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					            APPENDIX
			Documentation of Costs for Residential Wood Heaters NSPS Proposal

	This appendix of the RIA documents the estimated nationwide cost impacts on manufacturers of emission reduction options being considered for residential wood heaters as part of the New Source Performance Standards (NSPS) review of residential wood heaters. The underlying cost assumptions for two options are summarized herein   -  the proposed NSPS ("Proposal") and an alternative approach ("Alternative") which differ in the number of stepped emission limits and in the phased-in compliance dates.

   I. Estimated Research and Development (R&D) Costs
         A. Residential Wood Heaters  -  Room Heaters & Central Heaters
	We have heard various estimates of the costs to bring a wood heater from conception to completion, from $300,000 for a single model to $1,360,000 for a 4-firebox model line.  A recent Hearth and Home article estimated the total cost to bring a model from conception to market as $645,000 to $750,000 for steel stoves and over $1 million for cast-iron, enameled wood stoves.  The authors indicated that costs would decrease for separate models in the same line by up to 25%.  Based on this information, we estimate that a 4-model steel line would cost up to $328,125 per model to develop.  These costs include marketing, design, developing first generation, second generation and prototype units; NSPS and safety testing, equipment tooling, etc.  The manufacturer supplying these figures for the article estimated that the NSPS and safety testing component of these costs would constitute $40,000 per model.  This manufacturer said that development time is 12 to 14 months for non-catalytic heaters and 10 to 12 months for catalytic heaters.
	Another manufacturer estimated costs of new product development, including design, prototype development, testing, tooling equipment and other manufacturing changes, marketing support, materials, training, and education to be in excess of $300,000 over an 8- to 12-month schedule for a relatively uncomplicated product.  Costs will increase for products that have more sophisticated controls.   One other manufacturer estimated that their typical model development costs are around $200,000/model.
	Two manufacturers suggested a 14- to 18-month timeframe is required to develop a new firebox, but added that it will take from 5 to 6 years of intensive engineering and R&D efforts to have a model line consisting of 4 boxes ready-for-manufacture.  They agreed that knowledge of the process obtained during each firebox development will shorten (somewhat) the time necessary, but not enough to consider within a guiding framework.  These manufacturers also provided estimated development costs for a 4-box model line, presented in Table A-1.

Table A-1.  Example of Manufacturers' Estimates of Costs to Develop Model Line (4 Fireboxes)

                                Cost Component
                                Estimated Costs
                                     Notes
Salaries
$850,000
Using 2-full time experienced employees to bring the products to market, salaries and benefits are estimated at $160,000 per year for at least 5.3 years. Tasks include design, prototyping, testing, production-line integration, and marketing.
Laboratory Equipment
$50,000
In order to accelerate R&D and avoid validating each result with independent testing labs (too costly for most manufacturers), new testing equipment will need to be purchased in order to sample flue gases, measure test load weight loss, record data automatically, and analyze flue gas composition.
Prototypes
$25,000
Numerous prototypes will be needed until the final product can be approved. For each firebox, an estimated 8 prototypes will be needed, at a cost of $700 each. Numerous samples of various components will also have to be purchased from vendors.
Test Fuel*
$45,000*
Each test costs at least $50 in fuel (assuming cribs are used), including waste.  And estimated 150 tests will have to be conducted for each firebox for a total of $7,500, or $30,000 for a 4-firebox model line based on crib testing.*
Testing Services*
$150,000*
Testing services for emissions, efficiency, and safety are estimated to last approximately 3 weeks for each firebox. At an average of $1,500 per day plus travel expenses, this amounts to approximately $25,000 for each firebox, or $100,000 for a 4-firebox model line based on crib testing.*
Outside Consultants
$160,000
The average manufacturer will need outside help for design and testing. Testing equipment, knowledge of the test standard, and general guidance is normally offered by outside consultants (not necessarily certified EPA test labs). The average manufacturer will need approximately 300 hours of consulting services per year ($40,000) for 4 years.
Re-tooling
$120,000
For each firebox, new molds and jigs will need to be purchased or produced. Re-tooling charges will reach an estimated $30,000 per firebox, or $120,000 for a 4-firebox model line.
Marketing
$25,000
New pictures will need to be taken and all the current marketing material, including web sites and owner's manuals, will have to be updated.
Total
$1,425,000
Equal to $356,250/model
*Note: The costs originally provided by industry for this table were presumed to be based on crib wood testing, not both crib wood and cord wood testing. Therefore we increased the industry-based "Test Fuel" cost by 50% (to the $45,000 shown above) as well as the industry-based "Testing Services" cost by 50% (to the $150,000 shown above) in order to estimate the additional cost to test with both crib wood and cord wood.
	For this analysis, we used the costs provided in the Table A-1 example, scaled to a single model and spread over a 6-year model development timeframe.  We prepared an annualized R&D cost estimate by separating cost elements into direct annual costs (salaries) vs. indirect annual costs (laboratory equipment, retooling and other capital costs).  We estimated annual capital costs during the amortized R&D cost period as the fraction that the indirect costs (IAC) are of the Total Annual Cost, approximately 34% annually.  Ongoing costs such as taxes, overhead, and other routine expenses would be incurred regardless of the NSPS standard, and are not included in this analysis.  Table A-2 shows the estimated annualized cost of $63,850 per model, assuming an amortization period of 6 years and an interest rate of 7%.

Table A-2.  Annual Cost Summary: Development of 4 Model Fireboxes[1,2]
Direct Annual Costs (DAC)
     Operator labor
                                                                       $141,667
Annual salary cost from Table 1, spread over 6 years.
     Outside Consultants
                                                                        $26,667
Annual outside consultant cost from Table 1, spread over 6 years.
Total Direct Costs (DC)
                                                                       $168,333

Indirect Annual Costs (IAC)
     Laboratory Equipment[1]
                                                                        $10,490
The laboratory equipment cost of $50,000 was amortized over 6 years at an interest rate of 7%.
     Re-tooling[1]
                                                                        $25,175
The re-tooling cost of $120,000 was amortized over 6 years at an interest rate of 7%.
     Other Capital Costs[1,2]
                                                                        $51,400
Other capital costs include costs for prototypes ($25,000), test fuel ($30,000+$15,000), testing services ($100,000+$50,000), and marketing ($25,000) and were amortized over 6 years at an interest rate of 7%.
Total Indirect Costs (IAC)
                                                                        $87,065

Total Annual Cost
                                                                       $255,399
Annual cost for development of 4 model fireboxes.
Total Annual Cost
                                                                        $63,850
Average annual cost per firebox model.
[1] An amortization period of 6 years for laboratory equipment, retooling and other capital costs was chosen based on industry's estimate that approximately 5 to 6 years of R&D are required to bring a product to market.
2 To estimate the additional cost to test with both cord wood and crib wood, the test fuel industry estimate of $30,000 based on crib only was increased by $15,000 and the testing services industry estimate of $100,000 based on crib only (which covered not only emissions testing but also efficiency and safety testing) was increased by $50,000.

