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The Energy Policy and Conservation Act, as amended (EPCA), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including consumer water heaters. EPCA also requires the U.S. Department of Energy (DOE) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In the final rule, DOE has adopted amended energy conservation standards for consumer water heaters, except for gas-fired instantaneous water heaters (GIWHs). DOE has determined that the new and amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified. DOE is still considering amended energy conservation standards for GIWHs and will continue to consider comments submitted previously to inform any decision on amended standards.

Statement of Need:

The Energy Policy and Conservation Act requires minimum energy efficiency standards for certain appliances and commercial equipment, including consumer water heaters.  (42 U.S.C. 6292(a)(4))

Summary of the Legal Basis:

Title III of the Energy Policy and Conservation Act (EPCA), Pub. L. 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for Consumer Products Other Than Automobiles.  Pursuant to EPCA, any new or amended energy conservation standard that the U.S. Department of Energy (DOE) prescribes for certain products, such as consumer water heaters, shall be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified (42 U.S.C. 6295(o)(2)(A)) and to result in a significant conservation of energy (42 U.S.C. 6295(o)(3)(B)).  EPCA provides that not later the six years after the 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 (proceeding to a final rule, as appropriate).  (42 U.S.C. 6295(m)(1))

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, DOE conducts a thorough analysis of alternative standard levels, including the existing standard, based on the criteria specified in the statute.

Anticipated Costs and Benefits:

DOE finds that the benefits to the Nation of the proposed energy conservation standards for Consumer Water Heaters (such as energy savings, consumer average life-cycle cost savings, an increase in national net present value, and emissions reductions) outweigh the burdens (such as loss of industry net present value).  For consumer water heaters, DOE estimates that energy savings (in terms of uniform energy factor (UEF)) will be 27 quads over 30 years and that the cumulative net present value (NPV) of total consumer benefits of the proposed standards for consumer water heaters will be between $56 billion at a 7-percent discount rate and $161 billion at a 3-percent discount rate.

Risks:

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