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Statement of Need: This rulemaking is required by statute. Experience has shown that the choice of residential appliances and commercial equipment being purchased by both builders and building owners is generally based on the initial cost rather than on life-cycle cost. Thus, the law requires minimum energy efficiency standards for appliances to eliminate inefficient appliances and equipment 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 DOE to conduct rulemakings to review standards and to revise standards to achieve the maximum improvement in energy efficiency 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 announced (61 FR 36974, July 15, 1996) further enhance the analysis of alternative standards. For example, DOE will ask stakeholders and private sector technical experts to review its analyses of the likely impacts, costs, and benefits of alternative standard levels. In addition, the Department will solicit and consider information on nonregulatory approaches for encouraging the purchase of energy efficient products.

Anticipated Costs and Benefits: The proposed energy efficiency standards for central air conditioners would provide significant energy savings to the Nation. Over a 25-year period more than 4 quadrillion Btu's of energy would be saved, equivalent to all the energy consumed by nearly 12 million Americans in a single year. These energy savings would also significantly reduce the emissions of air pollutants and greenhouse gases associated with electricity production by avoiding the emission of 60 million tons of carbon and 150 thousand tons of nitrogen oxide. Also, the standards would eliminate the need for the construction of at least 6 new 500-megawatt power plants.

Risks: Without appliance efficiency standards, energy use will continue to increase with resulting damage to the environment caused by atmospheric emissions. Enhancing appliance energy efficiency reduces atmospheric emissions of carbon dioxide and nitrogen oxides. 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 a loss of jobs or other adverse economic impacts.