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EPCA, as amended by EISA 2007, requires the Secretary to determine whether updating the statutory energy conservation standards for residential conventional cooking products would yield a significant savings in energy use and is technically feasible and economically justified. DOE is reviewing to make such determination.

Statement of Need:

The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including residential conventional cooking products. EPCA also requires the U.S. Department of Energy (DOE) to determine whether more-stringent, amended standards would be technologically feasible and economically justified, and would save a significant amount of energy. DOE is proposing new and amended energy conservation standards for residential conventional cooking products, specifically conventional cooking tops and conventional ovens.

Summary of the Legal Basis:

EPCA provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards (42 U.S.C. 6295(m)(1)).

Alternatives:

Additional compliance flexibilities may be available through other means. EPCA provides that a manufacturer whose annual gross revenue from all of its operations does not exceed $8 million may apply for an exemption from all or part of an energy conservation standard for a period not longer than 24 months after the effective date of a final rule establishing the standard (42 U.S.C. 6295(t)).  Additionally, section 504 of the Department of Energy Organization Act, 42 U.S.C. 7194, provides authority for the Secretary to adjust a rule issued under EPCA in order to prevent special hardship, inequity, or unfair distribution of burdens that may be imposed on that manufacturer.

Anticipated Costs and Benefits:

Using a 7-percent discount rate for benefits and costs, the estimated cost of the proposed standards for consumer conventional cooking products is $42.6 million per year in increased equipment costs, while the estimated annual benefits are $120.3 million in reduced equipment operating costs.

Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards for consumer conventional cooking products is $42.3 million per year in increased equipment costs, while the estimated annual benefits are $163.3 million in reduced operating costs.

In determining whether a standard is economically justified, DOE must consider whether the benefits of the standard exceed the burdens by, to the greatest extent practicable, considering 7 enumerated factors, including the economic impact of the standard on manufacturers.  DOE uses industry net present value (INPV) is the sum of the discounted cash flows to the industry from the reference year through the end of the analysis period (2017 to 2049), to determine manufacturer impact. Using a real discount rate of 9.1 percent, DOE estimates that the INPV for manufacturers of consumer conventional cooking products is $1,241.6 million in 2016 dollars. Under the proposed standards, DOE expects that manufacturers may experience a reduction of up to 4.7 percent of their INPV, which is approximately $58.4 million in 2016.

The cumulative net present value (NPV) of total consumer benefits of the standards for consumer conventional cooking products ranges from $1.08 billion (at a 7-percent discount rate) to $2.63 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for consumer conventional cooking products purchased in 2020-2049.

Risks: