Energy Conservation Program for Consumer Products: Publication of the Petition for Waiver and Denial of the Application for Interim Waiver of LG Electronics From the Department of Energy Clothes Dryer Test Procedures

AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Notice of Petition for Waiver, Denial of Application for Interim Waiver, and request for comments.

SUMMARY:

Today's notice publishes a Petition for Waiver from LG Electronics Inc. (LG). This Petition (hereafter “LG Petition”) requests a waiver from the Department of Energy (hereafter “Department” or “DOE”) test procedures for residential clothes dryers. In addition, today's notice denies LG an Interim Waiver from the DOE test procedures applicable to residential clothes dryers. Today's notice also includes an alternate test procedure the Department may include in the Decision and Order, should the Department grant LG a waiver. The Department is soliciting comments, data, and information with respect to the LG Petition, LG's Application for Interim Waiver, and the proposed alternate test procedure.

DATES:

The Department will accept comments, data, and information regarding this Petition for Waiver until, but no later than September 22, 2006.

ADDRESSES:

Please submit comments, identified by case number CD-002, by any of the following methods:

• Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202) 586-2945. Please submit one signed original paper copy.
• Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building Technologies Program, Room 1J-018, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585.
• E-mail: Michael.raymond@ee.doe.gov. Include either the case number CD-002, and/or “LG Petition” in the subject line of the message.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

Instructions: All submissions received must include the agency name and case number for this proceeding. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid the use of special characters or any form of encryption. Wherever possible, include the electronic signature of the author. Absent an electronic signature, comments submitted electronically must be followed and authenticated by submitting the signed original paper document. The Department does not accept telefacsimiles (faxes). Any person submitting written comments must also send a copy of such comments to the petitioner. (10 CFR 430.27(b)(1)(iv)) The contact information for the petitioner of today's notice is: Mr. John I. Taylor, Vice President, Government Relations, LG Electronics USA, Inc., 1750 K St., NW., Washington, DC 20006.

According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit two copies: one copy of the document including all the information believed to be confidential, and one copy of the document with the information believed to be confidential deleted. The Department will make its own determination about the confidential status of the information and treat it according to its determination.

Docket: For access to the docket to read the background documents relevant to this matter, go to the U.S. Department of Energy, Forrestal Building, Room 1J-018 (Resource Room of the Building Technologies Program), 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Available Documents include the following items: this notice, public comments received, the LG Petition and Application for Interim Waiver, and prior Department rulemakings regarding residential clothes dryers. Please call Ms. Brenda Edwards-Jones at the above telephone number for additional information regarding visiting the Resource Room. Please note: The Department's Freedom of Information Reading Room (formerly Room 1E-190 at the Forrestal Building) is no longer housing rulemaking materials.

FOR FURTHER INFORMATION CONTACT:

Dr. Michael G. Raymond, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, Mail Stop EE-2J, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9611; e-mail: Michael.Raymond.ee.doe.gov; or Francine Pinto, Esq., U.S. Department of Energy, Office of General Counsel, Mail Stop GC-72, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9507; e-mail: Francine.Pinto@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. Background and Authority

II. Petition for Waiver

III. Application for Interim Waiver

IV. Alternate Test Procedure

V. Summary and Request for Comments

I. Background and Authority

Title III of the Energy Policy and Conservation Act (EPCA) sets forth a variety of provisions concerning energy efficiency. Part B of Title III (42 U.S.C. 6291-6309) provides for the “Energy Conservation Program for Consumer Products other than Automobiles.” Part B specifically provides for definitions, test procedures, labeling provisions, energy conservation standards, and the authority to require information and reports from manufacturers. With respect to test procedures, it generally authorizes the Secretary of Energy to prescribe test procedures that are reasonably designed to produce results which reflect energy efficiency, energy use and estimated operating costs, and that are not unduly burdensome to conduct. (42 U.S.C. 6293(b)(3)) EPCA provides that the Secretary of Energy may amend test procedures for consumer products if the Secretary determines that amended test procedures would more accurately reflect energy efficiency, energy use and estimated operating costs, and would not be unduly burdensome to conduct. (42 U.S.C. 6293(b))

Today's notice involves residential products covered under Part B. The LG Petition requests a waiver from the residential test procedures for LG's DLEC733W model of condenser clothes dryer. The test procedures for clothes dryers appear at 10 CFR Part 430, Subpart B, Appendix D.

