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Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations DOEs ability to increase efficiencies would be limited, if not forestalled entirely. Further, if separate product classes are maintained to preserve lessefficient technologies, then future advancements in the energy efficiency of covered products would become largely voluntary, an outcome in conflict with Congresss purposes and goals in enacting EPCA.
Moreover, EPCA provides for consideration of the costs associated with difficult installations and the potential impact on consumers, including sub-groups of consumers, as part of the robust economic factors DOE
is statutorily required to consider. As discussed, such installation costs are appropriately considered when comparing the savings in operating costs to any increase in the price of, or in the initial charges for, a covered product or article of covered equipment which are likely to result from the imposition of standards, as directed by EPCA. 42
U.S.C. 6295o2BiII It is noted that EPCA requires DOE to consider whether its overall energy conservation standards are economically justified, not to assess economic justification in each individual instance, which is tantamount to what certain commenters would ask the agency to do.
In response to comments about market trends moving towards condensing appliances, DOE takes into consideration such trends as part of the national impact analysis conducted to determine whether amended standards are justified under EPCAs economic factors. As explained in the withdrawn March 2015 Furnaces NOPR and September 2016 Furnaces SNOPR for residential furnaces, a key component of the national impact analysis is the trend in energy efficiency projected for the nonew-standards case and each of the evaluated standards cases. 81 FR 65720, 65796 Sept. 23, 2016. In the withdrawn September 2016 Furnaces SNOPR, DOE projected growth in the national market share of condensing products in the base case analysis i.e., a scenario in which the current standards are not amended. Id.21 The features provision directs DOE to consider the availability of products with certain attributes following the establishment of new or amended energy conservation standards. The consideration of market trends is appropriately addressed as part of the economic evaluation to estimate the costs and energy savings at a national 21 See also Chapter 10 of the TSD to the September 2016 Furnaces SNOPR Available at:
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level consistent with 42 U.S.C.
6295o2BiII and 42 U.S.C.
6313a6BiiII, not as part of the features consideration.
Moreover, simply relying on the market to realize improvements in energy efficiency and related technological innovations would result in the Appliance Standards Program being largely voluntary, contrary to the purposes and goals of EPCA. The regulatory scheme prescribed by EPCA
directs DOE to drive efficiencies beyond what the market provides where energy conservation would result in significant energy savings and are technologically feasible and economically justified. See generally 42 U.S.C. 6295o; 42 U.S.C.
6313a6AC; 42 U.S.C. 6316a.
Based on the foregoing discussion, DOE revises its interpretation of EPCAs features provision in the context of condensing and non-condensing technology used in furnaces, water heating equipment, and similarlysituated appliances where permitted by EPCA along the lines discussed.
Accordingly, DOE concludes that in the context of residential furnaces, commercial water heaters, and similarly-situated products/equipment, use of non-condensing technology and associated venting is not a performance-related feature for the purpose of the EPCA prohibitions at 42
U.S.C. 6295o4 and 42 U.S.C.
6313a6BiiiIIaa.
D. Other Topics In the August 2021 NOPIR, DOE
stated that at the conclusion of this proceeding, the Department plans to again evaluate whether amended energy conservation standards would result in significant savings of energy, be technologically feasible, and be economically justified, consistent with its latest interpretation. 86 FR 48049, 48057 August 27, 2021.
Regarding the petition-for-rulemaking process, the CA IOUs commented that DOE should produce explicit guidelines on what types and what quantity of evidence is necessary to be considered as a petition to change DOE policies and processes for DOE rulemakings, in order to avoid wasted time and funds. CA
IOUs, No. 141 at p. 2.
A.O. Smith commented that the January 2021 reinterpretation disadvantages U.S.-based manufacturers against low-cost and subsidized products imported from outside the United States. A.O. Smith, No. 133 at p. 8 A.O. Smith also expressed concern that the January 2021 Final Interpretative Rule, if relied upon to set Federal efficiency standards, will invite many State petitions for exemption from
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Federal preemption in order to allow for stricter State regulations, given the low Federal standards that would be adopted. Id..
GEUAG provided a number of criticisms of the economic analysis performed by DOE as part of past rulemakings to evaluate amended energy conservation standards.
GEUAG, No. 132 at pp. 9, 11 GEUAG
also provided a number of comments regarding the economic analyses conducted as part of the withdrawn rulemaking notices, including comments on the assumptions relied on in the Monte Carlo analyses conducted as part of the national impact analysis, which GEUAG asserted inflated the estimated energy savings. Id. at p. 9
Similarly, APGA et al. asserted that a condensing standard for gas products is not economically justified and questioned a number of aspects of the economic analyses conducted as part of the prior standards rulemakings. APGA
et al., No. 140 at pp. 1215.
AGA et al. encouraged DOE to adopt minimum efficiency standards and related policies only after consideration of all relevant points of view, including the distributors of natural gas, whose desire for the efficient use of natural gas is matched only by their commitment to ensure minimum standards do not distort consumers choices away from natural gas to potentially more costly fuel sources. AGA et al., No. 135 at p.
3.
Other commenters urged DOE to finalize the August 2021 NOPIR and proceed with rulemakings to set new energy efficiency standards expeditiously. The CA IOUs commented that DOE should not restart rulemakings for residential furnaces and commercial water heaters from scratch, because the previous analyses are still relevant, and new standards should be established.
CA IOUs, No. 141 at p. 3 The State Attorneys General and ASAP et al.
urged DOE to finalize its proposed interpretive rule and proceed expeditiously towards updating efficiency standards for residential furnaces and commercial hot water heaters. State Attorneys General, No.
136 at p. 4; ASAP et al., No. 143 at p.
3 NEEA recommended that DOE
finalize the August 2021 proposed interpretive rule as soon as possible and proceed expeditiously with the rulemakings for non-weatherized gas furnaces and commercial water heating equipment, which have the potential to result in significant energy savings.
NEEA, No. 137 at pp. 34 CEC
likewise urged DOE to finalize the proposed interpretation as soon as possible and to consider energy savings,
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