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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Proposed Rules
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multiple regulations do not affect the same revenue streams but lead to industry constraints due to resources shared such as capital, engineering time, test lab availability, or limited capacity of shared vendors across covered products, DOE will describe and consider those industry constraints.
k Competitive Impact Assessment. EPCA
directs the Department to consider any lessening of competition that is likely to result from imposition of standards. It further directs the Attorney General to determine in writing the impacts, if any, of any lessening of competition. To assist the Attorney General in making this determination, DOE
will gather information that would help in assessing asymmetrical cost increases to some manufacturers, increased proportion of fixed costs potentially increasing business risks, and potential barriers to market entry e.g., proprietary technologies.
l Manufacturing Capacity Impact.
Through public comment and during the manufacturer interviews, the Department will seek information to help identify impacts on manufacturing capacity, such as:
1 Capacity utilization and plant location decisions with and without new or amended standards;
2 The ability of manufacturers to upgrade or remodel existing facilities to accommodate new or amended standards;
3 The nature and value of stranded assets, if any, that are a direct result of new or amended standards; and 4 Estimates for any one-time restructuring and other charges, where applicable.
m Direct Employment Impacts. To assess how direct employment patterns might be affected by new or amended standards, the Department will solicit industry participant views on changes in employment patterns that may result from increased standard levels. To help bound quantitative estimates of the potential employment impacts, the Department will use the GRIM to estimate the number of direct employees in the no-newstandards case and in each of the standards cases during the analysis period.
n Summary of quantitative and qualitative assessments. The NOPR will include a summary of the manufacturer impacts detailed in the TSD. In the NOPR, DOE will report the manufacturer impacts for standard levels that are evaluated and discuss quantitative and qualitative impacts by standard level.
14. Principles for the Analysis of Impacts on Consumers a Early consideration of impacts on consumer utility. The Department will consider at the earliest stages of the development of a standard whether particular design options will lessen the utility of the covered products/equipment to the consumer. See paragraph c of section 6.
b Impacts on product/equipment availability. The Department will determine, based on consideration of information submitted during the standard development process, whether a proposed standard is likely to result in the unavailability of any covered product/equipment type with performance characteristics including reliability, features, sizes, capacities, and
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volumes that are substantially the same as products/equipment generally available in the U.S. at the time. DOE will not promulgate a standard if it concludes that it would result in such unavailability.
c Measures of consumer impacts. In the assessment of consumer impacts of standards, the Department will consider the Life-Cycle Cost and Payback Period to evaluate the savings in operating expenses relative to increases in the installed product cost.
1 Consumer discount rates. To determine present values of costs and benefits in lifecycle cost analysis for residential consumers, DOE will calculate discount rates as the weighted average real interest rate across consumer debt and equity holdings. For commercial/industrial consumers, DOE will calculate discount rates as the weighted average cost of capital. DOE will use discount rate distributions to capture the diversity of residential and commercial/industrial consumers.
2 Variation in consumer impacts. The Department will consider impacts on significant segments of consumers in determining standards levels, and will use representative consumer samples where possible to evaluate the potential distribution of impacts of candidate/trial standard levels being evaluated among consumers using the product under consideration for standards.
Where LCC savings are positive, the Department will also consider impacts on any significant subgroups of consumers that may be disproportionately impacted by a potential standard level, such as low-income households or small businesses. DOE will consider non-regulatory approaches as discussed in Section 15, taking into account significant impacts on identifiable subgroups.
3 Sensitivity and scenario analyses. For data or assumptions subject to a higher degree of uncertainty, the Department will also perform sensitivity and scenario analyses when appropriate.
15. Consideration of Non-Regulatory Approaches The Department recognizes that nonregulatory efforts by manufacturers, utilities, and other interested parties can result in substantial efficiency improvements. The Department intends to consider the likely effects of non-regulatory initiatives relative to standard levels being evaluated. DOE will attempt to base its assessment on the actual impacts of such initiatives to date, but it also will consider information presented regarding the impacts that any existing initiative might have in the future.
16. Cross-Cutting Analytical Assumptions In selecting values for certain cross-cutting analytical assumptions, DOE expects to rely upon the following sources and general principles.
a Underlying economic assumptions. The appliance standards analyses will generally use the same economic growth assumptions that underlie the most current Annual Energy Outlook AEO published by the Energy Information Administration EIA.
b Analytic time length. The appliance standards analyses will generally consider
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impacts over the lifetime of products shipped over a 30-year period. As a sensitivity case, the analyses may also use a shorter time period in analyzing the effects of the standard.
c Energy price trends. Analyses of the impact of appliance standards on users will generally adopt the reference energy price scenario of the EIAs most current AEO. The sensitivity of estimated impacts to possible variations in future energy prices are likely to be examined using the EIAs high and low energy price scenarios. The analyses will incorporate regional and/or marginal prices as appropriate and where available.
d Product/equipment-specific energyefficiency trends, without updated standards.
Product/equipment-specific energy-efficiency trends will be based on the best available historical market data, technology trends, and other product-specific assessments by DOE with input from interested parties.
e Discount rates for national costs and benefits. DOE uses both 3-percent and 7percent real discount rates when estimating national impacts. Those discount rates are in accordance with the Office of Management and Budget OMBs guidance to Federal agencies on developing regulatory analyses OMB Circular A4 Sept. 17, 2003 and section E., Identifying and Measuring Benefits and Costs, therein.
17. Emissions Analysis a Emissions reductions. DOE will use best practices at the time to estimate emission reductions of certain greenhouse gases and pollutants likely to result from standard levels being evaluated. To date best practice means the emissions analysis typically includes two components. In the first component, DOE typically develops the power sector emissions analysisto date best practice includes using a methodology that utilizes DOEs latest Annual Energy Outlook.
For site combustion of natural gas or petroleum fuels, to date best practice means the combustion emissions are typically estimated using emission intensity factors from the Environmental Protection Agency EPA. The second component of DOEs emissions analysis typically estimates the effect of standard levels being evaluated on emissions due to upstream activities in the fuel production chain. These upstream activities include the emissions related to extracting, processing, and transporting fuels to the site of combustion, e.g., as detailed in DOEs Full-Fuel-Cycle Statement of Policy 76 FR 51281 August 18, 2011.
b Monetization of emissions reductions.
For estimating the economic value of avoided emissions of carbon dioxide and other greenhouse gases, as well as those of other air pollutants, DOE will follow the best practices at the time, for example, by using accepted benefit-per-ton values from the scientific literature at the time.
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