’) data for appliances from the
Bureau of Labor Statistics (‘‘BLS’’). A
PPI for ‘‘all-other-miscellaneoushousehold-appliances’’ was available for
the time period between 1988 and
2014.54 However, the all-othermiscellaneous-household-appliances
PPI was discontinued beyond 2014 due
to insufficient sample size. To extend
the price index beyond 2014, DOE
assumed that the price index of primary
products of major household appliance
manufacturing would trend similarly to
all other miscellaneous household
appliances. This is because, based on
communications with BLS researchers,
discontinued series are often grouped
into the primary products under the
more aggregated PPI series. Examining
the PPI of all other miscellaneous
household appliances and primary
products of major household appliances
shows that the magnitudes of both price
trends align with each other. Inflationadjusted price indices were calculated
by dividing the PPI series by the gross
domestic product index from Bureau of
Economic Analysis for the same years.
Using data from 1988–2021, the
estimated learning rate (defined as the
fractional reduction in price expected
54 U.S. Bureau of Labor Statistics, PPI Industry
Data, Major household appliance manufacturers,
Product series ID: PCU 33522033522011. Data series
available at www.bls.gov/ppi/.
PO 00000
Frm 00030
Fmt 4701
Sfmt 4700
from each doubling of cumulative
production) is 24.2 percent, which
results in an average annual price
decline of 0.96 percent. See chapter 8 of
the direct final rule TSD for further
details on this topic.
For this direct final rule, DOE
considered comments it had received
regarding the methodology for
calculating consumer product costs that
was presented in the May 2023 NOPR.
The approach used for this direct final
rule is largely the same as the approach
DOE had used for the May 2023 NOPR
analysis.
In response to the May 2023 NOPR,
Northwest Energy Efficiency Alliance
(‘‘NEEA’’) encouraged 55 DOE to
consider a specific learning curve for
variable-speed drives when conducting
future dishwasher standards analyses
similar to its approach in the recent
refrigerator standards rulemaking.
(NEEA, No. 53 at p. 2)
DOE did not consider a specific price
learning curve for variable-speed drives
due to the lack of data regarding the
data regarding the relevant market share
of products. DOE will consider all
available technology options and their
related learning curves when
conducting future dishwasher standards
analyses for standards rulemakings.
AHAM commented that DOE’s
application of a ‘‘learning or experience
curve’’ to reduce expected extra
manufacturing costs required to meet
proposed standard levels lacks a solid
theoretical foundation for why an
experience or learning curve should
exist, what functional form it should
take and whether it should be a
continuous function. (AHAM, No. 51 at
p. 19) AHAM commented that the
approach, based solely on empirical
relationships, demands clear alignment
with the actual products in question and
the data used to develop the
relationship. AHAM stated that when
the data takes a new shape, DOE must
adjust its equations to reflect that
change as continuing to use old data
and equations simply to create a longer
time series is not acceptable. (Id.)
AHAM commented that DOE’s
justification that continued use of
learning rates is justified by past price
declines is DOE confusing past
correlation with future causation and
the very severe limitations of forward
projection without a sound theoretical
basis for assuming that the correlation
will continue. (Id.) AHAM further stated
that there is no particularly strong
reason to expect that any future trends
will be modeled with a continuous
55 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0053.
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
function of the form DOE is proposing
and that there is an apparent
‘‘flattening’’ of the data in DOE’s
learning curve equation. Additionally,
AHAM stated that all recent data is
above the line drawn by the equation
should give DOE significant pause to
consider whether it is modeling a
relationship that no longer holds, no
matter what the regressions statistics
from past data show. (Id. at pp. 19–20)
AHAM commented that such ‘‘learning’’
should not be projected beyond labor
and materials costs, given it does not
logically apply to overheads, sales,
marketing, general and administrative
costs, or depreciation and financing
costs. (Id. at p. 20)
DOE notes that there is considerable
empirical evidence of consistent price
declines for appliances in the past few
decades. Several studies examined retail
prices of various household appliances,
including dishwashers, during different
periods of time and showed that prices
had been steadily falling while
efficiency had been increasing, for
example Dale, et al. (2009) and Taylor,
et al. (2015). Given the limited data
availability on historical manufacturing
costs broken out by different
components, DOE utilized the PPI
published by the BLS as a proxy for
manufacturing costs to represent the
analyzed product as a whole. While
products may experience varying
degrees of price learning during
different product stages, DOE modeled
the average learning rate based on the
full historical PPI series to capture the
overall price evolution in relation to the
cumulative shipments. When fitting the
historical PPI and cumulative annual
shipments to the experience curve,
which takes the form of a power
function, the resulting R-square value is
91 percent. Despite that the observed
data could deviate above or below the
fitted curve during certain periods, the
high value of R-square indicates a
reasonable fit overall, although DOE
recognizes the difficulty when
projecting regression results out of
sample. In addition, DOE also
conducted sensitivity analyses that are
based on a particular segment of the PPI
data for ‘‘all other miscellaneous
household appliances and primary
products of major household
appliances’’ to investigate the impact of
alternative product price projections
(low price learning and constant price)
in the NIA of this rulemaking. In all
scenarios that DOE considered, the
impact of the price projection on the Net
Present Value estimates is limited to
negative three percent to one percent for
the adopted TSL. Overall, the impact
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
would not affect the policy decision. For
details of the sensitivity results, see
appendix 10C of the direct final rule
TSD. DOE further notes, that AHAM is
a party to the Joint Agreement and is
supportive of the recommended
standard adopted in this direct final
rule.
2. Installation Cost
Installation cost includes labor,
overhead, and any miscellaneous
materials and parts needed to install the
product. Based on inputs provided by
manufacturers, DOE concluded that
installation costs would not be impacted
by increased efficiency levels. DOE
received no stakeholder comments on
this issue.
3. Annual Energy and Water
Consumption
For each sampled household, DOE
determined the energy and water
consumption for dishwashers at
different efficiency levels using the
approach described previously in
section IV.E of this document. Both
energy and water consumption are
considered in the LCC analysis because
the technologies to improve energy
efficiency may also reduce water usage
(as discussed in section IV.C.1.b of this
document).
4. Energy and Water Prices
a. 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 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).56
56 Coughlin, K. and B. Beraki. 2018. Residential
Electricity Prices: A Review of Data Sources and
Estimation Methods. Lawrence Berkeley National
Lab. Berkeley, CA. Report No. LBNL–2001169.
Available at ees.lbl.gov/publications/residentialelectricity-prices-review.
PO 00000
Frm 00031
Fmt 4701
Sfmt 4700
31427
To estimate energy prices in future
years, DOE multiplied the 2020 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 2050.57 To estimate price
trends after 2050, the 2046–2050
average was used for all years.
DOE’s methodology allows electricity
prices to vary by sector, region, and
season. In the analysis, variability in
electricity prices is chosen to be
consistent with the way the consumer
economic and energy use characteristics
are defined in the LCC analysis.
DOE obtained data for calculating
regional prices of natural gas from the
EIA publication, Natural Gas
Navigator.58 This publication presents
monthly volumes of natural gas
deliveries and average prices by State
for residential, commercial, and
industrial customers. DOE used the
complete annual data for 2022 to
calculate an average annual price for
each Census Division. Residential
natural gas prices were adjusted by
applying seasonal marginal price factors
to reflect a change in a consumer’s bill
associated with a change in energy
consumed.
DOE assigned average prices to each
household in the LCC sample based on
its location and its baseline electricity
and gas consumption. For sampled
households who were assigned a
product efficiency greater than or equal
to the considered level for a standard in
the no-new-standards case, DOE
assigned marginal prices to each
household based on its location and the
decremented electricity and gas
consumption. In the LCC sample,
households could be assigned to one of
nine Census Divisions. See chapter 8 of
the direct final rule TSD for details.
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 2050.59 To estimate price
trends after 2050, the 2046–2050
average was used for all years.
b. Water and Wastewater Prices
DOE obtained residential water and
wastewater price data from the Water
57 EIA. Annual Energy Outlook 2023. Available at
www.eia.gov/outlooks/aeo/ (last accessed Oct. 19,
2023).
58 U.S. Department of Energy—Energy
Information Administration. Natural Gas Navigator
2022. Available at www.eia.gov/naturalgas/
data.php.
59 EIA. Annual Energy Outlook 2023. Available at
www.eia.gov/outlooks/aeo/ (last accessed June 20,
2023).
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31428
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
and Wastewater Rate Survey conducted
by Raftelis Financial Consultants and
the American Water Works
Association.60 The survey covers
approximately 445 water utilities and
334 wastewater utilities analyzing each
industry (water and wastewater)
separately. For each water or wastewater
utility, DOE calculated the averageprice-per-unit volume by dividing the
total volumetric cost by the volume
delivered. DOE also calculated the
marginal price by dividing the
incremental cost by the increased
volume charged at each consumption
level.
The samples that DOE obtained of the
water and wastewater utilities is too
small to calculate regional public sector
prices for all U.S. Census Divisions.
Therefore, DOE calculated regional costs
for water and wastewater service at the
Census Region level (Northeast, South,
Midwest, and West) by weighting each
State in a region by its population.
For this direct final rule analysis, DOE
has updated its methodology for
developing water prices for consumers
who rely on a private well-water system,
instead of the public supply system in
consideration of stakeholder comments.
DOE primarily considered well
maintenance costs and pump operating
costs when developing the average
water price. Conversely, DOE only
considered pump operating costs when
developing the marginal price for well
users. As a result, the estimated average
and marginal water prices for well users
are $1.24 and $0.39 per thousand
gallons, respectively. For septic tank
users, DOE considered only the septic
tank maintenance cost when
determining the average price and
excluded the marginal cost component,
as any marginal costs are likely to be
negligible. DOE is unable to develop
Census-region-level well-water and
septic tank prices due to the limitation
of available data; consequently, the
same values were used for each Census
Region.
To determine the current percentage
of the U.S. population served by private
wells and septic tanks, DOE used
historical American Housing Survey
(‘‘AHS’’) data from 1970 to 2021 to
develop a projection for 2027, the
effective year of potential new standards
for dishwashers.61
DOE then conducted random
simulations to determine the percentage
60 Raftelis Financial Consultants, Inc. 2020 RFC/
AWWA Water and Wastewater Rate Survey. 2021.
Charlotte, NC, Kansas City, MO, and Pasadena, CA.
61 The U.S. Census Bureau. The American
Housing Survey. Years 1970–2021. Available at
www.census.gov/programs-surveys/ahs.html (last
accessed June 12, 2023).
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
of households in rural areas served by
private wells and septic tanks. Based on
the estimated percentages, well-water
prices and septic tank prices were
assigned to sampled households
accordingly. Furthermore, DOE
estimated the septic tank user
population and assigned corresponding
septic tank prices to households relying
on public water systems.
To estimate the future trend for public
water and wastewater prices, DOE used
data on the historic trend in the national
water price index (U.S. city average)
from 1988 through 2022 provided by the
Labor Department’s BLS.62 DOE
extrapolated the future trends based on
the linear growth from 1988 to 2022.
DOE used the extrapolated trend to
forecast prices through 2050. To
estimate the price trend after 2050, DOE
used a constant value derived from the
average values from 2046 through 2050.
To estimate the future trend for the
average well-water and septic tank
prices, DOE used data on the historic
trend in the overall national consumer
price index from 1988 through 2022
provided by the Labor Department’s
BLS.63 DOE extrapolated the future
trends based on the linear growth from
1988 to 2022. DOE used the
extrapolated trend to forecast prices
through 2050. To estimate the price
trend after 2050, DOE used a constant
value derived from the average values
from 2046 through 2050. In addition, to
estimate the future trend for the
marginal well-water price, the
electricity trend was used, as described
previously in section IV.F.4.a of this
document.
In response to the May 2023 NOPR,
AHAM commented that it previously
suggested DOE should consider the
actual water costs for households on
well systems. (AHAM, No. 51 at p. 12)
AHAM commented that DOE’s May
2023 NOPR approach to septic system
costs is incorrect and stated that DOE
should acknowledge that there are no
incremental costs for consumers using
septic systems and treat these both well
water users and septic tank users as a
separate subgroup instead of averaging
them into composite water and sewer
costs. (AHAM, No. 51 at pp. 12–14)
As described in section IV.I.3 of this
document, for this direct final rule, DOE
62 U.S. Department of Labor-Bureau of Labor
Statistics, Consumer Price Indexes, Item: Water and
sewerage maintenance, Series Id:
CUSR0000SEHG01, U.S. city average, 2022.
Washington, DC. Available at www.bls.gov/cpi/
home.htm#data.
63 U.S. Department of Labor-Bureau of Labor
Statistics, Consumer Price Indexes, All Items, Series
Id: CUUR0000SA0, U.S. city average, 2022.
Washington, DC. Available at www.bls.gov/cpi/
home.htm#data.
PO 00000
Frm 00032
Fmt 4701
Sfmt 4700
updated its method for estimating wellwater and septic costs. The updated
average well-water and septic tank
prices are 17.1 percent of the combined
cost of public water and sewer costs. In
addition, DOE assigned either septic
tank or public sewer prices to wellwater households based on the
probability distributions obtained from
the AHS 2021 data.
AHAM commented that the economic
value of water is undefined and an
inappropriate measure in the life cycle
cost analysis. AHAM stated that if DOE
is relying, even implicitly, on the
AWWA/RFC study for its definition of
economic value, as matter of
administrative law, it must make the
underlying reference available for
public comment before it can use it as
a source. According to AHAM, private
well users pay the actual marginal cost
of water, primarily the electricity for
pumping, not an ‘‘economic value.’’
While there are embedded costs for
drilling a well, these costs are sunk and
the marginal cost is only the electricity.
(AHAM, No. 51, at p. 13) AHAM
suggested that if DOE insists on the
‘‘economic value,’’ DOE should define
it, demonstrate how well-water use
reduces water availability, and quantify
the actual ‘‘economic value’’ of lost well
water. (Id.) AHAM further stated that
even if there is an ‘‘economic value’’ of
well water, it should be considered in
the NIA, not the LCC. (Id. at 16.)
DOE concurs that ‘‘economic value of
water’’ is not the actual price that well
users would pay. Hence, for this direct
final rule, DOE has adjusted its
methodology regarding water price for
well users and septic tank price. To
derive well-water price, DOE conducted
a literature review and took into
consideration the inputs provided by
AHAM. As a result, DOE estimated the
average water price for well users to be
$1.24 per thousand gallons, with a
marginal price of $0.39 per thousand
gallons representing the electricity cost
for pumping. Regarding septic tank
price, DOE estimated the average cost to
be $1.30 per thousand gallons and
excluded the marginal cost component,
as it may be negligible or close to $0 per
thousand gallons. For references and
details of the well-water and septic tank
prices, see chapter 8 of the direct final
rule TSD. In addition, in the LCC, DOE
has explicitly assigned water and
wastewater sources, along with
corresponding specific prices, to RECS
households randomly using different
probability distributions for urban and
rural households by Census Region
based on AHS 2021 data. Similarly, both
the public and private water and
wastewater costs were accounted for in
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
the NIA. The term ‘‘economic value’’ of
water refers to the National
Groundwater Association’s use of the
term.64 The AWWA/Raftelis data used
to develop the public water and
wastewater costs are available from an
online subscription.65
AWE commented that DOE should
extrapolate from the annualized rate
increases for 1998 to 2020 from the
AWWA/Raftelis Water and Wastewater
Rate Survey. (AWE, No. 44 at p. 1) AWE
stated that instead of using AWWA/
Raftelis for historic and current pricing
and a CPI-based approach for future
price trends, AWE supports the use of
data from the AWWA/Raftelis Survey as
the basis for DOE’s calculation for both
the historic and current water and
wastewater prices and for price trends.
(Id. at p. 2) AWE commented that it is
confident that the price trend data in the
AWWA/Raftelis Survey are more
accurate and representative because it is
based on a review of the actual rates
from a large sample set of utilities from
nearly all U.S. states on a biennial basis
and that it is better to use rate data when
performing calculations based on
specific volumes of water saved rather
than data on average customer bills,
which is what the water and sewerage
maintenance item from CPI is based on.
(Id.)
AWWA/Raftelis conducts water and
wastewater rates survey, which used to
be every two years and now every six
months, for U.S. water and wastewater
utilities. For each of the AWWA/Raftelis
surveys, utilities in the sample respond
voluntarily to the survey questions, with
a limited number of overlapping
utilities in each survey year. For this
reason, it is possible that the annual
change in rates may be affected by
which utilities respond to the survey,
which is also known as sample bias. In
addition, the rate data are reported in
usage tiers set by each utility and not on
actual household water consumption.
The BLS Water and Sewer CPI sample
represents 600 to 700 quotes for water
or sewer service, and the sample is
consistent for four years, which reduces
the possible year over year bias as
compared to AWWA/Raftelis.
Additionally, the Water and Sewer CPI
was estimated based on consumer water
bills that reflect household water
64 Groundwater Use in the United States of
America. National Ground Water Association,
www.ngwa.org/docs/default-source/defaultdocument-library/groundwater/usa-groundwateruse-fact-sheet.pdf?sfvrsn=5c7a0db8_4.
65 The American Water Works Association &
Raftelis Financial Consultants, Inc., 2022 RFC/
AWWA Water and Wastewater Rate Survey. 2023.
Charlotte, NC. The latest report is available at
https://engage.awwa.org/PersonifyEbusiness/
Bookstore/Product-Details/productId/194150460.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
consumption. Therefore, DOE concludes
that the BLS’ CPI water and sewer data
better reflect the nationally
representative price trends than the
AWWA/Raftelis data. DOE therefore
used the CPI for water and sewer for its
public utilities’ water and wastewater
price trend forecast for this final rule.
DOE used a similar methodology to
develop future water and wastewater
prices in its clothes washer standard
rulemaking as it used in the March 2024
final rule analysis. DOE used a constant
value derived from the average values
from 2046 through 2050 to estimate the
price trend after 2050, whereas in the
May 2023 NOPR, published May 19,
2023 (88 FR 32514), DOE used the 2050
value for the price trend after 2050.66
AHAM stated DOE should recognize
that not all households directly pay for
water and sewer. (AHAM, No. 51 at p.
16) As such, AHAM asserted that DOE
is overestimating the actual annual
operating cost savings that these
consumers would receive from reduced
water use in dishwashers. (Id.) AHAM
commented that in many circumstances
the costs for water and sewer are either
borne by landlords or are combined into
generalized common charges. (Id.)
AHAM identified two subgroups of
consumers who might not see monetary
savings from a reduction in water use as
a result of an amended standard: (1)
condominium owners in multi-family
buildings where water and sewer costs
are included in common charges and (2)
low-income renters in multi-family
housing where water is not sub-metered
and/or costs are covered by landlords.
(AHAM, No. 51 at p. 16) As it applies
to multi-family housing, AHAM stated
that installing sub-metering equipment
may cost thousands of dollars per unit
including plumbing charges and many
landlords do not find it attractive or
practical to sub-meter. (Id.)
Additionally, for condominium
properties, the owner owns the
dishwasher, leading to a reverse splitincentive such that the household will
not see the benefit directly and will
have a negative LCC savings. Further,
raising the price of a dishwasher will
also encourage the household to
continue repairing the dishwasher
rather than purchasing a more
expensive new one, reducing or
eliminating the project national savings.
As such, AHAM recommend that DOE
recognize this sub-group and address
the relevant financial situation. (Id. at
pp. 16–17)
66 Additional details regarding the dishwasher
analysis are provided in the May 2023 NOPR TSD,
available at www.regulations.gov/document/EERE2019-BT-STD-0039-0032.
PO 00000
Frm 00033
Fmt 4701
Sfmt 4700
31429
DOE notes that while RECS does
identify multi-family housing, it does
not provide information on whether a
household’s water bill is included in the
rent, included in the common charges,
or paid directly to the utility. For the
first group of multi-family unit owners
(such as apartments, condominiums,
and co-ops) identified in RECS and
reporting that energy bills are not paid
directly to the utilities, DOE posits that
those households also do not directly
pay their water bills, considering that
some multi-family units may have a
shared water meters, which is more
common than shared electricity or gas
meters. It is, therefore, likely that
households that do not directly pay
their energy bills to the utilities, also do
not directly pay for their water bill. This
group represents less than 1.2 percent of
the national sample, indicating a
relatively small group. For the second
group of low-income renters in multifamily buildings, DOE adopted a
conservative approach assuming that
those households that reported as not
paying their energy bill would also not
pay their water bill and, therefore, do
not accrue any operating cost savings
from the considered standards. This
issue is accounted for in the low-income
subgroup analysis. Based on DOE’s
assessment, the low-income subgroup
has comparable LCC savings and
fraction of consumers experiencing a net
cost as the national sample. See section
IV.I.1 and section V.B.1.b of this
document for the detailed methodology
and the results of the low-income
subgroup analysis.
With regards to the split-incentive
issue, the existence of a split incentive
across a substantial number of U.S.
households, in which a tenant pays for
the cost of electricity while the landlord
furnishes appliances, has been
identified through a number of studies
of residential appliance use broadly,
and for dishwashers in low-income
settings in specific. Building from early
work including Jaffe and Stavins
(1994),67 Murtishaw and Sathaye
(2006) 68 discussed the presence of
landlord–tenant split-incentives (i.e.,
the ‘‘principal-agent problem’’) in the
context of refrigeration, water heating,
space heating, and lighting in rental
housing. While the study did not solely
focus on the low-income household,
67 A.B. Jaffe and R.N. Stavins (1994) The energyefficiency gap What does it mean? Energy Policy,
22 (10) 804–810, Available at doi.org/10.1016/03014215(94)90138-4.
68 Murtishaw, S., & Sathaye, J. (2006). Quantifying
the Effect of the Principal-Agent Problem on US
Residential Energy Use. Lawrence Berkeley
National Laboratory. Available at escholarship.org/
uc/item/6f14t11t.
E:\FR\FM\24APR3.SGM
24APR3
31430
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
they estimated that 35 percent of total
residential site energy use is subject to
split-incentives based on these four
products alone. In the specific context
of dishwashers, based on RECS 2020, 88
percent of low-income individuals who
rented their homes and owned a
dishwasher were found to pay the
electricity bill resulting from their
energy use, such that they were likely
subject to a scenario in which their
landlord purchased the appliance, but
they paid the operating costs. Spurlock
and Fujita (2022),69 Houde and
Spurlock (2016),70 and citations therein
(e.g., Davis 2012) 71 also further
elaborated on split-incentives in rental
housing and their association with
generally lower efficiency among the
appliances used by renters. As a result,
DOE’s analysis concludes that there is a
substantial fraction of split-incentive
issue among low-income households.
Therefore, DOE divide the low-income
subgroup into renters and non-renters
categories, for which different
assumptions were applied. For lowincome households who are homeowners and do pay for the product and
energy costs, DOE considers that those
households will experience an impact
from any proposed standard and DOE
then uses the same methodology
applied to the national LCC analysis.
For low-income households who are
renters and do not pay for energy bills,
DOE considers the amended standards
will have no impact on those
households. In the split-incentive case
in which the low-income households
who are renters and pay for energy bills,
the landlord would bear the cost of the
appliance, and the household would
pay the operating costs and therefore
accrue the operating cost savings from
the considered standards. Although
paid by different individuals, the
difference between the incremental
equipment cost and the life cycle
operating cost savings would still be
characterized as the LCC savings
associated with the dishwasher in
question in the national LCC analysis.
Therefore, the split-incentives cases
would not affect the methodology of the
69 C.A. Spurlock and K.S. Fujita (2022) Equity
implications of market structure and appliance
energy efficiency regulation, Energy Policy, 165
(112943), Available at doi.org/10.1016/
j.enpol.2022.112943.
70 S. Houde, C.A. Spurlock (2016) Minimum
Energy Efficiency Standards for Appliances: Old
and New Economic Rationales. Economics of
Energy & Environmental Policy, 5(2), 65–84.
Available at www.jstor.org/stable/26189506.
71 L.W. Davis (2012) Evaluating the slow adoption
of energy efficient investments: are renters less
likely to have energy efficient appliances? The
Design and Implementation of US Climate Policy,
University of Chicago Press (2012), pp. 301–316.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
national LCC savings estimates. More
details can be found in section IV.I.1 of
this document as well as in chapter 11
of the direct final rule TSD.
As in the case when some consumers
may delay or forgo their purchase due
to the increased first cost caused by the
standards, DOE assumed that those
consumers would hand wash their
dishes and accounted for the possible
increase in energy and water use as an
additional cost to the standards case in
the National Impact Analysis. DOE
considered this as a conservative
approach since there are alternatives to
handwashing dishes such as extended
repair, or purchasing a second-hand
unit.
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 entail no, or only minor,
changes in repair and maintenance costs
compared to baseline efficiency
products. However, products having
significantly higher efficiencies
compared to baseline products are more
likely to incur higher repair and
maintenance costs, because their
increased complexity and higher part
count typically increases the cumulative
probability of failure.
In this direct final rule analysis, DOE
derived repair costs for dishwashers for
each efficiency level based on
manufacturers’ inputs on the repair
frequency and costs. DOE did not
include routine maintenance costs as no
evidence or data shows that the routine
maintenance costs or frequency would
vary with increased efficiency. See
chapter 8 of the direct final rule TSD for
further details.
6. Product Lifetime
For dishwashers, DOE developed a
distribution of lifetimes from which
specific values are assigned to the
appliances in the samples. DOE
conducted an analysis of actual lifetime
in the field using a combination of
historical shipments data, the stock of
the considered appliances in the
American Housing Survey, and
responses in RECS on the age of the
appliances in the homes. The data
allowed DOE to estimate a survival
function, which provides an average
appliance lifetime. This analysis yielded
a lifetime probability distribution with
an average lifetime for dishwashers of
approximately 15.2 years. DOE has
found no evidence or information
PO 00000
Frm 00034
Fmt 4701
Sfmt 4700
related to variation in dishwasher
lifetime by product class or efficiency
level. See chapter 8 of the direct final
rule TSD for further details.
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 dishwashers 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.72 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, the application of
a marginal interest rate associated with
an initial source of funds is inaccurate.
Regardless of the method of purchase,
consumers are expected to continue to
rebalance their debt and asset holdings
over the LCC analysis period, based on
the restrictions consumers face in their
debt payment requirements and the
relative size of the interest rates
available on debts and assets. DOE
estimates the aggregate impact of this
rebalancing using the historical
distribution of debts and assets.
To establish residential discount rates
for the LCC analysis, DOE identified all
relevant household debt or asset classes
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 73 (‘‘SCF’’) starting in 1995 and
ending in 2019 and multiple sources for
asset interest rates from 1993–2022.
Using the SCF and other sources, DOE
72 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; 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.
73 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 Oct. 19, 2023).
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
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 4.2 percent.
See chapter 8 of the direct final rule
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).
To estimate the energy efficiency
distribution of dishwashers for 2027,
DOE used data from the engineering
analysis, the manufacturer interviews,
and DOE’s Compliance Certification
Database. DOE assumed no annual
efficiency improvement for the no-newstandards case based on the current
market evaluation and the observation
that there was no shift in efficiency
distributions compared to those used in
the December 2016 Final Determination.
31431
DOE received no comments from
stakeholders related to this assumption.
The estimated market shares for the nonew-standards case for dishwashers are
shown in Table IV.13. See chapter 8 of
the direct final rule TSD for further
information on the derivation of the
efficiency distributions.
In response to the May 2023 NOPR,
Appliance Standards Awareness Project
et al.74 (‘‘ASAP et al.’’) commented 75
that DOE’s assignment of efficiency
levels in the no-new-standards case
reasonably reflects actual consumer
behavior. (ASAP et al., No. 46 at p. 3)
For the final rule, DOE maintained the
approach used in the May 2023 NOPR
to derive efficiency distributions in the
no-new-standards case.
Table IV.13 No-New-Standards Case Efficiency Distribution for Dishwashers in
2027
.
khammond on DSKJM1Z7X2PROD with RULES3
Baseline
263
1
232
2
223
3
206
4
193
* Based on appendix C2
5.0
3.5
3.3
3.2
2.4
Product Class 2 Compact-Size
Dishwashers:
Annual
Water Use
Market
Energy Use
Share(%)
(gal/cycle)
kWh/ ear
7
84
6
3
0
.
191
174
124
3.5
3.1
1.6
2
84
14
The LCC Monte Carlo simulations
draw from the efficiency distributions
and randomly assign an efficiency level
to the dishwasher purchased by each
sample household in the no-newstandards case. The resulting percentage
shares within the sample match the
market shares in the efficiency
distributions.
In response to the May 2023 NOPR,
ASAP et al. stated that they agree with
DOE’s determination that assigning
dishwasher efficiencies for the LCC
analysis, which is in part random, is
more representative of actual consumer
behavior than assigning efficiencies
based solely on cost-effectiveness.
(ASAP et al., No. 46 at p. 3)
ASAP et al. commented that
consumer purchasing decisions for an
infrequent purchase such as a
dishwasher can be based on a variety of
complex issues such as the timing of the
purchase, competing demands for
funds, and the information available to
the consumer. (ASAP et al., No. 46 at p.
3)
ASAP et al. additionally noted the
split-incentive or principal-agent
problem in which there are misaligned
incentives in rental properties because
the landlord purchases and installs the
dishwasher while the renter is
responsible for paying the utility bill.
(Id.)
While DOE acknowledges that
economic factors play a role when
consumers decide on what type of
dishwasher to install, assignment of
dishwasher efficiency for a given
installation, based solely on economic
measures such as life-cycle cost or
simple payback period, most likely
would not accurately reflect actual realworld installations. There are a number
of market failures discussed in the
economics literature that illustrate how
purchasing decisions with respect to
energy efficiency are unlikely to be
perfectly correlated with energy use, as
described below. DOE finds that the
method of assignment, which is in part
random, simulates behavior in the
dishwasher market, where market
failures result in purchasing decisions
not being perfectly aligned with
economic interests. DOE further
emphasizes that its approach does not
assume that all purchasers of
dishwasher products make
economically irrational decisions (i.e.,
the lack of a correlation is not the same
as a negative correlation). By using this
approach, DOE acknowledges the
uncertainty inherent in the data and
does not assume certain market
conditions that are unsupported given
the available evidence.
The following discussion provides
more detail about the various market
failures that affect dishwasher
purchases. First, consumers are
motivated by more than simple financial
trade-offs. There are consumers who are
willing to pay a premium for more
74 The ASAP et al. includes Appliance Standards
Awareness Project, American Council for an
Energy-Efficient Economy, Consumer Federation of
America, Elevate, National Consumer Law Center,
Natural Resources Defense Council, and Southwest
Energy Efficiency Project.
75 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0046.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00035
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.020</GPH>
TSL
Product Class 1 Standard-Size
Dishwashers:
Annual
Water Use
Market
Energy Use
(gal/cycle) Share(%)
kWh/ ear
31432
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
energy-efficient products because they
are environmentally conscious.76 There
are also several behavioral factors that
can influence the purchasing decisions
of complicated multi-attribute products,
such as dishwashers. For example,
consumers (or decision makers in an
organization) are highly influenced by
choice architecture, defined as the
framing of the decision, the surrounding
circumstances of the purchase, the
alternatives available, and how they are
presented for any given choice
scenario.77 The same consumer or
decision maker may make different
choices depending on the characteristics
of the decision context (e.g., the timing
of the purchase, competing demands for
funds), which have nothing to do with
the characteristics of the alternatives
themselves or their prices. Consumers
or decision makers also face a variety of
other behavioral phenomena including
loss aversion, sensitivity to information
salience, and other forms of bounded
rationality.78 Thaler, who won the
Nobel Prize in Economics in 2017 for
his contributions to behavioral
economics, and Sunstein point out that
these behavioral factors are strongest
when the decisions are complex and
infrequent, when feedback on the
decision is muted and slow, and when
there is a high degree of information
asymmetry.79 These characteristics
describe almost all purchasing
situations of appliances and equipment,
including dishwashers. The installation
of a new or replacement dishwashers is
done very infrequently, as evidenced by
the mean lifetime of 15.2 years. Further,
if the purchaser of the dishwasher is not
the entity paying the energy costs (e.g.,
a building owner and tenant), there may
be little to no feedback on the purchase.
Additionally, there are systematic
market failures that are likely to
contribute further complexity to how
products are chosen by consumers, as
76 Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T.,
& Russell, C.S. (2011): ‘‘Factors influencing
willingness-to pay for the ENERGY STAR® label,’’
Energy Policy, 39 (3), 1450–1458 (Available at:
www.sciencedirect.com/science/article/abs/pii/
S0301421510009171) (Last accessed August 1,
2023).
77 Thaler, R.H., Sunstein, C.R., and Balz, J.P.
(2014). ‘‘Choice Architecture’’ in The Behavioral
Foundations of Public Policy, Eldar Shafir (ed).
78 Thaler, R.H., and Bernartzi, S. (2004). ‘‘Save
More Tomorrow: Using Behavioral Economics in
Increase Employee Savings,’’ Journal of Political
Economy 112(1), S164–S187. See also Klemick, H.,
et al. (2015) ‘‘Heavy-Duty Trucking and the Energy
Efficiency Paradox: Evidence from Focus Groups
and Interviews,’’ Transportation Research Part A:
Policy & Practice, 77, 154–166 (providing evidence
that loss aversion and other market failures can
affect otherwise profit-maximizing firms).
79 Thaler, R.H., and Sunstein, C.R. (2008). Nudge:
Improving Decisions on Health, Wealth, and
Happiness. New Haven, CT: Yale University Press.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
explained in the following paragraphs.
The first of these market failures—the
split-incentive or principal-agent
problem—is likely to significantly affect
dishwashers. The principal-agent
problem is a market failure that results
when the consumer that purchases the
equipment does not internalize all of the
costs associated with operating the
equipment. Instead, the user of the
product, who has no control over the
purchase decision, pays the operating
costs. There is a high likelihood of splitincentive problems in the case of rental
properties where the landlord makes the
choice of what dishwasher to install,
whereas the renter is responsible for
paying energy bills.
In addition to the split-incentive
problem, there are other market failures
that are likely to affect the choice of
dishwasher efficiency made by
consumers. For example, unplanned
replacements due to unexpected failure
of equipment such as dishwashers are
strongly biased toward like-for-like
replacement (i.e., replacing the nonfunctioning equipment with a similar or
identical product). Time is a
constraining factor during unplanned
replacements, and consumers may not
consider the full range of available
options on the market, despite their
availability. The consideration of
alternative product options is far more
likely for planned replacements and
installations in new construction.
Additionally, Davis and Metcalf 80
conducted an experiment demonstrating
that, even when consumers are
presented with energy consumption
information, the nature of the
information available to consumers (e.g.,
from EnergyGuide labels) results in an
inefficient allocation of energy
efficiency across households with
different usage levels. Their findings
indicate that households are likely to
make decisions regarding the efficiency
of the air conditioning equipment of
their homes that do not result in the
highest net present value for their
specific usage pattern (i.e., their
decision is based on imperfect
information and, therefore, is not
necessarily optimal). Also, most
consumers did not properly understand
the labels (specifically whether energy
consumption and cost estimates were
national averages or specific to their
80 Davis, L.W., and G.E. Metcalf (2016): ‘‘Does
better information lead to better choices? Evidence
from energy-efficiency labels,’’ Journal of the
Association of Environmental and Resource
Economists, 3(3), 589–625 (Available at:
www.journals.uchicago.edu/doi/full/10.1086/
686252) (Last accessed August 1, 2023).
PO 00000
Frm 00036
Fmt 4701
Sfmt 4700
State). As such, consumers did not make
the most informed decisions.
In part because of the way
information is presented, and in part
because of the way consumers process
information, there is also a market
failure consisting of a systematic bias in
the perception of equipment energy
usage, which can affect consumer
choices. Attari et al.81 show that
consumers tend to underestimate the
energy use of large energy-intensive
appliances (such as air conditioners,
dishwashers, and clothes dryers), but
overestimate the energy use of small
appliances (such as light bulbs).
Therefore, it is possible that consumers
systematically underestimate the energy
use associated with dishwashers,
resulting in less cost-effective
purchases.
These market failures affect a sizeable
share of the consumer population. A
study by Houde 82 indicates that there is
a significant subset of consumers that
appear to purchase appliances without
taking into account their energy
efficiency and operating costs at all.
The existence of market failures in the
residential sector is well supported by
the economics literature and by a
number of case studies. If DOE
developed an efficiency distribution
that assigned dishwasher efficiency in
the no-new-standards case solely
according to energy and water use or
economic considerations, such as lifecycle cost or payback period, the
resulting distribution of efficiencies
within the consumer sample would not
reflect any of the market failures or
behavioral factors above. Thus, DOE
concludes such a distribution would not
be representative of the dishwasher
market. Further, even if a specific
household is not subject to the market
failures above, the purchasing decision
of dishwasher efficiency can be highly
complex and influenced by a number of
factors (e.g., aesthetics, brand, lifestyle,
etc.) not captured by the building
characteristics available in the RECS
sample. These factors can lead to
households or building owners choosing
a dishwasher efficiency that deviates
from the efficiency predicted using only
energy use or economic considerations
81 Attari, S.Z., M.L. DeKay, C.I. Davidson, and W.
Bruine de Bruin (2010): ‘‘Public perceptions of
energy consumption and savings.’’ Proceedings of
the National Academy of Sciences 107(37), 16054–
16059 (Available at: www.pnas.org/content/107/37/
16054) (Last accessed August 1, 2023).
82 Houde, S. (2018): ‘‘How Consumers Respond to
Environmental Certification and the Value of
Energy Information,’’ The RAND Journal of
Economics, 49 (2), 453–477 (Available at:
onlinelibrary.wiley.com/doi/full/10.1111/1756–
2171.12231) (Last accessed August 1, 2023).
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
such as life-cycle cost or payback
period.
There is a complex set of behavioral
factors, with sometimes opposing
effects, affecting the dishwasher market.
It is impractical to model every
consumer decision incorporating all of
these effects at this extreme level of
granularity given the limited available
data. Given these myriad factors, DOE
suspects the resulting distribution of
such a model, if it were possible, would
be very scattered with high variability.
It is for this reason DOE utilizes a
random distribution (after accounting
for efficiency market share constraints)
to approximate these effects. The
methodology is not an assertion of
economic irrationality, but instead, it is
a methodological approximation of
complex consumer behavior. The
analysis is neither biased toward high or
low energy savings. The methodology
does not preferentially assign lowerefficiency dishwashers to households in
the no-new-standards case where
savings from the rule would be greatest,
nor does it preferentially assign lowerefficiency dishwashers to households in
the no-new-standards case where
savings from the rule would be smallest.
Some consumers were assigned the
dishwashers that they would have
chosen if they had engaged in perfect
economic considerations when
purchasing the products. Others were
assigned less-efficient dishwashers even
where a more-efficient product would
eventually result in life-cycle savings,
simulating scenarios where, for
example, various market failures
prevent consumers from realizing those
savings. Still others were assigned
dishwashers that were more efficient
than one would expect simply from lifecycle costs analysis, reflecting, say,
‘‘green’’ behavior, whereby consumers
ascribe independent value to
minimizing harm to the environment.
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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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 and water
savings by calculating the energy and
water savings in accordance with the
applicable DOE test procedure, and
multiplying those savings by the average
energy and water 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 and water use, NPV, and
future manufacturer cash flows.83 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.
Total shipments for dishwashers are
developed by considering the demand
from replacements for units in stock that
fail and the demand from first-time
owners (‘‘FTOs’’), which are the
households without existing
dishwashers. DOE calculated shipments
due to replacements using the
retirement function developed for the
LCC analysis and historical data from
AHAM. DOE estimated the ratio of
households that would become FTOs
each year based on the historical
housing stock data, the estimated
shipments of replacement units and the
estimated shipment to FTOs. DOE
calculated shipments of FTOs by
multiplying the forecasted housing
stock by the annualized ratio of existing
households without a dishwasher that
83 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 00037
Fmt 4701
Sfmt 4700
31433
would purchase this product over the
period 2027–2056, based on the housing
stocks from AEO2023. See chapter 9 of
the direct final rule TSD for details.
H. National Impact Analysis
The NIA assesses the national energy
savings (‘‘NES’’), national water savings
(NWS), and the NPV from a national
perspective of total consumer costs and
savings that would be expected to result
from new or amended standards at
specific efficiency levels.84
(‘‘Consumer’’ in this context refers to
consumers of the product being
regulated.) DOE calculates the NES,
NWS, and NPV for the potential
standard levels considered based on
projections of annual product
shipments, along with the annual
energy and water consumption and total
installed cost data from the energy and
water use and LCC analyses. For the
present analysis, DOE projected the
energy and water savings, operating cost
savings, product costs, and NPV of
consumer benefits over the lifetime of
dishwashers sold from 2027 through
2056.
DOE evaluates the impacts of new or
amended standards by comparing a case
without such standards with standardscase projections. The no-new-standards
case characterizes energy and water 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
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 and water 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.14 summarizes the inputs
and methods DOE used for the NIA
analysis for the final rule. Discussion of
these inputs and methods follows the
84 The NIA accounts for impacts in the United
States and U.S. territories.
E:\FR\FM\24APR3.SGM
24APR3
31434
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
table. See chapter 10 of the direct final
rule TSD for further details.
BILLING CODE 6450–01–P
Table IV.14 Summary of Inputs and Methods for the National Impact Analysis
Efficiency Trends
Annual Energy and Water
Consumption per Unit
Total Installed Cost per Unit
Annual Energy and Water
Cost per Unit
Repair and Maintenance Cost
per Unit
Varies with efficiency level and product class.
Energy and Water Price
Trends
AEO2023 projections (to 2050) and extrapolation thereafter.
Historical Water CPI extrapolated projection to 2050 and constant
value thereafter.
Energy Site-to-Primary and
FFC Conversion
Discount Rate
Present Year
BILLING CODE 6450–01–C
khammond on DSKJM1Z7X2PROD with RULES3
1. Product Efficiency Trends
A key component of the NIA is the
trend in efficiency projected for the nonew-standards case and each of the
standards cases. Section IV.F.8 of this
document describes how DOE
developed an 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. DOE
assumed that the shipment-weighted
efficiency would not increase annually
for the dishwasher product classes.
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 (2027). 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. More details can be
found in chapter 10 of the direct final
rule TSD.
VerDate Sep<11>2014
Method
Annual shipments from shipments model.
2027
No-new-standards case: fixed efficiency distribution with no annual
improvements.
Standards cases: "Roll up" equipment to meet potential efficiency
level.
Annual weighted-average values are a function of energy and water 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; and as a function of the annual
water consumption per unit and water prices.
17:42 Apr 23, 2024
Jkt 262001
A time-series conversion factor based on AEO2023.
3 and 7 percent.
2024
2. National Energy and Water Savings
The national energy and water savings
analysis involves a comparison of
national energy consumption of the
considered products between each
potential standards case (‘‘TSL’’) and
the case with no new or amended
energy conservation standards. DOE
calculated the national energy and water
consumption by multiplying the
number of units (stock) of each product
(by vintage or age) by the unit energy
and water consumption (also by
vintage). DOE calculated annual NES
and NWS based on the difference in
national energy and water 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
AEO2023. Cumulative energy and water
savings are the sum of the NES and
NWS 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
PO 00000
Frm 00038
Fmt 4701
Sfmt 4700
increase in utilization of the product
due to the increase in efficiency.
As discussed in section V.B.4 of this
document, DOE has concluded that the
standards adopted in this direct final
rule will not lessen the utility or
performance of the dishwashers under
consideration in this rulemaking.
Specifically, the amended standards
adopted in this direct final rule require
the use of the test procedure at
appendix C2, which includes a
minimum cleaning performance
threshold to determine if a dishwasher
‘‘completely washes a normally soiled
load of dishes,’’ so as to better represent
consumer use of the product.
Dishwashers that comply with the
amended standards will provide
consumer-acceptable level of cleaning
performance and the rated energy and
water consumption will be
representative of consumer-acceptable
cleaning performance. In the NES and
NWS analysis, therefore, DOE assumed
that the adopted standards would not
result in a direct rebound effect
purportedly arising from consumers
resorting to handwashing, increased
pre-rinsing, or other consumer
behaviors that increase the energy and
water consumption of dishwashing as a
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.021</GPH>
Inputs
Shipments
Compliance Date of Standard
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
result of reduced dishwasher cleaning
performance. Use of the new test
appendix C2 test procedure may instead
improve dishwasher cleaning
performance because dishwashers will
meet a minimum cleaning performance
index, thereby reducing consumer
handwashing, pre-rinsing, and other
less efficient behaviors. DOE has
nevertheless taken a conservative
approach and assumed no reduction in
handwashing or other inefficient
behavior (e.g., running a ‘‘heavy’’ cycle)
as a result of this rulemaking.
However, in the NES and NWS
analysis, DOE did account for the
possible increase in energy and water
use from handwashing dishes for
households that would not purchase a
new dishwasher purportedly due to the
higher purchase costs under the
amended standards. DOE adopted a
conservative approach to these
situations when households opt not to
purchase a new dishwasher since there
are alternatives to handwashing dishes:
some households may keep their
dishwasher longer than they might
otherwise (i.e., extending the lifetime by
repairing their unit); may use disposable
plates and utensils; or may purchase a
second-hand unit. Furthermore, for
those households that still would forgo
a new dishwasher, DOE did not account
for the additional time or value of time
required for handwashing.
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 85 that EIA uses to prepare its
Annual Energy Outlook. The FFC factors
incorporate losses in production and
delivery in the case of natural gas
85 For more information on NEMS, refer to The
National Energy Modeling System: An Overview
2009, DOE/EIA–0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm
(last accessed Oct. 19, 2023).
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
(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 direct final rule TSD.
For this direct final rule, DOE
considered comments it had received in
response to the May 2023 NOPR
regarding national energy and water
savings, including potential rebound
effects.
The CA IOUs stated DOE is
underestimating the water and energy
savings from dishwasher use compared
to hand washing, noting DOE estimates
that hand washing consumes 140
percent more energy and 200 percent
more water than a dishwasher, based on
two European studies from 2005–2006
and an article from the U.S. Geological
Survey. The CA IOUs reviewed these
data sources and identified limitations
in their applicability or determined they
were outdated in their estimates of
energy and water used for handwashing
dishes because the studies suggest
cultural differences may dictate
handwashing practices and the
international studies may not accurately
represent practices of American
consumers. Additionally, the CA IOUs
noted that the USGS article does not cite
specific references and that the
underlying data that the USGS uses
significantly overestimates the
dishwashers’ water consumption. (CA
IOUs, No. 50 at pp. 2–3) The CA IOUs
recommend incorporating a more
extensive data set with more countries
to mitigate bias when applying
international studies and that DOE
should reduce a dishwasher’s low-end
water consumption to align with current
regulations and market information. (Id.
at pp. 3–4)
Regarding hand washing water
consumption, DOE used the weighted
average dishwasher water consumption
in the no-new-standards case and
assumed that hand washing would
consume 200 percent of the water used
in machine washing for the same load
based on literature review data. A 2005
study conducted at Bonn University in
Germany found that, on average, hand
washing used 67 percent more energy
and more than 450 percent more water
than machine washing.86 A United
Kingdom (UK) study in 2006 quantified
the energy and water consumption of
86 Stamminger, R., R. Badura, G. Broil, S. Dorr,
and A. Elschenbroich. A European Comparison of
Cleaning Dishes by Hand. 2003. Proceedings of
EEDAL conference. University of Bonn: Germany.
(Last accessed February, 8, 2024.) https://silo.tips/
download/a-european-comparison-of-cleaningdishes-by-hand.
PO 00000
Frm 00039
Fmt 4701
Sfmt 4700
31435
washing by hand as a function of place
settings.87 The study demonstrated that,
on average, washing eight place settings
by hand used approximately 210
percent more energy and 250 percent
more water than washing by machine.
The U.S. Geological Service (USGS)
provided estimates for water
consumption from dishwashers as
compared to water consumption from
doing dishes by hand.88 The USGS
reported that dishwashers typically use
between 6 and 16 gallons per cycle, and
that dishwashing by hand uses between
9 and 27 gallons per cycle. Using these
sources, DOE estimated that hand
washing consumed 200 percent of the
water used in machine washing.
Excluding minimum or maximum
values, as the CA IOUs suggest, would
result in a less accurate representation
of the actual water consumption
patterns exhibited by dishwashers as
well as by households’ hand washing.
Further, DOE notes that the majority of
studies cited by the CA IOUs occur in
laboratory settings or span brief time
periods (from a couple of hours to two
weeks), so may not be representative of
typical householder behaviors.
Additionally, the sole field-metered
study (Richter, 2011) found that relative
to machine washing, handwashing used
200 percent more water,89 which is
consistent with the current DOE
estimates for energy and water use with
hand washing.
AHAM and Whirlpool commented
that energy conservation standards
beyond EL 1 will cause rebound
consumer behavior, such as running the
dishwasher more than once to reach the
desired cleanliness, re-rinsing dishes
before placing them in the dishwasher,
or handwashing, all of which undercut
projected energy and water savings.
(AHAM, No. 51 at pp. 5–6; Whirlpool,
No. 45 at p. 5) AHAM stated that
consumers are already hesitant to use
their dishwashers for reasons not yet
known and DOE should not adopt
energy conservation standards—which
because of the anti-backsliding rule
cannot be undone if the results are as
AHAM predicts—that could make it less
likely consumers will purchase or use
their efficient dishwashers. (AHAM, No.
87 Market Transformation Programme–Briefing
Note. BNW16: A comparison of washing up by hand
with a domestic dishwasher. February 13, 2006.
Market Transformation Programme, United
Kingdom.
88 U.S. Geological Service (USGS). How Much
Water Do You Use at Home? (Last accessed January
18, 2024.) https://water.usgs.gov/edu/activitypercapita.php.
89 Richter, Christian Paul, 2011. Use of
dishwashers: observation of consumer habits in the
domestic environment. (Last accessed January 23,
2024.) https://pubag.nal.usda.gov/catalog/547534.
E:\FR\FM\24APR3.SGM
24APR3
31436
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
51 at pp. 5–6) Whirlpool commented
that negative rebound effects, such as
consumer compensatory behavior,
would reduce much of the expected
gains from amended standards.
(Whirlpool, No. 45 at pp. 3, 5)
Whirlpool further stated that DOE needs
to perform a detailed analysis of these
possible rebound effects, and include
this analysis in this rulemaking docket,
make the analysis available to
stakeholders for review, and DOE
should account for this in their
determination in selecting an
appropriate EL. (Whirlpool, No. 45 at p.
5) Competitive Enterprise Institute (‘‘CEI
et al.’’) 90 asserted 91 that the proposed
rulemaking violates EPCA’s mandate
that DOE cannot set an efficiency
standard that compromises appliance
quality or fails to save consumers a
significant amount of energy and/or
water. (CEI et al., No. 48 at pp. 1–2) CEI
et al. also asserted that the proposed
rule saves so little energy and water that
it fails any interpretation of this
provision. CEI et al. commented that the
proposed rule would save consumers
$17 over the life of a standard-size
dishwasher, which works out to $1.12
per year, but the savings are undercut if
the proposed rule increases the need to
hand wash dishes instead of running
them in the dishwasher or to run the
load twice. (CEI et al., No. 48 at p. 5)
CEI et al. stated that the insignificant
direct energy savings for consumers
cannot be salvaged by adding in the
agency’s claims of environmental and
public health benefits, including climate
benefits. CEI et al. further asserted that
the inclusion of ‘‘the need to confront
the global climate crisis’’ as a factor in
determining the significance of the
energy savings is not appropriate and
cannot rescue the proposed rule from
significance. (Id.)
AWE encouraged DOE to carefully
consider product performance in setting
standards. (AWE, No. 44 at p. 6) AWE
stated that there are many examples of
high-performing products that are also
water-efficient and noted that products
must meet standards for both
parameters to earn EPA’s WaterSense
label. (Id.) AWE commented that poor
90 The CEI et al. includes comments of the
Competitive Enterprise Institute, AMAC Action,
America First Policy Institute, American Consumer
Institute, Americans for Prosperity, Caesar Rodney
Institute, Center of the American Experiment,
Consumers’ Research, Energy & Environment Legal
Institute, Foundation Supporting Climate Science,
Free Enterprise Project, Heartland Institute,
Heritage Foundation, Independent Women’s Forum,
Independent Women’s Voice, Institute for Energy
Research, John Locke Foundation, Project 21, Rio
Grande Foundation, and Roughrider Policy Center.
91 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0048.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
product performance can potentially
undercut water and energy savings if it
leads to a backlash of public opinion or
contributes to the ‘‘hacking’’ of
products. (Id.) Accordingly, AWE
recommended DOE consider comments
about product performance from
manufacturers and other stakeholders.
(Id.)
Sub-Zero Group, Inc. (‘‘Sub-Zero’’)
asserted 92 that these design changes
will cause consumers to compensate for
performance degradation by pre-rinsing
dishes or using wash cycle options that
consume more energy. (Sub-Zero, No.
47 at pp. 1–2)
DOE has considered the evidence and
arguments put forward by these
commenters, reviewed available
literature, and has concluded that the
adopted standards are not likely to
cause the types of consumer behavior
suggested by commenters, such as
increased handwashing, prewashing,
and changes in dishwasher use. In a
2020 rulemaking, DOE considered
similar comments and determined that
a ‘‘short-cycle’’ product class for
dishwashers was warranted. In part,
DOE based that determination on its
view that existing standards failed to
account for pre-washing or consumers
washing the same load multiple times.
DOE determined that a short-cycle
‘‘could’’ prevent handwashing or rewashing. 85 FR 68723. DOE recognizes
that the conclusion reached here is a
departure from that in the 2020 rule. For
the reasons that follow, DOE no longer
agrees with the 2020 Rule’s assumption
that diminished performance resulting
from standards will result, in
handwashing and rewashing. Whatever
effect prior standards may have had on
handwashing, pre-washing, and rewashing, DOE concludes that the
standards adopted here are unlikely to
have such an effect. Furthermore, as
previously discussed, on February 14,
2024, DOE received a second joint
statement from the same group of
stakeholders that submitted the Joint
Agreement in which the signatories
corroborate this conclusion stating that
dishwashers can provide cleaning
performance at levels consistent with
those on the market today when they
meet the recommended standard
levels.93
DOE disagrees with the comments
asserting that the standards adopted
here will decrease dishwasher
performance, thereby inducing
92 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0047.
93 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
PO 00000
Frm 00040
Fmt 4701
Sfmt 4700
consumers to increase pre-washing,
handwashing, or changes to dishwasher
use. As an initial matter, the academic
literature does not support the assertion
that dishwasher efficiency is correlated
with consumer dishwashing
behavior.94 95 96 More importantly, as
discussed in section IV.B of this
document, DOE has determined that the
technology options likely to be used to
meet the standards would not have a
significant adverse impact on the utility
of the product to subgroups of
consumers. Furthermore, as discussed
in section V.B.4 of this document, DOE
has determined that the adopted
standards cannot compromise the utility
that consumers expect from
dishwashers because the test procedure
at appendix C2 requires that a test cycle
achieve a minimum cleaning
performance threshold to determine if a
dishwasher, when tested according to
the DOE test procedure, completely
washes a normally soiled load of dishes.
Accordingly, the test procedure ensures
that any dishwasher tested for
certification will only have a valid
energy and water representation if such
dishwashers also meet or exceed a
minimum level of cleaning
performance. Thus, even if a
diminishment in performance could
lead to increased pre-washing or
handwashing, there is no evidence to
believe that the standards adopted here
will result in any diminishment in
performance. Therefore, DOE does not
expect any rebound effect due to a
theoretical compromised cleaning
performance in the standards case.
Additionally, DOE assumes that the
consumer’s pre-clean behavior would
not change in the standards case
compared to the no-new standards case
due to the cleaning performance issue,
and therefore, has no impact on the
savings estimates.
By contrast, DOE does recognize that
a small portion of consumers possibly
might forgo the purchase of a new
dishwasher due to the increased
purchase price, may use disposable
plates and utensils, keep their current
dishwasher longer than they otherwise
would and handwash their dishes.
94 Richter, Christian Paul, 2011. Use of
dishwashers: observation of consumer habits in the
domestic environment. (Last accessed January 23,
2024.) https://pubag.nal.usda.gov/catalog/547534.
95 Stamminger, et al., 2017. A European
Comparison of Cleaning Dishes by Hand. (Last
accessed January 23, 2024.) https://silo.tips/
download/a-european-comparison-of-cleaningdishes-by-hand.
96 Lotta Theresa Florianne Schencking and Rainer
Stamminger, 2022. What science knows about our
daily dishwashing routine. (last accessed January
23, 2024.) www.degruyter.com/document/doi/
10.1515/tsd-2022-2423/html?lang=en.
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
Accordingly, DOE’s national impact
analysis accounts for consumer
behaviors, such as handwashing, due to
the price elasticity considered in the
standards case.
Regarding EPA’s WaterSense label,
DOE notes that dishwashers are not
products eligible for EPA’s WaterSense
label; additionally, WaterSense is a
voluntary program, similar to EPA’s
ENERGY STAR Program, which
includes voluntary energy and water use
standards for dishwashers.
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 and water 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 dishwashers
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
2056, which is the end date of the
projection period, the average
dishwasher price is projected to drop
29.2 percent relative to 2020. DOE’s
projection of product prices is described
in appendix 10C of the direct final rule
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 dishwashers. In addition to the
default price trend, DOE considered two
product price sensitivity cases: (1) a
constant price scenario; and (2) a high
price decline scenario based on the
combined PPI series of ‘‘all other
miscellaneous household appliances’’
and ‘‘primary products of major
household appliance manufacturing’’
between the years of 1988–2008, which
shows a faster price decline than the full
time series between the years of 1988–
2022. The derivation of these price
trends and the results of these
sensitivity cases are described in
appendix 10C of the direct final rule
TSD.
The energy cost savings are calculated
using the estimated energy savings in
each year and the projected price of the
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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 2046–2050 average 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 direct
final rule TSD.
The water cost savings are calculated
using the estimated water savings in
each year and the projected water and
wastewater prices. To estimate water
and wastewater prices in future years,
DOE multiplied the weighted average
marginal national water and wastewater
prices by the weighted average of water
price projections of both public and
private water and wastewater sources.
For the public water and wastewater
sources, the water price projection was
developed as a linear regression based
on historical 1986–2022 water and
sewerage maintenance CPI data to
forecast prices through 2050. For years
after 2050, DOE adopted a flat price
trend based on average price from 2046
through 2050. For the private well
marginal water cost, the cost is only
related to the additional pumping
energy use; therefore, DOE used the
projection of annual national average
residential electricity price changes in
the Reference case from AEO2023. The
Reference case has an end year of 2050.
The 2046–2050 average was used for all
years after 2050. For septic tank users,
the marginal wastewater costs were
considered as zero and no price trends
were required.
DOE forecasted an initial drop in
dishwasher shipments in response to an
increase in purchase price attributable
to potential standards-related efficiency
increases. For the selected TSL (TSL3)
and the max-tech TSL (TSL5), a 0.03
percent and a 2.29 percent of the
shipments drop were projected during
the 30-year analysis period compared to
the No-New-Standards case,
respectively. DOE assumed that those
consumers who forgo buying a
dishwasher because of the higher
purchase price would then wash their
dishes by hand, and DOE estimated the
energy and water use of washing dishes
by hand (see chapter 10 of the direct
final rule TSD for details). As discussed
in section V.B.4 of this document, DOE
PO 00000
Frm 00041
Fmt 4701
Sfmt 4700
31437
has determined that the adopted
standards are achievable without
impacting consumer utility. Therefore,
DOE does not expect consumers to
behave differently in handwashing and
pre-rinsing dishes among the considered
efficiency levels.
In calculating the NPV, DOE
multiplies the net savings in future
years by a discount factor to determine
their present value. For this final rule,
DOE estimated the NPV of consumer
benefits using both a 3-percent and a 7percent 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.97 The discount rates
for the determination of NPV are in
contrast to the discount rates used in the
LCC analysis, which are designed to
reflect a consumer’s perspective. The 7percent real value is an estimate of the
average before-tax rate of return to
private capital in the U.S. economy. The
3-percent real value represents the
‘‘social rate of time preference,’’ which
is the rate at which society discounts
future consumption flows to their
present value.
ASAP et al. commented that DOE’s
analysis shows that the consumer
benefits, even at the more conservative
discount rate, outweigh the maximum
costs to manufacturers by over seven
times. (ASAP, No. 46 at p. 1)
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 final rule, DOE analyzed
the impacts of the considered standard
levels on three subgroups: (1) lowincome households, (2) senior-only
households, and (3) well-water-using
households. The analysis used subsets
of the RECS 2020 sample composed of
97 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. Available at
www.whitehouse.gov/omb/information-foragencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A–4
(September 17, 2003) in accordance with the
effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/
uploads/legacy_drupal_files/omb/circulars/A4/a4.pdf (last accessed March 11, 2024).
E:\FR\FM\24APR3.SGM
24APR3
31438
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
households that meet the criteria for the
considered subgroups. DOE used the
LCC and PBP spreadsheet model to
estimate the impacts of the considered
efficiency levels on these subgroups.
Chapter 11 of the direct final rule TSD
describes the consumer subgroup
analysis.
1. Low-Income Households
The identification of low-income
households depends on family size and
income level. Low-income households
are significantly more likely to be
renters or to live in subsidized housing
units, compared to households that are
not low-income. In these cases, the
landlord purchases the equipment and
may pay the energy bill as well.
For this direct final rule analysis, DOE
used RECS data to divide low-income
households into three sub-subgroups:
(1) renters who pay the energy bill, (2)
renters who do not pay the energy bill,
and (3) homeowners.98 For large
appliance such as dishwashers, renters
are unlikely to be purchasers. Instead,
the landlord would bear the cost, and
some or none of the cost could get
passed on to the renter. Renters who pay
the energy bill would receive the energy
cost savings from higher-efficiency
appliances. This disaggregation allows
DOE to determine whether low-income
households are disproportionately
affected by an amended energy
conservation standard in a more
accurate manner.
Table IV.15 shows the distribution of
low-income household dishwasher
users with respect to whether they rent
or own and whether they pay the energy
bill.
BILLING CODE 6450–01–P
Table IV.15 Characterization of Low-Income Households in the Sample for
Dishwashers
Type of Household*
Percentage of LowIncome Sample
RentersPay for Energy
Bill**
RentersDo Not Pay for
Energy Bill**
Owners
Impact of Higher Efficiency on
Energy and Water Bills
Im pact of First
Cost
48%
Full/Partial savings
None
6%
None
None
46%
Full/Partial savings t
Full
* RECS lists three categories: (1) Owned or being bought by someone in your household (classified as
"Owners" in this table); (2) Rented (classified as "Renters" in this table); (3) Occupied without payment of
rent (also classified as "Renters" in this table). Renters include occupants in subsidized housing including
public housing, subsidized housing in private properties, and other households that do not pay rent. RECS
does not distinguish homes in subsidized or public housing.
** RECS lists four categories for each of the fuels used by a household: (1) Household is responsible for
paying for all used in this home; (2) All used in this home is included in the rent or condo fee; (3) Some is
paid by the household, some is included in the rent or condo fee; and 4) Paid for some other way. "Do Not
Pay for Energy Bill" includes only category (2). Partial energy bill savings would occur in cases of
category (3).
*** It is assumed that incremental costs usually are not included in rent increases, but some portion of the
incremental cost could be passed on in the rent over time.
t It is assumed that in the cases where buildings share electricity bills, owners would receive only partial
benefit from savings.
In response to the May 2023 NOPR,
Samsung stated its appreciation for
DOE’s analysis of the proposed
standards levels on low-income
households. Samsung commented that
DOE’s analysis shows that it is unlikely
that renters purchase large appliances
like dishwashers. Samsung noted that
landlords typically bear the cost while
renters directly benefit from higherefficiency appliances through reduced
energy costs. Samsung commented that
considering the small percentage of lowincome consumers in DOE’s analysis
experiencing a net LCC cost at TSL 3 (2
percent for standard-size dishwashers
and 0 percent for compact-size
dishwashers) and the positive average
LCC impact, TSL 3 offers equitable
outcomes for different consumer groups.
Samsung added that the simple payback
periods indicate that the initial
investment in more efficient
dishwashers can be recouped within a
short timeframe. (Samsung, No. 52 at p.
3)
DOE agrees that TSL 3 provides
equitable outcomes for different
consumer groups.
AHAM commented that it
commissioned Bellomy Research to
conduct a study focusing on low-income
households. (AHAM, No. 51 at p. 4)
98 The energy bill includes fuel types of
electricity, natural gas, or propane consumed by a
household.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00042
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.022</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–C
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
AHAM commented that this research
does not constitute a full marketplace
analysis, but does provide additional
information on the effects of higher
appliance prices on low-income
households and is helpful in
understanding the real-world impact
DOE’s proposed standards may have.
(Id.) AHAM stated 75 percent of U.S.
households own a dishwasher and that
fewer than 40 percent of households
with gross incomes of under $40,000
own a dishwasher and that costs are the
primary consideration when
considering a dishwasher purchase.