         B. Masonry Heaters
            Masonry heaters manufacturing cost impacts vary by the type of producer and the type of certification method.  According to one manufacturer, the masonry heater industry in the U.S. is dominated by the Finnish firm Tulikivi, which manufactures and imports about half of the U.S. masonry heater units installed yearly through its network of installing distributors.  The same manufacturer said that the second largest producer is a Canadian firm, Temp-Cast.  The remainder of the industry is "dozens" of small producers, with probably fewer than 100 (or at least fewer than 200) generating any masonry revenue at all.  Some commercial operations sell core units and/or design kits based on their own design, and other sell units they license from other U.S. or foreign companies.  Finally, some units are custom built.  Based on this information, we assumed that 50 percent of masonry heaters sold per year in the U.S. are Tulikivi models and 35 percent are sold by other large manufacturers.  The remaining 15 percent of units are sold by independent small volume contractors.
            There are three major cost components to consider in evaluating the potential cost impacts of the proposed NSPS:  research and development (R&D), certification testing, and licensing fees for use of a computer software package approved for use in certifying a model design.  According to information provided by one manufacturer, R&D costs for a masonry heater may be estimated at $250,000 (compared to the $340,000 for other wood heater appliance models noted in Table A-1). We assumed R&D costs were the same as for other wood heater appliances  -  that is, $63,850 annually for a 6-year R&D amortization period.  For facilities conducting R&D, these costs include the costs for certification testing.  We estimate that the cost of testing a heater design in an EPA accredited lab to be approximately $10,000.
            This cost analysis also makes use of a unique software package based on a European masonry heater design standard.  This standard has been verified in the laboratory and under field conditions to produce masonry heaters that would meet the proposed NSPS emission limits.  The software produces for printout a certification for a given design application and the design definition documents as well as operating instructions customized to the given design, so that the software verification and certification record is created for and attached to the design.  The resulting documents can be submitted as part of the certification application.  The cost of this software to the user is approximately 1,000 Euros (approximately $1,500) for the package with a 300 Euro (approximately $450) annual fee that commences in the second year following purchase.

