On January 16th,the U.S. Department of Energy (DOE) announced a final rule updating and streamlining aspects of the Department's current rule making process under the Appliance Standards Program. DOE also issued a proposed rule that would clarify the procedures used to evaluate the economic justification of new or amended energy conservation standards.

"DOE heard the American people's concerns and today the Trump Administration finalized updated procedures that will make substantial improvements to DOE's internal framework for establishing energy efficiency regulations for appliances," said U.S. Energy Secretary Dan Brouillette. "Clearer energy efficiency standards will provide certainty to manufacturers, allowing them to produce products that will save consumers money on a variety of appliances. These modernized procedures will increase transparency, accountability, and regulatory certainty for the American people."

On February 13, 2019 DOE proposed to modernize the "Process Rule," which had not been updated since 1996. Today DOE is finalizing its proposal after a robust public feedback process, which included DOE-hosted public meetings and a thorough review of public comments received in response to the proposal. DOE interacts with a wide spectrum of stakeholders in the development of new energy conservation standards and test procedures. These public comments are a crucial component of the rulemaking process at the Department.

DOE values the public input that contributes to the development of its Appliance Standards. Among other updates, the final rule expands the opportunities for the public to become engaged early in the rulemaking process. Other major elements of the final rule include:

1.Establishing a threshold for "significant" energy savings at 0.3 quads of site energy over 30 years, or, if less than that amount, a 10 percent improvement over existing standards. Congress requires DOE to regulate only where doing so would save significant energy, but this term is not currently defined by Congress.

· DOE established the 0.3 quads threshold after conducting an analysis which found that over the last three decades, 60% of standards were projected to save 0.3 quads or more over 30 years, and those 60% of standards accounted for 96% of total energy savings. The other 40% of standards, projected to save less than 0.3 quads, accounted for just 4% of total energy savings.

· Establishing a threshold of significant energy savings at 0.3 quads is grounded in rigorous analysis and will allow DOE to focus on standards projected to provide by far the largest return on investment for the American people.

2.Requiring that DOE establish final test procedures 180 days before proposing a new energy conservation standard rulemaking. In public comments, stakeholders expressed concern when DOE regulates the efficiency of products before specifying how energy use will be measured via test procedure. This provision provides enhanced certainty to regulated stakeholders.

3.Clarifying that DOE will codify private sector consensus standards for test procedures, as described in the original Process Rule. When DOE-recognized, consensus-based bodies comprised of industry, advocates, and other stakeholders reach consensus on a test procedure that meets statutory requirements, the Process Rule requires DOE to adopt that consensus procedure as the DOE test procedure. This change will allow manufacturers to test their products at lower cost than when DOE creates a separate testing metric.

In addition to finalizing the updated Process Rule, DOE is also seeking public comment on a proposal to amend the so-called "walk-down" process for evaluating new or amended energy conservation standard levels. DOE is proposing to conduct a comparative analysis of the relative costs and benefits of proposed energy conservation standard levels, which would help DOE make a reliable determination that the chosen energy conservation standard level is economically justified. The Department is taking this step in response to comments on the Process Rule proposal. The "walk-down" process contained in the final Process Rule will remain as it has been while the public considers this new proposal, provides comments, and DOE determines how to proceed in response.