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Statement of Need: These standards are required by statute. Experience has shown that the choice of residential appliances purchased by both builders and homeowners is based on the initial cost rather than life cycle costs. Minimum energy efficiency standards for appliances eliminate economically inefficient products from the market and encourage industry to explore innovative ways to improve product performance.

Summary of the Legal Basis: The Energy Policy and Conservation Act (EPCA), as amended, establishes initial energy-efficiency standard levels for most types of major residential appliances and generally requires DOE to undergo two subsequent rulemakings, at specified times, to determine whether the extant standard for a covered product should be amended.

Alternatives: In conducting these reviews DOE considers a number of options, including retention of the existing standard and revised standards based on varying levels of stringency. The statute requires the Department to revise the standards to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. In making this determination a large number of complex issues must be considered. Data and information are solicited from industry and the public at large. Engineering analysis to estimate the efficiency of various combinations of design options is conducted. Estimates of energy savings resulting from more stringent standards are made using the Lawrence Berkeley Laboratory Residential Energy Model, which forecasts the appliance purchase choices that households make as well as their subsequent appliance usage behavior and energy consumption. The effect of revised standards on an industry's profitability and scale of operation is also evaluated. The output of this analysis is the development of a proposal, which is published in a notice of proposed rulemaking for public comment. ^PThe above process requires a great deal of effort and time to accomplish. The Department has been exploring methods to reduce the amount of effort and shorten the time required to accomplish the appliance standards rulemakings. In this regard, the Department recently has provided technical support and legal guidance to a group of refrigerator manufacturers, efficiency advocates, State energy offices and utilities involved in informal negotiations concerning standards for refrigerators Department has recently provided technical support and legal of the Department's proposed rule. The general acceptance of environmentalists, State energy offices, and utilities involved in informal negotiations concerning standards for refrigerators and freezers. The negotiated standards were used as the bosis of the proposed rule. The general acceptance of negotiated standard levels by the interested parties prior to the proposal can lead to a more speedy final rule. This approach can also reduce the contention and divisiveness that is sometimes present in the traditional rulemaking process.

Anticipated Costs and Benefits: These revised standards, combined with other market stimuli, are expected to yield energy savings worth about $6 billion annually by the year 2010 and reduce greenhouse gas emissions from projected 2010 levels by 12 MMT of carbon equivalent. Redesign and retooling to produce products meeting these more stringent efficiency standards for these products are expected to require an investment in excess of $800 million by the industry.

Risks: Without appliance standards, energy use will continue to increase, with resulting damage to the environment caused by atmospheric emissions. Standards that are too stringent could result in excessive increases in the cost of the product, possible reductions in product utility and possible placing of such a burden on the industry as to cause some manufacturers to withdraw from the market, resulting in a loss of competition and jobs. On the other hand, enhancing appliance energy efficiency reduces atmospheric emissions of CO2, NOx and SOx, or the costs of complying with existing emission limits.