AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Request for information and early assessment review.

SUMMARY:

The U.S. Department of Energy (“DOE”) is initiating an early assessment review to determine whether any new or amended standards would satisfy the relevant requirements of EPCA for a new or amended energy conservation standard for commercial prerinse spray valves (“CPSVs”). Specifically, through this request for information (“RFI”), DOE seeks data and information that could enable the agency to determine whether DOE should propose a “no new standard” determination because a more stringent standard: Would not result in a significant savings of energy; is not technologically feasible; is not economically justified; or any combination of foregoing. DOE also welcomes written comments from the public on any subject within the scope of this document (including those topics not specifically raised), as well as the submission of data and other relevant information concerning this early assessment review.

DATES:

Written comments and information are requested and will be accepted on or before July 10, 2020.

ADDRESSES:

Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at http://www.regulations.gov. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE-2019-BT-STD-0034, by any of the following methods:

(1) Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

(2) Email: CPSV2019STD0034@ee.doe.gov. Include the docket number EERE-2019-BT-STD-0034 in the subject line of the message.

(3) Postal Mail: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 287-1445. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

(4) Hand Delivery/Courier: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

No telefacsimiles (“faxes”) will be accepted. For detailed instructions on submitting comments and additional information on this process, see section III of this document.

Docket: The docket for this activity, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at http://www.regulations.gov. All documents in the docket are listed in the http://www.regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available.

The docket web page can be found at http://www.regulations.gov/​docket?​D=​EERE-2019-BT-STD-0034. The docket web page contains instructions on how to access all documents, including public comments, in the docket. See section III for information on how to submit comments through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Ms. Lucy deButts, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 287-1604. Email: ApplianceStandardsQuestions@ee.doe.gov.

Ms. Kathryn McIntosh, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-2002. Email: Kathryn.McIntosh@hq.doe.gov.

For further information on how to submit a comment, or review other public comments and the docket contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email: ApplianceStandardsQuestions@ee.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

A. Authority and Background

B. Rulemaking Process

II. Request for Information and Comments

A. Equipment Covered by This Process

B. Market and Technology Assessment

1. Product Classes

2. Technology Assessment

C. Screening Analysis

D. Engineering Analysis

1. Baseline Efficiency Levels

2. Maximum Available and Maximum Technologically Feasible Levels

3. Manufacturer Production Costs and Manufacturing Selling Price

E. Markups Analysis

F. Energy and Water Use Analysis

G. Life Cycle Cost and Payback Period Analysis

H. Shipments

I. National Impact Analysis

J. Manufacturer Impact Analysis

K. Other Energy Conservation Standards Topics

1. Market Failures

2. Network Mode/“Smart” Technology

3. Other Issues

III. Submission of Comments

I. Introduction

A. Authority and Background

1. Authority

The Energy Policy and Conservation Act, as amended (“EPCA”),^[1] authorizes DOE to regulate the energy efficiency and water efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317) Title III, Part B ^[2] of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include commercial prerinse spray valves, the subject of this document. (42 U.S.C. 6291(33), 42 U.S.C. 6293(b)(14), 42 U.S.C. 6295(dd)) EPCA prescribed the initial energy conservation standards (in terms of flow rate) for commercial prerinse spray valves. (42 U.S.C. 6295(dd)) ^[3]

The energy conservation program under EPCA consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).

Federal energy and water efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy and water conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (42 U.S.C. 6297(d)).

EPCA requires that, not later than six years after the issuance of any final rule establishing or amending a standard, DOE evaluate the energy conservation standards for each type of covered product, including those at issue here, and publish either a notice of determination that the standards do not need to be amended, or a NOPR that includes new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) In making a determination that the standards do not need to be amended, DOE must evaluate whether amended standards (1) will result in significant conservation of energy and water, (2) are technologically feasible, and (3) are cost effective as described under 42 U.S.C. 6295(o)(2)(B)(i)(II). (42 U.S.C. 6295(m)(1)(A); 42 U.S.C. 6295(n)(2)) Under 42 U.S.C. 6295(o)(2)(B)(i)(II), DOE must determine whether the benefits of a standard exceed its burdens by, to the greatest extent practicable, considering 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 products which are likely to result from the imposition of the standard. If DOE determines not to amend a standard based on the statutory criteria, not later than three years after the issuance of a final determination not to amend standards, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B)) DOE must make the analysis on which a determination is based publicly available and provide an opportunity for written comment. (42 U.S.C. 6295(m)(2))

In proposing new standards, DOE must evaluate that proposal against the criteria of 42 U.S.C. 6295(o), as described in the following section, and follow the rulemaking procedures set out in 42 U.S.C. 6295(p). (42 U.S.C. 6295(m)(1)(B) If DOE decides to amend the standard based on the statutory criteria, DOE must publish a final rule not later than two years after energy conservation standards are proposed. (42 U.S.C. 6295(m)(3)(A))

2. Background

DOE codified the energy conservation standards initially prescribed by EPCA, which established a maximum flow rate of 1.6 gallons per minute (gpm) for commercial prerinse spray valves manufactured beginning January 1, 2006. 70 FR 60407 (October 18, 2005). On January 26, 2016, DOE issued a final rule establishing three product classes of commercial prerinse spray valves (defined by spray force in ounce-force (ozf)) and associated energy conservation standards for each product class. 81 FR 4748 (“January 2016 CPSV Final Rule”). The current energy conservation standards are located in title 10 of the Code of Federal Regulations (CFR) part 431, section 266. The currently applicable DOE test procedures for commercial prerinse spray valves appear at 10 CFR 431.264.