   II. Estimated Manufacturer Cost Impacts

      A. NSPS Options
            We developed two primary options to evaluate the cost impacts of implementing new or revised NSPS standards for the residential wood heating appliance industry  -  namely, the proposed approach ("Proposal") and an alternative approach ("Alternative").  As described in the unit cost memorandum, the cost analyses assume specified phase-in schedules which vary between the Proposal and Alternative.
            The Proposal represents a scenario where all types of appliances (except masonry heaters) would be required to meet a specified Step 1 emission limit upon promulgation in 2014 and then a stricter Step 2 emission limit five years later in 2019. Under this Proposal, large manufacturers of masonry heaters would also be required to meet a specified Step 1 emission limit upon promulgation in 2014, while small custom manufacturers would not be required to meet this Step 1 emission limit until 2019. There is no Step 2 emission limit for masonry heaters being proposed.  The Alternative approach represents a scenario where all types of appliances (except masonry heaters) would be required to meet a specified Step 1 emission limit upon promulgation in 2014 and then an interim Alternative Step 2 emission limit three years after promulgation in 2017, followed by a stricter Alternative Step 3 emission limit eight years after promulgation in 2022. Masonry heaters would be regulated the same way under this Alternative approach as under the Proposal, as explained above.  Note that the Proposal Step 2 emission limit is the same as the Alternative Step 3 emission limit, but the compliance dates differ for this stricter limit (i.e., 2019 versus 2022).  These implementation periods represent a tentative schedule and are subject to change.
            Following is a summary of the NSPS implementation assumptions for each appliance type, grouped according to NSPS Subparts.  This summary describes the specific emission limits under the Proposal and the Alternative approach.
      Subpart AAA ("room heaters"):
      1. Adjustable burn rate, single burn rate, and pellet stoves:  Proposal: Step 1 limit of 4.5 g/hr upon promulgation in 2014; and Step 2 limit of 1.3 g/hr five years after promulgation in 2019. Alternative: Step 1 limit of 4.5 g/hr upon promulgation in 2014; Step 2 limit of 2.5 g/hr three years after promulgation in 2017; and Step 3 limit of 1.3 g/hr eight years after promulgation in 2022.
         Notes on appliances already meeting these limits: The Step 1 limit is the 1995 Washington State standard for non-catalytic stoves; the Alternative Step 2 limit is the 1995 Washington State standard for catalytic stoves; and the proposed Step 2 (Alternative Step 3) limit is already met by the top performing catalytic, non-catalytic and pellet stove models, according to industry data. Although previously unregulated and a less developed technology than adjustable burn rate stoves, single burn rate stove designs have been undergoing R&D in anticipation of the proposed NSPS and cleaner designs are nearly market-ready.
         Under both the Proposal and the Alternative, adjustable burn rate wood stoves (both catalytic and non-catalytic), pellet stoves, and single burn rate stoves would face a Step 1 standard that is based on the current Washington state standards of 4.5 g/hr emissions for non-catalytic stoves.  Industry data[10] from 2010 indicate that 90% (130 out of 145 catalytic, non-catalytic and pellet stoves combined) already meet this limit, as shown in Table A-1 of Attachment A to the manufacturer's cost memo.  The tables in that attachment show the emissions performance of wood stoves that are currently certified for which we have reproducible emissions data.  This list was initially prepared by the Hearth, Patio and Barbecue Association (HPBA), and includes the results of an effort to delete models that are no longer manufactured and remove duplicate certifications.[10] Communication from HPBA confirmed that there were 110 non-catalytic wood stoves and 15 catalytic wood stoves being manufactured in 2010 by 34 manufacturers or importers of EPA certified wood heaters.  We believe that manufacturers will focus on existing models that meet the Washington State limits in order to comply with the Step 1 standard.
         Furthermore, the HPBA data[10] indicates that 35% (52 out of 145 catalytic, non-catalytic and pellet stoves combined) already meet the interim Alternative Step 2 limit of 2.5 g/hr. Finally, this same dataset indicates that 10% (14 out of 145 catalytic, non-catalytic and pellet stoves combined) already meet the strictest proposed Step 2 standard (which is also the Alternative Step 3 standard).  Stoves meeting these limits are shown in Table A-1 of Attachment A, in which green rows indicate compliance with proposed Step 2/Alternative Step 3, green and blue rows indicate compliance with interim Alternative Step 2, and green, blue, and orange rows indicate compliance with Step 1. Attachment A also includes tables showing this same color-coded compliance for the individual catalytic (Table A-2) and pellet stove (Table A-3) datasets.
         Based on this emission data for adjustable burn rate and pellet stoves, for our cost analysis we assumed that while major R&D efforts are not needed to meet Step 1, R&D efforts would be required to meet the strictest standard.
         Single burn rate stoves would also be subject to these stepped standards under Subpart AAA.  Given the relative lack of previous regulation of these appliance types in the United States, we believe that manufacturers will have to redesign all such models to meet the proposed emission limits, and reflected that major re-design effort in our cost estimates.
         Our specific cost and implementation assumptions under both the Proposal and Alternative scenarios are noted below in Sections B & D.
      Subpart QQQQ ("central heaters"):
      2. Hydronic heaters (both outdoor and indoor):  Proposal: Step 1 limit of 0.32 lb/mm BTU heat output upon promulgation in 2014; and Step 2 limit of 0.06 lb/mm BTU heat output five years after promulgation in 2019. Alternative: Step 1 limit of 0.32 lb/mm BTU heat output upon promulgation in 2014; Step 2 limit of 0.15 lb/mm BTU heat output three years after promulgation in 2017; and Step 3 limit of 0.06 lb/mm BTU heat output eight years after promulgation in 2022.
         Notes on appliances already meeting these limits: The Step 1 limit is the EPA "Phase 2 " voluntary program limit already met by 36 hydronic heater models (27 cord wood and 9 pellet models) built by 17 U.S. manufacturers; the Alternative Step 2 limit is already met by 11 hydronic heater models (6 cord wood and 5 pellet models) built by 6 U.S. manufacturers; and the proposed Step 2 (Alternative Step 3) limit is already met by 4 hydronic heater models (2 cord wood and 2 pellet models) built by 2 U.S. manufacturers, as well as over 100 European manufacturers per test method EN 303-05.
         Based on the EPA's experience with the hydronic heater market through the voluntary program, we understand that it is dominated by a few manufacturers in terms of the bulk of sales, and these manufacturers have qualifying units at some or all of the stepped emission limits, as noted above.  Therefore, on a sales-weighted basis, only a percentage of the hydronic heater models currently sold would be required to undertake R&D to meet Step 1, with higher percentages needing R&D to meet the interim Alternative Step 2 and the proposed Step 2/Alternative Step 3 limits.  However, we assumed that all hydronic heater models would begin R&D in 2013 to meet the stricter phased-in standards.  Our specific cost and implementation assumptions under both the Proposal and Alternative scenarios are noted below in Sections B & D.
      3. Forced Air Furnaces:  Proposal: Step 1 limit of 0.93 lb/mm BTU heat output upon promulgation in 2014; and Step 2 limit of 0.06 lb/mm BTU heat output five years after promulgation in 2019. Alternative: Step 1 limit of 0.93 lb/mm BTU heat output upon promulgation in 2014; Step 2 limit of 0.15 lb/mm BTU heat output three years after promulgation in 2017; and Step 3 limit of 0.06 lb/mm BTU heat output eight years after promulgation in 2022.
      4. Notes on appliances already meeting these limits: The Step 1 limit is based on test data from development of Canadian standard B415.1-10 and conversation with industry regarding cleaner forced air furnace models currently being tested in R&D. Forced air furnace designs able to meet the Alternative Step 2 and proposed Step 2 (Alternative Step 3) limits may be based on technology transferred from hydronic heater designs.  Given the relative lack of previous regulation of these appliance types in the United States, we assume in our cost analysis that manufacturers will have to redesign all such models to meet the proposed emission limits, and reflect that major re-design effort in our cost estimates.  Our specific cost and implementation assumptions under both the Proposal and Alternative scenarios are noted below in Sections B & D.
      Subpart RRRR (masonry heaters):
      5. Masonry Heaters:  Proposal / Alternative (same): Step 1 limit of 0.32 lb/mm BTU heat output upon promulgation in 2014 for large manufacturers (defined as manufacturers constructing >= 15 masonry heaters per year), with a 5-year (2019) small volume manufacturer compliance extension (for companies constructing < 15 units/year). No other phased-in limits are being proposed.

         Notes on appliances already meeting these limits:  Based on data submitted by the Masonry Heater Association, over 10 models already meet this limit. The masonry heater market is dominated by a few large manufacturers and many small custom manufacturers, and these segments of the market will take different approaches to come into compliance based on their models (i.e., a couple models will undergo R&D, while others who already meet the standards will certify through a conventional test or through a software product).  Our cost analysis segmented the market accordingly and based our cost estimates on specific assumptions relevant to each segment of the market. These specific cost and implementation assumptions (which do not differ for the Proposal and Alternative) are explained below in Sections C & D.

