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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Proposed Rules E. Analytical Methodology In the February 2020 Process Rule, DOE stated that it would consider changes to sections of the Process Rule involving its analytical methodologies in a subsequent proceeding after completion of a peer review. 85 FR
86868687. As such, these sections remained largely unchanged from the 1996 Process Rule. Subsequently, DOE
engaged with the National Academy of Sciences NAS to review DOEs analytical methodologies to ascertain whether modifications are needed to improve the Departments analyses.
That review process is still ongoing.
Upon further reconsideration, DOE
believes that it is important to revise the analytical sections in the Process Rule to better reflect Departmental practice.
The descriptions of the analyses currently in sections 1317 present the procedures, interpretations, and policies as set forth in the 1996 Process Rule. In the years following that final rule, DOEs analyses have evolved and been refined. The revisions proposed in the following sections reflect the current state of DOEs analytical methodologies.
If DOE makes any revisions to its analytical methods based on the NAS
peer review, the Department will propose any necessary corresponding revisions to the Process Rule in a subsequent proceeding.

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1. New Section 12 Principles for the Conduct of the Engineering Analysis DOE proposes to update the description of the analysis to more comprehensively describe the various approaches DOE takes in developing cost-efficiency relationships.
Specifically, DOE proposes to reorganize the discussion to clearly describe the two key aspects of the engineering analysis: The efficiency analysis i.e., identifying the efficiency levels for analysis and the cost analysis i.e., estimating the costs at each analyzed efficiency level.
In particular, 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.
DOE typically uses one or a combination of approaches to conduct the cost analysis, including 1 physical teardowns i.e., physically dismantling a commercially available product/
equipment model, component-by-

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component, to develop a detailed bill of materials for the model; 2 catalog teardowns i.e., identifying each component using parts diagrams available from manufacturer websites or appliance repair websites, in lieu of physically deconstructing the product/
equipment, to develop the bill of materials for the product/equipment;
and/or 3 price surveys i.e., deriving costs using publicly available pricing data published on major online retailer websites and/or by soliciting prices from distributors and other commercial channels. The choice of approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the subject product/equipment, and the availability and timeliness of purchasing the product/equipment on the market.
2. New Section 13 Principles for the Analysis of Impacts on Manufacturers In the preamble to the July 1996
Process Rule, the Department of Energy committed to a detailed review of the existing manufacturer impact analysis methodologies. 61 FR 36974, 36979.
During a series of public consultations in 1997, the Department presented a draft work plan for the development of new methods for assessing manufacturer impacts and invited comments and suggestions from interested parties. See 62 FR 8189 Feb. 24, 1997. The Department implemented its revised Manufacturer Impact Analysis methodologies for final rules issued subsequently. DOE proposes to update the Process Rule to align with the manufacturer impact analysis methodologies that are the result of the 1997 process and subsequent stakeholder input. DOE proposes to clarify the process used to evaluate manufacturers impacts and expands the guidance on the methodologies used to solicit stakeholder input. The updates include:
Acknowledgement of the manufacturer interview process. DOE
adds language to reflect a critical tool used as part of the current process, wherein manufacturer specific data and information are used to develop and validate key inputs for the manufacturer impact analysis.
Added detail on use of the Government Regulatory Impact Model GRIM. The 1996 and 2020 Process Rules make mention of the GRIM
without explanation of the model. DOE
adds language on the structure, underlying principles, and outputs of the model.
Differentiation between types of cost impacts. To better reflect the
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current process, DOE expands discussion about the types of manufacturer cost impacts considered in the analysis.
Clarification on the treatment of manufacturer subgroups. To be consistent with the current process, DOE adds criteria on the evaluation of subgroups of manufacturers that may be disproportionately impacted by standards or that may not be accurately represented by the average cost assumptions.
Consideration of competitive impacts, as required by EPCA. To be consistent with the current process and with EPCA, DOE adds criteria to consider any lessening of competition that is likely to result from imposition of standards and clarifies how the Department will coordinate with the Department of Justice.
Inclusion of stakeholder concerns related to manufacturing capacity and direct employment impacts. To be consistent with the current process, DOE highlights criteria related to manufacturing capacity and direct employment impacts that the Department considers in its assessment of impacts on manufacturers.
3. New Section 14 Principles for the Analysis of Impacts on Consumers DOE proposes minor changes to the discussion of analytical principles related to consumer impacts. These changes reflect the analytical methodologies that are the result of several iterations of stakeholder input and regulatory review, advances in data availability, and advances in analytical techniques in the academic literature. In particular, DOE proposes the following changes: 1 Clarifications regarding the use of analytical input distributions in order to establish representative consumer samples and evaluate the range of potential impacts. These changes help to differentiate variation in consumer impacts captured in the LifeCycle Cost LCC analysis from additional sensitivity or scenario analyses used for data or assumptions subject to a higher degree of uncertainty;
2 clarifications to differentiate the LCC
analysis from the consumer subgroup analysis, the latter of which considers impacts on subgroups of consumers who may be disproportionately impacted by a potential standard; 3
removal of discussion of magnitude of first cost and length of payback period triggering additional assessments, as those assessments are always made when relevant to a given products; and 4 the addition of a discussion on consumer discount rates, found in section 17 of the current Process Rule.

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