DOE is publishing this early assessment review RFI to collect data and information that could enable the agency to determine whether DOE should propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of foregoing.

B. Rulemaking Process

Pursuant to DOE's recently amended “Process Rule” (85 FR 8626; Feb. 14, 2020), DOE stated that as a first step in a proceeding to consider establishing or amending an energy conservation standard, such as the existing standards for CPSVs at issue in this notice, DOE would publish a notice in the Federal Register announcing that DOE is considering the initiation of a proceeding, and as part of that notice, DOE would request the submission of related comments, including data and information showing whether any new or amended standard would satisfy the relevant requirements in EPCA for a new or amended energy conservation standard. Based on the information received in response to the notice and its own analysis, DOE would determine whether to proceed with a rulemaking for a new or amended standard, or issue a proposed determination that the standards do not need to be amended.

When prescribing new or amended standards for covered products, DOE must follow specific statutory criteria. EPCA requires that any new or amended energy conservation standard prescribed by the Secretary of Energy (“Secretary”) be designed to achieve the maximum improvement in energy or, in the case of showerheads, faucets, water closets, or urinals, water efficiency, which is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE notes that the significant energy (water) savings requirement does not apply to prerinse spray valves. See 42 U.S.C. 6295(o)(3)(B) (specifying significant conservation of water for only “showerheads, faucets, water closets, or urinals”); see also 85 FR 8626, 8671. Likewise, the prohibition on amending a standard to allow greater water use does not apply to prerinse spray valves. See 42 U.S.C. 6295(o)(1) (prohibiting the prescription of any amended standard which increases the maximum allowable water use of only showerheads, faucets, water closets or urinals).

To determine whether a standard is economically justified, EPCA requires that DOE determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors:

(1) The economic impact of the standard on the manufacturers and consumers of the affected products;

(2) The savings in operating costs throughout the estimated average life of the product compared to any increases in the initial cost, or maintenance expenses;

(3) The total projected amount of energy and water (if applicable) savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the products likely to result from the standard;

(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;

(6) The need for national energy and water conservation; and

(7) Other factors the Secretary considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

DOE fulfills these and other applicable requirements by conducting a series of analyses throughout the rulemaking process. Table I.1 of this early assessment review RFI shows the individual analyses that are performed to satisfy each of the requirements within EPCA.

As noted in Section I.A, DOE is publishing this early assessment review RFI to collect data and information that could enable the agency to determine whether DOE should propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of foregoing.

II. Request for Information and Comments

In this early assessment review RFI, DOE has identified a variety of issues on which it seeks input to aid in the development of the technical and economic analyses regarding whether amended standards for commercial prerinse spray valves may be warranted.

Issue 1: As an initial matter, DOE seeks comment on whether there have been sufficient technological or market changes since the most recent standards update that may justify a new rulemaking to consider more stringent standards. Specifically, DOE seeks data and information that could enable the agency to determine whether DOE should propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy or water; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

A. Equipment Covered by This Process

This RFI covers equipment that meets the definition of commercial prerinse spray valve, as codified at 10 CFR 431.262. The definition of commercial prerinse spray valve was most recently amended in a test procedure final rule. 80 FR 81441 (December 30, 2015). A commercial prerinse spray valve is “a handheld device that has a release-to-close valve and is suitable for removing food residue from food service items before cleaning them in commercial dishwashing and ware washing equipment.” 10 CFR 431.262.

B. Market and Technology Assessment

The market and technology assessment that DOE routinely conducts when analyzing the impacts of a potential new or amended energy conservation standard provides information about the CPSV industry that will be used to determine whether DOE should propose a “no new standard” determination. DOE uses qualitative and quantitative information to characterize the structure of the industry and market. DOE identifies manufacturers, estimates market shares and trends, addresses regulatory and non-regulatory initiatives intended to improve energy and water efficiency or reduce energy and water consumption, and explores the potential for efficiency improvements in the design and manufacturing of commercial prerinse spray valves. DOE also reviews product literature, industry publications, and company websites. Additionally, DOE considers conducting interviews with manufacturers to improve its assessment of the market and available technologies for commercial prerinse spray valves.

1. Product Classes

When evaluating and establishing energy conservation standards, DOE may divide covered products into product classes by the type of energy used, or by capacity or other performance-related features that justify a standard higher or lower than that which applies (or would apply) for such type (or class) for any group of covered products that have the same function or intended use. (42 U.S.C. 6295(q)) In making a determination whether capacity or another performance-related feature justifies a separate product class, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE deems appropriate. Id.

