B-318728

October 5, 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 for CertainIndustrial Equipment: Energy Conservation Standards and Test Procedures forCommercial Heating, Air-Conditioning, and Water-Heating Equipment

Pursuant to section801(a)(2)(A) of title 5, United States Code, this is our report on a major rulepromulgated by the Department of Energy (DOE), entitled "Energy ConservationProgram for Certain Industrial Equipment: Energy Conservation Standards andTest Procedures for Commercial Heating, Air-Conditioning, and Water-HeatingEquipment" (RIN: 1904-AB83). We receivedthe rule on September 21, 2009. It waspublished in the Federal Register as afinal rule on July 22, 2009. 74 Fed.Reg. 36,312.

The final rule amends energy conservation standards forcommercial packaged boilers and adopts a new energy conservation standard forwater-cooled and evaporatively-cooled commercial package air conditioners andheat pumps with a cooling capacity at or above 240,000 Btu/h and less than760,000 Btu/h. In addition, this ruleamends DOE's test procedures for commercial packaged boilers.

This final rule was published on July 22, 2009, andreceived on September 21, 2009. Thisrule has a stated effective date of September 21, 2009. However, the rule also states that thestandards for packaged boilers will apply starting on March 2, 2012, and thestandards for water-cooled and evaporatively-cooled commercial package airconditioners and heat pumps will apply starting on January 10, 2011. The Congressional Review Act requires majorrules to have a 60-day delay in their effective date following theirpublication in the Federal Registeror receipt by Congress, whichever is later.5 U.S.C. sect. 801(a)(3)(A).Therefore, to the extent that this final rule's stated effective date ofSeptember 21, 2009, applies, the rule does not have the 60-day delay ineffective date required by the Congressional Review Act.

Enclosed is our assessment of DOE's compliance with theprocedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5with respect to the rule. Our review ofthe procedural steps taken indicates that DOE complied with the applicablerequirements.

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 FOR CERTAIN
INDUSTRIAL EQUIPMENT: ENERGY CONSERVATION STANDARDS
AND TEST PROCEDURES FOR COMMERCIAL HEATING,
AIR-CONDITIONING, AND WATER-HEATING EQUIPMENT"
(RIN: 1904-AB83)

(i) Cost-benefit analysis

The Department of Energy (DOE) analyzed the costs andbenefits of this final rule. DOEcalculated the net present value for each of the ten classes of equipment atfour different efficient levels and two discount rates, 3 percent and 7percent. The net present values rangedfrom a negative $576 million for small gas-fired hot water boilers at efficientlevel 4 and a 7-percent discount rate to a positive $4.552 billion for largeoil-fired steam boilers at efficiency level 4 and a 3-percent discountrate.

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

DOE certified that this final rule will not have asignificant economic impact on a substantial number of small entities and,therefore, did not prepare an initial regulatory flexibility analysis.

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

DOE determined as part of the notice of proposedrulemaking for this rule that the rule does not contain an intergovernmentalmandate. DOE also determined that thisrule does not contain a mandate that may result in expenditures by state,local, or tribal governments of, in the aggregate, or by the private sector, of$100 million or more in any one year.

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

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

On July 16, 2008, DOE published a notice on dataavailability and request for public comment as a preliminary step to itsconsideration of amended energy conservation standards. 73 Fed. Reg. 40,770. On March 20, 2009, DOE published a notice ofproposed rulemaking. 74 Fed. Reg.12,000. On June 3, 2009, DOE published anotice of data availability and request for public comment on the environmentalassessment. 74 Fed. Reg. 26,596. DOE received three comments frommanufacturers, trade associations, and energy efficiency advocates. DOE also received a comment from the U.S.Department of Justice regarding the potential impact on competition of the finalrule. DOE responded to those comments inthe final rule. 74 Fed. Reg. 36,319351.

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

DOE determined that this final rule imposes no informationor recordkeeping requirements under the Act.

Statutory authorization for the rule

DOE stated that it promulgated this rule under theauthority of sections 62916317 of title 42, United States Code.

National Environmental Policy Act (NEPA), 42 U.S.C. sections43214370f

DOE determined that the environmental effects associatedwith this final rule are not significant, and, therefore, issued a Finding ofNo Significant Impact under NEPA and related Counsel on Environmental Qualityand DOE regulations.

Federal Energy Administration Act of 1974, 15 U.S.C.sect.788

DOE evaluated the updated standards in this final rule anddetermined that it is unable to conclude whether the standards fully complywith the requirements of section 32(b) of the Act (i.e., that they weredeveloped in a manner that fully provides for public participation, comment,and review). DOE consulted with theAttorney General and the Chairman of the Federal Trade Commission concerningthe impact of these standards and neither recommended against the incorporationof the standards.

Treasury and General Government Appropriations Act, 1999,Pub. L. No. 105-277

DOE determined that this final rule will not have animpact on the autonomy or integrity of the family as an institution.

Treasury and General Government Appropriations Act, 2001,44 U.S.C. sect.3516 note

DOE reviewed this final rule and determined that it isconsistent with the applicable policies and guidelines on disseminations ofinformation to the public.

Executive Order No. 12,866(Regulatory Planning and Review)

This rule was determinednot to be a significant rule under the Order.Accordingly, the rule was not reviewed by the Office of Management andBudget under the Order.

Executive Order No. 12,630 (Property Rights)

DOE determined that this final rule will not result in anytakings that might require compensation under the Fifth Amendment to the UnitedStates Constitution.

Executive Order No. 12,988 (Civil Justice Reform)

DOE reviewed the drafting of this final rule anddetermined that, to the extent permitted by law, the final rule meets therelevant standards of the Order.

Executive Order No. 13,132 (Federalism)

DOE determined that this final rule will not have asubstantial direct effect on the states, on the relationship between thenational government and the states, or on the distribution of power andresponsibilities among the various levels of government.

Executive Order No. 13,211 (Energy Supply)

DOE determined that this rule, as a proposed rule, willnot have a significant adverse effect on the supply, distribution, or use ofenergy, and, therefore, is not a significant energy action.

Information Quality Bulletin for Peer Review, 70 Fed. Reg.2664 (Dec. 16, 2004)

DOE stated that it conducted formal peer reviews of theenergy conservation standards development process and analyses, and thenprepared a Peer Review Report pertaining to the energy conservation standardsrulemaking analyses.