B-318665

September 16, 2009

The Honorable JeffBingaman
Chairman
The Honorable Lisa Murkowski
Ranking Minority Member
Committee on Energy and Natural Resources
United States Senate

The Honorable Henry A.Waxman
Chairman
The Honorable Joe L. Barton
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

Subject: Department of Energy: Energy Conservation Program: Energy ConservationStandards for Refrigerated Bottled or Canned Beverage Vending Machines

Pursuant to section 801(a)(2)(A)of title 5, United States Code, this is our report on a major rule promulgatedby the Department of Energy (DOE), entitled "Energy Conservation Program:Energy Conservation Standards for Refrigerated Bottled or Canned BeverageVending Machines" (RIN: 1904-AB58). Wereceived the rule on September 3, 2009.It was published in the FederalRegister as a final rule on August31, 2009. 74 Fed. Reg. 44,914.

The final rule adopts new energy conservation standardsfor refrigerated bottled or canned beverage vending machines.

Thefinal rule has an announced effective date of October 30, 2009. The Congressional Review Act requires majorrules to have a 60-day delay in their effective date following theirpublication in the Federal Register or receipt by Congress, whichever islater. 5 U.S.C. sect. 801(a)(3)(A). The rule was published in the Federal Register on August 31, 2009, butnot received by our office until September3, 2009. Therefore, the final rule does not have therequired 60-day delay in effective date.

Enclosed is our assessment of the DOE's compliance withthe procedural steps required by section 801(a)(1)(B)(i) through (iv) of title5 with respect to the rule. Our reviewof the procedural steps taken indicates that, with the exception of the delayin the rule's effective date, DOE complied with the applicable requirements.

If you have any questions about this report or wish tocontact GAO officials responsible for the evaluation work relating to thesubject matter of the rule, please contact Shirley A. Jones, Assistant GeneralCounsel, at (202) 512-8156.

signed

Robert J. Cramer
Managing Associate General Counsel

Enclosure

cc: DanielCohen
Assistant General Counsel for
Legislation and Regulatory Law
Department of Energy

ENCLOSURE

REPORT UNDER 5 U.S.C. sect.801(a)(2)(A) ON A MAJORRULE
ISSUED BY THE
DEPARTMENT OF ENERGY
ENTITLED
"ENERGY CONSERVATION PROGRAM:
ENERGY CONSERVATION STANDARDS FOR REFRIGERATED
BOTTLED OR CANNED BEVERAGE VENDING MACHINES"
(RIN: 1904-AB58)

(i) Cost-benefit analysis

DOEperformed a cost-benefit analysis in conjunction with the final rule. DOE determined, using a 7-percent discountrate for the annualized cost analysis, that the cost of the standardsestablished in the final rule for Class A and Class B vending machines is $24.0million per year in increased equipment and installation costs, while theestimated annualized benefits are $41.8 million per year in reduced equipmentoperating costs and $9.0 million in CO₂ reductions, for a netbenefit of $26.8 million per year. Usinga 3-percent discount rate, the cost of the standards is $23.1 million per yearin increased equipment and installation costs, while the benefits are $49.1million per year in reduced equipment operating costs and $10.3 million in CO₂reductions, for a net benefit of $36.3 million per year.

(ii) Agency actions relevant to the RegulatoryFlexibility Act, 5 U.S.C. sections603-605, 607, and 609

DOEbelieves that the final rule will have a significant economic impact on asubstantial number of small entities, and therefore prepared a final regulatoryflexibility analysis. DOE determinedthat one of the three major companies that supply roughly 90 percent of allequipment sold is a small business, and that the five manufacturers that supplythe remaining 10 percent of industry shipments are all considered smallbusinesses. DOE determined that theimpacts of the final rule for the small business manufacturer with a largemarket share would not be significantly different than the impacts for largebusiness manufacturers. For smallbusiness manufacturers with small market shares, DOE estimates that the costsof certification will be significantly lower than the costs of a majormanufacturer. DOE analyzed lower TrialStandard Levels (TSL) that might lessen the impacts on small entities; however,the Energy Policy and Conservation Act (EPCA) requires DOE to adopt the maximumlevel that is technologically feasible and economically justified. 42 U.S.C. sect. 6295(o)(2)(A) and 42 U.S.C. sect. 6316(e)(1).

(iii) Agency actionsrelevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2U.S.C. sections1532-1535

DOE concluded that thefinal rule would not contain an intergovernmental mandate, nor result in theexpenditures of $100 million or more in one year by the private sector.

(iv) Other relevant information or requirements underacts and executive orders

Administrative Procedure Act, 5 U.S.C. sections551 etseq.

OnJune 28, 2006, DOE commenced the rulemaking by publishing a framework documentfor the rulemaking and by giving notice of a public meeting and of theavailability of the document for review and public comment. 71 Fed. Reg. 36,715. DOE held a public meeting in Washington,D.C., on July 11, 2006. DOE issued anadvanced notice of proposed rulemaking (ANOPR), which was published in the FederalRegister on June 16, 2008. 73 Fed.Reg. 34,094. DOE held a public meetingin Washington, D.C., on June 26, 2008, to present the methodology and resultsof the ANOPR analyses and to receive oral comments from those who attended. DOE issued a notice of proposed rulemaking,published in the Federal Register on May 29, 2009. 74 Fed. Reg. 26,022. DOE held a public meeting on June 17, 2009,in Washington, D.C., to receive oral comments on and solicit informationrelevant to the proposed rule. DOEresponded to the comments on the proposed rule in this final rule. 74 Fed. Reg. 44,914.

Paperwork Reduction Act, 44 U.S.C. sections3501-3520

Thisfinal rule imposes no new information and recordkeeping requirements;therefore, the Office of Management and Budget (OMB) clearance under thePaperwork Reduction Act is not required.

Statutory authorization for the rule

The final rule is authorized byPart A of Title III of the Energy Policy and Conservation Act (EPCA), asamended, 42 U.S.C. sect. 6291 et. seq.

Executive Order No. 12,866 (Regulatory Planning andReview)

Thefinal rule was determined to be economically significant under the ExecutiveOrder. In accordance with the ExecutiveOrder, DOE prepared and submitted to OMB an economic analysis outlining thecosts and benefits of the final rule.

Executive Order No. 13,132 (Federalism)

DOE determined that the final rule would not have a substantialdirect effect on the states, on the relationship between the national governmentand the states, or on the distribution of power and responsibilities among thevarious levels of government.