AHAM noted that dishwashers may be
seen as discretionary because
handwashing is an option, and that this
means that a significant portion of lower
income populations are spending more
than other consumers on their water and
electricity bills due to handwashing. (Id.
at p. 3) AHAM asserted that amended
standards beyond EL 1 are unnecessary
given these successes and unjustified
under EPCA given the limited
opportunity for energy savings and the
disproportionate impacts amended
standards will have on low-income
consumers, noting that most standardsize dishwashers are certified to
ENERGY STAR V. 6.0 (i.e., EL 1). (Id. at
pp. 1–2) AHAM commented that
standards beyond EL 1 are likely to
disproportionately, negatively impact
low-income consumers and drive
negative, unintended consumer
behaviors that negate predicted savings.
(AHAM, No. 51 at pp. 2–3) AHAM
urged DOE to exercise restraint and
consider energy conservation standards
for dishwashers that do not exceed EL
1, as outlined in the January 2022
Preliminary TSD, and investigate other
approaches to achieve additional energy
and water savings without creating this
undue burden on low-income and
underserved communities. (Id. at p. 5)
DOE welcomes the opportunity to
review the Bellomy report, but has not
received a copy of the Bellomy research;
nor is the report available online. DOE
notes that, while unable to review the
specific survey instrument and resulting
dataset, this summary of AHAM survey
findings implies that the framing does
not reflect the context of a revised
minimum energy conservation standard.
Specifically, these are impacts AHAM is
claiming would occur based on the full
cost of a new dishwasher and are not
specifically relevant to the potential
increased incremental cost of
purchasing a new dishwasher in a
standards case (which is substantially
less than the full cost of a dishwasher).
Additionally, based on DOE’s estimates,
the installed price of EL1 is the same as
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
EL2 which is the selected level for the
standard size dishwashers. Therefore,
all consumers, including low-income
consumers, would not experience
additional incremental cost at EL2
compared to EL1. Moreover, DOE’s lowincome LCC subgroup analysis uses
inputs specific to low-income
consumers to estimate the impact of
adopted standards. The results indicate
that only two percent of the low-income
consumers would experience a net cost.
DOE further notes, that AHAM is a party
to the Joint Agreement and is supportive
of the recommended standard adopted
in this direct final rule.
2. Senior-Only Households
DOE defined a senior-only household
as having all occupants with ages of 65
years or greater. Using RECS 2020 data,
senior-only households represent 23
percent of households that have and use
dishwashers.
3. Well-Water Households
AHAM recommended that DOE
consider well-water users as a distinct
sub-group given the differences in costs
between publicly supplied and
household-supplied water and the
resulting impacts on operating cost
savings. (AHAM at No. 51 at p. 16)
AHAM further commented that at EL2
for standard dishwashers, using the
appropriate cash costs for water and
sewer, the mean LCC savings decline by
nearly 50 percent. AHAM asserted that
this makes it glaringly obvious that this
group is worth direct consideration and
DOE must acknowledge that its
proposed standards create significant
burden for them and adjust its proposal
accordingly. (Id.)
DOE defined a well-water household
as (1) having a dedicated water well for
that particular household; (2)
distributing water to no other
households from its water well; and (3)
having no connection to a public water
utility water line. RECS 2020 data do
not indicate whether a household uses
a water well, so DOE used AHS data to
estimate the percentage of households
with dedicated water wells.
Additionally, DOE used AHS data from
1970 to 2021 to develop a projection by
U.S. Census Region. Use of septic tanks
for wastewater effluent was also noted.
Given that the majority of wells and
septic tanks are located in rural areas,
the probability of a household owning a
well and/or a septic tank is significantly
higher in rural areas than in urban areas.
Therefore, DOE distinguishes rural and
urban households when assigning the
water and wastewater sources to the
RECS household samples, and using
different probability distributions of
PO 00000
Frm 00043
Fmt 4701
Sfmt 4700
31439
owning a well and a septic tank by
Census Region based on AHS 2021 data.
Chapter 11 of the direct final rule 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 dishwashers and to
estimate the potential impacts of such
standards on direct 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 rulemaking. 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. 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
E:\FR\FM\24APR3.SGM
24APR3
31440
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
DOE and non-DOE regulations, and
impacts on manufacturer subgroups.
The complete MIA is outlined in
chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this
rulemaking in three phases. In Phase 1
of the MIA, DOE prepared a profile of
the dishwasher manufacturing industry
based on the market and technology
assessment, and publicly available
information. This included a top-down
analysis of dishwasher 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 dishwasher
manufacturing industry, including
company filings of form 10–K from the
SEC,99 corporate annual reports, the
U.S. Census Bureau’s Annual Survey of
Manufactures (‘‘ASM’’),100 and reports
from Dun & Bradstreet.101
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 dishwashers 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,
99 U.S. Securities and Exchange Commission,
Electronic Data Gathering, Analysis, and Retrieval
(‘‘EDGAR’’) system. Available at www.sec.gov/
edgar/search/ (last accessed Nov. 18, 2023).
100 U.S. Census Bureau, Annual Survey of
Manufactures. ‘‘Statistics for Industry Groups and
Industries in the U.S (2021).’’ Available at
www.census.gov/programs-surveys/asm/data/
tables.html (last accessed Nov. 14, 2023).
101 The Dun & Bradstreet Hoovers login is
available at app.dnbhoovers.com (last accessed
Nov. 14, 2023).
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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. 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
chapter 12 of the direct final rule TSD.
2. Government Regulatory Impact Model
and Key Inputs
DOE uses the GRIM to quantify the
changes in cash flow due to new or
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 2024 (the base year of the analysis)
and continuing to 2056. DOE calculated
INPVs by summing the stream of annual
discounted cash flows during this
period. For manufacturers of
dishwashers, DOE used a real discount
rate of 8.5 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 new or amended energy
conservation standard on
manufacturers. As discussed previously,
DOE developed critical GRIM inputs
using a number of sources, including
PO 00000
Frm 00044
Fmt 4701
Sfmt 4700
publicly available data, results of the
engineering and shipments analysis,
and information gathered from industry
stakeholders during the course of
manufacturer interviews conducted in
support of the May 2023 NOPR. 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 direct final
rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient
products is typically more expensive
than manufacturing baseline products
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.
For this analysis, DOE used a
combination of design and efficiency
engineering approaches. This approach
involved physically disassembling
commercially available products,
reviewing publicly available cost
information, and modeling equipment
cost. 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. For
a complete description of the MPCs, see
section IV.C of this document and
chapter 5 of the direct final rule 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 mix
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 2024 (the base
year) to 2056 (the end year of the
analysis period). See section IV.G of this
document and chapter 9 of the direct
final rule TSD for additional details.
c. Capital and Product Conversion Costs
New or amended energy conservation
standards could cause manufacturers to
incur conversion costs to bring their
production facilities and dishwasher
designs into compliance. DOE evaluated
the level of conversion-related
expenditures that would be needed to
comply with each considered efficiency
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
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 noncapitalized costs necessary to make
product designs comply with new or
amended energy conservation
standards.
DOE relied on information derived
from manufacturer interviews, the
engineering analysis, and product
teardowns to evaluate the level of
capital and product conversion costs
manufacturers would likely incur at the
various efficiency levels. During
interviews, DOE asked manufacturers to
estimate the capital conversion costs to
meet the various efficiency levels. This
feedback was compared to findings from
the engineering analysis to determine
the validity of investment levels. DOE
also asked manufacturers to estimate the
redesign effort, engineering resources,
and marketing expenses required at
various efficiency levels to quantify the
product conversion costs. Based on
manufacturer feedback, DOE also
estimated ‘‘re-flooring’’ costs associated
with replacing obsolete display models
in big-box stores (e.g., Lowe’s, Home
Depot, Best Buy) due to more stringent
standards. Some manufacturers stated
that with a new product release, big-box
retailers discount outdated display
models and manufacturers share any
losses associated with discounting the
retail price. The estimated re-flooring
costs for each efficiency level were
incorporated into the product
conversion cost estimates, as DOE
modeled the re-flooring costs as a
marketing expense. DOE also estimated
industry costs associated with the new
appendix C2, as finalized in the January
2023 TP Final Rule. Among other
updates, appendix C2 contains
provisions for a minimum cleaning
index threshold to validate the regulated
test cycle. See 88 FR 3234, 3271–3272,
3281. At each efficiency level, DOE
included the costs associated with rerating compliant basic models in
accordance with appendix C2. 88 FR
3234, 3271–3272. Based on
manufacturer feedback, DOE expects
some manufacturers may incur one-time
costs if their current testing laboratories
are at capacity and additional laboratory
space or test stations are required. DOE
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
includes these one-time costs in its
capital conversion cost estimates. DOE
interviewed manufacturers representing
approximately 90 percent of industry
shipments. In interviews, multiple
manufacturers provided estimates for
the expected upfront capital costs
associated with implementing the
cleaning performance test (e.g.,
additional test stations, equipment
upgrades for existing stations, building
modifications, etc.). DOE considered
these costs in its conversion cost
estimates, as appendix C2 would go into
effect at the time when compliance is
required for any amended energy
conservation standards.
Manufacturer feedback on conversion
costs was aggregated to protect
confidential information. DOE then
scaled up the aggregate capital and
product conversion cost feedback from
interviews to estimate total industry
conversion costs. DOE adjusted the
conversion cost estimates developed in
support of the May 2023 NOPR to 2022$
for this direct final rule.
In general, DOE assumes all
conversion-related investments occur
between the year of publication of the
direct final rule and the year by which
manufacturers must comply with the
new or amended standard. The
conversion cost figures at each analyzed
TSL can be found in section V.B.2.a of
this document. For additional
information on the estimated capital
and product conversion costs, see
chapter 12 of the direct final rule TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing
production costs 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
manufacturer markup 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 tiered 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’’ across all efficiency levels,
PO 00000
Frm 00045
Fmt 4701
Sfmt 4700
31441
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 production costs
increase with efficiency, this scenario
implies that the per-unit dollar profit
will increase. Based on publicly
available financial information, as well
as comments from manufacturer
interviews, DOE assumed average gross
margin percentages of 19.4 percent for
both standard-size and compact-size
product classes.102 Manufacturers noted
that this scenario represents the upper
bound of the dishwasher industry’s
profitability in the standards case
because manufacturers can fully pass on
additional product costs due to
standards to consumers.
The tiered scenario starts with the
three tiers of manufacturer markups
wherein higher efficiency products have
a higher markup than low efficiency
products. In the no-new-standards case,
the three tiers are baseline efficiency,
ENERGY STAR V. 6.0, and ENERGY
STAR V. 7.0 (which corresponds to the
ENERGY STAR Most Efficient
qualification criteria in 2022). In the
standards case, DOE models the breadth
of manufacturers’ portfolio of products
shrinking and amended standards,
resulting in higher-tier products moving
to lower tiers. As a result, higher
efficiency products that previously
commanded the ENERGY STAR V. 6.0
and 2022 ENERGY STAR Most Efficient
manufacturer markups are assigned the
baseline and ENERGY STAR V. 6.0
manufacturer markups, respectively.
This scenario reflects a concern about
product commoditization at higher
efficiency levels as efficiency
differentiators are eliminated.
A comparison of industry financial
impacts under the two manufacturer
markup scenarios is presented in
section V.B.2.a of this document.
3. Discussion of MIA Comments
For this direct final rule, DOE
considered comments it had received
regarding its MIA presented in the May
2023 NOPR. The approach used for this
direct final rule is largely the same
approach DOE had used for the May
2023 NOPR analysis.
In response to the May 2023 NOPR,
AHAM stated that it cannot comment on
the accuracy of DOE’s approach for
including how manufacturers might or
might not recover potential investments
(i.e., the accuracy of DOE’s
manufacturer markup scenarios), but
that AHAM supports DOE’s intent in the
102 The gross margin percentage of 19.4 percent is
based on a manufacturer markup of 1.24.
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31442
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
microwave ovens SNOPR (‘‘August 2022
SNOPR’’) energy conservation standards
rulemaking to include those costs and
investments in the actual costs of
products and retail prices. AHAM urged
DOE to apply the same conceptual
approach used in the August 2022
SNOPR in this dishwashers rulemaking
and all future rulemakings. (AHAM, No.
51 at p. 21)
DOE models different standards-case
manufacturer markup scenarios to
represent the uncertainty surrounding
the potential impacts on prices and
profitability for manufacturers following
the implementation of amended energy
conservation standards (see section
IV.J.2.d of this document). The analyzed
manufacturer markup scenarios vary by
rulemaking as they are meant to reflect
the potential range of financial impacts
for manufacturers of the specific
covered product or equipment. For the
May 2023 NOPR, DOE applied the
preservation of gross margin percentage
scenario to reflect an upper bound of
industry profitability and a tiered
scenario to reflect a lower bound of
industry profitability under amended
standards. 88 FR 32514, 32549. DOE
used these scenarios to reflect the range
of realistic profitability impacts under
more stringent standards. Under the
preservation of gross margin scenario for
dishwashers, the incremental increase
in MPCs—at most analyzed efficiency
levels—result in an increase in per-unit
dollar profit per unit sold. In interviews,
multiple manufacturers emphasized the
competitive nature of the dishwasher
industry and the importance of offering
dishwashers at competitive price points.
Some manufacturers expressed concern
that they would not be able to maintain
their current manufacturer markups
under more stringent standards. Thus,
while manufacturers will likely
continue to differentiate products and
garner higher manufacturer markups
based on consumer features (e.g., Wi-Fi
enablement), brand recognition, energy
efficiency, etc., DOE believes that
maintaining the industry average
manufacturer markup, reflected by the
preservation of gross margin percentage
scenario, represents an appropriate
upper bound to industry pricing and
profitability. Applying the approach
used in the microwave ovens
rulemaking (i.e., a conversion-costrecovery scenario) would reflect a
scenario where dishwasher
manufacturers would increase
manufacturer markups under more
stringent standards. Based on
information gathered during
confidential interviews in support of the
May 2023 NOPR and a review of
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
financial statements of six companies
engaged in manufacturing dishwashers,
DOE does not expect that the
dishwasher industry would increase
manufacturer markups under an
amended standard. Furthermore, in
response to the May 2023 NOPR, DOE
did not receive any public or
confidential data indicating that
industry would increase manufacturer
markups in response to more stringent
standards. Therefore, DOE maintained
the two manufacturer markup scenarios
from the May 2023 NOPR for this direct
final rule analysis. DOE further notes,
that AHAM is a party to the Joint
Agreement and is supportive of the
recommended standard adopted in this
direct final rule.
AHAM urged DOE to consider
cumulative regulatory burden in its
analysis and decision-making process.
AHAM commented that the nature of
EPCA’s requirements that energy
conservation standards be reviewed
every 6 years creates a never-ending
cycle in which manufacturers need to
constantly update or redesign products
to meet new or amended standards.
AHAM commented the cumulative
regulatory burden is significant for
home appliance manufacturers when
redesigning products and product lines
for consumer clothes dryers, residential
clothes washers, conventional cooking
products, dishwashers, refrigerators,
refrigerator-freezers, and freezers,
miscellaneous refrigeration products,
room air conditioners, and microwave
ovens. AHAM noted that many of these
rulemakings are expected to have
compliance dates in 2027. (AHAM, No.
51 at p. 22) AHAM asserted that
engineers would need to spend all their
time redesigning products to meet more
stringent energy efficiency standards,
pulling resources from other
development efforts and business
priorities. AHAM asserted that DOE’s
analysis does not adequately account for
cumulative regulatory burden. AHAM
encouraged DOE to acknowledge the
cumulative regulatory burden its
proposals place on industry and
suggested that DOE could reduce
cumulative regulatory burden by
prioritizing rulemakings, spacing out
the timing of final rules, allowing more
lead time by delaying the publication of
final rules in the Federal Register after
they have been issued, and reducing the
stringency of standards such that fewer
products would require redesign. (Id. at
p. 23) AHAM encouraged DOE to
incorporate combined conversion costs
across rulemakings into the GRIM in
order to quantify cumulative regulatory
burden, and to consider the potential
PO 00000
Frm 00046
Fmt 4701
Sfmt 4700
impact of these rulemakings more
broadly on the economy and on
inflation. AHAM stated that the
appropriate approach is to include costs
of manufacturers needing to comply
with multiple regulations across
product categories as well as the same
product, noting that the manufacturer
impact analysis does not adequately
analyze this issue. (Id. at p. 24)
Whirlpool commented that
manufacturers are facing unprecedented
cumulative regulatory burden due to
DOE energy conservation standards,
citing more stringent proposed
standards and tight compliance
deadlines for over 10 DOE-covered
product categories manufactured and
sold by Whirlpool. Whirlpool
commented that many of these proposed
rules, if finalized, would have
compliance dates in 2026 or 2027.
Whirlpool, a member of AHAM and
party to the Joint Agreement, asserted
that manufacturers may be forced to
make difficult tradeoffs and potentially
stop many projects over a multi-year
period focused on cost reduction,
quality improvement, or innovation;
and instead focus their resources mainly
on compliance to these amended
standards. (Whirlpool, No. 45, at p. 4)
DOE analyzes cumulative regulatory
burden in accordance with section 13(g)
of appendix A. As such, DOE details the
rulemakings and expected conversion
expenses of Federal energy conservation
standards that could impact dishwasher
original equipment manufacturers
(‘‘OEMs’’) that take effect approximately
3 years before or after the 2027
compliance date in section V.B.2.e of
this document. As shown in Table V.11,
DOE considers the rulemakings
referenced by AHAM and Whirlpool as
potentially contributing to cumulative
regulatory burden in this direct final
rule analysis. DOE notes that regulations
that are not finalized are not considered
in its cumulative regulatory burden
analysis, as the timing, cost, and
impacts of unfinalized rules are
speculative. However, to aid
stakeholders in identifying potential
cumulative regulatory burden, DOE
does list rulemakings in Table V.11 that
have proposed rules, which have
tentative compliance dates, compliance
levels, and compliance cost estimates.
Regarding AHAM’s suggestion about
spacing out the timing of final rules for
home appliance rulemakings, DOE has
statutory requirements under EPCA on
the timing of rulemakings. For
dishwashers, refrigerators, refrigeratorfreezers, and freezers, consumer cooking
products, residential clothes washers,
consumer clothes dryers, and room air
conditioners, amended standards apply
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
to covered products manufactured 3
years after the date on which any new
or amended standard is published. (42
U.S.C. 6295(m)(4)(A)(i)) For
miscellaneous refrigeration products,
amended standards apply 5 years after
the date on which any new or amended
standard is published. (42 U.S.C.
6295(l)(2)) However, DOE notes that the
multi-product Joint Agreement
recommends alternative compliance
dates for refrigerators, refrigeratorfreezers, and freezers; consumer
conventional cooking products;
residential clothes washers; consumer
clothes dryers; and miscellaneous
refrigeration products.103 As a result,
the expected compliance dates for many
of the home appliance rulemakings
AHAM listed will be spread out
compared to the estimated compliance
dates resulting from EPCA-specified
lead times. See section V.B.2.e of this
document for additional details.
Regarding AHAM’s recommendation of
combining the product conversion costs
from multiple regulations into the
GRIM, DOE is concerned that combined
results would make it more difficult to
discern the direct impact of the
amended standard on covered
manufacturers. If DOE were to combine
the conversion costs from multiple
regulations, as requested, it would be
appropriate to match the combined
conversion costs with the combined
revenues of the regulated products.
Conversion costs would be spread over
a larger revenue base and potentially
result in less severe INPV impacts when
evaluated on a percent change basis.
In response to the May 2023 NOPR,
Gazoobie commented 104 that taking 91
percent of dishwashers off the market
will lead to severe supply chain issues
and product shortages for minimal
savings. Gazoobie asserted that supply
chain issues could lead to higher prices
than estimated, and facing shortages,
more consumers will repair their older
and less efficient dishwashers. Further,
Gazoobie stated that DOE should not
adopt a rule that takes so many units out
of existence and recommended DOE
adopt a lower TSL that removes less
than 33 percent of the units or finalize
a no new standards rule to see if supply
chain issues becomes resolved over the
next few years. (Gazoobie, No. 38 at p.
1)
DOE does not expect that the levels
adopted in this direct final rule, which
align with the levels proposed in the
103 The Joint Agreement is available in the docket
at www.regulations.gov/comment/EERE-2019-BTSTD-0039-0055.
104 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0038.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
May 2023 NOPR, would lead to product
shortages. Manufacturers would have
until 2027 (3 years after the direct final
rule is published in the Federal
Register) to redesign models to meet the
amended standards and/or increase
production capacity of compliant
models. DOE notes that most OEMs
already offer models that meet the
adopted TSL. Of the 19 OEMs offering
standard-size products, 16 OEMs offer
products that meet the efficiency level
required. All the compact-size
dishwasher OEMs currently offer
products that meet the adopted TSL.
Furthermore, as discussed in section
V.B.2.c of this document, manufacturers
did not express any concerns about
production capacity at the levels
adopted in this direct final rule.
Additionally, DOE notes that TSL 3
corresponds to the levels recommended
in the Joint Agreement, which includes
signatories representing dishwasher
manufacturers.
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 in 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 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 of the direct final rule TSD. The
analysis presented in this notice 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 EPA.105
The on-site operation of dishwashers
involves combustion of fossil fuels and
results in emissions of CO2, NOX, SO2,
CH4, and N2O where these products are
105 Available at www.epa.gov/sites/production/
files/2021-04/documents/emission-factors_
apr2021.pdf (last accessed Oct. 24, 2023).
PO 00000
Frm 00047
Fmt 4701
Sfmt 4700
31443
used. Site emissions of these gases were
estimated using Emission Factors for
Greenhouse Gas Inventories and, for
NOX and SO2, emissions intensity
factors from an EPA publication.106
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 direct
final rule TSD.
The emissions intensity factors are
expressed in terms of physical units per
MWh or 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 the emissions
control programs discussed in the
following paragraphs, and the Inflation
Reduction Act.107
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
106 U.S. Environmental Protection Agency.
External Combustion Sources. In Compilation of Air
Pollutant Emission Factors. AP–42. Fifth Edition.
Volume I: Stationary Point and Area Sources.
Chapter 1. Available at www.epa.gov/air-emissionsfactors-and-quantification/ap-42-compilation-airemissions-factors#Proposed/ (last accessed Oct. 24,
2023).
107 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. Available at www.eia.gov/
outlooks/aeo/assumptions/ (last accessed Oct. 24,
2023).
E:\FR\FM\24APR3.SGM
24APR3
31444
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
January 1, 2015.108 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, for states subject to
SO2 emissions limits under CSAPR, 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.109 77 FR
9304 (Feb. 16, 2012). The final rule
establishes power plant emission
standards for mercury, acid gases, and
non-mercury metallic toxic pollutants.
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 will 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
108 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), and EPA issued the CSAPR
Update for the 2008 ozone NAAQS. 81 FR 74504
(Oct. 26, 2016).
109 In order to continue operating, coal power
plants must have either flue gas desulfurization or
dry sorbent injection systems installed. Both
technologies, which are used to reduce acid gas
emissions, also reduce SO2 emissions.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
cases, NOX emissions would remain
near the limit even if electricity
generation goes down. Depending on
the configuration of the power sector in
the different regions and the need for
allowances, however, NOX emissions
might not remain at the limit in the case
of lower electricity demand. That would
mean that 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.
Standards would be expected to reduce
NOX emissions in the States not covered
by CSAPR. DOE used AEO2023 data to
derive NOX 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
final rule, for the purpose of complying
with the requirements of Executive
Order 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 final rule.
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.
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
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
PO 00000
Frm 00048
Fmt 4701
Sfmt 4700
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
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
IWG on the Social Cost of Greenhouse
Gases or by another means, did not
affect the rule ultimately adopted by
DOE.
DOE estimated the global social
benefits of CO2, CH4, and N2O
reductions using SC–GHG values that
were based on the interim values
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’’). The
SC–GHG 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, the SC–GHG
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–GHG therefore, reflects
the societal value of reducing emissions
of the gas in question by one metric ton.
The SC–GHG 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 agreed that the
interim SC–GHG estimates represent the
most appropriate estimate of the SC–
GHG until revised estimates are
developed reflecting the latest, peerreviewed science. See 87 FR 78382,
78406–78408 for discussion of the
development and details of the IWG SC–
GHG estimates.
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
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
intergenerational analysis in the context
of climate change are likely to be less
than 3 percent, near 2 percent or
lower.110 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 SC–GHG
TSD, the IWG has recommended that,
taken together, the limitations suggest
that the interim SC–GHG estimates used
in this direct final rule likely
underestimate the damages from GHG
emissions. DOE concurs with this
assessment.
For this direct final rule, DOE
considered comments it had received
regarding its approach for monetizing
greenhouse gas emissions in the May
2023 NOPR. The approach used for this
direct final rule is largely the same
approach DOE had used for the May
2023 NOPR analysis.
In response to the May 2023 NOPR,
AHAM objected to DOE using the social
cost of carbon and other monetization of
emissions reductions benefits in its
analysis of the factors EPCA requires
DOE to balance in determining the
110 Interagency Working Group on Social Cost of
Greenhouse Gases. 2021. Technical Support
Document: Social Cost of Carbon, Methane, and
Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government.
Available at www.whitehouse.gov/briefing-room/
blog/2021/02/26/a-return-to-science-evidencebased-estimates-of-the-benefits-of-reducing-climatepollution/.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
appropriate standard, which AHAM
noted are constantly subject to change.
(AHAM, No. 51 at p. 25) AHAM
commented that DOE’s decision making
should not rely on the monetization of
reductions benefits and that it is unclear
to what extent DOE’s deliberation to
propose a TSL rely on the monetization
of emissions reduction. (AHAM, No. 51
at pp. 24–25) AHAM stated that based
on the extent to which DOE calculates
climate and health benefits, it appears
that DOE is prepared to rely upon the
estimated monetary value of emissions
reductions should the consumer NPV
and energy savings not appear to justify
a more stringent level. (Id. at p. 15)
’AHAM commented that DOE has
responded to these objections by
indicating that environmental and
public health benefits associated with
the more efficient use of energy,
including those connected to global
climate change, are important to take
into account when considering the need
for national energy conservation, which
is one of the factors EPCA requires DOE
to evaluate in determining whether a
potential energy conservation standard
is economically justified, and AHAM
does not object to DOE considering the
benefits. AHAM stated that it objects to
DOE relying upon those benefits to
justify a rule given the uncertain and
ever-evolving nature of the estimates.
AHAM commented that DOE can
consider ‘‘other factors’’ under EPCA,
but that does not override the key
criteria EPCA requires DOE to balance
and DOE must consider EPCA’s factors
together and achieve a balance of
impacts and benefits—a balance DOE
has failed to strike in this rule. (Id. at
p. 25) AHAM stated that while it may
be acceptable for DOE to continue its
current practice of examining the social
cost of carbon and monetization of other
emissions reductions benefits as
informational so long as the underlying
interagency analysis is transparent and
vigorous, the monetization analysis
should not impact the TSLs DOE selects
as a new or amended standard. (Id.)
Zycher commented that the IWG
analysis is deeply flawed because it
asserts the benefits of GHG reductions
on a global scale. (Zycher, No. 49 at pp.
22–23) Zycher stated that the IWG
analysis incorporates explicitly in its
benefit/cost calculation the purported
global climate benefits from reductions
in U.S. GHG emissions, presumably on
the grounds that the assumed GHG
externality is global in nature. Zycher
asserted that this argument is
fundamentally flawed, in substantial
part because the global climate effect of
PO 00000
Frm 00049
Fmt 4701
Sfmt 4700
31445
all U.S. GHG emissions is very close to
zero. (Zycher, No. 49 at p. 25)
In response to the AHAM and
Zycher’s comments regarding global
impacts, DOE reiterates its view that the
environmental and public health
benefits associated with more efficient
use of energy, including those
connected to global climate change, are
important to take into account when
considering the need for national energy
conservation. (See 42 U.S.C.
6295(o)(2)(B)(i)(IV)) Additionally,
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.
In addition, Executive Order 13563,
which was re-affirmed on January 21,
2021, stated that each agency must,
among other things: ‘‘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).’’ For these reasons, DOE
considers the monetized value of
emissions reductions in its evaluation of
potential standard levels. While the
benefits associated with reduction of
GHG emissions inform DOE’s evaluation
of potential standards, DOE would reach
the same conclusion regarding the
economic justification of standards
presented in this direct final rule
without considering the social cost of
greenhouse gases. As described in detail
in section V.C.1 of this document, at the
adopted TSL for dishwashers, the
average LCC savings for both product
classes are positive, a shipmentweighted 3 percent of consumers would
experience a net cost, and the NPV of
consumer benefits is positive using both
a 3-percent and 7-percent discount rate.
Zycher commented 111 that the
interim IWG estimates are deeply
flawed for a number of reasons, they: (1)
distort the actual economic growth
predictions produced by the integrated
assessment models, (2) base predictions
of future climate phenomena on climate
models that cannot predict the past or
the present, (3) incorporate co-benefits
in the form of a reduction in the
emissions of other criteria and
hazardous air pollutants already
regulated under different provisions of
the Clean Air Act, (4) incorporate the
111 Available at: www.regulations.gov/comment/
EERE-2019-BT-STD-0039-0049.
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31446
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
asserted benefits of GHG reductions on
a global basis, and (5) employ discount
rates that are inconsistent and
inappropriate. (Zycher, No. 49 at pp.
22–23)
Zycher commented that the
artificially low discount rate applied to
the asserted climate benefits is incorrect
analytically and that the opportunity
cost of capital is the appropriate
discount rate to be applied to the
evaluation of the asserted climate
benefits of the proposed rule because
the allocation of resources to such
endeavors imposes an opportunity cost
in the form of forgone investments.
(Zycher, No. 49 at p. 26) Zycher
commented that the IWG estimates are
flawed for a number of reasons,
including the use of inconsistent and
inappropriate discount rates: (1)
‘‘consumption rate of interest’’ is an
incorrect conceptual discount rate for a
proposed rule analysis because the use
of resources for purposes of reductions
in GHG emissions is obviously an
investment, the opportunity cost of
which is the marginal social return to
investment and (2) incorrect
identification of future generations’
preferences. (Zycher, No. 49 at pp. 27–
28) In regards to the consumption rate
of interest, Zycher stated that the use of
a low consumption rate of interest for
the evaluation of climate benefits only
would introduce an important bias in
the allocation of resources among
government policies and between
government and private-sector resource
use. Zycher commented that the private
sector would not choose to use an
artificially-low discount rate for the
evaluation of alternative resource uses.
(Id. at p. 27) In regards to
intergenerational preferences, Zycher
asserted that future generations prefer to
receive a bequest of a bequest of an
aggregate capital stock. (Id.)
The reasons for using a consumption
discount rate rather than a rate based on
the social rate of return on capital
(estimated to be 7 percent under OMB’s
2003 Circular A–4 guidance) is because
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 reiterates
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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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.’’
CEI et al. commented that there are
numerous flaws with IWG 2021 that
overstate the calculated benefits of
avoided emissions. CEI commented that
IWG used improperly low discount
rates, relied on climate models that have
consistently overstated actual warming
and on baseline emission scenarios that
assume an increasingly coal-centric
global energy system through 2100 and
beyond, while downplaying the
capacity for adaptation to mitigate
climate impacts. CEI et al. also stated
that the inclusion of claimed climate
benefits out nearly 300 years into the
future and the use of global rather than
national benefits, are also skewed
toward inflating the end result. (CEI et
al., No. 48 at p. 6) ’CEI et al. commented
that missing from the agency’s analysis
is any estimate of the temperature
increase it believes will be averted as a
result of the proposed rule, which CEI
et al. estimated to be 0.0003 °C by 2050.
(CEI et al., No. 48 at p. 7)
DOE notes that the IWG’s SC–GHG
estimates were developed over many
years, using a transparent process, peerreviewed methodologies, the best
science available at the time of that
process, and with input from the public.
A number of criticisms raised in the
comments were addressed by the IWG
in its February 2021 SC–GHG TSD. DOE
agrees that the interim SC–GHG values
applied for this direct final rule are
conservative estimates. In the February
2021 SC–GHG TSD, the IWG stated that
the models used to produce the interim
estimates do not include all of the
important physical, ecological, and
economic impacts of climate change
recognized in the climate change
literature. For these same impacts, the
science underlying their ‘‘damage
functions’’ lags behind the most recent
research. In the judgment of the IWG,
these and other limitations suggest that
the range of four interim SC–GHG
estimates presented in the TSD likely
underestimate societal damages from
GHG emissions.
DOE is aware that in December 2023,
EPA issued a new set of SC–GHG
estimates in connection with a final
rulemaking under the Clean Air Act.112
112 See www.epa.gov/environmental-economics/
scghg.
PO 00000
Frm 00050
Fmt 4701
Sfmt 4700
As DOE had used the IWG interim
values in proposing this rule and is
currently reviewing the updated 2023
SC–GHG values, for this direct final
rule, DOE used these updated 2023 SC–
GHG values to conduct a sensitivity
analysis of the value of GHG emissions
reductions associated with alternative
standards for dishwashers (see section
IV.L.1.c of this document). DOE notes
that because EPA’s estimates are
considerably higher than the IWG’s
interim SC–GHG values applied for this
direct final rule, an analysis that uses
the EPA’s estimates results in
significantly greater climate-related
benefits. However, such results would
not affect DOE’s decision in this direct
final rule. As stated elsewhere in this
document, DOE would reach the same
conclusion regarding the economic
justification of the standards presented
in this direct final rule without
considering the IWG’s interim SC–GHG
values. For the same reason, if DOE
were to use EPA’s higher SC–GHG
estimates, they would not change DOE’s
conclusion that the standards are
economically justified.
In response to Zycher’s comment
regarding the use of consumption
discount rate instead of a rate based on
the social rate of return on capital, DOE
notes that DOE’s analysis is only using
the medium discount rate presented in
the IWG TSD as a central estimate of
climate benefits. The IWG TSD has
provided significant details to justify the
choice of discount rate and DOE agrees
with the assessment. However, there is
no suggested justification to use a 7
percent discount rate in the IWG TSD.
DOE also wants to note that while DOE
could have used other discount rate
values (5 percent or 2.5 percent), as
presented by the IWG, it would have
only resulted in lower or higher climate
benefit, but would not have changed
DOE’s conclusion of economic
justification. As stated in section V.C.1
of this document, DOE concludes that
the rule is economically justified even
without factoring in the climate benefit.
DOE’s derivations of the SC–CO2, SC–
N2O, and SC–CH4 values used for this
direct final rule 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 Dioxide
The SC–CO2 values used for this
direct final rule were based on the
values developed for the IWG’s
February 2021 TSD, which are shown in
Table IV.16 in five-year increments from
2020 to 2050. The set of annual values
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
that DOE used, which was adapted from
estimates published by EPA,113 is
presented in appendix 14A of the direct
final rule 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
31447
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.
Table IV.16. Annual SC-CO2 Values from 2021 Interagency Update, 2020-2050
1 2020$ per Metric Ton CO2)
Discount Rate and Statistic
3%
2.5%
5%
Year
Average
Average
Average
14
17
19
22
25
28
32
51
56
62
67
73
79
85
76
83
89
96
103
110
116
2020
2025
2030
2035
2040
2045
2050
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 gross domestic product
(‘‘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
3%
95th
percentile
152
169
187
206
225
242
260
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 direct final rule were based on
the values developed for the February
2021 SC–GHG TSD. Table IV.17 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 direct final rule 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.
Table IV.17. Annual SC-CH4 and SC-N2O Values from 2021 lnteragency Update,
2020-2050 (2020$ per Metric Ton)
5%
3%
2.5%
Average
Average
Average
670
800
940
1100
1300
1500
1700
1500
1700
2000
2200
2500
2800
3100
2000
2200
2500
2800
3100
3500
3800
3%
95th
percentile
3900
4500
5200
6000
6700
7500
8200
5%
3%
2.5%
Average
Average
Average
5800
6800
7800
9000
10000
12000
13000
18000
21000
23000
25000
28000
30000
33000
27000
30000
33000
36000
39000
42000
45000
3%
95th
percentile
48000
54000
60000
67000
74000
81000
88000
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
gross domestic product (‘‘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.
c. Sensitivity Analysis Using EPA’s New
SC–GHG Estimates
In December 2023, EPA issued an
updated set of SC–GHG estimates (2023
SC–GHG) in connection with a final
rulemaking under the Clean Air Act.
These estimates incorporate recent
research and address recommendations
of the National Academies (2017) and
comments from a 2023 external peer
review of the accompanying technical
report.
For this rulemaking, DOE used these
updated 2023 SC–GHG values to
113 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
Feb. 21, 2023).
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00051
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.024</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
2020
2025
2030
2035
2040
2045
2050
SC-N20
Discount Rate and Statistic
ER24AP24.023</GPH>
Year
SC-CH4
Discount Rate and Statistic
31448
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
conduct a sensitivity analysis of the
value of GHG emissions reductions
associated with alternative standards for
dishwashers. This sensitivity analysis
provides an expanded range of potential
climate benefits associated with
amended standards. The final year of
EPA’s new 2023 SC–GHG estimates is
2080; therefore, DOE did not monetize
the climate benefits of GHG emissions
reductions occurring after 2080.
The overall climate benefits are
greater when using the higher, updated
2023 SC–GHG estimates, compared to
the climate benefits using the older IWG
SC–GHG estimates. The results of the
sensitivity analysis are presented in
appendix 14C of the direct final rule
TSD.
2. Monetization of Other Emissions
Impacts
For the direct final rule, DOE
estimated the monetized value of NOX
and SO2 emissions reductions from
electricity generation using benefit-perton estimates for that sector from the
EPA’s Benefits Mapping and Analysis
Program.114 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
and 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 direct final rule
TSD).
DOE also estimated the monetized
value of NOX and SO2 emissions
reductions from site use of natural gas
in dishwashers using benefit per ton
estimates from the EPA’s Benefits
Mapping and Analysis Program.
Although none of the sectors covered by
EPA refers specifically to residential
and commercial buildings, the sector
called ‘‘area sources’’ would be a
reasonable proxy for residential and
commercial buildings.115 The EPA
khammond on DSKJM1Z7X2PROD with RULES3
114 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.
115 ‘‘Area sources’’ represents all emission sources
for which states do not have exact (point) locations
in their emissions inventories. Because exact
locations would tend to be associated with larger
sources, ‘‘area sources’’ would be fairly
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
document provides high and low
estimates for 2025 and 2030 at 3- and 7percent discount rates.116 DOE used the
same linear interpolation and
extrapolation as it did with the values
for electricity generation.
DOE multiplied the site emissions
reduction (in tons) in each year by the
associated $/ton values, and then
discounted each series using discount
rates of 3 percent and 7 percent as
appropriate.
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 direct final
rule TSD.
The output of this analysis is a set of
time-dependent coefficients that capture
the change in electricity generation,
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 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. The MIA addresses those
impacts. Indirect employment impacts
are changes in national employment
that occur due to the shift in
expenditures and capital investment
representative of small dispersed sources like
homes and businesses.
116 ‘‘Area sources’’ are a category in the 2018
document from EPA, but are not used in the 2021
document cited above. See www.epa.gov/sites/
default/files/2018–02/documents/
sourceapportionmentbpttsd_2018.pdf.
PO 00000
Frm 00052
Fmt 4701
Sfmt 4700
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.117 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.
DOE estimated indirect national
employment impacts for the standard
levels considered in this direct final rule
using an input/output model of the U.S.
economy called Impact of Sector Energy
Technologies version 4 (‘‘ImSET’’).118
ImSET is a special-purpose version of
117 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 apps.bea.gov/
scb/pdf/regional/perinc/meth/rims2.pdf (last
accessed July 1, 2021).
118 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’s Guide.
2015. Pacific Northwest National Laboratory:
Richland, WA. PNNL–24563.
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
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 (2027–2031), where these
uncertainties are reduced. For more
details on the employment impact
analysis, see chapter 16 of the direct
final rule TSD.
O. Regulatory Impact Analysis
For any regulatory action that the
Administrator of the Office of
Information and Regulatory Affairs
(‘‘OIRA’’) within OMB determines is a
significant regulatory action under
section 3(f)(1)) of E.O. 12866, section
6(a)(3)(C) of E.O. 12866 requires Federal
agencies to provide an assessment,
including the underlying analysis, of
costs and benefits of potentially
effective and reasonably feasible
alternatives to the planned regulation,
identified by the agencies or the public
(including improving the current
regulation and reasonably viable nonregulatory actions), and an explanation
why the planned regulatory action is
preferable to the identified potential
alternatives. 58 FR 51735, 51741. As
discussed further in section VII.A of this
document, OIRA has determined that
this final regulatory action constitutes a
‘‘significant regulatory action’’ within
the scope of section 3(f)(1) of E.O.
12866. Accordingly, DOE conducted a
regulatory impact analysis (‘‘RIA’’) for
this direct final rule.
As part of the RIA, DOE identifies
major alternatives to standards that
represent feasible policy options to
reduce the energy and water
consumption of the covered product.
DOE evaluates each alternative in terms
of its ability to achieve significant
energy and water savings at a reasonable
cost and compares the effectiveness of
each alternative to the effectiveness of
the finalized standard. DOE recognizes
that voluntary or other non-regulatory
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
efforts by manufacturers, utilities, and
other interested parties can substantially
affect energy and water efficiency or
reduce energy and water consumption.
DOE bases its assessment on the
recorded impacts of any such initiatives
to date, but also considers information
presented by interested parties
regarding the impacts current initiatives
may have in the future. Further details
regarding the RIA are provided in
chapter 17 of the direct final rule TSD.
P. Other Comments
As discussed previously, DOE
considered relevant comments, data,
and information obtained during its
own rulemaking process in determining
whether the recommended standards
from the Joint Agreement are in
accordance with 42 U.S.C. 6295(o). And
while some of those comments were
directed at specific aspects of DOE’s
analysis of the Joint Agreement under
42 U.S.C. 6295(o), others were more
generally applicable to DOE’s energy
conservation standards rulemaking
program as a whole. The ensuing
discussion focuses on these general
comments concerning energy
conservation standards issued under
EPCA.
1. Non-Regulatory Approaches
AHAM commented that it
incorporated by reference its comments
on the January 2022 Preliminary TSD
regarding AHAM’s position that there is
more to be gained from increasing
proper dishwasher use and ownership
than from increasing energy
conservation standards beyond
efficiency level (‘‘EL’’) 1. (AHAM, No.
51 at p. 7) AHAM stated that the
environmental goal for dishwasher
cleaning should be to focus on dish
cleaning as a process, as continued
efficiency improvements for
dishwashers themselves have
diminishing returns with available
technology. AHAM commented that the
dishwasher is an important part of that
process and increasing ownership and
proper use of dishwashers has the
potential to drive enormous water and
significant energy savings that would
dwarf the savings attributable to further
amended standards. AHAM commented
that in the future, conserving water—
rather than energy—will continue to be
the defining environmental issue for
dishwasher cleaning performance. (Id.)
AHAM commented that there is a wide
range of dish cleaning behavior and
from an environmental perspective, the
preferred ordering of consumer
behaviors is to run a full or partial
dishwasher load without pre-rinsing
and abstaining from hand-washing
PO 00000
Frm 00053
Fmt 4701
Sfmt 4700
31449
dishes altogether, as the latter tends to
use far more water than running a
dishwasher. (Id. at pp. 7–8) AHAM cited
the Energy Information Administration’s
(‘‘EIA’s’’) 2020 Residential Energy
Consumption Survey (‘‘RECS’’), stating
that 14 percent of households have and
do not use their dishwasher.
Additionally, according to RECS,
dishwasher presence is lower in renteroccupied homes. AHAM recommended
that DOE make an effort to increase
educational and awareness initiatives
on effective dishwasher use. (Id. at p. 8)
AHAM cited data from EPA and a study
from the University of Michigan by
Gabriela Porras et al. to reiterate that
properly using a dishwasher without
pre-rinsing is the most economical
approach for energy, water, and time
usage, and that handwashing using
between 6.9 to 22.8 gallons for eight
place settings, respectively. (Id. at p. 9)
AHAM asserted that by increasing
dishwasher usage through educational
initiatives promoting dishwasher
ownership and proper use, DOE can
achieve far greater savings that would
show on consumers’ utility bills than it
can by amending standards. (Id. at p. 10)
DOE acknowledges that a percentage
of households do not own or own but
do not use their dishwashers. DOE also
acknowledges that non-regulatory
options may exist to promote
dishwasher ownership and property use
to further push the potential for energy
and water savings. However, DOE is
required by EPCA to establish or amend
standards for a covered product that are
designed to achieve the maximum
improvement in energy efficiency that
the Secretary determines is
technologically feasible and
economically justified. (42 U.S.C.
6295(g), (m), and (o)(2)(A)) DOE has
determined that the energy conservation
standards for dishwashers adopted in
this direct final rule achieve the
maximum improvement in energy
efficiency which is technologically
feasible and economically justified.
2. Test Procedure Usage Factors
The CA IOUs recommended DOE
adjust the current load usage factors to
reflect changes in consumer pre-treating
habits since 2001, the date of the studies
DOE relies on in this rulemaking. (CA
IOUs, No. 50 at pp. 5–6) The CA IOUs
commented that a nationally
representative study by Lawrence
Berkeley National Laboratory (‘‘LBNL’’)
in 2021 (‘‘2021 LBNL Study’’) 119 shows
119 Stratton, H. et al., ‘‘Dishwashers in the
Residential Sector: A Survey of Product
Characteristics, Usage, and Consumer Preferences,’’
E:\FR\FM\24APR3.SGM
Continued
24APR3
31450
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
consumers pre-treat their dishes less
often (when compared to 2001) before
placing them in a dishwasher, and the
CA IOUs recommended DOE capture
this change by updating the light,
medium, and heavy soil level
distribution to 48 percent, 38 percent,
and 14 percent, respectively. (Id.)
DOE notes that it established the load
usage factors in the dishwasher test
procedure in August 2003 to account for
the varying energy and water
performance of units that include soil
sensors. 68 FR 51887, 51890. In that
rulemaking, DOE relied on survey data
gathered and analyzed by Arthur D.
Little (‘‘ADL’’) 120 to characterize the
quantity of soils that consumers load
into a dishwasher. 68 FR 51887, 51890.
Using the soil loads from an earlier
version of AHAM DW–1 121 as a
reference point, the ADL report defined
a light soil load as half the quantity of
a single soiled place setting as defined
in AHAM DW–1. A medium soil load
was equivalent to two soiled AHAM
DW–1 place settings and a heavy soil
load was approximately equal to four
soiled AHAM DW–1 place settings.
With these load size definitions, ADL
found that consumers reported that they
most frequently washed lightly soiled
loads (62 percent of loads), with
medium (33 percent) and heavy (5
percent) soil loads making up the
remainder. Therefore, DOE used this as
the distribution of soil loads for the
heavy, medium, and light soil load
cycles in the DOE test procedure. 68 FR
51887, 51890. While the ADL report
also presented data on the frequency of
different types of pre-treatment, it did
not correlate pre-treatment itself to
different resulting soil loads and thus
load usage factors.
More recently, in the January 2023 TP
Final Rule, DOE addressed comments
from the CA IOUs and Samsung
pertaining to whether consumers’ prerinsing habits, including those surveyed
in the 2021 LBNL Study, warranted
amendments to the soil loads and
corresponding usage factors in the
dishwasher test procedure. DOE
determined in the January 2023 TP
Energy Technologies Area Publications, May 2021
https://eta-publications.lbl.gov/sites/default/files/
osg_lbnl_report_dishwashers_final_4.pdf.
120 ADL survey data are available at
www.regulations.gov/document?D=EERE–2006–TP–
0096–0055.
121 ‘‘Household Electric Dishwashers.’’ AHAM
DW–1 was renumbered to AHAM DW–2 when it
was updated in 2020. Although not identical to the
soil loads in AHAM DW–2–2020, they are
substantially similar. This standard provides a
uniform method to test and measure cleaning
performance of dishwashers, including the soil
preparation, soil application, and scoring of test
load to calculate cleaning index.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
Final Rule that it did not have, nor did
commenters submit, any specific
information about the types of soils that
would be used to reflect pre-rinsing, or
lack thereof, or the consumer relevance
of such soils. 88 FR 3234, 3246.
Accordingly, DOE did not amend the
soil load usage factors in the January
2023 TP Final Rule.
DOE also notes that the 2021 LBNL
Study focused on consumer priorities
with respect to their dishwashers. The
requirement for pre-treatment of dishes
was identified as the second to last
priority of 18 possibilities for the 1201
survey respondents (less important than
cutlery tray location). Pre-treatment of
dishes reflect consumer habit, rather
than dishwasher performance.122 123 The
2021 LBNL Study did not address a
correlation of pre-treatment of dishes
with resulting soil loads on the dishes,
which may have changed since the time
of the ADL report, so did not provide
information with which to evaluate any
different load usage factors.
Additionally, the LCC employs no load
usage factor but relies on the reported
number of weekly loads for each
household in the RECS 2020 dataset.
3. National Academy of Sciences Report
The National Academies of Sciences,
Engineering, and Medicine (‘‘NAS’’)
periodically appoint a committee to
peer review the assumptions, models,
and methodologies that DOE uses in
setting energy conservation standards
for covered products and equipment.
The most recent such peer review was
conducted in a series of meetings in
2020, and NAS issued the report 124 in
2021 detailing its findings and
recommendations on how DOE can
improve its analyses and align them
with best practices for cost-benefit
analysis.
AHAM stated that despite previous
requests from AHAM and others, DOE
has failed to review and incorporate the
recommendations of the NAS report,
instead indicating that it will conduct a
separate rulemaking process without
such a process having been initiated.
(AHAM, No. 51 at p. 17) AHAM
122 Richter, Christian Paul, 2011. Use of
dishwashers: observation of consumer habits in the
domestic environment. (Last accessed January 23,
2024.) https://pubag.nal.usda.gov/catalog/547534.
123 Stamminger, et al., 2017. A European
Comparison of Cleaning Dishes by Hand. (Last
accessed January 23, 2024.) https://silo.tips/
download/a-european-comparison-of-cleaningdishes-by-hand.
124 National Academies of Sciences, Engineering,
and Medicine. 2021. Review of Methods for Setting
Building and Equipment Performance Standards.
Available at www.nationalacademies.org/our-work/
review-of-methods-for-setting-building-andequipment-performance-standards (last accessed
Nov. 20, 2023).
PO 00000
Frm 00054
Fmt 4701
Sfmt 4700
asserted that DOE seems to be ignoring
the recommendations in the NAS Peer
Review Report and even conducting
analyses that are the opposite of these
recommendations. AHAM stated that
DOE cannot continue to perpetuate the
errors in its analytical approach that
have been pointed out by stakeholders
and the NAS report, as to do so will lead
to arbitrary and capricious rules. (Id.)
As discussed, the rulemaking process
for establishing new or amended
standards for covered products and
equipment is specified at appendix A.
DOE periodically examines and revises
these provisions in separate rulemaking
proceedings. The recommendations
provided in the 2021 NAS report, which
pertain to the processes by which DOE
analyzes energy conservation standards,
will be considered by DOE in a
forthcoming rulemaking process.
V. Analytical Results and Conclusions
The following section addresses the
results from DOE’s analyses with
respect to the considered energy
conservation standards for dishwashers.
It addresses the TSLs examined by DOE,
the projected impacts of each of these
levels if adopted as energy conservation
standards for dishwashers, and the
standards levels that DOE is adopting in
this direct final rule. Additional details
regarding DOE’s analyses are contained
in the direct final rule TSD supporting
this document.
A. Trial Standard Levels
In general, DOE typically evaluates
potential new or 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
dishwasher 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
direct final rule, DOE analyzed the
benefits and burdens of five TSLs for
dishwashers. DOE developed TSLs that
combine efficiency levels for each
analyzed dishwasher class. DOE
presents the results for the TSLs in this
document, while the results for all
efficiency levels that DOE analyzed are
in the direct final rule TSD.
Table V.1 presents the TSLs and the
corresponding efficiency levels that
DOE has identified for potential
amended energy conservation standards
for dishwashers. TSL 5 represents the
max-tech energy efficiency for both
product classes and corresponds to EL
4 for standard-size dishwashers and EL
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
2 for compact-size dishwashers. TSL 4
is the TSL that maximizes net benefits
at a 3-percent discount rate; this TSL
represents the highest efficiency levels
providing positive LCC savings, which
comprises the gap-fill efficiency level
between ENERGY STAR V. 6.0 and
ENERGY STAR V. 7.0 (EL 2) for
standard-size dishwashers and max-tech
efficiency level (EL 2) for compact-size
dishwashers. TSL 3 is the
Recommended TSL detailed in the Joint
Agreement. TSL 3 maximizes net
benefits at a 7-percent discount rate; this
TSL comprises the gap-fill efficiency
level between the ENERGY STAR V. 6.0
level and ENERGY STAR V. 7.0 level
(EL 2) for standard-size dishwashers and
the ENERGY STAR V. 6.0 level (EL 1)
for compact-size dishwashers. TSL 2
comprises the ENERGY STAR V. 6.0
level (EL 1) for standard-size
31451
dishwashers and the max-tech
efficiency level (EL 2) for compact-size
dishwashers. TSL 1 represents EL 1
across both product classes and the
ENERGY STAR V. 6.0 level. While
representative ELs were included in the
TSLs, DOE considered all efficiency
levels as part of its analysis and
included the efficiency levels with
positive LCC savings in the TSLs.125
Table V.l Trial Standard Levels for Dishwashers
TSL
Efficiency
Level
Estimated
Annual
Energy Use
(kWhlvear)*
PC 2: Compact-Size Dishwasher
Per-Cycle
Water
Consumption
(gallcvcle)
Efficiency
Level
Estimated
Annual
Energy Use
(kWhlvear)*
Per-Cycle
Water
Consumption
(gallcvcle)
I
2
I
2
2
174
124
174
124
124
3.1
1.6
3.1
1.6
1.6
1
1
232
3.5
2
1
232
3.5
3**
2
223
3.3
4
2
223
3.3
4
193
2.4
5
* Based on appendix C2.
•• Recommended TSL from the Joint Agreement.
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 decrease. Because the
technologies to improve energy
efficiency may also reduce water usage
(as discussed in IV.C.1.b), annual
operating costs include both energy and
water consumption. 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 and water use,
energy prices, energy and water price
trends, repair costs, and maintenance
costs). The LCC calculation also uses
product lifetime and a discount rate.
Chapter 8 of the direct final rule TSD
provides detailed information on the
LCC and PBP analyses.
Table V.2 through Table V.5 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
125 Efficiency levels that were analyzed for this
final rule are discussed in section IV.C.4 of this
document. Results by efficiency level are presented
in TSD chapters 8, 10, and 12.
B. Economic Justification and Energy
Savings
khammond on DSKJM1Z7X2PROD with RULES3
1. Economic Impacts on Individual
Consumers
DOE analyzed the economic impacts
on dishwasher 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.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00055
Fmt 4701
Sfmt 4700
baseline product. In the second table,
the 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.
BILLING CODE 6450–01–P
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.025</GPH>
PC 1: Standard-Size Dishwasher
31452
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table V.2 Avera~e LCC and PBP Results for PC 1: Standard-Size Dishwashers
TSL
Average Costs
(2022$)
EL
1,2
3,4
Baseline
1
2
Average
Lifetime
(years)
$470
First Year's
Operating
Cost
$45
Lifetime
Operating
Cost
$625
$1,095
--
15.2
$496
$496
$40
$39
$592
$576
$1,088
$1,072
4.9
15.2
15.2
Installed
Cost
--
Simple
Payback
(years)
LCC
3.9
4
5
$649
$34
$585
$1,234
15.9
15.2
* Based on the test procedure assumption of 184 cycles per year.
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency
level. The simple PBP is measured relative to the baseline product.
Table V.3 Average LCC Savings Relative to the No-New-Standards Case for PC 1:
Standard-Size Dishwashers
TSL
EL
1,2
3,4
5
1
2
4
.
Life-Cycle Cost Savings
Average LCC Savings
Percent of Consumers that
(2022$)
Experience Net Cost
$5
4%
3%
$17
($145)
97%
Table V.4 Averae:e LCC and PBP Results for PC 2: Compact-Size Dishwashers
Average Costs
(2022$)
Simple
Average
TSL
EL
Payback
Lifetime
First Year's
Lifetime
Installed
(years)
(years)
Operating
Operating
LCC
Cost
Cost
Cost
Baseline
$508
$33
$491
$999
15.2
--1
1,3
$31
$460
$968
15.2
$508
0.0
2
2,4,5
$566
$23
$398
$964
5.5
15.2
* Based on the test procedure assumption of 184 cycles per year.
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency
level. The simple PBP is measured relative to the baseline product.
In the consumer subgroup analysis,
DOE estimated the impact of the
considered TSLs on low-income
households, senior-only households,
and well-water households. Table V.6
and Table V.7 compare the average LCC
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
savings and PBP at each efficiency level
for the consumer subgroups with similar
metrics for the entire consumer sample
for standard-size dishwashers. In most
cases, the average LCC savings and PBP
for low-income households, senior-only
households, and well-water households
PO 00000
Frm 00056
Fmt 4701
Sfmt 4700
at the considered efficiency levels are
not substantially different from the
average for all households. The wellusers have reduced water operating
costs and therefore receive less
operating cost savings (and lower LCC
savings). The senior subgroup has
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.028</GPH>
b. Consumer Subgroup Analysis
ER24AP24.027</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
EL
ER24AP24.026</GPH>
Life-Cvcle Cost Savine:s
Percent of Consumers that
Average LCC Savings *
(2022$)
Experience Net Cost
1,3
1
$32
0%
2,4,5
2
$4
54%
* The savings represent the average LCC for affected consumers.
TSL
ER24AP24.029</GPH>
Table V.5 Average LCC Savings Relative to the No-New-Standards Case for PC 2:
Compact-Size Dishwashers
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
slightly lower dishwasher usage
frequency compared to the national
sample and therefore also experience
lower operating cost savings (and lower
LCC savings).
31453
Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP
results for the subgroups.
Table V.6 Comparison of LCC Savings and PBP for Consumer Subgroups and All
Households;* PC 1: Standard-Size Dishwashers
Low-Income
Senior-Only
Well-water
All Households
Households**
Householdst
Householdst
Average LCC Savings* (2022$)
($7)
($18)
$5
TSL 1-2
$45
TSL 3-4
$21
$13
$12
$17
($29)
($159)
($162)
($145)
TSL5
Payback Period (years)
TSL 1-2
2.0
4.9
6.2
7.2
TSL 3-4
4.9
1.6
5.5
3.9
TSL5
19.8
21.4
15.9
6.6
Consumers with Net Benefit(%)
TSL 1-2
4%
2%
2%
2%
TSL 3-4
81%
87%
86%
87%
TSL5
45%
2%
2%
3%
Consumers with Net Cost(%)
TSL 1-2
2%
5%
5%
4%
TSL 3-4
2%
4%
4%
3%
TSL5
46%
98%
98%
97%
• The savings represent the average LCC for affected consumers.
•• Low-income households represent 5.7 percent of all households for this product class. To perform the
cost-benefit analysis, DOE drew 10,000 consumer samples from the low-income sample pool and
distinguished the assumption on low-income owners and renters depending on if they were paying the
energy bills. More details can be found in Table IV.15. The statistics of the 10,000 low-income consumer
samples were shown in the table.
t Senior-only households represent 23.2 percent of all households for this product class.
t Well-water households represent 10.5 percent of all households for this product class.
Table V. 7 Comparison of LCC Savings and PBP for Consumer Subgroups and All
Households;* PC 2: Compact-Size Dishwashers
Low-Income
Senior-Only
Well water
Households**
I Householdst
I Householdst I All Households
I Average LCC Savings* (2022$)
$39
$26
$23
$32
TSL 1,3
I
I
I
I
($14)
($19)
TSL2,4,5
$62
$4
I
I
I
I
I Payback Period (years)
TSL 1,3
0.0
0.0
0.0
0.0
I
I
I
I
TSL 2,4,5
2.3
5.5
6.8
6.9
I
I
I
I
I Consumers with Net Benefit (%)
2%
2%
2%
2%
TSL 1,3
I
I
I
I
31%
52%
23%
22%
TSL 2,4,5
I
I
I
I
I Consumers with Net Cost (%)
0%
0%
0%
0%
TSL 1,3
I
I
I
I
54%
26%
62%
63%
TSL 2,4,5
I
I
I
I
* The savings represent the average LCC for affected consumers.
** Low-income households represent 5.7 percent of all households for this product class.
t Senior-only households represent 23.2 percent of all households for this product class.
t Well-water households represent 10.5 percent of all households for this product class.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00057
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.031</GPH>
ER24AP24.030</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
I
31454
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
BILLING CODE 6450–01–C
c. Rebuttable Presumption Payback
As discussed in section III.D.2 of this
document, 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. (42 U.S.C.
6295(o)(2)(B)(iii)) 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 procedures for
dishwashers. In contrast, the PBPs
presented in section V.B.1.a of this
document were calculated using
distributions that reflect the range of
energy use in the field.
Table V.8 presents the rebuttablepresumption payback periods for the
considered TSLs for dishwashers. While
DOE examined the rebuttablepresumption criterion, it considered
whether the standard levels considered
for this rule 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.
Table V.8 Rebuttable-Presumption Payback Periods
TSL
PC 1: Standard-Size
PC 2: Compact-Size
khammond on DSKJM1Z7X2PROD with RULES3
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate
the impact of amended energy
conservation standards on
manufacturers of dishwashers. The
following section describes the expected
impacts on manufacturers at each
considered TSL. Chapter 12 of the direct
final rule TSD explains the analysis in
further detail.
1
I
2
I
3
years
I
4
I
5
3.7
0.0
I
I
3.7
I
I
3.0
0.0
I
I
3.0
4.6
4.6
I
I
12.6
4.6
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 illustrate the estimated
financial impacts (represented by
changes in INPV) of potential amended
energy conservation standards on
manufacturers of dishwashers, as well
as the conversion costs that DOE
estimates manufacturers of dishwashers
would incur at each TSL.
To evaluate the range of cash-flow
impacts on the dishwasher industry,
DOE modeled two scenarios using
different assumptions that correspond to
the range of anticipated market
responses to amended energy
conservation standards: (1) a
preservation of gross margin percentage
scenario; (2) a tiered scenario, as
discussed in section IV.J.2.d of this
document. The preservation of gross
margin percentage applies a ‘‘gross
margin percentage’’ of 19.4 percent for
both standard-size and compact-size
product classes.126 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 tiered scenario starts with the
three different product manufacturer
markups in the no-new-standards case
(baseline, ENERGY STAR V. 6.0, and
ENERGY STAR V. 7.0 127). This scenario
reflects a concern about product
commoditization at higher efficiency
levels as efficiency differentiators are
eliminated and manufacturer markups
are reduced. The tiered scenario results
in the lower (or larger in magnitude)
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 direct final rule
publication year through the end of the
analysis period (2024–2056). The
‘‘change in INPV’’ results refer to the
difference in industry value between the
no-new-standards case and standards
126 The gross margin percentage of 19.4 percent is
based on a manufacturer markup of 1.24.
127 ENERGY STAR V. 7.0 corresponds to the 2022
ENERGY STAR Most Efficient qualification criteria.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00058
Fmt 4701
Sfmt 4700
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-newstandards 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 direct 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 of the industry and
generally result in lower free cash flow
in the period between the publication of
the direct 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.
BILLING CODE 6450–01–P
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.032</GPH>
Product Class
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31455
.
Table V 9 Manufacturer Impact Analvsis Results for Dishwashers
No-newstandards
case
Unit
INPV
Change in
INPV*
Free Cash
Flow (2026) *
Change in
Free Cash
Flow (2026) *
Product
Conversion
Costs
Capital
Conversion
Costs
Total
Conversion
Costs
2022$
TSL 1
TSL2
TSL 3**
TSL4
TSL5
680.8 to
729.7
(7.5) to
(0.8)
673.7 to
723.3
(8.4) to
(1.7)
587.1 to
639.1
(20.2) to
(13.1)
579.9 to
632.8
(21.2) to
(14.0)
334.4 to
414.6
(54.5) to
(43.7)
52.3
47.9
43.8
1.5
(2.5)
(236.4)
-
(8.5)
(16.3)
(97.1)
(104.8)
(552.0)
-
11.8
17.0
58.3
63.5
249.0
-
1.0
6.0
68.7
73.7
432.0
-
12.7
23.0
126.9
137.2
681.0
735.8
Million
-
%
2022$
Million
%
2022$
Million
2022$
Million
2022$
Million
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–C
At TSL 1, the standard represents EL
1 across both standard-size and
compact-size dishwashers and the
ENERGY STAR V. 6.0 level. The change
in INPV is expected to range from ¥7.5
percent to ¥0.8 percent. At this level,
free cash flow is estimated to decrease
by 8.5 percent compared to the no-newstandards case value of $52.3 million in
the year 2026, the year before the
standards year. Currently,
approximately 93 percent of domestic
dishwasher shipments meet the
efficiencies required at TSL 1. For
standard-size dishwashers, which
account for approximately 98 percent of
annual shipments, 93 percent of
shipments meet the efficiencies
required. For compact-size dishwashers,
which account for the remaining 2
percent of annual shipments, 87 percent
of shipments meet the efficiencies
required.