For commercial prerinse spray valves, the current energy conservation standards specified in 10 CFR 431.266 are based on three product classes determined according to spray force, which is a performance-related feature that provides utility to the consumer. “Spray force” is defined as the amount of force exerted onto the spray disc, measured in ozf. 10 CFR 431.262. Table II.1 lists the current three product classes for commercial prerinse spray valves.

In the January 2016 CPSV Final Rule, DOE referenced an Environmental Protection Agency's (EPA) WaterSense® field study, which found that low water pressure, or spray force, can be a source of user dissatisfaction. 81 FR 4748, 4758-4759. Further, DOE explained that their market research had identified three distinct end-user applications requiring differing amounts of spray force: (1) Cleaning delicate glassware and removing loose food particles from dishware (which require the least amount of spray force), (2) cleaning wet food, and (3) cleaning baked-on foods (which requires the greatest amount of spray force). Id

Issue 2: DOE requests feedback and data on any changes to the end-user applications of each product class (1) cleaning delicate glassware and removing loose food particles from dishware, (2) cleaning wet food, (3) cleaning baked-on food. Further, DOE requests feedback on the commercial sectors purchasing commercial prerinse spray valves in each product class.

The spray force boundaries for the three product classes were determined based on an analyses of commercial prerinse spray valves on the market including a wide range of manufacturers, flow rates, and spray hole shapes and test results of commercial prerinse spray valves with shower-type spray shapes. 81 FR 4748, 4759-4760. DOE stated that shower-type spray shapes provide the distinct utility of minimizing “splash back” that can be associated with nozzle-type designs at higher flow rates. Id. Preliminary research indicates that many of these shower-type commercial prerinse spray valves are in product class 2 (>5.0 ozf and ≤8.0 ozf), with few in product class 3 (>8.0 ozf).

Issue 3: DOE requests feedback on the current CPSV product classes and whether changes to these individual product classes and their descriptions should be made or whether certain classes should be merged or separated (e.g., merging product class 2 and 3, further distinguishing commercial prerinse spray valves in product class 1 based on levels of efficiency, etc.). DOE further requests feedback on whether combining certain classes could impact product utility by eliminating any performance-related features or by impacting the stringency of the current energy conservation standard for these products. DOE also requests comment on separating any of the existing product classes and whether it would impact product utility by eliminating any performance-related features or reduce any compliance burdens.

Issue 4: DOE seeks information regarding any other new product classes it should consider for inclusion in its analysis. Specifically, DOE requests information on other performance-related features (e.g., cleanability, equipment usage time, splash-back, spray distance, etc.) that provide unique consumer utility and data detailing the corresponding impacts on energy and water use that would justify separate product classes (i.e., explanation for why the presence of these performance-related features would increase or decrease energy or water consumption).

2. Technology Assessment

In analyzing the feasibility of potential new or amended energy conservation standards, DOE uses information about existing and past technology options and prototype designs to help identify technologies that manufacturers could use to meet and/or exceed a given set of energy conservation standards under consideration. In consultation with interested parties, DOE intends to develop a list of technologies to consider in its analysis. That analysis will likely include a number of the technology options DOE previously considered during its most recent rulemaking for commercial prerinse spray valves. A complete list of those prior technology options are as follows:

(1) Addition of flow control insert,

(2) Smaller spray hole area,

(3) Aerators,

(4) Additional valves,

(5) Changing spray hole shape, and

(6) Venturi meter to orifice plate nozzle geometries.^[4]

DOE is not aware of any new technology options for reducing CPSV flow rate since the publication of the January 2016 CPSV Final Rule.

Issue 5: DOE seeks information on the technologies listed regarding their applicability to the current market and how these technologies may impact the efficiency of commercial prerinse spray valves as measured according to the DOE test procedure. DOE also seeks information on how these technologies may have changed since they were considered in the January 2016 CPSV Final Rule. Specifically, DOE seeks information on the range of efficiencies or performance characteristics that are currently available for each technology option.

Issue 6: DOE seeks information on any new technologies for reducing the flow rate of commercial prerinse spray valves, including their market adoption, costs, and any concerns with incorporating them into products (e.g., impacts on consumer utility, potential safety concerns, manufacturing/production/implementation issues, etc.).

Issue 7: DOE seeks comment on other technology options that it should consider for inclusion in its analysis and if these technologies may impact product features or consumer utility.

C. Screening Analysis

The purpose of the screening analysis is to evaluate the technologies that improve equipment efficiency to determine which technologies will be eliminated from further consideration and which will be passed to the engineering analysis for further consideration. In this early assessment RFI, DOE seeks data and information with respect to technologies previously screened out or retained that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

DOE determines whether to eliminate certain technology options from further consideration based on the following criteria:

(1) Technological feasibility. Technologies that are not incorporated in commercial products or in working prototypes will not be considered further.

