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Statement of Need: These rulemakings are required by statute. Experience has shown that the choice of residential appliances and commercial equipment being purchased by both builders and building owners is based on the initial cost rather than on life-cycle costs. Thus, the law requires minimum efficiency standards for appliances and equipment to eliminate inefficient products from the market.

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 certain types of commercial equipment and generally requires DOE to undergo rulemakings, at specified times, to determine whether the standard for a covered product should be made more stringent.

Alternatives: The statute requires the Department to conduct rulemakings to review standards and to revise standards to achieve the maximum improvement in energy efficient that the Secretary determines is technologically feasible and economically justified. In making this determination, the Department conducts a thorough analysis of alternative standard levels, including the existing standard, based on criteria specified by statute. The process improvements that were recently announced (61 FR 36974, July 15, 1996) will further enhance the appliance standards development process. For instance, under this process, the Department will use stakeholders and private sector technical experts to review its analyses of the likely impacts, costs and benefits of alternative standard levels. ^PBefore implementing efficiency standards, the Department will solicit and consider information on non-regulatory approaches for encouraging the purchase of energy efficient products. For example, the Department is now considering possible non-regulatory approaches to more stringent energy efficiency standards for fluorescent lamp ballasts. The Department also plans to consider the effectiveness of efforts to promote high-efficiency furnaces and boilers for regional and new construction applications prior to updating standards for these products. In addition, the Department will be working actively with stakeholders to determine whether standards are warranted for distribution transformers.

Anticipated Costs and Benefits: The specific costs and benefits for these rulemakings have not been established because the final standard levels have not been determined. Nevertheless, existing appliance standards are projected to save 23 quadrillion Btu's from 1993 to 2015, resulting in estimated consumer savings of $1.7 billion per year in 2000 and estimated annual emissions reductions of 107 million tons of carbon dioxide and 280 thousand tons of nitrogen oxides that year. Under the existing standards, the discounted energy savings for consumers are 2.5 times greater than the up front price premium paid for the appliance.

Risks: Without appliance standards, energy use will continue to increase, with resulting damage to the environment caused by atmospheric emissions. Enhancing appliance energy efficiency reduces atmospheric emissions such as CO2 and NOx. Establishing standards that are too stringent could result in excessive increases in the cost of the product, possible reductions in product utility and may place an undue burden on manufacturers that could result in loss of jobs or other economic impacts.