Developing an Energy Efficiency Standard

Typical Process

Between 1995 and 1996, the U.S. Department of Energy (DOE) conducted a formal effort to improve the process it used to develop appliance efficiency standards. This effort involved many different stakeholders, including manufacturers, energy-efficiency advocates, trade associations, state agencies, utilities, and other interested parties. The result was the publication of the Process Rule: 61 FR 36974 (July 15, 1996). DOE is currently working to revise the existing Process Rule. The most up to date information about this can be found on regulations.gov in Docket No. EERE-2017-BT-STD-0062.

As described on the DOE Standards Development and Revision webpage, the rulemaking process typically involves four steps for a given consumer product or commercial or industrial equipment type:

  • The publication of a framework document in which DOE describes the overall approach it is considering in developing potential energy conservation standards for a particular product or equipment;
  • The publication of a preliminary analysis that focuses on the analytical methodology DOE is considering in setting potential standards;
  • The issuance of a notice of proposed rulemaking (NOPR); and
  • The issuance of a final rule.

Between each of these phases, DOE provides a public comment period and holds a public meeting to discuss a variety of relevant issues under consideration in developing potential standards. DOE also makes the spreadsheet tools and results of any supporting analysis available on its website for review.[1]

Analytical Support

To support DOE in evaluating and setting new or amended energy conservation, EES and other DOE contractors conduct a series of engineering and economic analyses. The analyses are germane to creating standards that achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified and will result in significant energy savings, as required by statute. Economic justification includes the consideration of economic impacts on domestic manufacturers and consumers, national benefits including environmental impacts, issues of purchaser utility, and impacts from any lessening of competition.

As part of the preliminary analysis, EES and/or other DOE contractors consult with interested parties and research industry literature to identify the design options or efficiency levels that DOE will consider in the rulemaking. These design options or efficiency levels are used to collect manufacturer cost data, historical shipment data, shipment-weighted average efficiency data, and preliminary manufacturer impact data (e.g., capital conversion expenditures, marketing costs, and research and development (R&D) costs).

Using these data, the EES group conducts the following analyses as part of the preliminary analysis, including:

The results of these analyses are presented in the preliminary analysis technical support document (TSD).

Based on the preliminary results of these analyses, EES recommends to DOE candidate standard levels (CSLs) from the energy efficiency levels considered in the preliminary analysis. In addition to the efficiency level corresponding to the maximum technologically feasible ("max-tech") efficiency level, the considered efficiency levels or design options that span the full range of technologically achievable efficiencies.

EES uses analytical models and tools to assess the different equipment classes at each efficiency level analyzed. Many of these analytical models and tools are in the form of spreadsheets used to conduct the LCC and PBP analyses and to determine the NES and NPV of prospective standards. Discussion of various CSLs in the preliminary analysis helps interested parties review the spreadsheet models that underpin the analyses. DOE uses comments from interested parties to refine the models for the next stage of the rulemaking analyses.

In developing the NOPR and the final rule, EES revises the analyses performed during the preliminary analysis phase, and conducts additional economic and environmental impact analyses. These analyses includes:

  • LCC analysis for user subgroups;
  • utility impact analysis;
  • employment impact analysis ;
  • emissions analysis;
  • monetization of emissions; and
  • regulatory impact analysis.

[1] All materials associated with DOE's rulemakings, product test procedures, and energy conservation standards are available on DOE's website.