The Department's regulations contain provisions allowing a person to seek a waiver from the test procedure requirements for covered consumer products (10 CFR 430.27). The waiver provisions allow the Assistant Secretary for Energy Efficiency and Renewable Energy (hereafter “Assistant Secretary”) to temporarily waive test procedures for a particular basic model when a petitioner shows that the basic model contains one or more design characteristics that prevent testing according to the prescribed test procedures, or when the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption as to provide materially inaccurate comparative data. (10 CFR 430.27(a)(1)) The Assistant Secretary may grant the waiver subject to conditions, including adherence to alternate test procedures. Petitioners are to include in their petition any alternate test procedures known to evaluate the basic model in a manner representative of its energy consumption. (10 CFR 430.27(b)(1)(iii)) Waivers generally remain in effect until final test procedure amendments become effective, thereby resolving the problem that is the subject of the waiver.

The waiver process also allows the Assistant Secretary to grant an Interim Waiver from test procedure requirements to manufacturers that have petitioned the Department for a waiver of such prescribed test procedures. (10 CFR 430.27(a)(2)) An Interim Waiver remains in effect for a period of 180 days or until the Department issues its determination on the Petition for Waiver, whichever is sooner, and may be extended for an additionally 180 days, if necessary. (10 CFR 430.27(h))

II. Petition for Waiver

On November 14, 2005, LG filed a Petition for Waiver and an Application for Interim Waiver from the test procedures applicable to its residential clothes dryers. LG seeks a waiver from the applicable test procedures for its DLEC733W basic product model because, LG asserts, design characteristics prevent testing according to the currently prescribed test procedures. In 1995, the Department granted Miele Appliance, Inc. (Miele), a waiver from test procedures for a different model of condenser clothes dryer. (60 FR 9330, February 17, 1995) LG claims that its condenser clothes dryers cannot be tested pursuant to the existing test procedures and requests that the same waiver granted to Miele for its T1565CA and T15701C models in 1995 be granted for LG's DLEC733W model.

In particular, LG claims that the current clothes dryer test procedures apply only to vented clothes dryers because the test procedures require the use of an exhaust restrictor to simulate the backpressure effects of a vent tube in an installed condition. LG's condenser dryers do not have exhaust vents as they do not exhaust air as conventional, vented dryers. Furthermore, LG states that DOE's test procedures for clothes dryers provide no definition or mention of condenser clothes dryers.

In addition, LG asserts that the condenser clothes dryer inherently consumes more energy to dry a load of clothes than a conventional, vented dryer. However, LG claims, condenser dryers offer additional utility to consumers over conventional dryers. LG also claims that the condensing dryer could save substantially more household energy than a conventional dryer if the effects on space heating and cooling requirements are considered.

The LG Petition requests that DOE grant a waiver from existing test procedures until DOE prescribes final test procedures and minimum energy conservation standards that are, according to LG, “appropriate to LG's condenser clothes dryers.” (LG Petition for Waiver, page 4) LG did not include an alternate test procedure in its petition, and noted that it is not aware of any alternative test procedure that could appropriately evaluate its products.

III. Application for Interim Waiver

The LG Petition also requests an Interim Waiver for immediate relief. An Interim Waiver may be granted if it is determined that the applicant will experience economic hardship if the Application for Interim Waiver is denied, if it appears likely that the Petition for Waiver will be granted, and/or the Assistant Secretary determines that it would be desirable for public policy reasons to grant immediate relief pending a determination of the Petition for Waiver. (10 CFR 430.27(g))

LG's Application for Interim Waiver does not provide sufficient information to permit DOE to evaluate the economic hardship LG claims it will experience absent a favorable determination on its Application for Interim Waiver. LG's discussion of anticipated economic hardship is entirely qualitative: “significant investment,” “significant losses in goodwill and brand acceptance.”

Furthermore, public policy would not tend to favor granting LG an Interim Waiver, pending determination of the Petition for Waiver. DOE believes that where it grants a waiver from applicable test procedures, an alternate test procedure should be in place, where possible, because testing is necessary to verify compliance with the applicable energy standards. Maintaining proper compliance ensures the public that marketed products meet published energy standards. However, in this case, it appears to DOE that industry has made no effort to develop an alternate test procedure, even though it is possible to develop one. LG did not propose an alternate test procedure in its Petition. To help provide a means to evaluate compliance of condenser dryers, DOE has developed an alternate test procedure on which it is seeking comment in this notice. However, because DOE is still seeking such comment, DOE is not yet prepared to require LG to follow this alternate test procedure and grant this interim waiver.

Furthermore, pending public comment, it is not clear to DOE what, if any, type of waiver it would grant LG in the Decision and Order. In 1995, DOE granted Miele Appliances, Inc. a waiver from test procedures because it determined that the clothes dryer test procedure was not applicable to Miele condenser clothes dryers. (60 FR 9330, February 17, 1995) In addition, DOE provided that Miele's condenser dryers would not have to meet the applicable energy efficiency standards because their added utility justified their higher energy consumption compared to traditional clothes dryers, and because the test procedures were not applicable. Though DOE determined in 1995 that Miele's condenser dryers should not be subject to the energy standards, it is not evident that the same conditions exist today to warrant a similar waiver for LG's products.

In particular, it appears that the clothes dryer market has developed since 1995 and that it may be possible to manufacture condenser clothes dryers that are as, or more, efficient than traditional vented clothes dryers. Advanced Engineering from Germany (AEG), for example, currently makes a highly efficient heat pump condenser dryer which it offers in Europe. Waiving the applicable clothes dryer energy standard for LG might permit LG to manufacture and sell clothes dryers that are less efficient than existing standards, though the technology to meet or exceed these efficiencies may be available. However, because the potential of current condenser clothes dryer technology is not fully known and it is not clear whether condenser clothes dryers may meet current minimum energy standards, more information is needed to assess what, if any, sort of waiver is appropriate. Furthermore, more information about the LG condensing dryer is needed for DOE to assess the impact of the alternate test procedure that is proposed and published in this notice.

In sum, because: (a) It is not clear that DOE would ultimately exempt LG's products from the applicable energy standards as it did in the case of Miele; (b) it is desirable for public policy reasons to develop an alternate test procedure, where possible, when energy standards are in effect; and (c) the proposed alternate test procedure is still undergoing evaluation, DOE is denying LG's Application for an Interim Waiver. This denial of Interim Waiver is based upon the presumed validity of statements submitted by stakeholders. This denial of Interim Waiver may be modified at any time upon a determination that the factual basis underlying the application is incorrect.

IV. Alternate Test Procedure

The Department will make a judgment on the LG Petition after the period for public comment. However, should DOE grant LG a waiver for its DLEC733W condenser clothes dryer model, DOE would likely prescribe an alternate test procedure. Manufacturers face restrictions with respect to making representations about the energy consumption and energy consumption costs of products covered by EPCA. (42 U.S.C. 6293(c)) Consistent representations are important for manufacturers who make claims about the energy efficiency of their products. For example, they are necessary to determine compliance with Federal, state or local energy codes and regulatory requirements, and can provide valuable consumer purchasing information.

Therefore, DOE is considering issuing an alternate test procedure for LG in the upcoming Decision and Order. The Department is publishing the proposed alternate test procedure in this notice, though it has not yet made a determination on the petition, to account for the potential need for an alternate test procedure and to allow the public to comment on a proposed alternate test procedure. LG did not include an alternate test procedure in its petition. However, LG noted that it knows of no other test procedure that would rate its condenser dryer products. DOE is considering including in the Decision and Order an alternate test procedure that is based on existing test procedures for clothes dryers, but removes the requirement to use an exhaust restrictor.