The design options DOE analyzed for
standard-size dishwashers include
implementing electronic controls, soil
sensing, multiple spray arms, improved
water filters, a separate drain pump, and
tub insulation. The design options DOE
analyzed for compact-size dishwashers
include implementing improved
controls. At this level, capital
conversion costs are minimal since the
majority of products already meet the
efficiency levels required. As with all
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
the analyzed TSLs, conversion costs
incorporate industry testing costs as
manufacturers implement the cleaning
performance test and re-rate all their
existing, compliant models in
accordance with the new appendix C2.
10 CFR appendix C2 to subpart of part
430. DOE expects industry to incur
some re-flooring costs associated with
standard-size dishwashers as
manufacturers redesign baseline
products to meet the efficiency levels
required by TSL 1. In interviews,
manufacturers stated that there are not
re-flooring costs associated with
compact-size dishwashers as those are
typically not on display at big-box
stores. DOE estimates capital conversion
costs of $1.0 million and product
conversion costs of $11.8 million.
Conversion costs total $12.7 million.
Under the tiered manufacturer
markup scenario, which is discussed in
IV.J.2.d of this document, the key driver
of impacts to INPV at TSL 1 is the result
of margin compression for both
standard-size and compact-size
dishwashers as manufacturers forfeit
premiums and cut into margins as they
try to maintain a competitively priced
baseline product. Although only a small
fraction of products (approximately 7
percent of shipments) would need to be
redesigned at this level, the margin
compression under the tiered scenario
has a disproportionately large impact on
PO 00000
Frm 00059
Fmt 4701
Sfmt 4700
INPV, since most of the market
(approximately 84 percent of standardsize and compact-size dishwasher
shipments) is at EL 1 (i.e., the ENERGY
STAR V. 6.0 level) in the no-newstandards case.
At TSL 2, the standard represents the
ENERGY STAR V. 6.0 level (EL 1) for
standard-size dishwashers and the maxtech efficiency level (EL 2) for compactsize dishwashers. The change in INPV is
expected to range from –8.4 percent to
–1.7 percent. At this level, free cash
flow is estimated to decrease by 16.3
percent compared to the no-newstandards case value of $52.3 million in
the year 2026, the year before the
standards year. Currently,
approximately 92 percent of domestic
dishwasher shipments meet the
efficiencies required at TSL 2. As with
TSL 1, 93 percent of standard-size
dishwasher shipments meet the
efficiencies required. For compact-size
dishwashers, 21 percent of shipments
currently meet the efficiencies required.
The design options DOE analyzed for
standard-size dishwashers are the same
as at TSL 1. The design options
analyzed for compact-size dishwashers
include implementing the design
options at TSL 1 as well as permanent
magnet motors, improved filters,
hydraulic system optimization, heater
incorporated into base of tub, and
reduced sump volume. The increase in
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.033</GPH>
* Parentheses indicates negative (-) values.
**The Recommended TSL
khammond on DSKJM1Z7X2PROD with RULES3
31456
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
conversion costs from the prior TSL is
entirely due to the higher efficiency
level required for compact-size
dishwashers. At TSL 2, all
manufacturers of compact-size
countertop dishwashers with four or
more place settings and in-sink
dishwashers with less than four place
settings would need to redesign their
products to meet the efficiencies
required, as DOE is not aware of any
currently available products in these
two configurations that meet TSL 2.
Manufacturer feedback and the
engineering analysis indicate that
redesigning these compact-size
configurations to meet max-tech would
require significant investment, both in
terms of engineering resources and new
tooling, relative to the size of the
domestic compact-size dishwasher
market. While it is technologically
feasible for compact-size countertop
dishwashers with four or more place
settings and in-sink dishwashers with
less than four place settings to meet TSL
2 (max-tech for compact-size
dishwashers), manufacturers would
need to determine whether the
shipments volumes justify the level of
investment required. DOE expects
industry to incur the same re-flooring
costs as at TSL 1. DOE estimates capital
conversion costs of $6.0 million and
product conversion costs of $17.0
million. Conversion costs total $23.0
million.
Under the tiered manufacturer
markup scenario, the key driver of
impacts to INPV at TSL 2 is the result
of margin compression for both
standard-size and compact-size
dishwashers as manufacturers forfeit
premiums and cut into margins in an
attempt to maintain a competitively
priced baseline product. In particular,
because TSL 2 sets standards for
compact-size dishwashers at max-tech,
manufacturers lose their premium
markup for high-efficiency compact-size
products, contributing to a reduction in
future revenues and INPV.
At TSL 3, the standard represents the
gap-fill efficiency level between the
ENERGY STAR V. 6.0 level and
ENERGY STAR V. 7.0 level (EL 2) for
standard-size dishwashers and the
ENERGY STAR V. 6.0 level (EL 1) for
compact-size dishwashers. The change
in INPV is expected to range from
¥20.2 percent to ¥13.1 percent. At this
level, free cash flow is estimated to
decrease by 97.1 percent compared to
the no-new-standards case value of
$52.3 million in the year 2026, the year
before the standards year. Currently,
approximately 11 percent of domestic
dishwasher shipments meet the
efficiencies required at TSL 3. For
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
standard-size dishwashers, 9 percent of
current shipments meet the efficiencies
required. As with TSL 1, 87 percent of
compact-size dishwasher shipments
meet the efficiencies required.
The design options DOE analyzed for
standard-size dishwashers include
implementing the design options at TSL
1 and TSL 2 as well as improved control
strategies, which could necessitate
product redesign to more closely control
water temperature, water fill volumes,
etc. The design options analyzed for
compact-size dishwashers are the same
as for TSL 1. The increase in conversion
costs from the prior TSL is entirely due
to the increased efficiency level
required for standard-size dishwashers.
In interviews, some manufacturers
stated that meeting TSL 3 would involve
physical improvements to system
elements to enable tighter controls and
better design tolerances, while
maintaining certain product attributes
valued by their consumers. Although
manufacturers tended to agree that the
key product attributes (in addition to
energy use, water use, and cleaning
performance) included drying
performance, cycle duration, and noise
levels, manufacturers identified
different priorities and internal targets
for those metrics. One manufacturer
noted that maintaining the same normal
cycle time across its dishwasher
portfolio was a key design parameter, as
this feature was part of its value
proposition and marketing material. A
different manufacturer emphasized that
maintaining drying performance,
particularly of plastic dishware, was a
key concern for its consumer base.
These manufacturers stated that they
may need new tooling and some
modifications to the assembly line to
improve the system elements to meet
TSL 3 efficiencies while maintaining
these product attributes. DOE notes that
since the May 2023 NOPR published,
more manufacturers now offer standardsize dishwasher models that meet the
TSL 3 efficiencies. DOE believes that the
recent introduction of more highefficiency standard-size dishwashers is
largely in response to ENERGY STAR V.
7.0, which went into effect in July 2023.
Of the 19 OEMs offering standard-size
products, 16 OEMs offer products that
meet the efficiency level required. DOE
expects industry to incur more reflooring costs compared to TSL 2. DOE
estimates capital conversion costs of
$68.7 million and product conversion
costs of $58.3 million. Conversion costs
total $126.9 million.
TSL 3 brings standards for standardsize dishwashers above ENERGY STAR
V. 6.0 levels. Under the tiered scenario,
the fraction of products that are eligible
PO 00000
Frm 00060
Fmt 4701
Sfmt 4700
for any additional premium markups
above baseline is further reduced as
manufacturers sacrifice margins while
seeking to maintain a low-price-point
baseline model.
At TSL 4, the standard represents the
highest efficiency levels providing
positive LCC savings, which comprise
the gap-fill efficiency level between the
ENERGY STAR V. 6.0 level and
ENERGY STAR V. 7.0 level (EL 2) for
standard-size dishwashers and max-tech
efficiency level (EL 2) for compact-size
dishwashers. The change in INPV is
expected to range from ¥21.2 percent to
¥14.0 percent. At this level, free cash
flow is estimated to decrease by 104.8
percent compared to the no-newstandards case value of $52.3 million in
the year 2026, the year before the
standards year. Currently,
approximately 10 percent of domestic
dishwasher shipments meet the
efficiencies required at TSL 4. As with
TSL 3, 9 percent of standard-size
dishwasher shipments meet the
efficiencies required. As with TSL 2, 21
percent of compact-size dishwasher
shipments meet the efficiencies
required.
The design options DOE analyzed for
standard-size dishwashers are the same
as at TSL 3. The design options
analyzed for compact-size dishwashers
are the same as at TSL 2 and include
implementing permanent magnet
motors, improved filters, hydraulic
system optimization, heater
incorporated into base of tub, and
reduced sump volume. The increase in
conversion costs from the prior TSL is
entirely due to the increased efficiency
level required for compact-size
dishwashers. As discussed previously,
all manufacturers of compact-size
countertop dishwashers with four or
more place settings and in-sink
dishwashers with less than four place
settings would need to redesign their
products to meet the efficiencies
required, as DOE is not aware of any
currently available products in these
two configurations that meet TSL 4
(max-tech for compact-size
dishwashers). Manufacturer feedback
and the engineering analysis indicate
that redesigning these compact-size
dishwasher configurations to meet TSL
4 would require significant investment,
both in terms of engineering resources
and new tooling, relative to the size of
the domestic compact-size dishwasher
market. DOE expects industry to incur
similar re-flooring costs compared to
TSL 3. DOE estimates capital conversion
costs of $73.7 million and product
conversion costs of $63.5 million.
Conversion costs total $137.2 million.
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
At TSL 4, the large conversion costs
result in 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.
Under the tiered manufacturer
markup scenario, one of the key drivers
of impacts to INPV at TSL 4 is the result
of margin compression for both
standard-size and compact-size
dishwashers as manufacturers forfeit
premiums and cut into margins in an
attempt to maintain a competitively
priced baseline product. In particular,
because TSL 4 sets standards for
compact-size dishwashers at max-tech,
manufacturers lose their premium
markups for high-efficiency compactsize products, contributing to a
reduction in future revenues and INPV.
At TSL 5, the standard represents the
max-tech energy efficiency for both
product classes and corresponds to EL
4 for standard-size dishwashers and EL
2 for compact-size dishwashers. The
change in INPV is expected to range
from ¥54.5 percent to ¥43.7 percent.
At this level, free cash flow is estimated
to decrease by 552.0 percent compared
to the no-new-standards case value of
$52.3 million in the year 2026, the year
before the standards year. Currently,
less than 1 percent of domestic
dishwasher shipments meet the
efficiencies required at TSL 5. For
standard-size dishwashers, DOE
estimates that no shipments currently
meet the efficiencies required. As with
TSL 4, 21 percent of compact-size
dishwasher shipments meet the
efficiencies required.
The design options DOE analyzed for
standard-size dishwashers include
design options considered at the lower
efficiency levels (i.e., electronic
controls, soil sensors, multiple spray
arms, improved water filters and control
strategies, separate drain pump, tub
insulation, hydraulic system
optimization, water diverter assembly,
temperature sensor, 3-phase variablespeed motor, and flow meter) and
include additional design options such
as condensation drying, including use of
a stainless steel tub; flow-through
heating implemented as an in-sump
integrated heater; and control strategies.
The design options analyzed for
compact-size dishwashers are the same
as at TSL 4. The increase in conversion
costs from the prior TSL is entirely due
to the increased efficiencies required for
standard-size dishwashers.
All manufacturers interviewed stated
that meeting max-tech would
necessitate significant platform redesign
in order to meet the required
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
efficiencies and maintain the product
attributes that consumers desire.
Manufacturers noted that investments in
new tooling, equipment, and production
line modifications may be necessary to
implement a range of design options.
Specifically, manufacturers discussed
tooling for additional spray arms, new
sump tooling, new stamping equipment,
door opening systems, improved
filtration systems, and new dish racks.
Manufacturers would likely need to
convert all existing plastic tub designs
to stainless steel tubs, which would
necessitate expanding existing stainless
steel tub production capacity and
retiring plastic injection equipment
used for plastic tubs. None of the
manufacturers interviewed, which
together account for approximately 90
percent of dishwasher shipments,
currently offer standard-size
dishwashers that meet max-tech.
Therefore, most manufacturers
expressed technical uncertainty about
the extent of the design changes and
production line updates that would be
needed to meet max-tech and satisfy
their consumer base. Some
manufacturers suggested they would
explore new water purification
technology systems for water reuse.
Other manufacturers noted that meeting
max-tech may necessitate new tub
architectures, which would require
significant capital investment. These
manufacturers noted that if new
technology was necessary (e.g., water
purification systems) or if new tub
architectures were required, the 3-year
compliance period may be insufficient
to complete the necessary product
redesign and production facility
updates. DOE estimates capital
conversion costs of $432.0 million and
product conversion costs of $249.0
million. Conversion costs total $681.0
million.
At TSL 5, the large conversion costs
result in 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.
TSL 5 sets the standard for all
products as high as technologically
feasible, leaving manufacturers no
ability to differentiate products by
efficiency under the tiered manufacturer
markup scenario. Thus, all margins
collapse to the baseline levels.
b. Direct Impacts on Employment
To quantitatively assess the potential
impacts of amended energy
conservation standards on direct
employment in the dishwasher
industry, DOE used the GRIM to
PO 00000
Frm 00061
Fmt 4701
Sfmt 4700
31457
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. For this
direct final rule, DOE used the most upto-date information available. DOE
calculated these values using statistical
data from the U.S. Census Bureau’s 2021
ASM,128 BLS employee compensation
data,129 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,
retirement and savings, and legally
required benefits.
The total 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
product. This value is derived from
manufacturer interviews, product
database analysis, and publicly
available information. DOE estimates
that approximately 78 percent of
standard-size dishwashers are produced
domestically. DOE estimates that no
compact-size dishwashers are produced
domestically. Therefore, overall, DOE
estimates that approximately 76 percent
of all covered dishwashers sold in the
128 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
Nov. 22, 2023).
129 U.S. Bureau of Labor Statistics. Employer
Costs for Employee Compensation. September 12,
2023. Available at www.bls.gov/news.release/
archives/ecec_12152023.pdf (last accessed Nov. 22,
2023).
E:\FR\FM\24APR3.SGM
24APR3
31458
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
United States are produced
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
products covered by this direct final
rule.
Non-production workers account for
the remainder of the direct employment
figure. The number of non-production
employees covers domestic workers
who are not directly involved in the
production process, such as sales,
engineering, human resources,
management, etc. Using the number 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 new energy conservation
standards there would be 3,950
domestic production and nonproduction workers for standard-size
dishwashers in 2027 (the analyzed
compliance year). To evaluate the range
of cash-flow impacts on the dishwasher
industry, DOE modeled two scenarios
using different assumptions that
correspond to the range of anticipated
market responses to amended energy
conservation standards: (1) a
preservation of gross margin percentage
scenario; (2) a tiered scenario, as
discussed in section IV.J.2.d of this
document. The preservation of gross
margin percentage applies a ‘‘gross
margin percentage’’ of 19.4 percent for
both standard-size and compact-size
product classes. 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 tiered scenario starts with the
three different product manufacturer
markups in the no-new-standards case
(baseline, ENERGY STAR V. 6.0, and
ENERGY STAR V. 7.0). This scenario
reflects a concern about product
commoditization at higher efficiency
levels as efficiency differentiators are
eliminated and manufacturer markups
are reduced. The tiered scenario results
in the lower (or larger in magnitude)
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 direct final rule
publication year through the end of the
analysis period (2024–2056). 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-newstandards 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 direct 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 of the industry and
generally result in lower free cash flow
in the period between the publication of
the direct 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.9 Table V.10 shows the range
of the impacts of energy conservation
standards on U.S. manufacturing
employment in the standard-size
dishwasher industry. As previously
noted, DOE did not identify any U.S.
manufacturing facilities producing
compact-size dishwashers for the
domestic market, and therefore does not
present a range of direct employment
impacts. The following discussion
provides a qualitative evaluation of the
range of potential impacts presented in
Table V.10.
Table V.10 Direct Employment Impacts for Domestic Standard-Size Dishwasher
Manufacturers in 2027*
Trial Standard Level
1
2
3**
4
5
Direct Employment in 2027
(Production Workers+ NonProduction Workers)
3,950
3,981
3,981
3,981
3,981
4,583
Potential Changes in Direct
Employment in 2027*
-
(3,526)
to 31
(3,526)
to 31
(3,526) to
31
(3,526)
to 31
(3,526)
to 633
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative
numbers.
**The Recommended TSL
The direct employment impacts
shown in Table V.10 represent the
potential domestic employment changes
that could result following the
compliance date for the standard-size
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
dishwashers in this direct final rule.
The upper bound estimate corresponds
to an increase in the number of
domestic workers that would result
from amended energy conservation
PO 00000
Frm 00062
Fmt 4701
Sfmt 4700
standards if manufacturers continue to
produce the same scope of covered
products within the United States after
compliance takes effect.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.034</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
NoStandards
Case
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
To establish a conservative lower
bound, DOE assumes all manufacturers
would shift production to foreign
countries or would shift to importing
finished goods (versus manufacturing
in-house). As previously discussed, the
majority of standard-size dishwashers
sold in the United States are
manufactured in domestic production
facilities. However, many major
dishwasher OEMs with U.S. production
facilities also have dishwasher
manufacturing facilities located outside
the United States. At lower TSLs (i.e.,
TSL 1 through TSL 4), 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, at max-tech, both the
complexity and cost of production
facility updates increases,
manufacturers are more likely to revisit
their production location decisions. At
max-tech, one manufacturer
representing a large portion of the U.S.
dishwasher market noted concerns
about the level of investment and
indicated the potential need to relocate
production lines in order to remain
competitive. In this direct final rule,
DOE is adopting the Recommended
TSL, which corresponds to the standard
levels recommended in the Joint
Agreement. As discussed in section III.B
of this document, the Joint Agreement
included a trade association, AHAM,
which represents 16 manufacturers of
dishwashers. Additionally, DOE notes
that the Recommended TSL for
standard-size dishwashers corresponds
to EL 2 and not max-tech (EL 4).
Furthermore, most OEMs already make
standard-size dishwashers that meet the
Recommended TSL. Of the 19 OEMs
offering standard-size products, 16
OEMs already offer standard-size
dishwashers that meet the efficiency
level required. Since most
manufacturers with U.S. production
facilities already manufacture standardsize dishwashers that meet the adopted
levels, DOE expects that the likelihood
of shifts in domestic production
locations as a direct result of amended
standards for standard-size dishwashers
are relatively low.
Additional detail on the analysis of
direct employment can be found in
chapter 12 of the direct final rule 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
direct final rule TSD.
130 U.S. Small Business Administration. ‘‘Table of
Small Business Size Standards.’’ (Effective March
17, 2023). Available at www.sba.gov/document/
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
c. Impacts on Manufacturing Capacity
As discussed in section V.B.2.a of this
document, implementing the different
design options analyzed for this direct
final rule would require varying levels
of resources and investment. At higher
efficiency levels, manufacturers noted
that balancing more stringent energy
and water use requirements while
maintaining the product attributes their
consumers value becomes increasingly
challenging. All manufacturers
interviewed, which together account for
approximately 90 percent of industry
shipments, noted that meeting the
standard-size dishwasher max-tech
efficiencies and cleaning performance
requirement while maintaining internal
targets for other product attributes such
as drying performance, cycle duration,
and noise levels, would require
significant investment. None of the
manufacturers interviewed currently
offer a max-tech product, and they
expressed technical uncertainty about
the exact technologies and production
line changes that would be needed to
meet both the required efficiencies and
the manufacturers’ internal design
standards. In interviews, several
manufacturers expressed concerns that
the 3-year time period between the
announcement of the direct 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.
These manufacturers noted that the 3year time period would be particularly
problematic if the standard necessitated
completely new tub architectures.
However, because TSL 3 (i.e., the
Recommended TSL, which corresponds
to the levels recommended in the Joint
Agreement) would not require max-tech
efficiencies, DOE does not expect
manufacturers to face long-term
capacity constraints due to the standard
levels detailed in this direct final rule.
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
PO 00000
Frm 00063
Fmt 4701
Sfmt 4700
31459
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
rulemaking based on the results of the
industry characterization.
DOE analyzes the impacts on small
businesses in a separate analysis for the
standards proposed in the NOPR
published elsewhere in this issue of the
Federal Register and in chapter 12 of
the direct final rule TSD. In summary,
the Small Business Administration
(‘‘SBA’’) defines a ‘‘small business’’ as
having 1,500 employees or less for
NAICS 335220, ‘‘Major Household
Appliance Manufacturing.’’ 130 Based on
this classification, DOE did not identify
any domestic OEM that qualifies as a
small business. For a discussion of the
impacts on the small business
manufacturer subgroup, see chapter 12
of the direct final rule TSD.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer
burden involves looking at the
cumulative impact of multiple DOE
standards and the regulatory actions of
other Federal agencies and States 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. 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.
For the cumulative regulatory burden
analysis, DOE examines Federal,
product-specific regulations that could
affect dishwasher manufacturers that
take effect approximately 3 years before
or after the 2027 compliance date (2024
to 2030). This information is presented
in Table V.11.
BILLING CODE 6450–01–P
support-table-size-standards (last accessed Nov. 18,
2023).
E:\FR\FM\24APR3.SGM
24APR3
31460
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
Approx.
Number of OEMs
Federal Energy
Number of
Standards
Affected by
Conservation Standard
OEMs*
Compliance
Today's Rule**
Year
Portable Air
Conditioners
85 FR 1378
(Januarv 10, 2020)
Miscellaneous
Refrigeration Products t
88 FR 19382
(March 31, 2023)
Automatic Commercial
Ice Makerst
88 FR 30508
(May 11, 2023)
Refrigerated Bottled or
Canned Beverage
Vending Machines t
88 FR 33968
(May 25, 2023)
Room Air Conditioners
88 FR 34298
(May 26, 2023)
Microwave Ovens
88 FR 39912
(June 20, 2023)
Consumer Water
Heaterst
88 FR 49058
(July 27, 2023)
Consumer Boilers t
88 FR 55128
(August 14, 2023)
Commercial Water
Heating Equipment
88 FR69686
(October 6, 2023)
Commercial
Refrigerators,
Refrigerator-Freezers,
and Freezers t
88 FR 70196
(October 10 2023)
Dehumidifierst
88 FR 76510
(November 6 2023)
Consumer Furnaces
88 FR 87502
(December 18, 2023)
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
Industry
Conversion
Costs
(Millions)
Industry
Conversion
Costs/
Equipment
Revenue***
9
2
2025
$320.9
(2015$)
6.7%
38
8
2029
$126.9
(2021$)
3.1%
23
3
2027
$15.9
(2022$)
0.6%
5
1
2028
$1.5
(2022$)
0.2%
8
4
2026
$24.8
(2021$)
0.4%
18
10
2026
$46.1
(2021$)
0.7%
22
3
2030
$228.1
(2022$)
1.1%
24
1
2030
$98.0
(2022$)
3.6%
15
1
2026
$42.7
(2022$)
3.8%
83
4
2028
$226.4
(2022$)
1.6%
20
4
2028
$6.9
(2022$)
0.4%
15
1
2029
$162.0
(2022$)
1.8%
PO 00000
Frm 00064
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.035</GPH>
Table V.11 Compliance Dates and Expected Conversion Expenses of Federal Energy
C onservafion St an d ar d s Anecf m2 n·1s hwas h er O n2ma
• • 1 E,c mpmen t M anu fac t urers
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31461
As shown in Table V.11, the
rulemakings with the largest overlap of
dishwasher OEMs include refrigerators,
refrigerator-freezers, and freezers,
consumer conventional cooking
products, residential clothes washers,
consumer clothes dryers, and
miscellaneous refrigeration products,
which are all part of the multi-product
Joint Agreement submitted by interested
parties.131 As detailed in the multiproduct Joint Agreement, the signatories
indicated that their recommendations
should be considered a ‘‘complete
package.’’ The signatories further stated
that ‘‘each part of this agreement is
contingent upon the other parts being
implemented.’’ (Joint Agreement, No. 55
at p. 3)
The multi-product Joint Agreement
states the ‘‘jointly recommended
compliance dates will achieve the
overall energy and economic benefits of
this agreement while allowing necessary
lead-times for manufacturers to redesign
products and retool manufacturing
plants to meet the recommended
standards across product categories.’’
(Joint Agreement, No. 55 at p. 2) The
staggered compliance dates help
131 The microwave ovens energy conservation
standards final rule (88 FR 39912), which has 10
overlapping OEMs, was published prior to the joint
submission of the multi-product Joint Agreement.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00065
Fmt 4701
Sfmt 4700
mitigate manufacturers’ concerns about
their ability to allocate sufficient
resources to comply with multiple
concurrent amended standards and
about the need to align compliance
dates for products that are typically
designed or sold as matched pairs. See
section IV.J.3 of this document for
stakeholder comments about cumulative
regulatory burden. See Table V.12 for a
comparison of the estimated compliance
dates based on EPCA-specified
timelines and the compliance dates
detailed in the Joint Agreement.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.036</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Refrigerators,
Refrigerator-Freezers,
2029 and
$830.3
and Freezers
63
9
1.3%
(2022$)
2030:
89FR3026
(Januarv 17 2024)
Consumer Conventional
$66.7
Cooking Products
35
12
2028
0.3%
(2022$)
89FR 11434
(Februarv 14, 2024)
Consumer Clothes
$180.7
Dryers
19
11
2028
1.4%
(2022$)
89 FR 18164
<March 12, 2024)
Residential Clothes
$320.0
Washers
22
12
2028
1.8%
(2022$)
89 FR 19026
(March 15. 2024)
* This column presents the total number of OEMs identified in the energy conservation standard rule that is
contributing to cumulative regulatory burden.
** This column presents the number of OEMs producing dishwashers that are also listed as OEMs in the identified
energy conservation standard that is contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of equipment 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 direct 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.
t These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication
of a final rule.
l For the refrigerators, refrigerator-freezers, and freezers energy conservation standards direct final rule, the
compliance year (2029 or 2030) varies by product class.
31462
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table V.12 Expected Compliance Dates for Multi-Product Joint Agreement
Rule making
Estimated Compliance
Year based on EPCA
Requirements
Compliance Year in the
Joint Agreement
Consumer Clothes Dryers
2027
2028
Residential Clothes Washers
2027
2028
Consumer Conventional
Cooking Products
2027
2028
2027
2027*
2029 or 2030 depending
on the product class
Dishwashers
Refrigerators, RefrigeratorFreezers, and Freezers
Miscellaneous Refrigeration
Products
2027
2029
2029
*Estimated compliance year. The Joint Agreement states, "3 years after the publication of a final rule in the Federal
Register." (Joint Agreement, No. 55 at p. 2)
BILLING CODE 6450–01–C
a. Significance of Energy and Water
Savings
3. National Impact Analysis
This section presents DOE’s estimates
of the national energy savings, NWS,
and the NPV of consumer benefits that
would result from each of the TSLs
considered as potential amended
standards.
To estimate the energy and water
savings attributable to potential
amended standards for dishwashers,
DOE compared their energy and water
consumption under the no-newstandards case to their anticipated
energy and water 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
(2027–2056). Table V.13 and Table V.14
present DOE’s projections of the
national energy and water savings for
each TSL considered for dishwashers.
The savings were calculated using the
approach described in section IV.H.2 of
this document.
Table V.13 Cumulative National Energy Savings for Dishwashers; 30 Years of
Shipments (2027-2056)
1
0.05
0.05
Primary energy
FFC energy
2
I
Trial Standard Level
4
3
I
I
quads
0.07
0.08
I
I
I
I
0.30
0.31
I
I
5
I
0.32
0.34
I
I
1.21
1.28
132 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. Available at
www.whitehouse.gov/omb/information-foragencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A–4
(September 17, 2003) in accordance with the
effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
2
0.09
I
0.11
Trial Standard Level
3
4
I
I
trillion JZallons
0.24
0.26
I
I
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 rulemaking,
Frm 00066
Fmt 4701
Sfmt 4700
5
I
0.92
DOE undertook a sensitivity analysis
using 9 years, rather than 30 years, of
product shipments. The choice of a 9year 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
uploads/legacy_drupal_files/omb/circulars/A4/a4.pdf (last accessed March 11, 2024).
PO 00000
I
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.038</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
OMB Circular A–4 132 requires
agencies to present analytical results,
I
ER24AP24.037</GPH>
Water Savings
1
ER24AP24.039</GPH>
Table V.14 Cumulative National Water Savings for Dishwashers; 30 Years of
Shipments (2027-2056)
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
revised standards.133 The review
timeframe established in EPCA is
generally not synchronized with the
product lifetime, product manufacturing
cycles, or other factors specific to
dishwashers. Thus, such results are
31463
Table V.15 and Table V.16. The impacts
are counted over the lifetime of
dishwashers purchased during the
period 2027–2035.
presented for informational purposes
only and are not indicative of any
change in DOE’s analytical
methodology. The NES and NWS
sensitivity analysis results based on a 9year analytical period are presented in
Table V.15 Cumulative National Energy Savings for Dishwashers; 9 Years of
Shipments (2027-2035)
Trial Standard Level
Source energy
FFC energy
1
I
2
I
0.01
0.01
I
I
0.02
0.02
I
I
3
quads
0.08
0.09
I
4
I
5
I
I
0.09
0.09
I
I
0.33
0.35
Table V.16 Cumulative National Water Savings for Dishwashers; 9 Years of
Shipments (2027-2035)
Trial Standard Level
Water Savings
b. Net Present Value of Consumer Costs
and Benefits
DOE estimated the cumulative NPV of
the total costs and savings for
1
I
2
0.02
I
0.03
I
3
I
trillion Rallons
0.07
I
I
4
I
5
0.07
I
0.25
percent real discount rate. Table V.17
shows the consumer NPV results with
impacts counted over the lifetime of
products purchased during the period
2027–2056.
consumers that would result from the
TSLs considered for dishwashers. In
accordance with OMB’s guidelines on
regulatory analysis,134 DOE calculated
NPV using both a 7-percent and a 3-
Table V.17 Cumulative Net Present Value of Consumer Benefits for Dishwashers;
30 Years of Shipments (2027-2056)
Trial Standard Level
Discount Rate
1
3 percent
7 percent
0.17
0.03
The NPV results based on the
aforementioned 9-year analytical period
are presented in Table V.18. The
impacts are counted over the lifetime of
I
2
I
I
I
0.22
0.03
I
I
3
billion 2022$
2.90
1.23
I
4
I
5
I
I
2.95
1.23
I
I
(20.12)
(12.18)
products purchased during the period
2027–2035. 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.
3 percent
7 percent
0.04
0.02
I
I
133 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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
Trial Standard Level
3
I
I
billion 2022$
1.01
0.05
I
I
(0.03)
0.58
I
I
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.
134 U.S. Office of Management and Budget.
Circular A–4: Regulatory Analysis. Available at
PO 00000
Frm 00067
4
I
5
1.02
0.57
I
I
(8.30)
(6.52)
2
Fmt 4701
Sfmt 4725
www.whitehouse.gov/omb/information-foragencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A–4
(September 17, 2003) in accordance with the
effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/
uploads/legacy_drupal_files/omb/circulars/A4/a4.pdf (last accessed March 11, 2024).
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.043</GPH>
I
ER24AP24.042</GPH>
1
ER24AP24.041</GPH>
Discount Rate
ER24AP24.040</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Table V.18 Cumulative Net Present Value of Consumer Benefits for Dishwashers;
9 Years of Shipments (2027-2035)
31464
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
BILLING CODE 6450–01–C
The previous results reflect the use of
a default trend to estimate the change in
price for dishwashers 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 direct
final rule 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 amended energy
conservation standards for dishwashers
will 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 (2027–2056), where these
uncertainties are reduced.
The results suggest that the adopted
standards are 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 direct
final rule TSD presents detailed results
regarding anticipated indirect
employment impacts.
khammond on DSKJM1Z7X2PROD with RULES3
4. Impact on Utility or Performance of
Products
As stated, EPCA, as codified, contains
the provision that 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))
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
As discussed in this section, DOE has
concluded that the standards adopted in
this direct final rule will not lessen the
utility or performance of the
dishwashers under consideration in this
rulemaking. Manufacturers of these
products currently offer units that meet
or exceed the adopted standards.
In making this determination for this
direct final rule, DOE considered
comments it had received in response to
the May 2023 NOPR.
a. Cleaning Performance
EPCA authorizes DOE to design test
procedures that measure energy
efficiency, energy use, water use, or
estimated annual operating cost of a
covered product during a representative
average use cycle or period of use. (42
U.S.C. 6293(b)(3)) Representative
average use of a dishwasher reflects, in
part, a consumer using the dishwasher
to achieve an acceptable level of
cleaning performance. As discussed, the
amended standards adopted in this
direct final rule require the use of the
test procedure at appendix C2, which
includes a minimum cleaning
performance threshold as a condition
for a valid test cycle to determine if a
dishwasher, when tested according to
the DOE test procedure, ‘‘completely
washes a normally soiled load of
dishes,’’ so as to better represent
consumer use of the product. See
section 1 of appendix C2 for definition
of ‘‘normal cycle’’ and section 4 of
appendix C2 for the cleaning index
threshold.
In response to the May 2023 NOPR,
ASAP et al. asserted that analyses from
DOE and EPA demonstrate that
dishwashers meeting the proposed
standards meet consumer expectations
in various performance areas. (ASAP et
al. No. 46 at pp. 2–3) ASAP et al.
commented that as part of the
development of ENERGY STAR V. 7.0,
EPA used web-scraped and Consumer
Reports data to understand how
dishwashers meeting the proposed
requirements perform across a range of
metrics that impact consumer
satisfaction and found standard-size
dishwashers on the market that could
meet the ENERGY STAR Most Efficient
2022 criteria 135 while achieving the
cleaning performance threshold. (Id.)
ASAP et al. additionally commented
that EPA’s analysis indicated that
standard-size dishwashers are able to
meet EL 3, while providing high
consumer satisfaction across various
135 2022 ENERGY STAR Most Efficient
Requirement for Dishwashers: www.energystar.gov/
sites/default/files/ENERGY%20STAR%20Most%
20Efficient%202022%20Dishwasher%20Final%20
Criteria%20Memo_0.pdf.
PO 00000
Frm 00068
Fmt 4701
Sfmt 4700
areas of performance such as drying
time, cycle time, and noise performance.
(Id.)
Samsung supported DOE’s revised
cleaning index threshold value of 70
and commented that the minimum
cleaning index would help incentivize
dishwasher designs that do not require
multiple runs to perform basic
functionality, thereby avoiding
increased energy use from running
multiple cycles. (Samsung, No. 52 at p.
3) NEEA also commented in support of
DOE’s requirement of a certain cleaning
performance level for the normal cycle
to ensure dishwasher cleaning
performance is maintained. NEEA noted
that NEEA’s dishwasher market
research, previously shared
confidentially with DOE, shows no
correlation between cleaning
performance and efficiency for current
models. (NEEA, No. 53 at p. 2)
AHAM commented that DOE must
further evaluate the impact of amended
standards on performance despite the
newly finalized cleaning performance
metric in the test procedure. AHAM
stated that the test procedure
requirement alone is not sufficient to
satisfy EPCA’s requirement that
standards not result in the
unavailability of products with
performance characteristics
substantially the same as those currently
available. AHAM commented that DOE
has not presented any consumer data to
demonstrate that its test and/or
threshold are relevant to consumers nor
has it produced sufficient data to
demonstrate that its proposed standards
will not result in a degradation of
performance. (AHAM, No. 51 at p. 10).
Sub-Zero asserted that the
degradation in dishwasher performance
that will result from the proposed
standards will affect consumer opinions
of Sub-Zero’s products and
disproportionately harm the segment of
the market in which Sub-Zero operates.
(Sub-Zero, No. 47 at pp. 1–2)
CEI et al. stated that adverse impacts
of the agency’s past dishwasher rules
have necessitated compensating
behaviors that are not only costly and
inconvenient, but also undercut any
climate benefits. (CEI et al., No. 48 at p.
7) CEI et al. commented that the
reduced useful life of compliance
models is also environmentally
detrimental, as it results in greater
energy and other resources going into
the manufacturing and disposal of
dishwashers. (CEI et al., No. 48 at p. 7)
Zycher commented that DOE claims
the proposed standard would not reduce
the utility or performance of the
products under consideration in this
rulemaking, but Zycher asserted that the
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
only analytical support for this
statement provided by DOE is that
manufacturers of these products
currently offer units that meet or exceed
the proposed standards. (Zycher, No. 49
at pp. 2, 4, 28) Zycher stated that this
argument does not provide any
information about the relative ‘‘utility or
performance’’ of such options. (Id.)
In response to comments from
stakeholders over concerns about
product cleaning performance for
standard-size dishwashers at EL 2, DOE
reiterates that the amended standards
adopted in this direct final rule require
the use of the test procedure at
appendix C2, which includes a
minimum cleaning performance
threshold to determine if a dishwasher,
when tested according to the DOE test
procedure, ‘‘completely washes a
normally soiled load of dishes,’’ so as to
better represent consumer use of the
product. That is, the new test procedure
at appendix C2 ensures that the rated
energy and water consumption of
dishwashers are representative of a
consumer-acceptable level of cleaning
performance.
DOE further references its
investigatory testing data that was
presented in the January 2022
Preliminary Analysis, which
demonstrated that standard-size
dishwashers within the test sample
could achieve the threshold cleaning
performance finalized in the January
2023 TP Final Rule at all soil levels for
efficiency levels up to EL 3. DOE also
notes that feedback from some
manufacturers during confidential
interviews indicates that the adopted
standards are achievable without
impacting consumer utility.
Additionally, DOE identified
dishwasher models that are certified as
2024 ENERGY STAR Most Efficient, 136
which specifies equivalent cleaning
performance requirements as appendix
C2 but has more stringent water and
energy use criteria than the standards
adopted in this document. Some of
these models met or exceeded EL 4,
indicating that max-tech efficiency
dishwashers that can achieve the
threshold cleaning performance on the
normal cycle currently exist on the
market. In fact, DOE’s investigatory
testing data shows that the best
performing unit at all soil levels is a
unit that meets the adopted standard
level. DOE also did not observe any
correlation between cleaning indices
136 ENERGY STAR Most Efficient 2024.
‘‘Recognition Criteria Residential Dishwashers.’’
2024. Available online at www.energystar.gov/sites/
default/files/asset/document/Dishwasher%
20ENERGY%20STAR%20Most%20Efficient%
202024%20Final%20Criteria.pdf.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
and efficiency level in its test sample
and units that would meet the amended
standard have the same average cleaning
index across all soil levels as units that
would not meet the amended standard.
Furthermore, as previously discussed,
on February 14, 2024, DOE received a
second joint statement from the same
group of stakeholders that submitted the
Joint Agreement in which the
signatories reaffirmed the standards
recommended in the Joint
Agreement.137 In particular, the letter
states that there are more than 400
dishwasher models that are certified to
the current ENERGY STAR V. 7.0 level,
which is more stringent that the
standards recommended in the Joint
Agreement, that are also required to
meet a minimum cleaning index
threshold of 65. The signatories stated
that the prevalence of these ENERGY
STAR certified dishwashers indicated
that dishwashers meeting the
recommended standard levels can
provide cleaning performance at levels
consistent with those on the market
today.
Accordingly, DOE has concluded,
based not only on its newly adopted test
procedure, but also on confirmatory
testing data, confidential interviews,
and ENERGY STAR’s performance
requirements, that the standards
adopted here will not negatively impact
dishwasher performance.
CEI et al. commented that the
previous rulemakings affecting existing
energy and water efficiency measures
for dishwashers have already led to
widespread and well-documented
consumer dissatisfaction and that the
proposed rulemaking would exacerbate
the issues. (CEI et al., No. 48 at p. 2)
Whirlpool commented that it was
concerned with any amended
dishwashers energy conservation
standards beyond EL 1. Whirlpool
commented that the proposed rule
would lessen the utility and
performance of dishwashers, especially
as compared to consumer expectations
of dishwashers today, and the
experiences from past dishwashers that
consumers may have owned.
(Whirlpool, No. 45 at pp. 3, 4)
Whirlpool also commented that DOE
should not take any action that would
potentially degrade the performance or
lower the utility of dishwashers,
especially because dishwashers have
among the lowest household
penetration rates of any major appliance
in U.S. households. (Id. at p. 4)
Whirlpool also asserted that the new
137 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
PO 00000
Frm 00069
Fmt 4701
Sfmt 4700
31465
cleaning index requirement does not
adequately correlate to real-world
consumer satisfaction and that
consumers will perform compensatory
behaviors to make up for the loss in
cleaning performance. (Id. at p. 5)
Whirlpool stated that lowering the
energy and water consumption of a
dishwasher further will degrade
cleaning and drying performance for
consumers, and create negative rebound
effects, thus making it less attractive for
many consumers to own and use their
dishwashers. (Whirlpool, No. 45 at p. 6)
Whirlpool commented that DOE should
work collaboratively to increase overall
penetration of the already energy and
water efficient appliances but the
proposed rule may disincentivize
increased penetration and utilization as
dishwashers offer consumers lower
utility and performance benefits. (Id. at
p. 3)
AHAM asserted that further costeffective efficiency gains may threaten
performance and product functionality
as opportunities for additional energy
and water savings beyond those already
achieved are severely diminished as
products are near maximum efficiency
under available technology. (AHAM,
No. 51 at pp. 1–2) AHAM noted that
while DOE does account for the
cleaning performance outcome, DOE
does not account for the relationship of
cleaning performance to other
performance elements in the dishwasher
system including washing temperatures,
length of washing cycles, types and
amounts of detergent applied, and
mechanics (power). (Id. at pp. 10–11)
AHAM commented that reducing one
aspect of wash performance, such as
energy or water, can lead to an impact
on these other performance elements.
(Id. at p. 11) AHAM commented that the
test procedure’s cleaning performance
metric ignores all performance aspects
other than cleaning performance.
AHAM stated that AHAM DW–2–2020,
which DOE proposed to use in appendix
C2 for the determination of cleaning
performance was primarily designed to
address performance in terms of
redeposition of soils and the soils were
selected with that in mind. AHAM
stated that AHAM DW–2–2020 does not
assess greasy or detergent buildup over
time, which it stated is an issue for the
majority of dishwasher users who prerinse their dishes. AHAM also
commented that the test procedure does
not address other elements of
performance such as drying
performance, cycle length, and noise.
(Id.) AHAM stated that some of these
performance factors, such as wash
temperature, cannot be lowered
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31466
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
indefinitely because the wash
temperature must be warm enough to
activate the detergent and remove fatty
soils, otherwise the dishwasher would
lose its utility. AHAM stated that water
heating is the biggest contributor to
energy use and once water heating
energy is reduced as much as possible,
it leaves fewer options for
manufacturers to consider other than
lengthening cycles, reducing drying
performance or eliminating drying
altogether, or increasing the noise level
of the dishwasher to allow for greater
power, in order to maintain cleaning
performance while also meeting more
stringent standards. (Id.) AHAM
asserted that by requiring energy and
water levels and a cleaning performance
level, DOE could force manufacturers to
design dishwashers that satisfy DOE’s
test procedure requirements but do not
satisfy consumers on all factors,
including cleaning performance.
Therefore, AHAM stated that DOE must
assess the impact of its proposed
standards from a more holistic
perspective. (Id.) AHAM recommended
that DOE issue a NODA or other notice
that would provide data on the impact
of these standards on performance and
provide interested parties with an
opportunity to comment. (Id.)
Sub-Zero asserted that any standard
beyond ENERGY STAR V. 6.0 (i.e., EL
1) will force manufacturers to make
significant design changes that lower a
dishwasher’s cleaning performance
scores. Sub-Zero also asserted that the
levers of performance and energy
consumption have already been working
against each other for years via serial
rulemakings on dishwashers, but with
the proposed standards, its consumers
would be the most disappointed based
on the consumer purchase price versus
consumer expectations correlation.
(Sub-Zero, No. 47 at p. 1)
CEI et al. stated that DOE has violated
the ‘‘features provision’’ of EPCA, which
prohibits setting an efficiency standard
so stringent that it would sacrifice any
desired product characteristics. CEI et
al. asserted that by DOE’s own
admission, DOE has imposed standards
on dishwashers that increase cycle
times. (CEI et al., No. 48 at p. 3) CEI et
al. also asserted that previous efficiency
standards have led to other drawbacks
by negatively affecting dishwasher
reliability and durability, adversely
impact cleaning performance, and
undermining drying performance. (Id. at
p. 4) CEI et al. additionally asserted that
DOE’s proposed rulemaking would
exacerbate these issues and therefore
would violate EPCA’s features
provision. (Id. at p. 5)
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
DOE does not anticipate that
significant design changes will be
necessary for standard-size dishwashers
to reach EL 2 because DOE’s teardown
analysis, described in chapter 5 of the
direct final rule TSD, showed that
existing products at EL 2 utilize the
same design options as those at EL 1
with improved control strategies.
Improved control strategies would allow
manufacturers to more closely control
water temperature and water fill
volumes, thereby optimizing the wash
cycle and minimizing losses. For these
reasons, DOE does not expect any
impact to utility or performance at the
standards adopted in this direct final
rule. As such, DOE’s analysis indicates
that it is possible to meet the adopted
standards in this direct final rule
without making significant design
changes and without impacting a
dishwasher’s cleaning performance or
other performance attributes, as
discussed further in this section
(regarding cleaning performance) and
sections IV.H.2 (regarding impact on
non-dishwasher cleaning patterns),
V.B.4.b (regarding drying performance),
and V.B.4.c (regarding cycle length) of
this document.
Furthermore, in this direct final rule,
DOE is adopting standards for
dishwashers that are consistent with the
standards recommended in the Joint
Agreement. Additionally, as previously
discussed, on February 14, 2024, DOE
received a second joint statement from
the same group of stakeholders that
submitted the Joint Agreement in which
the signatories reaffirmed the standards
recommended in the Joint Agreement,
and stated that they would not
negatively affect features or
performance, including cycle times.138
reduce consumer satisfaction with
drying performance. (Id.)
In response to concerns over drying
performance, DOE expects existing
drying options would continue to be
available on dishwashers regardless of
amended standards up to at least EL 3
because there are no unique drying
technologies at EL2 and EL3. In the May
2023 NOPR TSD as well as in this final
rule, DOE noted that dishwasher models
could reach EL 2 or EL 3 with the same
drying technology options on the
regulated cycle as at EL 1 (see chapter
5 of this final rule TSD). DOE expects
that any amended standards up to at
least EL 3 would not stifle innovation
around drying options and other
features that could be implemented on
dishwashers outside the regulated cycle.
Furthermore, as previously discussed,
on February 14, 2024, DOE received a
second joint statement from the same
group of stakeholders that submitted the
Joint Agreement (including AHAM, of
which Whirlpool is a member) in which
the signatories reaffirmed the standards
recommended in the Joint
Agreement.139 In particular, the letter
states that the stakeholders do not
anticipate the recommended standards
will negatively affect features, which
DOE assumes would also include drying
performance.
b. Drying Performance
Whirlpool asserted that DOE’s
proposed standards for dishwashers will
be difficult for manufacturers to meet
while meeting consumer demand for
dishwashers capable of drying dishes
thoroughly. (Whirlpool, No. 45 at p. 5)
Whirlpool stated that the low final rinse
temperatures and shorter heated drying
durations that would be required to
meet stringent energy conservation
standards beyond EL 1 would make it
increasingly difficult to completely dry
all items in the dishwasher. Whirlpool
stated that DOE must not set standards
beyond EL 1, which would further
reduce the total allowable energy usage
that manufacturers can dedicate to
effective drying performance and further
c. Cycle Length
CEI et al. stated that given the long
cycle times and other issues with
dishwashers traceable to current
standards, this is the proper regulatory
avenue that DOE should be pursuing.
CEI et al. commented that DOE should
be fixing the problems with existing
dishwasher standards rather than
making them worse with the proposed
rule. CEI et al. stated DOE has
previously taken steps to address longer
cycle times, but the efforts were
reversed. CEI et al. commented that
corrective rulemakings should be
revived and expanded to include all
performance-related features that have
been impacted by past dishwashers
regulations. (CEI et al., No. 48 at pp. 7–
8) CEI et al. commented that compliance
with EPCA is best served by DOE
regulations that address the consumer
problems with dishwashers, not ones
that exacerbate these problems. (Id.)
In this rulemaking, DOE considered
dishwasher performance, including
comments raised about cycle times. In
the January 2022 Preliminary TSD, DOE
provided data from its investigatory
testing sample that determined cycle
138 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
139 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
PO 00000
Frm 00070
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
time is not substantively correlated with
energy and water consumption of the
normal cycle. (See section 5.9 of the
January 2022 Preliminary TSD).
Additionally, the adopted standards are
applicable to the regulated cycle type
(i.e., normal cycle); manufacturers can
continue to provide additional, nonregulated cycle types (e.g., quick cycles,
pots and pans, heavy, delicates, etc.) for
consumers that choose to utilize them.
Specifically, DOE expects quick cycles,
many of which clean a load within 1
hour or less would still be available on
dishwasher models that currently offer
such cycle types. DOE has determined
that the adopted standards in this direct
final rule are compliant with the
applicable provisions of EPCA.
Additionally, in this direct final rule,
DOE is adopting standards for
dishwashers that are consistent with the
standards recommended in the Joint
Agreement, which do not apply to any
short-cycle product classes. Further, as
previously discussed, on February 14,
2024, DOE received a second joint
statement from the same group of
stakeholders that submitted the Joint
Agreement in which the signatories
reaffirmed the standards recommended
in the Joint Agreement.140 In particular,
the signatories acknowledge that DOE’s
investigative testing shows that cycle
times at the recommended levels for
dishwashers are the same as
dishwashers on the market today.
Finally, as noted previously, the Fifth
Circuit Court of Appeals recently
remanded to DOE the January 2022 Rule
for further consideration. As noted
elsewhere in this document, DOE has
published an RFI regarding short-cycle
products. 89 FR 17338.
d. Water Dilution
Whirlpool commented that water
dilution and soil and detergent
redeposition remain an issue under
amended standards beyond EL 1, and
that DOE does not cite new technology
in its supporting analysis to indicate
that this problem will be resolved.
(Whirlpool, No. 45 at p. 5) As a result,
Whirlpool asserted that according to its
own test data, dishwasher cleaning
performance will degrade under the
proposed standards. (Id.)
As noted in the May 2023 NOPR,
while DOE recognizes that poor water
dilution can impact cleaning
performance, as mentioned elsewhere in
this document (as well as the May 2023
NOPR and January 2022 Preliminary
TSD), DOE’s testing and analysis
140 This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD0039-0059.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
indicates that satisfactory cleaning
performance is achievable at all
efficiencies. (See 88 FR 32514, 32533–
32534 and chapter 5 of the May 2023
NOPR TSD and January 2022
Preliminary TSD). Additionally, the
minimum cleaning index threshold
requirement specified in the new
appendix C2 ensures that cleaning
performance will be maintained after
the compliance date of any new
standards.
e. Equipment Lifetime and Energy
Savings
CEI et al. commented that the reduced
useful life of compliance models is also
environmentally detrimental, as it
results in greater energy and other
resources going into the manufacturing
and disposal of dishwashers. (CEI et al.,
No. 48 at p. 7)
DOE determines the lifetime of
dishwashers from an analysis of
historical shipments, AHS and RECS
data. See section IV.F.6 of this
document for more information. No
publicly available data show that the
lifetime of a dishwasher is correlated
with its efficiency level.
Zycher asserted that energy savings
per se are not relevant analytically
because the economic benefits of energy
savings are captured fully by purchasers
of such appliances. Further, Zycher
commented that there is no externality
attendant upon energy consumption per
se, and if energy savings are to be
considered relevant for purpose of
benefit/cost analysis, then the adverse
effects or costs of reduction in energy
consumption in terms of the quality of
dishwasher performance in the context
of this proposed rule must be included
in the analysis. (Zycher, No. 49 at p. 3)
Zycher also asserted that DOE’s
estimates of the annual cost savings are
subject to uncertainty and the asserted
benefits are so small that that from an
analytical standpoint they cannot be
regarded as benefits at all. Zycher
further asserted that the proposed rule
would force consumers to change their
purchase choices in ways that have not
and would not be observed in the
absence of the proposed rule. Zycher
commented that this demonstrates that
the energy cost savings, even if the
underlying calculations are accepted,
must be accompanied by some explicit
or implicit costs in terms of forgone
quality dimensions of dishwasher
performance, the value of which must
be greater than the value of the
purported energy cost savings. (Id. at p.
4)
In regard to the purported adverse
effects of reduction in energy
consumption in terms of the quality of
PO 00000
Frm 00071
Fmt 4701
Sfmt 4700
31467
dishwasher performance, DOE does not
expect any rebound effect due to
reduced energy and water consumption
in the standards case. More detailed
discussion can be found in section
IV.H.2 of this document regarding the
rebound effect and in section V.B.4.a of
this document regarding the standards’
impact on the cleaning performance.
In response to comments regarding
the significance of annualized LCC
savings, as described in section IV.E of
this document, DOE’s LCC analysis
captures the variability of consumer’s
life cycle costs. For example, DOE’s
energy and water use analysis relied on
RECS 2020, which provides sample
household’s dishwasher usage
frequency information ranging from one
to 21 cycles per week. DOE also
considered the variability of energy and
water costs based on the sample
household’s geographic location, as well
as the range of product lifetime. Taking
into account the variability of those
inputs allows DOE to observe the full
range of LCC savings and to understand
the distribution of results, enabling a
more informed evaluation of the
potential impact of the adopted
standards. DOE presents all statistic
results of LCC savings in chapter 8 of
the direct final rule TSD. Based on the
LCC savings estimates of 10,000
household samples, 97 percent of the
sample households would either not be
affected (11 percent) or experience a
positive savings (86 percent). The
weighted average LCC savings are $17
for the selected TSL which is
significantly different from zero. In
addition, DOE’s decision on amended
standards is not solely determined by
LCC savings. While they play an
important role, they may be considered
alongside other critical factors,
including the percentage of negatively
impacted consumers, the simple
payback period, and the overall impact
on the manufacturers.
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.d of this
document, EPCA directs the Attorney
General of the United States (‘‘Attorney
General’’) to determine the impact, if
any, of any lessening of competition
likely to result from a proposed
standard and to transmit such
determination in writing 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. To assist the
Attorney General in making this
E:\FR\FM\24APR3.SGM
24APR3
31468
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
determination, DOE is providing DOJ
with copies of the direct final rule and
the TSD for review.
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 of the
direct final rule TSD presents the
estimated impacts on electricity
generating capacity, relative to the nonew-standards case, for the TSLs that
DOE considered in this rulemaking.
Energy conservation resulting from
potential energy conservation standards
for dishwashers is expected to yield
environmental benefits in the form of
reduced emissions of certain air
pollutants and greenhouse gases. Table
V.19 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 III.C of
this document. DOE reports annual
emissions reductions for each TSL in
chapter 13 of the direct final rule TSD.
BILLING CODE 6450–01–P
Table V.19 Cumulative Emissions Reduction for Dishwashers Shipped During the
Period 2027-2056
Trial Standard Level
1
2
4
3
Electric Power Sector Emissions
2.06
2.80
8.43
9.17
0.06
0.09
0.36
0.40
0.01
0.oI
0.05
0.06
1.49
0.16
0.27
1.37
2.26
6.01
1.72
6.55
0.01
0.01
0.00
0.00
Upstream Emissions
0.28
0.38
1.06
1.15
26.65
35.44
98.60
l07.40
0.00
0.00
0.00
0.00
0.01
0.04
0.04
0.oI
4.37
16.36
17.82
5.83
0.00
0.00
0.00
0.00
Total FFC Emissions
2.34
3.18
9.48
l0.33
26.70
35.53
98.97
l07.80
0.01
0.oI
0.06
0.06
1.41
0.16
0.28
1.53
22.37
24.37
6.09
8.09
0.01
0.01
0.00
0.00
CO2 (million metric tons)
CHi (thousand tons)
N2O (thousand tons)
SO2 (thousand tons)
NOx (thousand tons)
Hg (tons)
CO2 (million metric tons)
CHi (thousand tons)
N2O (thousand tons)
SO2 (thousand tons)
NOx (thousand tons)
Hg (tons)
khammond on DSKJM1Z7X2PROD with RULES3
As part of the analysis for this rule,
DOE estimated monetary benefits likely
to result from the reduced emissions of
CO2 that DOE estimated for each of the
considered TSLs for dishwashers.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
Section IV.L of this document discusses
the estimated SC–CO2 values that DOE
used. Table V19 presents the value of
CO2 emissions reduction at each TSL for
each of the SC–CO2 cases. The time-
PO 00000
Frm 00072
Fmt 4701
Sfmt 4700
34.54
1.48
0.22
5.59
24.70
0.03
4.35
404.81
0.01
0.15
67.16
0.00
38.89
406.30
0.23
5.73
91.86
0.03
series of annual values is presented for
the Recommended TSL in chapter 14 of
the direct final rule TSD.
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.044</GPH>
CO2 (million metric tons)
CHi (thousand tons)
N2O (thousand tons)
SO2 (thousand tons)
NOx (thousand tons)
Hg (tons)
5
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31469
Table V.20 Present Value of CO2 Emissions Reduction for Dishwashers Shipped
During the Period 2027-2056
TSL
SC-CO2 Case
Discount Rate and Statistics
2.5%
3%
Average
Average
Million 2022$
98.2
153.5
133.7
209.0
400.3
625.1
435.9
680.6
1,641.3
2,563.1
5%
Average
1
2
3
4
5
23.0
31.3
94.1
102.4
385.7
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 dishwashers. Table
V.21 presents the value of the CH4
emissions reduction at each TSL, and
Table V.22 presents the value of the N2O
emissions reduction at each TSL. The
3%
95 th percentile
297.9
405.7
1,214.6
1,322.4
4,979.8
time-series of annual values is presented
for the Recommended TSL in chapter 14
of the direct final rule TSD.
Table V.21 Present Value of Methane Emissions Reduction for Dishwashers
Shipped During the Period 2027-2056
TSL
5%
Averae:e
1
2
3
4
5
12.2
16.3
45.4
49.4
186.2
SC-CH4 Case
Discount Rate and Statistics
3%
2.5%
Averae:e
Averae:e
Million 2022$
36.3
50.6
48.3
67.3
134.6
187.6
146.6
204.3
552.7
770.0
3%
95 th percentile
96.0
127.8
356.2
387.9
1,462.2
Table V.22 Present Value of Nitrous Oxide Emissions Reduction for Dishwashers
Shipped During the Period 2027-2056
SC-N20 Case
Discount Rate and Statistics
2.5%
3%
Average
Average
Million 2022$
0.1
0.2
0.2
0.3
1.3
0.9
0.9
1.4
3.5
5.4
0.0
0.1
0.2
0.2
0.9
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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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,
however, that the adopted standards
would be economically justified even
PO 00000
Frm 00073
Fmt 4701
Sfmt 4700
0.4
0.6
2.3
2.5
9.3
without inclusion of monetized benefits
of reduced GHG emissions.
DOE also estimated the monetary
value of the economic benefits
associated with NOX and SO2 emissions
reductions anticipated to result from the
considered TSLs for dishwashers. The
dollar-per-ton values that DOE used are
discussed in section IV.L of this
document. Table V.23 presents the
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.047</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
1
2
3
4
5
3%
95 th percentile
ER24AP24.046</GPH>
Average
ER24AP24.045</GPH>
5%
TSL
31470
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
present value for NOX emissions
reduction for each TSL calculated using
7-percent and 3-percent discount rates,
and Table V.24 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 Recommended TSL in chapter 14
of the direct final rule TSD.
Table V.23 Present Value ofNOx Emissions Reduction for Dishwashers Shipped
During the Period 2027-2056
TSL
7% Discount Rate
1
2
3
4
5
83.6
113.5
336.5
366.3
1,379.9
3% Discount Rate
million 2022$
214.1
290.0
853.5
929.3
3,500.2
Table V.24 Present Value of SO2 Emissions Reduction for Dishwashers Shipped
During the Period 2027-2056
TSL
1
2
3
4
5
7% Discount Rate
3%
I
million 2022$
3.4
6.4
35.1
38.1
142.7
8.3
15.7
85.9
93.3
349.2
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.
ER24AP24.049</GPH>
8. Summary of Economic Impacts
Table V.25 presents the NPV values
that result from adding the estimates of
the 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 dishwashers,
and are measured for the lifetime of
products shipped during the period
2027–2056. 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 dishwashers
shipped during the period 2027–2056.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00074
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.048</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
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.
Discount Rate
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31471
Table V.25 Consumer NPV Combined with Present Value of Climate Benefits and
Health Benefits
TSL 1
TSL2
TSL3
TSL4
TSLS
Cate2ory
Using 3% discount rate for Consumer NPVand Health Benefits
(billion 2022$1
5% Average SC-GHG
0.4
0.6
4.0
4.1
case
3% Average SC-GHG
4.4
4.6
0.5
0.7
case
2.5% Average SC-GHG
0.6
0.8
4.7
4.9
case
3% 95th percentile SC1.1
5.4
5.7
0.8
GHGcase
Using 7% discount rate for Consumer NPV and Health Benefits
(billion 2022$
5% Average SC-GHG
0.2
0.2
1.7
1.8
case
3% Average SC-GHG
0.3
0.3
2.1
2.2
case
2.5% Average SC-GHG
2.4
2.5
0.3
0.4
case
3% 95th percentile SC0.5
0.7
3.2
3.3
GHGcase
khammond on DSKJM1Z7X2PROD with RULES3
C. Conclusion
When considering new or amended
energy conservation standards, the
standards that DOE adopts for any type
(or class) of covered dishwasher 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
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 direct final rule, DOE
considered the impacts of amended
standards for dishwashers at each TSL,
beginning with the maximum
technologically feasible level, to
determine whether that level was
economically justified. Where the maxtech 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.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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
PO 00000
Frm 00075
Fmt 4701
Sfmt 4700
(14.1)
(12.9)
(9.8)
(10.1)
(8.5)
(7.3)
(4.2)
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 forego 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. Second, DOE
accounts for energy and water 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 and
water savings from an energy
conservation standard. DOE provides
estimates of shipments and changes in
the volume of product purchases in
chapter 9 of the direct final rule 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
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.050</GPH>
BILLING CODE 6450–01–C
(15.7)
31472
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
sensitivity variation according to
household income.141
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
khammond on DSKJM1Z7X2PROD with RULES3
141 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
17:42 Apr 23, 2024
Jkt 262001
estimated in the regulatory process.142
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. General
considerations for consumer welfare
and preferences as well as the special
cases of complementary goods are areas
DOE plans to explore in a forthcoming
RFI related to the agency’s updates to its
overall analytic framework.
1. Benefits and Burdens of TSLs
Considered for Dishwashers Standards
Table V.26 and Table V.27 summarize
the quantitative impacts estimated for
142 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 July 1, 2021).
PO 00000
Frm 00076
Fmt 4701
Sfmt 4700
each TSL for dishwashers. The national
impacts are measured over the lifetime
of dishwashers purchased in the 30-year
period that begins in the anticipated
year of compliance with amended
standards (2027–2056). The energy
savings, emissions reductions, and
value of emissions reductions refer to
full-fuel-cycle results. The consumer
operating savings are inclusive of energy
and water. DOE is presenting monetized
benefits of GHG emissions reductions in
accordance with the applicable
Executive Orders and DOE would reach
the same conclusion presented in this
notice in the absence of the social cost
of greenhouse gases, including the
Interim Estimates presented by the IWG.
The efficiency levels contained in each
TSL are described in section V.A of this
document.
BILLING CODE 6450–01–P
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31473
Table V.26 Summary of Analytical Results for Dishwashers TSLs: National
Impacts
TSLS
1.28
0.92
38.89
406.30
0.23
91.86
5.73
0.03
1.75
2.20
3.85
7.80
21.87
(20.12)
(14.08)
0.68
2.20
1.52
4.40
12.86
(12.18)
(8.46)
Note: This table presents the costs and benefits associated with dishwashers shipped during the period
2027-2056. These results include benefits to consumers which accrue after 2056 from the products
shipped during the period 2027-2056.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CHi 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; however, DOE emphasizes
the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
To monetize the benefits ofreducing 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.
** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only
monetizing (for NOx and SO2) PM2.s 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.s 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.
t 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 3percent discount rate.
t Costs include incremental equipment costs as well as installation costs.