      A. 	Estimated Manufacturer Costs  -  General Approach
	Manufacturers have told us that is takes several years to develop new models.  We have spread the annualized R&D costs (shown in Table A-2) over 6 years to represent the time and funds needed to develop the complying models.  For the purposes of our cost estimate, we have assumed that when the NSPS revisions are proposed, all manufacturers will begin serious efforts to develop complying models, although for many manufacturers we also know that they have been involved in intensive R&D efforts in anticipation of the proposed rule.
	We estimated both the average annual cost to manufacturers of each appliance type and then extended those costs to nationwide total annual costs. The basic components to each manufacturer's estimated annual cost are:
      1. Annualized R&D cost;
      2. Ongoing annual Certification cost; and
      3. Ongoing annual Reporting and Record Keeping cost.
	The Annualized R&D costs (shown in Table A-2, and based on the Table A-1 costs) are by far the largest cost component and we have applied these costs to most models in our cost analysis  -  especially to models in previously unregulated appliance categories  -  in order to present a reasonable estimate of the costs.  For example, as noted above, instead of estimating the number of hydronic heater models that already meet a specific limit and will therefore merely need to certify their emissions rather than undergo R&D, we instead assumed that 100% of hydronic heater models will undergo R&D beginning in 2013. We made similar assumptions for single burn rate stoves and forced air furnaces.
	Under the Proposal scenario, one round of R&D is assumed  -  beginning in 2013 and ending in 2018  -  in order to meet the proposed Step 2 limit.  Under the Alternative scenario, two rounds of R&D are assumed for all appliances except masonry heaters (for which there is only one standard with no additional phased-in standards to meet).  Under the Alternative scenario, the first R&D round begins in 2013 and the second round begins in 2017 (which causes overlapping R&D costs in years 2017 and 2018 in this analysis)  -  in order to meet the interim Alternative Step 2 limit in 2017 and the Alternative Step 3 limit in 2022. We also assumed that of the models undergoing the first round of R&D costs, 80% of these models undergo the second round of R&D costs in the Alternative scenario (i.e., we assumed that only 20% of models achieve the strictest limit in the first round of R&D).
	Furthermore, for appliances like single burn rate stoves and forced air furnaces, which were previously unregulated (and also were not pushed technologically by a voluntary program, as hydronic heaters were), we have conservatively doubled R&D costs during years 2013 and 2014. This doubling of R&D cost estimates is to represent an intensification of the R&D efforts to meet the Step 1 limit and begin development of models to meet the stricter stepped limits  -  R&D efforts which industry has indicated are already ongoing.
            Note that all manufacturers, except for wood stoves that are subject to the current 1988 NSPS, will face ongoing certification costs above baseline conditions.  However, in the 2013 to 2018 timeframe under the Proposal scenario and in the 2013 to 2022 timeframe under the Alternative scenario, we have incorporated these costs as part of the overall R&D expenditures.  After 2018 under the Proposal scenario and after 2022 under the Alternative scenario, the ongoing certification costs will be the only NSPS related costs faced by manufacturers besides ongoing reporting and recordkeeping costs.
            Regarding certification costs, we have assumed a cost of $10,000 per model for pellet stoves, single burn rate stoves and masonry heaters; and we have assumed a cost of $20,000 per model for hydronic heaters and forced air furnaces.  We have spread these costs out over the 5 year certification life, assuming annual certification costs for one-fifth of the models.
            For example, pellet stoves will incur certification costs in advance of complying with more stringent limits.  As explained in Section A and shown in Table A-3 of Attachment A of the manufacturer's cost memo, approximately 30 percent of existing pellet stove models are expected to comply with the proposed Step 2 and Alternative Step 3 standard.  However, in order to be sold, these stove models would now be required to demonstrate compliance with an emissions limit, incurring an upfront cost of $10,000 per model to become certified.  We have assumed that one fifth of the pellet stove models will certify in any given year.
	We based reporting and recordkeeping (R&R) costs on the annual average costs derived from development of the Information Collection Request (ICR) supporting statements.  These are annual estimates of the ongoing R&R burden to manufacturers associated with the Proposal and Alternative scenarios.  (We do not expect the R&R burden to differ substantially between the two scenarios.)
	The certification and reporting and recordkeeping costs were estimated to be incurred by manufacturers for the full 20-year model design lifespan. Under the Proposal, we estimated costs from 2013 through 2038  -  that is, 20 years after the 2019 compliance year marking the beginning of the model lifespan designed to meet the Proposal Step 2 limit.  Under the Alternative, we estimated costs from 2013 through 2041  -  that is, 20 years after the 2022 compliance year marking the beginning of the model lifespan designed to meet the Alternative Step 3 limit.

      A. 	Estimated Manufacturer Costs  -  Masonry Heaters
            As noted above, we addressed masonry heaters in a way which segmented the costs in keeping with the masonry heater market.  There are three scenarios for potential cost impacts for large masonry heater manufacturers.  In the case of Tulikivi and some U.S. firms, e.g., Timely Construction, these companies have already invested in R&D in order to gain access to U.S. markets which restrict sales (e.g., Colorado) of uncertified units.  These companies will face testing costs only, with an assumed total of nine tests conducted prior to the proposed compliance date (i.e., to certify a total of nine model lines).  For purposes of our cost analysis, we assumed that two additional companies will conduct R&D to develop two new models each to meet the proposed NSPS.  Finally, we have been told that Tulikivi will use the software certification approach to certify up to eight additional models.  We also project that the remaining 15 percent of custom built units will use the software certification approach to certify compliance with the proposed NSPS starting in 2013 (estimated date of the proposed standards) and that they will continue to renew their license in the following years.
            As explained in the unit cost memo[21], we used data in the Frost & Sullivan Market (F&S) report on 2008 masonry heater shipments by product category and F&S revenue forecasts which incorporated the weak economy in years 2009 and 2010, to calculate the reduced number of shipments in years 2009 and 2010. For years 2011 through 2038 (for the Proposal) and 2011 through 2041 (for the Alternative) estimated shipments are based on a forecasted revenue growth rate of 2.0%, in keeping with the average annual growth in real GDP predicted by the US Bureau of Economic Analysis.   For masonry heaters, our estimate of the number of custom built models is based on the average number of models sold per year in the 15 percent model category (i.e., 85 per year).  We assumed each custom manufacturer would sell 2 models per year, for a total of 42 manufacturers participating in the software certification option.
            Under both the Proposal and Alternative scenarios, most sales-weighted masonry heater units face a 2014 Step 1 compliance date with no other phased-in limits.  However, under both the Proposal and Alternative scenarios, companies that sell fewer than 15 units per year have until 2019 to come into compliance.  We have assumed that the large manufacturers will comply by 2014 for the units that only require testing and/or software certification, with those expenditures incurred annually starting in 2013.  We also assumed that the 15 percent of custom built units will comply by 2019, but will begin certifying their units using the software certification approach as early as 2013, as noted above, as a selling point for their services.  For those companies that start R&D when the NSPS is proposed in 2013, we have assumed that they will spread these costs over the 6-year period from 2013 through 2018 for the four models affected, under both the Proposal and Alternative scenarios.
      B. 	Estimated Manufacturer Costs  -  Specific Assumptions & Resulting Costs
	Table A-3a shows the estimated annual cost per manufacturer under the Proposal for all appliances. Table A-3b shows the nationwide annual costs under the Proposal.  The footnotes associated with the tables (not included in the tables shown on the following pages) help better explain the details we assumed for the cost analysis and are listed below.  For the Proposal, the footnoted assumptions underlying Tables A-3a and A-3b are:
      1. Nationwide Annual Cost assumes R&D investment is amortized over 6 years (2013 through 2018). Ongoing certification costs are incurred through 2038 (based on a model brought to market in 2019 with a lifespan of 20 years), except for woodstoves which already incur certification costs under the existing NSPS.
      2. Since certification is required every 5 years (except for the software certification option for masonry heaters), it is assumed that certification costs will be spread out so that 1/5 of the models certify each year.
      3. This analysis considers additional costs resulting from the proposed NSPS. For wood stoves, the analysis assumes that 5% meet Step 2 already so that 95% of the models will undergo re-design to meet the Step 2 level. The costs modeled for years 2020 through 2038 exclude the ongoing certification costs and ongoing reporting and recordkeeping costs incurred by wood stove manufacturers who already had to certify and report under the existing NSPS.
      4. For pellet stoves, the analysis assumes that 30% meet Step 2 already so that 70% of models undergo R&D re-design to meet Step 2. The R&D budget includes certification costs. The analysis also assumes that the 30% of the pellet stove models which already meet Step 2 will certify in an ongoing basis starting in 2013.  The analysis reflects the certification costs beginning in 2013 for the 30% of models meeting Step 2, and beginning in 2019 for the remaining 70% of models which underwent R&D re-design.
      5. Based on conversations with industry (2/2013), single burn rate stoves and forced air furnaces have been undergoing R&D prior to 2013 to develop cleaner models. Because these devices were previously unregulated and may need to transfer technology from adjustable burn rate stoves and hydronic heaters respectively, this analysis assumes that these efforts will intensify in 2013 and 2014. Therefore estimated R&D costs are doubled in 2013 and 2014 in order to meet the 2014 Step 1 standard while also beginning R&D to develop models to meet the more stringent 2019 Step 2 standard.
      6. For single burn rate stoves, forced air furnaces, and hydronic heating systems, the analysis assumes that only a small percentage meet Step 2 so that approximately 100% of the models undergo R&D re-design to meet Step 2. The R&D budget includes certification costs. Ongoing certification costs for the re-designed models are reflected in this analysis beginning in 2019.
      7. For masonry heaters, the cost analysis assumes one round of R&D to meet 0.32 lb/mmBTU standard (no additional stepped standards, although large manufacturers will be required to meet the limit in 2014, while small volume manufacturers will be given a 5 year extension until 2019 to meet the limit). For masonry heater manufacturers using software certification, the analysis assumes the purchased software will be used for certifying all models developed by that manufacturer.
      8. Reporting and recordkeeping costs (R&R) [for all appliances but masonry heaters] are based on the annual average costs derived from the ICR and are estimates of the ongoing R&R burden to manufacturers associated with the proposed NSPS. The annual average nationwide R&R burden estimated to manufacturers for Subpart AAA is $440,443, and for Subpart QQQQ is $119,249. These R&R costs do not include the R&R burden to laboratories; the annual average nationwide R&R burden incurred by laboratories subject to requirements under Subpart AAA is estimated to be $75,745, and incurred by laboratories subject to requirements under Subpart QQQQ is estimated to be $50,496.
      9. [Masonry Heater] Reporting and recordkeeping costs (R&R) are based on the annual average costs derived from the ICR and are estimates of the ongoing R&R burden to manufacturers associated with the proposed NSPS. The annual average nationwide R&R burden estimated to manufacturers for Subpart RRRR is $98,788 for small/custom masonry heater manufacturers and $25,929 for large masonry heater manufacturers. These R&R costs do not include the R&R burden to laboratories; the annual average nationwide R&R burden incurred by laboratories subject to requirements under Subpart RRRR is estimated to be $37,872.
            Table A-4a shows the estimated annual cost per manufacturer under the Alternative approach for all appliances. Table A-4b shows the nationwide annual costs under the Alternative.  For the Alternative approach, the footnoted assumptions underlying Tables 4a and 4b (where different from the footnotes listed above) are:

      1. Nationwide Annual Cost assumes R&D investment is amortized over 6 years (round one from 2013 through 2018 and round two from 2017 through 2022). Ongoing certification costs are incurred through 2041 (based on a model brought to market in 2022 with a lifespan of 20 years), except for woodstoves which already incur certification costs under the existing NSPS.
      2. (Same as above)
      3. This analysis considers additional costs resulting from the proposed NSPS. For wood stoves, the analysis  assumes that 5% meet Step 3 already so that 95% of the models will undergo re-design in round one, and 80% of those 95% will require another round of R&D to meet the Step 3 level. The costs exclude the ongoing certification costs and ongoing reporting and recordkeeping costs incurred by wood stove manufacturers who already had to certify and report under the existing NSPS.
      4. For pellet stoves, the analysis assumes that 30% meet Step 3 already so that 70% of models undergo re-design in round one, and 80% of those 70% require another round of R&D to meet Step 3. The R&D budget includes certification costs. The analysis also assumes that the 30% of the pellet stove models which already meet Step 3 will certify in an ongoing basis starting in 2013.
      5. Based on conversations with industry (2/2013), single burn rate stoves and forced air furnaces have been undergoing R&D prior to 2013 to develop cleaner models. Because these devices were previously unregulated and may need to transfer technology from adjustable burn rate stoves and hydronic heaters respectively, this analysis assumes that these efforts will intensify in 2013 and 2014. Therefore estimated R&D costs are doubled in 2013 and 2014 in order to meet the 2014 Step 1 standard while also beginning R&D to develop models to meet the more stringent 2017 Step 2 and 2022 Step 3 standards.
      6. For single burn rate stoves, forced air furnaces, and hydronic heating systems, the analysis assumes that only a small percentage meet Step 3 so that approximately 100% of the models undergo re-design in round one, and 80% require another round of R&D to meet Step 3. The R&D budget includes certification costs.
      7. (Same as above)
      8. (Same as above)
      9. (Same as above)

         Table A-3a. Average Annual Cost per Manufacturer under the Proposal

            Table A-3b.  Nationwide Annual Costs under the Proposal

      Table A-4a. Average Annual Cost per Manufacturer under the Alternative Approach

         Table A-4b.  Nationwide Annual Costs under the Alternative Approach

            It should be noted that Tables A-3a, A-3b, A-4a, and A-4b are based on a 7% interest rate and are in 2010 dollars($).  We also prepared these cost estimates based on a 3% interest rate.  Note also that costs vary by appliance type based on the average number of models per manufacturer.  The estimate of the number of model types are described in the unit cost memo.  For numbers of manufacturers, we started with HPBA data, modified based on internet searches of manufacturers of the major appliance types.
            The total nationwide cost of the rule from years 2014 through 2022 for the Proposal and the Alternative differ based on the underlying cost and implementation assumptions described in this memo, and are summarized below in Table A-5.

      Table A-5.  Nationwide Annual Cost of the Rule under the Proposal and Alternative Approach
                                     Year
                       Cost under Proposal       (2010$)
                    Cost under Alternative Approach (2010$)
                                     2014
                                  30,618,147
                                  30,618,147
                                     2015
                                  26,148,672
                                  26,148,672
                                     2016
                                  26,148,672
                                  26,148,672
                                     2017
                                  26,148,672
                                  45,557,694
                                     2018
                                  26,148,672
                                  45,557,694
                                     2019
                                   1,495,850
                                  20,188,873
                                     2020
                                   1,495,850
                                  20,188,873
                                     2021
                                   1,495,850
                                  20,188,873
                                     2022
                                   1,495,850
                                  20,188,873

	Finally, Tables A-6 and A-7 provide annual costs and emissions, and emission reductions associated with the Proposal and Alternative options, respectively, for each year included in the analyses, including impacts of the rule beyond 2022, and cumulative impacts for each option.

