In 2001, DOE initiated a rulemaking process to consider whether to amend the existing energy efficiency standards for furnaces and boilers. A key factor in DOE's consideration of new standards is their cost-effectiveness to consumers. Determining cost-effectiveness requires an appropriate comparison of the additional first cost of energy efficiency design options with the savings in operating costs. This report describes calculation of equipment energy consumption (fuel and electricity) based on estimated conditions in a sample of homes that are representative of expected furnace and boiler installations. To represent actual houses with furnaces and boilers in the United States, we used a set of houses from the Residential Energy Consumption Survey of 1997 conducted by the Energy Information Administration. Our calculation methodology estimates the energy consumption of alternative (more-efficient) furnaces, if they were to be used in each house in place of the existing equipment. We developed the method of calculation described in this report for non-weatherized gas furnaces. We generalized the energy consumption calculation for this product class to the other furnace product classes. Fuel consumption calculations for boilers are similar to those for the other furnace product classes. The electricity calculations for boilers are simpler than for furnaces, because boilers do not provide thermal distribution for space cooling as furnaces often do.