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00077
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.051</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Category
TSLl
TSL2
TSL3
TSL4
Cumulative FFC National Energy Savings
Quads
0.31
0.34
0.05
0.08
Cumulative Water Savings
Trillion gallons
0.11
0.24
0.09
0.26
Cumulative FFC Emissions Reduction
2.34
10.33
CO2 (million metric
3.18
9.48
tons)
CI!i (thousand tons)
26.70
35.53
98.97
107.80
N2O (thousand tons)
0.01
0.01
0.06
0.06
NOx (thousand tons)
6.09
8.09
22.37
24.37
SO2 (thousand tons)
0.28
1.41
0.16
1.53
Hg (tons)
0.00
0.00
0.01
0.01
Present Value of Monetized Benefits and Costs (3% discount rate, billion 2022$)
Consumer Operating
0.43
0.63
3.16
3.36
Cost Savings
Climate Benefits*
0.54
0.13
0.18
0.58
Health Benefits**
0.22
0.31
0.94
1.02
Total Benefitst
1.12
4.64
4.97
0.79
Consumer Incremental
0.26
0.41
0.26
0.41
Product Costst
Consumer Net Benefits
0.17
0.22
2.90
2.95
4.56
Total Net Benefits
0.71
4.38
0.53
Present Value of Monetized Benefits and Costs (7% discount rate, billion 2022$)
Consumer Operating
0.18
0.27
1.38
1.46
Cost Savings
Climate Benefits*
0.54
0.13
0.18
0.58
Health Benefits**
0.09
0.12
0.37
0.40
Total Benefitst
0.41
2.29
2.45
0.57
Consumer Incremental
0.15
0.24
0.15
0.24
Product Costst
Consumer Net Benefits
1.23
1.23
0.03
0.03
Total Net Benefits
0.25
0.33
2.13
2.21
31474
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table V.27 Summary of Analytical Results for Dishwashers TSLs: Manufacturer
and Consumer Impacts
Category
TSL 1
TSL2
TSL3
Manufacturer Impacts
Industry NPV (million
2022$) (No-new680.8 to
673.7 to
587.1 to 639.1
standards case INPV =
729.7
723.3
735.8)
Industry NPV (%
(20.2) to
(7.5) to (0.8) (8.4) to (1.7)
change)
(13.1)
Consumer Average LCC Savings (2022$)
PC 1: Standard-size
$5
$5
$17
dishwashers
PC 2: Compact-size
$4
$32
$32
dishwashers
Shipment-Weighted
$5
$4
$17
Average *
Consumer Simple PBP (, ears)
PC 1: Standard-size
4.9
4.9
3.9
dishwashers
PC 2: Compact-size
0.0
5.5
0.0
dishwashers
Shipment-Weighted
4.8
4.9
3.8
Average *
Percent of Consumers that Experience a Net Cost
PC 1: Standard-size
4%
4%
3%
dishwashers
PC 2: Compact-size
0%
54%
0%
dishwashers
Shipment-Weighted
4%
5%
3%
Average *
TSL4
TSL5
579.9 to
632.8
334.4 to
414.6
(21.2) to
(14.0)
(54.5) to
(43.7)
$17
($145)
$4
$4
$16
($142)
3.9
15.9
5.5
5.5
3.9
15.7
3%
97%
54%
54%
4%
96%
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–C
DOE first considered TSL 5, which
represents the max-tech efficiency levels
for both product classes. Specifically,
for a standard-size dishwasher, this
efficiency level includes design options
considered at the lower efficiency levels
(i.e., electronic controls, soil sensors,
multiple spray arms, improved water
filters and control strategies, separate
drain pump, tub insulation, hydraulic
system optimization, water diverter
assembly, temperature sensor, 3-phase
variable-speed motor, and flow meter)
and condensation drying, including use
of a stainless steel tub; flow-through
heating implemented as an in-sump
integrated heater; and control strategies.
The majority of these design options
reduce both energy and water use
together.143 For a compact-size
143 As discussed previously in section IV.A.2 of
this document, because the energy used to heat the
water consumed by the dishwasher is included as
part of the EAEU energy use metric, technologies
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
dishwasher, this efficiency level
includes the design options considered
at the lower efficiency levels (i.e.,
improved control strategies) and
additionally includes the use of
permanent magnet motor, improved
filters, hydraulic system optimization,
heater incorporated into base of tub, and
reduced sump volume. Similar to
standard-size dishwashers, the majority
of these design options reduce both
energy and water use together. TSL 5
would save an estimated 1.28 quads of
energy and 0.92 trillion gallons of water,
an amount DOE considers significant.
Under TSL 5, the NPV of consumer
benefit (inclusive of both energy and
water) would be ¥$12.18 billion using
a discount rate of 7 percent, and
¥$20.12 billion using a discount rate of
3 percent.
that decrease water use also inherently decrease
energy use.
PO 00000
Frm 00078
Fmt 4701
Sfmt 4700
The cumulative emissions reductions
at TSL 5 are 38.89 Mt of CO2, 5.73
thousand tons of SO2, 91.86 thousand
tons of NOX, 0.03 tons of Hg, 406.30
thousand tons of CH4, and 0.23
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 5 is
$2.20 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions at TSL
5 is $1.52 billion using a 7-percent
discount rate and $3.85 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 5 is ¥$8.46 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.052</GPH>
Parentheses indicate negative(-) values. The entry "n.a." means not applicable because there is
no change in the standard at certain TSLs.
* Weighted by shares of each product class in total projected shipments in 2027.
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
NPV at TSL 5 is ¥$14.08 billion. The
estimated total NPV is provided for
additional information; however, DOE
primarily relies upon the NPV of
consumer benefits when determining
whether an amended standard level is
economically justified.
At TSL 5, the average LCC impact is
a loss of $145 for standard-size
dishwashers and a $4 savings for
compact-size dishwashers. The simple
payback period is 15.9 years for
standard-size dishwashers and 5.5 years
for compact-size dishwashers. The
fraction of consumers experiencing a net
LCC cost is 97 percent for standard-size
dishwashers and 54 percent for
compact-size dishwashers. Notably, for
the standard-size product class, which
as discussed represents 98 percent of
the market, TSL 5 (which includes EL
4 for this product class) would increase
the first cost by $178. This associated
increase in first cost at TSL 5 for
standard-size dishwashers could impact
the number of new shipments by
approximately less than 2 percent
annually due to consumers shifting to
extending the lives of their existing
dishwashers beyond their useful life,
repairing instead of replacing, or
handwashing their dishes. In the
national impact analysis, DOE modeled
a scenario where part of this 2-percent
of consumers forgoing the purchase of a
new dishwasher due to price increases
will substitute to handwashing. This
results in a small increase in energy and
water use, which is then subtracted
from the energy and water savings
projected to result from the amended
standards at TSL5.
For the low-income consumer group,
the average LCC impact is a loss of $29
for standard-size dishwashers and a
savings of $62 for compact-size
dishwashers. The simple payback
period is 6.6 years for standard-size
dishwashers and 2.3 years for compactsize dishwashers. The fraction of lowincome consumers experiencing a net
LCC cost is 46 percent for standard-size
dishwashers and 26 percent for
compact-size dishwashers. For the
senior-only households consumer
group, the average LCC impact is a loss
of $159 for standard-size dishwashers
and a loss of $14 for compact-size
dishwashers. The simple payback
period is 19.8 years for standard-size
dishwashers and 6.8 years for compactsize dishwashers. The fraction of senioronly consumers experiencing a net LCC
cost is 98 percent for standard-size
dishwashers and 62 percent for
compact-size dishwashers. For the
consumer sub-group of well-water
households, the average LCC impact is
a loss of $162 for standard-size
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
dishwashers and a loss of $19 for
compact-size dishwashers. The simple
payback period is 21.4 years for
standard-size dishwashers and 6.9 years
for compact-size dishwashers. The
fraction of well-water consumers
experiencing a net LCC cost is 98
percent for standard-size dishwashers
and 63 percent for compact-size
dishwashers.
At TSL 5, the projected change in
INPV ranges from a decrease of $334.4
million to a decrease of $414.6 million,
which corresponds to decreases of 54.5
percent and 43.7 percent, respectively.
Industry conversion costs could reach
$681.0 million at this TSL, as
manufacturers work to redesign their
portfolios of model offerings, transition
their standard-size dishwasher
platforms entirely to stainless steel tubs,
and renovate manufacturing facilities to
accommodate changes to the production
line and manufacturing processes.
DOE estimates that less than 1 percent
of dishwasher shipments currently meet
the max-tech levels. Standard-size
dishwashers account for approximately
98 percent of annual shipments. Of the
19 standard-size dishwasher OEMs,
only one OEM, which accounts for
approximately 2 percent of basic models
in the CCD, currently offers products
that meet the max-tech efficiencies
required. All manufacturers
interviewed, which together account for
approximately 90 percent of the
industry shipments, expressed
uncertainty as to whether they could
reliably meet the standard-size
dishwasher max-tech efficiencies and
the cleaning performance threshold and
noted meeting max-tech would require
a platform redesign and significant
investment in tooling, equipment, and
production line modifications. Many
manufacturers would need to increase
production capacity of stainless steel
tub designs. Some manufacturers noted
that a max-tech standard could
necessitate new tub architectures.
For compact-size dishwashers, which
account for the remaining 2 percent of
annual shipments, DOE estimates that
14 percent of shipments currently meet
the required max-tech efficiencies. Of
the five compact-size dishwasher OEMs,
two OEMs currently offer compact-size
products that meet max-tech. At TSL 5,
compact-size countertop dishwashers
with four or more place settings and insink dishwashers with less than four
place settings are not currently available
in the market. Meeting TSL 5 is
technologically feasible for those
products; however, DOE expects that it
would take significant investment
relative to the size of the compact-size
PO 00000
Frm 00079
Fmt 4701
Sfmt 4700
31475
dishwasher market to redesign products
to meet the max-tech efficiencies.
Based on the above considerations,
the Secretary concludes that at TSL 5 for
dishwashers, the benefits of energy and
water savings, emissions reductions,
and the estimated monetary value of the
health benefits and climate benefits
from emissions reductions would be
outweighed by the negative NPV of
consumer benefits and the impacts on
manufacturers, including the large
potential reduction in INPV. At TSL 5,
a majority of standard-size dishwasher
consumers (97 percent) would
experience a net cost and the average
LCC loss is $145 for this product class.
Additionally, at TSL 5, manufacturers
would need to make significant upfront
investments to redesign product
platforms and update manufacturing
facilities. Some manufacturers
expressed concern that they would not
be able to complete product and
production line updates within the 3year conversion period. Consequently,
the Secretary has concluded that TSL 5
is not economically justified.
DOE next considered TSL 4, which
represents the highest efficiency levels
providing positive LCC savings. TSL 4
comprises the gap-fill efficiency level
between the ENERGY STAR V. 7.0 level
and the ENERGY STAR V. 6.0 level (EL
2) for standard-size dishwashers and the
max-tech efficiency level for compactsize dishwashers. Specifically, for a
standard-size dishwasher, this
efficiency level includes design options
considered at the lower efficiency levels
(i.e., electronic controls, soil sensors,
multiple spray arms, improved water
filters, separate drain pump, and tub
insulation) and additionally includes
the use of improved control strategies.
For a compact-size dishwasher, this
efficiency level includes the design
options considered at the lower
efficiency levels (i.e., improved control
strategies) and additionally includes the
use of a permanent magnet motor,
improved filters, hydraulic system
optimization, heater incorporated into
base of tub, and reduced sump volume.
The majority of these design options for
both standard-size and compact-size
dishwashers reduce both energy and
water use together. TSL 4 would save an
estimated 0.34 quads of energy and 0.26
trillion gallons of water, an amount DOE
considers significant. Under TSL 4, the
NPV of consumer benefit (inclusive of
energy and water) would be $1.23
billion using a discount rate of 7
percent, and $2.95 billion using a
discount rate of 3 percent.
The cumulative emissions reductions
at TSL 4 are 10.33 Mt of CO2, 1.53
thousand tons of SO2, 24.37 thousand
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
31476
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
tons of NOX, 0.01 tons of Hg, 107.80
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 4 is
$0.58 billion. The estimated monetary
value of the health benefits from
reduced SO2 and NOX emissions at TSL
4 is $0.40 billion using a 7-percent
discount rate and $1.02 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 $2.21 billion.
Using a 3-percent discount rate for all
benefits and costs, the estimated total
NPV at TSL 4 is $4.56 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.
At TSL 4, the average LCC impact is
a savings of $17 for standard-size
dishwashers and $4 for compact-size
dishwashers. The simple payback
period is 3.9 years for standard-size
dishwashers and 5.5 years for compactsize dishwashers. The fraction of
consumers experiencing a net LCC cost
is 3 percent for standard-size
dishwashers and 54 percent for
compact-size dishwashers.
For the low-income consumer group,
the average LCC impact is a savings of
$21 for standard-size dishwashers and
$62 for compact-size dishwashers. The
simple payback period is 1.6 years for
standard-size dishwashers and 2.3 years
for compact-size dishwashers. The
fraction of low-income consumers
experiencing a net LCC cost is 2 percent
for standard-size dishwashers and 26
percent for compact-size dishwashers.
For the senior-only households
consumer group, the average LCC
impact is a savings of $13 for standardsize dishwashers and a loss of $14 for
compact-size dishwashers. The simple
payback period is 4.9 years for standardsize dishwashers and 6.8 years for
compact-size dishwashers. The fraction
of senior-only consumers experiencing a
net LCC cost is 4 percent for standardsize dishwashers and 62 percent for
compact-size dishwashers. For the
consumer sub-group of well-water
households, the average LCC impact is
a savings of $12 for standard-size
dishwashers and a loss of $19 for
compact-size dishwashers. The simple
payback period is 5.5 years for standard-
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
size dishwashers and 6.9 years for
compact-size dishwashers. The fraction
of well-water consumers experiencing a
net LCC cost is 4 percent for standardsize dishwashers and 63 percent for
compact-size dishwashers.
At TSL 4, the projected change in
INPV ranges from a decrease of $155.9
million to a decrease of $103.1 million,
which corresponds to decreases of 21.2
percent and 14.0 percent, respectively.
Industry conversion costs could reach
$137.2 million at this TSL as some
manufacturers of standard-size
dishwashers redesign products to enable
improved controls and better design
tolerances and manufacturers of certain
compact-size dishwashers redesign
products to meet max-tech.
DOE estimates that approximately 10
percent of dishwasher shipments
currently meet the TSL 4 efficiencies, of
which approximately 9 percent of
standard-size dishwasher shipments
and 14 percent of compact-size
dishwasher shipments meet the
required efficiencies. Compared to maxtech, more manufacturers offer
standard-size dishwashers that meet the
required efficiencies. Furthermore, since
the May 2023 NOPR, more
manufacturers now offer standard-size
dishwasher models that meet the TSL 4
efficiencies. DOE believes that the
recent introduction of more highefficiency standard-size dishwashers is
largely in response to ENERGY STAR V.
7.0, which went into effect in July 2023.
Of the 19 OEMs offering standard-size
products, 16 OEMs offer products that
meet the efficiency level required. For
compact-size dishwashers, TSL 4
represents the same efficiency level as
for TSL 5. Just as with TSL 5, compactsize countertop dishwashers with four
or more place settings and in-sink
dishwashers with less than four place
settings are not currently available in
the market at TSL 4 levels. Meeting TSL
4 is technologically feasible for those
products; however, DOE expects that it
would take significant investment
(nearly $11 million) relative to the size
of the compact-size dishwasher market
(no-new-standards case INPV of $15.4
million) for them to meet the max-tech
efficiencies.
Based upon the above considerations,
the Secretary concludes that at TSL 4 for
dishwashers, the benefits of energy and
water savings, positive NPV of
consumer benefits, emission reductions,
and the estimated monetary value of the
health benefits and climate benefits
from emissions reductions would be
outweighed by negative LCC savings for
the senior-only households for the
compact-size dishwasher product class
and the high percentage of consumers
PO 00000
Frm 00080
Fmt 4701
Sfmt 4700
with net costs for the compact-size
dishwasher product class.
Consequently, the Secretary has
concluded that TSL 4 is not
economically justified.
DOE then considered the
Recommended TSL (i.e., TSL 3), which
comprises the gap-fill efficiency level
between the ENERGY STAR V. 7.0 level
and the ENERGY STAR V. 6.0 level (EL
2) for standard-size dishwashers and the
ENERGY STAR V. 6.0 level (EL 1) for
compact-size dishwashers. Specifically,
for a standard-size dishwasher, this
efficiency level includes design options
considered at the lower efficiency levels
(i.e., electronic controls, soil sensors,
multiple spray arms, improved water
filters, separate drain pump, and tub
insulation) and additionally includes
the use of improved control strategies.
For a compact-size dishwasher, this
efficiency level represents the use of
improved controls. The majority of
these design options for both standardsize and compact-size dishwashers
reduce both energy and water use
together. The Recommended TSL would
save an estimated 0.31 quads of energy
and 0.24 trillion gallons of water, an
amount DOE considers significant.
Under the Recommended TSL, the NPV
of consumer benefit (inclusive of energy
and water) would be $1.23 billion using
a discount rate of 7 percent, and $2.90
billion using a discount rate of 3
percent.
The cumulative emissions reductions
at the Recommended TSL are 9.48 Mt of
CO2, 1.41 thousand tons of SO2, 22.37
thousand tons of NOX, 0.01 tons of Hg,
98.97 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 the
Recommended TSL is $0.54 billion. The
estimated monetary value of the health
benefits from reduced SO2 and NOX
emissions at the Recommended TSL is
$0.37 billion using a 7-percent discount
rate and $0.94 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 the Recommended TSL is
$2.13 billion. Using a 3-percent
discount rate for all benefits and costs,
the estimated total NPV at the
Recommended TSL is $4.38 billion. The
estimated total NPV is provided for
additional information; however, DOE
primarily relies upon the NPV of
consumer benefits when determining
E:\FR\FM\24APR3.SGM
24APR3
khammond on DSKJM1Z7X2PROD with RULES3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
whether a proposed standard level is
economically justified.
At the Recommended TSL, the
average LCC impact is a savings of $17
for standard-size dishwashers and $32
for compact-size dishwashers. The
simple payback period is 3.9 years for
standard-size dishwashers and 0.0 years
for compact-size dishwashers. The
fraction of consumers experiencing a net
LCC cost is 3 percent for standard-size
dishwashers and 0 percent for compactsize dishwashers.
For the low-income consumer group,
the average LCC impact is a savings of
$21 for standard-size dishwashers and
$39 for compact-size dishwashers. The
simple payback period is 1.6 years for
standard-size dishwashers and 0.0 years
for compact-size dishwashers. The
fraction of low-income consumers
experiencing a net LCC cost is 2 percent
for standard-size dishwashers and 0
percent for compact-size dishwashers.
For the senior-only households
consumer group, the average LCC
impact is a savings of $13 for standardsize dishwashers and $26 for compactsize dishwashers. The simple payback
period is 4.9 years for standard-size
dishwashers and 0.0 years for compactsize dishwashers. The fraction of senioronly consumers experiencing a net LCC
cost is 4 percent for standard-size
dishwashers and 0 percent for compactsize dishwashers. For the consumer subgroup of well water households, the
average LCC impact is a savings of $12
for standard-size dishwashers and $23
for compact-size dishwashers. The
simple payback period is 5.5 years for
standard-size dishwashers and 0.0 years
for compact-size dishwashers. The
fraction of well water consumers
experiencing a net LCC cost is 4 percent
for standard-size dishwashers and 0
percent for compact-size dishwashers.
At the Recommended TSL, the
projected change in INPV ranges from a
decrease of $148.8 million to a decrease
of $96.7 million, which corresponds to
decreases of 20.2 percent and 13.1
percent, respectively. Industry
conversion costs could reach $126.9
million at this TSL as some
manufacturers redesign standard-size
products to enable improved controls
and better design tolerances.
DOE estimates that approximately 11
percent of dishwasher shipments
currently meet the Recommended TSL
efficiencies, of which approximately 9
percent of standard-size dishwasher
shipments and 87 percent of compactsize dishwasher shipments meet the
required efficiencies. At this level, the
decrease in conversion costs compared
to TSL 4 is entirely due to the lower
efficiency level required for compact-
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
size dishwashers, as the efficiency level
required for standard-size dishwashers
is the same as for TSL 4 (EL 2). All the
compact-size dishwasher OEMs
currently offer products that meet the
Recommended TSL. At this level, DOE
expects manufacturers of compact-size
dishwashers would implement
improved controls, which would likely
require minimal upfront investment.
After considering the analysis and
weighing the benefits and burdens, the
Secretary has concluded that a standard
set at the Recommended TSL for
dishwashers would be economically
justified. At this TSL, the shipments
weighted-average LCC savings for both
product classes is $17. The shipments
weighted-average share of consumers
with a net LCC cost for both product
classes is 3 percent. For all consumer
sub-groups, the LCC savings are positive
and the net share of consumers with a
net LCC cost is below 5 percent for both
product classes. The FFC national
energy and water savings are significant
and the NPV of consumer benefits is
$2.90 billion and $1.23 billion using
both a 3-percent and 7-percent discount
rate respectively. Notably, the benefits
to consumers vastly outweigh the cost to
manufacturers. At the Recommended
TSL, the NPV of consumer benefits,
even measured at the more conservative
discount rate of 7 percent, is over eight
times higher than the maximum
estimated manufacturers’ loss in INPV.
The standard levels at the
Recommended TSL are economically
justified even without weighing the
estimated monetary value of emissions
reductions. When those emissions
reductions are included—representing
$0.54 billion in climate benefits
(associated with the average SC–GHG at
a 3-percent discount rate), and $0.94
billion (using a 3-percent discount rate)
or $0.37 billion (using a 7-percent
discount rate) in health benefits—the
rationale becomes stronger still.
The adopted standards are applicable
to the regulated cycle type (i.e., normal
cycle) as specified by the DOE test
procedures; manufacturers can continue
to provide additional, non-regulated
cycle types (e.g., quick cycles, pots and
pans, heavy, delicates, etc.).
Specifically, DOE expects quick cycles,
many of which clean a load within 1
hour or less, and existing drying options
would still be available on dishwasher
models that currently offer such cycle
types. DOE has no information
suggesting that any aspect of this direct
final rule would limit the other cycle
options, especially quick cycles.
Additionally, in the January 2022
Preliminary TSD, DOE provided data
from its investigatory testing sample
PO 00000
Frm 00081
Fmt 4701
Sfmt 4700
31477
that determined cycle time is not
substantively correlated with energy
and water consumption of the normal
cycle.144 Based on these results, DOE
has determined that this direct final rule
would not have any substantive impact
to normal cycle durations.
The test procedure in appendix C2,
which includes provisions for a
minimum cleaning index threshold of
70 to validate the selected test cycle,
will go into effect at such time as
compliance is required with any
amended energy conservation
standards. At the Recommended TSL,
both standard-size and compact-size
dishwasher models achieving the
efficiencies, as measured by appendix
C2, including the cleaning performance
threshold, are readily available on the
market.
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 amended energy conservation
standards, DOE considers amended
standard levels for dishwashers by
grouping the efficiency levels for each
product class into TSLs and evaluates
all analyzed efficiency levels in its LCC
analysis and all efficiency levels with
positive LCC savings for the NIA and
MIA. For both standard-size and
compact-size dishwashers, the adopted
standard level represents the maximum
energy savings that do not result in a
large percentage of consumers
experiencing a net LCC cost. The
efficiency levels at the adopted standard
level result in positive LCC savings for
both product classes, significantly
reduce the number of consumers
experiencing a net cost, and reduce the
decrease in INPV and conversion costs
to the point where DOE has concluded
they are economically justified, as
discussed for the Recommended TSL in
the preceding paragraphs.
At the Recommended standard level
for the standard-size product class, the
average LCC savings are $17, the
percentage of consumers experiencing a
net cost is 3 percent (see Table V.3), and
144 See section 5.5.1 of the January 2022
Preliminary TSD. Available at www.energy.gov/
sites/default/files/2022-01/dw-tsd.pdf.
E:\FR\FM\24APR3.SGM
24APR3
31478
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
the FFC energy savings are 0.3 quads. At
the Recommended standard level for
compact-size product class, the average
LCC savings are $32 and there are no
consumers that would experience a net
cost. DOE concludes that there is
economic justification to adopt the
standards for standard-size and compact
size dishwashers independent of each
other.
Therefore, based on the previous
considerations, DOE adopts the energy
conservation standards for dishwashers
at the Recommended TSL.
While DOE considered each potential
TSL under the criteria laid out in 42
U.S.C. 6295(o) as discussed in the
preceding paragraphs, DOE notes that
the Recommended TSL for dishwashers
adopted in this direct final rule is part
of a multi-product Joint Agreement
covering six rulemakings (refrigerators,
refrigerator-freezers, and freezers;
miscellaneous refrigeration products;
consumer conventional cooking
products; residential clothes washers;
consumer clothes dryers; and
dishwashers). The signatories indicate
that the Joint Agreement for the six
rulemakings should be considered as a
joint statement of recommended
standards, to be adopted in its entirety.
As discussed in section V.B.2.e of this
document, many dishwasher OEMs also
manufacture refrigerators, refrigeratorfreezers, and freezers, miscellaneous
refrigeration products, consumer
conventional cooking products,
residential clothes washers, and
consumer clothes dryers. Rather than
requiring compliance with five
amended standards in a single year
(2027),145 the negotiated multi-product
Joint Agreement staggers the compliance
dates for the five amended standards
over a 4-year period (2027–2030). In
response to the May 2023 NOPR, AHAM
expressed concerns about the timing of
ongoing home appliance rulemakings.
Specifically, AHAM commented that
the combination of the stringency of
DOE’s proposals, the short lead-in time
required under EPCA to comply with
standards, and the overlapping
timeframe of multiple standards
affecting the same manufacturers
represents significant cumulative
regulatory burden for the home
appliance industry. (AHAM, No. 51 at
pp. 21–24) AHAM has submitted similar
comments to other ongoing consumer
product rulemakings.146 As AHAM is a
key signatory of the Joint Agreement,
DOE understands that the compliance
dates recommended in the Joint
Agreement would help reduce
cumulative regulatory burden. These
compliance dates help relieve concern
on the part of some manufacturers about
their ability to allocate sufficient
resources to comply with multiple
concurrent amended standards, about
the need to align compliance dates for
products that are typically designed or
sold as matched pairs, and about the
ability of their suppliers to ramp up
production of key components. The
Joint Agreement also provides
additional years of regulatory certainty
for manufacturers and their suppliers
while still achieving the maximum
improvement in energy efficiency that is
technologically feasible and
economically justified.
The amended energy conservation
standards for dishwashers, which are
expressed in EAEU and per-cycle water
consumption, shall not exceed the
values shown in Table V.28.
Table V.28 Amended Ener!!V Conservation Standards for Dishwashers
(kWh/year}*
(f<a//cycle)
223
3.3
174
3.1
The benefits and costs of the adopted
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 adopted standards
(consisting primarily of operating cost
savings from using less energy and
water), minus increases in product
purchase costs, and 2) the annualized
monetary value of the climate and
health benefits.
Table V.29 shows the annualized
values for dishwashers under the
Recommended TSL, 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 reductions, and the 3-percent
discount rate case for GHG social costs,
the estimated cost of the adopted
standards for dishwashers is $14.0
million per year in increased equipment
installed costs, while the estimated
annual benefits are $127.2 million from
reduced equipment operating costs,
$29.0 million in GHG reductions, and
$34.3 million from reduced NOX and
SO2 emissions. In this case, the net
benefit amounts to $176.4 million per
year.
Using a 3-percent discount rate for all
benefits and costs, the estimated cost of
the adopted standards for dishwashers
is $14.0 million per year in increased
equipment costs, while the estimated
145 The refrigerators, refrigerator-freezers, and
freezers (88 FR 12452); consumer conventional
cooking products (88 FR 6818); residential clothes
washers (88 FR 13520); consumer clothes dryers (87
FR 51734); and dishwashers (88 FR 32514) utilized
a 2027 compliance year for analysis at the proposed
rule stage. Miscellaneous refrigeration products (88
FR 12452) utilized a 2029 compliance year for the
NOPR analysis.
146 AHAM has submitted written comments
regarding cumulative regulatory burden for the
other five rulemakings included in the multiproduct Joint Agreement. AHAM’s written
comments on cumulative regulatory burden are
available at: www.regulations.gov/comment/EERE–
2017–BT–STD–0003–0069 (pp. 20–21) for
refrigerators, refrigerator-freezers, and freezers;
www.regulations.gov/comment/EERE–2020–BT–
STD–0039–0031 (pp. 12–15) for miscellaneous
refrigeration products; www.regulations.gov/
comment/EERE–2014–BT–STD–0005–2285 (pp. 44–
47) for consumer conventional cooking products;
www.regulations.gov/comment/EERE–2017–BT–
STD–0014–0464 (pp. 40–44) for residential clothes
washers; and www.regulations.gov/comment/EERE–
2014–BT–STD–0058–0046 (pp. 12–13) for consumer
clothes dryers.
2. Annualized Benefits and Costs of the
Adopted Standards
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00082
Fmt 4701
Sfmt 4700
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.053</GPH>
PC 1: Standard-size Dishwashers (2:
8 place settings plus 6 serving
pieces)
PC 2: Compact-size Dishwashers(<
8 place settings plus 6 serving
pieces)
* Based on appendix C2.
khammond on DSKJM1Z7X2PROD with RULES3
Per-Cycle Water
Consumption
Estimated Annual Energy Use
Product Class
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES3
annual benefits are $171.2 million in
reduced operating costs, $29.0 million
from GHG reductions, and $50.8 million
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
from reduced NOX and SO2 emissions.
PO 00000
In this case, the net benefit amounts to
$237.0 million per year.
BILLING CODE 6450–01–P
Frm 00083
Fmt 4701
Sfmt 4700
31479
E:\FR\FM\24APR3.SGM
24APR3
31480
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Table V.29 Annualized Benefits and Costs of Adopted Standards (the
Recommended TSL) for Dishwashers
Million 2022$/year
Category
Primary Estimate
Low-Net-Benefits
Estimate
High-Net-Benefits
Estimate
3% discount rate
175.8
171.2
164.1
29.3
29.0
28.3
51.3
50.8
49.6
256.4
251.0
242.0
13.2
14.0
17.0
243.1
237.0
224.9
(14) - (9)
(14) - (9)
(14) - (9)
7% discount rate
Consumer Operating Cost Savings
127.2
122.5
130.5
Climate Benefits*
29.0
28.3
29.3
Health Benefit**
34.3
34.5
33.5
Total Benefitst
194.3
190.5
184.3
Consumer Incremental Product Costs!
14.0
16.7
13.3
Net Monetized Benefits
176.4
167.6
181.0
(14) - (9)
(14) - (9)
(14) - (9)
Change in Producer Cashflow (INPV:t:t)
Note: This table presents the costs and benefits associated with dishwashers shipped during the period
2027-2056. These results include consumer, climate, and health benefits that accrue after 2056 from the
products shipped during the period 2027-2056. The Primary, Low Net Benefits, and High Net Benefits
Estimates utilize projections of energy prices from the AE02023 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 and IV.Hof 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; however, DOE emphasizes the importance and value of
considering the benefits calculated using all four sets ofSC-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 TWG.
** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only
monetizing (for SO2 and NOx) PM2.s 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.s emissions. See section IV.L of this document for more details.
t Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3percent discount rate.
t Costs include incremental equipment costs as well as installation costs.
U Operating Cost Savings are calculated based on the life-cycle cost analysis and national impact analysis
as discussed in detail below. See sections IV.F and IV.Hof 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., MIA). See section IV.J of this document. In the detailed MIA, DOE models
manufacturers' pricing decisions based on assumptions regarding investments, conversion costs, cashtlow,
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 8.5 percent that is estimated in the MIA (see
chapter 12 of the direct fmal rule TSD for a complete description of the industry weighted-average cost of
capital). For dishwashers, the change in INPV ranges from -$14 million to -$9 million. DOE accounts for
that range oflikely impacts in analyzing whether a trial standard level is economically justified. See section
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00084
Fmt 4701
Sfmt 4725
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.054</GPH>
khammond on DSKJM1Z7X2PROD with RULES3
Consumer Operating Cost Savings
Climate Benefits*
Health Benefit**
Total Benefitst
Consumer Incremental Product Costst
Net Monetized Benefits
Change in Producer Cashflow (INPV:t:t)
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
31481
V.C of this document. DOE is presenting the range of impacts to the INPV under two manufacturer 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 Tiered scenario, which models a
reduction of manufacturer markups due to reduced product differentiation as a result of amended standards.
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 direct fmal rule to society, including potential changes in production and consumption,
which is consistent with OMB's Circular A-4 and E.O. 12866. IfDOE were to include the INPV into the
annualized net benefit calculation for this direct fmal rule, the annualized net benefits would range from
$223 million to $228 million at 3-percent discount rate and would range from $163 million to $168 million
at 7-percent discount rate. Parentheses() indicate negative values.
VI. Severability
DOE added a new paragraph (3) into
section 10 CFR 430.32(f) to provide that
each energy and water conservation for
each dishwasher category is separate
and severable from one another, and
that if any energy or water conservation
standard is stayed or determined to be
invalid by a court of competent
jurisdiction, the remaining standards
shall continue in effect. This
severability clause is intended to clearly
express the Department’s intent that
should an energy or water conservation
standard for any product class be stayed
or invalidated, the other conservation
standards shall continue in effect. In the
event a court were to stay or invalidate
one or more energy or water
conservation standards for any product
class as finalized, the Department would
want the remaining energy or
conservation standards as finalized to
remain in full force and legal effect.
khammond on DSKJM1Z7X2PROD with RULES3
VII. Procedural Issues and Regulatory
Review
A. Review Under Executive Orders
12866, 13563, and 14094
Executive Order (‘‘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 (Apr. 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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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, OIRA in the
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 this
preamble, this final 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 final
regulatory action constitutes a
‘‘significant regulatory action’’ within
the scope of section 3(f) of E.O. 12866.
DOE has provided to OIRA an
assessment, including the underlying
analysis, of benefits and costs
anticipated from the final 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.
PO 00000
Frm 00085
Fmt 4701
Sfmt 4700
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 and a final regulatory flexibility
analysis 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-generalcounsel).
DOE is not obligated to prepare a
regulatory flexibility analysis for this
rulemaking because there is not a
requirement to publish a general notice
of proposed rulemaking under the
Administrative Procedure Act. See 5
U.S.C. 601(2), 603(a). As discussed
previously, DOE has determined that
the Joint Agreement meets the necessary
requirements under EPCA to issue this
direct final rule for energy conservation
standards for dishwashers under the
procedures in 42 U.S.C. 6295(p)(4). DOE
notes that the NOPR for energy
conservation standards for dishwashers
published elsewhere in this issue of the
Federal Register contains a regulatory
flexibility analysis.
C. Review Under the Paperwork
Reduction Act
Manufacturers of dishwashers 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 dishwashers, including
any amendments adopted for those test
E:\FR\FM\24APR3.SGM
24APR3
ER24AP24.055</GPH>
BILLING CODE 6450–01–C
31482
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
procedures. DOE has established
regulations for the certification and
recordkeeping requirements for all
covered consumer products and
commercial equipment, including
dishwashers. (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.
khammond on DSKJM1Z7X2PROD with RULES3
D. Review Under the National
Environmental Policy Act of 1969
Pursuant to the National
Environmental Policy Act of 1969
(‘‘NEPA’’), DOE has analyzed this
proposed action rule in accordance with
NEPA and DOE’s NEPA implementing
regulations (10 CFR part 1021). DOE has
determined that this rule qualifies for
categorical exclusion under 10 CFR part
1021, subpart D, appendix B5.1 because
it is a rulemaking that establishes energy
conservation standards for consumer
products or industrial equipment, none
of the exceptions identified in B5.1(b)
apply, no extraordinary circumstances
exist that require further environmental
analysis, and it meets the requirements
for application of a categorical
exclusion. See 10 CFR 1021.410.
Therefore, DOE has determined that
promulgation of this rule is not a major
Federal action significantly affecting the
quality of the human environment
within the meaning of NEPA, and does
not require an environmental
assessment or an environmental impact
statement.
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
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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 rule and
has 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
final 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 E.O. 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
PO 00000
Frm 00086
Fmt 4701
Sfmt 4700
the extent permitted by law, this direct
final 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, sec.
201 (codified at 2 U.S.C. 1531). For a
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
‘‘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.
DOE has concluded that this direct
final rule may require expenditures of
$100 million or more in any one year by
the private sector. Such expenditures
may include (1) investment in research
and development and in capital
expenditures by dishwashers
manufacturers in the years between the
direct final rule and the compliance
date for the new standards and (2)
incremental additional expenditures by
consumers to purchase higher-efficiency
dishwashers, starting at the compliance
date for the applicable standard.
Section 202 of UMRA authorizes a
Federal agency to respond to the content
requirements of UMRA in any other
statement or analysis that accompanies
the direct final rule. (2 U.S.C. 1532(c))
The content requirements of section
202(b) of UMRA relevant to a private
sector mandate substantially overlap the
economic analysis requirements that
apply under section 325(o) of EPCA and
Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of
this document and the TSD for this
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
direct final rule respond to those
requirements.
Under section 205 of UMRA, DOE is
obligated to identify and consider a
reasonable number of regulatory
alternatives before promulgating a rule
for which a written statement under
section 202 is required. (2 U.S.C.
1535(a)) DOE is required to select from
those alternatives the most cost-effective
and least burdensome alternative that
achieves the objectives of the rule
unless DOE publishes an explanation
for doing otherwise, or the selection of
such an alternative is inconsistent with
law. As required by 42 U.S.C. 6295(m),
this direct final rule establishes
amended energy conservation standards
for dishwashers that are designed to
achieve the maximum improvement in
energy efficiency that DOE has
determined to be both technologically
feasible and economically justified, as
required by 6295(o)(2)(A) and
6295(o)(3)(B). A full discussion of the
alternatives considered by DOE is
presented in chapter 17 of the TSD for
this direct final rule.
H. Review Under the Treasury and
General Government Appropriations
Act, 1999
khammond on DSKJM1Z7X2PROD with RULES3
Section 654 of the Treasury and
General Government Appropriations
Act, 1999 (Pub. L. 105–277) requires
Federal agencies to issue a Family
Policymaking Assessment for any rule
that may affect family well-being.
Although this direct final rule would
not have any impact on the autonomy
or integrity of the family as an
institution as defined, this rule could
impact a family’s well-being. When
developing a Family Policymaking
Assessment, agencies must assess
whether: (1) the action strengthens or
erodes the stability or safety of the
family and, particularly, the marital
commitment; (2) the action strengthens
or erodes the authority and rights of
parents in the education, nurture, and
supervision of their children; (3) the
action helps the family perform its
functions, or substitutes governmental
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
activity for the function; (4) the action
increases or decreases disposable
income or poverty of families and
children; (5) the proposed benefits of
the action justify the financial impact on
the family; (6) the action may be carried
out by State or local government or by
the family; and whether (7) the action
establishes an implicit or explicit policy
concerning the relationship between the
behavior and personal responsibility of
youth, and the norms of society.
DOE has considered how the
proposed benefits of this rule compare
to the possible financial impact on a
family (the only factor listed that is
relevant to this rule). As part of its
rulemaking process, DOE must
determine whether the energy
conservation standards contained in this
final rule are economically justified. As
discussed in section V.C.1 of this
document, DOE has determined that the
standards are economically justified
because the benefits to consumers far
outweigh the costs to manufacturers.
Families will also see LCC savings as a
result of this rule. Moreover, as
discussed further in section V.B.1 of this
document, DOE has determined that for
the for low-income households, average
LCC savings and PBP at the considered
efficiency levels are improved (i.e.,
higher LCC savings and lower payback
period) as compared to the average for
all households. Further, the standards
will also result in climate and health
benefits for families.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630,
‘‘Governmental Actions and Interference
with Constitutionally Protected Property
Rights,’’ 53 FR 8859 (March 18, 1988),
DOE has determined that this 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
PO 00000
Frm 00087
Fmt 4701
Sfmt 4700
31483
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
direct final rule 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 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 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.
E:\FR\FM\24APR3.SGM
24APR3
31484
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
DOE has concluded that this
regulatory action, which sets forth
amended energy conservation standards
for dishwashers, is not a significant
energy action because the 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
direct final 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 prepared a
report describing that peer review.147
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
khammond on DSKJM1Z7X2PROD with RULES3
147 The 2007 ‘‘Energy Conservation Standards
Rulemaking Peer Review Report’’ is available at the
following website: energy.gov/eere/buildings/
downloads/energy-conservation-standardsrulemaking-peer-review-report-0 (last accessed Nov.
15, 2023).
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
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.148
M. Materials Incorporated by Reference
The following standard appears in the
amendatory text of this document and
was previously approved for the
locations in which it appears: AHAM
DW–1–2020.
N. Congressional Notification
As required by 5 U.S.C. 801, DOE will
report to Congress on the promulgation
of this rule prior to its effective date.
The report will state that the Office of
Information and Regulatory Affairs has
determined that this rule meets the
criteria set forth in 5 U.S.C. 804(2).
VIII. Approval of the Office of the
Secretary
The Secretary of Energy has approved
publication of this direct final rule.
List of Subjects in 10 CFR Part 430
Administrative practice and
procedure, Confidential business
information, Energy conservation,
Household appliances, Imports,
Incorporation by reference,
Intergovernmental relations, Reporting
and recordkeeping requirements, Small
businesses.
Signing Authority
This document of the Department of
Energy was signed on April 12, 2024 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
148 The report is available at
www.nationalacademies.org/our-work/review-ofmethods-for-setting-building-and-equipmentperformance-standards.
PO 00000
Frm 00088
Fmt 4701
Sfmt 4700
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 April 12,
2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S.
Department of Energy.
For the reasons set forth in the
preamble, DOE amends part 430 of
chapter II, subchapter D, of title 10 of
the 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 (f) to read as follows:
■
§ 430.32 Energy and water conservation
standards and their compliance dates.
*
*
*
*
*
(f) Dishwashers. (1) All dishwashers
manufactured on or after May 30, 2013,
shall meet the following standard—
(i) Standard size dishwashers shall
not exceed 307 kwh/year and 5.0
gallons per cycle. Standard size
dishwashers have a capacity equal to or
greater than eight place settings plus six
serving pieces as specified in AHAM
DW–1–2020 (incorporated by reference,
see § 430.3) using the test load specified
in section 2.3 of appendix C1 or section
2.4 of appendix C2 to subpart B of this
part, as applicable.
(ii) Compact size dishwashers shall
not exceed 222 kwh/year and 3.5
gallons per cycle. Compact size
dishwashers have a capacity less than
eight place settings plus six serving
pieces as specified in AHAM DW–1–
2020 (incorporated by reference, see
§ 430.3) using the test load specified in
section 2.3 of appendix C1 or section 2.4
of appendix C2 to subpart B of this part,
as applicable.
(2) All dishwashers manufactured on
or after April 23, 2027, shall not exceed
the following standard—
E:\FR\FM\24APR3.SGM
24APR3
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Rules and Regulations
Estimated annual
energy use
(kWh/year)
Product class
(i) Standard-size 1 (≥8 place settings plus 6 serving pieces) 2 ....................................................................
(ii) Compact-size (<8 place settings plus 6 serving pieces) 2 .....................................................................
31485
Maximum
per-cycle water
consumption
(gal/cycle)
223
174
3.3
3.1
1 The energy conservation standards in this table do not apply to standard-size dishwashers with a cycle time for the normal cycle of 60 minutes or less.
2 Place settings are as specified in AHAM DW–1–2020 (incorporated by reference, see § 430.3) and the test load is as specified in section 2.4
of appendix C2 to subpart B of this part.
(3) The provisions of paragraph (f)(2)
of this section are separate and
severable from one another. Should a
court of competent jurisdiction hold any
provision(s) of this section to be stayed
or invalid, such action shall not affect
any other provision of this section.
*
*
*
*
*
[FR Doc. 2024–08212 Filed 4–23–24; 8:45 am]
khammond on DSKJM1Z7X2PROD with RULES3
BILLING CODE 6450–01–P
VerDate Sep<11>2014
17:42 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00089
Fmt 4701
Sfmt 9990
E:\FR\FM\24APR3.SGM
24APR3
]]>Agencies
[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Rules and Regulations]
[Pages 31398-31485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08212]
[[Page 31397]]
Vol. 89
Wednesday,
No. 80
April 24, 2024
Part III
Department of Energy
-----------------------------------------------------------------------
10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Dishwashers; Final Rule
Federal Register / Vol. 89 , No. 80 / Wednesday, April 24, 2024 /
Rules and Regulations
[[Page 31398]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2019-BT-STD-0039]
RIN 1904-AF60
Energy Conservation Program: Energy Conservation Standards for
Dishwashers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
-----------------------------------------------------------------------
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 dishwashers.
In this direct final rule, the U.S. Department of Energy (``DOE'') is
adopting amended energy conservation standards for dishwashers. DOE has
determined that the amended energy conservation standards for these
products would result in significant conservation of energy and are
technologically feasible and economically justified.
DATES: The effective date of this rule is August 22, 2024. If adverse
comment are received by August 12, 2024 and DOE determines that such
comments may provide a reasonable basis for withdrawal of the direct
final rule under 42 U.S.C. 6295(o), a timely withdrawal of this rule
will be published in the Federal Register. The incorporation by
reference of certain material listed in this rule was approved by the
Director as of February 17, 2023. If no such adverse comments are
received, compliance with the amended standards established for
dishwashers in this direct final rule is required on and after April
23, 2027. Comments regarding the likely competitive impact of the
standards contained in this direct final rule should be sent to the
Department of Justice contact listed in the ADDRESSES section on or
before May 24, 2024.
ADDRESSES: The docket for this rulemaking, which includes Federal
Register notices, public meeting attendee lists and transcripts,
comments, and other supporting documents/materials, is available for
review at www.regulations.gov. All documents in the docket are listed
in the www.regulations.gov index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2019-BT-STD-0039. The docket web page contains instructions on how
to access all documents, including public comments, in the docket.
For further information on how to submit a comment or review other
public comments and the docket, contact the Appliance and Equipment
Standards Program staff at (202) 287-1445 or by email:
[email protected].
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 standards contained in this direct
final rule. Interested persons may contact the Antitrust 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 direct final rule.
FOR FURTHER INFORMATION CONTACT:
Dr. Carl Shapiro, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-5649. Email: [email protected].
Ms. Amelia Whiting, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (240) 306-7097. Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Direct Final 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. Current Test Procedure
3. The Joint Agreement
III. General Discussion
A. Scope of Coverage
B. Fairly Representative of Relevant Points of View
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 and Water 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
B. Screening Analysis
1. Screened-Out Technologies
a. Desiccant Drying
b. Reduced Inlet-Water Temperature
c. Supercritical Carbon Dioxide Washing
d. Ultrasonic Washing
e. Thermoelectric Heat Pumps
f. Water Re-Use System
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy and Water Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy and Water Consumption
4. Energy and Water Prices
a. Energy Prices
b. Water and Wastewater 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 and Water Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Low-Income Households
2. Senior-Only Households
3. Well-Water Households
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. 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 Dioxide
b. Social Cost of Methane and Nitrous Oxide
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
[[Page 31399]]
N. Employment Impact Analysis
O. Regulatory Impact Analysis
P. Other Comments
1. Non-Regulatory Approaches
2. Test Procedure Usage Factors
3. National Academy of Sciences Report
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 and Water Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
a. Cleaning Performance
b. Drying Performance
c. Cycle Length
d. Water Dilution
e. Equipment Lifetime and Energy Savings
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 Dishwashers
Standards
2. Annualized Benefits and Costs of the Adopted Standards
VI. Severability
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
M. Materials Incorporated by Reference
N. Congressional Notification
VIII. Approval of the Office of the Secretary
I. Synopsis of the Direct Final 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 dishwashers, the subject of
this direct final rule. (42 U.S.C. 6292(a)(6))
---------------------------------------------------------------------------
\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, among other things, 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 significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
In light of the above and under the authority provided by 42 U.S.C.
6295(p)(4), DOE is issuing this direct final rule amending energy
conservation standards for dishwashers.
The adopted standards in this direct final rule were proposed in a
letter submitted to DOE jointly by groups representing manufacturers,
energy and environmental advocates, consumer groups, and a utility.
This letter, titled ``Energy Efficiency Agreement of 2023'' (hereafter,
the ``Joint Agreement'' \3\), recommends specific energy conservation
standards for dishwashers that, in the commenters' view, would satisfy
the EPCA requirements in 42 U.S.C. 6295(o). DOE subsequently received
letters of support for the Joint Agreement from States--including New
York, California, and Massachusetts \4\--and utilities--including San
Diego Gas and Electric (``SDG&E'') and Southern California Edison
(``SCE'') \5\--advocating for the adoption of the recommended
standards.
---------------------------------------------------------------------------
\3\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055.
\4\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0056.
\5\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0057.
---------------------------------------------------------------------------
In accordance with the direct final rule provisions at 42 U.S.C.
6295(p)(4), DOE has determined that the recommendations contained in
the Joint Agreement are compliant with 42 U.S.C. 6295(o). As required
by 42 U.S.C. 6295(p)(4)(A)(i), DOE is also simultaneously publishing a
notice of proposed rulemaking (``NOPR'') that contains identical
standards to those adopted in this direct final rule. Consistent with
the statute, DOE is providing a 110-day public comment period on the
direct final rule. (42 U.S.C. 6295(p)(4)(B)) If DOE determines that any
comments received provide a reasonable basis for withdrawal of the
direct final rule under 42 U.S.C. 6295(o) or any other applicable law,
DOE will publish the reasons for withdrawal and continue the rulemaking
under the NOPR. (42 U.S.C. 6295(p)(4)(C)) See section II.A of this
document for more details on DOE's statutory authority.
The amended standards that DOE is adopting in this direct final
rule are the efficiency levels recommended in the Joint Agreement
(shown in Table I.1) expressed in terms of maximum estimated annual
energy use (``EAEU'') in kilowatt hours per year (``kWh/yr'') and
maximum per cycle water consumption in gallons per cycle (``gal/
cycle'') as measured according to DOE's dishwasher test procedure
codified at title 10 of the Code of Federal Regulations (``CFR'') part
430, subpart B, appendix C2 (``appendix C2'').
Table I.1 The amended standards recommended in the Joint Agreement
are represented as trial standard level (``TSL'') 3 in this document
(hereinafter the ``Recommended TSL'') and are described in section V.A
of this document. The Joint Agreement's standards for dishwashers apply
to all products listed in Table I.1 and manufactured in, or imported
into, the United States starting 3 years after publication of a final
rule in the Federal Register.
[[Page 31400]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.000
A. Benefits and Costs to Consumers
Table I.2 summarizes DOE's evaluation of the economic impacts of
the adopted standards on consumers of dishwashers, as measured by the
average life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\6\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of dishwashers,
which is estimated to be 15.2 years (see section IV.F.6 of this
document).
---------------------------------------------------------------------------
\6\ 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.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
[GRAPHIC] [TIFF OMITTED] TR24AP24.001
DOE's analysis of the impacts of the adopted standards on consumers
is described in section IV.F of this document.
B. Impact on Manufacturers 7
---------------------------------------------------------------------------
\7\ All monetary values in this document are expressed in 2022
dollars and, where appropriate, are discounted to 2024 unless
explicitly stated otherwise.
---------------------------------------------------------------------------
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 (2024-2056). Using a real discount rate of
8.5 percent, DOE estimates that the INPV for manufacturers of
dishwashers in the case without amended standards is $735.8 million.
Under the adopted standards, which align with the Recommended TSL for
dishwashers, DOE estimates the change in INPV to range from -20.2
percent to -13.1 percent, which represents a change in INPV of
approximately -$148.8 million to -$96.7 million. In order to bring
products into compliance with amended standards, it is estimated that
industry will incur total conversion costs of $126.9 million.
DOE's analysis of the impacts of the adopted standards on
manufacturers is described in section IV.J and section V.B.2 of this
document.
C. National Benefits and Costs
DOE's analyses indicate that the adopted energy conservation
standards for dishwashers would save a significant amount of energy.
Relative to the case without amended standards, the lifetime energy
savings for dishwashers purchased in the 30-year period that begins in
the anticipated year of compliance with the amended standards (2027-
2056), amount to 0.31 quadrillion British thermal units (``Btu''), or
quads.\8\ This represents a savings of 2.6 percent relative to the
energy use of these products in the case without amended standards
(referred to as the ``no-new-standards case'').
---------------------------------------------------------------------------
\8\ 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.1 of this document.
---------------------------------------------------------------------------
The cumulative net present value (``NPV'') of total consumer
benefits of the standards for dishwashers ranges from $1.23 billion (at
a 7-percent discount rate) to $2.90 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
dishwashers purchased during the period 2027-2056.
In addition, the adopted standards for dishwashers are projected to
yield significant environmental benefits. DOE estimates that the
standards will result in cumulative emission reductions (over the same
period as for energy savings) of 9.48 million metric tons (``Mt'') \9\
of carbon dioxide (``CO2''), 1.41 thousand tons of sulfur
dioxide (``SO2''), 22.37 thousand tons of nitrogen oxides
(``NOX''), 98.97 thousand tons of methane
(``CH4''), 0.06 thousand tons of nitrous oxide
(``N2O''), and 0.01 tons of mercury (``Hg'').\10\
---------------------------------------------------------------------------
\9\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\10\ 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.
\11\ Estimated climate-related benefits are provided in
compliance with Executive Order 12866.
---------------------------------------------------------------------------
DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') using four different estimates of the social
cost of CO2 (``SC-CO2''), the social cost of
methane (``SC-CH4''), and the social cost of nitrous oxide
(``SC-N2O'').\11\ Together these represent the social cost
of GHG (``SC-GHG''). DOE used interim SC-GHG
[[Page 31401]]
values (in terms of benefit per ton of GHG avoided) developed by an
Interagency Working Group on the Social Cost of Greenhouse Gases
(``IWG'').\12\ 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 $0.54 billion. DOE does not have a single
central SC-GHG point estimate and it emphasizes the importance and
value of considering the benefits calculated using all four sets of SC-
GHG estimates. DOE notes, however, that the adopted standards would be
economically justified even without inclusion of monetized benefits of
reduced GHG emissions.
---------------------------------------------------------------------------
\12\ To monetize the benefits of reducing GHG emissions this
analysis uses values that are based on the Technical Support
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
Estimates Under Executive Order 13990 published 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 U.S. Environmental Protection Agency (``EPA''),\13\ as
discussed in section IV.L of this document. DOE did not monetize the
reduction in mercury emissions because the quantity is very small. DOE
estimated the present value of the health benefits would be $0.37
billion using a 7-percent discount rate, and $0.94 billion using a 3-
percent discount rate.\14\ 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 (NOX), but will continue to assess the
ability to monetize other effects such as health benefits from
reductions in direct PM2.5 emissions.
---------------------------------------------------------------------------
\13\ 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.
\14\ DOE estimates the economic value of these emissions
reductions resulting from the considered TSLs for the purpose of
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------
Table I.3 summarizes the monetized benefits and costs expected to
result from the amended standards for dishwashers. 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.
BILLING CODE 6450-01-P
[[Page 31402]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.002
[[Page 31403]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.003
BILLING CODE 6450-01-C
The benefits and costs of the adopted 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.\15\
---------------------------------------------------------------------------
\15\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2024, 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., 2020 or 2030), and then discounted the present value from
each year to 2024. 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 dishwashers
shipped in 2027-2056. The benefits associated with reduced emissions
achieved as a result of the adopted standards are also calculated based
on the lifetime of dishwashers shipped in 2027-2056. Total benefits for
both the 3-percent and 7-percent cases are presented using the average
GHG social costs with 3-percent discount rate.\16\ Estimates of total
benefits are presented for all four SC-GHG discount rates in section
V.B.8 of this document.
---------------------------------------------------------------------------
\16\ As discussed in section IV.L.1 of this document, DOE agrees
with the IWG that using consumption-based discount rates (e.g., 3
percent) is appropriate when discounting the value of climate
impacts. Combining climate effects discounted at an appropriate
consumption-based discount rate with other costs and benefits
discounted at a capital-based rate (i.e., 7 percent) is reasonable
because of the different nature of the types of benefits being
measured.
---------------------------------------------------------------------------
Table I.4 presents the total estimated monetized benefits and costs
associated with the adopted 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 adopted
in this rule is $14.0 million per year in increased equipment costs,
while the estimated annual benefits are $127.2 million in reduced
equipment operating costs, $29.0 million in climate benefits, and $34.3
million in health benefits. In this case, the net benefit would amount
to $176.4 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the standards is $14.0 million per year in increased
equipment costs, while the estimated annual benefits are $171.2 million
in reduced operating costs, $29.0 million in climate benefits, and
$50.8 million in health benefits. In this case, the net benefit would
amount to $237.0 million per year.
BILLING CODE 6450-01-P
[[Page 31404]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.004
[[Page 31405]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.005
BILLING CODE 6450-01-C
DOE's analysis of the national impacts of the adopted standards is
described in sections IV.J.3 and IV.L of this document.
D. Conclusion
DOE has determined that the Joint Agreement was submitted jointly
by interested persons that are fairly representative of relevant points
of view, in accordance with 42 U.S.C. 6295(p)(4)(A). After considering
the recommended standards and weighing the benefits and burdens, DOE
has determined that the recommended standards are in accordance with 42
U.S.C. 6295(o), which contains the criteria for prescribing new or
amended standards. Specifically, the Secretary of Energy
(``Secretary'') has determined that the adoption of the recommended
standards would result in the significant conservation of energy and is
the maximum improvement in energy efficiency that is technologically
feasible and economically justified. In determining whether the
recommended standards are economically justified, the Secretary has
determined that the benefits of the recommended standards exceed the
burdens. The Secretary has further concluded that the recommended
standards, when considering the benefits of energy savings, positive
NPV of consumer benefits, emission reductions, the estimated monetary
value of the emissions reductions, and positive average LCC savings,
would yield benefits that outweigh the negative impacts on some
consumers and on manufacturers, including the conversion costs that
could result in a reduction in INPV for manufacturers.
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
standards for dishwashers is $14.0 million per year in increased
dishwasher costs, while the estimated annual benefits are $127.2
million in reduced dishwasher operating costs, $29.0 million in climate
benefits, and $34.3 million in health benefits. The net benefit amounts
to $176.4 million per year. DOE notes that the net benefits are
substantial even in the absence of the climate benefits \17\ and DOE
would adopt the same standards in the absence of such benefits.
---------------------------------------------------------------------------
\17\ The information on climate benefits is provided in
compliance with Executive Order 12866.
---------------------------------------------------------------------------
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.\18\ 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.
---------------------------------------------------------------------------
\18\ 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 0.31 quads FFC, the equivalent of
the primary annual energy use of 2.1 million homes. In addition, they
are projected to reduce cumulative CO2 emissions by 9.48 Mt.
Based on these findings, DOE has determined the energy savings from the
standard levels adopted in this direct final rule are ``significant''
within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed
discussion of the basis for these conclusions is contained in the
remainder of this document and the accompanying TSD.\19\
---------------------------------------------------------------------------
\19\ The TSD is available in the docket for this rulemaking at
www.regulations.gov/docket/EERE-2019-BT-STD-0039/document.
---------------------------------------------------------------------------
In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of four TSLs
for dishwashers. 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.1 of this document, DOE has tentatively
[[Page 31406]]
determined that TSL 3 (the Recommended TSL) represents the maximum
improvement in energy efficiency that is technologically feasible and
economically justified.
II. Introduction
The following section briefly discusses the statutory authority
underlying this direct final rule, as well as some of the relevant
historical background related to the establishment of standards for
dishwashers.
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 dishwashers,
the subject of this document. (42 U.S.C. 6292(a)(6)) EPCA prescribed
energy conservation design standards for these products (42 U.S.C.
6295(g)(1) and (10)(A)), and directed DOE to conduct future rulemakings
to determine whether to amend these standards. (42 U.S.C. 6295(g)(4)
and (10)(B)) 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))
In establishing energy conservation standards with both energy and
water use performance standards for dishwashers manufactured after
2010, Congress also directed DOE to ``determin[e] whether to amend''
those standards. 42 U.S.C. 6295(g)(10)(B). Congress's directive, in
section 6295(g)(10)(B), to consider whether ``to amend the standards
for dishwashers'' refers to ``the standards'' established in the
immediately preceding section, 6295(g)(10)(A). There, Congress
established energy conservation standards with both energy and water
use performance standards for dishwashers. Indeed, the energy and water
use performance standards for dishwashers (both standard and compact)
are each contained within a single subparagraph. See Id. Everything in
section 6295(g)(10) suggests that Congress intended both of those twin
standards to be evaluated when it came time, ``[n]ot later than January
1, 2015,'' to consider amending them. (Id. 6295(g)(10)(B)(i))
Accordingly, DOE understands its authority, under section
6295(g)(10)(B), to include consideration of amended energy and water
use performance standards for dishwashers.
DOE similarly understands its obligation under 42 U.S.C. 6295(m) to
amend ``standards'' for covered products to include amending both the
energy and water use performance standards for dishwashers. Neither
section 6295(g)(10)(B) nor section 6295(m) limit their application to
``energy use standards.'' Rather, they direct DOE to consider amending
``the standards,'' 42 U.S.C. 6295(g)(10)(B), or simply ``standards,''
Id. 6295(m)(1)(B), which may include both energy use standards and
water use standards.
Finally, DOE is promulgating these standards as a direct final rule
pursuant to section 42 U.S.C. 6295(p)(4). That section also extends
broadly to any ``energy or water conservation standard'' without
qualification. Thus, pursuant to section 6295(p)(4), DOE may, so long
as the other relevant conditions are satisfied, promulgate a direct
final rule that includes water use performance standards for a covered
product like dishwashers, where Congress has already established energy
and water use performance standards.
DOE is aware that the definition of ``energy conservation
standard,'' in section 6291(6), expressly references water use only for
four products specifically named: showerheads, faucets, water closets,
and urinals. See Id. However, DOE does not read the language in 6291(6)
as fully delineating the scope of DOE's authority under EPCA. Rather,
as is required of agencies in applying a statute, individual
provisions, including section 6291(6) of EPCA, must be read in the
context of the statute as a whole.
The energy conservation program was initially limited to addressing
the energy use, meaning electricity and fossil fuels, of 13 covered
products (See sections 321 and 322 of the Energy and Policy
Conservation Act, Public Law 94-163, 89 Stat 871 (December 22, 1975))
Since its inception, Congress has expanded the scope of the energy
conservation program several times, including by adding covered
products, prescribing energy conservation standards for various
products, and by addressing water use for certain covered products. For
example, in the Energy Policy Act of 1992, Congress amended the list of
covered products in 42 U.S.C. 6292 to include showerheads, faucets,
water closets and urinals and expanded DOE's authority to regulate
water use for these products. (See Sec. 123, Energy Policy Act of 1992,
Public Law 102-486, 106 Stat 2776 (Oct. 24, 1992)). When it did so,
Congress also made corresponding changes to the definition of
``consumer product'' (42 U.S.C. 6291(1)), the definition of ``energy
conservation standard'' (42 U.S.C. 6291(6)), the section governing the
promulgation of test procedures (42 U.S.C. 6293), the criteria for
prescribing new or amended energy conservation standards (42 U.S.C.
6295(o)), and elsewhere in EPCA.
Later, Congress further expanded the scope of the energy
conservation program several times. For instance, Congress added
products and energy conservation standards directly to 42 U.S.C. 6295,
the section of EPCA that contains statutorily prescribed standards as
well as DOE's standard-setting authorities. See 42 U.S.C. 6295(a)
(stating that the ``purposes of this section are to--(1) provide
Federal energy conservation standards applicable to covered products;
and (2) authorize the Secretary to prescribe amended or new energy
conservation standards for each type (or class) of covered
product.'')). When Congress added these new standards and standard-
setting authorities to 42 U.S.C. 6295 after the Energy Policy Act of
1992, it often did so without making any conforming changes to other
provisions in EPCA, e.g., sections 6291 or 6292. For example, in the
Energy Policy Act of 2005, Congress prescribed standards by statute, or
gave DOE the authority to set standards for, battery chargers, external
power supplies, ceiling fans, ceiling fan light kits, beverage vending
machines, illuminated exit signs, torchieres, low voltage dry-type
distribution transformers, traffic signal modules and pedestrian
modules, certain lamps, dehumidifiers, and commercial prerinse spray
valves in 42 U.S.C. 6295 without updating the list of covered products
in 42 U.S.C. 6292. (See Sec. 135, Energy Policy Act of 2005, 119 Stat
594 (Aug. 8, 2005)).
Congress also expanded the scope of the energy conservation program
by directly adding water use performance standards for certain products
to 42 U.S.C. 6295. For example, in the Energy Policy Act of 2005,
Congress added a water use performance standard (but no energy use
performance standard) for commercial prerinse spray valves (``CPSVs'')
and did so without updating the list of covered products in 42 U.S.C.