Table A-6.  Cost Effectiveness (CE) based on annual and cumulative PM2.5 emissions from Central Heaters (Forced Air Furnaces and Hydronic Heating Systems) and Room Heaters (Wood Stoves, Pellet Stoves, and Single Burn Rate Stoves) for the Proposal Option

                                     Year
                             Annual Capital Costs
                           Nationwide Annual Cost1
                        Nationwide Average Annual Cost
                               Annual Snapshots
                    Emission Reduction, cumulative per year
CE based on total cost & cumulative emission reduction over 20-year stove lifespan (per ton)

                       Baseline PM2.5 Emissions2 (tons)
                         NSPS PM2.5 Emissions2 (tons)
                           Emission Reduction (tons)
             CE based on nationwide average annual cost (per ton)
                        Baseline PM2.5 Emissions (tons)
                          NSPS PM2.5 Emissions (tons)
                           Emission Reduction (tons)

                                    2013 3
                                  $4,754,295
                                  $10,883,300
                                  $3,289,936

                                    2014 4
                                  $4,754,295
                                  $10,883,300
                                  $3,289,936
                                     5,587
                                     1,760
                                     3,827
                                     $860
                                     5,587
                                     1,760
                                     3,827

                                     2015
                                  $4,068,766
                                  $9,314,021
                                  $3,289,936
                                     5,699
                                     1,795
                                     3,903
                                     $843
                                    11,285
                                     3,556
                                     7,730

                                     2016
                                  $4,068,766
                                  $9,314,021
                                  $3,289,936
                                     5,812
                                     1,831
                                     3,981
                                     $826
                                    17,098
                                     5,387
                                    11,711

                                     2017
                                  $4,068,766
                                  $9,314,021
                                  $3,289,936
                                     5,929
                                     1,868
                                     4,061
                                     $810
                                    23,026
                                     7,255
                                    15,771

                                     2018
                                  $4,068,766
                                  $9,314,021
                                  $3,289,936
                                     6,047
                                     1,905
                                     4,142
                                     $794
                                    29,074
                                     9,161
                                    19,913

                                    2019 4
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,168
                                      464
                                     5,705
                                     $577
                                    35,242
                                     9,624
                                    25,618

                                     2020
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,292
                                      473
                                     5,819
                                     $565
                                    41,534
                                    10,097
                                    31,437

                                     2021
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,417
                                      482
                                     5,935
                                     $554
                                    47,951
                                    10,579
                                    37,372

                                     2022
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,546
                                      492
                                     6,054
                                     $543
                                    54,497
                                    11,071
                                    43,425

                                     2023
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,677
                                      502
                                     6,175
                                     $533
                                    61,174
                                    11,573
                                    49,600

                                     2024
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,810
                                      512
                                     6,298
                                     $522
                                    67,984
                                    12,085
                                    55,899

                                     2025
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     6,946
                                      522
                                     6,424
                                     $512
                                    74,930
                                    12,607
                                    62,323

                                     2026
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,085
                                      533
                                     6,553
                                     $502
                                    82,016
                                    13,140
                                    68,876

                                     2027
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,227
                                      543
                                     6,684
                                     $492
                                    89,243
                                    13,683
                                    75,560

                                     2028
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,372
                                      554
                                     6,818
                                     $483
                                    96,614
                                    14,237
                                    82,377

                                     2029
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,519
                                      565
                                     6,954
                                     $473
                                    104,133
                                    14,802
                                    89,331

                                     2030
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,669
                                      576
                                     7,093
                                     $464
                                    111,803
                                    15,379
                                    96,424

                                     2031
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,823
                                      588
                                     7,235
                                     $455
                                    119,626
                                    15,967
                                    103,659

                                     2032
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     7,979
                                      600
                                     7,380
                                     $446
                                    127,605
                                    16,566
                                    111,039

                                     2033
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,139
                                      612
                                     7,527
                                     $437
                                    135,744
                                    17,178
                                    118,566

                                     2034
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,302
                                      624
                                     7,678
                                     $429
                                    138,459
                                    16,042
                                    122,417

                                     2035
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,468
                                      636
                                     7,831
                                     $420
                                    141,228
                                    14,883
                                    126,345

                                     2036
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,637
                                      649
                                     7,988
                                     $412
                                    144,052
                                    13,701
                                    130,352

                                     2037
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,810
                                      662
                                     8,148
                                     $404
                                    146,933
                                    12,495
                                    134,439

                                     2038
                                      $0
                                  $1,325,783
                                  $3,289,936
                                     8,986
                                      675
                                     8,311
                                     $396
                                    149,872
                                    11,265
                                    138,607

                                     2039

                                    143,704
                                    10,801
                                    132,903

                                     2040

                                    137,412
                                    10,328
                                    127,084

                                     2041

                                    130,995
                                     9,846
                                    121,149

                                     2042

                                    124,449
                                     9,354
                                    115,095

                                     2043

                                    117,772
                                     8,852
                                    108,920

                                     2044

                                    110,962
                                     8,340
                                    102,622

                                     2045

                                    104,016
                                     7,818
                                    96,198

                                     2046

                                    96,930
                                     7,286
                                    89,645

                                     2047

                                    89,703
                                     6,742
                                    82,961

                                     2048

                                    82,332
                                     6,188
                                    76,143

                                     2049

                                    74,812
                                     5,623
                                    69,189

                                     2050

                                    67,143
                                     5,047
                                    62,096

                                     2051

                                    59,320
                                     4,459
                                    54,862

                                     2052

                                    51,341
                                     3,859
                                    47,482

                                     2053

                                    43,202
                                     3,247
                                    39,955

                                     2054

                                    34,900
                                     2,623
                                    32,277

                                              2055

                                    26,433
                                     1,987
                                    24,446

                                     2056

                                    17,796
                                     1,338
                                    16,458

                                     2057

                                     8,986
                                      675
                                     8,311

                         Nationwide cumulative cost5
                                                                    $85,538,348