The Department proposes the following language: 10 CFR Parts 430 Subpart B, Appendix D—“Uniform Test Method for Measuring the Energy Consumption of Clothes Dryers,” as amended:

(A) Section 1 is amended by adding the two following definitions at the end of the section:

1.14  “Conventional clothes dryer” means a clothes dryer that exhausts the evaporated moisture from the cabinet.

1.15 “Condensing clothes dryer” means a clothes dryer that uses a closed loop system with an internal condenser to remove the evaporated moisture from the heated air. The moist air is not discharged from the cabinet.

(B) Section 2.1 is amended by striking the second and third sentences, “The dryer exhaust shall be restricted by adding the AHAM exhaust simulator described in 3.3.5 of HLD-1” and “All external joints should be taped to avoid air leakage,” and by adding the following sentences at the end of the paragraph: “For conventional clothes dryers, the dryer exhaust shall be restricted by adding the AHAM exhaust simulator described in 3.3.5 of HLD-1. All external joints should be taped to avoid air leakage.”

V. Summary and Request for Comments

Today's notice announces LG's Petition for Waiver and denies LG an Interim Waiver from the test procedures applicable to LG's DLEC733W model condensing clothes dryers. The Department is publishing the LG Petition for Waiver in its entirety. The Petition contains no confidential information. Furthermore, today's notice includes an alternate test procedure that the Department is considering for testing of condensing clothes dryers. In this alternate test procedure, the Department proposes eliminating the requirement to use an exhaust restrictor for condenser clothes dryers.

The Department is interested in receiving comments on all aspects of this notice. The Department is particularly interested in receiving comments and views of interested parties concerning whether to grant the LG Petition and regarding the proposed alternate test procedure. Specifically, the Department would like to receive comment on the following questions:

• The LG Petition states that the condensing clothes dryer inherently uses more energy to dry a load of clothes than a conventional dryer. However, it appears that full-size condenser dryers may be able to meet existing minimum energy standards. The Department is interested in comment on what, if any, technologies could allow condenser clothes dryers to meet existing minimum energy standards. Furthermore, the Department is interested in comments on whether any condenser clothes dryers available in the U.S. or other consumer markets currently meet the U.S. minimum energy standard.
• If other condenser clothes dryers are able to meet the existing minimum energy standards, is it appropriate for DOE to require LG to meet existing energy standards despite their potential added utility? What is appropriate for DOE to require of LG should no other condenser dryers meet current energy standards?
• Is it appropriate for LG to use the proposed alternate test procedure for ratings, representations and compliance with energy codes and regulatory requirements?
• Are the alternate test procedure's additional definitions for conventional and condenser clothes dryers robust, and do they fully apply to LG's condensing clothes dryers?
• Current test procedures for clothes dryers require that the ambient temperature for testing conditions be maintained within a range of 3F, and that the humidity be maintained within a range of 10 percent relative humidity. Is it reasonable to require similar ranges for the testing of condensing clothes dryers?

In addition, the Department is interested in receiving general comments on possible modifications to any test procedures or alternative rating methods which the Department could use to fairly represent the energy efficiency LG's condensing clothes dryer products.

Any person submitting written comments must also send a copy of such comments to the petitioner, whose contact information is cited above. (10 CFR 430.27(b)(1)(iv))

Assistant Secretary for Conservation and Renewable Energy,

United States Department of Energy,

Forrestal Building,

1000 Independence Avenue, SW.,

Washington, DC 20585.

Re: Petition for Waiver and Application for Interim Waiver, LG Electronics Condensing Clothes Dryers

Dear Assistant Secretary:

LG Electronics, Inc (LG) hereby submits this Petition for Waiver and Application for Interim Waiver, pursuant to 10 CFR 430.27, for its condenser clothes dryers. A waiver was granted to Miele Appliance, Inc for the same type of product. 60 FR 9330 (Feb. 17, 1995).

LG is a manufacturer of digital appliances, as well as mobile communications, digital displays, and digital media products. Its appliances include washing machines, clothes dryers, refrigerator-freezers, air-conditioners, air cleaners, ovens, microwave ovens, dishwashers, and vacuum cleaners and are sold worldwide, including in the United States. LG's U.S. operations are LG Electronics USA, Inc, with headquarters at 1000 Sylvan Avenue, Englewood Cliffs, NJ 07632 (tel. 202-816-2000). Its worldwide headquarters are located at LG Twin Towers 20, Yoido-dong, Youngdungpo-gu Seoul, Korea 150-721 (tel. 011-82-2-3777-1114) URL: http.www.LGE.com. LG's principal brands include LG®, and OEM brands including GE® and Kenmore®. LG's appliances are produced in Korea and Mexico.

LG plans to market highly efficient, advanced-design condenser (non-vented) clothes dryers. (The current LG model number of these products is DLEC733W.) This product does not vent exhaust air to the outside as a conventional dryer does, but rather uses ambient air to cool the hot, humid inside the appliance thereby condensing out the moisture. Thus, there is no exhaust air, only a wastewater stream that can be drained into a water container. This type of product is suited for installation conditions where exhaust venting is not practical or is cost prohibitive. It thus benefits those dwellers of high-rise apartments and others who in many cases have no way to vent to the outside or at least not without considerable remodeling/construction expense. The advantageous no-exhaust design characteristic produces a more complex drying process than the regular vented dryer.

Condenser clothes dryers offer additional utility to the consumer that affects energy consumption, and the characteristics of the product are not reflected by the test procedure. The condenser clothes dryer does not have an outside vent exhaust, and extracting the moisture from the warm moist air in the drum requires more energy to dry clothes than simply exhausting the warm moist air to the outdoors.

DOE's existing test procedure for clothes dryers requires the use of an exhaust restrictor to simulate the backpressure effects of a vent tube in an installed condition. And the test procedure does not provide any definition or mention of condenser clothes dryers. Since LG's condenser clothes dryers do not have an exhaust vent and the DOE test procedure does not provide any definition or mention of condenser clothes dryers, the products cannot be tested in accordance with the test procedure. Thus, the test procedure does not apply to them. Consequently, the DOE energy conservation standard for clothes dryers does not apply to LG condenser dryers since the DOE standard must be “determined in accordance with test procedures prescribed under section 6293 of this title.” 42 U.S.C. 6291(6).

These circumstances clearly warrant a waiver. 10 CFR 430.27 provides for waiver of DOE test procedures on the grounds that a basic model contains design characteristics that either prevent testing according to the prescribed test procedure or produce data so unrepresentative of a covered product's true energy consumption characteristics as to provide materially inaccurate comparative data. As discussed above, the LG condenser clothes dryer contains a design characteristic—lack of an exhaust—that prevents testing according to the DOE test procedure. Further, the test procedure does not provide any definition or mention of condenser clothes dryers. A waiver should therefore be granted that provides that LG is not required to test its condenser clothes dryers. The existing minimum energy conservation standard for clothes dryers also should not apply to these LG condenser clothes dryers. The waiver should remain in effect until DOE prescribes final test procedures and minimum energy conservation standards appropriate to LG's condenser clothes dryers.

That a waiver is warranted is borne out by the fact that DOE has granted a waiver to Miele for the same type of product. 60 FR 9330 (Feb. 17, 1995). DOE stated:

“The Department agrees with Miele and AHAM that the condenser clothes dryer offers the consumer additional utility, and is justified to consum[e] more energy (lower energy factor) versus non-condenser clothes dryers. Furthermore, the Department believes that the existing clothes dryer test procedure is not applicable to the Miele condenser clothes dryers. This assertion is based on the fact that the existing test procedure requires the use of an exhaust restrictor and does not provide any definition or mention of condenser clothes dryers. The Department agrees with Miele that the current clothes dryer minimum energy conservation standard does not apply to Miele's condenser clothes dryers. Today's Decision and Order exempts Miele from testing its condenser clothes dryer and determining an Energy Factor.

The Department is not publishing an amended test procedure for Miele at this time because there is not any reason to. The existing minimum energy conservation standard for clothes dryers is not applicable to the Miele condenser clothes dryer. Furthermore, the FTC does not have a labeling program for clothes dryers, therefore, Miele is not required to test its condenser clothes dryers.”

LG urges that the same waiver be granted to LG as was granted to Miele for its comparable product.

Manufacturers of all other basic models marketed in the United States and known to LG to incorporate similar design characteristics as the LG condenser clothes dryer include Miele and Bosch (model number WTL5410).

LG is not aware of any alternative test procedure to evaluate in a manner representative of the energy consumption characteristics of the LG condenser clothes dryers. LG notes that DOE's February 17, 1995 decision on Miele's application indicated that Miele proposed that DOE consider adding a class for condenser clothes dryers in the then current clothes dryer rulemaking for minimum efficiency standards, along with an appropriate test procedure. DOE's decision indicated that DOE would consider adding a new product class for condenser clothes dryers in that rulemaking and would initiate a clothes dryers test procedure rulemaking to add the capability of testing condenser clothes dryers to the existing test procedure for any potential future use. To the best of LG's knowledge, DOE has not done so.

LG also requests immediate relief by grant of an interim waiver. Grant of an interim waiver is fully justified:

The petition for waiver is likely to be granted, as evidenced not only by its merits but also because DOE has already granted a similar waiver to Miele.

Lack of relief will impose economic hardship on LG. LG would be placed in an untenable situation: The product would be subject to a set of regulations that DOE already acknowledges is not applicable to such a product and cannot be complied with, while at the same time another manufacturer is allowed to operate under a waiver from such regulations.

Significant investment has already been made in LG condensing clothes dryers. Lack of relief would not allow LG to recoup this investment and would deny LG anticipated sales revenue. This does not take into account significant losses in goodwill and brand acceptance.

Beyond that, since the LG condensing clothes dryer is intended to be sold as a pair with LG washing machines an inability to sell the clothes dryer will harm sales of the washing machine as well.

The basic purpose of the Energy Policy and Conservation Act, as amended by the National Appliance Energy Conservation Act, is to foster purchase of energy-efficient appliances, not hinder such purchases. The LG condenser clothes dryer makes a dryer available to households where for physical, structural reasons a vented dryer could otherwise not be installed. LG condenser clothes dryers thus offer benefits in the public interest. To encourage and foster the availability of these products is in the public interest. Standards programs should not be used as a means to block innovative, improved designs. DOE's rules thus should accommodate and encourage—not act to block—such a product.

Granting the interim waiver and waiver would also eliminate a non-tariff trade barrier.

In addition, grant of relief would help enhance economic development and employment, including not only LG Electronics USA's operations in New Jersey, Illinois and Alabama, but also at major national retailers and regional dealers that carry LG products. Furthermore, continued employment creation and ongoing investments in its marketing, sales and servicing activities will be fostered by approval of the interim waiver. Conversely, denial of the requested relief would harm the company and would be anticompetitive.

We would be pleased to discuss this request with DOE and provide further information as needed.

We hereby certify that all clothes dryer manufacturers of domestically marketed units known to LG have been notified by letter of this petition and application, copies of which letters are attached.

  Sincerely,

Richard Donner, Product Planning Manager, North America Product Planning Group, LG Electronics USA, Inc, 2000 Millbrook Drive, Lincolnshire, IL 60069, Phone: 201-906-9878, Fax: 847-941-8340, E-mail: rdonner@lge.com.

John I. Taylor, Vice President, Government Relations, LG Electronics USA, Inc, 1750 K Street, NW., Washington, DC 20006, Phone: 202-719-3490, Fax: 847-941-8177, E-mail: jtaylor@lge.com.

Of counsel:

John A. Hodges, James T. Bruce, Wiley Rein & Fielding LLP, Washington, DC 20006, Phone: 202-719-7000, Fax: 202-719-7049, E-mail: jhodges@wrf.com, jbruce@wrf.com.