6292 to include CPSVs and without adding CPSVs to the list of
enumerated products with water use performance standards in the
``energy conservation standard'' definition in 42 U.S.C. 6291(6). In
the Energy Independence and Security Act of 2007 (``EISA 2007''),
Congress amended 42 U.S.C. 6295 by prescribing energy conservation
[[Page 31407]]
standards for residential clothes washers and dishwashers that included
both energy and water use performance standards. (See Sec. 301, EISA
2007, Public Law 110-140, 121 Stat 1492 (Dec. 19, 2007)). Again, when
it did so, Congress did not add these products to the list of
enumerated products with water use performance standards in the
definition of ``energy conservation standard'' in 42 U.S.C. 6291(6).
In considering how to treat these products and standards that
Congress has directly added to 42 U.S.C. 6295 without making conforming
changes to the rest of the statute, including the list of covered
products in 42 U.S.C. 6292, and the water-use products in the
definition of an ``energy conservation standard,'' DOE construes the
statute as a whole. When Congress added products and standards directly
to 42 U.S.C. 6295 it must have meant those products to be covered
products and those standards to be energy conservation standards, given
that the purpose of 42 U.S.C. 6295 is to provide ``energy conservation
standards applicable to covered products'' and to ``authorize the
Secretary to prescribe amended or new energy conservation standards for
each type (or class) of covered product.'' Elsewhere in EPCA, the
statute's references to covered products and energy conservation
standards can only be read coherently as including the covered products
and energy conservation standards Congress added directly to section
6295, even if Congress did not make conforming edits to 6291 or 6292.
For example, manufacturers are prohibited from ``distribut[ing] in
commerce any new covered product which is not in conformity with an
applicable energy conservation standard.'' (42 U.S.C. 6302(a)(5)
(emphasis added)) It would defeat congressional intent to allow a
manufacturer to distribute a product, e.g., a CPSV or ceiling fan, that
violates an applicable energy conservation standard that Congress
prescribed simply because Congress added the product directly to 42
U.S.C. 6295 without also updating the list of covered products in 42
U.S.C. 6292(a). In addition, preemption in EPCA is based on ``the
effective date of an energy conservation standard established in or
prescribed under section 6295 of this title for any covered product.''
(42 U.S.C. 6297(c) (emphasis added)) Nothing in EPCA suggests that
standards Congress adopted in 6295 lack preemptive effect, merely
because Congress did not make conforming amendments to 6291, 6292, or
6293.
It would similarly defeat congressional intent for a manufacturer
to be permitted to distribute a covered product, e.g., a residential
clothes washer or dishwasher, that violates a water use performance
standard because Congress added the standard to 42 U.S.C. 6295 without
also updating the definition of energy conservation standard in 42
U.S.C. 6291(6). By prescribing directly, in 6295(g)(10), energy
conservation standards for dishwashers that include both energy and
water use performance standards, Congress intended that energy
conservation standards for dishwashers include both energy use and
water use.
DOE recognizes that some might argue that Congress's specific
reference in section 6291(6) to water standards for showerheads,
faucets, water closets, and urinals could ``create a negative
implication'' that energy conservations standards for other covered
products may not include water use standards. See Marx v. Gen. Revenue
Corp., 568 U.S. 371, 381 (2013). ``The force of any negative
implication, however, depends on context.'' Id.; see also NLRB v. SW
Gen., Inc., 580 U.S. 288, 302 (2017) (``The expressio unius canon
applies only when circumstances support a sensible inference that the
term left out must have been meant to be excluded.'' (alterations and
quotation marks omitted)). In this context, the textual and structural
cues discussed above show that Congress did not intend to exclude from
the definition of energy conservation standard the water use
performance standards that it specifically prescribed, and directed DOE
to amend, in section 6295. To conclude otherwise would negate the plain
text of 6295(g)(10). Furthermore, to the extent the definition of
energy conservation standards in section 6291(6), which was last
amended in the Energy Policy Act of 1992, could be read as in conflict
with the energy and water use performance standards prescribed by
Congress in EISA 2007, any such conflict should be resolved in favor of
the more recently enacted statute. See United States v. Estate of
Romani, 523 U.S. 517, 530-531 (1998) (``[A] specific policy embodied in
a later federal statute should control our construction of the priority
statute, even though it had not been expressly amended.'').
Accordingly, based on a complete reading of the statute, DOE has
determined that products and standards added directly to 42 U.S.C. 6295
are appropriately considered ``covered products'' and ``energy
conservation standards'' for the purposes of applying the various
provisions in EPCA.
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 the 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 in limited instances for particular State laws or
regulations, in accordance with the procedures and other provisions set
forth under EPCA. (See 42 U.S.C. 6297(d))
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(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 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 dishwashers appear at title 10 of
the CFR part 430, subpart B, appendix C1 (``appendix C1'') and appendix
C2.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including dishwashers. Any new
or amended standards for a 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)) 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 if DOE determines by
rule that the standard is not technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed
standard is
[[Page 31408]]
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(3)(B)) 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 considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing a product complying
with an energy conservation standard level will be less than three
times the value of the energy savings during the first year that the
consumer will receive as a result of the standard, as calculated under
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe
an amended or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
EPCA specifies requirements when promulgating an energy
conservation standard for a covered product that has two or more
subcategories. A rule prescribing an energy conservation standard for a
type (or class) of product must specify a different standard level for
a type or class of products 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 such a
feature and other factors DOE deems appropriate. (Id.) Any rule
prescribing such a standard must include an explanation of the basis on
which such higher or lower level was established. (42 U.S.C.
6295(q)(2))
Additionally, pursuant to the amendments contained in EISA 2007,
final rules for new or amended energy conservation standards
promulgated after July 1, 2010, are 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 and standards for
dishwashers address standby mode and off mode energy use, as do the
amended standards adopted in this direct final rule.
Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE
authority to issue a final rule (i.e., a ``direct final rule'')
establishing an energy conservation standard upon receipt of a
statement submitted jointly by interested persons that are fairly
representative of relevant points of view (including representatives of
manufacturers of covered products, States, and efficiency advocates),
as determined by the Secretary, that contains recommendations with
respect to an energy or water conservation standard. (42 U.S.C.
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also
determine whether a jointly-submitted recommendation for an energy or
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable.
The direct final rule must be published simultaneously with a NOPR
that proposes an energy or water conservation standard that is
identical to the standard established in the direct final rule, and DOE
must provide a public comment period of at least 110 days on this
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) While DOE typically provides a
comment period of 60 days on proposed standards, for a NOPR
accompanying a direct final rule, DOE provides a comment period of the
same length as the comment period on the direct final rule--i.e., 110
days. Based on the comments received during this period, the direct
final rule will either become effective, or DOE will withdraw it not
later than 120 days after its issuance if: (1) one or more adverse
comments is received, and (2) DOE determines that those comments, when
viewed in light of the rulemaking record related to the direct final
rule, may provide a reasonable basis for withdrawal of the direct final
rule under 42 U.S.C. 6295(o). (42 U.S.C. 6295(p)(4)(C)) Receipt of an
alternative joint recommendation may also trigger a DOE withdrawal of
the direct final rule in the same manner. (Id.)
DOE has previously explained its interpretation of its direct final
rule authority. In a final rule amending the Department's ``Procedures,
Interpretations and Policies for Consideration of New or Revised Energy
Conservation Standards for Consumer Products'' at 10 CFR part 430,
subpart C, appendix A, DOE noted that it may issue standards
recommended by interested persons that are fairly representative of
relative points of view as a direct final rule when the recommended
standards are in accordance with 42 U.S.C. 6295(o) or 42 U.S.C.
6313(a)(6)(B), as applicable. 86 FR 70892, 70912 (Dec. 13, 2021). But
the direct final rule provision in EPCA does not impose additional
requirements applicable to other standards rulemakings, which is
consistent with the unique circumstances of rules issued through
consensus agreements under DOE's direct final rule authority. Id. DOE's
discretion remains bounded by its statutory mandate to adopt a standard
that results in the maximum improvement in energy efficiency that is
technologically feasible and economically justified--a requirement
found in 42 U.S.C. 6295(o). Id. As such, DOE's review and analysis of
the Joint Agreement is limited to whether the recommended standards
satisfy the criteria in 42 U.S.C. 6295(o).
[[Page 31409]]
B. Background
1. Current Standards
In a direct final rule published on May 30, 2012 (``May 2012 Direct
Final Rule''), DOE adopted the current energy conservation standards
for dishwashers manufactured on or after May 30, 2013, consistent with
the levels proposed in a letter submitted to DOE by groups representing
manufacturers, energy and environmental advocates, and consumer groups
on July 30, 2010. 77 FR 31918, 31918-31919. This collective set of
comments, titled ``Agreement on Minimum Federal Efficiency Standards,
Smart Appliances, Federal Incentives and Related Matters for Specified
Appliances'' (the ``July 2010 Joint Petition''),\20\ recommended
specific energy conservation standards for dishwashers that, in the
commenters' view, would satisfy the EPCA requirements in 42 U.S.C.
6295(o). 77 FR 31918, 31919. The July 2010 Joint Petition proposed
energy conservation standard levels for the standard-size and compact-
size dishwasher product classes based on the same capacity definitions
that existed at that time. 77 FR 31918, 31926. In the May 2012 Direct
Final Rule, DOE analyzed the benefits and burdens of multiple standard
levels for dishwashers, including a standard level that corresponded to
the recommended levels in the July 2010 Joint Petition, and determined
that the levels recommended in the Joint Petition satisfied the EPCA
requirements set forth under 42 U.S.C. 6295(o). 77 FR 31918, 31921.
---------------------------------------------------------------------------
\20\ DOE Docket No. EERE-2011-BT-STD-0060-0001.
---------------------------------------------------------------------------
In a final determination published on December 13, 2016 (``December
2016 Final Determination''), DOE concluded that amended energy
conservation standards would not be economically justified at any level
above the standards established in the May 2012 Direct Final Rule, and
therefore determined not to amend the standards. 81 FR 90072. The
current energy and water conservation standards are set forth in DOE's
regulations at 10 CFR part 430, Sec. 430.32(f), and are repeated in
Table II.1. The currently applicable DOE test procedure for dishwashers
appears at appendix C1.
[GRAPHIC] [TIFF OMITTED] TR24AP24.006
The regulatory text at 10 CFR 430.32(f) references the Association
of Home Appliance Manufacturers (``AHAM'') standard AHAM DW-1-2020 \21\
to define the items in the test load that comprise the serving pieces
and each place setting. The number of serving pieces and place settings
help determine the capacity of the dishwasher, which is used to
determine the applicable product class.
---------------------------------------------------------------------------
\21\ Uniform Test Method for Measuring the Energy Consumption of
Dishwashers. AHAM DW-1-2020. Copyright 2020.
---------------------------------------------------------------------------
2. Current Test Procedure
On December 22, 2021, DOE published a test procedure NOPR
(``December 2021 TP NOPR'') proposing amendments to the dishwasher test
procedure at appendix C1 and a new test procedure at appendix C2. 86 FR
72738. On January 18, 2023, DOE published a final rule amending the
test procedure at appendix C1 and establishing a new test procedure at
appendix C2 (``January 2023 TP Final Rule''). 88 FR 3234. The new
appendix C2 specifies updated annual cycles and low-power mode hours,
both of which are used to calculate the EAEU metric, and introduces a
minimum cleaning performance threshold to validate the selected test
cycle. 88 FR 3234, 3236.
Subsequently, on July 27, 2023, DOE published a final rule adding
clarifying instructions to the dishwasher test procedure at appendix C1
regarding the allowable dosing options for each type of detergent;
clarifying the existing detergent reporting requirements; and adding an
enforcement provision for dishwashers to specify the detergent and
dosing method that DOE would use for any enforcement testing of
dishwasher models certified in accordance with the applicable
dishwasher test procedure prior to July 17, 2023 (i.e., the date by
which the January 2023 TP Final Rule became mandatory for product
testing). 88 FR 48351.
EPCA authorizes DOE to design test procedures that measure energy
efficiency, energy use, water use, or estimated annual operating cost
of a covered product during a representative average use cycle or
period of use. (42 U.S.C. 6293(b)(3)) In general, a consumer-acceptable
level of cleaning performance (i.e., a representative average use
cycle) can be easier to achieve through the use of higher amounts of
energy and water use during the dishwasher cycle. Conversely,
maintaining acceptable cleaning performance can be more difficult as
energy and water levels are reduced. Improving one aspect of dishwasher
performance, such as reducing energy and/or water use as a result of
energy conservation standards, may require a trade-off with one or more
other aspects of performance, such as cleaning performance. 88 FR 3234,
3250-3251. As discussed, the currently applicable energy conservation
standards for dishwashers are based on appendix C1, which does not
prescribe a method for testing dishwasher cleaning performance.
The January 2023 TP Final Rule established a new test procedure at
appendix C2, which includes provisions for a minimum cleaning index
threshold of 70 to validate the selected test cycle. 88 FR 3234, 3261.
The cleaning index is calculated based on the number and size of
particles remaining on each item of the test load at the completion of
a dishwasher cycle as specified in AHAM DW-2-2020.\22\ Items that do
not have any soil particles are scored 0 (i.e., completely clean). No
single item in the test load can exceed a score of 9. Individual scores
for each item in the test load are combined as a weighted average to
calculate the per cycle cleaning index. A cleaning index of 100
indicates a completely clean test load. Id. at 88 FR 3255. In the
January 2023 TP Final Rule, DOE specified that the
[[Page 31410]]
cleaning index is calculated by only scoring soil particles on all
items in the test load and that spots, streaks, and rack contact marks
on glassware are not included in the cleaning index calculation.\23\
Id. at 88 FR 3248. Manufacturers must use the results of testing under
the new appendix C2 to determine compliance with the energy
conservation standards adopted in this direct final rule. Accordingly,
DOE used appendix C2 as finalized in the January 2023 TP Final Rule as
the basis for the analysis in this direct final rule. Id. at 88 FR
3234.
---------------------------------------------------------------------------
\22\ Household Electric Dishwashers. AHAM DW-2-2020. Copyright
2020.
\23\ In the December 2021 TP NOPR, DOE proposed a cleaning index
threshold of 65 calculated by scoring soil particles on all items as
well as spots, streaks, and rack contact marks on glassware. 86 FR
72738, 72756, 72758. In the January 2023 TP Final Rule, DOE noted
that the specified cleaning index threshold of 70 is equivalent to
the cleaning index threshold of 65 that was proposed in the December
2021 TP NOPR. 88 FR 3234, 3261.
---------------------------------------------------------------------------
DOE adopted a minimum cleaning performance threshold in appendix C2
to determine if a dishwasher, when tested according to the DOE test
procedure, ``completely washes a normally soiled load of dishes,'' so
as to better represent consumer use of the product (i.e., to produce
test results that are more representative of an average consumer use
cycle). 88 FR 3234, 3253, 3255. Based on the data available, DOE
determined that the cleaning performance threshold provides a
reasonable proxy for when consumers are likely to be satisfied with
performance on the normal cycle. 88 FR 3234, 3261. The cleaning index
threshold established as part of the new appendix C2 ensures that
energy and water savings are being realized for products that comply
with the amended energy conservation standards for dishwashers
established by this direct final rule. 88 FR 3234, 3253, 3254.
The standards enacted by this direct final rule are expressed in
terms of the EAEU and water consumption metrics as measured according
to the newly established test procedure contained in appendix C2.
3. The Joint Agreement
On September 25, 2023, DOE received a joint statement (i.e., the
Joint Agreement) recommending standards for dishwashers, that was
submitted by groups representing manufacturers, energy and
environmental advocates, consumer groups, and a utility.\24\ In
addition to the recommended standards for dishwashers, the Joint
Agreement also included separate recommendations for several other
covered products.\25\ And, while acknowledging that DOE may implement
these recommendations in separate rulemakings, the Joint Agreement also
stated that the recommendations were recommended as a complete package
and each recommendation is contingent upon the other parts being
implemented. DOE understands this to mean the Joint Agreement is
contingent upon DOE initiating rulemaking processes to adopt all the
recommended standards in the agreement. That is distinguished from an
agreement where issuance of an amended energy conservation standard for
a covered product is contingent on issuance of amended energy
conservation standards for the other covered products. If the Joint
Agreement were so construed, it would conflict with the anti-
backsliding provision in 42 U.S.C. 6295(o)(1), because it would imply
the possibility that, if DOE were unable to issue an amended standard
for a certain product, it would have to withdraw a previously issued
standard for one of the other products. The anti-backsliding provision,
however, prevents DOE from withdrawing or amending an energy
conservation standard to be less stringent. As a result, DOE will be
proceeding with individual rulemakings that will evaluate each of the
recommended standards separately under the applicable statutory
criteria.
---------------------------------------------------------------------------
\24\ The signatories to the Joint Agreement include the AHAM,
American Council for an Energy Efficient Economy, Alliance for Water
Efficiency, ASAP, Consumer Federation of America, Consumer Reports,
Earthjustice, National Consumer Law Center, Natural Resources
Defense Council, Northwest Energy Efficiency Alliance, and Pacific
Gas and Electric Company. Members of AHAM's Major Appliance Division
that make the affected products include: Alliance Laundry Systems,
LLC; Asko Appliances AB; Beko US Inc.; Brown Stove Works, Inc.; BSH
Home Appliances Corporation; Danby Products, Ltd.; Electrolux;
Elicamex S.A. de C.V.; Faber; Fotile America; GE Appliances, a Haier
Company; L'Atelier Paris Haute Design LLG; LG Electronics; Liebherr
USA, Co.; Midea America Corp.; Miele, Inc.; Panasonic Appliances
Refrigeration Systems (PAPRSA) Corporation of America; Perlick
Corporation; Samsung Electronics America, Inc.; Sharp Electronics
Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The Middleby
Corporation; U-Line Corporation; Viking Range, LLC; and Whirlpool
Corporation.
\25\ The Joint Agreement contained recommendations for 6 covered
products: refrigerators, refrigerator-freezers, and freezers;
clothes washers; clothes dryers; dishwashers; cooking products; and
miscellaneous refrigeration products.
---------------------------------------------------------------------------
A court decision issued after DOE received the Joint Agreement is
also relevant to this rule. On March 17, 2022, various States filed a
petition seeking review of a final rule revoking two final rules that
established product classes for dishwashers with a cycle time for the
normal cycle of 60 minutes or less, top-loading residential clothes
washers and certain classes of consumer clothes dryers with a cycle
time of less than 30 minutes, and front-loading residential clothes
washers with a cycle time of less than 45 minutes (collectively,
``short-cycle product classes''). The petitioners argued that the final
rule revoking the short-cycle product classes violated EPCA and was
arbitrary and capricious. On January 8, 2024, the United States Court
of Appeals for the Fifth Circuit granted the petition for review and
remanded the matter to DOE for further proceedings consistent with the
Fifth Circuit's opinion. See Louisiana v. United States Department of
Energy, 90 F.4th 461 (5th Cir. 2024).
On February 14, 2024, following the Fifth Circuit's decision in
Louisiana v. United States Department of Energy, DOE received a second
joint statement from this same group of stakeholders in which the
signatories reaffirmed the Joint Agreement, stating that the
recommended standards represent the maximum levels of efficiency that
are technologically feasible and economically justified.\26\ In the
letter, the signatories clarified that ``short-cycle'' product classes
for residential clothes washers, consumer clothes dryers, and
dishwashers did not exist at the time that the signatories submitted
their recommendations and it is their understanding that these classes
also do not exist at the current time. Accordingly, the parties
clarified that the Joint Agreement did not address short-cycle product
classes. The signatories also stated that they did not anticipate that
the recommended energy conservation standards in the Joint Agreement
will negatively affect features or performance, including cycle time,
for dishwashers.
---------------------------------------------------------------------------
\26\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
The Joint Agreement recommends standard levels for dishwashers as
presented in Table II.2. (Joint Agreement, No. 55 at p. 5) Details of
the Joint Agreement recommendations for other products are provided in
the Joint Agreement posted in the docket.\27\
---------------------------------------------------------------------------
\27\ The Joint Agreement is available in the docket at
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055.
---------------------------------------------------------------------------
[[Page 31411]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.007
DOE notes that it was conducting a rulemaking to consider amending
the standards for dishwashers when the Joint Agreement was submitted.
As part of that process, on January 24, 2022, DOE published a
notification of a webinar and availability of preliminary technical
support document (``January 2022 Preliminary Analysis''). 87 FR 3450.
Subsequently, on May 19, 2023, DOE published a NOPR and announced a
public meeting (``May 2023 NOPR'') seeking comment on its proposed
amended standard to inform its decision consistent with its obligations
under EPCA and the Administrative Procedure Act (``APA''). 88 FR 32514.
DOE held a public meeting on June 8, 2023, to discuss and receive
comments on the NOPR and NOPR TSD. The NOPR TSD is available at:
www.regulations.gov/document/EERE-2019-BT-STD-0039-0032.
Although DOE is adopting the Joint Agreement as a direct final rule
and no longer proceeding with its own rulemaking, DOE did consider
relevant comments, data, and information obtained during that
rulemaking process in determining whether the recommended standards
from the Joint Agreement are in accordance with 42 U.S.C. 6295(o). Any
discussion of comments, data, or information in this direct final rule
that were obtained during DOE's own prior rulemaking will include a
parenthetical reference that provides the location of the item in the
public record.\28\
---------------------------------------------------------------------------
\28\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for dishwashers. (Docket No. EERE-
2019-BT-STD-0039, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
III. General Discussion
DOE is issuing this direct final rule after determining that the
recommended standards submitted in the Joint Agreement meet the
requirements in 42 U.S.C. 6295(p)(4). More specifically, DOE has
determined that the recommended standards were submitted by interested
parties that are fairly representative of relevant points of view and
the recommended standards satisfy the criteria in 42 U.S.C. 6295(o).
On March 17, 2022, various States filed a petition seeking review
of the final rule revoking two final rules that established the short-
cycle product classes. The petitioners argued that the final rule
revoking the short-cycle product classes violated EPCA and was
arbitrary and capricious. On January 8, 2024, the United States Court
of Appeals for the Fifth Circuit granted the petition for review and
remanded the matter to DOE for further proceedings consistent with the
Fifth Circuit's opinion. See Louisiana v. United States Department of
Energy, 90 F.4th 461 (5th Cir. 2024).
Following the Fifth Circuit's decision, the signatories to the
Joint Agreement submitted a second letter to DOE, which stated that
Joint Recommendation did not ``address'' ``short-cycle product
classes.'' \29\ That is because, as the letter explained, such product
classes ``did not exist'' at the time of the Joint Agreement.
---------------------------------------------------------------------------
\29\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
In a recently published request for information (``RFI''), DOE is
commencing a rulemaking process on remand from the Fifth Circuit (the
``Remand Proceeding'') by soliciting further information, relevant to
the issues identified by the Fifth Circuit, regarding any short-cycle
product classes. 89 FR 17338 (March 11, 2024). In that Remand
Proceeding, DOE will conduct the analysis required by 42 U.S.C.
6295(q)(1)(B) to determine whether any short-cycle products have a
``capacity or other performance-related feature [that] . . . justifies
a higher or lower standard from that which applies (or will apply) to
other products. . . .''
The current standards applicable to any products within the scope
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(f).
Consistent with the Joint Parties' letter, short-cycle products are not
subject to the amended standards adopted by this direct final rule. If
the short-cycle products that DOE will consider in the Remand
Proceeding were subject to these standards, that would have the
practical effect of limiting the options available in the Remand
Proceeding. That is because EPCA's anti-backsliding provision precludes
DOE from prescribing any amended standard ``which increases the maximum
allowable energy use'' of a covered product. 42 U.S.C. 6295(o)(1).
Accordingly, were the products at issue in the Remand Proceeding also
subject to the amended standards adopted here, the Department could
only reaffirm the standards adopted in this direct final rule or adopt
more stringent standards.
The Joint Agreement specifies the product classes for dishwashers:
standard-size and compact-size. Although these product classes were not
further divided by cycle time, DOE understands them to exclude
standard-size dishwashers with an average cycle time of 60 minutes or
less. As noted previously, any such ``short-cycle'' dishwashers will be
considered in the Remand Proceeding; the current standards applicable
to such ``short-cycle'' dishwashers are unchanged by this rule.
Under the direct final rule authority at 42 U.S.C. 6295(p)(4), DOE
evaluates whether recommended standards are in accordance with criteria
contained in 42 U.S.C. 6295(o). DOE does not have the authority to
revise recommended standards submitted under the direct final rule
provision in EPCA. Therefore, DOE did not analyze any additional
product classes beyond those product classes included in the Joint
Agreement.
[[Page 31412]]
That is, DOE has not separately considered or established amended
standards applicable to any short-cycle product classes. In the event
that DOE establishes short-cycle product classes, pursuant to the
rulemaking on remand from the Fifth Circuit, DOE will necessarily
consider what amended standards ought to apply to any such product
classes and will do so in conformance with EPCA.
DOE notes that the data and analysis used to support this direct
final rule includes information for standard-size and compact-size
dishwashers that is not distinguished by cycle time and is
representative of all dishwashers currently on the market today. To the
extent that any short-cycle products were included in this data and
analysis, DOE believes the amount of such data is negligible.
A. Scope of Coverage
This direct final rule covers those consumer products that meet the
definition of ``dishwasher'' as codified at 10 CFR 430.2.
Dishwasher means a cabinet-like appliance which with the aid of
water and detergent, washes, rinses, and dries (when a drying process
is included) dishware, glassware, eating utensils, and most cooking
utensils by chemical, mechanical and/or electrical means and discharges
to the plumbing drainage system. 10 CFR 430.2.
See section IV.A.1 of this document for discussion of the product
classes analyzed in this direct final rule.
B. Fairly Representative of Relevant Points of View
Under the direct final rule provision in EPCA, recommended energy
conservation standards must be submitted by interested persons that are
fairly representative of relevant points of view (including
representatives of manufacturers of covered products, States, and
efficiency advocates) as determined by DOE. (42 U.S.C. 6295(p)(4)(A))
With respect to this requirement, DOE notes that the Joint Agreement
included a trade association, AHAM, which represents 16 manufacturers
of dishwashers.\30\ The Joint Agreement also included environmental and
energy-efficiency advocacy organizations, consumer advocacy
organizations, and a gas and electric utility company. Additionally,
DOE received a letter in support of the Joint Agreement from the States
of New York, California, and Massachusetts (See comment No. 56). DOE
also received a letter in support of the Joint Agreement from the gas
and electric utility, SDG&E, and the electric utility, SCE (See comment
No. 57). As a result, DOE has determined that the Joint Agreement was
submitted by interested persons who are fairly representative of
relevant points of view.
---------------------------------------------------------------------------
\30\ These companies include: Asko Appliances AB; Beko US Inc.;
BSH Home Appliances Corporation; Danby Products, Ltd.; Electrolux;
Fotile America; GE Appliances, a Haier Company; LG Electronics;
Midea America Corp.; Miele, Inc.; Samsung Electronics America, Inc.;
Sharp Electronics Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The
Middleby Corporation; and Whirlpool Corporation.
---------------------------------------------------------------------------
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
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. Sections 6(b)(3)(i) and 7(b)(1) of 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.
Section 7(b)(2) through (5) of appendix A. Section IV.B of this
document discusses the results of the screening analysis for
dishwashers, particularly the designs DOE considered, those it screened
out, and those that are the basis for the standards considered in this
rulemaking. For further details on the screening analysis for this
rulemaking, see chapter 4 of the direct final rule 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(o)(2)(A))
Accordingly, in the engineering analysis, DOE determined the maximum
technologically feasible (``max-tech'') improvements in energy
efficiency for dishwashers, 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 rulemaking are
described in section IV.C.1.b of this document and in chapter 5 of the
direct final rule TSD.
D. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from application of the
TSL to dishwashers purchased in the 30-year period that begins in the
year of compliance with the amended standards (2027-2056).\31\ The
savings are measured over the entire lifetime of dishwashers purchased
in the 30-year analysis 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.
---------------------------------------------------------------------------
\31\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet models
to estimate national energy savings (``NES'') from potential amended
standards for dishwashers. 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. For natural gas, the primary energy savings are considered
to be equal to the site energy savings. DOE also calculates NES in
terms of full-fuel-cycle (``FFC'') energy savings. The FFC metric
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
conservation standards.\32\ DOE's approach is based on the calculation
of an FFC multiplier for each of the energy types used by covered
products or
[[Page 31413]]
equipment. For more information on FFC energy savings, see section
IV.H.2 of this document.
---------------------------------------------------------------------------
\32\ 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.\33\ 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.
---------------------------------------------------------------------------
\33\ 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 adopted in this direct final rule
are projected to result in national energy savings of 0.31 quads FFC,
the equivalent of the primary annual energy use of 2.1 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
determined the energy savings from the standard levels adopted in this
direct final rule 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 rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of potential new or amended standards on
manufacturers, DOE conducts a manufacturing impact analysis (``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 cost (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 IV.H 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 adopted in this document would not
reduce the utility or performance of the dishwashers under
consideration in this rulemaking.
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 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
[[Page 31414]]
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 direct final rule to the Attorney
General with a request that the Department of Justice (``DOJ'') provide
its determination on this issue. DOE will consider DOJ's comments on
the rule in determining whether to withdraw the direct final rule. DOE
will also publish and respond to the DOJ's comments in the Federal
Register in a separate notice.
f. Need for National Energy and Water 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 adopted 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 adopted 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 effect potential amended
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
rulemaking with regard to dishwashers. Separate subsections address
each component of DOE's analyses, including relevant comments DOE
received during its separate rulemaking to amend the energy
conservation standards for dishwashers prior to receiving the Joint
Agreement.
DOE used several analytical tools to estimate the impact of the
standards considered 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 shipments 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 rulemaking: www.regulations.gov/docket?D=EERE-019-BT-STD-0039. Additionally, DOE used output from the
latest version of the EIA's Annual Energy Outlook (``AEO'') 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 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 dishwashers. The key
findings of DOE's market assessment are summarized in the following
sections. See chapter 3 of the direct final rule TSD for further
discussion of the market and technology assessment.
1. Product Classes
The Joint Agreement specifies two product classes for dishwashers.
(Joint Agreement, No. 55 at p. 8) In this direct final rule, DOE is
adopting the product classes from the Joint Agreement, as follows:
(1) Standard-size dishwashers (>=8 place settings plus 6 serving
pieces); and
(2) Compact-size dishwashers (<8 place settings plus 6 serving
pieces). Id.
Where the place settings are as specified in AHAM DW-1-2020 and the
test load is as specified in section 2.4 of appendix C2. Id.
DOE further notes that product classes established through EPCA's
direct final rule authority are not subject to the criteria specified
at 42 U.S.C. 6295(q)(1) for establishing product classes. Nevertheless,
in accordance with 42 U.S.C. 6295(o)(4)--which is applicable to direct
final rules--DOE has concluded that the standards adopted in this
direct final rule will not result in the unavailability in any covered
product type (or class) of performance characteristics, features,
sizes, capacities, and volumes that are substantially the same as those
generally available in the United States
[[Page 31415]]
currently.\34\ DOE's findings in this regard are discussed in detail in
section V.B.4 of this document.
---------------------------------------------------------------------------
\34\ EPCA specifies that DOE may not prescribe an amended or new
standard if the Secretary finds (and publishes such finding) that
interested persons have established by a preponderance of the
evidence that the standard is likely to result in the unavailability
in the United States 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 at the time of the
Secretary's finding. (42 U.S.C. 6295(o)(4))
---------------------------------------------------------------------------
2. Technology Options
In this direct final rule, DOE considered 20 technology options,
consistent with the table of technology options presented in the May
2023 NOPR. 88 FR 32514, 32527-32528. In general, technology options for
dishwashers may reduce energy use alone, or reduce both energy and
water use together. Most dishwashers in the United States use as their
water source a hot water line that is typically tapped from the hot
water line serving the adjacent kitchen faucet. Because the energy used
to heat the water consumed by the dishwasher is included as part of the
EAEU metric, technologies that decrease water use also inherently
decrease energy use. Chapter 3 of the TSD for this direct final rule
includes a detailed list and descriptions of all technology options
identified for dishwashers, including a discussion of how each
technology option reduces energy use only or both energy and water use
together.
Among the technology options identified for dishwashers, the
following reduce energy use only (i.e., they reduce energy use without
directly reducing water use): condensation drying, including use of a
stainless steel tub; desiccant drying; fan/jet drying; improved motor
efficiency; increased insulation; low-standby-loss electronic controls;
reduced inlet-water temperature; thermoelectric heat pumps; ultrasonic
washing; and variable-speed motors.
The following technology options reduce both energy and water use
together (i.e., they reduce water use, thereby also inherently reducing
energy use): control strategies; flow-through heating; improved fill
control; improved food filter; improved spray-arm geometry;
microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls; modified sump geometry, with and without dual pumps;
super-critical carbon dioxide washing; variable washing pressures and
flow rates; and water re-use system.
In developing the list of technology options for this direct final
rule, DOE considered comments it had received in response to the May
2023 NOPR. Samsung Electronics America, Inc. (``Samsung'') noted \35\
that variable-speed pump motors reduce energy consumption by allowing
the dishwasher to operate at the most suitable flow rate for each
specific phase of the cleaning process. (Samsung, No. 52 at p. 2)
Samsung agreed with DOE that enhancements in dishwasher components also
contribute to energy efficiency, especially advanced technologies such
as electronic and soil-sensing controls. Samsung commented that the
technology options identified by DOE are achievable and can be
implemented by manufacturers to significantly improve energy
efficiency, reduce resource consumption, and promote sustainability
while maintaining cleaning performance that consumers expect. (Samsung,
No. 52 at pp. 2-3) As noted, DOE has maintained the technology options
discussed in the May 2023 NOPR.
---------------------------------------------------------------------------
\35\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0052.
---------------------------------------------------------------------------
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 subsequent sections of this document discuss 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. The results of the
screening analysis are discussed in greater detail in chapter 4 of the
TSD for this direct final rule.
1. Screened-Out Technologies
The following sections detail the technology options that were
screened out for this direct final rule, and the reasons why they were
eliminated.
a. Desiccant Drying
Desiccant drying relies on a material such as zeolite \36\ to
adsorb moisture to aid in the drying process and reduce drying energy
consumption. DOE is aware of dishwashers from one manufacturer on the
market in the United States that use desiccant drying.\37\
---------------------------------------------------------------------------
\36\ Zeolite is a highly porous aluminosilicate mineral that
adsorbs moisture and releases heat to aid in the drying process.
\37\ See chapter 4, section 4.2.1.1 of the January 2022
Preliminary TSD.
---------------------------------------------------------------------------
DOE has screened out desiccant drying from further consideration
because it is a unique-pathway proprietary technology. Desiccant drying
is a patented technology, and although multiple manufacturers hold
patents for dishwasher designs with desiccant drying features, DOE is
concerned that this technology option is not available for all
manufacturers.
b. Reduced Inlet-Water Temperature
Reduced inlet-water temperature requires that dishwashers tap the
cold water line for their water supply. Because most dishwashers in the
United States tap the hot water line, this technology option would
require significant alteration of existing dishwasher installations in
order to
[[Page 31416]]
accommodate newly purchased units incorporating this technology option.
Therefore, DOE has determined that it would not be practicable to
install this technology on the scale necessary to serve the relevant
market at the time of the effective date of an amended standard.
c. Supercritical Carbon Dioxide Washing
Supercritical carbon dioxide washing, which uses supercritical
carbon dioxide instead of conventional detergent and water to wash
dishes, is currently being researched. Given that this technology is in
the research stage, DOE has determined that it would not be practicable
to manufacture, install and service this technology on the scale
necessary to serve the relevant market at the time of the effective
date of an amended standard. Furthermore, because this technology is in
the research stage, it is not yet possible to assess whether it would
have any adverse impacts on equipment utility to consumers or equipment
availability, or any adverse impacts on consumers' health or safety.
d. Ultrasonic Washing
A dishwasher using ultrasonic waves to generate a cleaning mist was
produced for the Japanese market in 2002; however, this model is no
longer available on the market. Available information indicates that
the use of a mist with ion generation instead of water with detergent
would decrease cleaning performance, impacting consumer utility.
Ultrasonic dishwashing based upon soiled-dish immersion in a fluid
that is then excited by ultrasonic waves has not been demonstrated. In
an immersion-based ultrasonic dishwasher, standing ultrasonic waves
within the washing cavity and the force of bubble cavitation implosion
can damage fragile dishware. Because no manufacturers currently produce
consumer ultrasonic dishwashers, it is impossible to assess whether
this technology option would have any impacts on consumers' health or
safety, or product availability.
Based on this information, DOE has screened out both identified
product types that incorporate the ultrasonic washing technology
option.
e. Thermoelectric Heat Pumps
The thermoelectric heat pump system aims to extract waste heat from
drain water and recover heat normally lost during the drying process,
and apply it to the washing, rinsing, and drying phases, effectively
saving energy. The technology is not commercially available yet as the
technology is still in the research phase. Therefore, DOE has
determined that it would not be practicable to manufacture, install and
service this technology on the scale necessary to serve the relevant
market at the time of the effective date of the amended standards.
Furthermore, because this technology is in the research stage, it is
not yet possible to assess whether it would have any adverse impacts on
equipment utility to consumers or equipment availability, or any
adverse impacts on consumers' health or safety.
f. Water Re-Use System
This system saves water from the final rinse of a given dishwasher
cycle for use in a subsequent dishwasher cycle. A water re-use system
dishwasher also performs ``drain out'' and ``clean out'' cycles if the
dishwasher is not operated for a certain period of time. Both ``drain
out'' and ``clean out'' events consume additional water and energy
during the subsequent cycle, even though such a system saves water and
energy consumption overall.
DOE has screened out this technology option as it has determined
that leaking and contamination from a water holding tank could
potentially present negative health or safety impacts.
2. Remaining Technologies
Through a review of each technology, DOE concludes that all of the
other identified technologies listed in section IV.A.2 of this document
met all five screening criteria to be examined further as design
options in DOE's direct final rule analysis. In summary, DOE did not
screen out the following technology options:
Technology options that reduce energy use only: condensation
drying, including use of a stainless steel tub; fan/jet drying;
improved motor efficiency; increased insulation; low-standby-loss
electronic controls; and variable-speed motors.
Technology options that reduce both energy and water use together:
control strategies; flow-through heating; improved fill control;
improved food filter; improved spray-arm geometry; microprocessor
controls and fuzzy logic, including adaptive or soil-sensing controls;
modified sump geometry, with and without dual pumps; and variable
washing pressures and flow rates.
DOE 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). For additional details, see chapter 4
of the direct final rule TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of dishwashers. 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 dishwasher class, DOE
estimates the baseline cost, as well as the incremental cost for the
dishwasher 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 interpolate to define ``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-
[[Page 31417]]
tech'' level exceeds the maximum efficiency level currently available
on the market).
For this analysis, DOE used a combination of the efficiency-level
and design-option approach. This approach involved physically
disassembling commercially available products, reviewing publicly
available cost information, and modeling equipment cost. From this
information, DOE estimated the manufacturer production costs (``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. By doing this, the engineering analysis
did not factor in the additional higher-cost features with no impact on
efficiency that are included in some models. However, at efficiency
levels where the product designs significantly deviated from the
baseline product, DOE used the efficiency-level approach to determine
an MPC estimate, while removing the costs associated with non-
efficiency-related components or features. DOE also provides further
discussion on the design options and efficiency improvements in chapter
5 of the direct final rule TSD.
a. Baseline Efficiency
For each dishwasher product 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 dishwasher class represents the
characteristics of a dishwasher 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 dishwashers, DOE identified products available on the market
rated at the current energy conservation standards levels for both
standard-size and compact-size dishwasher product classes. Accordingly,
DOE analyzed these products as baseline units. DOE uses the baseline
unit for comparison in several phases of the direct final rule
analyses, including the engineering analysis, LCC analysis, PBP
analysis, and NIA. To determine energy and water savings that will
result from an amended energy conservation standard, DOE compares
energy and water consumption at each of the higher energy efficiency
levels to the energy and water consumption of the baseline unit.
Similarly, to determine the changes in price to the consumer that will
result from an amended energy conservation standard, DOE compares the
price of a unit at each higher efficiency level to the price of a unit
at the baseline. Additional details on the selection of baseline units
may be found in chapter 5 of the direct final rule TSD. In the May 2023
NOPR, DOE updated the baseline efficiency level for the compact-size
dishwasher product class, when using appendix C2, from 178 kWh/year
estimated in the January 2022 Preliminary Analysis to 191 kWh/year. 88
FR 32514, 32530. In the January 2022 Preliminary Analysis, DOE
translated the current compact-size product class standard level of 222
kWh/year, which is based on appendix C1, to an EAEU based on appendix
C2 using the baseline standby power use estimate of 2.3 watts from the
December 2016 Final Determination (see chapter 7 of the December 2016
Final Determination TSD).\38\ Id. at 32531. However, based on more
recent testing of compact-size dishwashers, DOE determined in its
analysis for the May 2023 NOPR that current baseline compact-size
dishwashers consume 0.5 watts in standby mode. Using this updated
standby power value to translate 222 kWh/year from appendix C1 to
appendix C2, DOE calculated an updated baseline EAEU value of 191 kWh/
year for compact-size dishwashers. Id. Accordingly, in the May 2023
NOPR, DOE proposed the baseline compact-size dishwasher efficiency
level to be 191 kWh/year and 3.5 gal/cycle. Id. Table IV.1 presents the
baseline levels identified for each dishwasher product class in the May
2023 NOPR.
---------------------------------------------------------------------------
\38\ To translate the current dishwasher EAEU standards from
appendix C1 to appendix C2, DOE separated the EAEU into annual
active mode energy use and annual standby mode energy use. DOE
multiplied the annual active mode energy use by 184 cycles/year and
divided by 215 cycles/year, then added back the annual standby
energy use to determine updated EAEU values based on 184 annual
cycles.
[GRAPHIC] [TIFF OMITTED] TR24AP24.008
DOE sought comment on the baseline efficiency levels analyzed in
the May 2023 NOPR for each product class. 88 FR 32514, 32531. DOE did
not receive any comments related to the selected baseline efficiency
levels, including the updated baseline efficiency level for compact-
size dishwashers in the May 2023 NOPR. DOE therefore used the baseline
efficiency levels from the May 2023 NOPR in its analysis for this
direct final rule.
b. Higher Efficiency Levels
Using the efficiency-level approach, the higher 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 this approach, DOE identified four efficiency levels
beyond the baseline for standard-size dishwashers and two for the
compact-size product class. At each higher efficiency level, both
energy use and water use decrease through the implementation of
combinations of design options that individually either reduce energy
use alone, or reduce both energy and water use together, as
[[Page 31418]]
discussed previously in section IV.A.2 of this document. Chapter 5 of
the direct final rule TSD provides a detailed discussion of the
specific design changes that DOE believes manufacturers would typically
use to meet each higher efficiency level considered in this engineering
analysis, including a discussion of whether such design changes would
reduce energy use only, or reduce both energy and water use together.
In defining the higher efficiency levels for this direct final
rule, DOE considered comments it had received in response to the higher
efficiency levels proposed in the May 2023 NOPR.
Table IV.2 and Table IV.3 show the efficiency levels DOE evaluated
for standard-size and compact-size dishwashers in the May 2023 NOPR. 88
FR 32514, 32534-32535.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.009
[GRAPHIC] [TIFF OMITTED] TR24AP24.010
For standard-size dishwashers, EL 1 corresponded to the ENERGY STAR
Version 6.0 \39\ (``ENERGY STAR V. 6.0'') level, EL 2 corresponded to a
gap-fill efficiency level between ENERGY STAR V. 6.0 and ENERGY STAR V.
7.0, and EL 3 corresponded to the ENERGY STAR V. 7.0 level (which was
also the ENERGY STAR Most Efficient criteria in 2022 and 2023). For
compact-size dishwashers, EL 1 corresponded to the ENERGY STAR V. 6.0
level. For both standard-size and compact-size dishwashers, the max-
tech efficiency level corresponded to the highest efficiency unit
available on the market at that time, excluding from consideration
models that rely on technologies that were screened out previously. 88
FR 32514, 32534-32535. In the May 2023 NOPR, DOE requested feedback on
the efficiency levels analyzed for each product class in this proposal.
88 FR 32514, 32335. DOE did not receive any comments related to the
selected efficiency levels. DOE therefore used the baseline and
incremental efficiency levels from the May 2023 NOPR in its analysis
for this direct final rule.
---------------------------------------------------------------------------
\39\ ENERGY STAR Version 6.0 Program Requirements available at:
www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Residential%20Dishwasher%20Version%206.0%20Final%20Program%20Requirements_0.pdf
---------------------------------------------------------------------------
For the reasons discussed, DOE analyzed for this direct final rule
the efficiency levels for standard-size and compact-size dishwashers
that were proposed in the May 2023 NOPR, as reproduced in Table IV.4
and Table IV.5, respectively.
[[Page 31419]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.011
[GRAPHIC] [TIFF OMITTED] TR24AP24.012
BILLING CODE 6450-01-C
DOE notes that the compact-size max-tech unit that was analyzed in
the May 2023 NOPR was not included in DOE's Compliance Certification
Database (``CCD'') as of September 2023. Models that are discontinued
over the course of a DOE rulemaking timeline remain applicable in
conducting the analysis in accordance with EPCA requirements because
such models incorporate technologically feasible design options that
manufacturers may use to achieve the corresponding efficiency levels in
commercial products. The CCD included models that exceed the efficiency
of the max-tech unit analyzed in the May 2023 NOPR; however, for these
units, there is a discrepancy between the rated EAEU in DOE's CCD and
the EAEU listed on the model's EnergyGuide label,\40\ therefore, DOE
did not consider these units for its max-tech analysis. Accordingly,
DOE has retained the same compact-size max-tech unit analyzed in this
direct final rule as that identified in the May 2023 NOPR.
---------------------------------------------------------------------------
\40\ The CCD lists models with an EAEU of 114 kWh/year and water
consumption of 1.6 gallons/cycle. However, the EnergyGuide label for
these units lists the EAEU as 154 kWh/year and water consumption of
1.8 gallons/cycle. Accordingly, DOE did not consider this unit as
the max-tech unit for this final rule analysis.
---------------------------------------------------------------------------
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, the availability and timeliness of purchasing the dishwasher
on the market. The cost approaches are summarized as follows:
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.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the bill of materials for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g., 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 this direct final rule, DOE conducted the analysis using the
physical teardown approach. For each product class, DOE tore down a
representative sample of models spanning the entire range of efficiency
levels, as well as multiple manufacturers within each product class.
DOE aggregated the results so that the cost-efficiency relationship
developed for each product class reflects DOE's assessment of a market-
representative ``path'' to achieve each higher efficiency level. The
resulting bill of materials provides the basis for the MPC estimates.
To account for manufacturers' 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 the annual Securities and Exchange
Commission (``SEC'') 10-K reports filed by publicly traded
manufacturers primarily engaged in appliance manufacturing and whose
combined product range includes dishwashers. See section IV.J.2.d of
this document and chapter 12 of the direct final rule TSD for
additional detail on the manufacturer markup.
3. Cost-Efficiency Results
To develop the incremental MPCs associated with improving product
efficiency for each product class, DOE started with the baseline unit
cost model and added the expected changes associated with improving
efficiency at each higher efficiency level. By doing this, DOE excluded
the costs of any non-efficiency related components from the more
efficient units.
Table IV.6 shows the baseline MPCs for standard-size and compact-
size dishwashers estimated for the May 2023 NOPR. 88 FR 32514, 32536.
Table IV.7 and Table IV.8 show the incremental
[[Page 31420]]
MPCs from the baseline developed in the May 2023 NOPR for standard-size
and compact-size dishwashers, respectively, in 2022 dollars. Id. at 88
FR 32536-32537.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.013
[GRAPHIC] [TIFF OMITTED] TR24AP24.014
[GRAPHIC] [TIFF OMITTED] TR24AP24.015
For this direct final rule, DOE updated the underlying raw material
and component prices used in its cost model to reflect raw material and
component prices as of March 2023. Table IV.9 presents the baseline
MPCs for each product class as determined for this final rule, in 2023
dollars. Table IV.10 and Table IV.11 provide the incremental MPCs for
each efficiency level for both product classes as determined for this
final rule.
[GRAPHIC] [TIFF OMITTED] TR24AP24.016
[[Page 31421]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.017
[GRAPHIC] [TIFF OMITTED] TR24AP24.018
BILLING CODE 6450-01-C
The detailed description of DOE's determination of costs for
baseline and higher efficiency levels is provided in chapter 5 of the
direct final rule TSD.
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 considered two distribution channels through which dishwashers
move from manufacturers to consumers. The majority of dishwasher sales
go through the direct retailer channel, in which manufacturers sell the
products directly to retailers, who then sell to consumers. This direct
retailer channel accounts for 85 percent of the dishwasher market. The
rest of the market goes through a separate distribution channel, in
which manufacturers sell the products to wholesalers, who in turn sell
the products to general contractors, then to consumers. The main
parties in the post-manufacturer distribution channels are retailers,
wholesalers, and general contractors.
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.\41\
---------------------------------------------------------------------------
\41\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
DOE relied on economic data from the U.S. Census Bureau to estimate
average baseline and incremental markups. Specifically, DOE used the
2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector to develop retailer markups.\42\
---------------------------------------------------------------------------
\42\ US Census Bureau, Annual Retail Trade Survey. 2017.
www.census.gov/programs-surveys/arts.html
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
regarding the markups analysis conducted for the May 2023 NOPR. The
approach for determining markups in this direct final rule was the same
approach DOE had used for the May 2023 NOPR analysis.
In response to the March 2023 NOPR, AHAM commented \43\ that it,
along with AHRI and other stakeholders, disputes DOE's distinction
between markups from manufacturers to end customers for the base case,
those for costs added to meet proposed standards, and the use of
incremental versus average markups. (AHAM, No. 51 at p. 18) AHAM stated
that in its comments on the 2015 NOPR contained quotes from actual
retailers about their actual practices and they contradict the DOE
process. (Id.)
---------------------------------------------------------------------------
\43\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051.
---------------------------------------------------------------------------
DOE's incremental markup approach assumes that an increase in
operating profits, which is implied by keeping a fixed average markup
when the product price goes up, is unlikely to be viable over time in a
reasonably competitive market like household appliance retailers. The
Herfindahl-Hirschman Index reported by the 2017 Economic Census
indicates that the household appliance stores sector (NAICS 443141) is
a competitive marketplace.\44\ DOE recognizes that actors in the
distribution chains are likely to seek to maintain the same markup on
appliances in response to changes in MSPs after an amendment to energy
conservation standards. However, DOE believes that retail
[[Page 31422]]
pricing is likely to adjust over time as those actors are forced to
readjust their markups to reach a medium-term equilibrium in which per-
unit profit is relatively unchanged before and after standards are
implemented.\45\ According to economic theory, firms in a perfectly
competitive market are expected to achieve only normal profits in the
long run, and any short-term economic profit would be eroded by entry
and increased competition over time. While it is acknowledged that no
real-world market perfectly fits the conditions of perfect competition,
the theory provides insights into industries and sectors that share
certain characteristics. As indicated by industry data,\46\ the
appliance retail sector is a competitive marketplace; thus, DOE
contends that an increase in profitability, which is implied by keeping
a fixed average markup when the production cost goes up, is not likely
viable in the long run.
---------------------------------------------------------------------------
\44\ 2017 Economic Census, Selected sectors: Concentration of
largest firms for the U.S. Available at www.census.gov/data/tables/2017/econ/economic-census/naics-sector-44-45.html. The Herfindahl-
Hirschman Index value can be found by navigating to the
``Concentration of largest firms for the U.S.'' table and then
filtering the industry code to NAICS 443141.The Herfindahl-Hirschman
Index reported for the largest 50 firms in household appliance
stores sector, is 123.8. Generally, a market with an HHI value of
under 1,000 is considered to be competitive.
\45\ A recent retrospective study by LBNL compared ex-ante
projections of the 2011 Direct Final Rule for Room ACs with ex-post
data across various analytical inputs. While the observed product
price data remain sparse, the available market data suggests that
for some product classes, prices did not significantly increase
after the standard change, and for others, the prices aligned with
DOE's projections. 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.
\46\ IBISWorld, US Industry Reports (NAICS): https://my.ibisworld.com/us/en/industry/home.
---------------------------------------------------------------------------
DOE acknowledges that markup practices in response to amended
standards are complex and varying with business conditions. However,
DOE's analysis necessarily only considers changes in appliance
offerings that occur in response to amended standards and isolates the
effect of amended standards from other factors. DOE agrees that
empirical data on markup practices would be desirable, but such
information is closely held and difficult to obtain. Consequently, DOE
relies to economic theory as the foundation for developing the markup
analysis. Hence, DOE continues to maintain that its assumption that
standards do not facilitate a sustainable increase in profitability is
reasonable.
The comments submitted by AHAM during the 2015 NOPR contain quotes
from their interviews with retailers, but do not provide the details
and the interview questions used by their consultant based on data
confidentiality reasons. However, without knowing what questions were
posed to the contractors and retailers, it is challenging for DOE to
evaluate the applicability of those quotes. As noted, DOE's analysis
necessarily considers a situation in which nothing changes except for
those changes in appliance offerings that occur in response to amended
standards, and this needs to be addressed clearly in the framing of the
questions.
Chapter 6 of the direct final rule TSD provides details on DOE's
development of markups for dishwashers.
E. Energy and Water Use Analysis
The purpose of the energy and water use analysis is to determine
the annual energy and water consumption of dishwashers at different
efficiencies in representative U.S. single-family homes, and multi-
family residences, and to assess the energy and water savings potential
of increased dishwasher efficiency. In order to determine
representative life-cycle costs (as discussed in IV.F), both annual
energy and water consumption are considered at each efficiency level
because the technologies to improve energy efficiency may also reduce
water usage (as discussed in IV.C.1.b). The energy and water use
analysis estimates the range of energy and water use of dishwashers in
the field (i.e., as they are actually used by consumers). The energy
and water use analysis provides the basis for other analyses DOE
performed, particularly assessments of the energy and water savings and
the savings in consumer operating costs that could result from adoption
of amended or new standards.
For this direct final rule, DOE considered comments it had received
regarding the energy and water use analysis conducted for the May 2023
NOPR. The approach used to estimate the energy and water consumption
for this direct final rule is largely the same as the approach DOE had
used for the May 2023 NOPR analysis.
In the May 2023 NOPR, DOE determined the average annual energy and
water consumption of dishwashers by multiplying the per-cycle energy
and water consumption by the number of cycles per year. 88 FR 32514,
32537. DOE used the EIA's 2020 Residential Energy Consumption Survey
(``RECS'') data to calculate an estimate of annual number of
cycles.\47\ Id. Having determined number of cycles of dishwasher use
per year for each RECS household, DOE determined the corresponding
annual energy and water consumption. Id. In the May 2023 NOPR, DOE
determined the average annual cycles of operation for dishwashers to be
197 cycles per year based on RECS 2020. (Id. 88 FR 32538)
---------------------------------------------------------------------------
\47\ U.S. Department of Energy-Energy Information
Administration, Residential Energy Consumption Survey, 2015 Public
Use Microdata Files, 2020. Washington, DC. Available at
www.eia.doe.gov/emeu/recs/recspubuse20/pubuse20.html.
---------------------------------------------------------------------------
In response to the May 2023 NOPR, Alliance for Water Efficiency
(``AWE'') recommended \48\ that DOE consider using actual data for its
assumptions about cycles per year. (AWE, No. 44 at p. 2) AWE commented
that a significant difference exists between the 197 cycles per year
that DOE is using and the 95 cycles per year the water industry
typically uses. (Id.) AWE stated that the water industry frequently
relies on residential end use data from Residential End Uses of Water,
Version 2 Water Research Foundation Report #4309b (``REUW 2016'').
(Id.) AWE also stated that its experience and academic research suggest
there are often large gaps between consumer survey responses and actual
behavior when it comes to fixture and appliance usage. (Id. at p. 3)
AWE commented that DOE could explore acquiring data from companies
using smart devices, sub-meters, or sensors installed on water meters
and supply lines in thousands of homes across the United States that
collect real-time end use data, which could then be disaggregated.
(Id.)
---------------------------------------------------------------------------
\48\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0044.
---------------------------------------------------------------------------
DOE has reviewed the REUW 2016 report published by the Water
Research Foundation, which analyzed dishwasher end-use data from
detailed log data from 762 households. DOE acknowledges that RECS is
based on household reported frequency of average dishwasher usage per
week, rather than on contemporaneous logs taken by households or meters
installed on household dishwashers, which could be more reliable on an
individual basis. However, unlike the REUW 2016, which is based on
households in the service areas of 21 U.S. utilities, the RECS 2020
consists of a nationally representative sample of housing units
including more than 10,000 households that report dishwasher usage. DOE
also acknowledges AWE's concern that survey data can be different from
field metered data. For a comparison between survey data and field
metered data, DOE referred to a report from Sun et al. that showed that
the average annual dishwasher cycle counts obtained from Pecan Street
field metered data based on a limited household sample size and limited
geographic locations were comparable with the average cycle counts
reported by RECS 2020 with a difference of three percent.\49\
Therefore,
[[Page 31423]]
DOE considers RECS to be the most nationally representative dataset to
approximate consumer dishwasher usage in the U.S. and uses it in the
analysis for this direct final rule.
---------------------------------------------------------------------------
\49\ Sun, Q., et al. 2022. Using Field-Metered Data to
Characterize Consumer Usage Patterns of Residential Dishwashers.
Lawrence Berkeley National Laboratory, Berkeley, CA.
---------------------------------------------------------------------------
AHAM commented that DOE eliminated the numerical threshold for the
significant conservation of energy savings determination that was in
the prior Process Rule, reverting to its earlier approach of
determining whether energy savings are significant on a case-by-case
basis. AHAM noted that the amended standards for dishwasher would
result in 0.31 quads, but DOE could achieve far greater savings through
other means such as public education. AHAM stated that on a monthly
basis, savings are so minuscule as to render them meaningless relative
to the potential increase in up-front purchase costs, particularly for
dishwashers on the lower end of the price scale. AHAM recommended that
DOE use median savings as a way to partially overcome the bias in the
RECS data where a few outlier high usage RECS data points distort the
results. (AHAM, No. 51 at p. 6) AHAM stated using the median LCC
savings, the savings are approximately $0.72 cents per year, which is
an amount so small as not to even be noticed by consumers on their
monthly balance sheets. (Id. at pp. 6-7) AHAM further stated that
proposed standards that are not cost effective are not economically
justified under EPCA because the savings do not justify the
manufacturer and consumer burdens that result from the amended
standards and DOE should issue a determination not to amend standards
beyond EL 1 for dishwashers. (Id.)
As described in section IV.E of this document, DOE's energy and
water use analysis for this direct final rule is derived based on RECS
2020, which provides household's dishwasher loads information ranging
from 1 cycle to 21 cycles per week, once after every meal. The
household survey-based annual energy and water use for each household
then feed into the LCC analysis. Excluding minimum and maximum values
from the RECS households samples would result in a less accurate
representation of the actual national dishwasher usage patterns and
consumption distribution exhibited by the household sample. However, as
a standardized approach, DOE presents the distributions of LCC savings
for each product class and efficiency level as histograms and boxplots
in chapter 8 of the direct final rule TSD, which can also be generated
via the published LCC spreadsheet tool. This approach allows
stakeholders to observe the full range of LCC savings over the relevant
time scale, which accounts for the total costs and savings to a
consumer over the lifetime of a new unit purchased in the compliance
year, enabling a more informed evaluation of the potential impacts of
the proposed standards. In addition, DOE's decision on amended
standards is not solely determined by the average LCC savings. While
LCC savings play a role, they are considered alongside other critical
factors, including the percentage of negatively impacted consumers, the
simple payback period, and the overall impact on manufacturers. DOE
further notes, that while AHAM submitted these comments in response to
the May 2023 NOPR, since then AHAM became a party to the Joint
Agreement and is supportive of the recommended standard adopted in this
direct final rule
The California Inventor-Owned Utilities (``CA IOUs'') \50\
recommended \51\ that DOE conduct a representative consumer survey to
review the assumption that consumers turn off the power-dry feature 50
percent of the time if such options exists, and in the absence of such
information, amend the test procedure to test the default cycle with
all manufacturer recommended settings for everyday use enabled. The CA
IOUs expressed concern that DOE lacked solid supportive data and
defaulted to the Department of Commerce Voluntary Labeling Program's
position that for ``any feature requiring a consumer interaction and
for which actual usage is unknown,'' a ``50 percent frequency'' was
assumed. (CA IOUs, No. 50 at p. 6) The CA IOUs commented that in
practice, it is unclear how often consumers actually choose to disable
power-dry and that DOE is reducing the annual energy consumption of 15
units by an average of 6 percent without proof of the expected consumer
behavior. The CA IOUs cited to a 2007 Proctor & Gamble study that
indicated 66 percent of households use the power-dry feature regularly.
The CA IOUs suggested that DOE collect data to update this conclusion
based on consumer use of power-dry, its relation to the ability to
disable the feature, and its presence in default operation or
recommendation for everyday use. (Id. at p. 7)
---------------------------------------------------------------------------
\50\ The ``CA IOUs'' includes Pacific Gas and Electric Company,
SDG&E, and SCE; collectively, the California Investor-Owned
Utilities.
\51\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0050.
---------------------------------------------------------------------------
DOE updates its analyses with the most current, nationally
representative data. As pointed out by the CA IOU, the 2007 Proctor &
Gamble study did not specify if the dishwashers of the participants had
the option to turn off heated dry, or if the heated dry option was by
default on or off, and it was unclear how the consumer samples were
selected. DOE is unaware of any nationally representative consumer data
showing consumer selection of drying options. Conducting a survey as
suggested is not viable within the context of this rulemaking, but DOE
may consider doing so for a future rulemaking. The calculation of EAEU
at 10 CFR 430.23 assumes dishwashers with the power dry feature use it
50 percent of the time. In the absence of any other nationally
representative data set, DOE is using the same assumption in this
direct final rule analysis. DOE did not include drying option
selections in this direct final rule analysis, but may consider other
assumptions regarding use of drying features in future dishwasher test
procedure rulemakings.
AWE commented that DOE should more thoroughly consider and evaluate
the energy embedded in the water that will be saved from the proposed
standard, in addition to end-user energy use. (AWE, No. 44 at p. 4) AWE
has developed a water conservation tracking tool for evaluating the
water savings, costs, and benefits of urban water conservation programs
and for projecting future water demands. (Id.) AWE further stated that
DOE could also adjust this based on the assumptions it is currently
using for private wells and DOE can calculate the emissions-related
benefits in the same way it has calculated them for direct energy
savings. (Id. at p. 5)
DOE has previously determined that EPCA does not direct DOE to
consider the energy used for utility water treatment and delivery. In a
May 2012 Final Rule on Residential Clothes Washers, DOE noted that EPCA
directs DOE to consider ``the total projected amount of energy, or as
applicable, water, savings likely to result directly from the
imposition of the standard.'' 77 FR 32308, 32346 (quoting 42 U.S.C.
6295(o)(2)(B)(i)(III)). In the May 2012 Final Rule on Residential
Clothes Washers, DOE interpreted ``directly from the imposition of the
standard'' to include energy used in the generation, transmission, and
distribution of fuels used by appliances. Unlike the energy used for
water treatment and delivery, primary energy savings and the full-fuel-
cycle measure are in a distribution chain that is directly linked to
the energy used by appliances. (Id.)
Chapter 7 of the direct final rule TSD provides details on DOE's
energy and water use analysis for dishwashers.
[[Page 31424]]
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
dishwashers. Because the technologies to improve energy efficiency may
also reduce water usage (as discussed in IV.C.1.b), the economic
impacts in the LCC and PBP include both energy consumption and water
consumption. 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:
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
and water use, maintenance, and repair). To compute the operating
costs, DOE discounts future operating costs to the time of purchase and
sums them over the lifetime of the product.
The PBP is the estimated amount of time (in years) it
takes consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of dishwashers 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
housing units. As stated previously, DOE developed household samples
from the RECS 2020. For each sample household, DOE determined the
energy and water consumption for the dishwashers and the appropriate
energy and water prices. By developing a representative sample of
households, the analysis captured the variability in energy and water
consumption and energy and water prices associated with the use of
dishwashers.
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 and water
consumption, energy and water 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 dishwasher user samples. For this
rulemaking, the Monte Carlo approach is implemented in MS Excel
together with the Crystal Ball\TM\ add-on.\52\ The model calculated the
LCC for products at each efficiency level for 10,000 housing units per
simulation run. The analytical results include a distribution of 10,000
data points showing the range of LCC savings for a given efficiency
level relative to the no-new-standards case efficiency distribution. In
performing an iteration of the Monte Carlo simulation for a given
consumer, product efficiency is chosen based on its probability. If the
chosen product efficiency is greater than or equal to the efficiency of
the standard level under consideration, the LCC 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.
---------------------------------------------------------------------------
\52\ Crystal Ball\TM\ is a commercially available software tool
to facilitate the creation of these types of models by generating
probability distributions and summarizing results within Excel.