          Cumulative Emission Reduction over 20-year stove lifespan
                                   1,546,402
                                      $55
1 Estimated nationwide annual costs are in 2010 $ and are based on a 6-year amortization period of R&D costs at a 7% interest rate (during 2013-2018), plus annual certification and reporting & recordkeeping costs (ongoing through 2038).  Years 2039 through 2057 are past the 20-year model design lifespan used in this analysis.
2 Estimated annual emissions are based on a forecasted revenue growth rate (as a surrogate for shipments) of 2.0 % from 2011 through 2038, in keeping with the average annual growth in real GDP predicted by the US Bureau of Economic Analysis (2013 Global Outlook projections prepared by the Conference Board in November 2012; see http://www.conference-board.org/data/globaloutlook.cfm ).
3 2013 costs assume manufacturers will begin R&D phase and begin certifying models in anticipation of the 2014 rule compliance date. Emissions in 2013, however, are not included in this analysis because it is prior to the rule compliance date.
4 Estimated emissions assume Step 1 standard becomes applicable in 2014 and Step 2 standard in 2019. No emission reductions are estimated to result from woodstoves and pellet stoves until 2019, although emission reductions are estimated for all other devices starting in 2014 .
5 The nationwide cumulative cost represents the cost to manufacturers resulting from the R&D re-design to meet the proposed NSPS and the NSPS-caused certification and reporting & recordkeeping costs to bring these stoves to market from 2013 through 2038. These stoves have lifespans of 20 years or more; thus stoves shipped in 2038 will be emitting through 2057.

Table A-7.  Cost Effectiveness (CE) based on annual and cumulative PM2.5 emissions from Central Heaters (Forced Air Furnaces and Hydronic Heating Systems) and Room Heaters (Wood Stoves, Pellet Stoves, and Single Burn Rate Stoves) for the Alternative Option
                                     Year
                             Annual Capital Costs
                           Nationwide Annual Cost1
                        Nationwide Average Annual Cost
                               Annual Snapshots
                    Emission Reduction, cumulative per year
CE based on total cost & cumulative emission reduction over 20-year stove lifespan (per ton)

                       Baseline PM2.5 Emissions2 (tons)
                         NSPS PM2.5 Emissions2 (tons)
                           Emission Reduction (tons)
             CE based on nationwide average annual cost (per ton)
                        Baseline PM2.5 Emissions (tons)
                          NSPS PM2.5 Emissions (tons)
                           Emission Reduction (tons)

                                    2013 3
                                  $10,295,398
                                  $30,200,681
                                  $10,600,322

                                    2014 4
                                  $10,295,398
                                  $30,200,681
                                  $10,600,322
                                     5,587
                                     1,760
                                     3,827
                                    $2,770
                                     5,587
                                     1,760
                                     3,827

                                     2015
                                  $8,771,756
                                  $25,731,206
                                  $10,600,322
                                     5,699
                                     1,795
                                     3,903
                                    $2,716
                                    11,285
                                     3,556
                                     7,730

                                     2016
                                  $8,771,756
                                  $25,731,206
                                  $10,600,322
                                     5,812
                                     1,831
                                     3,981
                                    $2,663
                                    17,098
                                     5,387
                                    11,711

                                    2017 4
                                  $15,388,282
                                  $45,140,228
                                  $10,600,322
                                     5,929
                                      906
                                     5,022
                                    $2,111
                                    23,026
                                     6,294
                                    16,733

                                     2018
                                  $15,388,282
                                  $45,140,228
                                  $10,600,322
                                     6,047
                                      925
                                     5,123
                                    $2,069
                                    29,074
                                     7,218
                                    21,856

                                     2019
                                  $6,824,401
                                  $20,018,806
                                  $10,600,322
                                     6,168
                                      943
                                     5,225
                                    $2,029
                                    35,242
                                     8,161
                                    27,081

                                     2020
                                  $6,824,401
                                  $20,018,806
                                  $10,600,322
                                     6,292
                                      962
                                     5,330
                                    $1,989
                                    41,534
                                     9,123
                                    32,411

                                     2021
                                  $6,824,401
                                  $20,018,806
                                  $10,600,322
                                              6,417
                                               981
                                              5,436
                                             $1,950
                                             47,951
                                             10,104
                                             37,847

                                    2022 4
                                  $6,824,401
                                  $20,018,806
                                  $10,600,322
                                     6,546
                                      492
                                     6,054
                                    $1,751
                                    54,497
                                    10,596
                                    43,901

                                     2023
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     6,677
                                      502
                                     6,175
                                    $1,717
                                    61,174
                                    11,098
                                    50,076

                                     2024
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     6,810
                                      512
                                     6,298
                                    $1,683
                                    67,984
                                    11,610
                                    56,374

                                     2025
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     6,946
                                      522
                                     6,424
                                    $1,650
                                    74,930
                                    12,132
                                    62,798

                                     2026
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,085
                                      533
                                     6,553
                                    $1,618
                                    82,016
                                    12,664
                                    69,351

                                     2027
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,227
                                      543
                                     6,684
                                    $1,586
                                    89,243
                                    13,208
                                    76,035

                                     2028
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,372
                                      554
                                     6,818
                                    $1,555
                                    96,614
                                    13,762
                                    82,853

                                     2029
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,519
                                      565
                                     6,954
                                    $1,524
                                    104,133
                                    14,327
                                    89,806

                                     2030
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,669
                                      576
                                     7,093
                                    $1,494
                                    111,803
                                    14,903
                                    96,899

                                     2031
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,823
                                      588
                                     7,235
                                    $1,465
                                    119,626
                                    15,491
                                    104,134

                                     2032
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     7,979
                                      600
                                     7,380
                                    $1,436
                                    127,605
                                    16,091
                                    111,514

                                     2033
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,139
                                      612
                                     7,527
                                    $1,408
                                    135,744
                                    16,703
                                    119,041

                                     2034
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,302
                                      624
                                     7,678
                                    $1,381
                                    138,459
                                    15,567
                                    122,892

                                     2035
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,468
                                      636
                                     7,831
                                    $1,354
                                    141,228
                                    14,408
                                    126,820

                                     2036
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,637
                                      649
                                     7,988
                                    $1,327
                                    144,052
                                    13,225
                                    130,827

                                     2037
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,810
                                      662
                                     8,148
                                    $1,301
                                    146,933
                                    12,981
                                    133,952

                                     2038
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     8,986
                                      675
                                     8,311
                                    $1,276
                                    149,872
                                    12,732
                                    137,140

                                     2039
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     9,166
                                      689
                                     8,477
                                    $1,251
                                    152,870
                                    12,478
                                    140,392

                                     2040
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     9,349
                                      703
                                     8,646
                                    $1,226
                                    155,927
                                    12,219
                                    143,708

                                     2041
                                      $0
                                  $1,325,783
                                  $10,600,322
                                     9,536
                                      717
                                     8,819
                                    $1,202
                                    159,045
                                    11,954
                                    147,091

                                     2042

                                    152,500
                                    11,462
                                    141,037

                                     2043

                                    145,823
                                    10,960
                                    134,863

                                     2044

                                    139,013
                                    10,449
                                    128,564