(2) Practicability to manufacture, install, and service. If it is determined that mass production of a technology in commercial products and reliable installation and servicing of the technology could not be achieved on the scale necessary to serve the relevant market at the time of the compliance date of the standard, then that technology will not be considered further.

(3) Adverse Impacts on equipment utility or equipment availability. If a technology is determined to have significant adverse impact on the utility of the equipment to significant subgroups of consumers, or result in the unavailability of any covered equipment type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as equipment generally available in the United States at the time, it will not be considered further.

(4) Adverse impacts on health or safety. If it is determined that a technology will have significant adverse impacts on health or safety, it will not be considered further.

Unique-Pathway Proprietary Technologies. If a design option utilizes proprietary technology that represents a unique pathway to achieving a given efficiency level, that technology will not be considered further. See 85 FR 8626, 8705.

Technology options identified in the technology assessment are evaluated against these criteria using DOE analyses and inputs from interested parties (e.g., manufacturers, trade organizations, and energy efficiency advocates). Technologies that pass through the screening analysis are referred to as “design options” in the engineering analysis. Technology options that fail to meet one or more of the five criteria are eliminated from consideration.

Table II.2 of this RFI summarizes the technology options that DOE screened out in the January 2016 CPSV Final Rule, and the applicable screening criteria.

Issue 8: DOE requests feedback on what impact, if any, the five screening criteria described in this section would have on each of the technology options listed in section II.B.2 with respect to commercial prerinse spray valves. Similarly, DOE seeks information regarding how these same criteria would affect any other technology options not already identified in this document with respect to their potential use in commercial prerinse spray valves.

Issue 9: With respect to the screened-out technology options listed in Table II.2 of this RFI, DOE seeks information on whether these options would, based on current and projected assessments regarding each of them, remain screened out under the five screening criteria described in this section. With respect to each of these technology options, what steps, if any, could be (or have already been) taken to facilitate the introduction of each option to improve the energy performance of commercial prerinse spray valves and the potential to impact consumer utility of the commercial prerinse spray valves.

D. Engineering Analysis

The engineering analysis estimates the cost-efficiency relationship of equipment at different levels of increased energy efficiency (“efficiency levels”). This relationship serves as the basis for the cost-benefit calculations for consumers, manufacturers, and the Nation. In determining the cost-efficiency relationship, DOE estimates the increase in manufacturer production cost (“MPC”) associated with increasing the efficiency of products above the baseline, up to the maximum technologically feasible (“max-tech”) efficiency level for each product class. In this early assessment review RFI, DOE seeks data and information with respect to these cost-benefit calculations that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

DOE historically has used the following three methodologies to generate incremental manufacturing costs and establish efficiency levels (“ELs)” for analysis: (1) The design-option approach, which provides the incremental costs of adding to a baseline model design options that will improve its efficiency; (2) the efficiency-level approach, which provides the relative costs of achieving increases in energy efficiency levels, without regard to the particular design options used to achieve such increases; and (3) the cost-assessment (or reverse engineering) approach, which provides “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency, based on detailed cost data for parts and material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels.

1. Baseline Efficiency Levels

For each established product class, DOE selects a baseline model as a reference point against which any changes resulting from new or amended energy conservation standards can be measured. The baseline model in each product class represents the characteristics of common or typical products in that class. Typically, a baseline model is one that meets the current minimum energy conservation standards and provides basic consumer utility.

The current minimum energy conservations standards (for which compliance has been required beginning January 28, 2019) represent the current efficiency levels for each product class. The current standards for each product class are based on flow rate in gpm. The current standards for commercial prerinse spray valves are found at 10 CFR 431.266.

Issue 10: DOE requests feedback on whether the current energy conservation standards for commercial prerinse spray valves are appropriate baseline efficiency levels for DOE to consider in evaluating whether DOE should propose a “no new standard” determination.

Issue 11: DOE requests feedback on the appropriate baseline efficiency levels for any newly analyzed product classes that are not currently in place or for the contemplated combined product classes, as discussed in section II.B.1 of this document.

2. Maximum Available and Maximum Technologically Feasible Levels

As part of DOE's analysis, the maximum available efficiency level is the highest efficiency unit currently available on the market. For the January 2016 CPSV Final Rule, DOE analyzed all three CPSV product classes. The maximum available efficiencies for these three analyzed product classes are included in Table II.3 of this early assessment review RFI.

In the January 2016 CPSV Final Rule, DOE determined max-tech efficiency levels based on the least consumptive tested commercial prerinse spray valve in each product class. See chapter 5 of the January 2016 CPSV Final Rule technical support document (TSD) ^[5] for the analysis of max-tech efficiency levels in that rulemaking.

Issue 12: DOE seeks input on whether the maximum available efficiency levels are appropriate and technologically feasible for potential consideration in determining whether DOE could propose a “no new standard determination” for the products at issue—and if not, why not.

Issue 13: DOE seeks feedback on what design options would be incorporated at a max-tech efficiency level, and the efficiencies associated with those levels. As part of this request, DOE also seeks information as to whether there are limitations on the use of certain combinations of design options.