Available at www.oracle.com/middleware/technologies/crystalball.html
(last accessed Oct. 19, 2023).
---------------------------------------------------------------------------
DOE calculated the LCC and PBP for consumers of dishwashers as if
each were to purchase a new product in the first year of required
compliance with amended standards. Amended standards apply to
dishwashers manufactured 3 years after the date on which any new or
amended standard is published. (42 U.S.C. 6295(m)(4)(B)) Therefore, DOE
used 2027 as the first year of compliance with any amended standards
for dishwashers.
Table IV.12 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 chapter 8
of the direct final rule TSD and its appendices.
BILLING CODE 6450-01-P
[[Page 31425]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.019
BILLING CODE 6450-01-C
For this direct final rule, DOE considered comments it had received
regarding the LCC analysis conducted for the May 2023 NOPR. The LCC
approach used for this direct final rule is largely the same as the
approach DOE had used for the May 2023 NOPR analysis.
In response to the May 2023 NOPR, AHAM commented that DOE should
focus on conducting a purchase decision analysis instead of relying on
outcomes and long-term cost analyses. (AHAM, No. 51 at p. 18) AHAM
commented that the logical basis for regulation lies in identifying
consumer and systemic market failures, where consumer failure refers to
making ``incorrect'' decisions due to a lack of information. (Id.) AHAM
stated that systemic market failure relates to mispricing of inputs
(such as underpricing of the environmental impacts in energy prices) or
other similar conditions. AHAM commented that while there are many
critiques of how accurate a rational choice model is for true consumer
behavior, including the recent insights of behavioral economics, all of
these discussions start from the premise of a purchase decision choice
model. AHAM commented on the importance of considering the actual
conditions and expectations of purchasers in DOE's LCC model, separate
from the broader economic impact analysis, which should be in the
National Impact Analysis. (Id.) AHAM suggested that the LCC model
should assess the extent of market failure by comparing the actual rate
of energy-efficient product purchases with the rate that rational
consumers would choose. (Id.)
The LCC analysis currently relies on market data on the
distribution of efficiency of products to assign products with varying
efficiency performance to each household when compliance with the
standard becomes required. This approach is intended to simulate the
range of individual outcomes resulting from the hypothetical setting of
a revised energy conservation standard at various levels of efficiency
when the data needed to develop a product-specific consumer choice
model are currently unavailable. This is a methodological decision made
by DOE after considering the existence of various systematic market
failures (e.g., information asymmetries, bounded rationality, etc.) and
their implication in rational versus actual purchase behavior.
Considering that individual consumer decisions may be driven by
multiple factors and may vary based on demographic features as well as
available information to consumers at the time of purchase, the data
required to develop a product specific complex consumer choice model
were unavailable in the case of dishwashers. In the LCC analysis, DOE
aims to simulate the range of individual outcomes resulting from a
hypothetical setting of revised energy efficiency standards. Both the
distribution and the national average values were considered. Moreover,
the outcome of the LCC is not considered in isolation, but in the
context of the broader set of analyses, including the NIA. DOE further
notes, that AHAM is a party to the Joint Agreement and is supportive of
the recommended standard adopted in this direct final rule.
[[Page 31426]]
AHAM stated that there have been changes in DOE's analysis for
standard-size dishwashers between the January 2022 Preliminary Analysis
and the May 2023 NOPR including the percentage of consumers
experiencing a net cost decreased from 43 percent to 3 percent and the
payback period decreased from 7 to 2.4 years and it is unclear how DOE
arrived at the new conclusions that have a significant impact on
overall energy savings estimates and economic analysis. (AHAM, No. 51
at p. 26) Whirlpool Corporation (``Whirlpool'') questioned \53\ why
there is such a big departure in consumer cost-effectiveness for EL 2
between the January 2022 Preliminary Analysis and the May 2023 NOPR.
(Whirlpool, No. 45 at pp. 3-4) Whirlpool commented that compared to the
43 percent of consumers who were estimated to experience a net cost
from EL 2 in the January 2022 Preliminary Analysis, only 3 percent of
consumers are now estimated to experience a net cost from this level in
the May 2023 NOPR. (Id.) Whirlpool further commented that given this
very large apparent change in the data and the impact that this has on
DOE's overall selection of TSLs, DOE should provide stakeholders with
supporting information/data that led to this drastic change in the
analysis. (Id.)
---------------------------------------------------------------------------
\53\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0045.
---------------------------------------------------------------------------
DOE updates its analytical inputs with the most recent available
data sources, in response to stakeholder comment, and based on
information obtained through testing, teardowns, manufacturer
interviews, and any additional research and analysis. Input updates
include MPCs, energy and water prices and price trends, dollar year,
price learning trends, product efficiency distributions, discount rate,
sales tax, and shipments. For this final rule, the LCC inputs are
summarized in Table IV.12. Because of those input changes, the LCC
results were changed in the May 2023 NOPR analysis, and again in the
direct final rule analysis compared to those from the January 2022
Preliminary Analysis. In this case, the primary driver of the decrease
in percent of consumers with a net cost is based on a change in MPC
between the January 2022 Preliminary Analysis and the May 2023 NOPR,
driven by DOE's updated engineering analysis. Specifically, based on
manufacturer feedback, DOE revisited its teardown analysis and observed
that the same technology options exist at both EL 1 and EL 2, with EL 2
units having improved control started and design tolerances. For these
reasons, the MPC at EL 2 is the same as that at EL 1, which decreases
the percent of consumers with a net cost at EL 2. DOE notes that AHAM
(of which Whirlpool is a member) supported the Recommended TSL, which
includes the same EL as the standards proposed in the May 2023 NOPR for
standard-size dishwashers.
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. An 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. To derive the learning rate parameter for
dishwashers, DOE obtained historical Producer Price Index (``PPI'')
data for appliances from the Bureau of Labor Statistics (``BLS''). A
PPI for ``all-other-miscellaneous-household-appliances'' was available
for the time period between 1988 and 2014.\54\ However, the all-other-
miscellaneous-household-appliances PPI was discontinued beyond 2014 due
to insufficient sample size. To extend the price index beyond 2014, DOE
assumed that the price index of primary products of major household
appliance manufacturing would trend similarly to all other
miscellaneous household appliances. This is because, based on
communications with BLS researchers, discontinued series are often
grouped into the primary products under the more aggregated PPI series.
Examining the PPI of all other miscellaneous household appliances and
primary products of major household appliances shows that the
magnitudes of both price trends align with each other. Inflation-
adjusted price indices were calculated by dividing the PPI series by
the gross domestic product index from Bureau of Economic Analysis for
the same years. Using data from 1988-2021, the estimated learning rate
(defined as the fractional reduction in price expected from each
doubling of cumulative production) is 24.2 percent, which results in an
average annual price decline of 0.96 percent. See chapter 8 of the
direct final rule TSD for further details on this topic.
---------------------------------------------------------------------------
\54\ U.S. Bureau of Labor Statistics, PPI Industry Data, Major
household appliance manufacturers, Product series ID: PCU
33522033522011. Data series available at www.bls.gov/ppi/.
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
regarding the methodology for calculating consumer product costs that
was presented in the May 2023 NOPR. The approach used for this direct
final rule is largely the same as the approach DOE had used for the May
2023 NOPR analysis.
In response to the May 2023 NOPR, Northwest Energy Efficiency
Alliance (``NEEA'') encouraged \55\ DOE to consider a specific learning
curve for variable-speed drives when conducting future dishwasher
standards analyses similar to its approach in the recent refrigerator
standards rulemaking. (NEEA, No. 53 at p. 2)
---------------------------------------------------------------------------
\55\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0053.
---------------------------------------------------------------------------
DOE did not consider a specific price learning curve for variable-
speed drives due to the lack of data regarding the data regarding the
relevant market share of products. DOE will consider all available
technology options and their related learning curves when conducting
future dishwasher standards analyses for standards rulemakings.
AHAM commented that DOE's application of a ``learning or experience
curve'' to reduce expected extra manufacturing costs required to meet
proposed standard levels lacks a solid theoretical foundation for why
an experience or learning curve should exist, what functional form it
should take and whether it should be a continuous function. (AHAM, No.
51 at p. 19) AHAM commented that the approach, based solely on
empirical relationships, demands clear alignment with the actual
products in question and the data used to develop the relationship.
AHAM stated that when the data takes a new shape, DOE must adjust its
equations to reflect that change as continuing to use old data and
equations simply to create a longer time series is not acceptable.
(Id.) AHAM commented that DOE's justification that continued use of
learning rates is justified by past price declines is DOE confusing
past correlation with future causation and the very severe limitations
of forward projection without a sound theoretical basis for assuming
that the correlation will continue. (Id.) AHAM further stated that
there is no particularly strong reason to expect that any future trends
will be modeled with a continuous
[[Page 31427]]
function of the form DOE is proposing and that there is an apparent
``flattening'' of the data in DOE's learning curve equation.
Additionally, AHAM stated that all recent data is above the line drawn
by the equation should give DOE significant pause to consider whether
it is modeling a relationship that no longer holds, no matter what the
regressions statistics from past data show. (Id. at pp. 19-20) AHAM
commented that such ``learning'' should not be projected beyond labor
and materials costs, given it does not logically apply to overheads,
sales, marketing, general and administrative costs, or depreciation and
financing costs. (Id. at p. 20)
DOE notes that there is considerable empirical evidence of
consistent price declines for appliances in the past few decades.
Several studies examined retail prices of various household appliances,
including dishwashers, during different periods of time and showed that
prices had been steadily falling while efficiency had been increasing,
for example Dale, et al. (2009) and Taylor, et al. (2015). Given the
limited data availability on historical manufacturing costs broken out
by different components, DOE utilized the PPI published by the BLS as a
proxy for manufacturing costs to represent the analyzed product as a
whole. While products may experience varying degrees of price learning
during different product stages, DOE modeled the average learning rate
based on the full historical PPI series to capture the overall price
evolution in relation to the cumulative shipments. When fitting the
historical PPI and cumulative annual shipments to the experience curve,
which takes the form of a power function, the resulting R-square value
is 91 percent. Despite that the observed data could deviate above or
below the fitted curve during certain periods, the high value of R-
square indicates a reasonable fit overall, although DOE recognizes the
difficulty when projecting regression results out of sample. In
addition, DOE also conducted sensitivity analyses that are based on a
particular segment of the PPI data for ``all other miscellaneous
household appliances and primary products of major household
appliances'' to investigate the impact of alternative product price
projections (low price learning and constant price) in the NIA of this
rulemaking. In all scenarios that DOE considered, the impact of the
price projection on the Net Present Value estimates is limited to
negative three percent to one percent for the adopted TSL. Overall, the
impact would not affect the policy decision. For details of the
sensitivity results, see appendix 10C of the direct final rule TSD. DOE
further notes, that AHAM is a party to the Joint Agreement and is
supportive of the recommended standard adopted in this direct final
rule.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. Based on inputs
provided by manufacturers, DOE concluded that installation costs would
not be impacted by increased efficiency levels. DOE received no
stakeholder comments on this issue.
3. Annual Energy and Water Consumption
For each sampled household, DOE determined the energy and water
consumption for dishwashers at different efficiency levels using the
approach described previously in section IV.E of this document. Both
energy and water consumption are considered in the LCC analysis because
the technologies to improve energy efficiency may also reduce water
usage (as discussed in section IV.C.1.b of this document).
4. Energy and Water Prices
a. 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 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).\56\
---------------------------------------------------------------------------
\56\ Coughlin, K. and B. Beraki. 2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
Available at ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the 2020
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.\57\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------
\57\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed Oct. 19, 2023).
---------------------------------------------------------------------------
DOE's methodology allows electricity prices to vary by sector,
region, and season. In the analysis, variability in electricity prices
is chosen to be consistent with the way the consumer economic and
energy use characteristics are defined in the LCC analysis.
DOE obtained data for calculating regional prices of natural gas
from the EIA publication, Natural Gas Navigator.\58\ This publication
presents monthly volumes of natural gas deliveries and average prices
by State for residential, commercial, and industrial customers. DOE
used the complete annual data for 2022 to calculate an average annual
price for each Census Division. Residential natural gas prices were
adjusted by applying seasonal marginal price factors to reflect a
change in a consumer's bill associated with a change in energy
consumed.
---------------------------------------------------------------------------
\58\ U.S. Department of Energy--Energy Information
Administration. Natural Gas Navigator 2022. Available at
www.eia.gov/naturalgas/data.php.
---------------------------------------------------------------------------
DOE assigned average prices to each household in the LCC sample
based on its location and its baseline electricity and gas consumption.
For sampled households who were assigned a product efficiency greater
than or equal to the considered level for a standard in the no-new-
standards case, DOE assigned marginal prices to each household based on
its location and the decremented electricity and gas consumption. In
the LCC sample, households could be assigned to one of nine Census
Divisions. See chapter 8 of the direct final rule TSD for details.
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.\59\ To estimate price trends after 2050,
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------
\59\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed June 20, 2023).
---------------------------------------------------------------------------
b. Water and Wastewater Prices
DOE obtained residential water and wastewater price data from the
Water
[[Page 31428]]
and Wastewater Rate Survey conducted by Raftelis Financial Consultants
and the American Water Works Association.\60\ The survey covers
approximately 445 water utilities and 334 wastewater utilities
analyzing each industry (water and wastewater) separately. For each
water or wastewater utility, DOE calculated the average-price-per-unit
volume by dividing the total volumetric cost by the volume delivered.
DOE also calculated the marginal price by dividing the incremental cost
by the increased volume charged at each consumption level.
---------------------------------------------------------------------------
\60\ Raftelis Financial Consultants, Inc. 2020 RFC/AWWA Water
and Wastewater Rate Survey. 2021. Charlotte, NC, Kansas City, MO,
and Pasadena, CA.
---------------------------------------------------------------------------
The samples that DOE obtained of the water and wastewater utilities
is too small to calculate regional public sector prices for all U.S.
Census Divisions. Therefore, DOE calculated regional costs for water
and wastewater service at the Census Region level (Northeast, South,
Midwest, and West) by weighting each State in a region by its
population.
For this direct final rule analysis, DOE has updated its
methodology for developing water prices for consumers who rely on a
private well-water system, instead of the public supply system in
consideration of stakeholder comments. DOE primarily considered well
maintenance costs and pump operating costs when developing the average
water price. Conversely, DOE only considered pump operating costs when
developing the marginal price for well users. As a result, the
estimated average and marginal water prices for well users are $1.24
and $0.39 per thousand gallons, respectively. For septic tank users,
DOE considered only the septic tank maintenance cost when determining
the average price and excluded the marginal cost component, as any
marginal costs are likely to be negligible. DOE is unable to develop
Census-region-level well-water and septic tank prices due to the
limitation of available data; consequently, the same values were used
for each Census Region.
To determine the current percentage of the U.S. population served
by private wells and septic tanks, DOE used historical American Housing
Survey (``AHS'') data from 1970 to 2021 to develop a projection for
2027, the effective year of potential new standards for
dishwashers.\61\
---------------------------------------------------------------------------
\61\ The U.S. Census Bureau. The American Housing Survey. Years
1970-2021. Available at www.census.gov/programs-surveys/ahs.html
(last accessed June 12, 2023).
---------------------------------------------------------------------------
DOE then conducted random simulations to determine the percentage
of households in rural areas served by private wells and septic tanks.
Based on the estimated percentages, well-water prices and septic tank
prices were assigned to sampled households accordingly. Furthermore,
DOE estimated the septic tank user population and assigned
corresponding septic tank prices to households relying on public water
systems.
To estimate the future trend for public water and wastewater
prices, DOE used data on the historic trend in the national water price
index (U.S. city average) from 1988 through 2022 provided by the Labor
Department's BLS.\62\ DOE extrapolated the future trends based on the
linear growth from 1988 to 2022. DOE used the extrapolated trend to
forecast prices through 2050. To estimate the price trend after 2050,
DOE used a constant value derived from the average values from 2046
through 2050.
---------------------------------------------------------------------------
\62\ U.S. Department of Labor-Bureau of Labor Statistics,
Consumer Price Indexes, Item: Water and sewerage maintenance, Series
Id: CUSR0000SEHG01, U.S. city average, 2022. Washington, DC.
Available at www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------
To estimate the future trend for the average well-water and septic
tank prices, DOE used data on the historic trend in the overall
national consumer price index from 1988 through 2022 provided by the
Labor Department's BLS.\63\ DOE extrapolated the future trends based on
the linear growth from 1988 to 2022. DOE used the extrapolated trend to
forecast prices through 2050. To estimate the price trend after 2050,
DOE used a constant value derived from the average values from 2046
through 2050. In addition, to estimate the future trend for the
marginal well-water price, the electricity trend was used, as described
previously in section IV.F.4.a of this document.
---------------------------------------------------------------------------
\63\ U.S. Department of Labor-Bureau of Labor Statistics,
Consumer Price Indexes, All Items, Series Id: CUUR0000SA0, U.S. city
average, 2022. Washington, DC. Available at www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------
In response to the May 2023 NOPR, AHAM commented that it previously
suggested DOE should consider the actual water costs for households on
well systems. (AHAM, No. 51 at p. 12)
AHAM commented that DOE's May 2023 NOPR approach to septic system
costs is incorrect and stated that DOE should acknowledge that there
are no incremental costs for consumers using septic systems and treat
these both well water users and septic tank users as a separate
subgroup instead of averaging them into composite water and sewer
costs. (AHAM, No. 51 at pp. 12-14)
As described in section IV.I.3 of this document, for this direct
final rule, DOE updated its method for estimating well-water and septic
costs. The updated average well-water and septic tank prices are 17.1
percent of the combined cost of public water and sewer costs. In
addition, DOE assigned either septic tank or public sewer prices to
well-water households based on the probability distributions obtained
from the AHS 2021 data.
AHAM commented that the economic value of water is undefined and an
inappropriate measure in the life cycle cost analysis. AHAM stated that
if DOE is relying, even implicitly, on the AWWA/RFC study for its
definition of economic value, as matter of administrative law, it must
make the underlying reference available for public comment before it
can use it as a source. According to AHAM, private well users pay the
actual marginal cost of water, primarily the electricity for pumping,
not an ``economic value.'' While there are embedded costs for drilling
a well, these costs are sunk and the marginal cost is only the
electricity. (AHAM, No. 51, at p. 13) AHAM suggested that if DOE
insists on the ``economic value,'' DOE should define it, demonstrate
how well-water use reduces water availability, and quantify the actual
``economic value'' of lost well water. (Id.) AHAM further stated that
even if there is an ``economic value'' of well water, it should be
considered in the NIA, not the LCC. (Id. at 16.)
DOE concurs that ``economic value of water'' is not the actual
price that well users would pay. Hence, for this direct final rule, DOE
has adjusted its methodology regarding water price for well users and
septic tank price. To derive well-water price, DOE conducted a
literature review and took into consideration the inputs provided by
AHAM. As a result, DOE estimated the average water price for well users
to be $1.24 per thousand gallons, with a marginal price of $0.39 per
thousand gallons representing the electricity cost for pumping.
Regarding septic tank price, DOE estimated the average cost to be $1.30
per thousand gallons and excluded the marginal cost component, as it
may be negligible or close to $0 per thousand gallons. For references
and details of the well-water and septic tank prices, see chapter 8 of
the direct final rule TSD. In addition, in the LCC, DOE has explicitly
assigned water and wastewater sources, along with corresponding
specific prices, to RECS households randomly using different
probability distributions for urban and rural households by Census
Region based on AHS 2021 data. Similarly, both the public and private
water and wastewater costs were accounted for in
[[Page 31429]]
the NIA. The term ``economic value'' of water refers to the National
Groundwater Association's use of the term.\64\ The AWWA/Raftelis data
used to develop the public water and wastewater costs are available
from an online subscription.\65\
---------------------------------------------------------------------------
\64\ Groundwater Use in the United States of America. National
Ground Water Association, www.ngwa.org/docs/default-source/default-document-library/groundwater/usa-groundwater-use-fact-sheet.pdf?sfvrsn=5c7a0db8_4.
\65\ The American Water Works Association & Raftelis Financial
Consultants, Inc., 2022 RFC/AWWA Water and Wastewater Rate Survey.
2023. Charlotte, NC. The latest report is available at https://engage.awwa.org/PersonifyEbusiness/Bookstore/Product-Details/productId/194150460.
---------------------------------------------------------------------------
AWE commented that DOE should extrapolate from the annualized rate
increases for 1998 to 2020 from the AWWA/Raftelis Water and Wastewater
Rate Survey. (AWE, No. 44 at p. 1) AWE stated that instead of using
AWWA/Raftelis for historic and current pricing and a CPI-based approach
for future price trends, AWE supports the use of data from the AWWA/
Raftelis Survey as the basis for DOE's calculation for both the
historic and current water and wastewater prices and for price trends.
(Id. at p. 2) AWE commented that it is confident that the price trend
data in the AWWA/Raftelis Survey are more accurate and representative
because it is based on a review of the actual rates from a large sample
set of utilities from nearly all U.S. states on a biennial basis and
that it is better to use rate data when performing calculations based
on specific volumes of water saved rather than data on average customer
bills, which is what the water and sewerage maintenance item from CPI
is based on. (Id.)
AWWA/Raftelis conducts water and wastewater rates survey, which
used to be every two years and now every six months, for U.S. water and
wastewater utilities. For each of the AWWA/Raftelis surveys, utilities
in the sample respond voluntarily to the survey questions, with a
limited number of overlapping utilities in each survey year. For this
reason, it is possible that the annual change in rates may be affected
by which utilities respond to the survey, which is also known as sample
bias. In addition, the rate data are reported in usage tiers set by
each utility and not on actual household water consumption.
The BLS Water and Sewer CPI sample represents 600 to 700 quotes for
water or sewer service, and the sample is consistent for four years,
which reduces the possible year over year bias as compared to AWWA/
Raftelis. Additionally, the Water and Sewer CPI was estimated based on
consumer water bills that reflect household water consumption.
Therefore, DOE concludes that the BLS' CPI water and sewer data better
reflect the nationally representative price trends than the AWWA/
Raftelis data. DOE therefore used the CPI for water and sewer for its
public utilities' water and wastewater price trend forecast for this
final rule.
DOE used a similar methodology to develop future water and
wastewater prices in its clothes washer standard rulemaking as it used
in the March 2024 final rule analysis. DOE used a constant value
derived from the average values from 2046 through 2050 to estimate the
price trend after 2050, whereas in the May 2023 NOPR, published May 19,
2023 (88 FR 32514), DOE used the 2050 value for the price trend after
2050.\66\
---------------------------------------------------------------------------
\66\ Additional details regarding the dishwasher analysis are
provided in the May 2023 NOPR TSD, available at www.regulations.gov/document/EERE-2019-BT-STD-0039-0032.
---------------------------------------------------------------------------
AHAM stated DOE should recognize that not all households directly
pay for water and sewer. (AHAM, No. 51 at p. 16) As such, AHAM asserted
that DOE is overestimating the actual annual operating cost savings
that these consumers would receive from reduced water use in
dishwashers. (Id.) AHAM commented that in many circumstances the costs
for water and sewer are either borne by landlords or are combined into
generalized common charges. (Id.)
AHAM identified two subgroups of consumers who might not see
monetary savings from a reduction in water use as a result of an
amended standard: (1) condominium owners in multi-family buildings
where water and sewer costs are included in common charges and (2) low-
income renters in multi-family housing where water is not sub-metered
and/or costs are covered by landlords. (AHAM, No. 51 at p. 16) As it
applies to multi-family housing, AHAM stated that installing sub-
metering equipment may cost thousands of dollars per unit including
plumbing charges and many landlords do not find it attractive or
practical to sub-meter. (Id.) Additionally, for condominium properties,
the owner owns the dishwasher, leading to a reverse split-incentive
such that the household will not see the benefit directly and will have
a negative LCC savings. Further, raising the price of a dishwasher will
also encourage the household to continue repairing the dishwasher
rather than purchasing a more expensive new one, reducing or
eliminating the project national savings. As such, AHAM recommend that
DOE recognize this sub-group and address the relevant financial
situation. (Id. at pp. 16-17)
DOE notes that while RECS does identify multi-family housing, it
does not provide information on whether a household's water bill is
included in the rent, included in the common charges, or paid directly
to the utility. For the first group of multi-family unit owners (such
as apartments, condominiums, and co-ops) identified in RECS and
reporting that energy bills are not paid directly to the utilities, DOE
posits that those households also do not directly pay their water
bills, considering that some multi-family units may have a shared water
meters, which is more common than shared electricity or gas meters. It
is, therefore, likely that households that do not directly pay their
energy bills to the utilities, also do not directly pay for their water
bill. This group represents less than 1.2 percent of the national
sample, indicating a relatively small group. For the second group of
low-income renters in multi-family buildings, DOE adopted a
conservative approach assuming that those households that reported as
not paying their energy bill would also not pay their water bill and,
therefore, do not accrue any operating cost savings from the considered
standards. This issue is accounted for in the low-income subgroup
analysis. Based on DOE's assessment, the low-income subgroup has
comparable LCC savings and fraction of consumers experiencing a net
cost as the national sample. See section IV.I.1 and section V.B.1.b of
this document for the detailed methodology and the results of the low-
income subgroup analysis.
With regards to the split-incentive issue, the existence of a split
incentive across a substantial number of U.S. households, in which a
tenant pays for the cost of electricity while the landlord furnishes
appliances, has been identified through a number of studies of
residential appliance use broadly, and for dishwashers in low-income
settings in specific. Building from early work including Jaffe and
Stavins (1994),\67\ Murtishaw and Sathaye (2006) \68\ discussed the
presence of landlord-tenant split-incentives (i.e., the ``principal-
agent problem'') in the context of refrigeration, water heating, space
heating, and lighting in rental housing. While the study did not solely
focus on the low-income household,
[[Page 31430]]
they estimated that 35 percent of total residential site energy use is
subject to split-incentives based on these four products alone. In the
specific context of dishwashers, based on RECS 2020, 88 percent of low-
income individuals who rented their homes and owned a dishwasher were
found to pay the electricity bill resulting from their energy use, such
that they were likely subject to a scenario in which their landlord
purchased the appliance, but they paid the operating costs. Spurlock
and Fujita (2022),\69\ Houde and Spurlock (2016),\70\ and citations
therein (e.g., Davis 2012) \71\ also further elaborated on split-
incentives in rental housing and their association with generally lower
efficiency among the appliances used by renters. As a result, DOE's
analysis concludes that there is a substantial fraction of split-
incentive issue among low-income households. Therefore, DOE divide the
low-income subgroup into renters and non-renters categories, for which
different assumptions were applied. For low-income households who are
home-owners and do pay for the product and energy costs, DOE considers
that those households will experience an impact from any proposed
standard and DOE then uses the same methodology applied to the national
LCC analysis. For low-income households who are renters and do not pay
for energy bills, DOE considers the amended standards will have no
impact on those households. In the split-incentive case in which the
low-income households who are renters and pay for energy bills, the
landlord would bear the cost of the appliance, and the household would
pay the operating costs and therefore accrue the operating cost savings
from the considered standards. Although paid by different individuals,
the difference between the incremental equipment cost and the life
cycle operating cost savings would still be characterized as the LCC
savings associated with the dishwasher in question in the national LCC
analysis. Therefore, the split-incentives cases would not affect the
methodology of the national LCC savings estimates. More details can be
found in section IV.I.1 of this document as well as in chapter 11 of
the direct final rule TSD.
---------------------------------------------------------------------------
\67\ A.B. Jaffe and R.N. Stavins (1994) The energy-efficiency
gap What does it mean? Energy Policy, 22 (10) 804-810, Available at
doi.org/10.1016/0301-4215(94)90138-4.
\68\ Murtishaw, S., & Sathaye, J. (2006). Quantifying the Effect
of the Principal-Agent Problem on US Residential Energy Use.
Lawrence Berkeley National Laboratory. Available at
escholarship.org/uc/item/6f14t11t.
\69\ C.A. Spurlock and K.S. Fujita (2022) Equity implications of
market structure and appliance energy efficiency regulation, Energy
Policy, 165 (112943), Available at doi.org/10.1016/j.enpol.2022.112943.
\70\ S. Houde, C.A. Spurlock (2016) Minimum Energy Efficiency
Standards for Appliances: Old and New Economic Rationales. Economics
of Energy & Environmental Policy, 5(2), 65-84. Available at
www.jstor.org/stable/26189506.
\71\ L.W. Davis (2012) Evaluating the slow adoption of energy
efficient investments: are renters less likely to have energy
efficient appliances? The Design and Implementation of US Climate
Policy, University of Chicago Press (2012), pp. 301-316.
---------------------------------------------------------------------------
As in the case when some consumers may delay or forgo their
purchase due to the increased first cost caused by the standards, DOE
assumed that those consumers would hand wash their dishes and accounted
for the possible increase in energy and water use as an additional cost
to the standards case in the National Impact Analysis. DOE considered
this as a conservative approach since there are alternatives to
handwashing dishes such as extended repair, or purchasing a second-hand
unit.
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 entail no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency products. However, products having significantly higher
efficiencies compared to baseline products are more likely to incur
higher repair and maintenance costs, because their increased complexity
and higher part count typically increases the cumulative probability of
failure.
In this direct final rule analysis, DOE derived repair costs for
dishwashers for each efficiency level based on manufacturers' inputs on
the repair frequency and costs. DOE did not include routine maintenance
costs as no evidence or data shows that the routine maintenance costs
or frequency would vary with increased efficiency. See chapter 8 of the
direct final rule TSD for further details.
6. Product Lifetime
For dishwashers, DOE developed a distribution of lifetimes from
which specific values are assigned to the appliances in the samples.
DOE conducted an analysis of actual lifetime in the field using a
combination of historical shipments data, the stock of the considered
appliances in the American Housing Survey, and responses in RECS on the
age of the appliances in the homes. The data allowed DOE to estimate a
survival function, which provides an average appliance lifetime. This
analysis yielded a lifetime probability distribution with an average
lifetime for dishwashers of approximately 15.2 years. DOE has found no
evidence or information related to variation in dishwasher lifetime by
product class or efficiency level. See chapter 8 of the direct final
rule TSD for further details.
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 dishwashers
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.\72\ 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, the
application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\72\ 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; 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
\73\ (``SCF'') starting in 1995 and ending in 2019 and multiple sources
for asset interest rates from 1993-2022. Using the SCF and other
sources, DOE
[[Page 31431]]
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 4.2 percent. See
chapter 8 of the direct final rule TSD for further details on the
development of consumer discount rates.
---------------------------------------------------------------------------
\73\ 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 Oct. 19, 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).
To estimate the energy efficiency distribution of dishwashers for
2027, DOE used data from the engineering analysis, the manufacturer
interviews, and DOE's Compliance Certification Database. DOE assumed no
annual efficiency improvement for the no-new-standards case based on
the current market evaluation and the observation that there was no
shift in efficiency distributions compared to those used in the
December 2016 Final Determination. DOE received no comments from
stakeholders related to this assumption. The estimated market shares
for the no-new-standards case for dishwashers are shown in Table IV.13.
See chapter 8 of the direct final rule TSD for further information on
the derivation of the efficiency distributions.
In response to the May 2023 NOPR, Appliance Standards Awareness
Project et al.\74\ (``ASAP et al.'') commented \75\ that DOE's
assignment of efficiency levels in the no-new-standards case reasonably
reflects actual consumer behavior. (ASAP et al., No. 46 at p. 3) For
the final rule, DOE maintained the approach used in the May 2023 NOPR
to derive efficiency distributions in the no-new-standards case.
---------------------------------------------------------------------------
\74\ The ASAP et al. includes Appliance Standards Awareness
Project, American Council for an Energy-Efficient Economy, Consumer
Federation of America, Elevate, National Consumer Law Center,
Natural Resources Defense Council, and Southwest Energy Efficiency
Project.
\75\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0046.
[GRAPHIC] [TIFF OMITTED] TR24AP24.020
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency level to the dishwasher
purchased by each sample household in the no-new-standards case. The
resulting percentage shares within the sample match the market shares
in the efficiency distributions.
In response to the May 2023 NOPR, ASAP et al. stated that they
agree with DOE's determination that assigning dishwasher efficiencies
for the LCC analysis, which is in part random, is more representative
of actual consumer behavior than assigning efficiencies based solely on
cost-effectiveness. (ASAP et al., No. 46 at p. 3)
ASAP et al. commented that consumer purchasing decisions for an
infrequent purchase such as a dishwasher can be based on a variety of
complex issues such as the timing of the purchase, competing demands
for funds, and the information available to the consumer. (ASAP et al.,
No. 46 at p. 3)
ASAP et al. additionally noted the split-incentive or principal-
agent problem in which there are misaligned incentives in rental
properties because the landlord purchases and installs the dishwasher
while the renter is responsible for paying the utility bill. (Id.)
While DOE acknowledges that economic factors play a role when
consumers decide on what type of dishwasher to install, assignment of
dishwasher efficiency for a given installation, based solely on
economic measures such as life-cycle cost or simple payback period,
most likely would not accurately reflect actual real-world
installations. There are a number of market failures discussed in the
economics literature that illustrate how purchasing decisions with
respect to energy efficiency are unlikely to be perfectly correlated
with energy use, as described below. DOE finds that the method of
assignment, which is in part random, simulates behavior in the
dishwasher market, where market failures result in purchasing decisions
not being perfectly aligned with economic interests. DOE further
emphasizes that its approach does not assume that all purchasers of
dishwasher products make economically irrational decisions (i.e., the
lack of a correlation is not the same as a negative correlation). By
using this approach, DOE acknowledges the uncertainty inherent in the
data and does not assume certain market conditions that are unsupported
given the available evidence.
The following discussion provides more detail about the various
market failures that affect dishwasher purchases. First, consumers are
motivated by more than simple financial trade-offs. There are consumers
who are willing to pay a premium for more
[[Page 31432]]
energy-efficient products because they are environmentally
conscious.\76\ There are also several behavioral factors that can
influence the purchasing decisions of complicated multi-attribute
products, such as dishwashers. For example, consumers (or decision
makers in an organization) are highly influenced by choice
architecture, defined as the framing of the decision, the surrounding
circumstances of the purchase, the alternatives available, and how they
are presented for any given choice scenario.\77\ The same consumer or
decision maker may make different choices depending on the
characteristics of the decision context (e.g., the timing of the
purchase, competing demands for funds), which have nothing to do with
the characteristics of the alternatives themselves or their prices.
Consumers or decision makers also face a variety of other behavioral
phenomena including loss aversion, sensitivity to information salience,
and other forms of bounded rationality.\78\ Thaler, who won the Nobel
Prize in Economics in 2017 for his contributions to behavioral
economics, and Sunstein point out that these behavioral factors are
strongest when the decisions are complex and infrequent, when feedback
on the decision is muted and slow, and when there is a high degree of
information asymmetry.\79\ These characteristics describe almost all
purchasing situations of appliances and equipment, including
dishwashers. The installation of a new or replacement dishwashers is
done very infrequently, as evidenced by the mean lifetime of 15.2
years. Further, if the purchaser of the dishwasher is not the entity
paying the energy costs (e.g., a building owner and tenant), there may
be little to no feedback on the purchase. Additionally, there are
systematic market failures that are likely to contribute further
complexity to how products are chosen by consumers, as explained in the
following paragraphs. The first of these market failures--the split-
incentive or principal-agent problem--is likely to significantly affect
dishwashers. The principal-agent problem is a market failure that
results when the consumer that purchases the equipment does not
internalize all of the costs associated with operating the equipment.
Instead, the user of the product, who has no control over the purchase
decision, pays the operating costs. There is a high likelihood of
split-incentive problems in the case of rental properties where the
landlord makes the choice of what dishwasher to install, whereas the
renter is responsible for paying energy bills.
---------------------------------------------------------------------------
\76\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., &
Russell, C.S. (2011): ``Factors influencing willingness-to pay for
the ENERGY STAR[supreg] label,'' Energy Policy, 39 (3), 1450-1458
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed August 1, 2023).
\77\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014).
``Choice Architecture'' in The Behavioral Foundations of Public
Policy, Eldar Shafir (ed).
\78\ Thaler, R.H., and Bernartzi, S. (2004). ``Save More
Tomorrow: Using Behavioral Economics in Increase Employee Savings,''
Journal of Political Economy 112(1), S164-S187. See also Klemick,
H., et al. (2015) ``Heavy-Duty Trucking and the Energy Efficiency
Paradox: Evidence from Focus Groups and Interviews,'' Transportation
Research Part A: Policy & Practice, 77, 154-166 (providing evidence
that loss aversion and other market failures can affect otherwise
profit-maximizing firms).
\79\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale
University Press.
---------------------------------------------------------------------------
In addition to the split-incentive problem, there are other market
failures that are likely to affect the choice of dishwasher efficiency
made by consumers. For example, unplanned replacements due to
unexpected failure of equipment such as dishwashers are strongly biased
toward like-for-like replacement (i.e., replacing the non-functioning
equipment with a similar or identical product). Time is a constraining
factor during unplanned replacements, and consumers may not consider
the full range of available options on the market, despite their
availability. The consideration of alternative product options is far
more likely for planned replacements and installations in new
construction.
Additionally, Davis and Metcalf \80\ conducted an experiment
demonstrating that, even when consumers are presented with energy
consumption information, the nature of the information available to
consumers (e.g., from EnergyGuide labels) results in an inefficient
allocation of energy efficiency across households with different usage
levels. Their findings indicate that households are likely to make
decisions regarding the efficiency of the air conditioning equipment of
their homes that do not result in the highest net present value for
their specific usage pattern (i.e., their decision is based on
imperfect information and, therefore, is not necessarily optimal).
Also, most consumers did not properly understand the labels
(specifically whether energy consumption and cost estimates were
national averages or specific to their State). As such, consumers did
not make the most informed decisions.
---------------------------------------------------------------------------
\80\ Davis, L.W., and G.E. Metcalf (2016): ``Does better
information lead to better choices? Evidence from energy-efficiency
labels,'' Journal of the Association of Environmental and Resource
Economists, 3(3), 589-625 (Available at: www.journals.uchicago.edu/doi/full/10.1086/686252) (Last accessed August 1, 2023).
---------------------------------------------------------------------------
In part because of the way information is presented, and in part
because of the way consumers process information, there is also a
market failure consisting of a systematic bias in the perception of
equipment energy usage, which can affect consumer choices. Attari et
al.\81\ show that consumers tend to underestimate the energy use of
large energy-intensive appliances (such as air conditioners,
dishwashers, and clothes dryers), but overestimate the energy use of
small appliances (such as light bulbs). Therefore, it is possible that
consumers systematically underestimate the energy use associated with
dishwashers, resulting in less cost-effective purchases.
---------------------------------------------------------------------------
\81\ Attari, S.Z., M.L. DeKay, C.I. Davidson, and W. Bruine de
Bruin (2010): ``Public perceptions of energy consumption and
savings.'' Proceedings of the National Academy of Sciences 107(37),
16054-16059 (Available at: www.pnas.org/content/107/37/16054) (Last
accessed August 1, 2023).
---------------------------------------------------------------------------
These market failures affect a sizeable share of the consumer
population. A study by Houde \82\ indicates that there is a significant
subset of consumers that appear to purchase appliances without taking
into account their energy efficiency and operating costs at all.
---------------------------------------------------------------------------
\82\ Houde, S. (2018): ``How Consumers Respond to Environmental
Certification and the Value of Energy Information,'' The RAND
Journal of Economics, 49 (2), 453-477 (Available at:
onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12231) (Last
accessed August 1, 2023).
---------------------------------------------------------------------------
The existence of market failures in the residential sector is well
supported by the economics literature and by a number of case studies.
If DOE developed an efficiency distribution that assigned dishwasher
efficiency in the no-new-standards case solely according to energy and
water use or economic considerations, such as life-cycle cost or
payback period, the resulting distribution of efficiencies within the
consumer sample would not reflect any of the market failures or
behavioral factors above. Thus, DOE concludes such a distribution would
not be representative of the dishwasher market. Further, even if a
specific household is not subject to the market failures above, the
purchasing decision of dishwasher efficiency can be highly complex and
influenced by a number of factors (e.g., aesthetics, brand, lifestyle,
etc.) not captured by the building characteristics available in the
RECS sample. These factors can lead to households or building owners
choosing a dishwasher efficiency that deviates from the efficiency
predicted using only energy use or economic considerations
[[Page 31433]]
such as life-cycle cost or payback period.
There is a complex set of behavioral factors, with sometimes
opposing effects, affecting the dishwasher market. It is impractical to
model every consumer decision incorporating all of these effects at
this extreme level of granularity given the limited available data.
Given these myriad factors, DOE suspects the resulting distribution of
such a model, if it were possible, would be very scattered with high
variability. It is for this reason DOE utilizes a random distribution
(after accounting for efficiency market share constraints) to
approximate these effects. The methodology is not an assertion of
economic irrationality, but instead, it is a methodological
approximation of complex consumer behavior. The analysis is neither
biased toward high or low energy savings. The methodology does not
preferentially assign lower-efficiency dishwashers to households in the
no-new-standards case where savings from the rule would be greatest,
nor does it preferentially assign lower-efficiency dishwashers to
households in the no-new-standards case where savings from the rule
would be smallest. Some consumers were assigned the dishwashers that
they would have chosen if they had engaged in perfect economic
considerations when purchasing the products. Others were assigned less-
efficient dishwashers even where a more-efficient product would
eventually result in life-cycle savings, simulating scenarios where,
for example, various market failures prevent consumers from realizing
those savings. Still others were assigned dishwashers that were more
efficient than one would expect simply from life-cycle costs analysis,
reflecting, say, ``green'' behavior, whereby consumers ascribe
independent value to minimizing harm to the environment.
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 and water savings by
calculating the energy and water savings in accordance with the
applicable DOE test procedure, and multiplying those savings by the
average energy and water 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 and water use, NPV, and future manufacturer cash
flows.\83\ 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.
---------------------------------------------------------------------------
\83\ 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.
---------------------------------------------------------------------------
Total shipments for dishwashers are developed by considering the
demand from replacements for units in stock that fail and the demand
from first-time owners (``FTOs''), which are the households without
existing dishwashers. DOE calculated shipments due to replacements
using the retirement function developed for the LCC analysis and
historical data from AHAM. DOE estimated the ratio of households that
would become FTOs each year based on the historical housing stock data,
the estimated shipments of replacement units and the estimated shipment
to FTOs. DOE calculated shipments of FTOs by multiplying the forecasted
housing stock by the annualized ratio of existing households without a
dishwasher that would purchase this product over the period 2027-2056,
based on the housing stocks from AEO2023. See chapter 9 of the direct
final rule TSD for details.
H. National Impact Analysis
The NIA assesses the national energy savings (``NES''), national
water savings (NWS), and the NPV from a national perspective of total
consumer costs and savings that would be expected to result from new or
amended standards at specific efficiency levels.\84\ (``Consumer'' in
this context refers to consumers of the product being regulated.) DOE
calculates the NES, NWS, and NPV for the potential standard levels
considered based on projections of annual product shipments, along with
the annual energy and water consumption and total installed cost data
from the energy and water use and LCC analyses. For the present
analysis, DOE projected the energy and water savings, operating cost
savings, product costs, and NPV of consumer benefits over the lifetime
of dishwashers sold from 2027 through 2056.
---------------------------------------------------------------------------
\84\ The NIA accounts for impacts in the United 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 and water 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 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 and water
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.14 summarizes the inputs and methods DOE used for the NIA
analysis for the final rule. Discussion of these inputs and methods
follows the
[[Page 31434]]
table. See chapter 10 of the direct final rule TSD for further details.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.021
BILLING CODE 6450-01-C
1. Product Efficiency Trends
A key component of the NIA is the trend in efficiency projected for
the no-new-standards case and each of the standards cases. Section
IV.F.8 of this document describes how DOE developed an 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.
DOE assumed that the shipment-weighted efficiency would not increase
annually for the dishwasher product classes.
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 (2027). 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. More details can be found in chapter 10 of the direct final
rule TSD.
2. National Energy and Water Savings
The national energy and water savings analysis involves a
comparison of national energy consumption of the considered products
between each potential standards case (``TSL'') and the case with no
new or amended energy conservation standards. DOE calculated the
national energy and water consumption by multiplying the number of
units (stock) of each product (by vintage or age) by the unit energy
and water consumption (also by vintage). DOE calculated annual NES and
NWS based on the difference in national energy and water 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 AEO2023.
Cumulative energy and water savings are the sum of the NES and NWS 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.
As discussed in section V.B.4 of this document, DOE has concluded
that the standards adopted in this direct final rule will not lessen
the utility or performance of the dishwashers under consideration in
this rulemaking. Specifically, the amended standards adopted in this
direct final rule require the use of the test procedure at appendix C2,
which includes a minimum cleaning performance threshold to determine if
a dishwasher ``completely washes a normally soiled load of dishes,'' so
as to better represent consumer use of the product. Dishwashers that
comply with the amended standards will provide consumer-acceptable
level of cleaning performance and the rated energy and water
consumption will be representative of consumer-acceptable cleaning
performance. In the NES and NWS analysis, therefore, DOE assumed that
the adopted standards would not result in a direct rebound effect
purportedly arising from consumers resorting to handwashing, increased
pre-rinsing, or other consumer behaviors that increase the energy and
water consumption of dishwashing as a
[[Page 31435]]
result of reduced dishwasher cleaning performance. Use of the new test
appendix C2 test procedure may instead improve dishwasher cleaning
performance because dishwashers will meet a minimum cleaning
performance index, thereby reducing consumer handwashing, pre-rinsing,
and other less efficient behaviors. DOE has nevertheless taken a
conservative approach and assumed no reduction in handwashing or other
inefficient behavior (e.g., running a ``heavy'' cycle) as a result of
this rulemaking.
However, in the NES and NWS analysis, DOE did account for the
possible increase in energy and water use from handwashing dishes for
households that would not purchase a new dishwasher purportedly due to
the higher purchase costs under the amended standards. DOE adopted a
conservative approach to these situations when households opt not to
purchase a new dishwasher since there are alternatives to handwashing
dishes: some households may keep their dishwasher longer than they
might otherwise (i.e., extending the lifetime by repairing their unit);
may use disposable plates and utensils; or may purchase a second-hand
unit. Furthermore, for those households that still would forgo a new
dishwasher, DOE did not account for the additional time or value of
time required for handwashing.
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 \85\
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 direct final rule TSD.
---------------------------------------------------------------------------
\85\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed Oct.
19, 2023).
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
in response to the May 2023 NOPR regarding national energy and water
savings, including potential rebound effects.
The CA IOUs stated DOE is underestimating the water and energy
savings from dishwasher use compared to hand washing, noting DOE
estimates that hand washing consumes 140 percent more energy and 200
percent more water than a dishwasher, based on two European studies
from 2005-2006 and an article from the U.S. Geological Survey. The CA
IOUs reviewed these data sources and identified limitations in their
applicability or determined they were outdated in their estimates of
energy and water used for handwashing dishes because the studies
suggest cultural differences may dictate handwashing practices and the
international studies may not accurately represent practices of
American consumers. Additionally, the CA IOUs noted that the USGS
article does not cite specific references and that the underlying data
that the USGS uses significantly overestimates the dishwashers' water
consumption. (CA IOUs, No. 50 at pp. 2-3) The CA IOUs recommend
incorporating a more extensive data set with more countries to mitigate
bias when applying international studies and that DOE should reduce a
dishwasher's low-end water consumption to align with current
regulations and market information. (Id. at pp. 3-4)
Regarding hand washing water consumption, DOE used the weighted
average dishwasher water consumption in the no-new-standards case and
assumed that hand washing would consume 200 percent of the water used
in machine washing for the same load based on literature review data. A
2005 study conducted at Bonn University in Germany found that, on
average, hand washing used 67 percent more energy and more than 450
percent more water than machine washing.\86\ A United Kingdom (UK)
study in 2006 quantified the energy and water consumption of washing by
hand as a function of place settings.\87\ The study demonstrated that,
on average, washing eight place settings by hand used approximately 210
percent more energy and 250 percent more water than washing by machine.
The U.S. Geological Service (USGS) provided estimates for water
consumption from dishwashers as compared to water consumption from
doing dishes by hand.\88\ The USGS reported that dishwashers typically
use between 6 and 16 gallons per cycle, and that dishwashing by hand
uses between 9 and 27 gallons per cycle. Using these sources, DOE
estimated that hand washing consumed 200 percent of the water used in
machine washing.
---------------------------------------------------------------------------
\86\ Stamminger, R., R. Badura, G. Broil, S. Dorr, and A.
Elschenbroich. A European Comparison of Cleaning Dishes by Hand.
2003. Proceedings of EEDAL conference. University of Bonn: Germany.
(Last accessed February, 8, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
\87\ Market Transformation Programme-Briefing Note. BNW16: A
comparison of washing up by hand with a domestic dishwasher.
February 13, 2006. Market Transformation Programme, United Kingdom.
\88\ U.S. Geological Service (USGS). How Much Water Do You Use
at Home? (Last accessed January 18, 2024.) https://water.usgs.gov/edu/activity-percapita.php.
---------------------------------------------------------------------------
Excluding minimum or maximum values, as the CA IOUs suggest, would
result in a less accurate representation of the actual water
consumption patterns exhibited by dishwashers as well as by households'
hand washing. Further, DOE notes that the majority of studies cited by
the CA IOUs occur in laboratory settings or span brief time periods
(from a couple of hours to two weeks), so may not be representative of
typical householder behaviors. Additionally, the sole field-metered
study (Richter, 2011) found that relative to machine washing,
handwashing used 200 percent more water,\89\ which is consistent with
the current DOE estimates for energy and water use with hand washing.
---------------------------------------------------------------------------
\89\ Richter, Christian Paul, 2011. Use of dishwashers:
observation of consumer habits in the domestic environment. (Last
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
---------------------------------------------------------------------------
AHAM and Whirlpool commented that energy conservation standards
beyond EL 1 will cause rebound consumer behavior, such as running the
dishwasher more than once to reach the desired cleanliness, re-rinsing
dishes before placing them in the dishwasher, or handwashing, all of
which undercut projected energy and water savings. (AHAM, No. 51 at pp.
5-6; Whirlpool, No. 45 at p. 5) AHAM stated that consumers are already
hesitant to use their dishwashers for reasons not yet known and DOE
should not adopt energy conservation standards--which because of the
anti-backsliding rule cannot be undone if the results are as AHAM
predicts--that could make it less likely consumers will purchase or use
their efficient dishwashers. (AHAM, No.
[[Page 31436]]
51 at pp. 5-6) Whirlpool commented that negative rebound effects, such
as consumer compensatory behavior, would reduce much of the expected
gains from amended standards. (Whirlpool, No. 45 at pp. 3, 5) Whirlpool
further stated that DOE needs to perform a detailed analysis of these
possible rebound effects, and include this analysis in this rulemaking
docket, make the analysis available to stakeholders for review, and DOE
should account for this in their determination in selecting an
appropriate EL. (Whirlpool, No. 45 at p. 5) Competitive Enterprise
Institute (``CEI et al.'') \90\ asserted \91\ that the proposed
rulemaking violates EPCA's mandate that DOE cannot set an efficiency
standard that compromises appliance quality or fails to save consumers
a significant amount of energy and/or water. (CEI et al., No. 48 at pp.
1-2) CEI et al. also asserted that the proposed rule saves so little
energy and water that it fails any interpretation of this provision.
CEI et al. commented that the proposed rule would save consumers $17
over the life of a standard-size dishwasher, which works out to $1.12
per year, but the savings are undercut if the proposed rule increases
the need to hand wash dishes instead of running them in the dishwasher
or to run the load twice. (CEI et al., No. 48 at p. 5) CEI et al.
stated that the insignificant direct energy savings for consumers
cannot be salvaged by adding in the agency's claims of environmental
and public health benefits, including climate benefits. CEI et al.
further asserted that the inclusion of ``the need to confront the
global climate crisis'' as a factor in determining the significance of
the energy savings is not appropriate and cannot rescue the proposed
rule from significance. (Id.)
---------------------------------------------------------------------------
\90\ The CEI et al. includes comments of the Competitive
Enterprise Institute, AMAC Action, America First Policy Institute,
American Consumer Institute, Americans for Prosperity, Caesar Rodney
Institute, Center of the American Experiment, Consumers' Research,
Energy & Environment Legal Institute, Foundation Supporting Climate
Science, Free Enterprise Project, Heartland Institute, Heritage
Foundation, Independent Women's Forum, Independent Women's Voice,
Institute for Energy Research, John Locke Foundation, Project 21,
Rio Grande Foundation, and Roughrider Policy Center.
\91\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0048.
---------------------------------------------------------------------------
AWE encouraged DOE to carefully consider product performance in
setting standards. (AWE, No. 44 at p. 6) AWE stated that there are many
examples of high-performing products that are also water-efficient and
noted that products must meet standards for both parameters to earn
EPA's WaterSense label. (Id.) AWE commented that poor product
performance can potentially undercut water and energy savings if it
leads to a backlash of public opinion or contributes to the ``hacking''
of products. (Id.) Accordingly, AWE recommended DOE consider comments
about product performance from manufacturers and other stakeholders.
(Id.)
Sub-Zero Group, Inc. (``Sub-Zero'') asserted \92\ that these design
changes will cause consumers to compensate for performance degradation
by pre-rinsing dishes or using wash cycle options that consume more
energy. (Sub-Zero, No. 47 at pp. 1-2)
---------------------------------------------------------------------------
\92\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0047.
---------------------------------------------------------------------------
DOE has considered the evidence and arguments put forward by these
commenters, reviewed available literature, and has concluded that the
adopted standards are not likely to cause the types of consumer
behavior suggested by commenters, such as increased handwashing,
prewashing, and changes in dishwasher use. In a 2020 rulemaking, DOE
considered similar comments and determined that a ``short-cycle''
product class for dishwashers was warranted. In part, DOE based that
determination on its view that existing standards failed to account for
pre-washing or consumers washing the same load multiple times. DOE
determined that a short-cycle ``could'' prevent handwashing or re-
washing. 85 FR 68723. DOE recognizes that the conclusion reached here
is a departure from that in the 2020 rule. For the reasons that follow,
DOE no longer agrees with the 2020 Rule's assumption that diminished
performance resulting from standards will result, in handwashing and
rewashing. Whatever effect prior standards may have had on handwashing,
pre-washing, and re-washing, DOE concludes that the standards adopted
here are unlikely to have such an effect. Furthermore, as previously
discussed, on February 14, 2024, DOE received a second joint statement
from the same group of stakeholders that submitted the Joint Agreement
in which the signatories corroborate this conclusion stating that
dishwashers can provide cleaning performance at levels consistent with
those on the market today when they meet the recommended standard
levels.\93\
---------------------------------------------------------------------------
\93\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
DOE disagrees with the comments asserting that the standards
adopted here will decrease dishwasher performance, thereby inducing
consumers to increase pre-washing, handwashing, or changes to
dishwasher use. As an initial matter, the academic literature does not
support the assertion that dishwasher efficiency is correlated with
consumer dishwashing behavior.94 95 96 More importantly, as
discussed in section IV.B of this document, DOE has determined that the
technology options likely to be used to meet the standards would not
have a significant adverse impact on the utility of the product to
subgroups of consumers. Furthermore, as discussed in section V.B.4 of
this document, DOE has determined that the adopted standards cannot
compromise the utility that consumers expect from dishwashers because
the test procedure at appendix C2 requires that a test cycle achieve a
minimum cleaning performance threshold to determine if a dishwasher,
when tested according to the DOE test procedure, completely washes a
normally soiled load of dishes. Accordingly, the test procedure ensures
that any dishwasher tested for certification will only have a valid
energy and water representation if such dishwashers also meet or exceed
a minimum level of cleaning performance. Thus, even if a diminishment
in performance could lead to increased pre-washing or handwashing,
there is no evidence to believe that the standards adopted here will
result in any diminishment in performance. Therefore, DOE does not
expect any rebound effect due to a theoretical compromised cleaning
performance in the standards case. Additionally, DOE assumes that the
consumer's pre-clean behavior would not change in the standards case
compared to the no-new standards case due to the cleaning performance
issue, and therefore, has no impact on the savings estimates.
---------------------------------------------------------------------------
\94\ Richter, Christian Paul, 2011. Use of dishwashers:
observation of consumer habits in the domestic environment. (Last
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
\95\ Stamminger, et al., 2017. A European Comparison of Cleaning
Dishes by Hand. (Last accessed January 23, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
\96\ Lotta Theresa Florianne Schencking and Rainer Stamminger,
2022. What science knows about our daily dishwashing routine. (last
accessed January 23, 2024.) www.degruyter.com/document/doi/10.1515/tsd-2022-2423/html?lang=en.
---------------------------------------------------------------------------
By contrast, DOE does recognize that a small portion of consumers
possibly might forgo the purchase of a new dishwasher due to the
increased purchase price, may use disposable plates and utensils, keep
their current dishwasher longer than they otherwise would and handwash
their dishes.
[[Page 31437]]
Accordingly, DOE's national impact analysis accounts for consumer
behaviors, such as handwashing, due to the price elasticity considered
in the standards case.
Regarding EPA's WaterSense label, DOE notes that dishwashers are
not products eligible for EPA's WaterSense label; additionally,
WaterSense is a voluntary program, similar to EPA's ENERGY STAR
Program, which includes voluntary energy and water use standards for
dishwashers.
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 and water 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
dishwashers 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 2056, which is the end date of the projection
period, the average dishwasher price is projected to drop 29.2 percent
relative to 2020. DOE's projection of product prices is described in
appendix 10C of the direct final rule 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
dishwashers. In addition to the default price trend, DOE considered two
product price sensitivity cases: (1) a constant price scenario; and (2)
a high price decline scenario based on the combined PPI series of ``all
other miscellaneous household appliances'' and ``primary products of
major household appliance manufacturing'' between the years of 1988-
2008, which shows a faster price decline than the full time series
between the years of 1988-2022. The derivation of these price trends
and the results of these sensitivity cases are described in appendix
10C of the direct final rule 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 2046-2050 average 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 direct final rule TSD.
The water cost savings are calculated using the estimated water
savings in each year and the projected water and wastewater prices. To
estimate water and wastewater prices in future years, DOE multiplied
the weighted average marginal national water and wastewater prices by
the weighted average of water price projections of both public and
private water and wastewater sources. For the public water and
wastewater sources, the water price projection was developed as a
linear regression based on historical 1986-2022 water and sewerage
maintenance CPI data to forecast prices through 2050. For years after
2050, DOE adopted a flat price trend based on average price from 2046
through 2050. For the private well marginal water cost, the cost is
only related to the additional pumping energy use; therefore, DOE used
the projection of annual national average residential electricity price
changes in the Reference case from AEO2023. The Reference case has an
end year of 2050. The 2046-2050 average was used for all years after
2050. For septic tank users, the marginal wastewater costs were
considered as zero and no price trends were required.
DOE forecasted an initial drop in dishwasher shipments in response
to an increase in purchase price attributable to potential standards-
related efficiency increases. For the selected TSL (TSL3) and the max-
tech TSL (TSL5), a 0.03 percent and a 2.29 percent of the shipments
drop were projected during the 30-year analysis period compared to the
No-New-Standards case, respectively. DOE assumed that those consumers
who forgo buying a dishwasher because of the higher purchase price
would then wash their dishes by hand, and DOE estimated the energy and
water use of washing dishes by hand (see chapter 10 of the direct final
rule TSD for details). As discussed in section V.B.4 of this document,
DOE has determined that the adopted standards are achievable without
impacting consumer utility. Therefore, DOE does not expect consumers to
behave differently in handwashing and pre-rinsing dishes among the
considered efficiency levels.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
final rule, 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.\97\ 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.
---------------------------------------------------------------------------
\97\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March
11, 2024).
---------------------------------------------------------------------------
ASAP et al. commented that DOE's analysis shows that the consumer
benefits, even at the more conservative discount rate, outweigh the
maximum costs to manufacturers by over seven times. (ASAP, No. 46 at p.
1)
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 final rule, DOE
analyzed the impacts of the considered standard levels on three
subgroups: (1) low-income households, (2) senior-only households, and
(3) well-water-using households. The analysis used subsets of the RECS
2020 sample composed of
[[Page 31438]]
households that meet the criteria for the considered subgroups. DOE
used the LCC and PBP spreadsheet model to estimate the impacts of the
considered efficiency levels on these subgroups. Chapter 11 of the
direct final rule TSD describes the consumer subgroup analysis.
1. Low-Income Households
The identification of low-income households depends on family size
and income level. Low-income households are significantly more likely
to be renters or to live in subsidized housing units, compared to
households that are not low-income. In these cases, the landlord
purchases the equipment and may pay the energy bill as well.
For this direct final rule analysis, DOE used RECS data to divide
low-income households into three sub-subgroups: (1) renters who pay the
energy bill, (2) renters who do not pay the energy bill, and (3)
homeowners.\98\ For large appliance such as dishwashers, renters are
unlikely to be purchasers. Instead, the landlord would bear the cost,
and some or none of the cost could get passed on to the renter. Renters
who pay the energy bill would receive the energy cost savings from
higher-efficiency appliances. This disaggregation allows DOE to
determine whether low-income households are disproportionately affected
by an amended energy conservation standard in a more accurate manner.
---------------------------------------------------------------------------
\98\ The energy bill includes fuel types of electricity, natural
gas, or propane consumed by a household.
---------------------------------------------------------------------------
Table IV.15 shows the distribution of low-income household
dishwasher users with respect to whether they rent or own and whether
they pay the energy bill.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.022
BILLING CODE 6450-01-C
In response to the May 2023 NOPR, Samsung stated its appreciation
for DOE's analysis of the proposed standards levels on low-income
households. Samsung commented that DOE's analysis shows that it is
unlikely that renters purchase large appliances like dishwashers.
Samsung noted that landlords typically bear the cost while renters
directly benefit from higher-efficiency appliances through reduced
energy costs. Samsung commented that considering the small percentage
of low-income consumers in DOE's analysis experiencing a net LCC cost
at TSL 3 (2 percent for standard-size dishwashers and 0 percent for
compact-size dishwashers) and the positive average LCC impact, TSL 3
offers equitable outcomes for different consumer groups. Samsung added
that the simple payback periods indicate that the initial investment in
more efficient dishwashers can be recouped within a short timeframe.
(Samsung, No. 52 at p. 3)
DOE agrees that TSL 3 provides equitable outcomes for different
consumer groups.
AHAM commented that it commissioned Bellomy Research to conduct a
study focusing on low-income households. (AHAM, No. 51 at p. 4)
[[Page 31439]]
AHAM commented that this research does not constitute a full
marketplace analysis, but does provide additional information on the
effects of higher appliance prices on low-income households and is
helpful in understanding the real-world impact DOE's proposed standards
may have. (Id.) AHAM stated 75 percent of U.S. households own a
dishwasher and that fewer than 40 percent of households with gross
incomes of under $40,000 own a dishwasher and that costs are the
primary consideration when considering a dishwasher purchase. AHAM
noted that dishwashers may be seen as discretionary because handwashing
is an option, and that this means that a significant portion of lower
income populations are spending more than other consumers on their
water and electricity bills due to handwashing. (Id. at p. 3) AHAM
asserted that amended standards beyond EL 1 are unnecessary given these
successes and unjustified under EPCA given the limited opportunity for
energy savings and the disproportionate impacts amended standards will
have on low-income consumers, noting that most standard-size
dishwashers are certified to ENERGY STAR V. 6.0 (i.e., EL 1). (Id. at
pp. 1-2) AHAM commented that standards beyond EL 1 are likely to
disproportionately, negatively impact low-income consumers and drive
negative, unintended consumer behaviors that negate predicted savings.
(AHAM, No. 51 at pp. 2-3) AHAM urged DOE to exercise restraint and
consider energy conservation standards for dishwashers that do not
exceed EL 1, as outlined in the January 2022 Preliminary TSD, and
investigate other approaches to achieve additional energy and water
savings without creating this undue burden on low-income and
underserved communities. (Id. at p. 5)
DOE welcomes the opportunity to review the Bellomy report, but has
not received a copy of the Bellomy research; nor is the report
available online. DOE notes that, while unable to review the specific
survey instrument and resulting dataset, this summary of AHAM survey
findings implies that the framing does not reflect the context of a
revised minimum energy conservation standard. Specifically, these are
impacts AHAM is claiming would occur based on the full cost of a new
dishwasher and are not specifically relevant to the potential increased
incremental cost of purchasing a new dishwasher in a standards case
(which is substantially less than the full cost of a dishwasher).
Additionally, based on DOE's estimates, the installed price of EL1 is
the same as EL2 which is the selected level for the standard size
dishwashers. Therefore, all consumers, including low-income consumers,
would not experience additional incremental cost at EL2 compared to
EL1. Moreover, DOE's low-income LCC subgroup analysis uses inputs
specific to low-income consumers to estimate the impact of adopted
standards. The results indicate that only two percent of the low-income
consumers would experience a net cost. DOE further notes, that AHAM is
a party to the Joint Agreement and is supportive of the recommended
standard adopted in this direct final rule.