                                     2045

                                    132,066
                                     9,926
                                    122,140

                                     2046

                                    124,981
                                     9,394
                                    115,587

                                     2047

                                    117,754
                                     8,851
                                    108,903

                                     2048

                                    110,382
                                     8,297
                                    102,086

                                     2049

                                    102,863
                                     7,731
                                    95,132

                                     2050

                                    95,194
                                     7,155
                                    88,039

                                     2051

                                    87,371
                                     6,567
                                    80,804

                                              2052

                                    79,392
                                     5,967
                                             73,424

                                     2053

                                    71,253
                                     5,356
                                    65,897

                                     2054

                                    62,951
                                     4,732
                                    58,220

                                     2055

                                    54,483
                                     4,095
                                    50,388

                                     2056

                                    45,846
                                     3,446
                                    42,400

                                     2057

                                    37,037
                                     2,784
                                    34,253

                                     2058

                                    28,051
                                     2,108
                                    25,942

                                     2059

                                    18,885
                                     1,419
                                    17,466

                                     2060

                                     9,536
                                      717
                                     8,819

                         Nationwide cumulative cost5
                                                                   $307,409,335

          Cumulative Emission Reduction over 20-year stove lifespan
                                   1,641,055
                                     $187
1 Estimated nationwide annual costs are in 2010 $ and are based on 6-year amortization periods of R&D costs at a 7% interest rate (during 2013-2018 for round one R&D and 2017-2022 for round two R&D), plus annual certification and reporting & recordkeeping costs (ongoing through 2041).  Years 2042 through 2060 are past the 20-year model design lifespan used in this analysis.
2 Estimated annual emissions are based on a forecasted revenue growth rate (as a surrogate for shipments) of 2.0 % from 2011 through 2041, in keeping with the average annual growth in real GDP predicted by the US Bureau of Economic Analysis (2013 Global Outlook projections prepared by the Conference Board in November 2012; see http://www.conference-board.org/data/globaloutlook.cfm).
3 2013 costs assume manufacturers will begin R&D phase and begin certifying models in anticipation of the 2014 rule compliance date. Emissions in 2013, however, are not included in this analysis because it is prior to the rule compliance date.
4 Estimated emissions assume Step 1 standard becomes applicable in 2014, Step 2 standard in 2017, and Step 3 standard in 2022. No emission reductions are estimated for woodstoves and pellet stoves until 2017, although emission reductions are estimated for all other devices starting in 2014.
5 The nationwide cumulative cost represents the cost to manufacturers resulting from the R&D round(s) to meet the proposed NSPS and the NSPS-caused certification and reporting & recordkeeping costs to bring these stoves to market from 2013 through 2041. These stoves have lifespans of 20 years or more; thus stoves shipped in 2041 will be emitting through 2060.

							Attachment A
 Table AA-1. Non-Catalytic, Catalytic, and Pellet Stove Emissions (HPBA Data)

                                     Rank
                                     Type
                               EPA M28 Weighted

                                Cat. / Non. Cat
                                Avg. Emissions

                                   or Pellet
                                    g/hour
                                                                              1
                                    Non-Cat
                                     0.70
                                                                              2
                                    Non-Cat
                                     0.80
                                                                              3
                                     Cat.
                                     0.80
                                                                              4
                                    Pellet
                                     1.00
                                                                              5
                                     Cat.
                                     1.10
                                                                              6
                                    Pellet
                                     1.10
                                                                              7
                                    Pellet
                                     1.10
                                                                              8
                                    Non-Cat
                                     1.10
                                                                              9
                                    Pellet
                                     1.15
                                                                             10
                                    Pellet
                                     1.20
                                                                             11
                                    Pellet
                                     1.20
                                                                             12
                                    Pellet
                                     1.30
                                                                             13
                                    Non-Cat
                                     1.30
                                                                             14
                                     Cat.
                                     1.30
                                                                             15
                                     Cat.
                                     1.35
                                                                             16
                                    Non-Cat
                                     1.40
                                                                             17
                                     Cat.
                                     1.40
                                                                             18
                                    Pellet
                                     1.40
                                                                             19
                                    Pellet
                                     1.40
                                                                             20
                                    Non-Cat
                                     1.50
                                                                             21
                                    Pellet
                                     1.50
                                                                             22
                                    Non-Cat
                                     1.60
                                                                             23
                                    Pellet
                                     1.60
                                                                             24
                                    Pellet
                                     1.60
                                                                             25
                                    Pellet
                                     1.60
                                                                             26
                                     Cat.
                                     1.60
                                                                             27
                                    Pellet
                                     1.67
                                                                             28
                                    Pellet
                                     1.70
                                                                             29
                                    Pellet
                                     1.80
                                                                             30
                                    Non-Cat
                                     1.89
                                                                             31
                                    Non-Cat
                                     1.90
                                                                             32
                                     Cat.
                                     1.90
                                                                             33
                                    Non-Cat
                                     2.00
                                                                             34
                                    Non-Cat
                                     2.00
                                                                             35
                                    Pellet
                                     2.00
                                                                             36
                                     Cat.
                                     2.00
                                                                             37
                                    Non-Cat
                                     2.00
                                                                             38
                                     Cat.
                                     2.10
                                                                             39
                                    Non-Cat
                                     2.10
                                                                             40
                                     Cat.
                                     2.10
                                                                             41
                                    Non-Cat
                                     2.10
                                                                             42
                                    Pellet
                                     2.20
                                                                             43
                                    Non-Cat
                                     2.30
                                                                             44
                                    Pellet
                                     2.30
                                                                             45
                                     Cat.
                                     2.40
                                                                             46
                                     Cat.
                                     2.40
                                                                             47
                                    Non-Cat
                                     2.40
                                                                             48
                                    Non-Cat
                                     2.40
                                                                             49
                                    Non-Cat
                                     2.40
                                                                             50
                                    Non-Cat
                                     2.43
                                                                             51
                                    Non-Cat
                                     2.50
                                                                             52
                                     Cat.
                                     2.50
                                                                             53
                                    Non-Cat
                                     2.60
                                                                             54
                                    Non-Cat
                                     2.60
                                                                             55
                                    Non-Cat
                                     2.60
                                                                             56
                                    Pellet
                                     2.60
                                                                             57
                                    Non-Cat
                                     2.70
                                                                             58
                                    Non-Cat
                                     2.70
                                                                             59
                                    Non-Cat
                                     2.70
                                                                             60
                                    Non-Cat
                                     2.70
                                                                             61
                                    Non-Cat
                                     2.88
                                                                             62
                                    Non-Cat
                                     2.90
                                                                             63
                                    Non-Cat
                                     2.90