In the January 2016 CPSV Final Rule, DOE presented a theoretical linear relationship between CPSV flow rate and spray force, derived from both Bernoulli's principle of incompressible flow and the concept of conservation of mass in a fluid system. Further, DOE verified this linear relationship through market testing of available products and close matching between the theoretical relationship and the flow rates and spray forces of available products. 81 FR 4748, 4762. The relationship between flow rate and spray force is given below:

Issue 14: DOE requests comment and data on whether Eq. 1 continues to be applicable for determining the flow rate or spray force of a commercial prerinse spray valve on the market. If not, include any characteristics or technologies which would allow CPSV flow rates to be greater or lesser than that predicted by Eq. 1.

3. Manufacturer Production Costs and Manufacturing Selling Price

As described at the beginning of this section, the main outputs of the engineering analysis are cost-efficiency relationships that describe the estimated increases in manufacturer production cost associated with higher-efficiency products for the analyzed product classes. For the January 2016 CPSV Final Rule, DOE developed the cost-efficiency relationships by conducting teardowns of existing products and estimating the efficiency improvements and costs associated with incorporating specific design options into the assumed baseline model for each analyzed product class.

For the three product classes analyzed in the January 2016 CPSV Final Rule, DOE developed cost-efficiency curves and concluded that manufacturing production cost was unaffected by efficiency level, both within product classes and across product classes. See chapter 5 of the January 2016 CPSV Final Rule TSD for the cost-efficiency curves developed in that rulemaking.

Issue 15: DOE requests feedback on how manufacturers would incorporate the technology options listed in section II.B.2 of this document to increase energy efficiency in CPSVs beyond the baseline. This includes information on the order in which manufacturers would incorporate the different technologies to incrementally improve the efficiencies of products. DOE also requests feedback on whether the increased energy efficiency would lead to other design changes that would not occur otherwise. DOE is also interested in information regarding any potential impact of design options on a manufacturer's ability to incorporate additional functions or attributes in response to consumer demand.

Issue 16: DOE also seeks input on whether there is an increase in MPC associated with incorporating each particular design option. Specifically, DOE is interested in whether and how the costs estimated for design options in the January 2016 CPSV Final Rule have changed since the time of that analysis. DOE also requests information on the investments necessary to incorporate specific design options, including, but not limited to, costs related to new or modified tooling (if any), materials, engineering and development efforts to implement each design option, and manufacturing/production impacts.

Issue 17: DOE requests comment on whether certain design options may not be applicable to (or may be incompatible with) specific product classes.

To account for manufacturers' non-production costs and profit margin, DOE applies a non-production cost multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (“MSP”) is the price at which the manufacturer distributes a unit into commerce. For the January 2016 CPSV Final Rule, DOE used a manufacturer markup of 1.30 for all commercial prerinse spray valves as the market share weighted average value for the industry. See chapter 6 of the 2016 Final Rule TSD.

Issue 18: DOE requests feedback on whether the manufacturer markup of 1.30 is an appropriate markup to represent the market share weighted average value for the industry. DOE also seeks data on any changes to the manufacturer markup since the January 2016 CPSV Final Rule.

E. Markups Analysis

In this early assessment review RFI, DOE seeks data and information with respect to markups for commercial prerinse spray valves that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

DOE derives customer prices based on manufacturer markups, retailer markups, distributor markups, contractor markups (where appropriate), and sales taxes. In deriving these markups, DOE determines the major distribution channels for product sales, the markup associated with each party in each distribution channel, and the existence and magnitude of differences between markups for baseline products (“baseline markups”) and higher-efficiency products (“incremental markups”). The identified distribution channels (i.e., how the products are distributed from the manufacturer to the consumer), and estimated relative sales volumes through each channel are used in generating end-user price inputs for the life-cycle cost (“LCC”) analysis and national impact analysis (“NIA”). Table II.4 provides the portion of equipment passing through different distribution channels, and Table II.5 provides the associated markups used in the January 2016 CPSV Final Rule.

Issue 19: DOE requests information on the markups per distribution channel as well as the portion of equipment sold that pass through each distribution channel.

F. Energy and Water Use Analysis

In this early assessment review RFI, DOE seeks data and information with respect to energy and water use of commercial prerinse spray valves that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

As part of the rulemaking process, DOE conducts an energy and water use analysis to identify how products are used by consumers, and thereby determine the energy savings potential of energy and water efficiency improvements. DOE bases the energy and water consumption of commercial prerinse spray valves on the rated annual energy and water consumption as determined by the DOE test procedure. Along similar lines, the energy and water use analysis is meant to represent typical energy and water consumption in the field. To develop annual energy and water use estimates, DOE multiplies annual usage (in hours per year) by the flow rate (gpm). DOE characterizes representative commercial prerinse spray valves in the engineering analysis, which provide measured flow rates. In the January 2016 CPSV Final Rule, to characterize the country's average use of commercial prerinse spray valves for a typical year, DOE developed annual operating hours, using data from Commercial Building Energy Consumption Survey. Table II.6 of this early assessment review RFI lists the operating hours from the January 2016 CPSV Final Rule.