2. Senior-Only Households
DOE defined a senior-only household as having all occupants with
ages of 65 years or greater. Using RECS 2020 data, senior-only
households represent 23 percent of households that have and use
dishwashers.
3. Well-Water Households
AHAM recommended that DOE consider well-water users as a distinct
sub-group given the differences in costs between publicly supplied and
household-supplied water and the resulting impacts on operating cost
savings. (AHAM at No. 51 at p. 16) AHAM further commented that at EL2
for standard dishwashers, using the appropriate cash costs for water
and sewer, the mean LCC savings decline by nearly 50 percent. AHAM
asserted that this makes it glaringly obvious that this group is worth
direct consideration and DOE must acknowledge that its proposed
standards create significant burden for them and adjust its proposal
accordingly. (Id.)
DOE defined a well-water household as (1) having a dedicated water
well for that particular household; (2) distributing water to no other
households from its water well; and (3) having no connection to a
public water utility water line. RECS 2020 data do not indicate whether
a household uses a water well, so DOE used AHS data to estimate the
percentage of households with dedicated water wells. Additionally, DOE
used AHS data from 1970 to 2021 to develop a projection by U.S. Census
Region. Use of septic tanks for wastewater effluent was also noted.
Given that the majority of wells and septic tanks are located in
rural areas, the probability of a household owning a well and/or a
septic tank is significantly higher in rural areas than in urban areas.
Therefore, DOE distinguishes rural and urban households when assigning
the water and wastewater sources to the RECS household samples, and
using different probability distributions of owning a well and a septic
tank by Census Region based on AHS 2021 data.
Chapter 11 of the direct final rule 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 dishwashers and to
estimate the potential impacts of such standards on direct 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 rulemaking. 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. 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
[[Page 31440]]
DOE and non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the direct final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the dishwasher manufacturing
industry based on the market and technology assessment, and publicly
available information. This included a top-down analysis of dishwasher
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 dishwasher manufacturing
industry, including company filings of form 10-K from the SEC,\99\
corporate annual reports, the U.S. Census Bureau's Annual Survey of
Manufactures (``ASM''),\100\ and reports from Dun & Bradstreet.\101\
---------------------------------------------------------------------------
\99\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (``EDGAR'') system. Available at
www.sec.gov/edgar/search/ (last accessed Nov. 18, 2023).
\100\ U.S. Census Bureau, Annual Survey of Manufactures.
``Statistics for Industry Groups and Industries in the U.S (2021).''
Available at www.census.gov/programs-surveys/asm/data/tables.html
(last accessed Nov. 14, 2023).
\101\ The Dun & Bradstreet Hoovers login is available at
app.dnbhoovers.com (last accessed Nov. 14, 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 dishwashers 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. 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 chapter 12
of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to new
or 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 2024 (the base year of the analysis) and continuing to
2056. DOE calculated INPVs by summing the stream of annual discounted
cash flows during this period. For manufacturers of dishwashers, DOE
used a real discount rate of 8.5 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 new or
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
and shipments analysis, and information gathered from industry
stakeholders during the course of manufacturer interviews conducted in
support of the May 2023 NOPR. 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
direct final rule TSD.
a. Manufacturer Production Costs
Manufacturing more efficient products is typically more expensive
than manufacturing baseline products 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.
For this analysis, DOE used a combination of design and efficiency
engineering approaches. This approach involved physically disassembling
commercially available products, reviewing publicly available cost
information, and modeling equipment cost. 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. For a complete
description of the MPCs, see section IV.C of this document and chapter
5 of the direct final rule 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 mix 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 2024 (the base year) to 2056 (the end year of
the analysis period). See section IV.G of this document and chapter 9
of the direct final rule TSD for additional details.
c. Capital and Product Conversion Costs
New or amended energy conservation standards could cause
manufacturers to incur conversion costs to bring their production
facilities and dishwasher designs into compliance. DOE evaluated the
level of conversion-related expenditures that would be needed to comply
with each considered efficiency
[[Page 31441]]
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 new
or amended energy conservation standards.
DOE relied on information derived from manufacturer interviews, the
engineering analysis, and product teardowns to evaluate the level of
capital and product conversion costs manufacturers would likely incur
at the various efficiency levels. During interviews, DOE asked
manufacturers to estimate the capital conversion costs to meet the
various efficiency levels. This feedback was compared to findings from
the engineering analysis to determine the validity of investment
levels. DOE also asked manufacturers to estimate the redesign effort,
engineering resources, and marketing expenses required at various
efficiency levels to quantify the product conversion costs. Based on
manufacturer feedback, DOE also estimated ``re-flooring'' costs
associated with replacing obsolete display models in big-box stores
(e.g., Lowe's, Home Depot, Best Buy) due to more stringent standards.
Some manufacturers stated that with a new product release, big-box
retailers discount outdated display models and manufacturers share any
losses associated with discounting the retail price. The estimated re-
flooring costs for each efficiency level were incorporated into the
product conversion cost estimates, as DOE modeled the re-flooring costs
as a marketing expense. DOE also estimated industry costs associated
with the new appendix C2, as finalized in the January 2023 TP Final
Rule. Among other updates, appendix C2 contains provisions for a
minimum cleaning index threshold to validate the regulated test cycle.
See 88 FR 3234, 3271-3272, 3281. At each efficiency level, DOE included
the costs associated with re-rating compliant basic models in
accordance with appendix C2. 88 FR 3234, 3271-3272. Based on
manufacturer feedback, DOE expects some manufacturers may incur one-
time costs if their current testing laboratories are at capacity and
additional laboratory space or test stations are required. DOE includes
these one-time costs in its capital conversion cost estimates. DOE
interviewed manufacturers representing approximately 90 percent of
industry shipments. In interviews, multiple manufacturers provided
estimates for the expected upfront capital costs associated with
implementing the cleaning performance test (e.g., additional test
stations, equipment upgrades for existing stations, building
modifications, etc.). DOE considered these costs in its conversion cost
estimates, as appendix C2 would go into effect at the time when
compliance is required for any amended energy conservation standards.
Manufacturer feedback on conversion costs was aggregated to protect
confidential information. DOE then scaled up the aggregate capital and
product conversion cost feedback from interviews to estimate total
industry conversion costs. DOE adjusted the conversion cost estimates
developed in support of the May 2023 NOPR to 2022$ for this direct
final rule.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the direct final rule and the year
by which manufacturers must comply with the new or amended standard.
The conversion cost figures at each analyzed TSL can be found in
section V.B.2.a of this document. For additional information on the
estimated capital and product conversion costs, see chapter 12 of the
direct final rule TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs 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 manufacturer markup 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 tiered 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'' 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 production costs increase
with efficiency, this scenario implies that the per-unit dollar profit
will increase. Based on publicly available financial information, as
well as comments from manufacturer interviews, DOE assumed average
gross margin percentages of 19.4 percent for both standard-size and
compact-size product classes.\102\ Manufacturers noted that this
scenario represents the upper bound of the dishwasher industry's
profitability in the standards case because manufacturers can fully
pass on additional product costs due to standards to consumers.
---------------------------------------------------------------------------
\102\ The gross margin percentage of 19.4 percent is based on a
manufacturer markup of 1.24.
---------------------------------------------------------------------------
The tiered scenario starts with the three tiers of manufacturer
markups wherein higher efficiency products have a higher markup than
low efficiency products. In the no-new-standards case, the three tiers
are baseline efficiency, ENERGY STAR V. 6.0, and ENERGY STAR V. 7.0
(which corresponds to the ENERGY STAR Most Efficient qualification
criteria in 2022). In the standards case, DOE models the breadth of
manufacturers' portfolio of products shrinking and amended standards,
resulting in higher-tier products moving to lower tiers. As a result,
higher efficiency products that previously commanded the ENERGY STAR V.
6.0 and 2022 ENERGY STAR Most Efficient manufacturer markups are
assigned the baseline and ENERGY STAR V. 6.0 manufacturer markups,
respectively. This scenario reflects a concern about product
commoditization at higher efficiency levels as efficiency
differentiators are eliminated.
A comparison of industry financial impacts under the two
manufacturer markup scenarios is presented in section V.B.2.a of this
document.
3. Discussion of MIA Comments
For this direct final rule, DOE considered comments it had received
regarding its MIA presented in the May 2023 NOPR. The approach used for
this direct final rule is largely the same approach DOE had used for
the May 2023 NOPR analysis.
In response to the May 2023 NOPR, AHAM stated that it cannot
comment on the accuracy of DOE's approach for including how
manufacturers might or might not recover potential investments (i.e.,
the accuracy of DOE's manufacturer markup scenarios), but that AHAM
supports DOE's intent in the
[[Page 31442]]
microwave ovens SNOPR (``August 2022 SNOPR'') energy conservation
standards rulemaking to include those costs and investments in the
actual costs of products and retail prices. AHAM urged DOE to apply the
same conceptual approach used in the August 2022 SNOPR in this
dishwashers rulemaking and all future rulemakings. (AHAM, No. 51 at p.
21)
DOE models different standards-case manufacturer markup scenarios
to represent the uncertainty surrounding the potential impacts on
prices and profitability for manufacturers following the implementation
of amended energy conservation standards (see section IV.J.2.d of this
document). The analyzed manufacturer markup scenarios vary by
rulemaking as they are meant to reflect the potential range of
financial impacts for manufacturers of the specific covered product or
equipment. For the May 2023 NOPR, DOE applied the preservation of gross
margin percentage scenario to reflect an upper bound of industry
profitability and a tiered scenario to reflect a lower bound of
industry profitability under amended standards. 88 FR 32514, 32549. DOE
used these scenarios to reflect the range of realistic profitability
impacts under more stringent standards. Under the preservation of gross
margin scenario for dishwashers, the incremental increase in MPCs--at
most analyzed efficiency levels--result in an increase in per-unit
dollar profit per unit sold. In interviews, multiple manufacturers
emphasized the competitive nature of the dishwasher industry and the
importance of offering dishwashers at competitive price points. Some
manufacturers expressed concern that they would not be able to maintain
their current manufacturer markups under more stringent standards.
Thus, while manufacturers will likely continue to differentiate
products and garner higher manufacturer markups based on consumer
features (e.g., Wi-Fi enablement), brand recognition, energy
efficiency, etc., DOE believes that maintaining the industry average
manufacturer markup, reflected by the preservation of gross margin
percentage scenario, represents an appropriate upper bound to industry
pricing and profitability. Applying the approach used in the microwave
ovens rulemaking (i.e., a conversion-cost-recovery scenario) would
reflect a scenario where dishwasher manufacturers would increase
manufacturer markups under more stringent standards. Based on
information gathered during confidential interviews in support of the
May 2023 NOPR and a review of financial statements of six companies
engaged in manufacturing dishwashers, DOE does not expect that the
dishwasher industry would increase manufacturer markups under an
amended standard. Furthermore, in response to the May 2023 NOPR, DOE
did not receive any public or confidential data indicating that
industry would increase manufacturer markups in response to more
stringent standards. Therefore, DOE maintained the two manufacturer
markup scenarios from the May 2023 NOPR for this direct final rule
analysis. DOE further notes, that AHAM is a party to the Joint
Agreement and is supportive of the recommended standard adopted in this
direct final rule.
AHAM urged DOE to consider cumulative regulatory burden in its
analysis and decision-making process. AHAM commented that the nature of
EPCA's requirements that energy conservation standards be reviewed
every 6 years creates a never-ending cycle in which manufacturers need
to constantly update or redesign products to meet new or amended
standards. AHAM commented the cumulative regulatory burden is
significant for home appliance manufacturers when redesigning products
and product lines for consumer clothes dryers, residential clothes
washers, conventional cooking products, dishwashers, refrigerators,
refrigerator-freezers, and freezers, miscellaneous refrigeration
products, room air conditioners, and microwave ovens. AHAM noted that
many of these rulemakings are expected to have compliance dates in
2027. (AHAM, No. 51 at p. 22) AHAM asserted that engineers would need
to spend all their time redesigning products to meet more stringent
energy efficiency standards, pulling resources from other development
efforts and business priorities. AHAM asserted that DOE's analysis does
not adequately account for cumulative regulatory burden. AHAM
encouraged DOE to acknowledge the cumulative regulatory burden its
proposals place on industry and suggested that DOE could reduce
cumulative regulatory burden by prioritizing rulemakings, spacing out
the timing of final rules, allowing more lead time by delaying the
publication of final rules in the Federal Register after they have been
issued, and reducing the stringency of standards such that fewer
products would require redesign. (Id. at p. 23) AHAM encouraged DOE to
incorporate combined conversion costs across rulemakings into the GRIM
in order to quantify cumulative regulatory burden, and to consider the
potential impact of these rulemakings more broadly on the economy and
on inflation. AHAM stated that the appropriate approach is to include
costs of manufacturers needing to comply with multiple regulations
across product categories as well as the same product, noting that the
manufacturer impact analysis does not adequately analyze this issue.
(Id. at p. 24)
Whirlpool commented that manufacturers are facing unprecedented
cumulative regulatory burden due to DOE energy conservation standards,
citing more stringent proposed standards and tight compliance deadlines
for over 10 DOE-covered product categories manufactured and sold by
Whirlpool. Whirlpool commented that many of these proposed rules, if
finalized, would have compliance dates in 2026 or 2027. Whirlpool, a
member of AHAM and party to the Joint Agreement, asserted that
manufacturers may be forced to make difficult tradeoffs and potentially
stop many projects over a multi-year period focused on cost reduction,
quality improvement, or innovation; and instead focus their resources
mainly on compliance to these amended standards. (Whirlpool, No. 45, at
p. 4)
DOE analyzes cumulative regulatory burden in accordance with
section 13(g) of appendix A. As such, DOE details the rulemakings and
expected conversion expenses of Federal energy conservation standards
that could impact dishwasher original equipment manufacturers
(``OEMs'') that take effect approximately 3 years before or after the
2027 compliance date in section V.B.2.e of this document. As shown in
Table V.11, DOE considers the rulemakings referenced by AHAM and
Whirlpool as potentially contributing to cumulative regulatory burden
in this direct final rule analysis. DOE notes that regulations that are
not finalized are not considered in its cumulative regulatory burden
analysis, as the timing, cost, and impacts of unfinalized rules are
speculative. However, to aid stakeholders in identifying potential
cumulative regulatory burden, DOE does list rulemakings in Table V.11
that have proposed rules, which have tentative compliance dates,
compliance levels, and compliance cost estimates. Regarding AHAM's
suggestion about spacing out the timing of final rules for home
appliance rulemakings, DOE has statutory requirements under EPCA on the
timing of rulemakings. For dishwashers, refrigerators, refrigerator-
freezers, and freezers, consumer cooking products, residential clothes
washers, consumer clothes dryers, and room air conditioners, amended
standards apply
[[Page 31443]]
to covered products manufactured 3 years after the date on which any
new or amended standard is published. (42 U.S.C. 6295(m)(4)(A)(i)) For
miscellaneous refrigeration products, amended standards apply 5 years
after the date on which any new or amended standard is published. (42
U.S.C. 6295(l)(2)) However, DOE notes that the multi-product Joint
Agreement recommends alternative compliance dates for refrigerators,
refrigerator-freezers, and freezers; consumer conventional cooking
products; residential clothes washers; consumer clothes dryers; and
miscellaneous refrigeration products.\103\ As a result, the expected
compliance dates for many of the home appliance rulemakings AHAM listed
will be spread out compared to the estimated compliance dates resulting
from EPCA-specified lead times. See section V.B.2.e of this document
for additional details. Regarding AHAM's recommendation of combining
the product conversion costs from multiple regulations into the GRIM,
DOE is concerned that combined results would make it more difficult to
discern the direct impact of the amended standard on covered
manufacturers. If DOE were to combine the conversion costs from
multiple regulations, as requested, it would be appropriate to match
the combined conversion costs with the combined revenues of the
regulated products. Conversion costs would be spread over a larger
revenue base and potentially result in less severe INPV impacts when
evaluated on a percent change basis.
---------------------------------------------------------------------------
\103\ The Joint Agreement is available in the docket at
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055.
---------------------------------------------------------------------------
In response to the May 2023 NOPR, Gazoobie commented \104\ that
taking 91 percent of dishwashers off the market will lead to severe
supply chain issues and product shortages for minimal savings. Gazoobie
asserted that supply chain issues could lead to higher prices than
estimated, and facing shortages, more consumers will repair their older
and less efficient dishwashers. Further, Gazoobie stated that DOE
should not adopt a rule that takes so many units out of existence and
recommended DOE adopt a lower TSL that removes less than 33 percent of
the units or finalize a no new standards rule to see if supply chain
issues becomes resolved over the next few years. (Gazoobie, No. 38 at
p. 1)
---------------------------------------------------------------------------
\104\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0038.
---------------------------------------------------------------------------
DOE does not expect that the levels adopted in this direct final
rule, which align with the levels proposed in the May 2023 NOPR, would
lead to product shortages. Manufacturers would have until 2027 (3 years
after the direct final rule is published in the Federal Register) to
redesign models to meet the amended standards and/or increase
production capacity of compliant models. DOE notes that most OEMs
already offer models that meet the adopted TSL. Of the 19 OEMs offering
standard-size products, 16 OEMs offer products that meet the efficiency
level required. All the compact-size dishwasher OEMs currently offer
products that meet the adopted TSL. Furthermore, as discussed in
section V.B.2.c of this document, manufacturers did not express any
concerns about production capacity at the levels adopted in this direct
final rule. Additionally, DOE notes that TSL 3 corresponds to the
levels recommended in the Joint Agreement, which includes signatories
representing dishwasher manufacturers.
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 in 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 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 of the direct final rule TSD. The analysis
presented in this notice 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 EPA.\105\
---------------------------------------------------------------------------
\105\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed Oct. 24,
2023).
---------------------------------------------------------------------------
The on-site operation of dishwashers involves combustion of fossil
fuels and results in emissions of CO2, NOX,
SO2, CH4, and N2O where these products
are used. Site emissions of these gases were estimated using Emission
Factors for Greenhouse Gas Inventories and, for NOX and
SO2, emissions intensity factors from an EPA
publication.\106\
---------------------------------------------------------------------------
\106\ U.S. Environmental Protection Agency. External Combustion
Sources. In Compilation of Air Pollutant Emission Factors. AP-42.
Fifth Edition. Volume I: Stationary Point and Area Sources. Chapter
1. Available at www.epa.gov/air-emissions-factors-and-quantification/ap-42-compilation-air-emissions-factors#Proposed/
(last accessed Oct. 24, 2023).
---------------------------------------------------------------------------
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 direct final rule TSD.
The emissions intensity factors are expressed in terms of physical
units per MWh or 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 the emissions control programs discussed in the following
paragraphs, and the Inflation Reduction Act.\107\
---------------------------------------------------------------------------
\107\ 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. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed Oct. 24, 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
[[Page 31444]]
January 1, 2015.\108\ 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, for states subject to SO2 emissions limits
under CSAPR, 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.
---------------------------------------------------------------------------
\108\ 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), and EPA issued the CSAPR Update for the 2008
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------
However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants.\109\ 77 FR 9304 (Feb. 16, 2012). The final rule
establishes power plant emission standards for mercury, acid gases, and
non-mercury metallic toxic pollutants. 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 will generally reduce
SO2 emissions. DOE estimated SO2 emissions
reduction using emissions factors based on AEO2023.
---------------------------------------------------------------------------
\109\ In order to continue operating, coal power plants must
have either flue gas desulfurization or dry sorbent injection
systems installed. Both technologies, which are used to reduce acid
gas emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------
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 cases, NOX
emissions would remain near the limit even if electricity generation
goes down. Depending on the configuration of the power sector in the
different regions and the need for allowances, however, NOX
emissions might not remain at the limit in the case of lower
electricity demand. That would mean that 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. Standards would be expected to reduce
NOX emissions in the States not covered by CSAPR. DOE used
AEO2023 data to derive NOX 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 final rule, for the purpose of
complying with the requirements of Executive Order 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 final rule.
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.
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 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 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 IWG on the Social Cost of Greenhouse Gases
or by another means, did not affect the rule ultimately adopted by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions using SC-GHG values that
were based on the interim values 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''). The SC-GHG 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, the SC-GHG 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-GHG therefore, reflects the societal value of reducing emissions
of the gas in question by one metric ton. The SC-GHG 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 agreed that the interim SC-GHG estimates represent
the most appropriate estimate of the SC-GHG until revised estimates are
developed reflecting the latest, peer-reviewed science. See 87 FR
78382, 78406-78408 for discussion of the development and details of the
IWG SC-GHG estimates.
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
[[Page 31445]]
intergenerational analysis in the context of climate change are likely
to be less than 3 percent, near 2 percent or lower.\110\ 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 SC-GHG TSD, the
IWG has recommended that, taken together, the limitations suggest that
the interim SC-GHG estimates used in this direct final rule likely
underestimate the damages from GHG emissions. DOE concurs with this
assessment.
---------------------------------------------------------------------------
\110\ Interagency Working Group on Social Cost of Greenhouse
Gases. 2021. Technical Support Document: Social Cost of Carbon,
Methane, and Nitrous Oxide Interim Estimates under Executive Order
13990. February. United States Government. Available at
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------
For this direct final rule, DOE considered comments it had received
regarding its approach for monetizing greenhouse gas emissions in the
May 2023 NOPR. The approach used for this direct final rule is largely
the same approach DOE had used for the May 2023 NOPR analysis.
In response to the May 2023 NOPR, AHAM objected to DOE using the
social cost of carbon and other monetization of emissions reductions
benefits in its analysis of the factors EPCA requires DOE to balance in
determining the appropriate standard, which AHAM noted are constantly
subject to change. (AHAM, No. 51 at p. 25) AHAM commented that DOE's
decision making should not rely on the monetization of reductions
benefits and that it is unclear to what extent DOE's deliberation to
propose a TSL rely on the monetization of emissions reduction. (AHAM,
No. 51 at pp. 24-25) AHAM stated that based on the extent to which DOE
calculates climate and health benefits, it appears that DOE is prepared
to rely upon the estimated monetary value of emissions reductions
should the consumer NPV and energy savings not appear to justify a more
stringent level. (Id. at p. 15) 'AHAM commented that DOE has responded
to these objections by indicating that environmental and public health
benefits associated with the more efficient use of energy, including
those connected to global climate change, are important to take into
account when considering the need for national energy conservation,
which is one of the factors EPCA requires DOE to evaluate in
determining whether a potential energy conservation standard is
economically justified, and AHAM does not object to DOE considering the
benefits. AHAM stated that it objects to DOE relying upon those
benefits to justify a rule given the uncertain and ever-evolving nature
of the estimates. AHAM commented that DOE can consider ``other
factors'' under EPCA, but that does not override the key criteria EPCA
requires DOE to balance and DOE must consider EPCA's factors together
and achieve a balance of impacts and benefits--a balance DOE has failed
to strike in this rule. (Id. at p. 25) AHAM stated that while it may be
acceptable for DOE to continue its current practice of examining the
social cost of carbon and monetization of other emissions reductions
benefits as informational so long as the underlying interagency
analysis is transparent and vigorous, the monetization analysis should
not impact the TSLs DOE selects as a new or amended standard. (Id.)
Zycher commented that the IWG analysis is deeply flawed because it
asserts the benefits of GHG reductions on a global scale. (Zycher, No.
49 at pp. 22-23) Zycher stated that the IWG analysis incorporates
explicitly in its benefit/cost calculation the purported global climate
benefits from reductions in U.S. GHG emissions, presumably on the
grounds that the assumed GHG externality is global in nature. Zycher
asserted that this argument is fundamentally flawed, in substantial
part because the global climate effect of all U.S. GHG emissions is
very close to zero. (Zycher, No. 49 at p. 25)
In response to the AHAM and Zycher's comments regarding global
impacts, DOE reiterates its view that the environmental and public
health benefits associated with more efficient use of energy, including
those connected to global climate change, are important to take into
account when considering the need for national energy conservation.
(See 42 U.S.C. 6295(o)(2)(B)(i)(IV)) Additionally, 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.
In addition, Executive Order 13563, which was re-affirmed on
January 21, 2021, stated that each agency must, among other things:
``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).'' For these reasons, DOE considers
the monetized value of emissions reductions in its evaluation of
potential standard levels. While the benefits associated with reduction
of GHG emissions inform DOE's evaluation of potential standards, DOE
would reach the same conclusion regarding the economic justification of
standards presented in this direct final rule without considering the
social cost of greenhouse gases. As described in detail in section
V.C.1 of this document, at the adopted TSL for dishwashers, the average
LCC savings for both product classes are positive, a shipment-weighted
3 percent of consumers would experience a net cost, and the NPV of
consumer benefits is positive using both a 3-percent and 7-percent
discount rate.
Zycher commented \111\ that the interim IWG estimates are deeply
flawed for a number of reasons, they: (1) distort the actual economic
growth predictions produced by the integrated assessment models, (2)
base predictions of future climate phenomena on climate models that
cannot predict the past or the present, (3) incorporate co-benefits in
the form of a reduction in the emissions of other criteria and
hazardous air pollutants already regulated under different provisions
of the Clean Air Act, (4) incorporate the
[[Page 31446]]
asserted benefits of GHG reductions on a global basis, and (5) employ
discount rates that are inconsistent and inappropriate. (Zycher, No. 49
at pp. 22-23)
---------------------------------------------------------------------------
\111\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0049.
---------------------------------------------------------------------------
Zycher commented that the artificially low discount rate applied to
the asserted climate benefits is incorrect analytically and that the
opportunity cost of capital is the appropriate discount rate to be
applied to the evaluation of the asserted climate benefits of the
proposed rule because the allocation of resources to such endeavors
imposes an opportunity cost in the form of forgone investments.
(Zycher, No. 49 at p. 26) Zycher commented that the IWG estimates are
flawed for a number of reasons, including the use of inconsistent and
inappropriate discount rates: (1) ``consumption rate of interest'' is
an incorrect conceptual discount rate for a proposed rule analysis
because the use of resources for purposes of reductions in GHG
emissions is obviously an investment, the opportunity cost of which is
the marginal social return to investment and (2) incorrect
identification of future generations' preferences. (Zycher, No. 49 at
pp. 27-28) In regards to the consumption rate of interest, Zycher
stated that the use of a low consumption rate of interest for the
evaluation of climate benefits only would introduce an important bias
in the allocation of resources among government policies and between
government and private-sector resource use. Zycher commented that the
private sector would not choose to use an artificially-low discount
rate for the evaluation of alternative resource uses. (Id. at p. 27) In
regards to intergenerational preferences, Zycher asserted that future
generations prefer to receive a bequest of a bequest of an aggregate
capital stock. (Id.)
The reasons for using a consumption discount rate rather than a
rate based on the social rate of return on capital (estimated to be 7
percent under OMB's 2003 Circular A-4 guidance) is because 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 reiterates 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.''
CEI et al. commented that there are numerous flaws with IWG 2021
that overstate the calculated benefits of avoided emissions. CEI
commented that IWG used improperly low discount rates, relied on
climate models that have consistently overstated actual warming and on
baseline emission scenarios that assume an increasingly coal-centric
global energy system through 2100 and beyond, while downplaying the
capacity for adaptation to mitigate climate impacts. CEI et al. also
stated that the inclusion of claimed climate benefits out nearly 300
years into the future and the use of global rather than national
benefits, are also skewed toward inflating the end result. (CEI et al.,
No. 48 at p. 6) 'CEI et al. commented that missing from the agency's
analysis is any estimate of the temperature increase it believes will
be averted as a result of the proposed rule, which CEI et al. estimated
to be 0.0003 [deg]C by 2050. (CEI et al., No. 48 at p. 7)
DOE notes that the IWG's SC-GHG estimates were developed over many
years, using a transparent process, peer-reviewed methodologies, the
best science available at the time of that process, and with input from
the public. A number of criticisms raised in the comments were
addressed by the IWG in its February 2021 SC-GHG TSD. DOE agrees that
the interim SC-GHG values applied for this direct final rule are
conservative estimates. In the February 2021 SC-GHG TSD, the IWG stated
that the models used to produce the interim estimates do not include
all of the important physical, ecological, and economic impacts of
climate change recognized in the climate change literature. For these
same impacts, the science underlying their ``damage functions'' lags
behind the most recent research. In the judgment of the IWG, these and
other limitations suggest that the range of four interim SC-GHG
estimates presented in the TSD likely underestimate societal damages
from GHG emissions.
DOE is aware that in December 2023, EPA issued a new set of SC-GHG
estimates in connection with a final rulemaking under the Clean Air
Act.\112\ As DOE had used the IWG interim values in proposing this rule
and is currently reviewing the updated 2023 SC-GHG values, for this
direct final rule, DOE used these updated 2023 SC-GHG values to conduct
a sensitivity analysis of the value of GHG emissions reductions
associated with alternative standards for dishwashers (see section
IV.L.1.c of this document). DOE notes that because EPA's estimates are
considerably higher than the IWG's interim SC-GHG values applied for
this direct final rule, an analysis that uses the EPA's estimates
results in significantly greater climate-related benefits. However,
such results would not affect DOE's decision in this direct final rule.
As stated elsewhere in this document, DOE would reach the same
conclusion regarding the economic justification of the standards
presented in this direct final rule without considering the IWG's
interim SC-GHG values. For the same reason, if DOE were to use EPA's
higher SC-GHG estimates, they would not change DOE's conclusion that
the standards are economically justified.
---------------------------------------------------------------------------
\112\ See www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------
In response to Zycher's comment regarding the use of consumption
discount rate instead of a rate based on the social rate of return on
capital, DOE notes that DOE's analysis is only using the medium
discount rate presented in the IWG TSD as a central estimate of climate
benefits. The IWG TSD has provided significant details to justify the
choice of discount rate and DOE agrees with the assessment. However,
there is no suggested justification to use a 7 percent discount rate in
the IWG TSD. DOE also wants to note that while DOE could have used
other discount rate values (5 percent or 2.5 percent), as presented by
the IWG, it would have only resulted in lower or higher climate
benefit, but would not have changed DOE's conclusion of economic
justification. As stated in section V.C.1 of this document, DOE
concludes that the rule is economically justified even without
factoring in the climate benefit.
DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this direct final rule 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 Dioxide
The SC-CO2 values used for this direct final rule were
based on the values developed for the IWG's February 2021 TSD, which
are shown in Table IV.16 in five-year increments from 2020 to 2050. The
set of annual values
[[Page 31447]]
that DOE used, which was adapted from estimates published by EPA,\113\
is presented in appendix 14A of the direct final rule 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.
---------------------------------------------------------------------------
\113\ 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 Feb. 21, 2023).
[GRAPHIC] [TIFF OMITTED] TR24AP24.023
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 gross domestic product (``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
direct final rule were based on the values developed for the February
2021 SC-GHG TSD. Table IV.17 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 direct final
rule 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.024
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
gross domestic product (``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.
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
In December 2023, EPA issued an updated set of SC-GHG estimates
(2023 SC-GHG) in connection with a final rulemaking under the Clean Air
Act. These estimates incorporate recent research and address
recommendations of the National Academies (2017) and comments from a
2023 external peer review of the accompanying technical report.
For this rulemaking, DOE used these updated 2023 SC-GHG values to
[[Page 31448]]
conduct a sensitivity analysis of the value of GHG emissions reductions
associated with alternative standards for dishwashers. This sensitivity
analysis provides an expanded range of potential climate benefits
associated with amended standards. The final year of EPA's new 2023 SC-
GHG estimates is 2080; therefore, DOE did not monetize the climate
benefits of GHG emissions reductions occurring after 2080.
The overall climate benefits are greater when using the higher,
updated 2023 SC-GHG estimates, compared to the climate benefits using
the older IWG SC-GHG estimates. The results of the sensitivity analysis
are presented in appendix 14C of the direct final rule TSD.
2. Monetization of Other Emissions Impacts
For the direct final rule, DOE estimated the monetized value of
NOX and SO2 emissions reductions from electricity
generation using benefit-per-ton estimates for that sector from the
EPA's Benefits Mapping and Analysis Program.\114\ 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 and 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 direct final rule TSD).
---------------------------------------------------------------------------
\114\ 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.
---------------------------------------------------------------------------
DOE also estimated the monetized value of NOX and
SO2 emissions reductions from site use of natural gas in
dishwashers using benefit per ton estimates from the EPA's Benefits
Mapping and Analysis Program. Although none of the sectors covered by
EPA refers specifically to residential and commercial buildings, the
sector called ``area sources'' would be a reasonable proxy for
residential and commercial buildings.\115\ The EPA document provides
high and low estimates for 2025 and 2030 at 3- and 7-percent discount
rates.\116\ DOE used the same linear interpolation and extrapolation as
it did with the values for electricity generation.
---------------------------------------------------------------------------
\115\ ``Area sources'' represents all emission sources for which
states do not have exact (point) locations in their emissions
inventories. Because exact locations would tend to be associated
with larger sources, ``area sources'' would be fairly representative
of small dispersed sources like homes and businesses.
\116\ ``Area sources'' are a category in the 2018 document from
EPA, but are not used in the 2021 document cited above. See
www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
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
direct final rule TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, 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 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. 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.\117\ 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.
---------------------------------------------------------------------------
\117\ 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 apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed July 1, 2021).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this direct final rule using an input/output model
of the U.S. economy called Impact of Sector Energy Technologies version
4 (``ImSET'').\118\ ImSET is a special-purpose version of
[[Page 31449]]
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.
---------------------------------------------------------------------------
\118\ 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's 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 (2027-2031), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the direct final rule TSD.
O. Regulatory Impact Analysis
For any regulatory action that the Administrator of the Office of
Information and Regulatory Affairs (``OIRA'') within OMB determines is
a significant regulatory action under section 3(f)(1)) of E.O. 12866,
section 6(a)(3)(C) of E.O. 12866 requires Federal agencies to provide
an assessment, including the underlying analysis, of costs and benefits
of potentially effective and reasonably feasible alternatives to the
planned regulation, identified by the agencies or the public (including
improving the current regulation and reasonably viable non-regulatory
actions), and an explanation why the planned regulatory action is
preferable to the identified potential alternatives. 58 FR 51735,
51741. As discussed further in section VII.A of this document, OIRA has
determined that this final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866. Accordingly, DOE conducted a regulatory impact analysis
(``RIA'') for this direct final rule.
As part of the RIA, DOE identifies major alternatives to standards
that represent feasible policy options to reduce the energy and water
consumption of the covered product. DOE evaluates each alternative in
terms of its ability to achieve significant energy and water savings at
a reasonable cost and compares the effectiveness of each alternative to
the effectiveness of the finalized standard. DOE recognizes that
voluntary or other non-regulatory efforts by manufacturers, utilities,
and other interested parties can substantially affect energy and water
efficiency or reduce energy and water consumption. DOE bases its
assessment on the recorded impacts of any such initiatives to date, but
also considers information presented by interested parties regarding
the impacts current initiatives may have in the future. Further details
regarding the RIA are provided in chapter 17 of the direct final rule
TSD.
P. Other Comments
As discussed previously, DOE considered relevant comments, data,
and information obtained during its own rulemaking process in
determining whether the recommended standards from the Joint Agreement
are in accordance with 42 U.S.C. 6295(o). And while some of those
comments were directed at specific aspects of DOE's analysis of the
Joint Agreement under 42 U.S.C. 6295(o), others were more generally
applicable to DOE's energy conservation standards rulemaking program as
a whole. The ensuing discussion focuses on these general comments
concerning energy conservation standards issued under EPCA.
1. Non-Regulatory Approaches
AHAM commented that it incorporated by reference its comments on
the January 2022 Preliminary TSD regarding AHAM's position that there
is more to be gained from increasing proper dishwasher use and
ownership than from increasing energy conservation standards beyond
efficiency level (``EL'') 1. (AHAM, No. 51 at p. 7) AHAM stated that
the environmental goal for dishwasher cleaning should be to focus on
dish cleaning as a process, as continued efficiency improvements for
dishwashers themselves have diminishing returns with available
technology. AHAM commented that the dishwasher is an important part of
that process and increasing ownership and proper use of dishwashers has
the potential to drive enormous water and significant energy savings
that would dwarf the savings attributable to further amended standards.
AHAM commented that in the future, conserving water--rather than
energy--will continue to be the defining environmental issue for
dishwasher cleaning performance. (Id.) AHAM commented that there is a
wide range of dish cleaning behavior and from an environmental
perspective, the preferred ordering of consumer behaviors is to run a
full or partial dishwasher load without pre-rinsing and abstaining from
hand-washing dishes altogether, as the latter tends to use far more
water than running a dishwasher. (Id. at pp. 7-8) AHAM cited the Energy
Information Administration's (``EIA's'') 2020 Residential Energy
Consumption Survey (``RECS''), stating that 14 percent of households
have and do not use their dishwasher. Additionally, according to RECS,
dishwasher presence is lower in renter-occupied homes. AHAM recommended
that DOE make an effort to increase educational and awareness
initiatives on effective dishwasher use. (Id. at p. 8) AHAM cited data
from EPA and a study from the University of Michigan by Gabriela Porras
et al. to reiterate that properly using a dishwasher without pre-
rinsing is the most economical approach for energy, water, and time
usage, and that handwashing using between 6.9 to 22.8 gallons for eight
place settings, respectively. (Id. at p. 9) AHAM asserted that by
increasing dishwasher usage through educational initiatives promoting
dishwasher ownership and proper use, DOE can achieve far greater
savings that would show on consumers' utility bills than it can by
amending standards. (Id. at p. 10)
DOE acknowledges that a percentage of households do not own or own
but do not use their dishwashers. DOE also acknowledges that non-
regulatory options may exist to promote dishwasher ownership and
property use to further push the potential for energy and water
savings. However, DOE is required by EPCA to establish or amend
standards for a covered product that are designed to achieve the
maximum improvement in energy efficiency that the Secretary determines
is technologically feasible and economically justified. (42 U.S.C.
6295(g), (m), and (o)(2)(A)) DOE has determined that the energy
conservation standards for dishwashers adopted in this direct final
rule achieve the maximum improvement in energy efficiency which is
technologically feasible and economically justified.
2. Test Procedure Usage Factors
The CA IOUs recommended DOE adjust the current load usage factors
to reflect changes in consumer pre-treating habits since 2001, the date
of the studies DOE relies on in this rulemaking. (CA IOUs, No. 50 at
pp. 5-6) The CA IOUs commented that a nationally representative study
by Lawrence Berkeley National Laboratory (``LBNL'') in 2021 (``2021
LBNL Study'') \119\ shows
[[Page 31450]]
consumers pre-treat their dishes less often (when compared to 2001)
before placing them in a dishwasher, and the CA IOUs recommended DOE
capture this change by updating the light, medium, and heavy soil level
distribution to 48 percent, 38 percent, and 14 percent, respectively.
(Id.)
---------------------------------------------------------------------------
\119\ Stratton, H. et al., ``Dishwashers in the Residential
Sector: A Survey of Product Characteristics, Usage, and Consumer
Preferences,'' Energy Technologies Area Publications, May 2021
https://eta-publications.lbl.gov/sites/default/files/osg_lbnl_report_dishwashers_final_4.pdf.
---------------------------------------------------------------------------
DOE notes that it established the load usage factors in the
dishwasher test procedure in August 2003 to account for the varying
energy and water performance of units that include soil sensors. 68 FR
51887, 51890. In that rulemaking, DOE relied on survey data gathered
and analyzed by Arthur D. Little (``ADL'') \120\ to characterize the
quantity of soils that consumers load into a dishwasher. 68 FR 51887,
51890. Using the soil loads from an earlier version of AHAM DW-1 \121\
as a reference point, the ADL report defined a light soil load as half
the quantity of a single soiled place setting as defined in AHAM DW-1.
A medium soil load was equivalent to two soiled AHAM DW-1 place
settings and a heavy soil load was approximately equal to four soiled
AHAM DW-1 place settings. With these load size definitions, ADL found
that consumers reported that they most frequently washed lightly soiled
loads (62 percent of loads), with medium (33 percent) and heavy (5
percent) soil loads making up the remainder. Therefore, DOE used this
as the distribution of soil loads for the heavy, medium, and light soil
load cycles in the DOE test procedure. 68 FR 51887, 51890. While the
ADL report also presented data on the frequency of different types of
pre-treatment, it did not correlate pre-treatment itself to different
resulting soil loads and thus load usage factors.
---------------------------------------------------------------------------
\120\ ADL survey data are available at www.regulations.gov/document?D=EERE-2006-TP-0096-0055.
\121\ ``Household Electric Dishwashers.'' AHAM DW-1 was
renumbered to AHAM DW-2 when it was updated in 2020. Although not
identical to the soil loads in AHAM DW-2-2020, they are
substantially similar. This standard provides a uniform method to
test and measure cleaning performance of dishwashers, including the
soil preparation, soil application, and scoring of test load to
calculate cleaning index.
---------------------------------------------------------------------------
More recently, in the January 2023 TP Final Rule, DOE addressed
comments from the CA IOUs and Samsung pertaining to whether consumers'
pre-rinsing habits, including those surveyed in the 2021 LBNL Study,
warranted amendments to the soil loads and corresponding usage factors
in the dishwasher test procedure. DOE determined in the January 2023 TP
Final Rule that it did not have, nor did commenters submit, any
specific information about the types of soils that would be used to
reflect pre-rinsing, or lack thereof, or the consumer relevance of such
soils. 88 FR 3234, 3246. Accordingly, DOE did not amend the soil load
usage factors in the January 2023 TP Final Rule.
DOE also notes that the 2021 LBNL Study focused on consumer
priorities with respect to their dishwashers. The requirement for pre-
treatment of dishes was identified as the second to last priority of 18
possibilities for the 1201 survey respondents (less important than
cutlery tray location). Pre-treatment of dishes reflect consumer habit,
rather than dishwasher performance.122 123 The 2021 LBNL
Study did not address a correlation of pre-treatment of dishes with
resulting soil loads on the dishes, which may have changed since the
time of the ADL report, so did not provide information with which to
evaluate any different load usage factors. Additionally, the LCC
employs no load usage factor but relies on the reported number of
weekly loads for each household in the RECS 2020 dataset.
---------------------------------------------------------------------------
\122\ Richter, Christian Paul, 2011. Use of dishwashers:
observation of consumer habits in the domestic environment. (Last
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
\123\ Stamminger, et al., 2017. A European Comparison of
Cleaning Dishes by Hand. (Last accessed January 23, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
---------------------------------------------------------------------------
3. National Academy of Sciences Report
The National Academies of Sciences, Engineering, and Medicine
(``NAS'') periodically appoint a committee to peer review the
assumptions, models, and methodologies that DOE uses in setting energy
conservation standards for covered products and equipment. The most
recent such peer review was conducted in a series of meetings in 2020,
and NAS issued the report \124\ in 2021 detailing its findings and
recommendations on how DOE can improve its analyses and align them with
best practices for cost-benefit analysis.
---------------------------------------------------------------------------
\124\ National Academies of Sciences, Engineering, and Medicine.
2021. Review of Methods for Setting Building and Equipment
Performance Standards. Available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards (last accessed Nov. 20, 2023).
---------------------------------------------------------------------------
AHAM stated that despite previous requests from AHAM and others,
DOE has failed to review and incorporate the recommendations of the NAS
report, instead indicating that it will conduct a separate rulemaking
process without such a process having been initiated. (AHAM, No. 51 at
p. 17) AHAM asserted that DOE seems to be ignoring the recommendations
in the NAS Peer Review Report and even conducting analyses that are the
opposite of these recommendations. AHAM stated that DOE cannot continue
to perpetuate the errors in its analytical approach that have been
pointed out by stakeholders and the NAS report, as to do so will lead
to arbitrary and capricious rules. (Id.)
As discussed, the rulemaking process for establishing new or
amended standards for covered products and equipment is specified at
appendix A. DOE periodically examines and revises these provisions in
separate rulemaking proceedings. The recommendations provided in the
2021 NAS report, which pertain to the processes by which DOE analyzes
energy conservation standards, will be considered by DOE in a
forthcoming rulemaking process.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
dishwashers. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for dishwashers, and the standards levels that DOE is
adopting in this direct final rule. Additional details regarding DOE's
analyses are contained in the direct final rule TSD supporting this
document.
A. Trial Standard Levels
In general, DOE typically evaluates potential new or 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 dishwasher 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 direct final rule, DOE analyzed
the benefits and burdens of five TSLs for dishwashers. DOE developed
TSLs that combine efficiency levels for each analyzed dishwasher class.
DOE presents the results for the TSLs in this document, while the
results for all efficiency levels that DOE analyzed are in the direct
final rule TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for dishwashers. TSL 5 represents the max-tech energy
efficiency for both product classes and corresponds to EL 4 for
standard-size dishwashers and EL
[[Page 31451]]
2 for compact-size dishwashers. TSL 4 is the TSL that maximizes net
benefits at a 3-percent discount rate; this TSL represents the highest
efficiency levels providing positive LCC savings, which comprises the
gap-fill efficiency level between ENERGY STAR V. 6.0 and ENERGY STAR V.
7.0 (EL 2) for standard-size dishwashers and max-tech efficiency level
(EL 2) for compact-size dishwashers. TSL 3 is the Recommended TSL
detailed in the Joint Agreement. TSL 3 maximizes net benefits at a 7-
percent discount rate; this TSL comprises the gap-fill efficiency level
between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level (EL
2) for standard-size dishwashers and the ENERGY STAR V. 6.0 level (EL
1) for compact-size dishwashers. TSL 2 comprises the ENERGY STAR V. 6.0
level (EL 1) for standard-size dishwashers and the max-tech efficiency
level (EL 2) for compact-size dishwashers. TSL 1 represents EL 1 across
both product classes and the ENERGY STAR V. 6.0 level. While
representative ELs were included in the TSLs, DOE considered all
efficiency levels as part of its analysis and included the efficiency
levels with positive LCC savings in the TSLs.\125\
---------------------------------------------------------------------------
\125\ Efficiency levels that were analyzed for this final rule
are discussed in section IV.C.4 of this document. Results by
efficiency level are presented in TSD chapters 8, 10, and 12.
[GRAPHIC] [TIFF OMITTED] TR24AP24.025
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on dishwasher 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
decrease. Because the technologies to improve energy efficiency may
also reduce water usage (as discussed in IV.C.1.b), annual operating
costs include both energy and water consumption. 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 and water use, energy prices, energy and water price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter 8 of the direct
final rule TSD provides detailed information on the LCC and PBP
analyses.
Table V.2 through Table V.5 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, the 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.
BILLING CODE 6450-01-P
[[Page 31452]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.026
[GRAPHIC] [TIFF OMITTED] TR24AP24.027
[GRAPHIC] [TIFF OMITTED] TR24AP24.028
[GRAPHIC] [TIFF OMITTED] TR24AP24.029
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households, senior-only households, and
well-water households. Table V.6 and Table V.7 compare the average LCC
savings and PBP at each efficiency level for the consumer subgroups
with similar metrics for the entire consumer sample for standard-size
dishwashers. In most cases, the average LCC savings and PBP for low-
income households, senior-only households, and well-water households at
the considered efficiency levels are not substantially different from
the average for all households. The well-users have reduced water
operating costs and therefore receive less operating cost savings (and
lower LCC savings). The senior subgroup has
[[Page 31453]]
slightly lower dishwasher usage frequency compared to the national
sample and therefore also experience lower operating cost savings (and
lower LCC savings).
Chapter 11 of the direct final rule TSD presents the complete LCC
and PBP results for the subgroups.
[GRAPHIC] [TIFF OMITTED] TR24AP24.030
[GRAPHIC] [TIFF OMITTED] TR24AP24.031
[[Page 31454]]
BILLING CODE 6450-01-C
c. Rebuttable Presumption Payback
As discussed in section III.D.2 of this document, 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. (42 U.S.C.
6295(o)(2)(B)(iii)) 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
procedures for dishwashers. In contrast, the PBPs presented in section
V.B.1.a of this document were calculated using distributions that
reflect the range of energy use in the field.
Table V.8 presents the rebuttable-presumption payback periods for
the considered TSLs for dishwashers. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels
considered for this rule 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.032
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of dishwashers. The following
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the direct final rule 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 illustrate the estimated financial impacts
(represented by changes in INPV) of potential amended energy
conservation standards on manufacturers of dishwashers, as well as the
conversion costs that DOE estimates manufacturers of dishwashers would
incur at each TSL.
To evaluate the range of cash-flow impacts on the dishwasher
industry, DOE modeled two scenarios using different assumptions that
correspond to the range of anticipated market responses to amended
energy conservation standards: (1) a preservation of gross margin
percentage scenario; (2) a tiered scenario, as discussed in section
IV.J.2.d of this document. The preservation of gross margin percentage
applies a ``gross margin percentage'' of 19.4 percent for both
standard-size and compact-size product classes.\126\ 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.
---------------------------------------------------------------------------
\126\ The gross margin percentage of 19.4 percent is based on a
manufacturer markup of 1.24.
---------------------------------------------------------------------------
The tiered scenario starts with the three different product
manufacturer markups in the no-new-standards case (baseline, ENERGY
STAR V. 6.0, and ENERGY STAR V. 7.0 \127\). This scenario reflects a
concern about product commoditization at higher efficiency levels as
efficiency differentiators are eliminated and manufacturer markups are
reduced. The tiered scenario results in the lower (or larger in
magnitude) bound to impacts of potential amended standards on industry.
---------------------------------------------------------------------------
\127\ ENERGY STAR V. 7.0 corresponds to the 2022 ENERGY STAR
Most Efficient qualification criteria.
---------------------------------------------------------------------------
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 direct final rule publication year
through the end of the analysis period (2024-2056). 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 direct 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 of the
industry and generally result in lower free cash flow in the period
between the publication of the direct 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.
BILLING CODE 6450-01-P
[[Page 31455]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.033
BILLING CODE 6450-01-C
At TSL 1, the standard represents EL 1 across both standard-size
and compact-size dishwashers and the ENERGY STAR V. 6.0 level. The
change in INPV is expected to range from -7.5 percent to -0.8 percent.
At this level, free cash flow is estimated to decrease by 8.5 percent
compared to the no-new-standards case value of $52.3 million in the
year 2026, the year before the standards year. Currently, approximately
93 percent of domestic dishwasher shipments meet the efficiencies
required at TSL 1. For standard-size dishwashers, which account for
approximately 98 percent of annual shipments, 93 percent of shipments
meet the efficiencies required. For compact-size dishwashers, which
account for the remaining 2 percent of annual shipments, 87 percent of
shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers
include implementing electronic controls, soil sensing, multiple spray
arms, improved water filters, a separate drain pump, and tub
insulation. The design options DOE analyzed for compact-size
dishwashers include implementing improved controls. At this level,
capital conversion costs are minimal since the majority of products
already meet the efficiency levels required. As with all the analyzed
TSLs, conversion costs incorporate industry testing costs as
manufacturers implement the cleaning performance test and re-rate all
their existing, compliant models in accordance with the new appendix
C2. 10 CFR appendix C2 to subpart of part 430. DOE expects industry to
incur some re-flooring costs associated with standard-size dishwashers
as manufacturers redesign baseline products to meet the efficiency
levels required by TSL 1. In interviews, manufacturers stated that
there are not re-flooring costs associated with compact-size
dishwashers as those are typically not on display at big-box stores.
DOE estimates capital conversion costs of $1.0 million and product
conversion costs of $11.8 million. Conversion costs total $12.7
million.
Under the tiered manufacturer markup scenario, which is discussed
in IV.J.2.d of this document, the key driver of impacts to INPV at TSL
1 is the result of margin compression for both standard-size and
compact-size dishwashers as manufacturers forfeit premiums and cut into
margins as they try to maintain a competitively priced baseline
product. Although only a small fraction of products (approximately 7
percent of shipments) would need to be redesigned at this level, the
margin compression under the tiered scenario has a disproportionately
large impact on INPV, since most of the market (approximately 84
percent of standard-size and compact-size dishwasher shipments) is at
EL 1 (i.e., the ENERGY STAR V. 6.0 level) in the no-new-standards case.
At TSL 2, the standard represents the ENERGY STAR V. 6.0 level (EL
1) for standard-size dishwashers and the max-tech efficiency level (EL
2) for compact-size dishwashers. The change in INPV is expected to
range from -8.4 percent to -1.7 percent. At this level, free cash flow
is estimated to decrease by 16.3 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before
the standards year. Currently, approximately 92 percent of domestic
dishwasher shipments meet the efficiencies required at TSL 2. As with
TSL 1, 93 percent of standard-size dishwasher shipments meet the
efficiencies required. For compact-size dishwashers, 21 percent of
shipments currently meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers are
the same as at TSL 1. The design options analyzed for compact-size
dishwashers include implementing the design options at TSL 1 as well as
permanent magnet motors, improved filters, hydraulic system
optimization, heater incorporated into base of tub, and reduced sump
volume. The increase in
[[Page 31456]]
conversion costs from the prior TSL is entirely due to the higher
efficiency level required for compact-size dishwashers. At TSL 2, all
manufacturers of compact-size countertop dishwashers with four or more
place settings and in-sink dishwashers with less than four place
settings would need to redesign their products to meet the efficiencies
required, as DOE is not aware of any currently available products in
these two configurations that meet TSL 2. Manufacturer feedback and the
engineering analysis indicate that redesigning these compact-size
configurations to meet max-tech would require significant investment,
both in terms of engineering resources and new tooling, relative to the
size of the domestic compact-size dishwasher market. While it is
technologically feasible for compact-size countertop dishwashers with
four or more place settings and in-sink dishwashers with less than four
place settings to meet TSL 2 (max-tech for compact-size dishwashers),
manufacturers would need to determine whether the shipments volumes
justify the level of investment required. DOE expects industry to incur
the same re-flooring costs as at TSL 1. DOE estimates capital
conversion costs of $6.0 million and product conversion costs of $17.0
million. Conversion costs total $23.0 million.
Under the tiered manufacturer markup scenario, the key driver of
impacts to INPV at TSL 2 is the result of margin compression for both
standard-size and compact-size dishwashers as manufacturers forfeit
premiums and cut into margins in an attempt to maintain a competitively
priced baseline product. In particular, because TSL 2 sets standards
for compact-size dishwashers at max-tech, manufacturers lose their
premium markup for high-efficiency compact-size products, contributing
to a reduction in future revenues and INPV.
At TSL 3, the standard represents the gap-fill efficiency level
between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level (EL
2) for standard-size dishwashers and the ENERGY STAR V. 6.0 level (EL
1) for compact-size dishwashers. The change in INPV is expected to
range from -20.2 percent to -13.1 percent. At this level, free cash
flow is estimated to decrease by 97.1 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before
the standards year. Currently, approximately 11 percent of domestic
dishwasher shipments meet the efficiencies required at TSL 3. For
standard-size dishwashers, 9 percent of current shipments meet the
efficiencies required. As with TSL 1, 87 percent of compact-size
dishwasher shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers
include implementing the design options at TSL 1 and TSL 2 as well as
improved control strategies, which could necessitate product redesign
to more closely control water temperature, water fill volumes, etc. The
design options analyzed for compact-size dishwashers are the same as
for TSL 1. The increase in conversion costs from the prior TSL is
entirely due to the increased efficiency level required for standard-
size dishwashers. In interviews, some manufacturers stated that meeting
TSL 3 would involve physical improvements to system elements to enable
tighter controls and better design tolerances, while maintaining
certain product attributes valued by their consumers. Although
manufacturers tended to agree that the key product attributes (in
addition to energy use, water use, and cleaning performance) included
drying performance, cycle duration, and noise levels, manufacturers
identified different priorities and internal targets for those metrics.
One manufacturer noted that maintaining the same normal cycle time
across its dishwasher portfolio was a key design parameter, as this
feature was part of its value proposition and marketing material. A
different manufacturer emphasized that maintaining drying performance,
particularly of plastic dishware, was a key concern for its consumer
base. These manufacturers stated that they may need new tooling and
some modifications to the assembly line to improve the system elements
to meet TSL 3 efficiencies while maintaining these product attributes.
DOE notes that since the May 2023 NOPR published, more manufacturers
now offer standard-size dishwasher models that meet the TSL 3
efficiencies. DOE believes that the recent introduction of more high-
efficiency standard-size dishwashers is largely in response to ENERGY
STAR V. 7.0, which went into effect in July 2023. Of the 19 OEMs
offering standard-size products, 16 OEMs offer products that meet the
efficiency level required. DOE expects industry to incur more re-
flooring costs compared to TSL 2. DOE estimates capital conversion
costs of $68.7 million and product conversion costs of $58.3 million.
Conversion costs total $126.9 million.
TSL 3 brings standards for standard-size dishwashers above ENERGY
STAR V. 6.0 levels. Under the tiered scenario, the fraction of products
that are eligible for any additional premium markups above baseline is
further reduced as manufacturers sacrifice margins while seeking to
maintain a low-price-point baseline model.
At TSL 4, the standard represents the highest efficiency levels
providing positive LCC savings, which comprise the gap-fill efficiency
level between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level
(EL 2) for standard-size dishwashers and max-tech efficiency level (EL
2) for compact-size dishwashers. The change in INPV is expected to
range from -21.2 percent to -14.0 percent. At this level, free cash
flow is estimated to decrease by 104.8 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before
the standards year. Currently, approximately 10 percent of domestic
dishwasher shipments meet the efficiencies required at TSL 4. As with
TSL 3, 9 percent of standard-size dishwasher shipments meet the
efficiencies required. As with TSL 2, 21 percent of compact-size
dishwasher shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers are
the same as at TSL 3. The design options analyzed for compact-size
dishwashers are the same as at TSL 2 and include implementing permanent
magnet motors, improved filters, hydraulic system optimization, heater
incorporated into base of tub, and reduced sump volume. The increase in
conversion costs from the prior TSL is entirely due to the increased
efficiency level required for compact-size dishwashers. As discussed
previously, all manufacturers of compact-size countertop dishwashers
with four or more place settings and in-sink dishwashers with less than
four place settings would need to redesign their products to meet the
efficiencies required, as DOE is not aware of any currently available
products in these two configurations that meet TSL 4 (max-tech for
compact-size dishwashers). Manufacturer feedback and the engineering
analysis indicate that redesigning these compact-size dishwasher
configurations to meet TSL 4 would require significant investment, both
in terms of engineering resources and new tooling, relative to the size
of the domestic compact-size dishwasher market. DOE expects industry to
incur similar re-flooring costs compared to TSL 3. DOE estimates
capital conversion costs of $73.7 million and product conversion costs
of $63.5 million. Conversion costs total $137.2 million.
[[Page 31457]]
At TSL 4, the large conversion costs result in 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.
Under the tiered manufacturer markup scenario, one of the key
drivers of impacts to INPV at TSL 4 is the result of margin compression
for both standard-size and compact-size dishwashers as manufacturers
forfeit premiums and cut into margins in an attempt to maintain a
competitively priced baseline product. In particular, because TSL 4
sets standards for compact-size dishwashers at max-tech, manufacturers
lose their premium markups for high-efficiency compact-size products,
contributing to a reduction in future revenues and INPV.
At TSL 5, the standard represents the max-tech energy efficiency
for both product classes and corresponds to EL 4 for standard-size
dishwashers and EL 2 for compact-size dishwashers. The change in INPV
is expected to range from -54.5 percent to -43.7 percent. At this
level, free cash flow is estimated to decrease by 552.0 percent
compared to the no-new-standards case value of $52.3 million in the
year 2026, the year before the standards year. Currently, less than 1
percent of domestic dishwasher shipments meet the efficiencies required
at TSL 5. For standard-size dishwashers, DOE estimates that no
shipments currently meet the efficiencies required. As with TSL 4, 21
percent of compact-size dishwasher shipments meet the efficiencies
required.
The design options DOE analyzed for standard-size dishwashers
include design options considered at the lower efficiency levels (i.e.,
electronic controls, soil sensors, multiple spray arms, improved water
filters and control strategies, separate drain pump, tub insulation,
hydraulic system optimization, water diverter assembly, temperature
sensor, 3-phase variable-speed motor, and flow meter) and include
additional design options such as condensation drying, including use of
a stainless steel tub; flow-through heating implemented as an in-sump
integrated heater; and control strategies. The design options analyzed
for compact-size dishwashers are the same as at TSL 4. The increase in
conversion costs from the prior TSL is entirely due to the increased
efficiencies required for standard-size dishwashers.
All manufacturers interviewed stated that meeting max-tech would
necessitate significant platform redesign in order to meet the required
efficiencies and maintain the product attributes that consumers desire.
Manufacturers noted that investments in new tooling, equipment, and
production line modifications may be necessary to implement a range of
design options. Specifically, manufacturers discussed tooling for
additional spray arms, new sump tooling, new stamping equipment, door
opening systems, improved filtration systems, and new dish racks.
Manufacturers would likely need to convert all existing plastic tub
designs to stainless steel tubs, which would necessitate expanding
existing stainless steel tub production capacity and retiring plastic
injection equipment used for plastic tubs. None of the manufacturers
interviewed, which together account for approximately 90 percent of
dishwasher shipments, currently offer standard-size dishwashers that
meet max-tech. Therefore, most manufacturers expressed technical
uncertainty about the extent of the design changes and production line
updates that would be needed to meet max-tech and satisfy their
consumer base. Some manufacturers suggested they would explore new
water purification technology systems for water reuse. Other
manufacturers noted that meeting max-tech may necessitate new tub
architectures, which would require significant capital investment.
These manufacturers noted that if new technology was necessary (e.g.,
water purification systems) or if new tub architectures were required,
the 3-year compliance period may be insufficient to complete the
necessary product redesign and production facility updates. DOE
estimates capital conversion costs of $432.0 million and product
conversion costs of $249.0 million. Conversion costs total $681.0
million.
At TSL 5, the large conversion costs result in 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.
TSL 5 sets the standard for all products as high as technologically
feasible, leaving manufacturers no ability to differentiate products by
efficiency under the tiered manufacturer markup scenario. Thus, all
margins collapse to the baseline levels.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of amended energy
conservation standards on direct employment in the dishwasher 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. For this direct final
rule, DOE used the most up-to-date information available. DOE
calculated these values using statistical data from the U.S. Census
Bureau's 2021 ASM,\128\ BLS employee compensation data,\129\ results of
the engineering analysis, and manufacturer interviews.
---------------------------------------------------------------------------
\128\ 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 Nov. 22, 2023).
\129\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. September 12, 2023. Available at www.bls.gov/news.release/archives/ecec_12152023.pdf (last accessed Nov. 22,
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, retirement and savings, and legally
required benefits.
The total 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 product. This value is derived from manufacturer
interviews, product database analysis, and publicly available
information. DOE estimates that approximately 78 percent of standard-
size dishwashers are produced domestically. DOE estimates that no
compact-size dishwashers are produced domestically. Therefore, overall,
DOE estimates that approximately 76 percent of all covered dishwashers
sold in the
[[Page 31458]]
United States are produced 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 products covered by
this direct final rule.
Non-production workers account for the remainder of the direct
employment figure. The number of non-production employees covers
domestic workers who are not directly involved in the production
process, such as sales, engineering, human resources, management, etc.
Using the number 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 new energy
conservation standards there would be 3,950 domestic production and
non-production workers for standard-size dishwashers in 2027 (the
analyzed compliance year). To evaluate the range of cash-flow impacts
on the dishwasher industry, DOE modeled two scenarios using different
assumptions that correspond to the range of anticipated market
responses to amended energy conservation standards: (1) a preservation
of gross margin percentage scenario; (2) a tiered scenario, as
discussed in section IV.J.2.d of this document. The preservation of
gross margin percentage applies a ``gross margin percentage'' of 19.4
percent for both standard-size and compact-size product classes. 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 tiered scenario starts with the three different product
manufacturer markups in the no-new-standards case (baseline, ENERGY
STAR V. 6.0, and ENERGY STAR V. 7.0). This scenario reflects a concern
about product commoditization at higher efficiency levels as efficiency
differentiators are eliminated and manufacturer markups are reduced.
The tiered scenario results in the lower (or larger in magnitude) 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 direct final rule publication year
through the end of the analysis period (2024-2056). 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 direct 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 of the
industry and generally result in lower free cash flow in the period
between the publication of the direct 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.9 Table V.10 shows the range of the impacts of energy
conservation standards on U.S. manufacturing employment in the
standard-size dishwasher industry. As previously noted, DOE did not
identify any U.S. manufacturing facilities producing compact-size
dishwashers for the domestic market, and therefore does not present a
range of direct employment impacts. The following discussion provides a
qualitative evaluation of the range of potential impacts presented in
Table V.10.
[GRAPHIC] [TIFF OMITTED] TR24AP24.034
The direct employment impacts shown in Table V.10 represent the
potential domestic employment changes that could result following the
compliance date for the standard-size dishwashers in this direct final
rule. The upper bound estimate corresponds to an increase in the number
of domestic workers that would result from amended energy conservation
standards if manufacturers continue to produce the same scope of
covered products within the United States after compliance takes
effect.
