MEMORANDUM


DATE:	January 2015

SUBJECT:	40 CFR Part 60, Subparts AAA and QQQQ Estimated Three-Year and Annual Respondent Burden Cost of Reporting and Recordkeeping Requirements (Years 2018 to 2020).

FROM:	Joanne O'Loughlin and Beth Friedman, EC/R Incorporated

TO:		Docket ID Number EPA-HQ-OAR-2009-0734


1.0	PURPOSE

      The phased implementation schedule for the new source performance standards (NSPS) for new residential wood heaters (40 CFR part 60, revised subpart AAA and subpart QQQQ) results in differing recordkeeping and reporting impacts because it includes a two-step emission standards approach, each with different compliance dates. For purposes of this memorandum, we refer to these stepped emission standards as Step 1 and Step 2. The compliance date for meeting Step 1 emission standards provided in the rules occurs in 2015 for most types of wood heaters, and the compliance date for meeting Step 2 emission standards provided in the rules occurs in 2020. The recordkeeping and reporting respondent burden estimates included in the information collection requests (ICR) supporting statements for 40 CFR part 60, subparts AAA and subpart QQQQ include respondent burden estimates for years 2015 to 2017. The purpose of this memorandum is to document the recordkeeping and reporting respondent burden cost estimates (hourly labor and associated costs and not capital costs) as a result of the final amended rule for subpart AAA and final rule for subpart QQQQ for years 2018 to 2020. Section 2 presents a summary of the recordkeeping and reporting requirements for manufacturers, third-party certifiers and testing laboratories, and the number of respondents subject to subpart AAA and subpart QQQQ. The estimated recordkeeping and reporting respondent burden for years 2018 to 2020 for subpart AAA and subpart QQQQ are presented in Attachment 1 (subpart AAA) and Attachment 2 (subpart QQQQ) to this memorandum. 

2.0	SUBPART AAA AND SUBPART QQQQ RECORDKEEPING AND REPORTING REQUIREMENTS AND THE NUMBER OF AFFECTED RESPONDENTS

2.1 Summary of Recordkeeping and Reporting Requirements under Subparts AAA and QQQQ 

      Subpart AAA and subpart QQQQ require manufacturers of new residential wood heaters, hydronic heaters and forced-air furnaces, test laboratories and third-party certifiers to submit reports and to maintain records for demonstrating and documenting compliance. A third-party certification process is required. Under this process, for all heaters/stoves subject to subpart AAA and subpart QQQQ, after testing is completed by an approved test laboratory, a certification of conformity with the particulate matter emissions standards must be issued by a third-party certifier with whom the manufacturer has entered into contract for certification services. In order to avoid the potential for manufacturer model certification delays, subpart AAA and subpart QQQQ allow for automatic certification for wood heaters that meet Step 1 emission standards until the Step 2 emission standard compliance date (2020). Certifications are valid for 5 years, after which manufacturers need to either recertify or renew their model certifications.

      The third-party certifier is an independent third party that is ISO accredited to perform certifications, inspections and audits by an accreditation body. Accredited third-party certifiers under subpart AAA must maintain records of all certification tests, quality assurance (QA) program inspections and QA audit performance tests. The third-party certifier can certify conformity if the emission tests have been conducted per the appropriate guidelines; the test report is complete and accurate; the instrumentation used for the test was properly calibrated; the test report shows that the representative affected wood heater meets the applicable emission limits; and the QA plan prepared by the manufacturer is adequate to ensure that units within the model line will be similar in all material respects that would affect emissions to the wood heater submitted for certification testing. The third-party certifier is also required to conduct regular (at least annual) unannounced audits to ensure that the manufacturer's QA plan is being implemented and must prepare a report for each audit that fully documents the results of the audit. The manufacturer must include in its contract with the third-party certifier the authorization and requirement to submit all such reports to the Administrator. 

      Test laboratories must be approved by the EPA as test laboratories for subpart AAA and subpart QQQQ before beginning certification testing. Accredited approved test laboratories must maintain records of all certification tests, proficiency tests and compliance audit test data. Current EPA-accredited laboratories may retain their accreditation and may conduct testing as approved test labs until 3 years after the effective date of this rule (by 2018). 

