Je veux savoir à propos de…

Federal Register / Vol. 86, No. 110 / Thursday, June 10, 2021 / Proposed Rules E. Economic Justification
khammond on DSKJM1Z7X2PROD with PROPOSALS

1. Specific Criteria As noted previously, EPCA provides seven factors to be considered in determining whether a potential energy conservation standard is economically justified. 42 U.S.C. 6313a6BiiI
VII The following sections provide an overview of each of those seven factors.
a. Economic Impact on Manufacturers and Consumers In determining the impacts of a potential amended standard on manufacturers, DOE typically conducts a manufacturer impact analysis MIA.
In conducting a MIA, DOE uses an annual cash-flow approach to compare the quantitative impacts between the no-new-standards and the amended standards cases. The industry-wide impacts typically analyzed include: 1
Industry net present value 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. However, DOE is not proposing amended standards for UFHWSTs, and, therefore, this proposed determination would have no cash-flow impacts on manufacturers. Accordingly, as discussed further in section IV.G of this document, DOE did not conduct an MIA for this NOPD.
For individual consumers, measures of economic impact include the changes in the life-cycle cost LCC and payback period PBP associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also typically calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE
also typically evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard. However, as discussed in section V.A.2 of this document, due to significant uncertainties regarding the costs of alterations to doorways and mechanical rooms which may be required in certain replacement installations in order to get an UFHWST
to its installation destination if additional insulation thickness makes the UFHWST too large for existing structures to accommodate and the lack of data indicating the likelihood of such alterations being required, any analysis conducted by DOE regarding the LCC or PBP would be of limited value because of the lack of data and high degree of uncertainty of the inputs to those analyses. Therefore, DOE did not
VerDate Sep<11>2014

16:41 Jun 09, 2021

Jkt 253001

30801

estimate the NPV of consumer costs and benefits.

analyses meant that the outputs would be of little value.

b. Savings in Operating Costs Compared to Increase in Price LCC and PBP

c. Energy Savings Although significant conservation of energy is a separate statutory requirement for amending 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.
6313a6BiiIII As discussed in section IV.F of this document, DOE uses the NIA spreadsheet models to project national energy savings.

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. 6313a6BiiII DOE
typically conducts this comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of equipment including its installation and the operating expense including energy, maintenance, and repair expenditures discounted over the lifetime of the equipment. The LCC
analysis requires a variety of inputs, such as equipment prices, energy consumption, energy prices, maintenance and repair costs, equipment lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as equipment 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 more-efficient equipment 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. This type of calculation is known as a simple payback period because it does not take into account changes in operating expenses over time or the time value of money i.e., the calculation is done at an effective discount rate of zero percent. Payback periods greater than the life of the equipment indicate that the increased total installed cost is not recovered by the reduced operating expenses.
For its LCC and PBP analysis, DOE
assumes that consumers will purchase the equipment 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.
As discussed in section IV.D of this document, DOE did not conduct an LCC
and PBP analysis for this NOPD because the lack of data and high degree of uncertainty of the inputs to those
PO 00000

Frm 00007

Fmt 4702

Sfmt 4702

d. Lessening of Utility or Performance of Equipment In establishing equipment 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.
6313a6BiiIV Because DOE is not proposing standards for UFHWSTs, the Department has tentatively concluded that this proposed determination would not reduce the utility or performance of UFHWSTs.
e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. 42 U.S.C.
6313a6BiiV Because DOE is not proposing standards for UFHWSTs, DOE did not transmit a copy of its proposed determination to the Attorney General for anti-competitive review.
f. Need for National Energy Conservation DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. 42
U.S.C. 6313a6BiiVI Because DOE has tentatively concluded that it lacks clear and convincing evidence that amended standards for UFHWSTs would result in significant additional conservation of energy or be economically justified, DOE did not conduct a utility impact analysis or emissions analysis for this NOPD.
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.
6313a6BiiVII To the extent DOE

E:FRFM10JNP1.SGM

10JNP1