[[Page 31459]]
To establish a conservative lower bound, DOE assumes all
manufacturers would shift production to foreign countries or would
shift to importing finished goods (versus manufacturing in-house). As
previously discussed, the majority of standard-size dishwashers sold in
the United States are manufactured in domestic production facilities.
However, many major dishwasher OEMs with U.S. production facilities
also have dishwasher manufacturing facilities located outside the
United States. At lower TSLs (i.e., TSL 1 through TSL 4), 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, at max-tech, both the complexity and cost of
production facility updates increases, manufacturers are more likely to
revisit their production location decisions. At max-tech, one
manufacturer representing a large portion of the U.S. dishwasher market
noted concerns about the level of investment and indicated the
potential need to relocate production lines in order to remain
competitive. In this direct final rule, DOE is adopting the Recommended
TSL, which corresponds to the standard levels recommended in the Joint
Agreement. As discussed in section III.B of this document, the Joint
Agreement included a trade association, AHAM, which represents 16
manufacturers of dishwashers. Additionally, DOE notes that the
Recommended TSL for standard-size dishwashers corresponds to EL 2 and
not max-tech (EL 4). Furthermore, most OEMs already make standard-size
dishwashers that meet the Recommended TSL. Of the 19 OEMs offering
standard-size products, 16 OEMs already offer standard-size dishwashers
that meet the efficiency level required. Since most manufacturers with
U.S. production facilities already manufacture standard-size
dishwashers that meet the adopted levels, DOE expects that the
likelihood of shifts in domestic production locations as a direct
result of amended standards for standard-size dishwashers are
relatively low.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the direct final rule 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 direct final rule TSD.
c. Impacts on Manufacturing Capacity
As discussed in section V.B.2.a of this document, implementing the
different design options analyzed for this direct final rule would
require varying levels of resources and investment. At higher
efficiency levels, manufacturers noted that balancing more stringent
energy and water use requirements while maintaining the product
attributes their consumers value becomes increasingly challenging. All
manufacturers interviewed, which together account for approximately 90
percent of industry shipments, noted that meeting the standard-size
dishwasher max-tech efficiencies and cleaning performance requirement
while maintaining internal targets for other product attributes such as
drying performance, cycle duration, and noise levels, would require
significant investment. None of the manufacturers interviewed currently
offer a max-tech product, and they expressed technical uncertainty
about the exact technologies and production line changes that would be
needed to meet both the required efficiencies and the manufacturers'
internal design standards. In interviews, several manufacturers
expressed concerns that the 3-year time period between the announcement
of the direct 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.
These manufacturers noted that the 3-year time period would be
particularly problematic if the standard necessitated completely new
tub architectures. However, because TSL 3 (i.e., the Recommended TSL,
which corresponds to the levels recommended in the Joint Agreement)
would not require max-tech efficiencies, DOE does not expect
manufacturers to face long-term capacity constraints due to the
standard levels detailed in this direct final rule.
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 rulemaking based on the
results of the industry characterization.
DOE analyzes the impacts on small businesses in a separate analysis
for the standards proposed in the NOPR published elsewhere in this
issue of the Federal Register and in chapter 12 of the direct final
rule TSD. In summary, the Small Business Administration (``SBA'')
defines a ``small business'' as having 1,500 employees or less for
NAICS 335220, ``Major Household Appliance Manufacturing.'' \130\ Based
on this classification, DOE did not identify any domestic OEM that
qualifies as a small business. For a discussion of the impacts on the
small business manufacturer subgroup, see chapter 12 of the direct
final rule TSD.
---------------------------------------------------------------------------
\130\ U.S. Small Business Administration. ``Table of Small
Business Size Standards.'' (Effective March 17, 2023). Available at
www.sba.gov/document/support-table-size-standards (last accessed
Nov. 18, 2023).
---------------------------------------------------------------------------
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the regulatory actions
of other Federal agencies and States 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.
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.
For the cumulative regulatory burden analysis, DOE examines
Federal, product-specific regulations that could affect dishwasher
manufacturers that take effect approximately 3 years before or after
the 2027 compliance date (2024 to 2030). This information is presented
in Table V.11.
BILLING CODE 6450-01-P
[[Page 31460]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.035
[[Page 31461]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.036
As shown in Table V.11, the rulemakings with the largest overlap of
dishwasher OEMs include refrigerators, refrigerator-freezers, and
freezers, consumer conventional cooking products, residential clothes
washers, consumer clothes dryers, and miscellaneous refrigeration
products, which are all part of the multi-product Joint Agreement
submitted by interested parties.\131\ As detailed in the multi-product
Joint Agreement, the signatories indicated that their recommendations
should be considered a ``complete package.'' The signatories further
stated that ``each part of this agreement is contingent upon the other
parts being implemented.'' (Joint Agreement, No. 55 at p. 3)
---------------------------------------------------------------------------
\131\ The microwave ovens energy conservation standards final
rule (88 FR 39912), which has 10 overlapping OEMs, was published
prior to the joint submission of the multi-product Joint Agreement.
---------------------------------------------------------------------------
The multi-product Joint Agreement states the ``jointly recommended
compliance dates will achieve the overall energy and economic benefits
of this agreement while allowing necessary lead-times for manufacturers
to redesign products and retool manufacturing plants to meet the
recommended standards across product categories.'' (Joint Agreement,
No. 55 at p. 2) The staggered compliance dates help mitigate
manufacturers' concerns about their ability to allocate sufficient
resources to comply with multiple concurrent amended standards and
about the need to align compliance dates for products that are
typically designed or sold as matched pairs. See section IV.J.3 of this
document for stakeholder comments about cumulative regulatory burden.
See Table V.12 for a comparison of the estimated compliance dates based
on EPCA-specified timelines and the compliance dates detailed in the
Joint Agreement.
[[Page 31462]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.037
BILLING CODE 6450-01-C
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings, NWS, and the NPV of consumer benefits that would result from
each of the TSLs considered as potential amended standards.
a. Significance of Energy and Water Savings
To estimate the energy and water savings attributable to potential
amended standards for dishwashers, DOE compared their energy and water
consumption under the no-new-standards case to their anticipated energy
and water 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 (2027-
2056). Table V.13 and Table V.14 present DOE's projections of the
national energy and water savings for each TSL considered for
dishwashers. The savings were calculated using the approach described
in section IV.H.2 of this document.
[GRAPHIC] [TIFF OMITTED] TR24AP24.038
[GRAPHIC] [TIFF OMITTED] TR24AP24.039
OMB Circular A-4 \132\ 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 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
[[Page 31463]]
revised standards.\133\ The review timeframe established in EPCA is
generally not synchronized with the product lifetime, product
manufacturing cycles, or other factors specific to dishwashers. Thus,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology. The NES and
NWS sensitivity analysis results based on a 9-year analytical period
are presented in Table V.15 and Table V.16. The impacts are counted
over the lifetime of dishwashers purchased during the period 2027-2035.
---------------------------------------------------------------------------
\132\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March
11, 2024).
\133\ 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.040
[GRAPHIC] [TIFF OMITTED] TR24AP24.041
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 dishwashers.
In accordance with OMB's guidelines on regulatory analysis,\134\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.17 shows the consumer NPV results with impacts counted
over the lifetime of products purchased during the period 2027-2056.
---------------------------------------------------------------------------
\134\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024).
DOE used the prior version of Circular A-4 (September 17, 2003) in
accordance with the effective date of the November 9, 2023 version.
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March
11, 2024).
[GRAPHIC] [TIFF OMITTED] TR24AP24.042
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.18. The impacts are counted over the
lifetime of products purchased during the period 2027-2035. 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.043
[[Page 31464]]
BILLING CODE 6450-01-C
The previous results reflect the use of a default trend to estimate
the change in price for dishwashers 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 direct final rule 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 amended energy conservation standards for
dishwashers will 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
(2027-2056), where these uncertainties are reduced.
The results suggest that the adopted standards are 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 direct final rule TSD presents detailed
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As stated, EPCA, as codified, contains the provision that 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))
As discussed in this section, DOE has concluded that the standards
adopted in this direct final rule will not lessen the utility or
performance of the dishwashers under consideration in this rulemaking.
Manufacturers of these products currently offer units that meet or
exceed the adopted standards.
In making this determination for this direct final rule, DOE
considered comments it had received in response to the May 2023 NOPR.
a. Cleaning Performance
EPCA authorizes DOE to design test procedures that measure energy
efficiency, energy use, water use, or estimated annual operating cost
of a covered product during a representative average use cycle or
period of use. (42 U.S.C. 6293(b)(3)) Representative average use of a
dishwasher reflects, in part, a consumer using the dishwasher to
achieve an acceptable level of cleaning performance. As discussed, the
amended standards adopted in this direct final rule require the use of
the test procedure at appendix C2, which includes a minimum cleaning
performance threshold as a condition for a valid test cycle to
determine if a dishwasher, when tested according to the DOE test
procedure, ``completely washes a normally soiled load of dishes,'' so
as to better represent consumer use of the product. See section 1 of
appendix C2 for definition of ``normal cycle'' and section 4 of
appendix C2 for the cleaning index threshold.
In response to the May 2023 NOPR, ASAP et al. asserted that
analyses from DOE and EPA demonstrate that dishwashers meeting the
proposed standards meet consumer expectations in various performance
areas. (ASAP et al. No. 46 at pp. 2-3) ASAP et al. commented that as
part of the development of ENERGY STAR V. 7.0, EPA used web-scraped and
Consumer Reports data to understand how dishwashers meeting the
proposed requirements perform across a range of metrics that impact
consumer satisfaction and found standard-size dishwashers on the market
that could meet the ENERGY STAR Most Efficient 2022 criteria \135\
while achieving the cleaning performance threshold. (Id.) ASAP et al.
additionally commented that EPA's analysis indicated that standard-size
dishwashers are able to meet EL 3, while providing high consumer
satisfaction across various areas of performance such as drying time,
cycle time, and noise performance. (Id.)
---------------------------------------------------------------------------
\135\ 2022 ENERGY STAR Most Efficient Requirement for
Dishwashers: www.energystar.gov/sites/default/files/ENERGY%20STAR%20Most%20Efficient%202022%20Dishwasher%20Final%20Criteria%20Memo_0.pdf.
---------------------------------------------------------------------------
Samsung supported DOE's revised cleaning index threshold value of
70 and commented that the minimum cleaning index would help incentivize
dishwasher designs that do not require multiple runs to perform basic
functionality, thereby avoiding increased energy use from running
multiple cycles. (Samsung, No. 52 at p. 3) NEEA also commented in
support of DOE's requirement of a certain cleaning performance level
for the normal cycle to ensure dishwasher cleaning performance is
maintained. NEEA noted that NEEA's dishwasher market research,
previously shared confidentially with DOE, shows no correlation between
cleaning performance and efficiency for current models. (NEEA, No. 53
at p. 2)
AHAM commented that DOE must further evaluate the impact of amended
standards on performance despite the newly finalized cleaning
performance metric in the test procedure. AHAM stated that the test
procedure requirement alone is not sufficient to satisfy EPCA's
requirement that standards not result in the unavailability of products
with performance characteristics substantially the same as those
currently available. AHAM commented that DOE has not presented any
consumer data to demonstrate that its test and/or threshold are
relevant to consumers nor has it produced sufficient data to
demonstrate that its proposed standards will not result in a
degradation of performance. (AHAM, No. 51 at p. 10).
Sub-Zero asserted that the degradation in dishwasher performance
that will result from the proposed standards will affect consumer
opinions of Sub-Zero's products and disproportionately harm the segment
of the market in which Sub-Zero operates. (Sub-Zero, No. 47 at pp. 1-2)
CEI et al. stated that adverse impacts of the agency's past
dishwasher rules have necessitated compensating behaviors that are not
only costly and inconvenient, but also undercut any climate benefits.
(CEI et al., No. 48 at p. 7) CEI et al. commented that the reduced
useful life of compliance models is also environmentally detrimental,
as it results in greater energy and other resources going into the
manufacturing and disposal of dishwashers. (CEI et al., No. 48 at p. 7)
Zycher commented that DOE claims the proposed standard would not
reduce the utility or performance of the products under consideration
in this rulemaking, but Zycher asserted that the
[[Page 31465]]
only analytical support for this statement provided by DOE is that
manufacturers of these products currently offer units that meet or
exceed the proposed standards. (Zycher, No. 49 at pp. 2, 4, 28) Zycher
stated that this argument does not provide any information about the
relative ``utility or performance'' of such options. (Id.)
In response to comments from stakeholders over concerns about
product cleaning performance for standard-size dishwashers at EL 2, DOE
reiterates that the amended standards adopted in this direct final rule
require the use of the test procedure at appendix C2, which includes a
minimum cleaning performance threshold to determine if a dishwasher,
when tested according to the DOE test procedure, ``completely washes a
normally soiled load of dishes,'' so as to better represent consumer
use of the product. That is, the new test procedure at appendix C2
ensures that the rated energy and water consumption of dishwashers are
representative of a consumer-acceptable level of cleaning performance.
DOE further references its investigatory testing data that was
presented in the January 2022 Preliminary Analysis, which demonstrated
that standard-size dishwashers within the test sample could achieve the
threshold cleaning performance finalized in the January 2023 TP Final
Rule at all soil levels for efficiency levels up to EL 3. DOE also
notes that feedback from some manufacturers during confidential
interviews indicates that the adopted standards are achievable without
impacting consumer utility. Additionally, DOE identified dishwasher
models that are certified as 2024 ENERGY STAR Most Efficient,\136\
which specifies equivalent cleaning performance requirements as
appendix C2 but has more stringent water and energy use criteria than
the standards adopted in this document. Some of these models met or
exceeded EL 4, indicating that max-tech efficiency dishwashers that can
achieve the threshold cleaning performance on the normal cycle
currently exist on the market. In fact, DOE's investigatory testing
data shows that the best performing unit at all soil levels is a unit
that meets the adopted standard level. DOE also did not observe any
correlation between cleaning indices and efficiency level in its test
sample and units that would meet the amended standard have the same
average cleaning index across all soil levels as units that would not
meet the amended standard.
---------------------------------------------------------------------------
\136\ ENERGY STAR Most Efficient 2024. ``Recognition Criteria
Residential Dishwashers.'' 2024. Available online at
www.energystar.gov/sites/default/files/asset/document/Dishwasher%20ENERGY%20STAR%20Most%20Efficient%202024%20Final%20Criteria.pdf.
---------------------------------------------------------------------------
Furthermore, as previously discussed, on February 14, 2024, DOE
received a second joint statement from the same group of stakeholders
that submitted the Joint Agreement in which the signatories reaffirmed
the standards recommended in the Joint Agreement.\137\ In particular,
the letter states that there are more than 400 dishwasher models that
are certified to the current ENERGY STAR V. 7.0 level, which is more
stringent that the standards recommended in the Joint Agreement, that
are also required to meet a minimum cleaning index threshold of 65. The
signatories stated that the prevalence of these ENERGY STAR certified
dishwashers indicated that dishwashers meeting the recommended standard
levels can provide cleaning performance at levels consistent with those
on the market today.
---------------------------------------------------------------------------
\137\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
Accordingly, DOE has concluded, based not only on its newly adopted
test procedure, but also on confirmatory testing data, confidential
interviews, and ENERGY STAR's performance requirements, that the
standards adopted here will not negatively impact dishwasher
performance.
CEI et al. commented that the previous rulemakings affecting
existing energy and water efficiency measures for dishwashers have
already led to widespread and well-documented consumer dissatisfaction
and that the proposed rulemaking would exacerbate the issues. (CEI et
al., No. 48 at p. 2)
Whirlpool commented that it was concerned with any amended
dishwashers energy conservation standards beyond EL 1. Whirlpool
commented that the proposed rule would lessen the utility and
performance of dishwashers, especially as compared to consumer
expectations of dishwashers today, and the experiences from past
dishwashers that consumers may have owned. (Whirlpool, No. 45 at pp. 3,
4) Whirlpool also commented that DOE should not take any action that
would potentially degrade the performance or lower the utility of
dishwashers, especially because dishwashers have among the lowest
household penetration rates of any major appliance in U.S. households.
(Id. at p. 4) Whirlpool also asserted that the new cleaning index
requirement does not adequately correlate to real-world consumer
satisfaction and that consumers will perform compensatory behaviors to
make up for the loss in cleaning performance. (Id. at p. 5) Whirlpool
stated that lowering the energy and water consumption of a dishwasher
further will degrade cleaning and drying performance for consumers, and
create negative rebound effects, thus making it less attractive for
many consumers to own and use their dishwashers. (Whirlpool, No. 45 at
p. 6) Whirlpool commented that DOE should work collaboratively to
increase overall penetration of the already energy and water efficient
appliances but the proposed rule may disincentivize increased
penetration and utilization as dishwashers offer consumers lower
utility and performance benefits. (Id. at p. 3)
AHAM asserted that further cost-effective efficiency gains may
threaten performance and product functionality as opportunities for
additional energy and water savings beyond those already achieved are
severely diminished as products are near maximum efficiency under
available technology. (AHAM, No. 51 at pp. 1-2) AHAM noted that while
DOE does account for the cleaning performance outcome, DOE does not
account for the relationship of cleaning performance to other
performance elements in the dishwasher system including washing
temperatures, length of washing cycles, types and amounts of detergent
applied, and mechanics (power). (Id. at pp. 10-11) AHAM commented that
reducing one aspect of wash performance, such as energy or water, can
lead to an impact on these other performance elements. (Id. at p. 11)
AHAM commented that the test procedure's cleaning performance metric
ignores all performance aspects other than cleaning performance. AHAM
stated that AHAM DW-2-2020, which DOE proposed to use in appendix C2
for the determination of cleaning performance was primarily designed to
address performance in terms of redeposition of soils and the soils
were selected with that in mind. AHAM stated that AHAM DW-2-2020 does
not assess greasy or detergent buildup over time, which it stated is an
issue for the majority of dishwasher users who pre-rinse their dishes.
AHAM also commented that the test procedure does not address other
elements of performance such as drying performance, cycle length, and
noise. (Id.) AHAM stated that some of these performance factors, such
as wash temperature, cannot be lowered
[[Page 31466]]
indefinitely because the wash temperature must be warm enough to
activate the detergent and remove fatty soils, otherwise the dishwasher
would lose its utility. AHAM stated that water heating is the biggest
contributor to energy use and once water heating energy is reduced as
much as possible, it leaves fewer options for manufacturers to consider
other than lengthening cycles, reducing drying performance or
eliminating drying altogether, or increasing the noise level of the
dishwasher to allow for greater power, in order to maintain cleaning
performance while also meeting more stringent standards. (Id.) AHAM
asserted that by requiring energy and water levels and a cleaning
performance level, DOE could force manufacturers to design dishwashers
that satisfy DOE's test procedure requirements but do not satisfy
consumers on all factors, including cleaning performance. Therefore,
AHAM stated that DOE must assess the impact of its proposed standards
from a more holistic perspective. (Id.) AHAM recommended that DOE issue
a NODA or other notice that would provide data on the impact of these
standards on performance and provide interested parties with an
opportunity to comment. (Id.)
Sub-Zero asserted that any standard beyond ENERGY STAR V. 6.0
(i.e., EL 1) will force manufacturers to make significant design
changes that lower a dishwasher's cleaning performance scores. Sub-Zero
also asserted that the levers of performance and energy consumption
have already been working against each other for years via serial
rulemakings on dishwashers, but with the proposed standards, its
consumers would be the most disappointed based on the consumer purchase
price versus consumer expectations correlation. (Sub-Zero, No. 47 at p.
1)
CEI et al. stated that DOE has violated the ``features provision''
of EPCA, which prohibits setting an efficiency standard so stringent
that it would sacrifice any desired product characteristics. CEI et al.
asserted that by DOE's own admission, DOE has imposed standards on
dishwashers that increase cycle times. (CEI et al., No. 48 at p. 3) CEI
et al. also asserted that previous efficiency standards have led to
other drawbacks by negatively affecting dishwasher reliability and
durability, adversely impact cleaning performance, and undermining
drying performance. (Id. at p. 4) CEI et al. additionally asserted that
DOE's proposed rulemaking would exacerbate these issues and therefore
would violate EPCA's features provision. (Id. at p. 5)
DOE does not anticipate that significant design changes will be
necessary for standard-size dishwashers to reach EL 2 because DOE's
teardown analysis, described in chapter 5 of the direct final rule TSD,
showed that existing products at EL 2 utilize the same design options
as those at EL 1 with improved control strategies. Improved control
strategies would allow manufacturers to more closely control water
temperature and water fill volumes, thereby optimizing the wash cycle
and minimizing losses. For these reasons, DOE does not expect any
impact to utility or performance at the standards adopted in this
direct final rule. As such, DOE's analysis indicates that it is
possible to meet the adopted standards in this direct final rule
without making significant design changes and without impacting a
dishwasher's cleaning performance or other performance attributes, as
discussed further in this section (regarding cleaning performance) and
sections IV.H.2 (regarding impact on non-dishwasher cleaning patterns),
V.B.4.b (regarding drying performance), and V.B.4.c (regarding cycle
length) of this document.
Furthermore, in this direct final rule, DOE is adopting standards
for dishwashers that are consistent with the standards recommended in
the Joint Agreement. Additionally, as previously discussed, on February
14, 2024, DOE received a second joint statement from the same group of
stakeholders that submitted the Joint Agreement in which the
signatories reaffirmed the standards recommended in the Joint
Agreement, and stated that they would not negatively affect features or
performance, including cycle times.\138\
---------------------------------------------------------------------------
\138\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
b. Drying Performance
Whirlpool asserted that DOE's proposed standards for dishwashers
will be difficult for manufacturers to meet while meeting consumer
demand for dishwashers capable of drying dishes thoroughly. (Whirlpool,
No. 45 at p. 5) Whirlpool stated that the low final rinse temperatures
and shorter heated drying durations that would be required to meet
stringent energy conservation standards beyond EL 1 would make it
increasingly difficult to completely dry all items in the dishwasher.
Whirlpool stated that DOE must not set standards beyond EL 1, which
would further reduce the total allowable energy usage that
manufacturers can dedicate to effective drying performance and further
reduce consumer satisfaction with drying performance. (Id.)
In response to concerns over drying performance, DOE expects
existing drying options would continue to be available on dishwashers
regardless of amended standards up to at least EL 3 because there are
no unique drying technologies at EL2 and EL3. In the May 2023 NOPR TSD
as well as in this final rule, DOE noted that dishwasher models could
reach EL 2 or EL 3 with the same drying technology options on the
regulated cycle as at EL 1 (see chapter 5 of this final rule TSD). DOE
expects that any amended standards up to at least EL 3 would not stifle
innovation around drying options and other features that could be
implemented on dishwashers outside the regulated cycle.
Furthermore, as previously discussed, on February 14, 2024, DOE
received a second joint statement from the same group of stakeholders
that submitted the Joint Agreement (including AHAM, of which Whirlpool
is a member) in which the signatories reaffirmed the standards
recommended in the Joint Agreement.\139\ In particular, the letter
states that the stakeholders do not anticipate the recommended
standards will negatively affect features, which DOE assumes would also
include drying performance.
---------------------------------------------------------------------------
\139\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
c. Cycle Length
CEI et al. stated that given the long cycle times and other issues
with dishwashers traceable to current standards, this is the proper
regulatory avenue that DOE should be pursuing. CEI et al. commented
that DOE should be fixing the problems with existing dishwasher
standards rather than making them worse with the proposed rule. CEI et
al. stated DOE has previously taken steps to address longer cycle
times, but the efforts were reversed. CEI et al. commented that
corrective rulemakings should be revived and expanded to include all
performance-related features that have been impacted by past
dishwashers regulations. (CEI et al., No. 48 at pp. 7-8) CEI et al.
commented that compliance with EPCA is best served by DOE regulations
that address the consumer problems with dishwashers, not ones that
exacerbate these problems. (Id.)
In this rulemaking, DOE considered dishwasher performance,
including comments raised about cycle times. In the January 2022
Preliminary TSD, DOE provided data from its investigatory testing
sample that determined cycle
[[Page 31467]]
time is not substantively correlated with energy and water consumption
of the normal cycle. (See section 5.9 of the January 2022 Preliminary
TSD). Additionally, the adopted standards are applicable to the
regulated cycle type (i.e., normal cycle); manufacturers can continue
to provide additional, non-regulated cycle types (e.g., quick cycles,
pots and pans, heavy, delicates, etc.) for consumers that choose to
utilize them. Specifically, DOE expects quick cycles, many of which
clean a load within 1 hour or less would still be available on
dishwasher models that currently offer such cycle types. DOE has
determined that the adopted standards in this direct final rule are
compliant with the applicable provisions of EPCA. Additionally, in this
direct final rule, DOE is adopting standards for dishwashers that are
consistent with the standards recommended in the Joint Agreement, which
do not apply to any short-cycle product classes. Further, as previously
discussed, on February 14, 2024, DOE received a second joint statement
from the same group of stakeholders that submitted the Joint Agreement
in which the signatories reaffirmed the standards recommended in the
Joint Agreement.\140\ In particular, the signatories acknowledge that
DOE's investigative testing shows that cycle times at the recommended
levels for dishwashers are the same as dishwashers on the market today.
---------------------------------------------------------------------------
\140\ This document is available in the docket at:
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------
Finally, as noted previously, the Fifth Circuit Court of Appeals
recently remanded to DOE the January 2022 Rule for further
consideration. As noted elsewhere in this document, DOE has published
an RFI regarding short-cycle products. 89 FR 17338.
d. Water Dilution
Whirlpool commented that water dilution and soil and detergent
redeposition remain an issue under amended standards beyond EL 1, and
that DOE does not cite new technology in its supporting analysis to
indicate that this problem will be resolved. (Whirlpool, No. 45 at p.
5) As a result, Whirlpool asserted that according to its own test data,
dishwasher cleaning performance will degrade under the proposed
standards. (Id.)
As noted in the May 2023 NOPR, while DOE recognizes that poor water
dilution can impact cleaning performance, as mentioned elsewhere in
this document (as well as the May 2023 NOPR and January 2022
Preliminary TSD), DOE's testing and analysis indicates that
satisfactory cleaning performance is achievable at all efficiencies.
(See 88 FR 32514, 32533-32534 and chapter 5 of the May 2023 NOPR TSD
and January 2022 Preliminary TSD). Additionally, the minimum cleaning
index threshold requirement specified in the new appendix C2 ensures
that cleaning performance will be maintained after the compliance date
of any new standards.
e. Equipment Lifetime and Energy Savings
CEI et al. commented that the reduced useful life of compliance
models is also environmentally detrimental, as it results in greater
energy and other resources going into the manufacturing and disposal of
dishwashers. (CEI et al., No. 48 at p. 7)
DOE determines the lifetime of dishwashers from an analysis of
historical shipments, AHS and RECS data. See section IV.F.6 of this
document for more information. No publicly available data show that the
lifetime of a dishwasher is correlated with its efficiency level.
Zycher asserted that energy savings per se are not relevant
analytically because the economic benefits of energy savings are
captured fully by purchasers of such appliances. Further, Zycher
commented that there is no externality attendant upon energy
consumption per se, and if energy savings are to be considered relevant
for purpose of benefit/cost analysis, then the adverse effects or costs
of reduction in energy consumption in terms of the quality of
dishwasher performance in the context of this proposed rule must be
included in the analysis. (Zycher, No. 49 at p. 3) Zycher also asserted
that DOE's estimates of the annual cost savings are subject to
uncertainty and the asserted benefits are so small that that from an
analytical standpoint they cannot be regarded as benefits at all.
Zycher further asserted that the proposed rule would force consumers to
change their purchase choices in ways that have not and would not be
observed in the absence of the proposed rule. Zycher commented that
this demonstrates that the energy cost savings, even if the underlying
calculations are accepted, must be accompanied by some explicit or
implicit costs in terms of forgone quality dimensions of dishwasher
performance, the value of which must be greater than the value of the
purported energy cost savings. (Id. at p. 4)
In regard to the purported adverse effects of reduction in energy
consumption in terms of the quality of dishwasher performance, DOE does
not expect any rebound effect due to reduced energy and water
consumption in the standards case. More detailed discussion can be
found in section IV.H.2 of this document regarding the rebound effect
and in section V.B.4.a of this document regarding the standards' impact
on the cleaning performance.
In response to comments regarding the significance of annualized
LCC savings, as described in section IV.E of this document, DOE's LCC
analysis captures the variability of consumer's life cycle costs. For
example, DOE's energy and water use analysis relied on RECS 2020, which
provides sample household's dishwasher usage frequency information
ranging from one to 21 cycles per week. DOE also considered the
variability of energy and water costs based on the sample household's
geographic location, as well as the range of product lifetime. Taking
into account the variability of those inputs allows DOE to observe the
full range of LCC savings and to understand the distribution of
results, enabling a more informed evaluation of the potential impact of
the adopted standards. DOE presents all statistic results of LCC
savings in chapter 8 of the direct final rule TSD. Based on the LCC
savings estimates of 10,000 household samples, 97 percent of the sample
households would either not be affected (11 percent) or experience a
positive savings (86 percent). The weighted average LCC savings are $17
for the selected TSL which is significantly different from zero. In
addition, DOE's decision on amended standards is not solely determined
by LCC savings. While they play an important role, they may be
considered alongside other critical factors, including the percentage
of negatively impacted consumers, the simple payback period, and the
overall impact on the manufacturers.
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.d
of this document, EPCA directs the Attorney General of the United
States (``Attorney General'') to determine the impact, if any, of any
lessening of competition likely to result from a proposed standard and
to transmit such determination in writing 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. To assist the Attorney General
in making this
[[Page 31468]]
determination, DOE is providing DOJ with copies of the direct final
rule and the TSD for review.
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 of the direct final
rule 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 dishwashers is expected to yield environmental benefits
in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V.19 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 III.C of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the direct final
rule TSD.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.044
As part of the analysis for this rule, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for dishwashers.
Section IV.L of this document discusses the estimated SC-CO2
values that DOE used. Table V19 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
Recommended TSL in chapter 14 of the direct final rule TSD.
[[Page 31469]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.045
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 dishwashers. Table V.21 presents the value of the CH4
emissions reduction at each TSL, and Table V.22 presents the value of
the N2O emissions reduction at each TSL. The time-series of
annual values is presented for the Recommended TSL in chapter 14 of the
direct final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR24AP24.046
[GRAPHIC] [TIFF OMITTED] TR24AP24.047
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, however, that the adopted standards would be economically
justified even without inclusion of monetized benefits of reduced GHG
emissions.
DOE also estimated the monetary value of the economic benefits
associated with NOX and SO2 emissions reductions
anticipated to result from the considered TSLs for dishwashers. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document. Table V.23 presents the
[[Page 31470]]
present value for NOX emissions reduction for each TSL
calculated using 7-percent and 3-percent discount rates, and Table V.24
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 Recommended TSL in chapter 14 of the direct
final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR24AP24.048
[GRAPHIC] [TIFF OMITTED] TR24AP24.049
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.25 presents the NPV values that result from adding the
estimates of the 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 dishwashers, and are measured for the
lifetime of products shipped during the period 2027-2056. 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 dishwashers shipped during the period 2027-2056.
[[Page 31471]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.050
BILLING CODE 6450-01-C
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered dishwasher
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 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 direct final rule, DOE considered the impacts of amended
standards for dishwashers 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 forego 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. Second, DOE accounts for energy
and water 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
and water savings from an energy conservation standard. DOE provides
estimates of shipments and changes in the volume of product purchases
in chapter 9 of the direct final rule 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
[[Page 31472]]
sensitivity variation according to household income.\141\
---------------------------------------------------------------------------
\141\ 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.\142\ 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. General
considerations for consumer welfare and preferences as well as the
special cases of complementary goods are areas DOE plans to explore in
a forthcoming RFI related to the agency's updates to its overall
analytic framework.
---------------------------------------------------------------------------
\142\ 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 July
1, 2021).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for Dishwashers Standards
Table V.26 and Table V.27 summarize the quantitative impacts
estimated for each TSL for dishwashers. The national impacts are
measured over the lifetime of dishwashers purchased in the 30-year
period that begins in the anticipated year of compliance with amended
standards (2027-2056). The energy savings, emissions reductions, and
value of emissions reductions refer to full-fuel-cycle results. The
consumer operating savings are inclusive of energy and water. DOE is
presenting monetized benefits of GHG emissions reductions in accordance
with the applicable Executive Orders and DOE would reach the same
conclusion presented in this notice in the absence of the social cost
of greenhouse gases, including the Interim Estimates presented by the
IWG. The efficiency levels contained in each TSL are described in
section V.A of this document.
BILLING CODE 6450-01-P
[[Page 31473]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.051
[[Page 31474]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.052
BILLING CODE 6450-01-C
DOE first considered TSL 5, which represents the max-tech
efficiency levels for both product classes. Specifically, for a
standard-size dishwasher, this efficiency level includes design options
considered at the lower efficiency levels (i.e., electronic controls,
soil sensors, multiple spray arms, improved water filters and control
strategies, separate drain pump, tub insulation, hydraulic system
optimization, water diverter assembly, temperature sensor, 3-phase
variable-speed motor, and flow meter) and condensation drying,
including use of a stainless steel tub; flow-through heating
implemented as an in-sump integrated heater; and control strategies.
The majority of these design options reduce both energy and water use
together.\143\ For a compact-size dishwasher, this efficiency level
includes the design options considered at the lower efficiency levels
(i.e., improved control strategies) and additionally includes the use
of permanent magnet motor, improved filters, hydraulic system
optimization, heater incorporated into base of tub, and reduced sump
volume. Similar to standard-size dishwashers, the majority of these
design options reduce both energy and water use together. TSL 5 would
save an estimated 1.28 quads of energy and 0.92 trillion gallons of
water, an amount DOE considers significant. Under TSL 5, the NPV of
consumer benefit (inclusive of both energy and water) would be -$12.18
billion using a discount rate of 7 percent, and -$20.12 billion using a
discount rate of 3 percent.
---------------------------------------------------------------------------
\143\ As discussed previously in section IV.A.2 of this
document, because the energy used to heat the water consumed by the
dishwasher is included as part of the EAEU energy use metric,
technologies that decrease water use also inherently decrease energy
use.
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 5 are 38.89 Mt of
CO2, 5.73 thousand tons of SO2, 91.86 thousand
tons of NOX, 0.03 tons of Hg, 406.30 thousand tons of
CH4, and 0.23 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 5 is $2.20 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $1.52 billion using a 7-percent discount rate and $3.85
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 5 is -$8.46
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total
[[Page 31475]]
NPV at TSL 5 is -$14.08 billion. The estimated total NPV is provided
for additional information; however, DOE primarily relies upon the NPV
of consumer benefits when determining whether an amended standard level
is economically justified.
At TSL 5, the average LCC impact is a loss of $145 for standard-
size dishwashers and a $4 savings for compact-size dishwashers. The
simple payback period is 15.9 years for standard-size dishwashers and
5.5 years for compact-size dishwashers. The fraction of consumers
experiencing a net LCC cost is 97 percent for standard-size dishwashers
and 54 percent for compact-size dishwashers. Notably, for the standard-
size product class, which as discussed represents 98 percent of the
market, TSL 5 (which includes EL 4 for this product class) would
increase the first cost by $178. This associated increase in first cost
at TSL 5 for standard-size dishwashers could impact the number of new
shipments by approximately less than 2 percent annually due to
consumers shifting to extending the lives of their existing dishwashers
beyond their useful life, repairing instead of replacing, or
handwashing their dishes. In the national impact analysis, DOE modeled
a scenario where part of this 2-percent of consumers forgoing the
purchase of a new dishwasher due to price increases will substitute to
handwashing. This results in a small increase in energy and water use,
which is then subtracted from the energy and water savings projected to
result from the amended standards at TSL5.
For the low-income consumer group, the average LCC impact is a loss
of $29 for standard-size dishwashers and a savings of $62 for compact-
size dishwashers. The simple payback period is 6.6 years for standard-
size dishwashers and 2.3 years for compact-size dishwashers. The
fraction of low-income consumers experiencing a net LCC cost is 46
percent for standard-size dishwashers and 26 percent for compact-size
dishwashers. For the senior-only households consumer group, the average
LCC impact is a loss of $159 for standard-size dishwashers and a loss
of $14 for compact-size dishwashers. The simple payback period is 19.8
years for standard-size dishwashers and 6.8 years for compact-size
dishwashers. The fraction of senior-only consumers experiencing a net
LCC cost is 98 percent for standard-size dishwashers and 62 percent for
compact-size dishwashers. For the consumer sub-group of well-water
households, the average LCC impact is a loss of $162 for standard-size
dishwashers and a loss of $19 for compact-size dishwashers. The simple
payback period is 21.4 years for standard-size dishwashers and 6.9
years for compact-size dishwashers. The fraction of well-water
consumers experiencing a net LCC cost is 98 percent for standard-size
dishwashers and 63 percent for compact-size dishwashers.
At TSL 5, the projected change in INPV ranges from a decrease of
$334.4 million to a decrease of $414.6 million, which corresponds to
decreases of 54.5 percent and 43.7 percent, respectively. Industry
conversion costs could reach $681.0 million at this TSL, as
manufacturers work to redesign their portfolios of model offerings,
transition their standard-size dishwasher platforms entirely to
stainless steel tubs, and renovate manufacturing facilities to
accommodate changes to the production line and manufacturing processes.
DOE estimates that less than 1 percent of dishwasher shipments
currently meet the max-tech levels. Standard-size dishwashers account
for approximately 98 percent of annual shipments. Of the 19 standard-
size dishwasher OEMs, only one OEM, which accounts for approximately 2
percent of basic models in the CCD, currently offers products that meet
the max-tech efficiencies required. All manufacturers interviewed,
which together account for approximately 90 percent of the industry
shipments, expressed uncertainty as to whether they could reliably meet
the standard-size dishwasher max-tech efficiencies and the cleaning
performance threshold and noted meeting max-tech would require a
platform redesign and significant investment in tooling, equipment, and
production line modifications. Many manufacturers would need to
increase production capacity of stainless steel tub designs. Some
manufacturers noted that a max-tech standard could necessitate new tub
architectures.
For compact-size dishwashers, which account for the remaining 2
percent of annual shipments, DOE estimates that 14 percent of shipments
currently meet the required max-tech efficiencies. Of the five compact-
size dishwasher OEMs, two OEMs currently offer compact-size products
that meet max-tech. At TSL 5, compact-size countertop dishwashers with
four or more place settings and in-sink dishwashers with less than four
place settings are not currently available in the market. Meeting TSL 5
is technologically feasible for those products; however, DOE expects
that it would take significant investment relative to the size of the
compact-size dishwasher market to redesign products to meet the max-
tech efficiencies.
Based on the above considerations, the Secretary concludes that at
TSL 5 for dishwashers, the benefits of energy and water savings,
emissions reductions, and the estimated monetary value of the health
benefits and climate benefits from emissions reductions would be
outweighed by the negative NPV of consumer benefits and the impacts on
manufacturers, including the large potential reduction in INPV. At TSL
5, a majority of standard-size dishwasher consumers (97 percent) would
experience a net cost and the average LCC loss is $145 for this product
class. Additionally, at TSL 5, manufacturers would need to make
significant upfront investments to redesign product platforms and
update manufacturing facilities. Some manufacturers expressed concern
that they would not be able to complete product and production line
updates within the 3-year conversion period. Consequently, the
Secretary has concluded that TSL 5 is not economically justified.
DOE next considered TSL 4, which represents the highest efficiency
levels providing positive LCC savings. TSL 4 comprises the gap-fill
efficiency level between the ENERGY STAR V. 7.0 level and the ENERGY
STAR V. 6.0 level (EL 2) for standard-size dishwashers and the max-tech
efficiency level for compact-size dishwashers. Specifically, for a
standard-size dishwasher, this efficiency level includes design options
considered at the lower efficiency levels (i.e., electronic controls,
soil sensors, multiple spray arms, improved water filters, separate
drain pump, and tub insulation) and additionally includes the use of
improved control strategies. For a compact-size dishwasher, this
efficiency level includes the design options considered at the lower
efficiency levels (i.e., improved control strategies) and additionally
includes the use of a permanent magnet motor, improved filters,
hydraulic system optimization, heater incorporated into base of tub,
and reduced sump volume. The majority of these design options for both
standard-size and compact-size dishwashers reduce both energy and water
use together. TSL 4 would save an estimated 0.34 quads of energy and
0.26 trillion gallons of water, an amount DOE considers significant.
Under TSL 4, the NPV of consumer benefit (inclusive of energy and
water) would be $1.23 billion using a discount rate of 7 percent, and
$2.95 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 10.33 Mt of
CO2, 1.53 thousand tons of SO2, 24.37 thousand
[[Page 31476]]
tons of NOX, 0.01 tons of Hg, 107.80 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 4 is $0.58 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $0.40 billion using a 7-percent discount rate and $1.02
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 $2.21
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $4.56 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.
At TSL 4, the average LCC impact is a savings of $17 for standard-
size dishwashers and $4 for compact-size dishwashers. The simple
payback period is 3.9 years for standard-size dishwashers and 5.5 years
for compact-size dishwashers. The fraction of consumers experiencing a
net LCC cost is 3 percent for standard-size dishwashers and 54 percent
for compact-size dishwashers.
For the low-income consumer group, the average LCC impact is a
savings of $21 for standard-size dishwashers and $62 for compact-size
dishwashers. The simple payback period is 1.6 years for standard-size
dishwashers and 2.3 years for compact-size dishwashers. The fraction of
low-income consumers experiencing a net LCC cost is 2 percent for
standard-size dishwashers and 26 percent for compact-size dishwashers.
For the senior-only households consumer group, the average LCC impact
is a savings of $13 for standard-size dishwashers and a loss of $14 for
compact-size dishwashers. The simple payback period is 4.9 years for
standard-size dishwashers and 6.8 years for compact-size dishwashers.
The fraction of senior-only consumers experiencing a net LCC cost is 4
percent for standard-size dishwashers and 62 percent for compact-size
dishwashers. For the consumer sub-group of well-water households, the
average LCC impact is a savings of $12 for standard-size dishwashers
and a loss of $19 for compact-size dishwashers. The simple payback
period is 5.5 years for standard-size dishwashers and 6.9 years for
compact-size dishwashers. The fraction of well-water consumers
experiencing a net LCC cost is 4 percent for standard-size dishwashers
and 63 percent for compact-size dishwashers.
At TSL 4, the projected change in INPV ranges from a decrease of
$155.9 million to a decrease of $103.1 million, which corresponds to
decreases of 21.2 percent and 14.0 percent, respectively. Industry
conversion costs could reach $137.2 million at this TSL as some
manufacturers of standard-size dishwashers redesign products to enable
improved controls and better design tolerances and manufacturers of
certain compact-size dishwashers redesign products to meet max-tech.
DOE estimates that approximately 10 percent of dishwasher shipments
currently meet the TSL 4 efficiencies, of which approximately 9 percent
of standard-size dishwasher shipments and 14 percent of compact-size
dishwasher shipments meet the required efficiencies. Compared to max-
tech, more manufacturers offer standard-size dishwashers that meet the
required efficiencies. Furthermore, since the May 2023 NOPR, more
manufacturers now offer standard-size dishwasher models that meet the
TSL 4 efficiencies. DOE believes that the recent introduction of more
high-efficiency standard-size dishwashers is largely in response to
ENERGY STAR V. 7.0, which went into effect in July 2023. Of the 19 OEMs
offering standard-size products, 16 OEMs offer products that meet the
efficiency level required. For compact-size dishwashers, TSL 4
represents the same efficiency level as for TSL 5. Just as with TSL 5,
compact-size countertop dishwashers with four or more place settings
and in-sink dishwashers with less than four place settings are not
currently available in the market at TSL 4 levels. Meeting TSL 4 is
technologically feasible for those products; however, DOE expects that
it would take significant investment (nearly $11 million) relative to
the size of the compact-size dishwasher market (no-new-standards case
INPV of $15.4 million) for them to meet the max-tech efficiencies.
Based upon the above considerations, the Secretary concludes that
at TSL 4 for dishwashers, the benefits of energy and water savings,
positive NPV of consumer benefits, emission reductions, and the
estimated monetary value of the health benefits and climate benefits
from emissions reductions would be outweighed by negative LCC savings
for the senior-only households for the compact-size dishwasher product
class and the high percentage of consumers with net costs for the
compact-size dishwasher product class. Consequently, the Secretary has
concluded that TSL 4 is not economically justified.
DOE then considered the Recommended TSL (i.e., TSL 3), which
comprises the gap-fill efficiency level between the ENERGY STAR V. 7.0
level and the ENERGY STAR V. 6.0 level (EL 2) for standard-size
dishwashers and the ENERGY STAR V. 6.0 level (EL 1) for compact-size
dishwashers. Specifically, for a standard-size dishwasher, this
efficiency level includes design options considered at the lower
efficiency levels (i.e., electronic controls, soil sensors, multiple
spray arms, improved water filters, separate drain pump, and tub
insulation) and additionally includes the use of improved control
strategies. For a compact-size dishwasher, this efficiency level
represents the use of improved controls. The majority of these design
options for both standard-size and compact-size dishwashers reduce both
energy and water use together. The Recommended TSL would save an
estimated 0.31 quads of energy and 0.24 trillion gallons of water, an
amount DOE considers significant. Under the Recommended TSL, the NPV of
consumer benefit (inclusive of energy and water) would be $1.23 billion
using a discount rate of 7 percent, and $2.90 billion using a discount
rate of 3 percent.
The cumulative emissions reductions at the Recommended TSL are 9.48
Mt of CO2, 1.41 thousand tons of SO2, 22.37
thousand tons of NOX, 0.01 tons of Hg, 98.97 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 the Recommended TSL is $0.54 billion. The estimated monetary
value of the health benefits from reduced SO2 and
NOX emissions at the Recommended TSL is $0.37 billion using
a 7-percent discount rate and $0.94 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 the Recommended
TSL is $2.13 billion. Using a 3-percent discount rate for all benefits
and costs, the estimated total NPV at the Recommended TSL is $4.38
billion. The estimated total NPV is provided for additional
information; however, DOE primarily relies upon the NPV of consumer
benefits when determining
[[Page 31477]]
whether a proposed standard level is economically justified.
At the Recommended TSL, the average LCC impact is a savings of $17
for standard-size dishwashers and $32 for compact-size dishwashers. The
simple payback period is 3.9 years for standard-size dishwashers and
0.0 years for compact-size dishwashers. The fraction of consumers
experiencing a net LCC cost is 3 percent for standard-size dishwashers
and 0 percent for compact-size dishwashers.
For the low-income consumer group, the average LCC impact is a
savings of $21 for standard-size dishwashers and $39 for compact-size
dishwashers. The simple payback period is 1.6 years for standard-size
dishwashers and 0.0 years for compact-size dishwashers. The fraction of
low-income consumers experiencing a net LCC cost is 2 percent for
standard-size dishwashers and 0 percent for compact-size dishwashers.
For the senior-only households consumer group, the average LCC impact
is a savings of $13 for standard-size dishwashers and $26 for compact-
size dishwashers. The simple payback period is 4.9 years for standard-
size dishwashers and 0.0 years for compact-size dishwashers. The
fraction of senior-only consumers experiencing a net LCC cost is 4
percent for standard-size dishwashers and 0 percent for compact-size
dishwashers. For the consumer sub-group of well water households, the
average LCC impact is a savings of $12 for standard-size dishwashers
and $23 for compact-size dishwashers. The simple payback period is 5.5
years for standard-size dishwashers and 0.0 years for compact-size
dishwashers. The fraction of well water consumers experiencing a net
LCC cost is 4 percent for standard-size dishwashers and 0 percent for
compact-size dishwashers.
At the Recommended TSL, the projected change in INPV ranges from a
decrease of $148.8 million to a decrease of $96.7 million, which
corresponds to decreases of 20.2 percent and 13.1 percent,
respectively. Industry conversion costs could reach $126.9 million at
this TSL as some manufacturers redesign standard-size products to
enable improved controls and better design tolerances.
DOE estimates that approximately 11 percent of dishwasher shipments
currently meet the Recommended TSL efficiencies, of which approximately
9 percent of standard-size dishwasher shipments and 87 percent of
compact-size dishwasher shipments meet the required efficiencies. At
this level, the decrease in conversion costs compared to TSL 4 is
entirely due to the lower efficiency level required for compact-size
dishwashers, as the efficiency level required for standard-size
dishwashers is the same as for TSL 4 (EL 2). All the compact-size
dishwasher OEMs currently offer products that meet the Recommended TSL.
At this level, DOE expects manufacturers of compact-size dishwashers
would implement improved controls, which would likely require minimal
upfront investment.
After considering the analysis and weighing the benefits and
burdens, the Secretary has concluded that a standard set at the
Recommended TSL for dishwashers would be economically justified. At
this TSL, the shipments weighted-average LCC savings for both product
classes is $17. The shipments weighted-average share of consumers with
a net LCC cost for both product classes is 3 percent. For all consumer
sub-groups, the LCC savings are positive and the net share of consumers
with a net LCC cost is below 5 percent for both product classes. The
FFC national energy and water savings are significant and the NPV of
consumer benefits is $2.90 billion and $1.23 billion using both a 3-
percent and 7-percent discount rate respectively. Notably, the benefits
to consumers vastly outweigh the cost to manufacturers. At the
Recommended TSL, the NPV of consumer benefits, even measured at the
more conservative discount rate of 7 percent, is over eight times
higher than the maximum estimated manufacturers' loss in INPV. The
standard levels at the Recommended TSL are economically justified even
without weighing the estimated monetary value of emissions reductions.
When those emissions reductions are included--representing $0.54
billion in climate benefits (associated with the average SC-GHG at a 3-
percent discount rate), and $0.94 billion (using a 3-percent discount
rate) or $0.37 billion (using a 7-percent discount rate) in health
benefits--the rationale becomes stronger still.
The adopted standards are applicable to the regulated cycle type
(i.e., normal cycle) as specified by the DOE test procedures;
manufacturers can continue to provide additional, non-regulated cycle
types (e.g., quick cycles, pots and pans, heavy, delicates, etc.).
Specifically, DOE expects quick cycles, many of which clean a load
within 1 hour or less, and existing drying options would still be
available on dishwasher models that currently offer such cycle types.
DOE has no information suggesting that any aspect of this direct final
rule would limit the other cycle options, especially quick cycles.
Additionally, in the January 2022 Preliminary TSD, DOE provided data
from its investigatory testing sample that determined cycle time is not
substantively correlated with energy and water consumption of the
normal cycle.\144\ Based on these results, DOE has determined that this
direct final rule would not have any substantive impact to normal cycle
durations.
---------------------------------------------------------------------------
\144\ See section 5.5.1 of the January 2022 Preliminary TSD.
Available at www.energy.gov/sites/default/files/2022-01/dw-tsd.pdf.
---------------------------------------------------------------------------
The test procedure in appendix C2, which includes provisions for a
minimum cleaning index threshold of 70 to validate the selected test
cycle, will go into effect at such time as compliance is required with
any amended energy conservation standards. At the Recommended TSL, both
standard-size and compact-size dishwasher models achieving the
efficiencies, as measured by appendix C2, including the cleaning
performance threshold, are readily available on the market.
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
amended energy conservation standards, DOE considers amended standard
levels for dishwashers by grouping the efficiency levels for each
product class into TSLs and evaluates all analyzed efficiency levels in
its LCC analysis and all efficiency levels with positive LCC savings
for the NIA and MIA. For both standard-size and compact-size
dishwashers, the adopted standard level represents the maximum energy
savings that do not result in a large percentage of consumers
experiencing a net LCC cost. The efficiency levels at the adopted
standard level result in positive LCC savings for both product classes,
significantly reduce the number of consumers experiencing a net cost,
and reduce the decrease in INPV and conversion costs to the point where
DOE has concluded they are economically justified, as discussed for the
Recommended TSL in the preceding paragraphs.
At the Recommended standard level for the standard-size product
class, the average LCC savings are $17, the percentage of consumers
experiencing a net cost is 3 percent (see Table V.3), and
[[Page 31478]]
the FFC energy savings are 0.3 quads. At the Recommended standard level
for compact-size product class, the average LCC savings are $32 and
there are no consumers that would experience a net cost. DOE concludes
that there is economic justification to adopt the standards for
standard-size and compact size dishwashers independent of each other.
Therefore, based on the previous considerations, DOE adopts the
energy conservation standards for dishwashers at the Recommended TSL.
While DOE considered each potential TSL under the criteria laid out
in 42 U.S.C. 6295(o) as discussed in the preceding paragraphs, DOE
notes that the Recommended TSL for dishwashers adopted in this direct
final rule is part of a multi-product Joint Agreement covering six
rulemakings (refrigerators, refrigerator-freezers, and freezers;
miscellaneous refrigeration products; consumer conventional cooking
products; residential clothes washers; consumer clothes dryers; and
dishwashers). The signatories indicate that the Joint Agreement for the
six rulemakings should be considered as a joint statement of
recommended standards, to be adopted in its entirety. As discussed in
section V.B.2.e of this document, many dishwasher OEMs also manufacture
refrigerators, refrigerator-freezers, and freezers, miscellaneous
refrigeration products, consumer conventional cooking products,
residential clothes washers, and consumer clothes dryers. Rather than
requiring compliance with five amended standards in a single year
(2027),\145\ the negotiated multi-product Joint Agreement staggers the
compliance dates for the five amended standards over a 4-year period
(2027-2030). In response to the May 2023 NOPR, AHAM expressed concerns
about the timing of ongoing home appliance rulemakings. Specifically,
AHAM commented that the combination of the stringency of DOE's
proposals, the short lead-in time required under EPCA to comply with
standards, and the overlapping timeframe of multiple standards
affecting the same manufacturers represents significant cumulative
regulatory burden for the home appliance industry. (AHAM, No. 51 at pp.
21-24) AHAM has submitted similar comments to other ongoing consumer
product rulemakings.\146\ As AHAM is a key signatory of the Joint
Agreement, DOE understands that the compliance dates recommended in the
Joint Agreement would help reduce cumulative regulatory burden. These
compliance dates help relieve concern on the part of some manufacturers
about their ability to allocate sufficient resources to comply with
multiple concurrent amended standards, about the need to align
compliance dates for products that are typically designed or sold as
matched pairs, and about the ability of their suppliers to ramp up
production of key components. The Joint Agreement also provides
additional years of regulatory certainty for manufacturers and their
suppliers while still achieving the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
---------------------------------------------------------------------------
\145\ The refrigerators, refrigerator-freezers, and freezers (88
FR 12452); consumer conventional cooking products (88 FR 6818);
residential clothes washers (88 FR 13520); consumer clothes dryers
(87 FR 51734); and dishwashers (88 FR 32514) utilized a 2027
compliance year for analysis at the proposed rule stage.
Miscellaneous refrigeration products (88 FR 12452) utilized a 2029
compliance year for the NOPR analysis.
\146\ AHAM has submitted written comments regarding cumulative
regulatory burden for the other five rulemakings included in the
multi-product Joint Agreement. AHAM's written comments on cumulative
regulatory burden are available at: www.regulations.gov/comment/EERE-2017-BT-STD-0003-0069 (pp. 20-21) for refrigerators,
refrigerator-freezers, and freezers; www.regulations.gov/comment/EERE-2020-BT-STD-0039-0031 (pp. 12-15) for miscellaneous
refrigeration products; www.regulations.gov/comment/EERE-2014-BT-STD-0005-2285 (pp. 44-47) for consumer conventional cooking
products; www.regulations.gov/comment/EERE-2017-BT-STD-0014-0464
(pp. 40-44) for residential clothes washers; and
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0046 (pp. 12-13)
for consumer clothes dryers.
---------------------------------------------------------------------------
The amended energy conservation standards for dishwashers, which
are expressed in EAEU and per-cycle water consumption, shall not exceed
the values shown in Table V.28.
[GRAPHIC] [TIFF OMITTED] TR24AP24.053
2. Annualized Benefits and Costs of the Adopted Standards
The benefits and costs of the adopted 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 adopted standards
(consisting primarily of operating cost savings from using less energy
and water), minus increases in product purchase costs, and 2) the
annualized monetary value of the climate and health benefits.
Table V.29 shows the annualized values for dishwashers under the
Recommended TSL, 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 reductions, and the 3-percent
discount rate case for GHG social costs, the estimated cost of the
adopted standards for dishwashers is $14.0 million per year in
increased equipment installed costs, while the estimated annual
benefits are $127.2 million from reduced equipment operating costs,
$29.0 million in GHG reductions, and $34.3 million from reduced
NOX and SO2 emissions. In this case, the net
benefit amounts to $176.4 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the adopted standards for dishwashers is $14.0
million per year in increased equipment costs, while the estimated
[[Page 31479]]
annual benefits are $171.2 million in reduced operating costs, $29.0
million from GHG reductions, and $50.8 million from reduced
NOX and SO2 emissions. In this case, the net
benefit amounts to $237.0 million per year.
BILLING CODE 6450-01-P
[[Page 31480]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.054
[[Page 31481]]
[GRAPHIC] [TIFF OMITTED] TR24AP24.055
BILLING CODE 6450-01-C
VI. Severability
DOE added a new paragraph (3) into section 10 CFR 430.32(f) to
provide that each energy and water conservation for each dishwasher
category is separate and severable from one another, and that if any
energy or water conservation standard is stayed or determined to be
invalid by a court of competent jurisdiction, the remaining standards
shall continue in effect. This severability clause is intended to
clearly express the Department's intent that should an energy or water
conservation standard for any product class be stayed or invalidated,
the other conservation standards shall continue in effect. In the event
a court were to stay or invalidate one or more energy or water
conservation standards for any product class as finalized, the
Department would want the remaining energy or conservation standards as
finalized to remain in full force and legal effect.
VII. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
Executive Order (``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
(Apr. 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, OIRA in the 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 this preamble, this final
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 final regulatory action constitutes a
``significant regulatory action'' within the scope of section 3(f) of
E.O. 12866. DOE has provided to OIRA an assessment, including the
underlying analysis, of benefits and costs anticipated from the final
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 and a final
regulatory flexibility analysis 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 is not obligated to prepare a regulatory flexibility analysis
for this rulemaking because there is not a requirement to publish a
general notice of proposed rulemaking under the Administrative
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously,
DOE has determined that the Joint Agreement meets the necessary
requirements under EPCA to issue this direct final rule for energy
conservation standards for dishwashers under the procedures in 42
U.S.C. 6295(p)(4). DOE notes that the NOPR for energy conservation
standards for dishwashers published elsewhere in this issue of the
Federal Register contains a regulatory flexibility analysis.
C. Review Under the Paperwork Reduction Act
Manufacturers of dishwashers 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 dishwashers, including any amendments
adopted for those test
[[Page 31482]]
procedures. DOE has established regulations for the certification and
recordkeeping requirements for all covered consumer products and
commercial equipment, including dishwashers. (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
Pursuant to the National Environmental Policy Act of 1969
(``NEPA''), DOE has analyzed this proposed action rule in accordance
with NEPA and DOE's NEPA implementing regulations (10 CFR part 1021).
DOE has determined that this rule qualifies for categorical exclusion
under 10 CFR part 1021, subpart D, appendix B5.1 because it is a
rulemaking that establishes energy conservation standards for consumer
products or industrial equipment, none of the exceptions identified in
B5.1(b) apply, no extraordinary circumstances exist that require
further environmental analysis, and it meets the requirements for
application of a categorical exclusion. See 10 CFR 1021.410. Therefore,
DOE has determined that promulgation of this rule is not a major
Federal action significantly affecting the quality of the human
environment within the meaning of NEPA, and does not require an
environmental assessment or an environmental impact statement.
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 rule and has 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 final 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 E.O. 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 direct final 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, sec. 201 (codified at 2 U.S.C. 1531).
For a 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 ``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.
DOE has concluded that this direct final rule may require
expenditures of $100 million or more in any one year by the private
sector. Such expenditures may include (1) investment in research and
development and in capital expenditures by dishwashers manufacturers in
the years between the direct final rule and the compliance date for the
new standards and (2) incremental additional expenditures by consumers
to purchase higher-efficiency dishwashers, starting at the compliance
date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the direct final rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this document and the TSD for this
[[Page 31483]]
direct final rule respond to those requirements.
Under section 205 of UMRA, DOE is obligated to identify and
consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the rule unless DOE publishes an
explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m),
this direct final rule establishes amended energy conservation
standards for dishwashers that are designed to achieve the maximum
improvement in energy efficiency that DOE has determined to be both
technologically feasible and economically justified, as required by
6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives
considered by DOE is presented in chapter 17 of the TSD for this direct
final rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
Although this direct final rule would not have any impact on the
autonomy or integrity of the family as an institution as defined, this
rule could impact a family's well-being. When developing a Family
Policymaking Assessment, agencies must assess whether: (1) the action
strengthens or erodes the stability or safety of the family and,
particularly, the marital commitment; (2) the action strengthens or
erodes the authority and rights of parents in the education, nurture,
and supervision of their children; (3) the action helps the family
perform its functions, or substitutes governmental activity for the
function; (4) the action increases or decreases disposable income or
poverty of families and children; (5) the proposed benefits of the
action justify the financial impact on the family; (6) the action may
be carried out by State or local government or by the family; and
whether (7) the action establishes an implicit or explicit policy
concerning the relationship between the behavior and personal
responsibility of youth, and the norms of society.
DOE has considered how the proposed benefits of this rule compare
to the possible financial impact on a family (the only factor listed
that is relevant to this rule). As part of its rulemaking process, DOE
must determine whether the energy conservation standards contained in
this final rule are economically justified. As discussed in section
V.C.1 of this document, DOE has determined that the standards are
economically justified because the benefits to consumers far outweigh
the costs to manufacturers. Families will also see LCC savings as a
result of this rule. Moreover, as discussed further in section V.B.1 of
this document, DOE has determined that for the for low-income
households, average LCC savings and PBP at the considered efficiency
levels are improved (i.e., higher LCC savings and lower payback period)
as compared to the average for all households. Further, the standards
will also result in climate and health benefits for families.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this 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 direct final rule 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 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 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.
[[Page 31484]]
DOE has concluded that this regulatory action, which sets forth
amended energy conservation standards for dishwashers, is not a
significant energy action because the 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 direct final 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 prepared a report describing that peer
review.\147\ 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.\148\
---------------------------------------------------------------------------
\147\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed Nov. 15, 2023).
\148\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
M. Materials Incorporated by Reference
The following standard appears in the amendatory text of this
document and was previously approved for the locations in which it
appears: AHAM DW-1-2020.
N. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that the Office of Information and Regulatory Affairs has
determined that this rule meets the criteria set forth in 5 U.S.C.
804(2).
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this direct
final rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Reporting and
recordkeeping requirements, Small businesses.
Signing Authority
This document of the Department of Energy was signed on April 12,
2024 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 April 12, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE amends part 430 of
chapter II, subchapter D, of title 10 of the 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 (f) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(f) Dishwashers. (1) All dishwashers manufactured on or after May
30, 2013, shall meet the following standard--
(i) Standard size dishwashers shall not exceed 307 kwh/year and 5.0
gallons per cycle. Standard size dishwashers have a capacity equal to
or greater than eight place settings plus six serving pieces as
specified in AHAM DW-1-2020 (incorporated by reference, see Sec.
430.3) using the test load specified in section 2.3 of appendix C1 or
section 2.4 of appendix C2 to subpart B of this part, as applicable.
(ii) Compact size dishwashers shall not exceed 222 kwh/year and 3.5
gallons per cycle. Compact size dishwashers have a capacity less than
eight place settings plus six serving pieces as specified in AHAM DW-1-
2020 (incorporated by reference, see Sec. 430.3) using the test load
specified in section 2.3 of appendix C1 or section 2.4 of appendix C2
to subpart B of this part, as applicable.
(2) All dishwashers manufactured on or after April 23, 2027, shall
not exceed the following standard--
[[Page 31485]]
------------------------------------------------------------------------
Estimated annual Maximum per-cycle
Product class energy use (kWh/ water consumption
year) (gal/cycle)
------------------------------------------------------------------------
(i) Standard-size \1\ (>=8 place 223 3.3
settings plus 6 serving pieces)
\2\..............................
(ii) Compact-size (<8 place 174 3.1
settings plus 6 serving pieces)
\2\..............................
------------------------------------------------------------------------
\1\ The energy conservation standards in this table do not apply to
standard-size dishwashers with a cycle time for the normal cycle of 60
minutes or less.
\2\ Place settings are as specified in AHAM DW-1-2020 (incorporated by
reference, see Sec. 430.3) and the test load is as specified in
section 2.4 of appendix C2 to subpart B of this part.
(3) The provisions of paragraph (f)(2) of this section are separate
and severable from one another. Should a court of competent
jurisdiction hold any provision(s) of this section to be stayed or
invalid, such action shall not affect any other provision of this
section.
* * * * *
[FR Doc. 2024-08212 Filed 4-23-24; 8:45 am]
BILLING CODE 6450-01-P