      As of the year 2018, for both subpart AAA and subpart QQQQ, the third-party certifier-based process will have already been established; and we assume that all laboratories that will apply for accreditation and approval as third-party certifiers and test laboratories will have been completed. The respondent recordkeeping and reporting burden estimates presented in this memorandum assume that there is an overlap of laboratories that will obtain accreditation and approval as approved testing laboratories and as third-party certifiers under subpart AAA and subpart QQQQ. The only approved testing laboratory and third-party certifier recordkeeping and reporting burden costs not passed on to the manufacturer would be the burden associated with obtaining ISO accreditation (accounted for in burden estimates prepared for 2015-2017), proficiency testing and reporting required for approved test laboratories to maintain accreditation and approval as test labs, and specified recordkeeping requirements (e.g., certification tests, proficiency tests, QA program inspections, audit test results). 

      Manufacturers of new residential wood heaters, hydronic heaters and forced-air furnaces are required to submit applications for certification/recertification of model lines, submit results of emissions tests conducted to demonstrate that the model lines would comply with the emission limits and produce certified units according to a QA plan approved by an independent third-party certifier. The final rule allows heaters/stove models that meet specified EPA criteria that show compliance with the Step 1 emission standards to be automatically certified to meet the Step 1 emission standards under this final rule until the Step 2 emission standards compliance date. Manufacturers must submit a notification of the initial test and biennial reports that each certified model line remains unchanged. Manufacturers must also maintain records of all certification data, maintain results of QA program inspections and emissions test data, and seal and store the tested appliance. 

      Manufacturers of new residential wood heaters, hydronic heaters and forced-air furnaces are also required to apply permanent labels on each applicable unit prior to sale. These labels provide important compliance information to enforcement officials and important information to consumers for purchasing appliances. The permanent label requirements are assumed to be a capital cost per model developed and are not included in our respondent recordkeeping and reporting hourly burden estimates. Although not required, owners and operators of appliances subject to subpart AAA and subpart QQQQ also have the option of applying temporary labels for their cleanest heaters that meet or exceed the Step 2 emission standards prior to the Step 2 emissions standards 2020 compliance date. This optional temporary label allowance, if adopted by a manufacturer, would inform consumers of their status as already meeting the Step 2 emission standards 2020 compliance date. Additionally, subpart AAA and subpart QQQQ also allow wood heater manufacturers the option of applying temporary labels to wood heaters, hydronic heaters and forced-air furnaces that meet Step 2 emission standards based on cord wood instead of crib wood, allowing consumers to select heaters better tuned to in-home performance. The cost of temporary labels is not included in our recordkeeping and reporting hourly burden estimates because they are not required by subparts AAA and QQQQ. 

      Subpart AAA and subpart QQQQ include provisions that the EPA may select a wood heater, hydronic heater or forced-air furnace model for compliance audit testing. The testing of the model would be at the manufacturer's expense. For purposes of estimating respondent recordkeeping and reporting burden estimates, we assumed that this is an infrequent request and that only one audit affecting one manufacturer would occur in the 2018 to 2020 three-year period. Although the capital costs that would be associated with testing are not included in our respondent recordkeeping and reporting burden costs, we have included the manufacturer burden hours that would be associated with an EPA compliance audit. 

      Other non-routine and infrequent (if at all) recordkeeping and reporting requirements, such as the need for responses due to revocation or certification and/or laboratory accreditation and hearing and appeals procedures, are not included in the respondent recordkeeping and reporting burden estimates presented in this memorandum. Requests for waivers are also not included in the respondent recordkeeping and reporting burden estimates because they would, when granted, eliminate other reporting and recordkeeping burdens.

      Lastly, subpart AAA and subpart QQQQ require owners and operators of wood heaters, hydronic heaters and forced-air furnaces to operate their appliances consistent with the owner's manual for their model; and owners and operators of pellet fuel appliances are required to operate their pellet fuel appliances with specified grades of pellet fuels. Manufacturers are required to void warranties in cases of improper operation. Owner's manual content development requirements are a one-time manufacturer capital cost per certified model and are not included in the respondent recordkeeping and reporting hourly burden estimates.  There are no associated recordkeeping and reporting requirements for owners and operators.

      In summary, the components of recordkeeping and reporting respondent burden estimates for subpart AAA and subpart QQQQ are test notifications, applications for certification, biennial reporting for certified models, applications for accreditation, test report submittals, QA audit reports and test lab proficiency reporting.