In the January 2016 CPSV Final Rule, annual water use was determined by multiplying the annual operating time by the flow rate at an operating pressure of 60 pounds per square inch (psi). Annual site energy use was calculated by multiplying the annual water use in gallons by the energy required to each gallon of water to an end-use temperature of 108 °F. 81 FR 4748, 4766.

Issue 20: DOE seeks feedback on the annual CPSV operating times as shown in Table II.6.

Issue 21: DOE seeks feedback on operating pressure of the water typically supplied to commercial prerinse spray valves and DOE's assumption of an operating pressure of 60 psi. If DOE should consider use of a different operating pressure, DOE requests data in support of the alternate value. Additionally, DOE seeks information and data on how the water operating pressure affects energy and water use of commercial prerinse spray valves.

Issue 22: DOE seeks feedback on the assumed end-use water temperature of the water leaving the commercial prerinse spray valves. If DOE should consider a different water temperature, DOE requests data in support of the alternate temperature.

G. Life Cycle Cost and Payback Period Analysis

In this early assessment review RFI, DOE seeks data and information with respect to life-cycle cost and payback periods for commercial prerinse spray valves that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

DOE conducts the LCC and the payback period (“PBP”) analysis to evaluate the economic effects of potential energy conservation standards for commercial prerinse spray valves on individual customers. For any given efficiency level, DOE measures the PBP and the change in LCC relative to an estimated baseline level. The LCC is the total customer expense over the life of the equipment, consisting of purchase, installation, and operating costs (expenses for energy and water use). Inputs to the calculation of total installed cost include the cost of the equipment (which includes MSPs, distribution channel markups, and sales taxes) and installation costs. Inputs to the calculation of operating expenses include annual energy and water consumption, energy and water prices and price projections, equipment lifetimes, discount rates, and the year that compliance with new and amended standards is required.

Based on the nature of commercial prerinse spray valves, in the January 2016 CPSV Final Rule, DOE established several assumptions specific to this equipment. First, commercial prerinse spray valves are typically replaced entirely upon failure rather than repaired. Because of this feature, there were no repair or maintenance costs included in operating costs calculations. Second, purchasing price and installed costs were estimated to be the same across all product classes and efficiency levels. With the purchasing price and the installed cost, which are the same for the baseline and efficiency levels, those costs cancel each other out in the LCC calculation. Therefore, LCC savings come entirely from the operating cost savings.

Issue 23: DOE requests feedback on whether the assumptions of zero maintenance and repair costs and fixed installed costs across all product classes are still valid.

In the January 2016 CPSV Final Rule, DOE defined equipment lifetime as the age when a commercial prerinse spray valve is retired from service. Based on data and Weibull distribution, the average lifetime was 4.9 years. In the January 2016 CPSV Final Rule, lifetime did not vary across product classes or by efficiency level. DOE assumed that around 10 percent of new food establishments fail within the first year and the commercial prerinse spray valve was no longer in use. Therefore, the lifetime distribution had a 10 percent failure rate in the first year followed by conventional Weibull distribution with average life of 5 years and maximum life of 10 years.

Issue 24: DOE requests the information on the failure rates and lifetime distribution for commercial prerinse spray valves.

Issue 25: DOE seeks feedback on whether the CPSV average operating lifetime is valid for use in the present analyses and if not, why not? If an alternate value (or values) should be used, what value (or values) should DOE use instead and why? Please provide relevant data in support of any alternative values that DOE should use.

In the January 2016 CPSV Final Rule, DOE used water prices from the American Water Works Association (“AWWA”) and energy prices from the Energy Information Administration (“EIA”) database of commercial electricity and natural gas prices.

Issue 26: DOE seeks feedback on whether alternate water and energy price datasets should be considered. DOE requests relevant data and sources in support of any alternative values or methods that are suggested.

In the January 2016 CPSV Final Rule, the installation costs consisted only of the labor costs of the individual installing the commercial prerinse spray valve and were assumed to be the same for each product class and efficiency level. To determine the labor costs associated with the installation of commercial prerinse spray valves, DOE assumed that the consumer maintenance personnel would be installing the equipment and that it would take a single employee 1 hour to completely install the equipment. Because maintenance employees for different types of businesses and buildings have different hourly wages, the installation costs varied by building type. In the January 2016 CPSV Final Rule, DOE used hourly wage data for grounds maintenance employees via the Bureau of Labor Statistics, as well as national minimum wage data, as presented in Table II.7. For restaurant and retail consumers, installation costs for all product classes and efficiency levels were the value of 1 hour of minimum wage. For healthcare, lodging, and education consumers, installation costs for all product classes and efficiency levels were the value of 1 hour of grounds maintenance employee mean wages.

See chapter 8 of the January 2016 CPSV Final Rule TSD for the installation cost estimates developed for the January 2016 CPSV Final Rule.