2.2 Number of Respondents Subject to Subpart AAA and Subpart QQQQ Recordkeeping and Reporting Requirements

      There are approximately 66 manufacturers and 6 laboratories (inclusive of test labs and third-party certifiers) that would be subject to the final amended subpart AAA. As discussed in the manufacturer cost impacts memo, we estimate that there are currently 125 model lines of adjustable burn rate stoves produced by 34 manufacturers, 20 model lines of single burn rate stoves produced by 3 manufacturers and 125 model lines of pellet stoves produced by 29 manufacturers. We assume that 90% of existing adjustable burn rate models (0.9 X 125 models = 112.5)(34 manufacturers), 25% of existing pellet stove models (0.25 X 125 models = 31.25)(29 manufacturers), and 0% of single burn rate stove models (0 X 20 = 0) (3 manufacturers) will meet EPA criteria as meeting Step 1 emission standards, and therefore will qualify for automatic certification approval until 2020. For years 2018 to 2020, we assume that 270 models will be either newly certified or recertified under subpart AAA. We also assume that, as of 2018, there will be 6 approved test laboratories and 4 approved third-party certifiers under subpart AAA.

      There are approximately 30 hydronic heater manufacturers, 7 forced-air furnace manufacturers and 4 test laboratories that would be subject to subpart QQQQ. For forced-air furnaces, compliance with work practice/operational standards is required in 2015, and compliance with Step 1 emission limits for small (<65,000 BTU/hr models) and large furnaces (> 65,000 BTU/hr models) is required in 2016 and 2017, respectively. As discussed in the manufacturer costs impacts memo, we estimate that there are currently 50 model lines of forced-air furnaces produced by 7 manufacturers and 120 model lines of hydronic heaters (about 10 percent of which are indoor hydronic heaters) produced by 30 manufacturers. We assume that of these 170 existing model lines, 55 models (approximately 5 forced air furnace models and 50 hydronic heater models) will meet EPA criteria as meeting Step 1 emission standards and will qualify for automatic certification approval until 2020 and that 115 forced-air furnace models will certify to comply with Step 1 emission standards between 2015 and 2017. For years 2018 to 2020, we assume that 170 models will be either newly certified or recertified under subpart QQQQ. We assume that, as of 2018, there will be 4 approved test laboratories and 4 approved third-party certifiers under subpart QQQQ.

2.3 Summary of the Burden Estimates Associated with Subpart AAA and Subpart QQQQ Recordkeeping and Reporting Requirements for Years 2018 to 2020

	Attachment 1 presents the subpart AAA recordkeeping and reporting burden estimates for years 2018 to 2020. For years 2018-2020, the average annual burden for the recordkeeping and reporting requirements in subpart AAA for the estimated 72 respondents (66 manufacturers and 6 laboratories (including test laboratories and third-party certifiers) that will be subject to the New Residential Wood Heater NSPS is estimated to be 5,105 person-hours, with an average annual labor cost of $434,037 (approximately $352,000 for manufacturers, $9,000 for third-party certifiers and $73,000 for test laboratories). Attachment 2 presents the subpart QQQQ recordkeeping and reporting burden estimates for years 2018 to 2020. For years 2018-2020, the average annual burden for the recordkeeping and reporting requirements in subpart QQQQ for the estimated 41 respondents (37 manufacturers and 4 laboratories (including test laboratories and third-party certifiers) that will be subject to the New Residential Hydronic Heaters and Forced-Air Furnaces NSPS is estimated to be 3,061 person-hours, with an average annual labor cost of $250,309 (approximately $197,000 for manufacturers, $5,000 for third-party certifiers and $49,000 for test laboratories). The average hourly rates used for technical, management and clerical estimates are the same rates that were used for estimates for years 2015 to 2017.

                                                                               
                                                                               













                                 ATTACHMENT 1
NEW RESIDENTIAL WOOD HEATER NSPS (SUBPART AAA) RECORDKEEPING AND REPORTING BURDEN (YEARS 2018-2020)
 













                                       
                                       
                                 ATTACHMENT 2
NEW RESIDENTIAL HYDRONIC HEATERS AND FORCED-AIR FURNACES NSPS (SUBPART QQQQ) RECORDKEEPING AND REPORTING BURDEN (YEARS 2018-2020)