Issue 27: DOE seeks feedback on the costs associated with installing a commercial prerinse spray valve, specifically the number of hours (or fraction thereof) to install a commercial prerinse spray valve as well as labor rates DOE should use to analyze the costs of installation. If DOE should consider alternate assumptions, DOE requests the corresponding references and data.

H. Shipments Analysis

In this early assessment review RFI, DOE seeks data and information with respect to CPSV shipments that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

DOE develops shipments forecasts of commercial prerinse spray valves to calculate the national impacts of potential amended energy conservation standards on energy and water consumption, net present value (“NPV”), and future manufacturer cash flows. DOE shipments projections are based on available historical data broken out by product class, capacity, and efficiency. Current sales estimates allow for a more accurate model that captures recent trends in the market.

In the January 2016 CPSV Final Rule, DOE relied on historic data from the EPA's WaterSense® Field Study and an industry source to develop the projections presented in Table II.8 of this RFI. EPA's Field Study estimates 1.35 million units installed circa 2010 based on the assumption of one commercial prerinse spray valve per restaurant and restaurants representing 70 percent of the market. See Chapter 9 of the January 2016 CPSV Final Rule TSD.

Issue 28: DOE seeks shipment data on commercial prerinse spray valves shipped over the last 5-year period, separated by spray force. DOE also seeks feedback on how the projected shipments in Table II.8 compare to actual shipments of commercial prerinse spray valves in these years. If disaggregated fractions of annual sales are not available at the product type level, DOE requests more aggregated fractions of annual sales at the category level.

Issue 29: DOE seeks feedback on how common it is for food establishments (e.g., restaurants or food sales) to have more than one commercial prerinse spray valve and the factors of why of commercial prerinse spray valves are chosen for purchase (e.g., spray force, intended function such as washing glass vs. pots, etc.).

Product class switching can occur when consumers opt to choose a different product than they would normally purchase because of a perceived change. This change may be an amended standard, the costs associated with the new product, or features (e.g., need for greater flow rate or spray force for commercial prerinse spray valves). As a result of product class switching, consumers purchase more products of a different product class than originally projected.

Issue 30: DOE seeks information about whether product class switching occurred as a result of the previous amended rule, and if so to what extent. DOE also seeks information about if product class switching would be expected under possible amended standards and if so, which directions and what key metrics would induce the product class switching. DOE requests information on the evidence of such switching and the extent of it.

I. National Impact Analysis

In this early assessment review RFI, DOE seeks data and information with respect to national impacts that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

The purpose of the NIA is to estimate the aggregate economic impacts of potential efficiency standards at the national level. The NIA assesses the NES and the national NPV of total customer costs and savings that would be expected to result from new or amended standards at specific efficiency levels.

In the January 2016 CPSV Final Rule, DOE evaluated the impacts of new and amended standards for commercial prerinse spray valves by comparing no-new-standards-case projections with standards-case projections. The no-new-standards-case projections characterize energy use and customer costs for each product class in the absence of new or amended energy conservation standards. DOE compared these projections with projections characterizing the market for each product class if DOE adopted new or amended standards at specific energy efficiency levels (i.e., the trial standards levels (“TSLs”) or standards cases) for that class. In charactering the no-new-standards and standards cases, DOE considered historical shipments, the mix of efficiencies sold in the absence of amended standards, and how that mix may change over time. In the January 2016 Final Rule, DOE assumed no rebound effect for commercial prerinse spray valves.^[7] See chapter 10 of the January 2016 CPSV Final Rule TSD for additional discussion of the NIA analysis.

Issue 31: DOE seeks comment and information on whether a rebound rate of 0 percent is appropriate for commercial prerinse spray valves. If an alternate rebound rate should be used, DOE requests information and data in support of the alternate rate.

J. Manufacturer Impact Analysis

In this early assessment review RFI, DOE seeks data and information with respect to manufacturer impacts that could enable the agency to determine whether to propose a “no new standard” determination because a more stringent standard: (1) Would not result in a significant savings of energy; (2) is not technologically feasible; (3) is not economically justified; or (4) any combination of the foregoing.

The purpose of the manufacturer impact analysis (“MIA”) is to estimate the financial impact of amended energy conservation standards on manufacturers of commercial prerinse spray valves, and to evaluate the potential impact of such standards on direct employment and manufacturing capacity. The MIA includes both quantitative and qualitative aspects. The quantitative part of the MIA primarily relies on the Government Regulatory Impact Model (“GRIM”), an industry cash-flow model adapted for each product in this analysis, with the key output of industry net present value (“INPV”). The qualitative part of the MIA addresses the potential impacts of energy conservation standards on manufacturing capacity and industry competition, as well as factors such as product characteristics, impacts on particular subgroups of manufacturers, and important market and product trends.

As part of the MIA, DOE intends to analyze impacts of amended energy conservation standards on subgroups of manufacturers of covered products, including small business manufacturers. DOE uses the Small Business Administration's (“SBA”) small business size standards to determine whether manufacturers qualify as small businesses, which are listed by the applicable North American Industry Classification System (“NAICS”) code.^[8] Manufacturing of commercial prerinse spray valves is classified under NAICS 332919, “Other Metal Valve and Pipe Fitting Manufacturing,” and the SBA sets a threshold of 750 employees or less for a domestic entity to be considered as a small business. This employee threshold includes all employees in a business' parent company and any other subsidiaries.

One aspect of assessing manufacturer burden involves examining the cumulative impact of multiple DOE standards and the product-specific regulatory actions of other Federal agencies that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. In addition to energy conservation standards, other regulations can significantly affect manufacturers' financial operations. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing products. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency.

Issue 32: To the extent feasible, DOE seeks the names and contact information of any domestic or foreign-based manufacturers that distribute commercial prerinse spray valves in the United States.

Issue 33: DOE identified small businesses as a subgroup of manufacturers that could be disproportionally impacted by amended energy conservation standards. DOE requests the names and contact information of small business manufacturers, as defined by the SBA's size threshold, of commercial prerinse spray valves that manufacture products in the United States. In addition, DOE requests comment on any other manufacturer subgroups that could be disproportionally impacted by amended energy conservation standards. DOE requests feedback on any potential approaches that could be considered to address impacts on manufacturers, including small businesses.

Issue 34: DOE requests information regarding the cumulative regulatory burden impacts on manufacturers of commercial prerinse spray valves associated with (1) other DOE standards applying to different products that these manufacturers may also make and (2) product-specific regulatory actions of other Federal agencies. DOE also requests comment on its methodology for computing cumulative regulatory burden and whether there are any flexibilities it can consider that would reduce this burden while remaining consistent with the requirements of EPCA.

K. Other Energy Conservation Standards Topics

1. Market Failures

In the field of economics, a market failure is a situation in which the market outcome does not maximize societal welfare. Such an outcome would result in unrealized potential welfare. DOE welcomes comment on any aspect of market failures, especially those in the context of amended energy conservation standards for commercial prerinse spray valves.

2. Network Mode/“Smart” Technology

DOE published an RFI on the emerging smart technology appliance and equipment market. 83 FR 46886 (Sept. 17, 2018). In that RFI, DOE sought information to better understand market trends and issues in the emerging market for appliances and commercial equipment that incorporate smart technology. DOE's intent in issuing the RFI was to ensure that DOE did not inadvertently impede such innovation in fulfilling its statutory obligations in setting efficiency standards for covered products and equipment. As part of this early assessment review RFI, DOE seeks comments, data, and information on the issues presented in this document as they may be applicable to energy conservation standards for commercial prerinse spray valves.

3. Other Issues

Additionally, DOE welcomes comments on other issues relevant to the conduct of this early assessment review that may not specifically be identified in this document. In particular, DOE notes that under Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” Executive Branch agencies such as DOE are directed to manage the costs associated with the imposition of expenditures required to comply with Federal regulations. See 82 FR 9339 (Feb. 3, 2017). Consistent with that Executive Order, DOE encourages the public to provide input on measures DOE could take to lower the cost of its energy conservation standards rulemakings, recordkeeping and reporting requirements, and compliance and certification requirements applicable to commercial prerinse spray valves while remaining consistent with the requirements of EPCA.

III. Submission of Comments

DOE invites all interested parties to submit in writing by the date specified in the DATES section of this document, comments and information on matters addressed in this document and on other matters relevant to DOE's consideration of amended energy conservations standards for commercial prerinse spray valves. After the close of the comment period, DOE will review the public comments received, and may begin collecting data and conducting the analyses discussed in this document.

Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page requires you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies Office staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. If this instruction is followed, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

Do not submit to http://www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (“CBI”)). Comments submitted through http://www.regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the information submitted. For information on submitting CBI, see the CBI section.

DOE processes submissions made through http://www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that http://www.regulations.gov provides after you have successfully uploaded your comment.

Submitting comments via email, hand delivery/courier, or postal mail. Comments and documents submitted via email, hand delivery/courier, or postal mail also will be posted to http://www.regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments.

Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via postal mail or hand delivery/courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No faxes will be accepted.

Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English, and free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.

Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery/courier two well-marked copies: One copy of the document marked “confidential” including all the information believed to be confidential, and one copy of the document marked “non-confidential” with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination.

It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

DOE considers public participation to be a very important part of the process for developing energy conservation standards. DOE actively encourages the participation and interaction of the public during the comment period in this process. Interactions with and between members of the public provide a balanced discussion of the issues and assist DOE. Anyone who wishes to be added to the DOE mailing list to receive future notices and information about this process or would like to request a public meeting should contact Appliance and Equipment Standards Program staff at (202) 287-1445 or via email at ApplianceStandardsQuestions@ee.doe.gov.

Signing Authority

This document of the Department of Energy was signed on May 8, 2020, by Alexander N. Fitzsimmons, Deputy Assistant Secretary for Energy Efficiency, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register.

Footnotes